What is the outlook for Verizon's Wireline segment?

Verizon expects the economic downturn to continue impacting its Wireline segment, with margins expected to decline sequentially in the third quarter of 2009, reaching a low point in that quarter. However, the company anticipates some margin improvement in the fourth quarter as cost-reduction initiatives begin to yield benefits.

What are Verizon's growth expectations for its wireless and FiOS businesses?

Verizon is optimistic about growth in its wireless segment, projecting the addition of one million or more wireless customers per quarter for the next several quarters. For its FiOS service, the company is targeting the addition of one million customers per year as availability expands and market penetration increases.

How does Verizon plan to manage its debt and capital expenditures?

Verizon plans to reduce its overall leverage ratio from 1.8 times to approximately 1.3 times over the next several years. The company is also focused on capital expenditure management, expecting 2009 expenditures (excluding Alltel-related spending) to be at least $500 million lower than 2008, and plans to further reduce capital spending in absolute terms by 2011.

What is the expected financial impact of selling wireless properties?

Verizon estimates that the sale of overlapping wireless properties, which include about 2.3 million customers across 105 markets, will impact annual earnings from continuing operations before special items by up to 6 cents per share once the transactions are completed.

VZ 8-K: Regulation FD — Sep 11, 2009

Summary

Verizon Communications Inc. (VZ) filed an 8-K on September 10, 2009, detailing remarks made by its CFO at a conference. The company emphasized its strong cash flow and balance sheet, highlighted by a recent dividend increase, signaling commitment to shareholders and future investment. Despite ongoing economic pressures impacting business markets, particularly the Wireline segment, Verizon anticipates a low point in Wireline margin performance in Q3 2009, with expected sequential improvement in Q4 due to cost-reduction initiatives. The company remains optimistic about future growth drivers, projecting over one million wireless customer additions per quarter and one million FiOS customers annually. Verizon is on track to achieve its Alltel cost synergy targets. While access line losses are expected to continue at approximately 10% annually, Verizon projects greater cash flow from operations in the second half of 2009 and reiterates its commitment to reducing capital expenditures in absolute terms by 2011. The company also plans to reduce its overall leverage ratio significantly over the next several years.

Key Highlights

1Verizon's cash flow and balance sheet are strong, with a recent dividend increase demonstrating commitment to shareholders and growth investment.
2Economic conditions are expected to continue pressuring revenues and margins in the second half of 2009, particularly in the Wireline segment.
3The company forecasts the Wireline segment's margin performance to hit a low in Q3 2009, with improvement expected in Q4 due to cost-reduction efforts.
4Verizon expects to add over one million wireless customers per quarter in the near future and targets one million FiOS customers annually.
5The company is on track to achieve its stated Alltel cost synergy targets.
6Verizon anticipates ongoing annual access line losses of approximately 10%.
7Capital expenditures for 2009 (excluding Alltel) are projected to be at least $500 million less than the 2008 total of $17.2 billion, with further reductions planned for 2011.

VERIZON COMMUNICATIONS INC 8-K Report, Regulation FD Disclosure (Sep 11, 2009)

Summary

Key Highlights

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