VERIZON COMMUNICATIONS INC: 1st Quarter Results

Verizon Reports Fifth Consecutive Quarter of Double-Digit Operating Income and  
                            Earnings Growth                                 
NEW YORK, April 24, 2014 -- 


                               1Q 2014 HIGHLIGHTS

Consolidated

  * $1.15 in earnings per share (EPS) and 84 cents in adjusted EPS (non-GAAP),
    excluding net non-operational gains and losses - compared with 68 cents in
    both reported and adjusted EPS in 1Q 2013.

Wireless

  * 7.5 percent year-over-year increase in service revenues; 6.7 percent
    year-over-year increase in retail service revenues; 35.0 percent operating
    income margin; 52.1 percent segment EBITDA margin on service revenues


(non-GAAP).
  * Added 549,000 net retail connections, including 539,000 net retail postpaid 
connections; low retail postpaid churn of 1.07 percent; 103.3 million total 
retail connections; 97.3 million total retail postpaid connections. 
Wireline 
* 6.2 percent year-over-year increase in consumer revenues; consumer ARPU 
(average revenue per user) up 11.3 percent year over year.
  * 15.5 percent year-over-year increase in FiOS revenues; 98,000 FiOS Internet 
and 57,000 FiOS Video net additions. 
Verizon Communications Inc. (NYSE, Nasdaq: VZ) today reported its fifth
consecutive quarter of double-digit percentage growth in operating income and
earnings per share. First-quarter 2014 results included the impact of
February's close of the $130 billion transaction to acquire full ownership of
Verizon Wireless. 
Lowell McAdam, Verizon chairman and CEO, said: "Verizon has delivered
double-digit earnings growth in eight of the past nine quarters, and in
first-quarter 2014 we posted our strongest consolidated revenue growth in five
quarters. With the wireless transaction now behind us, we have great confidence
in our ability to sustain these strong results. 
"We are already seeing the expected earnings accretion from the transaction,"
McAdam added. "The full access we now have to the significant cash flows of
Verizon Wireless is energizing our efforts to provide customers with product
and service innovations and to enable powerful solutions to some of the world's
biggest challenges." 
Verizon reported $1.15 in EPS in first-quarter 2014, compared with 68 cents per
share in first-quarter 2013. First-quarter 2014 results included an after-tax
gain of approximately $1.9 billion (55 cents per share) related to the sale of
Verizon's minority interest in Vodafone Omnitel as part of the wireless
transaction, and charges of $575 million (17 cents per share) related to debt
redemption and $260 million (8 cents per share) in interest and financing costs
related to the wireless transaction. 
On an adjusted basis (non-GAAP), Verizon reported EPS of 84 cents in
first-quarter 2014, compared with 68 cents per share in first-quarter 2013 - an
increase of 23.5 percent. 
With the transaction to acquire full ownership of Verizon Wireless closing on
Feb. 21, Verizon's first-quarter 2014 results only include five weeks of the
full results of Verizon Wireless. On a non-GAAP, illustrative basis, adjusted
EPS of 84 cents would have been 91 cents per share assuming 100 percent
ownership of Verizon Wireless and all shares issued in the transaction were
outstanding for the full quarter. 


    Consolidated Results Highlighted by Top-Line Growth, Margin Expansion

With continued solid operational execution and revenue growth across all
strategic areas - Verizon Wireless, FiOS and strategic enterprise services -
Verizon delivered consolidated top-line growth and margin expansion in
first-quarter 2014.

Consolidated Highlights

  * Driven by wireless and FiOS services, total operating revenues in
    first-quarter 2014 were $30.8 billion, a 4.8 percent increase compared with
    first-quarter 2013 and the company's highest quarterly growth rate in the


past five quarters.
  * Continued effective cost management drove first-quarter 2014 operating 
income to $7.2 billion, a 15.1 percent increase compared with first-quarter 
2013.
  * Consolidated operating income margin was 23.2 percent for first-quarter 


