Debt

6 Months Ended

Jun. 30, 2023

Debt Disclosure [Abstract]

Debt

Note 5. Debt

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 three and six months ended June 30, 2023.

Repayments and Repurchases

(dollars in millions)	Principal Repaid/ Repurchased		Amount Paid (1)
Three Months Ended March 30, 2023
Verizon 3.500% notes and floating rate notes due 2023 (2)	A$	1,050	$	850
Open market repurchases of various Verizon notes	$	260	190
Three Months Ended March 30, 2023 total			1,040
Three Months Ended June 30, 2023
Verizon 0.375% bonds due 2023 (2)	CHF	600	$	633
Open market repurchases of various Verizon notes	$	247	177
Three Months Ended June 30, 2023 total			810
Six Months Ended June 30, 2023 total			$	1,850

(1) Represents amount paid to repay or repurchase, including any accrued interest. In addition, for securities denominated in a currency other than the U.S. dollar, amount paid is shown on a U.S. dollar equivalent basis.

(2) U.S. dollar amount paid represents the amount payable at maturity per the derivatives entered into in connection with the transaction. See Note 7 for additional information on cross currency swap transactions related to the repayment.

Issuances

(dollars in millions)	Principal Amount Issued		Net Proceeds (1)
Three Months Ended June 30, 2023
Verizon 5.050% notes due 2033 (2)	$	1,000	$	994
Three and Six Months Ended June 30, 2023 total	$	1,000	$	994

(1) Net proceeds were net of underwriting discounts and other issuance costs.

(2) An amount equal to the net proceeds from these notes 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 January 1, 2023 through the maturity date of the notes.

Short-Term Borrowing and Commercial Paper Program

In March 2023, we entered into and fully drew from a $500 million short-term revolving credit facility. As of June 30, 2023, the $500 million borrowed under the facility remains outstanding.

During the six months ended June 30, 2023, we issued $8.4 billion in commercial paper and we repaid $8.5 billion of commercial paper. As of June 30, 2023, we had no commercial paper outstanding. These transactions are reflected within Cash flows from financing activities in our condensed consolidated statements of cash flows.

Asset-Backed Debt

As of June 30, 2023, the carrying value of our asset-backed debt was $21.3 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 condensed consolidated balance sheets.

Proceeds from our asset-backed debt transactions are reflected in Cash flows from financing activities in our condensed consolidated statements of cash flows. The asset-backed debt issued is included in Debt maturing within one year and Long-term debt in our condensed consolidated balance sheets.

ABS Notes

During the six months ended June 30, 2023, we completed the following ABS Notes transactions:

(dollars in millions)	Interest Rates %	Expected Weighted-average Life to Maturity (in years)	Principal Amount Issued
January 2023
Series 2023-1
A Senior class notes	4.490	2.98	$	891
B Junior class notes	4.740	2.98	—
C Junior class notes	4.980	2.98	41
January 2023 total			932
April 2023
Series 2023-2
A Senior class notes	4.890	1.99	891
B Junior class notes	5.130	1.99	—
C Junior class notes	5.380	1.99	41
Series 2023-3
A Senior class notes	4.730	4.99	268
B Junior class notes	4.970	4.99	—
C Junior class notes	5.220	4.99	12
April 2023 total			1,212
June 2023
Series 2023-4
A-1a Senior fixed rate class notes	5.160	2.97	538
A-1b Senior floating rate class notes	Compounded SOFR + 0.850	2.97	175
B Junior class notes	5.400	2.97	—
C Junior class notes	5.650	2.97	33
June 2023 total			746
Total			$	2,890

Under the terms of each series of ABS Notes outstanding as of June 30, 2023, there is a revolving period of up to 18 months, two years, three years, or five years, as applicable, during which we may transfer additional receivables to the ABS Entity. During the six months ended June 30, 2023, we made aggregate principal repayments of $1.7 billion on ABS Notes that have entered the amortization period, including payments in connection with any note redemptions.

In July 2023, in connection with an anticipated redemption of ABS Notes, we made a principal payment, in whole, for $900 million.

ABS Financing Facilities

Under the two loan agreements outstanding in connection with the ABS Financing Facility originally entered into in December 2021 and previously renewed in 2022 (2021 ABS Financing Facility), we borrowed an additional $325 million in March 2023 and prepaid an aggregate of $700 million in April 2023. The aggregate outstanding balance under the 2021 ABS Financing Facility was $7.6 billion as of June 30, 2023.

In March 2023, we borrowed an additional $500 million under the loan agreement outstanding in connection with the ABS Financing Facility that we originally entered into in 2022 (2022 ABS Financing Facility). The aggregate outstanding balance under the 2022 ABS Financing Facility was $2.5 billion as of June 30, 2023.

Variable Interest Entities (VIEs)

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 condensed consolidated balance sheets.

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

	At June 30,		At December 31,
(dollars in millions)	2023		2022
Assets
Accounts receivable, net	$	14,143	$	13,906
Prepaid expenses and other	1,469		1,409
Other assets	11,468		9,894
Liabilities
Accounts payable and accrued liabilities	24		22
Debt maturing within one year	9,593		6,809
Long-term debt	11,749		13,199

See Note 6 for additional information on certain receivables used to secure asset-backed debt.

Long-Term Credit Facilities

				At June 30, 2023
(dollars in millions)	Maturities	Facility Capacity		Unused Capacity		Principal Amount Outstanding
Verizon revolving credit facility (1)	2026	$	9,500	$	9,455	$	—
Various export credit facilities (2)	2024 - 2031	11,000		486		6,720
Total		$	20,500	$	9,941	$	6,720

(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 June 30, 2023, there have been no drawings against the $9.5 billion revolving credit facility since its inception.

(2) During the six months ended June 30, 2023 and 2022, we drew down $515 million and $2.0 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.

Non-Cash Transactions

During the six months ended June 30, 2023 and 2022, we financed, primarily through alternative financing arrangements, the purchase of approximately $719 million and $321 million, respectively, of long-lived assets consisting primarily of network equipment. As of June 30, 2023 and December 31, 2022, $2.2 billion and $1.7 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 condensed consolidated statements of cash flows.

Net Debt Extinguishment Gains (Losses)

During the three and six months ended June 30, 2023, we recorded debt extinguishment gains of $69 million and $139 million, respectively. During the three months ended June 30, 2022, we recorded debt extinguishment gains of $50 million. During the six months ended June 30, 2022, we recorded net debt extinguishment losses of $1.2 billion. The gains and losses are recorded in Other income (expense), net in our condensed consolidated statements of income. The total gains and losses are reflected within Other, net cash flow from operating activities, and the portion of the gains and losses representing cash payments are reflected within Other, net cash flow from financing activities in our condensed consolidated statements of cash flows.

Guarantees

We guarantee the debentures of our operating telephone company subsidiaries. As of June 30, 2023, $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.