Verizon Communications Inc. · NYSE:VZ
Verizon Communications — Q3 2016 Earnings Presentation
15 slides from Verizon Communications's earnings presentation, Oct 20, 2016
Slide 1: 3rd Quarter 2016 Earnings Results
3rd Quarter 2016 Earnings Results Fran Shammo Chief Financial Officer October 20, 2016
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: Important Additional Information and Where to Find It
Important Additional Information and Where to Find It On September 9, 2016, Yahoo! Inc. ("Yahoo") filed with the Securities and Exchange Commission (the "SEC") a preliminary proxy statement regarding the proposed sale of Yahoo's operating business to Verizon Communications Inc. ("Verizon") and relat
Slide 4: Earnings Summary
Consolidated Earnings Summary 3Q ’16 Reported EPS $0.89 Add: Pension remeasurement and severance $0.12 Adjusted EPS* $1.01 * Adjusted for non-operational items Note: Amounts may not add due to rounding Strong earnings performance © 2016 Verizon 4
Slide 5: 3Q '16 Overview
3Q ’16 Overview Executing in a highly competitive market Positioning for future growth Delivering strong financials, financial flexibility and dividends Transforming in challenging environment © 2016 Verizon 5
Slide 6: Operating & Financial Summary
Consolidated Adjusted EPS* Operating & $1.04 Adjusted $1.01 Financial Summary $0.94 Y/Y Growth (2.9%) $0.99 $0.89 3Q ’16 Total revenue excluding $0.17 divested Wireline properties 3Q '15 2Q '16 3Q '16 ■ Reported ■ Non-operational items down 2.9% Y/Y 3Q ’16 Adjusted EBITDA of Total Revenue ($B) $11.3
Slide 7: Cash Flow Summary
Consolidated Cash Flow Summary ($ in billions) 1Q ’16 2Q ’16 3Q ’16 2016 YTD Cash flow from operations $7.4 $5.4 $4.8 $17.6 Capital expenditures $3.4 $3.9 $4.1 $11.4 Free cash flow $4.0 $1.5 $0.7 $6.2 Asset-backed long-term borrowings – – $2.6 $2.6 Dividends paid $2.3 $2.3 $2.3 $6.9 Total debt $109.
Slide 8: Wireless Revenue & Profitability
Wireless Total Revenue ($B) Revenue & $23.0 $22.1 Profitability $21.7 Y/Y Growth (3.9%) Service revenue plus device payment plan billings up 2.3% Y/Y in 3Q ’16 3Q ’16 segment EBITDA 3Q '15 2Q '16 3Q '16 margin on total revenue of ■ Service Revenue ■ Other Revenue 44.9% up 170 bps Y/Y Segment EBITDA
Slide 9: Wireless Net Adds/Churn/Connections
Wireless Retail Postpaid Net Adds* (000) Net Adds/Churn/ Connections 1,289 430 Y/Y Growth 615 (65.7%) 86 442 442K retail postpaid net adds in 3Q ’16* (36) 3Q ’15 2Q ’16 3Q ’16 • 357K new 4G LTE smartphones ■ Other Retail Postpaid Net Adds ■ Total Phone Net Adds • Retail postpaid churn of Retail Conn
Slide 10: Wireless Devices / 4G LTE
Wireless Retail Postpaid Device Activations (M) Devices / 4G LTE 13.4 11.6 10.7 9.9 9.5 Smartphone penetration of 86%, up from 82% a year ago Added 1.7M 4G LTE devices in 3Q '15 4Q '15 1Q '16 2Q '16 3Q '16 ■ Smartphones ■ Other 3Q ’16 • About 97% of smartphones 4G LTE Devices (M) are 4G LTE 86.9 88.
Slide 11: Wireline Mass Markets
Wireline Consumer Revenue ($B) Mass Markets $3.2 $3.2 $3.2 0.2% Y/Y Growth Fios consumer revenue growth of 4.2% Y/Y in 3Q ’16 Fios Internet subscribers 3Q '15 2Q '16 3Q '16 • 90K net adds • 40.4% penetration Consumer Fios Internet Subscribers Fios Video subscribers • 36K net adds • 34.5% penetration
Slide 12: Wireline Revenue & Profitability
Wireline Total Revenue ($B) Revenue & Profitability $8.0 $7.8 $7.8 Y/Y Growth (2.3 %) Total Fios revenue grew 4.4% Y/Y in 3Q ’16 Global Enterprise revenue 3Q '15 2Q '16 3Q '16 down 3.4% Y/Y in 3Q ’16 Global Wholesale revenue Segment EBITDA ($B) down 3.9% Y/Y in 3Q ’16 $1.7 3Q ’16 segment EBITDA of $
Slide 13: Strategic Positioning for Growth
Strategic Positioning for Growth Network Leadership Content LTE Advanced deployment Unique digital content Network cloud architecture and densification go90 average daily usage over 30 minutes per user 5G wireless technology: fixed and mobile Less than 20% of traffic served on our network 5G Digital
Slide 14: Summary
Summary Executing in competitive environment Consistently investing in networks and platforms Positioning for the future Delivering strong financials and improving the balance sheet Returning value to shareholders Confident in ability to perform and transform © 2016 Verizon 14
Slide 15: 3rd Quarter 2016 Earnings Results
3rd Quarter 2016 Earnings Results Fran Shammo Chief Financial Officer October 20, 2016
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