    2014, compared with 21.1 percent for first-quarter 2013. Consolidated
    EBITDA margin (non-GAAP, based on earnings before interest, taxes,
    depreciation and amortization) was 36.7 percent for first-quarter 2014,


compared with 35.1 percent for first-quarter 2013.
  * Cash flow from operating activities totaled $7.1 billion in the quarter, 


    compared with $7.5 billion in first-quarter 2013. First-quarter 2014 cash
    flow included an incremental $1.3 billion in interest payments and $200
    million in pension funding that the company did not have in first-quarter
    2013. Capital expenditures totaled $4.15 billion in first-quarter 2014, and
    the company continues to target full-year investments in the range of $16.5
    billion to $17 billion, with a decrease in capital spending as a percentage


of total revenues.
  * Free cash flow (non-GAAP, cash flow from operations less capital 


    expenditures) totaled $3.0 billion in first-quarter 2014, compared with
    $3.9 billion in first-quarter 2013. With full ownership of Verizon
    Wireless, Verizon retains 100 percent - rather than 55 percent - of the
    Verizon Wireless free cash flow. On a comparable basis, free cash flow
    available to Verizon Communications was approximately $1.4 billion higher
    in first-quarter 2014 than in first-quarter 2013, assuming all free cash
    flow at Verizon Wireless had been distributed to the partners.
    Verizon Wireless Delivers Strong Profitability and Customer, Revenue Growth

In first-quarter 2014, Verizon Wireless delivered strong growth in retail
postpaid net additions and revenues, an increase in smartphone penetration, and
continued high segment EBITDA margin on service revenues (non-GAAP).

Wireless Financial Highlights

  * Total revenues were $20.9 billion in first-quarter 2014, up 6.9 percent
    year over year. Service revenues in the quarter totaled $18.0 billion, up
    7.5 percent year over year. Retail service revenues grew 6.7 percent year


over year, to $17.2 billion.
  * Retail postpaid ARPA (average revenue per account) increased 6.3 percent 
over first-quarter 2013, to $159.67 per month. 
  * In first-quarter 2014, wireless operating income margin was 35.0 percent 


    and segment EBITDA margin on service revenues was 52.1 percent. This
    compares with 32.9 percent and 50.4 percent, respectively, in first-quarter
    2013.

Wireless Operational Highlights

  * Verizon Wireless added 549,000 retail net connections, including 539,000
    retail postpaid net connections, in the first quarter. These additions


exclude acquisitions and adjustments.
  * At the end of the first quarter, the company had 103.3 million retail 
connections, including 97.3 million retail postpaid connections, a 4.4 
percent increase year over year.
  * Verizon Wireless had 35.1 million retail postpaid accounts at the end of 
the first quarter, a 0.3 percent increase over first-quarter 2013, and 2.77 
connections per account, up 3.7 percent year over year.
  * At the end of the first quarter, smartphones accounted for more than 72 
percent of the Verizon Wireless retail postpaid customer phone base, up 
from 70 percent at year-end 2013.
  * Retail postpaid churn was 1.07 percent in the first quarter, up 6 basis 
points year over year. Retail churn was 1.37 percent in the first quarter, 
up 7 basis points year over year.
  * The company continued to enhance its 4G LTE smartphone lineup. In the first 


    quarter, Verizon Wireless launched the Nokia Lumia Icon and the HTC One
    (M8). The company also launched the following tablets: the Nexus 7, the LG
    G Pad 8.3 LTE, the Samsung Galaxy Note Pro and the Samsung Galaxy Note 10.1
    2014 edition. Earlier this month, Verizon Wireless launched the Samsung
    Galaxy S 5 and ATIV SE, the Lucid 3 by LG and the DROID MAXX by Motorola


16GB.
  * Verizon Wireless was the network performance leader in the rankings of 


    wireless providers in the United States in the first Root Metrics National
    RootScore Report, issued in March. Verizon Wireless was the leader in the
    state rankings with wins or ties for first place for overall performance in
    45 states.
                    Wireline Consumer Revenue Growth Remains Strong

Verizon's wireline segment reported continued strong results for consumer
services, where year-over-year quarterly revenues now have grown by more than 4
percent for seven consecutive quarters.

Wireline Financial Highlights

  * In first-quarter 2014, consumer revenues were $3.8 billion, an increase of
    6.2 percent compared with first-quarter 2013. Consumer ARPU for wireline
    services increased to $120.17 in first-quarter 2014, up 11.3 percent


compared with first-quarter 2013.
  * Representing 74 percent of total consumer revenues, FiOS consumer revenues 


    grew 14.6 percent year over year, and total FiOS revenues grew 15.5 percent
    over the same periods. For the first time, total quarterly FiOS revenues


surpassed $3 billion in first-quarter 2014.
  * Wireline operating income margin was 1.5 percent in first-quarter 2014, up 


    from 0.1 percent in first-quarter 2013. Segment EBITDA margin (non-GAAP)
    was 22.3 percent in first-quarter 2014, compared with 21.4 percent in


first-quarter 2013.
  * Sales of strategic services to global enterprise customers increased 1.8 
percent compared with first-quarter 2013. Strategic services include 


    private IP, Ethernet, data center, cloud, security and managed services.

