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 October 19, 2017
|
|
Common Stock, $0.00001 par value per share
|
|
831,964,098
|
|
|
||
|
||
|
||
|
||
|
||
|
||
|
||
|
(in millions, except share and per share amounts)
|
September 30,
2017 |
|
December 31,
2016 |
||||
Assets
|
|
|
|
||||
Current assets
|
|
|
|
||||
Cash and cash equivalents
|
$
|
739
|
|
|
$
|
5,500
|
|
Accounts receivable, net of allowances of $86 and $102
|
1,734
|
|
|
1,896
|
|
||
Equipment installment plan receivables, net
|
2,136
|
|
|
1,930
|
|
||
Accounts receivable from affiliates
|
24
|
|
|
40
|
|
||
Inventories
|
999
|
|
|
1,111
|
|
||
Asset purchase deposit
|
—
|
|
|
2,203
|
|
||
Other current assets
|
1,817
|
|
|
1,537
|
|
||
Total current assets
|
7,449
|
|
|
14,217
|
|
||
Property and equipment, net
|
21,570
|
|
|
20,943
|
|
||
Goodwill
|
1,683
|
|
|
1,683
|
|
||
Spectrum licenses
|
35,007
|
|
|
27,014
|
|
||
Other intangible assets, net
|
256
|
|
|
376
|
|
||
Equipment installment plan receivables due after one year, net
|
1,100
|
|
|
984
|
|
||
Other assets
|
858
|
|
|
674
|
|
||
Total assets
|
$
|
67,923
|
|
|
$
|
65,891
|
|
Liabilities and Stockholders' Equity
|
|
|
|
||||
Current liabilities
|
|
|
|
||||
Accounts payable and accrued liabilities
|
$
|
6,071
|
|
|
$
|
7,152
|
|
Payables to affiliates
|
288
|
|
|
125
|
|
||
Short-term debt
|
558
|
|
|
354
|
|
||
Deferred revenue
|
790
|
|
|
986
|
|
||
Other current liabilities
|
396
|
|
|
405
|
|
||
Total current liabilities
|
8,103
|
|
|
9,022
|
|
||
Long-term debt
|
13,163
|
|
|
21,832
|
|
||
Long-term debt to affiliates
|
14,586
|
|
|
5,600
|
|
||
Tower obligations
|
2,599
|
|
|
2,621
|
|
||
Deferred tax liabilities
|
5,535
|
|
|
4,938
|
|
||
Deferred rent expense
|
2,693
|
|
|
2,616
|
|
||
Other long-term liabilities
|
967
|
|
|
1,026
|
|
||
Total long-term liabilities
|
39,543
|
|
|
38,633
|
|
||
Commitments and contingencies (Note 10)
|
|
|
|
|
|
||
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; 833,418,809 and 827,768,818 shares issued, 831,963,343 and 826,357,331 shares outstanding
|
—
|
|
|
—
|
|
||
Additional paid-in capital
|
39,058
|
|
|
38,846
|
|
||
Treasury stock, at cost, 1,455,466 and 1,411,487 shares issued
|
(4
|
)
|
|
(1
|
)
|
||
Accumulated other comprehensive income
|
4
|
|
|
1
|
|
||
Accumulated deficit
|
(18,781
|
)
|
|
(20,610
|
)
|
||
Total stockholders' equity
|
20,277
|
|
|
18,236
|
|
||
Total liabilities and stockholders' equity
|
$
|
67,923
|
|
|
$
|
65,891
|
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 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
|
$
|
4,920
|
|
|
$
|
4,647
|
|
|
$
|
14,465
|
|
|
$
|
13,458
|
|
Branded prepaid revenues
|
2,376
|
|
|
2,182
|
|
|
7,009
|
|
|
6,326
|
|
||||
Wholesale revenues
|
274
|
|
|
238
|
|
|
778
|
|
|
645
|
|
||||
Roaming and other service revenues
|
59
|
|
|
66
|
|
|
151
|
|
|
170
|
|
||||
Total service revenues
|
7,629
|
|
|
7,133
|
|
|
22,403
|
|
|
20,599
|
|
||||
Equipment revenues
|
2,118
|
|
|
1,948
|
|
|
6,667
|
|
|
5,987
|
|
||||
Other revenues
|
272
|
|
|
224
|
|
|
775
|
|
|
670
|
|
||||
Total revenues
|
10,019
|
|
|
9,305
|
|
|
29,845
|
|
|
27,256
|
|
||||
Operating expenses
|
|
|
|
|
|
|
|
||||||||
Cost of services, exclusive of depreciation and amortization shown separately below
|
1,594
|
|
|
1,436
|
|
|
4,520
|
|
|
4,286
|
|
||||
Cost of equipment sales
|
2,617
|
|
|
2,539
|
|
|
8,149
|
|
|
7,532
|
|
||||
Selling, general and administrative
|
3,098
|
|
|
2,898
|
|
|
8,968
|
|
|
8,419
|
|
||||
Depreciation and amortization
|
1,416
|
|
|
1,568
|
|
|
4,499
|
|
|
4,695
|
|
||||
Cost of MetroPCS business combination
|
—
|
|
|
15
|
|
|
—
|
|
|
110
|
|
||||
Gains on disposal of spectrum licenses
|
(29
|
)
|
|
(199
|
)
|
|
(67
|
)
|
|
(835
|
)
|
||||
Total operating expense
|
8,696
|
|
|
8,257
|
|
|
26,069
|
|
|
24,207
|
|
||||
Operating income
|
1,323
|
|
|
1,048
|
|
|
3,776
|
|
|
3,049
|
|
||||
Other income (expense)
|
|
|
|
|
|
|
|
||||||||
Interest expense
|
(253
|
)
|
|
(376
|
)
|
|
(857
|
)
|
|
(1,083
|
)
|
||||
Interest expense to affiliates
|
(167
|
)
|
|
(76
|
)
|
|
(398
|
)
|
|
(248
|
)
|
||||
Interest income
|
2
|
|
|
3
|
|
|
15
|
|
|
9
|
|
||||
Other income (expense), net
|
1
|
|
|
(1
|
)
|
|
(89
|
)
|
|
(6
|
)
|
||||
Total other expense, net
|
(417
|
)
|
|
(450
|
)
|
|
(1,329
|
)
|
|
(1,328
|
)
|
||||
Income before income taxes
|
906
|
|
|
598
|
|
|
2,447
|
|
|
1,721
|
|
||||
Income tax expense
|
(356
|
)
|
|
(232
|
)
|
|
(618
|
)
|
|
(651
|
)
|
||||
Net income
|
550
|
|
|
366
|
|
|
1,829
|
|
|
1,070
|
|
||||
Dividends on preferred stock
|
(13
|
)
|
|
(13
|
)
|
|
(41
|
)
|
|
(41
|
)
|
||||
Net income attributable to common stockholders
|
$
|
537
|
|
|
$
|
353
|
|
|
$
|
1,788
|
|
|
$
|
1,029
|
|
|
|
|
|
|
|
|
|
||||||||
Net Income
|
$
|
550
|
|
|
$
|
366
|
|
|
$
|
1,829
|
|
|
$
|
1,070
|
|
Other comprehensive income, net of tax
|
|
|
|
|
|
|
|
||||||||
Unrealized gain on available-for-sale securities, net of tax effect $0, $1, $2 and $1
|
1
|
|
|
2
|
|
|
3
|
|
|
2
|
|
||||
Other comprehensive income
|
1
|
|
|
2
|
|
|
3
|
|
|
2
|
|
||||
Total comprehensive income
|
$
|
551
|
|
|
$
|
368
|
|
|
$
|
1,832
|
|
|
$
|
1,072
|
|
Earnings per share
|
|
|
|
|
|
|
|
||||||||
Basic
|
$
|
0.65
|
|
|
$
|
0.43
|
|
|
$
|
2.15
|
|
|
$
|
1.25
|
|
Diluted
|
$
|
0.63
|
|
|
$
|
0.42
|
|
|
$
|
2.10
|
|
|
$
|
1.24
|
|
Weighted average shares outstanding
|
|
|
|
|
|
|
|
||||||||
Basic
|
831,189,779
|
|
|
822,998,697
|
|
|
829,974,146
|
|
|
821,626,675
|
|
||||
Diluted
|
871,420,065
|
|
|
832,257,819
|
|
|
871,735,511
|
|
|
831,241,027
|
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||||||
(in millions)
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||||||
Operating activities
|
|
|
|
|
|
|
|
||||||||
Net income
|
$
|
550
|
|
|
$
|
366
|
|
|
$
|
1,829
|
|
|
$
|
1,070
|
|
Adjustments to reconcile net income to net cash provided by operating activities
|
|
|
|
|
|
|
|
||||||||
Depreciation and amortization
|
1,416
|
|
|
1,568
|
|
|
4,499
|
|
|
4,695
|
|
||||
Stock-based compensation expense
|
82
|
|
|
59
|
|
|
221
|
|
|
171
|
|
||||
Deferred income tax expense
|
347
|
|
|
219
|
|
|
595
|
|
|
623
|
|
||||
Bad debt expense
|
123
|
|
|
118
|
|
|
298
|
|
|
358
|
|
||||
Losses from sales of receivables
|
67
|
|
|
59
|
|
|
242
|
|
|
157
|
|
||||
Deferred rent expense
|
21
|
|
|
32
|
|
|
61
|
|
|
97
|
|
||||
Gains on disposal of spectrum licenses
|
(29
|
)
|
|
(199
|
)
|
|
(67
|
)
|
|
(835
|
)
|
||||
Changes in operating assets and liabilities
|
|
|
|
|
|
|
|
||||||||
Accounts receivable
|
(119
|
)
|
|
(155
|
)
|
|
(166
|
)
|
|
(462
|
)
|
||||
Equipment installment plan receivables
|
(154
|
)
|
|
104
|
|
|
(520
|
)
|
|
556
|
|
||||
Inventories
|
113
|
|
|
301
|
|
|
(28
|
)
|
|
(497
|
)
|
||||
Deferred purchase price from sales of receivables
|
6
|
|
|
(16
|
)
|
|
(12
|
)
|
|
(199
|
)
|
||||
Other current and long-term assets
|
(184
|
)
|
|
(98
|
)
|
|
(330
|
)
|
|
31
|
|
||||
Accounts payable and accrued liabilities
|
(12
|
)
|
|
(731
|
)
|
|
(607
|
)
|
|
(1,568
|
)
|
||||
Other current and long term liabilities
|
60
|
|
|
112
|
|
|
(84
|
)
|
|
326
|
|
||||
Other, net
|
75
|
|
|
1
|
|
|
(27
|
)
|
|
10
|
|
||||
Net cash provided by operating activities
|
2,362
|
|
|
1,740
|
|
|
5,904
|
|
|
4,533
|
|
||||
Investing activities
|
|
|
|
|
|
|
|
||||||||
Purchases of property and equipment, including capitalized interest of $29, $17, $111 and $71
|
(1,441
|
)
|
|
(1,159
|
)
|
|
(4,316
|
)
|
|
(3,843
|
)
|
||||
Purchases of spectrum licenses and other intangible assets, including deposits
|
(15
|
)
|
|
(705
|
)
|
|
(5,820
|
)
|
|
(3,544
|
)
|
||||
Sales of short-term investments
|
—
|
|
|
—
|
|
|
—
|
|
|
2,998
|
|
||||
Other, net
|
1
|
|
|
5
|
|
|
(2
|
)
|
|
3
|
|
||||
Net cash used in investing activities
|
(1,455
|
)
|
|
(1,859
|
)
|
|
(10,138
|
)
|
|
(4,386
|
)
|
||||
Financing activities
|
|
|
|
|
|
|
|
||||||||
Proceeds from issuance of long-term debt
|
500
|
|
|
—
|
|
|
10,480
|
|
|
997
|
|
||||
Proceeds from borrowing on revolving credit facility
|
1,055
|
|
|
—
|
|
|
2,910
|
|
|
—
|
|
||||
Repayments of revolving credit facility
|
(1,735
|
)
|
|
—
|
|
|
(2,910
|
)
|
|
—
|
|
||||
Repayments of capital lease obligations
|
(141
|
)
|
|
(54
|
)
|
|
(350
|
)
|
|
(133
|
)
|
||||
Repayments of short-term debt for purchases of inventory, property and equipment, net
|
(4
|
)
|
|
—
|
|
|
(296
|
)
|
|
(150
|
)
|
||||
Repayments of long-term debt
|
—
|
|
|
(5
|
)
|
|
(10,230
|
)
|
|
(15
|
)
|
||||
Tax withholdings on share-based awards
|
(6
|
)
|
|
(3
|
)
|
|
(101
|
)
|
|
(52
|
)
|
||||
Dividends on preferred stock
|
(13
|
)
|
|
(13
|
)
|
|
(41
|
)
|
|
(41
|
)
|
||||
Other, net
|
(5
|
)
|
|
8
|
|
|
11
|
|
|
17
|
|
||||
Net cash (used in) provided by financing activities
|
(349
|
)
|
|
(67
|
)
|
|
(527
|
)
|
|
623
|
|
||||
Change in cash and cash equivalents
|
558
|
|
|
(186
|
)
|
|
(4,761
|
)
|
|
770
|
|
||||
Cash and cash equivalents
|
|
|
|
|
|
|
|
||||||||
Beginning of period
|
181
|
|
|
5,538
|
|
|
5,500
|
|
|
4,582
|
|
||||
End of period
|
$
|
739
|
|
|
$
|
5,352
|
|
|
$
|
739
|
|
|
$
|
5,352
|
|
Supplemental disclosure of cash flow information
|
|
|
|
|
|
|
|
||||||||
Interest payments, net of amounts capitalized, $0, $0, $79 and $0 of which recorded as debt discount (Note 7)
|
$
|
343
|
|
|
$
|
478
|
|
|
$
|
1,565
|
|
|
$
|
1,292
|
|
Income tax payments
|
2
|
|
|
4
|
|
|
23
|
|
|
23
|
|
||||
Changes in accounts payable for purchases of property and equipment
|
(141
|
)
|
|
(79
|
)
|
|
(458
|
)
|
|
(307
|
)
|
||||
Leased devices transferred from inventory to property and equipment
|
262
|
|
|
234
|
|
|
775
|
|
|
1,175
|
|
||||
Returned leased devices transferred from property and equipment to inventory
|
(165
|
)
|
|
(186
|
)
|
|
(635
|
)
|
|
(422
|
)
|
||||
Issuance of short-term debt for financing of property and equipment
|
1
|
|
|
—
|
|
|
291
|
|
|
150
|
|
||||
Assets acquired under capital lease obligations
|
138
|
|
|
384
|
|
|
735
|
|
|
679
|
|
|
Three Months Ended September 30, 2017
|
|
Three Months Ended September 30, 2016
|
||||||||||||||||||||
(in millions)
|
Unadjusted
|
|
Change in Accounting Principle
|
|
As Adjusted
|
|
As Filed
|
|
Change in Accounting Principle
|
|
As Adjusted
|
||||||||||||
Other revenues
|
$
|
198
|
|
|
$
|
74
|
|
|
$
|
272
|
|
|
$
|
165
|
|
|
$
|
59
|
|
|
$
|
224
|
|
Total revenues
|
9,945
|
|
|
74
|
|
|
10,019
|
|
|
9,246
|
|
|
59
|
|
|
9,305
|
|
||||||
Operating income
|
1,249
|
|
|
74
|
|
|
1,323
|
|
|
989
|
|
|
59
|
|
|
1,048
|
|
||||||
Interest income
|
76
|
|
|
(74
|
)
|
|
2
|
|
|
62
|
|
|
(59
|
)
|
|
3
|
|
||||||
Total other expense, net
|
(343
|
)
|
|
(74
|
)
|
|
(417
|
)
|
|
(391
|
)
|
|
(59
|
)
|
|
(450
|
)
|
||||||
Net income
|
550
|
|
|
—
|
|
|
550
|
|
|
366
|
|
|
—
|
|
|
366
|
|
|
Nine Months Ended September 30, 2017
|
|
Nine Months Ended September 30, 2016
|
||||||||||||||||||||
(in millions)
|
Unadjusted
|
|
Change in Accounting Principle
|
|
As Adjusted
|
|
As Filed
|
|
Change in Accounting Principle
|
|
As Adjusted
|
||||||||||||
Other revenues
|
$
|
571
|
|
|
$
|
204
|
|
|
$
|
775
|
|
|
$
|
481
|
|
|
$
|
189
|
|
|
$
|
670
|
|
Total revenues
|
29,641
|
|
|
204
|
|
|
29,845
|
|
|
27,067
|
|
|
189
|
|
|
27,256
|
|
||||||
Operating income
|
3,572
|
|
|
204
|
|
|
3,776
|
|
|
2,860
|
|
|
189
|
|
|
3,049
|
|
||||||
Interest income
|
219
|
|
|
(204
|
)
|
|
15
|
|
|
198
|
|
|
(189
|
)
|
|
9
|
|
||||||
Total other expense, net
|
(1,125
|
)
|
|
(204
|
)
|
|
(1,329
|
)
|
|
(1,139
|
)
|
|
(189
|
)
|
|
(1,328
|
)
|
||||||
Net income
|
1,829
|
|
|
—
|
|
|
1,829
|
|
|
1,070
|
|
|
—
|
|
|
1,070
|
|
•
|
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. We currently expect to recognize the financing component in our EIP contracts, including those financing components that are not considered to be significant to the contract. We believe that this application will be consistent with our current practice of imputing interest.
|
•
|
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 which we expect will typically result in expensing commissions paid to acquire branded prepaid service contracts. Currently, we believe that incremental contract acquisition costs of approximately
$450 million
to
$550 million
that were incurred during the nine months ended September 30, 2017, which consists primarily of commissions paid to acquire branded postpaid service contracts, would require capitalization and amortization under the new standard. We expect that deferred contract costs will have an average amortization period of approximately
24
months, subject to being monitored and updated every period to reflect any significant change in assumptions. In addition, the deferred contract cost asset will be assessed for impairment on a periodic basis.
