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, 2024

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
0.875% Notes due 2025	VZ 25	New York Stock Exchange
3.25% Notes due 2026	VZ 26	New York Stock Exchange
1.375% Notes due 2026	VZ 26B	New York Stock Exchange
0.875% Notes due 2027	VZ 27E	New York Stock Exchange
1.375% Notes due 2028	VZ 28	New York Stock Exchange
1.125% Notes due 2028	VZ 28A	New York Stock Exchange
2.350% Fixed Rate Notes due 2028	VZ 28C	New York Stock Exchange
1.875% Notes due 2029	VZ 29B	New York Stock Exchange
0.375% Notes due 2029	VZ 29D	New York Stock Exchange
1.250% Notes due 2030	VZ 30	New York Stock Exchange
1.875% Notes due 2030	VZ 30A	New York Stock Exchange
4.250% Notes due 2030	VZ 30D	New York Stock Exchange
2.625% Notes due 2031	VZ 31	New York Stock Exchange
2.500% Notes due 2031	VZ 31A	New York Stock Exchange
3.000% Fixed Rate Notes due 2031	VZ 31D	New York Stock Exchange
0.875% Notes due 2032	VZ 32	New York Stock Exchange
0.750% Notes due 2032	VZ 32A	New York Stock Exchange
3.500% Notes due 2032	VZ 32B	New York Stock Exchange
1.300% Notes due 2033	VZ 33B	New York Stock Exchange

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

Title of Each Class	Trading Symbol(s)	Name of Each Exchange on Which Registered
4.75% Notes due 2034	VZ 34	New York Stock Exchange
4.750% Notes due 2034	VZ 34C	New York Stock Exchange
3.125% Notes due 2035	VZ 35	New York Stock Exchange
1.125% Notes due 2035	VZ 35A	New York Stock Exchange
3.375% Notes due 2036	VZ 36A	New York Stock Exchange
3.750% Notes due 2036	VZ 36B	New York Stock Exchange
2.875% Notes due 2038	VZ 38B	New York Stock Exchange
1.875% Notes due 2038	VZ 38C	New York Stock Exchange
1.500% Notes due 2039	VZ 39C	New York Stock Exchange
3.50% Fixed Rate Notes due 2039	VZ 39D	New York Stock Exchange
1.850% Notes due 2040	VZ 40	New York Stock Exchange
3.850% Fixed Rate Notes due 2041	VZ 41C	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, 2024, 4,209,519,996 shares of the registrant’s common stock were outstanding, after deducting 81,913,650 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, 2024 and 2023
	Condensed Consolidated Statements of Comprehensive Income	5
	Three and six months ended June 30, 2024 and 2023
	Condensed Consolidated Balance Sheets	6
	At June 30, 2024 and December 31, 2023
	Condensed Consolidated Statements of Cash Flows	7
	Six months ended June 30, 2024 and 2023
	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	54
Item 4.	Controls and Procedures	54
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	55
Item 5.	Other Information	55
Item 6.	Exhibits	56
Signature		57
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)	2024		2023		2024		2023
Operating Revenues
Service revenues and other	$	27,798	$	27,319	$	55,418	$	54,471
Wireless equipment revenues	4,998		5,277		10,359		11,037
Total Operating Revenues	32,796		32,596		65,777		65,508
Operating Expenses
Cost of services (exclusive of items shown below)	6,904		6,986		13,871		14,064
Cost of wireless equipment	5,567		5,778		11,472		12,204
Selling, general and administrative expense	8,024		8,253		16,167		15,759
Depreciation and amortization expense	4,483		4,359		8,928		8,677
Total Operating Expenses	24,978		25,376		50,438		50,704
Operating Income	7,818		7,220		15,339		14,804
Equity in losses of unconsolidated businesses	(14)		(33)		(23)		(24)
Other income (expense), net	(72)		210		126		324
Interest expense	(1,698)		(1,285)		(3,333)		(2,492)
Income Before Provision For Income Taxes	6,034		6,112		12,109		12,612
Provision for income taxes	(1,332)		(1,346)		(2,685)		(2,828)
Net Income	$	4,702	$	4,766	$	9,424	$	9,784
Net income attributable to noncontrolling interests	$	109	$	118	$	229	$	227
Net income attributable to Verizon	4,593		4,648		9,195		9,557
Net Income	$	4,702	$	4,766	$	9,424	$	9,784
Basic Earnings Per Common Share
Net income attributable to Verizon	$	1.09	$	1.10	$	2.18	$	2.27
Weighted-average shares outstanding (in millions)	4,215		4,208		4,215		4,207
Diluted Earnings Per Common Share
Net income attributable to Verizon	$	1.09	$	1.10	$	2.18	$	2.27
Weighted-average shares outstanding (in millions)	4,221		4,213		4,220		4,212

