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, 2015
	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.)
1095 Avenue of the Americas New York, New York	10036
(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 the 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, 2015, 4,078,487,075 shares of the registrant’s common stock were outstanding, after deducting 163,887,165 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, 2015 and 2014		3
	Condensed Consolidated Statements of Comprehensive Income Three months ended March 31, 2015 and 2014		4
	Condensed Consolidated Balance Sheets At March 31, 2015 and December 31, 2014		5
	Condensed Consolidated Statements of Cash Flows Three months ended March 31, 2015 and 2014		6
	Notes to Condensed Consolidated Financial Statements		7
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations		23
Item 3.	Quantitative and Qualitative Disclosures About Market Risk		44
Item 4.	Controls and Procedures		44
PART II – OTHER INFORMATION
Item 1.	Legal Proceedings		44
Item 1A.	Risk Factors		44
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds		45
Item 6.	Exhibits		46
Signature			47
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)	2015			2014
Operating Revenues	$	31,984		$	30,818
Operating Expenses
Cost of services and sales (exclusive of items shown below)		12,096			11,189
Selling, general and administrative expense		7,939			8,332
Depreciation and amortization expense		3,989			4,137
Total Operating Expenses		24,024			23,658
Operating Income		7,960			7,160
Equity in earnings (losses) of unconsolidated businesses		(34	)		1,902
Other income and (expense), net		75			(894	)
Interest expense		(1,332	)		(1,214	)
Income Before Provision For Income Taxes		6,669			6,954
Provision for income taxes		(2,331	)		(968	)
Net Income	$	4,338		$	5,986
Net income attributable to noncontrolling interests	$	119		$	2,039
Net income attributable to Verizon		4,219			3,947
Net Income	$	4,338		$	5,986
Basic Earnings Per Common Share
Net income attributable to Verizon	$	1.03		$	1.15
Weighted-average shares outstanding (in millions)		4,116			3,425
Diluted Earnings Per Common Share
Net income attributable to Verizon	$	1.02		$	1.15
Weighted-average shares outstanding (in millions)		4,121			3,430
Dividends declared per common share	$	0.55		$	0.53

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)	2015			2014
Net Income	$	4,338		$	5,986
Other comprehensive loss, net of taxes
Foreign currency translation adjustments		(141	)		(949	)
Unrealized loss on cash flow hedges		(13	)		(83	)
Unrealized gain on marketable securities		3			1
Defined benefit pension and postretirement plans		(44	)		(37	)
Other comprehensive loss attributable to Verizon		(195	)		(1,068	)
Other comprehensive loss attributable to noncontrolling interests		–			(23	)
Total Comprehensive Income	$	4,143		$	4,895
Comprehensive income attributable to noncontrolling interests	$	119		$	2,016
Comprehensive income attributable to Verizon		4,024			2,879
Total Comprehensive Income	$	4,143		$	4,895

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, 2015			At December 31, 2014
Assets
Current assets
Cash and cash equivalents	$	4,386		$	10,598
Short-term investments		547			555
Accounts receivable, net of allowances of $745 and $739		12,698			13,993
Inventories		1,076			1,153
Assets held for sale		893			552
Prepaid expenses and other		3,236			2,772
Total current assets		22,836			29,623
Plant, property and equipment		210,389			230,508
Less accumulated depreciation		128,747			140,561
		81,642			89,947
Investments in unconsolidated businesses		762			802
Wireless licenses		75,693			75,341
Goodwill		23,303			24,639
Other intangible assets, net		5,779			5,728
Non-current assets held for sale		9,580			–
Deposit for wireless licenses		10,430			921
Other assets		5,765			5,707
Total assets	$	235,790		$	232,708
Liabilities and Equity
Current liabilities
Debt maturing within one year	$	4,439		$	2,735
Accounts payable and accrued liabilities		15,189			16,680
Liabilities related to assets held for sale		572			–
Other		8,513			8,649
Total current liabilities		28,713			28,064
Long-term debt		108,949			110,536
Employee benefit obligations		33,010			33,280
Deferred income taxes		42,330			41,578
Non-current liabilities related to assets held for sale		943			–
Other liabilities		11,086			5,574
Equity
Series preferred stock ($.10 par value; none issued)		–			–
Common stock ($.10 par value; 4,242,374,240 shares issued in each period)		424			424
Contributed capital		10,391			11,155
Reinvested earnings		4,422			2,447
Accumulated other comprehensive income		916			1,111
Common stock in treasury, at cost		(7,093	)		(3,263	)
Deferred compensation – employee stock ownership plans and other		279			424
Noncontrolling interests		1,420			1,378
Total equity		10,759			13,676
Total liabilities and equity	$	235,790		$	232,708

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)	2015			2014
Cash Flows from Operating Activities
Net Income	$	4,338		$	5,986
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization expense		3,989			4,137
Employee retirement benefits		284			281
Deferred income taxes		823			(155	)
Provision for uncollectible accounts		383			231
Equity in earnings (losses) of unconsolidated businesses, net of dividends received		44			(1,894	)
Changes in current assets and liabilities, net of effects from acquisition/disposition of businesses		(888	)		(1,626	)
Other, net		1,196			179
Net cash provided by operating activities		10,169			7,139
Cash Flows from Investing Activities
Capital expenditures (including capitalized software)		(3,665	)		(4,150	)
Acquisitions of investments and businesses, net of cash acquired		(2	)		(157	)
Acquisitions of wireless licenses		(9,555	)		(213	)
Other, net		46			(11	)
Net cash used in investing activities		(13,176	)		(4,531	)
Cash Flows from Financing Activities
Proceeds from long-term borrowings		6,497			16,952
Repayments of long-term borrowings and capital lease obligations		(5,576	)		(7,951	)
Increase in short-term obligations, excluding current maturities		482			252
Dividends paid		(2,153	)		(1,517	)
Proceeds from sale of common stock		–			34
Purchase of common stock for treasury		(5,000	)		–
Acquisition of noncontrolling interest		–			(58,886	)
Other, net		2,545			(2,113	)
Net cash used in financing activities		(3,205	)		(53,229	)
Decrease in cash and cash equivalents		(6,212	)		(50,621	)
Cash and cash equivalents, beginning of period		10,598			53,528
Cash and cash equivalents, end of period	$	4,386		$	2,907

See Notes to Condensed Consolidated Financial Statements

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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, 2014. 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.

Leasing Arrangements

At each reporting period, we monitor the credit quality of the various lessees in our portfolios. Regarding the leveraged lease portfolio, external credit reports are used 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 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, 2015 and 2014, respectively.

Recently Adopted Accounting Standards

During the first quarter of 2015, we adopted the accounting standard update related to the reporting of discontinued operations and disclosures of disposals of components of an entity, which changes the criteria for reporting discontinued operations. As a result of this standard update, a disposal of a component of an entity or a group of components of an entity is required to be reported in discontinued operations if the disposal represents a strategic shift that has, or will have, a major effect on an entity’s operations and financial results. The prospective adoption of this standard update did not have a significant impact on our condensed consolidated financial statements.

Recently Issued Accounting Standards

In January 2015, the accounting standard update related to the reporting of extraordinary and unusual items was issued. This standard update eliminates the concept of extraordinary items from generally accepted accounting principles in the United States (U.S. GAAP) as part of an initiative to reduce complexity in accounting standards while maintaining or improving the usefulness of the information provided to the users of the financial statements. The presentation and disclosure guidance for items that are unusual in nature or occur infrequently will be retained and expanded to include items that are both unusual in nature and infrequent in occurrence. This standard update is effective as of the first quarter of 2016; however, earlier adoption is permitted. The adoption of this standard update is not expected to have a significant impact on our condensed consolidated financial statements.

In April 2015, the accounting standard update related to the simplification of the presentation of debt issuances costs was issued. This standard update requires that debt issuance costs related to a recognized debt liability be presented in the balance sheet as a direct deduction from the carrying amount of that debt liability. This standard update is effective as of the first quarter of 2016; however, earlier adoption is permitted. The adoption of this standard update is not expected to have a significant impact on our condensed consolidated financial statements.

In May 2014, the accounting standard update related to the recognition of revenue from contracts with customers was issued. This standard update clarifies the principles for recognizing revenue and develops a common revenue standard for U.S. GAAP and International Financial Reporting Standards. The standard update intends to provide a more robust framework for addressing revenue issues; improve comparability of revenue recognition practices across entities, industries, jurisdictions, and capital markets; and provide more useful information to users of financial statements through improved disclosure requirements. Upon

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adoption of this standard update, we expect that the allocation and timing of revenue recognition will be impacted. Although we currently expect to adopt this standard update during the first quarter of 2017, the Financial Accounting Standards Board, in April 2015, voted to issue a proposal which would defer the adoption of this standard update until the first quarter of 2018.

There are two adoption methods available for implementation of the standard update related to the recognition of revenue from contracts with customers. Under one method, the guidance is applied retrospectively to contracts for each reporting period presented, subject to allowable practical expedients. Under the other method, the guidance is applied to contracts not completed as of the date of initial application, recognizing the cumulative effect of the change as an adjustment to the beginning balance of retained earnings, and also requires additional disclosures comparing the results to the previous guidance. We are currently evaluating these adoption methods and the impact that this standard update will have on our condensed consolidated financial statements.

In June 2014, an accounting standard update was issued related to the accounting for share-based payments when the terms of an award provide that a performance target could be achieved after the requisite service period. The standard update resolves the diverse accounting treatment for these share-based payments by requiring that a performance target that affects vesting and that could be achieved after the requisite service period be treated as a performance condition. The requisite service period ends when the employee can cease rendering service and still be eligible to vest in the award if the performance target is achieved. We will adopt this standard update during the first quarter of 2016. The adoption of this standard update is not expected to have a significant impact on our condensed consolidated financial statements.

2. Acquisitions and Divestitures

Wireless

Spectrum License Transactions

On January 29, 2015, the Federal Communications Commission (FCC) completed an auction of 65 MHz of spectrum, which it identified as the Advanced Wireless Services (AWS)-3 band. Verizon participated in that auction and was the high bidder on 181 spectrum licenses, for which we paid cash of approximately $10.4 billion. During the fourth quarter of 2014, we made a deposit of $0.9 billion related to our participation in this auction. During the first quarter of 2015, we submitted an application to the FCC and paid $9.5 billion to the FCC to complete payment for these licenses. The deposits related to these spectrum licenses are classified within Deposit for wireless licenses on our condensed consolidated balance sheets at March 31, 2015 and December 31, 2014, respectively. The cash payment of $9.5 billion is classified within Acquisitions of wireless licenses on our condensed consolidated statement of cash flows for the three months ended March 31, 2015. On April 8, 2015, the FCC granted us these spectrum licenses.

During the first quarter of 2015, we completed a license exchange transaction with affiliates of AT&T Inc. to exchange certain AWS and PCS spectrum licenses and as a result we recorded an immaterial gain.

During the three months ended March 31, 2015, we acquired various other wireless licenses for cash consideration that was not significant.

Tower Monetization Transaction

During March 2015, we completed a transaction with American Tower Corporation (American Tower) pursuant to which American Tower acquired the exclusive rights to lease and operate approximately 11,300 of our wireless towers for an upfront payment of $5.0 billion. Under the terms of the leases, American Tower has exclusive rights to lease and operate the towers over an average term of approximately 28 years. As part of this transaction, we also sold 162 towers for $0.1 billion. We will sublease capacity on the towers from American Tower for a minimum of 10 years at current market rates, with options to renew. As the leases expire, American Tower has fixed-price purchase options to acquire these towers based on their anticipated fair market values at the end of the lease terms. The upfront payment, including the towers sold, which is primarily included within Other liabilities on our condensed consolidated balance sheet, is accounted for as deferred rent and as a financing obligation. The $2.4 billion accounted for as deferred rent, which is presented within Other, net cash flows from operating activities, relates to the portion of the towers for which the right-of-use has passed to the tower operator. The $2.7 billion accounted for as a financing obligation, which is presented within Other, net cash flows from financing activities, relates to the portion of the towers that we continue to occupy and use for network operations.

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Wireline

Access Line Sale

On February 5, 2015, we announced that we have entered into a definitive agreement with Frontier Communications Corporation (Frontier) pursuant to which Verizon will sell its local exchange business and related landline activities in California, Florida, and Texas, including FiOS Internet and Video customers, switched and special access lines and high-speed Internet service and long distance voice accounts in these three states for approximately $10.5 billion, subject to certain adjustments and including the assumption of $0.6 billion of indebtedness from Verizon by Frontier. The transaction, which includes the acquisition by Frontier of the equity interests of Verizon’s incumbent local exchange carriers (ILECs) in California, Florida and Texas, does not involve any assets or liabilities of Verizon Wireless. The assets and liabilities that will be sold are currently included in Verizon’s continuing operations and classified as assets held for sale and liabilities related to assets held for sale on our condensed consolidated balance sheet as of March 31, 2015. The transaction is subject to the satisfaction of certain closing conditions including, among others, receipt of state and federal telecommunications regulatory approvals, and we expect this transaction to close during the first half of 2016.

The transaction will result in Frontier acquiring approximately 2.1 million copper lines, 1.5 million FiOS Internet subscribers, 1.2 million FiOS Video subscribers and the related ILEC businesses from Verizon. This business generated revenues of approximately $5.4 billion, excluding revenue with affiliates, for Verizon in 2014. The operating results of this business are included within our Wireline segment for all periods presented.

The following table summarizes the major classes of assets and liabilities of our local exchange and related landline activities in California, Florida and Texas which are classified as held for sale on our condensed consolidated balance sheet as of March 31, 2015:

	(dollars in millions)
Assets held for sale:
Accounts receivable	$	496
Prepaid expense and other		60
Total current assets held for sale		556
Plant, property and equipment, net		8,198
Goodwill (Note 3)		1,328
Other assets		54
Total non-current assets held for sale		9,580
Total assets held for sale	$	10,136
Liabilities related to assets held for sale:
Accounts payable and accrued liabilities	$	277
Other current liabilities		295
Total current liabilities related to assets held for sale		572
Long-term debt		594
Employee benefit obligations		215
Other liabilities		134
Total non-current liabilities related to assets held for sale		943
Total liabilities related to assets held for sale	$	1,515

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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, 2015	$	75,341
Acquisitions (Note 2)		42
Capitalized interest on wireless licenses		4
Reclassifications, adjustments and other		306
Balance at March 31, 2015	$	75,693

Reclassifications, adjustments and other includes the exchanges of wireless licenses in 2015 (see Note 2 for additional details).

At March 31, 2015, approximately $0.4 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, 2015	$	18,390	$	6,249		$	24,639
Reclassifications, adjustments and other		–		(1,336	)		(1,336	)
Balance at March 31, 2015	$	18,390	$	4,913		$	23,303

The decrease in Goodwill at March 31, 2015 was primarily due to the reclassification of $1.3 billion of Goodwill to Non-current assets held for sale on our condensed consolidated balance sheet at March 31, 2015 as a result of our agreement to sell our local exchange business and related landline activities in California, Florida, and Texas to Frontier (see Note 2 for additional details). The amount of Goodwill reclassified was based on the relative fair value of the transaction to the Wireline reporting unit.

Other Intangible Assets

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

	At March 31, 2015							At December 31, 2014
(dollars in millions)	Gross Amount		Accumulated Amortization			Net Amount		Gross Amount		Accumulated Amortization			Net Amount
Customer lists (5 to 13 years)	$	3,617	$	(2,980	)	$	637	$	3,618	$	(2,924	)	$	694
Non-network internal-use software (3 to 7 years)		13,544		(8,756	)		4,788		13,194		(8,462	)		4,732
Other (5 to 25 years)		725		(371	)		354		670		(368	)		302
Total	$	17,886	$	(12,107	)	$	5,779	$	17,482	$	(11,754	)	$	5,728

The amortization expense for Other intangible assets was as follows:

(dollars in millions)	Three Months Ended March 31,
2015		$         381
2014		394

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

Years	(dollars in millions)
Remainder of 2015		$    1,128
2016		1,277
2017		1,078
2018		903
2019		673

4. Debt

Changes to debt during the three months ended March 31, 2015 are as follows:

(dollars in millions)	Debt Maturing within One Year			Long-term Debt			Total
Balance at January 1, 2015	$	2,735		$	110,536		$	113,271
Proceeds from borrowings		4,000			2,497			6,497
Repayments of borrowings and capital leases obligations		(5,576	)		–			(5,576	)
Increase in short-term obligations, excluding current maturities		482			–			482
Reclassifications of long-term debt		2,782			(2,782	)		–
Reclassification of long-term debt to Non-current liabilities related to assets held for sale (Note 2)		–			(594	)		(594	)
Other		16			(708	)		(692	)
Balance at March 31, 2015	$	4,439		$	108,949		$	113,388

February Exchange Offers

On February 11, 2015, we announced the commencement of seven separate private offers to exchange (the February Exchange Offers) specified series of outstanding notes and debentures issued by Verizon and GTE Corporation (collectively, the Old Notes) for new Notes to be issued by Verizon (the New Notes) and, in the case of the 6.94% debentures due 2028 of GTE Corporation, cash. The February Exchange Offers have been accounted for as a modification of debt. On March 13, 2015, Verizon issued $2.9 billion aggregate principal amount of 4.272% Notes due 2036 (the 2036 New Notes), $5.0 billion aggregate principal amount of 4.522% Notes due 2048 (the 2048 New Notes) and $5.5 billion aggregate principal amount of 4.672% Notes due 2055 (the 2055 New Notes) in satisfaction of the exchange offer consideration on tendered Old Notes (not including accrued and unpaid interest on the Old Notes). The following tables list the series of Old Notes included in the February Exchange Offers and the principal amount of each such series accepted by Verizon for exchange.

The table below lists the series of Old Notes included in the February Exchange Offer for the 2036 New Notes:

(dollars in millions)	Interest Rate			Maturity		Principal Amount Outstanding		Principal Amount Accepted For Exchange
Verizon Communications Inc.		5.15	%		2023	$	11,000	$	2,483

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The table below lists the series of Old Notes included in the February Exchange Offers for the 2048 New Notes:

(dollars in millions)	Interest Rate			Maturity		Principal Amount Outstanding		Principal Amount Accepted For Exchange
Verizon Communications Inc.		6.90	%		2038	$	1,250	$	773
		6.40	%		2038		1,750		884
		6.40	%		2033		4,355		2,159
		6.25	%		2037		750		–
GTE Corporation		6.94	%		2028		800		–
								$	3,816

The table below lists the series of Old Notes included in the February Exchange Offer for the 2055 New Notes:

(dollars in millions)	Interest Rate			Maturity		Principal Amount Outstanding		Principal Amount Accepted For Exchange
Verizon Communications Inc.		6.55	%		2043	$	10,670	$	4,084

Term Loan Agreement

During the first quarter of 2015, we entered into a term loan agreement with a major financial institution, pursuant to which we borrowed $6.5 billion for general corporate purposes, including the acquisition of spectrum licenses. Borrowings under the term loan agreement mature in March 2016, with a $4.0 billion mandatory prepayment required in June 2015. 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.

During March 2015, we prepaid approximately $5.0 billion of the term loan agreement, which satisfies the mandatory prepayment.

Other Credit Facilities

As of March 31, 2015, the unused borrowing capacity under our $8.0 billion credit facility was approximately $7.9 billion.

Additional Financing Activities (Non-Cash Transaction)

During the first quarter of 2015, we financed, primarily through vendor financing arrangements, the purchase of approximately $0.2 billion of long-lived assets, consisting primarily of network equipment. At March 31, 2015, $0.8 billion of these arrangements, including those entered into in prior years, remained outstanding. These purchases are non-cash financing activities and therefore not reflected within Capital expenditures on our condensed consolidated statements of cash flows.

