Verizon Communications : Current Report

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

_____________________________________________________________________________

FORM 8-K

______________________________________________________________________________

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the

Securities Exchange Act of 1934

Date of Report: April 23, 2019

(Date of earliest event reported)

______________________________________________________________________________

Verizon Communications Inc.

(Exact name of registrant as specified in its charter)

_______________________________________________________________________________

Delaware	1-8606	23-2259884
(State or other jurisdiction of incorporation)	(Commission File Number)	(I.R.S. Employer Identification No.)
1095 Avenue of the Americas New York, New York		10036
(Address of principal executive offices)		(Zip Code)

Registrant's telephone number, including area code: [phone]

Not Applicable

(Former name or former address, if changed since last report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

[ ] Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

[ ] Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

[ ] Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

[ ] Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

[ ] Emerging growth company

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period or complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. [ ]

Item 2.02. Results of Operations and Financial Condition

Attached as an exhibit hereto are a press release and financial tables dated April 23, 2019 issued by Verizon Communications Inc. (Verizon).

Non-GAAP Measures

Verizon's press release and financial tables include financial information prepared in conformity with generally accepted accounting principles in the United States (GAAP) as well as non-GAAP financial information. It is management's intent to provide non-GAAP financial information to enhance the understanding of Verizon's 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.

EBITDA and EBITDA Margin Related Non-GAAP Measures

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 Verizon's competitors.

Consolidated EBITDA is calculated by adding back interest, taxes and depreciation and amortization expense 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 and Consolidated Adjusted EBITDA Margin Related Non-GAAP Measures

Consolidated Adjusted EBITDA and Consolidated Adjusted EBITDA Margin are non-GAAP financial measures that we believe provide 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 management's evaluation of business performance. We believe that Consolidated Adjusted EBITDA and Consolidated Adjusted EBITDA Margin are used by investors to compare a company's 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 special items enables comparability to prior period performance and trend analysis.

Consolidated Adjusted EBITDA is calculated by excluding from Consolidated EBITDA the effect of the following non-operational items: equity in losses and earnings of unconsolidated businesses and other income and expense, net, and the following special items: Oath goodwill impairment, severance charges, product realignment charges and acquisition and integration related charges. Oath goodwill impairment relates to impairment charges recognized in the fourth quarter of 2018 as a result of the Company's annual goodwill impairment testing of its Media business, Verizon Media, which operated in 2018 under the 'Oath' brand. Severance charges recorded during 2018 are primarily related to the voluntary separation program and other headcount reduction initiatives. Product realignment charges primarily relate to the discontinuation of the go90 platform and associated content. Acquisition and integration related charges represent transaction expenses related to business acquisitions and incremental expenses directly incurred to integrate the acquired businesses into our operations.

Consolidated Adjusted EBITDA Margin is calculated by dividing Consolidated Adjusted EBITDA by Consolidated Operating Revenues.

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 Verizon's 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. Net Debt to Consolidated Adjusted EBITDA Ratio is calculated by dividing Net Debt by Consolidated Adjusted EBITDA. For

purposes of Net Debt to Consolidated Adjusted EBITDA Ratio, Consolidated Adjusted EBITDA is calculated for the last twelve months.

Net Unsecured Debt and Net Unsecured Debt to Consolidated Adjusted EBITDA Ratio

Net Unsecured Debt and Net Unsecured 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 Verizon's ability to service its unsecured debt from continuing operations.

Net Unsecured Debt is calculated by subtracting secured debt and cash and cash equivalents from the sum of debt maturing within one year and long-term debt. Net Unsecured Debt to Consolidated Adjusted EBITDA Ratio is calculated by dividing Net Unsecured Debt by Consolidated Adjusted EBITDA. For purposes of Net Unsecured 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 special items. We believe excluding special items provides more comparable assessment of our financial results from period to period.

Adjusted EPS is calculated by excluding the effect of the following special items: a pension remeasurement credit, early debt redemption costs and acquisition and integration related charges, from the calculation of reported EPS.

See the accompanying schedules for reconciliations of non-GAAP financial measures to GAAP.

Item 9.01. Financial Statements and Exhibits

(d) Exhibits.
Exhibit Number		Description
99		Press release and financial tables, dated April 23, 2019, issued by Verizon Communications Inc.

SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

						Verizon Communications Inc.
						(Registrant)
Date:		April 23, 2019				/s/ Anthony T. Skiadas
						Anthony T. Skiadas
						Senior Vice President and Controller

EXHIBIT INDEX

Exhibit Number		Description
		Press release and financial tables, dated April 23, 2019, issued by Verizon Communications Inc.

Exhibit 99

News Release

FOR IMMEDIATE RELEASE	Media contacts:
April 23, 2019	Bob Varettoni
	908.559.6388
	[e-mail]
	Eric Wilkens
	908.559.3063
	[e-mail]

Verizon reports strong 1Q operational performance, while

raising earnings guidance for full-year 2019

1Q 2019 highlights

Consolidated:

•	$1.22 in earnings per share (EPS), compared with $1.11 in 1Q 2018; adjusted EPS (non-GAAP) of $1.20 , excluding a special item, compared with $1.17 in 1Q 2018.

•	Total consolidated revenue growth of 1.1 percent year over year, to $32.1 billion .

Wireless:

•	61,000 retail postpaid net additions, including 174,000 postpaid smartphone net additions.

•	Retail postpaid churn of 1.12 percent, and retail postpaid phone churn of 0.84 percent.

•	Service revenue growth of 4.4 percent year over year.

•	Total revenue growth of 3.7 percent year over year to $22.7 billion .

Wireline:

•	52,000 Fios Internet net additions; Fios total revenue growth of 3.6 percent year over year.

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NEW YORK - As the 5G mobility era begins, Verizon Communications Inc. (NYSE, Nasdaq: VZ) today reported first-quarter 2019 results highlighted by continued wireless service revenue growth and strong earnings per share.

'Verizon began 2019 by extending our leadership position in 4G, driving innovation in 5G and expanding our high-valued customer relationships,' said Chairman and CEO Hans Vestberg. '2019 is shaping up to be an exciting year for Verizon. We are leading the world in the development of new technologies with the launch of our 5G Ultra Wideband network. Our ambition remains unchanged to provide the most advanced next-generation networks in the world.'

For first-quarter 2019, Verizon reported EPS of $1.22 , compared with $1.11 in first-quarter 2018. On an adjusted basis (non-GAAP), first-quarter 2019 EPS was $1.20 , excluding a special item, compared with adjusted EPS of $1.17 in first-quarter 2018. Verizon's first-quarter 2019 EPS included a 2 cent benefit due to a pension re-measurement triggered by the company's Voluntary Separation Program.

In first-quarter 2019, Verizon faced headwinds as a result of a reduction in benefits from the adoption of a revenue recognition standard, primarily due to the deferral of commission expense, and the adoption of a lease accounting standard. The combined impact was a 4 cent year-over-year headwind to EPS.

Consolidated results

Total consolidated operating revenues in first-quarter 2019 were $32.1 billion , up 1.1 percent from first-quarter 2018, primarily driven by strong wireless service revenue growth.

Cash flow from operations totaled $7.1 billion in first-quarter 2019, an increase of approximately $400 million year over year. This increase was driven by the continued momentum in Verizon's operating businesses and lower discretionary employee benefits contributions, partially offset by the first -- and largest -- of three payments related to the Voluntary Separation Program.

First-quarter 2019 capital expenditures totaled $4.3 billion . Verizon's capital expenditures continue to support the launch and continued build-out of its 5G Ultra Wideband network, the growth in data and video traffic on the company's 4G LTE network, the deployment of significant fiber in markets nationwide and the upgrade to Verizon's Intelligent Edge Network.

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In 2018, Verizon announced a goal to achie ve $10 billion in cumulative cash savings by 2021. This initiative has yielded approximately $3.0 billion of cumulative cash savings since this program began. By the end of first-quarter 2019, Verizon completed the first two phases of its Voluntary Separation Program and realized approximately $180 million of expense savings. These savings are expected to contribute to the company's cumulative cash savings goal.

For first-quarter 2019, Verizon Media revenues were $1.8 billion, down 7.2 percent year over year. Declines in desktop advertising continue to more than offset growth in mobile and native advertising.

