Ron Lataille - Senior Vice President, Investor Relations Doreen A. Toben - Chief Financial Officer, Executive Vice President Ivan G. Seidenberg - Chairman of the Board, Chief Executive Officer Dennis F. Strigl - President, Chief Operating Officer

John Hodulik - UBS David Barden - Banc of America Timothy Horan - CIBC World Markets Simon Flannery - Morgan Stanley Michael McCormack - Bear Stearns Chris Larsen - Credit Suisse Thomas Seitz - Lehman Brothers Qaisar Hasan - Buckingham Research Frank Louthan - Raymond James

Good morning, and welcome to the Verizon fourth quarter 2006 earnings conference call. At this time, all participants have been placed in a listen-only mode and the floor will be open for your questions following the presentation. (Operator Instructions) It is now my pleasure to turn the call over to your host, Mr. Ron Lataille, Senior Vice President, Investor Relations of Verizon. Ron Lataille : Good morning, and welcome to our fourth quarter 2006 earnings conference call. Thanks for joining us this morning. I’m Ron Lataille. With me this morning are Ivan Seidenberg, our Chairman and CEO; Denny Strigl, our President and Chief Operating Officer; and Doreen Toben, our Chief Financial Officer. Before we get started, let me remind you that our earnings release, financial statements, the investor quarterly publication and the presentation slides are on the investor relations website. This call is being webcast. If you would like to listen to a replay, you can do so from our website. I would also like to draw your attention to our Safe Harbor statement. Information in this presentation contains statements about expected future events and financial results that are forward-looking and subject to risks and uncertainties. Discussion of factors that may affect future results is contained in Verizon's filings with the SEC, which area available on our website. This presentation also contains certain non-GAAP financial measures. Reconciliations of these non-GAAP measures to the most directly comparable GAAP measures are also on our website. Earlier this month, we filed an 8-K with the SEC, reclassifying previously reported historical information related to our directory business into income from discontinued operations. As you know, this was due to the Idearc spin-off transaction. As a reminder, income from discontinued operations for the fourth quarter will include about six weeks of Idearc results, two months of Dominicana, and a full quarter of Puerto Rico. In the first quarter 2007, and until the sale closes, income from Puerto Rico will continue to be included in this line item. Before turning the call over to Doreen for a review of our results, I’d like to cover the differences between reported and adjusted earnings for the fourth quarter. Reported earnings per diluted share were $0.35. Adjusted earnings, or EPS before the effects of special items, were $0.62. This quarter, there are five special items which we are excluding from adjusted results. The largest item is a $541 million after-tax charge, which is $0.19 per share, related to our sale of Verizon Dominicana. The sale of our Dominicana property resulted in a pre-tax book gain of about $3 million. Offsetting this gain were $571 million of taxes recognized upon the sale per APB 23. As we previously disclosed, our net cash after-tax proceeds from this transaction were about $1.7 billion. The next non-recurring item is a $101 million, or $0.03 per share charge for costs related to the spin-off of Idearc, mainly fees related to banking, legal, auditing and other administrative costs. As you will recall, the spin-off also generated $9 billion in cash and reduced debt. The last three items we are excluding from adjusted results are: $55 million in after-tax charges, or $0.02 per share, related to severance and related pension and benefit costs; $47 million after tax, or $0.02 per share, for merger integration costs; and $30 million after tax, or $0.01 per share, for relocation and other costs related to our move to Verizon Center. You should also note that we do not exclude the effects of amortization of intangibles from our adjusted results. For the full year, amortization expense related to MCI customer lists was $190 million pre-tax, or about $0.04 per share. In summary, adjusted earnings were $0.62 for the fourth quarter and $2.54 for the full year. EPS from continuing operations -- that is, excluding income from Idearc, Dominicana and Puerto Rico, were $0.52 for the fourth quarter and $2.06 for the full year. With that, I will now turn the call over to Doreen. TRANSCRIPT SPONSOR : What if there was a way to promote your company to a perfectly targeted group of potential customers, partners, acquirers and investors? What if you could tailor your pitch to them at the moment of maximum interest? And what if you could do this for a no-brainer price? :

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IR firm sponsors transcript of micro-cap company: Consulting company sponsors company's transcript in sector of interest: Your company's name and promotion could have been on this transcript! Learn more, or email Zack Miller for details. Doreen A. Toben: Thanks, Ron, and good morning, everyone. Before I get into our fourth quarter results, I would like to review some of the highlights of 2006, including the progress we made in a number of strategic areas. As you know, we strongly believe that our strategic networks are the foundation of our business model. The Verizon wireless network has long been the undisputed quality leader, and it continues to deliver industry-leading operating and financial results. In 2006, Verizon Wireless added more customers than any year in our history -- 7.7 million net adds. We continue to focus on the high quality retail market. We now have a customer base of more than 59 million, 96% of which are retail. And in the face of intense competition, we expanded ARPU and increased customer loyalty. We made significant progress in our broadband transformation. We passed more than 3 million additional homes with our high-capacity fiber network, doubling the amount of premises pass. We also doubled the number of homes open for sale. While making these significant strides in deployment, we also reduced the unit cost to both pass and connect homes. We also successfully created a new video business from scratch, including new network facilities, the acquisition of