Attached files
| file | filename |
|---|---|
| 8-K - FORM 8-K - VERIZON COMMUNICATIONS INC | d216849d8k.htm |
Exhibit 99
| Certain unaudited historical financial and operating information contained in this document has been updated to reflect the reclassification of results associated with the sale of our local exchange business and related landline activities in California, Florida and Texas (Divested Businesses) and other insignificant businesses consisting of our vehicle original equipment manufacturer (“OEM”) and Networkfleet businesses (collectively, the “Reclassified Results”) from the Wireline segment operating results to Corporate and other.
The updated information is identified in this document in blue shading. |
Verizon Communications Inc.
Table of Contents
| Condensed Consolidated Statements of Income |
3 | |||
| Non-Operational & Other Items |
5 | |||
| Condensed Consolidated Balance Sheets |
7 | |||
| Verizon – Selected Financial and Operating Statistics |
7 | |||
| Condensed Consolidated Statements of Cash Flows |
9 | |||
| Wireless – Selected Financial Results |
12 | |||
| Wireless – Selected Operating Statistics |
13 | |||
| Wireline – Selected Financial Results |
15 | |||
| Wireline – Selected Operating Statistics |
16 | |||
| Non-GAAP Reconciliations and Notes |
18 | |||
2
Verizon Communications Inc.
Condensed Consolidated Statements of Income
| (dollars in millions, except per share amounts) | ||||||||||||
| Unaudited |
2014 |
2015 |
1Q ‘16 |
|||||||||
|
Operating Revenues |
||||||||||||
| Service revenue and other |
$ | 116,122 | $ | 114,696 | $ | 28,217 | ||||||
| Wireless equipment revenues |
10,957 | 16,924 | 3,954 | |||||||||
| Total Operating Revenues |
127,079 | 131,620 | 32,171 | |||||||||
| Operating Expenses |
||||||||||||
| Cost of services |
28,306 | 29,438 | 7,614 | |||||||||
| Wireless cost of equipment |
21,625 | 23,119 | 4,998 | |||||||||
| Selling, general & administrative expense |
41,016 | 29,986 | 7,600 | |||||||||
| Depreciation and amortization expense |
16,533 | 16,017 | 4,017 | |||||||||
| Total Operating Expenses |
107,480 | 98,560 | 24,229 | |||||||||
| Operating Income |
19,599 | 33,060 | 7,942 | |||||||||
| Equity in earnings (losses) of unconsolidated businesses |
1,780 | (86 | ) | (20 | ) | |||||||
| Other income and (expense), net |
(1,194 | ) | 186 | 32 | ||||||||
| Interest expense |
(4,915 | ) | (4,920 | ) | (1,188 | ) | ||||||
| Income Before Provision for Income Taxes |
15,270 | 28,240 | 6,766 | |||||||||
| Provision for income taxes |
(3,314 | ) | (9,865 | ) | (2,336 | ) | ||||||
| Net Income |
$ | 11,956 | $ | 18,375 | $ | 4,430 | ||||||
| Net income attributable to noncontrolling interests |
$ | 2,331 | $ | 496 | $ | 120 | ||||||
| Net income attributable to Verizon |
9,625 | 17,879 | 4,310 | |||||||||
| Net Income |
$ | 11,956 | $ | 18,375 | $ | 4,430 | ||||||
| Basic Earnings per Common Share |
||||||||||||
| Net income attributable to Verizon |
$ | 2.42 | $ | 4.38 | $ | 1.06 | ||||||
| Weighted average number of common shares (in millions) |
3,974 | 4,085 | 4,080 | |||||||||
| Diluted Earnings per Common Share (1) |
||||||||||||
| Net Income attributable to Verizon |
$ | 2.42 | $ | 4.37 | $ | 1.06 | ||||||
| Weighted average number of common shares-assuming dilution (in millions) |
3,981 | 4,093 | 4,085 | |||||||||
Notes:
(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.
3
Verizon Communications Inc.
Condensed Consolidated Statements of Income
| (dollars in millions, except per share amounts)
|
||||||||||||||||||||||||||||||||||||
| 2014 | 2015 | 2016 | ||||||||||||||||||||||||||||||||||
| Unaudited | 1Q | 2Q | 3Q | 4Q | 1Q | 2Q | 3Q | 4Q | 1Q | |||||||||||||||||||||||||||
|
Operating Revenues |
||||||||||||||||||||||||||||||||||||
| Service revenue and other |
$ | 28,949 | $ | 29,096 | $ | 29,107 | $ | 28,970 | $ | 28,611 | $ | 28,363 | $ | 28,866 | $ | 28,856 | $ | 28,217 | ||||||||||||||||||
| Wireless equipment revenues |
1,869 | 2,387 | 2,479 | 4,222 | 3,373 | 3,861 | 4,292 | 5,398 | 3,954 | |||||||||||||||||||||||||||
| Total Operating Revenues |
30,818 | 31,483 | 31,586 | 33,192 | 31,984 | 32,224 | 33,158 | 34,254 | 32,171 | |||||||||||||||||||||||||||
| Operating Expenses |
||||||||||||||||||||||||||||||||||||
| Cost of services |
7,090 | 7,094 | 7,046 | 7,076 | 6,988 | 6,994 | 7,589 | 7,867 | 7,614 | |||||||||||||||||||||||||||
| Wireless cost of equipment |
4,099 | 4,993 | 5,206 | 7,327 | 5,108 | 5,455 | 5,716 | 6,840 | 4,998 | |||||||||||||||||||||||||||
| Selling, general & administrative expense |
8,332 | 7,550 | 8,277 | 16,857 | 7,939 | 7,974 | 8,309 | 5,764 | 7,600 | |||||||||||||||||||||||||||
| Depreciation and amortization expense |
4,137 | 4,161 | 4,167 | 4,068 | 3,989 | 3,980 | 4,009 | 4,039 | 4,017 | |||||||||||||||||||||||||||
| Total Operating Expenses |
23,658 | 23,798 | 24,696 | 35,328 | 24,024 | 24,403 | 25,623 | 24,510 | 24,229 | |||||||||||||||||||||||||||
| Operating Income (Loss) |
7,160 | 7,685 | 6,890 | (2,136 | ) | 7,960 | 7,821 | 7,535 | 9,744 | 7,942 | ||||||||||||||||||||||||||
| Equity in earnings (losses) of unconsolidated businesses |
1,902 | (43 | ) | (48 | ) | (31 | ) | (34 | ) | (18 | ) | (18 | ) | (16 | ) | (20 | ) | |||||||||||||||||||
| Other income and (expense), net |
(894 | ) | 66 | 71 | (437 | ) | 75 | 32 | 51 | 28 | 32 | |||||||||||||||||||||||||
| Interest expense |
(1,214 | ) | (1,164 | ) | (1,255 | ) | (1,282 | ) | (1,332 | ) | (1,208 | ) | (1,202 | ) | (1,178 | ) | (1,188 | ) | ||||||||||||||||||
| Income (Loss) Before (Provision) Benefit for Income Taxes |
6,954 | 6,544 | 5,658 | (3,886 | ) | 6,669 | 6,627 | 6,366 | 8,578 | 6,766 | ||||||||||||||||||||||||||
| (Provision) Benefit for income taxes |
(968 | ) | (2,220 | ) | (1,864 | ) | 1,738 | (2,331 | ) | (2,274 | ) | (2,195 | ) | (3,065 | ) | (2,336 | ) | |||||||||||||||||||
| Net Income (Loss) |
$ | 5,986 | $ | 4,324 | $ | 3,794 | $ | (2,148 | ) | $ | 4,338 | $ | 4,353 | $ | 4,171 | $ | 5,513 | $ | 4,430 | |||||||||||||||||
| Net income attributable to noncontrolling interests |
$ | 2,039 | $ | 110 | $ | 99 | $ | 83 | $ | 119 | $ | 122 | $ | 133 | $ | 122 | $ | 120 | ||||||||||||||||||
| Net income (loss) attributable to Verizon |
3,947 | 4,214 | 3,695 | (2,231 | ) | 4,219 | 4,231 | 4,038 | 5,391 | 4,310 | ||||||||||||||||||||||||||
| Net Income (Loss) |
$ | 5,986 | $ | 4,324 | $ | 3,794 | $ | (2,148 | ) | $ | 4,338 | $ | 4,353 | $ | 4,171 | $ | 5,513 | $ | 4,430 | |||||||||||||||||
| Basic Earnings (Loss) per Common Share |
||||||||||||||||||||||||||||||||||||
| Net Income (loss) attributable to Verizon |
$ | 1.15 | $ | 1.02 | $ | .89 | $ | (.54 | ) | $ | 1.03 | $ | 1.04 | $ | .99 | $ | 1.32 | $ | 1.06 | |||||||||||||||||
| Weighted average number of common shares (in millions) |
3,425 | 4,147 | 4,152 | 4,157 | 4,116 | 4,079 | 4,072 | 4,076 | 4,080 | |||||||||||||||||||||||||||
| Diluted Earnings (Loss) per Common Share (1) |
||||||||||||||||||||||||||||||||||||
| Net Income (loss) attributable to Verizon |
$ | 1.15 | $ | 1.01 | $ | .89 | $ | (.54 | ) | $ | 1.02 | $ | 1.04 | $ | .99 | $ | 1.32 | $ | 1.06 | |||||||||||||||||
| Weighted average number of common shares-assuming dilution (in millions) |
3,430 | 4,153 | 4,159 | 4,157 | 4,121 | 4,085 | 4,078 | 4,083 | 4,085 | |||||||||||||||||||||||||||
Notes:
(1) If there is a net loss, diluted EPS is the same as basic EPS. Diluted Earnings per Common Share includes the dilutive effect of shares issuable under our stock-based compensation plans, which represents the only potential dilution.
