Verizon Communications (VZ)

Consolidated Revenue Growth

Verizon’s total operating revenues grew 3.4 percent in the fourth quarter 2008, increasing to $24.6 billion from $23.8 billion in the fourth quarter 2007. After adjusting for the spinoff of non-strategic local exchange and related Wireline business assets early in 2008 (non-GAAP), this represents an increase of 4.6 percent. Total operating expenses in the fourth quarter 2008 increased 1.9 percent to $20.8 billion, or 4.1 percent on an adjusted basis, compared with the fourth quarter 2007.

For 2008, annual operating revenues were $97.4 billion, an increase of 4.2 percent from 2007 on a reported basis and 5.1 percent on an adjusted basis. Operating expenses totaled $80.5 billion in 2008, an increase of 3.3 percent from 2007 on a reported basis and 4.2 percent on an adjusted basis.

Continued Strong Cash Flows

Cash flows from operations totaled $26.6 billion in 2008, compared with $25.7 billion in 2007. Dividends and share repurchases totaled $6.4 billion in 2008. Capital expenditures totaled $17.2 billion in 2008, compared with $17.5 billion in 2007. For 2009, Verizon is targeting capital spending, excluding amounts related to the acquisition of Alltel Corporation, to be less than the 2008 total.

At year-end 2008, total debt was $52.0 billion, compared with $44.8 billion at the end of the third quarter 2008. Verizon ended 2008 with $9.8 billion in cash and cash equivalents, most of which was held for use in completing the acquisition of Alltel in January 2009.

Verizon News Release, Page 4