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Archive for April 27th, 2009

Oclaro (Formerly Bookham) Announces Third Quarter Fiscal Year 2009 Results

Oclaro (Formerly Bookham) Announces

Third Quarter Fiscal Year 2009 Results


SAN JOSE, Calif., – April 27, 2009 – Oclaro, Inc. (Nasdaq: OCLR), formerly Bookham, Inc. (Nasdaq: BKHM), a leading provider of optical components, modules and subsystems, today announced the financial results of Bookham, Inc. for the third quarter of its fiscal year 2009, ended March 28, 2009.


Third Quarter Fiscal 2009 GAAP Results

Revenues for the third quarter of fiscal 2009 were $47.0 million, compared to $50.2 million in the second quarter of fiscal 2009, and $59.7 million in the third quarter of fiscal 2008. Revenues in the third quarter of fiscal 2009 include $1.9 million recognized upon collection of cash from shipments made to Nortel Networks and a related contract manufacturer in the second quarter of fiscal 2009. An aggregate of $5.4 million in revenue related to shipments to these customers (including the $1.9 million recognized in this quarter), had been deferred from recognition as revenues in the second quarter of fiscal 2009 as payment was not deemed to be collectable at the time of shipment.


Gross margin for the third quarter of fiscal 2009 was 23 percent, compared to gross margin of 17 percent in the second quarter of fiscal 2009, and gross margin of 22 percent in the third quarter of fiscal 2008. Excluding the $1.9 million positive impact from the recognition of revenues on prior quarter shipments described above, gross margin for the third quarter of fiscal 2009 was 20 percent.


Net loss in the third quarter of fiscal 2009 was $13.3 million, or a net loss of $0.13 per share, compared with a net loss of $6.5 million, or a net loss of $0.06 per share, in the second quarter of fiscal 2009 and a net loss of $5.4 million, or a net loss of $0.05 per share, in the third quarter of fiscal 2008. The third quarter fiscal 2009 net loss includes $4.0 million from a non-cash charge for impairment of intangible assets and $3.7 million of expense for legal settlement and related costs. The second quarter fiscal 2009 net loss included a non-cash gain of $9.9 million from the translation to United States dollars of foreign currency denominated balances on the balance sheets of certain foreign subsidiaries and a non-cash charge of $7.9 million from an impairment of goodwill.


Cash, cash equivalents, short-term investments and restricted cash at March 28, 2009 were $38.3 million compared to $44.7 million at December 27, 2008.


Third Quarter Fiscal 2009 Non-GAAP Results

Adjusted EBITDA for the third quarter of fiscal 2009 was negative $0.7 million, compared to negative $3.3 million in the second quarter of fiscal 2009, and negative $1.1 million in the third quarter of fiscal 2008. Adjusted EBITDA for the third quarter of fiscal 2009 included a $1.9 million positive impact from the recognition of revenues on prior quarter shipments described above.


Non-GAAP gross margin was 24 percent in the third quarter of fiscal 2009, compared to 19 percent in the second quarter of fiscal 2009 and 23 percent in the third quarter of fiscal 2008. Non-GAAP gross margin in third quarter of fiscal 2009 excludes $0.3 million of stock based compensation. Excluding the $1.9 million positive impact from the recognition of revenues on prior quarter shipments described above, non-GAAP gross margin in the third quarter of fiscal 2009 would have been 21 percent.


Non-GAAP net loss for the third quarter of fiscal 2009 was $4.4 million, or non-GAAP net loss of $0.04 per share. This compares with a non-GAAP net income of $3.3 million or non-GAAP net income of $0.03 per share, in the second quarter of fiscal 2009 and a non-GAAP net loss of $3.4 million, or non-GAAP net loss of $0.03 per share, in the third quarter of fiscal 2008.


A reconciliation table of non-GAAP measures to the most comparable GAAP measures is included in the financial tables section of this release and further discussion of these measures is also included later in this release.


Non-cash stock-based compensation expense for the third quarter of fiscal 2009, second quarter of fiscal 2009 and third quarter of fiscal 2008 was $1.1 million, $1.0 million and $1.2 million, respectively.


“Despite the lower third quarter revenues that were driven by the economic downturn, we held our adjusted EBITDA close to break even,” said Alain Couder, president and CEO of Oclaro, Inc. “We continued to execute throughout our business as we positioned ourselves towards achieving our goal of profitability. Moving forward, we expect the merger with Avanex Corporation, which closed today, to further accelerate our progress towards profitability. Under our new corporate name, “Oclaro,” our combined companies are well positioned to leverage our complementary product portfolios, operational synergies and strong balance sheet to accelerate our progress to our long-term financial model.”


Fourth Quarter Fiscal 2009 Outlook

The results of Oclaro, Inc. for the fourth quarter of fiscal 2009, which ends June 27, 2009, and which include the results of Bookham Inc. for the full quarter and the results of Avanex Corporation from April 28, 2009 through June 27, 2009, are expected to be as follows:

• Revenues in the range of $67 million to $75 million

• Non-GAAP gross margin between 17 percent and 23 percent, which excludes stock-based compensation

• Adjusted EBITDA in the range of negative $5.0 million to breakeven


The foregoing guidance is based on current expectations. This guidance is forward looking, and actual results may differ materially. Please see the Safe Harbor Statement in this release for a description of certain important risk factors that could cause actual results to differ, and refer to Ocarlo, Inc.’s (formerly Bookham Inc.) most recent annual and quarterly reports on file with the Securities and Exchange Commission (SEC) for a more complete description of the risks. Furthermore, our outlook excludes items that may be required by GAAP, including, but not limited to, restructuring and related costs, acquisition or disposal related costs, expenses or income from certain legal actions, settlements and related costs outside our normal course of business, impairments of goodwill and other long-lived assets, extraordinary items, as well as the expensing of equity-based awards under SFAS 123R.


Conference Call

Oclaro will report financial results for the third quarter of fiscal 2009 today at 2:30 p.m. PT/5:30 p.m. ET. To listen to the live conference call, please dial (480) 629-9677. A replay of the conference call will be available through May 4, 2009. To access the replay, dial (303) 590-3030. The conference code for the replay is 4058498. A webcast of this call will be available in the investors section of Oclaro’s website at www.oclaro.com.


About Oclaro

Oclaro, with headquarters in San Jose, California, is a tier 1 provider of high performance optical components, modules and subsystems to the telecommunications market, and is one of the largest providers to metro and long haul network applications. Oclaro, the result of the combination of Bookham, Inc. and Avanex Corporation on April 27, 2009, leverages proprietary core technologies and vertically integrated product development to provide its customers with cost-effective and innovative optical devices, modules and subsystems. The company serves a broad customer base, combining in-house and outsourced manufacturing to maximize flexibility and drive improved gross margin. Its photonic technologies also serve selected potential high growth markets, including industrial, defense, life sciences, semiconductor, and scientific, with diversification providing both significant potential revenue streams and strategic technological advantage. Oclaro is a global company, with leading chip fabrication facilities in the UK, Switzerland and Italy, and manufacturing sites in the US, Thailand and China.


Oclaro and all other Oclaro product names and slogans are trademarks or registered trademarks of Oclaro, Inc. in the USA or other countries.


