• Major Events Overview
  • Calculating Tax Basis
  • Spin-offs

Major Events Overview

 
AT&T Divestiture

Shareowners received one share in each of the seven regional telephone companies for every ten shares of AT&T owned. Shareowners also had the option to purchase additional shares of Bell Atlantic Corporation ("Bell Atlantic") or NYNEX Corporation ("NYNEX") by selling shares in one or more of the other regional companies.

Record Date: December 31, 1983
Effective Date: January 1, 1984
 

Allocation Ratios:
Bell Atlantic 10.49%
NYNEX 9.84%

 

Bell Atlantic/NY NEX Stock Splits

In each of the following Bell Atlantic and NYNEX stock splits, shareowners received one additional share of stock for each share owned.

Bell Atlantic Stock Splits
Record Date: March 31, 1986
Payable Date: April 17, 1986

Record Date: April 10, 1990
Payable Date: May 1, 1990

Record Date: June 1, 1998
Payable Date: June 29, 1998

NYNEX Stock Splits
Record Date: March 31, 1986
Payable Date: May 1, 1986

Record Date: April 10, 1990
Payable Date: May 1, 1990

Record Date: August 16, 1993
Payable Date: September 15, 1993

Record Date: June 1, 1998
Payable Date: June 29, 1998
 

 

GTE Stock Dividends

In each stock dividend, shareholders of GTE Corporation ("GTE") common stock received 1/2 additional share for each share of stock owned as of the record date.

1954 Stock Dividend
Record Date: April 22, 1954
Payable Date: May 15, 1954

1955 Stock Dividend
Record Date: June 3, 1955
Payable Date: June 30, 1955

  
 
GTE Stock Splits

In each stock split, shareholders of GTE common stock received one or more additional shares for each share of common stock owned as of the record date.

1960 3-for-1 Stock Split
Record Date: April 20, 1960
Payable Date: May 20, 1960

1987 3-for-2 Stock Split
Record Date: January 14, 1987
Payable Date: February 12, 1987

1990 2-for-1 Stock Split
Record Date: May 23, 1990
Payable Date: June 22, 1990

 

 

Contel Corporation ("Contel") Stock Split

1989 2-for-1 Stock Split
Payable Date: August 31, 1989

Merger of GTE and Contel

The merger of GTE and Contel became effective on March 14, 1991, with an exchange ratio of 1.27 shares of GTE Common Stock for each share of Contel common stock owned.

Merger of Bell Atlantic and NYNEX

The merger of Bell Atlantic and NYNEX became effective on August 14, 1997, with an exchange ratio of 0.768 shares of Bell Atlantic common stock for each share of NYNEX common stock owned. Fractional shares resulting from the merger were paid based on a price of $74.235 per share of Bell Atlantic common stock.

Merger of Bell Atlantic and GTE to form Verizon Communications

The merger of Bell Atlantic and GTE, became effective on June 30, 2000, with an exchange ratio of 1.22 shares of Bell Atlantic common stock for each share of GTE Common Stock owned. Fractional shares resulting from the merger were paid based on a price of $55.00 per share of Bell Atlantic common stock. Bell Atlantic subsequently changed its name to Verizon Communications Inc.

Merger of Verizon and MCI, Inc. ("MCI")

The merger of Verizon and MCI became effective on January 6, 2006 with an exchange ratio of .5743 shares of Verizon common stock and a cash payment of $2.738 for each share of MCI common stock owned. Fractional shares resulting from the merger were paid based on a price of $31.35 per share of Verizon common stock. Please note that all shares of common stock of WorldCom Inc., MCI's predecessor company, were cancelled and rendered null and void on April 20, 2004, the date that MCI emerged from bankruptcy.

Spin-off from Verizon of Idearc Inc.

