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 flow1increased $2.2 billion year over year
3Q 2023 highlights
Consolidated:
Total Broadband:
Total Wireless:
NEW YORK, Oct. 24, 2023 (GLOBE NEWSWIRE) -- 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
Verizon Consumer results
Verizon Business results
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:
In addition, for 2023, Verizon continues to expect the following:
1Non-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/.
Forward-looking statementsIn 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.
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. |
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) | (18,250 - 19,250) | (18,250 - 19,250) | |||||
Free Cash Flow Forecast | $ | 18,000 | $ | 17,000 | |||
Free Cash Flow Forecast Full Year 2023 change | $ | 1,000 |
Non-GAAP Reconciliations - Segments
Segment EBITDA and Segment EBITDA Margin | ||||||||||||||||
Consumer | ||||||||||||||||
(dollars in millions) | ||||||||||||||||
Unaudited | 3 Mos. Ended 9/30/23 | 3 Mos. Ended 9/30/22 | 9 Mos. Ended 9/30/23 | 9 Mos. Ended 9/30/22 | ||||||||||||
Operating Income | $ | 7,547 | $ | 7,349 | $ | 21,976 | $ | 21,818 | ||||||||
Add Depreciation and amortization expense | 3,272 | 3,232 | 9,733 | 9,605 | ||||||||||||
Segment EBITDA | $ | 10,819 | $ | 10,581 | $ | 31,709 | $ | 31,423 | ||||||||
Year over year change % | 2.2 | % | 0.9 | % | ||||||||||||
Total operating revenues | $ | 25,257 | $ | 25,840 | $ | 74,672 | $ | 76,736 | ||||||||
Operating Income Margin | 29.9 | % | 28.4 | % | 29.4 | % | 28.4 | % | ||||||||
Segment EBITDA Margin | 42.8 | % | 40.9 | % | 42.5 | % | 40.9 | % |
Business | ||||||||||||||||
(dollars in millions) | ||||||||||||||||
Unaudited | 3 Mos. Ended 9/30/23 | 3 Mos. Ended 9/30/22 | 9 Mos. Ended 9/30/23 | 9 Mos. Ended 9/30/22 | ||||||||||||
Operating Income | $ | 539 | $ | 698 | $ | 1,623 | $ | 2,046 | ||||||||
Add Depreciation and amortization expense | 1,127 | 1,079 | 3,324 | 3,214 | ||||||||||||
Segment EBITDA | $ | 1,666 | $ | 1,777 | $ | 4,947 | $ | 5,260 | ||||||||
Year over year change % | (6.2 | )% | (6.0 | )% | ||||||||||||
Total operating revenues | $ | 7,527 | $ | 7,837 | $ | 22,504 | $ | 23,172 | ||||||||
Operating Income Margin | 7.2 | % | 8.9 | % | 7.2 | % | 8.8 | % | ||||||||
Segment EBITDA Margin | 22.1 | % | 22.7 | % | 22.0 | % | 22.7 | % |
Media contacts:Katie Magnotta201-602-9235katie.magnotta@verizon.com
Eric Wilkens201-572-9317eric.wilkens@verizon.com
Source: Verizon Sourcing LLC