Verizon Communications (VZ)

We record plant, property and
equipment at cost. Our local telephone operations’ depreciation expense is principally based on the composite group remaining life method and straight-line composite rates. This method provides for the recognition of the cost of the remaining
net investment in local telephone plant, less anticipated net salvage value, over the remaining asset lives. This method requires the periodic revision of depreciation rates.

ALIGN="justify">Plant, property and equipment of other wireline and wireless operations are generally depreciated on a straight-line basis.

ALIGN="justify">The asset lives used by our operations are presented in the following table:

When we replace, retire or otherwise dispose of depreciable plant used in our local telephone
network, we deduct the carrying amount of such plant from the respective accounts and charge it to accumulated depreciation. When the depreciable assets of our other wireline and wireless operations are retired or otherwise disposed of, the related
cost and accumulated depreciation are deducted from the plant accounts, and any gains or losses on disposition are recognized in income.

SIZE="2">We capitalize network software purchased or developed along with related plant assets. We also capitalize interest associated with the acquisition or construction of network-related assets. Capitalized interest is reported as part of the
cost of the network-related assets and as a reduction in interest expense.

In connection with our ongoing review of the average useful
lives of plant, property and equipment, we determined, effective January 1, 2009 that the average useful lives of fiber cable would be increased to 25 years from 20 to 25 years and the average useful lives of copper cable would be changed to 15
years from 13 to 18 years. These changes are not expected to have a significant impact on our depreciation expense for 2009. Effective January 1, 2008 the average useful lives of fiber cable was increased from 20 years to 20 to 25 years. This
change did not result in a significant impact to depreciation expense for 2008. Effective January 1, 2007, the average useful lives of certain of the circuit equipment was lengthened from 8 years to 9 years based on subsequent modifications to
our fiber optic cable deployment plan. The average useful lives of certain buildings at Wireline was also increased from 42 years to 45 years. The reduction in depreciation resulting from these adjustments in 2007 was partially offset by increased
depreciation resulting from the shortening of the lives of various types of wireless plant, property and equipment. While the timing and extent of current deployment plans are subject to modification, we believe the current estimates of impacted
asset lives are reasonable and subject to ongoing analysis.