1st Quarter Earnings Review

1

• 1st Quarter Earnings Review
• April 24, 2001
• Fred Salerno

2
Agenda

• 1st Quarter Review
• Consolidated Results
• Segment Results
• 2001 Guidance
• Earnings
• Revenue
• Capital Expenditures

3

Results Review

• Growth
• Revenues 16.3B 16.9
• Net Income EPS
• Reported 1,572 .58 5.5
• Adjustments
• Merger transition costs 88 .03
• FAS 133 acctg. change
• Cumulative to 1/1/01 182 .07
• Current period 114 .04
• Adjusted 1,956 .72 4.3

Excellent Results for 1st Quarter
4

1st Quarter EPS (Adjusted for Wireless JV )

• 1Q01 1Q00 Growth
• Adjusted EPS .72 .69 4.3
• Less JV goodwill (.05)
• .72 .64 12.5

5

1st Quarter 2001 Highlights

• Growth
• Revenues (Adjusted for JV ) 7.0
• Data 27.6
• Wireless 17.3
• DSL subscribers 720,000
• LD customers 5.2M
• Wireless nets adds 518,000

Solid Operational Execution
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Consolidated Results (Adjusted for Wireless JV )
Revenues
Expenses
12.5B
11.9B
16.3B
15.2B
7.0Growth
4.7Growth
1Q00
1Q01
1Q00
1Q01
Op. Income
EBITDA
7.1B
3.8B
6.3B
3.3B
15.2Growth
13.1Growth
1Q00
1Q01
1Q00
1Q01
Volume Growth Productivity Driving Profitability
7
Domestic Telecom Highlights
Revenues
Expenses
10.9B
10.6B
8.2B
8.1B
2.9Growth
1.6Growth
1Q00
1Q01
1Q00
1Q01
Op. Income
EBITDA
5.0B
2.7B
2.5B
4.6B
7.0Growth
7.9Growth
1Q00
1Q01
1Q00
1Q01
Focus and Performance
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Telecom - Key Growth Drivers
Data Revenues M
1,701
1,333
27.6Growth
1Q00
1Q01
DS0 Equivalents
Voice Grade Equivalents
49.1M
112.0M
93.4M
30.9M
58.7Growth
19.8Growth
3/31/00
3/31/01
3/31/01
3/31/00
Continued Strong Demand for Hi-Capacity Services
9
Telecom - Key Growth Drivers
Long Distance Customers
DSL Subscribers
720,000
5.2M
3.6M
150,000
3/31/00
3/31/01
3/31/00
3/31/01
Restated to exclude discontinued CLEC operations
Growth Initiatives Contributing
10

Domestic Wireless Highlights (Adjusted for
Wireless JV )
Total Revenues
Expenses
3.6B
4.0B
3.1B
3.4B
17.3Growth
14.7Growth
1Q00
1Q01
1Q00
1Q01
Op. Income
EBITDA
490M
1.4B
1.2B
349M
20.3Growth
40.4Growth
1Q00
1Q01
1Q00
1Q01
EBITDA Margins Expand
11

Wireless Subscriber Base

• 12/31/00 Subscriber Base 27.5M
• Previously Announced Net Adds 0.5M
• 3/31/01 Subscriber Base 28.0M
• Subscriber base adjustment (0.9M)
• Revised 3/31/01 Subscriber Base 27.1M

Driven primarily by billing system consolidation
and reconciliation
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Wireless - Key Growth Drivers
Subscribers Gross Adds
Digital Subscribers
2.8M
16.3M
2.6M
9.9M
65Growth
8Growth
1Q00
1Q01
1Q01
1Q00
Service ARPU
Cash Expense per Subscriber
29
29
46
45
1Q00
1Q01
1Q00
1Q01
Strong Execution
13
International Highlights
EBITDA
Revenues
143M
527M
129M
457M
10.9Growth
15.3Growth
1Q00
1Q01
1Q00
1Q01
Proportionate Wireless Subs.
Equity Income
217M
8.3M
172M
5.9M
26.2Growth
41.1Growth
1Q00
3/31/01
3/31/00
1Q01
Solid Quarter
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Information Services Highlights
Revenues
Expenses
453M
437M
779M
789M
1.3Growth
3.5Decrease
1Q00
1Q01
1Q00
1Q01
EBITDA
EBITDA Margin
47.3
373M
44.3
345M
300 basis pt. increase
8.1Growth
1Q00
1Q01
1Q00
1Q01
Aggressive Cost Containment
15
1st Quarter Summary

• Excellent 1Q earnings
• Solid revenue growth
• Outstanding expense controls
• Superb performance in DSL and LD
• Strong wireless contract revenues

Focus on execution
16

2001 EPS (Adjusted for Wireless JV )

• 2001 2000
• Adjusted EPS 3.13 - 3.17 2.91 8
• Less JV goodwill (.05)
• 3.13 - 3.17 2.86 10

VZ Committed to Achieving EPS Within Stated Range
17
2001 Revenues

• 2001 Revenue Growth Target 8 -
  10
• Adjusted for Wireless JV approx. 7

18
2001 Cap-Ex Guidance - Revised
18.5B
17.6B
17.5B
4.7B
4.6B
4.3B
Wireless
Telecom
12.1B
12.6B
12.0B
Intl / IS/ Corporate
1.2B
1.2B
.9B
2001Orig. Estimate
2001Revised Estimate
2000
Focused on Capital Efficiency
19
2001 Financial Outlook

• Excellent 1st Quarter performance
• Solid underlying business volumes
• Excellent expense controls
• Merger synergy savings
• Focus on capital efficiency

20
Safe Harbor Statement

• This presentation contains statements about
  expected future events and financial results
  that are forward-looking and subject to risks and
  uncertainties. For thosestatements, 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 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 an adverse change in the
  ratings afforded our debt securities by
  nationally accredited ratings organizations the
  final outcome of federal, state, and local
  regulatory initiatives and proceedings, including
  arbitration proceedings, and judicial review of
  those initiatives and proceedings, pertaining to,
  among other matters, the terms of
  interconnection, access charges, universal
  service, and unbundled network element and resale
  rates the extent, timing, success, and overall
  effects of competition from others in the local
  telephone and toll service markets the timing
  and profitability of our entry into the
  in-region long distance market our ability to
  combine former Bell Atlantic and GTE operations,
  satisfy regulatory conditions and obtain revenue
  enhancements and cost savings following the
  merger the profitability of our entry into the
  broadband access market the ability of Verizon
  Wireless to combine operations and obtain revenue
  enhancements and cost savings our ability to
  convert our ownership interest in Genuity Inc.
  into a controlling interest consistent with
  regulatory conditions, and Genuitys ensuing
  profitability and lastly, our accounting
  assumptions are subject to review by regulatory
  agencies, including the SEC, and changes in the
  assumptions as required by those agencies or any
  changes in the accounting rules or their
  application could result in an impact on earnings.