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Verizon Reports Continued Growth in 3Q

October 27, 2008

NEW YORK, Oct. 27 /PRNewswire/ —

   3Q 2008 HIGHLIGHTS   Consolidated Results   --  59 cents in diluted EPS and 66 cents in adjusted EPS (non-GAAP),       compared with 3Q 2007 diluted EPS of 44 cents reported and 63 cents       adjusted.   --  $24.8 billion in quarterly revenues -- adjusted growth of 5.4 percent       (non-GAAP).    Wireless   --  1.5 million organic net customer additions, all retail       (non-wholesale); 2.1 million total retail net additions including       customers from acquisitions.   --  70.8 million total customers; 68.8 million retail customers, up 11.3       percent.   --  Industry-leading low churn -- 1.33 percent total churn and 1.03       percent retail post-paid churn.   --  12.5 percent increase in total revenues; data revenues up 42.5       percent; 44.2 percent EBITDA margin on service revenues (non-GAAP).    Wireline   --  233,000 net new FiOS TV customers and 225,000 net new FiOS Internet       customers.   --  12.8 percent increase in consumer ARPU in legacy telecom markets; 45.3       percent growth in consumer broadband and video revenues.   --  15.4 percent increase in Verizon Business strategic services revenues.   --  8th consecutive quarter of year-over-year pro-forma Verizon Business       revenue growth.   

Note: Comparisons are year over year unless otherwise noted. See the accompanying schedules and http://www.verizon.com/investor for reconciliations to generally accepted accounting principles (GAAP) for non-GAAP financial measures cited in this news release. Discontinued operations relate to the disposition of Telecomunicaciones de Puerto Rico, Inc. that was completed on March 30, 2007. Reclassifications of prior-period amounts have been made, where appropriate, to reflect comparable operating results for the spinoff of the Wireline segment’s non-strategic local exchange and related business assets in Maine, New Hampshire and Vermont in the first quarter of 2008.

Verizon Communications Inc. today reported strong results in the third quarter 2008, supported by Verizon Wireless’ continued strong performance, accelerating numbers of new FiOS customers, and continued increased sales of strategic business services.

Verizon reported 59 cents in diluted earnings per share (EPS) in the third quarter 2008, compared with 44 cents per share in the third quarter 2007.

On an adjusted basis (non-GAAP), third-quarter 2008 earnings were 66 cents per share, compared with 63 cents per share in the third quarter 2007.

Continued Growth in 3Q

“Verizon again reported solid revenue, earnings and cash flow growth this quarter,” said Chairman and CEO Ivan Seidenberg. “The strategic investments we made over the past few years continue to drive growth in wireless, enterprise, broadband and video.

“Although the capital markets and economy may present challenges, we will continue to execute on our business plan and invest for future growth,” he said. “We increased the dividend 7 percent this quarter, reflecting confidence in continued growth opportunities. Verizon has a great set of assets and an employee team focused on creating value for our customers and shareholders.”

Strong Revenues and Cash Flows

Verizon’s total operating revenues grew 4.1 percent to $24.8 billion in the third quarter 2008, from $23.8 billion in the third quarter 2007. This is an increase of 5.4 percent when adjusted for the spinoff of non-strategic local exchange and related Wireline business assets earlier this year (non-GAAP). Total operating expenses increased 5.2 percent to $20.6 billion, or 5.4 percent on an adjusted basis, comparing third-quarter 2008 with third-quarter 2007.

Cash flows from continuing operations were $19.1 billion through the first nine months of 2008, up 5.9 percent compared with the same period last year. Capital expenditures were $12.6 billion through the first nine months of 2008, down more than $200 million over the same period last year. Verizon is on track to deliver lower overall capital spending in 2008, compared with 2007. Total debt was $44.8 billion, compared with $43.1 billion at the end of the second quarter 2008.

Details of 3Q Adjustments

Adjusted earnings in the third quarter 2008 excluded $164 million after-tax, or 6 cents per share, for severance, pension and benefit charges recognized primarily as a result of workforce reductions; and $32 million after-tax, or 1 cent per share, for merger integration costs. Adjusted earnings in the third quarter 2007 excluded charges of 19 cents per share in special items: 16 cents per share for international taxes, 2 cents per share for costs related to the spinoff of non-strategic Wireline assets and 1 cent per share for merger integration costs.

Wireless Continues Strong and Steady Growth

Verizon Wireless continued its uninterrupted record of industry-leading customer loyalty and profitability. In the third quarter:

   --  Wireless retail gross customer additions were strong, up 5.3 percent       over the prior year.   --  Organic growth (growth from sources other than acquisitions) was 1.5       million retail net customer additions, essentially all post-paid.   --  Total growth was 2.1 million retail net additions.  This included       630,000 retail customers from the Rural Cellular Corp. acquisition,       and Verizon expects to have a net loss of approximately 120,000 of       these customers under an exchange agreement with another carrier.        Verizon Wireless had 70.8 million total customers at the end of the       quarter.   --  The company continues to have a high-quality customer base, with 68.8       million retail wireless customers -- the most of any wireless brand in       the U.S.   --  Verizon Wireless had industry-leading (lowest) total churn for the       16th consecutive quarter, at 1.33 percent.  Among the company's retail       post-paid customers, churn was even lower at 1.03 percent.   --  Verizon Wireless continued its double-digit revenue growth, with total       revenues of $12.7 billion, up 12.5 percent year over year.  Service       revenues were $10.9 billion, up 12.2 percent year over year, driven by       customer growth and demand for data services.   --  This revenue growth was driven by ARPU (average monthly revenue per       customer), which increased year over year for the 10th consecutive       quarter.  Total service ARPU of $52.18 was up 0.9 percent year over       year, reflecting strong growth in total data ARPU, which was up 28.3       percent.   --  Wireless operating income margin was 27.3 percent, up 20 basis points       year over year.   --  EBITDA margin on service revenues (non-GAAP) was 44.2 percent.        (EBITDA is earnings before interest, taxes, depreciation and       amortization.)    FiOS Customer Growth Accelerates  