Net income was $5.2 billion in first-quarter 2019. EBITDA (non-GAAP, earnings before interest, taxes, depreciation and amortization) totaled approximately $12.2 billion . Consolidated operating income margin was 24.0 percent. Consolidated EBITDA margin (non-GAAP) was 38.1 percent in first-quarter 2019, compared with 36.4 percent in first-quarter 2018. Adjusted EBITDA margin (non-GAAP) in first-quarter 2019 was 37.2 percent.

Wireless results

•	Verizon reported 61,000 retail postpaid net additions in first-quarter 2019, consisting of 44,000 phone net losses and tablet net losses of 156,000, offset by 261,000 other connected device net additions, primarily wearables. Postpaid smartphone net additions were 174,000 .

•	Total revenues were $22.7 billion , an increase of 3.7 percent year over year, primarily driven by continued strong service revenue performance.

•	Service revenues increased 4.4 percent in first-quarter 2019, driven by customer step-ups to higher-priced plans, contributions from strong retail postpaid net additions in fourth-quarter 2018 and an increase in connections per account.

•	Total retail postpaid churn was 1.12 percent in first-quarter 2019, and retail postpaid phone churn was 0.84 percent.

•	Segment operating income was $8.5 billion , an increase of 5.2 percent year over year. Segment EBITDA (non-GAAP) totaled $10.8 billion in first-quarter 2019, an increase of 2.7 percent year over year. Segment EBITDA margin (non-GAAP) was 47.4 percent, including approximately 85 basis points in headwinds primarily from the deferral of commission expense and the new lease accounting standard.

Wireline results

•	Total wireline revenues decreased 3.9 percent year over year in first-quarter 2019 to $7.3 billion , as growth in high-quality fiber products was offset by pricing pressures on legacy products and technology shifts.

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•	Total Fios revenues grew 3.6 percent year over year to $3.1 billion . In first-quarter 2019, Verizon added a net of 52,000 Fios Internet connections and lost a net of 53,000 Fios Video connections, continuing to reflect the shift from traditional linear video to over-the-top offerings.

•	Wireline operating loss was $88 million in first-quarter 2019, and segment operating loss margin was 1.2 percent. Segment EBITDA (non-GAAP) was $1.5 billion in first-quarter 2019. Segment EBITDA margin (non-GAAP) was 20.3 percent in first-quarter 2019, compared with 21.2 percent in first-quarter 2018.

Outlook and guidance

Based on the strength of the operational trends in the underlying business, Verizon is raising earnings guidance for full-year 2019:

•	The company expects low single-digit percentage growth in adjusted EPS, excluding the impact of the new lease accounting standard. This is an increase from prior guidance for 2019 adjusted EPS to be similar to 2018, excluding the impact of the new lease accounting standard.

Verizon also expects the following:

•	Low single-digit percentage growth in full-year consolidated revenues on a GAAP reported basis.

•	The effective tax rate for full-year 2019 to be in the range of 24 percent to 26 percent.

•	Cash taxes to be $2 billion to $3 billion higher than in 2018 due to benefits that were realized in 2018 that are not expected to repeat in 2019.

•	Capital spending for 2019 to be in the range of $17 billion to $18 billion, including the expanded commercial launch of 5G.

NOTE: See the accompanying schedules and www.verizon.com/about/investors 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 City, generated revenues of $130.9 billion in 2018. The company operates America's most reliable wireless network and the nation's premier all-fiber network, and delivers integrated solutions to businesses worldwide. With brands like Yahoo, TechCrunch and HuffPost, the company's media group helps consumers stay informed and entertained, communicate and transact, while creating new ways for advertisers and partners to connect. Verizon's corporate responsibility prioritizes the environmental, social and governance issues most relevant to its business and impact to society.

####

VERIZON'S ONLINE MEDIA CENTER: News releases, stories, media contacts and other resources are available at www.verizon.com/about/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,' 'hopes' 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

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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; the effects of competition in the markets in which we operate; material changes in technology or technology substitution; disruption of our key suppliers' provisioning of products or services; changes in the regulatory environment in which we operate, including any increase in restrictions on our ability to operate our networks; breaches of network or information technology security, natural disasters, terrorist attacks or acts of war or significant litigation and any resulting financial impact not covered by insurance; our high level of indebtedness; 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; material adverse changes in labor matters, including labor negotiations, and any resulting financial and/or operational impact; significant increases in benefit plan costs or lower investment returns on plan assets; changes in tax laws or treaties, or in their interpretation; 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; the inability to implement our business strategies; and the inability to realize the expected benefits of strategic transactions.

