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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 10-Q

Commission file number 333-92214

Cellco Partnership
(Exact name of registrant as specified in its charter)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes x No __

Indicate by check mark whether the registrant is an accelerated filer (as defined in Rule 12b-2 of the Exchange Act). Yes __ No x

Condensed Consolidated Statements of Operations and Comprehensive Income
Cellco Partnership (d/b/a Verizon Wireless)

See Notes to Unaudited Condensed Consolidated Financial Statements

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Condensed Consolidated Balance Sheets
Cellco Partnership (d/b/a Verizon Wireless)

See Notes to Unaudited Condensed Consolidated Financial Statements

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Condensed Consolidated Statements of Cash Flows
Cellco Partnership (d/b/a Verizon Wireless)

See Notes to Unaudited Condensed Consolidated Financial Statements

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Notes to Unaudited Condensed Consolidated Financial Statements
Cellco Partnership (d/b/a Verizon Wireless)

Cellco Partnership (the ‘‘Partnership’’), doing business as Verizon Wireless, is the nation’s leading provider of wireless communications in terms of the number of subscribers, network coverage, revenues and operating income. The Partnership provides wireless voice and data services and related equipment to consumers and business customers in its markets. The Partnership has the largest wireless network in the United States covering 49 of the 50 most populated metropolitan areas throughout the United States.

The accompanying unaudited interim financial statements have been prepared based upon Securities and Exchange Commission (“SEC”) rules and regulations for interim reporting. These rules and regulations allow certain information required under generally accepted accounting principles to be condensed or omitted, provided that the interim financial statements, when read in conjunction with the Partnership’s annual audited consolidated financial statements included in the most recent Annual Report on Form 10-K for the year ended December 31, 2002, provide a fair presentation of the Partnership’s interim financial position, results of operations and cash flows. These interim financial statements reflect all adjustments that are necessary for a fair presentation of results of operations and financial condition for the interim periods shown including normal recurring accruals and other items.

Certain reclassifications have been made to the 2002 condensed consolidated financial statements to conform to the current period presentation.

In May 2003, the FASB issued SFAS No. 150, “Accounting for Certain Financial Instruments with Characteristics of both Liabilities and Equity.” This statement establishes standards for how an issuer classifies and measures in its statement of financial position certain financial instruments with characteristics of both liabilities and equity. It requires that an issuer classify a financial instrument that is within its scope as a liability (or an asset in some circumstances) because that financial instrument embodies an obligation of the issuer. Many of those instruments were previously classified as equity. This standard is effective for financial instruments entered into or modified after May 31, 2003. For existing instruments created before the issuance date of this statement, this standard will apply effective July 1, 2003. The Partnership is currently evaluating the provisions of SFAS No. 150 to determine the impact, if any, on its financial position.

The Partnership treats wireless licenses as an indefinite life intangible asset under the provisions of SFAS No. 142, “Goodwill and Other Intangible Assets.” The wireless licenses are not amortized but rather tested for impairment. The Partnership will reevaluate the useful life determination for wireless licenses at least annually to determine whether events and circumstances continue to support an indefinite useful life.

The changes in the carrying amount of wireless licenses are as follows:

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Other intangibles, net consist of the following:

In May 2003, the Partnership acquired 50 personal communications services licenses and related network assets from Northcoast Communications LLC (“Northcoast”) for approximately $762 million in cash, which included $12 million in working capital adjustments. The licenses provide the Partnership with additional growth capacity over large portions of the East Coast and Midwest. The total population covered by the licenses is approximately 47 million.

In February 2002, the Partnership acquired certain Dobson Communications Corporation (“Dobson”) wireless operations in California, Georgia, Ohio, Tennessee, and Arizona for approximately $552 million. Other acquisitions in the six months ended June 30, 2003 and 2002 consisted of various individually immaterial partnership interests and wireless licenses.

All of the acquisitions of businesses included in these amounts were accounted for under the purchase method of accounting with results of operations included in the consolidated statements of operations from the date of acquisition. Had the acquisitions of businesses been consummated on January 1 of the year preceding the year of acquisition, the results of these acquired operations would not have had a significant impact on the Partnership’s consolidated results of operations for each of the periods presented.

