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 doers 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: # 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); # 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 # 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. Additional information & an example can be found at: http:/investor.verizon.com/shareowner/cost_basis_worksheet.aspx
