Stock Analysis on Net

Verizon Communications Inc. (NYSE:VZ)

Analysis of Debt 

Microsoft Excel

Total Debt (Carrying Amount)

Verizon Communications Inc., balance sheet: debt

US$ in millions

Microsoft Excel
Dec 31, 2023 Dec 31, 2022 Dec 31, 2021 Dec 31, 2020 Dec 31, 2019
Debt maturing within one year 12,973 9,963 7,443 5,889 10,777
Long-term debt, excluding maturing within one year 137,701 140,676 143,425 123,173 100,712
Total short-term and long-term debt, including finance leases (carrying amount) 150,674 150,639 150,868 129,062 111,489

Based on: 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31).

Debt item Description The company
Total short-term and long-term debt, including finance leases (carrying amount) Sum of the carrying values as of the balance sheet date of all debt plus capital lease obligations. Verizon Communications Inc. total debt decreased from 2021 to 2022 but then slightly increased from 2022 to 2023.

Total Debt (Fair Value)

Microsoft Excel
Dec 31, 2023
Selected Financial Data (US$ in millions)
Short-term and long-term debt, excluding finance leases 145,610
Finance lease obligations 2,091
Total short-term and long-term debt, including finance leases (fair value) 147,701
Financial Ratio
Debt, fair value to carrying amount ratio 0.98

Based on: 10-K (reporting date: 2023-12-31).


Weighted-average Interest Rate on Debt

Weighted-average interest rate on debt: 7.70%

Interest rate Debt amount1 Interest rate × Debt amount Weighted-average interest rate2
6.94% 33,316 2,312
7.88% 37,229 2,934
8.95% 55,355 4,954
6.14% 2,099 129
6.14% 2,029 125
7.88% 94 7
6.50% 79 5
8.75% 535 47
6.09% 14,048 856
6.14% 8,163 501
2.90% 2,091 61
Total 155,038 11,930
7.70%

Based on: 10-K (reporting date: 2023-12-31).

1 US$ in millions

2 Weighted-average interest rate = 100 × 11,930 ÷ 155,038 = 7.70%


Interest Costs Incurred

Verizon Communications Inc., interest costs incurred

US$ in millions

Microsoft Excel
12 months ended: Dec 31, 2023 Dec 31, 2022 Dec 31, 2021 Dec 31, 2020 Dec 31, 2019
Interest expense 5,524 3,613 3,485 4,247 4,730
Capitalized interest costs 1,818 2,030 1,841 555 656
Interest costs on debt balances and net amortization of debt discount 7,342 5,643 5,326 4,802 5,386

Based on: 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31).

Debt item Description The company
Interest expense Amount of the cost of borrowed funds accounted for as interest expense for debt. Verizon Communications Inc. interest expense increased from 2021 to 2022 and from 2022 to 2023.
Capitalized interest costs Amount of interest costs capitalized disclosed as an adjusting item to interest costs incurred. Verizon Communications Inc. capitalized interest costs increased from 2021 to 2022 but then decreased significantly from 2022 to 2023.
Interest costs on debt balances and net amortization of debt discount Total interest costs incurred during the period and either capitalized or charged against earnings. Verizon Communications Inc. interest costs on debt balances and net amortization of debt discount increased from 2021 to 2022 and from 2022 to 2023.

Adjusted Interest Coverage Ratio

Microsoft Excel
Dec 31, 2023 Dec 31, 2022 Dec 31, 2021 Dec 31, 2020 Dec 31, 2019
Selected Financial Data (US$ in millions)
Net income attributable to Verizon 11,614 21,256 22,065 17,801 19,265
Add: Net income attributable to noncontrolling interest 481 492 553 547 523
Add: Income tax expense 4,892 6,523 6,802 5,619 2,945
Add: Interest expense 5,524 3,613 3,485 4,247 4,730
Earnings before interest and tax (EBIT) 22,511 31,884 32,905 28,214 27,463
 
Interest costs on debt balances and net amortization of debt discount 7,342 5,643 5,326 4,802 5,386
Financial Ratio With and Without Capitalized Interest
Interest coverage ratio (without capitalized interest)1 4.08 8.82 9.44 6.64 5.81
Adjusted interest coverage ratio (with capitalized interest)2 3.07 5.65 6.18 5.88 5.10

Based on: 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31).

2023 Calculations

1 Interest coverage ratio (without capitalized interest) = EBIT ÷ Interest expense
= 22,511 ÷ 5,524 = 4.08

2 Adjusted interest coverage ratio (with capitalized interest) = EBIT ÷ Interest costs on debt balances and net amortization of debt discount
= 22,511 ÷ 7,342 = 3.07


Solvency ratio Description The company
Adjusted interest coverage ratio A solvency ratio calculated as EBIT divided by interest payments (including capitalized interest). Verizon Communications Inc. adjusted interest coverage ratio deteriorated from 2021 to 2022 and from 2022 to 2023.