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Press release from PR Newswire

Verizon Reports Strong Revenue and Customer Growth for Verizon Wireless and FiOS Services in 4Q 2012

Tuesday, January 22, 2013

Verizon Reports Strong Revenue and Customer Growth for Verizon Wireless and FiOS Services in 4Q 201206:30 EST Tuesday, January 22, 2013Earnings Impacted by Previously Announced Non-Operational ChargesNEW YORK, Jan. 22, 2013 /PRNewswire/ --4Q 2012 HIGHLIGHTSWireless8.5 percent year-over-year increase in service revenues in 4Q 2012; 8.4 percent year-over-year increase in retail service revenues. 2.2 million retail net additions, excluding acquisitions and adjustments, including a record-high 2.1 million retail postpaid net connections; low retail postpaid churn of 0.95 percent; 98.2 million total retail connections, 92.5 million total retail postpaid connections. 4G LTE service now available to more than 273 million people in 476 markets across the U.S. Wireline 4.1 percent year-over-year increase in consumer revenues; consumer ARPU (average revenue per user) up 9.5 percent year over year, to $105.63. 144,000 FiOS Internet and 134,000 FiOS Video net additions, with continued increased sales penetration for both services; 5.4 million total FiOS Internet, 4.7 million total FiOS Video customers. Consolidated Earnings A loss of $1.48 in earnings per share (EPS), compared with a loss of 71 cents per share in 4Q 2011, impacted by non-cash pension items in both quarters and additional non-operational debt retirement and other restructuring items in 4Q 2012. A 7-cent-per-share impact due to Superstorm Sandy yielded 38 cents per share in adjusted EPS (non-GAAP), compared with 52 cents in adjusted EPS in 4Q 2011.Verizon Communications Inc. (NYSE, Nasdaq: VZ) today reported strong customer and revenue growth in Verizon Wireless and Verizon FiOS services in fourth-quarter 2012 -- positioning the company well for 2013.Verizon Wireless reported record-setting customer additions in the quarter, while Verizon FiOS customer additions were higher in fourth-quarter 2012 than in the prior two quarters, despite the impact of Superstorm Sandy."Verizon seized growth opportunities in the fourth quarter to cap a year of solid progress across the entire business," said Lowell McAdam, Verizon chairman and CEO.  "We delivered a total return of 13.2 percent to shareholders in 2012, and we enter 2013 ready to accelerate the momentum we've achieved and create significant shareholder value in the years to come."4Q and Full-Year Earnings ResultsDue to the impact of non-operational items announced earlier this month, Verizon reported a loss of $1.48 in EPS in fourth-quarter 2012, compared with a fourth-quarter 2011 loss of 71 cents per share.A reduction of 7 cents per share due to impacts from Superstorm Sandy yielded a total of 38 cents per share in adjusted fourth-quarter 2012 earnings (non-GAAP).  Fourth-quarter 2012 charges totaled $1.86 per share: $1.55 per share related to severance, pension and benefit charges primarily for the annual actuarial valuation of Verizon's benefit plans as well as the annuitization of various pension liabilities during the quarter, and 31 cents per share related to the early retirement of debt and other restructuring activities.Comparable adjusted fourth-quarter 2011 earnings of 52 cents per share excluded charges of $1.23 per share, primarily related to the valuation of pension plans.On an annual basis, Verizon reported 31 cents in 2012 EPS, compared with 85 cents per share in 2011.  Adjusted annual EPS (non-GAAP) was $2.24 in 2012, compared with $2.15 in 2011.Revenue Growth Across All Strategic Areas; Continued Strong Cash FlowIn fourth-quarter 2012, Verizon's consolidated quarterly operating revenues exceeded $30.0 billion for the first time in company history.  This represented a 5.7 percent increase compared with fourth-quarter 2011 and was the company's highest year-over-year quarterly growth rate in 2012.For full-year 2012, Verizon's revenues totaled $115.8 billion, an increase of 4.5 percent, or $5.0 billion, compared with 2011.  