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Verizon Communications Inc.

Condensed Consolidated Statements of Income

(dollars in millions, except per share amounts)

Unaudited		3 Mos. Ended 3/31/19				3 Mos. Ended 3/31/18				% Change
Operating Revenues
Service revenues and other		$	27,197			$	26,732			1.7
Wireless equipment revenues		4,931				5,040				(2.2	)
Total Operating Revenues		32,128				31,772				1.1
Operating Expenses
Cost of services		7,792				7,946				(1.9	)
Wireless cost of equipment		5,198				5,309				(2.1	)
Selling, general and administrative expense		7,198				6,844				5.2
Depreciation and amortization expense		4,231				4,324				(2.2	)
Total Operating Expenses		24,419				24,423				-
Operating Income		7,709				7,349				4.9
Equity in losses of unconsolidated businesses		(6		)		(19		)		(68.4	)
Other income (expense), net		295				(75		)		*
Interest expense		(1,210		)		(1,201		)		0.7
Income Before Provision For Income Taxes		6,788				6,054				12.1
Provision for income taxes		(1,628		)		(1,388		)		17.3
Net Income		$	5,160			$	4,666			10.6
Net income attributable to noncontrolling interests		$	128			$	121			5.8
Net income attributable to Verizon		5,032				4,545				10.7
Net Income		$	5,160			$	4,666			10.6
Basic Earnings Per Common Share
Net income attributable to Verizon		$	1.22			$	1.11			9.9
Weighted average number of common shares (in millions)		4,138				4,104
Diluted Earnings Per Common Share(1)
Net income attributable to Verizon		$	1.22			$	1.11			9.9
Weighted average number of common shares-assuming dilution (in millions)		4,140				4,107

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.

Verizon Communications Inc.

Condensed Consolidated Balance Sheets

(dollars in millions)

Unaudited		3/31/19				12/31/18				$ Change
Assets
Current assets
Cash and cash equivalents		$	2,322			$	2,745			$	(423	)
Accounts receivable, net		24,469				25,102				(633		)
Inventories		1,417				1,336				81
Prepaid expenses and other		5,189				5,453				(264		)
Total current assets		33,397				34,636				(1,239		)
Property, plant and equipment		254,457				252,835				1,622
Less accumulated depreciation		166,608				163,549				3,059
Property, plant and equipment, net		87,849				89,286				(1,437		)
Investments in unconsolidated businesses		674				671				3
Wireless licenses		94,237				94,130				107
Goodwill		24,635				24,614				21
Other intangible assets, net		9,608				9,775				(167		)
Operating lease right-of-use assets		23,105				-				23,105
Other assets		10,442				11,717				(1,275		)
Total assets		$	283,947			$	264,829			$	19,118
Liabilities and Equity
Current liabilities
Debt maturing within one year		$	8,614			$	7,190			$	1,424
Accounts payable and accrued liabilities		18,664				22,501				(3,837		)
Current operating lease liabilities		2,997				-				2,997
Other current liabilities		8,332				8,239				93
Total current liabilities		38,607				37,930				677
Long-term debt		105,045				105,873				(828		)
Employee benefit obligations		17,888				18,599				(711		)
Deferred income taxes		34,344				33,795				549
Non-current operating lease liabilities		18,971				-				18,971
Other liabilities		11,632				13,922				(2,290		)
Total long-term liabilities		187,880				172,189				15,691
Equity
Common stock		429				429				-
Additional paid in capital		13,418				13,437				(19		)
Retained earnings		46,493				43,542				2,951
Accumulated other comprehensive income		2,216				2,370				(154		)
Common stock in treasury, at cost		(6,825		)		(6,986		)		161
Deferred compensation - employee stock ownership plans and other		125				353				(228		)
Noncontrolling interests		1,604				1,565				39
Total equity		57,460				54,710				2,750
Total liabilities and equity		$	283,947			$	264,829			$	19,118

Verizon Communications Inc.

