EX-99 2 a2021q2exhibit99.htm EX-99 Document

Exhibit 99
vzlogoa58a.jpg


News Release



FOR IMMEDIATE RELEASE
Media contacts:
July 21, 2021Kim Ancin
908.559.3227
kimberly.ancin@verizon.com
Eric Wilkens
908.559.3063
eric.wilkens@verizon.com


Verizon reports increased 5G adoption and record 2Q performance

Award-winning network performance, customer and wireless service revenue growth lead company to revise guidance upward for the year

2Q 2021 highlights
Consolidated:
•$1.40 in earnings per share (EPS); adjusted EPS*, excluding special items, of $1.37.
•Operating revenue of $33.8 billion, a result of strong sequential wireless revenue growth.
•Net income of $5.9 billion and adjusted EBITDA* of $12.2 billion.

Total Wireless:
•Total wireless service revenue of $16.9 billion, a 5.9 percent increase year over year, and a 4.0 percent increase from second-quarter 2019.
•Total retail postpaid churn of 0.94 percent, and retail postpaid phone churn of 0.72 percent.
•528,000 retail postpaid net additions, including 275,000 phone net additions, resulting in 121.3 million total retail connections.

Consumer:
•Total revenue of $23.5 billion, an increase of 11.2 percent year over year, and an increase of 6.7 percent from second-quarter 2019.
•Total retail postpaid churn of 0.83 percent, and retail postpaid phone churn of 0.65 percent, a record-low retail postpaid phone churn outside of second-quarter 2020 and third-quarter 2020, which were heavily impacted by the COVID-19 pandemic.


•350,000 retail postpaid net additions, including 197,000 phone net additions, driving 5G-phone adoption to approximately 20 percent of Consumer wireless phone customers and step-ups to premium unlimited plans.
•92,000 Consumer Fios Internet net additions. The company's trailing 12-month total Fios Internet net addition performance is the highest since 2015.

Business:
•Total revenue of $7.8 billion, an increase of 3.7 percent year over year, and relatively flat from second-quarter 2019.
•Total retail postpaid churn of 1.30 percent, and retail postpaid phone churn of 1.07 percent.
•178,000 retail postpaid net additions, including 78,000 phone net additions.