Wireline Operational Highlights

  * In first-quarter 2014, Verizon added 98,000 net new FiOS Internet
    connections and 57,000 net new FiOS Video connections. Verizon had totals
    of 6.2 million FiOS Internet and 5.3 million FiOS Video connections at the
    end of the first quarter, representing year-over-year increases of 9.9


percent and 8.7 percent, respectively.
  * FiOS Internet penetration (subscribers as a percentage of potential 


    subscribers) was 39.7 percent at the end of first-quarter 2014, compared
    with 38.2 percent at the end of first-quarter 2013. In the same periods,
    FiOS Video penetration was 35.0 percent, compared with 34.1 percent. The


FiOS network passed 18.9 million premises by the end of first-quarter 2014.
  * By the end of first-quarter 2014, 51 percent of consumer FiOS Internet 
customers subscribed to FiOS Quantum, which provides speeds ranging from 50 
to 500 megabits per second, up from 46 percent at year-end 2013.
  * Broadband connections totaled more than 9.0 million at the end of 


    first-quarter 2014, a 1.5 percent year-over-year increase. Net broadband
    connections increased by 16,000 in first-quarter 2014, as FiOS Internet net
    additions more than offset declines in DSL-based High Speed Internet


connections.
  * 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-quarter 2014, Verizon migrated an additional


78,000 customers from copper.
  * In the first quarter, Verizon Enterprise Solutions began deploying 


    innovative cloud, security, M2M (machine-to-machine), networking and other
    technology solutions for a variety of clients around the globe, including
    Kaiser Permanente, Molina Healthcare, Forest Pharmaceuticals, National DCP,
    American First Credit Union, Schindler Elevator, Sally Beauty Holdings, TE
    Connectivity, National Oceanic and Atmospheric Administration (NOAA),
    Mitsuba Corporation, State of Delaware, Alcatel-Lucent and Oracle. In
    addition, it added Oracle, SAP, Hitachi Data Systems Corporation and
    CloudBees to the growing number of leading technology companies that will
    offer services on Verizon's next-generation cloud computing and cloud
    storage platform, Verizon Cloud.
                      Other Guidance and Outlook Items

Verizon continues to target consolidated top-line growth of 4 percent and
adjusted consolidated EBITDA margin expansion in 2014, with positive
contributions to profitable growth from both wireless and wireline.

In wireless, pricing under Verizon Edge - which makes it easy for customers to
buy a new smartphone with a low upfront cost and affordable monthly payments -
had minimal impact on first-quarter 2014 ARPA and EBITDA margin. Continued Edge
adoption will likely have a greater impact on service revenue growth in
subsequent quarters, as service revenues shift to equipment revenues.

Verizon reiterates guidance of increases in wireless and wireline EBITDA and
EBITDA margin in 2014.

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 103 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. A Dow 30 company with more than $120
billion in 2013 revenues, Verizon employs a diverse workforce of 176,900. 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.

Forward-Looking Statements

In this communication we have made forward-looking statements. These statements
are based on our estimates and assumptions and are subject to risks and
uncertainties. Forward-looking statements include the information concerning
our possible or assumed future results of operations. Forward-looking
statements also include those preceded or followed by the words "anticipates,"
"believes," "estimates," "hopes" or similar expressions. 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, along with those discussed in our filings with the
Securities and Exchange Commission (the "SEC"), could affect future results and
could cause those results to differ materially from those expressed in the
forward-looking statements: the ability to realize the expected benefits of our
transaction with Vodafone in the timeframe expected or at all; 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 further financing;
significantly increased levels of indebtedness as a result of the Vodafone
transaction; changes in tax laws or treaties, or in their interpretation;
adverse conditions in the U.S. and international economies; material adverse
changes in labor matters, including labor negotiations, and any resulting
financial and/or operational impact; material changes in technology or
technology substitution; disruption of our key suppliers' provisioning of
products or services; changes in the regulatory environment 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 acts of war or significant litigation and any
resulting financial impact not covered by insurance; the effects of competition
in the markets in which we operate; changes in 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; 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)     
                                    3 Mos. Ended   3 Mos. Ended           
Unaudited                                    3/31/14        3/31/13      % 
Change   
                                                                            
