8-KOther Events

VERIZON COMMUNICATIONS INC 8-K Report, Corporate Update (Jul 29, 2008)

Filed July 29, 2008For Securities:VZ

Summary

Verizon Communications Inc. (VZ) filed an 8-K on July 28, 2008, discussing its second quarter 2008 results and providing an outlook for the remainder of the year. The company projected continued mid-single digit consolidated revenue growth and an ongoing improvement in margins, specifically reiterating a long-range target of 30%-33% EBITDA margin for its wireline segment. Management also indicated confidence in achieving at least a 28% wireline EBITDA margin run rate by the fourth quarter of 2008. Furthermore, Verizon provided guidance for its consolidated effective tax rate for 2008 to be between 34%-36%. Importantly, the company expressed no expectation of significant economic impact on its financial results for the second half of the year and anticipated double-digit earnings growth alongside strong cash flows for the full year 2008. A notable forward-looking statement also indicated that management would propose an increase in the quarterly dividend to the Board of Directors in the fall, with a goal of moving towards an annual dividend increase model.

Key Highlights

  • 1Verizon expects mid-single digit consolidated revenue growth for the remainder of 2008.
  • 2The company anticipates continued improvement in margins, with a reiterated long-term target of 30%-33% EBITDA margin for the wireline segment.
  • 3Verizon expects wireline EBITDA margins to reach at least a 28% run rate by the fourth quarter of 2008.
  • 4The consolidated effective tax rate for 2008 is projected to be in the 34%-36% range.
  • 5Verizon foresees no significant adverse economic impact on its financial results in the second half of 2008.
  • 6The company projects double-digit earnings growth and continued strong cash flows for the full year 2008.
  • 7Management plans to propose an increase in the dividend to the Board of Directors in the fall, aiming for an annual dividend increase model.

Frequently Asked Questions

Verizon expects continued mid-single digit consolidated revenue growth, further margin improvement (with wireline EBITDA margins projected at least 28% run rate by Q4 2008), and double-digit earnings growth with strong cash flows for the full year 2008. They also anticipate no significant negative economic impact on their results.

Verizon reiterated its long-range target for the wireline segment to achieve EBITDA margins between 30% and 33% over the next three to five years. They also anticipate that wireline EBITDA margins will be on a run rate of at least 28% in the fourth quarter of 2008.

Yes, in the fall of 2008, Verizon's management intends to ask the Board of Directors to consider an increase in the dividend. The company's long-term goal is to adopt an annual dividend increase model.

Verizon's consolidated effective tax rate for the full year 2008 is expected to be in the range of 34% to 36%.