Verizon CFO Provides Updates on Initiatives to Enhance Shareholder Value

Share Repurchases to Increase by $200 Million to Total $1.7 Billion for


Dec 06, 2006, 00:00 ET from Verizon Communications

    NEW YORK, Dec. 6 /PRNewswire/ -- Verizon Communications Inc. (NYSE:   VZ)
 today updated investors on the progress of several initiatives designed to
 enhance shareholder value.
     At an investment conference here, Verizon CFO Doreen Toben said that
 customer demand for and usage of key strategic Verizon services are
 steadily increasing, and that adoption of new technologies is continuing to
 gain traction in the marketplace.
     She also announced that the company will further increase share
 repurchases to a total of $1.7 billion in 2006. Verizon began the year with
 a target of approximately $1 billion in share repurchases, increased that
 to $1.5 billion by mid-year and today announced it expected to exceed that
 figure by approximately $200 million.
     Toben said two recently closed transactions, involving Idearc Inc.
 (NYSE:   IAR) and Verizon Dominicana, have further strengthened Verizon's
 balance sheet and provided additional financial flexibility, creating value
 for shareholders.
     On Nov. 17, the company completed the spin-off of Idearc to Verizon
 shareholders. Idearc now owns what were the Verizon domestic print and
 Internet yellow pages directories publishing operations, and Verizon
 distributed a dividend of one share of Idearc common stock for every 20
 shares of Verizon common stock to shareholders of record.
     As a result of the spin-off, Verizon reduced total debt by more than $7
 billion in a debt-for-debt exchange and received approximately $2 billion
 in cash. Toben said that the impact of the spin-off on Verizon's
 fourth-quarter 2006 earnings, before offsets from Verizon's interest
 savings on debt, will be approximately 4 cents per fully diluted share.
     Toben added that Verizon will soon restate its financial history for
 the purposes of comparability, including its former directories business
 results in Income From Discontinued Operations. The directories business
 contributed 29 cents per share to Verizon's 2006 earnings through Nov. 17,
 and the full- year 2006 impact of the absence of Idearc earnings would be
 about 33 cents per share. The comparable amount for 2005 was 39 cents per
               Proceeds From DR Sale, Fourth Quarter Special Item
     On Dec. 1, Verizon completed the sale of its interest in Verizon
 Dominicana, which provides telecommunications services in the Dominican
 Republic, to a subsidiary of America Movil, S.A. de C.V. (NYSE:   AMX).
     This resulted in net cash proceeds of $1.7 billion. Toben said that in
 the fourth quarter Verizon will recognize a pre-tax book gain of
 approximately $50 million on the transaction and that the company will
 incur book taxes on reinvested earnings, which must be recognized upon the
 sale, of approximately $500 million. She added that the net effect will be
 treated as a special item and will not be part of fourth-quarter adjusted
 earnings (a non-GAAP measure).
     Verizon expects to include from 10 cents to 11 cents in 2006 earnings
 per share for Verizon Dominicana through Dec. 1, so the full-year impact
 would be 11 cents to 12 cents per share.
     Sales continue to proceed regarding Verizon's interests in
 Telecomunicaciones de Puerto Rico, Inc. (Puerto Rico Telephone) and
 Compania Anonima Nacional Telefonos de Venezuela (CANTV, NYSE:   VNT).
 Verizon estimates net cash proceeds of approximately $3 billion from the
 sale of its Caribbean and Latin American telecommunications operations in
 the three separate transactions, announced in April.
     Toben said the full-year 2006 earnings impact of the three sales would
 be about 22 cents per share before any interest savings effects. This
 includes about 5 cents to 6 cents per share for CANTV, which is reported as
 Income From Unconsolidated Business.
                       Steady Improvement in FiOS Metrics
     Toben also discussed financial and operational metrics for FiOS,
 Verizon's next-generation fiber-optic-based Internet and TV services. She
 said "all of our FiOS metrics are moving in the right directions and closer
 to the long- term targets" that the company announced in September. The
 FiOS initiative's dilutive impact on earnings will peak in the fourth
 quarter 2006 and first quarter 2007, Toben said, with a steady quarterly
 improvement expected through 2007.
     As previously announced, Verizon expects FiOS to generate positive
 operating income beginning in 2009, based in part on growing revenues from
 FiOS services combined with declining operational costs due to fiber
 network efficiencies. Toben noted that the impact of FiOS dilution in 2006
 and 2007 does not include costs savings related to moving a customer from
 copper-based services to fiber-based services. These savings are
 approximately $110 per line per year.
     Verizon Communications Inc. (NYSE:   VZ), a New York-based Dow 30
 company, is a leader in delivering broadband and other wireline and
 wireless communication innovations to mass market, business, government and
 wholesale customers. Verizon Wireless operates America's most reliable
 wireless network, serving nearly 57 million customers nationwide. Verizon's
 Wireline operations include Verizon Business, which operates one of the
 most expansive wholly-owned global IP networks, and Verizon Telecom, which
 is deploying the nation's most advanced fiber-optic network to deliver the
 benefits of converged communications, information and entertainment
 services to customers. For more information, visit
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     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:
 materially adverse changes in economic and industry conditions and 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; material changes
 in available technology; technology substitution; an adverse change in the
 ratings afforded our debt securities by nationally accredited ratings
 organizations; the final results of federal and state regulatory
 proceedings concerning our provision of retail and wholesale services and
 judicial review of those results; the effects of competition in our
 markets; the timing, scope and financial impacts of our deployment of
 fiber-to-the-premises broadband technology; the ability of Verizon Wireless
 to continue to obtain sufficient spectrum resources; 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; the timing of the
 closings of the sales of our Latin American and Caribbean properties; and
 the extent and timing of our ability to obtain revenue enhancements and
 cost savings following our business combination with MCI, Inc.

SOURCE Verizon Communications