Verizon continues focus on network superiority with agreement to purchase XO Communications' fiber business

NEW YORK, Feb. 22, 2016 /PRNewswire/-- In a move to continue to strengthen the foundation of America's best networks, Verizon Communications Inc. (NYSE, Nasdaq: VZ) today announced it has signed an agreement to purchase XO Communications' fiber-optic network business for approximately $1.8 billion.

Verizon's ownership of XO's fiber-based IP (Internet protocol) and Ethernet networks will help better serve enterprise and wholesale customers. In addition, acquired fiber facilities will help Verizon continue to densify its cell network.

The transaction is subject to customary regulatory approvals and is expected to close in the first half of 2017.

Verizon expects to receive several financial benefits from the transaction, including a step-up in the basis of the assets as well as operating and capital expense savings. The net present value of the operational synergies is expected to be in excess of $1.5 billion.

Separately, Verizon will simultaneously lease available XO wireless spectrum, with an option to buy XO's entity that holds its spectrum by year-end 2018.

Citigroup Global Markets Inc acted as financial adviser and Debevoise & Plimpton LLP acted as legal adviser to Verizon.

Verizon Communications Inc. (NYSE, Nasdaq: VZ) employs a diverse workforce of 177,700 and generated nearly $132 billion in 2015 revenues. Verizon operates America's most reliable wireless network, with more than 112 million retail connections nationwide. Headquartered in New York, the company also provides communications and entertainment services over America's most advanced fiber-optic network, and delivers integrated business solutions to customers worldwide.

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Forward-looking statements
In this communication we have made forward-looking statements. These statements are based on our estimates and assumptions and are subject to risks and uncertainties. Forward-looking statements include the information concerning our possible or assumed future results of operations. Forward-looking statements also include those preceded or followed by the words "anticipates," "believes," "estimates," "hopes" or similar expressions. For those statements, we claim the protection of the safe harbor for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995. The following important factors, along with those discussed in our filings with the Securities and Exchange Commission (the "SEC"), could affect future results and could cause those results to differ materially from those expressed in the forward-looking statements: adverse conditions in the U.S. and international economies; the effects of competition in the markets in which we operate; material changes in technology or technology substitution; disruption of our key suppliers' provisioning of products or services; changes in the regulatory environment in which we operate, including any increase in restrictions on our ability to operate our networks; breaches of network or information technology security, natural disasters, terrorist attacks or acts of war or significant litigation and any resulting financial impact not covered by insurance; our high level of indebtedness; an adverse change in the ratings afforded our debt securities by nationally accredited ratings organizations or adverse conditions in the credit markets affecting the cost, including interest rates, and/or availability of further financing; material adverse changes in labor matters, including labor negotiations, and any resulting financial and/or operational impact; significant increases in benefit plan costs or lower investment returns on plan assets; changes in tax laws or treaties, or in their interpretation; changes in accounting assumptions that regulatory agencies, including the SEC, may require or that result from changes in the accounting rules or their application, which could result in an impact on earnings; and the inability to implement our business strategies.

Media contact:
Bob Varettoni
908.559.6388
[email protected] 

SOURCE Verizon

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