Verizon Wireless 2013 Annual Report Download - page 30

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We also guarantee the debt obligations of GTE Corporation that were
issued and outstanding prior to July 1, 2003. As of December 31, 2013,
$1.7 billion principal amount of these obligations remained outstanding
(see Note 8 to the consolidated nancial statements).
As of December 31, 2013 letters of credit totaling approximately $0.1 bil-
lion, which were executed in the normal course of business and support
several nancing arrangements and payment obligations to third parties,
were outstanding (see Note 16 to the consolidated nancial statements).
Guarantees
In connection with the execution of agreements for the sale of busi-
nesses and investments, Verizon ordinarily provides representations and
warranties to the purchasers pertaining to a variety of nonnancial mat-
ters, such as ownership of the securities being sold, as well as nancial
losses (see Note 16 to the consolidated nancial statements).
We guarantee the debentures and rst mortgage bonds of our oper-
ating telephone company subsidiaries. As of December 31, 2013, $3.1
billion principal amount of these obligations remain outstanding. Each
guarantee will remain in place for the life of the obligation unless termi-
nated pursuant to its terms, which will occur, among other things, if the
operating telephone company is no longer a wholly-owned subsidiary
of Verizon.
MANAGEMENT’S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS continued
Contributions to our other postretirement benet plans generally relate
to payments for benets on an as-incurred basis since the other post-
retirement benet plans do not have funding requirements similar to
the pension plans. We contributed $1.4 billion, $1.5 billion and $1.4 bil-
lion to our other postretirement benet plans in 2013, 2012 and 2011,
respectively. Contributions to our other postretirement benet plans are
estimated to be approximately $1.4 billion in 2014.
Leasing Arrangements
We are the lessor in leveraged and direct nancing lease agreements for
commercial aircraft and power generating facilities, which comprise the
majority of our leasing portfolio along with telecommunications equip-
ment, commercial real estate property and other equipment. These
leases have remaining terms of up to 37 years as of December 31, 2013.
In addition, we lease space on certain of our cell towers to other wireless
carriers.Minimumleasepaymentsreceivablerepresentunpaidrentals,
less principal and interest on third-party nonrecourse debt relating to lev-
eraged lease transactions. Since we have no general liability for this debt,
which is secured by a senior security interest in the leased equipment
and rentals, the related principal and interest have been oset against
the minimum lease payments receivable in accordance with U.S. GAAP.
All recourse debt is reected in our consolidated balance sheets.
O Balance Sheet Arrangements and Contractual Obligations
Contractual Obligations and Commercial Commitments
The following table provides a summary of our contractual obligations and commercial commitments at December 31, 2013. Additional detail about
these items is included in the notes to the consolidated nancial statements.
(dollars in millions)
Payments Due By Period
Contractual Obligations Total
Less than
1 year 1–3 years 3–5 years
Morethan
5 years
Long-term debt(1) $ 92,851 $ 3,395 $ 13,466 $ 16,252 $ 59,738
Capital lease obligations(2) 293 91 92 49 61
Total long-term debt, including current maturities 93,144 3,486 13,558 16,301 59,799
Interest on long-term debt(1) 74,938 4,816 9,419 8,609 52,094
Operating leases(2) 12,190 2,255 3,723 2,464 3,748
Purchase obligations(3) 33,440 19,724 8,778 4,163 775
Other long-term liabilities(4) 4,404 2,825 1,579 - -
Total contractual obligations $ 218,116 $ 33,106 $ 37,057 $ 31,537 $ 116,416
(1) Items included in long-term debt with variable coupon rates are described in Note 8 to the consolidated financial statements.
(2) See Note 7 to the consolidated financial statements.
(3) The purchase obligations reflected above are primarily commitments to purchase handsets and peripherals, equipment, software, programming and network services, and marketing activities,
which will be used or sold in the ordinary course of business. These amounts do not represent our entire anticipated purchases in the future, but represent only those items that are the subject
ofcontractualobligations.Wealsopurchaseproductsandservicesasneededwithnofirmcommitment.Forthisreason,theamountspresentedinthistablealonedonotprovideareliable
indicator of our expected future cash outflows or changes in our expected cash position (see Note 16 to the consolidated financial statements).
(4) Other long-term liabilities include estimated postretirement benefit and qualified pension plan contributions (see Note 11 to the consolidated financial statements).
We are not able to make a reliable estimate of when the unrecognized tax benefits balance of $2.1 billion and related interest and penalties will be settled with the respective taxing authorities
until issues or examinations are further developed (see Note 12 to the consolidated financial statements).