VERIZON COMMUNICATIONS INC - FORM 8-K - EX-99 - EXHIBIT 99

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8-K - FORM 8-K - VERIZON COMMUNICATIONS INC	d569459d8k.htm

Exhibit 99

NEWS RELEASE




FOR IMMEDIATE RELEASE July 18, 2013		Media contacts: Jim Gerace 212-395-2355 james.gerace@verizon.com Bob Varettoni 908-559-6388 robert.a.varettoni@verizon.com

Verizon Reports Double-Digit Earnings Growth in 2Q 2013

Strategic Investments in 4G LTE, FiOS and Global Networks Continue to

Drive Strong Growth in Revenues, Earnings and Cash Flow

2Q 2013 HIGHLIGHTS

Consolidated

•

78 cents in earnings per share (EPS), including a non-operational gain of 5 cents per share related to pensions, compared with 64 cents per share in 2Q 2012.

•

73 cents in adjusted EPS (non-GAAP), a 14.1 percent increase compared with 2Q 2012.

Wireless

•

8.3 percent year-over-year increase in service revenues in 2Q 2013; 7.8 percent increase in retail service revenues; 32.4 percent operating income margin and 49.8 percent segment EBITDA margin on service revenues (non-GAAP).

•

941,000 retail postpaid net additions, up 6 percent year over year; low retail postpaid churn of 0.93 percent; 100.1 million total retail connections, 94.3 million total retail postpaid connections.

•

4G LTE service now available to 301 million people in 500 markets across the U.S.

Verizon News Release, page 2

Wireline

•

4.7 percent year-over-year increase in consumer revenues; consumer ARPU (average revenue per user) up 9.4 percent year over year, to $109.67.

•

14.7 percent year-over-year increase in FiOS revenues; 161,000 FiOS Internet and 140,000 FiOS Video net additions, including the addition of the 5 millionth FiOS Video customer, with continued increased sales penetration for both services.

•

4.8 percent year-over-year increase in revenues for global enterprise strategic services.

NEW YORK – Verizon Communications Inc. (NYSE, Nasdaq: VZ) today reported year-over-year double-digit percentage growth in operating income and earnings per share, as second-quarter 2013 results showed continued strong operating performance and customer demand for Verizon Wireless, FiOS and strategic enterprise services.

Verizon reported 78 cents in EPS in second-quarter 2013, compared with 64 cents per share in second-quarter 2012. Second-quarter 2013 results include a non-cash, non-operational gain of 5 cents per share for an interim actuarial remeasurement associated with one of Verizon’s pension plans.

Adjusted second-quarter 2013 earnings of 73 cents per share increased 14.1 percent, compared with 64 cents per share in second-quarter 2012, when there were no adjustments.

“Verizon’s consistent strategic investments in wireless, FiOS and global networks drove strong financial performance in the first half of 2013,” said Lowell McAdam, Verizon chairman and CEO. “Having now posted double-digit earnings growth in five of the last six quarters, we are focused on continuing to provide the best portfolio of products on the most reliable networks; capturing incremental revenue growth in broadband, video and cloud services; and sustaining our earnings and cash-flow momentum.”

Verizon News Release, page 3

Consolidated Results Reflect Continued Profitable Growth

In second-quarter 2013, Verizon’s consolidated results were highlighted by continued strong operating performance and profitable growth based on operating efficiencies and customer demand.

Consolidated Highlights

•

Total operating revenues in second-quarter 2013 were $29.8 billion, a 4.3 percent increase compared with second-quarter 2012.

•

Operating income increased 16.0 percent, to $6.6 billion in second-quarter 2013, compared with $5.7 billion in second-quarter 2012. Operating income margin was 22.0 percent in second-quarter 2013, compared with 19.8 percent in second-quarter 2012.

•

Consolidated EBITDA (non-GAAP, earnings before interest, taxes, depreciation and amortization) grew 9.5 percent year over year, totaling $10.7 billion in second-quarter 2013. EBITDA margin (non-GAAP) expanded to 35.9 percent in second-quarter 2013, up 170 basis points year over year.