Safe Harbor Statement

This press release contains statements about management’s future expectations, plans or prospects of Oclaro, Inc. and its business that constitute forward-looking statements for the purposes of the safe harbor provisions of The Private Securities Litigation Reform Act of 1995, including all information under the caption “Fourth Quarter Fiscal 2009 Outlook” and including statements concerning (i) achieving profitability in the future, (ii) impact of the merger with Avanex Corporation on the progress of achieving the Company’s business plans, (iii) achievement and timing for achieving long-term financial models and (iv) statements containing the words “target,” “believe,” “plan,” “anticipate,” “expect,” “estimate,” “will,” “should,” “ongoing,” “goal,” and similar expressions. There are a number of important factors that could cause actual results or events to differ materially from those indicated by such forward-looking statements, including the impact of continued uncertainty in world financial markets and the resulting reduction in demand for our products, the future performance of Oclaro, Inc. following the closing of the merger with Avanex Corporation, our ability to effectively and efficiently integrate the Avanex operations with our operations, the inability to realize the expected benefits and synergies as a result of the of the merger with Avanex Corporation, increased costs related to downsizing and compliance with regulatory compliance in connection with such downsizing, the lack of availability of credit or opportunity for equity based financing, as well as the factors described in Oclaro’s most recent registration statement on Form S-4, most recent annual report on Form 10-K, most recent quarterly reports on Form 10-Q and other documents we periodically file with the SEC. These factors include continued demand for optical components, changes in inventory and product mix, degradation in the exchange rate of the United States dollar relative to U.K., China and Switzerland currencies, as well as the Euro, and the continued ability of the Company to maintain requisite financial resources. The forward-looking statements included in this announcement represent Oclaro’s view as of the date of this presentation. Oclaro anticipates that subsequent events and developments may cause Oclaro’s views and expectations to change. However, Oclaro specifically disclaims any intention or obligation to update any forward-looking statements as a result of developments occurring after the date of this release. Those forward-looking statements should not be relied upon as representing Oclaro’s views as of any date subsequent to the date of this presentation.


Non-GAAP Financial Measures

To provide investors with the opportunity to use the same financial metrics as management to evaluate the Company’s performance, the Company provides certain supplemental non-GAAP financial measures, including: 1) non-GAAP net income/loss excluding non-cash stock and option-based compensation, charges such as impairment and restructuring, income taxes, and expenses or income from certain legal actions, settlements and related costs outside the ordinary course of business; 2) a measure of Adjusted EBITDA, that also excludes these charges, plus, among others, the impact of net interest income/expense, depreciation and amortization, impairment of short-term investments and net foreign currency translation gain/loss; and 3) non-GAAP operating loss that excludes amortization of intangible assets, non-cash stock and option-based compensation, charges such as impairment and restructuring, and expenses or income from certain legal actions, settlements and related costs outside the normal course of business 4) non-GAAP gross margin that excludes Non-GAAP gross margin rate is calculated as gross margin rate as determined in accordance with GAAP (gross profit as a percentage of revenues) excluding non-cash compensation related to stock and options; and certain other significant non-recurring one-time charges and credits specifically identified in the non-GAAP reconciliation schedules set forth below.. These are made available to investors to allow them the opportunity to use the same financial metrics as management to evaluate the Company’s performance. Oclaro also believes these non-GAAP measures enhance the comparability and transparency of results for the periods reported. These measures should be considered in addition to results prepared in accordance with accounting principles generally accepted in the United States (“GAAP”), but should not be considered a substitute for, or superior to, GAAP results.


Non-GAAP Net Income/Loss

Non-GAAP net income/loss is calculated as net income/loss excluding the impact of restructuring and severance costs, non-cash compensation related to stock and options granted to employees and directors, income taxes, impairment charges and certain other one-time charges and credits specifically identified in the non-GAAP reconciliation schedules set forth below. The Company evaluates its performance using, among other things, non-GAAP net income/loss in evaluating the Company’s historical and prospective operating financial performance, as well as its operating performance relative to its competitors. Specifically, management uses this non-GAAP measure to further understand the Company’s “core operating performance.” The Company believes its “core operating performance” represents the Company’s on-going performance in the ordinary course of its operations. Accordingly, management excludes from “core operating performance” those items, such as impairment charges, income taxes, restructuring and severance programs and costs relating to specific major projects which are non-recurring, expenses or income from certain legal actions, settlements and related costs, as well as non-cash compensation related to stock and options. Management does not believe these items are reflective of the Company’s ongoing operations and accordingly excludes those items from non-GAAP net income/loss.


The Company believes that providing non-GAAP net income/loss to its investors, in addition to corresponding income statement measures, provides investors the benefit of viewing the Company’s performance using the same financial metrics that the management team uses in making many key decisions and understanding how the core business and its results of operations may look in the future. The Company further believes that providing this information allows the Company’s investors greater transparency and a better understanding of the Company’s core financial performance. Additionally, non-GAAP net income/loss has historically been presented by the Company as a complement to net loss, thus increasing the consistency and comparability of the Company’s earnings releases. The non-GAAP adjustments, and the basis for excluding them, are discussed further below.


Non-GAAP financial measures are not in accordance with, or an alternative for, generally accepted accounting principles in the United States. Non-GAAP net income/loss should not be considered in isolation from or as a substitute for financial information presented in accordance with generally accepted accounting principles, and may be different from non-GAAP net income/loss used by other companies. The GAAP measure most directly comparable to non-GAAP net income/loss is net income/loss. A reconciliation of non-GAAP net income/loss to GAAP net income/loss is set forth in the schedules below.


Adjusted EBITDA

Adjusted EBITDA is calculated as net income/loss excluding the impact of taxes, net interest income/expense, depreciation and amortization, net foreign currency translation gains/losses, as well as restructuring and severance, impairment, non-cash compensation related to stock and options, expenses or income from certain legal actions, settlements and related costs outside our normal course of business and certain other one-time charges and credits specifically identified in the non-GAAP reconciliation schedules set forth below. The Company uses Adjusted EBITDA in evaluating the Company’s historical and prospective cash usage, as well as its cash usage relative to its competitors. Specifically, management uses this non-GAAP measure to further understand and analyze the cash used in/generated from the Company’s core operations. The Company believes that by excluding these non-cash and non-recurring charges, more accurate expectations of its future cash needs can be assessed in addition to providing a better understanding of the actual cash used in or generated from core operations for the periods presented.


Management does not believe the excluded items are reflective of the Company’s ongoing operations and accordingly excludes those items from Adjusted EBITDA. The Company believes that providing Adjusted EBITDA to its investors, in addition to corresponding GAAP cash flow measures, provides investors the benefit of viewing the Company’s performance using the same financial metrics that the management team uses in making many key decisions that impact the Company’s cash position and understanding how the cash position may look in the future. The Company further believes that providing this information allows the Company’s investors greater transparency and a better understanding of the Company’s core cash position.


Non-GAAP financial measures are not in accordance with, or an alternative for, generally accepted accounting principles (GAAP) in the United States. Adjusted EBITDA should not be considered in isolation from or as a substitute for financial information presented in accordance with generally accepted accounting principles, and may be different from non-GAAP measures used by other companies. The GAAP measure most directly comparable to Adjusted EBITDA is net income/loss. A reconciliation of Adjusted EBITDA to GAAP net income/loss is set forth in the financial schedules section below.


