Verizon
Content
Verizon
Tony Gauvin
All images from www22.verizon.com
©2005 Tony Gauvin, UMFK
Overview
Existing Condition
New Vision and Mission
External opportunities and threats
SWOT Matrix
SPACE
BCG
IE matrix
Grand Strategy Matrix
QSPM
Possible strategies
Recommendations
IFE
Analysis
CPM
EFE
Internal strengths and weaknesses
Industry overview
Strategic implementation and desired results
Annual objectives (goal) and polices
Evaluation Procedure
Wednesday,
March 23, 2005
© 2005 Tony Gauvin,
UMFK
Verizon Overview
Verizon Communications Inc. is a provider of communications services with four
operating segments:
Domestic Telecom
Domestic Wireless
Domestic Wireless products and services include wireless voice and data services
and equipment sales across the United States.
Information Services
Domestic Telecom services principally represent Verizon's telephone operations that
provide local telephone services in 29 states and the District of Columbia
The Information Services segment encompasses Verizon’s domestic and international
publishing businesses, including print SuperPages and electronic SuperPages.com
directories, as well as Website creation and other electronic commerce services. This
segment has operations principally in North America and Latin America
International
The International segment has wireline and wireless communications operations and
investments primarily in the Americas, as well as investments in Europe.
Wednesday,
March 23, 2005
© 2005 Tony Gauvin,
UMFK
History
Formed on June 30, 2000, with the merger
of Bell Atlantic Corp. and GTE Corp.
GTE
Bell Atlantic
7.1 million wireless customers
35 million land lines in US, Canada and Caribbean
43 million mobile customers
World’s largest directory information service
Trades as VZ on NTSE
Wednesday,
March 23, 2005
© 2005 Tony Gauvin,
UMFK
Stock Price Performance
Wednesday,
March 23, 2005
© 2005 Tony Gauvin,
UMFK
Industry overveiw (2005)
More than 40 percent of long-distance telephone use and more than a third of local
telephone use has been supplanted by new technologies.
By 2004 the number of long-distance calls made over wireless networks exceeded
those made over wireline networks. Wireless minutes of use exceeded 1 trillion in
2004.
More than 180 million Americans have wireless phones - approximately one in five of
whom use their mobile phones as their main communications device.
More than 70 percent of American households are connected to the Internet, and by
2010 an estimated 62 percent will use broadband access.
80 percent of American adults under age 50 use the Internet.
Instant messages, which already outnumber e-mails, are not only becoming the
principal means of communication for young people, but have evolved beyond text to
voice and video.
Nationwide wireless networks and Internet-based communications have changed
traditional distinctions between "local" and "long-distance" services.
Wednesday,
March 23, 2005
© 2005 Tony Gauvin,
UMFK
Compare to Industry
Wednesday,
March 23, 2005
© 2005 Tony Gauvin,
UMFK
A Global Market
Wednesday,
March 23, 2005
© 2005 Tony Gauvin,
UMFK
Key Facts
32.5 Million customers
In 49 of the top 50 US markets
Revenue is flat for 2000-2003
Income is flat for 2000-2003
Spent 12 billion in 2002 to build out fiber
plant (DSL)
Wednesday,
March 23, 2005
© 2005 Tony Gauvin,
UMFK
Wednesday,
March 23, 2005
© 2005 Tony Gauvin,
UMFK
Wednesday,
March 23, 2005
© 2005 Tony Gauvin,
UMFK
Goals and Objectives
Verizon had no published Mission and Vision, The following is from 2004
Annual report
Verizon is creating the future of communications by ushering in a new era in wireline
and wireless broadband connectivity. We are transforming our networks, products
and services to provide our customers with the best possible communications
experience at home, work or on the go … now and in the future.
Our strategic investments have created the nation’s most reliable wireless voice
network, delivered a portfolio of innovative mobile products and produced over 43
million loyal customers. We are also transforming our wireline networks to deliver
superior broadband services. Because of our commitment to innovation and
investment, our customers are better informed, better entertained and better
connected to the things that matter most to them.
By creating the future for our customers, we are also creating the future for
ourselves. We are transforming our revenue base around the growth markets of the
future and positioning ourselves to compete for an increasing share of the new
markets being created by broadband and wireless technologies.
Wednesday,
March 23, 2005
© 2005 Tony Gauvin,
UMFK
Proposed Vision
At Verizon, our vision is to be the market
leader in delivering innovative, integrated
communications solutions to customers at
home, at work and on the go.
Wednesday,
March 23, 2005
© 2005 Tony Gauvin,
UMFK
Proposed Mission
At Verizon, our mission is to be the market leader in delivering
innovative, integrated communications solutions to customers at
home, at work and on the go. The more people connected to a
network, the more valuable it is to users. That’s the idea that
underlies our business. It’s also the philosophy behind our
commitment to our communities. Our aim is to mobilize and
empower the millions of individuals and organizations —
employees, retirees, customers and nonprofits —that comprise the
Verizon community, putting the tools for progress into the hands of
people who can make a difference on the local level. We promote
employee volunteerism through matching gift programs that
recognize contributions of money and time. And we are helping
build a strong and lasting infrastructure for progress by making sure
people have the fundamental skills —like literacy and access to
technology —to succeed in the digital era.”
Wednesday,
March 23, 2005
© 2005 Tony Gauvin,
UMFK
External opportunities and threats
Opportunities
1.
2.
3.
4.
5.
141 million possible customers in Europe, UK, and Germany
Strengthening foreign currencies vs. dollar Euro advantages
Increased usage of wireless services
Small wireless providers are consolidating with larger providers due to
increased competition
Increased desire for highspeed internet service
Threats
1.
2.
3.
4.
5.
6.
7.
8.
9.
10.
Wednesday,
March 23, 2005
New regulatory complaints (new phone # portability)
Rising costs of healthcare
Global unrest economic monetary and financial
Consumer privacy rights under attack
Weak consumer spending
Decreasing demand for traditional voice lines and fixed lines
Increasing overlap of telecommunication territories
Increasing competition for providers of web search directories
Increasing providers of wireless services
Brand recognition
© 2005 Tony Gauvin,
UMFK
EFE
EFE Matrix
1.
2.
3.
4.
5.
