EX-99 2 a2022q3exhibit99.htm EX-99 Document

Exhibit 99
vzlogoa58a.jpg

News Release

FOR IMMEDIATE RELEASE
Media contacts:
October 21, 2022Kim Ancin
908-559-3227
kimberly.ancin@verizon.com
Eric Wilkens
201-572-9317
eric.wilkens@verizon.com


Verizon reports 3Q results marked by revenue growth momentum

Sequential improvement in Verizon Consumer
postpaid phone gross additions

Fifth consecutive quarter that Verizon Business reported more than 150,000 postpaid phone net additions

3Q 2022 highlights

Consolidated:
•$1.17 in earnings per share (EPS), compared with $1.55 in third-quarter 2021; adjusted EPS1, excluding special items, of $1.32, compared with $1.42 in third-quarter 20212.
•Total revenue of $34.2 billion, an increase of 4.0 percent from third-quarter 2021.
•Net income of $5.0 billion, a decrease of 23.3 percent from third-quarter 2021, and adjusted EBITDA1 of $12.2 billion, down 0.4 percent year over year.

Total Wireless:
•Total wireless service revenue of $18.8 billion, a 10.0 percent increase year over year.
•Total retail postpaid churn of 1.17 percent, and retail postpaid phone churn of 0.92 percent.
•Postpaid phone net additions of 8,000.

Total Broadband:
•Total broadband net additions of 377,000, including 342,000 fixed wireless net additions, reflecting a strong demand for reliable and high-value broadband offerings. Total broadband net additions increased 109,000 from second-quarter 2022, and fixed wireless net additions increased 86,000 from second-quarter 2022.
•More than 40 million households covered by fixed wireless in third-quarter 2022, including over 30 million households covered by 5G Ultra Wideband.
•61,000 Fios Internet net additions, an increase from 36,000 Fios Internet net additions in second-quarter 2022.



NEW YORK - Verizon Communications Inc. (NYSE, Nasdaq: VZ) today reported its third-quarter 2022 results.
"We took a number of actions in the third quarter that helped drive improved operational and financial performance, but we know there's still more work to be done," said Verizon Chairman and CEO Hans Vestberg. "The pricing actions we took earlier this year, as well as our new cost savings program, show that we are being deliberate and strategic in our decisions to strengthen our business. At the same time, we are focused on executing our 5G strategy, as we are covering every major market and accelerating our C-Band network build. We are on track to reach 200 million POPs within first-quarter 2023."
For third-quarter 2022, Verizon reported EPS of $1.17, compared with $1.55 in third-quarter 2021. On an adjusted basis1, excluding special items, EPS was $1.32 in third-quarter 2022, compared with adjusted EPS1 of $1.42 in third-quarter 20212.
Third-quarter 2022 EPS included a pre-tax loss from special items of approximately $881 million. This included a net pre-tax charge of approximately $645 million primarily related to a mark-to-market adjustment for pension liabilities, and the impacts of amortization of intangible assets related to TracFone and other acquisitions of $236 million.
"The actions we have taken in the previous two quarters are gaining traction in the marketplace," said Verizon Chief Financial Officer Matt Ellis. “We expect that we will be able to build on this momentum into the future. Our financial discipline, combined with our healthy balance sheet, enabled us to increase our dividend for a 16th consecutive year, which is the longest current streak of dividend increases in the U.S. telecom industry."
Consolidated results
•Total consolidated operating revenue in third-quarter 2022 of $34.2 billion, up 4.0 percent from third-quarter 2021. Wireless service revenue growth and higher wireless equipment revenue more than offset wireline declines and the net impact of merger and acquisition (M&A) activity in 2021.
•Total wireless service revenue growth of 10.0 percent year over year, primarily driven by the company's ownership of TracFone, continued effectiveness in its premium Unlimited strategy and ongoing strength in Business volumes.
•Verizon is focused on continuously improving operating efficiencies and mitigating inflation impacts, and has started a new cost savings program that is expected to provide a reduction in annual costs of between $2 billion and $3 billion by 2025.
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•Net income of $5.0 billion, a decrease of 23.3 percent from third-quarter 2021, and adjusted EBITDA1 of $12.2 billion, a decline of 0.4 percent year over year.
•Year-to-date cash flow from operating activities totaled $28.2 billion, compared with $31.2 billion in 2021. The reduction was primarily due to working capital impacts from higher device activations, and increased inventory levels.

