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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report: December 5, 2002
(Date of earliest event reported)
VERIZON COMMUNICATIONS INC.
(Exact name of registrant as specified in its charter)
Delaware 1-8606 23-2259884
(State or other jurisdiction of (Commission File Number) (I.R.S. Employer Identification No.)
incorporation)
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) 395-2121
Not applicable
(Former name or former address, if changed since last report)
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Item 9. Regulation FD Disclosure.
Set forth below is a press release issued by Verizon Communications
Inc. on December 5, 2002.
NEWS RELEASE
[VERIZON LOGO]
FOR IMMEDIATE RELEASE MEDIA CONTACT:
DEC. 5, 2002 BOB VARETTONI
212-395-7726
robert.a.varettoni@verizon.com
VERIZON ANNOUNCES PLAN TO EXPENSE STOCK OPTIONS AND
DISCLOSES EFFECTS OF PENSION AND OTHER RETIREE BENEFIT COSTS
NEW YORK - Verizon Communications Inc. (NYSE:VZ) announced today that
it will expense the fair value of employee stock options granted on or after
Jan. 1, 2003.
The company also announced the expected amount of 2002 pension income,
net of post-retirement benefit costs, and estimated the amount of income it
expects to recognize in connection with these plans in 2003.
Verizon's 2002 earnings per share (EPS) guidance of $3.05 to $3.09
remains unchanged.
EMPLOYEE STOCK OPTIONS
The company estimates that, under current accounting rules, expensing
stock options on a prospective basis will result in a charge to earnings of 2
cents per diluted share in 2003.
"Today we informed our Board of Directors of our intention to expense
employee stock options," said Verizon Chief Financial Officer Doreen Toben.
"Options remain an important part
Verizon News Release, page 2
of our long-term incentive compensation program. Although we have always
disclosed the effect of options in our annual reports and public filings, this
is an issue of investor interest and we believe that now is the right time to
begin including these costs in our results."
PENSION AND OTHER POST-RETIREMENT BENEFIT EFFECTS
For 2002, the company expects to recognize non-cash pension income, net
of post-retirement benefit costs, of approximately 35 cents per share. In 2003,
the company anticipates that non-cash pension income, net of post-retirement
benefit costs, will decline between 27 and 33 cents per share, resulting in net
pension income of 2 to 8 cents per share in 2003.
Toben said that current conditions in the securities markets will cause
the company to lower its expected return on plan assets and discount rate
assumption for 2003. This, coupled with rising medical and prescription drug
costs that will increase the medical cost trend rate assumption, will result in
the decrease in pension income in 2003.
"From a cash perspective, we do not foresee a need to add funding to
our pension plans overall in 2003," Toben said. "Our plans are currently
adequately funded, and we expect that status to remain intact throughout 2003.
Other post-retirement benefits, principally health care and life insurance
obligations, are on a pay-as-you-go basis and will continue to be funded from
our operating cash flow."
SEIDENBERG: CONFIDENCE IN 2003 OUTLOOK
Verizon Chief Executive Officer Ivan Seidenberg said, "As we look ahead
to 2003, we will remain focused on operational execution and on further
distinguishing ourselves from the other companies in the telecommunications
sector. Just as we are performing very well in a difficult environment this
year, we are confident in our ability to grow operationally in 2003.
Verizon News Release, page 3
We are committed to continued market leadership in wireless, as well as
continued success in sales of long distance, DSL and product bundles in the
consumer market and the success of our new Enterprise Advance initiative in the
business market."
Verizon plans to provide more complete earnings and financial guidance
for 2003 on Jan. 29, 2003, when the company releases its fourth-quarter and
full-year 2002 results.
Verizon Communications (NYSE:VZ) is one of the world's leading
providers of communications services. Verizon companies are the largest
providers of wireline and wireless communications in the United States, with
135.0 million access line equivalents and 31.5 million Verizon Wireless
customers. Verizon is also the largest directory publisher in the world. With
more than $67 billion in annual revenues and more than 236,000 employees,
Verizon's global presence extends to more than 35 countries in the Americas,
Europe, Asia and the Pacific. For more information on Verizon, visit
www.verizon.com.
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VERIZON'S ONLINE NEWS CENTER: Verizon news releases, executive speeches and
biographies, media contacts and other information are available at Verizon's
News Center on the World Wide Web at www.verizon.com/news. To receive news
releases by e-mail, visit the News Center and register for customized automatic
delivery of Verizon news releases.
NOTE: This press release contains statements about expected future events and
financial results that are forward-looking and subject to risks and
uncertainties. 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 could affect future results
and could cause those results to differ materially from those expressed in the
forward-looking statements: the duration and extent of the current economic
downturn; materially adverse changes in economic conditions in the markets
served by us or by companies in which we have substantial investments; material
changes in available technology; technology substitution; an adverse change in
the ratings afforded our debt securities by nationally accredited ratings
organizations; the final results of federal and state regulatory proceedings
concerning our provision of retail and wholesale services and judicial review of
those results; the effects of competition in our markets; our ability to satisfy
regulatory merger conditions and obtain combined company revenue enhancements
and cost savings; the ability of Verizon Wireless to achieve revenue
enhancements and cost savings, and obtain sufficient spectrum resources; the
outcome of litigation concerning the FCC NextWave spectrum auction; our ability
to recover insurance proceeds relating to equipment losses and other adverse
financial impacts resulting from the terrorist attacks on Sept. 11, 2001; and
changes in our 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.
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.
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(Registrant)
Date: December 5, 2002 /s/ John F. Killian
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John F. Killian
Senior Vice President and Controller