Opportunities
Weight Rating Weighted Score
141 million possible customers in Europe, UK, and Germany
0.06
1
0.06
Strengthening foreign currencies vs. dollar Euro advantages
0.06
1
0.06
Increased usage of wireless services
0.02
4
0.08
Small wireless providers are consolidating with larger providers due
0.06
2
0.12
to increased competition
Increased desire for highspeed internet service
0.10
4
0.40
Threats
1. New regulatory complaints (new phone # portability)
2. Rising costs of healthcare
3. Global unrest economic monetary and financial
4. Consumer privacy rights under attack
5. Weak consumer spending
6. Decreasing demand for traditional voice lines and fixed lines
7. Increasing overlap of telecommunication territories
8. Increasing competition for providers of web search directories
9. Increasing providers of wireless services
10. Brand recognition
TOTALS
Wednesday,
March 23, 2005
Weight Rating Weighted Score
0.10
2
0.20
0.07
2
0.14
0.12
2
0.24
0.02
4
0.08
0.10
2
0.20
0.05
4
0.20
0.06
3
0.18
0.02
2
0.04
0.06
4
0.24
0.10
4
0.40
1.00
2.64
© 2005 Tony Gauvin,
UMFK
CPM
Competitive Profile Matrix
Verizon
Critical Success
Factors
Alltel
SBC
(Cingular)
Weight
Rating
Weighted
Score
Rating
Weighted
Score
Rating
Weighted
Score
Market Share
Price
Financial Position
Consumer Loyalty
Brand Awareness
0.10
0.25
0.20
0.30
0.15
4
3
2
2
4
0.40
0.75
0.40
0.40
0.60
2
4
3
3
3
0.20
1.00
0.60
0.90
0.45
3
2
4
3
3
0.30
0.50
0.80
0.90
0.45
Total
1.00
Wednesday,
March 23, 2005
2.55
3.15
© 2005 Tony Gauvin,
UMFK
2.95
Internal strengths and weaknesses
Strengths
1.
2.
3.
4.
5.
6.
Top wireless provider in the U.S. serving 49 of the top 50 markets
Highspeed data network in all major markets
Largest provider of local, long distance, data, and broadband services in 2/3 of
the top 100 markets in the U.S.
Leading print and online directory publisher with 2100 in U.S. and 13 other
countries
Verizon invested $12 billion in 2002 in 400,000 miles of fiberoptic cable.
Marketing campaign – brand awareness
Weaknesses
1.
2.
3.
Wednesday,
March 23, 2005
$49 billion in long term debt
Lack of international presence
Revenue only increased 4 percent since year end 2000.
© 2005 Tony Gauvin,
UMFK
IFE
IFE Matrix
1.
2.
3.
4.
5.
6.
Strengths
Weight Rating Weighted Score
Top wireless provider in the U.S. serving 49 of the top 50 markets
0.17
4
0.68
Highspeed data network in all major markets
0.13
3
0.39
Largest provider of local, long distance, data, and broadband services
0.10
4
0.40
in 2/3 of the top 100 markets in the U.S.
Leading print and online directory publisher with 2100 in U.S. and
0.10
3
0.30
13 other countries
Verizon invested $12 billion in 2002 in 400,000 miles of fiberoptic
0.15
4
0.60
cable.
Marketing campaign – brand awareness
0.10
4
0.40
Weaknesses
1. $49 billion in long term debt
2. Lack of international presence
3. Revenue only increased 4 percent since year end 2000.
TOTALS
Wednesday,
March 23, 2005
Weight Rating Weighted Score
0.10
1
0.10
0.05
2
0.10
0.10
1
0.10
1.00
© 2005 Tony Gauvin,
UMFK
3.07
Key Ratios
Verizon
Industry
Sector
S&P 500
Valuation Ratios
P/E Ratio (TTM)
P/E High - Last 5 Yrs
P/E Low - Last 5 Yrs
Beta
Price to Sales (TTM)
Price to Book (MRQ)
Price to Tangible Book (MRQ)
Price to Cash Flow (TTM)
Price to Free Cash Flow (TTM)
% Owned Institutions
28.99
NA
9.04
0.97
1.5
3.03
N/A
5.94
16
54.54
27.9
36.84
10.16
1.28
1.93
2.59
4.36
6.92
16.18
38.23
28.9
48.47
16.09
0.96
2.8
3.89
6.6
17.03
33.11
50.48
24.01
45.41
16.26
1
3.33
4.29
7.56
17.32
28.97
64.19
Wednesday,
March 23, 2005
© 2005 Tony Gauvin,
UMFK
Key Ratios
Dividends
Dividend Yield
Dividend Yield - 5 Yr Avg
Dividend 5 Yr Growth Rate
Payout Ratio (TTM)
Growth Rates %
Sales (MRQ) vs Qtr 1 Yr Ago
Sales (TTM) vs TTM 1 Yr Ago
Sales - 5 Yr Growth Rate
EPS (MRQ) vs Qtr 1 Yr Ago
EPS (TTM) vs TTM 1 Yr Ago
EPS - 5 Yr Growth Rate
Capital Spending - 5 Yr Growth
Rate
Wednesday,
March 23, 2005
Verizon
Industry
Sector
S&P 500
4.21
3.4
0
120.6
Verizon
4.2
2.34
-0.87
33.73
Industry
2.14
1.43
-0.89
15.54
Sector
2.04
1.48
6.48
26.78
S&P 500
0.72
0.67
3.49
N/A
-25.06
-7.98
2.36
3.55
12.49
-17.21
-4.84
-1.81
14.39
15.92
17.25
15.43
16.37
15.23
13.4
11.9
9.3
28.69
21.92
12.15
-1.5
-2.37
2.61
4.06
© 2005 Tony Gauvin,
UMFK
Key ratios
Financial Strength
Quick Ratio (MRQ)
Current Ratio (MRQ)
LT Debt to Equity (MRQ)
Total Debt to Equity (MRQ)
Interest Coverage (TTM)
Profitability Ratios %
Gross Margin (TTM)
Gross Margin - 5 Yr Avg
EBITD Margin (TTM)
EBITD - 5 Yr Avg
Operating Margin (TTM)
Operating Margin - 5 Yr Avg
Pre-Tax Margin (TTM)
Pre-Tax Margin - 5 Yr Avg
Net Profit Margin (TTM)
Net Profit Margin - 5 Yr Avg
Effective Tax Rate (TTM)
Effective Tax Rate - 5 Yr Avg
Wednesday,
March 23, 2005
Verizon
Industry
Sector
S&P 500
0.48
0.69
1.18
1.36
2.68
Verizon
1.01
1.22
0.84
0.95
3.18
Industry
0.93
1.47
0.74
0.82
7.84
Sector
1.26
1.76
0.68
0.85
11.86
S&P 500
67.85
57.39
31.16
39.98
11.06
20.77
7.03
14.12
5.18
8.79
26.3
41.35
60.97
54.17
31.75
30.7
12.99
13.72
10.68
10.56
7.03
5.18
29.08
35.99
42.84
42.06
22.32
21.97
12.9
11.21
10.37
11.77
7.54
7.62
32.18
36.04
47.32
47.01
20.79
20.82
20.33
18.35
17.27
17.54
13.12
11.59
31.31
34.2
© 2005 Tony Gauvin,
UMFK
Key Ratios
Verizon
Industry
Sector
S&P 500
Management Effectiveness %
Return on Assets (TTM)
Return on Assets - 5 Yr Avg
Return on Investment (TTM)
2.09
4.17
2.51
3.21
2.87
3.84
5.91
5.49
7.98
6.4
6.79
9.97
Return on Investment - 5 Yr Avg
Return on Equity (TTM)
Return on Equity - 5 Yr Avg
5.37
10.25
19.36
3.7
13.28
9.79
7.59
13.51
13.18
10.93
18.71
19.22
333,589
17,277
6.28
15.92
0.4
405,314
102,467
7.39
21.63
0.47
479,338
90,606
17.23
17.53
1.17
622,866
81,707
9.76
10.46
0.92
Efficiency
Revenue/Employee (TTM)
Net Income/Employee (TTM)
Receivable Turnover (TTM)
Inventory Turnover (TTM)
Asset Turnover (TTM)
www.investor.stockpoint.com
Wednesday,
March 23, 2005
© 2005 Tony Gauvin,
UMFK
SWOT Matrix
1.Top wireless provider in the U.S. serving 49 of the top 50 markets
2.High-speed data network in all major markets
3.Largest provider of local, long distance, data, and broadband services
1.49 billion dollars in long term debt
2.Lack of international presence
S-O Strategies
W-O Strategies
1.Expand
wireless services into Europe, UK and/or Germany (S1, O1,
O3)
2.Expand high speed internet service in Europe, UK and/or Germany
(S2,O5)
3.Acquire small domestic wireless providers such as Powertel or Aerial
(S1, O4)
4.Invest capital into fiber optic cable to compete with cable companies.
