Document

We have audited the accompanying statements of net assets available for benefits of the Verizon Savings Plan for Management Employees (the Plan) as of December 31, 2020 and 2019, and the related statement of changes in net assets available for benefits for the year ended December 31, 2020, and the related notes (collectively referred to as the “financial statements”). In our opinion, the financial statements present fairly, in all material respects, the net assets available for benefits of the Plan as of December 31, 2020 and 2019, and the changes in net assets available for benefits for the year ended December 31, 2020, in conformity with accounting principles generally accepted in the United States of America.

These financial statements are the responsibility of the Plan’s management. Our responsibility is to express an opinion on the Plan’s financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Plan in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement, whether due to error or fraud. The Plan is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Plan’s internal control over financial reporting. Accordingly, we express no such opinion.

Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.

The supplemental information in the accompanying schedule of assets (held at end of year) as of December 31, 2020, has been subjected to audit procedures performed in conjunction with the audit of the Plan’s financial statements. The supplemental information is the responsibility of the Plan’s management. Our audit procedures included determining whether the supplemental information reconciles to the financial statements or the underlying accounting and other records, as applicable, and performing procedures to test the completeness and accuracy of the information presented in the supplemental information. In forming our opinion on the supplemental information, we evaluated whether the supplemental information, including its form and content, is presented in conformity with the Department of Labor’s Rules and Regulations for Reporting and Disclosure under the Employee Retirement Income Security Act of 1974. In our opinion, the supplemental information is fairly stated, in all material respects, in relation to the financial statements as a whole.


	2020		2019
Assets
Plan interest in Verizon Master Savings Trust	$	28,453,125	$	25,713,992
Plan interest in Bell Atlantic Master Trust	185,312		138,705
Total investments	28,638,437		25,852,697

Notes receivable from participants	444,082		486,490
Employer contribution receivable	—		208,647
Net assets available for benefits	$	29,082,519	$	26,547,834


	2020
Additions:
Participant contributions	$	897,536
Employer contributions	499,963
Total contributions	1,397,499

Investment income:
Net investment gain from plan interest in Verizon Master Savings Trust	3,567,569
Net investment gain from plan interest in Bell Atlantic Master Trust	33,817
Interest income on notes receivables from participants	25,346
Total investment income	3,626,732

Total additions	5,024,231

Deductions:
Benefits paid to participants	2,436,722

Administrative expenses	69,461
Total deductions	2,506,183

Net increase	2,518,048

Transfers in from other plans and other (Note 1)	16,637
Net change, including transfers	2,534,685

Net assets available for benefits
Beginning of year	26,547,834
End of year	$	29,082,519

The following description of the Verizon Savings Plan for Management Employees (the “Plan”) provides only general information. Participants should refer to the Summary Plan Description and Plan Document for a complete description of the Plan’s provisions. The Plan is a defined contribution plan subject to the provisions of the Employee Retirement Income Security Act of 1974 (“ERISA”).

Covered employees are eligible to make before-tax, Roth and/or after-tax contributions to the Plan and to receive matching employer contributions upon completion of enrollment in the Plan as soon as practicable following the date of hire. Beginning January 1, 2012, covered employees who are employed by Verizon or its Participating Affiliates on the last day of the year or who satisfy certain other requirements may receive employer annual discretionary awards (“profit sharing contributions”) under the Plan.

Verizon acquired ProtectWise, Inc. (“ProtectWise”) on March 1, 2019. Effective July 1, 2019, ProtectWise, Inc. employees became eligible to enroll and participate in the Plan. The ProtectWise 401(k) plan merged with the Plan on July 31, 2020. As a result of this merger, a total of $3.8 million was transferred to the Plan on August 3, 2020.

Each participant’s account is credited with the participant’s contributions, rollovers, employer-matching contributions, profit sharing contributions, and allocations of Plan income. Allocations of Plan income are based on participant account balances. The benefit to which a participant is entitled is the benefit that can be provided from the participant’s vested account.

