What is the main purpose of this 8-K filing?

The main purpose of this 8-K filing is to officially report Verizon Communications Inc.'s financial results for the third quarter of 2016, along with related financial tables and a press release. It also details the non-GAAP financial measures the company uses and why.

What are 'Divested Businesses' and why are they excluded from some metrics?

Divested Businesses refers to businesses that Verizon has sold off, specifically mentioning the local landline businesses in California, Florida, and Texas that were sold on April 1, 2016. They are excluded from certain revenue and EBITDA calculations to allow for a more comparable view of the ongoing business performance and revenue trends.

What is the significance of 'Consolidated Adjusted EBITDA'?

Consolidated Adjusted EBITDA is a key non-GAAP metric that Verizon uses to provide a clearer picture of its operational performance. It excludes non-operational items (like pension adjustments, severance costs, and gains from asset sales) and the impact of divested businesses. This helps investors and management assess underlying business trends, compare performance year-over-year, and evaluate creditworthiness more effectively.

How does Verizon define 'Adjusted Earnings per Common Share' (Adjusted EPS)?

Adjusted EPS is calculated by excluding non-operational items from the reported Earnings per Common Share. These excluded items primarily include actuarial gains or losses from pension and other postretirement benefits remeasurements and severance costs. Verizon uses Adjusted EPS to offer a more meaningful comparison of its operating results and trends over time.

VZ 8-K: Earnings & Results

Summary

This 8-K filing from Verizon Communications Inc. (VZ) on October 20, 2016, primarily serves to announce the release of their third-quarter 2016 financial results and related information. The filing emphasizes the use of non-GAAP financial measures to provide investors with a clearer view of operational performance, particularly excluding the impact of divested businesses and certain non-operational items. These adjusted metrics are presented to offer a more comparable analysis of ongoing business trends and to aid in assessing the company's operating profitability and creditworthiness. Investors should note Verizon's focus on providing adjusted metrics like Consolidated Adjusted EBITDA and Adjusted Earnings per Common Share. These are intended to highlight the underlying performance of the core business by removing the effects of divestitures (specifically, the sale of local landline businesses in California, Florida, and Texas) and one-time charges or gains. The company aims to offer a more consistent and relevant picture of its financial health and operational efficiency to both management and external stakeholders, including investors and rating agencies.

Key Highlights

1Verizon Communications Inc. filed an 8-K on October 20, 2016, reporting on its third-quarter 2016 results.
2The filing includes a press release and financial tables detailing the company's performance.
3Verizon emphasizes the use of non-GAAP financial measures to provide insights into operational performance.
4Key non-GAAP metrics discussed include Consolidated Operating Revenues Excluding Divested Businesses, EBITDA, EBITDA Margin, Consolidated Adjusted EBITDA, Net Debt, Net Debt to Consolidated Adjusted EBITDA Ratio, and Adjusted Earnings per Common Share.
5The company explains the rationale for using these non-GAAP measures, stating they enhance understanding of financial performance by excluding certain items.
6Specific exclusions in non-GAAP calculations include the impact of divested businesses (e.g., sale of landline businesses in CA, FL, TX) and non-operational items like actuarial gains/losses on pensions and severance costs.
7The non-GAAP measures are presented to facilitate a more comparable analysis of revenue growth, operating profitability, and debt servicing ability, aligning with management's performance evaluation and investor comparability needs.

VERIZON COMMUNICATIONS INC 8-K Report, Financial Results (Oct 20, 2016)

Summary

Key Highlights

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