10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark one)
x	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
	OF THE SECURITIES EXCHANGE ACT OF 1934
	For the quarterly period ended March 31, 2014
	OR
¨	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
	OF THE SECURITIES EXCHANGE ACT OF 1934
	For the transition period from              to

Commission file number: 1-8606

Verizon Communications Inc.

(Exact name of registrant as specified in its charter)

Delaware	23-2259884
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)
140 West Street New York, New York	10007
(Address of principal executive offices)	(Zip Code)

Registrant’s telephone number, including area code: (212) 395-1000

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.

Large accelerated filer	x	Accelerated filer	¨
Non-accelerated filer	¨  (Do not check if a smaller reporting company)	Smaller reporting company	¨

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 March 31, 2014, 4,141,148,976 shares of the registrant’s common stock were outstanding, after deducting 101,225,264 shares held in treasury.

Table of Contents

		Page
PART I – FINANCIAL INFORMATION
Item 1.	Financial Statements (Unaudited)
	Condensed Consolidated Statements of Income Three months ended March 31, 2014 and 2013		2
	Condensed Consolidated Statements of Comprehensive Income Three months ended March 31, 2014 and 2013		3
	Condensed Consolidated Balance Sheets At March 31, 2014 and December 31, 2013		4
	Condensed Consolidated Statements of Cash Flows Three months ended March 31, 2014 and 2013		5
	Notes to Condensed Consolidated Financial Statements		6
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations		20
Item 3.	Quantitative and Qualitative Disclosures About Market Risk		43
Item 4.	Controls and Procedures		43
PART II – OTHER INFORMATION
Item 1.	Legal Proceedings		43
Item 1A.	Risk Factors		43
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds		44
Item 6.	Exhibits		45
Signature			46
Certifications

Part I – Financial Information

Item 1. Financial Statements

Condensed Consolidated Statements of Income

Verizon Communications Inc. and Subsidiaries

	Three Months Ended March 31,
(dollars in millions, except per share amounts) (unaudited)	2014			2013
Operating Revenues	$	30,818		$	29,420
Operating Expenses
Cost of services and sales (exclusive of items shown below)		11,189			10,932
Selling, general and administrative expense		8,332			8,148
Depreciation and amortization expense		4,137			4,118
Total Operating Expenses		23,658			23,198
Operating Income		7,160			6,222
Equity in earnings of unconsolidated businesses		1,902			(5	)
Other income and (expense), net		(894	)		39
Interest expense		(1,214	)		(537	)
Income Before Provision For Income Taxes		6,954			5,719
Provision for income taxes		(968	)		(864	)
Net Income	$	5,986		$	4,855
Net income attributable to noncontrolling interests	$	2,039		$	2,903
Net income attributable to Verizon		3,947			1,952
Net Income	$	5,986		$	4,855
Basic Earnings Per Common Share
Net income attributable to Verizon	$	1.15		$	.68
Weighted-average shares outstanding (in millions)		3,425			2,866
Diluted Earnings Per Common Share
Net income attributable to Verizon	$	1.15		$	.68
Weighted-average shares outstanding (in millions)		3,430			2,872
Dividends declared per common share	$	0.530		$	0.515

See Notes to Condensed Consolidated Financial Statements

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Condensed Consolidated Statements of Comprehensive Income

Verizon Communications Inc. and Subsidiaries

	Three Months Ended March 31,
(dollars in millions) (unaudited)	2014			2013
Net Income	$	5,986		$	4,855
Other comprehensive loss, net of taxes
Foreign currency translation adjustments		(949	)		(148	)
Unrealized loss on cash flow hedges		(83	)		(6	)
Unrealized gain on marketable securities		1			11
Defined benefit pension and postretirement plans		(37	)		(36	)
Other comprehensive loss attributable to Verizon		(1,068	)		(179	)
Other comprehensive loss attributable to noncontrolling interests		(23	)		(12	)
Total Comprehensive Income	$	4,895		$	4,664
Comprehensive income attributable to noncontrolling interests	$	2,016		$	2,891
Comprehensive income attributable to Verizon		2,879			1,773
Total Comprehensive Income	$	4,895		$	4,664

See Notes to Condensed Consolidated Financial Statements

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Condensed Consolidated Balance Sheets

Verizon Communications Inc. and Subsidiaries

(dollars in millions, except per share amounts) (unaudited)	At March 31, 2014			At December 31, 2013
Assets
Current assets
Cash and cash equivalents	$	2,907		$	53,528
Short-term investments		637			601
Accounts receivable, net of allowances of $614 and $645		12,131			12,439
Inventories		881			1,020
Prepaid expenses and other		6,716			3,406
Total current assets		23,272			70,994
Plant, property and equipment		223,841			220,865
Less accumulated depreciation		134,785			131,909
		89,056			88,956
Investments in unconsolidated businesses		889			3,432
Wireless licenses		72,713			75,747
Goodwill		24,647			24,634
Other intangible assets, net		5,839			5,800
Other assets		5,146			4,535
Total assets	$	221,562		$	274,098
Liabilities and Equity
Current liabilities
Debt maturing within one year	$	2,152		$	3,933
Accounts payable and accrued liabilities		14,984			16,453
Other		8,217			6,664
Total current liabilities		25,353			27,050
Long-term debt		107,617			89,658
Employee benefit obligations		26,977			27,682
Deferred income taxes		41,597			28,639
Other liabilities		6,167			5,653
Equity
Series preferred stock ($.10 par value; none issued)		–			–
Common stock ($.10 par value; 4,242,374,240 and 2,967,610,119 shares issued in each period, respectively)		424			297
Contributed capital		10,976			37,939
Reinvested earnings		3,534			1,782
Accumulated other comprehensive income		1,290			2,358
Common stock in treasury, at cost		(3,794	)		(3,961	)
Deferred compensation – employee stock ownership plans and other		281			421
Noncontrolling interests		1,140			56,580
Total equity		13,851			95,416
Total liabilities and equity	$	221,562		$	274,098

See Notes to Condensed Consolidated Financial Statements

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Condensed Consolidated Statements of Cash Flows

Verizon Communications Inc. and Subsidiaries

	Three Months Ended March 31,
(dollars in millions) (unaudited)	2014			2013
Cash Flows from Operating Activities
Net Income	$	5,986		$	4,855
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization expense		4,137			4,118
Employee retirement benefits		281			295
Deferred income taxes		(155	)		878
Provision for uncollectible accounts		231			260
Equity in earnings of unconsolidated businesses, net of dividends received		(1,894	)		14
Changes in current assets and liabilities, net of effects from acquisition/disposition of businesses		(1,626	)		(1,491	)
Other, net		179			(1,398	)
Net cash provided by operating activities		7,139			7,531
Cash Flows from Investing Activities
Capital expenditures (including capitalized software)		(4,150	)		(3,602	)
Acquisitions of investments and businesses, net of cash acquired		(157	)		(21	)
Acquisitions of wireless licenses, net		(213	)		(117	)
Other, net		(11	)		141
Net cash used in investing activities		(4,531	)		(3,599	)
Cash Flows from Financing Activities
Proceeds from long-term borrowings		16,952			500
Repayments of long-term borrowings and capital lease obligations		(7,951	)		(73	)
Increase in short-term obligations, excluding current maturities		252			581
Dividends paid		(1,517	)		(1,472	)
Proceeds from sale of common stock		34			56
Purchase of common stock for treasury		–			(153	)
Acquisition of noncontrolling interest		(58,886	)		–
Other, net		(2,113	)		(989	)
Net cash used in financing activities		(53,229	)		(1,550	)
Increase (decrease) in cash and cash equivalents		(50,621	)		2,382
Cash and cash equivalents, beginning of period		53,528			3,093
Cash and cash equivalents, end of period	$	2,907		$	5,475

See Notes to Condensed Consolidated Financial Statements

5

Notes to Condensed Consolidated Financial Statements

Verizon Communications Inc. and Subsidiaries

(Unaudited)

1. Basis of Presentation

The accompanying unaudited condensed consolidated financial statements have been prepared based upon Securities and Exchange Commission 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, 2013. 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 certain prior year amounts to conform to the current year presentation. Effective January 1, 2014, we have also reclassified the results of certain businesses, such as development stage businesses that support our strategic initiatives, from our Wireline segment to Corporate, eliminations and other. The impact of this reclassification was not material to our condensed consolidated financial statements.

Recently Adopted Accounting Standards

During the first quarter of 2014, we adopted the accounting standard update relating to the presentation of an unrecognized tax benefit when a net operating loss carryforward, a similar tax loss, or a tax credit carryforward exists. The standard update provides that a liability related to an unrecognized tax benefit should be offset against same jurisdiction deferred tax assets for a net operating loss carryforward, a similar tax loss, or a tax credit carryforward if such settlement is required or expected in the event the uncertain tax position is disallowed. The adoption of this standard update did not have a significant impact on our condensed consolidated financial statements.

Leasing Arrangements

At each reporting period, we monitor the credit quality of the various lessees in our portfolios. Regarding the leveraged lease portfolio, we use external credit reports 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, and industry and general economic conditions. The credit quality of our lessees primarily varies from AAA to CCC+. 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. All significant accounts, individually or in the aggregate, are current and none are classified as impaired.

Earnings Per Common Share

There were a total of approximately 5 million and 6 million outstanding dilutive securities, primarily consisting of restricted stock units, included in the computation of diluted earnings per common share for the three months ended March 31, 2014 and 2013, respectively. Outstanding options to purchase shares that were not included in the computation of diluted earnings per common share because to do so would have been anti-dilutive for the period were not significant for the three months ended March 31, 2014, and 2013, respectively.

On January 28, 2014, at a special meeting of our shareholders, we received shareholder approval to increase our authorized shares of common stock by 2 billion shares to an aggregate 6.25 billion authorized shares of common stock. On February 4, 2014, this authorization became effective.

2. Acquisitions and Divestitures

Wireless

Wireless Transaction

On September 2, 2013, Verizon entered into a stock purchase agreement (the Stock Purchase Agreement) with Vodafone Group Plc (Vodafone) and Vodafone 4 Limited (Seller), pursuant to which Verizon agreed to acquire Vodafone’s indirect 45% interest in Cellco Partnership d/b/a Verizon Wireless (the Partnership, and such interest, the Vodafone Interest) for aggregate consideration of approximately $130 billion.

On February 21, 2014, pursuant to the terms and subject to the conditions set forth in the Stock Purchase Agreement, Verizon acquired (the Wireless Transaction) from Seller all of the issued and outstanding capital stock (the Transferred Shares) of

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Vodafone Americas Finance 1 Inc., a subsidiary of Seller (VF1 Inc.), which indirectly through certain subsidiaries (together with VF1 Inc., the Purchased Entities) owned the Vodafone Interest. In consideration for the Transferred Shares, upon completion of the Wireless Transaction, Verizon (i) paid approximately $58.89 billion in cash, (ii) issued approximately 1.27 billion shares of Verizon’s common stock, par value $0.10 per share (the Stock Consideration), which was valued at approximately $61.3 billion at the closing of the Wireless Transaction, (iii) issued senior unsecured Verizon notes in an aggregate principal amount of $5.0 billion (the Verizon Notes), (iv) sold Verizon’s indirectly owned 23.1% interest in Vodafone Omnitel N.V. (Omnitel, and such interest, the Omnitel Interest), valued at $3.5 billion and (v) provided other consideration, which included the assumption of preferred stock valued at approximately $1.7 billion. The total cash paid to Vodafone and the other costs of the Wireless Transaction, including financing, legal and bank fees, were financed through the incurrence of third-party indebtedness. See Note 4 for additional information.

In accordance with the accounting standard on consolidation, a change in a parent’s ownership interest while the parent retains a controlling financial interest in its subsidiary is accounted for as an equity transaction and remeasurement of assets and liabilities of previously controlled and consolidated subsidiaries is not permitted. As a result, we accounted for the Wireless Transaction by adjusting the carrying amount of the noncontrolling interest to reflect the change in Verizon’s ownership interest in the Partnership. Any difference between the fair value of the consideration paid and the amount by which the noncontrolling interest is adjusted has been recognized in equity attributable to Verizon.

Omnitel Transaction

On February 21, 2014, Verizon and Vodafone also consummated the sale of the Omnitel Interest (the Omnitel Transaction) by a subsidiary of Verizon to a subsidiary of Vodafone in connection with the Wireless Transaction pursuant to a separate share purchase agreement. As a result, during the three months ended March 31, 2014, we recognized a pre-tax gain of $1.9 billion on the disposal of the Omnitel interest in Equity in earnings of unconsolidated businesses on our condensed consolidated statement of income.

Verizon Notes

The Verizon Notes were issued to Vodafone pursuant to Verizon’s existing indenture. The Verizon Notes were issued in two separate series, with $2.5 billion due February 21, 2022 (the eight-year Verizon Notes) and $2.5 billion due February 21, 2025 (the eleven-year Verizon Notes). The Verizon Notes bear interest at a floating rate, which will be reset quarterly, with interest payable quarterly in arrears, beginning May 21, 2014. The eight-year Verizon Notes bear interest at a floating rate equal to three-month London Interbank Offered Rate (LIBOR), plus 1.222%, and the eleven-year Verizon Notes bear interest at a floating rate equal to three-month LIBOR, plus 1.372%. The indenture that governs the Verizon Notes contains certain negative covenants, including a negative pledge covenant and a merger or similar transaction covenant, affirmative covenants and events of default that are customary for companies maintaining an investment grade credit rating. An event of default for either series of the Verizon Notes may result in acceleration of the entire principal amount of all debt securities of that series. Beginning two years after the closing of the Wireless Transaction, Verizon may redeem all or any portion of the outstanding Verizon Notes held by Vodafone or any of its affiliates for a redemption price of 100% of the principal amount plus accrued and unpaid interest. The Verizon Notes may only be transferred by Vodafone to third parties in specified amounts during specified periods, commencing January 1, 2017. Any Verizon Notes held by third parties will not be redeemable by Verizon prior to their maturity dates. Verizon has agreed to file a registration statement with respect to the Verizon Notes at least three months prior to the Verizon Notes becoming transferable.

Other Consideration

Included in the other consideration provided to Vodafone is the indirect assumption of long-term obligations with respect to 5.143% Class D and Class E cumulative preferred stock (Preferred Stock) issued by one of the Purchased Entities. Both the Class D shares (825,000 shares outstanding) and Class E shares (825,000 shares outstanding) are mandatorily redeemable in April 2020 at $1,000 per share plus any accrued and unpaid dividends. Dividends accrue at 5.143% per annum and will be treated as interest expense. Both the Class D and Class E shares have been classified as liability instruments and were recorded at fair value as determined at the closing of the Wireless Transaction.

Deferred Tax Liabilities

Certain deferred taxes directly attributable to the Wireless Transaction have been calculated based on an analysis of taxes attributable to the difference between the tax basis of the investment in the noncontrolling interest that is assumed compared to Verizon’s book basis. As a result, Verizon recorded a deferred tax liability of approximately $13.5 billion.

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Spectrum License Transactions

During the fourth quarter of 2013, we entered into license exchange agreements with T-Mobile USA, Inc. (T-Mobile USA) to exchange certain Advanced Wireless Services (AWS) and Personal Communication Services (PCS) licenses. These non-cash exchanges, which are subject to customary closing conditions, are expected to close in the first half of 2014. The exchange includes a number of swaps that we expect will result in more efficient use of the AWS and PCS bands. As a result of these agreements, $0.9 billion of Wireless licenses are classified as held for sale and included in Prepaid expenses and other on our condensed consolidated balance sheets at March 31, 2014 and December 31, 2013, respectively. Upon completion of the transaction, we expect to record a gain which will be determined upon the closing of the transaction.

Subsequent to the transaction with T-Mobile USA in the fourth quarter of 2013, on January 6, 2014, we announced two agreements with T-Mobile USA with respect to our remaining 700 MHz A block spectrum licenses. Under one agreement, we will sell certain of these licenses to T-Mobile USA in exchange for cash consideration of approximately $2.4 billion, and under the second agreement we will exchange the remainder of these licenses for AWS and PCS spectrum licenses. As a result of these agreements, $3.3 billion of Wireless licenses are classified as held for sale and included in Prepaid expenses and other on our condensed consolidated balance sheet at March 31, 2014. These transactions are subject to customary closing conditions. These transactions are expected to close in the middle of 2014. Upon completion of these transactions, we expect to record a gain which will be determined upon the closing of these transactions.

During the three months ended March 31, 2014, we acquired various wireless licenses for cash consideration that was not significant.

Other

During February 2014, Verizon acquired a business dedicated to the development of Internet Protocol (IP) television for cash consideration that was not significant. The transaction is expected to accelerate the availability of next-generation video services.

3. Wireless Licenses, Goodwill and Other Intangible Assets

Wireless Licenses

Changes in the carrying amount of Wireless licenses are as follows:

(dollars in millions)
Balance at January 1, 2014	$	75,747
Acquisitions (Note 2)		136
Capitalized interest on wireless licenses		79
Reclassifications, adjustments and other		(3,249	)
Balance at March 31, 2014	$	72,713

Reclassifications, adjustments and other includes $3.3 billion of Wireless licenses that are classified as held for sale and included in Prepaid expenses and other on our condensed consolidated balance sheet at March 31, 2014. See Note 2 for additional details.

At March 31, 2014, approximately $5.5 billion of Wireless licenses were under development for commercial service for which we were capitalizing interest costs.

Goodwill

Changes in the carrying amount of Goodwill are as follows:

(dollars in millions)	Wireless		Wireline		Total
Balance at January 1, 2014	$	18,376	$	6,258	$	24,634
Acquisitions (Note 2)		–		13		13
Balance at March 31, 2014	$	18,376	$	6,271	$	24,647

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Other Intangible Assets

The following table displays the composition of Other intangible assets, net:

	At March 31, 2014							At December 31, 2013
(dollars in millions)	Gross Amount		Accumulated Amortization			Net Amount		Gross Amount		Accumulated Amortization			Net Amount
Customer lists (5 to 13 years)	$	3,640	$	(2,735	)	$	905	$	3,639	$	(2,660	)	$	979
Non-network internal-use software (3 to 7 years)		12,183		(7,600	)		4,583		11,770		(7,317	)		4,453
Other (2 to 25 years)		662		(311	)		351		691		(323	)		368
Total	$	16,485	$	(10,646	)	$	5,839	$	16,100	$	(10,300	)	$	5,800

The amortization expense for Other intangible assets was as follows:

(dollars in millions)	Three Months Ended March 31,
2014		$       394
2013		386

The estimated future amortization expense for Other intangible assets is as follows:

Years	(dollars in millions)
Remainder of 2014		$    1,137
2015		1,280
2016		1,039
2017		852
2018		688

4. Debt

Changes to debt during the three months ended March 31, 2014 are as follows:

(dollars in millions)	Debt Maturing within One Year			Long-term Debt			Total
Balance at January 1, 2014	$	3,933		$	89,658		$	93,591
Proceeds from long-term borrowings		–			16,952			16,952
Verizon Notes		–			5,000			5,000
Preferred Stock		–			1,650			1,650
Repayments of long-term borrowings and capital leases obligations		(2,500	)		(5,451	)		(7,951	)
Increase in short-term obligations, excluding current maturities		252			–			252
Reclassifications of long-term debt		532			(532	)		–
Other		(65	)		340			275
Balance at March 31, 2014	$	2,152		$	107,617		$	109,769

During February 2014, we issued €1.75 billion aggregate principal amount of 2.375% Notes due 2022, €1.25 billion aggregate principal amount of 3.25% Notes due 2026 and £0.85 billion aggregate principal amount of 4.75% Notes due 2034. The issuance of these Notes resulted in cash proceeds of approximately $5.4 billion, net of discounts and issuance costs. The net proceeds were used, in part, to finance the Wireless Transaction. Net proceeds not used to finance the Wireless Transaction were used for general corporate purposes. Also, during February 2014, we issued $0.5 billion aggregate principal amount of 5.90% Notes due

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2054 resulting in cash proceeds of approximately $0.5 billion, net of discounts and issuance costs. The net proceeds were used for general corporate purposes.

On March 10, 2014, we announced the commencement of a tender offer (the Tender Offer) to purchase for cash any and all of the series of notes listed in the following table:

(dollars in millions, except for Purchase Price)	Interest Rate			Maturity		Principal Amount Outstanding		Purchase Price (1)		Principal Amount Purchased
Verizon Communications		6.10	%		2018	$	1,500	$	1,170.07	$	748
		5.50	%		2018		1,500		1,146.91		763
		8.75	%		2018		1,300		1,288.35		564
		5.55	%		2016		1,250		1,093.62		652
		5.50	%		2017		750		1,133.22		353
Cellco Partnership and Verizon Wireless Capital LLC		8.50	%		2018		1,000		1,279.63		619
Alltel Corporation		7.00	%		2016		300		1,125.26		157
GTE Corporation		6.84	%		2018		600		1,196.85		266
										$	4,122

⁽¹⁾  Per $1,000 principal amount of notes

The Tender Offer for each series of notes was subject to a financing condition, which was either satisfied or waived with respect to all series. The Tender Offer expired on March 17, 2014 and settled on March 19, 2014. In addition to the purchase price, any accrued and unpaid interest on the purchased notes was paid to the date of purchase. During March 2014, we recorded early debt redemption costs in connection with the Tender Offer (see “Early Debt Redemption”).

During March 2014, we issued $4.5 billion aggregate principal amount of fixed and floating rate notes resulting in cash proceeds of approximately $4.5 billion, net of discounts and issuance costs. The issuances consisted of the following: $0.5 billion aggregate principal amount Floating Rate Notes due 2019 that bear interest at a rate equal to three-month LIBOR plus 0.77% which rate will be reset quarterly, $0.5 billion aggregate principal amount of 2.55% Notes due 2019, $1.0 billion aggregate principal amount of 3.45% Notes due 2021, $1.25 billion aggregate principal amount of 4.15% Notes due 2024 and $1.25 billion aggregate principal amount of 5.05% Notes due 2034. During March 2014, the net proceeds were used to purchase notes in the Tender Offer described above.

During March 2014, Verizon Wireless redeemed $1.25 billion aggregate principal amount of the Cellco Partnership and Verizon Wireless Capital LLC 8.50% Notes due 2018 at 127.135% of the principal amount of such notes, plus accrued and unpaid interest (see “Early Debt Redemption”). Also, during March 2014, $1.0 billion of LIBOR plus 0.61% Verizon Communications Notes and $1.5 billion of 1.95% Verizon Communications Notes matured and were repaid.

Term Loan Agreement

During February 2014, we drew $6.6 billion pursuant to a term loan agreement with a group of major financial institutions to finance, in part, the Wireless Transaction. $3.3 billion of the loans under the term loan agreement have a maturity of three years and $3.3 billion of the loans under the term loan agreement have a maturity of five years (the 5-Year Loans). The 5-Year Loans provide for the partial amortization of principal during the last two years that they are outstanding. Loans under the term loan agreement bear interest at floating rates. The term loan agreement contains certain negative covenants, including a negative pledge covenant, a merger or similar transaction covenant and an accounting changes covenant, affirmative covenants and events of default that are customary for companies maintaining an investment grade credit rating. In addition, the term loan agreement requires us to maintain a leverage ratio (as defined in the term loan agreement) not in excess of 3.50:1.00, until our credit ratings are equal to or higher than A3 and A- at Moody’s Investors Service and Standard & Poor’s Ratings Services, respectively.

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Verizon Notes

During February 2014, in connection with the Wireless Transaction, we issued $5.0 billion aggregate principal amount of floating rate notes to Vodafone. These notes were issued in two separate series, with $2.5 billion due February 21, 2022 and $2.5 billion due February 21, 2025. The Verizon Notes bear interest at a floating rate, which will be reset quarterly, with interest payable quarterly in arrears, beginning May 21, 2014 (see Note 2). The eight-year Verizon Notes bear interest at a floating rate equal to three-month LIBOR, plus 1.222%, and the eleven-year Verizon Notes bear interest at a floating rate equal to three-month LIBOR, plus 1.372%.

Preferred Stock

As a result of the Wireless Transaction, we assumed long-term obligations with respect to 5.143% Class D and Class E cumulative Preferred Stock issued by one of the Purchased Entities. Both the Class D shares (825,000 shares outstanding) and Class E shares (825,000 shares outstanding) are mandatorily redeemable in April 2020 at $1,000 per share plus any accrued and unpaid dividends. Dividends accrue at 5.143% per annum and will be treated as interest expense. Both the Class D and Class E shares have been classified as liability instruments and were recorded at fair value as determined at the closing of the Wireless Transaction.

Other Credit Facilities

As of March 31, 2014, the unused borrowing capacity under our $6.2 billion credit facility was approximately $6.1 billion and the unused borrowing capacity under our $2.0 billion 364-day revolving credit agreement was $2.0 billion.

Early Debt Redemption

During March 2014, we recorded net debt redemption costs of $0.9 billion in connection with the early redemption of $1.25 billion aggregate principal amount of Cellco Partnership and Verizon Wireless Capital LLC 8.50% Notes due 2018, and the purchase of the following in the Tender Offer: $0.7 billion of the $1.5 billion aggregate principal amount of Verizon 6.10% Notes due 2018, $0.8 billion of the $1.5 billion aggregate principal amount of Verizon 5.50% Notes due 2018, $0.6 billion of the $1.3 billion aggregate principal amount of Verizon 8.75% Notes due 2018, $0.7 billion of the $1.25 billion aggregate principal amount of Verizon 5.55% Notes due 2016, $0.4 billion of the $0.75 billion aggregate principal amount of Verizon 5.50% Notes due 2017, $0.6 billion of the $1.0 billion aggregate principal amount of Cellco Partnership and Verizon Wireless Capital LLC 8.50% Notes due 2018, $0.2 billion of the $0.3 billion aggregate principal amount of Alltel Corporation 7.00% Debentures due 2016 and $0.3 billion of the $0.6 billion aggregate principal amount of GTE Corporation 6.84% Debentures due 2018.

We recognized these costs in Other income and (expense), net on our condensed consolidated statement of income during the three months ended March 31, 2014.

Guarantees

We guarantee the debentures and first mortgage bonds of our operating telephone company subsidiaries. As of March 31, 2014, $3.1 billion principal amount of these obligations remain outstanding. Each guarantee will remain in place for the life of the obligation unless terminated pursuant to its terms, including the operating telephone company no longer being a wholly-owned subsidiary of Verizon.

We also guarantee the debt obligations of GTE Corporation that were issued and outstanding prior to July 1, 2003. As of March 31, 2014, $1.4 billion principal amount of these obligations remain outstanding.

In 2013, we launched Verizon Edge, a program that provides eligible wireless customers with the ability to pay for their phone over 24 months and upgrade to a new phone after a minimum of 30 days, subject to certain conditions, including making at least 50% of the required device payments, trading in their phone in good working condition and signing a new contract with Verizon Wireless. Verizon values this trade-in right as a guarantee liability. The guarantee liability is initially measured at fair value and is determined based on assumptions including the probability and timing of the customer upgrading to a new phone, the customer’s estimated remaining installment balance at the time of trade-in and the fair value of the phone at the time of trade-in. As of March 31, 2014, the guarantee liability related to this program was approximately $0.3 billion.

Debt Covenants

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

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5. Fair Value Measurements

The following table presents the balances of assets and liabilities measured at fair value on a recurring basis as of March 31, 2014:

(dollars in millions)	Level 1(1)		Level 2(2)		Level 3(3)		Total
Assets:
Short-term investments:
Equity securities	$	383	$	–	$	–	$	383
Fixed income securities		–		254		–		254
Other assets:
Fixed income securities		–		884		–		884
Cross currency swaps		–		262		–		262
Interest rate swaps		–		19		–		19
Total	$	383	$	1,419	$	–	$	1,802
Liabilities:
Other liabilities:
Cross currency swaps	$	–	$	13	$	–	$	13
Total	$	–	$	13	$	–	$	13

⁽¹⁾  quoted prices in active markets for identical assets or liabilities

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

⁽³⁾  no observable pricing inputs in the market

Equity securities consist of investments in common stock of domestic and international corporations measured using quoted prices in active markets.

Fixed income securities consist primarily of investments in municipal bonds that do not have quoted prices in active markets. For these securities, we use alternative matrix pricing resulting in these debt securities being classified as Level 2.

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. Our derivative instruments are recorded on a gross basis.

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 three months ended March 31, 2014.

Fair Value of Short-term and Long-term Debt

The fair value of our debt is determined using various methods, including quoted prices for identical terms and maturities, which is a Level 1 measurement, as well as quoted prices for similar terms and maturities in inactive markets and future cash flows discounted at current rates, which are Level 2 measurements. The fair value of our short-term and long-term debt, excluding capital leases, was as follows:

	At March 31, 2014				At December 31, 2013
(dollars in millions)	Carrying Amount		Fair Value			Carrying Amount		Fair Value
Short- and long-term debt, excluding capital leases	$	109,516	$	122,052		$	93,298	$	103,527

Derivative Instruments

We enter into derivative transactions to manage our exposure to fluctuations in foreign currency exchange rates, interest rates, and 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 swap agreements, commodity swap and forward agreements and interest rate locks. We do not hold derivatives for trading purposes.

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We measure all derivatives, including derivatives embedded in other financial instruments, at fair value and recognize them as either assets or liabilities on our condensed 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 loss and recognized in earnings when the hedged item is recognized in earnings.

Interest Rate Swaps

We enter into domestic interest rate swaps to achieve a targeted mix of fixed and variable rate debt. We principally receive fixed rates and pay variable rates based on LIBOR, resulting in a net increase or decrease to Interest expense. 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 condensed consolidated balance sheets as assets and liabilities. The fair value of these contracts was not material at March 31, 2014 and December 31, 2013, respectively. As of March 31, 2014, the total notional amount of the interest rate swaps was $1.8 billion. The ineffective portion of these interest rate swaps was not material for the three months ended March 31, 2014.

Forward Interest Rate Swaps

In order to manage our exposure to future interest rate changes, during the fourth quarter of 2013, we entered into forward interest rate swaps with a total notional value of $2.0 billion. We designated these contracts as cash flow hedges. In March 2014, we settled these forward interest rate swaps and the pre-tax gain was not material. During the three months ended March 31, 2014, we entered into forward interest rate swaps with a total notional value of $0.9 billion. We designated these contracts as cash flow hedges.

In April 2014, we entered into forward interest rate swaps with a total notional value of $1.6 billion. We designated these contracts as cash flow hedges.

Cross Currency Swaps

Verizon Wireless previously entered into cross currency swaps designated as cash flow hedges to exchange approximately $1.6 billion of British Pound Sterling and Euro-denominated debt into U.S. dollars and to fix our future interest and principal payments in U.S. dollars, as well as to mitigate the effect of foreign currency transaction gains or losses.

During February 2014, we entered into cross currency swaps designated as cash flow hedges to exchange approximately $5.4 billion of Euro and British Pound Sterling denominated debt into U.S. dollars and to fix our future interest and principal payments in U.S. dollars, as well as to mitigate the impact of foreign currency transaction gains or losses.

A portion of the gains and losses recognized in Other comprehensive loss was reclassified to Other income and (expense), net to offset the related pre-tax foreign currency transaction gain or loss on the underlying debt obligations. The fair value of the outstanding swaps was $0.2 billion at March 31, 2014 and was not material at December 31, 2013. During the three months ended March 31, 2014 and 2013, an immaterial pre-tax gain and a pre-tax loss of $0.1 billion, respectively, were recognized in Other comprehensive loss.

6. Stock-Based Compensation

Verizon Communications Long-Term Incentive Plan

The 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.

Restricted Stock Units

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 are classified as equity awards because the RSUs will be paid in Verizon common stock upon vesting. The RSU equity awards are measured using the grant date fair value of Verizon common stock and are not remeasured at the end of 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.

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Performance Stock Units

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 performance goals have been achieved over the three-year performance cycle. 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 the Restricted Stock Unit and Performance Stock Unit activity:

(shares in thousands)	Restricted Stock Units			Performance Stock Units
Outstanding, January 1, 2014		16,193			23,724
Granted		4,514			6,578
Payments		(6,116	)		(9,153	)
Cancelled/Forfeited		(54	)		(77	)
Outstanding, March 31, 2014		14,537			21,072

As of March 31, 2014, unrecognized compensation expense related to the unvested portion of outstanding RSUs and PSUs was approximately $0.7 billion and is expected to be recognized over approximately two years.

The RSUs granted in 2014 have a weighted-average grant date fair value of $47.15 per unit.

7. Employee Benefits

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 our share of the cost for certain recent and future retirees. In accordance with our accounting policy for pension and other postretirement benefits, operating expenses include pension and benefit related credits and/or charges based on actuarial assumptions, including projected discount rates and an estimated return on plan assets. These estimates are updated in the fourth quarter or upon a remeasurement event to reflect actual return on plan assets and updated actuarial assumptions. The adjustment will be recognized in the income statement during the fourth quarter or upon a remeasurement event pursuant to our accounting policy for the recognition of actuarial gains and losses.

Net Periodic Benefit Cost

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

(dollars in millions)	Pension						Health Care and Life
Three Months Ended March 31,	2014			2013			2014			2013
Service cost	$	81		$	99		$	65		$	80
Amortization of prior service cost (credit)		(2	)		1			(63	)		(62	)
Expected return on plan assets		(295	)		(311	)		(41	)		(36	)
Interest cost		259			250			277			274
Net periodic benefit cost	$	43		$	39		$	238		$	256

Severance Payments

During the three months ended March 31, 2014, we paid severance benefits of $0.2 billion. At March 31, 2014, we had a remaining severance liability of $0.6 billion, a portion of which includes future contractual payments to employees separated as of March 31, 2014.

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Employer Contributions

During the three months ended March 31, 2014, we contributed $0.5 billion to our other postretirement benefit plans and $0.2 billion to our qualified pension plans. The contributions to our nonqualified pension plans were not material during the three months ended March 31, 2014. There have been no material changes with respect to the qualified and nonqualified pension contributions in 2014 as previously disclosed in Part II. Item 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, 2013.

8. Equity and Accumulated Other Comprehensive Income

Equity

Changes in the components of Total equity were as follows:

(dollars in millions)	Attributable to Verizon			Noncontrolling Interests			Total Equity
Balance at January 1, 2014	$	38,836		$	56,580		$	95,416
Net income		3,947			2,039			5,986
Other comprehensive loss		(1,068	)		(23	)		(1,091	)
Comprehensive income		2,879			2,016			4,895
Issuance of common stock		127			–			127
Contributed capital		(26,963	)		–			(26,963	)
Dividends declared		(2,195	)		–			(2,195	)
Common stock in treasury		167			–			167
Purchase of noncontrolling interest		–			(55,960	)		(55,960	)
Distributions and other		(140	)		(1,496	)		(1,636	)
Balance at March 31, 2014	$	12,711		$	1,140		$	13,851

The changes in Common stock, Contributed capital and Purchase of noncontrolling interest are primarily due to the completion of the Wireless Transaction on February 21, 2014. See Note 2 for additional information.

