Verizon Communications Inc. · NYSE:VZ
Verizon Communications — Q3 2018 Earnings Presentation
16 slides from Verizon Communications's earnings presentation, Oct 23, 2018
Slide 1: 3rd Quarter 2018 Earnings Results
3rd Quarter 2018 Earnings Results October 23, 2018
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: Consistent earnings performance
Consolidated Consistent earnings performance 3Q ’18 Reported EPS $1.19 Includes ~$0.21 due to the net impact of tax reform and ASC 606* Special items: Early debt redemption costs $0.09 Acquisition and integration-related charges $0.02 Severance, pension and benefits credits ($0.08) Adjusted EPS** $1
Slide 4: Supplemental Information: Impact of ASC 606
Supplemental Information Impact of ASC 606* ($ in millions) ASC 606 Impact w/o ASC 606 Impact 3Q ’18 2018 YTD 3Q ’18 2018 YTD 3Q ’18 2018 YTD Consolidated Total revenue $32,607 $96,582 ($75) ($264) $32,532 $96,318 Y/Y Growth 2.8% 4.9% 2.6% 4.6% Adjusted EBITDA** $12,182 $35,825 ($367) ($1,248) $11,8
Slide 5: Strategic positioning
Strategic positioning • 5G Home launch Network Leadership • Award-winning 4G LTE • Intelligent Edge Network • High-quality base Customer relationships • Service revenue growth • Customer loyalty • 4G / 5G Growth opportunities • Convergent media • Verizon Connect & IoT • Profitable growth Long-term v
Slide 6: Extending network leadership position
Extending network leadership position Network & Technology Continued network leadership confirmed by 3rd party testing results Launched 5G Home; world’s first 5G ultra- wideband commercial product Achieving 5G milestones Positioned for broad scale 5G deployment © 2018 Verizon VlpHU09DSUQyMDE4UTM= 6
Slide 7: Consolidated: Generating profitable results
Consolidated Generating profitable results Total Revenue ($B) $31.7 $32.2 $32.6 Total revenue of $32.6B, up 2.8% Y/Y in 3Q ’18 • Excluding impact of ASC 606, total revenue of $32.5B, up 2.6% Y/Y in 3Q ’18 3Q ’18 Adjusted EBITDA of $12.2B* 3Q '17 2Q '18 3Q '18 Y/Y Growth 2.8% • Excluding impact of AS
Slide 8: Consolidated: Strong cash generation
Consolidated Strong cash generation ($ in billions) 2017 YTD 2018 YTD Cash flow from operations $16.5 $26.2 Capital expenditures $11.3 $12.0 Free cash flow* $5.2 $14.2 Dividends paid $7.1 $7.3 Total debt $117.5 $112.9 Total asset-backed long-term borrowings $7.9 $9.2 Net debt to adjusted EBITDA** 2.
Slide 9: Wireless: Strong revenue and profitability
Wireless Strong revenue and profitability Total Revenue ($B) Total revenue of $23.0B in 3Q ’18 $21.6 $22.4 $23.0 • Excluding impact of ASC 606, total revenue of $22.9B, up 6.1% Y/Y ■ Service Revenue ■ Other Revenue Service revenue of $16.0B, up 0.8% Y/Y in 3Q ’18 • Excluding impact of ASC 606, 3Q '1
Slide 10: Wireless: Network leadership driving customer demand
Wireless Network leadership driving customer demand Retail Connections (M) 115.3 116.5 116.9 ■ Retail Postpaid 112.1 ■ Retail Prepaid 510K postpaid smartphone net 109.7 111.6 adds in 3Q ’18 295K phone net adds in 3Q ’18 3Q '17 2Q '18 3Q '18 Y/Y Growth 1.4% 515K retail postpaid net adds in 3Q ’18* Re
Slide 11: Wireline: Broadband driving Fios revenue growth
Wireline Broadband driving Fios revenue growth Consumer Markets Revenue ($B) Total Wireline revenue excluding $3.2 $3.1 $3.1 impact of ASC 606 of $7.4B, down 3.7% Y/Y in 3Q ’18 • Consumer Markets revenue excluding impact of ASC 606 of $3.1B, down 1.8% Y/Y in 3Q ’18 3Q '17 2Q '18 3Q '18 Y/Y Growth (2
Slide 12: Media and IoT: Positioning for future growth
Media and IoT Positioning for future growth 3Q ’18 revenue of $1.8B, down Key initiatives 6.9% Y/Y • Ad platform integration • Search and desktop declining • Content focus • Growth in mobile usage and video products Sports News Finance Entertainment © 2018 Verizon VlpHU09DSUQyMDE4UTM= 12
Slide 13: Confident in strategy and priorities
Confident in strategy and priorities Leading in technology development and network performance Strong wireless service revenue growth and customer retention Transforming the cost structure Pre-positioning for future growth opportunities Allocating capital consistently for long-term value Delivering
Slide 14: 3Q '18 Supplemental Information
3Q ’18 Supplemental Information
Slide 15: Selected metrics
Selected metrics Wireless 3Q ’18 Retail postpaid upgrade rate (%) 5.0% Postpaid gross adds (M) 4.0 Postpaid smartphone net adds (000) 510 Postpaid phone net adds (000) 295 Postpaid tablet net losses (000) (80) Wireline Fios consumer revenue growth rate Y/Y (%) 1.1%* * Excludes impact of ASC 606. © 2
Slide 16: Verizon
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