Verizon Delivers Sixth Consecutive Quarter of Double-Digit Operating Income and Earnings Growth
NEW YORK, July 22, 2014 --
2Q 2014 HIGHLIGHTS
Consolidated
* $1.01 in earnings per share (EPS), compared with 78 cents per share in 2Q
2013.
* 91 cents in adjusted EPS (non-GAAP), compared with 73 cents in adjusted EPS
in 2Q 2013, excluding non-operational gains in both periods.
Wireless
* Added 1.4 million net retail connections; low retail postpaid churn of 0.94
percent; 104.6 million total retail connections; 98.6 million total retail
postpaid connections.
* 5.9 percent year-over-year increase in service revenues; 5.3 percent
year-over-year increase in retail service revenues; 32.5 percent operating
income margin; 50.3 percent segment EBITDA margin on service revenues
(non-GAAP).
Wireline
* 5.3 percent year-over-year increase in consumer revenues, the eighth
consecutive quarter of more than 4 percent growth; consumer ARPU (average
revenue per user) up 11.0 percent.
* 14.4 percent year-over-year increase in FiOS revenues; 139,000 FiOS
Internet and 100,000 FiOS Video net additions.
Verizon Communications Inc. (NYSE, Nasdaq: VZ) today reported its sixth
consecutive quarter of double-digit percentage growth in operating income and
earnings per share. In second-quarter 2014, the company delivered consolidated
top-line growth, driven by strong wireless and FiOS revenues, and continued
margin expansion.
Chairman and CEO Lowell McAdam said: "Verizon's second-quarter results continue
to demonstrate our ability to deliver strong customer growth, with equally
strong financial performance, in a dynamic and competitive environment. We have
great momentum heading into the second half of the year. We remain focused on
profitable growth and on meaningful network investments that provide our
customers with the best, and with a continuously improving, overall
experience."
Verizon has posted double-digit year-over-year percentage growth in reported
and adjusted EPS in nine of the last 10 quarters.
Verizon reported $1.01 in EPS in second-quarter 2014, compared with 78 cents
per share in second-quarter 2013. Second-quarter 2014 results included an
after-tax gain of $434 million (10 cents per share) related to the sale of 700
MHz A Block spectrum licenses.
On an adjusted basis (non-GAAP), Verizon posted EPS of 91 cents in
second-quarter 2014, a 24.7 percent increase compared with 73 cents per share
in second-quarter 2013.
Consolidated Highlights
* Verizon recorded its highest quarterly revenue growth rate in the past six
quarters. Total operating revenues in second-quarter 2014 were $31.5
billion, a 5.7 percent increase compared with second-quarter 2013.
* Continued effective cost management drove second-quarter 2014 operating
income to $7.7 billion, a 17.2 percent increase compared with
second-quarter 2013.
* Consolidated operating income margin was 24.4 percent for second-quarter
2014, compared with 22.0 percent for second-quarter 2013.
* Consolidated EBITDA margin (non-GAAP, based on earnings before interest,
taxes, depreciation and amortization) was 37.6 percent for second-quarter
2014, compared with 35.9 percent for second-quarter 2013.
Verizon Wireless Delivers Strong Customer Additions, Revenue Growth and Profitability
In second-quarter 2014, Verizon Wireless delivered strong growth in retail
postpaid net connections and revenues, company-record tablet additions, an
increase in smartphone penetration, and continued high segment EBITDA margin on
service revenues (non-GAAP).
Wireless Financial Highlights
* Total revenues were $21.5 billion in second-quarter 2014, up 7.5 percent
year over year. Service revenues in the quarter totaled $18.1 billion, up
5.9 percent year over year. Retail service revenues grew 5.3 percent year
over year, to $17.3 billion.
* Retail postpaid ARPA (average revenue per account) increased 4.7 percent
over second-quarter 2013, to $159.73 per month.
* In second-quarter 2014, wireless operating income margin was 32.5 percent
and segment EBITDA margin on service revenues was 50.3 percent. This
compares with 32.4 percent and 49.8 percent, respectively, in
second-quarter 2013.
Wireless Operational Highlights
* Verizon Wireless added 1.4 million retail net connections, all of which
were postpaid, in the second quarter. These additions exclude acquisitions
and adjustments.