EPS may not add due to rounding.
4
Verizon Communications Inc.
Non-Operational & Other Items
| (Pre-tax dollars in millions)
|
||||||||||||
| Unaudited | 2014 | 2015 | 1Q ‘16 | |||||||||
|
Severance, Pension & Benefit Charges/(Credits) |
||||||||||||
| Operating expenses |
$ | 7,507 | $ | (2,256 | ) | $ | 165 | |||||
| Gain on Spectrum License Transactions |
||||||||||||
| Selling, general & administrative expense |
$ | (707 | ) | $ | (254 | ) | $ | (142) | ||||
| Early Debt Redemption and Other Costs |
||||||||||||
| Cost of services and sales |
$ | 27 | $ | - | $ | - | ||||||
| Selling, general & administrative expense |
307 | - | - | |||||||||
| Other income and (expense), net |
1,461 | - | - | |||||||||
| Gain on Sale of Omnitel Interest |
||||||||||||
| Equity in earnings of unconsolidated businesses |
$ | (1,924 | ) | $ | - | $ | - | |||||
| Wireless Transaction Costs |
||||||||||||
| Other income and (expense), net |
$ | (4 | ) | $ | - | $ | - | |||||
| Interest expense
|
415 | - | - | |||||||||
| Impact of Divested Operations (1) |
||||||||||||
| Revenues |
$ | 5,625 | $ | 5,280 | $ | 1,280 | ||||||
| Cost of services and sales |
2,004 | 1,852 | 482 | |||||||||
| Selling, general & administrative expense |
574 | 522 | 137 | |||||||||
| Depreciation and amortization |
1,026 | 88 | - | |||||||||
|
|
|
|||||||||||
| Total Expenses |
$ | 3,604 | $ | 2,462 | $ | 619 | ||||||
|
|
|
|||||||||||
| (1) Impact of Divested Operations has been updated for the impact of Divested Businesses. | ||||||||||||
5
Verizon Communications Inc.
Non-Operational & Other Items
| (Pre-tax dollars in millions) | ||||||||||||||||||||||||||||||||||||
| 2014 | 2015 | 2016 | ||||||||||||||||||||||||||||||||||
| Unaudited | 1Q | 2Q | 3Q | 4Q | 1Q | 2Q | 3Q | 4Q | 1Q | |||||||||||||||||||||||||||
| Severance, Pension & Benefit Charges/(Credits) |
||||||||||||||||||||||||||||||||||||
| Operating expenses |
$ | - | $ | - | $ | - | $ | 7,507 | $ | - | $ | - | $ | 342 | $ | (2,598 | ) | $ | 165 | |||||||||||||||||
| Gain on Spectrum License Transactions |
||||||||||||||||||||||||||||||||||||
| Selling, general & administrative expense |
$ | - | $ | (707 | ) | $ | - | $ | - | $ | - | $ | - | $ | - | $ | (254 | ) | $ | (142 | ) | |||||||||||||||
| Early Debt Redemption and Other Costs |
||||||||||||||||||||||||||||||||||||
| Cost of services and sales |
$ | - | $ | - | $ | - | $ | 27 | $ | - | $ | - | $ | - | $ | - | $ | - | ||||||||||||||||||
| Selling, general & administrative expense |
- | - | - | 307 | - | - | - | - | - | |||||||||||||||||||||||||||
| Other income and (expense), net |
923 | - | - | 538 | - | - | - | - | - | |||||||||||||||||||||||||||
| Gain on Sale of Omnitel Interest |
||||||||||||||||||||||||||||||||||||
| Equity in earnings of unconsolidated businesses |
$ | (1,924 | ) | $ | - | $ | - | $ | - | $ | - | $ | - | $ | - | $ | - | $ | - | |||||||||||||||||
| Wireless Transaction Costs |
||||||||||||||||||||||||||||||||||||
| Other income and (expense), net |
$ | (4 | ) | $ | - | $ | - | $ | - | $ | - | $ | - | $ | - | $ | - | $ | - | |||||||||||||||||
| Interest expense |
415 | - | - | - | - | - | - | - | - | |||||||||||||||||||||||||||
| Impact of Divested Operations (1) |
||||||||||||||||||||||||||||||||||||
| Revenues |
$ | 1,477 | $ | 1,471 | $ | 1,335 | $ | 1,342 | $ | 1,342 | $ | 1,327 | $ | 1,307 | $ | 1,304 | $ | 1,280 | ||||||||||||||||||
| Cost of services and sales |
559 | 562 | 442 | 441 | 457 | 451 | 466 | 478 | 482 | |||||||||||||||||||||||||||
| Selling, general & administrative expense |
150 | 145 | 147 | 132 | 146 | 135 | 124 | 117 | 137 | |||||||||||||||||||||||||||
| Depreciation and amortization |
300 | 239 | 244 | 243 | 88 | - | - | - | - | |||||||||||||||||||||||||||
| Total Expenses |
$ | 1,009 | $ | 946 | $ | 833 | $ | 816 | $ | 691 | $ | 586 | $ | 590 | $ | 595 | $ | 619 | ||||||||||||||||||
| (1) Impact of Divested Operations has been updated for the impact of Divested Businesses. | ||||||||||||||||||
6
Verizon Communications Inc.
Condensed Consolidated Balance Sheets
| (dollars in millions)
|
||||||||||||
| Unaudited
|
|
12/31/14
|
|
|
12/31/15
|
|
|
3/31/16
|
| |||
|
|
||||||||||||
| Assets |
||||||||||||
| Current assets |
||||||||||||
| Cash and cash equivalents |
$ | 10,598 | $ | 4,470 | $ | 5,846 | ||||||
| Short-term investments |
555 | 350 | - | |||||||||
| Accounts receivable, net |
13,993 | 13,457 | 12,485 | |||||||||
| Inventories |
1,153 | 1,252 | 1,142 | |||||||||
| Assets held for sale |
552 | 792 | 720 | |||||||||
| Prepaid expenses and other |
2,648 | 1,959 | 3,422 | |||||||||
|
|
|
|||||||||||
| Total current assets |
29,499 | 22,280 | 23,615 | |||||||||
|
|
|
|||||||||||
| Plant, property and equipment |
230,508 | 220,163 | 222,669 | |||||||||
| Less accumulated depreciation |
140,561 | 136,622 | 139,658 | |||||||||
|
|
|
|||||||||||
| 89,947 | 83,541 | 83,011 | ||||||||||
|
|
|
|||||||||||
| Investments in unconsolidated businesses |
802 | 796 | 821 | |||||||||
| Wireless licenses |
75,341 | 86,575 | 86,830 | |||||||||
| Goodwill |
24,639 | 25,331 | 25,364 | |||||||||
| Other intangible assets, net |
5,728 | 8,338 | 8,216 | |||||||||
| Non-current assets held for sale |
- | 10,267 | 10,432 | |||||||||
| Deposit for wireless licenses |
921 | - | - | |||||||||
| Other assets |
5,232 | 7,047 | 6,298 | |||||||||
|
|
|
|||||||||||
| Total Assets |
$ | 232,109 | $ | 244,175 | $ | 244,587 | ||||||
|
|
|
|||||||||||
| Liabilities and Equity |
||||||||||||
| Current liabilities |
||||||||||||
| Debt maturing within one year |
$ | 2,735 | $ | 6,489 | $ | 6,265 | ||||||
| Accounts payable and accrued liabilities |
16,680 | 19,362 | 18,118 | |||||||||
| Liabilities related to assets held for sale |
- | 463 | 452 | |||||||||
| Other |
8,572 | 8,738 | 8,477 | |||||||||
|
|
|
|||||||||||
| Total current liabilities |
27,987 | 35,052 | 33,312 | |||||||||
|
|
|
|||||||||||
| Long-term debt |
110,029 | 103,240 | 103,615 | |||||||||
| Employee benefit obligations |
33,280 | 29,957 | 29,665 | |||||||||
| Deferred income taxes |
41,563 | 45,484 | 45,568 | |||||||||
| Non-current liabilities related to assets held for sale |
- | 959 | 974 | |||||||||
| Other liabilities |
5,574 | 11,641 | 11,350 | |||||||||
| Equity |
||||||||||||
| Common stock |
424 | 424 | 424 | |||||||||
| Contributed capital |
11,155 | 11,196 | 11,191 | |||||||||
| Reinvested earnings |
2,447 | 11,246 | 13,253 | |||||||||
| Accumulated other comprehensive income |
1,111 | 550 | 459 | |||||||||
| Common stock in treasury, at cost |
(3,263 | ) | (7,416 | ) | (7,279) | |||||||
| Deferred compensation - employee stock ownership plans and other |
424 | 428 | 593 | |||||||||
| Noncontrolling interests |
1,378 | 1,414 | 1,462 | |||||||||
|
|
|
|||||||||||
| Total Equity |
13,676 | 17,842 | 20,103 | |||||||||
|
|
|
|||||||||||
| Total Liabilities and Equity |
$ | 232,109 | $ | 244,175 | $ | 244,587 | ||||||
|
|
|
|||||||||||
| Verizon - Selected Financial and Operating Statistics | ||||||||||||
| Unaudited
|
|
12/31/14
|
|
|
12/31/15
|
|
|
3/31/16
|
| |||
|
|
||||||||||||
| Total debt ($M) |
$ | 112,764 | $ | 109,729 | $ | 109,880 | ||||||
| Net debt ($M) |
$ | 102,166 | $ | 105,259 | $ | 104,034 | ||||||
| Net debt / Adjusted EBITDA(1) |
2.5 | x | 2.4 | x | 2.4x | |||||||
| Common shares outstanding end of period (M) |
4,155 | 4,073 | 4,076 | |||||||||
| Total employees |
177,300 | 177,700 | 173,300 | |||||||||
| Cash dividends declared per common share |
$ | 2.160 | $ | 2.230 | $ | .565 | ||||||
| (1) Net debt/Adjusted EBITDA has been updated for the impact of Divested Businesses. | ||||||
7
Verizon Communications Inc.
