8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Date of Report: April 27, 2009

(Date of earliest event reported)

VERIZON COMMUNICATIONS INC.

(Exact name of registrant as specified in its charter)

Delaware	1-8606	23-2259884
(State or other jurisdiction of incorporation)	(Commission File Number)	(I.R.S. Employer Identification No.)

140 West Street New York, New York	10007
(Address of principal executive offices)	(Zip Code)

Registrant’s telephone number, including area code: (212) 395-1000

Not Applicable

(Former name or former address, if changed since last report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

¨ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

¨ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

¨ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

¨ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 2.02. Results of Operations and Financial Condition

On April 27, 2009, Verizon Communications Inc. (Verizon) issued a press release and financial tables relating to its results for the quarter ended March 31, 2009 (see Exhibit 99).

Non-GAAP Measures

Verizon’s press release and financial tables include financial information prepared in conformity with generally accepted accounting principles (GAAP) as well as non-GAAP financial information. The non-GAAP financial information may be determined or calculated differently by other companies.

The consolidated statements of income before special items eliminate items of revenues, expenses, gains and losses primarily as a result of their non-operational and/or non-recurring nature. These adjustments also include the current and prior periods’ operating revenues and operating expenses of non-strategic local exchange and related business assets in Maine, New Hampshire, and Vermont that were spun off in the current year-to-date period, which were determined using specific information where available and allocations where data is not maintained on a state-specific basis within Verizon’s books and records. Management believes this presentation of operating performance assists readers in better understanding our results of operations and trends from period to period, consistent with management’s evaluation of Verizon’s consolidated and segment results of operations for a variety of internal purposes including strategic business planning, capital allocation and compensation. Management believes that the consolidated statements of income before special items provide current and prior period results of operations on a comparable basis as well as provide trends that are more indicative of future operating results than GAAP results of operations, given the non-operational and/or non-recurring nature of the special items removed for purposes of reporting results of operations before special items. While some of these items have been periodically reported in Verizon’s consolidated results of operations, their occurrence in future periods is dependent upon future business and economic factors, among other evaluation criteria, and may frequently be beyond the control of management. As a result of these factors, management also provides this information externally, along with a complete reconciliation to their comparable GAAP amounts, so readers have access to the detail and general nature of adjustments made to GAAP results. Descriptions of the special items are provided in the schedules accompanying the press release.

Management believes that Verizon Wireless’s cash expense per customer and Verizon Wireless’s operating income before depreciation and amortization (EBITDA) and EBITDA margin, additional non-GAAP financial measures, are also useful to investors and other users of our financial information in evaluating operating financial performance. Verizon Wireless’s cash expense per customer is determined by subtracting equipment and other revenue from Verizon Wireless’s cost of sales and services and selling, general and administrative expenses, divided by average customers during the period. Verizon Wireless’s EBITDA is determined by adding-back depreciation and amortization to operating income, and the Verizon Wireless EBITDA margin is calculated by dividing Verizon Wireless’s EBITDA by Verizon Wireless’s service revenues. Verizon Wireless’s cash expense per customer, EBITDA and EBITDA margin are non-GAAP operating performance measures that are used internally to evaluate current operating expense efficiency and operating profitability on a more variable cost basis by excluding the depreciation and amortization expenses related primarily to capital expenditures and acquisitions (particularly customer base amortization) that occurred in prior years. Cash expense per customer is determined by reflecting equipment and other revenue on a net cost basis in order to illustrate the impact of the net cost of selling handsets and other equipment to the customers and other similar transactions with customers. In addition, Verizon management uses this information to evaluate operating performance in relation to Verizon Wireless’s competitors. The Verizon Wireless EBITDA margin utilizes service revenues rather than total revenues. Service revenues exclude primarily equipment revenues (as well as other non-service revenues) in order to capture the impact of providing service to the wireless customer base on an ongoing basis. Verizon Wireless’s EBITDA margin is presented along with Verizon Wireless’s operating income margin so as not to imply that more emphasis should be placed on it than the corresponding GAAP measure. Management believes that this presentation assists readers in preparing comparisons of this type of performance measure (operating profitability) using the GAAP measure as well as the measure management uses to evaluate segment results and perform comparisons to other wireless carriers.

Verizon’s Free Cash Flow is an additional non-GAAP financial measure that is useful to investors and other users of our financial information in evaluating the Company’s cash available to pay debt and dividends. Free Cash Flow is an indication of how much cash is generated by normal business operations, after capital expenditures. Management believes this presentation is consistent with its evaluation of internal measures, including strategic business planning and capital allocation. Free cash flow is calculated by subtracting capital expenditures from cash flow from operations.

The unaudited pro forma financial information gives the pro forma effect to the acquisition of Alltel Corporation as if that acquisition had occurred on January 1, 2008 and presents the combined pro forma operating results of Verizon and Alltel Corporation on a comparable basis, before special items. The unaudited pro forma results are presented for illustrative purposes only and do not reflect the realization of potential cost savings and any related integration costs. Certain cost savings may result from the merger, however, there can be no assurance that these cost savings will be achieved. Cost savings, if achieved, could result from, among other things, the reduction of overhead expenses, including employee levels and the elimination of duplicate facilities and capital expenditures. These pro forma results do not purport to be indicative of the results that would have actually been obtained if the merger had occurred as of January 1, 2008, nor does the pro forma data intend to be a projection of the results that may be obtained in the future.