The spin-off from Verizon of its domestic print and Internet yellow pages directories publishing operations into the company that was named Idearc Inc. became effective on November 20, 2006. In the distribution, each Verizon stockholder received one share of Idearc common stock for every 20 shares of Verizon common stock held as of 5:00 pm Eastern time on November 1, 2006. Fractional shares resulting from the spin-off were sold at a price of $27.17 per share of Idearc common stock.

Spin-off from Verizon of Northern New England Spinco Inc. ("Spinco") and Merger with FairPoint Communications, Inc.

The spin-off from Verizon of its local exchange and related landline activities in Maine, New Hampshire and Vermont into Spinco and the subsequent merger of Spinco into FairPoint became effective on March 31, 2008. In the distribution, each Verizon stockholder received one share of FairPoint common stock for every 53.0245 shares of Verizon common stock held as of 5:00 pm Eastern time on March 7, 2008. Fractional shares resulting from the spin-off were sold at a price of $7.717 per share of FairPoint common stock.

Spin-off from Verizon of New Communications Holdings Inc. ("Spinco") and Merger with Frontier Communications Corporation.

The spin-off from Verizon of its local exchange and related landline activities in 14 states into Spinco and the subsequent merger of Spinco into Frontier became effective on July 1, 2010. In the distribution, each Verizon stockholder received one share of Frontier common stock for every 4.165977 shares of Verizon common stock held as of 5:00 pm Eastern time on June 7, 2010. Fractional shares resulting from the spin-off were sold at a price of $7.1846 per share of Frontier common stock.

Calculating Tax Basis

 
Calculating Tax Basis in Verizon for Former Bell Atlantic Common Shareowners

Use the original tax basis of your Bell Atlantic common stock to complete one of the following sections based on the date you acquired or purchased that stock. If you acquired or purchased stock on more than one occasion, the tax basis must be determined separately for each transaction.

 

Verizon (formerly Bell Atlantic) Stock Acquired as a Result of the AT&T Divestiture

Original tax basis per AT&T share     __________ (A)
 
Adjust for AT&T Divestiture, three stock splits and spin-offs of Idearc, FairPoint and Frontier   Divide (A) by 8.47916 __________ New Basis

Verizon (formerly Bell Atlantic) Stock Acquired on or after January 1, 1984 through March 31, 1986

Original tax basis per Bell Atlantic share     __________ (A)
 
Adjust for 3 Stock Splits and spin-offs of Idearc,FairPoint and Frontier   Divide (A) by 8.89463 __________ New Basis

Verizon (formerly Bell Atlantic) Stock Acquired on or after April 1, 1986 through April 10, 1990

Original tax basis per Bell Atlantic share     __________ (A)
 
Adjust for 2 Stock Splits and spin-offs of Idearc, FairPoint and Frontier   Divide (A) by 4.44732 __________ New Basis

Verizon (formerly Bell Atlantic) Stock Acquired on or after April 11, 1990 through June 1, 1998

Original tax basis per Bell Atlantic share     __________ (A)
 
Adjust for 1 Stock Split and spin-offs of Idearc, FairPoint and Frontier   Divide (A) by 2.22366 __________ New Basis

Verizon (formerly Bell Atlantic) Stock Acquired on or after June 2, 1998 through November 1, 2006

Original tax basis per Bell Atlantic share     __________ (A)
 
Adjust for spin-offs of Idearc, FairPoint and Frontier   Divide (A) by 1.11183 __________ New Basis

Verizon Stock Acquired on or after November 2, 2006 through March 31, 2008

Original tax basis per Verizon share     __________ (A)
 
Adjust for spin-off of FairPoint and Frontier   Divide (A) by 1.07107 __________ New Basis

Verizon Stock Acquired on or after April 1, 2008 through July 1, 2010

Original tax basis per Verizon share     __________ (A)
 
Adjust for spin-off of Frontier   Divide (A) by 1.06611 __________ New Basis


 

Calculating Tax Basis in Verizon for Former NYNEX Common Shareowners

Use the original tax basis of your NYNEX common stock to complete one of the following sections based on the date you acquired or purchased that stock. If you acquired or purchased stock on more than one occasion, the tax basis must be determined separately for each transaction.

