Verizon Caps Strong Record of Success in 2013 With Fourth Consecutive Quarter
of Double-Digit Earnings Growth
NEW YORK, Jan. 21, 2014 --
4Q 2013 HIGHLIGHTS
Consolidated
* $1.76 in earnings per share (EPS), compared with a loss of $1.48 in EPS in
4Q 2012, including significant non-operational items in both quarters,
primarily related to the annual actuarial valuation of benefit plans and
mark-to-market pension adjustments.
* 66 cents in adjusted EPS (non-GAAP), a 73.7 percent increase compared with
adjusted EPS of 38 cents per share in 4Q 2012 that included 7 cents per
share in impacts from Superstorm Sandy.
Wireless
* 8.0 percent year-over-year increase in service revenues in 4Q 2013; 7.5
percent year-over-year increase in retail service revenues; 29.5 percent
operating income margin and 47.0 percent segment EBITDA margin on service
revenues (non-GAAP).
* 1.7 million retail net additions, excluding acquisitions and adjustments;
1.6 million retail postpaid net additions; low retail postpaid churn of
0.96 percent; 102.8 million total retail connections, 96.8 million total
retail postpaid connections.
* 4G LTE service now available to nearly 305 million people in more than 500
markets across the U.S.
Wireline
* 6.4 percent year-over-year increase in consumer revenues; consumer ARPU
(average revenue per user) up 10.8 percent year over year.
* 15.6 percent year-over-year increase in FiOS revenues; 126,000 FiOS
Internet and 92,000 FiOS Video net additions, with continued increased
sales penetration for both services.
Verizon Communications Inc. (NYSE, Nasdaq: VZ) today reported another strong
quarter of earnings, revenue and cash-flow growth.
With fourth-quarter 2013 EPS of $1.76 (adjusted, non-GAAP, 66 cents), Verizon
has posted year-over-year double-digit percentage growth in operating income
and EPS in all four quarters of 2013, and in seven of the past eight quarters.
Lowell McAdam, Verizon chairman and CEO, said: "Verizon delivered a total
return of 18.6 percent to our shareholders in 2013, while attracting more
customers than our competitors and improving our financial performance. This
included more than 20 percent year-over-year increases in operating cash flow
and EPS. In 2014, we look forward to acquiring sole ownership of Verizon
Wireless, the best asset in the global wireless industry, and leveraging all
our assets to deliver innovative products to customers and more value to
shareholders."
Verizon reported $1.76 in EPS in fourth-quarter 2013, compared with a loss of
$1.48 per share in fourth-quarter 2012. Results in both quarters included
significant non-operational items.
Fourth-quarter 2013 results included an after-tax gain of $3.7 billion, or
$1.29 per share, primarily non-cash and related to the annual actuarial
valuation of benefit plans and mark-to-market pension adjustments. This
favorable accounting adjustment was partially offset by after-tax charges of
$540 million, or 19 cents per share, for transaction costs related to the
acquisition of Vodafone Group PLC's indirect 45 percent interest in Verizon
Wireless. Assuming approval of Verizon and Vodafone shareholders later this
month, the closing of the acquisition is planned for Feb. 21 and would be
immediately accretive to earnings by about 10 percent.
Fourth-quarter 2012 charges totaled $1.86 per share - $1.55 per share for the
annual actuarial valuation of benefit plans and mark-to-market pension
adjustments, and 31 cents per share for the early retirement of debt and other
restructuring activities.
On a comparable basis, Verizon reported 66 cents in adjusted EPS (non-GAAP) in
fourth-quarter 2013, a 73.7 percent increase compared with adjusted EPS of 38
cents in fourth-quarter 2012 that also included 7 cents per share in impacts
from Superstorm Sandy.
For the full year, Verizon reported $4.00 in EPS in 2013, compared with 31
cents per share in 2012. On an adjusted basis (non-GAAP), Verizon reported
$2.84 in adjusted EPS in 2013, a 26.8 percent increase from $2.24 in adjusted
EPS in 2012.