|
•
|
We expect that promotional bill credits offered to customers on equipment sales that are paid over time and are contingent on the customer maintaining a service contract will result in extended service contracts, which impacts 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)
|
September 30,
2017 |
|
December 31,
2016 |
||||
EIP receivables, gross
|
$
|
3,599
|
|
|
$
|
3,230
|
|
Unamortized imputed discount
|
(233
|
)
|
|
(195
|
)
|
||
EIP receivables, net of unamortized imputed discount
|
3,366
|
|
|
3,035
|
|
||
Allowance for credit losses
|
(130
|
)
|
|
(121
|
)
|
||
EIP receivables, net
|
$
|
3,236
|
|
|
$
|
2,914
|
|
|
|
|
|
||||
Classified on the balance sheet as:
|
|
|
|
||||
Equipment installment plan receivables, net
|
$
|
2,136
|
|
|
$
|
1,930
|
|
Equipment installment plan receivables due after one year, net
|
1,100
|
|
|
984
|
|
||
EIP receivables, net
|
$
|
3,236
|
|
|
$
|
2,914
|
|
|
September 30, 2017
|
|
December 31, 2016
|
||||||||||||||||||||
(in millions)
|
Prime
|
|
Subprime
|
|
Total
|
|
Prime
|
|
Subprime
|
|
Total
|
||||||||||||
Unbilled
|
$
|
1,471
|
|
|
$
|
1,903
|
|
|
$
|
3,374
|
|
|
$
|
1,343
|
|
|
$
|
1,686
|
|
|
$
|
3,029
|
|
Billed – Current
|
60
|
|
|
90
|
|
|
150
|
|
|
51
|
|
|
77
|
|
|
128
|
|
||||||
Billed – Past Due
|
25
|
|
|
50
|
|
|
75
|
|
|
25
|
|
|
48
|
|
|
73
|
|
||||||
EIP receivables, gross
|
$
|
1,556
|
|
|
$
|
2,043
|
|
|
$
|
3,599
|
|
|
$
|
1,419
|
|
|
$
|
1,811
|
|
|
$
|
3,230
|
|
(in millions)
|
September 30,
2017 |
|
September 30,
2016 |
||||
Imputed discount and allowance for credit losses, beginning of period
|
$
|
316
|
|
|
$
|
333
|
|
Bad debt expense
|
215
|
|
|
185
|
|
||
Write-offs, net of recoveries
|
(205
|
)
|
|
(201
|
)
|
||
Change in imputed discount on short-term and long-term EIP receivables
|
163
|
|
|
103
|
|
||
Impacts from sales of EIP receivables
|
(126
|
)
|
|
(133
|
)
|
||
Imputed discount and allowance for credit losses, end of period
|
$
|
363
|
|
|
$
|
287
|
|
(in millions)
|
September 30,
2017 |
|
December 31,
2016 |
||||
Other current assets
|
$
|
225
|
|
|
$
|
207
|
|
Accounts payable and accrued liabilities
|
13
|
|
|
17
|
|
||
Other current liabilities
|
155
|
|
|
129
|
|
(in millions)
|
September 30,
2017 |
|
December 31,
2016 |
||||
Other current assets
|
$
|
357
|
|
|
$
|
371
|
|
Other assets
|
90
|
|
|
83
|
|
||
Other long-term liabilities
|
2
|
|
|
4
|
|
(in millions)
|
September 30,
2017 |
|
December 31,
2016 |
||||
Derecognized net service receivables and EIP receivables
|
$
|
2,362
|
|
|
$
|
2,502
|
|
Other current assets
|
582
|
|
|
578
|
|
||
of which, deferred purchase price
|
581
|
|
|
576
|
|
||
Other long-term assets
|
90
|
|
|
83
|
|
||
of which, deferred purchase price
|
90
|
|
|
83
|
|
||
Accounts payable and accrued liabilities
|
13
|
|
|
17
|
|
||
Other current liabilities
|
155
|
|
|
129
|
|
||
Other long-term liabilities
|
2
|
|
|
4
|
|
||
Net cash proceeds since inception
|
1,963
|
|
|
2,030
|
|
||
Of which:
|
|
|
|
||||
Change in net cash proceeds during the year-to-date period
|
(67
|
)
|
|
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
|
8,247
|
|
|
Spectrum licenses transferred to held for sale
|
(271
|
)
|
|
Costs to clear spectrum
|
17
|
|
|
Balance at September 30, 2017
|
$
|
35,007
|
|
|
Level within the Fair Value Hierarchy
|
|
September 30, 2017
|
|
December 31, 2016
|
||||||||||||
(in millions)
|
|
Carrying Amount
|
|
Fair Value
|
|
Carrying Amount
|
|
Fair Value
|
|||||||||
Assets:
|
|
|
|
|
|
|
|
|
|
||||||||
Deferred purchase price assets
|
3
|
|
$
|
671
|
|
|
$
|
671
|
|
|
$
|
659
|
|
|
$
|
659
|
|
Liabilities:
|
|
|
|
|
|
|
|
|
|
||||||||
Guarantee liabilities
|
3
|
|
121
|
|
|
121
|
|
|
135
|
|
|
135
|
|
|
Level within the Fair Value Hierarchy
|
|
September 30, 2017
|
|
December 31, 2016
|
||||||||||||
(in millions)
|
|
Principal Amount
|
|
Fair Value
|
|
Principal Amount
|
|
Fair Value
|
|||||||||
Liabilities:
|
|
|
|
|
|
|
|
|
|
||||||||
Senior Notes to third parties
|
1
|
|
$
|
11,850
|
|
|
$
|
12,605
|
|
|
$
|
18,600
|
|
|
$
|
19,584
|
|
Senior Notes to affiliates
|
2
|
|
7,500
|
|
|
7,897
|
|
|
—
|
|
|
—
|
|
||||
Incremental Term Loan Facility to affiliates
|
2
|
|
4,000
|
|
|
4,020
|
|
|
—
|
|
|
—
|
|
||||
Senior Reset Notes to affiliates
|
2
|
|
3,100
|
|
|
3,290
|
|
|
5,600
|
|
|
5,955
|
|
||||
Senior Secured Term Loans
|
2
|
|
—
|
|
|
—
|
|
|
1,980
|
|
|
2,005
|
|
(in millions)
|
December 31,
2016 |
|
Issuances and Borrowings
(1)
|
|
Note Redemptions
(1)
|
|
Extinguishments
(1)
|
|
Repayments
|
|
Other
(2)
|
|
September 30,
2017 |
||||||||||||||
Short-term debt
|
$
|
354
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
(20
|
)
|
|
$
|
—
|
|
|
$
|
224
|
|
|
$
|
558
|
|
Long-term debt
|
21,832
|
|
|
1,495
|
|
|
(8,365
|
)
|
|
(1,947
|
)
|
|
—
|
|
|
148
|
|
|
13,163
|
|
|||||||
Total debt to third parties
|
22,186
|
|
|
1,495
|
|
|
(8,365
|
)
|
|
(1,967
|
)
|
|
—
|
|
|
372
|
|
|
13,721
|
|
|||||||
Short-term debt to affiliates
|
—
|
|
|
2,910
|
|
|
—
|
|
|
—
|
|
|
(2,910
|
)
|
|
—
|
|
|
—
|
|
|||||||
Long-term debt to affiliates
|
5,600
|
|
|
8,985
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1
|
|
|
14,586
|
|
|||||||
Total debt to affiliates
|
5,600
|
|
|
11,895
|
|
|
—
|
|
|
—
|
|
|
(2,910
|
)
|
|
1
|
|
|
14,586
|
|
|||||||
Total debt
|
$
|
27,786
|
|
|
$
|
13,390
|
|
|
$
|
(8,365
|
)
|
|
$
|
(1,967
|
)
|
|
$
|
(2,910
|
)
|
|
$
|
373
|
|
|
$
|
28,307
|
|
(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 represent net outstanding borrowings on our senior secured revolving credit facility.
|
(2)
|
Other includes:
$299 million
of issuances of short-term debt related to vendor financing arrangements, of which
$291 million
is related to financing of property and equipment. During the
nine months ended
September 30, 2017
, we repaid
$296 million
under the vendor financing arrangements. As of
September 30, 2017
, vendor financing arrangements totaled
$3 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
September 30, 2017
and
December 31, 2016
, capital lease liabilities 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 of Senior Notes Issued
|
$
|
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 income (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 2.00% Senior Secured Term Loan due 2024
|
2,000
|
|
|
—
|
|
|
—
|
|
|||
LIBOR plus 2.750% Senior Secured Term Loan
(2)
|
—
|
|
|
(1,980
|
)
|
|
13
|
|
|||
Total
|
$
|
4,000
|
|
|
$
|
(1,980
|
)
|
|
$
|
13
|
|
(1)
|
Write-off of discounts and issuance costs are included in
Other income (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
.
|
(2)
|
Our Senior Secured Term Loan extinguished during the
nine months ended
September 30, 2017
was Third Party debt.
|
(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 2027
(2)
|
1,250
|
|
|
(28
|
)
|
|
1,222
|
|
|||
6.288% Senior Reset Notes due 2019
|
(1,250
|
)
|
|
—
|
|
|
(1,250
|
)
|
|||
6.366% Senior Reset Notes due 2020
|
(1,250
|
)
|
|
—
|
|
|
(1,250
|
)
|
|||
Total
|
$
|
1,000
|
|
|
$
|
(79
|
)
|
|
$
|
921
|
|
(1)
|
Discounts reduce
Proceeds from issuance of long-term debt
and are included within
Net cash (used in) provided by financing activities
in our
Condensed Consolidated Statements of Cash Flows
.
|
(2)
|
In April 2017, we issued to DT
$750 million
in aggregate principal amount of the
5.375% Senior Notes due 2027
, and in September 2017, we issued to DT the remaining
$500 million
in aggregate principal amount of the
5.375% Senior Notes due 2027
.
|
(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 September 30,
|
|
Nine Months Ended September 30,
|
||||||||||||
(in millions, except shares and per share amounts)
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||||||
Net income
|
$
|
550
|
|
|
$
|
366
|
|
|
$
|
1,829
|
|
|
$
|
1,070
|
|
Less: Dividends on mandatory convertible preferred stock
|
(13
|
)
|
|
(13
|
)
|
|
(41
|
)
|
|
(41
|
)
|
||||
Net income attributable to common stockholders - basic
|
537
|
|
|
353
|
|
|
1,788
|
|
|
1,029
|
|
||||
Add: Dividends related to mandatory convertible preferred stock
|
13
|
|
|
—
|
|
|
41
|
|
|
—
|
|
||||
Net income attributable to common stockholders - diluted
|
$
|
550
|
|
|
$
|
353
|
|
|
$
|
1,829
|
|
|
$
|
1,029
|
|
|
|
|
|
|
|
|
|
||||||||
Weighted average shares outstanding - basic
|
831,189,779
|
|
|
822,998,697
|
|
|
829,974,146
|
|
|
821,626,675
|
|
||||
Effect of dilutive securities:
|
|
|
|
|
|
|
|
||||||||
Outstanding stock options and unvested stock awards
|
7,992,286
|
|
|
9,259,122
|
|
|
9,523,365
|
|
|
9,614,352
|
|
||||
Mandatory convertible preferred stock
|
32,238,000
|
|
|
—
|
|
|
32,238,000
|
|
|
—
|
|
||||
Weighted average shares outstanding - diluted
|
871,420,065
|
|
|
832,257,819
|
|
|
871,735,511
|
|
|
831,241,027
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Earnings per share - basic
|
$
|
0.65
|
|
|
$
|
0.43
|
|
|
$
|
2.15
|
|
|
$
|
1.25
|
|
Earnings per share - diluted
|
$
|
0.63
|
|
|
$
|
0.42
|
|
|
$
|
2.10
|
|
|
$
|
1.24
|
|
|
|
|
|
|
|
|
|
||||||||
Potentially dilutive securities:
|
|
|
|
|
|
|
|
||||||||
Outstanding stock options and unvested stock awards
|
—
|
|
|
278,675
|
|
|
4,760
|
|
|
287,375
|
|
||||
Mandatory convertible preferred stock
|
—
|
|
|
32,238,000
|
|
|
—
|
|
|
32,238,000
|
|
(in millions)
|
Operating Leases
|
|
Purchase Commitments
|
||||
Year ending September 30,
|
|
|
|
||||
2018
|
$
|
2,397
|
|
|
$
|
2,477
|
|
2019
|
2,153
|
|
|
1,210
|
|
||
2020
|
1,867
|
|
|
1,015
|
|
||
2021
|
1,472
|
|
|
759
|
|
||
2022
|
1,163
|
|
|
661
|
|
||
Thereafter
|
2,240
|
|
|
904
|
|
||
Total
|
$
|
11,292
|
|
|
$
|
7,026
|
|
(in millions)
|
Parent
|
|
Issuer
|
|
Guarantor Subsidiaries
|
|
Non-Guarantor Subsidiaries
|
|
Consolidating and Eliminating Adjustments
|
|
Consolidated
|
||||||||||||
Assets
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Current assets
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Cash and cash equivalents
|
$
|
29
|
|
|
$
|
2
|
|
|
$
|
678
|
|
|
$
|
30
|
|
|
$
|
—
|
|
|
$
|
739
|
|
Accounts receivable, net
|
—
|
|
|
—
|
|
|
1,504
|
|
|
230
|
|
|
—
|
|
|
1,734
|
|
||||||
Equipment installment plan receivables, net
|
—
|
|
|
—
|
|
|
2,136
|
|
|
—
|
|
|
—
|
|
|
2,136
|
|
||||||
Accounts receivable from affiliates
|
—
|
|
|
6
|
|
|
24
|
|
|
—
|
|
|
(6
|
)
|
|
24
|
|
||||||
Inventories
|
—
|
|
|
—
|
|
|
999
|
|
|
—
|
|
|
—
|
|
|
999
|
|
||||||
Other current assets
|
—
|
|
|
—
|
|
|
1,241
|
|
|
576
|
|
|
—
|
|
|
1,817
|
|
||||||
Total current assets
|
29
|
|
|
8
|
|
|
6,582
|
|
|
836
|
|
|
(6
|
)
|
|
7,449
|
|
||||||
Property and equipment, net
(1)
|
—
|
|
|
—
|
|
|
21,248
|
|
|
322
|
|
|
—
|
|
|
21,570
|
|
||||||
Goodwill
|
—
|
|
|
—
|
|
|
1,683
|
|
|
—
|
|
|
—
|
|
|
1,683
|
|
||||||
Spectrum licenses
|
—
|
|
|
—
|
|
|
35,007
|
|
|
—
|
|
|
—
|
|
|
35,007
|
|
||||||
Other intangible assets, net
|
—
|
|
|
—
|
|
|
256
|
|
|
—
|
|
|
—
|
|
|
256
|
|
||||||
Investments in subsidiaries, net
|
19,823
|
|
|
37,943
|
|
|
—
|
|
|
—
|
|
|
(57,766
|
)
|
|
—
|
|
||||||
Intercompany receivables and note receivables
|
425
|
|
|
8,903
|
|
|
—
|
|
|
—
|
|
|
(9,328
|
)
|
|
—
|
|
||||||
Equipment installment plan receivables due after one year, net
|
—
|
|
|
—
|
|
|
1,100
|
|
|
—
|
|
|
—
|
|
|
1,100
|
|
||||||
Other assets
|
—
|
|
|
3
|
|
|
778
|
|
|
292
|
|
|
(215
|
)
|
|
858
|
|
||||||
Total assets
|
$
|
20,277
|
|
|
$
|
46,857
|
|
|
$
|
66,654
|
|
|
$
|
1,450
|
|
|
$
|
(67,315
|
)
|
|
$
|
67,923
|
|
Liabilities and Stockholders' Equity
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Current liabilities
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Accounts payable and accrued liabilities
|
$
|
—
|
|
|
$
|
201
|
|
|
$
|
5,626
|
|
|
$
|
244
|
|
|
$
|
—
|
|
|
$
|
6,071
|
|
Payables to affiliates
|
—
|
|
|
250
|
|
|
38
|
|
|
—
|
|
|
—
|
|
|
288
|
|
||||||
Short-term debt
|
—
|
|
|
3
|
|
|
555
|
|
|
—
|
|
|
—
|
|
|
558
|
|
||||||
Short-term debt to affiliates
|
—
|
|
|
—
|
|
|
6
|
|
|
—
|
|
|
(6
|
)
|
|
—
|
|
||||||
Deferred revenue
|
—
|
|
|
—
|
|
|
790
|
|
|
—
|
|
|
—
|
|
|
790
|
|
||||||
Other current liabilities
|
—
|
|
|
—
|
|
|
219
|
|
|
177
|
|
|
—
|
|
|
396
|
|
||||||
Total current liabilities
|
—
|
|
|
454
|
|
|
7,234
|
|
|
421
|
|
|
(6
|
)
|
|
8,103
|
|
||||||
Long-term debt
|
—
|
|
|
11,913
|
|
|
1,250
|
|
|
—
|
|
|
—
|
|
|
13,163
|
|
||||||
Long-term debt to affiliates
|
—
|
|
|
14,586
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
14,586
|
|
||||||
Tower obligations
(1)
|
—
|
|
|
—
|
|
|
395
|
|
|
2,204
|
|
|
—
|
|
|
2,599
|
|
||||||
Deferred tax liabilities
|
—
|
|
|
—
|
|
|
5,750
|
|
|
—
|
|
|
(215
|
)
|
|
5,535
|
|
||||||
Deferred rent expense
|
—
|
|
|
—
|
|
|
2,693
|
|
|
—
|
|
|
—
|
|
|
2,693
|
|
||||||
Negative carrying value of subsidiaries, net
|
—
|
|
|
—
|
|
|
596
|
|
|
—
|
|
|
(596
|
)
|
|
—
|
|
||||||
Intercompany payables and debt
|
—
|
|
|
—
|
|
|
9,119
|
|
|
209
|
|
|
(9,328
|
)
|
|
—
|
|
||||||
Other long-term liabilities
|
—
|
|
|
81
|
|
|
884
|
|
|
2
|
|
|
—
|
|
|
967
|
|
||||||
Total long-term liabilities
|
—
|
|
|
26,580
|
|
|
20,687
|
|
|
2,415
|
|
|
(10,139
|
)
|
|
39,543
|
|
||||||
Total stockholders' equity (deficit)
|
20,277
|
|
|
19,823
|
|
|
38,733
|
|
|
(1,386
|
)
|
|
(57,170
|
)
|
|
20,277
|
|
||||||
Total liabilities and stockholders' equity
|
$
|
20,277
|
|
|
$
|
46,857
|
|
|
$
|
66,654
|
|
|
$
|
1,450
|
|
|
$
|
(67,315
|
)
|
|
$
|
67,923
|
|
(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 and note 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 and debt
|
—
|
|
|
—
|
|
|
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
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
7,312
|
|
|
$
|
527
|
|
|
$
|
(210
|
)
|
|
$
|
7,629
|
|
Equipment revenues
|
—
|
|
|
—
|
|
|
2,160
|
|
|
—
|
|
|
(42
|
)
|
|
2,118
|
|
||||||
Other revenues
|
—
|
|
|
—
|
|
|
224
|
|
|
55
|
|
|
(7
|
)
|
|
272
|
|
||||||
Total revenues
|
—
|
|
|
—
|
|
|
9,696
|
|
|
582
|
|
|
(259
|
)
|
|
10,019
|
|
||||||
Operating expenses
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Cost of services, exclusive of depreciation and amortization shown separately below
|
—
|
|
|
—
|
|
|
1,588
|
|
|
6
|
|
|
—
|
|
|
1,594
|
|
||||||
Cost of equipment sales
|
—
|
|
|
—
|
|
|
2,418
|
|
|
241
|
|
|
(42
|
)
|
|
2,617
|
|
||||||
Selling, general and administrative
|
—
|
|
|
—
|
|
|
3,106
|
|
|
209
|
|
|
(217
|
)
|
|
3,098
|
|
||||||
Depreciation and amortization
|
—
|
|
|
—
|
|
|
1,399
|
|
|
17
|
|
|
—
|
|
|
1,416
|
|
||||||
Gains on disposal of spectrum licenses
|
—
|
|
|
—
|
|
|
(29
|
)
|
|
—
|
|
|
—
|
|
|
(29
|
)
|
||||||
Total operating expense
|
—
|
|
|
—
|
|
|
8,482
|
|
|
473
|
|
|
(259
|
)
|
|
8,696
|
|
||||||
Operating income
|
—
|
|
|
—
|
|
|
1,214
|
|
|
109
|
|
|
—
|
|
|
1,323
|
|
||||||
Other income (expense)
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Interest expense
|
—
|
|
|
(176
|
)
|
|
(30
|
)
|
|
(47
|
)
|
|
—
|
|
|
(253
|
)
|
||||||
Interest expense to affiliates
|
—
|
|
|
(167
|
)
|
|
(6
|
)
|
|
—
|
|
|
6
|
|
|
(167
|
)
|
||||||
Interest income
|
—
|
|
|
7
|
|
|
1
|
|
|
—
|
|
|
(6
|
)
|
|
2
|
|
||||||
Other expense, net
|
—
|
|
|
1
|
|
|
1
|
|
|
(1
|
)
|
|
—
|
|
|
1
|
|
||||||
Total other expense, net
|
—
|
|
|
(335
|
)
|
|
(34
|
)
|
|
(48
|
)
|
|
—
|
|
|
(417
|
)
|
||||||
Income (loss) before income taxes
|
—
|
|
|
(335
|
)
|
|
1,180
|
|
|
61
|
|
|
—
|
|
|
906
|
|
||||||
Income tax expense
|
—
|
|
|
—
|
|
|
(335
|
)
|
|
(21
|
)
|
|
—
|
|
|
(356
|
)
|
||||||
Earnings of subsidiaries
|
550
|
|
|
885
|
|
|
—
|
|
|
—
|
|
|
(1,435
|
)
|
|
—
|
|
||||||
Net income
|
550
|
|
|
550
|
|
|
845
|
|
|
40
|
|
|
(1,435
|
)
|
|
550
|
|
||||||
Dividends on preferred stock
|
(13
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(13
|
)
|
||||||
Net income attributable to common stockholders
|
$
|
537
|
|
|
$
|
550
|
|
|
$
|
845
|
|
|
$
|
40
|
|
|
$
|
(1,435
|
)
|
|
$
|
537
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Net Income
|
$
|
550
|
|
|
$
|
550
|
|
|
$
|
845
|
|
|
$
|
40
|
|
|
$
|
(1,435
|
)
|
|
$
|
550
|
|
Other comprehensive income (loss), net of tax
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Other comprehensive income (loss), net of tax
|
1
|
|
|
1
|
|
|
1
|
|
|
—
|
|
|
(2
|
)
|
|
1
|
|
||||||
Total comprehensive income
|
$
|
551
|
|
|
$
|
551
|
|
|
$
|
846
|
|
|
$
|
40
|
|
|
$
|
(1,437
|
)
|
|
$
|
551
|
|
(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
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
6,822
|
|
|
$
|
520
|
|
|
$
|
(209
|
)
|
|
$
|
7,133
|
|
Equipment revenues
|
—
|
|
|
—
|
|
|
2,049
|
|
|
—
|
|
|
(101
|
)
|
|
1,948
|
|
||||||
Other revenues
|
—
|
|
|
—
|
|
|
180
|
|
(1)
|
48
|
|
|
(4
|
)
|
|
224
|
|
||||||
Total revenues
|
—
|
|
|
—
|
|
|
9,051
|
|
(1)
|
568
|
|
|
(314
|
)
|
|
9,305
|
|
||||||
Operating expenses
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Cost of services, exclusive of depreciation and amortization shown separately below
|
—
|
|
|
—
|
|
|
1,430
|
|
|
6
|
|
|
—
|
|
|
1,436
|
|
||||||
Cost of equipment sales
|
—
|
|
|
—
|
|
|
2,340
|
|
|
300
|
|
|
(101
|
)
|
|
2,539
|
|
||||||
Selling, general and administrative
|
—
|
|
|
—
|
|
|
2,884
|
|
|
227
|
|
|
(213
|
)
|
|
2,898
|
|
||||||
Depreciation and amortization
|
—
|
|
|
—
|
|
|
1,549
|
|
|
19
|
|
|
—
|
|
|
1,568
|
|
||||||
Cost of MetroPCS business combination
|
—
|
|
|
—
|
|
|
15
|
|
|
—
|
|
|
—
|
|
|
15
|
|
||||||
Gains on disposal of spectrum licenses