 

NYNEX Stock Acquired as a Result of the AT&T Divestiture

Original tax basis per AT&T share     __________ (A)
 
Adjust for AT&T Divestiture, two NYNEX stock splits, Bell Atlantic merger, Bell Atlantic stock split and spin-offs of Idearc, FairPoint and Frontier   Divide (A) by 6.94215 __________ New Basis

NYNEX Stock Acquired on or after January 1, 1984 through and including March 31, 1986

Original tax basis per NYNEX share     __________ (A)
 
Adjust for two NYNEX stock splits, Bell Atlantic merger, Bell Atlantic stock split and spin-offs of Idearc, FairPoint and Frontier   Divide (A) by 6.83108 __________ New Basis

NYNEX Stock Acquired on or after April 1, 1986 through and including August 16, 1993

Original tax basis per NYNEX share     __________ (A)
 
Adjust for NYNEX stock split, Bell Atlantic merger, Bell Atlantic stock split and spin-offs of Idearc, FairPoint and Frontier   Divide (A) by 3.41554 __________ New Basis

NYNEX Stock Acquired on or after August 17, 1993 through and including August 14, 1997

Original tax basis per NYNEX share     __________ (A)
 
Adjust for Bell Atlantic merger, Bell Atlantic stock split and spin-offs of Idearc, FairPoint and Frontier   Divide (A) by 1.70777 __________ New Basis


 

Calculating Tax Basis in Verizon for Former GTE Common Shareowners

Use the original tax basis of your GTE common stock to complete one of the following sections based on the date you acquired or purchased that stock. If you acquired or purchased GTE stock on more than one occasion, the tax basis must be determined separately for each acquisition.

 

GTE Stock Acquired through and including April 22, 1954

Original tax basis per GTE share     __________ (A)
 
Adjust for two stock dividends, three stock splits, the Bell Atlantic merger and spin-offs of Idearc, FairPoint and Frontier   Divide (A) by 27.46775 __________ New Basis

GTE Stock Acquired after April 22, 1954 through and including June 3, 1955

Original tax basis per GTE share     __________ (A)
 
Adjust for one stock dividends, three stock splits, the Bell Atlantic merger and spin-offs of Idearc, FairPoint and Frontier   Divide (A) by 18.31183 __________ New Basis

GTE Stock Acquired after June 3, 1955 through and including April 20, 1960

Original tax basis per GTE share     __________ (A)
 
Adjust for three stock splits, the Bell Atlantic merger and spin-offs of Idearc, FairPoint and Frontier   Divide (A) by 12.20789 __________ New Basis

GTE Stock Acquired after April 20, 1960 through and including January 14, 1987

Original tax basis per GTE share     __________ (A)
 
Adjust for two stock splits, the Bell Atlantic merger and spin-offs of Idearc, FairPoint and Frontier   Divide (A) by 4.06930 __________ New Basis

GTE Stock Acquired after January 14, 1987 through and including May 23, 1990

Original tax basis per GTE share     __________ (A)
 
Adjust for one stock split, the Bell Atlantic merger and spin-offs of Idearc, FairPoint and Frontier   Divide (A) by 2.71286 __________ New Basis

GTE Stock Acquired after May 23, 1990 through and including June 30, 2000

Original tax basis per GTE share     __________ (A)
 
Adjust for Bell Atlantic merger and spin-offs of Idearc, FairPoint and Frontier   Divide (A) by 1.35643 __________ New Basis


 

Calculating Tax Basis in Verizon for Former Contel Common Shareowners

Use the original tax basis of your Contel common stock to complete one of the following sections based on the date you acquired or purchased that stock. If you acquired or purchased Contel stock on more than one occasion, the tax basis must be determined separately for each acquisition.