Consolidated Results Highlighted by Revenue, Margin and Cash-Flow Growth
With revenue growth across all strategic areas - Verizon Wireless, FiOS and
strategic enterprise services - Verizon generated total operating revenues of
$120.6 billion for full-year 2013, an increase of 4.1 percent, or $4.7 billion,
compared with 2012.
Consolidated Highlights
* Total operating revenues in fourth-quarter 2013 were $31.1 billion, a 3.4
percent increase compared with fourth-quarter 2012, with 84 percent of
revenues generated by Verizon Wireless, FiOS and strategic enterprise
services.
* For full-year 2013, increased revenues and effective cost management
resulted in operating income of $32.0 billion. After adjusting for pension
and benefit impacts and other non-operational items, this represented more
than 21 percent growth in adjusted operating income (non-GAAP) compared
with 2012.
* Consolidated operating income margin was 26.5 percent for 2013, compared
with 11.4 percent for 2012. Consolidated EBITDA margin (based on earnings
before interest, taxes, depreciation and amortization) was 40.3 percent for
2013, compared with 25.6 percent for 2012. On an adjusted basis (non-GAAP),
consolidated EBITDA margin increased 260 basis points in 2013 compared with
2012, to 34.9 percent. This was Verizon's highest adjusted full-year
consolidated EBITDA margin (non-GAAP) in eight years.
* Cash flow from operating activities totaled $38.8 billion in 2013, a 23.3
percent increase compared with 2012. Capital expenditures totaled $16.6
billion in 2013, compared with $16.2 billion in 2012. Verizon estimates
investments in the range of $16.5 billion to $17 billion for capital
expenditures in 2014, with a continued decrease in capital spending as a
percentage of total revenues.
* Free cash flow (non-GAAP, cash flow from operations less capital
expenditures) totaled $22.2 billion in 2013, an increase of 45.1 percent,
or $6.9 billion, compared with 2012. From this $22.2 billion, Verizon
returned $5.9 billion in dividends to shareholders, including a seventh
consecutive year of a quarterly dividend increase.
* Verizon estimates its cash contributions in 2014 for pension funding
requirements will be $1.2 billion.
Verizon Wireless Delivers Strong Customer Additions, Revenue Growth and
Profitability
In fourth-quarter 2013, Verizon Wireless delivered strong growth in retail net
connections and service revenues, an increase in smartphone penetration, and
continued low retail postpaid churn.
Wireless Financial Highlights
* Total revenues were $21.1 billion in fourth-quarter 2013, up 5.7 percent
year over year. Service revenues in the quarter totaled $17.7 billion, up
8.0 percent year over year - marking the fifth consecutive quarter of at
least 8 percent growth. Retail service revenues grew 7.5 percent year over
year, to $17.0 billion.
* For full-year 2013, total revenues were $81.0 billion, up 6.8 percent over
2012, and service revenues were $69.0 billion in 2013, up 8.3 percent year
over year.
* Retail postpaid ARPA (average revenue per account) grew 7.1 percent over
fourth-quarter 2012, to $157.21 per month.
* In fourth-quarter 2013, wireless operating income margin was 29.5 percent,
and segment EBITDA margin on service revenues (non-GAAP) was 47.0 percent,
up 560 basis points from fourth-quarter 2012. For full-year 2013, operating
income margin was 32.1 percent, up 340 basis points from 2012; segment
EBITDA margin was 49.5 percent, up 290 basis points year over year.
Wireless Operational Highlights
* Verizon Wireless added 1.7 million retail net connections in the fourth
quarter, including 1.6 million retail postpaid net connections. The company
added 4.1 million net retail postpaid connections in 2013. These additions
exclude acquisitions and adjustments.
* At the end of 2013, the company had 102.8 million retail connections, a 4.7
percent increase year over year - including 96.8 million retail postpaid
connections.