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)	2024		2023		2024		2023
Net Income	$	4,702	$	4,766	$	9,424	$	9,784
Other Comprehensive Income (Loss), Net of Tax (Expense) Benefit
Foreign currency translation adjustments, net of tax of $(1), $1, $(6) and $4	—		(6)		(50)		20
Unrealized gain on cash flow hedges, net of tax of $(7), $(8), $(18) and $(15)	19		25		54		46
Unrealized gain (loss) on fair value hedges, net of tax of $36, $(100), $(32) and $3	(104)		293		96		(9)
Unrealized gain (loss) on marketable securities, net of tax of $0, $0, $1 and $(1)	(1)		(2)		(3)		2
Defined benefit pension and postretirement plans, net of tax of $1, $21, $2 and $36	(2)		(54)		(4)		(115)
Other comprehensive income (loss) attributable to Verizon	(88)		256		93		(56)
Total Comprehensive Income	$	4,614	$	5,022	$	9,517	$	9,728
Comprehensive income attributable to noncontrolling interests	$	109	$	118	$	229	$	227
Comprehensive income attributable to Verizon	4,505		4,904		9,288		9,501
Total Comprehensive Income	$	4,614	$	5,022	$	9,517	$	9,728

    

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)	2024		2023
Assets
Current assets
Cash and cash equivalents	$	2,432	$	2,065
Accounts receivable	26,702		26,102
Less Allowance for credit losses	1,095		1,017
Accounts receivable, net	25,607		25,085
Inventories	1,841		2,057
Prepaid expenses and other	8,176		7,607
Total current assets	38,056		36,814
Property, plant and equipment	324,978		320,108
Less Accumulated depreciation	217,088		211,798
Property, plant and equipment, net	107,890		108,310
Investments in unconsolidated businesses	908		953
Wireless licenses	156,291		155,667
Goodwill	22,842		22,843
Other intangible assets, net	10,680		11,057
Operating lease right-of-use assets	24,064		24,726
Other assets	18,415		19,885
Total assets	$	379,146	$	380,255
Liabilities and Equity
Current liabilities
Debt maturing within one year	$	23,255	$	12,973
Accounts payable and accrued liabilities	19,727		23,453
Current operating lease liabilities	4,247		4,266
Other current liabilities	13,577		12,531
Total current liabilities	60,806		53,223
Long-term debt	126,022		137,701
Employee benefit obligations	12,812		13,189
Deferred income taxes	46,082		45,781
Non-current operating lease liabilities	19,456		20,002
Other liabilities	16,429		16,560
Total long-term liabilities	220,801		233,233
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 in each period)	429		429
Additional paid in capital	13,539		13,631
Retained earnings	86,504		82,915
Accumulated other comprehensive loss	(1,287)		(1,380)
Common stock in treasury, at cost (81,913,650 and 87,172,997 shares outstanding)	(3,590)		(3,821)
Deferred compensation – employee stock ownership plans (ESOPs) and other	577		656
Noncontrolling interests	1,367		1,369
Total equity	97,539		93,799
Total liabilities and equity	$	379,146	$	380,255

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)	2024		2023
Cash Flows from Operating Activities
Net Income	$	9,424	$	9,784
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization expense	8,928		8,677
Employee retirement benefits	354		108
Deferred income taxes	282		633
Provision for expected credit losses	1,119		1,061
Equity in losses of unconsolidated businesses, inclusive of dividends received	33		49
Changes in current assets and liabilities, net of effects from acquisition/disposition of businesses	(3,572)		(620)
Other, net	1		(1,672)
Net cash provided by operating activities	16,569		18,020
Cash Flows from Investing Activities
Capital expenditures (including capitalized software)	(8,071)		(10,070)
Acquisitions of wireless licenses	(613)		(1,085)
Collateral receipts (payments) related to derivative contracts, net	(424)		824
Other, net	(2)		131
Net cash used in investing activities	(9,110)		(10,200)
Cash Flows from Financing Activities
Proceeds from long-term borrowings	3,122		1,503
Proceeds from asset-backed long-term borrowings	5,828		3,705
Net proceeds from (repayments of) short-term commercial paper	603		(167)
Repayments of long-term borrowings and finance lease obligations	(5,719)		(2,600)
Repayments of asset-backed long-term borrowings	(4,008)		(2,383)
Dividends paid	(5,598)		(5,487)
Other, net	(1,290)		(157)
Net cash used in financing activities	(7,062)		(5,586)
Increase in cash, cash equivalents and restricted cash	397		2,234
Cash, cash equivalents and restricted cash, beginning of period	3,497		4,111
Cash, cash equivalents and restricted cash, end of period (Note 1)	$	3,894	$	6,345

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

Verizon Communications Inc. (the Company) is a holding company that, acting through its subsidiaries (together with the Company, collectively, Verizon), is one of the world’s leading providers of communications, technology, information and entertainment products and services to consumers, businesses and government entities. With a presence around the world, we offer data, video and voice services and solutions on our networks and platforms that are designed to meet customers’ demand for mobility, reliable network connectivity and security.

