Verizon EQUITY RESEARCH QUARTERLY UPDATE PERFORM. VZ 3Q16 First Look: Mixed Results, Positive Guidance Maintained.

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1 EQUITY RESEARCH QUARTERLY UPDATE October 20, 2016 Stock Rating: PERFORM mo. Price Target NA VZ - NYSE $ Yr. EPS Gr. Rate 12% 52-Wk Range $56.95-$43.79 Shares Outstanding 4,085.0M Float 3,758.0M Market Capitalization $205,364.1M Avg. Daily Trading Volume 12,078,381 Dividend/Div Yield $2.28/4.53% Book Value $5.08 Fiscal Year Ends Dec 2016E ROE 67.5 % LT Debt $99,725.0M Preferred NA Common Equity $20,744M Convertible Available No EPS Operating Q1 Q2 Q3 Q4 Year Mult. 2014A x 2015A x 2016E 1.06A 0.94A 1.01A x Prior (E) NM 2017E x Verizon COMMUNICATION AND CLOUD VZ 3Q16 First Look: Mixed Results, Positive Guidance Maintained SUMMARY Verizon's 3Q16 results were mixed, with normalized revenue down 2.9%; however, normalized EPS of $1.01 beat by $0.03. Wireless service revenue was in line with our estimate, but churn ticked to 1.02% (vs. our estimate of 1% and consensus of 0.98%) due to tablets and likely unlimited promotions from TMUS/Sprint and the new iphone. Postpaid phone subscribers declined by 36K versus a 482K add in 3Q15. Wireline revenue was in line, but margins were 200 basis points higher on lower retirement/ health costs. Net adds in both broadband and video (36K and 90K, respectively) registered a strong recovery. CAPX was low and guidance reduced to the low end at $17 million. Management was upbeat on the call on future growth, IOT/content. KEY POINTS Mixed Results. Consolidated revenue declined by 2.9% normalized, primarily due to weaker equipment phone sales. EBITDA of $11.3B (-5% Y/Y) was 1% lower than our estimates. The EPS beat was on lower D&A and interest expense. iphone inventory and Samsung 7 recall hurt results. Wireless: Verizon reported wireless retail postpaid net additions of 442K, well shy of our and Street estimates of 800K and 766K, respectively. Service revenues declined 5.2%. Tablets and unlimited promotions by Sprint and T-Mobile surrounding the launch of the iphone 7 hurt results, but this has slowed. Upgrades at 6.3% were low and helped margins. Wireless Margins: Margins of 44.9% compared to 43.2% in 2Q15 were hurt by strong handset subsidies/promotions surrounding the launch of the iphone 7. The company has been aggressive in matching Sprint and T-Mobile's zero-down exchange offers which have been detrimental to margins. Wireline Results Show Improvement: Verizon s total wireline revenues of ~ $7.79B fell ~2%, in line with our forecast and recent trends. Enterprise and consumer trends remain stable. Wireline EBITDA margins rebounded strongly from the lows of 2Q16 helped by a rolling off of Frontier transaction costs, reduced healthcare costs, and the non-cash benefit from reduced pension expenses. Bottom Line: VZ is seeing more competition in wireless and is ceding market share to focus on profits. However, it is focused on growing new OTT services (video/iot/advertising), and it should be able to expand margins and grow its dividend in the 2% range per year. Model attached. Timothy Horan, CFA Tim.Horan@opco.com Brajesh Mishra Brajesh.Mishra@opco.com Disseminated: October 20, :18 EDT; Produced: October 20, :18 EDT Stock Price Performance Company Description Verizon is the incumbent local telecom carrier in the Northeast and in several smaller regions, covering one-third of the US. Verizon Wireless is the largest wireless carrier in the US in terms of subscribers. For analyst certification and important disclosures, see the Disclosure Appendix. Oppenheimer & Co Inc. 85 Broad Street, New York, NY Tel: Fax:

2 Verizon VZ (PERFORM) - NA 5-YEAR PRICE PERFORMANCE INVESTMENT THESIS Source: Bloomberg VZ Verizon is the largest wireless carrier in the US (with the highest margins) and is second to AT&T in enterprise wireline market share. Verizon is benefiting from the explosion in the popularity of smartphones and mobile data usage growth of 50%-plus per year with the highest quality network in the industry due to consistently high CAPX spending. The company has done a good job of divesting non-core assets in order to focus on wireless and enterprise and on FiOS (its fiber voice/video/data offering) in its wireline segment. BASE CASE ASSUMPTION Wireless data growth of 50% YoY supports ARPU despite $/GB declines in the 20-30% range EPS growth slows to mid-single-digit range Positive phone net adds over 500K range per year CATALYSTS VZ leverages wireless network to attack rural broadband customers VZ acquires more spectrum (via auction or secondary transaction) to expand wireless network lead The Internet of Things (IoT) drives wireless revenue above consensus estimates UPSIDE SCENARIO Migration to SDN and NFV improves wireless cost structure. Verizon's wireless video service drives improved advertising revenue Cash flow constraints at TMUS and S force competitors to pull back on promotional activity DOWNSIDE SCENARIO Stronger wireless competitors (TMUS and S) place additional pressure on wireless ARPU and churn. Sale of CA, TX, and FL wireline operations will create tough comps in 2016 VZ continues to split cells (higher OPEX and CAPX) to support data volume growth 2 Timothy Horan, CFA:

3 VZ (PERFORM) - NA Verizon Exhibit 1. Select Performance Data Verizon Selected Performance Data 1Q14 2Q14 3Q14 4Q14 1Q15 2Q15 3Q15 4Q15 1Q16 2Q16 3Q16 YoY Change Recurring EPS $0.84 $0.91 $0.89 $0.71 $1.02 $1.04 $1.04 $0.89 $1.06 $0.94 $ % Revenue Growth (%) 5.0% 5.7% 4.9% 7.4% 4.2% 2.8% 5.0% 3.2% 0.6% -5.3% -6.7% % Consolidated EBITDA Margin (%) 36.8% 35.5% 35.0% 29.4% 37.4% 36.6% 35.8% 31.9% 37.2% 36.3% 36.5% 1.7% Wireline Revenue Growth (%) 0.1% 0.3% -0.8% -1.6% -16.7% -16.8% -16.8% -15.6% -1.6% -2.4% -2.3% -86.6% Wireline EBITDA Margin (%) 22.5% 23.4% 23.0% 23.9% 17.7% 18.7% 18.9% 19.8% 19.0% 14.0% 21.2% 12.7% Access line growth rate (%) -6.6% -6.6% -6.4% -6.1% -23.3% -23.6% -23.7% -24.0% -7.0% -6.8% -7.1% -70.1% Broadband Net Adds (000's) (9) (83) % FiOS TV Net Adds (000's) (41) % Wireless Service Revenue Growth (%) 7.5% 5.9% 4.8% 2.8% -0.4% -2.2% -4.1% -5.6% -6.2% -5.4% -5.2% 25.8% Wireless EBITDA Service Margin (%) 52.1% 50.3% 49.5% 42.0% 55.8% 56.1% 56.4% 52.9% 60.5% 61.5% 59.5% 5.5% Wireless Postpaid Net Adds (000's) 539 1,441 1,516 1, ,134 1,289 1, % Wireless Postpaid ARPU ($) $57.64 $57.05 $57.18 $55.34 $54.03 $52.65 $51.83 $49.77 $48.44 $47.97 $ % Wireless Postpaid Churn 1.1% 0.9% 1.0% 1.1% 1.0% 0.9% 0.9% 1.0% 1.0% 0.9% 1.0% 11.8% Source: Company reports; StreetAccount; Oppenheimer & Co. Inc. estimates. 3

