Verizon Communications Inc.

Condensed Consolidated Statements of Income - As Adjusted

(dollars in millions, except per share amounts)

Unaudited

3 Mos. Ended 12/31/10

3 Mos. Ended 12/31/09

% Change

12 Mos. Ended 12/31/10

12 Mos. Ended 12/31/09

% Change

Operating Revenues Operating Expenses Cost of services and sales Selling, general & administrative expense Depreciation and amortization expense Total Operating Expenses Operating Income Equity in earnings of unconsolidated businesses Other income and (expense), net Interest expense Income Before Provision for Income Taxes Provision for income taxes Net Income

$

26,395

$

27,091

(2.6)

$

106,565

$

107,808

(1.2)

10,610 5,291 4,083 19,984 6,411 113 43 (567) 6,000 (1,352) 4,648 $ 2,009 2,639 4,648 $ $

12,585 7,311 4,242 24,138 2,953 131 13 (686) 2,411 (40) 2,371 1,754 617 2,371

(15.7) (27.6) (3.7) (17.2) * (13.7) * (17.3) * * 96.0 14.5 * 96.0

44,149 31,366 16,405 91,920 14,645 508 54 (2,523) 12,684 (2,467) 10,217 $ 7,668 2,549 10,217 $ $

44,579 30,717 16,534 91,830 15,978 553 91 (3,102) 13,520 (1,919) 11,601 6,707 4,894 11,601

(1.0) 2.1 (0.8) 0.1 (8.3) (8.1) (40.7) (18.7) (6.2) 28.6 (11.9) 14.3 (47.9) (11.9)

$ $ $

$ $ $

Net income attributable to noncontrolling interest Net income attributable to Verizon
Net Income Basic Earnings per Common Share Net income attributable to Verizon Weighted average number of common shares (in millions) Diluted Earnings per Common Share Net income attributable to Verizon Weighted average number of common shares-assuming dilution (in millions)
(1)

$

.93 2,829

$

.22 2,841

*

$

.90 2,830

$

1.72 2,841

(47.7)

$

.93

$

.22

*

$

.90

$

1.72

(47.7)

2,831

2,841

2,833

2,841

Footnotes:
(1) Diluted Earnings per Share includes the dilutive effect of shares issuable under our stock-based compensation plans, which represents the only potential dilution. Certain reclassifications have been made, where appropriate, to reflect comparable operating results. * Not meaningful

051 32.136 55.262 $ 7.426 5.922 4.902) $ 7. Certain reclassifications have been made.761 84.702 7.339 226.247 21.985 3.274) (38) 929 (484) (934) (2.368 1.343 86.781 1.205 15. net Inventories Prepaid expenses and other Total current assets Plant.799) (4.Verizon Communications Inc.220 22.704) (6.912 220.164 22.267) 200 48. Condensed Consolidated Balance Sheets .769 (6.108 7. net Other assets Total Assets Liabilities and Equity Current liabilities Debt maturing within one year Accounts payable and accrued liabilities Other Total current liabilities Long-term debt Employee benefit obligations Deferred income taxes Other liabilities Equity Common stock Contributed capital Reinvested earnings Accumulated other comprehensive income (loss) Common stock in treasury.372) (5.497 72. .049 (5.818 6.186) (2.223 6.944 87.573 1.088) (13.814) (4.461 (9.907 $ $ 4.131 2. at cost Deferred compensation .353 30.902) $ $ $ The unaudited condensed consolidated balance sheets are based on preliminary information.005 $ $ 2.907 (2.190 6.745 229. property and equipment Less accumulated depreciation Investments in unconsolidated businesses Wireless licenses Goodwill Other intangible assets.996 21.260 (1.000) 89 42.009 490 12.764 8.758 91.027) 603 (18.348 211.535 72.659 58 (792) (295) (3.252 28.005 297 40.143 226.421 (267) 111 5.628 (503) 297 37.067 22.988 5.830 5.708 29.472 6.458) 3.635 220. where appropriate.765 $ 337 479 645 1.582 2.743 137.668 548 11.597 45.employee stock ownership plans and other Noncontrolling interest Total equity Total Liabilities and Equity $ $ 6.655 123.892) 2.As Adjusted (dollars in millions) Unaudited 12/31/10 12/31/09 $ Change Assets Current assets Cash and cash equivalents Short-term investments Accounts receivable.711 3.622 19. to reflect comparable operating results.542 15.