A participant shall be fully vested in the employer-matching and profit sharing contributions allocated to his or her account or Employee Stock Ownership Plan (“ESOP”) account and any income thereon upon completing three years of vesting service or upon death, disability, retirement from Verizon or its Participating Affiliates, attainment of normal retirement age, or involuntary termination (other than for cause).

A terminated employee’s non-vested employer-matching and profit sharing contributions are forfeited and offset against subsequent employer-matching and profit sharing contributions to the Plan. Forfeitures used to reduce employer-matching contributions were $31.8 million for the year ended December 31, 2020. Outstanding forfeitures not yet applied against employer-matching contributions were $18.4 million and $32.1 million at December 31, 2020 and 2019, respectively.

The Plan is funded by employee contributions up to a maximum of 50% of compensation (16% for highly compensated employees as defined in the Plan Document) and by employer-matching and profit sharing contributions. The employer-matching contributions are equivalent in value to 100% of the initial 6% of the participants’ contributions of eligible compensation for each payroll period. Employees attaining the age of 50 or older can elect to make additional catch-up contributions to the Plan. Verizon or its Participating Affiliates may make a discretionary, performance-based profit sharing contribution to the Plan in an amount up to 3% of each employee’s eligible compensation for the Plan year. The Plan includes an auto-enrollment provision whereby all newly eligible employees are automatically enrolled in the Plan unless they affirmatively elect not to participate in the Plan. These participants have their employee contributions set at 3% of eligible compensation and their contributions invested in the Target Date Fund that corresponds most closely with the year the participant will turn age 65, until changed by the participant.

Participant contributions may be made on a before-tax or Roth after-tax basis (“elective contributions”) or from currently taxed compensation (“after-tax contributions”). Each participant’s elective contributions for the 2020 Plan year were limited to $19,500. For 2020, the total amount of elective contributions, after-tax contributions, employer-matching contributions, profit sharing contributions, and certain forfeitures that may be allocated to a Plan participant was limited to the lesser of (1) $57,000 or (2) 100% of the participant’s total compensation, and the compensation on which such contributions were based was limited to $285,000. The catch-up contribution limit is $6,500 for eligible participants.

Employer-matching contributions and profit sharing contributions are made in cash, which is invested in the same investment options as the participant’s current contributions. For the year ended December 31, 2020, total employer-matching contributions were made in cash in the amount of $500.0 million. There was no profit sharing contribution made for 2020.

The Plan includes a loan provision authorizing participants to borrow an aggregate amount generally not exceeding the lesser of (1) $50,000 or (2) 50% of their vested account balances in the Plan, subject to certain limitations. Loans are generally repaid by payroll deductions. The general term of repayment for loans is a minimum of six months and a maximum of five years (and generally fifteen years for a loan to purchase a principal residence). Beginning January 1, 2012, each new loan bears interest at a rate based on the prime rate plus one percent as determined on the last business day of the calendar quarter immediately preceding the calendar quarter in which the loan is made. Loans made prior to January 1, 2012 bear interest at a rate based upon the prime rate. A loan processing fee of $50 is charged to a participant’s savings plan account upon initiation of a new loan. Participant loans have been classified as “Notes receivable from participants” in the Statements of Net Assets Available for Benefits. Interest rates range from 3.25% to 10.50% for the year ended December 31, 2020.

Benefits are recorded when paid. Benefits are payable in a lump sum cash payment unless a participant elects, in writing, one of the following three optional forms of benefit payment: (1) a lump sum in Verizon shares for investments in the Verizon Company Stock Fund, or the ESOP Shares Fund with the balance in cash, (2) in annual, semi-annual, quarterly, or monthly installments in cash of approximately equal amounts to be paid out for a period of 2 to 20 years, as selected by the participant, or (3) for those participants eligible to receive their distribution in installments as described in (2) above, a pro rata portion of each installment payment in Verizon shares for investments in the Verizon Company Stock Fund or the ESOP Shares Fund, with the balance of each installment in cash.

