Verizon Wireless 2010 Annual Report Download - page 32

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Verizon Wireless
2010
On June 28, 2010, Verizon Wireless exercised its right to redeem the out-
standing $1.0 billion of aggregate floating rate notes due June 2011 at
a redemption price of 100% of the principal amount of the notes, plus
accrued and unpaid interest through the date of redemption. In addition,
during 2010 Verizon Wireless repaid the remaining $4.0 billion of borrow-
ings that were outstanding under a $4.4 billion Three-Year Term Loan
Facility Agreement with a maturity date of September 2011 (Three-Year
Term Loan Facility). No borrowings remain outstanding under this facility
as of December 31, 2010 and this facility has been cancelled.
2009
During 2009, Verizon Wireless raised capital to fund the acquisition
of Alltel.
• On January 9, 2009,VerizonWireless borrowed $12.4 billion under a
$17.0 billion credit facility (Bridge Facility) in order to complete the
acquisition of Alltel and repay a portion of the approximately $24 bil-
lion of Alltel debt assumed. Verizon Wireless used cash generated from
operations and the net proceeds from the sale of the notes in private
placements issued in February 2009, May 2009 and June 2009, which
are described below to repay the borrowings under the Bridge Facility.
The Bridge Facility and the commitments under the Bridge Facility
have been terminated.
• InFebruary2009,VerizonWirelessandVerizonWirelessCapitalLLCco-
issued $4.3 billion aggregate principal amount of three and five-year
fixed rate notes in a private placement resulting in cash proceeds of
$4.2 billion, net of discounts and issuance costs.
• In May 2009, Verizon Wireless and Verizon Wireless Capital LLC co-
issued $4.0 billion aggregate principal amount of two-year fixed and
floating rate notes in a private placement resulting in cash proceeds of
approximately $4.0 billion, net of discounts and issuance costs.
• In June2009,VerizonWirelessissued $1.0billionaggregateprincipal
amount of floating rate notes due 2011. As described above, during
2010 these notes were repaid.
• InAugust2009,VerizonWirelessrepaid$0.4billionofborrowingsthat
were outstanding under the Three-Year Term Loan Facility, reducing
the outstanding borrowings under this facility to $4.0 billion as of
December 31, 2009. As described above, during 2010 this facility was
repaid in full.
During November 2009, Verizon Wireless and Verizon Wireless Capital
LLC, completed an exchange offer to exchange the privately placed
notes issued in November 2008, and February and May 2009, for new
notes with similar terms.
2008
In December 2008, Verizon Wireless and Verizon Wireless Capital LLC co-
issued €0.7 billion of 7.625% notes due 2011, €0.5 billion of 8.750% notes
due 2015 and £0.6 billion of 8.875% notes due 2018 resulting in net cash
proceeds of $2.4 billion. In November 2008, Verizon Wireless and Verizon
Wireless Capital LLC co-issued $3.5 billion aggregate principal amount of
five-year and ten-year fixed rate notes in a private placement resulting in
cash proceeds of $3.5 billion, net of discounts and issuance costs. These
proceeds were used in connection with the acquisition of Alltel and the
repayment of the Alltel debt that was assumed.
On September 30, 2008, Verizon Wireless and Verizon Wireless Capital LLC
entered into the $4.4 billion Three-Year Term Loan Facility. On June 5, 2008,
Verizon Wireless entered into a $7.6 billion 364-Day Credit Agreement
which included a $4.8 billion term facility and a $2.8 billion delayed draw
facility. On June 10, 2008, Verizon Wireless borrowed $4.8 billion under
Cash Flows From Financing Activities
During 2010 and 2009, net cash used in financing activities was $13.7
billion and $16.0 billion, respectively. During 2008, net cash provided by
financing activities was $12.7 billion.
2010
During July 2010, Verizon received approximately $3.1 billion in cash in
connection with the completion of the spin-off and merger of Spinco
(see“AcquisitionsandDivestitures”).Thisspecialcashpaymentwassub-
sequently used to redeem $2.0 billion of 7.25% Verizon Communications
Notes due December 2010 at a redemption price of 102.7% of the prin-
cipal amount of the notes, plus accrued and unpaid interest through the
date of redemption, as well as other short-term borrowings. During 2010,
$0.3 billion of 6.125% and $0.2 billion of 8.625% Verizon New York Inc.
Debentures, $0.2 billion of 6.375% Verizon North Inc. Debentures and
$0.2 billion of 6.3% Verizon Northwest Inc. Debentures matured and were
repaid. In addition, during 2010, Verizon repaid $0.2 billion of floating rate
vendor financing debt.
During 2011, $0.5 billion of 5.35% Verizon Communications notes
matured and were repaid and Verizon utilized $0.3 billion of a fixed rate
vendor financing facility.
2009
During 2009, Verizon issued $1.8 billion of 6.35% Notes due 2019 and
$1.0 billion of 7.35% Notes due 2039, resulting in cash proceeds of $2.7
billion, net of discounts and issuance costs, which was used to reduce
our commercial paper borrowings, repay maturing debt and for gen-
eral corporate purposes. In January 2009, Verizon utilized a $0.2 billion
floating rate vendor financing facility. During 2009, we redeemed $0.1
billion of 6.8% Verizon New Jersey Inc. Debentures, $0.3 billion of 6.7%
and $0.2 billion of 5.5% Verizon California Inc. Debentures and $0.2 bil-
lion of 5.875% Verizon New England Inc. Debentures. In April 2009, we
redeemed $0.5 billion of 7.51% GTE Corporation Debentures. In addition,
during 2009, $0.5 billion of floating rate Notes due 2009 and $0.1 billion
of 8.23% Verizon Notes matured and were repaid.
2008
During 2008, we made debt repayments of approximately $2.6 bil-
lion which primarily included $0.2 billion of 5.55% Verizon Northwest
Debentures, $0.3 billion of 6.9% and $0.3 billion of 5.65% Verizon North
Inc. Debentures, $0.1 billion of 7.0% Verizon California Inc. Debentures,
$0.3 billion of 6.0% Verizon New York Inc. Debentures, $0.3 billion of
6.46% GTE Corporation Debentures, $0.1 billion of 6.0% Verizon South
Inc. Debentures, and $1.0 billion of 4.0% Verizon Communications Inc.
Notes. As a result of the spin-off of our local exchange business and
related activities in Maine, New Hampshire and Vermont, in March 2008,
our net debt was reduced by approximately $1.4 billion.
In November 2008, Verizon issued $2.0 billion of 8.75% Notes due 2018
and $1.3 billion of 8.95% Notes due 2039, which resulted in cash pro-
ceeds of $3.2 billion net of discount and issuance costs. In April 2008,
Verizon issued $1.3 billion of 5.25% Notes due 2013, $1.5 billion of 6.10%
Notes due 2018, and $1.3 billion of 6.90% Notes due 2038, resulting in
cash proceeds of $4.0 billion, net of discounts and issuance costs. In
February 2008, Verizon issued $0.8 billion of 4.35% Notes due 2013, $1.5
billion of 5.50% Notes due 2018, and $1.8 billion of 6.40% Notes due 2038,
resulting in cash proceeds of $4.0 billion, net of discounts and issuance
costs. In January 2008, Verizon utilized a $0.2 billion fixed rate vendor
financing facility.
Management’sDiscussionandAnalysis
ofFinancialConditionandResultsofOperations – As Adjusted continued