•

Cash flow from operating activities totaled $17.1 billion in first-half 2013, compared with $15.3 billion in first-half 2012. Capital expenditures in first-half 2013 were $7.6 billion, compared with $7.4 billion in first-half 2012. Free cash flow (non-GAAP, cash flow from operations less capital expenditures) in first-half 2013 totaled $9.5 billion, compared with $7.8 billion in first-half 2012.

Verizon is increasing its capital spending guidance from $16.2 billion to between $16.4 billion and $16.6 billion for full-year 2013, as the company anticipates higher demand for wireless data consumption and begins deployment of AWS (advanced wireless services) spectrum in second-half 2013.

Verizon Wireless Delivers Another Strong Quarter

In second-quarter 2013, Verizon Wireless delivered solid growth in retail postpaid net additions and revenues; an increase in smartphone penetration; and a strong segment EBITDA margin on service revenues (non-GAAP).

Verizon News Release, page 4

Wireless Financial Highlights

•

Total revenues were $20.0 billion in second-quarter 2013, up 7.5 percent year over year. Service revenues in the quarter totaled $17.1 billion, up 8.3 percent year over year. Retail service revenues grew 7.8 percent year over year, to $16.4 billion.

•

Retail postpaid ARPA (average revenue per account) increased 6.4 percent over second-quarter 2012, to $152.50 per month.

•

In second-quarter 2013, wireless operating income margin was 32.4 percent, compared with 30.8 percent in second-quarter 2012. Segment EBITDA margin on service revenues was 49.8 percent, up 80 basis points over second-quarter 2012.

Wireless Operational Highlights

•

Verizon Wireless added 941,000 retail postpaid net connections, out of a total 1.0 million net retail connections, in the second quarter. These additions exclude acquisitions and adjustments. Verizon expects to continue to see increases in quarterly sequential net additions for retail postpaid connections in the second half of 2013.

•

At the end of the second quarter, the company had 100.1 million retail connections, a 6.3 percent increase year over year -- including 94.3 million retail postpaid connections.

•

With more than 36 percent of retail postpaid accounts now on a Share Everything Plan, which allows customers to share data among multiple devices, Verizon Wireless had 35 million retail postpaid accounts at the end of the second quarter. This is an average of 2.7 connections per account.

•

At the end of the second quarter, smartphones accounted for more than 64 percent of the Verizon Wireless retail postpaid customer phone base, up from 61 percent at the end of first-quarter 2013.

•

Retail postpaid churn was 0.93 percent in the second quarter, up 9 basis points year over year. Retail churn was 1.23 percent in the second quarter, up 12 basis points year over year.

•

As of the end of June, Verizon Wireless has substantially completed deployment of its 4G LTE network, covering more than 99 percent of its current 3G network footprint. In the second quarter, the company activated 4G LTE data service in Alaska, resulting in Verizon Wireless 4G LTE service being available in all 50 states. The Verizon Wireless 4G LTE network is now available in 500 markets to more than 95 percent of the U.S. population and covers about 301 million people, including those in areas served by the company’s LTE in Rural America partners.

•

The company continued to enhance its 4G LTE smartphone device lineup. In the second quarter, Verizon Wireless launched the Pantech Perception, the Nokia Lumia 928, the Casio G’zOne Commando 4G LTE, the Blackberry Q10 and the Samsung Galaxy S4. The company has also announced the HTC One would be available later this summer.

Verizon News Release, page 5

Wireline Reports Another Quarter of Strong FiOS Customer and Revenue Growth

Verizon’s Wireline segment reported another quarter of FiOS customer, market share and revenue growth, leading to continued growth in consumer revenues. In enterprise and wholesale, sales of global enterprise strategic services continued to increase and constitute a larger percentage of the revenue base.

Wireline Financial Highlights

•

Consumer revenues were $3.6 billion, an increase of 4.7 percent compared with second-quarter 2012. Consumer ARPU for wireline services increased to $109.67 in second-quarter 2013, up 9.4 percent compared with second-quarter 2012.

•

FiOS revenues grew 14.7 percent, to $2.7 billion in second-quarter 2013, compared with $2.4 billion in second-quarter 2012. ARPU for FiOS customers continued to be more than $150 in second-quarter 2013.