Verizon Wireline reported accelerated growth of FiOS sales and continued increased sales of enterprise strategic services. In the third quarter (with prior-period comparisons adjusted to reflect the impact of the spinoff of non-strategic Wireline assets):

   --  Verizon added 233,000 net new FiOS TV customers, compared with 176,000       in the second quarter 2008.  The company has 1.6 million FiOS TV       customers, compared with more than 700,000 FiOS TV customers at the       end of third-quarter 2007.   --  Verizon added 225,000 net new FiOS Internet customers, compared with       187,000 in the second quarter 2008.  The company has 2.2 million FiOS       Internet customers, compared with 1.3 million FiOS Internet customers       at the end of third-quarter 2007.   --  FiOS Internet sales penetration (sales as a percentage of potential       customers) increased to 24.2 percent, compared with 20.0 percent in       last year's third quarter.  FiOS Internet is available for sale to       nearly 9.1 million premises.   --  FiOS TV sales penetration increased to 19.7 percent, compared with       15.2 percent in last year's third quarter.  Verizon made FiOS TV       service available for sale to a record 1.2 million additional premises       in the quarter, bringing the total to 8.2 million.   --  Broadband and video revenues from consumer customers totaled $1.1       billion in the third quarter, representing year-over-year growth of       45.3 percent.   --  Growing revenue from broadband and video services drove consumer ARPU       in legacy Verizon wireline markets (which excludes consumer markets       served by the former MCI) to $66.67, a 12.8 percent increase compared       with last year's third quarter.   --  Verizon Business had total revenues of $5.4 billion, or growth of 1.2       percent compared with last year's third quarter.  This was Verizon       Business' eighth consecutive quarter of year-over-year pro-forma       revenue growth (non-GAAP, calculated as if Verizon and MCI had merged       on Jan. 1, 2005).   --  Sales of strategic services -- such as IP (Internet protocol), managed       services, Ethernet and optical ring services -- continued to drive       growth at Verizon Business.  These services generated $1.6 billion in       revenue, up 15.4 percent from third-quarter 2007.    Additional Highlights   Wireless   --  Verizon Wireless completed its purchase of Rural Cellular on Aug. 7,       2008.  The acquisition will expand the company's network coverage to       many rural markets around the country.    --  At the end of the third quarter, 97 percent of the company's base was       retail (post-pay and pre-pay) and 93 percent was retail post-pay.    --  Verizon Wireless continued to lead the industry in cost efficiency.        Cash expense per customer per month (non-GAAP) was $29.12 in the third       quarter 2008, an increase of 1.7 percent over the third quarter 2007       and 3.9 percent from the second quarter 2008.    --  Data revenues grew 42.5 percent over the prior year, to $2.8 billion.        The company had 52.6 million retail data customers in September       (approximately three-quarters of its retail base), a 25.3 percent       increase over the prior year.    --  The company continued to extend the reach of its nationwide wireless       broadband network to make the nation's largest and most reliable 3G       (third-generation) network available to a greater number of Americans       -- more than 260 million at the end of the third quarter.  More than       60 percent of the company's retail customers -- 43.2 million -- had 3G       broadband-capable devices at the end of the quarter.    --  To offer customers both the reliability of Verizon Wireless' 3G       network and the full power of a revolutionary touch-screen, multimedia       smartphone, Verizon Wireless announced the BlackBerry Storm will be       available later this fall.  Designed for both consumers and business       customers, the BlackBerry Storm offers the dependability of the       BlackBerry platform; global connectivity; and premium services and       features, such as Web browsing, music and video, turn-by-turn       satellite navigation, messaging, and social networking.  The       Blackberry Storm will be sold exclusively by Verizon Wireless in the       U.S. and by Vodafone in Europe, India, Australia and New Zealand.    --  Since the end of the second quarter, the company introduced two new       rugged phones -- the G'zOne Boulder and the Motorola Adventure V750.        These are designed to withstand extreme conditions and provide access       to Verizon Wireless' Push to Talk service -- a fast, two-way       communication that instantly connects customers to co-workers and       leverages the high speeds of the company's EV-DO (Rev.A) network.        Other devices included new multimedia handsets by LG -- the Dare and       the Chocolate 3 -- and the Samsung Knack for customers who want simple       features and functionality.    --  During the quarter, Verizon Wireless customers sent or received more       than 80 billion text messages and nearly 1.5 billion picture/video       messages.  Customers also completed 43 million music and video       downloads.    --  Through a five-year agreement announced earlier this year, Qwest       Communications began selling Verizon Wireless products and services to       residential and business customers in its residential service area.    Wireline   --  Wireline total operating revenues were $12.2 billion, a 1.7 percent       decrease compared with the third quarter 2007.  Wireline total       operating expenses decreased 1.1 percent over the same period.    --  Verizon's broadband fiber-to-the-premises network passed 11.9 million       premises throughout the company's wireline service territory by the       end of the quarter.    --  Total broadband connections were 8.5 million, a net increase of       129,000 over the second quarter 2008.  This includes a decrease of       96,000 DSL-based Verizon High Speed Internet connections, which was       more than offset by the increase in FiOS Internet customers.  The 8.5       million is a 9.1 percent year-over-year increase.    --  Broadband and TV products now account for 29.1 percent of consumer       ARPU in legacy markets, compared with 27.6 percent in the second       quarter 2008.  The ARPU among FiOS customers continues to be more than       $130 per month.    --  Wireline data revenues -- which now represent 42.9 percent of total       Wireline revenues -- were $5.2 billion, an increase of 14.6 percent       compared with the third quarter 2007.  This includes revenues from       consumer broadband services, wholesale data transport and Verizon       Business data services.    --  Verizon Business, which delivers integrated global communications and       IT solutions to large-business and government customers, announced       significant capability enhancements.  These included professional       services aimed at gaining flexibility, cost control and savings from       virtualized environments; an expanded suite of unified communications       tools in conjunction with Cisco; a new managed wireless local area       network-access offering; a new Network Access Control security       service; a consolidated Global Billing Report; an enhanced interface       for connecting with more than 70,000 Verizon Wi-Fi hot spots       worldwide; and an extension of the company's enterprise mobility       access services to Latin America.    --  Verizon Business continued to expand its global network reach and       capabilities, announcing during the quarter that the first phase of       the Trans-Pacific Express submarine cable system directly connecting       Mainland China, the U.S., South Korea and Taiwan is ready for service.       The company also began a significant expansion of its operations in       India, activating Private IP nodes in five major business centers       following receipt of international and national long-distance licenses       earlier this year.    --  Additional global network enhancements included installing 27       additional Private IP edge switches globally for a total of 621 edge       switches in 158 markets; completing the first phase of the company's       U.S. optical mesh network; expanding its mesh network in the       Asia-Pacific region to Taiwan, Hong Kong and Korea; and deploying an       additional 1,348 ultra long haul route-miles in the U.S.    --  New commercial customer agreements included CA Inc., First Data, H&R       Block, Husqvarna and Kuwait Petroleum International Ltd.  Verizon       Business also signed new contracts with several U.S. government       agencies.    

