Verizon Communications (VZ)

Revenue Growth, Cash Flows Highlight Consolidated Results

Verizon’s consolidated operating revenues grew 5.5 percent in the fourth quarter 2007 and 6.0 percent in the full year, compared with fourth-quarter and full-year 2006. Total 2007 revenue was $93.5 billion, an increase of $5.3 billion over 2006. On an adjusted basis (non-GAAP), 2007 revenue increased 6.1 percent over 2006, and on a pro-forma basis (non-GAAP, calculated as if Verizon and MCI had merged on Jan. 1, 2006), this increase was 5.8 percent, or $5.2 billion.

Verizon News Release, page 4

Verizon’s operating income declined 0.6 percent to $3.4 billion, compared with the fourth quarter 2006. On an adjusted basis (non-GAAP), operating income grew 18.5 percent to $4.3 billion, compared with the fourth quarter 2006.

Operating income margin was 14.4 percent for the fourth quarter 2007 and 16.7 percent for the full year, compared with 15.2 percent in both the same periods in 2006. On an adjusted basis (non-GAAP), Verizon’s operating income margin rose to 18.2 percent in the fourth quarter 2007 and 17.9 percent for the full year, compared with 16.2 percent and 16.1 percent, respectively, for the same periods in 2006.

Cash flows from continuing operations totaled $26.3 billion in 2007. This is an increase of 14.2 percent, compared with $23.0 billion in 2006. Capital expenditures in 2007 totaled $17.5 billion, compared with $17.1 billion in 2006.

Verizon’s Board of Directors increased the quarterly dividend 6.2 percent beginning with the November 2007 payment, reflecting confidence in the company’s ability to sustain strong cash flows. Verizon also repurchased more than $1.1 billion of its shares in the fourth quarter 2007, for a total of more than $2.8 billion for the year and $4.5 billion over the past two years.

Year-end total debt was less than $31.2 billion. The company paid down more than $5 billion in debt during 2007.