Selected Financial and Operating Statistics

Unaudited		3/31/19				12/31/18
Total debt (in millions)		$	113,659			$	113,063
Net debt (in millions)		$	111,337			$	110,318
Net unsecured debt (in millions)		$	100,951			$	100,242
Net debt / Consolidated Adjusted EBITDA(1)		2.3x				2.3x
Net unsecured debt / Consolidated Adjusted EBITDA(1)		2.1x				2.1x
Common shares outstanding end of period (in millions)		4,136				4,132
Total employees ('000)		139.4				144.5
Quarterly cash dividends declared per common share		$	0.6025			$	0.6025

Footnotes:

(1)	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)

Unaudited		3 Mos. Ended 3/31/19				3 Mos. Ended 3/31/18				$ Change
Cash Flows from Operating Activities
Net Income		$	5,160			$	4,666			$	494
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization expense		4,231				4,324				(93		)
Employee retirement benefits		(195		)		(151		)		(44		)
Deferred income taxes		459				702				(243		)
Provision for uncollectible accounts		319				239				80
Equity in losses of unconsolidated businesses, net of dividends received		21				30				(9		)
Changes in current assets and liabilities, net of effects from acquisition/disposition of businesses		(2,702		)		(2,033		)		(669		)
Discretionary employee benefits contributions		(300		)		(1,000		)		700
Other, net		88				(129		)		217
Net cash provided by operating activities		7,081				6,648				433
Cash Flows from Investing Activities
Capital expenditures (including capitalized software)		(4,268		)		(4,552		)		284
Acquisitions of businesses, net of cash acquired		(25		)		(32		)		7
Acquisitions of wireless licenses		(104		)		(970		)		866
Other, net		(406		)		269				(675		)
Net cash used in investing activities		(4,803		)		(5,285		)		482
Cash Flows from Financing Activities
Proceeds from long-term borrowings		2,131				1,956				175
Proceeds from asset-backed long-term borrowings		1,117				1,178				(61		)
Repayments of long-term borrowings and finance lease obligations		(2,963		)		(2,984		)		21
Repayments of asset-backed long-term borrowings		(813		)		-				(813		)
Dividends paid		(2,489		)		(2,407		)		(82		)
Other, net		360				941				(581		)
Net cash used in financing activities		(2,657		)		(1,316		)		(1,341		)
Increase (decrease) in cash, cash equivalents and restricted cash		(379		)		47				(426		)
Cash, cash equivalents and restricted cash, beginning of period		3,916				2,888				1,028
Cash, cash equivalents and restricted cash, end of period		$	3,537			$	2,935			$	602

Verizon Communications Inc.

Wireless - Selected Financial Results

(dollars in millions)

Unaudited		3 Mos. Ended 3/31/19				3 Mos. Ended 3/31/18				% Change
Operating Revenues
Service		$	16,072			$	15,402			4.4
Equipment		4,931				5,040				(2.2	)
Other		1,697				1,458				16.4
Total Operating Revenues		22,700				21,900				3.7
Operating Expenses
Cost of services		2,456				2,215				10.9
Cost of equipment		5,198				5,309				(2.1	)
Selling, general and administrative expense		4,281				3,899				9.8
Depreciation and amortization expense		2,299				2,428				(5.3	)
Total Operating Expenses		14,234				13,851				2.8
Operating Income		$	8,466			$	8,049			5.2
Operating Income Margin		37.3		%		36.8		%
Segment EBITDA		$	10,765			$	10,477			2.7
Segment EBITDA Margin		47.4		%		47.8		%

Footnotes:

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

Intersegment transactions have not been eliminated.

Verizon Communications Inc.

Wireless - Selected Operating Statistics

Unaudited		3/31/19				3/31/18				% Change
Connections ('000)
Retail postpaid		113,407				111,114				2.1
Retail prepaid		4,479				5,068				(11.6	)
Total retail		117,886				116,182				1.5
Unaudited		3 Mos. Ended 3/31/19				3 Mos. Ended 3/31/18				% Change
Net Add Detail ('000)(1)
Retail postpaid		61				260				(76.5	)
Retail prepaid		(176		)		(335		)		47.5
Total retail		(115		)		(75		)		(53.3	)
Account Statistics
Retail postpaid accounts ('000)(2)		35,338				35,333				-
Retail postpaid connections per account(2)		3.21				3.14				2.2
Retail postpaid ARPA(3)		$	136.68			$	131.71			3.8
Retail postpaid I-ARPA(4)		$	172.09			$	164.72			4.5
Churn Detail
Retail postpaid		1.12		%		1.04		%
Retail		1.31		%		1.28		%
Retail Postpaid Connection Statistics (2)
Total smartphone postpaid phone base		92.7		%		90.7		%
Total Internet postpaid base		19.7		%		19.2		%
Other Operating Statistics
Capital expenditures (in millions)		$	2,044			$	2,367			(13.6	)

Footnotes:

(1)	Connection net additions exclude acquisitions and adjustments.