The following table presents information about the Partnership’s acquisitions for the six months ended June 30, 2003 and 2002:

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Property, plant and equipment consists of the following:

Supplementary cash flow information is as follows:

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that the Partnership breached contracts with consumers, violated certain state consumer protection laws and other statutes and defrauded customers through concealed or misleading billing practices. These matters may involve indemnification obligations by third parties and/or affiliated parties covering all or part of any potential damage awards against the Partnership and/or insurance coverage. Attorney Generals in a number of states also are investigating certain sales, marketing and advertising practices.

All of the above matters are subject to many uncertainties, and outcomes are not predictable with assurance. Consequently, the ultimate liability with respect to these matters at June 30, 2003 cannot be ascertained. The potential effect, if any, on the consolidated financial condition and results of operations of the Partnership, in the period in which these matters are resolved, may be material.

In addition to the aforementioned matters, the Partnership is subject to various other legal actions and claims in the normal course of business. While the Partnership’s legal counsel cannot give assurance as to the outcome of each of these other matters, in management’s opinion, based on the advice of such legal counsel, the ultimate liability with respect to any of these actions, or all of them combined, will not materially affect the combined financial position or operating results of the Partnership.

On March 19, 2001, the Partnership awarded a three-year, approximately $5 billion supply contract to telecommunications equipment maker Lucent Technologies Inc. (“Lucent”). The contract makes Lucent the largest supplier of high-speed, high-capacity wireless infrastructure to the Partnership. As of June 30, 2003, the remaining commitment was approximately $1 billion.

Vodafone did not exercise its put rights during the 61-day period that ended August 9, 2003.

The Partnership expects to make a distribution of approximately $1.1 billion to its partners in August 2003 for the six-month period ended June 30, 2003.

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In this Management’s Discussion and Analysis of Financial Condition and Results of Operations, “we”, “our”, “us” and “the Partnership” refer to Cellco Partnership d/b/a Verizon Wireless.

The following discussion and analysis should be read in conjunction with our consolidated financial statements for the three years ended December 31, 2002 and the “Management’s Discussion and Analysis of Financial Condition and Results of Operations", all of which are contained in our Annual Report on Form 10-K (No. 333-92214).

See “Cautionary Statement Concerning Forward-Looking Statements” for a discussion of factors that could cause our future results to differ from our historical results.

We are the leading wireless communications provider in the United States in terms of the number of subscribers, network coverage, revenues and operating income. We have the largest wireless network in the United States covering 49 of the 50 most populated metropolitan areas throughout the United States. We believe our leadership position within the wireless industry will allow us to take advantage of increasing penetration and usage trends within the United States in the coming years. We provide wireless voice and data services and related equipment to consumers and business customers in our markets.

The following discussion and analysis is based upon our condensed consolidated financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States of America. The preparation of our financial statements requires management to make estimates and assumptions that affect the reported amounts of revenue and expenses, and assets and liabilities, during the periods reported. Estimates are used for, but not limited to, the accounting for: allowance for uncollectible accounts receivable, unbilled revenue, fair values of financial instruments, depreciation and amortization, useful life and impairment of assets, accrued expenses, inventory reserves, equity in income (loss) of unconsolidated entities, employee benefits, income taxes, contingencies and allocation of purchase prices in connection with business combinations. We base our estimates on historical experience, where applicable, and other assumptions that we believe are reasonable under the circumstances. Actual results may differ from those estimates.

We believe that the following critical accounting policies affect our more significant judgments and estimates used in the preparation of our consolidated financial statements:

• We recognize service revenue based upon access to the network (access revenue) and usage of the network (airtime/usage revenue), net of credits and adjustments for service discounts. We are required to make estimates for service revenue earned but not yet billed at the end of each reporting period. These estimates are based primarily upon historical minutes of use processed. Our revenue recognition policies are in accordance with the Securities and Exchange Commission’s (“SEC”) Staff Accounting Bulletin No. 101, ‘‘Revenue Recognition in Financial Statements.’’
  
