UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark one)
☒	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 30, 2021

OR

☐	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
	For the transition period from              to

Commission file number: 1-8606

Verizon Communications Inc.

(Exact name of registrant as specified in its charter)

Delaware	23-2259884
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)

1095 Avenue of the Americas		10036
New York,	New York
(Address of principal executive offices)		(Zip Code)

Registrant’s telephone number, including area code: (212) 395-1000

Securities registered pursuant to Section 12(b) of the Act:

Title of Each Class	Trading Symbol(s)	Name of Each Exchange on Which Registered
Common Stock, par value $0.10	VZ	New York Stock Exchange
Common Stock, par value $0.10	VZ	The NASDAQ Global Select Market
1.625% Notes due 2024	VZ24B	New York Stock Exchange
4.073% Notes due 2024	VZ24C	New York Stock Exchange
0.875% Notes due 2025	VZ25	New York Stock Exchange
3.250% Notes due 2026	VZ26	New York Stock Exchange
1.375% Notes due 2026	VZ26B	New York Stock Exchange
0.875% Notes due 2027	VZ27E	New York Stock Exchange
1.375% Notes due 2028	VZ28	New York Stock Exchange
1.125% Notes due 2028	VZ28A	New York Stock Exchange
2.350% Fixed Rate Notes due 2028	VZ28C	New York Stock Exchange
1.875% Notes due 2029	VZ29B	New York Stock Exchange
0.375% Notes due 2029	VZ29D	New York Stock Exchange
1.250% Notes due 2030	VZ30	New York Stock Exchange
1.875% Notes due 2030	VZ30A	New York Stock Exchange
2.625% Notes due 2031	VZ31	New York Stock Exchange
2.500% Notes due 2031	VZ31A	New York Stock Exchange
3.000% Fixed Rate Notes due 2031	VZ31D	New York Stock Exchange
0.875% Notes due 2032	VZ32	New York Stock Exchange
0.750% Notes due 2032	VZ32A	New York Stock Exchange
1.300% Notes due 2033	VZ33B	New York Stock Exchange
4.750% Notes due 2034	VZ34	New York Stock Exchange
3.125% Notes due 2035	VZ35	New York Stock Exchange
1.125% Notes due 2035	VZ35A	New York Stock Exchange
3.375% Notes due 2036	VZ36A	New York Stock Exchange
2.875% Notes due 2038	VZ38B	New York Stock Exchange
1.875% Notes due 2038	VZ38C	New York Stock Exchange
1.500% Notes due 2039	VZ39C	New York Stock Exchange
3.500% Fixed Rate Notes due 2039	VZ39D	New York Stock Exchange
1.850% Notes due 2040	VZ40	New York Stock Exchange
3.850% Fixed Rate Notes due 2041	VZ41C	New York Stock Exchange

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.   ☒  Yes   ☐  No

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).   ☒  Yes   ☐  No

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of "large accelerated filer," "accelerated filer," "smaller reporting company," and "emerging growth company" in Rule 12b-2 of the Exchange Act.
	Large accelerated filer	☒	Accelerated filer	☐
	Non-accelerated filer	☐	Smaller reporting company	☐
			Emerging growth company	☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.   ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).   ☐  Yes   ☒  No

At June 30, 2021, 4,140,116,007 shares of the registrant’s common stock were outstanding, after deducting 151,317,639 shares held in treasury.

TABLE OF CONTENTS

Item No.		Page
PART I - FINANCIAL INFORMATION
Item 1.	Financial Statements (Unaudited)
	Condensed Consolidated Statements of Income	4
	Three and six months ended June 30, 2021 and 2020
	Condensed Consolidated Statements of Comprehensive Income	5
	Three and six months ended June 30, 2021 and 2020
	Condensed Consolidated Balance Sheets	6
	At June 30, 2021 and December 31, 2020
	Condensed Consolidated Statements of Cash Flows	7
	Six months ended June 30, 2021 and 2020
	Notes to Condensed Consolidated Financial Statements	8
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	33
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	53
Item 4.	Controls and Procedures	53
PART II - OTHER INFORMATION
Item 1.	Legal Proceedings	54
Item 1A.	Risk Factors	54
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	54
Item 6.	Exhibits	55
Signature		56
Certifications

Part I - Financial Information

Item 1. Financial Statements (Unaudited)

