x
|
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
¨
|
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
DELAWARE
|
|
20-0836269
|
(State or other jurisdiction of incorporation or organization)
|
|
(I.R.S. Employer Identification No.)
|
|
|
|
12920 SE 38th Street, Bellevue, Washington
|
|
98006-1350
|
(Address of principal executive offices)
|
|
(Zip Code)
|
|
|
|
(425) 378-4000
|
||
(Registrant’s telephone number, including area code)
|
Class
|
|
Shares Outstanding as of July 17, 2017
|
|
Common Stock, $0.00001 par value per share
|
|
831,048,573
|
|
|
||
|
||
|
||
|
||
|
||
|
||
|
||
|
(in millions, except share and per share amounts)
|
June 30,
2017 |
|
December 31,
2016 |
||||
Assets
|
|
|
|
||||
Current assets
|
|
|
|
||||
Cash and cash equivalents
|
$
|
181
|
|
|
$
|
5,500
|
|
Accounts receivable, net of allowances of $83 and $102
|
1,719
|
|
|
1,896
|
|
||
Equipment installment plan receivables, net
|
2,060
|
|
|
1,930
|
|
||
Accounts receivable from affiliates
|
32
|
|
|
40
|
|
||
Inventories
|
1,208
|
|
|
1,111
|
|
||
Asset purchase deposit
|
—
|
|
|
2,203
|
|
||
Other current assets
|
1,580
|
|
|
1,537
|
|
||
Total current assets
|
6,780
|
|
|
14,217
|
|
||
Property and equipment, net
|
21,423
|
|
|
20,943
|
|
||
Goodwill
|
1,683
|
|
|
1,683
|
|
||
Spectrum licenses
|
35,060
|
|
|
27,014
|
|
||
Other intangible assets, net
|
296
|
|
|
376
|
|
||
Equipment installment plan receivables due after one year, net
|
1,102
|
|
|
984
|
|
||
Other assets
|
815
|
|
|
674
|
|
||
Total assets
|
$
|
67,159
|
|
|
$
|
65,891
|
|
Liabilities and Stockholders' Equity
|
|
|
|
||||
Current liabilities
|
|
|
|
||||
Accounts payable and accrued liabilities
|
$
|
6,225
|
|
|
$
|
7,152
|
|
Payables to affiliates
|
155
|
|
|
125
|
|
||
Short-term debt
|
522
|
|
|
354
|
|
||
Short-term debt to affiliates
|
680
|
|
|
—
|
|
||
Deferred revenue
|
851
|
|
|
986
|
|
||
Other current liabilities
|
395
|
|
|
405
|
|
||
Total current liabilities
|
8,828
|
|
|
9,022
|
|
||
Long-term debt
|
13,206
|
|
|
21,832
|
|
||
Long-term debt to affiliates
|
14,086
|
|
|
5,600
|
|
||
Tower obligations
|
2,606
|
|
|
2,621
|
|
||
Deferred tax liabilities
|
5,188
|
|
|
4,938
|
|
||
Deferred rent expense
|
2,660
|
|
|
2,616
|
|
||
Other long-term liabilities
|
971
|
|
|
1,026
|
|
||
Total long-term liabilities
|
38,717
|
|
|
38,633
|
|
||
Commitments and contingencies (Note 9)
|
|
|
|
|
|
||
Stockholders' equity
|
|
|
|
||||
5.50% Mandatory Convertible Preferred Stock Series A, par value $0.00001 per share, 100,000,000 shares authorized; 20,000,000 and 20,000,000 shares issued and outstanding; $1,000 and $1,000 aggregate liquidation value
|
—
|
|
|
—
|
|
||
Common Stock, par value $0.00001 per share, 1,000,000,000 shares authorized; 832,476,169 and 827,768,818 shares issued, 831,021,302 and 826,357,331 shares outstanding
|
—
|
|
|
—
|
|
||
Additional paid-in capital
|
38,946
|
|
|
38,846
|
|
||
Treasury stock, at cost, 1,454,867 and 1,411,487 shares issued
|
(4
|
)
|
|
(1
|
)
|
||
Accumulated other comprehensive income
|
3
|
|
|
1
|
|
||
Accumulated deficit
|
(19,331
|
)
|
|
(20,610
|
)
|
||
Total stockholders' equity
|
19,614
|
|
|
18,236
|
|
||
Total liabilities and stockholders' equity
|
$
|
67,159
|
|
|
$
|
65,891
|
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||||||
(in millions, except share and per share amounts)
|
|
|
(As Adjusted - See Note 1)
|
|
|
|
(As Adjusted - See Note 1)
|
||||||||
Revenues
|
|
|
|
|
|
|
|
||||||||
Branded postpaid revenues
|
$
|
4,820
|
|
|
$
|
4,509
|
|
|
$
|
9,545
|
|
|
$
|
8,811
|
|
Branded prepaid revenues
|
2,334
|
|
|
2,119
|
|
|
4,633
|
|
|
4,144
|
|
||||
Wholesale revenues
|
234
|
|
|
207
|
|
|
504
|
|
|
407
|
|
||||
Roaming and other service revenues
|
57
|
|
|
53
|
|
|
92
|
|
|
104
|
|
||||
Total service revenues
|
7,445
|
|
|
6,888
|
|
|
14,774
|
|
|
13,466
|
|
||||
Equipment revenues
|
2,506
|
|
|
2,188
|
|
|
4,549
|
|
|
4,039
|
|
||||
Other revenues
|
262
|
|
|
211
|
|
|
503
|
|
|
446
|
|
||||
Total revenues
|
10,213
|
|
|
9,287
|
|
|
19,826
|
|
|
17,951
|
|
||||
Operating expenses
|
|
|
|
|
|
|
|
||||||||
Cost of services, exclusive of depreciation and amortization shown separately below
|
1,518
|
|
|
1,429
|
|
|
2,926
|
|
|
2,850
|
|
||||
Cost of equipment sales
|
2,846
|
|
|
2,619
|
|
|
5,532
|
|
|
4,993
|
|
||||
Selling, general and administrative
|
2,915
|
|
|
2,772
|
|
|
5,870
|
|
|
5,521
|
|
||||
Depreciation and amortization
|
1,519
|
|
|
1,575
|
|
|
3,083
|
|
|
3,127
|
|
||||
Cost of MetroPCS business combination
|
—
|
|
|
59
|
|
|
—
|
|
|
95
|
|
||||
Gains on disposal of spectrum licenses
|
(1
|
)
|
|
—
|
|
|
(38
|
)
|
|
(636
|
)
|
||||
Total operating expense
|
8,797
|
|
|
8,454
|
|
|
17,373
|
|
|
15,950
|
|
||||
Operating income
|
1,416
|
|
|
833
|
|
|
2,453
|
|
|
2,001
|
|
||||
Other income (expense)
|
|
|
|
|
|
|
|
||||||||
Interest expense
|
(265
|
)
|
|
(368
|
)
|
|
(604
|
)
|
|
(707
|
)
|
||||
Interest expense to affiliates
|
(131
|
)
|
|
(93
|
)
|
|
(231
|
)
|
|
(172
|
)
|
||||
Interest income
|
6
|
|
|
3
|
|
|
13
|
|
|
6
|
|
||||
Other expense, net
|
(92
|
)
|
|
(3
|
)
|
|
(90
|
)
|
|
(5
|
)
|
||||
Total other expense, net
|
(482
|
)
|
|
(461
|
)
|
|
(912
|
)
|
|
(878
|
)
|
||||
Income before income taxes
|
934
|
|
|
372
|
|
|
1,541
|
|
|
1,123
|
|
||||
Income tax expense
|
(353
|
)
|
|
(147
|
)
|
|
(262
|
)
|
|
(419
|
)
|
||||
Net income
|
581
|
|
|
225
|
|
|
1,279
|
|
|
704
|
|
||||
Dividends on preferred stock
|
(14
|
)
|
|
(14
|
)
|
|
(28
|
)
|
|
(28
|
)
|
||||
Net income attributable to common stockholders
|
$
|
567
|
|
|
$
|
211
|
|
|
$
|
1,251
|
|
|
$
|
676
|
|
|
|
|
|
|
|
|
|
||||||||
Net Income
|
$
|
581
|
|
|
$
|
225
|
|
|
$
|
1,279
|
|
|
$
|
704
|
|
Other comprehensive income, net of tax
|
|
|
|
|
|
|
|
||||||||
Unrealized gain on available-for-sale securities, net of tax effect $1, $2, $2 and $0
|
1
|
|
|
3
|
|
|
2
|
|
|
—
|
|
||||
Other comprehensive income
|
1
|
|
|
3
|
|
|
2
|
|
|
—
|
|
||||
Total comprehensive income
|
$
|
582
|
|
|
$
|
228
|
|
|
$
|
1,281
|
|
|
$
|
704
|
|
Earnings per share
|
|
|
|
|
|
|
|
||||||||
Basic
|
$
|
0.68
|
|
|
$
|
0.26
|
|
|
$
|
1.51
|
|
|
$
|
0.82
|
|
Diluted
|
$
|
0.67
|
|
|
$
|
0.25
|
|
|
$
|
1.47
|
|
|
$
|
0.81
|
|
Weighted average shares outstanding
|
|
|
|
|
|
|
|
||||||||
Basic
|
830,971,528
|
|
|
822,434,490
|
|
|
829,356,255
|
|
|
820,933,126
|
|
||||
Diluted
|
870,456,447
|
|
|
829,752,956
|
|
|
870,853,652
|
|
|
829,662,053
|
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||
(in millions)
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||||||
Operating activities
|
|
|
|
|
|
|
|
||||||||
Net income
|
$
|
581
|
|
|
$
|
225
|
|
|
$
|
1,279
|
|
|
$
|
704
|
|
Adjustments to reconcile net income to net cash provided by operating activities
|
|
|
|
|
|
|
|
||||||||
Depreciation and amortization
|
1,519
|
|
|
1,575
|
|
|
3,083
|
|
|
3,127
|
|
||||
Stock-based compensation expense
|
72
|
|
|
60
|
|
|
139
|
|
|
112
|
|
||||
Deferred income tax expense
|
345
|
|
|
140
|
|
|
248
|
|
|
404
|
|
||||
Bad debt expense
|
82
|
|
|
119
|
|
|
175
|
|
|
240
|
|
||||
Losses from sales of receivables
|
80
|
|
|
46
|
|
|
175
|
|
|
98
|
|
||||
Deferred rent expense
|
20
|
|
|
33
|
|
|
40
|
|
|
65
|
|
||||
Gains on disposal of spectrum licenses
|
(1
|
)
|
|
—
|
|
|
(38
|
)
|
|
(636
|
)
|
||||
Changes in operating assets and liabilities
|
|
|
|
|
|
|
|
||||||||
Accounts receivable
|
21
|
|
|
(105
|
)
|
|
(47
|
)
|
|
(307
|
)
|
||||
Equipment installment plan receivables
|
(353
|
)
|
|
343
|
|
|
(366
|
)
|
|
452
|
|
||||
Inventories
|
(185
|
)
|
|
3
|
|
|
(141
|
)
|
|
(798
|
)
|
||||
Deferred purchase price from sales of receivables
|
1
|
|
|
(204
|
)
|
|
(18
|
)
|
|
(183
|
)
|
||||
Other current and long-term assets
|
(135
|
)
|
|
(56
|
)
|
|
(146
|
)
|
|
129
|
|
||||
Accounts payable and accrued liabilities
|
56
|
|
|
(345
|
)
|
|
(595
|
)
|
|
(837
|
)
|
||||
Other current and long term liabilities
|
(189
|
)
|
|
(74
|
)
|
|
(144
|
)
|
|
214
|
|
||||
Other, net
|
(85
|
)
|
|
8
|
|
|
(102
|
)
|
|
9
|
|
||||
Net cash provided by operating activities
|
1,829
|
|
|
1,768
|
|
|
3,542
|
|
|
2,793
|
|
||||
Investing activities
|
|
|
|
|
|
|
|
||||||||
Purchases of property and equipment, including capitalized interest of $34, $18, $82 and $54
|
(1,347
|
)
|
|
(1,349
|
)
|
|
(2,875
|
)
|
|
(2,684
|
)
|
||||
Purchases of spectrum licenses and other intangible assets, including deposits
|
(5,791
|
)
|
|
(2,245
|
)
|
|
(5,805
|
)
|
|
(2,839
|
)
|
||||
Sales of short-term investments
|
—
|
|
|
2,923
|
|
|
—
|
|
|
2,998
|
|
||||
Other, net
|
5
|
|
|
4
|
|
|
(3
|
)
|
|
(2
|
)
|
||||
Net cash used in investing activities
|
(7,133
|
)
|
|
(667
|
)
|
|
(8,683
|
)
|
|
(2,527
|
)
|
||||
Financing activities
|
|
|
|
|
|
|
|
||||||||
Proceeds from issuance of long-term debt
|
4,485
|
|
|
997
|
|
|
9,980
|
|
|
997
|
|
||||
Proceeds from borrowing on revolving credit facility
|
1,855
|
|
|
—
|
|
|
1,855
|
|
|
—
|
|
||||
Repayments of revolving credit facility
|
(1,175
|
)
|
|
—
|
|
|
(1,175
|
)
|
|
—
|
|
||||
Repayments of capital lease obligations
|
(119
|
)
|
|
(43
|
)
|
|
(209
|
)
|
|
(79
|
)
|
||||
Repayments of short-term debt for purchases of inventory, property and equipment, net
|
(292
|
)
|
|
(150
|
)
|
|
(292
|
)
|
|
(150
|
)
|
||||
Repayments of long-term debt
|
(6,750
|
)
|
|
(5
|
)
|
|
(10,230
|
)
|
|
(10
|
)
|
||||
Tax withholdings on share-based awards
|
(3
|
)
|
|
(3
|
)
|
|
(95
|
)
|
|
(49
|
)
|
||||
Dividends on preferred stock
|
(14
|
)
|
|
(14
|
)
|
|
(28
|
)
|
|
(28
|
)
|
||||
Other, net
|
(3
|
)
|
|
8
|
|
|
16
|
|
|
9
|
|
||||
Net cash (used in) provided by financing activities
|
(2,016
|
)
|
|
790
|
|
|
(178
|
)
|
|
690
|
|
||||
Change in cash and cash equivalents
|
(7,320
|
)
|
|
1,891
|
|
|
(5,319
|
)
|
|
956
|
|
||||
Cash and cash equivalents
|
|
|
|
|
|
|
|
||||||||
Beginning of period
|
7,501
|
|
|
3,647
|
|
|
5,500
|
|
|
4,582
|
|
||||
End of period
|
$
|
181
|
|
|
$
|
5,538
|
|
|
$
|
181
|
|
|
$
|
5,538
|
|
Supplemental disclosure of cash flow information
|
|
|
|
|
|
|
|
||||||||
Interest payments, net of amounts capitalized, $79, $0, $79, $0 of which recorded as debt discount (Note 6)
|
$
|
727
|
|
|
$
|
399
|
|
|
$
|
1,222
|
|
|
$
|
814
|
|
Income tax payments
|
6
|
|
|
17
|
|
|
21
|
|
|
19
|
|
||||
Changes in accounts payable for purchases of property and equipment
|
8
|
|
|
(101
|
)
|
|
(317
|
)
|
|
(228
|
)
|
||||
Leased devices transferred from inventory to property and equipment
|
270
|
|
|
157
|
|
|
513
|
|
|
941
|
|
||||
Returned leased devices transferred from property and equipment to inventory
|
(273
|
)
|
|
(105
|
)
|
|
(470
|
)
|
|
(236
|
)
|
||||
Issuance of short-term debt for financing of property and equipment
|
2
|
|
|
—
|
|
|
290
|
|
|
150
|
|
||||
Assets acquired under capital lease obligations
|
313
|
|
|
171
|
|
|
597
|
|
|
295
|
|
|
Three Months Ended June 30, 2017
|
|
Three Months Ended June 30, 2016
|
||||||||||||||||||||
(in millions)
|
Unadjusted
|
|
Change in Accounting Principle
|
|
As Adjusted
|
|
As Filed
|
|
Change in Accounting Principle
|
|
As Adjusted
|
||||||||||||
Other revenues
|
$
|
194
|
|
|
$
|
68
|
|
|
$
|
262
|
|
|
$
|
146
|
|
|
$
|
65
|
|
|
$
|
211
|
|
Total revenues
|
10,145
|
|
|
68
|
|
|
10,213
|
|
|
9,222
|
|
|
65
|
|
|
9,287
|
|
||||||
Operating income
|
1,348
|
|
|
68
|
|
|
1,416
|
|
|
768
|
|
|
65
|
|
|
833
|
|
||||||
Interest income
|
74
|
|
|
(68
|
)
|
|
6
|
|
|
68
|
|
|
(65
|
)
|
|
3
|
|
||||||
Total other expense, net
|
(414
|
)
|
|
(68
|
)
|
|
(482
|
)
|
|
(396
|
)
|
|
(65
|
)
|
|
(461
|
)
|
||||||
Net income
|
581
|
|
|
—
|
|
|
581
|
|
|
225
|
|
|
—
|
|
|
225
|
|
|
Six Months Ended June 30, 2017
|
|
Six Months Ended June 30, 2016
|
||||||||||||||||||||
(in millions)
|
Unadjusted
|
|
Change in Accounting Principle
|
|
As Adjusted
|
|
As Filed
|
|
Change in Accounting Principle
|
|
As Adjusted
|
||||||||||||
Other revenues
|
$
|
373
|
|
|
$
|
130
|
|
|
$
|
503
|
|
|
$
|
316
|
|
|
$
|
130
|
|
|
$
|
446
|
|
Total revenues
|
19,696
|
|
|
130
|
|
|
19,826
|
|
|
17,821
|
|
|
130
|
|
|
17,951
|
|
||||||
Operating income
|
2,323
|
|
|
130
|
|
|
2,453
|
|
|
1,871
|
|
|
130
|
|
|
2,001
|
|
||||||
Interest income
|
143
|
|
|
(130
|
)
|
|
13
|
|
|
136
|
|
|
(130
|
)
|
|
6
|
|
||||||
Total other expense, net
|
(782
|
)
|
|
(130
|
)
|
|
(912
|
)
|
|
(748
|
)
|
|
(130
|
)
|
|
(878
|
)
|
||||||
Net income
|
1,279
|
|
|
—
|
|
|
1,279
|
|
|
704
|
|
|
—
|
|
|
704
|
|
•
|
Whether our EIP contracts contain a significant financing component, which is similar to our current practice of imputing interest, and would similarly impact the amount of revenue recognized at the time of an EIP sale and whether or not a portion of the revenue is recognized as interest and included in other revenues, rather than equipment revenues.
|
•
|
As we currently expense contract acquisition costs, we believe that the requirement to defer incremental contract acquisition costs and recognize them over the term of the initial contract and anticipated renewal contracts to which the costs relate will have a significant impact to our consolidated financial statements. We plan to utilize the practical expedient permitting expensing of costs to obtain a contract when the expected amortization period is one year or less.
|
•
|
Whether bill credits earned over time result in extended service contracts, which would impact the allocation and timing of revenue recognition between service revenue and equipment revenue.