988 3.217 $ 11.040 (19.432 (7.405 3. end of period $ 10.958) 84 (410) (23.009 6. net Net cash provided by operating activities Cash Flows From Investing Activities Capital expenditures (including capitalized software) Acquisitions of licenses. Condensed Consolidated Statements of Cash Flows .363 16.520 2.271) (1.088) (13.040) 11. net of dividends received Changes in current assets and liabilities.458) (1.872) (5.668 12.594 (87) 661 8.973 (16.511) (986) 31.Verizon Communications Inc. net of effects from acquisition/disposition of businesses Other.650) 4. beginning of period Cash and cash equivalents.782 2. net Net cash used in investing activities Cash Flows From Financing Activities Proceeds from long-term borrowings Repayments of long-term borrowings and capital lease obligations Decrease in short-term obligations. excluding current maturities Dividends paid Proceeds from access line spin-off Other.357 12.102 (8.864) (16.083 (224) 2.601 $ (1.124 555 (141) 3.093 1.964 2.136) (1.233 1.260) (1.140 (60) (387) 2. where appropriate. net Net cash used in financing activities Increase (decrease) in cash and cash equivalents Cash and cash equivalents.083 (2.594 (3) 251 (15. Ended 12/31/09 $ Change Cash Flows From Operating Activities Net Income Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization expense Employee retirement benefits Deferred income taxes Provision for uncollectible accounts Equity in earnings of unconsolidated businesses.713 (944) 1.438) 2.024 1.659 $ $ $ Certain reclassifications have been made.As Adjusted (dollars in millions) Unaudited 12 Mos. net of cash acquired Proceeds from dispositions Net change in short-term investments Other.384) 16.097) (5.652) (5. .773) 9.534 2.306 389 (2. Ended 12/31/10 12 Mos.156) 414 4.007) (7.659 2.390 (129) 1.009 (12. investments and businesses.054) (16.246 2 202 (1.773) 4. to reflect comparable operating results.930) 33.412) 3.

9250 $ 1.400 $ 60.458 $ $ 7.233 2.438 7.827 194.836 222. Ended 12/31/10 12 Mos.4750 $ 1. which excludes noncontrolling interests.64 2. Selected Financial and Operating Statistics .892 828 16.59 2.927 Common shares outstanding (in millions) end of period Total employees (dollars in millions. Ended 12/31/09 Capital expenditures (including capitalized software) Domestic Wireless Wireline Other Total $ $ 2.714 $ $ 2.278 257 4. except per share amounts) Unaudited 3 Mos.553 $ $ 8. Ended 12/31/09 12 Mos.8% $ 13. end of period Book value per common share (1) 57.4875 $ 0. Ended 12/31/10 3 Mos.8700 Footnote: (1) Calculations are based on the equity position attributable to Verizon.269 751 16.171 310 4.Verizon Communications Inc.1% 14.As Adjusted As of Unaudited (1) 12/31/10 12/31/09 Debt to debt and Verizon's equity ratio.872 Cash dividends declared per common share $ 0. .018 2.152 8.