* Verizon Wireless had 35.1 million retail postpaid accounts at the end of
the fourth quarter and an average of 2.8 connections per account, up 4.5
percent year over year.
* At year-end 2013, smartphones accounted for 70 percent of the Verizon
Wireless retail postpaid customer phone base, up from 67 percent at the end
of third-quarter 2013.
* Retail postpaid churn was 0.96 percent in fourth-quarter 2013, up 1 basis
point year over year and down 1 basis point from third-quarter 2013. Total
retail churn was 1.27 percent in fourth-quarter 2013, up 3 basis points
year over year.
* Verizon Wireless has substantially completed deployment of its 4G LTE
network, covering more than 99 percent of its current 3G network footprint.
The Verizon Wireless 4G LTE network is now available to 97 percent of the
U.S. population in more than 500 markets covering nearly 305 million
people, including those in areas served by the company's LTE in Rural
America partners.
* The company continued to enhance its 4G LTE smartphone lineup. In the
fourth quarter, Verizon Wireless launched the Nokia Lumia 2520, the Samsung
S4 mini and Galaxy III mini, the HTC One Max and the BlackBerry Z30. The
company also launched the Verizon Ellipsis Jetpack and Verizon Ellipsis 7
Tablet, and the Delphi Connect with 4G LTE, which offers vehicle
diagnostics as well as a mobile hotspot for up to five connected devices.
* In November, Verizon Wireless opened its first Destination Store at Mall of
America in Minneapolis. The store, containing more than 9,000 square feet,
features lifestyle zones that help customers discover the latest gadgets,
devices and solutions.
Wireline Highlighted by Strong Consumer Revenue Growth
Verizon's wireline segment reported continued strong results for consumer
services, where year-over-year quarterly revenues now have grown by more than 4
percent for six consecutive quarters - a growth rate the company considers
sustainable. In enterprise and wholesale markets, sales of global enterprise
strategic services continued to increase and constitute a larger percentage of
the revenue base.
Wireline Financial Highlights
* In fourth-quarter 2013, consumer revenues were $3.8 billion, an increase of
6.4 percent compared with fourth-quarter 2012. Consumer ARPU for wireline
services increased to $117.06 in fourth-quarter 2013, up 10.8 percent
compared with fourth-quarter 2012.
* Representing 73 percent of total consumer revenues, FiOS consumer revenues
grew 14.9 percent, to nearly $2.8 billion, in fourth-quarter 2013, compared
with fourth-quarter 2012. Total FiOS revenues grew 15.6 percent over the
same period.
* Wireline operating income margin was 1.0 percent for 2013, up from 0.2
percent for 2012. Segment EBITDA margin (non-GAAP) was 22.2 percent for
2013, flat compared with 22.1 percent when excluding storm impacts for
2012. Verizon expects the wireline segment EBITDA margin to increase in
2014.
* Sales of strategic services to global enterprise customers increased 2.3
percent compared with fourth-quarter 2012 and represented 59 percent of
total enterprise revenues. Strategic services include cloud and data center
services, security and IT solutions, advanced communications, strategic
networking and telematics services.
Wireline Operational Highlights
* In fourth-quarter 2013, Verizon added 126,000 net new FiOS Internet
connections and 92,000 net new FiOS Video connections. Verizon had a total
of 6.1 million FiOS Internet and 5.3 million FiOS Video connections at
year-end 2013, representing year-over-year increases of 11.9 percent and
11.3 percent, respectively.
* FiOS penetration (subscribers as a percentage of potential subscribers)
continued to increase. FiOS Internet penetration was 39.5 percent at the
end of fourth-quarter 2013, compared with 37.3 percent at the end of
fourth-quarter 2012. In the same periods, FiOS Video penetration was 35.0
percent, compared with 33.3 percent. The FiOS network passed 18.6 million
premises by year-end 2013.