content, and obtained over 600 franchises, covering 7.3 million households. We ended the year exceeding our subscriber expectations with more than 200,000 video customers, and we expect video to gain even more momentum in 2007. In the enterprise business market, the MCI merger gives us an unsurpassed local to global network and the ability to offer advanced services to the business customers around the world. We successfully integrated and stabilized the MCI business. We introduced more financial discipline into the customer acquisition process, and we have successfully restored revenue growth, posting both year over year and sequential growth in the fourth quarter. Our focus on investment and innovation is also positioning us to deliver additional value to shareowners as well as customers. During the course of the year, we strengthened our balance sheet and returned value to shareowners through the spin-off of Verizon Information Services, now Idearc, and the sale of our investment in the Dominican Republic. We repurchased $1.7 billion of stock in 2006, and as we have previously said, we plan to recommend to our board that it maintain the annual dividend at $1.62 per share post Idearc spin. Since Idearc intends to pay a dividend, Verizon shareowners that hold Idearc shares have the opportunity to, in effect, get a dividend increase. So as I look at 2006, we have become a more innovative, competitive, global and high-tech company. We’re even more focused on our network-based, organic growth strategies and more unified in how we approach our customers. We also remain focused on profitable growth and creating shareowner value. Okay, let’s turn to slide 4 and look at some of the details. Pro forma consolidated revenue growth was 3.9% in the fourth quarter and 3.3% for the full year. Revenues have grown sequentially each quarter this year, and about 60% of our annual growth of $2.8 billion occurred in the second-half of the year, which demonstrates the positive momentum we are building. As you’ll see, revenue increases this quarter were once again driven by wireless, broadband, and enterprise data services. Operating income increased for both the fourth quarter and for the full year. In fact, in 2006, revenue growth was more than $1 billion greater than the increase in cash expenses, leading to 10% growth in operating income and 100 basis point expansion in the operating income margin. So strong momentum as we enter 2007. We ended the year with very solid cash flow results and a much stronger balance sheet. For the full year, cash from continuing operations totaled $23 billion, a 12.6% or $2.6 billion increase over 2005. Total capital spending came in at $17.1 billion, which is within the guidance range we provided in early 2006. Our cap-ex to revenue ratio for 2006 was 19.4%. The year-over-year cap-ex increase is primarily attributable to adding MCI, which represented about $1.6 billion of the increase. The rest is from continued investments in wireless and broadband growth initiatives. Debt was $36.4 billion at the end of the year, and while this is down almost $2 billion from last year, keep in mind that the debt assumed in the MCI acquisition was not part of the 2005 year-end number. At the end of January after the MCI transaction, we had $41.9 billion of net debt. So in effect, we reduced net debt by almost $9 billion since the MCI transaction. Let’s now turn to wireless, starting with some operational highlights. 2006 marked another year in which we sustained our growth by differentiating ourselves. We effectively and seamlessly increased network capacity to handle significant customer growth and, at the same time, maintain the reliability of our network. We expanded our wireless broadband capabilities, extending high-speed EVDO coverage by about 50 million pops, and also began our EVDO Rev-A deployment, which we will continue throughout 2007. We introduced new and innovative products and services, including: In the next few months, we will roll our V-Cast Mobile TV. Another big differentiator for Verizon Wireless is the quality of our customer base. We are the industry leader in terms of total number of retail customers. These are the customers who choose Verizon’s branded service. Through our direct relationships with these customers, the most reliable network, product innovation and excellent customer service, we not only maintained our customer loyalty but actually improved upon our leadership position. 2006 marked another year in which Verizon Wireless gained market share and delivered industry-leading financial results, extending our overall leadership in the industry. Our financial results for the fourth quarter, as shown on slide 7, continued to reflect the strength of our business model. Quarterly revenues surpassed the $10 billion mark in the fourth quarter, and were up strongly, both sequentially and year over year. For the year, wireless revenues grew to just over $38 billion, an impressive 17.8% growth. The quality of our customer base, as I mentioned earlier, along with our efficient cost structure, drove margin performance once again. EBITDA for the quarter grew 8% year over year, and nearly 20% for the full year. Full-year EBITDA, which totaled $14.5 billion, had a higher growth rate than revenue. EBITDA margins were 43.2% in the fourth quarter, and 44.3% for the year, representing 110 basis point margin expansion over full-year 2005. Once again, our strong growth in service revenues was driven by increased data usage and significant customer growth. Fourth quarter service ARPU of $50.12 increased 1.5% year over year, by far our highest quarterly growth rate this year. As you would expect, this is primarily related to our retail customer base. Data revenues accounted for nearly 16% of service revenue and represented $1.4 billion of revenue in the quarter. Data made up $7.91 of total service ARPU, up substantially year over year, and $0.75 sequentially. We had an outstanding quarter of quality customer growth, with 2.3 million net adds. More than 2.2 million of these net adds were retail customers, and even more significantly, 2.1 million of these were post-paid customers. In fact, we have seen strong sequential growth in retail net adds for each of the last three quarters, driven almost entirely by new post-paid customers. For the year, our retail base increased by 7.8 million net new customers, a 15.9% increase over 2005. We now have 56.8 million retail customers. Customer loyalty remains very strong. Quarterly churn rates improved both sequentially and year over year. In the fourth quarter, total churn was 1.14%, and retail post-paid churn was 0.89%. Wireless data services are continuing to grow, as you see on slide 10. 