•Capital expenditures year-to-date were $15.8 billion, including C-Band spending of $4.5 billion.

•Free cash flow1 year to date was $12.4 billion.
•Verizon's unsecured debt as of the end of third-quarter 2022 decreased by $1.1 billion sequentially to $131.4 billion. The company's net unsecured debt1 balance decreased sequentially by $1.3 billion to $129.3 billion, and its net unsecured debt to adjusted EBITDA ratio1 at quarter-end was approximately 2.7 times.
Verizon Consumer results
•Total Verizon Consumer revenue was $25.8 billion, an increase of 10.8 percent year over year, driven by wireless service revenue growth and higher equipment revenue.

•Wireless service revenue increased 11.0 percent year over year, driven by the inclusion of TracFone, core wireless service revenue growth and the impact of pricing actions.

•Consumer wireless retail postpaid churn was 1.10 percent in third-quarter 2022, and wireless retail postpaid phone churn was 0.88 percent.

•In third-quarter 2022, Consumer reported 189,000 wireless retail postpaid phone net losses, due to elevated churn partially as a result of recent pricing actions. Consumer ended third-quarter 2022 with nearly 53 percent of its postpaid wireless phone customers having 5G-capable devices. Consumer postpaid phone gross additions increased 1.3 percent year over year. This is a significant improvement from second-quarter 2022, when Consumer postpaid phone gross additions declined 11.3 percent year over year.
•Consumer reported 39,000 wireless retail prepaid net additions in third-quarter 2022, as TracFone reported positive net additions for the first time since first-quarter 2021.3
•Consumer reported 234,000 fixed wireless net additions and 58,000 Fios Internet net additions in third-quarter 2022. Consumer Fios revenue was $2.9 billion in third-quarter 2022, an increase of 0.3 percent year over year.
•In third-quarter 2022, Consumer operating income was $7.3 billion, a decrease of 3.2 percent year over year, and segment operating income margin was 28.4 percent, a decrease from 32.5 percent in third-quarter 2021. Segment EBITDA1 in third-quarter 2022 was $10.6 billion, an increase of 0.7 percent year over year. The pricing actions and the inclusion of TracFone results more than offset pressures from higher promotional activity and the impact of inflation. Segment EBITDA margin1 was 40.9 percent, a decrease from 45.0 percent in third-quarter 2021.

Verizon Business results
•Total Verizon Business revenue was $7.8 billion in third-quarter 2022, an increase of 1.9 percent year over year.
•Business wireless service revenue was $3.3 billion, an increase of 5.7 percent year over year. This increase was the result of pricing actions and continued growth in Business' customer base.
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•Business reported 360,000 wireless retail postpaid net additions in third-quarter 2022, including 197,000 postpaid phone net additions. This was the fifth consecutive quarter that Business reported more than 150,000 postpaid phone net additions. Global Enterprise delivered its best ever phone net addition performance, and Small and Medium Business and Public Sector both reported year over year double digit phone gross addition growth.
•Business wireless retail postpaid churn was 1.42 percent in third-quarter 2022, and wireless retail postpaid phone churn was 1.10 percent.
•Business reported 108,000 fixed wireless net additions in third-quarter 2022.
•In third-quarter 2022, Verizon Business operating income was $698 million, a decrease of 21.2 percent year over year, and segment operating income margin was 8.9 percent, a decrease from 11.5 percent in third-quarter 2021. Segment EBITDA1 was $1.8 billion in third-quarter 2022, a decrease of 6.7 percent year over year. In addition to pressure from wireline, Business experienced higher growth-related costs as wireless sales volumes increased 15 percent year over year. Segment EBITDA margin1 was 22.7 percent, a decrease from 24.8 percent in third-quarter 2021.
Outlook and guidance
Verizon continues to expect the following results for full-year 2022:
•Reported wireless service revenue growth4 of 8.5 to 9.5 percent.
•Reported service and other revenue growth of minus 1 percent to flat.
•Adjusted EBITDA1 growth of minus 1.5 percent to flat.
•Adjusted EPS1 of $5.10 to $5.25.
•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.
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.