|
•
|
Overall, with the exception of the aforementioned impacts, we do not expect that the new standard will result in a substantive change to the method of allocation of contract revenues between various services and equipment, nor to the timing of when revenues are recognized for most of our service contracts.
|
(in millions)
|
June 30,
2017 |
|
December 31,
2016 |
||||
EIP receivables, gross
|
$
|
3,496
|
|
|
$
|
3,230
|
|
Unamortized imputed discount
|
(231
|
)
|
|
(195
|
)
|
||
EIP receivables, net of unamortized imputed discount
|
3,265
|
|
|
3,035
|
|
||
Allowance for credit losses
|
(103
|
)
|
|
(121
|
)
|
||
EIP receivables, net
|
$
|
3,162
|
|
|
$
|
2,914
|
|
|
|
|
|
||||
Classified on the balance sheet as:
|
|
|
|
||||
Equipment installment plan receivables, net
|
$
|
2,060
|
|
|
$
|
1,930
|
|
Equipment installment plan receivables due after one year, net
|
1,102
|
|
|
984
|
|
||
EIP receivables, net
|
$
|
3,162
|
|
|
$
|
2,914
|
|
|
June 30, 2017
|
|
December 31, 2016
|
||||||||||||||||||||
(in millions)
|
Prime
|
|
Subprime
|
|
Total
|
|
Prime
|
|
Subprime
|
|
Total
|
||||||||||||
Unbilled
|
$
|
1,416
|
|
|
$
|
1,871
|
|
|
$
|
3,287
|
|
|
$
|
1,343
|
|
|
$
|
1,686
|
|
|
$
|
3,029
|
|
Billed – Current
|
57
|
|
|
83
|
|
|
140
|
|
|
51
|
|
|
77
|
|
|
128
|
|
||||||
Billed – Past Due
|
24
|
|
|
45
|
|
|
69
|
|
|
25
|
|
|
48
|
|
|
73
|
|
||||||
EIP receivables, gross
|
$
|
1,497
|
|
|
$
|
1,999
|
|
|
$
|
3,496
|
|
|
$
|
1,419
|
|
|
$
|
1,811
|
|
|
$
|
3,230
|
|
(in millions)
|
June 30,
2017 |
|
June 30,
2016 |
||||
Imputed discount and allowance for credit losses, beginning of period
|
$
|
316
|
|
|
$
|
333
|
|
Bad debt expense
|
119
|
|
|
126
|
|
||
Write-offs, net of recoveries
|
(137
|
)
|
|
(137
|
)
|
||
Change in imputed discount on short-term and long-term EIP receivables
|
121
|
|
|
83
|
|
||
Impacts from sales of EIP receivables
|
(85
|
)
|
|
(91
|
)
|
||
Imputed discount and allowance for credit losses, end of period
|
$
|
334
|
|
|
$
|
314
|
|
(in millions)
|
June 30,
2017 |
|
December 31,
2016 |
||||
Other current assets
|
$
|
223
|
|
|
$
|
207
|
|
Accounts payable and accrued liabilities
|
—
|
|
|
17
|
|
||
Other current liabilities
|
145
|
|
|
129
|
|
(in millions)
|
June 30,
2017 |
|
December 31,
2016 |
||||
Other current assets
|
$
|
349
|
|
|
$
|
371
|
|
Other assets
|
106
|
|
|
83
|
|
||
Other long-term liabilities
|
3
|
|
|
4
|
|
(in millions)
|
June 30,
2017 |
|
December 31,
2016 |
||||
Derecognized net service receivables and EIP receivables
|
$
|
2,422
|
|
|
$
|
2,502
|
|
Other current assets
|
572
|
|
|
578
|
|
||
of which, deferred purchase price
|
570
|
|
|
576
|
|
||
Other long-term assets
|
106
|
|
|
83
|
|
||
of which, deferred purchase price
|
106
|
|
|
83
|
|
||
Accounts payable and accrued liabilities
|
—
|
|
|
17
|
|
||
Other current liabilities
|
145
|
|
|
129
|
|
||
Other long-term liabilities
|
3
|
|
|
4
|
|
||
Net cash proceeds since inception
|
1,952
|
|
|
2,030
|
|
||
Of which:
|
|
|
|
||||
Change in net cash proceeds during the year-to-date period
|
(78
|
)
|
|
536
|
|
||
Net cash proceeds funded by reinvested collections
|
2,030
|
|
|
1,494
|
|
(in millions)
|
Spectrum Licenses
|
||
Balance at December 31, 2016
|
$
|
27,014
|
|
Spectrum license acquisitions
|
8,130
|
|
|
Spectrum licenses transferred to held for sale
|
(87
|
)
|
|
Costs to clear spectrum
|
3
|
|
|
Balance at June 30, 2017
|
$
|
35,060
|
|
|
Level within the Fair Value Hierarchy
|
|
June 30, 2017
|
|
December 31, 2016
|
||||||||||||
(in millions)
|
|
Carrying Amount
|
|
Fair Value
|
|
Carrying Amount
|
|
Fair Value
|
|||||||||
Assets:
|
|
|
|
|
|
|
|
|
|
||||||||
Deferred purchase price assets
|
3
|
|
$
|
676
|
|
|
$
|
676
|
|
|
$
|
659
|
|
|
$
|
659
|
|
Liabilities:
|
|
|
|
|
|
|
|
|
|
||||||||
Guarantee liabilities
|
3
|
|
124
|
|
|
124
|
|
|
135
|
|
|
135
|
|
|
Level within the Fair Value Hierarchy
|
|
June 30, 2017
|
|
December 31, 2016
|
||||||||||||
(in millions)
|
|
Principal Amount
|
|
Fair Value
|
|
Principal Amount
|
|
Fair Value
|
|||||||||
Liabilities:
|
|
|
|
|
|
|
|
|
|
||||||||
Senior Notes to third parties
|
1
|
|
$
|
11,850
|
|
|
$
|
12,691
|
|
|
$
|
18,600
|
|
|
$
|
19,584
|
|
Senior Notes to affiliates
|
2
|
|
7,000
|
|
|
7,243
|
|
|
—
|
|
|
—
|
|
||||
Senior Reset Notes to affiliates
|
2
|
|
3,100
|
|
|
3,343
|
|
|
5,600
|
|
|
5,955
|
|
||||
Incremental Term Loan Facility to affiliates
|
2
|
|
4,000
|
|
|
4,000
|
|
|
—
|
|
|
—
|
|
||||
Senior Secured Term Loans
|
2
|
|
—
|
|
|
—
|
|
|
1,980
|
|
|
2,005
|
|
(in millions)
|
December 31,
2016 |
|
Issuances and Borrowings
(1)
|
|
Note Redemptions
(1)
|
|
Extinguishments
(1)
|
|
Other
(2)
|
|
June 30,
2017 |
||||||||||||
Short-term debt
|
$
|
354
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
(20
|
)
|
|
$
|
188
|
|
|
$
|
522
|
|
Long-term debt
|
21,832
|
|
|
1,495
|
|
|
(8,365
|
)
|
|
(1,947
|
)
|
|
191
|
|
|
13,206
|
|
||||||
Total debt to third parties
|
22,186
|
|
|
1,495
|
|
|
(8,365
|
)
|
|
(1,967
|
)
|
|
379
|
|
|
13,728
|
|
||||||
Short-term debt to affiliates
|
—
|
|
|
680
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
680
|
|
||||||
Long-term debt to affiliates
|
5,600
|
|
|
8,485
|
|
|
—
|
|
|
—
|
|
|
1
|
|
|
14,086
|
|
||||||
Total debt to affiliates
|
5,600
|
|
|
9,165
|
|
|
—
|
|
|
—
|
|
|
1
|
|
|
14,766
|
|
||||||
Total debt
|
$
|
27,786
|
|
|
$
|
10,660
|
|
|
$
|
(8,365
|
)
|
|
$
|
(1,967
|
)
|
|
$
|
380
|
|
|
$
|
28,494
|
|
(1)
|
Issuances and borrowings, note redemptions and extinguishments are recorded net of related issuance costs, discounts and premiums. Issuances and borrowings for Short-term debt to affiliates represents net outstanding borrowings on our senior secured revolving credit facility.
|
(2)
|
Other includes:
$298 million
issuances of short-term debt related to vendor financing arrangements, of which
$290 million
is related to financing of property and equipment. During the
six months ended
June 30, 2017
, we repaid
$292 million
under the vendor financing arrangements. As of
June 30, 2017
, vendor financing arrangements totaled
$6 million
. Vendor financing arrangements are included in
Short-term debt
within
Total current liabilities
in our
Condensed Consolidated Balance Sheets
. Additional activity in Other includes capital leases and the amortization of discounts and premiums. As of
June 30, 2017
and
December 31, 2016
, capital leases outstanding totaled
$1.8 billion
and
$1.4 billion
, respectively.
|
(in millions)
|
Principal Issuances
|
|
Issuance Costs
|
|
Net proceeds from issuance of long-term debt
|
||||||
4.000% Senior Notes due 2022
|
$
|
500
|
|
|
$
|
2
|
|
|
$
|
498
|
|
5.125% Senior Notes due 2025
|
500
|
|
|
2
|
|
|
498
|
|
|||
5.375% Senior Notes due 2027
|
500
|
|
|
1
|
|
|
499
|
|
|||
Total
|
$
|
1,500
|
|
|
$
|
5
|
|
|
$
|
1,495
|
|
(in millions)
|
Principal Amount
|
|
Write-off of premiums, discounts and issuance costs
(1)
|
|
Call Penalties
(1) (2)
|
|
Redemption
Date |
|
Redemption Price
|
|||||||
6.625% Senior Notes due 2020
|
$
|
1,000
|
|
|
$
|
(45
|
)
|
|
$
|
22
|
|
|
February 10, 2017
|
|
102.208
|
%
|
5.250% Senior Notes due 2018
|
500
|
|
|
1
|
|
|
7
|
|
|
March 4, 2017
|
|
101.313
|
%
|
|||
6.250% Senior Notes due 2021
|
1,750
|
|
|
(71
|
)
|
|
55
|
|
|
April 1, 2017
|
|
103.125
|
%
|
|||
6.464% Senior Notes due 2019
|
1,250
|
|
|
—
|
|
|
—
|
|
|
April 28, 2017
|
|
100.000
|
%
|
|||
6.542% Senior Notes due 2020
|
1,250
|
|
|
—
|
|
|
21
|
|
|
April 28, 2017
|
|
101.636
|
%
|
|||
6.633% Senior Notes due 2021
|
1,250
|
|
|
—
|
|
|
41
|
|
|
April 28, 2017
|
|
103.317
|
%
|
|||
6.731% Senior Notes due 2022
|
1,250
|
|
|
—
|
|
|
42
|
|
|
April 28, 2017
|
|
103.366
|
%
|
|||
Total note redemptions
|
$
|
8,250
|
|
|
$
|
(115
|
)
|
|
$
|
188
|
|
|
|
|
|
(1)
|
Write-off of premiums, discounts, issuance costs and call penalties are included in
Other expense, net
in our
Condensed Consolidated Statements of Comprehensive Income
. Write-off of premiums, discounts and issuance costs are included in
Other, net
within
Net cash provided by operating activities
in our
Condensed Consolidated Statements of Cash Flows
.
|
(2)
|
The call penalty is the excess paid over the principal amount. Call penalties are included within
Net cash provided by operating activities
in our
Condensed Consolidated Statements of Cash Flows
.
|
(in millions)
|
Net proceeds from issuance of long-term debt
|
|
Extinguishments
|
|
Write-off of discounts and issuance costs
(1)
|
||||||
LIBOR plus 2.00% Senior Secured Term Loan due 2022
|
$
|
2,000
|
|
|
$
|
—
|
|
|
$
|
—
|
|
LIBOR plus 2.25% Senior Secured Term Loan due 2024
|
2,000
|
|
|
—
|
|
|
—
|
|
|||
LIBOR plus 2.750% Senior Secured Term Loan
|
—
|
|
|
(1,980
|
)
|
|
13
|
|
|||
Total
|
$
|
4,000
|
|
|
$
|
(1,980
|
)
|
|
$
|
13
|
|
(1)
|
Write-off of discounts and issuance costs are included in
Other expense, net
in our
Condensed Consolidated Statements of Comprehensive Income
and
Other, net
within
Net cash provided by operating activities
in our
Condensed Consolidated Statements of Cash Flows
.
|
(in millions)
|
Principal Issuances (Redemptions)
|
|
Discounts
(1)
|
|
Net proceeds from issuance of long-term debt
|
||||||
4.000% Senior Notes due 2022
|
$
|
1,000
|
|
|
$
|
(23
|
)
|
|
$
|
977
|
|
5.125% Senior Notes due 2025
|
1,250
|
|
|
(28
|
)
|
|
1,222
|
|
|||
5.375% Senior Notes due 2025
|
750
|
|
|
(28
|
)
|
|
722
|
|
|||
6.288% Senior Reset Notes due 2019
|
(1,250
|
)
|
|
—
|
|
|
(1,250
|
)
|
|||
6.366% Senior Reset Notes due 2020
|
(1,250
|
)
|
|
—
|
|
|
(1,250
|
)
|
|||
Total
|
$
|
500
|
|
|
$
|
(79
|
)
|
|
$
|
421
|
|
(1)
|
Discounts reduce
Proceeds from borrowing on revolving credit facility
and are included within
Net cash (used in) provided by financing activities
in our
Condensed Consolidated Statements of Cash Flows
.
|
(in millions)
|
Principal Issuances
|
|
Premium
|
|
Net proceeds from issuance of long-term debt
|
||||||
5.300% Senior Notes due 2021
|
$
|
2,000
|
|
|
$
|
—
|
|
|
$
|
2,000
|
|
6.000% Senior Notes due 2024
|
1,350
|
|
|
40
|
|
|
1,390
|
|
|||
6.000% Senior Notes due 2024
|
650
|
|
|
24
|
|
|
674
|
|
|||
Total
|
$
|
4,000
|
|
|
$
|
64
|
|
|
$
|
4,064
|
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||
(in millions, except shares and per share amounts)
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||||||
Net income
|
$
|
581
|
|
|
$
|
225
|
|
|
$
|
1,279
|
|
|
$
|
704
|
|
Less: Dividends on mandatory convertible preferred stock
|
(14
|
)
|
|
(14
|
)
|
|
(28
|
)
|
|
(28
|
)
|
||||
Net income attributable to common stockholders - basic
|
567
|
|
|
211
|
|
|
1,251
|
|
|
676
|
|
||||
Add: Dividends related to mandatory convertible preferred stock
|
14
|
|
|
—
|
|
|
28
|
|
|
—
|
|
||||
Net income attributable to common stockholders - diluted
|
$
|
581
|
|
|
$
|
211
|
|
|
$
|
1,279
|
|
|
$
|
676
|
|
|
|
|
|
|
|
|
|
||||||||
Weighted average shares outstanding - basic
|
830,971,528
|
|
|
822,434,490
|
|
|
829,356,255
|
|
|
820,933,126
|
|
||||
Effect of dilutive securities:
|
|
|
|
|
|
|
|
||||||||
Outstanding stock options and unvested stock awards
|
7,247,653
|
|
|
7,318,466
|
|
|
9,260,131
|
|
|
8,728,927
|
|
||||
Mandatory convertible preferred stock
|
32,237,266
|
|
|
—
|
|
|
32,237,266
|
|
|
—
|
|
||||
Weighted average shares outstanding - diluted
|
870,456,447
|
|
|
829,752,956
|
|
|
870,853,652
|
|
|
829,662,053
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Earnings per share - basic
|
$
|
0.68
|
|
|
$
|
0.26
|
|
|
$
|
1.51
|
|
|
$
|
0.82
|
|
Earnings per share - diluted
|
$
|
0.67
|
|
|
$
|
0.25
|
|
|
$
|
1.47
|
|
|
$
|
0.81
|
|
|
|
|
|
|
|
|
|
||||||||
Potentially dilutive securities:
|
|
|
|
|
|
|
|
||||||||
Outstanding stock options and unvested stock awards
|
48,397
|
|
|
307,573
|
|
|
71,734
|
|
|
465,765
|
|
||||
Mandatory convertible preferred stock
|
—
|
|
|
32,237,266
|
|
|
—
|
|
|
32,237,266
|
|
(in millions)
|
Operating Leases
|
|
Purchase Commitments
|
||||
Year ending June 30,
|
|
|
|
||||
2018
|
$
|
2,397
|
|
|
$
|
2,133
|
|
2019
|
2,132
|
|
|
1,166
|
|
||
2020
|
1,829
|
|
|
988
|
|
||
2021
|
1,452
|
|
|
721
|
|
||
2022
|
1,116
|
|
|
648
|
|
||
Thereafter
|
2,260
|
|
|
837
|
|
||
Total
|
$
|
11,186
|
|
|
$
|
6,493
|
|
(in millions)
|
Parent
|
|
Issuer
|
|
Guarantor Subsidiaries
|
|
Non-Guarantor Subsidiaries
|
|
Consolidating and Eliminating Adjustments
|
|
Consolidated
|
||||||||||||
Assets
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Current assets
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Cash and cash equivalents
|
$
|
43
|
|
|
$
|
1
|
|
|
$
|
121
|
|
|
$
|
16
|
|
|
$
|
—
|
|
|
$
|
181
|
|
Accounts receivable, net
|
—
|
|
|
—
|
|
|
1,485
|
|
|
234
|
|
|
—
|
|
|
1,719
|
|
||||||
Equipment installment plan receivables, net
|
—
|
|
|
—
|
|
|
2,060
|
|
|
—
|
|
|
—
|
|
|
2,060
|
|
||||||
Accounts receivable from affiliates
|
—
|
|
|
—
|
|
|
32
|
|
|
—
|
|
|
—
|
|
|
32
|
|
||||||
Inventories
|
—
|
|
|
—
|
|
|
1,208
|
|
|
—
|
|
|
—
|
|
|
1,208
|
|
||||||
Other current assets
|
—
|
|
|
—
|
|
|
1,010
|
|
|
570
|
|
|
—
|
|
|
1,580
|
|
||||||
Total current assets
|
43
|
|
|
1
|
|
|
5,916
|
|
|
820
|
|
|
—
|
|
|
6,780
|
|
||||||
Property and equipment, net
(1)
|
—
|
|
|
—
|
|
|
21,083
|
|
|
340
|
|
|
—
|
|
|
21,423
|
|
||||||
Goodwill
|
—
|
|
|
—
|
|
|
1,683
|
|
|
—
|
|
|
—
|
|
|
1,683
|
|
||||||
Spectrum licenses
|
—
|
|
|
—
|
|
|
35,060
|
|
|
—
|
|
|
—
|
|
|
35,060
|
|
||||||
Other intangible assets, net
|
—
|
|
|
—
|
|
|
296
|
|
|
—
|
|
|
—
|
|
|
296
|
|
||||||
Investments in subsidiaries, net
|
19,272
|
|
|
37,056
|
|
|
—
|
|
|
—
|
|
|
(56,328
|
)
|
|
—
|
|
||||||
Intercompany receivables
|
299
|
|
|
9,367
|
|
|
—
|
|
|
—
|
|
|
(9,666
|
)
|
|
—
|
|
||||||
Equipment installment plan receivables due after one year, net
|
—
|
|
|
—
|
|
|
1,102
|
|
|
—
|
|
|
—
|
|
|
1,102
|
|
||||||
Other assets
|
—
|
|
|
3
|
|
|
507
|
|
|
305
|
|
|
—
|
|
|
815
|
|
||||||
Total assets
|
$
|
19,614
|
|
|
$
|
46,427
|
|
|
$
|
65,647
|
|
|
$
|
1,465
|
|
|
$
|
(65,994
|
)
|
|
$
|
67,159
|
|
Liabilities and Stockholders' Equity
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Current liabilities
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Accounts payable and accrued liabilities
|
$
|
—
|
|
|
$
|
261
|
|
|
$
|
5,705
|
|
|
$
|
259
|
|
|
$
|
—
|
|
|
$
|
6,225
|
|
Payables to affiliates
|
—
|
|
|
119
|
|
|
36
|
|
|
—
|
|
|
—
|
|
|
155
|
|
||||||
Short-term debt
|
—
|
|
|
5
|
|
|
517
|
|
|
—
|
|
|
—
|
|
|
522
|
|
||||||
Short-term debt to affiliates
|
—
|
|
|
680
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
680
|
|
||||||
Deferred revenue
|
—
|
|
|
—
|
|
|
851
|
|
|
—
|
|
|
—
|
|
|
851
|
|
||||||
Other current liabilities
|
—
|
|
|
—
|
|
|
230
|
|
|
165
|
|
|
—
|
|
|
395
|
|
||||||
Total current liabilities
|
—
|
|
|
1,065
|
|
|
7,339
|
|
|
424
|
|
|
—
|
|
|
8,828
|
|
||||||
Long-term debt
|
—
|
|
|
11,915
|
|
|
1,291
|
|
|
—
|
|
|
—
|
|
|
13,206
|
|
||||||
Long-term debt to affiliates
|
—
|
|
|
14,086
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
14,086
|
|
||||||
Tower obligations
(1)
|
—
|
|
|
—
|
|
|
396
|
|
|
2,210
|
|
|
—
|
|
|
2,606
|
|
||||||
Deferred tax liabilities
|
—
|
|
|
—
|
|
|
5,188
|
|
|
—
|
|
|
—
|
|
|
5,188
|
|
||||||
Deferred rent expense
|
—
|
|
|
—
|
|
|
2,660
|
|
|
—
|
|
|
—
|
|
|
2,660
|
|
||||||
Negative carrying value of subsidiaries, net
|
—
|
|
|
—
|
|
|
567
|
|
|
—
|
|
|
(567
|
)
|
|
—
|
|
||||||
Intercompany payables
|
—
|
|
|
—
|
|
|
9,445
|
|
|
221
|
|
|
(9,666
|
)
|
|
—
|
|
||||||
Other long-term liabilities
|
—
|
|
|
89
|
|
|
878
|
|
|
4
|
|
|
—
|
|
|
971
|
|
||||||
Total long-term liabilities
|
—
|
|
|
26,090
|
|
|
20,425
|
|
|
2,435
|
|
|
(10,233
|
)
|
|
38,717
|
|
||||||
Total stockholders' equity (deficit)
|
19,614
|
|
|
19,272
|
|
|
37,883
|
|
|
(1,394
|
)
|
|
(55,761
|
)
|
|
19,614
|
|
||||||
Total liabilities and stockholders' equity
|
$
|
19,614
|
|
|
$
|
46,427
|
|
|
$
|
65,647
|
|
|
$
|
1,465
|
|
|
$
|
(65,994
|
)
|
|
$
|
67,159
|
|
(1)
|
Assets and liabilities for Non-Guarantor Subsidiaries are primarily included in VIEs related to the 2012 Tower Transaction. See Note 8 – Tower Obligations included in the Annual Report on Form 10-K for the year ended December 31, 2016.
