SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
----------------
SCHEDULE 13D
(Rule 13d-101)
INFORMATION TO BE INCLUDED IN STATEMENTS FILED PURSUANT
TO RULE 13d-1(a) AND AMENDMENTS THERETO FILED PURSUANT TO
RULE 13d-2(a)
Under the Securities Exchange Act of 1934
VERIZON COMMUNICATIONS INC.
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(Name of Issuer)
COMMON STOCK, PAR VALUE $1.00 PER SHARE
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(Title of Class of Securities)
228227104
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(CUSIP Number)
SANTA MONICA PARTNERS, L.P.
1865 Palmer Avenue
Larchmont, NY 10538
914-833-0875
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(Name, Address and Telephone Number of Person
Authorized to Receive Notices and Communications)
N/A
-----------------------------------------------------------
(Date of Event that Requires Filing of This Statement)
(Continued on following pages)
(Page 1 of 7 Pages)
CUSIP No. 936750108 13D/A
Page 2 of 7 Pages
___________________________________________________________
1 NAME OF REPORTING PERSONS
I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS (ENTITIES
ONLY)
SANTA MONICA PARTNERS, L.P.
13-3100474
___________________________________________________________
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP
(a) [X]
(b) [_]
___________________________________________________________
3 SEC USE ONLY
___________________________________________________________
4 SOURCE OF FUNDS
WC
___________________________________________________________
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS
REQUIRED PURSUANT TO ITEMS 2(d) OR 2(e) [_]
___________________________________________________________
6 CITIZENSHIP OR PLACE OF ORGANIZATION
NEW YORK
___________________________________________________________
7 SOLE VOTING POWER
NUMBER OF N/A
SHARES --------------------------------------
BENEFICIALLY 8 SHARED VOTING POWER
OWNED BY N/A
EACH REPORTING --------------------------------------
PERWON WITH 9 SOLE DISPOSITIVE POWER
OWNED BY N/A
--------------------------------------
10 SHARED DISPOSITIVE POWER
N/A
_____________________________________________________________
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING
PERSON
N/A (LESS THAN 5%)
______________________________________________________________
CUSIP No. 936750108 13D/A
Page 3 of 7 Pages
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11)
EXCLUDES CERTAIN SHARES [_]
___________________________________________________________
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
N/A
___________________________________________________________
14 TYPE OF REPORTING PERSON
PN
__________________________________________________________
1 NAME OF REPORTING PERSONS
I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS (ENTITIES
ONLY)
SMP ASSET MANAGEMENT LLC
___________________________________________________________
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP
(a) [X]
(b) [_]
___________________________________________________________
3 SEC USE ONLY
___________________________________________________________
4 SOURCE OF FUNDS
OO
___________________________________________________________
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS
REQUIRED PURSUANT TO ITEMS 2(d) OR 2(e) [_]
___________________________________________________________
6 CITIZENSHIP OR PLACE OF ORGANIZATION
DELAWARE
___________________________________________________________
7 SOLE VOTING POWER
NUMBER OF N/A
SHARES --------------------------------------
BENEFICIALLY 8 SHARED VOTING POWER
OWNED BY N/A
EACH REPORTING --------------------------------------
PERWON WITH 9 SOLE DISPOSITIVE POWER
OWNED BY N/A
--------------------------------------
10 SHARED DISPOSITIVE POWER
N/A
_____________________________________________________________
CUSIP No. 936750108 13D/A
Page 4 of 7 Pages
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING
PERSON
N/A
______________________________________________________________
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11)
EXCLUDES CERTAIN SHARES [_]
___________________________________________________________
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
N/A
___________________________________________________________
14 TYPE OF REPORTING PERSON
OO (LLC)
__________________________________________________________
The inclusion of SMP Asset Management LLC in this Statement
shall not be construed as an admission that such party is,
for purposes of Section 13(d) of the Securities Exchange
Act of 1934, the beneficial owner of any securities covered
by this Statement.
VERIZON COMMUNITCATIONS INC. SCHEDULE 13D
Item 1. Security and Issuer.
This statement on Schedule 13D/A (this "Statement")
relates to the common stock with $1.00 par value (the
"Shares") of Verizon Communications Inc. (the "Issuer").
The principal offices of the Issuer are located at 1095
Avenue of the Americas, New York, New York 10036.
Item 2. Identity and Background.
(a) Pursuant to Rule 13d-1(k)(1) promulgated under the
Securities Exchange Act of 1934, this Statement is being
filed by Santa Monica Partners, L.P., a New York limited
partnership ("Santa Monica Partners") 1865 Palmer Avenue,
Larchmont, NY 10538.
Item 3. Source and Amount of Funds or Other Consideration.
N/A
Item 4. Purpose of Transaction.