Prior to the closing of the Wireless Transaction, noncontrolling interests included in our condensed consolidated financial statements primarily consisted of Vodafone’s 45% ownership interest in Verizon Wireless. The noncontrolling interests that remain after the completion of the Wireless Transaction primarily relate to wireless partnership entities.

Common Stock

As a result of the Wireless Transaction, Verizon issued approximately 1.27 billion shares of Verizon common stock.

Accumulated Other Comprehensive Income

The changes in the balances of Accumulated other comprehensive income by component are as follows:

(dollars in millions)	Foreign currency translation adjustments			Unrealized loss on cash flow hedges			Unrealized gain on marketable securities			Defined benefit pension and postretirement plans			Total
Balance at January 1, 2014	$	853		$	113		$	117		$	1,275		$	2,358
Other comprehensive income (loss)		(38	)		25			6			–			(7	)
Amounts reclassified to net income		(911	)		(108	)		(5	)		(37	)		(1,061	)
Net other comprehensive income (loss)		(949	)		(83	)		1			(37	)		(1,068	)
Balance at March 31, 2014	$	(96	)	$	30		$	118		$	1,238		$	1,290

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The amounts presented above in net other comprehensive income (loss) are net of taxes and noncontrolling interests, which are not significant. For the three months ended March 31, 2014, the amounts reclassified to net income related to foreign currency translation adjustments are included in Equity in earnings of unconsolidated businesses on our condensed consolidated statement of income and are a result of the completion of the Omnitel Transaction. See Note 2 for additional details. For the three months ended March 31, 2014, the amounts reclassified to net income related to defined benefit pension and postretirement plans are included in Cost of services and sales and Selling, general and administrative expense on our condensed consolidated statements of income. For the three months ended March 31, 2014, all other amounts reclassified to net income are included in Other income and (expense), net on our condensed consolidated statements of income.

9. Segment Information

Reportable Segments

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 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. Effective January 1, 2014, we have also reclassified the results of certain businesses, such as development stage businesses that support our strategic initiatives, from our Wireline segment to Corporate, eliminations and other. The impact of this reclassification was not material to our condensed consolidated financial statements or our segment results of operations.

Our segments and their principal activities consist of the following:

Segment	Description
Wireless	Wireless’ communications products and services include wireless voice and data services and equipment sales, which are provided to consumer, business and government customers across the United States.
Wireline	Wireline’s voice, data and video communications products and enhanced services include broadband video and data, corporate networking solutions, data center and cloud services, security and managed network services and local and long distance voice services. We provide these products and services to consumers in the United States, as well as to carriers, businesses and government customers both in the United States and in over 150 other countries around the world.

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

	Three Months Ended March 31,
(dollars in millions)	2014			2013
External Operating Revenues
Wireless
Retail service	$	17,233		$	16,155
Other service		735			557
Service revenue		17,968			16,712
Equipment		1,869			1,809
Other		1,014			975
Total Wireless		20,851			19,496
Wireline
Consumer retail		3,846			3,616
Small business		624			635
Mass Markets		4,470			4,251
Strategic services		2,101			2,073
Core		1,500			1,691
Global Enterprise		3,601			3,764
Global Wholesale		1,345			1,443
Other		153			101
Total Wireline		9,569			9,559
Total segments		30,420			29,055
Corporate, eliminations and other		398			365
Total consolidated – reported	$	30,818		$	29,420
Intersegment Revenues
Wireless	$	28		$	27
Wireline		221			271
Total segments		249			298
Corporate, eliminations and other		(249	)		(298	)
Total consolidated – reported	$	–		$	–
Total Operating Revenues
Wireless	$	20,879		$	19,523
Wireline		9,790			9,830
Total segments		30,669			29,353
Corporate, eliminations and other		149			67
Total consolidated – reported	$	30,818		$	29,420
Operating Income
Wireless	$	7,318		$	6,418
Wireline		147			13
Total segments		7,465			6,431
Reconciling items		(305	)		(209	)
Total consolidated – reported	$	7,160		$	6,222

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(dollars in millions)	At March 31, 2014			At December 31, 2013
Assets
Wireless	$	149,178		$	146,429
Wireline		83,540			84,573
Total segments		232,718			231,002
Corporate, eliminations and other		(11,156	)		43,096
Total consolidated – reported	$	221,562		$	274,098

Corporate, eliminations and other at December 31, 2013 is primarily comprised of cash and cash equivalents which were used to complete the Wireless Transaction on February 21, 2014.

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

	Three Months Ended March 31,
(dollars in millions)	2014			2013
Total segment operating income	$	7,465		$	6,431
Corporate, eliminations and other		(305	)		(209	)
Total consolidated operating income		7,160			6,222
Equity in earnings of unconsolidated businesses		1,902			(5	)
Other income and (expense), net		(894	)		39
Interest expense		(1,214	)		(537	)
Income Before Provision For Income Taxes	$	6,954		$	5,719

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 months ended March 31, 2014 and 2013.

10. Commitments and Contingencies

In the ordinary course of business Verizon is involved in various commercial litigation and regulatory proceedings at the state and federal level. Where it is determined, in consultation with counsel based on litigation and settlement risks, that a loss is probable and estimable in a given matter, the Company establishes an accrual. In none of the currently pending matters is the amount of accrual material. An estimate of the reasonably possible loss or range of loss in excess of the amounts already accrued cannot be made at this time due to various factors typical in contested proceedings, including (1) uncertain damage theories and demands; (2) a less than complete factual record; (3) uncertainty concerning legal theories and their resolution by courts or regulators; and (4) the unpredictable nature of the opposing party and its demands. We continuously monitor these proceedings as they develop and adjust any accrual or disclosure as needed. We do not expect that the ultimate resolution of any pending regulatory or legal matter 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.

Verizon is currently involved in approximately 50 federal district court actions alleging that Verizon is infringing various patents. Most of these cases are brought by non-practicing entities and effectively seek only monetary damages; a small number are brought by companies that have sold products and seek injunctive relief as well. These cases have progressed to various stages and a small number may go to trial in the coming 12 months if they are not otherwise resolved.

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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. We do not believe performance under the guarantee is likely.

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

Overview

Verizon Communications Inc. (Verizon or the Company) is a holding company that, acting through its subsidiaries, is one of the world’s leading providers of communications, information and entertainment products and services to consumers, businesses and governmental agencies. With a presence in over 150 countries around the world, we offer voice, data and video services and solutions on our wireless and wireline networks that are designed to meet customers’ demand for mobility, reliable network connectivity, security and control. We have two reportable segments, Wireless and Wireline. Our wireless business, operating as Verizon Wireless, provides voice and data services and equipment sales across the United States using one of the most extensive and reliable wireless networks. Our wireline business provides consumer, business and government customers with communications products and services, including broadband data and video services, network access, voice, 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 skilled, diverse and dedicated workforce of approximately 176,900 employees as of March 31, 2014.

In recent years, Verizon has embarked upon a strategic transformation as advances in technology have changed the ways that our customers interact in their personal and professional lives and that businesses operate. To meet the changing needs of our customers and address the changing technological landscape, we are focusing our efforts around higher margin and growing areas of our business: wireless data, wireline data and Strategic services, including cloud computing services.

Our strategy requires significant capital investments primarily to acquire wireless spectrum, put the spectrum into service, provide additional capacity for growth in our wireless and wireline networks, invest in the fiber optic network that supports our wireless and wireline businesses, maintain our wireless and wireline networks and develop and maintain significant advanced information technology systems and data system capabilities.

On February 21, 2014, we completed the acquisition of Vodafone Group Plc’s (Vodafone) indirect 45% interest in Cellco Partnership d/b/a Verizon Wireless for aggregate consideration of approximately $130 billion (the Wireless Transaction). The consideration paid was primarily comprised of cash of approximately $58.89 billion and Verizon common stock with a value of approximately $61.3 billion. See “Acquisitions and Divestitures” for additional information.

In our Wireless business, during the three months ended March 31, 2014 compared to the similar period in 2013, revenue growth of 6.9% was driven by service revenue growth of 7.5% as the demand for fourth-generation (4G) Long-Term Evolution (LTE) smartphones and tablets continues. At March 31, 2014, retail postpaid connections were 4.4% higher than at March 31, 2013, with smartphones representing 72% of our retail postpaid phone base at March 31, 2014 compared to 61% at March 31, 2013. Also during the three months ended March 31, 2014, postpaid smartphone activations represented 90% of phones activated compared to 84% in the similar period in 2013.

While we have substantially completed the deployment of our 4G LTE network, we are focusing our capital spending on adding capacity and density to our existing 4G LTE network. Our 4G LTE network is available to approximately 97% of the U.S. population in more than 500 markets and covering approximately 306 million people, including those in areas served by our LTE in Rural America partners. Our 4G LTE network provides higher data throughput performance for data services at lower cost compared to those provided via third-generation (3G) networks. In March 2014, 73% of our total data traffic was carried on our 4G LTE network.

On February 13, 2014, we introduced our More Everything^® plans which replaced our Share Everything^® plans and provide more value to our customers. These plans, which are available to both new and existing postpaid customers, feature domestic unlimited voice minutes, unlimited domestic and international text, video and picture messaging, cloud storage and a single data allowance that can be shared among up to 10 devices connected to the Verizon Wireless network. Beginning on April 17, 2014, for a limited time, existing customers who receive wireless services on a month-to-month basis and new customers who bring their own device, can move to a More Everything plan and receive discounted monthly access fees. Customers with Verizon Edge, which provides a device payment plan option and allows customers to trade in their phone for a new phone after a minimum of thirty days, subject to certain conditions, will also receive discounted monthly access fees on More Everything plans. As of March 31, 2014, More Everything accounts represented approximately 50% of our retail postpaid accounts compared to Share Everything plans representing approximately 30% of our retail postpaid accounts as of March 31, 2013. Verizon Wireless offers shared data plans for business, with More Everything plans for Small business and the Nationwide Business Data Packages and Plans.

In our Wireline business, revenues declined 0.4% during the three months ended March 31, 2014 compared to the similar period in 2013 primarily due to revenue declines in Global Enterprise Core and Global Wholesale. These declines were partially offset by revenue increases in Consumer retail driven by FiOS services and in Strategic services within Global Enterprise. FiOS represented approximately 74% of Consumer retail revenue during the three months ended March 31, 2014 compared to

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approximately 69% during the similar period in 2013. As the penetration of FiOS products increases, we continue to seek ways to increase revenue and further realize operating and capital efficiencies as well as maximize profitability. As more applications are developed for this high-speed service, we expect that FiOS will become a hub for managing multiple home services that will eventually be part of the digital grid, including not just entertainment and communications, but also machine-to-machine communications, such as home monitoring, health monitoring, energy management and utilities management.

Verizon recently announced the introduction of FiOS Quantum TV, which provides FiOS TV customers with new features including the ability to record up to 12 shows at once and control live TV from any room in their home. This new service is now available in North Texas, as well as Pittsburgh and Harrisburg, Pennsylvania. We expect to continue to roll out this service in phases over the next few months where FiOS TV is offered.

Wireline’s revenues during the three months ended March 31, 2014 included a 1.8% increase in Strategic services revenues, which represented 59% of total Global Enterprise revenues. Strategic services revenues include revenues from the public sector, where we continue to experience revenue pressure. We believe Global Enterprise customers continue to be more focused on improving their cost structure as opposed to investing for growth, which creates revenue pressure for us. Total Global Enterprise and Global Wholesale revenues declined due to declines in Core customer premise equipment revenues and traditional voice revenues. The decline in Core customer premise equipment revenues is a result of our focus on improving our margins by continuing to de-emphasize sales of equipment that are not part of an overall enterprise solutions bundle. To compensate for the shrinking market for traditional voice service, we continue to build our Wireline segment around data, video and advanced business services – areas where demand for reliable high-speed connections is growing.

We are investing in innovative technology like wireless networks, high-speed fiber and cloud services to position ourselves at the center of growth trends of the future. During the three months ended March 31, 2014, these investments included capital expenditures of $4.2 billion, acquisitions of wireless licenses of $0.2 billion and acquisitions of investments and businesses of $0.2 billion. See “Cash Flows Used in Investing Activities” and “Acquisitions and Divestitures” for additional information.

By investing in our own capabilities, we are also investing in the markets we serve by providing our communities with an efficient, reliable infrastructure for competing in the information economy. We are committed to putting our customers first and being a responsible member of our communities. Guided by this commitment and by our core values of integrity, respect, performance excellence and accountability, we believe we are well-positioned to produce a long-term return for our shareowners, create meaningful work for ourselves and provide something of lasting value for society.

Trends

We expect the number of devices activated on Verizon Edge to continue to increase. Additionally, we expect the activations on Verizon Edge to contribute positively to our consolidated operating income and our Wireless segment operating income. As more customers adopt Verizon Edge, we expect retail postpaid ARPA (the average revenue per account from retail postpaid accounts) and service revenue to be negatively impacted, and we expect equipment and other revenue to be positively impacted.

There have been no significant changes to the information related to trends affecting our business that was disclosed in Part II, Item 7 of our Annual Report on Form 10-K for the year ended December 31, 2013, except to the extent described above.

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Consolidated Results of Operations

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

On February 21, 2014, we completed the acquisition of Vodafone’s indirect 45% interest in Verizon Wireless. As a result, our results reflect our 55% ownership of Verizon Wireless through the closing of the Wireless Transaction and reflect our full ownership of Verizon Wireless for the remainder of the period.

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 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 users of our financial statements in better understanding our results of operations and trends from period to period. Effective January 1, 2014, we have also reclassified the results of certain businesses, such as development stage businesses that support our strategic initiatives, from our Wireline segment to Corporate, eliminations and other. The impact of this reclassification was not material to our condensed consolidated financial statements or our segment results of operations.

Consolidated Revenues

	Three Months Ended March 31,
(dollars in millions)	2014		2013		Increase/(Decrease)
Wireless
Service revenue	$	17,987	$	16,728	$	1,259		7.5	%
Equipment and other		2,892		2,795		97		3.5
Total		20,879		19,523		1,356		6.9
Wireline
Mass Markets		4,464		4,254		210		4.9
Global Enterprise		3,606		3,770		(164	)	(4.4	)
Global Wholesale		1,591		1,699		(108	)	(6.4	)
Other		129		107		22		20.6
Total		9,790		9,830		(40	)	(0.4	)
Corporate, eliminations and other		149		67		82		nm
Consolidated Revenues	$	30,818	$	29,420	$	1,398		4.8

nm – not meaningful

The increase in consolidated revenues during the three months ended March 31, 2014 compared to the similar period in 2013 was primarily due to higher revenues at Wireless, as well as higher Mass Markets revenues driven by FiOS services at our Wireline segment. Partially offsetting these increases were lower Global Enterprise Core and Global Wholesale revenues at our Wireline segment.

Wireless’ revenues increased $1.4 billion, or 6.9% during the three months ended March 31, 2014 compared to the similar period in 2013 primarily due to growth in service revenue. The increase in service revenue during the three months ended March 31, 2014 compared to the similar period in 2013 was primarily driven by higher retail postpaid service revenue, which increased largely as a result of an increase in retail postpaid connections as well as the continued increase in penetration of 4G LTE smartphones and tablets through our More Everything plans. During the three months ended March 31, 2014, retail postpaid connection net additions decreased compared to the similar period in 2013 primarily due to an increase in our retail postpaid connection churn rate, partially offset by an increase in retail postpaid connection gross additions. Retail postpaid connections per account increased as of March 31, 2014 compared to March 31, 2013, primarily due to the increased penetration of tablets.

22

Wireline’s revenues decreased 0.4% during the three months ended March 31, 2014 compared to the similar period in 2013 primarily driven by declines in Global Enterprise Core and Global Wholesale. The decrease in revenues was partially offset by higher Mass Markets revenues and increased Strategic services revenues within Global Enterprise.

Mass Markets revenues increased $0.2 billion, or 4.9%, during the three months ended March 31, 2014 compared to the similar period in 2013 primarily due to the expansion of FiOS services (Voice, Internet and Video) as well as changes in our pricing strategies, partially offset by the continued decline of local exchange revenues.

Global Enterprise revenues decreased $0.2 billion, or 4.4%, during the three months ended March 31, 2014 compared to the similar period in 2013 primarily due to a decline in Core customer premise equipment revenues as well as lower voice services and data networking revenues. This decrease was partially offset by growth in Strategic services revenues, primarily due to growth in advanced services, such as IP communications, our cloud and data center offerings, contact center solutions, security services and professional services as well as our telematics offerings.

Global Wholesale revenues decreased $0.1 billion, or 6.4%, during the three months ended March 31, 2014 compared to the similar period in 2013 primarily due to a decline in traditional voice revenues as a result of decreased minutes of use (MOUs) and a decline in domestic wholesale connections, partially offset by Ethernet migrations from core customers as well as continuing demand for high-speed digital data services from fiber-to-the-cell customers upgrading their core data circuits to Ethernet facilities.

Consolidated Operating Expenses

		Three Months Ended March 31,
(dollars in millions)	2014		2013		Increase/(Decrease)
Cost of services and sales	$	11,189	$	10,932	$	257	2.4	%
Selling, general and administrative expense		8,332		8,148		184	2.3
Depreciation and amortization expense		4,137		4,118		19	0.5
Consolidated Operating Expenses	$	23,658	$	23,198	$	460	2.0

Cost of Services and Sales

Cost of services and sales increased during the three months ended March 31, 2014 compared to the similar period in 2013 primarily due to an increase in cost of equipment sales of $0.3 billion and an increase in cost of network services at our Wireless segment, as well as higher content costs associated with continued FiOS subscriber growth and vendor rate increases at our Wireline segment. Partially offsetting this increase is a decrease in data roaming, a decrease in cost of data services, and a decrease in network connection costs at our Wireless segment, as well as declines in access costs and costs related to customer premise equipment at our Wireline segment.

Selling, General and Administrative Expense

Selling, general and administrative expense increased during the three months ended March 31, 2014 compared to the similar period in 2013 primarily due to gains recorded in the first quarter of 2013 related to wireless license exchange agreements, higher advertising expense associated with the launch of our More Everything plans and higher sales commission expense at our Wireless segment. Partially offsetting this increase was a decline in employee costs and lower advertising expenses at our Wireline segment.

Depreciation and Amortization Expense

Depreciation and amortization expense increased during the three months ended March 31, 2014 compared to the similar period in 2013 primarily due to an increase in net depreciable assets and an increase in amortization expense related to non-network software.

Consolidated Operating Income and EBITDA

Consolidated earnings before interest, taxes, depreciation and amortization expenses (Consolidated 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 expense related primarily to capital expenditures and acquisitions that occurred in prior years, as well as in evaluating operating performance in relation to our competitors. Consolidated EBITDA is calculated by adding back interest, taxes, depreciation and amortization expense, equity in earnings of unconsolidated businesses and other income and (expense), net to net income.

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Operating expenses include pension and benefit related credits and/or charges based on actuarial assumptions, including projected discount rates and an estimated return on plan assets. These estimates will be updated in the fourth quarter or upon a remeasurement event to reflect actual return on plan assets and updated actuarial assumptions. The adjustment will be recognized in the income statement during the fourth quarter or upon a remeasurement event pursuant to our accounting policy for the recognition of actuarial gains/losses.

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.

	Three Months Ended March 31,
(dollars in millions)	2014		2013
Consolidated Operating Income	$	7,160	$	6,222
Add Depreciation and amortization expense		4,137		4,118
Consolidated EBITDA	$	11,297	$	10,340

The changes in the table above during the three months ended March 31, 2014 compared to the similar period in 2013 were a result of the factors described in connection with operating revenues and operating expenses.

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Other Consolidated Results

Equity in Earnings of Unconsolidated Businesses

Equity in earnings of unconsolidated businesses increased $1.9 billion during the three months ended March 31, 2014, compared to the similar period in 2013 primarily due to the gain of $1.9 billion recorded on the sale of our interest in Vodafone Omnitel N.V. (Vodafone Omnitel), which was part of the consideration for the Wireless Transaction.

Other Income and (Expense), Net

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

	Three Months Ended March 31,
(dollars in millions)	2014			2013		Increase/(Decrease)
Interest income	$	22		$	13	$	9		69.2	%
Other, net		(916	)		26		(942	)	nm
Total	$	(894	)	$	39	$	(933	)	nm

nm – not meaningful

Other income and (expense), net decreased during the three months ended March 31, 2014 compared to the similar period in 2013 primarily due to net early debt redemption costs of $0.9 billion recorded during the three months ended March 31, 2014 (see “Other Items”).

Interest Expense

	Three Months Ended March 31,
(dollars in millions)	2014			2013			Increase/(Decrease)
Total interest costs on debt balances	$	1,350		$	714		$	636		89.1	%
Less capitalized interest costs		136			177			(41	)	(23.2	)
Total	$	1,214		$	537		$	677		nm
Average debt outstanding	$	103,164		$	52,623
Effective interest rate		5.2	%		5.4	%

nm – not meaningful

Total interest costs on debt balances increased during the three months ended March 31, 2014 compared to the similar period in 2013 primarily due to the issuance of fixed and floating rate notes to finance the Wireless Transaction (see “Acquisitions and Divestitures”) resulting in an increase in average debt as well as an increase in interest expense, partially offset by a lower effective interest rate (see “Consolidated Financial Condition”). Capitalized interest costs were lower in 2014 primarily due to a decrease in wireless licenses that are currently under development.

25

Provision for Income Taxes

	Three Months Ended March 31,
(dollars in millions)	2014			2013			Increase/(Decrease)
Provision for income taxes	$	968		$	864		$	104	12.0	%
Effective income tax rate		13.9	%		15.1	%

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 income tax rate is significantly lower than the statutory federal income tax rate due to the inclusion of income attributable to Vodafone’s noncontrolling interest in the Verizon Wireless partnership within our income before the provision for income taxes, which resulted in our effective income tax rate being 5.8 and 15.6 percentage points lower during the three months ended March 31, 2014 and 2013, respectively. As a result of the Wireless Transaction, the difference in the effective income tax rate as compared to the statutory federal income tax rate will no longer be significant in subsequent quarters.

The increase in the provision for income taxes during the three months ended March 31, 2014 compared to the similar period in 2013 is primarily due to higher income before income taxes, partially offset by higher tax benefits resulting from the favorable resolution of income tax matters due to lapses of statutes of limitations in the current period. The decrease in the effective income tax rate during the three months ended March 31, 2014 compared to the similar period in 2013 is primarily due to the favorable tax treatment of the gain on the sale of the Omnitel Interest, partially offset by lower income attributable to Vodafone’s noncontrolling interest in the Verizon Wireless partnership, in connection with the acquisition of Vodafone’s indirect 45% interest in Verizon Wireless on February 21, 2014. The decrease in the effective income tax rate is also attributable to higher tax benefits resulting from the favorable resolution of income tax matters due to lapses of statutes of limitations in the current period.

Unrecognized Tax Benefits

Unrecognized tax benefits were $2.8 billion at March 31, 2014 and $2.1 billion at December 31, 2013. Interest and penalties related to unrecognized tax benefits were $0.2 billion (after-tax) and $0.3 billion (after-tax) at March 31, 2014 and December 31, 2013, respectively. The increase in unrecognized tax benefits was primarily due to the acquisition of Vodafone’s indirect 45% interest in Verizon Wireless and reevaluation of certain existing tax positions, partially offset by lapses of statutes of limitations in various jurisdictions. The uncertain tax benefits related to the acquisition of Vodafone’s indirect 45% interest in Verizon Wireless concern pre-acquisition tax controversies and are the subject of an indemnity from Vodafone for which a corresponding indemnity asset has been established.

Verizon and/or its subsidiaries file income tax returns in the U.S. federal jurisdiction, and various state, local and foreign jurisdictions. As a large taxpayer, we are under audit by the Internal Revenue Service (IRS) and multiple state and foreign jurisdictions for various open tax years. The IRS is currently examining Verizon’s U.S. income tax returns for tax years 2007-2009 and Cellco Partnership’s U.S. income tax returns for tax years 2010-2011. Significant tax examinations and litigation are ongoing in New York City for tax years as early as 2000. It is reasonably possible that the amount of the liability for unrecognized tax benefits could change by a significant amount in the next twelve months. An estimate of the range of the possible change cannot be made until these tax matters are further developed or resolved.

Net Income Attributable to Noncontrolling Interests

	Three Months Ended March 31,
(dollars in millions)	2014		2013		Increase/(Decrease)
Net income attributable to noncontrolling interests	$	2,039	$	2,903	$	(864	)	(29.8	)%

The decrease in Net income attributable to noncontrolling interests during the three months ended March 31, 2014 compared to the similar period in 2013 was primarily due to the completion of the Wireless Transaction on February 21, 2014. As a result, our results reflect our 55% ownership of Verizon Wireless through the closing of the Wireless Transaction and reflect our full ownership of Verizon Wireless for the remainder of the period. The noncontrolling interests that remained after the completion of the Wireless Transaction primarily relate to wireless partnership entities.

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Segment Results of Operations

We have two reportable segments, 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 our competitors. Segment EBITDA is calculated by adding back depreciation and amortization expense to segment operating income.

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

27

Wireless

Our Wireless segment is primarily comprised of Cellco Partnership doing business as Verizon Wireless. Cellco Partnership was formed as a joint venture in April 2000 by the combination of the U.S. wireless operations and interests of Verizon and Vodafone. Prior to the completion of the Wireless Transaction, Verizon owned a controlling 55% interest in Verizon Wireless and Vodafone owned the remaining 45%. On February 21, 2014, the Wireless Transaction was completed and Verizon acquired 100% ownership of Verizon Wireless. Verizon Wireless provides wireless communications services across one of the most extensive wireless networks in the United States.

We provide these services and equipment sales to consumer, business and government customers in the United States on a postpaid and prepaid basis. Postpaid connections represent individual lines of service for which a customer is billed in advance a monthly access charge in return for a monthly network service allowance, and usage beyond the allowances is billed monthly in arrears. Our prepaid service enables individuals to obtain wireless services without a long-term contract or credit verification by paying for all services in advance.

Operating Revenues and Selected Operating Statistics

(dollars in millions, except ARPA)	Three Months Ended March 31,
	2014			2013			Increase/(Decrease)
Retail service	$	17,246		$	16,169		$	1,077		6.7	%
Other service		741			559			182		32.6
Service revenue		17,987			16,728			1,259		7.5
Equipment and other		2,892			2,795			97		3.5
Total Operating Revenues	$	20,879		$	19,523		$	1,356		6.9
Connections (‘000):(1)
Retail connections		103,330			98,930			4,400		4.4
Retail postpaid connections		97,273			93,186			4,087		4.4
Net additions in period (‘000):(2)
Retail connections		549			720			(171	)	(23.8	)
Retail postpaid connections		539			677			(138	)	(20.4	)
Churn Rate:
Retail connections		1.37	%		1.30	%
Retail postpaid connections		1.07	%		1.01	%
Account Statistics:
Retail postpaid ARPA	$	159.67		$	150.27		$	9.40		6.3
Retail postpaid accounts (‘000)(1)		35,061			34,943			118		0.3
Retail postpaid connections per account(1)		2.77			2.67			0.10		3.7

⁽¹⁾  As of end of period

⁽²⁾  Excluding acquisitions and adjustments

Wireless’ total operating revenues increased by $1.4 billion, or 6.9%, during the three months ended March 31, 2014 compared to the similar period in 2013 primarily as a result of growth in service revenue.

Accounts and Connections

Retail (non-wholesale) postpaid accounts represent retail customers under contract with Verizon Wireless that are directly served and managed by Verizon Wireless and use its branded services. Accounts include More Everything plans and corporate accounts, as well as legacy single connection plans and family plans. A single account may receive monthly wireless services for a variety of connected devices. Retail connections represent our retail customer device connections. Churn is the rate at which service to connections is terminated.

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Retail connections under an account may include: smartphones, basic phones, tablets and other Internet devices as well as Home Phone Connect and Home Fusion. We expect to continue to experience retail connection growth based on the strength of our product offerings and network service quality. Retail postpaid connection net additions decreased during the three months ended March 31, 2014 compared to the similar period in 2013 primarily due to an increase in our retail postpaid connection churn rate, partially offset by an increase in retail postpaid connection gross additions. During the three months ended March 31, 2014, retail postpaid connection net additions were negatively impacted by declines in basic phones and 3G smartphones as customers continue to demand 4G LTE smartphones and tablets. During the three months ended March 31, 2014, our retail postpaid connection net additions included approximately 634 thousand tablets as compared to 313 thousand tablets in the similar period in 2013.

Retail Postpaid Connections per Account

Retail postpaid connections per account is calculated by dividing the total number of retail postpaid connections by the number of retail postpaid accounts as of the end of the period. Retail postpaid connections per account increased 3.7% as of March 31, 2014 compared to March 31, 2013, primarily due to the increased penetration of tablets.

Service Revenue

Service revenue increased by $1.3 billion, or 7.5%, during the three months ended March 31, 2014 compared to the similar period in 2013 primarily driven by higher retail postpaid service revenue, which increased largely as a result of an increase in retail postpaid connections as well as the continued increase in penetration of 4G LTE smartphones and tablets through our More Everything plans. The penetration of 4G LTE smartphones was driven by the activation of smartphones by new customers as well as existing customers migrating from basic phones and 3G smartphones to 4G LTE smartphones.

The increase in retail postpaid ARPA during the three months ended March 31, 2014 compared to the similar period in 2013 was primarily driven by increases in smartphone penetration and retail postpaid connections per account. As of March 31, 2014, we experienced a 3.7% increase in retail postpaid connections per account, compared to March 31, 2013, with smartphones representing 72% of our retail postpaid phone base as of March 31, 2014 compared to 61% as of March 31, 2013. The increased penetration in retail postpaid connections per account is primarily due to increases in Internet data devices, which represented 11.3% of our retail postpaid connection base as of March 31, 2014 compared to 9.6% as of March 31, 2013, primarily due to activations of tablets. Additionally, during the three months ended March 31, 2014, postpaid smartphone activations represented 90% of phones activated compared to 84% in the similar period in 2013.

Other service revenue increased during the three months ended March 31, 2014 compared to the similar period in 2013 due to growth in wholesale connections and an increase in revenue related to third party roaming.

Equipment and Other Revenue

Equipment and other revenue increased during the three months ended March 31, 2014 compared to the similar period in 2013 primarily due to an increase in equipment sales, in part driven by the increased adoption of our Verizon Edge plan, which was partially offset by a decline in upgrade fees.

Operating Expenses

	Three Months Ended March 31,
(dollars in millions)	2014		2013		Increase/(Decrease)
Cost of services and sales	$	5,856	$	5,651	$	205	3.6	%
Selling, general and administrative expense		5,644		5,448		196	3.6
Depreciation and amortization expense		2,061		2,006		55	2.7
Total Operating Expenses	$	13,561	$	13,105	$	456	3.5

Cost of Services and Sales

Cost of services and sales increased during the three months ended March 31, 2014 compared to the similar period in 2013 primarily due to an increase in cost of equipment sales of $0.3 billion and an increase in cost of network services, partially offset by decreased data roaming, a decrease in cost of data services, and a decrease in network connection costs due to the deployment of Ethernet backhaul facilities primarily targeted at sites upgrading to 4G LTE.

29

Selling, General and Administrative Expense

Selling, general and administrative expense increased during the three months ended March 31, 2014 compared to the similar period in 2013 primarily due to gains recorded in the first quarter of 2013 related to wireless license exchange agreements, higher advertising expense associated with the launch of our More Everything plans and higher sales commission expense. Sales commission expense increased during the three months ended March 31, 2014, compared to the similar period in 2013 primarily as a result of an increase in the average commission per unit, as the mix of units continues to shift toward smartphones as more customers activate data services. This increase was partially offset by a decline in salary expense.

Depreciation and Amortization Expense

Depreciation and amortization expense increased during the three months ended March 31, 2014 compared to the similar period in 2013 primarily driven by an increase in net depreciable assets.

Segment Operating Income and EBITDA

	Three Months Ended March 31,
(dollars in millions)	2014			2013			Increase/(Decrease)
Segment Operating Income	$	7,318		$	6,418		$	900	14.0	%
Add Depreciation and amortization expense		2,061			2,006			55	2.7
Segment EBITDA	$	9,379		$	8,424		$	955	11.3
Segment operating income margin		35.0	%		32.9	%
Segment EBITDA service margin		52.1	%		50.4	%

The changes in the table above during the three months ended March 31, 2014 compared to the similar period in 2013 were primarily a result of the factors described in connection with operating revenues and operating expenses.

30

Wireline

Our Wireline segment provides voice, data and video communications products and enhanced services including broadband video and data, corporate networking solutions, data center and cloud services, security and managed network services and local and long distance voice services. We provide these products and services to consumers in the United States, as well as to carriers, businesses and government customers both in the United States and in over 150 other countries around the world.

Operating Revenues and Selected Operating Statistics

	Three Months Ended March 31,
(dollars in millions)	2014		2013		Increase/(Decrease)
Consumer retail	$	3,840	$	3,616	$	224		6.2
Small business		624		638		(14	)	(2.2	)
Mass Markets		4,464		4,254		210		4.9
Strategic services		2,110		2,073		37		1.8
Core		1,496		1,697		(201	)	(11.8	)
Global Enterprise		3,606		3,770		(164	)	(4.4	)
Global Wholesale		1,591		1,699		(108	)	(6.4	)
Other		129		107		22		20.6
Total Operating Revenues	$	9,790	$	9,830	$	(40	)	(0.4	)
Connections (‘000):(1)
Total voice connections		20,733		22,191		(1,458	)	(6.6	)
Total Broadband connections		9,031		8,894		137		1.5
FiOS Internet subscribers		6,170		5,612		558		9.9
FiOS Video subscribers		5,319		4,895		424		8.7

⁽¹⁾  As of end of period

Wireline’s revenues decreased 0.4% during the three months ended March 31, 2014 compared to the similar period in 2013 primarily driven by declines in Global Enterprise Core and Global Wholesale, partially offset by higher Consumer retail revenues driven by FiOS services and increased Strategic services revenues within Global Enterprise.

Mass Markets

Mass Markets operations provide broadband services (including high-speed Internet, FiOS Internet and FiOS Video services), local exchange (basic service and end-user access) and long distance (including regional toll) voice services to residential and small business subscribers.

