EX-99 2 a2022q1exhibit99.htm EX-99 Document

Exhibit 99
vzlogoa58.jpg

News Release

FOR IMMEDIATE RELEASE
Media contacts:
April 22, 2022Kim Ancin
908.559.3227
kimberly.ancin@verizon.com

Verizon reports 1Q earnings for 2022


Company reports record demand for fixed wireless broadband,
wireless service revenue growth and
continued 5G Ultra Wideband network expansion



Highlights:
•Verizon Consumer Group delivered top line growth that was driven by the first full quarter of ownership of TracFone Wireless, Inc., (TracFone), higher equipment revenue, and strong wireless service revenue growth.
•Verizon Business Group experienced a solid start to the year, with momentum in business activity and demand for wireless products. These results were driven by wireless strength in Small and Medium Business, Enterprise, and Public Sector, each of which delivered double digit phone gross addition growth.
•The January launch of C-Band and expansion of our 5G Ultra Wideband network enabled more customers to enjoy the most reliable 5G network in the United States, while also accelerating and amplifying the company's nationwide broadband strategy. Verizon delivered its highest broadband net additions in over a decade. The recent early clearing spectrum announcement, gives the company the ability to deploy more C-Band spectrum, a full year sooner than expected, which will unlock another 40 million of addressable population.

Consolidated:
•$1.09 in earnings per share (EPS), compared with $1.27 in first-quarter 2021; adjusted EPS1, excluding special items, of $1.35 compared with $1.36 in first-quarter 20212.
•Total revenue of $33.6 billion, up 2.1 percent from first-quarter 2021.
•Net income of $4.7 billion, a decrease of 12.4 percent from first-quarter 2021, and adjusted EBITDA1 of $12.0 billion, down 1.1 percent year over year.




Total Broadband:
•229,000 total broadband net additions, the best quarter in over a decade, including 194,000 fixed wireless net additions, 2.5 times the fourth quarter 2021 level.
•35,000 wireline broadband net additions, driven by 60,000 Fios Internet net additions in first-quarter 2022.

Total Wireless:
•Total wireless service revenue of $18.3 billion, a 9.5 percent increase year over year.
•Total retail postpaid churn of 1.04 percent, and retail postpaid phone churn of 0.83 percent.
•Industry leading 143.0 million total retail connections, including postpaid phone net loss of 36,000, an 80 percent improvement from a year ago and the best first-quarter performance since 2018.
•Total wireless activations up 11 percent year over year.

NEW YORK - Verizon Communications Inc. (NYSE, Nasdaq: VZ) reported first-quarter results today, including the expansion of its 5G Ultra Wideband network to nearly 113 million people around the country and elevated demands for its 5G mobility and nationwide broadband services. The company's performance produced its best broadband result in over a decade, a surge in upgrades and increased wireless service revenue growth.
"Our operational performance in the first-quarter further positions Verizon for long-term growth and increases our competitive standing in mobility, nationwide broadband, the value market, and above the network business solutions and applications,” said Verizon Chairman and CEO Hans Vestberg. "The January launch of C-Band and expansion of our 5G Ultra Wideband network helped to amplify our fixed wireless momentum in both Consumer and Business, with quarterly additions 2.5 times that of our fourth-quarter performance, and drove momentum in wireless upgrades. We continue to accelerate our C-Band network build with our goal of reaching at least 175 million people by the end of the year and, with the recent early clearing spectrum announcement, we now have the ability to deploy more of this spectrum a full year sooner.”
For first-quarter 2022, Verizon reported EPS of $1.09, compared with $1.27 in first-quarter 2021. On an adjusted basis1, EPS, excluding special items, was $1.35 in first-quarter 2022, compared with adjusted EPS1 of $1.36 in first-quarter 20212.
Reported first-quarter earnings consisted of a pre-tax loss from special items of approximately $1.5 billion, including a pre-tax loss of approximately $1.2 billion from early debt redemption costs. Additionally, the impact to amortization of intangible assets related to TracFone and other acquisitions was $238 million.
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“At our Investor Day last month, we presented our strategy for investing in and growing the business to generate an incremental $14 billion of service and other revenue by 2025. The bottom-line performance of our results today shows the strength of our core business to deliver profitability, even during a period of significant investment," said Verizon Chief Financial Officer Matt Ellis. "We expect that over 75 percent of our growth over the next four years will come from 5G mobility and nationwide broadband. In the first-quarter, we saw growth in our wireless sales, customer loyalty, and rapid expansion of our fixed wireless product, fortifying our confidence in our growth prospects.”

