VERIZON COMMUNICATIONS INC (Form: 8-K, Received: 04/24/2020 07:35:00)

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 24, 2020

(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			10036
New York,	New York
(Address of principal executive offices)			(Zip Code)

Registrant’s telephone number, including area code: (212) 395-1000

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))

Securities registered pursuant to Section 12(b) of the Act:



Title of Each Class	Trading Symbol(s)	Name of Each Exchange on Which Registered
Common Stock, par value $0.10	VZ	New York Stock Exchange
Common Stock, par value $0.10	VZ	The NASDAQ Global Select Market
2.375% Notes due 2022	VZ22A	New York Stock Exchange
0.500% Notes due 2022	VZ22B	New York Stock Exchange
1.625% Notes due 2024	VZ24B	New York Stock Exchange
4.073% Notes due 2024	VZ24C	New York Stock Exchange
0.875% Notes due 2025	VZ25	New York Stock Exchange
3.250% Notes due 2026	VZ26	New York Stock Exchange
1.375% Notes due 2026	VZ26B	New York Stock Exchange
0.875% Notes due 2027	VZ27E	New York Stock Exchange
1.375% Notes due 2028	VZ28	New York Stock Exchange
1.875% Notes due 2029	VZ29B	New York Stock Exchange
1.250% Notes due 2030	VZ30	New York Stock Exchange
1.875% Notes due 2030	VZ30A	New York Stock Exchange
2.625% Notes due 2031	VZ31	New York Stock Exchange
2.500% Notes due 2031	VZ31A	New York Stock Exchange
0.875% Notes due 2032	VZ32	New York Stock Exchange
4.750% Notes due 2034	VZ34	New York Stock Exchange
3.125% Notes due 2035	VZ35	New York Stock Exchange
3.375% Notes due 2036	VZ36A	New York Stock Exchange
2.875% Notes due 2038	VZ38B	New York Stock Exchange
1.500% Notes due 2039	VZ39C	New York Stock Exchange
3.500% Fixed Rate Notes due 2039	VZ39D	New York Stock Exchange

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 24, 2020 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 providing these non-GAAP measures in addition to the GAAP measures allows management, investors and other users of our financial information to more fully and accurately assess 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 (EBITDA), 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 as it is a widely accepted financial measure used in evaluating the profitability of a company and with its competitors.

Consolidated EBITDA is calculated by adding back interest, taxes and depreciation and amortization expense to net income.

Segment EBITDA is calculated by adding back segment 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

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 management’s evaluation of business performance. We believe that Consolidated Adjusted EBITDA is 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: impairment charges, severance charges, loss on spectrum license auction and net gain from dispositions of assets and businesses. The impairment charges relate to goodwill impairment charges recognized in 2019 as a result of the Company's annual goodwill impairment testing of its media business, Verizon Media, and the impairment charge of an investment in a media joint venture. Severance charges recorded during 2019 relate to headcount reduction initiatives. Loss on spectrum license auction relates to the reclassification of spectrum licenses to assets held for sale at fair value as a result of Auction 103. Net gain from dispositions of assets and businesses relates to the sale of various real estate properties and businesses in 2019.

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 EPS) and Adjusted EPS Growth Forecast

Adjusted EPS and Adjusted EPS Growth Forecast are non-GAAP financial measures that we believe are 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 which could vary from period to period. We believe excluding special items provides more comparable assessment of our financial results from period to period.

Adjusted EPS is calculated by excluding from the calculation of reported EPS the effect of the following special items: net pension remeasurement charge (credit) and loss on spectrum license auction.

We have not provided a reconciliation for our Adjusted EPS Growth Forecast because we cannot, without unreasonable effort,

predict the special items that could arise during 2020.

Adjusted Effective Income Tax Rate Attributable to Verizon Forecast (Adjusted ETR Forecast)

Adjusted ETR Forecast is a non-GAAP financial measure that we believe is useful to management, investors and other users of our financial information in assessing our effective income tax rate without the effect of special items which could vary from period to period. Adjusted ETR Forecast is calculated by dividing the Provision for income taxes by Net Income attributable to Verizon before tax after adjusting for the impact of special items.

We have not provided a reconciliation for our Adjusted ETR Forecast because we cannot, without unreasonable effort, predict the special items that could arise during 2020.

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

Item 7.01. Regulation FD Disclosure

Attached as Exhibit 99.2 and incorporated by reference herein are slides used in connection with the quarterly earnings release given by Verizon Communications Inc. on April 24, 2020. The information provided pursuant to this Item 7.01 is “furnished” and shall not be deemed to be “filed” with the Securities and Exchange Commission or incorporated by reference in any filing under the Securities Exchange Act of1934, as amended, or the Securities Act of1933, as amended, except as shall be expressly set forth by specific reference in any such filings.

Item 8.01. Other Events.

This disclosure discusses the actions Verizon has taken in response to the COVID-19 crisis and the impacts that the situation has had on our business, as well as related known or expected trends. This disclosure supersedes the disclosure included in Verizon’s Current Report on Form 8-K dated March 17, 2020.

COVID-19 was identified in China in late 2019 and has since spread throughout the world, including throughout the United States (U.S.). Public and private sector policies and initiatives to reduce the transmission of COVID-19 have varied significantly across the U.S., but as of March 31, 2020 a significant percentage of the U.S. population was subject to meaningful restrictions on activities, which included limitations on the operation of non-essential businesses including retail operations, requirements that individuals remain in or close to their homes, school closures, limitations on large gatherings, travel restrictions and other policies to promote or enforce physical distancing. Similar restrictions have been implemented in many other countries in which we operate. As described below, these restrictions and our responses to them are significantly impacting how our customers use our products and services, how they interact with us, and how our employees work and provide services to our customers. In addition, governments have imposed a wide variety of consumer protection measures that limit how certain businesses, including telecommunications companies, can operate their businesses and interact with their customers. The crisis and governmental responses to the crisis have also resulted in a slowdown of global economic activity, which has significantly impacted our customers. As a result, prior trends in our business may not be applicable to our operations during the pendency of the crisis.

