Verizon Reports Record Revenue Growth in 4Q, Fueled by Strong Demand for Wireless, FiOS and Strategic Services

Verizon Generates Strong Cash Flows, 18.2 Percent Shareholder Returns in 2011; 4Q Earnings Impacted by Non-Cash Pension Items

NEW YORK, Jan. 24, 2012 /PRNewswire/ --

4Q 2011 HIGHLIGHTS

Consolidated

  • 7.7 percent year-over-year quarterly revenue growth in 4Q, a company record.
  • A loss of 71 cents in diluted earnings per share (EPS), impacted by non-cash pension items, compared with earnings of93 cents per share in 4Q 2010.
  • 52 cents per share in adjusted EPS (non-GAAP), which excludes $1.23 per share in non-operational items, compared with 54 cents in adjusted EPS in 4Q 2010.

Wireless

  • $18.3 billion in total 4Q revenues, up 13.0 percent year over year; data revenues of $6.3 billion, up 19.2 percent, representing 41.6 percent of service revenues; $15.1 billion in service revenues, up 6.4 percent.
  • 1.5 million retail net additions (excluding acquisitions and adjustments), largest increase in three years, includes 1.2 million retail postpaid net customer additions; 108.7 million total connections, includes 92.2 million retail customers.
  • 2.6 percent growth in retail service ARPU over 4Q 2010; retail postpaid data ARPU up 14.3 percent.
  • 23.7 percent operating income margin; 42.2 percent Segment EBITDA margin on service revenues (non-GAAP).

Wireline

  • 201,000 FiOS Internet and 194,000 FiOS Video net additions, with increased sales penetration for both products; net increase of 98,000 broadband connections from 3Q 2011.
  • 8.5 percent year-over-year increase in consumer ARPU; FiOS ARPU was more than $148 per month.
  • 14.7 percent increase in strategic services revenues, representing 51 percent of global enterprise revenues.
  • 3.0 percent operating income margin; 23.8 percent Segment EBITDA margin (non-GAAP), compared with 23.5 percent in 4Q 2010 and 21.4 percent in 3Q 2011.

Verizon Communications Inc. (NYSE, Nasdaq: VZ) posted the highest year-over-year quarterly revenue growth in the company's 11-year history in fourth-quarter 2011, fueled by continued strong demand for Verizon Wireless services and handsets, FiOS fiber-optic services, and strategic business products and services.

'Great Momentum for 2012'

"Verizon finished 2011 very strong, both in terms of revenue growth and by delivering an 18.2 percent total return to our shareholders for the full year, and the company has great momentum for 2012," said Lowell McAdam, Verizon chairman, president and chief executive officer.  "Verizon Wireless produced particularly strong growth in the fourth quarter.  While that diluted wireless margins in the short term, it is good news for revenue and margin growth over the long term, particularly given our leadership in the rapidly developing 4G LTE ecosystem."

McAdam added: "Wireline margins recovered from third-quarter pressures, and we expect wireline margin expansion in 2012.  With recent strategic moves and our investments in FiOS, LTE, and global IP and cloud-based strategic services, Verizon has set the stage for accelerated growth across our business units, and we look to continue to build significant value for shareholders in 2012."

Verizon's total shareholder return is a combination of stock-price appreciation and dividend payments.  Regarding recent strategic moves, Verizon last month strengthened its ability to provide fully integrated solutions by creating Verizon Enterprise Solutions, a sales and marketing organization, to harness all of Verizon's solutions for business and government customers globally.  In addition, Verizon Wireless announced agreements to purchase AWS (Advanced Wireless Spectrum) licenses, an important step toward meeting customers' needs for wireless data and broadband services.

4Q and Full-Year Earnings Results

Due primarily to the impact of previously announced non-cash pension items, Verizon reported a loss of 71 cents in EPS in fourth-quarter 2011, compared with earnings of 93 cents per share in fourth-quarter 2010.

Adjusted fourth-quarter 2011 earnings (non-GAAP) of 52 cents per share exclude $1.20 per share, or $3.4 billion after-tax, due to the actuarial valuation of Verizon's benefit plans, and 3 cents per share for the early extinguishment of debt.  This annual valuation adjustment, resulting from changes in actuarial assumptions, is in accordance with a Verizon accounting policy adopted last year.  Comparable adjusted fourth-quarter 2010 earnings were 54 cents per share, excluding the impact of non-operational items, the largest of which was a gain from benefit-plan valuation of 44 cents per share.

On an annual basis, Verizon reported 85 cents in 2011 EPS, compared with 90 cents per share in 2010.  Adjusted annual EPS (non-GAAP) was $2.15 in 2011, compared with $2.08 on a comparable basis (non-GAAP, excluding results from divested businesses) in 2010.

Consolidated Revenue Growth, Strong Cash Flows

In fourth-quarter 2011, Verizon's total operating revenues were $28.4 billion on a consolidated basis, an increase of 7.7 percent compared with fourth-quarter 2010.  For full-year 2011, revenues totaled $110.9 billion, a 4.0 percent increase compared with 2010, when results included revenues from operations that have since been divested.  On a comparable basis (non-GAAP), Verizon's 2011 full-year revenues increased 6.2 percent compared with 2010.

Consolidated EBITDA (earnings before interest, taxes, depreciation and amortization) totaled $29.4 billion in 2011.  On an adjusted basis (non-GAAP), EBITDA increased by more than $950 million in 2011 compared with 2010.

Cash flow from operating activities totaled $29.8 billion in 2011, and capital expenditures totaled $16.2 billion.  Free cash flow (non-GAAP, cash flow from operations less capex) was more than $13.5 billion in 2011.  From this total, Verizon returned $5.6 billion in quarterly dividends to shareholders in 2011, as the company's Board of Directors approved a fifth consecutive year of dividend increases.

Verizon Wireless Delivers Strong Customer and Revenue Growth

In fourth-quarter 2011, Verizon Wireless delivered the highest number of retail net additions in three years and strong growth in revenues, driven by increased smartphone penetration and increased retail postpaid ARPU (average monthly service revenue per user).

Wireless Financial Highlights

  • Total revenues were $18.3 billion in fourth-quarter 2011, up 13.0 percent year over year.  Data revenues were $6.3 billion, up more than $1.0 billion or 19.2 percent year over year, and represented 41.6 percent of all service revenues.  Service revenues were $15.1 billion, up 6.4 percent year over year.  For full-year 2011, total revenues were $70.2 billion, up 10.6 percent over full-year 2010, and service revenues were $59.2 billion in 2011, up 6.3 percent year over year.
  • Retail service ARPU grew 2.6 percent over fourth-quarter 2010, to $53.14.  Retail postpaid ARPU grew 2.5 percent, to$54.80.  Retail postpaid data ARPU increased to $22.76, up 14.3 percent year over year.
  • In fourth-quarter 2011, wireless operating income margin was 23.7 percent, and wireless generated $6.4 billion of EBITDA.  Segment EBITDA margin on service revenues (non-GAAP) was 42.2 percent, down 530 basis points from fourth-quarter 2010.  For full-year 2011, operating income margin was 26.4 percent, down 310 basis points from full-year 2010; Segment EBITDA margin was 44.8 percent, down 210 basis points.

Wireless Operational Highlights

  • Verizon Wireless added 1.0 million total net connections in fourth-quarter 2011.  The company added 1.5 million retail customers, including 1.2 million retail postpaid customers.  While the wholesale channel grew during the fourth quarter, a loss of telematics customers resulted in a net decrease of 490,000 wholesale and other connections in the quarter.  These totals exclude acquisitions and adjustments.
  • At year-end 2011, the company had 108.7 million total connections, a 6.3 percent increase year over year, consisting of 92.2 million retail connections and 16.5 million wholesale and other connections.
  • At year-end 2011, smartphones accounted for 44 percent of the Verizon Wireless retail postpaid customer phone base, up from 39 percent at the end of third-quarter 2011.
  • Retail postpaid churn was 0.94 percent in fourth-quarter 2011, an improvement of 7 basis points year over year.  Total retail churn was 1.23 percent, an improvement of 14 basis points year over year.
  • Verizon Wireless continued to roll out its 4G LTE mobile broadband network, the largest 4G LTE network in the U.S.  As of Monday (Jan. 23), Verizon Wireless 4G LTE service was available to more than 200 million people in 195 markets across the U.S.
  • Verizon Wireless introduced six new 4G LTE devices in fourth-quarter 2011: the Droid Razr by Motorola; the Samsung Stratosphere; the HTC Rezound; the Galaxy Nexus by Samsung; and Droid Xyboard tablets in 10.1-inch and 8-inch form factors.  Earlier this month, the company announced that six additional 4G LTE devices would be available in the coming weeks, including two mobile hotspots, now called Jetpacks, from ZTE and Novatel; three smartphones -- the Droid 4 and Droid Razr Maxx from Motorola, and the Spectrum from LG, which launched last week; and the Samsung Galaxy Tab 7.7.
  • In December, Verizon Wireless announced agreements to purchase AWS licenses from SpectrumCo -- a joint venture of Comcast, Time Warner and Bright House Networks -- and from Cox TMI Wireless.  The spectrum licenses under the two agreements cover 93 percent of the U.S. population, and the purchases are subject to regulatory approval.
  • Verizon Wireless' 4G LTE network was ranked No. 1 on PC World's 100 Best Products of 2011 list.  In October, RootMetrics ranked Verizon Wireless tops for network performance in Boston and 21 other cities nationwide; in November, Verizon Wireless won the RootMetrics RootScore award for data performance in 36 markets.

FiOS, Strategic Services Contribute to Revenue Growth

In fourth-quarter 2011, revenues and customers continued to increase for FiOS services, and sales of strategic services to business customers remained strong.  Segment EBITDA margins (non-GAAP) also increased both sequentially and year over year.

