Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. x Yes ¨ No

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). x Yes ¨ No

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). ¨ Yes x No

At ~~September 30, 2010, 2,826,782,631~~March 31, 2011, 2,829,078,226 shares of the registrant’s common stock were outstanding, after deducting ~~140,827,488~~138,531,893 shares held in treasury.


	Three Months Ended September 30,						Nine Months Ended September 30,						Three Months Ended March 31,
(dollars in millions, except per share amounts) (unaudited)	2010			2009			2010			2009			2011			2010

Operating Revenues	$	26,484		$	27,265		$	80,170		$	80,717		$	26,990		$	26,913

Operating Expenses
Cost of services and sales (exclusive of items shown below)		11,250			10,996			34,206			31,785			11,229			10,652
Selling, general and administrative expense		7,465			8,111			23,508			23,543			7,284			7,698
Depreciation and amortization expense		4,022			4,172			12,319			12,291			4,024			4,122

Total Operating Expenses		22,737			23,279			70,033			67,619			22,537			22,472

Operating Income		3,747			3,986			10,137			13,098			4,453			4,441
Equity in earnings of unconsolidated businesses		141			166			395			422			101			133
Other income and (expense), net		(50	)		13			12			77			36			46
Interest expense		(597	)		(704	)		(1,956	)		(2,416	)		(709	)		(680	)

Income Before Provision For Income Taxes		3,241			3,461			8,588			11,181			3,881			3,940
Provision for income taxes		(321	)		(574	)		(1,837	)		(1,924	)		(617	)		(1,622	)

Net Income	$	2,920		$	2,887		$	6,751		$	9,257		$	3,264		$	2,318


Net income attributable to noncontrolling interest	$	2,039		$	1,711		$	5,659		$	4,953		$	1,825		$	1,875
Net income attributable to Verizon		881			1,176			1,092			4,304			1,439			443

Net Income	$	2,920		$	2,887		$	6,751		$	9,257		$	3,264		$	2,318


Basic Earnings Per Common Share
Net income attributable to Verizon	$	.31		$	.41		$	.39		$	1.51		$	.51		$	.16
Weighted-average shares outstanding (in millions)		2,829			2,841			2,830			2,841			2,830			2,836

Diluted Earnings Per Common Share
Net income attributable to Verizon	$	.31		$	.41		$	.39		$	1.51		$	.51		$	.16
Weighted-average shares outstanding (in millions)		2,830			2,841			2,833			2,841			2,834			2,837

Dividends declared per common share	$	.4875		$	.4750		$	1.4375		$	1.3950		$	0.4875		$	0.4750


(dollars in millions, except per share amounts) (unaudited)	At September 30, 2010			At December 31, 2009			At March 31, 2011			At December 31, 2010

Assets
Current assets
Cash and cash equivalents	$	5,394		$	2,009		$	14,007		$	6,668
Short-term investments		581			490			723			545
Accounts receivable, net of allowances of $881 and $976		11,973			12,573
Accounts receivable, net of allowances of $859 and $876								11,028			11,781
Inventories		1,010			1,426			1,245			1,131
Prepaid expenses and other		2,383			5,247			2,920			2,223

Total current assets		21,341			21,745			29,923			22,348


Plant, property and equipment		217,859			229,381			211,704			211,655
Less accumulated depreciation		130,429			137,052			123,459			123,944

		87,430			92,329			88,245			87,711


Investments in unconsolidated businesses		3,832			3,535			3,732			3,497
Wireless licenses		72,719			72,067			73,049			72,996
Goodwill		21,933			22,472			21,993			21,988
Other intangible assets, net		5,915			6,764			5,655			5,830
Other assets		7,682			8,339			5,511			5,635

Total assets	$	220,852		$	227,251		$	228,108		$	220,005


Liabilities and Equity
Current liabilities
Debt maturing within one year	$	5,810		$	7,205		$	11,823		$	7,542
Accounts payable and accrued liabilities		16,092			15,223			13,810			15,702
Other		6,865			6,708			7,114			7,353

Total current liabilities		28,767			29,136			32,747			30,597


Long-term debt		47,360			55,051			49,374			45,252
Employee benefit obligations		31,915			32,622			27,543			28,164
Deferred income taxes		21,772			19,310			23,578			22,818
Other liabilities		6,414			6,765			6,002			6,262

Equity
Series preferred stock ($.10 par value; none issued)		–			–			–			–
Common stock ($.10 par value; 2,967,610,119 shares issued in both periods)		297			297			297			297
Contributed capital		37,921			40,108			37,914			37,922
Reinvested earnings		14,621			17,592			4,427			4,368
Accumulated other comprehensive loss		(9,835	)		(11,479	)
Accumulated other comprehensive income								1,293			1,049
Common stock in treasury, at cost		(5,276	)		(5,000	)		(5,189	)		(5,267	)
Deferred compensation – employee stock ownership plans and other		189			88			246			200
Noncontrolling interest		46,707			42,761			49,876			48,343

Total equity		84,624			84,367			88,864			86,912

Total liabilities and equity	$	220,852		$	227,251		$	228,108		$	220,005


	Nine Months Ended September 30,						Three Months Ending March 31,
(dollars in millions) (unaudited)	2010			2009			2011			2010

Cash Flows from Operating Activities
Net Income	$	6,751		$	9,257		$	3,264		$	2,318
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization expense		12,319			12,291			4,024			4,122
Employee retirement benefits		3,909			2,533			373			543
Deferred income taxes		2,332			2,672			790			2,445
Provision for uncollectible accounts		922			917			270			371
Equity in earnings of unconsolidated businesses, net of dividends received		82			21			(86	)		(120	)
Changes in current assets and liabilities, net of effects from acquisition/disposition of businesses		640			(2,337	)		(2,070	)		(1,043	)
Other, net		(1,742	)		(2,236	)		(1,530	)		(1,552	)

Net cash provided by operating activities		25,213			23,118			5,035			7,084


Cash Flows from Investing Activities
Capital expenditures (including capitalized software)		(11,843	)		(12,450	)		(4,363	)		(3,423	)
Acquisitions of licenses, investments and businesses, net of cash acquired		(1,027	)		(5,627	)		(104	)		(274	)
Proceeds from dispositions		2,594			–
Net change in short-term investments		(34	)		78			24			(40	)
Other, net		151			51			68			114

Net cash used in investing activities		(10,159	)		(17,948	)		(4,375	)		(3,623	)


Cash Flows from Financing Activities
Proceeds from long-term borrowings		–			12,040			6,440			–
Repayments of long-term borrowings and capital lease obligations		(7,941	)		(18,966	)		(552	)		(519	)
Decrease in short-term obligations, excluding current maturities		(1,097	)		(1,454	)
Increase (decrease) in short-term obligations, excluding current maturities								2,384			(97	)
Dividends paid		(4,034	)		(3,920	)		(1,379	)		(1,347	)
Proceeds from access line spin-off		3,083			–
Proceeds from sale of common stock								70			–
Other, net		(1,680	)		(1,436	)		(284	)		(470	)

Net cash used in financing activities		(11,669	)		(13,736	)
Net cash provided by (used in) financing activities								6,679			(2,433	)


Increase (decrease) in cash and cash equivalents		3,385			(8,566	)
Increase in cash and cash equivalents								7,339			1,028
Cash and cash equivalents, beginning of period		2,009			9,782			6,668			2,009

Cash and cash equivalents, end of period	$	5,394		$	1,216		$	14,007		$	3,037

The accompanying unaudited condensed consolidated financial statements have been prepared based upon Securities and Exchange Commission (SEC) rules that permit reduced disclosure for interim periods. For a more complete discussion of significant accounting policies and certain other information, you should refer to the financial statements included in the Verizon Communications Inc. (Verizon or the Company) Annual Report on Form 10-K for the year ended December 31, ~~2009.~~2010. These financial statements reflect all adjustments that are necessary for a fair presentation of results of operations and financial condition for the interim periods shown including normal recurring accruals and other items. The results for the interim periods are not necessarily indicative of results for the full year.

We have reclassified prior year amounts to conform to the current year presentation.

During the second quarter of 2010, we recorded a one-time non-cash adjustment of $268 million primarily to reduce wireless data revenues. This adjustment was recorded to properly defer previously recognized wireless data revenues that will be earned and recognized in future periods. As the amounts involved were not material to our consolidated financial statements in the current or any previous reporting period, the adjustment was recorded during the second quarter, which reduced Net income (loss) attributable to Verizon by $92 million.

In both our Domestic Wireless and Wireline segments, we offer products and services to our customers through bundled arrangements. These arrangements involve multiple deliverables which may include products, services, or a combination of products and services.

On January ~~2010,~~1, 2011, we prospectively adopted the accounting standard update regarding consolidation accounting for variable interest entities. This standard update requires an enterprise to perform an analysis to determine whether the entity’s variable interest or interests give it a controlling interest in a variable interest entity. The adoption of this standard update did not have a material impact on our condensed consolidated financial statements.

In January 2010, we adopted the accounting standard update regarding fair value measurements and disclosures, which requires additional disclosures regarding assets and liabilities measured at fair value. The adoption of this standard update did not have a material impact on our condensed consolidated financial statements.

In July 2010, the accounting standard update regarding disclosures for finance receivables and allowances for credit losses was issued. This standard update requires that entities disclose information at more disaggregated levels than currently required. We will adopt this standard update during the fourth quarter of 2010. The adoption of this standard update is not expected to have a significant impact on our consolidated financial statements.

~~In September 2009, the accounting standard update~~updates regarding revenue recognition for multiple deliverable arrangements, ~~was issued. This update requires the use of the relative selling price method when allocating revenue in these types of arrangements. This method allows~~and arrangements that include software elements. These updates require a vendor to ~~use~~allocate revenue in an arrangement using its best estimate of selling price if neither vendor specific objective evidence (VSOE) nor third party evidence (TPE) of selling price ~~exists when evaluating multiple deliverable arrangements. This~~exists. The residual method of revenue allocation is no longer permissible. These accounting standard ~~update is effective January 1, 2011~~updates do not change our units of accounting for bundled arrangements, nor do they materially change how we allocate arrangement consideration to our various products and ~~may be adopted prospectively for revenue arrangements entered into or materially modified after~~services. Accordingly, the ~~date~~adoption of ~~adoption or retrospectively for all revenue arrangements for all periods presented. We are currently evaluating the~~these standard updates did not have a significant impact ~~that this standard update will have~~ on our consolidated financial statements.

~~In September 2009, the accounting standard update regarding revenue recognition for arrangements~~ Additionally, we do not currently foresee any changes to our products, services or pricing practices that include software elements was issued. This update requires tangible products that contain software and non-software elements that work together to deliver the products’ essential functionality to be evaluated under the accounting standard regarding multiple deliverable arrangements. This standard update is effective January 1, 2011 and may be adopted prospectively for revenue arrangements entered into or materially modified after the date of adoption or retrospectively for all revenue arrangements for all periods presented. We are currently evaluating the impact that this standard update will have a significant effect on our consolidated financial ~~statements.~~statements in periods after the initial adoption, although this could change.

Our Domestic Wireless segment earns revenue by providing access to and usage of its network, which includes voice and data revenue. In general, access revenue is billed one month in advance and recognized when earned. Usage revenue is generally billed in arrears and recognized when service is rendered. Equipment sales revenue associated with the sale of wireless handsets and accessories is recognized when the products are delivered to and accepted by the customer, as this is considered to be a separate earnings process from providing wireless services. For agreements involving the resale of third-party services in which we are considered the primary obligor in the arrangements, we record the revenue gross at the time of the sale.

Wireless bundled service plans primarily consist of wireless voice and data services. The bundling of a voice plan with a text messaging plan (“Talk & Text”), for example, creates a multiple deliverable arrangement consisting of a voice component and a data component in the form of text messaging. For these arrangements revenue is allocated to each deliverable using a relative selling price method. Under this method, arrangement consideration is allocated to each separate deliverable based on our standalone selling price for each product or service, up to the amount that is not contingent upon providing additional services. For equipment sales, we currently subsidize the cost of wireless devices. The amount of this subsidy is contingent on the arrangement and terms selected by the customer. The equipment revenue is recognized up to the amount collected when the wireless device is sold.

Our Wireline segment earns revenue based upon usage of its network and facilities and contract fees. In general, fixed monthly fees for voice, video, data and certain other services are billed one month in advance and recognized when earned. Revenue from services that are not fixed in amount and are based on usage is generally billed in arrears and recognized when service is rendered.

We sell each of the services offered in bundled arrangements (i.e., voice, video and data), as well as separately; therefore each product or service has a standalone selling price. For these arrangements revenue is allocated to each deliverable using a relative selling price method. Under this method, arrangement consideration is allocated to each separate deliverable based on our standalone selling price for each product or service. These services include FiOS services, individually or in bundles, and High Speed Internet.

When we bundle equipment with maintenance and monitoring services, we recognize equipment revenue when the equipment is installed in accordance with contractual specifications and ready for the customer’s use. The maintenance and monitoring services are recognized monthly over the term of the contract as we provide the services. Long-term contracts for equipment installation are accounted for using the percentage of completion method. We use the completed contract method if we cannot estimate the costs with a reasonable degree of reliability. For certain products and services, where neither VSOE nor TPE exists, we determine relative selling price based on our best estimate of the standalone selling price taking into consideration market conditions, as well as company specific factors such as geography, competitive landscape, internal costs and general pricing practices.

At each reporting period, we monitor the credit quality of the various lessees in our portfolios. Regarding the leveraged lease portfolio, external credit reports are used where available and where not available we use internally developed indicators. These indicators or internal credit risk grades factor historic loss experience, the value of the underlying collateral, delinquency trends, industry and general economic conditions. The credit quality of our lessees vary from AAA to B-. All accounts are current as of the end of this reporting period. For each reporting period the leveraged leases within the portfolio are reviewed for indicators of impairment where it is probable the rent due according to the contractual terms of the lease will not be collected.

There were a total of approximately 24 million and 1 million stock options and restricted stock units outstanding included in the computation of diluted earnings per common share for the three ~~and nine~~ months ended ~~September 30, 2010. There were no dilutive stock options outstanding included in the computation of diluted earnings per common share for the three~~March 31, 2011 and ~~nine months ended September 30, 2009.~~2010, respectively. Certain outstanding options to purchase shares were not included in the computation of diluted earnings per common share because to do so would have been anti-dilutive for the period, including approximately 5920 million weighted-average shares and 7890 million weighted-average shares for the three ~~and nine~~ months ended ~~September 30,~~March 31, 2011 and 2010, ~~respectively, and approximately 111 million weighted-average shares and 115 million weighted-average shares for the three and nine months ended September 30, 2009,~~ respectively.

During April 2011, we closed our previously announced acquisition of Terremark Worldwide, Inc. (Terremark), a global provider of information technology infrastructure and cloud services, for $19 per share in cash (or approximately $1.4 billion). Immediately prior to the closing, Terremark had debt obligations of approximately $0.6 billion. The acquisition was completed via a “short-form” merger under Delaware law through which Terremark became a wholly owned subsidiary of Verizon. Prior to the closing of the merger, Verizon had acquired approximately 96.6% of the outstanding shares of Terremark via a tender offer. The acquisition is expected to enhance Verizon’s offerings to business and government customers globally.

The acquisition will be accounted for as a business combination. While Verizon has commenced the appraisals necessary to assess the fair values of the tangible and intangible assets acquired and liabilities assumed, the amounts of assets and liabilities arising from contingencies and the amount of goodwill to be recognized as of the acquisition date, the initial purchase price allocation is not yet available.

On July 1, 2010, after receiving regulatory approval, we completed the spin-off of the shares of ~~Spinco~~a newly formed subsidiary of Verizon (Spinco) to Verizon stockholders and the merger of Spinco with Frontier resulting in Verizon stockholders collectively owning approximately 68 percent of Frontier’s equity which was outstanding immediately following the merger. Frontier issued approximately 678.5 million shares of Frontier common stock in the aggregate to Verizon stockholders in the merger, and Verizon stockholders received one share of Frontier common stock for every 4.165977 shares of Verizon common stock they owned as of June 7, 2010. Verizon stockholders received cash in lieu of any fraction of a share of Frontier common stock to which they otherwise were entitled.

At the time of the spin-off and the merger, Spinco held defined assets and liabilities of the local exchange business and related landline activities of Verizon in Arizona, Idaho, Illinois, Indiana, Michigan, Nevada, North Carolina, Ohio, Oregon, South Carolina, Washington, West Virginia and Wisconsin, and in portions of California bordering Arizona, Nevada and Oregon, including Internet access and long distance services and broadband video provided to designated customers in those areas. The transactions did not involve any assets or liabilities of Verizon Wireless. The merger resulted in Frontier acquiring approximately 4 million access lines and certain related businesses from Verizon, which collectively generated revenues of approximately $4 billion for Verizon's Wireline segment during 2009 and approximately $1.7 billion of revenue for Verizon’s Wireline segment during the six months ended
~~June 30, 2010.~~

Pursuant to the terms of Verizon’s equity incentive plans, shortly following the closing of the spin-off and the merger, the number of outstanding and unvested restricted stock units (RSUs) and performance stock units (PSUs) held by current and former Verizon employees (including Verizon employees who became employees of Frontier in connection with the merger) was increased to reflect a number of additional units approximately equal to the cash value of the Frontier common stock that the holders of the RSUs and PSUs would have received with respect to hypothetical shares of Verizon common stock subject to awards under those plans. In addition, the exercise prices and number of shares of Verizon common stock underlying stock options to purchase shares of Verizon common stock previously granted to employees under equity incentive plans were adjusted pursuant to the terms of those plans to take into account the decrease in the value of Verizon common stock immediately following the spin-off and merger.

The total value of the transaction to Verizon and its stockholders was approximately $8.6 billion. Verizon stockholders received $5.247 billion in Frontier common stock (based on the valuation formula contained in the merger agreement with Frontier) as described above, and Verizon received $3.333 billion in aggregate value, comprised of $3.083 billion in the form of a special cash payment from Spinco and $250 million in a reduction in Verizon’s consolidated indebtedness. During July 2010, Verizon used the proceeds from the special cash payment to reduce its consolidated indebtedness (see Note 4)Communications Corporation (Frontier). The accompanying unaudited condensed consolidated financial statements for the ~~nine~~three months ended ~~September 30,~~March 31, 2010 include ~~the~~these operations ~~acquired by Frontier~~ prior to the completion of the spin-off on July 1, 2010. The spin-off decreased Total equity and Goodwill by approximately $1.9 billion and $0.6 billion, respectively, including a reduction in Accumulated other comprehensive loss of approximately $0.2 billion related to defined benefit pension and postretirement benefit plans.

On April 12, 2010, Spinco completed a financing of $3.2 billion in principal amount of notes. The gross proceeds of the offering were deposited into an escrow account. Immediately prior to the spin-off on July 1, 2010, the funds in the escrow account representing the net cash proceeds from the offering were released to Verizon. These proceeds are reflected in the condensed consolidated statement of cash flows as Proceeds from access line spin-off.

