Verizon Communications Inc.

Condensed Consolidated Statements of Income

(dollars in millions, except per share amounts)

Unaudited

3 Mos. Ended 12/31/09

3 Mos. Ended 12/31/08

% Change

12 Mos. Ended 12/31/09

12 Mos. Ended 12/31/08

% Change

Operating Revenues Operating Expenses Cost of services and sales Selling, general & administrative expense Depreciation and amortization expense Total Operating Expenses Operating Income Equity in earnings of unconsolidated businesses Other income and (expense), net Interest expense Income Before Provision for Income Taxes Income tax (provision)/benefit Net income

27,091

24,645

9.9

107,808

97,354

10.7

12,514 9,407 4,241 26,162 929 131 13 (686) 387 714 1,101 1,754 (653) 1,101

9,976 7,090 3,747 20,813 3,832 109 62 (517) 3,486 (555) 2,931 1,696 1,235 2,931

25.4 32.7 13.2 25.7 (75.8) 20.2 (79.0) 32.7 (88.9) * (62.4) 3.4 * (62.4)

44,299 32,950 16,532 93,781 14,027 553 90 (3,102) 11,568 (1,210) 10,358 6,707 3,651 10,358

39,007 26,898 14,565 80,470 16,884 567 282 (1,819) 15,914 (3,331) 12,583 6,155 6,428 12,583

13.6 22.5 13.5 16.5 (16.9) (2.5) (68.1) 70.5 (27.3) (63.7) (17.7) 9.0 (43.2) (17.7)

Net income attributable to noncontrolling interest Net income (loss) attributable to Verizon
Net Income Basic Earnings per Common Share Net income attributable to Verizon Weighted average number of common shares (in millions) Diluted Earnings per Common Share Net income attributable to Verizon
(1)

(.23) 2,841

.43 2,841

1.29 2,841

2.26 2,849

(42.9)

(.23)

.43

1.29

2.26

(42.9)

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

2,841

2,841

2,841

2,850

Footnotes:
(1) Diluted Earnings per Share includes the dilutive effect of shares issuable under our stock-based compensation plans, which represents the only potential dilution. * Not meaningful

Verizon Communications Inc. Condensed Consolidated Statements of Income Before Special Items

(dollars in millions, except per share amounts)

Unaudited

3 Mos. Ended 12/31/09

3 Mos. Ended 12/31/08

% Change

12 Mos. Ended 12/31/09

12 Mos. Ended 12/31/08

% Change

Operating Revenues (1) Domestic Wireless Wireline Other Total Operating Revenues Operating Expenses (1) Cost of services and sales Selling, general & administrative expense Depreciation and amortization expense Total Operating Expenses Operating Income Operating income impact of divested operations (1) Equity in earnings of unconsolidated businesses Other income and (expense), net Interest expense Income Before Provision for Income Taxes Provision for income taxes Net Income Before Special Items

15,732 11,456 (97) 27,091

12,846 11,917 (118) 24,645

22.5 (3.9) (17.8) 9.9

62,131 46,080 (403) 107,808

49,332 48,214 (450) 97,096

25.9 (4.4) (10.4) 11.0

11,004 7,341 4,156 22,501 4,590 131 13 (686) 4,048 (712) 3,336 1,810 1,526 3,336

9,905 6,417 3,747 20,069 4,576 109 110 (517) 4,278 (855) 3,423 1,698 1,725 3,423

11.1 14.4 10.9 12.1 0.3 20.2 (88.2) 32.7 (5.4) (16.7) (2.5) 6.6 (11.5) (2.5)

42,622 29,491 16,215 88,328 19,480 553 92 (2,847) 17,278 (3,367) 13,911 7,106 6,805 13,911

38,801 25,723 14,505 79,029 18,067 44 567 330 (1,819) 17,189 (3,797) 13,392 6,157 7,235 13,392