Mass Markets revenues increased $0.2 billion, or 4.9%, during the three months ended March 31, 2014 compared to the similar period in 2013 primarily due to the expansion of FiOS services (Voice, Internet and Video) as well as changes in our pricing strategies, partially offset by the continued decline of local exchange revenues. FiOS represented approximately 74% of Consumer retail revenue during the three months ended March 31, 2014 compared to approximately 69% during the similar period in 2013.

Since April 1, 2013, we grew our subscriber base by 0.6 million FiOS Internet subscribers and 0.4 million FiOS Video subscribers, while also consistently improving penetration rates within our FiOS service areas. As of March 31, 2014, we achieved penetration rates of 39.7% and 35.0% for FiOS Internet and FiOS Video, respectively, compared to penetration rates of 38.2% and 34.1% for FiOS Internet and FiOS Video, respectively, as of March 31, 2013.

The increase in Mass Markets revenues, driven by FiOS services, was partially offset by the decline of local exchange revenues primarily due to a 5.8% decline in Consumer retail voice connections resulting primarily from competition and technology substitution with wireless, VoIP (voice over internet protocol), broadband and cable services. Total voice connections include traditional switched access lines in service as well as FiOS digital voice connections. There was also a decline in Small business retail voice connections, primarily reflecting competition and a shift to both IP and high-speed circuits.

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Global Enterprise

Global Enterprise offers Strategic services including network products and solutions, advanced communications services, and other core communications services to medium and large business customers, multinational corporations and state and federal government customers.

Global Enterprise revenues decreased $0.2 billion, or 4.4%, during the three months ended March 31, 2014 compared to the similar period in 2013 primarily due to a $0.1 billion, or 19.9%, decline in Core customer premise equipment revenues as well as lower voice services and data networking revenues, which consist of traditional circuit-based services such as frame relay, private line and Asynchronous Transfer Mode services. These core services declined compared to the similar period in 2013 as our customer base continued to migrate to next generation IP services. The decline in customer premise equipment revenues reflected our focus on improving margins by continuing to de-emphasize sales of equipment that are not part of an overall enterprise solutions bundle. The decline is also due to lower revenue from public sector customers. This decrease was partially offset by growth in Strategic services revenues which increased 1.8% during the three months ended March 31, 2014 compared to the similar period in 2013 primarily due to growth in advanced services, such as IP communications, our cloud and data center offerings, contact center solutions, security services and professional services as well as our telematics offerings. Strategic services revenues include revenues from the public sector, where we continue to experience revenue pressure. We believe Global Enterprise customers continue to be more focused on improving their cost structure as opposed to investing for growth, which creates revenue pressure for us.

Global Wholesale

Global Wholesale provides communications services including data, voice and local dial tone and broadband services primarily to local, long distance and other carriers that use our facilities to provide services to their customers.

Global Wholesale revenues decreased $0.1 billion, or 6.4%, during the three months ended March 31, 2014 compared to the similar period in 2013 primarily due to a decline in traditional voice revenues as a result of decreased MOUs and a 5.2% decline in domestic wholesale connections as of March 31, 2014 compared to March 31, 2013. The traditional voice product reductions are primarily due to competitors de-emphasizing their local market initiatives coupled with the effect of technology substitution. Also contributing to the decline in voice revenues is the continuing contraction of market rates due to competition. Partially offsetting the overall decrease in wholesale revenues were Ethernet migrations from core customers as well as continuing demand for high-speed digital data services from fiber-to-the-cell customers upgrading their core data circuits to Ethernet facilities. As a result of the customer upgrades, the number of core data circuits experienced a 12.7% decline as compared to the similar period in 2013.

Operating Expenses

	Three Months Ended March 31,
(dollars in millions)	2014		2013		Increase/(Decrease)
Cost of services and sales	$	5,459	$	5,457	$	2		–
Selling, general and administrative expense		2,151		2,265		(114	)	(5.0	)%
Depreciation and amortization expense		2,033		2,095		(62	)	(3.0	)
Total Operating Expenses	$	9,643	$	9,817	$	(174	)	(1.8	)

Cost of Services and Sales

During the three months ended March 31, 2014, Cost of services and sales was essentially unchanged compared to the similar period in 2013. The increase in content costs associated with continued FiOS subscriber growth and vendor rate increases was offset by the decline in access costs resulting primarily from declines in overall wholesale long distance volumes and a decrease in costs related to customer premise equipment, which reflected our focus on improving margins by de-emphasizing sales of equipment that are not part of an overall enterprise solutions bundle.

Selling, General and Administrative Expense

During the three months ended March 31, 2014, Selling, general and administrative expense decreased compared to the similar period in 2013 primarily due to declines in employee costs, primarily as a result of lower headcount, and lower advertising expenses.

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Depreciation and Amortization Expense

During the three months ended March 31, 2014, Depreciation and amortization expense decreased compared to the similar period in 2013 primarily due to a decrease in net depreciable assets.

Segment Operating Income and EBITDA

	Three Months Ended March 31,
(dollars in millions)	2014			2013			Increase/(Decrease)
Segment Operating Income	$	147		$	13		$	134		nm
Add Depreciation and amortization expense		2,033			2,095			(62	)	(3.0	)%
Segment EBITDA	$	2,180		$	2,108		$	72		3.4
Segment operating income margin		1.5	%		0.1	%
Segment EBITDA margin		22.3	%		21.4	%

nm – not meaningful

The changes in the table above during the three months ended March 31, 2014 compared to the similar period in 2013 were primarily a result of the factors described in connection with operating revenues and operating expenses.

Other Items

Wireless Transaction Costs

As a result of the third-party indebtedness incurred to finance the Wireless Transaction, we incurred interest expense of $0.4 billion during the three months ended March 31, 2014 (see “Consolidated Financial Condition”). This amount represents only the interest expense incurred prior to the closing of the Wireless Transaction.

Gain on Sale of Omnitel Interest

As a result of the sale of the Omnitel Interest on February 21, 2014, which was part of the consideration for the Wireless Transaction, we recorded a gain of $1.9 billion in Equity in earnings of unconsolidated businesses on our condensed consolidated statement of income for the three months ended March 31, 2014.

Early Debt Redemption Costs

During March 2014, we recorded net debt redemption costs of $0.9 billion in connection with the early redemption of $1.25 billion aggregate principal amount of Cellco Partnership and Verizon Wireless Capital LLC 8.50% Notes due 2018, and the purchase of the following in the Tender Offer: $0.7 billion of the $1.5 billion aggregate principal amount of Verizon 6.10% Notes due 2018, $0.8 billion of the $1.5 billion aggregate principal amount of Verizon 5.50% Notes due 2018, $0.6 billion of the $1.3 billion aggregate principal amount of Verizon 8.75% Notes due 2018, $0.7 billion of the $1.25 billion aggregate principal amount of Verizon 5.55% Notes due 2016, $0.4 billion of the $0.75 billion aggregate principal amount of Verizon 5.50% Notes due 2017, $0.6 billion of the $1.0 billion aggregate principal amount of Cellco Partnership and Verizon Wireless Capital LLC 8.50% Notes due 2018, $0.2 billion of the $0.3 billion aggregate principal amount of Alltel Corporation 7.00% Debentures due 2016 and $0.3 billion of the $0.6 billion aggregate principal amount of GTE Corporation 6.84% Debentures due 2018.

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Consolidated Financial Condition

	Three Months Ended March 31,
(dollars in millions)	2014			2013			Change
Cash Flows Provided By (Used In)
Operating activities	$	7,139		$	7,531		$	(392	)
Investing activities		(4,531	)		(3,599	)		(932	)
Financing activities		(53,229	)		(1,550	)		(51,679	)
Increase (Decrease) In Cash and Cash Equivalents	$	(50,621	)	$	2,382		$	(53,003	)

We use the net cash generated from our operations to fund network expansion and modernization, repay external financing, pay dividends and invest in new businesses. 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. The cash portion of the purchase price for the Wireless Transaction was primarily funded by the incurrence of third-party indebtedness (see “Acquisitions and Divestitures”). 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 investments or development activities or to maintain an appropriate capital structure to ensure our financial flexibility. Our cash and cash equivalents are primarily held domestically in diversified accounts and are invested to maintain principal and liquidity. Accordingly, we do not have significant exposure to foreign currency fluctuations. See “Market Risk” for additional information regarding our foreign currency risk management strategies.

The volatility in world debt and equity markets has not had a significant effect on our ability to access external financing. Our available external financing arrangements include 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 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, as well as a $2.0 billion 364-day revolving credit agreement.

Cash Flows Provided By Operating Activities

Our primary source of funds continues to be cash generated from operations, primarily from our Wireless segment. Net cash provided by operating activities during the three months ended March 31, 2014 decreased by $0.4 billion compared to the similar period in 2013 primarily due to a $1.3 billion increase in interest payments primarily due to the incremental debt needed to fund the Wireless Transaction and $0.2 billion in pension contributions, partially offset by higher consolidated earnings.

On February 21, 2014, we completed the acquisition of Vodafone’s indirect 45% interest in Verizon Wireless which, among other benefits discussed herein, also provides full access to the cash flows of Verizon Wireless. Having full access to all the cash flows from our wireless business gives us the ability to continue to invest in our networks and spectrum, meet evolving customer requirements for products and services and take advantage of new growth opportunities across our lines of business.

Cash Flows Used In Investing Activities

Capital Expenditures

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.

Capital expenditures, including capitalized software, were as follows:

	Three Months Ended March 31,
(dollars in millions)	2014			2013
Wireless	$	2,554		$	1,992
Wireline		1,385			1,434
Other		211			176
	$	4,150		$	3,602
Total as a percentage of revenue		13.5	%		12.2	%

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The increase in capital expenditures during the three months ended March 31, 2014 compared to the similar period in 2013 was primarily due to investments to increase the capacity of our 4G LTE network, partially offset by lower capital expenditures at Wireline as a result of decreased legacy spending requirements, which were partially offset by an increase in spending on our FiOS network.

Acquisitions

In February 2014, Verizon acquired a business dedicated to the development of IP television for cash consideration that was not significant.

Dispositions

On January 6, 2014, we announced agreements with T-Mobile USA, Inc. (T-Mobile USA) pursuant to which we will dispose of our remaining 700 MHz A block spectrum licenses, and as a result of these agreements we expect to receive cash consideration of approximately $2.4 billion and additional spectrum. See “Acquisitions and Divestitures” for additional information.

Cash Flows Used In Financing Activities

We seek to maintain 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. During the three months ended March 31, 2014 and 2013, net cash used in financing activities was $53.2 billion and $1.6 billion, respectively. The change in cash flows used in financing activities during three months ended March 31, 2014 as compared to the similar period in 2013 was primarily driven by the use of $58.89 billion as part of the consideration for the Wireless Transaction. See “Acquisitions and Divestitures” for additional information.

During February 2014, we issued €1.75 billion aggregate principal amount of 2.375% Notes due 2022, €1.25 billion aggregate principal amount of 3.25% Notes due 2026 and £0.85 billion aggregate principal amount of 4.75% Notes due 2034. The issuance of these Notes resulted in cash proceeds of approximately $5.4 billion, net of discounts and issuance costs. The net proceeds were used, in part, to finance the Wireless Transaction. Net proceeds not used to finance the Wireless Transaction were used for general corporate purposes. Also, during February 2014, we issued $0.5 billion aggregate principal amount of 5.90% Notes due 2054 resulting in cash proceeds of approximately $0.5 billion, net of discounts and issuance costs. The net proceeds were used for general corporate purposes.

On March 10, 2014, we announced the commencement of a tender offer (the Tender Offer) to purchase for cash any and all of the series of notes listed in the following table:

(dollars in millions, except for Purchase Price)	Interest Rate			Maturity		Principal Amount Outstanding		Purchase Price (1)		Principal Amount Purchased
Verizon Communications		6.10	%		2018	$	1,500	$	1,170.07	$	748
		5.50	%		2018		1,500		1,146.91		763
		8.75	%		2018		1,300		1,288.35		564
		5.55	%		2016		1,250		1,093.62		652
		5.50	%		2017		750		1,133.22		353
Cellco Partnership and Verizon Wireless Capital LLC		8.50	%		2018		1,000		1,279.63		619
Alltel Corporation		7.00	%		2016		300		1,125.26		157
GTE Corporation		6.84	%		2018		600		1,196.85		266
										$	4,122

⁽¹⁾  Per $1,000 principal amount of notes

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The Tender Offer for each series of notes was subject to a financing condition, which was either satisfied or waived with respect to all series. The Tender Offer expired on March 17, 2014 and settled on March 19, 2014. In addition to the purchase price, any accrued and unpaid interest on the purchased notes was paid to the date of purchase. During March 2014, we recorded early debt redemption costs in connection with the Tender Offer (see “Early Debt Redemption”).

During March 2014, we issued $4.5 billion aggregate principal amount of fixed and floating rate notes resulting in cash proceeds of approximately $4.5 billion, net of discounts and issuance costs. The issuances consisted of the following: $0.5 billion aggregate principal amount Floating Rate Notes due 2019 that bear interest at a rate equal to three-month LIBOR plus 0.77% which rate will be reset quarterly, $0.5 billion aggregate principal amount of 2.55% Notes due 2019, $1.0 billion aggregate principal amount of 3.45% Notes due 2021, $1.25 billion aggregate principal amount of 4.15% Notes due 2024 and $1.25 billion aggregate principal amount of 5.05% Notes due 2034. During March 2014, the net proceeds were used to purchase notes in the Tender Offer described above.

During March 2014, Verizon Wireless redeemed $1.25 billion aggregate principal amount of the Cellco Partnership and Verizon Wireless Capital LLC 8.50% Notes due 2018 at 127.135% of the principal amount of such notes, plus accrued and unpaid interest (see “Early Debt Redemption”). Also, during March 2014, $1.0 billion of LIBOR plus 0.61% Verizon Communications Notes and $1.5 billion of 1.95% Verizon Communications Notes matured and were repaid.

Verizon may continue to acquire debt securities issued by Verizon and its affiliates in the future through open market purchases, privately negotiated transactions, tender offers, exchange offers, or otherwise, upon such terms and at such prices as Verizon may from time to time determine for cash or other consideration.

Term Loan Agreement

During February 2014, we drew $6.6 billion pursuant to a term loan agreement with a group of major financial institutions to finance, in part, the Wireless Transaction. $3.3 billion of the loans under the term loan agreement have a maturity of three years and $3.3 billion of the loans under the term loan agreement have a maturity of five years (the 5-Year Loans). The 5-Year Loans provide for the partial amortization of principal during the last two years that they are outstanding. Loans under the term loan agreement bear interest at floating rates. The term loan agreement contains certain negative covenants, including a negative pledge covenant, a merger or similar transaction covenant and an accounting changes covenant, affirmative covenants and events of default that are customary for companies maintaining an investment grade credit rating. In addition, the term loan agreement requires us to maintain a leverage ratio (as defined in the term loan agreement) not in excess of 3.50:1.00, until our credit ratings are equal to or higher than A3 and A- at Moody’s Investors Service and Standard & Poor’s Ratings Services, respectively.

Other Credit Facilities

As of March 31, 2014, the unused borrowing capacity under our $6.2 billion credit facility was approximately $6.1 billion and the unused borrowing capacity under our $2.0 billion 364-day revolving credit agreement was $2.0 billion.

Early Debt Redemption

During March 2014, we recorded net debt redemption costs of $0.9 billion in connection with the early redemption of $1.25 billion aggregate principal amount of Cellco Partnership and Verizon Wireless Capital LLC 8.50% Notes due 2018, and the purchase of the following in the Tender Offer: $0.7 billion of the $1.5 billion aggregate principal amount of Verizon 6.10% Notes due 2018, $0.8 billion of the $1.5 billion aggregate principal amount of Verizon 5.50% Notes due 2018, $0.6 billion of the $1.3 billion aggregate principal amount of Verizon 8.75% Notes due 2018, $0.7 billion of the $1.25 billion aggregate principal amount of Verizon 5.55% Notes due 2016, $0.4 billion of the $0.75 billion aggregate principal amount of Verizon 5.50% Notes due 2017, $0.6 billion of the $1.0 billion aggregate principal amount of Cellco Partnership and Verizon Wireless Capital LLC 8.50% Notes due 2018, $0.2 billion of the $0.3 billion aggregate principal amount of Alltel Corporation 7.00% Debentures due 2016 and $0.3 billion of the $0.6 billion aggregate principal amount of GTE Corporation 6.84% Debentures due 2018.

Other, net

The change in Other, net financing activities during the three months ended March 31, 2014 compared to the similar period in 2013 was primarily driven by net early debt redemption costs of $0.9 billion.

Following the completion of the Wireless Transaction, in the second quarter of 2014 we will make our final tax distribution to Vodafone pursuant to the Cellco Partnership agreement.

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Dividends

As in prior periods, dividend payments were a significant use of capital resources. During the three months ended March 31, 2014 and 2013, respectively, we paid $1.5 billion in cash dividends.

Special Distribution

As a result of the completion of the Wireless Transaction on February 21, 2014, we now have full ownership of Verizon Wireless and will no longer make special distributions to Vodafone.

Common Stock

As a result of the Wireless Transaction, Verizon issued approximately 1.27 billion shares of Verizon common stock.

On February 28, 2014, our previously authorized share buyback program expired. On March 7, 2014, the Verizon Board of Directors approved a new share buyback program, which authorized the repurchase of up to 100 million shares of Verizon common stock terminating no later than the close of business on February 28, 2017. The program permits Verizon to repurchase shares over time, with the amount and timing of repurchases depending on market conditions and corporate needs.

Verizon did not repurchase any shares of Verizon common stock through its authorized share buyback program during the three months ended March 31, 2014.

Covenants

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, pay taxes, maintain insurance with responsible and reputable insurance companies, preserve our corporate existence, keep appropriate books and records of financial transactions, maintain our properties, provide financial and other reports to our lenders, limit pledging and disposition of assets and mergers and consolidations, and other similar covenants. Additionally, the term loan credit agreement and the 364-day revolving credit agreement require us to maintain a leverage ratio (as such term is defined in those agreements) not in excess of 3.50:1.00 until our credit ratings are equal to or higher than A3 and A- at Moody’s Investors Service and Standard & Poor’s Ratings Services, respectively.

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

Increase (Decrease) In Cash and Cash Equivalents

Our Cash and cash equivalents at March 31, 2014 totaled $2.9 billion, a $50.6 billion decrease compared to Cash and cash equivalents at December 31, 2013 primarily as a result of the completion of the Wireless Transaction.

Free Cash Flow

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 cash flow:

	Three Months Ended March 31,
(dollars in millions)	2014		2013		Change
Net cash provided by operating activities	$	7,139	$	7,531	$	(392	)
Less Capital expenditures (including capitalized software)		4,150		3,602		548
Free cash flow	$	2,989	$	3,929	$	(940	)

The change in Free cash flow during the three months ended March 31, 2014 compared to the similar period in 2013 was primarily due to a $1.3 billion increase in interest payments and $0.2 billion in pension contributions as well as higher capital expenditures, partially offset by higher consolidated earnings. Subsequent to the completion of the Wireless Transaction on February 21, 2014, we now have full access to all of the cash flows generated by our wireless business.

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Market Risk

We are exposed to various types of market risk in the normal course of business, including the effects 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 swap agreements, commodity swap and forward 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.

Interest Rate Risk

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 March 31, 2014, approximately 83% of the 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 $0.2 billion. The interest rates on our existing long-term debt obligations are unaffected by changes to our credit ratings.

Interest Rate Swaps

We enter into domestic interest rate swaps to achieve a targeted mix of fixed and variable rate debt. We principally receive fixed rates and pay variable rates based on LIBOR, resulting in a net increase or decrease to Interest expense. 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 condensed consolidated balance sheets as assets and liabilities. The fair value of these contracts was not material at March 31, 2014 and December 31, 2013, respectively. As of March 31, 2014, the total notional amount of the interest rate swaps was $1.8 billion. The ineffective portion of these interest rate swaps was not material for the three months ended March 31, 2014.

Forward Interest Rate Swaps

In order to manage our exposure to future interest rate changes, during the fourth quarter of 2013, we entered into forward interest rate swaps with a total notional value of $2.0 billion. We designated these contracts as cash flow hedges. In March 2014, we settled these forward interest rate swaps and the pre-tax gain was not material. During the three months ended March 31, 2014, we entered into forward interest rate swaps with a total notional value of $0.9 billion. We designated these contracts as cash flow hedges.

In April 2014, we entered into forward interest rate swaps with a total notional value of $1.6 billion. We designated these contracts as cash flow hedges.

Foreign Currency Translation

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 is recorded as cumulative translation adjustments, which are included in Accumulated other comprehensive 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 March 31, 2014, our primary translation exposure was to the British Pound Sterling, the Euro, the Australian Dollar and the Japanese Yen.

Cross Currency Swaps

Verizon Wireless previously entered into cross currency swaps designated as cash flow hedges to exchange approximately $1.6 billion of British Pound Sterling and Euro-denominated debt into U.S. dollars and to fix our future interest and principal payments in U.S. dollars, as well as to mitigate the effect of foreign currency transaction gains or losses.

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During February 2014, we entered into cross currency swaps designated as cash flow hedges to exchange approximately $5.4 billion of Euro and British Pound Sterling denominated debt into U.S. dollars and to fix our future interest and principal payments in U.S. dollars, as well as to mitigate the impact of foreign currency transaction gains or losses.

A portion of the gains and losses recognized in Other comprehensive loss was reclassified to Other income and (expense), net to offset the related pre-tax foreign currency transaction gain or loss on the underlying debt obligations. The fair value of the outstanding swaps was $0.2 billion at March 31, 2014 and was not material at December 31, 2013. During the three months ended March 31, 2014 and 2013, an immaterial pre-tax gain and a pre-tax loss of $0.1 billion, respectively, were recognized in Other comprehensive loss.

Acquisitions and Divestitures

Wireless

Wireless Transaction

On September 2, 2013, Verizon entered into a stock purchase agreement (the Stock Purchase Agreement) with Vodafone Group Plc (Vodafone) and Vodafone 4 Limited (Seller), pursuant to which Verizon agreed to acquire Vodafone’s indirect 45% interest in Cellco Partnership d/b/a Verizon Wireless (the Partnership, and such interest, the Vodafone Interest) for aggregate consideration of approximately $130 billion.

On February 21, 2014, pursuant to the terms and subject to the conditions set forth in the Stock Purchase Agreement, Verizon acquired (the Wireless Transaction) from Seller all of the issued and outstanding capital stock (the Transferred Shares) of Vodafone Americas Finance 1 Inc., a subsidiary of Seller (VF1 Inc.), which indirectly through certain subsidiaries (together with VF1 Inc., the Purchased Entities) owned the Vodafone Interest. In consideration for the Transferred Shares, upon completion of the Wireless Transaction, Verizon (i) paid approximately $58.89 billion in cash, (ii) issued approximately 1.27 billion shares of Verizon’s common stock, par value $0.10 per share (the Stock Consideration), which was valued at approximately $61.3 billion at the closing of the Wireless Transaction, (iii) issued senior unsecured Verizon notes in an aggregate principal amount of $5.0 billion (the Verizon Notes), (iv) sold Verizon’s indirectly owned 23.1% interest in Vodafone Omnitel N.V. (Omnitel, and such interest, the Omnitel Interest), valued at $3.5 billion and (v) provided other consideration, which included the assumption of preferred stock valued at approximately $1.7 billion. The total cash paid to Vodafone and the other costs of the Wireless Transaction, including financing, legal and bank fees, were financed through the incurrence of third-party indebtedness (see “Consolidated Financial Condition”).

In accordance with the accounting standard on consolidation, a change in a parent’s ownership interest while the parent retains a controlling financial interest in its subsidiary is accounted for as an equity transaction and remeasurement of assets and liabilities of previously controlled and consolidated subsidiaries is not permitted. As a result, we accounted for the Wireless Transaction by adjusting the carrying amount of the noncontrolling interest to reflect the change in Verizon’s ownership interest in the Partnership. Any difference between the fair value of the consideration paid and the amount by which the noncontrolling interest is adjusted has been recognized in equity attributable to Verizon.

Omnitel Transaction

On February 21, 2014, Verizon and Vodafone also consummated the sale of the Omnitel Interest (the Omnitel Transaction) by a subsidiary of Verizon to a subsidiary of Vodafone in connection with the Wireless Transaction pursuant to a separate share purchase agreement. As a result, during the three months ended March 31, 2014, we recognized a pre-tax gain of $1.9 billion on the disposal of the Omnitel interest in Equity in earnings of unconsolidated businesses on our condensed consolidated statement of income.

Verizon Notes

The Verizon Notes were issued to Vodafone pursuant to Verizon’s existing indenture. The Verizon Notes were issued in two separate series, with $2.5 billion due February 21, 2022 (the eight-year Verizon Notes) and $2.5 billion due February 21, 2025 (the eleven-year Verizon Notes). The Verizon Notes bear interest at a floating rate, which will be reset quarterly, with interest payable quarterly in arrears, beginning May 21, 2014. The eight-year Verizon Notes bear interest at a floating rate equal to three-month LIBOR, plus 1.222%, and the eleven-year Verizon Notes bear interest at a floating rate equal to three-month LIBOR, plus 1.372%. The indenture that governs the Verizon Notes contains certain negative covenants, including a negative pledge covenant and a merger or similar transaction covenant, affirmative covenants and events of default that are customary for companies maintaining an investment grade credit rating. An event of default for either series of the Verizon Notes may result in acceleration of the entire principal amount of all debt securities of that series. Beginning two years after the closing of the Wireless Transaction, Verizon may redeem all or any portion of the outstanding Verizon Notes held by Vodafone or any of its affiliates for a redemption price

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of 100% of the principal amount plus accrued and unpaid interest. The Verizon Notes may only be transferred by Vodafone to third parties in specified amounts during specified periods, commencing January 1, 2017. Any Verizon Notes held by third parties will not be redeemable by Verizon prior to their maturity dates. Verizon has agreed to file a registration statement with respect to the Verizon Notes at least three months prior to the Verizon Notes becoming transferable.

Other Consideration

Included in the other consideration provided to Vodafone is the indirect assumption of long-term obligations with respect to 5.143% Class D and Class E cumulative preferred stock (Preferred Stock) issued by one of the Purchased Entities. Both the Class D shares (825,000 shares outstanding) and Class E shares (825,000 shares outstanding) are mandatorily redeemable in April 2020 at $1,000 per share plus any accrued and unpaid dividends. Dividends accrue at 5.143% per annum and will be treated as interest expense. Both the Class D and Class E shares have been classified as liability instruments and were recorded at fair value as determined at the closing of the Wireless Transaction.

Deferred Tax Liabilities

Certain deferred taxes directly attributable to the Wireless Transaction have been calculated based on an analysis of taxes attributable to the difference between the tax basis of the investment in the noncontrolling interest that is assumed compared to Verizon’s book basis. As a result, Verizon recorded a deferred tax liability of approximately $13.5 billion.

Spectrum License Transactions

During the fourth quarter of 2013, we entered into license exchange agreements with T-Mobile USA to exchange certain Advanced Wireless Services (AWS) and Personal Communication Services (PCS) licenses. These non-cash exchanges, which are subject to customary closing conditions, are expected to close in the first half of 2014. The exchange includes a number of swaps that we expect will result in more efficient use of the AWS and PCS bands. As a result of these agreements, $0.9 billion of Wireless licenses are classified as held for sale and included in Prepaid expenses and other on our condensed consolidated balance sheets at March 31, 2014 and December 31, 2013, respectively. Upon completion of the transaction, we expect to record a gain which will be determined upon the closing of the transaction.

Subsequent to the transaction with T-Mobile USA in the fourth quarter of 2013, on January 6, 2014, we announced two agreements with T-Mobile USA with respect to our remaining 700 MHz A block spectrum licenses. Under one agreement, we will sell certain of these licenses to T-Mobile USA in exchange for cash consideration of approximately $2.4 billion, and under the second agreement we will exchange the remainder of these licenses for AWS and PCS spectrum licenses. As a result of these agreements, $3.3 billion of Wireless licenses are classified as held for sale and included in Prepaid expenses and other on our condensed consolidated balance sheet at March 31, 2014. These transactions are subject to customary closing conditions. These transactions are expected to close in the middle of 2014. Upon completion of these transactions, we expect to record a gain which will be determined upon the closing of these transactions.

During the three months ended March 31, 2014, we acquired various wireless licenses for cash consideration that was not significant.

Other

During February 2014, Verizon acquired a business dedicated to the development of IP television for cash consideration that was not significant. The transaction is expected to accelerate the availability of next-generation video services.

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Other Factors That May Affect Future Results

Regulatory and Competitive Trends

There have been no material changes to Regulatory and Competitive Trends as previously disclosed in Part II, Item 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, 2013.

Environmental Matters

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.

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Cautionary Statement Concerning Forward-Looking Statements

In this report 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 report and in other filings with the Securities and Exchange Commission (SEC), could affect future results and could cause those results to differ materially from those expressed in the forward-looking statements:

• the ability to realize the expected benefits of the Wireless Transaction in the timeframe expected or at all;

• an adverse change in the ratings afforded our debt securities by nationally accredited ratings organizations or adverse conditions in the credit markets affecting the cost, including interest rates, and/or availability of further financing;

• significantly increased levels of indebtedness as a result of the Wireless Transaction;

• changes in tax laws or treaties, or in their interpretation;

• adverse conditions in the U.S. and international economies;

• material adverse changes in labor matters, including labor negotiations, and any resulting financial and/or operational impact;

• material changes in technology or technology substitution;

• disruption of our key suppliers’ provisioning of products or services;

• changes in the regulatory environment in which we operate, including any increase in restrictions on our ability to operate our networks;

• breaches of network or information technology security, natural disasters, terrorist attacks or acts of war or significant litigation and any resulting financial impact not covered by insurance;

• the effects of competition in the markets in which we operate;

• changes in accounting assumptions that regulatory agencies, including the SEC, may require or that result from changes in the accounting rules or their application, which could result in an impact on earnings;

• significant increases in benefit plan costs or lower investment returns on plan assets; and

• the inability to implement our business strategies.

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Item 3. Quantitative and Qualitative Disclosures About Market Risk

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.”

Item 4. Controls and Procedures

Our chief executive officer and chief financial officer have evaluated the effectiveness of the Company’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 our disclosure controls and procedures were effective as of March 31, 2014.

In the ordinary course of business, we review our system of internal control over financial reporting and make changes to our systems and processes intended to ensure an effective internal control environment. We are continuing an initiative to implement new financial systems that will continue in phases over the next several quarters. We are also continuing an initiative to standardize and centralize transaction-processing activities within our accounting processes, which we expect to continue over the next several years. These initiatives will incorporate certain changes in personnel as well. In connection with these initiatives and the resulting changes in our financial systems and transaction-processing activities, the Company continues to enhance the design and documentation of our internal control processes to ensure that controls over our financial reporting remain effective.

Except as noted above, there were no changes in the Company’s internal control over financial reporting during the first quarter of 2014 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

Part II – Other Information

Item 1. Legal Proceedings

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 Idearc’s bankruptcy, alleged that Idearc was insolvent at the time of the spin-off or became insolvent shortly thereafter. The Litigation Trust sought over $9 billion in damages. Following a two-week trial in October 2012 limited to the question of the value of Idearc Inc. on the date of the spin-off, on January 22, 2013, the Court issued a decision finding that the value was “at least $12 billion.” As $12 billion exceeds the value of the debt and cash that Idearc transferred to Verizon on the date of the spin-off, the Court issued a related Order to Show Cause directing the Litigation Trust to submit a brief that “explains why any (or all) of its legal claims are viable in light of the court’s finding on Idearc’s value.” In its June 18, 2013 decision, the Court entered judgment for Verizon and its subsidiaries and ruled that U.S. Bank would “take nothing” on its claims. U.S. Bank appealed the decision to the U.S. Court of Appeals for the Fifth Circuit. Briefing was completed in the first quarter of 2014.

On October 25, 2011, a Litigation Trust created during the bankruptcy proceedings of FairPoint Communications, Inc. filed a complaint in state court in Mecklenburg County, North Carolina, against Verizon and other related entities. The complaint claims that FairPoint’s acquisition of Verizon’s landline operations in Maine, New Hampshire and Vermont in March 2008 was structured and carried out in a way that left FairPoint insolvent or led to its insolvency shortly thereafter and ultimately to its October 2009 bankruptcy. The Litigation Trust seeks approximately $2 billion in damages. Verizon removed the case to the United States District Court for the Western District of North Carolina in November 2011. At the close of discovery in February 2012, Verizon filed a summary judgment motion to dismiss the two counts in the complaint – constructive fraudulent transfer and actual fraudulent transfer. On June 12, 2013, the Court granted Verizon’s summary judgment motion in part, dismissing the Litigation Trust’s constructive fraudulent transfer claim. A bench trial limited to the actual fraudulent transfer claim concluded December 15, 2013. Post-trial briefing was completed in the first quarter of 2014.

In October 2013, the California Attorney General’s Office notified Verizon California Inc. and other Verizon companies of potential violations of California state hazardous waste statutes primarily arising from the disposal of electronic components, batteries and aerosol cans at certain California facilities. We are cooperating with this investigation and continue to review our operations relating to the management of hazardous waste. While penalties relating to the alleged violations could exceed $100,000, we do not expect that any penalties ultimately incurred will be material.

Item 1A. Risk Factors

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, 2013.

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

On February 28, 2014, our previously authorized share buyback program expired. On March 7, 2014, the Verizon Board of Directors approved a new share buyback program, which authorized the repurchase of up to 100 million shares of Verizon common stock terminating no later than the close of business on February 28, 2017. The program permits Verizon to repurchase shares over time, with the amount and timing of repurchases depending on market conditions and corporate needs.

Verizon did not repurchase any shares of Verizon common stock through its authorized share buyback program during the three months ended March 31, 2014. At March 31, 2014, the maximum number of shares that could be purchased by or on behalf of Verizon under our share buyback program was 100 million.

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Item 6. Exhibits

Exhibit Number	Description
10a	Verizon Communications Inc. Long-Term Incentive Plan – Performance Stock Unit Agreement 2014-16 Award Cycle.
10b	Verizon Communications Inc. Long-Term Incentive Plan – Restricted Stock Unit Agreement 2014-16 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.

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Signature

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.