During the three ~~and nine~~ months ended ~~September 30,~~March 31, 2010, we recorded pre-tax charges of ~~$123 million and $463 million, respectively,~~$0.1 billion, primarily for costs incurred related to network, non-network software and other activities to enable the divested markets in the transaction with Frontier to operate on a stand-alone basis subsequent to the closing of the transaction, ~~with Frontier. Also included in these charges are fees related to early extinguishment of debt, as well as~~and professional advisory and legal fees ~~incurred in connection with the Frontier transaction.~~

During the three and nine months ended September 30, 2009, we recorded charges of $62 million primarily for costs incurred related to network, non-network software and other activities to enable the divested markets to operate on a stand-alone basis subsequent to the closing of the transaction with Frontier, as well as professional advisory and legal fees incurred in connection with this transaction.

As a condition of the regulatory approvals by the Department of Justice and the Federal Communications Commission to complete the acquisition of Alltel Corporation (Alltel) in January 2009, Verizon Wireless was required to divest overlapping properties in 105 operating markets in 24 states (Alltel Divestiture Markets). Total assets and total liabilities divested were $2.6 billion and $0.1 billion, respectively, principally comprised of network assets, wireless licenses and customer relationships that were included in Prepaid expenses and other current assets and Other current liabilities, respectively, on the accompanying condensed consolidated balance sheet at December 31, 2009.

On May 8, 2009, Verizon Wireless entered into a definitive agreement with AT&T Mobility, ~~LLC (AT&T Mobility), a subsidiary of AT&T Inc.,~~ pursuant to which AT&T Mobility agreed to acquire 79 of the 105 Alltel Divestiture Markets, including licenses and network assets, for approximately $2.4 billion in cash. On June 9, 2009, Verizon Wireless entered into a definitive agreement with Atlantic Tele-Network, Inc. (ATN), pursuant to which ATN agreed to acquire the remaining 26 Alltel Divestiture Markets, including licenses and network assets, for ~~$200 million~~$0.2 billion in cash. During the second quarter of 2010, Verizon Wireless ~~received the necessary regulatory approvals and~~ completed both transactions. Upon completion of the divestitures, we recorded a tax charge of approximately $192 million for the taxable gain on the excess of book over tax basis of the goodwill associated with the Alltel Divestiture Markets.

On August 23, 2010, Verizon Wireless acquired the net assets and related customers of six operating markets in Louisiana and Mississippi in a transaction with AT&T Inc. for cash consideration of ~~$235 million.~~$0.2 billion. These assets were acquired to enhance Verizon Wireless’ network coverage in these operating markets. The ~~preliminary~~ purchase price allocation primarily resulted in ~~$106 million~~$0.1 billion of wireless licenses and ~~$76 million~~$0.1 billion in goodwill.

During the three ~~and nine~~ months ended ~~September 30,~~March 31, 2010, we recorded merger integration charges of ~~$159 million and $451 million, respectively,~~$0.1 billion related to the Alltel ~~acquisition. These charges~~acquisition, primarily ~~related to handset conversions,~~for trade name amortization and the decommissioning of overlapping cell sites.

During the three and nine months ended September 30, 2009, we recorded merger integration and acquisition charges of $277 million and $961 million, respectively. These charges primarily related to the Alltel acquisition and were comprised of trade name amortization, re-branding initiatives and handset conversions. The charges during the nine months ended September 30, 2009 were also comprised of transaction fees and costs associated with the acquisition, including fees related to the credit facility that was entered into and utilized to complete the acquisition.

~~As of September 30, 2010 and~~During the year ended December 31, ~~2009,~~2010, approximately $12.2 billion of wireless licenses were under development for commercial service for which we ~~are~~were capitalizing interest costs.

In December 2010, a substantial portion of these licenses were placed in service in connection with our deployment of fourth-generation Long-Term Evolution technology services. During the three months ended March 31, 2011, approximately $3.3 billion of wireless licenses remained under development for commercial service.


	At September 30, 2010							At December 31, 2009							At March 31, 2011							At December 31, 2010

(dollars in millions)	Gross Amount		Accumulated Amortization			Net Amount		Gross Amount		Accumulated Amortization			Net Amount		Gross Amount		Accumulated Amortization			Net Amount		Gross Amount		Accumulated Amortization			Net Amount
Customer lists (6 to 8 years)	$	3,146	$	(1,417	)	$	1,729	$	3,134	$	(1,012	)	$	2,122	$	3,152	$	(1,674	)	$	1,478	$	3,150	$	(1,551	)	$	1,599
Non-network internal-use software (2 to 7 years)		8,141		(4,391	)		3,750		8,455		(4,346	)		4,109
Non-network internal-use software (3 to 7 years)																8,670		(4,875	)		3,795		8,446		(4,614	)		3,832
Other (2 to 25 years)		878		(442	)		436		865		(332	)		533		640		(258	)		382		885		(486	)		399

Total	$	12,165	$	(6,250	)	$	5,915	$	12,454	$	(5,690	)	$	6,764	$	12,462	$	(6,807	)	$	5,655	$	12,481	$	(6,651	)	$	5,830


(dollars in millions)	Three Months Ended September 30,		Nine Months Ended September 30,		Three Months Ended March 31,
2011					$	370
2010	$	446	$	1,365		457
2009		496		1,469

Estimated annual amortization expense for other intangible assets is as follows:


Years	(dollars in millions)
2011	$	1,510
2012		1,288
2013		1,107
2014		790
2015		583

Changes to debt during the ~~nine~~three months ended ~~September 30, 2010~~March 31, 2011 are as follows:


(dollars in millions)	Debt Maturing within One Year			Long-term Debt			Total			Debt Maturing within One Year			Long-term Debt			Total
Balance at January 1, 2010	$	7,205		$	55,051		$	62,256
Balance at January 1, 2011										$	7,542		$	45,252		$	52,794
Proceeds from long-term borrowings											–			6,440			6,440
Repayments of long-term borrowings and capital leases obligations		(5,923	)		(2,018	)		(7,941	)		(552	)		–			(552	)
Decrease in short-term obligations, excluding current maturities		(1,097	)		–			(1,097	)
Increase in short-term obligations, excluding current maturities											2,384			–			2,384
Reclassifications of long-term debt		5,500			(5,500	)		–			2,250			(2,250	)		–
Other		125			(173	)		(48	)		199			(68	)		131

Balance at September 30, 2010	$	5,810		$	47,360		$	53,170
Balance at March 31, 2011										$	11,823		$	49,374		$	61,197

During March 2011, Verizon issued $6.25 billion aggregate principal amount of fixed and floating rate notes resulting in cash proceeds of approximately $6.19 billion, net of discounts and issuance costs. The net proceeds will be used for the ~~nine months ended September 30, 2010,~~repayment of commercial paper, the retirement of certain outstanding notes issued by our telephone operating company subsidiaries and other general corporate purposes. The issuances consisted of the following: $1.0 billion Notes due 2014 that bear interest at a rate equal to three-month London Interbank Offered Rate (LIBOR) plus 0.61%, $1.5 billion 1.95% Notes due 2014, $1.25 billion 3.00% Notes due 2016, $1.5 billion 4.60% Notes due 2021 and $1.0 billion 6.00% Notes due 2041. In addition, during 2011, $0.5 billion of 5.35% Verizon Communications Notes matured and were repaid and we utilized $0.3 billion of ~~6.125% Verizon New York Inc. debentures, $0.2~~a fixed rate vendor financing facility.

During April 2011, we redeemed $1.0 billion of ~~6.375%~~5.65% Verizon ~~North~~Pennsylvania Inc. ~~debentures and $0.2 billion of 6.30% Verizon Northwest Inc. debentures matured and were repaid.~~

During July 2010, Verizon received approximately $3.1 billion in connection with the completion of the spin-off and merger of Spinco (see Note 2). This special cash payment was subsequently used to redeem $2.0 billion of 7.25% Verizon Communications notesDebentures due ~~December 2010~~November 15, 2011 at a redemption price of ~~102.7%~~102.9% of the principal amount of the ~~notes,~~debentures, plus accrued and unpaid interest through the date of redemption ~~as well as other short-term borrowings.~~

~~On June 28, 2010, Verizon Wireless exercised its right to redeem the outstanding~~and $1.0 billion of ~~aggregate floating rate notes~~6.50% Verizon New England Inc. Debentures due ~~June~~September 15, 2011 at a redemption price of ~~100%~~102.3% of the principal amount of the ~~notes,~~debentures, plus accrued and unpaid interest through the date of redemption. ~~In addition, during~~The redemption of these debentures resulted in a net loss that was not significant. We also terminated the ~~nine months ended September 30, 2010, Verizon Wireless repaid $4.0 billion of borrowings that were outstanding under~~related interest rate swaps with a ~~three-year term loan facility. No borrowings remain outstanding under this facility as of September 30, 2010 and this facility has been cancelled.~~notional value totaling $1.0 billion.

We guarantee the debt obligations of GTE Corporation (but not the debt of its subsidiary or affiliate companies) that were issued and outstanding prior to July 1, 2003. As of ~~September 30, 2010,~~March 31, 2011, $1.7 billion principal amount of these obligations remain outstanding.

We and our consolidated subsidiaries are in compliance with all of our debt covenants.

~~On April 14, 2010, we terminated all commitments~~As of March 31, 2011, the unused borrowing capacity under ~~our previous $5.3 billion 364-day credit facility with~~ a ~~syndicate of lenders and entered into a new~~ $6.2 billion three-year credit facility with a group of major financial ~~institutions. As of September 30, 2010, the unused borrowing capacity under the three-year credit facility~~institutions was approximately $6.1 billion.

The following table presents the balances of assets ~~and liabilities~~ measured at fair value on a recurring basis as of ~~September 30, 2010:~~March 31, 2011:


(dollars in millions)	Level 1⁽¹⁾		Level 2⁽²⁾		Level 3⁽³⁾		Total		Level 1⁽¹⁾		Level 2⁽²⁾		Level 3⁽³⁾		Total
Assets:
Short-term investments:
Equity securities	$	243	$	–	$	–	$	243	$	287	$	–	$	–	$	287
Fixed income securities		19		319		–		338		184		252		–		436
Investments in unconsolidated businesses:
Equity and other securities		465		–		–		465
Other Current Assets:
Interest rate swaps										–		29		–		29
Cross currency swaps										–		59		–		59
Other Assets:
Equity securities										129		–		–		129
Fixed income securities		–		743		–		743		206		769		–		975
Derivative contracts:
Interest rate swaps		–		465		–		465		–		255		–		255
Cross currency swaps		–		139		–		139		–		158		–		158

Total	$	727	$	1,666	$	–	$	2,393	$	806	$	1,522	$	–	$	2,328

⁽²⁾observable inputs other than quoted prices in active markets for identical assets and liabilities

Equity securities consist of investments in common stock of domestic and international corporations in a variety of industry sectors and are generally measured using quoted prices in active markets and are classified as Level 1.

Fixed income securities consist primarily of investments in U.S. Treasuries and agencies, as well as municipal bonds. We use quoted prices in active markets for our U.S. Treasury securities, and therefore these securities are classified as Level 1. For all other fixed income securities that do not have quoted prices in active markets, we use alternative matrix pricing as a practical expedient resulting in these debt securities being classified as Level 2.

Derivative contracts ~~primarily consist of interest rate swaps and cross currency swaps. Derivative contracts~~ are valued using models based on readily observable market parameters for all substantial terms of our derivative contracts and thus are classified within Level 2. We use mid-market pricing for fair value measurements of our derivative instruments.

We recognize transfers between levels of the fair value hierarchy as of the end of the reporting period. There were no transfers within the fair value hierarchy during the ~~nine~~three months ended ~~September 30, 2010.~~March 31, 2011.

The fair value of our short-term and long-term debt, excluding capital leases which is determined based on market quotes for similar terms and maturities or future cash flows discounted at current ~~rates. The fair value of our short-term and long-term debt, excluding capital leases,~~rates, was as follows:

We enter into derivative transactions to manage our exposure to fluctuations in foreign currency exchange rates, interest rates, equity and commodity prices. We employ risk management strategies, which may include the use of a variety of derivatives including cross currency swaps, foreign currency and prepaid forwards and collars, interest rate and commodity swap agreements and interest rate locks. We do not hold derivatives for trading purposes.

We measure all derivatives, including derivatives embedded in other financial instruments, at fair value and recognize them as either assets or liabilities on our consolidated balance sheets. Changes in the fair values of derivative instruments not qualifying as hedges or any ineffective portion of hedges are recognized in earnings in the current period. Changes in the fair values of derivative instruments used effectively as fair value hedges are recognized in earnings, along with changes in the fair value of the hedged item. Changes in the fair value of the effective portions of cash flow hedges are reported in Other comprehensive income ~~(loss)~~ and recognized in earnings when the hedged item is recognized in earnings.

We have entered into domestic interest rate swaps to achieve a targeted mix of fixed and variable rate debt, where we principally receive fixed rates and pay variable rates based on ~~London Interbank Offered Rate.~~LIBOR. These swaps are designated as fair value hedges and hedge against changes in the fair value of our debt portfolio. We record the interest rate swaps at fair value on our consolidated balance sheets as assets and liabilities. Changes in the fair value of the interest rate swaps are recorded to Interest expense, which are offset by changes in the fair value of the debt due to changes in interest rates. The fair value of these contracts was ~~$465 million and $171 million~~$0.3 billion at ~~September 30, 2010~~March 31, 2011 and December 31, ~~2009,~~2010, respectively, and ~~are~~is primarily included in Other assets and Long-term debt. As of ~~September 30, 2010,~~March 31, 2011, the total notional amount of these interest rate swaps was ~~$6.0~~$9.0 billion.

In order to manage our exposure to future interest rate changes, ~~beginning in late September 2010 through October 25,~~during 2010, we entered into forward interest rate swaps with a total notional value of ~~$1,250 million.~~$1.4 billion. We have designated these contracts as cash flow hedges. The fair value of these contracts was $0.1 billion at December 31, 2010 and the contracts were included in Other assets. On or before February 7, 2011, we terminated these forward interest rate swaps.

Our domestic wireless business, operating as Verizon Wireless, has entered into cross currency swaps designated as cash flow hedges to exchange approximately $2.4 billion of British Pound Sterling and ~~Euro denominated~~Euro-denominated debt into U.S. dollars and to fix our future interest and principal payments in U.S. dollars, as well as mitigate the impact of foreign currency transaction gains or losses. The fair value of these swaps, primarily included in Other assets, was approximately ~~$139 million~~$0.2 billion and ~~$315 million~~$0.1 billion at ~~September 30, 2010~~March 31, 2011 and December 31, ~~2009,~~2010, respectively. During the three ~~and nine~~ months ended ~~September 30,~~March 31, 2011 and 2010, a pretax gain of ~~$207 million~~$0.1 billion and a pretax loss of ~~$176 million,~~$0.1 billion, respectively, ~~was~~were recognized in Other comprehensive income, ~~a portion of~~ which was reclassified to Other income and (expense), net to offset the related pretax foreign currency transaction gain or loss on the underlying debt obligations.

During the first quarter of 2009, we entered into a privately negotiated prepaid forward agreement for 14 million shares of Verizon common stock at a cost of approximately $390 million. We terminated the prepaid forward agreement with respect to 5 million of the shares during the fourth quarter of 2009 and 9 million of the shares during the first quarter of 2010, which resulted in the delivery of those shares to Verizon upon termination.

The 2009 Verizon Communications Inc. Long-Term Incentive Plan (the Plan) permits the granting of stock options, stock appreciation rights, restricted stock, restricted stock units, performance shares, performance stock units and other awards. The maximum number of shares available for awards from the Plan is 119.6 million shares.

The Plan provides for grants of Restricted Stock Units (RSUs) that generally vest at the end of the third year after the grant. The RSUs ~~outstanding at~~granted prior to January 1, 2010 are classified as liability awards because the RSUs will be paid in cash upon vesting. The RSU award liability is measured at its fair value at the end of each reporting period and, therefore, will fluctuate based on the performance of Verizon common stock. The RSUs granted ~~during~~subsequent to January 1, 2010 are classified as equity awards because ~~these~~the RSUs will be paid in Verizon common stock upon vesting. ~~Compensation expense for RSUs classified as~~The RSU equity awards isare measured ~~based on~~using the ~~market price~~grant date fair value of Verizon common stock and are not remeasured at the ~~date~~end of ~~grant and is recognized over the vesting~~each reporting period. Dividend equivalent units are also paid to participants at the time the RSU award is paid, and in the same proportion as the RSU award.

The Plan also provides for grants of Performance Stock Units (PSUs) that generally vest at the end of the third year after the grant. As defined by the Plan, the Human Resources Committee of the Board of Directors determines the number of PSUs a participant earns based on the extent to which the corresponding goal has been achieved over the three-year performance cycle. All payments are subject to approval by the Human Resources Committee. The PSUs are classified as liability awards because the PSU awards are paid in cash upon vesting. The PSU award liability is measured at its fair value at the end of each reporting period and, therefore, will fluctuate based on the price of Verizon common stock as well as performance relative to the targets. Dividend equivalent units are also paid to participants at the time that the PSU award is determined and paid, and in the same proportion as the PSU award.

The following table summarizes ~~Verizon’s~~the Restricted Stock Unit and Performance Stock Unit activity:


(shares in thousands)	Performance Stock Units			Weighted-Average Grant-Date Fair Value		Restricted Stock Units			Performance Stock Units
Outstanding, beginning of year		29,895		$	35.52		20,923			32,380
Granted		16,774			31.75		5,575			8,751
Payments		(14,364	)		38.00		(7,564	)		(12,137	)
Cancelled/Forfeited		(230	)		34.07		(55	)		(83	)

Outstanding, September 30, 2010		32,075			32.45
Outstanding, March 31, 2011							18,879			28,911

As of ~~September 30, 2010,~~March 31, 2011, unrecognized compensation expense related to the unvested portion of Verizon’s RSUs and PSUs was approximately ~~$391 million~~$0.7 billion and is expected to be recognized over a weighted-average period of approximately two years.

The RSUs granted in 2011, and classified as equity awards, have a weighted average grant date fair value of $36.38 per unit.

The Plan provides for grants of stock options to participants at an option price per share of 100% of the fair market value of Verizon common stock on the date of grant. Each grant has a 10-year life, vesting equally over a three-year period, starting at the date of the grant. We have not granted new stock options since 2004.


(shares in thousands)	Stock Options			Weighted-Average Exercise Price		Stock Options			Weighted-Average Exercise Price
Outstanding, beginning of year		107,765		$	44.52		56,844		$	44.25
Exercised		(2	)		30.04		(2,787	)		34.76
Cancelled/Forfeited		(49,032	)		44.85		(19,079	)		52.05

Outstanding, September 30, 2010		58,731			44.24
Outstanding, March 31, 2011							34,978			40.75

All stock options outstanding at ~~September 30, 2010~~March 31, 2011 were exercisable.

