x
|
ANNUAL 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)
|
||
Securities registered pursuant to Section 12(b) of the Act:
|
||
Title of Each Class
|
|
Name of Each Exchange on Which Registered
|
Common Stock, $0.00001 par value per share
|
|
The NASDAQ Stock Market LLC
|
Securities registered pursuant to Section 12(g) of the Act:
None.
|
|
|
|
|
|
|||
|
|||
|
|||
|
|||
|
|||
|
|||
|
|
|
|
|
|||
|
|||
|
|||
|
|||
|
|||
|
|||
|
|||
|
|||
|
|
|
|
|
|||
|
|||
|
|||
|
|||
|
|||
|
|
|
|
|
|||
|
|||
|
|
||
|
|
•
|
the failure to obtain, or delays in obtaining, required regulatory approvals for the merger (the “Merger”) with Sprint Corporation (“Sprint”), pursuant to the Business Combination Agreement with Sprint and other parties therein (the “Business Combination Agreement”) and the other transactions contemplated by the Business Combination Agreement (collectively, the “Transactions”), and the risk that such approvals may result in the imposition of conditions that could adversely affect the combined company or the expected benefits of the Transactions, or the failure to satisfy any of the other conditions to the Transactions on a timely basis or at all;
|
•
|
the occurrence of events that may give rise to a right of one or both of the parties to terminate the Business Combination Agreement;
|
•
|
adverse effects on the market price of our common stock or on our operating results because of a failure to complete the Merger in the anticipated timeframe or at all;
|
•
|
inability to obtain the financing contemplated to be obtained in connection with the Transactions on the expected terms or timing or at all;
|
•
|
the ability of us, Sprint and the combined company to make payments on debt or to repay existing or future indebtedness when due or to comply with the covenants contained therein;
|
•
|
adverse changes in the ratings of our or Sprint’s debt securities or adverse conditions in the credit markets;
|
•
|
negative effects of the announcement, pendency or consummation of the Transactions on the market price of our common stock and on our or Sprint’s operating results, including as a result of changes in key customer, supplier, employee or other business relationships;
|
•
|
significant costs related to the Transactions, including financing costs and unknown liabilities of Sprint or that may arise;
|
•
|
failure to realize the expected benefits and synergies of the Transactions in the expected timeframes or at all;
|
•
|
costs or difficulties related to the integration of Sprint’s network and operations into our network and operations;
|
•
|
the risk of litigation or regulatory actions related to the Transactions;
|
•
|
the inability of us, Sprint or the combined company to retain and hire key personnel;
|
•
|
the risk that certain contractual restrictions contained in the Business Combination Agreement during the pendency of the Transactions could adversely affect our or Sprint’s ability to pursue business opportunities or strategic transactions;
|
•
|
adverse economic or political conditions in the U.S. and international markets;
|
•
|
competition, industry consolidation, and changes in the market for wireless services, which could negatively affect our ability to attract and retain customers;
|
•
|
the effects of any future merger, investment, or acquisition involving us, as well as the effects of mergers, investments, or acquisitions in the technology, media and telecommunications industry;
|
•
|
challenges in implementing our business strategies or funding our 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 and the effects of such changes, including product substitutions and deployment costs and performance;
|
•
|
the timing, scope and financial impact of our deployment of advanced network and business technologies;
|
•
|
the impact on our networks and business from major technology equipment failures;
|
•
|
breaches of our and/or our third-party vendors’ networks, information technology (“IT”) and data security, resulting in unauthorized access to customer confidential information;
|
•
|
natural disasters, terrorist attacks or similar incidents;
|
•
|
unfavorable outcomes of 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 and changes in data privacy laws;
|
•
|
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;
|
•
|
changes in accounting assumptions that regulatory agencies, including the Securities and Exchange Commission (“SEC”), may require, which could result in an impact on earnings;
|
•
|
changes in tax laws, regulations and existing standards and the resolution of disputes with any taxing jurisdictions;
|
•
|
the possibility that the reset process under our trademark license results in changes to the royalty rates for our trademarks;
|
•
|
the possibility that we may be unable to adequately protect our intellectual property rights or be accused of infringing the intellectual property rights of others;
|
•
|
our business, investor confidence in our financial results and stock price may be adversely affected if our internal controls are not effective; and
|
•
|
interests of a majority stockholder may differ from the interests of other stockholders.
|
•
|
Branded postpaid customers generally include customers who are qualified to pay after receiving wireless communication services utilizing phones, DIGITS or connected devices which includes tablets, wearables and SyncUp DRIVE™;
|
•
|
Branded prepaid customers generally include customers who pay for wireless communication services in advance. Our branded prepaid customers include customers of T-Mobile and Metro by T-Mobile; and
|
•
|
Wholesale customers include Machine-to-Machine (“M2M”) and Mobile Virtual Network Operator (“MVNO”) customers that operate on our network but are managed by wholesale partners.
|
•
|
65%
Branded postpaid customers;
|
•
|
30%
Branded prepaid customers; and
|
•
|
5%
Wholesale customers and Roaming and other services.
|
•
|
Unlimited talk, unlimited text and unlimited high-speed 4G LTE data on their device, where monthly wireless service fees and sales taxes are included in the advertised monthly recurring charge;
|
•
|
Video that typically streams at DVD (480p) quality and tethering is at maximum 3G speeds;
|
•
|
The ability for customers to keep their price for service until they decide to change it;
|
•
|
The ability for qualifying T-Mobile ONE customers on family plans to opt in for a standard monthly Netflix service plan at no additional cost; and
|
•
|
The ability for customers to choose to add on additional features for an additional cost on T-Mobile ONE Plus, where customers also receive:
|
•
|
Unlimited high definition video streaming;
|
•
|
20 GB of high-speed 4G LTE tethering;
|
•
|
Voicemail to Text, NameID and unlimited Gogo in-flight internet passes on capable domestic flights; and
|
•
|
Up to two times faster speeds when traveling abroad in 210+ countries and destinations.
|
•
|
for qualifying customers, depending on their credit profile, the option of financing all or a portion of the device purchase price at the time of sale over an installment period of up to
36 months
using an EIP.
|
•
|
for qualifying customers who finance their initial device with an EIP, an option to enroll in our Just Upgrade My Phone (“JUMP!
®
”) program to later upgrade their device. Upon a qualifying JUMP! upgrade, the customer’s remaining EIP balance is settled provided they trade-in their used device at the time of upgrade in good working condition and purchase a new device from us on a new EIP.
|
•
|
JUMP! On Demand™ includes a low monthly payment that covers the cost of leasing a new device and gives qualified customers the freedom to exchange it for a new device up to one time per month for no extra fee. Upon device upgrade or at lease end, customers must return their device in good working condition or purchase their device. Customers that choose to purchase their device have the option to finance their device over a
nine-month
EIP.
|
•
|
We owned an average of
110
MHz of spectrum nationwide as of
December 31, 2018
, comprised of an average of
31
MHz in the 600 MHz band,
10
MHz in the 700 MHz band,
29
MHz in the 1900 MHz PCS band and
40
MHz in the AWS band. We also own millimeter wave spectrum that comprises an average of
264 MHz
covering over
110 million
points of presence (“POPs”) in the 28 GHz band and
105 MHz
covering nearly
45 million
POPs in the 39 GHz band.
|
•
|
As of
December 31, 2018
, we owned a nationwide average of
31
MHz of 600 MHz low-band spectrum. We now own approximately
41
MHz of low-band spectrum (600 MHz and 700 MHz), covering
100%
of the U.S.
|
•
|
We are building out 5G across the US, including deployment in
six
of the top 10 markets, including New York and Los Angeles, in 2018. This network will be ready for the introduction of the first standards-based 5G smartphones in 2019. We plan on the delivery of a nationwide standards-based network next year.
|
•
|
In 2018, we entered into two multi-year contracts that will support the deployment of a nationwide 5G network. In July 2018, we and Nokia entered into a multi-year
$3.5 billion
contract for Nokia to provide us with complete end-to-end 5G technology, software and services. In September 2018, we and Ericsson announced a multi-year
$3.5 billion
contract in which Ericsson will provide us with the latest 5G New Radio hardware and software compliant with 3
rd
Generation Partnership Project (“3GPP”) standards.
|
•
|
We have started deployment of 600 MHz spectrum on an aggressive schedule. As of
December 31, 2018
, we were live in more than
2,700
cities and towns in
43
states and Puerto Rico covering hundreds of thousands of square miles. Combining 600 and 700 MHz spectrum, we have deployed low band spectrum to
301 million
POPs.
|
•
|
We have actively engaged with broadcasters to accelerate the Federal Communications Commission (“FCC”) spectrum clearance timelines, entering into
95
agreements with several parties. These agreements are expected to, in aggregate, accelerate clearing, bringing the total clearing target to approximately
272 million
POPs by year-end 2019. As of
December 31, 2018
, we had cleared approximately
135 million
POPs. We remain committed to assisting broadcasters occupying 600 MHz spectrum to move to new frequencies.
|
•
|
We currently have
29
devices compatible with 600 MHz including the latest iPhone generation.
|
•
|
We expect our 600 MHz spectrum holdings will be used to deploy America’s first nationwide standards-based 5G network next year. 600 MHz 4G LTE radios are software upgradeable to support 5G as it becomes available later this year.
|
•
|
Over the last year, we have entered into and closed on various agreements for the acquisition and exchange of 700 MHz A-Block, AWS and PCS spectrum licenses. See
Note 6 – Goodwill, Spectrum License Transactions and Other Intangible Assets
of the
Notes to the Consolidated Financial Statements
for further information.
|
•
|
We intend to opportunistically acquire spectrum licenses in private party transactions and future FCC spectrum license auctions.
|
•
|
We continue to expand our coverage breadth and, as of December 31, 2018, covered more than
325 million
people with 4G LTE.
|
•
|
As of
December 31, 2018
, we had equipment deployed on approximately
64,000
macro towers and
21,000
distributed antenna system (“DAS”) and small cell sites. We remain on plan to roll out approximately
20,000
small cells through 2019.
|
•
|
VoLTE comprised
87%
of total voice calls as of
December 31, 2018
, compared to
80%
as of
December 31, 2017
. Moving voice traffic to VoLTE frees up spectrum and allows for the transition of spectrum currently used for 2G and 3G to 4G LTE. We are leading the U.S. wireless industry in the rate of VoLTE adoption.
|
•
|
Carrier aggregation is live for our customers in
923
markets. This advanced technology delivers superior speed and
|
•
|
4x4 MIMO is currently available in
564
markets. This technology effectively delivers twice the speed and incremental network capacity to customers by doubling the number of data paths between the cell site and a customer's device. We started deploying massive MIMO (FD-capable and 5G with future software upgrades) in selected locations in late 2018.
|
•
|
We have rolled out 256 QAM in
988
markets. 256 QAM increases the number of bits delivered per transmission to enable faster speeds. We are the first carrier globally to have rolled out the combination of carrier aggregation, 4x4 MIMO and 256 QAM. This trifecta of standards has been rolled out to more than
500
markets.
|
•
|
We have also started rolling out LAA, a technology which utilizes unlicensed 5 GHz spectrum to augment available bandwidth. The first LAA small cell went live in New York City in the fourth quarter of 2017 and the technology has since been rolled out to nearly
1,700
cell sites, the vast majority being small cells. Deployments of LAA have also commenced in
28
cities including Los Angeles, Philadelphia, Washington DC, Atlanta, Houston, Las Vegas, San Diego and New Orleans. In areas where LAA has been deployed, customers with capable handsets have observed real-life speeds in excess of
500
Mbps.
|
•
|
In July 2018, we launched our Narrowband Internet of Things (“NB-IoT”) service nationwide, making us the first to launch NB-IoT in the U.S. and the first in the world to launch NB-IoT in the guard bands for improved efficiency. Built on the 3GPP standard, NB-IoT is a low power, wide area network LTE-advanced technology that provides a pathway to 5G Internet of Things and enables many comparable benefits like low power usage, long battery life and low device cost.
|
•
|
human error such as responding to deceptive communications or unintentionally executing malicious code;
|
•
|
physical damage, power surges or outages, or equipment failure, including those as a result of severe weather, natural disasters, terrorist attacks, political instability and volatility, and acts of war;
|
•
|
theft of customer and/or proprietary information offered for sale for competitive advantage or corporate extortion;
|
•
|
unauthorized access to our IT and business systems or to our network and critical infrastructure and those of our suppliers and other providers;
|
•
|
supplier failures or delays; and
|
•
|
system failures or outages of our business systems or communications network.
|
•
|
incurring additional indebtedness and issuing preferred stock;
|
•
|
paying dividends, redeeming capital stock, or making other restricted payments or investments;
|
•
|
selling or buying assets, properties, or licenses;
|
•
|
developing assets, properties, or licenses that we have or in the future may procure;
|
•
|
creating liens on assets securing indebtedness or other obligations;
|
•
|
participating in future FCC auctions of spectrum or private sales of spectrum;
|
•
|
engaging in mergers, acquisitions, business combinations, or other transactions;
|
•
|
entering into transactions with affiliates; and
|
•
|
placing restrictions on the ability of subsidiaries to pay dividends or make other payments.
|
•
|
limiting our flexibility in planning for, or reacting to, changes in our business or the communications industry or pursuing growth opportunities;
|
•
|
reducing the amount of cash available for other operational or strategic needs; and
|
•
|
placing us at a competitive disadvantage to competitors who are less leveraged than we are.
|
•
|
diversion of management attention from running our existing business;
|
•
|
increased costs to integrate the networks, spectrum, technology, personnel, customer base and business practices of the business involved in any such transaction with our business;
|
•
|
difficulties in effectively integrating the financial and operational systems of the business involved in any such transaction into (or supplanting such systems with) our financial and operational reporting infrastructure and internal control framework in an effective and timely manner;
|
•
|
potential exposure to material liabilities not discovered in the due diligence process or as a result of any litigation arising in connection with any such transaction;
|
•
|
significant transaction expenses in connection with any such transaction, whether consummated or not;
|
•
|
risks related to our ability to obtain any required regulatory approvals necessary to consummate any such transaction;
|
•
|
acquisition financing may not be available on reasonable terms or at all and any such financing could significantly increase our outstanding indebtedness or otherwise affect our capital structure or credit ratings; and
|
•
|
any business, technology, service, or product involved in any such transaction may significantly under-perform relative to our expectations, and we may not achieve the benefits we expect from the transaction, which could, among other things, also result in a write-down of goodwill and other intangible assets associated with such transaction.
|
•
|
consumer complaints and potential examinations or enforcement actions by federal and state regulatory agencies, including but not limited to the Consumer Financial Protection Bureau, state attorneys general, the FCC and the FTC; and
|
•
|
regulatory fines, penalties, enforcement actions, civil litigation, and/or class action lawsuits.
|
•
|
the incurrence of debt (excluding certain permitted debt) if our consolidated ratio of debt to cash flow, as defined in the indenture dated April 28, 2013, for the most recently ended four full fiscal quarters for which financial statements are available would exceed 5.25 to 1.0 on a pro forma basis;
|
•
|
the acquisition of any business, debt or equity interests, operations or assets of any person for consideration in excess of $1.0 billion;
|
•
|
the sale of any of our or our subsidiaries’ divisions, businesses, operations or equity interests for consideration in excess of $1.0 billion;
|
•
|
the incurrence of secured debt (excluding certain permitted secured debt);
|
•
|
any change in the size of our Board of Directors;
|
•
|
the issuances of equity securities in excess of 10% of our outstanding shares or to repurchase debt held by DT;
|
•
|
the repurchase or redemption of equity securities or the declaration of extraordinary or in-kind dividends or distributions other than on a pro rata basis; and
|
•
|
the termination or hiring of our chief executive officer.
|
•
|
our or our competitors’ actual or anticipated operating and financial results;
|
•
|
introduction of new products and services by us or our competitors or changes in service plans or pricing by us or our competitors;
|
•
|
analyst projections, predictions and forecasts, analyst target prices for our securities and changes in, or our failure to meet, securities analysts’ expectations;
|
•
|
transaction in our common stock by major investors;
|
•
|
share repurchases by us or purchases by DT;
|
•
|
DT’s financial performance, results of operation, or actions implied or taken by DT;
|
•
|
entry of new competitors into our markets or perceptions of increased price competition, including a price war;
|
•
|
our performance, including subscriber growth, and our financial and operational metric performance;
|
•
|
market perceptions relating to our services, network, handsets, and deployment of our LTE platform and our access to iconic handsets, services, applications, or content;
|
•
|
market perceptions of the wireless communications industry and valuation models for us and the industry;
|
•
|
conditions or trends in the Internet and the industry sectors in which we operate;
|
•
|
changes in our credit rating or future prospects;
|
•
|
changes in interest rates;
|
•
|
changes in our capital structure, including issuance of additional debt or equity to the public;
|
•
|
the availability or perceived availability of additional capital in general and our access to such capital;
|
•
|
actual or anticipated consolidation, or other strategic mergers or acquisition activities involving us or our competitors, or other participants in related or adjacent industries, or market speculations regarding such activities, including the pending Merger and views of market participants regarding the likelihood the conditions to the Merger will be satisfied and the anticipated benefits of the Merger will be realized;
|
•
|
disruptions of our operations or service providers or other vendors necessary to our network operations;
|
•
|
the general state of the U.S. and world politics and economies; and
|
•
|
availability of additional spectrum, whether by the announcement, commencement, bidding and closing of auctions for new spectrum or the acquisition of companies that own spectrum, and the extent to which we or our competitors succeed in acquiring additional spectrum.
|
•
|
the diversion of management attention to integration matters;
|
•
|
difficulties in integrating operations and systems, including intellectual property and communications systems, administrative and information technology infrastructure and financial reporting and internal control systems;
|
•
|
challenges in conforming standards, controls, procedures and accounting and other policies, business cultures and compensation structures between the two companies;
|
•
|
differences in control environments, cultures, and auditor expectations may result in future weaknesses and deficiencies while we work to integrate the companies and align guidelines and practices;
|
•
|
alignment of key performance measurements may result in a greater need to communicate and manage clear expectations while we work to integrate the companies and align guidelines and practices;
|
•
|
difficulties in integrating employees and attracting and retaining key personnel;
|
•
|
challenges in retaining existing customers and obtaining new customers;
|
•
|
difficulties in achieving anticipated cost savings, synergies, accretion targets, business opportunities, financing plans and growth prospects from the combination;
|
•
|
difficulties in managing the expanded operations of a significantly larger and more complex company;
|
•
|
the impact of the additional debt financing expected to be incurred in connection with the Transactions;
|
•
|
the transition of management to the combined company management team, and the need to address possible differences in corporate cultures and management philosophies;
|
•
|
contingent liabilities that are larger than expected; and
|
•
|
potential unknown liabilities, adverse consequences and unforeseen increased expenses associated with the Transactions.
|
•
|
incurring additional indebtedness and issuing preferred stock;
|
•
|
paying dividends, redeeming capital stock or making other restricted payments or investments;
|
•
|
selling or buying assets, properties or licenses;
|
•
|
developing assets, properties or licenses which the combined company has or in the future may procure;
|
•
|
creating liens on assets securing indebtedness or other obligations;
|
•
|
participating in future FCC auctions of spectrum or private sales of spectrum;
|
•
|
engaging in mergers, acquisitions, business combinations or other transactions;
|
•
|
entering into transactions with affiliates; and
|
•
|
placing restrictions on the ability of subsidiaries to pay dividends or make other payments.
|
|
Approximate Number
|
|
Approximate Size in Square Feet
|
||
Switching centers
|
61
|
|
|
1,300,000
|
|
Data centers
|
6
|
|
|
500,000
|
|
Call center
|
17
|
|
|
1,300,000
|
|
Warehouses
|
21
|
|
|
500,000
|
|
•
|
Approximately
64,000
macro towers and
21,000
distributed antenna system and small cell sites.
|
•
|
Approximately
2,200
T-Mobile and Metro by T-Mobile retail locations, including stores and kiosks ranging in size from approximately
100
square feet to
17,000
square feet.
|
•
|
Office space totaling approximately
1,000,000
square feet for our corporate headquarters in Bellevue, Washington. In January 2019, we executed leases totaling approximately 170,000 additional square feet for our corporate headquarters. We use these offices for engineering and administrative purposes.
|
•
|
Office space throughout the U.S., totaling approximately
1,700,000
square feet, for use by our regional offices primarily for administrative, engineering and sales purposes.
|
|
At December 31,
|
||||||||||||||||||||||
|
2013
|
|
2014
|
|
2015
|
|
2016
|
|
2017
|
|
2018
|
||||||||||||
T-Mobile US, Inc.
|
$
|
100.00
|
|
|
$
|
80.08
|
|
|
$
|
116.29
|
|
|
$
|
170.96
|
|
|
$
|
188.79
|
|
|
$
|
189.09
|
|
S&P 500
|
100.00
|
|
|
113.69
|
|
|
115.26
|
|
|
129.05
|
|
|
157.22
|
|
|
150.33
|
|
||||||
NASDAQ Composite
|
100.00
|
|
|
114.62
|
|
|
122.81
|
|
|
133.19
|
|
|
172.11
|
|
|
165.84
|
|
||||||
Dow Jones US Mobile Telecommunications TSM
|
100.00
|
|
|
89.33
|
|
|
93.68
|
|
|
119.39
|
|
|
122.09
|
|
|
145.29
|
|
(in millions, except per share and customer amounts)
|
As of and for the Year Ended December 31,
|
||||||||||||||||||
2018
(1)
|
|
2017
|
|
2016
|
|
2015
|
|
2014
|
|||||||||||
Statement of Operations Data
|
|
|
|
|
|
|
|
|
|
||||||||||
Total service revenues
|
$
|
31,992
|
|
|
$
|
30,160
|
|
|
$
|
27,844
|
|
|
$
|
24,821
|
|
|
$
|
22,375
|
|
Total revenues
|
43,310
|
|
|
40,604
|
|
|
37,490
|
|
|
32,467
|
|
|
29,920
|
|
|||||
Operating income
|
5,309
|
|
|
4,888
|
|
|
4,050
|
|
|
2,479
|
|
|
1,772
|
|
|||||
Total other expense, net
|
(1,392
|
)
|
|
(1,727
|
)
|
|
(1,723
|
)
|
|
(1,501
|
)
|
|
(1,359
|
)
|
|||||
Income tax (expense) benefit
(2)
|
(1,029
|
)
|
|
1,375
|
|
|
(867
|
)
|
|
(245
|
)
|
|
(166
|
)
|
|||||
Net income
|
2,888
|
|
|
4,536
|
|
|
1,460
|
|
|
733
|
|
|
247
|
|
|||||
Net income attributable to common stockholders
|
2,888
|
|
|
4,481
|
|
|
1,405
|
|
|
678
|
|
|
247
|
|
|||||
Earnings per share
|
|
|
|
|
|
|
|
|
|
||||||||||
Basic
|
$
|
3.40
|
|
|
$
|
5.39
|
|
|
$
|
1.71
|
|
|
$
|
0.83
|
|
|
$
|
0.31
|
|
Diluted
|
3.36
|
|
|
5.20
|
|
|
1.69
|
|
|
0.82
|
|
|
0.30
|
|
|||||
Balance Sheet Data
|
|
|
|
|
|
|
|
|
|
||||||||||
Cash and cash equivalents
|
$
|
1,203
|
|
|
$
|
1,219
|
|
|
$
|
5,500
|
|
|
$
|
4,582
|
|
|
$
|
5,315
|
|
Property and equipment, net
|
23,359
|
|
|
22,196
|
|
|
20,943
|
|
|
20,000
|
|
|
16,245
|
|
|||||
Spectrum licenses
|
35,559
|
|
|
35,366
|
|
|
27,014
|
|
|
23,955
|
|
|
21,955
|
|
|||||
Total assets
|
72,468
|
|
|
70,563
|
|
|
65,891
|
|
|
62,413
|
|
|
56,639
|
|
|||||
Total debt, excluding tower obligations
|
27,547
|
|
|
28,319
|
|
|
27,786
|
|
|
26,243
|
|
|
21,946
|
|
|||||
Stockholders' equity
|
24,718
|
|
|
22,559
|
|
|
18,236
|
|
|
16,557
|
|
|
15,663
|
|
|||||
Statement of Cash Flows and Operational Data
|
|
|
|
|
|
|
|
|
|
||||||||||
Net cash provided by operating activities
(3)
|
$
|
3,899
|
|
|
$
|
3,831
|
|
|
$
|
2,779
|
|
|
$
|
1,877
|
|
|
$
|
1,957
|
|
Purchases of property and equipment
|
(5,541
|
)
|
|
(5,237
|
)
|
|
(4,702
|
)
|
|
(4,724
|
)
|
|
(4,317
|
)
|
|||||
Purchases of spectrum licenses and other intangible assets, including deposits
|
(127
|
)
|
|
(5,828
|
)
|
|
(3,968
|
)
|
|
(1,935
|
)
|
|
(2,900
|
)
|
|||||
Proceeds related to beneficial interests in securitization transactions
(3)
|
5,406
|
|
|
4,319
|
|
|
3,356
|
|
|
3,537
|
|
|
2,228
|
|
|||||
Net cash (used in) provided by financing activities
(3)
|
(3,336
|
)
|
|
(1,367
|
)
|
|
463
|
|
|
3,413
|
|
|
2,485
|
|
|||||
Total customers (in thousands)
(4)
|
79,651
|
|
|
72,585
|
|
|
71,455
|
|
|
63,282
|
|
|
55,018
|
|
(1)
|
On January 1, 2018, we adopted Accounting Standards Update (“ASU”) 2014-09, “Revenue from Contracts with Customers (Topic 606)” and all the related amendments (collectively, the “new revenue standard”), using the modified retrospective method with the cumulative effect of initially applying the guidance recognized at the date of initial application. Comparative information has not been restated and continues to be reported under the standards in effect for those periods. See
Note 1 – Summary of Significant Accounting Policies
of the Notes to the Consolidated Financial Statements included in Part II, Item 8 of this Form 10-K for further information.
|
(2)
|
In December 2017, the Tax Cuts and Jobs Act of 2017 (“TCJA”) was signed into legislation. The TCJA included numerous changes to existing tax law, including a permanent reduction in the federal corporate income tax rate from 35% to 21%. The rate reduction took place on January 1, 2018. We recognized a net tax benefit of
$2.2 billion
associated with the enactment of the TCJA in
Income tax (expense) benefit
in our
Consolidated Statements of Comprehensive Income
in the fourth quarter of 2017, primarily due to a re-measurement of deferred tax assets and liabilities.