4 Verizon VZ (PERFORM) - NA Exhibit 2. Verizon Quarterly Consolidated Model ($ in millions, except per share) Last Updated: 10/20/2016 Consolidated Q16 2Q16 3Q16 3Q16E 4Q16E 2016E 1Q16 2Q16 3Q16 Wireline 32,094 7,923 7,823 7,787 7,795 7,854 31,387 (1.6%) (2.4%) (2.3%) Wireless (1) 91,680 22,004 21,704 22,101 22,319 23,478 89,287 (1.5%) (4.0%) (3.9%) Other/Eliminations 7,846 2,244 1,005 1,049 1,025 1,050 5,348 Total revenue 131,620 32,171 30,532 30,937 31,140 32, , % (5.3%) (6.7%) Cost of services and sales 49,738 11,584 11,735 11,686 11,953 12,969 47,974 (1.4%) (3.1%) (5.9%) Selling, general & administrative 29,061 6,661 6,394 6,614 6,524 7,261 26,930 (7.6%) (10.0%) (7.1%) Segment Opex 78,799 18,245 18,129 18,300 18,477 20,229 74,903 (3.7%) (5.6%) (6.4%) Non-recurring item (2,510) 23 2, ,363 Intersegment Eliminations 6,254 1,944 1,324 1,358 1,300 1,300 5,926 Adjusted EBITDA 46,567 11,982 11,079 11,279 11,362 10,853 45, % (6.1%) (5.1%) EBITDA margin 35.4% 37.2% 36.3% 36.5% 36.5% 33.5% 35.9% Depreciation & amortization 15,523 3,869 3,844 3,785 3,858 3,966 15, % (1.9%) (2.2%) Eliminations Depreciation & amortization 16,017 4,017 3,982 3,942 3,988 4,096 16, % 0.1% (1.7%) ` Operating income 30,550 7,965 7,097 7,337 7,375 6,757 29, % (9.3%) (6.9%) Operating margin 23.2% 24.8% 23.2% 23.7% 23.7% 20.9% 23.1% Income from affiliates (86) (20) (20) (23) (15) (15) (78) Other income (expense), net Interest expense (4,920) (1,188) (1,013) (1,038) (1,072) (1,093) (4,332) (10.8%) (16.1%) (13.6%) Minority interest (496) (120) (129) (127) (100) (120) (496) NM NM NM Income before taxes 25,234 6,669 5,935 6,246 6,187 5,530 24, % (8.8%) (5.0%) Provision for income taxes (8,911) (2,336) (2,077) (2,124) (2,166) (1,935) (8,472) 0.2% (8.7%) (8.8%) Tax Rate 35.3% 35.0% 35.0% 34.0% 35.0% 35.0% 34.8% Operating Net income 16,323 4,333 3,858 4,122 4,022 3,594 15, % (8.8%) (2.9%) Earnings per share: Reported EPS $ 4.37 $ 1.06 $ 0.17 $ 0.89 $ 0.98 $ 0.88 $ % (83.4%) (10.5%) Non-recurring gain (loss) $ 0.38 $ 0.00 ($ 0.77) ($ 0.12) $ 0.00 $ 0.00 ($ 0.90) Operating EPS $ 3.99 $ 1.06 $ 0.94 $ 1.01 $ 0.98 $ 0.88 $ % (8.8%) (3.1%) Average diluted shares 4,092 4,085 4,085 4,086 4,086 4,087 4,086 (0.9%) 0.0% 0.2% Dividends per share $ 2.23 $ 0.57 $ 0.57 $ 0.59 $ 0.59 $ 0.59 $ % 2.7% 2.7% KEY METRICS Postpaid phone net adds 933 (74) 86 (36) 265 (838) (598) EIP Uptake Rate 54.2% 68.0% 67.0% 70.0% 68.0% 70.0% 68.9% Free cash flows analysis: Net income 16,323 4,333 3,858 4,122 4,022 3,594 15, % (8.8%) (2.9%) plus: D&A 16,017 4,017 3,982 3,942 3,988 4,096 16, % 0.1% (1.7%) minus: Capital expenditures 17,775 3,387 3,886 4,125 4,542 5,287 16,685 (7.6%) (13.4%) (6.0%) % of revenue 13.5% 10.5% 12.7% 13.3% 14.6% 16.3% 13.2% minus: Spectrum Purchases 9, ,000 8,128 minus: Dividends 9,124 2,308 2,308 2,303 2,411 2,411 9, % 2.7% (0.0%) minus: Share buybacks Plus: Asset Sales/Purchases/tax 9,882 (3,000) (3,000) (6,600) 282 Free cash flows (4,236) 2,655 11,528 (1,492) (1,943) (14,609) (1,918) Free Cash Flow Prior to Distributio 14,565 4,963 13, (4,197) 15, % 271.6% (75.7%) Balance sheets data: Cash 4,470 5,846 2,857 6,441 2,857 6,441 6, % (5.0%) 66.2% Total debt 110, ,880 99, , , , ,200 (3.1%) (12.3%) (5.1%) Net debt 105, ,034 96, ,150 98, , ,759 (4.6%) (12.5%) (7.7%) Annual interest expense 4.4% 4.3% 4.1% 3.9% 4.3% 4.1% 3.7% Net PP&E 83,541 83,011 83,172 83,355 83,726 84,547 84, % 0.8% 1.0% Implied useful life (PP&E) Total assets 244, , , , , , , % (3.7%) (4.1%) Shareowners equity 17,842 19,867 20,744 22,563 22,355 23,746 23, % 61.1% 55.2% Net debt / Total capitalization 85.6% 84.0% 82.4% 81.6% 81.6% 82.9% 82.9% Source: Company Reports & Oppenheimer & Co. Inc. estimates. 4

