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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: November 17, 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 incorporation) (Commission File Number) (I.R.S. Employer Identification No.)
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.
Below is a press release issued by Verizon Communications Inc. in connection
with a presentation by Vice Chairman and President Lawrence T. Babbio Jr. on
November 17, 2003 at the UBS Eighth Annual Global Communications Conference.
Mr. Babbio reviewed the longer-term strategies on network upgrades as well as
future service offerings, and he described near-term revenue plans and cost
savings aimed at preserving current margins. He indicated that, excluding the
impact of a one-time lump-sum payment to union employees and the impact of
lower pension income net of other post-retirement benefit costs and other
adjustments, the Company expects fourth quarter Domestic Telecom margins to
improve compared to the third quarter 2003. Mr. Babbio also discussed the
Company's recent voluntary separation offer to employees, local number
portability, and deployment plans for fiber to the premises and Voice Over
Internet Protocol.
NEWS RELEASE
(VERIZON LOGO)
FOR IMMEDIATE RELEASE MEDIA CONTACT:
NOV. 17, 2003 PETER THONIS
212-395-2355
peter.thonis@verizon.com
VERIZON VICE CHAIRMAN ADDRESSES UBS CONFERENCE
NEW YORK -- At the UBS Eighth Annual Global Communications Conference
here today, Verizon Vice Chairman and President Lawrence T. Babbio Jr. addressed
a range of issues of investor interest. He reviewed the longer-term strategies
on network upgrades as well as future service offerings, and he described
near-term revenue plans and cost savings aimed at preserving current margins.
Other topics included the recent voluntary separation offer to employees,
wireless local number portability (LNP), and deployment plans for fiber to the
premises (FTTP) and Voice Over Internet Protocol (VOIP).
ON REVENUES AND GROWTH:
Babbio described the company-wide effort to drive revenue growth by
focusing on opportunities in wireless, the large business or Enterprise segment,
and "bundled" packages of local, long-distance and high-speed broadband (DSL)
connections for consumers and general
Verizon News Release, page 2
business. He noted that in 2001, 52 percent of Verizon's revenues came from the
traditional voice telephone business, a highly regulated sector of the industry
undergoing historic shifts due to technology and competition. Today, a much
bigger share of Verizon's revenue base comes from the newer growth markets, and
44 percent of Verizon's revenues come from the traditional voice business. This
changing mix has led to overall revenue growth at Verizon, which has provided
guidance of 0 to 2 percent comparable revenue growth for the year.*
ON EFFORTS TO MAINTAIN MARGINS AND REDUCE EXPENSES:
Babbio said that approximately 21,600 employees, including 5,600
union-represented employees, will leave the payroll by the end of this week as a
result of recent voluntary separation offers. This is less than 10 percent of
Verizon's total employee base. The plan was targeted primarily to managers in
the Domestic Telecom business unit nationwide, to union-represented employees in
the Mid-Atlantic and Northeast, and to employees in Verizon Information
Services.
Babbio characterized the benefits of this program to Verizon as
significant. He said that Verizon is further controlling its own destiny by
aggressively reducing expenses in those businesses affected by harmful
regulatory burdens and continued uncertainty -- allowing the company to shift
resources to growth areas in wireline and wireless, and speeding the business
transformation described above. He said the wage savings created by the program
will accelerate expense reductions required next year, taking risks out of the
company's 2004 plan.
He added that Verizon will fill a small percentage of the vacancies
this program creates, but overall, process improvements will allow Verizon to
improve productivity and capture a great deal of the savings created by this
program.
Verizon News Release, page 3
As reported in its most recent Report on Form 10-Q, Verizon is
currently analyzing data to determine the accounting charge the company expects
to take in the fourth quarter related to this program, Babbio noted. This charge
will include cash severance pay-outs and pension-related costs.
ON WIRELESS LNP:
Babbio said Verizon is well prepared for LNP. He said the value
proposition that Verizon Wireless offers to customers combined with the
unrivaled quality of the Verizon Wireless network have produced a rapidly
growing, profitable business that puts the company in a strong position as the
Nov. 24 deadline approaches. He added that LNP represents an opportunity for
Verizon Wireless to reinforce its leadership position, and said Verizon is
committed to make the experience as easy as possible for both wireline and
wireless customers.
In terms of Verizon's wireline business, Babbio said that Verizon's
customer research does not indicate any significant pent-up demand for porting
numbers from wireline to wireless phones.
ON FIBER TO THE PREMISES AND VOICE OVER IP:
Babbio announced that Verizon has selected vendors to provide the
fiber-optic and electronic equipment for the company's deployment of FTTP
systems (see related press release today). He also reiterated plans to have the
new technology pass 1 million homes across nine states in 2004, without an
increase to historical capital spending levels. He said wireline capital expense
will be approximately $7 billion this year, and the company expects it to remain
at approximately the same level in 2004.
Verizon News Release, page 4
Babbio described plans to begin rolling out Voice Over Internet
Protocol (VOIP) offerings in the second quarter 2004, targeting DSL users and
the consumer market.
*- See http://investor.verizon.com/financial/quarterly/VZ/3Q2003/ for a
reconciliation to generally accepted accounting principles (GAAP) for the
non-GAAP measure of comparable revenue growth mentioned in this press release.
A Fortune 10 company, Verizon Communications (NYSE:VZ) is one of the
world's leading providers of communications services, with approximately $67
billion in revenues and 221,000 employees. Verizon companies are the largest
providers of wireline and wireless communications in the United States, with
more than 139 million access line equivalents and 36 million Verizon Wireless
customers. Verizon is the third largest long-distance carrier for U.S.
consumers, with nearly 16 million long-distance lines. The company is also the
largest directory publisher in the world, as measured by directory titles and
circulation. Verizon's international presence includes wireline and wireless
communications operations and investments, primarily in the Americas and Europe.
For more information, 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 and industry conditions and
labor matters, including workforce levels and labor negotiations, and any
resulting financial and/or operational impact, 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; the ability of Verizon Wireless to continue to obtain
sufficient spectrum resources; 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: November 18, 2003 /s/ David H. Benson
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David H. Benson
Senior Vice President
and Controller