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 the Company's Annual Report on Form 10-K for the year ended December 31, 2023. 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.

Earnings Per Common Share

There were a total of approximately 5.3 million and 4.5 million outstanding dilutive securities, primarily consisting of performance stock units and restricted stock units, included in the computation of diluted earnings per common share for the three and six months ended June 30, 2024, respectively. There were a total of approximately 5.6 million and 4.6 million outstanding dilutive securities, primarily consisting of performance stock units and restricted stock units, included in the computation of diluted earnings per common share for the three and six months ended June 30, 2023, respectively.

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 receivables and on the underlying receivables related to the participation interest 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.

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)	2024		2023
Cash and cash equivalents	$	2,432	$	2,065	$	367
Restricted cash:
Prepaid expenses and other	1,354		1,244		110
Other assets	108		188		(80)
Cash, cash equivalents and restricted cash	$	3,894	$	3,497	$	397

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 (Enterprise and Public Sector, Business Markets and Other, and Wholesale) within Business. See Note 10 for additional information on revenue by segment, including Corporate and other.

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 recognized when equipment is sold to the customer by an authorized agent under a device payment plan agreement. We have elected the practical expedient within Topic 842, to combine the lease and non-lease components for those customer arrangements under Topic 606 that involve customer premise equipment where we are the lessor. During the three and six months ended June 30, 2024 revenues from arrangements that were not accounted for under Topic 606 were approximately $753 million and $1.5 billion,

8

respectively. During the three and six months ended June 30, 2023, revenues from arrangements that were not accounted for under Topic 606 were approximately $754 million and $1.5 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 were 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, 2024, month-to-month service contracts represented approximately 95% of both our wireless postpaid contracts and our wireline Consumer and our Business Markets and Other contracts, compared to June 30, 2023, for which month-to-month service contracts represented approximately 94% of both our wireless postpaid contracts and our wireline Consumer and our Business Markets and Other 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, with or without promotional credits that require maintenance of service, are generally either month-to-month and cancellable at any time, or considered to contain terms ranging from greater than one month to up to thirty-six months (typically under a device payment plan), or contain terms ranging from greater than one month to up to thirty-six months (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 cancelled 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 services 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 twenty-nine years ending in September 2053 and have aggregate contract minimum payments totaling $2.0 billion.

At June 30, 2024, the transaction price related to unsatisfied performance obligations that are expected to be recognized for the remainder of 2024, 2025 and thereafter was $14.8 billion, $24.5 billion and $17.0 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.

9

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

	At June 30,		At December 31,
(dollars in millions)	2024		2023
Accounts Receivable(1)	$	9,495	$	9,760
Device payment plan agreement receivables(2)	18,370		18,528

(1)Balances do not include receivables related to the following: activity associated with certain vendor agreements, leasing arrangements (such as those for towers and equipment), captive reinsurance arrangements primarily related to wireless device insurance and device payment plan agreement receivables presented separately.

(2)Included in device payment plan agreement receivables presented in Note 6. Receivables derived from the sale of equipment on a device payment plan through an authorized agent are excluded.

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.

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.

Revenues recognized related to contract liabilities existing at January 1, 2024 were $262 million and $4.7 billion for the three and six months ended June 30, 2024, respectively. Revenues recognized related to contract liabilities existing at January 1, 2023 were $258 million and $4.6 billion for the three and six months ended June 30, 2023, respectively.

The balances 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)	2024		2023
Assets
Prepaid expenses and other	$	548	$	546
Other assets	287		268
Total Contract Assets	$	835	$	814
Liabilities
Other current liabilities	$	7,163	$	6,955
Other liabilities	1,881		1,947
Total Contract Liabilities	$	9,044	$	8,902

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 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.

10

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.

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-seven 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)	2024		2023
Assets
Prepaid expenses and other	$	2,811	$	2,756
Other assets	2,598		2,639
Total	$	5,409	$	5,395

For the three and six months ended June 30, 2024, we recognized expense of $829 million and $1.7 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, 2023, we recognized expense of $791 million and $1.6 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 were no impairment charges recognized for the three and six months ended June 30, 2024 or June 30, 2023.