Verizon Communications Inc. , headquartered in New York, is a leader in delivering broadband and other wireline and wireless communication innovations to mass market, business, government and wholesale customers. Verizon Wireless operates America’s most reliable wireless network, serving nearly 71 million customers nationwide. Verizon’s Wireline operations include Verizon Business, which delivers innovative and seamless business solutions to customers around the world, and Verizon Telecom, which brings customers the benefits of converged communications, information and entertainment services over the nation’s most advanced fiber-optic network. A Dow 30 company, Verizon employs a diverse workforce of more than 228,000 and last year generated consolidated operating revenues of $93.5 billion. For more information, visit http://www.verizon.com/.

VERIZON’S ONLINE NEWS CENTER: Verizon news releases, executive speeches and biographies, media contacts, high-quality video and images, and other information are available at Verizon’s News Center on the World Wide Web at http://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 news 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: materially adverse changes in economic and industry conditions and labor matters, including workforce levels and 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, including disruption of our suppliers’ provisioning of critical products or services; the impact of natural or man-made disasters or litigation and any resulting financial impact not covered by insurance; technology substitution; an adverse change in the ratings afforded our debt securities by nationally accredited ratings organizations or adverse conditions in the credit markets impacting the cost, including interest rates, and/or availability of financing; 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; the timing, scope and financial impact of our deployment of fiber-to-the-premises broadband technology; the ability of Verizon Wireless to continue to obtain sufficient spectrum resources; 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; and the ability to complete acquisitions and dispositions.