NEW YORK - Verizon Communications Inc. (NYSE, Nasdaq: VZ) reported second-quarter earnings today highlighted by an increase in 5G phone adoption, customer and sequential wireless service revenue growth, and superior network reliability. Based on its strong results, Verizon revised its revenue and adjusted EPS guidance* upward for the full year.
"We are executing on our multipurpose network strategy and producing positive results in each of our five growth vectors, recording strong second quarter results. With more connections on our network than anyone else, our already excellent network performance improved in the quarter and was recognized by RootMetrics as the best overall network performance for the 16th time in a row. We are also expanding our 5G Ultra Wideband and 5G Home markets," said Verizon Chairman and CEO Hans Vestberg. "We are excited about our momentum leading into the second half of the year. We are on track to close both the Tracfone and Verizon Media transactions, and will continue to bring value and choice to our customers."
For second-quarter 2021, Verizon reported EPS of $1.40, compared with $1.13 in second-quarter 2020. On an adjusted basis*, second-quarter 2021 EPS, excluding special items, was $1.37, compared with adjusted EPS of $1.18 in second-quarter 2020.
Second-quarter 2021 EPS included a net pre-tax gain from special items of $182 million, consisting of a pre-tax gain of approximately $1.3 billion related to a pension remeasurement credit, and a pre-tax loss of $1.1 billion from early debt redemption costs.
In second-quarter 2021, Verizon announced an agreement to sell Verizon Media to Apollo funds, with an expected close date in second-half 2021. After the announcement, certain assets of the Verizon Media business were classified as an "Asset Held for Sale." As a result, Verizon no longer depreciated or
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amortized these assets, which resulted in a partial quarter benefit of 3 cents per share in the second quarter. This benefit will continue until the deal closes.
“Second quarter results were exceptional, both financially and operationally,” said Verizon Chief Financial Officer Matt Ellis. “Our strong first half performance and the momentum in our business gives us the confidence to raise our total wireless service revenue growth guidance to between 3.5 percent and 4 percent, an update from prior guidance for 2021 total wireless service revenue growth of at least 3 percent. We are also raising our adjusted EPS guidance* to the range of $5.25 to $5.35, an update from prior guidance for 2021 adjusted EPS* of $5.00 to $5.15."
Consolidated results
•Total consolidated operating revenues in second-quarter 2021 were $33.8 billion, up 10.9 percent from second-quarter 2020, and an increase of 5.3 percent from second-quarter 2019. This increase was the result of wireless revenue growth, strong Fios and Verizon Media results, and increased wireless equipment revenue.
•First-half 2021 cash flow from operations totaled $20.4 billion, a decrease from $23.6 billion year over year, primarily driven by higher cash taxes and higher working capital requirements due to greater volumes. The cash tax impact was the result of a one-time benefit received in second-quarter 2020, as well as a pandemic-related postponement of payments in second-quarter 2020.
•Capital expenditures in first-half 2021 were $8.7 billion. Capital expenditures continue to support the growth in traffic on the company's 4G LTE network and the continued expansion of the company's 5G Ultra Wideband and 5G Nationwide networks. Capital expenditures related to C-Band were more than $160 million in first-half 2021.
•Verizon's unsecured debt balance increased year over year by $39.4 billion to $141.6 billion at the end of second-quarter 2021, but improved by approximately $6.0 billion sequentially from the end of first-quarter 2021. The company’s net unsecured debt* as of the end of second-quarter 2021 increased by $42.5 billion year over year to $136.8 billion, and its net unsecured debt to adjusted EBITDA ratio* was approximately 2.9 times.
Consumer results
•The company continues to provide new and existing consumers with more value in upgraded offerings; seven entertainment options, including gaming; and more choice through its Mix and Match pricing in both wireless and home broadband plans.
•With Verizon's company-operated retail stores fully opened and consumer behavior closer to pre-pandemic levels, Consumer built momentum throughout the quarter and timed its promotions to take advantage of the economic recovery and increased customer activity. This increased activity and Consumer's differentiated customer proposition drove 5G adoption and step-ups to premium unlimited plans. Consumer ended second-quarter 2021 with approximately 20 percent of wireless phone customers having 5G-capable devices.
•Total Verizon Consumer revenues were $23.5 billion, an increase of 11.2 percent year over year, and an increase of 6.7 percent from second-quarter 2019. This increase was primarily driven by wireless equipment revenues of $4.7 billion, which rebounded above pre-pandemic levels.