Wireline Financial Highlights

  • Fourth-quarter 2011 operating revenues were $10.1 billion, a decline of 1.5 percent compared with fourth-quarter 2010.  Consumer revenues grew 1.3 percent compared with fourth-quarter 2010.
  • In fourth-quarter 2011, wireline operating income was $300 million, up 18.6 percent from fourth-quarter 2010.  Segment EBITDA (non-GAAP) was $2.4 billion in fourth-quarter 2011, flat compared with fourth-quarter 2010 and an increase of$243 million from third-quarter 2011, when the Segment EBITDA was impacted by storm-related repair costs and a two-week strike.  Operating income margin was 3.0 percent in fourth-quarter 2011.  Segment EBITDA margin (non-GAAP) was 23.8 percent, compared with 23.5 percent in fourth-quarter 2010 and 21.4 percent in third-quarter 2011.
  • Consumer ARPU for wireline services was $96.43 in fourth-quarter 2011, up 8.5 percent compared with fourth-quarter 2010.  ARPU for FiOS customers totaled more than $148 in fourth-quarter 2011, rising approximately $2 year over year.  FiOS services to consumer retail customers represented 61 percent of consumer wireline revenues in fourth-quarter 2011.
  • Global enterprise revenues totaled $3.9 billion in the quarter, up 1.3 percent compared with fourth-quarter 2010.  Sales of strategic services -- including Terremark cloud services, security and IT solutions, and strategic networking -- increased 14.7 percent compared with fourth-quarter 2010 and represented 51 percent of global enterprise revenues in fourth-quarter 2011.

Wireline Operational Highlights

  • Verizon added 201,000 net new FiOS Internet connections and 194,000 net new FiOS Video connections in fourth-quarter 2011.  Verizon had a total of 4.8 million FiOS Internet and 4.2 million FiOS Video connections at year-end.
  • FiOS penetration (subscribers as a percentage of potential subscribers) continued to increase.  FiOS Internet penetration was 35.5 percent at year-end 2011, compared with 31.9 percent at year-end 2010.  In the same periods, FiOS Video penetration was 31.5 percent, compared with 28.0 percent, respectively.  The FiOS network passed 16.5 million premises at year-end 2011, up more than 900,000 from year-end 2010.
  • Broadband connections totaled 8.7 million at year-end 2011, a 3.3 percent year-over-year increase.  FiOS Internet connections more than offset a decrease in DSL-based HSI connections, resulting in a net increase of 98,000 broadband connections from third-quarter 2011.  Total voice connections, which measures FiOS Digital Voice connections in addition to traditional switched access lines, declined 7.2 percent to 24.1 million -- the smallest year-over-year decline since first-quarter 2006.
  • Verizon continued to enhance its global portfolio of secure IT and advanced communications platforms and industry-focused solutions.  In fourth-quarter 2011, this included an expansion of the company's Voice-over-IP service within theAsia-Pacific region and the rollout of an automated healthcare fraud-detection platform for private health insurers and government agencies.
  • Multinational corporations, leading businesses and government agencies -- including Accenture plc; Chrysler Group LLC; the Commonwealth of Pennsylvania; GXS Inc.; MagnaCare Holdings Inc.; Tyson Foods Inc.; Consolidated Edison Company of New York Inc.; and Orange and Rockland Utilities Inc., a Con Edison subsidiary -- completed new agreements or expanded their relationships with Verizon for a range of advanced communications and information technology solutions.  Verizon also announced that it had been named a prime contractor under the U.S. General Services Administration's CONNECTIONS II contract to provide professional and managed services and custom networking solutions at federal facilities.
  • Verizon continued to broaden the scope and capabilities of its network infrastructure.  In fourth-quarter 2011, the company completed deployment of its next-generation 100 gigabit-per-second network route between New York City and Chicagoand kicked off seven additional routes in the U.S.; expanded the Ethernet footprint to an additional 80 nodes supporting 23 areas in the Eastern part of the U.S.; expanded the global Private IP network into six additional countries in Africa and two more countries in the Middle East; and activated the first phase of the Europe India Gateway (EIG) submarine cable connecting Europe to the Middle East and Africa with 40G high-speed connections.

NOTE: Reclassifications of prior period amounts have been made, where appropriate, to reflect comparable operating results for the divestiture of overlapping wireless properties in 105 operating markets in 24 states during the first half of 2010; the wireless deferred revenue adjustment that was disclosed in Verizon's Form 10-Q for the period ended June 30, 2010; the spinoff to Frontier of local exchange and related landline assets in 14 states, effective on July 1, 2010; and other non-operational items.  See the accompanying schedules and www.verizon.com/investor  for reconciliations to generally accepted accounting principles (GAAP) for non-GAAP financial measures cited in this document.

Verizon Communications Inc. (NYSE, Nasdaq: VZ), headquartered in New York, is a global leader in delivering broadband and other wireless and wireline communications services to consumer, business, government and wholesale customers.  Verizon Wireless operates America's most reliable wireless network, with nearly 109 million total connections nationwide.  Verizon also provides converged communications, information and entertainment services over America's most advanced fiber-optic network, and delivers integrated business solutions to customers in more than 150 countries, including all of the Fortune 500.  A Dow 30 company with $111 billion in 2011 revenues, Verizon employs a diverse workforce of nearly 194,000.  For more information, visit www.verizon.com.  

VERIZON'S ONLINE NEWS CENTER: Verizon news releases, executive speeches and biographies, media contacts, high-quality video and images, and other information are available at Verizon's News Center on the World Wide Web atwww.verizon.com/news.  To receive news releases by email, visit the News Center and register for customized automatic delivery of Verizon news releases.

NOTE: This presentation contains statements about expected future events and financial results that are forward-looking and subject to risks and uncertainties. For those statements, we claim the protection of the safe harbor for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995. The following important factors could affect future results and could cause those results to differ materially from those expressed in the forward-looking statements: adverse conditions in the U.S. and international economies; competition in our markets; material adverse changes in labor matters, including labor negotiations, and any resulting financial and/or operational impact; material changes in available technology; any disruption of our key suppliers' provisioning of products or services; significant increases in benefit plan costs or lower investment returns on plan assets; breaches of network or information technology security, natural disasters or terrorist attacks, or existing or future litigation and any resulting financial impact not covered by insurance; technology substitution; an adverse change in the ratings afforded our debt securities by nationally accredited ratings organizations or adverse conditions in the credit markets impacting the cost, including interest rates, and/or availability of financing; any changes in the regulatory environments in which we operate, including any increase in restrictions on our ability to operate our networks; the timing, scope and financial impact of our deployment of broadband technology; changes in our accounting assumptions that regulatory agencies, including the SEC, may require or that result from changes in the accounting rules or their application, which could result in an impact on earnings; our ability to complete acquisitions and dispositions; and the inability to implement our business strategies.

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Verizon Communications Inc.

Condensed Consolidated Statements of Income

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(dollars in millions, except per share amounts)

 

 

 

 

 

 

 

 

 

 

 

Unaudited

 

3 Mos. Ended 
12/31/11

3 Mos. Ended
12/31/10

% Change

 

12 Mos. Ended
12/31/11

 

12 Mos. Ended
12/31/10

% Change

 

 

 

 

 

 

 

 

 

 

 

Operating Revenues

$ 28,436

$ 26,395

7.7

 

$ 110,875

$ 106,565

4.0

 

 

 

 

 

 

 

 

 

 

 

Operating Expenses

 

 

 

 

 

 

 

 

Cost of services and sales

12,090

10,610

13.9

 

45,875

44,149

3.9

 

Selling, general & administrative expense

13,278

5,291

*

 

35,624

31,366

13.6

 

Depreciation and amortization expense

4,180

4,083

2.4

 

16,496

16,405

0.6

 

Total Operating Expenses

29,548

19,984

47.9

 

97,995

91,920

6.6

 

 

 

 

 

 

 

 

 

 

 

Operating Income (Loss)

(1,112)

6,411

*

 

12,880

14,645

(12.1)

 

Equity in earnings of unconsolidated businesses

97

113

(14.2)

 

444

508

(12.6)

 

Other income and (expense), net

(84)

43

*

 

(14)

54

*

 

Interest expense

(703)

(567)

24.0

 

(2,827)

(2,523)

12.0

 

Income (Loss) Before (Provision) Benefit for Income Taxes

(1,802)

6,000

*

 

10,483

12,684

(17.4)

 

(Provision) benefit for income taxes

1,590

(1,352)

*

 

(285)

(2,467)

(88.4)

 

Net Income (Loss)

$ (212)

$ 4,648

*

 

$ 10,198

$ 10,217

(0.2)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income attributable to noncontrolling interest

$ 1,811

$ 2,009

(9.9)

 

$ 7,794

$ 7,668

1.6

 

Net income (loss) attributable to Verizon

(2,023)

2,639

*

 

2,404

2,549

(5.7)

 

Net Income (Loss)

$ (212)

$ 4,648

*

 

$ 10,198

$ 10,217

(0.2)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic Earnings (Loss) per Common Share

 

 

 

 

 

 

 

 

Net income (loss) attributable to Verizon

$ (.71)

$ .93

*

 

$ .85

$ .90

(5.6)

 

 

 

 

 

 

 

 

 

 

 

Weighted average number of common shares (in millions)

2,835

2,829

 

 

2,833

2,830

 

 

 

 

 

 

 

 

 

 

 

 

Diluted Earnings (Loss) per Common Share (1)

 

 

 

 

 

 

 

 

Net income (loss) attributable to Verizon

$ (.71)

$ .93

*

 

$ .85

$ .90

(5.6)

 

 

 

 

 

 

 

 

 

 

 

 

Weighted average number of common shares-assuming dilution (in millions)

2,835

2,831

 

 

2,839

2,833

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Footnotes:

 

 

 

 

 

 

 

 

(1)

If there is a net loss, diluted EPS is the same as basic EPS. Diluted Earnings per Share includes the dilutive effect of shares issuable under our stock-based compensation plans.

 

 

 

 

 

 

 

 

Certain reclassifications have been made, where appropriate, to reflect comparable operating results.

