Verizon Communications Inc. · NYSE:VZ
Verizon Communications — Q4 2014 Earnings Presentation
14 slides from Verizon Communications's earnings presentation, Jan 22, 2015
Slide 1: 4th Quarter 2014 Earnings Results
VlpHU09DSUQyMDE0UTM 4th QUARTER 2014 EARNINGS RESULTS Fran Shammo Chief Financial Officer January 22, 2015 VlpHU09DSUQyMDE0UTM=
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: Earnings Summary
CONSOLIDATED Earnings Summary 4Q ’14 2014 Reported ($0.54) $2.42 Add: Pension remeasurement and severance $1.12 $1.17 Early debt redemption and other costs $0.13 $0.28 Purchase transaction costs ̶ $0.07 Less: Omnitel gain on sale ̶ $0.47 Gain on sale of wireless licenses ̶ $0.11 Adjusted* $0.71 $3.3
Slide 4: Overview
CONSOLIDATED Overview • Strong operating and financial performance • Consistent investment in networks and platforms • High-quality wireless connections growth and profitability • FiOS driving consistent growth in consumer market • Strong free cash flow generation • Increased dividend by 3.8% Delive
Slide 5: Financial Summary
CONSOLIDATED Financial Summary Total Revenue ($B) $120.6 $127.1 5.4% • Total revenue growth excluding Y/Y Growth divested public sector business: – 4Q’14 of 7.3% Y/Y – 2014 of 5.7% Y/Y 2013 2014 ■ Wireless ■ Wireline • 2014 M2M and telematics revenue of $586M, up 46.6% Y/Y Adjusted EPS* • 2014 Adjus
Slide 6: Cash Flow Summary
CONSOLIDATED Cash Flow Summary ($ in billions) 4Q ’14 2014 Cash flow from operations $7.5 $30.6 Capital expenditures $4.6 $17.2 Free cash flow $2.9 $13.4 Dividends paid $2.2 $7.8 Total debt $113.3 $113.3 Net debt to adjusted EBITDA 2.4x 2.4x Strong cash generation funds investment and shareowner ret
Slide 7: Wireless: Revenue & Profitability
WIRELESS Revenue & Profitability Total Revenue ($B) $81.0 $87.6 8.2% Y/Y Growth • Service revenue plus EDGE $69.0 $72.6 installment billings up 5.2% Y/Y in 4Q ’14 and 6.6% Y/Y in 2014 2013 2014 ■ Service Revenue ■ Other Revenue • 4Q’14 phone activations on EDGE were about 25% Segment EBITDA ($B) $34
Slide 8: Wireless: ARPA
WIRELESS ARPA Retail Postpaid ARPA + EDGE Billings • ARPA growth of 3.9% Y/Y for $157.42 $163.93 $162.98 2014; ARPA plus EDGE 3.5% installment billings up 5.3% Y/Y Y/Y Growth for 2014 $157.21 $161.24 $158.82 • 35.6M retail postpaid accounts, 4Q '13 3Q '14 4Q '14 up 1.5% Y/Y ■ Retail Postpaid ARPA ■
Slide 9: Wireless: Connections / Net Adds / Churn
WIRELESS Connections / Net Adds / Churn Retail Connections (M) 106.2 108.2 102.8 5.3% Y/Y Growth • 5.4M retail postpaid gross adds 96.8 100.1 102.1 in 4Q ’14, up 25.5% Y/Y 4Q '13 3Q '14 4Q '14 • 2.0M retail postpaid net adds in ■ Retail Postpaid ■ Retail Prepaid 4Q ’14* • Retail postpaid churn of 1.
Slide 10: Wireless: Devices / 4G LTE
WIRELESS Devices / 4G LTE Retail Postpaid Device Activations (M) 15.3 • 4Q ’14 Retail postpaid device 11.5 11.1 11.7 9.9 activations up 34% Y/Y • Smartphone penetration of 79%, up from 70% a year ago 4Q '13 1Q '14 2Q '14 3Q '14 4Q '14 ■ Smartphones ■ Other • Industry leading in 4G LTE connections 4G
Slide 11: Wireline: Mass Markets
WIRELINE Mass Markets Consumer Revenue ($B) $3.8 $3.9 $4.0 • 10th consecutive quarter of 4.1% over 4% consumer revenue Y/Y Growth growth Y/Y • FiOS now 77% of consumer revenue 4Q '13 3Q '14 4Q '14 – FiOS consumer revenue growth of 11.1% Y/Y in 4Q ’14 Consumer FiOS Internet Subscribers • FiOS Interne
Slide 12: Wireline: Revenue & Profitability
WIRELINE Revenue & Profitability Total Revenue ($B) $38.6 Y/Y Growth • Total FiOS revenue grew $38.4 (0.5%) 11.6% Y/Y in 4Q ’14 • Global Enterprise revenue down 4.6% Y/Y in 4Q ’14 – Strategic services revenue up 2013 2014 1.5% Y/Y in 4Q ’14 • Global Wholesale revenue Segment EBITDA ($B) down 5.8% Y/
Slide 13: 2015 Priorities
CONSOLIDATED 2015 Priorities • Deliver strong operating and financial performance • Consistently invest in networks and platforms • Focus on new revenue streams • Monetize non-strategic assets • Generate strong free cash flow • Return value to shareowners Confident in ability to execute, grow profit
Slide 14: 4th Quarter 2014 Earnings Results
4th QUARTER 2014 EARNINGS RESULTS Fran Shammo Chief Financial Officer January 22, 2015 VlpHU09DSUQyMDE0UTM=
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