(S5, O5)
1.Purchase
S-T Strategies
W-T Strategies
1.Enter into a joint venture with MCI to offer a package deal (S1, T12)
2.Proceed with legal battles to serve local markets to increase traditional
1.Expand globally in Europe (W2, T7)
2.Liquidate the Telecommunications
voice and fixed lines.(S3, T7)
Services such as fixed lines and
traditional lines business to reduce
long-term debt. (W1, T6)
in 2/3 of the top 100 markets in the U.S.
4.Leading print and on-line directory publisher with 2100 in U.S. and 13
other countries
5.Verizon invested 12 billion in 2002 in 400,000 miles of fiber-optic
cable.
6.Marketing campaign – brand awareness
1.141
million possible investors in Europe, UK, and
Germany
2.Strengthening foreign currencies vs dollar- Euro
advantages
3.Increased usage in wireless services
4.Small wireless providers are consolidating with
larger providers due to increased competition
5.Increased
desire for high-speed internet service
1.New
regulatory complaints (new phone #
portability)
2.Rising costs of healthcare
3.Global unrest- economic monetary and financial
4.Consumer privacy rights being attacked
5.Weak Consumer spending
6.Decreasing demand for traditional voice lines and
fixed lines
7.Increasing overlap of telecommunication territories
8.Increasing competition for providers of web search
directories
9.Increasing providers of wireless services
10.Brand recognition
Wednesday,
March 23, 2005
© 2005 Tony Gauvin,
UMFK
3.Revenue
only increased 4 percent since
year end 2000.
international wireless
providers such as MMO2 (W2, O4)
2.Offer services to people in Europe to
increase revenue due to the difference
in foreign currency (W1, O2)
Space Matrix
SPACE Matrix
Y axis
Financial strength
Environmental stability
X axis Industry strength
Competitive advantage
+4
-2
5
-1
+1 worst to + 6 best
-1 best to -6 worst
+6 best to +1 worst
-6 worst to –1 best
Conservative
Aggressive
(2, 4)
Defensive
Wednesday,
March 23, 2005
Competitive
© 2005 Tony Gauvin,
UMFK
Y axis: 4 + (-2) = 2
X axis: 5 + (-1) = 4
BCG
High +20
Relative Market Share Position
High Medium Low
1.0 .50 0.0
Star
Question Mark
Wireless
30%
70%
Industry
Sales
Medium 0
Growth
Rate
(Percentage)
Cash Cow
Dog
Telecom
30%
70%
Low
Wednesday,
March 23, 2005
-20
© 2005 Tony Gauvin,
UMFK
IE Matrix
The Total IFE Weighted Scores
Strong
4.0 to 3.0
4.0
I
Average
2.99 to 2.0
II
3.0
IV
V
Weak
1.99 to 1.0
III
VI
High
The
EFE
Total
Medium
Weighted
Scores
30%
30%
70%
Wireless
70%
Verizon
Telecom
2.0
Wednesday,
Low
March 23, 2005
1.0
VII
VIII
© 2005 Tony Gauvin,
UMFK
IX
GSM
Wednesday,
March 23, 2005
© 2005 Tony Gauvin,
UMFK
Matrix Analysis and SWOT Summary
Alternative Strategies
IE
SPACE
GRAND
COUNT
Forward Integration
X
X
X
3
Backward Integration
X
X
X
3
Horizontal Integration
X
X
X
3
Market Penetration
X
X
X
3
Market Development
X
X
X
3
Product Development
X
X
X
3
Concentric Diversification
X
Conglomerate Diversification
X
Horizontal Diversification
X
1
X
2
1
Joint Venture
0
Retrenchment
0
Divestiture
0
Liquidation
0
Wednesday,
March 23, 2005
© 2005 Tony Gauvin,
UMFK
Possible Strategies
Grow Fiber plant to increase domestic sales
opportunities (again)
Move into European markets
Wireless
High Speed Internet
Acquire smaller wireless providers to grow US
markets
Joint venture with large provider for Wireless
Wednesday,
March 23, 2005
© 2005 Tony Gauvin,
UMFK
QSPM
Enter into a
joint venture
Invest capital
with MCI to
in fiber optic
offer a bundled
cable
wireless
package
AS
2
0
4
TAS
0.12
0.00
0.08
AS
4
0
2
TAS
0.24
0.00
0.04
0
0.00
0
0.00
5.
Opportunities
Weight
141 million possible customers in Europe, UK, and Germany
0.06
Strengthening foreign currencies vs. dollar Euro advantages
0.06
Increased usage of wireless services
0.02
Small wireless providers are consolidating with larger providers due
0.06
to increased competition
Increased desire for highspeed internet service
0.10
0
0.00
0
0.00
1.
2.
3.
4.
5.
6.
7.
8.
9.
10.