•

Sales of strategic services to global enterprise customers increased 4.8 percent compared with second-quarter 2012 and represented 57 percent of total enterprise revenues, compared with 52 percent in second-quarter 2012. Strategic services include cloud and data center services, security and IT solutions, advanced communications, strategic networking and telematics services.

Wireline Operational Highlights

•

Verizon added 161,000 net new FiOS Internet connections and 140,000 net new FiOS Video connections in second-quarter 2013. Verizon had a total of 5.8 million FiOS Internet and 5.0 million FiOS Video connections at the end of the quarter, representing year-over-year increases of 12.2 percent and 12.6 percent, respectively.

•

FiOS penetration (subscribers as a percentage of potential subscribers) continued to increase. FiOS Internet penetration was 38.6 percent at the end of second-quarter 2013, compared with 36.6 percent at the end of second-quarter 2012. In the same periods, FiOS Video penetration was 34.5 percent, compared with 32.6 percent. The FiOS network passed 18.0 million premises by the end of second-quarter 2013.

•

By the end of second-quarter 2013, 35 percent of FiOS Internet customers subscribed to FiOS Quantum, which provides speeds ranging from 50 to 300 megabits per second.

•

Broadband connections totaled 8.9 million at the end of second-quarter 2013, a 1.9 percent year-over-year increase. Overall, net broadband customers increased 45,000 in the second quarter, as FiOS Internet net customer additions more than offset a decline in subscribers for DSL-based High Speed Internet services.

Verizon News Release, page 6

•

Verizon has been replacing high-maintenance portions of its residential copper network with fiber optics to provide enhanced services and to reduce ongoing repair costs. In first-half 2013, Verizon migrated 169,000 homes to fiber, toward a target of 300,000 migrations within FiOS markets in 2013.

•

Verizon Enterprise Solutions completed agreements with and began deploying innovative business technology solutions for a variety of corporations and organizations around the globe in the quarter, including American Tower, the Australian Federal Police and its client agencies, d’Amico Societa di Navigazione, the District of Columbia, Kohn Pedersen and Fox Associates, Marathon Petroleum Corporation, Panviva and Veolia Environnement.

NOTE: See the accompanying schedules and www.verizon.com/investor for reconciliations to generally accepted accounting principles (GAAP) for non-GAAP financial measures cited in this document.

Verizon Communications Inc. (NYSE, Nasdaq: VZ), headquartered in New York, is a global leader in delivering broadband and other wireless and wireline communications services to consumer, business, government and wholesale customers. Verizon Wireless operates America’s most reliable wireless network, with more than 100 million retail connections nationwide. Verizon also provides converged communications, information and entertainment services over America’s most advanced fiber-optic network, and delivers integrated business solutions to customers in more than 150 countries, including all of the Fortune 500. A Dow 30 company with nearly $116 billion in 2012 revenues, Verizon employs a diverse workforce of 180,900. For more information, visit www.verizon.com.

####

VERIZON’S ONLINE NEWS CENTER: Verizon news releases, executive speeches and biographies, media contacts and other information are available at Verizon’s online News Center at newscenter.verizon.com. The news releases are available through an RSS feed. To subscribe, visit newscenter.verizon.com/corporate/feeds.

NOTE: This presentation 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: adverse conditions in the U.S. and international economies; competition in our markets; material changes in available technology or technology substitution; disruption of our key suppliers’ provisioning of products or services; changes in the regulatory environments in which we operate, including any increase in restrictions on our ability to operate our networks; breaches of network or information technology security, natural disasters, terrorist attacks or significant litigation and any resulting financial impact not covered by insurance; an adverse change in the ratings afforded our debt securities by nationally accredited ratings organizations or adverse conditions in the credit markets affecting the cost, including interest rates, and/or availability of financing; 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 affect earnings; material adverse changes in labor matters, including labor negotiations, and any resulting financial and/or operational impact; significant increases in benefit plan costs or lower investment returns on plan assets; and the inability to implement our business strategies.

Verizon Communications Inc.