On June 21, 2004 Santa Monica Partners wrote a letter to
Mr. Ivan G. Seidenber, Chairman and CEO, of Verizon
CUSIP No. 936750108 13D/A
Page 5 of 7 Pages
Communications Inc. Given the fact that Verizon is
determined to shed some of its assets to raise cash and
reduce debt, Santa Monica Partners has made a suggestion on
how to easily enable Verizon to obtain at least $2 to $4
billion with the sale of a minuscule asset.
Item 5. Interest in Securities of the Issuer.
(a) N/A Less than 5% ownership
Item 6. Contracts, Arrangements, Understandings or
Relationships with Respect to Securities of the Issuer.
None
Item 7. Material to be filed as Exhibits.
Exhibit 1:
June 21, 2004 letter to Mr. Ivan G. Seidenber, Chairman
and CEO, of Verizon Communications Inc.
SIGNATURE
After reasonable inquiry and to the best of my knowledge
and belief, I certify that the information set forth in
this statement is true, complete and correct.
Dated: June 30, 2004
SANTA MONICA PARTNERS, L.P.
By: SMP ASSET MANAGEMENT LLC
By: /s/LAWRENCE J.GOLDSTEIN
----------------------------------------
Lawrence J. Goldstein, President
SMP ASSET MANAGEMENT LLC
By: /s/LAWRENCE J. GOLDSTEIN
----------------------------------------
Lawrence J. Goldstein, President
Attention. Intentional misstatements or omissions of
fact constitute federal criminal violations
(see 18 U.S.C. 1001).
CUSIP No. 936750108 13D/A
Page 6 of 7 Pages
Exhibit 1:
June 21, 2004
Mr. Ivan G. Seidenberg, Chairman/CEO
Verizon Communications Inc.
1095 Avenue of the Americas
New York, NY 10036
Re: Put $4 billion in Verizon's Pocket
Dear Mr. Seidenberg:
I have a suggestion that will enable you to easily obtain at
least $2 to $4 billion for Verizon.
Verizon Communications Inc. (Verizon of the East L.P.) is the 85%
general and managing partner of the Orange County - Poughkeepsie
Limited Partnership (OCP).
The OCP partnership is arguably one of the fastest growing, most
profitable and financially strongest companies, in the world.
In 2003 OCP had Net Income of $121.6 million and revenue of
$144.6 million. In the ten years 1993-2003, OCP Net Income
recorded a CAGR of 43.6%, and in 2003 achieved an incredible 84%
profit margin and a ROE of 215%. The ROE is extraordinary
because the balance sheet was vastly over-capitalized. Partners'
capital of $49.7 million was 98.6% of total assets of $50.4
million. EBITDA in 2003 was $125 million.
Clearly the OCP business is unique. It is a one of a kind
entity.
Given your determination to shed some of Verizon's assets to
raise cash and reduce debt, e.g. the sale of the Hawaiian
operations to the Carlyle Group and the Canadian phone operations
being on the block for a combined $2.7 billion, we would like to
suggest you have an extraordinary opportunity with the OCP to
raise similar if not greater $billions from the sale of a
minuscule asset.
Investors and bankers with whom I have discussed the OCP have
suggested that were Verizon to do an IPO of this partnership, it
could command a P/E of 40 on an after tax basis. Based on the Q-
1 2004 run rate of $147 million of pretax net income, which would
equal about $96 million of net income (35% effective tax rate), a
40 multiple would place a valuation on the OCP of $3.8 billion.
Verizon's 85% share would be worth $3.26 billion.
Even were one to assume Verizon had to pay a full corporate tax
on all of the $3.26 billion you would end up with $2.1 billion in
cash.
CUSIP No. 936750108 13D/A
Page 7 of 7 Pages
On an EBITDA basis of the Q-1 2004, $149 million run rate, a 12
multiple would value the OCP at $1.8 billion. Verizon's share
would amount to $1.5 billion.
If structured properly as a pass through vehicle, nearly all of
the partnership's $149 million of EBITDA (less a small amount of
capex) could be paid out in dividends.
In the current interest rate environment a 7% yield would be very
attractive to investors. Especially so to pension funds, 401Ks,
IRAs, and the like. On a 7% earnings yield basis (14.3 multiple)
you would have a $2.1 billion offering and Verizon's 85% stake
would bring you $1.8 billion in cash.
Incidentally your two 7.5% limited partners in the OCP, FairPoint
Communications and Warwick Valley Telephone Company, would each
also undoubtedly be thrilled with their share of this grand and
magnificent return on their very nominal investment.
While this may come to you as free advice, and we know that most
folks say that such advice is often worth its cost, we think you
have a very unusual asset that you today may be able to
capitalize on in a very major way.
I share this suggestion with you with the hope that if used and
if successful of being recognized with a normal and usual
investment banking finders fee payment for the idea and
suggestion, which I repeat and we will trust would be payable
only in the event of successful deal.
I would appreciate and welcome discussing this further with you,
Warmly,
Lawrence J. Goldstein
LJG/es