|
—
|
|
|
—
|
|
|
(199
|
)
|
|
—
|
|
|
—
|
|
|
(199
|
)
|
||||||
Total operating expense
|
—
|
|
|
—
|
|
|
8,019
|
|
|
552
|
|
|
(314
|
)
|
|
8,257
|
|
||||||
Operating income
|
—
|
|
|
—
|
|
|
1,032
|
|
(1)
|
16
|
|
|
—
|
|
|
1,048
|
|
||||||
Other income (expense)
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Interest expense
|
—
|
|
|
(303
|
)
|
|
(26
|
)
|
|
(47
|
)
|
|
—
|
|
|
(376
|
)
|
||||||
Interest expense to affiliates
|
—
|
|
|
(76
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(76
|
)
|
||||||
Interest income
|
—
|
|
|
7
|
|
|
(4
|
)
|
(1)
|
—
|
|
|
—
|
|
|
3
|
|
||||||
Other expense, net
|
—
|
|
|
—
|
|
|
(1
|
)
|
|
—
|
|
|
—
|
|
|
(1
|
)
|
||||||
Total other expense, net
|
—
|
|
|
(372
|
)
|
|
(31
|
)
|
(1)
|
(47
|
)
|
|
—
|
|
|
(450
|
)
|
||||||
Income (loss) before income taxes
|
—
|
|
|
(372
|
)
|
|
1,001
|
|
|
(31
|
)
|
|
—
|
|
|
598
|
|
||||||
Income tax (expense) benefit
|
—
|
|
|
—
|
|
|
(242
|
)
|
|
10
|
|
|
—
|
|
|
(232
|
)
|
||||||
Earnings (loss) of subsidiaries
|
366
|
|
|
738
|
|
|
(4
|
)
|
|
—
|
|
|
(1,100
|
)
|
|
—
|
|
||||||
Net income (loss)
|
366
|
|
|
366
|
|
|
755
|
|
|
(21
|
)
|
|
(1,100
|
)
|
|
366
|
|
||||||
Dividends on preferred stock
|
(13
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(13
|
)
|
||||||
Net income attributable to common stockholders
|
$
|
353
|
|
|
$
|
366
|
|
|
$
|
755
|
|
|
$
|
(21
|
)
|
|
$
|
(1,100
|
)
|
|
$
|
353
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Net Income (loss)
|
$
|
366
|
|
|
$
|
366
|
|
|
$
|
755
|
|
|
$
|
(21
|
)
|
|
$
|
(1,100
|
)
|
|
$
|
366
|
|
Other comprehensive income, net of tax
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Other comprehensive income, net of tax
|
2
|
|
|
2
|
|
|
2
|
|
|
2
|
|
|
(6
|
)
|
|
2
|
|
||||||
Total comprehensive income (loss)
|
$
|
368
|
|
|
$
|
368
|
|
|
$
|
757
|
|
|
$
|
(19
|
)
|
|
$
|
(1,106
|
)
|
|
$
|
368
|
|
(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
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
21,457
|
|
|
$
|
1,580
|
|
|
$
|
(634
|
)
|
|
$
|
22,403
|
|
Equipment revenues
|
—
|
|
|
—
|
|
|
6,878
|
|
|
—
|
|
|
(211
|
)
|
|
6,667
|
|
||||||
Other revenues
|
—
|
|
|
—
|
|
|
634
|
|
|
158
|
|
|
(17
|
)
|
|
775
|
|
||||||
Total revenues
|
—
|
|
|
—
|
|
|
28,969
|
|
|
1,738
|
|
|
(862
|
)
|
|
29,845
|
|
||||||
Operating expenses
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Cost of services, exclusive of depreciation and amortization shown separately below
|
—
|
|
|
—
|
|
|
4,502
|
|
|
18
|
|
|
—
|
|
|
4,520
|
|
||||||
Cost of equipment sales
|
—
|
|
|
—
|
|
|
7,622
|
|
|
738
|
|
|
(211
|
)
|
|
8,149
|
|
||||||
Selling, general and administrative
|
—
|
|
|
—
|
|
|
8,967
|
|
|
652
|
|
|
(651
|
)
|
|
8,968
|
|
||||||
Depreciation and amortization
|
—
|
|
|
—
|
|
|
4,446
|
|
|
53
|
|
|
—
|
|
|
4,499
|
|
||||||
Gains on disposal of spectrum licenses
|
—
|
|
|
—
|
|
|
(67
|
)
|
|
—
|
|
|
—
|
|
|
(67
|
)
|
||||||
Total operating expenses
|
—
|
|
|
—
|
|
|
25,470
|
|
|
1,461
|
|
|
(862
|
)
|
|
26,069
|
|
||||||
Operating income
|
—
|
|
|
—
|
|
|
3,499
|
|
|
277
|
|
|
—
|
|
|
3,776
|
|
||||||
Other income (expense)
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Interest expense
|
—
|
|
|
(634
|
)
|
|
(80
|
)
|
|
(143
|
)
|
|
—
|
|
|
(857
|
)
|
||||||
Interest expense to affiliates
|
—
|
|
|
(398
|
)
|
|
(18
|
)
|
|
—
|
|
|
18
|
|
|
(398
|
)
|
||||||
Interest income
|
—
|
|
|
24
|
|
|
9
|
|
|
—
|
|
|
(18
|
)
|
|
15
|
|
||||||
Other expense, net
|
—
|
|
|
(87
|
)
|
|
(1
|
)
|
|
(1
|
)
|
|
—
|
|
|
(89
|
)
|
||||||
Total other expense, net
|
—
|
|
|
(1,095
|
)
|
|
(90
|
)
|
|
(144
|
)
|
|
—
|
|
|
(1,329
|
)
|
||||||
Income (loss) before income taxes
|
—
|
|
|
(1,095
|
)
|
|
3,409
|
|
|
133
|
|
|
—
|
|
|
2,447
|
|
||||||
Income tax expense
|
—
|
|
|
—
|
|
|
(572
|
)
|
|
(46
|
)
|
|
—
|
|
|
(618
|
)
|
||||||
Earnings (loss) of subsidiaries
|
1,829
|
|
|
2,924
|
|
|
(17
|
)
|
|
—
|
|
|
(4,736
|
)
|
|
—
|
|
||||||
Net income
|
1,829
|
|
|
1,829
|
|
|
2,820
|
|
|
87
|
|
|
(4,736
|
)
|
|
1,829
|
|
||||||
Dividends on preferred stock
|
(41
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(41
|
)
|
||||||
Net income attributable to common stockholders
|
$
|
1,788
|
|
|
$
|
1,829
|
|
|
$
|
2,820
|
|
|
$
|
87
|
|
|
$
|
(4,736
|
)
|
|
$
|
1,788
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Net Income
|
$
|
1,829
|
|
|
$
|
1,829
|
|
|
$
|
2,820
|
|
|
$
|
87
|
|
|
$
|
(4,736
|
)
|
|
$
|
1,829
|
|
Other comprehensive income, net of tax
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Other comprehensive income, net of tax
|
3
|
|
|
3
|
|
|
3
|
|
|
—
|
|
|
(6
|
)
|
|
3
|
|
||||||
Total comprehensive income
|
$
|
1,832
|
|
|
$
|
1,832
|
|
|
$
|
2,823
|
|
|
$
|
87
|
|
|
$
|
(4,742
|
)
|
|
$
|
1,832
|
|
(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
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
19,683
|
|
|
$
|
1,500
|
|
|
$
|
(584
|
)
|
|
$
|
20,599
|
|
Equipment revenues
|
—
|
|
|
—
|
|
|
6,328
|
|
|
—
|
|
|
(341
|
)
|
|
5,987
|
|
||||||
Other revenues
|
—
|
|
|
—
|
|
|
538
|
|
(1)
|
145
|
|
|
(13
|
)
|
|
670
|
|
||||||
Total revenues
|
—
|
|
|
—
|
|
|
26,549
|
|
(1)
|
1,645
|
|
|
(938
|
)
|
|
27,256
|
|
||||||
Operating expenses
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Cost of services, exclusive of depreciation and amortization shown separately below
|
—
|
|
|
—
|
|
|
4,268
|
|
|
18
|
|
|
—
|
|
|
4,286
|
|
||||||
Cost of equipment sales
|
—
|
|
|
—
|
|
|
7,104
|
|
|
768
|
|
|
(340
|
)
|
|
7,532
|
|
||||||
Selling, general and administrative
|
—
|
|
|
—
|
|
|
8,372
|
|
|
645
|
|
|
(598
|
)
|
|
8,419
|
|
||||||
Depreciation and amortization
|
—
|
|
|
—
|
|
|
4,636
|
|
|
59
|
|
|
—
|
|
|
4,695
|
|
||||||
Cost of MetroPCS business combination
|
—
|
|
|
—
|
|
|
110
|
|
|
—
|
|
|
—
|
|
|
110
|
|
||||||
Gains on disposal of spectrum licenses
|
—
|
|
|
—
|
|
|
(835
|
)
|
|
—
|
|
|
—
|
|
|
(835
|
)
|
||||||
Total operating expenses
|
—
|
|
|
—
|
|
|
23,655
|
|
|
1,490
|
|
|
(938
|
)
|
|
24,207
|
|
||||||
Operating income
|
—
|
|
|
—
|
|
|
2,894
|
|
(1)
|
155
|
|
|
—
|
|
|
3,049
|
|
||||||
Other income (expense)
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Interest expense
|
—
|
|
|
(881
|
)
|
|
(61
|
)
|
|
(141
|
)
|
|
—
|
|
|
(1,083
|
)
|
||||||
Interest expense to affiliates
|
—
|
|
|
(248
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(248
|
)
|
||||||
Interest income
|
—
|
|
|
23
|
|
|
(14
|
)
|
(1)
|
—
|
|
|
—
|
|
|
9
|
|
||||||
Other expense, net
|
—
|
|
|
—
|
|
|
(6
|
)
|
|
—
|
|
|
—
|
|
|
(6
|
)
|
||||||
Total other expense, net
|
—
|
|
|
(1,106
|
)
|
|
(81
|
)
|
(1)
|
(141
|
)
|
|
—
|
|
|
(1,328
|
)
|
||||||
Income (loss) before income taxes
|
—
|
|
|
(1,106
|
)
|
|
2,813
|
|
|
14
|
|
|
—
|
|
|
1,721
|
|
||||||
Income tax expense
|
—
|
|
|
—
|
|
|
(643
|
)
|
|
(8
|
)
|
|
—
|
|
|
(651
|
)
|
||||||
Earnings (loss) of subsidiaries
|
1,070
|
|
|
2,176
|
|
|
(15
|
)
|
|
—
|
|
|
(3,231
|
)
|
|
—
|
|
||||||
Net income
|
1,070
|
|
|
1,070
|
|
|
2,155
|
|
|
6
|
|
|
(3,231
|
)
|
|
1,070
|
|
||||||
Dividends on preferred stock
|
(41
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(41
|
)
|
||||||
Net income attributable to common stockholders
|
$
|
1,029
|
|
|
$
|
1,070
|
|
|
$
|
2,155
|
|
|
$
|
6
|
|
|
$
|
(3,231
|
)
|
|
$
|
1,029
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Net income
|
$
|
1,070
|
|
|
$
|
1,070
|
|
|
$
|
2,155
|
|
|
$
|
6
|
|
|
$
|
(3,231
|
)
|
|
$
|
1,070
|
|
Other comprehensive income, net of tax
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Other comprehensive income, net of tax
|
2
|
|
|
2
|
|
|
2
|
|
|
2
|
|
|
(6
|
)
|
|
2
|
|
||||||
Total comprehensive income
|
$
|
1,072
|
|
|
$
|
1,072
|
|
|
$
|
2,157
|
|
|
$
|
8
|
|
|
$
|
(3,237
|
)
|
|
$
|
1,072
|
|
(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
|
$
|
(2
|
)
|
|
$
|
(1,554
|
)
|
|
$
|
3,904
|
|
|
$
|
14
|
|
|
$
|
—
|
|
|
$
|
2,362
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Investing activities
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Purchases of property and equipment
|
—
|
|
|
—
|
|
|
(1,441
|
)
|
|
—
|
|
|
—
|
|
|
(1,441
|
)
|
||||||
Purchases of spectrum licenses and other intangible assets, including deposits
|
—
|
|
|
—
|
|
|
(15
|
)
|
|
—
|
|
|
—
|
|
|
(15
|
)
|
||||||
Other, net
|
—
|
|
|
—
|
|
|
1
|
|
|
—
|
|
|
—
|
|
|
1
|
|
||||||
Net cash used in investing activities
|
—
|
|
|
—
|
|
|
(1,455
|
)
|
|
—
|
|
|
—
|
|
|
(1,455
|
)
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Financing activities
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Proceeds from issuance of long-term debt
|
—
|
|
|
500
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
500
|
|
||||||
Proceeds from borrowing on revolving credit facility, net
|
—
|
|
|
1,055
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,055
|
|
||||||
Repayments of revolving credit facility
|
—
|
|
|
—
|
|
|
(1,735
|
)
|
|
—
|
|
|
—
|
|
|
(1,735
|
)
|
||||||
Repayments of capital lease obligations
|
—
|
|
|
—
|
|
|
(141
|
)
|
|
—
|
|
|
—
|
|
|
(141
|
)
|
||||||
Repayments of short-term debt for purchases of inventory, property and equipment, net
|
—
|
|
|
—
|
|
|
(4
|
)
|
|
—
|
|
|
—
|
|
|
(4
|
)
|
||||||
Tax withholdings on share-based awards
|
—
|
|
|
—
|
|
|
(6
|
)
|
|
—
|
|
|
—
|
|
|
(6
|
)
|
||||||
Dividends on preferred stock
|
(13
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(13
|
)
|
||||||
Other, net
|
1
|
|
|
—
|
|
|
(6
|
)
|
|
—
|
|
|
—
|
|
|
(5
|
)
|
||||||
Net cash (used in) provided by financing activities
|
(12
|
)
|
|
1,555
|
|
|
(1,892
|
)
|
|
—
|
|
|
—
|
|
|
(349
|
)
|
||||||
Change in cash and cash equivalents
|
(14
|
)
|
|
1
|
|
|
557
|
|
|
14
|
|
|
—
|
|
|
558
|
|
||||||
Cash and cash equivalents
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Beginning of period
|
43
|
|
|
1
|
|
|
121
|
|
|
16
|
|
|
—
|
|
|
181
|
|
||||||
End of period
|
$
|
29
|
|
|
$
|
2
|
|
|
$
|
678
|
|
|
$
|
30
|
|
|
$
|
—
|
|
|
$
|
739
|
|
(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
|
|
|
$
|
(84
|
)
|
|
$
|
1,850
|
|
|
$
|
8
|
|
|
$
|
(35
|
)
|
|
$
|
1,740
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Investing activities
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Purchases of property and equipment
|
—
|
|
|
—
|
|
|
(1,159
|
)
|
|
—
|
|
|
—
|
|
|
(1,159
|
)
|
||||||
Purchases of spectrum licenses and other intangible assets, including deposits
|
—
|
|
|
—
|
|
|
(705
|
)
|
|
—
|
|
|
—
|
|
|
(705
|
)
|
||||||
Other, net
|
—
|
|
|
—
|
|
|
5
|
|
|
—
|
|
|
—
|
|
|
5
|
|
||||||
Net cash used in investing activities
|
—
|
|
|
—
|
|
|
(1,859
|
)
|
|
—
|
|
|
—
|
|
|
(1,859
|
)
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Financing activities
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Repayments of capital lease obligations
|
—
|
|
|
—
|
|
|
(54
|
)
|
|
—
|
|
|
—
|
|
|
(54
|
)
|
||||||
Repayments of long-term debt
|
—
|
|
|
—
|
|
|
(5
|
)
|
|
—
|
|
|
—
|
|
|
(5
|
)
|
||||||
Tax withholdings on share-based awards
|
—
|
|
|
—
|
|
|
(3
|
)
|
|
—
|
|
|
—
|
|
|
(3
|
)
|
||||||
Intercompany dividend paid
|
—
|
|
|
—
|
|
|
—
|
|
|
(35
|
)
|
|
35
|
|
|
—
|
|
||||||
Dividends on preferred stock
|
(13
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(13
|
)
|
||||||
Other, net
|
11
|
|
|
—
|
|
|
(3
|
)
|
|
—
|
|
|
—
|
|
|
8
|
|
||||||
Net cash used in financing activities
|
(2
|
)
|
|
—
|
|
|
(65
|
)
|
|
(35
|
)
|
|
35
|
|
|
(67
|
)
|
||||||
Change in cash and cash equivalents
|
(1
|
)
|
|
(84
|
)
|
|
(74
|
)
|
|
(27
|
)
|
|
—
|
|
|
(186
|
)
|
||||||
Cash and cash equivalents
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Beginning of period
|
367
|
|
|
2,683
|
|
|
2,439
|
|
|
49
|
|
|
—
|
|
|
5,538
|
|
||||||
End of period
|
$
|
366
|
|
|
$
|
2,599
|
|
|
$
|
2,365
|
|
|
$
|
22
|
|
|
$
|
—
|
|
|
$
|
5,352
|
|
(in millions)
|
Parent
|
|
Issuer
|
|
Guarantor Subsidiaries
|
|
Non-Guarantor Subsidiaries
|
|
Consolidating and Eliminating Adjustments
|
|
Consolidated
|
||||||||||||
Operating activities
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Net cash provided by (used in) operating activities
|
$
|
—
|
|
|
$
|
(16,429
|
)
|
|
$
|
22,370
|
|
|
$
|
43
|
|
|
$
|
(80
|
)
|
|
$
|
5,904
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Investing activities
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Purchases of property and equipment
|
—
|
|
|
—
|
|
|
(4,316
|
)
|
|
—
|
|
|
—
|
|
|
(4,316
|
)
|
||||||
Purchases of spectrum licenses and other intangible assets, including deposits
|
—
|
|
|
—
|
|
|
(5,820
|
)
|
|
—
|
|
|
—
|
|
|
(5,820
|
)
|
||||||
Equity investment in subsidiary
|
(308
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
308
|
|
|
—
|
|
||||||
Other, net
|
—
|
|
|
—
|
|
|
(2
|
)
|
|
—
|
|
|
—
|
|
|
(2
|
)
|
||||||
Net cash used in investing activities
|
(308
|
)
|
|
—
|
|
|
(10,138
|
)
|
|
—
|
|
|
308
|
|
|
(10,138
|
)
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Financing activities
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Proceeds from issuance of long-term debt
|
—
|
|
|
10,480
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
10,480
|
|
||||||
Proceeds from borrowing on revolving credit facility, net
|
—
|
|
|
2,910
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
2,910
|
|
||||||
Repayments of revolving credit facility
|
—
|
|
|
—
|
|
|
(2,910
|
)
|
|
—
|
|
|
—
|
|
|
(2,910
|
)
|
||||||
Repayments of capital lease obligations
|
—
|
|
|
—
|
|
|
(350
|
)
|
|
—
|
|
|
—
|
|
|
(350
|
)
|
||||||
Repayments of short-term debt for purchases of inventory, property and equipment, net
|
—
|
|
|
—
|
|
|
(296
|
)
|
|
—
|
|
|
—
|
|
|
(296
|
)
|
||||||
Repayments of long-term debt
|
—
|
|
|
—
|
|
|
(10,230
|
)
|
|
—
|
|
|
—
|
|
|
(10,230
|
)
|
||||||
Equity investment from parent
|
—
|
|
|
308
|
|
|
—
|
|
|
—
|
|
|
(308
|
)
|
|
—
|
|
||||||
Tax withholdings on share-based awards
|
—
|
|
|
—
|
|
|
(101
|
)
|
|
—
|
|
|
—
|
|
|
(101
|
)
|
||||||
Intercompany dividend paid
|
—
|
|
|
—
|
|
|
—
|
|
|
(80
|
)
|
|
80
|
|
|
—
|
|
||||||
Dividends on preferred stock
|
(41
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(41
|
)
|
||||||
Other, net
|
20
|
|
|
—
|
|
|
(9
|
)
|
|
—
|
|
|
—
|
|
|
11
|
|
||||||
Net cash (used in) provided by financing activities
|
(21
|
)
|
|
13,698
|
|
|
(13,896
|
)
|
|
(80
|
)
|
|
(228
|
)
|
|
(527
|
)
|
||||||
Change in cash and cash equivalents
|
(329
|
)
|
|
(2,731
|
)
|
|
(1,664
|
)
|
|
(37
|
)
|
|
—
|
|
|
(4,761
|
)
|
||||||
Cash and cash equivalents
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Beginning of period
|
358
|
|
|
2,733
|
|
|
2,342
|
|
|
67
|
|
|
—
|
|
|
5,500
|
|
||||||
End of period
|
$
|
29
|
|
|
$
|
2
|
|
|
$
|
678
|
|
|
$
|
30
|
|
|
$
|
—
|
|
|
$
|
739
|
|
(in millions)
|
Parent
|
|
Issuer
|
|
Guarantor Subsidiaries
|
|
Non-Guarantor Subsidiaries
|
|
Consolidating and Eliminating Adjustments
|
|
Consolidated
|
||||||||||||
Operating activities
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Net cash provided by (used in) operating activities
|
$
|
4
|
|
|
$
|
(2,165
|
)
|
|
$
|
6,745
|
|
|
$
|
59
|
|
|
$
|
(110
|
)
|
|
$
|
4,533
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Investing activities
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Purchases of property and equipment
|
—
|
|
|
—
|
|
|
(3,843
|
)
|
|
—
|
|
|
—
|
|
|
(3,843
|
)
|
||||||
Purchases of spectrum licenses and other intangible assets, including deposits
|
—
|
|
|
—
|
|
|
(3,544
|
)
|
|
—
|
|
|
—
|
|
|
(3,544
|
)
|
||||||
Sales of short-term investments
|
—
|
|
|
2,000
|
|
|
998
|
|
|
—
|
|
|
—
|
|
|
2,998
|
|
||||||
Other, net
|
—
|
|
|
—
|
|
|
3
|
|
|
—
|
|
|
—
|
|
|
3
|
|
||||||
Net cash provided by (used in) investing activities
|
—
|
|
|
2,000
|
|
|
(6,386
|
)
|
|
—
|
|
|
—
|
|
|
(4,386
|
)
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Financing activities
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Proceeds from issuance of long-term debt
|
—
|
|
|
997
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
997
|
|
||||||
Repayments of capital lease obligations
|
—
|
|
|
—
|
|
|
(133
|
)
|
|
—
|
|
|
—
|
|
|
(133
|
)
|
||||||
Repayments of short-term debt for purchases of inventory, property and equipment, net
|
—
|
|
|
—
|
|
|
(150
|
)
|
|
—
|
|
|
—
|
|
|
(150
|
)
|
||||||
Repayments of long-term debt
|
—
|
|
|
—
|
|
|
(15
|
)
|
|
—
|
|
|
—
|
|
|
(15
|
)
|
||||||
Tax withholdings on share-based awards
|
—
|
|
|
—
|
|
|
(52
|
)
|
|
—
|
|
|
—
|
|
|
(52
|
)
|
||||||
Intercompany dividend paid
|
—
|
|
|
—
|
|
|
—
|
|
|
(110
|
)
|
|
110
|
|
|
—
|
|
||||||
Dividends on preferred stock
|
(41
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(41
|
)
|
||||||
Other, net
|
25
|
|
|
—
|
|
|
(8
|
)
|
|
—
|
|
|
—
|
|
|
17
|
|
||||||
Net cash (used in) provided by financing activities
|
(16
|
)
|
|
997
|
|
|
(358
|
)
|
|
(110
|
)
|
|
110
|
|
|
623
|
|
||||||
Change in cash and cash equivalents
|
(12
|
)
|
|
832
|
|
|
1
|
|
|
(51
|
)
|
|
—
|
|
|
770
|
|
||||||
Cash and cash equivalents
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Beginning of period
|
378
|
|
|
1,767
|
|
|
2,364
|
|
|
73
|
|
|
—
|
|
|
4,582
|
|
||||||
End of period
|
$
|
366
|
|
|
$
|
2,599
|
|
|
$
|
2,365
|
|
|
$
|
22
|
|
|
$
|
—
|
|
|
$
|
5,352
|
|
•
|
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 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.