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•Consumer wireless service revenues were $13.8 billion in second-quarter 2021, a 5.4 percent increase year over year, and a 2.5 percent increase from second-quarter 2019. This increase was driven by customer growth, continued adoption of wireless unlimited and premium unlimited plans, products, such as billed content, as well as reseller and prepaid. This growth also came despite minimal contributions from international roaming.
•Total wireless retail postpaid churn was 0.83 percent in second-quarter 2021. Wireless retail postpaid phone churn was 0.65 percent, a record-low retail postpaid phone churn outside of second-quarter 2020 and third-quarter 2020, which were heavily impacted by the pandemic.
•In second-quarter 2021, Consumer reported 350,000 wireless retail postpaid net additions. This consisted of 197,000 phone net additions and 234,000 other connected device net additions, offset by 81,000 tablet net losses.
•The quality and reliability of the company's Fios service continued to drive strong demand for broadband as Consumer reported 92,000 Fios Internet net additions in second-quarter 2021. Consumer Fios revenues of $2.9 billion in second-quarter 2021 were the highest since the company's new operating structure was introduced in 2019. The company's trailing 12-month total Fios Internet net addition performance is the highest since 2015. Consumer reported 62,000 Fios Video net losses in second-quarter 2021.
•In second-quarter 2021, Consumer segment operating income was $7.5 billion, an increase of 6.1 percent year over year, and segment operating income margin was 31.9 percent, a decrease from 33.5 percent in second-quarter 2020. Segment EBITDA* totaled $10.4 billion in second-quarter 2021, an increase of 4.9 percent from second-quarter 2020. Segment EBITDA margin* was 44.3 percent in second-quarter 2021, a decrease from 47.0 percent in second-quarter 2020, primarily resulting from higher activations.
Business results
•During second-quarter 2021, as the economy reopened, Business customers took advantage of promotions and an advanced communications, security and video collaboration product portfolio, creating strong momentum in Small and Medium Business and the first quarter of Global Enterprise growth since the onset of the pandemic.
•Total Verizon Business revenues were $7.8 billion, up 3.7 percent year over year, and relatively flat from second-quarter 2019.
•Business wireless service revenues were $3.1 billion in second-quarter 2021, an 8.0 percent increase year over year, and an increase of 11.4 percent from second-quarter 2019. This increase was led by Small and Medium Business and Global Enterprise.
•Total wireless retail postpaid churn was 1.30 percent in second-quarter 2021, and wireless retail postpaid phone churn was 1.07 percent.
•Business reported 178,000 wireless retail postpaid net additions in second-quarter 2021, including 78,000 phone net additions.
•In second-quarter 2021, Business segment operating income was $856 million, a decrease of 9.5 percent year over year, and segment operating income margin was 11.0 percent, a decrease from 12.6 percent in second-quarter 2020. Segment EBITDA* totaled $1.9 billion in second-quarter 2021, a decrease from $2.0 billion in second-quarter 2020. Segment EBITDA margin* was 24.1 percent, a decrease from 26.2 percent in second-quarter 2020, driven by higher wireless equipment volumes and wireline pressure.
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Media results
•Total Verizon Media revenues were $2.1 billion in second-quarter 2021, an increase of approximately 50 percent from second-quarter 2020, and an increase of approximately 13 percent from second-quarter 2019. Media continued its recent trends and delivered strong performance driven by high customer engagement with its brands and demand for its advertising platforms.
Outlook and guidance
Verizon is updating financial guidance for full-year 2021.
•The company now expects total wireless service revenue growth of 3.5 percent to 4 percent, an update from prior guidance for 2021 total wireless service revenue growth of at least 3 percent. Service and other revenue for 2021 is no longer comparable year over year as the company’s planning assumption now includes the closing of the Verizon Media transaction at the end of third-quarter 2021. For this reason, the company is withdrawing its service and other revenue growth guidance at this time.
•The company now expects adjusted EPS* of $5.25 to $5.35, an update from prior guidance for 2021 adjusted EPS* of $5.00 to $5.15.
Additionally, Verizon continues to expect the following results for full-year 2021:
•Adjusted effective income tax rate* in the range of 23 percent to 25 percent.
•Capital spending to be in the range of $17.5 billion to $18.5 billion, including the further expansion of 5G mmWave in new and existing markets, the densification of the 4G LTE wireless network to manage future traffic demands and the continued deployment of the company's fiber infrastructure. Expenditures related to the deployment of the company's C-Band 5G network will be in addition to this amount, and the company previously announced an incremental $10 billion of capital expenditures from 2021 to 2023, of which $2 billion to $3 billion is expected in 2021.