5 VZ (PERFORM) - NA Verizon Exhibit 3. Verizon Quarterly Segment Model ($ in millions, except per share) Year over Year % Change Segment Q16 2Q16 3Q16 3Q16E 4Q16E 2016E 1Q16 2Q16 3Q16 Wireline: Verizon Telecom Mass Markets 14,440 3,602 3,573 3,585 3,602 3,650 14, % (1.2%) 0.0% Global Enterprise 12,050 2,956 2,907 2,886 2,874 2,858 11,607 (3.0%) (3.3%) (3.8%) Global Wholesale 5,263 1,283 1,256 1,239 1,231 1,265 5,043 (4.2%) (4.1%) (4.5%) Sequential growth Other (9.9%) 7.4% 0.0% Total wireline revenue 32,094 7,923 7,823 7,787 7,795 7,854 31,387 (1.6%) (2.4%) (2.3%) Cost of services and sales 18,816 4,644 5,107 4,440 4,677 4,634 18,825 (2.9%) 8.6% (5.4%) Selling, general & administrative 7,256 1,770 1,617 1,693 1,614 1,649 6,729 (3.7%) (10.8%) (4.4%) EBITDA 6,022 1,509 1,099 1,654 1,505 1,571 5, % (26.5%) 10.1% EBITDA margin 18.8% 19.0% 14.0% 21.2% 19.3% 20.0% 18.6% Depreciation & amortization 6,543 1,576 1,562 1,498 1,559 1,571 6,207 (4.3%) (7.8%) (7.0%) Operating income (521) (67) (463) 156 (55) - (374) (69.5%) 132.7% (243.1%) Operating margin (1.6%) (0.8%) (5.9%) 2.0% (0.7%) 0.0% (1.2%) Wireline demand statistics: Total switched access lines (000) 15,035 14,781 14,520 14,236 14,247 14,129 14,129 (7.0%) (6.8%) (7.1%) Absolute decline (4,760) (254) (261) (284) (272) (108) (906) Sequential growth Resale & UNE-P lines 1,188 1,136 1,134 1,119 1,119 1,093 1,093 (8.0%) (8.0%) (8.0%) Wholesale % of total lines 7.9% 7.7% 7.8% 7.9% 7.9% 7.7% 7.7% Broadband subs 7,085 7,097 7,014 7,038 6,994 7,048 7, % (0.7%) (0.5%) Broadband net-adds (83) 24 (20) 10 (37) NM NM NM Broadband subs as % of retail lines 51.2% 52.0% 52.4% 53.7% 53.3% 54.1% 54.1% Consumer ARPU Domestic Wireless (1) : Service 70,396 16,809 16,741 16,684 16,700 16,652 66,886 (6.2%) (5.4%) (5.2%) Equipment & other 21,284 5,195 4,963 5,417 5,619 6,826 22, % 0.8% 0.2% Total wireless revenue 91,680 22,004 21,704 22,101 22,319 23,478 89,287 (1.5%) (4.0%) (3.9%) Cost of services and sales 30,922 6,940 6,628 7,246 7,276 8,335 29,149 (0.3%) (10.5%) (6.2%) Selling, general & administrative 21,805 4,891 4,777 4,921 4,910 5,611 20,200 (8.9%) (9.7%) (8.0%) EBITDA 38,953 10,173 10,299 9,934 10,133 9,532 39, % 3.8% 0.1% As % of total revenue 42.5% 46.2% 47.5% 44.9% 45.4% 40.6% 44.7% Depreciation & amortization 8,980 2,293 2,282 2,287 2,299 2,395 9, % 2.6% 1.2% Operating income 29,973 7,880 8,017 7,647 7,834 7,137 30, % 4.2% (0.3%) Operating margin 32.7% 35.8% 36.9% 34.6% 35.1% 30.4% 34.4% Source: Company Reports & Oppenheimer & Co. Inc. estimates. 5

6 Verizon VZ (PERFORM) - NA Stock prices of other companies mentioned in this report (as of 10/20/16): Samsung (KRX:005930, 1,620,000KRW, Not Covered) Disclosure Appendix Oppenheimer & Co. Inc. does and seeks to do business with companies covered in its research reports. As a result, investors should be aware that the firm may have a conflict of interest that could affect the objectivity of this report. Investors should consider this report as only a single factor in making their investment decision. Analyst Certification - The author certifies that this research report accurately states his/her personal views about the subject securities, which are reflected in the ratings as well as in the substance of this report. The author certifies that no part of his/her compensation was, is, or will be directly or indirectly related to the specific recommendations or views contained in this research report. Potential Conflicts of Interest: Equity research analysts employed by Oppenheimer & Co. Inc. are compensated from revenues generated by the firm including the Oppenheimer & Co. Inc. Investment