VZC Verizon Comms

 
TIDMVZC 
 
Verizon Sharpens Strategic Focus and Returns Value to Investors With 
                     Transactions Valued at $15.54 Billion 
 
 
Selling Wireline Assets in Three States to Frontier for $10.54 Billion; 
 
Generating $5 Billion of Initial Cash for Wireless Towers in Transaction With 
American Tower; 
 
$5 Billion Share Repurchase 
 
 
NEW YORK, Feb. 5, 2015 -- Verizon Communications Inc. (NYSE, Nasdaq: VZ) today announced 
two major transactions designed to further sharpen its strategic focus: 
 
  * Verizon has reached a definitive agreement to sell its local wireline 
    operations serving customers in California, Florida and Texas to Frontier 
    Communications Corporation (Nasdaq: FTR). Frontier will pay Verizon 
    approximately $10.54 billion (approximately $9.9 billion in cash, plus $600 
    million in assumed debt) for the business and related assets in these 
    states. 
  * Verizon has agreed to lease the rights to over 11,300 of its company-owned 
    wireless towers to American Tower Corporation (NYSE: AMT), which will also 
    purchase approximately 165 Verizon towers, for a total upfront payment of 
    approximately $5 billion. 
 
At the same time, Verizon is returning a significant amount of capital to its 
shareholders through a $5 billion accelerated share-repurchase program entered 
into today. 
 
Verizon Chairman and CEO Lowell McAdam said: "Our long-standing strategy has 
been to consistently invest in our networks, improve our customers' experience, 
and develop new products and services while delivering profitable growth. These 
transactions will further strengthen Verizon's focus on extending our industry 
leadership position in our core markets and return significant value to our 
shareholders." 
 
Details of the Verizon - Frontier Transaction 
 
Selling wireline operations in California, Florida and Texas to Frontier will 
concentrate Verizon's wireline operations on the East Coast. Verizon will focus 
on further penetrating the market for its FiOS business across a contiguous 
footprint in Eastern states. 
 
Frontier currently has access lines in 28 states, providing an array of voice, 
broadband and video services, including landline assets purchased from Verizon 
in 2009-2010. 
 
Maggie Wilderotter, Frontier's chairman and chief executive officer, said: 
"These properties align with Frontier's disciplined strategic focus and enhance 
our footprint with rich fiber-based assets. We look forward to building on the 
strong results Verizon has delivered in these three states. Frontier has a 
solid track record of successful integrations, and we welcome the new employees 
who will help us implement our local engagement model in these markets." 
 
Completion of the transaction is subject to customary closing conditions 
including, among others, obtaining certain regulatory approvals. The companies 
are targeting completing the transaction in the first half of 2016. 
 
Approximately 11,000 Verizon company employees are expected to continue 
employment with Frontier after the transaction. Frontier and Verizon will 
provide a smooth transition for these employees. 
 
As they did during the companies' previous transaction, Verizon and Frontier 
transition teams will work to ensure that customer accounts, billing 
information and other assets from the operations are successfully transferred 
to Frontier and that the transition is seamless for customers as well as 
employees. 
 
The operations Frontier will acquire consist of all of Verizon's local wireline 
operating territories in California, Florida and Texas. At the end of 
fourth-quarter 2014, these operations served approximately 3.7 million voice 
connections; approximately 2.2 million high-speed data customers, including 
approximately 1.6 million FiOS Internet customers; and approximately 1.2 
million FiOS Video customers. 
 
The transaction includes Verizon's FiOS Internet and Video customers, switched 
and special access lines, as well as its high-speed Internet service and 
long-distance voice accounts in these three states. Frontier will continue to 
provide video services in these states after the completion of the transaction. 
 
The transaction does not include the services, offerings or assets of other 
Verizon businesses, such as Verizon Wireless and Verizon Enterprise Solutions. 
 