Condensed Consolidated Statements of Income

Verizon Communications Inc. and Subsidiaries

	Three Months Ended				Six Months Ended
	June 30,				June 30,
(dollars in millions, except per share amounts) (unaudited)	2021		2020		2021		2020
Operating Revenues
Service revenues and other	$	28,221	$	26,692	$	56,144	$	54,173
Wireless equipment revenues	5,543		3,755		10,487		7,884
Total Operating Revenues	33,764		30,447		66,631		62,057
Operating Expenses
Cost of services (exclusive of items shown below)	8,324		7,639		16,344		15,393
Cost of wireless equipment	5,931		4,110		11,433		8,652
Selling, general and administrative expense	7,324		7,156		14,725		15,741
Depreciation and amortization expense	4,020		4,181		8,194		8,331
Total Operating Expenses	25,599		23,086		50,696		48,117
Operating Income	8,165		7,361		15,935		13,940
Equity in earnings (losses) of unconsolidated businesses	1		(13)		9		(25)
Other income (expense), net	502		(72)		903		71
Interest expense	(844)		(1,089)		(1,945)		(2,123)
Income Before Provision For Income Taxes	7,824		6,187		14,902		11,863
Provision for income taxes	(1,875)		(1,348)		(3,575)		(2,737)
Net Income	$	5,949	$	4,839	$	11,327	$	9,126
Net income attributable to noncontrolling interests	$	149	$	139	$	282	$	270
Net income attributable to Verizon	5,800		4,700		11,045		8,856
Net Income	$	5,949	$	4,839	$	11,327	$	9,126
Basic Earnings Per Common Share
Net income attributable to Verizon	$	1.40	$	1.14	$	2.67	$	2.14
Weighted-average shares outstanding (in millions)	4,141		4,139		4,141		4,139
Diluted Earnings Per Common Share
Net income attributable to Verizon	$	1.40	$	1.13	$	2.67	$	2.14
Weighted-average shares outstanding (in millions)	4,143		4,141		4,143		4,141

See Notes to Condensed Consolidated Financial Statements

4

Condensed Consolidated Statements of Comprehensive Income

Verizon Communications Inc. and Subsidiaries

	Three Months Ended				Six Months Ended
	June 30,				June 30,
(dollars in millions) (unaudited)	2021		2020		2021		2020
Net Income	$	5,949	$	4,839	$	11,327	$	9,126
Other Comprehensive Income (Loss), Net of Tax (Expense) Benefit
Foreign currency translation adjustments, net of tax of $(15), $4, $(7) and $0	58		77		20		(43)
Unrealized gain (loss) on cash flow hedges, net of tax of $294, $(133), $(46) and $659	(777)		314		132		(1,896)
Unrealized gain (loss) on marketable securities, net of tax of $0, $(2), $1 and $(1)	—		6		(5)		5
Defined benefit pension and postretirement plans, net of tax of $52, $55, $103 and $111	(155)		(169)		(310)		(338)
Other comprehensive income (loss) attributable to Verizon	(874)		228		(163)		(2,272)
Total Comprehensive Income	$	5,075	$	5,067	$	11,164	$	6,854
Comprehensive income attributable to noncontrolling interests	$	149	$	139	$	282	$	270
Comprehensive income attributable to Verizon	4,926		4,928		10,882		6,584
Total Comprehensive Income	$	5,075	$	5,067	$	11,164	$	6,854

