Notable year over year improvement in Verizon Consumer postpaid phone gross additions
Eighth consecutive quarter that Verizon Business reported more than 125,000 postpaid phone net additions
2Q 2023 highlights
Consolidated:
•$1.10 in EPS, compared with $1.24 in second-quarter 2022; adjusted EPS1, excluding special items, of $1.21, compared with $1.31 in second-quarter 2022.
•Total operating revenue of $32.6 billion, a decrease of 3.5 percent from second-quarter 2022.
•First-half 2023 cash flow from operations of $18.0 billion, an increase from $17.7 billion in first-half 2022.
•Net income of $4.8 billion, a decrease of 10.3 percent from second-quarter 2022, and consolidated adjusted EBITDA1 of $12.0 billion, up 0.8 percent year over year.
Total Broadband:
•Total broadband net additions of 418,000, reflecting a strong demand for fixed wireless and Fios products. This result included 384,000 fixed wireless net additions, an increase from 256,000 fixed wireless net additions in second-quarter 2022. This is the third consecutive quarter that Verizon reported more than 400,000 broadband net additions. Verizon now has nearly 2.3 million subscribers on its fixed wireless service.
•54,000 Fios Internet net additions, an increase from 36,000 Fios Internet net additions in second-quarter 2022.
Total Wireless:
•Total wireless service revenue3 of $19.1 billion, a 3.8 percent increase year over year.
•Postpaid phone net additions of 8,000, and retail postpaid net additions of 612,000. Total wireless postpaid phone gross additions increased 2.0 percent year over year, primarily driven by a 6.9 percent year over year growth in Consumer postpaid phone gross additions.
•Total retail postpaid churn of 1.07 percent, and retail postpaid phone churn of 0.83 percent.
NEW YORK - Verizon Communications Inc. (NYSE, Nasdaq: VZ) reported second-quarter results today highlighted by wireless service revenue growth, increased cash flow from operations and strong momentum heading into the second half of the year.
"In the second quarter, we showed progress in our key priorities of growing wireless service revenue, delivering healthy consolidated adjusted EBITDA, and increasing free cash flow," said Chairman and CEO Hans Vestberg. "We look forward to extending our network leadership in the second half of the year by continuing our rapid C-Band deployment as we are laser focused on providing value to our customers. The steps that we have taken to improve our operational performance are working, and we are confident that we will achieve our financial targets for the full year."
For second-quarter 2023, Verizon reported EPS of $1.10, compared with $1.24 in second-quarter 2022. On an adjusted basis1, excluding special items, EPS was $1.21 in second-quarter 2023, compared with adjusted EPS1 of $1.31 in second-quarter 2022.
Second-quarter 2023 earnings reflected a pre-tax loss from special items of approximately $598 million. This included a pre-tax severance charge of $237 million, the impacts of amortization of intangible assets related to TracFone and other acquisitions of $206 million, and a pre-tax asset rationalization charge of $155 million related to certain real estate and non-strategic assets that the company has decided to cease use of as part of its transformation initiatives.
Consolidated results
•Total consolidated operating revenue in second-quarter 2023 of $32.6 billion, a decrease of 3.5 percent from second-quarter 2022. This decrease was primarily due to reduced wireless equipment revenue and lower postpaid phone upgrade activity.
•Total wireless service revenue3 in second-quarter 2023 increased 3.8 percent year over year. This increase was driven primarily by pricing actions implemented in recent quarters, the larger allocation of administrative and telco recovery fees from other revenue into wireless service revenue, and a growing contribution from fixed wireless offerings.
•Net income of $4.8 billion, a decrease of 10.3 percent compared to second-quarter 2022, and consolidated adjusted EBITDA1 of $12.0 billion, an increase of 0.8 percent year over year.
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VlpHU09DSUQyMDE5UTE=
•First-half 2023 cash flow from operations totaled $18.0 billion, an increase from $17.7 billion in first-half 2022. This increase continues to be related to lower receivables and lower inventory levels tied to fewer upgrades, which were offset by higher cash income taxes and interest expense.
•Capital expenditures in first-half 2023 were $10.1 billion.