|
(in millions, except per share amounts, ARPU, ABPU, and bad debt expense and losses from sales of receivables as a percentage of total revenues)
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||
2017
|
|
2017
|
|||||
Increase (Decrease)
|
|
|
|
||||
Revenues
|
|
|
|
||||
Branded postpaid revenues
|
$
|
(20
|
)
|
|
$
|
(20
|
)
|
Of which, branded postpaid phone revenues
|
(19
|
)
|
|
(19
|
)
|
||
Branded prepaid revenues
|
(11
|
)
|
|
(11
|
)
|
||
Total service revenues
|
(31
|
)
|
|
(31
|
)
|
||
Equipment revenues
|
(8
|
)
|
|
(8
|
)
|
||
Total revenues
|
$
|
(39
|
)
|
|
$
|
(39
|
)
|
|
|
|
|
||||
Operating expenses
|
|
|
|
||||
Cost of services
|
$
|
69
|
|
|
$
|
69
|
|
Cost of equipment sales
|
4
|
|
|
4
|
|
||
Selling, general and administrative
|
36
|
|
|
36
|
|
||
Of which, bad debt expense
|
20
|
|
|
20
|
|
||
Total operating expense
|
$
|
109
|
|
|
$
|
109
|
|
|
|
|
|
||||
Operating income
|
$
|
(148
|
)
|
|
$
|
(148
|
)
|
Net income
|
$
|
(90
|
)
|
|
$
|
(90
|
)
|
|
|
|
|
||||
Earnings per share - basic
|
$
|
(0.11
|
)
|
|
$
|
(0.11
|
)
|
Earnings per share - diluted
|
$
|
(0.10
|
)
|
|
$
|
(0.10
|
)
|
|
|
|
|
||||
Operating measures
|
|
|
|
||||
Bad debt expense and losses from sales of receivables as a percentage of total revenues
|
0.20
|
%
|
|
0.07
|
%
|
||
Branded postpaid phone ARPU
|
$
|
(0.19
|
)
|
|
$
|
(0.07
|
)
|
Branded postpaid ABPU
|
$
|
(0.18
|
)
|
|
$
|
(0.06
|
)
|
Branded prepaid ARPU
|
$
|
(0.18
|
)
|
|
$
|
(0.06
|
)
|
|
|
|
|
||||
Non-GAAP financial measures
|
|
|
|
||||
Adjusted EBITDA
|
$
|
(148
|
)
|
|
$
|
(148
|
)
|
•
|
Total revenues of
$10.0 billion
for the
three months ended
September 30, 2017
, increased
$714 million
, or
8%
. The increase was 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
$7.6 billion
for the
three months ended
September 30, 2017
, increased
$496 million
, or
7%
. The increase was primarily due to growth in our average branded customer base as a result of strong customer response to our Un-carrier initiatives, promotions and the success of our MetroPCS brand.
|
•
|
Equipment revenues of
$2.1 billion
for the
three months ended
September 30, 2017
, increased
$170 million
, or
9%
. The increase was primarily due to an increase from customer purchases of leased devices at the end of the lease term, the liquidation of returned customer handsets and a higher average revenue per device sold, partially offset by lower lease revenues.
|
•
|
Operating income of
$1.3 billion
for the
three months ended
September 30, 2017
, increased
$275 million
, or
26%
. The increase was primarily due to an increase in total service revenues and lower Depreciation and amortization, partially offset by higher Selling, general and administrative expenses, higher Cost of services expense and a decrease in
Gains on disposal of spectrum licenses
.
|
•
|
Net income of
$550 million
for the
three months ended
September 30, 2017
, increased
$184 million
, or
50%
. The increase was primarily due to higher operating income driven by the factors described above and a net decrease in interest expense, partially offset by higher income tax expense primarily due to an increase in income before income taxes and the negative impact from hurricanes. Net income
included
net, after-tax gains of
$18 million
and
$122 million
, for the
three months ended
September 30, 2017
and
2016
,
respectively.
|
•
|
Adjusted EBITDA (see “Performance Measures”), a non-GAAP financial measure, of
$2.8 billion
for the
three months ended
September 30, 2017
, increased
$133 million
, or
5%
. The increase was primarily due to higher operating income driven by the factors described above, partially offset by lower Gains on disposal of spectrum licenses. Adjusted EBITDA included pre-tax spectrum gains of
$29 million
and
$199 million
for the
three months ended
September 30, 2017
and
2016
, respectively.
|
•
|
Net cash provided by operating activities of
$2.4 billion
for the
three months ended
September 30, 2017
, increased
$622 million
, or
36%
(see “Liquidity and Capital Resources”).
|
•
|
Free Cash Flow, a non-GAAP financial measure, of
$921 million
for the
three months ended
September 30, 2017
, increased
$340 million
, or
59%
(see “Liquidity and Capital Resources”).
|
•
|
Total revenues of
$29.8 billion
for the
nine months ended
September 30, 2017
, increased
$2.6 billion
, or
9%
. The increase was 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
$22.4 billion
for the
nine months ended
September 30, 2017
, increased
$1.8 billion
, or
9%
. The increase was primarily due to growth in our average branded customer base as a result of strong customer response to our Un-carrier initiatives, promotions and the success of our MetroPCS brand.
|
•
|
Equipment revenues of
$6.7 billion
for the
nine months ended
September 30, 2017
, increased
$680 million
, or
11%
. The increase was primarily due to higher average revenue per device sold and an increase from customer purchases of leased devices at the end of the lease term, partially offset by lower lease revenues.
|
•
|
Operating income of
$3.8 billion
for the
nine months ended
September 30, 2017
, increased
$727 million
, or
24%
. The increase was primarily due to higher Total service revenues and lower Depreciation and amortization, partially offset by lower
Gains on disposal of spectrum licenses
and higher
Selling, general and administrative
and Cost of services expenses.
|
•
|
Net income of
$1.8 billion
for the
nine months ended
September 30, 2017
, increased
$759 million
, or
71%
. The increase was primarily due to higher operating income driven by the factors described above, a lower tax rate primarily due to a reduction in the valuation allowance against deferred tax assets and a net decrease in interest expense, partially offset by the negative impact from hurricanes. Net income
included net, after-tax gains of
$41 million
and
$511 million
, for the
nine months ended
September 30, 2017
and
2016
, respectively.
|
•
|
Adjusted EBITDA, a non-GAAP financial measure, of
$8.5 billion
for the
nine months ended
September 30, 2017
, increased
$470 million
, or
6%
. The increase was primarily due to higher operating income driven by the factors described above, partially offset by lower Gains on disposal of spectrum licenses. Adjusted EBITDA included pre-tax spectrum gains of
$67 million
and
$835 million
for the
nine months ended
September 30, 2017
and
2016
, respectively.
|
•
|
Net cash provided by operating activities of
$5.9 billion
for the
nine months ended
September 30, 2017
, increased
$1.4 billion
, or
30%
(see “Liquidity and Capital Resources”).
|
•
|
Free Cash Flow, a non-GAAP financial measure, of
$1.6 billion
for the
nine months ended
September 30, 2017
, increased
$898 million
, or
130%
(see “Liquidity and Capital Resources”).
|
|
Three Months Ended September 30,
|
|
Change
|
|
Nine Months Ended September 30,
|
|
Change
|
||||||||||||||||||||||
|
2017
|
|
2016
|
|
$
|
|
%
|
|
2017
|
|
2016
|
|
$
|
|
%
|
||||||||||||||
(in millions)
|
|
|
(As Adjusted - See Note 1)
|
|
|
|
|
|
(As Adjusted - See Note 1)
|
|
|
||||||||||||||||||
Revenues
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Branded postpaid revenues
|
$
|
4,920
|
|
|
$
|
4,647
|
|
|
$
|
273
|
|
|
6
|
%
|
|
$
|
14,465
|
|
|
$
|
13,458
|
|
|
$
|
1,007
|
|
|
7
|
%
|
Branded prepaid revenues
|
2,376
|
|
|
2,182
|
|
|
194
|
|
|
9
|
%
|
|
7,009
|
|
|
6,326
|
|
|
683
|
|
|
11
|
%
|
||||||
Wholesale revenues
|
274
|
|
|
238
|
|
|
36
|
|
|
15
|
%
|
|
778
|
|
|
645
|
|
|
133
|
|
|
21
|
%
|
||||||
Roaming and other service revenues
|
59
|
|
|
66
|
|
|
(7
|
)
|
|
(11
|
)%
|
|
151
|
|
|
170
|
|
|
(19
|
)
|
|
(11
|
)%
|
||||||
Total service revenues
|
7,629
|
|
|
7,133
|
|
|
496
|
|
|
7
|
%
|
|
22,403
|
|
|
20,599
|
|
|
1,804
|
|
|
9
|
%
|
||||||
Equipment revenues
|
2,118
|
|
|
1,948
|
|
|
170
|
|
|
9
|
%
|
|
6,667
|
|
|
5,987
|
|
|
680
|
|
|
11
|
%
|
||||||
Other revenues
|
272
|
|
|
224
|
|
|
48
|
|
|
21
|
%
|
|
775
|
|
|
670
|
|
|
105
|
|
|
16
|
%
|
||||||
Total revenues
|
10,019
|
|
|
9,305
|
|
|
714
|
|
|
8
|
%
|
|
29,845
|
|
|
27,256
|
|
|
2,589
|
|
|
9
|
%
|
||||||
Operating expenses
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Cost of services, exclusive of depreciation and amortization shown separately below
|
1,594
|
|
|
1,436
|
|
|
158
|
|
|
11
|
%
|
|
4,520
|
|
|
4,286
|
|
|
234
|
|
|
5
|
%
|
||||||
Cost of equipment sales
|
2,617
|
|
|
2,539
|
|
|
78
|
|
|
3
|
%
|
|
8,149
|
|
|
7,532
|
|
|
617
|
|
|
8
|
%
|
||||||
Selling, general and administrative
|
3,098
|
|
|
2,898
|
|
|
200
|
|
|
7
|
%
|
|
8,968
|
|
|
8,419
|
|
|
549
|
|
|
7
|
%
|
||||||
Depreciation and amortization
|
1,416
|
|
|
1,568
|
|
|
(152
|
)
|
|
(10
|
)%
|
|
4,499
|
|
|
4,695
|
|
|
(196
|
)
|
|
(4
|
)%
|
||||||
Cost of MetroPCS business combination
|
—
|
|
|
15
|
|
|
(15
|
)
|
|
NM
|
|
|
—
|
|
|
110
|
|
|
(110
|
)
|
|
NM
|
|
||||||
Gains on disposal of spectrum licenses
|
(29
|
)
|
|
(199
|
)
|
|
170
|
|
|
(85
|
)%
|
|
(67
|
)
|
|
(835
|
)
|
|
768
|
|
|
(92
|
)%
|
||||||
Total operating expense
|
8,696
|
|
|
8,257
|
|
|
439
|
|
|
5
|
%
|
|
26,069
|
|
|
24,207
|
|
|
1,862
|
|
|
8
|
%
|
||||||
Operating income
|
1,323
|
|
|
1,048
|
|
|
275
|
|
|
26
|
%
|
|
3,776
|
|
|
3,049
|
|
|
727
|
|
|
24
|
%
|
||||||
Other income (expense)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Interest expense
|
(253
|
)
|
|
(376
|
)
|
|
123
|
|
|
(33
|
)%
|
|
(857
|
)
|
|
(1,083
|
)
|
|
226
|
|
|
(21
|
)%
|
||||||
Interest expense to affiliates
|
(167
|
)
|
|
(76
|
)
|
|
(91
|
)
|
|
120
|
%
|
|
(398
|
)
|
|
(248
|
)
|
|
(150
|
)
|
|
60
|
%
|
||||||
Interest income
|
2
|
|
|
3
|
|
|
(1
|
)
|
|
(33
|
)%
|
|
15
|
|
|
9
|
|
|
6
|
|
|
67
|
%
|
||||||
Other income (expense), net
|
1
|
|
|
(1
|
)
|
|
2
|
|
|
NM
|
|
|
(89
|
)
|
|
(6
|
)
|
|
(83
|
)
|
|
NM
|
|
||||||
Total other expense, net
|
(417
|
)
|
|
(450
|
)
|
|
33
|
|
|
(7
|
)%
|
|
(1,329
|
)
|
|
(1,328
|
)
|
|
(1
|
)
|
|
—
|
%
|
||||||
Income before income taxes
|
906
|
|
|
598
|
|
|
308
|
|
|
52
|
%
|
|
2,447
|
|
|
1,721
|
|
|
726
|
|
|
42
|
%
|
||||||
Income tax expense
|
(356
|
)
|
|
(232
|
)
|
|
(124
|
)
|
|
53
|
%
|
|
(618
|
)
|
|
(651
|
)
|
|
33
|
|
|
(5
|
)%
|
||||||
Net income
|
$
|
550
|
|
|
$
|
366
|
|
|
$
|
184
|
|
|
50
|
%
|
|
$
|
1,829
|
|
|
$
|
1,070
|
|
|
$
|
759
|
|
|
71
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Net cash provided by operating activities
|
$
|
2,362
|
|
|
$
|
1,740
|
|
|
$
|
622
|
|
|
36
|
%
|
|
$
|
5,904
|
|
|
$
|
4,533
|
|
|
$
|
1,371
|
|
|
30
|
%
|
Net cash used in investing activities
|
(1,455
|
)
|
|
(1,859
|
)
|
|
404
|
|
|
(22
|
)%
|
|
(10,138
|
)
|
|
(4,386
|
)
|
|
(5,752
|
)
|
|
131
|
%
|
||||||
Net cash (used in) provided by financing activities
|
(349
|
)
|
|
(67
|
)
|
|
(282
|
)
|
|
421
|
%
|
|
(527
|
)
|
|
623
|
|
|
(1,150
|
)
|
|
(185
|
)%
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Non-GAAP Financial Measures
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Adjusted EBITDA
|
$
|
2,822
|
|
|
$
|
2,689
|
|
|
$
|
133
|
|
|
5
|
%
|
|
$
|
8,502
|
|
|
$
|
8,032
|
|
|
$
|
470
|
|
|
6
|
%
|
Free Cash Flow
|
921
|
|
|
581
|
|
|
340
|
|
|
59
|
%
|
|
1,588
|
|
|
690
|
|
|
898
|
|
|
130
|
%
|
•
|
Growth in the customer base driven by strong customer response to our Un-carrier initiatives and promotions for services and devices; and
|
•
|
The positive impact from a decrease in the non-cash net revenue deferral for Data Stash; partially offset by
|
•
|
The MVNO Transaction;
|
•
|
Lower branded postpaid phone average revenue per user (“ARPU”); and
|
•
|
The negative impact from hurricanes of
$20 million
.
|
•
|
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, T-Mobile for Business; and
|
•
|
The positive impact from a decrease in the non-cash net revenue deferral for Data Stash; partially offset by
|
•
|
The MVNO Transaction; and
|
•
|
The negative impact from hurricanes of
$20 million
.
|
•
|
Higher average branded prepaid customers primarily driven by growth in the customer base; and
|
•
|
Higher branded prepaid ARPU from the success of our MetroPCS brand; partially offset by
|
•
|
The impact from the optimization of our third-party distribution channels; and
|
•
|
The negative impact from hurricanes of
$11 million
.
|
•
|
An increase of $137 million from the purchase of leased devices at the end of their lease term;
|
•
|
An increase of $116 million primarily related to proceeds from the liquidation of returned customer handsets in the third quarter of 2017;
|
•
|
An increase of $78 million in device sales revenues excluding purchased leased devices, primarily due to:
|
•
|
Higher average revenue per device sold primarily due to an Original Equipment Manufacturer (“OEM”) recall of its smartphone devices in the third quarter of 2016 and a decrea
se in promotional spending
; partially offset by
|
•
|
A 5% decrease in the number of devices sold. Device sales revenue is recognized at the time of sale;
and
|
•
|
An increase of $22 million in SIM and upgrade revenue; partially offset by
|
•
|
A decrease of $194 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; and
|
•
|
The negative impact from hurricanes of
$8 million
.
|
•
|
An increase of $413 million in device sales revenues excluding purchased leased devices, primarily due to:
|
•
|
Higher average revenue per device sold primarily due to an increase in high-end device mix and an OEM recall of its smartphone devices in the third quarter of 2016, partially offset by an increase in promotional spending; partially offset by
|
•
|
A 1% decrease in the number of devices sold. Device sales revenue is recognized at the time of sale;
|
•
|
An increase of $366 million from the purchase of leased devices at the end of the lease term;
|
•
|
An increase of $137 million primarily related to proceeds from the liquidation of returned customer handsets in the third quarter of 2017; and
|
•
|
An increase of $117 million in SIM and upgrade revenue; partially offset by
|
•
|
A decrease of $345 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; and
|
•
|
The negative impact from hurricanes of
$8 million
.
|
•
|
Higher lease expenses associated with our network expansion;
|
•
|
The negative impact from hurricanes of
$69 million
; partially offset by
|
•
|
Lower regulatory expenses.
|
•
|
Higher lease expenses associated with network expansion; and
|
•
|
The negative impact from hurricanes of
$69 million
;
partially offset by
|
•
|
Lower long distance and toll costs as we continue to renegotiate contracts with vendors; and
|
•
|
Lower regulatory expenses.
|
•
|
An increase of $66 million in device cost of equipment sales, excluding purchased leased devices, primarily due to:
|
•
|
A higher average cost per device sold primarily from an OEM recall of its smartphone devices in the third quarter of 2016; partially offset by
|
•
|
A 5% decrease in the number of devices sold; and
|
•
|
An increase of $58 million in lease device cost of equipment sales, primarily due to:
|
•
|
An increase in lease buyouts as leases began reaching their term dates in 2017; partially offset by
|
•
|
A decrease in device upgrades from fewer customers in the handset lease program.
|
•
|
These increases are partially offset by a decrease of $31 million in cost of equipment related to an increase in proceeds from the liquidation of returned customer handsets under our insurance programs; and
|
•
|
The negative impact from hurricanes of
$4 million
.
|
•
|
An increase of $483 million in device cost of equipment sales, excluding purchased leased devices, primarily due to:
|
•
|
A higher average cost per device sold primarily from an increase in high-end device mix and an OEM recall of its smartphone devices in the third quarter of 2016; partially offset by
|
•
|
A 1% decrease in the number of devices sold; and
|
•
|
An increase of $245 million in lease device cost of equipment sales, primarily due to:
|
•
|
An increase in lease buyouts as leases began reaching their term dates in 2017; partially offset by
|
•
|
A decrease in device upgrades from fewer customers in the handset lease program.
|
•
|
These increases are partially offset by a decrease of $69 million primarily due to inventory adjustments related to obsolete inventory; and
|
•
|
The negative impact from hurricanes of
$4 million
.
|
•
|
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 and include the negative impact from hurricanes, increased
$275 million
, or
26%
, for the
three months ended
and
$727 million
, or
24%
, for the
nine months ended
September 30, 2017
.