*Non-GAAP financial measure. See the accompanying schedules and www.verizon.com/about/investors for reconciliations to generally accepted accounting principles (GAAP) for non-GAAP financial measures cited in this document.

Verizon Communications Inc. (NYSE, Nasdaq: VZ) was formed on June 30, 2000 and is one of the world’s leading providers of technology, communications, information and entertainment products and services. Headquartered in New York City and with a presence around the world, Verizon generated revenues of $128.3 billion in 2020. 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 contained in the Private Securities Litigation Reform Act of 1995. We undertake no obligation to revise or publicly
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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; natural disasters, terrorist attacks or acts of war or significant litigation and any resulting financial or reputational impact; the impact of 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 the COVID-19 pandemic; 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; 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; 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 6/30/213 Mos. Ended 6/30/20%
Change		6 Mos. Ended 6/30/216 Mos. Ended 6/30/20%
Change
Operating Revenues
Service revenues and other$28,221 $26,692 5.7$56,144 $54,173 3.6
Wireless equipment revenues5,543 3,755 47.610,487 7,884 33.0
Total Operating Revenues33,764 30,447 10.966,631 62,057 7.4
Operating Expenses
Cost of services8,324 7,639 9.016,344 15,393 6.2
Cost of wireless equipment5,931 4,110 44.311,433 8,652 32.1
Selling, general and administrative expense7,324 7,156 2.314,725 15,741 (6.5)
Depreciation and amortization expense4,020 4,181 (3.9)8,194 8,331 (1.6)
Total Operating Expenses25,599 23,086 10.950,696 48,117 5.4
Operating Income8,165 7,361 10.915,935 13,940 14.3
Equity in earnings (losses) of unconsolidated businesses1 (13)*9 (25)*
Other income (expense), net502 (72)*903 71 *
Interest expense(844)(1,089)(22.5)(1,945)(2,123)(8.4)
Income Before Provision For Income Taxes7,824 6,187 26.514,902 11,863 25.6
Provision for income taxes(1,875)(1,348)39.1(3,575)(2,737)30.6
Net Income$5,949 $4,839 22.9$11,327 $9,126 24.1
Net income attributable to noncontrolling interests$149 $139 7.2$282 $270 4.4
Net income attributable to Verizon5,800 4,700 23.411,045 8,856 24.7
Net Income$5,949 $4,839 22.9$11,327 $9,126 24.1
Basic Earnings Per Common Share
Net income attributable to Verizon$1.40 $1.14 22.8$2.67 $2.14 24.8
Weighted-average shares outstanding (in millions)4,141 4,139 4,141 4,139 
Diluted Earnings Per Common Share (1)
Net income attributable to Verizon$1.40 $1.13 23.9$2.67 $2.14 24.8
Weighted-average shares outstanding (in millions)4,143 4,141 4,143 4,141 
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)
Unaudited6/30/2112/31/20$ Change
Assets
Current assets
Cash and cash equivalents$4,657 $22,171 $(17,514)
Accounts receivable22,237 25,169 (2,932)
Less Allowance for credit losses980 1,252 (272)
Accounts receivable, net21,257 23,917 (2,660)
Inventories1,421 1,796 (375)
Prepaid expenses and other8,291 6,710 1,581 
Total current assets35,626 54,594 (18,968)
Property, plant and equipment283,654 279,737 3,917 
Less Accumulated depreciation189,452 184,904 4,548 
Property, plant and equipment, net94,202 94,833 (631)
Investments in unconsolidated businesses560 589 (29)
Wireless licenses98,034 96,097 1,937 
Deposits for wireless licenses45,910 2,772 43,138 
Goodwill24,915 24,773 142 
Other intangible assets, net7,002 9,413 (2,411)
Operating lease right-of-use assets28,180 22,531 5,649 
Other assets14,761 10,879 3,882 
Total assets$349,190 $316,481 $32,709 
Liabilities and Equity
Current liabilities
Debt maturing within one year$7,023 $5,889 $1,134 
Accounts payable and accrued liabilities17,328 20,658 (3,330)
Current operating lease liabilities3,881 3,485 396 
Other current liabilities11,846 9,628 2,218 
Total current liabilities40,078 39,660 418 
Long-term debt144,894 123,173 21,721 
Employee benefit obligations16,713 18,657 (1,944)
Deferred income taxes37,534 35,711 1,823 
Non-current operating lease liabilities23,360 18,000 5,360 
Other liabilities11,499 12,008 (509)
Total long-term liabilities234,000 207,549 26,451 
Equity
Common stock429 429 — 
Additional paid in capital13,403 13,404 (1)
Retained earnings66,310 60,464 5,846 
Accumulated other comprehensive loss(234)(71)(163)
Common stock in treasury, at cost(6,632)(6,719)87 
Deferred compensation – employee stock ownership plans and other408 335 73 
Noncontrolling interests1,428 1,430 (2)
Total equity75,112 69,272 5,840 
Total liabilities and equity$349,190 $316,481 $32,709 
Footnotes:

Certain amounts have been reclassified to conform to the current period presentation.