|
(in millions)
|
Parent
|
|
Issuer
|
|
Guarantor Subsidiaries
|
|
Non-Guarantor Subsidiaries
|
|
Consolidating and Eliminating Adjustments
|
|
Consolidated
|
||||||||||||
Assets
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Current assets
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Cash and cash equivalents
|
$
|
358
|
|
|
$
|
2,733
|
|
|
$
|
2,342
|
|
|
$
|
67
|
|
|
$
|
—
|
|
|
$
|
5,500
|
|
Accounts receivable, net
|
—
|
|
|
—
|
|
|
1,675
|
|
|
221
|
|
|
—
|
|
|
1,896
|
|
||||||
Equipment installment plan receivables, net
|
—
|
|
|
—
|
|
|
1,930
|
|
|
—
|
|
|
—
|
|
|
1,930
|
|
||||||
Accounts receivable from affiliates
|
—
|
|
|
—
|
|
|
40
|
|
|
—
|
|
|
—
|
|
|
40
|
|
||||||
Inventories
|
—
|
|
|
—
|
|
|
1,111
|
|
|
—
|
|
|
—
|
|
|
1,111
|
|
||||||
Asset purchase deposit
|
—
|
|
|
—
|
|
|
2,203
|
|
|
—
|
|
|
—
|
|
|
2,203
|
|
||||||
Other current assets
|
—
|
|
|
—
|
|
|
972
|
|
|
565
|
|
|
—
|
|
|
1,537
|
|
||||||
Total current assets
|
358
|
|
|
2,733
|
|
|
10,273
|
|
|
853
|
|
|
—
|
|
|
14,217
|
|
||||||
Property and equipment, net
(1)
|
—
|
|
|
—
|
|
|
20,568
|
|
|
375
|
|
|
—
|
|
|
20,943
|
|
||||||
Goodwill
|
—
|
|
|
—
|
|
|
1,683
|
|
|
—
|
|
|
—
|
|
|
1,683
|
|
||||||
Spectrum licenses
|
—
|
|
|
—
|
|
|
27,014
|
|
|
—
|
|
|
—
|
|
|
27,014
|
|
||||||
Other intangible assets, net
|
—
|
|
|
—
|
|
|
376
|
|
|
—
|
|
|
—
|
|
|
376
|
|
||||||
Investments in subsidiaries, net
|
17,682
|
|
|
35,095
|
|
|
—
|
|
|
—
|
|
|
(52,777
|
)
|
|
—
|
|
||||||
Intercompany receivables
|
196
|
|
|
6,826
|
|
|
—
|
|
|
—
|
|
|
(7,022
|
)
|
|
—
|
|
||||||
Equipment installment plan receivables due after one year, net
|
—
|
|
|
—
|
|
|
984
|
|
|
—
|
|
|
—
|
|
|
984
|
|
||||||
Other assets
|
—
|
|
|
7
|
|
|
600
|
|
|
262
|
|
|
(195
|
)
|
|
674
|
|
||||||
Total assets
|
$
|
18,236
|
|
|
$
|
44,661
|
|
|
$
|
61,498
|
|
|
$
|
1,490
|
|
|
$
|
(59,994
|
)
|
|
$
|
65,891
|
|
Liabilities and Stockholders' Equity
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Current liabilities
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Accounts payable and accrued liabilities
|
$
|
—
|
|
|
$
|
423
|
|
|
$
|
6,474
|
|
|
$
|
255
|
|
|
$
|
—
|
|
|
$
|
7,152
|
|
Payables to affiliates
|
—
|
|
|
79
|
|
|
46
|
|
|
—
|
|
|
—
|
|
|
125
|
|
||||||
Short-term debt
|
—
|
|
|
20
|
|
|
334
|
|
|
—
|
|
|
—
|
|
|
354
|
|
||||||
Deferred revenue
|
—
|
|
|
—
|
|
|
986
|
|
|
—
|
|
|
—
|
|
|
986
|
|
||||||
Other current liabilities
|
—
|
|
|
—
|
|
|
258
|
|
|
147
|
|
|
—
|
|
|
405
|
|
||||||
Total current liabilities
|
—
|
|
|
522
|
|
|
8,098
|
|
|
402
|
|
|
—
|
|
|
9,022
|
|
||||||
Long-term debt
|
—
|
|
|
20,741
|
|
|
1,091
|
|
|
—
|
|
|
—
|
|
|
21,832
|
|
||||||
Long-term debt to affiliates
|
—
|
|
|
5,600
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
5,600
|
|
||||||
Tower obligations
(1)
|
—
|
|
|
—
|
|
|
400
|
|
|
2,221
|
|
|
—
|
|
|
2,621
|
|
||||||
Deferred tax liabilities
|
—
|
|
|
—
|
|
|
5,133
|
|
|
—
|
|
|
(195
|
)
|
|
4,938
|
|
||||||
Deferred rent expense
|
—
|
|
|
—
|
|
|
2,616
|
|
|
—
|
|
|
—
|
|
|
2,616
|
|
||||||
Negative carrying value of subsidiaries, net
|
—
|
|
|
—
|
|
|
568
|
|
|
—
|
|
|
(568
|
)
|
|
—
|
|
||||||
Intercompany payables
|
—
|
|
|
—
|
|
|
6,785
|
|
|
237
|
|
|
(7,022
|
)
|
|
—
|
|
||||||
Other long-term liabilities
|
—
|
|
|
116
|
|
|
906
|
|
|
4
|
|
|
—
|
|
|
1,026
|
|
||||||
Total long-term liabilities
|
—
|
|
|
26,457
|
|
|
17,499
|
|
|
2,462
|
|
|
(7,785
|
)
|
|
38,633
|
|
||||||
Total stockholders' equity (deficit)
|
18,236
|
|
|
17,682
|
|
|
35,901
|
|
|
(1,374
|
)
|
|
(52,209
|
)
|
|
18,236
|
|
||||||
Total liabilities and stockholders' equity
|
$
|
18,236
|
|
|
$
|
44,661
|
|
|
$
|
61,498
|
|
|
$
|
1,490
|
|
|
$
|
(59,994
|
)
|
|
$
|
65,891
|
|
(1)
|
Assets and liabilities for Non-Guarantor Subsidiaries are primarily included in VIEs related to the 2012 Tower Transaction. See Note 8 – Tower Obligations included in the Annual Report on Form 10-K for the year ended December 31, 2016.
|
(in millions)
|
Parent
|
|
Issuer
|
|
Guarantor Subsidiaries
|
|
Non-Guarantor Subsidiaries
|
|
Consolidating and Eliminating Adjustments
|
|
Consolidated
|
||||||||||||
Revenues
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Service revenues
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
7,127
|
|
|
$
|
528
|
|
|
$
|
(210
|
)
|
|
$
|
7,445
|
|
Equipment revenues
|
—
|
|
|
—
|
|
|
2,575
|
|
|
—
|
|
|
(69
|
)
|
|
2,506
|
|
||||||
Other revenues
|
—
|
|
|
—
|
|
|
216
|
|
|
51
|
|
|
(5
|
)
|
|
262
|
|
||||||
Total revenues
|
—
|
|
|
—
|
|
|
9,918
|
|
|
579
|
|
|
(284
|
)
|
|
10,213
|
|
||||||
Operating expenses
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Cost of services, exclusive of depreciation and amortization shown separately below
|
—
|
|
|
—
|
|
|
1,512
|
|
|
6
|
|
|
—
|
|
|
1,518
|
|
||||||
Cost of equipment sales
|
—
|
|
|
—
|
|
|
2,664
|
|
|
251
|
|
|
(69
|
)
|
|
2,846
|
|
||||||
Selling, general and administrative
|
—
|
|
|
—
|
|
|
2,933
|
|
|
197
|
|
|
(215
|
)
|
|
2,915
|
|
||||||
Depreciation and amortization
|
—
|
|
|
—
|
|
|
1,501
|
|
|
18
|
|
|
—
|
|
|
1,519
|
|
||||||
Gains on disposal of spectrum licenses
|
—
|
|
|
—
|
|
|
(1
|
)
|
|
—
|
|
|
—
|
|
|
(1
|
)
|
||||||
Total operating expense
|
—
|
|
|
—
|
|
|
8,609
|
|
|
472
|
|
|
(284
|
)
|
|
8,797
|
|
||||||
Operating income
|
—
|
|
|
—
|
|
|
1,309
|
|
|
107
|
|
|
—
|
|
|
1,416
|
|
||||||
Other income (expense)
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Interest expense
|
—
|
|
|
(194
|
)
|
|
(23
|
)
|
|
(48
|
)
|
|
—
|
|
|
(265
|
)
|
||||||
Interest expense to affiliates
|
—
|
|
|
(132
|
)
|
|
(5
|
)
|
|
—
|
|
|
6
|
|
|
(131
|
)
|
||||||
Interest income
|
—
|
|
|
8
|
|
|
4
|
|
|
—
|
|
|
(6
|
)
|
|
6
|
|
||||||
Other expense, net
|
—
|
|
|
(91
|
)
|
|
(1
|
)
|
|
—
|
|
|
—
|
|
|
(92
|
)
|
||||||
Total other expense, net
|
—
|
|
|
(409
|
)
|
|
(25
|
)
|
|
(48
|
)
|
|
—
|
|
|
(482
|
)
|
||||||
Income (loss) before income taxes
|
—
|
|
|
(409
|
)
|
|
1,284
|
|
|
59
|
|
|
—
|
|
|
934
|
|
||||||
Income tax expense
|
—
|
|
|
—
|
|
|
(333
|
)
|
|
(20
|
)
|
|
—
|
|
|
(353
|
)
|
||||||
Earnings of subsidiaries
|
581
|
|
|
990
|
|
|
14
|
|
|
—
|
|
|
(1,585
|
)
|
|
—
|
|
||||||
Net income
|
581
|
|
|
581
|
|
|
965
|
|
|
39
|
|
|
(1,585
|
)
|
|
581
|
|
||||||
Dividends on preferred stock
|
(14
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(14
|
)
|
||||||
Net income attributable to common stockholders
|
$
|
567
|
|
|
$
|
581
|
|
|
$
|
965
|
|
|
$
|
39
|
|
|
$
|
(1,585
|
)
|
|
$
|
567
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Net Income
|
$
|
581
|
|
|
$
|
581
|
|
|
$
|
965
|
|
|
$
|
39
|
|
|
$
|
(1,585
|
)
|
|
$
|
581
|
|
Other comprehensive income (loss), net of tax
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Other comprehensive income (loss), net of tax
|
1
|
|
|
1
|
|
|
1
|
|
|
(1
|
)
|
|
(1
|
)
|
|
1
|
|
||||||
Total comprehensive income
|
$
|
582
|
|
|
$
|
582
|
|
|
$
|
966
|
|
|
$
|
38
|
|
|
$
|
(1,586
|
)
|
|
$
|
582
|
|
(in millions)
|
Parent
|
|
Issuer
|
|
Guarantor Subsidiaries (As adjusted - See Note 1)
|
|
Non-Guarantor Subsidiaries
|
|
Consolidating and Eliminating Adjustments
|
|
Consolidated (As adjusted - See Note 1)
|
||||||||||||
Revenues
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Service revenues
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
6,574
|
|
|
$
|
517
|
|
|
$
|
(203
|
)
|
|
$
|
6,888
|
|
Equipment revenues
|
—
|
|
|
—
|
|
|
2,298
|
|
|
—
|
|
|
(110
|
)
|
|
2,188
|
|
||||||
Other revenues
|
—
|
|
|
—
|
|
|
167
|
|
(1)
|
49
|
|
|
(5
|
)
|
|
211
|
|
||||||
Total revenues
|
—
|
|
|
—
|
|
|
9,039
|
|
(1)
|
566
|
|
|
(318
|
)
|
|
9,287
|
|
||||||
Operating expenses
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Cost of services, exclusive of depreciation and amortization shown separately below
|
—
|
|
|
—
|
|
|
1,423
|
|
|
6
|
|
|
—
|
|
|
1,429
|
|
||||||
Cost of equipment sales
|
—
|
|
|
—
|
|
|
2,477
|
|
|
251
|
|
|
(109
|
)
|
|
2,619
|
|
||||||
Selling, general and administrative
|
—
|
|
|
—
|
|
|
2,764
|
|
|
217
|
|
|
(209
|
)
|
|
2,772
|
|
||||||
Depreciation and amortization
|
—
|
|
|
—
|
|
|
1,555
|
|
|
20
|
|
|
—
|
|
|
1,575
|
|
||||||
Cost of MetroPCS business combination
|
—
|
|
|
—
|
|
|
59
|
|
|
—
|
|
|
—
|
|
|
59
|
|
||||||
Total operating expense
|
—
|
|
|
—
|
|
|
8,278
|
|
|
494
|
|
|
(318
|
)
|
|
8,454
|
|
||||||
Operating income
|
—
|
|
|
—
|
|
|
761
|
|
(1)
|
72
|
|
|
—
|
|
|
833
|
|
||||||
Other income (expense)
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Interest expense
|
—
|
|
|
(304
|
)
|
|
(18
|
)
|
|
(46
|
)
|
|
—
|
|
|
(368
|
)
|
||||||
Interest expense to affiliates
|
—
|
|
|
(93
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(93
|
)
|
||||||
Interest income
|
—
|
|
|
8
|
|
|
(5
|
)
|
(1)
|
—
|
|
|
—
|
|
|
3
|
|
||||||
Other expense, net
|
—
|
|
|
—
|
|
|
(3
|
)
|
|
—
|
|
|
—
|
|
|
(3
|
)
|
||||||
Total other expense, net
|
—
|
|
|
(389
|
)
|
|
(26
|
)
|
(1)
|
(46
|
)
|
|
—
|
|
|
(461
|
)
|
||||||
Income (loss) before income taxes
|
—
|
|
|
(389
|
)
|
|
735
|
|
|
26
|
|
|
—
|
|
|
372
|
|
||||||
Income tax expense
|
—
|
|
|
—
|
|
|
(138
|
)
|
|
(9
|
)
|
|
—
|
|
|
(147
|
)
|
||||||
Earnings (loss) of subsidiaries
|
225
|
|
|
614
|
|
|
(1
|
)
|
|
—
|
|
|
(838
|
)
|
|
—
|
|
||||||
Net income
|
225
|
|
|
225
|
|
|
596
|
|
|
17
|
|
|
(838
|
)
|
|
225
|
|
||||||
Dividends on preferred stock
|
(14
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(14
|
)
|
||||||
Net income attributable to common stockholders
|
$
|
211
|
|
|
$
|
225
|
|
|
$
|
596
|
|
|
$
|
17
|
|
|
$
|
(838
|
)
|
|
$
|
211
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Net Income
|
$
|
225
|
|
|
$
|
225
|
|
|
$
|
596
|
|
|
$
|
17
|
|
|
$
|
(838
|
)
|
|
$
|
225
|
|
Other comprehensive income, net of tax
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Other comprehensive income, net of tax
|
3
|
|
|
3
|
|
|
3
|
|
|
—
|
|
|
(6
|
)
|
|
3
|
|
||||||
Total comprehensive income
|
$
|
228
|
|
|
$
|
228
|
|
|
$
|
599
|
|
|
$
|
17
|
|
|
$
|
(844
|
)
|
|
$
|
228
|
|
(1)
|
The amortized imputed discount on EIP receivables previously recognized as Interest income has been retrospectively reclassified as Other revenues. See
Note 1 - Basis of Presentation
for further detail.
