Verizon European Holdings Limited - Section 172 Statement for the financial year ending 31 December 2019

Verizon’s culture, strategies and policies are identified and continually reviewed at group level by the senior executives of Verizon. Verizon and its group of companies (“Verizon Group”) believe that it must effectively address and balance the interests of all of its stakeholders, including its shareholders, employees, customers, communities, suppliers and others, in order to put itself in the best position to serve its customers, provide critical services to the community and grow profitably over the long term. This belief is reflected in the breadth and aspiration of the Verizon Group’s corporate purpose to “create the networks that move the world forward”. It is also reflected in the Verizon Group’s values underlying all of the Verizon Group’s decisions: integrity, respect, performance excellence, accountability and social responsibility.

As a holding company for a number of subsidiaries in the Verizon Group and which also participates in various funding activities relating to Verizon Group entities the Company’s principal activity is closely aligned with the Verizon Group and the directors of the Company are therefore guided by the Verizon Group’s culture, policies and strategies. The directors of the Company however recognise that their statutory duties are owed to the Company and believe when taking board decisions during the year ended 31 December 2019 that they have acted in a way that they consider, in good faith, would be most likely to promote the success of the Company, having regard to those matters set out in section 172 of the Companies Act 2006 (“CA 2006”). As the Company has no employees, third party suppliers or customers, the directors do not consider the factors listed in sections 172(1)(b), interests of employees, 172(1)(c), relationships with suppliers and customers, or 172(1)(d), impact of operations on the community and environment, as relevant to the proper discharge of their duties pursuant to section 172 of the CA 2006. As a wholly-owned subsidiary of Verizon Business International Holdings B.V., the directors also did not consider the factor listed in section 172(1)(f), regarding the need to act fairly as between members, as relevant to the proper discharge of their duties.

In their capacity as executives of the Verizon Group, the directors receive a broad range of training, pertaining to their functional roles and more broadly to leadership and other personal skills. To better enable the directors to discharge their duties pursuant to section 172 of the CA 2006, the directors are briefed specifically on their duties as directors of the Company, in particular when reviewing specific transactions that require careful analysis of their duties such as those related to solvency.

The nature of the Company’s activities and its operations during the year were such that the Company’s business strategies, to achieve the Company's long term success, were aligned with the broader Verizon Group which has policies and procedures in place which have guided and assisted the directors during the year when considering the likely consequences in the long term of their decisions. Meetings of board directors were held on a regular basis to enable the directors to consider a range of topics and receive updates from the business including, but not limited to, financial performance, accounting, tax and treasury updates and compliance, and updates on Brexit and associated business continuity issues.

During the year, the directors both at board meetings and in the course of their day to day management of the Company were supported by a number of corporate functions, including Legal, Accounting, Treasury and Tax.

Key Decision

A specific example of how the directors have had regard to the matters set out in section 172 of the CA 2006 when discharging their duties during the year was the directors’ decision on 2 December 2019, by which they approved of Verizon Media (Netherlands) B.V. (“Verizon Media”), an associated company within the Verizon Group, being added to the Verizon EMEA entity notional pooling arrangements with Bank of America NA, the Company, as pool leader, and various other Verizon Group entities which were already part of those arrangements. The directors were briefed by Treasury, Finance and Legal. Consideration was given to the financial position of the Company and of Verizon Media, including both companies’ cash position, net assets, share capital and premium, and retained earnings. Reassurances had been provided by the relevant Finance teams that the financial position of both companies was likely to remain at similar levels to those provided to the directors moving forward. The directors specifically considered the benefit of the proposed arrangements, being an increase in the pool benefit due to Verizon Media’s significant balances being included in the pooling arrangements and the directors approved the arrangements as being most likely to promote the success of the Company. There were no other specific conflicting interests between the Company’s stakeholders that the directors were required to balance.