Company ended the quarter with approximately 10.3 million broadband subscribers, an increase of nearly 21 percent year over year
Year-to-date cash flow from operations increased approximately $600 million year over year, and year-to-date free cash flow1 increased $2.2 billion year over year
3Q 2023 highlights
Consolidated:
•$1.13 in EPS, compared with $1.17 in third-quarter 2022; adjusted EPS1, excluding special items, of $1.22, compared with $1.32 in third-quarter 2022.
•Total operating revenue of $33.3 billion, a decrease of 2.6 percent from third-quarter 2022.
•Year-to-date cash flow from operations of $28.8 billion, an increase from $28.2 billion in 2022.
•Free cash flow1 year-to-date was $14.6 billion, an increase from $12.4 billion in 2022.
•Net income of $4.9 billion, a decrease of 2.8 percent from third-quarter 2022, and consolidated adjusted EBITDA1 of $12.2 billion, up 0.2 percent year over year.
Total Broadband:
•Total broadband net additions of 434,000, representing the fourth consecutive quarter that Verizon reported more than 400,000 broadband net additions. Total broadband net additions included 384,000 fixed wireless net additions, an increase of 42,000 fixed wireless net additions from third-quarter 2022. Verizon now has approximately 10.3 million total broadband subscribers, including nearly 2.7 million subscribers on its fixed wireless service.
•72,000 Fios Internet net additions, an increase from 61,000 Fios Internet net additions in third-quarter 2022.
Total Wireless:
•Total wireless service revenue2 of $19.3 billion, a 2.9 percent increase year over year.
•Postpaid phone net additions of 100,000, and retail postpaid net additions of 581,000.
•Total retail postpaid churn of 1.15 percent, and retail postpaid phone churn of 0.90 percent.
NEW YORK - Verizon Communications Inc. (NYSE, Nasdaq: VZ) reported third-quarter results today and raised its free cash flow guidance for the year. The company's performance was highlighted by continued wireless service revenue growth, total broadband net additions, and improving profitability.
"We continued to make steady progress in the third quarter with a clear focus on growing wireless service revenue, delivering healthy consolidated adjusted EBITDA and increasing free cash flow," said Verizon Chairman and CEO Hans Vestberg. "Our financial discipline, combined with our healthy balance sheet, enabled us to increase our dividend for the 17th consecutive year, which is the longest current streak of dividend increases in the U.S. telecom industry."
For third-quarter 2023, Verizon reported EPS of $1.13, compared with $1.17 in third-quarter 2022. On an adjusted basis1, excluding special items, EPS was $1.22 in third-quarter 2023, compared with adjusted EPS1 of $1.32 in third-quarter 2022.
Third-quarter 2023 earnings reflected a pre-tax loss from special items of approximately $579 million. This included the impacts of amortization of intangible assets related to TracFone and other acquisitions of $224 million, a pre-tax non-strategic business shutdown charge of $179 million related to the shutdown of the BlueJeans business offering and pre-tax business transformation costs of $176 million.
Consolidated results
•Total consolidated operating revenue in third-quarter 2023 of $33.3 billion, a decrease of 2.6 percent from third-quarter 2022. This decline was primarily due to reduced wireless equipment revenue and lower postpaid upgrade activity.
•Total wireless service revenue2 in third-quarter 2023 increased 2.9 percent year over year and 1.1 percent from second-quarter 2023. This increase was driven by targeted pricing actions implemented in recent quarters, the larger allocation of administrative and telco recovery fees from other revenue into wireless service revenue, and growth from fixed wireless offerings.
•Net income of $4.9 billion, a decrease of 2.8 percent compared to third-quarter 2022, and consolidated adjusted EBITDA1 of $12.2 billion, an increase of 0.2 percent year over year.
•Year-to-date cash flow from operations totaled $28.8 billion, an increase from $28.2 billion in 2022. This increase is related to continued working capital improvements associated with fewer upgrades and lower inventory levels, partially offset by higher interest payments.