The 2000 Verizon Wireless Long-Term Incentive Plan (the Wireless Plan) provides compensation opportunities to eligible employees of Verizon Wireless (the Partnership). The Wireless Plan provides rewards that are tied to the long-term performance of the Partnership. Under the Wireless Plan, Value Appreciation Rights (VARs) were granted to eligible employees. As of ~~September 30, 2010,~~March 31, 2011, all VARs were fully vested. We have not granted new VARs since 2004.


(shares in thousands)	Value Appreciation Rights			Weighted-Average Grant-Date Fair Value		Value Appreciation Rights			Weighted-Average Grant-Date Fair Value
Outstanding, beginning of year		16,591		$	16.54		11,569		$	13.11
Exercised		(4,456	)		25.48		(416	)		14.13
Cancelled/Forfeited		(51	)		21.84		(19	)		15.62

Outstanding, September 30, 2010		12,084			13.22
Outstanding, March 31, 2011							11,134			13.06

We maintain non-contributory defined benefit pension plans for many of our employees. In addition, we maintain postretirement health care and life insurance plans for our retirees and their dependents, which are both contributory and non-contributory, and include a limit on ~~the Company’s~~our share of the cost for certain recent and future retirees.

The following table summarizes the benefit (income) cost related to our pension and postretirement health care and life insurance plans:

During the three and nine months ended September 30, 2010, we recorded severance, pension and benefits charges of $873 million and $3,323 million, respectively. The charges during the three and nine months ended September 30, 2010, included non-cash pension settlement losses of $873 million and $1,089 million, respectively, related to employees who received lump-sum distributions, primarily resulting from our previously announced separation plans.

In April 2010, we reached an agreement with certain unions on temporary enhancements to the separation programs contained in their existing collective bargaining agreements. These temporary enhancements were intended to help address a previously declared surplus of employees and to help reduce the need for layoffs. Accordingly, during the nine months ended September 30, 2010, we recorded severance, pension and benefits charges associated with the approximately 11,000 union-represented employees who volunteered for the incentive offer. These charges included $994 million for severance, $681 million for special termination benefits, as well as $173 million for pension curtailment losses and $386 million for postretirement curtailment losses that were due to the workforce reductions which caused the elimination of a significant amount of future service.

During the three and nine months ended September 30, 2009, we recorded non-cash pension settlement losses of $610 million and $1,026 million, respectively, related to employees who received lump-sum distributions primarily resulting from our previously announced separation plans in which prescribed payment thresholds were reached.

During the three ~~and nine~~ months ended ~~September 30, 2010,~~March 31, 2011, we paid severance benefits of ~~$710 million and $972 million, respectively.~~$0.2 billion. At ~~September 30, 2010,~~March 31, 2011, we had a remaining severance liability of ~~$1,708 million,~~$1.4 billion, a portion of which includes future contractual payments to employees separated as of ~~September 30, 2010.~~March 31, 2011.

During the three months ended ~~September 30, 2010,~~March 31, 2011, we contributed ~~$2 million~~$0.4 billion to our qualified pension trusts, ~~$24~~$42 million to our nonqualified pension plans and ~~$288 million~~$0.3 billion to our other postretirement benefit plans. ~~During the nine months ended September 30, 2010, we contributed $3 million~~We do not expect to ~~our~~make additional qualified pension ~~trusts, $95 million to our nonqualified pension plans and $1,058 million to our other postretirement benefit plans. The anticipated qualified pension trust~~plan contributions ~~for 2010 disclosed in Verizon’s Annual Report on Form 10-K for~~during the ~~year ended December 31, 2009 have not changed. Our estimate~~remainder of ~~the amount and timing of required qualified pension trust contributions for 2010 is based on current proposed Internal Revenue Service regulations under the Pension Protection Act of 2006.~~2011.

Under the Patient Protection and Affordable Care Act and the Health Care and Education Reconciliation Act of 2010, both of which became law in March 2010 (collectively the Health Care Act), beginning in 2013, Verizon and other companies that receive a subsidy under Medicare Part D to provide retiree prescription drug coverage will no longer receive a federal income tax deduction for the expenses incurred in connection with providing the subsidized coverage to the extent of the subsidy received. Because future anticipated retiree prescription drug plan liabilities and related subsidies are already reflected in Verizon’s financial statements, this change required Verizon to reduce the value of the related tax benefits recognized in its financial statements in the period during which the Health Care Act was enacted. As a result, Verizon recorded a one-time, non-cash income tax charge of ~~$962 million~~$1.0 billion in the first quarter of 2010 to reflect the impact of this change.


	Nine Months Ended September 30, 2010
										Three Months Ended March 31, 2011
(dollars in millions)	Attributable to Verizon			Noncontrolling Interest			Total Equity			Attributable to Verizon			Noncontrolling Interest			Total Equity

Balance at beginning of period	$	41,606		$	42,761		$	84,367		$	38,569		$	48,343		$	86,912
Spin-off of local exchange businesses and related landline activities (Note 2)		236			–			236

Adjusted balance at beginning of period		41,842			42,761			84,603

Net income		1,092			5,659			6,751			1,439			1,825			3,264
Other comprehensive income (loss)		1,408			(31	)		1,377			244			(2	)		242

Comprehensive income		2,500			5,628			8,128			1,683			1,823			3,506


Contributed capital		(2,187	)		–			(2,187	)		(8	)		–			(8	)
Dividends declared		(4,063	)		–			(4,063	)		(1,380	)		–			(1,380	)
Common stock in treasury (Note 5)		(276	)		–			(276	)
Common stock in treasury											78			–			78
Distributions and other		101			(1,682	)		(1,581	)		46			(290	)		(244	)

Balance at end of period	$	37,917		$	46,707		$	84,624		$	38,988		$	49,876		$	88,864

Noncontrolling interests included in our condensed consolidated financial statements primarily consist of Vodafone Group Plc.’s 45% ownership interest in ~~our~~ Verizon ~~Wireless joint venture. The change in Contributed capital during the nine months ended September 30, 2010 reflects the spin-off of Spinco (see Note 2).~~Wireless.

Comprehensive income consists of net income and other gains and losses affecting equity that, under generally accepted accounting principles, are excluded from net income. Significant changes in the components of Other comprehensive income, ~~(loss),~~ net of income tax expense (benefit), are described below.


	Three Months Ended September 30,					Nine Months Ended September 30,					Three Months Ended March 31,
(dollars in millions)	2010		2009			2010			2009		2011			2010
Net Income	$	2,920	$	2,887		$	6,751		$	9,257	$	3,264		$	2,318
Other Comprehensive Income (Loss), Net of Taxes
Other comprehensive income, net of taxes
Foreign currency translation adjustments		350		134			(101	)		164		214			(194	)
Net unrealized gain (loss) on cash flow hedges		–		(5	)		(22	)		80
Net unrealized gain on cash flow hedges												31			3
Unrealized gain on marketable securities		53		65			34			89		–			16
Defined benefit pension and postretirement plans		666		490			1,497			981		(1	)		157

Other comprehensive income attributable to Verizon		1,069		684			1,408			1,314
Other comprehensive income (loss) attributable to Verizon												244			(18	)
Other comprehensive income (loss) attributable to noncontrolling interest		1		(7	)		(31	)		75		(2	)		4

Total Comprehensive Income	$	3,990	$	3,564		$	8,128		$	10,646	$	3,506		$	2,304


Comprehensive income attributable to noncontrolling interest	$	2,040	$	1,704		$	5,628		$	5,028	$	1,823		$	1,879
Comprehensive income attributable to Verizon		1,950		1,860			2,500			5,618		1,683			425

Total Comprehensive Income	$	3,990	$	3,564		$	8,128		$	10,646	$	3,506		$	2,304

Other comprehensive income ~~(loss)~~ attributable to noncontrolling interest primarily reflects activity related to ~~the~~ cross currency swaps (see Note 5).

The change in Foreign currency translation adjustments for the three ~~and nine~~ months ended ~~September 30, 2010~~March 31, 2011 was primarily driven by the devaluation of the ~~Euro versus~~U.S. dollar against the Euro. The change in Foreign currency translation adjustments for the three months ended March 31, 2010 was primarily driven by the strengthening of the U.S. ~~dollar.~~dollar against the Euro.

Gross unrealized gains and losses on marketable securities for the three ~~and nine~~ months ended ~~September 30,~~March 31, 2011 and 2010 were not significant.

The change in Defined benefit pension and postretirement plans for the three and nine months ended September 30, 2010 was attributable to pension settlement losses and the amortization of prior service cost and actuarial losses. The change was also impacted by the curtailment losses and termination benefits associated with the voluntary incentive program for union-represented employees recorded in the second quarter of 2010 (see Note 7). We also recorded a reduction to the beginning balance of Accumulated other comprehensive loss of $0.2 billion in connection with the spin-off of Spinco (see Note 2).

The components of Accumulated other comprehensive ~~loss~~income were as follows:


(dollars in millions)	At September 30, 2010			At December 31, 2009			At March 31, 2011		At December 31, 2010
Foreign currency translation adjustments	$	913		$	1,014		$	1,057	$	843
Net unrealized gain on cash flow hedges		15			37			157		126
Unrealized gain on marketable securities		84			50			79		79
Defined benefit pension and postretirement plans		(10,847	)		(12,580	)		–		1

Accumulated Other Comprehensive Loss	$	(9,835	)	$	(11,479	)
Accumulated Other Comprehensive Income							$	1,293	$	1,049

We have two reportable segments, which we operate and manage as strategic business units and organize by products and services. We measure and evaluate our reportable segments based on segment operating income, consistent with the chief operating decision maker’s assessment of segment performance.

Corporate, eliminations and other includes unallocated corporate expenses, intersegment eliminations recorded in consolidation, the results of other businesses, such as our investments in unconsolidated businesses, pension and other employee benefit related costs, lease financing, as well as divested operations and other adjustments and gains and losses that are not allocated in assessing segment performance due to their non-operational nature. Although such transactions are excluded from the business segment results, they are included in reported consolidated earnings. Gains and losses that are not individually significant are included in all segment results as these items are included in the chief operating decision maker’s assessment of segment performance.

~~In order to comply with regulatory conditions related to the acquisition of Alltel in January 2009, Verizon Wireless divested overlapping properties in 105 operating markets in 24 states~~Corporate, eliminations and other during the ~~first half~~three months ended March 31, 2010 includes a non-cash adjustment of ~~2010. In addition, on July 1, 2010, certain of Verizon’s local exchange~~$33 million, primarily to adjust wireless data revenues. This adjustment was recorded to properly defer previously recognized wireless data revenues that will be earned and ~~related landline assets~~recognized in 14 states were spun off (see Note 2). Accordingly, Domestic Wireless and Wireline results from these operations have been reclassified to Corporate and Other to reflect comparable segment operating results.future periods.

The following table provides operating financial information for our two reportable segments:


	Three Months Ended September 30,						Nine Months Ended September 30,						Three Months Ended March 31,
(dollars in millions)	2010			2009			2010			2009			2011			2010
External Operating Revenues
Domestic Wireless
Retail service													$	13,659		$	13,046
Other service														637			432

Service revenue	$	14,149		$	13,152		$	41,412		$	38,858			14,296			13,478
Equipment and other		2,077			2,177			5,806			6,168

Equipment														1,687			991
Other														877			850

Total Domestic Wireless		16,226			15,329			47,218			45,026			16,860			15,319

Wireline
Consumer retail														3,383			3,320
Small business														692			706

Mass Markets		4,070			4,047			12,164			12,064			4,075			4,026

Strategic services														1,774			1,573
Other														2,045			2,206

Global Enterprise		3,927			3,958			11,705			11,753			3,819			3,779

Global Wholesale		1,774			2,008			5,457			5,982			1,740			1,978
Other		202			338			641			1,128			201			255

Total Wireline		9,973			10,351			29,967			30,927			9,835			10,038

Total segments		26,199			25,680			77,185			75,953			26,695			25,357
Corporate, eliminations and other		285			1,585			2,985			4,764			295			1,556

Total consolidated – reported	$	26,484		$	27,265		$	80,170		$	80,717		$	26,990		$	26,913


Intersegment Revenues
Domestic Wireless	$	24		$	2		$	41		$	24		$	21		$	(7	)
Wireline		313			316			971			943			312			337

Total segments		337			318			1,012			967			333			330
Corporate, eliminations and other		(337	)		(318	)		(1,012	)		(967	)		(333	)		(330	)

Total consolidated – reported	$	–		$	–		$	–		$	–		$	–		$	–


Total Operating Revenues
Domestic Wireless	$	16,250		$	15,331		$	47,259		$	45,050		$	16,881		$	15,312
Wireline		10,286			10,667			30,938			31,870			10,147			10,375

Total segments		26,536			25,998			78,197			76,920			27,028			25,687
Corporate, eliminations and other		(52	)		1,267			1,973			3,797			(38	)		1,226

Total consolidated – reported	$	26,484		$	27,265		$	80,170		$	80,717		$	26,990		$	26,913


Operating Income
Domestic Wireless	$	4,854		$	4,245		$	13,870		$	12,556		$	4,351		$	4,333
Wireline		19			191			(3	)		884			288			121

Total segments		4,873			4,436			13,867			13,440			4,639			4,454
Reconciling items		(1,126	)		(450	)		(3,730	)		(342	)		(186	)		(13	)

Total consolidated – reported	$	3,747		$	3,986		$	10,137		$	13,098		$	4,453		$	4,441


(dollars in millions)	At September 30, 2010						At December 31, 2009
Assets
Domestic Wireless				$	135,167					$	135,162
Wireline					86,981						91,778

Total segments					222,148						226,940
Reconciling items					(1,296	)					311

Total consolidated – reported				$	220,852					$	227,251

A reconciliation of the ~~total of the reportable segments’~~segment operating revenues to consolidated ~~Operating~~operating revenues is as follows:


	Three Months Ended September 30,				Nine Months Ended September 30,					Three Months Ended March 31,
(dollars in millions)	2010		2009		2010			2009		2011			2010
Total segment operating revenues	$	26,199	$	25,680	$	77,185		$	75,953	$	27,028		$	25,687
Deferred revenue adjustment (Note 1)		–		22		(235	)		51
Deferred revenue adjustment											–			33
Impact of divested operations (Note 2)		–		1,331		2,407			4,009		–			1,278
Corporate and other		285		232		813			704		(38	)		(85	)

Total consolidated operating revenues	$	26,484	$	27,265	$	80,170		$	80,717	$	26,990		$	26,913

A reconciliation of the total of the reportable segments’ operating income to consolidated ~~Income~~income before provision for income taxes is as follows:


	Three Months Ended September 30,						Nine Months Ended September 30,						Three Months Ended March 31,
(dollars in millions)	2010			2009			2010			2009			2011			2010
Total segment operating income	$	4,873		$	4,436		$	13,867		$	13,440		$	4,639		$	4,454
Severance, pension and benefit charges (Note 7)		(873	)		(610	)		(3,323	)		(1,026	)
Impact of divested operations (Note 2)		–			460			755			1,404			–			415
Deferred revenue adjustment (Note 1)		–			22			(235	)		51
Merger integration and acquisition related charges (Note 2)		(159	)		(277	)		(451	)		(704	)
Deferred revenue adjustment														–			33
Merger integration and acquisition costs (Note 2)														–			(105	)
Access line spin-off related charges (Note 2)		(67	)		(62	)		(407	)		(62	)		–			(145	)
Corporate and other		(27	)		17			(69	)		(5	)		(186	)		(211	)

Total consolidated operating income		3,747			3,986			10,137			13,098			4,453			4,441

Equity in earnings of unconsolidated businesses		141			166			395			422			101			133
Other income and (expense), net		(50	)		13			12			77			36			46
Interest expense		(597	)		(704	)		(1,956	)		(2,416	)		(709	)		(680	)

Income Before Provision For Income Taxes	$	3,241		$	3,461		$	8,588		$	11,181		$	3,881		$	3,940

We generally account for intersegment sales of products and services and asset transfers at current market prices. No single customer accounted for more than 10% of our total operating revenues during the three ~~and nine~~ months ended ~~September 30, 2010~~March 31, 2011 and ~~2009.~~2010.

We are currently involved in certain legal proceedings and, as required, have accrued estimates of the probable and estimable losses for the resolution of these claims that, individually or in the aggregate, were not significant. These estimates have been developed in consultation with outside counsel and are based upon an analysis of potential results, assuming a combination of litigation and settlement strategies. It is possible, however, that future results of operations for any particular quarterly or annual period could be materially affected by changes in our assumptions or the effectiveness of our strategies related to these proceedings.

Several state and federal regulatory proceedings may require our telephone operations to pay penalties or to refund to customers a portion of the revenues collected in the current and prior periods. There are also various legal actions pending to which we are a party and claims that, if asserted, may lead to other legal actions. We have established reserves for specific liabilities in connection with regulatory and legal actions, including environmental matters that we currently deem to be probable and estimable. We do not expect that the ultimate resolution of pending regulatory and legal matters in future periods, including the Hicksville matter described below, will have a material effect on our financial condition, but it could have a material effect on our results of operations for a given reporting period.

During 2003, under a government-approved plan, remediation commenced at the site of a former Sylvania facility in Hicksville, New York that processed nuclear fuel rods in the 1950s and 1960s. Remediation beyond original expectations proved to be necessary and a reassessment of the anticipated remediation costs was conducted. A reassessment of costs related to remediation efforts at several other former facilities was also undertaken. In September 2005, the Army Corps of Engineers (ACE) accepted the Hicksville site into the Formerly Utilized Sites Remedial Action Program. This may result in the ACE performing some or all of the remediation effort for the Hicksville site with a corresponding decrease in costs to Verizon. To the extent that the ACE assumes responsibility for remedial work at the Hicksville site, an adjustment to a reserve previously established for the remediation may be made. Adjustments to the reserve may also be made based upon actual conditions discovered during the remediation at this or any other site requiring remediation.

In connection with the execution of agreements for the sales of businesses and investments, Verizon ordinarily provides representations and warranties to the purchasers pertaining to a variety of nonfinancial matters, such as ownership of the securities being sold, as well as indemnity from certain financial losses. From time to time, counterparties may make claims under these provisions, and Verizon will seek to defend against those claims and resolve them in the ordinary course of business.

Subsequent to the sale of Verizon Information Services Canada in 2004, we continue to provide a guarantee to publish directories, which was issued when the directory business was purchased in 2001 and had a 30-year term (before extensions). The preexisting guarantee continues, without modification, despite the subsequent sale of Verizon Information Services Canada and the spin-off of our domestic print and Internet yellow pages directories business. The possible financial impact of the guarantee, which is not expected to be adverse, cannot be reasonably estimated as a variety of the potential outcomes available under the guarantee result in costs and revenues or benefits that may offset each other. ~~In addition,~~We do not believe performance under the guarantee is ~~not~~ likely.