Most of the policies and initiatives referenced above were implemented during the latter part of the first quarter of 2020, as were Verizon’s activities described below. The impact of COVID-19 for the remainder of the year and beyond will depend significantly on the duration and potential cyclicality of the health crisis and the related public policy actions, additional initiatives we undertake in response to employee, market or regulatory needs or demands, the length and severity of the global economic slowdown, and whether and how our customers change their behaviors over the longer term.

Operations

In response to the crisis beginning in the first quarter 2020, we have been executing our business continuity plans and evolving our operations to protect the safety of our employees and to continue to provide critical infrastructure and connectivity to our customers, as they have changed their ways of working and living. Some of the initiatives we have undertaken include:


▪	Moving over 115,000 of our 135,500 employees to remote work arrangements.


▪	Temporarily closing nearly 70% of our company-owned retail store locations and moving to appointment-only access to our remaining store locations.


▪	Limiting our customer-focused field operations based on the criticality of the services being provided or repaired.


▪	Enhancing our safety protocols for employees who cannot work from home.


▪	Providing additional compensation to employees in front line roles that cannot be done from home.


▪	Adjusting other compensation and benefits programs to address circumstances created by the crisis.


▪	Taking the Federal Communication Commission's (FCC's) “Keep Americans Connected” pledge, through which we pledged to waive late fees for, and not terminate service to, any of our consumer or small business customers who did not pay their bills timely due to an inability to pay caused by the COVID-19 crisis.


▪	Providing additional data allocations to permit wireless consumer and small business customers to remain connected.


▪	Waiving activation and upgrade fees through digital distribution channels.


▪	Working with business customers to address payment needs during the crisis.


▪	Maintaining effective governance and internal controls in a remote work environment.

As the crisis continues, we may revise our approach to these initiatives or take additional actions to meet the needs of our employees, customers and the Company and to continue to provide our products and services.

Operating Metrics

The following comparison of key performance metrics from the period March 15 to April 15, 2020 with the same metrics from March 15 to April 15, 2019 shows the impact of the crisis on our operating results.



			Verizon Business Group
	Verizon Consumer Group		Small and Medium Business		Global Enterprise, Public Sector and Other
Wireless retail postpaid gross additions	(49	)%	(24	)%	163	%
Wireless retail postpaid phone churn	(23 bps)		(3 bps)		(35 bps)
Wireless retail postpaid upgrades	(41	)%	(45	)%	(19	)%
Wireless retail postpaid device activations	(44	)%	(33	)%	80	%
Fios Internet net additions	(60	)%	nm		nm

nm - not meaningful



	Verizon Media Group
Monthly active users	22	%
Yahoo Finance	95	%
Yahoo News	58	%

The above metrics reflect that during the second half of March, our retail Consumer and small business activity diminished significantly, and we saw a dramatic shift in customer behavior, including significant decreases in device volumes and travel, as well as decreased customer switching activity across the industry. The impact of our restrictions on customer-focused field operations can also be seen in the reduction in Fios internet net adds. At the same time, we experienced increased demand from our Public Sector and certain Global Enterprise customers to support front line crisis responders, new work-from-home and home schooling arrangements and other demands for critical connectivity services.

In Verizon Media, we experienced a decline in advertising and search revenue as advertisers paused or canceled campaigns during this period, and users searched for fewer commercial terms, providing less opportunity for monetization.

The progression of these trends for the remainder of the second quarter and thereafter will depend on a number of factors including how the social distancing and government containment policies evolve and the related macroeconomic impacts.

Liquidity and Capital Resources

Verizon finished the first quarter of 2020 in a strong financial position. As of March 31, 2020, our balance sheet included:

Cash and cash equivalents $7.0 billion

Unsecured debt $104.7 billion

As of March 31, 2020, our Cash and cash equivalents balance was $7.0 billion compared to $2.6 billion as of December 31, 2019 and $2.3 billion as of March 31, 2019. We made the decision to maintain a higher cash balance in order to further protect the Company against the uncertainties of the COVID-19 crisis. As of March 31, 2020, our only significant unsecured debt maturing during the remainder of 2020 consisted of approximately $1.0 billion of floating rate notes due in May and $588 million of vendor-related financing, including amounts due under certain of our export credit facilities. These amounts do not include approximately $1.7 billion of subsidiary preferred stock that we redeemed in April 2020 upon the scheduled maturity of such securities or $700 million of borrowings under a short-term uncommitted credit facility that we repaid in April 2020. As of March 31, 2020, we had not drawn down on our $9.5 billion revolving credit facility and the unused borrowing capacity was approximately $9.4 billion. The revolving credit facility does not require us to comply with financial covenants or maintain specified credit ratings, and it permits us to borrow even if our business has incurred a material adverse change. In addition, we raised $3.5 billion through the issuance of commercial paper in April 2020.

The COVID-19 crisis, together with other dynamics in the marketplace, has recently significantly increased borrowing costs and, in certain cases, restricted the ability of borrowers to access the capital markets and other sources of financing. In order to provide financial flexibility and finance certain investments and projects, we may continue to utilize external financing arrangements that have been or may be affected by these market conditions. However, we believe that our cash on hand, the cash we expect to generate from our operations, and cash from other sources of financing available to us are, and will continue to be, sufficient to meet our ongoing operating, capital expenditure and investing requirements.

