VZ

VERIZON COMMUNICATIONS INC

Communication Services | Mega Cap

$1.12

EPS Forecast

$35,266

Revenue Forecast

Announcing earnings for the quarter ending 2024-12-31 soon
EX-99.1 2 a2022q4exhibit991.htm EX-99.1 Document

Exhibit 99.1
vzlogoa58.jpg

News Release

FOR IMMEDIATE RELEASE
Media contacts:
January 24, 2023Kim Ancin
908-559-3227
kimberly.ancin@verizon.com
Eric Wilkens
201-572-9317
eric.wilkens@verizon.com


Strong wireless service revenue growth
highlights Verizon's 4Q and 2022 results

Company enters 2023 with momentum
in wireless mobility and wireless broadband

2022 highlights

Consolidated:
•Full-year 2022 earnings per share (EPS) of $5.06, compared with $5.32 in 2021; adjusted EPS1, excluding special items, of $5.18, compared with 2021 adjusted EPS1 2 of $5.50.
•Total operating revenue of $136.8 billion in full-year 2022, up 2.4 percent year over year.

4Q 2022 highlights

Consolidated:
•$1.56 in EPS, compared with $1.11 in fourth-quarter 2021; adjusted EPS1, excluding special items, of $1.19, compared with $1.33 in fourth-quarter 20212.
•Total operating revenue of $35.3 billion, an increase of 3.5 percent from fourth-quarter 2021.
•Net income of $6.7 billion, an increase of 41.4 percent from fourth-quarter 2021, and adjusted EBITDA1 of $11.7 billion, down 0.2 percent year over year.

Total Wireless:
•Total wireless service revenue5 of $18.8 billion, a 5.9 percent increase year over year.
•Postpaid phone net additions3 of 217,000, and retail postpaid net additions3 of 1,434,000, which was the best single quarter performance in seven years. Full-year 2022 retail postpaid net additions3 were 2,605,000, an increase of 23.2 percent from full-year 2021. This success was driven by strong fixed wireless momentum, tablet and wearables adoption and sequential improvement in phone net additions.
•Total retail postpaid churn3 of 1.14 percent, and retail postpaid phone churn3 of 0.89 percent.



Total Broadband:
•Total broadband net additions of 416,000 was the best total broadband performance in over a decade, reflecting a strong demand for Fios and fixed wireless products. This result included 379,000 fixed wireless net additions, an increase of 37,000 fixed wireless net additions from third-quarter 2022. The company reported sequential quarterly net addition growth in fixed wireless throughout 2022. Full-year 2022 total broadband net additions were 1,290,000, an increase from 409,000 total broadband net additions in full-year 2021.
•59,000 Fios Internet net additions.

NEW YORK - Verizon Communications Inc. (NYSE, Nasdaq: VZ) closed 2022 with fourth-quarter results marked by wireless service revenue growth and the highest total wireless retail postpaid net additions3 in seven years.
"We delivered on the operational expectations and financial targets that we set in the second half of 2022," said Verizon Chairman and CEO Hans Vestberg. “We are rapidly building out our C-Band spectrum with the most aggressive network deployment in our company's history and are well positioned to improve and accelerate our performance. Wireless mobility and nationwide broadband will be two of the most significant contributors to our growth for the next several years."
For fourth-quarter 2022, Verizon reported EPS of $1.56, compared with $1.11 in fourth-quarter 2021. On an adjusted basis1, excluding special items, EPS was $1.19 in fourth-quarter 2022, compared with adjusted EPS1 of $1.33 in fourth-quarter 20212.
Fourth-quarter 2022 earnings included a pre-tax net gain from special items of approximately $2.1 billion. This included a net pre-tax benefit of approximately $2.5 billion related to a mark-to-market adjustment for pension and OPEB (other post-employment benefits) liabilities, a $304 million charge related to severance and the impacts of amortization of intangible assets related to TracFone and other acquisitions of $115 million.
For full-year 2022, Verizon reported $5.06 in EPS, compared with $5.32 for full-year 2021. On an adjusted basis1, excluding special items, 2022 EPS was $5.18, compared with $5.50 for 20212.
Consolidated results
•Total consolidated operating revenue in fourth-quarter 2022 of $35.3 billion, up 3.5 percent from fourth-quarter 2021. Revenue growth was driven by service and other revenue and equipment revenue. Full-year 2022 consolidated operating revenue was $136.8 billion, up 2.4 percent year over year.
•Total wireless service revenue5 in fourth-quarter 2022 increased 5.9 percent year over year. This increase was driven by unlimited plan migrations, the company's highest total wireless retail postpaid net additions in seven years, pricing actions that were implemented beginning in June
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2022 and a full quarter contribution from TracFone. Full-year 2022 wireless service revenue5 increased 8.6 percent year over year. The results for both fourth-quarter 2021 and full-year 2021 included a partial contribution from the acquisition of TracFone, which was completed in November 2021.
•Net income of $6.7 billion, an increase of 41.4 percent compared to fourth-quarter 2021, and adjusted EBITDA1 of $11.7 billion, a decline of 0.2 percent year over year.
•Cash flow from operations totaled $37.1 billion in 2022, a decrease from $39.5 billion in 2021. This decline was primarily driven by higher device payment receivables as the company's device payment portfolio increased by approximately $5 billion during 2022.

