Verizon Communications (VZ) 8-K Regulation FD Disclosure

Exhibit 99

Certain unaudited historical financial and operating information contained in this document has been updated to reflect the reclassification of results associated with the sale of our local exchange business and related landline activities in California, Florida and Texas (Divested Businesses) and other insignificant businesses consisting of our vehicle original equipment manufacturer (“OEM”) and Networkfleet businesses (collectively, the “Reclassified Results”) from the Wireline segment operating results to Corporate and other.

The updated information is identified in this document in blue shading.

Verizon Communications Inc.

Table of Contents

Condensed Consolidated Statements of Income	3
Non-Operational & Other Items	5
Condensed Consolidated Balance Sheets	7
Verizon – Selected Financial and Operating Statistics	7
Condensed Consolidated Statements of Cash Flows	9
Wireless – Selected Financial Results	12
Wireless – Selected Operating Statistics	13
Wireline – Selected Financial Results	15
Wireline – Selected Operating Statistics	16
Non-GAAP Reconciliations and Notes	18

2

Verizon Communications Inc.

Condensed Consolidated Statements of Income

	(dollars in millions, except per share amounts)
Unaudited	2014			2015			1Q ‘16
Operating Revenues
Service revenue and other	$	116,122		$	114,696		$	28,217
Wireless equipment revenues		10,957			16,924			3,954
Total Operating Revenues		127,079			131,620			32,171
Operating Expenses
Cost of services		28,306			29,438			7,614
Wireless cost of equipment		21,625			23,119			4,998
Selling, general & administrative expense		41,016			29,986			7,600
Depreciation and amortization expense		16,533			16,017			4,017
Total Operating Expenses		107,480			98,560			24,229
Operating Income		19,599			33,060			7,942
Equity in earnings (losses) of unconsolidated businesses		1,780			(86	)		(20	)
Other income and (expense), net		(1,194	)		186			32
Interest expense		(4,915	)		(4,920	)		(1,188	)
Income Before Provision for Income Taxes		15,270			28,240			6,766
Provision for income taxes		(3,314	)		(9,865	)		(2,336	)
Net Income	$	11,956		$	18,375		$	4,430
Net income attributable to noncontrolling interests	$	2,331		$	496		$	120
Net income attributable to Verizon		9,625			17,879			4,310
Net Income	$	11,956		$	18,375		$	4,430
Basic Earnings per Common Share
Net income attributable to Verizon	$	2.42		$	4.38		$	1.06
Weighted average number of common shares (in millions)		3,974			4,085			4,080
Diluted Earnings per Common Share(1)
Net Income attributable to Verizon	$	2.42		$	4.37		$	1.06
Weighted average number of common shares-assuming dilution (in millions)		3,981			4,093			4,085

Notes:

(1) Diluted Earnings per Common Share includes the dilutive effect of shares issuable under our stock-based compensation plans, which represents the only potential dilution.

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Verizon Communications Inc.

Condensed Consolidated Statements of Income

													(dollars in millions, except per share amounts)
				2014									2015												2016
Unaudited	1Q			2Q			3Q			4Q			1Q			2Q			3Q			4Q			1Q
Operating Revenues
Service revenue and other	$	28,949		$	29,096		$	29,107		$	28,970		$	28,611		$	28,363		$	28,866		$	28,856		$	28,217
Wireless equipment revenues		1,869			2,387			2,479			4,222			3,373			3,861			4,292			5,398			3,954
Total Operating Revenues		30,818			31,483			31,586			33,192			31,984			32,224			33,158			34,254			32,171
Operating Expenses
Cost of services		7,090			7,094			7,046			7,076			6,988			6,994			7,589			7,867			7,614
Wireless cost of equipment		4,099			4,993			5,206			7,327			5,108			5,455			5,716			6,840			4,998
Selling, general & administrative expense		8,332			7,550			8,277			16,857			7,939			7,974			8,309			5,764			7,600
Depreciation and amortization expense		4,137			4,161			4,167			4,068			3,989			3,980			4,009			4,039			4,017
Total Operating Expenses		23,658			23,798			24,696			35,328			24,024			24,403			25,623			24,510			24,229
Operating Income (Loss)		7,160			7,685			6,890			(2,136	)		7,960			7,821			7,535			9,744			7,942
Equity in earnings (losses) of unconsolidated businesses		1,902			(43	)		(48	)		(31	)		(34	)		(18	)		(18	)		(16	)		(20	)
Other income and (expense), net		(894	)		66			71			(437	)		75			32			51			28			32
Interest expense		(1,214	)		(1,164	)		(1,255	)		(1,282	)		(1,332	)		(1,208	)		(1,202	)		(1,178	)		(1,188	)
Income (Loss) Before (Provision) Benefit for Income Taxes		6,954			6,544			5,658			(3,886	)		6,669			6,627			6,366			8,578			6,766
(Provision) Benefit for income taxes		(968	)		(2,220	)		(1,864	)		1,738			(2,331	)		(2,274	)		(2,195	)		(3,065	)		(2,336	)
Net Income (Loss)	$	5,986		$	4,324		$	3,794		$	(2,148	)	$	4,338		$	4,353		$	4,171		$	5,513		$	4,430
Net income attributable to noncontrolling interests	$	2,039		$	110		$	99		$	83		$	119		$	122		$	133		$	122		$	120
Net income (loss) attributable to Verizon		3,947			4,214			3,695			(2,231	)		4,219			4,231			4,038			5,391			4,310
Net Income (Loss)	$	5,986		$	4,324		$	3,794		$	(2,148	)	$	4,338		$	4,353		$	4,171		$	5,513		$	4,430
Basic Earnings (Loss) per Common Share
Net Income (loss) attributable to Verizon	$	1.15		$	1.02		$	.89		$	(.54	)	$	1.03		$	1.04		$	.99		$	1.32		$	1.06
Weighted average number of common shares (in millions)		3,425			4,147			4,152			4,157			4,116			4,079			4,072			4,076			4,080
Diluted Earnings (Loss) per Common Share (1)
Net Income (loss) attributable to Verizon	$	1.15		$	1.01		$	.89		$	(.54	)	$	1.02		$	1.04		$	.99		$	1.32		$	1.06
Weighted average number of common shares-assuming dilution (in millions)		3,430			4,153			4,159			4,157			4,121			4,085			4,078			4,083			4,085

Notes:

(1) If there is a net loss, diluted EPS is the same as basic EPS. Diluted Earnings per Common Share includes the dilutive effect of shares issuable under our stock-based compensation plans, which represents the only potential dilution.