Verizon Communications Inc. (Verizon, or the Company), is one of the world’s leading providers of communications services. Our domestic wireless business, operating as Verizon Wireless, provides wireless voice and data products and services across the United States ~~(U.S.)~~ using one of the most extensive and reliable wireless networks. Our wireline business provides communications products and services, including voice, broadband data and video services, network access, long distance and other communications products and services, and also owns and operates one of the most expansive end-to-end global Internet Protocol (IP) networks. We have a highly diverse workforce of approximately ~~195,100~~196,200 employees as of ~~September 30, 2010.~~March 31, 2011.

In the sections that follow, we provide information about the important aspects of our operations and investments, both at the consolidated and segment levels, and discuss our results of operations, financial position and sources and uses of cash. In addition, we highlight key trends and uncertainties to the extent practicable. We also monitor several key economic indicators as well as the state of the economy in general primarily in the ~~U.S.~~United States where the majority of our operations are located for purposes of evaluating our operating results and assessing the potential impacts of these factors on our businesses. While most key economic indicators, including gross domestic product, affect our operations to some degree, we historically have noted higher correlations to non-farm employment, personal consumption expenditures and capital spending, as well as more general economic indicators such as inflationary or recessionary trends and housing starts.

On May 13, 2009, we announced plans to spin off a newly formed subsidiary of Verizon (Spinco) to our stockholders and for Spinco to merge with Frontier Communications Corporation (Frontier) immediately following the spin-off pursuant to a definitive agreement with Frontier, with Frontier to be the surviving corporation. On July 1, 2010, after receiving regulatory approval, we completed the spin-off of the shares of Spinco to Verizon stockholders and the merger of Spinco with Frontier, resulting in Verizon stockholders collectively owning approximately 68 percent of Frontier’s equity which was outstanding immediately following the merger. Frontier issued approximately 678.5 million shares of Frontier common stock in the aggregate to Verizon stockholders in the merger, and Verizon stockholders received one share of Frontier common stock for every 4.165977 shares of Verizon common stock they owned as of June 7, 2010. Verizon stockholders received cash in lieu of any fraction of a share of Frontier common stock to which they otherwise were entitled. At the time of the spin-off and the merger, Spinco held defined assets and liabilities of the local exchange business and related landline activities of Verizon in Arizona, Idaho, Illinois, Indiana, Michigan, Nevada, North Carolina, Ohio, Oregon, South Carolina, Washington, West Virginia and Wisconsin, and in portions of California bordering Arizona, Nevada and Oregon, including Internet access and long distance services and broadband video provided to designated customers in those areas. The merger resulted in Frontier acquiring approximately 4 million access lines and certain related businesses from Verizon, which collectively generated revenues of approximately $4 billion for Verizon’s Wireline segment during 2009 and approximately $1.7 billion of revenue for Verizon’s Wireline segment during the six months ended June 30, 2010.

As a condition of the regulatory approvals by the Department of Justice (DOJ) and the Federal Communications Commission (FCC) to complete the acquisition of Alltel Corporation (Alltel) in January 2009, Verizon Wireless was required to divest overlapping properties in 105 operating markets in 24 states (Alltel Divestiture Markets). On May 8, 2009, Verizon Wireless entered into a definitive agreement with AT&T Mobility LLC (AT&T Mobility), a subsidiary of AT&T Inc. (AT&T), pursuant to which AT&T Mobility agreed to acquire 79 of the 105 Alltel Divestiture Markets, including licenses and network assets, for approximately $2.4 billion in cash. On June 9, 2009, Verizon Wireless entered into a definitive agreement with Atlantic Tele-Network, Inc. (ATN), pursuant to which ATN agreed to acquire the remaining 26 Alltel Divestiture Markets, including licenses and network assets, for $200 million in cash. During the second quarter of 2010, Verizon Wireless received the necessary regulatory approvals and completed both transactions. As a result of these transactions, the Verizon Wireless customer base was reduced by approximately 2.1 million customers, partially offset by certain adjustments.

Our results of operations, financial position and sources and uses of cash in the current and future periods reflect our focus on the following strategic imperatives:

Revenue Growth – To generate revenue growth we are devoting our resources to higher growth markets such as the wireless voice and data markets, the broadband and video markets, and the provision of strategic services to business markets, rather than to the traditional wireline voice market. During the three months ended ~~September 30, 2010,~~March 31, 2011, consolidated revenue ~~decreased 2.9%~~increased 0.3% compared to the similar period in ~~2009~~2010 primarily due to higher revenues in our growth markets, including:

These higher revenues were partially offset by lower revenue in the Wireline segment resulting from ~~switched access line losses~~a decline in total voice connections and decreased minutes of use (MOUs)~~, partially offset by higher revenues in our growth markets.~~. We continue ~~developing~~to develop and ~~marketing~~market innovative product ~~bundles~~and service offerings to include local, long distance, wireless, broadband data and video services for consumer, business and government customers. During April 2011, we closed the acquisition of Terremark Worldwide Inc. and improved our competitive position in the managed hosting and cloud services space. We anticipate that these efforts will help counter the effects of competition and technology substitution, ~~that have resulted in access line losses,~~ and ~~will~~ enable us to grow consolidated revenues.

Market Share Gains – In our wireless business, our goal is to continue to be the market leader in providing wireless voice and data communication services in the ~~U.S.~~United States. As of March 31, 2011, total connections increased 6.1% to 104.0 million compared to March 31, 2010. As the demand for wireless data services grows, we continue to ~~expand~~increase our ~~offerings~~data revenues by expanding our penetration of data services as a result of increased sales of smartphones and ~~devices with advanced capabilities for both consumer and business customers and increase our data revenues. On October 6,~~other data-capable devices. In 2010, we ~~announced that we will launch~~launched our 4Gfourth-generation (4G) Long-Term Evolution technology (LTE) mobile broadband network in 38 ~~major metropolitan areas and~~markets. During the first quarter of 2011, we announced over 100 additional markets where we will deploy LTE. By the end of 2011, we expect LTE to be available in more than ~~60 commercial airports by~~175 markets, including those already announced, covering a population of more than 185 million people throughout the ~~end of 2010.~~ country.

In our wireline business, our goal is to become the leading ~~broadband~~ provider of communications products and services in ~~every market~~each of the markets in which we operate. ~~We are focused on providing the highest network reliability and innovative products and services. During the nine months ended September 30, 2010, we invested $11.8 billion in capital expenditures.~~

During the three months ended ~~September 30, 2010,~~March 31, 2011, in Wireline:

for a total of ~~8.3~~8.5 million connections, including ~~3.9~~4.3 million FiOS Internet subscribers; and,

As of ~~September 30, 2010,~~March 31, 2011, we ~~passed 15.4 million premises with our high-capacity fiber optics network operated under the~~achieved penetration rates of 33.1% and 29.1% for FiOS ~~service mark.~~Internet and FiOS TV, respectively. With FiOS, we have created the opportunity to increase revenue per customer as well as improve Wireline profitability as the traditional fixed-line telephone business continues to decline due to customer migration to wireless, cable and other newer technologies.

We are also focused on gaining market share in our enterprise business through the ~~deployment~~expansion of strategic ~~enterprise~~ service offerings, including expansion of our Voice over Internet Protocol (VoIP) and international Ethernet capabilities, ~~the introduction of video~~managed network and ~~web-based conferencing capabilities,~~cloud services and ~~enhancements to our virtual private network portfolio. During the three months ended September 30, 2010, revenues from strategic enterprise services grew 6.9% compared to the similar period in 2009.~~security solutions.

Profitability Improvement – Our goal is to increase operating income and margins. Strong wireless data and FiOS revenue growth continue to positively impact operating results. In addition, ~~while~~we are seeing increasing stability in the economy, which has positively impacted our revenues in the business ~~market continue to be affected by macro-economic pressures, we are seeing some signs of stability. A sustained~~market. If the economic recovery continues, it should positively impact our revenue ~~performance~~and profitability in future quarters. However, we remain focused on cost controls with the objective of driving ~~efficiencies to offset business volume declines, as we expect the pressures of the economy to continue throughout the remainder of 2010.~~efficiencies.

Operational Efficiency – While focusing resources on revenue growth and market share gains, we are continually challenging our management team to lower expenses, particularly through technology-assisted productivity improvements, including self-service initiatives. These and other efforts, such as supply chain initiatives, real estate consolidation, call center routing improvements, a centralized shared services organization, and information technology and marketing efforts, have led to changes in our cost structure with a goal of maintaining and improving operating income margins. ~~Through our deployment of the FiOS network, we expect to realize savings annually in our ongoing operating expenses as a result of efficiencies gained from fiber network facilities.~~

Customer Service – Our goal is to be the leading company in customer service in every market we serve. We view superior product offerings and customer service ~~experiences~~ as a competitive differentiator and a catalyst to growing revenues and gaining market share. We are committed to providing high-quality customer service and continually monitor customer satisfaction in all facets of our business. ~~Verizon Wireless ranked~~In addition, we are focused on providing the highest ~~among wireless providers~~network reliability and innovative products and services. Our 4G LTE network received numerous third-party accolades addressing the superior speed and performance of our network. During the three months ended March 31, 2011, we invested $4.4 billion in ~~small to mid-sized business customer satisfaction in the J.D. Power and Associates 2010 U.S. Business Wireless Satisfaction Study released in June.~~capital expenditures.

~~Performance-Based~~Performance and Values-Based Culture – We embrace a performance and values-based culture ofthat demonstrates our commitment to integrity, respect, performance excellence, accountability, ~~based on~~and putting our customers first. Our individual and team objectives ~~that~~ are ~~performance-based and~~ tied to Verizon’s strategic imperatives. Key objectives of our compensation programs are pay-for-performance and the alignment of executives’ and stockholders’ long-term interests. We also employ a highly diverse workforce, as respect for diversity is an integral part of Verizon’s culture and a critical element of our competitive success.

Information related to trends affecting our business was disclosed in Part II, Item 7 of our Annual Report on Form 10-K for the year ended December 31, ~~2009. While we experienced~~2010. The March 2011 earthquake and tsunami in Japan did not have a significant ~~growth in~~adverse impact on our ~~wireless reseller customer base~~operations or financial results during the first ~~half~~quarter of ~~2010,~~2011. We experienced minimal disruptions to the ~~number~~operability of ~~net reseller customer additions in~~our networks and our supply chains. We are continuing to work with our suppliers to assess whether and to what extent these events may impact the ~~third quarter was comparatively lower than the first half~~future availability of ~~the year on a quarterly basis. We cannot predict at this time whether this third quarter trend will continue through the end of the year.~~network components and wireless devices. There have been no ~~other~~ significant changes to previously discussed trends.

In this section, we discuss our overall results of operations and highlight items of a non-operational nature that are not included in our ~~business~~ segment results. We have two reportable segments, which we operate and manage as strategic business units and organize by products and services. Our segments are Domestic Wireless and Wireline. In the “Segment Results of Operations” section, we review the performance of our two reportable segments.

Corporate, eliminations and other includes unallocated corporate expenses such as certain pension and other employee benefit related costs, intersegment eliminations recorded in consolidation, the results of other businesses such as our investments in unconsolidated businesses, lease financing ~~as well as~~and divested operations, and other adjustments and gains and losses that are not allocated in assessing segment performance due to their non-operational nature. Although such transactions are excluded from the business segment results, they are included in reported consolidated earnings. Gains and losses that are not individually significant are included in all segment results as these items are included in the chief operating decision maker’s assessment of segment performance. We believe that this presentation assists ~~readers~~users of our financial statements in better understanding our results of operations and trends from period to period.

The following discussion includes the results of operations of the Alltel Divestiture Markets through the date the divestitures were completed as well as the operations acquired by Frontier, which we owned through June 30, 2010 (see “Recent Developments”).


																Three Months Ended March 31,					Increase/(Decrease)
	Three Months Ended September 30,								Nine Months Ended September 30,
(dollars in millions)	2010			2009		% Change			2010		2009		% Change			2011			2010		2011 vs. 2010

Domestic Wireless
Service revenue	$	14,168		$	13,149		7.7		$	41,436	$	38,863		6.6		$	14,311		$	13,466	$	845		6.3	%
Equipment and other		2,082			2,182		(4.6	)		5,823		6,187		(5.9	)		2,570			1,846		724		39.2

Total		16,250			15,331		6.0			47,259		45,050		4.9			16,881			15,312		1,569		10.2
Wireline
Mass Markets		4,073			4,047		0.6			12,171		12,068		0.9			4,078			4,028		50		1.2
Global Enterprise		3,926			3,958		(0.8	)		11,705		11,754		(0.4	)		3,816			3,779		37		1.0
Global Wholesale		2,072			2,307		(10.2	)		6,382		6,867		(7.1	)		2,042			2,299		(257	)	(11.2	)
Other		215			355		(39.4	)		680		1,181		(42.4	)		211			269		(58	)	(21.6	)

Total		10,286			10,667		(3.6	)		30,938		31,870		(2.9	)		10,147			10,375		(228	)	(2.2	)
Corporate, eliminations and other		(52	)		1,267		nm			1,973		3,797		(48.0	)		(38	)		1,226		(1,264	)	nm

Consolidated Revenues	$	26,484		$	27,265		(2.9	)	$	80,170	$	80,717		(0.7	)	$	26,990		$	26,913	$	77		0.3

~~Consolidated~~The increase in consolidated revenues ~~decreased by $781 million, or 2.9%,~~ during the three months ended ~~September 30, 2010, and $547 million or 0.7%, for the nine months ended September 30, 2010~~March 31, 2011 compared to the similar ~~periods~~period in ~~2009~~2010 was primarily due to ~~the sale of divested operations and~~growth in revenues at Domestic Wireless, partially offset by declines in Global Wholesale revenues at our Wireline segment resulting from ~~switched access line losses and~~ decreased MOUs in traditional voice products, ~~partially offset by higher revenues~~and continued rate compression as well as a decline in ~~our growth markets.~~total voice connections.

Corporate, eliminations and other during the ~~second quarter of~~three months ended March 31, 2010 included a one-time non-cash adjustment of ~~$268~~$33 million primarily to ~~reduce~~adjust wireless data revenues. This adjustment was recorded to properly defer previously recognized wireless data revenues that will be earned and recognized in future periods. ~~As the~~The amounts involved were not material to ~~our~~the consolidated financial statements in the current or any previous reporting period ~~the adjustment was recorded during the second quarter of 2010~~ (see “Other Items”). In addition, the results of operations related to the divestitures (see “Acquisitions and Divestitures”) included in Corporate, eliminations and other are as follows:


	Three Months Ended September 30,				Nine Months Ended September 30,				Three Months Ended March 31,
(dollars in millions)	2010		2009		2010		2009		2011		2010
Impact of Divested Operations
Operating revenues	$	–	$	1,331	$	2,407	$	4,009	$	–	$	1,278
Cost of services and sales		–		311		574		967		–		306
Selling, general and administrative expense		–		333		665		973		–		352
Depreciation and amortization expense		–		227		413		665		–		205

Domestic Wireless’ revenues increased ~~by $919 million, or 6.0%,~~ during the three months ended ~~September 30, 2010 and $2,209 million, or 4.9%, for the nine months ended September 30, 2010~~March 31, 2011 compared to the similar ~~periods~~period in ~~2009~~2010 primarily due to growth in both service and equipment revenue. Service revenue increased ~~by $1,019 million, or 7.7%,~~ during the three months ended ~~September 30, 2010 and $2,573 million, or 6.6%, for the nine months ended September 30, 2010~~March 31, 2011 compared to the similar ~~periods~~period in ~~2009~~2010 primarily due to ~~a 6.2 million, or 7.1%,~~an increase in total ~~customers~~connections since ~~October~~April 1, ~~2009,~~2010, as well as continued growth in ~~our~~retail postpaid data ARPU, partially offset by a decline in retail postpaid voice ARPU.

~~Total wireless~~Wireless total data revenue was ~~$5,062 million~~$5.5 billion and accounted for ~~35.7%~~38.1% of service revenue during the three months ended ~~September 30, 2010,~~March 31, 2011, compared to ~~$4,007 million~~$4.5 billion and ~~30.5%~~33.2% during the similar period in 2009. Total wireless data revenue was $14,282 million and accounted for 34.5% of service revenue during the nine months ended September 30, 2010 compared to $11,366 million and 29.2% during the similar period in 2009.2010. Total data revenue continues to increase as a result of the increased penetration of data offerings, in particular for e-mail and web services resulting ~~in part~~ from increased sales of ~~smartphone~~smartphones and other data-capable devices. Voice revenue decreased ~~primarily due to the impact~~as a result of ~~changes~~continued declines in ~~our customer mix as well as the ongoing impact of customers seeking to optimize the value of our~~retail postpaid voice ~~minute bundles,~~ARPU, partially offset by an increase in the number of customers.

Equipment and other revenue ~~decreased by $100 million, or 4.6%,~~increased during the three months ended ~~September 30, 2010 and $364 million, or 5.9%, during the nine months ended September 30, 2010~~March 31, 2011 compared to the similar ~~periods~~period in ~~2009~~2010 due to ~~declines~~an increase in ~~gross retail customer additions. The decrease~~the sales volume to new and upgrading customers as well as an increase in ~~Equipment~~the average revenue per unit for smartphones, including Apple’s iPhone 4, and other data-capable devices. Partially offsetting these increases were decreases in both the sales volume and average revenue per unit for feature phones.

Wireline’s revenues decreased during the three months ended ~~September 30,~~March 31, 2011 compared to the similar period in 2010 ~~was also impacted~~primarily driven by ~~lower revenue from cost recovery surcharges as a result of a decrease~~declines in ~~our cost recovery rate.~~Global Wholesale revenues and total voice connections.

~~Wireline’s~~Mass Markets revenues ~~decreased by $381 million, or 3.6%,~~increased during the three months ended ~~September 30, 2010 and $932 million, or 2.9%, during the nine months ended September 30, 2010~~March 31, 2011 compared to the similar ~~periods~~period in 2009 primarily driven by switched access line losses and decreased MOUs in traditional voice products. Mass Markets revenues increased by $26 million, or 0.6%, during the three months ended September 30, 2010 ~~and $103 million, or 0.9%, during the nine months ended September 30, 2010 compared to the similar periods in 2009~~ primarily due to the expansion of consumer and business FiOS services ~~(Voice,~~(voice, Internet and TV), ~~which are typically sold in bundles,~~ partially offset by the decline of local exchange ~~revenues principally as a result of a~~revenues. This decline in ~~switched access lines.~~local exchange revenues was due to an 8.2% decline in total voice connections resulting primarily from competition and technology substitution.

Global Enterprise revenues ~~decreased by $32 million, or 0.8%,~~increased during the three months ended ~~September 30, 2010~~March 31, 2011 compared to the similar period in ~~2009~~2010 due to higher strategic services, offset primarily ~~due to~~by lower local services and traditional circuit-based ~~revenues, partially offset by higher customer premises equipment revenue.~~ revenues.

