The primary financial
statement impact of the September 11, 2001 terrorist attacks
pertains to Verizons 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 2005 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, 2005, we received
insurance proceeds of $849 million. |