•Capital expenditures year-to-date were $14.2 billion.
Page 2
VlpHU09DSUQyMDE5UTE=
•Free cash flow1 year-to-date was $14.6 billion, an increase from $12.4 billion in 2022.
•Verizon's unsecured debt as of the end of third-quarter 2023 decreased by $4.9 billion sequentially to $126.4 billion. The company's net unsecured debt1 balance improved sequentially by $4.3 billion to $122.2 billion. At the end of third-quarter 2023, Verizon's ratio of unsecured debt to net income (LTM) was approximately 5.9 times, and its net unsecured debt to adjusted EBITDA ratio1 was approximately 2.6 times.
Verizon Consumer results
•Total Verizon Consumer revenue was $25.3 billion, a decrease of 2.3 percent year over year. Growth in service and other revenue was offset by wireless equipment revenue declines.
•Wireless service revenue increased 2.9 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 1.04 percent in third-quarter 2023, and wireless retail postpaid phone churn was 0.85 percent.
•In third-quarter 2023, Consumer reported 51,000 wireless retail postpaid phone net losses, representing an improvement of 85,000 from second-quarter 2023 and 138,000 from third-quarter 2022. Consumer postpaid phone gross additions increased 2.3 percent year over year in third-quarter 2023, continuing the momentum that began in second-half 2022.
•Consumer reported 207,000 wireless retail prepaid net losses in third-quarter 2023.
•Consumer reported 251,000 fixed wireless net additions and 69,000 Fios Internet net additions in third-quarter 2023. Consumer Fios revenue was $2.9 billion in third-quarter 2023, a decrease of 0.2 percent year over year.
•In third-quarter 2023, Consumer operating income was $7.5 billion, an increase of 2.7 percent year over year, and segment operating income margin was 29.9 percent, an increase from 28.4 percent in third-quarter 2022. Segment EBITDA1 in third-quarter 2023 was $10.8 billion, an increase of 2.2 percent year over year. This improvement can be attributed to wireless service revenue growth and lower upgrade volumes. Segment EBITDA margin1 was 42.8 percent, an increase from 40.9 percent in third-quarter 2022.
Verizon Business results
•Total Verizon Business revenue was $7.5 billion in third-quarter 2023, a decrease of 4.0 percent year over year. Lower wireline revenue and lower wireless equipment revenue was partially offset by higher wireless service revenue.
•Business wireless service revenue was $3.4 billion, an increase of 2.9 percent year over year. This growth was driven by continued strong net additions and pricing actions implemented in recent quarters.
•Business reported 330,000 wireless retail postpaid net additions in third-quarter 2023, including 151,000 postpaid phone net additions. This was the ninth consecutive quarter that Business reported more than 125,000 postpaid phone net additions. Business continues to grow volumes and expand its relationships with customers strengthening its position as a wireless market share leader.
Page 3
VlpHU09DSUQyMDE5UTE=
•Business wireless retail postpaid churn was 1.47 percent in third-quarter 2023, and wireless retail postpaid phone churn was 1.14 percent.
•Business reported 133,000 fixed wireless net additions in third-quarter 2023.
•In third-quarter 2023, Verizon Business operating income was $539 million, a decrease of 22.8 percent year over year, and segment operating income margin was 7.2 percent, a decrease from 8.9 percent in third-quarter 2022. Segment EBITDA1 was $1.7 billion in third-quarter 2023, a decrease of 6.2 percent year over year, driven by continued declines in high margin wireline revenues. Segment EBITDA margin1 was 22.1 percent in third-quarter 2023, a decrease from 22.7 percent in third-quarter 2022.
Outlook and guidance
The company does not provide a reconciliation for certain 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 expects the following:
•Cash flow from operations in the range of $36.25 billion to $37.25 billion.
•Capital spending at the higher end of the previously guided range of $18.25 billion to $19.25 billion.
•Free cash flow1 above $18 billion, a $1 billion increase from the previously issued guidance.