See Notes to Condensed Consolidated Financial Statements

5

Condensed Consolidated Balance Sheets

Verizon Communications Inc. and Subsidiaries

	At June 30,		At December 31,
(dollars in millions, except per share amounts) (unaudited)	2021		2020
Assets
Current assets
Cash and cash equivalents	$	4,657	$	22,171
Accounts receivable	22,237		25,169
Less Allowance for credit losses	980		1,252
Accounts receivable, net	21,257		23,917
Inventories	1,421		1,796
Prepaid expenses and other	8,291		6,710
Total current assets	35,626		54,594
Property, plant and equipment	283,654		279,737
Less Accumulated depreciation	189,452		184,904
Property, plant and equipment, net	94,202		94,833
Investments in unconsolidated businesses	560		589
Wireless licenses	98,034		96,097
Deposits for wireless licenses	45,910		2,772
Goodwill	24,915		24,773
Other intangible assets, net	7,002		9,413
Operating lease right-of-use assets	28,180		22,531
Other assets	14,761		10,879
Total assets	$	349,190	$	316,481
Liabilities and Equity
Current liabilities
Debt maturing within one year	$	7,023	$	5,889
Accounts payable and accrued liabilities	17,328		20,658
Current operating lease liabilities	3,881		3,485
Other current liabilities	11,846		9,628
Total current liabilities	40,078		39,660
Long-term debt	144,894		123,173
Employee benefit obligations	16,713		18,657
Deferred income taxes	37,534		35,711
Non-current operating lease liabilities	23,360		18,000
Other liabilities	11,499		12,008
Total long-term liabilities	234,000		207,549
Commitments and Contingencies (Note 12)
Equity
Series preferred stock ($0.10 par value; 250,000,000 shares authorized; none issued)	—		—
Common stock ($0.10 par value; 6,250,000,000 shares authorized in each period; 4,291,433,646 shares issued)	429		429
Additional paid in capital	13,403		13,404
Retained earnings	66,310		60,464
Accumulated other comprehensive loss	(234)		(71)
Common stock in treasury, at cost (151,317,639 and 153,304,088 shares outstanding)	(6,632)		(6,719)
Deferred compensation – employee stock ownership plans (ESOPs) and other	408		335
Noncontrolling interests	1,428		1,430
Total equity	75,112		69,272
Total liabilities and equity	$	349,190	$	316,481

See Notes to Condensed Consolidated Financial Statements

6

Condensed Consolidated Statements of Cash Flows

Verizon Communications Inc. and Subsidiaries

	Six Months Ended
	June 30,
(dollars in millions) (unaudited)	2021		2020
Cash Flows from Operating Activities
Net Income	$	11,327	$	9,126
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization expense	8,194		8,331
Employee retirement benefits	(1,819)		(32)
Deferred income taxes	1,978		(120)
Provision for expected credit losses	409		831
Equity in losses of unconsolidated businesses, net of dividends received	25		46
Changes in current assets and liabilities, net of effects from acquisition/disposition of businesses	82		3,297
Other, net	242		2,073
Net cash provided by operating activities	20,438		23,552
Cash Flows from Investing Activities
Capital expenditures (including capitalized software)	(8,716)		(9,850)
Acquisitions of businesses, net of cash acquired	(458)		(399)
Acquisitions of wireless licenses	(45,278)		(1,801)
Other, net	51		(74)
Net cash used in investing activities	(54,401)		(12,124)
Cash Flows from Financing Activities
Proceeds from long-term borrowings	31,444		9,305
Proceeds from asset-backed long-term borrowings	2,695		2,844
Repayments of long-term borrowings and finance lease obligations	(7,559)		(8,533)
Repayments of asset-backed long-term borrowings	(2,993)		(4,612)
Dividends paid	(5,198)		(5,090)
Other, net	(1,839)		(146)
Net cash provided by (used in) financing activities	16,550		(6,232)
Increase (decrease) in cash, cash equivalents and restricted cash	(17,413)		5,196
Cash, cash equivalents and restricted cash, beginning of period	23,498		3,917
Cash, cash equivalents and restricted cash, end of period (Note 1)	$	6,085	$	9,113

See Notes to Condensed Consolidated Financial Statements

7

Notes to Condensed Consolidated Financial Statements (Unaudited)

Verizon Communications Inc. and Subsidiaries

Note 1. Basis of Presentation

The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with generally accepted accounting principles (GAAP) in the United States (U.S.) and based upon Securities and Exchange Commission rules that permit reduced disclosure for interim periods. For a more complete discussion of significant accounting policies and certain other information, you should refer to the financial statements included in Verizon Communications Inc.'s (Verizon or the Company) Annual Report on Form 10-K for the year ended December 31, 2020. These financial statements reflect all adjustments that are necessary for a fair presentation of results of operations and financial condition for the interim periods shown, including normal recurring accruals and other items. The results for the interim periods are not necessarily indicative of results for the full year.

Certain amounts have been reclassified to conform to the current period’s presentation.

Earnings Per Common Share

There were a total of approximately 2 million outstanding dilutive securities, primarily consisting of restricted stock units, included in the computation of diluted earnings per common share for the three and six months ended June 30, 2021 and June 30, 2020.

Cash, Cash Equivalents and Restricted Cash

We consider all highly liquid investments with an original maturity of 90 days or less when purchased to be cash equivalents. Cash equivalents are stated at cost, which approximates quoted market value and includes amounts held in money market funds.

Cash collections on the device payment plan agreement receivables collateralizing our asset-backed debt securities are required at certain specified times to be placed into segregated accounts. Deposits to the segregated accounts are considered restricted cash and are included in Prepaid expenses and other and Other assets in our condensed consolidated balance sheets.