3Wireless retail prepaid net additions exclude the impact primarily related to the shutdown of a competitor’s 3G network resulting in approximately 102,000 retail prepaid disconnects in the third quarter of 2022.

4Reported wireless service revenue growth 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 $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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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 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 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 9/30/223 Mos. Ended 9/30/21%
Change		9 Mos. Ended 9/30/229 Mos. Ended 9/30/21%
Change
Operating Revenues
Service revenues and other$27,666 $27,565 0.4$81,999 $83,709 (2.0)
Wireless equipment revenues6,575 5,350 22.919,585 15,837 23.7
Total Operating Revenues34,241 32,915 4.0101,584 99,546 2.0
Operating Expenses
Cost of services7,293 7,855 (7.2)21,452 24,199 (11.4)
Cost of wireless equipment7,308 5,673 28.821,919 17,106 28.1
Selling, general and administrative expense7,422 6,521 13.822,090 21,246 4.0
Depreciation and amortization expense4,324 3,961 9.212,881 12,155 6.0
Total Operating Expenses26,347 24,010 9.778,342 74,706 4.9
Operating Income7,894 8,905 (11.4)23,242 24,840 (6.4)
Equity in earnings of unconsolidated businesses2 1 *40 10 *
Other income (expense), net(439)269 *(1,314)1,172 *
Interest expense(937)(801)17.0(2,508)(2,746)(8.7)
Income Before Provision For Income Taxes6,520 8,374 (22.1)19,460 23,276 (16.4)
Provision for income taxes(1,496)(1,820)(17.8)(4,410)(5,395)(18.3)
Net Income$5,024 $6,554 (23.3)$15,050 $17,881 (15.8)
Net income attributable to noncontrolling interests$124 $147 (15.6)$371 $429 (13.5)
Net income attributable to Verizon4,900 6,407 (23.5)14,679 17,452 (15.9)
Net Income$5,024 $6,554 (23.3)$15,050 $17,881 (15.8)
Basic Earnings Per Common Share
Net income attributable to Verizon$1.17 $1.55 (24.5)$3.49 $4.21 (17.1)
Weighted-average shares outstanding (in millions)4,202 4,142 4,201 4,141 
Diluted Earnings Per Common Share (1)
Net income attributable to Verizon$1.17 $1.55 (24.5)$3.49 $4.21 (17.1)
Weighted-average shares outstanding (in millions)4,204 4,144 4,203 4,143 
Footnotes:
(1)Diluted Earnings per Common Share includes the dilutive effect of shares issuable under our stock-based compensation plans, which represents the only potential dilution.
*Not meaningful

Verizon Communications Inc.