Plan administrative fees may include legal, accounting, trustee, recordkeeping, and other administrative fees and expenses associated with maintaining the Plan. The cost of administering the Plan is paid by participants through a combination of fees allocated to each participant’s account and fees that are paid as part of the investment fees that are allocated to the Plan’s investment options. Participants are provided with a detailed schedule of fees in the annual disclosure notice.

Fidelity Management Trust Company (the “Trustee” or “Fidelity”) has been designated as the trustee and record keeper of the Verizon Master Savings Trust and is responsible for the control and disbursement of the funds and portfolios of the Plan. The Trustee is also responsible for the investment and reinvestment of the funds and portfolios of the Plan, except to the extent that it is directed by Verizon Investment Management Corp. (“VIMCO”) or by third-party investment managers appointed by VIMCO.

The Bell Atlantic Master Trust holds both defined benefit and defined contribution assets, which are either pooled between defined benefit plans and defined contribution plans, or specific defined benefit plans, or specific defined contribution plans. The Bank of New York Mellon (“BNY Mellon”) is the trustee of the Bell Atlantic Master Trust.

The Board of Directors of Verizon may terminate or partially terminate the Plan at any time and also may modify, alter or amend the Plan at any time. The most senior Human Resources officer of Verizon also has the right to modify, alter or amend the Plan at any time. The chief legal counsel to the Verizon Employee Benefits Committee may also amend the Plan for changes required by the Internal Revenue Service (“IRS”) in connection with a determination letter or voluntary compliance application, changes required for compliance with applicable law, and administrative changes required in connection with a merger, consolidation, or transfer of assets to or from the Plan. No amendment may permit any of the assets held pursuant to the Plan to be used for any purpose other than for the exclusive benefit of the participants and their beneficiaries or for paying reasonable expenses of administering the Plan. In the event the Plan terminates, participants will become fully vested in their accounts.

Notes receivable from participants represent participant loans that are recorded at their unpaid principal balance plus any accrued but unpaid interest. Interest income on notes receivable from participants is recorded when it is earned. Related fees are recorded as administrative expenses and are expensed when they are incurred. No allowance for credit losses has been recorded as of December 31, 2020 or 2019. A participant loan is in default if loan repayments are delinquent beyond the end of the Plan’s grace period. Defaulted loans are treated as an offset distribution or deemed distribution for tax purposes and become taxable income to the participant in the year in which the default occurs. In the case of an offset distribution, the participant loan balance is reduced and a distribution is recorded on the participant’s account.

In February 2017, the Financial Accounting Standards Board issued the ASU No. 2017-06, “Employee Benefit Plan Master Trust Reporting”. This ASU requires an employee benefit plan to disclose the plan’s percentage interest in a master trust and a list of the investments held by the master trust, presented by general type, within the plan’s financial statements. This ASU also removes the requirement to disclose the plan’s overall percentage interest in a master trust for plans with divided interests and requires that all plans disclose the dollar amount of their interest in each general type of investment. In addition, the ASU requires the disclosure of the master trust’s other asset and liability balances and the dollar amount of the plan’s interest in each of those balances. The amendments in this ASU are effective for fiscal years beginning after December 15, 2018. The Plan Sponsor adopted this accounting standard update in 2019 on a retrospective basis to conform to the presentation and disclosure requirements.

In August 2018, the Financial Accounting Standards Board issued the Accounting Standards Update (“ASU”) No. 2018-13, “Disclosure Framework - Changes to the Disclosure Requirements for Fair Value Measurement”. This ASU removes the requirements to disclose the amount of and reasons for transfers between Level 1 and Level 2 of the fair value hierarchy, the policy for timing of level transfers, and the valuation processes for Level 3 fair value measurements. This ASU requires entities that calculate net asset value ("NAV") to disclose the timing of liquidation of an investee’s assets and the date when redemption restrictions might lapse, only if the timing was communicated to the entity or publicly announced, and disclose information on measurement uncertainty as of the reporting date. In addition, this ASU requires entities to present the changes in unrealized gains and losses for recurring Level 3 fair value measurements, as well as the range and weighted average of significant unobservable inputs used to develop Level 3 fair value measurements, based on materiality. The amendments in this ASU are effective for fiscal years beginning after December 15, 2019. The Plan Sponsor adopted this accounting standard update in 2020 on a prospective basis, with the exception of the enhancements to the Level 3 disclosures which were applied on a retrospective basis, where applicable, to conform to disclosure requirements.