Assets held for sale include cash, cash equivalents and restricted cash in our media business, Verizon Media. See Note 3 for additional information.

Cash, cash equivalents and restricted cash are included in the following line items in the condensed consolidated balance sheets:

	At June 30,		At December 31,		Increase / (Decrease)
(dollars in millions)	2021		2020
Cash and cash equivalents	$	4,657	$	22,171	$	(17,514)
Restricted cash:
Prepaid expenses and other	1,189		1,195		(6)
Other assets	94		132		(38)
Assets held for sale:
Prepaid expenses and other	145		—		145
Cash, cash equivalents and restricted cash	$	6,085	$	23,498	$	(17,413)

Note 2. Revenues and Contract Costs

We earn revenue from contracts with customers, primarily through the provision of telecommunications and other services and through the sale of wireless equipment.

Revenue by Category

We have two reportable segments that we operate and manage as strategic business units - Consumer and Business. Revenue is disaggregated by products and services within Consumer and customer groups (Small and Medium Business, Global Enterprise, Public Sector and Other, and Wholesale) within Business. See Note 11 for additional information on revenue by segment.

Corporate and other includes the results of our media business, Verizon Media Group (Verizon Media), and other businesses. Verizon Media generated revenues from contracts with customers under Accounting Standards Updated (ASU) 2014-09, "Revenue from Contracts with Customers" (Topic 606) of approximately $2.1 billion and $3.9 billion during the three and six months ended June 30, 2021, respectively. Verizon Media generated revenues from contracts with customers under Topic 606 of approximately $1.4 billion and $3.1 billion during the three and six months ended June 30, 2020, respectively.     

We also earn revenues that are not accounted for under Topic 606 from leasing arrangements (such as those for towers and equipment), captive reinsurance arrangements primarily related to wireless device insurance and the interest on equipment financed under a device payment plan agreement when sold to the customer by an authorized agent. As allowed by the practical expedient within ASU 2016-02, "Leases" (Topic 842), we have elected to combine the lease and non-lease components for those arrangements of customer premise equipment where we are the lessor as components accounted for under Topic 606. During the three and six months ended June 30, 2021, revenues from

8

arrangements that were not accounted for under Topic 606 were approximately $768 million and $1.5 billion, respectively. During the three and six months ended June 30, 2020, revenues from arrangements that were not accounted for under Topic 606 were approximately $785 million and $1.6 billion, respectively.

Remaining Performance Obligations

When allocating the total contract transaction price to identified performance obligations, a portion of the total transaction price may relate to service performance obligations which were not satisfied or are partially satisfied as of the end of the reporting period. Below we disclose information relating to these unsatisfied performance obligations. We apply the practical expedient available under Topic 606 that provides the option to exclude the expected revenues arising from unsatisfied performance obligations related to contracts that have an original expected duration of one year or less. This situation primarily arises with respect to certain month-to-month service contracts. At June 30, 2021, month-to-month service contracts represented approximately 92% of our wireless postpaid contracts and approximately 80% of our wireline Consumer and Small and Medium Business contracts, compared to June 30, 2020, for which month-to-month service contracts represented approximately 89% of our wireless postpaid contracts and 67% of our wireline Consumer and Small and Medium Business contracts.

Additionally, certain contracts provide customers the option to purchase additional services. The fees related to these additional services are recognized when the customer exercises the option (typically on a month-to-month basis).

Contracts for wireless services are generally either month-to-month and cancellable at any time (typically under a device payment plan) or contain terms ranging from greater than one month to up to two years (typically under a fixed-term plan). Additionally, customers may incur charges based on usage or additional optional services purchased in conjunction with entering into a contract that can be canceled at any time and therefore are not included in the transaction price. The transaction price allocated to service performance obligations, which are not satisfied or are partially satisfied as of the end of the reporting period, are generally related to contracts that are not accounted for as month-to-month contracts.

Our Consumer group customers also include traditional wholesale resellers that purchase and resell wireless service under their own brands to their respective customers. Reseller arrangements generally include a stated contract term, which typically extends longer than two years and, in some cases, include a periodic minimum revenue commitment over the contract term for which revenues will be recognized in future periods.