Condensed Consolidated Statements of Income

(dollars in millions, except per share amounts)


Unaudited	3 Mos. Ended 6/30/13			3 Mos. Ended 6/30/12			% Change			6 Mos. Ended 6/30/13			6 Mos. Ended 6/30/12			% Change

Operating Revenues	$	29,786		$	28,552			4.3		$	59,206		$	56,794			4.2

Operating Expenses
Cost of services and sales		11,033			10,896			1.3			21,965			22,215			(1.1	)
Selling, general and administrative expense		8,047			7,877			2.2			16,195			15,577			4.0
Depreciation and amortization expense		4,151			4,128			0.6			8,269			8,156			1.4

Total Operating Expenses		23,231			22,901			1.4			46,429			45,948			1.0


Operating Income		6,555			5,651			16.0			12,777			10,846			17.8
Equity in earnings of unconsolidated businesses		120			72			66.7			115			175			(34.3	)
Other income, net		25			34			(26.5	)		64			53			20.8
Interest expense		(514	)		(679	)		(24.3	)		(1,051	)		(1,364	)		(22.9	)

Income Before Provision for Income Taxes		6,186			5,078			21.8			11,905			9,710			22.6
Provision for income taxes		(988	)		(793	)		24.6			(1,852	)		(1,519	)		21.9

Net Income	$	5,198		$	4,285			21.3		$	10,053		$	8,191			22.7


Net income attributable to noncontrolling interests	$	2,952		$	2,460			20.0		$	5,855		$	4,680			25.1
Net income attributable to Verizon		2,246			1,825			23.1			4,198			3,511			19.6

Net Income	$	5,198		$	4,285			21.3		$	10,053		$	8,191			22.7


Basic Earnings per Common Share
Net income attributable to Verizon	$	.78		$	.64			21.9		$	1.46		$	1.23			18.7

Weighted average number of common shares (in millions)		2,865			2,849						2,866			2,846

Diluted Earnings per Common Share ⁽¹⁾
Net income attributable to Verizon	$	.78		$	.64			21.9		$	1.46		$	1.23			18.7

Weighted average number of common shares-assuming dilution (in millions)		2,872			2,858						2,873			2,854

Footnotes:

(1)	Diluted Earnings per Common 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.

Verizon Communications Inc.

Condensed Consolidated Balance Sheets

(dollars in millions)


Unaudited	6/30/13			12/31/12			$ Change

Assets
Current assets
Cash and cash equivalents		$ 1,788			$ 3,093			$ (1,305	)
Short-term investments		618			470			148
Accounts receivable, net		12,216			12,576			(360	)
Inventories		1,040			1,075			(35	)
Prepaid expenses and other		6,295			4,021			2,274

Total current assets		21,957			21,235			722

Plant, property and equipment		215,224			209,575			5,649
Less accumulated depreciation		126,892			120,933			5,959

		88,332			88,642			(310	)

Investments in unconsolidated businesses		3,319			3,401			(82	)
Wireless licenses		75,825			77,744			(1,919	)
Goodwill		24,336			24,139			197
Other intangible assets, net		5,776			5,933			(157	)
Other assets		3,801			4,128			(327	)

Total Assets		$ 223,346			$ 225,222			$ (1,876	)


Liabilities and Equity
Current liabilities
Debt maturing within one year		$ 7,961			$ 4,369			$ 3,592
Accounts payable and accrued liabilities		14,671			16,182			(1,511	)
Other		6,559			6,405			154

Total current liabilities		29,191			26,956			2,235

Long-term debt		41,791			47,618			(5,827	)
Employee benefit obligations		33,835			34,346			(511	)
Deferred income taxes		25,696			24,677			1,019
Other liabilities		5,677			6,092			(415	)

Equity
Common stock		297			297			—
Contributed capital		37,895			37,990			(95	)
Accumulated deficit		(2,483	)		(3,734	)		1,251
Accumulated other comprehensive income		1,994			2,235			(241	)
Common stock in treasury, at cost		(3,974	)		(4,071	)		97
Deferred compensation - employee stock ownership plans and other		332			440			(108	)
Noncontrolling interests		53,095			52,376			719