 

 

 

 

 

 

 

 

 

 

 

 

*

Not meaningful

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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Verizon Communications Inc.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Condensed Consolidated Balance Sheets

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(dollars in millions)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Unaudited

12/31/11

 

12/31/10

 

$ Change

 

 

 

 

 

 

 

 

 

Assets

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Current assets

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cash and cash equivalents

$ 13,362

 

$ 6,668

 

$ 6,694

 

 

 

 

 

 

 

 

 

Short-term investments

592

 

545

 

47

 

 

 

 

 

 

 

 

 

Accounts receivable, net

11,776

 

11,781

 

(5)

 

 

 

 

 

 

 

 

 

Inventories

940

 

1,131

 

(191)

 

 

 

 

 

 

 

 

 

Prepaid expenses and other

4,269

 

2,223

 

2,046

 

 

 

 

 

 

 

 

 

Total current assets

30,939

 

22,348

 

8,591

 

 

 

 

 

 

 

 

 

Plant, property and equipment

215,626

 

211,655

 

3,971

 

 

 

 

 

 

 

 

 

Less accumulated depreciation

127,192

 

123,944

 

3,248

 

 

 

 

 

 

 

 

 

 

 

88,434

 

87,711

 

723

 

 

 

 

 

 

 

 

 

Investments in unconsolidated businesses

3,448

 

3,497

 

(49)

 

 

 

 

 

 

 

 

 

Wireless licenses

73,250

 

72,996

 

254

 

 

 

 

 

 

 

 

 

Goodwill

23,357

 

21,988

 

1,369

 

 

 

 

 

 

 

 

 

Other intangible assets, net

5,878

 

5,830

 

48

 

 

 

 

 

 

 

 

 

Other assets

5,155

 

5,635

 

(480)

 

 

 

 

 

 

 

 

 

Total Assets

$ 230,461

 

$ 220,005

 

$ 10,456

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Liabilities and Equity

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Current liabilities

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Debt maturing within one year

$ 4,849

 

$ 7,542

 

$ (2,693)

 

 

 

 

 

 

 

 

 

Accounts payable and accrued liabilities

14,689

 

15,702

 

(1,013)

 

 

 

 

 

 

 

 

 

Other

11,223

 

7,353

 

3,870

 

 

 

 

 

 

 

 

 

Total current liabilities

30,761

 

30,597

 

164

 

 

 

 

 

 

 

 

 

Long-term debt

50,303

 

45,252

 

5,051

 

 

 

 

 

 

 

 

 

Employee benefit obligations

32,957

 

28,164

 

4,793

 

 

 

 

 

 

 

 

 

Deferred income taxes

25,060

 

22,818

 

2,242

 

 

 

 

 

 

 

 

 

Other liabilities

5,472

 

6,262

 

(790)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Equity

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Common stock

297

 

297

 

-

 

 

 

 

 

 

 

 

 

Contributed capital

37,919

 

37,922

 

(3)

 

 

 

 

 

 

 

 

 

Reinvested earnings

1,179

 

4,368

 

(3,189)

 

 

 

 

 

 

 

 

 

Accumulated other comprehensive income

1,269

 

1,049

 

220

 

 

 

 

 

 

 

 

 

Common stock in treasury, at cost

(5,002)

 

(5,267)

 

265

 

 

 

 

 

 

 

 

 

Deferred compensation - employee

 

 

 

 

 

 

 

 

 

 

 

 

 

 

stock ownership plans and other

308

 

200

 

108

 

 

 

 

 

 

 

 

 

Noncontrolling interest

49,938

 

48,343

 

1,595

 

 

 

 

 

 

 

 

 

Total equity

85,908

 

86,912

 

(1,004)

 

 

 

 

 

 

 

 

 

Total Liabilities and Equity

$ 230,461

 

$ 220,005

 

$ 10,456

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Verizon - Selected Financial and Operating Statistics

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Unaudited

12/31/11

 

12/31/10

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total debt (in millions)

$ 55,152

 

$ 52,794

 

 

 

 

 

 

 

 

 

 

 

Net debt (in millions)

$ 41,790

 

$ 46,126

 

 

 

 

 

 

 

 

 

 

 

Net debt / Adjusted EBITDA (1)

1.2x

 

1.3x

 

 

 

 

 

 

 

 

 

 

 

Common shares outstanding end of period (in millions)

2,834

 

2,827

 

 

 

 

 

 

 

 

 

 

 

Total employees

193,900

 

194,400

 

 

 

 

 

 

 

 

 

 

 

Cash dividends declared per common share

$ 0.5000

 

$ 0.4875

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Footnotes

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(1)  The adjusted EBITDA excludes the effects of non-recurring or non-operational items.

 

 

 

 

 

 

 

The unaudited condensed consolidated balance sheets are based on preliminary information.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Click to view table full screen

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Verizon Communications Inc.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Condensed Consolidated Statements of Cash Flows

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(dollars in millions)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Unaudited

 

12 Mos. Ended 
12/31/11

 

12 Mos. Ended 
12/31/10

 

$ Change

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cash Flows From Operating Activities

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net Income

 

$ 10,198

 

$ 10,217

 

$ (19)

 

 

 

 

 

 

 

 

 

 

Adjustments to reconcile net income to net cash provided by operating activities:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Depreciation and amortization expense

 

16,496

 

16,405

 

91

 

 

 

 

 

 

 

 

 

 

Employee retirement benefits

 

7,426

 

3,988

 

3,438

 

 

 

 

 

 

 

 

 

 

Deferred income taxes

 

(223)

 

3,233

 

(3,456)

 

 

 

 

 

 

 

 

 

 

Provision for uncollectible accounts

 

1,026

 

1,246

 

(220)

 

 

 

 

 

 

 

 

 

 

Equity in earnings of unconsolidated businesses, net of dividends received

 

36

 

2

 

34

 

 

 

 

 

 

 

 

 

 

Changes in current assets and liabilities, net of effects from acquisition/disposition of businesses

 

 

(2,279)

 

 

202

 

 

(2,481)

 

 

 

 

 

 

 

 

 

 

Other, net

 

(2,900)

 

(1,930)

 

(970)

 

 

 

 

 

 

 

 

 

 

Net cash provided by operating activities

 

29,780

 

33,363

 

(3,583)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cash Flows From Investing Activities

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Capital expenditures (including capitalized software)

(16,244)

 

(16,458)

 

214

 

 

 

 

 

 

 

 

 

 

Acquisitions of licenses, investments and businesses, net of cash acquired

 

(2,018)

 

(1,438)

 

(580)

 

 

 

 

 

 

 

 

 

 

Proceeds from dispositions

 

-

 

2,594

 

(2,594)

 

 

 

 

 

 

 

 

 

 

Net change in short-term investments

 

35

 

(3)

 

38

 

 

 

 

 

 

 

 

 

 

Other, net

 

977

 

251

 

726

 

 

 

 

 

 

 

 

 

 

Net cash used in investing activities

 

(17,250)

 

(15,054)

 

(2,196)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cash Flows From Financing Activities

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Proceeds from long-term borrowings

 

11,060

 

-

 

11,060

 

 

 

 

 

 

 

 

 

 

Repayments of long-term borrowings and capital lease obligations

(11,805)

 

(8,136)

 

(3,669)

 

 

 

 

 

 

 

 

 

 

Increase (decrease) in short-term obligations, excluding current maturities

1,928

 

(1,097)

 

3,025

 

 

 

 

 

 

 

 

 

 

Dividends paid

 

(5,555)

 

(5,412)

 

(143)

 

 

 

 

 

 

 

 

 

 

Proceeds from sale of common stock

 

241

 

-

 

241

 

 

 

 

 

 

 

 

 

 

Proceeds from access line spin-off

 

-

 

3,083

 

(3,083)

 

 

 

 

 

 

 

 

 

 

Other, net

 

(1,705)

 

(2,088)

 

383

 

 

 

 

 

 

 

 

 

 

Net cash used in financing activities

 

(5,836)

 

(13,650)

 

7,814

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Increase in cash and cash equivalents

 

6,694

 

4,659

 

2,035

 

 

 

 

 

 

 

 

 

 

Cash and cash equivalents, beginning of period

 

6,668

 

2,009

 

4,659

 

 

 

 

 

 

 

 

 

 

Cash and cash equivalents, end of period

 

$ 13,362

 

$ 6,668

 

$ 6,694

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Click to view table full screen

 

Verizon Communications Inc.

Verizon Wireless - Selected Financial Results

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(dollars in millions)

 

 

 

 

 

 

 

 

 

Unaudited

 

 

3 Mos. Ended12/31/11

3 Mos. Ended12/31/10

% Change

 

12 Mos. Ended12/31/11

12 Mos. Ended12/31/10

% Change

 

 

 

 

 

 

 

 

 

Operating Revenues

 

 

 

 

 

 

 

 

 

Retail service

 

$ 14,562

$ 13,513

7.8

 

$ 56,660

$ 53,308

6.3

 

Other service

 

544

680

(20.0)

 

2,497

2,321

7.6

Service

 

15,106

14,193

6.4

 

59,157

55,629

6.3

 

 

 

 

 

 

 

 

 

Equipment

 

2,215

1,126

96.7

 

7,457

4,418

68.8

Other

 

933

829

12.5

 

3,540

3,360

5.4

Total Operating Revenues

 

18,254

16,148

13.0

 

70,154

63,407

10.6

 

 

 

 

 

 

 

 

 

Operating Expenses

 

 

 

 

 

 

 

 

Cost of services and sales

6,707

4,817

39.2

 

24,086

19,245

25.2

Selling, general & administrative expense

5,167

4,596

12.4

 

19,579

18,082

8.3

Depreciation and amortization expense

2,045

1,881

8.7

 

7,962

7,356

8.2

Total Operating Expenses

 

13,919

11,294

23.2

 

51,627

44,683

15.5

 

 

 

 

 

 

 

 

 

Operating Income

 

$ 4,335

$ 4,854

(10.7)

 

$ 18,527

$ 18,724

(1.1)

Operating Income Margin

 

23.7%

30.1%

 

 

26.4%

29.5%

 

 

 

 

 

 

 

 

 

 

Segment EBITDA

 

$ 6,380

$ 6,735

(5.3)

 

$ 26,489

$ 26,080

1.6

Segment EBITDA Service Margin

 

42.2%

47.5%

 

 

44.8%

46.9%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Footnotes:

 

 

 

 

 

 

 

 

The segment financial results and metrics above are adjusted to exclude the effects of non-recurring or non-operational items, as the Company's chief operating decision maker excludes these items in assessing business unit performance.

 

 

 

 

 

 

 

 

 

Intersegment transactions have not been eliminated.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Certain reclassifications have been made, where appropriate, to reflect comparable operating results.

 

 

 

 

 

 

 

 

 

Click to view table full screen

 

 

 

 

 

 

 

 

 

Verizon Communications Inc.