* By the end of fourth-quarter 2013, 46 percent of consumer FiOS Internet
customers subscribed to FiOS Quantum, which provides speeds ranging from 50
to 500 megabits per second, up from 41 percent at the end of third-quarter
2013. In fourth-quarter 2013, 55 percent of consumer FiOS Internet sales
were for speeds of at least 50 megabits per second.
* Broadband connections totaled more than 9.0 million at year-end 2013, a 2.5
percent year-over-year increase. Net broadband connections increased by
20,000 in fourth-quarter 2013, as FiOS Internet net additions more than
offset a decline in DSL-based High Speed Internet connections.
* Verizon has been replacing high-maintenance portions of its residential
copper network with fiber optics to provide enhanced services and to reduce
ongoing repair costs. In 2013, Verizon migrated 330,000 homes to fiber,
exceeding the target of 300,000 migrations within FiOS markets. By
year-end, Verizon had fewer than 1 million consumer customers served by
copper in FiOS markets.
* Verizon Enterprise Solutions began deploying innovative cloud, security,
M2M (machine-to-machine) and other wireline and wireless business
technology solutions for a variety of new clients around the globe in the
quarter, including Autonet, CME Group, FrieslandCampina, Hyundai, Tesco,
U.S. Department of Treasury, Internal Revenue Service, U.S. Department of
Veterans Affairs, U.S. Agency for International Development, Defense
Information Systems Agency and U.S. Department of the Interior.
NOTE: See the accompanying schedules and www.verizon.com/investor for
reconciliations to generally accepted accounting principles (GAAP) for non-GAAP
financial measures cited in this document.
Verizon Communications Inc. (NYSE, Nasdaq: VZ), headquartered in New York, is a
global leader in delivering broadband and other wireless and wireline
communications services to consumer, business, government and wholesale
customers. Verizon Wireless operates America's most reliable wireless network,
with nearly 103 million retail connections nationwide. Verizon also provides
converged communications, information and entertainment services over America's
most advanced fiber-optic network, and delivers integrated business solutions
to customers in more than 150 countries. A Dow 30 company with more than $120
billion in 2013 revenues, Verizon employs a diverse workforce of 176,800. For
more information, visit www.verizon.com.
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Verizon Communications Inc.
Condensed Consolidated Statements of Income
(dollars in millions, except per share amounts)
3 Mos. Ended 3 Mos. Ended
Unaudited 12/31/13 12/31/12 % Change
Operating Revenues $ 31,065 $ 30,045 3.4
Operating Expenses
Cost of services and sales 11,962 13,069 (8.5)
Selling, general and administrative expense 2,857 16,008 (82.2)
Depreciation and amortization expense 4,183 4,137 1.1
Total Operating Expenses 19,002 33,214 (42.8)
Operating Income (Loss) 12,063 (3,169) *
Equity in earnings of unconsolidated businesses 8 87 (90.8)
Other income and (expense), net (250) (1,079) (76.8)
Interest expense (1,061) (575) 84.5
Income (Loss) Before (Provision) Benefit for Income Taxes 10,760 (4,736) *
(Provision) Benefit for income taxes (2,844) 2,810 *
Net Income (Loss) $ 7,916 $ (1,926) *
Net income attributable to noncontrolling interests $ 2,849 $ 2,303 23.7
Net income (loss) attributable to Verizon 5,067 (4,229) *
Net Income (Loss) $ 7,916 $ (1,926) *
Basic Earnings (Loss) per Common Share
Net income (loss) attributable to Verizon $ 1.77 $ (1.48) *
Weighted average number of common shares (in millions) 2,867 2,862
Diluted Earnings (Loss) per Common Share (1)
Net income (loss) attributable to Verizon $ 1.76 $ (1.48) *