Condensed Consolidated Balance Sheets
| (dollars in millions) | ||||||||||||||||||||||||||||||||||||
| Unaudited
|
3/31/14
|
6/30/14
|
9/30/14
|
12/31/14
|
3/31/15
|
6/30/15
|
9/30/15
|
12/31/15
|
3/31/16
|
|||||||||||||||||||||||||||
| Assets |
||||||||||||||||||||||||||||||||||||
| Current assets |
||||||||||||||||||||||||||||||||||||
| Cash and cash equivalents |
$ | 2,907 | $ | 5,776 | $ | 7,218 | $ | 10,598 | $ | 4,386 | $ | 3,008 | $ | 3,875 | $ | 4,470 | $ | 5,846 | ||||||||||||||||||
| Short-term investments |
637 | 648 | 635 | 555 | 547 | 309 | 306 | 350 | - | |||||||||||||||||||||||||||
| Accounts receivable, net |
12,131 | 12,966 | 13,283 | 13,993 | 12,698 | 13,444 | 13,105 | 13,457 | 12,485 | |||||||||||||||||||||||||||
| Inventories |
881 | 1,073 | 1,206 | 1,153 | 1,076 | 1,149 | 1,319 | 1,252 | 1,142 | |||||||||||||||||||||||||||
| Assets held for sale |
4,162 | 14 | 317 | 552 | 893 | 774 | 895 | 792 | 720 | |||||||||||||||||||||||||||
| Prepaid expenses and other |
2,409 | 2,174 | 1,950 | 2,648 | 3,128 | 2,709 | 2,176 | 1,959 | 3,422 | |||||||||||||||||||||||||||
| Total current assets |
23,127 | 22,651 | 24,609 | 29,499 | 22,728 | 21,393 | 21,676 | 22,280 | 23,615 | |||||||||||||||||||||||||||
| Plant, property and equipment |
223,841 | 227,475 | 230,452 | 230,508 | 210,389 | 213,661 | 216,674 | 220,163 | 222,669 | |||||||||||||||||||||||||||
| Less accumulated depreciation |
134,785 | 137,763 | 140,520 | 140,561 | 128,747 | 131,129 | 134,112 | 136,622 | 139,658 | |||||||||||||||||||||||||||
| 89,056 | 89,712 | 89,932 | 89,947 | 81,642 | 82,532 | 82,562 | 83,541 | 83,011 | ||||||||||||||||||||||||||||
| Investments in unconsolidated businesses |
889 | 852 | 818 | 802 | 762 | 794 | 779 | 796 | 821 | |||||||||||||||||||||||||||
| Wireless licenses |
72,713 | 75,270 | 75,303 | 75,341 | 75,693 | 86,321 | 86,331 | 86,575 | 86,830 | |||||||||||||||||||||||||||
| Goodwill |
24,647 | 24,663 | 24,617 | 24,639 | 23,303 | 25,429 | 25,124 | 25,331 | 25,364 | |||||||||||||||||||||||||||
| Other intangible assets, net |
5,839 | 5,781 | 5,738 | 5,728 | 5,779 | 7,983 | 8,322 | 8,338 | 8,216 | |||||||||||||||||||||||||||
| Non-current assets held for sale |
- | - | - | - | 9,580 | 9,647 | 10,117 | 10,267 | 10,432 | |||||||||||||||||||||||||||
| Deposit for wireless licenses |
- | - | - | 921 | 10,430 | - | - | - | - | |||||||||||||||||||||||||||
| Other assets |
4,692 | 4,811 | 4,662 | 5,232 | 5,301 | 6,091 | 6,626 | 7,047 | 6,298 | |||||||||||||||||||||||||||
| Total Assets |
$ | 220,963 | $ | 223,740 | $ | 225,679 | $ | 232,109 | $ | 235,218 | $ | 240,190 | $ | 241,537 | $ | 244,175 | $ | 244,587 | ||||||||||||||||||
| Liabilities and Equity |
||||||||||||||||||||||||||||||||||||
| Current liabilities |
||||||||||||||||||||||||||||||||||||
| Debt maturing within one year |
$ | 2,152 | $ | 2,283 | $ | 1,603 | $ | 2,735 | $ | 4,439 | $ | 4,206 | $ | 7,264 | $ | 6,489 | $ | 6,265 | ||||||||||||||||||
| Accounts payable and accrued liabilities |
14,984 | 16,521 | 17,055 | 16,680 | 15,189 | 16,953 | 17,721 | 19,362 | 18,118 | |||||||||||||||||||||||||||
| Liabilities related to assets held for sale |
- | - | - | - | 572 | 457 | 461 | 463 | 452 | |||||||||||||||||||||||||||
| Other |
8,202 | 7,659 | 7,903 | 8,572 | 8,410 | 8,962 | 8,868 | 8,738 | 8,477 | |||||||||||||||||||||||||||
| Total current liabilities |
25,338 | 26,463 | 26,561 | 27,987 | 28,610 | 30,578 | 34,314 | 35,052 | 33,312 | |||||||||||||||||||||||||||
| Long-term debt |
107,133 | 107,214 | 107,148 | 110,029 | 108,452 | 108,978 | 104,583 | 103,240 | 103,615 | |||||||||||||||||||||||||||
| Employee benefit obligations |
26,977 | 26,342 | 25,770 | 33,280 | 33,010 | 32,711 | 32,962 | 29,957 | 29,665 | |||||||||||||||||||||||||||
| Deferred income taxes |
41,497 | 41,852 | 42,482 | 41,563 | 42,358 | 42,936 | 43,015 | 45,484 | 45,568 | |||||||||||||||||||||||||||
| Non-current liabilities related to assets held for sale |
- | - | - | - | 943 | 942 | 940 | 959 | 974 | |||||||||||||||||||||||||||
| Other liabilities |
6,167 | 5,857 | 5,750 | 5,574 | 11,086 | 11,171 | 11,181 | 11,641 | 11,350 | |||||||||||||||||||||||||||
| Equity |
||||||||||||||||||||||||||||||||||||
| Common stock |
424 | 424 | 424 | 424 | 424 | 424 | 424 | 424 | 424 | |||||||||||||||||||||||||||
| Contributed capital |
10,976 | 11,038 | 11,089 | 11,155 | 10,391 | 11,167 | 11,184 | 11,196 | 11,191 | |||||||||||||||||||||||||||
| Reinvested earnings (Accumulated deficit) |
3,534 | 5,551 | 6,964 | 2,447 | 4,422 | 6,418 | 8,156 | 11,246 | 13,253 | |||||||||||||||||||||||||||
| Accumulated other comprehensive income |
1,290 | 1,188 | 1,175 | 1,111 | 916 | 821 | 600 | 550 | 459 | |||||||||||||||||||||||||||
| Common stock in treasury, at cost |
(3,794) | (3,638) | (3,465) | (3,263) | (7,093) | (7,741) | (7,604) | (7,416) | (7,279) | |||||||||||||||||||||||||||
| Deferred compensation - employee stock ownership plans and other |
281 | 338 | 390 | 424 | 279 | 326 | 378 | 428 | 593 | |||||||||||||||||||||||||||
| Noncontrolling interests |
1,140 | 1,111 | 1,391 | 1,378 | 1,420 | 1,459 | 1,404 | 1,414 | 1,462 | |||||||||||||||||||||||||||
| Total Equity |
13,851 | 16,012 | 17,968 | 13,676 | 10,759 | 12,874 | 14,542 | 17,842 | 20,103 | |||||||||||||||||||||||||||
| Total Liabilities and Equity |
$ | 220,963 | $ | 223,740 | $ | 225,679 | $ | 232,109 | $ | 235,218 | $ | 240,190 | $ | 241,537 | $ | 244,175 | $ | 244,587 | ||||||||||||||||||
|
Verizon - Selected Financial and Operating Statistics
|
| |||||||||||||||||||||||||||||||||||
| Unaudited | 3/31/14
|
6/30/14
|
9/30/14
|
12/31/14
|
3/31/15
|
6/30/15
|
9/30/15
|
12/31/15
|
3/31/16
|
|||||||||||||||||||||||||||
| Total debt ($M) |
$ | 109,285 | $ | 109,497 | $ | 108,751 | $ | 112,764 | $ | 112,891 | $ | 113,184 | $ | 111,847 | $ | 109,729 | $ | 109,880 | ||||||||||||||||||
| Net debt ($M) |
$ | 106,378 | $ | 103,721 | $ | 101,533 | $ | 102,166 | $ | 108,505 | $ | 110,176 | $ | 107,972 | $ | 105,259 | $ | 104,034 | ||||||||||||||||||
| Net debt / Adjusted EBITDA (1) |
2.5 | x | 2.7 | x | 2.6 | x | 2.5 | x | 2.4 | x | 2.4 | x | ||||||||||||||||||||||||
| Common shares outstanding end of period (M) |
4,141 | 4,145 | 4,150 | 4,155 | 4,078 | 4,066 | 4,069 | 4,073 | 4,076 | |||||||||||||||||||||||||||
| Total employees |
176,900 | 177,800 | 178,500 | 177,300 | 176,200 | 178,500 | 177,900 | 177,700 | 173,300 | |||||||||||||||||||||||||||
| Cash dividends declared per common share |
$ | .530 | $ | .530 | $ | .550 | $ | .550 | $ | .550 | $ | .550 | $ | .565 | $ | .565 | $ | .565 | ||||||||||||||||||
| (1) Net debt/Adjusted EBITDA has been updated for the impact of Divested Businesses. | ||||||||||||||||||
8
Verizon Communications Inc.