34 million, or 60% of our retail customers, are now data users, up from 49% one year ago. Data revenues in 2006 doubled compared with last year, and now total $4.5 billion. Data is not only an increasing component of total revenues, it also drove about half of the total service revenue growth in 2006. Approximately 35% of data revenue comes from business-focused applications. Revenues from our Internet access and e-mail products increased 120% year over year, and more than 50% of our data revenue growth comes from services other than messaging, primarily EVDO-based. Looking at our priorities in wireless for 2007, we will continue to focus on our network superiority and expand our wireless broadband capabilities. EVDO Rev-A will continue to be rolled out this year and we expect to have significant coverage in all major markets in 2007. We will continue to innovate. As we announced earlier this month, we will roll out V-Cast Mobile TV service by the end of the first quarter, in partnership with QualComm. We will also continue our focus on adding retail customers. Finally, we are confident that we will continue to gain market share, post industry-leading financial performance, and sustain our growth leadership position in the industry. Let’s now turn to our wireline segment. As you know, our goal is to transform the telecom franchise into a broadband business, and we made significant progress in expanding our broadband capabilities in 2006. As I mentioned earlier, we doubled the amount of homes passed with fiber. We’ve also doubled the number of data homes open for sale, and on the video side, we increased the number of homes open for sale from about 110,000 at the beginning of the year to about 2.4 million by the end of December. In Verizon Business, we expanded our global IT capabilities, which gave us a particularly strong position in the high-end of the enterprise market and enabled growth in strategic services, such as IP, ethernet, and managed services. As we expanded our broadband and business capabilities, we also focused on reducing costs and improving our competitive cost structure. For example, in 2006, the wireline segment reduced headcount by about 9200 people. Wireline financial results, as shown on slide 13, came in as I expected. Revenues have continued to show steady improvement as year-over-year rate of decline has decreased each quarter. Fourth quarter revenues declined 3.5%, a significant improvement from the 6.8% year-over-year decline in the first quarter. This improvement is primarily due to data revenue growth. Data revenues grew 9.5% in the fourth quarter. Data now represents nearly one-third of our total wireline revenue stream. Fourth quarter operating income margins of 8.9% were flat compared with last year and show a modest 10 basis points sequential increase, driven by strong cost controls in the quarter. These results include FiOS earnings dilution of $0.10 per share in the fourth quarter and $0.32 for the full year. Let’s take a more detailed look at some of the revenue categories. We are seeing some encouraging signs as the rate of decline in consumer retail revenues have decreased steadily since the first quarter, as our broadband products have become a more significant portion of this revenue category, about 14% this quarter. Also encouraging is the fact that consumer ARPU of more than $53 grew 1% sequentially and nearly 4% year over year, providing evidence that our broadband initiatives are expanding our relationships with customers. Within the regional small business market, revenues for the quarter were down about $16 million, or 1.2%. On a full-year basis, this revenue category totaled $5.2 billion and showed modest growth of about 0.2%. As in the consumer market, data is becoming a more significant portion of this revenue stream. Small and medium business data revenues grew more than 30% in 2006 and are approaching 10% of this revenue category. Finally, wholesale revenues, which includes special access, switched access and local wholesale, declined 3.1% in the quarter. This is due to the expected decline of UNE-Ps and also some intra-state switched access rate reductions. Again, the data portion of this revenue category, primarily special access, is continuing to grow, up nearly 6% in the fourth quarter. Now let’s look at some of the subscriber metrics, starting on slide 15. The three line items within consumer retail represent our strategic focus. As you can see, in the fourth quarter, we added 142,000 more net broadband and video customers than the decline in primary lines. This is an improvement over the third quarter when we added 120,000 more primary consumer units. On a consumer RGU basis, which includes additional lines, we were up slightly on both a sequential and year-over-year basis. More importantly, the consumer revenue improvement was much greater. Our FiOS subscriber metric continued to show steady growth in the fourth quarter. We also saw continued growth in FiOS Internet in the fourth quarter. We added 165,000 net new FiOS Internet subscribers, averaging more than 12,000 per week. For the full year, we added 517,000 net subscribers. We now have 687,000 FiOS Internet subs, representing 14% penetration of homes open for sale. Combined with DSL, we have 7 million total broadband customers, up 1.8 million from a year ago. We ended the year with 207,000 FiOS TV subscribers, with 89,000 net adds in the quarter. This is an average of 6800 net new subscribers per week. We ended the year with 2.4 million homes open for sale, with an increase of 1.2 million in the fourth quarter alone. As you know, we made a significant number of homes open for sale in late December in New Jersey, after receiving a state-wide franchise during the quarter. Almost half of the 1.2 million homes open for sale in the fourth quarter came online in the last two weeks of December. So even with this late-in-the-year increase in homes open for sale, we achieved 9% penetration in our first full year of offering video. We are seeing that six out of every 10 FiOS TV orders are also requesting FiOS Internet to be installed at the