* At the end of the second quarter, the company had 104.6 million retail
connections. This includes 98.6 million retail postpaid connections, a 4.6
percent increase year over year.
* Verizon Wireless had 35.2 million retail postpaid accounts at the end of
the second quarter, up 0.7 percent over second-quarter 2013, and 2.80
connections per account, up 3.7 percent year over year.
* During second-quarter 2014, the company added 304,000 postpaid phone net
additions and 1.15 million postpaid tablets. At the end of the quarter,
smartphones accounted for nearly 75 percent of the Verizon Wireless retail
postpaid customer phone base, up from 72 percent in first-quarter 2014.
This was also the third straight quarter of company-record net additions
for tablets.
* Retail postpaid churn was 0.94 percent in the second quarter, down 13 basis
points sequentially and up 1 basis point year over year. Retail churn was
1.25 percent in the second quarter, down 12 basis points sequentially and
up 2 basis points year over year.
* The company continued to enhance its 4G LTE smartphone lineup. In the
second quarter, Verizon Wireless launched the Samsung Galaxy S 5 and ATIV
SE, the Lucid 3 by LG and the HTC One (M8). The company also launched the
Samsung Galaxy Tab 4 8.0 tablet and announced the Samsung Galaxy Tab 4 10.1
and Galaxy Tab S. Earlier this month, Verizon Wireless launched the Sony
Xperia Z2 tablet and the LG G3 smartphone.
* During the second quarter, Verizon Wireless continued to add capacity to
its 4G LTE network, the largest in the United States, using AWS spectrum.
The additional bandwidth, called XLTE, is now available in more than 350
markets across the country.
Wireline Consumer Revenue Growth Remains Strong
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 eight consecutive quarters.
Wireline Financial Highlights
* Total revenues were $9.8 billion in second-quarter 2014, up 0.3 percent
year over year. This is the first quarterly year-over-year increase in
total wireline revenues in more than seven years.
* In second-quarter 2014, consumer revenues were $3.9 billion, up 5.3 percent
compared with second-quarter 2013, with FiOS revenues representing 75
percent of the total. Consumer ARPU for wireline services increased to
$122.57 in second-quarter 2014, up 11.0 percent compared with
second-quarter 2013.
* Total FiOS revenues grew 14.4 percent, to $3.1 billion, comparing
second-quarter 2014 with second-quarter 2013.
* Wireline operating income margin was 2.7 percent in second-quarter 2014, up
from 0.8 percent in second-quarter 2013. Segment EBITDA margin (non-GAAP)
was 23.2 percent in second-quarter 2014, compared with 22.2 percent in
second-quarter 2013.
* Sales of strategic services to enterprise customers increased 3.0 percent
compared with second-quarter 2013. Strategic services include private IP,
Ethernet, data center, cloud, security and managed services.
Wireline Operational Highlights
* In second-quarter 2014, Verizon added 139,000 net new FiOS Internet
connections and 100,000 net new FiOS Video connections. Verizon had totals
of 6.3 million FiOS Internet and 5.4 million FiOS Video connections at the
end of the second quarter, representing year-over-year increases of 9.3
percent and 7.6 percent, respectively.
* FiOS Internet penetration (subscribers as a percentage of potential
subscribers) was 40.1 percent at the end of second-quarter 2014, compared
with 38.6 percent at the end of second-quarter 2013. In the same periods,
FiOS Video penetration was 35.3 percent, compared with 34.5 percent. The
FiOS network passed 19.3 million premises by the end of second-quarter
2014.
* By the end of second-quarter 2014, 55 percent of consumer FiOS Internet
customers subscribed to FiOS Quantum, which provides speeds ranging from 50
to 500 megabits per second, up from 51 percent at the end of first-quarter
2014.
* Beginning this week, existing and new FiOS customers are receiving upload
speeds that mirror download speeds. Verizon is the first provider to offer
symmetrical broadband speeds at no additional charge, enhancing the ability
of FiOS customers to upload to the cloud, share videos and photos, and
video chat.