Note 3. Acquisitions and Divestitures

Spectrum License Transactions

In February 2021, the Federal Communications Commission (FCC) concluded Auction 107 for C-Band wireless spectrum. In accordance with the rules applicable to the auction, Verizon is required to make payments 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 $7.5 billion. During the six months ended June 30, 2024 and June 30, 2023, we made payments of $269 million and $114 million, respectively, for obligations related to clearing costs and accelerated clearing incentives. The carrying value of the wireless spectrum won in Auction 107 consists 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, as well as capitalized interest to the extent qualifying activities have occurred.

TracFone Wireless, Inc.

On November 23, 2021 (the Acquisition Date), we completed the acquisition of TracFone Wireless, Inc. (TracFone). Verizon acquired all of TracFone's outstanding stock in exchange for approximately $3.5 billion in cash, net of cash acquired and working capital and other adjustments, 57,596,544 shares of common stock of the Company valued at approximately $3.0 billion, and up to an additional $650 million in future cash contingent consideration related to the achievement of certain performance measures and other commercial arrangements. The fair value of the Verizon common stock was determined on the basis of its closing market price on the Acquisition Date. The estimated fair value of the contingent consideration as of the Acquisition Date was approximately $560 million and represented a Level 3 measurement as defined in ASC 820, Fair Value Measurements and Disclosures. See Note 7 for additional information. The contingent consideration payable was based on the achievement of certain revenue and operational targets, measured over a two-year earn out period. Contingent consideration payments were completed in January of 2024.

During the six months ended June 30, 2024 and June 30, 2023, Verizon made payments of $52 million and $102 million, respectively, related to the contingent consideration, which are reflected in Cash flows from financing activities in our condensed consolidated statements of cash flows.

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

Wireless Licenses

The carrying amounts of our Wireless licenses are as follows:

	At June 30,		At December 31,
(dollars in millions)	2024		2023
Wireless licenses	$	156,291	$	155,667

During the six months ended June 30, 2024 and June 30, 2023, we made payments of $269 million and $114 million, respectively, for obligations related to clearing costs and accelerated clearing incentives for wireless licenses in connection with Auction 107. See Note 3 for additional information.

At June 30, 2024 and 2023, approximately $11.8 billion and $38.4 billion, respectively, of wireless licenses were under development for commercial service for which we were capitalizing interest costs. We recorded approximately $338 million and $905 million of capitalized interest on wireless licenses for the six months ended June 30, 2024 and 2023, respectively.

During the six months ended June 30, 2024, we renewed various wireless licenses in accordance with FCC regulations. The average renewal period for these licenses was 10 years.

Goodwill

Changes in the carrying amount of Goodwill are as follows:

(dollars in millions)	Consumer		Business		Total
Balance at January 1, 2024(1)	$	21,177	$	1,666	$	22,843
Reclassifications, adjustments and other	—		(1)		(1)
Balance at June 30, 2024	$	21,177	$	1,665	$	22,842

(1) Goodwill is net of accumulated impairment charges of $5.8 billion related to our Business reporting unit.

Other Intangible Assets

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

	At June 30, 2024						At December 31, 2023
(dollars in millions)	Gross Amount		Accumulated Amortization		Net Amount		Gross Amount		Accumulated Amortization		Net Amount
Customer lists (5 to 13 years)	$	4,238	$	(2,382)	$	1,856	$	4,335	$	(2,193)	$	2,142
Non-network internal-use software (3 to 7 years)	26,393		(18,776)		7,617		25,524		(17,949)		7,575
Other (4 to 25 years)	2,626		(1,419)		1,207		2,656		(1,316)		1,340
Total	$	33,257	$	(22,577)	$	10,680	$	32,515	$	(21,458)	$	11,057

The amortization expense for Other intangible assets was as follows: 

	Three Months Ended		Six Months Ended
(dollars in millions)	June 30,		June 30,
2024	$	706	$	1,404
2023	653		1,300

The estimated future amortization expense for Other intangible assets for the remainder of the current year and next 5 years is as follows:

Years	(dollars in millions)
Remainder of 2024	$	1,325
2025	2,496
2026	2,278
2027	1,714
2028	1,338
2029	675

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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 the Company and its subsidiaries that occurred during the three and six months ended June 30, 2024.

Tender Offers

(dollars in millions)	Principal Amount Purchased		Cash Consideration(1)
Three Months Ended March 31, 2024
Verizon 0.875% - 3.250% notes due 2025 - 2028	€	1,981	$	2,237
Three Months Ended March 31, 2024 total			2,237
Six Months Ended June 30, 2024 total			$	2,237

(1) The total cash consideration includes the tender offer consideration, plus any accrued and unpaid interest to the date of purchase. In addition, for securities denominated in a currency other than the U.S. dollar, cash consideration is shown on a U.S. dollar equivalent basis and includes the amount payable per the derivatives entered into in connection with the transaction. See Note 7 for additional information on cross currency swap transactions related to the transaction.