                                                                           
Operating Revenues                          $ 30,818       $ 29,420         4.8  
                                                                           
Operating Expenses                                                             
Cost of services and sales                    11,189         10,932         2.4  

Selling, general and administrative expense    8,332          8,148         2.3  

Depreciation and amortization expense          4,137          4,118         0.5  

Total Operating Expenses                      23,658         23,198         2.0  
                                                                           
Operating Income                               7,160          6,222        15.1  
Equity in earnings of unconsolidated    
businesses                                     1,902             (5)          *  
  
Other income and (expense), net                 (894)            39           *  
  
Interest expense                              (1,214)          (537)          *  
  
Income Before Provision for Income Taxes       6,954          5,719        21.6  


    Provision for income taxes                      (968)          (864)       12.0 
    Net Income                                   $ 5,986        $ 4,855        23.3 


                                                                               
Net income attributable to 
noncontrolling interests                     $ 2,039          2,903       
(29.8)  
Net income attributable to Verizon             3,947          1,952           *  
  
Net Income                                   $ 5,986        $ 4,855        23.3  
                                                                               
Basic Earnings per Common Share                                                
Net income attributable to Verizon            $ 1.15          $ .68        69.1  
                                                                        
Weighted average number of common       
shares (in millions)                           3,425          2,866              
          
                                                                           
Diluted Earnings per Common Share (1)                                          
Net income attributable to Verizon            $ 1.15          $ .68        69.1  
                                                                       
Weighted average number of common                                              
shares-assuming dilution (in millions)         3,430          2,872              


      
                                                                


                                                                           
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.                                              


                                                                           
*   Not meaningful                                                              


                                                                               

Verizon Communications Inc.                                                    
Condensed Consolidated Balance Sheets                                          
                                                                               
                                                                               
                                                 (dollars in millions)    


                                                                           
Unaudited                            3/31/14     12/31/13    $ Change            

Assets                                                                         
Current assets                                                                 
Cash and cash equivalents            $ 2,907     $ 53,528   $ (50,621)        
Short-term investments                   637          601          36            
       
Accounts receivable, net              12,131       12,439        (308)           
     
Inventories                              881        1,020        (139)           
     
Prepaid expenses and other             6,716        3,406       3,310            
    
Total current assets                  23,272       70,994     (47,722)           
  
Plant, property and equipment        223,841      220,865       2,976            
    
Less accumulated depreciation        134,785      131,909       2,876            


        
                                      89,056       88,956         100           
          


                                                                           
Investments in unconsolidated                            
businesses                               889        3,432      (2,543) 
Wireless licenses                     72,713       75,747      (3,034)           
   
Goodwill                              24,647       24,634          13            
       
Other intangible assets, net           5,839        5,800          39            
       
Other assets                           5,146        4,535         611            
      
Total Assets                       $ 221,562    $ 274,098   $ (52,536)         
                                                                           
Liabilities and Equity                                                         
Current liabilities                                                            
Debt maturing within one year        $ 2,152      $ 3,933    $ (1,781)      
Accounts payable and accrued          
liabilities                           14,984       16,453      (1,469) 
Other                                  8,217        6,664       1,553  
Total current liabilities             25,353       27,050      (1,697) 
Long-term debt                       107,617       89,658      17,959  
Employee benefit obligations          26,977       27,682        (705) 
Deferred income taxes                 41,597       28,639      12,958
Other liabilities                      6,167        5,653         514          
                                                                           
Equity                                                                         
Common stock                             424          297         127            
      
Contributed capital                   10,976       37,939     (26,963)           
  
Reinvested earnings                    3,534        1,782       1,752            
    
Accumulated other comprehensive         
income                                 1,290        2,358      (1,068) 
Common stock in treasury, at cost     (3,794)      (3,961)        167            
      
Deferred compensation - employee
stock ownership plans and other          281          421        (140)           
     
Noncontrolling interests               1,140       56,580     (55,440)           
  
Total equity                          13,851       95,416     (81,565)           
  
Total Liabilities and Equity       $ 221,562    $ 274,098   $ (52,536)         


                                                                               
                                                                               


                                                                           
Verizon - Selected Financial and Operating Statistics                           
                                                                           
Unaudited                         3/31/14   12/31/13                            
                                                                           
Total debt (in millions)        $ 109,769   $ 93,591 
Net debt (in millions)          $ 106,862   $ 40,063
Net debt / Adjusted EBITDA (1)        2.5x       1.0x                            