 

Contel stock acquired through and including August 31, 1989

Original tax basis per Contel share     __________ (A)
 
Adjust for 1 stock split, GTE/Contel merger, Bell Atlantic/GTE merger and spin-offs of Idearc, FairPoint and Frontier   Divide (A) by 3.44534 __________ New Basis

Contel stock acquired after August 31, 1989 through and including March 14, 1991

Original tax basis per Contel share     __________ (A)
 
Adjust for GTE/Contel merger, Bell Atlantic merger and spin-offs of Idearc, FairPoint and Frontier   Divide (A) by 1.72267 __________ New Basis


 

Calculating Tax Basis in Verizon for Former MCI Shareowners

Use the original tax basis of your MCI stock to complete the following section based on the date you acquired or purchased that stock. If you acquired or purchased MCI stock on more than one occasion, the tax basis must be determined separately for each acquisition.

 

MCI Stock Acquired on or after April 20, 2004 through and including January 6, 2006

Enter the original aggregate tax basis of MCI stock in (A)     __________ (A)
 
Enter merger cash consideration (excluding cash received in lieu of fractional Verizon shares) in (B)     __________ (B)
 
Subtract (B) from (A); enter the difference in (C)     __________ (C)
 
Enter gain recognized, if any, in connection with the transaction (excluding gain associated with cash received in lieu of fractional shares) in (D) 1     __________ (D)
 
Add (C) and (D) and enter the sum in (E)

The new aggregate basis in Verizon stock, before basis reduction for fractional share cash, equals (E).
    __________ (E)
 
Fractional Share Cash Adjustment:
 
Enter cash received for fractional shares in (F)     __________ (F)
 
The basis reduction for fractional share cash equals (F), divided by [(1) the number of shares of MCI exchanged times (2) .5743 times (3) $31.35], times (E); enter result in (G)

(F)  x  (E)
[# of shares of MCI exchanged x .5743 x $31.35]
    __________ (G)
 
Subtract (G) from (E); difference is the new aggregate basis in Verizon stock; enter in (H)     __________ (H)
 
Idearc spin-off — Multiply (H) by .96334; enter in (I)     __________ (I)
 
FairPoint spin-off — Multiply (I) by .995370; enter in (J)     __________ (J)
 
Frontier spin-off — Multiply (J) by .937989; enter in (K)     __________ (K)
 
Your new basis in Verizon = (K)

If you have different tax bases in different blocks of MCI stock (e.g., if you acquired or purchased MCI stock on more than one occasion or at different prices), consult your tax advisor as to the calculation of gain recognized on the receipt of cash for fractional shares and how the basis reduction for fractional share cash should be allocated among the blocks of MCI shares exchanged in the merger.

1 For the amount of gain recognized in connection with the MCI transaction please refer to the section in the Proxy Statement and Prospectus dated August 31, 2005 beginning on page 114 entitled "Material United States Federal Income Tax Considerations-Original Structure and Alternative Merger-Original Structure".

 

Spin-offs

 
Special Note: Different Methods for Calculating Tax Basis in Verizon Following the Spin-off of Idearc

Shareholders of Verizon who received shares of Idearc in the spin-off are required to allocate their aggregate tax basis in their Verizon shares between the Verizon shares and the Idearc shares that they received in the spin-off in proportion to the relative fair market values of their Verizon and Idearc shares (including any cash received in lieu of fractional shares of Idearc). The distribution ratio in the spin-off was one share of Idearc for every twenty shares of Verizon. Verizon stock acquired after November 17, 2006 does not require an adjustment to tax basis for the Idearc spin-off. 