Condensed Consolidated Balance Sheets

(dollars in millions)
Unaudited9/30/2212/31/21$ Change
Assets
Current assets
Cash and cash equivalents$2,082 $2,921 $(839)
Accounts receivable24,475 24,742 (267)
Less Allowance for credit losses805 896 (91)
Accounts receivable, net23,670 23,846 (176)
Inventories3,133 3,055 78 
Prepaid expenses and other10,861 6,906 3,955 
Total current assets39,746 36,728 3,018 
Property, plant and equipment300,870 289,897 10,973 
Less Accumulated depreciation197,866 190,201 7,665 
Property, plant and equipment, net103,004 99,696 3,308 
Investments in unconsolidated businesses1,083 1,061 22 
Wireless licenses149,292 147,619 1,673 
Goodwill28,548 28,603 (55)
Other intangible assets, net11,196 11,677 (481)
Operating lease right-of-use assets26,588 27,883 (1,295)
Other assets15,633 13,329 2,304 
Total assets$375,090 $366,596 $8,494 
Liabilities and Equity
Current liabilities
Debt maturing within one year$14,995 $7,443 $7,552 
Accounts payable and accrued liabilities22,235 24,833 (2,598)
Current operating lease liabilities3,961 3,859 102 
Other current liabilities11,950 11,025 925 
Total current liabilities53,141 47,160 5,981 
Long-term debt132,912 143,425 (10,513)
Employee benefit obligations15,912 15,410 502 
Deferred income taxes42,094 40,685 1,409 
Non-current operating lease liabilities22,175 23,203 (1,028)
Other liabilities20,073 13,513 6,560 
Total long-term liabilities233,166 236,236 (3,070)
Equity
Common stock429 429 — 
Additional paid in capital13,467 13,861 (394)
Retained earnings78,545 71,993 6,552 
Accumulated other comprehensive loss(1,700)(927)(773)
Common stock in treasury, at cost(4,015)(4,104)89 
Deferred compensation – employee stock ownership plans and other742 538 204 
Noncontrolling interests1,315 1,410 (95)
Total equity88,783 83,200 5,583 
Total liabilities and equity$375,090 $366,596 $8,494 







Verizon Communications Inc.


Consolidated - Selected Financial and Operating Statistics

(dollars in millions, except per share amounts)
Unaudited9/30/2212/31/21
Total debt$147,907 $150,868 
Net unsecured debt(1)
$129,315 $133,745 
Net unsecured debt / Consolidated Adjusted EBITDA(1)(2)
2.7x2.8x
Common shares outstanding end of period (in millions)4,200 4,198 
Total employees (‘000)119.5 118.4 
Quarterly cash dividends declared per common share$0.6525 $0.6400 
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)
Unaudited9 Mos. Ended 9/30/229 Mos. Ended 9/30/21$ Change
Cash Flows from Operating Activities
Net Income$15,050 $17,881 $(2,831)
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization expense12,881 12,155 726 
Employee retirement benefits479 (1,928)2,407 
Deferred income taxes1,595 2,970 (1,375)
Provision for expected credit losses1,048 604 444 
Equity in losses (earnings) of unconsolidated businesses, net of dividends received(13)32 (45)
Changes in current assets and liabilities, net of effects from acquisition/disposition of businesses
(458)603 (1,061)
Other, net(2,383)(1,155)(1,228)
Net cash provided by operating activities28,199 31,162 (2,963)
Cash Flows from Investing Activities
Capital expenditures (including capitalized software)(15,811)(13,861)(1,950)
Cash received (paid) related to acquisitions of businesses, net of cash acquired248 (459)707 
Acquisitions of wireless licenses(2,890)(47,027)44,137 
Collateral payments related to derivative contracts, net of repayments(4,857)(15)(4,842)
Proceeds from disposition of business33 4,122 (4,089)
Other, net(43)222 (265)
Net cash used in investing activities(23,320)(57,018)33,698 
Cash Flows from Financing Activities
Proceeds from long-term borrowings4,605 32,482 (27,877)
Proceeds from asset-backed long-term borrowings5,939 2,695 3,244 
Net proceeds from short-term commercial paper4,514 — 4,514 
Repayments of long-term borrowings and finance lease obligations(8,001)(7,904)(97)
Repayments of asset-backed long-term borrowings(3,647)(3,887)240 
Dividends paid(8,066)(7,797)(269)
Other, net(797)(2,120)1,323 
Net cash provided by (used in) financing activities(5,453)13,469 (18,922)
Decrease in cash, cash equivalents and restricted cash(574)(12,387)11,813 
Cash, cash equivalents and restricted cash, beginning of period4,161 23,498 (19,337)
Cash, cash equivalents and restricted cash, end of period$3,587 $11,111 $(7,524)
Footnotes:
Certain amounts have been reclassified to conform to the current period presentation.

