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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: October 28, 2003
(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 (Zip Code)
offices)
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 12. Results of Operations and Financial Condition.
Attached as an exhibit hereto is a press release and financial tables dated
October 28, 2003 issued by Verizon Communications Inc. The information contained
in this report, including the exhibit attached hereto, is also intended to be
furnished under Item 9 "Regulation FD Disclosure" and shall not be deemed
"filed" for purposes of Section 18 of the Securities Exchange Act of 1934.
Non-GAAP Measures
Verizon's press release and financial tables include non-GAAP financial
information. The consolidated statements of income before special items
eliminate special items and non-recurring items of revenues, expenses, gains and
losses primarily as a result of their non-operational and/or non-recurring
nature. Management believes this presentation of operating performance assists
readers in better understanding our results of operations and trends from period
to period, consistent with management's evaluation of Verizon's consolidated and
segment results of operations for a variety of internal measures including
strategic business planning, capital allocation and compensation. Management
believes that the consolidated statements of income before special items provide
current and prior period results of operations on a comparable basis as well as
provide trends that are more indicative of future operating results than GAAP
results of operations, given the non-operational and/or non-recurring nature of
the special items removed for purposes of reporting results of operations before
special items. While some of these items have been periodically reported in
Verizon's consolidated results of operations, including significant severance
and impairment charges, their occurrence in future periods is dependent upon
future business and economic factors, among other evaluation criteria, and may
frequently be beyond the control of management. As a result of these factors,
management also provides this information externally, along with a complete
reconciliation to their comparable GAAP amounts so readers have access to the
detail and general nature of adjustments made to GAAP results. Complete
descriptions of the special items are provided in the schedules accompanying the
news release.
Management believes that free cash flow, net debt and Domestic Telecom cash
expense excluding pension/OPEB, additional non-GAAP financial measures, are also
useful to investors and other users of our financial information in evaluating
liquidity and operating financial performance. Free cash flow and net debt are
financial measures that are commonly used by readers of financial information in
assessing financial performance, including liquidity and the company's ability
to meet obligations with available cash flows and cash balances. Management uses
free cash flow information for allocating resources to debt repayment and for
other cash investing and financing activities. The definition of free cash
flows, cash from operating activities less capital expenditures and dividends
paid to Verizon's shareowners, is readily determinable from amounts provided in
Verizon's consolidated statements of cash flows. Domestic Telecom cash expense
excluding pension/OPEB is a non-GAAP operating performance measure used
internally to evaluate current and prior operating expense efficiency, as well
as assist management in evaluating the financial results of our largest
operating segment with and without a significant expense driver compared to
prior periods. Management believes this presentation assists readers in better
understanding our results of operations and trends from period to period,
consistent with management's evaluation of the Domestic Telecom segment's
results of operations for a variety of internal measures, including setting
current and future year operating targets.
Verizon Information Services revenues - conforming basis provides the prior year
impact of a change in accounting, described fully in the exhibit, if the
accounting change had occurred in the prior year. This presentation is useful to
investors and other users of our financial information in evaluating operating
financial performance consistent with the pro forma disclosures required in the
year of an accounting change, as required by GAAP.
It is management's intent to provide Non-GAAP financial information to enhance
understanding of Verizon's GAAP consolidated financial statements and should be
considered by the reader in addition to, but not instead of, the financial
statements prepared in accordance with GAAP.
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: October 28, 2003 /s/ David H. Benson
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David H. Benson
Senior Vice President and Controller
EXHIBIT INDEX
Exhibit
Number Description
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99 Press release and financial tables, dated October 28, 2003, issued by
Verizon Communications Inc.