Debt

12 Months Ended

Dec. 31, 2021

Debt Disclosure [Abstract]

Debt

Note 7. Debt

Outstanding long-term debt obligations as of December 31, 2021 and 2020 are as follows:

				(dollars in millions)
At December 31,	Maturities	Interest  Rates %		2021		2020
Verizon Communications	< 5 Years	0.75 - 5.82		$	18,406	$	17,936
	5-10 Years	1.38 - 7.75		43,225		35,423
	> 10 Years	1.13 - 8.95		73,520		65,019
	< 5 Years	Floating	(1)	4,086		2,917
	5-10 Years	Floating	(1)	824		941
Alltel Corporation	5-10 Years	6.80		38		38
	> 10 Years	7.88		58		58
Operating telephone company subsidiaries—debentures	< 5 Years	7.88 - 8.00		141		141
	5-10 Years	6.00 - 8.75		375		317
	> 10 Years	5.13 - 8.75		250		308
GTE LLC (2)	< 5 Years	N/A		N/A		141
	5-10 Years	N/A		N/A		250
Other subsidiaries—asset-backed debt	< 5 Years	0.41 - 3.56		9,620		9,414
	< 5 Years	Floating	(1)	4,610		1,216
Finance lease obligations (average rate of 2.2% and 2.5% in 2021 and 2020, respectively)				1,325		1,284
Unamortized discount, net of premium				(4,922)		(6,057)
Unamortized debt issuance costs				(688)		(604)
Total long-term debt, including current maturities				150,868		128,742
Less long-term debt maturing within one year				7,443		5,569
Total long-term debt				$	143,425	$	123,173
Total long-term debt, including current maturities				$	150,868	$	128,742
Plus short-term notes payable				—		320
Total debt				$	150,868	$	129,062

N/A - not applicable

(1) The debt obligations bore interest at a floating rate based on the Compounded Secured Overnight Financing Rate (SOFR) for the interest period or the London Interbank Offered Rate (LIBOR) plus an applicable interest margin per annum, as applicable. Compounded SOFR is calculated using the SOFR Index published by the Federal Reserve Bank of New York in accordance with the terms of the notes. The Compounded SOFR for the interest period ending in December 2021 was 0.049%. The one-month and three-month LIBOR at December 31, 2021 was 0.101% and 0.209%, respectively.

(2) In November 2021, $141 million of 8.750% GTE LLC notes matured and were repaid. In November 2021, GTE LLC distributed its assets and liabilities to Verizon Communications and was dissolved. Verizon Communications is now the successor obligor on the remaining outstanding balance of $250 million.

Maturities of long-term debt (secured and unsecured) outstanding, including current maturities, excluding unamortized debt issuance costs, at December 31, 2021 are as follows:

Years	(dollars in millions)
2022	$	7,069
2023	6,133
2024	10,014
2025	6,903
2026	8,390
Thereafter	111,725

During 2021, we received $41.4 billion of proceeds from long-term borrowings, which included $8.4 billion of proceeds from asset-backed debt transactions. The net proceeds were primarily used to finance the purchase of wireless licenses won in connection with the FCC's auction for C-Band wireless spectrum, Auction 107, and fund certain renewable energy projects. We used $18.9 billion of cash to repay, redeem and repurchase long-term borrowings and finance lease obligations, including $4.8 billion to prepay and repay asset-backed, long-term borrowings. The net proceeds of approximately $1.0 billion from the green bond issued in 2021 are expected to be used to fund certain renewable energy projects.

During 2020, we received $31.5 billion of proceeds from long-term borrowings, which included $5.6 billion of proceeds from asset-backed debt transactions. The net proceeds were a result of the liquidity strategy that we pursued at the beginning of the COVID-19 pandemic to maintain a higher cash balance in order to further protect the Company against the economic uncertainties associated with the COVID-19

pandemic and to opportunistically raise cash to finance future obligations at a time when we believed that market conditions were favorable. We used $17.2 billion of cash to repay, redeem and repurchase long-term borrowings and finance lease obligations, including $7.4 billion to prepay and repay asset-backed, long-term borrowings. The net proceeds from the green bond issued in 2020 have been fully allocated to certain renewable energy projects.