We expect to continue to have sufficient cash to fund our operations, although we could experience significant fluctuations in our cash flows from period to period during the crisis. The net cash generated from our operations provides our primary source of cash flows. While we have historically experienced consistently low levels of payment delinquencies among our consumer and business accounts, beginning late in first quarter 2020, we started to see increases in delinquencies across our retail customer base and our small and medium business accounts. If these levels of delinquencies continue or grow, they could have a material adverse impact on our cash flows. We could also experience fluctuations in our cash flows in the periods that follow the end of the COVID-19 crisis resulting from the ongoing impacts of the crisis on macroeconomic conditions in the U.S. and as our customers work to become current on their bills.

In addition, we issue asset-backed debt secured by our device payment plan agreement receivables and the collections on such receivables.

These transactions require us to comply with various tests, including delinquency and loss-related tests, which, if not met, would cause the asset-backed debt to amortize earlier and faster than otherwise expected. The holders of our asset-backed debt do not have any recourse to Verizon with respect to the payment of principal and interest on the debt. However, if an early amortization of our asset-backed debt occurs, including as a result of increased customer delinquencies or losses relating to COVID-19, all collections on the securitized device payment plan agreement receivables would be used to pay principal and interest on the asset-backed debt, and our financing cash flows requirements would increase for the twelve months immediately following an early amortization event.

Impacts on Financial Results

Our revenues and expenses in first quarter 2020 were impacted by COVID-19 as a result of the actions we took to care for our employees and keep our customers connected and as a result of our customers’ changing activities as well as the restrictions on activities and the global economic slowdown, as described below. We estimate that the net impact of COVID-19 on our first quarter results was a reduction of approximately $0.04 in earnings per share, primarily as a result of an increase in our allowance for credit losses, as described below. We expect that impact to be greater in the second quarter of 2020.

Revenues

As a result of our decision to keep our customers connected during the crisis, we experienced fewer step ups in data plans, lower overage revenues and lower fees from activations, upgrades and late fees in first quarter 2020.

We have seen considerably less churn in the consumer wireless base and lower equipment volumes and upgrade rates since the beginning of the crisis. As a result of these changing customer behaviors, we experienced significantly lower equipment revenue in first quarter 2020. In addition, we experienced lower roaming revenues, as our customers meaningfully reduced travel during the quarter. In Verizon Media we have seen a reduction in advertising revenue, as the crisis has altered advertising and media consumption patterns.

Expenses

The primary impacts to our expenses from the COVID-19 crisis in first quarter 2020 were increases in the allowance for credit losses, commission expense and compensation related costs. The increase in sales related compensation costs was a result of an expansion of our programs for both employees and agents. These increases were partially offset by a decrease in equipment cost.

As a result of waiving late fees and keeping customers connected during the crisis pursuant to the Keep Americans Connected pledge, we have seen increases in delinquencies across our retail customer base and certain business accounts. As a result, our allowance for credit losses increased by $228 million at March 31, 2020 based on the expected number of customers who will avail themselves of payment relief under the pledge. If the current levels of delinquencies for our consumer and small and medium business customers continue or grow, additional provisions to our allowance for credit losses may be required, which could be significant. We continue to monitor customer behavior and our expected loss assumptions and estimates.

Other

In addition, equity and debt markets have experienced significant volatility during 2020 partially as a result of the crisis, and federal governmental actions to stimulate the economy have significantly impacted interest rates. These circumstances could affect the funding level of our pension plans and our calculated liabilities under our pension and other postemployment benefit plans. Other impacts from the crisis on our financial results in the second quarter and beyond could include a further slowdown in the global economy, additional regulatory or legislative initiatives that impact our relationships with our customers, and other initiatives we undertake to respond to the needs of our employees and our customers.

We expect these impacts on our revenues and expenses to continue for the duration of the crisis and for as long as we maintain the applicable policies and initiatives we have put into place in response to the crisis.

Item 9.01. Financial Statements and Exhibits



(d) Exhibits.

Exhibit Number		Description

99.1		Press release and financial tables, dated April 24, 2020, issued by Verizon Communications Inc.

99.2		Slides used in connection with the quarterly earnings release given by Verizon Communications Inc. on April 24, 2020.

104		Cover Page Interactive Data File (formatted as inline XBRL).

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 24, 2020	/s/ Anthony T. Skiadas
		Anthony T. Skiadas
		Senior Vice President and Controller

EXHIBIT INDEX




Exhibit Number		Description

99.1		Press release and financial tables, dated April 24, 2020, issued by Verizon Communications Inc.

99.2		Slides used in connection with the quarterly earnings release given by Verizon Communications Inc. on April 24, 2020.

104		Cover Page Interactive Data File (formatted as inline XBRL).

Exhibit 99.1

News Release



FOR IMMEDIATE RELEASE	Media contacts:
April 24, 2020	Kim Ancin
	908.559.3227
	kimberly.ancin@verizon.com

	Eric Wilkens
	908.559.3063
	eric.wilkens@verizon.com

Verizon begins 2020 with strong earnings and cash flow from

focused strategic execution

1Q 2020 highlights

Consolidated:


•	$1.00 in earnings per share (EPS), compared with $1.22 in 1Q 2019; adjusted EPS (non-GAAP), excluding special items, of $1.26, compared with $1.20 in 1Q 2019.


•	Operating revenue decline of 1.6 percent from first-quarter 2019.


•	Cash flow from operations of $8.8 billion, an increase of $1.7 billion from first-quarter 2019.

Consumer:


•	Total revenue of $21.8 billion, a decrease of 1.7 percent year over year.