Guarantees

We guarantee the debentures and first mortgage bonds of our operating telephone company subsidiaries. As of March 31, 2015, $3.1 billion aggregate principal amount of these obligations remained 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, 2015, $1.4 billion aggregate principal amount of these obligations remain outstanding.

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5. Wireless Equipment Installment Plans

We offer new and existing customers the option to participate in Verizon Edge, a program that provides eligible wireless customers with the ability to pay for their device over a period of time (an equipment installment plan) and the right to upgrade their device after a minimum of 30 days, subject to certain conditions, including making a stated portion of the required device payments, trading in their device in good working condition and signing a new device contract with Verizon. The gross guarantee liability related to this program, which was approximately $0.6 billion at March 31, 2015, and $0.7 billion at December 31, 2014, respectively, was primarily included in Other current liabilities on our condensed consolidated balance sheets.

At the time of sale, we impute risk adjusted interest on the receivables associated with Verizon Edge. We record the imputed interest as a reduction to the related accounts receivable. Interest income, which is included within Other income and (expense), net on our condensed consolidated statements of income, is recognized over the financed installment term.

We assess the collectability of our Verizon Edge receivables based upon a variety of factors, including the credit quality of the customer base, payment trends and other qualitative factors. The current portion of our receivables related to Verizon Edge included in Accounts receivable was $2.0 billion at March 31, 2015 and was $2.3 billion at December 31, 2014. The long-term portion of the equipment installment plan receivables included in Other assets was $0.9 billion at March 31, 2015 and was $1.2 billion at December 31, 2014.

The credit profiles of our customers with a Verizon Edge plan are similar to those of our customers with a traditional subsidized plan. Customers with a credit profile which carries a higher risk are required to make a down payment for equipment financed through Verizon Edge.

Sales of Wireless Equipment Installment Receivables

On March 27, 2015, we established a program to sell from time to time, on an uncommitted basis, selected wireless equipment installment receivables under the Verizon Edge program to a group of relationship banks (Purchasers). Under the program, we will transfer the receivables to wholly-owned subsidiaries that are bankruptcy remote special purpose entities (Sellers). The Sellers will then sell the receivables to the Purchasers for cash and additional consideration upon settlement of the receivables (the deferred purchase price). The receivables sold under the program are no longer considered assets of Verizon. We will continue to bill and collect on the receivables in exchange for a monthly servicing fee, which is not material.

Under this arrangement, each Seller’s sole business consists of the acquisition of the receivables from Verizon and the resale of the receivables to the Purchasers. The assets of the Sellers are not available to be used to satisfy obligations of any Verizon entities other than the Sellers.

During the three months ended March 31, 2015, we sold $2.0 billion of receivables, net of allowances, imputed interest and the trade-in right, and received cash proceeds of $1.3 billion. Additionally, we recorded a deferred purchase price of $0.7 billion, which was initially recorded at fair value, based on the remaining installment amounts expected to be collected, adjusted by the timing and estimated value of the device trade-in. The estimated value of the device trade-in considers prices expected to be offered to us by independent third parties. This estimate contemplates changes in value after the launch of a device. The fair value measurements are considered to be Level 3 measurements within the fair value hierarchy.

At March 31, 2015, our deferred purchase price receivable was $0.7 billion, which is included within Other assets on our condensed consolidated balance sheet. Generally, our maximum exposure to loss as a result of selling these equipment installment receivables is limited to the amount of our deferred purchase price.

The cash proceeds received from the Purchasers are recorded within Cash Flows from Operating Activities on our condensed consolidated statement of cash flows as the cash received from the Purchasers upon the sale of the receivables and the collection of the deferred purchase price is not subject to significant interest rate risk.

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6. 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, 2015:

(dollars in millions)	Level 1(1)		Level 2(2)		Level 3(3)		Total
Assets:
Short-term investments:
Equity securities	$	298	$	–	$	–	$	298
Fixed income securities		6		243		–		249
Other current assets:
Fixed income securities		250		–		–		250
Other assets:
Fixed income securities		–		915		–		915
Interest rate swaps and other		–		111		–		111
Total	$	554	$	1,269	$	–	$	1,823
Liabilities:
Other current liabilities:
Cross currency swaps and other	$	–	$	137	$	–	$	137
Other liabilities:
Forward interest rate swaps		–		301		–		301
Cross currency swaps		–		1,318		–		1,318
Total	$	–	$	1,756	$	–	$	1,756

⁽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 as well as U.S. Treasury securities. We use quoted prices in active markets for our U.S. Treasury securities, therefore these securities are classified as Level 1. For all other fixed income securities that do not have quoted prices in active markets, 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, 2015.

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, 2015				At December 31, 2014
(dollars in millions)	Carrying Amount		Fair Value		Carrying Amount		Fair Value
Short- and long-term debt, excluding capital leases	$	112,738	$	128,347	$	112,755	$	126,549

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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 posted collateral of approximately $0.8 billion and $0.6 billion related to derivative contracts under collateral exchange arrangements at March 31, 2015 and December 31, 2014, respectively, which was recorded as Prepaid expenses and other in our condensed consolidated balance sheets. During the first quarter of 2015, we paid an immaterial amount of cash to enter into amendments to certain collateral exchange arrangements. These amendments suspend cash collateral posting for a specified period of time by both counterparties.

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 the London Interbank Offered Rate, 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, 2015 and December 31, 2014, respectively. At March 31, 2015 and December 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, 2015.

Forward Interest Rate Swaps

In order to manage our exposure to future interest rate changes, we have entered into forward interest rate swaps. At March 31, 2015 and December 31, 2014, these swaps had a notional value of $2.0 billion. We designated these contracts as cash flow hedges. The fair value of these contracts was $0.3 billion and $0.2 billion at March 31, 2015 and December 31, 2014, respectively, which was included within Other liabilities on our condensed consolidated balance sheets.

Cross Currency Swaps

We enter into cross currency swaps to exchange 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. These swaps are designated as cash flow hedges. 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 $1.4 billion at March 31, 2015 and $0.6 billion at December 31, 2014, which were primarily included within Other liabilities on our condensed consolidated balance sheets. At March 31, 2015 and December 31, 2014, the total notional amount of the cross currency swaps was $10.3 billion. During the three months ended March 31, 2015 and 2014, a pre-tax loss of $0.9 billion and an immaterial pre-tax gain, respectively, were recognized in Other comprehensive loss.

7. 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, 2015		15,007			19,966
Granted		4,235			6,220
Payments		(5,839	)		(6,721	)
Cancelled/Forfeited		(48	)		(176	)
Outstanding, March 31, 2015		13,355			19,289

As of March 31, 2015, 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 2015 have a weighted-average grant date fair value of $48.29 per unit.

8. 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.

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Net Periodic 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,	2015			2014			2015			2014
Service cost	$	94		$	81		$	81		$	65
Amortization of prior service credit		1			(2	)		(72	)		(63	)
Expected return on plan assets		(317	)		(295	)		(25	)		(41	)
Interest cost		243			259			279			277
Total	$	21		$	43		$	263		$	238

Severance Payments

During the three months ended March 31, 2015, we paid severance benefits of $0.3 billion. At March 31, 2015, 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, 2015.

Employer Contributions

During the three months ended March 31, 2015, we contributed $0.3 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, 2015. There have been no material changes with respect to the qualified and nonqualified pension contributions in 2015 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, 2014.

9. 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, 2015	$	12,298		$	1,378		$	13,676
Net income		4,219			119			4,338
Other comprehensive loss		(195	)		–			(195	)
Comprehensive income		4,024			119			4,143
Contributed capital		(764	)		–			(764	)
Dividends declared		(2,244	)		–			(2,244	)
Common stock in treasury		(3,830	)		–			(3,830	)
Distributions and other		(145	)		(77	)		(222	)
Balance at March 31, 2015	$	9,339		$	1,420		$	10,759

Common Stock

Verizon did not repurchase any shares of Verizon common stock through its previously authorized share buyback program during the three months ended March 31, 2015.

However, in February 2015, the Verizon Board of Directors authorized Verizon to enter into an accelerated share repurchase (ASR) agreement to repurchase $5.0 billion of the Company’s common stock. The total number of shares that Verizon will repurchase under the ASR agreement will be based generally upon the volume-weighted average share price of Verizon’s

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common stock during the term of the transaction. On February 10, 2015, in exchange for an upfront payment totaling $5.0 billion, Verizon received an initial delivery of 86.2 million shares having a value of approximately $4.25 billion. Final settlement of the transaction under the ASR agreement, including delivery of the remaining shares, if any, that Verizon is entitled to receive, is scheduled to occur in the second quarter of 2015.

Common stock has been used from time to time to satisfy some of the funding requirements of employee and shareowner plans, including 9.8 million common shares issued from Treasury stock during the three months ended March 31, 2015, which had an aggregate value of $0.4 billion.

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, 2015	$	(346	)	$	(84	)	$	112	$	1,429		$	1,111
Other comprehensive income (loss)		(141	)		(59	)		3		–			(197	)
Amounts reclassified to net income		–			46			–		(44	)		2
Net other comprehensive income (loss)		(141	)		(13	)		3		(44	)		(195	)
Balance at March 31, 2015	$	(487	)	$	(97	)	$	115	$	1,385		$	916

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, 2015, the amounts reclassified to net income related to defined benefit pension and postretirement plans were included in Cost of services and sales and Selling, general and administrative expense on our condensed consolidated statement of income. For the three months ended March 31, 2015, all other amounts reclassified to net income were included in Other income and (expense), net on our condensed consolidated statement of income.

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10. 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 the historical results of divested operations 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.

On July 1, 2014, our Wireline segment sold a non-strategic business. Accordingly, the historical Wireline results for these operations have been reclassified to Corporate, eliminations and other to reflect comparable segment operating results.

The reconciliation of segment operating revenues and expenses to consolidated operating revenues and expenses below also includes those items of a non-operational nature. We exclude from segment results the effects of certain items that management does not consider in assessing segment performance, primarily because of their non-operational nature.

We have adjusted prior period consolidated and segment information, where applicable, to conform to current period presentation.

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 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)	2015			2014
External Operating Revenues
Wireless
Retail service	$	17,131		$	17,233
Other service		765			735
Service revenue		17,896			17,968
Equipment		3,373			1,869
Other		1,033			1,014
Total Wireless		22,302			20,851
Wireline
Consumer retail		3,992			3,840
Small business		600			624
Mass Markets		4,592			4,464
Strategic services		2,048			2,062
Core		1,215			1,404
Global Enterprise		3,263			3,466
Global Wholesale		1,266			1,336
Other		87			140
Total Wireline		9,208			9,406
Total segments		31,510			30,257
Corporate, eliminations and other		474			561
Total consolidated – reported	$	31,984		$	30,818
Intersegment Revenues
Wireless	$	26		$	28
Wireline		261			256
Total segments		287			284
Corporate, eliminations and other		(287	)		(284	)
Total consolidated – reported	$	–		$	–
Total Operating Revenues
Wireless	$	22,328		$	20,879
Wireline		9,469			9,662
Total segments		31,797			30,541
Reconciling items		187			277
Total consolidated – reported	$	31,984		$	30,818
Operating Income
Wireless	$	7,810		$	7,318
Wireline		405			141
Total segments		8,215			7,459
Reconciling items		(255	)		(299	)
Total consolidated – reported	$	7,960		$	7,160

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(dollars in millions)	At March 31, 2015			At December 31, 2014
Assets
Wireless	$	171,760		$	160,385
Wireline		78,624			76,673
Total segments		250,384			237,058
Corporate, eliminations and other		(14,594	)		(4,350	)
Total consolidated – reported	$	235,790		$	232,708

A reconciliation of the segment operating revenues to consolidated operating revenues is as follows:

	Three Months Ended March 31,
(dollars in millions)	2015		2014
Total segment operating revenues	$	31,797	$	30,541
Impact of divested operations		–		128
Corporate, eliminations and other		187		149
Total consolidated operating revenues	$	31,984	$	30,818

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)	2015			2014
Total segment operating income	$	8,215		$	7,459
Impact of divested operations		–			6
Corporate, eliminations and other		(255	)		(305	)
Total consolidated operating income		7,960			7,160
Equity in earnings (losses) of unconsolidated businesses		(34	)		1,902
Other income and (expense), net		75			(894	)
Interest expense		(1,332	)		(1,214	)
Income Before Provision For Income Taxes	$	6,669		$	6,954

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, 2015 and 2014.

11. 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.

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Reserves have been established to cover environmental matters relating to discontinued businesses and past telecommunications activities. These reserves include funds to address contamination at the site of a former Sylvania facility in Hicksville, NY, which had processed nuclear fuel rods in the 1950s and 1960s. In September 2005, the Army Corps of Engineers (ACE) accepted the site into its Formerly Utilized Sites Remedial Action Program. As a result, the ACE has taken primary responsibility for addressing the contamination at the site. An adjustment to the reserves may be made after a cost allocation is conducted with respect to the past and future expenses of all of the parties. Adjustments to the environmental reserve may also be made based upon the actual conditions found at other sites requiring remediation.

Verizon is currently involved in approximately 60 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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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 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 enhanced services, including broadband data and video, corporate networking solutions, data center and cloud services, security and managed network services and local and long distance voice 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 176,200 employees as of March 31, 2015.

As advances in technology have changed the ways that our customers interact in their personal and professional lives and that businesses operate, we have continued to focus our efforts around higher margin and growing areas of our business: wireless and 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. We believe that steady and consistent investments in networks and platforms will drive innovative products and services and fuel our growth. Our wireless and wireline networks will continue to be the hallmark of our brand, and provide the fundamental strength upon which we build our competitive advantage.

Strategic Transactions

Spectrum Auction

On January 29, 2015, the Federal Communications Commission (FCC) completed an auction of 65 MHz of spectrum, which it identified as the Advanced Wireless Services (AWS)-3 band. Verizon participated in that auction and was the high bidder on 181 spectrum licenses, for which we paid cash of approximately $10.4 billion. During the fourth quarter of 2014, we made a deposit of $0.9 billion related to our participation in this auction. During the first quarter of 2015, we submitted an application to the FCC and paid $9.5 billion to the FCC to complete payment for these licenses. On April 8, 2015, the FCC granted us these spectrum licenses.

Access Line Sale

On February 5, 2015, we announced that we have entered into a definitive agreement with Frontier Communications Corporation (Frontier) pursuant to which Verizon will sell its local exchange business and related landline activities in California, Florida and Texas, including FiOS Internet and Video customers, switched and special access lines and high-speed Internet service and long distance voice accounts in these three states for approximately $10.5 billion, subject to certain adjustments and including the assumption of $0.6 billion of indebtedness from Verizon by Frontier. The transaction, which includes the acquisition by Frontier of the equity interests of Verizon’s incumbent local exchange carriers (ILECs) in California, Florida and Texas, does not involve any assets or liabilities of Verizon Wireless. The assets and liabilities that will be sold are currently included in Verizon’s continuing operations and classified as assets held for sale and liabilities related to assets held for sale on our condensed consolidated balance sheet as of March 31, 2015. The transaction is subject to the satisfaction of certain closing conditions including, among others, receipt of state and federal telecommunications regulatory approvals, and we expect this transaction to close during the first half of 2016.

The transaction will result in Frontier acquiring approximately 2.1 million copper lines, 1.5 million FiOS Internet subscribers, 1.2 million FiOS Video subscribers and the related ILEC businesses from Verizon. See Note 2 to the condensed consolidated financial statements for additional information.

Tower Monetization Transaction

During March 2015, we completed a transaction with American Tower Corporation (American Tower) pursuant to which American Tower acquired the exclusive rights to lease and operate approximately 11,300 of our wireless towers for an upfront payment of $5.0 billion. Under the terms of the leases, American Tower has exclusive rights to lease and operate the towers over an average term of approximately 28 years. As part of this transaction, we sold 162 towers for $0.1 billion. We will sublease

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capacity on the towers from American Tower for a minimum of 10 years at current market rates, with options to renew. As the leases expire, American Tower has fixed-price purchase options to acquire these towers based on their anticipated fair market values at the end of the lease terms. We have accounted for the upfront payment as deferred rent and as a financing obligation.

Business Overview

Wireless

In our Wireless business, during the three months ended March 31, 2015 compared to the similar period in 2014, revenues grew 6.9%, driven by an 80.4% increase in equipment revenue primarily due to an increase in equipment sales under both Verizon Edge and the traditional subsidy model. The increased adoption of Verizon Edge resulted in a shift of revenue from service revenue to equipment revenue and a change in the timing of the recognition of revenue. At March 31, 2015, retail postpaid connections were 5.5% higher than at March 31, 2014, with smartphones representing 80% of our retail postpaid phone base at March 31, 2015 compared to 72% at March 31, 2014. As of March 31, 2015 and 2014, More Everything accounts represented approximately 65% and 50%, respectively, of our retail postpaid accounts. Nearly 86% of our total data traffic in March 2015 was carried on our 4G LTE network.

Wireline

In our Wireline business, revenues declined 2.0% during the three months ended March 31, 2015 compared to the similar period in 2014 primarily due to revenue declines in Global Enterprise resulting from lower voice services and data networking revenues, as well as the negative impact of foreign exchange rates. 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. The decrease in revenues in our Wireline segment was partially offset by revenue increases in Consumer retail driven by FiOS. During the three months ended March 31, 2015, FiOS represented approximately 78% of Consumer retail revenue compared to approximately 74% during the similar period in 2014.

Trends

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, 2015, these investments included acquisitions of wireless licenses of $9.6 billion and capital expenditures of $3.7 billion. See “Cash Flows Used in Investing Activities” and “Acquisitions and Divestitures” for additional information.

The increased adoption of Verizon Edge results in a shift of revenue from service revenue to equipment revenue and a change in the timing of the recognition of revenue and we expect this trend to continue.

Except to the extent described above, 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, 2014.

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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 Group Plc’s (Vodafone) indirect 45% interest in Verizon Wireless (Wireless Transaction). 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 from the closing of the Wireless Transaction through March 31, 2014.

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 as well as the historical results of divested operations, 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.

On July 1, 2014, our Wireline segment sold a non-strategic business. Accordingly, the historical Wireline results for these operations, which were not material to our condensed consolidated financial statements or our segment results of operations, have been reclassified to Corporate, eliminations and other to reflect comparable segment operating results. The results of operations related to this divestiture included within Corporate, eliminations and other are as follows:

	Three Months Ended March 31,
(dollars in millions)	2015		2014
Impact of Divested Operations
Operating revenues	$	–	$	128
Cost of services and sales		–		120
Selling, general and administrative expense		–		2

Consolidated Revenues

	Three Months Ended March 31,				Increase/
(dollars in millions)	2015		2014		(Decrease)
Wireless
Service revenue	$	17,914	$	17,987	$	(73	)	(0.4	)%
Equipment and other		4,414		2,892		1,522		52.6
Total		22,328		20,879		1,449		6.9
Wireline
Mass Markets		4,592		4,464		128		2.9
Global Enterprise		3,263		3,471		(208	)	(6.0	)
Global Wholesale		1,524		1,583		(59	)	(3.7	)
Other		90		144		(54	)	(37.5	)
Total		9,469		9,662		(193	)	(2.0	)
Corporate, eliminations and other		187		277		(90	)	(32.5	)
Consolidated Revenues	$	31,984	$	30,818	$	1,166		3.8

The increase in consolidated revenues during the three months ended March 31, 2015 compared to the similar period in 2014 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 revenues at our Wireline segment.