Non-GAAP Gross Margin Rate

Non-GAAP gross margin rate is calculated as gross margin rate as determined in accordance with GAAP (gross profit as a percentage of revenues) excluding non-cash compensation related to stock and options; and certain other significant non-recurring one-time charges and credits specifically identified in the non-GAAP reconciliation schedules set forth below.


The Company evaluates its performance using non-GAAP gross margin rate to assess the Company’s historical and prospective operating financial performance, as well as its operating performance relative to its competitors. Specifically, management uses this non-GAAP measure to further understand the Company’s “core operating performance.” The Company believes its “core operating performance” represents the Company’s on-going performance in the ordinary course of its operations. Accordingly, management excludes from “core operating performance” those items such as non-cash compensation related to stock and options; and certain other significant non-recurring one-time charges and credits specifically identified. Management does not believe these items are reflective of the Company’s ongoing operations and accordingly excludes those items from non-GAAP gross margin rate.


The Company believes that providing non-GAAP gross margin rate to its investors, in addition to corresponding income statement measures, provides investors the benefit of viewing the Company’s performance using the same financial metrics that the management team uses in making many key decisions and understanding how the core business and its results of operations may look in the future. The Company further believes that providing this information allows the Company’s investors greater transparency and a better understanding of the Company’s core financial performance. The non-GAAP adjustments, and the basis for excluding them, are discussed further below.


Non-GAAP financial measures are not in accordance with, or an alternative for, generally accepted accounting principles in the United States. Non-GAAP gross margin rate should not be considered in isolation from or as a substitute for financial information presented in accordance with generally accepted accounting principles, and may be different from non-GAAP gross margin rate used by other companies. The GAAP measure most directly comparable to non-GAAP gross margin rate is gross margin rate. A reconciliation of non-GAAP gross margin rate to GAAP gross margin rate is set forth in the schedules below.


Non-GAAP Operating Loss

Non-GAAP operating loss is calculated as operating loss as determined in accordance with GAAP excluding the impact of amortization of intangible assets, restructuring and severance costs, non-cash compensation related to stock and options granted to employees and directors, impairment charges, and certain other one-time charges and credits specifically identified in the non-GAAP reconciliation schedules set forth below. The Company evaluates its performance using, among other things, non-GAAP operating loss in evaluating the Company’s historical and prospective operating financial performance, as well as its operating performance relative to its competitors. Specifically, management uses this non-GAAP measure to further understand the Company’s “core operating performance.” The Company believes its “core operating performance” represents the Company’s on-going performance in the ordinary course of its operations. Accordingly, management excludes from “core operating performance” those items such as restructuring and severance programs and costs relating to specific major projects which are non-recurring, expenses or income from certain legal actions, settlements and related costs outside our normal course of business, impairment charges, as well as non-cash compensation related to stock and options. Management does not believe these items are reflective of the Company’s ongoing operations and accordingly excludes those items from non-GAAP operating loss.


The Company believes that providing non-GAAP operating loss to its investors, in addition to corresponding income statement measures, provides investors the benefit of viewing the Company’s performance using the same financial metrics that the management team uses in making many key decisions and understanding how the core business and its results of operations may look in the future. The Company further believes that providing this information allows the Company’s investors greater transparency and a better understanding of the Company’s core financial performance. The non-GAAP adjustments, and the basis for excluding them, are discussed further below.


Non-GAAP financial measures are not in accordance with, or an alternative for, generally accepted accounting principles in the United States. Non-GAAP operating loss should not be considered in isolation from or as a substitute for financial information presented in accordance with generally accepted accounting principles, and may be different from non-GAAP operating loss used by other companies. The GAAP measure most directly comparable to non-GAAP operating loss is operating loss. A reconciliation of non-GAAP operating loss to GAAP operating loss is set forth in the schedules below.


Furthermore, similar non-GAAP measures to those referenced above have historically been presented by the Company as a complement to its GAAP presentation. The non-GAAP adjustments, and the basis for excluding them, are discussed further below.


Stock-Based Compensation

The Company incurs certain non-cash expenses, which are included in its GAAP statement of operations, for stock-based compensation in accordance with the requirements of SFAS No. 123R, Share-Based Payment. The Company excludes this item, for the purposes of calculating non-GAAP net income (loss), Adjusted EBITDA, non-GAAP gross margin rate and non-GAAP operating loss when it evaluates the continuing core operational performance of the Company. The Company believes that these amounts do not reflect expected future operating expenses nor does the Company believe that they provide a meaningful evaluation of current versus past core operational performance.


Restructuring and Severance Activities

The Company has incurred expenses, which are included in its GAAP statement of operations, primarily due to the write-down of certain property and equipment that has been identified for disposal, workforce related charges such as severance, benefits and employee relocation costs related to formal restructuring plans, termination costs and building costs for facilities not required for ongoing operations, and costs related to the relocation of certain facilities and equipment from buildings which the Company has disposed of or plans to dispose of. The Company excludes these items, for the purposes of calculating non-GAAP net income/loss, Adjusted EBITDA and non-GAAP operating loss, when it evaluates the continuing operational performance of the Company. The Company does not believe that these items reflect expected future operating expenses nor does it believe that they provide a meaningful evaluation of current versus past core operational performance.


Certain Legal Actions, Settlement and Related Costs

In the second and third quarters of fiscal 2009, the Company recorded expenses of $0.3 million and $3.7 million, respectively, related to the settlement of outstanding litigation with JDS Uniphase Corporation on April 10, 2009. Of these amounts, $3.0 million is paid or payable to JDS Uniphase and $1.0 million relates to legal costs incurred by the Company related to this litigation. In the first quarter of fiscal 2009, the Company recorded a gain of $0.2 million, net of costs incurred, related to the settlement of a legal action against a third party in connection with land sold by the Company in 2006, net of insurance recoveries, both of which are included in its GAAP statement of operations. The Company excludes these items for the purposes of calculating non-GAAP net income/loss, Adjusted EBITDA and non-GAAP operating loss when it evaluates the continuing performance of the Company. The Company does not believe that these items reflect expected future expenses nor does it believe they provide a meaningful evaluation of current versus past core operational performance.


Amortization of Intangible Assets

In connection with the purchase accounting for its acquisition of numerous companies and businesses Company recorded intangible assets which are being amortized to operating expenses over their useful lives. The Company excludes the amortization of intangible assets for the purposes of calculating non-GAAP operating loss and Adjusted EBITDA when it evaluates the continuing core operational performance of the Company. The Company believes that these items do not reflect expected future operating expenses nor does the Company believe that they provide a meaningful evaluation of current versus past core operational performance.


Foreign Currency Translation Gains/Losses

The Company records gains and losses related to the translation of intercompany balances denominated in currencies other than the functional currencies of the Company’s local legal entities, the translation of certain other ending balance sheet accounts denominated in currencies other than the functional currencies of the Company’s local legal entities, and contracts entered into to mitigate the exposure to these translation gains and losses. The Company excludes this item, for the purposes of calculating Adjusted EBITDA, when it evaluates the cash usage and prospective cash usage of the Company. Management does not believe this excluded item is reflective of its ongoing operations.