2021 Significant Debt Transactions

Debt or equity financing may be needed to fund additional investments or development activities or to maintain an appropriate capital structure to ensure our financial flexibility.

The following tables show the significant transactions involving the senior unsecured debt securities of Verizon and its subsidiaries that occurred during the year ended December 31, 2021.

Exchange Offers

(dollars in millions)	Principal Amount Exchanged		Principal Amount Issued
Verizon 0.750% - 4.150% notes and floating rate notes, due 2024 - 2026	$	4,480	$	—
Verizon 2.355% notes due 2032 (1)	—		4,664
Total (2)	$	4,480	$	4,664

(1) The principal amount issued in exchange does not include either an insignificant amount of cash paid in lieu of the issuance of fractional new notes or accrued and unpaid interest paid on the old notes accepted for exchange to the date of exchange.

(2) The debt exchange offers above meet the criteria to be accounted for as a modification of debt. As a result, the excess of the principal amount of new notes issued over the principal amount of notes exchanged of $184 million was recorded as a discount to Long-term debt in the consolidated balance sheets.     

Tender Offers

(dollars in millions)	Principal Amount Purchased		Cash Consideration(1)
Verizon 4.522% - 5.012% notes due 2048 - 2055	$	3,686	$	4,919

(1) The total cash consideration includes the tender offer consideration, plus any accrued and unpaid interest to the date of purchase.

Repayments, Redemptions and Repurchases

(dollars in millions)	Principal Repaid/ Redeemed/ Repurchased		Amount Paid (1)
Verizon 2.946% notes due 2022	$	713	$	730
Verizon 2.450% notes due 2022	794		819
Verizon 5.150% notes due 2023	3,190		3,519
Verizon 4.150% notes due 2024	478		515
GTE LLC 8.750% debentures due 2021	141		141
Open market repurchases of various Verizon and subsidiary notes	2,712		3,354
Total	$	8,028	$	9,078

(1) Represents amount paid to repay, redeem or repurchase, excluding interest.

Issuances

(dollars in millions)	Principal Amount Issued		Net Proceeds (1)
Verizon 0.750% notes due 2024	$	1,750	$	1,746
Verizon floating rate (Compounded SOFR + 0.500%) notes due 2024	750		748
Verizon 1.450% notes due 2026	2,750		2,737
Verizon floating rate (Compounded SOFR + 0.790%) notes due 2026	750		748
Verizon 2.100% notes due 2028	3,000		2,988
Verizon 2.550% notes due 2031	4,250		4,216
Verizon 3.400% notes due 2041	3,750		3,726
Verizon 3.550% notes due 2051	4,500		4,426
Verizon 3.700% notes due 2061	3,500		3,439
Verizon 2.850% notes due 2041 (2)	1,000		991
Verizon 0.375% notes due 2029 (3)	€	1,000	1,186
Verizon 0.750% notes due 2032 (3)	€	1,000	1,181
Verizon 1.125% notes due 2035 (3)	€	750	878
Verizon 2.375% notes due 2028 (3)	C$	1,000	800
Verizon 4.050% notes due 2051 (3)	C$	500	399
Verizon 2.350% notes due 2028 (3)	A$	600	463
Verizon 3.000% notes due 2031 (3)	A$	500	385
Verizon 3.850% notes due 2041 (3)	A$	150	116
Verizon 0.193% bonds due 2028 (3)	CHF	375	403
Verizon 0.555% bonds due 2031 (3)	CHF	325	349
Total			$	31,925

(1) Net proceeds were net of underwriting discounts and other issuance costs. In addition, for securities denominated in a currency other than the U.S. dollar, net proceeds are shown on a U.S. dollar equivalent basis.

(2) An amount equal to the net proceeds from this green bond is expected to be used to fund, in whole or in part, certain renewable energy projects, including new and existing investments made by us during the period from December 1, 2020 through the maturity date of the green bond.

(3) See Note 9 for additional information on derivative transactions related to the issuances.

Commercial Paper Program

In 2021, we issued and repaid $3.4 billion in commercial paper. As of December 31, 2021, we had no commercial paper outstanding. These transactions were recorded within Other, net cash flow from financing in our consolidated statements of cash flows.