|
(3)
|
On January 1, 2018, we adopted ASU 2016-15, “Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments” (the “new cash flow standard”) which impacted the presentation of our cash flows related to our beneficial interests in securitization transactions, which is the deferred purchase price, resulting in a reclassification of cash inflows from Operating activities to Investing activities of approximately
$5.4 billion
,
$4.3 billion
,
$3.4 billion
,
$3.5 billion
and
$2.2 billion
for the years ended
December 31, 2018
,
2017
,
2016
, 2015 and 2014, respectively, in our
Consolidated Statements of Cash Flows
. The new cash flow standard also impacted the presentation of our cash payments for debt prepayment and debt extinguishment costs, resulting in a reclassification of cash outflows from Operating activities to Financing activities of
$212 million
,
$188 million
and
$39 million
for the years ended
December 31, 2018
,
2017
and 2014, respectively, in our
Consolidated Statements of Cash Flows
. There were
no
cash payments for debt prepayment and debt extinguishment costs during the years ended
December 31, 2016
and 2015. We have applied the new cash flow standard retrospectively to all periods presented.
|
(4)
|
We believe current and future regulatory changes have made the Lifeline program offered by our wholesale partners uneconomical. We will continue to support our wholesale partners offering the Lifeline program, but have excluded the Lifeline customers from our reported wholesale subscriber base resulting in the removal of
4,528,000
reported wholesale customers in 2017.
|
•
|
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 August 2018, we introduced Un-carrier Next, a new initiative that radically changes the structure of our customer service department and solves several significant pain points for customers. Postpaid customers will get directly through to a human when they call customer support, and that human will be one member of a “Team of Experts” devoted to that customer and other customers in their geographic region. No bots, no bouncing, no BS.
|
•
|
Un-carrier Next also provided customers exclusive access to a free one-year Pandora Plus subscription via the T-Mobile Tuesdays App in August 2018. In addition, we announced an exclusive multi-year partnership with Live Nation, the world’s largest live entertainment company, giving Un-carrier customers rock star status at Live Nation amphitheater and arena concerts, including access to last-minute reserve seats in sold-out sections and discounted tickets.
|
|
Year Ended December 31,
|
|
2018 Versus 2017
|
|
2017 Versus 2016
|
|||||||||||||||
(in thousands)
|
2018
|
|
2017
|
|
2016
|
# Change
|
|
% Change
|
|
# Change
|
|
% Change
|
||||||||
Net customer additions
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Branded postpaid customers
|
4,459
|
|
|
3,620
|
|
|
4,097
|
|
|
839
|
|
|
23
|
%
|
|
(477
|
)
|
|
(12
|
)%
|
Branded prepaid customers
|
460
|
|
|
855
|
|
|
2,508
|
|
|
(395
|
)
|
|
(46
|
)%
|
|
(1,653
|
)
|
|
(66
|
)%
|
Total branded customers
|
4,919
|
|
|
4,475
|
|
|
6,605
|
|
|
444
|
|
|
10
|
%
|
|
(2,130
|
)
|
|
(32
|
)%
|
|
Year Ended December 31,
|
|
Bps Change 2018 Versus 2017
|
|
Bps Change 2017 Versus 2016
|
|||||||
2018
|
|
2017
|
|
2016
|
|
|||||||
Branded postpaid phone churn
|
1.01
|
%
|
|
1.18
|
%
|
|
1.30
|
%
|
|
-17 bps
|
|
-12 bps
|
Branded prepaid churn
|
3.96
|
%
|
|
4.04
|
%
|
|
3.88
|
%
|
|
-8 bps
|
|
16 bps
|
•
|
On January 1, 2018, we closed on our previously announced Unit Purchase Agreement to acquire the remaining equity in Iowa Wireless Services, LLC (“IWS”), a
54%
owned unconsolidated subsidiary, for a purchase price of
$25 million
. We accounted for our acquisition of IWS as a business combination and recognized a bargain purchase gain of approximately
$25 million
as part of our purchase price allocation and a gain on our previously held equity interest of approximately
$15 million
in Other income, net in 2018.
|
•
|
On January 22, 2018, we completed our acquisition of television innovator Layer3 TV for cash consideration of
$318
million. Upon closing of the transaction, Layer3 TV became a wholly-owned consolidated subsidiary. Layer3 TV acquires and distributes digital entertainment programming primarily through the internet to residential customers, offering direct to home digital television and multi-channel video programming distribution services. This transaction represented an opportunity to acquire a complementary service to our existing wireless service to advance our video strategy. We accounted for the purchase of Layer3 TV as a business combination and recognized
$218 million
of goodwill as part of our purchase price allocation.
|
|
Year Ended December 31, 2018
|
||||||||||
|
Previous Revenue Standard
|
|
New Revenue Standard
|
|
Change
|
||||||
GAAP financial measures
|
|
|
|
|
|
||||||
Branded postpaid service revenues (in millions)
|
$
|
20,887
|
|
|
$
|
20,862
|
|
|
$
|
(25
|
)
|
Branded prepaid service revenues (in millions)
|
9,608
|
|
|
9,598
|
|
|
(10
|
)
|
|||
Net income (in millions)
|
2,593
|
|
|
2,888
|
|
|
295
|
|
|||
Performance measures
|
|
|
|
|
|
||||||
Branded postpaid phone ARPU
|
$
|
46.45
|
|
|
$
|
46.40
|
|
|
$
|
(0.05
|
)
|
Branded postpaid ABPU
|
58.49
|
|
|
58.44
|
|
|
(0.05
|
)
|
|||
Branded prepaid ARPU
|
38.56
|
|
|
38.53
|
|
|
(0.03
|
)
|
|||
Non-GAAP financial measure
|
|
|
|
|
|
||||||
Adjusted EBITDA (in millions)
|
$
|
12,000
|
|
|
$
|
12,398
|
|
|
$
|
398
|
|
|
Year Ended December 31, 2018
|
|
Year Ended December 31, 2017
|
||||||||||||||||||||
(in millions, except per share amounts)
|
Gross
|
|
Reim-
bursement |
|
Net
|
|
Gross
|
|
Reim-
bursement |
|
Net
|
||||||||||||
Increase (decrease)
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Revenues
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Branded postpaid revenues
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
(37
|
)
|
|
$
|
—
|
|
|
$
|
(37
|
)
|
Of which, branded postpaid phone revenues
|
—
|
|
|
—
|
|
|
—
|
|
|
(35
|
)
|
|
—
|
|
|
(35
|
)
|
||||||
Branded prepaid revenues
|
—
|
|
|
—
|
|
|
—
|
|
|
(11
|
)
|
|
—
|
|
|
(11
|
)
|
||||||
Total service revenues
|
—
|
|
|
—
|
|
|
—
|
|
|
(48
|
)
|
|
—
|
|
|
(48
|
)
|
||||||
Equipment revenues
|
—
|
|
|
—
|
|
|
—
|
|
|
(8
|
)
|
|
—
|
|
|
(8
|
)
|
||||||
Other revenues
|
—
|
|
|
71
|
|
|
71
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Total revenues
|
—
|
|
|
71
|
|
|
71
|
|
|
(56
|
)
|
|
—
|
|
|
(56
|
)
|
||||||
Operating expenses
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Cost of services
|
59
|
|
|
(135
|
)
|
|
(76
|
)
|
|
198
|
|
|
(93
|
)
|
|
105
|
|
||||||
Cost of equipment sales
|
1
|
|
|
—
|
|
|
1
|
|
|
4
|
|
|
—
|
|
|
4
|
|
||||||
Selling, general and administrative
|
1
|
|
|
(13
|
)
|
|
(12
|
)
|
|
36
|
|
|
—
|
|
|
36
|
|
||||||
Of which, bad debt expense
|
—
|
|
|
—
|
|
|
—
|
|
|
20
|
|
|
—
|
|
|
20
|
|
||||||
Total operating expenses
|
61
|
|
|
(148
|
)
|
|
(87
|
)
|
|
238
|
|
|
(93
|
)
|
|
145
|
|
||||||
Operating income (loss)
|
(61
|
)
|
|
219
|
|
|
158
|
|
|
(294
|
)
|
|
93
|
|
|
(201
|
)
|
||||||
Net income (loss)
|
$
|
(41
|
)
|
|
$
|
140
|
|
|
$
|
99
|
|
|
$
|
(193
|
)
|
|
$
|
63
|
|
|
$
|
(130
|
)
|
Earnings per share
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Basic
|
$
|
(0.05
|
)
|
|
$
|
0.17
|
|
|
$
|
0.12
|
|
|
$
|
(0.23
|
)
|
|
$
|
0.07
|
|
|
$
|
(0.16
|
)
|
Diluted
|
(0.05
|
)
|
|
0.17
|
|
|
0.12
|
|
|
(0.22
|
)
|
|
0.07
|
|
|
(0.15
|
)
|
||||||
Operating metrics
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Bad debt expense and losses from sales of receivables as a percentage of total revenues
|
—
|
|
|
—
|
|
|
—
|
|
|
0.05
|
%
|
|
—
|
%
|
|
0.05
|
%
|
||||||
Branded postpaid phone ARPU
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
(0.09
|
)
|
|
$
|
—
|
|
|
$
|
(0.09
|
)
|
Branded postpaid ABPU
|
—
|
|
|
—
|
|
|
—
|
|
|
(0.08
|
)
|
|
—
|
|
|
(0.08
|
)
|
||||||
Branded prepaid ARPU
|
—
|
|
|
—
|
|
|
—
|
|
|
(0.05
|
)
|
|
—
|
|
|
(0.05
|
)
|
||||||
Non-GAAP financial measures
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Adjusted EBITDA
|
$
|
(61
|
)
|
|
$
|
219
|
|
|
$
|
158
|
|
|
$
|
(294
|
)
|
|
$
|
93
|
|
|
$
|
(201
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
•
|
Total revenues of
$43.3 billion
for the
year ended
December 31, 2018
increased
$2.7 billion
, or
7%
, primarily driven by growth in service and equipment revenues as further discussed below.
|
•
|
Service revenues of
$32.0 billion
for the
year ended
December 31, 2018
increased
$1.8 billion
, or
6%
, primarily due to growth in our average branded customer base driven by the continued growth in existing and Greenfield markets including the growing success of new customer segments and rate plans such as T-Mobile ONE Unlimited 55+, T-Mobile ONE Military, T-Mobile for Business and T-Mobile Essentials, along with lower churn, growth in connected devices and the success of our Metro by T-Mobile brand.
|
•
|
Equipment revenues of
$10.0 billion
for the
year ended
December 31, 2018
increased
$634 million
, or
7%
, primarily due to a higher average revenue per device sold and a positive impact from the new revenue standard of
$393 million
, partially offset by a decrease in the number of devices sold, excluding purchased leased devices, lower volumes of purchased leased devices at the end of the lease term and lower lease revenues.
|
•
|
Operating income
of
$5.3 billion
for the
year ended
December 31, 2018
increased
$421 million
, or
9%
, primarily due to higher Total revenues, partially offset by higher
Selling, general and administrative
expenses, Depreciation and amortization, Cost of equipment sales, Cost of services and lower Gains on disposal of spectrum licenses. Operating income for the
year ended
December 31, 2018
included the positive impacts from the adoption of the new revenue standard of
$398 million
and from insurance reimbursements related to hurricanes, net of costs incurred, of
$158 million
as well as the negative impact of Costs associated with the Transactions of
$196 million
. Operating income also included gains on disposal of spectrum licenses of
$235 million
and the negative impact from hurricanes of
$201 million
for the
year ended
December 31, 2017
.
|
•
|
Net income
of
$2.9 billion
for the
year ended
December 31, 2018
decreased
$1.6 billion
, or
36%
, primarily due to higher
Income tax (expense) benefit
, partially offset by higher
Operating income
and lower
Other income (expense), net
. Net income for the
year ended
December 31, 2018
included the positive impacts from the adoption of the new revenue standard of
$295 million
and from insurance reimbursements related to hurricanes, net of costs, of
$99 million
as well as the negative impact of Costs associated with the Transactions of
$180 million
. Net income also included the negative impact from hurricanes of
$130 million
and net, after-tax gains on disposal of spectrum licenses of
$174 million
for the
year ended
December 31, 2017
.
|
•
|
Adjusted EBITDA
of
$12.4 billion
for the
year ended
December 31, 2018
increased
$1.2 billion
, or
11%
, primarily due to higher
Operating income
driven by the factors described above. See “
Performance Measures
” for additional information.
|
•
|
Net cash provided by operating activities
of
$3.9 billion
for the
year ended
December 31, 2018
increased
$68 million
, or
2%
. See “
Liquidity and Capital Resources
” for additional information.
|
•
|
Free Cash Flow of
$3.6 billion
for the
year ended
December 31, 2018
increased
$827 million
, or
30%
. See “
Liquidity and Capital Resources
” for additional information.
|
|
Year Ended December 31,
|
|
2018 Versus 2017
|
|
2017 Versus 2016
|
||||||||||||||||||||
(in millions)
|
2018
|
|
2017
|
|
2016
|
|
$ Change
|
|
% Change
|
|
$ Change
|
|
% Change
|
||||||||||||
Revenues
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Branded postpaid revenues
|
$
|
20,862
|
|
|
$
|
19,448
|
|
|
$
|
18,138
|
|
|
$
|
1,414
|
|
|
7
|
%
|
|
$
|
1,310
|
|
|
7
|
%
|
Branded prepaid revenues
|
9,598
|
|
|
9,380
|
|
|
8,553
|
|
|
218
|
|
|
2
|
%
|
|
827
|
|
|
10
|
%
|
|||||
Wholesale revenues
|
1,183
|
|
|
1,102
|
|
|
903
|
|
|
81
|
|
|
7
|
%
|
|
199
|
|
|
22
|
%
|
|||||
Roaming and other service revenues
|
349
|
|
|
230
|
|
|
250
|
|
|
119
|
|
|
52
|
%
|
|
(20
|
)
|
|
(8
|
)%
|
|||||
Total service revenues
|
31,992
|
|
|
30,160
|
|
|
27,844
|
|
|
1,832
|
|
|
6
|
%
|
|
2,316
|
|
|
8
|
%
|
|||||
Equipment revenues
|
10,009
|
|
|
9,375
|
|
|
8,727
|
|
|
634
|
|
|
7
|
%
|
|
648
|
|
|
7
|
%
|
|||||
Other revenues
|
1,309
|
|
|
1,069
|
|
|
919
|
|
|
240
|
|
|
22
|
%
|
|
150
|
|
|
16
|
%
|
|||||
Total revenues
|
43,310
|
|
|
40,604
|
|
|
37,490
|
|
|
2,706
|
|
|
7
|
%
|
|
3,114
|
|
|
8
|
%
|
|||||
Operating expenses
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Cost of services, exclusive of depreciation and amortization shown separately below
|
6,307
|
|
|
6,100
|
|
|
5,731
|
|
|
207
|
|
|
3
|
%
|
|
369
|
|
|
6
|
%
|
|||||
Cost of equipment sales
|
12,047
|
|
|
11,608
|
|
|
10,819
|
|
|
439
|
|
|
4
|
%
|
|
789
|
|
|
7
|
%
|
|||||
Selling, general and administrative
|
13,161
|
|
|
12,259
|
|
|
11,378
|
|
|
902
|
|
|
7
|
%
|
|
881
|
|
|
8
|
%
|
|||||
Depreciation and amortization
|
6,486
|
|
|
5,984
|
|
|
6,243
|
|
|
502
|
|
|
8
|
%
|
|
(259
|
)
|
|
(4
|
)%
|
|||||
Cost of MetroPCS business combination
|
—
|
|
|
—
|
|
|
104
|
|
|
—
|
|
|
NM
|
|
|
(104
|
)
|
|
(100
|
)%
|
|||||
Gains on disposal of spectrum licenses
|
—
|
|
|
(235
|
)
|
|
(835
|
)
|
|
235
|
|
|
(100
|
)%
|
|
600
|
|
|
(72
|
)%
|
|||||
Total operating expense
|
38,001
|
|
|
35,716
|
|
|
33,440
|
|
|
2,285
|
|
|
6
|
%
|
|
2,276
|
|
|
7
|
%
|
|||||
Operating income
|
5,309
|
|
|
4,888
|
|
|
4,050
|
|
|
421
|
|
|
9
|
%
|
|
838
|
|
|
21
|
%
|
|||||
Other income (expense)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Interest expense
|
(835
|
)
|
|
(1,111
|
)
|
|
(1,418
|
)
|
|
276
|
|
|
(25
|
)%
|
|
307
|
|
|
(22
|
)%
|
|||||
Interest expense to affiliates
|
(522
|
)
|
|
(560
|
)
|
|
(312
|
)
|
|
38
|
|
|
(7
|
)%
|
|
(248
|
)
|
|
79
|
%
|
|||||
Interest income
|
19
|
|
|
17
|
|
|
13
|
|
|
2
|
|
|
12
|
%
|
|
4
|
|
|
31
|
%
|
|||||
Other income (expense), net
|
(54
|
)
|
|
(73
|
)
|
|
(6
|
)
|
|
19
|
|
|
(26
|
)%
|
|
(67
|
)
|
|
NM
|
|
|||||
Total other expense, net
|
(1,392
|
)
|
|
(1,727
|
)
|
|
(1,723
|
)
|
|
335
|
|
|
(19
|
)%
|
|
(4
|
)
|
|
—
|
%
|
|||||
Income before income taxes
|
3,917
|
|
|
3,161
|
|
|
2,327
|
|
|
756
|
|
|
24
|
%
|
|
834
|
|
|
36
|
%
|
|||||
Income tax (expense) benefit
|
(1,029
|
)
|
|
1,375
|
|
|
(867
|
)
|
|
(2,404
|
)
|
|
(175
|
)%
|
|
2,242
|
|
|
(259
|
)%
|
|||||
Net income
|
$
|
2,888
|
|
|
$
|
4,536
|
|
|
$
|
1,460
|
|
|
$
|
(1,648
|
)
|
|
(36
|
)%
|
|
$
|
3,076
|
|
|
211
|
%
|
Statement of Cash Flows Data
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Net cash provided by operating activities
|
$
|
3,899
|
|
|
$
|
3,831
|
|
|
$
|
2,779
|
|
|
$
|
68
|
|
|
2
|
%
|
|
$
|
1,052
|
|
|
38
|
%
|
Net cash used in investing activities
|
(579
|
)
|
|
(6,745
|
)
|
|
(2,324
|
)
|
|
6,166
|
|
|
(91
|
)%
|
|
(4,421
|
)
|
|
190
|
%
|
|||||
Net cash (used in) provided by financing activities
|
(3,336
|
)
|
|
(1,367
|
)
|
|
463
|
|
|
(1,969
|
)
|
|
144
|
%
|
|
(1,830
|
)
|
|
(395
|
)%
|
|||||
Non-GAAP Financial Measures
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Adjusted EBITDA
|
$
|
12,398
|
|
|
$
|
11,213
|
|
|
$
|
10,639
|
|
|
$
|
1,185
|
|
|
11
|
%
|
|
$
|
574
|
|
|
5
|
%
|
Free Cash Flow
|
3,552
|
|
|
2,725
|
|
|
1,433
|
|
|
827
|
|
|
30
|
%
|
|
1,292
|
|
|
90
|
%
|
•
|
Higher average branded postpaid phone customers, primarily from growth in our customer base driven by the continued growth in existing and Greenfield markets including the growing success of new customer segments and rate plans such as T-Mobile ONE Unlimited 55+, T-Mobile ONE Military, T-Mobile for Business and T-Mobile Essentials, along with lower churn; and
|
•
|
Higher average branded postpaid other customers; partially offset by
|
•
|
Lower branded postpaid phone Average Revenue Per User (“ARPU”). See “Branded Postpaid Phone ARPU” in the “
Performance Measures
” section of this MD&A; and
|
•
|
The negative impact of the new revenue standard of
$25 million
, primarily due to the impact of certain promotions previously recognized as a reduction in equipment revenues now recognized as a reduction in branded postpaid revenues, partially offset by certain equipment revenues reclassified to branded postpaid revenues.
|
•
|
Higher average branded prepaid customers driven by the success of our Metro by T-Mobile brand; partially offset by
|
•
|
Lower branded prepaid ARPU. See “Branded Prepaid APRU” in the “
Performance Measures
” section of this MD&A; and
|
•
|
The negative impact of the new revenue standard of
$10 million
, primarily due to the impact of certain promotions previously recognized as a reduction in equipment revenues now recognized as a reduction in branded prepaid revenues.
|
•
|
An increase of
$1.1 billion
in device sales revenues, excluding purchased leased devices, primarily due to:
|
•
|
Higher average revenue per device sold due to an increase in the high-end device mix; and
|
•
|
A positive impact from the new revenue standard of
$393 million
primarily related to:
|
▪
|
Commission costs of
$438 million
previously recorded as a reduction in Equipment revenues now recorded as Selling, general and administrative expenses and certain promotions previously recorded as a reduction in Equipment revenues now recorded as a reduction in Service revenues; partially offset by
|
▪
|
Certain promotional bill credits now capitalized as contract assets and certain Equipment revenues now recognized as Service revenues; partially offset by
|
•
|
A
6%
decrease in the number of devices sold, excluding purchased leased devices; partially offset by
|
•
|
A decrease of
$310 million
from lower volumes of purchased leased devices at the end of the lease term; and
|
•
|
A decrease of
$185 million
in lease revenues from JUMP! On Demand customers preferring affordable device options on leasing programs with lower monthly lease payments and shifting focus to our EIP financing option for high-end devices.
|
•
|
Cost of services
primarily includes costs directly attributable to providing wireless service through the operation of our network, including direct switch and cell site costs, such as rent, network access and transport costs, utilities, maintenance, associated labor costs, long distance costs, regulatory program costs, roaming fees paid to other carriers and data content costs. In addition, certain costs for customer appreciation programs are included in Cost of services.
|
•
|
Cost of equipment sales
primarily includes costs of devices and accessories sold to customers and dealers, device costs to fulfill insurance and warranty claims, costs related to returned and purchased leased devices, write-downs of inventory related to shrinkage and obsolescence, and shipping and handling costs.
|
•
|
Selling, general and administrative
primarily includes costs not directly attributable to providing wireless service for the operation of sales, customer care and corporate activities. These include commissions paid to dealers and retail employees for activations and upgrades, labor and facilities costs associated with retail sales force and administrative space, marketing and promotional costs, customer support and billing, bad debt expense, losses from sales of receivables and back office administrative support activities.
|
•
|
Higher lease, employee-related and repair and maintenance expenses associated with network expansion; and
|
•
|
The impact from the new revenue standard of
$74 million
primarily related to certain contract fulfillment costs reclassified to Cost of services from
Selling, general and administrative
expenses; partially offset by
|
•
|
Lower regulatory program costs; and
|
•
|
The positive impact from insurance reimbursements related to hurricanes, net of costs, of
$76 million
in the
year ended
December 31, 2018
, compared to costs incurred related to hurricanes, net of insurance recoveries, of
$105 million
for the
year ended
December 31, 2017
.
|
•
|
An increase of
$947 million
in device cost of equipment sales, excluding purchased leased devices, primarily due to:
|
•
|
A higher average cost per device sold, primarily due to an increase in the high-end device mix; partially offset by
|
•
|
A
6%
decrease in the number of devices sold, excluding purchased lease devices. This increase was partially offset by
|
•
|
A decrease of
$342 million
in leased device cost of equipment sales, primarily from lower volumes of purchased leased devices at the end of the lease term; and
|
•
|
A decrease of
$178 million
primarily due to lower inventory adjustments and lower warranty program costs.
|
•
|
Higher employee-related costs and costs related to managed services;
|
•
|
Higher commissions driven by compensation structure and channel mix changes; and
|
•
|
Costs associated with the Transactions of
$196 million
; partially offset by
|
•
|
The positive impact from the new revenue standard of
$96 million
, primarily due to:
|
•
|
Capitalized commission costs in excess of the related amortization of
$495 million
; and
|
•
|
Certain contract fulfillment costs reclassified to Cost of services from
Selling, general and administrative
expenses partially offset by
|
•
|
Commission costs of
$438 million
previously recorded as a reduction in Equipment revenues now recognized in Selling, general and administrative expense;
|
•
|
Lower bad debt expense and losses from sales of receivables reflecting our ongoing focus on managing customer quality;
|
•
|
Lower promotional and advertising costs;
|
•
|
Lower handset repair services costs due to lower demand for repaired phones for the fulfillment of warranty and insurance claims following the introduction of the AppleCare+ Program in the third quarter of 2017; and
|
•
|
The positive impact from insurance reimbursements related to hurricanes, net of costs, of
$12 million
in the
year ended
December 31, 2018
, compared to costs incurred related to hurricanes of
$36 million
for the
year ended
December 31, 2017
.
|
•
|
The continued build-out of our 4G LTE network and deployment of low band spectrum and 5G compatible radios; and
|
•
|
The implementation of the first component of our new billing system; partially offset by
|
•
|
Lower depreciation expense related to our JUMP! On Demand program resulting from an increase in the affordable device mix. Under our JUMP! On Demand program, the cost of a leased wireless device is depreciated to its estimated residual value over the period expected to provide utility to us.
|
•
|
The net positive impacts from the new revenue standard of
$398 million
; and
|
•
|
The positive impact from insurance reimbursements related to hurricanes, net of costs, of
$158 million
, compared to a negative impact of
$201 million
in the same period in 2017; partially offset by
|
•
|
Gains on disposal of spectrum licenses of
$235 million
in 2017. There were
no
gains on disposal of spectrum licenses in 2018; and
|
•
|
Costs associated with the Transactions of
$196 million
.
|
•
|
Redemption in April 2017 of aggregate principal amount of
$6.8 billion
of Senior Notes, with various interest rates and maturity dates;
|
•
|
Redemption in January 2018 of
$1.0 billion
of
6.125% Senior Notes due 2022
;
|
•
|
Redemption in April 2018 of aggregate principal amount of
$2.4 billion
of Senior Notes due 2023, with various interest rates and maturity dates; and
|
•
|
Increase in capitalized interest costs of
$100 million
primarily due to the build out of our network to utilize our 600 MHz spectrum licenses in the
year ended
December 31, 2018
, compared to the
year ended
December 31, 2017
;
|
•
|
Issuance in March 2017 of aggregate principal amount of
$1.5 billion
of Senior Notes, with various interest rates and maturity dates;
|
•
|
Issuance in January 2018 of
$1.0 billion
of public 4.500% Senior Notes due 2026; and
|
•
|
Issuance in January 2018 of
$1.5 billion
of public 4.750% Senior Notes due 2028.