  
• We maintain allowances for uncollectible accounts receivable for estimated losses resulting from the inability of our customers to make required payments. We base our estimates on the aging of our accounts receivable balances and our historical write-off experience, net of recoveries.
  
  
• When recording our depreciation expense associated with our network assets, we use estimated useful lives. As a result of changes in our technology and industry conditions, we periodically evaluate the useful lives of our network assets. These evaluations could result in a change in our useful lives in future periods.
  
  
• When testing the carrying value of our wireless licenses for impairment, we determine the fair value of our aggregated wireless licenses by subtracting from enterprise discounted cash flows (net of debt) the fair value of all of our other net tangible and intangible assets. If the residual fair value of the aggregated wireless licenses as determined above is less than the aggregated carrying amount of the licenses, an impairment will be recognized. Tests for impairment are performed at least annually (in the fourth quarter) and more often if events or circumstances warrant.
  

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In May 2003, the FASB issued SFAS No. 150, “Accounting for Certain Financial Instruments with Characteristics of both Liabilities and Equity.” This statement establishes standards for how an issuer classifies and measures in its statement of financial position certain financial instruments with characteristics of both liabilities and equity. It requires that an issuer classify a financial instrument that is within its scope as a liability (or an asset in some circumstances) because that financial instrument embodies an obligation of the issuer. Many of those instruments were previously classified as equity. This standard is effective for financial instruments entered into or modified after May 31, 2003. For existing instruments created before the issuance date of this statement, this standard will apply effective July 1, 2003. We are currently evaluating the provisions of SFAS No. 150 to determine the impact, if any, on our financial position.

We ended the second quarter of 2003 with 34.6 million subscribers, compared to 30.3 million subscribers at the end of the second quarter of 2002, an increase of 4.3 million net new subscribers, or 14.2%. Of these new subscribers, approximately 423 thousand were the result of business acquisitions, including the acquisition of Price Communications Wireless, Inc.’s (“Price”) operations in August 2002. The overall composition of our customer base as of June 30, 2003 was 90% retail postpaid, 6% retail prepaid and 4% resellers, unchanged compared to June 30, 2002.

Approximately 31.5 million, or 91.0% of our subscribers as of June 30, 2003, subscribed to code division multiple access (“CDMA”) digital service, compared to 25.0 million, or 82.5% as of June 30, 2002.

Approximately 1.3 million customers were added through internal growth during the second quarter of 2003, including approximately 80 thousand through our reseller channel. As previously reported, our net subscriber additions for the fourth quarter 2002 were reduced by 85 thousand to account for unusually low reseller channel disconnect activity that likely resulted from delayed reseller reporting. We believe approximately 23 thousand of those subscribers disconnected in the second quarter 2003 and consequently our net subscriber additions were increased by that amount in that period.

Our total average monthly churn rate, the rate at which customers disconnect service, decreased to 1.7% in the second quarter of 2003 and decreased to 1.9% for the six months ended June 30, 2003, compared to 2.3% in the second quarter of 2002 and 2.4% for the six months ended June 30, 2002, due to a significant improvement through the reseller channel as well as an improvement through the retail channel.

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Total operating revenue grew by $686 million, or 14.3%, in the second quarter of 2003 and $1.3 billion, or 14.6%, for the six months ended June 30, 2003, compared to similar periods in 2002.

Service revenue. Service revenue grew by $642 million, or 14.7%, in the second quarter of 2003 and $1.3 billion, or 14.8%, for the six months ended June 30, 2003, compared to similar periods in 2002. This increase was primarily due to the 14.2% increase in subscribers as well as an increase in average service revenue per subscriber for the three and six months ended June 30, 2003 compared to similar periods in 2002.

Average service revenue per subscriber per month increased 1.2% to $49.22 for the second quarter of 2003 and increased 2.1% to $48.23 for the six months ended June 30, 2003, compared to similar periods in 2002. These increases were primarily due to the higher proportion of subscribers choosing higher access price plans, including our America’s Choice price plans. This increase was partially offset by decreased roaming revenue as a result of rate reductions with third-party carriers and decreased long distance revenue due to the continued increase in the popularity of bundled pricing plans.