Verizon Communications Inc.


Consumer - Selected Financial Results
(dollars in millions)
Unaudited3 Mos. Ended 9/30/223 Mos. Ended 9/30/21%
Change		9 Mos. Ended 9/30/229 Mos. Ended 9/30/21%
Change
Operating Revenues
Service$18,421 $16,891 9.1$54,696 $50,169 9.0
Wireless equipment5,558 4,530 22.716,640 13,461 23.6
Other1,861 1,907 (2.4)5,400 5,973 (9.6)
Total Operating Revenues25,840 23,328 10.876,736 69,603 10.2
Operating Expenses
Cost of services4,566 4,149 10.113,296 12,330 7.8
Cost of wireless equipment5,963 4,611 29.317,997 13,857 29.9
Selling, general and administrative expense4,730 4,060 16.514,020 12,131 15.6
Depreciation and amortization expense3,232 2,918 10.89,605 8,679 10.7
Total Operating Expenses18,491 15,738 17.554,918 46,997 16.9
Operating Income$7,349 $7,590 (3.2)$21,818 $22,606 (3.5)
Operating Income Margin28.4 %32.5 %28.4 %32.5 %
Segment EBITDA(1)
$10,581 $10,508 0.7$31,423 $31,285 0.4
Segment EBITDA Margin(1)
40.9 %45.0 %40.9 %44.9 %
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.
 

Verizon Communications Inc.


Consumer - Selected Operating Statistics
Unaudited9/30/229/30/21% Change
Connections (‘000):
Wireless retail postpaid 91,478 90,916 0.6
Wireless retail prepaid (1) (2)
23,076 4,072 *
Total wireless retail 114,554 94,988 20.6
Wireless retail postpaid phones74,997 75,388 (0.5)
Fios video 3,314 3,642 (9.0)
Fios internet6,684 6,490 3.0
Fixed wireless access (FWA) broadband621 63 *
Wireline broadband 6,976 6,858 1.7
Total broadband7,597 6,921 9.8
Unaudited3 Mos. Ended 9/30/223 Mos. Ended 9/30/21%
Change		9 Mos. Ended 9/30/229 Mos. Ended 9/30/21%
Change
Gross Additions (‘000):
Wireless retail postpaid 3,045 2,701 12.78,148 7,600 7.2
Net Additions Detail (‘000):
Wireless retail postpaid (3)
28 423 (93.4)(14)447 *
Wireless retail prepaid (1) (3) (4)
39 (4)*(270)33 *
Total wireless retail (3)
67 419 (84.0)(284)480 *
Wireless retail postpaid phones (3)
(189)267 *(696)239 *
Fios video (95)(68)(39.7)(259)(212)(22.2)
Fios internet58 98 (40.8)143 288 (50.3)
FWA broadband (3)
234 26 *514 49 *
Wireline broadband 38 75 (49.3)88 211 (58.3)
Total broadband 272 101 *602 260 *
Churn Rate:
Wireless retail postpaid1.10 %0.84 %0.99 %0.88 %
Wireless retail postpaid phones0.88 %0.67 %0.80 %0.69 %
Wireless retail prepaid (1) (4)
3.90 %4.21 %3.83 %4.18 %
Wireless retail1.66 %0.98 %1.57 %1.02 %
Revenue Statistics (in millions):
Wireless service revenue$15,517 $13,982 11.0$45,970 $41,460 10.9
Fios revenues$2,902 $2,893 0.3$8,708 $8,648 0.7

Verizon Communications Inc.