955 16.161 1.40% (55.1% $ 5.279 60.245 18.5) 4.157 1.445 5.683 18.9 (6.9 18.092 15.369 1.183 2.6 2.046 8.535 89.309 7.407 $ 52. Ended 12/31/09 % Change 12 Mos.9 $ 19. Ended 12/31/10 12 Mos.839 1.33% 1.4) (54.3 12.656 4. as the Company's chief operating decision maker excludes these items in assessing business unit performance.193 4.796 11. Ended 12/31/09 % Change 12 Mos.1) 5. Ended 12/31/09 % Change Revenues Service revenues Equipment and other Total Revenues Operating Expenses Cost of services and sales Selling.4) 8.638 27. Ended 12/31/09 % Change 12/31/10 Total Customer net adds in period (1) (1) Retail Customer net adds in period Total churn rate Retail churn rate 955 803 1.082 7.39% 1.030 43.135 87.977 1. where appropriate.148 $ 13.778 63.5 4. general & administrative expense Depreciation and amortization expense Total Operating Expenses Operating Income Operating Income Margin $ 14.724 29.325 6. . Certain reclassifications have been made.7 $ 55. Verizon Wireless – Selected Financial Results (dollars in millions) Unaudited 3 Mos.34% 1.1 4.629 7.687 16.817 4.4 (numbers in thousands) 3 Mos.41% (14.7 0.1 4. Ended Unaudited 3 Mos.7) Footnotes: (1) Customer net additions exclude acquisitions and adjustments.253 1.082 26.7 (6.41% 1.596 1.854 30.356 44.Verizon Communications Inc. Intersegment transactions have not been eliminated.5) 5. Ended 12/31/10 3 Mos.348 17.37% 2.38% 5.144 4.193 1.881 11.5% $ 19.5 Verizon Wireless – Selected Operating Statistics (numbers in thousands) Unaudited 12/31/10 12/31/09 % Change Total Customers Retail Customers 94.6) 4.8) (30. to reflect comparable operating results. Ended 12/31/10 12 Mos. The segment financial results and metrics above are adjusted to exclude the effects of non-recurring or non-operational items.6 2.7% (6.172 85.294 $ 4.275 7.6% (0.

581 0.047 3.5% 5.001 8.0) (6.7) (8. as the Company's chief operating decision maker excludes these items in assessing business unit performance.0) (51.451 0.947 8.155 1.288 333 10.728 2. Ended 12/31/09 % Change 12 Mos. to reflect comparable operating results. Ended 12/31/10 12 Mos.750 (9.160 3. * Not meaningful .5) (8.8 (1.3) (40.8) (2.755 111 26.085 $ 3.2 26.115 15.7% (0. Ended 12/31/10 3 Mos.9 1.2) 2.8) $ 16.Verizon Communications Inc.082 3.011 229 10.608 2.468 2.256 $ 15.618 13.323 8.392 4.662 12.459 768 $ 1.9% 22.6 (2.2) (2.540 165 28.286 2.913 2. where appropriate.8) 2.9) 5.238 40.135 12.514 42.574 11.472 15.693 9. general & administrative expense Depreciation and amortization expense Total Operating Expenses Operating Income Operating Income Margin $ 4.227 16. Ended 12/31/09 % Change Operating Revenues Mass Markets Global Enterprise Global Wholesale Other Total Operating Revenues Operating Expenses Cost of services and sales Selling.036 $ 253 $ 2.3) $ 22.618 9.3) (32.3 (12.393 909 41.3) (5.322 259 2.289 4.8 24.3 Footnotes: The segment financial results and metrics above are adjusted to exclude the effects of non-operational items.669 8.573 3.469 40. Certain reclassifications have been made.1) (31.9 * (8.267 2.4% (2.2) Wireline – Selected Operating Statistics (numbers in thousands) Unaudited 12/31/10 12/31/09 % Change Switched access lines in service Total Residence (includes Primary residence) Primary residence Business Public Total Broadband connections FiOS Internet Subscribers FiOS TV Subscribers 14.964 2.667 9. Intersegment transactions have not been eliminated.1) (8. Wireline – Selected Financial Results .878 1.161 10.372 8.126 10.As Adjusted (dollars in millions) Unaudited 3 Mos.0) (2.1) 1.

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