Consolidated results
•Total consolidated operating revenues in first-quarter 2022 were $33.6 billion, up 2.1 percent from first-quarter 2021.
•Total wireless service revenue growth was 9.5 percent, reflecting the first full quarter of TracFone ownership, as well as continued execution of our Network as a Service strategy and contributions from our five vectors of growth.
•Service and other revenue was down 2.5 percent as the revenues lost from Verizon Media Group (Verizon Media) more than offset incremental revenue from TracFone. Excluding the impact of the sale of Verizon Media, service and other revenue was up 4.2 percent from first-quarter 2021.
•Cash flow from operating activities for the quarter totaled $6.8 billion compared with $9.7 billion in first-quarter 2021. The reduction was primarily due to working capital impacts as the increase in activation volumes to more normal levels impacted receivable levels, and inventory levels increased as part of supply chain management in the current environment.

•Capital spending for the first-quarter totaled $5.8 billion, an increase of $1.3 billion compared to first-quarter 2021 driven by C-Band spending of $1.5 billion. The continued build out of OneFiber and Verizon's investment to support traffic growth on its 4G LTE network while expanding the reach and capacity of its 5G Ultra Wideband network enhances its opportunity to effectively compete in all of its businesses. The net result of cash flow from operations and capital spending is free cash flow1 for the first-quarter of the year of $1.0 billion.

•Verizon's unsecured debt as of the end of first-quarter 2022 increased by $614 million sequentially to $137.3 billion. The company's net unsecured debt1 balance increased sequentially by $1.9 billion to $135.6 billion, and its net unsecured debt to adjusted EBITDA ratio1 at quarter-end was approximately 2.8 times, as it issued its fourth Green Bond, with the net proceeds expected to be allocated to renewable energy. In addition, the company completed a number of other transactions during the quarter the proceeds of which were used as consideration in an over $5 billion tender offer to retire some higher cost, long-term debt.
Verizon Consumer results
•Total Verizon Consumer revenue for the quarter grew 10.9 percent year over year, driven by the first full quarter of TracFone integration, higher equipment revenue, and strong core wireless service revenue growth. Total Verizon Consumer revenues were $25.3 billion.

•Wireless service revenue was up 11.2 percent year over year. In addition to the inclusion of TracFone, Postpaid ARPA increased 2.6 percent driven primarily by step-up momentum and
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growth within non-connectivity products and services. Verizon Consumer ended the quarter with 36 percent of its account base on a premium tier.

•Verizon Consumer wireless retail postpaid churn was 0.95 percent in first-quarter 2022, and wireless retail postpaid phone churn was 0.77 percent.

•While churn was steady, the competitive dynamics within the industry resulted in wireless retail postpaid phone net losses of 292,000, due to a decline in gross additions of 2 percent from prior year.

•Verizon Consumer had fixed wireless net additions of 112,000 for the quarter, with sales boosted by Verizon's launch of C-Band spectrum and "5G Ultra" campaign. Additionally, Fios internet net additions for the quarter were 55,000, driven by record-low churn levels with gross additions lower compared to first-quarter 2021. Verizon Consumer Fios revenues were $2.9 billion in first-quarter 2022, an increase of 1.8 percent year over year. Verizon Consumer reported 78,000 Fios Video net losses in first-quarter 2022.
•Prepaid ARPU in the quarter was $30.89 across all of Verizon Consumer's prepaid brands. This decline over first-quarter 2021 results was driven, in part, by pressure in the TracFone brands, though prepaid ARPU is expected to stabilize and subsequently grow sequentially as we execute our strategy to bring additional value to our customers.
•In first-quarter 2022, Verizon Consumer operating income was $7.3 billion, a decrease of 2.7 percent year over year, and segment operating income margin was 28.9 percent, a decrease from 33 percent in first-quarter 2021. Segment EBITDA1 for the quarter grew 1.0 percent, driven by the inclusion of TracFone results, as well as ARPA and customer volume gains, partially offset by the elevated marketing expenses related to the 5G Ultra campaign, investments in TracFone, and higher bad debt, driven in part by the additional sales volumes in the quarter. Segment EBITDA margin1 of 41.4 percent was impacted by significantly higher equipment revenue and the inclusion of TracFone.