The negative impact from the hurricanes for the
three and nine months ended
September 30, 2017
was approximately
$148 million
.
|
•
|
Income tax expense
increased
$124 million
, or
53%
, for the
three months ended
and decreased
$33 million
, or
5%
, for the
nine months ended
September 30, 2017
.
|
•
|
A lower effective tax rate which was
25.3%
and
37.8%
for the
nine months ended
September 30, 2017
and
2016
, respectively, 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
$19 million
in tax benefits through the third quarter of
2017
. Total tax benefits related to the reduction in the valuation allowance were
$289 million
through
September 30, 2017
. The effective tax rate was further decreased by the recognition of
$62 million
of excess tax benefits related to share-based payments for the
nine months ended
September 30, 2017
, compared to
$24 million
for the same period in
2016
; partially offset by
|
•
|
Higher income before income taxes.
|
•
|
Interest expense
decreased
$123 million
, or
33%
,
for the
three months ended
and
$226 million
, or
21%
, for the
nine months ended
September 30, 2017
, primarily from:
|
•
|
The early extinguishment of our LIBOR plus 2.750% Senior Secured Term Loan and redemption of $8.3 billion of Senior Notes; partially offset by
|
•
|
The issuance of $1.5 billion of Senior Notes in March 2017.
|
•
|
The decrease for the
nine months ended
September 30, 2017
was also impacted by the issuance of $1.0 billion of Senior Notes in April 2016.
|
•
|
Interest expense to affiliates
increased
$91 million
, or
120%
, for the
three months ended
and
$150 million
, or
60%
, for the
nine months ended
September 30, 2017
, primarily from:
|
•
|
An increase in interest associated with a $4.0 billion secured Incremental Term Loan Facility with DT entered into in January 2017;
|
•
|
The issuance of $4.0 billion in Senior Notes to DT in May 2017; and
|
•
|
Draws on our Revolving Credit Facility; partially offset by
|
•
|
Lower interest rates achieved through refinancing $2.5 billion of Senior Reset Notes in April 2017.
|
•
|
The increase for the three months ended September 30, 2017, was also partially from the net issuance of $500 million in Senior Notes in April 2017.
|
•
|
Other income (expense), net
remained flat
for the
three months ended
and
increased
$83 million
for the
nine months ended
September 30, 2017
. The change for the
nine months ended
September 30, 2017
was primarily from:
|
•
|
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.
|
|
September 30,
2017 |
|
December 31,
2016 |
|
Change
|
|||||||||
(in millions)
|
|
|
$
|
|
%
|
|||||||||
Other current assets
|
$
|
576
|
|
|
$
|
565
|
|
|
$
|
11
|
|
|
2
|
%
|
Property and equipment, net
|
322
|
|
|
375
|
|
|
(53
|
)
|
|
(14
|
)%
|
|||
Tower obligations
|
2,204
|
|
|
2,221
|
|
|
(17
|
)
|
|
(1
|
)%
|
|||
Total stockholders' deficit
|
(1,386
|
)
|
|
(1,374
|
)
|
|
(12
|
)
|
|
1
|
%
|
|
Three Months Ended September 30,
|
|
Change
|
|
Nine Months Ended September 30,
|
|
Change
|
||||||||||||||||||||||
(in millions)
|
2017
|
|
2016
|
$
|
|
%
|
2017
|
|
2016
|
$
|
|
%
|
|||||||||||||||||
Service revenues
|
$
|
527
|
|
|
$
|
520
|
|
|
$
|
7
|
|
|
1
|
%
|
|
$
|
1,580
|
|
|
$
|
1,500
|
|
|
$
|
80
|
|
|
5
|
%
|
Cost of equipment sales
|
241
|
|
|
300
|
|
|
(59
|
)
|
|
(20
|
)%
|
|
738
|
|
|
768
|
|
|
(30
|
)
|
|
(4
|
)%
|
||||||
Selling, general and administrative
|
209
|
|
|
227
|
|
|
(18
|
)
|
|
(8
|
)%
|
|
652
|
|
|
645
|
|
|
7
|
|
|
1
|
%
|
||||||
Total comprehensive income (loss)
|
40
|
|
|
(19
|
)
|
|
59
|
|
|
(311
|
)%
|
|
87
|
|
|
8
|
|
|
79
|
|
|
988
|
%
|
•
|
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;
|
•
|
Lower
Cost of equipment sales
expenses primarily due to decrease in claims activity and lower device costs used; and
|
•
|
Lower
Selling, general and administrative
expenses primarily due to a decrease in program service fees, partially offset by higher costs to support our growing customer base.
|
•
|
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;
|
•
|
Lower
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 higher costs to support our growing customer base, partially offset by a decrease in program service fees.
|
|
September 30,
2017 |
|
September 30,
2016 |
|
Change
|
||||||
(in thousands)
|
#
|
|
%
|
||||||||
Customers, end of period
|
|
|
|
|
|
|
|
||||
Branded postpaid phone customers
(1)
|
33,223
|
|
|
30,364
|
|
|
2,859
|
|
|
9
|
%
|
Branded postpaid other customers
(1)
|
3,752
|
|
|
2,866
|
|
|
886
|
|
|
31
|
%
|
Total branded postpaid customers
|
36,975
|
|
|
33,230
|
|
|
3,745
|
|
|
11
|
%
|
Branded prepaid customers
|
20,519
|
|
|
19,272
|
|
|
1,247
|
|
|
6
|
%
|
Total branded customers
|
57,494
|
|
|
52,502
|
|
|
4,992
|
|
|
10
|
%
|
Wholesale customers
|
13,237
|
|
|
16,852
|
|
|
(3,615
|
)
|
|
(21
|
)%
|
Total customers, end of period
|
70,731
|
|
|
69,354
|
|
|
1,377
|
|
|
2
|
%
|
Adjustments to branded postpaid phone customers
(2)
|
—
|
|
|
(1,365
|
)
|
|
1,365
|
|
|
|
|
Adjustments to branded prepaid customers
(2)
|
—
|
|
|
(326
|
)
|
|
326
|
|
|
|
|
Adjustments to wholesale customers
(2) (3)
|
(160
|
)
|
|
1,691
|
|
|
(1,851
|
)
|
|
|
(1)
|
During the third quarter of 2017, we retitled our “Branded postpaid mobile broadband customers” category to “Branded postpaid other customers” and reclassified
253,000
DIGITS customers from our “Branded postpaid phone customers” category for the second quarter of 2017, when the DIGITS product was released.
|
(2)
|
The MVNO Transaction resulted in a transfer of branded postpaid phone customers and branded prepaid customers to wholesale customers on September 1, 2016. Prospectively from September 1, 2016, net customer additions for these customers are included within Wholesale customers.
|
(3)
|
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
160,000
and
4,368,000
reported wholesale customers as of the beginning of the third quarter of 2017 and the beginning of the second quarter of 2017, respectively. No further Lifeline adjustments are expected in future periods.
|
•
|
Higher branded postpaid phone customers driven by strong customer response to our Un-carrier initiatives and promotional activities and the growing success of our business channel, T-Mobile for Business, partially offset by increased competitive activity in the marketplace and less reliance on add a line promotions;
|
•
|
Higher branded prepaid customers driven by the continued success of our MetroPCS brand and continued growth from our distribution expansion, partially offset by the optimization of our third-party distribution channels; and
|
•
|
Higher branded postpaid other customers primarily due to the launch of SyncUP DRIVE
TM
and DIGITS.
|
|
Three Months Ended September 30,
|
|
Change
|
|
Nine Months Ended September 30,
|
|
Change
|
||||||||||||||||
(in thousands)
|
2017
|
|
2016
|
#
|
|
%
|
2017
|
|
2016
|
#
|
|
%
|
|||||||||||
Net customer additions (losses)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Branded postpaid phone customers
(1)
|
595
|
|
|
851
|
|
|
(256
|
)
|
|
(30
|
)%
|
|
1,926
|
|
|
2,374
|
|
|
(448
|
)
|
|
(19
|
)%
|
Branded postpaid other customers
(1)
|
222
|
|
|
118
|
|
|
104
|
|
|
88
|
%
|
|
622
|
|
|
526
|
|
|
96
|
|
|
18
|
%
|
Total branded postpaid customers
|
817
|
|
|
969
|
|
|
(152
|
)
|
|
(16
|
)%
|
|
2,548
|
|
|
2,900
|
|
|
(352
|
)
|
|
(12
|
)%
|
Branded prepaid customers
|
226
|
|
|
684
|
|
|
(458
|
)
|
|
(67
|
)%
|
|
706
|
|
|
1,967
|
|
|
(1,261
|
)
|
|
(64
|
)%
|
Total branded customers
|
1,043
|
|
|
1,653
|
|
|
(610
|
)
|
|
(37
|
)%
|
|
3,254
|
|
|
4,867
|
|
|
(1,613
|
)
|
|
(33
|
)%
|
Wholesale customers
(2)
|
286
|
|
|
317
|
|
|
(31
|
)
|
|
(10
|
)%
|
|
550
|
|
|
1,205
|
|
|
(655
|
)
|
|
(54
|
)%
|
Total net customer additions
|
1,329
|
|
|
1,970
|
|
|
(641
|
)
|
|
(33
|
)%
|
|
3,804
|
|
|
6,072
|
|
|
(2,268
|
)
|
|
(37
|
)%
|
Adjustments to branded postpaid phone customers
(1)
|
—
|
|
|
—
|
|
|
—
|
|
|
|
|
(253
|
)
|
|
—
|
|
|
(253
|
)
|
|
|
||
Adjustments to branded postpaid other customers
(1)
|
—
|
|
|
—
|
|
|
—
|
|
|
|
|
253
|
|
|
—
|
|
|
253
|
|
|
|
(1)
|
During the third quarter of 2017, we retitled our “Branded postpaid mobile broadband customers” category to “Branded postpaid other customers” and reclassified
253,000
DIGITS customer net additions from our “Branded postpaid phone customers” category for the second quarter of 2017, when the DIGITS product was released.
|
(2)
|
Net customer activity for Lifeline was excluded beginning in the second quarter of 2017 due to our determination based upon changes in the applicable government regulations that the Lifeline program offered by our wholesale partners is uneconomical.
|
•
|
Lower branded prepaid net customer additions primarily due to higher MetroPCS deactivations from a growing customer base and increased competitive activity in the marketplace, and
|
•
|
Lower branded postpaid phone net customer additions primarily due to lower gross customer additions from increased competitive activity in the marketplace, the split and shift in iPhone launch timing, and the negative impact from hurricanes; partially offset by
|
•
|
Higher branded postpaid other net customer additions primarily driven by strength of SyncUP DRIVE
TM
launched in the fourth quarter of 2016 as well as the launch of DIGITS in the second quarter of 2017.
|
•
|
Lower branded prepaid net customer additions primarily due to higher MetroPCS deactivations from a growing customer base and increased competitive activity in the marketplace. Additional decreases resulted from the optimization of our third party distribution channels, and
|
•
|
Lower branded postpaid phone net customer additions primarily due to lower gross customer additions from increased competitive activity in the marketplace and lower customer migrations, partially offset by lower deactivations; partially offset by
|
•
|
Higher branded postpaid other net customer additions primarily driven by strength of SyncUP DRIVE
TM
launched in the fourth quarter of 2016 as well as the launch of DIGITS in the second quarter of 2017, partially offset by overall market softness of tablets.
|
|
September 30,
2017 |
|
September 30,
2016 |
|
Change
|
||||||
|
|
#
|
|
%
|
|||||||
Branded postpaid customers per account
|
2.92
|
|
|
2.78
|
|
|
0.14
|
|
|
5
|
%
|
|
Three Months Ended September 30,
|
|
Bps Change
|
|
Nine Months Ended September 30,
|
|
Bps Change
|
||||||||
2017
|
|
2016
|
2017
|
|
2016
|
||||||||||
Branded postpaid phone churn
|
1.23
|
%
|
|
1.32
|
%
|
|
-9 bps
|
|
1.18
|
%
|
|
1.30
|
%
|
|
-12 bps
|
Branded prepaid churn
|
4.25
|
%
|
|
3.82
|
%
|
|
43 bps
|
|
4.06
|
%
|
|
3.86
|
%
|
|
20 bps
|
(in millions, except average number of customers, ARPU and ABPU)
|
Three Months Ended September 30,
|
|
Change
|
|
Nine Months Ended September 30,
|
|
Change
|
||||||||||||||||||||||
2017
|
|
2016
|
|
$
|
|
%
|
|
2017
|
|
2016
|
|
$
|
|
%
|
|||||||||||||||
Calculation of Branded Postpaid Phone ARPU
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Branded postpaid service revenues
|
$
|
4,920
|
|
|
$
|
4,647
|
|
|
$
|
273
|
|
|
6
|
%
|
|
$
|
14,465
|
|
|
$
|
13,458
|
|
|
$
|
1,007
|
|
|
7
|
%
|
Less: Branded postpaid other revenues
|
(294
|
)
|
|
(193
|
)
|
|
(101
|
)
|
|
52
|
%
|
|
(774
|
)
|
|
(568
|
)
|
|
(206
|
)
|
|
36
|
%
|
||||||
Branded postpaid phone service revenues
|
$
|
4,626
|
|
|
$
|
4,454
|
|
|
$
|
172
|
|
|
4
|
%
|
|
$
|
13,691
|
|
|
$
|
12,890
|
|
|
$
|
801
|
|
|
6
|
%
|
Divided by: Average number of branded postpaid phone customers (in thousands) and number of months in period
|
32,852
|
|
|
30,836
|
|
|
2,016
|
|
|
7
|
%
|
|
32,248
|
|
|
30,364
|
|
|
1,884
|
|
|
6
|
%
|
||||||
Branded postpaid phone ARPU
(1)
|
$
|
46.93
|
|
|
$
|
48.15
|
|
|
$
|
(1.22
|
)
|
|
(3
|
)%
|
|
$
|
47.17
|
|
|
$
|
47.17
|
|
|
$
|
—
|
|
|
—
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Calculation of Branded Postpaid ABPU
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Branded postpaid service revenues
|
$
|
4,920
|
|
|
$
|
4,647
|
|
|
$
|
273
|
|
|
6
|
%
|
|
$
|
14,465
|
|
|
$
|
13,458
|
|
|
$
|
1,007
|
|
|
7
|
%
|
EIP billings
|
1,481
|
|
|
1,394
|
|
|
87
|
|
|
6
|
%
|
|
4,285
|
|
|
4,062
|
|
|
223
|
|
|
5
|
%
|
||||||
Lease revenues
|
159
|
|
|
353
|
|
|
(194
|
)
|
|
(55
|
)%
|
|
717
|
|
|
1,062
|
|
|
(345
|
)
|
|
(32
|
)%
|
||||||
Total billings for branded postpaid customers
|
$
|
6,560
|
|
|
$
|
6,394
|
|
|
$
|
166
|
|
|
3
|
%
|
|
$
|
19,467
|
|
|
$
|
18,582
|
|
|
$
|
885
|
|
|
5
|
%
|
Divided by: Average number of branded postpaid customers (in thousands) and number of months in period
|
36,505
|
|
|
33,632
|
|
|
2,873
|
|
|
9
|
%
|
|
35,627
|
|
|
32,966
|
|
|
2,661
|
|
|
8
|
%
|
||||||
Branded postpaid ABPU
|
$
|
59.89
|
|
|
$
|
63.38
|
|
|
$
|
(3.49
|
)
|
|
(6
|
)%
|
|
$
|
60.71
|
|
|
$
|
62.63
|
|
|
$
|
(1.92
|
)
|
|
(3
|
)%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Calculation of Branded Prepaid ARPU
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Branded prepaid service revenues
|
$
|
2,376
|
|
|
$
|
2,182
|
|
|
$
|
194
|
|
|
9
|
%
|
|
$
|
7,009
|
|
|
$
|
6,326
|
|
|
$
|
683
|
|
|
11
|
%
|
Divided by: Average number of branded prepaid customers (in thousands) and number of months in period
|
20,336
|
|
|
19,134
|
|
|
1,202
|
|
|
6
|
%
|
|
20,119
|
|
|
18,586
|
|
|
1,533
|
|
|
8
|
%
|
||||||
Branded prepaid ARPU
|
$
|
38.93
|
|
|
$
|
38.01
|
|
|
$
|
0.92
|
|
|
2
|
%
|
|
$
|
38.71
|
|
|
$
|
37.82
|
|
|
$
|
0.89
|
|
|
2
|
%
|
(1)
|
Branded postpaid phone ARPU includes the reclassification of
43,000
DIGITS average customers and related revenue to the “Branded postpaid other customers” category for the second quarter of 2017.
|
•
|
The continued adoption of T-Mobile ONE including taxes and fees and dilution from promotional activities; and
|
•
|
The negative impact from hurricanes of $0.19; partially offset by
|
•
|
The transfer of customers as part of the MVNO transaction as those customers had lower ARPU; and
|
•
|
A decrease in the non-cash net revenue deferral for Data Stash.
|
•
|
A decrease in the non-cash net revenue deferral for Data Stash;
|
•
|
The transfer of customers as part of the MVNO transaction as those customers had lower ARPU; offset by
|
•
|
The continued adoption of T-Mobile ONE including taxes and fees and dilution from promotional activities; and
|
•
|
The negative impact from hurricanes of $0.07.
|
•
|
Lower lease revenues;
|
•
|
Lower branded postpaid phone ARPU;
|
•
|
Growth in the branded postpaid other customer base with lower ARPU; and
|
•
|
The negative impact from hurricanes of $0.18.
|
•
|
Lower lease revenues;
|
•
|
Growth in the branded postpaid other customer base with lower ARPU; and
|
•
|
The negative impact from hurricanes of $0.06.