Repayments and Repurchases

(dollars in millions)	Principal Repaid/ Repurchased		Amount Paid(1)
Three Months Ended March 31, 2024
Verizon 1.625% notes due 2024	€	685	$	840
Verizon 0.750% notes due 2024	$	999	1,003
Verizon floating rate notes due 2024	95		96
Open market repurchases of various Verizon notes	117		89
Three Months Ended March 31, 2024 total			2,028
Three Months Ended June 30, 2024
Verizon 4.073% notes due 2024	£	413	$	582
Open market repurchases of various Verizon notes	$	306	214
Three Months Ended June 30, 2024 total			796
Six Months Ended June 30, 2024 total			$	2,824

(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 and includes the amount payable per the derivatives entered into in connection with the transaction. See Note 7 for additional information on cross currency swap transactions related to the transaction.

Issuances

(dollars in millions)	Principal Amount Issued		Net Proceeds(1)
Three Months Ended March 31, 2024
Verizon 3.500% notes due 2032	€	1,000	$	1,062
Verizon 3.750% notes due 2036	€	1,000	1,061
Verizon 5.500% notes due 2054(2)	$	1,000	980
Three Months Ended March 31, 2024 total			3,103
Six Months Ended June 30, 2024 total			$	3,103

(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. See Note 7 for additional information on cross currency swap transactions related to the issuances.

(2) An amount equal to the net proceeds from these notes is expected to be used to fund certain renewable energy projects, including new and existing investments made by us during the period from May 1, 2023 through the maturity date of the notes.

Commercial Paper Program

During the six months ended June 30, 2024, we issued $22.4 billion in net proceeds and made $21.8 billion in principal repayments of commercial paper. These transactions are reflected within Cash flows from financing activities in our condensed

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consolidated statements of cash flows on a net basis. As of June 30, 2024, we had $605 million principal amount outstanding for commercial paper.

Asset-Backed Debt

As of June 30, 2024, the carrying value of our asset-backed debt was $24.0 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) or a participation interest in certain other receivables to one of the ABS Entities, which in turn transfers such receivables and participation interest 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 participation interest, and future collections on such receivables and underlying receivables related to such participation interest. These receivables and participation interest 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 participation interest, 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 and on the underlying receivables related to the participation interest 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.

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ABS Notes

During the six months ended June 30, 2024, we completed the following ABS Notes transactions:

(dollars in millions)	Interest Rates %	Expected Weighted-average Life to Maturity (in years)	Principal Amount Issued
January 2024
Series 2024-1
A-1a Senior class notes	5.000	1.92	$	835
A-1b Senior class notes	Compounded SOFR + 0.650(1)	1.92	279
B Junior class notes	5.240	1.92	—
C Junior class notes	5.490	1.92	51
Series 2024-2
A Senior class notes	4.830	4.92	668
B Junior class notes	5.080	4.92	51
C Junior class notes	5.320	4.92	31
January 2024 total			1,915
April 2024
Series 2024-3
A-1a Senior class notes	5.340	2.99	605
A-1b Senior class notes	Compounded SOFR + 0.580(1)	2.99	175
B Junior class notes	5.540	2.99	59
C Junior class notes	5.730	2.99	36
April 2024 total			875
June 2024
Series 2024-4
A-1a Senior class notes	5.210	1.98	289
A-1b Senior class notes	Compounded SOFR + 0.550(1)	1.98	246
B Junior class notes	5.400	1.98	41
C Junior class notes	5.600	1.98	25
Series 2024-5
A Senior class notes	5.000	4.98	512
B Junior class notes	5.250	4.98	39
C Junior class notes	5.490	4.98	24
June 2024 total			1,176
Total			$	3,966

(1) Compounded Secured Overnight Financing Rate (SOFR) is calculated using SOFR as published by the Federal Reserve Bank of New York in accordance with the terms of such notes. Compounded SOFR for the interest payment made in June 2024 was 5.333%.

Under the terms of each series of ABS Notes outstanding as of June 30, 2024, there is a revolving period of up to 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, 2024, we made aggregate principal repayments of $2.2 billion in connection with anticipated redemptions of ABS Notes and notes that have entered the amortization period, including payments in connection with any note redemptions.

ABS Financing Facilities

Under the two loan agreements outstanding in connection with the ABS Financing Facility originally entered into in 2021 and most recently renewed in 2023 (2021 ABS Financing Facility), we prepaid an aggregate of $900 million in January 2024, borrowed an additional $600 million in March 2024, prepaid an aggregate of $900 million in April 2024 and borrowed an additional $225 million in June 2024. The aggregate outstanding balance under the 2021 ABS Financing Facility was $7.5 billion as of June 30, 2024.