•Full-year 2022 capital expenditures were $23.1 billion, including C-Band spending of $6.2 billion.

•The company ended 2022 with free cash flow1 of $14.1 billion, a decrease from $19.3 billion at year-end 2021.
•Verizon's unsecured debt as of the end of fourth-quarter 2022 decreased by $766 million sequentially to $130.6 billion. The company's net unsecured debt1 balance decreased sequentially by $1.3 billion to $128.0 billion, and its net unsecured debt to adjusted EBITDA ratio1 at quarter-end was approximately 2.7 times.
Verizon Consumer results
•Total Verizon Consumer revenue was $26.8 billion, an increase of 4.2 percent year over year, driven by wireless service revenue. For full-year 2022, total Verizon Consumer revenue was $103.5 billion, an increase of 8.6 percent from full-year 2021.

•Wireless service revenue increased 6.1 percent year over year. For full-year 2022, total Consumer wireless service revenue was $61.5 billion, an increase of 9.6 percent from full-year 2021. This increase was driven by premium adoption, overall postpaid connection growth, pricing actions that were implemented beginning in June 2022 and the inclusion of TracFone results.

•Consumer wireless retail postpaid churn3 was 1.06 percent in fourth-quarter 2022, and wireless retail postpaid phone churn3 was 0.86 percent.

•In fourth-quarter 2022, Consumer reported 41,000 wireless retail postpaid phone net additions3. Consumer ended fourth-quarter 2022 with 59 percent of its postpaid wireless phone customers having 5G-capable devices.

•Consumer reported 175,000 wireless retail prepaid net losses3 in fourth-quarter 2022.

•Consumer reported 262,000 fixed wireless net additions and 56,000 Fios Internet net additions in fourth-quarter 2022. For full-year 2022, Consumer reported 776,000 fixed wireless net additions and 199,000 Fios Internet net additions. Consumer Fios revenue was $2.9 billion in fourth-quarter 2022, flat year over year. Full-year 2022 Consumer Fios revenue was $11.6 billion, an increase of 0.6 percent from full-year 2021.
•In fourth-quarter 2022, Consumer operating income was $7.0 billion, a decrease of 4.4 percent year over year, and segment operating income margin was 26.3 percent, a decrease from 28.6 percent in fourth-quarter 2021. Full-year 2022 Consumer operating income was $28.8 billion and segment operating income margin was 27.9 percent, a decrease from 31.4 percent in full-year 2021. Segment EBITDA1 in fourth-quarter 2022 was $10.1 billion, a decrease of 2.0 percent year over year. This decline was due to higher promotional expense related to device subsidies. Segment EBITDA margin1 was 37.9 percent, a decrease from 40.3 percent in fourth-quarter 2021.
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For the full year, segment EBITDA margin1 was 40.2 percent in 2022, a decrease from 43.7 percent in 2021.

Verizon Business results
•Total Verizon Business revenue was $7.9 billion in fourth-quarter 2022, an increase of 1.2 percent year over year. Growth was primarily driven by Small and Medium Business mobility, partially offset by wireline declines. For full-year 2022, total Verizon Business revenue was $31.1 billion, flat year over year, as strong wireless performance was offset by wireline declines.
•Business wireless service revenue was $3.3 billion, an increase of 4.7 percent year over year. This growth was driven predominantly by the continued momentum in adding more customers onto the platform. Full-year 2022 Business wireless service revenue was $12.8 billion, an increase of 3.9 percent compared to full-year 2021.
•Business reported 455,000 wireless retail postpaid net additions3 in fourth-quarter 2022, including 176,000 postpaid phone net additions3. This was the sixth consecutive quarter that Business reported more than 150,000 postpaid phone net additions.
•Business wireless retail postpaid churn3 was 1.38 percent in fourth-quarter 2022, and wireless retail postpaid phone churn3 was 1.06 percent.
•Business reported 117,000 fixed wireless net additions in fourth-quarter 2022.
•In fourth-quarter 2022, Verizon Business operating income was $585 million, a decrease of 26.5 percent year over year, and segment operating income margin was 7.4 percent, a decrease from 10.2 percent in fourth-quarter 2021. Full-year 2022 segment operating income was $2.6 billion and segment operating income margin was 8.5 percent, compared with 11.1 percent in full-year 2021. Segment EBITDA1 was $1.7 billion in fourth-quarter 2022, a decrease of 8.2 percent year over year, which reflected higher subsidies due to increased activations and sales-related expense, as well as declines in high margin wireline revenues. Segment EBITDA margin1 was 21.3 percent in fourth-quarter 2022, a decrease from 23.5 percent in fourth-quarter 2021. For the full year, segment EBITDA margin1 was 22.3 percent, a decrease from 24.2 percent in 2021.
Outlook and guidance
For 2023, Verizon expects the following:
•Total wireless service revenue growth4 5 of 2.5 percent to 4.5 percent.
•Adjusted EBITDA1 of $47.0 billion to $48.5 billion.
•Adjusted EPS1 of $4.55 to $4.85.
•Adjusted effective income tax rate1 in the range of 22.5 percent to 24.0 percent.
•Capital spending in the range of $18.25 billion to $19.25 billion, including the final approximately $1.75 billion of the incremental $10 billion of C-Band-related capital spending.
1Non-GAAP financial measure. See the accompanying schedules and www.verizon.com/about/investors for reconciliations of non-GAAP financial measures cited in this document to most directly comparable financial measures under generally accepted accounting principles (GAAP).