In fourth-quarter 2012, Verizon saw year-over-year revenue increases across all strategic growth areas: 8.5 percent for Verizon Wireless service revenues, 15.7 percent for FiOS revenues and 5.3 percent for strategic enterprise services.Cash flow from operating activities totaled $31.5 billion in 2012, an increase of 5.7 percent compared with $29.8 billion in 2011.Capital expenditures were $16.2 billion in 2012, including $135 million in companywide capital related to Superstorm Sandy recovery efforts, and totaled about $70 million less than in 2011.  Free cash flow (non-GAAP, cash flow from operations less capex) was $15.3 billion for the year, an increase of 13.1 percent compared with $13.5 billion in 2011.Verizon maintained a strong balance sheet, with year-end 2012 total debt of $52.0 billion, down from $55.2 billion at year-end 2011.Verizon Wireless Delivers Record-High Customer Additions and Strong Revenue GrowthIn fourth-quarter 2012, Verizon Wireless delivered the highest number of retail postpaid net additions of any quarter in its history, strong growth in revenues, an increase in smartphone penetration, and continued low retail postpaid churn.Wireless Financial HighlightsTotal revenues were $20.0 billion in fourth-quarter 2012, up 9.5 percent year over year.  Service revenues in the quarter totaled $16.4 billion, up 8.5 percent year over year.  Retail service revenues grew 8.4 percent year over year, to $15.8 billion. For full-year 2012, total revenues were $75.9 billion, up 8.1 percent over full-year 2011, and service revenues were $63.7 billion in 2012, up 7.7 percent year over year. Retail postpaid ARPA (average revenue per account) grew 6.6 percent over fourth-quarter 2011, to $146.80 per month.  As customers continue to add multiple devices to accounts following the introduction of the Share Everything Plan in June, Verizon Wireless now reports ARPA instead of ARPU since customers can share data among multiple devices. In fourth-quarter 2012, wireless operating income margin was 24.0 percent and segment EBITDA margin on service revenues (non-GAAP) was 41.4 percent, down 80 basis points from fourth-quarter 2011.  For full-year 2012, operating income margin was 28.7 percent, up 230 basis points from full-year 2011; segment EBITDA margin was 46.6 percent, up 180 basis points year over year. Wireless Operational HighlightsVerizon Wireless added 2.2 million net retail connections in the fourth quarter, including a record-high 2.1 million retail postpaid net connections.  The company added 5.0 million net retail postpaid connections in 2012, the most in four years.  These additions exclude acquisitions and adjustments. At the end of 2012, the company had 98.2 million retail connections, a 6.6 percent increase year over year -- including 92.5 million retail postpaid connections. Verizon Wireless had 35.1 million retail postpaid accounts at the end of the fourth quarter, a 1.4 percent increase over the fourth quarter 2011, and an average of 2.6 connections per account, up 4.3 percent year over year. At year-end 2012, smartphones accounted for more than 58 percent of the Verizon Wireless retail postpaid customer phone base, up from 53 percent at the end of third-quarter 2012. Retail postpaid churn was 0.95 percent in the fourth quarter and retail churn was 1.24 percent, both up 1 basis point year over year. Verizon Wireless continued to roll out its 4G LTE mobile broadband network, the largest 4G LTE network in the U.S.  As of today (Jan. 22), Verizon Wireless 4G LTE service is available to more than 273 million people -- close to 89 percent of the population -- in 476 markets across the U.S. The company continued to enhance its device lineup with new smartphones and tablets. In the fourth quarter, Verizon Wireless launched eight 4G LTE smartphones: the DROID RAZR HD and DROID RAZR MAXX HD by Motorola; Windows Phone 8X by HTC; Nokia Lumia 822; Samsung Galaxy Note II; Spectrum 2 by LG; Samsung Galaxy Stratosphere II; and the DROID DNA by HTC.  