In addition, 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.
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 Total wireless service revenue represents the sum of Consumer and Business segments.
3 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.
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/.
Page 4
VlpHU09DSUQyMDE5UTE=
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 government investigations, regulatory developments, litigation, penalties and other liability, remediation and compliance costs, 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.
Page 5
VlpHU09DSUQyMDE5UTE=
Verizon Communications Inc.
Condensed Consolidated Statements of Income
(dollars in millions, except per share amounts)
Unaudited
3 Mos. Ended 9/30/23
3 Mos. Ended 9/30/22
% Change
9 Mos. Ended 9/30/23
9 Mos. Ended 9/30/22
% Change
Operating Revenues
Service revenues and other
$
27,523
$
27,666
(0.5)
$
81,994
$
81,999
—
Wireless equipment revenues
5,813
6,575
(11.6)
16,850
19,585
(14.0)
Total Operating Revenues
33,336
34,241
(2.6)
98,844
101,584
(2.7)
Operating Expenses
Cost of services
7,084
7,293
(2.9)
21,148
21,452
(1.4)
Cost of wireless equipment
6,353
7,308
(13.1)
18,557
21,919
(15.3)
Selling, general and administrative expense
7,995
7,422
7.7
23,754
22,090
7.5
Depreciation and amortization expense
4,431
4,324
2.5
13,108
12,881
1.8
Total Operating Expenses
25,863
26,347
(1.8)
76,567
78,342
(2.3)
Operating Income
7,473
7,894
(5.3)
22,277
23,242
(4.2)
Equity in earnings (losses) of unconsolidated businesses
(18)
2
*
(42)
40
*
Other income (expense), net
170
(439)
*
494
(1,314)
*
Interest expense
(1,433)
(937)
52.9
(3,925)
(2,508)
56.5
Income Before Provision For Income Taxes
6,192
6,520
(5.0)
18,804
19,460
(3.4)
Provision for income taxes
(1,308)
(1,496)
(12.6)
(4,136)
(4,410)
(6.2)
Net Income
$
4,884
$
5,024
(2.8)
$
14,668
$
15,050
(2.5)
Net income attributable to noncontrolling interests
$
122
$
124
(1.6)
$
349
$
371
(5.9)
Net income attributable to Verizon
4,762
4,900
(2.8)
14,319
14,679
(2.5)
Net Income
$
4,884
$
5,024
(2.8)
$
14,668
$
15,050
(2.5)
Basic Earnings Per Common Share
Net income attributable to Verizon
$
1.13
$
1.17
(3.4)
$
3.40
$
3.49
(2.6)
Weighted-average shares outstanding (in millions)
4,213
4,202
4,209
4,201
Diluted Earnings Per Common Share (1)
Net income attributable to Verizon
$
1.13
$
1.17
(3.4)
$
3.40
$
3.49
(2.6)
Weighted-average shares outstanding (in millions)
4,216
4,204
4,214
4,203
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
9/30/23
12/31/22
$ Change
Assets
Current assets
Cash and cash equivalents
$
4,210
$
2,605
$
1,605
Accounts receivable
24,559
25,332
(773)
Less Allowance for credit losses
957
826
131
Accounts receivable, net
23,602
24,506
(904)
Inventories
2,240
2,388
(148)
Prepaid expenses and other
8,067
8,358
(291)
Total current assets
38,119
37,857
262
Property, plant and equipment
316,767
307,689
9,078
Less Accumulated depreciation
209,277
200,255
9,022
Property, plant and equipment, net
107,490
107,434
56
Investments in unconsolidated businesses
929
1,071
(142)
Wireless licenses
155,465
149,796
5,669
Goodwill
28,642
28,671
(29)
Other intangible assets, net
10,952
11,461
(509)
Operating lease right-of-use assets
25,086
26,130
(1,044)
Other assets
18,147
17,260
887
Total assets
$
384,830
$
379,680
$
5,150
Liabilities and Equity
Current liabilities
Debt maturing within one year
$
12,950
$
9,963
$
2,987