Equipment and other revenue. Equipment and other revenue grew by $44 million, or 10.4%, in the second quarter of 2003 and $92 million, or 11.5%, for the six months ended June 30, 2003, compared to similar periods in 2002. Revenue associated with certain regulatory fees, primarily the Universal Service Fund (“USF”), increased by $43 million in the second quarter of 2003 and $51 million for the six months ended June 30, 2003, compared to similar periods in 2002, mainly due to the April 2003 change in the methodology for billing these fees from a flat rate to a percentage rate as a result of a Federal Communications Commission order. The increase in the associated payments of these fees is reflected in selling, general and administrative expense. The remaining increase for the six months ended June 30, 2003 was primarily attributed to an increase in handsets sold and equipment upgrades, due to a 10.7% increase in gross retail subscriber additions for the six months ended June 30, 2003, compared to the similar period in 2002.

Operating Costs and Expenses

Cost of service. Cost of service grew by $108 million, or 15.6%, for the second quarter of 2003 and $152 million, or 11.2%, for the six months ended June 30, 2003, compared to similar periods in 2002. The increase was primarily due to increased direct telecom charges caused by increased network usage of approximately 48.8% for the second quarter of 2003 and 50.5% for the six months ended June 30, 2003, compared to similar periods in 2002. This increase was offset by lower roaming, local interconnection and long distance rates. Consequently, service margins (service revenue less cost of service, divided by service revenue) were approximately 84.0% for the second quarter of 2003 and the six months ended June 30, 2003, unchanged from the similar periods in 2002.

Cost of equipment. Cost of equipment grew by $131 million, or 20.6%, in the second quarter of 2003 and $281 million, or 23.1%, for the six months ended June 30, 2003, compared to similar periods in 2002. The increases were primarily attributed to increases in handsets sold, due to increased gross retail activations and an increase in equipment upgrades for the second quarter of 2003 and the six months ended June 30, 2003, compared to similar periods in 2002. The increases in handsets sold and equipment upgrades caused negative equipment margins (equipment and other revenue less equipment cost) to increase for the second quarter of 2003 and the six months ended June 30, 2003, compared to similar periods in 2002.

Selling, general and administrative expenses. Selling, general and administrative expenses grew by $157 million, or 8.6%, in the second quarter of 2003 and $337 million, or 9.6%, for the six months ended June 30, 2003, compared to similar periods in 2002. These increases were primarily due to a $29 million aggregate increase in sales commissions in our direct and indirect channels, for the second quarter of 2003 and a $124 million increase for the six months ended June 30, 2003, compared to similar periods in 2002, primarily related to the increase in gross subscriber additions and customer renewals in the second quarter of 2003 and the six months ended June 30, 2003, compared to similar periods in 2002. Also contributing to these increases was an increase in salary and wage expense of $72 million for the second quarter of 2003 and $98 million for the six months ended June 30, 2003

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compared to similar periods in 2002, due to an increase in the employee base, primarily in our customer care and sales channels. Costs associated with certain regulatory fees, primarily USF, increased by $43 million in the second quarter 2003 and $51 million for the six months ended June 30, 2003, compared to similar periods in 2002 (see equipment and other revenue discussion above). The revenue associated with these fees is reflected in equipment and other revenue. To the extent gross subscriber additions and customer renewals continue to increase, we expect to continue to incur increased customer acquisition and retention related expenses.

Depreciation and amortization. Depreciation and amortization increased by $172 million, or 21.9%, for the quarter ended June 30, 2003 and $297 million, or 19.0%, for the six months ended June 30, 2003, compared to similar periods in 2002. These increases were primarily due to increased depreciation expense related to the increase in depreciable assets.

Interest expense, net. Interest expense, net increased by $9 million, or 6.4%, in the second quarter of 2003 and increased by $24 million, or 8.2%, for the six months ended June 30, 2003, compared to similar periods in 2002. The increase in the second quarter of 2003 was primarily due to lower capitalized interest and higher debt levels, partially offset by a decrease in interest rates for borrowings from Verizon Communications Inc. (“Verizon Communications”) from approximately 4.8% in the second quarter of 2002 to 4.7% in the second quarter of 2003. The increase for the six months ended June 30, 2003, was primarily due to an increase in the average borrowing rates from Verizon Communications from approximately 4.6% in the first six months of 2002 to 5.3% in the first six months of 2003, partially offset by lower average debt levels for the six months ended June 30, 2003 compared to the same period in 2002.

