VERIZON COMMUNICATIONS INC Quarterly Report for Q1 Ended Mar 31, 2012

Summary

Verizon Communications Inc. reported solid financial results for the first quarter of 2012, demonstrating revenue growth driven primarily by its robust Verizon Wireless segment. Total operating revenues increased by 4.6% year-over-year to $28.24 billion, with Verizon Wireless revenues showing an impressive 8.2% rise to $18.27 billion. This growth was fueled by strong demand for smartphones and data services, which now constitute a significant portion of wireless service revenue. The company also saw positive trends in its Wireline segment, particularly in strategic services and broadband adoption, despite overall revenue decline in this segment. Net income attributable to Verizon increased to $1.69 billion, or $0.59 per diluted share, up from $1.44 billion, or $0.51 per diluted share, in the prior year's quarter. These results reflect Verizon's ongoing strategic focus on higher-margin and growing areas like wireless data and wireline data services.

Key Highlights

• 1Total operating revenues grew 4.6% to $28.24 billion, primarily driven by Verizon Wireless.
• 2Verizon Wireless revenue increased 8.2% to $18.27 billion, with data revenue accounting for 42.9% of service revenue.
• 3Net income attributable to Verizon was $1.69 billion, or $0.59 per diluted share, up from $1.44 billion ($0.51/share) in Q1 2011.
• 4Capital expenditures decreased to $3.56 billion from $4.36 billion in the prior year, contributing to a significant increase in free cash flow.
• 5Free cash flow increased substantially to $2.39 billion from $0.67 billion in Q1 2011, demonstrating improved operational cash generation.
• 6The company continues to invest in its 4G LTE network, with deployment in 230 markets covering over 200 million people.
• 7Long-term debt decreased to $48.48 billion from $50.30 billion at year-end 2011, while debt maturing within one year also decreased.

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