Management believes this presentation of pro forma financial information before special items assists readers in better understanding our results of operations and trends from period to period, consistent with management’s evaluation of Verizon’s consolidated and segment results of operations for a variety of internal measures. Management believes that the pro forma financial information provides current and prior period results of operations on a comparable basis as well as provides trends that are more indicative of future operating results than GAAP results of operations, given the acquisition during the period and the non-operational and/or non-recurring nature of the special items removed for purposes of reporting results of operations before special items. Management provides this information externally, along with a reconciliation to their comparable GAAP amounts so readers have access to the detail and general nature of adjustments made to GAAP results. Descriptions of these special items are provided in the schedules accompanying the press release.

It is management’s intent to provide non-GAAP financial information to enhance understanding of Verizon’s GAAP financial statements and it should be considered by the reader in addition to, but not instead of, the financial statements prepared in accordance with GAAP.

Item 9.01. Financial Statements and Exhibits

(d) Exhibits.

Exhibit Number	Description
99	Press release and financial tables, dated April 27, 2009, issued by Verizon Communications Inc.

SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

	Verizon Communications Inc.
	(Registrant)
Date:             April 27, 2009	/s/ Robert J. Barish
	Robert J. Barish
	Senior Vice President and Controller

EXHIBIT INDEX

Exhibit Number	Description
99	Press release and financial tables, dated April 27, 2009, issued by Verizon Communications Inc.

EX-99

Exhibit 99

NEWS RELEASE

FOR IMMEDIATE RELEASE
April 27, 2009	Media contacts:
	Peter Thonis
	212-395-2355
	peter.thonis@verizon.com
	Bob Varettoni
	908-559-6388
	robert.a.varettoni@verizon.com

Verizon Communications Reports Revenue, Earnings

and Cash Flow Growth in 1Q 2009

Sales of Verizon Wireless, FiOS Internet and TV, and Strategic Business Services Show Continued Strength

1Q 2009 HIGHLIGHTS

Consolidated Results

• 58 cents in EPS and 63 cents in adjusted EPS (non-GAAP), compared with 1Q 2008 EPS of 57 cents and 61 cents, respectively.

• $6.4 billion in cash flows from operations, up $1.0 billion, or 19.1 percent, year over year.

• Capital expenditures totaled $3.7 billion; free cash flow totaled $2.7 billion, up $1.5 billion.

Wireless

• 86.6 million total customers, up 28.8 percent; 84.1 million retail customers, up 29.0 percent; 1.3 million net customer additions, excluding acquisitions and adjustments, almost all retail.

• 29.6 percent increase in total revenues; industry-leading retail postpaid churn, 1.14 percent; data revenues up 56.2 percent; 28.2 percent operating income margin and 46.0 percent EBITDA margin on service revenues (non-GAAP).

• Integration of Alltel operations on schedule.

Wireline

• 299,000 net new FiOS TV customers and a record 298,000 net new FiOS Internet customers, for a total of 2.2 million FiOS TV customers and 2.8 million FiOS Internet customers.

• 13.7 percent increase in consumer ARPU.

• 7.5 percent increase in strategic business services revenues.

Verizon News Release, page 2

NEW YORK — Verizon Communications Inc. (NYSE:VZ) today reported that its revenue and earnings continued to grow in the first quarter 2009 and that it continued to generate strong cash flows. Despite the general economic climate, sales remained strong for wireless, FiOS and strategic business services.

Verizon reported diluted earnings per share (EPS) of 58 cents in the first quarter 2009, up 1.8 percent from 57 cents per share in the first quarter 2008. On an adjusted basis (non-GAAP), first-quarter 2009 earnings were 63 cents per share, up 3.3 percent from first-quarter 2008 earnings of 61 cents per share.

Verizon’s total operating revenues grew 11.6 percent to $26.6 billion, compared with the first quarter 2008, as the company added revenues from its acquisition of Alltel Corporation in early January 2009. On a pro forma basis (determined by consolidating the operating results of Verizon and the former Alltel as though the acquisition had occurred on Jan. 1, 2008), revenue growth was 3.3 percent.

Cash flows from operations totaled $6.4 billion for the first three months of 2009, up $1.0 billion, or 19.1 percent, over the same period last year. Capital expenditures totaled $3.7 billion in the first quarter 2009, and free cash flow (cash flows from operations minus capital expenditures) totaled $2.7 billion, up $1.5 billion from the first quarter 2008.

Disciplined Approach in Challenging Environment

“Our business groups executed with excellence in the first quarter,” said Verizon Chairman and CEO Ivan Seidenberg. “Our operational and financial discipline produced continued revenue and earnings growth, as well as an expansion of our already strong operating

Verizon News Release, page 3

cash flows. A highlight of the quarter was our successful completion of the Alltel acquisition. We quickly began integration efforts, and we are aggressively pursuing synergies.”

Seidenberg added: “In this challenging economic environment, we remain focused on delivering value to customers and on returning cash to our shareowners, with an attractive dividend. Verizon is in a unique position. We are tapping into new market opportunities in wireless, broadband, video and global enterprise, and we already have the assets and capabilities to sustain our cash flows and grow total shareholder returns.”

Wireless Again Delivers on Growth and Profitability Model

Verizon Wireless delivered strong net customer additions and sustained high margins. In the first quarter 2009:

• Wireless retail (non-wholesale) gross customer additions (excluding customers acquired in the Alltel acquisition) were strong, up 32.5 percent over the prior year. On a pro forma basis, retail gross customer additions were up 4.3 percent.

• Verizon Wireless had 86.6 million customers at the end of the quarter, an increase of 28.8 percent year over year. This includes 13.2 million net total customer additions, after conforming adjustments, from the Alltel acquisition. Verizon Wireless is the largest wireless company in the U.S. in terms of total customers and revenues.