Accounts payable and accrued liabilities
26,140
23,977
2,163
Current operating lease liabilities
3,906
4,134
(228)
Other current liabilities
12,681
12,097
584
Total current liabilities
55,677
50,171
5,506
Long-term debt
134,441
140,676
(6,235)
Employee benefit obligations
12,226
12,974
(748)
Deferred income taxes
44,434
43,441
993
Non-current operating lease liabilities
20,773
21,558
(785)
Other liabilities
18,191
18,397
(206)
Total long-term liabilities
230,065
237,046
(6,981)
Equity
Common stock
429
429
—
Additional paid in capital
13,524
13,420
104
Retained earnings
88,416
82,380
6,036
Accumulated other comprehensive loss
(1,428)
(1,865)
437
Common stock in treasury, at cost
(3,828)
(4,013)
185
Deferred compensation – employee stock ownership plans and other
628
793
(165)
Noncontrolling interests
1,347
1,319
28
Total equity
99,088
92,463
6,625
Total liabilities and equity
$
384,830
$
379,680
$
5,150
Verizon Communications Inc.
Consolidated - Selected Financial and Operating Statistics
(dollars in millions, except per share amounts)
Unaudited
9/30/23
12/31/22
Total debt
$
147,391
$
150,639
Unsecured debt
$
126,440
$
130,631
Net unsecured debt(1)
$
122,230
$
128,026
Unsecured debt / Consolidated Net Income (LTM)
5.9
x
6.0
x
Net unsecured debt / Consolidated Adjusted EBITDA(1)(2)
2.6
x
2.7
x
Common shares outstanding end of period (in millions)
4,204
4,200
Total employees (‘000)
110.5
117.1
Quarterly cash dividends declared per common share
$
0.6650
$
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
9 Mos. Ended 9/30/23
9 Mos. Ended 9/30/22
$ Change
Cash Flows from Operating Activities
Net Income
$
14,668
$
15,050
$
(382)
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization expense
13,108
12,881
227
Employee retirement benefits
161
479
(318)
Deferred income taxes
822
1,595
(773)
Provision for expected credit losses
1,596
1,048
548
Equity in losses (earnings) of unconsolidated businesses, net of dividends received
69
(13)
82
Changes in current assets and liabilities, net of effects from acquisition/disposition of businesses
972
(458)
1,430
Other, net
(2,598)
(2,383)
(215)
Net cash provided by operating activities
28,798
28,199
599
Cash Flows from Investing Activities
Capital expenditures (including capitalized software)
(14,164)
(15,811)
1,647
Cash received related to acquisitions of businesses, net
—
248
(248)
Acquisitions of wireless licenses
(1,859)
(2,890)
1,031
Collateral receipts (payments) related to derivative contracts, net
162
(4,857)
5,019
Proceeds from disposition of business
—
33
(33)
Other, net
253
(43)
296
Net cash used in investing activities
(15,608)
(23,320)
7,712
Cash Flows from Financing Activities
Proceeds from long-term borrowings
1,999
4,605
(2,606)
Proceeds from asset-backed long-term borrowings
4,656
5,939
(1,283)
Net proceeds from short-term commercial paper
333
4,514
(4,181)
Repayments of long-term borrowings and finance lease obligations
(5,568)
(8,001)
2,433
Repayments of asset-backed long-term borrowings
(3,729)
(3,647)
(82)
Dividends paid
(8,231)
(8,066)
(165)
Other, net
(1,101)
(797)
(304)
Net cash used in financing activities
(11,641)
(5,453)
(6,188)
Increase (decrease) in cash, cash equivalents and restricted cash
1,549
(574)
2,123
Cash, cash equivalents and restricted cash, beginning of period
4,111
4,161
(50)
Cash, cash equivalents and restricted cash, end of period
$
5,660
$
3,587
$
2,073
Verizon Communications Inc.
