America Online 2015 Annual Report Download - page 30

These uses of cash were partially offset by proceeds from long-term
borrowings of $6.7billion, which included $6.5billion of borrowings
under a term loan agreement which was used for general corporate
purposes, including the acquisition of spectrum licenses, as well
as $2.7billion of cash proceeds received related to the Tower
Monetization Transaction attributable to the portion of the towers that
we continue to occupy and use for network operations.
Proceeds from and Repayments of Long-Term Borrowings
At December31, 2015, our total debt decreased to $110.2billion as
compared to $113.3billion at December31, 2014. The substantial
majority of our total debt portfolio consists of fixed rate indebtedness,
therefore, changes in interest rates do not have a material effect on our
interest payments. See Note7 to the consolidated financial statements
for additional details regarding our debt activity.
At December31, 2015, approximately $8.2billion or 7.5% of the
aggregate principal amount of our total debt portfolio consisted
of foreign denominated debt, primarily the Euro and British Pound
Sterling. We have entered into cross currency swaps in order to fix our
future interest and principal payments in U.S. dollars and mitigate the
impact of foreign currency transaction gains or losses. See “Market
Risk” for additional information.
Verizon may continue to acquire debt securities issued by Verizon and
its affiliates in the future through open market purchases, privately
negotiated transactions, tender offers, exchange offers, or otherwise,
upon such terms and at such prices as Verizon may from time to time
determine for cash or other consideration.
Other, net
Other, net financing activities during 2015, include $2.7billion of cash
proceeds received related to the Tower Monetization Transaction,
which relates to the portion of the towers that we continue to occupy
and use for network operations, partially offset by the settlement of
derivatives upon maturity for $0.4billion.
Dividends
The Verizon Board of Directors assesses the level of our dividend
payments on a periodic basis taking into account such factors as
long-term growth opportunities, internal cash requirements and the
expectations of our shareholders. During the third quarter of 2015, the
Board increased our quarterly dividend payment 2.7% to $.565 per
share from $.550 per share in the prior period. This is the ninth consec-
utive year that Verizon’s Board of Directors has approved a quarterly
dividend increase.
As in prior periods, dividend payments were a significant use of capital
resources. During 2015, we paid $8.5billion in dividends.
2014
During 2014, our net cash used in financing activities of $57.7billion
was primarily driven by:
• $58.9billion used to partially fund the Wireless Transaction (see
Note2 to the consolidated financial statements);
• $17.7billion used for repayments of long-term borrowings and
capital lease obligations; and
• $7.8billion used for dividend payments.
These uses of cash were partially offset by proceeds from long-term
borrowings of $31.0billion.
Proceeds from and Repayments of Long-Term Borrowings
At December31, 2014, our total debt increased to $113.3billion as
compared to $93.6billion at December31, 2013 primarily as a result
of additional debt issued to finance the Wireless Transaction. Since
the substantial majority of our total debt portfolio consists of fixed rate
indebtedness, changes in interest rates do not have a material effect
on our interest payments. Throughout 2014, we accessed the capital
markets to optimize the maturity schedule of our debt portfolio and
take advantage of lower interest rates, thereby reducing our effective
interest rate to 4.9% from 5.2% in 2013. See Note7 to the consolidated
financial statements for additional details regarding our debt activity.
At December31, 2014, approximately $9.6billion or 8.5% of the
aggregate principal amount of our total debt portfolio consisted
of foreign denominated debt, primarily the Euro and British Pound
Sterling. We have entered into cross currency swaps in order to fix our
future interest and principal payments in U.S. dollars and mitigate the
impact of foreign currency transaction gains or losses. See “Market
Risk” for additional information.
See “Other Items” for additional information related to the early debt
redemption costs incurred in 2014.
Dividends
During the third quarter of 2014, the Board increased our quarterly
dividend payment 3.8% to $.550 per share from $.530 per share in
the same period of 2013. As in prior periods, dividend payments were
a significant use of capital resources. During 2014, we paid $7.8billion
in dividends compared to $5.9billion in 2013. The increase is primarily
due to the issuance of approximately 1.27billion additional shares of
common stock as a result of the Wireless Transaction.
2013
During 2013, our net cash provided by financing activities of
$26.5billion was primarily driven by proceeds from long-term borrow-
ings of $49.2billion to fund the Wireless Transaction. This source of
cash was partially offset by:
• $8.2billion used for repayments of long-term borrowings and capital
lease obligations;
• $5.9billion used for dividend payments; and
• $3.2billion used for a special distribution to a noncontrolling interest.
Proceeds from and Repayments of Long-Term Borrowings
At December31, 2013, our total debt increased to $93.6billion as
compared to $52.0billion at December31, 2012 primarily as a result
of additional debt issued to finance the Wireless Transaction. Since
the substantial majority of our total debt portfolio consists of fixed rate
indebtedness, changes in interest rates do not have a material effect
on our interest payments. See Note7 to the consolidated financial
statements for additional details regarding our debt activity.
Dividends
During the third quarter of 2013, the Board increased our quarterly
dividend payment 2.9% to $.530 per share from $.515 per share in the
same period of 2012. As in prior periods, dividend payments were a
significant use of capital resources.
Special Distributions
In May 2013, the Board of Representatives of Verizon Wireless
declared a distribution to its owners, which was paid in the second
quarter of 2013 in proportion to their partnership interests on the
payment date, in the aggregate amount of $7.0billion. As a result,
Vodafone received a cash payment of $3.15billion and the remainder
of the distribution was received by Verizon.
28 Verizon Communications Inc. and Subsidiaries
Management’s Discussion and Analysis ofFinancialCondition and Results of Operations continued