Summary
Verizon Communications Inc. filed an 8-K on January 26, 2010, to report its financial results for the period ending January 25, 2010. A key aspect of this filing is the inclusion of a press release and financial tables that present both Generally Accepted Accounting Principles (GAAP) and non-GAAP financial measures. The company emphasizes the use of non-GAAP measures to provide investors with a clearer understanding of operational performance and trends, particularly by excluding "special items" that are non-operational or recurring. Furthermore, the filing highlights the pro forma financial information related to the acquisition of Alltel Corporation. This pro forma data is presented as if the acquisition occurred on January 1, 2008, offering a comparable view of combined operating results before special items. Management believes this approach aids in assessing trends and future operating results, especially in light of the significant acquisition. The report also details specific non-GAAP measures for Verizon Wireless, including cash expense per customer, Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA), and EBITDA service margin. These metrics are used internally and provided externally to allow for better evaluation of operating expense efficiency, profitability, and comparisons with industry peers. Free Cash Flow is also presented as a key metric for assessing cash available for debt and dividends.
Key Highlights
- 1Verizon Communications Inc. released its financial results for the period ending January 25, 2010, via an 8-K filing on January 26, 2010.
- 2The filing includes a press release with financial tables presenting both GAAP and non-GAAP financial measures.
- 3Verizon utilizes non-GAAP measures to present 'income before special items' to offer a clearer view of operational performance and trends by excluding non-operational or recurring items.
- 4Pro forma financial information is provided for the acquisition of Alltel Corporation, presented as if it occurred on January 1, 2008, to offer comparable operating results before special items.
- 5Key non-GAAP metrics for Verizon Wireless, such as cash expense per customer, EBITDA, and EBITDA service margin, are detailed for performance evaluation.
- 6Free Cash Flow is presented as an additional non-GAAP metric to assess the company's cash generation after capital expenditures.
- 7The company stresses that non-GAAP information should be considered in addition to, and not in lieu of, GAAP financial statements.