• The company also has the most retail customers of any U.S. wireless company and continued to grow its high-quality base, adding 1.3 million net retail customers (excluding customers acquired in the Alltel acquisition) for a total of 84.1 million retail customers.

• Verizon Wireless had industry-leading retail post-paid churn of 1.14 percent; total churn was an industry-leading 1.47 percent.

Verizon News Release, page 4

• Revenues totaled $15.1 billion, up 29.6 percent year over year and up 9.0 percent on a pro forma basis. Service revenues were $13.1 billion, up 28.9 percent year over year and up 10.5 percent on a pro forma basis, with continued growing demand for data services. Data revenue was $3.6 billion in the first quarter 2009, up 56.2 percent, or 36.8 percent on a pro forma basis, from the first quarter 2008.

• Service ARPU (average monthly service revenue per user) decreased 0.3 percent from the similar period a year ago, to $50.74. Total data ARPU grew by 20.8 percent to $14.16. On a pro forma basis, service ARPU increased 1.1 percent, and total data ARPU increased 25.2 percent.

• Wireless operating income margin, adjusted for acquisition-related charges and integration costs, was 28.2 percent, up 30 basis points year over year. Adjusted on the same basis, EBITDA (earnings before interest, taxes, depreciation and amortization) margin on service revenues (non-GAAP) was 46.0 percent, an increase of 110 basis points year over year and 60 basis points on a pro forma basis.

Wireline Again Delivers on Growth of FiOS, Strategic Services

Verizon’s Wireline segment reported continued strong growth in the number of new customers of fiber-optic-based FiOS TV and FiOS Internet services, and continued increased revenues from enterprise strategic services. In the first quarter (with prior-period comparisons adjusted to reflect the impact of the spinoff of non-strategic Wireline assets):

• Verizon added 299,000 net new FiOS TV customers. The company had 2.2 million FiOS TV customers, an increase of 83.8 percent compared with the first quarter 2008.

Verizon News Release, page 5

• FiOS TV sales penetration (sales as a percentage of potential customers) increased to 22.9 percent, compared with 18.7 percent in the first quarter 2008. FiOS TV service was available for sale to 9.7 million premises by end of the quarter.

• Verizon added a record 298,000 net new FiOS Internet customers. The company had nearly 2.8 million FiOS Internet customers, an increase of 55.5 percent compared with the first quarter 2008.

• FiOS Internet sales penetration increased to 26.8 percent, compared with 23.0 percent in the first quarter 2008. FiOS Internet was available for sale to 10.4 million premises by the end of the quarter.

• Broadband and video revenues from consumer customers in wireline mass markets totaled $1.3 billion in the first quarter 2009 — representing year-over-year quarterly growth of 36.3 percent.

• Revenue growth from broadband and video services drove consumer ARPU to $69.97 in the first quarter 2009, a 13.7 percent increase compared with the first quarter 2008.

• Sales of strategic business services — such as IP (Internet protocol), managed services, Ethernet and security solutions — generated $1.5 billion in revenue in the quarter, up 7.5 percent from the first quarter 2008.

Details of Earnings Adjustments

Adjusted earnings in the first quarter 2009 excluded 5 cents per share in special items: 3 cents for acquisition-related charges and 2 cents for merger integration costs, both primarily in connection with the Alltel acquisition. First-quarter 2008 adjusted earnings excluded 4 cents per share in special items: 3 cents for costs related to the spinoff of wireline access lines and 1 cent in merger integration costs in connection with the acquisition of MCI in 2006.

Verizon News Release, page 6

Additional Highlights

Wireless

• At the end of the first quarter 2009, retail customers (postpaid and prepaid) represented 97 percent of the company’s base.

• Verizon Wireless continued to lead the industry in cost efficiency. Monthly cash expense per customer (non-GAAP) decreased in the first quarter 2009 to $27.38, from $28.05 in the comparable period in 2008.

• In the first quarter, data revenues were nearly 28.0 percent of all service revenues, up from 23.0 percent in the first quarter 2008.

• Verizon Wireless continued to extend the reach of its broadband network, which is the nation’s largest and most reliable 3G (third generation) network, now covering approximately 281 million people.

• In February, Verizon Wireless selected Ericsson and Alcatel-Lucent as vendors to supply the infrastructure that will enable the company to become the first wireless company to offer commercial LTE-based service in the U.S., starting in 2010. Field trials are under way.

• In a move that gives consumer and business customers greater value and more control over how they use their plan minutes, the company introduced Friends & Family, which lets customers identify any five or 10 wireless or landline numbers as a calling group. Minutes used when placing or receiving calls to anyone in the Friends & Family calling group will not count against customers’ plan minutes.

• During the quarter, Verizon Wireless customers sent or received an average of 1.4 billion text messages each day, totaling more than 127 billion text messages in the first quarter. Customers also sent nearly 2.1 billion picture/video messages and completed 48.6 million music and video downloads during the quarter.

Wireline

• Wireline’s total first-quarter operating revenues were $11.6 billion, a decline of 3.8 percent compared with the first quarter 2008. A 0.7 percent increase in mass market revenues was offset by declines in global enterprise, global wholesale and other services. Wireline total operating expenses were $10.9 billion, a decline of 1.0 percent compared with the first quarter 2008.

• There were 8.9 million total broadband connections in the first quarter, a net increase of 252,000 over the fourth quarter 2008 and 7.8 percent year over year. This includes a decrease of 46,000 DSL-based Verizon High Speed Internet connections, which was more than offset by the increase in FiOS Internet customers.