EPS may not add due to rounding.

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Verizon Communications Inc.

Non-Operational & Other Items

				(Pre-tax dollars in millions)
Unaudited	2014			2015			1Q ‘16
Severance, Pension & Benefit Charges/(Credits)
Operating expenses	$	7,507		$	(2,256	)	$	165
Gain on Spectrum License Transactions
Selling, general & administrative expense	$	(707	)	$	(254	)	$	(142)
Early Debt Redemption and Other Costs
Cost of services and sales	$	27		$	-		$	-
Selling, general & administrative expense		307			-			-
Other income and (expense), net		1,461			-			-
Gain on Sale of Omnitel Interest
Equity in earnings of unconsolidated businesses	$	(1,924	)	$	-		$	-
Wireless Transaction Costs
Other income and (expense), net	$	(4	)	$	-		$	-
Interest expense		415			-			-
Impact of Divested Operations(1)
Revenues	$	5,625		$	5,280		$	1,280
Cost of services and sales		2,004			1,852			482
Selling, general & administrative expense		574			522			137
Depreciation and amortization		1,026			88			-
Total Expenses	$	3,604		$	2,462		$	619
(1) Impact of Divested Operations has been updated for the impact of Divested Businesses.

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Verizon Communications Inc.

Non-Operational & Other Items

																	(Pre-tax dollars in millions)
	2014										2015									2016
Unaudited	1Q			2Q			3Q		4Q		1Q		2Q		3Q		4Q			1Q
Severance, Pension & Benefit Charges/(Credits)
Operating expenses	$	-		$	-		$	-	$	7,507	$	-	$	-	$	342	$	(2,598	)	$	165
Gain on Spectrum License Transactions
Selling, general & administrative expense	$	-		$	(707	)	$	-	$	-	$	-	$	-	$	-	$	(254	)	$	(142	)
Early Debt Redemption and Other Costs
Cost of services and sales	$	-		$	-		$	-	$	27	$	-	$	-	$	-	$	-		$	-
Selling, general & administrative expense		-			-			-		307		-		-		-		-			-
Other income and (expense), net		923			-			-		538		-		-		-		-			-
Gain on Sale of Omnitel Interest
Equity in earnings of unconsolidated businesses	$	(1,924	)	$	-		$	-	$	-	$	-	$	-	$	-	$	-		$	-
Wireless Transaction Costs
Other income and (expense), net	$	(4	)	$	-		$	-	$	-	$	-	$	-	$	-	$	-		$	-
Interest expense		415			-			-		-		-		-		-		-			-
Impact of Divested Operations (1)
Revenues	$	1,477		$	1,471		$	1,335	$	1,342	$	1,342	$	1,327	$	1,307	$	1,304		$	1,280
Cost of services and sales		559			562			442		441		457		451		466		478			482
Selling, general & administrative expense		150			145			147		132		146		135		124		117			137
Depreciation and amortization		300			239			244		243		88		-		-		-			-
Total Expenses	$	1,009		$	946		$	833	$	816	$	691	$	586	$	590	$	595		$	619

⁽¹⁾ Impact of Divested Operations has been updated for the impact of Divested Businesses.

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Verizon Communications Inc.

Condensed Consolidated Balance Sheets

				(dollars in millions)
Unaudited		12/31/14			12/31/15			3/31/16
Assets
Current assets
Cash and cash equivalents	$	10,598		$	4,470		$	5,846
Short-term investments		555			350			-
Accounts receivable, net		13,993			13,457			12,485
Inventories		1,153			1,252			1,142
Assets held for sale		552			792			720
Prepaid expenses and other		2,648			1,959			3,422
Total current assets		29,499			22,280			23,615
Plant, property and equipment		230,508			220,163			222,669
Less accumulated depreciation		140,561			136,622			139,658
		89,947			83,541			83,011
Investments in unconsolidated businesses		802			796			821
Wireless licenses		75,341			86,575			86,830
Goodwill		24,639			25,331			25,364
Other intangible assets, net		5,728			8,338			8,216
Non-current assets held for sale		-			10,267			10,432
Deposit for wireless licenses		921			-			-
Other assets		5,232			7,047			6,298
Total Assets	$	232,109		$	244,175		$	244,587
Liabilities and Equity
Current liabilities
Debt maturing within one year	$	2,735		$	6,489		$	6,265
Accounts payable and accrued liabilities		16,680			19,362			18,118
Liabilities related to assets held for sale		-			463			452
Other		8,572			8,738			8,477
Total current liabilities		27,987			35,052			33,312
Long-term debt		110,029			103,240			103,615
Employee benefit obligations		33,280			29,957			29,665
Deferred income taxes		41,563			45,484			45,568
Non-current liabilities related to assets held for sale		-			959			974
Other liabilities		5,574			11,641			11,350
Equity
Common stock		424			424			424
Contributed capital		11,155			11,196			11,191
Reinvested earnings		2,447			11,246			13,253
Accumulated other comprehensive income		1,111			550			459
Common stock in treasury, at cost		(3,263	)		(7,416	)		(7,279)
Deferred compensation - employee stock ownership plans and other		424			428			593
Noncontrolling interests		1,378			1,414			1,462
Total Equity		13,676			17,842			20,103
Total Liabilities and Equity	$	232,109		$	244,175		$	244,587
Verizon - Selected Financial and Operating Statistics
Unaudited		12/31/14			12/31/15			3/31/16
Total debt ($M)	$	112,764		$	109,729		$	109,880
Net debt ($M)	$	102,166		$	105,259		$	104,034
Net debt / Adjusted EBITDA(1)		2.5	x		2.4	x		2.4x
Common shares outstanding end of period (M)		4,155			4,073			4,076
Total employees		177,300			177,700			173,300
Cash dividends declared per common share	$	2.160		$	2.230		$	.565

⁽¹⁾ Net debt/Adjusted EBITDA has been updated for the impact of Divested Businesses.