Consumer - Selected Operating Statistics (continued)
Unaudited3 Mos. Ended 9/30/223 Mos. Ended 9/30/21%
Change		9 Mos. Ended 9/30/229 Mos. Ended 9/30/21%
Change
Other Wireless Statistics:
Wireless retail postpaid ARPA (5)
$127.76 $123.04 3.8$125.29 $121.71 2.9
Wireless retail postpaid upgrade rate
5.1 %4.7 %
Wireless retail postpaid accounts (‘000) (6)
33,251 33,640 (1.2)
Wireless retail postpaid connections per account (6)
2.75 2.70 1.9
Wireless retail prepaid ARPU (1) (7)
$31.18 $35.75 (12.8)$31.11 $35.70 (12.9)
Footnotes:
(1) Acquisition of TracFone Wireless, Inc. was completed on November 23, 2021.
(2) Reflects a decline in the customer base for wireless retail prepaid connections of approximately 504,000 as of September 30, 2022, primarily related to the shutdown of our competitors' 3G networks.
(3) Connection net additions include certain adjustments.
(4) Excludes the impact primarily related to the shutdown of our competitors' 3G networks resulting in approximately 402,000 retail prepaid disconnects in the second quarter of 2022 and 102,000 retail prepaid disconnects in the third quarter of 2022.
(5) Wireless retail postpaid ARPA - average service revenue per account from retail postpaid accounts.
(6) Statistics presented as of end of period.
(7) 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 9/30/223 Mos. Ended 9/30/21%
Change		9 Mos. Ended 9/30/229 Mos. Ended 9/30/21%
Change
Operating Revenues
Small and Medium Business$3,196 $2,937 8.8$9,329 $8,662 7.7
Global Enterprise2,449 2,552 (4.0)7,311 7,694 (5.0)
Public Sector and Other1,531 1,547 (1.0)4,587 4,807 (4.6)
Wholesale661 653 1.21,945 2,069 (6.0)
Total Operating Revenues7,837 7,689 1.923,172 23,232 (0.3)
Operating Expenses
Cost of services2,653 2,647 0.27,818 8,066 (3.1)
Cost of wireless equipment1,344 1,061 26.73,922 3,248 20.8
Selling, general and administrative expense2,063 2,077 (0.7)6,172 6,231 (0.9)
Depreciation and amortization expense1,079 1,018 6.03,214 3,046 5.5
Total Operating Expenses7,139 6,803 4.921,126 20,591 2.6
Operating Income$698 $886 (21.2)$2,046 $2,641 (22.5)
Operating Income Margin8.9 %11.5 %8.8 %11.4 %
Segment EBITDA(1)
$1,777 $1,904 (6.7)$5,260 $5,687 (7.5)
Segment EBITDA Margin(1)
22.7 %24.8 %22.7 %24.5 %
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.

Verizon Communications Inc.