9.8 14.6 11.8 11.8 7.8 (100.0) (2.5) (72.1) 56.5 0.5 (11.3) 3.9 15.4 (5.9) 3.9

Net income attributable to noncontrolling interest Net income attributable to Verizon

Net Income Before Special Items Basic Adjusted Earnings per Common Share Net income attributable to Verizon Weighted average number of common shares (in millions) Diluted Adjusted Earnings per Common Share Net income attributable to Verizon Weighted average number of common shares-assuming dilution (in millions)
(2)

.54 2,841

.61 2,841

(11.5)

2.40 2,841

2.54 2,849

(5.5)

.54

.61

(11.5)

2.40

2.54

(5.5)

2,841

2,841

2,841

2,850

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 Expenses $ $ $ $ $ $ $ $ 258 214

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

Verizon Communications Inc. Condensed Consolidated Statements of Income - Reconciliations

(dollars in millions, except per share amounts)

Special and Non-Recurring Items 3 Mos. Ended 12/31/09 Reported (GAAP) Merger Integration and Acquisition Costs Severance, Pension and Benefit Charges Access Line SpinOff and Other Charges 3 Mos. Ended 12/31/09 Before Special Items

Unaudited

Operating Revenues Operating Expenses Cost of services and sales Selling, general & administrative expense Depreciation and amortization expense Total Operating Expenses Operating Income Equity in earnings of unconsolidated businesses Other income and (expense), net Interest expense Income Before Provision for Income Taxes Income tax (provision)/benefit Net income

27,091 12,514 9,407 4,241 26,162 929 131 13 (686) 387 714 1,101

(31) (134) (85) (250) 250 -

(1,444) (1,576) (3,020) 3,020 -

(35) (356) (391) 391 -

27,091 11,004 7,341 4,156 22,501 4,590 131 13 (686) 4,048 (712) 3,336 1,810 1,526 3,336

250 (123) 127 $ 56 71 127

3,020 (1,158) 1,862 $ 1,862 1,862

391 (145) 246 $ 246 246

Net income attributable to noncontrolling interest Net income (loss) attributable to Verizon
Net income Basic Earnings per Common Share Net income attributable to Verizon
(1)

1,754 (653) 1,101 $

$
(1)

(.23) $

.02

.66

.09

.54

Diluted Earnings per Common Share Net income attributable to Verizon

(.23) $

.02

.66

.09

.54

(dollars in millions, except per share amounts)

Special and Non-Recurring Items 3 Mos. Ended 12/31/08 Reported (GAAP) Merger Integration Costs 3 Mos. Ended 12/31/08 Severance, Pension and Investment- Related Before Special Benefit Charges Charges Items

Unaudited

Operating Revenues Operating Expenses Cost of services and sales Selling, general & administrative expense Depreciation and amortization expense Total Operating Expenses Operating Income Equity in earnings of unconsolidated businesses Other income and (expense), net Interest expense Income Before Provision for Income Taxes Provision for income taxes Net income

24,645

24,645

9,976 7,090 3,747 20,813 3,832 109 62 (517) 3,486 (555) 2,931 $ 1,696 1,235 2,931

(6) (53) (59) 59 59 (22) 37 $ 2 35 37

(65) (620) (685) 685 685 (261) 424 $ 424 424

48 48 (17) 31 $ 31 31

9,905 6,417 3,747 20,069 4,576 109 110 (517) 4,278 (855) 3,423 1,698 1,725 3,423

Net income attributable to noncontrolling interest Net income attributable to Verizon

Net income Basic Earnings per Common Share Net income attributable to Verizon Diluted Earnings per Common Share Net income attributable to Verizon Footnote: (1) EPS totals may not add due to rounding.
Note: See www.verizon.com/investor for a reconciliation of other non-GAAP measures.
(1) (1)

.43

.01

.15

.01

.61

.43

.01

.15

.01

.61

Verizon Communications Inc. Condensed Consolidated Statements of Income - Reconciliations

(dollars in millions, except per share amounts)