same time. In Verizon Business, which serves global enterprise and government customers, we continue to see improvements on the demand side. We’re seeing volume growth and increasing demand for bandwidth, especially in the premier enterprise customer segment. This helped drive a 27% increase in strategic services revenue in the fourth quarter and helped restore total business year-over-year revenue growth. Revenues totaled $5.3 billion in the quarter, up 2.7% year over year, with higher sequential growth in each of the last three quarters. We believe this is a meaningful turnaround in the business. For the year, Verizon Business generated more than $20.6 billion in revenue. Strategic services exceeded $4.1 billion in 2006, and now represents 20% of total Verizon Business revenue. Our integration efforts have also been successful. From an operational perspective, the integration of MCI generated $600 million in synergy savings in 2006, which is slightly ahead of our targeted $550 million in year one. We are increasing our 2007 synergy target from $825 million to $900 million. Many of the incremental savings we expect in 2007 are from systems integration projects that are well underway. Another area we will focus on in 2007 will be reducing access costs. Verizon Business continues to have lots of opportunities to grow market share and increase efficiency. Our Wireline priorities in 2007 focus on three key areas: As I previously guided, we expect FiOS earnings dilution to be at its peak in the fourth quarter of 2006 through the first quarter of 2007. Dilution should be about $0.11 in the first quarter of this year. Let me summarize as follows: we had a strong 2006, both operationally and financially. We gained market share and expanded customer relationships. Our organic growth initiatives are gaining momentum and have created the foundation for sustainable, long-term growth. As far as our financial outlook, as we’ve said many times, we believe our networks are and will continue to be a strategic differentiator. We plan to invest between $17.5 billion and $17.9 billion in those networks in 2007. On the Wireline side, we expect total cap-ex of $10.7 billion to $10.9 billion. This includes some additional capital to reduce access costs going forward and additional success-based investments related to FiOS, and growth in private IT, web hosting, and new product development. Integration capital is expected to be higher in 2007 versus 2006, but we are still within our original guidance of $1.6 billion to $1.9 billion over three years. In Verizon Wireless, we expect spending to be between $6.6 billion and $6.8 billion, as we continue to add capacity and enhance our broadband capabilities. We will also continue to increase our financial flexibility and create value for our shareowners in 2007. We recently announced a spin-off and merger of access lines in Maine, New Hampshire and Vermont, with FairPoint Communications. We are nearing the completion of the Puerto Rico telephone company sale, and as I said, we plan to continue our share buy-back program at similar levels to what we did in 2006. With that, I will turn it back to Ron so we can get to your questions. Ron Lataille : Thanks, Doreen. Operator, Ivan, Denny, and Doreen are now available to take questions.

(Operator Instructions) Your first question is from John Hodulik of UBS. John Hodulik - UBS: Thanks, good morning, everyone. Just a couple questions. First, I guess for Doreen, we appreciate the guidance you gave for ’07. Is it possible for you guys to give us a little bit more direction from an earnings standpoint, or maybe even more as it relates to FiOS metrics? Secondly, for Doreen, I thought the consumer ARPU strength was nice, and a little bit surprising, a little better than we thought. Could you give us some more trends going forward, where we go from the 4% as you guys expand the reach of FiOS? Then, for Ivan, I thought the FairPoint spin was well-received and the price is good. Is that the kind of structure we can expect going forward, as you look at some of the other line sales? Then, sorry to keep going like this, but while we have Denny on the line, can you give us an initial look on what your first priorities are, as you start to oversee the wireline business? Doreen A. Toben: I’ll start. If I start with the ARPU one first, I think what you saw was almost 4% ARPU growth in the quarter. What I would tell you is December accelerated, so it was even higher than the quarterly average. We expect to see it increase significantly even next year. It’s really a mix between price-ups that we’ve been doing, both in December as we roll into ’07, as well as the fact the product mix, you know, the data and the video, has really made a big difference. I think I’ve used before with you anecdotally, we’re seeing at least one state now at sort of a 15% ARPU, so we’re certainly encouraged in where we’re seeing the ARPU. John Hodulik - UBS: It seems that the consumer business should grow nicely next year as you continue to see that accelerate. Doreen A. Toben: I think what you’ll see is the trends from this year will certainly improve next year. If I talk you through the guidance, if you start with the $2.06, which was the recurring number, I would say if you think about there is still about $0.05 in concave A that’s in there, not in discontinued ops. You should think about there’s $10 billion, a little bit more than $10 billion in cash that we would earn interest on from all the deals that we did. You should think pension and OPEB as relatively flat. Pension’s really a help, but the discount rate, it did move the discount rate from 575 to 6, so you think pension and OPEB as relatively flat. Kept the ROA the same, so no change there at 8.5. I think when you come down to it, I would say we had 10% operating income growth this year. I would say that we would have at least a 10% op income growth next year. John Hodulik - UBS: Great, thanks. Dennis F. Strigl: John, on the FiOS dilution, we’re expecting about $0.11 in the first quarter of this year. Given the take rate experience that we had in the fourth quarter, we could see dilution for the year in the mid-$0.30 range. Of course, our view is that success-based dilution is good news in the long run. I would like all to understand that we’re making some very good progress in reducing [wait] time in the home. We really do understand the key drivers. For