 

Goodwill and Intangibles Impairment

As part of the Company’s preparation of its financial statements for the second quarter of fiscal 2009, the Company determined that the value of its goodwill was impaired. During the second fiscal quarter, there was a decline in the revenue forecasts for the optical components industry, with a corresponding reduction in the Company’s market capitalization and revenue projections. These were some of the factors that triggered the impairment of goodwill. Based on the results of a preliminary evaluation, the Company recorded a non-cash impairment charge of $7.9 million in the second quarter of fiscal 2009. During the third quarter of fiscal 2009, the Company completed its full evaluation of the impairment analysis for goodwill, which indicated that the goodwill of $7.9 million was fully impaired. The impairment will not result in any current or future cash expenditures.

During the third quarter of fiscal 2009, in conjunction with the full evaluation of goodwill impairment, the Company also evaluated the fair value of certain intangible assets. Based on this testing, the Company recorded a non-cash impairment charge of $4.0 million in its third quarter statement of operations to recognize impairment of certain intangible assets.


The Company excludes these items for the purposes of calculating non-GAAP net income/loss, Adjusted EBITDA and non-GAAP operating loss when it evaluates the continuing performance of the Company. The Company does not believe that these items reflect expected future expenses nor does it believe they provide a meaningful evaluation of current versus past core operational performance.


Non-GAAP financial measures are not in accordance with, or an alternative for, generally accepted accounting principles in the United States of America. Non-GAAP measures should not be considered in isolation from or as a substitute for financial information presented in accordance with generally accepted accounting principles, and may be different from non-GAAP measures used by other companies. The GAAP measure most directly comparable to non-GAAP net income/loss is net income/loss. The GAAP measure most directly comparable to Adjusted EBITDA is net income/loss. The GAAP measure most directly comparable to non-GAAP gross margin rate is gross margin rate. The GAAP measure most directly comparable to non-GAAP operating loss is operating loss. A reconciliation of each of these non-GAAP financial measures to GAAP information is set forth below.


Oclaro, Inc. Contact

Jerry Turin

Chief Financial Officer

(408) 383-1400

ir@oclaro.com


Investor Contact

Jim Fanucchi

Summit IR Group Inc.

(408) 404-5400

ir@oclaro.com

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XO Communications Launches Service in Raleigh



Local Businesses Can Benefit From XO’s Advanced Data and IP Services, Nationwide Reach and Simplified Pricing


RALEIGH, NC - April 27, 2009 - XO Communications (OTCBB: XOHO) announced today the availability of its IP-based voice and data communications services to Raleigh businesses. This expansion marks the company’s second network expansion within the North Carolina market, further positioning XO Communications as a leading nationwide telecommunications provider for the region’s businesses, enterprises, carriers and government agencies. The company launched Charlotte last spring and is now fully operational in Raleigh.


XO Communications is bringing to Raleigh its broad portfolio of next generation, IP-based voice and data networking services, including high-speed dedicated Internet access, XO Ethernet, XO IP Flex, XO SIP, XO One iPBX, XO MPLS IP-VPN, and XO Interactive Voice Response services. In addition, XO Communications offers a unique and simplified bandwidth-based pricing for its converged IP services that simplifies how businesses in Raleigh can buy and scale communications services to support their changing needs.


“We are pleased to have XO Communications in our area,” said Harvey Schmitt, chief executive officer of the Greater Raleigh Chamber of Commerce. “Their communication solutions are a welcomed addition to the technology services in the Raleigh and Research Triangle region. We wish them great success.”


As the second largest business market in the state, Raleigh sits in the heart of the “Research Triangle” — an eight county region between the cities of Raleigh, Durham and Chapel Hill. The area is renowned for its leading technology firms, world-class universities, medical research centers and hospitals. In February 2009, Raleigh was selected by Forbes as one of the “Best Places for Business and Careers” for the third straight year as a result of its burgeoning technology-based marketplace and rapid population growth.


“This latest expansion strengthens XO’s foothold in North Carolina and reinforces our position as the leading communications provider for businesses across the region and nationwide,” said Carl Grivner, chief executive officer of XO Communications. “Difficult economic times require businesses large and small to maximize their data and IP spend, and XO is well-positioned to help Raleigh’s businesses cost-effectively enhance their communications infrastructure and improve efficiencies.”


For more information about XO Communications’ services in the Raleigh market, call (877) 967-2562.


About XO Communications

XO Communications, a subsidiary of XO Holdings, Inc. (OTCBB: XOHO), is a leading nationwide provider of advanced communications services and solutions for businesses, enterprises, government, carriers and service providers. Its customers include more than half of the Fortune 500, in addition to leading cable companies, carriers, content providers and mobile network operators. Utilizing its unique combination of high-capacity nationwide and metro networks and broadband wireless capabilities, XO offers customers a broad range of managed voice, data and IP services with proven performance, scalability and value in more than 75 metropolitan markets across the United States. For more information, visit www.xo.com.



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Chad
Couser / XO Communications

703-547-2746

chad.couser@xo.com


Courtney Harper / Reputation Partners (for XO Communications)

312-819-5722

courtney@reputationpartners.com

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CA Announces a Comprehensive Solution for Integrated Infrastructure Availability and Performance Management across Physical and Virtualized IT Domains

CA Announces a Comprehensive Solution for Integrated Infrastructure Availability and Performance Management across Physical and Virtualized IT Domains


New Versions of CA Spectrum Infrastructure Manager and CA eHealth Performance Manager will Enable Lean IT by Proactively Preventing and Rapidly Resolving Problems Across the Entire IT Infrastructure

ISLANDIA, N.Y., April 27, 2009 – CA, Inc. (NASDAQ: CA) today announced an enhanced solution for integrated infrastructure availability and performance management for enterprises, government agencies and service providers. CA Spectrum® Infrastructure Manager r9.1 and CA eHealth® Performance Manager r6.1.1 will address key business service requirements for managing fast-growing virtualized environments, networked application flows, IP telephony applications, MPLS network services, and carrier-class service delivery platforms. The new versions of CA Spectrum Infrastructure Manager and CA eHealth Performance Manager will be available in 2009.

For organizations focused on maximizing IT value and minimizing cost, this solution will help assure service delivery, improve management efficiency, and mitigate the risk of business disruption from infrastructure outages. It is among 13 new and enhanced products announced today by CA that help CIOs achieve Lean IT by reducing waste, increasing productivity and improving the customer experience.

“The pressure has never been greater for IT to keep services running with 24×7 reliability and high levels of performance,” said Jim Frey, research director at Enterprise Management Associates. “Meeting this challenge requires an integrated paradigm, so engineering and operations teams can approach service assurance from a systemic standpoint. This means finding management tools and practices that bring together monitoring and management of all of the interconnected elements which make up the service delivery infrastructure, including networks, voice and unified communications systems, physical and virtual servers, and databases. Only in this way is it possible to fully understand how incidents and problems impact applications and business services.”

Managing Virtual Infrastructure

These new releases of CA Spectrum Infrastructure Manager and CA eHealth Performance Manager will provide extensive, integrated management for virtual systems. The ability to manage physical and virtual infrastructure from a single pane of glass will save IT from having to acquire, learn and maintain separate tools. New functionality will include the ability to discover, visualize, monitor performance, isolate faults, conduct powerful root cause and impact analysis, track virtual machine movement and view utilization of VMware environments.

“These are significant releases of CA Spectrum and CA eHealth because customers are finding fault and performance challenges as they grow their virtual system deployments,” said Roger Pilc, corporate senior vice president and general manager of CA’s Infrastructure Management and Data Center Automation business unit. “Combining networks and physical and virtual systems management in our integrated solution will support Lean IT, enabling customers to leverage a comprehensive fault and performance solution to efficiently manage expanding virtual environments.”