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Verizon Communications Inc.

Condensed Consolidated Balance Sheets

																				(dollars in millions)
Unaudited	3/31/14		6/30/14		9/30/14		12/31/14			3/31/15			6/30/15			9/30/15			12/31/15			3/31/16
Assets
Current assets
Cash and cash equivalents	$	2,907	$	5,776	$	7,218	$	10,598		$	4,386		$	3,008		$	3,875		$	4,470		$	5,846
Short-term investments		637		648		635		555			547			309			306			350			-
Accounts receivable, net		12,131		12,966		13,283		13,993			12,698			13,444			13,105			13,457			12,485
Inventories		881		1,073		1,206		1,153			1,076			1,149			1,319			1,252			1,142
Assets held for sale		4,162		14		317		552			893			774			895			792			720
Prepaid expenses and other		2,409		2,174		1,950		2,648			3,128			2,709			2,176			1,959			3,422
Total current assets		23,127		22,651		24,609		29,499			22,728			21,393			21,676			22,280			23,615
Plant, property and equipment		223,841		227,475		230,452		230,508			210,389			213,661			216,674			220,163			222,669
Less accumulated depreciation		134,785		137,763		140,520		140,561			128,747			131,129			134,112			136,622			139,658
		89,056		89,712		89,932		89,947			81,642			82,532			82,562			83,541			83,011
Investments in unconsolidated businesses		889		852		818		802			762			794			779			796			821
Wireless licenses		72,713		75,270		75,303		75,341			75,693			86,321			86,331			86,575			86,830
Goodwill		24,647		24,663		24,617		24,639			23,303			25,429			25,124			25,331			25,364
Other intangible assets, net		5,839		5,781		5,738		5,728			5,779			7,983			8,322			8,338			8,216
Non-current assets held for sale		-		-		-		-			9,580			9,647			10,117			10,267			10,432
Deposit for wireless licenses		-		-		-		921			10,430			-			-			-			-
Other assets		4,692		4,811		4,662		5,232			5,301			6,091			6,626			7,047			6,298
Total Assets	$	220,963	$	223,740	$	225,679	$	232,109		$	235,218		$	240,190		$	241,537		$	244,175		$	244,587
Liabilities and Equity
Current liabilities
Debt maturing within one year	$	2,152	$	2,283	$	1,603	$	2,735		$	4,439		$	4,206		$	7,264		$	6,489		$	6,265
Accounts payable and accrued liabilities		14,984		16,521		17,055		16,680			15,189			16,953			17,721			19,362			18,118
Liabilities related to assets held for sale		-		-		-		-			572			457			461			463			452
Other		8,202		7,659		7,903		8,572			8,410			8,962			8,868			8,738			8,477
Total current liabilities		25,338		26,463		26,561		27,987			28,610			30,578			34,314			35,052			33,312
Long-term debt		107,133		107,214		107,148		110,029			108,452			108,978			104,583			103,240			103,615
Employee benefit obligations		26,977		26,342		25,770		33,280			33,010			32,711			32,962			29,957			29,665
Deferred income taxes		41,497		41,852		42,482		41,563			42,358			42,936			43,015			45,484			45,568
Non-current liabilities related to assets held for sale		-		-		-		-			943			942			940			959			974
Other liabilities		6,167		5,857		5,750		5,574			11,086			11,171			11,181			11,641			11,350
Equity
Common stock		424		424		424		424			424			424			424			424			424
Contributed capital		10,976		11,038		11,089		11,155			10,391			11,167			11,184			11,196			11,191
Reinvested earnings (Accumulated deficit)		3,534		5,551		6,964		2,447			4,422			6,418			8,156			11,246			13,253
Accumulated other comprehensive income		1,290		1,188		1,175		1,111			916			821			600			550			459
Common stock in treasury, at cost		(3,794)		(3,638)		(3,465)		(3,263)			(7,093)			(7,741)			(7,604)			(7,416)			(7,279)
Deferred compensation - employee stock ownership plans and other		281		338		390		424			279			326			378			428			593
Noncontrolling interests		1,140		1,111		1,391		1,378			1,420			1,459			1,404			1,414			1,462
Total Equity		13,851		16,012		17,968		13,676			10,759			12,874			14,542			17,842			20,103
Total Liabilities and Equity	$	220,963	$	223,740	$	225,679	$	232,109		$	235,218		$	240,190		$	241,537		$	244,175		$	244,587
Verizon - Selected Financial and Operating Statistics
Unaudited	3/31/14		6/30/14		9/30/14		12/31/14			3/31/15			6/30/15			9/30/15			12/31/15			3/31/16
Total debt ($M)	$	109,285	$	109,497	$	108,751	$	112,764		$	112,891		$	113,184		$	111,847		$	109,729		$	109,880
Net debt ($M)	$	106,378	$	103,721	$	101,533	$	102,166		$	108,505		$	110,176		$	107,972		$	105,259		$	104,034
Net debt / Adjusted EBITDA(1)								2.5	x		2.7	x		2.6	x		2.5	x		2.4	x		2.4	x
Common shares outstanding end of period (M)		4,141		4,145		4,150		4,155			4,078			4,066			4,069			4,073			4,076
Total employees		176,900		177,800		178,500		177,300			176,200			178,500			177,900			177,700			173,300
Cash dividends declared per common share	$	.530	$	.530	$	.550	$	.550		$	.550		$	.550		$	.565		$	.565		$	.565

⁽¹⁾ Net debt/Adjusted EBITDA has been updated for the impact of Divested Businesses.

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Verizon Communications Inc.