example, we’re deploying timesaving technologies, MOCA, for example. We’re using software tools to help quickly configure PCs and TVs. We’re also increasing productivity by doing more actually before the tech gets into the home. I guess bottom line on the FiOS dilution is we’d like you to know that we are focused on eliminating unnecessary wasted time inside the home and in preparing the home from the outside. Our outlook for cost to pass and connect has not change and we’re making some very good progress. Ivan G. Seidenberg : On the FairPoint transaction, just a couple of comments. We do like the transaction. We like the structure. We like the buyer. I would say this, here’s the way we’d like you to think about all these access line transactions: this was a unique one. Whole states, a good buy, a solid operator, something that when you look at the long term, there’s no dispute that these three states are more rural than they are anything else. We think that FairPoint offers a way for these assets to be repositioned and continue to participate in the growth of the industry as they would manage rural assets. As far as your question about other structures, yes, we like the Morris Trust. We’d also like to take a step back now and absorb everything that we’ve done, so we’d like to get this FairPoint thing a little further along, complete the other transactions that we have and keep an open eye, but we’re not in any rush to make any other moves, unless there’s something really unique that makes a lot of sense for shareholders. Dennis F. Strigl: John, on your question on priorities, and let me back up a second here and just say that the organizational changes that were made in December were the result of Ivan, Larry [Babio] and I talking about these changes for several months. Our feeling was that the time was right. Verizon Wireless, of course, in great shape, the transformation of the teleco to broadband well underway, and our Verizon business integration successful in ’06, and we feel very good about that in ’07. So to your question, the priority or the goals for this year are to increase our focus on growth, organic growth, of course, in particular, to increase our rate of growth; that is, increasing product innovation and speed to market and also, of course, to enhance customer service and to continue to improve our cost structure throughout 2007. This is not only the priorities that I have but this is shared by each of the individuals who run our groups; telecom, wireless, business, and also Verizon Services we think will give us a great advantage this year in realizing economies of scale and helping us improve our cost structure. Another focus with our new organization is for introducing services and bundled announcements that leverage our assets across all of our groups. In fact, you will see tomorrow that we will make the first of many announcements in which we will bundle wireless into our consumer plan. So stay tuned for that tomorrow. John Hodulik - UBS: Great, thank you. Ron Lataille : Thanks, John. Operator, next question, please.

Thank you. Your next question is from David Barden of Banc of America. David Barden - Banc of America: Thanks, guys. I’ll try to keep it to two. The first would be just on the business side, obviously some strong growth in the enterprise. If you could talk about the forces at work there, you know, the mix of point of sale pricing versus technology price downs versus contract re-pricings and how that trend looks into 2007, and you know, in this fourth quarter, if anything in there is CPE type of sales. Then, the second question, maybe just Denny, kind of drawing on some of your experience. Obviously very strong growth this year in wireless, especially in the fourth quarter. Some competitors are grappling with some internal questions. They’re going to try to get back on their feet by the second-half of the year, focusing on handsets. Cingular is going to be trying to bring their iPhone product to the market, again another marquee handset. One criticism for Verizon, not that you see it in the numbers, but it’s been that the handset mix has been moderate relative to competitors. As this becomes a new focus, what is Verizon Wireless’ game plan for staying strong in the second-half of ’07 as the wireless competitors try to bring new stuff to market? Thanks. Dennis F. Strigl: David, a wide range of questions, and let me start on the business side. In pricing, we’ve experienced a moderate stabilization in 2006, particularly in our legacy products. We have sales of our next generation services, such as private IP, are doing very well, and we’re seeing an increased response from our competitors in that regard. But our focus continues to be on profitable revenue growth. CPE, our focus this year is more, as CPE being an add-on to what we sell. On the revenue growth outlook for business, the trends are good and we saw sequential revenue growth, as you heard from Doreen, throughout 2006. We’re looking forward to overall business market trends that put us into a good position for growth in ’07. We expect continued year over year total Verizon business revenue growth, particularly focusing on IT and professional services that we’re able to bring to the marketplace. On the wireless question, let me start with the iPhone. That’s probably the most popular question these days. If you all have seen the USA Today article that Leslie Cauley wrote, our take is that she was right on. The iPhone market, the iPhone product is something where, quite frankly, we’re happy that we’re not first to market with the iPhone. We think that innovation and a focus on music will benefit the whole industry. It really does draw attention to our data capabilities. You heard from Doreen that that’s a very strong market for us, but bottom line on the iPhone, I think we’re -- many are interested in comparing a future offering with what we have in the marketplace today: it’s like comparing apples and oranges. I will tell you that we will stay competitive and more on that as the year rolls out. Looking at the product line that we have, particularly the handset lineup, we’re very confident with our strategic partners and we’ve had a lot of good product from all three of our major suppliers, and there too, more on that as the year rolls out. David Barden - Banc of America: All right, thanks. Ron Lataille : Thanks, David. Operator, next question, please.