In addition, Verizon Wireless launched three tablets in the quarter: the Samsung Galaxy Tab 2, Apple iPad with Retina display and Apple iPad mini. Verizon Wireless announced it will begin offering shared data plans for business on Jan. 24, 2013, with the Share Everything Plan for Small Business and the Nationwide for Business Data Packages and Plans. Wireline Reports Continued Strong FiOS Customer and Revenue GrowthIn the Wireline segment, FiOS customer growth in fourth-quarter 2012 was greater than in the prior two quarters, despite the disruption caused by Superstorm Sandy.  In global enterprise and wholesale, increased sales of strategic services continued to help mitigate lower revenues resulting from secular and global economic impacts.Wireline Financial HighlightsFourth-quarter 2012 operating revenues were $10.0 billion, a decline of 1.5 percent compared with fourth-quarter 2011.  Consumer revenues grew 4.1 percent compared with fourth-quarter 2011.  On an annual basis, 2012 consumer revenues totaled $14.0 billion, an increase of 3.2 percent compared with 2011 and Verizon's highest annual revenue growth rate in consumer wireline in 10 years. Consumer ARPU for wireline services increased to $105.63 in fourth-quarter 2012, up 9.5 percent compared with fourth-quarter 2011. ARPU for FiOS customers continues to be more than $150.  FiOS services produced about 68 percent of consumer wireline revenues in fourth-quarter 2012.  About two-thirds of FiOS consumer customers have purchased a "triple play" of phone, Internet and video services. Global enterprise revenues totaled $3.8 billion in the quarter, down 2.1 percent compared with fourth-quarter 2011.  Sales of strategic services increased 5.3 percent compared with fourth-quarter 2011 and represented 54 percent of global enterprise revenues.  Strategic services include Verizon Terremark cloud and data center services, security and IT solutions, advanced communications, and strategic networking. For 2012, wireline operating income margin was 0.2 percent and wireline EBITDA margin (non-GAAP) was 21.3 percent, including the negative impact of fourth-quarter storm recovery.  Excluding identifiable storm impacts (non-GAAP), wireline operating income margin was 1.0 percent and wireline EBITDA margin was 22.1 percent. Wireline Operational HighlightsVerizon added 144,000 net new FiOS Internet connections and 134,000 net new FiOS Video connections in fourth-quarter 2012.  Verizon had a total of 5.4 million FiOS Internet and 4.7 million FiOS Video connections at the end of the quarter, representing year-over-year increases of 12.6 percent and 13.3 percent, respectively. FiOS penetration (subscribers as a percentage of potential subscribers) continued to increase.  FiOS Internet penetration was 37.3 percent at the end of fourth-quarter 2012, compared with 35.5 percent at the end of fourth-quarter 2011.  In the same periods, FiOS Video penetration was 33.3 percent, compared with 31.5 percent.  The FiOS network passed 17.6 million premises at year-end 2012. Broadband connections totaled 8.8 million at year-end 2012, a 1.4 percent year-over-year increase. Revenues from broadband connections grew 3.1 percent -- to $3.5 billion for full-year 2012 -- over the same period, driven by customer purchases of higher-speed FiOS services. Verizon has been replacing high-maintenance portions of its residential copper network with fiber optics to provide enhanced services and to reduce ongoing repair costs. In 2012, Verizon migrated 223,000 homes to fiber, which contributed to an 11 percent improvement in trouble reports across Verizon's entire copper network for the year.  The company has a target of 300,000 additional migrations within FiOS markets in 2013. To meet rapidly growing customer-traffic demands, Verizon deployed additional 100G (gigabits per second) technology on network routes in the U.S. and Europe in fourth-quarter 2012.  In the U.S., these high-capacity routes included Atlanta to Tampa, Kansas City to Dallas and Salt Lake City to Seattle.  