Minority interests. Minority interests increased by $11 million, or 35.5%, for the second quarter of 2003 and $33 million, or 73.3%, for the six months ended June 30, 2003, compared to similar periods in 2002. These increases were mainly attributable to an increase in minority partners’ income for the second quarter of 2003 and the six months ended June 30, 2003, compared to similar periods in 2002, that resulted from an increase in the income from subsidiary partnerships. Also contributing to the increase was Price’s preferred interest in Verizon Wireless of the East LP, which is accounted for as a minority interest.

Provision for income taxes. The partnership is not subject to federal or state tax on income generated from markets it owns directly or through partnership entities. However, the partnership does own some of its markets through corporate entities, which are required to provide for both federal and state tax on their income. The tax provision was $65 million for the second quarter of 2003 and $110 million for the six months ended June 30, 2003. The effective tax rates were 8.2% for the second quarter of 2003, compared to 9.8% for the second quarter of 2002 and 7.5% for the six months ended June 30, 2003, compared to 8.3% for the six months ended June 30, 2002. The decrease in the effective tax rate for the three months and six months ended June 30, 2003 was mainly attributable to a decrease in the proportion of income earned through corporate entities compared to markets owned directly or through partnership entities.

Historically, we have funded our operations and other cash needs utilizing internally generated funds, intercompany and external borrowings and capital contributions. We expect to rely on a combination of internally generated, intercompany and external funds to fund continued capital expenditures, acquisitions, distributions and debt service needs. Sources of future intercompany and external financing requirements may include a combination of debt financing provided through intercompany debt facilities with Verizon Communications, borrowings from banks or debt issued in private placements or in the public markets. We believe that internally generated funds will be sufficient to fund capital expenditures, distributions and interest payments on our debt in the next several years. Internally generated funds would not be sufficient to repay principal on our debt, including demand notes owed to Verizon Communications (if we were required to repay that debt in the next several years) and other short-term debt, including the $1.5 billion of Floating Rate Notes due December 17, 2003, and would not be sufficient to honor any exercise of Vodafone Group Plc’s (“Vodafone”) put rights. We expect to refinance our outstanding debt when due with new debt financings, including debt financing provided either through intercompany borrowings, private placements, bank borrowings or public financing, and would seek other financing to honor any exercise of the put rights. While we believe we could obtain financing, Verizon Communications has no commitment to provide any financing to us, and we have no commitments from third parties.

In addition to the potential cash needs described above, we have needed and may continue to need to secure additional financing for other acquisitions of additional spectrum licenses and wireless service providers. The failure to obtain financing on commercially reasonable terms or at all could result in the delay or abandonment of our development and expansion plans or our inability to continue to provide service in all or portions of some of our markets, which could harm our ability to attract and retain subscribers.

Please see “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Liquidity and Capital Resources—Contractual Obligations and Commitments” in our Annual Report on Form 10-K for a description of our contractual obligations and commitments as of December 31, 2002. Except as noted herein, there were no material changes to our contractual obligations and commitments as of June 30, 2003 from the information set forth in the Annual Report on Form 10-K.

Our primary source of funds continues to be cash generated from operations. The $707 million increase in cash flows provided by operating activities in the first six months of 2003 compared to the similar period of 2002 was primarily due to our net income improvement and improvements in working capital.

Capital expenditures continue to be our primary use of cash. Capital expenditures of $2.1 billion remained constant for the six months ended June 30, 2003 and 2002 and were used primarily to increase the capacity of our wireless network for usage demand, to facilitate the introduction of new products and services, enhance responsiveness to competitive challenges and increase the operating efficiency and productivity of our wireless network. We expect total capital expenditures to be approximately $4.4 to $4.7 billion in 2003 and to have substantial capital requirements thereafter.