Thank you. Your next question is from Tim Horan of CIBC. Timothy Horan - CIBC World Markets: Good morning, guys. One clarification and one question. Doreen, does the cap-ex guidance include set-top box cap-ex? Doreen A. Toben: Yes, Tim. Timothy Horan - CIBC World Markets: Great. Then, on the wireless side, Denny, you had a really strong quarter here. It seems like some of your competitors are kind of injured out there. Would your preference be to go out and continue to gain market share and maybe keep margins kind of flattish where they’re at now? Or do you think you can continue to expand margins at the rate that we’ve seen over the last couple of years going forward? Thanks. Dennis F. Strigl: Our margin outlook continues, Tim, to be the same. We expect margins in the 43% to 45% range, so no change from the previous guidance that you’ve had from us. In terms of perhaps slowing down growth, if that was your indication there, we have no intentions of slowing down growth. Our goal is to continue to take share as we have quarter after quarter. We’ll do that by also focusing on profitability. We’ve done both quarter after quarter, grown the base and been profitable in the 43% to 45% range. Timothy Horan - CIBC World Markets: Thank you. Dennis F. Strigl: Just an add-on to that, Tim. We’re pleased with the local member portability results that we’ve had. We take in two customers for every one that we hand over to our competitors, so good result there. Timothy Horan - CIBC World Markets: Have you seen any slowdown in that metric? Dennis F. Strigl: We have not. It’s been essentially the same. Ron Lataille : Thanks, Tim. Operator, next question, please.

Thank you. Your next question is from Simon Flannery of Morgan Stanley. Simon Flannery - Morgan Stanley: Thank you. Good morning. A couple of FiOS questions. First, on FiOS TV, about 40% of the homes you’ve built passed. That’s starting to accelerate. How should we think about that for ’07 as you go to 9 million homes passed? Are you going to be able to keep that 40%, grow it to 50% or 60%? Secondly, in the past, you’ve given us penetration numbers for markets that have been open six, nine months or whatever. Can you give us a feel for where we are in places like Keller where you’ve really been able to have a good time in the marketplace with the product? Thanks. Doreen A. Toben: I’ll start with the first part. Keller is, I’m looking around to see if I should give the number. Texas is probably well over 20%, 22%, 25%, Texas all by itself. Keller is very, very high. We stopped giving the six, nine and twelve because we’re giving you in total and because we have so many different COs that start to roll into that, so we though by giving you the total penetration, it was probably more effective. Off the top of my head, I actually don’t know the first part of the question on ’07. Ivan G. Seidenberg : I can help, maybe, but maybe Simon, we don’t understand the frame of the question. We’re going to do another 3 million about. That’s what we’ve said. Simon Flannery - Morgan Stanley: You’ll do 3 million TV homes? Ivan G. Seidenberg : No, homes passed we’ll do. Simon Flannery - Morgan Stanley: I guess it’s open for market on TV. Should we be thinking that at the end of this year, you’ll be at 5 million open for market on TV? Doreen A. Toben: That’s a relatively -- about that number is a good number, Simon. Ivan G. Seidenberg : We’ll clarify that over the course of the first quarter, give you a little better information but you’re not that far off. Dennis F. Strigl: Simon, if I may add, first of all, looking at last year, we feel very good about the FiOS data adds that we had. Video actually was over our goal, and as Doreen had mentioned in her comments, penetration increased in the fourth quarter to 14%. So we feel very good about our goals and growth opportunity in ’07. Everybody loves the service: the speed, the service quality, the reliability. As you may know, in a recent consumer reports review, we blew away the competition. Our view is that the market is ready for the upgrade that we can provide. Simon Flannery - Morgan Stanley: Thank you. Ron Lataille : Thanks, Simon. Operator, next question, please.

Thank you. Your next question is from Mike McCormack of Bear Stearns. Michael McCormack - Bear Stearns: Thanks, guys. Just a quick comment, if you would, on wireline margins. We obviously can quantify the impact on the quarter from FiOS and MCI, but maybe just a comment on seasonality and what impact that might have had on the wireline margin, because it really held up pretty well. I’m just trying to see if there’s still an impact there. Secondly, and maybe it’s a combined question here, but on data, data was I think across the industry so far a little bit weak. So maybe some trends you’re seeing in the DSL marketplace. FiOS adds were good but you missed your target there, so are we seeing just sort of an aging of the base you’re selling into? Then, connected to that, the access line losses. The rate of decline actually worsened, but the rate of worsening actually is the best we have seen in several quarters, so maybe just some comments on the cable competitiveness. Thanks. Dennis F. Strigl: First of all, we didn’t miss any targets on FiOS. We feel very good about the FiOS number. But let me come back to margin outlook. We expect wireline margins to stabilize, certainly not to get worse. We could see some I’ll call it lumpiness from quarter to quarter, but overall, we see improvement in late ’07 and into 2008. If I can break down just the two wireline pieces, in telecom, we see continued success in our FiOS rollout. Operating expense savings, we expect to see as FiOS gains some scale. Continued ARPU growth and, as I mentioned earlier, incidentally we’re very focused on elimination of time in the home to improve our overall metrics on FiOS. On the business side, we’re achieving the merger synergies, improving our cost structure and frankly, we are gaining market share, so we feel quite good about how we’re positioned for 2007. Doreen A. Toben: If I could go back just a second on wireline margins, there was perhaps some seasonality in the fourth Q, or maybe I would suggest as you think about ’07 and you think about on the Verizon business side, each quarter with their synergies, their margin improved, as well as the fact that the FiOS dilution is the worst in the beginning of the year, you might see -- Denny called it lumpiness, but you may see the wireline margins stabilize but sort of ramp up as opposed to flat across the whole year. Dennis F. Strigl: Mike, on the access line outlook, our goal is less overall line loss in ’07 than we saw in 2006. FiOS will of course increasingly help, particularly in the second-half of the year, as we gain some scale with FiOS, but I will tell you that we also have a significant focus on retention of access lines in ’07. Doreen A. Toben: On the competitive piece, as you would expect, the competitors that have been in market for a long time are probably flat to down, and perhaps the ones that are newer in an area are up, but I would say actually overall, the VOIP adds appear to be relatively flat Q-to-Q. Michael McCormack - Bear Stearns: I know you guys are not really focused on the cost per home number specifically, but can you give us your sense for how close you are to what the year-end goals were? Doreen A. Toben: I think what I said was we certainly beat in both cases what we told you, so we were much better. Then, the other thing I would tell you is we’re probably not going to give this to you every quarter. We gave you the five-year number. We’re not that far off, if you look at homes for pass to what we told you the five-year number was, and connected. Considering we beat both of them, you know what the five-year target is, I probably am not going to give you the absolute number of Q-to-Q now. Michael McCormack - Bear Stearns: Okay, thanks, Doreen. Thanks, guys. Ron Lataille : Thanks, Mike. Operator, next question, please.