•The company ended first-half 2023 with free cash flow1 of $8.0 billion, an increase from $7.2 billion in first-half 2022.
•Verizon's unsecured debt as of the end of second-quarter 2023 decreased by $662 million sequentially to $131.4 billion. The company's net unsecured debt1 balance improved sequentially by $3.2 billion to $126.6 billion. At the end of second-quarter 2023, Verizon's ratio of unsecured debt to net income (LTM) was approximately 6.1 times, and its net unsecured debt to adjusted EBITDA ratio1 was approximately 2.6 times.
Verizon Consumer results
•Total Verizon Consumer revenue was $24.6 billion, a decrease of 4.1 percent year over year. Growth in service and other revenue was offset by wireless equipment revenue declines.
•Wireless service revenue increased 3.5 percent year over year. This increase was driven by growth in retail postpaid Average Revenue Per Account (ARPA), partially offset by a decline in retail postpaid phone connections and prepaid connections.
•Consumer wireless retail postpaid churn was 0.95 percent in second-quarter 2023, and wireless retail postpaid phone churn was 0.76 percent.
•In second-quarter 2023, Consumer reported 136,000 wireless retail postpaid phone net losses. Consumer postpaid phone gross additions increased 6.9 percent year over year, and continued the momentum that began in second-half 2022.
•Consumer reported 304,000 wireless retail prepaid net losses in second-quarter 2023.
•Consumer reported 251,000 fixed wireless net additions and 51,000 Fios Internet net additions in second-quarter 2023. Consumer Fios revenue was $2.9 billion in second-quarter 2023, a decrease of 0.3 percent year over year.
•In second-quarter 2023, Consumer operating income was $7.3 billion, an increase of 2.5 percent year over year, and segment operating income margin was 29.8 percent, an increase from 27.9 percent in second-quarter 2022. Segment EBITDA1 in second-quarter 2023 was $10.6 billion, an increase of 2.1 percent year over year. This improvement can be attributed to service revenue growth and lower upgrade volumes. Segment EBITDA margin1 was 43.1 percent, an increase from 40.5 percent in second-quarter 2022.
Verizon Business results
•Total Verizon Business revenue was $7.5 billion in second-quarter 2023, a decrease of 1.9 percent year over year. Growth in wireless service revenue was more than offset by lower wireline revenue and lower wireless equipment revenue.
•Business wireless service revenue was $3.4 billion, an increase of 5.3 percent year over year. This growth was driven by continued strong net additions and pricing actions implemented in recent quarters.
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VlpHU09DSUQyMDE5UTE=
•Business reported 308,000 wireless retail postpaid net additions in second-quarter 2023, including 144,000 postpaid phone net additions. This was the eighth consecutive quarter that Business reported more than 125,000 postpaid phone net additions.
•Business wireless retail postpaid churn was 1.48 percent in second-quarter 2023, and wireless retail postpaid phone churn was 1.10 percent.
•Business reported 133,000 fixed wireless net additions in second-quarter 2023.
•In second-quarter 2023, Verizon Business operating income was $533 million, a decrease of 21.0 percent year over year, and segment operating income margin was 7.1 percent, a decrease from 8.9 percent in second-quarter 2022. Segment EBITDA1 was $1.6 billion in second-quarter 2023, a decrease of 6.5 percent year over year, driven by continued declines in high margin wireline revenues. Segment EBITDA margin1 was 21.9 percent in second-quarter 2023, a decrease from 22.9 percent in second-quarter 2022.
Outlook and guidance
The company does not provide a reconciliation for any of the following adjusted (non-GAAP) forecasts because it cannot, without unreasonable effort, predict the special items that could arise, and the company is unable to address the probable significance of the unavailable information.
For 2023, Verizon continues to expect the following:
•Total wireless service revenue growth2 3 of 2.5 percent to 4.5 percent.
•Adjusted EBITDA1 of $47.0 billion to $48.5 billion.
•Adjusted EPS1 of $4.55 to $4.85.
•Adjusted effective income tax rate1 in the range of 22.5 percent to 24.0 percent.
•Capital spending in the range of $18.25 billion to $19.25 billion.
