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8-K - 8-K - VERIZON COMMUNICATIONS INCa2020q38-k.htm

Exhibit 99.1
vzlogoa581.jpg


News Release

FOR IMMEDIATE RELEASE
Media contacts:
October 21, 2020Kim Ancin
908.559.3227
kimberly.ancin@verizon.com
Eric Wilkens
908.559.3063
eric.wilkens@verizon.com


Verizon reports strong Q3 financial results,
increases guidance
Company's strength and resilience deliver increased cash flow, wireless service revenue growth, and the most Fios Internet net adds since 4Q 2014

3Q 2020 highlights
Consolidated:
$1.05 in earnings per share (EPS), compared with $1.25 in 3Q 2019; adjusted EPS (non-GAAP), excluding a special item, of $1.25, compared with $1.25 in 3Q 2019.
Operating revenue decline of 4.1 percent from third-quarter 2019.
Year-to-date cash flow from operations of $32.5 billion, an increase of $5.7 billion year over year.

Consumer:
Total revenue of $21.7 billion, a decrease of 4.3 percent year over year.
136,000 retail postpaid net additions, including 142,000 phone net additions and 258,000 postpaid smartphone net additions.
Total retail postpaid churn of 0.80 percent, and retail postpaid phone churn of 0.63 percent.
139,000 Fios Internet net additions, an increase from 30,000 Fios Internet net additions in third-quarter 2019, and 144,000 Fios Internet net additions across Consumer and Business, the most since fourth-quarter 2014.

Business:
Total revenue of $7.7 billion, a decrease of 1.7 percent year over year.
417,000 retail postpaid net additions, including 141,000 phone net additions.
Total retail postpaid churn of 1.19 percent, and retail postpaid phone churn of 0.96 percent.





Total Wireless:
Total wireless service revenue of $16.4 billion, a 0.3 percent increase year over year.
553,000 retail postpaid net additions, including 283,000 phone net additions and 428,000 postpaid smartphone net additions.
Total retail postpaid churn of 0.89 percent, and retail postpaid phone churn of 0.69 percent.


NEW YORK - Verizon Communications Inc. (NYSE, Nasdaq: VZ) reported strong third-quarter results today and revised earnings guidance upward for the year. The company's performance was highlighted by increases in wireless service revenue and total Fios Internet net additions.
“We continue to demonstrate our strength and resilience by delivering very strong third quarter financial results,” said Verizon Chairman and CEO Hans Vestberg. “We are energized by the transformational technology that our 5G Ultra Wideband and 5G nationwide bring. Our purpose-driven culture paired with our network leadership will shape the future, for the better."
For third-quarter 2020, Verizon reported EPS of $1.05, compared with $1.25 in third-quarter 2019. On an adjusted basis (non-GAAP), third-quarter 2020 EPS, excluding a special item, was $1.25, compared with adjusted EPS of $1.25 in third-quarter 2019. The company estimates that third-quarter 2020 EPS and adjusted EPS included approximately negative 5 cents of COVID-19-related net impacts. Third-quarter 2020 EPS included a net pre-tax charge of about $1.1 billion related to a mark-to-market adjustment for pension liabilities.
In third-quarter 2020, Verizon's results also included the continued effects of a reduction in benefits from the adoption of a revenue recognition standard, primarily due to the deferral of commission expense. The net impact was 2 cents in third-quarter 2020 and 7 cents year to date.