Consumer customer contracts for wireline services are generally month-to-month; however, they may have a service term of two years or shorter than twelve months. Certain contracts with Business customers for wireline services extend into future periods, contain fixed monthly fees and usage-based fees, and can include annual commitments in each year of the contract or commitments over the entire specified contract term; however, a significant number of contracts for wireline services with our Business customers have a contract term that is twelve months or less.

Additionally, there are certain contracts with Business customers for wireline and telematics services and certain Verizon Media contracts with customers that have a contractual minimum fee over the total contract term. We cannot predict the time period when revenue will be recognized related to those contracts; thus, they are excluded from the time bands below. These contracts have varying terms spanning over approximately seven years ending in January 2029 and have aggregate contract minimum payments totaling $2.8 billion.

At June 30, 2021, the transaction price related to unsatisfied performance obligations for total Verizon that is expected to be recognized for the remainder of 2021, 2022 and thereafter was $9.4 billion, $11.7 billion and $3.4 billion, respectively. Remaining performance obligation estimates are subject to change and are affected by several factors, including terminations and changes in the timing and scope of contracts, arising from contract modifications.

Accounts Receivable and Contract Balances

The timing of revenue recognition may differ from the time of billing to our customers. Receivables presented in our condensed consolidated balance sheets represent an unconditional right to consideration. Contract balances represent amounts from an arrangement when either Verizon has performed, by transferring goods or services to the customer in advance of receiving all or partial consideration for such goods and services from the customer, or the customer has made payment to Verizon in advance of obtaining control of the goods and/or services promised to the customer in the contract.

Contract assets primarily relate to our rights to consideration for goods or services provided to customers but for which we do not have an unconditional right at the reporting date. Under a fixed-term plan, total contract revenue is allocated between wireless service and equipment revenues. In conjunction with these arrangements, a contract asset is created, which represents the difference between the amount of equipment revenue recognized upon sale and the amount of consideration received from the customer when the performance obligation related to the transfer of control of the equipment is satisfied. The contract asset is reclassified to accounts receivable as wireless services are provided and billed. We have the right to bill the customer as service is provided over time, which results in our right to the payment being unconditional. The contract asset balances are presented in our condensed consolidated balance sheets as Prepaid expenses and other and Other assets. We recognize the allowance for credit losses at inception and reassess quarterly based on management’s expectation of the asset’s collectability.

9

Contract liabilities arise when we bill our customers and receive consideration in advance of providing the goods or services promised in the contract. We typically bill service one month in advance, which is the primary component of the contract liability balance. Contract liabilities are recognized as revenue when services are provided to the customer. The contract liability balances are presented in our condensed consolidated balance sheets as Other current liabilities and Other liabilities.

The following table presents information about receivables from contracts with customers:

	At June 30,		At January 1,		At June 30,		At January 1,
(dollars in millions)	2021		2021		2020		2020
Receivables(1)	$	9,387	$	12,029	$	10,967	$	12,078
Device payment plan agreement receivables(2)	10,836		10,358		10,047		11,741

(1)Balances do not include receivables related to the following contracts: leasing arrangements (such as those for towers and equipment), captive reinsurance arrangements primarily related to wireless device insurance and the interest on equipment financed under a device payment plan agreement when sold to the customer by an authorized agent.

(2)Included in device payment plan agreement receivables presented in Note 7. Balances do not include receivables derived from the sale of equipment on a device payment plan through an authorized agent.

The following table presents information about contract balances:

	At June 30,		At January 1,		At June 30,		At January 1,
(dollars in millions)	2021		2021		2020		2020
Contract asset	$	972	$	937	$	993	$	1,150
Contract liability (1)	5,846		5,598		5,275		5,307

(1) Revenue recognized related to contract liabilities existing at January 1, 2021 were $199 million and $4.1 billion for the three and six months ended June 30, 2021, respectively. Revenue recognized related to contract liabilities existing at January 1, 2020 were $204 million and $4.0 billion, for the three and six months ended June 30, 2020, respectively.

