Verizon Wireless 2011 Annual Report Download - page 68

During November 2011, we issued $4.6 billion aggregate principal
amount of fixed notes resulting in cash proceeds of approximately $4.55
billion, net of discounts and issuance costs. The issuances consisted of
the following: $0.8 billion of 1.25% Notes due 2014, $1.3 billion of 2.00%
Notes due 2016, $1.9 billion of 3.50% Notes due 2021 and $0.8 billion of
4.75% Notes due 2041. During November 2011, the net proceeds were
used to redeem $1.0 billion of 7.375% Verizon Communications Notes
due September 2012 at a redemption price of 105.2% of principal amount
of the notes, $0.6 billion of 6.875% Verizon Communications Notes due
June 2012 at a redemption price of 103.5% of principal amount of the
notes and certain telephone subsidiary debt (see “Telephone and Other
Subsidiary Debt” below), as well as for the repayment of commercial
paper and other general corporate purposes. Any accrued and unpaid
interest was paid through the date of redemption. In addition, we ter-
minated the interest rate swap with a notional value totaling $1.0 billion
related to the $1.0 billion of 7.375% Verizon Communications Notes due
September 2012.
During 2011, $0.5 billion of 5.35% Verizon Communications Notes
matured and were repaid and we utilized $0.3 billion under fixed rate
vendor financing facilities.
The debt obligations of Terremark that were outstanding at the time of
its acquisition by Verizon were repaid during the second quarter of 2011.
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 2). 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.
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.
2011
During May 2011, $4.0 billion aggregate principal amount of Verizon
Wireless two-year fixed and floating rate notes matured and were repaid.
During December 2011, we repaid $0.9 billion upon maturity for the €0.7
billion of 7.625% Verizon Wireless Notes and the related cross currency
swap was settled (see Note 9).
During February 2012, $0.8 billion of 5.25% Verizon Wireless Notes
matured and were repaid.
2010
In 2010, Verizon Wireless exercised its right to redeem the outstanding
$1.0 billion of aggregate floating rate notes due June 2011 at a redemp-
tion 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 borrowings 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). As
there were no borrowings outstanding under this facility, it was cancelled.
Telephone and Other Subsidiary Debt
2011
During April 2011, we redeemed the $1.0 billion of 5.65% Verizon
Pennsylvania Inc. Debentures due November 15, 2011 at a redemption
price of 102.9% of the principal amount of the debentures; and the $1.0
billion of 6.50% Verizon New England Inc. Debentures due September
15, 2011 at a redemption price of 102.3% of the principal amount of the
debentures. Any accrued and unpaid interest was paid through the date
of redemption.
During November 2011, we redeemed the following debentures: $0.4
billion of 6.125% Verizon Florida Inc. Debentures due January 2013 at a
redemption price of 106.3% of the principal amount of the debentures;
$0.5 billion of 6.125% Verizon Maryland Inc. Debentures due March 2012
at a redemption price of 101.5% of the principal amount of the deben-
tures; and $1.0 billion of 6.875% Verizon New York Inc. Debentures due
April 2012 at a redemption price of 102.2% of the principal amount of
the debentures. Any accrued and unpaid interest was paid through the
date of redemption.
During January 2012, $1.0 billion of 5.875% Verizon New Jersey Inc.
Debentures matured and were repaid.
2010
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.
Debt Redemption Costs
During November 2011, we recorded debt redemption costs of $0.1 bil-
lion in connection with the early redemption of $1.0 billion of 7.375%
Verizon Communications Notes due September 2012, $0.6 billion of
6.875% Verizon Communications Notes due June 2012, $0.4 billion of
6.125% Verizon Florida Inc. Debentures due January 2013, $0.5 billion of
6.125% Verizon Maryland Inc. Debentures due March 2012 and $1.0 bil-
lion of 6.875% Verizon New York Inc. Debentures due April 2012.
Guarantees
On June 24, 2011, we guaranteed the debentures and first mortgage
bonds of our operating telephone company subsidiaries. As of December
31, 2011, $6.4 billion principal amount of these obligations remain out-
standing. Each guarantee will remain in place for the life of the obligation
unless terminated pursuant to its terms, including the operating tele-
phone company no longer being a wholly-owned subsidiary of Verizon.
We also guarantee the debt obligations of GTE Corporation that were
issued and outstanding prior to July 1, 2003. As of December 31, 2011,
$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, 2011 are as
follows:
Years (dollars in millions)
2012 $ 2,915
2013 5,637
2014 6,800
2015 1,186
2016 4,141
Thereafter 32,539
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nOtEs tO cOnsOlidatEd Financial statEMEnts continued