Consolidated results
Total consolidated operating revenues in third-quarter 2020 were $31.5 billion, down 4.1 percent from third-quarter 2019. This decline was due to lower customer activity and the timing of certain device launches.
Year-to-date cash flow from operations totaled $32.5 billion, an increase of $5.7 billion year over year. This growth was a result of the continued performance and strength of the business, a non-recurring tax item in second-quarter 2020, improvements in working capital primarily due to lower volumes, and payments related to the Voluntary Separation Plan in full-year 2019 that did not repeat this year.
Year-to-date capital expenditures were $14.2 billion. Capital expenditures continue to support the growth in traffic on the company's 4G LTE network, the launch and continued build-out of the
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company's 5G Ultra Wideband and nationwide networks, the upgrade to its Intelligent Edge Network architecture, and the deployment of significant fiber in more than 60 markets.
In 2018, Verizon announced a goal to achieve $10 billion in cumulative cash savings by the end of 2021. This initiative has yielded $8.3 billion of cumulative cash savings since the program began and is on track to achieve its target. The company expects to continue its focus on operational efficiencies after the current target is achieved to identify additional long-term transformation initiatives and deliver the related cost savings.
The company ended third-quarter 2020 with free cash flow (non-GAAP) of $18.3 billion, an increase of $3.9 billion year over year, and $9.0 billion of cash on hand.
Verizon's unsecured debt balance increased year over year by $4.7 billion to $105.5 billion in third-quarter 2020, and the company’s net unsecured debt (non-GAAP) decreased by $1.3 billion year over year to $96.5 billion. Verizon's net income in third-quarter 2020 was $4.5 billion, and its adjusted EBITDA (non-GAAP) was $11.9 billion. Verizon's net unsecured debt to adjusted EBITDA ratio (non-GAAP) was 2.1 times versus its targeted range of 1.75 to 2.0 times. The company remains focused on achieving its net unsecured debt to EBITDA target while maintaining a strong financial position to give it flexibility to invest in the business.
Consumer results
Total Verizon Consumer revenues were $21.7 billion, a decrease of 4.3 percent year over year, primarily driven by a significant decrease in wireless equipment revenue due to reduced customer activity.
Throughout third-quarter 2020, Verizon gradually reopened all of its company-operated retail stores, implementing practices to reinforce social distancing such as touch-less retail, appointment scheduling, and curbside pickup. In third-quarter 2020, Consumer reported 136,000 wireless retail postpaid net additions. This consisted of 142,000 phone net additions and 113,000 tablet net losses, offset by 107,000 other connected device net additions. Postpaid smartphone net additions were 258,000.
Consumer wireless service revenues were $13.4 billion in third-quarter 2020, a 0.7 percent decrease year over year.
Total retail postpaid churn was 0.80 percent in third-quarter 2020, and retail postpaid phone churn was 0.63 percent.
Consumer reported 139,000 Fios Internet net additions in third-quarter 2020, an increase from 30,000 Fios Internet net additions in third-quarter 2019. Consumer and Business reported 144,000 total Fios Internet net additions, the most Fios Internet net additions since fourth-quarter 2014. Consumer reported 61,000 Fios Video net losses in third-quarter 2020, reflecting the ongoing shift from traditional linear video to over-the-top offerings.
In third-quarter 2020, segment operating income was $7.4 billion, a decrease of 0.7 percent year over year, and segment operating income margin was 34.2 percent, an increase from 33.0 percent in third-quarter 2019. Segment EBITDA (non-GAAP) totaled $10.3 billion in third-quarter 2020, flat year over year. Segment EBITDA margin (non-GAAP) was 47.4 percent in third-quarter 2020, up from 45.3 percent in third-quarter 2019, and included approximately 60 basis points of headwind from the deferral of commission expense.