During 2012, the company added 13,000 miles to its 100G network in the U.S. Verizon Enterprise Solutions completed agreements with multinational and U.S. corporations The Coca-Cola Company, Hongkong and Shanghai Hotels Ltd., Bridgestone Americas, CME Group, Redbox and Shred-It for advanced business technology solutions. Verizon Enterprise Solutions launched a comprehensive cloud and data center infrastructure portfolio specifically designed to help the health care industry meet the federal Health Insurance Portability and Accountability Act (HIPAA) requirements for safeguarding electronic protected health information. NOTE: See the accompanying schedules and www.verizon.com/investor  for reconciliations to generally accepted accounting principles (GAAP) for non-GAAP financial measures cited in this document.Verizon Communications Inc. (NYSE, Nasdaq: VZ), headquartered in New York, is a global leader in delivering broadband and other wireless and wireline communications services to consumer, business, government and wholesale customers.  Verizon Wireless operates America's most reliable wireless network, with more than 98 million retail connections nationwide.  Verizon also provides converged communications, information and entertainment services over America's most advanced fiber-optic network, and delivers integrated business solutions to customers in more than 150 countries, including all of the Fortune 500.  A Dow 30 company with nearly $116 billion in 2012 revenues, Verizon employs a diverse workforce of 183,400.  For more information, visit www.verizon.com. VERIZON'S ONLINE NEWS CENTER: Verizon news releases, executive speeches and biographies, media contacts, high-quality video and images, and other information are available at Verizon's online News Center at www.verizon.com/news.  To receive news releases by email, visit the News Center and register for customized automatic delivery of Verizon news releases.NOTE: This presentation contains statements about expected future events and financial results that are forward-looking and subject to risks and uncertainties. For those statements, we claim the protection of the safe harbor for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995. The following important factors could affect future results and could cause those results to differ materially from those expressed in the forward-looking statements: adverse conditions in the U.S. and international economies; competition in our markets; material changes in available technology or technology substitution; disruption of our key suppliers' provisioning of products or services; changes in the regulatory environments in which we operate, including any increase in restrictions on our ability to operate our networks; breaches of network or information technology security, natural disasters, terrorist attacks or significant litigation and any resulting financial impact not covered by insurance; an adverse change in the ratings afforded our debt securities by nationally accredited ratings organizations or adverse conditions in the credit markets impacting the cost, including interest rates, and/or availability of financing; 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; significant increases in benefit plan costs or lower investment returns on plan assets; and the inability to implement our business strategies. Verizon Communications Inc.Condensed Consolidated Statements of Income(dollars in millions, except per share amounts) 3 Mos. Ended  3 Mos. Ended  12 Mos. Ended  12 Mos. Ended Unaudited12/31/1212/31/11 % Change 12/31/1212/31/11 % Change Operating Revenues$      30,045$     28,4365.7$     115,846$     110,8754.5Operating ExpensesCost of services and sales13,06912,0908.146,27545,8750.9Selling, general and administrative expense16,00813,27820.639,95135,62412.1Depreciation and amortization expense4,1374,180(1.0)16,46016,496(0.2)Total Operating Expenses33,21429,54812.4102,68697,9954.8Operating Income (Loss)(3,169)(1,112)*13,16012,8802.2Equity in earnings of unconsolidated businesses8797(10.3)324444(27.0)Other income and (expense), net(1,079)(84)*(1,016)(14)*Interest expense(575)(703)(18.2)(2,571)(2,827)(9.1)Income (Loss) Before (Provision) Benefit for Income Taxes(4,736)(1,802)*9,89710,483(5.6)(Provision) Benefit for income taxes2,8101,59076.7660(285)*Net Income (Loss)$       (1,926)$         (212)*$       10,557$       10,1983.5Net income attributable to noncontrolling interest$        2,303$        1,81127.2$          9,682$          7,79424.2Net income (loss) attributable to Verizon(4,229)(2,023)*8752,404(63.6)Net Income (Loss)$       (1,926)$         (212)*$       10,557$       10,1983.5Basic Earnings (Loss) per Common Share Net income (loss) attributable to Verizon$         (1.48)$           (.71)*$              .31$              .85(63.5)Weighted average number of common shares (in millions)2,8622,8352,8532,833Diluted Earnings (Loss) per Common Share (1)Net income (loss) attributable to Verizon$         (1.48)$           (.71)*$              .31$              .85(63.5)Weighted average number of common shares-assuming dilution (in millions)2,8622,8352,8622,839Footnotes:(1)If there is a net loss, diluted EPS is the same as basic EPS. Diluted Earnings per Common Share includes the dilutive effect of shares issuable under our stock-based compensation plans.Certain reclassifications have been made, where appropriate, to reflect comparable operating results.*Not meaningful Verizon Communications Inc.Condensed Consolidated Balance Sheets(dollars in millions)Unaudited12/31/1212/31/11 $ Change AssetsCurrent assetsCash and cash equivalents$               3,093$             13,362$       (10,269)Short-term investments470592(122)Accounts receivable, net12,57611,776800Inventories1,075940135Prepaid expenses and other4,0214,269(248)Total current assets21,23530,939(9,704)Plant, property and equipment209,575215,626(6,051)Less accumulated depreciation120,933127,192(6,259)88,64288,434208Investments in unconsolidated businesses3,4013,448(47)Wireless licenses77,74473,2504,494Goodwill24,13923,357782Other intangible assets, net5,9335,87855Other assets4,1285,155(1,027)Total Assets$           225,222$           230,461$         (5,239)Liabilities and EquityCurrent liabilitiesDebt maturing within one year$               4,369$               4,849$            (480)Accounts payable and accrued liabilities16,18214,6891,493Other6,40511,223(4,818)Total current liabilities26,95630,761(3,805)Long-term debt 47,61850,303(2,685)Employee benefit obligations34,34632,9571,389Deferred income taxes24,67725,060(383)Other liabilities6,0925,472620EquityCommon stock297297-Contributed capital37,99037,91971Reinvested earnings (Accumulated deficit)(3,734)1,179(4,913)Accumulated other comprehensive income 2,2351,269966Common stock in treasury, at cost(4,071)(5,002)931Deferred compensation - employee stock ownership plans and other440308132Noncontrolling interest 52,37649,9382,438Total equity85,53385,908(375)Total Liabilities and Equity$           225,222$           230,461$         (5,239)Verizon - Selected Financial and Operating Statistics Unaudited12/31/1212/31/11Total debt (in millions)$             51,987$             55,152Net debt (in millions)$             48,894$             41,790Net debt / Adjusted EBITDA (1)1.3x1.2xCommon shares outstanding end of period (in millions)2,8592,834Total employees 183,400193,900Quarterly cash dividends declared per common share$               0.515$               0.500Footnotes:(1)Adjusted EBITDA excludes the effects of non-operational items.The unaudited condensed consolidated balance sheets are based on preliminary information. Verizon Communications Inc.Condensed Consolidated Statements of Cash Flows(dollars in millions) 12 Mos. Ended  12 Mos. Ended Unaudited12/31/1212/31/11 $ Change Cash Flows From Operating ActivitiesNet Income$        10,557$        10,198$            359Adjustments to reconcile net income to net cash provided byoperating activities:Depreciation and amortization expense16,46016,496(36)Employee retirement benefits8,1987,426772Deferred income taxes(952)(223)(729)Provision for uncollectible accounts9721,026(54)Equity in earnings