|
•
|
A decrease from lower interest rates achieved through refinancing in April 2017 of a total of
$2.5 billion
of Senior Reset Notes;
|
•
|
A decrease from lower interest rates achieved through refinancing in April 2018 of a total of
$2.5 billion
of Senior Reset Notes; and
|
•
|
Increase in capitalized interest costs of
$126 million
primarily due to build out of our network to utilize our 600 MHz spectrum licenses in the
year ended
December 31, 2018
, compared to the
year ended
December 31, 2017
; partially offset by
|
•
|
Issuance in January 2017 of
$4.0 billion
of Incremental Secured Term Loan facility, which refinanced
$1.98 billion
of outstanding senior secured term loans;
|
•
|
Issuance in May 2017 of aggregate principal amount of
$4.0 billion
of Senior Notes, with various interest rates and maturity dates;
|
•
|
Issuance in April 2017 of aggregate principal amount of
$3.0 billion
of Senior Notes, with various interest rates and maturity dates; and
|
•
|
Issuance in September 2017 of aggregate principal amount of
$500 million
of
5.375%
Senior Notes due
2027
.
|
•
|
A
$30 million
gain on sale of certain investments;
|
•
|
A
$25 million
bargain purchase gain as part of our purchase price allocation of the IWS acquisition; and
|
•
|
A
$15 million
gain on our previously held equity interest in IWS; partially offset by
|
•
|
A
$36 million
increase in losses on early redemption of debt, including:
|
◦
|
An
$86 million
loss on early redemption of
$2.5 billion
in DT Senior Reset Notes in April 2018; and
|
◦
|
A
$32 million
loss on early redemption of
$1.0 billion
of
6.125%
Senior Notes due
2022
in January 2018; partially offset by
|
◦
|
A
$73 million
net loss on early redemption of aggregate principal amount of $8.25 billion in Senior Notes, with various interest rates and maturity dates, during the
year ended
December 31, 2017
; and
|
◦
|
A
$13 million
loss on refinancing of
$1.98 billion
of outstanding senior secured term loans in January 2017.
|
•
|
The impact of the TCJA, which resulted in a net tax benefit of
$2.2 billion
in 2017, substantially due to a re-measurement of deferred tax assets and liabilities; and
|
•
|
Higher income before taxes in 2018.
|
•
|
The impact of the TCJA as discussed above;
|
•
|
Costs associated with the Transactions of
$180 million
; and
|
•
|
Gains on disposal of spectrum licenses of
$174 million
in 2017. There were
no
gains on disposal of spectrum licenses in 2018; partially offset by
|
•
|
The net positive impact from the new revenue standard of
$295 million
; and
|
•
|
Insurance reimbursements related to the hurricanes, net of costs, of
$99 million
, compared to costs of
$130 million
in the same period in 2017.
|
|
December 31,
2018 |
|
December 31,
2017 |
|
Change
|
|||||||||
(in millions)
|
$
|
|
%
|
|||||||||||
Other current assets
|
$
|
645
|
|
|
$
|
628
|
|
|
$
|
17
|
|
|
3
|
%
|
Property and equipment, net
|
297
|
|
|
306
|
|
|
(9
|
)
|
|
(3
|
)%
|
|||
Goodwill
|
218
|
|
|
—
|
|
|
218
|
|
|
NM
|
|
|||
Tower obligations
|
2,173
|
|
|
2,198
|
|
|
(25
|
)
|
|
(1
|
)%
|
|||
Total stockholders' deficit
|
(1,142
|
)
|
|
(1,454
|
)
|
|
312
|
|
|
(21
|
)%
|
|
Year Ended December 31,
|
|
Change
|
|||||||||||
(in millions)
|
2018
|
|
2017
|
$
|
|
%
|
||||||||
Service revenues
|
$
|
2,339
|
|
|
$
|
2,113
|
|
|
$
|
226
|
|
|
11
|
%
|
Cost of equipment sales
|
1,011
|
|
|
1,003
|
|
|
8
|
|
|
1
|
%
|
|||
Selling, general and administrative
|
985
|
|
|
856
|
|
|
129
|
|
|
15
|
%
|
|||
Total comprehensive income
|
193
|
|
|
28
|
|
|
165
|
|
|
589
|
%
|
•
|
Higher
Service revenues
primarily due to an increase in activity of the non-guarantor subsidiary that provides device insurance, primarily driven by growth in our customer base and higher average revenue related to the new device protection product launched at the end of August 2018; partially offset by
|
•
|
Higher
Selling, general and administrative
expenses primarily due to operating costs from the non-guarantor Layer3 TV subsidiary acquired in the first quarter of 2018, an increase in customer notification expenses related to the new insurance product launched at the end of August 2018, and an increase in program expenses related to Apple Care Service Fees, partially offset by lower valuation losses in the non-guarantor subsidiary involved in the EIP sale arrangement; and
|
•
|
Higher
Cost of equipment sales
primarily due to an increase in higher cost devices used for device insurance claims fulfillment, partially offset by an increase in device liquidations and a decrease in device non-return fees charged to customers.
|
|
December 31,
2018 |
|
December 31,
2017 |
|
December 31,
2016 |
|
2018 Versus 2017
|
|
2017 Versus 2016
|
|||||||||||
(in thousands)
|
|
# Change
|
|
% Change
|
|
# Change
|
|
% Change
|
||||||||||||
Customers, end of period
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Branded postpaid phone customers
(1)(2)
|
37,224
|
|
|
34,114
|
|
|
31,297
|
|
|
3,110
|
|
|
9
|
%
|
|
2,817
|
|
|
9
|
%
|
Branded postpaid other customers
(2)
|
5,295
|
|
|
3,933
|
|
|
3,130
|
|
|
1,362
|
|
|
35
|
%
|
|
803
|
|
|
26
|
%
|
Total branded postpaid customers
|
42,519
|
|
|
38,047
|
|
|
34,427
|
|
|
4,472
|
|
|
12
|
%
|
|
3,620
|
|
|
11
|
%
|
Branded prepaid customers
(1)
|
21,137
|
|
|
20,668
|
|
|
19,813
|
|
|
469
|
|
|
2
|
%
|
|
855
|
|
|
4
|
%
|
Total branded customers
|
63,656
|
|
|
58,715
|
|
|
54,240
|
|
|
4,941
|
|
|
8
|
%
|
|
4,475
|
|
|
8
|
%
|
Wholesale customers
(3)
|
15,995
|
|
|
13,870
|
|
|
17,215
|
|
|
2,125
|
|
|
15
|
%
|
|
(3,345
|
)
|
|
(19
|
)%
|
Total customers, end of period
|
79,651
|
|
|
72,585
|
|
|
71,455
|
|
|
7,066
|
|
|
10
|
%
|
|
1,130
|
|
|
2
|
%
|
Adjustments to branded postpaid phone customers
(4)
|
—
|
|
|
—
|
|
|
(1,365
|
)
|
|
—
|
|
|
—
|
%
|
|
1,365
|
|
|
(100
|
)%
|
Adjustments to branded prepaid customers
(4)
|
—
|
|
|
—
|
|
|
(326
|
)
|
|
—
|
|
|
—
|
%
|
|
326
|
|
|
(100
|
)%
|
Adjustments to wholesale customers
(4)
|
—
|
|
|
—
|
|
|
1,691
|
|
|
—
|
|
|
—
|
%
|
|
(1,691
|
)
|
|
(100
|
)%
|
(1)
|
As a result of the acquisition of IWS, we included an adjustment of
13,000
branded postpaid phone and
4,000
branded prepaid IWS customers in our reported subscriber base as of January 1, 2018. Additionally, as a result of the acquisition of Layer3 TV, we included an adjustment of
5,000
branded prepaid customers in our reported subscriber base as of January 22, 2018.
|
(2)
|
During 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.
|
(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
4,528,000
reported wholesale customers in 2017.
|
(4)
|
As a result of the MVNO transaction, we included an adjustment of
1,365,000
branded postpaid phone customers and
326,000
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.
|
•
|
Higher branded postpaid phone customers driven by the growing success of new customer segments and rate plans such as T-Mobile ONE Unlimited 55+, T-Mobile ONE Military, T-Mobile for Business and T-Mobile Essentials and continued growth in existing and Greenfield markets, along with lower churn, partially offset by competitive activity;
|
•
|
Higher branded postpaid other customers primarily due to higher gross customer additions from wearables; and
|
•
|
Higher branded prepaid customers driven by the continued success of our Metro by T-Mobile brand due to promotional activities and rate plan offers.
|
|
Year Ended December 31,
|
|
2018 Versus 2017
|
|
2017 Versus 2016
|
|||||||||||||||
(in thousands)
|
2018
|
|
2017
|
|
2016
|
|
# Change
|
|
% Change
|
|
# Change
|
|
% Change
|
|||||||
Net customer additions
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Branded postpaid phone customers
(1) (2)
|
3,097
|
|
|
2,817
|
|
|
3,307
|
|
|
280
|
|
|
10
|
%
|
|
(490
|
)
|
|
(15
|
)%
|
Branded postpaid other customers
(2)
|
1,362
|
|
|
803
|
|
|
790
|
|
|
559
|
|
|
70
|
%
|
|
13
|
|
|
2
|
%
|
Total branded postpaid customers
|
4,459
|
|
|
3,620
|
|
|
4,097
|
|
|
839
|
|
|
23
|
%
|
|
(477
|
)
|
|
(12
|
)%
|
Branded prepaid customers
(1)
|
460
|
|
|
855
|
|
|
2,508
|
|
|
(395
|
)
|
|
(46
|
)%
|
|
(1,653
|
)
|
|
(66
|
)%
|
Total branded customers
|
4,919
|
|
|
4,475
|
|
|
6,605
|
|
|
444
|
|
|
10
|
%
|
|
(2,130
|
)
|
|
(32
|
)%
|
Wholesale customers
(3)
|
2,125
|
|
|
1,183
|
|
|
1,568
|
|
|
942
|
|
|
80
|
%
|
|
(385
|
)
|
|
(25
|
)%
|
Total net customer additions
|
7,044
|
|
|
5,658
|
|
|
8,173
|
|
|
1,386
|
|
|
24
|
%
|
|
(2,515
|
)
|
|
(31
|
)%
|
(1)
|
As a result of the acquisition of IWS and Layer3 TV, customer activity post acquisition was included in our net customer additions beginning in the first quarter of 2018.
|
(2)
|
During 2017, we retitled our “Branded postpaid mobile broadband customers” category to “Branded postpaid other customers” and included DIGITS 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.
|
(3)
|
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.
|
•
|
Higher branded postpaid other net customer additions primarily due to higher gross customer additions from wearables and lower churn, partially offset by lower gross customer additions from other connected devices; and
|
•
|
Higher branded postpaid phone net customer additions primarily due to lower churn and continued growth in existing and Greenfield markets including the growing success of new customer segments and rate plans such as T-Mobile ONE Unlimited 55+, T-Mobile ONE Military, T-Mobile for Business and T-Mobile Essentials, partially offset by the impact from more aggressive service promotions and the launch of Un-carrier Next - All Unlimited with taxes and fees in the first quarter of 2017. These increases were partially offset by
|
•
|
Lower branded prepaid net customer additions primarily due to increased competitive activity, partially offset by lower migrations to branded postpaid plans.
|
|
December 31,
2018 |
|
December 31,
2017 |
|
December 31,
2016 |
|
2018 Versus 2017
|
|
2017 Versus 2016
|
|||||||||||
|
# Change
|
|
% Change
|
|
# Change
|
|
% Change
|
|||||||||||||
Branded postpaid customers per account
|
3.03
|
|
|
2.93
|
|
|
2.86
|
|
|
0.10
|
|
|
3
|
%
|
|
0.07
|
|
|
2
|
%
|
|
Year Ended December 31,
|
|
Bps Change 2018 Versus 2017
|
|
Bps Change 2017 Versus 2016
|
|||||||
2018
|
|
2017
|
|
2016
|
|
|
||||||
Branded postpaid phone churn
|
1.01
|
%
|
|
1.18
|
%
|
|
1.30
|
%
|
|
-17 bps
|
|
-12 bps
|
Branded prepaid churn
|
3.96
|
%
|
|
4.04
|
%
|
|
3.88
|
%
|
|
-8 bps
|
|
16 bps
|
(in millions, except average number of customers, ARPU and ABPU)
|
Year Ended December 31,
|
|
2018 Versus 2017
|
|
2017 Versus 2016
|
||||||||||||||||||||
2018
|
|
2017
|
|
2016
|
$ Change
|
|
% Change
|
$ Change
|
|
% Change
|
|||||||||||||||
Calculation of Branded Postpaid Phone ARPU
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Branded postpaid service revenues
|
$
|
20,862
|
|
|
$
|
19,448
|
|
|
$
|
18,138
|
|
|
$
|
1,414
|
|
|
7
|
%
|
|
$
|
1,310
|
|
|
7
|
%
|
Less: Branded postpaid other revenues
|
(1,117
|
)
|
|
(1,077
|
)
|
|
(773
|
)
|
|
(40
|
)
|
|
4
|
%
|
|
(304
|
)
|
|
39
|
%
|
|||||
Branded postpaid phone service revenues
|
$
|
19,745
|
|
|
$
|
18,371
|
|
|
$
|
17,365
|
|
|
$
|
1,374
|
|
|
7
|
%
|
|
$
|
1,006
|
|
|
6
|
%
|
Divided by: Average number of branded postpaid phone customers (in thousands) and number of months in period
|
35,458
|
|
|
32,596
|
|
|
30,484
|
|
|
2,862
|
|
|
9
|
%
|
|
2,112
|
|
|
7
|
%
|
|||||
Branded postpaid phone ARPU
|
$
|
46.40
|
|
|
$
|
46.97
|
|
|
$
|
47.47
|
|
|
$
|
(0.57
|
)
|
|
(1
|
)%
|
|
$
|
(0.50
|
)
|
|
(1
|
)%
|
Calculation of Branded Postpaid ABPU
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Branded postpaid service revenues
|
$
|
20,862
|
|
|
$
|
19,448
|
|
|
$
|
18,138
|
|
|
$
|
1,414
|
|
|
7
|
%
|
|
$
|
1,310
|
|
|
7
|
%
|
EIP billings
|
6,548
|
|
|
5,866
|
|
|
5,432
|
|
|
682
|
|
|
12
|
%
|
|
434
|
|
|
8
|
%
|
|||||
Lease revenues
|
692
|
|
|
877
|
|
|
1,416
|
|
|
(185
|
)
|
|
(21
|
)%
|
|
(539
|
)
|
|
(38
|
)%
|
|||||
Total billings for branded postpaid customers
|
$
|
28,102
|
|
|
$
|
26,191
|
|
|
$
|
24,986
|
|
|
$
|
1,911
|
|
|
7
|
%
|
|
$
|
1,205
|
|
|
5
|
%
|
Divided by: Average number of branded postpaid customers (in thousands) and number of months in period
|
40,075
|
|
|
36,079
|
|
|
33,184
|
|
|
3,996
|
|
|
11
|
%
|
|
2,895
|
|
|
9
|
%
|
|||||
Branded postpaid ABPU
|
$
|
58.44
|
|
|
$
|
60.49
|
|
|
$
|
62.75
|
|
|
$
|
(2.05
|
)
|
|
(3
|
)%
|
|
$
|
(2.26
|
)
|
|
(4
|
)%
|
Calculation of Branded Prepaid ARPU
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Branded prepaid service revenues
|
$
|
9,598
|
|
|
$
|
9,380
|
|
|
$
|
8,553
|
|
|
$
|
218
|
|
|
2
|
%
|
|
$
|
827
|
|
|
10
|
%
|
Divided by: Average number of branded prepaid customers (in thousands) and number of months in period
|
20,761
|
|
|
20,204
|
|
|
18,797
|
|
|
557
|
|
|
3
|
%
|
|
1,407
|
|
|
7
|
%
|
|||||
Branded prepaid ARPU
|
$
|
38.53
|
|
|
$
|
38.69
|
|
|
$
|
37.92
|
|
|
$
|
(0.16
|
)
|
|
—
|
%
|
|
$
|
0.77
|
|
|
2
|
%
|
•
|
The growing success of new customer segments and rate plans such as T-Mobile ONE Unlimited 55+, T-Mobile ONE Military, T-Mobile for Business and T-Mobile Essentials;
|
•
|
The ongoing growth in our Netflix offering, which totaled $0.35 for 2018 and decreased branded postpaid phone ARPU by $0.32 compared to full-year 2017;
|
•
|
A reduction in certain non-recurring charges;
|
•
|
The negative impact of the new revenue standard of
$0.05
; partially offset by
|
•
|
A net reduction in promotional activities.
|
•
|
Lower branded postpaid phone ARPU;
|
•
|
Lower lease revenues; and
|
•
|
Growth in the branded postpaid other customer base with a lower ARPU than branded postpaid phone.
|
|
Year Ended December 31,
|
|
2018 Versus 2017
|
|
2017 Versus 2016
|
||||||||||||||||||||
(in millions)
|
2018
|
|
2017
|
|
2016
|
$ Change
|
|
% Change
|
$ Change
|
|
% Change
|
||||||||||||||
Net income
|
$
|
2,888
|
|
|
$
|
4,536
|
|
|
$
|
1,460
|
|
|
$
|
(1,648
|
)
|
|
(36
|
)%
|
|
$
|
3,076
|
|
|
211
|
%
|
Adjustments:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Interest expense
|
835
|
|
|
1,111
|
|
|
1,418
|
|
|
(276
|
)
|
|
(25
|
)%
|
|
(307
|
)
|
|
(22
|
)%
|
|||||
Interest expense to affiliates
|
522
|
|
|
560
|
|
|
312
|
|
|
(38
|
)
|
|
(7
|
)%
|
|
248
|
|
|
79
|
%
|
|||||
Interest income
|
(19
|
)
|
|
(17
|
)
|
|
(13
|
)
|
|
(2
|
)
|
|
12
|
%
|
|
(4
|
)
|
|
31
|
%
|
|||||
Other (income) expense, net
|
54
|
|
|
73
|
|
|
6
|
|
|
(19
|
)
|
|
(26
|
)%
|
|
67
|
|
|
1,117
|
%
|
|||||
Income tax expense (benefit)
|
1,029
|
|
|
(1,375
|
)
|
|
867
|
|
|
2,404
|
|
|
(175
|
)%
|
|
(2,242
|
)
|
|
(259
|
)%
|
|||||
Operating income
|
5,309
|
|
|
4,888
|
|
|
4,050
|
|
|
421
|
|
|
9
|
%
|
|
838
|
|
|
21
|
%
|
|||||
Depreciation and amortization
|
6,486
|
|
|
5,984
|
|
|
6,243
|
|
|
502
|
|
|
8
|
%
|
|
(259
|
)
|
|
(4
|
)%
|
|||||
Cost of MetroPCS business combination
|
—
|
|
|
—
|
|
|
104
|
|
|
—
|
|
|
NM
|
|
|
(104
|
)
|
|
(100
|
)%
|
|||||
Stock-based compensation
(1)
|
389
|
|
|
307
|
|
|
235
|
|
|
82
|
|
|
27
|
%
|
|
72
|
|
|
31
|
%
|
|||||
Cost associated with the Transactions
|
196
|
|
|
—
|
|
|
—
|
|
|
196
|
|
|
NM
|
|
|
—
|
|
|
NM
|
|
|||||
Other, net
(2)
|
18
|
|
|
34
|
|
|
7
|
|
|
(16
|
)
|
|
(47
|
)%
|
|
27
|
|
|
386
|
%
|
|||||
Adjusted EBITDA
|
$
|
12,398
|
|
|
$
|
11,213
|
|
|
$
|
10,639
|
|
|
$
|
1,185
|
|
|
11
|
%
|
|
$
|
574
|
|
|
5
|
%
|
Net income margin (Net income divided by service revenues)
|
9
|
%
|
|
15
|
%
|
|
5
|
%
|
|
|
|
|
-600 bps
|
|
|
|
|
1000 bps
|
|
||||||
Adjusted EBITDA margin (Adjusted EBITDA divided by service revenues)
|
39
|
%
|
|
37
|
%
|
|
38
|
%
|
|
|
|
|
200 bps
|
|
|
|
|
-100 bps
|
|
(1)
|
Stock-based compensation includes payroll tax impacts and may not agree to stock-based compensation expense in the
Consolidated Financial Statements
.
|
(2)
|
Other, net may not agree to the
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 or are not reflective of T-Mobile’s ongoing operating performance, and are therefore excluded in Adjusted EBITDA.
|
•
|
Higher service revenues, as further discussed above;
|
•
|
The positive impact from the new revenue standard of
$398 million
;
|
•
|
Higher other revenues, as further discussed above;
|
•
|
Lower losses on equipment;
|
•
|
The positive impact of the reimbursements from our insurance carriers, net of costs incurred related to hurricanes, for the year ended
December 31, 2018
of
$158 million
, compared to costs incurred related to hurricanes, net of insurance recoveries, of
$201 million
in the year ended
December 31, 2017
; partially offset by
|
•
|
Higher selling, general and administrative expenses;
|
•
|
Lower gains on disposal of spectrum licenses of
$235 million
; and
|
•
|
Higher cost of services.
|
•
|
The change in Net income and the net non-cash adjustments to Net income were primarily from the impacts of the TCJA in 2017 and the absence of Gains on disposal of spectrum licenses in 2018.
|
•
|
The higher net use in working capital was primarily from a paydown of Accounts payable and changes in Accounts receivable, partially offset by changes in Inventories and EIP receivables.
|
•
|
$5.5 billion
in Purchases of property and equipment, including capitalized interest, primarily driven by growth in network build as we continued deployment of low band spectrum, including the continued deployment of 600 MHz, and started laying the groundwork for 5G; and
|
•
|
$338 million
of cash consideration paid, net of cash acquired, for the acquisitions of Layer3 TV and IWS; partially offset by
|
•
|
$5.4 billion
in Proceeds related to beneficial interest in securitization transactions.
|
•
|
$6.3 billion
for Repayments of our revolving credit facility;
|
•
|
$3.3 billion
for
Repayments of long-term debt
;
|
•
|
$1.1 billion
for Repurchases of common stock; and
|
•
|
$700 million
for Repayments of capital lease obligations; partially offset by
|
•
|
$6.3 billion
in Proceeds from borrowing on our revolving credit facility; and
|
•
|
$2.5 billion
in Proceeds from issuance of long-term debt.
|
|
Year Ended December 31,
|
|
2018 Versus 2017
|
|
2017 Versus 2016
|
||||||||||||||||||||
(in millions)
|
2018
|
|
2017
|
|
2016
|
|
$ Change
|
|
% Change
|
|
$ Change
|
|
% Change
|
||||||||||||
Net cash provided by operating activities
|
$
|
3,899
|
|
|
$
|
3,831
|
|
|
$
|
2,779
|
|
|
$
|
68
|
|
|
2
|
%
|
|
$
|
1,052
|
|
|
38
|
%
|
Cash purchases of property and equipment
|
(5,541
|
)
|
|
(5,237
|
)
|
|
(4,702
|
)
|
|
(304
|
)
|
|
6
|
%
|
|
(535
|
)
|
|
11
|
%
|
|||||
Proceeds related to beneficial interests in securitization transactions
|
5,406
|
|
|
4,319
|
|
|
3,356
|
|
|
1,087
|
|
|
25
|
%
|
|
963
|
|
|
29
|
%
|
|||||
Cash payments for debt prepayment or debt extinguishment costs
|
(212
|
)
|
|
(188
|
)
|
|
—
|
|
|
(24
|
)
|
|
13
|
%
|
|
(188
|
)
|
|
NM
|
|
|||||
Free Cash Flow
|
$
|
3,552
|
|
|
$
|
2,725
|
|
|
$
|
1,433
|
|
|
$
|
827
|
|
|
30
|
%
|
|
$
|
1,292
|
|
|
90
|
%
|
•
|
Higher proceeds related to our deferred purchase price from securitization transactions and net cash provided by operating activities; partially offset by
|
•
|
Higher Purchases of property and equipment, net of capitalized interest of
$362 million
and
$136 million
for the
years ended
December 31,
2018
and
2017
, respectively. The increase in cash purchases of property and equipment was primarily due to growth in network build as we continued deployment of low band spectrum, including the continued deployment of 600 MHz, and started laying the groundwork for 5G.
|
(in millions)
|
Less Than 1 Year
|
|
1 - 3 Years
|
|
4 - 5 Years
|
|
More Than 5 Years
|
|
Total
|
||||||||||
Long-term debt
(1)
|
$
|
—
|
|
|
$
|
2,000
|
|
|
$
|
5,400
|
|
|
$
|
18,200
|
|
|
$
|
25,600
|
|
Interest on long-term debt
|
1,366
|
|
|
2,679
|
|
|
2,273
|
|
|
1,950
|
|
|
8,268
|
|
|||||
Capital lease obligations, including interest and maintenance
|
909
|
|
|
1,020
|
|
|
168
|
|
|
106
|
|
|
2,203
|
|
|||||
Tower obligations
(2)
|
195
|
|
|
391
|
|
|
392
|
|
|
835
|
|
|
1,813
|
|
|||||
Operating leases
(3)
|
2,698
|
|
|
4,684
|
|
|
3,290
|
|
|
3,762
|
|
|
14,434
|
|
|||||
Purchase obligations
(4)
|
3,377
|
|
|
2,800
|
|
|
1,786
|
|
|
1,367
|
|
|
9,330
|
|
|||||
Network decommissioning
(5)
|
79
|
|
|
79
|
|
|
39
|
|
|
5
|
|
|
202
|
|
|||||
Total contractual obligations
|
$
|
8,624
|
|
|
$
|
13,653
|
|
|
$
|
13,348
|
|
|
$
|
26,225
|
|
|
$
|
61,850
|
|
(1)
|
Represents principal amounts of long-term debt to affiliates and third parties at maturity, excluding unamortized premium from purchase price allocation fair value adjustment, capital lease obligations and vendor financing arrangements. See
Note 8 – Debt
of the
Notes to the Consolidated Financial Statements
for further information.
