Verizon to take $3 Billion Charges for Accounting Changes

Verizon Communications will take approximately $3.0 billion in charges in Q2 primarily driven by an accounting change in its directory business and by the effect of its recent decision to sell its consolidated interest in Grupo Iusacell in Mexico. Regarding the directories business, Verizon said it has changed its method for recognizing revenues and expenses, resulting in an after-tax, non-cash charge to earnings of approximately $1.6 billion, or $0.59 in fully diluted EPS, retroactive to 02-Jan-2003. As a result of Verizon’s recent decision to sell its consolidated interest in Grupo Iusacell, the company expects to record a Q2 after-tax charge to earnings of $0.9 billion, or $0.33 per diluted share. Verizon also anticipates recording second-quarter after-tax charges to earnings of approximately $0.4 billion to $0.5 billion, or $0.14 to $0.19 per diluted share, related to severance, the early redemption of debt, and impairments of long-lived assets primarily due to consolidation and integration of facilities.
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