•	525,000 retail postpaid net losses, including 307,000 phone net losses and 167,000 postpaid smartphone net losses.


•	Total retail postpaid churn of 1.01 percent, and retail postpaid phone churn of 0.77 percent.


•	59,000 Fios Internet net additions.

Business:


•	Total revenue of $7.7 billion, a decrease of 0.5 percent year over year.


•	475,000 retail postpaid net additions, including 239,000 phone net additions.


•	Total retail postpaid churn of 1.30 percent, and retail postpaid phone churn of 1.02 percent.

Page 1

VlpHU09DSUQyMDE5UTE=

Total Wireless:


•	Total revenues from wireless products and services of $22.6 billion, a 0.5 percent decrease year over year. Service revenues increased 1.9 percent year over year.


•	50,000 retail postpaid net losses, including 68,000 phone net losses and 95,000 postpaid smartphone net additions.


•	Total retail postpaid churn of 1.08 percent, and retail postpaid phone churn of 0.82 percent.

NEW YORK - Verizon Communications Inc. (NYSE, Nasdaq: VZ) reported first-quarter results today highlighted by strong earnings per share performance, increased cash flow, and a further commitment to network investment.

"Verizon began 2020 with strong operational performance," said Chairman and CEO Hans Vestberg. "In an unprecedented time, Verizon took decisive and balanced actions that will serve our stakeholders in the long term, including protecting our employees, maintaining our network quality and reliability, serving our customers, and supporting our communities. We will emerge from this crisis stronger, knowing we provided critical connectivity to our customers, and especially our first responders, while maintaining our commitment to investing in our 5G and Fiber strategies. We are particularly proud of our employees who continue to deliver essential services to our customers and those on the front lines so they can serve others."

For first-quarter 2020, Verizon reported EPS of $1.00, compared with $1.22 in first-quarter 2019. On an adjusted basis (non-GAAP), first-quarter 2020 EPS, excluding special items, was $1.26, compared with adjusted EPS of $1.20 in first-quarter 2019. The company estimates that first-quarter 2020 EPS and adjusted EPS included approximately negative 4 cents of COVID-19-related net impacts, primarily driven by an increase to its bad debt reserve.

First-quarter 2020 EPS included a pre-tax loss from special items of about $1.4 billion, which consisted of a $1.2 billion loss related to the FCC's recently completed spectrum Auction 103 and a net charge of $182 million related to a mark-to-market adjustment for pension liabilities.

In first-quarter 2020, Verizon's results also included the continued effects of a reduction in benefits from the adoption of a revenue recognition standard, primarily due to the deferral of commission expense. The net impact was 3 cents in first-quarter 2020.

Page 2

VlpHU09DSUQyMDE5UTE=

Consolidated results


•	Total consolidated operating revenues in first-quarter 2020 were $31.6 billion, down 1.6 percent from first-quarter 2019. This decline was primarily the result of growth in wireless service revenue in the Consumer and Business segments, more than offset by sharp reductions in equipment revenue, after social distancing measures were adopted in March, limiting in-store customer engagement.


•	First-quarter 2020 cash flow from operations totaled $8.8 billion, an increase of $1.7 billion from first-quarter 2019. This year over year growth was primarily the result of Voluntary Separation Program payments and voluntary pension contributions made in first-quarter 2019 that did not repeat this year, as well as working capital improvements this quarter.


•	Capital expenditures in first-quarter 2020 were $5.3 billion. Capital expenditures continue to support the capacity for unprecedented traffic growth across Verizon's networks and the deployment of fiber and additional cell sites to support the company's 5G Ultra Wideband rollout.


•	In 2018, Verizon announced a goal to achieve $10 billion in cumulative cash savings by the end of 2021. This initiative has yielded $6.3 billion of cumulative cash savings since the program began and is on track to achieve its target.


•	Bad debt expenses increased in first-quarter 2020 as a result of changing expectations around customer payments during the COVID-19 crisis. The company increased its bad debt reserve in first-quarter by $228 million based on the expected number of customers who will seek payment relief under the Keep Americans Connected pledge.


•	The company ended first-quarter 2020 with $7 billion of cash on hand, an increase of $4.5 billion from year-end 2019. Carrying a higher cash balance is part of the company's liquidity planning strategy, which included a $3.5 billion bond offering completed in March.

Consumer results


•	Total Verizon Consumer revenues were $21.8 billion, a decrease of 1.7 percent year over year, driven by strong service revenue and other revenue growth, more than offset by a significant decrease in wireless equipment revenue due to low volume activity.

•

As a result of COVID-19, Verizon closed nearly 70 percent of its company-operated retail locations and reduced in-store service hours to promote social distancing. This resulted in a significant drop in customer activity and device volumes for the quarter. Consumer reported 525,000 wireless retail postpaid net losses in first-quarter 2020. This consisted of 307,000 phone net losses and 227,000 tablet net losses, offset by 9,000 other connected device net additions. Postpaid smartphone net losses were 167,000.


•	Consumer wireless service revenues were $13.5 billion in first-quarter 2020, a 0.9 percent increase year over year.


•	Total retail postpaid churn was 1.01 percent in first-quarter 2020, and retail postpaid phone churn was 0.77 percent.


•	Consumer reported 59,000 Fios Internet net additions as work-from-home, in-home schooling, and other related measures increased the demand for high-quality broadband offerings.

Page 3

VlpHU09DSUQyMDE5UTE=

Consumer reported 84,000 Fios Video net losses in first-quarter 2020, reflecting the ongoing shift from traditional linear video to over-the-top offerings.