The Plan’s interests in the Master Trusts are stated at fair value. The Statement of Changes in Net Assets Available for Benefits reflects the net investment gain (loss) from the Plan’s interests in the Master Trusts which consists of the realized gains or losses and the unrealized appreciation/(depreciation) in fair value, as well as interest and dividends earned. Purchases and sales of investments are reflected as of the trade date. Realized gains and losses on sales of investments are determined on the basis of average cost. Dividend income is recorded on the ex-dividend date. Interest earned on investments is recorded on the accrual basis. Net appreciation/(depreciation) includes gains and losses on investments bought and sold, as well as held during the year.

Fair value of financial and non-financial assets and liabilities is defined as an exit price, representing the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants. The three-tier hierarchy for inputs used in measuring fair value, which prioritizes the inputs used in the methodologies of measuring fair value for assets and liabilities, is as follows:

Financial assets and financial liabilities are classified in their entirety based on the lowest level of input that is significant to the fair value measurements. The Plan Sponsor’s assessment of the significance of a particular input to the fair value measurements requires judgment, and may affect the valuation of the assets and liabilities being measured and their categorization within the fair value hierarchy. Valuation techniques maximize the use of observable inputs and minimize the use of unobservable inputs.

Verizon announced the sale of Verizon Media on May 3, 2021. After the transaction closes, Verizon Media participants, currently participants in the Plan, will have the option to keep any existing balance in the Plan or rollover their balances to a new 401(k) plan or another tax-qualified savings vehicle.

The Plan’s investments are held in the Verizon Master Savings Trust and in the defined contribution portion of the Bell Atlantic Master Trust. The Plan’s participating interests in the investment funds of the Master Trusts are based on account balances of the participants and their elected investment funds. The net assets of the Master Trusts at December 31, 2020 and 2019, respectively, which may include receivables and payables from unsettled trades, are allocated by assigning to each plan participating in the Master Trusts those transactions that can be specifically identified as related to the plan, such as contributions, benefit payments, and plan-specific expenses. The income and expenses resulting from the collective investments of the Master Trusts’ assets are allocated in proportion to the fair value of the assets assigned to such plan.

The defined contribution net investments in the Bell Atlantic Master Trust are held in a unitized commingled account measured at NAV per share, as a practical expedient. The net investments are reflected as a component of “Investments measured at NAV” presented in the fair value hierarchy table.

The Plan’s interest in the investments in the Master Trusts are reported in “Plan interest in Verizon Master Savings Trust” and “Plan interest in Bell Atlantic Master Trust” in the Statements of Net Assets Available for Benefits. The related investment gains are reported in “Net investment gain from plan interest in Verizon Master Savings Trust” and “Net investment gain from plan interest in Bell Atlantic Master Trust” in the Statement of Changes in Net Assets Available for Benefits.

The accounting records of the Master Trusts are maintained in U.S. dollars. Foreign currency denominated assets and liabilities are translated into U.S. dollars at the prevailing rates of exchange at the end of each accounting period, with the impact of fluctuations in foreign exchange rates reflected as an unrealized gain or loss in the fair value of the investments.

Cash receipts and payments derived from investment trades involving foreign currency denominated investments are translated into U.S. dollars at the prevailing exchange rate on the respective transaction date. Net realized gains and losses on foreign currency transactions, upon disposition of foreign currency denominated investments, arise as a result of fluctuations in foreign exchange rates between the trade and settlement dates and the difference between the amount of net investment income accrued and the U.S. dollar amount actually received.