Verizon News Release, page 7

• Over the past year, Verizon has added 1 million FiOS TV customers and expanded the availability of FiOS “triple-play” bundles of voice, Internet and TV services by nearly 50 percent. By the end of the first quarter, FiOS triple-play bundles were available to 9.7 million premises, or about 30 percent of the households in Verizon’s wireline network footprint, compared with 6.5 million premises at the end of the first quarter 2008.

• Verizon’s FiOS network passed an additional 500,000 premises in the first quarter. As of the end of the quarter, the FiOS network passed 13.2 million premises.

• Verizon Business, which serves large-business and government customers worldwide, continued its global managed security leadership, introducing a new portfolio of converged solutions that address security and performance challenges; the extension of its suite of in-the-cloud Denial of Service (DOS) Defense services; and a new Risk-Correlation service that helps prioritize current and emerging security threats within an enterprise.

• Verizon continued to deliver on the promise of voice over IP (VoIP) and unified communications and collaboration, unveiling a new managed service enabling corporate users worldwide to more simply control their unified communications; the ability for organizations to immediately initiate conference calls from some of the most popular instant messaging applications; and enhancements to its VoIP portfolio for European customers.

• Verizon pushed further into key global markets while increasing the resiliency and reliability of its global IP network, including receiving approval from the government of India to operate two international gateways in Mumbai and Chennai; a cooperative agreement with Telekom Malaysia Berhad to jointly develop a new Malaysian IP node and a new Internet node in Cyberjaya; and deployment of a technologically advanced “mesh architecture” network configuration in Singapore, one of the largest financial centers in Southeast Asia.

• New agreements with multinational customers included The Agfa-Gevaert Group and Cigna Life Insurance, SA. Verizon Business also signed new contracts with several U.S. government agencies, including a prime contract under the U.S. General Service Administration’s (GSA) Alliant program and the Defense Information Systems Network Transmission Services - Pacific II (DTS-P II) contract award by the Defense Information Systems Agency (DISA). The company also continued to generate sales under GSA’s Networx program.

Notes: Comparisons are year over year unless otherwise noted. 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 news release. Reclassifications of prior-period amounts have been made, where appropriate, to reflect comparable operating results for the spinoff of the Wireline segment’s non-strategic local exchange and related business assets in Maine, New Hampshire and Vermont in the first quarter of 2008. Unless stated otherwise, segment results shown are adjusted for special items.

Beginning in 2009, Verizon changed the manner in which its Wireline segment reports operating revenues to align management and product offerings to the continued evolution of the wireline business. Accordingly, there are four marketing units within the Wireline segment: Mass Markets, Global Enterprise, Global Wholesale and Other. Mass Markets includes consumer and small business revenues; Global Enterprise includes all retail revenue from enterprise customers, both domestic and international; Global Wholesale includes all wholesale revenues, both domestic and international; and Other primarily includes operator services, payphone services and revenues from the former MCI mass markets customer base.

Verizon News Release, page 8

Also starting in 2009, Verizon’s financial statements were adjusted for the adoption of Statement of Financial Accounting Standards (SFAS) No. 160, Noncontrolling Interests in Consolidated Financial Statements — an amendment of Accounting Research Bulletin (ARB) No. 51, which requires that net income be reported on a consolidated basis and then attributed to controlling and noncontrolling interests.

Verizon Communications Inc. (NYSE:VZ), headquartered in New York, is a global leader in delivering broadband and other wireless and wireline communications services to mass market, business, government and wholesale customers. Verizon Wireless operates America’s most reliable wireless network, serving more than 86 million customers nationwide. Verizon’s Wireline operations provide converged communications, information and entertainment services over the nation’s most advanced fiber-optic network. Wireline also includes Verizon Business, which delivers innovative and seamless business solutions to customers around the world. A Dow 30 company, Verizon employs a diverse workforce of more than 237,000 and last year generated consolidated operating revenues of more than $97 billion. For more information, visit www.verizon.com.

####

VERIZON’S ONLINE NEWS CENTER: Verizon news releases, executive speeches and biographies, media contacts, high-quality video and images, and other information are available at Verizon’s News Center on the World Wide Web at www.verizon.com/news. To receive news releases by e-mail, visit the News Center and register for customized automatic delivery of Verizon news releases.

NOTE: This news release 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: the effects of adverse conditions in the U.S. and international economies; the effects of competition in our markets; materially adverse changes in labor matters, including workforce levels and labor negotiations, and any resulting financial and/or operational impact, in the markets served by us or by companies in which we have substantial investments; the effect of material changes in available technology; any disruption of our suppliers’ provisioning of critical products or services; significant increases in benefit plan costs or lower investment returns on plan assets; the impact of natural or man-made disasters or existing or future litigation and any resulting financial impact not covered by insurance; technology substitution; an adverse change in the ratings afforded our debt securities by nationally accredited ratings organizations or adverse conditions in the credit markets impacting the cost, including interest rates, and/or availability of financing; any changes in the regulatory environments in which we operate, including any loss of or inability to renew wireless licenses, and the final results of federal and state regulatory proceedings and judicial review of those results; the timing, scope and financial impact of our deployment of fiber-to-the-premises broadband technology; 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 result in an impact on earnings; our ability to successfully integrate Alltel Corporation into Verizon Wireless’ business and achieve anticipated benefits of the acquisition; 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 3/31/09			3 Mos. Ended 3/31/08			% Change
Operating Revenues	$	26,591		$	23,833		11.6
Operating Expenses
Cost of services and sales		10,308			9,517		8.3
Selling, general & administrative expense		7,561			6,401		18.1
Depreciation and amortization expense		4,028			3,582		12.5
Total Operating Expenses		21,897			19,500		12.3
Operating Income		4,694			4,333		8.3
Equity in earnings of unconsolidated businesses		128			97		32.0
Other income and (expense), net		53			23		*
Interest expense		(925	)		(459	)	*
Income Before Provision for Income Taxes		3,950			3,994		(1.1	)
Provision for income taxes		(740	)		(945	)	(21.7	)
Net income	$	3,210		$	3,049		5.3
Net income attributable to noncontrolling interest		1,565			1,407		11.2
Net income attributable to Verizon		1,645			1,642		0.2
Net Income	$	3,210		$	3,049		5.3
Basic Earnings per Common Share
Net income attributable to Verizon	$	.58		$	.57		1.8
Weighted average number of common shares (in millions)		2,841			2,863
Diluted Earnings per Common Share (1)
Net income attributable to Verizon	$	.58		$	.57		1.8
Weighted average number of common shares-assuming dilution (in millions)		2,841			2,865

