Verizon Wireless 2006 Annual Report Download - page 79

Notes to Consolidated Financial Statements continued
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emissions arising from operations in the 1950s and 1960s at the
Hicksville site. These matters are in various stages, and no trial date
has been set.
In connection with the execution of agreements for the sales of busi-
nesses and investments, Verizon ordinarily provides representations
and warranties to the purchasers pertaining to a variety of nonfinan-
cial matters, such as ownership of the securities being sold, as well
as financial losses.
Subsequent to the sale of Verizon Information Services Canada (see
Note 3), we continue to provide a guarantee to publish directories,
which was issued when the directory business was purchased in
2001 and had a 30-year term (before extensions). The preexisting
guarantee continues, without modification, following the sale of
Verizon Information Services Canada. As a result of the Idearc spin-
off, we continue to be responsible for this guarantee. The possible
financial impact of the guarantee, which is not expected to be
adverse, cannot be reasonably estimated since a variety of the
potential outcomes available under the guarantee result in costs and
revenues or benefits that may offset. In addition, performance under
the guarantee is not likely.
As of December 31, 2006, letters of credit totaling $223 million had
been executed in the normal course of business, which support sev-
eral financing arrangements and payment obligations to third parties.
We have several commitments primarily to purchase network serv-
ices, equipment and software from a variety of suppliers totaling $812
million. Of this total amount, $566 million, $164 million, $53 million,
$11 million, $5 million and $13 million are expected to be purchased
in 2007, 2008, 2009, 2010, 2011 and thereafter, respectively.
Several state and federal regulatory proceedings may require our
telephone operations to pay penalties or to refund to customers a
portion of the revenues collected in the current and prior periods.
There are also various legal actions pending to which we are a party
and claims which, if asserted, may lead to other legal actions. We
have established reserves for specific liabilities in connection with
regulatory and legal actions, including environmental matters, that we
currently deem to be probable and estimable. We do not expect that
the ultimate resolution of pending regulatory and legal matters in
future periods, including the Hicksville matters described below, will
have a material effect on our financial condition, but it could have a
material effect on our results of operations.
During 2003, under a government-approved plan, remediation com-
menced at the site of a former Sylvania facility in Hicksville, New York
that processed nuclear fuel rods in the 1950s and 1960s.
Remediation beyond original expectations proved to be necessary
and a reassessment of the anticipated remediation costs was con-
ducted. A reassessment of costs related to remediation efforts at
several other former facilities was also undertaken. In September
2005 the Army Corps of Engineers (ACE) accepted the Hicksville site
into the Formerly Utilized Sites Remedial Action Program. This may
result in the ACE performing some or all of the remediation effort for
the Hicksville site with a corresponding decrease in costs to Verizon.
To the extent that the ACE assumes responsibility for remedial work
at the Hicksville site, an adjustment to a reserve previously estab-
lished for the remediation may be made. Adjustments may also be
made based upon actual conditions discovered during the remedia-
tion at any of the sites requiring remediation.
There are also litigation matters associated with the Hicksville site pri-
marily involving personal injury claims in connection with alleged
NOTE 21
COMMITMENTS AND CONTINGENCIES