Verizon Communications Inc. · NYSE:VZ
Verizon Communications — Q2 2020 Earnings Presentation
20 slides from Verizon Communications's earnings presentation, Jul 24, 2020
Slide 1: 2Q 2020 Earnings
2Q 2020 Earnings July 24, 2020
Slide 2: “Safe Harbor” Statement
“Safe Harbor” Statement NOTE: In this presentation 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
Slide 3: Consolidated Earnings Summary
Consolidated Earnings Summary 2Q 2020 Reported EPS $1.13 Special items: Net pension remeasurement charge $0.03 Net early debt redemption costs $0.02 Adjusted EPS* $1.18 Note: Amounts may not add due to rounding. * Non-GAAP measure. © 2020 Verizon VZQTR20FIN 3 VlpHU09DSUQyMDE4UTQ =
Slide 4: 2Q 2020 Adjusted EPS
2Q 2020 Adjusted EPS $1.23 ($0.03) ($0.02) $1.18 2Q 2020 (4.1%) Y/Y Adjusted EPS* includes Growth ($0.14) COVID-19 impact and $0.04 of tax benefits 2Q 2019 Operational Commission 2Q 2020 Adjusted EPS* performance expense deferral** Adjusted EPS* Delivered strong underlying Adjusted EPS* despite chal
Slide 5: Purpose-Driven Culture at a Critical Time
Purpose-Driven Culture at a Critical Time Environmental, Social COVID-19 Fight for Racial Justice & Governance Continued focus on Employee and societal Launched Citizen Verizon employee safety, serving engagement through responsible business plan and our customers and driving conversations, voluntee
Slide 6: Strong Execution across Strategic Priorities
Strong Execution across Strategic Priorities Year-to-Date Execution 2Q 2020 Earnings & 2H 2020 Guidance • Awarded J.D. Power top network quality for 25th time • Operational performance highlights resiliency • 5G small cell deployment on plan; 35th 5G Ultra of business wideband city and 6th 5G Home m
Slide 7: Consolidated 2Q 2020 Financial Summary
Consolidated 2Q 2020 Total revenue ($B) $34.8 Financial $32.1 $32.9 $31.6 $30.4 Summary Y/Y Growth (5.1%) $30.4B Total revenue 2Q 2019 3Q 2019 4Q 2019 1Q 2020 2Q 2020 (down 5.1% Y/Y) Adjusted EBITDA* ($B) $11.5B 37.9% Margin %* Adjusted EBITDA* 37.7% 36.6% 37.7% (Adjusted EBITDA margin of 37.9%)* 32
Slide 8: Consumer 2Q 2020 Key Metrics
Consumer 2Q 2020 Wireless retail connections (M) 93.9 93.9 94.5 93.9 94.0 Key Metrics Prepaid 89.6 89.7 90.5 89.9 90.0 Postpaid 5.4M Postpaid device activations 2Q 2019 3Q 2019 4Q 2019 1Q 2020 2Q 2020 72K Wireless retail postpaid phone net adds* (K) Retail postpaid net adds* 0.79% 0.83% 0.72% 0.77%
Slide 9: Consumer 2Q 2020 Financial Summary
Consumer 2Q 2020 Total revenue ($B) Financial $22.0 $22.7 $24.2 $21.8 $21.1 Summary Y/Y Growth (4.0%) $21.1B Total revenue 2Q 2019 3Q 2019 4Q 2019 1Q 2020 2Q 2020 (down 4.0% Y/Y) $13.1B Segment EBITDA* ($B) Wireless service revenue 46.5% 45.3% 46.4% 47.0% Segment (down 2.7% Y/Y) EBITDA 39.9% Margin
Slide 10: Business 2Q 2020 Key Metrics
Business 2Q 2020 Wireless retail postpaid net adds* (K) Key Metrics 326 412 411 475 280 Y/Y Growth (14.1%) 1.9M Postpaid device activations 2Q 2019 3Q 2019 4Q 2019 1Q 2020 2Q 2020 • Gross adds down 3.9% • Phone gross adds down 16.6% Wireless retail postpaid phone net adds* (K) • Upgrade rate of 2.7%
