Stock Analysis on Net

Verizon Communications Inc. (NYSE:VZ)

Analysis of Debt 

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Total Debt (Carrying Amount)

Verizon Communications Inc., balance sheet: debt

US$ in millions

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Dec 31, 2021 Dec 31, 2020 Dec 31, 2019 Dec 31, 2018 Dec 31, 2017
Debt maturing within one year 7,443  5,889  10,777  7,190  3,453 
Long-term debt, excluding maturing within one year 143,425  123,173  100,712  105,873  113,642 
Total short- and long-term debt, including finance leases (carrying amount) 150,868  129,062  111,489  113,063  117,095 

Based on: 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31).

Debt item Description The company
Total short- 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 increased from 2019 to 2020 and from 2020 to 2021.

Total Debt (Fair Value)

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Dec 31, 2021
Selected Financial Data (US$ in millions)
Short- and long-term debt, excluding finance leases 169,205 
Finance lease obligations 1,325 
Total short- and long-term debt, including finance leases (fair value) 170,530 
Financial Ratio
Debt, fair value to carrying amount ratio 1.13

Based on: 10-K (reporting date: 2021-12-31).


Weighted-average Interest Rate on Debt

Weighted-average interest rate on debt: 7.79%

Interest rate Debt amount1 Interest rate × Debt amount Weighted-average interest rate2
5.82% 18,406  1,071 
7.75% 43,225  3,350 
8.95% 73,520  6,580 
6.80% 38 
7.88% 58 
8.00% 141  11 
8.75% 375  33 
8.75% 250  22 
3.56% 9,620  342 
2.20% 1,325  29 
Total 146,958  11,446 
7.79%

Based on: 10-K (reporting date: 2021-12-31).

1 US$ in millions

2 Weighted-average interest rate = 100 × 11,446 ÷ 146,958 = 7.79%


Interest Costs Incurred

Verizon Communications Inc., interest costs incurred

US$ in millions

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12 months ended: Dec 31, 2021 Dec 31, 2020 Dec 31, 2019 Dec 31, 2018 Dec 31, 2017
Interest expense 3,485  4,247  4,730  4,833  4,733 
Capitalized interest costs 1,841  555  656  740  678 
Interest costs on debt balances 5,326  4,802  5,386  5,573  5,411 

Based on: 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31).

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 decreased from 2019 to 2020 and from 2020 to 2021.
Capitalized interest costs Amount of interest costs capitalized disclosed as an adjusting item to interest costs incurred. Verizon Communications Inc. capitalized interest costs decreased from 2019 to 2020 but then increased from 2020 to 2021 exceeding 2019 level.
Interest costs on debt balances Total interest costs incurred during the period and either capitalized or charged against earnings. Verizon Communications Inc. interest costs on debt balances decreased from 2019 to 2020 but then increased from 2020 to 2021 not reaching 2019 level.

Adjusted Interest Coverage Ratio

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Dec 31, 2021 Dec 31, 2020 Dec 31, 2019 Dec 31, 2018 Dec 31, 2017
Selected Financial Data (US$ in millions)
Net income attributable to Verizon 22,065  17,801  19,265  15,528  30,101 
Add: Net income attributable to noncontrolling interest 553  547  523  511  449 
Add: Income tax expense 6,802  5,619  2,945  3,584  (9,956)
Add: Interest expense 3,485  4,247  4,730  4,833  4,733 
Earnings before interest and tax (EBIT) 32,905  28,214  27,463  24,456  25,327 
 
Interest costs on debt balances 5,326  4,802  5,386  5,573  5,411 
Financial Ratio With and Without Capitalized Interest
Interest coverage ratio (without capitalized interest)1 9.44 6.64 5.81 5.06 5.35
Adjusted interest coverage ratio (with capitalized interest)2 6.18 5.88 5.10 4.39 4.68

Based on: 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31).

2021 Calculations

1 Interest coverage ratio (without capitalized interest) = EBIT ÷ Interest expense
= 32,905 ÷ 3,485 = 9.44

2 Adjusted interest coverage ratio (with capitalized interest) = EBIT ÷ Interest costs on debt balances
= 32,905 ÷ 5,326 = 6.18


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 improved from 2019 to 2020 and from 2020 to 2021.