Verizon to Acquire AOL

Verizon to Acquire AOL Deal Creates Unique and Scaled Digital Media Platforms for Consumers,Advertisers and Partners NEW YORK, May 12, 2015 -- Taking another significant step inbuilding digital and video platforms to drive future growth, VerizonCommunications Inc. (NYSE, Nasdaq: VZ) today announced the signing of anagreement to purchase AOL Inc. (NYSE: AOL) for $50 per share -- an estimatedtotal value of approximately $4.4 billion. Verizon's acquisition further drives its LTE wireless video and OTT(over-the-top video) strategy. The agreement will also support and connect toVerizon's IoT (Internet of Things) platforms, creating a growth platform fromwireless to IoT for consumers and businesses. AOL is a leader in the digital content and advertising platforms space, and thecombination of Verizon and AOL creates a scaled, mobile-first platform offeringdirectly targeted at what eMarketer estimates is a nearly $600 billion globaladvertising industry. AOL's key assets include its subscription business; itspremium portfolio of global content brands, including The Huffington Post,TechCrunch, Engadget, MAKERS and AOL.com, as well as its millennial-focusedOTT, Emmy-nominated original video content; and its programmatic advertisingplatforms. Lowell McAdam, Verizon chairman and CEO, said: "Verizon's vision is to providecustomers with a premium digital experience based on a global multiscreennetwork platform. This acquisition supports our strategy to provide across-screen connection for consumers, creators and advertisers to deliver thatpremium customer experience." He added, "AOL has once again become a digital trailblazer, and we are excitedat the prospect of charting a new course together in the digitally connectedworld. At Verizon, we've been strategically investing in emerging technology,including Verizon Digital Media Services and OTT, that taps into the marketshift to digital content and advertising. AOL's advertising model aligns withthis approach, and the advertising platform provides a key tool for us todevelop future revenue streams." Tim Armstrong, AOL chairman and CEO, will continue to lead AOL operations afterclosing. Armstrong said, "Verizon is a leader in mobile and OTT connected platforms, andthe combination of Verizon and AOL creates a unique and scaled mobile and OTTmedia platform for creators, consumers and advertisers. The visions of Verizonand AOL are shared; the companies have existing successful partnerships, and weare excited to work with the team at Verizon to create the next generation ofmedia through mobile and video." The transaction will take the form of a tender offer followed by a merger, withAOL becoming a wholly owned subsidiary of Verizon upon completion. The transaction is subject to customary regulatory approvals and closingconditions and is expected to close this summer. Verizon expects to fund the transaction from cash on hand and commercial paper.The company also continues to expect to return to pre-Vodafone transactioncredit ratings in the 2018-2019 timeframe. Transaction advisers for Verizon were LionTree Advisors; Guggenheim Partners;and Weil, Gotshal & Manges. AOL advisers were Allen & Company LLC and Wachtell,Lipton, Rosen & Katz. 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 108.6 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 worldwide. A Dow 30 company with more than $127 billion in 2014revenues, Verizon employs a diverse workforce of 176,200. For more information,visit www.verizon.com/news/. VERIZON'S ONLINE NEWS CENTER: Verizon news releases, executive speeches andbiographies, media contacts and other information are available at Verizon'sonline News Center at www.verizon.com/news/. The news releases are availablethrough an RSS feed. To subscribe, visit www.verizon.com/about/rss-feeds/. 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: adverse conditions in the U.S. and internationaleconomies; the effects of competition in the markets in which we operate;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; ourhigh level of indebtedness; 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; material adverse changes in labor matters,including labor negotiations, and any resulting financial and/or operationalimpact; significant increases in benefit plan costs or lower investment returnson plan assets; changes in tax laws or treaties, or in their interpretation;changes in accounting assumptions that regulatory agencies, including the SEC,may require or that result from changes in the accounting rules or theirapplication, which could result in an impact on earnings; and the inability toimplement our business strategies. Additional Information and Where to Find It The tender offer for the outstanding shares of AOL Inc. ("AOL") has not yetcommenced. This communication is for informational purposes only and isneither an offer to purchase nor a solicitation of an offer to sell shares ofAOL, nor is it a substitute for the tender offer materials that VerizonCommunications Inc. ("Verizon") and its acquisition subsidiary will file withthe U.S. Securities and Exchange Commission (the "SEC") upon commencement ofthe tender offer. At the time the tender offer is commenced, Verizon and itsacquisition subsidiary will file tender offer materials on Schedule TO, and AOLwill file a Solicitation/Recommendation Statement on Schedule 14D-9 with theSEC with respect to the tender offer. The tender offer materials (including anOffer to Purchase, a related Letter of Transmittal and certain other tenderoffer documents) and the Solicitation/Recommendation Statement will containimportant information. Holders of shares of AOL are urged to read thesedocuments when they become available because they will contain importantinformation that holders of AOL securities should consider before making anydecision regarding tendering their securities. The Offer to Purchase, therelated Letter of Transmittal and certain other tender offer documents, as wellas the Solicitation/Recommendation Statement, will be made available to allholders of shares of AOL at no expense to them. The tender offer materials andthe Solicitation/Recommendation Statement will be made available for free atthe SEC's website at www.sec.gov. Additional copies may be obtained for freeat Verizon's website at www.verizon.com/about/investors or by contactingVerizon Investor Relations, Verizon Communications Inc., One Verizon Way,Basking Ridge, NJ 07920. SOURCE Verizon Communications Inc. CONTACT: Jim Gerace, Verizon, 212-395-2355, james.gerace@verizon.com; EoinRyan, AOL, 212-206-5025, eoin.ryan@teamaol.com; Bob Varettoni,Verizon, 908-559-6388, robert.a.varettoni@verizon.com