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Wireless’ revenues increased $1.4 billion, or 6.9%, during the three months ended March 31, 2015 compared to the similar period in 2014 as a result of growth in equipment revenue. Equipment revenue increased during the three months ended March 31, 2015 compared to the similar period in 2014 primarily due to an increase in equipment sales under both Verizon Edge and the traditional subsidy model. The percentage of phone activations on Verizon Edge increased to approximately 39% during the three months ended March 31, 2015 compared to approximately 13% during the similar period in 2014. The increased adoption of Verizon Edge resulted in a shift of revenue from service revenue to equipment revenue and a change in the timing of the recognition of revenue. Service revenue, which does not include recurring equipment installment billings related to Verizon Edge, decreased by $0.1 billion, or 0.4%, during the three months ended March 31, 2015 compared to the similar period in 2014 primarily driven by lower retail postpaid service revenue, which was negatively impacted by the shift of revenue from service revenue to equipment revenue as a result of more customers adopting Verizon Edge. During the three months ended March 31, 2015, retail postpaid connection net additions increased compared to the similar period in 2014 primarily due to an increase in retail postpaid connection gross additions as well as a decline in our retail postpaid connection churn rate. Retail postpaid connections per account increased as of March 31, 2015 compared to March 31, 2014 primarily due to the increased penetration of tablets.

Wireline’s revenues decreased $0.2 billion, or 2.0%, during the three months ended March 31, 2015 compared to the similar period in 2014 primarily as a result of declines in Global Enterprise, partially offset by higher Consumer retail revenues driven by FiOS services.

Mass Markets revenues increased $0.1 billion, or 2.9%, during the three months ended March 31, 2015 compared to the similar period in 2014 primarily due to the expansion of FiOS services (Voice, Internet and Video), including our FiOS Quantum offerings, 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 6.0%, during the three months ended March 31, 2015 compared to the similar period in 2014 primarily due to lower voice services and data networking revenues, the negative impact of foreign exchange rates and a decline in Core customer premise equipment revenues. Strategic services revenues also decreased primarily due to a decline in revenue from IP services.

Global Wholesale revenues decreased $0.1 billion, or 3.7%, during the three months ended March 31, 2015 compared to the similar period in 2014 primarily due to a decline in traditional voice and data revenues. Traditional voice revenues decreased primarily due to the effect of technology substitution. The decline in data revenues was driven by the continuing demand for high-speed digital data services from fiber-to-the-cell customers upgrading their core data circuits to Ethernet facilities. During the three months ended March 31, 2015, we also experienced a decline in domestic wholesale connections.

Consolidated Operating Expenses

	Three Months Ended March 31,				Increase/
(dollars in millions)	2015		2014		(Decrease)
Cost of services and sales	$	12,096	$	11,189	$	907		8.1	%
Selling, general and administrative expense		7,939		8,332		(393	)	(4.7	)
Depreciation and amortization expense		3,989		4,137		(148	)	(3.6	)
Consolidated Operating Expenses	$	24,024	$	23,658	$	366		1.5

Cost of Services and Sales

Cost of services and sales increased during the three months ended March 31, 2015 compared to the similar period in 2014 primarily due to an increase in cost of equipment sales of $1.0 billion at our Wireless segment as a result of an increase in the number of devices sold as well as an increase in the cost per unit.

Selling, General and Administrative Expense

Selling, general and administrative expense decreased during the three months ended March 31, 2015 compared to the similar period in 2014 primarily due to a $0.4 billion decline in sales commission expense at our Wireless segment, which was driven by increased adoption of Verizon Edge.

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Depreciation and Amortization Expense

Depreciation and amortization expense decreased during the three months ended March 31, 2015 compared to the similar period in 2014 primarily due to $0.1 billion of depreciation and amortization expense not being recorded on our depreciable Wireline assets in California, Florida and Texas which were classified as held for sale as of February 5, 2015, as well as declines in net depreciable assets at our Wireline segment, partially offset by an increase in net depreciable assets at our Wireless segment.

We expect to continue to benefit from depreciation and amortization expense not being recorded on our depreciable Wireline assets in California, Florida and Texas, which were classified as held for sale as of February 5, 2015, through the closing of the transaction with Frontier, which is expected to occur during the first half of 2016.

Consolidated Operating Income and EBITDA

Consolidated earnings before interest, taxes, depreciation and amortization expenses (Consolidated EBITDA) and Consolidated Adjusted EBITDA, which are presented below, are non-GAAP measures and do not purport to be alternatives to operating income as a measure of operating performance. Management believes that these measures are useful to investors and other users of our financial information in evaluating operating profitability on a more variable cost basis as they exclude 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 (losses) of unconsolidated businesses and other income and (expense), net to net income.

Consolidated Adjusted EBITDA is calculated by excluding the effect of non-operational items and the impact of divested operations from the calculation of Consolidated EBITDA. Management believes that this measure provides additional relevant and useful information to investors and other users of our financial data in evaluating the effectiveness of our operations and underlying business trends in a manner that is consistent with management’s evaluation of business performance. See “Other Items” for additional details regarding these non-operational items.

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. These remeasurements could result in significant charges or credits to one or more of our pension plans.

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)	2015		2014
Consolidated Operating Income	$	7,960	$	7,160
Add Depreciation and amortization expense		3,989		4,137
Consolidated EBITDA	$	11,949	$	11,297
Less Impact of divested operations		–		(6	)
Consolidated Adjusted EBITDA	$	11,949	$	11,291

The changes in the table above during the three months ended March 31, 2015 compared to the similar period in 2014 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 (Losses) of Unconsolidated Businesses

Equity in earnings (losses) of unconsolidated businesses decreased $1.9 billion during the three months ended March 31, 2015, compared to the similar period in 2014, primarily due to the gain of $1.9 billion recorded on the sale of our interest in Vodafone Omnitel N.V. (Vodafone Omnitel) during the first quarter of 2014 (Omnitel Transaction), which was part of the consideration for the Wireless Transaction completed on February 21, 2014.

Other Income and (Expense), Net

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

	Three Months Ended March 31,					Increase/
(dollars in millions)	2015		2014			(Decrease)
Interest income	$	43	$	22		$	21	95.5	%
Other, net		32		(916	)		948	nm
Total	$	75	$	(894	)	$	969	nm

nm – not meaningful

Other income and (expense), net changed favorably during the three months ended March 31, 2015 compared to the similar period in 2014 primarily driven by net early debt redemption costs of $0.9 billion recorded during the first quarter of 2014 (see “Other Items”).

Interest Expense

	Three Months Ended March 31,						Increase/
(dollars in millions)	2015			2014			(Decrease)
Total interest costs on debt balances	$	1,383		$	1,350		$	33		2.4	%
Less capitalized interest costs		51			136			(85	)	(62.5	)
Total	$	1,332		$	1,214		$	118		9.7
Average debt outstanding	$	115,494		$	103,164
Effective interest rate		4.8	%		5.2	%

Total interest costs on debt balances increased during the three months ended March 31, 2015 compared to the similar period in 2014 primarily due to higher average debt balances, partially offset by a lower effective interest rate (see “Consolidated Financial Condition”). Also contributing to the increase in interest expense were lower capitalized interest costs during the three months ended March 31, 2015 compared to the similar period in 2014 primarily due to a decrease in wireless licenses that are currently under development.

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Provision for Income Taxes

	Three Months Ended March 31,						Increase/
(dollars in millions)	2015			2014			(Decrease)
Provision for income taxes	$	2,331		$	968		$	1,363	nm
Effective income tax rate		35.0	%		13.9	%

nm – not meaningful

The effective income tax rate is calculated by dividing the provision for income taxes by income before the provision for income taxes. The increase in the effective income tax rate and the provision for income taxes during the three months ended March 31, 2015 compared to the similar period in 2014 was primarily due to additional income taxes on the incremental income in the current period from the Wireless Transaction completed on February 21, 2014, as well as the utilization of certain tax credits in connection with the Omnitel Transaction in 2014.

Unrecognized Tax Benefits

Unrecognized tax benefits were $1.5 billion at March 31, 2015 and $1.8 billion at December 31, 2014. Interest and penalties related to unrecognized tax benefits were $0.2 billion (after-tax) at March 31, 2015 and December 31, 2014. The decrease in unrecognized tax benefits was primarily due to an internal restructure that eliminated certain state unrecognized tax benefits.

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 IRS and multiple state and foreign jurisdictions for various open tax years. 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,				Increase/
(dollars in millions)	2015		2014		(Decrease)
Net income attributable to noncontrolling interests	$	119	$	2,039	$	(1,920)	(94.2	)%

The decrease in Net income attributable to noncontrolling interests during the three months ended March 31, 2015 compared to the similar period in 2014 was primarily due to the completion of the Wireless Transaction on February 21, 2014. 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 EBITDA margin is calculated by dividing Wireless EBITDA by total Wireless revenues. 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. You can find additional information about our segments in Note 10 to the condensed consolidated financial statements.

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Wireless

Our Wireless segment provides wireless communications services across one of the most extensive wireless networks in the United States and is doing business as Verizon Wireless. 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.

All financial results included in the tables below reflect the consolidated results of Verizon Wireless.

Operating Revenues and Selected Operating Statistics

	Three Months Ended March 31,						Increase/
(dollars in millions, except ARPA)	2015			2014			(Decrease)
Retail service	$	17,143		$	17,246		$	(103	)	(0.6	)%
Other service		771			741			30		4.0
Service revenue		17,914			17,987			(73	)	(0.4	)
Equipment		3,373			1,870			1,503		80.4
Other		1,041			1,022			19		1.9
Equipment and other		4,414			2,892			1,522		52.6
Total Operating Revenues	$	22,328		$	20,879		$	1,449		6.9
Connections (‘000):(1)
Retail connections		108,582			103,330			5,252		5.1
Retail postpaid connections		102,637			97,273			5,364		5.5
Net additions in period (‘000):(2)
Retail connections		377			549			(172	)	(31.3	)
Retail postpaid connections		565			539			26		4.8
Churn Rate:
Retail connections		1.33	%		1.37	%
Retail postpaid connections		1.03	%		1.07	%
Account Statistics:
Retail postpaid ARPA	$	156.14		$	159.67		$	(3.53	)	(2.2	)
Retail postpaid accounts (‘000)(1)		35,516			35,061			455		1.3
Retail postpaid connections per account(1)		2.89			2.77			0.12		4.3

⁽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, 2015 compared to the similar period in 2014 primarily as a result of growth in equipment revenue.

Accounts and Connections

Retail (non-wholesale) postpaid accounts primarily 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 include 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, LTE Internet (Installed) and other connected devices. Retail postpaid connection net additions increased during the three months ended March 31, 2015 compared to the similar period in 2014 primarily due to an increase in retail postpaid connection gross additions as well as a decline in our retail postpaid connection churn rate. Higher retail postpaid connection gross additions were driven by gross additions of tablets. During the three months ended March 31, 2015, our retail postpaid connection net additions included approximately 785 thousand tablets, as compared to 634 thousand tablets in the similar period in 2014.

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 4.3% as of March 31, 2015 compared to March 31, 2014, primarily due to the increased penetration of tablets.

Service Revenue

Service revenue, which does not include recurring equipment installment billings related to Verizon Edge, decreased by $0.1 billion, or 0.4%, during the three months ended March 31, 2015 compared to the similar period in 2014 primarily driven by lower retail postpaid service revenue, which was negatively impacted as a result of more customers adopting Verizon Edge. This decrease was partially offset by an increase in retail postpaid connections as well as the continued increase in penetration of tablets through our More Everything plans.

The decrease in retail postpaid ARPA (the average revenue per account from retail postpaid accounts), which does not include recurring equipment installment billings related to Verizon Edge, during the three months ended March 31, 2015 compared to the similar period in 2014 was negatively impacted as more customers adopted Verizon Edge, which resulted in a shift of revenue from service revenue to equipment revenue and a change in the timing of the recognition of revenue. Partially offsetting the impact of the increased adoption of Verizon Edge was an increase in both our retail postpaid connections per account and smartphone penetration during the three months ended March 31, 2015 compared to the similar period in 2014. As of March 31, 2015, we experienced a 4.3% increase in retail postpaid connections per account compared to March 31, 2014, with smartphones representing 80% of our retail postpaid phone base as of March 31, 2015 compared to 72% as of March 31, 2014. The increase in retail postpaid connections per account is primarily due to increases in Internet data devices, which represented 14.8% of our retail postpaid connection base as of March 31, 2015 compared to 11.3% as of March 31, 2014, primarily due to tablet activations.

Equipment and Other Revenue

Equipment and other revenue increased by $1.5 billion, or 52.6%, during the three months ended March 31, 2015 compared to the similar period in 2014 primarily due to an increase in equipment sales under both Verizon Edge and the traditional subsidy model. The percentage of phone activations on Verizon Edge increased to approximately 39% during the three months ended March 31, 2015 compared to approximately 13% during the similar period in 2014. The increased adoption of Verizon Edge results in a shift of revenue from service revenue to equipment revenue and a change in the timing of the recognition of revenue.

Operating Expenses

	Three Months Ended March 31,				Increase/
(dollars in millions)	2015		2014		(Decrease)
Cost of services and sales	$	6,959	$	5,856	$	1,103		18.8	%
Selling, general and administrative expense		5,369		5,644		(275	)	(4.9	)
Depreciation and amortization expense		2,190		2,061		129		6.3
Total Operating Expenses	$	14,518	$	13,561	$	957		7.1

Cost of Services and Sales

Cost of services and sales increased during the three months ended March 31, 2015 compared to the similar period in 2014 primarily due to an increase in cost of equipment sales of $1.0 billion as a result of an increase in the number of devices sold as well as an increase in the cost per unit.

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Selling, General and Administrative Expense

Selling, general and administrative expense decreased during the three months ended March 31, 2015 compared to the similar period in 2014 primarily due to a $0.4 billion decline in sales commission expense, which was driven by increased adoption of Verizon Edge.

Depreciation and Amortization Expense

Depreciation and amortization expense increased during the three months ended March 31, 2015 compared to the similar period in 2014 primarily driven by an increase in net depreciable assets.

Segment Operating Income and EBITDA

	Three Months Ended March 31,						Increase/
(dollars in millions)	2015			2014			(Decrease)
Segment Operating Income	$	7,810		$	7,318		$	492	6.7	%
Add Depreciation and amortization expense		2,190			2,061			129	6.3
Segment EBITDA	$	10,000		$	9,379		$	621	6.6
Segment operating income margin		35.0	%		35.0	%
Segment EBITDA margin		44.8	%		44.9	%
Segment EBITDA service margin		55.8	%		52.1	%

The changes in the table above during the three months ended March 31, 2015 compared to the similar period in 2014 were primarily a result of the factors described in connection with operating revenues and operating expenses.

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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 around the world.

Operating Revenues and Selected Operating Statistics

	Three Months Ended March 31,				Increase/
(dollars in millions)	2015		2014		(Decrease)
Consumer retail	$	3,992	$	3,840	$	152		4.0	%
Small business		600		624		(24	)	(3.8	)
Mass Markets		4,592		4,464		128		2.9
Strategic services		2,048		2,071		(23	)	(1.1	)
Core		1,215		1,400		(185	)	(13.2	)
Global Enterprise		3,263		3,471		(208	)	(6.0	)
Global Wholesale		1,524		1,583		(59	)	(3.7	)
Other		90		144		(54	)	(37.5	)
Total Operating Revenues	$	9,469	$	9,662	$	(193	)	(2.0	)
Connections (‘000):(1)
Total voice connections		19,475		20,733		(1,258	)	(6.1	)
Total Broadband connections		9,246		9,031		215		2.4
FiOS Internet subscribers		6,749		6,170		579		9.4
FiOS Video subscribers		5,739		5,319		420		7.9

⁽¹⁾  As of end of period

Wireline’s revenues decreased $0.2 billion, or 2.0%, during the three months ended March 31, 2015 compared to the similar period in 2014 primarily as a result of declines in Global Enterprise, partially offset by higher Consumer retail revenues driven by FiOS services.

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 $0.1 billion, or 2.9%, during the three months ended March 31, 2015 compared to the similar period in 2014 primarily due to the expansion of FiOS services (Voice, Internet and Video), including our FiOS Quantum offerings, as well as changes in our pricing strategies, partially offset by the continued decline of local exchange revenues. FiOS represented approximately 78% of Consumer retail revenue during the three months ended March 31, 2015 compared to approximately 74% during the similar period in 2014.

Since April 1, 2014, we grew our subscriber base by 0.6 million FiOS Internet subscribers and 0.4 million FiOS Video subscribers, while also improving penetration rates within our FiOS service areas. As of March 31, 2015, we achieved penetration rates of 41.5% and 36.0% for FiOS Internet and FiOS Video, respectively, compared to penetration rates of 39.7% and 35.0% for FiOS Internet and FiOS Video, respectively, as of March 31, 2014.

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The increase in Mass Markets revenues was partially offset by the decline of local exchange revenues primarily due to a 5.3% decline in Consumer retail voice connections resulting primarily from competition and technology substitution with wireless, competing VoIP (voice over IP) and cable telephony 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, reflecting competition and a shift to both IP and high-speed circuits, primarily in areas outside of our FiOS footprint.

Global Enterprise

Global Enterprise offers Strategic 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 6.0%, during the three months ended March 31, 2015 compared to the similar period in 2014 primarily due to a $0.1 billion, or 13.7%, decline related to lower voice services and data networking revenues, which consist of traditional circuit-based services such as frame relay, private line and legacy voice and data services as well as the negative impact of foreign exchange rates. Also contributing to the decrease was a decline in Core customer premise equipment revenues. The decrease in Strategic services revenues of 1.1% was primarily due to a decline in revenue from IP services, partially offset by growth in our application services, such as our contact center solutions and cloud and data center offerings.

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 3.7%, during the three months ended March 31, 2015 compared to the similar period in 2014 primarily due to a decline in traditional voice and data revenues. The traditional voice revenue declines are primarily due to the effect of technology substitution, which resulted in a decrease in minutes of use. During the three months ended March 31, 2015, we also experienced a 6.0% decline in domestic wholesale connections. Also contributing to the decline in voice revenues is the continuing contraction of market rates due to competition. Data revenue declines were driven by the 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 migrations, at March 31, 2015, the number of core data circuits experienced a 14.4% decline compared to March 31, 2014.

Operating Expenses

	Three Months Ended March 31,				Increase/
(dollars in millions)	2015		2014		(Decrease)
Cost of services and sales	$	5,287	$	5,339	$	(52	)	(1.0	)%
Selling, general and administrative expense		2,031		2,149		(118	)	(5.5	)
Depreciation and amortization expense		1,746		2,033		(287	)	(14.1	)
Total Operating Expenses	$	9,064	$	9,521	$	(457	)	(4.8	)

Cost of Services and Sales

During the three months ended March 31, 2015, Cost of services and sales decreased compared to the similar period in 2014 primarily due to a decline in access costs of $0.1 billion driven by declines in overall wholesale long distance volumes and a decrease in employee costs as a result of reduced headcount, as well as a decrease in costs related to customer premise equipment. Partially offsetting these decreases was an increase in content costs of $0.1 billion associated with continued FiOS subscriber growth and programming license fee increases.

Selling, General and Administrative Expense

Selling, general and administrative expense decreased during the three months ended March 31, 2015, compared to the similar period in 2014 primarily due to declines in employee costs as a result of reduced headcount.

Depreciation and Amortization Expense

Depreciation and amortization expense decreased during the three months ended March 31, 2015, compared to the similar period in 2014 primarily due to $0.1 billion of depreciation and amortization expense not being recorded on our assets in California, Florida and Texas, which were classified as held for sale as of February 5, 2015, as well as decreases in net depreciable assets.