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Business results
Total Verizon Business revenues were $7.7 billion, down 1.7 percent year over year. The Business segment continues to be resilient through a challenging environment as the company provides critical solutions to customers across state and local government agencies and education providers.
Business reported 417,000 wireless retail postpaid net additions in third-quarter 2020. This consisted of 141,000 phone net additions, 86,000 tablet net additions, and 190,000 other connected device additions.
Business wireless service revenues were $3.0 billion in third-quarter 2020, a 4.9 percent increase year over year, primarily driven by Public Sector and Small and Medium Business.
Total retail postpaid churn was 1.19 percent in third-quarter 2020, and retail postpaid phone churn was 0.96 percent.
In third-quarter 2020, segment operating income was $923 million, a decrease of 5.5 percent year over year, and segment operating income margin was 11.9 percent, compared with 12.4 percent in third-quarter 2019. Segment EBITDA (non-GAAP) totaled $2.0 billion in third-quarter 2020, a decrease of 1.9 percent year over year. Segment EBITDA margin (non-GAAP) was 25.2 percent, which was flat year over year.
Media results
Total Verizon Media revenues were $1.7 billion, down 7.4 percent year over year, but an increase of 21.2 percent from second-quarter 2020. Year over year revenue trends improved each month during third-quarter 2020. Trends resulting from the COVID-19 pandemic continued to impact both search and advertising in the quarter, though Media continues to drive increased customer engagement on its owned and operated properties.
Outlook and guidance
Based on three quarters of resilient earnings and projected trends into fourth-quarter 2020, Verizon is updating financial guidance for full-year 2020:
The company now expects adjusted EPS growth (non-GAAP) of 0 to 2 percent, an update from prior guidance for 2020 adjusted EPS growth (non-GAAP) of -2 to 2 percent. This update includes the previously discussed accounting headwinds, impacts from COVID-19, and new device launches in fourth-quarter 2020.
The company now expects total wireless service revenue growth of at least 2 percent in fourth-quarter 2020 compared to last year.
Verizon expects the following results for full-year 2020:
Capital spending to now be at the higher end of the guided range of $17.5 billion to $18.5 billion.
Adjusted effective income tax rate (non-GAAP) in the range of 23 percent to 25 percent.

NOTE: See the accompanying schedules and www.verizon.com/about/investors for reconciliations to generally accepted accounting principles (GAAP) for non-GAAP financial measures cited in this document.
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Verizon Communications Inc. (NYSE, Nasdaq: VZ) was formed on June 30, 2000 and is celebrating its 20th year as one of the world’s leading providers of technology, communications, information and entertainment products and services. Headquartered in New York City and with a presence around the world, Verizon generated revenues of $131.9 billion in 2019. The company offers data, video and voice services and solutions on its award-winning networks and platforms, delivering on customers’ demand for mobility, reliable network connectivity, security and control.


####

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: cyber attacks impacting our networks or systems and any resulting financial or reputational impact; natural disasters, terrorist attacks or acts of war or significant litigation and any resulting financial or reputational impact; the impact of the global outbreak of COVID-19 on our operations, our employees and the ways in which our customers use our networks and other products and services; disruption of our key suppliers’ or vendors' provisioning of products or services, including as a result of the COVID-19 outbreak; material adverse changes in labor matters and any resulting financial or operational impact; the effects of competition in the markets in which we operate; failure to take advantage of developments in technology and address changes in consumer demand; performance issues or delays in the deployment of our 5G network resulting in significant costs or a reduction in the anticipated benefits of the enhancement to our networks; the inability to implement our business strategy; adverse conditions in the U.S. and international economies; changes in the regulatory environment in which we operate, including any increase in restrictions on our ability to operate our business; 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; significant increases in benefit plan costs or lower investment returns on plan assets; changes in tax laws or treaties, or in their interpretation; and 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.

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Verizon Communications Inc.


