Independent Auditors - Verizon

VERIZON COMMUNICATIONS INC. AND SUBSIDIARIESREPORT OF MANAGEMENT ON INTERNAL CONTROL OVERFINANCIAL REPORTINGREPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTINGFIRM ON INTERNAL CONTROL OVER FINANCIAL REPORTINGWe, the management of Verizon Communications Inc., are responsiblefor establishing and maintaining adequate internal control over financialreporting of the company. Management has evaluated internal controlover financial reporting of the company using the criteria for effectiveinternal control established in Internal Control–Integrated Frameworkissued by the Committee of Sponsoring Organizations of the TreadwayCommission.Management has assessed the effectiveness of the company’s internalcontrol over financial reporting as of December 31, 2012. Based on thisassessment, we believe that the internal control over financial reportingof the company is effective as of December 31, 2012. In connection withthis assessment, there were no material weaknesses in the company’sinternal control over financial reporting identified by management.The company’s financial statements included in this Annual Reporthave been audited by Ernst & Young LLP, independent registered publicaccounting firm. Ernst & Young LLP has also provided an attestationreport on the company’s internal control over financial reporting.Lowell C. McAdamChairman and Chief Executive OfficerFrancis J. ShammoExecutive Vice President and Chief Financial OfficerRobert J. BarishSenior Vice President and ControllerTo The Board of Directors and Shareowners of VerizonCommunications Inc.:We have audited Verizon Communications Inc. and subsidiaries’ (Verizon)internal control over financial reporting as of December 31, 2012,based on criteria established in Internal Control–Integrated Frameworkissued by the Committee of Sponsoring Organizations of the TreadwayCommission (the COSO criteria). Verizon’s management is responsiblefor maintaining effective internal control over financial reporting, andfor its assessment of the effectiveness of internal control over financialreporting included in the accompanying Report of Management onInternal Control Over Financial Reporting. Our responsibility is to expressan opinion on the company’s internal control over financial reportingbased on our audit.We conducted our audit in accordance with the standards of the PublicCompany Accounting Oversight Board (United States). Those standardsrequire that we plan and perform the audit to obtain reasonable assuranceabout whether effective internal control over financial reportingwas maintained in all material respects. Our audit included obtaining anunderstanding of internal control over financial reporting, assessing therisk that a material weakness exists, testing and evaluating the designand operating effectiveness of internal control based on the assessedrisk, and performing such other procedures as we considered necessaryin the circumstances. We believe that our audit provides a reasonablebasis for our opinion.A company’s internal control over financial reporting is a process designedto provide reasonable assurance regarding the reliability of financialreporting and the preparation of financial statements for external purposesin accordance with generally accepted accounting principles. Acompany’s internal control over financial reporting includes those policiesand procedures that (1) pertain to the maintenance of records that,in reasonable detail, accurately and fairly reflect the transactions anddispositions of the assets of the company; (2) provide reasonable assurancethat transactions are recorded as necessary to permit preparation offinancial statements in accordance with generally accepted accountingprinciples, and that receipts and expenditures of the company are beingmade only in accordance with authorizations of management and directorsof the company; and (3) provide reasonable assurance regardingprevention or timely detection of unauthorized acquisition, use, or dispositionof the company’s assets that could have a material effect on thefinancial statements.48

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTINGFIRM ON FINANCIAL STATEMENTSBecause of its inherent limitations, internal control over financial reportingmay not prevent or detect misstatements. Also, projections of any evaluationof effectiveness to future periods are subject to the risk that controlsmay become inadequate because of changes in conditions, or that thedegree of compliance with the policies or procedures may deteriorate.In our opinion, Verizon maintained, in all material respects, effectiveinternal control over financial reporting as of December 31, 2012, basedon the COSO criteria.We also have audited, in accordance with the standards of the PublicCompany Accounting Oversight Board (United States), the consolidatedbalance sheets of Verizon as of December 31, 2012 and 2011, and therelated consolidated statements of income, comprehensive income, cashflows and changes in equity for each of the three years in the periodended December 31, 2012 of Verizon and our report dated February 26,2013 expressed an unqualified opinion thereon.Ernst & Young LLPNew York, New YorkFebruary 26, 2013To The Board of Directors and Shareowners of VerizonCommunications Inc.:We have audited the accompanying consolidated balance sheets ofVerizon Communications Inc. and subsidiaries (Verizon) as of December31, 2012 and 2011, and the related consolidated statements of income,comprehensive income, cash flows and changes in equity for each ofthe three years in the period ended December 31, 2012. These financialstatements are the responsibility of Verizon’s management. Our responsibilityis to express an opinion on these financial statements based onour audits.We conducted our audits in accordance with the standards of the PublicCompany Accounting Oversight Board (United States). Those standardsrequire that we plan and perform the audit to obtain reasonableassurance about whether the financial statements are free of materialmisstatement. An audit includes examining, on a test basis, evidencesupporting the amounts and disclosures in the financial statements. Anaudit also includes assessing the accounting principles used and significantestimates made by management, as well as evaluating the overallfinancial statement presentation. We believe that our audits provide areasonable basis for our opinion.In our opinion, the financial statements referred to above present fairly,in all material respects, the consolidated financial position of Verizonat December 31, 2012 and 2011, and the consolidated results of itsoperations and its cash flows for each of the three years in the periodended December 31, 2012, in conformity with U.S. generally acceptedaccounting principles.We also have audited, in accordance with the standards of the PublicCompany Accounting Oversight Board (United States), Verizon’s internalcontrol over financial reporting as of December 31, 2012, based on criteriaestablished in Internal Control–Integrated Framework issued by theCommittee of Sponsoring Organizations of the Treadway Commissionand our report dated February 26, 2013 expressed an unqualified opinionthereon.Ernst & Young LLPNew York, New YorkFebruary 26, 201349