1 Non-GAAP financial measure. See the accompanying schedules and www.verizon.com/about/investors for reconciliations of non-GAAP financial measures cited in this document to most directly comparable financial measures under generally accepted accounting principles (GAAP).
2 Includes a benefit of approximately 190 basis points from the reallocation from other revenue to wireless service revenue. This results from a larger allocation of administrative and telco recovery charges which partly recover network operating costs.
3 Total wireless service revenue represents the sum of Consumer and Business segments.
Verizon Communications Inc. (NYSE, Nasdaq: VZ) was formed on June 30, 2000 and is one of the world’s leading providers of technology and communications services. Headquartered in New York City and with a presence around the world, Verizon generated revenues of $136.8 billion in 2022. 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 verizon.com/news. News releases are also available through an RSS feed. To subscribe, visit www.verizon.com/about/rss-feeds/.
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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,” “forecasts,” “hopes,” “plans” 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: the effects of competition in the markets in which we operate, including any inability to successfully respond to competitive factors such as prices, promotional incentives and evolving consumer preferences; failure to take advantage of, or respond to competitors' use 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, including inflation in the markets in which we operate; cyber attacks impacting our networks or systems and any resulting financial or reputational impact; damage to our infrastructure or disruption of our operations from natural disasters, extreme weather conditions, acts of war, terrorist attacks or other hostile acts and any resulting financial or reputational impact; the impact of public health crises 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 geopolitical factors, public health crises or the potential impacts of global climate change; material adverse changes in labor matters and any resulting financial or operational impact; changes in the regulatory environment in which we operate, including any increase in restrictions on our ability to operate our networks or businesses; allegations regarding the release of hazardous materials or pollutants into the environment from our, or our predecessors’, network assets and any related regulatory developments, litigation, liability, compliance costs, penalties, operational impacts or reputational damage; our high level of indebtedness; significant litigation and any resulting material expenses incurred in defending against lawsuits or paying awards or settlements; 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)
Unaudited
3 Mos. Ended 6/30/23
3 Mos. Ended 6/30/22
% Change
6 Mos. Ended 6/30/23
6 Mos. Ended 6/30/22
% Change
Operating Revenues
Service revenues and other
$
27,319
$
27,115
0.8
$
54,471
$
54,333
0.3
Wireless equipment revenues
5,277
6,674
(20.9)
11,037
13,010
(15.2)
Total Operating Revenues
32,596
33,789
(3.5)
65,508
67,343
(2.7)
Operating Expenses
Cost of services
6,986
6,932
0.8
14,064
14,159
(0.7)
Cost of wireless equipment
5,778
7,488
(22.8)
12,204
14,611
(16.5)
Selling, general and administrative expense
8,253
7,496
10.1
15,759
14,668
7.4
Depreciation and amortization expense
4,359
4,321
0.9
8,677
8,557
1.4
Total Operating Expenses
25,376