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Under the loan agreement outstanding in connection with the ABS Financing Facility originally entered into in 2022 and most recently renewed in 2023 (2022 ABS Financing Facility), we borrowed an additional $1.1 billion in June 2024. The aggregate outstanding balance under the 2022 ABS Financing Facility was $4.0 billion as of June 30, 2024.

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)	2024		2023
Assets
Accounts receivable, net	$	17,199	$	14,550
Prepaid expenses and other	1,402		1,288
Other assets	11,470		11,682
Liabilities
Accounts payable and accrued liabilities	31		29
Debt maturing within one year	16,103		7,483
Long-term debt	7,912		14,700

The Accounts receivable, net amounts above does not include underlying receivables for which a participation interest has been transferred to the ABS Entities. See Note 6 for additional information on certain receivables and participation interest used to secure asset-backed debt.

Long-Term Credit Facilities

				At June 30, 2024
(dollars in millions)	Maturities	Facility Capacity		Unused Capacity		Principal Amount Outstanding
Verizon revolving credit facility(1)	2028	$	12,000	$	11,962	$	—
Various export credit facilities(2)	2024 - 2031	11,000		—		6,029
Total		$	23,000	$	11,962	$	6,029

(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, 2024, there have been no drawings against the revolving credit facility since its inception.

(2) During the six months ended June 30, 2024, there were no drawings from these facilities. During the six months ended June 30, 2023, we drew down $515 million from these facilities. Borrowings under certain of these facilities are repaid 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 March 2024, we amended our $9.5 billion revolving credit facility to increase the capacity to $12.0 billion and extended its maturity to 2028.

Non-Cash Transactions

During the six months ended June 30, 2024 and 2023, we financed, primarily through alternative financing arrangements, the purchase of approximately $941 million and $719 million, respectively, of long-lived assets consisting primarily of network equipment. As of June 30, 2024 and December 31, 2023, $2.4 billion and $2.2 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

During the three months ended June 30, 2024 and 2023, we recorded net debt extinguishment gains of $89 million and $69 million, respectively. During the six months ended June 30, 2024 and 2023, we recorded net debt extinguishment gains of

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$199 million and $139 million, respectively. The net gains are recorded in Other income (expense), net in our condensed consolidated statements of income. The total non-cash debt extinguishment gains are reflected within Other, net cash flow from operating activities, and the cash payments to extinguish the debt 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, 2024, $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.

Note 6. Device Payment Plan Agreement and Wireless Service Receivables

The following table presents information about accounts receivable, net of allowances, recorded in our condensed consolidated balance sheet:

	At June 30, 2024
(dollars in millions)	Device payment plan agreement		Wireless service		Other receivables(1)		Total
Accounts receivable	$	14,773	$	5,935	$	5,994	$	26,702
Less Allowance for credit losses	624		229		242		1,095
Accounts receivable, net of allowance	$	14,149	$	5,706	$	5,752	$	25,607

(1) Other receivables primarily include wireline and other receivables, of which the allowances are individually insignificant.

Included in Other assets and Accounts receivable, net at June 30, 2024, are net device payment plan agreement receivables, net wireless service receivables and net other receivables of $28.6 billion, which have been transferred to ABS Entities and continue to be reported in our condensed consolidated balance sheet. Included in Other assets and Accounts receivable, net at December 31, 2023, are net device payment plan agreement receivables and net wireless service receivables of $26.1 billion, which have been transferred to ABS Entities and continue to be reported in our condensed consolidated balance sheet. Included in Accounts receivable, net at June 30, 2024 and December 31, 2023, are net other receivables of $749 million and $911 million, respectively, on which a participation interest has been transferred to ABS Entities and continue to be reported in our condensed consolidated balance sheets. See Note 5 for additional information. We believe the carrying value of these receivables approximate their fair value using a Level 3 expected cash flow model.

Under the Verizon device payment program, our eligible wireless customers purchase wireless devices under a device payment plan agreement. Customers that activate service on devices purchased under the device payment program pay lower service fees as compared to those under our fixed-term service plans, and their device payment plan charge is included on their wireless monthly bill. While we no longer offer Consumer customers fixed-term subsidized service plans for devices, we continue to offer subsidized plans to our Business customers. We also continue to service existing plans for customers who have not yet purchased and activated devices under the Verizon device payment program.

Wireless Device Payment Plan Agreement Receivables

The following table displays both the current and non-current portions of device payment plan agreement receivables, net, recognized in our condensed consolidated balance sheets:

	At June 30,		At December 31,
(dollars in millions)	2024		2023
Device payment plan agreement receivables, gross	$	29,137	$	29,206
Unamortized imputed interest	(843)		(758)
Device payment plan agreement receivables, at amortized cost	28,294		28,448
Allowance(1)	(1,210)		(1,151)
Device payment plan agreement receivables, net	$	27,084	$	27,297
Classified in our condensed consolidated balance sheets:
Accounts receivable, net	$	14,149	$	13,173
Other assets	12,935		14,124
Device payment plan agreement receivables, net	$	27,084	$	27,297

(1) Includes allowance for both short-term and long-term device payment plan agreement receivables.