|
(2)
|
Future minimum payments, including principal and interest payments and imputed lease rental income, related to the tower obligations. See
Note 9 – Tower Obligations
of the
Notes to the Consolidated Financial Statements
for further information.
|
(3)
|
Future minimum lease payments for all cell site leases presented above to include payments due for the initial non-cancelable lease term only as they represent the payments which we cannot avoid at our option and also corresponds to our lease term assessment for new leases.
|
(4)
|
The minimum commitment for certain obligations is based on termination penalties that could be paid to exit the contracts. Termination penalties are included in the above table as payments due as of the earliest we could exit the contract, typically in less than one year. For certain contracts that include fixed volume purchase commitments and fixed prices for various products, the purchase obligations are calculated using fixed volumes and contractually fixed prices for the products that are expected to be purchased. This table does not include open purchase orders as of
December 31, 2018
under normal business purposes. See
Note 15 – Commitments and Contingencies
of the
Notes to the Consolidated Financial Statements
for further information.
|
(5)
|
Represents future undiscounted cash flows related to decommissioned MetroPCS CDMA network and certain other redundant cell sites as of
December 31, 2018
.
|
•
|
Revenue for service contracts that we assess are not probable of collection is not recognized until the contract is completed and cash is received. Collectibility is re-assessed when there is a significant change in facts or circumstances. Our assessment of collectibility considers whether we may limit our exposure to credit risk through our right to stop transferring additional service in the event the customer is delinquent as well as certain contract terms such as down payments that reduce our exposure to credit risk. Customer credit behavior is inherently uncertain. See “Allowances,” below, for more discussion on how we assess credit risk.
|
•
|
Promotional EIP bill credits offered to a customer on an equipment sale that are paid over time and are contingent on the customer maintaining a service contract may result in an extended service contract based on whether a substantive penalty is deemed to exist. Determining whether contingent EIP bill credits result in a substantive termination penalty may require significant judgment.
|
•
|
The identification of distinct performance obligations within our service plans may require significant judgment.
|
•
|
Revenue is recorded net of costs paid to another party for performance obligations where we arrange for the other party to transfer goods or services to the customer (i.e., when we are acting as an agent). For example, performance obligations relating to services provided by third-party content providers where we neither controls a right to the content provider’s service nor controls the underlying service itself are presented net because we are acting as an agent. The determination of whether we control the underlying service or right to the service prior to our transfer to the customer requires, at times, significant judgment.
|
•
|
For transactions where we recognize a significant financing component, judgment is required to determine the discount rate. For EIP sales, the discount rate used to adjust the transaction price primarily reflects current market interest rates and the estimated credit risk of the customer. Customer credit behavior is inherently uncertain. See “Allowances”, below, for more discussion on how we assess credit risk.
|
•
|
Our products are generally sold with a right of return, which is accounted for as variable consideration when estimating the amount of revenue to recognize. Device return levels are estimated based on the expected value method as there are a large number of contracts with similar characteristics and the outcome of each contract is independent of the others. Historical return rate experience is a significant input to our expected value methodology.
|
•
|
Sales of equipment to indirect dealers who have been identified as our customer (referred to as the sell-in model) often include credits subsequently paid to the dealer as a reimbursement for any discount promotions offered to the end consumer. These credits (payments to a customer) are accounted for as variable consideration when estimating the amount of revenue to recognize from the sales of equipment to indirect dealers and are estimated based on historical experience and other factors, such as expected promotional activity.
|
•
|
The determination of the standalone selling price for contracts that involve more than one performance obligation may require significant judgment, such as when the selling price of a good or service is not readily observable.
|
•
|
For capitalized contract costs, determining the amortization period over which such costs are recognized as well as assessing the indicators of impairment may require significant judgment.
|
|
Carrying Amount
|
|
Fair Value
|
|
Fair Value Assuming
|
||||||||||
(in millions)
|
+150 Basis Point Shift
|
|
-50 Basis Point Shift
|
||||||||||||
LIBOR plus 1.50% Senior Secured Term Loan due 2022
|
$
|
2,000
|
|
|
$
|
1,991
|
|
|
$
|
1,933
|
|
|
$
|
2,011
|
|
LIBOR plus 1.75% Senior Secured Term Loan due 2024
|
2,000
|
|
|
1,985
|
|
|
1,913
|
|
|
2,010
|
|
|
Fair Value
|
|
Fair Value Assuming
|
||||||||
(in millions)
|
+200 Basis Point Shift
|
|
-100 Basis Point Shift
|
||||||||
Interest rate lock derivatives
|
$
|
(447
|
)
|
|
$
|
1,007
|
|
|
$
|
(1,303
|
)
|
(in millions, except share and per share amounts)
|
December 31,
2018 |
|
December 31,
2017 |
||||
Assets
|
|
|
|
||||
Current assets
|
|
|
|
||||
Cash and cash equivalents
|
$
|
1,203
|
|
|
$
|
1,219
|
|
Accounts receivable, net of allowances of $67 and $86
|
1,769
|
|
|
1,915
|
|
||
Equipment installment plan receivables, net
|
2,538
|
|
|
2,290
|
|
||
Accounts receivable from affiliates
|
11
|
|
|
22
|
|
||
Inventories
|
1,084
|
|
|
1,566
|
|
||
Other current assets
|
1,676
|
|
|
1,903
|
|
||
Total current assets
|
8,281
|
|
|
8,915
|
|
||
Property and equipment, net
|
23,359
|
|
|
22,196
|
|
||
Goodwill
|
1,901
|
|
|
1,683
|
|
||
Spectrum licenses
|
35,559
|
|
|
35,366
|
|
||
Other intangible assets, net
|
198
|
|
|
217
|
|
||
Equipment installment plan receivables due after one year, net
|
1,547
|
|
|
1,274
|
|
||
Other assets
|
1,623
|
|
|
912
|
|
||
Total assets
|
$
|
72,468
|
|
|
$
|
70,563
|
|
Liabilities and Stockholders' Equity
|
|
|
|
||||
Current liabilities
|
|
|
|
||||
Accounts payable and accrued liabilities
|
$
|
7,741
|
|
|
$
|
8,528
|
|
Payables to affiliates
|
200
|
|
|
182
|
|
||
Short-term debt
|
841
|
|
|
1,612
|
|
||
Deferred revenue
|
698
|
|
|
779
|
|
||
Other current liabilities
|
787
|
|
|
414
|
|
||
Total current liabilities
|
10,267
|
|
|
11,515
|
|
||
Long-term debt
|
12,124
|
|
|
12,121
|
|
||
Long-term debt to affiliates
|
14,582
|
|
|
14,586
|
|
||
Tower obligations
|
2,557
|
|
|
2,590
|
|
||
Deferred tax liabilities
|
4,472
|
|
|
3,537
|
|
||
Deferred rent expense
|
2,781
|
|
|
2,720
|
|
||
Other long-term liabilities
|
967
|
|
|
935
|
|
||
Total long-term liabilities
|
37,483
|
|
|
36,489
|
|
||
Commitments and contingencies (Note 15)
|
|
|
|
|
|
||
Stockholders' equity
|
|
|
|
||||
Common Stock, par value $0.00001 per share, 1,000,000,000 shares authorized; 851,675,119 and 860,861,998 shares issued, 850,180,317 and 859,406,651 shares outstanding
|
—
|
|
|
—
|
|
||
Additional paid-in capital
|
38,010
|
|
|
38,629
|
|
||
Treasury stock, at cost, 1,494,802 and 1,455,347 shares issued
|
(6
|
)
|
|
(4
|
)
|
||
Accumulated other comprehensive income
|
(332
|
)
|
|
8
|
|
||
Accumulated deficit
|
(12,954
|
)
|
|
(16,074
|
)
|
||
Total stockholders' equity
|
24,718
|
|
|
22,559
|
|
||
Total liabilities and stockholders' equity
|
$
|
72,468
|
|
|
$
|
70,563
|
|
|
Year Ended December 31,
|
||||||||||
(in millions, except share and per share amounts)
|
2018
|
|
2017
|
|
2016
|
||||||
Revenues
|
|
|
|
|
|
||||||
Branded postpaid revenues
|
$
|
20,862
|
|
|
$
|
19,448
|
|
|
$
|
18,138
|
|
Branded prepaid revenues
|
9,598
|
|
|
9,380
|
|
|
8,553
|
|
|||
Wholesale revenues
|
1,183
|
|
|
1,102
|
|
|
903
|
|
|||
Roaming and other service revenues
|
349
|
|
|
230
|
|
|
250
|
|
|||
Total service revenues
|
31,992
|
|
|
30,160
|
|
|
27,844
|
|
|||
Equipment revenues
|
10,009
|
|
|
9,375
|
|
|
8,727
|
|
|||
Other revenues
|
1,309
|
|
|
1,069
|
|
|
919
|
|
|||
Total revenues
|
43,310
|
|
|
40,604
|
|
|
37,490
|
|
|||
Operating expenses
|
|
|
|
|
|
||||||
Cost of services, exclusive of depreciation and amortization shown separately below
|
6,307
|
|
|
6,100
|
|
|
5,731
|
|
|||
Cost of equipment sales
|
12,047
|
|
|
11,608
|
|
|
10,819
|
|
|||
Selling, general and administrative
|
13,161
|
|
|
12,259
|
|
|
11,378
|
|
|||
Depreciation and amortization
|
6,486
|
|
|
5,984
|
|
|
6,243
|
|
|||
Cost of MetroPCS business combination
|
—
|
|
|
—
|
|
|
104
|
|
|||
Gains on disposal of spectrum licenses
|
—
|
|
|
(235
|
)
|
|
(835
|
)
|
|||
Total operating expense
|
38,001
|
|
|
35,716
|
|
|
33,440
|
|
|||
Operating income
|
5,309
|
|
|
4,888
|
|
|
4,050
|
|
|||
Other income (expense)
|
|
|
|
|
|
||||||
Interest expense
|
(835
|
)
|
|
(1,111
|
)
|
|
(1,418
|
)
|
|||
Interest expense to affiliates
|
(522
|
)
|
|
(560
|
)
|
|
(312
|
)
|
|||
Interest income
|
19
|
|
|
17
|
|
|
13
|
|
|||
Other income (expense), net
|
(54
|
)
|
|
(73
|
)
|
|
(6
|
)
|
|||
Total other expense, net
|
(1,392
|
)
|
|
(1,727
|
)
|
|
(1,723
|
)
|
|||
Income before income taxes
|
3,917
|
|
|
3,161
|
|
|
2,327
|
|
|||
Income tax (expense) benefit
|
(1,029
|
)
|
|
1,375
|
|
|
(867
|
)
|
|||
Net income
|
2,888
|
|
|
4,536
|
|
|
1,460
|
|
|||
Dividends on preferred stock
|
—
|
|
|
(55
|
)
|
|
(55
|
)
|
|||
Net income attributable to common stockholders
|
$
|
2,888
|
|
|
$
|
4,481
|
|
|
$
|
1,405
|
|
|
|
|
|
|
|
||||||
Net income
|
$
|
2,888
|
|
|
$
|
4,536
|
|
|
$
|
1,460
|
|
Other comprehensive (loss) income, net of tax
|
|
|
|
|
|
||||||
Unrealized gain on available-for-sale securities, net of tax effect of $0, $2 and $1
|
—
|
|
|
7
|
|
|
2
|
|
|||
Unrealized loss on cash flow hedges, net of tax effect of ($115), $0 and $0
|
(332
|
)
|
|
—
|
|
|
—
|
|
|||
Other comprehensive (loss) income
|
(332
|
)
|
|
7
|
|
|
2
|
|
|||
Total comprehensive income
|
$
|
2,556
|
|
|
$
|
4,543
|
|
|
$
|
1,462
|
|
Earnings per share
|
|
|
|
|
|
||||||
Basic
|
$
|
3.40
|
|
|
$
|
5.39
|
|
|
$
|
1.71
|
|
Diluted
|
3.36
|
|
|
5.20
|
|
|
1.69
|
|
|||
Weighted average shares outstanding
|
|
|
|
|
|
||||||
Basic
|
849,744,152
|
|
|
831,850,073
|
|
|
822,470,275
|
|
|||
Diluted
|
858,290,174
|
|
|
871,787,450
|
|
|
833,054,545
|
|
|
Year Ended December 31,
|
||||||||||
(in millions)
|
2018
|
|
2017
|
|
2016
|
||||||
Operating activities
|
|
|
|
|
|
||||||
Net income
|
$
|
2,888
|
|
|
$
|
4,536
|
|
|
$
|
1,460
|
|
Adjustments to reconcile net income to net cash provided by operating activities
|
|
|
|
|
|
||||||
Depreciation and amortization
|
6,486
|
|
|
5,984
|
|
|
6,243
|
|
|||
Stock-based compensation expense
|
424
|
|
|
306
|
|
|
235
|
|
|||
Deferred income tax expense (benefit)
|
980
|
|
|
(1,404
|
)
|
|
914
|
|
|||
Bad debt expense
|
297
|
|
|
388
|
|
|
477
|
|
|||
Losses from sales of receivables
|
157
|
|
|
299
|
|
|
228
|
|
|||
Deferred rent expense
|
26
|
|
|
76
|
|
|
121
|
|
|||
Losses on redemption of debt
|
122
|
|
|
86
|
|
|
—
|
|
|||
Gains on disposal of spectrum licenses
|
—
|
|
|
(235
|
)
|
|
(835
|
)
|
|||
Changes in operating assets and liabilities
|
|
|
|
|
|
||||||
Accounts receivable
|
(4,617
|
)
|
|
(3,931
|
)
|
|
(3,459
|
)
|
|||
Equipment installment plan receivables
|
(1,598
|
)
|
|
(1,812
|
)
|
|
(673
|
)
|
|||
Inventories
|
(201
|
)
|
|
(844
|
)
|
|
(802
|
)
|
|||
Other current and long-term assets
|
(181
|
)
|
|
(575
|
)
|
|
(133
|
)
|
|||
Accounts payable and accrued liabilities
|
(867
|
)
|
|
1,079
|
|
|
(1,201
|
)
|
|||
Other current and long-term liabilities
|
(69
|
)
|
|
(233
|
)
|
|
158
|
|
|||
Other, net
|
52
|
|
|
111
|
|
|
46
|
|
|||
Net cash provided by operating activities
|
3,899
|
|
|
3,831
|
|
|
2,779
|
|
|||
Investing activities
|
|
|
|
|
|
||||||
Purchases of property and equipment, including capitalized interest of $362, $136 and $142
|
(5,541
|
)
|
|
(5,237
|
)
|
|
(4,702
|
)
|
|||
Purchases of spectrum licenses and other intangible assets, including deposits
|
(127
|
)
|
|
(5,828
|
)
|
|
(3,968
|
)
|
|||
Proceeds related to beneficial interests in securitization transactions
|
5,406
|
|
|
4,319
|
|
|
3,356
|
|
|||
Acquisition of companies, net of cash acquired
|
(338
|
)
|
|
—
|
|
|
—
|
|
|||
Sales of short-term investments
|
—
|
|
|
—
|
|
|
2,998
|
|
|||
Other, net
|
21
|
|
|
1
|
|
|
(8
|
)
|
|||
Net cash used in investing activities
|
(579
|
)
|
|
(6,745
|
)
|
|
(2,324
|
)
|
|||
Financing activities
|
|
|
|
|
|
||||||
Proceeds from issuance of long-term debt
|
2,494
|
|
|
10,480
|
|
|
997
|
|
|||
Proceeds from borrowing on revolving credit facility
|
6,265
|
|
|
2,910
|
|
|
—
|
|
|||
Repayments of revolving credit facility
|
(6,265
|
)
|
|
(2,910
|
)
|
|
—
|
|
|||
Repayments of capital lease obligations
|
(700
|
)
|
|
(486
|
)
|
|
(205
|
)
|
|||
Repayments of short-term debt for purchases of inventory, property and equipment, net
|
(300
|
)
|
|
(300
|
)
|
|
(150
|
)
|
|||
Repayments of long-term debt
|
(3,349
|
)
|
|
(10,230
|
)
|
|
(20
|
)
|
|||
Repurchases of common stock
|
(1,071
|
)
|
|
(427
|
)
|
|
—
|
|
|||
Tax withholdings on share-based awards
|
(146
|
)
|
|
(166
|
)
|
|
(121
|
)
|
|||
Dividends on preferred stock
|
—
|
|
|
(55
|
)
|
|
(55
|
)
|
|||
Cash payments for debt prepayment or debt extinguishment costs
|
(212
|
)
|
|
(188
|
)
|
|
—
|
|
|||
Other, net
|
(52
|
)
|
|
5
|
|
|
17
|
|
|||
Net cash (used in) provided by financing activities
|
(3,336
|
)
|
|
(1,367
|
)
|
|
463
|
|
|||
Change in cash and cash equivalents
|
(16
|
)
|
|
(4,281
|
)
|
|
918
|
|
|||
Cash and cash equivalents
|
|
|
|
|
|
||||||
Beginning of period
|
1,219
|
|
|
5,500
|
|
|
4,582
|
|
|||
End of period
|
$
|
1,203
|
|
|
$
|
1,219
|
|
|
$
|
5,500
|
|
Supplemental disclosure of cash flow information
|
|
|
|
|
|
||||||
Interest payments, net of amounts capitalized, $0, $79 and $0 of which recorded as debt discount
|
$
|
1,525
|
|
|
$
|
2,028
|
|
|
$
|
1,681
|
|
Income tax payments
|
51
|
|
|
31
|
|
|
25
|
|
|||
Noncash beneficial interest obtained in exchange for securitized receivables
|
4,972
|
|
|
4,063
|
|
|
3,411
|
|
|||
Noncash investing and financing activities
|
|
|
|
|
|
||||||
Changes in accounts payable for purchases of property and equipment
|
$
|
65
|
|
|
$
|
313
|
|
|
$
|
285
|
|
Leased devices transferred from inventory to property and equipment
|
1,011
|
|
|
1,131
|
|
|
1,588
|
|
|||
Returned leased devices transferred from property and equipment to inventory
|
(326
|
)
|
|
(742
|
)
|
|
(602
|
)
|
|||
Issuance of short-term debt for financing of property and equipment
|
291
|
|
|
292
|
|
|
150
|
|
|||
Assets acquired under capital lease obligations
|
885
|
|
|
887
|
|
|
799
|
|
(in millions, except shares)
|
Preferred Stock Outstanding
|
|
Common Stock Outstanding
|
|
Treasury Shares at Cost
|
|
Par Value and Additional Paid-in Capital
|
|
Accumulated Other Comprehensive Income (Loss)
|
|
Accumulated Deficit
|
|
Total Stockholders' Equity
|
||||||||||||
Balance as of December 31, 2015
|
20,000,000
|
|
|
818,391,219
|
|
|
$
|
—
|
|
|
$
|
38,666
|
|
|
$
|
(1
|
)
|
|
$
|
(22,108
|
)
|
|
$
|
16,557
|
|
Net income
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,460
|
|
|
1,460
|
|
|||||
Other comprehensive income
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
2
|
|
|
—
|
|
|
2
|
|
|||||
Stock-based compensation
|
—
|
|
|
—
|
|
|
—
|
|
|
264
|
|
|
—
|
|
|
—
|
|
|
264
|
|
|||||
Exercise of stock options
|
—
|
|
|
982,904
|
|
|
—
|
|
|
29
|
|
|
—
|
|
|
—
|
|
|
29
|
|
|||||
Stock issued for employee stock purchase plan
|
—
|
|
|
1,905,534
|
|
|
—
|
|
|
63
|
|
|
—
|
|
|
—
|
|
|
63
|
|
|||||
Issuance of vested restricted stock units
|
—
|
|
|
7,712,463
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Shares withheld related to net share settlement of stock awards and stock options
|
—
|
|
|
(2,605,807
|
)
|
|
—
|
|
|
(122
|
)
|
|
—
|
|
|
—
|
|
|
(122
|
)
|
|||||
Transfer RSU to NQDC plan
|
—
|
|
|
(28,982
|
)
|
|
(1
|
)
|
|
1
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Dividends on preferred stock
|
—
|
|
|
—
|
|
|
—
|
|
|
(55
|
)
|
|
—
|
|
|
—
|
|
|
(55
|
)
|
|||||
Prior year Retained Earnings
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
38
|
|
|
38
|
|
|||||
Balance as of December 31, 2016
|
20,000,000
|
|
|
826,357,331
|
|
|
(1
|
)
|
|
38,846
|
|
|
1
|
|
|
(20,610
|
)
|
|
18,236
|
|
|||||
Net income
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
4,536
|
|
|
4,536
|
|
|||||
Other comprehensive income
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
7
|
|
|
—
|
|
|
7
|
|
|||||
Stock-based compensation
|
—
|
|
|
—
|
|
|
—
|
|
|
344
|
|
|
—
|
|
|
—
|
|
|
344
|
|
|||||
Exercise of stock options
|
—
|
|
|
450,493
|
|
|
—
|
|
|
19
|
|
|
—
|
|
|
—
|
|
|
19
|
|
|||||
Stock issued for employee stock purchase plan
|
—
|
|
|
1,832,043
|
|
|
—
|
|
|
82
|
|
|
—
|
|
|
—
|
|
|
82
|
|
|||||
Issuance of vested restricted stock units
|
—
|
|
|
8,338,271
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Shares withheld related to net share settlement of stock awards and stock options
|
—
|
|
|
(2,754,721
|
)
|
|
—
|
|
|
(166
|
)
|
|
—
|
|
|
—
|
|
|
(166
|
)
|
|||||
Mandatory conversion of preferred shares to common shares
|
(20,000,000
|
)
|
|
32,237,983
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Repurchases of common stock
|
—
|
|
|
(7,010,889
|
)
|
|
—
|
|
|
(444
|
)
|
|
—
|
|
|
—
|
|
|
(444
|
)
|
|||||
Transfer RSU to NQDC plan
|
—
|
|
|
(43,860
|
)
|
|
(3
|
)
|
|
3
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Dividends on preferred stock
|
—
|
|
|
—
|
|
|
—
|
|
|
(55
|
)
|
|
—
|
|
|
—
|
|
|
(55
|
)
|
|||||
Balance as of December 31, 2017
|
—
|
|
|
859,406,651
|
|
|
(4
|
)
|
|
38,629
|
|
|
8
|
|
|
(16,074
|
)
|
|
22,559
|
|
|||||
Net income
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
2,888
|
|
|
2,888
|
|
|||||
Other comprehensive income
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(332
|
)
|
|
—
|
|
|
(332
|
)
|
|||||
Stock-based compensation
|
—
|
|
|
—
|
|
|
—
|
|
|
473
|
|
|
—
|
|
|
—
|
|
|
473
|
|
|||||
Exercise of stock options
|
—
|
|
|
187,965
|
|
|
—
|
|
|
3
|
|
|
—
|
|
|
—
|
|
|
3
|
|
|||||
Stock issued for employee stock purchase plan
|
—
|
|
|
2,011,794
|
|
|
—
|
|
|
103
|
|
|
—
|
|
|
—
|
|
|
103
|
|
|||||
Issuance of vested restricted stock units
|
—
|
|
|
7,448,148
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Issuance of restricted stock awards
|
—
|
|
|
225,799
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Shares withheld related to net share settlement of stock awards and stock options
|
—
|
|
|
(2,321,827
|
)
|
|
—
|
|
|
(146
|
)
|
|
—
|
|
|
—
|
|
|
(146
|
)
|
|||||
Repurchases of common stock
|
—
|
|
|
(16,738,758
|
)
|
|
—
|
|
|
(1,054
|
)
|
|
—
|
|
|
—
|
|
|
(1,054
|
)
|
|||||
Transfer RSU to NQDC plan
|
—
|
|
|
(39,455
|
)
|
|
(2
|
)
|
|
2
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Prior year Retained Earnings
(1)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(8
|
)
|
|
232
|
|
|
224
|
|
|||||
Balance as of December 31, 2018
|
—
|
|
|
850,180,317
|
|
|
$
|
(6
|
)
|
|
$
|
38,010
|
|
|
$
|
(332
|
)
|
|
$
|
(12,954
|
)
|
|
$
|
24,718
|
|
Level 1
|
Quoted prices in active markets for identical assets or liabilities;
|
Level 2
|
Observable inputs other than the quoted prices in active markets for identical assets and liabilities; and
|
Level 3
|
Unobservable inputs for which there is little or no market data, which require us to develop assumptions of what market participants would use in pricing the asset or liability.
|
•
|
Revenue for service contracts that we assess are not probable of collection is not recognized until the contract is completed and cash is received. Collectibility is re-assessed when there is a significant change in facts or circumstances. Our assessment of collectibility considers whether we may limit our exposure to credit risk through our right to stop transferring additional service in the event the customer is delinquent as well as certain contract terms such as down payments that reduce our exposure to credit risk. Customer credit behavior is inherently uncertain. See “Receivables and Allowance for Credit Losses”, above, for more discussion on how we assess credit risk.
|
•
|
Promotional EIP bill credits offered to a customer on an equipment sale that are paid over time and are contingent on the customer maintaining a service contract may result in an extended service contract based on whether a substantive penalty is deemed to exist. Determining whether contingent EIP bill credits result in a substantive termination penalty may require significant judgment.
|
•
|
The identification of distinct performance obligations within our service plans may require significant judgment.
|
•
|
Revenue is recorded net of costs paid to another party for performance obligations where we arrange for the other party to transfer goods or services to the customer (i.e., when we are acting as an agent). For example, performance obligations relating to services provided by third-party content providers where we neither controls a right to the content provider’s service nor controls the underlying service itself are presented net because we are acting as an agent. The determination of whether we control the underlying service or right to the service prior to our transfer to the customer requires, at times, significant judgment.
|
•
|
For transactions where we recognize a significant financing component, judgment is required to determine the discount rate. For EIP sales, the discount rate used to adjust the transaction price primarily reflects current market interest rates and the estimated credit risk of the customer. Customer credit behavior is inherently uncertain. See “Receivables and Allowance for Credit Losses”, above, for more discussion on how we assess credit risk.
|
•
|
Our products are generally sold with a right of return, which is accounted for as variable consideration when estimating the amount of revenue to recognize. Device return levels are estimated based on the expected value method as there are a large number of contracts with similar characteristics and the outcome of each contract is independent of the others. Historical return rate experience is a significant input to our expected value methodology.
