31 cents in diluted earnings per share (EPS), including 25 cents per share in non-operational items, compared with 3Q 2009 EPS of 41 cents.

$25.2 billion in cash flow from operations year-to-date; $13.4 billion in free cash flow (non-GAAP) year-to-date, up 25.3 percent.

226,000 net FiOS Internet and 204,000 net FiOS TV customer additions; 3.9 million total FiOS Internet customers and 3.3 million total FiOS TV customers.

10.9 percent increase in consumer ARPU from 3Q 2009; FiOS revenues now represent approximately 50 percent of total consumer revenues.

6.9 percent increase in strategic business services revenues, which now represent approximately 43 percent of total global enterprise revenues.

Verizon Wireless added 584,000 retail postpaid and 447,000 total retail customers in the quarter, excluding acquisitions and adjustments.

At the end of the third quarter, the company had 86.7 million retail customers, which represented 93 percent of the company’s wireless customers, the largest number of retail customers of any U.S. wireless provider.

The company also added 550,000 reseller customers in the third quarter.

The total number of customers at the end of the quarter was 93.2 million.

In addition, the company had 7.9 million other connections at the end of the quarter -- such as machine-to-machine and telematics -- adding 251,000 net other connections in the quarter. This brings the number of total wireless connections to 101.1 million at the end of the third quarter.

Retail postpaid churn remained low at 1.07 percent. Retail and total customer churn levels were 1.43 percent and 1.36 percent, respectively.

Retail service revenues in the quarter totaled $13.5 billion, up 5.0 percent year over year. Retail data revenues were $4.8 billion, up 22.8 percent. Service revenues in the third quarter were $14.2 billion, up 7.7 percent. Total revenues were $16.3 billion, up 6.0 percent year over year.

Retail service ARPU (average monthly service revenue per user) grew 1.8 percent over third-quarter 2009, to $51.99. Retail data ARPU increased to $18.61, up 19.0 percent year over year.

Wireless operating income margin was 29.9 percent, an increase of 220 basis points year over year. Segment EBITDA margin on service revenues (non-GAAP) was 47.2 percent, up 150 basis points over third-quarter 2009.

Verizon added 226,000 net new FiOS Internet customers and 204,000 net new FiOS TV customers, sequential improvements of approximately 17 percent and 19 percent, respectively, compared with second-quarter 2010. This is the largest net quarterly

increase in FiOS customers in more than a year. By the end of the third quarter, Verizon had 3.9 million FiOS Internet and 3.3 million FiOS TV customers.

FiOS Internet penetration (customers as a percentage of potential customers) was 31.0 percent by the end of the quarter, with the product available for sale to 12.5 million premises. This compares with 28.7 percent and 10.9 million, respectively, at the end of third-quarter 2009.

FiOS TV penetration was 27.2 percent by the end of the quarter, with the product available for sale to 12.1 million premises. This compares with 25.1 percent and 10.4 million, respectively, at the end of third-quarter 2009.

In more mature FiOS markets, penetration rates have been consistently growing and are more than 35 percent, with a few markets in excess of 40 percent. FiOS revenues, including FiOS Digital Voice, grew 29.2 percent year over year. FiOS revenues generated approximately 50 percent of consumer wireline revenues in third-quarter 2010, compared with approximately 40 percent in third-quarter 2009.

Total wireline broadband and video revenues -- including FiOS Internet, FiOS TV and HSI (DSL-based high-speed Internet) -- were $1.8 billion in the quarter, up 20.8 percent from third-quarter 2009.

Consumer revenues grew 1.1 percent compared with third-quarter 2009. Consumer ARPU for wireline services was $86.55 in third-quarter 2010, up 10.9 percent compared with third-quarter 2009. ARPU for FiOS customers was more than $146.

Global enterprise revenues totaled $3.9 billion in the quarter. This is a decrease of 0.8 percent compared with third-quarter 2009, primarily due to foreign currency effects. Sales of strategic enterprise services -- such as security and IT solutions, as well as

strategic networking -- increased 6.9 percent compared with third-quarter 2009 and now represent approximately 43 percent of global enterprise revenues.