	December 31, 2020				December 31, 2019
	Master Trusts Balances		Plan's Interest in Master Trusts Balances		Master Trusts Balances		Plan's Interest in Master Trusts Balances
Cash and cash equivalents	$	2,022,284	$	1,498,506	$	1,644,901	$	1,103,611
U.S. government securities	2,020,006		1,496,818		2,048,007		1,486,106
Preferred debt securities	936,486		693,933		866,181		628,532
Other debt securities	1,322,434		979,920		998,094		724,252
Preferred stock	22,690		16,813		22,484		16,315
Common stock	10,668,319		7,905,192		9,849,990		7,147,499

Common/collective trusts	12,427,515		9,208,751		9,719,422		8,056,906
Pooled separate accounts	708,917		525,305		707,884		2,855,478
Mutual funds	1,121,673		831,156		1,920,078		759,967
Other	6,910,446		5,078,671		7,293,493		3,257,279
Total investments in the Verizon Master Savings Trust at fair value	$	38,160,770	$	28,235,065	$	35,070,534	$	26,035,945
Receivables	2,221,120		2,203,082		1,462,171		1,061,963
Payables	(2,678,853)		(1,985,022)		(1,904,666)		(1,383,916)
Total net assets in Verizon Master Savings Trust at fair value	$	37,703,037	$	28,453,125	$	34,628,039	$	25,713,992

Commingled account	193,562		185,312		145,440		138,705
Total investments in the Bell Atlantic Master Trust at NAV	$	193,562	$	185,312	$	145,440	$	138,705

Fully benefit-responsive investment contracts	752,106		—		736,025		—
Total investments in the Verizon Master Savings Trust at contract value	$	752,106	$	—	$	736,025	$	—

Total investments	$	38,648,705	$	28,638,437	$	35,509,504	$	25,852,697

Cash and cash equivalents include short-term investment funds (less than 90 days to maturity), primarily in diversified portfolios of investment grade money market instruments, and are valued using quoted market prices or other valuation methods. The carrying value of cash equivalents approximates fair value due to the short-term nature of these investments.

Investments in securities traded on national and foreign securities exchanges are valued by the custodian at the last reported sale prices on the last business day of the year or, if no sales were reported on that date, at the last reported bid prices. Government obligations, corporate bonds, international bonds and asset-backed securities are valued using matrix prices with input from independent third-party valuation sources. Over-the-counter securities are valued at the bid and ask prices or the average of the bid and ask prices on the last business day of the year from published sources or, if not available, from other sources considered reliable such as multiple broker quotes.

Commingled funds not traded on national exchanges are valued by the custodian or fund administrator at their NAV. Commingled funds held by third-party custodians appointed by the fund managers provide the fund managers with a NAV. The fund managers have the responsibility for providing this information to the custodian of the respective plan. Commingled funds for which fair value is measured using the NAV per share as a practical expedient are not leveled within the fair value hierarchy and are included as a component of the total investments in the Master Trusts.


	Assets at Fair Value as of December 31, 2020
	Level 1		Level 2		Level 3		Total
Investments
Cash and cash equivalents	$	2,297	$	96,969	$	—	$	99,266
Verizon common stock	6,488,997		—		—		6,488,997
Mutual funds
U.S. fixed income	760,447		—		—		760,447

U.S. small cap	505,186		—		—		505,186
International equity	262,280		—		—		262,280
Global fixed income	220,210		—		—		220,210


Equity
International equity	3,481,594		13,829		—		3,495,423
U.S. equity	7,400,336		1,519		—		7,401,855
Fixed income
U.S. bonds	6,647		1,460,390		—		1,467,037
U.S. treasuries and agencies	1,438,149		555,823		—		1,993,972
Asset-backed securities	—		181,177		—		181,177
International bonds	—		604,241		—		604,241
Convertible securities	987		25,809		—		26,796
Total investments in the fair value hierarchy	20,567,130		2,939,757		—		23,506,887
Investments measured at NAV							14,847,445
Total investments at fair value	$	20,567,130	$	2,939,757	$	—	$	38,354,332


