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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

343 86.902) $ 7.426 5. where appropriate.702 7.743 137.944 87.902) $ $ $ The unaudited condensed consolidated balance sheets are based on preliminary information. net Inventories Prepaid expenses and other Total current assets Plant.668 548 11.497 72.247 21.005 297 40.988 5.655 123.131 2.339 226.205 15.223 6.368 1. Condensed Consolidated Balance Sheets .892) 2.907 $ $ 4. Certain reclassifications have been made.088) (13.005 $ $ 2.027) 603 (18.769 (6.458) 3.051 32.912 220.186) (2.049 (5. 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.818 6.260 (1.582 2.622 19.164 22.830 5.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.659 58 (792) (295) (3.704) (6.421 (267) 111 5. property and equipment Less accumulated depreciation Investments in unconsolidated businesses Wireless licenses Goodwill Other intangible assets.252 28.907 (2.985 3.708 29.758 91.922 4.472 6. at cost Deferred compensation .628 (503) 297 37.635 220.461 (9.996 21.814) (4.573 1.220 22.764 8.143 226.190 6.745 229.267) 200 48.262 $ 7.000) 89 42.274) (38) 929 (484) (934) (2.765 $ 337 479 645 1. .781 1.348 211.employee stock ownership plans and other Noncontrolling interest Total equity Total Liabilities and Equity $ $ 6.108 7.136 55. to reflect comparable operating results.799) (4.Verizon Communications Inc.009 490 12.372) (5.067 22.535 72.542 15.353 30.761 84.597 45.711 3.

124 555 (141) 3. where appropriate.271) (1.156) 414 4.233 1.650) 4. .438) 2. investments and businesses. end of period $ 10.246 2 202 (1.872) (5.040) 11.668 12.357 12.864) (16.773) 9.988 3.534 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.024 1.306 389 (2. Ended 12/31/10 12 Mos.083 (2. to reflect comparable operating results.412) 3. net of effects from acquisition/disposition of businesses Other.520 2.093 1. net of dividends received Changes in current assets and liabilities.432 (7.Verizon Communications Inc.009 (12.594 (3) 251 (15.652) (5.458) (1.958) 84 (410) (23.930) 33.384) 16.405 3.007) (7.601 $ (1.594 (87) 661 8. excluding current maturities Dividends paid Proceeds from access line spin-off Other.773) 4.713 (944) 1. net of cash acquired Proceeds from dispositions Net change in short-term investments Other. beginning of period Cash and cash equivalents.083 (224) 2.217 $ 11.040 (19.363 16.054) (16. Condensed Consolidated Statements of Cash Flows .009 6.140 (60) (387) 2.136) (1.659 $ $ $ Certain reclassifications have been made.102 (8.390 (129) 1. net Net cash used in financing activities Increase (decrease) in cash and cash equivalents Cash and cash equivalents.097) (5.973 (16.964 2. net Net cash provided by operating activities Cash Flows From Investing Activities Capital expenditures (including capitalized software) Acquisitions of licenses. 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.659 2.511) (986) 31.260) (1.As Adjusted (dollars in millions) Unaudited 12 Mos.088) (13.782 2.

400 $ 60. Ended 12/31/10 3 Mos.872 Cash dividends declared per common share $ 0. .553 $ $ 8.233 2. except per share amounts) Unaudited 3 Mos.4750 $ 1.64 2.458 $ $ 7. Selected Financial and Operating Statistics .8% $ 13.438 7.827 194.59 2.152 8.9250 $ 1.018 2.1% 14.171 310 4.836 222.4875 $ 0. Ended 12/31/10 12 Mos.As Adjusted As of Unaudited (1) 12/31/10 12/31/09 Debt to debt and Verizon's equity ratio.892 828 16.269 751 16.Verizon Communications Inc. end of period Book value per common share (1) 57.8700 Footnote: (1) Calculations are based on the equity position attributable to Verizon.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 $ $ 2.278 257 4. Ended 12/31/09 12 Mos. which excludes noncontrolling interests.714 $ $ 2.

5) 4.881 11. Ended 12/31/09 % Change 12 Mos.193 1.37% 2.1 4.161 1.7) Footnotes: (1) Customer net additions exclude acquisitions and adjustments.193 4.082 7.854 30. Certain reclassifications have been made.148 $ 13.309 7.33% 1. The segment financial results and metrics above are adjusted to exclude the effects of non-recurring or non-operational items.348 17.356 44. Ended 12/31/10 12 Mos.7 0. where appropriate.5 Verizon Wireless – Selected Operating Statistics (numbers in thousands) Unaudited 12/31/10 12/31/09 % Change Total Customers Retail Customers 94.172 85.596 1.40% (55.8) (30.Verizon Communications Inc.4 (numbers in thousands) 3 Mos. 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 1.183 2. Intersegment transactions have not been eliminated.724 29.34% 1. to reflect comparable operating results.407 $ 52.1% $ 5.683 18.977 1.030 43.5% $ 19.955 16.3 12.9 (6.4) (54.687 16.5) 5.817 4.253 1. Verizon Wireless – Selected Financial Results (dollars in millions) Unaudited 3 Mos.6 2.6 2.38% 5.144 4.7 $ 55. Ended 12/31/09 % Change 12 Mos.39% 1.245 18.7% (6.046 8.778 63.1 4. .082 26.638 27. as the Company's chief operating decision maker excludes these items in assessing business unit performance.796 11.839 1.9 $ 19.325 6.9 18. Ended Unaudited 3 Mos.092 15.369 1. general & administrative expense Depreciation and amortization expense Total Operating Expenses Operating Income Operating Income Margin $ 14.629 7.445 5.6% (0. Ended 12/31/10 12 Mos.535 89.656 4.41% (14.1) 5.6) 4.279 60.5 4.4) 8.157 1. Ended 12/31/09 % Change Revenues Service revenues Equipment and other Total Revenues Operating Expenses Cost of services and sales Selling.7 (6.275 7.41% 1. Ended 12/31/10 3 Mos.294 $ 4.135 87.

011 229 10.728 2.256 $ 15.618 13.3) $ 22.468 2.451 0.155 1.0) (51.1) (8.289 4.085 $ 3.323 8.2) (2.372 8.750 (9.693 9.9 * (8.160 3.514 42.964 2.9) 5.001 8.288 333 10.Verizon Communications Inc.036 $ 253 $ 2.573 3.8) (2.5% 5.9 1.115 15.393 909 41.662 12.267 2.5) (8.3) (32.3) (40. Wireline – Selected Financial Results .7) (8. general & administrative expense Depreciation and amortization expense Total Operating Expenses Operating Income Operating Income Margin $ 4.4% (2. Intersegment transactions have not been eliminated.135 12.913 2.238 40.8) $ 16.8 24.2 26.As Adjusted (dollars in millions) Unaudited 3 Mos.047 3.878 1.082 3. as the Company's chief operating decision maker excludes these items in assessing business unit performance. Certain reclassifications have been made.667 9.322 259 2.947 8.540 165 28.161 10.2) 2.0) (2.3) (5.3 Footnotes: The segment financial results and metrics above are adjusted to exclude the effects of non-operational items.669 8.459 768 $ 1. to reflect comparable operating results.6 (2.608 2.392 4.2) 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 14.7% (0.8 (1.9% 22.8) 2. Ended 12/31/10 12 Mos.227 16.469 40. where appropriate.1) (31.286 2.472 15.126 10.1) 1. 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.755 111 26. Ended 12/31/09 % Change 12 Mos.581 0.3 (12. * Not meaningful .618 9.574 11. Ended 12/31/10 3 Mos.0) (6.