Form 8-K
26 September 2003 - 4:21AM
UK Regulatory
RNS Number:1915Q
Verizon Communications
25 September 2003
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report: September 23, 2003
(Date of earliest event reported)
VERIZON COMMUNICATIONS INC.
(Exact name of registrant as specified in its charter)
Delaware 1-8606 23-2259884
(State or other jurisdiction of (Commission File Number) (I.R.S. Employer Identification No.)
incorporation)
1095 Avenue of the Americas
New York, New York 10036
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (212) 395-2121
Not applicable
(Former name or former address, if changed since last report)
Item 9. Regulation FD Disclosure.
Set forth below is a press release issued by Verizon Communications Inc.
(VERIZON LOGO)
NEWS RELEASE
FOR IMMEDIATE RELEASE MEDIA CONTACTS;
Sept. 23, 2003 PETER THONIS
212-395-2355
peter.thonis@verizon.com
BOB VARETTONI
212-395-7726
robert.a.varettoni@verizon.com
VERIZON REVISES FINANCIAL FORECAST FOR 2003
MEW EPS GUIDANCE REFLECTS SECOND-HALF EVENTS; WIRELESS EXCEEDS EXPECTATIONS;
OVERALL REVENUE GROWTH, DEBT TARGET REITERATED; REDUCTION IN CAPITAL
EXPENDITURES
* Diluted Earnings Per Share (EPS) before special items: $2.56 to $2.60,
from $2.70 to $2.80
* Comparable revenue growth: 0 to 2 percent, reiterated
* Verizon Wireless: more than 4.5 million net retail customer additions for
2003, up from more than 4 million
* Capital Expenditures: $12 billion to $12.5 billion, reduced from $12.5
billion to $13.5 billion.
* Year-End Net Debt (total debt less cash and cash equivalents): $46 billion
to $47 billion, reiterated
Note: The schedules accompanying this news release provide reconciliations to
generally accepted accounting principles (GAAP) for all non-GAAP financial
measures mentioned in this announcement.
NEW YORK - Verizon Communications Inc. (NYSE:VZ) today announced changes
in 2003 financial targets -- resetting adjusted EPS to a range of $2.56 to
$2.60, while reiterating the company's overall revenue growth estimate and debt
target, increasing expectations for Verizon Wireless customer additions, and
reducing expected full-year capital spending.
Verizon CEO Ivan Seidenberg said, "Reviewing the changing operational,
economic and regulatory conditions in the second half, we remain, confident in
our long-term strategy for growth and value-creation, and we are taking steps,
such as our groundbreaking labor contracts, to remove uncertainties that have
clouded the investment outlook for Verizon."
The labor agreements, announced earlier this month, will slow the rate
of expense growth in Verizon's largest business unit, Domestic Telecom, while
providing labor stability over the next five years.
Lowered EPS guidance results from 10 to 12 cents per share in additional
operational impacts from issues that have emerged since mid-year, and 4 cents
per share in primarily non-cash expenses related to a change in treatment of
retiree healthcare obligations (FAS 106).
Issues affecting financial forecasts for the second half include pressures
on Domestic Telecom revenues due largely to the economy and new regulatory
constraints. Demand for business voice services remains soft as unemployment
levels remain high; demand for consumer landline services has been impacted
by technology substitution; and state and federal regulatory rulings,
particularly the Federal Communications Commission's Triennial Review order,
will have an ongoing adverse effect on revenues.
Additional expense pressures include contingency costs to maintain
operational readiness during labor negotiations, and the timing of a 3 percent
lump sum payment that was part of the settlement. Domestic Telecom has seen
increased repair costs due to record-setting rainfall, while Verizon Wireless
has seen increased customer acquisition expenses that are fueling the higher
levels of customer additions expected in the second half.
GROWTH IN DSL, LONG DISTANCE, INTERNATIONAL
Somewhat offsetting revenue and expense pressures has been continued
growth in Verizon's DSL (digital subscriber line) and long-distance businesses.
Verizon currently has more than 2 million billed DSL lines, on track with
prior guidance, and the company is seeing similar long-distance growth trends in
the third quarter as in the second quarter, when the company reported 1.4
million net additional long-distance lines.
Also offsetting the pressures are expected results from Verizon
International, driven primarily by the results at Italian wireless provider
Omnitel as well as asset sales.
REVENUE GROWTH REITERATED
"While our industry is rapidly transforming, we are reiterating top-line
revenue growth targets this year and building long-term value by focusing on
the opportunities we see in wireless, broadband and the Enterprise business
market," Seidenberg said, "Contributing to this solid foundation, Verizon
Wireless has significantly outperformed expectations, and Domestic Telecom
continues its excellent track record of containing costs and maintaining
margins. Verizon also continues to generate strong cash flows which, as we get
closer to our targeted debt levels, will give us more flexibility to create
shareholder value."
WIRELESS, CAPITAL AND DEBT TARGETS
Verizon Wireless now expects a total of more than 4.5 million net retail
customer additions for 2003. Previous guidance, announced two months ago, was
for more than 4 million.
