Final Results

Verizon Caps Strong Record of Success in 2013 With Fourth Consecutive Quarter of Double-Digit Earnings Growth NEW YORK, Jan. 21, 2014 -- 4Q 2013 HIGHLIGHTS Consolidated * $1.76 in earnings per share (EPS), compared with a loss of $1.48 in EPS in 4Q 2012, including significant non-operational items in both quarters, primarily related to the annual actuarial valuation of benefit plans and mark-to-market pension adjustments. * 66 cents in adjusted EPS (non-GAAP), a 73.7 percent increase compared with adjusted EPS of 38 cents per share in 4Q 2012 that included 7 cents per share in impacts from Superstorm Sandy. Wireless * 8.0 percent year-over-year increase in service revenues in 4Q 2013; 7.5 percent year-over-year increase in retail service revenues; 29.5 percent operating income margin and 47.0 percent segment EBITDA margin on service revenues (non-GAAP). * 1.7 million retail net additions, excluding acquisitions and adjustments; 1.6 million retail postpaid net additions; low retail postpaid churn of 0.96 percent; 102.8 million total retail connections, 96.8 million total retail postpaid connections. * 4G LTE service now available to nearly 305 million people in more than 500 markets across the U.S. Wireline * 6.4 percent year-over-year increase in consumer revenues; consumer ARPU (average revenue per user) up 10.8 percent year over year. * 15.6 percent year-over-year increase in FiOS revenues; 126,000 FiOS Internet and 92,000 FiOS Video net additions, with continued increased sales penetration for both services. Verizon Communications Inc. (NYSE, Nasdaq: VZ) today reported another strongquarter of earnings, revenue and cash-flow growth. With fourth-quarter 2013 EPS of $1.76 (adjusted, non-GAAP, 66 cents), Verizonhas posted year-over-year double-digit percentage growth in operating incomeand EPS in all four quarters of 2013, and in seven of the past eight quarters. Lowell McAdam, Verizon chairman and CEO, said: "Verizon delivered a totalreturn of 18.6 percent to our shareholders in 2013, while attracting morecustomers than our competitors and improving our financial performance. Thisincluded more than 20 percent year-over-year increases in operating cash flowand EPS. In 2014, we look forward to acquiring sole ownership of VerizonWireless, the best asset in the global wireless industry, and leveraging allour assets to deliver innovative products to customers and more value toshareholders." Verizon reported $1.76 in EPS in fourth-quarter 2013, compared with a loss of$1.48 per share in fourth-quarter 2012. Results in both quarters includedsignificant non-operational items. Fourth-quarter 2013 results included an after-tax gain of $3.7 billion, or$1.29 per share, primarily non-cash and related to the annual actuarialvaluation of benefit plans and mark-to-market pension adjustments. Thisfavorable accounting adjustment was partially offset by after-tax charges of$540 million, or 19 cents per share, for transaction costs related to theacquisition of Vodafone Group PLC's indirect 45 percent interest in VerizonWireless. Assuming approval of Verizon and Vodafone shareholders later thismonth, the closing of the acquisition is planned for Feb. 21 and would beimmediately accretive to earnings by about 10 percent. Fourth-quarter 2012 charges totaled $1.86 per share - $1.55 per share for theannual actuarial valuation of benefit plans and mark-to-market pensionadjustments, and 31 cents per share for the early retirement of debt and otherrestructuring activities. On a comparable basis, Verizon reported 66 cents in adjusted EPS (non-GAAP) infourth-quarter 2013, a 73.7 percent increase compared with adjusted EPS of 38cents in fourth-quarter 2012 that also included 7 cents per share in impactsfrom Superstorm Sandy. For the full year, Verizon reported $4.00 in EPS in 2013, compared with 31cents per share in 2012. On an adjusted basis (non-GAAP), Verizon reported$2.84 in adjusted EPS in 2013, a 26.8 percent increase from $2.24 in adjustedEPS in 2012. Consolidated Results Highlighted by Revenue, Margin and Cash-Flow Growth With revenue growth across all strategic areas - Verizon Wireless, FiOS andstrategic enterprise services - Verizon generated total operating revenues of$120.6 billion for full-year 2013, an increase of 4.1 percent, or $4.7 billion,compared with 2012. Consolidated Highlights * Total operating revenues in fourth-quarter 2013 were $31.1 billion, a 3.4 percent increase compared with fourth-quarter 2012, with 84 percent of revenues generated by Verizon Wireless, FiOS and strategic enterprise services. * For full-year 2013, increased revenues and effective cost management resulted in operating income of $32.0 billion. After adjusting for pension and benefit impacts and other non-operational items, this represented more than 21 percent growth in adjusted operating income (non-GAAP) compared with 2012. * Consolidated operating income margin was 26.5 percent for 2013, compared with 11.4 percent for 2012. Consolidated EBITDA margin (based on earnings before interest, taxes, depreciation and amortization) was 40.3 percent for 2013, compared with 25.6 percent for 2012. On an adjusted basis (non-GAAP), consolidated EBITDA margin increased 260 basis points in 2013 compared with 2012, to 34.9 percent. This was Verizon's highest adjusted full-year consolidated EBITDA margin (non-GAAP) in eight years. * Cash flow from operating activities totaled $38.8 billion in 2013, a 23.3 percent increase compared with 2012. Capital expenditures totaled $16.6 billion in 2013, compared with $16.2 billion in 2012. Verizon estimates investments in the range of $16.5 billion to $17 billion for capital expenditures in 2014, with a continued decrease in capital spending as a percentage of total revenues. * Free cash flow (non-GAAP, cash flow from operations less capital expenditures) totaled $22.2 billion in 2013, an increase of 45.1 percent, or $6.9 billion, compared with 2012. From this $22.2 billion, Verizon returned $5.9 billion in dividends to shareholders, including a seventh consecutive year of a quarterly dividend increase. * Verizon estimates its cash contributions in 2014 for pension funding requirements will be $1.2 billion. Verizon Wireless Delivers Strong Customer Additions, Revenue Growth and Profitability In fourth-quarter 2013, Verizon Wireless delivered strong growth in retail netconnections and service revenues, an increase in smartphone penetration, andcontinued low retail postpaid churn. Wireless Financial Highlights * Total revenues were $21.1 billion in fourth-quarter 2013, up 5.7 percent year over year. Service revenues in the quarter totaled $17.7 billion, up 8.0 percent year over year - marking the fifth consecutive quarter of at least 8 percent growth. Retail service revenues grew 7.5 percent year over year, to $17.0 billion. * For full-year 2013, total revenues were $81.0 billion, up 6.8 percent over 2012, and service revenues were $69.0 billion in 2013, up 8.3 percent year over year. * Retail postpaid ARPA (average revenue per account) grew 7.1 percent over fourth-quarter 2012, to $157.21 per month. * In fourth-quarter 2013, wireless operating income margin was 29.5 percent, and segment EBITDA margin on service revenues (non-GAAP) was 47.0 percent, up 560 basis points from fourth-quarter 2012. For full-year 2013, operating income margin was 32.1 percent, up 340 basis points from 2012; segment EBITDA margin was 49.5 percent, up 290 basis points year over year. Wireless Operational Highlights * Verizon Wireless added 1.7 million retail net connections in the fourth quarter, including 1.6 million retail postpaid net connections. The company added 4.1 million net retail postpaid connections in 2013. These additions exclude acquisitions and adjustments. * At the end of 2013, the company had 102.8 million retail connections, a 4.7 percent increase year over year - including 96.8 million retail postpaid connections. * Verizon Wireless had 35.1 million retail postpaid accounts at the end of the fourth quarter and an average of 2.8 connections per account, up 4.5 percent year over year. * At year-end 2013, smartphones accounted for 70 percent of the Verizon Wireless retail postpaid customer phone base, up from 67 percent at the end of third-quarter 2013. * Retail postpaid churn was 0.96 percent in fourth-quarter 2013, up 1 basis point year over