Threats
New regulatory complaints (new phone # portability)
Rising costs of healthcare
Global unrest economic monetary and financial
Consumer privacy rights under attack
Weak consumer spending
Decreasing demand for traditional voice lines and fixed lines
Increasing overlap of telecommunication territories
Increasing competition for providers of web search directories
Increasing providers of wireless services
Brand recognition
AS
0
0
0
3
0
0
0
2
0
0
TAS
0.00
0.00
0.00
0.06
0.00
0.00
0.00
0.04
0.00
0.00
AS
0
0
0
2
0
0
0
3
0
0
TAS
0.00
0.00
0.00
0.04
0.00
0.00
0.00
0.06
0.00
0.00
1.
2.
3.
4.
Wednesday,
March 23, 2005
Weight
0.10
0.07
0.12
0.02
0.10
0.05
0.06
0.02
0.06
0.10
© 2005 Tony Gauvin,
UMFK
QSPM
Invest capital in
fiber optic cable
1.
2.
3.
4.
5.
6.
Strengths
Top wireless provider in the U.S. serving 49 of the top 50 markets
High-speed data network in all major markets
Largest provider of local, long distance, data, and broadband services
in 2/3 of the top 100 markets in the U.S.
Leading print and on-line directory publisher with 2100 in U.S. and
13 other countries
Verizon invested $12 billion in 2002 in 400,000 miles of fiber-optic
cable.
Marketing campaign – brand awareness
Weaknesses
1. $49 billion in long term debt
2. Lack of international presence
3. Revenue only increased 4 percent since year end 2000.
Weight
0.17
0.13
AS
2
2
TAS
0.34
0.26
AS
3
4
TAS
0.51
0.52
0.10
2
0.20
3
0.30
0.10
4
0.40
2
0.20
0.15
4
0.60
2
0.30
0.10
2
0.20
3
0.30
Weight
0.10
0.05
0.10
AS
4
3
1
TAS
0.40
0.15
0.10
AS
3
4
2
TAS
0.30
0.20
0.20
TOTALS
Wednesday,
March 23, 2005
Enter into a joint
venture with MCI
to offer a bundled
wireless package
2.95
© 2005 Tony Gauvin,
UMFK
3.21
Decisions
Primary
Grow US wireless market by performing Joint
Bundling wireless effort with MCI
Alternatives
Buy smaller wireless providers
Move in Foreign Markets
Increase Optical Fiber capacity
Wednesday,
March 23, 2005
© 2005 Tony Gauvin,
UMFK
Show me the Money!
EPS/EBIT Analysis
Amount Needed
Interest
Tax Rate
Share Price
Shares Outstanding
1,000M
5%
35%
$25
2,765M
Wednesday,
March 23, 2005
Common Stock Financing
Recession
Normal
Boom
EBIT
5,000,000,000 10,000,000,000 15,000,000,000
Interest
0
0
0
EBT
5,000,000,000 10,000,000,000 15,000,000,000
Taxes
1,750,000,000 3,500,000,000 5,250,000,000
EAT
3,250,000,000 6,500,000,000 9,750,000,000
# Shares 2,805,000,000 2,805,000,000 2,805,000,000
EPS
1.16
2.32
3.48
Debt Financing
Recession
Normal
Boom
5,000,000,000 10,000,000,000 15,000,000,000
50,000,000
50,000,000
50,000,000
4,950,000,000 9,950,000,000 14,950,000,000
1,732,500,000 3,482,500,000 5,232,500,000
3,217,500,000 6,467,500,000 9,717,500,000
2,765,000,000 2,765,000,000 2,765,000,000
1.16
2.34
3.51
70 Percent Stock 30 Percent Debt
Recession
Normal
Boom
EBIT
5,000,000,000 10,000,000,000 15,000,000,000
Interest 15,000,000
15,000,000
15,000,000
EBT
4,985,000,000 9,985,000,000 14,985,000,000
Taxes
1,744,750,000 3,494,750,000 5,244,750,000
EAT
3,240,250,000 6,490,250,000 9,740,250,000
# Shares 2,793,000,000 2,793,000,000 2,793,000,000
EPS
1.16
2.32
3.49
70 Percent Debt 30 Percent Stock
Recession
Normal
Boom
5,000,000,000 10,000,000,000 15,000,000,000
35,000,000
35,000,000
35,000,000
4,965,000,000 9,965,000,000 14,965,000,000
1,737,750,000 3,487,750,000 5,237,750,000
3,227,250,000 6,477,250,000 9,727,250,000
2,777,000,000 2,777,000,000 2,777,000,000
1.16
2.33
3.50
© 2005 Tony Gauvin,
UMFK
Implementation
Objectives
Increase income by 40% in next 3 years
Increase revenue by 25% in next three years
Decrease cost by increasing efficiencies to match
income goals
Decrease long–term debt
Use increased income to pay down debt
Match sector avg’s within 3 years
Wednesday,
March 23, 2005
© 2005 Tony Gauvin,
UMFK
Goals & Policies
Telecom division
5% reduction in expenses per annum
Wireless
15% increase in sales per annum
Wednesday,
March 23, 2005
© 2005 Tony Gauvin,
UMFK
Evaluations
Qtr & Yearly financial reports
Balanced Scorecard
Yearly strategic meeting of division
management and corporate management
Wednesday,
March 23, 2005
© 2005 Tony Gauvin,
UMFK
2004 Financial Statistics
Operating Revenues
Net Income
EPS (diluted basis)
Capital Expenditures
Total Debt
Cash Flow from Operating Activities
Weighted Average Shares Outstanding
Shareowners
Wednesday,
March 23, 2005
© 2005 Tony Gauvin,
UMFK
$71.3 billion
$7.0 billion
$2.51
$13.3 billion
$39.3 billion
$21.8 billion
$2.77 billion
2.7 million
2004 Financial Statistics
Operating Revenues
Net Income
EPS (diluted basis)
Capital Expenditures
Total Debt
Cash Flow from Operating Activities
Weighted Average Shares Outstanding
Shareowners
Wednesday,
March 23, 2005
© 2005 Tony Gauvin,
UMFK
$75.1 billion
$7.4 billion
$2.65
$13.3 billion
$39 billion
$22 billion
$2.9 billion
2.7 million
Press Releases
January 8, 2004
June 27, 2004
Verizon Deploying Fiber Optics to Homes and Businesses in 6 More States in
Northeast and Mid-Atlantic
March 13, 2005
Verizon Communications Reports 6% Second-Quarter Revenue Growth, Led
by Wireless Revenue Growth of 25%
October 21, 2004
Verizon Wireless Announces Roll Out of National 3G Network
Verizon-MCI Transaction Creates New Competitor in Large-Business,
Government Markets, Seidenberg Says
January 26, 2006
Verizon Communications Reports Strong 4Q 2005 Results, Driven by
Continued Growth in Wireless and Broadband
Wednesday,
March 23, 2005
© 2005 Tony Gauvin,
UMFK
Tony Gauvin
All images from www22.verizon.com
©2005 Tony Gauvin, UMFK
Overview
Existing Condition
New Vision and Mission
External opportunities and threats
SWOT Matrix
SPACE
BCG
IE matrix
Grand Strategy Matrix
QSPM
Possible strategies
Recommendations
IFE
Analysis
CPM
EFE
Internal strengths and weaknesses
Industry overview
Strategic implementation and desired results
Annual objectives (goal) and polices
Evaluation Procedure
Wednesday,
March 23, 2005
© 2005 Tony Gauvin,
UMFK
Verizon Overview
Verizon Communications Inc. is a provider of communications services with four
operating segments:
Domestic Telecom
Domestic Wireless
Domestic Wireless products and services include wireless voice and data services
and equipment sales across the United States.
