Debt

12 Months Ended

Dec. 31, 2022

Debt Disclosure [Abstract]

Debt

Note 7. Debt

Outstanding long-term debt obligations as of December 31, 2022 and 2021 are as follows:

				(dollars in millions)
At December 31,	Maturities	Interest  Rates %		2022		2021
Verizon Communications	< 5 Years	0.75 - 5.82		$	23,929	$	18,406
	5-10 Years	1.50 - 7.88		42,637		43,225
	> 10 Years	1.13 - 8.95		60,134		73,520
	< 5 Years	Floating	(1)	2,992		4,086
	5-10 Years	Floating	(1)	3,029		824
Alltel Corporation	5-10 Years	6.80 - 7.88		94		38
	> 10 Years	N/A		N/A		58
Operating telephone company subsidiaries—debentures	< 5 Years	N/A		N/A		141
	5-10 Years	6.00 - 8.75		475		375
	> 10 Years	5.13 - 7.38		139		250
Other subsidiaries—asset-backed debt	< 5 Years	0.41 - 5.72		9,767		9,620
	< 5 Years	Floating	(2)	10,271		4,610
Finance lease obligations (average rate of 2.5% and 2.2% in 2022 and 2021, respectively)				1,732		1,325
Unamortized discount, net of premium				(4,039)		(4,922)
Unamortized debt issuance costs				(671)		(688)
Total long-term debt, including current maturities				150,489		150,868
Less long-term debt maturing within one year				9,813		7,443
Total long-term debt				$	140,676	$	143,425
Long-term debt maturing within one year				$	9,813	$	7,443
Add commercial paper				150		—
Debt maturing within one year				9,963		7,443
Add long-term debt				140,676		143,425
Total debt				$	150,639	$	150,868

(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 formula set forth in the terms of the notes. The Compounded SOFR for the interest period ending in December 2022 was 3.450%. The one-month and three-month LIBOR at December 31, 2022 was 4.392% and 4.767%, respectively.

(2) The debt obligations bore interest at floating rates, including floating rates associated with SOFR for the interest period, or LIBOR plus an applicable interest margin per annum, as applicable. Floating rates associated with SOFR for the interest period ending in December 2022 ranged from 3.807% to 4.372%.

Maturities of long-term debt (secured and unsecured) outstanding, including current maturities, excluding unamortized debt issuance costs, at December 31, 2022 are as follows:

Years	(dollars in millions)
2023	$	9,279
2024	16,252
2025	8,706
2026	8,304
2027	6,962
Thereafter	99,925

During 2022, we received $17.8 billion of proceeds from long-term borrowings, which included $10.7 billion of proceeds from asset-backed debt transactions. The net proceeds were primarily used for general corporate purposes including the repayment of debt and the funding of certain renewable energy projects. We used $13.6 billion of cash to repay, redeem and repurchase long-term borrowings and finance lease obligations, including $4.9 billion to prepay and repay asset-backed, long-term borrowings. The net proceeds of approximately $1.0 billion from the green bond issued in 2022 are expected to be used to fund certain renewable energy projects.

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 were used to fund certain renewable energy projects.

2022 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, 2022.

Tender Offers

(dollars in millions)	Principal Amount Purchased		Cash Consideration(1)
Verizon and subsidiary 2.987% - 8.950% notes and debentures, due 2032 - 2056	$	5,032	$	5,587

(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 floating rate (LIBOR + 1.000%) notes due 2022	$	1,094	$	1,097
Subsidiary 8.000% debentures due 2022	103		108
Open market repurchases of various Verizon notes (2)	896		759
Total	$	2,093	$	1,964

(1) Represents amount paid to repay or repurchase, including any accrued interest.

(2) During 2022, we recorded net gains of $119 million in connection with the open market repurchases, which were reflected within Other income (expense), net in our consolidated statements of income.

Issuances

(dollars in millions)	Principal Amount Issued		Net Proceeds (1)
Verizon 3.875% notes due 2052 (2)	$	1,000	$	982
Verizon 4.100% notes due 2055	655		650
Verizon 4.250% notes due 2030 (3)	€	1,250	1,227
Verizon 4.750% notes due 2034 (3)	€	1,250	1,231
Total			$	4,090

(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, 2021 through the maturity date of the green bond.

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

Short-term Borrowing and Commercial Paper Program

In March 2022, we entered into and fully drew from a $1.0 billion short-term uncommitted credit facility. In December 2022, we fully repaid $1.0 billion under the short-term uncommitted credit facility. As of December 31, 2022, we had no short-term borrowing outstanding.

In 2022, we issued $27.4 billion in commercial paper and we repaid $27.3 billion of commercial paper. As of December 31, 2022, we had $150 million of commercial paper outstanding. These transactions are reflected within Cash flows from financing activities in our consolidated statements of cash flows.

Asset-Backed Debt

As of December 31, 2022, the carrying value of our asset-backed debt was $20.0 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 the Company, and certain other Company affiliates (collectively, the Originators) transfer device payment plan agreement receivables and certain other receivables (collectively referred to as certain 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 receivables and future collections on such receivables. These 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 certain 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, the Company has agreed to guarantee certain of the payment obligations of Cellco and the Originators to the ABS Entities.

Cash collections on the 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 is included in Debt maturing within one year and Long-term debt in our consolidated balance sheets.