Consumer - Selected Financial Results
(dollars in millions)
Unaudited
3 Mos. Ended 9/30/23
3 Mos. Ended 9/30/22
% Change
9 Mos. Ended 9/30/23
9 Mos. Ended 9/30/22
% Change
Operating Revenues
Service
$
18,850
$
18,421
2.3
$
55,947
$
54,696
2.3
Wireless equipment
4,902
5,558
(11.8)
14,210
16,640
(14.6)
Other
1,505
1,861
(19.1)
4,515
5,400
(16.4)
Total Operating Revenues
25,257
25,840
(2.3)
74,672
76,736
(2.7)
Operating Expenses
Cost of services
4,419
4,566
(3.2)
13,218
13,296
(0.6)
Cost of wireless equipment
5,133
5,963
(13.9)
14,950
17,997
(16.9)
Selling, general and administrative expense
4,886
4,730
3.3
14,795
14,020
5.5
Depreciation and amortization expense
3,272
3,232
1.2
9,733
9,605
1.3
Total Operating Expenses
17,710
18,491
(4.2)
52,696
54,918
(4.0)
Operating Income
$
7,547
$
7,349
2.7
$
21,976
$
21,818
0.7
Operating Income Margin
29.9
%
28.4
%
29.4
%
28.4
%
Segment EBITDA(1)
$
10,819
$
10,581
2.2
$
31,709
$
31,423
0.9
Segment EBITDA Margin(1)
42.8
%
40.9
%
42.5
%
40.9
%
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)
2.81
2.75
2.2
Wireless retail prepaid ARPU (3)
$
31.87
$
31.18
2.2
$
31.32
$
31.11
0.7
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 9/30/23
3 Mos. Ended 9/30/22
% Change
9 Mos. Ended 9/30/23
9 Mos. Ended 9/30/22
% Change
Operating Revenues
Enterprise and Public Sector
$
3,787
$
3,940
(3.9)
$
11,358
$
11,785
(3.6)
Business Markets and Other
3,184
3,236
(1.6)
9,397
9,442
(0.5)
Wholesale
556
661
(15.9)
1,749
1,945
(10.1)
Total Operating Revenues
7,527
7,837
(4.0)
22,504
23,172
(2.9)
Operating Expenses
Cost of services
2,536
2,653
(4.4)
7,661
7,818
(2.0)
Cost of wireless equipment
1,220
1,344
(9.2)
3,606
3,922
(8.1)
Selling, general and administrative expense
2,105
2,063
2.0
6,290
6,172
1.9
Depreciation and amortization expense
1,127
1,079
4.4
3,324
3,214
3.4
Total Operating Expenses
6,988
7,139
(2.1)
20,881
21,126
(1.2)
Operating Income
$
539
$
698
(22.8)
$
1,623
$
2,046
(20.7)
Operating Income Margin
7.2
%
8.9
%
7.2
%
8.8
%
Segment EBITDA(1)
$
1,666
$
1,777
(6.2)
$
4,947
$
5,260
(6.0)
Segment EBITDA Margin(1)
22.1
%
22.7
%
22.0
%
22.7
%
Footnotes:
(1) 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
9/30/23
9/30/22
% Change
Connections (‘000):
Wireless retail postpaid
29,455
28,584
3.0
Wireless retail postpaid phones
18,019
17,795
1.3
Fios video
63
69
(8.7)
Fios internet
383
370
3.5
FWA broadband
1,038
442
*
Wireline broadband
461
471
(2.1)
Total broadband
1,499
913
64.2
Unaudited
3 Mos. Ended 9/30/23
3 Mos. Ended 9/30/22
% Change
9 Mos. Ended 9/30/23
9 Mos. Ended 9/30/22
% Change
Gross Additions (‘000):
Wireless retail postpaid
1,618
1,566
3.3
4,815
4,650
3.5
Net Additions Detail (‘000):
Wireless retail postpaid
330
360
(8.3)
950
1,185
(19.8)
Wireless retail postpaid phones
151
197
(23.4)
431
680
(36.6)
Fios video
(1)
(1)
—
(4)
(2)
*
Fios internet
3
3
—
10
14
(28.6)
FWA broadband
133
108
23.1
403
278
45.0
Wireline broadband