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For indirect channel wireless contracts with customers, we impute risk adjusted interest on the device payment plan agreement receivables. We record the imputed interest as a reduction to the related accounts receivable. The associated interest income, which is included within Service revenues and other in our condensed consolidated statements of income, is recognized over the financed device payment term.

Promotions

In connection with certain device payment plan agreements, we may offer a promotion to allow our customers to upgrade to a new device after paying down a certain specified portion of the required device payment plan agreement amount as well as trading in their device in good working order. When a customer enters into a device payment plan agreement with the right to upgrade to a new device, we account for this trade-in right as a guarantee obligation.

We may offer certain promotions that allow a customer to trade in their owned device in connection with the purchase of a new device. Under these types of promotions, the customer receives a credit for the value of the trade-in device. At June 30, 2024 and December 31, 2023, the amount of trade-in liability was $421 million and $566 million, respectively.

In addition, we may provide the customer with additional future billing credits that will be applied against the customer’s monthly bill as long as service is maintained. These future billing credits are accounted for as consideration payable to a customer and are included in the determination of total transaction price, resulting in a contract liability.

Device payment plan agreement receivables, net, disclosed in the table above, does not reflect the trade-in liability, additional future credits or the guarantee liability.

Origination of Device Payment Plan Agreements

When originating device payment plan agreements, we use internal and external data sources to create a credit risk score to measure the credit quality of a customer and to determine eligibility for the device payment program. Verizon’s experience has been that the payment attributes of longer tenured customers are highly predictive for estimating their reliability to make future payments. Customers with longer tenures tend to exhibit similar risk characteristics to other customers with longer tenures, and receivables due from customers with longer tenures tend to perform better than receivables from customers that have not previously been Verizon customers. As a result of this experience, we make initial lending decisions based upon whether the customers are "established customers" or "short-tenured customers." If a Consumer customer has been a customer for 45 days or more, or if a Business customer has been a customer for 12 months or more, the customer is considered an "established customer." For established customers, the credit decision and ongoing credit monitoring processes rely on a combination of internal and external data sources. If a Consumer customer has been a customer less than 45 days, or a Business customer has been a customer for less than 12 months, the customer is considered a "short-tenured customer." For short-tenured customers, the credit decision and credit monitoring processes rely more heavily on external data sources.

Available external credit data from credit reporting agencies along with internal data are used to create custom credit risk scores for Consumer customers. The custom credit risk score is generated automatically from the applicant’s credit data using proprietary custom credit models. The credit risk score measures the likelihood that the potential customer will become severely delinquent and be disconnected for non-payment. For a small portion of short-tenured customer applications, a traditional credit report is not available from one of the national credit reporting agencies because the potential customer does not have sufficient credit history. In those instances, alternative credit data is used for the risk assessment. For Business customers, we also verify the existence of the business with external data sources.

Based on the custom credit risk score, we assign each customer a credit class, each of which has specified offers of credit. This includes an account level spending limit and a maximum amount of credit allowed per device for Consumer customers or a required down payment percentage for Business customers.

Credit Quality Information

Subsequent to origination, we assess indicators for the quality of our wireless device payment plan agreement portfolio using two models, one for new customers and one for existing customers. The model for new customers pools all Consumer and Business wireless customers based on less than 210 days as "new customers." The model for existing customers pools all Consumer and Business wireless customers based on 210 days or more as "existing customers."

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The following table presents device payment plan agreement receivables, at amortized cost, and gross write-offs recorded, as of and for the six months ended June 30, 2024, by credit quality indicator and year of origination:

	Year of Origination(1)
(dollars in millions)	2024		2023		2022 and prior		Total
Device payment plan agreement receivables, at amortized cost
New customers	$	1,635	$	2,289	$	824	$	4,748
Existing customers	6,558		11,144		5,844		23,546
Total	$	8,193	$	13,433	$	6,668	$	28,294
Gross write-offs
New customers	$	58	$	375	$	73	$	506
Existing customers	2		98		97		197
Total	$	60	$	473	$	170	$	703

(1) Includes accounts that have been suspended at a point in time.

The data presented in the table above was last updated on June 30, 2024.

We assess indicators for the quality of our wireless service receivables portfolio as one overall pool. The following table presents wireless service receivables, at amortized cost, and gross write-offs recorded, as of and for the six months ended June 30, 2024, by year of origination:

	Year of Origination
(dollars in millions)	2024		2023 and prior		Total
Wireless service receivables, at amortized cost	$	5,833	$	102	$	5,935
Gross write-offs	89		179		268

The data presented in the table above was last updated on June 30, 2024.