2Adjusted EPS for the prior year period has been reclassified to conform to current period presentation.

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3At the end of the fourth quarter of 2022, Verizon fully decommissioned its 3G network, as a result of which approximately 909,000 wireless retail postpaid connections (576,000 Consumer and 333,000 Business connections), including 392,000 wireless retail postpaid phone connections (180,000 Consumer and 212,000 Business connections), and 237,000 wireless retail prepaid connections were disconnected from its network. The impact of the 3G network shutdown has been excluded for purposes of calculating wireless retail net additions and wireless churn for the respective periods.

4Includes a benefit of approximately 190 basis points from the reallocation from Other revenue to Wireless service revenue. This results from a larger allocation of administrative and telco recovery charges which partly recover network operating costs.

5Total wireless service revenue represents the sum of Consumer and Business segments.

Verizon Communications Inc. (NYSE, Nasdaq: VZ) was formed on June 30, 2000 and is one of the world’s leading providers of technology and communications services. Headquartered in New York City and with a presence around the world, Verizon generated revenues of $136.8 billion in 2022. The company offers data, video and voice services and solutions on its award-winning networks and platforms, delivering on customers’ demand for mobility, reliable network connectivity, security and control.

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VERIZON’S ONLINE MEDIA CENTER: News releases, stories, media contacts and other resources are available at verizon.com/news. News releases are also available through an RSS feed. To subscribe, visit www.verizon.com/about/rss-feeds/.

Forward-looking statements
In this communication 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-looking statements also include those preceded or followed by the words “anticipates,” “believes,” “estimates,” “expects,” “forecasts,” “hopes,” “plans” or similar expressions. 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. We undertake no obligation to revise or publicly release the results of any revision to these forward-looking statements, except as required by law. Given these risks and uncertainties, readers are cautioned not to place undue reliance on such forward-looking statements. The following important factors, along with those discussed in our filings with the Securities and Exchange Commission (the “SEC”), could affect future results and could cause those results to differ materially from those expressed in the forward-looking statements: the effects of competition in the markets in which we operate, including any inability to successfully respond to competitive factors such as prices, promotional incentives and evolving consumer preferences; failure to take advantage of, or respond to competitors' use of, developments in technology and address changes in consumer demand; performance issues or delays in the deployment of our 5G network resulting in significant costs or a reduction in the anticipated benefits of the enhancement to our networks; the inability to implement our business strategy; adverse conditions in the U.S. and international economies, including inflation in the markets in which we operate; cyber attacks impacting our networks or systems and any resulting financial or reputational impact; damage to our infrastructure or disruption of our operations from natural disasters, extreme weather conditions, acts of war, terrorist attacks or other hostile acts and any resulting financial or reputational impact; the impact of public health crises on our operations, our employees and the ways in which our customers use our networks and other products and services; disruption of our key suppliers’ or vendors' provisioning of products or services, including as a result of geopolitical factors, public health crises or the potential impacts of global climate change; material adverse changes in labor matters and any resulting financial or operational impact; changes in the regulatory environment in which we operate, including any increase in restrictions on our ability to operate our networks or businesses; our high level of indebtedness; significant litigation and any resulting material expenses incurred in defending against lawsuits or paying awards or settlements; an adverse change in the ratings afforded our debt securities by nationally accredited ratings organizations or adverse conditions in the credit markets affecting the cost, including interest rates, and/or availability of further financing; significant increases in benefit plan costs or lower investment returns on plan assets; changes in tax laws or treaties, or in their interpretation; and changes in 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.

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Verizon Communications Inc.


Condensed Consolidated Statements of Income
(dollars in millions, except per share amounts)
Unaudited3 Mos. Ended 12/31/223 Mos. Ended 12/31/21%
Change		12 Mos. Ended 12/31/2212 Mos. Ended 12/31/21%
Change
Operating Revenues
Service revenues and other$27,626 $26,740 3.3$109,625 $110,449 (0.7)
Wireless equipment revenues7,625 7,327 4.127,210 23,164 17.5
Total Operating Revenues35,251 34,067 3.5136,835 133,613 2.4
Operating Expenses
Cost of services7,185 7,035 2.128,637 31,234 (8.3)
Cost of wireless equipment8,577 7,961 7.730,496 25,067 21.7
Selling, general and administrative expense8,046 7,412 8.630,136 28,658 5.2
Depreciation and amortization expense4,218 4,051 4.117,099 16,206 5.5
Total Operating Expenses28,026 26,459 5.9106,368 101,165 5.1
Operating Income7,225 7,608 (5.0)30,467 32,448 (6.1)
Equity in earnings of unconsolidated businesses4 135 (97.0)44 145 (69.7)
Other income (expense), net2,687 (860)*1,373 312 *
Interest expense(1,105)(739)49.5(3,613)(3,485)3.7
Income Before Provision For Income Taxes8,811 6,144 43.428,271 29,420 (3.9)
Provision for income taxes(2,113)(1,407)50.2(6,523)(6,802)(4.1)
Net Income$6,698 $4,737 41.4$21,748 $22,618 (3.8)
Net income attributable to noncontrolling interests$121 $124 (2.4)$492 $553 (11.0)
Net income attributable to Verizon6,577 4,613 42.621,256 22,065 (3.7)
Net Income$6,698 $4,737 41.4$21,748 $22,618 (3.8)
Basic Earnings Per Common Share
Net income attributable to Verizon$1.56 $1.11 40.5$5.06 $5.32 (4.9)
Weighted-average shares outstanding (in millions)4,204 4,167 4,202 4,148 
Diluted Earnings Per Common Share (1)
Net income attributable to Verizon$1.56 $1.11 40.5$5.06 $5.32 (4.9)
Weighted-average shares outstanding (in millions)4,207 4,169 4,204 4,150 
Footnotes:
(1)Diluted Earnings per Common Share includes the dilutive effect of shares issuable under our stock-based compensation plans, which represents the only potential dilution.
*Not meaningful