|
•
|
Sales of equipment to indirect dealers who have been identified as our customer (referred to as the sell-in model) often include credits subsequently paid to the dealer as a reimbursement for any discount promotions offered to the end consumer. These credits (payments to a customer) are accounted for as variable consideration when estimating the amount of revenue to recognize from the sales of equipment to indirect dealers and are estimated based on historical experience and other factors, such as expected promotional activity.
|
•
|
The determination of the standalone selling price for contracts that involve more than one performance obligation may require significant judgment, such as when the selling price of a good or service is not readily observable.
|
•
|
For capitalized contract costs, determining the amortization period over which such costs are recognized as well as assessing the indicators of impairment may require significant judgment.
|
|
January 1, 2018
|
||||||||||
(in millions)
|
Beginning Balance
|
|
Cumulative Effect Adjustment
|
|
Beginning Balance, As Adjusted
|
||||||
Assets
|
|
|
|
|
|
||||||
Other current assets
|
$
|
1,903
|
|
|
$
|
140
|
|
|
$
|
2,043
|
|
Other assets
|
912
|
|
|
150
|
|
|
1,062
|
|
|||
Liabilities and Stockholders’ Equity
|
|
|
|
|
|
||||||
Deferred revenue
|
$
|
779
|
|
|
$
|
4
|
|
|
$
|
783
|
|
Deferred tax liabilities
|
3,537
|
|
|
73
|
|
|
3,610
|
|
|||
Accumulated deficit
|
(16,074
|
)
|
|
213
|
|
|
(15,861
|
)
|
•
|
A deferred contract cost asset of
$150 million
was recorded at transition in
Other assets
in our
Consolidated Balance Sheets
for incremental contract acquisition costs paid on open contracts, which consists primarily of commissions paid to acquire branded postpaid service contracts; and
|
•
|
A contract asset of
$140 million
was recorded at transition in
Other current assets
in our
Consolidated Balance Sheets
primarily for contracts with promotional bill credits offered to customers on equipment sales that are paid over time and are contingent on the customer maintaining a service contract.
|
|
Year Ended December 31, 2018
|
||||||||||
(in millions, except per share amounts)
|
Previous Revenue Standard
|
|
New Revenue Standard
|
|
Change
|
||||||
Revenues
|
|
|
|
|
|
||||||
Branded postpaid revenues
|
$
|
20,887
|
|
|
$
|
20,862
|
|
|
$
|
(25
|
)
|
Branded prepaid revenues
|
9,608
|
|
|
9,598
|
|
|
(10
|
)
|
|||
Wholesale revenues
|
1,183
|
|
|
1,183
|
|
|
—
|
|
|||
Roaming and other service revenues
|
349
|
|
|
349
|
|
|
—
|
|
|||
Total service revenues
|
32,027
|
|
|
31,992
|
|
|
(35
|
)
|
|||
Equipment revenues
|
9,616
|
|
|
10,009
|
|
|
393
|
|
|||
Other revenues
|
1,309
|
|
|
1,309
|
|
|
—
|
|
|||
Total revenues
|
42,952
|
|
|
43,310
|
|
|
358
|
|
|||
Operating expenses
|
|
|
|
|
|
||||||
Cost of services, exclusive of depreciation and amortization shown separately below
|
6,233
|
|
|
6,307
|
|
|
74
|
|
|||
Cost of equipment sales
|
12,065
|
|
|
12,047
|
|
|
(18
|
)
|
|||
Selling, general and administrative
|
13,257
|
|
|
13,161
|
|
|
(96
|
)
|
|||
Depreciation and amortization
|
6,486
|
|
|
6,486
|
|
|
—
|
|
|||
Total operating expenses
|
38,041
|
|
|
38,001
|
|
|
(40
|
)
|
|||
Operating income
|
4,911
|
|
|
5,309
|
|
|
398
|
|
|||
Total other expense, net
|
(1,392
|
)
|
|
(1,392
|
)
|
|
—
|
|
|||
Income before income taxes
|
3,519
|
|
|
3,917
|
|
|
398
|
|
|||
Income tax expense
|
(926
|
)
|
|
(1,029
|
)
|
|
(103
|
)
|
|||
Net income
|
$
|
2,593
|
|
|
$
|
2,888
|
|
|
$
|
295
|
|
Earnings per share
|
|
|
|
|
|
||||||
Basic earnings per share
|
$
|
3.05
|
|
|
$
|
3.40
|
|
|
$
|
0.35
|
|
Diluted earnings per share
|
$
|
3.02
|
|
|
$
|
3.36
|
|
|
$
|
0.34
|
|
|
December 31, 2018
|
||||||||||
(in millions)
|
Previous Revenue Standard
|
|
New Revenue Standard
|
|
Change
|
||||||
Assets
|
|
|
|
|
|
||||||
Other current assets
|
$
|
1,625
|
|
|
$
|
1,676
|
|
|
$
|
51
|
|
Other assets
|
979
|
|
|
1,623
|
|
|
644
|
|
|||
Liabilities and Stockholders’ Equity
|
|
|
|
|
|
||||||
Deferred revenue
|
$
|
685
|
|
|
$
|
698
|
|
|
$
|
13
|
|
Deferred tax liabilities
|
4,297
|
|
|
4,472
|
|
|
175
|
|
|||
Accumulated deficit
|
(13,461
|
)
|
|
(12,954
|
)
|
|
507
|
|
•
|
Under the new revenue standard, certain commissions paid to dealers previously recognized as a reduction to Equipment revenues in our
Consolidated Statements of Comprehensive Income
are now recorded as commission costs in
Selling, general and administrative
expense.
|
•
|
Contract costs capitalized for new contracts accumulated in
Other assets
in our
Consolidated Balance Sheets
during 2018. As a result, there was a net benefit to
Operating income
in our
Consolidated Statements of Comprehensive Income
during 2018 as capitalization of costs exceeded amortization. As capitalized costs amortize into expense over time, the accretive benefit to
Operating income
is expected to moderate in 2019 and normalize in 2020.
|
•
|
Certain promotions previously recognized as a reduction in Equipment revenues in our
Consolidated Statements of Comprehensive Income
are now recorded as a reduction in Service revenues.
|
•
|
Certain revenues previously recognized as Equipment revenues in our
Consolidated Statements of Comprehensive Income
are now recorded as Service revenues.
|
•
|
Certain contract fulfillment costs have been reclassified to Cost of services in our
Consolidated Statements of Comprehensive Income
from Selling, general and administrative expenses.
|
•
|
Wholesale revenues for minimum guaranteed amounts (guarantee shortfall) are recognized when it is probable that a reversal of such revenue will not occur, which may impact the timing of recognition as compared to the previous standard.
|
•
|
For contracts with promotional bill credits that are contingent on the customer maintaining a service contract that result in an extended service contract, a contract asset is recorded when control of the equipment transfers to the customer and is subsequently amortized as a reduction to
Total service revenues
in our
Consolidated Statements of Comprehensive Income
over the extended contract term.
|
•
|
Upon adoption on January 1, 2019, we will recognize right-of-use assets and lease liabilities that have not previously been recorded. The lease liability for operating leases is based on the net present value of future minimum lease payments. The right-of-use asset for operating leases is based on the lease liability adjusted for the reclassification of certain balance sheet amounts such as deferred rent, subsequent to re-measurement from the assessment of lease term
|
•
|
We expect to elect the use of hindsight in determining the expected lease term for all cell sites and have generally concluded to include only payments due for the initial non-cancelable lease term. This assessment of expected lease term corresponds to our lease term assessment for new leases and aligns with the payments that have been disclosed as lease commitments in prior years. As a result, the average remaining lease term for cell sites has decreased from approximately
9 years
to
4 years
based on lease contracts in effect at transition on January 1, 2019.
|
•
|
We are also required to reassess the previously failed sale-leaseback of certain T-Mobile-owned wireless communication tower sites and determine whether the transfer of the assets to the tower operator under the arrangement met the transfer of control criteria in the new revenue standard and whether a sale should be recognized. We are continuing to finalize our assessment of the previously failed sale-leaseback. If we conclude a sale should be recognized, upon adoption on January 1, 2019, we would derecognize our existing long-term financial obligation and the net book value of the tower-related property and equipment associated with the previously failed sale-leaseback transaction. A change in the sale-leaseback accounting conclusion would also result in the recognition of a lease liability and right of use asset for the leaseback, decreases in Other revenues and Interest expense and a reclassification of certain cash payments from financing outflows to operating outflows in our Consolidated Statements of Cash Flows.
|
•
|
Excluding the impacts of a potential change in the accounting conclusion around the previously failed sale leaseback, the cumulative effects of initially applying the new lease standard on January 1, 2019 and for fiscal year 2019 would be as follows:
|
•
|
The cumulative effect of initially applying the new lease standard on January 1, 2019 is estimated to be an increase in total assets of
$8.5 billion
to
$9.4 billion
, an increase in total liabilities of
$8.2 billion
to
$8.9 billion
and a decrease to Accumulated deficit of
$300 million
to
$500 million
.
|
•
|
The aggregate impact is expected to result in a decrease in Total operating expenses of
$190 million
to
$230 million
and an increase to Net income of
$140 million
to
$180 million
in fiscal year 2019.
|
•
|
Including the impacts that would result from a change in the accounting conclusion on the previously failed sale-leaseback, the cumulative effects of initially applying the new lease standard on January 1, 2019 and for fiscal year 2019 would be as follows:
|
•
|
The cumulative effect of initially applying the new lease standard on January 1, 2019 is estimated to be an increase in total assets of
$9.1 billion
to
$10.0 billion
, an increase in total liabilities of
$7.0 billion
to
$7.5 billion
and a decrease to Accumulated deficit of
$2.1 billion
to
$2.5 billion
.
|
•
|
The aggregate impact is expected to result in a decrease in
Other revenues
of
$230 million
to
$250 million
, a decrease in
Interest expense
of
$200 million
to
$240 million
, a decrease in
Total operating expense
s of
$220 million
to
$260 million
and an increase to
Net income
of
$140 million
to
$180 million
in fiscal year 2019.
|
•
|
The expected impact on our
Consolidated Statements of Cash Flows
in fiscal year 2019 is a decrease in
Net cash provided by operating activities
of
$20 million
to
$40 million
and a decrease in Net cash used in financing activities of
$20 million
to
$40 million
.
|
(in millions)
|
January 22,
2018 |
||
Assets acquired
|
|
||
Cash and cash equivalents
|
$
|
2
|
|
Other current assets
|
14
|
|
|
Property and equipment, net
|
11
|
|
|
Intangible assets
|
100
|
|
|
Goodwill
|
218
|
|
|
Deferred tax assets
|
2
|
|
|
Total assets acquired
|
$
|
347
|
|
Liabilities assumed
|
|
||
Accounts payable and accrued liabilities
|
$
|
27
|
|
Short-term debt
|
2
|
|
|
Total liabilities assumed
|
29
|
|
|
Total consideration transferred
|
$
|
318
|
|
(in millions)
|
January 1,
2018 |
||
Consideration transferred:
|
|
||
Cash paid
|
$
|
25
|
|
Previously held equity interest:
|
|
||
Acquisition date fair value of previously held equity interest
|
56
|
|
|
Bargain purchase gain
|
25
|
|
|
Net assets acquired
|
$
|
106
|
|
(in millions)
|
January 1,
2018 |
||
Assets acquired
|
|
||
Current assets
|
|
||
Cash and cash equivalents
|
$
|
3
|
|
Accounts receivable, net
|
6
|
|
|
Equipment installment plan receivables, net
|
3
|
|
|
Inventories
|
1
|
|
|
Other current assets
|
2
|
|
|
Current assets, total
|
15
|
|
|
Property and equipment, net
|
36
|
|
|
Spectrum licenses
|
87
|
|
|
Total assets acquired
|
$
|
138
|
|
Liabilities assumed
|
|
||
Accounts payable and accrued liabilities
|
$
|
6
|
|
Deferred revenue
|
2
|
|
|
Current liabilities, total
|
8
|
|
|
Deferred tax liabilities
|
17
|
|
|
Other long-term liabilities
|
7
|
|
|
Total long-term liabilities
|
24
|
|
|
Net assets acquired
|
$
|
106
|
|
(in millions)
|
December 31,
2018 |
|
December 31,
2017 |
||||
EIP receivables, gross
|
$
|
4,534
|
|
|
$
|
3,960
|
|
Unamortized imputed discount
|
(330
|
)
|
|
(264
|
)
|
||
EIP receivables, net of unamortized imputed discount
|
4,204
|
|
|
3,696
|
|
||
Allowance for credit losses
|
(119
|
)
|
|
(132
|
)
|
||
EIP receivables, net
|
$
|
4,085
|
|
|
$
|
3,564
|
|
Classified on the balance sheet as:
|
|
|
|
||||
Equipment installment plan receivables, net
|
$
|
2,538
|
|
|
$
|
2,290
|
|
Equipment installment plan receivables due after one year, net
|
1,547
|
|
|
1,274
|
|
||
EIP receivables, net
|
$
|
4,085
|
|
|
$
|
3,564
|
|
|
December 31, 2018
|
|
December 31, 2017
|
|
December 31, 2016
|
||||||||||||||||||||||||||||||
(in millions)
|
Accounts Receivable Allowance
|
|
EIP Receivables Allowance
|
|
Total
|
|
Accounts Receivable Allowance
|
|
EIP Receivables Allowance
|
|
Total
|
|
Accounts Receivable Allowance
|
|
EIP Receivables Allowance
|
|
Total
|
||||||||||||||||||
Allowance for credit losses and imputed discount, beginning of period
|
$
|
86
|
|
|
$
|
396
|
|
|
$
|
482
|
|
|
$
|
102
|
|
|
$
|
316
|
|
|
$
|
418
|
|
|
$
|
116
|
|
|
$
|
333
|
|
|
$
|
449
|
|
Bad debt expense
|
69
|
|
|
228
|
|
|
297
|
|
|
104
|
|
|
284
|
|
|
388
|
|
|
227
|
|
|
250
|
|
|
477
|
|
|||||||||
Write-offs, net of recoveries
|
(88
|
)
|
|
(240
|
)
|
|
(328
|
)
|
|
(120
|
)
|
|
(273
|
)
|
|
(393
|
)
|
|
(241
|
)
|
|
(277
|
)
|
|
(518
|
)
|
|||||||||
Change in imputed discount on short-term and long-term EIP receivables
|
N/A
|
|
|
250
|
|
|
250
|
|
|
N/A
|
|
|
252
|
|
|
252
|
|
|
N/A
|
|
|
186
|
|
|
186
|
|
|||||||||
Impact on the imputed discount from sales of EIP receivables
|
N/A
|
|
|
(185
|
)
|
|
(185
|
)
|
|
N/A
|
|
|
(183
|
)
|
|
(183
|
)
|
|
N/A
|
|
|
(176
|
)
|
|
(176
|
)
|
|||||||||
Allowance for credit losses and imputed discount, end of period
|
$
|
67
|
|
|
$
|
449
|
|
|
$
|
516
|
|
|
$
|
86
|
|
|
$
|
396
|
|
|
$
|
482
|
|
|
$
|
102
|
|
|
$
|
316
|
|
|
$
|
418
|
|
|
December 31, 2018
|
|
December 31, 2017
|
||||||||||||||||||||
(in millions)
|
Prime
|
|
Subprime
|
|
Total EIP Receivables, gross
|
|
Prime
|
|
Subprime
|
|
Total EIP Receivables, gross
|
||||||||||||
Current - 30 days past due
|
$
|
1,987
|
|
|
$
|
2,446
|
|
|
$
|
4,433
|
|
|
$
|
1,727
|
|
|
$
|
2,133
|
|
|
$
|
3,860
|
|
31 - 60 days past due
|
15
|
|
|
32
|
|
|
47
|
|
|
17
|
|
|
29
|
|
|
46
|
|
||||||
61 - 90 days past due
|
6
|
|
|
19
|
|
|
25
|
|
|
6
|
|
|
16
|
|
|
22
|
|
||||||
More than 90 days past due
|
7
|
|
|
22
|
|
|
29
|
|
|
8
|
|
|
24
|
|
|
32
|
|
||||||
Total receivables, gross
|
$
|
2,015
|
|
|
$
|
2,519
|
|
|
$
|
4,534
|
|
|
$
|
1,758
|
|
|
$
|
2,202
|
|
|
$
|
3,960
|
|
(in millions)
|
December 31,
2018 |
|
December 31,
2017 |
||||
Other current assets
|
$
|
339
|
|
|
$
|
236
|
|
Accounts payable and accrued liabilities
|
59
|
|
|
25
|
|
||
Other current liabilities
|
149
|
|
|
180
|
|
(in millions)
|
December 31,
2018 |
|
December 31,
2017 |
||||
Other current assets
|
$
|
321
|
|
|
$
|
403
|
|
Other assets
|
88
|
|
|
109
|
|
||
Other long-term liabilities
|
22
|
|
|
3
|
|
(in millions)
|
December 31,
2018 |
|
December 31,
2017 |
||||
Derecognized net service receivables and EIP receivables
|
$
|
2,577
|
|
|
$
|
2,725
|
|
Other current assets
|
660
|
|
|
639
|
|
||
of which, deferred purchase price
|
658
|
|
|
636
|
|
||
Other long-term assets
|
88
|
|
|
109
|
|
||
of which, deferred purchase price
|
88
|
|
|
109
|
|
||
Accounts payable and accrued liabilities
|
59
|
|
|
25
|
|
||
Other current liabilities
|
149
|
|
|
180
|
|
||
Other long-term liabilities
|
22
|
|
|
3
|
|
||
Net cash proceeds since inception
|
1,879
|
|
|
2,058
|
|
||
Of which:
|
|
|
|
||||
Change in net cash proceeds during the year-to-date period
|
(179
|
)
|
|
28
|
|
||
Net cash proceeds funded by reinvested collections
|
2,058
|
|
|
2,030
|
|
(in millions)
|
Useful Lives
|
|
December 31,
2018 |
|
December 31,
2017 |
||||
Buildings and equipment
|
Up to 40 years
|
|
$
|
2,423
|
|
|
$
|
2,066
|
|
Wireless communications systems
|
Up to 20 years
|
|
35,282
|
|
|
32,706
|
|
||
Leasehold improvements
|
Up to 12 years
|
|
1,299
|
|
|
1,182
|
|
||
Capitalized software
|
Up to 10 years
|
|
11,712
|
|
|
10,563
|
|
||
Leased devices
|
Up to 18 months
|
|
1,164
|
|
|
1,209
|
|
||
Construction in progress
|
|
|
2,776
|
|
|
1,771
|
|
||
Accumulated depreciation and amortization
|
|
|
(31,297
|
)
|
|
(27,301
|
)
|
||
Property and equipment, net
|
|
|
$
|
23,359
|
|
|
$
|
22,196
|
|
(in millions)
|
December 31,
2018 |
|
December 31,
2017 |
||||
Leased wireless devices, gross
|
$
|
1,159
|
|
|
$
|
1,209
|
|
Accumulated depreciation
|
(622
|
)
|
|
(417
|
)
|
||
Leased wireless devices, net
|
$
|
537
|
|
|
$
|
792
|
|
(in millions)
|
Total
|
||
Year Ended December 31,
|
|
||
2019
|
$
|
419
|
|
2020
|
59
|
|
|
Total
|
$
|
478
|
|
(in millions)
|
December 31,
2018 |
|
December 31,
2017 |
||||
Asset retirement obligations, beginning of year
|
$
|
562
|
|
|
$
|
539
|
|
Liabilities incurred
|
26
|
|
|
25
|
|
||
Liabilities settled
|
(9
|
)
|
|
(16
|
)
|
||
Accretion expense
|
30
|
|
|
27
|
|
||
Changes in estimated cash flows
|
—
|
|
|
(13
|
)
|
||
Asset retirement obligations, end of year
|
$
|
609
|
|
|
$
|
562
|
|
Classified on the balance sheet as:
|
|
|
|
||||
Other current liabilities
|
$
|
—
|
|
|
$
|
3
|
|
Other long-term liabilities
|
609
|
|
|
559
|
|
||
Asset retirement obligations
|
$
|
609
|
|
|
$
|
562
|
|
(in millions)
|
Goodwill
|
||
Historical goodwill
|
$
|
12,449
|
|
Accumulated impairment losses at December 31, 2017
|
(10,766
|
)
|
|
Balance as of December 31, 2017
|
1,683
|
|
|
Goodwill from acquisition of Layer3 TV
|
218
|
|
|
Balance as of December 31, 2018
|
$
|
1,901
|
|
Accumulated impairment losses at December 31, 2018
|
$
|
(10,766
|
)
|
(in millions)
|
2018
|
|
2017
|
||||
Spectrum licenses, beginning of year
|
$
|
35,366
|
|
|
$
|
27,014
|
|
Spectrum license acquisitions
|
138
|
|
|
8,599
|
|
||
Spectrum licenses transferred to held for sale
|
(1
|
)
|
|
(271
|
)
|
||
Costs to clear spectrum
|
56
|
|
|
24
|
|
||
Spectrum licenses, end of year
|
$
|
35,559
|
|
|
$
|
35,366
|
|
•
|
We recorded spectrum licenses received as part of our acquisition of the remaining equity interest in IWS at their estimated fair value of approximately
$87 million
. See
Note 2 – Business Combinations
for further information.
|
•
|
We closed on multiple spectrum purchase agreements in which we acquired total spectrum licenses of approximately
$50 million
for cash consideration.
|
•
|
In September 2018, we signed a reciprocal long-term lease agreement with Sprint in which both parties have the right to use a portion of spectrum owned by the other party. This executory agreement does not qualify as an acquisition of spectrum licenses, and we have not capitalized amounts related to the lease. The reciprocal long-term lease is a distinct transaction from the Merger. See
Note 15 – Commitments and Contingencies
for further information.
|
•
|
In March 2017, we closed on an agreement with a third party for the exchange of certain AWS and PCS spectrum licenses. Upon closing of the transaction, we recorded the spectrum licenses received at their estimated fair value of approximately
$123 million
and recognized a gain of
$37 million
included in
Gains on disposal of spectrum licenses
in our
Consolidated Statements of Comprehensive Income
.
|
•
|
In April 2017, the FCC announced that we were the winning bidder of
1,525
licenses in the 600 MHz spectrum auction for an aggregate price of
$8.0 billion
. At inception of the auction in June 2016, we deposited
$2.2 billion
with the FCC which, based on the outcome of the auction, was sufficient to cover our down payment obligation due in April 2017. In May 2017, we paid the FCC the remaining
$5.8 billion
of the purchase price using cash reserves and by issuing debt to Deutsche Telekom AG (“DT”), our majority stockholder, pursuant to existing purchase commitments.
|
•
|
In September 2017, we closed on an agreement with a third party for the exchange of certain AWS and PCS spectrum licenses. Upon closing of the transaction, we recorded the spectrum licenses received at their estimated fair value of approximately
$115 million
and recognized a gain of
$29 million
included in
Gains on disposal of spectrum licenses
in our
Consolidated Statements of Comprehensive Income
.
|
•
|
In September 2017, we entered into a Unit Purchase Agreement (“UPA”) to acquire the remaining equity in Iowa Wireless Services, LLC (“IWS”), a
54%
owned unconsolidated subsidiary, for a purchase price of
$25 million
. On January 1, 2018, we closed on the purchase agreement and received the IWS spectrum licenses, among other assets. As of December 31, 2017, we accounted for our existing investment in IWS under the equity method as we had significant influence, but not control.
|
•
|
In December 2017, we closed on an agreement with a third party for the exchange of certain AWS and PCS spectrum licenses. Upon closing of the transaction, we recorded the spectrum licenses received at their estimated fair value of approximately
$352 million
and recognized a gain of
$168 million
included in
Gains on disposal of spectrum licenses
in our
Consolidated Statements of Comprehensive Income
.