|
(in millions)
|
Parent
|
|
Issuer
|
|
Guarantor Subsidiaries
|
|
Non-Guarantor Subsidiaries
|
|
Consolidating and Eliminating Adjustments
|
|
Consolidated
|
||||||||||||
Revenues
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Service revenues
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
14,145
|
|
|
$
|
1,053
|
|
|
$
|
(424
|
)
|
|
$
|
14,774
|
|
Equipment revenues
|
—
|
|
|
—
|
|
|
4,718
|
|
|
—
|
|
|
(169
|
)
|
|
4,549
|
|
||||||
Other revenues
|
—
|
|
|
—
|
|
|
410
|
|
|
103
|
|
|
(10
|
)
|
|
503
|
|
||||||
Total revenues
|
—
|
|
|
—
|
|
|
19,273
|
|
|
1,156
|
|
|
(603
|
)
|
|
19,826
|
|
||||||
Operating expenses
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Cost of services, exclusive of depreciation and amortization shown separately below
|
—
|
|
|
—
|
|
|
2,914
|
|
|
12
|
|
|
—
|
|
|
2,926
|
|
||||||
Cost of equipment sales
|
—
|
|
|
—
|
|
|
5,204
|
|
|
497
|
|
|
(169
|
)
|
|
5,532
|
|
||||||
Selling, general and administrative
|
—
|
|
|
—
|
|
|
5,861
|
|
|
443
|
|
|
(434
|
)
|
|
5,870
|
|
||||||
Depreciation and amortization
|
—
|
|
|
—
|
|
|
3,047
|
|
|
36
|
|
|
—
|
|
|
3,083
|
|
||||||
Cost of MetroPCS business combination
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Gains on disposal of spectrum licenses
|
—
|
|
|
—
|
|
|
(38
|
)
|
|
—
|
|
|
—
|
|
|
(38
|
)
|
||||||
Total operating expenses
|
—
|
|
|
—
|
|
|
16,988
|
|
|
988
|
|
|
(603
|
)
|
|
17,373
|
|
||||||
Operating income
|
—
|
|
|
—
|
|
|
2,285
|
|
|
168
|
|
|
—
|
|
|
2,453
|
|
||||||
Other income (expense)
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Interest expense
|
—
|
|
|
(458
|
)
|
|
(50
|
)
|
|
(96
|
)
|
|
—
|
|
|
(604
|
)
|
||||||
Interest expense to affiliates
|
—
|
|
|
(231
|
)
|
|
(12
|
)
|
|
—
|
|
|
12
|
|
|
(231
|
)
|
||||||
Interest income
|
—
|
|
|
17
|
|
|
8
|
|
|
—
|
|
|
(12
|
)
|
|
13
|
|
||||||
Other expense, net
|
—
|
|
|
(88
|
)
|
|
(2
|
)
|
|
—
|
|
|
—
|
|
|
(90
|
)
|
||||||
Total other expense, net
|
—
|
|
|
(760
|
)
|
|
(56
|
)
|
|
(96
|
)
|
|
—
|
|
|
(912
|
)
|
||||||
Income (loss) before income taxes
|
—
|
|
|
(760
|
)
|
|
2,229
|
|
|
72
|
|
|
—
|
|
|
1,541
|
|
||||||
Income tax expense
|
—
|
|
|
—
|
|
|
(237
|
)
|
|
(25
|
)
|
|
—
|
|
|
(262
|
)
|
||||||
Earnings (loss) of subsidiaries
|
1,279
|
|
|
2,039
|
|
|
(17
|
)
|
|
—
|
|
|
(3,301
|
)
|
|
—
|
|
||||||
Net income
|
1,279
|
|
|
1,279
|
|
|
1,975
|
|
|
47
|
|
|
(3,301
|
)
|
|
1,279
|
|
||||||
Dividends on preferred stock
|
(28
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(28
|
)
|
||||||
Net income attributable to common stockholders
|
$
|
1,251
|
|
|
$
|
1,279
|
|
|
$
|
1,975
|
|
|
$
|
47
|
|
|
$
|
(3,301
|
)
|
|
$
|
1,251
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Net Income
|
$
|
1,279
|
|
|
$
|
1,279
|
|
|
$
|
1,975
|
|
|
$
|
47
|
|
|
$
|
(3,301
|
)
|
|
$
|
1,279
|
|
Other comprehensive income, net of tax
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Other comprehensive income, net of tax
|
2
|
|
|
2
|
|
|
2
|
|
|
—
|
|
|
(4
|
)
|
|
2
|
|
||||||
Total comprehensive income
|
$
|
1,281
|
|
|
$
|
1,281
|
|
|
$
|
1,977
|
|
|
$
|
47
|
|
|
$
|
(3,305
|
)
|
|
$
|
1,281
|
|
(in millions)
|
Parent
|
|
Issuer
|
|
Guarantor Subsidiaries (As adjusted - See Note 1)
|
|
Non-Guarantor Subsidiaries
|
|
Consolidating and Eliminating Adjustments
|
|
Consolidated (As adjusted - See Note 1)
|
||||||||||||
Revenues
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Service revenues
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
12,861
|
|
|
$
|
980
|
|
|
$
|
(375
|
)
|
|
$
|
13,466
|
|
Equipment revenues
|
—
|
|
|
—
|
|
|
4,279
|
|
|
—
|
|
|
(240
|
)
|
|
4,039
|
|
||||||
Other revenues
|
—
|
|
|
—
|
|
|
358
|
|
(1)
|
97
|
|
|
(9
|
)
|
|
446
|
|
||||||
Total revenues
|
—
|
|
|
—
|
|
|
17,498
|
|
(1)
|
1,077
|
|
|
(624
|
)
|
|
17,951
|
|
||||||
Operating expenses
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Cost of services, exclusive of depreciation and amortization shown separately below
|
—
|
|
|
—
|
|
|
2,838
|
|
|
12
|
|
|
—
|
|
|
2,850
|
|
||||||
Cost of equipment sales
|
—
|
|
|
—
|
|
|
4,764
|
|
|
468
|
|
|
(239
|
)
|
|
4,993
|
|
||||||
Selling, general and administrative
|
—
|
|
|
—
|
|
|
5,488
|
|
|
418
|
|
|
(385
|
)
|
|
5,521
|
|
||||||
Depreciation and amortization
|
—
|
|
|
—
|
|
|
3,087
|
|
|
40
|
|
|
—
|
|
|
3,127
|
|
||||||
Cost of MetroPCS business combination
|
—
|
|
|
—
|
|
|
95
|
|
|
—
|
|
|
—
|
|
|
95
|
|
||||||
Gains on disposal of spectrum licenses
|
—
|
|
|
—
|
|
|
(636
|
)
|
|
—
|
|
|
—
|
|
|
(636
|
)
|
||||||
Total operating expenses
|
—
|
|
|
—
|
|
|
15,636
|
|
|
938
|
|
|
(624
|
)
|
|
15,950
|
|
||||||
Operating income
|
—
|
|
|
—
|
|
|
1,862
|
|
(1)
|
139
|
|
|
—
|
|
|
2,001
|
|
||||||
Other income (expense)
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Interest expense
|
—
|
|
|
(578
|
)
|
|
(35
|
)
|
|
(94
|
)
|
|
—
|
|
|
(707
|
)
|
||||||
Interest expense to affiliates
|
—
|
|
|
(172
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(172
|
)
|
||||||
Interest income
|
—
|
|
|
16
|
|
|
(10
|
)
|
(1)
|
—
|
|
|
—
|
|
|
6
|
|
||||||
Other expense, net
|
—
|
|
|
—
|
|
|
(5
|
)
|
|
—
|
|
|
—
|
|
|
(5
|
)
|
||||||
Total other expense, net
|
—
|
|
|
(734
|
)
|
|
(50
|
)
|
(1)
|
(94
|
)
|
|
—
|
|
|
(878
|
)
|
||||||
Income (loss) before income taxes
|
—
|
|
|
(734
|
)
|
|
1,812
|
|
|
45
|
|
|
—
|
|
|
1,123
|
|
||||||
Income tax expense
|
—
|
|
|
—
|
|
|
(401
|
)
|
|
(18
|
)
|
|
—
|
|
|
(419
|
)
|
||||||
Earnings (loss) of subsidiaries
|
704
|
|
|
1,438
|
|
|
(11
|
)
|
|
—
|
|
|
(2,131
|
)
|
|
—
|
|
||||||
Net income
|
704
|
|
|
704
|
|
|
1,400
|
|
|
27
|
|
|
(2,131
|
)
|
|
704
|
|
||||||
Dividends on preferred stock
|
(28
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(28
|
)
|
||||||
Net income attributable to common stockholders
|
$
|
676
|
|
|
$
|
704
|
|
|
$
|
1,400
|
|
|
$
|
27
|
|
|
$
|
(2,131
|
)
|
|
$
|
676
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Net income
|
$
|
704
|
|
|
$
|
704
|
|
|
$
|
1,400
|
|
|
$
|
27
|
|
|
$
|
(2,131
|
)
|
|
$
|
704
|
|
Other comprehensive income, net of tax
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Other comprehensive income, net of tax
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Total comprehensive income
|
$
|
704
|
|
|
$
|
704
|
|
|
$
|
1,400
|
|
|
$
|
27
|
|
|
$
|
(2,131
|
)
|
|
$
|
704
|
|
(1)
|
The amortized imputed discount on EIP receivables previously recognized as Interest income has been retrospectively reclassified as Other revenues. See
Note 1 - Basis of Presentation
for further detail.
|
(in millions)
|
Parent
|
|
Issuer
|
|
Guarantor Subsidiaries
|
|
Non-Guarantor Subsidiaries
|
|
Consolidating and Eliminating Adjustments
|
|
Consolidated
|
||||||||||||
Operating activities
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Net cash provided by (used in) operating activities
|
$
|
1
|
|
|
$
|
(9,785
|
)
|
|
$
|
11,663
|
|
|
$
|
30
|
|
|
$
|
(80
|
)
|
|
$
|
1,829
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Investing activities
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Purchases of property and equipment
|
—
|
|
|
—
|
|
|
(1,347
|
)
|
|
—
|
|
|
—
|
|
|
(1,347
|
)
|
||||||
Purchases of spectrum licenses and other intangible assets, including deposits
|
—
|
|
|
—
|
|
|
(5,791
|
)
|
|
—
|
|
|
—
|
|
|
(5,791
|
)
|
||||||
Equity investment in subsidiary
|
(308
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
308
|
|
|
—
|
|
||||||
Other, net
|
—
|
|
|
—
|
|
|
5
|
|
|
—
|
|
|
—
|
|
|
5
|
|
||||||
Net cash used in investing activities
|
(308
|
)
|
|
—
|
|
|
(7,133
|
)
|
|
—
|
|
|
308
|
|
|
(7,133
|
)
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Financing activities
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Proceeds from issuance of long-term debt
|
—
|
|
|
4,485
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
4,485
|
|
||||||
Proceeds from borrowing on revolving credit facility, net
|
—
|
|
|
1,855
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,855
|
|
||||||
Repayments of revolving credit facility
|
—
|
|
|
—
|
|
|
(1,175
|
)
|
|
—
|
|
|
—
|
|
|
(1,175
|
)
|
||||||
Repayments of capital lease obligations
|
—
|
|
|
—
|
|
|
(119
|
)
|
|
—
|
|
|
—
|
|
|
(119
|
)
|
||||||
Repayments of short-term debt for purchases of inventory, property and equipment, net
|
—
|
|
|
—
|
|
|
(292
|
)
|
|
—
|
|
|
—
|
|
|
(292
|
)
|
||||||
Repayments of long-term debt
|
—
|
|
|
—
|
|
|
(6,750
|
)
|
|
—
|
|
|
—
|
|
|
(6,750
|
)
|
||||||
Equity investment from parent
|
—
|
|
|
308
|
|
|
—
|
|
|
—
|
|
|
(308
|
)
|
|
—
|
|
||||||
Tax withholdings on share-based awards
|
—
|
|
|
—
|
|
|
(3
|
)
|
|
—
|
|
|
—
|
|
|
(3
|
)
|
||||||
Intercompany dividend paid
|
—
|
|
|
—
|
|
|
—
|
|
|
(80
|
)
|
|
80
|
|
|
—
|
|
||||||
Dividends on preferred stock
|
(14
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(14
|
)
|
||||||
Other, net
|
4
|
|
|
—
|
|
|
(7
|
)
|
|
—
|
|
|
—
|
|
|
(3
|
)
|
||||||
Net cash (used in) provided by financing activities
|
(10
|
)
|
|
6,648
|
|
|
(8,346
|
)
|
|
(80
|
)
|
|
(228
|
)
|
|
(2,016
|
)
|
||||||
Change in cash and cash equivalents
|
(317
|
)
|
|
(3,137
|
)
|
|
(3,816
|
)
|
|
(50
|
)
|
|
—
|
|
|
(7,320
|
)
|
||||||
Cash and cash equivalents
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Beginning of period
|
360
|
|
|
3,138
|
|
|
3,937
|
|
|
66
|
|
|
—
|
|
|
7,501
|
|
||||||
End of period
|
$
|
43
|
|
|
$
|
1
|
|
|
$
|
121
|
|
|
$
|
16
|
|
|
$
|
—
|
|
|
$
|
181
|
|
(in millions)
|
Parent
|
|
Issuer
|
|
Guarantor Subsidiaries
|
|
Non-Guarantor Subsidiaries
|
|
Consolidating and Eliminating Adjustments
|
|
Consolidated
|
||||||||||||
Operating activities
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Net cash provided by (used in) operating activities
|
$
|
3
|
|
|
$
|
(1,783
|
)
|
|
$
|
3,612
|
|
|
$
|
11
|
|
|
$
|
(75
|
)
|
|
$
|
1,768
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Investing activities
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Purchases of property and equipment
|
—
|
|
|
—
|
|
|
(1,349
|
)
|
|
—
|
|
|
—
|
|
|
(1,349
|
)
|
||||||
Purchases of spectrum licenses and other intangible assets, including deposits
|
—
|
|
|
—
|
|
|
(2,245
|
)
|
|
—
|
|
|
—
|
|
|
(2,245
|
)
|
||||||
Sales of short-term investments
|
—
|
|
|
2,000
|
|
|
923
|
|
|
—
|
|
|
—
|
|
|
2,923
|
|
||||||
Other, net
|
—
|
|
|
—
|
|
|
4
|
|
|
—
|
|
|
—
|
|
|
4
|
|
||||||
Net cash provided by (used in) investing activities
|
—
|
|
|
2,000
|
|
|
(2,667
|
)
|
|
—
|
|
|
—
|
|
|
(667
|
)
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Financing activities
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Proceeds from issuance of long-term debt
|
—
|
|
|
997
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
997
|
|
||||||
Repayments of capital lease obligations
|
—
|
|
|
—
|
|
|
(43
|
)
|
|
—
|
|
|
—
|
|
|
(43
|
)
|
||||||
Repayments of short-term debt for purchases of inventory, property and equipment, net
|
—
|
|
|
—
|
|
|
(150
|
)
|
|
—
|
|
|
—
|
|
|
(150
|
)
|
||||||
Repayments of long-term debt
|
—
|
|
|
—
|
|
|
(5
|
)
|
|
—
|
|
|
—
|
|
|
(5
|
)
|
||||||
Tax withholdings on share-based awards
|
—
|
|
|
—
|
|
|
(3
|
)
|
|
—
|
|
|
—
|
|
|
(3
|
)
|
||||||
Intercompany dividend paid
|
—
|
|
|
—
|
|
|
—
|
|
|
(75
|
)
|
|
75
|
|
|
—
|
|
||||||
Dividends on preferred stock
|
(14
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(14
|
)
|
||||||
Other, net
|
13
|
|
|
—
|
|
|
(5
|
)
|
|
—
|
|
|
—
|
|
|
8
|
|
||||||
Net cash (used in) provided by financing activities
|
(1
|
)
|
|
997
|
|
|
(206
|
)
|
|
(75
|
)
|
|
75
|
|
|
790
|
|
||||||
Change in cash and cash equivalents
|
2
|
|
|
1,214
|
|
|
739
|
|
|
(64
|
)
|
|
—
|
|
|
1,891
|
|
||||||
Cash and cash equivalents
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Beginning of period
|
365
|
|
|
1,469
|
|
|
1,700
|
|
|
113
|
|
|
—
|
|
|
3,647
|
|
||||||
End of period
|
$
|
367
|
|
|
$
|
2,683
|
|
|
$
|
2,439
|
|
|
$
|
49
|
|
|
$
|
—
|
|
|
$
|
5,538
|
|
(in millions)
|
Parent
|
|
Issuer
|
|
Guarantor Subsidiaries
|
|
Non-Guarantor Subsidiaries
|
|
Consolidating and Eliminating Adjustments
|
|
Consolidated
|
||||||||||||
Operating activities
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Net cash provided by (used in) operating activities
|
$
|
2
|
|
|
$
|
(14,875
|
)
|
|
$
|
18,466
|
|
|
$
|
29
|
|
|
$
|
(80
|
)
|
|
$
|
3,542
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Investing activities
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Purchases of property and equipment
|
—
|
|
|
—
|
|
|
(2,875
|
)
|
|
—
|
|
|
—
|
|
|
(2,875
|
)
|
||||||
Purchases of spectrum licenses and other intangible assets, including deposits
|
—
|
|
|
—
|
|
|
(5,805
|
)
|
|
—
|
|
|
—
|
|
|
(5,805
|
)
|
||||||
Equity investment in subsidiary
|
(308
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
308
|
|
|
—
|
|
||||||
Other, net
|
—
|
|
|
—
|
|
|
(3
|
)
|
|
—
|
|
|
—
|
|
|
(3
|
)
|
||||||
Net cash used in investing activities
|
(308
|
)
|
|
—
|
|
|
(8,683
|
)
|
|
—
|
|
|
308
|
|
|
(8,683
|
)
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Financing activities
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Proceeds from issuance of long-term debt
|
—
|
|
|
9,980
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
9,980
|
|
||||||
Proceeds from borrowing on revolving credit facility, net
|
—
|
|
|
1,855
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,855
|
|
||||||
Repayments of revolving credit facility
|
—
|
|
|
—
|
|
|
(1,175
|
)
|
|
—
|
|
|
—
|
|
|
(1,175
|
)
|
||||||
Repayments of capital lease obligations
|
—
|
|
|
—
|
|
|
(209
|
)
|
|
—
|
|
|
—
|
|
|
(209
|
)
|
||||||
Repayments of short-term debt for purchases of inventory, property and equipment, net
|
—
|
|
|
—
|
|
|
(292
|
)
|
|
—
|
|
|
—
|
|
|
(292
|
)
|
||||||
Repayments of long-term debt
|
—
|
|
|
—
|
|
|
(10,230
|
)
|
|
—
|
|
|
—
|
|
|
(10,230
|
)
|
||||||
Equity investment from parent
|
—
|
|
|
308
|
|
|
—
|
|
|
—
|
|
|
(308
|
)
|
|
—
|
|
||||||
Tax withholdings on share-based awards
|
—
|
|
|
—
|
|
|
(95
|
)
|
|
—
|
|
|
—
|
|
|
(95
|
)
|
||||||
Intercompany dividend paid
|
—
|
|
|
—
|
|
|
—
|
|
|
(80
|
)
|
|
80
|
|
|
—
|
|
||||||
Dividends on preferred stock
|
(28
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(28
|
)
|
||||||
Other, net
|
19
|
|
|
—
|
|
|
(3
|
)
|
|
—
|
|
|
—
|
|
|
16
|
|
||||||
Net cash (used in) provided by financing activities
|
(9
|
)
|
|
12,143
|
|
|
(12,004
|
)
|
|
(80
|
)
|
|
(228
|
)
|
|
(178
|
)
|
||||||
Change in cash and cash equivalents
|
(315
|
)
|
|
(2,732
|
)
|
|
(2,221
|
)
|
|
(51
|
)
|
|
—
|
|
|
(5,319
|
)
|
||||||
Cash and cash equivalents
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Beginning of period
|
358
|
|
|
2,733
|
|
|
2,342
|
|
|
67
|
|
|
—
|
|
|
5,500
|
|
||||||
End of period
|
$
|
43
|
|
|
$
|
1
|
|
|
$
|
121
|
|
|
$
|
16
|
|
|
$
|
—
|
|
|
$
|
181
|
|
(in millions)
|
Parent
|
|
Issuer
|
|
Guarantor Subsidiaries
|
|
Non-Guarantor Subsidiaries
|
|
Consolidating and Eliminating Adjustments
|
|
Consolidated
|
||||||||||||
