Verizon Communications Inc. (NYSE:VZ) Files An 8-K Results of Operations and Financial Condition
Item2.02. Results of Operations and Financial Condition
Attached as an exhibit hereto are a press release and financial
tables dated April20, 2017 issued by Verizon Communications Inc.
(Verizon).
NON-GAAP MEASURES
Verizons press release and financial tables include financial
information prepared in conformity with generally accepted
accounting principles (GAAP) as well as non-GAAP financial
information. It is managements intent to provide non-GAAP
financial information to enhance the understanding of Verizons
GAAP financial information and it should be considered by the
reader in addition to, but not instead of, the financial
statements prepared in accordance with GAAP. Each non-GAAP
financial measure is presented along with the corresponding GAAP
measure so as not to imply that more emphasis should be placed on
the non-GAAP measure. We believe that non-GAAP measures provide
relevant and useful information, which is used by management,
investors and other users of our financial information in
assessing both consolidated and segment performance. The non-GAAP
financial information presented may be determined or calculated
differently by other companies and may not be directly comparable
to that of other companies.
Consolidated Operating Revenues Excluding Divested
Businesses and Acquisitions
Verizon Consolidated Operating Revenues Excluding Divested
Businesses and Acquisitions is a non-GAAP financial measure
that we believe is useful to management, investors and other
users of our financial information in evaluating our revenue
growth and trends on a comparable basis because it excludes
operating revenues from the local landline businesses in
California, Florida and Texas divested on April1, 2016 (Divested
Businesses) which are no longer reflected in first quarter 2017
results and it excludes operating revenues from XO Holdings
wireline business (XO) (acquired on February1, 2017), Fleetmatics
Group PLC (acquired on November7, 2016) and Telogis, Inc.
(acquired on July29, 2016), (collectively, Acquisitions) which
are not reflected in first quarter 2016 results.
Consolidated
Operating Revenues Excluding Divested Businesses and Acquisitions
is calculated by subtracting operating revenues from Divested
Businesses and Acquisitions from consolidated operating
revenues.
Operating
Revenues from Media Business net of Traffic Acquisition
Costs
Operating Revenues
from Media Business net of Traffic Acquisition Costs (TAC) is a
non-GAAP financial measure that we believe is useful to
management, investors and other users of our financial
information in evaluating the financial performance of our
business. TAC consists of costs incurred through arrangements in
which we acquire third-party online advertising inventory for
resale and arrangements whereby partners direct traffic to our
media business. We believe that this measure enhances the
comparability of these revenues to those of our competitors.
However, comparable activity may be measured differently by other
companies and our revenue sources and TAC may be different than
those of other companies.
Operating Revenues
from Media Business net of TAC is calculated by subtracting TAC
from operating revenues from our media business, which includes
intersegment revenues.
IoT
Revenues Excluding Acquisitions
IoT Revenues
Excluding Acquisitions is a non-GAAP financial measure that we
believe is useful to management, investors and other users of our
financial information in evaluating our IoT revenue growth and
trends on a comparable basis since it excludes operating revenues
from Fleetmatics Group PLC (acquired on November7, 2016) and
Telogis, Inc. (acquired on July29, 2016) which are not reflected
in first quarter 2016 results.
IoT Revenues
Excluding Acquisitions is calculated by subtracting operating
revenues from Fleetmatics and Telogis from IoT revenues.
Wireline
Operating Revenues Excluding Acquisition
Wireline Operating
Revenues Excluding Acquisition is a non-GAAP financial measure
that we believe is useful to management, investors and other
users of our financial information in evaluating our Wireline
revenue growth and trends on a comparable basis since operating
revenues from XO (acquired on February1, 2017) are not reflected
in first quarter 2016 results.
Wireline Operating
Revenues Excluding Acquisition is calculated by subtracting
operating revenues from XO from Wireline operating
revenues.
EBITDA and
EBITDA Margin
Verizon
consolidated earnings before interest, taxes, depreciation and
amortization (Consolidated EBITDA), Consolidated EBITDA Margin,
Segment EBITDA, and Segment EBITDA Margin are non-GAAP financial
measures that we believe are useful to management, investors and
other users of our financial information in evaluating operating
profitability on a more variable cost basis as they exclude
depreciation and amortization expense related primarily to
capital expenditures and acquisitions that occurred in prior
periods, as well as in evaluating operating performance in
relation to Verizons competitors.