Allowance for Credit Losses

The credit quality indicators are used in determining the estimated amount and the timing of expected credit losses for the device payment plan agreement and wireless service receivables portfolios.

For device payment plan agreement receivables, we record bad debt expense based on a default and loss calculation using our proprietary loss model. The expected loss rate is determined based on customer credit scores and other qualitative factors as noted above. The loss rate is assigned individually on a customer by customer basis and the custom credit scores are then aggregated by vintage and used in our proprietary loss model to calculate the weighted-average loss rate used for determining the allowance balance.

We monitor the collectability of our wireless service receivables as one overall pool. Wireline service receivables are disaggregated and pooled by the following types of customers and related contracts: consumer, small and medium business, enterprise, public sector and wholesale. For wireless service receivables and wireline consumer and small and medium business receivables, the allowance is calculated based on a 12 month rolling average write-off balance multiplied by the average life-cycle of an account from billing to write-off. The risk of loss is assessed over the contractual life of the receivables and is adjusted based on the historical loss amounts for current and future conditions based on management’s qualitative considerations. For enterprise, public sector and wholesale wireline receivables, the allowance for credit losses is based on historical write-off experience and individual customer credit risk, if applicable.

Activity in the allowance for credit losses by portfolio segment of receivables was as follows:

(dollars in millions)	Device Payment Plan Agreement Receivables(1)		Wireless Service Plan Receivables
Balance at January 1, 2024	$	1,151	$	213
Current period provision for expected credit losses	742		261
Write-offs charged against the allowance	(703)		(268)
Recoveries collected	20		23
Balance at June 30, 2024	$	1,210	$	229

(1) Includes allowance for both short-term and long-term device payment plan agreement receivables.

We monitor delinquency and write-off experience based on the quality of our device payment plan agreement and wireless service receivables portfolios. The extent of our collection efforts with respect to a particular customer are based on the results of our proprietary custom internal scoring models that analyze the customer’s past performance to predict the likelihood of the customer falling further delinquent. These custom scoring models assess a number of variables, including origination

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characteristics, customer account history and payment patterns. Since our customers’ behaviors may be impacted by general economic conditions, we analyzed whether changes in macroeconomic conditions impact our credit loss experience and have concluded that our credit loss estimates are generally not materially impacted by reasonable and supportable forecasts of future economic conditions. Based on the score derived from these models, accounts are grouped by risk category to determine the collection strategy to be applied to such accounts. For device payment plan agreement receivables and wireless service receivables, we consider an account to be delinquent and in default status if there are unpaid charges remaining on the account on the day after the bill’s due date. The risk class determines the speed and severity of the collections effort including initiatives taken to facilitate customer payment.

The balance and aging of the device payment plan agreement receivables, at amortized cost, were as follows:

	At June 30,
(dollars in millions)	2024
Unbilled	$	26,941
Billed:
Current	1,080
Past due	273
Device payment plan agreement receivables, at amortized cost	$	28,294

Note 7. Fair Value Measurements and Financial Instruments

Recurring Fair Value Measurements

The following table presents the balances of assets and liabilities measured at fair value on a recurring basis as of June 30, 2024:

(dollars in millions)	Level 1(1)		Level 2(2)		Level 3(3)		Total
Assets:
Prepaid expenses and other:
Fixed income securities	$	—	$	15	$	—	$	15
Cross currency swaps	—		2		—		2
Interest rate caps	—		40		—		40
Other assets:
Fixed income securities	—		271		—		271
Cross currency swaps	—		518		—		518
Total	$	—	$	846	$	—	$	846
Liabilities:
Other current liabilities:
Interest rate swaps	$	—	$	1,606	$	—	$	1,606
Cross currency swaps	—		321		—		321
Foreign exchange forwards	—		2		—		2
Interest rate caps	—		40		—		40
Other liabilities:
Interest rate swaps	—		3,704		—		3,704
Cross currency swaps	—		1,948		—		1,948
Total	$	—	$	7,621	$	—	$	7,621

(1)Quoted prices in active markets for identical assets or liabilities.

(2)Observable inputs other than quoted prices in active markets for identical assets and liabilities.

(3)Unobservable pricing inputs in the market.

20

The following table presents the balances of assets and liabilities measured at fair value on a recurring basis as of December 31, 2023:

(dollars in millions)	Level 1(1)		Level 2(2)		Level 3(3)		Total
Assets:
Prepaid expenses and other:
Fixed income securities	$	—	$	25	$	—	$	25
Cross currency swaps	—		4		—		4
Foreign exch