Weighted average number of common
shares-assuming dilution (in millions) 2,875 2,862
(dollars in millions, except per share amounts)
12 Mos. Ended 12 Mos. Ended
Unaudited 12/31/13 12/31/12 % Change
Operating Revenues $ 120,550 $ 115,846 4.1
Operating Expenses
Cost of services and sales 44,887 46,275 (3.0)
Selling, general and administrative expense 27,089 39,951 (32.2)
Depreciation and amortization expense 16,606 16,460 0.9
Total Operating Expenses 88,582 102,686 (13.7)
Operating Income (Loss) 31,968 13,160 *
Equity in earnings of unconsolidated businesses 142 324 (56.2)
Other income and (expense), net (166) (1,016) (83.7)
Interest expense (2,667) (2,571) 3.7
Income (Loss) Before (Provision) Benefit for Income Taxes 29,277 9,897 *
(Provision) Benefit for income taxes (5,730) 660 *
Net Income (Loss) $ 23,547 $ 10,557 *
Net income attributable to noncontrolling interests $ 12,050 $ 9,682 24.5
Net income (loss) attributable to Verizon 11,497 875 *
Net Income (Loss) $ 23,547 $ 10,557 *
Basic Earnings (Loss) per Common Share
Net income (loss) attributable to Verizon $ 4.01 $ .31 *
Weighted average number of common shares (in millions) 2,866 2,853
Diluted Earnings (Loss) per Common Share (1)
Net income (loss) attributable to Verizon $ 4.00 $ .31 *
Weighted average number of common
shares-assuming dilution (in millions) 2,874 2,862
Footnotes:
(1) If there is a net loss, diluted EPS is the same as basic EPS. Diluted Earnings per Common
Share includes the dilutive effect of shares issuable under our stock-based compensation plans.
Certain reclassifications have been made, where appropriate, to reflect comparable operating
results.
* Not meaningful
Verizon Communications Inc.
Condensed Consolidated Balance Sheets
(dollars in millions)
Unaudited 12/31/13 12/31/12 $ Change
Assets
Current assets
Cash and cash equivalents $ 53,528 $ 3,093 $ 50,435
Short-term investments 601 470 131
Accounts receivable, net 12,439 12,576 (137)
Inventories 1,020 1,075 (55)
Prepaid expenses and other 3,406 4,021 (615)
Total current assets 70,994 21,235 49,759
Plant, property and equipment 220,865 209,575 11,290
Less accumulated depreciation 131,909 120,933 10,976
88,956 88,642 314
Investments in unconsolidated
businesses 3,432 3,401 31
Wireless licenses 75,747 77,744 (1,997)
Goodwill 24,634 24,139 495
Other intangible assets, net 5,800 5,933 (133)
Other assets 4,535 4,128 407
Total Assets $ 274,098 $ 225,222 $ 48,876
Liabilities and Equity
Current liabilities
Debt maturing within one year $ 3,933 $ 4,369 $ (436)
Accounts payable and accrued
liabilities 16,453 16,182 271
Other 6,664 6,405 259
Total current liabilities 27,050 26,956 94
Long-term debt 89,658 47,618 42,040
Employee benefit obligations 27,682 34,346 (6,664)
Deferred income taxes 28,639 24,677 3,962
Other liabilities 5,653 6,092 (439)
Equity
Common stock 297 297 -
Contributed capital 37,939 37,990 (51)
Reinvested earnings
(Accumulated deficit) 1,782 (3,734) 5,516
Accumulated other comprehensive
income 2,358 2,235 123
Common stock in treasury, at cost (3,961) (4,071) 110
Deferred compensation - employee
stock ownership plans and other 421 440 (19)
Noncontrolling interests 56,580 52,376 4,204
Total equity 95,416 85,533 9,883
Total Liabilities and Equity $ 274,098 $ 225,222 $ 48,876
Verizon - Selected Financial and Operating Statistics
Unaudited 12/31/13 12/31/12
Total debt (in millions) $ 93,591 $ 51,987
Net debt (in millions) $ 40,063 $ 48,894
Net debt / Adjusted EBITDA (1) 1.0x 1.3x
Common shares outstanding
end of period (in millions) 2,862 2,859
Total employees 176,800 183,400
Quarterly cash dividends
declared per common share $ 0.530 $ 0.515
Footnotes:
(1) Adjusted EBITDA excludes the effects of non-operational items.