Special and Non-Recurring Items 12 Mos. Ended 12/31/09 Reported (GAAP) Merger Integration Severance, Pension Access Line Spinand Acquisition and Benefit Off and Other Costs Charges Charges 12 Mos. Ended 12/31/09 Before Special Items

Unaudited

Operating Revenues Operating Expenses Cost of services and sales Selling, general & administrative expense Depreciation and amortization expense Total Operating Expenses Operating Income Equity in earnings of unconsolidated businesses Other income and (expense), net Interest expense Income Before Provision for Income Taxes Provision for income taxes Net income

107,808 44,299 32,950 16,532 93,781 14,027 553 90 (3,102)

(195) (442) (317) (954) 954 2 255

(1,444) (2,602) (4,046) 4,046 -

(38) (415) (453) 453 -

107,808 42,622 29,491 16,215 88,328 19,480 553 92 (2,847) 17,278 (3,367) 13,911 7,106 6,805 13,911

11,568 (1,210) 10,358 $ 6,707 3,651 10,358

1,211 (432) 779 $ 399 380 779

4,046 (1,559) 2,487 $ 2,487 2,487

453 (166) 287 $ 287 287

Net income attributable to noncontrolling interest Net income attributable to Verizon

Net income Basic Earnings per Common Share Net income attributable to Verizon
(1)

$
(1)

1.29

.13

.88

.10

2.40

Diluted Earnings per Common Share Net income attributable to Verizon

1.29

.13

.88

.10

2.40

(dollars in millions, except per share amounts)

Special and Non-Recurring Items 12 Mos. Ended 12/31/08 Reported (GAAP) Access Line SpinOff Related Charges Severance, Pension and Benefit Charges Impact of Divested Operations 12 Mos. Ended 12/31/08 Before Special Items

Unaudited

Merger Integration Costs

InvestmentRelated Charges

Operating Revenues Operating Expenses Cost of services and sales Selling, general & administrative expense Depreciation and amortization expense Total Operating Expenses Operating Income Operating income impact of divested operations Equity in earnings of unconsolidated businesses Other income and (expense), net Interest expense Income Before Provision for Income Taxes Provision for income taxes Net income

97,354 39,007 26,898 14,565 80,470 16,884 567 282 (1,819)

(24) (150) (174) 174 -

(16) (87) (103) 103 -

48 -

(65) (885) (950) 950 -

(258) $ (101) (53) (60) (214) (44) 44 -

97,096 38,801 25,723 14,505 79,029 18,067 44 567 330 (1,819) 17,189 (3,797) 13,392 6,157 7,235 13,392

15,914 (3,331) 12,583 $ 6,155 6,428 12,583

174 (65) 109 $ 2 107 109

103 (22) 81 $ 81 81

48 (17) 31 $ 31 31

950 (362) 588 $ 588 588

Net income attributable to noncontrolling interest Net income attributable to Verizon

Net income Basic Earnings per Common Share Net income attributable to Verizon
(1)

$
(1)

2.26

.03

.03

.01

.21

2.54

Diluted Earnings per Common Share Net income attributable to Verizon Footnote: (1) EPS totals may not add due to rounding.

2.26

.03

.03

.01

.21

2.54

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

(1)

12/31/09

12/31/08

Debt to debt and Verizon's equity ratio-end of period Book value per common share
(1)

59.9% $ 14.67 $

55.5% 14.68

Common shares outstanding (in millions) End of period Total employees

2,836 222,927

2,841 223,880

Unaudited

3 Mos. Ended 12/31/09

3 Mos. Ended 12/31/08

12 Mos. Ended 12/31/09

12 Mos. Ended 12/31/08

Capital expenditures (including capitalized software) Domestic Wireless Wireline Other Total

