Verizon Wireless 2014 Annual Report Download - page 59

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS continued
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of Cellco Partnership and Verizon Wireless Capital LLC 8.50% Notes due
2018, $0.2 billion of the then outstanding $0.3 billion aggregate principal
amount of Alltel Corporation 7.00% Debentures due 2016 and $0.3 billion
of the then outstanding $0.6 billion aggregate principal amount of GTE
Corporation 6.84% Debentures due 2018.
During the fourth quarter of 2014, we recorded net debt redemption
costs of $0.5 billion in connection with the early redemption of $0.5 bil-
lion aggregate principal amount of Verizon 4.90% Notes due 2015, $0.6
billion aggregate principal amount of Verizon 5.55% Notes due 2016, $1.3
billion aggregate principal amount of Verizon 3.00% Notes due 2016, $0.4
billion aggregate principal amount of Verizon 5.50% Notes due 2017, $0.7
billion aggregate principal amount of Verizon 8.75% Notes due 2018, $1.0
billion of the then outstanding $3.2 billion aggregate principal amount of
Verizon 2.50% Notes due 2016, $0.1 billion aggregate principal amount
Alltel Corporation 7.00% Debentures due 2016 and $0.4 billion aggregate
principal amount of Cellco Partnership and Verizon Wireless Capital LLC
8.50% Notes due 2018, as well as $0.3 billion of other costs.
We recognize early debt redemption costs in Other income and
(expense), net on our consolidated statements of income.
Additional Financing Activities (Non-Cash Transaction)
During 2014 and 2013, we nanced, primarily through vendor nancing
arrangements, the purchase of approximately $0.7 billion and $0.1 billion,
respectively, of long-lived assets, consisting primarily of network equip-
ment. At December 31, 2014, $0.7 billion of these nancing arrangements
remained outstanding. These purchases are non-cash nancing activities
and therefore not reected within Capital expenditures on our consoli-
dated statements of cash ows.
Guarantees
We guarantee the debentures and rst mortgage bonds of our operating
telephone company subsidiaries. As of December 31, 2014, $3.1 billion
aggregate principal amount of these obligations remained outstanding.
Each guarantee will remain in place for the life of the obligation unless
terminated pursuant to its terms, including the operating telephone
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, 2014,
$1.4 billion aggregate principal amount of these obligations remain
outstanding.
Debt Covenants
We and our consolidated subsidiaries are in compliance with all of our
debt covenants.
Maturities of Long-Term Debt
Maturities of long-term debt outstanding at December 31, 2014 are
as follows:
Years (dollars in millions)
2015 $ 2,397
2016 6,114
2017 3,911
2018 6,529
2019 6,088
Thereafter 87,894
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 nance subsidiary to facilitate
the oering 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, oper-
ations or revenues. Verizon Wireless is jointly and severally liable with
Verizon Wireless Capital LLC for co-issued notes.
2014
In addition to the retirements of debt securities in connection with the
Tender Oer, the May Exchange Oer, the July Exchange Oers and the
November Early Debt Redemption, as noted above, during March 2014,
Verizon Wireless redeemed $1.25 billion aggregate principal amount of
the Cellco Partnership and Verizon Wireless Capital LLC 8.50% Notes due
2018 at 127.135% of the principal amount of such notes, plus accrued
and unpaid interest (see “Early Debt Redemption and Other Costs”).
2013
During November 2013, $1.25 billion of 7.375% Verizon Wireless Notes
and $0.2 billion of 6.50% Verizon Wireless Notes matured and were
repaid. Also during November 2013, Verizon Wireless redeemed $3.5 bil-
lion of 5.55% Notes, due February 1, 2014 at a redemption price of 101%
of the principal amount of the notes. Any accrued and unpaid interest
was paid to the date of redemption.
Telephone and Other Subsidiary Debt
2014
During 2014, a series of notes held by GTE Corporation were included in
the Tender Oer described above.
2013
During May 2013, $0.1 billion of 7.0% Verizon New York Inc. Debentures
matured and were repaid. During June 2013, $0.1 billion of 7.0% Verizon
New York Inc. Debentures matured and were repaid. In addition, during
June 2013, we redeemed $0.25 billion of 7.15% Verizon Maryland LLC
Debentures, due May 2023 at a redemption price of 100% of the prin-
cipal amount of the debentures. During October 2013, $0.3 billion of
4.75% Verizon New England Inc. Debentures matured and were repaid.
During November 2013, we redeemed $0.3 billion of 6.70% Verizon New
York Inc. Debentures, due November 2023 at a redemption price of 100%
of the principal amount of the debentures. During December 2013,
we redeemed $0.2 billion of 7.0% Verizon New York Inc. Debentures,
due December 2033 at a redemption price of 100% of the principal
amount of the debentures and $20 million of 7.0% Verizon Delaware LLC
Debentures, due December 2023 at a redemption price of 100% of the
principal amount of the debentures. Any accrued and unpaid interest
was paid to the date of redemption.
Early Debt Redemption and Other Costs
During March 2014, we recorded net debt redemption costs of $0.9 bil-
lion in connection with the early redemption of $1.25 billion aggregate
principal amount of Cellco Partnership and Verizon Wireless Capital LLC
8.50% Notes due 2018, and the purchase of the following notes pursuant
to the Tender Oer: $0.7 billion of the then outstanding $1.5 billion aggre-
gate principal amount of Verizon 6.10% Notes due 2018, $0.8 billion of
the then outstanding $1.5 billion aggregate principal amount of Verizon
5.50% Notes due 2018, $0.6 billion of the then outstanding $1.3 billion
aggregate principal amount of Verizon 8.75% Notes due 2018, $0.7 bil-
lion of the then outstanding $1.25 billion aggregate principal amount of
Verizon 5.55% Notes due 2016, $0.4 billion of the then outstanding $0.75
billion aggregate principal amount of Verizon 5.50% Notes due 2017, $0.6
billion of the then outstanding $1.0 billion aggregate principal amount