Footnote:

(1) Diluted Earnings per Share includes the dilutive effect of shares issuable under our stock-based compensation plans, which represents the only potential dilution.

* Not meaningful

Verizon Communications Inc.

Condensed Consolidated Statements of Income Before Special Items

(dollars in millions, except per share amounts)

Unaudited	3 Mos. Ended 3/31/09			3 Mos. Ended 3/31/08			% Change
Operating Revenues (1)
Domestic Wireless	$	15,122		$	11,669		29.6
Wireline		11,567			12,026		(3.8	)
Other		(98	)		(120	)	(18.3	)
Total Operating Revenues		26,591			23,575		12.8
Operating Expenses (1)
Cost of services and sales		10,247			9,395		9.1
Selling, general & administrative expense		7,421			6,237		19.0
Depreciation and amortization expense		3,983			3,522		13.1
Total Operating Expenses		21,651			19,154		13.0
Operating Income		4,940			4,421		11.7
Operating income impact of divested operations (1)		—			44		(100.0	)
Equity in earnings of unconsolidated businesses		128			97		32.0
Other income and (expense), net		55			23		*
Interest expense		(717	)		(459	)	56.2
Income Before Provision for Income Taxes		4,406			4,126		6.8
Provision for income taxes		(917	)		(978	)	(6.2	)
Net Income Before Special Items	$	3,489		$	3,148		10.8
Net income attributable to noncontrolling interest		1,698			1,407		20.7
Net income attributable to Verizon		1,791			1,741		2.9
Net Income Before Special Items	$	3,489		$	3,148		10.8
Basic Adjusted Earnings per Common Share
Net income attributable to Verizon	$	.63		$	.61		3.3
Weighted average number of common shares (in millions)		2,841			2,863
Diluted Adjusted Earnings per Common Share (2)
Net income attributable to Verizon	$	.63		$	.61		3.3
Weighted average number of common shares-assuming dilution (in millions)		2,841			2,865
Footnotes: (1)  Reclassifications of prior period amounts have been made, where appropriate, to reflect comparable operating results for the spin-off of the wireline segment’s non-strategic local exchange and related business assets in Maine, New Hampshire and Vermont in the first quarter of 2008. Reclassifications were determined using specific information where available and allocations where data is not maintained on a state-specific basis within the Company’s books and records as follows:
Revenues	$	—		$	258
Expenses	$	—		$	214

(2) Diluted Earnings per Share includes the dilutive effect of shares issuable under our stock-based compensation plans, which represents the only potential dilution.

* Not meaningful

Verizon Communications Inc.

Condensed Consolidated Statements of Income – Reconciliations

(dollars in millions, except per share amounts)

				Special and Non-Recurring Items
Unaudited	3 Mos. Ended 3/31/09 Reported (GAAP)			Merger Integration Costs			Acquisition Related Charges			3 Mos. Ended 3/31/09 Before Special Items
Operating Revenues	$	26,591		$	—		$	—		$	26,591
Operating Expenses
Cost of services and sales		10,308			(61	)		—			10,247
Selling, general & administrative expense		7,561			(52	)		(88	)		7,421
Depreciation and amortization expense		4,028			(45	)		—			3,983
Total Operating Expenses		21,897			(158	)		(88	)		21,651
Operating Income		4,694			158			88			4,940
Equity in earnings of unconsolidated businesses		128			—			—			128
Other income and (expense), net		53			—			2			55
Interest expense		(925	)		—			208			(717	)
Income Before Provision for Income Taxes		3,950			158			298			4,406
Provision for income taxes		(740	)		(64	)		(113	)		(917	)
Net income	$	3,210		$	94		$	185		$	3,489
Net income attributable to noncontrolling interest		1,565			44			89			1,698
Net income attributable to Verizon		1,645			50			96			1,791
Net income	$	3,210		$	94		$	185		$	3,489
Basic Earnings per Common Share (1)
Net income attributable to Verizon	$	.58		$	.02		$	.03		$	.63
Diluted Earnings per Common Share (1)	$	.58		$	.02		$	.03		$	.63
Net income attributable to Verizon

(dollars in millions, except per share amounts)