	Fair Value January 1, 2020		Transfer Out			Transfer In		Acquisitions		Dispositions		Realized Gain		Change in Unrealized Gain/(Loss)		Fair Value December 31, 2020
Fixed income
U.S. bonds	$	6,879	$	—		$	2	$	—	$	(6,984)	$	103	$	—	$	—
International bonds	1,535		(1,320)		(1)	—		281		(516)		20		—		—
Total investments	$	8,414	$	(1,320)		$	2	$	281	$	(7,500)	$	123	$	—	$	—


	Assets at Fair Value as of December 31, 2019
	Level 1		Level 2		Level 3		Total
Investments
Cash and cash equivalents	$	4,474	$	9,289	$	—	$	13,763
Verizon common stock	7,126,566		—		—		7,126,566
Mutual funds
U.S. fixed income	736,552		—		—		736,552
U.S. equity	479,127		—		—		479,127
U.S. small cap	409,478		—		—		409,478
International equity	362,211		—		—		362,211
Global fixed income	335,837		—		—		335,837


Equity
International equity	3,232,619		1,667		—		3,234,286
U.S. equity	6,769,447		15,381		—		6,784,828
Fixed income
U.S. bonds	6,611		1,253,938		6,879		1,267,428
U.S. treasuries and agencies	1,205,540		750,894		—		1,956,434
Asset-backed securities	—		168,751		—		168,751
International bonds	—		455,223		1,535		456,758
Convertible securities	—		15,000		—		15,000
Total investments in the fair value hierarchy	20,668,462		2,670,143		8,414		23,347,019
Investments measured at NAV							11,868,955
Total investments at fair value	$	20,668,462	$	2,670,143	$	8,414	$	35,215,974


	Fair Value January 1, 2019		Transfer Out		Transfer In		Acquisitions		Dispositions		Realized Gain/(Loss)		Change in Unrealized Gain		Fair Value December 31, 2019
Fixed income
U.S. bonds	$	7,735	$	—	$	—	$	5,156	$	(6,418)	$	37	$	369	$	6,879
International bonds	1,521		—		—		154		(230)		(5)		95		1,535
Total investments	$	9,256	$	—	$	—	$	5,310	$	(6,648)	$	32	$	464	$	8,414

The total net appreciation of $4.0 billion for the year ended December 31, 2020 includes gains and losses on investments bought and sold, as well as held during the year, for all the Master Trusts’ investments. Interest and dividends, along with the net appreciation/(depreciation) in fair value or change in contract value of investments, are allocated to the Plan on a daily basis based upon the Plan’s participation in the various investment funds and portfolios that comprise the Master Trusts as a percentage of the total participation in such funds and portfolios. Interest and dividend income for the Master Trusts was $613.7 million for the year ended December 31, 2020.

Asset Type

Fair Value

Unfunded Commitments

Redemption Frequency

Redemption Notice

Commingled funds:

U.S. equity securities

8,808,207

N/A

Daily

International equity securities

1,811,553

N/A

Daily

U.S. fixed income securities

921,102

N/A

Daily

Cash equivalents

2,597,666

N/A

Daily

Real estate

708,917

N/A

Daily

Total

14,847,445

Asset Type

Fair Value

Unfunded Commitments

Redemption Frequency

Redemption Notice

Commingled funds:

U.S. equity securities

7,134,338

N/A

Daily

International equity securities

1,301,817

N/A

Daily

U.S. fixed income securities

763,085

N/A

Daily

Cash equivalents

1,961,832

N/A

Daily

Real estate

707,883

N/A

Daily

Total

11,868,955

For a portion of the real estate fund, redemption requests will be scheduled for payment on the next valuation date which is at least three months after receipt of a written request for redemption (last business day of the quarter). Redemption requests are subject to fund management discretion based on cash available to meet redemption requests. In the event total redemption requests exceed the total cash available to honor such requests, available cash will be prorated among the contract-holders eligible for redemption.