year and down 1 basis point from third-quarter 2013. Total retail churn was 1.27 percent in fourth-quarter 2013, up 3 basis points year over year. * Verizon Wireless has substantially completed deployment of its 4G LTE network, covering more than 99 percent of its current 3G network footprint. The Verizon Wireless 4G LTE network is now available to 97 percent of the U.S. population in more than 500 markets covering nearly 305 million people, including those in areas served by the company's LTE in Rural America partners. * The company continued to enhance its 4G LTE smartphone lineup. In the fourth quarter, Verizon Wireless launched the Nokia Lumia 2520, the Samsung S4 mini and Galaxy III mini, the HTC One Max and the BlackBerry Z30. The company also launched the Verizon Ellipsis Jetpack and Verizon Ellipsis 7 Tablet, and the Delphi Connect with 4G LTE, which offers vehicle diagnostics as well as a mobile hotspot for up to five connected devices. * In November, Verizon Wireless opened its first Destination Store at Mall of America in Minneapolis. The store, containing more than 9,000 square feet, features lifestyle zones that help customers discover the latest gadgets, devices and solutions. Wireline Highlighted by Strong Consumer Revenue Growth Verizon's wireline segment reported continued strong results for consumerservices, where year-over-year quarterly revenues now have grown by more than 4percent for six consecutive quarters - a growth rate the company considerssustainable. In enterprise and wholesale markets, sales of global enterprisestrategic services continued to increase and constitute a larger percentage ofthe revenue base. Wireline Financial Highlights * In fourth-quarter 2013, consumer revenues were $3.8 billion, an increase of 6.4 percent compared with fourth-quarter 2012. Consumer ARPU for wireline services increased to $117.06 in fourth-quarter 2013, up 10.8 percent compared with fourth-quarter 2012. * Representing 73 percent of total consumer revenues, FiOS consumer revenues grew 14.9 percent, to nearly $2.8 billion, in fourth-quarter 2013, compared with fourth-quarter 2012. Total FiOS revenues grew 15.6 percent over the same period. * Wireline operating income margin was 1.0 percent for 2013, up from 0.2 percent for 2012. Segment EBITDA margin (non-GAAP) was 22.2 percent for 2013, flat compared with 22.1 percent when excluding storm impacts for 2012. Verizon expects the wireline segment EBITDA margin to increase in 2014. * Sales of strategic services to global enterprise customers increased 2.3 percent compared with fourth-quarter 2012 and represented 59 percent of total enterprise revenues. Strategic services include cloud and data center services, security and IT solutions, advanced communications, strategic networking and telematics services. Wireline Operational Highlights * In fourth-quarter 2013, Verizon added 126,000 net new FiOS Internet connections and 92,000 net new FiOS Video connections. Verizon had a total of 6.1 million FiOS Internet and 5.3 million FiOS Video connections at year-end 2013, representing year-over-year increases of 11.9 percent and 11.3 percent, respectively. * FiOS penetration (subscribers as a percentage of potential subscribers) continued to increase. FiOS Internet penetration was 39.5 percent at the end of fourth-quarter 2013, compared with 37.3 percent at the end of fourth-quarter 2012. In the same periods, FiOS Video penetration was 35.0 percent, compared with 33.3 percent. The FiOS network passed 18.6 million premises by year-end 2013. * By the end of fourth-quarter 2013, 46 percent of consumer FiOS Internet customers subscribed to FiOS Quantum, which provides speeds ranging from 50 to 500 megabits per second, up from 41 percent at the end of third-quarter 2013. In fourth-quarter 2013, 55 percent of consumer FiOS Internet sales were for speeds of at least 50 megabits per second. * Broadband connections totaled more than 9.0 million at year-end 2013, a 2.5 percent year-over-year increase. Net broadband connections increased by 20,000 in fourth-quarter 2013, as FiOS Internet net additions more than offset a decline in DSL-based High Speed Internet connections. * Verizon