Information Services
Domestic Telecom services principally represent Verizon's telephone operations that
provide local telephone services in 29 states and the District of Columbia
The Information Services segment encompasses Verizon’s domestic and international
publishing businesses, including print SuperPages and electronic SuperPages.com
directories, as well as Website creation and other electronic commerce services. This
segment has operations principally in North America and Latin America
International
The International segment has wireline and wireless communications operations and
investments primarily in the Americas, as well as investments in Europe.
Wednesday,
March 23, 2005
© 2005 Tony Gauvin,
UMFK
History
Formed on June 30, 2000, with the merger
of Bell Atlantic Corp. and GTE Corp.
GTE
Bell Atlantic
7.1 million wireless customers
35 million land lines in US, Canada and Caribbean
43 million mobile customers
World’s largest directory information service
Trades as VZ on NTSE
Wednesday,
March 23, 2005
© 2005 Tony Gauvin,
UMFK
Stock Price Performance
Wednesday,
March 23, 2005
© 2005 Tony Gauvin,
UMFK
Industry overveiw (2005)
More than 40 percent of long-distance telephone use and more than a third of local
telephone use has been supplanted by new technologies.
By 2004 the number of long-distance calls made over wireless networks exceeded
those made over wireline networks. Wireless minutes of use exceeded 1 trillion in
2004.
More than 180 million Americans have wireless phones - approximately one in five of
whom use their mobile phones as their main communications device.
More than 70 percent of American households are connected to the Internet, and by
2010 an estimated 62 percent will use broadband access.
80 percent of American adults under age 50 use the Internet.
Instant messages, which already outnumber e-mails, are not only becoming the
principal means of communication for young people, but have evolved beyond text to
voice and video.
Nationwide wireless networks and Internet-based communications have changed
traditional distinctions between "local" and "long-distance" services.
Wednesday,
March 23, 2005
© 2005 Tony Gauvin,
UMFK
Compare to Industry
Wednesday,
March 23, 2005
© 2005 Tony Gauvin,
UMFK
A Global Market
Wednesday,
March 23, 2005
© 2005 Tony Gauvin,
UMFK
Key Facts
32.5 Million customers
In 49 of the top 50 US markets
Revenue is flat for 2000-2003
Income is flat for 2000-2003
Spent 12 billion in 2002 to build out fiber
plant (DSL)
Wednesday,
March 23, 2005
© 2005 Tony Gauvin,
UMFK
Wednesday,
March 23, 2005
© 2005 Tony Gauvin,
UMFK
Wednesday,
March 23, 2005
© 2005 Tony Gauvin,
UMFK
Goals and Objectives
Verizon had no published Mission and Vision, The following is from 2004
Annual report
Verizon is creating the future of communications by ushering in a new era in wireline
and wireless broadband connectivity. We are transforming our networks, products
and services to provide our customers with the best possible communications
experience at home, work or on the go … now and in the future.
Our strategic investments have created the nation’s most reliable wireless voice
network, delivered a portfolio of innovative mobile products and produced over 43
million loyal customers. We are also transforming our wireline networks to deliver
superior broadband services. Because of our commitment to innovation and
investment, our customers are better informed, better entertained and better
connected to the things that matter most to them.
By creating the future for our customers, we are also creating the future for
ourselves. We are transforming our revenue base around the growth markets of the
future and positioning ourselves to compete for an increasing share of the new
markets being created by broadband and wireless technologies.
Wednesday,
March 23, 2005
© 2005 Tony Gauvin,
UMFK
Proposed Vision
At Verizon, our vision is to be the market
leader in delivering innovative, integrated
communications solutions to customers at
home, at work and on the go.
Wednesday,
March 23, 2005
© 2005 Tony Gauvin,
UMFK
Proposed Mission
At Verizon, our mission is to be the market leader in delivering
innovative, integrated communications solutions to customers at
home, at work and on the go. The more people connected to a
network, the more valuable it is to users. That’s the idea that
underlies our business. It’s also the philosophy behind our
commitment to our communities. Our aim is to mobilize and
empower the millions of individuals and organizations —
employees, retirees, customers and nonprofits —that comprise the
Verizon community, putting the tools for progress into the hands of
people who can make a difference on the local level. We promote
employee volunteerism through matching gift programs that
recognize contributions of money and time. And we are helping
build a strong and lasting infrastructure for progress by making sure
people have the fundamental skills —like literacy and access to
technology —to succeed in the digital era.”
Wednesday,
March 23, 2005
© 2005 Tony Gauvin,
UMFK
External opportunities and threats
Opportunities
1.
2.
3.
4.
5.
141 million possible customers in Europe, UK, and Germany
Strengthening foreign currencies vs. dollar Euro advantages
Increased usage of wireless services
Small wireless providers are consolidating with larger providers due to
increased competition
Increased desire for highspeed internet service
Threats
1.
2.
3.
4.
5.
6.
7.
8.
9.
10.
Wednesday,
March 23, 2005
New regulatory complaints (new phone # portability)
Rising costs of healthcare
Global unrest economic monetary and financial
Consumer privacy rights under attack
Weak consumer spending
Decreasing demand for traditional voice lines and fixed lines
Increasing overlap of telecommunication territories
Increasing competition for providers of web search directories
Increasing providers of wireless services
Brand recognition
© 2005 Tony Gauvin,
UMFK
EFE
EFE Matrix
1.
2.
3.
4.
5.