Operating activities
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Net cash provided by (used in) operating activities
|
$
|
3
|
|
|
$
|
(2,081
|
)
|
|
$
|
4,895
|
|
|
$
|
51
|
|
|
$
|
(75
|
)
|
|
$
|
2,793
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Investing activities
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Purchases of property and equipment
|
—
|
|
|
—
|
|
|
(2,684
|
)
|
|
—
|
|
|
—
|
|
|
(2,684
|
)
|
||||||
Purchases of spectrum licenses and other intangible assets, including deposits
|
—
|
|
|
—
|
|
|
(2,839
|
)
|
|
—
|
|
|
—
|
|
|
(2,839
|
)
|
||||||
Sales of short-term investments
|
—
|
|
|
2,000
|
|
|
998
|
|
|
—
|
|
|
—
|
|
|
2,998
|
|
||||||
Other, net
|
—
|
|
|
—
|
|
|
(2
|
)
|
|
—
|
|
|
—
|
|
|
(2
|
)
|
||||||
Net cash provided by (used in) investing activities
|
—
|
|
|
2,000
|
|
|
(4,527
|
)
|
|
—
|
|
|
—
|
|
|
(2,527
|
)
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Financing activities
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Proceeds from issuance of long-term debt
|
—
|
|
|
997
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
997
|
|
||||||
Repayments of capital lease obligations
|
—
|
|
|
—
|
|
|
(79
|
)
|
|
—
|
|
|
—
|
|
|
(79
|
)
|
||||||
Repayments of short-term debt for purchases of inventory, property and equipment, net
|
—
|
|
|
—
|
|
|
(150
|
)
|
|
—
|
|
|
—
|
|
|
(150
|
)
|
||||||
Repayments of long-term debt
|
—
|
|
|
—
|
|
|
(10
|
)
|
|
—
|
|
|
—
|
|
|
(10
|
)
|
||||||
Tax withholdings on share-based awards
|
—
|
|
|
—
|
|
|
(49
|
)
|
|
—
|
|
|
—
|
|
|
(49
|
)
|
||||||
Intercompany dividend paid
|
—
|
|
|
—
|
|
|
—
|
|
|
(75
|
)
|
|
75
|
|
|
—
|
|
||||||
Dividends on preferred stock
|
(28
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(28
|
)
|
||||||
Other, net
|
14
|
|
|
—
|
|
|
(5
|
)
|
|
—
|
|
|
—
|
|
|
9
|
|
||||||
Net cash (used in) provided by financing activities
|
(14
|
)
|
|
997
|
|
|
(293
|
)
|
|
(75
|
)
|
|
75
|
|
|
690
|
|
||||||
Change in cash and cash equivalents
|
(11
|
)
|
|
916
|
|
|
75
|
|
|
(24
|
)
|
|
—
|
|
|
956
|
|
||||||
Cash and cash equivalents
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Beginning of period
|
378
|
|
|
1,767
|
|
|
2,364
|
|
|
73
|
|
|
—
|
|
|
4,582
|
|
||||||
End of period
|
$
|
367
|
|
|
$
|
2,683
|
|
|
$
|
2,439
|
|
|
$
|
49
|
|
|
$
|
—
|
|
|
$
|
5,538
|
|
•
|
adverse economic or political conditions in the U.S. and international markets;
|
•
|
competition in the wireless services market, including new competitors entering the industry as technologies converge;
|
•
|
the effects of any future merger or acquisition involving us, as well as the effects of mergers or acquisitions in the technology, media and telecommunications industry;
|
•
|
challenges in implementing our business strategies or funding our wireless operations, including payment for additional spectrum or network upgrades;
|
•
|
the possibility that we may be unable to renew our spectrum licenses on attractive terms or acquire new spectrum licenses at reasonable costs and terms;
|
•
|
difficulties in managing growth in wireless data services, including network quality;
|
•
|
material changes in available technology;
|
•
|
the timing, scope and financial impact of our deployment of advanced network and business technologies;
|
•
|
the impact on our networks and business from major technology equipment failures;
|
•
|
breaches of our and/or our third party vendors’ networks, information technology (“IT”) and data security;
|
•
|
natural disasters, terrorist attacks or similar incidents;
|
•
|
existing or future litigation;
|
•
|
any changes in the regulatory environments in which we operate, including any increase in restrictions on the ability to operate our networks;
|
•
|
any disruption or failure of our third parties’ or key suppliers’ provisioning of products or services;
|
•
|
material adverse changes in labor matters, including labor campaigns, negotiations or additional organizing activity, and any resulting financial, operational and/or reputational impact;
|
•
|
the ability to make payments on our debt or to repay our existing indebtedness when due;
|
•
|
adverse change in the ratings of our debt securities or adverse conditions in the credit markets;
|
•
|
changes in accounting assumptions that regulatory agencies, including the Securities and Exchange Commission (“SEC”), may require, which could result in an impact on earnings; and
|
•
|
changes in tax laws, regulations and existing standards and the resolution of disputes with any taxing jurisdictions.
|
•
|
A narrative explanation from the perspective of management of our financial condition, results of operations, cash flows, liquidity and certain other factors that may affect future results;
|
•
|
Context to the financial statements; and
|
•
|
Information that allows assessment of the likelihood that past performance is indicative of future performance.
|
•
|
Total revenues of
$10.2 billion
for the
three months ended
June 30, 2017
, increased
$926 million
, or
10%
. Total revenues of
$19.8 billion
for the
six months ended
June 30, 2017
, increased
$1.9 billion
, or
10%
. These increases were primarily driven by growth in service and equipment revenues as further discussed below. On September 1, 2016, we sold our marketing and distribution rights to certain existing T-Mobile co-branded customers to a current Mobile Virtual Network Operator (“MVNO”) partner for nominal consideration (the “MVNO Transaction”). The MVNO Transaction shifted Branded postpaid revenues to Wholesale revenues, but did not materially impact total revenues.
|
•
|
Service revenues of
$7.4 billion
for the
three months ended
June 30, 2017
, increased
$557 million
, or
8%
. Service revenues of
$14.8 billion
for the
six months ended
June 30, 2017
, increased
$1.3 billion
, or
10%
. These increases were primarily due to growth in our average branded customer base as a result of strong customer response to our Un-carrier initiatives and the success of our MetroPCS brand.
|
•
|
Equipment revenues of
$2.5 billion
for the
three months ended
June 30, 2017
, increased
$318 million
, or
15%
. Equipment revenues of
$4.5 billion
for the
six months ended
June 30, 2017
, increased
$510 million
, or
13%
. These increases were primarily due to higher average revenue per device sold and an increase from the purchase of leased devices at the end of the lease term.
|
•
|
Operating income of
$1.4 billion
for the
three months ended
June 30, 2017
, increased
$583 million
, or
70%
, primarily due to increases in total service revenues, lower depreciation and amortization and better cost management, particularly in cost of equipment sales and selling, general and administrative expenses. Operating income of
$2.5 billion
for the
six months ended
June 30, 2017
, increased
$452 million
, or
23%
, primarily due to increases in total
|
•
|
Net income of
$581 million
for the
three months ended
June 30, 2017
, increased
$356 million
, or
158%
. Net income of
$1.3 billion
for the
six months ended
June 30, 2017
, increased
$575 million
, or
82%
. These increases were primarily due to higher operating income driven by the factors described above. Additionally, net income for the
six months ended
June 30, 2017
, increased due to a tax benefit related to a reduction in the valuation allowance against deferred tax assets. Net income for the
six months ended
June 30, 2016
, included
$389 million
of net, after-tax gains on disposal of spectrum licenses compared to
$23 million
of net, after-tax gains on disposal of spectrum licenses for the
six months ended
June 30, 2017
.
|
•
|
Adjusted EBITDA (see “Performance Measures”), a non-GAAP financial measure, of
$3.0 billion
for the
three months ended
June 30, 2017
, increased
$483 million
, or
19%
. Adjusted EBITDA of
$5.7 billion
for the
six months ended
June 30, 2017
, increased
$337 million
, or
6%
. These increases were primarily due to higher operating income driven by the factors described above. Additionally, Adjusted EBITDA for the
six months ended
June 30, 2017
, was impacted by lower gains on disposal of spectrum licenses. Adjusted EBITDA included pre-tax spectrum gains of
$38 million
and
$636 million
in the
six months ended
June 30, 2017
and
2016
, respectively.
|
•
|
Net cash provided by operating activities of
$1.8 billion
for the
three months ended
June 30, 2017
, increased
$61 million
, or
3%
. Net cash provided by operating activities of
$3.5 billion
for the
six months ended
June 30, 2017
, increased
$749 million
, or
27%
(see “Liquidity and Capital Resources”).
|
•
|
Free Cash Flow, a non-GAAP financial measure, of
$482 million
for the
three months ended
June 30, 2017
, increased
$63 million
, or
15%
. Free Cash Flow of
$667 million
for the
six months ended
June 30, 2017
, increased
$558 million
, or
512%
(see “Liquidity and Capital Resources”).
|
|
Three Months Ended June 30,
|
|
Change
|
|
Six Months Ended
June 30,
|
|
Change
|
||||||||||||||||||||||
|
2017
|
|
2016
|
|
$
|
|
%
|
|
2017
|
|
2016
|
|
$
|
|
%
|
||||||||||||||
(in millions)
|
|
|
(As Adjusted - See Note 1)
|
|
|
|
|
|
|
|
(As Adjusted - See Note 1)
|
|
|
|
|
||||||||||||||
Revenues
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Branded postpaid revenues
|
$
|
4,820
|
|
|
$
|
4,509
|
|
|
$
|
311
|
|
|
7
|
%
|
|
$
|
9,545
|
|
|
$
|
8,811
|
|
|
$
|
734
|
|
|
8
|
%
|
Branded prepaid revenues
|
2,334
|
|
|
2,119
|
|
|
215
|
|
|
10
|
%
|
|
4,633
|
|
|
4,144
|
|
|
489
|
|
|
12
|
%
|
||||||
Wholesale revenues
|
234
|
|
|
207
|
|
|
27
|
|
|
13
|
%
|
|
504
|
|
|
407
|
|
|
97
|
|
|
24
|
%
|
||||||
Roaming and other service revenues
|
57
|
|
|
53
|
|
|
4
|
|
|
8
|
%
|
|
92
|
|
|
104
|
|
|
(12
|
)
|
|
(12
|
)%
|
||||||
Total service revenues
|
7,445
|
|
|
6,888
|
|
|
557
|
|
|
8
|
%
|
|
14,774
|
|
|
13,466
|
|
|
1,308
|
|
|
10
|
%
|
||||||
Equipment revenues
|
2,506
|
|
|
2,188
|
|
|
318
|
|
|
15
|
%
|
|
4,549
|
|
|
4,039
|
|
|
510
|
|
|
13
|
%
|
||||||
Other revenues
|
262
|
|
|
211
|
|
|
51
|
|
|
24
|
%
|
|
503
|
|
|
446
|
|
|
57
|
|
|
13
|
%
|
||||||
Total revenues
|
10,213
|
|
|
9,287
|
|
|
926
|
|
|
10
|
%
|
|
19,826
|
|
|
17,951
|
|
|
1,875
|
|
|
10
|
%
|
||||||
Operating expenses
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Cost of services, exclusive of depreciation and amortization shown separately below
|
1,518
|
|
|
1,429
|
|
|
89
|
|
|
6
|
%
|
|
2,926
|
|
|
2,850
|
|
|
76
|
|
|
3
|
%
|
||||||
Cost of equipment sales
|
2,846
|
|
|
2,619
|
|
|
227
|
|
|
9
|
%
|
|
5,532
|
|
|
4,993
|
|
|
539
|
|
|
11
|
%
|
||||||
Selling, general and administrative
|
2,915
|
|
|
2,772
|
|
|
143
|
|
|
5
|
%
|
|
5,870
|
|
|
5,521
|
|
|
349
|
|
|
6
|
%
|
||||||
Depreciation and amortization
|
1,519
|
|
|
1,575
|
|
|
(56
|
)
|
|
(4
|
)%
|
|
3,083
|
|
|
3,127
|
|
|
(44
|
)
|
|
(1
|
)%
|
||||||
Cost of MetroPCS business combination
|
—
|
|
|
59
|
|
|
(59
|
)
|
|
(100
|
)%
|
|
—
|
|
|
95
|
|
|
(95
|
)
|
|
(100
|
)%
|
||||||
Gains on disposal of spectrum licenses
|
(1
|
)
|
|
—
|
|
|
(1
|
)
|
|
(100
|
)%
|
|
(38
|
)
|
|
(636
|
)
|
|
598
|
|
|
(94
|
)%
|
||||||
Total operating expense
|
8,797
|
|
|
8,454
|
|
|
343
|
|
|
4
|
%
|
|
17,373
|
|
|
15,950
|
|
|
1,423
|
|
|
9
|
%
|
||||||
Operating income
|
1,416
|
|
|
833
|
|
|
583
|
|
|
70
|
%
|
|
2,453
|
|
|
2,001
|
|
|
452
|
|
|
23
|
%
|
||||||
Other income (expense)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Interest expense
|
(265
|
)
|
|
(368
|
)
|
|
103
|
|
|
(28
|
)%
|
|
(604
|
)
|
|
(707
|
)
|
|
103
|
|
|
(15
|
)%
|
||||||
Interest expense to affiliates
|
(131
|
)
|
|
(93
|
)
|
|
(38
|
)
|
|
41
|
%
|
|
(231
|
)
|
|
(172
|
)
|
|
(59
|
)
|
|
34
|
%
|
||||||
Interest income
|
6
|
|
|
3
|
|
|
3
|
|
|
100
|
%
|
|
13
|
|
|
6
|
|
|
7
|
|
|
117
|
%
|
||||||
Other expense, net
|
(92
|
)
|
|
(3
|
)
|
|
(89
|
)
|
|
NM
|
|
|
(90
|
)
|
|
(5
|
)
|
|
(85
|
)
|
|
NM
|
|
||||||
Total other expense, net
|
(482
|
)
|
|
(461
|
)
|
|
(21
|
)
|
|
5
|
%
|
|
(912
|
)
|
|
(878
|
)
|
|
(34
|
)
|
|
4
|
%
|
||||||
Income before income taxes
|
934
|
|
|
372
|
|
|
562
|
|
|
151
|
%
|
|
1,541
|
|
|
1,123
|
|
|
418
|
|
|
37
|
%
|
||||||
Income tax expense
|
(353
|
)
|
|
(147
|
)
|
|
(206
|
)
|
|
140
|
%
|
|
(262
|
)
|
|
(419
|
)
|
|
157
|
|
|
(37
|
)%
|
||||||
Net income
|
$
|
581
|
|
|
$
|
225
|
|
|
$
|
356
|
|
|
158
|
%
|
|
$
|
1,279
|
|
|
$
|
704
|
|
|
$
|
575
|
|
|
82
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Net cash provided by operating activities
|
$
|
1,829
|
|
|
$
|
1,768
|
|
|
$
|
61
|
|
|
3
|
%
|
|
$
|
3,542
|
|
|
$
|
2,793
|
|
|
$
|
749
|
|
|
27
|
%
|
Net cash used in investing activities
|
(7,133
|
)
|
|
(667
|
)
|
|
(6,466
|
)
|
|
969
|
%
|
|
(8,683
|
)
|
|
(2,527
|
)
|
|
(6,156
|
)
|
|
244
|
%
|
||||||
Net cash (used in) provided by financing activities
|
(2,016
|
)
|
|
790
|
|
|
(2,806
|
)
|
|
(355
|
)%
|
|
(178
|
)
|
|
690
|
|
|
(868
|
)
|
|
(126
|
)%
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Non-GAAP Financial Measures
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Adjusted EBITDA
|
$
|
3,012
|
|
|
$
|
2,529
|
|
|
$
|
483
|
|
|
19
|
%
|
|
$
|
5,680
|
|
|
$
|
5,343
|
|
|
$
|
337
|
|
|
6
|
%
|
Free Cash Flow
|
482
|
|
|
419
|
|
|
63
|
|
|
15
|
%
|
|
667
|
|
|
109
|
|
|
558
|
|
|
512
|
%
|
•
|
Growth in the customer base driven by strong customer response to our Un-carrier initiatives and promotions for services and devices, including the growing success of our business channel, @Work; and
|
•
|
The positive impact from a decrease in the non-cash net revenue deferral for Data Stash; partially offset by
|
•
|
The MVNO Transaction.
|
•
|
Growth in the customer base driven by strong customer response to our Un-carrier initiatives and promotions for services and devices, including the growing success of our business channel, @Work; and
|
•
|
Higher branded postpaid phone ARPU, including the positive impact from a decrease in the non-cash net revenue deferral for Data Stash, partially offset by the MVNO Transaction.
|
•
|
Higher average branded prepaid customers primarily driven by the expansion into new markets; and
|
•
|
Higher branded prepaid ARPU driven by the success of our MetroPCS brand; partially offset by
|
•
|
The impact from the optimization of our third-party distribution channels.
|
•
|
An increase of $213 million in device sales revenues, primarily from:
|
•
|
Higher average revenue per device sold due to an increase in the high-end device mix driven by an iconic device launch and a decrease in promotional spending; partially offset by
|
•
|
A
4%
decrease in the number of devices sold. Device sales revenue is recognized at the time of sale;
|
•
|
An increase of $182 million from the purchase of previously leased devices at the end of the lease term; and
|
•
|
An increase of $45 million in SIM and Upgrade revenue; partially offset by
|
•
|
A decrease of $133 million in lease revenues from declining JUMP! On Demand population due to shifting focus to our EIP financing option beginning in the first quarter of 2016.
