64 cents in diluted earnings per share (EPS), compared with 57 cents per share in 2Q 2011 – a 12.3 percent increase.

$9.3 billion in cash flow from operating activities, up 20.1 percent compared with 2Q 2011, leading to $7.8 billion in free cash flow (non-GAAP) in 1H 2012, more than doubling free cash flow generated in 1H 2011.

7.3 percent year-over-year increase in service revenues in 2Q 2012; 8.6 percent year-over-year increase in retail service revenues; data revenues up 18.5 percent year over year; 30.8 percent operating income margin and 49.0 percent segment EBITDA margin on service revenues (non-GAAP), both record highs.

1.2 million retail net customer additions, excluding acquisitions and adjustments, includes 888,000 retail postpaid net customers; low retail postpaid churn of 0.84 percent; 94.2 million total retail customers; 88.8 million total retail postpaid customers.

2.5 percent year-over-year increase in consumer revenues, the highest in several years; ARPU (average revenue per user) now tops $100 a month, with 65 percent of consumer revenues generated by FiOS.

134,000 FiOS Internet and 120,000 FiOS Video net additions, with continued increased sales penetration for both products; 5.1 million total FiOS Internet and 4.5 million total FiOS Video customers.

Service revenues in the quarter totaled $15.8 billion, up 7.3 percent year over year. Retail service revenues grew 8.6 percent year over year, to $15.2 billion.

Data revenues were $6.9 billion, up $1.1 billion – or 18.5 percent – year over year, and represent 43.6 percent of all service revenues. Total revenues were $18.6 billion, up 7.4 percent year over year.

Retail postpaid ARPU grew 3.7 percent over second-quarter 2011, to a record $56.13, the highest growth in three years. Retail postpaid data ARPU increased to $24.53, up 15.4 percent year over year. Retail service ARPU grew 3.4 percent year over year, to a record $54.29.

Wireless operating income margin was 30.8 percent and segment EBITDA margin on service revenues (non-GAAP) was 49.0 percent, both record highs.

Verizon Wireless added 1.2 million retail net customers in the second quarter, including 888,000 retail postpaid net customers. These additions exclude acquisitions and adjustments.

At the end of the second quarter, the company had 94.2 million retail customers, a 4.9 percent increase year over year, including 88.8 million retail postpaid customers.

At the end of the second quarter, smartphones constituted 50 percent of Verizon Wireless’ retail postpaid customer phone base, up from 47 percent at the end of first-quarter 2012.

Retail postpaid churn was 0.84 percent, the lowest in four years, and an improvement of 5 basis points year over year. Total retail churn was 1.11 percent, an improvement of 11 basis points year over year.

Verizon Wireless continued to roll out its 4G LTE mobile broadband network, the largest such network in the U.S. As of today, Verizon Wireless 4G LTE service is available to more than 230 million people in 337 markets across the U.S. – nearly 75 percent of the population.

The company introduced two new 4G LTE Internet devices in second-quarter 2012: the Verizon Jetpack 4G LTE Mobile Hotspot 890L and the Verizon Jetpack 4G LTE Mobile Hotspot MiFi 4620L. Earlier this month, Verizon Wireless launched the Droid Incredible 4G LTE by HTC and the Samsung Galaxy S III.

Verizon Wireless launched its ShareEverything Plan on June 28, offering customers unlimited voice minutes, unlimited text, video and picture messaging, and a shareable data allowance for up to 10 Verizon Wireless devices. In the second quarter, HomeFusion Broadband, a service that provides high-speed in-home Internet access, became available nationwide.

In late June, Verizon Wireless announced an agreement with a subsidiary of T-Mobile USA Inc. to exchange spectrum in the AWS band in specific markets to meet LTE capacity needs and enable LTE expansion. This agreement is contingent on the expected

summer closing of Verizon’s proposed spectrum transactions with SpectrumCo, Cox and Leap.

Second-quarter 2012 operating revenues were $9.9 billion, a decline of 3.1 percent compared with second-quarter 2011. Wireline operating income margin was 1.9 percent, compared with 1.6 percent in first-quarter 2012 and 3.1 percent in second-quarter 2011. Segment EBITDA margin (non-GAAP) was 23.1 percent in second-quarter 2012, compared with 22.6 percent in first-quarter 2012 and 23.8 percent in second-quarter 2011.

Consumer revenues grew 2.5 percent compared with second-quarter 2011, the highest increase in several years. Consumer ARPU for wireline services reached more than $100 for the first time, increasing to $100.26 in second-quarter 2012, up 8.5 percent compared with second-quarter 2011.

ARPU for FiOS customers increased to more than $149 in second-quarter 2012. FiOS services produced 65 percent of consumer wireline revenues in second-quarter 2012. Approximately 70 percent of FiOS consumer customers have purchased a “triple play” of phone, Internet and TV services.

Global enterprise revenues totaled $3.8 billion in the quarter, down 3.4 percent compared with second-quarter 2011. Sales of strategic services increased 4.4 percent compared with second-quarter 2011 and represented 52 percent of global enterprise revenues in second-quarter 2012. Strategic services include Terremark cloud services, security and IT solutions, and strategic networking.