has been replacing high-maintenance portions of its residential copper network with fiber optics to provide enhanced services and to reduce ongoing repair costs. In 2013, Verizon migrated 330,000 homes to fiber, exceeding the target of 300,000 migrations within FiOS markets. By year-end, Verizon had fewer than 1 million consumer customers served by copper in FiOS markets. * Verizon Enterprise Solutions began deploying innovative cloud, security, M2M (machine-to-machine) and other wireline and wireless business technology solutions for a variety of new clients around the globe in the quarter, including Autonet, CME Group, FrieslandCampina, Hyundai, Tesco, U.S. Department of Treasury, Internal Revenue Service, U.S. Department of Veterans Affairs, U.S. Agency for International Development, Defense Information Systems Agency and U.S. Department of the Interior. NOTE: See the accompanying schedules and www.verizon.com/investor forreconciliations to generally accepted accounting principles (GAAP) for non-GAAPfinancial measures cited in this document. Verizon Communications Inc. (NYSE, Nasdaq: VZ), headquartered in New York, is aglobal leader in delivering broadband and other wireless and wirelinecommunications services to consumer, business, government and wholesalecustomers. Verizon Wireless operates America's most reliable wireless network,with nearly 103 million retail connections nationwide. Verizon also providesconverged communications, information and entertainment services over America'smost advanced fiber-optic network, and delivers integrated business solutionsto customers in more than 150 countries. A Dow 30 company with more than $120billion in 2013 revenues, Verizon employs a diverse workforce of 176,800. Formore information, visit www.verizon.com. VERIZON'S ONLINE NEWS CENTER: Verizon news releases, executive speeches andbiographies, media contacts and other information are available at Verizon'sonline News Center at http://newscenter.verizon.com. The news releases areavailable through an RSS feed. To subscribe, visithttp://newscenter.verizon.com/corporate/feeds. Advertisement This communication is deemed an advertisement for the purposes of the U.K.prospectus rules and is not a prospectus or a prospectus equivalent document.Any decision to subscribe for, purchase, otherwise acquire, sell or otherwisedispose of any Verizon Communications Inc. shares must be made only on thebasis of the information contained in and incorporated by reference into theU.K. prospectus published by Verizon in connection with the proposedtransaction with Vodafone Group Plc. Copies of the U.K. prospectus areavailable from Verizon's registered offices and on Verizon's website atwww.verizon.com/investor/shareownersservices. Forward-Looking Statements In this communication we have made forward-looking statements. These statementsare based on our estimates and assumptions and are subject to risks anduncertainties. Forward-looking statements include the information concerningour possible or assumed future results of operations. Forward-lookingstatements 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 statementscontained in the Private Securities Litigation Reform Act of 1995. Thefollowing important factors, along with those discussed in our filings with theSecurities and Exchange Commission (the "SEC"), could affect future results andcould cause those results to differ materially from those expressed in theforward-looking statements: the ability to realize the expected benefits of ourproposed transaction with Vodafone in the timeframe expected or at all; theability to complete the Vodafone transaction in the timeframe expected or atall and the costs that could be required to do so; failure to obtain applicableregulatory or shareholder approvals in connection with the Vodafone transactionin a timely manner or at all; failure to satisfy other closing conditions tothe Vodafone transaction or events giving rise to termination of thetransaction agreement; an adverse change in the ratings afforded our debtsecurities by nationally accredited ratings organizations or adverse conditionsin the credit markets affecting the cost, including interest