|
|
Three Months Ended September 30,
|
|
Change
|
|
Nine Months Ended September 30,
|
|
Change
|
||||||||||||||||||||||
(in millions)
|
2017
|
|
2016
|
|
$
|
|
%
|
|
2017
|
|
2016
|
|
$
|
|
%
|
||||||||||||||
Net income
|
$
|
550
|
|
|
$
|
366
|
|
|
$
|
184
|
|
|
50
|
%
|
|
$
|
1,829
|
|
|
$
|
1,070
|
|
|
$
|
759
|
|
|
71
|
%
|
Adjustments:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Interest expense
|
253
|
|
|
376
|
|
|
(123
|
)
|
|
(33
|
)%
|
|
857
|
|
|
1,083
|
|
|
(226
|
)
|
|
(21
|
)%
|
||||||
Interest expense to affiliates
|
167
|
|
|
76
|
|
|
91
|
|
|
120
|
%
|
|
398
|
|
|
248
|
|
|
150
|
|
|
60
|
%
|
||||||
Interest income
(1)
|
(2
|
)
|
|
(3
|
)
|
|
1
|
|
|
(33
|
)%
|
|
(15
|
)
|
|
(9
|
)
|
|
(6
|
)
|
|
67
|
%
|
||||||
Other (income) expense, net
|
(1
|
)
|
|
1
|
|
|
(2
|
)
|
|
(200
|
)%
|
|
89
|
|
|
6
|
|
|
83
|
|
|
1,383
|
%
|
||||||
Income tax expense
|
356
|
|
|
232
|
|
|
124
|
|
|
53
|
%
|
|
618
|
|
|
651
|
|
|
(33
|
)
|
|
(5
|
)%
|
||||||
Operating income
(1)
|
1,323
|
|
|
1,048
|
|
|
275
|
|
|
26
|
%
|
|
3,776
|
|
|
3,049
|
|
|
727
|
|
|
24
|
%
|
||||||
Depreciation and amortization
|
1,416
|
|
|
1,568
|
|
|
(152
|
)
|
|
(10
|
)%
|
|
4,499
|
|
|
4,695
|
|
|
(196
|
)
|
|
(4
|
)%
|
||||||
Cost of MetroPCS business combination
(2)
|
—
|
|
|
15
|
|
|
(15
|
)
|
|
(100
|
)%
|
|
—
|
|
|
110
|
|
|
(110
|
)
|
|
(100
|
)%
|
||||||
Stock-based compensation
(3)
|
83
|
|
|
57
|
|
|
26
|
|
|
46
|
%
|
|
222
|
|
|
171
|
|
|
51
|
|
|
30
|
%
|
||||||
Other, net
(3)
|
—
|
|
|
1
|
|
|
(1
|
)
|
|
(100
|
)%
|
|
5
|
|
|
7
|
|
|
(2
|
)
|
|
(29
|
)%
|
||||||
Adjusted EBITDA
(1)
|
$
|
2,822
|
|
|
$
|
2,689
|
|
|
$
|
133
|
|
|
5
|
%
|
|
$
|
8,502
|
|
|
$
|
8,032
|
|
|
$
|
470
|
|
|
6
|
%
|
Net income margin (Net income divided by service revenues)
|
7
|
%
|
|
5
|
%
|
|
|
|
|
200 bps
|
|
|
8
|
%
|
|
5
|
%
|
|
|
|
|
300 bps
|
|
||||||
Adjusted EBITDA margin (Adjusted EBITDA divided by service revenues)
(1)
|
37
|
%
|
|
38
|
%
|
|
|
|
|
-100 bps
|
|
|
38
|
%
|
|
39
|
%
|
|
|
|
|
-100 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)
|
Beginning in the first quarter of 2017, 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 continued strength of our MetroPCS brand; and
|
•
|
Lower losses on equipment; partially offset by
|
•
|
Higher selling, general and administrative expenses;
|
•
|
Higher cost of services expense;
|
•
|
Lower gains on disposal of spectrum licenses of
$170 million
; gains on disposal were
$29 million
for the
three months ended
September 30, 2017
, compared to
$199 million
in the same period in
2016
; and
|
•
|
The negative impact from hurricanes of
$148 million
.
|
•
|
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 continued strength of our MetroPCS brand; and
|
•
|
Higher wholesale revenues; partially offset by
|
•
|
Lower gains on disposal of spectrum licenses of
$768 million
; gains on disposal were
$67 million
for the
nine months ended
September 30, 2017
, compared to
$835 million
in the same period in
2016
;
|
•
|
Higher selling, general and administrative expenses;
|
•
|
Higher cost of services expense; and
|
•
|
The negative impact from hurricanes of
$148 million
.
|
|
Three Months Ended September 30, 2016
|
|
Nine Months Ended September 30, 2016
|
||||||||||||||||||||
(in millions)
|
As Filed
|
|
Change in Accounting Principle
|
|
As Adjusted
|
|
As Filed
|
|
Change in Accounting Principle
|
|
As Adjusted
|
||||||||||||
Operating income
|
$
|
989
|
|
|
$
|
59
|
|
|
$
|
1,048
|
|
|
$
|
2,860
|
|
|
$
|
189
|
|
|
$
|
3,049
|
|
Interest income
|
62
|
|
|
(59
|
)
|
|
3
|
|
|
198
|
|
|
(189
|
)
|
|
9
|
|
||||||
Net income
|
366
|
|
|
—
|
|
|
366
|
|
|
1,070
|
|
|
—
|
|
|
1,070
|
|
||||||
Net income as a percentage of service revenue
|
5
|
%
|
|
—
|
%
|
|
5
|
%
|
|
5
|
%
|
|
—
|
%
|
|
5
|
%
|
||||||
Adjusted EBITDA
|
2,630
|
|
|
59
|
|
|
2,689
|
|
|
7,843
|
|
|
189
|
|
|
8,032
|
|
||||||
Adjusted EBITDA margin (Adjusted EBITDA divided by service revenues)
|
37
|
%
|
|
1
|
%
|
|
38
|
%
|
|
38
|
%
|
|
1
|
%
|
|
39
|
%
|
|
Three Months Ended September 30,
|
|
Change
|
|
Nine Months Ended September 30,
|
|
Change
|
||||||||||||||||||||||
(in millions)
|
2017
|
|
2016
|
|
$
|
|
%
|
|
2017
|
|
2016
|
|
$
|
|
%
|
||||||||||||||
Net cash provided by operating activities
|
$
|
2,362
|
|
|
$
|
1,740
|
|
|
$
|
622
|
|
|
36
|
%
|
|
$
|
5,904
|
|
|
$
|
4,533
|
|
|
$
|
1,371
|
|
|
30
|
%
|
Net cash used in investing activities
|
(1,455
|
)
|
|
(1,859
|
)
|
|
404
|
|
|
(22
|
)%
|
|
(10,138
|
)
|
|
(4,386
|
)
|
|
(5,752
|
)
|
|
131
|
%
|
||||||
Net cash (used in) provided by financing activities
|
(349
|
)
|
|
(67
|
)
|
|
(282
|
)
|
|
421
|
%
|
|
(527
|
)
|
|
623
|
|
|
(1,150
|
)
|
|
(185
|
)%
|
•
|
Higher net income and higher non-cash adjustments to net income
and
a lower net use from working capital changes.
|
•
|
Higher Net income and higher non-cash adjustments to net income including from lower
Gains on disposal of spectrum licenses
and Depreciation and amortization. In total, changes in working capital were relatively flat as improvements in
Accounts payable and accrued liabilities
and Inventories were partially offset by changes in
Equipment installment plan receivables
.
The change in EIP receivables was primarily due to a decrease in net cash proceeds from the sale of EIP receivables as the
nine months ended
September 30, 2016
benefited from net cash proceeds of
$366 million
primarily related to upsizing of the EIP securitization facility as well as an increase in devices financed on EIP
.
|
•
|
A
$690 million
decrease in
Purchases of spectrum licenses and other intangible assets, including deposits; partially offset by
|
•
|
A
$282 million
increase in Purchases of property and equipment, including capitalized interest.
|
•
|
A
$3.0 billion
decrease in
Sales of short-term investments
;
|
•
|
A
$2.3 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 during the second quarter of 2017; and
|
•
|
A
$473 million
increase in Purchases of property and equipment, including capitalized interest.
|
•
|
$1.7 billion
for Repayments of our revolving credit facility
; partially offset by
|
•
|
$1.1 billion
in Proceeds from borrowing on our revolving credit facility; and
|
•
|
$500 million
in
Proceeds from issuance of long-term debt
.
|
•
|
$10.2 billion
for
Repayments of long-term debt
;
|
•
|
$2.9 billion
for Repayments of our revolving credit facility;
|
•
|
$350 million
for
Repayments of capital lease obligations
; and
|
•
|
$296 million
for
Repayments of short-term debt for purchases of inventory, property and equipment, net
; partially offset by
|
•
|
$10.5 billion
in
Proceeds from issuance of long-term debt
; and
|
•
|
$2.9 billion
in Proceeds from borrowing on our revolving credit facility.
|
|
Three Months Ended September 30,
|
|
Change
|
|
Nine Months Ended September 30,
|
|
Change
|
||||||||||||||||||||||
(in millions)
|
2017
|
|
2016
|
|
$
|
|
%
|
|
2017
|
|
2016
|
|
$
|
|
%
|
||||||||||||||
Net cash provided by operating activities
|
$
|
2,362
|
|
|
$
|
1,740
|
|
|
$
|
622
|
|
|
36
|
%
|
|
$
|
5,904
|
|
|
$
|
4,533
|
|
|
$
|
1,371
|
|
|
30
|
%
|
Cash purchases of property and equipment
|
(1,441
|
)
|
|
(1,159
|
)
|
|
(282
|
)
|
|
24
|
%
|
|
(4,316
|
)
|
|
(3,843
|
)
|
|
(473
|
)
|
|
12
|
%
|
||||||
Free Cash Flow
|
$
|
921
|
|
|
$
|
581
|
|
|
$
|
340
|
|
|
59
|
%
|
|
$
|
1,588
|
|
|
$
|
690
|
|
|
$
|
898
|
|
|
130
|
%
|
(in millions)
|
December 31,
2016 |
|
Issuances and Borrowings
(1)
|
|
Note Redemptions
(1)
|
|
Extinguishments
(1)
|
|
Repayments
|
|
Other
(2)
|
|
September 30,
2017 |
||||||||||||||
Short-term debt
|
$
|
354
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
(20
|
)
|
|
$
|
—
|
|
|
$
|
224
|
|
|
$
|
558
|
|
Long-term debt
|
21,832
|
|
|
1,495
|
|
|
(8,365
|
)
|
|
(1,947
|
)
|
|
—
|
|
|
148
|
|
|
13,163
|
|
|||||||
Total debt to third parties
|
22,186
|
|
|
1,495
|
|
|
(8,365
|
)
|
|
(1,967
|
)
|
|
—
|
|
|
372
|
|
|
13,721
|
|
|||||||
Short-term debt to affiliates
|
—
|
|
|
2,910
|
|
|
—
|
|
|
—
|
|
|
(2,910
|
)
|
|
—
|
|
|
—
|
|
|||||||
Long-term debt to affiliates
|
5,600
|
|
|
8,985
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1
|
|
|
14,586
|
|
|||||||
Total debt to affiliates
|
5,600
|
|
|
11,895
|
|
|
—
|
|
|
—
|
|
|
(2,910
|
)
|
|
1
|
|
|
14,586
|
|
|||||||
Total debt
|
$
|
27,786
|
|
|
$
|
13,390
|
|
|
$
|
(8,365
|
)
|
|
$
|
(1,967
|
)
|
|
$
|
(2,910
|
)
|
|
$
|
373
|
|
|
$
|
28,307
|
|
(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 represent net outstanding borrowings on our senior secured revolving credit facility.
|
(2)
|
Other includes:
$299 million
issuances of short-term debt related to vendor financing arrangements, of which
$291 million
is related to financing of property and equipment. During the
nine months ended
September 30, 2017
, we repaid
$296 million
under the vendor financing arrangements. As of
September 30, 2017
, vendor financing arrangements totaled
$3 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
September 30, 2017
and
December 31, 2016
, capital lease liabilities 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 of Senior Notes Issued
|
$
|
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 income (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 2.00% Senior Secured Term Loan due 2024
|
2,000
|
|
|
—
|
|
|
—
|
|
|||
LIBOR plus 2.750% Senior Secured Term Loan
(2)
|
—
|
|
|
(1,980
|
)
|
|
13
|
|
|||
Total
|
$
|
4,000
|
|
|
$
|
(1,980
|
)
|
|
$
|
13
|
|
(1)
|
Write-off of discounts and issuance costs are included in
Other income (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
.
|
(2)
|
Our Senior Secured Term Loan extinguished during the
nine months ended
September 30, 2017
was Third Party debt.
|
(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 2027
(2)
|
1,250
|
|
|
(28
|
)
|
|
1,222
|
|
|||
6.288% Senior Reset Notes due 2019
|
(1,250
|
)
|
|
—
|
|
|
(1,250
|
)
|
|||
6.366% Senior Reset Notes due 2020
|
(1,250
|
)
|
|
—
|
|
|
(1,250
|
)
|
|||
Total
|
$
|
1,000
|
|
|
$
|
(79
|
)
|
|
$
|
921
|
|
(1)
|
Discounts reduce
Proceeds from issuance of long-term debt
and are included within
Net cash (used in) provided by financing activities
in our
Condensed Consolidated Statements of Cash Flows
.
|
(2)
|
In April 2017, we issued to DT
$750 million
in aggregate principal amount of the
5.375% Senior Notes due 2027
, and in September 2017, we issued to DT the remaining
$500 million
in aggregate principal amount of the
5.375% Senior Notes due 2027
.
|
(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
|
|
|
|
|
|
Incorporated by Reference
|
|
|
||||
Exhibit No.
|
|
Exhibit Description
|
|
Form
|
|
Date of First Filing
|
|
Exhibit Number
|
|
Filed/Furnished Herewith
|
|
|
8-K
|
|
7/27/2017
|
|
10.1
|
|
|
||
|
|
|
|
|
|
|
|
X
|
||
|
|
|
|
|
|
|
|
X
|
||
|
|
|
|
|
|
|
|
X
|
||
|
|
|
|
|
|
|
|
X
|
||
|
|
|
|
|
|
|
|
X
|
||
|
|
|
|
|
|
|
|
X
|
||
101.INS
|
|
XBRL Instance Document.
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X
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101.SCH
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XBRL Taxonomy Extension Schema Document.
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X
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101.CAL
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XBRL Taxonomy Extension Calculation Linkbase Document.
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X
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101.DEF
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XBRL Taxonomy Extension Definition Linkbase Document.
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X
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101.LAB
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XBRL Taxonomy Extension Label Linkbase Document.
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X
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101.PRE
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XBRL Taxonomy Extension Presentation Linkbase Document.
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X
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*
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Furnished herewith.
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SIGNATURE
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T-MOBILE US, INC.
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October 23, 2017
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/s/ J. Braxton Carter
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J. Braxton Carter
Executive Vice President and Chief Financial Officer
(Principal Financial Officer and Authorized Signatory)
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Page
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ARTICLE I DEFINITIONS
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Section 1.01
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General
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Section 1.02
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Additional Specific Defined Terms
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ARTICLE II TRANSFERS OF PURCHASED ASSETS
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Section 2.01
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Conveyance of the Purchased Assets
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Section 2.02
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Assignment of Agreement
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Section 2.03
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Conditions Relating to Sales of Receivables.
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Section 2.04
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Deferred Payment Amount
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ARTICLE III REPRESENTATIONS AND WARRANTIES
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Section 3.01
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Representations and Warranties
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Section 3.02
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Receivables Representations and Warranties
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Section 3.03
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Survival of Representations; Reliance
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ARTICLE IV PERFECTION OF TRANSFER AND PROTECTION OF
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SECURITY INTERESTS
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Section 4.01
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Filing
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Section 4.02
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Name Change or Reorganization
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Section 4.03
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Sale Treatment
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ARTICLE V REMEDIES UPON MISREPRESENTATION
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Section 5.01
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Breach of Representations and Warranties
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Section 5.02
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Retransfer of Written-Off Receivables
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Section 5.03
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Jump Repurchases
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Section 5.04
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EPS Receivables Retransfer
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Section 5.05
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Credit Agreement Responsibility Transfers.
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Section 5.06
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Seller Deposits
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ARTICLE VI COVENANTS
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Section 6.01
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Compliance with Law
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Section 6.02
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Performance of Credit Agreements
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Section 6.03
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No Adverse Claims
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Section 6.04
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Modification of Receivables
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Section 6.05
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Marking of Records
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Section 6.06
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Sales Tax
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Section 6.07
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Obligations of Finco
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Section 6.08
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Books of Account
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Section 6.09
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Corporate Existence; Merger or Consolidation
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Section 6.10
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Separate Existence.
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Section 6.11
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Notice of Breach
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ARTICLE VII CERTAIN OTHER AGREEMENTS
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Section 7.01
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Security Interests
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Section 7.02
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Application of Excess Purchaser Funds
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Section 7.03
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Delivery of Collections
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Section 7.04
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Separate Entity Existence
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Section 7.05
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Right of First Refusal
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Section 7.06
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Term.
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Section 7.07
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Seller Indemnification.
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Section 7.08
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Operation of Indemnities.
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ARTICLE VIII MISCELLANEOUS
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Section 8.01
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Amendment.
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Section 8.02
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Notices
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Section 8.03
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Merger and Integration
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Section 8.04
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Headings
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Section 8.05
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Survival of Representations and Warranties
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Section 8.06
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Governing Law
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Section 8.07
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No Bankruptcy Petition
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Section 8.08
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Severability of Provisions
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Section 8.09
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No Waiver; Cumulative Remedies
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Section 8.10
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Counterparts
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Section 8.11
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Other Agreements
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Section 8.12
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JURISDICTION
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Section 8.13
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WAIVER OF JURY TRIAL
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Section 8.14
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Parties’ Agreement
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Section 8.15
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Further Assurances
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Section 8.16
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Third-Party Beneficiaries.
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T-MOBILE FINANCIAL LLC
By:
/s/ Dirk Wehrse
Name: Dirk Wehrse
Title: Assistant Treasurer
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T-MOBILE HANDSET FUNDING LLC
By:
/s/ Dirk Wehrse
Name: Dirk Wehrse
Title: Senior Vice President, Treasury & Treasurer
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SECTION
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HEADING
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PAGE
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ARTICLE I.
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DEFINITIONS
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Section 1.1
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Certain Defined Terms
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Section 1.2
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Computation of Time Periods
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Section 1.3
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Other Definitional Provisions
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ARTICLE II.
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SALES AND SETTLEMENTS
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Section 2.1
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Facility.
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Section 2.2
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Incremental Fundings.
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Section 2.3
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Payment of Cash Purchase Price
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Section 2.4
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Filing of UCC Statements
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Section 2.5
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Acceptance by Agent
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Section 2.6
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Transfers and Sales; Security Interest
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Section 2.7
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Non-Recourse Nature of Deferred Purchase Price
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Section 2.8
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General Settlement Procedures
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Section 2.9
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Payments and Computations, Etc
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Section 2.10
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Fees
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Section 2.11
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Optional Purchase of Transferred Receivables by Finco
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Section 2.12
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Mandatory Repurchase Under Certain Circumstances.
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Section 2.13
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Retransfer of Written-Off Receivables.
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Section 2.14
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No Warranty Upon Retransfer
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Section 2.15
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Jump Contracts; Credit Agreement Responsibility Transfers.
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Section 2.16
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No Representation or Warranty
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Section 2.17
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Procedures for Extension of the Scheduled Expiry Date
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Section 2.18
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Defaulting Ownership Groups.
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Section 2.19
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Reduction and Increase of Purchase Limit
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Section 2.20
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Protection of Ownership Interest
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Section 2.21
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Malbec Receivables.
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Section 2.22
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EPS Receivables.
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ARTICLE III.
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REPRESENTATIONS AND WARRANTIES
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Section 3.1
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Representations and Warranties of Finco and the Transferor
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Section 3.2
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Representations and Warranties Relating to the Receivables
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Section 3.3
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Additional Representations and Warranties of Finco
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Section 3.4
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Additional Representations and Warranties of the Guarantor
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Section 3.5
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Representations and Warranties of the Conduit Purchasers and Committed Purchasers.
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Section 3.6
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Covenants of the Transferor
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Section 3.7
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Covenants of Finco and the Servicer
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Section 3.8
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Covenants of the Guarantor
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Section 3.9
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Additional Covenants of the Transferor, the Servicer and the Guarantor
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Section 3.10
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Merger or Consolidation of, or Assumption, of the Obligations of the Guarantor, Finco or the Transferor
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ARTICLE IV.
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CONDITIONS PRECEDENT
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Section 4.1
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Conditions to 2017 Amendment Closing Date
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Section 4.2
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Conditions to Incremental Funding
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Section 4.3
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Conditions to Sales of Additional Receivables.