Total equity		87,156			85,533			1,623

Total Liabilities and Equity		$ 223,346			$ 225,222			$ (1,876	)

Verizon – Selected Financial and Operating Statistics


Unaudited	6/30/13		12/31/12

Total debt (in millions)		$ 49,752		$ 51,987
Net debt (in millions)		$ 47,964		$ 48,894
Net debt / Adjusted EBITDA ⁽¹⁾		1.2x		1.3x
Common shares outstanding end of period (in millions)		2,862		2,859
Total employees		180,900		183,400
Quarterly cash dividends declared per common share		$ 0.5150		$ 0.5150

Footnotes:

(1)	Adjusted EBITDA excludes the effects of non-operational items.

The unaudited condensed consolidated balance sheets are based on preliminary information.

Verizon Communications Inc.

Condensed Consolidated Statements of Cash Flows

(dollars in millions)


Unaudited	6 Mos. Ended 6/30/13			6 Mos. Ended 6/30/12			$ Change

Cash Flows From Operating Activities
Net Income		$ 10,053			$ 8,191			$ 1,862
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization expense		8,269			8,156			113
Employee retirement benefits		354			751			(397	)
Deferred income taxes		1,812			1,237			575
Provision for uncollectible accounts		507			521			(14	)
Equity in earnings of unconsolidated businesses, net of dividends received		(95	)		(149	)		54
Changes in current assets and liabilities, net of effects from acquisition/disposition of businesses		(1,660	)		(1,136	)		(524	)
Other, net		(2,092	)		(2,300	)		208

Net cash provided by operating activities		17,148			15,271			1,877


Cash Flows From Investing Activities
Capital expenditures (including capitalized software)		(7,616	)		(7,430	)		(186	)
Acquisitions of investments and businesses, net of cash acquired		(76	)		(203	)		127
Acquisitions of wireless licenses, net		(264	)		(33	)		(231	)
Net change in short-term investments		(21	)		21			(42	)
Other, net		142			61			81

Net cash used in investing activities		(7,835	)		(7,584	)		(251	)


Cash Flows From Financing Activities
Proceeds from long-term borrowings		499			—			499
Repayments of long-term borrowings and capital lease obligations		(2,330	)		(1,891	)		(439	)
Decrease in short-term obligations, excluding current maturities		(432	)		(887	)		455
Dividends paid		(2,946	)		(2,587	)		(359	)
Proceeds from sale of common stock		74			210			(136	)
Purchase of common stock for treasury		(153	)		—			(153	)
Special distribution to noncontrolling interests		(3,150	)		(4,500	)		1,350
Other, net		(2,180	)		(1,393	)		(787	)

Net cash used in financing activities		(10,618	)		(11,048	)		430


Decrease in cash and cash equivalents		(1,305	)		(3,361	)		2,056
Cash and cash equivalents, beginning of period		3,093			13,362			(10,269	)

Cash and cash equivalents, end of period		$ 1,788			$ 10,001			$ (8,213	)

Verizon Communications Inc.

Wireless – Selected Financial Results

(dollars in millions)


Unaudited	3 Mos. Ended 6/30/13			3 Mos. Ended 6/30/12			% Change			6 Mos. Ended 6/30/13			6 Mos. Ended 6/30/12			% Change

Operating Revenues
Retail service		$ 16,422			$ 15,230			7.8			$ 32,591			$ 30,116			8.2
Other service		656			546			20.1			1,215			1,070			13.6

Service		17,078			15,776			8.3			33,806			31,186			8.4

Equipment		1,953			1,768			10.5			3,766			3,606			4.4
Other		945			1,033			(8.5	)		1,927			2,058			(6.4	)

Total Operating Revenues		19,976			18,577			7.5			39,499			36,850			7.2


Operating Expenses
Cost of services and sales		5,799			5,558			4.3			11,450			11,468			(0.2	)
Selling, general and administrative expense		5,666			5,295			7.0			11,114			10,523			5.6
Depreciation and amortization expense		2,047			2,011			1.8			4,053			3,929			3.2

Total Operating Expenses		13,512			12,864			5.0			26,617			25,920			2.7


Operating Income		$ 6,464			$ 5,713			13.1			$ 12,882			$ 10,930			17.9
Operating Income Margin		32.4	%		30.8	%					32.6	%		29.7	%

Segment EBITDA		$ 8,511			$ 7,724			10.2			$ 16,935			$ 14,859			14.0
Segment EBITDA Service Margin		49.8	%		49.0	%					50.1	%		47.6	%

Footnotes:

The segment financial results and metrics above are adjusted to exclude the effects of non-operational items, as the Company’s chief operating decision maker excludes these items in assessing business unit performance.