* Broadband connections totaled 9.1 million at the end of second-quarter
2014, a 1.5 percent year-over-year increase. Net broadband connections
increased by 46,000 in second-quarter 2014, as FiOS Internet net additions
more than offset declines in DSL-based High Speed Internet connections.
* Verizon has been replacing high-maintenance portions of its residential
copper network with fiber optics to provide customers with more resilient
infrastructure and reduce repairs, which improves customer satisfaction and
reduces costs. In second-quarter 2014, Verizon migrated an additional
70,000 customers to fiber.
* In the second quarter, Verizon Enterprise Solutions began deploying
innovative cloud, security, M2M (machine-to-machine), networking and other
technology solutions for a variety of clients around the globe, including
healthcare clients Avera, Cardinal Health, Cerner, iCare and Molina
Healthcare; as well as 1-800-Flowers, Anadarko Petroleum Corporation,
Commonwealth Bank of Australia, Ferrellgas, Johnson Controls, KG Inicis,
Northgate Information Solutions, Peninsula Light Corporation and the state
of Colorado's Statewide Internet Portal Authority.
Guidance Reiterated
Verizon continues to target 2014 investments in the range of $16.5 billion to
$17 billion, with a decrease in capital spending as a percentage of total
revenues for the full year.
Verizon continues to target consolidated top-line growth of 4 percent and
adjusted consolidated EBITDA margin expansion in 2014, with positive
contributions to profitable growth from both wireless and wireline.
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 104.6 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 177,800. For
more information, visit www.verizon.com.
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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," "hopes" 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. The following important factors, along with those discussed
in our filings with the Securities and Exchange Commission (the "SEC"), could
affect future results and could cause those results to differ materially from
those expressed in the forward-looking statements: the ability to realize the
expected benefits of our transaction with Vodafone in the timeframe expected or
at all; 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; significantly increased levels of indebtedness as a result
of the Vodafone transaction; changes in tax laws or treaties, or in their
interpretation; adverse conditions in the U.S. and international economies;
material adverse changes in labor matters, including labor negotiations, and
any resulting financial and/or operational impact; material changes in
technology or technology substitution; disruption of our key suppliers'
provisioning of products or services; changes in the regulatory environment in
which we operate, including any increase in restrictions on our ability to
operate our networks; breaches of network or information technology security,
natural disasters, terrorist attacks or acts of war or significant litigation
and any resulting financial impact not covered by insurance; the effects of
competition in the markets in which we operate; 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; significant increases in benefit plan costs or
lower investment returns on plan assets; and the inability to implement our
business strategies.
Verizon Communications Inc.
Condensed Consolidated Statements of Income
(dollars in millions, except per share amounts)
3 Mos. Ended 3 Mos. Ended 6 Mos. Ended 6 Mos. Ended
Unaudited 6/30/14 6/30/13 % Change 6/30/14 6/30/13 % Change
Operating Revenues $ 31,483 $ 29,786 5.7 $ 62,301 $ 59,206 5.2
Operating Expenses
Cost of services and sales 12,087 11,033 9.6 23,276 21,965 6.0
Selling, general and
administrative expense 7,550 8,047 (6.2) 15,882 16,195 (1.9)
Depreciation and
amortization expense 4,161 4,151 0.2 8,298 8,269 0.4
Total Operating Expenses 23,798 23,231 2.4 47,456 46,429 2.2
Operating Income 7,685 6,555 17.2 14,845 12,777 16.2
Equity in earnings (losses)
of unconsolidated businesses (43) 120 * 1,859 115 *
Other income and
(expense), net 66 25 * (828) 64 *
Interest expense (1,164) (514) * (2,378) (1,051) *
Income Before Provision for
Income Taxes 6,544 6,186 5.8 13,498 11,905 13.4
Provision for income taxes (2,220) (988) * (3,188) (1,852) 72.1
Net Income $ 4,324 $ 5,198 (16.8) $ 10,310 $ 10,053 2.6
Net income attributable to
noncontrolling
interests $ 110 $ 2,952 (96.3) $ 2,149 $ 5,855 (63.3)
Net income attributable
to Verizon 4,214 2,246 87.6 8,161 4,198 94.4
Net Income $ 4,324 $ 5,198 (16.8) $ 10,310 $ 10,053 2.6
Basic Earnings per Common Share
Net income
attributable to
Verizon $ 1.02 $ .78 30.8 $ 2.15 $ 1.46 47.3
Weighted average number of
common shares
(in millions) 4,147 2,865 3,789 2,866
Diluted Earnings per Common Share (1)
Net income attributable
to Verizon $ 1.01 $ .78 29.5 $ 2.15 $ 1.46 47.3
Weighted average number of
common shares-assuming
dilution (in millions) 4,153 2,872 3,795 2,873
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.