   Verizon Communications Inc.   Condensed Consolidated Statements of Income                            (dollars in millions, except per share amounts)                           3 Mos.   3 Mos.          9 Mos.   9 Mos.                           Ended    Ended    %      Ended    Ended     %   Unaudited             9/30/08  9/30/07 Change  9/30/08  9/30/07  Change    Operating Revenues    $24,752  $23,772    4.1  $72,709  $69,629     4.4    Operating Expenses   Cost of services and    sales                 10,048    9,608    4.6   29,031   27,751     4.6   Selling, general &    administrative    expense                6,879    6,349    8.3   19,808   19,012     4.2   Depreciation and    amortization expense   3,652    3,605    1.3   10,818   10,711     1.0   Total Operating    Expenses              20,579   19,562    5.2   59,657   57,474     3.8    Operating Income        4,173    4,210   (0.9)  13,052   12,155     7.4   Equity in earnings of    unconsolidated    businesses               211      147   43.5      458      492    (6.9)   Other income and    (expense), net           105       49      *      220      124    77.4   Interest expense         (440)    (450)  (2.2)  (1,302)  (1,390)   (6.3)   Minority interest      (1,530)  (1,298)  17.9   (4,459)  (3,720)   19.9   Income Before    Provision for Income    Taxes, Discontinued    Operations and    Extraordinary Item     2,519    2,658   (5.2)   7,969    7,661     4.0   Provision for income    taxes                   (850)  (1,387) (38.7)  (2,776)  (3,223)  (13.9)    Income Before    Discontinued    Operations and    Extraordinary Item     1,669    1,271   31.3    5,193    4,438    17.0   Income from    discontinued    operations, net of    tax (1)                    -        -      *        -      142  (100.0)   Extraordinary item,    net of tax                 -        -      *        -     (131) (100.0)   Net Income             $1,669   $1,271   31.3   $5,193   $4,449    16.7    Basic Earnings per    Common Share (2)   Income before    discontinued    operations and    extraordinary item      $.59     $.44   34.1    $1.82    $1.53    19.0   Income from    discontinued    operations, net of    tax                        -        -      *        -      .05  (100.0)   Extraordinary item,    net of tax                 -        -      *        -     (.05) (100.0)   Net income               $.59     $.44   34.1    $1.82    $1.53    19.0    Weighted average    number of common    shares (in millions)   2,844    2,896           2,852    2,902    Diluted Earnings per    Common Share (2) (3)   Income before    discontinued    operations and    extraordinary item      $.59     $.44   34.1    $1.82    $1.53    19.0   Income from    discontinued    operations, net of    tax                        -        -      *        -      .05  (100.0)   Extraordinary item,    net of tax                 -        -      *        -     (.05) (100.0)   Net income               $.59     $.44   34.1    $1.82    $1.53    19.0    Weighted average    number of common    shares-assuming    dilution (in    millions)              2,845    2,900           2,854    2,906     Footnotes:   (1) Discontinued operations includes a gain on the sale of   Telecomunicaciones de Puerto Rico, Inc. (TELPRI) of $70 million, net of   tax. The disposition of this non-strategic business was completed on   March 30, 2007.    (2) EPS totals may not add due to rounding.    (3) Diluted Earnings per Share includes the dilutive effect of shares   issuable under our stock-based compensation plans, which represent the   only potential dilution.    *    Not meaningful      Verizon Communications Inc.   Condensed Consolidated Statements of Income Before Special Items                               (dollars in millions, except per share amounts)                            3 Mos.    3 Mos.          9 Mos.   9 Mos.                           Ended     Ended   %       Ended    Ended    %   Unaudited             9/30/08   9/30/07 Change  9/30/08  9/30/07  Change    Operating    Revenues (1)     Wireline            $12,158   $12,372   (1.7) $36,297  $36,880   (1.6)     Domestic Wireless    12,699    11,289   12.5   36,486   32,439   12.5     Other                  (105)     (168) (37.5)    (332)    (515) (35.5)   Total Operating    Revenues              24,752    23,493    5.4   72,451   68,804    5.3    Operating    Expenses (1)     Cost of services      and sales           10,043     9,489    5.8   28,896   27,414    5.4     Selling, general      & administrative      expense              6,569     6,201    5.9   19,306   18,621    3.7     Depreciation and     amortization expense  3,652     3,540    3.2   10,758   10,518    2.3   Total Operating    Expenses              20,264    19,230    5.4   58,960   56,553    4.3    Operating Income        4,488     4,263    5.3   13,491   12,251   10.1   Operating income    impact of divested    operations (1)             -        51 (100.0)      44      149  (70.5)   Equity in earnings    of unconsolidated    businesses               211       147   43.5      458      492   (6.9)   Other income and    (expense), net           105        49      *      220      124   77.4   Interest expense         (440)     (450)  (2.2)  (1,302)  (1,390)  (6.3)   Minority interest      (1,530)   (1,298)  17.9   (4,459)  (3,720)  19.9   Income Before    Provision for Income    Taxes and     Discontinued     Operations            2,834     2,762    2.6    8,452    7,906    6.9   Provision for income    taxes                   (969)     (948)   2.2   (2,942)  (2,834)   3.8    Income Before    Discontinued    Operations             1,865     1,814    2.8    5,510    5,072    8.6   Income from    discontinued    operations,    net of tax                 -         -      *        -       72 (100.0)   Net Income Before    Special Items         $1,865    $1,814    2.8   $5,510   $5,144    7.1    Basic Adjusted    Earnings per Common    Share (2)   Income before    discontinued    operations              $.66      $.63    4.8    $1.93    $1.75   10.3   Income from    discontinued    operations,    net of tax                 -         -      *        -      .02 (100.0)   Net income               $.66      $.63    4.8    $1.93    $1.77    9.0    Weighted average    number of common    shares (in millions)   2,844     2,896           2,852    2,902    Diluted Adjusted    Earnings per Common    Share (2) (3)   Income before    discontinued    operations              $.66      $.63    4.8    $1.93    $1.75   10.3   Income from    discontinued    operations,    net of tax                 -         -      *        -      .02 (100.0)   Net income               $.66      $.63    4.8    $1.93    $1.77    9.0    Weighted average    number of common    shares-assuming    dilution (in millions) 2,845     2,900           2,854    2,906     Footnotes:   (1) Reclassifications of prior period amounts have been made, where   appropriate, to reflect comparable operating results for the spin-off of   the wireline segment's non-strategic local exchange and related business   assets in Maine, New Hampshire and Vermont in the first quarter of 2008.   