 

 

 

 

 

 

 

 

Verizon Wireless - Selected Operating Statistics

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Unaudited

 

 

 

 

 

12/31/11

12/31/10

% Change

 

 

 

 

 

 

 

 

 

Connections (000)

 

 

 

 

 

 

 

 

   Retail postpaid

 

 

 

 

 

87,382

83,125

5.1

   Retail prepaid

 

 

 

 

 

4,785

4,410

8.5

      Retail

 

 

 

 

 

92,167

87,535

5.3

 

 

 

 

 

 

 

 

 

Wholesale & other connections

 

 

 

 

 

16,500

14,711

12.2

Total connections

 

 

 

 

 

108,667

102,246

6.3

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Unaudited

 

3 Mos. Ended12/31/11

 

3 Mos. Ended12/31/10

% Change

 

12 Mos. Ended12/31/11

12 Mos. Ended12/31/10

% Change

 

 

 

 

 

 

 

 

 

Net Add Detail (1)(000)

 

 

 

 

 

 

 

 

   Retail postpaid

 

1,207

872

38.4

 

4,252

2,529

68.1

   Retail prepaid

 

252

(69)

*

 

372

(552)

*

      Retail

 

1,459

803

81.7

 

4,624

1,977

*

 

 

 

 

 

 

 

 

 

Wholesale & other connections

 

(490)

338

*

 

1,664

3,540

(53.0)

Total connections

 

969

1,141

(15.1)

 

6,288

5,517

14.0

 

 

 

 

 

 

 

 

 

Churn Detail

 

 

 

 

 

 

 

 

   Retail postpaid

 

0.94%

1.01%

 

 

0.95%

1.02%

 

   Retail

 

1.23%

1.37%

 

 

1.26%

1.38%

 

 

 

 

 

 

 

 

 

 

Revenue & ARPU Statistics

 

 

 

 

 

 

 

 

   Total data revenues (in millions)

 

$ 6,278

$ 5,268

19.2

 

$ 23,646

$ 19,550

21.0

   Retail postpaid data ARPU

 

$ 22.76

$ 19.91

14.3

 

$ 21.70

$ 18.78

15.5

   Total data as a % of service revenues

 

41.6%

37.1%

 

 

40.0%

35.1%

 

   Retail service ARPU

 

$ 53.14

$ 51.79

2.6

 

$ 52.69

$ 51.51

2.3

   Retail postpaid ARPU

 

$ 54.80

$ 53.45

2.5

 

$ 54.34

$ 53.14

2.3

 

 

 

 

 

 

 

 

 

Retail Postpaid Connection Statistics

 

 

 

 

 

 

 

 

   Total Smartphone postpaid % of phones sold

 

70.3%

49.3%

 

 

62.6%

42.0%

 

   Total Smartphone postpaid phone base

 

 

 

 

 

43.5%

28.1%

 

   Total Internet postpaid base

 

 

 

 

 

8.1%

7.0%

 

 

 

 

 

 

 

 

 

 

Other Operating Statistics

 

 

 

 

 

 

 

 

   Capital expenditures (in millions)

 

$ 1,787

$ 2,233

(20.0)

 

$ 8,973

$ 8,438

6.3

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Footnotes:

 

 

 

 

 

 

 

 

(1)  Connection net additions exclude acquisitions and adjustments.

 

 

 

 

 

 

 

 

 

 

 

 

 

The segment financial results and metrics above are adjusted to exclude the effects of non-recurring or non-operational items, as the Company's chief operating decision maker excludes these items in assessing business unit performance.

 

 

 

 

 

 

 

 

 

Intersegment transactions have not been eliminated.

 

 

 

 

 

 

 

 

 

Certain reclassifications have been made, where appropriate, to reflect comparable operating results.

 

 

 

 

 

 

 

 

 

*  Not meaningful

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Click to view table full screen

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Verizon Communications Inc.

 

 

 

 

 

 

 

 

 

 

 

Wireline - Selected Financial Results

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(dollars in millions)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Unaudited

 

3 Mos. Ended
12/31/11

3 Mos. Ended
12/31/10

% Change

 

12 Mos. Ended
12/31/11

12 Mos. Ended
12/31/10

% Change

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating Revenues

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Consumer retail

 

$ 3,429

$ 3,385

1.3

 

$ 13,606

$ 13,419

1.4

 

 

 

 

 

 

Small business

 

684

700

(2.3)

 

2,731

2,837

(3.7)

 

 

 

 

 

Mass Markets

 

4,113

4,085

0.7

 

16,337

16,256

0.5

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Strategic services

 

1,990

1,735

14.7

 

7,607

6,602

15.2

 

 

 

 

 

 

Other

 

1,939

2,142

(9.5)

 

8,015

8,714

(8.0)

 

 

 

 

 

Global Enterprise

 

3,929

3,877

1.3

 

15,622

15,316

2.0

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Global Wholesale

 

1,938

2,098

(7.6)

 

7,973

8,746

(8.8)

 

 

 

 

 

Other

 

159

229

(30.6)

 

750

909

(17.5)

 

 

 

 

 

Total Operating Revenues

 

10,139

10,289

(1.5)

 

40,682

41,227

(1.3)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating Expenses

 

 

 

 

 

 

 

 

 

 

 

 

 

Cost of services and sales

 

5,511

5,608

(1.7)

 

22,158

22,618

(2.0)

 

 

 

 

 

Selling, general & administrative expense

 

2,213

2,267

(2.4)

 

9,107

9,372

(2.8)

 

 

 

 

 

Depreciation and amortization expense

 

2,115

2,161

(2.1)

 

8,458

8,469

(0.1)

 

 

 

 

 

Total Operating Expenses

 

9,839

10,036

(2.0)

 

39,723

40,459

(1.8)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating Income

 

$ 300

$ 253

18.6

 

$ 959

$ 768

24.9

 

 

 

 

 

Operating Income Margin

 

3.0%

2.5%

 

 

2.4%

1.9%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Segment EBITDA

 

$ 2,415

$ 2,414

-

 

$ 9,417

$ 9,237

1.9

 

 

 

 

 

Segment EBITDA Margin

 

23.8%

23.5%

 

 

23.1%

22.4%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Footnotes:

 

 

 

 

 

 

 

 

 

 

 

 

 

The segment financial results and metrics above are adjusted to exclude the effects of non-operational items, as the Company's chief operating decision maker excludes these items in assessing business unit performance.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Intersegment transactions have not been eliminated.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Certain reclassifications have been made, where appropriate, to reflect comparable operating results.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Click to view table full screen

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Verizon Communications Inc.

 

 

 

 

 

 

 

 

 

 

 

Wireline - Selected Operating Statistics

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Unaudited

 

 

 

 

 

12/31/11

12/31/10

% Change

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Connections (000)

 

 

 

 

 

 

 

 

 

 

 

 

 

FiOS Video Subscribers

 

 

 

 

 

4,173

3,472

20.2

 

 

 

 

 

FiOS Internet Subscribers

 

 

 

 

 

4,817

4,082

18.0

 

 

 

 

 

FiOS Digital Voice residence connections

 

 

 

 

 

1,884

817

*

 

 

 

 

 

FiOS Digital connections

 

 

 

 

 

10,874

8,371

29.9

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

HSI and other

 

 

 

 

 

3,853

4,310

(10.6)

 

 

 

 

 

Total Broadband connections

 

 

 

 

 

8,670

8,392

3.3

 

 

 

 

 

Primary residence switched access connections

 

 

 

 

 

9,906

11,757

(15.7)

 

 

 

 

 

Primary residence connections

 

 

 

 

 

11,790

12,574

(6.2)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total retail residence voice connections

 

 

 

 

 

12,626

13,616

(7.3)

 

 

 

 

 

Total voice connections

 

 

 

 

 

24,137

26,001

(7.2)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Unaudited

 

3 Mos. Ended
12/31/11

 

3 Mos. Ended 
12/31/10

% Change

 

12 Mos. Ended
12/31/11

12 Mos. Ended
12/31/10

% Change

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net Add Detail (000)

 

 

 

 

 

 

 

 

 

 

 

 

 

FiOS Video Subscribers

 

194

182

6.6

 

701

722

(2.9)

 

 

 

 

 

FiOS Internet Subscribers

 

201

197

2.0

 

735

796

(7.7)

 

 

 

 

 

FiOS Digital Voice residence connections

 

424

145

*

 

1,067

798

33.7

 

 

 

 

 

FiOS Digital connections

 

819

524

56.3

 

2,503

2,316

8.1

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

HSI and other

 

(103)

(145)

(29.0)

 

(457)

(564)

(19.0)

 

 

 

 

 

Total Broadband connections

Verizon Generates Strong Cash Flows, 18.2 Percent Shareholder Returns in 2011; 4Q Earnings Impacted by Non-Cash Pension Items

NEW YORK, Jan. 24, 2012 /PRNewswire/ --

4Q 2011 HIGHLIGHTS

Consolidated

  • 7.7 percent year-over-year quarterly revenue growth in 4Q, a company record.
  • A loss of 71 cents in diluted earnings per share (EPS), impacted by non-cash pension items, compared with earnings of93 cents per share in 4Q 2010.
  • 52 cents per share in adjusted EPS (non-GAAP), which excludes $1.23 per share in non-operational items, compared with 54 cents in adjusted EPS in 4Q 2010.

Wireless

  • $18.3 billion in total 4Q revenues, up 13.0 percent year over year; data revenues of $6.3 billion, up 19.2 percent, representing 41.6 percent of service revenues; $15.1 billion in service revenues, up 6.4 percent.
  • 1.5 million retail net additions (excluding acquisitions and adjustments), largest increase in three years, includes 1.2 million retail postpaid net customer additions; 108.7 million total connections, includes 92.2 million retail customers.
  • 2.6 percent growth in retail service ARPU over 4Q 2010; retail postpaid data ARPU up 14.3 percent.
  • 23.7 percent operating income margin; 42.2 percent Segment EBITDA margin on service revenues (non-GAAP).

Wireline

  • 201,000 FiOS Internet and 194,000 FiOS Video net additions, with increased sales penetration for both products; net increase of 98,000 broadband connections from 3Q 2011.
  • 8.5 percent year-over-year increase in consumer ARPU; FiOS ARPU was more than $148 per month.
  • 14.7 percent increase in strategic services revenues, representing 51 percent of global enterprise revenues.
  • 3.0 percent operating income margin; 23.8 percent Segment EBITDA margin (non-GAAP), compared with 23.5 percent in 4Q 2010 and 21.4 percent in 3Q 2011.

Verizon Communications Inc. (NYSE, Nasdaq: VZ) posted the highest year-over-year quarterly revenue growth in the company's 11-year history in fourth-quarter 2011, fueled by continued strong demand for Verizon Wireless services and handsets, FiOS fiber-optic services, and strategic business products and services.