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 6/30/14 12/31/13 $ Change
Assets
Current assets
Cash and cash equivalents $ 5,776 $ 53,528 $ (47,752)
Short-term investments 648 601 47
Accounts receivable, net 12,966 12,439 527
Inventories 1,073 1,020 53
Prepaid expenses and other 2,424 3,406 (982)
Total current assets 22,887 70,994 (48,107)
Plant, property and equipment 227,475 220,865 6,610
Less accumulated depreciation 137,763 131,909 5,854
89,712 88,956 756
Investments in unconsolidated businesses 852 3,432 (2,580)
Wireless licenses 75,270 75,747 (477)
Goodwill 24,663 24,634 29
Other intangible assets, net 5,781 5,800 (19)
Other assets 5,262 4,535 727
Total Assets $ 224,427 $ 274,098 $ (49,671)
Liabilities and Equity
Current liabilities
Debt maturing within one year $ 2,283 $ 3,933 $ (1,650)
Accounts payable and accrued 16,521 16,453 68
liabilities
Other 7,689 6,664 1,025
Total current liabilities 26,493 27,050 (557)
Long-term debt 107,696 89,658 18,038
Employee benefit obligations 26,342 27,682 (1,340)
Deferred income taxes 42,027 28,639 13,388
Other liabilities 5,857 5,653 204
Equity
Common stock 424 297 127
Contributed capital 11,038 37,939 (26,901)
Reinvested earnings 5,551 1,782 3,769
Accumulated other comprehensive income 1,188 2,358 (1,170)
Common stock in treasury, at cost (3,638) (3,961) 323
Deferred compensation - employee
stock ownership plans and other 338 421 (83)
Noncontrolling interests 1,111 56,580 (55,469)
Total equity 16,012 95,416 (79,404)
Total Liabilities and Equity $ 224,427 $ 274,098 $ (49,671)
Verizon - Selected Financial and Operating Statistics
Unaudited 6/30/14 12/31/13
Total debt (in millions) $ 109,979 $ 93,591
Net debt (in millions) $ 104,203 $ 40,063
Net debt / Adjusted EBITDA(1) 2.4x 1.0x
Common shares outstanding end of
period (in millions) 4,145 2,862
Total employees 177,800 176,800
Quarterly cash dividends declared
per common share $ 0.530 $ 0.530
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)
6 Mos. Ended 6 Mos. Ended
Unaudited 6/30/14 6/30/13 $ Change
Cash Flows from Operating Activities
Net Income $ 10,310 $ 10,053 $ 257
Adjustments to reconcile net income to net cash provided by
operating activities:
Depreciation and amortization expense 8,298 8,269 29
Employee retirement benefits 562 354 208
Deferred income taxes 253 1,812 (1,559)
Provision for uncollectible accounts 473 507 (34)
Equity in earnings of unconsolidated businesses, net of
dividends received (1,841) (95) (1,746)
Changes in current assets and liabilities, net of effects from
acquisition/disposition of businesses (847) (1,660) 813
Other, net (2,404) (2,092) (312)
Net cash provided by operating activities 14,804 17,148 (2,344)
Cash Flows from Investing Activities
Capital expenditures (including capitalized software) (8,494) (7,616) (878)
Acquisitions of investments and businesses, net of cash acquired (179) (76) (103)
Acquisitions of wireless licenses (271) (264) (7)
Proceeds from dispositions of wireless licenses 2,367 - 2,367
Other, net 231 121 110
Net cash used in investing activities (6,346) (7,835) 1,489
Cash Flows from Financing Activities
Proceeds from long-term borrowings 20,245 499 19,746
Repayments of long-term borrowings and capital
lease obligations (11,317) (2,330) (8,987)
Increase (decrease) in short-term obligations, excluding
current maturities 279 (432) 711
Dividends paid (3,583) (2,946) (637)
Proceeds from sale of common stock 34 74 (40)
Purchase of common stock for treasury - (153) 153
Special distribution to noncontrolling interest - (3,150) 3,150
Acquisition of noncontrolling interest (58,886) - (58,886)
Other, net (2,982) (2,180) (802)
Net cash used in financing activities (56,210) (10,618) (45,592)
Decrease in cash and cash equivalents (47,752) (1,305) (46,447)
Cash and cash equivalents, beginning of period 53,528 3,093 50,435
Cash and cash equivalents, end of period $ 5,776 $ 1,788 $ 3,988
Footnotes:
Certain reclassifications have been made, where appropriate, to reflect comparable operating results.