Segment EBITDA margin (non-GAAP) was 21.0 percent, compared with 20.8 percent in the second quarter of 2010 and 21.2 percent in the third quarter of 2009.

Verizon Wireless continued to lead the industry in cost efficiency. Monthly cash expense per customer (non-GAAP) decreased in the third quarter 2010 to $26.88, from $27.59 in the comparable period in 2009.

In the third quarter, data revenues increased to 35.7 percent of all service revenues, up from 30.5 percent in the third quarter 2009.

Verizon Wireless continued to invest in its broadband network, the nation’s largest and most reliable 3G (third-generation) network. Verizon’s 3G network provides more coverage than any other U.S. carrier’s and is available where more than 289 million people reside.

In early October, Verizon Wireless announced 38 major metropolitan areas, covering 110 million people, where it will launch its 4G LTE (fourth-generation Long Term Evolution) network by the end of the year. In addition, 4G LTE will be available in more than 60 commercial airports coast to coast -- including major airports within the launch areas plus airports in other key cities. Verizon Wireless’ 4G LTE network-deployment plans include covering virtually all of the company’s current nationwide 3G footprint by the end of 2013.

Verizon Wireless announced the first tablets to be available to its customers: the Apple iPad Wi-Fi will go on sale on Oct. 28 and the Samsung Galaxy Tab will launch on Nov. 11. In addition, the company continued to expand its smartphone lineup during the third quarter with the launch of the DROID X, DROID 2 and limited edition DROID R2-D2 by Motorola; the Samsung Fascinate, a Galaxy S smartphone; and a new model of the BlackBerry Curve 3G smartphone.

The company hosted its second annual Verizon Developers Conference in September, reaffirming its commitment to an open network and helping developers deliver applications to market quickly. Since the VDC was established in 2009, more than 5,000 developers have joined to create applications to be distributed to Verizon Wireless customers.

During the third quarter, Verizon Wireless customers sent or received more than 183 billion text messages. Customers also sent nearly 3.8 billion picture messages and completed nearly 22 million music and video downloads.

Third-quarter 2010 operating revenues were $10.3 billion, a decline of 3.6 percent compared with third-quarter 2009. Third-quarter 2010 cash operating expenses (non-GAAP) were $8.1 billion, a decline of 3.3 percent compared with third-quarter 2009.

Broadband connections totaled 8.3 million at the end of the third quarter 2010, a 2.7 percent year-over-year increase. This is a net increase of 61,000 from the second quarter 2010, as the increase in FiOS Internet connections more than offset a decrease in HSI connections.

As of the end of third-quarter 2010, the FiOS network passed 15.4 million premises, or approximately 60 percent of Verizon’s domestic wireline footprint following the close of the Frontier transaction.

The wireline workforce totaled 97,500 at the end of the third quarter 2010. This is a decline of 5,900 compared with the end of the second quarter 2010. Primarily as a result of a second-quarter 2010 incentive offer that has led to voluntary separations, the wireline workforce has declined by about 10,500 in the second and third quarters of 2010, and from 2,000 to 3,000 additional employees are expected to leave the payroll by year-end. These numbers do not include more than 9,200 employees who were transferred to Frontier in July.

During the quarter, Verizon continued to deploy global IT and networking solutions that enable multinational enterprise, medium business and government customers to do business more efficiently and effectively. These included new cloud computing capabilities, additional security capabilities in the Asia-Pacific region and global data center expansion to support the company’s “everything-as-a-service” cloud strategy. In addition to rolling out new capabilities, Verizon received recognition from top industry analyst firms during the quarter in the areas of communications outsourcing, Asia-Pacific network services, carrier Ethernet and IP services, and managed security services.

Verizon expanded its global network infrastructure during the quarter as it continued to broaden its global scope and capabilities. The company installed 17 additional Private IP edge routers for a total of 798 edge routers in 228 sites throughout 60 countries; added three new converged packet architecture switches, bringing the total number of CPA switches to 149 in 131 sites across 36 countries; and installed 19 new nodes in the Switched Ethernet Service network in support of a fiber-to-the-cell-site initiative.