Business - Selected Operating Statistics
Unaudited9/30/229/30/21%
Change
Connections (‘000):
Wireless retail postpaid 28,584 26,998 5.9
Wireless retail postpaid phones17,795 16,866 5.5
Fios video 69 72 (4.2)
Fios internet 370 352 5.1
FWA broadband442 76 *
Wireline broadband 471 479 (1.7)
Total broadband913 555 64.5
Unaudited3 Mos. Ended 9/30/223 Mos. Ended 9/30/21%
Change		9 Mos. Ended 9/30/229 Mos. Ended 9/30/21%
Change
Gross Additions (‘000):
Wireless retail postpaid1,566 1,314 19.24,650 3,675 26.5
Net Additions Detail (‘000):
Wireless retail postpaid (1)
360 276 30.41,185 610 94.3
Wireless retail postpaid phones (1)
197 162 21.6680 287 *
Fios video(1)— *(2)(1)*
Fios internet3 6 (50.0)14 17 (17.6)
FWA broadband (1)
108 29 *278 46 *
Wireline broadband (1)
(3)(1)*(6)(3)*
Total broadband 105 28 *272 43 *
Churn Rate:
Wireless retail postpaid1.42 %1.29 %1.38 %1.28 %
Wireless retail postpaid phones1.10 %1.04 %1.08 %1.04 %
Revenue Statistics (in millions):
Wireless service revenue$3,273 $3,097 5.7$9,580 $9,247 3.6
Fios revenues$304 $287 5.9$897 $844 6.3
Other Operating Statistics:
Wireless retail postpaid upgrade rate3.3 %3.2 %
Footnotes:
(1) Connection net additions include certain adjustments.
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.
Unaudited9/30/229/30/21% Change
Connections (‘000)
Retail postpaid120,062 117,914 1.8
Retail prepaid (1) (2)
23,076 4,072 *
Total retail143,138 121,986 17.3
Retail postpaid phones92,792 92,254 0.6
Unaudited3 Mos. Ended 9/30/223 Mos. Ended 9/30/21%
Change		9 Mos. Ended 9/30/229 Mos. Ended 9/30/21%
Change
Net Additions Detail (‘000) (3)
Retail postpaid phones8 429 (98.1)(16)526 *
Retail postpaid388 699 (44.5)1,171 1,057 10.8
Retail prepaid (1) (4)
39 (4)*(270)33 *
Total retail427 695 (38.6)901 1,090 (17.3)
Account Statistics
Retail postpaid accounts (‘000) (5)
35,034 35,285 (0.7)
Retail postpaid connections per account (5)
3.43 3.34 2.7
Retail postpaid ARPA (6)
$149.82 $143.87 4.1$146.73 $142.61 2.9
Retail prepaid ARPU (1) (7)
$31.18 $35.75 (12.8)$31.11 $35.70 (12.9)
Churn Detail
Retail postpaid phone0.92 %0.74 %0.85 %0.76 %
Retail postpaid1.17 %0.94 %1.08 %0.97 %
Retail prepaid (1) (4)
3.90 %4.21 %3.83 %4.18 %
Retail1.62 %1.05 %1.53 %1.08 %
Retail Postpaid Connection Statistics
Upgrade rate4.7 %4.3 %
Revenue Statistics (in millions) (8)
Wireless service$18,790 $17,079 10.0$55,550 $50,707 9.6
Wireless equipment6,575 5,350 22.919,585 15,837 23.7
Wireless other1,922 1,929 (0.4)5,540 6,015 (7.9)
Total Wireless$27,287 $24,358 12.0$80,675 $72,559 11.2
Footnotes:
(1) Acquisition of TracFone Wireless, Inc. was completed on November 23, 2021.
(2) Reflects a decline in the customer base for wireless retail prepaid connections of approximately 504,000 as of September 30, 2022, primarily related to the shutdown of our competitors' 3G networks.
(3) Connection net additions include certain adjustments.
(4) Excludes the impact primarily related to the shutdown of our competitors' 3G networks resulting in approximately 402,000 retail prepaid disconnects in the second quarter of 2022 and 102,000 retail prepaid disconnects in the third quarter of 2022.
(5) Statistics presented as of end of period.
(6) Wireless retail postpaid ARPA - average service revenue per account from retail postpaid accounts.
(7) Wireless retail prepaid ARPU - average service revenue per unit from retail prepaid connections.
(8) Intersegment transactions between Consumer or Business segment with corporate entities have not been eliminated.
*Not meaningful

Verizon Communications Inc.