	VERIZON COMMUNICATIONS INC.
Date: April 29, 2014	By	/s/ Anthony T. Skiadas
		Anthony T. Skiadas
		Senior Vice President and Controller
		(Principal Accounting Officer)

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Exhibit Index

Exhibit Number	Description
10a	Verizon Communications Inc. Long-Term Incentive Plan – Performance Stock Unit Agreement 2014-16 Award Cycle.
10b	Verizon Communications Inc. Long-Term Incentive Plan – Restricted Stock Unit Agreement 2014-16 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.

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EX-10.A

Exhibit 10a

VERIZON COMMUNICATIONS INC. LONG-TERM INCENTIVE PLAN

PERFORMANCE STOCK UNIT AGREEMENT

2014–2016 AWARD CYCLE

AGREEMENT between Verizon Communications Inc. (“Verizon” or the “Company”) and you (the “Participant”) and your heirs and beneficiaries.

1. Purpose of Agreement. The purpose of this Agreement is to provide a grant of performance stock units (“PSUs”) to the Participant.

2. Agreement. This Agreement is entered into pursuant to the 2009 Verizon Communications Inc. Long-Term Incentive Plan, as amended and restated (the “Plan”), and evidences the grant of a performance stock unit award in the form of PSUs pursuant to the Plan. In consideration of the benefits described in this Agreement, which Participant acknowledges are good, valuable and sufficient consideration, the Participant agrees to comply with the terms and conditions of this Agreement, including the Participant’s obligations and restrictions set forth in Exhibit A to this Agreement (the “Participant’s Obligations”) and the Participant’s obligations and restrictions set forth in Exhibit B to this Agreement (the “Non-Competition Obligations”), both of which are incorporated into and are a part of the Agreement. The PSUs and this Agreement are subject to the terms and provisions of the Plan. By executing this Agreement, the Participant agrees to be bound by the terms and provisions of the Plan and this Agreement, including but not limited to the Participant’s Obligations and the Non-Competition Obligations. In addition, the Participant agrees to be bound by the actions of the Human Resources Committee of Verizon Communication’s Board of Directors or any successor thereto (the “Committee”), and any designee of the Committee (to the extent that such actions are exercised in accordance with the terms of the Plan and this Agreement). If there is a conflict between the terms of the Plan and the terms of this Agreement, the terms of this Agreement shall control.

3. Contingency. The grant of PSUs is contingent on the Participant’s timely acceptance of this Agreement and satisfaction of the other conditions contained in it. Acceptance shall be through execution of the Agreement as set forth in paragraph 21. If the Participant does not accept this Agreement by the close of business on May 26, 2014, the Participant shall not be entitled to this grant of PSUs regardless of the extent to which the requirements in paragraph 5 (“Vesting”) are satisfied. In addition, to the extent a Participant is on a Company approved leave of absence, including but not limited to short-term disability leave, he or she will not be entitled to this grant of PSUs until such time as he or she returns to active employment with Verizon or a Related Company (as defined in paragraph 13) and accepts this Agreement within the time period established by the Company.

4. Number of Units. The Participant is granted the number of PSUs as specified in the Participant’s account under the 2014 PSU grant, administered by Fidelity Investments or any successor thereto (“Fidelity”). A PSU is a hypothetical share of Verizon’s common stock. The value of a PSU on any given date shall be equal to the closing price of Verizon’s common stock on the New York Stock Exchange (“NYSE”) as of such date. A Dividend Equivalent Unit (“DEU”) or fraction thereof shall be added to each PSU each time that a dividend is paid on Verizon’s common stock. The amount of each DEU shall be equal to the corresponding dividend paid on a share of Verizon’s common stock. The DEU shall be converted into PSUs or fractions thereof based upon the closing price of Verizon’s common stock traded on the NYSE on the dividend payment date of each declared dividend on Verizon’s common stock, and such PSUs or fractions thereof shall be added to the Participant’s PSU balance. To the extent that Fidelity or the Company makes an error, including but not limited to an administrative error with respect to the number or value of the PSUs granted to the Participant under this Agreement, the DEUs credited to the Participant’s account or the amount of the final award payment, the Company or Fidelity specifically reserves the right to correct such error at any time and the Participant agrees that he or she shall be legally bound by any corrective action taken by the Company or Fidelity.

5. Vesting.

(a) General. The Participant shall vest in the PSUs to the extent provided in paragraph 5(b) (“Performance Requirement”) only if the Participant satisfies the requirements of paragraph 5(c) (“Three-Year Continuous Employment Requirement”), except as otherwise provided in paragraph 7 (“Early Cancellation/Accelerated Vesting of PSUs”).

(b) Performance Requirement.

(1) General. The number of PSUs granted to the Participant, as specified in the Participant’s account under the 2014 PSU grant, is referred to as the “Target Number of PSUs.” The vesting of two-thirds (2/3) of the Target Number of PSUs (the “Target Number of TSR PSUs”) will be determined with reference to total shareholder return metrics as provided in paragraph 5(b)(2). The vesting of one-third (1/3) of the Target Number of PSUs (the “Target Number of FCF PSUs”) will be determined with reference to free cash flow metrics as provided in paragraph 5(b)(3). The total number of PSUs that vest will range from 0 to 200% of the Target Number of PSUs and will equal the sum of the Target Number of TSR PSUs that are eligible to vest pursuant to paragraph 5(b)(2) plus the Target Number of FCF PSUs that are eligible to vest pursuant to paragraph 5(b)(3). Notwithstanding anything in this paragraph 5(b), in all cases vesting remains subject to the requirements of paragraphs 5(c) and 7.

(2) TSR Metric. The percentage of the Target Number of TSR PSUs that shall vest will be based on the TSR (as defined below) of Verizon’s common stock during the three-year period beginning January 1, 2014, and ending at the close of business on December 31, 2016 (the “Award Cycle”), relative to the TSR of the common stock of each of the companies in the Related Dow Peers for the Award Cycle. The “Related Dow Peers” are the companies (other than Verizon) in the Dow Jones Industrial Average (Dow) Index and also including the four largest industry companies that are not in the Dow, as determined by the Committee and as constituted at the close of business on March 7, 2014. Notwithstanding paragraph 5(c), no portion of the Target Number of TSR PSUs shall vest unless the Committee determines that the Verizon Relative TSR Position (as defined below) is greater than 26. If the Committee determines that the Verizon Relative TSR Position is greater than 26, the percentage of the Target Number of TSR PSUs that shall vest (plus any additional PSUs added with respect to DEUs credited on the Target Number of TSR PSUs over the Award Cycle) will equal the Verizon TSR Vested Percentage (as defined below). For example, if (a) the Participant is granted 1,000 PSUs, and (b) those PSUs are credited with an additional 200 PSUs as a result of DEUs paid over the Award Cycle, and (c) the Verizon TSR Vested Percentage is 74%, 592 PSUs shall vest based on TSR (which is the 1,000 PSUs + 200 PSUs from DEUs, times 2/3 to reflect the portion of the total PSUs that will become eligible to vest with reference to TSR, times the Verizon TSR Vested Percentage of 74%).

(3) FCF Metric. The percentage of the Target Number of FCF PSUs that shall vest will be based on Verizon’s FCF (as defined below) for the Award Cycle. Notwithstanding paragraph 5(c), no portion of the Target Number of FCF PSUs shall vest unless the Committee determines that Verizon’s FCF for the Award Cycle is greater than or equal to $XXB. If the Committee determines that Verizon’s FCF for the Award Cycle is greater than or equal to $XXB, the percentage of the Target Number of FCF PSUs that shall vest (plus any additional PSUs added with respect to DEUs credited on the Target Number of FCF PSUs over the Award Cycle) will

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equal the Verizon FCF Vested Percentage (as defined below). For example, if (a) the Participant is granted 1,000 PSUs, and (b) those PSUs are credited with an additional 200 PSUs as a result of DEUs paid over the Award Cycle, and (c) the Verizon FCF Vested Percentage is 125%, 500 PSUs shall vest based on FCF (which is the 1,000 PSUs + 200 PSUs from DEUs, times 1/3 to reflect the portion of the total PSUs that will become eligible to vest with reference to FCF, times the Verizon FCF Vested Percentage of 125%).

(4) Definitions. For purposes of the performance requirement and payout formula set forth in paragraphs 5(b)(1) through 5(b)(3)—

(i) “Verizon TSR Vested Percentage” shall be an amount (between 0% and 200%), which is based on Verizon’s Relative TSR Position, as provided in the following table:

Verizon Relative TSR Position	Verizon TSR Vested Percentage
1 through 4	200%
5	172%
6	165%
7	158%
8	151%
9	144%
10	137%
11	130%
12	123%
13	116%
14	109%
15	102%
16	95%
17	88%
18	81%
19	74%
20	67%
21	60%
22	53%
23	46%
24	39%
25	32%
26 through 34	0%

(ii) “Verizon Relative TSR Position” shall be based upon Verizon’s rank during the Award Cycle among the Related Dow Peers in terms of TSR. The Committee shall determine the Verizon TSR Vested Percentage and the Verizon Relative TSR Position for the period. The Committee will make adjustments to preserve the intended incentives, and to the extent consistent with Section 162(m) of the Code (as defined in the Plan), should the common stock of any Related Dow Peer cease to be publicly traded during the Award Cycle. The Committee’s determinations shall be final and binding.

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(iii) “TSR” or “Total Shareholder Return” shall mean the change in the price of a share of common stock from the beginning of a period until the end of the applicable period, adjusted to reflect the reinvestment of dividends (if any) and as may be necessary to take into account stock splits or other events similar to those described in Section 4.3 of the Plan. The Committee shall determine TSR in accordance with its standard practice and its determinations shall be final and binding.

(iv) “Verizon FCF Vested Percentage” shall be an amount (between 0% and 200%), which is based on Verizon’s FCF, as provided in the following table:

Verizon FCF (in Billions)	Verizon FCF Vested Percentage
Greater than $XX	200%
$XX	150%
$XX	100%
$XX	50%
Less than $XX	0%

If the Verizon FCF is $XXB or less but greater than $XXB, or less than $XXB but greater than $XXB, or less than $XXB but greater than $XXB, the Verizon FCF Vested Percentage will be interpolated on a straight-line basis between the respective levels (for example, if the Verizon FCF is $XXB, the Verizon FCF Vested Percentage will be 75%).

(v) “FCF” shall mean Verizon’s net cash provided by operating activities less capital expenditures, as such terms are used in Verizon’s consolidated financial statements, on a consolidated basis for the Award Cycle. The Committee will (to the extent necessary and without duplication) adjust such net cash provided by operating activities less capital expenditures to eliminate the financial impact of (i) acquisitions, divestitures or changes in business structure; (ii) changes in legal, tax, accounting or regulatory policy; and (iii) other items that are extraordinary in nature or not deemed to be in the ordinary course of business. The Committee’s determination of whether, and the extent to which, any such adjustment is necessary shall be final and binding.

(c) Three-Year Continuous Employment Requirement. Except as otherwise determined by the Committee, or except as otherwise provided in paragraph 7 (“Early Cancellation/Accelerated Vesting of PSUs”), the PSUs shall vest only if the Participant is continuously employed by the Company or a Related Company (as defined in paragraph 13) from the date the PSUs are granted through the end of the Award Cycle.

(d) Effect of a Termination for Cause. Notwithstanding paragraph 5(b), paragraph 5(c) or paragraph 7, if the Participant’s employment by the Company or a Related Company is terminated by the Company or a Related Company for Cause at any time prior to the date that the PSUs are paid pursuant to paragraph 6, the PSUs (whether vested or not) shall automatically terminate and be cancelled as of the applicable termination date without payment of any consideration by the Company and without any other action by the Participant. For purposes of this Agreement, “Cause” means (i) grossly incompetent performance or substantial or continuing inattention to or neglect of the duties and responsibilities assigned to the Participant; fraud, misappropriation or embezzlement; or a material breach of the Verizon Code of Conduct (as may be amended) or any of the Participant’s

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Obligations or the Non-Competition Obligations, all as determined by the Executive Vice President and Chief Administrative Officer of Verizon (or his or her designee) in his or her discretion, or (ii) commission of any felony of which the Participant is finally adjudged guilty by a court of competent jurisdiction.

(e) Transfer. Transfer of employment from Verizon to a Related Company, from a Related Company to Verizon, or from one Related Company to another Related Company shall not constitute a separation from employment hereunder, and service with a Related Company shall be treated as service with the Company for purposes of the three-year continuous employment requirement in paragraph 5(c). If the Participant transfers employment pursuant to this paragraph 5(e), the Participant will still be required to satisfy the definition of “Retire” under paragraph 7 of this Agreement in order to be eligible for the accelerated vesting provisions in connection with a retirement.

6. Payment. All payments under this Agreement shall be made in cash. Subject to paragraph 5(d), as soon as practicable after the end of the Award Cycle (but in no event later than March 15, 2017), the value of the vested PSUs (minus any withholding for taxes) shall be paid to the Participant (subject, however, to any deferral application that the Participant has made under the deferral plan (if any) then available to the Participant). The amount of cash that shall be paid (plus withholding for taxes and any applicable deferral amount) shall equal the number of vested PSUs (as provided in paragraph 5(b)) times the closing price of Verizon’s common stock on the NYSE as of the last trading day in the Award Cycle. If the Participant dies before any payment due hereunder is made, such payment shall be made to the Participant’s beneficiary, as designated under paragraph 11. Once a payment has been made with respect to a PSU, the PSU shall be canceled; however, all other terms of the Agreement, including but not limited to the Participant’s Obligations and the Non-Competition Obligations, shall remain in effect.

7. Early Cancellation/Accelerated Vesting of PSUs. Notwithstanding the provisions of paragraph 5, PSUs may vest or be forfeited before the end of the Award Cycle as follows:

(a) Retirement Before July 1, 2014, Voluntary Separation On or Before December 31, 2016, or Other Separation Not Described in Paragraph 7(b). If the Participant (i) Retires (as defined in paragraph 7(b)(4)) before July 1, 2014, (ii) voluntarily separates from employment on or before December 31, 2016 for any reason other than Retirement, or (iii) otherwise separates from employment on or before December 31, 2016 under circumstances not described in paragraph 7(b), all the PSUs shall automatically terminate and be cancelled as of the applicable termination date without payment of any consideration by the Company and without any other action by the Participant.

(b) Retirement After June 30, 2014, Involuntary Termination Without Cause On or Before December 31, 2016, Termination Due to Death or Disability On or Before December 31, 2016.

(1) This paragraph 7(b) shall apply if the Participant:

(i) Retires (as defined below) after June 30, 2014, or

(ii) Separates from employment by reason of an involuntary termination without Cause (as determined by the Executive Vice President and Chief Administrative Officer of Verizon (or his or her designee)), death, or Disability (as defined below) on or before December 31, 2016. “Disability” shall mean the total and permanent disability of the Participant as defined by, or determined under, the Company’s long-term disability benefit plan.

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(2) If the Participant separates from employment on or before December 31, 2016 under circumstances described in paragraph 7(b)(1), the Participant’s PSUs shall be subject to the vesting provisions set forth in paragraph 5(a) and 5(b) (without prorating the award), except that the three-year continuous employment requirement set forth in paragraph 5(c) shall not apply, provided that the Participant has not and does not commit a material breach of any of the Participant’s Obligations or the Non-Competition Obligations and provided that the Participant executes, within the time prescribed by Verizon, a release satisfactory to Verizon waiving any claims he or she may have against Verizon and any Related Company (otherwise, paragraph 7(a) shall apply).

(3) Any PSUs that vest pursuant to paragraph 7(b)(2) shall be payable as soon as practicable after the end of the Award Cycle (but in no event later than March 15, 2017).

(4) For purposes of this Agreement, “Retire” and “Retirement” means (i) to retire after having attained at least 15 years of vesting service (as defined under the applicable Verizon tax-qualified 401(k) savings plan) and a combination of age and years of vesting service that equals or exceeds 75 points, or (ii) retirement under any other circumstances determined in writing by the Executive Vice President and Chief Administrative Officer of Verizon (or his or her designee), provided that, in the case of either (i) or (ii) in this paragraph, the retirement was not occasioned by a discharge for Cause. Notwithstanding the preceding sentence, if the Participant is employed in the United Kingdom, “Retire” or “Retirement” shall mean: (A) subject to applicable law, a termination of employment on the grounds of age, provided that the Participant has attained at least age 65; or (B) retirement under any other circumstances determined in writing by the Executive Vice President and Chief Administrative Officer of Verizon (or his or her designee), provided that, in the case of either (A) or (B) in this paragraph, the retirement was not occasioned by a discharge for Cause.

(c) Change in Control. If a Participant is involuntarily terminated without Cause within twelve (12) months following the occurrence of a Change in Control of Verizon (as defined in the Plan) and before the end of the Award Cycle, the PSUs shall vest and become payable (without prorating the award) by applying a Verizon TSR Vested Percentage of 100%, and a Verizon FCF Vested Percentage of 100%, to the PSUs without regard to the performance requirements in paragraph 5(b) or the three-year continuous employment requirement in paragraph 5(c); however, all other terms of the Agreement, including but not limited to the Participant’s Obligations and the Non-Competition Obligations, shall remain in effect. A Change in Control or an involuntary termination without Cause that occurs after the end of the Award Cycle shall have no effect on whether any PSUs vest or become payable under this paragraph 7(c). If both paragraph 7(b) and this paragraph 7(c) would otherwise apply in the circumstances, this paragraph 7(c) shall control. All payments provided in this paragraph 7(c) shall be made at their regularly scheduled time as specified in paragraph 6.

(d) Vesting Schedule. Except and to the extent provided in paragraphs 7(b) and (c), nothing in this paragraph 7 shall alter the vesting schedule prescribed by paragraph 5.

8. Shareholder Rights. The Participant shall have no rights as a shareholder with respect to the PSUs. Except as provided in the Plan or in this Agreement, no adjustment shall be made for dividends or other rights for which the record date occurs while the PSUs are outstanding.

9. Amendment of Agreement. Except to the extent required by law or specifically contemplated under this Agreement, neither the Committee nor the Executive Vice President and Chief Administrative Officer of Verizon (or his or her designee) may, without the written consent of the Participant, change any term, condition or provision affecting the PSUs if the change would have a material adverse effect upon the

6

PSUs or the Participant’s rights thereto. Nothing in the preceding sentence shall preclude the Committee or the Executive Vice President and Chief Administrative Officer of Verizon (or his or her designee) from exercising administrative discretion with respect to the Plan or this Agreement, and the exercise of such discretion shall be final, conclusive and binding. This discretion includes, but is not limited to, corrections of any errors, including but not limited to any administrative errors, determining the total percentage of PSUs that become payable, and determining whether the Participant has been discharged for Cause, has a disability, has Retired, has breached any of the Participant’s Obligations or the Non-Competition Obligations or has satisfied the requirements for vesting and payment under paragraphs 5 and 7 of this Agreement.

10. Assignment. The PSUs shall not be assigned, pledged or transferred except by will or by the laws of descent and distribution. During the Participant’s lifetime, the PSUs may be deferred only by the Participant or by the Participant’s guardian or legal representative in accordance with the deferral regulations, if any, established by the Company.

11. Beneficiary. The Participant shall designate a beneficiary in writing and in such manner as is acceptable to the Executive Vice President and Chief Administrative Officer of Verizon (or his or her designee). Each such designation shall revoke all prior designations by the Participant with respect to the Participant’s benefits under the Plan and shall be effective only when filed by the Participant with the Company during the Participant’s lifetime. If the Participant fails to so designate a beneficiary, or if no such designated beneficiary survives the Participant, the Participant’s beneficiary shall be the Participant’s estate.

12. Other Plans and Agreements. Any payment received (or deferred) by the Participant pursuant to this Agreement shall not be taken into account as compensation in the determination of the Participant’s benefits under any pension, savings, life insurance, severance or other benefit plan maintained by Verizon or a Related Company. The Participant acknowledges that this Agreement or any prior PSU agreement shall not entitle the Participant to any other benefits under the Plan or any other plans maintained by the Company or a Related Company.

13. Company and Related Company. For purposes of this Agreement, “Company” means Verizon Communications Inc. “Related Company” means (a) any corporation, partnership, joint venture, or other entity in which Verizon Communications Inc. holds a direct or indirect ownership or proprietary interest of 50 percent or more at any time during the term of this Agreement, or (b) any corporation, partnership, joint venture, or other entity in which Verizon Communications Inc. holds a direct or indirect ownership or other proprietary interest of less than 50 percent at any time during the term of this Agreement but which, in the discretion of the Committee, is treated as a Related Company for purposes of this Agreement.

14. Employment Status. The grant of the PSUs shall not be deemed to constitute a contract of employment for a particular term between the Company or a Related Company and the Participant, nor shall it constitute a right to remain in the employ of any such Company or Related Company.

15. Withholding. The Participant acknowledges that he or she shall be responsible for any taxes that arise in connection with this grant of PSUs, and the Company shall make such arrangements as it deems necessary for withholding of any taxes it determines are required to be withheld pursuant to any applicable law or regulation.

16. Securities Laws. The Company shall not be required to make payment with respect to any shares of common stock prior to the admission of such shares to listing on any stock exchange on which the stock may then be listed and the completion of any registration or qualification of such shares under any federal or state law or rulings or regulations of any government body that the Company, in its discretion, determines to be necessary or advisable.

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17. Committee Authority. The Committee shall have complete discretion in the exercise of its rights, powers, and duties under this Agreement. Any interpretation or construction of any provision of, and the determination of any question arising under, this Agreement shall be made by the Committee in its discretion, as described in paragraph 9. The Committee and the Audit Committee may designate any individual or individuals to perform any of its functions hereunder and utilize experts to assist in carrying out their duties hereunder.

18. Successors. This Agreement shall be binding upon, and inure to the benefit of, any successor or successors of the Company and the person or entity to whom the PSUs may have been transferred by will, the laws of descent and distribution, or beneficiary designation. All terms and conditions of this Agreement imposed upon the Participant shall, unless the context clearly indicates otherwise, be deemed, in the event of the Participant’s death, to refer to and be binding upon the Participant’s heirs and beneficiaries.

19. Construction. In the event that any provision of this Agreement is held invalid or unenforceable, such provision shall be considered separate and apart from the remainder of this Agreement, which shall remain in full force and effect. In the event that any provision, including any of the Participant’s Obligations or the Non-Competition Obligations, is held to be unenforceable for being unduly broad as written, such provision shall be deemed amended to narrow its application to the extent necessary to make the provision enforceable according to applicable law and shall be enforced as amended. The PSUs are intended to qualify as “performance-based compensation” within the meaning of Section 162(m) of the Code, and to not be subject to any tax, interest or penalty under Section 409A of the Code, and this Agreement shall be construed and interpreted consistent with such intents.

20. Defined Terms. Except where the context clearly indicates otherwise, all capitalized terms used herein shall have the definitions ascribed to them by the Plan, and the terms of the Plan shall apply where appropriate.

21. Execution of Agreement. The Participant shall indicate his or her consent and acknowledgment to the terms of this Agreement (including the Participant’s Obligations and the Non-Competition Obligations) and the Plan by executing this Agreement pursuant to the instructions provided and otherwise shall comply with the requirements of paragraph 3. In addition, by consenting to the terms of this Agreement and the Participant’s Obligations and the Non-Competition Obligations, the Participant expressly agrees and acknowledges that Fidelity may deliver all documents, statements and notices associated with the Plan and this Agreement to the Participant in electronic form. The Participant and Verizon hereby expressly agree that the use of electronic media to indicate confirmation, consent, signature, acceptance, agreement and delivery shall be legally valid and have the same legal force and effect as if the Participant and Verizon executed this Agreement (including the Participant’s Obligations and the Non-Competition Obligations) in paper form.

22. Confidentiality. Except to the extent otherwise required by law, the Participant shall not disclose, in whole or in part, any of the terms of this Agreement. This paragraph 22 does not prevent the Participant from disclosing the terms of this Agreement to the Participant’s spouse or beneficiary or to the Participant’s legal, tax, or financial adviser, provided that the Participant take all reasonable measures to assure that the individual to whom disclosure is made does not disclose the terms of this Agreement to a third party except as otherwise required by law.

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23. Applicable Law. Except as expressly provided in Exhibit B, the validity, construction, interpretation and effect of this Agreement shall be governed by and construed in accordance with the laws of the State of Delaware, without giving effect to the conflicts of laws provisions thereof.

24. Notice. Any notice to the Company provided for in this Agreement shall be addressed to the Company in care of the Executive Vice President and Chief Administrative Officer of Verizon at 140 West Street, 6^th Floor, New York, New York 10007 and any notice to the Participant shall be addressed to the Participant at the current address shown on the payroll of the Company, or to such other address as the Participant may designate to the Company in writing. Any notice shall be delivered by hand, sent by telecopy, sent by overnight carrier, or enclosed in a properly sealed envelope as stated above, registered and deposited, postage prepaid, in a post office regularly maintained by the United States Postal Service.

25. Dispute Resolution.

(a) General. Except as otherwise provided in paragraph 26 below, all disputes arising under or related to the Plan or this Agreement and all claims in which a Participant seeks damages or other relief that relate in any way to PSUs or other benefits of the Plan are subject to the dispute resolution procedure described below in this paragraph 25.

(i) For purposes of this Agreement, the term “Units Award Dispute” shall mean any claim against the Company or a Related Company, other than Employment Claims described in paragraph (a)(ii) below, regarding (A) the interpretation of the Plan or this Agreement, (B) any of the terms or conditions of the PSUs issued under this Agreement, or (C) allegations of entitlement to PSUs or additional PSUs, or any other benefits, under the Plan or this Agreement; provided, however, that any dispute relating to the Participant’s Obligations or the Non-Competition Obligations or to the forfeiture of an award as a result of a breach of any of the Participant’s Obligations or the Non-Competition Obligations shall not be subject to the dispute resolution procedures provided for in this paragraph 25.

(ii) For purposes of this Agreement, the term “Units Damages Dispute” shall mean any claims between the Participant and the Company or a Related Company (or against the past or present directors, officers, employees, representatives, or agents of the Company or a Related Company, whether acting in their capacity as such or otherwise), that are related in any way to the Participant’s employment or former employment, including claims of alleged employment discrimination, wrongful termination, or violations of Title VII of the Civil Rights Act of 1964, the Americans with Disabilities Act, the Age Discrimination in Employment Act, 42 U.S.C. § 1981, the Fair Labor Standards Act, the Family Medical Leave Act, the Sarbanes-Oxley Act, or any other U.S. federal, state or local law, statute, regulation, or ordinance relating to employment or any common law theories of recovery relating to employment, such as breach of contract, tort, or public policy claims (“Employment Claims”), in which the damages or other relief sought relate in any way to PSUs or other benefits of the Plan or this Agreement.

(b) Internal Dispute Resolution Procedure. All Units Award Disputes, and all Units Damages Dispute alleging breach of contract, tort, or public policy claims with respect to the Plan or this Agreement (collectively, “Plan Disputes”), shall be referred in the first instance to the Verizon Employee Benefits Committee (“EB Committee”) for resolution internally within Verizon. Except where otherwise prohibited by law, all Plan Disputes must be filed in writing with the EB Committee no later than one year from the date that the dispute accrues. Consistent with paragraph 25(c)(i) of this Agreement, all decisions relating to the enforceability of the limitations period contained herein

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shall be made by the arbitrator. To the fullest extent permitted by law, the EB Committee shall have full power, discretion, and authority to interpret the Plan and this Agreement and to decide all Plan Disputes brought under this Plan and Agreement. Determinations made by the EB Committee shall be final, conclusive and binding, subject only to review by arbitration pursuant to paragraph (c) below under the arbitrary and capricious standard of review.

(c) Arbitration. All appeals from determinations by the EB Committee as described in paragraph (b) above, and any Units Damages Dispute, shall be fully and finally settled by arbitration administered by the American Arbitration Association (“AAA”) on an individual basis (and not on a collective or class action basis) before a single arbitrator pursuant to the AAA’s Commercial Arbitration Rules in effect at the time any such arbitration is initiated. Any such arbitration must be initiated in writing pursuant to the aforesaid rules of the AAA no later than one year from the date that the claim accrues, except where a longer limitations period is required by applicable law. Decisions about the applicability of the limitations period contained herein shall be made by the arbitrator. A copy of the AAA’s Commercial Arbitration Rules may be obtained from Human Resources. The Participant agrees that the arbitration shall be held at the office of the AAA nearest the place of the Participant’s most recent employment by the Company or a Related Company, unless the parties agree in writing to a different location. All claims by the Company or a Related Company against the Participant, except for breaches of any of the Participant’s Obligations or of the Non-Competition Obligations, may also be raised in such arbitration proceedings.

(i) The arbitrator shall have the authority to determine whether any dispute submitted for arbitration hereunder is arbitrable. The arbitrator shall decide all issues submitted for arbitration according to the terms of the Plan, this Agreement (except for breaches of any of the Participant’s Obligations or of the Non-Competition Obligations), existing Company policy, and applicable substantive Delaware State and U.S. federal law and shall have the authority to award any remedy or relief permitted by such laws. The final decision of the EB Committee with respect to a Plan Dispute shall be upheld unless such decision was arbitrary or capricious. The decision of the arbitrator shall be final, conclusive, not subject to appeal, and binding and enforceable in any applicable court.

(ii) The Participant understands and agrees that, pursuant to this Agreement, both the Participant and the Company or a Related Company waive any right to sue each other in a court of law or equity, to have a trial by jury, or to resolve disputes on a collective, or class, basis (except for breaches of any of the Participant’s Obligations or of the Non-Competition Obligations), and that the sole forum available for the resolution of Units Award Disputes and Units Damages Disputes is arbitration as provided in this paragraph 25. If an arbitrator or court finds that the arbitration provisions of this Agreement are not enforceable, both Participant and the Company or a Related Company understand and agree to waive their right to trial by jury of any Units Award Dispute or Units Damages Dispute. This dispute resolution procedure shall not prevent either the Participant or the Company or a Related Company from commencing an action in any court of competent jurisdiction for the purpose of obtaining injunctive relief to prevent irreparable harm pending and in aid of arbitration hereunder; in such event, both the Participant and the Company or a Related Company agree that the party who commences the action may proceed without necessity of posting a bond.

(iii) In consideration of the Participant’s agreement in paragraph (ii) above, the Company or a Related Company will pay all filing, administrative and arbitrator’s fees incurred in connection with the arbitration proceedings. If the AAA requires the Participant to pay

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the initial filing fee, the Company or a Related Company will reimburse the Participant for that fee. All other fees incurred in connection with the arbitration proceedings, including but not limited to each party’s attorney’s fees, will be the responsibility of such party.

(iv) The parties intend that the arbitration procedure to which they hereby agree shall be the exclusive means for resolving all Units Award Disputes (subject to the mandatory EB Committee procedure provided for in paragraph 25(b) above) and Units Damages Disputes. Their agreement in this regard shall be interpreted as broadly and inclusively as reason permits to realize that intent.

(v) The Federal Arbitration Act (“FAA”) shall govern the enforceability of this paragraph 25. If for any reason the FAA is held not to apply, or if application of the FAA requires consideration of state law in any dispute arising under this Agreement or subject to this dispute resolution provision, the laws of the State of Delaware shall apply without giving effect to the conflicts of laws provisions thereof.

(vi) To the extent an arbitrator determines that the Participant was not terminated for Cause and is entitled to the PSUs or any other benefits under the Plan pursuant to the provisions applicable to an involuntary termination without Cause, the Participant’s obligation to execute a release satisfactory to Verizon as provided under paragraph 7(b)(2) shall remain applicable in order to receive the benefit of any PSUs pursuant to this Agreement.

26. Additional Remedies. Notwithstanding the dispute resolution procedures, including arbitration, of paragraph 25 of this Agreement, and in addition to any other rights or remedies, whether legal, equitable, or otherwise, that each of the parties to this Agreement may have (including the right of the Company to terminate the Participant for Cause or to involuntarily terminate the Participant without Cause), the Participant acknowledges that—

(a) The Participant’s Obligations and the restrictions in the Non-Competition Obligations are essential to the continued goodwill and profitability of the Company and any Related Company;

(b) The Participant has broad-based skills that will serve as the basis for other employment opportunities that are not prohibited by the Participant’s Obligations or the Non-Competition Obligations;

(c) When the Participant’s employment with the Company or any Related Company terminates, the Participant shall be able to earn a livelihood without violating any of the Participant’s Obligations or the Non-Competition Obligations;

(d) Irreparable damage to the Company or any Related Company shall result in the event that the Participant’s Obligations and the Non-Competition Obligations are not specifically enforced and that monetary damages will not adequately protect the Company and any Related Company from a breach of these Participant’s Obligations or the Non-Competition Obligations;

(e) If any dispute arises concerning the violation or anticipated or threatened violation by the Participant of any of the Participant’s Obligations or of the Non-Competition Obligations, an injunction may be issued restraining such violation pending the determination of such controversy, and no bond or other security shall be required in connection therewith;

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(f) The Participant’s Obligations and the Non-Competition Obligations shall continue to apply after any expiration, termination, or cancellation of this Agreement;

(g) The Participant’s breach of any of the Participant’s Obligations or the Non-Competition Obligations shall result in the Participant’s immediate forfeiture of all rights and benefits, including all PSUs and DEUs, under this Agreement; and

(h) All disputes relating to the Participant’s Obligations or the Non-Competition Obligations, including their interpretation and enforceability and any damages (including but not limited to damages resulting in the forfeiture of an award or benefits under this Agreement) that may result from the breach of such Participant’s Obligations or the Non-Competition Obligations shall not be subject to the dispute resolution procedures, including arbitration, of paragraph 25 of this Agreement, but shall instead be determined in a court of competent jurisdiction.

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Exhibit A – Participant’s Obligations

As part of the Agreement to which this Exhibit A is attached, you, the Participant, agree to the following obligations:

1. Effect of a Material Restatement of Financial Results; Recoupment; Company Policies Regarding Securities Transactions

(a) General. Notwithstanding anything in this Agreement to the contrary, you agree that, with respect to all PSUs granted to you on or after January 1, 2007 and all short-term incentive awards made to you on or after January 1, 2007, to the extent the Company or any Related Company is required to materially restate any financial results based upon your willful misconduct or gross negligence while employed by the Company or any Related Company (and where such restatement would have resulted in a lower payment being made to you), you will be required to repay all previously paid or deferred (i) PSUs and (ii) short-term incentive awards that were provided to you during the performance periods that are the subject of the restated financial results, plus a reasonable rate of interest. For purposes of this paragraph, “willful misconduct” and “gross negligence” shall be as determined by the Committee. The Audit Committee of the Verizon Board of Directors shall determine whether a material restatement of financial results has occurred. If you do not repay the entire amount required under this paragraph, the Company may, to the extent permitted by applicable law, offset your obligation to repay against any source of income available to it, including but not limited to any money you may have in your nonqualified deferral accounts.