Intersegment transactions have not been eliminated.

Certain reclassifications have been made, where appropriate, to reflect comparable operating results.

Verizon Communications Inc.

Wireless – Selected Operating Statistics


Unaudited	6/30/13		6/30/12		% Change

Connections (‘000)
Retail postpaid		94,271		88,838		6.1
Retail prepaid		5,853		5,316		10.1

Retail		100,124		94,154		6.3


Unaudited	3 Mos. Ended 6/30/13			3 Mos. Ended 6/30/12			% Change			6 Mos. Ended 6/30/13			6 Mos. Ended 6/30/12			% Change

Net Add Detail (‘000)⁽¹⁾
Retail postpaid		941			888			6.0			1,618			1,389			16.5
Retail prepaid		97			290			(66.6	)		140			523			(73.2	)

Retail		1,038			1,178			(11.9	)		1,758			1,912			(8.1	)

Account Statistics
Retail Postpaid Accounts (‘000)⁽²⁾											34,958			34,646			0.9
Retail postpaid ARPA		$ 152.50			$ 143.32			6.4			$ 151.39			$ 141.95			6.7
Retail postpaid connections per account ⁽²⁾											2.70			2.56			5.5

Churn Detail
Retail postpaid		0.93	%		0.84	%					0.97	%		0.90	%
Retail		1.23	%		1.11	%					1.27	%		1.18	%

Retail Postpaid Connection Statistics
Total Smartphone postpaid % of phones activated		84.4	%		71.6	%					84.3	%		71.3	%
Total Smartphone postpaid phone base ⁽²⁾											64.4	%		49.7	%
Total Internet postpaid base ⁽²⁾											9.9	%		8.5	%

Other Operating Statistics
Capital expenditures (in millions)		$ 2,278			$ 2,048			11.2			$ 4,270			$ 3,933			8.6

Footnotes:

(1)	Connection net additions exclude acquisitions and adjustments.

(2)	Statistics presented as of end of period.

Intersegment transactions have not been eliminated.

Certain reclassifications have been made, where appropriate, to reflect comparable operating results.

Verizon Communications Inc.

Wireline – Selected Financial Results

(dollars in millions)


Unaudited	3 Mos. Ended 6/30/13			3 Mos. Ended 6/30/12			% Change			6 Mos. Ended 6/30/13			6 Mos. Ended 6/30/12			% Change

Operating Revenues
Consumer retail		$ 3,643			$ 3,478			4.7			$ 7,232			$ 6,919			4.5
Small business		648			667			(2.8	)		1,299			1,329			(2.3	)

Mass Markets		4,291			4,145			3.5			8,531			8,248			3.4

Strategic services		2,079			1,983			4.8			4,166			3,952			5.4
Core		1,557			1,837			(15.2	)		3,223			3,720			(13.4	)

Global Enterprise		3,636			3,820			(4.8	)		7,389			7,672			(3.7	)

Global Wholesale		1,686			1,827			(7.7	)		3,413			3,688			(7.5	)
Other		121			139			(12.9	)		231			268			(13.8	)

Total Operating Revenues		9,734			9,931			(2.0	)		19,564			19,876			(1.6	)


Operating Expenses
Cost of services and sales		5,407			5,500			(1.7	)		10,864			11,072			(1.9	)
Selling, general and administrative expense		2,168			2,141			1.3			4,433			4,267			3.9
Depreciation and amortization expense		2,085			2,102			(0.8	)		4,180			4,192			(0.3	)

Total Operating Expenses		9,660			9,743			(0.9	)		19,477			19,531			(0.3	)


Operating Income		$ 74			$ 188			(60.6	)		$ 87			$ 345			(74.8	)
Operating Income Margin		0.8	%		1.9	%					0.4	%		1.7	%

Segment EBITDA		$ 2,159			$ 2,290			(5.7	)		$ 4,267			$ 4,537			(6.0	)
Segment EBITDA Margin		22.2	%		23.1	%					21.8	%		22.8	%

Footnotes:

Intersegment transactions have not been eliminated.

