Verizon Communications Inc. · NYSE:VZ
Verizon Communications — Q1 2014 Earnings Presentation
13 slides from Verizon Communications's earnings presentation, Apr 24, 2014
Slide 1: 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 operations. Forward-look
Slide 2: Consolidated Earnings Summary: 1Q '14 EPS
1Q ’14 EPS Reported $1.15 Less: Omnitel Gain on Sale $0.55 Add: Debt redemption Purchase transaction costs $0.17 $0.08 Adjusted $0.84 Note: Results above are adjusted for non-operational items. Amounts may not add due to rounding. Strong earnings per share CONSOLIDATED Earnings Summary
Slide 3: Illustrative Non-GAAP Consolidated Earnings: Full Ownership of VZW
1Q ’14 * Net Income ($B) EPS Adjusted Earnings $2.9 $0.84 Add: 45% VZW Income (1/1/14 – 2/21/14) Tax effect $1.9 ($0.8) $1.2 Less: Transaction related costs (1/1/14 – 2/21/14) Tax effect ($0.4) $0.2 ($0.3) Adjusted to show full 1Q ’14 VZW ownership $3.8 $0.91** * Results above are adjusted for non-o
Slide 4: Consolidated 1Q '14 Overview
CONSOLIDATED 1Q ’14 Overview Double-digit growth in operating income and earnings per share for past five quarters Strongest consolidated revenue growth in past five quarters Industry-leading wireless service revenue growth and profitability Growth in consumer revenue driven by FiOS Solid cash flow
Slide 5: Consolidated 1Q '14 Financial Summary
4.8% 23.5% Consolidated revenue of $30.8B, up 4.8% Y/Y – Revenue growth across all strategic areas 1Q ’14 EBITDA margin of 36.7%, up 160 bps Y/Y 1Q ’14 adjusted EPS of $0.84, up 23.5% Y/Y; reported EPS of $1.15 Y/Y Growth $29.4 $31.1 Wireline Wireless Total Revenue ($B) $30.8 Adjusted EPS $0.68 $0.6
Slide 6: Consolidated Cash Flow
1Q ’13 1Q ’14 1Q ’14 cash flow of $7.1B 1Q ’14 Capex/Revenue of 13.5% 1Q ’14 free cash flow of $3.0B Cash flow from operations $7.5 $7.1 Capital expenditures $3.6 $4.2 Free cash flow $3.9 $3.0 Total Debt $52.9 $109.8 Net Debt to Adjusted EBITDA 1.2x 2.5x Cash Flow Summary ($B) Solid cash flow and ca
Slide 7: Wireless Revenue & Profitability
Sustained strong service revenue growth in 1Q ’14 Total revenue growth of 6.9% Y/Y EBITDA growth of 11.3% Y/Y EBITDA service margin expands to 52.1%, up 170 bps Y/Y Service Revenue ($B) EBITDA Service Margin % Segment EBITDA ($B) WIRELESS Revenue & Profitability Disciplined execution drives growth i
Slide 8: Wireless ARPA
Retail postpaid ARPA of $159.67, up 6.3% Y/Y – 50% of postpaid accounts on More Everything Plans – Smartphone penetration of 72%, up from 61% a year ago 35.1M retail postpaid accounts – 2.77 connections per account Retail Postpaid ARPA More Everything Accounts More Everything % of postpaid accounts
Slide 9: Wireless Connections / Net Adds / Churn
539K retail postpaid net adds in 1Q ’14 including 866K 4G smartphones* Retail postpaid tablet net adds of 634K in 1Q ’14, tablet base now at 4.3M 6.5% of retail postpaid base upgraded in 1Q ’14 Retail postpaid churn of 1.07% in 1Q ’14 * Excludes acquisitions and adjustments Retail Net Adds* (000) Re
Slide 10: Wireless Devices / 4G LTE
85% of device activations in 1Q ’14 were phones – 7.6M smartphones activated in 1Q ’14 8.1M 4G LTE device activations in 1Q ’14 Wireless 4G LTE network: – About 73% of total data traffic currently on 4G LTE network – Industry leading in 4G LTE connections Retail Postpaid Device Activations (M) 4G LT
Slide 11: Wireline Mass Markets
6.2% consumer revenue growth Y/Y; th consecutive quarter of over 4% growth Y/Y FiOS now 74% of consumer revenue – 8.7% Y/Y growth in triple play customers FiOS Internet subscribers – 6.2M subscribers, 98K net adds – 39.7% penetration FiOS Video subscribers – 5.3M subscribers, 57K net adds – 35.0% pe
Slide 12: Wireline Revenue & Profitability
FiOS revenue grew 15.5% Y/Y Global Enterprise revenue down 4.4% Y/Y – Strategic services revenue growth of 1.8% Y/Y Total revenue of $9.8B in 1Q ’14, down 0.4% Y/Y EBITDA margin of 22.3% in 1Q ’14 Total Revenue ($B) EBITDA Margin % Segment EBITDA ($B) Focus on improving long-term profitability WIREL
Slide 13: Consolidated Summary: Build on 1Q '14 Momentum
Continue to invest in network and platforms Focus on margin expansion and profitable growth Solid earnings momentum and cash flow generation Disciplined capital program across entire business Capitalize on strategic investments CONSOLIDATE D Summary Build on 1Q ’14 momentum
Verizon Communications — Q1 2014 Earnings Presentation on 6ix