•

In first-quarter 2020, segment operating income was $7.3 billion, an increase of 0.4 percent year over year, and segment operating income margin was 33.5 percent, an increase from 32.7 percent in first-quarter 2019. Segment EBITDA (non-GAAP) totaled $10.1 billion in first-quarter 2020, a decrease of 0.4 percent year over year. Segment EBITDA margin (non-GAAP) was 46.4 percent in first-quarter 2020, up from 45.8 percent in first-quarter 2019.

Business results

•

Total Verizon Business revenues were $7.7 billion, down 0.5 percent year over year. Business trends were strong throughout first-quarter 2020. Starting in March, Business saw heightened demand for its products and services, specifically for mobility, jetpacks, VPN services and high speed circuit capacity, and experienced increased activity to support front line crisis responders, new work-from-home and home schooling arrangements, and other demands for critical connectivity services.


•	Business reported 475,000 wireless retail postpaid net additions in first-quarter 2020, compared with 264,000 in first-quarter 2019. This consisted of 239,000 phone net additions, 60,000 tablet net additions, and 176,000 other connected device additions.


•	Business' customer-centric approach led to an effective response to the needs of its business customers at the onset of the COVID-19 crisis. In wireless, this led to a total retail postpaid churn of 1.30 percent in first-quarter 2020, and retail postpaid phone churn of 1.02 percent.

•

In first-quarter 2020, segment operating income was $954 million, a decrease of 9.0 percent year over year, and segment operating income margin was 12.4 percent, compared with 13.6 percent in first-quarter 2019. Segment EBITDA (non-GAAP) totaled $2.0 billion in first-quarter 2020, a decrease of 5.8 percent year over year. Segment EBITDA margin (non-GAAP) was 25.6 percent, down from 27.1 percent in first-quarter 2019.

Media results


•	Total Verizon Media revenues were $1.7 billion, down 4.0 percent year over year, driven almost entirely by COVID-19 impacts. Prior to the COVID-19 crisis, year over year revenue trends continued the steady improvement seen in full-year 2019. Verizon Media has seen increased levels of customer engagement on its platforms, but advertising rates have declined in the current environment.

Outlook and guidance

Based on the unprecedented magnitude of current conditions, Verizon is updating financial guidance for full-year 2020:


•	The company now expects adjusted EPS growth (non-GAAP) of -2 to 2 percent, an update from prior guidance for 2020 adjusted EPS growth (non-GAAP) of 2 to 4 percent. This updated expectation is based on a scenario that assumes significant headwinds prevailing through second-quarter 2020.


•	The company is withdrawing financial guidance related to Consolidated Revenues.

Page 4

VlpHU09DSUQyMDE5UTE=

Verizon also expects the following:


•	Capital spending to be in the range of $17.5 billion to $18.5 billion as previously announced, to facilitate network activity and help support the economy during this period of disruption.


•	Adjusted effective income tax rate (non-GAAP) in the range of 23 percent to 25 percent.

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) was formed on June 30, 2000 and is celebrating its 20th year as one of the world’s leading providers of technology, communications, information and entertainment products and services. Headquartered in New York City and with a presence around the world, Verizon generated revenues of $131.9 billion in 2019. The company offers voice, data and video services and solutions on its award winning networks and platforms, delivering on customers’ demand for mobility, reliable network connectivity, security and control.

####

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 results and could cause those results to differ materially from those expressed in the forward-looking statements: cyber attacks impacting our networks or systems and any resulting financial or reputational impact; natural disasters, terrorist attacks or acts of war or significant litigation and any resulting financial or reputational impact; the impact of the recent global outbreak of COVID-19 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 the COVID-19 outbreak; material adverse changes in labor matters and any resulting financial or operational impact; the effects of competition in the markets in which we operate; failure to take advantage 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; changes in the regulatory environment in which we operate, including any increase in restrictions on our ability to operate our business; 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; 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.

Page 5

VlpHU09DSUQyMDE5UTE=

Verizon Communications Inc.

Condensed Consolidated Statements of Income



(dollars in millions, except per share amounts)
Unaudited	3 Mos. Ended 3/31/20			3 Mos. Ended 3/31/19			% Change

Operating Revenues
Service revenues and other	$	27,481		$	27,197		1.0
Wireless equipment revenues	4,129			4,931			(16.3)
Total Operating Revenues	31,610			32,128			(1.6)

Operating Expenses
Cost of services	7,754			7,792			(0.5)
Cost of wireless equipment	4,542			5,198			(12.6)
Selling, general and administrative expense	8,585			7,198			19.3
Depreciation and amortization expense	4,150			4,231			(1.9)
Total Operating Expenses	25,031			24,419			2.5

Operating Income	6,579			7,709			(14.7)
Equity in losses of unconsolidated businesses	(12		)	(6		)	*
Other income, net	143			295			(51.5)
Interest expense	(1,034		)	(1,210		)	(14.5)
Income Before Provision For Income Taxes	5,676			6,788			(16.4)
Provision for income taxes	(1,389		)	(1,628		)	(14.7)
Net Income	$	4,287		$	5,160		(16.9)

Net income attributable to noncontrolling interests	$	131		$	128		2.3
Net income attributable to Verizon	4,156			5,032			(17.4)
Net Income	$	4,287		$	5,160		(16.9)

Basic Earnings Per Common Share
Net income attributable to Verizon	$	1.00		$	1.22		(18.0)
Weighted-average shares outstanding (in millions)	4,139			4,138

Diluted Earnings Per Common Share ⁽¹⁾
Net income attributable to Verizon	$	1.00		$	1.22		(18.0)
Weighted-average shares outstanding (in millions)	4,141			4,140

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)
Unaudited	3/31/20			12/31/19			$ Change