(b) Requirements of Recoupment Policy or Applicable Law. The repayment rights contained in paragraph 1(a) of Exhibit A shall be in addition to, and shall not limit, any other rights or remedies that the Company may have under law or in equity, including, without limitation, (i) any right that the Company may have under any Company recoupment policy that may apply to you, or (ii) any right or obligation that the Company may have regarding the clawback of “incentive-based compensation” under Section 10D of the Securities Exchange Act of 1934, as amended (as determined by the applicable rules and regulations promulgated thereunder from time to time by the U.S. Securities and Exchange Commission) or under any other applicable law. By accepting this award of PSUs, you agree and consent to the Company’s application, implementation and enforcement of any such Company recoupment policy (as it may be in effect from time to time) that may apply to you and any provision of applicable law relating to cancellation, rescission, payback or recoupment of compensation and expressly agree that the Company may take such actions as are permitted under any such policy (as applicable to you) or applicable law, such as the cancellation of PSUs and repayment of amounts previously paid or deferred with respect to any previously granted PSUs or short-term incentive awards, without further consent or action being required by you.

(c) Company Policies Regarding Securities Transactions. By accepting this award of PSUs, you agree to comply with all Company policies regarding trading in securities or derivative securities (including, without limitation, the Company’s policies prohibiting trading on material inside information regarding the Company or any business with which the Company does business, the Company’s policies prohibiting engaging in financial transactions that would allow you to benefit from a devaluation of the Company’s securities, and any additional policy that the Company may adopt prohibiting you from hedging your economic exposure to the Company’s securities), as such policies are in effect from time to time and for as long as such policies are applicable to you.

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2. Definitions. Except where clearly provided to the contrary or as otherwise defined in this Exhibit A, all capitalized terms used in this Exhibit A shall have the definitions given to those terms in the Agreement to which this Exhibit A is attached.

3. Agreement to Participant’s Obligations. You shall indicate your agreement to these Participant’s Obligations in accordance with the instructions provided in the Agreement, and your acceptance of the Agreement shall include your acceptance of these Participant’s Obligations. As stated in paragraph 21 of the Agreement, you and Verizon hereby expressly agree that the use of electronic media to indicate confirmation, consent, signature, acceptance, agreement and delivery shall be legally valid and have the same legal force and effect as if you and Verizon executed these Participant’s Obligations in paper form.

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Exhibit B – Non-Competition Obligations

As part of the Agreement to which this Exhibit B is attached, you, the Participant, and the Company or any Related Company which employs or employed you, agree to the following obligations:

1. Noncompetition.

(a) Prohibited Conduct. During the period of your employment with the Company or any Related Company, and for a period ending twelve (12) months following a termination of your employment for any reason with the Company or any Related Company, you shall not, without the prior written consent of the Executive Vice President and Chief Administrative Officer of Verizon (or his or her designee):

(1) personally engage in Competitive Activities (as defined below); or

(2) work for, own, manage, operate, control, or participate in the ownership, management, operation, or control of, or provide consulting or advisory services to, any person, partnership, firm, corporation, institution or other entity engaged in Competitive Activities, or any company or person affiliated with such person, partnership, firm, corporation, institution or other entity engaged in Competitive Activities; provided that your purchase or holding, for investment purposes, of securities of a publicly traded company shall not constitute “ownership” or “participation in the ownership” for purposes of this paragraph so long as your equity interest in any such company is less than a controlling interest;

provided that this paragraph (a) shall not prohibit you from (i) being employed by, or providing services to, a consulting firm, provided that you do not personally engage in Competitive Activities or provide consulting or advisory services to any person, partnership, firm, corporation, institution or other entity engaged in Competitive Activities, or any person or entity affiliated with such person, partnership, firm, corporation, institution or other entity engaged in Competitive Activities, or (ii) engaging in the practice of law as an in-house counsel, sole practitioner or as a partner in (or as an employee of or counsel to) a corporation or law firm in accordance with applicable legal and professional standards. Exception (ii), however, does not apply to any Participant that may be engaging in Competitive Activities or providing services to any person, partnership, firm, corporation, institution or other entity engaged in Competitive Activities, wherein such engagement or services being provided are not primarily the practice of law.

(b) Competitive Activities. For purposes of the Agreement, to which this Exhibit B is attached, “Competitive Activities” means any activities relating to products or services of the same or similar type as the products or services (1) which were or are sold (or, pursuant to an existing business plan, will be sold) to paying customers of the Company or any Related Company, and (2) for which you have any direct or indirect responsibility or any involvement to plan, develop, manage, market, sell, oversee, support, implement or perform, or had any such responsibility or involvement within your most recent 24 months of employment with the Company or any Related Company. Notwithstanding the previous sentence, an activity shall not be treated as a Competitive Activity if the geographic marketing area of such same or similar products or services does not overlap with the geographic marketing area for the applicable products and services of the Company or any Related Company.

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2. Interference With Business Relations. During the period of your employment with the Company or any Related Company, and for a period ending twelve (12) months following a termination of your employment for any reason with the Company or any Related Company, you shall not, without the prior written consent of the Executive Vice President and Chief Administrative Officer of Verizon (or his or her designee):

(a) recruit, induce or solicit, directly or indirectly, any employee of the Company or Related Company who was employed by the Company or any Related Company as of your termination date and whom you worked with or had contact with, or had confidential information about, while employed by the Company or any Related Company for employment or for retention as a consultant or service provider to any person or entity;

(b) hire or participate (with another person or entity) in the process of recruiting, soliciting or hiring, directly or indirectly, (other than for the Company or any Related Company) any person who is then an employee of the Company or any Related Company whom you worked with or had contact with, or had confidential information about, while employed by the Company or any Related Company, or provide, directly or indirectly, names or other information about any employees of the Company or Related Company whom you worked with or had contact with, or had confidential information about, while employed by the Company or any Related Company to any person or entity (other than to the Company or any Related Company) under circumstances that could lead to the use of any such information for purposes of recruiting, soliciting or hiring any such employee for any person or entity;

(c) interfere, or attempt to interfere, directly or indirectly, with any relationship of the Company or any Related Company with any of its employees, agents, or representatives;

(d) solicit or induce, or in any manner attempt to solicit or induce, directly or indirectly, any client, customer, or Prospect (defined below) of the Company or any Related Company (1) to cease being, or not to become, a customer of the Company or any Related Company, or (2) to divert any business of such customer or Prospect from the Company or any Related Company; or

(e) otherwise interfere with, disrupt, or attempt to interfere with or disrupt, directly or indirectly, the relationship, contractual or otherwise, between the Company or any Related Company and any of its customers, clients, Prospects, suppliers, vendors, service providers, developers, joint ventures, equity investments or partners, inventors, consultants, employees, agents, or representatives.

For purposes of this paragraph 2, “Prospect” shall mean any person or entity from whom or which any business was being solicited by Verizon or any Related Company within the most recent 12 month period of your employment.

3. Proprietary And Confidential Information. You shall at all times, including after any termination of your employment with the Company or any Related Company, preserve the confidentiality of all Proprietary Information (defined below) and trade secrets of the Company or any Related Company, and you shall not use for the benefit of yourself or any person, other than the Company or a Related Company, or disclose to any person, except and to the extent that disclosure of such information is legally required, any Proprietary Information or trade secrets of the Company or any Related Company. “Proprietary Information” means any information or data related to the Company or any Related Company, including information entrusted to the Company or a Related Company by others, which has not been fully disclosed to the public by the Company or a Related Company, which is treated as confidential or otherwise protected within the Company or any Related Company or is of value to competitors, such as strategic or tactical business plans; undisclosed business, operational or financial data; ideas, processes, methods, techniques, systems, models, devices, programs, computer software, or related information; documents relating to regulatory matters or correspondence with governmental entities; information concerning any past, pending, or threatened legal dispute; pricing or cost data; the

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identity, reports or analyses of business prospects; business transactions (including those that are contemplated or planned); research data; personnel information or data; identities of suppliers to the Company or any Related Company or users or purchasers of the Company’s or Related Company’s products or services; the Agreement to which this Exhibit B is attached; and any other non-public information pertaining to or known by the Company or a Related Company, including confidential or non-public information of a third party that you know or should know the Company or a Related Company is obligated to protect.

4. Return Of Company Property; Ownership of Intellectual Property Rights. You agree that on or before termination of your employment for any reason with the Company or any Related Company, you shall return to the Company all property owned by the Company or any Related Company or in which the Company or any Related Company has an interest or to which the Company or any Related Company has any obligation, including any and all files, documents, data, records and any other non-public information (whether on paper or in tapes, disks, memory devices, or other machine-readable form), office equipment, credit cards, and employee identification cards. You acknowledge that the Company (or, as applicable, a Related Company) is the rightful owner of, and you hereby do grant and assign, all right, title and interest in and to any programs; ideas, inventions and discoveries (patentable or unpatentable); works of authorship, data, information, and other copyrightable material; and trademarks that you may have originated, created or developed, or assisted or participated in originating, creating or developing, during your period of employment with the Company or a Related Company, including all intellectual property rights in or based on the foregoing, where any such origination, creation or development (a) involved any use of Company or Related Company time, information or resources, (b) was made in the exercise of any of your duties or responsibilities for or on behalf of the Company or a Related Company, or (c) was related to (i) the Company’s or a Related Company’s past, present or future business, or (ii) the Company’s or a Related Company’s actual or demonstrably anticipated research, development or procurement activities. You shall at all times, both before and after termination of your employment, cooperate with the Company (or, as applicable, any Related Company) and its representatives in executing and delivering documents requested by the Company or a Related Company, and taking any other actions, that are necessary or requested by the Company or a Related Company to assist the Company or any Related Company in patenting, copyrighting, protecting, registering, or enforcing any programs; ideas, inventions and discoveries (patentable or unpatentable); works of authorship, data, information, and other copyrightable material; trademarks; or other intellectual property rights, and to vest title thereto solely in the Company (or, as applicable, a Related Company).

5. Definitions. Except where clearly provided to the contrary or as otherwise defined in this Exhibit B, all capitalized terms used in this Exhibit B shall have the definitions given to those terms in the Agreement to which this Exhibit B is attached.

6. Agreement to Non-Competition Obligations. You shall indicate your agreement to these Non-Competition Obligations in accordance with the instructions provided in the Agreement, and your acceptance of the Agreement shall include your acceptance of these Non-Competition Obligations. As stated in paragraph 21 of the Agreement, you and Verizon hereby expressly agree that the use of electronic media to indicate confirmation, consent, signature, acceptance, agreement and delivery shall be legally valid and have the same legal force and effect as if you and Verizon executed these Non-Competition Obligations in paper form.

7. Governing Law and Non-exclusive Forum. The parties expressly agree: (a) that, because the Plan is centrally administered in the State of New Jersey by employees of a Verizon Communications Inc. affiliate, the subject matter of this Exhibit B bears a reasonable relationship to the State of New Jersey; (b) that this Exhibit B is made under, shall be construed in accordance with, and governed in all respects by the laws of the State of New Jersey without giving effect to that jurisdiction’s choice of law rules; and

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(c) the parties consent to the non-exclusive jurisdiction and venue of the courts of the State of New Jersey, and the federal courts of the United States of America located in the State of New Jersey, over any action, claim, controversy or proceeding arising under this Exhibit B, and irrevocably waive any objection they may now or hereafter have to the non-exclusive jurisdiction and venue of such courts.

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EX-10.B

Exhibit 10b

VERIZON COMMUNICATIONS INC. LONG-TERM INCENTIVE PLAN

RESTRICTED STOCK UNIT AGREEMENT

2014–2016 AWARD CYCLE

AGREEMENT between Verizon Communications Inc. (“Verizon” or the “Company”) and you (the “Participant”) and your heirs and beneficiaries.

1. Purpose of Agreement. The purpose of this Agreement is to provide a grant of restricted stock units (“RSUs”) to the Participant.

2. Agreement. This Agreement is entered into pursuant to the 2009 Verizon Communications Inc. Long-Term Incentive Plan, as amended and restated (the “Plan”), and evidences the grant of a restricted stock unit award in the form of RSUs pursuant to the Plan. In consideration of the benefits described in this Agreement, which Participant acknowledges are good, valuable and sufficient consideration, the Participant agrees to comply with the terms and conditions of this Agreement, including the Participant’s obligations and restrictions set forth in Exhibit A to this Agreement (the “Participant’s Obligations”) and the Participant’s obligations and restrictions set forth in Exhibit B to this Agreement (the “Non-Competition Obligations”), both of which are incorporated into and are a part of the Agreement. The RSUs and this Agreement are subject to the terms and provisions of the Plan. By executing this Agreement, the Participant agrees to be bound by the terms and provisions of the Plan and this Agreement, including but not limited to the Participant’s Obligations and the Non-Competition Obligations. In addition, the Participant agrees to be bound by the actions of the Human Resources Committee of Verizon Communication’s Board of Directors or any successor thereto (the “Committee”), and any designee of the Committee (to the extent that such actions are exercised in accordance with the terms of the Plan and this Agreement). If there is a conflict between the terms of the Plan and the terms of this Agreement, the terms of this Agreement shall control.

3. Contingency. The grant of RSUs is contingent on the Participant’s timely acceptance of this Agreement and satisfaction of the other conditions contained in it. Acceptance shall be through execution of the Agreement as set forth in paragraph 21. If the Participant does not accept this Agreement by the close of business on May 26, 2014, the Participant shall not be entitled to this grant of RSUs regardless of the extent to which the requirements in paragraph 5 (“Vesting”) are satisfied. In addition, to the extent a Participant is on a Company approved leave of absence, including but not limited to short-term disability leave, he or she will not be entitled to this grant of RSUs until such time as he or she returns to active employment with Verizon or a Related Company (as defined in paragraph 13) and accepts this Agreement within the time period established by the Company.

4. Number of Units. The Participant is granted the number of RSUs as specified in the Participant’s account under the 2014 RSU grant, administered by Fidelity Investments or any successor thereto (“Fidelity”). A RSU is a hypothetical share of Verizon’s common stock. The value of a RSU on any given date shall be equal to the closing price of Verizon’s common stock on the New York Stock Exchange (“NYSE”) as of such date. A Dividend Equivalent Unit (“DEU”) or fraction thereof shall be added to each RSU each time that a dividend is paid on Verizon’s common stock. The amount of each DEU shall be equal to the corresponding dividend paid on a share of Verizon’s common stock. The DEU shall be converted into RSUs or fractions thereof based upon the closing price of Verizon’s common stock traded on the NYSE on the dividend payment date of each declared dividend on Verizon’s common stock, and such RSUs or fractions thereof shall be added to the Participant’s RSU balance. To the extent that Fidelity or the Company makes an error, including but not limited to an administrative error with respect to the number or value of the RSUs granted to the Participant under this Agreement, the DEUs credited to the Participant’s account or the amount of the final award payment, the Company or Fidelity specifically reserves the right to correct such error at any time and the Participant agrees that he or she shall be legally bound by any corrective action taken by the Company or Fidelity.

5. Vesting.

(a) General. The Participant shall vest in the RSUs only if the Participant is continuously employed by the Company or a Related Company (as defined in paragraph 13) from the date the RSUs are granted through the end of the Award Cycle, except as otherwise provided in paragraph 7 (“Early Cancellation/Accelerated Vesting of RSUs”) or as otherwise provided by the Committee. For purposes of these RSUs, “Award Cycle” shall mean the three-year period beginning on January 1, 2014, and ending at the close of business on December 31, 2016.

(b) Effect of a Termination for Cause. Notwithstanding paragraph 5(a) or paragraph 7, if the Participant’s employment by the Company or a Related Company is terminated by the Company or a Related Company for Cause at any time prior to the date that the RSUs are paid pursuant to paragraph 6, the RSUs (whether vested or not) shall automatically terminate and be cancelled as of the applicable termination date without payment of any consideration by the Company and without any other action by the Participant. For purposes of this Agreement, “Cause” means (i) grossly incompetent performance or substantial or continuing inattention to or neglect of the duties and responsibilities assigned to the Participant; fraud, misappropriation or embezzlement; or a material breach of the Verizon Code of Conduct (as may be amended) or any of the Participant’s Obligations or the Non-Competition Obligations, all as determined by the Executive Vice President and Chief Administrative Officer of Verizon (or his or her designee) in his or her discretion, or (ii) commission of any felony of which the Participant is finally adjudged guilty by a court of competent jurisdiction.

(c) Transfer. Transfer of employment from Verizon to a Related Company, from a Related Company to Verizon, or from one Related Company to another Related Company shall not constitute a separation from employment hereunder, and service with a Related Company shall be treated as service with the Company for purposes of the three-year continuous employment requirement in paragraph 5(a). If the Participant transfers employment pursuant to this paragraph 5(c), the Participant will still be required to satisfy the definition of “Retire” under paragraph 7 of this Agreement in order to be eligible for the accelerated vesting provisions in connection with a retirement.

6. Payment. All payments under this Agreement shall be made in shares of Verizon common stock. Subject to paragraph 5(b), as soon as practicable after the end of the Award Cycle (but in no event later than March 15, 2017), the number of shares of the vested RSUs (minus any withholding for taxes) shall be paid to the Participant (subject, however, to any deferral application that the Participant has made under the deferral plan (if any) then available to the Participant). The number of shares that shall be paid (plus withholding for taxes and any applicable deferral amount) shall equal the number of vested RSUs. If the Participant dies before any payment due hereunder is made, such payment shall be made to the Participant’s beneficiary, as designated under paragraph 11. Once a payment has been made with respect to a RSU, the RSU shall be canceled; however, all other terms of the Agreement, including but not limited to the Participant’s Obligations and the Non-Competition Obligations, shall remain in effect.

7. Early Cancellation/Accelerated Vesting of RSUs. Notwithstanding the provisions of paragraph 5, RSUs may vest or be forfeited before the end of the Award Cycle as follows:

(a) Retirement Before July 1, 2014, Voluntary Separation On or Before December 31, 2016, or Other Separation Not Described in Paragraph 7(b). If the Participant (i) Retires (as defined in paragraph 7(b)(4)) before July 1, 2014, (ii) voluntarily separates from employment on or before

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December 31, 2016 for any reason other than Retirement, or (iii) otherwise separates from employment on or before December 31, 2016 under circumstances not described in paragraph 7(b), all the RSUs shall automatically terminate and be cancelled as of the applicable termination date without payment of any consideration by the Company and without any other action by the Participant.

(b) Retirement After June 30, 2014, Involuntary Termination Without Cause On or Before December 31, 2016, Termination Due to Death or Disability On or Before December 31, 2016.

(1) This paragraph 7(b) shall apply if the Participant:

(i) Retires (as defined below) after June 30, 2014, or

(ii) Separates from employment by reason of an involuntary termination without Cause (as determined by the Executive Vice President and Chief Administrative Officer of Verizon (or his or her designee)), death, or Disability (as defined below) on or before December 31, 2016. “Disability” shall mean the total and permanent disability of the Participant as defined by, or determined under, the Company’s long-term disability benefit plan.

(2) If the Participant separates from employment on or before December 31, 2016 under circumstances described in paragraph 7(b)(1), the Participant’s RSUs shall vest (without prorating the award) without regard to the three-year continuous employment requirement set forth in paragraph 5(a), provided that the Participant has not and does not commit a material breach of any of the Participant’s Obligations or the Non-Competition Obligations and provided that the Participant executes, within the time prescribed by Verizon, a release satisfactory to Verizon waiving any claims he or she may have against Verizon and any Related Company (otherwise, paragraph 7(a) shall apply).

(3) Any RSUs that vest pursuant to paragraph 7(b)(2) shall be payable as soon as practicable after the end of the Award Cycle (but in no event later than March 15, 2017).

(4) For purposes of this Agreement, “Retire” and “Retirement” means: (i) to retire after having attained at least 15 years of vesting service (as defined under the applicable Verizon tax-qualified 401(k) savings plan) and a combination of age and years of vesting service that equals or exceeds 75 points, or (ii) retirement under any other circumstances determined in writing by the Executive Vice President and Chief Administrative Officer of Verizon (or his or her designee), provided that, in the case of either (i) or (ii) in this paragraph, the retirement was not occasioned by a discharge for Cause. Notwithstanding the preceding sentence, if the Participant is employed in the United Kingdom, “Retire” or “Retirement” shall mean: (A) subject to applicable law, a termination of employment on the grounds of age, provided that the Participant has attained at least age 65; or (B) retirement under any other circumstances determined in writing by the Executive Vice President and Chief Administrative Officer of Verizon (or his or her designee), provided that, in the case of either (A) or (B) in this paragraph, the retirement was not occasioned by a discharge for Cause.

(c) Change in Control. If a Participant is involuntarily terminated without Cause within twelve (12) months following the occurrence of a Change in Control of Verizon (as defined in the Plan) and before the end of the Award Cycle, the RSUs shall vest and become payable (without prorating the award) without regard to the three-year continuous employment requirement in paragraph 5(a); however, all other terms of the Agreement, including but not limited to the Participant’s Obligations and the Non-Competition Obligations, shall remain in effect. A Change in Control or an involuntary

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termination without Cause that occurs after the end of the Award Cycle shall have no effect on whether any RSUs vest or become payable under this paragraph 7(c). If both paragraph 7(b) and this paragraph 7(c) would otherwise apply in the circumstances, this paragraph 7(c) shall control. All payments provided in this paragraph 7(c) shall be made at their regularly scheduled time as specified in paragraph 6.

(d) Vesting Schedule. Except and to the extent provided in paragraphs 7(b) and (c), nothing in this paragraph 7 shall alter the vesting schedule prescribed by paragraph 5.

8. Shareholder Rights. The Participant shall have no rights as a shareholder with respect to the RSUs until the date on which the Participant becomes the holder of record with respect to any shares of Verizon common stock to which this grant relates. Except as provided in the Plan or in this Agreement, no adjustment shall be made for dividends or other rights for which the record date occurs while the RSUs are outstanding.

9. Amendment of Agreement. Except to the extent required by law or specifically contemplated under this Agreement, neither the Committee nor the Executive Vice President and Chief Administrative Officer of Verizon (or his or her designee) may, without the written consent of the Participant, change any term, condition or provision affecting the RSUs if the change would have a material adverse effect upon the RSUs or the Participant’s rights thereto. Nothing in the preceding sentence shall preclude the Committee or the Executive Vice President and Chief Administrative Officer of Verizon (or his or her designee) from exercising administrative discretion with respect to the Plan or this Agreement, and the exercise of such discretion shall be final, conclusive and binding. This discretion includes, but is not limited to, corrections of any errors, including but not limited to any administrative errors, and determining whether the Participant has been discharged for Cause, has a disability, has Retired, has breached any of the Participant’s Obligations or the Non-Competition Obligations or has satisfied the requirements for vesting and payment under paragraphs 5 and 7 of this Agreement.

10. Assignment. The RSUs shall not be assigned, pledged or transferred except by will or by the laws of descent and distribution. During the Participant’s lifetime, the RSUs may be deferred only by the Participant or by the Participant’s guardian or legal representative in accordance with the deferral regulations, if any, established by the Company.

11. Beneficiary. The Participant shall designate a beneficiary in writing and in such manner as is acceptable to the Executive Vice President and Chief Administrative Officer of Verizon (or his or her designee). Each such designation shall revoke all prior designations by the Participant with respect to the Participant’s benefits under the Plan and shall be effective only when filed by the Participant with the Company during the Participant’s lifetime. If the Participant fails to so designate a beneficiary, or if no such designated beneficiary survives the Participant, the Participant’s beneficiary shall be the Participant’s estate.

12. Other Plans and Agreements. Any payment received (or deferred) by the Participant pursuant to this Agreement shall not be taken into account as compensation in the determination of the Participant’s benefits under any pension, savings, life insurance, severance or other benefit plan maintained by Verizon or a Related Company. The Participant acknowledges that this Agreement or any prior RSU agreement shall not entitle the Participant to any other benefits under the Plan or any other plans maintained by the Company or a Related Company.

13. Company and Related Company. For purposes of this Agreement, “Company” means Verizon Communications Inc. “Related Company” means (a) any corporation, partnership, joint venture, or other entity in which Verizon Communications Inc. holds a direct or indirect ownership or proprietary interest

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of 50 percent or more at any time during the term of this Agreement, or (b) any corporation, partnership, joint venture, or other entity in which Verizon Communications Inc. holds a direct or indirect ownership or other proprietary interest of less than 50 percent at any time during the term of this Agreement but which, in the discretion of the Committee, is treated as a Related Company for purposes of this Agreement.

14. Employment Status. The grant of the RSUs shall not be deemed to constitute a contract of employment for a particular term between the Company or a Related Company and the Participant, nor shall it constitute a right to remain in the employ of any such Company or Related Company.

15. Withholding. The Participant acknowledges that he or she shall be responsible for any taxes that arise in connection with this grant of RSUs, and the Company shall make such arrangements as it deems necessary for withholding of any taxes it determines are required to be withheld pursuant to any applicable law or regulation.

16. Securities Laws. The Company shall not be required to make payment with respect to any shares of common stock prior to the admission of such shares to listing on any stock exchange on which the stock may then be listed and the completion of any registration or qualification of such shares under any federal or state law or rulings or regulations of any government body that the Company, in its discretion, determines to be necessary or advisable.

17. Committee Authority. The Committee shall have complete discretion in the exercise of its rights, powers, and duties under this Agreement. Any interpretation or construction of any provision of, and the determination of any question arising under, this Agreement shall be made by the Committee in its discretion, as described in paragraph 9. The Committee and the Audit Committee may designate any individual or individuals to perform any of its functions hereunder and utilize experts to assist in carrying out their duties hereunder.

18. Successors. This Agreement shall be binding upon, and inure to the benefit of, any successor or successors of the Company and the person or entity to whom the RSUs may have been transferred by will, the laws of descent and distribution, or beneficiary designation. All terms and conditions of this Agreement imposed upon the Participant shall, unless the context clearly indicates otherwise, be deemed, in the event of the Participant’s death, to refer to and be binding upon the Participant’s heirs and beneficiaries.

19. Construction. In the event that any provision of this Agreement is held invalid or unenforceable, such provision shall be considered separate and apart from the remainder of this Agreement, which shall remain in full force and effect. In the event that any provision, including any of the Participant’s Obligations or the Non-Competition Obligations, is held to be unenforceable for being unduly broad as written, such provision shall be deemed amended to narrow its application to the extent necessary to make the provision enforceable according to applicable law and shall be enforced as amended. The RSUs are intended not to be subject to any tax, interest or penalty under Section 409A of the Code, and this Agreement shall be construed and interpreted consistent with such intent.

20. Defined Terms. Except where the context clearly indicates otherwise, all capitalized terms used herein shall have the definitions ascribed to them by the Plan, and the terms of the Plan shall apply where appropriate.

21. Execution of Agreement. The Participant shall indicate his or her consent and acknowledgment to the terms of this Agreement (including the Participant’s Obligations and the Non-Competition Obligations) and the Plan by executing this Agreement pursuant to the instructions provided and

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otherwise shall comply with the requirements of paragraph 3. In addition, by consenting to the terms of this Agreement and the Participant’s Obligations and the Non-Competition Obligations, the Participant expressly agrees and acknowledges that Fidelity may deliver all documents, statements and notices associated with the Plan and this Agreement to the Participant in electronic form. The Participant and Verizon hereby expressly agree that the use of electronic media to indicate confirmation, consent, signature, acceptance, agreement and delivery shall be legally valid and have the same legal force and effect as if the Participant and Verizon executed this Agreement (including the Participant’s Obligations and the Non-Competition Obligations) in paper form.

22. Confidentiality. Except to the extent otherwise required by law, the Participant shall not disclose, in whole or in part, any of the terms of this Agreement. This paragraph 22 does not prevent the Participant from disclosing the terms of this Agreement to the Participant’s spouse or beneficiary or to the Participant’s legal, tax, or financial adviser, provided that the Participant take all reasonable measures to assure that the individual to whom disclosure is made does not disclose the terms of this Agreement to a third party except as otherwise required by law.

23. Applicable Law. Except as expressly provided in Exhibit B, the validity, construction, interpretation and effect of this Agreement shall be governed by and construed in accordance with the laws of the State of Delaware, without giving effect to the conflicts of laws provisions thereof.

24. Notice. Any notice to the Company provided for in this Agreement shall be addressed to the Company in care of the Executive Vice President and Chief Administrative Officer of Verizon at 140 West Street, 6^th Floor, New York, New York 10007 and any notice to the Participant shall be addressed to the Participant at the current address shown on the payroll of the Company, or to such other address as the Participant may designate to the Company in writing. Any notice shall be delivered by hand, sent by telecopy, sent by overnight carrier, or enclosed in a properly sealed envelope as stated above, registered and deposited, postage prepaid, in a post office regularly maintained by the United States Postal Service.

25. Dispute Resolution.

(a) General. Except as otherwise provided in paragraph 26 below, all disputes arising under or related to the Plan or this Agreement and all claims in which a Participant seeks damages or other relief that relate in any way to RSUs or other benefits of the Plan are subject to the dispute resolution procedure described below in this paragraph 25.

(i) For purposes of this Agreement, the term “Units Award Dispute” shall mean any claim against the Company or a Related Company, other than Employment Claims described in paragraph (a)(ii) below, regarding (A) the interpretation of the Plan or this Agreement, (B) any of the terms or conditions of the RSUs issued under this Agreement, or (C) allegations of entitlement to RSUs or additional RSUs, or any other benefits, under the Plan or this Agreement; provided, however, that any dispute relating to the Participant’s Obligations or the Non-Competition Obligations or to the forfeiture of an award as a result of a breach of any of the Participant’s Obligations or the Non-Competition Obligations shall not be subject to the dispute resolution procedures provided for in this paragraph 25.

(ii) For purposes of this Agreement, the term “Units Damages Dispute” shall mean any claims between the Participant and the Company or a Related Company (or against the past or present directors, officers, employees, representatives, or agents of the Company or a Related Company, whether acting in their capacity as such or otherwise), that are related in any way to the Participant’s employment or former employment, including

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claims of alleged employment discrimination, wrongful termination, or violations of Title VII of the Civil Rights Act of 1964, the Americans with Disabilities Act, the Age Discrimination in Employment Act, 42 U.S.C. § 1981, the Fair Labor Standards Act, the Family Medical Leave Act, the Sarbanes-Oxley Act, or any other U.S. federal, state or local law, statute, regulation, or ordinance relating to employment or any common law theories of recovery relating to employment, such as breach of contract, tort, or public policy claims (“Employment Claims”), in which the damages or other relief sought relate in any way to RSUs or other benefits of the Plan or this Agreement.

(b) Internal Dispute Resolution Procedure. All Units Award Disputes, and all Units Damages Dispute alleging breach of contract, tort, or public policy claims with respect to the Plan or this Agreement (collectively, “Plan Disputes”), shall be referred in the first instance to the Verizon Employee Benefits Committee (“EB Committee”) for resolution internally within Verizon. Except where otherwise prohibited by law, all Plan Disputes must be filed in writing with the EB Committee no later than one year from the date that the dispute accrues. Consistent with paragraph 25(c)(i) of this Agreement, all decisions relating to the enforceability of the limitations period contained herein shall be made by the arbitrator. To the fullest extent permitted by law, the EB Committee shall have full power, discretion, and authority to interpret the Plan and this Agreement and to decide all Plan Disputes brought under this Plan and Agreement. Determinations made by the EB Committee shall be final, conclusive and binding, subject only to review by arbitration pursuant to paragraph (c) below under the arbitrary and capricious standard of review.

(c) Arbitration. All appeals from determinations by the EB Committee as described in paragraph (b) above, and any Units Damages Dispute, shall be fully and finally settled by arbitration administered by the American Arbitration Association (“AAA”) on an individual basis (and not on a collective or class action basis) before a single arbitrator pursuant to the AAA’s Commercial Arbitration Rules in effect at the time any such arbitration is initiated. Any such arbitration must be initiated in writing pursuant to the aforesaid rules of the AAA no later than one year from the date that the claim accrues, except where a longer limitations period is required by applicable law. Decisions about the applicability of the limitations period contained herein shall be made by the arbitrator. A copy of the AAA’s Commercial Arbitration Rules may be obtained from Human Resources. The Participant agrees that the arbitration shall be held at the office of the AAA nearest the place of the Participant’s most recent employment by the Company or a Related Company, unless the parties agree in writing to a different location. All claims by the Company or a Related Company against the Participant, except for breaches of any of the Participant’s Obligations or of the Non-Competition Obligations, may also be raised in such arbitration proceedings.

(i) The arbitrator shall have the authority to determine whether any dispute submitted for arbitration hereunder is arbitrable. The arbitrator shall decide all issues submitted for arbitration according to the terms of the Plan, this Agreement (except for breaches of any of the Participant’s Obligations or of the Non-Competition Obligations), existing Company policy, and applicable substantive Delaware State and U.S. federal law and shall have the authority to award any remedy or relief permitted by such laws. The final decision of the EB Committee with respect to a Plan Dispute shall be upheld unless such decision was arbitrary or capricious. The decision of the arbitrator shall be final, conclusive, not subject to appeal, and binding and enforceable in any applicable court.

(ii) The Participant understands and agrees that, pursuant to this Agreement, both the Participant and the Company or a Related Company waive any right to sue each other in a court of law or equity, to have a trial by jury, or to resolve disputes on a collective, or class, basis (except for breaches of any of the Participant’s Obligations

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or of the Non-Competition Obligations), and that the sole forum available for the resolution of Units Award Disputes and Units Damages Disputes is arbitration as provided in this paragraph 25. If an arbitrator or court finds that the arbitration provisions of this Agreement are not enforceable, both Participant and the Company or a Related Company understand and agree to waive their right to trial by jury of any Units Award Dispute or Units Damages Dispute. This dispute resolution procedure shall not prevent either the Participant or the Company or a Related Company from commencing an action in any court of competent jurisdiction for the purpose of obtaining injunctive relief to prevent irreparable harm pending and in aid of arbitration hereunder; in such event, both the Participant and the Company or a Related Company agree that the party who commences the action may proceed without necessity of posting a bond.

(iii) In consideration of the Participant’s agreement in paragraph (ii) above, the Company or a Related Company will pay all filing, administrative and arbitrator’s fees incurred in connection with the arbitration proceedings. If the AAA requires the Participant to pay the initial filing fee, the Company or a Related Company will reimburse the Participant for that fee. All other fees incurred in connection with the arbitration proceedings, including but not limited to each party’s attorney’s fees, will be the responsibility of such party.