Verizon Business results
•Total Verizon Business revenues were $7.7 billion in first-quarter 2022, down 0.9 percent year over year. Ongoing legacy wireline declines continue to offset Wireless revenue growth.
•Verizon Business wireless service revenues were $3.1 billion, an increase of 2.1 percent, driven by momentum in the SMB market, which continues to see strong post pandemic recovery.
•Verizon Business reported 395,000 wireless retail postpaid net additions in first-quarter 2022, including 256,000 phone net additions. This was the best quarterly phone net addition performance for Business since Verizon 2.0 reporting began.
•Verizon Business wireless retail postpaid churn was 1.34 percent in first-quarter 2022, and wireless retail postpaid phone churn was 1.06 percent.
•Verizon Business reported 82,000 Fixed Wireless net additions for the quarter, up substantially from the prior quarter. The flexibility, reliability and value of the product have generated an elevated demand and competitive wins within this space.
•In first-quarter 2022, Verizon Business operating income was $673 million, a decrease of 25.1 percent year over year, and segment operating income margin was 8.7 percent, a decrease from 11.6 percent in first-quarter 2021. Segment EBITDA1 was $1.7 billion for the quarter, a decrease of 9.3 percent, driven in part by the loss of high margin wireline revenue. Segment EBITDA margin1 was 22.5 percent, a decrease from 24.6 percent in first-quarter 2021.
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Outlook and guidance
For 2022, Verizon is updating its prior guidance for service and other revenue which is now expected to be approximately flat compared to 2021.
Additionally, Verizon expects the following results for full-year 2022:
•Reported wireless service revenue growth at the lower end of the previously guided range of 9 percent to 10 percent.
•Adjusted EBITDA1 growth at the lower end of the previously guided range of 2 percent to 3 percent.
•Adjusted EPS1 at the lower end of the previously guided range of $5.40 to $5.55.
•Adjusted effective income tax rate1 in the range of 23 percent to 25 percent.
•Capital spending, excluding C-Band, in the range of $16.5 billion to $17.5 billion. Additional expenditures related to the deployment of the company's C-Band 5G network are expected to be in the range of $5 billion to $6 billion.
In addition to announcing first-quarter results, today, the company published its 2021 ESG Report, outlining its approach to the company's ESG strategy and integration, and detailing the company's progress on important ESG issues, such as carbon emissions, energy efficiency, data protection and privacy, employee engagement and human rights.

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).

2Adjusted EPS for the prior year period has been reclassified to conform to current period presentation.

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 $133.6 billion in 2021. 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.