rates, and/oravailability of further financing; significantly increased levels ofindebtedness as a result of the Vodafone transaction; changes in tax laws ortreaties, or in their interpretation; adverse conditions in the U.S. andinternational economies; material adverse changes in labor matters, includinglabor negotiations, and any resulting financial and/or operational impact;material changes in technology or technology substitution; disruption of ourkey suppliers' provisioning of products or services; changes in the regulatoryenvironment in which we operate, including any increase in restrictions on ourability to operate our networks; breaches of network or information technologysecurity, natural disasters, terrorist attacks or acts of war or significantlitigation and any resulting financial impact not covered by insurance; theeffects of competition in the markets in which we operate; changes inaccounting assumptions that regulatory agencies, including the SEC, may requireor that result from changes in the accounting rules or their application, whichcould result in an impact on earnings; significant increases in benefit plancosts or lower investment returns on plan assets; and the inability toimplement our business strategies. No Offer or Solicitation This communication does not constitute an offer to sell or the solicitation ofan offer to buy any securities or a solicitation of any vote or approval norshall there be any offer or sale of securities in any jurisdiction in whichsuch offer, solicitation or sale would be unlawful prior to registration orqualification under the securities laws of any such jurisdiction. No offer ofsecurities shall be made except by means of a prospectus meeting therequirements of Section 10 of the Securities Act of 1933, as amended, orpursuant to an exemption from the registration requirements thereof. Additional Information and Where to Find It Verizon Communications Inc. has filed with the SEC a registration statement onForm S-4 containing a prospectus with respect to the Verizon securities to beoffered in the proposed transaction with Vodafone (the "prospectus"). Verizonalso filed with the SEC a proxy statement with respect to the special meetingof the Verizon shareholders to be held in connection with the proposedtransaction (the "proxy statement"). The registration statement on Form S-4 wasdeclared effective by the SEC on December 10, 2013. Verizon mailed theprospectus to certain Vodafone shareholders and the proxy statement to Verizonshareholders on or about December 11, 2013. VODAFONE SHAREHOLDERS ARE URGED TOREAD CAREFULLY THE PROSPECTUS AND VERIZON SHAREHOLDERS ARE URGED TO READCAREFULLY THE PROXY STATEMENT, EACH TOGETHER WITH OTHER RELEVANT DOCUMENTSFILED OR TO BE FILED WITH THE SEC, IN THEIR ENTIRETY BECAUSE THEY CONTAIN ORWILL CONTAIN IMPORTANT INFORMATION ABOUT THE PROPOSED TRANSACTION AND RELATEDMATTERS. Investors and shareholders can obtain free copies of the prospectus,the proxy statement and other documents filed with the SEC by the partiesthrough the website maintained by the SEC at www.sec.gov. In addition,investors and shareholders can obtain free copies of the prospectus, the proxystatement and other documents filed with the SEC by Verizon by contactingVerizon's Assistant Corporate Secretary, Verizon Communications Inc., 140 WestStreet, 29th Floor, New York, New York 10007. These materials are alsoavailable on Verizon's website at www.verizon.com/investor. Verizon Communications Inc.Condensed Consolidated Statements of Income (dollars in millions, except per share amounts) 3 Mos. Ended 3 Mos. EndedUnaudited 12/31/13 12/31/12 % Change Operating Revenues $ 31,065 $ 30,045 3.4 Operating Expenses Cost of services and sales 11,962 13,069 (8.5) Selling, general and administrative expense 2,857 16,008 (82.2) Depreciation and amortization expense 4,183 4,137 1.1Total Operating Expenses 19,002 33,214 (42.8) Operating Income (Loss) 12,063 (3,169) *Equity in earnings of unconsolidated businesses 8 87 (90.8)Other income and (expense), net (250) (1,079) (76.8)Interest expense (1,061) (575) 84.5Income (Loss) Before (Provision) Benefit for Income Taxes 10,760 (4,736) *(Provision) Benefit