Non-GAAP Reconciliations - Consolidated Verizon
Consolidated EBITDA and Consolidated Adjusted EBITDA
(dollars in millions)
Unaudited3 Mos. Ended 9/30/223 Mos. Ended 6/30/223 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$5,024 $5,315 $4,711 $4,737 $6,554 $5,949 $5,378 
  Add:
Provision for income taxes1,496 1,542 1,372 1,407 1,820 1,875 1,700 
Interest expense937 785 786 739 801 844 1,101 
Depreciation and amortization expense (1)
4,324 4,321 4,236 4,051 3,961 4,020 4,174 
Consolidated EBITDA$11,781 $11,963 $11,105 $10,934 $13,136 $12,688 $12,353 
  Add/(subtract):
Other (income) expense, net (2)
$439 $(49)$924 $860 $(269)$(502)$(401)
Equity in losses (earnings) of unconsolidated businesses (3)
(2)(41)3 (135)(1)(1)(8)
Severance charges— — — 106 103 — — 
Loss on spectrum licenses— — — — — — 223 
Net gain from disposition of business— — — — (706)— — 
437 (90)927 831 (873)(503)(186)
Consolidated Adjusted EBITDA$12,218 $11,873 $12,032 $11,765 $12,263 $12,185 $12,167 
Consolidated Adjusted EBITDA - Year Over Year Change(0.4)%
Footnotes:
(1)    Includes Amortization of acquisition-related intangible assets.
(2)    Includes Pension and benefits remeasurement 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)
Unaudited9/30/226/30/2212/31/21
Debt maturing within one year$14,995 $12,873 $7,443 
Long-term debt132,912 136,184 143,425 
Total Debt147,907 149,057 150,868 
Less Secured debt16,510 16,572 14,202 
Unsecured Debt131,397 132,485 136,666 
Less Cash and cash equivalents2,082 1,857 2,921 
Net Unsecured Debt
$129,315 $130,628 $133,745 
Net Unsecured Debt to Consolidated Adjusted EBITDA Ratio2.7x2.8x
Unsecured Debt - Quarter over quarter change$(1,088)
Net Unsecured Debt - Quarter over quarter change$(1,313)


Verizon Communications Inc.


Adjusted Earnings per Common Share (Adjusted EPS)
(dollars in millions, except per share amounts)
Unaudited3 Mos. Ended 9/30/223 Mos. Ended 9/30/21
Pre-taxTaxAfter-Tax Pre-taxTaxAfter-Tax 
EPS$1.17 $1.55 
Amortization of acquisition-related intangible assets$236 $(58)$178 0.04 $57 $(14)$43 0.01 
Severance, pension and benefits charges645 (162)483 0.11 247 (63)184 0.04 
Net gain from sale of Media— — — — (706)(30)(736)(0.18)
$881 $(220)$661 $0.16 $(402)$(107)$(509)$(0.12)
Adjusted EPS$1.32 $1.42 
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)
Unaudited9 Mos. Ended 9/30/229 Mos. Ended 9/30/21
Net Cash Provided by Operating Activities$28,199 $31,162 
Capital expenditures (including capitalized software)(15,811)(13,861)
Free Cash Flow$12,388 $17,301 

Verizon Communications Inc.
Non-GAAP Reconciliations - Segments
Segment EBITDA and Segment EBITDA Margin
Consumer
(dollars in millions)
Unaudited3 Mos. Ended 9/30/223 Mos. Ended 9/30/219 Mos. Ended 9/30/229 Mos. Ended 9/30/21
Operating Income$7,349 $7,590 $21,818 $22,606 
Add Depreciation and amortization expense3,232 2,918 9,605 8,679 
Segment EBITDA$10,581 $10,508 $31,423 $31,285 
Year over year change %0.7 %0.4 %
Total operating revenues$25,840 $23,328 $76,736 $69,603 
Operating Income Margin28.4 %32.5 %28.4 %32.5 %
Segment EBITDA Margin40.9 %45.0 %40.9 %44.9 %
Business
(dollars in millions)
Unaudited3 Mos. Ended 9/30/223 Mos. Ended 9/30/219 Mos. Ended 9/30/229 Mos. Ended 9/30/21
Operating Income$698 $886 $2,046 $2,641 
Add Depreciation and amortization expense1,079 1,018 3,214 3,046 
Segment EBITDA$1,777 $1,904 $5,260 $5,687 
Year over year change %(6.7)%(7.5)%
Total operating revenues$7,837 $7,689 $23,172 $23,232 
Operating Income Margin8.9 %11.5 %8.8 %11.4 %
Segment EBITDA Margin22.7 %24.8 %22.7 %24.5 %