(iv) The parties intend that the arbitration procedure to which they hereby agree shall be the exclusive means for resolving all Units Award Disputes (subject to the mandatory EB Committee procedure provided for in paragraph 25(b) above) and Units Damages Disputes. Their agreement in this regard shall be interpreted as broadly and inclusively as reason permits to realize that intent.

(v) The Federal Arbitration Act (“FAA”) shall govern the enforceability of this paragraph 25. If for any reason the FAA is held not to apply, or if application of the FAA requires consideration of state law in any dispute arising under this Agreement or subject to this dispute resolution provision, the laws of the State of Delaware shall apply without giving effect to the conflicts of laws provisions thereof.

(vi) To the extent an arbitrator determines that the Participant was not terminated for Cause and is entitled to the RSUs or any other benefits under the Plan pursuant to the provisions applicable to an involuntary termination without Cause, the Participant’s obligation to execute a release satisfactory to Verizon as provided under paragraph 7(b)(2) shall remain applicable in order to receive the benefit of any RSUs pursuant to this Agreement.

26. Additional Remedies. Notwithstanding the dispute resolution procedures, including arbitration, of paragraph 25 of this Agreement, and in addition to any other rights or remedies, whether legal, equitable, or otherwise, that each of the parties to this Agreement may have (including the right of the Company to terminate the Participant for Cause or to involuntarily terminate the Participant without Cause), the Participant acknowledges that—

(a) The Participant’s Obligations and the restrictions in the Non-Competition Obligations are essential to the continued goodwill and profitability of the Company and any Related Company;

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(b) The Participant has broad-based skills that will serve as the basis for other employment opportunities that are not prohibited by the Participant’s Obligations or the Non-Competition Obligations;

(c) When the Participant’s employment with the Company or any Related Company terminates, the Participant shall be able to earn a livelihood without violating any of the Participant’s Obligations or the Non-Competition Obligations;

(d) Irreparable damage to the Company or any Related Company shall result in the event that the Participant’s Obligations and the Non-Competition Obligations are not specifically enforced and that monetary damages will not adequately protect the Company and any Related Company from a breach of these Participant’s Obligations or the Non-Competition Obligations;

(e) If any dispute arises concerning the violation or anticipated or threatened violation by the Participant of any of the Participant’s Obligations or of the Non-Competition Obligations, an injunction may be issued restraining such violation pending the determination of such controversy, and no bond or other security shall be required in connection therewith;

(f) The Participant’s Obligations and the Non-Competition Obligations shall continue to apply after any expiration, termination, or cancellation of this Agreement;

(g) The Participant’s breach of any of the Participant’s Obligations or the Non-Competition Obligations shall result in the Participant’s immediate forfeiture of all rights and benefits, including all RSUs and DEUs, under this Agreement; and

(h) All disputes relating to the Participant’s Obligations or the Non-Competition Obligations, including their interpretation and enforceability and any damages (including but not limited to damages resulting in the forfeiture of an award or benefits under this Agreement) that may result from the breach of such Participant’s Obligations or the Non-Competition Obligations shall not be subject to the dispute resolution procedures, including arbitration, of paragraph 25 of this Agreement, but shall instead be determined in a court of competent jurisdiction.

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Exhibit A – Participant’s Obligations

As part of the Agreement to which this Exhibit A is attached, you, the Participant, agree to the following obligations:

1. Effect of a Material Restatement of Financial Results; Recoupment; Company Policies Regarding Securities Transactions

(a) General. Notwithstanding anything in this Agreement to the contrary, you agree that, with respect to all RSUs granted to you on or after January 1, 2007 and all short-term incentive awards made to you on or after January 1, 2007, to the extent the Company or any Related Company is required to materially restate any financial results based upon your willful misconduct or gross negligence while employed by the Company or any Related Company (and where such restatement would have resulted in a lower payment being made to you), you will be required to repay all previously paid or deferred (i) RSUs and (ii) short-term incentive awards that were provided to you during the performance periods that are the subject of the restated financial results, plus a reasonable rate of interest. For purposes of this paragraph, “willful misconduct” and “gross negligence” shall be as determined by the Committee. The Audit Committee of the Verizon Board of Directors shall determine whether a material restatement of financial results has occurred. If you do not repay the entire amount required under this paragraph, the Company may, to the extent permitted by applicable law, offset your obligation to repay against any source of income available to it, including but not limited to any money you may have in your nonqualified deferral accounts.

(b) Requirements of Recoupment Policy or Applicable Law. The repayment rights contained in paragraph 1(a) of Exhibit A shall be in addition to, and shall not limit, any other rights or remedies that the Company may have under law or in equity, including, without limitation, (i) any right that the Company may have under any Company recoupment policy that may apply to you, or (ii) any right or obligation that the Company may have regarding the clawback of “incentive-based compensation” under Section 10D of the Securities Exchange Act of 1934, as amended (as determined by the applicable rules and regulations promulgated thereunder from time to time by the U.S. Securities and Exchange Commission) or under any other applicable law. By accepting this award of RSUs, you agree and consent to the Company’s application, implementation and enforcement of any such Company recoupment policy (as it may be in effect from time to time) that may apply to you and any provision of applicable law relating to cancellation, rescission, payback or recoupment of compensation and expressly agree that the Company may take such actions as are permitted under any such policy (as applicable to you) or applicable law, such as the cancellation of RSUs and repayment of amounts previously paid or deferred with respect to any previously granted RSUs or short-term incentive awards, without further consent or action being required by you.

(c) Company Policies Regarding Securities Transactions. By accepting this award of RSUs, you agree to comply with all Company policies regarding trading in securities or derivative securities (including, without limitation, the Company’s policies prohibiting trading on material inside information regarding the Company or any business with which the Company does business, the Company’s policies prohibiting engaging in financial transactions that would allow you to benefit from a devaluation of the Company’s securities, and any additional policy that the Company may adopt prohibiting you from hedging your economic exposure to the Company’s securities), as such policies are in effect from time to time and for as long as such policies are applicable to you.

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2. Definitions. Except where clearly provided to the contrary or as otherwise defined in this Exhibit A, all capitalized terms used in this Exhibit A shall have the definitions given to those terms in the Agreement to which this Exhibit A is attached.

3. Agreement to Participant’s Obligations. You shall indicate your agreement to these Participant’s Obligations in accordance with the instructions provided in the Agreement, and your acceptance of the Agreement shall include your acceptance of these Participant’s Obligations. As stated in paragraph 21 of the Agreement, you and Verizon hereby expressly agree that the use of electronic media to indicate confirmation, consent, signature, acceptance, agreement and delivery shall be legally valid and have the same legal force and effect as if you and Verizon executed these Participant’s Obligations in paper form.

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Exhibit B – Non-Competition Obligations

As part of the Agreement to which this Exhibit B is attached, you, the Participant, and the Company or any Related Company which employs or employed you, agree to the following obligations:

1. Noncompetition

(a) Prohibited Conduct. During the period of your employment with the Company or any Related Company, and for a period ending twelve (12) months following a termination of your employment for any reason with the Company or any Related Company, you shall not, without the prior written consent of the Executive Vice President and Chief Administrative Officer of Verizon (or his or her designee):

(1) personally engage in Competitive Activities (as defined below); or

(2) work for, own, manage, operate, control, or participate in the ownership, management, operation, or control of, or provide consulting or advisory services to, any person, partnership, firm, corporation, institution or other entity engaged in Competitive Activities, or any company or person affiliated with such person, partnership, firm, corporation, institution or other entity engaged in Competitive Activities; provided that your purchase or holding, for investment purposes, of securities of a publicly traded company shall not constitute “ownership” or “participation in the ownership” for purposes of this paragraph so long as your equity interest in any such company is less than a controlling interest;

provided that this paragraph (a) shall not prohibit you from (i) being employed by, or providing services to, a consulting firm, provided that you do not personally engage in Competitive Activities or provide consulting or advisory services to any person, partnership, firm, corporation, institution or other entity engaged in Competitive Activities, or any person or entity affiliated with such person, partnership, firm, corporation, institution or other entity engaged in Competitive Activities, or (ii) engaging in the practice of law as an in-house counsel, sole practitioner or as a partner in (or as an employee of or counsel to) a corporation or law firm in accordance with applicable legal and professional standards. Exception (ii), however, does not apply to any Participant that may be engaging in Competitive Activities or providing services to any person, partnership, firm, corporation, institution or other entity engaged in Competitive Activities, wherein such engagement or services being provided are not primarily the practice of law.

(b) Competitive Activities. For purposes of the Agreement, to which this Exhibit B is attached, “Competitive Activities” means any activities relating to products or services of the same or similar type as the products or services (1) which were or are sold (or, pursuant to an existing business plan, will be sold) to paying customers of the Company or any Related Company, and (2) for which you have any direct or indirect responsibility or any involvement to plan, develop, manage, market, sell, oversee, support, implement or perform, or had any such responsibility or involvement within your most recent 24 months of employment with the Company or any Related Company. Notwithstanding the previous sentence, an activity shall not be treated as a Competitive Activity if the geographic marketing area of such same or similar products or services does not overlap with the geographic marketing area for the applicable products and services of the Company or any Related Company.

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2. Interference With Business Relations. During the period of your employment with the Company or any Related Company, and for a period ending twelve (12) months following a termination of your employment for any reason with the Company or any Related Company, you shall not, without the prior written consent of the Executive Vice President and Chief Administrative Officer of Verizon (or his or her designee):

(a) recruit, induce or solicit, directly or indirectly, any employee of the Company or Related Company who was employed by the Company or any Related Company as of your termination date and whom you worked with or had contact with, or had confidential information about, while employed by the Company or any Related Company for employment or for retention as a consultant or service provider to any person or entity;

(b) hire or participate (with another person or entity) in the process of recruiting, soliciting or hiring, directly or indirectly, (other than for the Company or any Related Company) any person who is then an employee of the Company or any Related Company whom you worked with or had contact with, or had confidential information about, while employed by the Company or any Related Company, or provide, directly or indirectly, names or other information about any employees of the Company or Related Company whom you worked with or had contact with, or had confidential information about, while employed by the Company or any Related Company to any person or entity (other than to the Company or any Related Company) under circumstances that could lead to the use of any such information for purposes of recruiting, soliciting or hiring any such employee for any person or entity;

(c) interfere, or attempt to interfere, directly or indirectly, with any relationship of the Company or any Related Company with any of its employees, agents, or representatives;

(d) solicit or induce, or in any manner attempt to solicit or induce, directly or indirectly, any client, customer, or Prospect (defined below) of the Company or any Related Company (1) to cease being, or not to become, a customer of the Company or any Related Company, or (2) to divert any business of such customer or Prospect from the Company or any Related Company; or

(e) otherwise interfere with, disrupt, or attempt to interfere with or disrupt, directly or indirectly, the relationship, contractual or otherwise, between the Company or any Related Company and any of its customers, clients, Prospects, suppliers, vendors, service providers, developers, joint ventures, equity investments or partners, inventors, consultants, employees, agents, or representatives.

For purposes of this paragraph 2, “Prospect” shall mean any person or entity from whom or which any business was being solicited by Verizon or any Related Company within the most recent 12 month period of your employment.

3. Proprietary And Confidential Information. You shall at all times, including after any termination of your employment with the Company or any Related Company, preserve the confidentiality of all Proprietary Information (defined below) and trade secrets of the Company or any Related Company, and you shall not use for the benefit of yourself or any person, other than the Company or a Related Company, or disclose to any person, except and to the extent that disclosure of such information is legally required, any Proprietary Information or trade secrets of the Company or any Related Company. “Proprietary Information” means any information or data related to the Company or any Related Company, including information entrusted to the Company or a Related Company by others, which has not been fully disclosed to the public by the Company or a Related Company, which is treated as confidential or otherwise protected within the Company or any Related Company or is of value to competitors, such as strategic or tactical business plans; undisclosed business, operational or financial data; ideas, processes, methods, techniques, systems, models, devices, programs, computer software, or related information; documents relating to regulatory matters or correspondence with governmental

13

entities; information concerning any past, pending, or threatened legal dispute; pricing or cost data; the identity, reports or analyses of business prospects; business transactions (including those that are contemplated or planned); research data; personnel information or data; identities of suppliers to the Company or any Related Company or users or purchasers of the Company’s or Related Company’s products or services; the Agreement to which this Exhibit B is attached; and any other non-public information pertaining to or known by the Company or a Related Company, including confidential or non-public information of a third party that you know or should know the Company or a Related Company is obligated to protect.

4. Return Of Company Property; Ownership of Intellectual Property Rights. You agree that on or before termination of your employment for any reason with the Company or any Related Company, you shall return to the Company all property owned by the Company or any Related Company or in which the Company or any Related Company has an interest or to which the Company or any Related Company has any obligation, including any and all files, documents, data, records and any other non-public information (whether on paper or in tapes, disks, memory devices, or other machine-readable form), office equipment, credit cards, and employee identification cards. You acknowledge that the Company (or, as applicable, a Related Company) is the rightful owner of, and you hereby do grant and assign, all right, title and interest in and to any programs; ideas, inventions and discoveries (patentable or unpatentable); works of authorship, data, information, and other copyrightable material; and trademarks that you may have originated, created or developed, or assisted or participated in originating, creating or developing, during your period of employment with the Company or a Related Company, including all intellectual property rights in or based on the foregoing, where any such origination, creation or development (a) involved any use of Company or Related Company time, information or resources, (b) was made in the exercise of any of your duties or responsibilities for or on behalf of the Company or a Related Company, or (c) was related to (i) the Company’s or a Related Company’s past, present or future business, or (ii) the Company’s or a Related Company’s actual or demonstrably anticipated research, development or procurement activities. You shall at all times, both before and after termination of your employment, cooperate with the Company (or, as applicable, any Related Company) and its representatives in executing and delivering documents requested by the Company or a Related Company, and taking any other actions, that are necessary or requested by the Company or a Related Company to assist the Company or any Related Company in patenting, copyrighting, protecting, registering, or enforcing any programs; ideas, inventions and discoveries (patentable or unpatentable); works of authorship, data, information, and other copyrightable material; trademarks; or other intellectual property rights, and to vest title thereto solely in the Company (or, as applicable, a Related Company).

5. Definitions. Except where clearly provided to the contrary or as otherwise defined in this Exhibit B, all capitalized terms used in this Exhibit B shall have the definitions given to those terms in the Agreement to which this Exhibit B is attached.

6. Agreement to Non-Competition Obligations. You shall indicate your agreement to these Non-Competition Obligations in accordance with the instructions provided in the Agreement, and your acceptance of the Agreement shall include your acceptance of these Non-Competition Obligations. As stated in paragraph 21 of the Agreement, you and Verizon hereby expressly agree that the use of electronic media to indicate confirmation, consent, signature, acceptance, agreement and delivery shall be legally valid and have the same legal force and effect as if you and Verizon executed these Non-Competition Obligations in paper form.

7. Governing Law and Non-exclusive Forum. The parties expressly agree: (a) that, because the Plan is centrally administered in the State of New Jersey by employees of a Verizon Communications Inc. affiliate, the subject matter of this Exhibit B bears a reasonable relationship to the State of New Jersey; (b) that this Exhibit B is made under, shall be construed in accordance with, and governed in all respects

14

by the laws of the State of New Jersey without giving effect to that jurisdiction’s choice of law rules; and (c) the parties consent to the non-exclusive jurisdiction and venue of the courts of the State of New Jersey, and the federal courts of the United States of America located in the State of New Jersey, over any action, claim, controversy or proceeding arising under this Exhibit B, and irrevocably waive any objection they may now or hereafter have to the non-exclusive jurisdiction and venue of such courts.

15

EX-12

EXHIBIT 12

Computation of Ratio of Earnings to Fixed Charges

Verizon Communications Inc. and Subsidiaries

(dollars in millions)	Three Months Ended March 31, 2014
Earnings:
Income before provision for income taxes	$	6,954
Equity in earnings of unconsolidated businesses		(1,902	)
Dividends from unconsolidated businesses		8
Interest expense (1)		1,214
Portion of rent expense representing interest		214
Amortization of capitalized interest		46
Earnings, as adjusted	$	6,534
Fixed Charges:
Interest expense (1)	$	1,214
Portion of rent expense representing interest		214
Capitalized interest		136
Fixed Charges	$	1,564
Ratio of earnings to fixed charges		4.18

⁽¹⁾  We classify interest expense recognized on uncertain tax positions as income tax expense and therefore such interest expense is not included in the Ratio of Earnings to Fixed Charges.

EX-31.1

EXHIBIT 31.1

I, Lowell C. McAdam, certify that:

1. I have reviewed this quarterly report on Form 10-Q of Verizon Communications Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: April 29, 2014	/s/ Lowell C. McAdam
	Lowell C. McAdam
	Chairman and Chief Executive Officer

EX-31.2

EXHIBIT 31.2

I, Francis J. Shammo, certify that:

1. I have reviewed this quarterly report on Form 10-Q of Verizon Communications Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: April 29, 2014	/s/ Francis J. Shammo
	Francis J. Shammo
	Executive Vice President          and Chief Financial Officer

EX-32.1

EXHIBIT 32.1

CERTIFICATION OF CHIEF EXECUTIVE OFFICER PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002, PURSUANT TO SECTION 1350 OF CHAPTER 63 OF TITLE 18 OF THE UNITED STATES CODE

I, Lowell C. McAdam, Chairman and Chief Executive Officer of Verizon Communications Inc. (the Company), certify that:

(1) the report of the Company on Form 10-Q for the quarterly period ending March 31, 2014 (the Report) fully complies with the requirements of section 13(a) of the Securities Exchange Act of 1934 (the Exchange Act); and

(2) the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company as of the dates and for the periods referred to in the Report.

Date: April 29, 2014	/s/ Lowell C. McAdam
	Lowell C. McAdam
	Chairman and Chief Executive Officer

A signed original of this written statement required by Section 906, or other document authenticating, acknowledging, or otherwise adopting the signature that appears in typed form within the electronic version of this written statement required by Section 906, has been provided to Verizon Communications Inc. and will be retained by Verizon Communications Inc. and furnished to the Securities and Exchange Commission or its staff upon request.

EX-32.2

EXHIBIT 32.2

CERTIFICATION OF CHIEF FINANCIAL OFFICER PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002, PURSUANT TO SECTION 1350 OF CHAPTER 63 OF TITLE 18 OF THE UNITED STATES CODE

I, Francis J. Shammo, Executive Vice President and Chief Financial Officer of Verizon Communications Inc. (the Company), certify that:

(1) the report of the Company on Form 10-Q for the quarterly period ending March 31, 2014 (the Report) fully complies with the requirements of section 13(a) of the Securities Exchange Act of 1934 (the Exchange Act); and

(2) the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company as of the dates and for the periods referred to in the Report.

Date: April 29, 2014	/s/ Francis J. Shammo
	Francis J. Shammo
	Executive Vice President          and Chief Financial Officer

A signed original of this written statement required by Section 906, or other document authenticating, acknowledging, or otherwise adopting the signature that appears in typed form within the electronic version of this written statement required by Section 906, has been provided to Verizon Communications Inc. and will be retained by Verizon Communications Inc. and furnished to the Securities and Exchange Commission or its staff upon request.

XML

Restricted and Performance Stock Unit Activity (Detail) In Thousands, unless otherwise specified	3 Months Ended
	Mar. 31, 2014
Restricted Stock Units
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Outstanding, January 1, 2014	16,193
Granted	4,514
Payments	(6,116)
Cancelled/Forfeited	(54)
Outstanding, March 31, 2014	14,537
Performance Stock Units
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Outstanding, January 1, 2014	23,724
Granted	6,578
Payments	(9,153)
Cancelled/Forfeited	(77)
Outstanding, March 31, 2014	21,072

XML

Reconciliation of Total Reportable Segments Operating Income to Consolidated Income before Provision for Income Taxes (Detail) (USD $) In Millions, unless otherwise specified	3 Months Ended
	Mar. 31, 2014	Mar. 31, 2013
Segment Reporting Information [Line Items]
Operating income	$ 7,160	$ 6,222
Equity in earnings of unconsolidated businesses	1,902	(5)
Other income and (expense), net	(894)	39
Interest expense	(1,214)	(537)
Income Before Provision For Income Taxes	6,954	5,719
Operating Segments
Segment Reporting Information [Line Items]
Operating income	7,465	6,431
Corporate, Eliminations and Other
Segment Reporting Information [Line Items]
Operating income	$ (305)	$ (209)

XML

Operating Financial Information for Reportable Segments (Detail) (USD $) In Millions, unless otherwise specified	3 Months Ended
	Mar. 31, 2014	Mar. 31, 2013
Segment Reporting Information [Line Items]
Operating Revenues	$ 30,818	$ 29,420
Operating income	7,160	6,222
Wireless
Segment Reporting Information [Line Items]
Operating Revenues	20,879	19,523
Operating income	7,318	6,418
Wireline
Segment Reporting Information [Line Items]
Operating Revenues	9,790	9,830
Operating income	147	13
Total Segments
Segment Reporting Information [Line Items]
Operating Revenues	30,669	29,353
Operating income	7,465	6,431
Corporate, Eliminations and Other
Segment Reporting Information [Line Items]
Operating Revenues	149	67
Reconciling Items
Segment Reporting Information [Line Items]
Operating income	(305)	(209)
External Operating Revenues
Segment Reporting Information [Line Items]
Operating Revenues	30,818	29,420
External Operating Revenues | Wireless
Segment Reporting Information [Line Items]
Operating Revenues	20,851	19,496
External Operating Revenues | Wireless | Service Revenue Retail Service
Segment Reporting Information [Line Items]
Operating Revenues	17,233	16,155
External Operating Revenues | Wireless | Service Revenue Other Service
Segment Reporting Information [Line Items]
Operating Revenues	735	557
External Operating Revenues | Wireless | Service Revenue
Segment Reporting Information [Line Items]
Operating Revenues	17,968	16,712
External Operating Revenues | Wireless | Equipment
Segment Reporting Information [Line Items]
Operating Revenues	1,869	1,809
External Operating Revenues | Wireless | Other
Segment Reporting Information [Line Items]
Operating Revenues	1,014	975
External Operating Revenues | Wireline
Segment Reporting Information [Line Items]
Operating Revenues	9,569	9,559
External Operating Revenues | Wireline | Mass Markets Consumer Retail
Segment Reporting Information [Line Items]
Operating Revenues	3,846	3,616
External Operating Revenues | Wireline | Mass Markets Small Business
Segment Reporting Information [Line Items]
Operating Revenues	624	635
External Operating Revenues | Wireline | Mass Markets
Segment Reporting Information [Line Items]
Operating Revenues	4,470	4,251
External Operating Revenues | Wireline | Global Enterprise Strategic Services
Segment Reporting Information [Line Items]
Operating Revenues	2,101	2,073
External Operating Revenues | Wireline | Global Enterprise Core
Segment Reporting Information [Line Items]
Operating Revenues	1,500	1,691
External Operating Revenues | Wireline | Global Enterprise
Segment Reporting Information [Line Items]
Operating Revenues	3,601	3,764
External Operating Revenues | Wireline | Global Wholesale
Segment Reporting Information [Line Items]
Operating Revenues	1,345	1,443
External Operating Revenues | Wireline | Other
Segment Reporting Information [Line Items]
Operating Revenues	153	101
External Operating Revenues | Total Segments
Segment Reporting Information [Line Items]
Operating Revenues	30,420	29,055
External Operating Revenues | Corporate, Eliminations and Other
Segment Reporting Information [Line Items]
Operating Revenues	398	365
Intersegment Revenues | Wireless
Segment Reporting Information [Line Items]
Operating Revenues	28	27
Intersegment Revenues | Wireline
Segment Reporting Information [Line Items]
Operating Revenues	221	271
Intersegment Revenues | Total Segments
Segment Reporting Information [Line Items]
Operating Revenues	249	298
Intersegment Revenues | Corporate, Eliminations and Other
Segment Reporting Information [Line Items]
Operating Revenues	$ (249)	$ (298)

XML

Debt - Additional Information (Detail)	1 Months Ended	3 Months Ended				0 Months Ended	12 Months Ended		12 Months Ended				1 Months Ended											0 Months Ended	1 Months Ended					1 Months Ended				3 Months Ended					1 Months Ended			1 Months Ended		0 Months Ended		0 Months Ended		0 Months Ended		0 Months Ended		0 Months Ended		0 Months Ended		0 Months Ended
	Feb. 28, 2014 USD ($)	Mar. 31, 2014 USD ($)	Mar. 10, 2014 USD ($)	Dec. 31, 2013 USD ($)	Mar. 31, 2014 364-Day Revolving Credit Agreement USD ($)	Sep. 02, 2013 Stock Purchase Agreement USD ($)	Dec. 31, 2013 Verizon Edge	Mar. 31, 2014 Verizon Edge USD ($)	Dec. 31, 2013 Verizon Edge Minimum	Mar. 31, 2014 5.143% Class D Cumulative Preferred Stock Verizon Wireless	Mar. 31, 2014 5.143% Class E Cumulative Preferred Stock Verizon Wireless	Mar. 31, 2014 Guarantee of Debt Obligations of GTE Corporation USD ($)	Feb. 28, 2014 2.375% Notes due 2022 EUR (€)	Feb. 28, 2014 3.25% Notes due 2026 EUR (€)	Feb. 28, 2014 4.75% Notes due 2034 GBP (£)	Feb. 28, 2014 Notes Due Twenty Fifty Four USD ($)	Mar. 31, 2014 Fixed Rate And Floating Rate Notes USD ($)	Mar. 31, 2014 Floating Rate Notes due 2019 USD ($)	Mar. 31, 2014 Floating Rate Notes due 2019 London Interbank Offered Rate (LIBOR)	Mar. 31, 2014 2.55% Notes due 2019 USD ($)	Mar. 31, 2014 3.45% Notes due 2021 USD ($)	Mar. 31, 2014 4.15% Notes due 2024 USD ($)	Mar. 31, 2014 5.05% Notes due 2034 USD ($)	Mar. 10, 2014 8.5% Notes due 2018 Cellco Partnership and Verizon Wireless Capital LLC USD ($)	Mar. 31, 2014 8.5% Notes due 2018 Cellco Partnership and Verizon Wireless Capital LLC USD ($)	Mar. 31, 2014 0.61% Notes Verizon Communications USD ($)	Mar. 31, 2014 0.61% Notes Verizon Communications London Interbank Offered Rate (LIBOR)	Mar. 31, 2014 1.95% Notes Verizon Communications USD ($)	Feb. 28, 2014 Term Loan Agreement USD ($)	Feb. 28, 2014 Term Loan Agreement Maximum	Feb. 28, 2014 Term Loan Agreement Maturity 3 Years USD ($)	Feb. 28, 2014 Term Loan Agreement Maturity 5 Years USD ($)	Mar. 31, 2014 Guarantee Of Debentures And First Mortgage Bonds Of Operating Telephone Company Subsidiaries USD ($)	Mar. 31, 2014 Verizon Notes	Feb. 28, 2014 Verizon Notes USD ($)	Feb. 21, 2014 Verizon Notes USD ($)	Feb. 28, 2014 Verizon Notes Verizon Wireless	Feb. 28, 2014 Verizon Notes due February 21, 2022 USD ($)	Feb. 28, 2014 Verizon Notes due February 21, 2022 Verizon Wireless	Feb. 28, 2014 Verizon Notes due February 21, 2022 Verizon Wireless London Interbank Offered Rate (LIBOR)	Feb. 28, 2014 Verizon Notes due February 21, 2025 USD ($)	Feb. 28, 2014 Verizon Notes due February 21, 2025 Verizon Wireless	Feb. 28, 2014 Verizon Notes due February 21, 2025 Verizon Wireless London Interbank Offered Rate (LIBOR)	Mar. 10, 2014 6.10% Notes due 2018 Verizon Communications USD ($)	Mar. 31, 2014 6.10% Notes due 2018 Verizon Communications USD ($)	Mar. 10, 2014 5.50% Notes due 2018 Verizon Communications USD ($)	Mar. 31, 2014 5.50% Notes due 2018 Verizon Communications USD ($)	Mar. 10, 2014 8.75% Notes due 2018 Verizon Communications USD ($)	Mar. 31, 2014 8.75% Notes due 2018 Verizon Communications USD ($)	Mar. 10, 2014 5.55% Notes due 2016 Verizon Communications USD ($)	Mar. 31, 2014 5.55% Notes due 2016 Verizon Communications USD ($)	Mar. 10, 2014 5.50% Notes due 2017 Verizon Communications USD ($)	Mar. 31, 2014 5.50% Notes due 2017 Verizon Communications USD ($)	Mar. 10, 2014 7.00% Debentures due 2016 Alltel Corporation USD ($)	Mar. 31, 2014 7.00% Debentures due 2016 Alltel Corporation USD ($)	Mar. 10, 2014 6.84% Debentures due 2018 GTE Corporation USD ($)	Mar. 31, 2014 6.84% Debentures due 2018 GTE Corporation USD ($)
Debt Instrument [Line Items]
Aggregate principal amount of Verizon Notes													€ 1,750,000,000	€ 1,250,000,000	£ 850,000,000	$ 500,000,000	$ 4,500,000,000	$ 500,000,000		$ 500,000,000	$ 1,000,000,000	$ 1,250,000,000	$ 1,250,000,000		$ 1,000,000,000										$ 5,000,000,000	$ 5,000,000,000		$ 2,500,000,000			$ 2,500,000,000				$ 1,500,000,000		$ 1,500,000,000		$ 1,300,000,000		$ 1,250,000,000		$ 750,000,000		$ 300,000,000		$ 600,000,000
Stated interest rate on debt instrument													2.375%	3.25%	4.75%	5.90%				2.55%	3.45%	4.15%	5.05%	8.50%				1.95%																6.10%		5.50%		8.75%		5.55%		5.50%		7.00%		6.84%
Debt instrument maturity date													2022	2026	2034	2054		2019		2019	2021	2024	2034	2018																				2018		2018		2018		2016		2017		2016		2018
Cash proceeds from issuance of debt, net of discounts and issuance costs	5,400,000,000															500,000,000	4,500,000,000
Tender offer for notes, expiration date		Mar. 17, 2014
Tender offer for notes, settlement date		Mar. 19, 2014
Debt instrument, description of variable rate basis																		Three-month LIBOR plus 0.77%								LIBOR plus 0.61%													Three-month LIBOR, plus 1.222%			Three-month LIBOR, plus 1.372%
Debt instrument, marginal rate																			0.77%								0.61%													1.222%			1.372%
Amount of notes repaid																									1,250,000,000	1,000,000,000		1,500,000,000
Notes purchased price of principal amount of note, percentage																									127.135%									100.00%
Borrowing capacity		6,200,000,000			2,000,000,000																								6,600,000,000		3,300,000,000	3,300,000,000
Debt instrument maturity period																															3 years	5 years
Leverage ratio																														350.00%
Quarterly interest payment start date																																					May 21, 2014
Debt instrument maturity date																																							Feb. 21, 2022			Feb. 21, 2025
Preferred stock dividend rate, percentage						5.143%
Preferred stock shares outstanding										825,000	825,000
Preferred stock redemption date						2020-04
Preferred stock redemption price, per share						$ 1,000
Amount of unused borrowing capacity under credit facility		6,100,000,000			2,000,000,000
Debt redemption cost																									900,000,000
Debt Tender Offer, Principal amount purchased			4,122,000,000																					619,000,000	600,000,000																			748,000,000	700,000,000	763,000,000	800,000,000	564,000,000	600,000,000	652,000,000	700,000,000	353,000,000	400,000,000	157,000,000	200,000,000	266,000,000	300,000,000
Principal amount outstanding in connection with the guarantee of debt obligations		109,769,000,000		93,591,000,000								1,400,000,000																					3,100,000,000
Guarantee liability								$ 300,000,000
Number of months over which a customer with a Verizon Edge plan can pay for their phone							24 months
Minimum number of days before a customer becomes eligible to upgrade their phone to a new phone under Verizon Edge									30 days
Percentage of required device payment									50.00%

XML

Acquisitions and Divestitures - Additional Information (Detail) (USD $)	0 Months Ended	3 Months Ended		3 Months Ended							0 Months Ended		0 Months Ended						1 Months Ended
	Feb. 21, 2014	Mar. 31, 2014	Dec. 31, 2013	Mar. 31, 2014 Verizon Notes	Feb. 28, 2014 Verizon Notes	Feb. 21, 2014 Verizon Notes	Feb. 28, 2014 Verizon Notes due February 21, 2022	Feb. 28, 2014 Verizon Notes due February 21, 2025	Mar. 31, 2014 T-Mobile USA AWS and PCS Wireless licenses agreement	Dec. 31, 2013 T-Mobile USA AWS and PCS Wireless licenses agreement	Jan. 06, 2014 T-Mobile Wireless licenses agreement	Mar. 31, 2014 T-Mobile USA 700 MHz A Block Wireless licenses agreements	Feb. 21, 2014 Vodafone Omnitel N.V.	Feb. 21, 2014 Stock Purchase Agreement	Sep. 02, 2013 Stock Purchase Agreement	Mar. 31, 2014 Verizon Wireless 5.143% Class D Cumulative Preferred Stock	Mar. 31, 2014 Verizon Wireless 5.143% Class E Cumulative Preferred Stock	Feb. 28, 2014 Verizon Wireless Verizon Notes	Feb. 28, 2014 Verizon Wireless Verizon Notes due February 21, 2022	Feb. 28, 2014 Verizon Wireless Verizon Notes due February 21, 2022 London Interbank Offered Rate (LIBOR)	Feb. 28, 2014 Verizon Wireless Verizon Notes due February 21, 2025	Feb. 28, 2014 Verizon Wireless Verizon Notes due February 21, 2025 London Interbank Offered Rate (LIBOR)
Business Acquisition [Line Items]
Percentage of noncontrolling interest by Vodafone Group Plc in Cellco Partnership joint venture	45.00%														45.00%
Aggregate consideration to complete the Wireless Transaction															$ 130,000,000,000
Cash paid to complete the Wireless Transaction		58,886,000,000												58,890,000,000
Aggregate value of common shares issued to Vodafone shareholders														61,300,000,000
Common stock, par value		$ 0.10	$ 0.10											$ 0.10
Aggregate principal amount of Verizon Notes					5,000,000,000	5,000,000,000	2,500,000,000	2,500,000,000
Verizon ownership percentage													23.10%
Selling price (fair value) of Verizon's equity method investment in Vodafone Omnitel													3,500,000,000
Other consideration paid to Vodafone		1,650,000,000												1,700,000,000
Common Shares issued	1,270,000,000
Pre-tax gain on sale of equity interest													1,900,000,000
Debt instrument maturity date																			Feb. 21, 2022		Feb. 21, 2025
Quarterly interest payment start date																		May 21, 2014
Debt instrument, description of variable rate basis																			Three-month LIBOR, plus 1.222%		Three-month LIBOR, plus 1.372%
Debt instrument, marginal rate																				1.222%		1.372%
Redemption price of notes percentage				100.00%
Preferred stock shares outstanding																825,000	825,000
Preferred stock redemption date															2020-04
Preferred stock redemption price, per share															$ 1,000
Preferred stock dividend rate, percentage															5.143%
Deferred tax liability attributable to the Wireless Transaction		13,500,000,000
Assets Held-for-sale, Current									900,000,000	900,000,000		3,300,000,000
License purchase and exchange transactions, net cash proceeds											$ 2,400,000,000

XML

Changes in Components of Total equity (Detail) (USD $) In Millions, unless otherwise specified	3 Months Ended
	Mar. 31, 2014	Mar. 31, 2013
Equity Note [Line Items]
Balance at January 1, 2014	$ 95,416
Net Income	5,986	4,855
Other comprehensive loss	(1,091)
Total Comprehensive Income	4,895	4,664
Issuance of common stock	127
Contributed capital	(26,963)
Dividends declared	(2,195)
Common stock in treasury	167
Purchase of noncontrolling interest	(55,960)
Distributions and other	(1,636)
Balance at March 31, 2014	13,851
Verizon
Equity Note [Line Items]
Balance at January 1, 2014	38,836
Net Income	3,947
Other comprehensive loss	(1,068)
Total Comprehensive Income	2,879
Issuance of common stock	127
Contributed capital	(26,963)
Dividends declared	(2,195)
Common stock in treasury	167
Distributions and other	(140)
Balance at March 31, 2014	12,711
Noncontrolling Interests
Equity Note [Line Items]
Balance at January 1, 2014	56,580
Net Income	2,039
Other comprehensive loss	(23)
Total Comprehensive Income	2,016
Purchase of noncontrolling interest	(55,960)
Distributions and other	(1,496)
Balance at March 31, 2014	$ 1,140

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Fair Value Measurements - Additional Information (Detail) (USD $) In Billions, unless otherwise specified				3 Months Ended	1 Months Ended	3 Months Ended
	Mar. 31, 2014 Forward Interest Rate Swaps	Dec. 31, 2013 Forward Interest Rate Swaps	Apr. 29, 2014 Forward Interest Rate Swaps Subsequent Event	Mar. 31, 2014 Previously Issued Cross Currency Swaps	Feb. 28, 2014 Cross Currency Swaps	Mar. 31, 2013 Cross Currency Swaps	Mar. 31, 2014 Cross Currency Swaps	Mar. 31, 2014 Interest Rate Swaps
Derivatives, Fair Value [Line Items]
Notional amount	$ 0.9	$ 2.0	$ 1.6					$ 1.8
Proceeds from other debt				1.6	5.4
Fair value of cross currency swaps							0.2
Pre-tax gain (loss) recognized in other comprehensive loss						$ (0.1)

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Reconciliation of Segment Assets (Detail) (USD $) In Millions, unless otherwise specified	Mar. 31, 2014	Dec. 31, 2013
Segment Reporting Information [Line Items]
Assets	$ 221,562	$ 274,098
Operating Segments
Segment Reporting Information [Line Items]
Assets	232,718	231,002
Operating Segments | Wireless
Segment Reporting Information [Line Items]
Assets	149,178	146,429
Operating Segments | Wireline
Segment Reporting Information [Line Items]
Assets	83,540	84,573
Corporate, Eliminations and Other
Segment Reporting Information [Line Items]
Assets	$ (11,156)	$ 43,096

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Wireless Licenses, Goodwill and Other Intangible Assets

3 Months Ended

Mar. 31, 2014

Wireless Licenses, Goodwill and Other Intangible Assets

3. Wireless Licenses, Goodwill and Other Intangible Assets

Wireless Licenses

Changes in the carrying amount of Wireless licenses are as follows:

(dollars in millions)
Balance at January 1, 2014	$	75,747
Acquisitions (Note 2)		136
Capitalized interest on wireless licenses		79
Reclassifications, adjustments and other		(3,249	)
Balance at March 31, 2014	$	72,713

Reclassifications, adjustments and other includes $3.3 billion of Wireless licenses that are classified as held for sale and included in Prepaid expenses and other on our condensed consolidated balance sheet at March 31, 2014. See Note 2 for additional details.

