Verizon Wireless 2010 Annual Report Download - page 60

Notes Payable and Other
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 Note 3). This special cash payment was subsequently used to redeem
$2.0 billion of 7.25% Verizon Communications Notes due December 2010
at a redemption price of 102.7% of the principal amount of the notes,
plus accrued and unpaid interest through the date of redemption, as well
as other short-term borrowings. 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. 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.
Verizon Wireless – Notes Payable and Other
Verizon Wireless Capital LLC, a wholly owned subsidiary of Verizon
Wireless, is a limited liability company formed under the laws of Delaware
on December 7, 2001 as a special purpose finance subsidiary to facilitate
the offering of debt securities of Verizon Wireless by acting as co-issuer.
Other than the financing activities as a co-issuer of Verizon Wireless
indebtedness, Verizon Wireless Capital LLC has no material assets, opera-
tions or revenues. Verizon Wireless is jointly and severally liable with
Verizon Wireless Capital LLC for co-issued notes, as indicated below.
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 bor-
rowings 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 November 2009, Verizon Wireless and Verizon Wireless Capital LLC
completed an exchange offer to exchange privately placed notes issued
in November 2008, and February and May 2009 for new notes with sim-
ilar terms.
In June 2009, Verizon Wireless issued $1.0 billion aggregate principal
amount of floating rate notes due 2011.
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 approxi-
mately $4.0 billion, net of discounts and issuance costs. 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 dis-
counts and issuance costs.
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.
Telephone and Other Subsidiary Debt
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. During 2009, we redeemed $0.1 billion of 6.8% Verizon New
Jersey Inc. Debentures, $0.3 billion of 6.7% Debentures and $0.2 billion of
5.5% Verizon California Inc. Debentures and $0.2 billion of 5.875% Verizon
New England Inc. Debentures. In April 2009, we redeemed $0.5 billion of
7.51% GTE Corporation Debentures.
Guarantees
We guarantee the debt obligations of GTE Corporation (but not the debt
of its subsidiary or affiliate companies) that were issued and outstanding
prior to July 1, 2003. As of December 31, 2010, $1.7 billion principal
amount of these obligations remain outstanding.
Debt Covenants
We and our consolidated subsidiaries are in compliance with all debt
covenants.
Maturities of Long-Term Debt
Maturities of long-term debt outstanding at December 31, 2010 are as
follows:
Years (dollars in millions)
2011 $ 7,542
2012 5,902
2013 5,915
2014 3,529
2015 1,201
Thereafter 28,705
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Notes to Consolidated Financial Statements continued