26,237
(3.3)
50,704
51,995
(2.5)
Operating Income
7,220
7,552
(4.4)
14,804
15,348
(3.5)
Equity in earnings (losses) of unconsolidated businesses
(33)
41
*
(24)
38
*
Other income (expense), net
210
49
*
324
(875)
*
Interest expense
(1,285)
(785)
63.7
(2,492)
(1,571)
58.6
Income Before Provision For Income Taxes
6,112
6,857
(10.9)
12,612
12,940
(2.5)
Provision for income taxes
(1,346)
(1,542)
(12.7)
(2,828)
(2,914)
(3.0)
Net Income
$
4,766
$
5,315
(10.3)
$
9,784
$
10,026
(2.4)
Net income attributable to noncontrolling interests
$
118
$
116
1.7
$
227
$
247
(8.1)
Net income attributable to Verizon
4,648
5,199
(10.6)
9,557
9,779
(2.3)
Net Income
$
4,766
$
5,315
(10.3)
$
9,784
$
10,026
(2.4)
Basic Earnings Per Common Share
Net income attributable to Verizon
$
1.10
$
1.24
(11.3)
$
2.27
$
2.33
(2.6)
Weighted-average shares outstanding (in millions)
4,208
4,201
4,207
4,201
Diluted Earnings Per Common Share (1)
Net income attributable to Verizon
$
1.10
$
1.24
(11.3)
$
2.27
$
2.33
(2.6)
Weighted-average shares outstanding (in millions)
4,213
4,202
4,212
4,202
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
6/30/23
12/31/22
$ Change
Assets
Current assets
Cash and cash equivalents
$
4,803
$
2,605
$
2,198
Accounts receivable
24,108
25,332
(1,224)
Less Allowance for credit losses
922
826
96
Accounts receivable, net
23,186
24,506
(1,320)
Inventories
1,896
2,388
(492)
Prepaid expenses and other
7,503
8,358
(855)
Total current assets
37,388
37,857
(469)
Property, plant and equipment
313,424
307,689
5,735
Less Accumulated depreciation
206,154
200,255
5,899
Property, plant and equipment, net
107,270
107,434
(164)
Investments in unconsolidated businesses
1,015
1,071
(56)
Wireless licenses
151,337
149,796
1,541
Goodwill
28,647
28,671
(24)
Other intangible assets, net
11,097
11,461
(364)
Operating lease right-of-use assets
25,345
26,130
(785)
Other assets
17,856
17,260
596
Total assets
$
379,955
$
379,680
$
275
Liabilities and Equity
Current liabilities
Debt maturing within one year
$
14,827
$
9,963
$
4,864
Accounts payable and accrued liabilities
20,067
23,977
(3,910)
Current operating lease liabilities
4,211
4,134
77
Other current liabilities
12,299
12,097
202
Total current liabilities
51,404
50,171
1,233
Long-term debt
137,871
140,676
(2,805)
Employee benefit obligations
12,357
12,974
(617)
Deferred income taxes
44,055
43,441
614
Non-current operating lease liabilities
20,745
21,558
(813)
Other liabilities
17,021
18,397
(1,376)
Total long-term liabilities
232,049
237,046
(4,997)
Equity
Common stock
429
429
—
Additional paid in capital
13,523
13,420
103
Retained earnings
86,448
82,380
4,068
Accumulated other comprehensive loss
(1,921)
(1,865)
(56)
Common stock in treasury, at cost
(3,830)
(4,013)
183
Deferred compensation – employee stock ownership plans and other
544
793
(249)
Noncontrolling interests
1,309
1,319
(10)
Total equity
96,502
92,463
4,039
Total liabilities and equity
$
379,955
$
379,680
$
275
Verizon Communications Inc.
Consolidated - Selected Financial and Operating Statistics
(dollars in millions, except per share amounts)
Unaudited
6/30/23
12/31/22
Total debt
$
152,698
$
150,639
Unsecured debt
$
131,356
$
130,631
Net unsecured debt(1)
$
126,553
$
128,026
Unsecured debt / Consolidated Net Income (LTM)
6.1
x
6.0
x
Net unsecured debt / Consolidated Adjusted EBITDA(1)(2)
2.6x
2.7
x
Common shares outstanding end of period (in millions)
4,204
4,200
Total employees (‘000)
114.2
117.1
Quarterly cash dividends declared per common share
$
0.6525
$
0.6525
Footnotes:
(1)Non-GAAP financial measure.