for income taxes (2,844) 2,810 *Net Income (Loss) $ 7,916 $ (1,926) * Net income attributable to noncontrolling interests $ 2,849 $ 2,303 23.7Net income (loss) attributable to Verizon 5,067 (4,229) *Net Income (Loss) $ 7,916 $ (1,926) * Basic Earnings (Loss) per Common ShareNet income (loss) attributable to Verizon $ 1.77 $ (1.48) * Weighted average number of common shares (in millions) 2,867 2,862 Diluted Earnings (Loss) per Common Share (1)Net income (loss) attributable to Verizon $ 1.76 $ (1.48) * Weighted average number of common shares-assuming dilution (in millions) 2,875 2,862 (dollars in millions, except per share amounts) 12 Mos. Ended 12 Mos. EndedUnaudited 12/31/13 12/31/12 % Change Operating Revenues $ 120,550 $ 115,846 4.1 Operating Expenses Cost of services and sales 44,887 46,275 (3.0) Selling, general and administrative expense 27,089 39,951 (32.2) Depreciation and amortization expense 16,606 16,460 0.9Total Operating Expenses 88,582 102,686 (13.7) Operating Income (Loss) 31,968 13,160 *Equity in earnings of unconsolidated businesses 142 324 (56.2)Other income and (expense), net (166) (1,016) (83.7)Interest expense (2,667) (2,571) 3.7Income (Loss) Before (Provision) Benefit for Income Taxes 29,277 9,897 *(Provision) Benefit for income taxes (5,730) 660 *Net Income (Loss) $ 23,547 $ 10,557 * Net income attributable to noncontrolling interests $ 12,050 $ 9,682 24.5Net income (loss) attributable to Verizon 11,497 875 *Net Income (Loss) $ 23,547 $ 10,557 * Basic Earnings (Loss) per Common ShareNet income (loss) attributable to Verizon $ 4.01 $ .31 * Weighted average number of common shares (in millions) 2,866 2,853 Diluted Earnings (Loss) per Common Share (1)Net income (loss) attributable to Verizon $ 4.00 $ .31 * Weighted average number of common shares-assuming dilution (in millions) 2,874 2,862 Footnotes: (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. Certain reclassifications have been made, where appropriate, to reflect comparable operating results. * Not meaningful Verizon Communications Inc.Condensed Consolidated Balance Sheets (dollars in millions) Unaudited 12/31/13 12/31/12 $ ChangeAssets Current assets Cash and cash equivalents $ 53,528 $ 3,093 $ 50,435 Short-term investments 601 470 131 Accounts receivable, net 12,439 12,576 (137) Inventories 1,020 1,075 (55) Prepaid expenses and other 3,406 4,021 (615)Total current assets 70,994 21,235 49,759Plant, property and equipment 220,865 209,575 11,290 Less accumulated depreciation 131,909 120,933 10,976 88,956 88,642 314 Investments in unconsolidated businesses 3,432 3,401 31 Wireless licenses 75,747 77,744 (1,997) Goodwill 24,634 24,139 495 Other intangible assets, net 5,800 5,933 (133) Other assets 4,535 4,128 407Total Assets $ 274,098 $ 225,222 $ 48,876 Liabilities and Equity Current liabilities Debt maturing within one year $ 3,933 $ 4,369 $ (436) Accounts payable and accrued liabilities 16,453 16,182 271 Other 6,664 6,405 259 Total current liabilities 27,050 26,956 94 Long-term debt 89,658 47,618 42,040 Employee benefit obligations 27,682 34,346 (6,664) Deferred income taxes 28,639 24,677 3,962 Other liabilities 5,653 6,092 (439) Equity Common stock 297 297 - Contributed capital 37,939 37,990 (51) Reinvested earnings (Accumulated deficit) 1,782 (3,734) 5,516 Accumulated other comprehensive income 2,358 2,235 123 Common stock in treasury, at cost (3,961) (4,071) 110 Deferred compensation - employee stock ownership plans and other 421 440 (19) Noncontrolling interests 56,580 52,376 4,204Total equity 95,416 85,533 9,883Total Liabilities and Equity $ 274,098 $ 225,222 $ 48,876 Verizon - Selected Financial and Operating Statistics Unaudited 12/31/13 12/31/12 Total debt (in millions) $ 93,591 $ 51,987Net debt (in millions) $ 40,063 $ 48,894Net debt / Adjusted EBITDA (1) 1.0x 1.3xCommon shares outstandingend of period (in millions) 2,862 2,859Total employees 176,800 183,400Quarterly cash dividendsdeclared per common share $ 0.530 $ 0.515 Footnotes: (1) Adjusted EBITDA excludes the effects of non-operational items. The unaudited condensed consolidated balance sheets are based on preliminary information. Verizon Communications Inc.Condensed