Verizon added 134,000 net new FiOS Internet connections and 120,000 net new FiOS Video connections in second-quarter 2012. Verizon had a total of 5.1 million FiOS Internet and 4.5 million FiOS Video connections at the end of the quarter.

FiOS penetration (subscribers as a percentage of potential subscribers) continued to increase. FiOS Internet penetration was 36.6 percent at the end of second-quarter 2012, compared with 33.9 percent at the end of second-quarter 2011. In the same periods, FiOS Video penetration was 32.6 percent, compared with 29.9 percent. The FiOS network now passes more than 17 million premises.

Broadband connections totaled 8.8 million at the end of second-quarter 2012, a 2.6 percent year-over-year increase.

Verizon launched several network projects during the second quarter, including deployment of next-generation routing equipment on the global Private IP network to meet growth demands, improve scalability and support 10 gigabit customer access ports and 40G and 100G backbone trunk ports; and a long-term core network architecture project for a common multi-protocol label switching (MPLS) backbone platform that will support current and future service demands.

The company also launched its first major initiative to build additional control plane technology into its network infrastructure. This will allow Verizon to deliver on the promise of cloud-based and mobility-enabled industry solutions, as well as enable rapid and automated recovery of complex optical mesh networks.

Affirmative Insurance; Lane Bryant and Catherine Shops; Lifetouch; NetApp; Shaw Industries Group Inc., a subsidiary of Berkshire Hathaway Inc.; Royal Caribbean Cruises Ltd.; the Commonwealth of Pennsylvania; and Arlington County, Va., were among the

companies and government agencies completing agreements with Verizon for a wide range of strategic services to advance their operations.

Verizon extended the reach of the Terremark global cloud platform by deploying additional nodes in its London and Denver data centers; expanding its Sao Paulo, Brazil, data center; and launching a new Private Edition of its flagship Enterprise Cloud service.

Verizon strengthened its platform capabilities with a new solution that provides access to its global Private IP network service through Verizon’s 4G LTE wireless network.

Unaudited

Operating Revenues

Operating Expenses

Cost of services and sales

Selling, general and 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

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 ⁽¹⁾

Net income attributable to Verizon

Weighted average number of common
shares-assuming dilution (in millions)

Unaudited

Assets

Current assets

Cash and cash equivalents

Short-term investments

Accounts receivable, net

Inventories

Prepaid expenses and other

Total current assets

Plant, property and equipment

Less accumulated depreciation

Investments in unconsolidated businesses

Wireless licenses

Goodwill

Other intangible assets, 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

Common stock in treasury, at cost

Deferred compensation - employee stock ownership plans and other

Noncontrolling interest

Total equity

Total Liabilities and Equity

Unaudited

Total debt (in millions)

Net debt (in millions)

Net debt / Adjusted EBITDA ⁽¹⁾

Common shares outstanding end of period (in millions)

Total employees

Quarterly cash dividends declared per common share

Unaudited

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, net of dividends received

Changes in current assets and liabilities, net of effects from
acquisition/disposition of businesses

Other, net

Net cash provided by operating activities

Cash Flows From Investing Activities

Capital expenditures (including capitalized software)

Acquisitions of licenses, investments and businesses, net of cash acquired

Net change in short-term investments

Other, 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

Increase (decrease) in short-term obligations, excluding current maturities

Dividends paid

Proceeds from sale of common stock

Special distribution to noncontrolling interest

Other, net

Net cash used in financing activities

Decrease in cash and cash equivalents

Cash and cash equivalents, beginning of period

Cash and cash equivalents, end of period

Unaudited

Operating Revenues

Retail service

Other service

Service

Equipment

Other

Total Operating Revenues

Operating Expenses

Cost of services and sales

Selling, general and administrative expense

Depreciation and amortization expense

Total Operating Expenses

Operating Income

Operating Income Margin

Segment EBITDA

Segment EBITDA Service Margin

Unaudited

Connections (‘000)

Retail postpaid

Retail prepaid

Retail

Unaudited

Net Add Detail (‘000) ⁽¹⁾

Retail postpaid

Retail prepaid

Retail

Churn Detail

Retail postpaid

Retail

Revenue and ARPU Statistics

Total data revenues (in millions)

Retail postpaid data ARPU

Total data as a % of service revenues

Retail service ARPU

Retail postpaid ARPU

Retail Postpaid Connection Statistics

Total Smartphone postpaid % of phones sold

Total Smartphone postpaid phone base

Total Internet postpaid base

Other Operating Statistics

Capital expenditures (in millions)

Unaudited

Operating Revenues

Consumer retail

Small business

Mass Markets

Strategic services

Core

Global Enterprise

Global Wholesale

Other

Total Operating Revenues

Operating Expenses

Cost of services and sales

Selling, general and administrative expense

Depreciation and amortization expense

Total Operating Expenses