“As VMware virtualization becomes the platform of choice for customers deploying private clouds, they can greatly benefit from comprehensive availability and performance management of virtualized systems in the seamless context of end-to-end enterprise management solutions that span networks, physical systems, databases and applications,” said Shekar Ayyar, vice president of Infrastructure Alliances, VMware. “Enterprise customers can experience greater ease-of use, time-to-value and improved total cost of ownership from such solutions, and we are pleased to see the breadth and depth of CA’s Spectrum and eHealth management of virtualized systems.”

“Virtualization technology has become an essential tool to build and deploy our applications on time and at a much lower cost. CA Spectrum Infrastructure Manager helps to remove some of the additional complexity of managing virtual environments by making them look like just another device in our data centers,” said Donavan Pantke, network engineer at Appriss. “Our operations staff can now leverage existing tools over a broader set of technologies, allowing us to transition to virtualization quickly and with minimal disruption to existing business processes.”

Support for Service Providers

The enhanced CA solution will include new functionality that gives service providers deeper insight and management capability to help prevent degradations and resolve problems before they impact revenue-generating services or cause service level agreement violations.

As adoption of IP services running over MPLS networks increases, new challenges require management solutions that ensure network health so service providers can effectively deliver new services that drive revenues. The CA Spectrum Infrastructure Manager MPLS Transport Manager, a new solution for discovering and monitoring MPLS traffic engineered networks, will automatically identify faults that could impact the delivery of services to customers.

With the advent of massive data transfers in the scientific community it serves, the Energy Sciences Network is reliant on rapid resolution time for incidents that impact its service sensitive applications. “With the amount of raw data originating at CERN, for example, we cannot tolerate much downtime or we’ll never catch up processing the data once we’re back online,” said Mike O’Connor, network engineer, who recently tested the new CA Spectrum Infrastructure Manager MPLS Transport Manager. “Insight into our traffic engineered MPLS network down to the labeled switched path level should improve resolution time for circuit issues by an order of magnitude. Rapid resolution is critical to achieving not only our 99.9% availability SLA but sustaining our current 99.997% rating, which we’ve been able to achieve over the past 2 years with CA Spectrum as our infrastructure management tool.”

CA eHealth Performance Manager will also have new functionality to provide proactive performance management of important carrier-class telecommunications infrastructure. CA eHealth Performance Manager will support the Alcatel-Lucent 5620 SAM Element Management System, which is especially important for service providers that deploy Alcatel 7450 and 7750 core switches. CA eHealth Performance Manager will identify performance degradations in the core networks before services are disrupted and customers are impacted.

Additional New Features Support Lean IT

CA eHealth Performance Manager will include new out-of-the-box functionality and integration capabilities that help IT to achieve efficiencies and deliver value more quickly across a broader set of IT domains. For example, tight integrations with CA eHealth Traffic Accountant for network traffic and bandwidth management, and CA eHealth Database Performance Option for proactive multi-vendor database performance management, consolidates management for network devices, network traffic, physical and virtual systems, and databases into a single performance management solution.

CA eHealth Performance Manager will also add new proactive performance management for IP telephony applications based on the Cisco Unified Communications Manager and Siemens HiPathâ„¢ voice systems. This new capability will provide automated data collection, performance analysis, and a rich set of reports for both the infrastructure as well as the IP telephony application. This will provide customers with a single solution that manages both the converged network and the unified communications application, helping to reduce the management tool footprint and administrative overhead. In addition to new systems and IP telephony management capabilities, CA Spectrum Infrastructure Manager and CA eHealth Performance Manager will also have new capability to integrate with the CA eHealth Database Performance Option to proactively manage the availability and performance of DB2® for Linux, UNIX and Windows®, as well as Oracle®, Microsoft® SQL Server® and Sybase® databases.

Radius and SAML authentication support will expand CA eHealth Performance Manager’s security capabilities. This will enable enterprises and managed service providers to extend authentication mechanisms for customer self-service and performance reporting access across their organizations.

CA Spectrum Infrastructure Manager and CA eHealth Performance Manager are sold by both CA’s direct sales force and CA’s global network of channel partners. Depending on geography, the products can be licensed on either a per-server or per-device basis.

CA Services is available to provide comprehensive implementation services that enable customers to accelerate the time to value of their investment, mitigate implementation risk and improve the alignment between IT and business processes. The group’s newest offering is Network Management for Distributed Rapid Implementation. This service allows the customer to choose CA eHealth Performance Manager and/or CA Spectrum Infrastructure Manager and offers a choice of 500, 1000, 1500 or 2000 devices to discover. The deployment may also include the CA eHealth Live Exceptions Dashboard Add-On Services Component to provide a single-pane view of alarms.

CA will showcase the new versions of CA Spectrum Infrastructure Manager and CA eHealth May 4-9, 2009 at TM Forum Management World in Nice, France, and May 17-21, 2009 at Interop in Las Vegas.

Visit CA to learn more about these new versions of CA Spectrum Infrastructure Manager and CA eHealth Performance Manager and the other CA EITM solutions announced today to power Lean IT.

About CA

CA (NASDAQ: CA) is the world’s leading independent IT management software company. With CA’s Enterprise IT Management (EITM) vision and expertise, organizations can more effectively govern, manage and secure IT to optimize business performance and sustain competitive advantage. For more information, visit www.ca.com.

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Copyright © 2009 CA. All Rights Reserved. One CA Plaza, Islandia, N.Y. 11749. DB2 is a trademark of International Business Machines Corporation in the United States, other countries, or both. Linux is a registered trademark of Linus Torvalds in the United States, other countries, or both. UNIX is a registered trademark of The Open Group in the United States and other countries. Siemens and HiPath are registered trademarks of Siemens AG. Oracle is a registered trademark of Oracle Corporation and/or its affiliates. Sybase is a trademark of Sybase, Inc. Microsoft, Windows and SQL Server are either registered trademarks or trademarks of Microsoft Corporation in the United States and/or other countries. All other trademarks, trade names, service marks, and logos referenced herein belong to their respective companies. Nothing herein (i) affects the rights and/or obligations of CA or its licensees under any existing or future written license agreement or services agreement relating to any CA software product; or (ii) amends any product documentation or specifications for any CA software product. The development, release and timing of any features or functionality described herein remain at CA’s sole discretion.

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TM Forum teams with USC’s ETC

TM Forum and The Entertainment Technology Center (ETC) at USC to sweep away barriers to new revenues for content and communication services providers


Newly-established liaison will significantly improve collaboration between content owners and media industry suppliers


MORRISTOWN, NJ April 27, 2009 – TM Forum, the world’s premier industry group focused on business effectiveness for the communications and media sectors, and the Entertainment Technology Center (ETC)@USC in Hollywood have established a liaison with the goal of rapidly eliminating the barriers to new distribution revenues for content and communication services providers, it was announced today.


The liaison follows more than two years of informal cross-industry collaboration on content distribution between TM Forum and ETC@USC, who bring together the entertainment, consumer electronics, technology, and services industries to collaborate on opportunities for new consumer entertainment offerings today and into the future. Together with mutual member companies including Alcatel-Lucent, Cisco and TCS, the new partnership will significantly enhance the dialog and collaboration between content owners, media industry suppliers, and communications service providers. Initial joint projects plan to address content metadata and identification schemes to advance interoperability across digital distribution value chains.