'Great Momentum for 2012'

"Verizon finished 2011 very strong, both in terms of revenue growth and by delivering an 18.2 percent total return to our shareholders for the full year, and the company has great momentum for 2012," said Lowell McAdam, Verizon chairman, president and chief executive officer.  "Verizon Wireless produced particularly strong growth in the fourth quarter.  While that diluted wireless margins in the short term, it is good news for revenue and margin growth over the long term, particularly given our leadership in the rapidly developing 4G LTE ecosystem."

McAdam added: "Wireline margins recovered from third-quarter pressures, and we expect wireline margin expansion in 2012.  With recent strategic moves and our investments in FiOS, LTE, and global IP and cloud-based strategic services, Verizon has set the stage for accelerated growth across our business units, and we look to continue to build significant value for shareholders in 2012."

Verizon's total shareholder return is a combination of stock-price appreciation and dividend payments.  Regarding recent strategic moves, Verizon last month strengthened its ability to provide fully integrated solutions by creating Verizon Enterprise Solutions, a sales and marketing organization, to harness all of Verizon's solutions for business and government customers globally.  In addition, Verizon Wireless announced agreements to purchase AWS (Advanced Wireless Spectrum) licenses, an important step toward meeting customers' needs for wireless data and broadband services.

4Q and Full-Year Earnings Results

Due primarily to the impact of previously announced non-cash pension items, Verizon reported a loss of 71 cents in EPS in fourth-quarter 2011, compared with earnings of 93 cents per share in fourth-quarter 2010.

Adjusted fourth-quarter 2011 earnings (non-GAAP) of 52 cents per share exclude $1.20 per share, or $3.4 billion after-tax, due to the actuarial valuation of Verizon's benefit plans, and 3 cents per share for the early extinguishment of debt.  This annual valuation adjustment, resulting from changes in actuarial assumptions, is in accordance with a Verizon accounting policy adopted last year.  Comparable adjusted fourth-quarter 2010 earnings were 54 cents per share, excluding the impact of non-operational items, the largest of which was a gain from benefit-plan valuation of 44 cents per share.

On an annual basis, Verizon reported 85 cents in 2011 EPS, compared with 90 cents per share in 2010.  Adjusted annual EPS (non-GAAP) was $2.15 in 2011, compared with $2.08 on a comparable basis (non-GAAP, excluding results from divested businesses) in 2010.

Consolidated Revenue Growth, Strong Cash Flows

In fourth-quarter 2011, Verizon's total operating revenues were $28.4 billion on a consolidated basis, an increase of 7.7 percent compared with fourth-quarter 2010.  For full-year 2011, revenues totaled $110.9 billion, a 4.0 percent increase compared with 2010, when results included revenues from operations that have since been divested.  On a comparable basis (non-GAAP), Verizon's 2011 full-year revenues increased 6.2 percent compared with 2010.

Consolidated EBITDA (earnings before interest, taxes, depreciation and amortization) totaled $29.4 billion in 2011.  On an adjusted basis (non-GAAP), EBITDA increased by more than $950 million in 2011 compared with 2010.

Cash flow from operating activities totaled $29.8 billion in 2011, and capital expenditures totaled $16.2 billion.  Free cash flow (non-GAAP, cash flow from operations less capex) was more than $13.5 billion in 2011.  From this total, Verizon returned $5.6 billion in quarterly dividends to shareholders in 2011, as the company's Board of Directors approved a fifth consecutive year of dividend increases.

Verizon Wireless Delivers Strong Customer and Revenue Growth

In fourth-quarter 2011, Verizon Wireless delivered the highest number of retail net additions in three years and strong growth in revenues, driven by increased smartphone penetration and increased retail postpaid ARPU (average monthly service revenue per user).

Wireless Financial Highlights

  • Total revenues were $18.3 billion in fourth-quarter 2011, up 13.0 percent year over year.  Data revenues were $6.3 billion, up more than $1.0 billion or 19.2 percent year over year, and represented 41.6 percent of all service revenues.  Service revenues were $15.1 billion, up 6.4 percent year over year.  For full-year 2011, total revenues were $70.2 billion, up 10.6 percent over full-year 2010, and service revenues were $59.2 billion in 2011, up 6.3 percent year over year.
  • Retail service ARPU grew 2.6 percent over fourth-quarter 2010, to $53.14.  Retail postpaid ARPU grew 2.5 percent, to$54.80.  Retail postpaid data ARPU increased to $22.76, up 14.3 percent year over year.
  • In fourth-quarter 2011, wireless operating income margin was 23.7 percent, and wireless generated $6.4 billion of EBITDA.  Segment EBITDA margin on service revenues (non-GAAP) was 42.2 percent, down 530 basis points from fourth-quarter 2010.  For full-year 2011, operating income margin was 26.4 percent, down 310 basis points from full-year 2010; Segment EBITDA margin was 44.8 percent, down 210 basis points.

Wireless Operational Highlights

  • Verizon Wireless added 1.0 million total net connections in fourth-quarter 2011.  The company added 1.5 million retail customers, including 1.2 million retail postpaid customers.  While the wholesale channel grew during the fourth quarter, a loss of telematics customers resulted in a net decrease of 490,000 wholesale and other connections in the quarter.  These totals exclude acquisitions and adjustments.
  • At year-end 2011, the company had 108.7 million total connections, a 6.3 percent increase year over year, consisting of 92.2 million retail connections and 16.5 million wholesale and other connections.
  • At year-end 2011, smartphones accounted for 44 percent of the Verizon Wireless retail postpaid customer phone base, up from 39 percent at the end of third-quarter 2011.
  • Retail postpaid churn was 0.94 percent in fourth-quarter 2011, an improvement of 7 basis points year over year.  Total retail churn was 1.23 percent, an improvement of 14 basis points year over year.
  • Verizon Wireless continued to roll out its 4G LTE mobile broadband network, the largest 4G LTE network in the U.S.  As of Monday (Jan. 23), Verizon Wireless 4G LTE service was available to more than 200 million people in 195 markets across the U.S.
  • Verizon Wireless introduced six new 4G LTE devices in fourth-quarter 2011: the Droid Razr by Motorola; the Samsung Stratosphere; the HTC Rezound; the Galaxy Nexus by Samsung; and Droid Xyboard tablets in 10.1-inch and 8-inch form factors.  Earlier this month, the company announced that six additional 4G LTE devices would be available in the coming weeks, including two mobile hotspots, now called Jetpacks, from ZTE and Novatel; three smartphones -- the Droid 4 and Droid Razr Maxx from Motorola, and the Spectrum from LG, which launched last week; and the Samsung Galaxy Tab 7.7.
  • In December, Verizon Wireless announced agreements to purchase AWS licenses from SpectrumCo -- a joint venture of Comcast, Time Warner and Bright House Networks -- and from Cox TMI Wireless.  The spectrum licenses under the two agreements cover 93 percent of the U.S. population, and the purchases are subject to regulatory approval.
  • Verizon Wireless' 4G LTE network was ranked No. 1 on PC World's 100 Best Products of 2011 list.  In October, RootMetrics ranked Verizon Wireless tops for network performance in Boston and 21 other cities nationwide; in November, Verizon Wireless won the RootMetrics RootScore award for data performance in 36 markets.

FiOS, Strategic Services Contribute to Revenue Growth

In fourth-quarter 2011, revenues and customers continued to increase for FiOS services, and sales of strategic services to business customers remained strong.  Segment EBITDA margins (non-GAAP) also increased both sequentially and year over year.

Wireline Financial Highlights

  • Fourth-quarter 2011 operating revenues were $10.1 billion, a decline of 1.5 percent compared with fourth-quarter 2010.  Consumer revenues grew 1.3 percent compared with fourth-quarter 2010.
  • In fourth-quarter 2011, wireline operating income was $300 million, up 18.6 percent from fourth-quarter 2010.  Segment EBITDA (non-GAAP) was $2.4 billion in fourth-quarter 2011, flat compared with fourth-quarter 2010 and an increase of$243 million from third-quarter 2011, when the Segment EBITDA was impacted by storm-related repair costs and a two-week strike.  Operating income margin was 3.0 percent in fourth-quarter 2011.  Segment EBITDA margin (non-GAAP) was 23.8 percent, compared with 23.5 percent in fourth-quarter 2010 and 21.4 percent in third-quarter 2011.
  • Consumer ARPU for wireline services was $96.43 in fourth-quarter 2011, up 8.5 percent compared with fourth-quarter 2010.  ARPU for FiOS customers totaled more than $148 in fourth-quarter 2011, rising approximately $2 year over year.  FiOS services to consumer retail customers represented 61 percent of consumer wireline revenues in fourth-quarter 2011.
  • Global enterprise revenues totaled $3.9 billion in the quarter, up 1.3 percent compared with fourth-quarter 2010.  Sales of strategic services -- including Terremark cloud services, security and IT solutions, and strategic networking -- increased 14.7 percent compared with fourth-quarter 2010 and represented 51 percent of global enterprise revenues in fourth-quarter 2011.

Wireline Operational Highlights

  • Verizon added 201,000 net new FiOS Internet connections and 194,000 net new FiOS Video connections in fourth-quarter 2011.  Verizon had a total of 4.8 million FiOS Internet and 4.2 million FiOS Video connections at year-end.
  • FiOS penetration (subscribers as a percentage of potential subscribers) continued to increase.  FiOS Internet penetration was 35.5 percent at year-end 2011, compared with 31.9 percent at year-end 2010.  In the same periods, FiOS Video penetration was 31.5 percent, compared with 28.0 percent, respectively.  The FiOS network passed 16.5 million premises at year-end 2011, up more than 900,000 from year-end 2010.
  • Broadband connections totaled 8.7 million at year-end 2011, a 3.3 percent year-over-year increase.  FiOS Internet connections more than offset a decrease in DSL-based HSI connections, resulting in a net increase of 98,000 broadband connections from third-quarter 2011.  Total voice connections, which measures FiOS Digital Voice connections in addition to traditional switched access lines, declined 7.2 percent to 24.1 million -- the smallest year-over-year decline since first-quarter 2006.
  • Verizon continued to enhance its global portfolio of secure IT and advanced communications platforms and industry-focused solutions.  In fourth-quarter 2011, this included an expansion of the company's Voice-over-IP service within theAsia-Pacific region and the rollout of an automated healthcare fraud-detection platform for private health insurers and government agencies.
  • Multinational corporations, leading businesses and government agencies -- including Accenture plc; Chrysler Group LLC; the Commonwealth of Pennsylvania; GXS Inc.; MagnaCare Holdings Inc.; Tyson Foods Inc.; Consolidated Edison Company of New York Inc.; and Orange and Rockland Utilities Inc., a Con Edison subsidiary -- completed new agreements or expanded their relationships with Verizon for a range of advanced communications and information technology solutions.  Verizon also announced that it had been named a prime contractor under the U.S. General Services Administration's CONNECTIONS II contract to provide professional and managed services and custom networking solutions at federal facilities.
  • Verizon continued to broaden the scope and capabilities of its network infrastructure.  In fourth-quarter 2011, the company completed deployment of its next-generation 100 gigabit-per-second network route between New York City and Chicagoand kicked off seven additional routes in the U.S.; expanded the Ethernet footprint to an additional 80 nodes supporting 23 areas in the Eastern part of the U.S.; expanded the global Private IP network into six additional countries in Africa and two more countries in the Middle East; and activated the first phase of the Europe India Gateway (EIG) submarine cable connecting Europe to the Middle East and Africa with 40G high-speed connections.