Certain reclassifications have been made, where appropriate, to reflect comparable operating results.

Verizon Communications Inc.

Wireline – Selected Operating Statistics


Unaudited	6/30/13		6/30/12		% Change

Connections (‘000)
FiOS Video Subscribers		5,035		4,473		12.6
FiOS Internet Subscribers		5,773		5,144		12.2
FiOS Digital Voice residence connections		3,817		2,648		44.1

FiOS Digital connections		14,625		12,265		19.2

HSI		3,166		3,632		(12.8	)
Total Broadband connections		8,939		8,776		1.9
Primary residence switched access connections		7,200		8,843		(18.6	)
Primary residence connections		11,017		11,491		(4.1	)

Total retail residence voice connections		11,583		12,222		(5.2	)
Total voice connections		21,828		23,278		(6.2	)


Unaudited	3 Mos. Ended 6/30/13			3 Mos. Ended 6/30/12			% Change			6 Mos. Ended 6/30/13			6 Mos. Ended 6/30/12			% Change

Net Add Detail (‘000)
FiOS Video Subscribers		140			120			16.7			309			300			3.0
FiOS Internet Subscribers		161			134			20.1			349			327			6.7
FiOS Digital Voice residence connections		286			350			(18.3	)		590			764			(22.8	)

FiOS Digital connections		587			604			(2.8	)		1,248			1,391			(10.3	)

HSI		(116	)		(132	)		(12.1	)		(205	)		(221	)		(7.2	)
Total Broadband connections		45			2			*			144			106			35.8
Primary residence switched access connections		(393	)		(501	)		(21.6	)		(782	)		(1,063	)		(26.4	)
Primary residence connections		(107	)		(151	)		(29.1	)		(192	)		(299	)		(35.8	)

Total retail residence voice connections		(142	)		(199	)		(28.6	)		(266	)		(404	)		(34.2	)
Total voice connections		(363	)		(422	)		(14.0	)		(675	)		(859	)		(21.4	)

Revenue and ARPU Statistics
Consumer ARPU		$ 109.67			$ 100.26			9.4			$ 108.46			$ 99.70			8.8
FiOS revenues (in millions)		$ 2,731			$ 2,380			14.7			$ 5,364			$ 4,668			14.9
Strategic services as a % of total Enterprise revenues		57.2	%		51.9	%					56.4	%		51.5	%

Other Operating Statistics
Capital expenditures (in millions)		$ 1,515			$ 1,596			(5.1	)		$ 2,949			$ 3,133			(5.9	)

Wireline employees (‘000)											84.7			88.6
FiOS Video Open for Sale (‘000)											14,607			13,721
FiOS Video penetration											34.5	%		32.6	%
FiOS Internet Open for Sale (‘000)											14,943			14,044
FiOS Internet penetration											38.6	%		36.6	%

Footnotes:

Intersegment transactions have not been eliminated.

Certain reclassifications have been made, where appropriate, to reflect comparable operating results.

*	Not meaningful

Verizon Communications Inc.