				Special and Non-Recurring Items
Unaudited	3 Mos. Ended 3/31/08 Reported (GAAP)			Merger Integration Costs			Access Line Spin-Off Related Charges			Impact of Divested Operations			3 Mos. Ended 3/31/08 Before Special Items
Operating Revenues	$	23,833		$	—		$	—		$	(258	)	$	23,575
Operating Expenses
Cost of services and sales		9,517			(5	)		(16	)		(101	)		9,395
Selling, general & administrative expense		6,401			(24	)		(87	)		(53	)		6,237
Depreciation and amortization expense		3,582			—			—			(60	)		3,522
Total Operating Expenses		19,500			(29	)		(103	)		(214	)		19,154
Operating Income		4,333			29			103			(44	)		4,421
Operating income impact of divested operations		—			—			—			44			44
Equity in earnings of unconsolidated businesses		97			—			—			—			97
Other income and (expense), net		23			—			—			—			23
Interest expense		(459	)		—			—			—			(459	)
Income Before Provision for Income Taxes		3,994			29			103			—			4,126
Provision for income taxes		(945	)		(11	)		(22	)		—			(978	)
Net income	$	3,049		$	18		$	81		$	—		$	3,148
Net income attributable to noncontrolling interest		1,407			—			—			—			1,407
Net income attributable to Verizon		1,642			18			81			—			1,741
Net income	$	3,049		$	18		$	81		$	—		$	3,148
Basic Earnings per Common Share (1)
Net income attributable to Verizon	$	.57		$	.01		$	.03		$	—		$	.61
Diluted Earnings per Common Share (1)
Net income attributable to Verizon	$	.57		$	.01		$	.03		$	—		$	.61

Footnote:

(1) EPS totals may not add due to rounding.

Note: See www.verizon.com/investor for a reconciliation of other non-GAAP measures.

Verizon Communications Inc.

Selected Financial and Operating Statistics

(dollars in millions, except per share amounts)

Unaudited	3/31/09			3/31/08
Debt to debt and Verizon’s equity ratio-end of period (1)		62.3	%		41.6	%
Book value per common share (1)	$	14.73		$	17.64
Common shares outstanding (in millions)
End of period		2,841			2,851
Total employees		237,255			230,228
Unaudited	3 Mos. Ended 3/31/09			3 Mos. Ended 3/31/08
Capital expenditures (including capitalized software)
Domestic Wireless	$	1,551		$	1,722
Wireline		2,003			2,379
Other		153			119
Total	$	3,707		$	4,220
Cash dividends declared per common share	$	.460		$	.430

Footnote:

(1) Calculations are based on the equity position attributable to Verizon, which excludes noncontrolling interests.

Verizon Communications Inc.

Condensed Consolidated Balance Sheets

(dollars in millions)

Unaudited	3/31/09			12/31/08			$ Change
Assets
Current assets
Cash and cash equivalents	$	3,979		$	9,782		$	(5,803	)
Short-term investments		372			509			(137	)
Accounts receivable, net		11,989			11,703			286
Inventories		2,195			2,092			103
Prepaid expenses and other		3,343			1,989			1,354
Total current assets		21,878			26,075			(4,197	)
Plant, property and equipment		221,500			215,605			5,895
Less accumulated depreciation		131,645			129,059			2,586
		89,855			86,546			3,309
Investments in unconsolidated businesses		3,574			3,393			181
Wireless licenses		70,873			61,974			8,899
Goodwill		22,531			6,035			16,496
Other intangible assets, net		7,299			5,199			2,100
Other investments		—			4,781			(4,781	)
Other assets		10,841			8,349			2,492
Total Assets	$	226,851		$	202,352		$	24,499
Liabilities and Equity
Current liabilities
Debt maturing within one year	$	13,459		$	4,993		$	8,466
Accounts payable and accrued liabilities		14,403			13,814			589
Other		7,207			7,099			108
Total current liabilities		35,069			25,906			9,163
Long-term debt		55,674			46,959			8,715
Employee benefit obligations		32,149			32,512			(363	)
Deferred income taxes		16,998			11,769			5,229
Other liabilities		6,407			6,301			106
Equity
Common stock		297			297			—
Contributed capital		40,108			40,291			(183	)
Reinvested earnings		19,588			19,250			338
Accumulated other comprehensive loss		(13,387	)		(13,372	)		(15	)
Common stock in treasury, at cost		(4,837	)		(4,839	)		2
Deferred compensation - employee stock ownership plans and other		82			79			3
Noncontrolling interest		38,703			37,199			1,504
Total equity		80,554			78,905			1,649
Total Liabilities and Equity	$	226,851		$	202,352		$	24,499

The unaudited consolidated balance sheets are based on preliminary information.

Verizon Communications Inc.

Condensed Consolidated Statements of Cash Flows

(dollars in millions)

Unaudited	3 Mos. Ended 3/31/09			3 Mos. Ended 3/31/08			$ Change
Cash Flows From Operating Activities
Net income	$	3,210		$	3,049		$	161
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization expense		4,028			3,582			446
Employee retirement benefits		502			407			95
Deferred income taxes		604			682			(78	)
Provision for uncollectible accounts		358			298			60
Equity in earnings of unconsolidated businesses, net of dividends received		(117	)		(90	)		(27	)
Changes in current assets and liabilities, net of effects from acquisition/disposition of businesses		(393	)		(564	)		171
Other, net		(1,772	)		(1,974	)		202
Net cash provided by operating activities		6,420			5,390			1,030
Cash Flows From Investing Activities
Capital expenditures (including capitalized software)		(3,707	)		(4,220	)		513
Acquisitions of licenses, investments and businesses, net of cash acquired		(5,118	)		(931	)		(4,187	)
Net change in short-term investments		80			241			(161	)
Other, net		(14	)		92			(106	)
Net cash used in investing activities		(8,759	)		(4,818	)		(3,941	)
Cash Flows From Financing Activities
Proceeds from long-term borrowings		7,052			4,194			2,858
Repayments of long-term borrowings and capital lease obligations		(16,865	)		(1,182	)		(15,683	)
Increase in short-term obligations, excluding current maturities		7,908			2,929			4,979
Dividends paid		(1,307	)		(1,237	)		(70	)
Proceeds from sale of common stock		—			9			(9	)
Purchase of common stock for treasury		—			(1,001	)		1,001
Other, net		(252	)		48			(300	)
Net cash provided by (used in) financing activities		(3,464	)		3,760			(7,224	)
Increase (decrease) in cash and cash equivalents		(5,803	)		4,332			(10,135	)
Cash and cash equivalents, beginning of period		9,782			1,153			8,629
Cash and cash equivalents, end of period	$	3,979		$	5,485		$	(1,506	)

Verizon Communications Inc.