Verizon Communications Inc.


Condensed Consolidated Balance Sheets

(dollars in millions)
Unaudited12/31/2212/31/21$ Change
Assets
Current assets
Cash and cash equivalents$2,605 $2,921 $(316)
Accounts receivable25,332 24,742 590 
Less Allowance for credit losses826 896 (70)
Accounts receivable, net24,506 23,846 660 
Inventories2,388 3,055 (667)
Prepaid expenses and other8,358 6,906 1,452 
Total current assets37,857 36,728 1,129 
Property, plant and equipment307,689 289,897 17,792 
Less Accumulated depreciation200,255 190,201 10,054 
Property, plant and equipment, net107,434 99,696 7,738 
Investments in unconsolidated businesses1,071 1,061 10 
Wireless licenses149,796 147,619 2,177 
Goodwill28,671 28,603 68 
Other intangible assets, net11,461 11,677 (216)
Operating lease right-of-use assets26,130 27,883 (1,753)
Other assets17,260 13,329 3,931 
Total assets$379,680 $366,596 $13,084 
Liabilities and Equity
Current liabilities
Debt maturing within one year$9,963 $7,443 $2,520 
Accounts payable and accrued liabilities23,977 24,833 (856)
Current operating lease liabilities4,134 3,859 275 
Other current liabilities12,097 11,025 1,072 
Total current liabilities50,171 47,160 3,011 
Long-term debt140,676 143,425 (2,749)
Employee benefit obligations12,974 15,410 (2,436)
Deferred income taxes43,441 40,685 2,756 
Non-current operating lease liabilities21,558 23,203 (1,645)
Other liabilities18,397 13,513 4,884 
Total long-term liabilities237,046 236,236 810 
Equity
Common stock429 429 — 
Additional paid in capital13,420 13,861 (441)
Retained earnings82,380 71,993 10,387 
Accumulated other comprehensive loss(1,865)(927)(938)
Common stock in treasury, at cost(4,013)(4,104)91 
Deferred compensation – employee stock ownership plans and other793 538 255 
Noncontrolling interests1,319 1,410 (91)
Total equity92,463 83,200 9,263 
Total liabilities and equity$379,680 $366,596 $13,084 







Verizon Communications Inc.


Consolidated - Selected Financial and Operating Statistics

(dollars in millions, except per share amounts)
Unaudited12/31/2212/31/21
Total debt$150,639 $150,868 
Net unsecured debt(1)
$128,026 $133,745 
Net unsecured debt / Consolidated Adjusted EBITDA(1)(2)
2.7x2.8x
Common shares outstanding end of period (in millions)4,200 4,198 
Total employees (‘000)117.1 118.4 
Quarterly cash dividends declared per common share$0.6525 $0.6400 
Footnotes: 
(1)Non-GAAP financial measure.
(2)Consolidated Adjusted EBITDA excludes the effects of non-operational items and special items.

Verizon Communications Inc.


Condensed Consolidated Statements of Cash Flows
(dollars in millions)
Unaudited12 Mos. Ended 12/31/2212 Mos. Ended 12/31/21$ Change
Cash Flows from Operating Activities
Net Income$21,748 $22,618 $(870)
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization expense17,099 16,206 893 
Employee retirement benefits(2,046)(3,391)1,345 
Deferred income taxes2,973 4,264 (1,291)
Provision for expected credit losses1,611 789 822 
Equity in losses (earnings) of unconsolidated businesses, net of dividends received(10)36 (46)
Changes in current assets and liabilities, net of effects from acquisition/disposition of businesses
(456)(890)434 
Other, net(3,778)(93)(3,685)
Net cash provided by operating activities37,141 39,539 (2,398)
Cash Flows from Investing Activities
Capital expenditures (including capitalized software)(23,087)(20,286)(2,801)
Cash received (paid) related to acquisitions of businesses, net of cash acquired248 (4,065)4,313 
Acquisitions of wireless licenses(3,653)(47,596)43,943 
Collateral payments related to derivative contracts, net of repayments(2,265)(21)(2,244)
Proceeds from disposition of business33 4,122 (4,089)
Other, net62 693 (631)
Net cash used in investing activities(28,662)(67,153)38,491 
Cash Flows from Financing Activities
Proceeds from long-term borrowings7,074 33,034 (25,960)
Proceeds from asset-backed long-term borrowings10,732 8,383 2,349 
Net proceeds from short-term commercial paper106 — 106 
Repayments of long-term borrowings and finance lease obligations(8,616)(14,063)5,447 
Repayments of asset-backed long-term borrowings(4,948)(4,800)(148)
Dividends paid(10,805)(10,445)(360)
Other, net(2,072)(3,832)1,760 
Net cash provided by (used in) financing activities(8,529)8,277 (16,806)
Decrease in cash, cash equivalents and restricted cash(50)(19,337)19,287 
Cash, cash equivalents and restricted cash, beginning of period4,161 23,498 (19,337)
Cash, cash equivalents and restricted cash, end of period$4,111 $4,161 $(50)
Footnotes:
Certain amounts have been reclassified to conform to the current period presentation.