(2)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)
Unaudited
6 Mos. Ended 6/30/23
6 Mos. Ended 6/30/22
$ Change
Cash Flows from Operating Activities
Net Income
$
9,784
$
10,026
$
(242)
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization expense
8,677
8,557
120
Employee retirement benefits
108
(121)
229
Deferred income taxes
633
1,514
(881)
Provision for expected credit losses
1,061
665
396
Equity in losses (earnings) of unconsolidated businesses, net of dividends received
49
(18)
67
Changes in current assets and liabilities, net of effects from acquisition/disposition of businesses
(620)
(1,959)
1,339
Other, net
(1,672)
(999)
(673)
Net cash provided by operating activities
18,020
17,665
355
Cash Flows from Investing Activities
Capital expenditures (including capitalized software)
(10,070)
(10,491)
421
Cash received related to acquisitions of businesses, net
—
247
(247)
Acquisitions of wireless licenses
(1,085)
(2,275)
1,190
Collateral receipts (payments) related to derivative contracts, net
824
(2,075)
2,899
Other, net
131
(62)
193
Net cash used in investing activities
(10,200)
(14,656)
4,456
Cash Flows from Financing Activities
Proceeds from long-term borrowings
1,503
3,617
(2,114)
Proceeds from asset-backed long-term borrowings
3,705
5,053
(1,348)
Net proceeds from (repayments of) short-term commercial paper
(167)
2,560
(2,727)
Repayments of long-term borrowings and finance lease obligations
(2,600)
(7,405)
4,805
Repayments of asset-backed long-term borrowings
(2,383)
(2,695)
312
Dividends paid
(5,487)
(5,378)
(109)
Other, net
(157)
411
(568)
Net cash used in financing activities
(5,586)
(3,837)
(1,749)
Increase (decrease) in cash, cash equivalents and restricted cash
2,234
(828)
3,062
Cash, cash equivalents and restricted cash, beginning of period
4,111
4,161
(50)
Cash, cash equivalents and restricted cash, end of period
$
6,345
$
3,333
$
3,012
Footnotes:
Certain amounts have been reclassified to conform to the current period presentation.
Verizon Communications Inc.
Consumer - Selected Financial Results
(dollars in millions)
Unaudited
3 Mos. Ended 6/30/23
3 Mos. Ended 6/30/22
% Change
6 Mos. Ended 6/30/23
6 Mos. Ended 6/30/22
% Change
Operating Revenues
Service
$
18,641
$
18,149
2.7
$
37,097
$
36,275
2.3
Wireless equipment
4,430
5,708
(22.4)
9,308
11,082
(16.0)
Other
1,487
1,747
(14.9)
3,010
3,539
(14.9)
Total Operating Revenues
24,558
25,604
(4.1)
49,415
50,896
(2.9)
Operating Expenses
Cost of services
4,367
4,284
1.9
8,799
8,730
0.8
Cost of wireless equipment
4,626
6,221
(25.6)
9,817
12,034
(18.4)
Selling, general and administrative expense
4,988
4,738
5.3
9,909
9,290
6.7
Depreciation and amortization expense
3,247
3,211
1.1
6,461
6,373
1.4
Total Operating Expenses
17,228
18,454
(6.6)
34,986
36,427
(4.0)
Operating Income
$
7,330
$
7,150
2.5
$
14,429
$
14,469
(0.3)
Operating Income Margin
29.8
%
27.9
%
29.2
%
28.4
%
Segment EBITDA(1)
$
10,577
$
10,361
2.1
$
20,890
$
20,842
0.2
Segment EBITDA Margin(1)
43.1
%
40.5
%
42.3
%
41.0
%
Footnotes:
(1) Non-GAAP financial measure.
The segment financial results and metrics above exclude the effects of special items (other than the effects of acquisition-related intangible asset amortization), which the Company’s chief operating decision maker does not consider in assessing segment performance.
Certain intersegment transactions with corporate entities have not been eliminated.
Wireless retail postpaid connections per account (2)
2.80
2.74
2.2
Wireless retail prepaid ARPU (3)
$
31.42
$
31.26
0.5
$
31.06
$
31.07
—
Footnotes:
(1) Wireless retail postpaid ARPA - average service revenue per account from retail postpaid accounts.
(2) Statistics presented as of end of period.
(3) Wireless retail prepaid ARPU - average service revenue per unit from retail prepaid connections.
Where applicable, the operating results reflect certain adjustments, including those related to the 3G network shutdowns, migration activity among different types of devices and plans, customer profile changes, and adjustments in connection with mergers, acquisitions and divestitures.
Certain intersegment transactions with corporate entities have not been eliminated.
* Not meaningful
Verizon Communications Inc.