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ARTICLE V.
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OWNERSHIP GROUP PURCHASE LIMITS
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SECTION 5.1.
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OWNERSHIP GROUP PURCHASE LIMITS.
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ARTICLE VI.
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PROTECTION OF THE OWNERS; ADMINISTRATION AND COLLECTIONS
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Section 6.1
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Maintenance of Information and Computer Records
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Section 6.2
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Inspections.
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Section 6.3
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Maintenance of Writings and Records
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Section 6.4
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Performance of Undertakings Under the Transferred Receivables
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Section 6.5
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Administration and Collections.
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Section 6.6
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Complete Servicing Transfer.
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Section 6.7
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Servicer Default.
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Section 6.8
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Finco Not to Resign as Servicer
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Section 6.9
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Servicing Fee
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Section 6.10
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Servicer Expenses
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Section 6.11
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Limitation on Liability of Servicer and Others
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Section 6.12
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Monthly Report
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Section 6.13
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Notices to the Transferor
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Section 6.14
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Annual Statement of Compliance from Servicer; Annual Servicing Report of Independent Public Accountants
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Section 6.15
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Adjustments
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Section 6.16
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Liability of Servicer
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Section 6.17
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Modifications to Credit Agreements
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Section 6.18
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Compliance with Requirements of Law
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Section 6.19
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Limitations on Liability of the Servicer and Others
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Section 6.20
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Access to Certain Documentation and Information Regarding the Receivables
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Section 6.21
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Examination of Records
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Section 6.22
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Communications Regarding Compliance Matters
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ARTICLE VII.
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TERMINATION EVENTS; AMORTIZATION EVENTS
|
||
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Section 7.1
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Termination Events
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Section 7.2
|
Remedies Upon the Occurrence of a Termination Event
|
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Section 7.3
|
Amortization Events
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ARTICLE VIII.
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INDEMNIFICATION
|
||
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Section 8.1
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Indemnification
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Section 8.2
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Tax Indemnification
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Section 8.3
|
Additional Costs
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Section 8.4
|
Other Costs and Expenses
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ARTICLE IX.
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MISCELLANEOUS
|
||
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Section 9.1
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Term of Agreement
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Section 9.2
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Waivers; Amendments
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Section 9.3
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Notices
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Section 9.4
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Governing Law; Submission to Jurisdiction
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Section 9.5
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WAIVER OF JURY TRIAL
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Section 9.6
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Severability; Counterparts, Waiver of Setoff
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Section 9.7
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Assignments and Participations
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Section 9.8
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Confidentiality
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Section 9.9
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No Bankruptcy Petition Against the Conduit Purchasers
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Section 9.10
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Limited Recourse
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Section 9.11
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Excess Funds
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Section 9.12
|
Conflict Waiver
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Section 9.13
|
Funding Notices and Receivables Schedule
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Section 9.14
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Recourse Limited to Transferred Receivables; Subordination
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Section 9.15
|
Integration
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Section 9.16
|
Tax Characterization
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Section 9.17
|
Right of First Refusal
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Section 9.18
|
Acknowledgement and Consent to Bail-In of EEA Financial Institutions
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Section 9.19
|
No Novation.
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ARTICLE X.
|
THE ADMINISTRATIVE AGENT AND THE FUNDING AGENTS
|
||
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Section 10.1
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Authorization and Action
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Section 10.2
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UCC Filings
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Section 10.3
|
Administrative Agent’s and Funding Agents’ Reliance, Etc.
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Section 10.4
|
Non-Reliance on the Administrative Agent and the Funding Agents
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Section 10.5
|
Administrative Agent, Funding Agents and Affiliates
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Section 10.6
|
Indemnification
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Section 10.7
|
Successor Administrative Agent
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Section 10.8
|
Helaba Funding Agent’s Undertakings Related To German VAT
|
EXHIBITS
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Exhibit A
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Form of Assignment and Assumption Agreement
|
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Exhibit B
|
Form of Daily Receivables File
|
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Exhibit C
|
Form of Eligible Interest Rate Cap
|
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Exhibit D
|
Hedging Requirements
|
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Exhibit E
|
Form of Monthly Report
|
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Exhibit F
|
Form of Receivables Schedule
|
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Exhibit G
|
Form of Funding Notice
|
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Exhibit H
|
Form of Investment Reduction Notice
|
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Exhibit I
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Form of Servicer’s Officer’s and Compliance Certificate
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SCHEDULES
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Schedule I
|
Conduit Purchasers, Committed Purchasers, Funding Agents and Related Information
|
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Schedule II
|
Schedule of Receivables
|
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Schedule III
|
Organizational Information
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Schedule IV
|
Documents Delivered on the Original Closing Date, the 2016 Amendment Closing Date and the 2017 Amendment Closing Date
|
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Schedule V
|
Designated Email Addresses
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Annexes
|
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Annex A
|
Aggregate Advance Amount Calculations
|
|
Annex B
|
Agreed-Upon Procedures
|
|
Annex C
|
T-Mobile Information - Data Confidentiality Provisions
|
|
Annex D
|
Form of Invoice
|
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(x)
|
the sum of (A) Eurodollar Rate for such Accrual Period plus (B) the Eurodollar Spread Rate (the “
Eurodollar Liquidity Funding Rate
”); or
|
(y)
|
the greater of (I) the sum of (A) the Federal Funds Effective Rate for each day in such Accrual Period plus (B) 0.50% plus (C) the Program Fee, and (II) the applicable Prime Rate plus the Program Fee for each day in such Accrual Period (the “
Alternate Liquidity Funding Rate
”);
|
(1)
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maintain books and records separate from any other person or entity;
|
(2)
|
maintain its own deposit, securities and other account or accounts, separate from any other person or entity, with financial institutions;
|
(3)
|
ensure that, to the extent that it jointly contracts with any of its members or Affiliates to do business with vendors or service providers or to share overhead expenses, the costs incurred in so doing shall be allocated fairly among such entities, and each such entity shall bear its fair share of such costs. To the extent that the Transferor contracts or does business with vendors or service providers where the goods and services provided are partially for
|
(4)
|
conduct its affairs strictly in accordance with its limited liability company agreement and observe all necessary, appropriate and customary company formalities;
|
(5)
|
ensure that its board of directors shall at all times include at least one Independent Director;
|
(6)
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not commingle its assets with those of any other person or entity;
|
(7)
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conduct its business (i) in its own name and not that of an Affiliate, and (ii) to the extent it maintains office space, from an office separate from that of the Member (but which may be located in the same facility as and leased from the Member) at which will be maintained its own separate limited liability company books and records;
|
(8)
|
other than as contemplated herein, in the Sale Agreement or in one of the Related Documents and related documentation, pay its own liabilities and expenses only out of its own funds;
|
(9)
|
observe all formalities required under the Delaware Limited Liability Company Act;
|
(10)
|
not guarantee or become obligated for the debts of any other person or entity;
|
(11)
|
ensure that no Affiliate of the Transferor shall advance funds to the Transferor, and no Affiliate of the Transferor will otherwise guaranty debts of the Transferor;
|
(12)
|
not hold out its credit as being available to satisfy the obligation of any other person or entity;
|
(13)
|
not acquire the obligations or securities of its Affiliates;
|
(14)
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not make loans to any other person or entity or buy or hold evidence of indebtedness issued by any other person or entity;
|
(15)
|
other than as contemplated herein, in the Sale Agreement or in one of the Related Documents and related documentation, not pledge its assets for the benefit of any other person or entity;
|
(16)
|
hold itself out as a separate entity from its Affiliates and not conduct any business in the name of any of its Affiliates;
|
(17)
|
correct any known misunderstanding regarding its separate identity;
|
(18)
|
ensure that decisions with respect to its business and daily operations shall be independently made by the Transferor (although the officer making any particular decision may also be an officer or director of an Affiliate of the Transferor) and shall not be dictated by an Affiliate of the Transferor;
|
(19)
|
other than organizational expenses and as expressly provided herein, pay all expenses, indebtedness and other obligations incurred by it using its own funds;
|
(20)
|
not identify itself as a division of any other person or entity;
|
(21)
|
conduct business with its Affiliates on an arm’s-length basis on terms no more favorable to either party than the terms that would be found in a similar transaction involving unrelated third parties;
|
(22)
|
not engage in any business or activity of any kind, or enter into any transaction, indenture, mortgage, instrument, agreement, contract, lease or other undertaking which is not directly related to the transactions contemplated and authorized by this Agreement or the other Related Documents; and
|
(23)
|
comply with the limitations on its business and activities as set forth in its certificate of formation and shall not incur indebtedness other than pursuant to or as expressly permitted by the Related Documents.
|
|
T-MOBILE HANDSET FUNDING LLC,
as Transferor
|
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|
|
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|
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By:
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/s/ Dirk Wehrse
|
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Name:
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Dirk Wehrse
|
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Title:
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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.,
in its individual capacity with respect to Section 2.15(b)
and as Guarantor
|
|
|
|
|
|
|
|
|
By:
|
/s/ Dirk Wehrse
|
|
Name:
|
Dirk Wehrse
|
|
Title:
|
Senior Vice President, Treasury & Treasurer
|
|
ROYAL BANK OF CANADA,
as Administrative Agent
|
|
|
|
|
|
|
|
|
By:
|
/s/ Edward V. Westerman
|
|
Name:
|
Edward V. Westerman
|
|
Title:
|
Authorized Signatory
|
|
OLD LINE FUNDING, LLC,
as a Conduit Purchaser
|
|
|
|
|
|
|
|
|
By:
|
/s/ Royal Bank of Canada, as
|
|
Name:
|
Attorney-in-Fact
|
|
OLD LINE FUNDING, LLC,
as a Conduit Purchaser
|
|
|
|
|
|
|
|
|
By:
|
/s/ Royal Bank of Canada, as
|
|
Name:
|
Attorney-in-Fact
|
|
|
|
|
|
|
|
By:
|
/s/ Kimberly L. Wagner
|
|
Name:
|
Kimberly L. Wagner
|
|
Title:
|
Authorized Signatory
|
|
ROYAL BANK OF CANADA,
as a Funding Agent
|
|
|
|
|
|
|
|
|
By:
|
/s/ Edward V. Westerman
|
|
Name:
|
Edward V. Westerman
|
|
Title:
|
Authorized Signatory
|
|
LANDESBANK HESSEN-THÜRINGEN GIROZENTRALE,
as a Committed Purchaser
|
|
|
|
|
|
|
|
|
By:
|
/s/ Daniel Geflittere
|
|
Name:
|
Daniel Geflitter
|
|
Title:
|
Assistant Vice President / AVP
|
|
|
|
|
|
|
|
By:
|
/s/ Bjoern Mollner
|
|
Name:
|
Bjoern Mollner
|
|
Title:
|
Senior Vice President / SVP
|
|
LANDESBANK HESSEN-THÜRINGEN GIROZENTRALE,
as a Funding Agent |
|
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By:
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/s/ Daniel Geflittere
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Name:
|
Daniel Geflitter
|
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Title:
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Assistant Vice President / AVP
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By:
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/s/ Bjoern Mollner
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Name:
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Bjoern Mollner
|
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Title:
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Senior Vice President / SVP
|
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GOTHAM FUNDING CORPORATION,
as a Conduit Purchaser
|
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By:
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/s/ David V. DeAngelis
|
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Name:
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David V. DeAngelis
|
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Title:
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Vice President
|
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THE BANK OF TOKYO-MITSUBISHI UFJ, LTD.,
NEW YORK BRANCH,
as a Committed Purchaser
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By:
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/s/ Luna Mills
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Name:
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Luna Mills
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Title:
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Managing Director
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THE BANK OF TOKYO-MITSUBISHI UFJ, LTD.,
NEW YORK BRANCH,
as a Funding Agent
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By:
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/s/ Luna Mills
|
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Name:
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Luna Mills
|
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Title:
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Managing Director
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STARBIRD FUNDING CORPORATION,
as a Conduit Purchaser
|
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By:
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/s/ Damian A. Perez
|
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Name:
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Damian A. Perez
|
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Title:
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Vice President
|
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BNP PARIBAS,
as a Committed Purchaser
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By:
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/s/ Khol-Anh Berger-Luong
|
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Name:
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Khol-Anh Berger-Luong
|
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Title:
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Managing Director
|
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By:
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/s/ Steve Parsons
|
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Name:
|
Steve Parsons
|
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Title:
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Managing Director
|
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BNP PARIBAS,
as Funding Agent |
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By:
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/s/ Khol-Anh Berger-Luong
|
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Name:
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Khol-Anh Berger-Luong
|
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Title:
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Managing Director
|
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|
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By:
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/s/ Steve Parsons
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Name:
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Steve Parsons
|
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Title:
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Managing Director
|
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[ASSIGNOR]
|
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By:
|
|
|
Authorized Signatory
|
|
|
Title:
|
|
|
[ASSIGNOR’S FUNDING AGENT], as a
Funding Agent |
|
|
|
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|
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By:
|
|
|
Authorized Signatory
|
|
|
Title:
|
|
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[ASSIGNOR’S COMMITTED PURCHASER,],
as a Committed Purchaser
|
|
|
|
|
|
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By:
|
|
|
Authorized Signatory
|
|
|
Title:
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[ASSIGNEE]
|
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|
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By:
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|
|
Authorized Signatory
|
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|
Title:
|
|
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[ASSIGNEE’S FUNDING AGENT], as a
FUNDING AGENT |
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By:
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Authorized Signatory
|
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Title:
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[ASSIGNEE’S COMMITTED PURCHASER],
as a Committed Purchaser |
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|
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By:
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Authorized Signatory
|
|
|
Title:
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[IF APPLICABLE]
CONSENTED TO:
T-MOBILE HANDSET FUNDING LLC,
as Transferor |
|
|
|
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By:
|
|
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Authorized Signatory
|
|
|
Title:
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|
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Fax #
l
|
|
|||
T-MOBILE HANDSET FUNDING LLC
12920 SE 38th Street
Bellevue, WA 98006
|
DD MM YYYY
|
|||
Attention:
|
l
|
|
||
Re:
|
CAP Transaction MATURITY DATE DD MMM YYYY FOR USD
l
(Our Ref. No.
l
/
l
)
|
|
Notional Amount:
|
USD
l
(See Schedule A attached)
|
Trade Date:
|
DD MMM YYYY
|
Effective Date:
|
DD MMM YYYY
|
Termination Date:
|
[30 November 2018]
|
Fixed Amounts:
|
|
|
Fixed Rate Payer:
|
T-MOBILE HANDSET FUNDING LLC (“Counterparty”)
|
|
Fixed Rate Payer Payment Date
|
DD MMM YYYY
|
|
Fixed Rate Payer Payment Amount:
|
USD
l
|
Floating Amounts:
|
|
|
Floating Rate Payer:
|
ROYAL BANK OF CANADA
(“Bank”)
|
|
CAP Rate:
|
l
percent
|
|
Floating Rate Payer Payment Dates:
|
MONTHLY
commencing on DD MMM YYYY, and on the Business Day preceding the fifteenth day of each calendar month thereafter.
|
|
Floating Rate for initial Calculation Period:
|
l
percent
|
|
Floating Rate Option:
|
USD-LIBOR-BBA
|
|
Designated Maturity:
|
1MONTH
|
|
Floating Rate Day Count Fraction:
|
Actual/360
|
|
Reset Dates:
|
The first day of each Calculation Period
|
Business Day Convention for Floating Rate Payment Dates:
|
Preceding
|
|
Business Day:
|
London, New York
|
|
|
|
|
Payments to
|
Bank
|
CHASUS33
JPMORGAN CHASE BANK N.A. NEW YORK Account #: |
Payments to
|
Counterparty
|
US Bank
Account #
ABA Code
|
(a) The Office of Counterparty for the Transaction is BELLEVUE, WA
|
(b) The Office of Bank for the Transaction is TORONTO
|
Telephone No.:
|
416-842-
l
|
Facsimile No.:
|
416-842-
l
|
Yours sincerely,
|
Confirmed as of the date first written:
|
For and on behalf of
|
For and on behalf of
|
ROYAL BANK OF CANADA
|
T-MOBILE HANDSET FUNDING LLC
|
|
|
|
|
By:
Not Applicable.