Common shares outstanding end   
of period (in millions)             4,141       2,862          
Total employees                   176,900     176,800                            
Quarterly cash dividends                                                    
declared per common share         $ 0.530     $ 0.530                            
                                                                              
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)
                                      3 Mos. Ended    3 Mos. Ended              


     
Unaudited                                  3/31/14         3/31/13          $ 
Change 
Cash Flows From Operating Activities                                         
Net Income                                 $ 5,986         $ 4,855           $ 
1,131 
Adjustments to reconcile net income 
to net cash provided by      
operating activities:                                                          
Depreciation and           
amortization expense                         4,137           4,118              
  19
Employee retirement benefits                   281             295              
 (14) 
Deferred income taxes                         (155)            878            
(1,033) 
Provision for uncollectible accounts           231             260              
 (29) 
Equity in earnings of unconsolidated 
businesses, net of dividends received       (1,894)             14            
(1,908) 
Changes in current assets and 
liabilities, net of effects from                         
acquisition/disposition of businesses       (1,626)         (1,491)             
(135) 
Other, net                                     179          (1,398)            
1,577  
Net cash provided by operating activities    7,139           7,531              
(392)  
                                                     
Cash Flows From Investing Activities
Capital expenditures (including 
capitalized software)                       (4,150)         (3,602)             
(548) 
Acquisitions of investments and 
businesses, net of cash acquired              (157)            (21)             
(136) 
Acquisitions of wireless licenses, net        (213)           (117)             
 (96) 
Other, net                                     (11)            141              
(152) 
Net cash used in investing activities       (4,531)         (3,599)             
(932)  
                                                               
Cash Flows From Financing Activities 
Proceeds from long-term borrowings          16,952             500            
16,452 
Repayments of long-term  borrowings                                              
     
and capital lease obligations               (7,951)            (73)           
(7,878)             
Increase in short-term obligations, 
excluding current maturities                   252             581              
(329) 
Dividends paid                              (1,517)         (1,472)             
 (45) 
Proceeds from sale of common stock              34              56              
 (22) 
Purchase of common stock for treasury            -            (153)             
 153  
Acquisition of noncontrolling interest     (58,886)              -           
(58,886) 
Other, net                                  (2,113)           (989)           
(1,124) 
Net cash used in financing activities      (53,229)         (1,550)          
(51,679)  
                                                                
Increase (decrease) in cash 
and cash equivalents                       (50,621)          2,382           
(53,003)            
Cash and cash equivalents, beginning 
of period                                   53,528           3,093            
50,435              
Cash and cash equivalents, end of period   $ 2,907         $ 5,475          $ 
(2,568)    
                                                               
                                                                           
Verizon Communications Inc.                                                   
Wireless - Selected Financial Results                                          


                                                                              
                                                       (dollars in millions)
                                                                              
                                      3 Mos. Ended    3 Mos. Ended              


   
Unaudited                                  3/31/14         3/31/13     % Change  
    
Operating Revenues                                                            
Retail service                            $ 17,246        $ 16,169          6.7  
          
Other service                                  741             559         32.6  
         
Service                                     17,987          16,728          7.5  
           
                                                                          
Equipment                                    1,870           1,813          3.1  
          
Other                                        1,022             982          4.1  
          
Total Operating Revenues                    20,879          19,523          6.9  
           
                                                                          
Operating Expenses                                                            
Cost of services and sales                   5,856           5,651          3.6  
          
Selling, general and administrative expense  5,644           5,448          3.6  
          
Depreciation and amortization expense        2,061           2,006          2.7  
Total Operating Expenses                    13,561          13,105          3.5  
           
                                                                          
Operating Income                           $ 7,318         $ 6,418         14.0  
         
Operating Income Margin                       35.0%           32.9%              
             
                                                                          
Segment EBITDA                             $ 9,379         $ 8,424         11.3  
         
Segment EBITDA Service Margin                 52.1%           50.4%              
             
                                                                          
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                            3/31/14          3/31/13     % Change  
Connections ('000)                                                            
Retail postpaid                       97,273           93,186          4.4       
Retail prepaid                         6,057            5,744          5.4       
Retail                               103,330           98,930          4.4       


                                                                                
                                                                              


