Verizon Wireless 2009 Annual Report Download - page 4

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In September, our Board of Directors approved a 3.3 percent increase in our dividend, the third such
increase in as many years. At a time when private capital investments in the U.S. are at near-
historic lows, Verizon invested approximately $17 billion in infrastructure in 2009, which is critical
to our maintaining the network superiority that is the essence of our brand. Thanks to these
investments, we continued to add customers and grow revenues in broadband, wireless and
strategic business services.
Our 2009 performance shows the effects of the prolonged economic downturn. Adjusted
earnings before interest, taxes and depreciation declined by 0.9 percent for 2009 on a pro forma
basis, to $35.7 billion, and adjusted earnings per share from continuing operations for the year
declined by 5.5 percent, to $2.40 per share. While our strategic areas performed well, overall growth
slowed as persistent unemployment and delayed investment on the part of business customers
dampened volumes in long-distance and wholesale.
Still, with our stable revenues, strong balance sheet and good fundamentals, we are
weathering the economic storm reasonably well and continuing to press forward with our growth
agenda.
We made progress on several strategic initiatives to realign our assets around broadband and
wireless. Early in 2009 we completed our acquisition of Alltel, making us the largest wireless
company in the U.S. as measured by the total number of customers and revenues. We reached an
agreement to spin off some rural telephone assets to Frontier, a transaction we expect to complete
in the fi rst half of 2010. And in keeping with our belief in high-quality networks, we continued to
build an advanced wireless and broadband infrastructure and deliver the innovative products,
services and applications that are driving our industry and transforming our society.
Verizon Wireless performed strongly again in 2009. We added 5.9 million customers to end the
year with 91.2 million customers, and we earned $62.1 billion in revenues, up 6.1 percent. (These
numbers are pro forma adjusted to refl ect the Alltel acquisition.) Consumer Reports ranked us #1 in
customer satisfaction across all the markets they surveyed, a testament to our continued focus on
network excellence and customer service.
Data revenues grew 31 percent in 2009 on a pro forma basis and now account for almost 30
percent of service revenues, and with the proliferation of smart phones we have tremendous
headroom for growth. Looking ahead, we see wireless data traffi c more than doubling every year
and mobile connections increasingly being embedded into the physical world, built into everything
we touch. Verizon Wireless currently operates the nation’s largest and most reliable third-
generation wireless data network, and we are moving forward with plans for a nationwide
fourth-generation network based on a global standard called LTE, for “Long-Term Evolution.” This
$43.9
$49.3
$62.1
Wireless
Revenue
(billions)
07 08 09
63.7 70.0
87.5
Wireless Retail
Customers
(millions)
07 08 09
2
In Their Own Words
On wireless transformation:
“Verizon’s fourth-generation (4G) network technology will dramatically enhance
wireless data speeds, opening a new world of devices, content and applications
that will ride on it. Expect to see mobile video-sharing, conferencing and
streaming all in higher definition than is possible today. There will be an
explosion of consumer electronics embedded with 4G. Moreover, 4G will have
the capacity to enable a whole new wireless grid of machine-to-machine
connections. The growth potential is extraordinary.”
- Lowell McAdam, EVP and President and CEO – Verizon Wireless
On financial performance:
“I believe that our results show good operating and financial discipline
throughout the business. Our strong focus on managing costs and capital
spending allowed us to maximize free cash flow and return cash to
shareowners. Our Board’s decision to approve a dividend increase for the third
consecutive year demonstrates confidence in the strength of our cash flow
and balance sheet, as well as our commitment to reward shareowners while
continuing to invest for long-term growth.”
- John Killian, EVP and CFO – Verizon