Reclassifications were determined using specific information where   available and allocations where data is not maintained on a state-specific   basis within the Company's books and records as follows:         Revenues               $-      $279            $258     $825        Expenses               $-      $228            $214     $676     (2) EPS totals may not add due to rounding.    (3) Diluted Earnings per Share includes the dilutive effect of shares   issuable under our stock-based compensation plans, which represent the   only potential dilution.    *  Not meaningful      Verizon Communications Inc.   Condensed Consolidated Statements of Income - Reconciliations                             (dollars in millions, except per share amounts)                                                   Special and Non-                                                  Recurring Items                                                  ----------------                                                                   3 Mos.                                           3 Mos.        Severance, Ended                                            Ended  Merger Pension  9/30/08                                          9/30/08  Integ-   and    Before   Unaudited                             Reported  ration Benefit  Special                                           (GAAP)   Costs Charges  Items    Operating Revenues                     $24,752     $-     $-   $24,752   Operating Expenses   Cost of services and sales              10,048     (5)     -    10,043   Selling, general & administrative    expense                                 6,879    (45)  (265)    6,569   Depreciation and amortization expense    3,652      -      -     3,652   Total Operating Expenses                20,579    (50)  (265)   20,264    Operating Income                         4,173     50    265     4,488   Equity in earnings of unconsolidated    businesses                                211      -      -       211   Other income and (expense), net            105      -      -       105   Interest expense                          (440)     -      -      (440)   Minority interest                       (1,530)     -      -    (1,530)   Income Before Provision for Income    Taxes                                   2,519     50    265     2,834   Provision for income taxes                (850)   (18)  (101)     (969)   Net Income                              $1,669    $32   $164    $1,865    Basic Earnings per Common Share (1)   Net income                                $.59   $.01   $.06      $.66    Diluted Earnings per Common Share (1)   Net income                                $.59   $.01   $.06      $.66                                 (dollars in millions, except per share amounts)                                      Special and Non-Recurring Items                                     -------------------------------                                                                     3 Mos.                              3 Mos.         Access        Impact    Ended                              Ended   Merger Line            of     9/30/07                             9/30/07  Integ- Spin-Off      Divested  Before   Unaudited                 Reported ration Related  Intl. Oper-   Special                              (GAAP)  Costs  Charges  Taxes ations   Items     Operating Revenues        $23,772    $-     $-      $-   $(279)  $23,493    Operating Expenses   Cost of services and sales  9,608   (12)     -       -    (107)    9,489   Selling, general &    administrative expense     6,349   (33)   (46)    (13)    (56)    6,201   Depreciation and    amortization expense       3,605     -      -       -     (65)    3,540   Total Operating Expenses   19,562   (45)   (46)    (13)   (228)   19,230    Operating Income            4,210    45     46      13     (51)    4,263   Operating income impact of    divested operations            -     -      -       -      51        51   Equity in earnings of    unconsolidated businesses    147     -      -       -       -       147   Other income and (expense),    net                           49     -      -       -       -        49   Interest expense             (450)    -      -       -       -      (450)   Minority interest          (1,298)    -      -       -       -    (1,298)   Income Before Provision for   Income Taxes                2,658    45     46      13       -     2,762   Provision for income taxes (1,387)  (17)    (2)    458       -      (948)   Net Income                 $1,271   $28    $44    $471      $-    $1,814    Basic Earnings per Common    Share (1)   Net income                   $.44  $.01   $.02    $.16       -      $.63    Diluted Earnings per Common    Share  (1)   Net income                   $.44  $.01   $.02    $.16       -      $.63    Footnote:   (1) EPS totals may not add due to rounding.    Note: See http://www.verizon.com/investor for a reconciliation of other non-GAAP   measures included in this Quarterly Bulletin.      Verizon Communications Inc.   Condensed Consolidated Statements of Income - Reconciliations                                (dollars in millions, except per share amounts)                                  Special and Non-Recurring Items                                 --------------------------------                                                                    9 Mos.                       9 Mos.            Access  Impact  Severance,  Ended                       Ended     Merger   Line     of     Pension  9/30/08                       9/30/08   Integ- Spin-Off Divested   and     Before                       Reported  ration  Related Oper-    Benefit  Special   Unaudited           (GAAP)     Costs  Charges ations   Charges    Items    Operating Revenues  $72,709      $-      $-    $(258)     $-    $72,451    Operating Expenses   Cost of services    and sales           29,031     (18)    (16)    (101)      -     28,896   Selling, general &    administrative    expense             19,808     (97)    (87)     (53)   (265)    19,306   Depreciation and    amortization    expense             10,818       -       -      (60)      -     10,758   Total Operating    Expenses            59,657    (115)   (103)    (214)   (265)    58,960    Operating Income     13,052     115     103      (44)    265     13,491   Operating income    impact of divested    operations               -       -       -       44       -         44   Equity in earnings of    unconsolidated    businesses             458       -       -        -       -        458   Other income and    (expense), net         220       -       -        -       -        220   Interest expense     (1,302)      -       -        -       -     (1,302)   Minority interest    (4,459)      -       -        -       -     (4,459)   Income Before    Provision for    Income Taxes         7,969     115     103        -     265      8,452   Provision for    income taxes        (2,776)    (43)    (22)       -    (101)    (2,942)   Net Income           $5,193     $72     $81       $-    $164     $5,510    Basic Earnings per    Common Share (1)   Net income            $1.82    $.02    $.03       $-    $.06      $1.93    Diluted Earnings    per Common    Share (1)   Net income            $1.82    $.02    $.03       $-    $.06      $1.93                                  (dollars in millions, except per share amounts)                                                     Special and Non-Recurring                                                              Items                                                    -------------------------                                             9 Mos.                                            