Verizon Communications Inc.


Consumer - Selected Financial Results
(dollars in millions)
Unaudited3 Mos. Ended 12/31/223 Mos. Ended 12/31/21%
Change		12 Mos. Ended 12/31/2212 Mos. Ended 12/31/21%
Change
Operating Revenues
Service$18,443 $17,564 5.0$73,139 $67,733 8.0
Wireless equipment6,528 6,320 3.323,168 19,781 17.1
Other1,799 1,813 (0.8)7,199 7,786 (7.5)
Total Operating Revenues26,770 25,697 4.2103,506 95,300 8.6
Operating Expenses
Cost of services4,450 4,251 4.717,746 16,581 7.0
Cost of wireless equipment7,137 6,666 7.125,134 20,523 22.5
Selling, general and administrative expense5,044 4,431 13.819,064 16,562 15.1
Depreciation and amortization expense3,111 3,000 3.712,716 11,679 8.9
Total Operating Expenses19,742 18,348 7.674,660 65,345 14.3
Operating Income$7,028 $7,349 (4.4)$28,846 $29,955 (3.7)
Operating Income Margin26.3 %28.6 %27.9 %31.4 %
Segment EBITDA(1)
$10,139 $10,349 (2.0)$41,562 $41,634 (0.2)
Segment EBITDA Margin(1)
37.9 %40.3 %40.2 %43.7 %
Footnotes:
(1) Non-GAAP financial measure.
The segment financial results and metrics above exclude the effects of special items (other than the effects of acquisition-related intangible asset amortization), which the Company’s chief operating decision maker does not consider in assessing segment performance.
Certain intersegment transactions with corporate entities have not been eliminated.
 

Verizon Communications Inc.


Consumer - Selected Operating Statistics
Unaudited12/31/2212/31/21% Change
Connections (‘000):
Wireless retail postpaid (1)
91,856 91,543 0.3
Wireless retail prepaid (1) (2)
22,664 23,852 (5.0)
Total wireless retail 114,520 115,395 (0.8)
Wireless retail postpaid phones (1)
74,857 75,712 (1.1)
Fios video 3,234 3,573 (9.5)
Fios internet6,740 6,541 3.0
Fixed wireless access (FWA) broadband884 101 *
Wireline broadband 7,016 6,888 1.9
Total broadband7,900 6,989 13.0
Unaudited3 Mos. Ended 12/31/223 Mos. Ended 12/31/21%
Change		12 Mos. Ended 12/31/2212 Mos. Ended 12/31/21%
Change
Gross Additions (‘000):
Wireless retail postpaid (3)
3,889 3,234 20.312,037 10,834 11.1
Net Additions Detail (‘000):
Wireless retail postpaid (1) (3)
979 667 46.8965 1,114 (13.4)
Wireless retail prepaid (1) (2) (3)
(175)(85)*(445)(52)*
Total wireless retail (3)
804 582 38.1520 1,062 (51.0)
Wireless retail postpaid phones (1) (3)
41 336 (87.8)(655)575 *
Fios video (80)(69)(15.9)(339)(281)(20.6)
Fios internet56 51 9.8199 339 (41.3)
FWA broadband (3)
262 38 *776 87 *
Wireline broadband 40 30 33.3128 241 (46.9)
Total broadband 302 68 *904 328 *
Churn Rate: (1)
Wireless retail postpaid1.06 %0.94 %1.01 %0.89 %
Wireless retail postpaid phones0.86 %0.77 %0.81 %0.71 %
Wireless retail prepaid (2) (3)
4.90 %4.73 %4.09 %4.44 %
Wireless retail1.83 %1.34 %1.63 %1.10 %
Revenue Statistics (in millions):
Wireless service revenue$15,539 $14,643 6.1$61,509 $56,103 9.6
Fios revenues$2,914 $2,910 0.1$11,622 $11,558 0.6

Verizon Communications Inc.


