Identify and explain loss contingencies as they apply to your company.

"Commitments and Contingencies"

In the ordinary course of business, Verizon is involved in various commercial litigation and regulatory proceedings at the state and federal level. Where it is

determined, in consultation with counsel based on litigation and settlement risks, that a loss is probable and estimable in a given matter, the Company establishes an

accrual. In none of the currently pending matters is the amount of accrual material. An estimate of the reasonably possible loss or range of loss in excess of the

amounts already accrued cannot be made at this time due to various factors typical in contested proceedings, including (1) uncertain damage theories and demands;

(2) a less than complete factual record; (3) uncertainty concerning legal theories and their resolution by courts or regulators; and (4) the unpredictable nature of the

opposing party and its demands. We continuously monitor these proceedings as they develop and adjust any accrual or disclosure as needed. We do not expect that

the ultimate resolution of any pending regulatory or legal matter in future periods, including the Hicksville matter described below, will have a material effect on

our financial condition, but it could have a material effect on our results of operations for a given reporting period.

Reserves have been established to cover environmental matters relating to discontinued businesses and past telecommunications activities. These reserves include

funds to address contamination at the site of a former Sylvania facility in Hicksville NY, which had processed nuclear fuel rods in the 1950s and 1960s. In

September 2005, the Army Corps of Engineers (ACE) accepted the site into its Formerly Utilized Sites Remedial Action Program. As a result, the ACE has taken

primary responsibility for addressing the contamination at the site. An adjustment to the reserves may be made after a cost allocation is conducted with respect to

the past and future expenses of all of the parties. Adjustments to the environmental reserve may also be made based upon the actual conditions found at other sites

requiring remediation.

Verizon is currently involved in approximately 35 federal district court actions alleging that Verizon is infringing various patents. Most of these cases are brought

by non-practicing entities and effectively seek only monetary damages; a small number are brought by companies that have sold products and could seek injunctive

relief as well. These cases have progressed to various stages and a small number may go to trial in the coming 12 months if they are not otherwise resolved.

In connection with the execution of agreements for the sales of businesses and investments, Verizon ordinarily provides representations and warranties to the

purchasers pertaining to a variety of nonfinancial matters, such as ownership of the securities being sold, as well as indemnity from certain financial losses. From

time to time, counterparties may make claims under these provisions, and Verizon will seek to defend against those claims and resolve them in the ordinary course

of business.

Subsequent to the sale of Verizon Information Services Canada in 2004, we continue to provide a guarantee to publish directories, which was issued when the

directory business was purchased in 2001 and had a 30-year term (before extensions). The preexisting guarantee continues, without modification, despite the

subsequent sale of Verizon Information Services Canada and the spin-off of our domestic print and Internet yellow pages directories business. The possible

financial impact of the guarantee, which is not expected to be adverse, cannot be reasonably estimated as a variety of the potential outcomes available under the

guarantee result in costs and revenues or benefits that may offset each other. We do not believe performance under the guarantee is likely.

As of December 31, 2016, letters of credit totaling approximately $0.4 billion, which were executed in the normal course of business and support several financing

arrangements and payment obligations to third parties, were outstanding.

We have several commitments primarily to purchase programming and network services, equipment, software and marketing services, which will be used or sold in

the ordinary course of business, from a variety of suppliers totaling $16.8 billion. Of this total amount, $6.9 billion is attributable to 2017, $6.4 billion is attributable

to 2018 through 2019, $1.3 billion is attributable to 2020 through 2021 and $2.2 billion is attributable to years thereafter. These amounts do not represent our entire

anticipated purchases in the future, but represent only those items that are the subject of contractual obligations. Our commitments are generally determined based

on the noncancelable quantities or termination amounts. Purchases against our commitments totaled approximately $8.1 billion for 2016, $10.2 billion for 2015,

and $21.0 billion for 2014. Since the commitments to purchase programming services from television networks and broadcast stations have no minimum volume

requirement, we estimated our obligation based on number of subscribers at December 31, 2016, and applicable rates stipulated in the contracts in effect at that

time. We also purchase products and services as needed with no firm commitment.

Note 16

Quarterly Financial Information (Unaudited)

(dollars in millions, except per share amounts)

Net Income attributable to Verizon Quarter Ended Operating

Revenues Operating

Income Amount Per Share- Basic Per Share- Diluted Net

Income

2016 March 31 $ 32,171 $ 7,942 $ 4,310 $ 1.06 $ 1.06 $ 4,430 June 30 30,532 4,554 702 .17 .17 831 September 30 30,937 6,540 3,620 .89 .89 3,747 December 31 32,340 8,023 4,495 1.10 1.10 4,600 2015 March 31 $ 31,984 $ 7,960 $ 4,219 $ 1.03 $ 1.02 $ 4,338 June 30 32,224 7,821 4,231 1.04 1.04 4,353 September 30 33,158 7,535 4,038 .99 .99 4,171 December 31 34,254 9,744 5,391 1.32 1.32 5,513 Results of operations for the first quarter of 2016 include after-tax charges attributable to Verizon of $0.1 billion related to a pension remeasurement, as well as

after-tax credits attributable to Verizon of $0.1 billion related to a gain on spectrum license transactions. Results of operations for the second quarter of 2016 include after-tax charges attributable to Verizon of $2.2 billion related to pension and benefit

remeasurements and after-tax charges attributable to Verizon of $1.1 billion related to early debt redemption costs, as well as after-tax credits attributable to

Verizon of $0.1 billion related to a gain on the Access Line Sale. Results of operations for the third quarter of 2016 include after-tax charges attributable to Verizon of $0.5 billion related to a pension remeasurement and

severance costs. Results of operations for the fourth quarter of 2016 include after-tax credits attributable to Verizon of $1.0 billion related to severance, pension and benefit

credits. Results of operations for the third quarter of 2015 include after-tax charges attributable to Verizon of $0.2 billion related to a pension remeasurement. Results of operations for the fourth quarter of 2015 include after-tax credits attributable to Verizon of $1.6 billion related to severance, pension and benefit

credits, as well as after-tax credits attributable to Verizon of $0.2 billion related to a gain on spectrum license transactions.

Net income attributable to Verizon per common share is computed independently for each quarter and the sum of the quarters may not equal the annual amount.