NOTE: Reclassifications of prior period amounts have been made, where appropriate, to reflect comparable operating results for the divestiture of overlapping wireless properties in 105 operating markets in 24 states during the first half of 2010; the wireless deferred revenue adjustment that was disclosed in Verizon's Form 10-Q for the period ended June 30, 2010; the spinoff to Frontier of local exchange and related landline assets in 14 states, effective on July 1, 2010; and other non-operational items.  See the accompanying schedules and www.verizon.com/investor  for reconciliations to generally accepted accounting principles (GAAP) for non-GAAP financial measures cited in this document.

Verizon Communications Inc. (NYSE, Nasdaq: VZ), headquartered in New York, is a global leader in delivering broadband and other wireless and wireline communications services to consumer, business, government and wholesale customers.  Verizon Wireless operates America's most reliable wireless network, with nearly 109 million total connections nationwide.  Verizon also provides converged communications, information and entertainment services over America's most advanced fiber-optic network, and delivers integrated business solutions to customers in more than 150 countries, including all of the Fortune 500.  A Dow 30 company with $111 billion in 2011 revenues, Verizon employs a diverse workforce of nearly 194,000.  For more information, visit www.verizon.com.  

VERIZON'S ONLINE NEWS CENTER: Verizon news releases, executive speeches and biographies, media contacts, high-quality video and images, and other information are available at Verizon's News Center on the World Wide Web atwww.verizon.com/news.  To receive news releases by email, visit the News Center and register for customized automatic delivery of Verizon news releases.

NOTE: This presentation contains statements about expected future events and financial results that are forward-looking and subject to risks and uncertainties. For those statements, we claim the protection of the safe harbor for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995. The following important factors could affect future results and could cause those results to differ materially from those expressed in the forward-looking statements: adverse conditions in the U.S. and international economies; competition in our markets; material adverse changes in labor matters, including labor negotiations, and any resulting financial and/or operational impact; material changes in available technology; any disruption of our key suppliers' provisioning of products or services; significant increases in benefit plan costs or lower investment returns on plan assets; breaches of network or information technology security, natural disasters or terrorist attacks, or existing or future litigation and any resulting financial impact not covered by insurance; technology substitution; an adverse change in the ratings afforded our debt securities by nationally accredited ratings organizations or adverse conditions in the credit markets impacting the cost, including interest rates, and/or availability of financing; any changes in the regulatory environments in which we operate, including any increase in restrictions on our ability to operate our networks; the timing, scope and financial impact of our deployment of broadband technology; changes in our accounting assumptions that regulatory agencies, including the SEC, may require or that result from changes in the accounting rules or their application, which could result in an impact on earnings; our ability to complete acquisitions and dispositions; and the inability to implement our business strategies.

Click to view table full screen

 

Verizon Communications Inc.

Condensed Consolidated Statements of Income

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(dollars in millions, except per share amounts)

 

 

 

 

 

 

 

 

 

 

 

Unaudited

 

3 Mos. Ended 
12/31/11

3 Mos. Ended
12/31/10

% Change

 

12 Mos. Ended
12/31/11

 

12 Mos. Ended
12/31/10

% Change

 

 

 

 

 

 

 

 

 

 

 

Operating Revenues

$ 28,436

$ 26,395

7.7

 

$ 110,875

$ 106,565

4.0

 

 

 

 

 

 

 

 

 

 

 

Operating Expenses

 

 

 

 

 

 

 

 

Cost of services and sales

12,090

10,610

13.9

 

45,875

44,149

3.9

 

Selling, general & administrative expense

13,278

5,291

*

 

35,624

31,366

13.6

 

Depreciation and amortization expense

4,180

4,083

2.4

 

16,496

16,405

0.6

 

Total Operating Expenses

29,548

19,984

47.9

 

97,995

91,920

6.6

 

 

 

 

 

 

 

 

 

 

 

Operating Income (Loss)

(1,112)

6,411

*

 

12,880

14,645

(12.1)

 

Equity in earnings of unconsolidated businesses

97

113

(14.2)

 

444

508

(12.6)

 

Other income and (expense), net

(84)

43

*

 

(14)

54

*

 

Interest expense

(703)

(567)

24.0

 

(2,827)

(2,523)

12.0

 

Income (Loss) Before (Provision) Benefit for Income Taxes

(1,802)

6,000

*

 

10,483

12,684

(17.4)

 

(Provision) benefit for income taxes

1,590

(1,352)

*

 

(285)

(2,467)

(88.4)

 

Net Income (Loss)

$ (212)

$ 4,648

*

 

$ 10,198

$ 10,217

(0.2)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income attributable to noncontrolling interest

$ 1,811

$ 2,009

(9.9)

 

$ 7,794

$ 7,668

1.6

 

Net income (loss) attributable to Verizon

(2,023)

2,639

*

 

2,404

2,549

(5.7)

 

Net Income (Loss)

$ (212)

$ 4,648

*

 

$ 10,198

$ 10,217

(0.2)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic Earnings (Loss) per Common Share

 

 

 

 

 

 

 

 

Net income (loss) attributable to Verizon

$ (.71)

$ .93

*

 

$ .85

$ .90

(5.6)

 

 

 

 

 

 

 

 

 

 

 

Weighted average number of common shares (in millions)

2,835

2,829

 

 

2,833

2,830

 

 

 

 

 

 

 

 

 

 

 

 

Diluted Earnings (Loss) per Common Share (1)

 

 

 

 

 

 

 

 

Net income (loss) attributable to Verizon

$ (.71)

$ .93

*

 

$ .85

$ .90

(5.6)

 

 

 

 

 

 

 

 

 

 

 

 

Weighted average number of common shares-assuming dilution (in millions)

2,835

2,831

 

 

2,839

2,833

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Footnotes:

 

 

 

 

 

 

 

 

(1)

If there is a net loss, diluted EPS is the same as basic EPS. Diluted Earnings per Share includes the dilutive effect of shares issuable under our stock-based compensation plans.

 

 

 

 

 

 

 

 

Certain reclassifications have been made, where appropriate, to reflect comparable operating results.

 

 

 

 

 

 

 

 

 

 

 

 

*

Not meaningful

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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Verizon Communications Inc.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Condensed Consolidated Balance Sheets

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(dollars in millions)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Unaudited

12/31/11

 

12/31/10

 

$ Change

 

 

 

 

 

 

 

 

 

Assets

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Current assets

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cash and cash equivalents

$ 13,362

 

$ 6,668

 

$ 6,694

 

 

 

 

 

 

 

 

 

Short-term investments

592

 

545

 

47

 

 

 

 

 

 

 

 

 

Accounts receivable, net

11,776

 

11,781

 

(5)

 

 

 

 

 

 

 

 

 

Inventories

940

 

1,131

 

(191)

 

 

 

 

 

 

 

 

 

Prepaid expenses and other

4,269

 

2,223

 

2,046

 

 

 

 

 

 

 

 

 

Total current assets

30,939

 

22,348

 

8,591

 

 

 

 

 

 

 

 

 

Plant, property and equipment

215,626

 

211,655

 

3,971

 

 

 

 

 

 

 

 

 

Less accumulated depreciation

127,192

 

123,944

 

3,248

 

 

 

 

 

 

 

 

 

 

 

88,434

 

87,711

 

723

 

 

 

 

 

 

 

 

 

Investments in unconsolidated businesses

3,448

 

3,497

 

(49)

 

 

 

 

 

 

 

 

 

Wireless licenses

73,250

 

72,996

 

254

 

 

 

 

 

 

 

 

 

Goodwill

23,357

 

21,988

 

1,369

 

 

 

 

 

 

 

 

 

Other intangible assets, net

5,878

 

5,830

 

48

 

 

 

 

 

 

 

 

 

Other assets

5,155

 

5,635

 

(480)

 

 

 

 

 

 

 

 

 

Total Assets

$ 230,461

 

$ 220,005

 

$ 10,456

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Liabilities and Equity

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Current liabilities

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Debt maturing within one year

$ 4,849

 

$ 7,542

 

$ (2,693)

 

 

 

 

 

 

 

 

 

Accounts payable and accrued liabilities

14,689

 

15,702

 

(1,013)

 

 

 

 

 

 

 

 

 

Other

11,223

 

7,353

 

3,870

 

 

 

 

 

 

 

 

 

Total current liabilities

30,761

 

30,597

 

164

 

 

 

 

 

 

 

 

 

Long-term debt

50,303

 

45,252

 

5,051

 

 

 

 

 

 

 

 

 

Employee benefit obligations

32,957

 

28,164

 

4,793

 

 

 

 

 

 

 

 

 

Deferred income taxes

25,060

 

22,818

 

2,242

 

 

 

 

 

 

 

 

 

Other liabilities

5,472

 

6,262

 

(790)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Equity

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Common stock

297

 

297

 

-

 

 

 

 

 

 

 

 

 

Contributed capital

37,919

 

37,922

 

(3)

 

 

 

 

 

 

 

 

 

Reinvested earnings

1,179

 

4,368

 

(3,189)

 

 

 

 

 

 

 

 

 

Accumulated other comprehensive income

1,269

 

1,049

 

220

 

 

 

 

 

 

 

 

 

Common stock in treasury, at cost

(5,002)

 

(5,267)

 

265

 

 

 

 

 

 

 

 

 

Deferred compensation - employee

 

 

 

 

 

 

 

 

 

 

 

 

 

 

stock ownership plans and other

308

 

200

 

108

 

 

 

 

 

 

 

 

 

Noncontrolling interest

49,938

 

48,343

 

1,595

 

 

 

 

 

 

 

 

 

Total equity

85,908

 

86,912

 

(1,004)

 

 

 

 

 

 

 

 

 

Total Liabilities and Equity

$ 230,461

 

$ 220,005

 

$ 10,456

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Verizon - Selected Financial and Operating Statistics

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Unaudited

12/31/11

 

12/31/10

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total debt (in millions)

$ 55,152

 

$ 52,794

 

 

 

 

 

 

 

 

 

 

 

Net debt (in millions)

$ 41,790

 

$ 46,126

 

 

 

 

 

 

 

 

 

 

 

Net debt / Adjusted EBITDA (1)

1.2x

 

1.3x

 

 

 

 

 

 

 

 

 

 

 

Common shares outstanding end of period (in millions)

2,834

 

2,827

 

 

 

 

 

 

 

 

 

 

 

Total employees

193,900

 

194,400

 

 

 

 

 

 

 

 

 

 

 

Cash dividends declared per common share

$ 0.5000

 

$ 0.4875

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Footnotes

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(1)  The adjusted EBITDA excludes the effects of non-recurring or non-operational items.

