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
There are also various legal actions pending to which
we are a party
and claims which, if asserted, may lead to other legal
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
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
at the site of a former Sylvania facility in Hicksville,
that processed nuclear fuel rods in the 1950s and
Remediation beyond original expectations proved to
and a reassessment of the anticipated remediation
costs was conducted.
A reassessment of costs related to remediation efforts
several other former facilities was also undertaken.
2005 the Army Corps of Engineers (ACE) accepted the
into the Formerly Utilized Sites Remedial Action Program.
result in the ACE performing some or all of the remediation
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
for the remediation may be made. Adjustments may also
made based upon actual conditions discovered during
at any of the sites requiring remediation.
There are also litigation matters associated with
the Hicksville site primarily
involving personal injury claims in connection with
alleged 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 businesses
and investments, Verizon ordinarily provides representations
and warranties to the purchasers pertaining to a variety
matters, such as ownership of the securities being
sold, as well
as financial losses.
Subsequent to the sale of Verizon Information Services
Note 3), we continue to provide a guarantee to publish
which was issued when the directory business was purchased
2001 and had a 30-year term (before extensions). The
guarantee continues, without modification, following
the sale of
Verizon Information Services Canada. As a result of
the Idearc spinoff,
we continue to be responsible for this guarantee.
financial impact of the guarantee, which is not expected
adverse, cannot be reasonably estimated since a variety
potential outcomes available under the guarantee result
in costs and
revenues or benefits that may offset. In addition,
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
financing arrangements and payment obligations to
We have several commitments primarily to purchase
equipment and software from a variety of suppliers
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.
* This is an interactive electronic version of Verizon’s 2006
Annual Report to Shareholders, and it is intended to be complete and
accurate. The contents of this version are qualified in their entirety
by reference to the printed version. A reproduction of the printed version
is available in PDF format on this website.