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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,” “hopes,” “forecasts,” “plans” or similar expressions. For those statements, we claim the protection of the safe harbor for forward-looking statements
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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; damage to our infrastructure or disruption of our operations from natural disasters, extreme weather conditions or terrorist attacks and any resulting financial or reputational impact; the impact of public health crises, including the COVID-19 pandemic, 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, the COVID-19 pandemic or the potential impacts of global climate change; 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, including inflation in the markets in which we operate; changes in the regulatory environment in which we operate, including any increase in restrictions on our ability to operate our networks or businesses; 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)
Unaudited3 Mos. Ended 3/31/223 Mos. Ended 3/31/21%
Change
Operating Revenues
Service revenues and other$27,218 $27,923 (2.5)
Wireless equipment revenues6,336 4,944 28.2
Total Operating Revenues33,554 32,867 2.1
Operating Expenses
Cost of services7,227 8,020 (9.9)
Cost of wireless equipment7,123 5,502 29.5
Selling, general and administrative expense7,172 7,401 (3.1)
Depreciation and amortization expense4,236 4,174 1.5
Total Operating Expenses25,758 25,097 2.6
Operating Income7,796 7,770 0.3
Equity in earnings (losses) of unconsolidated businesses(3)8 *
Other income (expense), net(924)401 *
Interest expense(786)(1,101)(28.6)
Income Before Provision For Income Taxes6,083 7,078 (14.1)
Provision for income taxes(1,372)(1,700)(19.3)
Net Income$4,711 $5,378 (12.4)
Net income attributable to noncontrolling interests$131 $133 (1.5)
Net income attributable to Verizon4,580 5,245 (12.7)
Net Income$4,711 $5,378 (12.4)
Basic Earnings Per Common Share
Net income attributable to Verizon$1.09 $1.27 (14.2)
Weighted-average shares outstanding (in millions)4,201 4,141 
Diluted Earnings Per Common Share (1)
Net income attributable to Verizon$1.09 $1.27 (14.2)
Weighted-average shares outstanding (in millions)4,202 4,142 
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)
Unaudited3/31/2212/31/21$ Change
Assets
Current assets
Cash and cash equivalents$1,661 $2,921 $(1,260)
Accounts receivable24,474 24,742 (268)
Less Allowance for credit losses859 896 (37)
Accounts receivable, net23,615 23,846 (231)
Inventories3,659 3,055 604 
Prepaid expenses and other6,645 6,906 (261)
Total current assets35,580 36,728 (1,148)
Property, plant and equipment292,568 289,897 2,671 
Less Accumulated depreciation192,725 190,201 2,524 
Property, plant and equipment, net99,843 99,696 147 
Investments in unconsolidated businesses1,074 1,061 13 
Wireless licenses148,083 147,619 464 
Goodwill28,629 28,603 26 
Other intangible assets, net11,432 11,677 (245)
Operating lease right-of-use assets27,494 27,883 (389)
Other assets13,581 13,329 252 
Total assets$365,716 $366,596 $(880)
Liabilities and Equity
Current liabilities
Debt maturing within one year$13,421 $7,443 $5,978 
Accounts payable and accrued liabilities18,169 24,833 (6,664)
Current operating lease liabilities3,847 3,859 (12)
Other current liabilities11,148 11,025 123 
Total current liabilities46,585 47,160 (575)
Long-term debt139,961 143,425 (3,464)
Employee benefit obligations15,104 15,410 (306)
Deferred income taxes41,341 40,685 656 
Non-current operating lease liabilities22,932 23,203 (271)
Other liabilities14,618 13,513 1,105 
Total long-term liabilities233,956 236,236 (2,280)
Equity
Common stock429 429 — 
Additional paid in capital13,874 13,861 13 
Retained earnings73,891 71,993 1,898 
Accumulated other comprehensive loss(906)(927)21 
Common stock in treasury, at cost(4,023)(4,104)81 
Deferred compensation – employee stock ownership plans and other497 538 (41)
Noncontrolling interests1,413 1,410 3 
Total equity85,175 83,200 1,975 
Total liabilities and equity$365,716 $366,596 $(880)







Verizon Communications Inc.


Consolidated - Selected Financial and Operating Statistics

(dollars in millions, except per share amounts)
Unaudited3/31/2212/31/21
Total debt$153,382 $150,868 
Net unsecured debt$135,619 $133,745 
Net unsecured debt / Consolidated Adjusted EBITDA(1)
2.8x2.8x
Common shares outstanding end of period (in millions)4,200 4,198 
Total employees (‘000)118.5 118.4 
Quarterly cash dividends declared per common share$0.6400 $0.6400 
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)
Unaudited3 Mos. Ended 3/31/223 Mos. Ended 3/31/21$ Change
Cash Flows from Operating Activities
Net Income$4,711 $5,378 $(667)
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization expense4,236 4,174 62 
Employee retirement benefits(210)(253)43 
Deferred income taxes627 762 (135)
Provision for expected credit losses328 224 104 
Equity in losses of unconsolidated businesses, net of dividends received7 19 (12)
Changes in current assets and liabilities, net of effects from acquisition/disposition of businesses
(3,492)(41)(3,451)
Other, net614 (569)1,183 
Net cash provided by operating activities6,821 9,694 (2,873)
Cash Flows from Investing Activities
Capital expenditures (including capitalized software)(5,821)(4,494)(1,327)
Acquisitions of businesses, net of cash acquired— (408)408 
Acquisitions of wireless licenses(1,838)(44,783)42,945 
Other, net(336)32 (368)
Net cash used in investing activities(7,995)(49,653)41,658 
Cash Flows from Financing Activities
Proceeds from long-term borrowings3,604 31,383 (27,779)
Proceeds from asset-backed long-term borrowings3,545 1,000 2,545 
Repayments of long-term borrowings and finance lease obligations(6,556)(302)(6,254)
Repayments of asset-backed long-term borrowings(1,650)(732)(918)
Dividends paid(2,654)(2,601)(53)
Other, net3,956 (792)4,748 
Net cash provided by financing activities245 27,956 (27,711)
Decrease in cash, cash equivalents and restricted cash(929)(12,003)11,074 
Cash, cash equivalents and restricted cash, beginning of period4,161 23,498 (19,337)
Cash, cash equivalents and restricted cash, end of period$3,232 $11,495 $(8,263)