Consolidated Statements of Cash Flows (dollars in millions) 12 Mos. Ended 12 Mos. EndedUnaudited 12/31/13 12/31/12 $ ChangeCash Flows From Operating ActivitiesNet Income $ 23,547 $ 10,557 $ 12,990Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization expense 16,606 16,460 146 Employee retirement benefits (5,052) 8,198 (13,250) Deferred income taxes 5,785 (952) 6,737 Provision for uncollectible accounts 993 972 21 Equity in earnings of unconsolidated businesses, net of dividends received (102) 77 (179) Changes in current assets and liabilities, net of effects from acquisition/disposition of businesses (5) (403) 398Other, net (2,954) (3,423) 469Net cash provided by operating activities 38,818 31,486 7,332 Cash Flows From Investing ActivitiesCapital expenditures (including capitalized software) (16,604) (16,175) (429)Acquisitions of investments and businesses, net of cash acquired (494) (913) 419Acquisitions of wireless licenses (580) (3,935) 3,355Proceeds from dispositions of wireless licenses 2,111 - 2,111Net change in short-term investments 63 27 36Other, net 671 494 177Net cash used in investing activities (14,833) (20,502) 5,669 Cash Flows From Financing ActivitiesProceeds from long-term borrowings 49,166 4,489 44,677Repayments of long-term borrowings and capital (8,163) (6,403) (1,760) lease obligationsDecrease in short-term obligations, excluding current maturities (142) (1,437) 1,295Dividends paid (5,936) (5,230) (706)Proceeds from sale of common stock 85 315 (230)Purchase of common stock for treasury (153) - (153)Special distribution to noncontrolling interests (3,150) (8,325) 5,175Other, net (5,257) (4,662) (595)Net cash provided by (used in) financing activities 26,450 (21,253) 47,703 Increase (decrease) in cash and cash equivalents 50,435 (10,269) 60,704Cash and cash equivalents, beginning of period 3,093 13,362 (10,269)Cash and cash equivalents, end of period $ 53,528 $ 3,093 $ 50,435 Verizon Communications Inc.Wireless - Selected Financial Results (dollars in millions) 3 Mos. Ended 3 Mos. EndedUnaudited 12/31/13 12/31/12 % Change Operating Revenues Retail service $ 16,967 $ 15,786 7.5 Other service 744 607 22.6Service 17,711 16,393 8.0 Equipment 2,421 2,559 (5.4) Other 993 1,042 (4.7)Total Operating Revenues 21,125 19,994 5.7 Operating Expenses Cost of services and sales 6,546 7,332 (10.7)Selling, general and administrative expense 6,261 5,877 6.5 Depreciation and amortization expense 2,089 1,994 4.8Total Operating Expenses 14,896 15,203 (2.0) Operating Income $ 6,229 $ 4,791 30.0Operating Income Margin 29.5% 24.0% Segment EBITDA $ 8,318 $ 6,785 22.6Segment EBITDA Service Margin 47.0% 41.4% (dollars in millions) 12 Mos. Ended 12 Mos. EndedUnaudited 12/31/13 12/31/12 % Change Operating Revenues Retail service $ 66,334 $ 61,440 8.0 Other service 2,699 2,293 17.7Service 69,033 63,733 8.3 Equipment 8,111 8,023 1.1 Other 3,879 4,112 (5.7)Total Operating Revenues 81,023 75,868 6.8 Operating Expenses Cost of services and sales 23,648 24,490 (3.4) Selling, general and administrative expense 23,176 21,650 7.0 Depreciation and amortization expense 8,202 7,960 3.0Total Operating Expenses 55,026 54,100 1.7 Operating Income $ 25,997 $ 21,768 19.4Operating Income Margin 32.1% 28.7% Segment EBITDA $ 34,199 $ 29,728 15.0Segment EBITDA Service Margin 49.5% 46.6% 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. Certain reclassifications have been made, where appropriate, to reflect comparable operating results. Verizon Communications Inc.Wireless - Selected Operating Statistics Unaudited 12/31/13 12/31/12 % Change Connections ('000) Retail postpaid 96,752 92,530 4.6 Retail prepaid 6,047 5,700 6.1Retail 102,799 98,230 4.7 3 Mos. Ended 3 Mos. Ended 12 Mos. Ended 12 Mos. EndedUnaudited 12/31/13 12/31/12 % Change 12/31/13 12/31/12 % Change Net Add Detail ('000)(1) Retail postpaid 1,573 2,100 (25.1) 4,118 5,024 (18.0) Retail prepaid 80 142 (43.7) 354 893 (60.4)Retail 1,653 2,242 (26.3) 4,472 5,917 (24.4) Account Statistics Retail Postpaid Accounts ('000)(2) 35,083 35,057 0.1 Retail postpaid ARPA $ 157.21 $ 146.80 7.1 $ 153.93 $ 144.04 6.9 Retail postpaid connections per account (2) 2.76 2.64 4.5 Churn Detail Retail postpaid 0.96% 0.95% 0.97% 0.91% Retail 1.27% 1.24% 1.27% 1.19% Retail Postpaid Connection Statistics Total Smartphone postpaid % of phones activated 88.9% 85.4% 85.7% 77.1% Total Smartphone postpaid phone base (2) 70.0% 58.1% Total Internet postpaid base (2) 10.7% 9.3% Other Operating Statistics Capital expenditures (in millions) $ 2,705 $ 2,791 (3.1) $ 9,425 $ 8,857 6.4 Footnotes: (1) Connection net additions exclude acquisitions and adjustments. (2) Statistics presented as of end of period. 