According to Jim Warner, vice chairman and head of content media and advertising, TM Forum, “The liaison with ETC is a perfect fit for both parties and is related very much to our highly-successful content sector and value chains initiative. Initial work will focus on the interactions between content owners and communications providers in order to radically simplify the creation, distribution and monetization of digital media services. Aligning the major players from these two key industries not only sends a powerful message, it will eliminate much of the ‘friction’ in today’s distribution chain - driving down operating costs while improving time to market.”


KC Blake, director of business development ETC@USC said “We look forward to working with TM Forum in the effort to streamline the delivery of content across platforms. We feel that this collaboration is a valuable step in ensuring that consumers have access to their content anytime and anywhere.”


Following the announcement, over the next three months the two organizations plan to create a roadmap that spells out the specific deliverables, milestones and actions needed to achieve the shared goal of enabling seamless and profitable Digital Media services. This will include looking at digital video distribution value chains model issues, standards gaps, and solution trends in the current content metadata landscape, particularly in identification and descriptive areas and the monetization and profitability implications to both content owners and service providers.


About TM Forum


With more than 700 member companies in 75 countries, TM Forum is the world’s leading industry association focused on improving business effectiveness for service providers and their suppliers. Serving the information, communications and entertainment industries, the Forum provides practical solutions, guidance and leadership to transform the way that digital services are created, delivered and charged. Members include the world’s largest service providers, cable and network operators, software suppliers, equipment suppliers and systems integrators.


TM Forum provides a wide range of information and support to help its members reduce the costs and risks associated with creating and delivering profitable services. These include industry research and benchmarks, technology roadmaps, best practice guidebooks, software standards and interfaces, as well as certified training, conferences and publications. The TM Forum also provides its member community with extensive marketing and networking opportunities, enabling business with new customers and partners.


To learn more please visit www.tmforum.org.


About the Entertainment Technology Center at USC


The Entertainment Technology Center (ETC) @ USC, founded in 1993 with the help of George Lucas, brings together senior executives from the entertainment, consumer electronics, and technology industries to collaborate on issues related to the creation, distribution, and consumption of entertainment content. The ETC studies how technology impacts the next-generation consumer, and works with member companies to improve the consumer experience and uncover new revenue streams for entertainment-related products. Current ETC members include Disney, Sony Pictures Entertainment, Twentieth Century Fox, Paramount Pictures, Warner Bros., Alcatel-Lucent, Cisco, Deluxe Entertainment Services Group, Lucasfilm, TATA Consultancy Services, Thomson, Dolby, LG Electronics, Singapore IDA, and Volkswagen of America. For more information, email: info@etcenter.org

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WeFi and ROK launch WeROK: Free Mobile Internet Access and Services

Free to download, free to use and globally available, WeROK delivers internet access for mobile phones to include low-cost mobile text, free mobile email and free Mobile TV services via Wi-Fi


London, UK and Delaware, USA – 27th April 2009: ROK Entertainment Group (www.rokent.com), the mobile technology, applications and services company, and WeFi Inc. (www.wefi.com), creator of the first open, community-based global Wi-Fi network, today announced the launch of WeROK, a Wi-Fi powered mobile portal enabling internet access for mobile phones to include low-cost texting and free mobile phone services.

WeROK combines WeFi’s high-performance global Wi-Fi network with ROK Entertainment’s unique portfolio of mobile services. These applications include low-cost SMS, mobile email services, free-streamed mobile TV and mobile social network services. Free to download at www.werok.net, WeROK is currently accessible on any Wi-Fi enabled Symbian S60 mobile phone, as well as PC’s.

WeROK’s mobile service suite is powered by WeFi, which dramatically enhances the wireless network user experience with mobile and portable devices. It provides a high performance, open and global broadband wireless network by combining a community-generated database, a smart connection manager and a dynamic Access Point/Hotspot directory. WeFi connects users to Wi-Fi access points where Internet access has already been verified by other WeFi-enabled devices – dubbed “community-verified spots” - in a growing network of over 20 million access points.

“WeROK is a unique development and a giant leap forward in mobile and web convergence,” said Jonathan Kendrick, Chairman and CEO of ROK Entertainment Group. “It’s an advertising-funded mobile services application which enables handsets to automatically and seamlessly access Wi-Fi zones in order to route mobile activities via the Internet.

“In our testing of WeROK, we have seen savings of up to 85% being made on text services compared to the cost of using traditional network-based texting and through combining WeFi’s highly innovative Wi-Fi technologies with our suite of web-enabled mobile services, we are very excited to be launching WeROK on a global scale,” added Kendrick.

“Increased Wi-Fi availability is incredibly useful in unleashing mobile Internet applications and services,” said Zur Feldman, CEO of WeFi. “WeFi is thrilled to be working with ROK Entertainment on WeROK, enabling users to enhance their mobile entertainment and communication activities, all the time utilizing a PC-like Internet experience over a mobile phone.”


About ROK Entertainment:

Founded in 2004, ROK Entertainment Group is a mobile technologies, applications and services development company. Headquartered in the UK, ROK is best known for its award-winning mobile TV services and has 5 patent awards and more than 40 further patent applications in place. For more information, please visit: www.rokent.com.


About WeFi Inc.


WeFi Inc. is the creator of the world’s first global open Wi-Fi network. Leveraging the power of Wi-Fi, WeFi brings free wireless Internet communications to everyone, everywhere with easy-to-use downloadable software that enables automatic connection to the best Wi-Fi hotspot around. WeFi is driven by a social network, whose members benefit from a free, fun and interactive experience, while helping to build a truly seamless global Wi-Fi network by mapping open access points in any given location worldwide. Established in February 2006, WeFi Inc. is backed by leading VC companies Lightspeed, Pitango and Gemini Ventures. The company is incorporated in Delaware, U.S. with R&D facilities in Israel. WeFi was awarded the Forum Nokia “Application of the Year – EMEA” award for 2008. For additional information on WeFi, please visit: www.wefi.com.


Forward-Looking Statement

The information contained in this news release, other than historical information, consists of forward-looking statements that involve risks and uncertainties that could cause actual results to differ materially from those described in these statements. Forward-looking statements regarding the timing of developing, testing and releasing existing and new products, of marketing and selling them, of deriving revenues and profits from them, as well as the effects of those revenues and profits on the Group’s margins and financial position, are uncertain because many of the factors affecting the timing of those items are beyond the Group’s control.


Media Contacts


ROK: Bruce Renny – bruce.renny@rokent.com - +44 1902 374 896


WeFi: Jason Silberman at Koteret Public Relations: Email: Jason_silberman@koteret.com or Tel: +972-3-5755778.

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Verizon Communications Reports Revenue, Earnings and Cash Flow Growth in 1Q 2009

Verizon Communications Reports Revenue, Earnings and Cash Flow Growth in 1Q 2009

Sales of Verizon Wireless, FiOS Internet and TV, and Strategic Business Services Show Continued Strength


Media Contact Info


Peter Thonis

212-395-2355

peter.thonis@verizon.com


Bob Varettoni

908-559-6388

robert.a.varettoni@verizon.com


04/27/2009


NEW YORK —


1Q 2009 HIGHLIGHTS


Consolidated Results


58 cents in EPS and 63 cents in adjusted EPS (non-GAAP), compared with 1Q 2008 EPS of 57 cents and 61 cents, respectively.