                            3 Mos. Ended     3 Mos. Ended              
Unaudited                            3/31/14          3/31/13     % Change  
                                                                          
Net Add Detail ('000)(1)                                                      
Retail postpaid                          539              677        (20.4)    
Retail prepaid                            10               43        (76.7)    
Retail                                   549              720        (23.8)     
Account Statistics                                                            
Retail Postpaid Accounts ('000)(2)     35,061           34,943         0.3       
Retail postpaid ARPA                 $ 159.67         $ 150.27         6.3       
Retail postpaid connections per
account (2)                              2.77             2.67         3.7 
                                                                          
Churn Detail                                                                  
Retail postpaid                          1.07%            1.01%                  
 
Retail                                   1.37%            1.30%                  
  
                                                                          
Retail Postpaid Connection Statistics 
Total Smartphone postpaid % of
phones activated                         90.1%            84.3%                  
 
Total Smartphone postpaid 
phone base (2)                           72.3%            61.4%                  
 
Total Internet postpaid base (2)         11.3%             9.6%                  
   
                                                                          
Other Operating Statistics                                                    
Capital expenditures (in millions)    $ 2,554          $ 1,992        28.2       
                                                                 
Footnotes:                                                                     
(1) Connection net additions exclude acquisitions and adjustments.              
                                                                           
(2) Statistics presented as of end of period.                                   


                                                                               
    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.                                                    
Wireline - Selected Financial Results                                          
                                                                               
                                                     (dollars in millions)      


                              3 Mos. Ended    3 Mos. Ended                    
Unaudited                           3/31/14         3/31/13   % Change        
                                                                           
Operating Revenues                                                             
Consumer retail                     $ 3,840         $ 3,616       6.2            
Small business                          624             638      (2.2)           
Mass Markets                          4,464           4,254       4.9            


                                                                                  
     Strategic services               2,110           2,073       1.8           
        Core                             1,496           1,697     (11.8)          

Global Enterprise                     3,606           3,770      (4.4)          
 
Global Wholesale                      1,591           1,699      (6.4)          
 
Other                                   129             107      20.6           
 
Total Operating Revenues              9,790           9,830      (0.4)          


                                                                             
Operating Expenses                                                             
Cost of services and sales            5,459           5,457         -            

Selling, general and             
administrative expense                2,151           2,265      (5.0)
Depreciation and amortization         
expense                               2,033           2,095      (3.0)           
Total Operating Expenses              9,643           9,817      (1.8)           
                                                                             
Operating Income                      $ 147            $ 13         *            

Operating Income Margin                 1.5%            0.1%                     
      
                                                                           
Segment EBITDA                      $ 2,180         $ 2,108       3.4            
Segment EBITDA Margin                  22.3%           21.4%                     
     


                                                                               

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.                                             


                                                                           
*    Not meaningful                                                             
                                                                            
Verizon Communications Inc.                                                    
Wireline - Selected Operating Statistics                                        
                                                                           
Unaudited                                 3/31/14       3/31/13    % Change      
    
Connections ('000)                                                             
FiOS Video Subscribers                      5,319         4,895         8.7      
FiOS Internet Subscribers                   6,170         5,612         9.9      
FiOS Digital Voice residence connections    4,350         3,531        23.2    
FiOS Digital connections                   15,839        14,038        12.8     
                                                                           
HSI                                         2,861         3,282       (12.8)  
Total Broadband connections                 9,031         8,894         1.5      
Primary residence switched 
access connections                          6,224         7,593       (18.0)  
Primary residence connections              10,574        11,124       (4.9)    
                                                                           
Total retail residence voice connections   11,048        11,725       (5.8)   
Total voice connections                    20,733        22,191       (6.6)    


                                                                               
                                                                               


                                  3 Mos. Ended   3 Mos. Ended   
Unaudited                                  3/31/14        3/31/13   % Change     
Net Add Detail ('000)                                                          
FiOS Video Subscribers                          57            169      (66.3)  
FiOS Internet Subscribers                       98            188      (47.9)  
FiOS Digital Voice residence connections       102            304      (66.4)  
FiOS Digital connections                       257            661      (61.1)   
                                                                           
HSI                                            (82)           (89)      (7.9)    
Total Broadband connections                     16             99      (83.8)  
Primary residence switched 
access connections                            (257)          (389)     (33.9)  
Primary residence connections                 (155)           (85)      82.4     
                                                                           
Total retail residence voice connections      (181)          (124)      46.0     
Total voice connections                       (352)          (312)      12.8     
                                                                           
Revenue and ARPU Statistics                                                    
Consumer ARPU                             $ 120.17       $ 107.95       11.3     
FiOS revenues (in millions)                $ 3,041        $ 2,633       15.5     
Strategic services as a % of 
total Enterprise revenues                     58.5%          55.0%               
                                                            