Condensed Consolidated Statements of Cash Flows

							(dollars in millions)
		12 Months Ended			12 Months Ended			3 Months Ended
Unaudited		12/31/14			12/31/15			3/31/16
Cash Flows From Operating Activities
Net Income	$	11,956		$	18,375		$	4,430
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization expense		16,533			16,017			4,017
Employee retirement benefits		8,130			(1,747	)		356
Deferred income taxes		(92	)		3,516			167
Provision for uncollectible accounts		1,095			1,610			353
Equity in (earnings) losses of unconsolidated businesses, net of dividends received		(1,743	)		127			29
Changes in current assets and liabilities, net of effects from acquisition/disposition of businesses		(2,160	)		2,443			(1,162)
Other, net		(3,088	)		(1,411	)		(771)
Net cash provided by operating activities		30,631			38,930			7,419
Cash Flows From Investing Activities
Capital expenditures (including capitalized software)		(17,191	)		(17,775	)		(3,387)
Acquisitions of investments and businesses, net of cash acquired		(182	)		(3,545	)		(161)
Acquisitions of wireless licenses		(354	)		(9,942	)		(131)
Proceeds from dispositions of wireless licenses		2,367			-			-
Proceeds from dispositions of businesses		120			48			-
Other, net		(616	)		1,171			243
Net cash used in investing activities		(15,856	)		(30,043	)		(3,436)
Cash Flows From Financing Activities
Proceeds from long-term borrowings		30,967			6,667			-
Repayments of long-term borrowings and capital lease obligations		(17,669	)		(9,340	)		(376)
Decrease in short-term obligations, excluding current maturities		(475	)		(344	)		(40)
Dividends paid		(7,803	)		(8,538	)		(2,302)
Proceeds from sale of common stock		34			40			3
Purchase of common stock for treasury		-			(5,134	)		-
Acquisition of noncontrolling interest		(58,886	)		-			-
Other, net		(3,873	)		1,634			108
Net cash provided by (used in) financing activities		(57,705	)		(15,015	)		(2,607)
Increase (decrease) in cash and cash equivalents		(42,930	)		(6,128	)		1,376
Cash and cash equivalents, beginning of period		53,528			10,598			4,470
Cash and cash equivalents, end of period	$	10,598		$	4,470		$	5,846

9

Verizon Communications Inc.

Condensed Consolidated Statements of Cash Flows

																						(dollars in millions)
		3 Months Ended			6 Months Ended			9 Months Ended			12 Months Ended			3 Months Ended			6 Months Ended			9 Months Ended			12 Months Ended			3 Months Ended
Unaudited		3/31/14			6/30/14			9/30/14			12/31/14			3/31/15			6/30/15			9/30/15			12/31/15			3/31/16
Cash Flows From Operating Activities
Net Income	$	5,986		$	10,310		$	14,104		$	11,956		$	4,338		$	8,691		$	12,862		$	18,375		$	4,430
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization expense		4,137			8,298			12,465			16,533			3,989			7,969			11,978			16,017			4,017
Employee retirement benefits		281			562			843			8,130			284			561			1,184			(1,747	)		356
Deferred income taxes		(155	)		253			914			(92	)		823			826			890			3,516			167
Provision for uncollectible accounts		231			473			684			1,095			383			744			1,136			1,610			353
Equity in (earnings) losses of unconsolidated businesses, net of dividends received		(1,894	)		(1,841	)		(1,785	)		(1,743	)		44			72			98			127			29
Changes in current assets and liabilities, net of effects from acquisition/disposition of businesses		(1,626	)		(847	)		(816	)		(2,160	)		(888	)		416			1,443			2,443			(1,162)
Other, net		179			(2,404	)		(3,252	)		(3,088	)		1,196			(373	)		(1,165	)		(1,411	)		(771)
Net cash provided by operating activities		7,139			14,804			23,157			30,631			10,169			18,906			28,426			38,930			7,419
Cash Flows From Investing Activities
Capital expenditures (including capitalized software)		(4,150	)		(8,494	)		(12,624	)		(17,191	)		(3,665	)		(8,153	)		(12,540	)		(17,775	)		(3,387)
Acquisitions of investments and businesses, net of cash acquired		(157	)		(179	)		(180	)		(182	)		(2	)		(3,225	)		(3,205	)		(3,545	)		(161)
Acquisitions of wireless licenses		(213	)		(271	)		(343	)		(354	)		(9,555	)		(9,677	)		(9,811	)		(9,942	)		(131)
Proceeds from dispositions of wireless licenses		-			2,367			2,367			2,367			-			-			-			-			-
Proceeds from dispositions of businesses		-			-			120			120			-			-			-			48			-
Other, net		(11	)		231			230			(616	)		46			884			960			1,171			243
Net cash used in investing activities		(4,531	)		(6,346	)		(10,430	)		(15,856	)		(13,176	)		(20,171	)		(24,596	)		(30,043	)		(3,436)
Cash Flows From Financing Activities
Proceeds from long-term borrowings		16,952			20,245			21,575			30,967			6,497			6,497			6,497			6,667			-
Repayments of long-term borrowings and capital lease obligations		(7,951	)		(11,317	)		(12,594	)		(17,669	)		(5,576	)		(5,797	)		(7,168	)		(9,340	)		(376)
Increase (decrease) in short-term obligations, excluding current maturities		252			279			(426	)		(475	)		482			(106	)		(305	)		(344	)		(40)
Dividends paid		(1,517	)		(3,583	)		(5,653	)		(7,803	)		(2,153	)		(4,266	)		(6,373	)		(8,538	)		(2,302)
Proceeds from sale of common stock		34			34			34			34			-			-			31			40			3
Purchase of common stock for treasury		-			-			-			-			(5,000	)		(5,074	)		(5,134	)		(5,134	)		-
Acquisition of noncontrolling interest		(58,886	)		(58,886	)		(58,886	)		(58,886	)		-			-			-			-			-
Other, net		(2,113	)		(2,982	)		(3,087	)		(3,873	)		2,545			2,421			1,899			1,634			108
Net cash provided by (used in) financing activities		(53,229	)		(56,210	)		(59,037	)		(57,705	)		(3,205	)		(6,325	)		(10,553	)		(15,015	)		(2,607)
Increase (decrease) in cash and cash equivalents		(50,621	)		(47,752	)		(46,310	)		(42,930	)		(6,212	)		(7,590	)		(6,723	)		(6,128	)		1,376
Cash and cash equivalents, beginning of period		53,528			53,528			53,528			53,528			10,598			10,598			10,598			10,598			4,470
Cash and cash equivalents, end of period	$	2,907		$	5,776		$	7,218		$	10,598		$	4,386		$	3,008		$	3,875		$	4,470		$	5,846

10

11

Verizon Communications Inc.