U.S. federal income tax law does not specifically provide a method for determining the fair market values of the Verizon shares and Idearc shares. There are several potential methods for determining the fair market values of the Verizon shares and Idearc shares, including: 

  1. The opening trading prices of Verizon and Idearc on the first regular trading day of the Idearc shares ($34.82 and $26.50, respectively, on November 20, 2006);
  2. The average of the high and low trading prices of the Verizon and Idearc shares on the first regular trading day of the Idearc shares ($34.90 and $27.57, respectively, on November 20, 2006); and
  3. The closing trading prices of Verizon and Idearc on the first regular trading day of the Idearc shares ($34.67 and $28.20, respectively, on November 20, 2006).

There may be other methods to determine the fair market values of shares of Verizon and Idearc for purposes of allocating tax basis following the spin-off.

Verizon is providing an example below of how to allocate a shareholder's aggregate tax basis in Verizon common stock between his or her shares of Verizon and Idearc. This example is provided solely for illustrative purposes and as a convenience because shareholders and their tax advisors may find it useful when establishing their specific tax positions. Please remember that Verizon does not provide its shareholders with tax advice, and this notice is not intended to provide tax advice. Verizon encourages its shareholders to consult with their own tax advisors with their specific questions pertaining to their own tax positions including the application of the tax basis allocation rules to different blocks of Verizon shares acquired at different times and/or at different prices.
 

Example

The following example is based on the first of the three alternatives above. It assumes that a Verizon shareholder owned 100 shares of Verizon that had all been acquired at the same time and for the same price of $30.00 per share, for an aggregate tax basis of $3,000.00 This shareholder received five shares of Idearc in the spin-off. Based on the calculations below using the first of the three alternatives above, the shareholder would allocate $2,890.02 of the original $3,000.00 aggregate tax basis to Verizon shares and $109.98 of the original $3,000.00 aggregate tax basis to Idearc shares.

 

  Verizon   Idearc
Opening price on November 20 $34.82   $26.50
1/20th of Idearc opening price     $1.325
Opening price of Verizon plus
1/20th of Idearc opening price (A)
  $36.145  
Divide opening price of Verizon by (A)
(i.e., $34.82 / $36.145)
96.334%    
Divide 1/20th of Idearc opening price
By (A) (i.e., $1.325 / $36.145)
    3.666%
Allocated tax basis ratios: 96.334%   3.666%
Verizon Tax Basis per share
($30.00 x 96.334%)
$28.9002    
Idearc Tax Basis per share
($30.00 x 3.666% x 20)
    $21.996
New Tax Basis =
    Verizon: 100 shares x $28.9002
    Idearc: 5 shares x $21.996    
$2,890.02  

$109.98
Combined Tax Basis   $3,000.00  
Impact of FairPoint Spin-off =
    Post Idearc Tax Basis of
    $2,890.02 x 99.5370%
$2,876.64    
Impact of Frontier Spin-off =
    Post FairPoint Tax Basis
    $2,876.64 x 93.7989%
$2,698.26    
       


 

Special Note: Different methods for Calculating Tax Basis for Verizon and FairPoint Following the Spin-off and Subsequent Merger of Spinco into FairPoint

Shareholders of Verizon who received shares of FairPoint as a result of the spin-off of Spinco and subsequent merger of the Spinco into FairPoint are required to allocate their aggregate tax basis in their Verizon shares between the Verizon shares and the FairPoint shares that they received in the spin-off / merger in proportion to the relative fair market values of their Verizon and FairPoint shares (including any cash received in lieu of fractional shares of FairPoint). The distribution ratio in the spin-off was 1 share of FairPoint for 53.0245 shares of Verizon. Verizon stock acquired after March 31, 2008 does not require an adjustment to tax basis for this transaction. 

U.S. federal income tax law does not specifically provide a method for determining the fair market values of the Verizon and FairPoint shares. There are several potential methods for determining the fair market values of the Verizon and FairPoint shares, including:

  1. The opening trading prices of Verizon and FairPoint on the New York Stock Exchange ("NYSE") on the first regular trading day (April 1, 2008) following the spin-off / merger; and
  2. The average of the high and low trading prices of the Verizon and FairPoint shares on the NYSE on the first regular trading following the spin-off / merger; and
  3. The closing trading prices of Verizon and FairPoint on the NYSE on the first regular trading day following the spin-off / merger.

