8-KEarnings & ResultsExhibits & Filings

VERIZON COMMUNICATIONS INC 8-K Report, Financial Results (Apr 21, 2016)

Filed April 21, 2016For Securities:VZ

Summary

Verizon Communications Inc. (VZ) filed an 8-K on April 21, 2016, primarily to provide its first-quarter 2016 financial results and related commentary. The filing highlights the company's use of various non-GAAP financial measures to offer a clearer view of operational performance and trends, particularly in light of recent business changes. Key to understanding Verizon's financial narrative in this report is the introduction of "recast" figures for its Wireline segment, reflecting the divestiture of certain local exchange businesses to Frontier Communications on April 1, 2016. This recasting allows for more comparable historical data. Investors should pay close attention to these adjusted metrics, as well as other non-GAAP measures like EBITDA, Adjusted EBITDA, and Free Cash Flow, which management uses to assess operational efficiency and financial flexibility.

Key Highlights

  • 1Verizon announced its first-quarter 2016 financial results via an 8-K filing on April 21, 2016.
  • 2The company emphasizes the use of non-GAAP financial measures, including EBITDA, EBITDA Margin, Adjusted EBITDA, and Adjusted EPS, to provide enhanced insights into operational performance.
  • 3Introduction of 'Recast Wireline Total Operating Revenues' and 'Recast Wireline Segment EBITDA/EBITDA Margin' to reflect the April 1, 2016, sale of certain local exchange businesses to Frontier Communications.
  • 4The filing indicates that these recast figures are intended to provide more comparable historical data for the Wireline segment.
  • 5Verizon defines and explains various non-GAAP measures such as Free Cash Flow, Net Debt, and Net Debt to Consolidated Adjusted EBITDA Ratio, highlighting their utility for investors in evaluating cash availability, debt levels, and leverage.
  • 6The report refers to an attached press release and financial tables (Exhibit 99) which contain the detailed financial information and reconciliations of non-GAAP measures to GAAP.

Frequently Asked Questions

This 8-K filing's primary purpose is to report Verizon's financial results for the first quarter of 2016. It also serves to provide detailed definitions and explanations of the non-GAAP financial measures the company uses in its reporting to give investors a better understanding of operational performance and trends.

Verizon is using 'recast' Wireline figures because it sold certain local exchange businesses in California, Florida, and Texas to Frontier Communications on April 1, 2016. These recast numbers exclude the revenues and results from these divested businesses, allowing for more accurate and comparable historical analysis of the remaining Wireline segment's performance.

The key non-GAAP measures discussed include Consolidated EBITDA, EBITDA Margin, Wireless Segment EBITDA, Wireline Segment EBITDA, Consolidated Adjusted EBITDA, Adjusted EPS, Free Cash Flow, Net Debt, and the Net Debt to Consolidated Adjusted EBITDA Ratio. Verizon explains that these measures are intended to enhance the understanding of its financial performance beyond traditional GAAP reporting.

The detailed financial results, including specific figures for the non-GAAP measures and their reconciliation to GAAP, are provided in the press release and financial tables that are attached as Exhibit 99 to this 8-K filing.