Slide 11: Business 2Q 2020 Financial Summary
Business 2Q 2020 Total revenue ($B) $7.8 $7.9 $8.1 Financial $7.7 $7.5 $0.8 $0.8 $0.8 $0.8 $0.8 $1.5 $1.5 $1.5 $1.5 Summary $1.5 Y/Y Growth $2.7 $2.7 $2.7 $2.6 $2.6 (3.7%) $3.1 $7.5B $2.8 $2.9 $2.8 $2.6 Total revenue 2Q 2019 3Q 2019 4Q 2019 1Q 2020 2Q 2020 Wholesale Public Sector Global Enterprise S
Slide 12: Verizon Media Group 2Q 2020
Verizon Media Group 2Q 2020 Total revenue ($B) (2.9)% (2.0)% (0.1)% (4.0)% Launched Verizon Media Y/Y Immersive platform to power (24.5)% Change the future of 5G advertising content $1.8 $1.8 $2.1 $1.7 $1.4 Significant partnerships wins with leading content and 2Q 2019 3Q 2019 4Q 2019 1Q 2020 2Q 202
Slide 13: Total Wireless Results
Total Wireless Results Total revenue ($B) Retail postpaid net adds* (K) $25.2 1,263 $22.7 $23.5 $22.6 $2.0 $2.2 $21.7 Wireless Other $1.7 $2.1 $2.0 $6.8 Other 472 $4.7 $5.1 $4.1 $3.8 605 Phone Wireless 452 Equipment 160 352 $16.2 $16.4 $16.3 $16.4 $15.9 208 791 445 (50) 179 Wireless 18 244 173 Servi
Slide 14: Consolidated Cash Flow Summary
Consolidated Cash Flow Summary ($ in billions) 1H 2019 1H 2020 Cash flow from operations $15.8 $23.6 Capital expenditures $8.0 $9.9 Free cash flow* $7.9 $13.7 Dividends paid $5.0 $5.1 Total debt $113.4 $112.8 Unsecured debt $102.1 $102.2 Cash and cash equivalents $1.9 $7.9 Net unsecured debt* $100.2
Slide 15: COVID-19 Environment
COVID-19 Environment Small and Medium (Y/Y Change) Consumer Global Enterprise Public Sector Business (Y/Y Change) 2Q 2020 June 2020 2Q 2020 June 2020 2Q 2020 June 2020 2Q 2020 June 2020 Postpaid gross adds (29%) (21%) (34%) (23%) (26%) (8%) 125% 48% Phone churn (21 bps) (18 bps) (5 bps) 4 bps 1 bp 1
Slide 16: 2020 Guidance
2020 Guidance Reconfirming prior guidance 2020 Adjusted EPS growth* (2%) — 2% Depreciation and amortization Relatively flat Y/Y Interest expense Slightly lower than 2019 levels Adjusted effective tax rate* 23% — 25% Capital expenditures $17.5B — $18.5B Note: Consolidated revenue guidance withdrawn o
Slide 17: 2H Execution Focused on Extending Leadership & Growth
2H Execution Focused on Extending Leadership & Growth 2H 2020 Execution — Entering 2H 2020 with Strong Fundamentals Network-as-a-Service at Scale 1 LTE network leading in 3rd party tests 5G adoption 2 Customer innovation delivering results Network monetization 3 Key partnerships expand ecosystem Nex
Slide 18: Supplemental Information 2Q 2020
Supplemental Information 2Q 2020 © 2020 Verizon VZQTR20FIN
Slide 19: Selected Metrics
Selected Metrics Consumer 2Q 2020 Wireless retail postpaid phone gross adds Y/Y change (%) (25.7%) Postpaid smartphone net adds* (K) 199 Tablet net adds* (K) (97) Upgrade rate (%) 3.9% * Includes certain adjustments. © 2020 Verizon VZQTR20FIN 19 VlpHU09DSUQyMDE4UTQ =
Slide 20: Slide 20
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