2,018 2,278 301 4,597

1,787 2,479 397 4,663

7,152 8,892 1,003 17,047

6,510 9,797 931 17,238

Cash dividends declared per common share

0.475

0.460

1.870

1.780

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

12/31/09

12/31/08

$ Change

Assets Current assets Cash and cash equivalents Short-term investments Accounts receivable, net Inventories Prepaid expenses and other Total current assets Plant, property and equipment Less accumulated depreciation Investments in unconsolidated businesses Wireless licenses Goodwill Other intangible assets, net Other investments Other assets Total Assets Liabilities and Equity Current liabilities Debt maturing within one year Accounts payable and accrued liabilities Other Total current liabilities Long-term debt Employee benefit obligations Deferred income taxes Other liabilities Equity Common stock Contributed capital Reinvested earnings Accumulated other comprehensive loss Common stock in treasury, at cost Deferred compensation - employee stock ownership plans and other Noncontrolling interest Total equity Total Liabilities and Equity

2,009 490 12,573 2,289 5,247 22,608 228,518 137,052 91,466 3,535 72,067 22,472 6,764 8,339 227,251

9,782 509 11,703 2,092 1,989 26,075 215,605 129,059 86,546 3,393 61,974 6,035 5,199 4,781 8,349 202,352

(7,773) (19) 870 197 3,258 (3,467) 12,913 7,993 4,920 142 10,093 16,437 1,565 (4,781) (10) 24,899

7,205 15,223 6,708 29,136 55,051 32,622 19,310 6,765

4,993 13,814 7,099 25,906 46,959 32,512 11,769 6,301

2,212 1,409 (391) 3,230 8,092 110 7,541 464

297 40,108 17,592 (11,479) (5,000) 88 42,761 84,367 227,251

297 40,291 19,250 (13,372) (4,839) 79 37,199 78,905 202,352

(183) (1,658) 1,893 (161) 9 5,562 5,462 24,899

The unaudited consolidated balance sheets are based on preliminary information.

Verizon Communications Inc. Condensed Consolidated Statements of Cash Flows

(dollars in millions)

Unaudited

12 Mos. Ended 12/31/09

12 Mos. Ended 12/31/08

$ Change

Cash Flows From Operating Activities Net income Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization expense Employee retirement benefits Deferred income taxes Provision for uncollectible accounts Equity in earnings of unconsolidated businesses, net of dividends received Changes in current assets and liabilities, net of effects from acquisition/disposition of businesses Other, net Net cash provided by operating activities Cash Flows From Investing Activities Capital expenditures (including capitalized software) Acquisitions of licenses, investments and businesses, net of cash acquired Net change in short-term investments Other, net Net cash used in investing activities Cash Flows From Financing Activities Proceeds from long-term borrowings Repayments of long-term borrowings and capital lease obligations Increase (decrease) in short-term obligations, excluding current maturities Dividends paid Proceeds from sale of common stock Purchase of common stock for treasury Other, net Net cash provided by (used in) financing activities Increase (decrease) in cash and cash equivalents Cash and cash equivalents, beginning of period Cash and cash equivalents, end of period

10,358

12,583

(2,225)

16,532 5,095 1,384 1,306 389 (2,511) (988) 31,565

14,565 1,955 2,183 1,085 212 (3,033) (1,993) 27,557

1,967 3,140 (799) 221 177 522 1,005 4,008

(17,047) (5,958) 84 (410) (23,331)

(17,238) (15,904) 1,677 (114) (31,579)

191 9,946 (1,593) (296) 8,248

12,040 (19,260) (1,652) (5,271) (1,864) (16,007) (7,773) 9,782 2,009

21,598 (4,146) 2,389 (4,994) 16 (1,368) (844) 12,651 8,629 1,153 9,782

(9,558) (15,114) (4,041) (277) (16) 1,368 (1,020) (28,658) (16,402) 8,629 (7,773)

Verizon Communications Inc. Verizon Wireless Selected Financial Results

(dollars in millions) Unaudited

3 Mos. Ended 12/31/09

3 Mos. Ended 12/31/08

% Change

12 Mos. Ended 12/31/09

12 Mos. Ended 12/31/08

% Change

Revenues Service revenues Equipment and other Total Revenues Operating Expenses Cost of services and sales Selling, general & administrative expense Depreciation and amortization expense Total Operating Expenses Operating Income Operating Income Margin