Opportunities
Weight Rating Weighted Score
141 million possible customers in Europe, UK, and Germany
0.06
1
0.06
Strengthening foreign currencies vs. dollar Euro advantages
0.06
1
0.06
Increased usage of wireless services
0.02
4
0.08
Small wireless providers are consolidating with larger providers due
0.06
2
0.12
to increased competition
Increased desire for highspeed internet service
0.10
4
0.40
Threats
1. New regulatory complaints (new phone # portability)
2. Rising costs of healthcare
3. Global unrest economic monetary and financial
4. Consumer privacy rights under attack
5. Weak consumer spending
6. Decreasing demand for traditional voice lines and fixed lines
7. Increasing overlap of telecommunication territories
8. Increasing competition for providers of web search directories
9. Increasing providers of wireless services
10. Brand recognition
TOTALS
Wednesday,
March 23, 2005
Weight Rating Weighted Score
0.10
2
0.20
0.07
2
0.14
0.12
2
0.24
0.02
4
0.08
0.10
2
0.20
0.05
4
0.20
0.06
3
0.18
0.02
2
0.04
0.06
4
0.24
0.10
4
0.40
1.00
2.64
© 2005 Tony Gauvin,
UMFK
CPM
Competitive Profile Matrix
Verizon
Critical Success
Factors
Alltel
SBC
(Cingular)
Weight
Rating
Weighted
Score
Rating
Weighted
Score
Rating
Weighted
Score
Market Share
Price
Financial Position
Consumer Loyalty
Brand Awareness
0.10
0.25
0.20
0.30
0.15
4
3
2
2
4
0.40
0.75
0.40
0.40
0.60
2
4
3
3
3
0.20
1.00
0.60
0.90
0.45
3
2
4
3
3
0.30
0.50
0.80
0.90
0.45
Total
1.00
Wednesday,
March 23, 2005
2.55
3.15
© 2005 Tony Gauvin,
UMFK
2.95
Internal strengths and weaknesses
Strengths
1.
2.
3.
4.
5.
6.
Top wireless provider in the U.S. serving 49 of the top 50 markets
Highspeed data network in all major markets
Largest provider of local, long distance, data, and broadband services in 2/3 of
the top 100 markets in the U.S.
Leading print and online directory publisher with 2100 in U.S. and 13 other
countries
Verizon invested $12 billion in 2002 in 400,000 miles of fiberoptic cable.
Marketing campaign – brand awareness
Weaknesses
1.
2.
3.
Wednesday,
March 23, 2005
$49 billion in long term debt
Lack of international presence
Revenue only increased 4 percent since year end 2000.
© 2005 Tony Gauvin,
UMFK
IFE
IFE Matrix
1.
2.
3.
4.
5.
6.
Strengths
Weight Rating Weighted Score
Top wireless provider in the U.S. serving 49 of the top 50 markets
0.17
4
0.68
Highspeed data network in all major markets
0.13
3
0.39
Largest provider of local, long distance, data, and broadband services
0.10
4
0.40
in 2/3 of the top 100 markets in the U.S.
Leading print and online directory publisher with 2100 in U.S. and
0.10
3
0.30
13 other countries
Verizon invested $12 billion in 2002 in 400,000 miles of fiberoptic
0.15
4
0.60
cable.
Marketing campaign – brand awareness
0.10
4
0.40
Weaknesses
1. $49 billion in long term debt
2. Lack of international presence
3. Revenue only increased 4 percent since year end 2000.
TOTALS
Wednesday,
March 23, 2005
Weight Rating Weighted Score
0.10
1
0.10
0.05
2
0.10
0.10
1
0.10
1.00
© 2005 Tony Gauvin,
UMFK
3.07
Key Ratios
Verizon
Industry
Sector
S&P 500
Valuation Ratios
P/E Ratio (TTM)
P/E High - Last 5 Yrs
P/E Low - Last 5 Yrs
Beta
Price to Sales (TTM)
Price to Book (MRQ)
Price to Tangible Book (MRQ)
Price to Cash Flow (TTM)
Price to Free Cash Flow (TTM)
% Owned Institutions
28.99
NA
9.04
0.97
1.5
3.03
N/A
5.94
16
54.54
27.9
36.84
10.16
1.28
1.93
2.59
4.36
6.92
16.18
38.23
28.9
48.47
16.09
0.96
2.8
3.89
6.6
17.03
33.11
50.48
24.01
45.41
16.26
1
3.33
4.29
7.56
17.32
28.97
64.19
Wednesday,
March 23, 2005
© 2005 Tony Gauvin,
UMFK
Key Ratios
Dividends
Dividend Yield
Dividend Yield - 5 Yr Avg
Dividend 5 Yr Growth Rate
Payout Ratio (TTM)
Growth Rates %
Sales (MRQ) vs Qtr 1 Yr Ago
Sales (TTM) vs TTM 1 Yr Ago
Sales - 5 Yr Growth Rate
EPS (MRQ) vs Qtr 1 Yr Ago
EPS (TTM) vs TTM 1 Yr Ago
EPS - 5 Yr Growth Rate
Capital Spending - 5 Yr Growth
Rate
Wednesday,
March 23, 2005
Verizon
Industry
Sector
S&P 500
4.21
3.4
0
120.6
Verizon
4.2
2.34
-0.87
33.73
Industry
2.14
1.43
-0.89
15.54
Sector
2.04
1.48
6.48
26.78
S&P 500
0.72
0.67
3.49
N/A
-25.06
-7.98
2.36
3.55
12.49
-17.21
-4.84
-1.81
14.39
15.92
17.25
15.43
16.37
15.23
13.4
11.9
9.3
28.69
21.92
12.15
-1.5
-2.37
2.61
4.06
© 2005 Tony Gauvin,
UMFK
Key ratios
Financial Strength
Quick Ratio (MRQ)
Current Ratio (MRQ)
LT Debt to Equity (MRQ)
Total Debt to Equity (MRQ)
Interest Coverage (TTM)
Profitability Ratios %
Gross Margin (TTM)
Gross Margin - 5 Yr Avg
EBITD Margin (TTM)
EBITD - 5 Yr Avg
Operating Margin (TTM)
Operating Margin - 5 Yr Avg
Pre-Tax Margin (TTM)
Pre-Tax Margin - 5 Yr Avg
Net Profit Margin (TTM)
Net Profit Margin - 5 Yr Avg
Effective Tax Rate (TTM)
Effective Tax Rate - 5 Yr Avg
Wednesday,
March 23, 2005
Verizon
Industry
Sector
S&P 500
0.48
0.69
1.18
1.36
2.68
Verizon
1.01
1.22
0.84
0.95
3.18
Industry
0.93
1.47
0.74
0.82
7.84
Sector
1.26
1.76
0.68
0.85
11.86
S&P 500
67.85
57.39
31.16
39.98
11.06
20.77
7.03
14.12
5.18
8.79
26.3
41.35
60.97
54.17
31.75
30.7
12.99
13.72
10.68
10.56
7.03
5.18
29.08
35.99
42.84
42.06
22.32
21.97
12.9
11.21
10.37
11.77
7.54
7.62
32.18
36.04
47.32
47.01
20.79
20.82
20.33
18.35
17.27
17.54
13.12
11.59
31.31
34.2
© 2005 Tony Gauvin,
UMFK
Key Ratios
Verizon
Industry
Sector
S&P 500
Management Effectiveness %
Return on Assets (TTM)
Return on Assets - 5 Yr Avg
Return on Investment (TTM)
2.09
4.17
2.51
3.21
2.87
3.84
5.91
5.49
7.98
6.4
6.79
9.97
Return on Investment - 5 Yr Avg
Return on Equity (TTM)
Return on Equity - 5 Yr Avg
5.37
10.25
19.36
3.7
13.28
9.79
7.59
13.51
13.18
10.93
18.71
19.22
333,589
17,277
6.28
15.92
0.4
405,314
102,467
7.39
21.63
0.47
479,338
90,606
17.23
17.53
1.17
622,866
81,707
9.76
10.46
0.92
Efficiency
Revenue/Employee (TTM)
Net Income/Employee (TTM)
Receivable Turnover (TTM)
Inventory Turnover (TTM)
Asset Turnover (TTM)
www.investor.stockpoint.com
Wednesday,
March 23, 2005
© 2005 Tony Gauvin,
UMFK
SWOT Matrix
1.Top wireless provider in the U.S. serving 49 of the top 50 markets
2.High-speed data network in all major markets
3.Largest provider of local, long distance, data, and broadband services
1.49 billion dollars in long term debt
2.Lack of international presence
S-O Strategies
W-O Strategies
1.Expand
wireless services into Europe, UK and/or Germany (S1, O1,
O3)
2.Expand high speed internet service in Europe, UK and/or Germany
(S2,O5)
3.Acquire small domestic wireless providers such as Powertel or Aerial
(S1, O4)
4.Invest capital into fiber optic cable to compete with cable companies.