of unconsolidated businesses, net of dividends received773641Changes in current assets and liabilities, net of effects fromacquisition/disposition of businesses(403)(2,279)1,876Other, net(3,423)(2,900)(523)Net cash provided by operating activities31,48629,7801,706Cash Flows From Investing ActivitiesCapital expenditures (including capitalized software)(16,175)(16,244)69Acquisitions of investments and businesses, net of cash acquired(913)(1,797)884Acquisitions of Wireless licenses, net(3,935)(221)(3,714)Net change in short-term investments2735(8)Other, net494977(483)Net cash used in investing activities(20,502)(17,250)(3,252)Cash Flows From Financing ActivitiesProceeds from long-term borrowings4,48911,060(6,571)Repayments of long-term borrowings and capital    lease obligations(6,403)(11,805)5,402Increase (decrease) in short-term obligations, excluding     current maturities(1,437)1,928(3,365)Dividends paid (5,230)(5,555)325Proceeds from sale of common stock31524174Special distribution to noncontrolling interest(8,325)-(8,325)Other, net(4,662)(1,705)(2,957)Net cash used in financing activities(21,253)(5,836)(15,417)Increase (decrease) in cash and cash equivalents(10,269)6,694(16,963)Cash and cash equivalents, beginning of period13,3626,6686,694Cash and cash equivalents, end of period$           3,093$        13,362$    (10,269) Verizon Communications Inc.Verizon Wireless ? Selected Financial Results(dollars in millions) 3 Mos. Ended  3 Mos. Ended  12 Mos. Ended  12 Mos. Ended Unaudited12/31/1212/31/11 % Change 12/31/1212/31/11 % Change Operating RevenuesRetail service $     15,786$     14,5628.4$       61,440$       56,6608.4Other service 60754411.62,2932,497(8.2)Service 16,39315,1068.563,73359,1577.7Equipment 2,5592,21515.58,0237,4577.6Other1,04293311.74,1123,54016.2Total Operating Revenues19,99418,2549.575,86870,1548.1Operating ExpensesCost of services and sales7,3326,7079.324,49024,0861.7Selling, general and administrative expense5,8775,16713.721,65019,57910.6Depreciation and amortization expense1,9942,045(2.5)7,9607,962-Total Operating Expenses15,20313,9199.254,10051,6274.8Operating Income$        4,791$        4,33510.5$       21,768$       18,52717.5Operating Income Margin24.0%23.7%28.7%26.4%Segment EBITDA$        6,785$        6,3806.3$       29,728$       26,48912.2Segment EBITDA Service Margin41.4%42.2%46.6%44.8%Footnotes:The segment financial results and metrics above are adjusted to exclude the effects of non-operational items, as the Company's chief operating decision maker excludes these items in assessing business unit performance.Intersegment transactions have not been eliminated.Certain reclassifications have been made, where appropriate, to reflect comparable operating results. Verizon Communications Inc.Verizon Wireless ? Selected Operating StatisticsUnaudited12/31/1212/31/11 % Change Connections ('000)Retail postpaid92,53087,3825.9Retail prepaid 5,7004,78519.1Retail 98,23092,1676.6 3 Mos. Ended  3 Mos. Ended  12 Mos. Ended  12 Mos. Ended Unaudited12/31/1212/31/11 % Change 12/31/1212/31/11 % Change Net Add Detail ('000)(1)Retail postpaid2,1001,20774.05,0244,25218.2Retail prepaid 142252(43.7)893372*Retail 2,2421,45953.75,9174,62428.0Account StatisticsRetail Postpaid Accounts ('000)(2)35,05734,5611.4Retail postpaid ARPA$     146.80$     137.696.6$       144.04$       134.517.1Retail postpaid connections per account (2)2.642.534.3Churn Detail Retail postpaid 0.95%0.94%0.91%0.95%Retail 1.24%1.23%1.19%1.26%Retail Postpaid Connection StatisticsTotal Smartphone postpaid % of phones sold86.5%70.3%78.4%62.6%Total Smartphone postpaid phone base (2)58.1%43.5%Total Internet postpaid base (2)9.3%8.1%Other Operating StatisticsCapital expenditures (in millions)$        2,791$        1,78756.2$          8,857$          8,973(1.3)Footnotes:(1)Connection net additions exclude acquisitions and adjustments.