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 January24, 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.
Consolidated Operating Revenues Excluding Divested
Businesses and AOL
Verizon consolidated operating revenues excluding Divested
Businesses and AOL 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 since the sale of local landline businesses
in California, Florida and Texas (Divested Businesses) was
completed on April1, 2016 and AOL was acquired on June23, 2015.
Consolidated operating revenues excluding Divested Businesses and
AOL is calculated by subtracting operating revenues from the
Divested Businesses and operating revenues from AOL from
consolidated operating revenues.
Operating Revenues from Digital Media Business net of
Traffic Acquisition Costs
Operating Revenues from Digital 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
digital 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 our competitors in this market segment. Therefore, our
Operating Revenues from Digital Media Business net of TAC may not
be directly comparable to those of our competitors.
Operating Revenues from Digital Media Business net of TAC is
calculated by subtracting TAC from operating revenues from our
digital media business, which includes intersegment 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 (loss). 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 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 January24, 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 -0.38 at 49.74 with 43,484,680 shares trading hands.