Business - Selected Financial Results
(dollars in millions)
Unaudited
3 Mos. Ended 6/30/23
3 Mos. Ended 6/30/22
% Change
6 Mos. Ended 6/30/23
6 Mos. Ended 6/30/22
% Change
Operating Revenues
Enterprise and Public Sector
$
3,784
$
3,867
(2.1)
$
7,571
$
7,845
(3.5)
Business Markets and Other(1)
3,109
3,130
(0.7)
6,213
6,206
0.1
Wholesale
590
629
(6.2)
1,193
1,284
(7.1)
Total Operating Revenues
7,483
7,626
(1.9)
14,977
15,335
(2.3)
Operating Expenses
Cost of services
2,543
2,559
(0.6)
5,125
5,165
(0.8)
Cost of wireless equipment
1,152
1,268
(9.1)
2,386
2,578
(7.4)
Selling, general and administrative expense
2,152
2,050
5.0
4,185
4,109
1.8
Depreciation and amortization expense
1,103
1,074
2.7
2,197
2,135
2.9
Total Operating Expenses
6,950
6,951
—
13,893
13,987
(0.7)
Operating Income
$
533
$
675
(21.0)
$
1,084
$
1,348
(19.6)
Operating Income Margin
7.1
%
8.9
%
7.2
%
8.8
%
Segment EBITDA(2)
$
1,636
$
1,749
(6.5)
$
3,281
$
3,483
(5.8)
Segment EBITDA Margin(2)
21.9
%
22.9
%
21.9
%
22.7
%
Footnotes:
(1) Referred to as "Business Markets and SaaS" in the first quarter of 2023.
(2) Non-GAAP financial measure.
Our Business segment’s wireless and wireline products and services are organized by the primary customer groups targeted by these offerings. During the first quarter of 2023, Verizon reorganized the customer groups within its Business segment. Previously, this segment was comprised of four customer groups: Small and Medium Business, Global Enterprise, Public Sector and Other, and Wholesale. Following the reorganization, there are now three customer groups: Enterprise and Public Sector, Business Markets and Other, and Wholesale. Enterprise and Public Sector combines the customers previously included in Global Enterprise and Public Sector and Other (excluding BlueJeans and Connect customers) as well as the commercial wireline customers previously included in Small and Medium Business. Business Markets and Other combines the customers previously included in Small and Medium Business (excluding commercial wireline customers), the BlueJeans customers previously included in Global Enterprise and Public Sector and Other, and the Connect customers previously included in Public Sector and Other. The Wholesale customer group remained unchanged. Prior period operating revenue results within the Business segment have been recast for these reorganized customer groups. There was no change to the composition of our reportable segments and total segment results, nor the determination of segment profit.
The segment financial results and metrics above exclude the effects of special items (other than the effects of acquisition-related intangible asset amortization), which the Company’s chief operating decision maker does not consider in assessing segment performance.
Certain intersegment transactions with corporate entities have not been eliminated.
Verizon Communications Inc.
Business - Selected Operating Statistics
Unaudited
6/30/23
6/30/22
% Change
Connections (‘000):
Wireless retail postpaid
29,105
28,208
3.2
Wireless retail postpaid phones
17,856
17,586
1.5
Fios video
64
70
(8.6)
Fios internet
380
367
3.5
FWA broadband
870
316
*
Wireline broadband
464
474
(2.1)
Total broadband
1,334
790
68.9
Unaudited
3 Mos. Ended 6/30/23
3 Mos. Ended 6/30/22
% Change
6 Mos. Ended 6/30/23
6 Mos. Ended 6/30/22
% Change
Gross Additions (‘000):
Wireless retail postpaid
1,590
1,582
0.5
3,197
3,084
3.7
Net Additions Detail (‘000):
Wireless retail postpaid
308
430
(28.4)
620
825
(24.8)
Wireless retail postpaid phones
144
227
(36.6)
280
483
(42.0)
Fios video
(1)
(1)
—
(3)
(1)
*
Fios internet
3
6
(50.0)
7
11
(36.4)
FWA broadband
133
88
51.1
270
170
58.8
Wireline broadband
(2)
(1)
*
(4)
(3)
(33.3)
Total broadband
131
87
50.6
266
167
59.3
Churn Rate:
Wireless retail postpaid
1.48
%
1.37
%
1.49
%
1.35
%
Wireless retail postpaid phones
1.10
%
1.07
%
1.13
%
1.07
%
Revenue Statistics (in millions):
Wireless service revenue
$
3,351
$
3,182
5.3
$
6,641
$
6,307
5.3
Fios revenues
$
308
$
298
3.4
$
615
$
593
3.7
Other Operating Statistics:
Wireless retail postpaid upgrade rate
2.7
%
3.1
%
Footnotes:
Where applicable, the operating results reflect certain adjustments, including those related to the 3G network shutdowns, migration activity among different types of devices and plans, customer profile changes, and adjustments in connection with mergers, acquisitions and divestitures.