We invested $908 million in acquisitions during the first six months of 2003, including $762 million to purchase the Northcoast Communications LLC’s (“Northcoast”) licenses, $39 million to purchase a general partnership interest in Virginia 10 RSA Limited Partnership and $98 million to reimburse Verizon Communications for the purchase of a minority interest in one of its subsidiaries that was a partner in the Partnership. In the first six months of 2002, we invested $773 million in acquisitions, which included $552 million for the acquisition of some of the wireless properties of Dobson Communications Corporation.

Our total debt increased during the first six months of 2003 due to net borrowings of $1.0 billion. Our net intercompany debt borrowings totaled $1.1 billion, which included borrowings to fund the Northcoast acquisition. As of June 30, 2003, we had approximately $7.7 billion of demand notes payable primarily to Verizon Global Funding (“VGF”), a wholly-owned financing subsidiary of Verizon Communications.

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Our debt to equity ratio (including partner’s capital subject to redemption) was 35.8% at June 30, 2003, compared to 33.5% at December 31, 2002 and 35.1% at June 30, 2002.

We made distributions to our owners of $1.2 billion in the first six months of 2003. Approximately $112 million of this distribution represented a supplemental distribution and the remainder was a payment corresponding to 70.0% of our adjusted pre-tax income to our owners for the six months ended December 31, 2002, which we are required to distribute subject to financial covenants. We expect to make a distribution of approximately $1.1 billion to our owners in August 2003 for the six-month period ended June 30, 2003.

In addition, under the terms of an investment agreement entered into among Verizon Communications, Vodafone and us on April 3, 2000, Vodafone may require us to purchase up to an aggregate of $20 billion of Vodafone’s interest in the Partnership, at its then fair market value, with up to $10 billion redeemable during a 61-day period opening on June 10th and closing on August 9th in 2003 and/or 2004 and the remainder, not to exceed $10 billion in any one year, during a 61-day period opening on June 10th and closing on August 9th in 2005, 2006 and/or 2007. Verizon Communications has the right, exercisable at its sole discretion, to purchase all or a portion of this interest instead of us. However, even if Verizon Communications exercises this right, Vodafone has the option to require us to purchase up to $7.5 billion of this interest redeemable during a 61-day period opening on June 10th and closing on August 9th in 2005, 2006 and/or 2007 with cash or contributed debt. Accordingly, $20 billion of partners’ capital has been classified as redeemable on the accompanying condensed consolidated balance sheets. Vodafone did not exercise its put rights during the 61-day period that ended August 9, 2003.

Our primary market risk relates to changes in interest rates, which could impact results of operations. As of June 30, 2003, we had $11.7 billion of aggregate floating rate debt outstanding under intercompany loan facilities, the floating rate notes and our credit facility. The intercompany loans bear interest at rates that vary with Verizon Communications’ cost of funding; because a portion of its debt is fixed-rate, and because its cost of funding may be affected by events related to it, our interest rates may not adjust in accordance with market rates. A change in our interest rates of 100 basis points would change our interest expense by approximately $117 million.

We also have exposure to fluctuations in foreign exchange rates as a result of a series of sale/leaseback transactions that obligate us to make balloon payments in Japanese yen. However, we have entered into forward exchange contracts that fully hedge the foreign exchange exposure for these balloon payment obligations, although we are subject to the risk that our counterparties to these contracts fail to perform. Taking into account these hedge arrangements, as of June 30, 2003, our obligations under these balloon payments were $99 million. Without the protection of these hedge arrangements, a 10.0% increase or decrease in the value of the U.S. dollar compared to the Japanese yen would change our obligations by approximately $7 million.

On May 23, 2003, we completed the acquisition of 50 PCS licenses and related network assets from Northcoast, for approximately $762 million in cash. We signed the original purchase agreement for this transaction on December 19, 2002.

The licenses provide us with additional growth capacity over large portions of the East Coast and Midwest, including such major markets as New York, Boston, Minneapolis, MN, Columbus, OH, Providence, RI, Rochester, NY and Hartford, CT. We will use the new spectrum to meet the continued strong demand from consumer and business customers for our wireless voice and data services. The Northcoast licenses are highly attractive because they overlap some of our most densely populated service areas, enabling us to more efficiently deploy capital to provide network capacity to match growth in customer demand.