 

 

 

 

 

 

 

The unaudited condensed consolidated balance sheets are based on preliminary information.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Click to view table full screen

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Verizon Communications Inc.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Condensed Consolidated Statements of Cash Flows

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(dollars in millions)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Unaudited

 

12 Mos. Ended 
12/31/11

 

12 Mos. Ended 
12/31/10

 

$ Change

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cash Flows From Operating Activities

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net Income

 

$ 10,198

 

$ 10,217

 

$ (19)

 

 

 

 

 

 

 

 

 

 

Adjustments to reconcile net income to net cash provided by operating activities:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Depreciation and amortization expense

 

16,496

 

16,405

 

91

 

 

 

 

 

 

 

 

 

 

Employee retirement benefits

 

7,426

 

3,988

 

3,438

 

 

 

 

 

 

 

 

 

 

Deferred income taxes

 

(223)

 

3,233

 

(3,456)

 

 

 

 

 

 

 

 

 

 

Provision for uncollectible accounts

 

1,026

 

1,246

 

(220)

 

 

 

 

 

 

 

 

 

 

Equity in earnings of unconsolidated businesses, net of dividends received

 

36

 

2

 

34

 

 

 

 

 

 

 

 

 

 

Changes in current assets and liabilities, net of effects from acquisition/disposition of businesses

 

 

(2,279)

 

 

202

 

 

(2,481)

 

 

 

 

 

 

 

 

 

 

Other, net

 

(2,900)

 

(1,930)

 

(970)

 

 

 

 

 

 

 

 

 

 

Net cash provided by operating activities

 

29,780

 

33,363

 

(3,583)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cash Flows From Investing Activities

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Capital expenditures (including capitalized software)

(16,244)

 

(16,458)

 

214

 

 

 

 

 

 

 

 

 

 

Acquisitions of licenses, investments and businesses, net of cash acquired

 

(2,018)

 

(1,438)

 

(580)

 

 

 

 

 

 

 

 

 

 

Proceeds from dispositions

 

-

 

2,594

 

(2,594)

 

 

 

 

 

 

 

 

 

 

Net change in short-term investments

 

35

 

(3)

 

38

 

 

 

 

 

 

 

 

 

 

Other, net

 

977

 

251

 

726

 

 

 

 

 

 

 

 

 

 

Net cash used in investing activities

 

(17,250)

 

(15,054)

 

(2,196)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cash Flows From Financing Activities

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Proceeds from long-term borrowings

 

11,060

 

-

 

11,060

 

 

 

 

 

 

 

 

 

 

Repayments of long-term borrowings and capital lease obligations

(11,805)

 

(8,136)

 

(3,669)

 

 

 

 

 

 

 

 

 

 

Increase (decrease) in short-term obligations, excluding current maturities

1,928

 

(1,097)

 

3,025

 

 

 

 

 

 

 

 

 

 

Dividends paid

 

(5,555)

 

(5,412)

 

(143)

 

 

 

 

 

 

 

 

 

 

Proceeds from sale of common stock

 

241

 

-

 

241

 

 

 

 

 

 

 

 

 

 

Proceeds from access line spin-off

 

-

 

3,083

 

(3,083)

 

 

 

 

 

 

 

 

 

 

Other, net

 

(1,705)

 

(2,088)

 

383

 

 

 

 

 

 

 

 

 

 

Net cash used in financing activities

 

(5,836)

 

(13,650)

 

7,814

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Increase in cash and cash equivalents

 

6,694

 

4,659

 

2,035

 

 

 

 

 

 

 

 

 

 

Cash and cash equivalents, beginning of period

 

6,668

 

2,009

 

4,659

 

 

 

 

 

 

 

 

 

 

Cash and cash equivalents, end of period

 

$ 13,362

 

$ 6,668

 

$ 6,694

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Click to view table full screen

 

Verizon Communications Inc.

Verizon Wireless - Selected Financial Results

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(dollars in millions)

 

 

 

 

 

 

 

 

 

Unaudited

 

 

3 Mos. Ended12/31/11

3 Mos. Ended12/31/10

% Change

 

12 Mos. Ended12/31/11

12 Mos. Ended12/31/10

% Change

 

 

 

 

 

 

 

 

 

Operating Revenues

 

 

 

 

 

 

 

 

 

Retail service

 

$ 14,562

$ 13,513

7.8

 

$ 56,660

$ 53,308

6.3

 

Other service

 

544

680

(20.0)

 

2,497

2,321

7.6

Service

 

15,106

14,193

6.4

 

59,157

55,629

6.3

 

 

 

 

 

 

 

 

 

Equipment

 

2,215

1,126

96.7

 

7,457

4,418

68.8

Other

 

933

829

12.5

 

3,540

3,360

5.4

Total Operating Revenues

 

18,254

16,148

13.0

 

70,154

63,407

10.6

 

 

 

 

 

 

 

 

 

Operating Expenses

 

 

 

 

 

 

 

 

Cost of services and sales

6,707

4,817

39.2

 

24,086

19,245

25.2

Selling, general & administrative expense

5,167

4,596

12.4

 

19,579

18,082

8.3

Depreciation and amortization expense

2,045

1,881

8.7

 

7,962

7,356

8.2

Total Operating Expenses

 

13,919

11,294

23.2

 

51,627

44,683

15.5

 

 

 

 

 

 

 

 

 

Operating Income

 

$ 4,335

$ 4,854

(10.7)

 

$ 18,527

$ 18,724

(1.1)

Operating Income Margin

 

23.7%

30.1%

 

 

26.4%

29.5%

 

 

 

 

 

 

 

 

 

 

Segment EBITDA

 

$ 6,380

$ 6,735

(5.3)

 

$ 26,489

$ 26,080

1.6

Segment EBITDA Service Margin

 

42.2%

47.5%

 

 

44.8%

46.9%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Footnotes:

 

 

 

 

 

 

 

 

The segment financial results and metrics above are adjusted to exclude the effects of non-recurring or non-operational items, as the Company's chief operating decision maker excludes these items in assessing business unit performance.

 

 

 

 

 

 

 

 

 

Intersegment transactions have not been eliminated.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Certain reclassifications have been made, where appropriate, to reflect comparable operating results.

 

 

 

 

 

 

 

 

 

Click to view table full screen

 

 

 

 

 

 

 

 

 

Verizon Communications Inc.

 

 

 

 

 

 

 

 

Verizon Wireless - Selected Operating Statistics

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Unaudited

 

 

 

 

 

12/31/11

12/31/10

% Change

 

 

 

 

 

 

 

 

 

Connections (000)

 

 

 

 

 

 

 

 

   Retail postpaid

 

 

 

 

 

87,382

83,125

5.1

   Retail prepaid

 

 

 

 

 

4,785

4,410

8.5

      Retail

 

 

 

 

 

92,167

87,535

5.3

 

 

 

 

 

 

 

 

 

Wholesale & other connections

 

 

 

 

 

16,500

14,711

12.2

Total connections

 

 

 

 

 

108,667

102,246

6.3

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Unaudited

 

3 Mos. Ended12/31/11

 

3 Mos. Ended12/31/10

% Change

 

12 Mos. Ended12/31/11

12 Mos. Ended12/31/10

% Change

 

 

 

 

 

 

 

 

 

Net Add Detail (1)(000)

 

 

 

 

 

 

 

 

   Retail postpaid

 

1,207

872

38.4

 

4,252

2,529

68.1

   Retail prepaid

 

252

(69)

*

 

372

(552)

*

      Retail

 

1,459

803

81.7

 

4,624

1,977

*

 

 

 

 

 

 

 

 

 

Wholesale & other connections

 

(490)

338

*

 

1,664

3,540

(53.0)

Total connections

 

969

1,141

(15.1)

 

6,288

5,517

14.0

 

 

 

 

 

 

 

 

 

Churn Detail

 

 

 

 

 

 

 

 

   Retail postpaid

 

0.94%

1.01%

 

 

0.95%

1.02%

 

   Retail

 

1.23%

1.37%

 

 

1.26%

1.38%

 

 

 

 

 

 

 

 

 

 

Revenue & ARPU Statistics

 

 

 

 

 

 

 

 

   Total data revenues (in millions)

 

$ 6,278

$ 5,268

19.2

 

$ 23,646

$ 19,550

21.0

   Retail postpaid data ARPU

 

$ 22.76

$ 19.91

14.3

 

$ 21.70

$ 18.78

15.5

   Total data as a % of service revenues

 

41.6%

37.1%

 

 

40.0%

35.1%

 

   Retail service ARPU

 

$ 53.14

$ 51.79

2.6

 

$ 52.69

$ 51.51

2.3

   Retail postpaid ARPU

 

$ 54.80

$ 53.45

2.5

 

$ 54.34

$ 53.14

2.3

 

 

 

 

 

 

 

 

 

Retail Postpaid Connection Statistics

 

 

 

 

 

 

 

 

   Total Smartphone postpaid % of phones sold

 

70.3%

49.3%

 

 

62.6%

42.0%

 

   Total Smartphone postpaid phone base

 

 

 

 

 

43.5%

28.1%

 

   Total Internet postpaid base

 

 

 

 

 

8.1%

7.0%

 

 

 

 

 

 

 

 

 

 

Other Operating Statistics

 

 

 

 

 

 

 

 

   Capital expenditures (in millions)

 

$ 1,787

$ 2,233

(20.0)

 

$ 8,973

$ 8,438

6.3

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Footnotes:

 

 

 

 

 

 

 

 

(1)  Connection net additions exclude acquisitions and adjustments.

