The primary financial statement impact of the September 11, 2001
terrorist attacks pertains to Verizon’s plant, equipment and administrative
office space located either in, or adjacent to the World Trade
Center complex, and the associated service restoration efforts. We
recorded insurance recoveries related to the terrorist attacks of $270
million in 2003 and $200 million in 2002, primarily offsetting fixed
asset losses and expenses incurred in 2004 and preceding years. Of
the amounts recorded, approximately $130 million in 2003, and $112
million in 2002 relate to operating expenses (primarily cost of services
and sales) reported in the consolidated statements of income,
and also reported by our Domestic Telecom segment. The costs and
estimated insurance recoveries were recorded in accordance with
EITF No. 01-10, “Accounting for the Impact of the Terrorist Attacks
of September 11, 2001.” As of December 31, 2004, we received
insurance proceeds of $849 million. |