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We expect to continue to benefit from depreciation and amortization expense not being recorded on our depreciable Wireline assets in California, Florida and Texas, which were classified as held for sale as of February 5, 2015, through the closing of the transaction with Frontier, which is expected to occur in the first half of 2016.

Segment Operating Income and EBITDA

	Three Months Ended March 31,						Increase/
(dollars in millions)	2015			2014			(Decrease)
Segment Operating Income	$	405		$	141		$	264	nm
Add Depreciation and amortization expense		1,746			2,033			(287)	(14.1	)%
Segment EBITDA	$	2,151		$	2,174		$	(23)	(1.1	)
Segment operating income margin		4.3	%		1.5	%
Segment EBITDA margin		22.7	%		22.5	%
nm – not meaningful

The changes in the table above during the three months ended March 31, 2015 compared to the similar period in 2014 were primarily a result of the factors described in connection with operating revenues and operating expenses.

Other Items

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 (losses) 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 notes pursuant to a tender offer: $0.7 billion of the then outstanding $1.5 billion aggregate principal amount of Verizon 6.10% Notes due 2018, $0.8 billion of the then outstanding $1.5 billion aggregate principal amount of Verizon 5.50% Notes due 2018, $0.6 billion of the then outstanding $1.3 billion aggregate principal amount of Verizon 8.75% Notes due 2018, $0.7 billion of the then outstanding $1.25 billion aggregate principal amount of Verizon 5.55% Notes due 2016, $0.4 billion of the then outstanding $0.75 billion aggregate principal amount of Verizon 5.50% Notes due 2017, $0.6 billion of the then outstanding $1.0 billion aggregate principal amount of Cellco Partnership and Verizon Wireless Capital LLC 8.50% Notes due 2018, $0.2 billion of the then outstanding $0.3 billion aggregate principal amount of Alltel Corporation 7.00% Debentures due 2016 and $0.3 billion of the then outstanding $0.6 billion aggregate principal amount of GTE Corporation 6.84% Debentures due 2018.

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. This amount represents only the interest expense incurred prior to the closing of the Wireless Transaction.

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Impact of Divested Operations

On July 1, 2014, we sold a non-strategic Wireline business, which provides communications solutions to a variety of government agencies.

The Consolidated Adjusted EBITDA non-GAAP measure presented in the Consolidated Operating Income and EBITDA discussion (See “Consolidated Results of Operations”) excludes the historical financial results of the divested operations described above.

Consolidated Financial Condition

	Three Months Ended March 31,
(dollars in millions)	2015			2014			Change
Cash Flows Provided By (Used In)
Operating activities	$	10,169		$	7,139		$	3,030
Investing activities		(13,176	)		(4,531	)		(8,645	)
Financing activities		(3,205	)		(53,229	)		50,024
Decrease In Cash and Cash Equivalents	$	(6,212	)	$	(50,621	)	$	44,409

We use the net cash generated from our operations to fund network expansion and modernization, service and repay external financing, pay dividends, invest in new businesses and, when appropriate, buy back shares of our outstanding common stock. 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. 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.

Our available external financing arrangements include an active commercial paper program, 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.

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, 2015 increased by $3.0 billion compared to the similar period in 2014 primarily due to $2.4 billion of cash proceeds received related to the Tower Monetization Transaction attributable to the portion of the towers for which the right-of-use has passed to the tower operator (see Note 2) as well as $1.3 billion of cash proceeds related to the sale of wireless equipment installment receivables. The increase in Cash flows provided by operating activities was partially offset by a $0.3 billion increase in interest payments.

Cash Flows Used In Investing Activities

Capital Expenditures

Capital expenditures continue to be a 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.

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Capital expenditures, including capitalized software, were as follows:

	Three Months Ended March 31,
(dollars in millions)	2015			2014
Wireless	$	2,419		$	2,554
Wireline		1,077			1,385
Other		169			211
	$	3,665		$	4,150
Total as a percentage of revenue		11.5	%		13.5	%

Capital expenditures decreased at Wireless during the three months ended March 31, 2015 compared to the similar period in 2014 primarily due to the timing of investments to increase the capacity of our 4G LTE network. Capital expenditures declined at Wireline as a result of decreased FiOS and legacy spending requirements.

Acquisitions

On January 29, 2015, the FCC completed an auction of 65 MHz of spectrum, which it identified as the AWS-3 band. Verizon participated in that auction and was the high bidder on 181 spectrum licenses, for which we paid cash of approximately $10.4 billion. During the fourth quarter of 2014, we made a deposit of $0.9 billion related to our participation in this auction. During January 2015, we entered into a term loan agreement with a major financial institution, pursuant to which we borrowed $6.5 billion for general corporate purposes, including the acquisition of spectrum licenses. During the first quarter of 2015, we paid $9.5 billion to the FCC to complete payment for these licenses. The proceeds from the Tower Monetization Transaction, which we received in March 2015, were used to prepay $5.0 billion of the term loan outstanding. See Note 2 to the condensed consolidated financial statements for additional information regarding the Tower Monetization Transaction and Note 4 to the condensed consolidated financial statements for additional information regarding the term loan agreement.

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

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, 2015 and 2014, net cash used in financing activities was $3.2 billion and $53.2 billion, respectively. The change in cash flows used in financing activities during the three months ended March 31, 2015 as compared to the similar period in 2014 was primarily driven by the use of $58.89 billion as part of the consideration for the Wireless Transaction, which was completed on February 21, 2014.

During the first quarter of 2015, our net cash used in financing activities of $3.2 billion was primarily driven by repayments of long-term borrowings and capital lease obligations of $5.6 billion, the payment of $5.0 billion related to our accelerated share repurchase agreement, as well as $2.2 billion paid in cash dividends. These uses of cash were partially offset by $6.5 billion of borrowings under a term loan agreement which was used for general corporate purposes, including the acquisition of spectrum licenses, as well as $2.7 billion of cash proceeds received related to the Tower Monetization Transaction attributable to the portion of the towers that we continue to occupy and use for network operations.

Proceeds from and Repayments of Long-Term Borrowings

At March 31, 2015, our total debt increased to $113.4 billion as compared to $113.3 billion at December 31, 2014. Since the substantial majority of our total debt portfolio consists of fixed rate indebtedness, changes in interest rates do not have a material effect on our interest payments. During the three months ended March 31, 2015 and 2014, our effective interest rate was 4.8% and 5.2%, respectively. See Note 4 to the condensed consolidated financial statements for additional details regarding our debt activity.

At March 31, 2015, approximately $8.7 billion, or 7.7%, of the aggregate principal amount of our total debt portfolio consisted of foreign denominated debt, primarily the Euro and British Pound Sterling. We have entered into cross currency swaps in order to fix our future interest and principal payments in U.S. dollars and mitigate the impact of foreign currency transaction gains or losses. See “Market Risk” for additional information.

See “Other Items” for additional information related to the early debt redemption costs incurred during the first quarter of 2014.

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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.

Other Credit Facilities

As of March 31, 2015, the unused borrowing capacity under our $8.0 billion credit facility was approximately $7.9 billion.

Other, net

The change in Other, net financing activities during the three months ended March 31, 2015 compared to the similar period in 2014 was primarily driven by $2.7 billion of cash proceeds received related to the Tower Monetization Transaction, which relates to the portion of the towers that we continue to occupy and use for network operations.

Dividends

As in prior periods, dividend payments were a significant use of capital resources. During the three months ended March 31, 2015, we paid $2.2 billion in cash dividends.

Common Stock

Verizon did not repurchase any shares of Verizon common stock through its previously authorized share buyback program during the three months ended March 31, 2015.

However, in February 2015, the Verizon Board of Directors authorized Verizon to enter into an accelerated share repurchase (ASR) agreement to repurchase $5.0 billion of the Company’s common stock. The total number of shares that Verizon will repurchase under the ASR agreement will be based generally upon the volume-weighted average share price of Verizon’s common stock during the term of the transaction. On February 10, 2015, in exchange for an upfront payment totaling $5.0 billion, Verizon received an initial delivery of 86.2 million shares having a value of approximately $4.25 billion. Final settlement of the transaction under the ASR agreement, including delivery of the remaining shares, if any, that Verizon is entitled to receive, is scheduled to occur in the second quarter of 2015.

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 agreements 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-. See Note 4 to the condensed consolidated financial statements for additional details related to our term loan credit agreement.

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

Decrease In Cash and Cash Equivalents

Our Cash and cash equivalents at March 31, 2015 totaled $4.4 billion, a $6.2 billion decrease compared to Cash and cash equivalents at December 31, 2014 primarily as a result of the factors discussed above.

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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)	2015		2014		Change
Net cash provided by operating activities	$	10,169	$	7,139	$	3,030
Less Capital expenditures (including capitalized software)		3,665		4,150		(485	)
Free cash flow	$	6,504	$	2,989	$	3,515

The change in Free cash flow during the three months ended March 31, 2015 compared to the similar period in 2014 was primarily due to $2.4 billion of cash proceeds received related to the Tower Monetization Transaction attributable to the portion of the towers for which the right-of-use has passed to the tower operator (see Note 2) as well as $1.3 billion of cash proceeds related to the sale of wireless equipment installment receivables and a $0.5 billion decrease in capital expenditures, partially offset by a $0.3 billion increase in interest payments. Subsequent to the completion of the Wireless Transaction on February 21, 2014, we have full access to all of the cash flows generated by our wireless business.

Market Risk

We are exposed to various types of market risk in the normal course of business, including the impact 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 posted collateral of approximately $0.8 billion and $0.6 billion related to derivative contracts under collateral exchange arrangements at March 31, 2015 and December 31, 2014, respectively. During the first quarter of 2015, we paid an immaterial amount of cash to enter into amendments to certain collateral exchange arrangements. These amendments suspend cash collateral posting for a specified period of time by both counterparties. While we may be exposed to credit losses due to the nonperformance of our counterparties, we consider the risk remote. As such, we do not expect that our results of operations or financial condition 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, 2015, approximately 85% 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 substantially all of 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 the London Interbank Offered Rate, 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, 2015 and December 31, 2014, respectively. At March 31, 2015 and December 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, 2015.

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Forward Interest Rate Swaps

In order to manage our exposure to future interest rate changes, we have entered into forward interest rate swaps. At March 31, 2015 and December 31, 2014, these swaps had a notional value of $2.0 billion. We designated these contracts as cash flow hedges. The fair value of these contracts was $0.3 billion and $0.2 billion at March 31, 2015 and December 31, 2014, respectively, which was included within Other liabilities on our condensed consolidated balance sheets.

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, 2015, our primary translation exposure was to the Euro and British Pound Sterling.

Cross Currency Swaps

We enter into cross currency swaps to exchange 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. These swaps are designated as cash flow hedges. 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 $1.4 billion at March 31, 2015 and $0.6 billion at December 31, 2014, which were primarily included within Other liabilities on our condensed consolidated balance sheets. At March 31, 2015 and December 31, 2014, the total notional amount of the cross currency swaps was $10.3 billion. During the three months ended March 31, 2015 and 2014, a pre-tax loss of $0.9 billion and an immaterial pre-tax gain, respectively, were recognized in Other comprehensive loss.

Acquisitions and Divestitures

Wireless

Spectrum License Transactions

On January 29, 2015, the FCC completed an auction of 65 MHz of spectrum, which it identified as the AWS-3 band. Verizon participated in that auction and was the high bidder on 181 spectrum licenses, for which we paid cash of approximately $10.4 billion. During the fourth quarter of 2014, we made a deposit of $0.9 billion related to our participation in this auction. During the first quarter of 2015, we submitted an application to the FCC and paid $9.5 billion to the FCC to complete payment for these licenses. On April 8, 2015, the FCC granted us these spectrum licenses.

From time to time, we enter into agreements to buy, sell or exchange spectrum licenses. We believe these spectrum license transactions have allowed us to continue to enhance the reliability of our network while also resulting in a more efficient use of spectrum. See Note 2 to the condensed consolidated financial statements for additional details regarding our spectrum license transactions.

Tower Monetization Transaction

During March 2015, we completed a transaction with American Tower pursuant to which American Tower acquired the exclusive right to lease, acquire or otherwise operate and manage many of our wireless towers for an upfront payment of $5.1 billion, which also included payment for the sale of 162 towers. See Note 2 to the condensed consolidated financial statements for additional information.

Wireline

Access Line Sale

On February 5, 2015, we announced that we have entered into a definitive agreement with Frontier pursuant to which Verizon will sell its local exchange business and related landline activities in California, Florida, and Texas, including FiOS Internet and Video customers, switched and special access lines and high-speed Internet service and long distance voice accounts in these three states for approximately $10.5 billion, subject to certain adjustments and including the assumption of $0.6 billion of

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indebtedness from Verizon by Frontier. The transaction, which includes the acquisition by Frontier of the equity interests of Verizon’s ILECs in California, Florida and Texas, does not involve any assets or liabilities of Verizon Wireless. The assets and liabilities that will be sold are currently included in Verizon’s continuing operations and classified as assets held for sale and liabilities related to assets held for sale on our condensed consolidated balance sheet as of March 31, 2015. The transaction is subject to the satisfaction of certain closing conditions including, among others, receipt of state and federal telecommunications regulatory approvals, and we expect this transaction to close during the first half of 2016.

The transaction will result in Frontier acquiring approximately 2.1 million copper lines, 1.5 million FiOS Internet subscribers, 1.2 million FiOS Video subscribers and the related ILEC businesses from Verizon. This business generated revenues of approximately $5.4 billion, excluding revenue with affiliates, for Verizon in 2014. The operating results of this business are included within our Wireline segment for all periods presented.

Other Factors That May Affect Future Results

Regulatory and Competitive Trends

Verizon offers many different broadband services. Traditionally, the FCC has recognized that broadband Internet access services are “information services” subject to a “light touch” regulatory approach rather than the traditional, utilities-style regulations that apply to traditional voice services. In its order imposing so-called “network neutrality” rules, the FCC reversed course in 2015 and declared that broadband Internet access services will now be treated as “telecommunications services” subject to common carriage regulation under Title II of the Communications Act of 1934. This decision creates uncertainty concerning the level of regulation that will apply to broadband services going forward. These regulations will limit the ways that broadband Internet access service providers can structure business arrangements and manage their networks and could spur additional restrictions, including rate regulation, that could adversely affect broadband investment and innovation. The FCC’s decision is being challenged in court, and the proper scope of such regulations is also being debated in Congress. Verizon remains committed to the open Internet which provides consumers with competitive choices and unblocked access to lawful websites and content when, where, and how they want, and our commitment to our customers can be found on our website at http://responsibility.verizon.com/broadband-commitment. Verizon opposes the shift to utilities style regulation, however, which we believe is unnecessary, unlawful and harmful to the broader Internet ecosystem and our customers.

Except to the extent described above, there have been no material changes to Regulatory and Competitive Trends as previously disclosed in Part I, Item 1. “Business” in our Annual Report on Form 10-K for the year ended December 31, 2014.

Environmental Matters

Reserves have been established to cover environmental matters relating to discontinued businesses and past telecommunications activities. These reserves include funds to address contamination at the site of a former Sylvania facility in Hicksville, NY, which had processed nuclear fuel rods in the 1950s and 1960s. In September 2005, the Army Corps of Engineers (ACE) accepted the site into its Formerly Utilized Sites Remedial Action Program. As a result, the ACE has taken primary responsibility for addressing the contamination at the site. An adjustment to the reserves may be made after a cost allocation is conducted with respect to the past and future expenses of all of the parties. Adjustments to the environmental reserve may also be made based upon the actual conditions found at other sites requiring remediation.

Recently Issued Accounting Standards

See Note 1 to the condensed consolidated financial statements for a discussion of recently issued accounting standard updates not yet adopted as of March 31, 2015.

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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:

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

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

• 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;

• our high level of indebtedness;

• 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;

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

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

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

• changes in accounting assumptions that regulatory agencies, including the SEC, may require or that result from changes in the accounting rules or their application, which could result in an impact on earnings; 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 that ensure that information relating to the registrant which is required to be disclosed in this report is recorded, processed, summarized and reported within required time periods using the criteria for effective internal control established in Internal Control–Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission in 2013. Based on this evaluation, our chief executive officer and chief financial officer have concluded that the registrant’s disclosure controls and procedures were effective as of March 31, 2015.

In the ordinary course of business, we routinely review our system of internal control over financial reporting and make changes to our systems and processes that are intended to ensure an effective internal control environment. We are continuing an initiative to implement new financial systems 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 review the design and documentation of our internal control system and to enhance our processes as needed 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 2015 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. In its June 18, 2013 decision, the District 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, which upheld the District Court’s decision on July 30, 2014. The Litigation Trust sought review of the decision by the United States Supreme Court. The Supreme Court denied that request for review by order issued on February 23, 2015. As a result, this matter is concluded.

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

Changes in the regulatory framework under which we operate could adversely affect our business prospects or results of operations.

Our domestic operations are subject to regulation by the FCC and other federal, state and local agencies, and our international operations are regulated by various foreign governments and international bodies. These regulatory regimes frequently restrict or impose conditions on our ability to operate in designated areas and to provide specified products or services. We are frequently required to maintain licenses for our operations and conduct our operations in accordance with prescribed standards. We are often involved in regulatory and other governmental proceedings related to the application of these requirements. It is impossible to predict with any certainty the outcome of pending federal and state regulatory proceedings relating to our operations, or the reviews by federal or state courts of regulatory rulings. Without relief, existing laws and regulations may inhibit our ability to

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expand our business and introduce new products and services. Similarly, we cannot guarantee that we will be successful in obtaining the licenses needed to carry out our business plan or in maintaining our existing licenses. For example, the FCC grants wireless licenses for terms generally lasting 10 years, subject to renewal. The loss of, or a material limitation on, certain of our licenses could have a material adverse effect on our business, results of operations and financial condition.

New laws or regulations or changes to the existing regulatory framework at the federal, state and local, or international level could restrict the ways in which we manage our wireline and wireless networks, impose additional costs, impair revenue opportunities, and potentially impede our ability to provide services in a manner that would be attractive to us and our customers. For example, in its order imposing so-called “network neutrality” regulations, the FCC recently reversed course on the longstanding “light touch” approach and “reclassified” broadband Internet access services as telecommunications services subject to utilities-style common carriage regulation. While the full scope and effect of this new regulatory approach is uncertain, these rules limit the ways that a broadband Internet access service provider can structure business arrangements and manage its network and open the door to additional restrictions, including rate regulation that could adversely affect broadband investment and innovation. These rules are being challenged in the courts and Congress, but the outcome and timing of those challenges remains uncertain. As another example, we hold certain wireless licenses that require us to comply with so-called “open access” FCC regulations, which generally require licensees of particular spectrum to allow customers to use devices and applications of their choice. Moreover, certain services could be subject to conflicting regulation by the FCC and/or various state and local authorities, which could significantly increase the cost of implementing and introducing new services. The further regulation of broadband, wireless and our other activities and any related court decisions could restrict our ability to compete in the marketplace and limit the return we can expect to achieve on past and future investments in our networks.

Except to the extent described above, 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, 2014.

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

Verizon did not repurchase any shares of Verizon common stock through its previously authorized share buyback program during the three months ended March 31, 2015.

However, in February 2015, the Verizon Board of Directors authorized Verizon to enter into an ASR agreement to repurchase $5.0 billion of the Company’s common stock. The total number of shares that Verizon will repurchase under the ASR agreement will be based generally upon the volume-weighted average share price of Verizon’s common stock during the term of the transaction. On February 10, 2015, in exchange for an upfront payment totaling $5.0 billion, Verizon received an initial delivery of 86.2 million shares having a value of approximately $4.25 billion. Final settlement of the transaction under the ASR agreement, including delivery of the remaining shares, if any, that Verizon is entitled to receive, is scheduled to occur in the second quarter of 2015.