$6.4 billion in cash flows from operations, up $1.0 billion, or 19.1 percent, year over year.

Capital expenditures totaled $3.7 billion; free cash flow totaled $2.7 billion, up $1.5 billion.

Wireless


86.6 million total customers, up 28.8 percent; 84.1 million retail customers, up 29.0 percent; 1.3 million net customer additions, excluding acquisitions and adjustments, almost all retail.

29.6 percent increase in total revenues; industry-leading retail postpaid churn, 1.14 percent; data revenues up 56.2 percent; 28.2 percent operating income margin and 46.0 percent EBITDA margin on service revenues (non-GAAP).

Integration of Alltel operations on schedule.

Wireline


299,000 net new FiOS TV customers and a record 298,000 net new FiOS Internet customers, for a total of 2.2 million FiOS TV customers and 2.8 million FiOS Internet customers.

13.7 percent increase in consumer ARPU.

7.5 percent increase in strategic business services revenues.

Verizon Communications Inc. (NYSE:VZ) today reported that its revenue and earnings continued to grow in the first quarter 2009 and that it continued to generate strong cash flows. Despite the general economic climate, sales remained strong for wireless, FiOS and strategic business services.


Verizon reported diluted earnings per share (EPS) of 58 cents in the first quarter 2009, up 1.8 percent from 57 cents per share in the first quarter 2008. On an adjusted basis (non-GAAP), first-quarter 2009 earnings were 63 cents per share, up 3.3 percent from first-quarter 2008 earnings of 61 cents per share.


Verizon’s total operating revenues grew 11.6 percent to $26.6 billion, compared with the first quarter 2008, as the company added revenues from its acquisition of Alltel Corporation in early January 2009. On a pro forma basis (determined by consolidating the operating results of Verizon and the former Alltel as though the acquisition had occurred on Jan. 1, 2008), revenue growth was 3.3 percent.


Cash flows from operations totaled $6.4 billion for the first three months of 2009, up $1.0 billion, or 19.1 percent, over the same period last year. Capital expenditures totaled $3.7 billion in the first quarter 2009, and free cash flow (cash flows from operations minus capital expenditures) totaled $2.7 billion, up $1.5 billion from the first quarter 2008.


Disciplined Approach in Challenging Environment


“Our business groups executed with excellence in the first quarter,” said Verizon Chairman and CEO Ivan Seidenberg. “Our operational and financial discipline produced continued revenue and earnings growth, as well as an expansion of our already strong operating cash flows. A highlight of the quarter was our successful completion of the Alltel acquisition. We quickly began integration efforts, and we are aggressively pursuing synergies.”


Seidenberg added: “In this challenging economic environment, we remain focused on delivering value to customers and on returning cash to our shareowners, with an attractive dividend. Verizon is in a unique position. We are tapping into new market opportunities in wireless, broadband, video and global enterprise, and we already have the assets and capabilities to sustain our cash flows and grow total shareholder returns.”


Wireless Again Delivers on Growth and Profitability Model


Verizon Wireless delivered strong net customer additions and sustained high margins. In the first quarter 2009:


Wireless retail (non-wholesale) gross customer additions (excluding customers acquired in the Alltel acquisition) were strong, up 32.5 percent over the prior year. On a pro forma basis, retail gross customer additions were up 4.3 percent.

Verizon Wireless had 86.6 million customers at the end of the quarter, an increase of 28.8 percent year over year. This includes 13.2 million net total customer additions, after conforming adjustments, from the Alltel acquisition. Verizon Wireless is the largest wireless company in the U.S. in terms of total customers and revenues.

The company also has the most retail customers of any U.S. wireless company and continued to grow its high-quality base, adding 1.3 million net retail customers (excluding customers acquired in the Alltel acquisition) for a total of 84.1 million retail customers.

Verizon Wireless had industry-leading retail post-paid churn of 1.14 percent; total churn was an industry-leading 1.47 percent.

Revenues totaled $15.1 billion, up 29.6 percent year over year and up 9.0 percent on a pro forma basis. Service revenues were $13.1 billion, up 28.9 percent year over year and up 10.5 percent on a pro forma basis, with continued growing demand for data services. Data revenue was $3.6 billion in the first quarter 2009, up 56.2 percent, or 36.8 percent on a pro forma basis, from the first quarter 2008.

Service ARPU (average monthly service revenue per user) decreased 0.3 percent from the similar period a year ago, to $50.74. Total data ARPU grew by 20.8 percent to $14.16. On a pro forma basis, service ARPU increased 1.1 percent, and total data ARPU increased 25.2 percent.

Wireless operating income margin, adjusted for acquisition-related charges and integration costs, was 28.2 percent, up 30 basis points year over year. Adjusted on the same basis, EBITDA (earnings before interest, taxes, depreciation and amortization) margin on service revenues (non-GAAP) was 46.0 percent, an increase of 110 basis points year over year and 60 basis points on a pro forma basis.

Wireline Again Delivers on Growth of FiOS, Strategic Services


Verizon’s Wireline segment reported continued strong growth in the number of new customers of fiber-optic-based FiOS TV and FiOS Internet services, and continued increased revenues from enterprise strategic services. In the first quarter (with prior-period comparisons adjusted to reflect the impact of the spinoff of non-strategic Wireline assets):


Verizon added 299,000 net new FiOS TV customers. The company had 2.2 million FiOS TV customers, an increase of 83.8 percent compared with the first quarter 2008.

FiOS TV sales penetration (sales as a percentage of potential customers) increased to 22.9 percent, compared with 18.7 percent in the first quarter 2008. FiOS TV service was available for sale to 9.7 million premises by end of the quarter.

Verizon added a record 298,000 net new FiOS Internet customers. The company had nearly 2.8 million FiOS Internet customers, an increase of 55.5 percent compared with the first quarter 2008.

FiOS Internet sales penetration increased to 26.8 percent, compared with 23.0 percent in the first quarter 2008. FiOS Internet was available for sale to 10.4 million premises by the end of the quarter.

Broadband and video revenues from consumer customers in wireline mass markets totaled $1.3 billion in the first quarter 2009 — representing year-over-year quarterly growth of 36.3 percent.

Revenue growth from broadband and video services drove consumer ARPU to $69.97 in the first quarter 2009, a 13.7 percent increase compared with the first quarter 2008.

Sales of strategic business services — such as IP (Internet protocol), managed services, Ethernet and security solutions — generated $1.5 billion in revenue in the quarter, up 7.5 percent from the first quarter 2008.

Details of Earnings Adjustments


Adjusted earnings in the first quarter 2009 excluded 5 cents per share in special items: 3 cents for acquisition-related charges and 2 cents for merger integration costs, both primarily in connection with the Alltel acquisition. First-quarter 2008 adjusted earnings excluded 4 cents per share in special items: 3 cents for costs related to the spinoff of wireline access lines and 1 cent in merger integration costs in connection with the acquisition of MCI in 2006.


Additional Highlights


Wireless


At the end of the first quarter 2009, retail customers (postpaid and prepaid) represented 97 percent of the company’s base.