In the normal course of operations, the Master Trusts’ investments may include derivative financial instruments. Derivatives are synthetic instruments used to get various market exposures with limited margin requirements and therefore with leverage risk involved. The notional amounts disclosed in this footnote provide a measure of the Master Trusts’ involvement in such instruments but are not indicative of potential loss. The intent is to use derivative financial instruments to gain market exposure or as economic hedges to manage various risks associated with the Master Trusts’ investments or to express investment managers’ views of future market movements efficiently. At December 31, 2020 and 2019, the Master Trusts utilized futures, swaps, options, and foreign currency forward contracts to manage risks such as price risk and foreign currency exchange rate risk. At December 31, 2020 and 2019, the notional value of the derivative instruments was $702.3 million and $1.8 billion, respectively. At December 31, 2020 and 2019, the fair value of the derivative instruments was $18.3 million and $25.6 million, respectively, and the related gains for the year ended December 31, 2020, were $19.8 million.

The Master Trusts maintained Securities Lending Agreements (the “Agreements”) with the custodian, BNY Mellon (“Custodian”). The Agreements, updated as of November 19, 2018, permit the Custodian to loan certain domestic and international securities held by the Master Trusts to borrowing counterparties who provide collateral for the loans. There is generally no stated repayment term for such loans and either party can terminate the loans at any time. Upon loan termination, the loan securities are returned to the Master Trusts and the collateral is paid back to the borrowing counterparty.

Risk of credit loss from securities lending is mitigated by obtaining sufficient collateral, transacting only with borrowing counterparties of high credit quality and being indemnified against borrowing counterparty default by the Custodian. During the years ended December 31, 2020 and 2019, the Master Trusts did not experience any losses arising from securities lending transactions.

Securities on loan continue to be recorded as assets in the Master Trusts and are included in the listing of investments in Note 3. The Master Trusts recognize loan collateral, held in separate accounts managed by the Custodian, as an asset and also recognize an equal and offsetting liability, representing their obligation to return the collateral upon termination of the loan. The loan collateral and offsetting liability have not been included in the listing of investments in Note 3 but are detailed below. Loan collateral can be in the form of cash equivalents or non-cash assets. Collateral in cash equivalents can be invested and reinvested in approved investments by the Custodian according to guidelines set forth in the Agreements. Non-cash collateral is held in the form received and not subject to investing activities by the Custodian. Collateral received are not sold or pledged as loaned securities. Investment gains are shared amongst the Master Trusts, Custodian and borrowing counterparties based on an agreed allocation. Investment losses, if any, arising from such investing activities are borne by the Master Trusts.

Total securities on loan were approximately $1.0 billion as of December 31, 2020 and 2019. Total collateral assets and liability to repay borrowing counterparties were each approximately $1.1 billion and $1.0 billion as of December 31, 2020 and 2019, respectively. As of December 31, 2020 and 2019, total fair value of collateral included cash equivalents of $690.4 million and $544.5 million, of which $511.6 million and $396.4 million, respectively, represents the Plan’s estimated allocated interest. Cash equivalents collateral is generally held in U.S. and foreign currency denominations and non-cash collateral is generally held in U.S. and international fixed income securities. Cash equivalents collateral assets are classified as Level 2 fair value measurements.

VIMCO, an indirect, wholly-owned subsidiary of Verizon, is the investment advisor for certain investment funds and, therefore, qualifies as a party-in-interest. VIMCO received no compensation from the Plan other than reimbursement of certain expenses directly attributable to its investment advisory and investment management services rendered to the Plan. In addition, certain investments held by the Master Trusts are managed by BNY Mellon, as trustee, and Fidelity, as trustee and record keeper. Therefore, these investments qualify as parties-in-interest transactions. The Plan also allows investment, through a unitized fund, in Verizon common stock, which is a party-in-interest transaction. All of these transactions are exempt from the prohibited transaction rules.