Consumer - Selected Operating Statistics (continued)
Unaudited3 Mos. Ended 12/31/223 Mos. Ended 12/31/21%
Change		12 Mos. Ended 12/31/2212 Mos. Ended 12/31/21%
Change
Other Wireless Statistics:
Wireless retail postpaid ARPA (4)
$128.02 $124.06 3.2$125.97 $122.30 3.0
Wireless retail postpaid upgrade rate
5.6 %6.3 %
Wireless retail postpaid accounts (‘000) (5)
33,183 33,651 (1.4)
Wireless retail postpaid connections per account (5)
2.77 2.72 1.8
Wireless retail prepaid ARPU (2) (6)
$31.53 $37.83 (16.7)$31.21 $36.70 (15.0)
Footnotes:
(1) The number of wireless retail connections as of December 31, 2022 reflects a decline in our customer base related to the shutdown of our 3G network in the fourth quarter of 2022 of approximately 576,000 wireless retail postpaid connections, including 180,000 wireless retail postpaid phone connections, and 237,000 wireless retail prepaid connections. In addition, the shutdown of our competitors' 3G network in the second and third quarter of 2022 resulted in a reduction to our customer base of 402,000 wireless retail prepaid connections and 102,000 wireless retail prepaid connections as of June 30, 2022 and September 30, 2022, respectively. The impact of the 3G network shutdowns has been excluded for purposes of calculating wireless retail net additions and wireless churn for the respective periods.
(2) Acquisition of TracFone Wireless, Inc. was completed on November 23, 2021.
(3) Includes certain adjustments.
(4) Wireless retail postpaid ARPA - average service revenue per account from retail postpaid accounts.
(5) Statistics presented as of end of period.
(6) Wireless retail prepaid ARPU - average service revenue per unit from retail prepaid connections.
Certain intersegment transactions with corporate entities have not been eliminated.
* Not meaningful


Verizon Communications Inc.


Business - Selected Financial Results
(dollars in millions)
Unaudited3 Mos. Ended 12/31/223 Mos. Ended 12/31/21%
Change		12 Mos. Ended 12/31/2212 Mos. Ended 12/31/21%
Change
Operating Revenues
Small and Medium Business$3,284 $3,112 5.5$12,613 $11,774 7.1
Global Enterprise2,423 2,530 (4.2)9,734 10,224 (4.8)
Public Sector and Other1,531 1,517 0.96,118 6,324 (3.3)
Wholesale662 651 1.72,607 2,720 (4.2)
Total Operating Revenues7,900 7,810 1.231,072 31,042 0.1
Operating Expenses
Cost of services2,665 2,587 3.010,483 10,653 (1.6)
Cost of wireless equipment1,440 1,296 11.15,362 4,544 18.0
Selling, general and administrative expense2,112 2,093 0.98,284 8,324 (0.5)
Depreciation and amortization expense1,098 1,038 5.84,312 4,084 5.6
Total Operating Expenses7,315 7,014 4.328,441 27,605 3.0
Operating Income$585 $796 (26.5)$2,631 $3,437 (23.5)
Operating Income Margin7.4 %10.2 %8.5 %11.1 %
Segment EBITDA(1)
$1,683 $1,834 (8.2)$6,943 $7,521 (7.7)
Segment EBITDA Margin(1)
21.3 %23.5 %22.3 %24.2 %
Footnotes:
(1) Non-GAAP financial measure.
The segment financial results and metrics above exclude the effects of special items (other than the effects of acquisition-related intangible asset amortization), which the Company’s chief operating decision maker does not consider in assessing segment performance.
Certain intersegment transactions with corporate entities have not been eliminated.

Verizon Communications Inc.


Business - Selected Operating Statistics
Unaudited12/31/2212/31/21%
Change
Connections (‘000):
Wireless retail postpaid (1)
28,733 27,411 4.8
Wireless retail postpaid phones (1)
17,782 17,103 4.0
Fios video 67 71 (5.6)
Fios internet 373 356 4.8
FWA broadband568 122 *
Wireline broadband 468 477 (1.9)
Total broadband1,036 599 73.0
Unaudited3 Mos. Ended 12/31/223 Mos. Ended 12/31/21%
Change		12 Mos. Ended 12/31/2212 Mos. Ended 12/31/21%
Change
Gross Additions (‘000):
Wireless retail postpaid (2)
1,644 1,417 16.06,294 5,092 23.6
Net Additions Detail (‘000):
Wireless retail postpaid (1) (2)
455 391 16.41,640 1,001 63.8
Wireless retail postpaid phones (1) (2)
176 222 (20.7)856 509 68.2
Fios video(2)(1)*(4)(2)*
Fios internet3 4 (25.0)17 21 (19.0)
FWA broadband (2)
117 40 *395 86 *
Wireline broadband (2)
(3)(2)(50.0)(9)(5)(80.0)
Total broadband 114 38 *386 81 *
Churn Rate: (1)
Wireless retail postpaid1.38 %1.26 %1.38 %1.27 %
Wireless retail postpaid phones1.06 %1.01 %1.07 %1.03 %
Revenue Statistics (in millions):
Wireless service revenue$3,265 $3,119 4.7$12,845 $12,366 3.9
Fios revenues$304 $292 4.1$1,201 $1,136 5.7
Other Operating Statistics:
Wireless retail postpaid upgrade rate3.6 %3.4 %
Footnotes:
(1) The number of wireless retail connections as of December 31, 2022 reflects a decline in our customer base related to the shutdown of our 3G network in the fourth quarter of 2022 of approximately 333,000 wireless retail postpaid connections, including 212,000 wireless retail postpaid phone connections. The impact of the 3G network shutdown has been excluded for purposes of calculating wireless retail net additions and wireless churn for the respective periods.
(2) Includes certain adjustments.
Certain intersegment transactions with corporate entities have not been eliminated.
*Not meaningful


Verizon Communications Inc.