Consolidated
EBITDA is calculated by adding back interest, taxes, depreciation
and amortization expense, equity in losses of unconsolidated
businesses and other (income) and expense, net to net income.
Consolidated EBITDA Margin is calculated by dividing Consolidated
EBITDA by consolidated operating revenues.
Segment EBITDA is
calculated by adding back depreciation and amortization expense
to segment operating income. Segment EBITDA Margin is calculated
by dividing Segment EBITDA by segment total operating
revenues.
Consolidated Adjusted
EBITDA
Verizon
consolidated adjusted EBITDA (Consolidated Adjusted EBITDA) is a
non-GAAP financial measure that we believe provides relevant and
useful information to management, investors and other users of
our financial information in evaluating the effectiveness of our
operations and underlying business trends in a manner that is
consistent with managements evaluation of business performance.
We believe Consolidated Adjusted EBITDA is widely used by
investors to compare a companys operating performance to its
competitors by minimizing impacts caused by differences in
capital structure, taxes and depreciation policies. Further, the
exclusion of non-operational items and impact of Divested
Businesses enable comparability to prior period performance and
trend analysis. Consolidated Adjusted EBITDA is also used by
rating agencies, lenders and other parties to evaluate our
creditworthiness.
Consolidated
Adjusted EBITDA is calculated by excluding from Consolidated
EBITDA the effect of (1)non-operational items such as actuarial
gains or losses arising from the re-measurements of pension and
other postretirement benefits, severance costs, gain on sale of
Divested Businesses and gain on spectrum license transactions;
and (2)the impact of Divested Businesses.Actuarial gains or
losses as a result of the re-measurements of pension and other
postretirement benefits are included in our operating expenses
and are measured based on projected discount rates and estimated
returns on plan assets. Such estimates are updated at least
annually at the end of the fiscal year to reflect actual discount
rates and returns on plan assets or more frequently if
significant events arise which require an interim re-measurement.
We believe the exclusion of these re-measurement gains or losses
enables management, investors and other users of our financial
information to assess our sequential and year-over-year
performance on a more comparable basis and is consistent with
managements own evaluation of performance.
Net Debt
and Net Debt to Consolidated Adjusted EBITDA
Ratio
Net Debt and Net
Debt to Consolidated Adjusted EBITDA Ratio are non-GAAP financial
measures that we believe are useful to management, investors and
other users of our financial information in evaluating Verizons
ability to service its debt.
Net Debt is
calculated by subtracting cash and cash equivalents from the sum
of debt maturing within one year and long-term debt. For purposes
of Net Debt to Consolidated Adjusted EBITDA Ratio, Consolidated
Adjusted EBITDA is calculated for the last twelve months.
Adjusted
Earnings per Common Share
Adjusted Earnings
per Common Share (Adjusted EPS) is a non-GAAP financial measure
that we believe is useful to management, investors and other
users of our financial information in evaluating our operating
results and understanding our operating trends without the effect
of non-operational items. We believe that excluding
non-operational items provides more meaningful comparisons of our
financial results from period to period.
Adjusted EPS is
calculated by excluding the effect of non-operational items such
as actuarial gains or losses arising from the re-measurement of
pension and other postretirement benefits and severance costs,
early debt redemption costs and gain on spectrum license
transactions from the calculation of reported EPS.
See the
accompanying schedules for reconciliations of non-GAAP financial
measures to GAAP.
Item9.01.
Financial Statements and Exhibits
| (d) Exhibits. | ||
| Exhibit Number | Description | |
|
Press release and financial tables, dated April20, 2017, issued by Verizon Communications Inc. |
About Verizon Communications Inc. (NYSE:VZ)
Verizon Communications Inc. (Verizon) is a holding company. The Company, through its subsidiaries, provides communications, information and entertainment products and services to consumers, businesses and governmental agencies. The Company offers voice, data and video services and solutions on its wireless and wireline networks. The Company’s segments include Wireless and Wireline. The Wireless segment offers communications products and services, including wireless voice and data services and equipment sales that are provided to consumer, business and government customers across the United States. The Wireline’s segment offers voice, data and video communications products and services, such as broadband video and data, corporate networking solutions, data center and cloud services, security and managed network services and local and long distance voice services. The Company provides these products and services to consumers as well as to carriers, businesses and government customers. Verizon Communications Inc. (NYSE:VZ) Recent Trading Information
Verizon Communications Inc. (NYSE:VZ) closed its last trading session down -0.28 at 48.94 with 18,837,325 shares trading hands.