Ended    Merger  Sale of                                           9/30/07   Integ-  Puerto                                           Reported  ration  Rico,  Loss on   Unaudited                               (GAAP)    Costs  Net      CANTV    Operating Revenues                      $69,629      $-      $-      $-    Operating Expenses   Cost of services and sales               27,751     (16)      -       -   Selling, general & administrative    expense                                 19,012     (70)   (100)      -   Depreciation and amortization expense    10,711       -       -       -   Total Operating Expenses                 57,474     (86)   (100)      -    Operating Income                         12,155      86     100       -   Operating income impact of divested    operations                                   -       -       -       -   Equity in earnings of unconsolidated    businesses                                 492       -       -       -   Other income and (expense), net             124       -       -       -   Interest expense                         (1,390)      -       -       -   Minority interest                        (3,720)      -       -       -   Income Before Provision for Income    Taxes, Discontinued Operations    and Extraordinary Item                   7,661      86     100       -   Provision for income taxes               (3,223)    (32)    (35)      -   Income Before Discontinued Operations    and Extraordinary Item                   4,438      54      65       -   Income from discontinued operations,    net of tax                                 142       -     (70)      -   Extraordinary item, net of tax             (131)      -       -     131   Net Income                               $4,449     $54     $(5)   $131    Basic Earnings per Common Share (1)   Income before discontinued operations    and extraordinary item                   $1.53    $.02    $.02      $-   Income from discontinued operations,    net of tax                                 .05       -    (.02)      -   Extraordinary item, net of tax             (.05)      -       -     .05   Net income                                $1.53    $.02      $-    $.05    Diluted Earnings per Common Share (1)   Income before discontinued operations    and extraordinary item                   $1.53    $.02    $.02      $-   Income from discontinued operations,    net of tax                                $.05       -    (.02)      -   Extraordinary item, net of tax             (.05)      -       -     .05   Net income                                $1.53    $.02      $-    $.05                                          Special and Non-Recurring                                                   Items                                        -------------------------                                                                      9 Mos.                                         Access            Impact     Ended                                          Line               of     9/30/07                                        Spin-Off          Divested   Before                                         Related   Intl.   Oper-    Special   Unaudited                             Charges   Taxes   ations     Items    Operating Revenues                        $-      $-    $(825)   $68,804    Operating Expenses   Cost of services and sales                 -       -     (321)    27,414   Selling, general & administrative    expense                                 (46)    (13)    (162)    18,621   Depreciation and amortization expense      -       -     (193)    10,518   Total Operating Expenses                 (46)    (13)    (676)    56,553    Operating Income                          46      13     (149)    12,251   Operating income impact of divested    operations                                -       -      149        149   Equity in earnings of unconsolidated    businesses                                -       -        -        492   Other income and (expense), net            -       -        -        124   Interest expense                           -       -        -     (1,390)   Minority interest                          -       -        -     (3,720)   Income Before Provision for Income    Taxes, Discontinued Operations    and Extraordinary Item                   46      13        -      7,906   Provision for income taxes                (2)    458        -     (2,834)   Income Before Discontinued Operations    and Extraordinary Item                   44     471        -      5,072   Income from discontinued operations,    net of tax                                -       -        -         72   Extraordinary item, net of tax             -       -        -          -   Net Income                               $44    $471       $-     $5,144    Basic Earnings per Common Share  (1)   Income before discontinued operations    and extraordinary item                 $.02    $.16       $-      $1.75   Income from discontinued operations,    net of tax                                -       -        -        .02   Extraordinary item, net of tax             -       -        -          -   Net income                              $.02    $.16       $-      $1.77    Diluted Earnings per Common Share (1)   Income before discontinued operations    and extraordinary item                 $.02    $.16       $-      $1.75   Income from discontinued operations,    net of tax                                -       -        -        .02   Extraordinary item, net of tax             -       -        -          -   Net income                              $.02    $.16       $-      $1.77    Footnote:   (1) EPS totals may not add due to rounding.    Note: See http://www.verizon.com/investor for a reconciliation of other non-GAAP   measures included in this Quarterly Bulletin.      Verizon Communications Inc.   Selected Financial and Operating Statistics                                (dollars in millions, except per share amounts)    Unaudited                                       9/30/08           9/30/07    Debt to debt and shareowners' equity    ratio-end of period                             46.8%             38.8%    Book value per common share                     $17.94            $17.19    Common shares outstanding (in    millions)   End of period                                    2,840             2,890    Total employees (1)                            228,315           235,252                                               3 Mos.  3 Mos.   9 Mos.   9 Mos.                                            