 

 

 

 

 

 

 

 

 

 

 

 

 

The segment financial results and metrics above are adjusted to exclude the effects of non-recurring or non-operational items, as the Company's chief operating decision maker excludes these items in assessing business unit performance.

 

 

 

 

 

 

 

 

 

Intersegment transactions have not been eliminated.

 

 

 

 

 

 

 

 

 

Certain reclassifications have been made, where appropriate, to reflect comparable operating results.

 

 

 

 

 

 

 

 

 

*  Not meaningful

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Click to view table full screen

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Verizon Communications Inc.

 

 

 

 

 

 

 

 

 

 

 

Wireline - Selected Financial Results

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(dollars in millions)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Unaudited

 

3 Mos. Ended
12/31/11

3 Mos. Ended
12/31/10

% Change

 

12 Mos. Ended
12/31/11

12 Mos. Ended
12/31/10

% Change

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating Revenues

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Consumer retail

 

$ 3,429

$ 3,385

1.3

 

$ 13,606

$ 13,419

1.4

 

 

 

 

 

 

Small business

 

684

700

(2.3)

 

2,731

2,837

(3.7)

 

 

 

 

 

Mass Markets

 

4,113

4,085

0.7

 

16,337

16,256

0.5

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Strategic services

 

1,990

1,735

14.7

 

7,607

6,602

15.2

 

 

 

 

 

 

Other

 

1,939

2,142

(9.5)

 

8,015

8,714

(8.0)

 

 

 

 

 

Global Enterprise

 

3,929

3,877

1.3

 

15,622

15,316

2.0

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Global Wholesale

 

1,938

2,098

(7.6)

 

7,973

8,746

(8.8)

 

 

 

 

 

Other

 

159

229

(30.6)

 

750

909

(17.5)

 

 

 

 

 

Total Operating Revenues

 

10,139

10,289

(1.5)

 

40,682

41,227

(1.3)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating Expenses

 

 

 

 

 

 

 

 

 

 

 

 

 

Cost of services and sales

 

5,511

5,608

(1.7)

 

22,158

22,618

(2.0)

 

 

 

 

 

Selling, general & administrative expense

 

2,213

2,267

(2.4)

 

9,107

9,372

(2.8)

 

 

 

 

 

Depreciation and amortization expense

 

2,115

2,161

(2.1)

 

8,458

8,469

(0.1)

 

 

 

 

 

Total Operating Expenses

 

9,839

10,036

(2.0)

 

39,723

40,459

(1.8)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating Income

 

$ 300

$ 253

18.6

 

$ 959

$ 768

24.9

 

 

 

 

 

Operating Income Margin

 

3.0%

2.5%

 

 

2.4%

1.9%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Segment EBITDA

 

$ 2,415

$ 2,414

-

 

$ 9,417

$ 9,237

1.9

 

 

 

 

 

Segment EBITDA Margin

 

23.8%

23.5%

 

 

23.1%

22.4%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Footnotes:

 

 

 

 

 

 

 

 

 

 

 

 

 

The segment financial results and metrics above are adjusted to exclude the effects of non-operational items, as the Company's chief operating decision maker excludes these items in assessing business unit performance.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Intersegment transactions have not been eliminated.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Certain reclassifications have been made, where appropriate, to reflect comparable operating results.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Click to view table full screen

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Verizon Communications Inc.

 

 

 

 

 

 

 

 

 

 

 

Wireline - Selected Operating Statistics

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Unaudited

 

 

 

 

 

12/31/11

12/31/10

% Change

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Connections (000)

 

 

 

 

 

 

 

 

 

 

 

 

 

FiOS Video Subscribers

 

 

 

 

 

4,173

3,472

20.2

 

 

 

 

 

FiOS Internet Subscribers

 

 

 

 

 

4,817

4,082

18.0

 

 

 

 

 

FiOS Digital Voice residence connections

 

 

 

 

 

1,884

817

*

 

 

 

 

 

FiOS Digital connections

 

 

 

 

 

10,874

8,371

29.9

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

HSI and other

 

 

 

 

 

3,853

4,310

(10.6)

 

 

 

 

 

Total Broadband connections

 

 

 

 

 

8,670

8,392

3.3

 

 

 

 

 

Primary residence switched access connections

 

 

 

 

 

9,906

11,757

(15.7)

 

 

 

 

 

Primary residence connections

 

 

 

 

 

11,790

12,574

(6.2)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total retail residence voice connections

 

 

 

 

 

12,626

13,616

(7.3)

 

 

 

 

 

Total voice connections

 

 

 

 

 

24,137

26,001

(7.2)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Unaudited

 

3 Mos. Ended
12/31/11

 

3 Mos. Ended 
12/31/10

% Change

 

12 Mos. Ended
12/31/11

12 Mos. Ended
12/31/10

% Change

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net Add Detail (000)

 

 

 

 

 

 

 

 

 

 

 

 

 

FiOS Video Subscribers

 

194

182

6.6

 

701

722

(2.9)

 

 

 

 

 

FiOS Internet Subscribers

 

201

197

2.0

 

735

796

(7.7)

 

 

 

 

 

FiOS Digital Voice residence connections

 

424

145

*

 

1,067

798

33.7

 

 

 

 

 

FiOS Digital connections

 

819

524

56.3

 

2,503

2,316

8.1

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

HSI and other

 

(103)

(145)

(29.0)

 

(457)

(564)

(19.0)

 

 

 

 

 

Total Broadband connections

 

98

52

88.5

 

278

232

19.8

 

 

 

 

 

Primary residence switched access connections

 

(550)

(396)

38.9

 

(1,851)

(1,886)

(1.9)

 

 

 

 

 

Primary residence connections

 

(126)

(251)

(49.8)

 

(784)

(1,088)

(27.9)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total retail residence voice connections

 

(183)

(303)

(39.6)

 

(990)

(1,349)

(26.6)

 

 

 

 

 

Total voice connections

 

(382)

(543)

(29.7)

 

(1,864)

(2,322)

(19.7)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Revenue & ARPU Statistics

 

 

 

 

 

 

 

 

 

 

 

 

 

Consumer ARPU

 

$ 96.43

$ 88.85

8.5

 

$ 93.07

$ 85.24

9.2

 

 

 

 

 

FiOS revenues (in millions)

 

$ 2,216

$ 1,875

18.2

 

$ 8,293

$ 6,904

20.1

 

 

 

 

 

Strategic services as a % of total Enterprise revenues

 

50.6%

44.8%

 

 

48.7%

43.1%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Other Operating Statistics

 

 

 

 

 

 

 

 

 

 

 

 

 

Capital expenditures (in millions)

 

$ 1,632

$ 2,171

(24.8)

 

$ 6,399

$ 7,269

(12.0)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Wireline employees (000)

 

 

 

 

 

91.8

92.3

 

 

 

 

 

 

FiOS Internet Open for Sale (000)

 

 

 

 

 

13,585

12,786

 

 

 

 

 

 

FiOS Internet penetration

 

 

 

 

 

35.5%

31.9%

 

 

 

 

 

 

FiOS Video Open for Sale (000)

 

 

 

 

 

13,250

12,388

 

 

 

 

 

 

FiOS Video penetration

 

 

 

 

 

31.5%

28.0%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Footnotes:

 

 

 

 

 

 

 

 

 

 

 

 

 

The segment financial results and metrics above are adjusted to exclude the effects of non-operational items, as the Company's chief operating decision maker excludes these items in assessing business unit performance.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Intersegment transactions have not been eliminated.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Certain reclassifications have been made, where appropriate, to reflect comparable operating results.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

*  Not meaningful

 

 


 

98

52

88.5

 

278

232

19.8

 

 

 

 

 

Primary residence switched access connections

 

(550)

(396)

38.9

 

(1,851)

(1,886)

(1.9)

 

 

 

 

 

Primary residence connections

 

(126)

(251)

(49.8)

 

(784)

(1,088)

(27.9)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total retail residence voice connections

 

(183)

(303)

(39.6)

 

(990)

(1,349)

(26.6)

 

 

 

 

 

Total voice connections

 

(382)

(543)

(29.7)

 

(1,864)

(2,322)

(19.7)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Revenue & ARPU Statistics

 

 

 

 

 

 

 

 

 

 

 

 

 

Consumer ARPU

 

$ 96.43

$ 88.85

8.5

 

$ 93.07

$ 85.24

9.2

 

 

 

 

 

FiOS revenues (in millions)

 

$ 2,216

$ 1,875

18.2

 

$ 8,293

$ 6,904

20.1

 

 

 

 

 

Strategic services as a % of total Enterprise revenues

 

50.6%

44.8%

 

 

48.7%

43.1%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Other Operating Statistics

 

 

 

 

 

 

 

 

 

 

 

 

 

Capital expenditures (in millions)

 

$ 1,632

$ 2,171

(24.8)

 

$ 6,399

$ 7,269

(12.0)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Wireline employees (000)

 

 

 

 

 

91.8

92.3

 

 

 

 

 

 

FiOS Internet Open for Sale (000)

 

 

 

 

 

13,585

12,786

 

 

 

 

 

 

FiOS Internet penetration

 

 

 

 

 

35.5%

31.9%

 

 

 

 

 

 

FiOS Video Open for Sale (000)

 

 

 

 

 

13,250

12,388

 

 

 

 

 

 

FiOS Video penetration

 

 

 

 

 

31.5%

28.0%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Footnotes:

 

 

 

 

 

 

 

 

 

 

 

 

 

The segment financial results and metrics above are adjusted to exclude the effects of non-operational items, as the Company's chief operating decision maker excludes these items in assessing business unit performance.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Intersegment transactions have not been eliminated.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Certain reclassifications have been made, where appropriate, to reflect comparable operating results.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

*  Not meaningful