Condensed Consolidated Statements of Cash Flows
| (dollars in millions) | ||||||||||||
| |
12 Months Ended |
|
|
12 Months Ended |
|
|
3 Months Ended |
| ||||
| Unaudited |
12/31/14 | 12/31/15 | 3/31/16 | |||||||||
|
Cash Flows From Operating Activities |
||||||||||||
| Net Income |
$ | 11,956 | $ | 18,375 | $ | 4,430 | ||||||
| Adjustments to reconcile net income to net cash provided by operating activities: |
||||||||||||
| Depreciation and amortization expense |
16,533 | 16,017 | 4,017 | |||||||||
| Employee retirement benefits |
8,130 | (1,747 | ) | 356 | ||||||||
| Deferred income taxes |
(92 | ) | 3,516 | 167 | ||||||||
| Provision for uncollectible accounts |
1,095 | 1,610 | 353 | |||||||||
| Equity in (earnings) losses of unconsolidated businesses, net of dividends received |
(1,743 | ) | 127 | 29 | ||||||||
| Changes in current assets and liabilities, net of effects from acquisition/disposition of businesses |
(2,160 | ) | 2,443 | (1,162) | ||||||||
| Other, net |
(3,088 | ) | (1,411 | ) | (771) | |||||||
|
|
|
|||||||||||
| Net cash provided by operating activities |
30,631 | 38,930 | 7,419 | |||||||||
|
|
|
|||||||||||
| Cash Flows From Investing Activities |
||||||||||||
| Capital expenditures (including capitalized software) |
(17,191 | ) | (17,775 | ) | (3,387) | |||||||
| Acquisitions of investments and businesses, net of cash acquired |
(182 | ) | (3,545 | ) | (161) | |||||||
| Acquisitions of wireless licenses |
(354 | ) | (9,942 | ) | (131) | |||||||
| Proceeds from dispositions of wireless licenses |
2,367 | - | - | |||||||||
| Proceeds from dispositions of businesses |
120 | 48 | - | |||||||||
| Other, net |
(616 | ) | 1,171 | 243 | ||||||||
|
|
|
|||||||||||
| Net cash used in investing activities |
(15,856 | ) | (30,043 | ) | (3,436) | |||||||
|
|
|
|||||||||||
| Cash Flows From Financing Activities |
||||||||||||
| Proceeds from long-term borrowings |
30,967 | 6,667 | - | |||||||||
| Repayments of long-term borrowings and capital lease obligations |
(17,669 | ) | (9,340 | ) | (376) | |||||||
| Decrease in short-term obligations, excluding current maturities |
(475 | ) | (344 | ) | (40) | |||||||
| Dividends paid |
(7,803 | ) | (8,538 | ) | (2,302) | |||||||
| Proceeds from sale of common stock |
34 | 40 | 3 | |||||||||
| Purchase of common stock for treasury |
- | (5,134 | ) | - | ||||||||
| Acquisition of noncontrolling interest |
(58,886 | ) | - | - | ||||||||
| Other, net |
(3,873 | ) | 1,634 | 108 | ||||||||
|
|
|
|||||||||||
| Net cash provided by (used in) financing activities |
(57,705 | ) | (15,015 | ) | (2,607) | |||||||
|
|
|
|||||||||||
| Increase (decrease) in cash and cash equivalents |
(42,930 | ) | (6,128 | ) | 1,376 | |||||||
| Cash and cash equivalents, beginning of period |
53,528 | 10,598 | 4,470 | |||||||||
|
|
|
|||||||||||
| Cash and cash equivalents, end of period |
$ | 10,598 | $ | 4,470 | $ | 5,846 | ||||||
|
|
|
|||||||||||
9
Verizon Communications Inc.
Condensed Consolidated Statements of Cash Flows
| (dollars in millions) | ||||||||||||||||||||||||||||||||||||
| |
3 Months Ended |
|
|
6 Months Ended |
|
|
9 Months Ended |
|
|
12 Months Ended |
|
|
3 Months Ended |
|
|
6 Months Ended |
|
|
9 Months Ended |
|
|
12 Months Ended |
|
|
3 Months Ended |
| ||||||||||
| Unaudited |
3/31/14 | 6/30/14 | 9/30/14 | 12/31/14 | 3/31/15 | 6/30/15 | 9/30/15 | 12/31/15 | 3/31/16 | |||||||||||||||||||||||||||
|
Cash Flows From Operating Activities |
||||||||||||||||||||||||||||||||||||
| Net Income |
$ | 5,986 | $ | 10,310 | $ | 14,104 | $ | 11,956 | $ | 4,338 | $ | 8,691 | $ | 12,862 | $ | 18,375 | $ | 4,430 | ||||||||||||||||||
| Adjustments to reconcile net income to net cash provided by operating activities: |
||||||||||||||||||||||||||||||||||||
| Depreciation and amortization expense |
4,137 | 8,298 | 12,465 | 16,533 | 3,989 | 7,969 | 11,978 | 16,017 | 4,017 | |||||||||||||||||||||||||||
| Employee retirement benefits |
281 | 562 | 843 | 8,130 | 284 | 561 | 1,184 | (1,747 | ) | 356 | ||||||||||||||||||||||||||
| Deferred income taxes |
(155 | ) | 253 | 914 | (92 | ) | 823 | 826 | 890 | 3,516 | 167 | |||||||||||||||||||||||||
| Provision for uncollectible accounts |
231 | 473 | 684 | 1,095 | 383 | 744 | 1,136 | 1,610 | 353 | |||||||||||||||||||||||||||
| Equity in (earnings) losses of unconsolidated businesses, net of dividends received |
(1,894 | ) | (1,841 | ) | (1,785 | ) | (1,743 | ) | 44 | 72 | 98 | 127 | 29 | |||||||||||||||||||||||
| Changes in current assets and liabilities, net of effects from acquisition/disposition of businesses |
(1,626 | ) | (847 | ) | (816 | ) | (2,160 | ) | (888 | ) | 416 | 1,443 | 2,443 | (1,162) | ||||||||||||||||||||||
| Other, net |
179 | (2,404 | ) | (3,252 | ) | (3,088 | ) | 1,196 | (373 | ) | (1,165 | ) | (1,411 | ) | (771) | |||||||||||||||||||||
|
|
|
|||||||||||||||||||||||||||||||||||
| Net cash provided by operating activities |
7,139 | 14,804 | 23,157 | 30,631 | 10,169 | 18,906 | 28,426 | 38,930 | 7,419 | |||||||||||||||||||||||||||
|
|
|
|||||||||||||||||||||||||||||||||||
| Cash Flows From Investing Activities |
||||||||||||||||||||||||||||||||||||
| Capital expenditures (including capitalized software) |
(4,150 | ) | (8,494 | ) | (12,624 | ) | (17,191 | ) | (3,665 | ) | (8,153 | ) | (12,540 | ) | (17,775 | ) | (3,387) | |||||||||||||||||||
| Acquisitions of investments and businesses, net of cash acquired |
(157 | ) | (179 | ) | (180 | ) | (182 | ) | (2 | ) | (3,225 | ) | (3,205 | ) | (3,545 | ) | (161) | |||||||||||||||||||
| Acquisitions of wireless licenses |
(213 | ) | (271 | ) | (343 | ) | (354 | ) | (9,555 | ) | (9,677 | ) | (9,811 | ) | (9,942 | ) | (131) | |||||||||||||||||||
| Proceeds from dispositions of wireless licenses |
- | 2,367 | 2,367 | 2,367 | - | - | - | - | - | |||||||||||||||||||||||||||
| Proceeds from dispositions of businesses |
- | - | 120 | 120 | - | - | - | 48 | - | |||||||||||||||||||||||||||
| Other, net |
(11 | ) | 231 | 230 | (616 | ) | 46 | 884 | 960 | 1,171 | 243 | |||||||||||||||||||||||||
|
|
|
|||||||||||||||||||||||||||||||||||
| Net cash used in investing activities |
(4,531 | ) | (6,346 | ) | (10,430 | ) | (15,856 | ) | (13,176 | ) | (20,171 | ) | (24,596 | ) | (30,043 | ) | (3,436) | |||||||||||||||||||
|
|
|
|||||||||||||||||||||||||||||||||||
| Cash Flows From Financing Activities |
||||||||||||||||||||||||||||||||||||
| Proceeds from long-term borrowings |
16,952 | 20,245 | 21,575 | 30,967 | 6,497 | 6,497 | 6,497 | 6,667 | - | |||||||||||||||||||||||||||
| Repayments of long-term borrowings and capital lease obligations |
(7,951 | ) | (11,317 | ) | (12,594 | ) | (17,669 | ) | (5,576 | ) | (5,797 | ) | (7,168 | ) | (9,340 | ) | (376) | |||||||||||||||||||
| Increase (decrease) in short-term obligations, excluding current maturities |