Verizon Wireless – Selected Financial Results

(dollars in millions)

Unaudited	3 Mos. Ended 3/31/09			3 Mos. Ended 3/31/08			% Change
Revenues
Service revenues	$	13,075		$	10,145		28.9
Equipment and other		2,047			1,524		34.3
Total Revenues		15,122			11,669		29.6
Operating Expenses
Cost of services and sales		4,660			3,585		30.0
Selling, general & administrative expense		4,442			3,529		25.9
Depreciation and amortization expense		1,749			1,300		34.5
Total Operating Expenses		10,851			8,414		29.0
Operating Income	$	4,271		$	3,255		31.2
Operating Income Margin		28.2	%		27.9	%

Verizon Communications Inc. Verizon Wireless – Selected Operating Statistics	(numbers in thousands)
Unaudited	3/31/09		3/31/08		% Change
Total Customers	86,552		67,178		28.8
Retail Customers	84,095		65,186		29.0
Unaudited	3 Mos. Ended 3/31/09		3 Mos. Ended 3/31/08		% Change
Total Customer net adds in period (1)	14,496		1,471		*
Retail Customer net adds in period (2)	14,074		1,451		*
Total churn rate	1.47	%	1.19	%
Retail churn rate	1.47	%	1.18	%

Footnotes:

(1) Includes acquisitions and adjustments of 13,219 customers in the first quarter of 2009.

(2) Includes acquisitions and adjustments of 12,813 customers in the first quarter of 2009.

The segment financial results above are adjusted to exclude the effects of special and non-recurring items. The company’s chief decision makers exclude these items in assessing business unit performance, primarily due to their non-operational nature.

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 Financial Results

(dollars in millions)

Unaudited	3 Mos. Ended 3/31/09			3 Mos. Ended 3/31/08			% Change
Wireline Operating Revenues(1)
Mass Markets	$	4,924		$	4,892		0.7
Global Enterprise		3,743			3,876		(3.4	)
Global Wholesale Services		2,389			2,632		(9.2	)
Other		511			626		(18.4	)
Total Operating Revenues		11,567			12,026		(3.8	)
Operating Expenses (1)
Cost of services and sales		5,895			6,081		(3.1	)
Selling, general & administrative expense		2,766			2,696		2.6
Depreciation and amortization expense		2,215			2,209		0.3
Total Operating Expenses		10,876			10,986		(1.0	)
Operating Income	$	691		$	1,040		(33.6	)
Operating Income Margin		6.0	%		8.6	%

Verizon Communications Inc. Wireline – Selected Operating Statistics	(numbers in thousands)
Unaudited	3/31/09	3/31/08	% Change
Switched access lines in service
Total Residence (includes Primary residence)	20,285	23,189	(12.5	)
Primary residence	17,621	19,669	(10.4	)
Business	14,685	15,532	(5.5	)
Public	227	283	(19.8	)
Total	35,197	39,004	(9.8	)
Broadband connections	8,925	8,276	7.8
FIOS Internet Subscribers	2,779	1,787	55.5
FIOS TV Subscribers	2,217	1,206	83.8

Footnotes:

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

The segment financial results above are adjusted to exclude the effects of special and non-recurring items. The company’s chief decision makers exclude these items in assessing business unit performance, primarily due to their non-operational nature.

Intersegment transactions have not been eliminated.

Verizon Communications Inc.

Other Reconciliations - Free Cash Flow

		(dollars in millions)
Unaudited	3/31/2009			3/31/2008
Verizon Free Cash Flow
Net cash provided by operating activities	$	6,420		$	5,390
Less: Capital expenditures		3,707			4,220
Free Cash Flow	$	2,713		$	1,170
Other Reconciliations – Verizon Wireless
		(dollars in millions)
Unaudited	3 Mos. Ended 3/31/09			3 Mos. Ended 3/31/08
Segment operating income:
Verizon Wireless	$	4,271		$	3,255
Wireline		691			1,040
Total segments		4,962			4,295
Corporate and other		(22	)		126
Consolidated operating income	$	4,940		$	4,421
Verizon Wireless EBITDA
Operating income	$	4,271		$	3,255
Add depreciation and amortization expense		1,749			1,300
Verizon Wireless EBITDA	$	6,020		$	4,555
Verizon Wireless total revenues	$	15,122		$	11,669
Verizon Wireless service revenues	$	13,075		$	10,145
Verizon Wireless operating income margin		28.2	%		27.9	%
Verizon Wireless EBITDA service revenues margin		46.0	%		44.9	%

(dollars in millions, except Cash Expense per Customer)

Unaudited	3 Mos. Ended 3/31/09			3 Mos. Ended 3/31/08
Verizon Wireless Cash Expense Per Customer
Domestic Wireless cost of services and sales	$	4,660		$	3,585
Domestic Wireless selling, general & administrative expense		4,442			3,529
Less equipment and other revenue		(2,047	)		(1,524	)
Cash expense	$	7,055		$	5,590
Cumulative average customer (millions)		257.70			199.29
Cash expense per customer	$	27.38		$	28.05

Verizon Communications Inc.