The following table provides information about repurchases of Verizon’s common stock during the three months ended March 31, 2015 by Verizon or any “affiliated purchaser” of Verizon, as defined in Rule 10b-18(a)(3) under the Exchange Act:

Period	Total Number of Shares Purchased	Average Price Paid per Share	Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs	Approximate Dollar Value of Shares that May Yet Be Purchased Under the Plans or Programs
February 2015 ASR(1)	86,239,083	$                      49.28	86,239,083	$                           750,000,000

⁽¹⁾ The total number of shares purchased represents those shares delivered in advance of the final settlement of the ASR and may not represent the final number of shares to be delivered under the ASR. The total number of shares that Verizon will repurchase under the ASR agreement, and therefore the average price paid per share, will be based generally upon the volume-weighted average share price of Verizon’s common stock during the term of the transaction. Final settlement of the transaction under the ASR agreement, including delivery of the remaining shares, if any, that Verizon is entitled to receive, is scheduled to occur during or before June 2015.

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Item 6. Exhibits

Exhibit Number	Description
10a	Verizon Communications Inc. Long-Term Incentive Plan – Performance Stock Unit Agreement 2015-2017 Award Cycle.
10b	Verizon Communications Inc. Long-Term Incentive Plan – Restricted Stock Unit Agreement 2015-2017 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 28, 2015	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 2015-2017 Award Cycle.
10b	Verizon Communications Inc. Long-Term Incentive Plan – Restricted Stock Unit Agreement 2015-2017 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

2015–2017 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 29, 2015, 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 2015 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 2015 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, 2015, and ending at the close of business on December 31, 2017 (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 five largest industry companies that are not in the Dow, as determined by the Committee and as constituted at the close of business on March 6, 2015. 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 35	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 $XXB	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) incompetence or negligence in the discharge of, or inattention to or neglect of or failure to perform, the duties and responsibilities assigned to the Participant; fraud, misappropriation or embezzlement; or a material breach of the Verizon Code of Conduct (as in effect at the relevant time) or any of the

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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.

(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, 2018), the value of the vested PSUs (minus any withholding for taxes) shall be paid to the Participant (subject, however, to any deferral election 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, 2015, Voluntary Separation On or Before December 31, 2017, or Other Separation Not Described in Paragraph 7(b). If the Participant (i) Retires (as defined in paragraph 7(b)(4)) before July 1, 2015, (ii) voluntarily separates from employment on or before December 31, 2017 for any reason other than Retirement, or (iii) otherwise separates from employment on or before December 31, 2017 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, 2015, Involuntary Termination Without Cause On or Before December 31, 2017, Termination Due to Death or Disability On or Before December 31, 2017.

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

(i) Retires (as defined below) after June 30, 2015, 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, 2017. “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, 2017 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, 2018).

(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

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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 1095 Avenue of the Americas, New York, New York 10036 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 Units Damages Disputes 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, 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

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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. A Participant’s failure to refer a Plan Dispute to the EB Committee for resolution will in no way impair the Company’s right to compel arbitration or the enforceability of the waiver in paragraph 25(c)(ii).

(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. However, a Participant’s failure to initiate arbitration within one year will in no way impair the Company’s right, exercised at its discretion, to compel arbitration or the enforceability of the waiver in paragraph 25(c)(ii). 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.

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(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 and Units Damages Disputes (subject to the mandatory EB Committee procedure provided for in paragraph 25(b) above). 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;

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(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 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.

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):

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(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

2015–2017 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 29, 2015, 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 2015 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, 2015, and ending at the close of business on December 31, 2017.

(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) incompetence or negligence in the discharge of, or inattention to or neglect of or failure to perform, the duties and responsibilities assigned to the Participant; fraud, misappropriation or embezzlement; or a material breach of the Verizon Code of Conduct (as in effect at the relevant time) 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, 2018), the number of shares of the vested RSUs (minus any withholding for taxes) shall be paid to the Participant (subject, however, to any deferral election 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:

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(a) Retirement Before July 1, 2015, Voluntary Separation On or Before December 31, 2017, or Other Separation Not Described in Paragraph 7(b). If the Participant (i) Retires (as defined in paragraph 7(b)(4)) before July 1, 2015, (ii) voluntarily separates from employment on or before December 31, 2017 for any reason other than Retirement, or (iii) otherwise separates from employment on or before December 31, 2017 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, 2015, Involuntary Termination Without Cause On or Before December 31, 2017, Termination Due to Death or Disability On or Before December 31, 2017.

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

(i) Retires (as defined below) after June 30, 2015, 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, 2017. “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, 2017 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, 2018).

(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

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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 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.

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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 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.

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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.

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 1095 Avenue of the Americas, New York, New York 10036 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 Units Damages Disputes 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.

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(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, 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. A Participant’s failure to refer a Plan Dispute to the EB Committee for resolution will in no way impair the Company’s right to compel arbitration or the enforceability of the waiver in paragraph 25(c)(ii).

(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. However, a Participant’s failure to initiate arbitration within one year will in no way impair the Company’s right, exercised at its discretion, to compel arbitration or the enforceability of the waiver in paragraph 25(c)(ii). 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.

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(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 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 and Units Damages Disputes (subject to the mandatory EB Committee procedure provided for in paragraph 25(b) above). 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 –

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(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;

(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.

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):

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(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

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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.

14

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 (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, 2015
Earnings:
Income before provision for income taxes	$	6,669
Equity in losses of unconsolidated businesses		34
Dividends from unconsolidated businesses		10
Interest expense (1)		1,332
Portion of rent expense representing interest		250
Amortization of capitalized interest		47
Earnings, as adjusted	$	8,342
Fixed Charges:
Interest expense (1)	$	1,332
Portion of rent expense representing interest		250
Capitalized interest		51
Fixed charges	$	1,633
Ratio of earnings to fixed charges		5.11

⁽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 28, 2015	/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 28, 2015	/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, 2015 (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 28, 2015	/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, 2015 (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 28, 2015	/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

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, 2015
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Fair value of assets measured on a recurring basis	$ 1,823
Fair value of liabilities measured on a recurring basis	1,756
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	298
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	249
Other Current 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	250
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	915
Other Assets | Interest Rate Swaps and Other
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Fair value of assets measured on a recurring basis	111
Other Current Liabilities | Cross Currency Swap and Other
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Fair value of liabilities measured on a recurring basis	137
Other Liabilities | Forward Interest Rate Swaps
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Fair value of liabilities measured on a recurring basis	301
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	1,318
Level 1
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Fair value of assets measured on a recurring basis	554	[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	298	[1]
Level 1 | 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	6	[1]
Level 1 | Other Current 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	250	[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	1,269	[2]
Fair value of liabilities measured on a recurring basis	1,756	[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	243	[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	915	[2]
Level 2 | Other Assets | Interest Rate Swaps and Other
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Fair value of assets measured on a recurring basis	111	[2]
Level 2 | Other Current Liabilities | Cross Currency Swap and Other
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Fair value of liabilities measured on a recurring basis	137	[2]
Level 2 | Other Liabilities | Forward Interest Rate Swaps
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Fair value of liabilities measured on a recurring basis	301	[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	$ 1,318	[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

Commitments and Contingencies - Additional Information (Detail)	3 Months Ended
	Mar. 31, 2015 LegalMatter
Loss Contingencies [Line Items]
Approximate number of federal district court actions alleged for patent infringement	60
Guarantee obligations, year term (in years)	30 years

XML

Changes in Balances of Accumulated Other Comprehensive Income by Component (Detail) (USD $) In Millions, unless otherwise specified	3 Months Ended
	Mar. 31, 2015	Mar. 31, 2014
Equity And Accumulated Other Comprehensive Income [Line Items]
Balance at January 1, 2015	$ 1,111
Other comprehensive income (loss)	(197)
Amounts reclassified to net income	2
Net other comprehensive income (loss)attributable to Verizon	(195)	(1,068)
Balance at March 31, 2015	916
Foreign currency translation adjustments
Equity And Accumulated Other Comprehensive Income [Line Items]
Balance at January 1, 2015	(346)
Other comprehensive income (loss)	(141)
Net other comprehensive income (loss)attributable to Verizon	(141)
Balance at March 31, 2015	(487)
Unrealized gain on cash flow hedges
Equity And Accumulated Other Comprehensive Income [Line Items]
Balance at January 1, 2015	(84)
Other comprehensive income (loss)	(59)
Amounts reclassified to net income	46
Net other comprehensive income (loss)attributable to Verizon	(13)
Balance at March 31, 2015	(97)
Unrealized gain on marketable securities
Equity And Accumulated Other Comprehensive Income [Line Items]
Balance at January 1, 2015	112
Other comprehensive income (loss)	3
Net other comprehensive income (loss)attributable to Verizon	3
Balance at March 31, 2015	115
Defined benefit pension and postretirement plans
Equity And Accumulated Other Comprehensive Income [Line Items]
Balance at January 1, 2015	1,429
Amounts reclassified to net income	(44)
Net other comprehensive income (loss)attributable to Verizon	(44)
Balance at March 31, 2015	$ 1,385

XML

Changes in Components of Total equity (Detail) (USD $) In Millions, unless otherwise specified	3 Months Ended
	Mar. 31, 2015	Mar. 31, 2014
Equity Note [Line Items]
Balance at January 1, 2015	$ 13,676
Net Income	4,338	5,986
Other comprehensive loss	(195)
Total Comprehensive Income	4,143	4,895
Contributed capital	(764)
Dividends declared	(2,244)
Common stock in treasury	(3,830)
Distributions and other	(222)
Balance at March 31, 2015	10,759
Verizon
Equity Note [Line Items]
Balance at January 1, 2015	12,298
Net Income	4,219
Other comprehensive loss	(195)
Total Comprehensive Income	4,024
Contributed capital	(764)
Dividends declared	(2,244)
Common stock in treasury	(3,830)
Distributions and other	(145)
Balance at March 31, 2015	9,339
Noncontrolling Interests
Equity Note [Line Items]
Balance at January 1, 2015	1,378
Net Income	119
Total Comprehensive Income	119
Distributions and other	(77)
Balance at March 31, 2015	$ 1,420

XML

Amortization Expense for Other Intangible Assets (Detail) (USD $) In Millions, unless otherwise specified	3 Months Ended
	Mar. 31, 2015	Mar. 31, 2014
Finite-Lived Intangible Assets [Line Items]
Amortization expense for other intangible assets	$ 381	$ 394

XML

Segment Information (Tables)

3 Months Ended

Mar. 31, 2015

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)	2015			2014
External Operating Revenues
Wireless
Retail service	$	17,131		$	17,233
Other service		765			735
Service revenue		17,896			17,968
Equipment		3,373			1,869
Other		1,033			1,014
Total Wireless		22,302			20,851
Wireline
Consumer retail		3,992			3,840
Small business		600			624
Mass Markets		4,592			4,464
Strategic services		2,048			2,062
Core		1,215			1,404
Global Enterprise		3,263			3,466
Global Wholesale		1,266			1,336
Other		87			140
Total Wireline		9,208			9,406
Total segments		31,510			30,257
Corporate, eliminations and other		474			561
Total consolidated – reported	$	31,984		$	30,818
Intersegment Revenues
Wireless	$	26		$	28
Wireline		261			256
Total segments		287			284
Corporate, eliminations and other		(287	)		(284	)
Total consolidated – reported	$	–		$	–
Total Operating Revenues
Wireless	$	22,328		$	20,879
Wireline		9,469			9,662
Total segments		31,797			30,541
Reconciling items		187			277
Total consolidated – reported	$	31,984		$	30,818
Operating Income
Wireless	$	7,810		$	7,318
Wireline		405			141
Total segments		8,215			7,459
Reconciling items		(255	)		(299	)
Total consolidated – reported	$	7,960		$	7,160

Summary of Reconciliation of Segment Assets

(dollars in millions)	At March 31, 2015			At December 31, 2014
Assets
Wireless	$	171,760		$	160,385
Wireline		78,624			76,673
Total segments		250,384			237,058
Corporate, eliminations and other		(14,594	)		(4,350	)
Total consolidated – reported	$	235,790		$	232,708

Reconciliation of Segment Operating Revenues to Consolidated Operating Revenues

A reconciliation of the segment operating revenues to consolidated operating revenues is as follows:

	Three Months Ended March 31,
(dollars in millions)	2015		2014
Total segment operating revenues	$	31,797	$	30,541
Impact of divested operations		–		128
Corporate, eliminations and other		187		149
Total consolidated operating revenues	$	31,984	$	30,818

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)	2015			2014
Total segment operating income	$	8,215		$	7,459
Impact of divested operations		–			6
Corporate, eliminations and other		(255	)		(305	)
Total consolidated operating income		7,960			7,160
Equity in earnings (losses) of unconsolidated businesses		(34	)		1,902
Other income and (expense), net		75			(894	)
Interest expense		(1,332	)		(1,214	)
Income Before Provision For Income Taxes	$	6,669		$	6,954

XML

Operating Financial Information for Reportable Segments (Detail) (USD $) In Millions, unless otherwise specified	3 Months Ended
	Mar. 31, 2015	Mar. 31, 2014
Segment Reporting Information [Line Items]
Operating Revenues	$ 31,984	$ 30,818
Operating income	7,960	7,160
Wireless
Segment Reporting Information [Line Items]
Operating Revenues	22,328	20,879
Operating income	7,810	7,318
Wireline
Segment Reporting Information [Line Items]
Operating Revenues	9,469	9,662
Operating income	405	141
Operating Segments
Segment Reporting Information [Line Items]
Operating Revenues	31,797	30,541
Operating income	8,215	7,459
Operating Segments | Wireless
Segment Reporting Information [Line Items]
Operating Revenues	22,302	20,851
Operating Segments | Wireless | Service Revenue Retail Service
Segment Reporting Information [Line Items]
Operating Revenues	17,131	17,233
Operating Segments | Wireless | Service Revenue Other Service
Segment Reporting Information [Line Items]
Operating Revenues	765	735
Operating Segments | Wireless | Service Revenue
Segment Reporting Information [Line Items]
Operating Revenues	17,896	17,968
Operating Segments | Wireless | Equipment
Segment Reporting Information [Line Items]
Operating Revenues	3,373	1,869
Operating Segments | Wireless | Other
Segment Reporting Information [Line Items]
Operating Revenues	1,033	1,014
Operating Segments | Wireline
Segment Reporting Information [Line Items]
Operating Revenues	9,208	9,406
Operating Segments | Wireline | Other
Segment Reporting Information [Line Items]
Operating Revenues	87	140
Operating Segments | Wireline | Mass Markets Consumer Retail
Segment Reporting Information [Line Items]
Operating Revenues	3,992	3,840
Operating Segments | Wireline | Mass Markets Small Business
Segment Reporting Information [Line Items]
Operating Revenues	600	624
Operating Segments | Wireline | Mass Markets
Segment Reporting Information [Line Items]
Operating Revenues	4,592	4,464
Operating Segments | Wireline | Global Enterprise Strategic Services
Segment Reporting Information [Line Items]
Operating Revenues	2,048	2,062
Operating Segments | Wireline | Global Enterprise Core
Segment Reporting Information [Line Items]
Operating Revenues	1,215	1,404
Operating Segments | Wireline | Global Enterprise
Segment Reporting Information [Line Items]
Operating Revenues	3,263	3,466
Operating Segments | Wireline | Global Wholesale
Segment Reporting Information [Line Items]
Operating Revenues	1,266	1,336
Operating Segments | Total Segments
Segment Reporting Information [Line Items]
Operating Revenues	31,510	30,257
Operating Segments | Corporate, Eliminations and Other
Segment Reporting Information [Line Items]
Operating Revenues	474	561
Intersegment Revenues | Wireless
Segment Reporting Information [Line Items]
Operating Revenues	26	28
Intersegment Revenues | Wireline
Segment Reporting Information [Line Items]
Operating Revenues	261	256
Intersegment Revenues | Total Segments
Segment Reporting Information [Line Items]
Operating Revenues	287	284
Intersegment Revenues | Corporate, Eliminations and Other
Segment Reporting Information [Line Items]
Operating Revenues	(287)	(284)
Segment Reconciling Items
Segment Reporting Information [Line Items]
Operating Revenues	187	277
Operating income	$ (255)	$ (299)

XML

Stock Based Compensation - Additional Information (Detail) (USD $) In Billions, except Share data in Millions, unless otherwise specified	3 Months Ended
	Mar. 31, 2015
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	$ 48.29

XML

Schedule of Notes Included in Exchange Offer (Detail) (USD $) In Millions, unless otherwise specified	0 Months Ended
	Mar. 31, 2015	Mar. 31, 2015
Old Notes in Exchange for 2055 New Notes | Verizon Communications | 6.55% Notes due 2043
Debt Instrument [Line Items]
Stated interest rate on debt instrument	6.55%	6.55%
Debt instrument maturity date	2043
Principal amount outstanding	$ 10,670	$ 10,670
Exchange Offer, Principal Amount Accepted For Exchange	4,084	4,084
Old Notes in Exchange for 2036 New Notes | Verizon Communications | 5.15%t Notes Due 2023
Debt Instrument [Line Items]
Stated interest rate on debt instrument	5.15%	5.15%
Debt instrument maturity date	2023
Principal amount outstanding	11,000	11,000
Exchange Offer, Principal Amount Accepted For Exchange	2,483	2,483
Old Notes in Exchange for 2048 New Notes
Debt Instrument [Line Items]
Exchange Offer, Principal Amount Accepted For Exchange	3,816	3,816
Old Notes in Exchange for 2048 New Notes | Verizon Communications | 6.90% Notes due 2038
Debt Instrument [Line Items]
Stated interest rate on debt instrument	6.90%	6.90%
Debt instrument maturity date	2038
Principal amount outstanding	1,250	1,250
Exchange Offer, Principal Amount Accepted For Exchange	773	773
Old Notes in Exchange for 2048 New Notes | Verizon Communications | 6.40% Notes due 2038
Debt Instrument [Line Items]
Stated interest rate on debt instrument	6.40%	6.40%
Debt instrument maturity date	2038
Principal amount outstanding	1,750	1,750
Exchange Offer, Principal Amount Accepted For Exchange	884	884
Old Notes in Exchange for 2048 New Notes | Verizon Communications | 6.40% Notes due 2033
Debt Instrument [Line Items]
Stated interest rate on debt instrument	6.40%	6.40%
Debt instrument maturity date	2033
Principal amount outstanding	4,355	4,355
Exchange Offer, Principal Amount Accepted For Exchange	2,159	2,159
Old Notes in Exchange for 2048 New Notes | Verizon Communications | 6.25% Notes due 2037
Debt Instrument [Line Items]
Stated interest rate on debt instrument	6.25%	6.25%
Debt instrument maturity date	2037
Principal amount outstanding	750	750
Old Notes in Exchange for 2048 New Notes | GTE Corporation | 6.94% Notes due 2028
Debt Instrument [Line Items]
Stated interest rate on debt instrument	6.94%	6.94%
Debt instrument maturity date	2028
Principal amount outstanding	$ 800	$ 800

XML

Summary of Reconciliation of Segment Operating Revenues (Detail) (USD $) In Millions, unless otherwise specified	3 Months Ended
	Mar. 31, 2015	Mar. 31, 2014
Segment Reporting, Revenue Reconciling Item [Line Items]
Operating Revenues	$ 31,984	$ 30,818
Operating Segments
Segment Reporting, Revenue Reconciling Item [Line Items]
Operating Revenues	31,797	30,541
Revenue Generated By Assets Sold
Segment Reporting, Revenue Reconciling Item [Line Items]
Operating Revenues		128
Corporate, Eliminations and Other
Segment Reporting, Revenue Reconciling Item [Line Items]
Operating Revenues	$ 187	$ 149

XML

Equity and Accumulated Other Comprehensive Income - Additional Information (Detail) (USD $) Share data in Millions, unless otherwise specified	3 Months Ended	0 Months Ended
	Mar. 31, 2015	Feb. 10, 2015
Equity and Comprehensive Income [Line Items]
Payment for repurchase of common stock	$ 5,000,000,000
Common shares issued from Treasury stock	9.8
Treasury stock aggregate value	400,000,000
February 2015 Accelerated Stock Repurchase
Equity and Comprehensive Income [Line Items]
Accelerated Share Repurchase		5,000,000,000
Payment for repurchase of common stock		4,250,000,000
Number of shares repurchased		86.2
Expected Total Payment related to February 2015 Accelerated Stock Repurchase
Equity and Comprehensive Income [Line Items]
Payment for repurchase of common stock		$ 5,000,000,000

XML

Wireless Licenses, Goodwill and Other Intangible Assets

3 Months Ended

Mar. 31, 2015

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, 2015	$	75,341
Acquisitions (Note 2)		42
Capitalized interest on wireless licenses		4
Reclassifications, adjustments and other		306
Balance at March 31, 2015	$	75,693

Reclassifications, adjustments and other includes the exchanges of wireless licenses in 2015 (see Note 2 for additional details).