Global ~~Enterprise~~Wholesale revenues decreased ~~$49 million, or 0.4%,~~ during the ~~nine~~three months ended ~~September 30, 2010~~March 31, 2011 compared to the similar period in 2009 primarily due to lower long distance and traditional circuit-based data revenues, partially offset by higher customer premises equipment and strategic networking revenue. Global Wholesale revenues decreased by $235 million, or 10.2%, during the three months ended September 30, 2010 ~~and $485 million, or 7.1%, during the nine months ended September 30, 2010 compared to the similar periods in 2009~~ primarily due to decreased MOUs in traditional voice products, resulting primarily from increases in voice termination pricing on certain international routes, which negatively impacted volume, and continued rate compression due to competition in the marketplace.

Other revenue decreased ~~by $140 million, or 39.4%,~~ during the three months ended ~~September 30, 2010 and $501 million, or 42.4%, during the nine months ended September 30, 2010~~March 31, 2011 compared to the similar ~~periods~~period in ~~2009~~2010 primarily due to reduced business volumes, including former MCI mass ~~markets~~market customer losses.


															Three Months Ended March 31,				Increase/(Decrease)
	Three Months Ended September 30,							Nine Months Ended September 30,
(dollars in millions)	2010		2009		% Change			2010		2009		% Change			2011		2010		2011 vs. 2010
Cost of services and sales	$	11,250	$	10,996		2.3		$	34,206	$	31,785		7.6		$	11,229	$	10,652	$	577		5.4	%
Selling, general and administrative expense		7,465		8,111		(8.0	)		23,508		23,543		(0.1	)		7,284		7,698		(414	)	(5.4	)
Depreciation and amortization expense		4,022		4,172		(3.6	)		12,319		12,291		0.2			4,024		4,122		(98	)	(2.4	)

Consolidated Operating Expenses	$	22,737	$	23,279		(2.3	)	$	70,033	$	67,619		3.6		$	22,537	$	22,472	$	65		0.3

Consolidated operating expenses ~~decreased by $542 million, or 2.3%,~~increased during the three months ended ~~September 30, 2010 and increased $2,414 million or 3.6% during the nine months ended September 30, 2010~~March 31, 2011 compared to the similar ~~periods~~period in ~~2009.~~2010 primarily due to higher operating expenses at Domestic Wireless, partially offset by lower expenses at Wireline and the impact of non-operational charges during the three months ended March 31, 2010. Consolidated operating expenses during the three ~~and nine~~ months ended ~~September 30, 2010~~March 31, 2011 were ~~primarily~~also positively impacted by ~~higher severance, pension and benefit charges as well as higher operating expenses at Domestic Wireless. Consolidated operating expenses during~~ the ~~three and nine months ended September 30, 2010 were favorably impacted primarily by the sale of~~ divested ~~operations and cost reduction initiatives at Wireline.~~

Cost of services and sales increased ~~by $254 million, or 2.3%,~~ during the three months ended ~~September 30, 2010 and $2,421 million, or 7.6%, during the nine months ended September 30, 2010~~March 31, 2011 compared to the similar ~~periods~~period in ~~2009~~2010 primarily due to ~~severance, pension~~higher cost of equipment sales and ~~benefit charges recorded during the three and nine months ended September 30, 2010 and other non-operational charges noted in the table below. Also contributing to the increases were higher content~~network costs at our Domestic Wireless segment. The increase was partially offset by lower access costs and a decline in pension and other postretirement benefit expense at our Wireline segment and the ~~sale~~impact of the divested operations ~~lower headcount~~ and ~~productivity improvements at our Wireline segment. The nine~~non-operational charges during the three months ended September 30, 2010 were also impacted by higher customer premise equipment costs. Wireless network costs also increased as a result of an increase in local interconnection cost and increases in roaming costs.March 31, 2010.

Selling, general and administrative expense decreased ~~by $646 million, or 8.0%,~~ during the three months ended ~~September 30, 2010 and $35 million, or 0.1%, during the nine months ended September 30, 2010~~March 31, 2011 compared to the similar ~~periods~~period in ~~2009. These decreases were~~2010 primarily due to ~~lower severance,~~a decline in pension and other postretirement benefit ~~charges,~~and compensation expense at our Wireline segment and the ~~sale~~impact of the divested operations and non-operational charges during the ~~impact of cost reduction initiatives in our Wireline segment.~~three months ended March 31, 2010. Partially offsetting the ~~decreases were~~decrease was higher sales commission expense at our Domestic Wireless segment in our indirect channel related to increases in both contract renewals in connection with equipment upgrades and the average commission per unit as the mix of units and service plans sold continues to shift toward data devices. Selling, general and administrative expense during the three and nine months ended September 30, 2010 were also impacted by higher access line spin-off related charges noted in the table below.segment.

Depreciation and amortization expense decreased ~~by $150 million, or 3.6%,~~ during the three months ended ~~September 30, 2010 and increased $28 million, or 0.2%,~~March 31, 2011 compared to the similar ~~periods~~period in ~~2009. The decrease during the three months ended September 30,~~ 2010 ~~was~~ primarily due to the sale of the divested ~~operations. The increase during~~operations as well as the nine months ended September 30, 2010 compared to the similar period in 2009 was primarily due to growth in depreciable assets, partially offset by sale of the divested operations. The three and nine months ended September 30, 2010 were also impacted by lower non-operational charges noted in the table ~~below.~~below, partially offset by growth in depreciable assets.


	Three Months Ended September 30,				Nine Months Ended September 30				Three Months Ended March 31,
(dollars in millions)	2010		2009		2010		2009		2011		2010
Merger Integration and Acquisition Related Charges
Cost of services and sales	$	92	$	79	$	225	$	164	$	–	$	37
Selling, general and administrative expense		42		102		148		308		–		40
Depreciation and amortization expense		25		96		78		232		–		28

Total	$	159	$	277	$	451	$	704	$	–	$	105


Severance, Pension and Benefit Charges
Cost of services and sales	$	618	$	–	$	2,367	$	–
Selling, general and administrative expense		255		610		956		1,026

Total	$	873	$	610	$	3,323	$	1,026


Access Line Spin-off Related Charges
Cost of services and sales	$	–	$	3	$	42	$	3	$	–	$	15
Selling, general and administrative expense		67		59		365		59		–		130

Total	$	67	$	62	$	407	$	62	$	–	$	145

Equity in earnings of unconsolidated businesses decreased ~~by $25~~$32 million, ~~and $27 million, respectively,~~or 24.1%, during the three ~~and nine~~ months ended ~~September 30, 2010~~March 31, 2011 compared to the similar ~~periods~~period in ~~2009~~2010 primarily due to lower earnings from operations at Vodafone Omnitel N.V. ~~(Vodafone Omnitel) which were primarily driven by the devaluation of the Euro versus the U.S. dollar.~~

Additional information relating to Other income and (expense), net is as follows:


																		Three Months Ended March 31,					Increase/(Decrease)
	Three Months Ended September 30,									Nine Months Ended September 30,
(dollars in millions)	2010			2009			% Change			2010			2009		% Change			2011			2010		2011 vs. 2010
Interest income	$	17		$	18			(5.6	)	$	61		$	59		3.4		$	19		$	27	$	(8	)	(29.6	)%
Foreign exchange gains (losses), net		(17	)		(13	)		30.8			3			7		(57.1	)		(12	)		14		(26	)	nm
Other, net		(50	)		8			nm			(52	)		11		nm			29			5		24		nm

Total	$	(50	)	$	13			nm		$	12		$	77		(84.4	)	$	36		$	46	$	(10	)	(21.7	)

Other income and (expense), net decreased by $63 million and $65 million, respectively, during the three and nine months ended September 30, 2010 compared to the similar periods in 2009 primarily due to fees incurred during the third quarter of 2010 related to the early extinguishment of debt (see “Consolidated Financial Condition”). The decreases were also driven by foreign exchange losses primarily resulting from the devaluation of the Euro versus the U.S. dollar.


																			Three Months Ended March 31,						Increase/(Decrease)
	Three Months Ended September 30,									Nine Months Ended September 30,
(dollars in millions)	2010			2009			% Change			2010			2009			% Change			2011			2010			2011 vs. 2010
Total interest costs on debt balances	$	834		$	935			(10.8	)	$	2,649		$	3,112			(14.9	)	$	822		$	906		$	(84	)	(9.3	)%
Less capitalized interest costs		237			231			2.6			693			696			(0.4	)		113			226			(113	)	(50.0	)

Total	$	597		$	704			(15.2	)	$	1,956		$	2,416			(19.0	)	$	709		$	680		$	29		4.3


Average debt outstanding	$	54,236		$	64,257					$	58,568		$	64,530					$	56,114		$	61,859
Effective interest rate		6.2	%		5.8	%					6.0	%		6.4	%					5.9	%		5.9	%

Total interest costs on debt balances decreased by $101 million and $463 million, respectively, during the three and nine months ended September 30, 2010 compared to the similar periods in 2009 primarily due to declines in average debt, partially offset by higher interest rates during the three months ended ~~September 30, 2010. Interest~~March 31, 2011 compared to the similar period in 2010 primarily due to a $5.7 billion decline in average debt. Total capitalized interest costs decreased during the ~~nine~~three months ended ~~September 30, 2009 included fees related~~March 31, 2011 compared to the ~~bridge facility that was entered into and utilized~~similar period in 2010 primarily due to ~~complete~~a reduction in wireless licenses under development for commercial service. Capitalized interest costs will be significantly lower this year due to our deployment of the ~~acquisition of Alltel, which contributed to the higher effective interest rate in the prior year.~~


																			Three Months Ended March 31,						Increase/(Decrease)
	Three Months Ended September 30,									Nine Months Ended September 30,
(dollars in millions)	2010			2009			% Change			2010			2009			% Change			2011			2010			2011 vs. 2010
Provision for income taxes	$	321		$	574			(44.1	)	$	1,837		$	1,924			(4.5	)	$	617		$	1,622		$	(1,005	)	(62.0	)%
Effective income tax rate		9.9	%		16.6	%					21.4	%		17.2	%					15.9	%		41.2	%

The effective income tax rate is calculated by dividing the provision for income taxes by income before the provision for income taxes. Our annual effective tax rate is significantly lower than the statutory federal income tax rate due to the inclusion of income attributable to Vodafone Group Plc.’s (Vodafone) noncontrolling interest in the Verizon Wireless partnership within our income before the provision for income ~~taxes.~~taxes, which resulted in our effective tax rate being 14.1% and 37.4% lower during the three months ended March 31, 2011 and 2010, respectively.

The decrease in the effective income tax rate ~~decreased to 9.9%~~ for the three months ended September 30, 2010 compared to 16.6% during the similar period in 2009. The decrease was primarily driven by lower Net income attributable to Verizon, which was related to the severance, pension and benefit charges, the impact of higher earnings attributable to the noncontrolling interest and lower state income tax from domestic restructuring in the period.

~~The effective income tax rate increased to 21.4% for the nine months ended September 30, 2010 as compared to 17.2% during the similar period in 2009. The increase~~March 31, 2011 was primarily driven by a one-time, non-cash income tax charge of ~~$962 million, resulting in an 11 percentage point increase to our effective tax rate. Also impacting~~$1.0 billion during the ~~effective tax rate were the items discussed above. The one-time non-cash income tax charge was~~three months ended March 31, 2010, as a result of the enactment of the Patient Protection and Affordable Care Act and the Health Care and Education Reconciliation Act of 2010, both of which became law in March 2010 (collectively the Health Care Act). Under the Health Care Act, beginning in 2013, Verizon and other companies that receive a subsidy under Medicare Part D to provide retiree prescription drug coverage will no longer receive a federal income tax deduction for the expenses incurred in connection with providing the subsidized coverage to the extent of the subsidy received. Because future anticipated retiree prescription drug plan liabilities and related subsidies ~~are~~were already reflected in Verizon’s financial statements, this change required Verizon to reduce the value of the related tax benefits recognized in its financial statements in the period during which the Health Care Act was enacted. ~~The ongoing impact on our 2010 effective tax rate from the lower federal income tax deduction is not significant.~~

As of September 30, 2010, the Company projects its 2010 effective tax rate to be in the range of 16% to 17% excluding the impact of integration and similar costs incurred in connection with the Alltel acquisition, divestiture of Alltel overlapping properties, divestiture of access lines, and severance, pension and benefit charges. As a global commercial enterprise, it is difficult to forecast the Company’s full-year effective tax rate with any further precision due to the numerous factors that could occur and impact the rate. Examples of these factors include possible changes in federal, state and foreign income tax laws or rates, developments with respect to open tax years and income tax audits requiring adjustments to unrecognized tax benefits, acquisitions and dispositions, and changes in operating results that would require increases or decreases to valuation allowances. For 2010, excluding earnings attributable to the noncontrolling interest in Verizon Wireless, the effective tax rate attributable to Verizon is projected to be in the range of 31% to 32%.

Unrecognized tax benefits were ~~$3,196 million~~$3.1 billion at March 31, 2011 and ~~$3,400 million~~$3.2 billion at ~~September 30, 2010 and~~ December 31, ~~2009, respectively.~~2010. Interest and penalties related to unrecognized tax benefits were ~~$506 million (after-tax) and $552 million~~$0.5 billion (after-tax) at ~~September 30, 2010~~March 31, 2011 and December 31, ~~2009,~~2010, respectively. The Internal Revenue Service (IRS) is currently examining the Company’s U.S. income tax returns for tax years 2004 through 2006. As a large taxpayer, we are under continual audit by the IRS and multiple state and foreign jurisdictions on numerous open tax positions. Significant ~~foreign income~~ tax examinations and litigation are ongoing in Massachusetts, New York, Canada, Australia and Italy for tax years as early as 2002. It is reasonably possible that the amount of the liability for unrecognized tax benefits could change by a significant amount during the next twelve-month period. An estimate of the range of the possible change cannot be made until issues are further developed or examinations close.


													Three Months Ended March 31,				Increase/(Decrease)
	Three Months Ended September 30,						Nine Months Ended September 30,
(dollars in millions)	2010		2009		% Change		2010		2009		% Change		2011		2010		2011 vs. 2010
Net income attributable to noncontrolling interest	$	2,039	$	1,711		19.2	$	5,659	$	4,953		14.3	$	1,825	$	1,875	$	(50	)	(2.7	)%

The ~~increase~~decrease in Net income attributable to noncontrolling interest during the three ~~and nine~~ months ended ~~September 30, 2010~~March 31, 2011 compared to the similar ~~periods~~period in ~~2009~~2010 was due to ~~higher~~lower earnings in our Domestic Wireless segment, which has a 45% noncontrolling partnership interest attributable to Vodafone.

We have two reportable segments, Domestic Wireless and Wireline, which we operate and manage as strategic business units and organize by products and services. We measure and evaluate our reportable segments based on segment operating income. The use of segment operating income is consistent with the chief operating decision maker’s assessment of segment performance.

Segment earnings before interest, taxes, depreciation and amortization (Segment EBITDA), which is presented below, is a non-GAAP measure and does not purport to be an alternative to operating income as a measure of operating performance. Management believes that this measure is useful to investors and other users of our financial information in evaluating operating profitability on a more variable cost basis as it excludes the depreciation and amortization expenses related primarily to capital expenditures and acquisitions that occurred in prior years, as well as in evaluating operating performance in relation to ~~Verizon’s~~our competitors. Segment EBITDA is calculated by adding back depreciation and amortization expense to segment operating income.

Verizon Wireless Segment EBITDA service margin, also presented below, is calculated by dividing Verizon Wireless Segment EBITDA by Verizon Wireless service revenues. Verizon Wireless Segment EBITDA service margin utilizes service revenues rather than total revenues. Service revenues exclude primarily equipment revenues ~~(as well as other non-service revenues)~~ in order to reflect the impact of providing service to the wireless customer base on an ongoing basis. Verizon Wireline EBITDA margin is calculated by dividing Wireline EBITDA by total Wireline revenues.

It is management’s intent to provide non-GAAP financial information to enhance the understanding of Verizon’s GAAP financial information, and it should be considered by the reader in addition to, but not instead of, the financial statements prepared in accordance with GAAP. Each non-GAAP financial measure is presented along with the corresponding GAAP measure so as not to imply that more emphasis should be placed on the non-GAAP measure. The non-GAAP financial information presented may be determined or calculated differently by other companies. You can find additional information about our segments in Note 9 to the consolidated financial statements.

Our Domestic Wireless segment provides wireless voice and data services and equipment sales ~~across~~to consumers, business and government customers in the ~~U.S.~~United States. This segment primarily represents the operations of the Verizon joint venture with Vodafone, operating as Verizon Wireless. We own a 55% interest in ~~the joint venture~~Verizon Wireless and Vodafone owns the remaining 45%. All financial results included in the tables below reflect the consolidated results of Verizon ~~Wireless excluding the results of operations of the Alltel Divestiture Markets through the date the divestitures were completed (see “Recent Developments”).~~Wireless.

The increase in Domestic Wireless’ total operating revenue during the three months ended ~~September 30, 2010 increased by $919 million, or 6.0%, and $2,209 million, or 4.9%, during the nine months ended September 30, 2010~~March 31, 2011 compared to the similar ~~periods~~period in ~~2009 primarily due to~~2010 was the result of growth in both service and equipment revenue.

Service revenue increased during the three months ended ~~September 30, 2010 increased by $1,019 million, or 7.7%, and $2,573 million, or 6.6%, during the nine months ended September 30, 2010~~March 31, 2011 compared to the similar ~~periods~~period in ~~2009~~2010 primarily due to ~~a 6.2 million, or 7.1%,~~an increase in total ~~customers~~connections since ~~October~~April 1, ~~2009,~~2010, as well as continued growth in ~~our~~retail postpaid data ARPU, partially offset by a decline in retail postpaid voice ARPU.

~~Excluding acquisitions~~The increase in retail and ~~adjustments, Domestic Wireless added approximately 447,000 and 1.2 million~~retail postpaid customer net retail customers, respectively, during the three and nine months ended September 30, 2010, compared to approximately 916,000 and 3.2 million during the similar periods in 2009. The decline in net retail customer additions during the ~~three and nine months ended September 30, 2010~~first quarter of 2011 compared to the similar ~~periods~~period in ~~2009~~2010 was due to ~~a decrease~~an increase in ~~gross~~ retail postpaid customer gross additions as well as ~~an increase~~on-going improvements in ~~churn for~~ our retail ~~prepaid base in part attributable to a marketplace shift in~~ customer ~~activations within~~churn rate, both of which were the ~~period toward unlimited prepaid offerings of the type being sold by a number~~result of our ~~resellers. However, we~~new device introductions, including the Apple iPhone 4 and our 4G LTE capable devices. Retail (non-wholesale) customers are customers directly served and managed by Verizon Wireless and that use its branded services. Retail postpaid customers represent individual lines of service for which a customer pays in advance a monthly access charge in return for a monthly voice and/or data service allowance, and use of any services beyond the allowances is billed in arrears. Churn is the rate at which customers disconnect individual lines of service. We expect to continue to experience retail customer growth based on the strength of our product offerings and network service quality. ~~Our total churn rate~~

Total connection net additions increased during the three and nine months ended September 30, 2010 compared to the similar periods in 2009 improved as a result of successful customer retention efforts. Churn is the rate at which customers disconnect individual lines of service.