Verizon Communications Inc.


Consumer - Selected Financial Results
(dollars in millions)
Unaudited3 Mos. Ended 3/31/223 Mos. Ended 3/31/21%
Change
Operating Revenues
Service$18,126 $16,569 9.4
Wireless equipment5,374 4,192 28.2
Other1,792 2,037 (12.0)
Total Operating Revenues25,292 22,798 10.9
Operating Expenses
Cost of services4,446 4,000 11.2
Cost of wireless equipment5,813 4,392 32.4
Selling, general and administrative expense4,552 4,026 13.1
Depreciation and amortization expense3,162 2,861 10.5
Total Operating Expenses17,973 15,279 17.6
Operating Income$7,319 $7,519 (2.7)
Operating Income Margin28.9 %33.0 %
Segment EBITDA$10,481 $10,380 1.0
Segment EBITDA Margin41.4 %45.5 %
Footnotes:
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.


Consumer - Selected Operating Statistics
Unaudited3/31/223/31/21% Change
Connections (‘000):
Wireless retail postpaid 91,414 90,172 1.4
Wireless retail prepaid (1)
23,772 4,058 *
Total wireless retail 115,186 94,230 22.2
Fios video 3,495 3,772 (7.3)
Fios internet6,596 6,300 4.7
Fixed wireless access (FWA) broadband216 26 *
Wireline broadband 6,925 6,713 3.2
Total broadband7,141 6,739 6.0
Unaudited3 Mos. Ended 3/31/223 Mos. Ended 3/31/21%
Change
Gross Additions (‘000):
Wireless retail postpaid 2,481 2,307 7.5
Net Additions Detail (‘000) :
Wireless retail postpaid (2)
(126)(326)61.3
Wireless retail prepaid (1) (2)
(80)19 *
Total wireless retail (2)
(206)(307)32.9
Wireless retail postpaid phones (2)
(292)(225)(29.8)
Fios video (78)(82)4.9
Fios internet55 98 (43.9)
FWA broadband (2)
112 12 *
Wireline broadband 37 66 (43.9)
Total broadband (2)
149 78 91.0
Churn Rate:
Wireless retail postpaid0.95 %0.97 %
Wireless retail postpaid phones0.77 %0.77 %
Wireless retail prepaid (1)
3.69 %4.22 %
Wireless retail1.51 %1.11 %
Revenue Statistics (in millions):
Wireless service revenue$15,217 $13,684 11.2
Fios revenues$2,911 $2,860 1.8

Verizon Communications Inc.