The unaudited condensed consolidated balance sheets are based on preliminary information.
Verizon Communications Inc.
Condensed Consolidated Statements of Cash Flows
(dollars in millions)
12 Mos. Ended 12 Mos. Ended
Unaudited 12/31/13 12/31/12 $ Change
Cash Flows From Operating Activities
Net Income $ 23,547 $ 10,557 $ 12,990
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation and amortization expense 16,606 16,460 146
Employee retirement benefits (5,052) 8,198 (13,250)
Deferred income taxes 5,785 (952) 6,737
Provision for uncollectible accounts 993 972 21
Equity in earnings of unconsolidated businesses,
net of dividends received (102) 77 (179)
Changes in current assets and liabilities,
net of effects from acquisition/disposition
of businesses (5) (403) 398
Other, net (2,954) (3,423) 469
Net cash provided by operating activities 38,818 31,486 7,332
Cash Flows From Investing Activities
Capital expenditures (including capitalized software) (16,604) (16,175) (429)
Acquisitions of investments and businesses, net of
cash acquired (494) (913) 419
Acquisitions of wireless licenses (580) (3,935) 3,355
Proceeds from dispositions of wireless licenses 2,111 - 2,111
Net change in short-term investments 63 27 36
Other, net 671 494 177
Net cash used in investing activities (14,833) (20,502) 5,669
Cash Flows From Financing Activities
Proceeds from long-term borrowings 49,166 4,489 44,677
Repayments of long-term borrowings and capital (8,163) (6,403) (1,760)
lease obligations
Decrease in short-term obligations, excluding
current maturities (142) (1,437) 1,295
Dividends paid (5,936) (5,230) (706)
Proceeds from sale of common stock 85 315 (230)
Purchase of common stock for treasury (153) - (153)
Special distribution to noncontrolling interests (3,150) (8,325) 5,175
Other, net (5,257) (4,662) (595)
Net cash provided by (used in) financing activities 26,450 (21,253) 47,703
Increase (decrease) in cash and cash equivalents 50,435 (10,269) 60,704
Cash and cash equivalents, beginning of period 3,093 13,362 (10,269)
Cash and cash equivalents, end of period $ 53,528 $ 3,093 $ 50,435
Verizon Communications Inc.
Wireless - Selected Financial Results
(dollars in millions)
3 Mos. Ended 3 Mos. Ended
Unaudited 12/31/13 12/31/12 % Change
Operating Revenues
Retail service $ 16,967 $ 15,786 7.5
Other service 744 607 22.6
Service 17,711 16,393 8.0
Equipment 2,421 2,559 (5.4)
Other 993 1,042 (4.7)
Total Operating Revenues 21,125 19,994 5.7
Operating Expenses
Cost of services and sales 6,546 7,332 (10.7)
Selling, general and administrative expense 6,261 5,877 6.5
Depreciation and amortization expense 2,089 1,994 4.8
Total Operating Expenses 14,896 15,203 (2.0)
Operating Income $ 6,229 $ 4,791 30.0
Operating Income Margin 29.5% 24.0%
Segment EBITDA $ 8,318 $ 6,785 22.6
Segment EBITDA Service Margin 47.0% 41.4%
(dollars in millions)
12 Mos. Ended 12 Mos. Ended
Unaudited 12/31/13 12/31/12 % Change
Operating Revenues
Retail service $ 66,334 $ 61,440 8.0
Other service 2,699 2,293 17.7
Service 69,033 63,733 8.3
Equipment 8,111 8,023 1.1
Other 3,879 4,112 (5.7)
Total Operating Revenues 81,023 75,868 6.8
Operating Expenses
Cost of services and sales 23,648 24,490 (3.4)
Selling, general and administrative expense 23,176 21,650 7.0
Depreciation and amortization expense 8,202 7,960 3.0
Total Operating Expenses 55,026 54,100 1.7
Operating Income $ 25,997 $ 21,768 19.4
Operating Income Margin 32.1% 28.7%
Segment EBITDA $ 34,199 $ 29,728 15.0
Segment EBITDA Service Margin 49.5% 46.6%
Footnotes:
The segment financial results and metrics above are adjusted to exclude the
effects of non-operational items, as the Company's chief operating decision
maker excludes these items in assessing business unit performance.
