Verizon Communications Inc. · NYSE:VZ
Verizon Communications — Q1 2020 Earnings Presentation
23 slides from Verizon Communications's earnings presentation, Apr 24, 2020
Slide 1: 1Q 2020 Earnings
Exhibit 99.2 1Q 2020 Earnings April 24, 2020 © 2020 Verizon
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 1Q 2020 Reported EPS $1.00 Special items: Net pension remeasurement charge $0.03 Loss on spectrum license auction $0.22 Adjusted EPS* $1.26 Note: Amounts may not add due to rounding. * Non-GAAP measure. © 2020 Verizon 3
Slide 4: 1Q 2020 Adjusted EPS
1Q 2020 Adjusted EPS $0.09 ($0.03) $1.26 $1.20 1Q 2020 5.0% Y/Y Adjusted EPS* Growth includes ($0.04) COVID-19 impact 1Q19 Operational Commission 1Q20 Adjusted EPS* performance expense deferral** Adjusted EPS* Strong operational performance drives Adjusted EPS* growth * Non-GAAP measure. ** ASC 606
Slide 5: Verizon’s COVID-19 Response
Verizon’s COVID-19 Response Keeping our Serving our Helping our Taking Proactive Employees Safe Customers Communities Financial Measures ~85% of employees Pledge to “Keep Americans Feed front line healthcare Increased capex guidance working remotely; Connected”; 15GBs additional worker initiatives /
Slide 6: COVID-19: Network Usage Patterns
COVID-19: Network Usage Patterns Peak value observed during Recent week- COVID-19 vs. baseline* over-week change** Wireless data +9% +1.6% Mobile handoffs -35% +1.3% VoLTE call MoU +38% -4.7% VoLTE call attempts >800M per day -3.9% Average VoLTE call time +45% -0.5% SMS text messages >9B per day -3.
Slide 7: Wireless Network Capacity vs. Busy Hour Usage
Wireless Network Capacity vs. Busy Hour Usage (excludes AWS-3 temporary spectrum) COVID-19 Network Capacity Capacity margin Busy Hour Usage Jan 19 Mar 19 May 19 Jul 19 Sep 19 Nov 19 Jan 20 Mar 20 Network capacity handling COVID-19 demands © 2020 Verizon 7
Slide 8: 1Q 2020 Progress and Highlights
1Q 2020 Progress and Highlights Progress Toward 2020 Commitments Financial Highlights Strengthen & Grow Core Business Consolidated • Driving digital sales through enhanced experiences • Strong wireless service revenue growth • Strengthened mmWave spectrum holdings through Auction 103 • 5% adjusted e
Slide 9: Consolidated Financial Summary
Consolidated Total revenue ($B) 1Q 2020 $34.8 Financial $32.1 $32.1 $32.9 $31.6 Y/Y Growth Summary (1.6%) $31.6B 1Q 2019 2Q 2019 3Q 2019 4Q 2019 1Q 2020 Total revenue (down 1.6% Y/Y) Adjusted EBITDA* ($B) 37.2% 37.7% 36.6% 37.7% $11.9B Margin %* Adjusted EBITDA* 32.0% (Adjusted EBITDA margin of 37.7
Slide 10: Consumer Key Metrics
Consumer Wireless retail connections (M) 1Q 2020 93.9 Key Metrics 94.1 93.9 94.5 93.9 Prepaid 89.6 89.6 89.7 90.5 89.9 Postpaid 5.6M Postpaid device activations 1Q 2019 2Q 2019 3Q 2019 4Q 2019 1Q 2020 (525K) Wireless retail postpaid phone net adds (K) Retail postpaid net adds* 0.81% 0.79% 0.83% 0.72
Slide 11: Consumer Financial Summary
Consumer Total revenue ($B) 1Q 2020 $24.2 Financial $22.1 $22.0 $22.7 $21.8 Y/Y Growth Summary (1.7%) $21.8B Total revenue 1Q 2019 2Q 2019 3Q 2019 4Q 2019 1Q 2020 (down 1.7% Y/Y) $13.5B Segment EBITDA* ($B) Wireless service revenue 45.8% 46.5% 45.3% 46.4% Segment (up 0.9% Y/Y) EBITDA 39.9% Margin %*
Slide 12: Business Key Metrics