The balance of contract assets and contract liabilities recorded in our condensed consolidated balance sheets were as follows:

	At June 30,		At December 31,
(dollars in millions)	2021		2020
Assets
Prepaid expenses and other	$	772	$	733
Other assets	200		204
Total	$	972	$	937
Liabilities
Other current liabilities	$	4,985	$	4,843
Other liabilities	861		755
Total	$	5,846	$	5,598

Contract Costs

Topic 606 requires the recognition of an asset for incremental costs to obtain a customer contract, which are then amortized to expense over the respective periods of expected benefit. We recognize an asset for incremental commission expenses paid to internal and external sales personnel and agents in conjunction with obtaining customer contracts. We only defer these costs when we have determined the commissions are incremental costs that would not have been incurred absent the customer contract and are expected to be recoverable. Costs to obtain a contract are amortized and recorded ratably as commission expense over the period representing the transfer of goods or services to which the assets relate. Costs to obtain wireless contracts are amortized over both of our Consumer and Business customers' estimated device upgrade cycles, as such costs are typically incurred each time a customer upgrades. Costs to obtain wireline contracts are amortized as expense over the estimated customer relationship period for our Consumer customers. Incremental costs to obtain wireline contracts for our Business customers are insignificant. Costs to obtain contracts are recorded in Selling, general and administrative expense.

We also defer costs incurred to fulfill contracts that: (1) relate directly to the contract; (2) are expected to generate resources that will be used to satisfy our performance obligation under the contract; and (3) are expected to be recovered through revenue generated under the contract. Contract fulfillment costs are expensed as we satisfy our performance obligations and recorded in Cost of services. These costs principally relate to direct costs that enhance our wireline business resources, such as costs incurred to install circuits.

We determine the amortization periods for our costs incurred to obtain or fulfill a customer contract at a portfolio level due to the similarities within these customer contract portfolios.

Other costs, such as general costs or costs related to past performance obligations, are expensed as incurred.

10

Collectively, costs to obtain a contract and costs to fulfill a contract are referred to as deferred contract costs, and amortized over a two-to six-year period. Deferred contract costs are classified as current or non-current within Prepaid expenses and other and Other assets, respectively.

The balances of deferred contract costs included in our condensed consolidated balance sheets were as follows:

	At June 30,		At December 31,
(dollars in millions)	2021		2020
Assets
Prepaid expenses and other	$	2,401	$	2,472
Other assets	2,113		2,070
Total	$	4,514	$	4,542

For the three and six months ended June 30, 2021, we recognized expense of $743 million and $1.5 billion, respectively, associated with the amortization of deferred contract costs, primarily within Selling, general and administrative expense in our condensed consolidated statements of income. For the three and six months ended June 30, 2020, we recognized expense of $767 million and $1.5 billion, respectively, associated with the amortization of deferred contract costs, primarily within Selling, general and administrative expense in our condensed consolidated statements of income.

We assess our deferred contract costs for impairment on a quarterly basis. We recognize an impairment charge to the extent the carrying amount of a deferred cost exceeds the remaining amount of consideration we expect to receive in exchange for the goods and services related to the cost, less the expected costs related directly to providing those goods and services that have not yet been recognized as expenses. There have been no impairment charges recognized for the three and six months ended June 30, 2021 or June 30, 2020.

Note 3. Acquisitions and Divestitures

Spectrum License Transactions

In March 2020, the Federal Communications Commission's (FCC) incentive auction, Auction 103, for spectrum licenses in the upper 37 Gigahertz (GHz), 39 GHz, and 47 GHz bands concluded. Verizon participated in this incentive auction and was the high bidder on 4,940 licenses, which primarily consisted of 37 GHz and, to a lesser extent, 39 GHz spectrum. As an incumbent licensee, our 39 GHz licenses provided us with incentive payments that were applied towards the purchase price of spectrum in the auction. The value of the licenses won by Verizon amounted to $3.4 billion, of which $1.8 billion was settled with the relinquished 39 GHz licenses. The remaining balance was settled in cash of $1.6 billion, of which $101 million was paid in December 2019. In connection with the incentive auction, a pre-tax net loss of $1.2 billion ($914 million after-tax) was recorded in Selling, general and administrative expense in the condensed consolidated statement of income during the six months ended June 30, 2020 because the exchange of the previously held licenses for new licenses had commercial substance. See Note 4 for additional information. The new reconfigured licenses were received in the second quarter 2020 and are included in Wireless licenses in our condensed consolidated balance sheet.

In September 2020, the FCC completed Auction 105 for Priority Access Licenses. Verizon participated in the auction and was the high bidder on 557 licenses in the 3.5 GHz band valued at approximately $1.9 billion. Verizon made payments for these licenses in 2020 and received them from the FCC in March 2021. The purchase cost for these licenses and related capitalized interest, to the extent qualifying activities have occurred, are included in Wireless licenses in our condensed consolidated balance sheet.