252 | 279 | (426 | ) | (475 | ) | 482 | (106 | ) | (305 | ) | (344 | ) | (40) | ||||||||||||||||||||||
| Dividends paid |
(1,517 | ) | (3,583 | ) | (5,653 | ) | (7,803 | ) | (2,153 | ) | (4,266 | ) | (6,373 | ) | (8,538 | ) | (2,302) | |||||||||||||||||||
| Proceeds from sale of common stock |
34 | 34 | 34 | 34 | - | - | 31 | 40 | 3 | |||||||||||||||||||||||||||
| Purchase of common stock for treasury |
- | - | - | - | (5,000 | ) | (5,074 | ) | (5,134 | ) | (5,134 | ) | - | |||||||||||||||||||||||
| Acquisition of noncontrolling interest |
(58,886 | ) | (58,886 | ) | (58,886 | ) | (58,886 | ) | - | - | - | - | - | |||||||||||||||||||||||
| Other, net |
(2,113 | ) | (2,982 | ) | (3,087 | ) | (3,873 | ) | 2,545 | 2,421 | 1,899 | 1,634 | 108 | |||||||||||||||||||||||
|
|
|
|||||||||||||||||||||||||||||||||||
| Net cash provided by (used in) financing activities |
(53,229 | ) | (56,210 | ) | (59,037 | ) | (57,705 | ) | (3,205 | ) | (6,325 | ) | (10,553 | ) | (15,015 | ) | (2,607) | |||||||||||||||||||
|
|
|
|||||||||||||||||||||||||||||||||||
| Increase (decrease) in cash and cash equivalents |
(50,621 | ) | (47,752 | ) | (46,310 | ) | (42,930 | ) | (6,212 | ) | (7,590 | ) | (6,723 | ) | (6,128 | ) | 1,376 | |||||||||||||||||||
| Cash and cash equivalents, beginning of period |
53,528 | 53,528 | 53,528 | 53,528 | 10,598 | 10,598 | 10,598 | 10,598 | 4,470 | |||||||||||||||||||||||||||
|
|
|
|||||||||||||||||||||||||||||||||||
| Cash and cash equivalents, end of period |
$ | 2,907 | $ | 5,776 | $ | 7,218 | $ | 10,598 | $ | 4,386 | $ | 3,008 | $ | 3,875 | $ | 4,470 | $ | 5,846 | ||||||||||||||||||
|
|
|
|||||||||||||||||||||||||||||||||||
10
11
Verizon Communications Inc.
Wireless - Selected Financial Results
| (dollars in millions) | ||||||||||||||||||||||||||||||||||||
| 2014 | 2015 | 2016 | ||||||||||||||||||||||||||||||||||
| Unaudited | 1Q | 2Q | 3Q | 4Q | 1Q | 2Q | 3Q | 4Q | 1Q | |||||||||||||||||||||||||||
| Operating Revenues |
||||||||||||||||||||||||||||||||||||
| Service |
$ | 17,987 | $ | 18,078 | $ | 18,356 | $ | 18,209 | $ | 17,914 | $ | 17,689 | $ | 17,598 | $ | 17,195 | $ | 16,809 | ||||||||||||||||||
| Equipment |
1,870 | 2,387 | 2,480 | 4,222 | 3,373 | 3,861 | 4,292 | 5,398 | 3,954 | |||||||||||||||||||||||||||
| Other |
1,022 | 1,018 | 999 | 1,018 | 1,041 | 1,063 | 1,115 | 1,141 | 1,241 | |||||||||||||||||||||||||||
| Total Operating Revenues |
20,879 | 21,483 | 21,835 | 23,449 | 22,328 | 22,613 | 23,005 | 23,734 | 22,004 | |||||||||||||||||||||||||||
| Operating Expenses |
||||||||||||||||||||||||||||||||||||
| Cost of services |
1,757 | 1,749 | 1,837 | 1,857 | 1,851 | 1,948 | 2,010 | 1,994 | 1,942 | |||||||||||||||||||||||||||
| Cost of equipment |
4,099 | 4,993 | 5,206 | 7,327 | 5,108 | 5,455 | 5,716 | 6,840 | 4,998 | |||||||||||||||||||||||||||
| Selling, general & administrative expense |
5,644 | 5,649 | 5,698 | 6,611 | 5,369 | 5,289 | 5,351 | 5,796 | 4,891 | |||||||||||||||||||||||||||
| Depreciation and amortization expense |
2,061 | 2,107 | 2,139 | 2,152 | 2,190 | 2,225 | 2,260 | 2,305 | 2,293 | |||||||||||||||||||||||||||
| Total Operating Expenses |
13,561 | 14,498 | 14,880 | 17,947 | 14,518 | 14,917 | 15,337 | 16,935 | 14,124 | |||||||||||||||||||||||||||
| Operating Income |
$ | 7,318 | $ | 6,985 | $ | 6,955 | $ | 5,502 | $ | 7,810 | $ | 7,696 | $ | 7,668 | $ | 6,799 | $ | 7,880 | ||||||||||||||||||
| Operating Income Margin |
35.0% | 32.5% | 31.9% | 23.5% | 35.0% | 34.0% | 33.3% | 28.6% | 35.8% | |||||||||||||||||||||||||||
| Segment EBITDA |
$ | 9,379 | $ | 9,092 | $ | 9,094 | $ | 7,654 | $ | 10,000 | $ | 9,921 | $ | 9,928 | $ | 9,104 | $ | 10,173 | ||||||||||||||||||
| Segment EBITDA Margin |
44.9% | 42.3% | 41.6% | 32.6% | 44.8% | 43.9% | 43.2% | 38.4% | 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.
12
Verizon Communications Inc.
Wireless - Selected Operating Statistics
| 2014 | 2015 | 2016 | ||||||||||||||||||||||||||||||||||
| Unaudited | 1Q | 2Q | 3Q | 4Q | 1Q | 2Q | 3Q | 4Q | 1Q | |||||||||||||||||||||||||||
| Connections (‘000) |
||||||||||||||||||||||||||||||||||||
| Retail postpaid |
97,273 | 98,593 | 100,103 | 102,079 | 102,637 | 103,731 | 105,023 | 106,528 | 107,171 | |||||||||||||||||||||||||||
| Retail prepaid |
6,057 | 6,044 | 6,053 | 6,132 | 5,945 | 5,817 | 5,737 | 5,580 | 5,402 | |||||||||||||||||||||||||||
| Retail |
103,330 | 104,637 | 106,156 | 108,211 | 108,582 | 109,548 | 110,760 | 112,108 | 112,573 | |||||||||||||||||||||||||||
| Net Add Detail (‘000) (1) |
||||||||||||||||||||||||||||||||||||
| Retail postpaid |
539 | 1,441 | 1,516 | 1,986 | 565 | 1,134 | 1,289 | 1,519 | 640 | |||||||||||||||||||||||||||
| Retail prepaid |
10 | (14 | ) | 9 | 81 | (188 | ) | (126 | ) | (80 | ) | (157 | ) | (177 | ) | |||||||||||||||||||||
| Retail |
549 | 1,427 | 1,525 | 2,067 | 377 | 1,008 | 1,209 | 1,362 | 463 | |||||||||||||||||||||||||||
| Account Statistics |
||||||||||||||||||||||||||||||||||||
| Retail postpaid accounts (‘000) |
35,061 | 35,186 | 35,435 | 35,616 | 35,516 | 35,560 | 35,677 | 35,736 | 35,720 | |||||||||||||||||||||||||||
| Retail postpaid connections per account |
2.77 | 2.80 | 2.82 | 2.87 | 2.89 | 2.92 | 2.94 | 2.98 | 3.00 | |||||||||||||||||||||||||||
| Retail postpaid ARPA (2) |
$ | 159.67 | $ | 159.73 | $ | 161.24 | $ | 158.82 | $ | 156.14 | $ | 153.73 | $ | 152.38 | $ | 148.30 | $ | 145.34 | ||||||||||||||||||
| Retail postpaid I-ARPA (3) |
$ | 160.32 | $ | 161.43 | $ | 163.93 | $ | 162.98 | $ | 162.78 | $ | 163.01 | $ | 164.31 | $ | 164.40 | $ | 165.03 | ||||||||||||||||||
| Churn Detail |
||||||||||||||||||||||||||||||||||||
| Retail postpaid |
1.07% | 0.94% | 1.00% | 1.14% | 1.03% | 0.90% | 0.93% | 0.96% | 0.96% | |||||||||||||||||||||||||||
| Retail |
1.37% | 1.25% | 1.29% | 1.39% | 1.33% | 1.18% | 1.21% | 1.23% | 1.23% | |||||||||||||||||||||||||||
| Retail Postpaid Connection Statistics |
||||||||||||||||||||||||||||||||||||
| Total Smartphone postpaid % of phones activated |
90.1% | 90.8% | 91.0% | 93.6% | 91.4% | 91.7% | 91.3% | 93.7% | 92.5% | |||||||||||||||||||||||||||
| Total Smartphone postpaid phone base |
72.3% | 74.6% | 76.5% | 78.6% | 79.9% | 81.2% | 82.4% | 83.7% | 84.7% | |||||||||||||||||||||||||||
| Total Internet postpaid base |
11.3% | 12.3% | 13.1% | 14.1% | 14.8% | 15.4% | 16.0% | 16.8% | 17.3% | |||||||||||||||||||||||||||
| 4G LTE devices as % of retail postpaid connections |
49.2% | 54.5% | 59.3% | 66.0% | 69.9% | 73.3% | 76.2% | 79.2% | 81.1% | |||||||||||||||||||||||||||
| Other Operating Statistics |
||||||||||||||||||||||||||||||||||||
| Capital expenditures ($M) |
$ | 2,554 | $ | 2,771 | $ | 2,483 | $ | 2,707 | $ | 2,419 | $ | 3,126 | $ | 2,921 | $ | 3,259 | $ | 2,190 | ||||||||||||||||||
|
Footnotes: (1) Connection net additions exclude acquisitions and adjustments.