Banking Department. Research analysts do not receive compensation based upon revenues from specific investment banking transactions. Oppenheimer & Co. Inc. generally prohibits any research analyst and any member of his or her household from executing trades in the securities of a company that such research analyst covers. Additionally, Oppenheimer & Co. Inc. generally prohibits any research analyst from serving as an officer, director or advisory board member of a company that such analyst covers. In addition to 1% ownership positions in covered companies that are required to be specifically disclosed in this report, Oppenheimer & Co. Inc. may have a long position of less than 1% or a short position or deal as principal in the securities discussed herein, related securities or in options, futures or other derivative instruments based thereon. Recipients of this report are advised that any or all of the foregoing arrangements, as well as more specific disclosures set forth below, may at times give rise to potential conflicts of interest. Important Disclosure Footnotes for Companies Mentioned in this Report that Are Covered by Oppenheimer & Co. Inc: Stock Prices as of October 20, 2016 Sprint (S - NYSE, $6.88, PERFORM) AT&T, Inc. (T - NYSE, $39.38, OUTPERFORM) T-Mobile (TMUS - NYSE, $47.32, OUTPERFORM) Yahoo! Inc. (YHOO - NASDAQ, $42.73, OUTPERFORM) 6

7 VZ (PERFORM) - NA Verizon 7

8 Verizon VZ (PERFORM) - NA All price targets displayed in the chart above are for a 12- to- 18-month period. Prior to March 30, 2004, Oppenheimer & Co. Inc. used 6-, 12-, 12- to 18-, and 12- to 24-month price targets and ranges. For more information about target price histories, please write to Oppenheimer & Co. Inc., 85 Broad Street, New York, NY 10004, Attention: Equity Research Department, Business Manager. Oppenheimer & Co. Inc. Rating System as of January 14th, 2008: Outperform(O) - Stock expected to outperform the S&P 500 within the next months. Perform (P) - Stock expected to perform in line with the S&P 500 within the next months. 8

9 VZ (PERFORM) - NA Verizon Underperform (U) - Stock expected to underperform the S&P 500 within the next months. Not Rated (NR) - Oppenheimer & Co. Inc. does not maintain coverage of the stock or is restricted from doing so due to a potential conflict of interest. Oppenheimer & Co. Inc. Rating System prior to January 14th, 2008: Buy - anticipates appreciation of 10% or more within the next 12 months, and/or a total return of 10% including dividend payments, and/or the ability of the shares to perform better than the leading stock market averages or stocks within its particular industry sector. Neutral - anticipates that the shares will trade at or near their current price and generally in line with the leading market averages due to a perceived absence of strong dynamics that would cause volatility either to the upside or downside, and/or will perform less well than higher rated companies within its peer group. Our readers should be aware that when a rating change occurs to Neutral from Buy, aggressive trading accounts might decide to liquidate their positions to employ the funds elsewhere. Sell - anticipates that the shares will depreciate 10% or more in price within the next 12 months, due to fundamental weakness perceived in the company or for valuation reasons, or are expected to perform significantly worse than equities within the peer group. Distribution of Ratings/IB Services Firmwide IB Serv/Past 