|
•
|
An increase of $335 million in device sales revenues, primarily from:
|
•
|
Higher average revenue per device sold due to an increase in the high-end device mix by an iconic device launch; and
|
•
|
A
2%
increase in the number of devices sold. Device sales revenue is recognized at the time of sale;
|
•
|
An increase of $229 million from the purchase of previously leased devices at the end of the lease term;
|
•
|
An increase of $95 million in SIM and Upgrade revenue; partially offset by
|
•
|
A decrease of $151 million from declining JUMP! On Demand population due to shifting focus to our EIP financing option beginning in the first quarter of 2016.
|
•
|
Higher lease expenses associated with network expansion; and
|
•
|
Higher international roaming primarily driven by Mobile without Borders; partially offset by
|
•
|
Lower long distance and toll costs as we continue to renegotiate contracts with vendors.
|
•
|
Higher lease expenses associated with network expansion; and
|
•
|
Higher international roaming primarily driven by Mobile without Borders; partially offset by
|
•
|
Lower long distance and toll costs as we continue to renegotiate contracts with vendors; and
|
•
|
Lower regulatory expenses related to T-Mobile ONE rate plans, inclusive of Un-carrier Next.
|
•
|
An increase of $146 million from the recognition of cost for leased devices purchased at the end of the lease term; and
|
•
|
An increase of $122 million in device cost of equipment sales, primarily due to:
|
•
|
Higher average cost per device sold due to an increase in the high-end device mix; slightly offset by
|
•
|
A
4%
decrease in the number of devices sold; partially offset by
|
•
|
A decrease of $28 million in other costs related to inventory and warranty exchange activities.
|
•
|
An increase of $417 million in device cost of equipment sales, primarily from:
|
•
|
A higher average cost per device sold due to an increase in the high-end device mix; partially offset by
|
•
|
A
2%
decrease in the number of devices sold; and
|
•
|
An increase from the recognition of cost for leased devices purchased at the end of the lease term; partially offset by
|
•
|
A decrease of $26 million in accessory cost driven by 7% volume decrease; and
|
•
|
A decrease of $39 million in other costs related to inventory and warranty exchange activities.
|
•
|
Lower depreciation expense related to our JUMP! On Demand program resulting from a lower number of devices under lease. Under our JUMP! On Demand program, the cost of a leased wireless device is depreciated over the lease term to its estimated residual value; partially offset by
|
•
|
The continued build-out of our 4G LTE network.
|
•
|
Operating income
, the components of which are discussed above, increased
$583 million
, or
70%
, for the
three months ended
and
$452 million
, or
23%
, for the
six months ended
June 30, 2017
.
|
•
|
Income tax expense
increased
$206 million
, or
140%
, for the
three months ended
and decreased
$157 million
, or
37%
, for the
six months ended
June 30, 2017
.
|
•
|
Higher income before income taxes; partially offset by
|
•
|
A lower effective tax rate. The effective tax rate was
37.8%
and
39.5%
for the
three months ended
June 30, 2017
and
2016
, respectively.
|
•
|
A lower effective tax rate. The effective tax rate was
17.0%
and
37.3%
for the
six months ended
June 30, 2017
and
2016
, respectively. The decrease in the effective income tax rate was primarily due to a reduction in the valuation allowance against deferred tax assets in certain state jurisdictions that resulted in the recognition of
$270 million
in tax benefits in the first quarter of
2017
and the recognition of an additional
$11 million
in tax benefits in the second quarter of
2017
. Total tax benefits were
$281 million
through
June 30, 2017
. The effective tax rate was further decreased by the recognition of
$60 million
of excess tax benefits related to share-based payments for the
six months ended
June 30, 2017
, compared to
$21 million
for the same period in
2016
; partially offset by
|
•
|
Higher income before income taxes.
|
•
|
Other expense, net
increased
$89 million
for the
three months ended
and
$85 million
for the
six months ended
June 30, 2017
.
|
•
|
A
$73 million
net loss recognized from the early redemption of certain Senior Notes; and
|
•
|
A
$13 million
net loss recognized from the refinancing of our outstanding Senior Secured Term Loans.
|
•
|
Interest expense
decreased
$103 million
, or
28%
,
for the
three months ended
and
$103 million
, or
15%
, for the
six months ended
June 30, 2017
, primarily from:
|
•
|
A decrease from the early redemption of our Senior Secured Term Loans and a total of
$8.3 billion
of Senior Notes; partially offset by
|
•
|
An increase from the issuance of the
$1.0 billion
of Senior Notes in April 2016; and
|
•
|
An increase from the issuance of a total of
$1.5 billion
of Senior Notes in March 2017.
|
•
|
Interest expense to affiliates
increased
$38 million
, or
41%
, for the
three months ended
and
$59 million
, or
34%
, for the
six months ended
June 30, 2017
, primarily from:
|
•
|
An increase in interest associated with a $4.0 billion secured term loan facility with DT entered into in January 2017;
|
•
|
An increase from issuance of a total of $4.0 billion in Senior Notes in May 2017; and
|
•
|
An increase on drawings on our Revolving Credit Facility; partially offset by
|
•
|
A decrease from lower interest rates through refinancing of a total of $3.0 billion of Senior Notes in April 2017.
|
|
June 30,
2017 |
|
December 31,
2016 |
|
Change
|
|||||||||
(in millions)
|
|
|
$
|
|
%
|
|||||||||
Other current assets
|
$
|
570
|
|
|
$
|
565
|
|
|
$
|
5
|
|
|
1
|
%
|
Property and equipment, net
|
340
|
|
|
375
|
|
|
(35
|
)
|
|
(9
|
)%
|
|||
Tower obligations
|
2,210
|
|
|
2,221
|
|
|
(11
|
)
|
|
—
|
%
|
|||
Total stockholders' deficit
|
(1,394
|
)
|
|
(1,374
|
)
|
|
(20
|
)
|
|
1
|
%
|
|
Three Months Ended June 30,
|
|
Change
|
|
Six Months Ended June 30,
|
|
Change
|
||||||||||||||||||||||
(in millions)
|
2017
|
|
2016
|
$
|
|
%
|
2017
|
|
2016
|
$
|
|
%
|
|||||||||||||||||
Service revenues
|
$
|
528
|
|
|
$
|
517
|
|
|
$
|
11
|
|
|
2
|
%
|
|
$
|
1,053
|
|
|
$
|
980
|
|
|
$
|
73
|
|
|
7
|
%
|
Cost of equipment sales
|
251
|
|
|
251
|
|
|
—
|
|
|
—
|
%
|
|
497
|
|
|
468
|
|
|
29
|
|
|
6
|
%
|
||||||
Selling, general and administrative
|
197
|
|
|
217
|
|
|
(20
|
)
|
|
(9
|
)%
|
|
443
|
|
|
418
|
|
|
25
|
|
|
6
|
%
|
||||||
Total comprehensive income
|
38
|
|
|
17
|
|
|
21
|
|
|
124
|
%
|
|
47
|
|
|
27
|
|
|
20
|
|
|
74
|
%
|
•
|
Higher Service revenues primarily due to the result of an increase in activity of the non-guarantor subsidiary that provides device insurance, primarily driven by growth in our customer base; partially offset by
|
•
|
Lower Selling, general and administrative expenses primarily due to a decrease in external services.
|
•
|
Higher Service revenues primarily due to the result of an increase in activity of the non-guarantor subsidiary that provides device insurance, primarily driven by growth in our customer base;
|
•
|
Higher Cost of equipment sales expenses primarily due to lower non-return fees charged to the customer; and
|
•
|
Higher Selling, general and administrative expenses primarily due to an increase in external services.
|
|
June 30,
2017 |
|
June 30,
2016 |
|
Change
|
||||||
(in thousands)
|
#
|
|
%
|
||||||||
Customers, end of period
|
|
|
|
|
|
|
|
||||
Branded postpaid phone customers
|
32,881
|
|
|
30,878
|
|
|
2,003
|
|
|
6
|
%
|
Branded postpaid mobile broadband customers
|
3,277
|
|
|
2,748
|
|
|
529
|
|
|
19
|
%
|
Total branded postpaid customers
|
36,158
|
|
|
33,626
|
|
|
2,532
|
|
|
8
|
%
|
Branded prepaid customers
|
20,293
|
|
|
18,914
|
|
|
1,379
|
|
|
7
|
%
|
Total branded customers
|
56,451
|
|
|
52,540
|
|
|
3,911
|
|
|
7
|
%
|
Wholesale customers
|
13,111
|
|
|
14,844
|
|
|
(1,733
|
)
|
|
(12
|
)%
|
Total customers, end of period
|
69,562
|
|
|
67,384
|
|
|
2,178
|
|
|
3
|
%
|
Adjustments to wholesale customers
(1)
|
(4,368
|
)
|
|
—
|
|
|
(4,368
|
)
|
|
(100
|
)%
|
(1)
|
We believe current and future regulatory changes have made the Lifeline program offered by our wholesale partners uneconomical. We will continue to support our wholesale partners offering the Lifeline program, but have excluded the Lifeline customers from our reported wholesale subscriber base resulting in the removal of 4.4 million reported wholesale customers as of the beginning of Q2 2017.
|
•
|
Higher branded postpaid phone customers driven by strong customer response to our Un-carrier initiatives and promotional activities, including the launch of DIGITS, and the growing success of our business channel, @Work, partially offset by the MVNO Transaction;
|
•
|
Higher branded prepaid customers driven by the continued success of our Metro PCS brand, continued growth from distribution expansion; and
|
•
|
Higher branded postpaid mobile broadband customers primarily due to the launch of SyncUP DRIVE
TM
.
|
|
Three Months Ended June 30,
|
|
Change
|
|
Six Months Ended June 30,
|
|
Change
|
||||||||||||||||
(in thousands)
|
2017
|
|
2016
|
#
|
|
%
|
2017
|
|
2016
|
#
|
|
%
|
|||||||||||
Net customer additions (losses)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Branded postpaid phone customers
|
786
|
|
|
646
|
|
|
140
|
|
|
22
|
%
|
|
1,584
|
|
|
1,523
|
|
|
61
|
|
|
4
|
%
|
Branded postpaid mobile broadband customers
|
31
|
|
|
244
|
|
|
(213
|
)
|
|
(87
|
)%
|
|
147
|
|
|
408
|
|
|
(261
|
)
|
|
(64
|
)%
|
Total branded postpaid customers
|
817
|
|
|
890
|
|
|
(73
|
)
|
|
(8
|
)%
|
|
1,731
|
|
|
1,931
|
|
|
(200
|
)
|
|
(10
|
)%
|
Branded prepaid customers
|
94
|
|
|
476
|
|
|
(382
|
)
|
|
(80
|
)%
|
|
480
|
|
|
1,283
|
|
|
(803
|
)
|
|
(63
|
)%
|
Total branded customers
|
911
|
|
|
1,366
|
|
|
(455
|
)
|
|
(33
|
)%
|
|
2,211
|
|
|
3,214
|
|
|
(1,003
|
)
|
|
(31
|
)%
|
Wholesale customers
(1)
|
422
|
|
|
515
|
|
|
(93
|
)
|
|
(18
|
)%
|
|
264
|
|
|
888
|
|
|
(624
|
)
|
|
(70
|
)%
|
Total net customer additions
|
1,333
|
|
|
1,881
|
|
|
(548
|
)
|
|
(29
|
)%
|
|
2,475
|
|
|
4,102
|
|
|
(1,627
|
)
|
|
(40
|
)%
|
(1)
|
We believe current and future regulatory changes have made the Lifeline program offered by our wholesale partners uneconomical. We will continue to support our wholesale partners offering the Lifeline program, but have excluded the Lifeline customers from our reported wholesale subscriber base resulting in the removal of 4.4 million reported wholesale customers as of the beginning of the second quarter of 2017.
|
•
|
Lower branded prepaid net customer additions primarily due to lower gross additions from increased competitive activity in the marketplace and higher deactivations from a growing customer base, partially offset by the continued strong performance of our MetroPCS brand; and
|
•
|
Lower branded postpaid mobile broadband net customer additions primarily due to our election to not pursue promotional tablet offers, higher deactivations resulting from churn on a growing customer base, partially offset by higher gross customer additions from the launch of SyncUP DRIVE
TM
; partially offset by
|
•
|
Higher branded postpaid phone net customer additions primarily due to a strong response to our Un-carrier initiatives and promotional activities, including the launch of DIGITS and the growing success of our business channel, @Work, and lower churn, partially offset by an increased competitive environment.
|
|
June 30,
2017 |
|
June 30,
2016 |
|
Change
|
||||||
|
|
#
|
|
%
|
|||||||
Branded postpaid customers per account
|
2.91
|
|
|
2.64
|
|
|
0.27
|
|
|
10
|
%
|
|
Three Months Ended June 30,
|
|
Bps Change
|
|
Six Months Ended June 30,
|
|
Bps Change
|
||||||||
2017
|
|
2016
|
2017
|
|
2016
|
||||||||||
Branded postpaid phone churn
|
1.10
|
%
|
|
1.27
|
%
|
|
-17 bps
|
|
1.14
|
%
|
|
1.30
|
%
|
|
-16 bps
|
Branded prepaid churn
|
3.91
|
%
|
|
3.91
|
%
|
|
0 bps
|
|
3.96
|
%
|
|
3.88
|
%
|
|
8 bps
|
•
|
Higher MetroPCS churn from increased competitive activity and maturing markets that launched in 2016; offset by
|
•
|
Optimization of our third-party distribution channels and a decrease in certain customers, which have a higher rate of branded prepaid churn.
|
(in millions, except average number of customers, ARPU and ABPU)
|
Three Months Ended June 30,
|
|
Change
|
|
Six Months Ended June 30,
|
|
Change
|
||||||||||||||||||||||
2017
|
|
2016
|
|
#
|
|
%
|
|
2017
|
|
2016
|
|
#
|
|
%
|
|||||||||||||||
Calculation of Branded Postpaid Phone ARPU
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Branded postpaid service revenues
|
$
|
4,820
|
|
|
$
|
4,509
|
|
|
$
|
311
|
|
|
7
|
%
|
|
$
|
9,545
|
|
|
$
|
8,811
|
|
|
$
|
734
|
|
|
8
|
%
|
Less: Branded postpaid mobile broadband revenues
|
(255
|
)
|
|
(193
|
)
|
|
(62
|
)
|
|
32
|
%
|
|
(480
|
)
|
|
(375
|
)
|
|
(105
|
)
|
|
28
|
%
|
||||||
Branded postpaid phone service revenues
|
$
|
4,565
|
|
|
$
|
4,316
|
|
|
$
|
249
|
|
|
6
|
%
|
|
$
|
9,065
|
|
|
$
|
8,436
|
|
|
$
|
629
|
|
|
7
|
%
|
Divided by: Average number of branded postpaid phone customers (in thousands) and number of months in period
|
32,372
|
|
|
30,537
|
|
|
1,835
|
|
|
6
|
%
|
|
31,968
|
|
|
30,128
|
|
|
1,840
|
|
|
6
|
%
|
||||||
Branded postpaid phone ARPU
|
$
|
47.01
|
|
|
$
|
47.11
|
|
|
$
|
(0.10
|
)
|
|
—
|
%
|
|
$
|
47.26
|
|
|
$
|
46.67
|
|
|
$
|
0.59
|
|
|
1
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Calculation of Branded Postpaid ABPU
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Branded postpaid service revenues
|
$
|
4,820
|
|
|
$
|
4,509
|
|
|
$
|
311
|
|
|
7
|
%
|
|
$
|
9,545
|
|
|
$
|
8,811
|
|
|
$
|
734
|
|
|
8
|
%
|
EIP billings
|
1,402
|
|
|
1,344
|
|
|
58
|
|
|
4
|
%
|
|
2,804
|
|
|
2,668
|
|
|
136
|
|
|
5
|
%
|
||||||
Lease revenues
|
234
|
|
|
367
|
|
|
(133
|
)
|
|
(36
|
)%
|
|
558
|
|
|
709
|
|
|
(151
|
)
|
|
(21
|
)%
|
||||||
Total billings for branded postpaid customers
|
$
|
6,456
|
|
|
$
|
6,220
|
|
|
$
|
236
|
|
|
4
|
%
|
|
$
|
12,907
|
|
|
$
|
12,188
|
|
|
$
|
719
|
|
|
6
|
%
|
Divided by: Average number of branded postpaid customers (in thousands) and number of months in period
|
35,636
|
|
|
33,125
|
|
|
2,511
|
|
|
8
|
%
|
|
35,188
|
|
|
32,633
|
|
|
2,555
|
|
|
8
|
%
|
||||||
Branded postpaid ABPU
|
$
|
60.40
|
|
|
$
|
62.59
|
|
|
$
|
(2.19
|
)
|
|
(3
|
)%
|
|
$
|
61.14
|
|
|
$
|
62.25
|
|
|
$
|
(1.11
|
)
|
|
(2
|
)%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Calculation of Branded Prepaid ARPU
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Branded prepaid service revenues
|
$
|
2,334
|
|
|
$
|
2,119
|
|
|
$
|
215
|
|
|
10
|
%
|
|
$
|
4,633
|
|
|
$
|
4,144
|
|
|
$
|
489
|
|
|
12
|
%
|
Divided by: Average number of branded prepaid customers (in thousands) and number of months in period
|
20,131
|
|
|
18,662
|
|
|
1,469
|
|
|
8
|
%
|
|
20,010
|
|
|
18,312
|
|
|
1,698
|
|
|
9
|
%
|
||||||
Branded prepaid ARPU
|
$
|
38.65
|
|
|
$
|
37.86
|
|
|
$
|
0.79
|
|
|
2
|
%
|
|
$
|
38.59
|
|
|
$
|
37.72
|
|
|
$
|
0.87
|
|
|
2
|
%
|
•
|
The adoption of T-Mobile ONE including taxes and fees and dilution from promotional activities and the successful launch of DIGITS; were offset by
|
•
|
A decrease in the non-cash net revenue deferral for Data Stash; and
|
•
|
The transfer of customers as part of the MVNO transaction as those customers had lower ARPU.
|
•
|
A decrease in the non-cash net revenue deferral for Data Stash; and
|
•
|
The transfer of customers as part of the MVNO transaction as those customers had lower ARPU; partially offset by
|
•
|
Dilution from promotional activities, inclusive of the successful launch of DIGITS.
|
•
|
Lower lease revenues; and
|
•
|
Growth in the branded postpaid mobile broadband customer base with lower ARPU.
|
•
|
Lower lease revenues; and
|
•
|
Growth in the branded postpaid mobile broadband customer base with lower ARPU.