|
By:
|
|
Authorized signature
|
Authorized signature
|
ROYAL BANK OF CANADA pays USD to T-MOBILE HANDSET FUNDING LLC
(Our Ref. No. XXXXXXX / XXXXXXX) |
Calc Date
|
Period Begin
|
Period End
|
Days
|
Interest
Date |
Principal
Date |
Payment
Amount |
Interest
Rate |
Spread
Rate |
Schedule A
|
DD MMM YYYY
|
DD MMM YYYY
|
DD MMM YYYY
|
XX
|
DD MMM YYYY
|
|
X.XX
|
l
|
0.00000
|
X,XXX,XXX.XX
|
DD MMM YYYY
|
DD MMM YYYY
|
DD MMM YYYY
|
XX
|
DD MMM YYYY
|
|
X.XX
|
l
|
0.00000
|
X,XXX,XXX.XX
|
DD MMM YYYY
|
DD MMM YYYY
|
DD MMM YYYY
|
XX
|
DD MMM YYYY
|
|
X.XX
|
l
|
0.00000
|
X,XXX,XXX.XX
|
DD MMM YYYY
|
DD MMM YYYY
|
DD MMM YYYY
|
XX
|
DD MMM YYYY
|
|
X.XX
|
l
|
0.00000
|
X,XXX,XXX.XX
|
DD MMM YYYY
|
DD MMM YYYY
|
DD MMM YYYY
|
XX
|
DD MMM YYYY
|
|
X.XX
|
l
|
0.00000
|
X,XXX,XXX.XX
|
DD MMM YYYY
|
DD MMM YYYY
|
DD MMM YYYY
|
XX
|
DD MMM YYYY
|
|
X.XX
|
l
|
0.00000
|
X,XXX,XXX.XX
|
DD MMM YYYY
|
DD MMM YYYY
|
DD MMM YYYY
|
XX
|
DD MMM YYYY
|
|
X.XX
|
l
|
0.00000
|
X,XXX,XXX.XX
|
DD MMM YYYY
|
DD MMM YYYY
|
DD MMM YYYY
|
XX
|
DD MMM YYYY
|
|
X.XX
|
l
|
0.00000
|
X,XXX,XXX.XX
|
DD MMM YYYY
|
DD MMM YYYY
|
DD MMM YYYY
|
XX
|
DD MMM YYYY
|
|
X.XX
|
l
|
0.00000
|
X,XXX,XXX.XX
|
DD MMM YYYY
|
DD MMM YYYY
|
DD MMM YYYY
|
XX
|
DD MMM YYYY
|
|
X.XX
|
l
|
0.00000
|
X,XXX,XXX.XX
|
DD MMM YYYY
|
DD MMM YYYY
|
DD MMM YYYY
|
XX
|
DD MMM YYYY
|
|
X.XX
|
l
|
0.00000
|
X,XXX,XXX.XX
|
DD MMM YYYY
|
DD MMM YYYY
|
DD MMM YYYY
|
XX
|
DD MMM YYYY
|
|
X.XX
|
l
|
0.00000
|
X,XXX,XXX.XX
|
DD MMM YYYY
|
DD MMM YYYY
|
DD MMM YYYY
|
XX
|
DD MMM YYYY
|
|
X.XX
|
l
|
0.00000
|
X,XXX,XXX.XX
|
DD MMM YYYY
|
DD MMM YYYY
|
DD MMM YYYY
|
XX
|
DD MMM YYYY
|
|
X.XX
|
l
|
0.00000
|
X,XXX,XXX.XX
|
DD MMM YYYY
|
DD MMM YYYY
|
DD MMM YYYY
|
XX
|
DD MMM YYYY
|
|
X.XX
|
l
|
0.00000
|
X,XXX,XXX.XX
|
DD MMM YYYY
|
DD MMM YYYY
|
DD MMM YYYY
|
XX
|
DD MMM YYYY
|
|
X.XX
|
l
|
0.00000
|
X,XXX,XXX.XX
|
DD MMM YYYY
|
DD MMM YYYY
|
DD MMM YYYY
|
XX
|
DD MMM YYYY
|
|
X.XX
|
l
|
0.00000
|
X,XXX,XXX.XX
|
DD MMM YYYY
|
DD MMM YYYY
|
DD MMM YYYY
|
XX
|
DD MMM YYYY
|
|
X.XX
|
l
|
0.00000
|
X,XXX,XXX.XX
|
DD MMM YYYY
|
DD MMM YYYY
|
DD MMM YYYY
|
XX
|
DD MMM YYYY
|
|
X.XX
|
l
|
0.00000
|
X,XXX,XXX.XX
|
DD MMM YYYY
|
DD MMM YYYY
|
DD MMM YYYY
|
XX
|
DD MMM YYYY
|
|
X.XX
|
l
|
0.00000
|
X,XXX,XXX.XX
|
Royal Bank of Canada,
as Administrative Agent and Funding Agent
200 Vesey Street, 12th Floor
New York, NY 10281
Attention: Securitization Finance Email: conduit.management@rbccm.com
Facsimile: (212) 428‑2304
|
Landesbank Hessen-Thüringen Girozentrale,
as Funding Agent
Neue Mainzer Straße 52-58
60311 Frankfurt am Main
Germany
Attention: Björn Mollner / Björn Reinecke Email: bjoern.mollner@helaba.de, bjoern.reinecke@helaba.de
Facsimile: +49 (0)69 9132 4190
|
BNP Paribas,
as Funding Agent
787 Seventh Avenue
New York, New York 10019
Email: dl.starbirdadmin@us.bnpparibas.com,
starbird@gssnyc.com
|
The Bank of Tokyo-Mitsubishi UFJ, LTD.,
New York Branch,
as Funding Agent
1221 Avenue of the Americas
New York, New York 10020
|
RE:
|
T-Mobile Handset Funding LLC – Second Amended and Restated Receivables Purchase and Administration Agreement
|
|
Very truly yours,
T-MOBILE HANDSET FUNDING, as Transferor
|
|
|
|
|
|
|
|
|
By:
|
|
|
Name:
|
|
|
Title:
|
|
Acknowledged and Agreed:
|
|
|
T-MOBILE FINANCIAL LLC,
as Servicer |
|
|
|
|
|
By:
|
|
|
Name:
|
|
|
Title:
|
|
|
|
T-MOBILE HANDSET FUNDING LLC
|
|
|
|
|
|
By:
Name: Title: |
|
T-MOBILE FINANCIAL LLC
|
|
By:
|
|
|
Its: [Treasurer] [Chief Accounting Officer]
|
Name of Conduit Purchaser
|
Name of Committed Purchaser(s)
|
Name of Funding Agent
|
Ownership Group
|
Address/Telecopy for Notices
|
Account for Funds Transfer
|
Ownership Group Purchase Limit
|
Ownership Group Percentage
|
Old Line Funding, LLC
|
Royal Bank of Canada
|
Royal Bank of Canada
|
Old Line Funding, LLC, as a Conduit Purchaser
Royal Bank of Canada, as Committed Purchaser, Funding Agent and Conduit Support Provider
|
If to the Conduit Purchaser
:
Old Line Funding , LLC
c/o Global Securitization Services
68 South Service Road, Suite 120
Melville, NY 11747
Attention: Kevin Burns
Tel. No.: (631) 587-4700
Facsimile No.: (212) 302-8767
Email: conduitadmin@gssnyc.com
with a copy to
:
RBC Capital Markets
Two Little Falls Center
2751 Centerville Road,
Suite 212
Wilmington, DE 19808
Attention: Securitization Finance
Tel. No.: (302) 892-5903
Facsimile No.: (302) 892-5900
Email: conduit.management@rbccm.com
|
Old Line Funding, LLC
Bank: Deutsche Bank Trust Company Americas ABA #: Acct #:
Ref:
|
$460,000,000
|
38.33%
|
Name of Conduit Purchaser
|
Name of Committed Purchaser(s)
|
Name of Funding Agent
|
Ownership Group
|
Address/Telecopy for Notices
|
Account for Funds Transfer
|
Ownership Group Purchase Limit
|
Ownership Group Percentage
|
|
|
|
|
If to the Committed Purchaser, Funding Agent or Conduit Support Provider:
Royal Bank of Canada
Royal Bank Plaza, North Tower
200 Bay Street
2
nd
Floor
Toronto Ontario M5J2W7 Attn: Securitization Finance Tel: (416) 842-3842 Email: conduit.management@rbccm.com
with a copy to
:
Royal Bank of Canada
Two Little Falls Center
2751 Centerville Road
Suite 212
Wilmington, DE 19808
Tel. No.: (302) 892-5903
Email:
conduit.management@rbccm.com
|
|
|
|
Name of Conduit Purchaser
|
Name of Committed Purchaser(s)
|
Name of Funding Agent
|
Ownership Group
|
Address/Telecopy for Notices
|
Account for Funds Transfer
|
Ownership Group Purchase Limit
|
Ownership Group Percentage
|
N/A
|
Landesbank Hessen-Thüringen Girozentrale
|
Landesbank Hessen-Thüringen Girozentrale
|
Landesbank Hessen-Thüringen Girozentrale, as Committed Purchaser and Funding Agent
|
Landesbank Hessen-Thüringen Girozentrale
Neue Mainzer Straße 52-58 60311 Frankfurt am Main Germany Attn: Björn Mollner / Björn Reinecke Tel: +49 (0)69 9132 – ext: 5208 / 3489 Fax: +49 (0)69 9132 4190 Email: bjoern.mollner@helaba.de, bjoern.reinecke@helaba.de |
Landesbank Hessen-Thüringen Girozentrale
Bank: Citibank N.A., New York ABA #: Acct #: Ref: |
$195,000,000
|
16.25%
|
Name of Conduit Purchaser
|
Name of Committed Purchaser(s)
|
Name of Funding Agent
|
Ownership Group
|
Address/Telecopy for Notices
|
Account for Funds Transfer
|
Ownership Group Purchase Limit
|
Ownership Group Percentage
|
Gotham Funding Corporation
|
The Bank of Tokyo-Mitsubishi UFJ, Ltd., New York Branch
|
The Bank of Tokyo-Mitsubishi UFJ, Ltd., New York Branch
|
Gotham Funding Corporation, as Conduit Purchaser
The Bank of Tokyo-Mitsubishi UFJ, Ltd., New York Branch, as Committed Purchaser, Funding Agent and Conduit Support Provider
|
If to the Conduit Purchaser:
Gotham Funding Corporation
c/o Global Securitization Services, LLC
68 South Service Road, Suite 120
Melville, NY 11747
Tel: (631) 930-7216
Fax: (212) 302-8767
Attn: David V. DeAngelis
Email: ddeangelis@gssnyc.com
with a copy to
:
The Bank of Tokyo-Mitsubishi UFJ, Ltd., New York Branch
1221 Avenue of the Americas
New York, NY 10020
Attn: Securitization Group
Tel: (212) 782-6957
Fax: (212) 782-6448
Email:
securitization_reporting@us.mufg.jp
If to the Committed Purchaser, Funding Agent or Conduit Support Provider:
The Bank of Tokyo-Mitsubishi UFJ, Ltd., New York Branch
1221 Avenue of the Americas
New York, NY 10020
Attn: Securitization Group
Tel: (212) 782-6957
Fax: (212) 782-6448
Email:
securitization_reporting@us.mufg.jp
|
Gotham Funding Corporation
Bank: Bank of Tokyo-Mitsubishi UFJ, NY Branch ABA #: Acct #: Ref: |
$275,000,000
|
22.92%
|
Name of Conduit Purchaser
|
Name of Committed Purchaser(s)
|
Name of Funding Agent
|
Ownership Group
|
Address/Telecopy for Notices
|
Account for Funds Transfer
|
Ownership Group Purchase Limit
|
Ownership Group Percentage
|
Starbird Funding Corporation
|
BNP Paribas
|
BNP Paribas
|
Starbird Funding Corporation, as Conduit Purchaser
BNP Paribas, as Committed Purchaser, Funding Agent and Conduit Support Provider
|
BNP Paribas
787 Seventh Avenue,
New York, New York 10019
Attention: Rose Navarro
Tel: 212-841-8122
With copies to:
Rose.navarro@us.bnpparibas.com, dl.starbirdadmin@us.bnpparibas.com, starbird@gssnyc.com
|
BNP Paribas New York
ABA#:
Acct:
Acct Name:
FFC:
Acct Ref:
|
$270,000,000
|
22.50%
|
T-Mobile Financial LLC : |
|
Chief Executive Office;
Principal Place of Business: |
12920 S.E. 38th Street
Bellevue, WA 98006 |
Locations of Records:
|
12920 S.E. 38th Street
Bellevue, WA 98006 |
Delaware Organizational
Identification Number: |
5565502
|
Federal Employer
Identification Number: |
47-1324347
|
Prior Name(s) in the Last 5 Years:
|
None
|
T-Mobile Handset Funding LLC : |
|
Chief Executive Office;
Principal Place of Business: |
12920 S.E. 38th Street
Bellevue, WA 98006 |
Locations of Records:
|
12920 S.E. 38th Street
Bellevue, WA 98006 |
Delaware Organizational
Identification Number: |
5752256
|
Federal Employer
Identification Number: |
36-5810380
|
Prior Name(s) in the Last 5 Years:
|
None
|
“Administrative Agent”
|
RBC
|
“Finco”
|
T-Mobile Financial LLC
|
“Gotham”
|
Gotham Funding Corporation
|
“Guarantor”
|
TMUS
|
“Helaba”
|
Landesbank Hessen-Thüringen Girozentrale
|
“HL”
|
Hogan Lovells US LLP, counsel to T-Mobile Funding, Finco and Guarantor
|
“Lloyds”
|
Lloyds Bank plc
|
“RBC”
|
Royal Bank of Canada
|
“Servicer”
|
Finco, in its capacity as Servicer
|
“Starbird”
|
Starbird
|
“T-Mobile Funding”
|
T-Mobile Handset Funding LLC
|
“TMUS”
|
T-Mobile US, Inc.
|
“TMUSA”
|
T-Mobile USA, Inc.
|
“Transferor”
|
T-Mobile Funding, in its capacity as Transferor
|
|
Document
|
A.
Documents Delivered in Connection with the Original Closing Date (documents are dated as of the Original Closing Date unless otherwise noted below)
:
|
|
1.
|
Receivables Sale Agreement, dated as of November 18, 2015, between Finco, as Seller and T-Mobile Funding, as Purchaser
|
2.
|
Receivables Purchase and Administration Agreement, dated as of November 18, 2015, among the Transferor, Finco, individually and as the Servicer, the Guarantor, the Conduit Purchasers party thereto, the Committed Purchasers party thereto and the Funding Agents party thereto, and the Administrative Agent
|
3.
|
Performance Guaranty, dated as of November 18, 2015, by the Guarantor in favor of the Administrative Agent and the Owners
|
4.
|
Swap Confirmation, between Royal Bank of Canada and the Transferor
|
5.
|
Risk Sharing Letter, dated as of November 18, 2015, between Helaba and the Transferor
|
6.
|
Blocked Account Control Agreement, dated as of November 18, 2015, among the Transferor, the Servicer, the Administrative Agent and U.S. Bank National Association
|
7.
|
Limited Liability Company Agreement of T-Mobile Funding, dated as of November 18, 2015
|
8.
|
Transaction Fee Letter, dated as of November 18, 2015, among the Transferor and the Funding Agents party thereto
|
9.
|
Administrative Agent Fee Letter, dated as of November 18, 2015, among the Transferor, Finco and the Administrative Agent
|
10.
|
Assistant Secretary’s Certificate of Finco
(i) Certificate of Formation
(ii) Limited Liability Company Agreement
(iii) Manager Resolutions
(iv) Good Standing (Delaware SOS)
(v) Incumbency Certificate
|
11.
|
Assistant Secretary’s Certificate of the Transferor
(i) Certificate of Formation
(ii) Limited Liability Company Agreement
(iii) Member Resolutions
(iv) Good Standing (Delaware SOS)
(v) Incumbency Certificate
|
12.
|
Assistant Secretary’s Certificate of Guarantor
(i) Certificate of Incorporation
(ii) By-Laws
(iii) Board Resolutions
(iv) Good Standing (Delaware SOS)
(v) Incumbency Certificate
|
13.
|
Officer’s Certificate of the Transferor (pursuant to Section 4.1(e) of the RPAA)
|
14.
|
Officer’s Certificate of the Servicer (pursuant to Section 4.1(e) of the RPAA)
|
15.
|
UCC-1 Financing Statement naming Finco, as Debtor, T-Mobile Funding, as Purchaser/Assignor Secured Party, and Administrative Agent, as Total Assignee/Secured Party, to be filed with the Secretary of State of Delaware in connection with the Receivables Sale Agreement
|
16.
|
UCC-1 Financing Statement naming T-Mobile Funding, as Debtor, and Administrative Agent, as Secured Party, to be filed with the Secretary of State of Delaware in connection with the Receivables Purchase and Administration Agreement
|
17.
|
UCC Search Report (Delaware) of UCC Financing Statements and Tax Liens Filed against Finco
|
|
Document
|
18.
|
UCC Search Report (Delaware) of UCC Financing Statements and Tax Liens Filed against T-Mobile Funding
|
19.
|
Opinion of HL, counsel to the Transferor, the Servicer, and the Guarantor, regarding certain corporate matters, including legality, validity and enforceability of the transaction documents, no conflict of law, and non-contravention of charter documents and certain material agreements.
|
20.
|
Opinion of HL regarding certain UCC matters.
|
21.
|
Opinion of HL regarding true sale matters.
|
22.
|
Opinion of HL regarding substantive consolidation matters.
|
23.
|
Opinion of HL regarding Volcker Rule and Investment Company Act matters.
|
24.
|
Original Closing Date Monthly Report (pursuant to Section 4.1(c) of RPAA)
|
25.
|
Initial Receivables Schedule (Schedule II to the RPAA)
|
26.
|
Evidence of establishment of Collection Account (pursuant to Section 4.1(m) of the RPAA)
|
27.
|
Flow of Funds
|
28.
|
Appointment of Independent Director for T-Mobile Funding
|
29.
|
Assurant Amendments
a. Amendment to Wireless Equipment Program Client Administration Agreement
b. Amendment to Wireless Equipment Program Billing and Collection Agreement |
30.
|
Partial Release of Collateral No. 3, by Finco, TMUS, and TMUSA, and agreed and acknowledged by Deutsche Bank AG New York Branch as Administrative Agent and Collateral Agent
|
31.
|
UCC-3 Amendment to Financing Statement naming Finco, as Debtor and Deutsche Bank AG New York Branch, as Administrative Agent and Collateral Agent, as Secured Party
|
B.
Documents to be Delivered in Connection with the 2016 Amendment Closing Date (documents are dated as of the 2016 Amendment Closing Date unless otherwise noted below)
:
|
|
1.
|
Amended and Restated Receivables Sale Agreement, between Finco, as Seller and T-Mobile Funding, as Purchaser
|
2.
|
Amended and Restated Receivables Purchase and Administration Agreement, among the Transferor, Finco, individually and as the Servicer, the Guarantor, the Conduit Purchasers party thereto, the Committed Purchasers party thereto and the Funding Agents party thereto, and the Administrative Agent
|
3.
|
Transaction Fee Letter (amending and restating the Transaction Fee Letter dated as of the Original Closing Date), among the Transferor and the Funding Agents party thereto
|
4.
|
Administrative Agent Fee Letter (amending and restating the Administrative Agent Fee Letter dated as of the Original Closing Date), among the Administrative Agent, the Transferor and Finco
|
5.
|
Confirmation of Guaranty by the Guarantor in favor of the Administrative Agent and the Owners
|
6.
|
Officer’s Certificate of the Transferor (pursuant to Section 4.1(e) of the RPAA)
|
7.
|
Officer’s Certificate of the Servicer (pursuant to Section 4.1(e) of the RPAA)
|
8.
|
Resolutions of TMUS
|
9.
|
Resolutions of Finco
|
10.
|
Resolutions of the Transferor
|
11.
|
2016 Amendment Closing Date Monthly Report (pursuant to Section 4.1(c) of RPAA)
|
|
Document
|
12.
|
Opinion of HL, counsel to the Transferor, the Servicer, and the Guarantor, regarding certain corporate matters, including legality, validity and enforceability of the transaction documents, no conflict of law, and non-contravention of charter documents and certain material agreements.
|
13.
|
Opinion of HL, addressed to Administrative Agent and Funding Agents, regarding certain UCC matters.
|
14.
|
Opinion of HL, addressed to Administrative Agent and Funding Agents, regarding true sale matters.
|
15.
|
Reliance Letter of HL, addressed to Gotham and Lloyds, regarding substantive consolidation matters.
|
16.
|
Reliance Letter of HL, addressed to Gotham and Lloyds, regarding Volcker Rule and Investment Company Act matters.
|
17.
|
Good Standing Certificates (Delaware SOS)
1. Finco
2. T-Mobile Funding
3. Guarantor
|
18.
|
UCC Search Report (Delaware) of UCC Financing Statements and Tax Liens Filed against Finco
|
19.
|
UCC Search Report (Delaware) of UCC Financing Statements and Tax Liens Filed against T-Mobile Funding
|
20.
|
T-Mobile Side Letter, between Finco and T-Mobile Funding.
|
C.
Documents to be Delivered in Connection with the 2017 Amendment Closing Date (documents are dated as of the 2017 Amendment Closing Date unless otherwise noted below)
:
|
|
21.
|
Second Amended and Restated Receivables Sale Agreement, between Finco, as Seller and T-Mobile Funding, as Purchaser
|
22.
|
Second Amended and Restated Receivables Purchase and Administration Agreement, among the Transferor, Finco, individually and as the Servicer, the Guarantor, the Conduit Purchasers party thereto, the Committed Purchasers party thereto and the Funding Agents party thereto, and the Administrative Agent
|
23.
|
Second Amended and Restated Transaction Fee Letter, among the Transferor and the Funding Agents party thereto
|
24.
|
Second Amended and Restated Administrative Agent Fee Letter, among the Administrative Agent, the Transferor and Finco
|
25.
|
Confirmation of Guaranty by the Guarantor in favor of the Administrative Agent and the Owners
|
26.
|
Officer’s Certificate of the Transferor (pursuant to Section 4.1(e) of the RPAA)
|
27.
|
Officer’s Certificate of the Servicer (pursuant to Section 4.1(e) of the RPAA)
|
28.
|
Resolutions of TMUS
|
29.
|
Resolutions of Finco
|
30.
|
Resolutions of the Transferor
|
31.
|
2017 Amendment Closing Date Monthly Report (pursuant to Section 4.1(c) of RPAA)
|
32.
|
Opinion of HL, counsel to the Transferor, the Servicer, and the Guarantor, regarding certain corporate matters, including legality, validity and enforceability of the transaction documents, no conflict of law, and non-contravention of charter documents and certain material agreements.
|
33.
|
Opinion of HL, addressed to Administrative Agent and Funding Agents, regarding certain UCC matters.
|
34.
|
Opinion of HL, addressed to Administrative Agent and Funding Agents, regarding true sale matters.
|
35.
|
Opinion of HL, addressed to Administrative Agent and Funding Agents, regarding substantive consolidation matters.
|
36.
|
Opinion of HL, addressed to Administrative Agent and Funding Agents, regarding Volcker Rule and Investment Company Act matters.
|
|
Document
|
37.
|
Good Standing Certificates (Delaware SOS)
1. Finco
2. T-Mobile Funding
3. Guarantor
|
38.
|
UCC Search Report (Delaware) of UCC Financing Statements and Tax Liens Filed against Finco
|
39.
|
UCC Search Report (Delaware) of UCC Financing Statements and Tax Liens Filed against T-Mobile Funding
|
40.
|
T-Mobile Side Letter, between Finco and T-Mobile Funding.
|
•
|
Determine whether payments assigned to the Administrative Agent from Assurant in connection with Jump Contracts are being applied appropriately (if applicable).
|
•
|
Determine if accounts are being properly aged in accordance with the terms and methodology (note any receivables that may be aged in a non-conforming manner).
|
•
|
Obtain a breakdown, by type, of dilutions and write-offs issued in a Collection Period and whether they are being applied in accordance with the Credit and Collection Policy.
|
•
|
Review whether Excess Concentration limits are being applied in accordance to the Agreement.
|
•
|
Review calculation of financial covenants to determine if such covenants are being calculated in accordance with the Agreement.
|
•
|
Review calculation of Dilution Ratio, Default Ratio and Delinquency Ratio to determine if such ratios are being calculated in accordance with the Agreement.
|
(a)
|
It shall not store T-Mobile subscriber information and subscriber billing records (collectively, “
Subscriber Information
”) outside of the United States or Canada without Finco’s prior written consent, which may be withheld for no reason, or any reason, in Finco’s sole and absolute discretion.
|
(b)
|
It shall not disclose Subscriber Information to any foreign government or entity without first, (a) satisfying all applicable U.S. federal, state and local legal requirements, including, if required, receiving appropriate authorization by a domestic U.S. court, or receiving prior written authorization from the U.S. Department of Justice, (b) to the extent not prohibited by law, rule, regulation or court order applicable to such Information Party (i) notifying Finco of the request for such information within five (5) calendar days of its receipt and (ii) reasonably cooperating with Finco to object to and commence appropriate proceedings to protect the information;
|
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
|