Asset-Backed Debt

As of December 31, 2021, the carrying value of our asset-backed debt was $14.2 billion. Our asset-backed debt includes Asset-Backed Notes (ABS Notes) issued to third-party investors (Investors) and loans (ABS Financing Facilities) received from banks and their conduit facilities (collectively, the Banks). Our consolidated asset-backed debt bankruptcy remote legal entities (each, an ABS Entity or collectively, the ABS Entities) issue the debt or are otherwise party to the transaction documentation in connection with our asset-backed debt transactions. Under the terms of our asset-backed debt, Cellco Partnership (Cellco), a wholly-owned subsidiary of Verizon, and certain other affiliates of Verizon (collectively, the Originators) transfer device payment plan agreement receivables to one of the ABS Entities, which in turn transfers such receivables to another ABS Entity that issues the debt. Verizon entities retain the equity interests and residual interests, as applicable, in the ABS Entities, which represent the rights to all funds not needed to make required payments on the asset-backed debt and other related payments and expenses.

Our asset-backed debt is secured by the transferred device payment plan agreement receivables and future collections on such receivables. The device payment plan agreement receivables transferred to the ABS Entities and related assets, consisting primarily of restricted cash, will only be available for payment of asset-backed debt and expenses related thereto, payments to the Originators in respect of additional transfers of device payment plan agreement receivables, and other obligations arising from our asset-backed debt transactions, and will not be available to pay other obligations or claims of Verizon’s creditors until the associated asset-backed debt and other obligations are satisfied. The Investors or Banks, as applicable, which hold our asset-backed debt have legal recourse to the assets securing the debt, but do not have any recourse to Verizon with respect to the payment of principal and interest on the debt. Under a parent support agreement, Verizon has agreed to guarantee certain of the payment obligations of Cellco and the Originators to the ABS Entities.

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 consolidated balance sheets.

Proceeds from our asset-backed debt transactions are reflected in Cash flows from financing activities in our consolidated statements of cash flows. The asset-backed debt issued and the assets securing this debt are included in our consolidated balance sheets.

ABS Notes

During the year ended December 31, 2021, we completed the following ABS Notes transactions:

(dollars in millions)	Interest Rates %	Expected Weighted-average Life to Maturity (in years)	Principal Amount Issued
May 2021
A Senior class notes	0.500	2.99	$	1,500
B Junior class notes	0.690	2.99	119
C Junior class notes	0.890	2.99	81
May 2021 total			1,700
November 2021
A Senior class notes	0.990	2.96	1,247
B Junior class notes	1.280	2.96	76
C Junior class notes	1.380	2.96	77
November 2021 total			1,400
Total			$	3,100

Under the terms of each series of ABS Notes, there is a revolving period that is two years or up to three years, as applicable, during which we may transfer additional receivables to the ABS Entity. During the year ended December 31, 2021, we made aggregate principal repayments of $3.3 billion on ABS Notes that have entered the amortization period, including principal payments made in connection with clean-up redemptions. During the year ended December 31, 2020, we made aggregate principal repayments of $3.4 billion on ABS Notes that had entered the amortization period, including principal payments made in connection with clean-up redemptions. In January 2022, we made a principal payment of $179 million in connection with a clean-up redemption.

In January 2022, we issued $1.7 billion aggregate principal amount of senior and junior ABS Notes through an ABS Entity.

ABS Financing Facilities

In March 2021, we borrowed an additional $1.0 billion under the loan agreement outstanding in connection with the ABS Financing Facility that we originally entered into in 2016 and previously amended and restated in 2019 and 2020 (2020 ABS Financing Facility). In May 2021, the aggregate outstanding balance of $1.5 billion was fully repaid and there was no outstanding balance under the 2020 ABS Financing Facility as of December 31, 2021.