AEG, the American Red Cross and the U.S. General Services Administration were among Verizon Business customers that completed new agreements during the quarter for a wide range of advanced communications and technology solutions.

Unaudited

Operating Revenues

Operating Expenses

Cost of services and sales

Selling, general & administrative expense

Depreciation and amortization expense

Total Operating Expenses

Operating Income

Equity in earnings of unconsolidated businesses

Other income and (expense), net

Interest expense

Income Before Provision for Income Taxes

Provision for income taxes

Net Income

Net income attributable to noncontrolling interest

Net income attributable to Verizon

Net Income

Basic Earnings per Common Share

Net income attributable to Verizon

Weighted average number of common shares (in millions)

Diluted Earnings per Common Share ⁽¹⁾

Net income attributable to Verizon

Weighted average number of common
shares-assuming dilution (in millions)

Unaudited

Assets

Current assets

Cash and cash equivalents

Short-term investments

Accounts receivable, net

Inventories

Prepaid expenses and other

Total current assets

Plant, property and equipment

Less accumulated depreciation

Investments in unconsolidated businesses

Wireless licenses

Goodwill

Other intangible assets, net

Other assets

Total Assets

Liabilities and Equity

Current liabilities

Debt maturing within one year

Accounts payable and accrued liabilities

Other

Total current liabilities

Long-term debt

Employee benefit obligations

Deferred income taxes

Other liabilities

Equity

Common stock

Contributed capital

Reinvested earnings

Accumulated other comprehensive loss

Common stock in treasury, at cost

Deferred compensation – employee

    stock ownership plans and other

Noncontrolling interest

Total equity

Total Liabilities and Equity

Unaudited

Cash Flows From Operating Activities

Net Income

Adjustments to reconcile net income to net cash provided by
operating activities:

Depreciation and amortization expense

Employee retirement benefits

Deferred income taxes

Provision for uncollectible accounts

Equity in earnings of unconsolidated businesses, net of dividends received

Changes in current assets and liabilities, net of
effects from acquisition/disposition of businesses

Other, net

Net cash provided by operating activities

Cash Flows From Investing Activities

Capital expenditures (including capitalized software)

Acquisitions of licenses, investments and businesses, net of cash acquired

Proceeds from dispositions

Net change in short-term investments

Other, net

Net cash used in investing activities

Cash Flows From Financing Activities

Proceeds from long-term borrowings

Repayments of long-term borrowings and capital lease obligations

Decrease in short-term obligations, excluding current maturities

Dividends paid

Proceeds from access line spin-off

Other, net

Net cash used in financing activities

Increase (decrease) in cash and cash equivalents

Cash and cash equivalents, beginning of period

Cash and cash equivalents, end of period

As of

Unaudited

Debt to debt and Verizon’s equity ratio, end of period ⁽¹⁾

Book value per common share ⁽¹⁾

Common shares outstanding (in millions)
end of period

Total employees

Unaudited

Capital expenditures (including capitalized software)

Domestic Wireless

Wireline

Other

Total

Cash dividends declared per common share

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Revenues

Service revenues

Equipment and other

Total Revenues

Operating Expenses

Cost of services and sales

Selling, general & administrative expense

Depreciation and amortization expense

Total Operating Expenses

Operating Income

Operating Income Margin

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Selected Operating Statistics

Total Customers

Retail Customers

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Total Customer net adds in period ⁽¹⁾

Retail Customer net adds in period ⁽¹⁾

Total churn rate

Retail churn rate

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Wireline Operating Revenues

Mass Markets

Global Enterprise

Global Wholesale

Other

Total Operating Revenues

Operating Expenses

Cost of services and sales

Selling, general & administrative expense

Depreciation and amortization expense

Total Operating Expenses

Operating Income (Loss)

Operating Income Margin

Unaudited

Selected Operating Statistics

Switched access lines in service

Total Residence (includes Primary residence)

Primary residence

Business

Public

Total

Broadband connections

FiOS Internet Subscribers

FiOS TV Subscribers

Unaudited