|
|
Three Months Ended June 30,
|
|
Change
|
|
Six Months Ended June 30,
|
|
Change
|
||||||||||||||||||||||
(in millions)
|
2017
|
|
2016
|
|
$
|
|
%
|
|
2017
|
|
2016
|
|
$
|
|
%
|
||||||||||||||
Net income
|
$
|
581
|
|
|
$
|
225
|
|
|
$
|
356
|
|
|
158
|
%
|
|
$
|
1,279
|
|
|
$
|
704
|
|
|
$
|
575
|
|
|
82
|
%
|
Adjustments:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Interest expense
|
265
|
|
|
368
|
|
|
(103
|
)
|
|
(28
|
)%
|
|
604
|
|
|
707
|
|
|
(103
|
)
|
|
(15
|
)%
|
||||||
Interest expense to affiliates
|
131
|
|
|
93
|
|
|
38
|
|
|
41
|
%
|
|
231
|
|
|
172
|
|
|
59
|
|
|
34
|
%
|
||||||
Interest income
(1)
|
(6
|
)
|
|
(3
|
)
|
|
(3
|
)
|
|
100
|
%
|
|
(13
|
)
|
|
(6
|
)
|
|
(7
|
)
|
|
117
|
%
|
||||||
Other expense, net
|
92
|
|
|
3
|
|
|
89
|
|
|
2,967
|
%
|
|
90
|
|
|
5
|
|
|
85
|
|
|
1,700
|
%
|
||||||
Income tax expense
|
353
|
|
|
147
|
|
|
206
|
|
|
140
|
%
|
|
262
|
|
|
419
|
|
|
(157
|
)
|
|
(37
|
)%
|
||||||
Operating income
(1)
|
1,416
|
|
|
833
|
|
|
583
|
|
|
70
|
%
|
|
2,453
|
|
|
2,001
|
|
|
452
|
|
|
23
|
%
|
||||||
Depreciation and amortization
|
1,519
|
|
|
1,575
|
|
|
(56
|
)
|
|
(4
|
)%
|
|
3,083
|
|
|
3,127
|
|
|
(44
|
)
|
|
(1
|
)%
|
||||||
Cost of MetroPCS business combination
(2)
|
—
|
|
|
59
|
|
|
(59
|
)
|
|
(100
|
)%
|
|
—
|
|
|
95
|
|
|
(95
|
)
|
|
(100
|
)%
|
||||||
Stock-based compensation
(3)
|
72
|
|
|
61
|
|
|
11
|
|
|
18
|
%
|
|
139
|
|
|
114
|
|
|
25
|
|
|
22
|
%
|
||||||
Other, net
(3)
|
5
|
|
|
1
|
|
|
4
|
|
|
400
|
%
|
|
5
|
|
|
6
|
|
|
(1
|
)
|
|
(17
|
)%
|
||||||
Adjusted EBITDA
(1)
|
$
|
3,012
|
|
|
$
|
2,529
|
|
|
$
|
483
|
|
|
19
|
%
|
|
$
|
5,680
|
|
|
$
|
5,343
|
|
|
$
|
337
|
|
|
6
|
%
|
Net income margin (Net income divided by service revenues)
|
8
|
%
|
|
3
|
%
|
|
|
|
|
500 bps
|
|
|
9
|
%
|
|
5
|
%
|
|
|
|
|
400 bps
|
|
||||||
Adjusted EBITDA margin (Adjusted EBITDA divided by service revenues)
(1)
|
40
|
%
|
|
37
|
%
|
|
|
|
|
300 bps
|
|
|
38
|
%
|
|
40
|
%
|
|
|
|
|
-200 bps
|
|
(1)
|
The amortized imputed discount on EIP receivables previously recognized as Interest income has been retrospectively re-classified as Other revenues. See
Note 1 - Basis of Presentation
of the
Notes to the Condensed Consolidated Financial Statements
and table below for further detail.
|
(2)
|
The Company will no longer separately present Cost of MetroPCS business combination as it is insignificant.
|
(3)
|
Stock-based compensation includes payroll tax impacts and may not agree to stock-based compensation expense in the consolidated financial statements. Other, net may not agree to the
Condensed Consolidated Statements of Comprehensive Income
primarily due to certain non-routine operating activities, such as other special items that would not be expected to reoccur, and are therefore excluded in Adjusted EBITDA.
|
•
|
An increase in branded postpaid and prepaid service revenues primarily due to strong customer response to our Un-carrier initiatives, the ongoing success of our promotional activities, and the success of our MetroPCS brand; and
|
•
|
Lower losses on equipment; partially offset by
|
•
|
Higher selling, general and administrative expenses; and
|
•
|
Higher costs of service.
|
•
|
An increase in branded postpaid and prepaid service revenues primarily due to strong customer response to our Un-carrier initiatives, the ongoing success of our promotional activities, and the success of our MetroPCS brand; partially offset by
|
•
|
Lower gains on disposal of spectrum licenses of
$598 million
; gains on disposal were
$38 million
for the
six months ended
June 30, 2017
, compared to
$636 million
in the same period in
2016
; and
|
•
|
Higher selling, general and administrative expenses;
|
•
|
Higher costs of service; and
|
•
|
Cost of MetroPCS business combination.
|
|
Three Months Ended June 30, 2016
|
|
Six Months Ended June 30, 2016
|
||||||||||||||||||||
(in millions)
|
As Filed
|
|
Change in Accounting Principle
|
|
As Adjusted
|
|
As Filed
|
|
Change in Accounting Principle
|
|
As Adjusted
|
||||||||||||
Operating income
|
$
|
768
|
|
|
$
|
65
|
|
|
$
|
833
|
|
|
$
|
1,871
|
|
|
$
|
130
|
|
|
$
|
2,001
|
|
Interest income
|
68
|
|
|
(65
|
)
|
|
3
|
|
|
136
|
|
|
(130
|
)
|
|
6
|
|
||||||
Net income
|
225
|
|
|
—
|
|
|
225
|
|
|
704
|
|
|
—
|
|
|
704
|
|
||||||
Net income as a percentage of service revenue
|
3
|
%
|
|
—
|
%
|
|
3
|
%
|
|
5
|
%
|
|
—
|
%
|
|
5
|
%
|
||||||
Adjusted EBITDA
|
2,464
|
|
|
65
|
|
|
2,529
|
|
|
5,213
|
|
|
130
|
|
|
5,343
|
|
||||||
Adjusted EBITDA margin (Adjusted EBITDA divided by service revenues)
|
36
|
%
|
|
1
|
%
|
|
37
|
%
|
|
39
|
%
|
|
1
|
%
|
|
40
|
%
|
|
Three Months Ended June 30,
|
|
Change
|
|
Six Months Ended June 30,
|
|
Change
|
||||||||||||||||||||||
(in millions)
|
2017
|
|
2016
|
|
$
|
|
%
|
|
2017
|
|
2016
|
|
$
|
|
%
|
||||||||||||||
Net cash provided by operating activities
|
$
|
1,829
|
|
|
$
|
1,768
|
|
|
$
|
61
|
|
|
3
|
%
|
|
$
|
3,542
|
|
|
$
|
2,793
|
|
|
$
|
749
|
|
|
27
|
%
|
Net cash used in investing activities
|
(7,133
|
)
|
|
(667
|
)
|
|
(6,466
|
)
|
|
969
|
%
|
|
(8,683
|
)
|
|
(2,527
|
)
|
|
(6,156
|
)
|
|
244
|
%
|
||||||
Net cash (used in) provided by financing activities
|
(2,016
|
)
|
|
790
|
|
|
(2,806
|
)
|
|
(355
|
)%
|
|
(178
|
)
|
|
690
|
|
|
(868
|
)
|
|
(126
|
)%
|
•
|
Higher Net income and higher net non-cash
Deferred income tax expense
, partially offset by higher use from changes in working capital. Within working capital, changes in
Equipment installment plan receivables
, Inventories,
Other current and long-term assets
and
Other current and long term liabilities
were partially offset by improvements in
Accounts payable and accrued liabilities
. The change in EIP receivables was primarily due to an increase in devices financed on EIP as well a decrease in net cash proceeds from the sale of EIP receivables as the three months ended June 30, 2016 benefited from net cash proceeds of
$371
million primarily related to upsizing of the EIP securitization facility.
|
•
|
Higher Net income and net non-cash
Gains on disposal of spectrum licenses
and
Deferred income tax expense
was partially offset by increased net cash outflows from changes in working capital. Within working capital changes in
Equipment installment plan receivables
,
Other current and long-term assets
and
Other current and long term liabilities
were partially offset by improvements in Inventories and
Accounts payable and accrued liabilities
. The change in EIP receivables was primarily due to an increase in devices financed on EIP as well a decrease in net cash proceeds from the sale of EIP receivables as the six months ended June 30, 2016 benefited from net cash proceeds of
$371
million primarily related to upsizing of the EIP securitization facility.
|
•
|
$3.5 billion
increase in
Purchases of spectrum licenses and other intangible assets, including deposits
, primarily driven by our winning bid for 1,525 licenses in the 600 MHz spectrum auction; and
|
•
|
$2.9 billion
decrease in
Sales of short-term investments
.
|
•
|
$3.0 billion
decrease in
Sales of short-term investments
; and
|
•
|
$2.9 billion
increase in
Purchases of spectrum licenses and other intangible assets, including deposits
, primarily driven by our winning bid for 1,525 licenses in the 600 MHz spectrum auction.
|
•
|
$6.8 billion
for
Repayments of long-term debt
;
|
•
|
$1.2 billion
for
Repayments of revolving credit facility
;
|
•
|
$292 million
for
Repayments of short-term debt for purchases of inventory, property and equipment, net
; and
|
•
|
$119 million
for
Repayments of capital lease obligations
; partially offset by
|
•
|
$4.5 billion
in
Proceeds from issuance of long-term debt
; and
|
•
|
$1.9 billion
in
Proceeds from borrowing on revolving credit facility
.
|
•
|
$10.2 billion
for
Repayments of long-term debt
;
|
•
|
$1.2 billion
for
Repayments of revolving credit facility
;
|
•
|
$292 million
for
Repayments of short-term debt for purchases of inventory, property and equipment, net
;
|
•
|
$209 million
for
Repayments of capital lease obligations
; and
|
•
|
$95 million
for
Tax withholdings on share-based awards
; partially offset by
|
•
|
$10 billion
in
Proceeds from issuance of long-term debt
; and
|
•
|
$1.9 billion
in
Proceeds from borrowing on revolving credit facility
.
|
|
Three Months Ended June 30,
|
|
Change
|
|
Six Months Ended June 30,
|
|
Change
|
||||||||||||||||||||||
(in millions)
|
2017
|
|
2016
|
|
$
|
|
%
|
|
2017
|
|
2016
|
|
$
|
|
%
|
||||||||||||||
Net cash provided by operating activities
|
$
|
1,829
|
|
|
$
|
1,768
|
|
|
$
|
61
|
|
|
3
|
%
|
|
$
|
3,542
|
|
|
$
|
2,793
|
|
|
$
|
749
|
|
|
27
|
%
|
Cash purchases of property and equipment
|
(1,347
|
)
|
|
(1,349
|
)
|
|
2
|
|
|
—
|
%
|
|
(2,875
|
)
|
|
(2,684
|
)
|
|
(191
|
)
|
|
7
|
%
|
||||||
Free Cash Flow
|
$
|
482
|
|
|
$
|
419
|
|
|
$
|
63
|
|
|
15
|
%
|
|
$
|
667
|
|
|
$
|
109
|
|
|
$
|
558
|
|
|
512
|
%
|
(in millions)
|
December 31,
2016 |
|
Issuances and Borrowings
(1)
|
|
Note Redemptions
(1)
|
|
Extinguishments
(1)
|
|
Other
(2)
|
|
June 30,
2017 |
||||||||||||
Short-term debt
|
$
|
354
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
(20
|
)
|
|
$
|
188
|
|
|
$
|
522
|
|
Long-term debt
|
21,832
|
|
|
1,495
|
|
|
(8,365
|
)
|
|
(1,947
|
)
|
|
191
|
|
|
13,206
|
|
||||||
Total debt to third parties
|
22,186
|
|
|
1,495
|
|
|
(8,365
|
)
|
|
(1,967
|
)
|
|
379
|
|
|
13,728
|
|
||||||
Short-term debt to affiliates
|
—
|
|
|
680
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
680
|
|
||||||
Long-term debt to affiliates
|
5,600
|
|
|
8,485
|
|
|
—
|
|
|
—
|
|
|
1
|
|
|
14,086
|
|
||||||
Total debt to affiliates
|
5,600
|
|
|
9,165
|
|
|
—
|
|
|
—
|
|
|
1
|
|
|
14,766
|
|
||||||
Total debt
|
$
|
27,786
|
|
|
$
|
10,660
|
|
|
$
|
(8,365
|
)
|
|
$
|
(1,967
|
)
|
|
$
|
380
|
|
|
$
|
28,494
|
|
(1)
|
Issuances and borrowings, note redemptions and extinguishments are recorded net of related issuance costs, discounts and premiums. Issuances and borrowings for Short-term debt to affiliates represents net outstanding borrowings on our senior secured revolving credit facility.
|
(2)
|
Other includes:
$298 million
issuances of short-term debt related to vendor financing arrangements, of which
$290 million
is related to financing of property and equipment. During the
six months ended
June 30, 2017
, we repaid
$292 million
under the vendor financing arrangements. As of
June 30, 2017
, vendor financing arrangements totaled
$6 million
. Vendor financing arrangements are included in
Short-term debt
within
Total current liabilities
in our
Condensed Consolidated Balance Sheets
. Additional activity in Other includes capital leases and the amortization of discounts and premiums. As of
June 30, 2017
and
December 31, 2016
, capital leases outstanding totaled
$1.8 billion
and
$1.4 billion
, respectively.
|
(in millions)
|
Principal Issuances
|
|
Issuance Costs
|
|
Net proceeds from issuance of long-term debt
|
||||||
4.000% Senior Notes due 2022
|
$
|
500
|
|
|
$
|
2
|
|
|
$
|
498
|
|
5.125% Senior Notes due 2025
|
500
|
|
|
2
|
|
|
498
|
|
|||
5.375% Senior Notes due 2027
|
500
|
|
|
1
|
|
|
499
|
|
|||
Total
|
$
|
1,500
|
|
|
$
|
5
|
|
|
$
|
1,495
|
|
(in millions)
|
Principal Amount
|
|
Write-off of premiums, discounts and issuance costs
(1)
|
|
Call Penalties
(1) (2)
|
|
Redemption
Date |
|
Redemption Price
|
|||||||
6.625% Senior Notes due 2020
|
$
|
1,000
|
|
|
$
|
(45
|
)
|
|
$
|
22
|
|
|
February 10, 2017
|
|
102.208
|
%
|
5.250% Senior Notes due 2018
|
500
|
|
|
1
|
|
|
7
|
|
|
March 4, 2017
|
|
101.313
|
%
|
|||
6.250% Senior Notes due 2021
|
1,750
|
|
|
(71
|
)
|
|
55
|
|
|
April 1, 2017
|
|
103.125
|
%
|
|||
6.464% Senior Notes due 2019
|
1,250
|
|
|
—
|
|
|
—
|
|
|
April 28, 2017
|
|
100.000
|
%
|
|||
6.542% Senior Notes due 2020
|
1,250
|
|
|
—
|
|
|
21
|
|
|
April 28, 2017
|
|
101.636
|
%
|
|||
6.633% Senior Notes due 2021
|
1,250
|
|
|
—
|
|
|
41
|
|
|
April 28, 2017
|
|
103.317
|
%
|
|||
6.731% Senior Notes due 2022
|
1,250
|
|
|
—
|
|
|
42
|
|
|
April 28, 2017
|
|
103.366
|
%
|
|||
Total note redemptions
|
$
|
8,250
|
|
|
$
|
(115
|
)
|
|
$
|
188
|
|
|
|
|
|
(1)
|
Write-off of premiums, discounts, issuance costs and call penalties are included in
Other expense, net
in our
Condensed Consolidated Statements of Comprehensive Income
. Write-off of premiums, discounts and issuance costs are included in
Other, net
within
Net cash provided by operating activities
in our
Condensed Consolidated Statements of Cash Flows
.
|
(2)
|
The call penalty is the excess paid over the principal amount. Call penalties are included within
Net cash provided by operating activities
in our
Condensed Consolidated Statements of Cash Flows
.
|
(in millions)
|
Net proceeds from issuance of long-term debt
|
|
Extinguishments
|
|
Write-off of discounts and issuance costs
(1)
|
||||||
LIBOR plus 2.00% Senior Secured Term Loan due 2022
|
$
|
2,000
|
|
|
$
|
—
|
|
|
$
|
—
|
|
LIBOR plus 2.25% Senior Secured Term Loan due 2024
|
2,000
|
|
|
—
|
|
|
—
|
|
|||
LIBOR plus 2.750% Senior Secured Term Loan
|
—
|
|
|
(1,980
|
)
|
|
13
|
|
|||
Total
|
$
|
4,000
|
|
|
$
|
(1,980
|
)
|
|
$
|
13
|
|
(1)
|
Write-off of discounts and issuance costs are included in
Other expense, net
in our
Condensed Consolidated Statements of Comprehensive Income
and
Other, net
within
Net cash provided by operating activities
in our
Condensed Consolidated Statements of Cash Flows
.
|
(in millions)
|
Principal Issuances (Redemptions)
|
|
Discounts
(1)
|
|
Net proceeds from issuance of long-term debt
|
||||||
4.000% Senior Notes due 2022
|
$
|
1,000
|
|
|
$
|
(23
|
)
|
|
$
|
977
|
|
5.125% Senior Notes due 2025
|
1,250
|
|
|
(28
|
)
|
|
1,222
|
|
|||
5.375% Senior Notes due 2025
|
750
|
|
|
(28
|
)
|
|
722
|
|
|||
6.288% Senior Reset Notes due 2019
|
(1,250
|
)
|
|
—
|
|
|
(1,250
|
)
|
|||
6.366% Senior Reset Notes due 2020
|
(1,250
|
)
|
|
—
|
|
|
(1,250
|
)
|
|||
Total
|
$
|
500
|
|
|
$
|
(79
|
)
|
|
$
|
421
|
|
(1)
|
Discounts reduce
Proceeds from borrowing on revolving credit facility
and are included within
Net cash (used in) provided by financing activities
in our
Condensed Consolidated Statements of Cash Flows
.
|
(in millions)
|
Principal Issuances
|
|
Premium
|
|
Net proceeds from issuance of long-term debt
|
||||||
5.300% Senior Notes due 2021
|
$
|
2,000
|
|
|
$
|
—
|
|
|
$
|
2,000
|
|
6.000% Senior Notes due 2024
|
1,350
|
|
|
40
|
|
|
1,390
|
|
|||
6.000% Senior Notes due 2024
|
650
|
|
|
24
|
|
|
674
|
|
|||
Total
|
$
|
4,000
|
|
|
$
|
64
|
|
|
$
|
4,064
|
|
|
Total Number of Shares Purchased
|
|
Average Price Paid per Share
|
|
Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs
|
|
Maximum Number of Shares that May Yet Be Purchased Under the Plans or Programs
|
|||||
April 1, 2017 – April 30, 2017
|
380
|
|
|
$
|
64.94
|
|
|
—
|
|
|
—
|
|
May 1, 2017 – May 31, 2017
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
June 1, 2017 – June 30, 2017
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
Total
|
380
|
|
|
|
|
—
|
|
|
|
|
|
SIGNATURE
|
|
|
|
T-MOBILE US, INC.
|
|
|
|
|
|
July 20, 2017
|
|
/s/ J. Braxton Carter
|
|
|
|
J. Braxton Carter
Executive Vice President and Chief Financial Officer
(Principal Financial Officer and Authorized Signatory)
|
|
|
|
|
|
Incorporated by Reference
|
|
|
||||
Exhibit No.
|
|
Exhibit Description
|
|
Form
|
|
Date of First Filing
|
|
Exhibit Number
|
|
Filed/Furnished Herewith
|
|
|
8-K
|
|
4/28/2017
|
|
4.1
|
|
|
||
|
|
8-K
|
|
4/28/2017
|
|
4.2
|
|
|
||
|
|
8-K
|
|
4/28/2017
|
|
4.3
|
|
|
||
|
|
8-K
|
|
5/9/2017
|
|
4.1
|
|
|
||
|
|
8-K
|
|
5/9/2017
|
|
4.2
|
|
|
||
|
|
|
|
|
|
|
|
X
|
||
|
|
|
|
|
|
|
|
X
|
||
|
|
|
|
|
|
|
|
X
|
||
|
|
|
|
|
|
|
|
X
|
||
|
|
|
|
|
|
|
|
X
|
||
|
|
|
|
|
|
|
|
X
|
||
|
|
|
|
|
|
|
|
X
|
||
|
|
|
|
|
|
|
|
X
|
||
101.INS
|
|
XBRL Instance Document.
|
|
|
|
|
|
|
|
X
|
101.SCH
|
|
XBRL Taxonomy Extension Schema Document.
|
|
|
|
|
|
|
|
X
|
|
|
|
|
Incorporated by Reference
|
|
|
||||
Exhibit No.
|
|
Exhibit Description
|
|
Form
|
|
Date of First Filing
|
|
Exhibit Number
|
|
Filed/Furnished Herewith
|
101.CAL
|
|
XBRL Taxonomy Extension Calculation Linkbase Document.
|
|
|
|
|
|
|
|
X
|
101.DEF
|
|
XBRL Taxonomy Extension Definition Linkbase Document.
|
|
|
|
|
|
|
|
X
|
101.LAB
|
|
XBRL Taxonomy Extension Label Linkbase Document.
|
|
|
|
|
|
|
|
X
|
101.PRE
|
|
XBRL Taxonomy Extension Presentation Linkbase Document.
|
|
|
|
|
|
|
|
X
|
*
|
|
Indicates a management contract or compensatory plan or arrangement.
|
**
|
|
Furnished herewith.
|
1.
|
Defined Terms.
