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OFFON

VERIZON COMMUNICATIONS

(VZ)
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VERIZON COMMUNICATIONS INC : Results of Operations and Financial Condition, Financial Statements and Exhibits (form 8-K)

04/21/2021 | 07:36am EDT
Item 2.02. Results of Operations and Financial Condition
Attached as an exhibit hereto are a press release and financial tables dated
April 21, 2021 issued by Verizon Communications Inc. (Verizon).
Non-GAAP Measures
Verizon's press release and financial tables include financial information
prepared in conformity with generally accepted accounting principles in the
United States (GAAP) as well as non-GAAP financial information. It is
management's intent to provide non-GAAP financial information to enhance the
understanding of Verizon's GAAP financial information and it should be
considered by the reader in addition to, but not instead of, the financial
statements prepared in accordance with GAAP. Each non-GAAP financial measure is
presented along with the corresponding GAAP measure so as not to imply that more
emphasis should be placed on the non-GAAP measure. We believe that providing
these non-GAAP measures in addition to the GAAP measures allows management,
investors and other users of our financial information to more fully and
accurately assess both consolidated and segment performance. The non-GAAP
financial information presented may be determined or calculated differently by
other companies and may not be directly comparable to that of other companies.
EBITDA and EBITDA Margin Related Non-GAAP Measures
Consolidated earnings before interest, taxes, depreciation and amortization
(EBITDA), Segment EBITDA and Segment EBITDA Margin are non-GAAP financial
measures that we believe are useful to management, investors and other users of
our financial information as they are a widely accepted financial measures used
in evaluating the profitability of a company and with its competitors.
Consolidated EBITDA is calculated by adding back interest, taxes and
depreciation and amortization expense to net income.
Segment EBITDA is calculated by adding back segment depreciation and
amortization expense to segment operating income. Segment EBITDA Margin is
calculated by dividing Segment EBITDA by segment total operating revenues.
Consolidated Adjusted EBITDA Related to Non-GAAP Measures
Consolidated Adjusted EBITDA is a non-GAAP financial measure that we believe
provides relevant and useful information to management, investors and other
users of our financial information in evaluating the effectiveness of our
operations and underlying business trends in a manner that is consistent with
management's evaluation of business performance. We believe that Consolidated
Adjusted EBITDA is used by investors to compare a company's operating
performance to its competitors by minimizing impacts caused by differences in
capital structure, taxes and depreciation policies. Further, the exclusion of
non-operational items and special items enables comparability to prior period
performance and trend analysis.
Consolidated Adjusted EBITDA is calculated by excluding from Consolidated EBITDA
the effect of the following non-operational items: equity in losses and earnings
of unconsolidated businesses and other income and expense, net, and the
following special items: severance charges, loss on spectrum licenses and net
loss from dispositions of assets and businesses. Severance charges recorded
during 2020 relate to voluntary separations under our existing plans. Loss on
spectrum licenses relates to the reclassification of certain spectrum licenses
to assets held for sale at fair value in connection with spectrum sale
transactions in 2021 and Auction 103 in 2020. Net loss from dispositions of
assets and businesses relates to the sale of Huffington Post in 2020.
Net Unsecured Debt, Net Unsecured Debt to Consolidated Adjusted EBITDA Ratio and
Net Unsecured Debt to Consolidated Adjusted EBITDA Ratio Forecast
Net Unsecured Debt, Net Unsecured Debt to Consolidated Adjusted EBITDA Ratio and
Net Unsecured Debt to Consolidated Adjusted EBITDA Ratio Forecast are non-GAAP
financial measures that we believe are useful to management, investors and other
users of our financial information in evaluating Verizon's ability to service
its unsecured debt from continuing operations.
Net Unsecured Debt is calculated by subtracting secured debt and cash and cash
equivalents from the sum of debt maturing within one year and long-term debt.
Net Unsecured Debt to Consolidated Adjusted EBITDA Ratio is calculated by
dividing Net Unsecured Debt by Consolidated Adjusted EBITDA. For purposes of Net
Unsecured Debt to Consolidated Adjusted EBITDA Ratio, Consolidated Adjusted
EBITDA is calculated for the last twelve months.
We have not provided a reconciliation for our Net Unsecured Debt to Consolidated
Adjusted EBITDA Ratio Forecast because we cannot, without unreasonable effort,
predict the special items that could arise during 2021.


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Adjusted Earnings per Common Share (Adjusted EPS) and Adjusted EPS Forecast

Adjusted EPS and Adjusted EPS Forecast are non-GAAP financial measures that we believe are useful to management, investors and other users of our financial information in evaluating our operating results and understanding our operating trends without the effect of special items which could vary from period to period. We believe excluding special items provides more comparable assessment of our financial results from period to period.

Adjusted EPS is calculated by excluding from the calculation of reported EPS the effect of the following special items: loss on spectrum licenses and net pension remeasurement charge. We have not provided a reconciliation for our Adjusted EPS Forecast because we cannot, without unreasonable effort, predict the special items that could arise during 2021.

Adjusted Effective Income Tax Rate Attributable to Verizon Forecast (Adjusted ETR Forecast)

Adjusted ETR Forecast is a non-GAAP financial measure that we believe is useful to management, investors and other users of our financial information in assessing our effective income tax rate without the effect of special items which could vary from period to period. Adjusted ETR Forecast is calculated by dividing the Provision for income taxes by Net Income attributable to Verizon before tax after adjusting for the impact of special items.

We have not provided a reconciliation for our Adjusted ETR Forecast because we cannot, without unreasonable effort, predict the special items that could arise during 2021.

Free Cash Flow

Free cash flow is a non-GAAP financial measure that reflects an additional way of viewing our liquidity that, when viewed with our GAAP results, provides a more complete understanding of factors and trends affecting our cash flows. We believe it is a more conservative measure of cash flow since capital expenditures are necessary for ongoing operations. Free cash flow has limitations due to the fact that it does not represent the residual cash flow available for discretionary expenditures. For example, free cash flow does not incorporate payments made on finance lease obligations or cash payments for acquisitions of businesses or wireless licenses. Therefore, we believe it is important to view free cash flow as a complement to our entire consolidated statements of cash flows.

Free cash flow is calculated by subtracting capital expenditures (including capitalized software) from net cash provided by operating activities. See the accompanying schedules for reconciliations of non-GAAP financial measures to GAAP.



Item 9.01. Financial Statements and Exhibits
(d) Exhibits.

Exhibit
Number                           Description

         99                      Press release and financial tables, dated April 21, 2021, issued by
                                 Verizon Communications Inc.

        104                      Cover Page Interactive Data File (formatted as inline XBRL).


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