Assets
Current assets
Cash and cash equivalents	$	7,047		$	2,594		$	4,453
Accounts receivable	24,852			26,162			(1,310		)
Less: Allowance for credit losses	1,055			—			1,055
Less: Allowance for doubtful accounts	—			733			(733		)
Accounts receivable, net	23,797			25,429			(1,632		)
Inventories	1,633			1,422			211
Prepaid expenses and other	8,228			8,028			200
Total current assets	40,705			37,473			3,232

Property, plant and equipment	268,993			265,734			3,259
Less accumulated depreciation	176,816			173,819			2,997
Property, plant and equipment, net	92,177			91,915			262
Investments in unconsolidated businesses	543			558			(15		)
Wireless licenses	92,471			95,059			(2,588		)
Goodwill	24,382			24,389			(7		)
Other intangible assets, net	9,371			9,498			(127		)
Operating lease right-of-use assets	22,472			22,694			(222		)
Other assets	12,379			10,141			2,238
Total assets	$	294,500		$	291,727		$	2,773

Liabilities and Equity
Current liabilities
Debt maturing within one year	$	11,175		$	10,777		$	398
Accounts payable and accrued liabilities	17,419			21,806			(4,387		)
Current operating lease liabilities	3,331			3,261			70
Other current liabilities	9,132			9,024			108
Total current liabilities	41,057			44,868			(3,811		)

Long-term debt	106,561			100,712			5,849
Employee benefit obligations	17,617			17,952			(335		)
Deferred income taxes	33,709			34,703			(994		)
Non-current operating lease liabilities	18,117			18,393			(276		)
Other liabilities	15,786			12,264			3,522
Total long-term liabilities	191,790			184,024			7,766

Equity
Common stock	429			429			—
Additional paid in capital	13,302			13,419			(117		)
Retained earnings	54,557			53,147			1,410
Accumulated other comprehensive income (loss)	(1,502		)	998			(2,500		)
Common stock in treasury, at cost	(6,725		)	(6,820		)	95
Deferred compensation – employee stock ownership plans and other	149			222			(73		)
Noncontrolling interests	1,443			1,440			3
Total equity	61,653			62,835			(1,182		)
Total liabilities and equity	$	294,500		$	291,727		$	2,773

Verizon Communications Inc.

Consolidated - Selected Financial and Operating Statistics



(dollars in millions, except per share amounts)
Unaudited	3/31/20		12/31/19

Total debt	$	117,736	$	111,489
Net unsecured debt	$	97,700	$	96,526
Net unsecured debt / Consolidated Adjusted EBITDA⁽¹⁾	2.1x		2.0x
Common shares outstanding end of period (in millions)	4,138		4,136
Total employees (‘000)	135.5		135.0
Quarterly cash dividends declared per common share	$	0.6150	$	0.6150

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 3/31/20			3 Mos. Ended 3/31/19			$ Change

Cash Flows from Operating Activities
Net Income	$	4,287		$	5,160		$	(873	)
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization expense	4,150			4,231			(81		)
Employee retirement benefits	(1		)	(195		)	194
Deferred income taxes	(87		)	459			(546		)
Provision for uncollectible accounts	553			319			234
Equity in losses of unconsolidated businesses, net of dividends received	26			21			5
Changes in current assets and liabilities, net of effects from acquisition/disposition of businesses	(1,208		)	(2,702		)	1,494
Discretionary employee benefits contributions	—			(300		)	300
Other, net	1,104			88			1,016
Net cash provided by operating activities	8,824			7,081			1,743

Cash Flows from Investing Activities
Capital expenditures (including capitalized software)	(5,274		)	(4,268		)	(1,006		)
Acquisitions of businesses, net of cash acquired	—			(25		)	25
Acquisitions of wireless licenses	(210		)	(104		)	(106		)
Other, net	(1,496		)	(406		)	(1,090		)
Net cash used in investing activities	(6,980		)	(4,803		)	(2,177		)

Cash Flows from Financing Activities
Proceeds from long-term borrowings	5,848			2,131			3,717
Proceeds from asset-backed long-term borrowings	2,844			1,117			1,727
Repayments of long-term borrowings and finance lease obligations	(1,700		)	(2,963		)	1,263
Repayments of asset-backed long-term borrowings	(2,229		)	(813		)	(1,416		)
Dividends paid	(2,547		)	(2,489		)	(58		)
Other, net	347			360			(13		)
Net cash provided by (used in) financing activities	2,563			(2,657		)	5,220

Increase (decrease) in cash, cash equivalents and restricted cash	4,407			(379		)	4,786
Cash, cash equivalents and restricted cash, beginning of period	3,917			3,916			1
Cash, cash equivalents and restricted cash, end of period	$	8,324		$	3,537		$	4,787

Verizon Communications Inc.

Consumer - Selected Financial Results



(dollars in millions)
Unaudited	3 Mos. Ended 3/31/20			3 Mos. Ended 3/31/19			% Change

Operating Revenues
Service	$	16,341		$	16,259		0.5
Wireless equipment	3,377			4,166			(18.9)
Other	2,047			1,723			18.8
Total Operating Revenues	21,765			22,148			(1.7)

Operating Expenses
Cost of services	3,930			3,879			1.3
Cost of wireless equipment	3,451			4,142			(16.7)
Selling, general and administrative expense	4,282			3,983			7.5
Depreciation and amortization expense	2,820			2,894			(2.6)
Total Operating Expenses	14,483			14,898			(2.8)

Operating Income	$	7,282		$	7,250		0.4
Operating Income Margin	33.5		%	32.7		%

Segment EBITDA	$	10,102		$	10,144		(0.4)
Segment EBITDA Margin	46.4		%	45.8		%

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 segment performance.