Thank you. Your next question is from Chris Larsen of Credit Suisse. Chris Larsen - Credit Suisse: Thanks, good morning. First question, the incremental capital spend, it looks a little bit higher, particularly in wireline. Can you give us a sense where the mix shift is? Is that more a function of incremental set-top boxes, as you’re going to add about three times the number of subs this year? Secondly, on the FiOS solution, Denny, how do you think about balancing growth versus the dilution? If you go back to the wireless days, it was just grow as quick and get as much market share as possible. If we look at what is going on in video, this may be the opportunity to grab that share as people are making this transition to high definition and the flat panel TVs, and this could be your one opportunity to hurry up and get in there as people decide what new TV to get in the home. Doreen A. Toben: I’m going to start on the capital side, Chris. If you think about the increase, it’s probably in a couple different places. One, it’s much more success-based, so you see it in the set-top box and the cost to connect. However, there’s also a substantial piece of it on what I would call the business side of it. We’ve done real well on web hosting. That seems to be expanding, so we’re going to grow web hosting. We’ll do some things perhaps in international, as well as we talked about the fact we didn’t spend as much as I would have anticipated in integration capital this year on trying to get access charges down, doing some more co-locations, doing some more grooming, doing some more putting buildings on net. So we’re going to see that number kick up as well, so it’s sort of a mix of the two different areas. Dennis F. Strigl: On the FiOS growth, your comment was right on. Yes, we see that we have a window of opportunity with a superior product to what our competitors have, so our goal is to be very aggressive in FiOS, particularly on the video side. I will also tell you though that as in wireless, we’ve learned some lessons there, of course, we’re focused not only on growing FiOS but also on controlling our costs and margin improvement. So that’s the story. What we’ve done in wireless, our goal is to do the same with our FiOS new product offering. Ron Lataille : Operator, next question, please.

Thank you. Your next question is from Tom Seitz of Lehman Brothers. Thomas Seitz - Lehman Brothers: Thanks for taking the question. A couple of quick ones. Could you talk debt levels? I guess I’m particularly interested in Verizon Wireless. By our estimates, there essentially won’t be any net debt at the end of this year. I’m wondering what sort of arrangement you have with Vodafone regarding the uses of free cash flow. Are you going to have to lever back up? Secondly, small business was stronger than we were looking for. I was wondering, are you engaged in win-back campaigns now, as Cablevision’s entrance matures in your markets? Or is that just more of a macro environment trend? Thanks. Doreen A. Toben: Starting at the debt level, I would suggest you’re probably a year off on when the debt goes perhaps to zero. Not quite sure what is happening with spectrum, when the 700 auction comes up, if we participate in the 700 auction. But when it does get to a zero, it would be at our discretion to put forth what kind of a dividend policy we wanted to have. I think that’s more an ’08 discussion than an ’07 discussion, Tom. Thomas Seitz - Lehman Brothers: Okay. Dennis F. Strigl: Tom, let me comment on the small business piece. First, I would say that the small business market clearly to us is important. It is a growing market. I would also say that competition is not at all new in the small business space. We’re focused on retention. We’re focused on win-backs and I will tell you that I think we are in a good position. Our key differentiator is our reliability and our quality. We have a dedicated sales force of some 4,000 people. And I will also tell you that the MCI merger has helped us in this regard, because it gives us a strong agent channel that comes from the merger. We’re very focused in small business. Doreen A. Toben: Just so I was clear, it’s an ’08 -- on the dividend, it’s an ’08 discussion for probably an ’09 implementation. Thomas Seitz - Lehman Brothers: Okay. Ron Lataille : Thanks, Tom. Operator, next question, please.