At March 31, 2014, approximately $5.5 billion of Wireless licenses were under development for commercial service for which we were capitalizing interest costs.

Goodwill

Changes in the carrying amount of Goodwill are as follows:

(dollars in millions)	Wireless		Wireline		Total
Balance at January 1, 2014	$	18,376	$	6,258	$	24,634
Acquisitions (Note 2)		–		13		13
Balance at March 31, 2014	$	18,376	$	6,271	$	24,647

Other Intangible Assets

The following table displays the composition of Other intangible assets, net:

	At March 31, 2014							At December 31, 2013
(dollars in millions)	Gross Amount		Accumulated Amortization			Net Amount		Gross Amount		Accumulated Amortization			Net Amount
Customer lists (5 to 13 years)	$	3,640	$	(2,735	)	$	905	$	3,639	$	(2,660	)	$	979
Non-network internal-use software (3 to 7 years)		12,183		(7,600	)		4,583		11,770		(7,317	)		4,453
Other (2 to 25 years)		662		(311	)		351		691		(323	)		368
Total	$	16,485	$	(10,646	)	$	5,839	$	16,100	$	(10,300	)	$	5,800

The amortization expense for Other intangible assets was as follows:

(dollars in millions)	Three Months Ended March 31,
2014		$       394
2013		386

The estimated future amortization expense for Other intangible assets is as follows:

Years	(dollars in millions)
Remainder of 2014		$    1,137
2015		1,280
2016		1,039
2017		852
2018		688

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Equity and Accumulated Other Comprehensive Income - Additional Information (Detail) In Billions, unless otherwise specified	0 Months Ended
	Feb. 21, 2014
Equity and Comprehensive Income [Line Items]
Percentage of noncontrolling interest by Vodafone Group Plc in Verizon Wireless joint venture	45.00%
Common Shares issued	1.27

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Composition of Other Intangible Assets Net (Detail) (USD $) In Millions, unless otherwise specified					3 Months Ended				3 Months Ended				3 Months Ended
	Mar. 31, 2014	Dec. 31, 2013	Mar. 31, 2014 Customer Lists	Dec. 31, 2013 Customer Lists	Mar. 31, 2014 Customer Lists Minimum	Mar. 31, 2014 Customer Lists Maximum	Mar. 31, 2014 Non-Network Internal-Use Software	Dec. 31, 2013 Non-Network Internal-Use Software	Mar. 31, 2014 Non-Network Internal-Use Software Minimum	Mar. 31, 2014 Non-Network Internal-Use Software Maximum	Mar. 31, 2014 Other Intangibles	Dec. 31, 2013 Other Intangibles	Mar. 31, 2014 Other Intangibles Minimum	Mar. 31, 2014 Other Intangibles Maximum
Finite-Lived Intangible Assets [Line Items]
Gross Amount	$ 16,485	$ 16,100	$ 3,640	$ 3,639			$ 12,183	$ 11,770			$ 662	$ 691
Accumulated Amortization	(10,646)	(10,300)	(2,735)	(2,660)			(7,600)	(7,317)			(311)	(323)
Net Amount	$ 5,839	$ 5,800	$ 905	$ 979			$ 4,583	$ 4,453			$ 351	$ 368
Useful life for finite-lived intangible assets, years					5 years	13 years			3 years	7 years			2 years	25 years

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Changes in Carrying Amount of Goodwill (Detail) (USD $) In Millions, unless otherwise specified	3 Months Ended			3 Months Ended
	Mar. 31, 2014	Mar. 31, 2014 Wireless	Dec. 31, 2013 Wireless	Mar. 31, 2014 Wireline
Goodwill [Line Items]
Beginning balance	$ 24,634	$ 18,376	$ 18,376	$ 6,258
Acquisitions (Note 2)	13			13
Ending balance	$ 24,647	$ 18,376	$ 18,376	$ 6,271

XML

Changes in Balances of Accumulated Other Comprehensive Income by Component (Detail) (USD $) In Millions, unless otherwise specified	3 Months Ended
	Mar. 31, 2014	Mar. 31, 2013
Equity And Accumulated Other Comprehensive Income [Line Items]
Balance at January 1, 2014	$ 2,358
Other comprehensive income (loss)	(7)
Amounts reclassified to net income	(1,061)
Other comprehensive loss attributable to Verizon	(1,068)	(179)
Balance at March 31, 2014	1,290
Foreign currency translation adjustments
Equity And Accumulated Other Comprehensive Income [Line Items]
Balance at January 1, 2014	853
Other comprehensive income (loss)	(38)
Amounts reclassified to net income	(911)
Other comprehensive loss attributable to Verizon	(949)
Balance at March 31, 2014	(96)
Unrealized loss on cash flow hedges
Equity And Accumulated Other Comprehensive Income [Line Items]
Balance at January 1, 2014	113
Other comprehensive income (loss)	25
Amounts reclassified to net income	(108)
Other comprehensive loss attributable to Verizon	(83)
Balance at March 31, 2014	30
Unrealized gain on marketable securities
Equity And Accumulated Other Comprehensive Income [Line Items]
Balance at January 1, 2014	117
Other comprehensive income (loss)	6
Amounts reclassified to net income	(5)
Other comprehensive loss attributable to Verizon	1
Balance at March 31, 2014	118
Defined benefit pension and postretirement plans
Equity And Accumulated Other Comprehensive Income [Line Items]
Balance at January 1, 2014	1,275
Amounts reclassified to net income	(37)
Other comprehensive loss attributable to Verizon	(37)
Balance at March 31, 2014	$ 1,238

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Amortization Expense for Other Intangible Assets (Detail) (USD $) In Millions, unless otherwise specified	3 Months Ended
	Mar. 31, 2014	Mar. 31, 2013
Finite-Lived Intangible Assets [Line Items]
Amortization expense for other intangible assets	$ 394	$ 386

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Estimated Future Amortization Expense for Other Intangible Assets (Detail) (USD $) In Millions, unless otherwise specified	Mar. 31, 2014
Finite-Lived Intangible Assets [Line Items]
Remainder of 2014	$ 1,137
2015	1,280
2016	1,039
2017	852
2018	$ 688

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Acquisitions and Divestitures

3 Months Ended

Mar. 31, 2014

Acquisitions and Divestitures

2. Acquisitions and Divestitures

Wireless

Wireless Transaction

On September 2, 2013, Verizon entered into a stock purchase agreement (the Stock Purchase Agreement) with Vodafone Group Plc (Vodafone) and Vodafone 4 Limited (Seller), pursuant to which Verizon agreed to acquire Vodafone’s indirect 45% interest in Cellco Partnership d/b/a Verizon Wireless (the Partnership, and such interest, the Vodafone Interest) for aggregate consideration of approximately $130 billion.

On February 21, 2014, pursuant to the terms and subject to the conditions set forth in the Stock Purchase Agreement, Verizon acquired (the Wireless Transaction) from Seller all of the issued and outstanding capital stock (the Transferred Shares) of Vodafone Americas Finance 1 Inc., a subsidiary of Seller (VF1 Inc.), which indirectly through certain subsidiaries (together with VF1 Inc., the Purchased Entities) owned the Vodafone Interest. In consideration for the Transferred Shares, upon completion of the Wireless Transaction, Verizon (i) paid approximately $58.89 billion in cash, (ii) issued approximately 1.27 billion shares of Verizon’s common stock, par value $0.10 per share (the Stock Consideration), which was valued at approximately $61.3 billion at the closing of the Wireless Transaction, (iii) issued senior unsecured Verizon notes in an aggregate principal amount of $5.0 billion (the Verizon Notes), (iv) sold Verizon’s indirectly owned 23.1% interest in Vodafone Omnitel N.V. (Omnitel, and such interest, the Omnitel Interest), valued at $3.5 billion and (v) provided other consideration, which included the assumption of preferred stock valued at approximately $1.7 billion. The total cash paid to Vodafone and the other costs of the Wireless Transaction, including financing, legal and bank fees, were financed through the incurrence of third-party indebtedness. See Note 4 for additional information.

In accordance with the accounting standard on consolidation, a change in a parent’s ownership interest while the parent retains a controlling financial interest in its subsidiary is accounted for as an equity transaction and remeasurement of assets and liabilities of previously controlled and consolidated subsidiaries is not permitted. As a result, we accounted for the Wireless Transaction by adjusting the carrying amount of the noncontrolling interest to reflect the change in Verizon’s ownership interest in the Partnership. Any difference between the fair value of the consideration paid and the amount by which the noncontrolling interest is adjusted has been recognized in equity attributable to Verizon.

Omnitel Transaction

On February 21, 2014, Verizon and Vodafone also consummated the sale of the Omnitel Interest (the Omnitel Transaction) by a subsidiary of Verizon to a subsidiary of Vodafone in connection with the Wireless Transaction pursuant to a separate share purchase agreement. As a result, during the three months ended March 31, 2014, we recognized a pre-tax gain of $1.9 billion on the disposal of the Omnitel interest in Equity in earnings of unconsolidated businesses on our condensed consolidated statement of income.

Verizon Notes

The Verizon Notes were issued to Vodafone pursuant to Verizon’s existing indenture. The Verizon Notes were issued in two separate series, with $2.5 billion due February 21, 2022 (the eight-year Verizon Notes) and $2.5 billion due February 21, 2025 (the eleven-year Verizon Notes). The Verizon Notes bear interest at a floating rate, which will be reset quarterly, with interest payable quarterly in arrears, beginning May 21, 2014. The eight-year Verizon Notes bear interest at a floating rate equal to three-month London Interbank Offered Rate (LIBOR), plus 1.222%, and the eleven-year Verizon Notes bear interest at a floating rate equal to three-month LIBOR, plus 1.372%. The indenture that governs the Verizon Notes contains certain negative covenants, including a negative pledge covenant and a merger or similar transaction covenant, affirmative covenants and events of default that are customary for companies maintaining an investment grade credit rating. An event of default for either series of the Verizon Notes may result in acceleration of the entire principal amount of all debt securities of that series. Beginning two years after the closing of the Wireless Transaction, Verizon may redeem all or any portion of the outstanding Verizon Notes held by Vodafone or any of its affiliates for a redemption price of 100% of the principal amount plus accrued and unpaid interest. The Verizon Notes may only be transferred by Vodafone to third parties in specified amounts during specified periods, commencing January 1, 2017. Any Verizon Notes held by third parties will not be redeemable by Verizon prior to their maturity dates. Verizon has agreed to file a registration statement with respect to the Verizon Notes at least three months prior to the Verizon Notes becoming transferable.

Other Consideration

Included in the other consideration provided to Vodafone is the indirect assumption of long-term obligations with respect to 5.143% Class D and Class E cumulative preferred stock (Preferred Stock) issued by one of the Purchased Entities. Both the Class D shares (825,000 shares outstanding) and Class E shares (825,000 shares outstanding) are mandatorily redeemable in April 2020 at $1,000 per share plus any accrued and unpaid dividends. Dividends accrue at 5.143% per annum and will be treated as interest expense. Both the Class D and Class E shares have been classified as liability instruments and were recorded at fair value as determined at the closing of the Wireless Transaction.

Deferred Tax Liabilities

Certain deferred taxes directly attributable to the Wireless Transaction have been calculated based on an analysis of taxes attributable to the difference between the tax basis of the investment in the noncontrolling interest that is assumed compared to Verizon’s book basis. As a result, Verizon recorded a deferred tax liability of approximately $13.5 billion.

Spectrum License Transactions

During the fourth quarter of 2013, we entered into license exchange agreements with T-Mobile USA, Inc. (T-Mobile USA) to exchange certain Advanced Wireless Services (AWS) and Personal Communication Services (PCS) licenses. These non-cash exchanges, which are subject to customary closing conditions, are expected to close in the first half of 2014. The exchange includes a number of swaps that we expect will result in more efficient use of the AWS and PCS bands. As a result of these agreements, $0.9 billion of Wireless licenses are classified as held for sale and included in Prepaid expenses and other on our condensed consolidated balance sheets at March 31, 2014 and December 31, 2013, respectively. Upon completion of the transaction, we expect to record a gain which will be determined upon the closing of the transaction.

Subsequent to the transaction with T-Mobile USA in the fourth quarter of 2013, on January 6, 2014, we announced two agreements with T-Mobile USA with respect to our remaining 700 MHz A block spectrum licenses. Under one agreement, we will sell certain of these licenses to T-Mobile USA in exchange for cash consideration of approximately $2.4 billion, and under the second agreement we will exchange the remainder of these licenses for AWS and PCS spectrum licenses. As a result of these agreements, $3.3 billion of Wireless licenses are classified as held for sale and included in Prepaid expenses and other on our condensed consolidated balance sheet at March 31, 2014. These transactions are subject to customary closing conditions. These transactions are expected to close in the middle of 2014. Upon completion of these transactions, we expect to record a gain which will be determined upon the closing of these transactions.

During the three months ended March 31, 2014, we acquired various wireless licenses for cash consideration that was not significant.

Other

During February 2014, Verizon acquired a business dedicated to the development of Internet Protocol (IP) television for cash consideration that was not significant. The transaction is expected to accelerate the availability of next-generation video services.

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Changes to Debt (Detail) (USD $) In Millions, unless otherwise specified	3 Months Ended
	Mar. 31, 2014	Mar. 31, 2013
Debt Instrument [Line Items]
Debt maturing within one year, Balance at January 1, 2014	$ 3,933
Long-term debt, Balance at January 1, 2014	89,658
Total, Balance at January 1, 2014	93,591
Proceeds from long-term borrowings	16,952	500
Verizon Notes	5,000
Preferred Stock	1,650
Repayments of long-term borrowings and capital leases obligations	(7,951)	(73)
Increase in short-term obligations, excluding current maturities	252	581
Other	275
Debt maturing within one year, Balance at March 31, 2014	2,152
Long-term debt, Balance at March 31, 2014	107,617
Total, Balance at March 31, 2014	109,769
Debt Maturing Within One Year
Debt Instrument [Line Items]
Debt maturing within one year, Balance at January 1, 2014	3,933
Repayments of long-term borrowings and capital leases obligations	(2,500)
Increase in short-term obligations, excluding current maturities	252
Reclassifications of long-term debt	532
Other	(65)
Debt maturing within one year, Balance at March 31, 2014	2,152
Long-term Debt
Debt Instrument [Line Items]
Long-term debt, Balance at January 1, 2014	89,658
Proceeds from long-term borrowings	16,952
Verizon Notes	5,000
Preferred Stock	1,650
Repayments of long-term borrowings and capital leases obligations	(5,451)
Reclassifications of long-term debt	(532)
Other	340
Long-term debt, Balance at March 31, 2014	$ 107,617

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Benefit or Income Cost Related to Pension and Postretirement Health Care and Life Insurance Plans (Detail) (USD $) In Millions, unless otherwise specified	3 Months Ended
	Mar. 31, 2014	Mar. 31, 2013
Pension
Defined Benefit Plan Disclosure [Line Items]
Service cost	$ 81	$ 99
Amortization of prior service cost (credit)	(2)	1
Expected return on plan assets	(295)	(311)
Interest cost	259	250
Net periodic benefit cost	43	39
Health Care And Life
Defined Benefit Plan Disclosure [Line Items]
Service cost	65	80
Amortization of prior service cost (credit)	(63)	(62)
Expected return on plan assets	(41)	(36)
Interest cost	277	274
Net periodic benefit cost	$ 238	$ 256

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Condensed Consolidated Statements of Income (USD $) In Millions, except Per Share data, unless otherwise specified	3 Months Ended
	Mar. 31, 2014	Mar. 31, 2013
Operating Revenues	$ 30,818	$ 29,420
Operating Expenses
Cost of services and sales (exclusive of items shown below)	11,189	10,932
Selling, general and administrative expense	8,332	8,148
Depreciation and amortization expense	4,137	4,118
Total Operating Expenses	23,658	23,198
Operating Income	7,160	6,222
Equity in earnings of unconsolidated businesses	1,902	(5)
Other income and (expense), net	(894)	39
Interest expense	(1,214)	(537)
Income Before Provision For Income Taxes	6,954	5,719
Provision for income taxes	(968)	(864)
Net Income	5,986	4,855
Net income attributable to noncontrolling interests	2,039	2,903
Net income attributable to Verizon	3,947	1,952
Net Income	$ 5,986	$ 4,855
Basic Earnings Per Common Share
Net income attributable to Verizon	$ 1.15	$ 0.68
Weighted-average shares outstanding (in millions)	3,425	2,866
Diluted Earnings Per Common Share
Net income attributable to Verizon	$ 1.15	$ 0.68
Weighted-average shares outstanding (in millions)	3,430	2,872
Dividends declared per common share	$ 0.530	$ 0.515

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Segment Information - Additional Information (Detail)	3 Months Ended
	Mar. 31, 2014 Segment	Mar. 31, 2013
Segment Reporting Information [Line Items]
Number of reportable segments	2
Number of customers individually accounting for more than ten percent of total operating revenues	No single customer accounted for more than 10% of our total operating revenues	No single customer accounted for more than 10% of our total operating revenues
Sales
Segment Reporting Information [Line Items]
Percentage maximum accounted for	10.00%	10.00%
Wireline
Segment Reporting Information [Line Items]
Number of countries outside the United States of America to which our Wireline segment provides products and services	150

XML

Condensed Consolidated Statements of Cash Flows (USD $) In Millions, unless otherwise specified	3 Months Ended
	Mar. 31, 2014	Mar. 31, 2013
Cash Flows from Operating Activities
Net Income	$ 5,986	$ 4,855
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization expense	4,137	4,118
Employee retirement benefits	281	295
Deferred income taxes	(155)	878
Provision for uncollectible accounts	231	260
Equity in earnings of unconsolidated businesses, net of dividends received	(1,894)	14
Changes in current assets and liabilities, net of effects from acquisition/disposition of businesses	(1,626)	(1,491)
Other, net	179	(1,398)
Net cash provided by operating activities	7,139	7,531
Cash Flows from Investing Activities
Capital expenditures (including capitalized software)	(4,150)	(3,602)
Acquisitions of investments and businesses, net of cash acquired	(157)	(21)
Acquisitions of wireless licenses, net	(213)	(117)
Other, net	(11)	141
Net cash used in investing activities	(4,531)	(3,599)
Cash Flows from Financing Activities
Proceeds from long-term borrowings	16,952	500
Repayments of long-term borrowings and capital lease obligations	(7,951)	(73)
Increase in short-term obligations, excluding current maturities	252	581
Dividends paid	(1,517)	(1,472)
Proceeds from sale of common stock	34	56
Purchase of common stock for treasury		(153)
Acquisition of noncontrolling interest	(58,886)
Other, net	(2,113)	(989)
Net cash used in financing activities	(53,229)	(1,550)
Increase (decrease) in cash and cash equivalents	(50,621)	2,382
Cash and cash equivalents, beginning of period	53,528	3,093
Cash and cash equivalents, end of period	$ 2,907	$ 5,475

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Schedule of Assets and Liabilities Measured at Fair Value on Recurring Basis (Detail) (Fair Value, Measurements, Recurring, USD $) In Millions, unless otherwise specified	Mar. 31, 2014
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Fair value of assets measured on a recurring basis	$ 1,802
Fair value of liabilities measured on a recurring basis	13
Short-term Investments | Equity Securities
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Fair value of assets measured on a recurring basis	383
Short-term Investments | Fixed Income Securities
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Fair value of assets measured on a recurring basis	254
Other Assets | Fixed Income Securities
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Fair value of assets measured on a recurring basis	884
Other Assets | Cross Currency Swaps
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Fair value of assets measured on a recurring basis	262
Other Assets | Interest Rate Swaps
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Fair value of assets measured on a recurring basis	19
Other Liabilities | Cross Currency Swaps
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Fair value of liabilities measured on a recurring basis	13
Level 1
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Fair value of assets measured on a recurring basis	383	[1]
Level 1 | Short-term Investments | Equity Securities
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Fair value of assets measured on a recurring basis	383	[1]
Level 2
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Fair value of assets measured on a recurring basis	1,419	[2]
Fair value of liabilities measured on a recurring basis	13	[2]
Level 2 | Short-term Investments | Fixed Income Securities
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Fair value of assets measured on a recurring basis	254	[2]
Level 2 | Other Assets | Fixed Income Securities
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Fair value of assets measured on a recurring basis	884	[2]
Level 2 | Other Assets | Cross Currency Swaps
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Fair value of assets measured on a recurring basis	262	[2]
Level 2 | Other Assets | Interest Rate Swaps
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Fair value of assets measured on a recurring basis	19	[2]
Level 2 | Other Liabilities | Cross Currency Swaps
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Fair value of liabilities measured on a recurring basis	$ 13	[2]

[1] quoted prices in active markets for identical assets or liabilities

[2] observable inputs other than quoted prices in active markets for identical assets and liabilities

XML

Equity and Accumulated Other Comprehensive Income (Tables)

3 Months Ended

Mar. 31, 2014

Schedule of Changes in Components of Total Equity

Changes in the components of Total equity were as follows:

(dollars in millions)	Attributable to Verizon			Noncontrolling Interests			Total Equity
Balance at January 1, 2014	$	38,836		$	56,580		$	95,416
Net income		3,947			2,039			5,986
Other comprehensive loss		(1,068	)		(23	)		(1,091	)
Comprehensive income		2,879			2,016			4,895
Issuance of common stock		127			–			127
Contributed capital		(26,963	)		–			(26,963	)
Dividends declared		(2,195	)		–			(2,195	)
Common stock in treasury		167			–			167
Purchase of noncontrolling interest		–			(55,960	)		(55,960	)
Distributions and other		(140	)		(1,496	)		(1,636	)
Balance at March 31, 2014	$	12,711		$	1,140		$	13,851

Schedule of Components in Accumulated Other Comprehensive Income

The changes in the balances of Accumulated other comprehensive income by component are as follows:

(dollars in millions)	Foreign currency translation adjustments			Unrealized loss on cash flow hedges			Unrealized gain on marketable securities			Defined benefit pension and postretirement plans			Total
Balance at January 1, 2014	$	853		$	113		$	117		$	1,275		$	2,358
Other comprehensive income (loss)		(38	)		25			6			–			(7	)
Amounts reclassified to net income		(911	)		(108	)		(5	)		(37	)		(1,061	)
Net other comprehensive income (loss)		(949	)		(83	)		1			(37	)		(1,068	)
Balance at March 31, 2014	$	(96	)	$	30		$	118		$	1,238		$	1,290

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Fair Value of Short Term and Long Term Debt Excluding Capital Leases (Detail) (USD $) In Millions, unless otherwise specified	Mar. 31, 2014	Dec. 31, 2013
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Short- and long-term debt	$ 109,769	$ 93,591
Carrying Amount, Fair Value Disclosure | Excluding Capital Leases
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Short- and long-term debt	109,516	93,298
Fair Value, Fair Value Disclosure | Excluding Capital Leases
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Short- and long-term debt	$ 122,052	$ 103,527

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Basis of Presentation - Additional Information (Detail)	3 Months Ended
	Mar. 31, 2014	Mar. 31, 2013	Jan. 28, 2014
Basis of Presentation [Line Items]
Restricted stock units outstanding to purchase shares included in diluted earnings per common share	5,000,000	6,000,000
Number of shares of Common stock authorized to be issued			6,250,000,000
Increase in number of authorized common shares
Basis of Presentation [Line Items]
Number of shares of Common stock authorized to be issued			2,000,000,000

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Basis of Presentation

3 Months Ended

Mar. 31, 2014

Basis of Presentation

1. Basis of Presentation

The accompanying unaudited condensed consolidated financial statements have been prepared based upon Securities and Exchange Commission 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, 2013. 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 certain prior year amounts to conform to the current year presentation. Effective January 1, 2014, we have also reclassified the results of certain businesses, such as development stage businesses that support our strategic initiatives, from our Wireline segment to Corporate, eliminations and other. The impact of this reclassification was not material to our condensed consolidated financial statements.

Recently Adopted Accounting Standards

During the first quarter of 2014, we adopted the accounting standard update relating to the presentation of an unrecognized tax benefit when a net operating loss carryforward, a similar tax loss, or a tax credit carryforward exists. The standard update provides that a liability related to an unrecognized tax benefit should be offset against same jurisdiction deferred tax assets for a net operating loss carryforward, a similar tax loss, or a tax credit carryforward if such settlement is required or expected in the event the uncertain tax position is disallowed. The adoption of this standard update did not have a significant impact on our condensed consolidated financial statements.

Leasing Arrangements

At each reporting period, we monitor the credit quality of the various lessees in our portfolios. Regarding the leveraged lease portfolio, we use external credit reports 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, and industry and general economic conditions. The credit quality of our lessees primarily varies from AAA to CCC+. 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. All significant accounts, individually or in the aggregate, are current and none are classified as impaired.

Earnings Per Common Share

There were a total of approximately 5 million and 6 million outstanding dilutive securities, primarily consisting of restricted stock units, included in the computation of diluted earnings per common share for the three months ended March 31, 2014 and 2013, respectively. Outstanding options to purchase shares that were not included in the computation of diluted earnings per common share because to do so would have been anti-dilutive for the period were not significant for the three months ended March 31, 2014, and 2013, respectively.

On January 28, 2014, at a special meeting of our shareholders, we received shareholder approval to increase our authorized shares of common stock by 2 billion shares to an aggregate 6.25 billion authorized shares of common stock. On February 4, 2014, this authorization became effective.

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Condensed Consolidated Statements of Comprehensive Income (USD $) In Millions, unless otherwise specified	3 Months Ended
	Mar. 31, 2014	Mar. 31, 2013
Net Income	$ 5,986	$ 4,855
Other comprehensive loss, net of taxes
Foreign currency translation adjustments	(949)	(148)
Unrealized loss on cash flow hedges	(83)	(6)
Unrealized gain on marketable securities	1	11
Defined benefit pension and postretirement plans	(37)	(36)
Other comprehensive loss attributable to Verizon	(1,068)	(179)
Other comprehensive loss attributable to noncontrolling interests	(23)	(12)
Total Comprehensive Income	4,895	4,664
Comprehensive income attributable to noncontrolling interests	2,016	2,891
Comprehensive income attributable to Verizon	2,879	1,773
Total Comprehensive Income	$ 4,895	$ 4,664

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Wireless Licenses, Goodwill and Other Intangible Assets (Tables)

3 Months Ended

Mar. 31, 2014

Changes in Carrying Amount of Wireless Licenses

Changes in the carrying amount of Wireless licenses are as follows:

(dollars in millions)
Balance at January 1, 2014	$	75,747
Acquisitions (Note 2)		136
Capitalized interest on wireless licenses		79
Reclassifications, adjustments and other		(3,249	)
Balance at March 31, 2014	$	72,713

Changes in Carrying Amount of Goodwill

Changes in the carrying amount of Goodwill are as follows:

(dollars in millions)	Wireless		Wireline		Total
Balance at January 1, 2014	$	18,376	$	6,258	$	24,634
Acquisitions (Note 2)		–		13		13
Balance at March 31, 2014	$	18,376	$	6,271	$	24,647

Composition of Other Intangible Assets, Net

The following table displays the composition of Other intangible assets, net:

	At March 31, 2014							At December 31, 2013
(dollars in millions)	Gross Amount		Accumulated Amortization			Net Amount		Gross Amount		Accumulated Amortization			Net Amount
Customer lists (5 to 13 years)	$	3,640	$	(2,735	)	$	905	$	3,639	$	(2,660	)	$	979
Non-network internal-use software (3 to 7 years)		12,183		(7,600	)		4,583		11,770		(7,317	)		4,453
Other (2 to 25 years)		662		(311	)		351		691		(323	)		368
Total	$	16,485	$	(10,646	)	$	5,839	$	16,100	$	(10,300	)	$	5,800

Amortization Expense for Other Intangible Assets

The amortization expense for Other intangible assets was as follows:

(dollars in millions)	Three Months Ended March 31,
2014		$       394
2013		386

Estimated Future Amortization Expense for Other Intangible Assets

The estimated future amortization expense for Other intangible assets is as follows:

Years	(dollars in millions)
Remainder of 2014		$    1,137
2015		1,280
2016		1,039
2017		852
2018		688

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Document and Entity Information	3 Months Ended
	Mar. 31, 2014
Document Information [Line Items]
Document Type	10-Q
Amendment Flag	false
Document Period End Date	Mar. 31, 2014
Document Fiscal Year Focus	2014
Document Fiscal Period Focus	Q1
Trading Symbol	VZ
Entity Registrant Name	VERIZON COMMUNICATIONS INC
Entity Central Index Key	0000732712
Current Fiscal Year End Date	--12-31
Entity Filer Category	Large Accelerated Filer
Entity Common Stock, Shares Outstanding	4,141,148,976

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Debt (Tables)

3 Months Ended

Mar. 31, 2014

Combined Schedule of Current and Noncurrent Debt and Capital Lease Obligations

Changes to debt during the three months ended March 31, 2014 are as follows:

(dollars in millions)	Debt Maturing within One Year			Long-term Debt			Total
Balance at January 1, 2014	$	3,933		$	89,658		$	93,591
Proceeds from long-term borrowings		–			16,952			16,952
Verizon Notes		–			5,000			5,000
Preferred Stock		–			1,650			1,650
Repayments of long-term borrowings and capital leases obligations		(2,500	)		(5,451	)		(7,951	)
Increase in short-term obligations, excluding current maturities		252			–			252
Reclassifications of long-term debt		532			(532	)		–
Other		(65	)		340			275
Balance at March 31, 2014	$	2,152		$	107,617		$	109,769

Schedule of Notes Repurchased as part of a Tender Offer

On March 10, 2014, we announced the commencement of a tender offer (the Tender Offer) to purchase for cash any and all of the series of notes listed in the following table:

(dollars in millions, except for Purchase Price)	Interest Rate			Maturity		Principal Amount Outstanding		Purchase Price (1)		Principal Amount Purchased
Verizon Communications		6.10	%		2018	$	1,500	$	1,170.07	$	748
		5.50	%		2018		1,500		1,146.91		763
		8.75	%		2018		1,300		1,288.35		564
		5.55	%		2016		1,250		1,093.62		652
		5.50	%		2017		750		1,133.22		353
Cellco Partnership and Verizon Wireless Capital LLC		8.50	%		2018		1,000		1,279.63		619
Alltel Corporation		7.00	%		2016		300		1,125.26		157
GTE Corporation		6.84	%		2018		600		1,196.85		266
										$	4,122

⁽¹⁾  Per $1,000 principal amount of notes

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Condensed Consolidated Balance Sheets (USD $) In Millions, unless otherwise specified	Mar. 31, 2014	Dec. 31, 2013
Current assets
Cash and cash equivalents	$ 2,907	$ 53,528
Short-term investments	637	601
Accounts receivable, net of allowances of $614 and $645	12,131	12,439
Inventories	881	1,020
Prepaid expenses and other	6,716	3,406
Total current assets	23,272	70,994
Plant, property and equipment	223,841	220,865
Less accumulated depreciation	134,785	131,909
Plant, property and equipment, net	89,056	88,956
Investments in unconsolidated businesses	889	3,432
Wireless licenses	72,713	75,747
Goodwill	24,647	24,634
Other intangible assets, net	5,839	5,800
Other assets	5,146	4,535
Total assets	221,562	274,098
Current liabilities
Debt maturing within one year	2,152	3,933
Accounts payable and accrued liabilities	14,984	16,453
Other	8,217	6,664
Total current liabilities	25,353	27,050
Long-term debt	107,617	89,658
Employee benefit obligations	26,977	27,682
Deferred income taxes	41,597	28,639
Other liabilities	6,167	5,653
Equity
Series preferred stock ($.10 par value; none issued)
Common stock ($.10 par value; 4,242,374,240 and 2,967,610,119 shares issued in each period, respectively)	424	297
Contributed capital	10,976	37,939
Reinvested earnings	3,534	1,782
Accumulated other comprehensive income	1,290	2,358
Common stock in treasury, at cost	(3,794)	(3,961)
Deferred compensation - employee stock ownership plans and other	281	421
Noncontrolling interests	1,140	56,580
Total equity	13,851	95,416
Total liabilities and equity	$ 221,562	$ 274,098

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Stock-Based Compensation

3 Months Ended

Mar. 31, 2014

Stock-Based Compensation

6. Stock-Based Compensation

Verizon Communications Long-Term Incentive Plan

The 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.