ABS Notes

During the year ended December 31, 2022, we completed the following ABS Notes transactions:

(dollars in millions)	Interest Rates %	Expected Weighted-average Life to Maturity (in years)	Principal Amount Issued
January 2022
Series 2022-1
A Senior class notes	1.040	1.49	$	799
B Junior class notes	1.270	1.49	64
C Junior class notes	1.390	1.49	37
Series 2022-2
A Senior class notes	1.530	2.99	710
B Junior class notes	1.830	2.99	57
C Junior class notes	2.010	2.99	33
January 2022 total			1,700
May 2022
Series 2022-3
A Senior class notes	3.010	1.49	400
B Junior class notes	3.250	1.49	—
C Junior class notes	3.500	1.49	16
Series 2022-4
A Senior class notes	3.400	2.99	488
B Junior class notes	3.640	2.99	42
C Junior class notes	3.890	2.99	20
May 2022 total			966
August 2022
Series 2022-5
A-1a Senior fixed rate class notes	3.720	1.44	351
A-1b Senior floating rate class notes	Compounded SOFR + 0.620	1.44	57
B Junior class notes	3.960	1.44	—
C Junior class notes	4.210	1.44	—
Series 2022-6
A Senior class notes	3.670	2.94	479
B Junior class notes	3.910	2.94	—
C Junior class notes	4.160	2.94	—
August 2022 total			887
November 2022
Series 2022-7
A-1a Senior fixed rate class notes	5.230	1.99	624
A-1b Senior floating rate class notes	Compounded SOFR + 0.850	1.99	267
B Junior class notes	5.480	1.99	—
C Junior class notes	5.720	1.99	41
November 2022 total			932
Total			$	4,485

Under the terms of each series of ABS Notes, there is a revolving period of 18 months, 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, 2022, we made aggregate principal repayments of $4.3 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, 2021, we made aggregate principal repayments of $3.3 billion on ABS Notes that had entered the amortization period, including principal payments made in connection with clean-up redemptions.

In January 2023, we issued $932 million aggregate principal amount of ABS Notes, with a blended interest rate of approximately 4.511%, through an ABS Entity.

ABS Financing Facilities

Under the two loan agreements in connection with the ABS Financing Facility entered into in December 2021 (2021 ABS Financing Facility), we prepaid an aggregate of $515 million in January 2022, borrowed an additional $1.9 billion in March 2022, prepaid an aggregate of $130 million in May 2022 and borrowed an additional $545 million in June 2022. In December 2022, we renewed the loan agreements in connection with the 2021 ABS Financing Facility which reset the revolving period of one or two years, as applicable, and we borrowed an additional $1.9 billion. The aggregate outstanding balance under the 2021 ABS Financing Facility was $7.9 billion as of December 31, 2022.

In October 2022, we entered into an ABS financing facility with a financial institution (2022 ABS Financing Facility). Under the terms of the 2022 ABS Financing Facility, the financial institution makes advances under asset-backed loans backed by certain wireless service accounts receivables of both Consumer customers and Business customers. The loan agreement entered into in connection with the 2022 ABS Financing Facility is outstanding with a final maturity date in June 2024 and the loan agreement bears interest at a floating rate. There is an 18 month revolving period, as set forth in the loan agreement, which may be extended with the approval of the financial institution. Under the loan agreement, 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 applicable ABS Entity. In October 2022, we borrowed $2.0 billion under the loan agreement entered into in connection with the 2022 ABS Financing Facility. The aggregate outstanding balance under the 2022 ABS Financing Facility was $2.0 billion as of December 31, 2022.

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)	2022		2021
Assets
Accounts receivable, net	$	13,906	$	10,705
Prepaid expenses and other	1,409		1,094
Other assets	9,894		5,455
Liabilities
Accounts payable and accrued liabilities	22		10
Debt maturing within one year	6,809		5,024
Long-term debt	13,199		9,178

See Note 8 for additional information on certain receivables used to secure asset-backed debt.

Long-Term Credit Facilities

				At December 31, 2022
(dollars in millions)	Maturities	Facility Capacity		Unused Capacity		Principal Amount Outstanding
Verizon revolving credit facility (1)	2026	$	9,500	$	9,436	$	—
Various export credit facilities (2)	2024 - 2031	11,000		1,000		6,735
Total		$	20,500	$	10,436	$	6,735

(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. As of December 31, 2022, there have been no drawings against the $9.5 billion revolving credit facility since its inception.

(2) During 2022 and 2021, we drew down $3.0 billion and $1.0 billion, respectively, from these facilities. Borrowings under certain of these facilities are amortized 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 January 2023, we submitted an irrevocable request to borrow approximately $515 million from funds available under our export credit facilities in March 2023.

Non-Cash Transactions

During the years ended December 31, 2022, 2021 and 2020, we financed, primarily through alternative financing arrangements, the purchase of approximately $832 million, $461 million, and $1.7 billion, respectively, of long-lived assets consisting primarily of network equipment. As of December 31, 2022 and 2021, $1.7 billion and $1.3 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.

Net Debt Extinguishment Losses

During the years ended December 31, 2022, 2021 and 2020, we recorded net debt extinguishment losses of $1.1 billion, $3.6 billion and $121 million, respectively. The net losses are recorded in Other income (expense), net in our consolidated statements of income. The total losses are reflected within Other, net cash flow from operating activities and the portion of the losses representing cash payments are reflected within Other, net cash flow from financing activities in our consolidated statements of cash flows.

Guarantees

We guarantee the debentures of our operating telephone company subsidiaries. As of December 31, 2022, $614 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 the Company.

Debt Covenants

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