Consumer - Selected Operating Statistics (continued)
Unaudited3 Mos. Ended 3/31/223 Mos. Ended 3/31/21%
Change
Other Wireless Statistics:
Wireless retail postpaid ARPA (3)
$123.96 $120.86 2.6
Wireless retail postpaid upgrade rate
4.8 %4.5 %
Wireless retail postpaid accounts (‘000) (4)
33,514 33,588 (0.2)
Wireless retail postpaid connections per account (4)
2.73 2.68 1.9
Wireless retail prepaid ARPU (1) (5)
$30.89 $35.66 (13.4)
Total wireless internet postpaid base (4)
16.6 %16.0 %
Footnotes:
(1) Acquisition of TracFone Wireless, Inc. was completed on November 23, 2021.
(2) Connection net additions include certain adjustments.
(3) Wireless retail postpaid ARPA - average service revenue per account from retail postpaid accounts.
(4) Statistics presented as of end of period.
(5) Wireless retail prepaid ARPU - average service revenue per unit from retail prepaid connections.
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 3/31/223 Mos. Ended 3/31/21%
Change
Operating Revenues
Small and Medium Business$3,041 $2,830 7.5
Global Enterprise2,461 2,559 (3.8)
Public Sector and Other1,552 1,646 (5.7)
Wholesale655 746 (12.2)
Total Operating Revenues7,709 7,781 (0.9)
Operating Expenses
Cost of services2,606 2,690 (3.1)
Cost of wireless equipment1,310 1,111 17.9
Selling, general and administrative expense2,059 2,068 (0.4)
Depreciation and amortization expense1,061 1,013 4.7
Total Operating Expenses7,036 6,882 2.2
Operating Income$673 $899 (25.1)
Operating Income Margin8.7 %11.6 %
Segment EBITDA$1,734 $1,912 (9.3)
Segment EBITDA Margin22.5 %24.6 %
Footnotes:
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
Unaudited3/31/20223/31/2021%
Change
Connections (‘000):
Wireless retail postpaid 27,809 26,621 4.5
Fios video 71 73 (2.7)
Fios internet 361 339 6.5
Fixed wireless access (FWA) broadband217 32 *
Wireline broadband 475 480 (1.0)
Total broadband692 512 35.2
Unaudited3 Mos. Ended 3/31/223 Mos. Ended 3/31/21%
Change
Gross Additions (‘000):
Wireless retail postpaid1,502 1,141 31.6
Net Additions Detail (‘000):
Wireless retail postpaid (1)
395 156 *
Wireless retail postpaid phones (1)
256 47 *
Fios video— — *
Fios internet5 4 25.0
FWA broadband (1)
82 5 *
Wireline broadband (1)
(2)(2)—
Total broadband (1)
80 3 *
Churn Rate:
Wireless retail postpaid1.34 %1.24 %
Wireless retail postpaid phones1.06 %1.01 %
Revenue Statistics (in millions):
Wireless service revenue$3,125 $3,060 2.1
Fios revenues$295 $276 6.9
Other Operating Statistics:
Wireless retail postpaid upgrade rate3.4 %3.3 %
Total wireless internet postpaid base (2)
34.6 %34.6 %
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.
*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.
Unaudited3/31/223/31/21% Change
Connections (‘000)
Retail postpaid119,223 116,793 2.1
Retail prepaid (1)
23,772 4,058 *
Total retail142,995 120,851 18.3
Unaudited3 Mos. Ended 3/31/223 Mos. Ended 3/31/21%
Change
Net Additions Detail (‘000) (2)
Retail postpaid phone(36)(178)79.8
Retail postpaid269 (170)*
Retail prepaid (1)
(80)19 *
Total retail189 (151)*
Account Statistics
Retail postpaid accounts (‘000) (3)
35,224 35,184 0.1
Retail postpaid connections per account (3)
3.38 3.32 1.8
Retail postpaid ARPA (4)
$144.87 $141.74 2.2
Retail prepaid ARPU (1) (5)
$30.89 $35.66 (13.4)
Churn Detail
Retail postpaid phone0.83 %0.81 %
Retail postpaid1.04 %1.03 %
Retail prepaid (1)
3.69 %4.22 %
Retail1.48 %1.14 %
Retail Postpaid Connection Statistics
Total internet postpaid base (3)
20.8 %20.2 %
Upgrade rate4.5 %4.3 %
Revenue Statistics (in millions) (6)
Wireless service$18,342 $16,744 9.5
Wireless equipment6,336 4,944 28.2
Wireless other1,818 2,043 (11.0)
Total Wireless$26,496 $23,731 11.7
Footnotes:
(1) Acquisition of TracFone Wireless, Inc. was completed on November 23, 2021.
(2) Connection net additions include certain adjustments.
(3) Statistics presented as of end of period.
(4) Wireless retail postpaid ARPA - average service revenue per account from retail postpaid accounts.
(5) Wireless retail prepaid ARPU - average service revenue per unit from retail prepaid connections.
(6) Intersegment transactions between Consumer or Business segment with corporate entities have not been eliminated.

Verizon Communications Inc.