In December 2021, we entered into an ABS financing facility with a number of financial institutions (2021 ABS Financing Facility). Two loan agreements were entered into in connection with the 2021 ABS Financing Facility in December 2021. Under the terms of the 2021 ABS Financing Facility, the financial institutions make advances under asset-backed loans backed by device payment plan agreement receivables of both Consumer customers and Business customers. Two loan agreements are outstanding in connection with the 2021 ABS Financing Facility, one with a final maturity date in December 2025 and the other in December 2026, and each loan agreement bears interest at floating rates. There is a one or two year revolving period, as set forth in the applicable loan agreement, which may be extended with the approval of the financial institutions. Under the loan agreements, we have the right to prepay all or a portion of the advances at any time without penalty, but in certain cases, with breakage costs. Subject to certain conditions, we may also remove receivables from the ABS Entity. In December 2021, we borrowed $4.3 billion under the loan agreements. The aggregate outstanding balance under the 2021 ABS Financing Facility was $4.3 billion as of December 31, 2021. In January 2022, we prepaid an aggregate of $515 million of the two loans outstanding under the 2021 loan agreement.

Variable Interest Entities

The ABS Entities meet the definition of a VIE for which we have determined that we are the primary beneficiary as we have both the power to direct the activities of the entity that most significantly impact the entity’s performance and the obligation to absorb losses or the right to receive benefits of the entity. Therefore, the assets, liabilities and activities of the ABS Entities are consolidated in our financial results and are included in amounts presented on the face of our consolidated balance sheets.

The assets and liabilities related to our asset-backed debt arrangements included in our consolidated balance sheets were as follows:

	At December 31,		At December 31,
(dollars in millions)	2021		2020
Assets
Accounts receivable, net	$	10,705	$	9,257
Prepaid expenses and other	1,094		1,128
Other assets	5,455		2,950
Liabilities
Accounts payable and accrued liabilities	10		8
Debt maturing within one year	5,024		4,191
Long-term debt	9,178		6,413

See Note 8 for additional information on device payment plan agreement receivables used to secure asset-backed debt.

Long-Term Credit Facilities

				At December 31, 2021
(dollars in millions)	Maturities	Facility Capacity		Unused Capacity		Principal Amount Outstanding
Verizon revolving credit facility (1)	2024	$	9,500	$	9,418	N/A
Various export credit facilities (2)	2024 - 2029	7,000		—		$	4,676
Total		$	16,500	$	9,418	$	4,676

N/A - not applicable

(1) The revolving credit facility does not require us to comply with financial covenants or maintain specified credit ratings, and it permits us to borrow even if our business has incurred a material adverse change. The revolving credit facility provides for the issuance of letters of credit.

(2) During both 2021 and 2020, we drew down $1.0 billion from these facilities, respectively. These credit facilities are used to finance equipment-related purchases. Borrowings under certain of these facilities amortize semi-annually in equal installments up to the applicable maturity dates. Maturities reflect maturity dates of principal amounts outstanding. Any amounts borrowed under these facilities and subsequently repaid cannot be reborrowed.

In November 2021, we repaid $500 million under an export credit facility entered into in July 2017.

Non-Cash Transactions

During the years ended December 31, 2021, 2020 and 2019, we financed, primarily through alternative financing arrangements, the purchase of approximately $461 million, $1.7 billion, and $563 million, respectively, of long-lived assets consisting primarily of network equipment. As of December 31, 2021 and 2020, $1.3 billion and $1.6 billion, respectively, relating to these financing arrangements, including those entered into in prior years and liabilities assumed through acquisitions, remained outstanding. These purchases are non-cash financing activities and therefore are not reflected within Capital expenditures in our consolidated statements of cash flows.

Debt Extinguishment Losses

During the years ended December 31, 2021, 2020 and 2019, we recorded debt extinguishment losses of $3.6 billion, $121 million and $3.7 billion, respectively. The losses are recorded in Other income (expense), net in our consolidated statements of income. The total losses are reflected as an adjustment to reconcile net income to Net cash used in operating activities and the portion of the losses representing cash payments are reflected within Net cash used in financing activities in our consolidated statements of cash flows.

Guarantees

We guarantee the debentures of our operating telephone company subsidiaries. As of December 31, 2021, $765 million aggregate principal amount of these obligations remained outstanding. Each guarantee will remain in place for the life of the obligation unless terminated pursuant to its terms, including the operating telephone company no longer being a wholly-owned subsidiary of Verizon.

Debt Covenants

We and our consolidated subsidiaries are in compliance with all of our restrictive covenants in our debt agreements.