Verizon Wireless continued to lead the industry in cost efficiency. Monthly cash expense per customer (non-GAAP) decreased in the first quarter 2009 to $27.38, from $28.05 in the comparable period in 2008.

In the first quarter, data revenues were nearly 28.0 percent of all service revenues, up from 23.0 percent in the first quarter 2008.

Verizon Wireless continued to extend the reach of its broadband network, which is the nation’s largest and most reliable 3G (third generation) network, now covering approximately 281 million people.

In February, Verizon Wireless selected Ericsson and Alcatel-Lucent as vendors to supply the infrastructure that will enable the company to become the first wireless company to offer commercial LTE-based service in the U.S., starting in 2010. Field trials are under way.

In a move that gives consumer and business customers greater value and more control over how they use their plan minutes, the company introduced Friends & Family, which lets customers identify any five or 10 wireless or landline numbers as a calling group. Minutes used when placing or receiving calls to anyone in the Friends & Family calling group will not count against customers’ plan minutes.

During the quarter, Verizon Wireless customers sent or received an average of 1.4 billion text messages each day, totaling more than 127 billion text messages in the first quarter. Customers also sent nearly 2.1 billion picture/video messages and completed 48.6 million music and video downloads during the quarter.

Wireline


Wireline’s total first-quarter operating revenues were $11.6 billion, a decline of 3.8 percent compared with the first quarter 2008. A 0.7 percent increase in mass market revenues was offset by declines in global enterprise, global wholesale and other services. Wireline total operating expenses were $10.9 billion, a decline of 1.0 percent compared with the first quarter 2008.

There were 8.9 million total broadband connections in the first quarter, a net increase of 252,000 over the fourth quarter 2008 and 7.8 percent year over year. This includes a decrease of 46,000 DSL-based Verizon High Speed Internet connections, which was more than offset by the increase in FiOS Internet customers.

Over the past year, Verizon has added 1 million FiOS TV customers and expanded the availability of FiOS “triple-play” bundles of voice, Internet and TV services by nearly 50 percent. By the end of the first quarter, FiOS triple-play bundles were available to 9.7 million premises, or about 30 percent of the households in Verizon’s wireline network footprint, compared with 6.5 million premises at the end of the first quarter 2008.

Verizon’s FiOS network passed an additional 500,000 premises in the first quarter. As of the end of the quarter, the FiOS network passed 13.2 million premises.

Verizon Business, which serves large-business and government customers worldwide, continued its global managed security leadership, introducing a new portfolio of converged solutions that address security and performance challenges; the extension of its suite of in-the-cloud Denial of Service (DOS) Defense services; and a new Risk-Correlation service that helps prioritize current and emerging security threats within an enterprise.

Verizon continued to deliver on the promise of voice over IP (VoIP) and unified communications and collaboration, unveiling a new managed service enabling corporate users worldwide to more simply control their unified communications; the ability for organizations to immediately initiate conference calls from some of the most popular instant messaging applications; and enhancements to its VoIP portfolio for European customers.

Verizon pushed further into key global markets while increasing the resiliency and reliability of its global IP network, including receiving approval from the government of India to operate two international gateways in Mumbai and Chennai; a cooperative agreement with Telekom Malaysia Berhad to jointly develop a new Malaysian IP node and a new Internet node in Cyberjaya; and deployment of a technologically advanced “mesh architecture” network configuration in Singapore, one of the largest financial centers in Southeast Asia.

New agreements with multinational customers included The Agfa-Gevaert Group and Cigna Life Insurance, SA. Verizon Business also signed new contracts with several U.S. government agencies, including a prime contract under the U.S. General Service Administration’s (GSA) Alliant program and the Defense Information Systems Network Transmission Services - Pacific II (DTS-P II) contract award by the Defense Information Systems Agency (DISA). The company also continued to generate sales under GSA’s Networx program.

Notes: Comparisons are year over year unless otherwise noted. See the accompanying schedules and www.verizon.com/investor for reconciliations to generally accepted accounting principles (GAAP) for non-GAAP financial measures cited in this news release. Reclassifications of prior-period amounts have been made, where appropriate, to reflect comparable operating results for the spinoff of the Wireline segment’s non-strategic local exchange and related business assets in Maine, New Hampshire and Vermont in the first quarter of 2008. Unless stated otherwise, segment results shown are adjusted for special items.


Beginning in 2009, Verizon changed the manner in which its Wireline segment reports operating revenues to align management and product offerings to the continued evolution of the wireline business. Accordingly, there are four marketing units within the Wireline segment: Mass Markets, Global Enterprise, Global Wholesale and Other. Mass Markets includes consumer and small business revenues; Global Enterprise includes all retail revenue from enterprise customers, both domestic and international; Global Wholesale includes all wholesale revenues, both domestic and international; and Other primarily includes operator services, payphone services and revenues from the former MCI mass markets customer base.


Also starting in 2009, Verizon’s financial statements were adjusted for the adoption of Statement of Financial Accounting Standards (SFAS) No. 160, Noncontrolling Interests in Consolidated Financial Statements — an amendment of Accounting Research Bulletin (ARB) No. 51, which requires that net income be reported on a consolidated basis and then attributed to controlling and noncontrolling interests.


Verizon Communications Inc. (NYSE:VZ), headquartered in New York, is a global leader in delivering broadband and other wireless and wireline communications services to mass market, business, government and wholesale customers. Verizon Wireless operates America’s most reliable wireless network, serving more than 86 million customers nationwide. Verizon’s Wireline operations provide converged communications, information and entertainment services over the nation’s most advanced fiber-optic network. Wireline also includes Verizon Business, which delivers innovative and seamless business solutions to customers around the world. A Dow 30 company, Verizon employs a diverse workforce of more than 237,000 and last year generated consolidated operating revenues of more than $97 billion. For more information, visit www.verizon.com.


VERIZON’S ONLINE NEWS CENTER: Verizon news releases, executive speeches and biographies, media contacts, high-quality video and images, and other information are available at Verizon’s News Center on the World Wide Web at www.verizon.com/news. To receive news releases by e-mail, visit the News Center and register for customized automatic delivery of Verizon news releases.


NOTE: This news release contains statements about expected future events and financial results that are forward-looking and subject to risks and uncertainties. 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 could affect future results and could cause those results to differ materially from those expressed in the forward-looking statements: the effects of adverse conditions in the U.S. and international economies; the effects of competition in our markets; materially adverse changes in labor matters, including workforce levels and labor negotiations, and any resulting financial and/or operational impact, in the markets served by us or by companies in which we have substantial investments; the effect of material changes in available technology; any disruption of our suppliers’ provisioning of critical products or services; significant increases in benefit plan costs or lower investment returns on plan assets; the impact of natural or man-made disasters or existing or future litigation and any resulting financial impact not covered by insurance; technology substitution; an adverse change in the ratings afforded our debt securities by nationally accredited ratings organizations or adverse conditions in the credit markets impacting the cost, including interest rates, and/or availability of financing; any changes in the regulatory environments in which we operate, including any loss of or inability to renew wireless licenses, and the final results of federal and state regulatory proceedings and judicial review of those results; the timing, scope and financial impact of our deployment of fiber-to-the-premises broadband technology; changes in our 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; our ability to successfully integrate Alltel Corporation into Verizon Wireless’ business and achieve anticipated benefits of the acquisition; and the inability to implement our business strategies.


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