Equity and Comprehensive Income

6 Months Ended

Jun. 30, 2011

Equity and Comprehensive Income

Equity and Comprehensive Income

8. Equity and Comprehensive Income

Equity

Changes in the components of Total equity were as follows:

	Six Months Ended June 30, 2011
(dollars in millions)	Attributable to Verizon			Noncontrolling Interest			Total Equity
Balance at beginning of period	$	38,569		$	48,343		$	86,912
Net income		3,048			3,820			6,868
Other comprehensive income (loss)		305			(4	)		301
Comprehensive income		3,353			3,816			7,169
Contributed capital		(8	)		–			(8	)
Dividends declared		(2,760	)		–			(2,760	)
Common stock in treasury		135			–			135
Distributions and other		59			(795	)		(736	)
Balance at end of period	$	39,348		$	51,364		$	90,712

Noncontrolling interests included in our condensed consolidated financial statements primarily consist of Vodafone Group Plc's 45% ownership interest in Verizon Wireless. On July 28, 2011, the Board of Representatives of Verizon Wireless declared a distribution to its owners, payable on January 31, 2012 in proportion to their partnership interests on that date, in the aggregate amount of $10 billion. As a result, based on current ownership interests in Verizon Wireless, we will receive a cash payment of $5.5 billion and Vodafone Group Plc will receive a cash payment of $4.5 billion on the distribution date.

Comprehensive Income

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 June 30,						Six Months Ended June 30,
(dollars in millions)	2011			2010			2011			2010
Net Income	$	3,604		$	553		$	6,868		$	2,871
Other comprehensive income (loss), net of taxes
Foreign currency translation adjustments		60			(257	)		274			(451	)
Net unrealized gain (loss) on cash flow hedges		(3	)		(25	)		28			(22	)
Net unrealized loss on marketable securities		(2	)		(35	)		(2	)		(19	)
Defined benefit pension and postretirement plans (Note 7)		6			212			5			369
Other comprehensive income (loss) attributable to Verizon		61			(105	)		305			(123	)
Other comprehensive loss attributable to noncontrolling interest		(2	)		(36	)		(4	)		(32	)
Total Comprehensive Income	$	3,663		$	412		$	7,169		$	2,716
Comprehensive income attributable to noncontrolling interest	$	1,993		$	1,709		$	3,816		$	3,588
Comprehensive income (loss) attributable to Verizon		1,670			(1,297	)		3,353			(872	)
Total Comprehensive Income	$	3,663		$	412		$	7,169		$	2,716

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

Foreign Currency Translation Adjustments

The change in Foreign currency translation adjustments for the three and six months ended June 30, 2011 was primarily driven by the devaluation of the U.S. dollar against the Euro. The change in Foreign currency translation adjustments for the three and six months ended June 30, 2010 was primarily driven by the strengthening of the U.S. dollar against the Euro.

Unrealized Loss on Marketable Securities

Gross unrealized gains and losses on marketable securities for the three and six months ended June 30, 2011 and 2010 were not significant.

The components of Accumulated other comprehensive income were as follows:

(dollars in millions)	At June 30, 2011		At December 31, 2010
Foreign currency translation adjustments	$	1,117	$	843
Net unrealized gain on cash flow hedges		154		126
Unrealized gain on marketable securities		77		79
Defined benefit pension and postretirement plans		6		1
Accumulated Other Comprehensive Income	$	1,354	$	1,049