There may be other methods to determine the fair market values of shares of Verizon and FairPoint for purposes of allocating tax basis following the spin-off.

Verizon is providing an example below of how to allocate a shareholder's aggregate tax basis in Verizon common stock between his or her shares of Verizon and FairPoint. This example is provided solely for illustrative purposes and as a convenience because shareholders and their tax advisors may find it useful when establishing their specific tax positions. Please remember that Verizon does not provide its shareholders with tax advice, and this notice is not intended to provide tax advice. Verizon encourages its shareholders to consult with their own tax advisors with their specific questions pertaining to their own tax positions including the application of the tax basis allocation rules to different blocks of Verizon shares acquired at different times and/or at different prices.
 

Example

The following example is based on the first of the three alternatives above. It assumes that a Verizon shareholder owned 120 shares of Verizon that had all been acquired at the same time and for the same price of $30.00 per share, for an aggregate tax basis of $3,600.00. This shareholder received 2 shares of FairPoint in the spin-off/merger and cash in lieu ("CIL") of .263 fractional share of FairPoint. Based on the calculations below using the first of the three alternatives above, the shareholder would allocate $3,583.33 of the original $3,600.00 aggregate tax basis to Verizon shares, $14.73 of the original $3,600.00 aggregate tax basis to FairPoint shares and the remaining $1.94 of the original $3,600.00 aggregate tax basis to the .263 fractional share of FairPoint sold for CIL of fractional shares. 

  Verizon   FairPoint
Opening trade on the NYSE of April 1, 2008 $37.18   $9.17
1/53.0245 of FairPoint opening price (A)     $0.1729
Opening price of Verizon plus
1/53.0245 of FairPoint opening price (B)
  $37.35  
Divide opening price of Verizon by (B) (i.e., $37.18 / $37.35) 99.5370%    
Divide 1/53.0245 of FairPoint opening price (A) By (B) (i.e., $0.1729 / $37.35)     0.4630%
Allocated tax basis ratios: 99.5370%   0.4630%
Verizon Tax Basis per share
($30.00 x 99.5370%)
$29.8611    
FairPoint Tax Basis per share
($30.00 x 0.4630% x 53.0245)
    $7.3649
Allocation of New Tax Basis =
    Verizon: 120 shares x $29.8611
    FairPoint: 2 shares x $7.3649    
    FairPoint fractional share of .263 x $7.3649    
$3,583.33  

$14.73
$1.94
Combined Tax Basis   $3,600.00  
Impact of Frontier Spin-off =
    Post FairPoint Tax Basis of
    $3,583.33 x 93.7989%
$3,361.12    
       

 

Special Note: Different Methods for Calculating the Tax Basis for Verizon Communications Inc. Common Stock and Frontier Communications Corporation Common Stock Following the Spin-off / Merger of New Communications Holdings Inc. into Frontier Communications Corporation

Shareholders of Verizon Communications Inc. ("Verizon") who received shares of Frontier Communications Corporation ("Frontier") as a result of the spin-off and subsequent merger of the New Communications Holdings Inc. ("Spinco") into Frontier are required to allocate their aggregate tax basis in their Verizon shares between the Verizon shares and the Spinco/Frontier shares that they received in the spin-off / merger in proportion to the relative fair market values of their Verizon and Frontier shares (including any cash received in lieu of fractional shares of Frontier). The distribution ratio in the spin-off was 1 share of Spinco for 1 share of Verizon. In the subsequent merger, 4.165977 shares of Spinco were exchanged for one share of Frontier. 