Wireless - Selected Financial Results

															(dollars in millions)
	2014								2015								2016
Unaudited	1Q		2Q		3Q		4Q		1Q		2Q		3Q		4Q		1Q
Operating Revenues
Service	$	17,987	$	18,078	$	18,356	$	18,209	$	17,914	$	17,689	$	17,598	$	17,195	$	16,809
Equipment		1,870		2,387		2,480		4,222		3,373		3,861		4,292		5,398		3,954
Other		1,022		1,018		999		1,018		1,041		1,063		1,115		1,141		1,241
Total Operating Revenues		20,879		21,483		21,835		23,449		22,328		22,613		23,005		23,734		22,004
Operating Expenses
Cost of services		1,757		1,749		1,837		1,857		1,851		1,948		2,010		1,994		1,942
Cost of equipment		4,099		4,993		5,206		7,327		5,108		5,455		5,716		6,840		4,998
Selling, general & administrative expense		5,644		5,649		5,698		6,611		5,369		5,289		5,351		5,796		4,891
Depreciation and amortization expense		2,061		2,107		2,139		2,152		2,190		2,225		2,260		2,305		2,293
Total Operating Expenses		13,561		14,498		14,880		17,947		14,518		14,917		15,337		16,935		14,124
Operating Income	$	7,318	$	6,985	$	6,955	$	5,502	$	7,810	$	7,696	$	7,668	$	6,799	$	7,880
Operating Income Margin		35.0%		32.5%		31.9%		23.5%		35.0%		34.0%		33.3%		28.6%		35.8%
Segment EBITDA	$	9,379	$	9,092	$	9,094	$	7,654	$	10,000	$	9,921	$	9,928	$	9,104	$	10,173
Segment EBITDA Margin		44.9%		42.3%		41.6%		32.6%		44.8%		43.9%		43.2%		38.4%		46.2%

Footnotes:

The segment financial results and metrics above are adjusted to exclude the effects of non-operational items, as the Company’s chief operating decision maker excludes these items in assessing business unit performance.

Intersegment transactions have not been eliminated.

12

Verizon Communications Inc.

Wireless - Selected Operating Statistics

	2014									2015												2016
Unaudited	1Q		2Q			3Q		4Q		1Q			2Q			3Q			4Q			1Q
Connections (‘000)
Retail postpaid		97,273		98,593			100,103		102,079		102,637			103,731			105,023			106,528			107,171
Retail prepaid		6,057		6,044			6,053		6,132		5,945			5,817			5,737			5,580			5,402
Retail		103,330		104,637			106,156		108,211		108,582			109,548			110,760			112,108			112,573
Net Add Detail (‘000)(1)
Retail postpaid		539		1,441			1,516		1,986		565			1,134			1,289			1,519			640
Retail prepaid		10		(14	)		9		81		(188	)		(126	)		(80	)		(157	)		(177	)
Retail		549		1,427			1,525		2,067		377			1,008			1,209			1,362			463
Account Statistics
Retail postpaid accounts (‘000)		35,061		35,186			35,435		35,616		35,516			35,560			35,677			35,736			35,720
Retail postpaid connections per account		2.77		2.80			2.82		2.87		2.89			2.92			2.94			2.98			3.00
Retail postpaid ARPA (2)	$	159.67	$	159.73		$	161.24	$	158.82	$	156.14		$	153.73		$	152.38		$	148.30		$	145.34
Retail postpaid I-ARPA (3)	$	160.32	$	161.43		$	163.93	$	162.98	$	162.78		$	163.01		$	164.31		$	164.40		$	165.03
Churn Detail
Retail postpaid		1.07%		0.94%			1.00%		1.14%		1.03%			0.90%			0.93%			0.96%			0.96%
Retail		1.37%		1.25%			1.29%		1.39%		1.33%			1.18%			1.21%			1.23%			1.23%
Retail Postpaid Connection Statistics
Total Smartphone postpaid % of phones activated		90.1%		90.8%			91.0%		93.6%		91.4%			91.7%			91.3%			93.7%			92.5%
Total Smartphone postpaid phone base		72.3%		74.6%			76.5%		78.6%		79.9%			81.2%			82.4%			83.7%			84.7%
Total Internet postpaid base		11.3%		12.3%			13.1%		14.1%		14.8%			15.4%			16.0%			16.8%			17.3%
4G LTE devices as % of retail postpaid connections		49.2%		54.5%			59.3%		66.0%		69.9%			73.3%			76.2%			79.2%			81.1%
Other Operating Statistics
Capital expenditures ($M)	$	2,554	$	2,771		$	2,483	$	2,707	$	2,419		$	3,126		$	2,921		$	3,259		$	2,190
Footnotes: (1) Connection net additions exclude acquisitions and adjustments. The segment financial results and metrics above are adjusted to exclude the effects of non-operational items, as the Company’s chief operating decision maker excludes these items in assessing business unit performance.
(2)(3) Retail postpaid ARPA (average service revenue per account from retail postpaid accounts) and Retail postpaid I-ARPA (average service revenue per account from retail postpaid accounts plus recurring device installment billings).

13

14

Verizon Communications Inc.