Condensed Consolidated Statements of Income
(dollars in millions, except per share amounts)
Unaudited3 Mos. Ended 9/30/203 Mos. Ended 9/30/19%
Change
9 Mos. Ended 9/30/209 Mos. Ended 9/30/19%
Change
Operating Revenues
Service revenues and other$27,431 $27,753 (1.2)$81,604 $82,301 (0.8)
Wireless equipment revenues4,112 5,141 (20.0)11,996 14,792 (18.9)
Total Operating Revenues31,543 32,894 (4.1)93,600 97,093 (3.6)
Operating Expenses
Cost of services7,955 7,902 0.723,348 23,396 (0.2)
Cost of wireless equipment4,379 5,482 (20.1)13,031 15,699 (17.0)
Selling, general and administrative expense7,339 7,216 1.723,080 21,682 6.4
Depreciation and amortization expense4,192 4,114 1.912,523 12,577 (0.4)
Total Operating Expenses23,865 24,714 (3.4)71,982 73,354 (1.9)
Operating Income7,678 8,180 (6.1)21,618 23,739 (8.9)
Equity in losses of unconsolidated businesses(9)(1)*(34)(20)70.0
Other expense, net(774)(110)*(703)(1,127)(37.6)
Interest expense(1,044)(1,146)(8.9)(3,167)(3,571)(11.3)
Income Before Provision For Income Taxes5,851 6,923 (15.5)17,714 19,021 (6.9)
Provision for income taxes(1,347)(1,586)(15.1)(4,084)(4,450)(8.2)
Net Income$4,504 $5,337 (15.6)$13,630 $14,571 (6.5)
Net income attributable to noncontrolling interests$147 $143 2.8$417 $401 4.0
Net income attributable to Verizon4,357 5,194 (16.1)13,213 14,170 (6.8)
Net Income$4,504 $5,337 (15.6)$13,630 $14,571 (6.5)
Basic Earnings Per Common Share
Net income attributable to Verizon$1.05 $1.26 (16.7)$3.19 $3.42 (6.7)
Weighted-average shares outstanding (in millions)4,140 4,138 4,139 4,138 
Diluted Earnings Per Common Share (1)
Net income attributable to Verizon$1.05 $1.25 (16.0)$3.19 $3.42 (6.7)
Weighted-average shares outstanding (in millions)4,142 4,140 4,141 4,140 
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)
Unaudited9/30/2012/31/19$ Change
Assets
Current assets
Cash and cash equivalents$8,983 $2,594 $6,389 
Accounts receivable23,846 26,162 (2,316)
Less Allowance for credit losses1,229 — 1,229 
Less Allowance for doubtful accounts— 733 (733)
Accounts receivable, net22,617 25,429 (2,812)
Inventories1,457 1,422 35 
Prepaid expenses and other5,515 8,028 (2,513)
Total current assets38,572 37,473 1,099 
Property, plant and equipment276,210 265,734 10,476 
Less Accumulated depreciation183,028 173,819 9,209 
Property, plant and equipment, net93,182 91,915 1,267 
Investments in unconsolidated businesses535 558 (23)
Wireless licenses95,958 95,059 899 
Goodwill24,799 24,389 410 
Other intangible assets, net9,599 9,498 101 
Operating lease right-of-use assets22,680 22,694 (14)
Other assets11,669 10,141 1,528 
Total assets$296,994 $291,727 $5,267 
Liabilities and Equity
Current liabilities
Debt maturing within one year$5,770 $10,777 $(5,007)
Accounts payable and accrued liabilities17,391 21,806 (4,415)
Current operating lease liabilities3,494 3,261 233 
Other current liabilities9,530 9,024 506 
Total current liabilities36,185 44,868 (8,683)
Long-term debt109,790 100,712 9,078 
Employee benefit obligations18,756 17,952 804 
Deferred income taxes34,567 34,703 (136)
Non-current operating lease liabilities18,155 18,393 (238)
Other liabilities13,011 12,264 747 
Total long-term liabilities194,279 184,024 10,255 
Equity
Common stock429 429 — 
Additional paid in capital13,404 13,419 (15)
Retained earnings58,473 53,147 5,326 
Accumulated other comprehensive income (loss)(812)998 (1,810)
Common stock in treasury, at cost(6,721)(6,820)99 
Deferred compensation – employee stock ownership plans and other296 222 74 
Noncontrolling interests1,461 1,440 21 
Total equity66,530 62,835 3,695 
Total liabilities and equity$296,994 $291,727 $5,267 


Verizon Communications Inc.