Supplemental Information - Total Wireless Operating and Financial Statistics

The following supplemental schedule contains certain financial and operating metrics which reflect an aggregation of our Consumer and Business segments’ wireless results.
Unaudited12/31/2212/31/21% Change
Connections (‘000) (1)
Retail postpaid120,589 118,954 1.4
Retail prepaid (2)
22,664 23,852 (5.0)
Total retail143,253 142,806 0.3
Retail postpaid phones92,639 92,815 (0.2)
Unaudited3 Mos. Ended 12/31/223 Mos. Ended 12/31/21%
Change		12 Mos. Ended 12/31/2212 Mos. Ended 12/31/21%
Change
Net Additions Detail (‘000) (1) (3)
Retail postpaid phones217 558 (61.1)201 1,084 (81.5)
Retail postpaid1,434 1,058 35.52,605 2,115 23.2
Retail prepaid (2)
(175)(85)*(445)(52)*
Total retail1,259 973 29.42,160 2,063 4.7
Account Statistics
Retail postpaid accounts (‘000) (4)
35,002 35,332 (0.9)
Retail postpaid connections per account (4)
3.45 3.37 2.4
Retail postpaid ARPA (5)
$149.95 $144.88 3.5$147.53 $143.18 3.0
Retail prepaid ARPU (2) (6)
31.53 37.83 (16.7)$31.21 $36.70 (15.0)
Churn Detail (1)
Retail postpaid phone0.89 %0.81 %0.86 %0.77 %
Retail postpaid1.14 %1.01 %1.10 %0.98 %
Retail prepaid (2) (3)
4.90 %4.73 %4.09 %4.44 %
Retail1.74 %1.32 %1.58 %1.14 %
Retail Postpaid Connection Statistics
Upgrade rate5.1 %5.7 %
Revenue Statistics (in millions) (7)
Wireless service$18,804 $17,762 5.9$74,354 $68,469 8.6
Wireless equipment7,625 7,327 4.127,210 23,164 17.5
Wireless other1,851 1,840 0.67,391 7,855 (5.9)
Total Wireless$28,280 $26,929 5.0$108,955 $99,488 9.5
Footnotes:
(1) The number of wireless retail connections as of December 31, 2022 reflects a decline in our customer base related to the shutdown of our 3G network in the fourth quarter of 2022 of approximately 909,000 wireless retail postpaid connections (576,000 Consumer and 333,000 Business connections), including 392,000 wireless retail postpaid phone connections (180,000 Consumer and 212,000 Business connections), and 237,000 wireless retail prepaid connections. In addition, the shutdown of our competitors' 3G network in the second and third quarter of 2022 resulted in a reduction to our customer base of 402,000 wireless retail prepaid connections and 102,000 wireless retail prepaid connections as of June 30, 2022 and September 30, 2022, respectively. The impact of the 3G network shutdowns has been excluded for purposes of calculating wireless retail net additions and wireless churn for the respective periods.
(2) Acquisition of TracFone Wireless, Inc. was completed on November 23, 2021.
(3) Includes certain adjustments.
(4) Statistics presented as of end of period.
(5) Wireless retail postpaid ARPA - average service revenue per account from retail postpaid accounts.
(6) Wireless retail prepaid ARPU - average service revenue per unit from retail prepaid connections.
(7) Intersegment transactions between Consumer or Business segment with corporate entities have not been eliminated.
*Not meaningful

Verizon Communications Inc.


Non-GAAP Reconciliations - Consolidated Verizon
Consolidated EBITDA and Consolidated Adjusted EBITDA
(dollars in millions)
Unaudited3 Mos. Ended 12/31/223 Mos. Ended 9/30/223 Mos. Ended 6/30/223 Mos. Ended 3/31/223 Mos. Ended 12/31/213 Mos. Ended 9/30/213 Mos. Ended 6/30/213 Mos. Ended 3/31/21
Consolidated Net Income$6,698 $5,024 $5,315 $4,711 $4,737 $6,554 $5,949 $5,378 
  Add:
Provision for income taxes2,113 1,496 1,542 1,372 1,407 1,820 1,875 1,700 
Interest expense1,105 937 785 786 739 801 844 1,101 
Depreciation and amortization expense (1)
4,218 4,324 4,321 4,236 4,051 3,961 4,020 4,174 
Consolidated EBITDA$14,134 $11,781 $11,963 $11,105 $10,934 $13,136 $12,688 $12,353 
  Add/(subtract):
Other (income) expense, net (2)
$(2,687)$439 $(49)$924 $860 $(269)$(502)$(401)
Equity in losses (earnings) of unconsolidated businesses (3)
(4)(2)(41)3 (135)(1)(1)(8)
Severance charges304 — — — 106 103 — — 
Loss on spectrum licenses— — — — — — — 223 
Net gain from disposition of business— — — — — (706)— — 
(2,387)437 (90)927 831 (873)(503)(186)
Consolidated Adjusted EBITDA$11,747 $12,218 $11,873 $12,032 $11,765 $12,263 $12,185 $12,167 
Consolidated Adjusted EBITDA - Year Over Year Change(0.2)%
Footnotes:
(1) Includes Amortization of acquisition-related intangible assets.
(2) Includes Pension and benefits remeasurement adjustments and Early debt redemption costs, where applicable.
(3) Includes Net gain from disposition of assets, where applicable.    
    