Certain intersegment transactions with corporate entities have not been eliminated.
*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.
Unaudited
6/30/23
6/30/22
% Change
Connections (‘000)
Retail postpaid
121,579
119,683
1.6
Retail prepaid
21,646
23,138
(6.4)
Total retail
143,225
142,821
0.3
Retail postpaid phones
92,321
92,783
(0.5)
Unaudited
3 Mos. Ended 6/30/23
3 Mos. Ended 6/30/22
% Change
6 Mos. Ended 6/30/23
6 Mos. Ended 6/30/22
% Change
Net Additions Detail (‘000)
Retail postpaid phones
8
12
(33.3)
(119)
(24)
*
Retail postpaid
612
514
19.1
1,245
783
59.0
Retail prepaid
(304)
(229)
(32.8)
(655)
(309)
*
Total retail
308
285
8.1
590
474
24.5
Account Statistics
Retail postpaid accounts (‘000) (1)
34,855
35,132
(0.8)
Retail postpaid connections per account (1)
3.49
3.41
2.3
Retail postpaid ARPA (2)
$
154.51
$
145.50
6.2
$
153.39
$
145.18
5.7
Retail prepaid ARPU (3)
$
31.42
$
31.26
0.5
$
31.06
$
31.07
—
Churn Detail
Retail postpaid phone
0.83
%
0.81
%
0.87
%
0.82
%
Retail postpaid
1.07
%
1.03
%
1.11
%
1.03
%
Retail prepaid
4.24
%
3.90
%
4.28
%
3.79
%
Retail
1.56
%
1.50
%
1.60
%
1.49
%
Retail Postpaid Connection Statistics
Upgrade rate
3.3
%
5.0
%
Revenue Statistics (in millions) (4)
Wireless service
$
19,113
$
18,418
3.8
$
38,002
$
36,760
3.4
Wireless equipment
5,277
6,674
(20.9)
11,037
13,010
(15.2)
Wireless other
1,486
1,800
(17.4)
3,001
3,618
(17.1)
Total Wireless
$
25,876
$
26,892
(3.8)
$
52,040
$
53,388
(2.5)
Footnotes:
(1) Statistics presented as of end of period.
(2) Wireless retail postpaid ARPA - average service revenue per account from retail postpaid accounts.
(3) Wireless retail prepaid ARPU - average service revenue per unit from retail prepaid connections.
(4) Intersegment transactions between Consumer or Business segment with corporate entities have not been eliminated.
Where applicable, the operating results reflect certain adjustments, including those related to the 3G network shutdowns, migration activity among different types of devices and plans, customer profile changes, and adjustments in connection with mergers, acquisitions and divestitures.
*Not meaningful
Verizon Communications Inc.
Non-GAAP Reconciliations - Consolidated Verizon
Consolidated EBITDA and Consolidated Adjusted EBITDA
(dollars in millions)
Unaudited
3 Mos. Ended 6/30/23
3 Mos. Ended 3/31/23
3 Mos. Ended 12/31/22
3 Mos. Ended 9/30/22
3 Mos. Ended 6/30/22
3 Mos. Ended 3/31/22
Consolidated Net Income
$
4,766
$
5,018
$
6,698
$
5,024
$
5,315
$
4,711
Add:
Provision for income taxes
1,346
1,482
2,113
1,496
1,542
1,372
Interest expense
1,285
1,207
1,105
937
785
786
Depreciation and amortization expense (1)
4,359
4,318
4,218
4,324
4,321
4,236
Consolidated EBITDA
$
11,756
$
12,025
$
14,134
$
11,781
$
11,963
$
11,105
Add/(subtract):
Other (income) expense, net (2)
$
(210)
$
(114)
$
(2,687)
$
439
$
(49)
$
924
Equity in losses (earnings) of unconsolidated businesses
33
(9)
(4)
(2)
(41)
3
Severance charges
237
—
304
—
—
—
Asset rationalization
155
—
—
—
—
—
215
(123)
(2,387)
437
(90)
927
Consolidated Adjusted EBITDA
$
11,971
$
11,902
$
11,747
$
12,218
$
11,873
$
12,032
Consolidated Adjusted EBITDA - Year over year change %
0.8
%
Footnotes:
(1) Includes Amortization of acquisition-related intangible assets.