Consolidated - Selected Financial and Operating Statistics

(dollars in millions, except per share amounts)
Unaudited9/30/2012/31/19
Total debt$115,560 $111,489 
Net unsecured debt$96,485 $96,526 
Net unsecured debt / Consolidated Adjusted EBITDA(1)
2.1x2.0x
Common shares outstanding end of period (in millions)4,138 4,136 
Total employees (‘000)133.2 135.0 
Quarterly cash dividends declared per common share$0.6275 $0.6150 
Footnotes: 

(1)Consolidated adjusted EBITDA excludes the effects of non-operational items and special items.


Verizon Communications Inc.


Condensed Consolidated Statements of Cash Flows
(dollars in millions)
Unaudited9 Mos. Ended 9/30/209 Mos. Ended 9/30/19$ Change
Cash Flows from Operating Activities
Net Income$13,630 $14,571 $(941)
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization expense12,523 12,577 (54)
Employee retirement benefits867 (105)972 
Deferred income taxes530 1,070 (540)
Provision for credit losses1,100 1,131 (31)
Equity in losses of unconsolidated businesses, net of dividends received67 64 
Net loss on sale of divested businesses— 94 (94)
Changes in current assets and liabilities, net of effects from acquisition/disposition of businesses
1,345 (3,902)5,247 
Discretionary employee benefits contributions— (300)300 
Other, net2,410 1,548 862 
Net cash provided by operating activities32,472 26,748 5,724 
Cash Flows from Investing Activities
Capital expenditures (including capitalized software)(14,168)(12,332)(1,836)
Acquisitions of businesses, net of cash acquired(507)(29)(478)
Acquisitions of wireless licenses(1,987)(299)(1,688)
Proceeds from dispositions of businesses— 27 (27)
Other, net(1,807)476 (2,283)
Net cash used in investing activities(18,469)(12,157)(6,312)
Cash Flows from Financing Activities
Proceeds from long-term borrowings12,387 8,360 4,027 
Proceeds from asset-backed long-term borrowings4,439 3,982 457 
Repayments of long-term borrowings and finance lease obligations(8,853)(12,486)3,633 
Repayments of asset-backed long-term borrowings(6,726)(5,273)(1,453)
Dividends paid(7,636)(7,474)(162)
Other, net(1,348)(1,410)62 
Net cash used in financing activities(7,737)(14,301)6,564 
Increase in cash, cash equivalents and restricted cash6,266 290 5,976 
Cash, cash equivalents and restricted cash, beginning of period3,917 3,916 
Cash, cash equivalents and restricted cash, end of period$10,183 $4,206 $5,977 



Verizon Communications Inc.


Consumer - Selected Financial Results
(dollars in millions)
Unaudited3 Mos. Ended 9/30/203 Mos. Ended 9/30/19%
Change
9 Mos. Ended 9/30/209 Mos. Ended 9/30/19%
Change
Operating Revenues
Service$16,255 $16,433 (1.1)$48,496 $49,042 (1.1)
Wireless equipment3,403 4,257 (20.1)9,989 12,326 (19.0)
Other2,078 2,016 3.16,129 5,481 11.8
Total Operating Revenues21,736 22,706 (4.3)64,614 66,849 (3.3)
Operating Expenses
Cost of services3,971 4,035 (1.6)11,786 11,761 0.2
Cost of wireless equipment3,411 4,291 (20.5)10,161 12,342 (17.7)
Selling, general and administrative expense4,055 4,085 (0.7)12,353 12,090 2.2
Depreciation and amortization expense2,862 2,806 2.08,531 8,581 (0.6)
Total Operating Expenses14,299 15,217 (6.0)42,831 44,774 (4.3)
Operating Income$7,437 $7,489 (0.7)$21,783 $22,075 (1.3)
Operating Income Margin34.2 %33.0 %33.7 %33.0 %
Segment EBITDA$10,299 $10,295 $30,314 $30,656 (1.1)
Segment EBITDA Margin47.4 %45.3 %46.9 %45.9 %
Footnotes:
The segment financial results and metrics above are adjusted to exclude the effects of special items, as the Company’s chief operating decision maker excludes these items in assessing segment performance.
Certain intersegment transactions with corporate entities have not been eliminated.
 