|
|
Useful Lives
|
|
December 31, 2018
|
|
December 31, 2017
|
||||||||||||||||||||
(in millions)
|
|
Gross Amount
|
|
Accumulated Amortization
|
|
Net Amount
|
|
Gross Amount
|
|
Accumulated Amortization
|
|
Net Amount
|
|||||||||||||
Customer lists
|
Up to 6 years
|
|
$
|
1,104
|
|
|
$
|
(1,086
|
)
|
|
$
|
18
|
|
|
$
|
1,104
|
|
|
$
|
(1,016
|
)
|
|
$
|
88
|
|
Trademarks and patents
|
Up to 19 years
|
|
312
|
|
|
(225
|
)
|
|
87
|
|
|
307
|
|
|
(192
|
)
|
|
115
|
|
||||||
Other
|
Up to 28 years
|
|
149
|
|
|
(56
|
)
|
|
93
|
|
|
49
|
|
|
(35
|
)
|
|
14
|
|
||||||
Other intangible assets
|
|
|
$
|
1,565
|
|
|
$
|
(1,367
|
)
|
|
$
|
198
|
|
|
$
|
1,460
|
|
|
$
|
(1,243
|
)
|
|
$
|
217
|
|
(in millions)
|
Estimated Future Amortization
|
||
Year Ending December 31,
|
|
||
2019
|
$
|
73
|
|
2020
|
55
|
|
|
2021
|
35
|
|
|
2022
|
25
|
|
|
2023
|
6
|
|
|
Thereafter
|
4
|
|
|
Total
|
$
|
198
|
|
|
Level within the Fair Value Hierarchy
|
|
December 31, 2018
|
|
December 31, 2017
|
||||||||||||
(in millions)
|
|
Carrying Amount
|
|
Fair Value
|
|
Carrying Amount
|
|
Fair Value
|
|||||||||
Assets:
|
|
|
|
|
|
|
|
|
|
||||||||
Deferred purchase price assets
|
3
|
|
$
|
746
|
|
|
$
|
746
|
|
|
$
|
745
|
|
|
$
|
745
|
|
|
Level within the Fair Value Hierarchy
|
|
December 31, 2018
|
|
December 31, 2017
|
||||||||||||
(in millions)
|
|
Carrying Amount
|
|
Fair Value
|
|
Carrying Amount
|
|
Fair Value
|
|||||||||
Liabilities:
|
|
|
|
|
|
|
|
|
|
||||||||
Senior Notes to third parties
|
1
|
|
$
|
10,950
|
|
|
$
|
10,945
|
|
|
$
|
11,910
|
|
|
$
|
12,540
|
|
Senior Notes to affiliates
|
2
|
|
9,984
|
|
|
9,802
|
|
|
7,486
|
|
|
7,852
|
|
||||
Incremental Term Loan Facility to affiliates
|
2
|
|
4,000
|
|
|
3,976
|
|
|
4,000
|
|
|
4,020
|
|
||||
Senior Reset Notes to affiliates
|
2
|
|
598
|
|
|
640
|
|
|
3,100
|
|
|
3,260
|
|
(in millions)
|
December 31,
2018 |
|
December 31,
2017 |
||||
8.097% Senior Reset Notes to affiliates due 2021
|
$
|
—
|
|
|
$
|
1,250
|
|
5.300% Senior Notes to affiliates due 2021
|
2,000
|
|
|
2,000
|
|
||
8.195% Senior Reset Notes to affiliates due 2022
|
—
|
|
|
1,250
|
|
||
4.000% Senior Notes to affiliates due 2022
|
1,000
|
|
|
1,000
|
|
||
4.000% Senior Notes due 2022
|
500
|
|
|
500
|
|
||
6.125% Senior Notes due 2022
|
—
|
|
|
1,000
|
|
||
Incremental term loan facility to affiliates due 2022
|
2,000
|
|
|
2,000
|
|
||
6.000% Senior Notes due 2023
|
1,300
|
|
|
1,300
|
|
||
6.625% Senior Notes due 2023
|
—
|
|
|
1,750
|
|
||
6.836% Senior Notes due 2023
|
—
|
|
|
600
|
|
||
9.332% Senior Reset Notes to affiliates due 2023
|
600
|
|
|
600
|
|
||
6.000% Senior Notes due 2024
|
1,000
|
|
|
1,000
|
|
||
6.500% Senior Notes due 2024
|
1,000
|
|
|
1,000
|
|
||
6.000% Senior Notes to affiliates due 2024
|
1,350
|
|
|
1,350
|
|
||
6.000% Senior Notes to affiliates due 2024
|
650
|
|
|
650
|
|
||
Incremental term loan facility to affiliates due 2024
|
2,000
|
|
|
2,000
|
|
||
5.125% Senior Notes to affiliates due 2025
|
1,250
|
|
|
1,250
|
|
||
5.125% Senior Notes due 2025
|
500
|
|
|
500
|
|
||
6.375% Senior Notes due 2025
|
1,700
|
|
|
1,700
|
|
||
6.500% Senior Notes due 2026
|
2,000
|
|
|
2,000
|
|
||
4.500% Senior Notes due 2026
|
1,000
|
|
|
—
|
|
||
4.500% Senior Notes to affiliates due 2026
|
1,000
|
|
|
—
|
|
||
5.375% Senior Notes due 2027
|
500
|
|
|
500
|
|
||
5.375% Senior Notes to affiliates due 2027
|
1,250
|
|
|
1,250
|
|
||
4.750% Senior Notes due 2028
|
1,500
|
|
|
—
|
|
||
4.750% Senior Notes to affiliates due 2028
|
1,500
|
|
|
—
|
|
||
Capital leases
|
2,015
|
|
|
1,824
|
|
||
Unamortized premium from purchase price allocation fair value adjustment
|
—
|
|
|
78
|
|
||
Unamortized premium on debt to affiliates
|
52
|
|
|
59
|
|
||
Unamortized discount on Senior Notes to affiliates
|
(64
|
)
|
|
(73
|
)
|
||
Debt issuance costs and consent fees
|
(56
|
)
|
|
(19
|
)
|
||
Total debt
|
27,547
|
|
|
28,319
|
|
||
Less: Current portion of Senior Notes
|
—
|
|
|
999
|
|
||
Less: Current portion of capital leases
|
841
|
|
|
613
|
|
||
Total long-term debt
|
$
|
26,706
|
|
|
$
|
26,707
|
|
Classified on the balance sheet as:
|
|
|
|
||||
Long-term debt
|
$
|
12,124
|
|
|
$
|
12,121
|
|
Long-term debt to affiliates
|
14,582
|
|
|
14,586
|
|
||
Total long-term debt
|
$
|
26,706
|
|
|
$
|
26,707
|
|
(in millions)
|
Principal Issuances
|
|
Issuance Costs
|
|
Net Proceeds from Issuance of Long-Term Debt
|
|
Issue Date
|
||||||
4.500% Senior Notes due 2026
|
$
|
1,000
|
|
|
$
|
2
|
|
|
$
|
998
|
|
|
January 25, 2018
|
4.750% Senior Notes due 2028
|
1,500
|
|
|
4
|
|
|
1,496
|
|
|
January 25, 2018
|
|||
Total of Senior Notes issued
|
$
|
2,500
|
|
|
$
|
6
|
|
|
$
|
2,494
|
|
|
|
(in millions)
|
Principal Amount
|
|
Write-off of Premiums, Discounts and Issuance Costs
(1)
|
|
Call Penalties
(1) (2)
|
|
Redemption
Date |
|
Redemption Price
|
|||||||
6.125% Senior Notes due 2022
|
$
|
1,000
|
|
|
$
|
1
|
|
|
$
|
31
|
|
|
January 15, 2018
|
|
103.063
|
%
|
6.625% Senior Notes due 2023
|
1,750
|
|
|
(75
|
)
|
|
58
|
|
|
April 1, 2018
|
|
103.313
|
%
|
|||
6.836% Senior Notes due 2023
|
600
|
|
|
—
|
|
|
21
|
|
|
April 28, 2018
|
|
103.418
|
%
|
(1)
|
Write-off of premiums, discounts, issuance costs and call penalties are included in
Other income (expense), net
in our
Consolidated Statements of Comprehensive Income
. Write-off of premiums, discounts and issuance costs are included in
Losses on redemption of debt
within
Net cash provided by operating activities
in our
Consolidated Statements of Cash Flows
.
|
(2)
|
The call penalty is the excess paid over the principal amount. Call penalties are included within
Net cash (used in) provided by financing activities
in our
Consolidated Statements of Cash Flows
.
|
(in millions)
|
Principal Amount
|
|
Write -off of Embedded Derivatives
(1)
|
|
Other
(2)
|
|
Redemption
Date |
|
Redemption Price
|
|||||||
8.097% Senior Notes due 2021
|
$
|
1,250
|
|
|
$
|
(8
|
)
|
|
$
|
51
|
|
|
April 28, 2018
|
|
104.0485
|
%
|
8.195% Senior Notes due 2022
|
1,250
|
|
|
(8
|
)
|
|
51
|
|
|
April 28, 2018
|
|
104.0975
|
%
|
|||
Total
|
$
|
2,500
|
|
|
$
|
(16
|
)
|
|
$
|
102
|
|
|
|
|
|
(1)
|
Certain components of the reset features were required to be bifurcated from the DT Senior Reset Notes and separately accounted for as embedded derivative instruments. Write-off of embedded derivatives are included in
Losses on redemption of debt
within
Net cash provided by operating activities
in our
Consolidated Statements of Cash Flows
.
|
(2)
|
Cash for the premium portion of the redemption price set forth in the indenture governing the DT Senior Reset Notes, plus accrued but unpaid interest on the DT Senior Reset Notes to, but not including, the exchange date.
|
(in millions)
|
Future Minimum Payments
|
||
Year Ended December 31,
|
|
||
2019
|
$
|
909
|
|
2020
|
631
|
|
|
2021
|
389
|
|
|
2022
|
102
|
|
|
2023
|
66
|
|
|
Thereafter
|
106
|
|
|
Total
|
$
|
2,203
|
|
Included in Total
|
|
||
Interest
|
$
|
143
|
|
Maintenance
|
45
|
|
(in millions)
|
December 31,
2018 |
|
December 31,
2017 |
||||
JP Morgan Chase
|
$
|
20
|
|
|
$
|
20
|
|
Deutsche Bank
|
66
|
|
|
59
|
|
||
Total outstanding balance
|
$
|
86
|
|
|
$
|
79
|
|
(in millions)
|
December 31,
2018 |
|
December 31,
2017 |
||||
Property and equipment, net
|
$
|
329
|
|
|
$
|
402
|
|
Long-term financial obligation
|
2,557
|
|
|
2,590
|
|
•
|
Branded postpaid customers generally include customers who are qualified to pay after receiving wireless communication services utilizing phones, mobile broadband devices (including tablets), DIGITS, SyncUP DRIVE™ or other devices including wearables;
|
•
|
Branded prepaid customers generally include customers who pay for wireless communication services in advance. Our branded prepaid customers include customers of T-Mobile and Metro by T-Mobile; and
|
•
|
Wholesale customers include M2M and MVNO customers that operate on our network but are managed by wholesale partners.
|
|
Year Ended December 31,
|
||||||||||
(in millions)
|
2018
|
|
2017
|
|
2016
|
||||||
Branded postpaid service revenues
|
|
|
|
|
|
||||||
Branded postpaid phone revenues
|
$
|
19,745
|
|
|
$
|
18,371
|
|
|
$
|
17,365
|
|
Branded postpaid other revenues
|
1,117
|
|
|
1,077
|
|
|
773
|
|
|||
Total branded postpaid service revenues
|
$
|
20,862
|
|
|
$
|
19,448
|
|
|
$
|
18,138
|
|
|
Year Ended December 31,
|
||||||||||
(in millions)
|
2018
|
|
2017
|
|
2016
|
||||||
Equipment revenues from the lease of mobile communication devices and accessories
|
$
|
692
|
|
|
$
|
877
|
|
|
$
|
1,416
|
|
(in millions)
|
Contract Assets Included in Other Current Assets
|
|
Contract Liabilities Included in Deferred Revenue
|
||||
Balance as of January 1, 2018
|
$
|
140
|
|
|
$
|
718
|
|
Balance as of December 31, 2018
|
51
|
|
|
645
|
|
||
Change
|
$
|
(89
|
)
|
|
$
|
(73
|
)
|
(in millions)
|
Year Ended December 31, 2018
|
||
Amounts included in the January 1, 2018 contract liability balance
|
$
|
710
|
|
Amounts associated with performance obligations satisfied in previous periods
|
2
|
|
(in millions, except shares, per share and contractual life amounts)
|
December 31,
2018 |
|
December 31,
2017 |
|
December 31,
2016 |
||||||
Stock-based compensation expense
|
$
|
424
|
|
|
$
|
306
|
|
|
$
|
235
|
|
Income tax benefit related to stock-based compensation
|
81
|
|
|
73
|
|
|
80
|
|
|||
Weighted average fair value per stock award granted
|
61.52
|
|
|
60.21
|
|
|
45.07
|
|
|||
Unrecognized compensation expense
|
547
|
|
|
445
|
|
|
389
|
|
|||
Weighted average period to be recognized (years)
|
1.8
|
|
|
1.9
|
|
|
2.0
|
|
|||
Fair value of stock awards vested
|
471
|
|
|
503
|
|
|
354
|
|
(in millions, except shares, per share and contractual life amounts)
|
Number of Units or Awards
|
|
Weighted Average Grant Date Fair Value
|
|
Weighted Average Remaining Contractual Term (Years)
|
|
Aggregate Intrinsic Value
|
|||||
Nonvested, December 31, 2017
|
12,061,608
|
|
|
$
|
50.69
|
|
|
1.1
|
|
$
|
766
|
|
Granted
|
6,259,169
|
|
|
60.44
|
|
|
|
|
|
|||
Vested
|
6,455,617
|
|
|
47.89
|
|
|
|
|
|
|||
Forfeited
|
854,525
|
|
|
56.90
|
|
|
|
|
|
|||
Nonvested, December 31, 2018
|
11,010,635
|
|
|
57.66
|
|
|
1.0
|
|
$
|
700
|
|
(in millions, except shares, per share and contractual life amounts)
|
Number of Units or Awards
|
|
Weighted Average Grant Date Fair Value
|
|
Weighted Average Remaining Contractual Term (Years)
|
|
Aggregate Intrinsic Value
|
|||||
Nonvested, December 31, 2017
|
1,633,935
|
|
|
$
|
48.06
|
|
|
1.1
|
|
$
|
104
|
|
Granted
|
3,364,629
|
|
|
63.54
|
|
|
|
|
|
|||
Vested
|
1,006,769
|
|
|
36.47
|
|
|
|
|
|
|||
Forfeited
|
140,241
|
|
|
64.14
|
|
|
|
|
|
|||
Nonvested, December 31, 2018
|
3,851,554
|
|
|
64.03
|
|
|
1.6
|
|
$
|
245
|
|
|
Shares
|
|
Weighted Average Exercise Price
|
|
Weighted Average Remaining Contractual Term (Years)
|
|||
Outstanding and exercisable, December 31, 2017
|
373,158
|
|
|
$
|
16.36
|
|
|
2.8
|
Assumed through acquisition of Layer3 TV
|
118,645
|
|
|
15.51
|
|
|
|
|
Exercised
|
187,965
|
|
|
18.28
|
|
|
|
|
Expired/canceled
|
19,027
|
|
|
18.81
|
|
|
|
|
Outstanding at December 31, 2018
|
284,811
|
|
|
14.58
|
|
|
3.8
|
|
Exercisable at December 31, 2018
|
244,224
|
|
|
14.18
|
|
|
3.1
|
Year ended December 31
|
Number of Shares Repurchased
|
|
Average Price Paid Per Share
|
|
Total Purchase Price
|
|||||
2018
|
16,738,758
|
|
|
$
|
62.96
|
|
|
$
|
1,054
|
|
2017
|
7,010,889
|
|
|
63.34
|
|
|
444
|
|
||
|
23,749,647
|
|
|
63.07
|
|
|
$
|
1,498
|
|
|
Year Ended December 31,
|
||||||||||
(in millions)
|
2018
|
|
2017
|
|
2016
|
||||||
U.S.
|
$
|
3,686
|
|
|
$
|
3,274
|
|
|
$
|
2,286
|
|
Puerto Rico
|
231
|
|
|
(113
|
)
|
|
41
|
|
|||
Income before income taxes
|
$
|
3,917
|
|
|
$
|
3,161
|
|
|
$
|
2,327
|
|
|
Year Ended December 31,
|
||||||||||
(in millions)
|
2018
|
|
2017
|
|
2016
|
||||||
Current tax benefit (expense)
|
|
|
|
|
|
||||||
Federal
|
$
|
39
|
|
|
$
|
—
|
|
|
$
|
66
|
|
State
|
(63
|
)
|
|
(28
|
)
|
|
(29
|
)
|
|||
Puerto Rico
|
(25
|
)
|
|
(1
|
)
|
|
10
|
|
|||
Total current tax benefit (expense)
|
(49
|
)
|
|
(29
|
)
|
|
47
|
|
|||
Deferred tax benefit (expense)
|
|
|
|
|
|
||||||
Federal
|
(750
|
)
|
|
1,182
|
|
|
(804
|
)
|
|||
State
|
(160
|
)
|
|
173
|
|
|
(96
|
)
|
|||
Puerto Rico
|
(70
|
)
|
|
49
|
|
|
(14
|
)
|
|||
Total deferred tax (expense) benefit
|
(980
|
)
|
|
1,404
|
|
|
(914
|
)
|
|||
Total income tax (expense) benefit
|
$
|
(1,029
|
)
|
|
$
|
1,375
|
|
|
$
|
(867
|
)
|
|
Year Ended December 31,
|
|||||||
|
2018
|
|
2017
|
|
2016
|
|||
Federal statutory income tax rate
|
21.0
|
%
|
|
35.0
|
%
|
|
35.0
|
%
|
Effect of law and rate changes
|
1.9
|
|
|
(68.9
|
)
|
|
0.8
|
|
Change in valuation allowance
|
(1.6
|
)
|
|
(11.4
|
)
|
|
1.0
|
|
State taxes, net of federal benefit
|
4.8
|
|
|
4.8
|
|
|
3.2
|
|
Equity-based compensation
|
(0.6
|
)
|
|
(2.4
|
)
|
|
(2.2
|
)
|
Puerto Rico taxes, net of federal benefit
|
2.4
|
|
|
(1.5
|
)
|
|
—
|
|
Permanent differences
|
1.3
|
|
|
0.5
|
|
|
0.6
|
|
Federal tax credits, net of reserves
|
(2.9
|
)
|
|
0.3
|
|
|
(0.5
|
)
|
Other, net
|
—
|
|
|
0.1
|
|
|
(0.6
|
)
|
Effective income tax rate
|
26.3
|
%
|
|
(43.5
|
)%
|
|
37.3
|
%
|
(in millions)
|
December 31,
2018 |
|
December 31,
2017 |
||||
Deferred tax assets
|
|
|
|
||||
Loss carryforwards
|
$
|
1,526
|
|
|
$
|
1,576
|
|
Deferred rents
|
784
|
|
|
759
|
|
||
Reserves and accruals
|
668
|
|
|
667
|
|
||
Federal and state tax credits
|
340
|
|
|
298
|
|
||
Other
|
620
|
|
|
403
|
|
||
Deferred tax assets, gross
|
3,938
|
|
|
3,703
|
|
||
Valuation allowance
|
(210
|
)
|
|
(273
|
)
|
||
Deferred tax assets, net
|
3,728
|
|
|
3,430
|
|
||
Deferred tax liabilities
|
|
|
|
||||
Spectrum licenses
|
5,494
|
|
|
5,038
|
|
||
Property and equipment
|
2,434
|
|
|
1,840
|
|
||
Other intangible assets
|
40
|
|
|
41
|
|
||
Other
|
232
|
|
|
48
|
|
||
Total deferred tax liabilities
|
8,200
|
|
|
6,967
|
|
||
Net deferred tax liabilities
|
$
|
4,472
|
|
|
$
|
3,537
|
|
|
|
|
|
||||
Classified on the balance sheet as:
|
|
|
|
||||
Deferred tax liabilities
|
$
|
4,472
|
|
|
$
|
3,537
|
|
|
Year Ended December 31,
|
||||||||||
(in millions)
|
2018
|
|
2017
|
|
2016
|
||||||
Unrecognized tax benefits, beginning of year
|
$
|
412
|
|
|
$
|
410
|
|
|
$
|
411
|
|
Gross increases (decreases) to tax positions in prior periods
|
6
|
|
|
(10
|
)
|
|
(5
|
)
|
|||
Gross increases due to current period business acquisitions
|
10
|
|
|
—
|
|
|
—
|
|
|||
Gross increases to current period tax positions
|
34
|
|
|
12
|
|
|
4
|
|
|||
Unrecognized tax benefits, end of year
|
$
|
462
|
|
|
$
|
412
|
|
|
$
|
410
|
|
|
Year Ended December 31,
|
||||||||||
(in millions, except shares and per share amounts)
|
2018
|
|
2017
|
|
2016
|
||||||
Net income
|
$
|
2,888
|
|
|
$
|
4,536
|
|
|
$
|
1,460
|
|
Less: Dividends on mandatory convertible preferred stock
|
—
|
|
|
(55
|
)
|
|
(55
|
)
|
|||
Net income attributable to common stockholders - basic
|
2,888
|
|
|
4,481
|
|
|
1,405
|
|
|||
Add: Dividends related to mandatory convertible preferred stock
|
—
|
|
|
55
|
|
|
—
|
|
|||
Net income attributable to common stockholders - diluted
|
$
|
2,888
|
|
|
$
|
4,536
|
|
|
$
|
1,405
|
|
|
|
|
|
|
|
||||||
Weighted average shares outstanding - basic
|
849,744,152
|
|
|
831,850,073
|
|
|
822,470,275
|
|
|||
Effect of dilutive securities:
|
|
|
|
|
|
||||||
Outstanding stock options and unvested stock awards
|
8,546,022
|
|
|
9,200,873
|
|
|
10,584,270
|
|
|||
Mandatory convertible preferred stock
|
—
|
|
|
30,736,504
|
|
|
—
|
|
|||
Weighted average shares outstanding - diluted
|
858,290,174
|
|
|
871,787,450
|
|
|
833,054,545
|
|
|||
|
|
|
|
|
|
||||||
Earnings per share - basic
|
$
|
3.40
|
|
|
$
|
5.39
|
|
|
$
|
1.71
|
|
Earnings per share - diluted
|
$
|
3.36
|
|
|
$
|
5.20
|
|
|
$
|
1.69
|
|
|
|
|
|
|
|
||||||
Potentially dilutive securities:
|
|
|
|
|
|
||||||
Outstanding stock options and unvested stock awards
|
148,422
|
|
|
33,980
|
|
|
3,528,683
|
|
|||
Mandatory convertible preferred stock
|
—
|
|
|
—
|
|
|
32,238,000
|
|
(in millions)
|
December 31,
2018 |
|
December 31,
2017 |
||||
Accounts payable
|
$
|
5,487
|
|
|
$
|
6,182
|
|
Payroll and related benefits
|
709
|
|
|
614
|
|
||
Property and other taxes, including payroll
|
642
|
|
|
620
|
|
||
Interest
|
227
|
|
|
253
|
|
||
Commissions
|
243
|
|
|
324
|
|
||
Network decommissioning
|
65
|
|
|
92
|
|
||
Toll and interconnect
|
157
|
|
|
109
|
|
||
Advertising
|
76
|
|
|
46
|
|
||
Other
|
135
|
|
|
288
|
|
||
Accounts payable and accrued liabilities
|
$
|
7,741
|
|
|
$
|
8,528
|
|
|
Year Ended December 31, 2018
|
|
Year Ended December 31, 2017
|
||||||||||||||||||||
(in millions, except per share amounts)
|
Gross
|
|
Reim-
bursement |
|
Net
|
|
Gross
|
|
Reim-
bursement |
|
Net
|
||||||||||||
Increase (decrease)
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Revenues
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Branded postpaid revenues
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
(37
|
)
|
|
$
|
—
|
|
|
$
|
(37
|
)
|
Of which, postpaid phone revenues
|
—
|
|
|
—
|
|
|
—
|
|
|
(35
|
)
|
|
—
|
|
|
(35
|
)
|
||||||
Branded prepaid revenues
|
—
|
|
|
—
|
|
|
—
|
|
|
(11
|
)
|
|
—
|
|
|
(11
|
)
|
||||||
Total service revenues
|
—
|
|
|
—
|
|
|
—
|
|
|
(48
|
)
|
|
—
|
|
|
(48
|
)
|
||||||
Equipment revenues
|
—
|
|
|
—
|
|
|
—
|
|
|
(8
|
)
|
|
—
|
|
|
(8
|
)
|
||||||
Other revenues
|
—
|
|
|
71
|
|
|
71
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Total revenues
|
—
|
|
|
71
|
|
|
71
|
|
|
(56
|
)
|
|
—
|
|
|
(56
|
)
|
||||||
Operating expenses
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Cost of services
|
59
|
|
|
(135
|
)
|
|
(76
|
)
|
|
198
|
|
|
(93
|
)
|
|
105
|
|
||||||
Cost of equipment sales
|
1
|
|
|
—
|
|
|
1
|
|
|
4
|
|
|
—
|
|
|
4
|
|
||||||
Selling, general and administrative
|
1
|
|
|
(13
|
)
|
|
(12
|
)
|
|
36
|
|
|
—
|
|
|
36
|
|
||||||
Of which, bad debt expense
|
—
|
|
|
—
|
|
|
—
|
|
|
20
|
|
|
—
|
|
|
20
|
|
||||||
Total operating expenses
|
61
|
|
|
(148
|
)
|
|
(87
|
)
|
|
238
|
|
|
(93
|
)
|
|
145
|
|
||||||
Operating income (loss)
|
$
|
(61
|
)
|
|
$
|
219
|
|
|
$
|
158
|
|
|
$
|
(294
|
)
|
|
$
|
93
|
|
|
$
|
(201
|
)
|
Net income (loss)
|
$
|
(41
|
)
|
|
$
|
140
|
|
|
$
|
99
|
|
|
$
|
(193
|
)
|
|
$
|
63
|
|
|
$
|
(130
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Earnings per share - basic
|
$
|
(0.05
|
)
|
|
$
|
0.17
|
|
|
$
|
0.12
|
|
|
$
|
(0.23
|
)
|
|
$
|
0.07
|
|
|
$
|
(0.16
|
)
|
Earnings per share - diluted
|
$
|
(0.05
|
)
|
|
$
|
0.17
|
|
|
$
|
0.12
|
|
|
$
|
(0.22
|
)
|
|
$
|
0.07
|
|
|
$
|
(0.15
|
)
|
|
Year Ended December 31,
|
||||||||||
(in millions)
|
2018
|
|
2017
|
|
2016
|
||||||
Discount related to roaming expenses
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
(15
|
)
|
Fees incurred for use of the T-Mobile brand
|
84
|
|
|
79
|
|
|
74
|
|
|||
Expenses for telecommunications and IT services
|
—
|
|
|
12
|
|
|
25
|
|
|||
International long distance agreement
|
36
|
|
|
55
|
|
|
60
|
|
(in millions)
|
Parent
|
|
Issuer
|
|
Guarantor Subsidiaries
|
|
Non-Guarantor Subsidiaries
|
|
Consolidating and Eliminating Adjustments
|
|
Consolidated
|
||||||||||||
Assets
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Current assets
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Cash and cash equivalents
|
$
|
2
|
|
|
$
|
1
|
|
|
$
|
1,079
|
|
|
$
|
121
|
|
|
$
|
—
|
|
|
$
|
1,203
|
|
Accounts receivable, net
|
—
|
|
|
—
|
|
|
1,510
|
|
|
259
|
|
|
—
|
|
|
1,769
|
|
||||||
Equipment installment plan receivables, net
|
—
|
|
|
—
|
|
|
2,538
|
|
|
—
|
|
|
—
|
|
|
2,538
|
|
||||||
Accounts receivable from affiliates
|
—
|
|
|
—
|
|
|
11
|
|
|
—
|
|
|
—
|
|
|
11
|
|
||||||
Inventories
|
—
|
|
|
—
|
|
|
1,084
|
|
|
—
|
|
|
—
|
|
|
1,084
|
|
||||||
Other current assets
|
—
|
|
|
—
|
|
|
1,031
|
|
|
645
|
|
|
—
|
|
|
1,676
|
|
||||||
Total current assets
|
2
|
|
|
1
|
|
|
7,253
|
|
|
1,025
|
|
|
—
|
|
|
8,281
|
|
||||||
Property and equipment, net
(1)
|
—
|
|
|
—
|
|
|
23,062
|
|
|
297
|
|
|
—
|
|
|
23,359
|
|
||||||
Goodwill
|
—
|
|
|
—
|
|
|
1,683
|
|
|
218
|
|
|
—
|
|
|
1,901
|
|
||||||
Spectrum licenses
|
—
|
|
|
—
|
|
|
35,559
|
|
|
—
|
|
|
—
|
|
|
35,559
|
|
||||||
Other intangible assets, net
|
—
|
|
|
—
|
|
|
116
|
|
|
82
|
|
|
—
|
|
|
198
|
|
||||||
Investments in subsidiaries, net
|
25,314
|
|
|
46,516
|
|
|
—
|
|
|
—
|
|
|
(71,830
|
)
|
|
—
|
|
||||||
Intercompany receivables and note receivables
|
—
|
|
|
5,174
|
|
|
—
|
|
|
—
|
|
|
(5,174
|
)
|
|
—
|
|
||||||
Equipment installment plan receivables due after one year, net
|
—
|
|
|
—
|
|
|
1,547
|
|
|
—
|
|
|
—
|
|
|
1,547
|
|
||||||
Other assets
|
—
|
|
|
7
|
|
|
1,540
|
|
|
221
|
|
|
(145
|
)
|
|
1,623
|
|
||||||
Total assets
|
$
|
25,316
|
|
|
$
|
51,698
|
|
|
$
|
70,760
|
|
|
$
|
1,843
|
|
|
$
|
(77,149
|
)
|
|
$
|
72,468
|
|
Liabilities and Stockholders' Equity
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Current liabilities
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Accounts payable and accrued liabilities
|
$
|
—
|
|
|
$
|
228
|
|
|
$
|
7,240
|
|
|
$
|
273
|
|
|
$
|
—
|
|
|
$
|
7,741
|
|
Payables to affiliates
|
—
|
|
|
157
|
|
|
43
|
|
|
—
|
|
|
—
|
|
|
200
|
|
||||||
Short-term debt
|
—
|
|
|
—
|
|
|
841
|
|
|
—
|
|
|
—
|
|
|
841
|
|
||||||
Deferred revenue
|
—
|
|
|
—
|
|
|
698
|
|
|
—
|
|
|
—
|
|
|
698
|
|
||||||
Other current liabilities
|
—
|
|
|
447
|
|
|
164
|
|
|
176
|
|
|
—
|
|
|
787
|
|
||||||
Total current liabilities
|
—
|
|
|
832
|
|
|
8,986
|
|
|
449
|
|
|
—
|
|
|
10,267
|
|
||||||
Long-term debt
|
—
|
|
|
10,950
|
|
|
1,174
|
|
|
—
|
|
|
—
|
|
|
12,124
|
|
||||||
Long-term debt to affiliates
|
—
|
|
|
14,582
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
14,582
|
|
||||||
Tower obligations
(1)
|
—
|
|
|
—
|
|
|
384
|
|
|
2,173
|
|
|
—
|
|
|
2,557
|
|
||||||
Deferred tax liabilities
|
—
|
|
|
—
|
|
|
4,617
|
|
|
—
|
|
|
(145
|
)
|
|
4,472
|
|
||||||
Deferred rent expense
|
—
|
|
|
—
|
|
|
2,781
|
|
|
—
|
|
|
—
|
|
|
2,781
|
|
||||||
Negative carrying value of subsidiaries, net
|
—
|
|
|
—
|
|
|
676
|
|
|
—
|
|
|
(676
|
)
|
|
—
|
|
||||||
Intercompany payables and debt
|
598
|
|
|
—
|
|
|
4,234
|
|
|
342
|
|
|
(5,174
|
)
|
|
—
|
|
||||||
Other long-term liabilities
|
—
|
|
|
20
|
|
|
926
|
|
|
21
|
|
|
—
|
|
|
967
|
|
||||||
Total long-term liabilities
|
598
|
|
|
25,552
|
|
|
14,792
|
|
|
2,536
|
|
|
(5,995
|
)
|
|
37,483
|
|
||||||
Total stockholders' equity (deficit)
|
24,718
|
|
|
25,314
|
|
|
46,982
|
|
|
(1,142
|
)
|
|
(71,154
|
)
|
|
24,718
|
|
||||||
Total liabilities and stockholders' equity
|
$
|
25,316
|
|
|
$
|
51,698
|
|
|
$
|
70,760
|
|
|
$
|
1,843
|
|
|
$
|
(77,149
|
)
|
|
$
|
72,468
|
|
(1)
|
Assets and liabilities for Non-Guarantor Subsidiaries are primarily included in VIEs related to the 2012 Tower Transaction. See
Note 9 – Tower Obligations
for further information.