Excluding acquisitions and adjustments, Domestic Wireless added approximately 997,000 and 3.9 million net total customers, respectively, during the three and nine months ended September 30, 2010 compared to approximately 1.2 million and 3.5 million during the similar periods in 2009. The decrease in net total customer additions during thefirst three months ~~ended September 30, 2010 was due to the decline in net retail customer additions described above. The increase in net total customer additions during the nine months ended September 30, 2010~~of 2011 compared to the similar period in ~~2009 was~~2010 due to the ~~cumulative increase~~above mentioned increases in retail and retail postpaid customer net additions, partially offset by a year over year decline in net ~~customer~~ additions from wholesale and other connections. Total connections represent the total of our retail customers and wholesale and other connections. Wholesale and other connections include customers from our reseller channel as ~~a result of the marketplace shift in customer activations mentioned above.~~

~~Customers~~well as connections from ~~acquisitions~~non-traditional wireless-enabled devices, such as those used to support vehicle tracking, telematics services and adjustments for the three and nine months ended September 30, 2010 included approximately 106,000 net customers, after conforming adjustments, that we acquired in a transaction with AT&T. Customers from acquisitions for the nine months ended September 30, 2009 included approximately 11.4 million net total customer additions, after conforming adjustments and the impact of required divestitures, which resulted from our acquisition of Alltel on January 9, 2009.machine-to-machine connections.

Total data revenue was ~~$5,062 million~~$5.5 billion and accounted for ~~35.7%~~38.1% of service revenue during the three months ended ~~September 30, 2010~~March 31, 2011 compared to ~~$4,007 million~~$4.5 billion and ~~30.5%~~33.2% during the similar period in 2009. Total data revenue was $14,282 million and accounted for 34.5% of service revenue during the nine months ended September 30, 2010 compared to $11,366 million and 29.2% during the similar period in 2009.2010. Total data revenue continues to increase as a result of the increased penetration of data offerings, in particular for e-mail and web services resulting ~~in part~~ from increased sales of ~~smartphone~~smartphones and other data-capable devices. Voice revenue decreased as a result of continued declines in ~~our~~retail postpaid voice ARPU, as discussed below, partially offset by an increase in the number of customers. We expect that total service revenue and total data revenue will continue to grow as we grow our customer base, increase the penetration of our data offerings and increase the proportion of our customer base using ~~smartphone~~smartphones and other data-capable devices.

The ~~decline~~increases in retail service ARPU (the average revenue per user per month from retail customers), and retail postpaid ARPU (the average revenue per user per month from retail postpaid customers) for the ~~nine~~three months ended ~~September 30, 2010~~March 31, 2011 as compared to the similar period in ~~2009 was~~2010 were due to a continued ~~reduction in voice revenue per customer and the impact of changes~~increase in our ~~customer mix as a result of increased reseller net customer additions, partially offset by an increase in~~retail postpaid data ~~ARPU. Service~~ ARPU, ~~for the three months ended September 30, 2010 and retail service ARPU for both the three and nine months ended September 30, 2010 increased due to increases in our penetration of data offerings,~~ which more than offset ~~declines~~a decline in our retail postpaid voice revenues. Total voice ARPU declined $2.56, or 7.3%, during the three months ended September 30, 2010 and declined $2.84, or 7.9%, during the nine months ended September 30, 2010 compared to the similar periods in 2009 due to the impact of the aforementioned changes in our customer mix as well as the ongoing impact of customers seeking to optimize the value of our voice minute bundles. The increases in totalARPU. Retail postpaid data ARPU ~~were~~increased as a result of continued growth and penetration of our data offerings, resulting in part from the above mentioned increase in sales of our ~~smartphone~~smartphones and other data-capable devices. As of March 31, 2011, 32.2% of our retail postpaid devices were smartphone devices, compared to 18.6% at March 31, 2010. Retail postpaid voice ARPU declined $1.86, or 5.3%, due to the ongoing impact of our retail customers seeking to optimize the value of our voice minute bundles.

Other service revenue includes revenue from wholesale and other connections as well as third party roaming revenue. Other service revenue increased as a result of the growth in wholesale and other connections and higher data roaming revenue.

Equipment and other revenue increased during the three months ended ~~September 30, 2010 decreased by $100 million, or 4.6%, and $364 million, or 5.9%, during the nine months ended September 30, 2010~~March 31, 2011 compared to the similar ~~periods~~period in ~~2009~~2010 due to ~~declines~~an increase in ~~gross retail customer additions. The decrease~~the sales volume to new and upgrading customers as well as an increase in ~~Equipment~~average revenue per unit for smartphones, including Apple’s iPhone 4, and other data-capable devices. Partially offsetting these increases were decreases in both the sales volume and average revenue ~~during the three months ended September 30, 2010 was also impacted by lower revenue from cost recovery surcharges as a result of a decrease in our cost recovery rate.~~


(dollars in millions)	Three Months Ended September 30,						Nine Months Ended September 30,
(dollars in millions)													Three Months Ended March 31,				Increase/(Decrease)

(dollars in millions)	2010		2009		% Change		2010		2009		% Change		2011		2010		2011 vs. 2010
(dollars in millions)	$	5,017	$	4,929		1.8	$	14,428	$	14,204		1.6	$	5,880	$	4,675	$	1,205	25.8	%
Selling, general and administrative expense		4,543		4,399		3.3		13,486		13,056		3.3		4,751		4,492		259	5.8
Depreciation and amortization expense		1,836		1,758		4.4		5,475		5,234		4.6		1,899		1,812		87	4.8

Total Operating Expenses	$	11,396	$	11,086		2.8	$	33,389	$	32,494		2.8	$	12,530	$	10,979	$	1,551	14.1

Cost of services and sales increased ~~by $88 million, or 1.8%,~~ during the three months ended ~~September 30, 2010 and $224 million, or 1.6%, during the nine months ended September 30, 2010~~March 31, 2011 compared to the similar ~~periods~~period in ~~2009. The~~2010 primarily due to higher costs of equipment sales and network costs. Cost of equipment sales increased by $1.1 billion driven by increased sales of higher cost smartphones, including Apple’s iPhone 4, and other data-capable devices. Partially offsetting these increases were decreases in the volume sold and average cost per unit of feature phones. In addition, cost of services ~~were primarily attributable~~increased due to higher wireless network costs ~~due to increases~~driven by an increase in local interconnection ~~cost, as a result of both higher~~costs related to additional Evolution-Data Optimized (EV-DO) capacity ~~needs from increases in~~to meet expected data usage demands as well as ~~costs incurred to transition to~~an increase in Ethernet facilities costs that ~~will be used to enable LTE. In addition,~~support the 4G LTE network which was deployed in December 2010. The increase in ~~costs~~cost of services was also impacted by higher roaming costs as a result of ~~increased international roaming volumes, data roaming and~~ roaming costs incurred in ~~the Alltel Divestiture Markets. Also contributing to higher wireless network costs during the nine months ended September 30, 2010 compared to the similar period in 2009~~divested markets and increased data roaming. Partially offsetting these increases was an increase in operating lease expense related to our network cell sites. Cost of equipment sales decreased by $68 million and $134 million during the three and nine months ended September 30, 2010, respectively, compared to the similar periods in 2009 primarily due to a decrease in ~~gross retail customer additions partially offset by an increase in the average cost per unit.~~long distance costs.

Selling, general and administrative expense increased ~~by $144 million, or 3.3%,~~ during the three months ended ~~September 30, 2010 and $430 million, or 3.3%, during the nine months ended September 30, 2010~~March 31, 2011 compared to the similar ~~periods~~period in ~~2009 primarily~~2010 due to ~~an increase in~~higher sales commission expense in our indirect channel. Indirect sales commission expense increased ~~$175 million and $494 million, respectively,~~$0.3 billion during the three ~~and nine~~ months ended ~~September 30, 2010~~March 31, 2011 compared to the similar ~~periods~~period in ~~2009~~2010 as a result of increases in ~~both contract renewals in connection with equipment upgrades and~~ the average commission per unit, as the mix of units ~~and service plans sold~~ continues to shift toward data ~~devices. Also contributing to the increase during the nine months ended September 30, 2010 compared to the similar period~~devices and more customers activate data services, and contract renewals in ~~2009 was an increase in non-income taxes of $110 million, due to both the growth in our revenues subject to fees as well as~~connection with equipment upgrades. We also experienced increases in salary and benefits and customer service outsourcing in connection with the ~~federal universal service fund rate. These increases were partially offset by a decrease in compensation related costs, excluding commissions~~launch of ~~$141 million during the nine months ended September 30, 2010 compared to the similar period in 2009.~~Apple’s iPhone 4.

Depreciation and amortization expense increased ~~by $78 million, or 4.4%,~~ during the three months ended ~~September 30, 2010 and $241 million, or 4.6%, during the nine months ended September 30, 2010~~March 31, 2011 compared to the similar ~~periods~~period in ~~2009. These increases were~~2010 primarily driven by growth in depreciable ~~assets through the third quarter of 2010.~~assets.


(dollars in millions)	Three Months Ended September 30,								Nine Months Ended September 30,
(dollars in millions)																	Three Months Ended March 31,						Increase/(Decrease)

(dollars in millions)	2010			2009			% Change		2010			2009			% Change		2011			2010			2011 vs. 2010
(dollars in millions)	$	4,854		$	4,245			14.3	$	13,870		$	12,556			10.5	$	4,351		$	4,333		$	18	0.4	%
Add Depreciation and amortization expense		1,836			1,758			4.4		5,475			5,234			4.6		1,899			1,812			87	4.8

Segment EBITDA	$	6,690		$	6,003			11.4	$	19,345		$	17,790			8.7	$	6,250		$	6,145		$	105	1.7


Segment operating income margin		29.9	%		27.7	%				29.3	%		27.9	%				25.8	%		28.3	%
Segment EBITDA service margin		47.2	%		45.7	%				46.7	%		45.8	%				43.7	%		45.6	%

The increases in Domestic Wireless’ Operating income and Segment EBITDA during the three ~~and nine~~ months ended ~~September 30, 2010~~March 31, 2011 compared to the similar ~~periods~~period in ~~2009~~2010 were primarily as a result of the ~~impact of~~ factors described in connection with operating revenues and operating expenses above.

Non-recurring or non-operational items excluded from Domestic Wireless’ Operating income were as follows:

The Wireline segment provides customers with communication products and services, including voice, broadband video and data, network access, long distance and other services, to residential and small business customers and carriers, as well as next-generation IP network services and communications solutions to medium and large businesses and government customers globally.

~~The following discussion excludes the results of the operations acquired by Frontier, which we owned through June 30, 2010 (see “Recent Developments”).~~


															Three Months Ended March 31,				Increase/(Decrease)
	Three Months Ended September 30,							Nine Months Ended September 30,
(dollars in millions)	2010		2009		% Change			2010		2009		% Change			2011		2010		2011 vs. 2010
Consumer retail															$	3,383	$	3,320	$	63		1.9	%
Small business																695		708		(13	)	(1.8	)

Mass Markets	$	4,073	$	4,047		0.6		$	12,171	$	12,068		0.9			4,078		4,028		50		1.2

Strategic services																1,774		1,573		201		12.8
Other																2,042		2,206		(164	)	(7.4	)

Global Enterprise		3,926		3,958		(0.8	)		11,705		11,754		(0.4	)		3,816		3,779		37		1.0

Global Wholesale		2,072		2,307		(10.2	)		6,382		6,867		(7.1	)		2,042		2,299		(257	)	(11.2	)
Other		215		355		(39.4	)		680		1,181		(42.4	)		211		269		(58	)	(21.6	)

Total Operating Revenues	$	10,286	$	10,667		(3.6	)	$	30,938	$	31,870		(2.9	)	$	10,147	$	10,375	$	(228	)	(2.2	)


Switched access lines in service (‘000)									26,544		29,003		(8.5	)
Total voice connections (’000)																25,454		27,719		(2,265	)	(8.2	)

Broadband connections (‘000)									8,340		8,119		2.7
FiOS Internet subscribers (‘000)									3,885		3,136		23.9
FiOS TV subscribers (‘000)									3,290		2,601		26.5
Total Broadband connections (’000)																8,490		8,241		249		3.0
FiOS Internet subscribers (’000)																4,289		3,466		823		23.7
FiOS TV subscribers (’000)																3,664		2,914		750		25.7

Mass Markets revenue includes local exchange (basic service and end-user access), long distance (including regional toll), broadband services (including high-speed Internet and FiOS Internet) and FiOS TV services for residential and small business subscribers.

Mass Markets ~~revenue~~revenues increased ~~by $26 million, or 0.6%,~~ during the three months ended ~~September 30, 2010 and $103 million, or 0.9%, during the nine months ended September 30, 2010~~March 31, 2011 compared to the similar ~~periods~~period in ~~2009. The increase was~~2010 primarily ~~driven by~~due to the expansion of consumer and business FiOS services ~~(Voice,~~(voice, Internet and TV), which are typically sold in bundles, partially offset by the decline of local exchange revenues principally as a result of an 8.5% decline in switched access lines as of September 30, 2010 compared to September 30, 2009, primarily as a result of competition and technology substitution. The majority of the decrease was sustained in the residential retail market, which experienced a 9.6% access line loss primarily due to substituting traditional landline services with wireless, VoIP, broadband and cable services. Also contributing to the decrease was a decline of nearly 4.6% in small business retail access lines, primarily reflecting economic conditions, competition and a shift to both IP and high-speed circuits.

. As we continue to expand the number of premises eligible to order FiOS services and extend our sales and marketing efforts to attract new FiOS subscribers, we have continued to grow our subscriber base and consistently improved penetration rates within our FiOS service areas. Our ~~bundled~~ pricing strategy allows us to provide competitive offerings to our customers and potential customers. Consequently, we added 61,000 net new broadband connections, including 226,000 net new FiOS Internet subscribers, during the three months ended September 30, 2010. During the nine months ended September 30, 2010, we added 180,000 net new broadband connections, including 599,000 net new FiOS Internet subscribers, for a total of 8.3 million broadband connections, or 2.7% growth, at September 30, 2010. FiOS Internet subscribers have reached 3.9 million customers, representing a 23.9% increase compared to September 30, 2009. In addition, we added 204,000 net new FiOS TV subscribers during the three months ended September 30, 2010 and 540,000 FiOS TV subscribers during the nine months ended September 30, 2010 for a total of 3.3 million subscribers at September 30, 2010. As of ~~September 30, 2010,~~March 31, 2011, we achieved penetration rates of ~~31.0%~~33.1% and ~~27.2%~~29.1% for FiOS Internet and FiOS TV, respectively, compared to penetration rates of ~~28.7%~~29.0% and ~~25.1%~~25.4% for FiOS Internet and FiOS TV, respectively, at ~~September 30, 2009.~~March 31, 2010. Partially offsetting the increase was the decline of local exchange revenues, primarily due to an 8.2% decline in total voice connections resulting primarily from competition and technology substitution. Total voice connections include traditional switched access lines in service as well as FiOS digital voice connections. The majority of the decrease was sustained in the residential retail market, which experienced an 8.6% voice connection loss primarily due to substituting traditional landline services with wireless, VoIP, broadband and cable services. Also contributing to the decrease was a decline in small business retail voice connections, primarily reflecting economic conditions, competition and a shift to both IP and high-speed circuits.

Global Enterprise offers voice, data and Internet communications services to medium and large business customers, multi-national corporations, and state and federal government customers. In addition to traditional voice and data services, Global Enterprise offers managed and advanced products and solutions including IP services, cloud services and value-added solutions that make communications more secure, reliable and efficient. Global Enterprise also provides managed network services for customers that outsource all or portions of their communications and information processing operations and data services, such as private IP, private line, frame relay and asynchronous transfer mode (ATM) services, both domestically and internationally. In addition, Global Enterprise offers professional services in more than 30 countries supporting a range of solutions, including network service, managing a move to IP-based unified communications and providing application performance support.

Global Enterprise revenues ~~decreased~~increased during the three months ended March 31, 2011 compared to the similar period in 2010. Higher strategic services revenues were offset primarily by ~~$32 million,~~lower local services and traditional circuit-based revenues. Strategic services revenue increased $0.2 billion, or ~~0.8%~~12.8%, during the three months ended ~~September 30, 2010~~March 31, 2011 compared to the similar period in 2009 primarily due to lower local services and traditional circuit-based revenues, partially offset by higher customer premises equipment revenue. Global Enterprise revenues decreased $49 million, or 0.4%, during the nine months ended September 30, 2010 compared to the similar period in 2009 primarily due to lower long distance and traditional circuit-based data revenues. The decrease was partially offset by higher customer premises equipment and strategic networking revenue, which may indicate that companies are beginning to make additional capital

expenditures. The decline in long distance revenue is due to the negative effects of the continuing global economic conditions and competitive rate pressures. In addition to increased customer premise equipment revenues, strategic enterprise services revenue increased $108 million, or 6.9%, and $267 million, or 5.8%, during the three and nine months ended September 30, 2010, respectively, compared to the similar periods in 2009 primarily due to higher information technology, security solution and strategic networking revenues. Strategic ~~enterprise~~ services continues to be Global Enterprise’s fastest growing suite of offerings. Traditional circuit-based services such as frame relay, private line and ATM services declined compared to the similar period last year as our customer base continues its migration to next generation IP services. Additionally, long distance revenue declined due to the negative effects of the continuing global economic conditions and competitive rate pressures.

Global Wholesale revenues are primarily earned from long distance and other carriers ~~who~~that use our facilities to provide services to their customers. Switched access revenues are generated from fixed and usage-based charges paid by carriers for access to our local network, interexchange wholesale traffic sold in the ~~U.S.~~United States and internationally destined traffic that originates in the ~~U.S.~~United States. Special access revenues are generated from carriers that buy dedicated local exchange capacity to support their private networks. Wholesale services also include local wholesale revenues from unbundled network elements and interconnection revenues from competitive local exchange carriers and wireless carriers.