Intersegment transactions have not been eliminated.
Certain reclassifications have been made, where appropriate, to reflect
comparable operating results.
Verizon Communications Inc.
Wireless - Selected Operating Statistics
Unaudited 12/31/13 12/31/12 % Change
Connections ('000)
Retail postpaid 96,752 92,530 4.6
Retail prepaid 6,047 5,700 6.1
Retail 102,799 98,230 4.7
3 Mos. Ended 3 Mos. Ended 12 Mos. Ended 12 Mos. Ended
Unaudited 12/31/13 12/31/12 % Change 12/31/13 12/31/12 % Change
Net Add Detail ('000)(1)
Retail postpaid 1,573 2,100 (25.1) 4,118 5,024 (18.0)
Retail prepaid 80 142 (43.7) 354 893 (60.4)
Retail 1,653 2,242 (26.3) 4,472 5,917 (24.4)
Account Statistics
Retail Postpaid
Accounts ('000)(2) 35,083 35,057 0.1
Retail postpaid ARPA $ 157.21 $ 146.80 7.1 $ 153.93 $ 144.04 6.9
Retail postpaid
connections per account (2) 2.76 2.64 4.5
Churn Detail
Retail postpaid 0.96% 0.95% 0.97% 0.91%
Retail 1.27% 1.24% 1.27% 1.19%
Retail Postpaid Connection
Statistics
Total Smartphone postpaid
% of phones activated 88.9% 85.4% 85.7% 77.1%
Total Smartphone postpaid
phone base (2) 70.0% 58.1%
Total Internet postpaid
base (2) 10.7% 9.3%
Other Operating Statistics
Capital expenditures
(in millions) $ 2,705 $ 2,791 (3.1) $ 9,425 $ 8,857 6.4
Footnotes:
(1) Connection net additions exclude acquisitions and adjustments.
(2) Statistics presented as of end of period.
The segment financial results and metrics above are adjusted to exclude
the effects of non-operational items, as the Company's chief operating
decision maker excludes these items in assessing business unit
performance.
Intersegment transactions have not been eliminated.
Certain reclassifications have been made, where appropriate, to reflect
comparable operating results.
Verizon Communications Inc.
Wireline - Selected Financial Results
(dollars in millions)
3 Mos. Ended 3 Mos. Ended 12 Mos. Ended 12 Mos. Ended
Unaudited 12/31/13 12/31/12 % Change 12/31/13 12/31/12 % Change
Operating Revenues
Consumer retail $ 3,796 $ 3,569 6.4 $ 14,737 $ 14,043 4.9
Small business 642 660 (2.7) 2,591 2,659 (2.6)
Mass Markets 4,438 4,229 4.9 17,328 16,702 3.7
Strategic services 2,139 2,090 2.3 8,420 8,052 4.6
Core 1,507 1,756 (14.2) 6,283 7,247 (13.3)
Global Enterprise 3,646 3,846 (5.2) 14,703 15,299 (3.9)
Global Wholesale 1,632 1,770 (7.8) 6,714 7,240 (7.3)
Other 129 145 (11.0) 478 539 (11.3)
Total Operating Revenues 9,845 9,990 (1.5) 39,223 39,780 (1.4)
Operating Expenses
Cost of services and sales 5,581 5,878 (5.1) 21,928 22,413 (2.2)
Selling, general and
administrative expense 2,060 2,313 (10.9) 8,595 8,883 (3.2)
Depreciation and
amortization expense 2,073 2,125 (2.4) 8,327 8,424 (1.2)
Total Operating Expenses 9,714 10,316 (5.8) 38,850 39,720 (2.2)
Operating Income (Loss) $ 131 $ (326) * $ 373 $ 60 *
Operating Income Margin 1.3% (3.3)% 1.0% 0.2%
Segment EBITDA $ 2,204 $ 1,799 22.5 $ 8,700 $ 8,484 2.5
Segment EBITDA Margin 22.4% 18.0% 22.2% 21.3%
Footnotes:
The segment financial results and metrics above are adjusted to exclude the effects of non-operational
items, as the Company's chief operating decision maker excludes these items in assessing business unit
performance.