Ended   Ended    Ended    Ended   Unaudited                              9/30/08 9/30/07  9/30/08  9/30/07    Capital expenditures (including    capitalized software)     Wireline                              $2,483  $2,753   $7,318   $7,873     Domestic Wireless                      1,473   1,515    4,723    4,903     Other                                    222       9      534       16     Total                                 $4,178  $4,277  $12,575  $12,792     Cash dividends declared per common    share                                  $0.460  $0.430   $1.320   $1.240    Footnote:   (1) Prior period has been reclassified to reflect comparable amounts.      Verizon Communications Inc.   Condensed Consolidated Balance Sheets                                                        (dollars in millions)    Unaudited                                 9/30/08   12/31/07   $ Change    Assets    Current assets     Cash and cash equivalents                 $696      $1,153      $(457)     Short-term investments                     978       2,244     (1,266)     Accounts receivable, net                11,724      11,736        (12)     Inventories                              2,485       1,729        756     Prepaid expenses and other               3,248       1,836      1,412    Total current assets                     19,131      18,698        433    Plant, property and equipment           214,376     213,994        382     Less accumulated depreciation          128,687     128,700        (13)                                             85,689      85,294        395    Investments in unconsolidated     businesses                               3,198       3,372       (174)    Wireless licenses                        61,595      50,796     10,799    Goodwill                                  6,124       5,245        879    Other intangible assets, net              5,093       4,988        105    Other investments                         4,759           -      4,759    Other assets                             19,272      18,566        706   Total Assets                            $204,861    $186,959    $17,902    Liabilities and Shareowners'    Investment    Current liabilities     Debt maturing within one year           $7,297      $2,954     $4,343     Accounts payable and accrued      liabilities                            13,715      14,462       (747)     Other                                    7,263       7,325        (62)    Total current liabilities                28,275      24,741      3,534    Long-term debt                           37,478      28,203      9,275    Employee benefit obligations             28,800      29,960     (1,160)    Deferred income taxes                    17,409      14,784      2,625    Other liabilities                         6,053       6,402       (349)     Minority interest                        35,892      32,288      3,604     Shareowners' investment     Common stock                               297         297          -     Contributed capital                     40,290      40,316        (26)     Reinvested earnings                     19,322      17,884      1,438     Accumulated other comprehensive loss    (4,199)     (4,506)       307     Common stock in treasury, at cost       (4,841)     (3,489)    (1,352)     Deferred compensation - employee      stock ownership plans and other            85          79          6    Total shareowners' investment            50,954      50,581        373   Total Liabilities and Shareowners'    Investment                             $204,861    $186,959    $17,902    The unaudited consolidated balance sheets are based on preliminary   information.      Verizon Communications Inc.   Condensed Consolidated Statements of Cash Flows                                                         (dollars in millions)                                             9 Mos.      9 Mos.                                            Ended       Ended   Unaudited                                9/30/08     9/30/07    $ Change   Cash Flows From Operating Activities   Net income                                $5,193      $4,449        $744   Adjustments to reconcile net income    to net cash provided by    operating activities - continuing    operations:       Depreciation and amortization expense 10,818      10,711         107       Employee retirement benefits           1,232       1,290         (58)       Deferred income taxes                  2,240         708       1,532       Provision for uncollectible accounts     724         741         (17)       Equity in earnings of unconsolidated        businesses, net of dividends        received                                303        (268)        571       Extraordinary item, net of tax             -         131        (131)       Changes in current assets and        liabilities, net of effects        from acquisition/disposition of        businesses                           (2,458)     (2,296)       (162)       Other, net                             1,026       2,553      (1,527)   Net cash provided by operating    activities - continuing operations       19,078      18,019       1,059   Net cash used in operating activities    - discontinued operations                     -        (570)        570   Net cash provided by operating    activities                               19,078      17,449       1,629    Cash Flows From Investing Activities   Capital expenditures (including    capitalized software)                   (12,575)    (12,792)        217   Acquisitions of licenses, investments    and businesses, net of cash acquired    (15,978)       (697)    (15,281)   Net change in short-term investments       1,238       1,267         (29)   Other, net                                  (567)        981      (1,548)   Net cash used in investing activities    - continuing operations                 (27,882)    (11,241)    (16,641)   Net cash provided by investing    activities - discontinued operations          -         757        (757)   Net cash used in investing activities    (27,882)    (10,484)    (17,398)    Cash Flows From Financing Activities   Proceeds from long-term borrowings        12,552       3,402       9,150   Repayments of long-term borrowings    and capital lease obligations            (3,398)     (4,994)      1,596   Increase (decrease) in short-term    obligations, excluding current    maturities                                4,132      (3,438)      7,570   Dividends paid                            (3,687)     (3,529)       (158)   Proceeds from sale of common stock            16         794        (778)   Purchase of common stock for treasury     (1,369)     (1,734)        365   Other, net                                   101          30          71   Net cash provided by (used in)    financing activities - continuing    operations                                8,347      (9,469)     17,816   Net cash provided by (used in)    financing activities - discontinued    operations                                    -           -           -   Net cash provided by (used in)    financing activities                      8,347      (9,469)     17,816    Decrease in cash and cash equivalents       (457)     (2,504)      2,047   Cash and cash equivalents, beginning    of period                                 1,153       3,219      (2,066)   Cash and cash equivalents, end of    period                                     $696        $715        $(19)      Verizon Communications Inc.   