As of the end of fourth-quarter 2014, the consumer and mass business wireline 
operations that Verizon is retaining provided service in nine states and the 
District of Columbia and had approximately 16.1 million wireline voice 
connections; 7.0 million high-speed data customers, including approximately 5.1 
million FiOS Internet customers; and 4.5 million FiOS Video customers. The 
states in Verizon's contiguous consumer wireline footprint are Connecticut, 
Delaware, Maryland, Massachusetts, New Jersey, New York, Pennsylvania, Rhode 
Island, Virginia and Washington, D.C. 
 
Credit Suisse, Guggenheim Securities and PJT Partners advised Verizon on the 
transaction. 
 
Details of the Verizon - American Tower Transaction 
 
In the wireless tower transaction, American Tower will have exclusive rights to 
lease and operate over 11,300 Verizon cell towers, a significant majority of 
the towers the company currently owns. In addition, Verizon will sell 
approximately 165 towers outright. 
 
The average term of the lease rights is about 28 years. As the leases expire, 
American Tower will have fixed-price purchase options to acquire these towers 
based on their anticipated fair market values at the end of the lease terms. 
 
Verizon will sublease capacity on the towers from American Tower for a minimum 
of 10 years for $1,900 per month per site, with annual rent increases of 2 
percent. Verizon will have customary renewal options that could potentially 
extend the full term of the sublease to 50 years. 
 
Verizon will have access to additional reserve capacity on the towers for 
future use and expects to use this additional capacity to help continuously 
improve the nation's most reliable network. 
 
During the terms of the leases, American Tower will have full operating rights 
to and responsibilities for the towers. American Tower's rights will include 
the ability to sublease other available space to other companies. 
 
Verizon expects the transaction to close by mid-2015, subject to standard 
closing conditions. 
 
$5 Billion Returned to Shareholders Through Share Repurchase 
 
Under the terms of the accelerated stock repurchase (ASR) agreement, Verizon 
will repurchase $5 billion of its common stock and expects to receive an 
initial delivery of shares having a value of approximately $4.25 billion. 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. 
 
Final settlement of the transaction under the ASR agreement, including delivery 
of the remaining shares that Verizon expects to receive, is scheduled to occur 
in the second quarter of 2015. Verizon is funding the ASR with cash on hand. 
 
The ASR is in addition to Verizon's three-year share repurchase program 
announced on March 7, 2014. Under the three-year program, Verizon is authorized 
to repurchase 100 million shares of its common stock. That program is set to 
terminate on Feb. 28, 2017, or when the aggregate number of shares purchased 
under the program reaches 100 million, whichever date is earlier. To date, no 
shares have been repurchased under the program. 
 
Verizon Webcast Today 
 
Verizon will provide further details of these transactions during a webcast at 
5:15 p.m. Eastern Time today on Verizon's Investor Relations website, 
www.verizon.com/about/investors/, where presentation materials have been 
posted. 
 
Verizon Communications Inc. (NYSE, Nasdaq: VZ), headquartered in New York, is a 
global leader in delivering broadband and other wireless and wireline 
communications services to consumer, business, government and wholesale 
customers. Verizon Wireless operates America's most reliable wireless network, 
with more than 108 million retail connections nationwide. Verizon also provides 
converged communications, information and entertainment services over America's 
most advanced fiber-optic network, and delivers integrated business solutions 
to customers worldwide. A Dow 30 company with more than $127 billion in 2014 
revenues, Verizon employs a diverse workforce of 177,300. For more information, 
visit www.verizon.com/news/. 
 
VERIZON'S ONLINE NEWS CENTER: Verizon news releases, executive speeches and 
biographies, media contacts and other information are available at Verizon's 
online News Center at www.verizon.com/news/. The news releases are available 
through an RSS feed. To subscribe, visit www.verizon.com/about/rss-feeds/. 
 
Forward-Looking Statements 
 
In this communication 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 in our filings with the 
Securities and Exchange Commission (the "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. 
 
SOURCE  Verizon Communications Inc. 
 
CONTACT: Media Contacts: Alberto Canal, 908-559-6367, 
alberto.c.canal@verizon.com; Harry Mitchell, 304-356-3404, 
harry.j.mitchell@verizon.com; Bob Varettoni, 908-559-6388, 
robert.a.varettoni@verizon.com 
 
 
 
END 
 

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