Verizon expects 2003 capital expenditures to be in the range of $12 billion
to $12.5 billion, a $1 billion reduction from the high end of previous guidance
of $12.5 billion to $13.5 billion. Investments in wireless remain as previously
targeted, with demand-driven declines in Domestic Telecom investment due to
decreases in access lines and other reductions due to the sale of the company's
stake in Mexican wireless carrier Grupo Iusacell and lower capital spending
at subsidiaries.
Verizon is reiterating its year-end net debt target of $46 billion to $47
billion. The company began the year with a target of $49 billion to $51 billion
and revised it in July.
ONGOING IMPACTS
Beginning in 2004, the accounting for retiree healthcare obligations is
estimated to reduce EPS by an additional 16 cents per year. These are primarily
non-cash expenses.
Verizon has also announced that, under a program to reduce the workforce,
voluntary separation incentives have been made available to most union and
management employees. The company expects to take a severance charge for these
separations in the fourth quarter.
A Fortune 10 company, Verizon Communications (NYSE:VZ) is one of the
world's leading providers of communications services, with approximately $67
billion in revenues and 221,000 employees. Verizon companies are the largest
providers of wireline and wireless communications in the United States, with
137.6 million access line equivalents and 34.6 million Verizon Wireless
customers. Verizon is the third largest long-distance carrier for U.S.
consumers, with 14.6 million long-distance lines. The company is also the
largest directory publisher in the world, as measured by directory titles and
circulation. Verizon's international presence includes wireline and wireless
communications operations and investments, primarily in the Americas and Europe.
For more information, visit www.verizon.com.
#####
VERIZON'S ONLINE NEWS CENTER: Verizon news releases, executive speeches and
biographies, media contacts and other information are available at Verizon's
News Center on the World Wide Web at www.verizon.com/news. To receive news
releases by e-mail, visit the News Center and register for customized automatic
delivery of Verizon news releases.
NOTE: This press release contains statements about expected future events and
financial results that are forward-looking and subject to risks and
uncertainties. For those statements, we claim the protection of the safe harbor
for forward-looking statements contained in the Private Securities Litigation
Reform Act of 1995 . The following important factors could affect future
results and could cause those results to differ materially from those expressed
in the forward-looking statements: the duration and extent of the current
economic downturn; materially adverse changes in economic or labor conditions,
including labor negotiations and any resulting financial and/or operational
impact, in the markets served by us or by companies in which we have substantial
investments; material changes in available technology; technology substitution;
an adverse change in the ratings afforded our debt securities by nationally
accredited ratings organisations; the final results of federal and state
regulatory proceedings concerning our provision of retail and wholesale services
and judicial review of those results; the effects of competition in our
markets; our ability to satisfy regulatory merger conditions; the ability of
Verizon Wireless to continue to obtain sufficient spectrum resources; our
ability to recover insurance proceeds relating to equipment losses and other
adverse financial impacts resulting from the terrorist attacks on Sept. 11,
2001; and changes in our accounting assumptions that regulatory agencies,
including the SEC, may require or that result from changes in the accounting
rules or their application, which could result in an impact on earnings.
NON-GAAP RECONCILIATIONS
FINANCIAL UPDATE
SEPTEMBER 23, 3003
FINANCIAL UPDATED
SEPTEMBER 23, 2003
NON-GAAP RECONCILIATION
2003 DILUTED EARNINGS PER SHARE*
2003 ESTIMATED EPS - GAAP $2.18 TO $2.22
IUSACELL CHARGE $0.33
SEVERANCE PENSION & BENEFIT CHARGES $0.16
LEASE IMPACT & SPECIAL CHARGES $0.07
IMPACT OF ADOPTING FAS 143 $(0.77)
IMPACT OF DIRECTORY ACCOUNTING CHANGE $0.59
2003 ADJUSTED EPS TARGET $2.56 TO $2.60
*BASED ON CURRENTLY AVAILABLE ESTIMATES
FINANCIAL UPDATE
SEPTEMBER 23, 2003
NON-GAAP RECONCILIATION
NET DEBT GUIDANCE
NET DEBT IS DEFINED AS FOLLOWS:
DEBT MATURING IN ONE YEAR, PLUS
LONG TERM DEBT, LESS
CASH & CASH EQUIVALENTS
NO CURRENT ESTIMATES OF YEAR END 2003/04 DEBT OR
CASH & CASH EQUIVALENTS ARE AVAILABLE
FINANCIAL UPDATE
SEPTEMBER 23, 2003
NON-GAAP RECONCILIATION
REVENUE GUIDANCE
(MILLIONS)
2002 REVENUES - GAAP $ 67,304
IMPACT OF ACCESS LINES SOLD (623)
2003 ESTIMATED REVENUES - GAAP $ 66,681 TO $ 68,014
GROWTH 0% TO 2%
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
Verizon Communications Inc.
(Registrant)
Date: September 23, 2003 /s/ David H. Benson
David H. Benson
Senior Vice President and Controller
This information is provided by RNS
The company news service from the London Stock Exchange
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