In this Management’s Discussion and Analysis, and elsewhere in this Quarterly Report and in our other public filings and statements (including oral communications), we have made forward-looking statements. These statements are based on our estimates and assumptions and are subject to risks and uncertainties. Forward-looking

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statements include the information concerning our possible or assumed future results of operations, capital expenditures, anticipated cost savings and financing plans. Forward-looking statements also include those preceded or followed by the words “may”, “will”, “expect”, “intend”, “plan”, “anticipates,” “believes,” “estimates”, “hopes” or similar expressions. 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.

Our actual future performance could differ materially from these forward-looking statements, as these statements involve a number of risks and uncertainties. You should therefore not place undue reliance on these statements. 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;
  
• an adverse change in the ratings afforded our debt securities or those of Verizon Communications by nationally accredited ratings organizations;
  
• the effects of the substantial competition that exists in our markets, which has been intensifying, and which may intensify further as a result of local number portability regulations that will allow wireless customers to retain their phone numbers when switching wireless service providers and that are anticipated to go into effect on November 24, 2003;
  
• our ability to obtain sufficient financing to satisfy our substantial capital requirements, including to fund capital expenditures, debt repayment and distributions to our owners;
  
• our ability to obtain sufficient spectrum licenses, particularly in our most densely populated areas;
  
• our ability to develop future business opportunities, including wireless data services, and to continue to adapt to the changing conditions in the wireless industry;
  
• our ability to receive satisfactory service from our key vendors and suppliers;
  
• our ability to generate additional subscribers, with acceptable levels of churn, from resellers and distributors of our service;
  
• material changes in available technology, and technology substitution that could impact the popularity and usage of our technology;
  
• our continued provision of satisfactory service to our subscribers at an acceptable cost, in order to reduce churn;
  
• the impact of continued unionization efforts with respect to our employees;
  
• regulatory developments, including new regulations that could increase our cost of doing business or reduce demand for our services;
  
• developments in connection with existing or future litigation;
  
• 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; and
  
• other factors described in our Registration Statement on Form S-4 (No. 333-92214) under the headings “Risk Factors”.
  

Information relating to market risk is included in Item 2, Management’s Discussion and Analysis of Financial Condition and Results of Operations, in the Consolidated Financial Condition section under the caption “Market Risk.”

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(a) Evaluation of disclosure controls and procedures. Our chief executive officer and chief financial officer have evaluated the effectiveness of the registrant’s disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) of the Securities Exchange Act of 1934), as of the end of the period covered by this quarterly report (the “Evaluation Date”). They have concluded that as of the Evaluation Date, the registrant's disclosure controls and procedures were adequate and effective to ensure that material information relating to the registrant and its consolidated subsidiaries would be made known to them by others within those entities, particularly during the period in which this quarterly report was being prepared.

(b) Changes in internal control over financial reporting. During the second quarter of 2003, there were no significant changes in the registrant's internal control over financial reporting that has materially affected, or is reasonably likely to materially affect our internal control over financial reporting.

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On July 23, 2003 plaintiffs filed Marlowe, J., et al. v. AT&T Corp et al., in the Superior Court of California, County of Alameda, Case No. RG03108118. This putative California class action alleges that the early termination fees charged by Verizon Wireless and other wireless service providers in the state of California are unenforceable, unlawful and unfair in violation of California Civil Code §1671, and 1750 and violate California’s unfair competition law, California Business and Professions Code §17200. Plaintiffs seek an injunction permanently enjoining the enforcement or threat of collection by defendants of these early termination fees, restitution and disgorgement. This matter may by covered in part by indemnification provisions in the Alliance Agreement.

(a) Exhibits:

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(b) Reports on Form 8 -K filed or furnished during the quarter ended June 30, 2003:

A Current Report on Form 8-K, furnished on April 22, 2003, containing a press release announcing Verizon Communications’ earnings for the first quarter of 2003 and supplemental information about their financial and other projections.

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