Verizon Communications Inc.
Wireless - Selected Financial Results
(dollars in millions)
3 Mos. Ended 3 Mos. Ended 6 Mos. Ended 6 Mos. Ended
Unaudited 6/30/14 6/30/13 % Change 6/30/14 6/30/13 % Change
Operating Revenues
Retail service $ 17,288 $ 16,422 5.3 $ 34,534 $ 32,591 6.0
Other service 790 656 20.4 1,531 1,215 26.0
Service 18,078 17,078 5.9 36,065 33,806 6.7
Equipment 2,387 1,953 22.2 4,257 3,766 13.0
Other 1,018 945 7.7 2,040 1,927 5.9
Total Operating Revenues 21,483 19,976 7.5 42,362 39,499 7.2
Operating Expenses
Cost of services and sales 6,742 5,799 16.3 12,598 11,450 10.0
Selling, general and administrative expense 5,649 5,666 (0.3) 11,293 11,114 1.6
Depreciation and amortization expense 2,107 2,047 2.9 4,168 4,053 2.8
Total Operating Expenses 14,498 13,512 7.3 28,059 26,617 5.4
Operating Income $ 6,985 $ 6,464 8.1 $ 14,303 $ 12,882 11.0
Operating Income Margin 32.5% 32.4% 33.8% 32.6%
Segment EBITDA $ 9,092 $ 8,511 6.8 $ 18,471 $ 16,935 9.1
Segment EBITDA Service Margin 50.3% 49.8% 51.2% 50.1%
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 6/30/14 6/30/13 % Change
Connections ('000)
Retail postpaid 98,593 94,271 4.6
Retail prepaid 6,044 5,853 3.3
Retail 104,637 100,124 4.5
3 Mos. Ended 3 Mos. Ended 6 Mos. Ended 6 Mos. Ended
Unaudited 6/30/14 6/30/13 % Change 6/30/14 6/30/13 % Change
Net Add Detail ('000) (1)
Retail postpaid 1,441 941 53.1 1,980 1,618 22.4
Retail prepaid (14) 97 * (4) 140 *
Retail 1,427 1,038 37.5 1,976 1,758 12.4
Account Statistics
Retail Postpaid Accounts ('000) (2) 35,186 34,958 0.7
Retail postpaid ARPA $ 159.73 $ 152.50 4.7 $ 159.70 $ 151.39 5.5
Retail postpaid connections per account (2) 2.80 2.70 3.7
Churn Detail
Retail postpaid 0.94% 0.93% 1.00% 0.97%
Retail 1.25% 1.23% 1.31% 1.27%
Retail Postpaid Connection Statistics
Total Smartphone postpaid % of phones
activated 90.8% 84.4% 90.4% 84.3%
Total Smartphone postpaid phone base (2) 74.6% 64.4%
Total Internet postpaid base (2) 12.3% 9.9%
Other Operating Statistics
Capital expenditures (in millions) $ 2,771 $ 2,278 21.6 $ 5,325 $ 4,270 24.7
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.
* Not meaningful
Verizon Communications Inc.