Capitalized terms used and not otherwise defined herein are used as defined in the Agreement.
|
2.
|
Amendment to Section 5.02.
Effective as of the date hereof, Section 5.02 of the Agreement is amended and restated in its entirety to read as follows:
|
3.
|
Representations and Warranties.
Each of the parties hereto hereby represents and warrants that this Amendment constitutes the legal, valid and binding obligation of such party, enforceable against it in accordance with its terms, except as limited by bankruptcy, insolvency or other similar laws of general application relating to or affecting the enforcement of creditors’ rights generally and subject to the general principals of equity.
|
4.
|
Agreement in Full Force and Effect as Amended.
Except as specifically amended hereby, the Agreement shall remain in full force and effect and is hereby ratified and reaffirmed by the parties hereto. All references to the Agreement shall be deemed to mean the Agreement as modified hereby. The parties hereto agree to be bound by the terms and conditions of the Agreement as amended by this Amendment, as though such terms and conditions were set forth herein.
|
5.
|
Counterparts.
This Amendment may be executed by different parties on any number of counterparts, each of which shall constitute an original and all of which, taken together, shall constitute one and the same agreement.
|
6.
|
Further Amendment.
This Amendment may not be amended or otherwise modified except as provided in the Agreement.
|
7.
|
Section Headings.
The section headings in the Amendment are for reference only and shall not affect the construction of this Amendment.
|
8.
|
Governing Law; Venue; Waiver of Jury Trial.
The provisions of Section 8.06, 8.12 and 8.13 of the Agreement are hereby incorporated by reference as if fully set forth herein, except that references therein to “this Agreement” shall be construed herein as references to the Agreement, as amended by this Amendment.
|
T-MOBILE AIRTIME FUNDING LLC, as Funding Purchaser
|
T-MOBILE PCS HOLDINGS LLC, as Seller
|
|
|
|
|
By:
/s/ Dirk Wehrse
Name: Dirk Wehrse
Title: Senior Vice President, Treasury & Treasurer
|
By:
/s/ Dirk Wehrse
Name: Dirk Wehrse
Title: Senior Vice President, Treasury & Treasurer
|
T-MOBILE US, INC.,
as Performance Guarantor
|
|
|
|
|
|
By:
/s/ Dirk Wehrse
Name: Dirk Wehrse
Title: Senior Vice President, Treasury & Treasurer
|
|
BILLING GATE ONE LLC, as Purchaser under the Master Receivables Purchase Agreement
By: Billing Gate One Trust, as Manager
By: Wells Fargo Delaware Trust Company, National Association, solely as Trustee and not in its individual capacity
|
|
|
By:
/s/ Sandra Battaglia
Name: Sandra Battaglia
Title: Vice President
|
LANDESBANK HESSEN-THÜRINGEN GIROZENTRALE, as Bank Purchasing Agent and a Bank Purchaser
|
|
|
|
|
|
By:
/s/ Bjoern Mollner
Name: Bjoern Mollner
Title: VP
|
By:
/s/ Björn Reinecke
Name: Björn Reinecke
Title: Assistant Vice President
|
THE BANK OF TOKYO-MITSUBISHI UFJ, LTD., DÜSSELDORF BRANCH, as Bank Collections Agent and a Bank Purchaser
|
|
|
|
|
|
By:
/s/ Stephan Stamm
Name: Stephan Stamm
Title: Managing Director
|
By:
/s/ Ed Langendam
Name: Ed Langendam
Title: Managing Director
|
AUTOBAHN FUNDING COMPANY LLC
as the Conduit Purchaser and as a Bank Purchaser
|
|
|
|
|
|
By:
/s/ Alexander Ploch
Name:Alexander Ploch
Title:Vice President
|
By:
/s/ Christian Haesslein
Name:Christian Haesslein
Title:Director
|
DZ Bank AG Deutsche Zentral-Genossenschaftsbank, Frankfurt am Main, New York Branch
as the Conduit Agent
|
|
|
|
|
|
By:
/s/ Alexander Ploch
Name: Alexander Ploch
Title: Vice President
|
By:
/s/ Christian Haesslein
Name: Christian Haesslein
Title: Director
|
(a)
|
the product of (i) the Maximum Mandatory Repurchase Percentage for the Collection Period to which such Batch relates times (ii) its Batch Receivables Amount;
minus
|
(b)
|
the aggregate amount of reductions (in connection with the allocation of the Allocated Write-Off Amount and EPS Loss Amounts) that were required to be made to the Mandatory Repurchase Reserve Payment Amount with respect to such Batch on all prior Settlement Dates pursuant to Sections 5.3(b)(i) and 5.3(c)(i).
|
•
|
“Review whether EPS Receivables are being properly identified and whether the related EPS Loss Amounts and repurchase prices for such Receivables under Sections 5.1(a) and 5.1(b) and the limitation in Section 3.2(b) of the Master Receivables Purchase Agreement are being properly calculated.”
|
|
T-MOBILE AIRTIME FUNDING LLC
as Funding Seller
|
|
|
|
|
|
By:
/s/ Dirk Wehrse
|
|
Name: Dirk Wehrse
Title: Senior Vice President, Treasury &
Treasurer
|
|
BILLING GATE ONE LLC
as Purchaser
|
|
|
|
|
|
By:
/s/ Sandra Battaglia
|
|
Name: Sandra Battaglia
Title: Vice President
|
|
LANDESBANK HESSEN-THÜRINGEN
GIROZENTRALE,
as Bank Purchasing Agent
|
|
|
|
|
|
By:
/s/ Björn Reinecke
|
|
Name: Björn Reinecke
Title: Assistant Vice President
|
|
|
|
|
|
By:
/s/ Bjoern Mollner
|
|
Name: Bjoern Mollner
Title: VP
|
|
THE BANK OF TOKYO-MITSUBISHI UFJ,
LTD., DÜSSELDORF BRANCH,
as Bank Collections Agent
|
|
|
|
|
|
By:
/s/ Ed Langendam
|
|
Name: Ed Langendam
Title: Managing Director
|
|
|
|
|
|
By:
/s/ Stephan Stamm
|
|
Name: Stephan Stamm
Title: Managing Director
|
|
AUTOBAHN FUNDING COMPANY LLC,
as the Conduit Purchaser and as a Bank Purchaser |
|
|
|
|
|
By:
/s/ Alexander Ploch
|
|
Name: Alexander Ploch
Title: Vice President
|
|
|
|
|
|
By:
/s/ Christian Haesslein
|
|
Name: Christian Haesslein
Title: Director
|
|
DZ BANK AG DEUTSCHE ZENTRAL-GENOSSENSCHAFTSBANK, FRANKFURT AM
MAIN, NEW YORK BRANCH,
as the Conduit Agent
|
|
|
|
|
|
By: /s/ Alexander Ploch
|
|
Name: Alexander Ploch
Title: Vice President |
|
|
|
|
|
By: /s/ Christian Haesslein
|
|
Name: Christian Haesslein
Title: Director |
|
T-MOBILE PCS HOLDINGS LLC,
as Servicer
|
|
|
|
|
|
By:
/s/ Dirk Wehrse
|
|
Name: Dirk Wehrse
Title: Senior Vice President, Treasury &
Treasurer
|
|
|
|
|
|
T-MOBILE US, INC.,
as Performance Guarantor
|
|
|
|
|
|
By: /s/ Dirk Wehrse
|
|
Name: Dirk Wehrse
Title: Senior Vice President, Treasury & Treasurer |
ACKNOWLEDGED AND AGREED:
|
|
|
|
KfW IPEX-BANK GESELLSCHAFT MIT BESCHRAENKTER HAFTUNG
|
|
|
|
|
|
By:
/s/ Sebastian Eberle
|
|
Name: Sebastian Eberle
Title: Director
|
|
|
|
|
|
By:
/s/ Franziska Wörner
|
|
Name: Franziska Wörner
Title: Associate
|
|
Period
|
End of Collection Period
|
Settlement Date
|
Level 4 Reserve Percentage
in current month (t=0)
|
Applied rate for t=1 through t=3
|
||
0
|
25-Feb-14
|
03-Mar-14
|
5.14%
|
|
|
|
1
|
31-Mar-14
|
14-Apr-14
|
5.14%
|
5.14%
|
|
|
2
|
30-Apr-14
|
12-May-14
|
5.14%
|
5.14%
|
5.14%
|
|
3
|
31-May-14
|
12-Jun-14
|
5.14%
|
5.14%
|
5.14%
|
5.14%
|
4
|
30-Jun-14
|
14-Jul-14
|
5.83%
|
5.14%
|
5.14%
|
5.14%
|
5
|
31-Jul-14
|
12-Aug-14
|
5.83%
|
5.83%
|
5.14%
|
5.14%
|
6
|
31-Aug-14
|
12-Sep-14
|
5.83%
|
5.83%
|
5.83%
|
5.14%
|
7
|
30-Sep-14
|
14-Oct-14
|
4.90%
|
4.55%
|
4.55%
|
4.55%
|
8
|
31-Oct-14
|
12-Nov-14
|
4.90%
|
4.90%
|
4.55%
|
4.55%
|
9
|
30-Nov-14
|
12-Dec-14
|
4.24%
|
4.24%
|
4.24%
|
3.89%
|
10
|
31-Dec-14
|
12-Jan-15
|
4.24%
|
4.24%
|
4.24%
|
4.24%
|
11
|
31-Jan-15
|
12-Feb-15
|
4.24%
|
4.24%
|
4.24%
|
4.24%
|
12
|
28-Feb-15
|
12-Mar-15
|
4.24%
|
4.24%
|
4.24%
|
4.24%
|
13
|
31-Mar-15
|
13-Apr-15
|
4.24%
|
4.24%
|
4.24%
|
4.24%
|
14
|
30-Apr-15
|
12-May-15
|
4.24%
|
4.24%
|
4.24%
|
4.24%
|
15
|
31-May-15
|
12-Jun-15
|
4.39%
|
4.24%
|
4.24%
|
4.24%
|
16
|
30-Jun-15
|
13-Jul-15
|
4.39%
|
4.39%
|
4.24%
|
4.24%
|
17
|
31-Jul-15
|
12-Aug-15
|
4.39%
|
4.39%
|
4.39%
|
4.24%
|
18
|
31-Aug-15
|
14-Sep-15
|
4.99%
|
4.39%
|
4.39%
|
4.39%
|
19
|
30-Sep-15
|
13-Oct-15
|
4.99%
|
4.99%
|
4.39%
|
4.39%
|
20
|
31-Oct-15
|
12-Nov-15
|
3.75%
|
3.75%
|
3.75%
|
3.75%
|
21
|
30-Nov-15
|
14-Dec-15
|
3.75%
|
3.75%
|
3.75%
|
3.75%
|
22
|
31-Dec-15
|
12-Jan-16
|
3.75%
|
3.75%
|
3.75%
|
3.75%
|
23
|
31-Jan-16
|
12-Feb-16
|
2.91%
|
3.75%
|
3.75%
|
3.75%
|
24
|
29-Feb-16
|
14-Mar-16
|
2.91%
|
2.91%
|
3.75%
|
3.75%
|
25
|
31-Mar-16
|
12-Apr-16
|
2.91%
|
2.91%
|
2.91%
|
3.75%
|
26
|
30-Apr-16
|
12-May-16
|
2.91%
|
2.91%
|
2.91%
|
2.91%
|
27
|
31-May-16
|
13-Jun-16
|
2.91%
|
2.91%
|
2.91%
|
2.91%
|
28
|
30-Jun-16
|
12-Jul-16
|
2.91%
|
2.91%
|
2.91%
|
2.91%
|
29
|
31-Jul-16
|
12-Aug-16
|
2.91%
|
2.91%
|
2.91%
|
2.91%
|
30
|
31-Aug-16
|
12-Sep-16
|
2.91%
|
2.91%
|
2.91%
|
2.91%
|
31
|
30-Sep-16
|
12-Oct-16
|
3.16%
|
2.91%
|
2.91%
|
2.91%
|
32
|
31-Oct-16
|
12-Nov-16
|
3.16%
|
3.16%
|
2.91%
|
2.91%
|
33
|
30-Nov-16
|
12-Dec-16
|
3.43%
|
3.16%
|
3.16%
|
2.91%
|
34
|
31-Dec-16
|
12-Jan-17
|
3.43%
|
3.43%
|
3.16%
|
3.16%
|
35
|
31-Jan-17
|
13-Feb-17
|
3.43%
|
3.43%
|
3.43%
|
3.16%
|
36
|
28-Feb-17
|
13-Mar-17
|
3.43%
|
3.43%
|
3.43%
|
3.43%
|
37
|
31-Mar-17
|
12-Apr-17
|
3.18%
|
3.43%
|
3.43%
|
3.43%
|
38
|
30-Apr-17
|
12-May-17
|
3.18%
|
3.18%
|
3.43%
|
3.43%
|
39
|
31-May-17
|
12-Jun-17
|
3.14%
|
3.18%
|
3.18%
|
3.43%
|
40
|
30-Jun-17
|
12-Jul-17
|
3.14%
|
3.14%
|
3.18%
|
3.18%
|
41
|
31-Jul-17
|
14-Aug-17
|
3.14%
|
3.14%
|
3.14%
|
3.18%
|
|
T-MOBILE HANDSET FUNDING LLC
as Transferor |
|
|
|
|
|
By:
/s/ Dirk Wehrse
|
|
Name: Dirk Wehrse
Title: Senior Vice President, Treasury & Treasurer |
|
T-MOBILE FINANCIAL LLC
In its individual capacity and as Servicer |
|
|
|
|
|
By:
/s/ Dirk Wehrse
|
|
Name: Dirk Wehrse
Title: Assistant Treasurer |
|
T-MOBILE US, INC.
as Guarantor |
|
|
|
|
|
By:
/s/ Dirk Wehrse
|
|
Name: Dirk Wehrse
Title: Senior Vice President, Treasury & Treasurer |
|
ROYAL BANK OF CANADA
as Administrative Agent |
|
|
|
|
|
By:
/s/ Austin J. Meier
|
|
Name: Austin J. Meier
Title: Authorized Signatory
|
|
ROYAL BANK OF CANADA
as a Funding Agent |
|
|
|
|
|
By:
/s/ Austin J. Meier
|
|
Name: Austin J. Meier
Title: Authorized Signatory
|
|
LANDESBANK HESSEN-THÜRINGEN
GIROZENTRALE, as a Funding Agent |
|
|
|
|
|
By:
/s/ Björn Reinecke
|
|
Name: Björn Reinecke
Title: Assistant Vice President |
|
|
|
|
|
By:
/s/ Bjoern Mollner
|
|
Name: Bjoern Mollner
Title: Vice President |
|
THE BANK OF TOKYO-MITSUBISHI UFJ,
LTD., NEW YORK BRANCH, as a Funding Agent |
|
|
|
|
|
By:
/s/ Luna Mills
|
|
Name: Luna Mills
Title: Managing Director |
|
LLOYDS BANK PLC,
as a Funding Agent |
|
|
|
|
|
By:
/s/ Johnathan Ferris
|
|
Name: Johnathan Ferris
Title: Director |
1.
|
Eligibility
|
2.
|
Non-Employee Director Compensation
|
a.
|
Cash Compensation
|
|
Annual Retainer for Board Service
|
$120,000
|
|
|
Additional Retainer for Lead Independent Director
|
$35,000
|
|
|
Audit Committee Chair
|
$50,000
|
|
|
Compensation Committee Chair
|
$25,000
|
|
|
Nominating and Corporate Governance Committee Chair
|
$15,000
|
|
|
Additional Retainer for Audit Committee Members
|
$15,000
|
|
b.
|
Reimbursement of Expenses
|
c.
|
Restricted Stock Unit Grants
|
3.
|
Amendment
|
1.
|
I have reviewed this
Quarterly Report
on
Form 10-Q
of T-Mobile US, Inc.;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
(a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
(b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
(c)
|
Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
(d)
|
Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and
|
5.
|
The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):
|
(a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and
|
(b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.
|
/s/ John J. Legere
|
John J. Legere
President and Chief Executive Officer
|
1.
|
I have reviewed this
Quarterly Report
on
Form 10-Q
of T-Mobile US, Inc.;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
(a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
(b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
(c)
|
Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
(d)
|
Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and
|
5.
|
The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):
|
(a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and
|
(b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.
|
/s/ J. Braxton Carter
|
J. Braxton Carter
Executive Vice President and Chief Financial Officer
|
1.
|
The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
|
2.
|
The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
|
/s/ John J. Legere
|
John J. Legere
President and Chief Executive Officer
|
1.
|
The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
|
2.
|
The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
|
/s/ J. Braxton Carter
|
J. Braxton Carter
Executive Vice President and Chief Financial Officer
|