13,548 2,184 15,732

11,063 1,783 12,846

22.5 22.5 22.5

53,497 8,634 62,131

42,635 6,697 49,332

25.5 28.9 25.9

5,239 4,396 1,796 11,431 $ 4,301 27.3% $

4,153 3,467 1,416 9,036 3,810 29.7%

26.1 26.8 26.8 26.5 12.9 $

19,749 17,847 7,030 44,626 17,505 28.2% $

15,660 14,273 5,405 35,338 13,994 28.4%

26.1 25.0 30.1 26.3 25.1

Verizon Communications Inc. Verizon Wireless Selected Operating Statistics

(numbers in thousands) Unaudited

12/31/09

12/31/08

% Change

Total Customers Retail Customers

91,249 87,523

72,056 70,021

26.6 25.0

3 Mos. Ended
Unaudited

3 Mos. Ended 12/31/08 % Change

12 Mos. Ended 12/31/09

12 Mos. Ended 12/31/08 % Change

12/31/09
(1)

Total Customer net adds in period Retail Customer net adds in period (2) Total churn rate Retail churn rate

2,236 1,232 1.42% 1.44%

1,248 1,214 1.35% 1.34%

79.2 1.5

19,193 17,502 1.44% 1.44%

6,349 6,286 1.25% 1.24%

* *

Footnotes:
(1) Includes acquisitions and adjustments of 46, 646 and (122) customers in the second, third and fourth quarter of 2008, respectively; and 13,219, 1, 79 and 20 customers in the first, second, third and fourth quarter of 2009, respectively. (2) Includes acquisitions and adjustments of 46, 627 and (139) customers in the second, third and fourth quarter of 2008, respectively; and 12,813, 1, 81 and 20 customers in the first, second, third and fourth quarter of 2009, respectively. The segment financial results above are adjusted to exclude the effects of special and non-recurring items. The company's chief decision maker excludes 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 12/31/09

3 Mos. Ended 12/31/08 % Change

12 Mos. Ended 12/31/09

12 Mos. Ended 12/31/08 % Change

Wireline Operating Revenues Mass Markets Global Enterprise Global Wholesale Other Total Operating Revenues Operating Expenses Cost of services and sales Selling, general & administrative expense Depreciation and amortization expense Total Operating Expenses Operating Income Operating Income Margin

4,925 3,744 2,413 374 11,456

4,969 3,921 2,528 499 11,917

(0.9) (4.5) (4.5) (25.1) (3.9)

19,755 14,988 9,637 1,700 46,080

19,799 15,779 10,360 2,276 48,214

(0.2) (5.0) (7.0) (25.3) (4.4)

6,094 2,726 2,345 11,165 $ 291 $ 2.5%

6,041 2,854 2,309 11,204 713 6.0%

0.9 (4.5) 1.6 (0.3) (59.2) $

24,144 10,833 9,122 44,099 1,981 4.3% $

24,274 11,047 9,031 44,352 3,862 8.0%

(0.5) (1.9) 1.0 (0.6) (48.7)

Verizon Communications Inc. Wireline Selected Operating Statistics

(numbers in thousands) Unaudited

12/31/09

12/31/08 % Change

Switched access lines in service Total Residence (includes Primary residence) Primary residence Business Public Total Broadband connections FiOS Internet Subscribers FiOS TV Subscribers

18,373 16,231 14,008 180 32,561 9,220 3,433 2,861

20,956 18,083 14,966 239 36,161 8,673 2,481 1,918

(12.3) (10.2) (6.4) (24.7) (10.0) 6.3 38.4 49.2

Footnotes:
The segment financial results above are adjusted to exclude the effects of special and non-recurring items. The company's chief decision maker excludes 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.