Wireline - Selected Financial Results
(dollars in millions)
3 Mos. Ended 3 Mos. Ended 6 Mos. Ended 6 Mos. Ended
Unaudited 6/30/14 6/30/13 % Change 6/30/14 6/30/13 % Change
Operating Revenues
Consumer retail $ 3,864 $ 3,669 5.3 $ 7,704 $ 7,285 5.8
Small business 621 635 (2.2) 1,245 1,273 (2.2)
Mass Markets 4,485 4,304 4.2 8,949 8,558 4.6
Strategic services 2,120 2,059 3.0 4,230 4,132 2.4
Core 1,459 1,590 (8.2) 2,955 3,287 (10.1)
Global Enterprise 3,579 3,649 (1.9) 7,185 7,419 (3.2)
Global Wholesale 1,570 1,662 (5.5) 3,161 3,361 (6.0)
Other 125 119 5.0 254 226 12.4
Total Operating Revenues 9,759 9,734 0.3 19,549 19,564 (0.1)
Operating Expenses
Cost of services and sales 5,461 5,407 1.0 10,920 10,864 0.5
Selling, general and
administrative expense 2,034 2,168 (6.2) 4,185 4,433 (5.6)
Depreciation and
amortization expense 2,005 2,085 (3.8) 4,038 4,180 (3.4)
Total Operating Expenses 9,500 9,660 (1.7) 19,143 19,477 (1.7)
Operating Income $ 259 $ 74 * $ 406 $ 87 *
Operating Income Margin 2.7% 0.8% 2.1% 0.4%
Segment EBITDA $ 2,264 $ 2,159 4.9 $ 4,444 $ 4,267 4.1
Segment EBITDA Margin 23.2% 22.2% 22.7% 21.8%
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 6/30/14 6/30/13 % Change
Connections ('000)
FiOS Video Subscribers 5,419 5,035 7.6
FiOS Internet Subscribers 6,309 5,773 9.3
FiOS Digital Voice residence connections 4,440 3,817 16.3
FiOS Digital connections 16,168 14,625 10.6
HSI 2,768 3,166 (12.6)
Total Broadband connections 9,077 8,939 1.5
Primary residence switched access connections 6,007 7,200 (16.6)
Primary residence connections 10,447 11,017 (5.2)
Total retail residence voice connections 10,903 11,583 (5.9)
Total voice connections 20,391 21,828 (6.6)
3 Mos. Ended 3 Mos. Ended 6 Mos. Ended 6 Mos. Ended
Unaudited 6/30/14 6/30/13 % Change 6/30/14 6/30/13 % Change
Net Add Detail ('000)
FiOS Video Subscribers 100 140 (28.6) 157 309 (49.2)
FiOS Internet Subscribers 139 161 (13.7) 237 349 (32.1)
FiOS Digital Voice residence connections 90 286 (68.5) 192 590 (67.5)
FiOS Digital connections 329 587 (44.0) 586 1,248 (53.0)
HSI (93) (116) (19.8) (175) (205) (14.6)
Total Broadband connections 46 45 2.2 62 144 (56.9)
Primary residence switched access
connections (217) (393) (44.8) (474) (782) (39.4)
Primary residence connections (127) (107) 18.7 (282) (192) 46.9
Total retail residence voice connections (145) (142) 2.1 (326) (266) 22.6
Total voice connections (342) (363) (5.8) (694) (675) 2.8
Revenue and ARPU Statistics
Consumer ARPU $ 122.57 $ 110.46 11.0 $ 121.28 $ 109.26 11.0
FiOS revenues (in millions) $ 3,125 $ 2,731 14.4 $ 6,166 $ 5,364 15.0
Strategic services as a % of
total Enterprise revenues 59.2% 56.4% 58.9% 55.7%
Other Operating Statistics
Capital expenditures (in millions) $ 1,345 $ 1,515 (11.2) $ 2,730 $ 2,949 (7.4)
Wireline employees ('000) 80.6 84.7
FiOS Video Open for Sale ('000) 15,372 14,607
FiOS Video penetration 35.3% 34.5%
FiOS Internet Open for Sale ('000) 15,722 14,943
FiOS Internet penetration 40.1% 38.6%
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.
SOURCE Verizon Communications Inc.
CONTACT: Bob Varettoni, 908-559-6388, robert.a.varettoni@verizon.com; Ray
McConville, 908-559-3504, raymond.mcconville@verizon.com