Wireline - Selected Financial Results⁽¹⁾

															(dollars in millions)
			2014						2015								2016
Unaudited	1Q		2Q		3Q		4Q		1Q		2Q		3Q		4Q		1Q
Operating Revenues
Consumer retail		$    2,987		$    3,014		$    3,053		$    3,114		$    3,128		$    3,174		$    3,168		$    3,226		$    3,180
Small business		462		462		456		449		445		441		434		424		422
Mass Markets		3,449		3,476		3,509		3,563		3,573		3,615		3,602		3,650		3,602
Global Enterprise		3,266		3,234		3,163		3,151		3,047		3,007		2,988		3,008		2,956
Global Wholesale		1,394		1,373		1,363		1,318		1,339		1,310		1,289		1,325		1,283
Other		139		139		140		116		91		81		88		81		82
Total Operating Revenues		8,248		8,222		8,175		8,148		8,050		8,013		7,967		8,064		7,923
Operating Expenses
Cost of services		4,866		4,858		4,845		4,844		4,785		4,704		4,695		4,632		4,644
Selling, general & administrative expense		1,969		1,835		1,848		1,742		1,838		1,813		1,770		1,835		1,770
Depreciation and amortization expense		1,723		1,756		1,724		1,614		1,647		1,695		1,611		1,590		1,576
Total Operating Expenses		8,558		8,449		8,417		8,200		8,270		8,212		8,076		8,057		7,990
Operating Income (Loss)		(310)		(227)		(242)		(52)		(220)		(199)		(109)		7		(67)
Operating Income (Loss) Margin		(3.8)%		(2.8)%		(3.0)%		(0.6)%		(2.7)%		(2.5)%		(1.4)%		0.1%		(0.8)%
Segment EBITDA		$    1,413		$    1,529		$    1,482		$    1,562		$    1,427		$    1,496		$    1,502		$    1,597		$    1,509
Segment EBITDA Margin		17.1%		18.6%		18.1%		19.2%		17.7%		18.7%		18.9%		19.8%		19.0%

Footnotes:

The segment financial results and metrics above are adjusted to exclude the effects of non-operational items, as the Company’s chief operating decision maker excludes these items in assessing business unit performance.

Intersegment transactions have not been eliminated.

⁽¹⁾ Wireline -Selected Financial Results have been updated for the impact of the Reclassified Results.

15

Verizon Communications Inc.

Wireline - Selected Operating Statistics(1)
					2014				2015								2016
Unaudited	1Q		2Q		3Q		4Q		1Q		2Q		3Q		4Q		1Q
Connections (‘000)
Fios Video Subscribers		4,165		4,252		4,352		4,453		4,535		4,565		4,610		4,635		4,678
Fios Internet Subscribers		4,704		4,818		4,946		5,068		5,178		5,240		5,336		5,418		5,508
Fios Digital Voice residence connections		3,508		3,585		3,651		3,727		3,784		3,788		3,829		3,872		3,917
Fios Digital connections		12,377		12,655		12,949		13,248		13,497		13,593		13,775		13,925		14,103
HSI		2,161		2,091		2,023		1,956		1,891		1,820		1,738		1,667		1,589
Total Broadband connections		6,865		6,909		6,969		7,024		7,069		7,060		7,074		7,085		7,097
Primary residence switched access connections		4,895		4,730		4,566		4,415		4,264		4,113		3,951		3,799		3,643
Primary residence connections		8,403		8,315		8,217		8,142		8,048		7,901		7,780		7,671		7,560
Total retail residence voice connections		8,782		8,679		8,565		8,475		8,368		8,209		8,072		7,949		7,824
Total voice connections		16,878		16,613		16,375		16,140		15,897		15,586		15,324		15,035		14,781
Net Add Detail (‘000)
Fios Video Subscribers		54		87		100		101		82		30		45		25		43
Fios Internet Subscribers		79		114		128		122		110		62		96		82		90
Fios Digital Voice residence connections		84		77		66		76		57		4		41		43		45
Fios Digital connections		217		278		294		299		249		96		182		150		178
HSI		(59)		(70)		(68)		(67)		(65)		(71)		(82)		(71)		(78)
Total Broadband connections		20		44		60		55		45		(9)		14		11		12
Primary residence switched access connections		(189)		(165)		(164)		(151)		(151)		(151)		(162)		(152)		(156)
Primary residence connections		(105)		(88)		(98)		(75)		(94)		(147)		(121)		(109)		(111)
Total retail residence voice connections		(125)		(103)		(114)		(90)		(107)		(159)		(137)		(123)		(125)
Total voice connections		(270)		(265)		(238)		(235)		(243)		(311)		(262)		(289)		(254)
Revenue Statistics
Fios revenues ($M)		$    2,341		$    2,415		$    2,483		$    2,567		$    2,607		$    2,684		$    2,695		$    2,775		$    2,766
Other Operating Statistics
Capital expenditures ($M)		$    1,385		$    1,345		$    1,464		$    1,556		$    1,077		$    1,134		$    1,202		$    1,636		$    1,006
Wireline employees (K)(2)		70.1		70.0		68.8		66.5		65.3		62.8		61.8		61.0		59.5
Fios Video Open for Sale (K)		11,990		12,158		12,372		12,536		12,681		12,863		13,024		13,196		13,366
Fios Video penetration		34.7%		35.0%		35.2%		35.5%		35.8%		35.5%		35.4%		35.1%		35.0%
Fios Internet Open for Sale (K)		12,292		12,465		12,671		12,825		12,970		13,154		13,317		13,491		13,661
Fios Internet penetration		38.3%		38.7%		39.0%		39.5%		39.9%		39.8%		40.1%		40.2%		40.3%
Footnotes:
The segment financial results and metrics above are adjusted to exclude the effects of non-operational items, as the Company’s chief operating decision maker excludes these items in assessing business unit performance. Intersegment transactions have not been eliminated.
(1) Wireline -Selected Operating Statistics have been updated for the impact of Divested Businesses.
(2) Wireline employees have been updated for the impact of Reclassified Results.