Reconciliations – Verizon

(dollars in millions)


Unaudited				3 Mos. Ended 6/30/12												3 Mos. Ended 6/30/13

Consolidated Operating Revenues					$ 28,552												$ 29,786

Adjusted EBITDA

														(dollars in millions)

Unaudited	3 Mos. Ended 3/31/12			3 Mos. Ended 6/30/12			3 Mos. Ended 9/30/12			3 Mos. Ended 12/31/12			3 Mos. Ended 3/31/13			3 Mos. Ended 6/30/13

Verizon Consolidated EBITDA
Consolidated net income (loss)		$ 3,906			$ 4,285			$ 4,292			$ (1,926	)		$ 4,855			$ 5,198
Add / (Subtract):
Provision (benefit) for income taxes		726			793			631			(2,810	)		864			988
Interest expense		685			679			632			575			537			514
Other (income) and expense, net		(19	)		(34	)		(10	)		1,079			(39	)		(25	)
Equity in earnings of unconsolidated businesses		(103	)		(72	)		(62	)		(87	)		5			(120	)

Operating income (loss)		5,195			5,651			5,483			(3,169	)		6,222			6,555
Add Depreciation and amortization expense		4,028			4,128			4,167			4,137			4,118			4,151

Consolidated EBITDA		$ 9,223			$ 9,779			$ 9,650			$ 968			$ 10,340			$ 10,706


Other Items (Before Tax)
Severance, Pension, and Benefit Charges/(Credits)		—			—			—			7,186			—			(237	)
Litigation Settlements		—			—			384			—			—			—
Other Non-Operational Costs		—			—			—			276			—			—

		—			—			384			7,462			—			(237	)

Consolidated Adjusted EBITDA		$ 9,223			$ 9,779			$ 10,034			$ 8,430			$ 10,340			$ 10,469

Consolidated Operating Income Margin					19.8	%											22.0	%
Consolidated EBITDA Margin					34.2	%											35.9	%

Net Debt to Adjusted EBITDA Ratio

(dollars in millions)


Unaudited	12/31/12		6/30/13

Verizon Net Debt
Debt maturing within one year		$ 4,369		$ 7,961
Long-term debt		47,618		41,791

Total Debt		51,987		49,752
Less Cash and cash equivalents		3,093		1,788

Net Debt		$ 48,894		$ 47,964

Net Debt to Adjusted EBITDA Ratio		1.3x		1.2x

Adjusted EPS


Unaudited	3 Mos. Ended 6/30/2013

Earnings Per Common Share, Reported		$ 0.78
Severance, Pension, and Benefit Credits		(0.05	)

Adjusted EPS		$ 0.73

Free Cash Flow

(dollars in millions)


Unaudited	6 Mos. Ended 6/30/12		6 Mos. Ended 6/30/13

Net cash provided by operating activities		$ 15,271		$ 17,148
Less Capital expenditures		7,430		7,616

Free Cash Flow		$ 7,841		$ 9,532

Verizon Communications Inc.

Reconciliations – Segments

Wireless

(dollars in millions)


Unaudited	3 Mos. Ended 6/30/12			3 Mos. Ended 6/30/13			6 Mos. Ended 6/30/12			6 Mos. Ended 6/30/13

Wireless Segment EBITDA
Operating income		$ 5,713			$ 6,464			$ 10,930			$ 12,882
Add Depreciation and amortization expense		2,011			2,047			3,929			4,053

Wireless Segment EBITDA		$ 7,724			$ 8,511			$ 14,859			$ 16,935

Wireless total operating revenues		$ 18,577			$ 19,976			$ 36,850			$ 39,499

Wireless service revenues		$ 15,776			$ 17,078			$ 31,186			$ 33,806

Wireless operating income margin		30.8	%		32.4	%		29.7	%		32.6	%

Wireless Segment EBITDA service margin		49.0	%		49.8	%		47.6	%		50.1	%

Wireline

(dollars in millions)


Unaudited	3 Mos. Ended 6/30/12			3 Mos. Ended 6/30/13			6 Mos. Ended 6/30/12			6 Mos. Ended 6/30/13

Wireline Segment EBITDA
Operating income		$ 188			$ 74			$ 345			$ 87
Add Depreciation and amortization expense		2,102			2,085			4,192			4,180

Wireline Segment EBITDA		$ 2,290			$ 2,159			$ 4,537			$ 4,267

Wireline total operating revenues		$ 9,931			$ 9,734			$ 19,876			$ 19,564

Wireline operating income margin		1.9	%		0.8	%		1.7	%		0.4	%

Wireline Segment EBITDA margin		23.1	%		22.2	%		22.8	%		21.8	%

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VERIZON COMMUNICATIONS INC Reports