(2) Includes Pension and benefits remeasurement adjustments and Early debt redemption costs, where applicable.
Consolidated EBITDA and Consolidated Adjusted EBITDA (LTM)
Unaudited
12 Mos. Ended 6/30/23
12 Mos. Ended 3/31/23
12 Mos. Ended 12/31/22
Consolidated Net Income
$
21,506
$
22,055
$
21,748
Add:
Provision for income taxes
6,437
6,633
6,523
Interest expense
4,534
4,034
3,613
Depreciation and amortization expense (1)
17,219
17,181
17,099
Consolidated EBITDA
$
49,696
$
49,903
$
48,983
Add/(subtract):
Other (income) expense, net (2)
$
(2,572)
$
(2,411)
$
(1,373)
Equity in losses (earnings) of unconsolidated businesses
18
(56)
(44)
Severance charges
541
304
304
Asset rationalization
155
—
—
(1,858)
(2,163)
(1,113)
Consolidated Adjusted EBITDA
$
47,838
$
47,740
$
47,870
Footnotes:
(1) Includes Amortization of acquisition-related intangible assets.
(2) Includes Pension and benefits remeasurement adjustments and Early debt redemption costs, where applicable.
Verizon Communications Inc.
Net Unsecured Debt and Net Unsecured Debt to Consolidated Adjusted EBITDA Ratio
(dollars in millions)
Unaudited
6/30/23
3/31/23
12/31/22
Debt maturing within one year
$
14,827
$
12,081
$
9,963
Long-term debt
137,871
140,772
140,676
Total Debt
152,698
152,853
150,639
Less Secured debt
21,342
20,835
20,008
Unsecured Debt
131,356
132,018
130,631
Less Cash and cash equivalents
4,803
2,234
2,605
Net Unsecured Debt
$
126,553
$
129,784
$
128,026
Consolidated Net Income (LTM)
$
21,506
$
21,748
Unsecured Debt to Consolidated Net Income Ratio
6.1
x
6.0
x
Consolidated Adjusted EBITDA (LTM)
$
47,838
$
47,870
Net Unsecured Debt to Consolidated Adjusted EBITDA Ratio
2.6x
2.7
x
Net Unsecured Debt - Quarter over quarter change
$
(3,231)
Adjusted Earnings per Common Share (Adjusted EPS)
(dollars in millions, except per share amounts)
Unaudited
3 Mos. Ended 6/30/23
3 Mos. Ended 6/30/22
Pre-tax
Tax
After-Tax
Pre-tax
Tax
After-Tax
EPS
$
1.10
$
1.24
Amortization of acquisition-related intangible assets
$
206
$
(53)
$
153
0.04
$
237
$
(62)
$
175
0.04
Severance, pension and benefits charges
237
(59)
178
0.04
198
(51)
147
0.03
Asset rationalization
155
(33)
122
0.03
—
—
—
—
$
598
$
(145)
$
453
$
0.11
$
435
$
(113)
$
322
$
0.08
Adjusted EPS
$
1.21
$
1.31
Footnotes:
Adjusted EPS may not add due to rounding.
Free Cash Flow
(dollars in millions)
Unaudited
6 Mos. Ended 6/30/23
6 Mos. Ended 6/30/22
Net Cash Provided by Operating Activities
$
18,020
$
17,665
Capital expenditures (including capitalized software)