Certain intersegment transactions with corporate entities have not been eliminated.

Verizon Communications Inc.

Consumer - Selected Operating Statistics




Unaudited	3/31/20			3/31/19			% Change

Connections (‘000):
Wireless retail postpaid connections	89,914			89,580			0.4
Wireless retail prepaid connections	3,980			4,479			(11.1	)
Total wireless retail connections	93,894			94,059			(0.2	)

Fios video connections	4,068			4,322			(5.9	)
Fios Internet connections	5,961			5,808			2.6
Fios digital voice residence connections	3,526			3,758			(6.2	)
Fios digital connections	13,555			13,888			(2.4	)
Broadband connections	6,481			6,476			0.1
Voice connections	5,578			6,184			(9.8	)

Unaudited	3 Mos. Ended 3/31/20			3 Mos. Ended 3/31/19			% Change

Gross Additions (‘000):
Wireless retail postpaid	2,220			2,714			(18.2	)

Net Additions Detail (‘000) :
Wireless retail postpaid ⁽¹⁾	(525		)	(201		)	*
Wireless retail prepaid ⁽¹⁾	(84		)	(176		)	52.3
Total wireless retail ⁽¹⁾	(609		)	(377		)	(61.5	)

Wireless retail postpaid phones ⁽¹⁾	(307		)	(163		)	(88.3	)

Fios video	(84		)	(55		)	(52.7	)
Fios Internet	59			48			22.9
Fios digital voice residence	(94		)	(45		)	*
Fios digital	(119		)	(52		)	*
Broadband ⁽¹⁾	31			16			93.8
Voice	(176		)	(148		)	(18.9	)

Churn Rate:
Wireless retail postpaid	1.01		%	1.08		%
Wireless retail postpaid phones	0.77		%	0.81		%
Wireless retail	1.20		%	1.32		%

Revenue Statistics (in millions):
Wireless service revenue	$	13,476		$	13,357		0.9
Fios revenues	$	2,799		$	2,764		1.3

Verizon Communications Inc.



Unaudited	3 Mos. Ended 3/31/20			3 Mos. Ended 3/31/19			% Change

Other Wireless Statistics:
Wireless retail postpaid ARPA ⁽²⁾	$	118.86		$	117.45		1.2
Wireless retail postpaid upgrade rate	3.7		%	4.4		%
Wireless retail postpaid accounts (‘000) ⁽³⁾	33,669			33,958			(0.9	)
Wireless retail postpaid connections per account ⁽³⁾	2.67			2.64			1.1
Total wireless Internet postpaid base ⁽³⁾	16.1		%	16.1		%

Footnotes:

(1) Connection net additions include certain adjustments.

(2) Wireless retail postpaid ARPA - average service revenue per account from retail postpaid accounts.

(3) Statistics presented as of end of period.

Certain intersegment transactions with corporate entities have not been eliminated.

* Not meaningful

Verizon Communications Inc.

Business - Selected Financial Results



(dollars in millions)
Unaudited	3 Mos. Ended 3/31/20			3 Mos. Ended 3/31/19			% Change

Operating Revenues
Global Enterprise	$	2,631		$	2,691		(2.2)
Small and Medium Business	2,804			2,708			3.5
Public Sector and Other	1,474			1,471			0.2
Wholesale	772			849			(9.1)
Total Operating Revenues	7,681			7,719			(0.5)

Operating Expenses
Cost of services	2,589			2,591			(0.1)
Cost of wireless equipment	1,090			1,057			3.1
Selling, general and administrative expense	2,034			1,981			2.7
Depreciation and amortization expense	1,014			1,042			(2.7)
Total Operating Expenses	6,727			6,671			0.8

Operating Income	$	954		$	1,048		(9.0)
Operating Income Margin	12.4		%	13.6		%

Segment EBITDA	$	1,968		$	2,090		(5.8)
Segment EBITDA Margin	25.6		%	27.1		%

Footnotes:

Certain intersegment transactions with corporate entities have not been eliminated.

Verizon Communications Inc.

Business - Selected Operating Statistics




Unaudited	3/31/2020			3/31/2019			% Change

Connections (‘000):
Wireless retail postpaid connections	25,658			23,737			8.1

Fios video connections	77			76			1.3
Fios Internet connections	330			311			6.1
Fios digital connections	407			387			5.2
Broadband connections	501			497			0.8
Voice connections	4,860			5,269			(7.8)

Unaudited	3 Mos. Ended 3/31/20			3 Mos. Ended 3/31/19			% Change

Gross Additions (‘000):
Wireless retail postpaid	1,464			1,140			28.4

Net Add Detail (‘000):
Wireless retail postpaid ⁽¹⁾	475			264			79.9
Wireless retail postpaid phones ⁽¹⁾	239			120			99.2

Fios video	—			2			*
Fios Internet	4			4			—
Fios digital	4			6			(33.3)
Broadband ⁽¹⁾	(5		)	(4		)	(25.0)
Voice	(99		)	(131		)	24.4

Churn Rate:
Wireless retail postpaid	1.30		%	1.24		%
Wireless retail postpaid phones	1.02		%	1.02		%

Revenue Statistics (in millions):
Wireless service revenue	$	2,881		$	2,694		6.9
Fios revenues	$	262		$	243		7.8

Other Operating Statistics:
Wireless retail postpaid upgrade rate	3.6		%	4.4		%
Total wireless Internet postpaid base ⁽²⁾	33.7		%	33.4		%

Footnotes:

(1) Connection net additions include certain adjustments.

(2) Statistics presented as of end of period.

Certain intersegment transactions with corporate entities have not been eliminated.