Wireline - Selected Financial Results                                                        (dollars in millions)                             3 Mos.  3 Mos.          9 Mos.   9 Mos.                             Ended   Ended    %       Ended    Ended    %   Unaudited                9/30/08 9/30/07 Change  9/30/08  9/30/07 Change   Wireline Operating    Revenues (1)      Verizon Telecom        Mass Markets        $5,277  $5,329   (1.0) $15,748  $16,032   (1.8)        Wholesale            1,882   1,967   (4.3)   5,689    5,842   (2.6)        Other                  338     447  (24.4)   1,067    1,320  (19.2)      Verizon Business        Enterprise Business  3,655   3,686   (0.8)  10,804   10,862   (0.5)        Wholesale              851     836    1.8    2,531    2,530      *        International and        Other                  871     789   10.4    2,574    2,376    8.3      Eliminations            (716)   (682)   5.0   (2,116)  (2,082)   1.6   Total Operating Revenues 12,158  12,372   (1.7)  36,297   36,880   (1.6)    Operating Expenses (1)      Cost of services and       sales                 6,155   6,085    1.2   18,233   17,993    1.3      Selling, general &       administrative       expense               2,689   2,922   (8.0)   8,193    8,943   (8.4)      Depreciation and       amortization expense  2,268   2,230    1.7    6,722    6,639    1.3   Total Operating Expenses 11,112  11,237   (1.1)  33,148   33,575   (1.3)    Operating Income         $1,046  $1,135   (7.8)  $3,149   $3,305   (4.7)   Operating Income Margin     8.6%    9.2%            8.7%     9.0%      Verizon Communications Inc.   Wireline - Selected Operating Statistics     Unaudited                                       9/30/08 9/30/07 % Change   Switched access lines in service (000) (2)   Residence                                        21,626  24,567   (12.0)   Business                                         15,192  15,850    (4.2)   Public                                              254     302   (15.9)   Total                                            37,072  40,719    (9.0)    Wholesale voice connections (000)                 2,466   2,938   (16.1)   Broadband connections (000)                       8,459   7,751     9.1                                                        (dollars in millions)                           3 Mos.   3 Mos.           9 Mos.  9 Mos.                            Ended   Ended    %        Ended   Ended     %   Unaudited               9/30/08 9/30/07 Change   9/30/08 9/30/07  Change   High capacity and    digital data    revenues (1)            $5,218  $4,554  14.6    $15,080 $13,088   15.2     Footnotes:   The segment financial results above are adjusted to exclude the effects of   special and non-recurring items. The company's chief decision makers   exclude these items in assessing business unit performance, primarily due   to their non-operational nature.    Intersegment transactions have not been eliminated.    (1) Certain reclassifications have been made, where appropriate, to   reflect comparable operating results.    (2) Prior period amounts adjusted to reflect current period reporting   methodologies.    *  Not meaningful      Verizon Communications Inc.   Verizon Wireless - Selected Financial Results                                                         (dollars in millions)                               3 Mos.  3 Mos.         9 Mos.   9 Mos.                              Ended   Ended     %    Ended    Ended     %   Unaudited                  9/30/08 9/30/07 Change 9/30/08  9/30/07 Change   Revenues     Service revenues         $10,935  $9,749  12.2  $31,572  $28,142  12.2     Equipment and other        1,764   1,540  14.5    4,914    4,297  14.4   Total Revenues              12,699  11,289  12.5   36,486   32,439  12.5    Operating Expenses     Cost of services and      sales                     4,178   3,551  17.7   11,507    9,843  16.9     Selling, general &      administrative expense    3,689   3,385   9.0   10,806    9,956   8.5     Depreciation and      amortization expense      1,366   1,299   5.2    3,989    3,848   3.7   Total Operating Expenses     9,233   8,235  12.1   26,302   23,647  11.2    Operating Income            $3,466  $3,054  13.5  $10,184   $8,792  15.8   Operating Income Margin       27.3%   27.1%          27.9%    27.1%      Verizon Communications Inc.   Verizon Wireless - Selected Operating Statistics                                                                         %   Unaudited                                          9/30/08 9/30/07 Change    Total Customers (000)                               70,808  63,699  11.2   Retail Customers (000)                              68,807  61,840  11.3                                 3 Mos.  3 Mos.          9 Mos.  9 Mos.                               Ended   Ended     %     Ended   Ended    %   Unaudited                   9/30/08 9/30/07 Change 9/30/08 9/30/07 Change    Total Customer net adds in    period (1) (000)            2,127  1,645    29.3   5,101   4,647   9.8   Retail Customer net adds in    period (2) (000)            2,127  1,760    20.9   5,072   5,028   0.9    Total churn rate              1.33%  1.27%           1.21%   1.22%   Retail churn rate             1.32%  1.21%           1.20%   1.12%    Footnotes:   The segment financial results above are adjusted to exclude the effects of   special and non-recurring items. The company's chief decision makers   exclude these items in assessing business unit performance, primarily due   to their non-operational nature.    Intersegment transactions have not been eliminated.    Certain reclassifications have been made, where appropriate, to reflect   comparable operating results.    (1)Includes acquisitions and adjustments of 7,000 and 2,000 customers in   the first and third quarter of 2007, respectively; and 46,000 and 646,000   in the second and third quarter of 2008, respectively.    (2)Includes acquisitions and adjustments of 7,000 and 2,000 customers in   the first and third quarter of 2007, respectively; and 46,000 and 627,000   in the second and third quarter of 2008, respectively.  

Verizon Communications Inc.

CONTACT: Peter Thonis, +1-212-395-2355, peter.thonis@verizon.com, or BobVarettoni, +1-908-559-6388, robert.a.varettoni@verizon.com, both of VerizonCommunications

Web Site: http://www.verizon.com/http://www.verizon.com/investor

Company News On-Call: http://www.prnewswire.com/comp/094251.html




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