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.
|
| |||||||||||||||||||||||||||||||||||
| (2)(3) Retail postpaid ARPA (average service revenue per account from retail postpaid accounts) and Retail postpaid I-ARPA (average service revenue per account from retail postpaid accounts plus recurring device installment billings). | ||||||||||||||||||||||||||||||||||||
13
14
Verizon Communications Inc.
| Wireline - Selected Financial Results(1) |
| (dollars in millions) | ||||||||||||||||||||||||||||||||||||
| 2014 | 2015 | 2016 | ||||||||||||||||||||||||||||||||||
| Unaudited | 1Q | 2Q | 3Q | 4Q | 1Q | 2Q | 3Q | 4Q | 1Q | |||||||||||||||||||||||||||
| Operating Revenues |
||||||||||||||||||||||||||||||||||||
| Consumer retail |
$ 2,987 | $ 3,014 | $ 3,053 | $ 3,114 | $ 3,128 | $ 3,174 | $ 3,168 | $ 3,226 | $ 3,180 | |||||||||||||||||||||||||||
| Small business |
462 | 462 | 456 | 449 | 445 | 441 | 434 | 424 | 422 | |||||||||||||||||||||||||||
| Mass Markets |
3,449 | 3,476 | 3,509 | 3,563 | 3,573 | 3,615 | 3,602 | 3,650 | 3,602 | |||||||||||||||||||||||||||
| Global Enterprise |
3,266 | 3,234 | 3,163 | 3,151 | 3,047 | 3,007 | 2,988 | 3,008 | 2,956 | |||||||||||||||||||||||||||
| Global Wholesale |
1,394 | 1,373 | 1,363 | 1,318 | 1,339 | 1,310 | 1,289 | 1,325 | 1,283 | |||||||||||||||||||||||||||
| Other |
139 | 139 | 140 | 116 | 91 | 81 | 88 | 81 | 82 | |||||||||||||||||||||||||||
| Total Operating Revenues |
8,248 | 8,222 | 8,175 | 8,148 | 8,050 | 8,013 | 7,967 | 8,064 | 7,923 | |||||||||||||||||||||||||||
| Operating Expenses |
||||||||||||||||||||||||||||||||||||
| Cost of services |
4,866 | 4,858 | 4,845 | 4,844 | 4,785 | 4,704 | 4,695 | 4,632 | 4,644 | |||||||||||||||||||||||||||
| Selling, general & administrative expense |
1,969 | 1,835 | 1,848 | 1,742 | 1,838 | 1,813 | 1,770 | 1,835 | 1,770 | |||||||||||||||||||||||||||
| Depreciation and amortization expense |
1,723 | 1,756 | 1,724 | 1,614 | 1,647 | 1,695 | 1,611 | 1,590 | 1,576 | |||||||||||||||||||||||||||
| Total Operating Expenses |
8,558 | 8,449 | 8,417 | 8,200 | 8,270 | 8,212 | 8,076 | 8,057 | 7,990 | |||||||||||||||||||||||||||
| Operating Income (Loss) |
(310) | (227) | (242) | (52) | (220) | (199) | (109) | 7 | (67) | |||||||||||||||||||||||||||
| Operating Income (Loss) Margin |
(3.8)% | (2.8)% | (3.0)% | (0.6)% | (2.7)% | (2.5)% | (1.4)% | 0.1% | (0.8)% | |||||||||||||||||||||||||||
| Segment EBITDA |
$ 1,413 | $ 1,529 | $ 1,482 | $ 1,562 | $ 1,427 | $ 1,496 | $ 1,502 | $ 1,597 | $ 1,509 | |||||||||||||||||||||||||||
| Segment EBITDA Margin |
17.1% | 18.6% | 18.1% | 19.2% | 17.7% | 18.7% | 18.9% | 19.8% | 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.
| (1) Wireline -Selected Financial Results have been updated for the impact of the Reclassified Results. |
15
Verizon Communications Inc.
| Wireline - Selected Operating Statistics (1) | ||||||||||||||||||||||||||||||||||||
| 2014 | 2015 | 2016 | ||||||||||||||||||||||||||||||||||
| Unaudited | 1Q | 2Q | 3Q | 4Q | 1Q | 2Q | 3Q | 4Q | 1Q | |||||||||||||||||||||||||||
| Connections (‘000) |
||||||||||||||||||||||||||||||||||||
| Fios Video Subscribers |
4,165 | 4,252 | 4,352 | 4,453 | 4,535 | 4,565 | 4,610 | 4,635 | 4,678 | |||||||||||||||||||||||||||
| Fios Internet Subscribers |
4,704 | 4,818 | 4,946 | 5,068 | 5,178 | 5,240 | 5,336 | 5,418 | 5,508 | |||||||||||||||||||||||||||
| Fios Digital Voice residence connections |
3,508 | 3,585 | 3,651 | 3,727 | 3,784 | 3,788 | 3,829 | 3,872 | 3,917 | |||||||||||||||||||||||||||
| Fios Digital connections |
12,377 | 12,655 | 12,949 | 13,248 | 13,497 | 13,593 | 13,775 | 13,925 | 14,103 | |||||||||||||||||||||||||||
| HSI |
2,161 | 2,091 | 2,023 | 1,956 | 1,891 | 1,820 | 1,738 | 1,667 | 1,589 | |||||||||||||||||||||||||||
| Total Broadband connections |
6,865 | 6,909 | 6,969 | 7,024 | 7,069 | 7,060 | 7,074 | 7,085 | 7,097 | |||||||||||||||||||||||||||
| Primary residence switched access connections |
4,895 | 4,730 | 4,566 | 4,415 | 4,264 | 4,113 | 3,951 | 3,799 | 3,643 | |||||||||||||||||||||||||||
| Primary residence connections |
8,403 | 8,315 | 8,217 | 8,142 | 8,048 | 7,901 | 7,780 | 7,671 | 7,560 | |||||||||||||||||||||||||||
| Total retail residence voice connections |
8,782 | 8,679 | 8,565 | 8,475 | 8,368 | 8,209 | 8,072 | 7,949 | 7,824 | |||||||||||||||||||||||||||
| Total voice connections |
16,878 | 16,613 | 16,375 | 16,140 | 15,897 | 15,586 | 15,324 | 15,035 | 14,781 | |||||||||||||||||||||||||||
| Net Add Detail (‘000) |
||||||||||||||||||||||||||||||||||||
| Fios Video Subscribers |
54 | 87 | 100 | 101 | 82 | 30 | 45 | 25 | 43 | |||||||||||||||||||||||||||
| Fios Internet Subscribers |
79 | 114 | 128 | 122 | 110 | 62 | 96 | 82 | 90 | |||||||||||||||||||||||||||
| Fios Digital Voice residence connections |
84 | 77 | 66 | 76 | 57 | 4 | 41 | 43 | 45 | |||||||||||||||||||||||||||
| Fios Digital connections |
217 | 278 | 294 | 299 | 249 | 96 | 182 | 150 | 178 | |||||||||||||||||||||||||||
| HSI |
(59) | (70) | (68) | (67) | (65) | (71) | (82) | (71) | (78) | |||||||||||||||||||||||||||
| Total Broadband connections |
20 | 44 | 60 | 55 | 45 | (9) | 14 | 11 | 12 | |||||||||||||||||||||||||||
| Primary residence switched access connections |
(189) | (165) | (164) | (151) | (151) | (151) | (162) | (152) | (156) | |||||||||||||||||||||||||||
| Primary residence connections |
(105) | (88) | (98) | (75) | (94) | (147) | (121) | (109) | (111) | |||||||||||||||||||||||||||
| Total retail residence voice connections |
(125) | (103) | (114) | (90) | (107) | (159) | (137) | (123) | (125) | |||||||||||||||||||||||||||
| Total voice connections |
(270) | (265) | (238) | (235) | (243) | (311) | (262) | (289) | (254) | |||||||||||||||||||||||||||
| Revenue Statistics |
||||||||||||||||||||||||||||||||||||
| Fios revenues ($M) |
$ 2,341 | $ 2,415 | $ 2,483 | $ 2,567 | $ 2,607 | $ 2,684 | $ 2,695 | $ 2,775 | $ 2,766 | |||||||||||||||||||||||||||
| Other Operating Statistics |
||||||||||||||||||||||||||||||||||||
| Capital expenditures ($M) |
$ 1,385 | $ 1,345 | $ 1,464 | $ 1,556 | $ 1,077 | $ 1,134 | $ 1,202 | $ 1,636 | $ 1,006 | |||||||||||||||||||||||||||
| Wireline employees (K) (2) |
70.1 | 70.0 | 68.8 | 66.5 | 65.3 | 62.8 | 61.8 | 61.0 | 59.5 | |||||||||||||||||||||||||||
| Fios Video Open for Sale (K) |
11,990 | 12,158 | 12,372 | 12,536 | 12,681 | 12,863 | 13,024 | 13,196 | 13,366 | |||||||||||||||||||||||||||
| Fios Video penetration |
34.7% | 35.0% | 35.2% | 35.5% | 35.8% | 35.5% | 35.4% | 35.1% | 35.0% | |||||||||||||||||||||||||||
| Fios Internet Open for Sale (K) |
12,292 | 12,465 | 12,671 | 12,825 | 12,970 | 13,154 | 13,317 | 13,491 | 13,661 | |||||||||||||||||||||||||||
| Fios Internet penetration |
38.3% | 38.7% | 39.0% | 39.5% | 39.9% | 39.8% | 40.1% | 40.2% | 40.3% | |||||||||||||||||||||||||||
| 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.