Verizon Communications Inc.


Consumer - Selected Operating Statistics
Unaudited9/30/209/30/19% Change
Connections (‘000):
Wireless retail postpaid connections90,026 89,739 0.3
Wireless retail prepaid connections4,075 4,183 (2.6)
Total wireless retail connections94,101 93,922 0.2
Fios video connections3,926 4,203 (6.6)
Fios internet connections6,110 5,867 4.1
Fios digital voice residence connections3,384 3,672 (7.8)
Fios digital connections13,420 13,742 (2.3)
Broadband connections6,581 6,469 1.7
Voice connections5,302 5,904 (10.2)
Unaudited3 Mos. Ended 9/30/203 Mos. Ended 9/30/19%
Change
9 Mos. Ended 9/30/209 Mos. Ended 9/30/19%
Change
Gross Additions (‘000):
Wireless retail postpaid 2,304 3,020 (23.7)6,451 8,459 (23.7)
Net Additions Detail (‘000) :
Wireless retail postpaid (1)
136 193 (29.5)(317)118 *
Wireless retail prepaid (1)
77 (81)*(470)*
Total wireless retail (1)
213 112 90.2(312)(352)11.4
Wireless retail postpaid phones (1)
142 239 (40.6)(68)149 *
Fios video (61)(67)9.0(226)(174)(29.9)
Fios internet139 30 *208 106 96.2
Fios digital voice residence(72)(53)(35.8)(236)(130)(81.5)
Fios digital(90)*(254)(198)(28.3)
Broadband (1)
113 (5)*131 *
Voice(142)(154)7.8(452)(428)(5.6)
Churn Rate:
Wireless retail postpaid0.80 %1.05 %0.84 %1.03 %
Wireless retail postpaid phones0.63 %0.79 %0.64 %0.77 %
Wireless retail0.95 %1.27 %1.00 %1.27 %
Revenue Statistics (in millions):
Wireless service revenue$13,442 $13,533 (0.7)$40,005 $40,346 (0.8)
Fios revenues$2,773 $2,811 (1.4)$8,326 $8,347 (0.3)


Verizon Communications Inc.


Unaudited3 Mos. Ended 9/30/203 Mos. Ended 9/30/19%
Change
9 Mos. Ended 9/30/209 Mos. Ended 9/30/19%
Change
Other Wireless Statistics:
Wireless retail postpaid ARPA (2)
$118.52 $118.89 (0.3)$117.80 $118.16 (0.3)
Wireless retail postpaid upgrade rate
4.2 %4.9 %
Wireless retail postpaid accounts (‘000) (3)
33,712 33,898 (0.5)
Wireless retail postpaid connections per account (3)
2.67 2.65 0.8
Total wireless internet postpaid base (3)
15.9 %16.1 %
Footnotes:

(1) Connection net additions include certain adjustments.

(2) Wireless retail postpaid ARPA - average service revenue per account from retail postpaid accounts.

(3) Statistics presented as of end of period.

Certain intersegment transactions with corporate entities have not been eliminated.

* Not meaningful



Verizon Communications Inc.