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. Certain reclassifications have been made, where appropriate, to reflect comparable operating results. Verizon Communications Inc.Wireline - Selected Financial Results (dollars in millions) 3 Mos. Ended 3 Mos. Ended 12 Mos. Ended 12 Mos. EndedUnaudited 12/31/13 12/31/12 % Change 12/31/13 12/31/12 % Change Operating Revenues Consumer retail $ 3,796 $ 3,569 6.4 $ 14,737 $ 14,043 4.9 Small business 642 660 (2.7) 2,591 2,659 (2.6)Mass Markets 4,438 4,229 4.9 17,328 16,702 3.7 Strategic services 2,139 2,090 2.3 8,420 8,052 4.6 Core 1,507 1,756 (14.2) 6,283 7,247 (13.3)Global Enterprise 3,646 3,846 (5.2) 14,703 15,299 (3.9) Global Wholesale 1,632 1,770 (7.8) 6,714 7,240 (7.3) Other 129 145 (11.0) 478 539 (11.3)Total Operating Revenues 9,845 9,990 (1.5) 39,223 39,780 (1.4) Operating Expenses Cost of services and sales 5,581 5,878 (5.1) 21,928 22,413 (2.2) Selling, general and administrative expense 2,060 2,313 (10.9) 8,595 8,883 (3.2) Depreciation and amortization expense 2,073 2,125 (2.4) 8,327 8,424 (1.2)Total Operating Expenses 9,714 10,316 (5.8) 38,850 39,720 (2.2) Operating Income (Loss) $ 131 $ (326) * $ 373 $ 60 *Operating Income Margin 1.3% (3.3)% 1.0% 0.2% Segment EBITDA $ 2,204 $ 1,799 22.5 $ 8,700 $ 8,484 2.5Segment EBITDA Margin 22.4% 18.0% 22.2% 21.3% 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. Certain reclassifications have been made, where appropriate, to reflect comparable operating results. * Not meaningful Verizon Communications Inc.Wireline - Selected Operating Statistics Unaudited 12/31/13 12/31/12 % Change Connections ('000) FiOS Video Subscribers 5,262 4,726 11.3 FiOS Internet Subscribers 6,072 5,424 11.9 FiOS Digital Voice residence connections 4,248 3,227 31.6FiOS Digital connections 15,582 13,377 16.5 HSI 2,943 3,371 (12.7)Total Broadband connections 9,015 8,795 2.5 Primary residence switched access connections 6,481 7,982 (18.8)Primary residence connections 10,729 11,209 (4.3) Total retail residence voiceconnections 11,229 11,849 (5.2)Total voice connections 21,085 22,503 (6.3) 3 Mos. Ended 3 Mos. Ended 12 Mos. Ended 12 Mos. EndedUnaudited 12/31/13 12/31/12 % Change 12/31/13 12/31/12 % Change Net Add Detail ('000) FiOS Video Subscribers 92 134 (31.3) 536 553 (3.1) FiOS Internet Subscribers 126 144 (12.5) 648 607 6.8 FiOS Digital Voice residence connections 179 289 (38.1) 1,021 1,343 (24.0) FiOS Digital connections 397 567 (30.0) 2,205 2,503 (11.9) HSI (106) (117) (9.4) (428) (482) (11.2)Total Broadband connections 20 27 (25.9) 220 125 76.0 Primary residence switched access connections (340) (402) (15.4) (1,501) (1,924) (22.0)Primary residence connections (161) (113) 42.5 (480) (581) (17.4) Total retail residence voiceconnections (192) (156) 23.1 (620) (777) (20.2)Total voice connections (372) (344) 8.1 (1,418) (1,634) (13.2) Revenue and ARPU Statistics Consumer ARPU $ 117.06 $ 105.63 10.8 $ 111.96 $ 101.77 10.0 FiOS revenues (in millions) $ 2,965 $ 2,565 15.6 $ 11,152 $ 9,722 14.7 Strategic services as a % of total Enterprise revenues 58.7% 54.3% 57.3% 52.6% Other Operating Statistics Capital expenditures (in millions) $ 1,762 $ 1,725 2.1 $ 6,229 $ 6,342 (1.8) Wireline employees ('000) 81.9 86.4 FiOS Video Open for Sale ('000) 15,022 14,200 FiOS Video penetration 35.0% 33.3% FiOS Internet Open for Sale ('000) 15,368 14,528 FiOS Internet penetration 39.5% 37.3% 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. Certain reclassifications have been made, where appropriate, to reflect comparable operating results. SOURCE Verizon Communications Inc. CONTACT: Bob Varettoni, 908-559-6388, [email protected]; or Ray McConville, 908-559-3504,[email protected]