VZ - Verizon Communications Inc. - Verizon Reaches Agreement To Acquire Vodafone's 45 Percent Interest In Verizon Wireless For $130 Billion Transcript

    Company Name:Verizon Communications Inc.
    Event Title:Verizon Reaches Agreement To Acquire Vodafone's 45 Percent Interest In Verizon Wireless For $130 Billion Transcript
    Event Date:03-Sep-2013
    Event Time:08:00 AM ET



    Good morning and welcome to the Verizon Conference Call to discuss its purchase of Vodafone's interest in Verizon Wireless . At this time, all participants have been placed in a listen-only mode and the floor will be opened for questions following the presentation. [Operator Instructions]. Today's conference call is being recorded. If you have any objections [Operator Instructions]. It is now my pleasure to turn the call over to your host, Mr. Michael Stefanski, Senior Vice President, Investor Relations.

    Michael Stefanski

    Senior Vice President, Investor Relations
    Thanks operator. Good morning and thank you for joining us on short notice. This is Mike Stefanski and with me to discuss our definitive agreement to acquire Vodafone stake in Verizon Wireless are Lowell McAdam, our Chairman and Chief Executive Officer, Fran Shammo, our Chief Financial Officer and Matt Ellis our Treasurer.

    Before we get started let me point out that yesterday's press release and the presentation slides for this call are available on the Verizon Investor Relations website. This call is being webcast. Replays and a transcript of this call will also be available on our website.

    I would also like to draw your attention to our Safe Harbor statement and other legends on slides two and three.

    Information in this presentation contains statements about expected future events and financial results that are forward-looking and subject to risks and uncertainties. Discussion of factors that may effect future results is contained in Verizon's filings with the SEC which are also available on our website. This presentation contains certain non-GAAP financial measures.

    Reconciliations of these non- GAAP measures to the most directly comparable GAAP measures are also available on our website.

    With that I will now turn the call over to Lowell.

    Lowell C. McAdam

    Chairman and Chief Executive Officer
    Thanks Mike and again good morning everyone.

    After a decade of anticipation, I'm very pleased to be here today discussing our definitive agreement with Vodafone to acquire their 45% stake in Verizon Wireless . After the transaction closes, Verizon will be the sole owner of Verizon Wireless . This is really a natural next step for Verizon, full ownership of our Wireless asset marks a major milestone for our company. I think there is no better way to deploy our capital than to invest in an asset that today generates more than $80 billion in annual revenue , provides 50% service margin and generates significant cash flows and is uniquely positioned for future growth and profitability.

    Our strategic investment in Verizon Wireless over the last 13 years has been a cornerstone of our business strategy. Our focus on customers, network reliability and new technology have been the ingredients of a successful partnership with Vodafone making it the largest and most profitable Wireless provider in the United States. The timing of this transaction is right from both a strategic and financial perspective and it offers substantial, commercial and operating benefits. Sole ownership of Verizon Wireless significantly improves our financial and growth profile and enhances value across all Verizon platforms.

    From a financial perspective, the capital markets environment is favorable.

    We will use a balanced mix of cash and common stock to fund the transaction. As we said last January, we have the capacity to execute the transaction. It is designed to be self-funding as the incremental free cash flow we will acquire exceeds incremental after-tax interest expense and dividends.

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