(S5, O5)
1.Purchase
S-T Strategies
W-T Strategies
1.Enter into a joint venture with MCI to offer a package deal (S1, T12)
2.Proceed with legal battles to serve local markets to increase traditional
1.Expand globally in Europe (W2, T7)
2.Liquidate the Telecommunications
voice and fixed lines.(S3, T7)
Services such as fixed lines and
traditional lines business to reduce
long-term debt. (W1, T6)
in 2/3 of the top 100 markets in the U.S.
4.Leading print and on-line directory publisher with 2100 in U.S. and 13
other countries
5.Verizon invested 12 billion in 2002 in 400,000 miles of fiber-optic
cable.
6.Marketing campaign – brand awareness
1.141
million possible investors in Europe, UK, and
Germany
2.Strengthening foreign currencies vs dollar- Euro
advantages
3.Increased usage in wireless services
4.Small wireless providers are consolidating with
larger providers due to increased competition
5.Increased
desire for high-speed internet service
1.New
regulatory complaints (new phone #
portability)
2.Rising costs of healthcare
3.Global unrest- economic monetary and financial
4.Consumer privacy rights being attacked
5.Weak Consumer spending
6.Decreasing demand for traditional voice lines and
fixed lines
7.Increasing overlap of telecommunication territories
8.Increasing competition for providers of web search
directories
9.Increasing providers of wireless services
10.Brand recognition
Wednesday,
March 23, 2005
© 2005 Tony Gauvin,
UMFK
3.Revenue
only increased 4 percent since
year end 2000.
international wireless
providers such as MMO2 (W2, O4)
2.Offer services to people in Europe to
increase revenue due to the difference
in foreign currency (W1, O2)
Space Matrix
SPACE Matrix
Y axis
Financial strength
Environmental stability
X axis Industry strength
Competitive advantage
+4
-2
5
-1
+1 worst to + 6 best
-1 best to -6 worst
+6 best to +1 worst
-6 worst to –1 best
Conservative
Aggressive
(2, 4)
Defensive
Wednesday,
March 23, 2005
Competitive
© 2005 Tony Gauvin,
UMFK
Y axis: 4 + (-2) = 2
X axis: 5 + (-1) = 4
BCG
High +20
Relative Market Share Position
High Medium Low
1.0 .50 0.0
Star
Question Mark
Wireless
30%
70%
Industry
Sales
Medium 0
Growth
Rate
(Percentage)
Cash Cow
Dog
Telecom
30%
70%
Low
Wednesday,
March 23, 2005
-20
© 2005 Tony Gauvin,
UMFK
IE Matrix
The Total IFE Weighted Scores
Strong
4.0 to 3.0
4.0
I
Average
2.99 to 2.0
II
3.0
IV
V
Weak
1.99 to 1.0
III
VI
High
The
EFE
Total
Medium
Weighted
Scores
30%
30%
70%
Wireless
70%
Verizon
Telecom
2.0
Wednesday,
Low
March 23, 2005
1.0
VII
VIII
© 2005 Tony Gauvin,
UMFK
IX
GSM
Wednesday,
March 23, 2005
© 2005 Tony Gauvin,
UMFK
Matrix Analysis and SWOT Summary
Alternative Strategies
IE
SPACE
GRAND
COUNT
Forward Integration
X
X
X
3
Backward Integration
X
X
X
3
Horizontal Integration
X
X
X
3
Market Penetration
X
X
X
3
Market Development
X
X
X
3
Product Development
X
X
X
3
Concentric Diversification
X
Conglomerate Diversification
X
Horizontal Diversification
X
1
X
2
1
Joint Venture
0
Retrenchment
0
Divestiture
0
Liquidation
0
Wednesday,
March 23, 2005
© 2005 Tony Gauvin,
UMFK
Possible Strategies
Grow Fiber plant to increase domestic sales
opportunities (again)
Move into European markets
Wireless
High Speed Internet
Acquire smaller wireless providers to grow US
markets
Joint venture with large provider for Wireless
Wednesday,
March 23, 2005
© 2005 Tony Gauvin,
UMFK
QSPM
Enter into a
joint venture
Invest capital
with MCI to
in fiber optic
offer a bundled
cable
wireless
package
AS
2
0
4
TAS
0.12
0.00
0.08
AS
4
0
2
TAS
0.24
0.00
0.04
0
0.00
0
0.00
5.
Opportunities
Weight
141 million possible customers in Europe, UK, and Germany
0.06
Strengthening foreign currencies vs. dollar Euro advantages
0.06
Increased usage of wireless services
0.02
Small wireless providers are consolidating with larger providers due
0.06
to increased competition
Increased desire for highspeed internet service
0.10
0
0.00
0
0.00
1.
2.
3.
4.
5.
6.
7.
8.
9.
10.