(2)	Statistics presented as of end of period.

(3)	Retail postpaid ARPA - average service revenue per account from retail postpaid accounts.

(4)	Retail postpaid I-ARPA - average service revenue per account from retail postpaid account plus recurring device installment billings.

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

Intersegment transactions have not been eliminated.

Verizon Communications Inc.

Wireline - Selected Financial Results

(dollars in millions)

Unaudited		3 Mos. Ended 3/31/19				3 Mos. Ended 3/31/18				% Change
Operating Revenues
Consumer Markets		$	3,153			$	3,150			0.1
Enterprise Solutions		2,140				2,240				(4.5	)
Partner Solutions		1,075				1,228				(12.5	)
Business Markets		828				871				(4.9	)
Other		68				68				-
Total Operating Revenues		7,264				7,557				(3.9	)
Operating Expenses
Cost of services		4,186				4,475				(6.5	)
Selling, general and administrative expense		1,606				1,479				8.6
Depreciation and amortization expense		1,560				1,534				1.7
Total Operating Expenses		7,352				7,488				(1.8	)
Operating Income (Loss)		$	(88	)		$	69			*
Operating Income (Loss) Margin		(1.2		)%		0.9		%
Segment EBITDA		$	1,472			$	1,603			(8.2	)
Segment EBITDA Margin		20.3		%		21.2		%

Footnotes:

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

Intersegment transactions have not been eliminated.

Verizon Communications Inc.

Wireline - Selected Operating Statistics

Unaudited		03/31/19				03/31/18				% Change
Connections ('000)
Fios video connections		4,398				4,597				(4.3	)
Fios Internet connections		6,119				5,916				3.4
Fios digital voice residence connections		3,758				3,891				(3.4	)
Fios digital connections		14,275				14,404				(0.9	)
High-speed Internet (HSI) connections		854				1,050				(18.7	)
Total broadband connections		6,973				6,966				0.1
Total voice connections		11,453				12,555				(8.8	)
Unaudited		3 Mos. Ended 3/31/19				3 Mos. Ended 3/31/18				% Change
Net Add Detail ('000)
Fios video connections		(53		)		(22		)		*
Fios Internet connections		52				66				(21.2	)
Fios digital voice residence connections		(45		)		(14		)		*
Fios digital connections		(46		)		30				*
High-speed Internet (HSI) connections		(40		)		(59		)		32.2
Total broadband connections		12				7				71.4
Total voice connections		(279		)		(266		)		(4.9	)
Revenue Statistics
Fios revenues (in millions)		$	3,057			$	2,951			3.6
Other Operating Statistics
Capital expenditures (in millions)		$	1,733			$	1,673			3.6
Wireline employees ('000)		53.2				57.2

Footnotes:

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

Intersegment transactions have not been eliminated.

Verizon Communications Inc.

Non-GAAP Reconciliations - Consolidated Verizon

Consolidated EBITDA, Consolidated EBITDA Margin, Consolidated Adjusted EBITDA and Consolidated Adjusted EBITDA Margin

(dollars in millions)