Intersegment transactions have not been eliminated.
Certain reclassifications have been made, where appropriate, to reflect
comparable operating results.
* Not meaningful
Verizon Communications Inc.
Wireline - Selected Operating Statistics
Unaudited 12/31/13 12/31/12 % Change
Connections ('000)
FiOS Video Subscribers 5,262 4,726 11.3
FiOS Internet Subscribers 6,072 5,424 11.9
FiOS Digital Voice residence
connections 4,248 3,227 31.6
FiOS Digital connections 15,582 13,377 16.5
HSI 2,943 3,371 (12.7)
Total Broadband connections 9,015 8,795 2.5
Primary residence switched
access connections 6,481 7,982 (18.8)
Primary residence connections 10,729 11,209 (4.3)
Total retail residence voice
connections 11,229 11,849 (5.2)
Total voice connections 21,085 22,503 (6.3)
3 Mos. Ended 3 Mos. Ended 12 Mos. Ended 12 Mos. Ended
Unaudited 12/31/13 12/31/12 % Change 12/31/13 12/31/12 % Change
Net Add Detail ('000)
FiOS Video Subscribers 92 134 (31.3) 536 553 (3.1)
FiOS Internet Subscribers 126 144 (12.5) 648 607 6.8
FiOS Digital Voice residence
connections 179 289 (38.1) 1,021 1,343 (24.0)
FiOS Digital connections 397 567 (30.0) 2,205 2,503 (11.9)
HSI (106) (117) (9.4) (428) (482) (11.2)
Total Broadband connections 20 27 (25.9) 220 125 76.0
Primary residence switched
access connections (340) (402) (15.4) (1,501) (1,924) (22.0)
Primary residence connections (161) (113) 42.5 (480) (581) (17.4)
Total retail residence voice
connections (192) (156) 23.1 (620) (777) (20.2)
Total voice connections (372) (344) 8.1 (1,418) (1,634) (13.2)
Revenue and ARPU Statistics
Consumer ARPU $ 117.06 $ 105.63 10.8 $ 111.96 $ 101.77 10.0
FiOS revenues (in millions) $ 2,965 $ 2,565 15.6 $ 11,152 $ 9,722 14.7
Strategic services as a % of total
Enterprise revenues 58.7% 54.3% 57.3% 52.6%
Other Operating Statistics
Capital expenditures (in millions) $ 1,762 $ 1,725 2.1 $ 6,229 $ 6,342 (1.8)
Wireline employees ('000) 81.9 86.4
FiOS Video Open for Sale ('000) 15,022 14,200
FiOS Video penetration 35.0% 33.3%
FiOS Internet Open for Sale ('000) 15,368 14,528
FiOS Internet penetration 39.5% 37.3%
Footnotes:
The segment financial results and metrics above are adjusted to exclude the
effects of non-operational items, as the Company's chief operating decision
maker excludes these items in assessing business unit performance.
Intersegment transactions have not been eliminated.
Certain reclassifications have been made, where appropriate, to reflect
comparable operating results.
SOURCE Verizon Communications Inc.
CONTACT: Bob Varettoni, 908-559-6388, robert.a.varettoni@verizon.com; or Ray McConville, 908-559-3504,
raymond.mcconville@verizon.com