Business - Selected Financial Results
(dollars in millions)
Unaudited3 Mos. Ended 9/30/203 Mos. Ended 9/30/19%
Change
9 Mos. Ended 9/30/209 Mos. Ended 9/30/19%
Change
Operating Revenues
Small and Medium Business$2,742 $2,899 (5.4)$8,147 $8,392 (2.9)
Global Enterprise2,595 2,714 (4.4)7,815 8,078 (3.3)
Public Sector and Other1,639 1,472 11.34,636 4,435 4.5
Wholesale773 800 (3.4)2,314 2,467 (6.2)
Total Operating Revenues7,749 7,885 (1.7)22,912 23,372 (2.0)
Operating Expenses
Cost of services2,739 2,666 2.77,969 7,838 1.7
Cost of wireless equipment968 1,190 (18.7)2,870 3,356 (14.5)
Selling, general and administrative expense2,092 2,042 2.46,195 5,984 3.5
Depreciation and amortization expense1,027 1,010 1.73,055 3,098 (1.4)
Total Operating Expenses6,826 6,908 (1.2)20,089 20,276 (0.9)
Operating Income$923 $977 (5.5)$2,823 $3,096 (8.8)
Operating Income Margin11.9 %12.4 %12.3 %13.2 %
Segment EBITDA$1,950 $1,987 (1.9)$5,878 $6,194 (5.1)
Segment EBITDA Margin25.2 %25.2 %25.7 %26.5 %
Footnotes:
The segment financial results and metrics above are adjusted to exclude the effects of special items, as the Company’s chief operating decision maker excludes these items in assessing segment performance.
Certain intersegment transactions with corporate entities have not been eliminated.


Verizon Communications Inc.


Business - Selected Operating Statistics
Unaudited9/30/20209/30/2019%
Change
Connections (‘000):
Wireless retail postpaid connections26,223 24,652 6.4
Fios video connections74 77 (3.9)
Fios internet connections332 322 3.1
Fios digital connections406 399 1.8
Broadband connections488 492 (0.8)
Voice connections4,668 5,058 (7.7)
Unaudited3 Mos. Ended 9/30/203 Mos. Ended 9/30/19%
Change
9 Mos. Ended 9/30/209 Mos. Ended 9/30/19%
Change
Gross Additions (‘000):
Wireless retail postpaid1,345 1,299 3.53,957 3,634 8.9
Net Additions Detail (‘000):
Wireless retail postpaid (1)
417 412 1.21,172 1,002 17.0
Wireless retail postpaid phones (1)
141 206 (31.6)456 497 (8.2)
Fios video(1)*(3)*
Fios internet(16.7)16 (62.5)
Fios digital (42.9)19 (84.2)
Broadband (1)
(3)(2)(50.0)(18)(9)*
Voice(90)(105)14.3(291)(341)14.7
Churn Rate:
Wireless retail postpaid1.19 %1.21 %1.20 %1.22 %
Wireless retail postpaid phones0.96 %0.97 %0.96 %0.99 %
Revenue Statistics (in millions):
Wireless service revenue$2,990 $2,850 4.9$8,732 $8,319 5.0
Fios revenues$263 $243 8.2$785 $725 8.3
Other Operating Statistics:
Wireless retail postpaid upgrade rate3.3 %4.5 %
Total wireless internet postpaid base (2)
34.3 %33.5 %
Footnotes:
(1) Connection net additions include certain adjustments.
(2) Statistics presented as of end of period.
Certain intersegment transactions with corporate entities have not been eliminated.
Prior year amounts revised to conform to current period presentation.
*Not meaningful



Verizon Communications Inc.


Supplemental Information - Total Wireless Operating and Financial Statistics

The following supplemental schedule contains certain financial and operating metrics which reflect an aggregation of our Consumer and Business segments’ wireless results.
Unaudited9/30/209/30/19% Change
Connections (‘000)
Retail postpaid116,249 114,391 1.6
Retail prepaid4,075 4,183 (2.6)
Total retail120,324 118,574 1.5
Unaudited3 Mos. Ended 9/30/203 Mos. Ended 9/30/19%
Change
9 Mos. Ended 9/30/209 Mos. Ended 9/30/19%
Change
Net Additions Detail (‘000) (1)
Retail postpaid phone283 445 (36.4)388 646 (39.9)
Retail postpaid553 605 (8.6)855 1,120 (23.7)
Retail prepaid77 (81)*(470)*
Total retail630 524 20.2860 650 32.3
Account Statistics
Retail postpaid accounts (‘000) (2)
35,279 35,371 (0.3)
Retail postpaid connections per account (2)
3.30 3.23 2.2
Retail postpaid ARPA (3)
$139.24 $138.93 0.2$138.01 $137.72 0.2
Churn Detail
Retail postpaid phone0.69 %0.82 %0.70 %0.81 %
Retail postpaid0.89 %1.08 %0.92 %1.07 %
Retail1.01 %1.26 %1.05 %1.26 %
Retail Postpaid Connection Statistics
Total internet postpaid base (2)
20.0 %19.8 %
Upgrade rate4.0 %4.8 %
Revenue Statistics (in millions) (4)
Wireless service$16,432 $16,383 0.3$48,737 $48,665 0.1
Wireless equipment4,112 5,141 (20.0)11,996 14,792 (18.9)
Wireless other2,096 2,018 3.96,214 5,422 14.6
Total Wireless$22,640 $23,542 (3.8)$66,947 $68,879 (2.8)
Footnotes:

(1) Connection net additions include certain adjustments.
(2) Statistics presented as of end of period.
(3) Wireless retail postpaid ARPA - average service revenue per account from retail postpaid accounts.
(4) Intersegment transactions between Consumer or Business segment with corporate entities have not been eliminated.
Prior year amounts revised to conform to current period presentation.

* Not meaningful


Verizon Communications Inc.


Non-GAAP Reconciliations - Consolidated Verizon
Consolidated EBITDA and Consolidated Adjusted EBITDA
(dollars in millions)
Unaudited3 Mos. Ended 9/30/203 Mos. Ended 6/30/203 Mos. Ended 3/31/203 Mos. Ended 12/31/193 Mos. Ended 9/30/19
Consolidated Net Income$4,504 $4,839 $4,287 $5,217 $5,337 
  Add/(subtract):
Provision (benefit) for income taxes1,347 1,348 1,389 (1,505)1,586 
Interest expense (1)
1,044 1,089 1,034 1,159 1,146 
Depreciation and amortization expense4,192 4,181 4,150 4,105 4,114 
Consolidated EBITDA$11,087 $11,457 $10,860 $8,976 $12,183 
  Add/(subtract):
Other (income) expense, net (2)
$774 $72 $(143)$1,773 $110 
Equity in losses (earnings) of unconsolidated businesses (3)
13 12 (5)
Impairment charges— — — 186 — 
Severance charges— — — 204 — 
Loss on spectrum license auction— — 1,195 — — 
Net gain from dispositions of assets and businesses
— — — — (261)
783 85 1,064 2,158 (150)
Consolidated Adjusted EBITDA$11,870 $11,542 $11,924 $11,134 $12,033 
(1)    Includes Early debt redemption costs, where applicable.
(2)    Includes Pension and benefits mark-to-market adjustments and Early debt redemption costs, where applicable.
(3)    Includes impairment charges, where applicable.
Net Unsecured Debt and Net Unsecured Debt to Consolidated Adjusted EBITDA Ratio
(dollars in millions)
Unaudited9/30/209/30/19
Debt maturing within one year$5,770 $7,830 
Long-term debt109,790 101,769 
Total Debt115,560 109,599 
Less Secured debt10,092 8,800 
Unsecured Debt105,468 100,799 
Less Cash and cash equivalents8,983 3,020 
Net Unsecured Debt
$96,485 $97,779 
Net Unsecured Debt to Consolidated Adjusted EBITDA Ratio2.1x
Net Unsecured Debt year over year change$(1,294)


Verizon Communications Inc.


Adjusted Earnings per Common Share (Adjusted EPS)(1)
(dollars in millions, except per share amounts)
Unaudited3 Mos. Ended 9/30/203 Mos. Ended 9/30/19
Pre-taxTaxAfter-Tax Pre-taxTaxAfter-Tax 
EPS$1.05 $1.25 
Net pension remeasurement charge$1,092 $(279)$813 0.20 $291 $(76)$215 0.05 
Net gain from dispositions of assets and businesses
— — — — (261)37 (224)(0.05)
$1,092 $(279)$813 $0.20 $30 $(39)$(9)$— 
Adjusted EPS$1.25 $1.25