At March 31, 2015, approximately $0.4 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, 2015	$	18,390	$	6,249		$	24,639
Reclassifications, adjustments and other		–		(1,336	)		(1,336	)
Balance at March 31, 2015	$	18,390	$	4,913		$	23,303

The decrease in Goodwill at March 31, 2015 was primarily due to the reclassification of $1.3 billion of Goodwill to Non-current assets held for sale on our condensed consolidated balance sheet at March 31, 2015 as a result of our agreement to sell our local exchange business and related landline activities in California, Florida, and Texas to Frontier (see Note 2 for additional details). The amount of Goodwill reclassified was based on the relative fair value of the transaction to the Wireline reporting unit.

Other Intangible Assets

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

	At March 31, 2015							At December 31, 2014
(dollars in millions)	Gross Amount		Accumulated Amortization			Net Amount		Gross Amount		Accumulated Amortization			Net Amount
Customer lists (5 to 13 years)	$	3,617	$	(2,980	)	$	637	$	3,618	$	(2,924	)	$	694
Non-network internal-use software (3 to 7 years)		13,544		(8,756	)		4,788		13,194		(8,462	)		4,732
Other (5 to 25 years)		725		(371	)		354		670		(368	)		302
Total	$	17,886	$	(12,107	)	$	5,779	$	17,482	$	(11,754	)	$	5,728

The amortization expense for Other intangible assets was as follows:

(dollars in millions)	Three Months Ended March 31,
2015		$         381
2014		394

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

Years	(dollars in millions)
Remainder of 2015		$    1,128
2016		1,277
2017		1,078
2018		903
2019		673

XML

Restricted and Performance Stock Unit Activity (Detail) In Thousands, unless otherwise specified	3 Months Ended
	Mar. 31, 2015
Restricted Stock Units
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Beginning Balance	15,007
Granted	4,235
Payments	(5,839)
Cancelled/Forfeited	(48)
Ending Balance	13,355
Performance Stock Units
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Beginning Balance	19,966
Granted	6,220
Payments	(6,721)
Cancelled/Forfeited	(176)
Ending Balance	19,289

XML

Changes in Carrying Amount of Wireless Licenses (Detail) (USD $) In Millions, unless otherwise specified	3 Months Ended
	Mar. 31, 2015	Dec. 31, 2014
Indefinite-lived Intangible Assets [Line Items]
Beginning balance		$ 75,341
Ending balance	75,693	75,341
Wireless Licenses
Indefinite-lived Intangible Assets [Line Items]
Beginning balance	75,341
Acquisitions (Note 2)	42
Capitalized interest on wireless licenses	4
Reclassifications, adjustments and other	306
Ending balance	$ 75,693

XML

Major Classes of Assets and Liabilities of Local Exchange and Related Landline Activities in California, Florida and Texas (Detail) (USD $) In Millions, unless otherwise specified	Mar. 31, 2015	Dec. 31, 2014
Assets held for sale:
Total current assets held for sale	$ 893	$ 552
Goodwill (Note 3)	1,328
Total non-current assets held for sale	9,580
Liabilities related to assets held for sale:
Total current liabilities related to assets held for sale	572
Long-term debt	594
Total non-current liabilities related to assets held for sale	943
Acquisitions
Assets held for sale:
Accounts receivable	496
Prepaid expense and other	60
Total current assets held for sale	556
Plant, property and equipment, net	8,198
Goodwill (Note 3)	1,328
Other assets	54
Total non-current assets held for sale	9,580
Total assets held for sale	10,136
Liabilities related to assets held for sale:
Accounts payable and accrued liabilities	277
Other current liabilities	295
Total current liabilities related to assets held for sale	572
Long-term debt	594
Employee benefit obligations	215
Other liabilities	134
Total non-current liabilities related to assets held for sale	943
Total liabilities related to assets held for sale	$ 1,515

XML

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, 2015	Mar. 31, 2014
Pension
Defined Benefit Plan Disclosure [Line Items]
Service cost	$ 94	$ 81
Amortization of prior service credit	1	(2)
Expected return on plan assets	(317)	(295)
Interest cost	243	259
Total	21	43
Health Care And Life
Defined Benefit Plan Disclosure [Line Items]
Service cost	81	65
Amortization of prior service credit	(72)	(63)
Expected return on plan assets	(25)	(41)
Interest cost	279	277
Total	$ 263	$ 238

XML

Wireless Licenses, Goodwill and Other Intangible Assets - Additional Information (Detail) (USD $)	Mar. 31, 2015
Indefinite-lived Intangible Assets [Line Items]
Goodwill Held for Sale	$ 1,328,000,000
Wireless Licenses
Indefinite-lived Intangible Assets [Line Items]
Wireless licenses under development	$ 400,000,000

XML

Changes in Carrying Amount of Goodwill (Detail) (USD $) In Millions, unless otherwise specified	3 Months Ended
	Mar. 31, 2015	Dec. 31, 2014
Goodwill [Line Items]
Beginning balance	$ 24,639
Reclassifications, adjustments and other	(1,336)
Ending balance	23,303
Wireless
Goodwill [Line Items]
Beginning balance		18,390
Ending balance	18,390	18,390
Wireline
Goodwill [Line Items]
Beginning balance	6,249
Reclassifications, adjustments and other	(1,336)
Ending balance	$ 4,913

XML

Acquisitions and Divestitures

3 Months Ended

Mar. 31, 2015

Acquisitions and Divestitures

2. Acquisitions and Divestitures

Wireless

Spectrum License Transactions

On January 29, 2015, the Federal Communications Commission (FCC) completed an auction of 65 MHz of spectrum, which it identified as the Advanced Wireless Services (AWS)-3 band. Verizon participated in that auction and was the high bidder on 181 spectrum licenses, for which we paid cash of approximately $10.4 billion. During the fourth quarter of 2014, we made a deposit of $0.9 billion related to our participation in this auction. During the first quarter of 2015, we submitted an application to the FCC and paid $9.5 billion to the FCC to complete payment for these licenses. The deposits related to these spectrum licenses are classified within Deposit for wireless licenses on our condensed consolidated balance sheets at March 31, 2015 and December 31, 2014, respectively. The cash payment of $9.5 billion is classified within Acquisitions of wireless licenses on our condensed consolidated statement of cash flows for the three months ended March 31, 2015. On April 8, 2015, the FCC granted us these spectrum licenses.

During the first quarter of 2015, we completed a license exchange transaction with affiliates of AT&T Inc. to exchange certain AWS and PCS spectrum licenses and as a result we recorded an immaterial gain.

During the three months ended March 31, 2015, we acquired various other wireless licenses for cash consideration that was not significant.

Tower Monetization Transaction

During March 2015, we completed a transaction with American Tower Corporation (American Tower) pursuant to which American Tower acquired the exclusive rights to lease and operate approximately 11,300 of our wireless towers for an upfront payment of $5.0 billion. Under the terms of the leases, American Tower has exclusive rights to lease and operate the towers over an average term of approximately 28 years. As part of this transaction, we also sold 162 towers for $0.1 billion. We will sublease capacity on the towers from American Tower for a minimum of 10 years at current market rates, with options to renew. As the leases expire, American Tower has fixed-price purchase options to acquire these towers based on their anticipated fair market values at the end of the lease terms. The upfront payment, including the towers sold, which is primarily included within Other liabilities on our condensed consolidated balance sheet, is accounted for as deferred rent and as a financing obligation. The $2.4 billion accounted for as deferred rent, which is presented within Other, net cash flows from operating activities, relates to the portion of the towers for which the right-of-use has passed to the tower operator. The $2.7 billion accounted for as a financing obligation, which is presented within Other, net cash flows from financing activities, relates to the portion of the towers that we continue to occupy and use for network operations.

Wireline

Access Line Sale

On February 5, 2015, we announced that we have entered into a definitive agreement with Frontier Communications Corporation (Frontier) pursuant to which Verizon will sell its local exchange business and related landline activities in California, Florida, and Texas, including FiOS Internet and Video customers, switched and special access lines and high-speed Internet service and long distance voice accounts in these three states for approximately $10.5 billion, subject to certain adjustments and including the assumption of $0.6 billion of indebtedness from Verizon by Frontier. The transaction, which includes the acquisition by Frontier of the equity interests of Verizon’s incumbent local exchange carriers (ILECs) in California, Florida and Texas, does not involve any assets or liabilities of Verizon Wireless. The assets and liabilities that will be sold are currently included in Verizon’s continuing operations and classified as assets held for sale and liabilities related to assets held for sale on our condensed consolidated balance sheet as of March 31, 2015. The transaction is subject to the satisfaction of certain closing conditions including, among others, receipt of state and federal telecommunications regulatory approvals, and we expect this transaction to close during the first half of 2016.

The transaction will result in Frontier acquiring approximately 2.1 million copper lines, 1.5 million FiOS Internet subscribers, 1.2 million FiOS Video subscribers and the related ILEC businesses from Verizon. This business generated revenues of approximately $5.4 billion, excluding revenue with affiliates, for Verizon in 2014. The operating results of this business are included within our Wireline segment for all periods presented.

The following table summarizes the major classes of assets and liabilities of our local exchange and related landline activities in California, Florida and Texas which are classified as held for sale on our condensed consolidated balance sheet as of March 31, 2015:

	(dollars in millions)
Assets held for sale:
Accounts receivable	$	496
Prepaid expense and other		60
Total current assets held for sale		556
Plant, property and equipment, net		8,198
Goodwill (Note 3)		1,328
Other assets		54
Total non-current assets held for sale		9,580
Total assets held for sale	$	10,136
Liabilities related to assets held for sale:
Accounts payable and accrued liabilities	$	277
Other current liabilities		295
Total current liabilities related to assets held for sale		572
Long-term debt		594
Employee benefit obligations		215
Other liabilities		134
Total non-current liabilities related to assets held for sale		943
Total liabilities related to assets held for sale	$	1,515

XML

Composition of Other Intangible Assets Net (Detail) (USD $) In Millions, unless otherwise specified	3 Months Ended
	Mar. 31, 2015	Dec. 31, 2014
Finite-Lived Intangible Assets [Line Items]
Gross Amount	17,886	$ 17,482
Accumulated Amortization	(12,107)	(11,754)
Net Amount	5,779	5,728
Customer Lists
Finite-Lived Intangible Assets [Line Items]
Gross Amount	3,617	3,618
Accumulated Amortization	(2,980)	(2,924)
Net Amount	637	694
Customer Lists | Minimum
Finite-Lived Intangible Assets [Line Items]
Useful life for finite-lived intangible assets, years	5 years
Customer Lists | Maximum
Finite-Lived Intangible Assets [Line Items]
Useful life for finite-lived intangible assets, years	13 years
Non-Network Internal-Use Software
Finite-Lived Intangible Assets [Line Items]
Gross Amount	13,544	13,194
Accumulated Amortization	(8,756)	(8,462)
Net Amount	4,788	4,732
Non-Network Internal-Use Software | Minimum
Finite-Lived Intangible Assets [Line Items]
Useful life for finite-lived intangible assets, years	3 years
Non-Network Internal-Use Software | Maximum
Finite-Lived Intangible Assets [Line Items]
Useful life for finite-lived intangible assets, years	7 years
Other Intangible Assets
Finite-Lived Intangible Assets [Line Items]
Gross Amount	725	670
Accumulated Amortization	(371)	(368)
Net Amount	354	$ 302
Other Intangible Assets | Minimum
Finite-Lived Intangible Assets [Line Items]
Useful life for finite-lived intangible assets, years	5 years
Other Intangible Assets | Maximum
Finite-Lived Intangible Assets [Line Items]
Useful life for finite-lived intangible assets, years	25 years

XML

Fair Value of Short Term and Long Term Debt Excluding Capital Leases (Detail) (USD $) In Millions, unless otherwise specified	Mar. 31, 2015	Dec. 31, 2014
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Short- and long-term debt	$ 113,388	$ 113,271
Carrying Amount, Fair Value Disclosure | Excluding Capital Leases
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Short- and long-term debt	112,738	112,755
Estimate of Fair Value Measurement | Excluding Capital Leases
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Short- and long-term debt	$ 128,347	$ 126,549

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, 2015	Mar. 31, 2014
Segment Reporting Information [Line Items]
Operating income	$ 7,960	$ 7,160
Equity in earnings (losses) of unconsolidated businesses	(34)	1,902
Other income and (expense), net	75	(894)
Interest expense	(1,332)	(1,214)
Income Before Provision For Income Taxes	6,669	6,954
Operating Segments
Segment Reporting Information [Line Items]
Operating income	8,215	7,459
Operating Income Generated By Assets Sold
Segment Reporting Information [Line Items]
Operating income		6
Corporate, Eliminations and Other
Segment Reporting Information [Line Items]
Operating income	$ (255)	$ (305)

XML

Condensed Consolidated Statements of Income (USD $) In Millions, except Per Share data, unless otherwise specified	3 Months Ended
	Mar. 31, 2015	Mar. 31, 2014
Operating Revenues	$ 31,984	$ 30,818
Operating Expenses
Cost of services and sales (exclusive of items shown below)	12,096	11,189
Selling, general and administrative expense	7,939	8,332
Depreciation and amortization expense	3,989	4,137
Total Operating Expenses	24,024	23,658
Operating Income	7,960	7,160
Equity in earnings (losses) of unconsolidated businesses	(34)	1,902
Other income and (expense), net	75	(894)
Interest expense	(1,332)	(1,214)
Income Before Provision For Income Taxes	6,669	6,954
Provision for income taxes	(2,331)	(968)
Net Income	4,338	5,986
Net income attributable to noncontrolling interests	119	2,039
Net income attributable to Verizon	4,219	3,947
Net Income	$ 4,338	$ 5,986
Basic Earnings Per Common Share
Net income attributable to Verizon	$ 1.03	$ 1.15
Weighted-average shares outstanding (in millions)	4,116	3,425
Diluted Earnings Per Common Share
Net income attributable to Verizon	$ 1.02	$ 1.15
Weighted-average shares outstanding (in millions)	4,121	3,430
Dividends declared per common share	$ 0.55	$ 0.53

XML

Employee Benefits - Additional Information (Detail) (USD $) In Billions, unless otherwise specified	3 Months Ended
	Mar. 31, 2015
Defined Benefit Plan Disclosure [Line Items]
Amount paid in severance benefits over the period	$ 0.3
Post employment benefits liability	0.6
Other Postretirement Benefit Plan
Defined Benefit Plan Disclosure [Line Items]
Defined benefit plan contributions by employer	0.3
Qualified pension plans
Defined Benefit Plan Disclosure [Line Items]
Defined benefit plan contributions by employer	$ 0.2

XML

Condensed Consolidated Statements of Cash Flows (USD $) In Millions, unless otherwise specified	3 Months Ended
	Mar. 31, 2015	Mar. 31, 2014
Cash Flows from Operating Activities
Net Income	$ 4,338	$ 5,986
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization expense	3,989	4,137
Employee retirement benefits	284	281
Deferred income taxes	823	(155)
Provision for uncollectible accounts	383	231
Equity in earnings (losses) of unconsolidated businesses, net of dividends received	44	(1,894)
Changes in current assets and liabilities, net of effects from acquisition/disposition of businesses	(888)	(1,626)
Other, net	1,196	179
Net cash provided by operating activities	10,169	7,139
Cash Flows from Investing Activities
Capital expenditures (including capitalized software)	(3,665)	(4,150)
Acquisitions of investments and businesses, net of cash acquired	(2)	(157)
Acquisitions of wireless licenses	(9,555)	(213)
Other, net	46	(11)
Net cash used in investing activities	(13,176)	(4,531)
Cash Flows from Financing Activities
Proceeds from long-term borrowings	6,497	16,952
Repayments of long-term borrowings and capital lease obligations	(5,576)	(7,951)
Increase in short-term obligations, excluding current maturities	482	252
Dividends paid	(2,153)	(1,517)
Proceeds from sale of common stock		34
Purchase of common stock for treasury	(5,000)
Acquisition of noncontrolling interest		(58,886)
Other, net	2,545	(2,113)
Net cash used in financing activities	(3,205)	(53,229)
Decrease in cash and cash equivalents	(6,212)	(50,621)
Cash and cash equivalents, beginning of period	10,598	53,528
Cash and cash equivalents, end of period	$ 4,386	$ 2,907

XML

Changes to Debt (Detail) (USD $) In Millions, unless otherwise specified	3 Months Ended
	Mar. 31, 2015	Mar. 31, 2014
Debt Instrument [Line Items]
Debt maturing within one year, Balance at January 1, 2015	$ 2,735
Long-term debt,Balance at January 1, 2015	110,536
Total,Balance at January 1, 2015	113,271
Proceeds from borrowings	6,497	16,952
Repayments of borrowings and capital leases obligations	(5,576)	(7,951)
Increase in short-term obligations, excluding current maturities	482	252
Reclassification of long-term debt to Non-current liabilities related to assets held for sale (Note 2)	(594)
Other	(692)
Debt maturing within one year,Balance at March 31, 2015	4,439
Long-term debt,Balance at March 31, 2015	108,949
Total,Balance at March 31, 2015	113,388
Debt Maturing Within One Year
Debt Instrument [Line Items]
Debt maturing within one year, Balance at January 1, 2015	2,735
Proceeds from borrowings	4,000
Repayments of borrowings and capital leases obligations	(5,576)
Increase in short-term obligations, excluding current maturities	482
Reclassifications of long-term debt	2,782
Reclassification of long-term debt to Non-current liabilities related to assets held for sale (Note 2)	0
Other	16
Debt maturing within one year,Balance at March 31, 2015	4,439
Long-term Debt
Debt Instrument [Line Items]
Long-term debt,Balance at January 1, 2015	110,536
Proceeds from borrowings	2,497
Reclassifications of long-term debt	(2,782)
Reclassification of long-term debt to Non-current liabilities related to assets held for sale (Note 2)	(594)
Other	(708)
Long-term debt,Balance at March 31, 2015	$ 108,949

XML

Stock-Based Compensation (Tables)

3 Months Ended

Mar. 31, 2015

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, 2015		15,007			19,966
Granted		4,235			6,220
Payments		(5,839	)		(6,721	)
Cancelled/Forfeited		(48	)		(176	)
Outstanding, March 31, 2015		13,355			19,289