Verizon Communications Inc.


Consolidated - Selected Financial and Operating Statistics

(dollars in millions, except per share amounts)
Unaudited6/30/2112/31/20
Total debt$151,917 $129,062 
Net unsecured debt$136,845 $96,287 
Net unsecured debt / Consolidated Adjusted EBITDA(1)
2.9x2.0x
Common shares outstanding end of period (in millions)4,140 4,138 
Total employees (‘000)129.3 132.2 
Quarterly cash dividends declared per common share$0.6275 $0.6275 
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)
Unaudited6 Mos. Ended 6/30/216 Mos. Ended 6/30/20$ Change
Cash Flows from Operating Activities
Net Income$11,327 $9,126 $2,201 
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization expense8,194 8,331 (137)
Employee retirement benefits(1,819)(32)(1,787)
Deferred income taxes1,978 (120)2,098 
Provision for expected credit losses409 831 (422)
Equity in losses of unconsolidated businesses, net of dividends received25 46 (21)
Changes in current assets and liabilities, net of effects from acquisition/disposition of businesses
82 3,297 (3,215)
Other, net242 2,073 (1,831)
Net cash provided by operating activities20,438 23,552 (3,114)
Cash Flows from Investing Activities
Capital expenditures (including capitalized software)(8,716)(9,850)1,134 
Acquisitions of businesses, net of cash acquired(458)(399)(59)
Acquisitions of wireless licenses(45,278)(1,801)(43,477)
Other, net51 (74)125 
Net cash used in investing activities(54,401)(12,124)(42,277)
Cash Flows from Financing Activities
Proceeds from long-term borrowings31,444 9,305 22,139 
Proceeds from asset-backed long-term borrowings2,695 2,844 (149)
Repayments of long-term borrowings and finance lease obligations(7,559)(8,533)974 
Repayments of asset-backed long-term borrowings(2,993)(4,612)1,619 
Dividends paid(5,198)(5,090)(108)
Other, net(1,839)(146)(1,693)
Net cash provided by (used in) financing activities16,550 (6,232)22,782 
Increase (decrease) in cash, cash equivalents and restricted cash(17,413)5,196 (22,609)
Cash, cash equivalents and restricted cash, beginning of period23,498 3,917 19,581 
Cash, cash equivalents and restricted cash, end of period$6,085 $9,113 $(3,028)



Verizon Communications Inc.


Consumer - Selected Financial Results
(dollars in millions)
Unaudited3 Mos. Ended 6/30/213 Mos. Ended 6/30/20%
Change		6 Mos. Ended 6/30/216 Mos. Ended 6/30/20%
Change
Operating Revenues
Service$16,709 $15,900 5.1$33,278 $32,241 3.2
Wireless equipment4,739 3,209 47.78,931 6,586 35.6
Other2,029 2,004 1.24,066 4,051 0.4
Total Operating Revenues23,477 21,113 11.246,275 42,878 7.9
Operating Expenses
Cost of services4,181 3,885 7.68,181 7,815 4.7
Cost of wireless equipment4,854 3,299 47.19,246 6,750 37.0
Selling, general and administrative expense4,045 4,016 0.78,071 8,298 (2.7)
Depreciation and amortization expense2,900 2,849 1.85,761 5,669 1.6
Total Operating Expenses15,980 14,049 13.731,259 28,532 9.6
Operating Income$7,497 $7,064 6.1$15,016 $14,346 4.7
Operating Income Margin31.9 %33.5 %32.4 %33.5 %
Segment EBITDA$10,397 $9,913 4.9$20,777 $20,015 3.8
Segment EBITDA Margin44.3 %47.0 %44.9 %46.7 %
Footnotes:
The segment financial results and metrics above are adjusted to exclude the effects of special items, as the Company’s chief operating decision maker excludes these items in assessing segment performance.
Certain intersegment transactions with corporate entities have not been eliminated.
 

