Says Customer Reaction to MCI Acquisition Has Been Positive
NEW YORK, March 7 /PRNewswire/ -- The progress made by Verizon
Communications Inc. (NYSE: VZ) in improving its balance sheet put the company
in position to increase its dividend, Verizon CFO Doreen Toben told analysts
in Florida today.
On March 4, Verizon's Board of Directors declared a quarterly dividend of
40.5 cents per outstanding share, an increase of 2 cents, or 5.2 percent, from
the previous quarter.
Noting that this was the first dividend increase since 1997 for Verizon
and its predecessor companies, Toben said, "During a time of transformation in
our industry, Verizon has not only provided a stable dividend, but we have
also made steady progress in strengthening our balance sheet. Our strong cash
flows have given us the flexibility to reward shareowners with a dividend
increase, even as we continue to invest in the technologies that will make
Verizon more competitive in the future."
Toben added, "Our board reviews dividend policy annually, and in doing so
it evaluates dividend increases, debt reduction and capital investment to
strike the right balance to increase the value of an investment in Verizon."
Verizon's total debt, which exceeded $63.5 billion in 2001, was reduced to
$39.3 billion by year-end 2004, including a reduction of $6.1 billion last
year. In 2004, Verizon's cash flows from operating activities were $21.8
billion. Total operating revenues were $71.3 billion, a 5.7 percent increase
compared with 2003.
"One of the areas that gives me confidence in the sustainability of the
performance of our business is Verizon Wireless," Toben said, noting that
wireless revenues grew 23.0 percent, to $27.7 billion, in 2004. Verizon's
wireline operating revenues increased sequentially over the last three
quarters of 2004, contributing to the company's ability "to keep margins
relatively stable as Verizon moves to a more growth-oriented revenue profile,"
Toben said.
MCI Transaction Discussed
At today's Raymond James Institutional Investors Conference, Toben also
noted that the planned acquisition of MCI Inc. would help Verizon accelerate
its position in the large-business, Enterprise market.
Since the Feb. 14 announcement of Verizon's signed agreement with MCI,
"Enterprise customer feedback has been very positive," Toben said. "With the
combined Verizon-MCI, customers see a provider with a full product suite of
wireline and wireless solutions with long-term staying power and commitment to
the marketplace."
Regarding Verizon's March 2 announcement that it agreed to let MCI and
Qwest Communications International Inc. have further discussions through March
17, Toben said, "We felt this was the right thing to do for all involved, and
we remain confident that we are the best partner for MCI with the most
compelling value proposition for its shareholders."
Verizon continues the process of obtaining regulatory approval for the
transaction. Filings are planned later today in 16 states and the District of
Columbia; filings have already been made in New York, New Jersey and
Connecticut. Verizon has also begun the approval process at the Department of
Justice, and Toben said the Federal Communications Commission application will
be filed soon.
As previously announced, Verizon and MCI expect to complete all state and
federal regulatory approvals in about a year.
With more than $71 billion in annual revenues, Verizon Communications Inc.
(NYSE: VZ) is one of the world's leading providers of communications services.
Verizon has a diverse work force of more than 210,000 in four business units:
Domestic Telecom serves customers based in 29 states with wireline
telecommunications services, including broadband, nationwide long-distance and
other services. Verizon Wireless owns and operates the nation's most reliable
wireless network, serving 43.8 million voice and data customers across the
United States. Information Services operates directory publishing businesses
and provides electronic commerce services. International includes wireline
and wireless operations and investments, primarily in the Americas and Europe.
For more information, visit http://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 News Center on the World Wide Web at
http://www.verizon.com/news. To receive news releases by e-mail, visit the
News Center and register for customized automatic delivery of Verizon news
releases.
NOTE: This press release contains statements about expected future events
and financial results that are forward-looking and subject to risks and
uncertainties. For those statements, we claim the protection of the safe
harbor for forward-looking statements contained in the Private Securities
Litigation Reform Act of 1995. The following important factors could affect
future results and could cause those results to differ materially from those
expressed in the forward-looking statements: materially adverse changes in
economic and industry conditions and labor matters, including workforce levels
and labor negotiations, and any resulting financial and/or operational impact,
in the markets served by us or by companies in which we have substantial
investments; material changes in available technology; technology
substitution; an adverse change in the ratings afforded our debt securities by
nationally accredited ratings organizations; the final results of federal and
state regulatory proceedings concerning our provision of retail and wholesale
services and judicial review of those results; the effects of competition in
our markets; the timing, scope and financial impacts of our deployment of
fiber-to-the-premises broadband technology; the ability of Verizon Wireless to
continue to obtain sufficient spectrum resources; 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; a significant change in the timing of, or the
imposition of any government conditions to, the closing of our business
combination transaction with MCI, Inc.; actual and contingent liabilities in
connection with the MCI transaction; and the extent and timing of our ability
to obtain revenue enhancements and cost savings following the MCI transaction.
Verizon intends to file a registration statement, including a proxy
statement of MCI, and other materials with the Securities and Exchange
Commission ("SEC") in connection with the proposed transaction. We urge
investors to read these documents when they become available because they will
contain important information. Investors will be able to obtain free copies
of the registration statement and proxy statement, as well as other filed
documents containing information about Verizon and MCI, at http://www.sec.gov,
the SEC's website. Investors may also obtain free copies of these documents
at http://www.verizon.com/investor, or by request to Verizon Communications
Inc., Investor Relations, 1095 Avenue of the Americas, 36th Floor, New York,
NY 10036. Free copies of MCI's filings are available at
http://www.mci.com/about/investor_relations, or by request to MCI, Inc.,
Investor Relations, 22001 Loudoun County Parkway, Ashburn, VA 20147.
Verizon, MCI, and their respective directors, executive officers, and
other employees may be deemed to be participants in the solicitation of
proxies from MCI shareowners with respect to the proposed transaction.
Information about Verizon's directors and executive officers is available in
Verizon's proxy statement for its 2004 annual meeting of shareholders, dated
March 15, 2004. Information about MCI's directors and executive officers is
available in MCI's annual report on Form 10-K for the year ended December 31,
2003. Additional information about the interests of potential participants
will be included in the registration statement and proxy statement and other
materials filed with the SEC.
SOURCE Verizon
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