Business Wireless retail postpaid net adds (K) 1Q 2020 475 412 411 326 Key Metrics 264 Y/Y Growth 79.9% 2.4M Postpaid device activations 1Q 2019 2Q 2019 3Q 2019 4Q 2019 1Q 2020 • Gross adds up 28.4% • Phone gross adds up 25.0% Wireless retail postpaid phone net adds (K) • Upgrade rate of 3.6% 1.02%
Slide 13: Business Financial Summary
Business Total revenue ($B) 1Q 2020 $7.7 $7.8 $7.9 $8.1 $7.7 $0.8 $0.8 $0.8 $0.8 $0.8 Financial $1.5 $1.5 $1.5 $1.5 $1.5 $2.7 $2.7 $2.7 $2.7 $2.6 Y/Y Growth Summary (0.5%) $2.7 $2.8 $2.9 $3.1 $2.8 $7.7B 1Q 2019 2Q 2019 3Q 2019 4Q 2019 1Q 2020 Wholesale Public Sector Global Enterprises Small and Tota
Slide 14: Verizon Media Group
Verizon Media Group 1Q 2020 Total revenue ($B) (0.1%) (2.9%) (2.0%) (4.0%) Y/Y Advertising and search revenue (7.2%) Change lower due to stay-at-home orders $1.8 $1.8 $1.8 $2.1 $1.7 #PayItForwardLIVE campaign to support small businesses 1Q 2019 2Q 2019 3Q 2019 4Q 2019 1Q 2020 Coronavirus Hub driving
Slide 15: Total Wireless Results
Total Wireless Results Total revenue ($B) Retail postpaid net adds (K) $25.2 1,263 $22.7 $22.7 $23.5 $22.6 Wireless $2.2 472 $1.7 $1.7 $2.0 $2.1 other $4.9 $4.7 $5.1 $6.8 $4.1 605 452 Other Wireless 63 160 equipment 208 791 Phone 106 445 (50) $16.1 $16.2 $16.4 $16.3 $16.4 244 18 Wireless Service (43
Slide 16: Consolidated Cash Flow Summary
Consolidated Cash Flow Summary ($ in billions) 1Q 2019 1Q 2020 Cash flow from operations $7.1 $8.8 Capital expenditures $4.3 $5.3 Free cash flow* $2.8 $3.6 Dividends paid $2.5 $2.5 Total debt $113.7 $117.7 Unsecured debt $103.3 $104.7 Cash balance $2.3 $7.0 Net unsecured debt* $101.0 $97.7 Net unsec
Slide 17: COVID-19 Early Environment
COVID-19 Early Environment Small and Medium Global Enterprise, Public Consumer Business Sector and Other March 15 – April 15 (Y/Y Change) March 15 – April 15 March 15 – April 15 Postpaid gross adds (49%) (24%) 163% Phone churn (23 bps) (3 bps) (35 bps) Upgrades (41%) (45%) (19%) Postpaid device acti
Slide 18: 2020 Guidance
2020 Guidance Initial Guidance Revised (provided on January 30) Low-to-mid single digit Consolidated revenue WITHDRAWN percentage growth Depreciation and amortization Relatively flat Y/Y UNCHANGED Slightly lower than 2019 Interest expense UNCHANGED levels Adjusted effective tax rate* 23% – 25% UNCHA
Slide 19: Liquidity Overview
Liquidity Overview 2Q 2020 $7B of cash at end of 1Q 2020 Beginning cash (April 1) $7.0B • Activated liquidity management playbook Maturities • Manageable non-recurring 2Q 2020 cash obligations Unsecured bonds $1.0B • 2020 maturities concentrated in 2Q Preferred shares repaid (April) $1.7B • Pension:
Slide 20: Verizon well-positioned to execute in the near and long-term
Verizon well- positioned to execute in Verizon 2.0 transformation, leadership, and strategy delivering results the near and long-term Multi-pronged COVID-19 response supports all key stakeholder groups Flexible, best-in-class network poised to capture 5G opportunities Disciplined capital allocation
Slide 21: Supplemental Information 1Q 2020
Supplemental Information 1Q 2020 © 2020 Verizon
Slide 22: Selected Metrics Consumer
Selected Metrics Consumer 1Q 2020 Wireless retail postpaid phone gross adds Y/Y change (%) (12.8%) Postpaid smartphone net adds (K) (167) Tablet net adds (K) (227) Upgrade rate (%) 3.7% © 2020 Verizon 22
Slide 23: © 2020 Verizon
© 2020 Verizon
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