Verizon Communications Inc.


Consumer - Selected Operating Statistics
Unaudited6/30/216/30/20% Change
Connections (‘000):
Wireless retail postpaid connections90,514 89,977 0.6
Wireless retail prepaid connections4,075 3,998 1.9
Total wireless retail connections94,589 93,975 0.7
Fios video connections3,710 3,987 (6.9)
Fios internet connections6,392 5,971 7.1
Fios digital voice residence connections3,165 3,456 (8.4)
Fios digital connections13,267 13,414 (1.1)
Broadband connections6,783 6,468 4.9
Unaudited3 Mos. Ended 6/30/213 Mos. Ended 6/30/20%
Change		6 Mos. Ended 6/30/216 Mos. Ended 6/30/20%
Change
Gross Additions (‘000):
Wireless retail postpaid 2,592 1,927 34.54,899 4,147 18.1
Net Additions Detail (‘000) :
Wireless retail postpaid (1)
350 72 *24 (453)*
Wireless retail prepaid (1)
18 12 50.037 (72)*
Total wireless retail (1)
368 84 *61 (525)*
Wireless retail postpaid phones (1)
197 97 *(28)(210)86.7
Fios video (62)(81)23.5(144)(165)12.7
Fios internet92 10 *190 69 *
Fios digital voice residence(62)(70)11.4(141)(164)14.0
Fios digital(32)(141)77.3(95)(260)63.5
Broadband (1)
70 (13)*136 18 *
Churn Rate:
Wireless retail postpaid0.83 %0.69 %0.90 %0.85 %
Wireless retail postpaid phones0.65 %0.51 %0.71 %0.64 %
Wireless retail0.97 %0.86 %1.04 %1.03 %
Revenue Statistics (in millions):
Wireless service revenue$13,794 $13,087 5.4$27,478 $26,563 3.4
Fios revenues$2,895 $2,754 5.1$5,755 $5,553 3.6

Verizon Communications Inc.


Unaudited3 Mos. Ended 6/30/213 Mos. Ended 6/30/20%
Change		6 Mos. Ended 6/30/216 Mos. Ended 6/30/20%
Change
Other Wireless Statistics:
Wireless retail postpaid ARPA (2)
$121.24 $116.02 4.5$121.05 $117.44 3.1
Wireless retail postpaid upgrade rate
4.9 %3.9 %
Wireless retail postpaid accounts (‘000) (3)
33,606 33,695 (0.3)
Wireless retail postpaid connections per account (3)
2.69 2.67 0.7
Total wireless internet postpaid base (3)
16.1 %16.0 %
Footnotes:

(1) Connection net additions include certain adjustments.

(2) Wireless retail postpaid ARPA - average service revenue per account from retail postpaid accounts.

(3) Statistics presented as of end of period.

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 6/30/213 Mos. Ended 6/30/20%
Change		6 Mos. Ended 6/30/216 Mos. Ended 6/30/20%
Change
Operating Revenues
Small and Medium Business$2,895 $2,601 11.3$5,725 $5,405 5.9
Global Enterprise2,583 2,589 (0.2)5,142 5,220 (1.5)
Public Sector and Other1,614 1,523 6.03,260 2,997 8.8
Wholesale670 769 (12.9)1,416 1,541 (8.1)
Total Operating Revenues7,762 7,482 3.715,543 15,163 2.5
Operating Expenses
Cost of services2,729 2,641 3.35,419 5,230 3.6
Cost of wireless equipment1,076 812 32.52,187 1,902 15.0
Selling, general and administrative expense2,086 2,069 0.84,154 4,103 1.2
Depreciation and amortization expense1,015 1,014 0.12,028 2,028 —
Total Operating Expenses6,906 6,536 5.713,788 13,263 4.0
Operating Income$856 $946 (9.5)$1,755 $1,900 (7.6)
Operating Income Margin11.0 %12.6 %11.3 %12.5 %
Segment EBITDA$1,871 $1,960 (4.5)$3,783 $3,928 (3.7)
Segment EBITDA Margin24.1 %26.2 %24.3 %25.9 %
Footnotes:
The segment financial results and metrics above are adjusted to exclude the effects of special items, as the Company’s chief operating decision maker excludes these items in assessing segment performance.
Certain intersegment transactions with corporate entities have not been eliminated.