The decrease in Global Wholesale revenues ~~decreased by $235 million, or 10.2%,~~ during the three months ended ~~September 30, 2010 and $485 million, or 7.1%, during the nine months ended September 30, 2010~~March 31, 2011 compared to the similar ~~periods~~period in ~~2009~~2010 was primarily due to decreased MOUs in traditional voice products, primarily as a result of increases in voice termination pricing on certain international routes, which negatively impacted volume, and continued rate compression due to competition in the marketplace. Switched access and interexchange wholesale MOUs declined primarily as a result of wireless substitution and access line losses. Domestic wholesale ~~lines~~connections declined by ~~11.0%~~9.0% as of ~~September 30, 2010~~March 31, 2011 compared to ~~September 30, 2009~~March 31, 2010 due to the continued impact of competitors deemphasizing their local market initiatives coupled with the impact of technology substitution, as well as the continued level of economic pressure. Voice and local loop services declined during the three ~~and nine~~ months ended ~~September 30, 2010~~March 31, 2011 compared to the similar ~~periods~~period in ~~2009.~~2010. Continuing demand for high-capacity, high-speed digital services was partially offset by lower demand for older, low-speed data products and services. As of ~~September 30, 2010,~~March 31, 2011, customer demand, as measured in DS1 and DS3 circuits, for high-capacity and high-speed digital data services increased ~~3.8%~~3.4% compared to the similar period in ~~2009.~~2010.

Other revenues include such services as local exchange and long distance services from former MCI mass market customers, operator services, pay phone, card services and supply sales. ~~Revenues~~The decrease in revenues from other services ~~decreased $140 million, or 39.4%~~ during the three months ended ~~September 30, 2010 and $501 million, or 42.4% during the nine months ended September 30, 2010~~March 31, 2011 compared to the similar ~~periods~~period in ~~2009~~2010 was primarily due to reduced business volumes, including former MCI mass market customer losses.


															Three Months Ended March 31,				Increase/(Decrease)
	Three Months Ended September 30,							Nine Months Ended September 30,
(dollars in millions)	2010		2009		% Change			2010		2009		% Change			2011		2010		2011 vs. 2010
Cost of services and sales	$	5,803	$	5,978		(2.9	)	$	17,457	$	17,347		0.6		$	5,462	$	5,741	$	(279	)	(4.9	)%
Selling, general and administrative expense		2,319		2,423		(4.3	)		7,176		7,527		(4.7	)		2,290		2,450		(160	)	(6.5	)
Depreciation and amortization expense		2,145		2,075		3.4			6,308		6,112		3.2			2,107		2,063		44		2.1

Total Operating Expenses	$	10,267	$	10,476		(2.0	)	$	30,941	$	30,986		(0.1	)	$	9,859	$	10,254	$	(395	)	(3.9	)

Cost of services and sales decreased ~~by $175 million, or 2.9%,~~ during the three months ended ~~September 30, 2010 and increased $110 million or 0.6%, during the nine months ended September 30, 2010~~March 31, 2011 compared to the similar ~~periods~~period in ~~2009. The~~2010 primarily due to lower access costs resulting in part from management actions to reduce exposure to unprofitable international wholesale routes and declines in overall wholesale long distance volumes. Also contributing to the decrease ~~for~~was lower pension and other postretirement benefit expense. FiOS TV and Internet cost of acquisition per gross addition decreased during the three months ended ~~September 30, 2010 was due~~March 31, 2011 compared to ~~lower costs associated with compensation and installation expenses as a result of lower headcount and productivity improvements, as well as lower access costs driven by~~the similar period in 2010. These declines ~~in long distance volumes. The decrease was~~were partially offset by higher FiOS customer premise equipment costs and content costs associated with continued FiOS subscriber growth and higher strategic networking expenses. The increase for the nine months ended September 30, 2010 was due to higher strategic networking expense, customer premise equipment costs and content costs. This was partially offset by lower headcount, productivity improvements and lower access costs driven by declines in long distance volumes.growth.

Selling, general and administrative expense decreased ~~by $104 million, or 4.3%,~~ during the three months ended ~~September 30, 2010 and $351 million, or 4.7%, during the nine months ended September 30, 2010 compared to the similar periods in 2009. The decrease was~~March 31, 2011 primarily due to the decline in pension and other postretirement benefits and compensation ~~expense as a result of lower headcount and cost reduction initiatives. The decrease for the nine months ended September 30, 2010 was partially offset by higher gains on sales of assets in 2009.~~expense.

Depreciation and amortization expense increased ~~by $70 million, or 3.4%,~~ during the three months ended ~~September 30, 2010 and $196 million, or 3.2% during the nine months ended September 30, 2010~~March 31, 2011 compared to the similar ~~periods~~period in ~~2009. The increase was primarily driven by a higher~~2010 resulting from growth in depreciable ~~asset base.~~


																			Three Months Ended March 31,						Increase/(Decrease)
	Three Months Ended September 30,									Nine Months Ended September 30,
(dollars in millions)	2010			2009			% Change			2010			2009			% Change			2011			2010			2011 vs. 2010
Segment Operating Income (Loss)	$	19		$	191			(90.1	)	$	(3	)	$	884			nm
Segment Operating Income																			$	288		$	121		$	167	nm
Add Depreciation and amortization expense		2,145			2,075			3.4			6,308			6,112			3.2			2,107			2,063			44	2.1	%

Segment EBITDA	$	2,164		$	2,266			(4.5	)	$	6,305		$	6,996			(9.9	)	$	2,395		$	2,184		$	211	9.7


Segment operating income margin		0.2	%		1.8	%					nm			2.8	%					2.8	%		1.2	%
Segment EBITDA margin		21.0	%		21.2	%					20.4	%		22.0	%					23.6	%		21.1	%

The ~~decreases~~increases in Wireline’s Operating income and Segment EBITDA during the three ~~and nine~~ months ended ~~September 30, 2010~~March 31, 2011 compared to the similar ~~periods~~period in ~~2009~~2010 were primarily a result of the ~~impact of~~ factors described in connection with operating ~~revenue~~revenues and operating expenses above.

Non-recurring or non-operational items excluded from Wireline’s Operating income were as follows:

During the three ~~and nine~~ months ended ~~September 30,~~March 31, 2010, we recorded merger integration charges of ~~$159 million and $451 million, respectively,~~$0.1 billion related to the Alltel ~~acquisition. These charges~~Corporation (Alltel) acquisition, primarily ~~related to handset conversions,~~for trade name amortization and the decommissioning of overlapping cell sites.

Under the Health Care Act, beginning in 2013, Verizon and other companies that receive a subsidy under Medicare Part D to provide retiree prescription drug coverage will no longer receive a federal income tax deduction for the expenses incurred in connection with providing the subsidized coverage to the extent of the subsidy received. Because future anticipated retiree prescription drug plan liabilities and related subsidies are already reflected in Verizon’s financial statements, this change required ~~Verizon~~us to reduce the value of the related tax benefits recognized in its financial statements in the period during which the Health Care Act was enacted. As a result, ~~Verizon~~we recorded a one-time, non-cash income tax charge of ~~$962 million~~$1.0 billion in the first quarter of 2010 to reflect the impact of this change.

During the three ~~and nine~~ months ended ~~September 30,~~March 31, 2010, we recorded pre-tax charges of ~~$123 million and $463 million, respectively,~~$0.1 billion, primarily for costs incurred related to network, non-network software and other activities to enable the divested markets in the transaction with Frontier to operate on a stand-alone basis subsequent to the closing of the ~~transaction. Also included in these charges are fees related to early extinguishment of debt, as well as professional advisory~~transaction, and ~~legal fees incurred in connection with the Frontier transaction.~~

During the nine months ended September 30, 2010, we recorded a tax charge of approximately $192 million for the taxable gain on the excess of book over tax basis of the goodwill associated with the Alltel Divestiture Markets.

During the ~~second~~first quarter of 2010, we recorded a ~~one-time~~ non-cash adjustment of ~~$268~~$33 million primarily to ~~reduce~~adjust wireless data revenues. This adjustment was recorded to properly defer previously recognized wireless data revenues that will be earned and recognized in future periods. As no such adjustment would have been material to our consolidated financial statements in the current or any previous reporting period, the adjustment was recorded during the second quarter, which reduced Net income (loss) attributable to Verizon by $92 million.


	Nine Months Ended September 30,								Three Months Ending March 31,
(dollars in millions)	2010			2009			Change		2011			2010			Change
Cash Flows Provided By (Used In)
Operating activities	$	25,213		$	23,118		$	2,095	$	5,035		$	7,084		$	(2,049	)
Investing activities		(10,159	)		(17,948	)		7,789		(4,375	)		(3,623	)		(752	)
Financing activities		(11,669	)		(13,736	)		2,067		6,679			(2,433	)		9,112

Increase (Decrease) In Cash and Cash Equivalents	$	3,385		$	(8,566	)	$	11,951
Increase In Cash and Cash Equivalents									$	7,339		$	1,028		$	6,311

We use the net cash generated from our operations to fund network expansion and modernization, repay external financing, pay dividends, repurchase Verizon common stock from time to time and invest in new businesses. While our current liabilities typically exceed current assets, our sources of funds, primarily from operations and, to the extent necessary, from external financing arrangements, are sufficient to meet ongoing operating and investing requirements. We expect that our capital spending requirements will continue to be financed primarily through internally generated funds. Debt or equity financing may be needed to fund additional development activities or to maintain our capital structure to ensure our financial flexibility.

We manage our capital structure to balance our cost of capital and the need for financial flexibility. ~~The mix of debt and equity is intended to allow us to maintain ratings in the “A” category from the primary rating agencies.~~ We believe that we will continue to have the necessary access to capital markets.

Our available external financing arrangements include the issuance of commercial paper, credit available under credit facilities and other bank lines of credit, vendor financing arrangements, issuances of registered debt or equity securities and privately-placed capital market securities. We currently have a shelf registration available for the issuance of up to ~~$4.0~~$7.75 billion of additional unsecured debt or equity securities. We may also issue short-term debt through an active commercial paper program and have a $6.2 billion credit facility to support such commercial paper issuances.

Our primary source of funds continues to be cash generated from operations. Net cash provided by operating activities during the ~~nine~~three months ended ~~September 30, 2010 increased~~March 31, 2011 decreased by ~~$2.1~~$2.0 billion compared to the similar period in ~~2009~~2010 primarily due to higher vendor payments related to wireless customer acquisition and retention costs and pension plan contributions. In addition, net cash provided by operating activities during the three months ended March 31, 2010 included cash flows ~~at Domestic Wireless, changes in working capital related in part to management of inventory~~from divested operations (see “Acquisitions and ~~the timing of tax payments. Partially offsetting these increases were lower operating cash flows at Wireline.~~Divestitures”).

~~During the nine months ended September 30, 2010 and 2009, we received net distributions from Vodafone Omnitel of $0.4 billion.~~

Capital expenditures continue to be our primary use of capital resources as they facilitate the introduction of new products and services, enhance responsiveness to competitive challenges and increase the operating efficiency and productivity of our networks. We are directing our capital spending primarily toward higher growth markets.


	Nine Months Ended September 30,						Three Months Ending March 31,
(dollars in millions)	2010			2009			2011			2010
Domestic Wireless	$	6,205		$	5,134		$	2,735		$	1,770
Wireline		5,098			6,614			1,465			1,566
Other		540			702			163			87

	$	11,843		$	12,450		$	4,363		$	3,423

Total as a percentage of revenue		14.8	%		15.4	%		16.2	%		12.7	%

The increase in capital expenditures at Domestic Wireless during the ~~nine~~three months ended ~~September 30, 2010~~March 31, 2011 compared to the similar period in ~~2009~~2010 was primarily due to increased investment in the capacity of our wireless ~~Evolution-Data Optimized~~EV-DO networks and funding the build-out of our ~~fourth generation~~fourth-generation network based on ~~Long-Term Evolution~~LTE technology. The decrease in capital

expenditures at Wireline during the ~~nine~~three months ended ~~September 30, 2010~~March 31, 2011 compared to the similar period in ~~2009~~2010 was primarily due to ~~lower~~ capital expenditures in 2010 related to ~~FiOS~~the local exchange business and ~~legacy spending requirements.~~related landline activities that were spun-off to Frontier. We expect ~~2010~~2011 consolidated capital expenditures to be ~~at the low end or slightly below the targeted range~~similar to last year’s spending of ~~$16.8 billion to $17.2~~$16.5 billion.

During the nine months ended September 30, 2010, we received cash proceeds of $2.6 billion in connection with the required divestitures of overlapping properties as a result of the acquisition of Alltel (see “Recent Developments”).

~~On January 9, 2009, Verizon Wireless paid approximately $5.9 billion for the equity of Alltel, which was partially offset by $1.0 billion of cash acquired at closing.~~

During the ~~nine~~three months ended ~~September 30,~~March 31, 2011 and 2010, ~~and 2009,~~ net cash ~~used in~~provided by (used in) financing activities was ~~$11.7~~$6.7 billion and ~~$13.7~~($2.4 billion), respectively.

During March 2011, Verizon issued $6.25 billion ~~respectively. During~~aggregate principal amount of fixed and floating rate notes resulting in cash proceeds of approximately $6.19 billion, net of discounts and issuance costs. The net proceeds will be used for the ~~nine months ended September 30, 2010,~~repayment of commercial paper, the retirement of certain outstanding notes issued by our telephone operating company subsidiaries and other general corporate purposes. The issuances consisted of the following: $1.0 billion Notes due 2014 that bear interest at a rate equal to three-month London Interbank Offered Rate (LIBOR) plus 0.61%, $1.5 billion 1.95% Notes due 2014, $1.25 billion 3.00% Notes due 2016, $1.5 billion 4.60% Notes due 2021 and $1.0 billion 6.00% Notes due 2041. In addition, during 2011, $0.5 billion of 5.35% Verizon Communications Notes matured and were repaid and we utilized $0.3 billion of ~~6.125% Verizon New York Inc. debentures, $0.2~~a fixed rate vendor financing facility.

During April 2011, we redeemed $1.0 billion of ~~6.375%~~5.65% Verizon ~~North~~Pennsylvania Inc. ~~debentures and $0.2 billion of 6.30% Verizon Northwest Inc. debentures matured and were repaid. In addition, during the nine months ended September 30, 2010, we paid $4.0 billion in dividends.~~

During July 2010, Verizon received approximately $3.1 billion in connection with the completion of the spin-off and merger of Spinco (see “Recent Developments”). This special cash payment was subsequently used to redeem $2.0 billion of 7.25% Verizon Communications notesDebentures due ~~December 2010~~November 15, 2011 at a redemption price of ~~102.7%~~102.9% of the principal amount of the ~~notes,~~debentures, plus accrued and unpaid interest through the date of redemption ~~as well as other short-term borrowings.~~

~~On June 28, 2010, Verizon Wireless exercised its right to redeem the outstanding~~and $1.0 billion of ~~aggregate floating rate notes~~6.50% Verizon New England Inc. Debentures due ~~June~~September 15, 2011 at a redemption price of ~~100%~~102.3 % of the principal amount of the ~~notes,~~debentures, plus accrued and unpaid interest through the date of redemption. ~~In addition, during~~The redemption of these debentures resulted in a net loss that was not significant. We also terminated the ~~nine months ended September 30, 2010, Verizon Wireless repaid $4.0 billion of borrowings that were outstanding under~~related interest rate swaps with a ~~three-year term loan facility. No borrowings remain outstanding under this facility as of September 30, 2010 and this facility has been cancelled.~~

On April 15, 2011, we amended this facility primarily to reduce fees and borrowing costs and extend the maturity date to October 15, 2014. The credit facility does not require us to comply with financial covenants or maintain specified credit ratings, and it permits us to borrow even if our business has incurred a material adverse change. We use the credit facility to support the issuance of commercial paper, for the issuance of letters of credit and for general corporate purposes.

We have a shelf registration available for the issuance of up to ~~$4.0~~$7.75 billion of additional unsecured debt or equity securities.

Verizon’s ratio of debt to debt combined with Verizon’s equity was ~~58.4%~~61.1% at ~~September 30, 2010~~March 31, 2011 compared to ~~59.9%~~57.8% at December 31, ~~2009.~~

As in prior periods, dividend payments were a significant use of capital resources. The Board of Directors of Verizon determines the appropriateness of the level of our dividend payments on a periodic basis by considering such factors as long-term growth opportunities, internal cash requirements and the expectations of our shareowners. During the third quarter of 2010, the Board increased our quarterly dividend payment 2.6% to $.4875 per share from $.475 per share in the same period of 2009.2010.

~~In August 2010, Standard & Poor’s placed the ratings~~The debt securities of Verizon Communications and its subsidiaries ~~on CreditWatch with negative implications, including its ‘A’ long-term rating and ‘A-1’ short-term rating. There were no other changes~~continue to ~~the outlooks or credit~~be accorded high ratings ~~of Verizon Communications and/or Cellco Partnership discussed in Part II, Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations, “Cash Flows Provided~~ by ~~(Used in) Financing Activities” in our Annual Report on Form 10-K for~~ the ~~year ended December 31, 2009. The~~ three primary rating ~~agencies have identified factors which they believe could result in~~agencies.

Although a one-level ratings downgrade for Verizon Communications and/or Cellco Partnership in the future including sustained leverage levels at Verizon Communications and/or Cellco Partnership resulting from: (i) diminished wireless operating performance as a result of a weakening economy and competitive pressures; (ii) failurewould not be expected to achieve significant synergies in the Alltel integration; (iii) accelerated wireline losses; (iv) the absence of material improvement in the status of underfunded pensions and other post employment benefits; or (v) an acquisition or sale of operations that causes a material deterioration in its credit metrics. A ratings downgrade maysignificantly impact our access to capital, it could increase both the cost of refinancing existing debt and ~~constrain Verizon Communications’ access to certain short-term debt markets.~~the cost of financing any new capital requirements. Securities ratings assigned by rating organizations are expressions of opinion and are not recommendations to buy, sell, or hold securities. A securities rating is subject to revision or withdrawal at any time by the assigning rating organization. Each rating should be evaluated independently of any other rating.

Our credit agreements contain covenants that are typical for large, investment grade companies. These covenants include requirements to pay interest and principal in a timely fashion, to pay taxes, to maintain insurance with responsible and reputable insurance companies, to preserve our corporate existence, to keep appropriate books and records of financial transactions, to maintain our properties, to provide financial and other reports to our lenders, to limit pledging and disposition of assets and mergers and consolidations, and other similar covenants.

We and our consolidated subsidiaries are in compliance with all ~~of our~~ debt covenants.

Our Cash and cash equivalents at ~~September 30, 2010~~March 31, 2011 totaled ~~$5.4~~$14.0 billion, a ~~$3.4~~$7.3 billion increase compared to Cash and cash equivalents at December 31, ~~2009~~2010 for the reasons discussed above.

Free cash flow is a non-GAAP financial measure that management believes is useful to investors and other users of Verizon’s financial information in evaluating cash available to pay debt and dividends. Free cash flow is calculated by subtracting capital expenditures from net cash provided by operating activities. The following table reconciles net cash provided by operating activities to ~~free~~Free cash flow:


	Nine Months Ended September 30,							Three Months Ending March 31,
(dollars in millions)	2010		2009		Change			2011		2010		Change
Net cash provided by operating activities	$	25,213	$	23,118	$	2,095		$	5,035	$	7,084	$	(2,049	)
Less Capital expenditures (including capitalized software)		11,843		12,450		(607	)		4,363		3,423		940

Free cash flow	$	13,370	$	10,668	$	2,702		$	672	$	3,661	$	(2,989	)

We are exposed to various types of market risk in the normal course of business, including the impact of interest rate changes, foreign currency exchange rate fluctuations, changes in investment, equity and commodity prices and changes in corporate tax rates. We employ risk management strategies, which may include the use of a variety of derivatives including cross currency swaps, foreign currency and prepaid forwards and collars, interest rate and commodity swap agreements and interest rate locks. We do not hold derivatives for trading purposes.