|
| |||||||||||||||||||||||||||||||||||
| (1) Wireline -Selected Operating Statistics have been updated for the impact of Divested Businesses. | ||||||||||||||||||||||||||||||||||||
| (2) Wireline employees have been updated for the impact of Reclassified Results. | ||||||||||||||||||||||||||||||||||||
16
17
Verizon Communications Inc.
Definitions – Non-GAAP Measures
Non-GAAP Measures
Verizon’s financial information was prepared in conformity with generally accepted accounting principles (GAAP) as well as on a non-GAAP basis. It is management’s intent to provide non-GAAP financial information to enhance the understanding of Verizon’s GAAP financial information and it should be considered by the reader in addition to, but not instead of, the financial statements prepared in accordance with GAAP. Each non-GAAP financial measure is presented along with the corresponding GAAP measure so as not to imply that more emphasis should be placed on the non-GAAP measure. The non-GAAP financial information presented may be determined or calculated differently by other companies.
Consolidated Operating Revenues Excluding AOL
Verizon consolidated operating revenues excluding AOL is a non-GAAP financial measure that management believes is useful to investors and other users of our financial information in evaluating our operating results and understanding operating trends. Consolidated operating revenues excluding AOL exclude the operating revenues associated with AOL Inc., which was acquired by Verizon on June 23, 2015.
EBITDA and EBITDA Margin
Verizon consolidated earnings before interest, taxes, depreciation and amortization (Consolidated EBITDA), consolidated EBITDA margin, Wireless Segment EBITDA (Wireless EBITDA), Wireless Segment EBITDA margin (Wireless EBITDA margin), Wireline Segment EBITDA (Wireline EBITDA) and Wireline Segment EBITDA margin (Wireline EBITDA margin) are non-GAAP financial measures and management believes these measures are useful to investors and other users of our financial information in evaluating operating profitability on a more variable cost basis as they exclude depreciation and amortization expense related primarily to capital expenditures and acquisitions that occurred in prior years, as well as in evaluating operating performance in relation to Verizon’s competitors.
Verizon consolidated adjusted EBITDA (Consolidated Adjusted EBITDA) is a non-GAAP financial measure and does not purport to be an alternative to GAAP as a measure of operating performance. Management believes this measure provides relevant and useful information to investors and other users of our financial information in evaluating the effectiveness of our operations and underlying business trends in a manner that is consistent with management’s evaluation of business performance.
Consolidated EBITDA is calculated by adding back interest, taxes, depreciation and amortization expense, equity in losses of unconsolidated businesses and other (income) and expense, net to net income. Consolidated EBITDA margin is calculated by dividing Consolidated EBITDA by consolidated operating revenues.
Consolidated Adjusted EBITDA is calculated by excluding the effect of non-operational items and the impact of divested operations from the calculation of Consolidated EBITDA.
Wireless EBITDA is calculated by adding back depreciation and amortization expense to Wireless Segment operating income. Wireless EBITDA margin is calculated by dividing Wireless EBITDA by Wireless total operating revenues. Wireline EBITDA is calculated by adding back depreciation and amortization expense to Wireline operating income, and Wireline EBITDA margin is calculated by dividing Wireline EBITDA by Wireline total operating revenues.
Free Cash Flow
Free cash flow is a non-GAAP financial measure that management believes is useful to investors and other users of our financial information in evaluating cash available to pay debt and dividends. Free cash flow is calculated by subtracting capital expenditures from net cash provided by operating activities.
Net Debt and the Net Debt to Consolidated Adjusted EBITDA Ratio
Net Debt and Net Debt to Consolidated Adjusted EBITDA Ratio are non-GAAP financial measures that management believes are useful to investors and other users of our financial information in evaluating Verizon’s leverage. Net Debt is calculated by subtracting cash and cash equivalents from the sum of debt maturing within one year and long-term debt. For purposes of the Net Debt to Consolidated Adjusted EBITDA Ratio, Consolidated Adjusted EBITDA is calculated for the last twelve months. Management believes this presentation assists investors and other users of our financial information in understanding trends that may be indicative of future operating results given the non-operational nature of the items excluded from the calculation.
Adjusted Earnings per Common Share (Adjusted EPS)
Adjusted Earnings per Common Share (Adjusted EPS) is a non-GAAP financial measure that management believes is useful to investors and other users of our financial information in evaluating our operating results and understanding our operating trends. Adjusted EPS is calculated by excluding the effect of non-operational items from the calculation of reported EPS.
Consolidated Adjusted EBITDA and Adjusted EPS include pension expenses calculated based on the prior year-end discount rate and expected return on plan assets used during the first three quarters of the year, as opposed to the actual discount rate and return on plan assets, which are not available until December 31 or upon a remeasurement event. Management believes that excluding actuarial gains or losses as a result of a remeasurement provides investors and other users of our financial information with more meaningful sequential and year-over-year quarterly comparisons and is consistent with management’s evaluation of business performance.
18
Verizon Communications Inc.
Consolidated Non-GAAP Reconciliations
| (dollars in millions) | ||||||||||||||||||||||
| Unaudited | 3 Months Ended 3/31/2015 |
12 Months Ended 3/31/2016 |
||||||||||||||||||||
| Consolidated Operating Revenues Excluding AOL |
||||||||||||||||||||||
| Consolidated Operating Revenues |
$ | 31,984 | $ | 32,171 | ||||||||||||||||||
| Less: AOL operating revenues |
- | 669 | ||||||||||||||||||||
| Consolidated Operating Revenues Excluding AOL |
$ | 31,984 | $ | 31,502 | ||||||||||||||||||
| (dollars in millions) | ||||||||||||||||||||||||||||||||||||
| 3 Months | 3 Months | 3 Months | 3 Months | 3 Months | 3 Months | 3 Months | 3 Months | 3 Months | ||||||||||||||||||||||||||||
| Ended | Ended | Ended | Ended | Ended | Ended | Ended | Ended | Ended | ||||||||||||||||||||||||||||
| Unaudited | 3/31/2014 | 6/30/2014 | 9/30/2014 | 12/31/2014 | 3/31/2015 | 6/30/2015 | 9/30/2015 | 12/31/2015 | 3/31/2016 | |||||||||||||||||||||||||||
| Consolidated EBITDA , EBITDA Margin and Adjusted EBITDA |
||||||||||||||||||||||||||||||||||||
| Verizon Consolidated EBITDA |
||||||||||||||||||||||||||||||||||||
| Consolidated net income (loss) |
$ 5,986 | $ 4,324 | $ 3,794 | $ (2,148) | $ 4,338 | $ 4,353 | $ 4,171 | $ 5,513 | $ 4,430 | |||||||||||||||||||||||||||
| Add/Subtract non-operating items: |
||||||||||||||||||||||||||||||||||||