16

17

Verizon Communications Inc.

Definitions – Non-GAAP Measures

Non-GAAP Measures

Verizon’s financial information was prepared in conformity with generally accepted accounting principles (GAAP) as well as on a non-GAAP basis. 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.

Consolidated Operating Revenues Excluding AOL

Verizon consolidated operating revenues excluding AOL is a non-GAAP financial measure that management believes is useful to investors and other users of our financial information in evaluating our operating results and understanding operating trends. Consolidated operating revenues excluding AOL exclude the operating revenues associated with AOL Inc., which was acquired by Verizon on June 23, 2015.

EBITDA and EBITDA Margin

Verizon consolidated earnings before interest, taxes, depreciation and amortization (Consolidated EBITDA), consolidated EBITDA margin, Wireless Segment EBITDA (Wireless EBITDA), Wireless Segment EBITDA margin (Wireless EBITDA margin), Wireline Segment EBITDA (Wireline EBITDA) and Wireline Segment EBITDA margin (Wireline EBITDA margin) are non-GAAP financial measures and management believes these measures are useful to investors and other users of our financial information in evaluating operating profitability on a more variable cost basis as they exclude depreciation and amortization expense related primarily to capital expenditures and acquisitions that occurred in prior years, as well as in evaluating operating performance in relation to Verizon’s competitors.

Verizon consolidated adjusted EBITDA (Consolidated Adjusted EBITDA) is a non-GAAP financial measure and does not purport to be an alternative to GAAP as a measure of operating performance. Management believes this measure provides relevant and useful information to investors and other users of our financial information in evaluating the effectiveness of our operations and underlying business trends in a manner that is consistent with management’s evaluation of business performance.

Consolidated EBITDA is calculated by adding back interest, taxes, depreciation and amortization expense, equity in losses of unconsolidated businesses and other (income) and expense, net to net income. Consolidated EBITDA margin is calculated by dividing Consolidated EBITDA by consolidated operating revenues.

Consolidated Adjusted EBITDA is calculated by excluding the effect of non-operational items and the impact of divested operations from the calculation of Consolidated EBITDA.

Wireless EBITDA is calculated by adding back depreciation and amortization expense to Wireless Segment operating income. Wireless EBITDA margin is calculated by dividing Wireless EBITDA by Wireless total operating revenues. Wireline EBITDA is calculated by adding back depreciation and amortization expense to Wireline operating income, and Wireline EBITDA margin is calculated by dividing Wireline EBITDA by Wireline total operating revenues.

Free Cash Flow

Free cash flow is a non-GAAP financial measure that management believes is useful to investors and other users of our 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.

Net Debt and the Net Debt to Consolidated Adjusted EBITDA Ratio

Net Debt and Net Debt to Consolidated Adjusted EBITDA Ratio are non-GAAP financial measures that management believes are useful to investors and other users of our financial information in evaluating Verizon’s leverage. Net Debt is calculated by subtracting cash and cash equivalents from the sum of debt maturing within one year and long-term debt. For purposes of the Net Debt to Consolidated Adjusted EBITDA Ratio, Consolidated Adjusted EBITDA is calculated for the last twelve months. Management believes this presentation assists investors and other users of our financial information in understanding trends that may be indicative of future operating results given the non-operational nature of the items excluded from the calculation.

Adjusted Earnings per Common Share (Adjusted EPS)

Adjusted Earnings per Common Share (Adjusted EPS) is a non-GAAP financial measure that management believes is useful to investors and other users of our financial information in evaluating our operating results and understanding our operating trends. Adjusted EPS is calculated by excluding the effect of non-operational items from the calculation of reported EPS.

Consolidated Adjusted EBITDA and Adjusted EPS include pension expenses calculated based on the prior year-end discount rate and expected return on plan assets used during the first three quarters of the year, as opposed to the actual discount rate and return on plan assets, which are not available until December 31 or upon a remeasurement event. Management believes that excluding actuarial gains or losses as a result of a remeasurement provides investors and other users of our financial information with more meaningful sequential and year-over-year quarterly comparisons and is consistent with management’s evaluation of business performance.

18

Verizon Communications Inc.

Consolidated Non-GAAP Reconciliations

	(dollars in millions)
Unaudited	3 Months Ended 3/31/2015		12 Months Ended 3/31/2016
Consolidated Operating Revenues Excluding AOL
Consolidated Operating Revenues	$	31,984	$	32,171
Less: AOL operating revenues		-		669
Consolidated Operating Revenues Excluding AOL	$	31,984	$	31,502