|
(in millions)
|
Parent
|
|
Issuer
|
|
Guarantor Subsidiaries
|
|
Non-Guarantor Subsidiaries
|
|
Consolidating and Eliminating Adjustments
|
|
Consolidated
|
||||||||||||
Assets
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Current assets
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Cash and cash equivalents
|
$
|
74
|
|
|
$
|
1
|
|
|
$
|
1,086
|
|
|
$
|
58
|
|
|
$
|
—
|
|
|
$
|
1,219
|
|
Accounts receivable, net
|
—
|
|
|
—
|
|
|
1,659
|
|
|
256
|
|
|
—
|
|
|
1,915
|
|
||||||
Equipment installment plan receivables, net
|
—
|
|
|
—
|
|
|
2,290
|
|
|
—
|
|
|
—
|
|
|
2,290
|
|
||||||
Accounts receivable from affiliates
|
—
|
|
|
—
|
|
|
22
|
|
|
—
|
|
|
—
|
|
|
22
|
|
||||||
Inventories
|
—
|
|
|
—
|
|
|
1,566
|
|
|
—
|
|
|
—
|
|
|
1,566
|
|
||||||
Other current assets
|
—
|
|
|
—
|
|
|
1,275
|
|
|
628
|
|
|
—
|
|
|
1,903
|
|
||||||
Total current assets
|
74
|
|
|
1
|
|
|
7,898
|
|
|
942
|
|
|
—
|
|
|
8,915
|
|
||||||
Property and equipment, net
(1)
|
—
|
|
|
—
|
|
|
21,890
|
|
|
306
|
|
|
—
|
|
|
22,196
|
|
||||||
Goodwill
|
—
|
|
|
—
|
|
|
1,683
|
|
|
—
|
|
|
—
|
|
|
1,683
|
|
||||||
Spectrum licenses
|
—
|
|
|
—
|
|
|
35,366
|
|
|
—
|
|
|
—
|
|
|
35,366
|
|
||||||
Other intangible assets, net
|
—
|
|
|
—
|
|
|
217
|
|
|
—
|
|
|
—
|
|
|
217
|
|
||||||
Investments in subsidiaries, net
|
22,534
|
|
|
40,988
|
|
|
—
|
|
|
—
|
|
|
(63,522
|
)
|
|
—
|
|
||||||
Intercompany receivables and note receivables
|
—
|
|
|
8,503
|
|
|
—
|
|
|
—
|
|
|
(8,503
|
)
|
|
—
|
|
||||||
Equipment installment plan receivables due after one year, net
|
—
|
|
|
—
|
|
|
1,274
|
|
|
—
|
|
|
—
|
|
|
1,274
|
|
||||||
Other assets
|
—
|
|
|
2
|
|
|
814
|
|
|
236
|
|
|
(140
|
)
|
|
912
|
|
||||||
Total assets
|
$
|
22,608
|
|
|
$
|
49,494
|
|
|
$
|
69,142
|
|
|
$
|
1,484
|
|
|
$
|
(72,165
|
)
|
|
$
|
70,563
|
|
Liabilities and Stockholders' Equity
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Current liabilities
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Accounts payable and accrued liabilities
|
$
|
—
|
|
|
$
|
253
|
|
|
$
|
8,014
|
|
|
$
|
261
|
|
|
$
|
—
|
|
|
$
|
8,528
|
|
Payables to affiliates
|
—
|
|
|
146
|
|
|
36
|
|
|
—
|
|
|
—
|
|
|
182
|
|
||||||
Short-term debt
|
—
|
|
|
999
|
|
|
613
|
|
|
—
|
|
|
—
|
|
|
1,612
|
|
||||||
Deferred revenue
|
—
|
|
|
—
|
|
|
779
|
|
|
—
|
|
|
—
|
|
|
779
|
|
||||||
Other current liabilities
|
17
|
|
|
—
|
|
|
192
|
|
|
205
|
|
|
—
|
|
|
414
|
|
||||||
Total current liabilities
|
17
|
|
|
1,398
|
|
|
9,634
|
|
|
466
|
|
|
—
|
|
|
11,515
|
|
||||||
Long-term debt
|
—
|
|
|
10,911
|
|
|
1,210
|
|
|
—
|
|
|
—
|
|
|
12,121
|
|
||||||
Long-term debt to affiliates
|
—
|
|
|
14,586
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
14,586
|
|
||||||
Tower obligations
(1)
|
—
|
|
|
—
|
|
|
392
|
|
|
2,198
|
|
|
—
|
|
|
2,590
|
|
||||||
Deferred tax liabilities
|
—
|
|
|
—
|
|
|
3,677
|
|
|
—
|
|
|
(140
|
)
|
|
3,537
|
|
||||||
Deferred rent expense
|
—
|
|
|
—
|
|
|
2,720
|
|
|
—
|
|
|
—
|
|
|
2,720
|
|
||||||
Negative carrying value of subsidiaries, net
|
—
|
|
|
—
|
|
|
629
|
|
|
—
|
|
|
(629
|
)
|
|
—
|
|
||||||
Intercompany payables and debt
|
32
|
|
|
—
|
|
|
8,201
|
|
|
270
|
|
|
(8,503
|
)
|
|
—
|
|
||||||
Other long-term liabilities
|
—
|
|
|
65
|
|
|
866
|
|
|
4
|
|
|
—
|
|
|
935
|
|
||||||
Total long-term liabilities
|
32
|
|
|
25,562
|
|
|
17,695
|
|
|
2,472
|
|
|
(9,272
|
)
|
|
36,489
|
|
||||||
Total stockholders' equity (deficit)
|
22,559
|
|
|
22,534
|
|
|
41,813
|
|
|
(1,454
|
)
|
|
(62,893
|
)
|
|
22,559
|
|
||||||
Total liabilities and stockholders' equity
|
$
|
22,608
|
|
|
$
|
49,494
|
|
|
$
|
69,142
|
|
|
$
|
1,484
|
|
|
$
|
(72,165
|
)
|
|
$
|
70,563
|
|
(1)
|
Assets and liabilities for Non-Guarantor Subsidiaries are primarily included in VIEs related to the 2012 Tower Transaction. See
Note 9 – Tower Obligations
for further information.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(in millions)
|
Parent
|
|
Issuer
|
|
Guarantor Subsidiaries
|
|
Non-Guarantor Subsidiaries
|
|
Consolidating and Eliminating Adjustments
|
|
Consolidated
|
||||||||||||
Revenues
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Service revenues
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
30,631
|
|
|
$
|
2,339
|
|
|
$
|
(978
|
)
|
|
$
|
31,992
|
|
Equipment revenues
|
—
|
|
|
—
|
|
|
10,208
|
|
|
2
|
|
|
(201
|
)
|
|
10,009
|
|
||||||
Other revenues
|
—
|
|
|
29
|
|
|
1,113
|
|
|
228
|
|
|
(61
|
)
|
|
1,309
|
|
||||||
Total revenues
|
—
|
|
|
29
|
|
|
41,952
|
|
|
2,569
|
|
|
(1,240
|
)
|
|
43,310
|
|
||||||
Operating expenses
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Cost of services, exclusive of depreciation and amortization shown separately below
|
—
|
|
|
—
|
|
|
6,257
|
|
|
50
|
|
|
—
|
|
|
6,307
|
|
||||||
Cost of equipment sales
|
—
|
|
|
—
|
|
|
11,238
|
|
|
1,011
|
|
|
(202
|
)
|
|
12,047
|
|
||||||
Selling, general and administrative
|
—
|
|
|
11
|
|
|
13,203
|
|
|
985
|
|
|
(1,038
|
)
|
|
13,161
|
|
||||||
Depreciation and amortization
|
—
|
|
|
—
|
|
|
6,396
|
|
|
90
|
|
|
—
|
|
|
6,486
|
|
||||||
Gains on disposal of spectrum licenses
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Total operating expense
|
—
|
|
|
11
|
|
|
37,094
|
|
|
2,136
|
|
|
(1,240
|
)
|
|
38,001
|
|
||||||
Operating (loss) income
|
—
|
|
|
18
|
|
|
4,858
|
|
|
433
|
|
|
—
|
|
|
5,309
|
|
||||||
Other income (expense)
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Interest expense
|
—
|
|
|
(528
|
)
|
|
(114
|
)
|
|
(193
|
)
|
|
—
|
|
|
(835
|
)
|
||||||
Interest expense to affiliates
|
—
|
|
|
(522
|
)
|
|
(21
|
)
|
|
—
|
|
|
21
|
|
|
(522
|
)
|
||||||
Interest income
|
—
|
|
|
23
|
|
|
16
|
|
|
1
|
|
|
(21
|
)
|
|
19
|
|
||||||
Other (expense) income, net
|
—
|
|
|
(87
|
)
|
|
33
|
|
|
—
|
|
|
—
|
|
|
(54
|
)
|
||||||
Total other (expense) income, net
|
—
|
|
|
(1,114
|
)
|
|
(86
|
)
|
|
(192
|
)
|
|
—
|
|
|
(1,392
|
)
|
||||||
Income (loss) before income taxes
|
—
|
|
|
(1,096
|
)
|
|
4,772
|
|
|
241
|
|
|
—
|
|
|
3,917
|
|
||||||
Income tax expense
|
—
|
|
|
—
|
|
|
(981
|
)
|
|
(48
|
)
|
|
—
|
|
|
(1,029
|
)
|
||||||
Earnings of subsidiaries
|
2,888
|
|
|
3,984
|
|
|
32
|
|
|
—
|
|
|
(6,904
|
)
|
|
—
|
|
||||||
Net income
|
2,888
|
|
|
2,888
|
|
|
3,823
|
|
|
193
|
|
|
(6,904
|
)
|
|
2,888
|
|
||||||
Dividends on preferred stock
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Net income attributable to common stockholders
|
$
|
2,888
|
|
|
$
|
2,888
|
|
|
$
|
3,823
|
|
|
$
|
193
|
|
|
$
|
(6,904
|
)
|
|
$
|
2,888
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Net income
|
$
|
2,888
|
|
|
$
|
2,888
|
|
|
$
|
3,823
|
|
|
$
|
193
|
|
|
$
|
(6,904
|
)
|
|
$
|
2,888
|
|
Other comprehensive income, net of tax
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Other comprehensive income, net of tax
|
(332
|
)
|
|
(332
|
)
|
|
116
|
|
|
—
|
|
|
216
|
|
|
(332
|
)
|
||||||
Total comprehensive income
|
$
|
2,556
|
|
|
$
|
2,556
|
|
|
$
|
3,939
|
|
|
$
|
193
|
|
|
$
|
(6,688
|
)
|
|
$
|
2,556
|
|
(in millions)
|
Parent
|
|
Issuer
|
|
Guarantor Subsidiaries
|
|
Non-Guarantor Subsidiaries
|
|
Consolidating and Eliminating Adjustments
|
|
Consolidated
|
||||||||||||
Revenues
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Service revenues
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
28,894
|
|
|
$
|
2,113
|
|
|
$
|
(847
|
)
|
|
$
|
30,160
|
|
Equipment revenues
|
—
|
|
|
—
|
|
|
9,620
|
|
|
—
|
|
|
(245
|
)
|
|
9,375
|
|
||||||
Other revenues
|
—
|
|
|
3
|
|
|
879
|
|
|
212
|
|
|
(25
|
)
|
|
1,069
|
|
||||||
Total revenues
|
—
|
|
|
3
|
|
|
39,393
|
|
|
2,325
|
|
|
(1,117
|
)
|
|
40,604
|
|
||||||
Operating expenses
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Cost of services, exclusive of depreciation and amortization shown separately below
|
—
|
|
|
—
|
|
|
6,076
|
|
|
24
|
|
|
—
|
|
|
6,100
|
|
||||||
Cost of equipment sales
|
—
|
|
|
—
|
|
|
10,849
|
|
|
1,003
|
|
|
(244
|
)
|
|
11,608
|
|
||||||
Selling, general and administrative
|
—
|
|
|
—
|
|
|
12,276
|
|
|
856
|
|
|
(873
|
)
|
|
12,259
|
|
||||||
Depreciation and amortization
|
—
|
|
|
—
|
|
|
5,914
|
|
|
70
|
|
|
—
|
|
|
5,984
|
|
||||||
Gains on disposal of spectrum licenses
|
—
|
|
|
—
|
|
|
(235
|
)
|
|
—
|
|
|
—
|
|
|
(235
|
)
|
||||||
Total operating expenses
|
—
|
|
|
—
|
|
|
34,880
|
|
|
1,953
|
|
|
(1,117
|
)
|
|
35,716
|
|
||||||
Operating income
|
—
|
|
|
3
|
|
|
4,513
|
|
|
372
|
|
|
—
|
|
|
4,888
|
|
||||||
Other income (expense)
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Interest expense
|
—
|
|
|
(811
|
)
|
|
(109
|
)
|
|
(191
|
)
|
|
—
|
|
|
(1,111
|
)
|
||||||
Interest expense to affiliates
|
—
|
|
|
(560
|
)
|
|
(23
|
)
|
|
—
|
|
|
23
|
|
|
(560
|
)
|
||||||
Interest income
|
1
|
|
|
29
|
|
|
10
|
|
|
—
|
|
|
(23
|
)
|
|
17
|
|
||||||
Other income (expense), net
|
—
|
|
|
(88
|
)
|
|
16
|
|
|
(1
|
)
|
|
—
|
|
|
(73
|
)
|
||||||
Total other expense, net
|
1
|
|
|
(1,430
|
)
|
|
(106
|
)
|
|
(192
|
)
|
|
—
|
|
|
(1,727
|
)
|
||||||
Income (loss) before income taxes
|
1
|
|
|
(1,427
|
)
|
|
4,407
|
|
|
180
|
|
|
—
|
|
|
3,161
|
|
||||||
Income tax expense
|
—
|
|
|
—
|
|
|
1,527
|
|
|
(152
|
)
|
|
—
|
|
|
1,375
|
|
||||||
Earnings (loss) of subsidiaries
|
4,535
|
|
|
5,962
|
|
|
(57
|
)
|
|
—
|
|
|
(10,440
|
)
|
|
—
|
|
||||||
Net income
|
4,536
|
|
|
4,535
|
|
|
5,877
|
|
|
28
|
|
|
(10,440
|
)
|
|
4,536
|
|
||||||
Dividends on preferred stock
|
(55
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(55
|
)
|
||||||
Net income attributable to common stockholders
|
$
|
4,481
|
|
|
$
|
4,535
|
|
|
$
|
5,877
|
|
|
$
|
28
|
|
|
$
|
(10,440
|
)
|
|
$
|
4,481
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Net income
|
$
|
4,536
|
|
|
$
|
4,535
|
|
|
$
|
5,877
|
|
|
$
|
28
|
|
|
$
|
(10,440
|
)
|
|
$
|
4,536
|
|
Other comprehensive income, net of tax
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Other comprehensive income, net of tax
|
7
|
|
|
7
|
|
|
7
|
|
|
—
|
|
|
(14
|
)
|
|
7
|
|
||||||
Total comprehensive income
|
$
|
4,543
|
|
|
$
|
4,542
|
|
|
$
|
5,884
|
|
|
$
|
28
|
|
|
$
|
(10,454
|
)
|
|
$
|
4,543
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(in millions)
|
Parent
|
|
Issuer
|
|
Guarantor Subsidiaries
|
|
Non-Guarantor Subsidiaries
|
|
Consolidating and Eliminating Adjustments
|
|
Consolidated
|
||||||||||||
Revenues
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Service revenues
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
26,613
|
|
|
$
|
2,023
|
|
|
$
|
(792
|
)
|
|
$
|
27,844
|
|
Equipment revenues
|
—
|
|
|
—
|
|
|
9,145
|
|
|
—
|
|
|
(418
|
)
|
|
8,727
|
|
||||||
Other revenues
|
—
|
|
|
3
|
|
|
739
|
|
|
195
|
|
|
(18
|
)
|
|
919
|
|
||||||
Total revenues
|
—
|
|
|
3
|
|
|
36,497
|
|
|
2,218
|
|
|
(1,228
|
)
|
|
37,490
|
|
||||||
Operating expenses
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Cost of services, exclusive of depreciation and amortization shown separately below
|
—
|
|
|
—
|
|
|
5,707
|
|
|
24
|
|
|
—
|
|
|
5,731
|
|
||||||
Cost of equipment sales
|
—
|
|
|
—
|
|
|
10,209
|
|
|
1,027
|
|
|
(417
|
)
|
|
10,819
|
|
||||||
Selling, general and administrative
|
—
|
|
|
—
|
|
|
11,321
|
|
|
868
|
|
|
(811
|
)
|
|
11,378
|
|
||||||
Depreciation and amortization
|
—
|
|
|
—
|
|
|
6,165
|
|
|
78
|
|
|
—
|
|
|
6,243
|
|
||||||
Cost of MetroPCS business combination
|
—
|
|
|
—
|
|
|
104
|
|
|
—
|
|
|
—
|
|
|
104
|
|
||||||
Gains on disposal of spectrum licenses
|
—
|
|
|
—
|
|
|
(835
|
)
|
|
—
|
|
|
—
|
|
|
(835
|
)
|
||||||
Total operating expenses
|
—
|
|
|
—
|
|
|
32,671
|
|
|
1,997
|
|
|
(1,228
|
)
|
|
33,440
|
|
||||||
Operating income
|
—
|
|
|
3
|
|
|
3,826
|
|
|
221
|
|
|
—
|
|
|
4,050
|
|
||||||
Other income (expense)
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Interest expense
|
—
|
|
|
(1,147
|
)
|
|
(82
|
)
|
|
(189
|
)
|
|
—
|
|
|
(1,418
|
)
|
||||||
Interest expense to affiliates
|
—
|
|
|
(312
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(312
|
)
|
||||||
Interest income
|
—
|
|
|
31
|
|
|
(18
|
)
|
|
—
|
|
|
—
|
|
|
13
|
|
||||||
Other income (expense), net
|
—
|
|
|
2
|
|
|
(8
|
)
|
|
—
|
|
|
—
|
|
|
(6
|
)
|
||||||
Total other expense, net
|
—
|
|
|
(1,426
|
)
|
|
(108
|
)
|
|
(189
|
)
|
|
—
|
|
|
(1,723
|
)
|
||||||
Income (loss) before income taxes
|
—
|
|
|
(1,423
|
)
|
|
3,718
|
|
|
32
|
|
|
—
|
|
|
2,327
|
|
||||||
Income tax expense
|
—
|
|
|
—
|
|
|
(857
|
)
|
|
(10
|
)
|
|
—
|
|
|
(867
|
)
|
||||||
Earnings (loss) of subsidiaries
|
1,460
|
|
|
2,883
|
|
|
(17
|
)
|
|
—
|
|
|
(4,326
|
)
|
|
—
|
|
||||||
Net income
|
1,460
|
|
|
1,460
|
|
|
2,844
|
|
|
22
|
|
|
(4,326
|
)
|
|
1,460
|
|
||||||
Dividends on preferred stock
|
(55
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(55
|
)
|
||||||
Net income attributable to common stockholders
|
$
|
1,405
|
|
|
$
|
1,460
|
|
|
$
|
2,844
|
|
|
$
|
22
|
|
|
$
|
(4,326
|
)
|
|
$
|
1,405
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Net income
|
$
|
1,460
|
|
|
$
|
1,460
|
|
|
$
|
2,844
|
|
|
$
|
22
|
|
|
$
|
(4,326
|
)
|
|
$
|
1,460
|
|
Other comprehensive income, net of tax
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Other comprehensive income, net of tax
|
2
|
|
|
2
|
|
|
2
|
|
|
2
|
|
|
(6
|
)
|
|
2
|
|
||||||
Total comprehensive income
|
$
|
1,462
|
|
|
$
|
1,462
|
|
|
$
|
2,846
|
|
|
$
|
24
|
|
|
$
|
(4,332
|
)
|
|
$
|
1,462
|
|
(in millions)
|
Parent
|
|
Issuer
|
|
Guarantor Subsidiaries
|
|
Non-Guarantor Subsidiaries
|
|
Consolidating and Eliminating Adjustments
|
|
Consolidated
|
||||||||||||
Operating activities
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Net cash (used in) provided by operating activities
|
$
|
—
|
|
|
$
|
(1,254
|
)
|
|
$
|
10,483
|
|
|
$
|
(5,110
|
)
|
|
$
|
(220
|
)
|
|
$
|
3,899
|
|
Investing activities
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Purchases of property and equipment
|
—
|
|
|
—
|
|
|
(5,505
|
)
|
|
(36
|
)
|
|
—
|
|
|
(5,541
|
)
|
||||||
Purchases of spectrum licenses and other intangible assets
|
—
|
|
|
—
|
|
|
(127
|
)
|
|
—
|
|
|
—
|
|
|
(127
|
)
|
||||||
Proceeds related to beneficial interests in securitization transactions
|
—
|
|
|
—
|
|
|
53
|
|
|
5,353
|
|
|
—
|
|
|
5,406
|
|
||||||
Acquisition of companies, net of cash acquired
|
—
|
|
|
—
|
|
|
(338
|
)
|
|
—
|
|
|
—
|
|
|
(338
|
)
|
||||||
Equity investment in subsidiary
|
—
|
|
|
—
|
|
|
(43
|
)
|
|
—
|
|
|
43
|
|
|
—
|
|
||||||
Other, net
|
—
|
|
|
(7
|
)
|
|
28
|
|
|
—
|
|
|
—
|
|
|
21
|
|
||||||
Net cash (used in) provided by investing activities
|
—
|
|
|
(7
|
)
|
|
(5,932
|
)
|
|
5,317
|
|
|
43
|
|
|
(579
|
)
|
||||||
Financing activities
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Proceeds from issuance of long-term debt
|
—
|
|
|
2,494
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
2,494
|
|
||||||
Proceeds from borrowing on revolving credit facility, net
|
—
|
|
|
6,265
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
6,265
|
|
||||||
Repayments of revolving credit facility
|
—
|
|
|
—
|
|
|
(6,265
|
)
|
|
—
|
|
|
—
|
|
|
(6,265
|
)
|
||||||
Repayments of capital lease obligations
|
—
|
|
|
—
|
|
|
(698
|
)
|
|
(2
|
)
|
|
—
|
|
|
(700
|
)
|
||||||