XML

Debt - Additional Information (Detail) (USD $)	3 Months Ended	0 Months Ended	1 Months Ended
	Mar. 31, 2015	Mar. 31, 2015	Mar. 31, 2015	Dec. 31, 2014
Debt Instrument [Line Items]
Borrowing capacity	$ 8,000,000,000	8,000,000,000	$ 8,000,000,000
Principal amount outstanding in connection with the guarantee of debt obligations	113,388,000,000	113,388,000,000	113,388,000,000	113,271,000,000
Vendor Financing Facility | Network Equipment
Debt Instrument [Line Items]
Value of purchase assets financed	200,000,000
Long-term debt maturing within one year	800,000,000	800,000,000	800,000,000
Guarantee Of Debentures And First Mortgage Bonds Of Operating Telephone Company Subsidiaries
Debt Instrument [Line Items]
Principal amount outstanding in connection with the guarantee of debt obligations	3,100,000,000	3,100,000,000	3,100,000,000
Guarantee of Debt Obligations of GTE Corporation
Debt Instrument [Line Items]
Principal amount outstanding in connection with the guarantee of debt obligations	1,400,000,000	1,400,000,000	1,400,000,000
6.94% Notes due 2028 | Old Notes in Exchange for 2048 New Notes | GTE Corporation
Debt Instrument [Line Items]
Stated interest rate on debt instrument	6.94%	6.94%	6.94%
Debt instrument maturity date		2028
2036 New Notes in February Exchange Offers | Verizon Communications
Debt Instrument [Line Items]
Stated interest rate on debt instrument	4.272%	4.272%	4.272%
Debt instrument maturity date		2036
Aggregate principal amount	2,900,000,000	2,900,000,000	2,900,000,000
2048 New Notes in February Exchange Offers | Verizon Communications
Debt Instrument [Line Items]
Stated interest rate on debt instrument	4.522%	4.522%	4.522%
Debt instrument maturity date		2048
Aggregate principal amount	5,000,000,000	5,000,000,000	5,000,000,000
2055 New Notes in February Exchange Offers | Verizon Communications
Debt Instrument [Line Items]
Stated interest rate on debt instrument	4.672%	4.672%	4.672%
Debt instrument maturity date		2055
Aggregate principal amount	5,500,000,000	5,500,000,000	5,500,000,000
January 2015 Term Loan Agreement
Debt Instrument [Line Items]
Borrowing capacity	6,500,000,000	6,500,000,000	6,500,000,000
Term loan agreement partial mandatory prepayment amount	4,000,000,000
Debt instrument maturity date	2016-03
Date in which a partial mandatory prepayment is required	2015-06
Leverage ratio	350.00%
Term loan agreement prepaid amount			5,000,000,000
Amount of unused borrowing capacity under credit facility	$ 7,900,000,000	7,900,000,000	$ 7,900,000,000

XML

Equity and Accumulated Other Comprehensive Income (Tables)

3 Months Ended

Mar. 31, 2015

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, 2015	$	12,298		$	1,378		$	13,676
Net income		4,219			119			4,338
Other comprehensive loss		(195	)		–			(195	)
Comprehensive income		4,024			119			4,143
Contributed capital		(764	)		–			(764	)
Dividends declared		(2,244	)		–			(2,244	)
Common stock in treasury		(3,830	)		–			(3,830	)
Distributions and other		(145	)		(77	)		(222	)
Balance at March 31, 2015	$	9,339		$	1,420		$	10,759

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, 2015	$	(346	)	$	(84	)	$	112	$	1,429		$	1,111
Other comprehensive income (loss)		(141	)		(59	)		3		–			(197	)
Amounts reclassified to net income		–			46			–		(44	)		2
Net other comprehensive income (loss)		(141	)		(13	)		3		(44	)		(195	)
Balance at March 31, 2015	$	(487	)	$	(97	)	$	115	$	1,385		$	916

XML

Basis of Presentation

3 Months Ended

Mar. 31, 2015

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, 2014. 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.

Leasing Arrangements

At each reporting period, we monitor the credit quality of the various lessees in our portfolios. Regarding the leveraged lease portfolio, external credit reports are used 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 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, 2015 and 2014, respectively.

Recently Adopted Accounting Standards

During the first quarter of 2015, we adopted the accounting standard update related to the reporting of discontinued operations and disclosures of disposals of components of an entity, which changes the criteria for reporting discontinued operations. As a result of this standard update, a disposal of a component of an entity or a group of components of an entity is required to be reported in discontinued operations if the disposal represents a strategic shift that has, or will have, a major effect on an entity’s operations and financial results. The prospective adoption of this standard update did not have a significant impact on our condensed consolidated financial statements.

Recently Issued Accounting Standards

In January 2015, the accounting standard update related to the reporting of extraordinary and unusual items was issued. This standard update eliminates the concept of extraordinary items from generally accepted accounting principles in the United States (U.S. GAAP) as part of an initiative to reduce complexity in accounting standards while maintaining or improving the usefulness of the information provided to the users of the financial statements. The presentation and disclosure guidance for items that are unusual in nature or occur infrequently will be retained and expanded to include items that are both unusual in nature and infrequent in occurrence. This standard update is effective as of the first quarter of 2016; however, earlier adoption is permitted. The adoption of this standard update is not expected to have a significant impact on our condensed consolidated financial statements.

In April 2015, the accounting standard update related to the simplification of the presentation of debt issuances costs was issued. This standard update requires that debt issuance costs related to a recognized debt liability be presented in the balance sheet as a direct deduction from the carrying amount of that debt liability. This standard update is effective as of the first quarter of 2016; however, earlier adoption is permitted. The adoption of this standard update is not expected to have a significant impact on our condensed consolidated financial statements.

In May 2014, the accounting standard update related to the recognition of revenue from contracts with customers was issued. This standard update clarifies the principles for recognizing revenue and develops a common revenue standard for U.S. GAAP and International Financial Reporting Standards. The standard update intends to provide a more robust framework for addressing revenue issues; improve comparability of revenue recognition practices across entities, industries, jurisdictions, and capital markets; and provide more useful information to users of financial statements through improved disclosure requirements. Upon

adoption of this standard update, we expect that the allocation and timing of revenue recognition will be impacted. Although we currently expect to adopt this standard update during the first quarter of 2017, the Financial Accounting Standards Board, in April 2015, voted to issue a proposal which would defer the adoption of this standard update until the first quarter of 2018.

There are two adoption methods available for implementation of the standard update related to the recognition of revenue from contracts with customers. Under one method, the guidance is applied retrospectively to contracts for each reporting period presented, subject to allowable practical expedients. Under the other method, the guidance is applied to contracts not completed as of the date of initial application, recognizing the cumulative effect of the change as an adjustment to the beginning balance of retained earnings, and also requires additional disclosures comparing the results to the previous guidance. We are currently evaluating these adoption methods and the impact that this standard update will have on our condensed consolidated financial statements.

In June 2014, an accounting standard update was issued related to the accounting for share-based payments when the terms of an award provide that a performance target could be achieved after the requisite service period. The standard update resolves the diverse accounting treatment for these share-based payments by requiring that a performance target that affects vesting and that could be achieved after the requisite service period be treated as a performance condition. The requisite service period ends when the employee can cease rendering service and still be eligible to vest in the award if the performance target is achieved. We will adopt this standard update during the first quarter of 2016. The adoption of this standard update is not expected to have a significant impact on our condensed consolidated financial statements.

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Condensed Consolidated Statements of Comprehensive Income (USD $) In Millions, unless otherwise specified	3 Months Ended
	Mar. 31, 2015	Mar. 31, 2014
Net Income	$ 4,338	$ 5,986
Other comprehensive loss, net of taxes
Foreign currency translation adjustments	(141)	(949)
Unrealized loss on cash flow hedges	(13)	(83)
Unrealized gain on marketable securities	3	1
Defined benefit pension and postretirement plans	(44)	(37)
Net other comprehensive income (loss)attributable to Verizon	(195)	(1,068)
Other comprehensive loss attributable to noncontrolling interests		(23)
Total Comprehensive Income	4,143	4,895
Comprehensive income attributable to noncontrolling interests	119	2,016
Comprehensive income attributable to Verizon	4,024	2,879
Total Comprehensive Income	$ 4,143	$ 4,895

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Commitments and Contingencies

3 Months Ended

Mar. 31, 2015

Commitments and Contingencies

11. 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.

Reserves have been established to cover environmental matters relating to discontinued businesses and past telecommunications activities. These reserves include funds to address contamination at the site of a former Sylvania facility in Hicksville, NY, which had processed nuclear fuel rods in the 1950s and 1960s. In September 2005, the Army Corps of Engineers (ACE) accepted the site into its Formerly Utilized Sites Remedial Action Program. As a result, the ACE has taken primary responsibility for addressing the contamination at the site. An adjustment to the reserves may be made after a cost allocation is conducted with respect to the past and future expenses of all of the parties. Adjustments to the environmental reserve may also be made based upon the actual conditions found at other sites requiring remediation.

Verizon is currently involved in approximately 60 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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Document and Entity Information	3 Months Ended
	Mar. 31, 2015
Document Information [Line Items]
Document Type	10-Q
Amendment Flag	false
Document Period End Date	Mar. 31, 2015
Document Fiscal Year Focus	2015
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	4,078,487,075

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Acquisitions and Divestitures (Tables)

3 Months Ended

Mar. 31, 2015

Major Classes of Assets and Liabilities of Local Exchange and Related Landline Activities in California, Florida and Texas

The following table summarizes the major classes of assets and liabilities of our local exchange and related landline activities in California, Florida and Texas which are classified as held for sale on our condensed consolidated balance sheet as of March 31, 2015:

	(dollars in millions)
Assets held for sale:
Accounts receivable	$	496
Prepaid expense and other		60
Total current assets held for sale		556
Plant, property and equipment, net		8,198
Goodwill (Note 3)		1,328
Other assets		54
Total non-current assets held for sale		9,580
Total assets held for sale	$	10,136
Liabilities related to assets held for sale:
Accounts payable and accrued liabilities	$	277
Other current liabilities		295
Total current liabilities related to assets held for sale		572
Long-term debt		594
Employee benefit obligations		215
Other liabilities		134
Total non-current liabilities related to assets held for sale		943
Total liabilities related to assets held for sale	$	1,515

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Condensed Consolidated Balance Sheets (USD $) In Millions, unless otherwise specified	Mar. 31, 2015	Dec. 31, 2014
Current assets
Cash and cash equivalents	$ 4,386	$ 10,598
Short-term investments	547	555
Accounts receivable, net of allowances of $745 and $739	12,698	13,993
Inventories	1,076	1,153
Assets held for sale	893	552
Prepaid expenses and other	3,236	2,772
Total current assets	22,836	29,623
Plant, property and equipment	210,389	230,508
Less accumulated depreciation	128,747	140,561
Plant, property and equipment, net	81,642	89,947
Investments in unconsolidated businesses	762	802
Wireless licenses	75,693	75,341
Goodwill	23,303	24,639
Other intangible assets, net	5,779	5,728
Non-current assets held for sale	9,580
Deposit for wireless licenses	10,430	921
Other assets	5,765	5,707
Total assets	235,790	232,708
Current liabilities
Debt maturing within one year	4,439	2,735
Accounts payable and accrued liabilities	15,189	16,680
Liabilities related to assets held for sale	572
Other	8,513	8,649
Total current liabilities	28,713	28,064
Long-term debt	108,949	110,536
Employee benefit obligations	33,010	33,280
Deferred income taxes	42,330	41,578
Non-current liabilities related to assets held for sale	943
Other liabilities	11,086	5,574
Equity
Series preferred stock ($.10 par value; none issued)
Common stock ($.10 par value; 4,242,374,240 shares issued in each period)	424	424
Contributed capital	10,391	11,155
Reinvested earnings	4,422	2,447
Accumulated other comprehensive income	916	1,111
Common stock in treasury, at cost	(7,093)	(3,263)
Deferred compensation - employee stock ownership plans and other	279	424
Noncontrolling interests	1,420	1,378
Total equity	10,759	13,676
Total liabilities and equity	$ 235,790	$ 232,708

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Fair Value Measurements

3 Months Ended

Mar. 31, 2015

Fair Value Measurements

6. 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, 2015:

(dollars in millions)	Level 1(1)		Level 2(2)		Level 3(3)		Total
Assets:
Short-term investments:
Equity securities	$	298	$	–	$	–	$	298
Fixed income securities		6		243		–		249
Other current assets:
Fixed income securities		250		–		–		250
Other assets:
Fixed income securities		–		915		–		915
Interest rate swaps and other		–		111		–		111
Total	$	554	$	1,269	$	–	$	1,823
Liabilities:
Other current liabilities:
Cross currency swaps and other	$	–	$	137	$	–	$	137
Other liabilities:
Forward interest rate swaps		–		301		–		301
Cross currency swaps		–		1,318		–		1,318
Total	$	–	$	1,756	$	–	$	1,756

⁽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 as well as U.S. Treasury securities. We use quoted prices in active markets for our U.S. Treasury securities, therefore these securities are classified as Level 1. For all other fixed income securities that do not have quoted prices in active markets, 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, 2015.

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, 2015				At December 31, 2014
(dollars in millions)	Carrying Amount		Fair Value		Carrying Amount		Fair Value
Short- and long-term debt, excluding capital leases	$	112,738	$	128,347	$	112,755	$	126,549

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 posted collateral of approximately $0.8 billion and $0.6 billion related to derivative contracts under collateral exchange arrangements at March 31, 2015 and December 31, 2014, respectively, which was recorded as Prepaid expenses and other in our condensed consolidated balance sheets. During the first quarter of 2015, we paid an immaterial amount of cash to enter into amendments to certain collateral exchange arrangements. These amendments suspend cash collateral posting for a specified period of time by both counterparties.

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 the London Interbank Offered Rate, 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, 2015 and December 31, 2014, respectively. At March 31, 2015 and December 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, 2015.

Forward Interest Rate Swaps

In order to manage our exposure to future interest rate changes, we have entered into forward interest rate swaps. At March 31, 2015 and December 31, 2014, these swaps had a notional value of $2.0 billion. We designated these contracts as cash flow hedges. The fair value of these contracts was $0.3 billion and $0.2 billion at March 31, 2015 and December 31, 2014, respectively, which was included within Other liabilities on our condensed consolidated balance sheets.

Cross Currency Swaps

We enter into cross currency swaps to exchange 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. These swaps are designated as cash flow hedges. 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 $1.4 billion at March 31, 2015 and $0.6 billion at December 31, 2014, which were primarily included within Other liabilities on our condensed consolidated balance sheets. At March 31, 2015 and December 31, 2014, the total notional amount of the cross currency swaps was $10.3 billion. During the three months ended March 31, 2015 and 2014, a pre-tax loss of $0.9 billion and an immaterial pre-tax gain, respectively, were recognized in Other comprehensive loss.

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Wireless Equipment Installment Plans

3 Months Ended

Mar. 31, 2015

Wireless Equipment Installment Plans

5. Wireless Equipment Installment Plans

We offer new and existing customers the option to participate in Verizon Edge, a program that provides eligible wireless customers with the ability to pay for their device over a period of time (an equipment installment plan) and the right to upgrade their device after a minimum of 30 days, subject to certain conditions, including making a stated portion of the required device payments, trading in their device in good working condition and signing a new device contract with Verizon. The gross guarantee liability related to this program, which was approximately $0.6 billion at March 31, 2015, and $0.7 billion at December 31, 2014, respectively, was primarily included in Other current liabilities on our condensed consolidated balance sheets.

At the time of sale, we impute risk adjusted interest on the receivables associated with Verizon Edge. We record the imputed interest as a reduction to the related accounts receivable. Interest income, which is included within Other income and (expense), net on our condensed consolidated statements of income, is recognized over the financed installment term.

We assess the collectability of our Verizon Edge receivables based upon a variety of factors, including the credit quality of the customer base, payment trends and other qualitative factors. The current portion of our receivables related to Verizon Edge included in Accounts receivable was $2.0 billion at March 31, 2015 and was $2.3 billion at December 31, 2014. The long-term portion of the equipment installment plan receivables included in Other assets was $0.9 billion at March 31, 2015 and was $1.2 billion at December 31, 2014.

The credit profiles of our customers with a Verizon Edge plan are similar to those of our customers with a traditional subsidized plan. Customers with a credit profile which carries a higher risk are required to make a down payment for equipment financed through Verizon Edge.

Sales of Wireless Equipment Installment Receivables

On March 27, 2015, we established a program to sell from time to time, on an uncommitted basis, selected wireless equipment installment receivables under the Verizon Edge program to a group of relationship banks (Purchasers). Under the program, we will transfer the receivables to wholly-owned subsidiaries that are bankruptcy remote special purpose entities (Sellers). The Sellers will then sell the receivables to the Purchasers for cash and additional consideration upon settlement of the receivables (the deferred purchase price). The receivables sold under the program are no longer considered assets of Verizon. We will continue to bill and collect on the receivables in exchange for a monthly servicing fee, which is not material.

Under this arrangement, each Seller’s sole business consists of the acquisition of the receivables from Verizon and the resale of the receivables to the Purchasers. The assets of the Sellers are not available to be used to satisfy obligations of any Verizon entities other than the Sellers.

During the three months ended March 31, 2015, we sold $2.0 billion of receivables, net of allowances, imputed interest and the trade-in right, and received cash proceeds of $1.3 billion. Additionally, we recorded a deferred purchase price of $0.7 billion, which was initially recorded at fair value, based on the remaining installment amounts expected to be collected, adjusted by the timing and estimated value of the device trade-in. The estimated value of the device trade-in considers prices expected to be offered to us by independent third parties. This estimate contemplates changes in value after the launch of a device. The fair value measurements are considered to be Level 3 measurements within the fair value hierarchy.

At March 31, 2015, our deferred purchase price receivable was $0.7 billion, which is included within Other assets on our condensed consolidated balance sheet. Generally, our maximum exposure to loss as a result of selling these equipment installment receivables is limited to the amount of our deferred purchase price.

The cash proceeds received from the Purchasers are recorded within Cash Flows from Operating Activities on our condensed consolidated statement of cash flows as the cash received from the Purchasers upon the sale of the receivables and the collection of the deferred purchase price is not subject to significant interest rate risk.