Other Operating Statistics                                                     
Capital expenditures (in millions)         $ 1,385        $ 1,434       (3.4)    
                                                                
Wireline employees ('000)                     80.9           85.2                
FiOS Video Open for Sale ('000)             15,184         14,374                
FiOS Video penetration                        35.0%          34.1%               
FiOS Internet Open for Sale ('000)          15,530         14,703                
FiOS Internet penetration                     39.7%          38.2%               

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.             
Reconciliations - Consolidated Verizon     
                                                         (dollars in millions)
                                                                                


                                                3 Mos. Ended   3 Mos. Ended
Unaudited                                               3/31/13        3/31/14 
Consolidated Operating Revenues                        $ 29,420       $ 30,818   
Adjusted EBITDA                            
                                                              (dollars in 
millions)  
                               3 Mos. Ended 3 Mos. Ended 3 Mos. Ended 3 
Mos. Ended
Unaudited                               6/30/12      9/30/12     12/31/12      
3/31/13
Verizon Consolidated EBITDA
Consolidated net income (loss)          $ 4,285      $ 4,292    $ (1,926)      
$ 4,855
Add / (Subtract):
Provision (benefit) for income taxes        793          631      (2,810)        
864
Interest expense                            679          632          575        
537
Other (income) and expense, net            (34)         (10)        1,079       
  (39)
Equity in earnings of
unconsolidated businesses                  (72)         (62)         (87)        
 5
Operating income (loss)                   5,651        5,483      (3,169)       
 6,222
Add Depreciation and amortization
expense                                   4,128        4,167        4,137       
 4,118
Consolidated EBITDA                     $ 9,779      $ 9,650        $ 968     $ 
10,340 
Other Items (Before Tax)
Severance, Pension, and Benefit
Charges (Credits)                             -            -        7,186        
 -
Gain on Spectrum License
Transactions                                  -            -            -        
 -
Litigation Settlements                        -          384            -        
 -
Other Non-Operational Costs                   -            -          276        


     -
                                              -          384        7,462       


 -
Consolidated Adjusted EBITDA            $ 9,779     $ 10,034      $ 8,430     $ 
10,340 
Consolidated Operating Income Margin                                            
 21.1%
Consolidated EBITDA Margin                                                      
 35.1% 
                                3 Mos. Ended 3 Mos. Ended 3 Mos. Ended  3 
Mos. Ended
Unaudited                                6/30/13      9/30/13     12/31/13      
 3/31/14
Verizon Consolidated EBITDA
Consolidated net income (loss)           $ 5,198      $ 5,578      $ 7,916      
 $ 5,986
Add / (Subtract):
Provision (benefit) for income taxes         988        1,034        2,844       
 968
Interest expense                             514          555        1,061       
1,214
Other (income) and expense, net              (25)         (20)         250       
 894
Equity in earnings of
unconsolidated businesses                   (120)         (19)          (8)     
  (1,902)
Operating income (loss)                    6,555        7,128       12,063       
7,160
Add Depreciation and
amortization expense                       4,151        4,154        4,183       
4,137
Consolidated EBITDA                     $ 10,706     $ 11,282     $ 16,246      
$ 11,297 
Other Items (Before Tax)
Severance, Pension, and
Benefit Charges (Credits)                   (237)           -       (5,995)      
   -
Gain on Spectrum License
Transactions                                   -         (278)           -       
   -
Litigation Settlements                         -            -            -       
   -
Other Non-Operational Costs                    -            -            -       


       -
                                            (237)        (278)      (5,995)     
       -

Consolidated Adjusted EBITDA            $ 10,469     $ 11,004     $ 10,251      
$ 11,297

Consolidated Operating Income Margin                                            


23.2%
Consolidated EBITDA Margin                                                       


    36.7%
                                                                                


          
Net Debt to Adjusted EBITDA Ratio                                                
              
                                                                      
(dollars in millions) 
Unaudited                                                3/31/13        
12/31/13       3/31/14                
Verizon Net Debt        
Debt maturing within one year                           $ 10,888         $ 
3,933       $ 2,152 
Long-term debt                                            41,993          
89,658       107,617               
Total Debt                                                52,881          
93,591       109,769               
Less Cash and cash equivalents                             5,475          
53,528         2,907                 
Net Debt                                                $ 47,406        $ 
40,063     $ 106,862   
Net Debt to Adjusted EBITDA Ratio                            1.2x            
1.0x          2.5x                  
Free Cash Flow                            
                                                                      
