8-KOther Events

VERIZON COMMUNICATIONS INC 8-K Report, Corporate Update (Apr 4, 2006)

Filed April 4, 2006For Securities:VZ

Summary

Verizon Communications Inc. (VZ) has announced a significant strategic divestiture, entering into definitive agreements to sell its interests in Verizon Dominicana, Telecomunicaciones de Puerto Rico, Inc. (Puerto Rico Telephone), and Compañía Anónima Nacional Teléfonos de Venezuela (CANTV). These transactions represent an aggregate value of approximately $3.7 billion and are expected to have a material impact on Verizon's financial performance. These international operations collectively contributed around $0.13 to Verizon's fully diluted earnings per share in 2005. The company anticipates closing the sales of Verizon Dominicana and CANTV within approximately 120 days, while the sale of its Puerto Rico Telephone interest is slated for early 2007. This move signals a strategic shift for Verizon, likely focusing resources on its core domestic operations and potentially returning capital to shareholders.

Key Highlights

  • 1Verizon to sell interests in Verizon Dominicana, Puerto Rico Telephone, and CANTV.
  • 2Aggregate transaction value is approximately $3.7 billion.
  • 3Divested businesses contributed approximately $0.13 to VZ's 2005 fully diluted EPS.
  • 4Closings for Verizon Dominicana and CANTV expected within ~120 days.
  • 5Sale of Puerto Rico Telephone interest anticipated in early 2007.
  • 6This is a significant strategic divestiture of international assets.

Frequently Asked Questions

While the filing doesn't explicitly state the reason, this divestiture likely indicates a strategic decision to focus on core domestic operations, streamline its business, and potentially free up capital for other investments or shareholder returns.

The divested interests contributed approximately $0.13 to Verizon's fully diluted earnings per share in 2005. The proceeds from the sale itself will be a one-time cash infusion.

Verizon expects to close the sales of its interests in Verizon Dominicana and CANTV within approximately 120 days. The sale of its interest in Puerto Rico Telephone is expected to be completed in early 2007.

The combined value of the transactions for Verizon's interests in these three companies is approximately $3.7 billion.