Non-GAAP Reconciliations - Consolidated Verizon
Consolidated EBITDA and Consolidated Adjusted EBITDA
(dollars in millions)
Unaudited3 Mos. Ended 3/31/223 Mos. Ended 12/31/213 Mos. Ended 9/30/213 Mos. Ended 6/30/213 Mos. Ended 3/31/21
Consolidated Net Income$4,711 $4,737 $6,554 $5,949 $5,378 
  Add:
Provision for income taxes1,372 1,407 1,820 1,875 1,700 
Interest expense786 739 801 844 1,101 
Depreciation and amortization expense (1)
4,236 4,051 3,961 4,020 4,174 
Consolidated EBITDA$11,105 $10,934 $13,136 $12,688 $12,353 
  Add/(subtract):
Other (income) expense, net (2)
$924 $860 $(269)$(502)$(401)
Equity in losses (earnings) of unconsolidated businesses (3)
3 (135)(1)(1)(8)
Severance charges— 106 103 — — 
Loss on spectrum licenses— — — — 223 
Net gain from disposition of business— — (706)— — 
927 831 (873)(503)(186)
Consolidated Adjusted EBITDA$12,032 $11,765 $12,263 $12,185 $12,167 
Consolidated Adjusted EBITDA - Year Over Year Change(1.1)%
Footnotes:
(1)    Includes Amortization of acquisition-related intangible assets.
(2)    Includes Pension and benefits mark-to-market adjustments and Early debt redemption costs, where applicable.
(3)    Includes Net gain from disposition of assets, where applicable.    
    
Net Unsecured Debt and Net Unsecured Debt to Consolidated Adjusted EBITDA Ratio
(dollars in millions)
Unaudited3/31/2212/31/21
Debt maturing within one year$13,421 $7,443 
Long-term debt139,961 143,425 
Total Debt153,382 150,868 
Less Secured debt16,102 14,202 
Unsecured Debt137,280 136,666 
Less Cash and cash equivalents1,661 2,921 
Net Unsecured Debt
$135,619 $133,745 
Net Unsecured Debt to Consolidated Adjusted EBITDA Ratio2.8x2.8x
Unsecured Debt - Quarter over quarter change$614 
Net Unsecured Debt - Quarter over quarter change$1,874 


Verizon Communications Inc.


Adjusted Earnings per Common Share (Adjusted EPS)
(dollars in millions, except per share amounts)
Unaudited3 Mos. Ended 3/31/223 Mos. Ended 3/31/21
Pre-taxTaxAfter-Tax Pre-taxTaxAfter-Tax 
EPS$1.09 $1.27 
Amortization of acquisition-related intangible assets$238 $(60)$178 0.04 $276 $(67)$209 0.05 
Early debt redemption costs1,241 (316)925 0.22 — — — — 
Loss on spectrum licenses— — — — 223 (56)167 0.04 
$1,479 $(376)$1,103 $0.26 $499 $(123)$376 $0.09 
Adjusted EPS$1.35 $1.36 
Footnotes:
Adjusted EPS may not add due to rounding.
Certain amounts have been reclassified to conform to the current period presentation.


Free Cash Flow
(dollars in millions)
Unaudited3 Mos. Ended 3/31/223 Mos. Ended 3/31/21
Net Cash Provided by Operating Activities$6,821 $9,694 
Capital expenditures (including capitalized software)(5,821)(4,494)
Free Cash Flow$1,000 $5,200 

Verizon Communications Inc.
Non-GAAP Reconciliations - Segments
Segment EBITDA and Segment EBITDA Margin
Consumer
(dollars in millions)
Unaudited3 Mos. Ended 3/31/223 Mos. Ended 3/31/21
Operating Income$7,319 $7,519 
Add Depreciation and amortization expense3,162 2,861 
Segment EBITDA$10,481 $10,380 
Year over year change %1.0 %
Total operating revenues$25,292 $22,798 
Operating Income Margin28.9 %33.0 %
Segment EBITDA Margin41.4 %45.5 %
Business
(dollars in millions)
Unaudited3 Mos. Ended 3/31/223 Mos. Ended 3/31/21
Operating Income$673 $899 
Add Depreciation and amortization expense1,061 1,013 
Segment EBITDA$1,734 $1,912 
Year over year change %(9.3)%
Total operating revenues$7,709 $7,781 
Operating Income Margin8.7 %11.6 %
Segment EBITDA Margin22.5 %24.6 %