Restricted Stock Units

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 are classified as equity awards because the RSUs will be paid in Verizon common stock upon vesting. The RSU equity awards are measured using the grant date fair value of Verizon common stock and are not remeasured at the end of 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.

Performance Stock Units

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 performance goals have been achieved over the three-year performance cycle. 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 the Restricted Stock Unit and Performance Stock Unit activity:

(shares in thousands)	Restricted Stock Units			Performance Stock Units
Outstanding, January 1, 2014		16,193			23,724
Granted		4,514			6,578
Payments		(6,116	)		(9,153	)
Cancelled/Forfeited		(54	)		(77	)
Outstanding, March 31, 2014		14,537			21,072

As of March 31, 2014, unrecognized compensation expense related to the unvested portion of outstanding RSUs and PSUs was approximately $0.7 billion and is expected to be recognized over approximately two years.

The RSUs granted in 2014 have a weighted-average grant date fair value of $47.15 per unit.

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Fair Value Measurements

3 Months Ended

Mar. 31, 2014

Fair Value Measurements

5. Fair Value Measurements

The following table presents the balances of assets and liabilities measured at fair value on a recurring basis as of March 31, 2014:

(dollars in millions)	Level 1(1)		Level 2(2)		Level 3(3)		Total
Assets:
Short-term investments:
Equity securities	$	383	$	–	$	–	$	383
Fixed income securities		–		254		–		254
Other assets:
Fixed income securities		–		884		–		884
Cross currency swaps		–		262		–		262
Interest rate swaps		–		19		–		19
Total	$	383	$	1,419	$	–	$	1,802
Liabilities:
Other liabilities:
Cross currency swaps	$	–	$	13	$	–	$	13
Total	$	–	$	13	$	–	$	13

⁽¹⁾  quoted prices in active markets for identical assets or liabilities

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

⁽³⁾  no observable pricing inputs in the market

Equity securities consist of investments in common stock of domestic and international corporations measured using quoted prices in active markets.

Fixed income securities consist primarily of investments in municipal bonds that do not have quoted prices in active markets. For these securities, we use alternative matrix pricing resulting in these debt securities being classified as Level 2.

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. Our derivative instruments are recorded on a gross basis.

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 three months ended March 31, 2014.

Fair Value of Short-term and Long-term Debt

The fair value of our debt is determined using various methods, including quoted prices for identical terms and maturities, which is a Level 1 measurement, as well as quoted prices for similar terms and maturities in inactive markets and future cash flows discounted at current rates, which are Level 2 measurements. The fair value of our short-term and long-term debt, excluding capital leases, was as follows:

	At March 31, 2014				At December 31, 2013
(dollars in millions)	Carrying Amount		Fair Value			Carrying Amount		Fair Value
Short- and long-term debt, excluding capital leases	$	109,516	$	122,052		$	93,298	$	103,527

Derivative Instruments

We enter into derivative transactions to manage our exposure to fluctuations in foreign currency exchange rates, interest rates, and 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 swap agreements, commodity swap and forward 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 condensed 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 loss and recognized in earnings when the hedged item is recognized in earnings.

Interest Rate Swaps

We enter into domestic interest rate swaps to achieve a targeted mix of fixed and variable rate debt. We principally receive fixed rates and pay variable rates based on LIBOR, resulting in a net increase or decrease to Interest expense. 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 condensed consolidated balance sheets as assets and liabilities. The fair value of these contracts was not material at March 31, 2014 and December 31, 2013, respectively. As of March 31, 2014, the total notional amount of the interest rate swaps was $1.8 billion. The ineffective portion of these interest rate swaps was not material for the three months ended March 31, 2014.

Forward Interest Rate Swaps

In order to manage our exposure to future interest rate changes, during the fourth quarter of 2013, we entered into forward interest rate swaps with a total notional value of $2.0 billion. We designated these contracts as cash flow hedges. In March 2014, we settled these forward interest rate swaps and the pre-tax gain was not material. During the three months ended March 31, 2014, we entered into forward interest rate swaps with a total notional value of $0.9 billion. We designated these contracts as cash flow hedges.

In April 2014, we entered into forward interest rate swaps with a total notional value of $1.6 billion. We designated these contracts as cash flow hedges.

Cross Currency Swaps

Verizon Wireless previously entered into cross currency swaps designated as cash flow hedges to exchange approximately $1.6 billion of British Pound Sterling and Euro-denominated debt into U.S. dollars and to fix our future interest and principal payments in U.S. dollars, as well as to mitigate the effect of foreign currency transaction gains or losses.

During February 2014, we entered into cross currency swaps designated as cash flow hedges to exchange approximately $5.4 billion of Euro and British Pound Sterling denominated debt into U.S. dollars and to fix our future interest and principal payments in U.S. dollars, as well as to mitigate the impact of foreign currency transaction gains or losses.

A portion of the gains and losses recognized in Other comprehensive loss was reclassified to Other income and (expense), net to offset the related pre-tax foreign currency transaction gain or loss on the underlying debt obligations. The fair value of the outstanding swaps was $0.2 billion at March 31, 2014 and was not material at December 31, 2013. During the three months ended March 31, 2014 and 2013, an immaterial pre-tax gain and a pre-tax loss of $0.1 billion, respectively, were recognized in Other comprehensive loss.

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Segment Information (Tables)

3 Months Ended

Mar. 31, 2014

Summary of Operating Financial Information for Reportable Segments

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

	Three Months Ended March 31,
(dollars in millions)	2014			2013
External Operating Revenues
Wireless
Retail service	$	17,233		$	16,155
Other service		735			557
Service revenue		17,968			16,712
Equipment		1,869			1,809
Other		1,014			975
Total Wireless		20,851			19,496
Wireline
Consumer retail		3,846			3,616
Small business		624			635
Mass Markets		4,470			4,251
Strategic services		2,101			2,073
Core		1,500			1,691
Global Enterprise		3,601			3,764
Global Wholesale		1,345			1,443
Other		153			101
Total Wireline		9,569			9,559
Total segments		30,420			29,055
Corporate, eliminations and other		398			365
Total consolidated – reported	$	30,818		$	29,420
Intersegment Revenues
Wireless	$	28		$	27
Wireline		221			271
Total segments		249			298
Corporate, eliminations and other		(249	)		(298	)
Total consolidated – reported	$	–		$	–
Total Operating Revenues
Wireless	$	20,879		$	19,523
Wireline		9,790			9,830
Total segments		30,669			29,353
Corporate, eliminations and other		149			67
Total consolidated – reported	$	30,818		$	29,420
Operating Income
Wireless	$	7,318		$	6,418
Wireline		147			13
Total segments		7,465			6,431
Reconciling items		(305	)		(209	)
Total consolidated – reported	$	7,160		$	6,222

Summary of Reconciliation of Segment Assets

(dollars in millions)	At March 31, 2014			At December 31, 2013
Assets
Wireless	$	149,178		$	146,429
Wireline		83,540			84,573
Total segments		232,718			231,002
Corporate, eliminations and other		(11,156	)		43,096
Total consolidated – reported	$	221,562		$	274,098

Summary of Reconciliation of Segment Operating Income

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

	Three Months Ended March 31,
(dollars in millions)	2014			2013
Total segment operating income	$	7,465		$	6,431
Corporate, eliminations and other		(305	)		(209	)
Total consolidated operating income		7,160			6,222
Equity in earnings of unconsolidated businesses		1,902			(5	)
Other income and (expense), net		(894	)		39
Interest expense		(1,214	)		(537	)
Income Before Provision For Income Taxes	$	6,954		$	5,719

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Fair Value Measurements (Tables)

3 Months Ended

Mar. 31, 2014

Schedule of Assets and Liabilities Measured at Fair Value on Recurring Basis

The following table presents the balances of assets and liabilities measured at fair value on a recurring basis as of March 31, 2014:

(dollars in millions)	Level 1(1)		Level 2(2)		Level 3(3)		Total
Assets:
Short-term investments:
Equity securities	$	383	$	–	$	–	$	383
Fixed income securities		–		254		–		254
Other assets:
Fixed income securities		–		884		–		884
Cross currency swaps		–		262		–		262
Interest rate swaps		–		19		–		19
Total	$	383	$	1,419	$	–	$	1,802
Liabilities:
Other liabilities:
Cross currency swaps	$	–	$	13	$	–	$	13
Total	$	–	$	13	$	–	$	13

⁽¹⁾  quoted prices in active markets for identical assets or liabilities

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

⁽³⁾  no observable pricing inputs in the market

Schedule of Fair Value of Short-Term and Long-Term Debt, Excluding Capital Leases

The fair value of our short-term and long-term debt, excluding capital leases, was as follows:

	At March 31, 2014				At December 31, 2013
(dollars in millions)	Carrying Amount		Fair Value			Carrying Amount		Fair Value
Short- and long-term debt, excluding capital leases	$	109,516	$	122,052		$	93,298	$	103,527

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Segment Information

3 Months Ended

Mar. 31, 2014

Segment Information

9. Segment Information

Reportable Segments

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 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. Effective January 1, 2014, we have also reclassified the results of certain businesses, such as development stage businesses that support our strategic initiatives, from our Wireline segment to Corporate, eliminations and other. The impact of this reclassification was not material to our condensed consolidated financial statements or our segment results of operations.

Our segments and their principal activities consist of the following:

Segment	Description
Wireless	Wireless’ communications products and services include wireless voice and data services and equipment sales, which are provided to consumer, business and government customers across the United States.
Wireline	Wireline’s voice, data and video communications products and enhanced services include broadband video and data, corporate networking solutions, data center and cloud services, security and managed network services and local and long distance voice services. We provide these products and services to consumers in the United States, as well as to carriers, businesses and government customers both in the United States and in over 150 other countries around the world.

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

	Three Months Ended March 31,
(dollars in millions)	2014			2013
External Operating Revenues
Wireless
Retail service	$	17,233		$	16,155
Other service		735			557
Service revenue		17,968			16,712
Equipment		1,869			1,809
Other		1,014			975
Total Wireless		20,851			19,496
Wireline
Consumer retail		3,846			3,616
Small business		624			635
Mass Markets		4,470			4,251
Strategic services		2,101			2,073
Core		1,500			1,691
Global Enterprise		3,601			3,764
Global Wholesale		1,345			1,443
Other		153			101
Total Wireline		9,569			9,559
Total segments		30,420			29,055
Corporate, eliminations and other		398			365
Total consolidated – reported	$	30,818		$	29,420
Intersegment Revenues
Wireless	$	28		$	27
Wireline		221			271
Total segments		249			298
Corporate, eliminations and other		(249	)		(298	)
Total consolidated – reported	$	–		$	–
Total Operating Revenues
Wireless	$	20,879		$	19,523
Wireline		9,790			9,830
Total segments		30,669			29,353
Corporate, eliminations and other		149			67
Total consolidated – reported	$	30,818		$	29,420
Operating Income
Wireless	$	7,318		$	6,418
Wireline		147			13
Total segments		7,465			6,431
Reconciling items		(305	)		(209	)
Total consolidated – reported	$	7,160		$	6,222

(dollars in millions)	At March 31, 2014			At December 31, 2013
Assets
Wireless	$	149,178		$	146,429
Wireline		83,540			84,573
Total segments		232,718			231,002
Corporate, eliminations and other		(11,156	)		43,096
Total consolidated – reported	$	221,562		$	274,098

Corporate, eliminations and other at December 31, 2013 is primarily comprised of cash and cash equivalents which were used to complete the Wireless Transaction on February 21, 2014.

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

	Three Months Ended March 31,
(dollars in millions)	2014			2013
Total segment operating income	$	7,465		$	6,431
Corporate, eliminations and other		(305	)		(209	)
Total consolidated operating income		7,160			6,222
Equity in earnings of unconsolidated businesses		1,902			(5	)
Other income and (expense), net		(894	)		39
Interest expense		(1,214	)		(537	)
Income Before Provision For Income Taxes	$	6,954		$	5,719

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 months ended March 31, 2014 and 2013.

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Employee Benefits

3 Months Ended

Mar. 31, 2014

Employee Benefits

7. Employee Benefits

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 our share of the cost for certain recent and future retirees. In accordance with our accounting policy for pension and other postretirement benefits, operating expenses include pension and benefit related credits and/or charges based on actuarial assumptions, including projected discount rates and an estimated return on plan assets. These estimates are updated in the fourth quarter or upon a remeasurement event to reflect actual return on plan assets and updated actuarial assumptions. The adjustment will be recognized in the income statement during the fourth quarter or upon a remeasurement event pursuant to our accounting policy for the recognition of actuarial gains and losses.

Net Periodic Benefit Cost

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

(dollars in millions)	Pension						Health Care and Life
Three Months Ended March 31,	2014			2013			2014			2013
Service cost	$	81		$	99		$	65		$	80
Amortization of prior service cost (credit)		(2	)		1			(63	)		(62	)
Expected return on plan assets		(295	)		(311	)		(41	)		(36	)
Interest cost		259			250			277			274
Net periodic benefit cost	$	43		$	39		$	238		$	256

Severance Payments

During the three months ended March 31, 2014, we paid severance benefits of $0.2 billion. At March 31, 2014, we had a remaining severance liability of $0.6 billion, a portion of which includes future contractual payments to employees separated as of March 31, 2014.

Employer Contributions

During the three months ended March 31, 2014, we contributed $0.5 billion to our other postretirement benefit plans and $0.2 billion to our qualified pension plans. The contributions to our nonqualified pension plans were not material during the three months ended March 31, 2014. There have been no material changes with respect to the qualified and nonqualified pension contributions in 2014 as previously disclosed in Part II. Item 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, 2013.

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Equity and Accumulated Other Comprehensive Income

3 Months Ended

Mar. 31, 2014

Equity and Accumulated Other Comprehensive Income

8. Equity and Accumulated Other Comprehensive Income

Equity

Changes in the components of Total equity were as follows:

(dollars in millions)	Attributable to Verizon			Noncontrolling Interests			Total Equity
Balance at January 1, 2014	$	38,836		$	56,580		$	95,416
Net income		3,947			2,039			5,986
Other comprehensive loss		(1,068	)		(23	)		(1,091	)
Comprehensive income		2,879			2,016			4,895
Issuance of common stock		127			–			127
Contributed capital		(26,963	)		–			(26,963	)
Dividends declared		(2,195	)		–			(2,195	)
Common stock in treasury		167			–			167
Purchase of noncontrolling interest		–			(55,960	)		(55,960	)
Distributions and other		(140	)		(1,496	)		(1,636	)
Balance at March 31, 2014	$	12,711		$	1,140		$	13,851

The changes in Common stock, Contributed capital and Purchase of noncontrolling interest are primarily due to the completion of the Wireless Transaction on February 21, 2014. See Note 2 for additional information.

Prior to the closing of the Wireless Transaction, noncontrolling interests included in our condensed consolidated financial statements primarily consisted of Vodafone’s 45% ownership interest in Verizon Wireless. The noncontrolling interests that remain after the completion of the Wireless Transaction primarily relate to wireless partnership entities.

Common Stock

As a result of the Wireless Transaction, Verizon issued approximately 1.27 billion shares of Verizon common stock.

Accumulated Other Comprehensive Income

The changes in the balances of Accumulated other comprehensive income by component are as follows:

(dollars in millions)	Foreign currency translation adjustments			Unrealized loss on cash flow hedges			Unrealized gain on marketable securities			Defined benefit pension and postretirement plans			Total
Balance at January 1, 2014	$	853		$	113		$	117		$	1,275		$	2,358
Other comprehensive income (loss)		(38	)		25			6			–			(7	)
Amounts reclassified to net income		(911	)		(108	)		(5	)		(37	)		(1,061	)
Net other comprehensive income (loss)		(949	)		(83	)		1			(37	)		(1,068	)
Balance at March 31, 2014	$	(96	)	$	30		$	118		$	1,238		$	1,290

The amounts presented above in net other comprehensive income (loss) are net of taxes and noncontrolling interests, which are not significant. For the three months ended March 31, 2014, the amounts reclassified to net income related to foreign currency translation adjustments are included in Equity in earnings of unconsolidated businesses on our condensed consolidated statement of income and are a result of the completion of the Omnitel Transaction. See Note 2 for additional details. For the three months ended March 31, 2014, the amounts reclassified to net income related to defined benefit pension and postretirement plans are included in Cost of services and sales and Selling, general and administrative expense on our condensed consolidated statements of income. For the three months ended March 31, 2014, all other amounts reclassified to net income are included in Other income and (expense), net on our condensed consolidated statements of income.

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Commitments and Contingencies

3 Months Ended

Mar. 31, 2014

Commitments and Contingencies

10. Commitments and Contingencies

In the ordinary course of business Verizon is involved in various commercial litigation and regulatory proceedings at the state and federal level. Where it is determined, in consultation with counsel based on litigation and settlement risks, that a loss is probable and estimable in a given matter, the Company establishes an accrual. In none of the currently pending matters is the amount of accrual material. An estimate of the reasonably possible loss or range of loss in excess of the amounts already accrued cannot be made at this time due to various factors typical in contested proceedings, including (1) uncertain damage theories and demands; (2) a less than complete factual record; (3) uncertainty concerning legal theories and their resolution by courts or regulators; and (4) the unpredictable nature of the opposing party and its demands. We continuously monitor these proceedings as they develop and adjust any accrual or disclosure as needed. We do not expect that the ultimate resolution of any pending regulatory or legal matter 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.

Verizon is currently involved in approximately 50 federal district court actions alleging that Verizon is infringing various patents. Most of these cases are brought by non-practicing entities and effectively seek only monetary damages; a small number are brought by companies that have sold products and seek injunctive relief as well. These cases have progressed to various stages and a small number may go to trial in the coming 12 months if they are not otherwise resolved.

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. We do not believe performance under the guarantee is likely.

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Tender Offer to Purchase for Cash Any And All of Series Of Notes (Detail) (USD $) In Millions, unless otherwise specified	0 Months Ended
	Mar. 10, 2014		Mar. 31, 2014
Debt Instrument [Line Items]
Principal Amount Purchased	$ 4,122
Verizon Communications | 6.10% Notes due 2018
Debt Instrument [Line Items]
Interest Rate	6.10%
Maturity	2018
Principal Amount Outstanding	1,500
Purchase Price	1,170.07	[1]
Principal Amount Purchased	748		700
Verizon Communications | 5.50% Notes due 2018
Debt Instrument [Line Items]
Interest Rate	5.50%
Maturity	2018
Principal Amount Outstanding	1,500
Purchase Price	1,146.91	[1]
Principal Amount Purchased	763		800
Verizon Communications | 8.75% Notes due 2018
Debt Instrument [Line Items]
Interest Rate	8.75%
Maturity	2018
Principal Amount Outstanding	1,300
Purchase Price	1,288.35	[1]
Principal Amount Purchased	564		600
Verizon Communications | 5.55% Notes due 2016
Debt Instrument [Line Items]
Interest Rate	5.55%
Maturity	2016
Principal Amount Outstanding	1,250
Purchase Price	1,093.62	[1]
Principal Amount Purchased	652		700
Verizon Communications | 5.50% Notes due 2017
Debt Instrument [Line Items]
Interest Rate	5.50%
Maturity	2017
Principal Amount Outstanding	750
Purchase Price	1,133.22	[1]
Principal Amount Purchased	353		400
Cellco Partnership and Verizon Wireless Capital LLC | 8.5% Notes due 2018
Debt Instrument [Line Items]
Interest Rate	8.50%
Maturity	2018
Principal Amount Outstanding	1,000
Purchase Price	1,279.63	[1]
Principal Amount Purchased	619		600
Alltel Corporation | 7.00% Debentures due 2016
Debt Instrument [Line Items]
Interest Rate	7.00%
Maturity	2016
Principal Amount Outstanding	300
Purchase Price	1,125.26	[1]
Principal Amount Purchased	157		200
GTE Corporation | 6.84% Debentures due 2018
Debt Instrument [Line Items]
Interest Rate	6.84%
Maturity	2018
Principal Amount Outstanding	600
Purchase Price	1,196.85	[1]
Principal Amount Purchased	$ 266		$ 300

[1] Per $1,000 principal amount of notes

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Employee Benefits (Tables)

3 Months Ended

Mar. 31, 2014

Benefit or (Income) Cost Related to Pension and Postretirement Health Care and Life Insurance

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

(dollars in millions)	Pension						Health Care and Life
Three Months Ended March 31,	2014			2013			2014			2013
Service cost	$	81		$	99		$	65		$	80
Amortization of prior service cost (credit)		(2	)		1			(63	)		(62	)
Expected return on plan assets		(295	)		(311	)		(41	)		(36	)
Interest cost		259			250			277			274
Net periodic benefit cost	$	43		$	39		$	238		$	256

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Changes in Carrying Amount of Wireless Licenses (Detail) (USD $) In Millions, unless otherwise specified			3 Months Ended
	Mar. 31, 2014	Dec. 31, 2013	Mar. 31, 2014 Wireless Licenses
Indefinite-lived Intangible Assets [Line Items]
Beginning balance	$ 72,713	$ 75,747	$ 75,747
Acquisitions (Note 2)			136
Capitalized interest on wireless licenses			79
Reclassifications, adjustments and other			(3,249)
Ending balance	$ 72,713	$ 75,747	$ 72,713

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Commitments and Contingencies - Additional Information (Detail)	3 Months Ended
	Mar. 31, 2014 LegalMatter
Loss Contingencies [Line Items]
Approximate number of federal district court actions alleged for patent infringement	50
Guarantee obligations, year term (in years)	30 years

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Employee Benefits - Additional Information (Detail) (USD $) In Billions, unless otherwise specified	3 Months Ended
	Mar. 31, 2014
Defined Benefit Plan Disclosure [Line Items]
Amount paid in severance benefits over the period	$ 0.2
Post employment benefits liability	0.6
Other Postretirement Benefit Plans
Defined Benefit Plan Disclosure [Line Items]
Defined benefit plan contributions by employer	0.5
Qualified pension plans
Defined Benefit Plan Disclosure [Line Items]
Defined benefit plan contributions by employer	$ 0.2

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Condensed Consolidated Balance Sheets (Parenthetical) (USD $) In Millions, except Share data, unless otherwise specified	Mar. 31, 2014	Dec. 31, 2013
Accounts receivable, allowances	$ 614	$ 645
Series preferred stock, par value	$ 0.10	$ 0.10
Series preferred stock, issued
Common stock, par value	$ 0.10	$ 0.10
Common stock, shares issued	4,242,374,240	2,967,610,119

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Debt

3 Months Ended

Mar. 31, 2014

Debt

4. Debt

Changes to debt during the three months ended March 31, 2014 are as follows:

(dollars in millions)	Debt Maturing within One Year			Long-term Debt			Total
Balance at January 1, 2014	$	3,933		$	89,658		$	93,591
Proceeds from long-term borrowings		–			16,952			16,952
Verizon Notes		–			5,000			5,000
Preferred Stock		–			1,650			1,650
Repayments of long-term borrowings and capital leases obligations		(2,500	)		(5,451	)		(7,951	)
Increase in short-term obligations, excluding current maturities		252			–			252
Reclassifications of long-term debt		532			(532	)		–
Other		(65	)		340			275
Balance at March 31, 2014	$	2,152		$	107,617		$	109,769

During February 2014, we issued €1.75 billion aggregate principal amount of 2.375% Notes due 2022, €1.25 billion aggregate principal amount of 3.25% Notes due 2026 and £0.85 billion aggregate principal amount of 4.75% Notes due 2034. The issuance of these Notes resulted in cash proceeds of approximately $5.4 billion, net of discounts and issuance costs. The net proceeds were used, in part, to finance the Wireless Transaction. Net proceeds not used to finance the Wireless Transaction were used for general corporate purposes. Also, during February 2014, we issued $0.5 billion aggregate principal amount of 5.90% Notes due 2054 resulting in cash proceeds of approximately $0.5 billion, net of discounts and issuance costs. The net proceeds were used for general corporate purposes.

On March 10, 2014, we announced the commencement of a tender offer (the Tender Offer) to purchase for cash any and all of the series of notes listed in the following table:

(dollars in millions, except for Purchase Price)	Interest Rate			Maturity		Principal Amount Outstanding		Purchase Price (1)		Principal Amount Purchased
Verizon Communications		6.10	%		2018	$	1,500	$	1,170.07	$	748
		5.50	%		2018		1,500		1,146.91		763
		8.75	%		2018		1,300		1,288.35		564
		5.55	%		2016		1,250		1,093.62		652
		5.50	%		2017		750		1,133.22		353
Cellco Partnership and Verizon Wireless Capital LLC		8.50	%		2018		1,000		1,279.63		619
Alltel Corporation		7.00	%		2016		300		1,125.26		157
GTE Corporation		6.84	%		2018		600		1,196.85		266
										$	4,122

⁽¹⁾  Per $1,000 principal amount of notes

The Tender Offer for each series of notes was subject to a financing condition, which was either satisfied or waived with respect to all series. The Tender Offer expired on March 17, 2014 and settled on March 19, 2014. In addition to the purchase price, any accrued and unpaid interest on the purchased notes was paid to the date of purchase. During March 2014, we recorded early debt redemption costs in connection with the Tender Offer (see “Early Debt Redemption”).

During March 2014, we issued $4.5 billion aggregate principal amount of fixed and floating rate notes resulting in cash proceeds of approximately $4.5 billion, net of discounts and issuance costs. The issuances consisted of the following: $0.5 billion aggregate principal amount Floating Rate Notes due 2019 that bear interest at a rate equal to three-month LIBOR plus 0.77% which rate will be reset quarterly, $0.5 billion aggregate principal amount of 2.55% Notes due 2019, $1.0 billion aggregate principal amount of 3.45% Notes due 2021, $1.25 billion aggregate principal amount of 4.15% Notes due 2024 and $1.25 billion aggregate principal amount of 5.05% Notes due 2034. During March 2014, the net proceeds were used to purchase notes in the Tender Offer described above.

During March 2014, Verizon Wireless redeemed $1.25 billion aggregate principal amount of the Cellco Partnership and Verizon Wireless Capital LLC 8.50% Notes due 2018 at 127.135% of the principal amount of such notes, plus accrued and unpaid interest (see “Early Debt Redemption”). Also, during March 2014, $1.0 billion of LIBOR plus 0.61% Verizon Communications Notes and $1.5 billion of 1.95% Verizon Communications Notes matured and were repaid.

Term Loan Agreement

During February 2014, we drew $6.6 billion pursuant to a term loan agreement with a group of major financial institutions to finance, in part, the Wireless Transaction. $3.3 billion of the loans under the term loan agreement have a maturity of three years and $3.3 billion of the loans under the term loan agreement have a maturity of five years (the 5-Year Loans). The 5-Year Loans provide for the partial amortization of principal during the last two years that they are outstanding. Loans under the term loan agreement bear interest at floating rates. The term loan agreement contains certain negative covenants, including a negative pledge covenant, a merger or similar transaction covenant and an accounting changes covenant, affirmative covenants and events of default that are customary for companies maintaining an investment grade credit rating. In addition, the term loan agreement requires us to maintain a leverage ratio (as defined in the term loan agreement) not in excess of 3.50:1.00, until our credit ratings are equal to or higher than A3 and A- at Moody’s Investors Service and Standard & Poor’s Ratings Services, respectively.

Verizon Notes

During February 2014, in connection with the Wireless Transaction, we issued $5.0 billion aggregate principal amount of floating rate notes to Vodafone. These notes were issued in two separate series, with $2.5 billion due February 21, 2022 and $2.5 billion due February 21, 2025. The Verizon Notes bear interest at a floating rate, which will be reset quarterly, with interest payable quarterly in arrears, beginning May 21, 2014 (see Note 2). The eight-year Verizon Notes bear interest at a floating rate equal to three-month LIBOR, plus 1.222%, and the eleven-year Verizon Notes bear interest at a floating rate equal to three-month LIBOR, plus 1.372%.

Preferred Stock

As a result of the Wireless Transaction, we assumed long-term obligations with respect to 5.143% Class D and Class E cumulative Preferred Stock issued by one of the Purchased Entities. Both the Class D shares (825,000 shares outstanding) and Class E shares (825,000 shares outstanding) are mandatorily redeemable in April 2020 at $1,000 per share plus any accrued and unpaid dividends. Dividends accrue at 5.143% per annum and will be treated as interest expense. Both the Class D and Class E shares have been classified as liability instruments and were recorded at fair value as determined at the closing of the Wireless Transaction.

Other Credit Facilities

As of March 31, 2014, the unused borrowing capacity under our $6.2 billion credit facility was approximately $6.1 billion and the unused borrowing capacity under our $2.0 billion 364-day revolving credit agreement was $2.0 billion.

Early Debt Redemption

During March 2014, we recorded net debt redemption costs of $0.9 billion in connection with the early redemption of $1.25 billion aggregate principal amount of Cellco Partnership and Verizon Wireless Capital LLC 8.50% Notes due 2018, and the purchase of the following in the Tender Offer: $0.7 billion of the $1.5 billion aggregate principal amount of Verizon 6.10% Notes due 2018, $0.8 billion of the $1.5 billion aggregate principal amount of Verizon 5.50% Notes due 2018, $0.6 billion of the $1.3 billion aggregate principal amount of Verizon 8.75% Notes due 2018, $0.7 billion of the $1.25 billion aggregate principal amount of Verizon 5.55% Notes due 2016, $0.4 billion of the $0.75 billion aggregate principal amount of Verizon 5.50% Notes due 2017, $0.6 billion of the $1.0 billion aggregate principal amount of Cellco Partnership and Verizon Wireless Capital LLC 8.50% Notes due 2018, $0.2 billion of the $0.3 billion aggregate principal amount of Alltel Corporation 7.00% Debentures due 2016 and $0.3 billion of the $0.6 billion aggregate principal amount of GTE Corporation 6.84% Debentures due 2018.

We recognized these costs in Other income and (expense), net on our condensed consolidated statement of income during the three months ended March 31, 2014.

Guarantees

We guarantee the debentures and first mortgage bonds of our operating telephone company subsidiaries. As of March 31, 2014, $3.1 billion principal amount of these obligations remain outstanding. Each guarantee will remain in place for the life of the obligation unless terminated pursuant to its terms, including the operating telephone company no longer being a wholly-owned subsidiary of Verizon.

We also guarantee the debt obligations of GTE Corporation that were issued and outstanding prior to July 1, 2003. As of March 31, 2014, $1.4 billion principal amount of these obligations remain outstanding.

In 2013, we launched Verizon Edge, a program that provides eligible wireless customers with the ability to pay for their phone over 24 months and upgrade to a new phone after a minimum of 30 days, subject to certain conditions, including making at least 50% of the required device payments, trading in their phone in good working condition and signing a new contract with Verizon Wireless. Verizon values this trade-in right as a guarantee liability. The guarantee liability is initially measured at fair value and is determined based on assumptions including the probability and timing of the customer upgrading to a new phone, the customer’s estimated remaining installment balance at the time of trade-in and the fair value of the phone at the time of trade-in. As of March 31, 2014, the guarantee liability related to this program was approximately $0.3 billion.

Debt Covenants

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

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Wireless Licenses, Goodwill and Other Intangible Assets - Additional Information (Detail) (USD $) In Billions, unless otherwise specified	Mar. 31, 2014
T-Mobile USA 700 MHz A Block Wireless licenses agreements
Indefinite-lived Intangible Assets [Line Items]
Assets Held-for-sale, Current	$ 3.3
Wireless Licenses
Indefinite-lived Intangible Assets [Line Items]
Wireless licenses under development	$ 5.5

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Stock Based Compensation - Additional Information (Detail) (USD $) In Billions, except Share data in Millions, unless otherwise specified	3 Months Ended
	Mar. 31, 2014
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Maximum number of shares available for awards under the Long-Term Incentive Plan	119.6
Restricted Stock Units and Performance Stock Units
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Unrecognized compensation expense related to the unvested portion of RSUs and PSUs	$ 0.7
Weighted-average period of unrecognized compensation expense related to the unvested portion of RSUs and PSUs (in years)	2 years
Restricted Stock Units
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Weighted average grant date fair value per unit	$ 47.15

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Stock-Based Compensation (Tables)

3 Months Ended

Mar. 31, 2014

Schedule of Restricted and Performance Stock Unit Activity

The following table summarizes the Restricted Stock Unit and Performance Stock Unit activity:

(shares in thousands)	Restricted Stock Units			Performance Stock Units
Outstanding, January 1, 2014		16,193			23,724
Granted		4,514			6,578
Payments		(6,116	)		(9,153	)
Cancelled/Forfeited		(54	)		(77	)
Outstanding, March 31, 2014		14,537			21,072