8-KRegulation FD

VERIZON COMMUNICATIONS INC 8-K Report, Regulation FD Disclosure (Jul 27, 2010)

Filed July 27, 2010For Securities:VZ

Summary

Verizon Communications Inc. (VZ) filed an 8-K on July 26, 2010, reporting on their Q2 2010 performance and outlook for the remainder of the year. A key highlight from the filing is the company's performance in the first half of 2010, where adjusted earnings per share (EPS) was $1.13. This figure notably excludes approximately $0.12 of EPS impact from assets spun off to Frontier Communications and divested properties related to the Alltel acquisition. Looking ahead, Verizon expressed optimism for the second half of 2010. The company anticipates continued year-over-year revenue and retail postpaid Average Revenue Per User (ARPU) growth in its Wireless segment, alongside strong EBITDA margin performance. Furthermore, Verizon expects improved EBITDA margins in its Wireline business following cost reduction initiatives and workforce reductions, particularly for the properties remaining after the Frontier transaction. The company also reiterated its full-year 2010 capital expenditure guidance and confirmed plans to launch 4G LTE service in 25-30 markets by year-end.

Key Highlights

  • 1Adjusted EPS for the first half of 2010 was $1.13, excluding $0.12 related to the Frontier spin-off and Alltel acquisition divestitures.
  • 2Verizon expects adjusted EPS for the second half of 2010 to be 5-10% higher than the $1.01 adjusted base (excluding divested properties).
  • 3Anticipates continued year-over-year Wireless revenue and retail postpaid ARPU growth in the second half of 2010.
  • 4Expects strong EBITDA margin performance to continue in the Wireless segment during the second half of 2010.
  • 5Forecasts improved Wireline EBITDA margins in H2 2010 compared to H1 2010, driven by cost reduction initiatives.
  • 6Reiterates full-year 2010 capital expenditure guidance of $16.8 billion to $17.2 billion.
  • 7Confirms plans to launch 4G LTE service in 25-30 markets by the end of 2010.

Frequently Asked Questions

Verizon's adjusted EPS for the first half of 2010 was $1.13. This figure excludes approximately $0.12 of EPS impact related to assets spun off to Frontier Communications and overlapping properties divested as a condition for the Alltel acquisition.

Verizon expects continued year-over-year growth in Wireless revenue and retail postpaid ARPU for the second half of 2010. The company also anticipates strong EBITDA margin performance to continue in this segment.

Yes, Verizon expects that the Wireline segment's EBITDA margin for the properties remaining after the Frontier Communications transaction will improve in the second half of 2010 on a comparable basis to the first half. This improvement is attributed to workforce reductions and other cost-saving initiatives.

Verizon reiterates its full-year 2010 guidance for capital expenditures to be between $16.8 billion and $17.2 billion. The company also expects that consolidated capital expenditures and Wireline capital expenditures will be lower in 2011 than in 2010.