The Plan has received a determination letter from the IRS dated April 30, 2015, stating that the Plan is qualified under Section 401(a) of the Internal Revenue Code (the "Code”) and, therefore, the related trusts are exempt from taxation. The Plan is required to operate in conformity with the Code to maintain its qualification. The Plan administrator believes the Plan is being operated in compliance with the applicable requirements of the Code and, therefore, believes that the Plan is qualified and the related trusts are tax exempt.

U.S. GAAP requires the Plan's management to evaluate uncertain tax positions taken by the Plan. The financial statement effects of a tax position are recognized when the position is more likely than not, based on the technical merits, to be sustained upon examination by the IRS. The Plan administrator has analyzed the tax positions taken by the Plan, and has concluded that as of December 31, 2020, there are no uncertain positions taken or expected to be taken. The Plan is subject to routine audits by taxing jurisdictions; however, there are currently no audits for any tax periods in progress. The Plan administrator believes the Plan is no longer subject to income tax examinations for years prior to 2017.

The Plan provides investment options for participants who can invest in combinations of stocks, fixed income securities, and other investment securities. Investment securities are exposed to various risks, such as interest rate, market, equity price, and credit risks. Due to the level of risk associated with certain investment securities, it is reasonably possible that changes in the values of investment securities will occur in the near term and that such changes could materially affect participants’ account balances and the amounts reported in these financial statements.

In January 2020, the World Health Organization ("WHO") announced a global health emergency due to a new strain of coronavirus ("COVID-19") originating in Wuhan, China and the risk to the international community as the virus spread beyond its point of origin. In March 2020, the WHO classified COVID-19 as a pandemic, due to its rapid spread and severity.

Remaining impacts of the COVID-19 pandemic on market conditions are difficult to predict. Because the values of the Plan’s individual investments have and will fluctuate in response to changing market conditions, the ultimate impact of the pandemic on the Plan’s net assets available for benefits, and changes in net assets available for benefits are uncertain.

In response to the COVID-19 pandemic, in March 2020, the Coronavirus Aid, Relief and Economic Security (“CARES”) Act was enacted and signed into law. Certain provisions of the CARES Act allow defined contribution plans to waive mandatory distributions otherwise required to be paid in calendar year 2020. The CARES Act also permits tax-advantaged withdrawals and the suspension of certain loan repayments by certain participants affected by COVID-19. The Plan has been administered to permit such withdrawals and loan repayment suspensions.

The following table reconciles the Net change and Transfers from other qualified savings plans per the Statement of Changes in Net Assets Available for Benefits to Net income and Transfers of assets per the Plan’s Form 5500 Income and Expense Statement for the year ended December 31, 2020 (in thousands):


			Page

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM			1

FINANCIAL STATEMENTS

Statements of Net Assets Available for Benefits			2
As of December 31, 2020 and 2019

Statement of Changes in Net Assets Available for Benefits			3
For the year ended December 31, 2020

Notes to Financial Statements			4

SUPPLEMENTAL SCHEDULE *

Schedule H, Line 4(i)-Schedule of Assets (Held at End of Year)			17

SIGNATURE			18

EXHIBIT:

23.1 CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM


	2020		2019
Net assets available for benefits per the financial statements	$	29,082,519	$	26,547,834
Adjustment for deemed distributions with no post-default payments	(9,658)		(8,607)
Net assets available for benefits per Form 5500	$	29,072,861	$	26,539,227


	2020
Net change per the financial statements	$	2,534,685

Adjustment for deemed distributions with no post-default payments	(1,051)
Net income and transfers of assets per Form 5500	$	2,533,634


By:			/s/ Christine Pambianchi
			Christine Pambianchi
			Executive Vice President and Chief Human Resources Officer


			80 Pine Street New York, NY 10005 T +1 212 709 4500 F +1 212 709 4680 mitchelltitus.com


VERIZON SAVINGS PLAN FOR
MANAGEMENT EMPLOYEES


2. Accounting Policies


6. Related-Party Transactions


7. Income Tax Status