Net Unsecured Debt and Net Unsecured Debt to Consolidated Adjusted EBITDA Ratio
(dollars in millions)
Unaudited12/31/229/30/2212/31/21
Debt maturing within one year$9,963 $14,995 $7,443 
Long-term debt140,676 132,912 143,425 
Total Debt150,639 147,907 150,868 
Less Secured debt20,008 16,510 14,202 
Unsecured Debt130,631 131,397 136,666 
Less Cash and cash equivalents2,605 2,082 2,921 
Net Unsecured Debt
$128,026 $129,315 $133,745 
Net Unsecured Debt to Consolidated Adjusted EBITDA Ratio2.7x2.8x
Unsecured Debt - Quarter over quarter change$(766)
Net Unsecured Debt - Quarter over quarter change$(1,289)


Verizon Communications Inc.


Adjusted Earnings per Common Share (Adjusted EPS)
(dollars in millions, except per share amounts)
Unaudited3 Mos. Ended 12/31/223 Mos. Ended 12/31/21
Pre-taxTaxAfter-Tax Pre-taxTaxAfter-Tax 
EPS$1.56 $1.11 
Amortization of acquisition-related intangible assets$115 $(34)$81 0.02 $135 $(33)$102 0.02 
Severance, pension and benefits credits(2,214)552 (1,662)(0.40)(1,103)268 (835)(0.20)
Early debt redemption costs— — — — 2,409 (629)1,780 0.43 
Net gain from disposition of asset— — — — (131)30 (101)(0.02)
$(2,099)$518 $(1,581)$(0.38)$1,310 $(364)$946 $0.23 
Adjusted EPS$1.19 $1.33 
Footnotes:
Adjusted EPS may not add due to rounding.
Certain amounts have been reclassified to conform to the current period presentation.

Adjusted Earnings per Common Share (Adjusted EPS)
(dollars in millions, except per share amounts)
Unaudited12 Mos. Ended 12/31/2212 Mos. Ended 12/31/21
Pre-taxTaxAfter-Tax Pre-taxTaxAfter-Tax 
EPS$5.06 $5.32 
Amortization of acquisition-related intangible assets$826 $(214)$612 0.15 $594 $(145)$449 0.11 
Severance, pension and benefits credits(1,371)339 (1,032)(0.25)(2,170)539 (1,631)(0.39)
Early debt redemption costs1,241 (316)925 0.22 3,541 (917)2,624 0.63 
Net gain from disposition of asset and business— — — — (837)— (837)(0.20)
Loss on spectrum licenses— — — — 223 (56)167 0.04 
$696 $(191)$505 $0.12 $1,351 $(579)$772 $0.19 
Adjusted EPS$5.18 $5.50 
Footnotes:
Adjusted EPS may not add due to rounding.
Certain amounts have been reclassified to conform to the current period presentation.
Free Cash Flow
(dollars in millions)
Unaudited12 Mos. Ended 12/31/2212 Mos. Ended 12/31/21
Net Cash Provided by Operating Activities$37,141 $39,539 
Capital expenditures (including capitalized software)(23,087)(20,286)
Free Cash Flow$14,054 $19,253 

Verizon Communications Inc.
Non-GAAP Reconciliations - Segments
Segment EBITDA and Segment EBITDA Margin
Consumer
(dollars in millions)
Unaudited3 Mos. Ended 12/31/223 Mos. Ended 12/31/2112 Mos. Ended 12/31/2212 Mos. Ended 12/31/21
Operating Income$7,028 $7,349 $28,846 $29,955 
Add Depreciation and amortization expense3,111 3,000 12,716 11,679 
Segment EBITDA$10,139 $10,349 $41,562 $41,634 
Year over year change %(2.0)%(0.2)%
Total operating revenues$26,770 $25,697 $103,506 $95,300 
Operating Income Margin26.3 %28.6 %27.9 %31.4 %
Segment EBITDA Margin37.9 %40.3 %40.2 %43.7 %
Business
(dollars in millions)
Unaudited3 Mos. Ended 12/31/223 Mos. Ended 12/31/2112 Mos. Ended 12/31/2212 Mos. Ended 12/31/21
Operating Income$585 $796 $2,631 $3,437 
Add Depreciation and amortization expense1,098 1,038 4,312 4,084 
Segment EBITDA$1,683 $1,834 $6,943 $7,521 
Year over year change %(8.2)%(7.7)%
Total operating revenues$7,900 $7,810 $31,072 $31,042 
Operating Income Margin7.4 %10.2 %8.5 %11.1 %
Segment EBITDA Margin21.3 %23.5 %22.3 %24.2 %