Unaudited		3 Mos. Ended 3/31/19				3 Mos. Ended 12/31/18				3 Mos. Ended 9/30/18				3 Mos. Ended 6/30/18				3 Mos. Ended 3/31/18
Consolidated Net Income		$	5,160			$	2,065			$	5,062			$	4,246			$	4,666
Add/(subtract):
Provision (benefit) for income taxes		1,628				(698		)		1,613				1,281				1,388
Interest expense		1,210				1,199				1,211				1,222				1,201
Depreciation and amortization expense		4,231				4,352				4,377				4,350				4,324
Consolidated EBITDA		$	12,229			$	6,918			$	12,263			$	11,099			$	11,579
Add/subtract:
Other (income) expense, net*		$	(295	)		$	(1,865	)		$	(214	)		$	(360	)		$	75
Equity in losses (earnings) of unconsolidated businesses†		6				(64		)		3				228				19
Oath goodwill impairment		-				4,591				-				-				-
Severance charges		-				1,818				-				339				-
Product realignment charges‡		-				-				-				450				-
Acquisition and integration related charges‡		-				187				130				109				105
		(289		)		4,667				(81		)		766				199
Consolidated Adjusted EBITDA		$	11,940			$	11,585			$	12,182			$	11,865			$	11,778
Consolidated Operating Revenues - Quarter to Date		$	32,128															$	31,772
Operating Income Margin - Quarter to Date		24.0		%														23.1		%
Consolidated EBITDA Margin - Quarter to Date		38.1		%														36.4		%
Consolidated Adjusted EBITDA Margin - Quarter to Date		37.2		%														37.1		%

*	Includes Pension and benefits mark-to-market adjustments and Early debt redemption costs, where applicable.

†	Includes Product realignment charges, where applicable.

‡	Excludes depreciation and amortization expense, where applicable.

Net Debt and Net Debt to Consolidated Adjusted EBITDA Ratio

(dollars in millions)

Unaudited		3/31/19				12/31/18
Debt maturing within one year		$	8,614			$	7,190
Long-term debt		105,045				105,873
Total Debt		113,659				113,063
Less Cash and cash equivalents		2,322				2,745
Net Debt		$	111,337			$	110,318
Net Debt to Consolidated Adjusted EBITDA Ratio		2.3x				2.3x

Verizon Communications Inc.

Non-GAAP Reconciliations - Consolidated Verizon

Net Unsecured Debt and Net Unsecured Debt to Consolidated Adjusted EBITDA Ratio

(dollars in millions)

Unaudited		3/31/19				12/31/18
Total Debt		$	113,659			$	113,063
Less Secured debt		10,386				10,076
Unsecured debt		103,273				102,987
Less Cash and cash equivalents		2,322				2,745
Net Unsecured Debt		$	100,951			$	100,242
Net Unsecured Debt to Consolidated Adjusted EBITDA Ratio		2.1x				2.1x

Adjusted Earnings per Common Share (Adjusted EPS)⁽¹⁾

(dollars in millions, except per share amounts)

Unaudited										3 Mos. Ended 3/31/19												3 Mos. Ended 3/31/18
	Pre-tax			Tax			After-Tax						Pre-tax			Tax			After-Tax
EPS										$	1.22											$	1.11
Pension remeasurement credit	$	(96	)	$	25		$	(71	)	(0.02		)	$	-		$	-		$	-		-
Acquisition and integration related charges	-			-			-			-			107			(25		)	82			0.02
Early debt redemption costs	-			-			-			-			249			(65		)	184			0.04
	$	(96	)	$	25		$	(71	)	(0.02		)	$	356		$	(90	)	$	266		0.06
Adjusted EPS										$	1.20											$	1.17

(1)	Adjusted EPS may not add due to rounding.

Verizon Communications Inc.

Non-GAAP Reconciliations - Segments

Segment EBITDA and Segment EBITDA Margin

Wireless

					(dollars in millions)
Unaudited		3 Mos. Ended 3/31/19				3 Mos. Ended 3/31/18
Operating Income		$	8,466			$	8,049
Add Depreciation and amortization expense		2,299				2,428
Segment EBITDA		$	10,765			$	10,477
Year over year change		2.7		%
Total operating revenues		$	22,700			$	21,900
Operating Income Margin		37.3		%		36.8		%
Segment EBITDA Margin		47.4		%		47.8		%

Wireline

					(dollars in millions)
Unaudited		3 Mos. Ended 3/31/19				3 Mos. Ended 3/31/18
Operating Income (Loss)		$	(88	)		$	69
Add Depreciation and amortization expense		1,560				1,534
Segment EBITDA		$	1,472			$	1,603
Total operating revenues		$	7,264			$	7,557
Operating Income (Loss) Margin		(1.2		)%		0.9		%
Segment EBITDA Margin		20.3		%		21.2		%