12 Mos. Rating Count Percent Count Percent OUTPERFORM [O] PERFORM [P] UNDERPERFORM [U] Although the investment recommendations within the three-tiered, relative stock rating system utilized by Oppenheimer & Co. Inc. do not correlate to buy, hold and sell recommendations, for the purposes of complying with FINRA rules, Oppenheimer & Co. Inc. has assigned buy ratings to securities rated Outperform, hold ratings to securities rated Perform, and sell ratings to securities rated Underperform. Company Specific Disclosures Oppenheimer & Co. Inc. makes a market in the securities of T, TMUS and YHOO. Additional Information Available Please log on to or write to Oppenheimer & Co. Inc., 85 Broad Street, New York, NY 10004, Attention: Equity Research Department, Business Manager. Other Disclosures This report is issued and approved for distribution by Oppenheimer & Co. Inc. Oppenheimer & Co. Inc. transacts business on all principal exchanges and is a member of SIPC. This report is provided, for informational purposes only, to institutional and retail investor clients of Oppenheimer & Co. Inc. and does not constitute an offer or solicitation to buy or sell any securities discussed herein in any jurisdiction where such offer or solicitation would be prohibited. The securities mentioned in this report may not be suitable for all types of investors. This report does not take into account the investment objectives, financial situation or specific needs of any particular client of Oppenheimer & Co. Inc. Recipients should consider this report as only a single factor in making an investment decision and should not rely solely on investment recommendations contained herein, if any, as a substitution for the exercise of independent judgment of the merits and risks of investments. The analyst writing the report is not a person or company with actual, implied or apparent authority to act on behalf of any issuer mentioned in the report. Before making an investment decision with respect to any security recommended in this report, the recipient should consider whether such recommendation is appropriate given the recipient's particular investment needs, objectives and financial circumstances. We recommend that investors independently evaluate particular investments and strategies, and encourage investors to seek the advice of a financial advisor. Oppenheimer & Co. Inc. will not treat non-client recipients as its clients solely by virtue of their receiving this report. Past performance is not a guarantee of future results, and no representation or warranty, express or implied, is made regarding future performance of any security mentioned in this report. The price of the securities mentioned in this report and the income they produce may fluctuate and/or be adversely affected by exchange rates, and investors may realize losses on investments 9

10 Verizon VZ (PERFORM) - NA in such securities, including the loss of investment principal. Oppenheimer & Co. Inc. accepts no liability for any loss arising from the use of information contained in this report, except to the extent that liability may arise under specific statutes or regulations applicable to Oppenheimer & Co. Inc. All information, opinions and statistical data contained in this report were obtained or derived from public sources believed to be reliable, but Oppenheimer & Co. Inc. does not represent that any such information, opinion or statistical data is accurate or complete (with the