(2)Statistics presented as of end of period.The segment financial results and metrics above are adjusted to exclude the effects of non-operational items, as the Company's chief operating decision maker excludes these items in assessing business unit performance.Intersegment transactions have not been eliminated.Certain reclassifications have been made, where appropriate, to reflect comparable operating results.*Not meaningful Verizon Communications Inc.Wireline ? Selected Financial Results(dollars in millions)3 Mos. Ended 3 Mos. Ended 12 Mos. Ended 12 Mos. Ended Unaudited12/31/1212/31/11% Change 12/31/1212/31/11% Change Operating RevenuesConsumer retail $ 3,569$ 3,4294.1$ 14,043$ 13,6063.2Small business660684(3.5)2,6592,731(2.6)Mass Markets4,2294,1132.816,70216,3372.2Strategic services 2,0901,9845.38,0527,5756.3Core1,7561,945(9.7)7,2478,047(9.9)Global Enterprise3,8463,929(2.1)15,29915,622(2.1)Global Wholesale 1,7701,938(8.7)7,2407,973(9.2)Other145159(8.8)539750(28.1)Total Operating Revenues9,99010,139(1.5)39,78040,682(2.2)Operating Expenses Cost of services and sales5,8785,5116.722,41322,1581.2Selling, general and administrative expense2,3132,2134.58,8839,107(2.5)Depreciation and amortization expense2,1252,1150.58,4248,458(0.4)Total Operating Expenses10,3169,8394.839,72039,723-Operating Income (Loss)$ (326)$ 300*$ 60$ 959(93.7)Operating Income Margin(3.3)%3.0%0.2%2.4%Segment EBITDA$ 1,799$ 2,415(25.5)$ 8,484$ 9,417(9.9)Segment EBITDA Margin18.0%23.8%21.3%23.1%Footnotes:The segment financial results and metrics above are adjusted to exclude the effects of non-operational items, as the Company's chief operating decision maker excludes these items in assessing business unit performance.Intersegment transactions have not been eliminated.Certain reclassifications have been made, where appropriate, to reflect comparable operating results.*Not meaningful Verizon Communications Inc.Wireline ? Selected Operating StatisticsUnaudited12/31/1212/31/11 % Change Connections ('000)FiOS Video Subscribers4,7264,17313.3FiOS Internet Subscribers5,4244,81712.6FiOS Digital Voice residence connections 3,2271,88471.3FiOS Digital connections13,37710,87423.0HSI 3,3713,853(12.5)Total Broadband connections8,7958,6701.4Primary residence switched access connections7,9829,906(19.4)Primary residence connections11,20911,790(4.9)Total retail residence voice connections11,84912,626(6.2)Total voice connections22,50324,137(6.8) 3 Mos. Ended  3 Mos. Ended  12 Mos. Ended  12 Mos. Ended Unaudited12/31/1212/31/11 % Change 12/31/1212/31/11 % Change Net Add Detail ('000)FiOS Video Subscribers134194(30.9)553701(21.1)FiOS Internet Subscribers144201(28.4)607735(17.4)FiOS Digital Voice residence connections 289424(31.8)1,3431,06725.9FiOS Digital connections567819(30.8)2,5032,503-HSI (117)(103)13.6(482)(457)5.5Total Broadband connections2798(72.4)125278(55.0)Primary residence switched access connections(402)(550)(26.9)(1,924)(1,851)3.9Primary residence connections(113)(126)(10.3)(581)(784)(25.9)Total retail residence voice connections(156)(183)(14.8)(777)(990)(21.5)Total voice connections(344)(382)(9.9)(1,634)(1,864)(12.3)Revenue and ARPU StatisticsConsumer ARPU$      105.63$        96.439.5$        101.77$          93.079.3FiOS revenues (in millions)$        2,565$        2,21615.7$          9,722$          8,29317.2Strategic services as a % of total Enterprise revenues54.3%50.5%52.6%48.5%Other Operating StatisticsCapital expenditures (in millions)$        1,725$        1,6325.7$          6,342$          6,399(0.9)Wireline employees ('000) 86.491.8FiOS Video Open for Sale ('000)14,20013,250FiOS Video penetration33.3%31.5%FiOS Internet Open for Sale ('000)14,52813,585FiOS Internet penetration37.3%35.5%Footnotes:The segment financial results and metrics above are adjusted to exclude the effects of non-operational items, as the Company's chief operating decision maker excludes these items in assessing business unit performance.Intersegment transactions have not been eliminated.Certain reclassifications have been made, where appropriate, to reflect comparable operating results.  SOURCE Verizon Communications Inc.For further information: Peter Thonis, +1-212-395-2355, peter.thonis@verizon.com or Bob Varettoni, +1-908-559-6388, robert.a.varettoni@verizon.com