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Employee Benefits (Tables)

3 Months Ended

Mar. 31, 2015

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,	2015			2014			2015			2014
Service cost	$	94		$	81		$	81		$	65
Amortization of prior service credit		1			(2	)		(72	)		(63	)
Expected return on plan assets		(317	)		(295	)		(25	)		(41	)
Interest cost		243			259			279			277
Total	$	21		$	43		$	263		$	238

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Wireless Licenses, Goodwill and Other Intangible Assets (Tables)

3 Months Ended

Mar. 31, 2015

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, 2015	$	75,341
Acquisitions (Note 2)		42
Capitalized interest on wireless licenses		4
Reclassifications, adjustments and other		306
Balance at March 31, 2015	$	75,693

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, 2015	$	18,390	$	6,249		$	24,639
Reclassifications, adjustments and other		–		(1,336	)		(1,336	)
Balance at March 31, 2015	$	18,390	$	4,913		$	23,303

Composition of Other Intangible Assets, Net

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

	At March 31, 2015							At December 31, 2014
(dollars in millions)	Gross Amount		Accumulated Amortization			Net Amount		Gross Amount		Accumulated Amortization			Net Amount
Customer lists (5 to 13 years)	$	3,617	$	(2,980	)	$	637	$	3,618	$	(2,924	)	$	694
Non-network internal-use software (3 to 7 years)		13,544		(8,756	)		4,788		13,194		(8,462	)		4,732
Other (5 to 25 years)		725		(371	)		354		670		(368	)		302
Total	$	17,886	$	(12,107	)	$	5,779	$	17,482	$	(11,754	)	$	5,728

Amortization Expense for Other Intangible Assets

The amortization expense for Other intangible assets was as follows:

(dollars in millions)	Three Months Ended March 31,
2015		$         381
2014		394

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 2015		$    1,128
2016		1,277
2017		1,078
2018		903
2019		673

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Equity and Accumulated Other Comprehensive Income

3 Months Ended

Mar. 31, 2015

Equity and Accumulated Other Comprehensive Income

9. 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, 2015	$	12,298		$	1,378		$	13,676
Net income		4,219			119			4,338
Other comprehensive loss		(195	)		–			(195	)
Comprehensive income		4,024			119			4,143
Contributed capital		(764	)		–			(764	)
Dividends declared		(2,244	)		–			(2,244	)
Common stock in treasury		(3,830	)		–			(3,830	)
Distributions and other		(145	)		(77	)		(222	)
Balance at March 31, 2015	$	9,339		$	1,420		$	10,759

Common Stock

Verizon did not repurchase any shares of Verizon common stock through its previously authorized share buyback program during the three months ended March 31, 2015.

However, in February 2015, the Verizon Board of Directors authorized Verizon to enter into an accelerated share repurchase (ASR) agreement to repurchase $5.0 billion of the Company’s common stock. The total number of shares that Verizon will repurchase under the ASR agreement will be based generally upon the volume-weighted average share price of Verizon’s

common stock during the term of the transaction. On February 10, 2015, in exchange for an upfront payment totaling $5.0 billion, Verizon received an initial delivery of 86.2 million shares having a value of approximately $4.25 billion. Final settlement of the transaction under the ASR agreement, including delivery of the remaining shares, if any, that Verizon is entitled to receive, is scheduled to occur in the second quarter of 2015.

Common stock has been used from time to time to satisfy some of the funding requirements of employee and shareowner plans, including 9.8 million common shares issued from Treasury stock during the three months ended March 31, 2015, which had an aggregate value of $0.4 billion.

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, 2015	$	(346	)	$	(84	)	$	112	$	1,429		$	1,111
Other comprehensive income (loss)		(141	)		(59	)		3		–			(197	)
Amounts reclassified to net income		–			46			–		(44	)		2
Net other comprehensive income (loss)		(141	)		(13	)		3		(44	)		(195	)
Balance at March 31, 2015	$	(487	)	$	(97	)	$	115	$	1,385		$	916

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, 2015, the amounts reclassified to net income related to defined benefit pension and postretirement plans were included in Cost of services and sales and Selling, general and administrative expense on our condensed consolidated statement of income. For the three months ended March 31, 2015, all other amounts reclassified to net income were included in Other income and (expense), net on our condensed consolidated statement of income.

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Stock-Based Compensation

3 Months Ended

Mar. 31, 2015

Stock-Based Compensation

7. 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, 2015		15,007			19,966
Granted		4,235			6,220
Payments		(5,839	)		(6,721	)
Cancelled/Forfeited		(48	)		(176	)
Outstanding, March 31, 2015		13,355			19,289

As of March 31, 2015, 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 2015 have a weighted-average grant date fair value of $48.29 per unit.

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Employee Benefits

3 Months Ended

Mar. 31, 2015

Employee Benefits

8. 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 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,	2015			2014			2015			2014
Service cost	$	94		$	81		$	81		$	65
Amortization of prior service credit		1			(2	)		(72	)		(63	)
Expected return on plan assets		(317	)		(295	)		(25	)		(41	)
Interest cost		243			259			279			277
Total	$	21		$	43		$	263		$	238

Severance Payments

During the three months ended March 31, 2015, we paid severance benefits of $0.3 billion. At March 31, 2015, 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, 2015.

Employer Contributions

During the three months ended March 31, 2015, we contributed $0.3 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, 2015. There have been no material changes with respect to the qualified and nonqualified pension contributions in 2015 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, 2014.

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Segment Information

3 Months Ended

Mar. 31, 2015

Segment Information

10. 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 the historical results of divested operations 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.

On July 1, 2014, our Wireline segment sold a non-strategic business. Accordingly, the historical Wireline results for these operations have been reclassified to Corporate, eliminations and other to reflect comparable segment operating results.

The reconciliation of segment operating revenues and expenses to consolidated operating revenues and expenses below also includes those items of a non-operational nature. We exclude from segment results the effects of certain items that management does not consider in assessing segment performance, primarily because of their non-operational nature.

We have adjusted prior period consolidated and segment information, where applicable, to conform to current period presentation.

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 around the world.

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

	Three Months Ended March 31,
(dollars in millions)	2015			2014
External Operating Revenues
Wireless
Retail service	$	17,131		$	17,233
Other service		765			735
Service revenue		17,896			17,968
Equipment		3,373			1,869
Other		1,033			1,014
Total Wireless		22,302			20,851
Wireline
Consumer retail		3,992			3,840
Small business		600			624
Mass Markets		4,592			4,464
Strategic services		2,048			2,062
Core		1,215			1,404
Global Enterprise		3,263			3,466
Global Wholesale		1,266			1,336
Other		87			140
Total Wireline		9,208			9,406
Total segments		31,510			30,257
Corporate, eliminations and other		474			561
Total consolidated – reported	$	31,984		$	30,818
Intersegment Revenues
Wireless	$	26		$	28
Wireline		261			256
Total segments		287			284
Corporate, eliminations and other		(287	)		(284	)
Total consolidated – reported	$	–		$	–
Total Operating Revenues
Wireless	$	22,328		$	20,879
Wireline		9,469			9,662
Total segments		31,797			30,541
Reconciling items		187			277
Total consolidated – reported	$	31,984		$	30,818
Operating Income
Wireless	$	7,810		$	7,318
Wireline		405			141
Total segments		8,215			7,459
Reconciling items		(255	)		(299	)
Total consolidated – reported	$	7,960		$	7,160

(dollars in millions)	At March 31, 2015			At December 31, 2014
Assets
Wireless	$	171,760		$	160,385
Wireline		78,624			76,673
Total segments		250,384			237,058
Corporate, eliminations and other		(14,594	)		(4,350	)
Total consolidated – reported	$	235,790		$	232,708

A reconciliation of the segment operating revenues to consolidated operating revenues is as follows:

	Three Months Ended March 31,
(dollars in millions)	2015		2014
Total segment operating revenues	$	31,797	$	30,541
Impact of divested operations		–		128
Corporate, eliminations and other		187		149
Total consolidated operating revenues	$	31,984	$	30,818

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)	2015			2014
Total segment operating income	$	8,215		$	7,459
Impact of divested operations		–			6
Corporate, eliminations and other		(255	)		(305	)
Total consolidated operating income		7,960			7,160
Equity in earnings (losses) of unconsolidated businesses		(34	)		1,902
Other income and (expense), net		75			(894	)
Interest expense		(1,332	)		(1,214	)
Income Before Provision For Income Taxes	$	6,669		$	6,954

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, 2015 and 2014.

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Estimated Future Amortization Expense for Other Intangible Assets (Detail) (USD $) In Millions, unless otherwise specified	Mar. 31, 2015
Finite-Lived Intangible Assets [Line Items]
Remainder of 2015	$ 1,128
2016	1,277
2017	1,078
2018	903
2019	$ 673

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Reconciliation of Segment Assets (Detail) (USD $) In Millions, unless otherwise specified	Mar. 31, 2015	Dec. 31, 2014
Segment Reporting Information [Line Items]
Assets	$ 235,790	$ 232,708
Operating Segments
Segment Reporting Information [Line Items]
Assets	250,384	237,058
Operating Segments | Wireless
Segment Reporting Information [Line Items]
Assets	171,760	160,385
Operating Segments | Wireline
Segment Reporting Information [Line Items]
Assets	78,624	76,673
Corporate, Eliminations and Other
Segment Reporting Information [Line Items]
Assets	$ (14,594)	$ (4,350)

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Fair Value Measurements (Tables)

3 Months Ended

Mar. 31, 2015

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, 2015:

(dollars in millions)	Level 1(1)		Level 2(2)		Level 3(3)		Total
Assets:
Short-term investments:
Equity securities	$	298	$	–	$	–	$	298
Fixed income securities		6		243		–		249
Other current assets:
Fixed income securities		250		–		–		250
Other assets:
Fixed income securities		–		915		–		915
Interest rate swaps and other		–		111		–		111
Total	$	554	$	1,269	$	–	$	1,823
Liabilities:
Other current liabilities:
Cross currency swaps and other	$	–	$	137	$	–	$	137
Other liabilities:
Forward interest rate swaps		–		301		–		301
Cross currency swaps		–		1,318		–		1,318
Total	$	–	$	1,756	$	–	$	1,756

⁽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, 2015				At December 31, 2014
(dollars in millions)	Carrying Amount		Fair Value		Carrying Amount		Fair Value
Short- and long-term debt, excluding capital leases	$	112,738	$	128,347	$	112,755	$	126,549

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Basis of Presentation - Additional Information (Detail) In Millions, unless otherwise specified	3 Months Ended
	Mar. 31, 2015	Mar. 31, 2014
Basis of Presentation [Line Items]
Restricted stock units outstanding to purchase shares included in diluted earnings per common share	5	5

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Segment Information - Additional Information (Detail)	3 Months Ended
	Mar. 31, 2015 Segment	Mar. 31, 2014
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

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Fair Value Measurements - Additional Information (Detail) (USD $) In Billions, unless otherwise specified	3 Months Ended
	Mar. 31, 2015	Mar. 31, 2014	Dec. 31, 2014
Derivative Collateral
Derivatives, Fair Value [Line Items]
Derivative liability fair value of collateral	$ 0.8		$ 0.6
Interest Rate Swaps
Derivatives, Fair Value [Line Items]
Notional amount	1.8		1.8
Forward Interest Rate Swaps
Derivatives, Fair Value [Line Items]
Notional amount	2.0		2.0
Fair value of notional amount	0.3		0.2
Cross Currency Swaps
Derivatives, Fair Value [Line Items]
Notional amount	10.3		10.3
Fair value of cross currency swaps	1.4		0.6
Pre-tax gain (loss) recognized in other comprehensive income (loss)	$ (0.9)	$ (0.9)

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Condensed Consolidated Balance Sheets (Parenthetical) (USD $) In Millions, except Share data, unless otherwise specified	Mar. 31, 2015	Dec. 31, 2014
Accounts receivable, allowances	$ 745	$ 739
Series preferred stock, par value	$ 0.10	$ 0.10
Series preferred stock, issued	0	0
Common stock, par value	$ 0.10	$ 0.10
Common stock, shares issued	4,242,374,240	4,242,374,240

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Debt

3 Months Ended

Mar. 31, 2015

Debt

4. Debt

Changes to debt during the three months ended March 31, 2015 are as follows:

(dollars in millions)	Debt Maturing within One Year			Long-term Debt			Total
Balance at January 1, 2015	$	2,735		$	110,536		$	113,271
Proceeds from borrowings		4,000			2,497			6,497
Repayments of borrowings and capital leases obligations		(5,576	)		–			(5,576	)
Increase in short-term obligations, excluding current maturities		482			–			482
Reclassifications of long-term debt		2,782			(2,782	)		–
Reclassification of long-term debt to Non-current liabilities related to assets held for sale (Note 2)		–			(594	)		(594	)
Other		16			(708	)		(692	)
Balance at March 31, 2015	$	4,439		$	108,949		$	113,388

February Exchange Offers

On February 11, 2015, we announced the commencement of seven separate private offers to exchange (the February Exchange Offers) specified series of outstanding notes and debentures issued by Verizon and GTE Corporation (collectively, the Old Notes) for new Notes to be issued by Verizon (the New Notes) and, in the case of the 6.94% debentures due 2028 of GTE Corporation, cash. The February Exchange Offers have been accounted for as a modification of debt. On March 13, 2015, Verizon issued $2.9 billion aggregate principal amount of 4.272% Notes due 2036 (the 2036 New Notes), $5.0 billion aggregate principal amount of 4.522% Notes due 2048 (the 2048 New Notes) and $5.5 billion aggregate principal amount of 4.672% Notes due 2055 (the 2055 New Notes) in satisfaction of the exchange offer consideration on tendered Old Notes (not including accrued and unpaid interest on the Old Notes). The following tables list the series of Old Notes included in the February Exchange Offers and the principal amount of each such series accepted by Verizon for exchange.

The table below lists the series of Old Notes included in the February Exchange Offer for the 2036 New Notes:

(dollars in millions)	Interest Rate			Maturity		Principal Amount Outstanding		Principal Amount Accepted For Exchange
Verizon Communications Inc.		5.15	%		2023	$	11,000	$	2,483

The table below lists the series of Old Notes included in the February Exchange Offers for the 2048 New Notes:

(dollars in millions)	Interest Rate			Maturity		Principal Amount Outstanding		Principal Amount Accepted For Exchange
Verizon Communications Inc.		6.90	%		2038	$	1,250	$	773
		6.40	%		2038		1,750		884
		6.40	%		2033		4,355		2,159
		6.25	%		2037		750		–
GTE Corporation		6.94	%		2028		800		–
								$	3,816

The table below lists the series of Old Notes included in the February Exchange Offer for the 2055 New Notes:

(dollars in millions)	Interest Rate			Maturity		Principal Amount Outstanding		Principal Amount Accepted For Exchange
Verizon Communications Inc.		6.55	%		2043	$	10,670	$	4,084

Term Loan Agreement

During the first quarter of 2015, we entered into a term loan agreement with a major financial institution, pursuant to which we borrowed $6.5 billion for general corporate purposes, including the acquisition of spectrum licenses. Borrowings under the term loan agreement mature in March 2016, with a $4.0 billion mandatory prepayment required in June 2015. 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.

During March 2015, we prepaid approximately $5.0 billion of the term loan agreement, which satisfies the mandatory prepayment.

Other Credit Facilities

As of March 31, 2015, the unused borrowing capacity under our $8.0 billion credit facility was approximately $7.9 billion.

Additional Financing Activities (Non-Cash Transaction)

During the first quarter of 2015, we financed, primarily through vendor financing arrangements, the purchase of approximately $0.2 billion of long-lived assets, consisting primarily of network equipment. At March 31, 2015, $0.8 billion of these arrangements, including those entered into in prior years, remained outstanding. These purchases are non-cash financing activities and therefore not reflected within Capital expenditures on our condensed consolidated statements of cash flows.

Guarantees

We guarantee the debentures and first mortgage bonds of our operating telephone company subsidiaries. As of March 31, 2015, $3.1 billion aggregate principal amount of these obligations remained 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, 2015, $1.4 billion aggregate principal amount of these obligations remain outstanding.

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Acquisitions and Divestitures - Additional Information (Detail) (USD $)	3 Months Ended		0 Months Ended		3 Months Ended
	Mar. 31, 2015	Mar. 31, 2014	Feb. 05, 2015 Unit Customer	Jan. 29, 2015 Licenses	Dec. 31, 2014
Business Acquisition [Line Items]
Cash paid to acquire spectrum licenses	$ 9,555,000,000	$ 213,000,000
Operating Revenues	31,984,000,000	30,818,000,000
Access Line Sale with Frontier
Business Acquisition [Line Items]
Proceeds from dispositions of businesses			10,500,000,000
Debt assumed by Frontier			600,000,000
Number of FiOS Internet subscribers to be divested			1,500,000
Number of copper lines to be divested			2,100,000
Number of FiOS Video subscribers to be divested			1,200,000
Access Lines and Other Business Assets Acquired by Frontier
Business Acquisition [Line Items]
Operating Revenues		5,400,000,000
FCC spectrum licenses auction
Business Acquisition [Line Items]
FCC auction spectrum licenses				181
Cash paid to acquire spectrum licenses	9,500,000,000			10,400,000,000	900,000,000
Tower Monetization Transaction
Business Acquisition [Line Items]
Number of towers subject to failed sale-leaseback			11,300
Cash proceeds from failed sale-leaseback			5,000,000,000
Term of Lease			28 years
Number of towers subject to disposition			162
Cash proceeds from disposition of towers			100,000,000
Minimum years of sublease capacity on towers			10 years
March 2015 Tower Monetization Transaction- Other, net cash flows from operating activities
Business Acquisition [Line Items]
Cash proceeds from failed sale-leaseback			2,400,000,000
March 2015 Tower Monetization Transaction- Other, net cash flows from financing activities
Business Acquisition [Line Items]
Cash proceeds from failed sale-leaseback			$ 2,700,000,000

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Wireless Equipment Installment Plans - Additional Information (Detail) (USD $)	3 Months Ended
	Mar. 31, 2015	Dec. 31, 2014
Accounts, Notes, Loans and Financing Receivable [Line Items]
Long-term portion of financing receivables	$ 5,765,000,000	$ 5,707,000,000
Verizon Edge
Accounts, Notes, Loans and Financing Receivable [Line Items]
Minimum number of days before customers become eligible to upgrade their phone to a new phone under Verizon Edge	30 days
Guarantee liability	600,000,000	700,000,000
Sale of receivables	2,000,000,000
Proceeds from receivable	1,300,000,000
Verizon Edge | Other Assets
Accounts, Notes, Loans and Financing Receivable [Line Items]
Deferred purchase price receivable	700,000,000
Finance Leases Financing Receivable | Verizon Edge
Accounts, Notes, Loans and Financing Receivable [Line Items]
Current portion of financing receivables	2,000,000,000	2,300,000,000
Long-term portion of financing receivables	$ 900,000,000	$ 1,200,000,000

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Debt (Tables)

3 Months Ended

Mar. 31, 2015

Combined Schedule of Current and Noncurrent Debt and Capital Lease Obligations

Changes to debt during the three months ended March 31, 2015 are as follows:

(dollars in millions)	Debt Maturing within One Year			Long-term Debt			Total
Balance at January 1, 2015	$	2,735		$	110,536		$	113,271
Proceeds from borrowings		4,000			2,497			6,497
Repayments of borrowings and capital leases obligations		(5,576	)		–			(5,576	)
Increase in short-term obligations, excluding current maturities		482			–			482
Reclassifications of long-term debt		2,782			(2,782	)		–
Reclassification of long-term debt to Non-current liabilities related to assets held for sale (Note 2)		–			(594	)		(594	)
Other		16			(708	)		(692	)
Balance at March 31, 2015	$	4,439		$	108,949		$	113,388

Schedule of Notes Included in Exchange Offer

The table below lists the series of Old Notes included in the February Exchange Offer for the 2036 New Notes:

(dollars in millions)	Interest Rate			Maturity		Principal Amount Outstanding		Principal Amount Accepted For Exchange
Verizon Communications Inc.		5.15	%		2023	$	11,000	$	2,483

The table below lists the series of Old Notes included in the February Exchange Offers for the 2048 New Notes:

(dollars in millions)	Interest Rate			Maturity		Principal Amount Outstanding		Principal Amount Accepted For Exchange
Verizon Communications Inc.		6.90	%		2038	$	1,250	$	773
		6.40	%		2038		1,750		884
		6.40	%		2033		4,355		2,159
		6.25	%		2037		750		–
GTE Corporation		6.94	%		2028		800		–
								$	3,816

The table below lists the series of Old Notes included in the February Exchange Offer for the 2055 New Notes:

(dollars in millions)	Interest Rate			Maturity		Principal Amount Outstanding		Principal Amount Accepted For Exchange
Verizon Communications Inc.		6.55	%		2043	$	10,670	$	4,084