(3)
(3)
—
(7)
(6)
(16.7)
Total broadband
130
105
23.8
396
272
45.6
Churn Rate:
Wireless retail postpaid
1.47
%
1.42
%
1.48
%
1.38
%
Wireless retail postpaid phones
1.14
%
1.10
%
1.13
%
1.08
%
Revenue Statistics (in millions):
Wireless service revenue
$
3,367
$
3,273
2.9
$
10,008
$
9,580
4.5
Fios revenues
$
308
$
304
1.3
$
923
$
897
2.9
Other Operating Statistics:
Wireless retail postpaid upgrade rate
2.9
%
3.3
%
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
9/30/23
9/30/22
% Change
Connections (‘000)
Retail postpaid
122,159
120,062
1.7
Retail prepaid
21,420
23,076
(7.2)
Total retail
143,579
143,138
0.3
Retail postpaid phones
92,426
92,792
(0.4)
Unaudited
3 Mos. Ended 9/30/23
3 Mos. Ended 9/30/22
% Change
9 Mos. Ended 9/30/23
9 Mos. Ended 9/30/22
% Change
Net Additions Detail (‘000)
Retail postpaid phones
100
8
*
(19)
(16)
*
Retail postpaid
581
388
49.7
1,826
1,171
55.9
Retail prepaid
(207)
39
*
(862)
(270)
*
Total retail
374
427
(12.4)
964
901
7.0
Account Statistics
Retail postpaid accounts (‘000) (1)
34,855
35,034
(0.5)
Retail postpaid connections per account (1)
3.50
3.43
2.0
Retail postpaid ARPA (2)
$
156.13
$
149.82
4.2
$
154.30
$
146.73
5.2
Retail prepaid ARPU (3)
$
31.87
$
31.18
2.2
$
31.32
$
31.11
0.7
Churn Detail
Retail postpaid phone
0.90
%
0.92
%
0.88
%
0.85
%
Retail postpaid
1.15
%
1.17
%
1.12
%
1.08
%
Retail prepaid
4.39
%
3.90
%
4.31
%
3.83
%
Retail
1.63
%
1.62
%
1.61
%
1.53
%
Retail Postpaid Connection Statistics
Upgrade rate
3.4
%
4.7
%
Revenue Statistics (in millions) (4)
Wireless service
$
19,330
$
18,790
2.9
$
57,332
$
55,550
3.2
Wireless equipment
5,813
6,575
(11.6)
16,850
19,585
(14.0)
Wireless other
1,507
1,922
(21.6)
4,508
5,540
(18.6)
Total Wireless
$
26,650
$
27,287
(2.3)
$
78,690
$
80,675
(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 9/30/23
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
$
4,884
$
4,766
$
5,018
$
6,698
$
5,024
$
5,315
$
4,711
Add:
Provision for income taxes
1,308
1,346
1,482
2,113
1,496
1,542
1,372
Interest expense
1,433
1,285
1,207
1,105
937
785
786
Depreciation and amortization expense (1)
4,431
4,359
4,318
4,218
4,324
4,321
4,236
Consolidated EBITDA
$
12,056
$
11,756
$
12,025
$
14,134
$
11,781
$
11,963
$
11,105
Add/(subtract):
Other (income) expense, net (2)
$
(170)
$
(210)
$
(114)
$
(2,687)
$
439
$
(49)
$
924
Equity in losses (earnings) of unconsolidated businesses
18
33
(9)
(4)
(2)
(41)
3
Severance charges
—
237
—
304
—
—
—
Asset rationalization
—
155
—
—
—
—
—
Business transformation costs
176
—
—
—
—
—
—
Non-strategic business shutdown
158
—
—
—
—
—
—
182
215
(123)
(2,387)
437
(90)
927
Consolidated Adjusted EBITDA
$
12,238
$
11,971
$
11,902
$
11,747
$
12,218
$
11,873
$
12,032
Consolidated Adjusted EBITDA - Year over year change %
0.2
%
Footnotes:
(1) Includes Amortization of acquisition-related intangible assets and a portion of the Non-strategic business shutdown, where applicable.