In February 2021, the FCC concluded Auction 107 for C-Band wireless spectrum. Verizon was the winning bidder on 3,511 licenses, consisting of contiguous C-Band spectrum bands ranging between 140 and 200 megahertz of C-Band spectrum in all 406 markets available in the auction. Verizon paid $45.5 billion for the licenses it won, of which $44.6 billion was paid in the first quarter of 2021. In accordance with the rules applicable to the auction, Verizon is required to make additional payments to acquire the licenses. The payments are for our allocable share of clearing costs incurred by, and incentive payments due to, the incumbent license holders associated with the auction, which are estimated to be $7.4 billion. We expect to begin making these payments in 2021 for the initial 46 markets and continue to do so for the remaining markets through 2024. These payments are dependent on the incumbent license holders accelerated clearing of the spectrum for Verizon’s use and, therefore, the final timing and amounts could differ based on the incumbent holders’ execution of their clearing process. Per FCC order, the clearing must be completed by December 2025.

The carrying value of the wireless spectrum won in Auction 107 will consist of all payments required to participate and purchase licenses in the auction, including Verizon’s allocable share of clearing costs incurred by, and incentive payments due to, the incumbent license holders associated with the auction that we are obligated to pay in order to acquire the licenses. Carrying value will also include capitalized interest to the extent qualifying activities have occurred. On July 23, 2021 Verizon received the wireless licenses from the FCC. The carrying value is recorded within Deposits for wireless licenses in our condensed consolidated balance sheet as of June 30, 2021, and has been subsequently reclassified to Wireless licenses upon receipt of the corresponding licenses in July 2021.

Refer to Note 6 for further details on significant debt transactions.

During the three and six months ended June 30, 2021, we entered into and completed various other wireless license acquisitions for cash consideration of an insignificant amount and approximately $90 million, respectively. In March 2021, we reached two agreements to sell certain wireless licenses for insignificant cash consideration. As of June 30, 2021, these wireless licenses are classified as assets held for sale

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within Other assets and we recognized a pre-tax loss during the six months ended June 30, 2021 of $223 million ($167 million after-tax). The agreements are subject to regulatory approval and buyer financing conditions.

Blue Jeans Network, Inc.

In April 2020, we entered into a definitive purchase agreement to acquire Blue Jeans Network, Inc. (BlueJeans), an enterprise-grade video conferencing and event platform, whose services are sold to Business customers globally. The transaction closed in May 2020. The aggregate cash consideration paid by Verizon at the closing of the transaction was approximately $397 million, net of cash acquired.

TracFone Wireless, Inc.

In September 2020, we entered into a purchase agreement (Tracfone Purchase Agreement) with América Móvil to acquire TracFone Wireless, Inc. (Tracfone), a provider of prepaid and value mobile services in the U.S. Under the terms of the Tracfone Purchase Agreement, we will acquire all of the stock of Tracfone for approximately $3.1 billion in cash and $3.1 billion in Verizon common stock, subject to customary adjustments, at closing. The number of shares issued will be based on an average trading price determined as of the closing date and is subject to a minimum number of shares issuable of 47,124,445 and a maximum number of shares issuable of 57,596,544. The Tracfone Purchase Agreement also includes up to an additional $650 million in future cash consideration related to the achievement of certain performance measures and other commercial arrangements. The transaction is subject to regulatory approvals and closing conditions and is expected to close in the second half of 2021.

Bluegrass Cellular

In October 2020, we entered into a definitive agreement to acquire certain assets of Bluegrass Cellular (Bluegrass), a rural wireless operator serving central Kentucky. Bluegrass provides wireless service to 210,000 customers in 34 counties in rural service areas 3, 4, and 5 in Central Kentucky. The transaction closed in March 2021. The aggregate cash consideration paid by Verizon at the closing of the transaction was approximately $410 million, net of cash acquired, which is subject to customary closing adjustments.

The financial results of Bluegrass are included in the consolidated results of Verizon from the date of acquisition. These amounts are insignificant for the three months and six months ended June 30, 2021.

The acquisition of Bluegrass was accounted for as a business combination. We are currently assessing the identification and measurement of the assets acquired and liabilities assumed based on their fair values as of the close of the acquisition. Preliminarily, we recorded approximately $141 million of plant, property and equipment, $135 million of intangible assets and $91 million of goodwill. Goodwill is calculated as the difference between the acquisition date fair value of the consideration transferred and the fair value of the net assets acquired. The goodwill represents future economic benefits that we expect to achieve as a result of the acquisition. The goodwill related to this acquisition is included within Consumer.

