Verizon Communications Inc. · NYSE:VZ
Verizon Communications — Q4 2015 Earnings Presentation
14 slides from Verizon Communications's earnings presentation, Jan 21, 2016
Slide 1: 4th Quarter 2015 Earnings Results
4th Quarter 2015 Earnings Results Fran Shammo Chief Financial Officer January 21, 2016
Slide 2: Safe Harbor Statement
“Safe Harbor” Statement NOTE: In this presentation 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
Slide 3: Consolidated Earnings Summary
Consolidated Earnings Summary 4Q’15 2015 Reported $1.32 $4.37 Less: Severance and pension remeasurement $0.40 $0.34 Gain on sale of wireless licenses $0.04 $0.04 Adjusted* $0.89 $3.99 Adjusted growth rate Y/Y* 25.4% 19.1% * Adjusted for non-operational items Note: Amounts may not add due to rounding
Slide 4: Consolidated 2015 Overview
Consolidated 2015 Overview Strong growth in earnings and free cash flow High-quality connections growth and profitability in Wireless Fios driving growth in Mass Markets Positioned business for future growth Returned value to shareholders Strong execution of the fundamentals © 2015 Verizon VlpHU09DS
Slide 5: Consolidated Financial Summary
Consolidated Total Revenue ($B) Financial $131.6 $127.1 Summary 3.6% Y/Y Growth Total revenue growth excluding AOL and divested public sector business of 2014 2015 2.6% Y/Y in 2015 ■ Wireless ■ Wireline 2015 Adjusted EBITDA of Adjusted EPS* $46.6B, up 7.7% Y/Y* $3.99 2015 Adjusted EBITDA $3.35 19.1%
Slide 6: Cash Flow Summary
Consolidated Cash Flow Summary ($ in billions) 4Q’15 2015 Cash flow from operations $10.5 $38.9 Capital expenditures $5.2 $17.8 Free cash flow $5.3 $21.2 Dividends paid $2.2 $8.5 Total debt $110.2 $110.2 Net debt to adjusted EBITDA 2.3x 2.3x Note: Amounts may not add due to rounding Strong cash gene
Slide 7: Wireless Revenue & Profitability
Wireless Total Revenue ($B) Revenue & $87.6 $91.7 Profitability 4.6% Y/Y Growth Service revenue plus installment billings up 1.4% Y/Y in 4Q ’15 and 2.0% in 2014 2015 2015 ■ Service Revenue ■ Other Revenue 4Q ’15 phone activations on Segment EBITDA ($B) installment plans were 67%; $39.0 29% of postpa
Slide 8: Wireless Connections / Net Adds / Churn
Wireless Retail Connections (M) Connections / 108.2 110.8 112.1 Net Adds / Churn 3.6% Y/Y Growth Retail postpaid connections 105.0 106.5 growth of 4.4% Y/Y in 4Q ’15 102.1 1.5M retail postpaid net adds in 4Q ’15* 4Q '14 3Q '15 4Q '15 • 906K new 4G LTE ■ Retail Postpaid ■ Retail Prepaid smartphones R
Slide 9: Wireless Devices / 4G LTE
Wireless Retail Postpaid Device Activations (M) Devices / 4G LTE 15.3 13.4 11.3 11.6 10.3 Smartphone penetration of 84%, up from 79% a year ago Industry leading 4G LTE connections 4Q '14 1Q '15 2Q '15 3Q '15 4Q '15 • Added 4.4M 4G LTE devices ■ Smartphones ■ Other in 4Q ’15 4G LTE Devices (M) • Abou
Slide 10: Wireline Mass Markets
Wireline Consumer Revenue ($B) Mass Markets $4.1 $4.0 $4.0 2.6% Consumer revenue grew 3.5% Y/Y Y/Y Growth in 2015 Fios now 80% of consumer revenue • Fios consumer revenue growth of 4Q '14 3Q '15 4Q '15 6.6 % Y/Y in 4Q ’15 Fios Internet subscribers Consumer Fios Internet Subscribers • 99K net adds •
Slide 11: Wireline Revenue & Profitability
Wireline Total Revenue ($B) Revenue & Y/Y Growth $38.4 $37.7 Profitability (1.8%) Total Fios revenue grew 6.8% Y/Y in 4Q ’15 Global Enterprise revenue 2014 2015 down 3.3% Y/Y in 4Q ’15 Global Wholesale revenue Segment EBITDA ($B) down 0.2% Y/Y in 4Q ’15 $8.9 $8.9 4Q ’15 EBITDA of $2.3B, up 0.4% Y/Y
Slide 12: 3-Tier Strategy
3-Tier Strategy Smart Cities 1. Identify high growth markets Solutions Network Fleet AOL Brands 2. Invest and execute 3. Achieve market leadership Platforms IOT ThingSpace VDMS 1. Protect & Grow Connectivity 2. Drive profitability 3. Create financial flexibility 5G Network Architecture Global IP © 2
Slide 13: 2016 Priorities
2016 Priorities Deliver strong operating and financial performance Consistently invest in networks and platforms Focus on new revenue streams Generate strong cash flow Return value to shareholders Confident in ability to execute while building for the future © 2015 Verizon 13
Slide 14: 4th Quarter 2015 Earnings Results
4th Quarter 2015 Earnings Results Fran Shammo Chief Financial Officer January 21, 2016
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