exception of information contained in the Important Disclosures section of this report provided by Oppenheimer & Co. Inc. or individual research analysts), and they should not be relied upon as such. All estimates, opinions and recommendations expressed herein constitute judgments as of the date of this report and are subject to change without notice. Nothing in this report constitutes legal, accounting or tax advice. Since the levels and bases of taxation can change, any reference in this report to the impact of taxation should not be construed as offering tax advice on the tax consequences of investments. As with any investment having potential tax implications, clients should consult with their own independent tax adviser. This report may provide addresses of, or contain hyperlinks to, Internet web sites. Oppenheimer & Co. Inc. has not reviewed the linked Internet web site of any third party and takes no responsibility for the contents thereof. Each such address or hyperlink is provided solely for the recipient's convenience and information, and the content of linked third party web sites is not in any way incorporated into this document. Recipients who choose to access such third-party web sites or follow such hyperlinks do so at their own risk. This research is distributed in the UK and elsewhere throughout Europe, as third party research by Oppenheimer Europe Ltd, which is authorized and regulated by the Financial Conduct Authority (FCA). This research is for information purposes only and is not to be construed as a solicitation or an offer to purchase or sell investments or related financial instruments. This research is for distribution only to persons who are eligible counterparties or professional clients. It is not intended to be distributed or passed on, directly or indirectly, to any other class of persons. In particular, this material is not for distribution to, and should not be relied upon by, retail clients, as defined under the rules of the FCA. Neither the FCA s protection rules nor compensation scheme may be applied. Distribution in Hong Kong: This report is prepared for professional investors and is being distributed in Hong Kong by Oppenheimer Investments Asia Limited (OIAL) to persons whose business involves the acquisition, disposal or holding of securities, whether as principal or agent. OIAL, an affiliate of Oppenheimer & Co. Inc., is regulated by the Securities and Futures Commission for the conduct of dealing in securities, advising on securities, and advising on Corporate Finance. For professional investors in Hong Kong, please contact researchasia@opco.com for all matters and queries relating to this report. This report or any portion hereof may not be reprinted, sold, or redistributed without the written consent of Oppenheimer & Co. Inc. This report or any portion hereof may not be reprinted, sold, or redistributed without the written consent of Oppenheimer & Co. Inc. Copyright Oppenheimer & Co. Inc

Verizon EQUITY RESEARCH COMPANY UPDATE PERFORM. Verizon to Acquire Fleetmatics; Smart/Accretive Acquisition. August 1, 2016 COMMUNICATION AND CLOUD

Verizon EQUITY RESEARCH COMPANY UPDATE PERFORM. Verizon to Acquire Fleetmatics; Smart/Accretive Acquisition. August 1, 2016 COMMUNICATION AND CLOUD EQUITY RESEARCH COMPANY UPDATE August 1, 2016 Stock Rating: PERFORM 12-18 mo. Price Target NA VZ - NYSE $55.41 3-5 Yr. EPS Gr. Rate 12% 52-Wk Range $56.95-$38.06 Shares Outstanding 4,085.0M Float 3,758.0M