Verizon Media

On May 2, 2021, Verizon entered into a definitive agreement with an affiliate of Apollo Global Management Inc. pursuant to which we agreed to sell Verizon Media in return for consideration of $4.3 billion in cash, subject to customary adjustments, $750 million in non-convertible preferred limited partnership units of the affiliate, and 10% of the fully-diluted common limited partnership units of the affiliate. The sale is subject to customary regulatory approvals and closing conditions and is expected to close in the second half of 2021.

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The following table summarizes the major classes of assets and liabilities of Verizon Media which are currently included in Verizon's continuing operations and classified as held for sale in our condensed consolidated balance sheet as of June 30, 2021:

	At June 30,
(dollars in millions)	2021
Assets held for sale:
Prepaid expenses and other
Cash and cash equivalents	$	100
Restricted cash	45
Accounts receivable	1,843
Other	127
	$	2,115
Other assets
Property, plant and equipment, net	$	1,140
Other intangible assets, net	2,469
Other	227
	$	3,836
Liabilities held for sale:
Other current liabilities
Accounts payable and accrued liabilities	$	1,665
Other	280
	$	1,945
Other liabilities	$	390

The sale includes all of the assets of Verizon Media, including its brands, businesses, and web domains. The operating results of this business are included within our Corporate and other segment for all periods presented. Refer to Note 2 for further details on revenues generated by Verizon Media under Topic 606.

Other

During the three and six months ended June 30, 2021, we completed other acquisitions for insignificant amounts of cash consideration.

Note 4. Wireless Licenses, Goodwill, and Other Intangible Assets

Wireless Licenses

The carrying amounts of our Wireless licenses, as well as wireless spectrum for which licenses have not yet been received, are as follows:

	At June 30,		At December 31,
(dollars in millions)	2021		2020
Wireless licenses	$	98,034	$	96,097
Deposits for wireless licenses	45,910		2,772

At June 30, 2021 and 2020, approximately $53.5 billion and $3.5 billion, respectively, of wireless licenses were under development for commercial service for which we were capitalizing interest costs. At June 30, 2021, the $53.5 billion was comprised of $8.0 billion recorded in Wireless licenses and $45.5 billion recorded in Deposits for wireless licenses. At June 30, 2020, $3.5 billion was recorded in Wireless licenses. We recorded approximately $154 million and $101 million of capitalized interest on wireless licenses for the six months ended June 30, 2021 and 2020, respectively. We recorded approximately $455 million of capitalized interest on Deposits for wireless licenses during the six months ended June 30, 2021.

In the first quarter of 2020, we reclassified substantially all of our 39 GHz wireless licenses, including capitalized interest, with a carrying value of $2.8 billion to assets held for sale in connection with the FCC's incentive auction, Auction 103. As a result, these wireless licenses were adjusted down to their fair value of $1.6 billion resulting in a pre-tax loss of $1.2 billion ($914 million after-tax) in 2020. The new reconfigured licenses were received in the second quarter 2020 and had a value of $3.4 billion.

During the six months ended June 30, 2021, we renewed various wireless licenses in accordance with FCC regulations. The average renewal period for these licenses was 10 years.

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Goodwill

Changes in the carrying amount of Goodwill are as follows:

(dollars in millions)	Consumer		Business		Other		Total
Balance at January 1, 2021 (1)	$	17,222	$	7,535	$	16	$	24,773
Acquisitions (2)	91		—		37		128
Reclassifications, adjustments and other	3		11		—		14
Balance at June 30, 2021 (1)	$	17,316	$	7,546	$	53	$	24,915

(1) Goodwill is net of accumulated impairment charges of $4.8 billion, related to our Media reporting unit.

(2) The change in goodwill due to acquisitions is related to Bluegrass and other insignificant transactions. See Note 3 for additional information.

Other Intangible Assets

The following table displays the composition of Other intangible assets, net as well as the respective amortization period:

	At June 30, 2021						At December 31, 2020
(dollars in millions)	Gross Amount		Accumulated Amortization		Net Amount		Gross Amount		Accumulated Amortization		Net Amount
Customer lists (8 to 13 years)	$	1,951	$	(996)	$	955	$	4,021	$	(1,961)	$	2,060
Non-network internal-use software (5 to 7 years)	20,080		(14,182)		5,898		21,685		(15,104)		6,581
Other (4 to 25 years)	901		(752)		149		1,771		(999)		772
Total	$	22,932	$	(15,930)	$	7,002