Prior year amounts revised to conform to current period presentation.


*	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.




Unaudited	3/31/20			3/31/19			% Change

Connections (‘000)
Retail postpaid	115,572			113,317			2.0
Retail prepaid	3,980			4,479			(11.1)
Total retail	119,552			117,796			1.5

Unaudited	3 Mos. Ended 3/31/20			3 Mos. Ended 3/31/19			% Change

Net Add Detail (‘000) ⁽¹⁾
Retail postpaid phone	(68		)	(43		)	(58.1)
Retail postpaid	(50		)	63			*
Retail prepaid	(84		)	(176		)	52.3
Total retail	(134		)	(113		)	(18.6)

Account Statistics
Retail postpaid accounts (‘000) ⁽²⁾	35,209			35,338			(0.4)
Retail postpaid connections per account ⁽²⁾	3.28			3.21			2.2
Retail postpaid ARPA ⁽³⁾	$	138.80		$	136.53		1.7

Churn Detail
Retail postpaid phone	0.82		%	0.84		%
Retail postpaid	1.08		%	1.12		%
Retail	1.22		%	1.31		%

Retail Postpaid Connection Statistics
Total Internet postpaid base⁽²⁾	20.0		%	19.7		%
Upgrade rate	3.7		%	4.4		%

Revenue Statistics (in millions) ⁽⁴⁾
Wireless service	$	16,357		$	16,051		1.9
Wireless equipment	4,129			4,931			(16.3)
Wireless other	2,079			1,686			23.3
Total Wireless	$	22,565		$	22,668		(0.5)

Footnotes:

(1) Connection net additions include certain adjustments.

(2) Statistics presented as of end of period.

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

(4) Intersegment transactions between Consumer or Business segment with corporate entities have not been eliminated.

Prior year amounts revised to conform to current period presentation.

* Not meaningful

Verizon Communications Inc.

Non-GAAP Reconciliations - Consolidated Verizon

Consolidated EBITDA and Consolidated Adjusted EBITDA



(dollars in millions)
Unaudited	3 Mos. Ended 3/31/20			3 Mos. Ended 12/31/19			3 Mos. Ended 9/30/19			3 Mos. Ended 6/30/19		3 Mos. Ended 3/31/19

Consolidated Net Income	$	4,287		$	5,217		$	5,337		$	4,074	$	5,160
Add/(subtract):
Provision (benefit) for income taxes	1,389			(1,505		)	1,586			1,236		1,628
Interest expense	1,034			1,159			1,146			1,215		1,210
Depreciation and amortization expense	4,150			4,105			4,114			4,232		4,231
Consolidated EBITDA	$	10,860		$	8,976		$	12,183		$	10,757	$	12,229

Add/(subtract):
Other (income) expense, net*	$	(143	)	$	1,773		$	110		$	1,312	$	(295	)
Equity in losses (earnings) of unconsolidated businesses†	12			(5		)	1			13		6
Impairment charges	—			186			—			—		—
Severance charges	—			204			—			—		—
Loss on spectrum license auction	1,195			—			—			—		—
Net gain from dispositions of assets and businesses	—			—			(261		)	—		—
	1,064			2,158			(150		)	1,325		(289		)
Consolidated Adjusted EBITDA	$	11,924		$	11,134		$	12,033		$	12,082	$	11,940


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


†	Includes impairment charges, where applicable.

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



(dollars in millions)
Unaudited	3/31/20		12/31/19

Debt maturing within one year	$	11,175	$	10,777
Long-term debt	106,561		100,712
Total Debt	117,736		111,489
Less Secured debt	12,989		12,369
Unsecured debt	104,747		99,120
Less Cash and cash equivalents	7,047		2,594
Net Unsecured Debt	$	97,700	$	96,526
Net Unsecured Debt to Consolidated Adjusted EBITDA Ratio	2.1x		2.0x

Verizon Communications Inc.

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



(dollars in millions, except per share amounts)
Unaudited								3 Mos. Ended 3/31/20										3 Mos. Ended 3/31/19
	Pre-tax		Tax			After-Tax				Pre-tax			Tax		After-Tax
EPS								$	1.00									$	1.22
Net pension remeasurement charge (credit)	$	182	$	(47	)	$	135	0.03		$	(96	)	$	25	$	(71	)	(0.02		)
Loss on spectrum license auction	1,195		(281		)	914		0.22		—			—		—			—
	$	1,377	$	(328	)	$	1,049	$	0.25	$	(96	)	$	25	$	(71	)	$	(0.02	)
Adjusted EPS								$	1.26									$	1.20


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

Verizon Communications Inc.

Non-GAAP Reconciliations - Segments

Segment EBITDA and Segment EBITDA Margin

Consumer



(dollars in millions)
Unaudited	3 Mos. Ended 3/31/20			3 Mos. Ended 3/31/19

Operating Income	$	7,282		$	7,250
Add Depreciation and amortization expense	2,820			2,894
Segment EBITDA	$	10,102		$	10,144
Year over year change	(0.4		)%

Total operating revenues	$	21,765		$	22,148
Operating Income Margin	33.5		%	32.7		%
Segment EBITDA Margin	46.4		%	45.8		%

Business



(dollars in millions)
Unaudited	3 Mos. Ended 3/31/20			3 Mos. Ended 3/31/19

Operating Income	$	954		$	1,048
Add Depreciation and amortization expense	1,014			1,042
Segment EBITDA	$	1,968		$	2,090
Year over year change	(5.8		)%

Total operating revenues	$	7,681		$	7,719
Operating Income Margin	12.4		%	13.6		%
Segment EBITDA Margin	25.6		%	27.1		%