(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 9/30/23
12 Mos. Ended 6/30/23
12 Mos. Ended 12/31/22
Consolidated Net Income
$
21,366
$
21,506
$
21,748
Add:
Provision for income taxes
6,249
6,437
6,523
Interest expense
5,030
4,534
3,613
Depreciation and amortization expense (1)
17,326
17,219
17,099
Consolidated EBITDA
$
49,971
$
49,696
$
48,983
Add/(subtract):
Other (income) expense, net (2)
$
(3,181)
$
(2,572)
$
(1,373)
Equity in losses (earnings) of unconsolidated businesses
38
18
(44)
Severance charges
541
541
304
Asset rationalization
155
155
—
Business transformation costs
176
—
—
Non-strategic business shutdown
158
—
—
(2,113)
(1,858)
(1,113)
Consolidated Adjusted EBITDA
$
47,858
$
47,838
$
47,870
Footnotes:
(1) Includes Amortization of acquisition-related intangible assets and a portion of the Non-strategic business shutdown, where applicable.
(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
9/30/23
6/30/23
12/31/22
Debt maturing within one year
$
12,950
$
14,827
$
9,963
Long-term debt
134,441
137,871
140,676
Total Debt
147,391
152,698
150,639
Less Secured debt
20,951
21,342
20,008
Unsecured Debt
126,440
131,356
130,631
Less Cash and cash equivalents
4,210
4,803
2,605
Net Unsecured Debt
$
122,230
$
126,553
$
128,026
Consolidated Net Income (LTM)
$
21,366
$
21,748
Unsecured Debt to Consolidated Net Income Ratio
5.9
x
6.0
x
Consolidated Adjusted EBITDA (LTM)
$
47,858
$
47,870
Net Unsecured Debt to Consolidated Adjusted EBITDA Ratio
2.6
x
2.7
x
Net Unsecured Debt - Quarter over quarter change
$
(4,323)
Adjusted Earnings per Common Share (Adjusted EPS)
(dollars in millions, except per share amounts)
Unaudited
3 Mos. Ended 9/30/23
3 Mos. Ended 9/30/22
Pre-tax
Tax
After-Tax
Pre-tax
Tax
After-Tax
EPS
$
1.13
$
1.17
Amortization of acquisition-related intangible assets
$
224
$
(56)
$
168
0.04
$
236
$
(58)
$
178
0.04
Business transformation costs
176
(45)
131
0.03
—
—
—
—
—
Non-strategic business shutdown
179
(83)
96
0.02
—
—
—
—
Severance, pension and benefit charges
—
—
—
—
645
(162)
483
0.11
$
579
$
(184)
$
395
$
0.09
$
881
$
(220)
$
661
$
0.16
Adjusted EPS
$
1.22
$
1.32
Footnotes:
Adjusted EPS may not add due to rounding.
Free Cash Flow
(dollars in millions)
Unaudited
9 Mos. Ended 9/30/23
9 Mos. Ended 9/30/22
Net Cash Provided by Operating Activities
$
28,798
$
28,199
Capital expenditures (including capitalized software)
(14,164)
(15,811)
Free Cash Flow
$
14,634
$
12,388
Year over year change
$
2,246
Free Cash Flow Forecast Full Year 2023
(dollars in millions)
Revised
Original
Unaudited
Forecast
Forecast
Net Cash Provided by Operating Activities Forecast
$
36,250 - 37,250
$
35,250 - 36,250
Capital expenditures forecast (including capitalized software)