(dollars in millions)                 
                                                 3 Mos. Ended   3 Mos. 
Ended                        
Unaudited                                                 3/31/13        
3/31/14        $ Change               
                               
Net cash provided by operating activities                 $ 7,531        $ 
7,139 
Less Capital expenditures                                   3,602          
4,150                                
Free Cash Flow                                            $ 3,929        $ 
2,989      
Less free cash flow attributable 
to noncontrolling interest                                  2,404              - 
             
Illustrative Free Cash Flow Attributable to Verizon       $ 1,525        $ 
2,989         $ 1,464  
Verizon Communications Inc.                                                    
Reconciliations - Consolidated Verizon                                          
                                                                           
Adjusted and Illustrative Net Income - Verizon         (dollars in millions)     
                                                             3 Mos. Ended      
Unaudited                                                           3/31/14      
  
Reported Net Income attributable to Verizon                         $ 3,947      
      
Wireless transaction costs                                              260      
     
Early debt redemption costs                                             575      
     
Gain on sale of Omnitel interest                                     (1,888)     
  
Adjusted Net Income                                                   2,894      
   
Income from Vodafone noncontrolling interest                          1,183      
   
Wireless transaction costs                                             (267)     
    
Elimination of Omnitel equity income                                    (24)     
     
Illustrative Net Income                                             $ 3,786      
       
                                                                           
Adjusted and Illustrative EPS                                                   
                               3 Mos. Ended   3 Mos. Ended  3 Mos. Ended     
Unaudited                               3/31/13       12/31/13       3/31/14     
   
                                                                           
Earnings Per Common Share, Reported      $ 0.68         $ 1.76        $ 1.15     
       
Severance, pension and benefit credits        -          (1.29)            -     
        
Early debt redemption costs                   -              -          0.17     
     
Wireless transaction costs                    -           0.19          0.08     
     
Gain on sale of Omnitel interest              -              -         (0.55)    
    
Adjusted EPS                             $ 0.68         $ 0.66        $ 0.84     
        
Income from Vodafone noncontrolling interest                            0.29     
     
Wireless transaction costs                                             (0.06)    
    
Elimination of Omnitel equity income                                   (0.01)    
    
Dilutive effect of share issuance                                      (0.14)    
    
Illustrative EPS                                                      $ 0.91     


        

Note: EPS may not add due to rounding.                                         


Verizon Communications Inc.                                                    
Reconciliations - Segments                                                     

Wireless                                                                       
                                                        (dollars in millions)


                            3 Mos. Ended     3 Mos. Ended    3 Mos. Ended  
Unaudited                            3/31/13         12/31/13         3/31/14    
  
Wireless Segment EBITDA                                                        
Operating income                     $ 6,418          $ 6,229         $ 7,318    
      
Add Depreciation and 
amortization expense                   2,006            2,089           2,061    
   
Wireless Segment EBITDA              $ 8,424          $ 8,318         $ 9,379    
      
Wireless total operating revenues   $ 19,523         $ 21,125        $ 20,879    
       
Wireless service revenues           $ 16,728         $ 17,711        $ 17,987    
        
Wireless operating income margin        32.9%            29.5%           35.0%   
    
Wireless Segment EBITDA service margin  50.4%            47.0%           52.1%   
     
                                                                           
Wireline                                                                        


                                                          (dollars in millions) 
     


                            3 Mos. Ended     3 Mos. Ended    3 Mos. Ended  
Unaudited                            3/31/13         12/31/13         3/31/14    
  
                                                                           
Wireline Segment EBITDA                                                        
Operating income                        $ 13            $ 131           $ 147    
       
Add Depreciation and 
amortization expense                   2,095            2,073           2,033    
   
Wireline Segment EBITDA              $ 2,108          $ 2,204         $ 2,180    
       
Wireline total operating revenues    $ 9,830          $ 9,845         $ 9,790    
      
Wireline operating income margin         0.1%             1.3%            1.5%   
     
Wireline Segment EBITDA margin          21.4%            22.4%           22.3%   
    
 

SOURCE  Verizon Communications, Inc. 
CONTACT: Bob Varettoni, 908-559-6388, robert.a.varettoni@verizon.com, or Ray
McConville, 908-559-3504, raymond.mcconville@verizon.com 
END 
-0- Apr/24/2014 11:30 GMT
 
 
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