| Provision (Benefit) for income taxes |
968 | 2,220 | 1,864 | (1,738) | 2,331 | 2,274 | 2,195 | 3,065 | 2,336 | |||||||||||||||||||||||||||
| Interest expense |
1,214 | 1,164 | 1,255 | 1,282 | 1,332 | 1,208 | 1,202 | 1,178 | 1,188 | |||||||||||||||||||||||||||
| Other (income) and expense, net |
894 | (66) | (71) | 437 | (75) | (32) | (51) | (28) | (32) | |||||||||||||||||||||||||||
| Equity in losses of unconsolidated businesses |
(1,902) | 43 | 48 | 31 | 34 | 18 | 18 | 16 | 20 | |||||||||||||||||||||||||||
| Operating Income (Loss) |
7,160 | 7,685 | 6,890 | (2,136) | 7,960 | 7,821 | 7,535 | 9,744 | 7,942 | |||||||||||||||||||||||||||
| Add: Depreciation and amortization expense |
4,137 | 4,161 | 4,167 | 4,068 | 3,989 | 3,980 | 4,009 | 4,039 | 4,017 | |||||||||||||||||||||||||||
| Consolidated EBITDA |
$ 11,297 | $ 11,846 | $ 11,057 | $ 1,932 | $ 11,949 | $ 11,801 | $ 11,544 | $ 13,783 | $ 11,959 | |||||||||||||||||||||||||||
| Add/Subtract non-operational items (before tax): |
||||||||||||||||||||||||||||||||||||
| Severance, pension & benefit charges (credits) |
- | - | - | 7,507 | - | - | 342 | (2,598) | 165 | |||||||||||||||||||||||||||
| Gain on spectrum license transactions |
- | (707) | - | - | - | - | - | (254) | (142) | |||||||||||||||||||||||||||
| Impact of divested operations(1) |
(768) | (764) | (746) | (769) | (739) | (741) | (717) | (709) | (661) | |||||||||||||||||||||||||||
| Other non-operational costs |
- | - | - | 334 | - | - | - | - | - | |||||||||||||||||||||||||||
| (768) | (1,471) | (746) | 7,072 | (739) | (741) | (375) | (3,561) | (638) | ||||||||||||||||||||||||||||
| Consolidated Adjusted EBITDA(1) |
$ 10,529 | $ 10,375 | $ 10,311 | $ 9,004 | $ 11,210 | $ 11,060 | $ 11,169 | $ 10,222 | $ 11,321 | |||||||||||||||||||||||||||
| Consolidated Operating Income Margin |
24.9% | 24.7% | ||||||||||||||||||||||||||||||||||
| Consolidated EBITDA Margin |
37.4% | 37.2% | ||||||||||||||||||||||||||||||||||
| (dollars in millions) | ||||||||||||||||||||||||||||||||||||
| Unaudited |
3/31/2014 | 6/30/2014 | 9/30/2014 | 12/31/2014 | 3/31/2015 | 6/30/2015 | 9/30/2015 | 12/31/2015 | 3/31/2016 | |||||||||||||||||||||||||||
| Net Debt and Net Debt to Consolidated Adjusted EBITDA Ratio |
||||||||||||||||||||||||||||||||||||
| Net Debt |
||||||||||||||||||||||||||||||||||||
| Debt maturing within one year |
$ 2,152 | $ 2,283 | $ 1,603 | $ 2,735 | $ 4,439 | $ 4,206 | $ 7,264 | $ 6,489 | $ 6,265 | |||||||||||||||||||||||||||
| Long-term debt |
107,133 | 107,214 | 107,148 | 110,029 | 108,452 | 108,978 | 104,583 | 103,240 | 103,615 | |||||||||||||||||||||||||||
| Total Debt |
109,285 | 109,497 | 108,751 | 112,764 | 112,891 | 113,184 | 111,847 | 109,729 | 109,880 | |||||||||||||||||||||||||||
| Less: Cash and cash equivalents |
2,907 | 5,776 | 7,218 | 10,598 | 4,386 | 3,008 | 3,875 | 4,470 | 5,846 | |||||||||||||||||||||||||||
| Net Debt |
$ 106,378 | $ 103,721 | $ 101,533 | $ 102,166 | $ 108,505 | $ 110,176 | $ 107,972 | $ 105,259 | $ 104,034 | |||||||||||||||||||||||||||
| Net Debt to Consolidated Adjusted EBITDA Ratio(1) |
2.5x | 2.7x | 2.6x | 2.5x | 2.4x | 2.4x | ||||||||||||||||||||||||||||||
| (1) Consolidated Adjusted EBITDA and Net Debt to Consolidated Adjusted EBITDA Ratio have been updated for the impact of Divested Businesses. | ||||||||||||||||||
19
Verizon Communications Inc.
Wireless Non-GAAP Reconciliations
| (dollars in millions) |
||||||||||||||||||||||||||||||||||||
| Unaudited | 3 Months Ended 3/31/14 |
3 Months Ended 6/30/14 |
3 Months Ended 9/30/14 |
3 Months Ended 12/31/14 |
3 Months Ended 3/31/15 |
3 Months Ended 6/30/15 |
3 Months Ended 9/30/15 |
3 Months Ended 12/31/15 |
3 Months Ended 3/31/16 |
|||||||||||||||||||||||||||
| Wireless Segment EBITDA |
||||||||||||||||||||||||||||||||||||
| Operating Income |
$ 7,318 | $ 6,985 | $ 6,955 | $ 5,502 | $ 7,810 | $ 7,696 | $ 7,668 | $ 6,799 | $ 7,880 | |||||||||||||||||||||||||||
| Add: Depreciation and amortization expense |
2,061 | 2,107 | 2,139 | 2,152 | 2,190 | 2,225 | 2,260 | 2,305 | 2,293 | |||||||||||||||||||||||||||
| Wireless Segment EBITDA |
$ 9,379 | $ 9,092 | $ 9,094 | $ 7,654 | $ 10,000 | $ 9,921 | $ 9,928 | $ 9,104 | $ 10,173 | |||||||||||||||||||||||||||
| Wireless total operating revenues |
$ 20,879 | $ 21,483 | $ 21,835 | $ 23,449 | $ 22,328 | $ 22,613 | $ 23,005 | $ 23,734 | $ 22,004 | |||||||||||||||||||||||||||
| Wireless Operating Income Margin |
35.0% | 32.5% | 31.9% | 23.5% | 35.0% | 34.0% | 33.3% | 28.6% | 35.8% | |||||||||||||||||||||||||||
| Wireless Segment EBITDA Margin |
44.9% | 42.3% | 41.6% | 32.6% | 44.8% | 43.9% | 43.2% | 38.4% | 46.2% | |||||||||||||||||||||||||||
| Wireline Non-GAAP Reconciliations(1) | ||||||||||||||||||||||||||||||||||||
| (dollars in millions) |
||||||||||||||||||||||||||||||||||||
| Unaudited | 3 Months Ended 3/31/14 |
3 Months Ended 6/30/14 |
3 Months Ended 9/30/14 |
3 Months Ended 12/31/14 |
3 Months Ended 3/31/15 |
3 Months Ended 6/30/15 |
3 Months Ended 9/30/15 |
3 Months Ended 12/31/15 |
3 Months Ended 3/31/16 |
|||||||||||||||||||||||||||
| Wireline Segment EBITDA and |
||||||||||||||||||||||||||||||||||||
| EBITDA Margin |
||||||||||||||||||||||||||||||||||||
| Operating Income (Loss) |
$ (310) | $ (227) | $ (242) | $ (52) | $ (220) | $ (199) | $ (109) | $ 7 | $ (67) | |||||||||||||||||||||||||||
| Add: Depreciation and amortization expense |
1,723 | 1,756 | 1,724 | 1,614 | 1,647 | 1,695 | 1,611 | 1,590 | 1,576 | |||||||||||||||||||||||||||
| Wireline Segment EBITDA |
$ 1,413 | $ 1,529 | $ 1,482 | $ 1,562 | $ 1,427 | $ 1,496 | $ 1,502 | $ 1,597 | $ 1,509 | |||||||||||||||||||||||||||
| Wireline total operating revenues |
$ 8,248 | $ 8,222 | $ 8,175 | $ 8,148 | $ 8,050 | $ 8,013 | $ 7,967 | $ 8,064 | $ 7,923 | |||||||||||||||||||||||||||
| Wireline Operating Income (Loss) Margin |
(3.8)% | (2.8)% | (3.0)% | (0.6)% | (2.7)% | (2.5)% | (1.4)% | 0.1% | (0.8)% | |||||||||||||||||||||||||||
| Wireline Segment EBITDA Margin |
17.1% | 18.6% | 18.1% | 19.2% | 17.7% | 18.7% | 18.9% | 19.8% | 19.0% | |||||||||||||||||||||||||||
| (1) Wireline Non-GAAP Reconciliations have been updated for the impact of the Reclassified Results. |
| |||||||||||||||||||||||||||||||||||
20
Verizon Communications Inc.
| Earnings Per Share Non-GAAP Reconciliations | ||||||||||||
| Unaudited |
|
3 Months Ended 3/31/15 |
|
|
3 Months Ended 12/31/15 |
|
|
3 Months Ended 3/31/16 |
| |||
|
|
||||||||||||
|
Adjusted Earnings Per Common Share (Adjusted EPS) |
||||||||||||
| EPS |
$ | 1.02 | $ | 1.32 | $ | 1.06 | ||||||
| Severance, Pension, and Benefit Charges (Credits) |
- | (0.40 | ) | 0.02 | ||||||||
| Gain on spectrum license transaction |
- | (0.04 | ) | (0.02) | ||||||||
|
|
|
|||||||||||
| Adjusted EPS |
$ | 1.02 | $ | 0.89 | $ | 1.06 | ||||||
|
|
|
|||||||||||
| Note: EPS may not add due to rounding. |
||||||||||||
| Free Cash Flow Non-GAAP Reconciliations | ||||||||||||
| (dollars in millions) | ||||||||||||
| Unaudited |
|
3 Months Ended 3/31/15 |
|
|
3 Months Ended 3/31/16 |
| ||||||
|
|
||||||||||||
| Free Cash Flow |
||||||||||||
| Net cash provided by operating activities |
$ | 10,169 | $ | 7,419 | ||||||||
| Less: Capital expenditures |
3,665 | 3,387 | ||||||||||
|
|
|
|||||||||||
| Free Cash Flow |
$ | 6,504 | $ | 4,032 | ||||||||
|
|
|
|||||||||||
21