U.S. federal income tax law does not specifically provide a method for determining the fair market values of the Verizon and Frontier shares. There are several potential methods for determining the fair market values of the Verizon and Frontier shares, including:

  1. The opening trading prices of Verizon and Frontier on the New York Stock Exchange ("NYSE") on the first regular trading day (July 2, 2010) following the spin-off / merger; and
  2. The average of the high and low trading prices of the Verizon and Frontier shares on the NYSE on the first regular trading following the spin-off / merger; and
  3. The closing trading prices of Verizon and Frontier on the NYSE on the first regular trading day following the spin-off / merger.

There may be other methods to determine the fair market values of shares of Verizon and Frontier for purposes of allocating tax basis following the spin-off.

Verizon is providing an example below of how to allocate a shareholder's aggregate tax basis in Verizon common stock between his or her shares of Verizon and Spinco/Frontier. This example is provided solely for illustrative purposes and as a convenience because shareholders and their tax advisors may find it useful when establishing their specific tax positions. Please remember that Verizon does not provide its shareholders with tax advice, and this notice is not intended to provide tax advice. Verizon encourages its shareholders to consult with their own tax advisors with their specific questions pertaining to their own tax positions including the application of the tax basis allocation rules to different blocks of Verizon shares acquired at different times and/or at different prices.
 

Example

The following example is based on the first of the three alternatives above. It assumes that a Verizon shareholder owned 100 shares of Verizon that had all been acquired at the same time and for the same price of $30.00 per share, for an aggregate tax basis of $3,000.00. This shareholder received 100 shares of Spinco in the spin-off, which were exchanged for 24 shares of Frontier in the merger, plus cash in lieu ("CIL") of a .004 fractional share of Frontier. Based on the calculations below using the first of the three alternatives above, the shareholder would allocate $2,813.97 of the original $3,000.00 aggregate tax basis to Verizon shares (for a tax basis of $28.1397 per share), $186.00 of the original $3,000.00 aggregate tax basis to Frontier shares (for a tax basis of $7.7501 per share), and the remaining $0.03 of the original $3,000.00 aggregate tax basis to the .004 fractional share of Frontier sold for CIL of fractional shares. 

In the calculations below, the original basis in Verizon stock of $30 per share is first allocated between a full share of Verizon stock ($28.1397 per share) and a full share of Spinco stock ($1.8603 per share). This basis per Spinco share is then multiplied by 4.165977, the number of Spinco shares exchanged in the merger for a single share of Frontier. The resulting dollar amount ($7.7501) is the shareholder's basis per share in his or her Frontier stock.

  Verizon   Frontier
Opening trade on the NYSE of July 2, 2010 $27.05   $7.45
1/4.165977 of Frontier opening price (A)     $1.7883
Opening price of Verizon plus
1/4.165977 of Frontier opening price(B)
  $28.8383  
Divide opening price of Verizon by (B) (i.e., $27.05 / $28.84) 93.7989%    
Divide 1/4.165977 of Frontier opening price (A) By (B) (i.e., $1.7883 / $28.8383)     6.2011%
Allocated tax basis ratios: 93.7989%   6.2011%
Verizon Tax Basis per share
($30.00 x 93.7989 %)
$28.1397    
Frontier Tax Basis per share
($30.00 x 6.2011 % x 4.165977)
    $7.7501
Allocation of New Tax Basis =
    Verizon: 100 shares x $28.1397
    Frontier: 24 shares x $7.7501    
    Frontier fractional share of .004 x $7.7501    
$2,813.97  

$186.00
$0.03
Combined Tax Basis   $3,000.00  

To ensure compliance with Treasury Department regulations, we advise you that the information contained herein was not intended or written to be used, and cannot be used, for the purpose of (i) avoiding tax-related penalties under the Internal Revenue Code or applicable state or local tax law provisions or (ii) promoting, marketing or recommending to another party any tax-related matters addressed herein.

This information represents our understanding of existing federal income tax law and regulations and does not constitute tax advice. It does not purport to be complete or to describe tax consequence that may apply to particular categories of shareowners. Please consult your tax advisor for further assistance.