																(dollars in millions)
	3 Months		3 Months		3 Months		3 Months		3 Months		3 Months		3 Months		3 Months		3 Months
	Ended		Ended		Ended		Ended		Ended		Ended		Ended		Ended		Ended
Unaudited	3/31/2014		6/30/2014		9/30/2014		12/31/2014		3/31/2015		6/30/2015		9/30/2015		12/31/2015		3/31/2016
Consolidated EBITDA , EBITDA Margin and Adjusted EBITDA
Verizon Consolidated EBITDA
Consolidated net income (loss)		$    5,986		$    4,324		$    3,794		$  (2,148)		$    4,338		$    4,353		$    4,171		$    5,513		$    4,430
Add/Subtract non-operating items:
Provision (Benefit) for income taxes		968		2,220		1,864		(1,738)		2,331		2,274		2,195		3,065		2,336
Interest expense		1,214		1,164		1,255		1,282		1,332		1,208		1,202		1,178		1,188
Other (income) and expense, net		894		(66)		(71)		437		(75)		(32)		(51)		(28)		(32)
Equity in losses of unconsolidated businesses		(1,902)		43		48		31		34		18		18		16		20
Operating Income (Loss)		7,160		7,685		6,890		(2,136)		7,960		7,821		7,535		9,744		7,942
Add: Depreciation and amortization expense		4,137		4,161		4,167		4,068		3,989		3,980		4,009		4,039		4,017
Consolidated EBITDA		$  11,297		$  11,846		$  11,057		$  1,932		$  11,949		$  11,801		$  11,544		$  13,783		$  11,959
Add/Subtract non-operational items (before tax):
Severance, pension & benefit charges (credits)		-		-		-		7,507		-		-		342		(2,598)		165
Gain on spectrum license transactions		-		(707)		-		-		-		-		-		(254)		(142)
Impact of divested operations(1)		(768)		(764)		(746)		(769)		(739)		(741)		(717)		(709)		(661)
Other non-operational costs		-		-		-		334		-		-		-		-		-
		(768)		(1,471)		(746)		7,072		(739)		(741)		(375)		(3,561)		(638)
Consolidated Adjusted EBITDA(1)		$  10,529		$  10,375		$  10,311		$  9,004		$  11,210		$  11,060		$  11,169		$  10,222		$  11,321
Consolidated Operating Income Margin										24.9%								24.7%
Consolidated EBITDA Margin										37.4%								37.2%
																(dollars in millions)
Unaudited		3/31/2014		6/30/2014		9/30/2014		12/31/2014		3/31/2015		6/30/2015		9/30/2015		12/31/2015		3/31/2016
Net Debt and Net Debt to Consolidated Adjusted EBITDA Ratio
Net Debt
Debt maturing within one year		$      2,152		$      2,283		$      1,603		$      2,735		$      4,439		$      4,206		$      7,264		$      6,489		$      6,265
Long-term debt		107,133		107,214		107,148		110,029		108,452		108,978		104,583		103,240		103,615
Total Debt		109,285		109,497		108,751		112,764		112,891		113,184		111,847		109,729		109,880
Less: Cash and cash equivalents		2,907		5,776		7,218		10,598		4,386		3,008		3,875		4,470		5,846
Net Debt		$  106,378		$  103,721		$  101,533		$  102,166		$  108,505		$  110,176		$  107,972		$  105,259		$  104,034
Net Debt to Consolidated Adjusted EBITDA Ratio(1)								2.5x		2.7x		2.6x		2.5x		2.4x		2.4x

⁽¹⁾ Consolidated Adjusted EBITDA and Net Debt to Consolidated Adjusted EBITDA Ratio have been updated for the impact of Divested Businesses.

19

Verizon Communications Inc.

Wireless Non-GAAP Reconciliations

															(dollars in millions)
Unaudited	3 Months Ended 3/31/14		3 Months Ended 6/30/14		3 Months Ended 9/30/14		3 Months Ended 12/31/14		3 Months Ended 3/31/15		3 Months Ended 6/30/15		3 Months Ended 9/30/15		3 Months Ended 12/31/15		3 Months Ended 3/31/16
Wireless Segment EBITDA
Operating Income		$      7,318		$      6,985		$      6,955		$      5,502		$      7,810		$      7,696		$      7,668		$      6,799		$      7,880
Add: Depreciation and amortization expense		2,061		2,107		2,139		2,152		2,190		2,225		2,260		2,305		2,293
Wireless Segment EBITDA		$      9,379		$      9,092		$      9,094		$      7,654		$    10,000		$      9,921		$      9,928		$      9,104		$    10,173
Wireless total operating revenues		$    20,879		$    21,483		$    21,835		$    23,449		$    22,328		$    22,613		$    23,005		$    23,734		$    22,004
Wireless Operating Income Margin		35.0%		32.5%		31.9%		23.5%		35.0%		34.0%		33.3%		28.6%		35.8%
Wireless Segment EBITDA Margin		44.9%		42.3%		41.6%		32.6%		44.8%		43.9%		43.2%		38.4%		46.2%
Wireline Non-GAAP Reconciliations(1)
															(dollars in millions)
Unaudited	3 Months Ended 3/31/14		3 Months Ended 6/30/14		3 Months Ended 9/30/14		3 Months Ended 12/31/14		3 Months Ended 3/31/15		3 Months Ended 6/30/15		3 Months Ended 9/30/15		3 Months Ended 12/31/15		3 Months Ended 3/31/16
Wireline Segment EBITDA and
EBITDA Margin
Operating Income (Loss)		$     (310)		$     (227)		$     (242)		$       (52)		$     (220)		$     (199)		$     (109)		$            7		$       (67)
Add: Depreciation and amortization expense		1,723		1,756		1,724		1,614		1,647		1,695		1,611		1,590		1,576
Wireline Segment EBITDA		$    1,413		$    1,529		$    1,482		$    1,562		$    1,427		$    1,496		$    1,502		$    1,597		$    1,509
Wireline total operating revenues		$    8,248		$    8,222		$    8,175		$    8,148		$    8,050		$    8,013		$    7,967		$    8,064		$    7,923
Wireline Operating Income (Loss) Margin		(3.8)%		(2.8)%		(3.0)%		(0.6)%		(2.7)%		(2.5)%		(1.4)%		0.1%		(0.8)%
Wireline Segment EBITDA Margin		17.1%		18.6%		18.1%		19.2%		17.7%		18.7%		18.9%		19.8%		19.0%
(1) Wireline Non-GAAP Reconciliations have been updated for the impact of the Reclassified Results.

20

Verizon Communications Inc.

Earnings Per Share Non-GAAP Reconciliations
Unaudited		3 Months Ended 3/31/15		3 Months Ended 12/31/15			3 Months Ended 3/31/16
Adjusted Earnings Per Common Share (Adjusted EPS)
EPS	$	1.02	$	1.32		$	1.06
Severance, Pension, and Benefit Charges (Credits)		-		(0.40	)		0.02
Gain on spectrum license transaction		-		(0.04	)		(0.02)
Adjusted EPS	$	1.02	$	0.89		$	1.06
Note:  EPS may not add due to rounding.
Free Cash Flow Non-GAAP Reconciliations
				(dollars in millions)
Unaudited				3 Months Ended 3/31/15			3 Months Ended 3/31/16
Free Cash Flow
Net cash provided by operating activities			$	10,169		$	7,419
Less: Capital expenditures				3,665			3,387
Free Cash Flow			$	6,504		$	4,032

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