Verizon Communications Inc.


Business - Selected Operating Statistics
Unaudited6/30/216/30/20%
Change
Connections (‘000):
Wireless retail postpaid connections26,740 25,897 3.3
Fios video connections72 75 (4.0)
Fios internet connections346 327 5.8
Fios digital connections418 402 4.0
Broadband connections480 491 (2.2)
Unaudited3 Mos. Ended 6/30/213 Mos. Ended 6/30/20%
Change		6 Mos. Ended 6/30/216 Mos. Ended 6/30/20%
Change
Gross Additions (‘000):
Wireless retail postpaid1,220 1,148 6.32,361 2,612 (9.6)
Net Additions Detail (‘000):
Wireless retail postpaid (1)
178 280 (36.4)334 755 (55.8)
Wireless retail postpaid phones (1)
78 76 2.6125 315 (60.3)
Fios video(1)(2)50.0(1)(2)50.0
Fios internet7 (3)*11 1 *
Fios digital 6 (5)*10 (1)*
Broadband (1)
— (10)100.0(2)(15)86.7
Churn Rate:
Wireless retail postpaid1.30 %1.12 %1.27 %1.21 %
Wireless retail postpaid phones1.07 %0.90 %1.04 %0.96 %
Revenue Statistics (in millions):
Wireless service revenue$3,090 $2,861 8.0$6,150 $5,742 7.1
Fios revenues$281 $260 8.1$557 $522 6.7
Other Operating Statistics:
Wireless retail postpaid upgrade rate3.4 %2.7 %
Total wireless internet postpaid base (2)
34.8 %33.9 %
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.
Unaudited6/30/216/30/20% Change
Connections (‘000)
Retail postpaid117,254 115,874 1.2
Retail prepaid4,075 3,998 1.9
Total retail121,329 119,872 1.2
Unaudited3 Mos. Ended 6/30/213 Mos. Ended 6/30/20%
Change		6 Mos. Ended 6/30/216 Mos. Ended 6/30/20%
Change
Net Additions Detail (‘000) (1)
Retail postpaid phone275 173 59.097 105 (7.6)
Retail postpaid528 352 50.0358 302 18.5
Retail prepaid18 12 50.037 (72)*
Total retail546 364 50.0395 230 71.7
Account Statistics
Retail postpaid accounts (‘000) (2)
35,223 35,242 (0.1)
Retail postpaid connections per account (2)
3.33 3.29 1.2
Retail postpaid ARPA (3)
$142.23 $135.97 4.6$141.98 $137.39 3.3
Churn Detail
Retail postpaid phone0.72 %0.58 %0.77 %0.70 %
Retail postpaid0.94 %0.78 %0.98 %0.93 %
Retail1.04 %0.92 %1.09 %1.07 %
Retail Postpaid Connection Statistics
Total internet postpaid base (2)
20.4 %20.0 %
Upgrade rate4.6 %3.7 %
Revenue Statistics (in millions) (4)
Wireless service$16,884 $15,948 5.9$33,628 $32,305 4.1
Wireless equipment5,543 3,755 47.610,487 7,884 33.0
Wireless other2,043 2,039 0.24,086 4,118 (0.8)
Total Wireless$24,470 $21,742 12.5$48,201 $44,307 8.8
Footnotes:

(1) Connection net additions include certain adjustments.
(2) Statistics presented as of end of period.
(3) Wireless retail postpaid ARPA - average service revenue per account from retail postpaid accounts.
(4) 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 6/30/213 Mos. Ended 3/31/213 Mos. Ended 12/31/203 Mos. Ended 9/30/203 Mos. Ended 6/30/203 Mos. Ended 3/31/20
Consolidated Net Income$5,949 $5,378 $4,718 $4,504 $4,839 $4,287 
  Add/(subtract):
Provision for income taxes1,875 1,700 1,535 1,347 1,348 1,389 
Interest expense (1)
844 1,101 1,080 1,044 1,089 1,034 
Depreciation and amortization expense4,020 4,174 4,197 4,192 4,181 4,150 
Consolidated EBITDA$12,688 $12,353 $11,530 $11,087 $11,457 $10,860 
  Add/(subtract):
Other (income) expense, net (2)
$(502)$(401)$(164)$774 $72 $(143)
Equity in losses (earnings) of unconsolidated businesses(1)(8)11 9 13 12 
Severance charges— — 221 — — — 
Loss on spectrum licenses— 223 — — — 1,195 
Net loss from disposition of business— — 126 — — — 
(503)(186)194 783 85 1,064 
Consolidated Adjusted EBITDA$12,185 $12,167 $11,724 $11,870 $11,542 $11,924 
(1)    Includes Early debt redemption costs, where applicable.
(2)    Includes Pension and benefits mark-to-market adjustments and Early debt redemption costs, where applicable.     


    
Net Unsecured Debt and Net Unsecured Debt to Consolidated Adjusted EBITDA Ratio
(dollars in millions)
Unaudited6/30/2112/31/206/30/20
Debt maturing within one year$7,023 $5,889 $6,651 
Long-term debt144,894 123,173 106,190 
Total Debt151,917 129,062 112,841 
Less Secured debt10,315 10,604 10,607 
Unsecured Debt141,602 118,458 102,234 
Less Cash and cash equivalents (1)
4,757 22,171 7,882 
Net Unsecured Debt
$136,845 $96,287 $94,352 
Net Unsecured Debt to Consolidated Adjusted EBITDA Ratio2.9x2.0x
Net Unsecured Debt year over year change$42,493 
(1)    Includes Cash and cash equivalents held for sale, where applicable.

Verizon Communications Inc.


Adjusted Earnings per Common Share (Adjusted EPS)(1)
(dollars in millions, except per share amounts)
Unaudited3 Mos. Ended 6/30/213 Mos. Ended 6/30/20
Pre-taxTaxAfter-Tax Pre-taxTaxAfter-Tax 
EPS$1.40 $1.13 
Net pension remeasurement charge (credit)$(1,314)$334 $(980)(0.24)$153 $(38)$115 0.03 
Net early debt redemption costs1,132 (288)844 0.20 102 (26)76 0.02 
$(182)$46 $(136)$(0.03)$255 $(64)$191 $0.05 
Adjusted EPS$1.37 $1.18 
(1)Adjusted EPS may not add due to rounding.


Verizon Communications Inc.
Non-GAAP Reconciliations - Segments
Segment EBITDA and Segment EBITDA Margin
Consumer
(dollars in millions)
Unaudited3 Mos. Ended 6/30/213 Mos. Ended 6/30/206 Mos. Ended 6/30/216 Mos. Ended 6/30/20
Operating Income$7,497 $7,064 $15,016 $14,346 
Add Depreciation and amortization expense2,900 2,849 5,761 5,669 
Segment EBITDA$10,397 $9,913 $20,777 $20,015 
Year over year change4.9 %3.8 %
Total operating revenues$23,477 $21,113 $46,275 $42,878 
Operating Income Margin31.9 %33.5 %32.4 %33.5 %
Segment EBITDA Margin44.3 %47.0 %44.9 %46.7 %
Business
(dollars in millions)
Unaudited3 Mos. Ended 6/30/213 Mos. Ended 6/30/206 Mos. Ended 6/30/20216 Mos. Ended 6/30/2020
Operating Income$856 $946 $1,755 $1,900 
Add Depreciation and amortization expense1,015 1,014 2,028 2,028 
Segment EBITDA$1,871 $1,960 $3,783 $3,928 
Year over year change(4.5)%(3.7)%
Total operating revenues$7,762 $7,482 $15,543 $15,163 
Operating Income Margin11.0 %12.6 %11.3 %12.5 %
Segment EBITDA Margin24.1 %26.2 %24.3 %25.9 %