Thank you. Your next question is from Qaisar Hasan of Buckingham Research. Qaisar Hasan - Buckingham Research: Good morning. I had a couple of quick questions. One, just on consumer rate increases, we understand you recently raised prices on your freedom plans by $5. Could you elaborate a little bit on that, whether in fact just new customers, existing customers? It seems to be a slight change in your strategy versus a couple of years ago, where you were actually quite aggressive on your pricing, given competition. What’s changed in your thinking that’s actually allowing you to actually raise prices not just on voice, but also data and video? Secondly, on MCI, based on the numbers that you guys have provided in the past, I think you did about $350 million in synergies in the first three quarters, which implies probably about $250 million in the fourth quarter. Given that run-rate, the $900 million in ’07 looks a little bit on the light side. Could you just maybe walk through the math there and where we might be off? Thanks. Doreen A. Toben: Qaisar, I’ll start on the pricing. We did up the price on freedom across the county about $5. We felt based on the take rates we were getting and the churn that we were able to do that. We’ve not seen a decrease in the sales because of the increase. We also had an increase in the DSL pricing, especially at the low end. The numbers that we had at $14.95, we’ve seen them move up to $17, $19 and $21 in some states. I think if you compare that to any other offer, any other cable model offer, we’re still at the low end. We’ve seen very successful take rates and thought that we could do it. The churn has come down significantly. We’re not playing on the price side at all on the video market. We’ve been really pleased with our video pricing and our video ARPU, so the churn and everything has really shown us that we’ve got the ability to have some pricing flexibility here. On the MCI synergies, I’ll take another look at it next year. I probably am always conservative, so what we’ll do is we’ll start with that number and as I work through ’07, we’ll see if we update it as we get into the year. Qaisar Hasan - Buckingham Research: Great, and Doreen, could you just confirm that the freedom rate increase was across your existing base and not just on new customers? Doreen A. Toben: It is my understanding, but we might have to get back to you, that it was across the base. It was not just on new. Qaisar Hasan - Buckingham Research: Great, thank you. Ron Lataille : Thanks. Operator, next question, please.

Thank you. Your next question is from Frank Louthan of Raymond James. Frank Louthan - Raymond James: Good morning, thanks. Quickly, on the data center outlook, give us an idea on what are you seeing in the demand for that or any pricing? As far as your cap-ex expansion on that, are you planning to build entirely new data centers or build out some more? Then, as far as doing the work on trying to keep the install time down on FiOS, maybe a little more color on that. What is the average install time running relative to what the target is? Do you think at some point it might make sense possibly just to run some additional cap five or something like that to try and cut that time down? I know that’s not been part of the strategy, but would that possibly be an additional part of the strategy going forward, given the time constraints you’re running up against? Thanks. Doreen A. Toben: I’ll start on the web hosting. You meant web hosting, right, Frank, when you said data centers? Frank Louthan - Raymond James: Yes, that’s what I meant, yes. Doreen A. Toben: Okay. Yes, we’ve had incredible demand for web hosting all year, and so you’ll probably see us do some more build-outs to try to meet the demand. It’s really been an expanding product segment for us. Obviously it’s in the capital numbers increase that we gave you. Dennis F. Strigl: On the install time for FiOS, as I had mentioned a little bit earlier, we are deploying some time-saving technologies, MOCA being one of them. We’ve got a new software tool to help configure the PCs and also the TVs in the home. We do not disclose the number of hours, but rest assured that we’re doing everything we can to get that number down and to drive costs out of our installation and we’re on the targets that we had established. Frank Louthan - Raymond James: Do you think those processes will be sufficient, or it would, you know, possibly doing some additional wiring as a means just to avoid some of the hold-ups with the wiring in the house? Would that be part of the strategy, something that you would consider down the road? Dennis F. Strigl: Frank, I will comment that we are looking at all opportunities to cut our costs. Frank Louthan - Raymond James: That’s great. Thank you. Ron Lataille : Thanks, Frank. Operator, I would like to now turn the call over to Ivan Seidenberg for some concluding remarks. Ivan G. Seidenberg : Thank you for your questions. As you can see, we feel comfortable and we’re very confident that 2006 turns out to be a very solid year for us. We accomplished some significant repositioning of lots of assets in the business. We were able to unlock some value and create some substantial financial flexibility going forward for the company. As you can see, we’re a simpler, more focused business. All of our groups have momentum leaving ’06 and into ’07, the wireless group and the business group and the teleco group. Also, our Verizon Services group, which is our infrastructure support services group across the business, gained some momentum and they will certainly help to ameliorate a lot of the growth activities we have by some strong, cost management across the company. Business conditions across all three of our groups appear to be gaining some momentum in ’07, so we feel comfortable that the market will provide a little bit of a wind at our back, in addition to all of the investments that we’re making. Frankly, our focus for 2007 is pretty simple: we’re intent on achieving higher sustainable growth rates at the same time we’re delivering bottom-line performance. The management changes we made are clearly geared to help us accelerate getting bottom-line performance with all of the capital we’ve deployed over the last several years going forward. Many of you would like to know what we’re going to do with our cash. We feel we have a great balance sheet. We have done a lot of good things. Doreen mentioned that we’ll continue the share buy-back program that we have now. We’re always looking for ways, as the year unfolds, to further unlock value should the opportunity arise. Having said that, we thank you for your participation and we’re looking forward to a positive 2007. Ron Lataille : Operator, that concludes our call today. Thank you, everybody, for joining us. TRANSCRIPT SPONSOR :

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