Other Reconciliations –

Pro Forma Combined Selected Financial Results

For the Year Ended December 31, 2008

(dollars in millions)

	Historical		Pro Forma
Unaudited	Verizon (1)		Adjustments (2)		Combined
Operating Revenues	$	97,096	$	9,156	$	106,252
Operating Expenses
Cost of services and sales	$	38,801	$	2,497	$	41,298
Selling, general & administrative expense		25,723		3,210		28,933
Depreciation and amortization expense		14,505		1,155		15,660
Total Operating Expenses		79,029		6,862		85,891
Operating Income	$	18,067	$	2,294	$	20,361

For the Year Ended December 31, 2008 by Quarter

(dollars in millions)

	2008 (2)
Unaudited	1st Quarter		2nd Quarter		3rd Quarter		4th Quarter		Annual
Operating Revenues	$	25,752	$	26,366	$	27,099	$	27,035	$	106,252
Y/Y % Change		6.1		5.3		5.8		5.2		5.6
Operating Expenses
Cost of services and sales	$	10,006	$	10,068	$	10,676	$	10,548	$	41,298
Selling, general & administrative expense		6,992		7,265		7,409		7,267		28,933
Depreciation and amortization expense		3,811		3,872		3,941		4,036		15,660
Total Operating Expenses		20,809		21,205		22,026		21,851		85,891
Operating Income	$	4,943	$	5,161	$	5,073	$	5,184	$	20,361
Y/Y % Change		15.8		12.1		6.8		10.5		11.2

(1) Selected financial results before special items adjusted for the adoption of SFAS No. 160, which requires that net income be reported on a consolidated basis and then attributed to controlling and noncontrolling interests. See www.verizon.com/investor for a reconciliation of these non-GAAP measures.

(2) The unaudited pro forma information contains the actual combined operating results of Verizon and Alltel Corporation (Alltel), with the results as of January 1, 2008 adjusted to include the pro forma impact of the elimination of transactions between Verizon and Alltel; conforming adjustments consisting primarily of reclassifications between service revenue and equipment and other revenue, as well as between cost of service and selling, general and administrative expenses to conform with Verizon's classification of these items in its statement of income; the elimination of management fees paid by Alltel to its former owners for ongoing consulting and management advisory services; and the adjustment of amortization of acquired intangible assets and depreciation of fixed assets based on the preliminary purchase price allocation.

Verizon Communications Inc.

Other Reconciliations –

Wireless Pro Forma Selected Financial Results

For the Year Ended December 31, 2008

(dollars in millions)

	Historical		Pro Forma
Unaudited	Verizon Wireless		Adjustments (1)		Combined
Revenues
Service revenues	$	42,635	$	7,082	$	49,717
Equipment and other		6,697		2,158		8,855
Total Revenues		49,332		9,240		58,572
Operating Expenses
Cost of services and sales	$	15,660	$	2,581	$	18,241
Selling, general & administrative expense		14,273		3,210		17,483
Depreciation and amortization expense		5,405		1,155		6,560
Total Operating Expenses		35,338		6,946		42,284
Operating Income	$	13,994	$	2,294	$	16,288

For the Year Ended December 31, 2008 by Quarter

		(dollars in millions)
	2008 (1)
Unaudited	1st Quarter		2nd Quarter		3rd Quarter		4th Quarter		Annual
Revenues
Service revenues	$	11,828	$	12,242	$	12,750	$	12,897	$	49,717
Equipment and other		2,043		2,140		2,316		2,356		8,855
Total Revenues		13,871		14,382		15,066		15,253		58,572
Y/Y % Change		12.9		11.4		12.1		12.3		12.2
Operating Expenses
Cost of services and sales	$	4,221	$	4,375	$	4,832	$	4,813	$	18,241
Selling, general & administrative expense		4,284		4,354		4,528		4,317		17,483
Depreciation and amortization expense		1,588		1,612		1,655		1,705		6,560
Total Operating Expenses		10,093		10,341		11,015		10,835		42,284
Operating Income	$	3,778	$	4,041	$	4,051	$	4,418	$	16,288
Y/Y % Change		20.3		16.1		14.3		29.9		20.1

(1) The unaudited pro forma information contains the actual combined operating results of Verizon Wireless and Alltel Corporation (Alltel), with the results as of January 1, 2008 adjusted to include the pro forma impact of the elimination of transactions between Verizon Wireless and Alltel; conforming adjustments consisting primarily of reclassifications between service revenue and equipment and other revenue, as well as between cost of service and selling, general and administrative expenses to conform with Verizon Wireless' classification of these items in its statement of income; the elimination of management fees paid by Alltel to its former owners for ongoing consulting and management advisory services; and the adjustment of amortization of acquired intangible assets and depreciation of fixed assets based on the preliminary purchase price allocation.

Verizon Communications Inc.

Other Reconciliations – Verizon Wireless Pro Forma

(dollars in millions)

Unaudited	3 Mos. Ended 3/31/08
Segment operating income:
Verizon Wireless	$	3,778
Wireline		1,040
Total segments		4,818
Corporate and other		125
Consolidated operating income	$	4,943
Verizon Wireless EBITDA
Operating income	$	3,778
Add: depreciation and amortization expense		1,588
Verizon Wireless EBITDA	$	5,366
Verizon Wireless total revenues	$	13,871
Verizon Wireless service revenues	$	11,828
Verizon Wireless operating income margin		27.2	%
Verizon Wireless EBITDA service revenues margin		45.4	%