Threats
New regulatory complaints (new phone # portability)
Rising costs of healthcare
Global unrest economic monetary and financial
Consumer privacy rights under attack
Weak consumer spending
Decreasing demand for traditional voice lines and fixed lines
Increasing overlap of telecommunication territories
Increasing competition for providers of web search directories
Increasing providers of wireless services
Brand recognition
AS
0
0
0
3
0
0
0
2
0
0
TAS
0.00
0.00
0.00
0.06
0.00
0.00
0.00
0.04
0.00
0.00
AS
0
0
0
2
0
0
0
3
0
0
TAS
0.00
0.00
0.00
0.04
0.00
0.00
0.00
0.06
0.00
0.00
1.
2.
3.
4.
Wednesday,
March 23, 2005
Weight
0.10
0.07
0.12
0.02
0.10
0.05
0.06
0.02
0.06
0.10
© 2005 Tony Gauvin,
UMFK
QSPM
Invest capital in
fiber optic cable
1.
2.
3.
4.
5.
6.
Strengths
Top wireless provider in the U.S. serving 49 of the top 50 markets
High-speed data network in all major markets
Largest provider of local, long distance, data, and broadband services
in 2/3 of the top 100 markets in the U.S.
Leading print and on-line directory publisher with 2100 in U.S. and
13 other countries
Verizon invested $12 billion in 2002 in 400,000 miles of fiber-optic
cable.
Marketing campaign – brand awareness
Weaknesses
1. $49 billion in long term debt
2. Lack of international presence
3. Revenue only increased 4 percent since year end 2000.
Weight
0.17
0.13
AS
2
2
TAS
0.34
0.26
AS
3
4
TAS
0.51
0.52
0.10
2
0.20
3
0.30
0.10
4
0.40
2
0.20
0.15
4
0.60
2
0.30
0.10
2
0.20
3
0.30
Weight
0.10
0.05
0.10
AS
4
3
1
TAS
0.40
0.15
0.10
AS
3
4
2
TAS
0.30
0.20
0.20
TOTALS
Wednesday,
March 23, 2005
Enter into a joint
venture with MCI
to offer a bundled
wireless package
2.95
© 2005 Tony Gauvin,
UMFK
3.21
Decisions
Primary
Grow US wireless market by performing Joint
Bundling wireless effort with MCI
Alternatives
Buy smaller wireless providers
Move in Foreign Markets
Increase Optical Fiber capacity
Wednesday,
March 23, 2005
© 2005 Tony Gauvin,
UMFK
Show me the Money!
EPS/EBIT Analysis
Amount Needed
Interest
Tax Rate
Share Price
Shares Outstanding
1,000M
5%
35%
$25
2,765M
Wednesday,
March 23, 2005
Common Stock Financing
Recession
Normal
Boom
EBIT
5,000,000,000 10,000,000,000 15,000,000,000
Interest
0
0
0
EBT
5,000,000,000 10,000,000,000 15,000,000,000
Taxes
1,750,000,000 3,500,000,000 5,250,000,000
EAT
3,250,000,000 6,500,000,000 9,750,000,000
# Shares 2,805,000,000 2,805,000,000 2,805,000,000
EPS
1.16
2.32
3.48
Debt Financing
Recession
Normal
Boom
5,000,000,000 10,000,000,000 15,000,000,000
50,000,000
50,000,000
50,000,000
4,950,000,000 9,950,000,000 14,950,000,000
1,732,500,000 3,482,500,000 5,232,500,000
3,217,500,000 6,467,500,000 9,717,500,000
2,765,000,000 2,765,000,000 2,765,000,000
1.16
2.34
3.51
70 Percent Stock 30 Percent Debt
Recession
Normal
Boom
EBIT
5,000,000,000 10,000,000,000 15,000,000,000
Interest 15,000,000
15,000,000
15,000,000
EBT
4,985,000,000 9,985,000,000 14,985,000,000
Taxes
1,744,750,000 3,494,750,000 5,244,750,000
EAT
3,240,250,000 6,490,250,000 9,740,250,000
# Shares 2,793,000,000 2,793,000,000 2,793,000,000
EPS
1.16
2.32
3.49
70 Percent Debt 30 Percent Stock
Recession
Normal
Boom
5,000,000,000 10,000,000,000 15,000,000,000
35,000,000
35,000,000
35,000,000
4,965,000,000 9,965,000,000 14,965,000,000
1,737,750,000 3,487,750,000 5,237,750,000
3,227,250,000 6,477,250,000 9,727,250,000
2,777,000,000 2,777,000,000 2,777,000,000
1.16
2.33
3.50
© 2005 Tony Gauvin,
UMFK
Implementation
Objectives
Increase income by 40% in next 3 years
Increase revenue by 25% in next three years
Decrease cost by increasing efficiencies to match
income goals
Decrease long–term debt
Use increased income to pay down debt
Match sector avg’s within 3 years
Wednesday,
March 23, 2005
© 2005 Tony Gauvin,
UMFK
Goals & Policies
Telecom division
5% reduction in expenses per annum
Wireless
15% increase in sales per annum
Wednesday,
March 23, 2005
© 2005 Tony Gauvin,
UMFK
Evaluations
Qtr & Yearly financial reports
Balanced Scorecard
Yearly strategic meeting of division
management and corporate management
Wednesday,
March 23, 2005
© 2005 Tony Gauvin,
UMFK
2004 Financial Statistics
Operating Revenues
Net Income
EPS (diluted basis)
Capital Expenditures
Total Debt
Cash Flow from Operating Activities
Weighted Average Shares Outstanding
Shareowners
Wednesday,
March 23, 2005
© 2005 Tony Gauvin,
UMFK
$71.3 billion
$7.0 billion
$2.51
$13.3 billion
$39.3 billion
$21.8 billion
$2.77 billion
2.7 million
2004 Financial Statistics
Operating Revenues
Net Income
EPS (diluted basis)
Capital Expenditures
Total Debt
Cash Flow from Operating Activities
Weighted Average Shares Outstanding
Shareowners
Wednesday,
March 23, 2005
© 2005 Tony Gauvin,
UMFK
$75.1 billion
$7.4 billion
$2.65
$13.3 billion
$39 billion
$22 billion
$2.9 billion
2.7 million
Press Releases
January 8, 2004
June 27, 2004
Verizon Deploying Fiber Optics to Homes and Businesses in 6 More States in
Northeast and Mid-Atlantic
March 13, 2005
Verizon Communications Reports 6% Second-Quarter Revenue Growth, Led
by Wireless Revenue Growth of 25%
October 21, 2004
Verizon Wireless Announces Roll Out of National 3G Network
Verizon-MCI Transaction Creates New Competitor in Large-Business,
Government Markets, Seidenberg Says
January 26, 2006
Verizon Communications Reports Strong 4Q 2005 Results, Driven by
Continued Growth in Wireless and Broadband
Wednesday,
March 23, 2005
© 2005 Tony Gauvin,
UMFK