It is our general policy to enter into interest rate, foreign currency and other derivative transactions only to the extent necessary to achieve our desired objectives in limiting our exposure to various market risks. Our objectives include maintaining a mix of fixed and variable rate debt to lower borrowing costs within reasonable risk parameters and to protect against earnings and cash flow volatility resulting from changes in market conditions. We do not hedge our market risk exposure in a manner that would completely eliminate the effect of changes in interest rates and foreign exchange rates on our earnings. We do not expect that our net income, liquidity and cash flows will be materially affected by these risk management strategies.

The functional currency for our foreign operations is primarily the local currency. The translation of income statement and balance sheet amounts of our foreign operations into U.S. dollars are recorded as cumulative translation adjustments, which are included in Accumulated other comprehensive ~~loss~~income in our condensed consolidated balance sheets. Gains and losses on foreign currency transactions are recorded in the condensed consolidated statements of income in Other income and (expense), net. At ~~September 30, 2010,~~March 31, 2011, our primary ~~translation~~foreign currency exposure was to the British Pound Sterling, the Euro and the Australian Dollar.

We are exposed to changes in interest rates, primarily on our short-term debt and the portion of long-term debt that carries floating interest rates. As of ~~September 30, 2010,~~March 31, 2011, more than two-thirds in aggregate principal amount of our total debt portfolio consisted of fixed rate indebtedness, including the effect of interest rate swap agreements designated as hedges. The impact of a 100 basis point change in interest rates affecting our floating rate debt would result in a change in annual interest expense, including our interest rate swap agreements that are designated as hedges, of approximately ~~$74 million.~~$0.1 billion. The interest rates on our existing long-term debt obligations are unaffected by changes to our credit ratings.

In order to manage our exposure to future interest rate changes, beginning in late September 2010 through October 25, 2010, we entered into forward interest rate swaps with a total notional value of $1,250 million. We have designated these contracts as cash flow hedges.

Verizon Wireless has entered into cross currency swaps designated as cash flow hedges to exchange approximately $2.4 billion of British Pound Sterling and ~~Euro denominated~~Euro-denominated debt into U.S. dollars and to fix our future interest and principal payments in U.S. dollars, as well as mitigate the impact of foreign currency transaction gains or losses. The fair value of these swaps, primarily included in Other assets, was approximately ~~$139 million~~$0.2 billion and ~~$315 million~~$0.1 billion at ~~September 30, 2010~~March 31, 2011 and December 31, ~~2009,~~2010, respectively. During the three ~~and nine~~ months ended ~~September 30,~~March 31, 2011 and 2010, a pretax gain of ~~$207 million~~$0.1 billion and a pretax loss of ~~$176 million,~~$0.1 billion, respectively, ~~was~~were recognized in Other comprehensive income, ~~a portion of~~ which was reclassified to Other income and (expense), net to offset the related pretax foreign currency transaction gain or loss on the underlying debt obligations.

On July 1, 2010, after receiving regulatory approval, we completed the spin-off of the shares of ~~Spinco~~a newly formed subsidiary of Verizon (Spinco) to Verizon stockholders and the merger of Spinco with Frontier ~~resulting in Verizon stockholders collectively owning approximately 68 percent of Frontier’s equity which was outstanding immediately following~~Communications Corporation (Frontier). The accompanying unaudited condensed consolidated financial statements for the merger. Frontier issued approximately 678.5 million shares of Frontier common stock in the aggregate to Verizon stockholders in the merger, and Verizon stockholders received one share of Frontier common stock for every 4.165977 shares of Verizon common stock they owned as of June 7, 2010. Verizon stockholders received cash in lieu of any fraction of a share of Frontier common stock to which they otherwise were entitled.

At the time of the spin-off and the merger, Spinco held defined assets and liabilities of the local exchange business and related landline activities of Verizon in Arizona, Idaho, Illinois, Indiana, Michigan, Nevada, North Carolina, Ohio, Oregon, South Carolina, Washington, West Virginia and Wisconsin, and in portions of California bordering Arizona, Nevada and Oregon, including Internet access and long distance services and broadband video provided to designated customers in those areas. The transactions did not involve any assets or liabilities of Verizon Wireless. The merger resulted in Frontier acquiring approximately 4 million access lines and certain related businesses from Verizon, which collectively generated revenues of approximately $4 billion for Verizon’s Wireline segment during 2009, and approximately $1.7 billion of revenue for Verizon’s Wireline segment during the sixthree months ended ~~June 30, 2010.~~

~~On April 12,~~March 31, 2010 ~~Spinco completed a financing of $3.2 billion in principal amount of notes. The gross proceeds of the offering were deposited into an escrow account. Immediately~~include these operations prior to the ~~spin-off on July 1, 2010,~~completion of the ~~funds in the escrow account representing the net cash proceeds from the offering were released to Verizon.~~spin-off.

As a condition of the regulatory approvals by the ~~DOJ~~Department of Justice and the ~~FCC~~Federal Communications Commission to complete the acquisition of Alltel in January 2009, Verizon Wireless was required to divest overlapping properties in 105 operating markets in 24 states. Total assets and total liabilities divested were $2.6 billion and $0.1 billion, respectively, principally comprised of network assets, wireless licenses and customer relationships that were included in Prepaid expenses and other current assets and Other current liabilities, respectively, on the condensed consolidated balance sheet at December 31, 2009.

states (Alltel Divestiture Markets). On May 8, 2009, Verizon Wireless entered into a definitive agreement with AT&T Mobility, pursuant to which AT&T Mobility agreed to acquire 79 of the 105 Alltel Divestiture Markets, including licenses and network assets, for approximately $2.4 billion in cash. On June 9, 2009, Verizon Wireless entered into a definitive agreement with ~~ATN,~~Atlantic Tele-Network, Inc. (ATN), pursuant to which ATN agreed to acquire the remaining 26 Alltel Divestiture Markets, including licenses and network assets, for ~~$200 million~~$0.2 billion in cash. During the second quarter of 2010, Verizon Wireless ~~received the necessary regulatory approvals and~~ completed both transactions.

On August 23, 2010, Verizon Wireless acquired the net assets and related customers of six operating markets in Louisiana and Mississippi in a transaction with AT&T Inc. for cash consideration of $0.2 billion. These assets were acquired to enhance Verizon Wireless’ network coverage in these operating markets. The purchase price allocation primarily resulted in $0.1 billion of wireless licenses and $0.1 billion in goodwill.

On August 23, 2010, Verizon Wireless acquired the net assets and related customers of six operating markets in Louisiana and Mississippi in a transaction with AT&T Inc. for cash consideration of $235 million. These assets were acquired to enhance Verizon Wireless’ network coverage in these operating markets. The preliminary purchase price allocation primarily resulted in $106 million of wireless licenses and $76 million in goodwill.

There have been no material changes to Regulatory and Competitive Trends as previously disclosed in Part I,II. Item ~~1. “Business”~~7. “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in our Annual Report on Form 10-K for the year ended December 31, ~~2009 and in Part I. Item 2. “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in our Quarterly Report on Form 10-Q for the quarter ended June 30,~~ 2010.

In September 2009, the accounting standard update regarding revenue recognition for multiple deliverable arrangements was issued. This update requires the use of the relative selling price method when allocating revenue in these types of arrangements. This method allows a vendor to use its best estimate of selling price if neither vendor specific objective evidence nor third party evidence of selling price exists when evaluating multiple deliverable arrangements. This standard update is effective January 1, 2011 and may be adopted prospectively for revenue arrangements entered into or materially modified after the date of adoption or retrospectively for all revenue arrangements for all periods presented. We are currently evaluating the impact that this standard update will have on our consolidated financial statements.

In September 2009, the accounting standard update regarding revenue recognition for arrangements that include software elements was issued. This update requires tangible products that contain software and non-software elements that work together to deliver the products’ essential functionality to be evaluated under the accounting standard regarding multiple deliverable arrangements. This standard update is effective January 1, 2011 and may be adopted prospectively for revenue arrangements entered into or materially modified after the date of adoption or retrospectively for all revenue arrangements for all periods presented. We are currently evaluating the impact that this standard update will have on our consolidated financial statements.

In this ~~Quarterly~~ Report ~~on Form 10-Q~~ we have made forward-looking statements. These statements are based on our estimates and assumptions and are subject to risks and uncertainties. Forward-looking statements include the information concerning our possible or assumed future results of operations. Forward-looking statements also include those preceded or followed by the words “anticipates,” “believes,” “estimates,” “hopes” or similar expressions. 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, along with those discussed elsewhere in this ~~Quarterly~~ Report and those disclosed in Part 1, Item 1A. “Risk Factors” in our Annual Report on Form 10-K for the year ended December ~~31, 2009, and in our Quarterly Report on Form 10-Q for the quarter ended March~~ 31, 2010, could affect future results and could cause those results to differ materially from those expressed in the forward-looking statements:

Information relating to market risk is included in Item 2, Management’s Discussion and Analysis of Financial Condition and Results of Operations under the caption “Market Risk.”

Our chief executive officer and chief financial officer have evaluated the effectiveness of the registrant’s disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) of the Securities Exchange Act of 1934), as of the end of the period covered by this quarterly report. Based on this evaluation, our chief executive officer and chief financial officer have concluded that the registrant’s disclosure controls and procedures were effective as of ~~September 30, 2010.~~March 31, 2011.

There were no changes in the registrant’s internal control over financial reporting during the ~~third~~first quarter of ~~2010~~2011 that have materially affected, or are reasonably likely to materially affect, the registrant’s internal control over financial reporting.

Verizon Communications Inc. (Verizon), and a number of other telecommunications companies, have been the subject of multiple class action suits concerning its alleged participation in intelligence-gathering activities allegedly carried out by the federal government, at the direction of the President of the United States, as part of the government’s post-September 11 program to prevent terrorist attacks. Plaintiffs generally allege that Verizon has participated by permitting the government to gain access to the content of its subscribers’ telephone calls and/or records concerning those calls and that such action violates federal and/or state constitutional and statutory law. Relief sought in the cases includes injunctive relief, attorneys’ fees, and statutory and punitive damages. On August 9, 2006, the Judicial Panel on Multidistrict Litigation (Panel) ordered that these actions be transferred, consolidated and coordinated in the U.S. District Court for the Northern District of California. The Panel subsequently ordered that a number of “tag along” actions also be transferred to the Northern District of California. Verizon believes that these lawsuits are without merit. On July 10, 2008, the President signed into law the FISA Amendments Act of 2008, which provides for dismissal of these suits by the court based on submission by the Attorney General of the United States of a specified certification. On September 19, 2008, the Attorney General made such a submission in the consolidated proceedings. Based on this submission, the court ordered dismissal of the complaints on June 3, 2009. Plaintiffs have appealed this dismissal, and the appeal remains pending in the United States Court of Appeals for the Ninth Circuit.

On September 15, 2010, the U.S. Bank National Association (U.S. Bank), as Litigation Trustee for the Idearc, Inc. Litigation Trust (Litigation Trust), filed suit in U.S. District Court for the Northern District of Texas against Verizon and certain subsidiaries challenging the November 2006 spin-off of Verizon’s former directories business then known as Idearc Inc. U.S. Bank, which represents a group of creditors who filed claims in the Idearc, Inc. bankruptcy proceedings, alleges that Idearc Inc. was insolvent at the time of the spin-off or became insolvent shortly thereafter. The Litigation Trust seeks over $9 billion in damages.

There have been no material changes to our risk factors as previously disclosed in Part I, Item 1A. of our Annual Report on Form 10-K for the year ended December 31, ~~2009 and in our Quarterly Report on Form 10-Q for the quarter ended March 31,~~ 2010.

Verizon did not repurchase any shares of Verizon common stock during the three months ended ~~September 30, 2010.~~March 31, 2011. At ~~September 30, 2010,~~March 31, 2011, the maximum number of shares that ~~may~~could be purchased by ~~Verizon~~ or ~~any “affiliated purchaser”~~on behalf of Verizon ~~as defined by Rule 10b-18(a)(3) under the Exchange Act,~~ under our share buyback program was ~~60,015,938.~~100 million.

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.


		(Mark one)
		x		QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
				OF THE SECURITIES EXCHANGE ACT OF 1934
				For the quarterly period ended ~~September 30, 2010~~March 31, 2011
				OR
		¨		TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
				OF THE SECURITIES EXCHANGE ACT OF 1934

				For the transition period from to


140 West Street New York, New York		10007
(Address of principal executive offices)		(Zip Code)


		Page
PART I - FINANCIAL INFORMATION

Item 1.	Financial Statements (Unaudited)

	Condensed Consolidated Statements of Income Three ~~and nine~~ months ended ~~September 30,~~March 31, 2011 and 2010 ~~and 2009~~		2

	Condensed Consolidated Balance Sheets At ~~September 30, 2010~~March 31, 2011 and December 31, ~~2009~~2010		3

	Condensed Consolidated Statements of Cash Flows ~~Nine~~Three months ended ~~September 30,~~March 31, 2011 and 2010 ~~and 2009~~		4

	Notes to Condensed Consolidated Financial Statements		5

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations		2019

Item 3.	Quantitative and Qualitative Disclosures About Market Risk		4139

Item 4.	Controls and Procedures		4139

PART II - OTHER INFORMATION

Item 1.	Legal Proceedings		4139

Item 1A.	Risk Factors		4139

Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds		4139

Item 6.	Exhibits		4240

Signature			4341

Certifications


~~(dollars in millions)~~
~~Balance at January 1, 2010~~	$	~~72,067~~
~~Wireless licenses acquired (Note 2)~~		~~106~~
~~Capitalized interest on wireless licenses~~		~~538~~
~~Reclassifications, adjustments and other~~		8

~~Balance at September 30, 2010~~	$	~~72,719~~


(dollars in millions)	Domestic Wireless		Wireline			Total
Balance at January 1, 2010	$	17,738	$	4,734		$	22,472
Acquisitions (Note 2)		76		–			76
Divestitures (Note 2)		–		(614	)		(614	)
Reclassifications, adjustments and other		–		(1	)		(1	)

Balance at September 30, 2010	$	17,814	$	4,119		$	21,933


(dollars in millions)	Pension						Health Care and Life

Three Months Ended September 30,	2010			2009			2010			2009

Service cost	$	86		$	96		$	75		$	78
Interest cost		447			481			406			441
Expected return on plan assets		(642	)		(734	)		(75	)		(76	)
Amortization of prior service cost		26			28			94			101
Actuarial loss, net		57			28			44			60

Net periodic benefit (income) cost		(26	)		(101	)		544			604
Settlement loss		873			610			–			–

Total	$	847		$	509		$	544		$	604


(dollars in millions)	Pension						Health Care and Life

Nine Months Ended September 30,	2010			2009			2010			2009

Service cost	$	268		$	288		$	231		$	234
Interest cost		1,353			1,443			1,230			1,324
Expected return on plan assets		(1,948	)		(2,203	)		(227	)		(227	)
Amortization of prior service cost		82			84			282			301
Actuarial loss, net		177			84			132			179

Net periodic benefit (income) cost		(68	)		(304	)		1,648			1,811
Termination benefits		681			–			–			–
Settlement loss		1,089			1,026			–			–
Curtailment loss and other, net		173			–			386			–

Subtotal		1,943			1,026			386			–

Total	$	1,875		$	722		$	2,034		$	1,811


Segment		Description
Domestic Wireless		Domestic ~~Wireless’~~Wireless provides communications products and services which include wireless voice and data services and equipment sales ~~across~~to consumer, business and government customers in the ~~U.S.~~United States.

Wireline		Wireline’s communications products and services include voice, Internet access, broadband video and data, ~~next generation~~ Internet protocol network services, network access, long distance and other services. We provide these products and services to consumers in the ~~U.S.,~~United States, as well as to carriers, businesses and government customers both in the ~~U.S.~~United States and in over 150 other countries around the world.


	Three Months Ended September 30,									Nine Months Ended September 30,
(dollars in millions, except ARPU)	2010			2009			% Change			2010			2009			% Change
Service revenue	$	14,168		$	13,149			7.7		$	41,436		$	38,863			6.6
Equipment and other		2,082			2,182			(4.6	)		5,823			6,187			(5.9	)

Total Operating Revenue	$	16,250		$	15,331			6.0		$	47,259		$	45,050			4.9

Total customers (‘000)											93,170			86,990			7.1
Retail customers (‘000)											86,734			84,268			2.9

Total customer net additions in period (excluding acquisitions and adjustments)(‘000)		997			1,185			(15.9	)		3,884			3,495			11.1
Retail customer net additions in period (excluding acquisitions and adjustments)(‘000)		447			916			(51.2	)		1,174			3,212			(63.4	)

Total churn rate		1.36	%		1.46	%		(6.8	)		1.32	%		1.42	%		(7.0	)
Retail postpaid churn rate		1.07	%		1.12	%		(4.5	)		1.02	%		1.08	%		(5.6	)

Service ARPU	$	50.94		$	50.77			0.3		$	50.41		$	50.71			(0.6	)
Retail service ARPU		51.99			51.09			1.8			51.47			50.98			1.0
Total data ARPU		18.20			15.47			17.6			17.37			14.83			17.1


Exhibit Number		Description

10a		Verizon Communications Inc. Long-Term Incentive Plan-Performance Stock Unit Agreement 2011–13 Award Cycle.

10b		Verizon Communications Inc. Long-Term Incentive Plan-Restricted Stock Unit Agreement 2011–13 Award Cycle.

12		Computation of Ratio of Earnings to Fixed Charges.

31.1		Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

31.2		Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

32.1		Certification of Chief Executive Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

32.2		Certification of Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

101.INS		XBRL Instance Document.

101.SCH		XBRL Taxonomy Extension Schema Document.

101.PRE		XBRL Taxonomy Presentation Linkbase Document.

101.CAL		XBRL Taxonomy Calculation Linkbase Document.

101.LAB		XBRL Taxonomy Label Linkbase Document.

101.DEF		XBRL Taxonomy Extension Definition Linkbase Document.


	VERIZON COMMUNICATIONS INC.

Date: ~~October~~April 28, ~~2010~~ 2011	By	~~/s/~~/s/ Robert J. Barish
		Robert J. Barish
		Senior Vice President and Controller
		(Principal Accounting Officer)

Large accelerated filer

Accelerated filer

Non-accelerated filer

¨ (Do not check if a smaller reporting company)

Smaller reporting company