Repayments of short-term debt for purchases of inventory, property and equipment, net
|
—
|
|
|
—
|
|
|
(300
|
)
|
|
—
|
|
|
—
|
|
|
(300
|
)
|
||||||
Repayments of long-term debt
|
—
|
|
|
—
|
|
|
(3,349
|
)
|
|
—
|
|
|
—
|
|
|
(3,349
|
)
|
||||||
Repurchases of common stock
|
(1,071
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(1,071
|
)
|
||||||
Intercompany advances, net
|
995
|
|
|
(7,498
|
)
|
|
6,468
|
|
|
35
|
|
|
—
|
|
|
—
|
|
||||||
Equity investment from parent
|
—
|
|
|
—
|
|
|
—
|
|
|
43
|
|
|
(43
|
)
|
|
—
|
|
||||||
Tax withholdings on share-based awards
|
—
|
|
|
—
|
|
|
(146
|
)
|
|
—
|
|
|
—
|
|
|
(146
|
)
|
||||||
Cash payments for debt prepayment or debt extinguishment costs
|
—
|
|
|
—
|
|
|
(212
|
)
|
|
—
|
|
|
—
|
|
|
(212
|
)
|
||||||
Intercompany dividend paid
|
—
|
|
|
—
|
|
|
—
|
|
|
(220
|
)
|
|
220
|
|
|
—
|
|
||||||
Other, net
|
4
|
|
|
—
|
|
|
(56
|
)
|
|
—
|
|
|
—
|
|
|
(52
|
)
|
||||||
Net cash (used in) provided by financing activities
|
(72
|
)
|
|
1,261
|
|
|
(4,558
|
)
|
|
(144
|
)
|
|
177
|
|
|
(3,336
|
)
|
||||||
Change in cash and cash equivalents
|
(72
|
)
|
|
—
|
|
|
(7
|
)
|
|
63
|
|
|
—
|
|
|
(16
|
)
|
||||||
Cash and cash equivalents
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Beginning of period
|
74
|
|
|
1
|
|
|
1,086
|
|
|
58
|
|
|
—
|
|
|
1,219
|
|
||||||
End of period
|
$
|
2
|
|
|
$
|
1
|
|
|
$
|
1,079
|
|
|
$
|
121
|
|
|
$
|
—
|
|
|
$
|
1,203
|
|
(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
|
|
|
$
|
(1,613
|
)
|
|
$
|
9,761
|
|
|
$
|
(4,218
|
)
|
|
$
|
(100
|
)
|
|
$
|
3,831
|
|
Investing activities
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Purchases of property and equipment
|
—
|
|
|
—
|
|
|
(5,237
|
)
|
|
—
|
|
|
—
|
|
|
(5,237
|
)
|
||||||
Purchases of spectrum licenses and other intangible assets
|
—
|
|
|
—
|
|
|
(5,828
|
)
|
|
—
|
|
|
—
|
|
|
(5,828
|
)
|
||||||
Proceeds related to beneficial interests in securitization transactions
|
—
|
|
|
—
|
|
|
43
|
|
|
4,276
|
|
|
—
|
|
|
4,319
|
|
||||||
Equity investment in subsidiary
|
(308
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
308
|
|
|
—
|
|
||||||
Other, net
|
—
|
|
|
—
|
|
|
1
|
|
|
—
|
|
|
—
|
|
|
1
|
|
||||||
Net cash (used in) provided by investing activities
|
(308
|
)
|
|
—
|
|
|
(11,021
|
)
|
|
4,276
|
|
|
308
|
|
|
(6,745
|
)
|
||||||
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
|
—
|
|
|
—
|
|
|
(486
|
)
|
|
—
|
|
|
—
|
|
|
(486
|
)
|
||||||
Repayments of short-term debt for purchases of inventory, property and equipment, net
|
—
|
|
|
—
|
|
|
(300
|
)
|
|
—
|
|
|
—
|
|
|
(300
|
)
|
||||||
Repayments of long-term debt
|
—
|
|
|
—
|
|
|
(10,230
|
)
|
|
—
|
|
|
—
|
|
|
(10,230
|
)
|
||||||
Repurchases of common stock
|
(427
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(427
|
)
|
||||||
Intercompany advances, net
|
484
|
|
|
(14,817
|
)
|
|
14,300
|
|
|
33
|
|
|
—
|
|
|
—
|
|
||||||
Equity investment from parent
|
—
|
|
|
308
|
|
|
—
|
|
|
—
|
|
|
(308
|
)
|
|
—
|
|
||||||
Tax withholdings on share-based awards
|
—
|
|
|
—
|
|
|
(166
|
)
|
|
—
|
|
|
—
|
|
|
(166
|
)
|
||||||
Dividends on preferred stock
|
(55
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(55
|
)
|
||||||
Cash payments for debt prepayment or debt extinguishment costs
|
—
|
|
|
—
|
|
|
(188
|
)
|
|
—
|
|
|
—
|
|
|
(188
|
)
|
||||||
Intercompany dividend paid
|
—
|
|
|
—
|
|
|
—
|
|
|
(100
|
)
|
|
100
|
|
|
—
|
|
||||||
Other, net
|
21
|
|
|
—
|
|
|
(16
|
)
|
|
—
|
|
|
—
|
|
|
5
|
|
||||||
Net cash provided by (used in) financing activities
|
23
|
|
|
(1,119
|
)
|
|
4
|
|
|
(67
|
)
|
|
(208
|
)
|
|
(1,367
|
)
|
||||||
Change in cash and cash equivalents
|
(284
|
)
|
|
(2,732
|
)
|
|
(1,256
|
)
|
|
(9
|
)
|
|
—
|
|
|
(4,281
|
)
|
||||||
Cash and cash equivalents
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Beginning of period
|
358
|
|
|
2,733
|
|
|
2,342
|
|
|
67
|
|
|
—
|
|
|
5,500
|
|
||||||
End of period
|
$
|
74
|
|
|
$
|
1
|
|
|
$
|
1,086
|
|
|
$
|
58
|
|
|
$
|
—
|
|
|
$
|
1,219
|
|
(in millions)
|
Parent
|
|
Issuer
|
|
Guarantor Subsidiaries
|
|
Non-Guarantor Subsidiaries
|
|
Consolidating and Eliminating Adjustments
|
|
Consolidated
|
|||||||||||||
Operating activities
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Net cash provided by (used in) operating activities
|
$
|
6
|
|
|
$
|
(1,335
|
)
|
|
$
|
7,516
|
|
|
$
|
(3,298
|
)
|
|
$
|
(110
|
)
|
|
$
|
2,779
|
|
|
Investing activities
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Purchases of property and equipment
|
—
|
|
|
—
|
|
|
(4,702
|
)
|
|
—
|
|
|
—
|
|
|
(4,702
|
)
|
|||||||
Purchases of spectrum licenses and other intangible assets, including deposits
|
—
|
|
|
—
|
|
|
(3,968
|
)
|
|
—
|
|
|
—
|
|
|
(3,968
|
)
|
|||||||
Proceeds related to beneficial interests in securitization transactions
|
—
|
|
|
—
|
|
|
25
|
|
|
3,331
|
|
|
—
|
|
—
|
|
3,356
|
|
||||||
Sales of short-term investments
|
—
|
|
|
2,000
|
|
|
998
|
|
|
—
|
|
|
—
|
|
—
|
|
2,998
|
|
||||||
Other, net
|
—
|
|
|
—
|
|
|
(8
|
)
|
|
—
|
|
|
—
|
|
|
(8
|
)
|
|||||||
Net cash provided by (used in) investing activities
|
—
|
|
|
2,000
|
|
|
(7,655
|
)
|
|
3,331
|
|
|
—
|
|
|
(2,324
|
)
|
|||||||
Financing activities
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Proceeds from issuance of long-term debt
|
—
|
|
|
997
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
997
|
|
|||||||
Repayments of capital lease obligations
|
—
|
|
|
—
|
|
|
(205
|
)
|
|
—
|
|
|
—
|
|
|
(205
|
)
|
|||||||
Repayments of short-term debt for purchases of inventory, property and equipment, net
|
—
|
|
|
—
|
|
|
(150
|
)
|
|
—
|
|
|
—
|
|
|
(150
|
)
|
|||||||
Repayments of long-term debt
|
—
|
|
|
—
|
|
|
(20
|
)
|
|
—
|
|
|
—
|
|
|
(20
|
)
|
|||||||
Intercompany advances, net
|
—
|
|
|
(696
|
)
|
|
625
|
|
|
71
|
|
|
—
|
|
|
—
|
|
|||||||
Tax withholdings on share-based awards
|
—
|
|
|
—
|
|
|
(121
|
)
|
|
—
|
|
|
—
|
|
|
(121
|
)
|
|||||||
Dividends on preferred stock
|
(55
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(55
|
)
|
|||||||
Intercompany dividend paid
|
—
|
|
|
—
|
|
|
—
|
|
|
(110
|
)
|
|
110
|
|
|
—
|
|
|||||||
Other, net
|
29
|
|
|
—
|
|
|
(12
|
)
|
|
—
|
|
|
—
|
|
|
17
|
|
|||||||
Net cash (used in) provided by financing activities
|
(26
|
)
|
|
301
|
|
|
117
|
|
|
(39
|
)
|
|
110
|
|
|
463
|
|
|||||||
Change in cash and cash equivalents
|
(20
|
)
|
|
966
|
|
|
(22
|
)
|
|
(6
|
)
|
|
—
|
|
|
918
|
|
|||||||
Cash and cash equivalents
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Beginning of period
|
378
|
|
|
1,767
|
|
|
2,364
|
|
|
73
|
|
|
—
|
|
|
4,582
|
|
|||||||
End of period
|
$
|
358
|
|
|
$
|
2,733
|
|
|
$
|
2,342
|
|
|
$
|
67
|
|
|
$
|
—
|
|
|
$
|
5,500
|
|
(in millions, except share and per share amounts)
|
First Quarter
|
|
Second Quarter
|
|
Third Quarter
|
|
Fourth Quarter
|
|
Full Year
|
||||||||||
2018
|
|
|
|
|
|
|
|
|
|
||||||||||
Total revenues
|
$
|
10,455
|
|
|
$
|
10,571
|
|
|
$
|
10,839
|
|
|
$
|
11,445
|
|
|
$
|
43,310
|
|
Operating income
|
1,282
|
|
|
1,450
|
|
|
1,440
|
|
|
1,137
|
|
|
5,309
|
|
|||||
Net income
|
671
|
|
|
782
|
|
|
795
|
|
|
640
|
|
|
2,888
|
|
|||||
Net income attributable to common stockholders
|
671
|
|
|
782
|
|
|
795
|
|
|
640
|
|
|
2,888
|
|
|||||
Earnings per share
|
|
|
|
|
|
|
|
|
|
||||||||||
Basic
|
$
|
0.78
|
|
|
$
|
0.92
|
|
|
$
|
0.94
|
|
|
$
|
0.75
|
|
|
$
|
3.40
|
|
Diluted
|
0.78
|
|
|
0.92
|
|
|
0.93
|
|
|
0.75
|
|
|
3.36
|
|
|||||
Weighted average shares outstanding
|
|
|
|
|
|
|
|
|
|
||||||||||
Basic
|
855,222,664
|
|
|
847,660,488
|
|
|
847,087,120
|
|
|
849,102,785
|
|
|
849,744,152
|
|
|||||
Diluted
|
862,244,084
|
|
|
852,040,670
|
|
|
853,852,764
|
|
|
856,344,347
|
|
|
858,290,174
|
|
|||||
2017
|
|
|
|
|
|
|
|
|
|
||||||||||
Total revenues
|
$
|
9,613
|
|
|
$
|
10,213
|
|
|
$
|
10,019
|
|
|
$
|
10,759
|
|
|
$
|
40,604
|
|
Operating income
|
1,037
|
|
|
1,416
|
|
|
1,323
|
|
|
1,112
|
|
|
4,888
|
|
|||||
Net income
|
698
|
|
|
581
|
|
|
550
|
|
|
2,707
|
|
|
4,536
|
|
|||||
Dividends on preferred stock
|
(14
|
)
|
|
(14
|
)
|
|
(13
|
)
|
|
(14
|
)
|
|
(55
|
)
|
|||||
Net income attributable to common stockholders
|
684
|
|
|
567
|
|
|
537
|
|
|
2,693
|
|
|
4,481
|
|
|||||
Earnings per share
|
|
|
|
|
|
|
|
|
|
||||||||||
Basic
|
$
|
0.83
|
|
|
$
|
0.68
|
|
|
$
|
0.65
|
|
|
$
|
3.22
|
|
|
$
|
5.39
|
|
Diluted
|
0.80
|
|
|
0.67
|
|
|
0.63
|
|
|
3.11
|
|
|
5.20
|
|
|||||
Weighted average shares outstanding
|
|
|
|
|
|
|
|
|
|
||||||||||
Basic
|
827,723,034
|
|
|
830,971,528
|
|
|
831,189,779
|
|
|
837,416,683
|
|
|
831,850,073
|
|
|||||
Diluted
|
869,395,984
|
|
|
870,457,181
|
|
|
871,420,065
|
|
|
871,501,578
|
|
|
871,787,450
|
|
|||||
Net income includes:
|
|
|
|
|
|
|
|
|
|
||||||||||
Gains on disposal of spectrum licenses
|
$
|
(37
|
)
|
|
$
|
(1
|
)
|
|
$
|
(29
|
)
|
|
$
|
(168
|
)
|
|
$
|
(235
|
)
|
|
|
|
|
Incorporated by Reference
|
|
|
||||
Exhibit No.
|
|
Exhibit Description
|
|
Form
|
|
Date of First Filing
|
|
Exhibit Number
|
|
Filed Herein
|
2.1
|
|
|
8-K
|
|
10/3/2012
|
|
2.1
|
|
|
|
2.2
|
|
|
8-K
|
|
12/7/2012
|
|
2.1
|
|
|
|
2.3
|
|
|
8-K
|
|
4/15/2013
|
|
2.1
|
|
|
|
2.4
|
|
|
8-K
|
|
04/30/2018
|
|
2.1
|
|
|
|
3.1
|
|
|
8-K
|
|
5/2/2013
|
|
3.1
|
|
|
|
3.2
|
|
|
8-K
|
|
5/2/2013
|
|
3.2
|
|
|
|
3.3
|
|
|
8-K
|
|
12/15/2014
|
|
3.1
|
|
|
|
3.4
|
|
|
|
8-K
|
|
2/22/2018
|
|
3.1
|
|
|
4.1
|
|
|
8-K
|
|
5/2/2013
|
|
4.1
|
|
|
|
4.2
|
|
|
8-K
|
|
5/2/2013
|
|
4.2
|
|
|
|
4.3
|
|
|
8-K
|
|
5/2/2013
|
|
4.3
|
|
|
|
4.4
|
|
|
8-K
|
|
5/2/2013
|
|
4.4
|
|
|
|
4.5
|
|
|
8-K
|
|
5/2/2013
|
|
4.5
|
|
|
|
4.6
|
|
|
8-K
|
|
5/2/2013
|
|
4.6
|
|
|
|
4.7
|
|
|
8-K
|
|
5/2/2013
|
|
4.7
|
|
|
|
4.8
|
|
|
8-K
|
|
5/2/2013
|
|
4.8
|
|
|
|
4.9
|
|
|
8-K
|
|
5/2/2013
|
|
4.9
|
|
|
|
|
|
|
Incorporated by Reference
|
|
|
||||
Exhibit No.
|
|
Exhibit Description
|
|
Form
|
|
Date of First Filing
|
|
Exhibit Number
|
|
Filed Herein
|
4.10
|
|
|
8-K
|
|
5/2/2013
|
|
4.10
|
|
|
|
4.11
|
|
|
8-K
|
|
5/2/2013
|
|
4.11
|
|
|
|
4.12
|
|
|
8-K
|
|
5/2/2013
|
|
4.12
|
|
|
|
4.13
|
|
|
10-Q
|
|
8/8/2013
|
|
4.18
|
|
|
|
4.14
|
|
|
8-K
|
|
8/22/2013
|
|
4.1
|
|
|
|
4.15
|
|
|
8-K
|
|
11/22/2013
|
|
4.1
|
|
|
|
4.16
|
|
|
8-K
|
|
11/22/2013
|
|
4.2
|
|
|
|
4.17
|
|
|
10-Q
|
|
10/28/2014
|
|
4.3
|
|
|
|
4.18
|
|
|
8-K
|
|
9/5/2014
|
|
4.1
|
|
|
|
4.19
|
|
|
8-K
|
|
9/5/2014
|
|
4.2
|
|
|
|
4.20
|
|
|
10-Q
|
|
10/27/2015
|
|
4.3
|
|
|
|
4.21
|
|
|
8-K
|
|
11/5/2015
|
|
4.1
|
|
|
|
4.22
|
|
|
8-K
|
|
4/1/2016
|
|
4.1
|
|
|
|
4.23
|
|
|
10-Q
|
|
10/24/2016
|
|
4.3
|
|
|
|
|
|
|
Incorporated by Reference
|
|
|
||||
Exhibit No.
|
|
Exhibit Description
|
|
Form
|
|
Date of First Filing
|
|
Exhibit Number
|
|
Filed Herein
|
4.24
|
|
|
8-K
|
|
3/16/2017
|
|
4.1
|
|
|
|
4.25
|
|
|
8-K
|
|
3/16/2017
|
|
4.2
|
|
|
|
4.26
|
|
|
8-K
|
|
3/16/2017
|
|
4.3
|
|
|
|
4.27
|
|
|
8-K
|
|
4/28/2017
|
|
4.1
|
|
|
|
4.28
|
|
|
8-K
|
|
4/28/2017
|
|
4.2
|
|
|
|
4.29
|
|
|
8-K
|
|
4/28/2017
|
|
4.3
|
|
|
|
4.30
|
|
|
8-K
|
|
5/9/2017
|
|
4.1
|
|
|
|
4.31
|
|
|
8-K
|
|
5/9/2017
|
|
4.2
|
|
|
|
4.32
|
|
|
10-K
|
|
2/8/2018
|
|
4.56
|
|
|
|
4.33
|
|
|
8-K
|
|
1/25/2018
|
|
4.1
|
|
|
|
4.34
|
|
|
8-K
|
|
1/25/2018
|
|
4.2
|
|
|
|
4.35
|
|
|
8-K
|
|
5/2/2013
|
|
4.13
|
|
|
|
4.36
|
|
|
10-Q
|
|
5/1/2018
|
|
4.5
|
|
|
|
|
|
|
Incorporated by Reference
|
|
|
||||
Exhibit No.
|
|
Exhibit Description
|
|
Form
|
|
Date of First Filing
|
|
Exhibit Number
|
|
Filed Herein
|
4.37
|
|
|
8-K
|
|
5/4/2018
|
|
4.1
|
|
|
|
4.38
|
|
|
8-K
|
|
5/4/2018
|
|
4.2
|
|
|
|
4.39
|
|
|
8-K
|
|
5/21/2018
|
|
4.1
|
|
|
|
4.40
|
|
|
8-K
|
|
12/21/2018
|
|
4.1
|
|
|
|
4.41
|
|
|
|
|
|
|
|
|
X
|
|
10.1
|
|
|
10-Q
|
|
8/8/2013
|
|
10.1
|
|
|
|
10.2
|
|
|
10-Q
|
|
8/8/2013
|
|
10.2
|
|
|
|
10.3
|
|
|
|
|
|
|
|
|
X
|
|
10.4
|
|
|
10-Q
|
|
8/8/2013
|
|
10.3
|
|
|
|
10.5
|
|
|
10-Q
|
|
8/8/2013
|
|
10.4
|
|
|
|
10.6
|
|
|
10-Q
|
|
8/8/2013
|
|
10.5
|
|
|
|
10.7
|
|
|
|
|
|
|
|
|
|
X
|
|
|
|
|
Incorporated by Reference
|
|
|
||||
Exhibit No.
|
|
Exhibit Description
|
|
Form
|
|
Date of First Filing
|
|
Exhibit Number
|
|
Filed Herein
|
10.8
|
|
|
10-Q
|
|
8/8/2013
|
|
10.6
|
|
|
|
10.9
|
|
|
10-Q
|
|
8/8/2013
|
|
10.7
|
|
|
|
10.10
|
|
|
|
|
|
|
|
|
X
|
|
10.11
|
|
|
|
|
|
|
|
|
X
|
|
10.12
|
|
|
10-Q
|
|
8/8/2013
|
|
10.8
|
|
|
|
10.13
|
|
|
8-K
|
|
5/2/2013
|
|
10.1
|
|
|
|
10.14
|
|
|
10-Q
|
|
8/8/2013
|
|
10.10
|
|
|
|
10.15
|
|
|
8-K
|
|
5/2/2013
|
|
10.2
|
|
|
|
10.16
|
|
|
8-K
|
|
1/6/2014
|
|
10.1
|
|
|
|
10.17
|
|
|
8-K
|
|
1/6/2014
|
|
10.2
|
|
|
|
10.18
|
|
|
8-K
|
|
3/4/2014
|
|
10.1
|
|
|
|
|
|
|
Incorporated by Reference
|
|
|
||||
Exhibit No.
|
|
Exhibit Description
|
|
Form
|
|
Date of First Filing
|
|
Exhibit Number
|
|
Filed Herein
|
10.19
|
|
|
10-K
|
|
2/19/2015
|
|
10.55
|
|
|
|
10.20
|
|
|
10-Q
|
|
4/28/2015
|
|
10.5
|
|
|
|
10.21
|
|
|
8-K
|
|
3/4/2014
|
|
10.2
|
|
|
|
10.22
|
|
|
10-K
|
|
2/19/2015
|
|
10.56
|
|
|
|
10.23
|
|
|
10-Q
|
|
4/28/2015
|
|
10.6
|
|
|
|
10.24
|
|
|
10-K
|
|
2/14/2017
|
|
10.33
|
|
|
|
10.25
|
|
|
10-Q
|
|
7/20/2017
|
|
10.1
|
|
|
|
10.26
|
|
|
8-K
|
|
12/6/2016
|
|
10.1
|
|
|
|
10.27
|
|
|
10-Q
|
|
7/20/2017
|
|
10.2
|
|
|
|
10.28
|
|
|
10-K
|
|
2/8/2018
|
|
10.31
|
|
|
|
|
|
|
Incorporated by Reference
|
|
|
||||
Exhibit No.
|
|
Exhibit Description
|
|
Form
|
|
Date of First Filing
|
|
Exhibit Number
|
|
Filed Herein
|
10.29
|
|
|
10-Q
|
|
5/1/2018
|
|
10.13
|
|
|
|
10.30
|
|
|
|
|
|
|
|
|
X
|
|
10.31
|
|
|
8-K
|
|
11/12/2015
|
|
10.1
|
|
|
|
10.32
|
|
|
10-Q
|
|
4/24/2017
|
|
10.3
|
|
|
|
10.33
|
|
|
10-Q
|
|
4/24/2017
|
|
10.4
|
|
|
|
10.34
|
|
|
10-Q
|
|
4/24/2017
|
|
10.5
|
|
|
|
10.35
|
|
|
8-K
|
|
7/27/2017
|
|
10.1
|
|
|
|
10.36
|
|
|
8-K
|
|
3/30/2018
|
|
10.1
|
|
|
|
10.37
|
|
|
8-K
|
|
12/30/2016
|
|
10.3
|
|
|
|
10.38
|
|
|
8-K
|
|
1/25/2017
|
|
10.1
|
|
|
|
|
|
|
Incorporated by Reference
|
|
|
||||
Exhibit No.
|
|
Exhibit Description
|
|
Form
|
|
Date of First Filing
|
|
Exhibit Number
|
|
Filed Herein
|
10.39
|
|
|
10-Q
|
|
10/23/2017
|
|
10.2
|
|
|
|
10.40
|
|
|
|
10-Q
|
|
10/30/2018
|
|
10.2
|
|
|
10.41
|
|
|
10-Q
|
|
10/23/2017
|
|
10.3
|
|
|
|
10.42
|
|
|
|
10-K
|
|
2/8/2018
|
|
10.48
|
|
|
10.43
|
|
|
|
10-Q
|
|
5/1/2018
|
|
10.14
|
|
|
10.44
|
|
|
10-Q
|
|
10/30/2018
|
|
10.1
|
|
|
|
10.45
|
|
|
|
|
|
|
|
|
X
|
|
10.46
|
|
|
8-K
|
|
3/7/2016
|
|
1.1
|
|
|
|
10.47
|
|
|
8-K
|
|
11/2/2016
|
|
10.1
|
|
|
|
10.48
|
|
|
8-K
|
|
4/26/2016
|
|
1.1
|
|
|
|
10.49
|
|
|
8-K
|
|
11/2/2016
|
|
10.2
|
|
|
|
|
|
|
Incorporated by Reference
|
|
|
||||
Exhibit No.
|
|
Exhibit Description
|
|
Form
|
|
Date of First Filing
|
|
Exhibit Number
|
|
Filed Herein
|
10.50
|
|
|
8-K
|
|
4/29/2016
|
|
1.1
|
|
|
|
10.51
|
|
|
8-K
|
|
11/2/2016
|
|
10.3
|
|
|
|
10.52
|
|
|
8-K
|
|
3/16/2017
|
|
10.1
|
|
|
|
10.53
|
|
|
8-K
|
|
1/25/2018
|
|
10.1
|
|
|
|
10.54
|
|
|
8-K
|
|
12/30/2016
|
|
10.1
|
|
|
|
10.55
|
|
|
8-K
|
|
3/30/2018
|
|
10.3
|
|
|
|
10.56
|
|
|
8-K
|
|
12/30/2016
|
|
10.2
|
|
|
|
10.57
|
|
|
8-K
|
|
3/30/2018
|
|
10.2
|
|
|
|
10.58*
|
|
|
S-1/A
|
|
2/27/2007
|
|
10.1(a)
|
|
|
|
10.59*
|
|
|
Schedule 14A
|
|
4/19/2010
|
|
Annex A
|
|
|
|
10.60*
|
|
|
10-Q
|
|
8/9/2010
|
|
10.2
|
|
|
|
10.61*
|
|
|
10-Q
|
|
10/30/2012
|
|
10.1
|
|
|
|
10.62*
|
|
|
10-K
|
|
3/1/2013
|
|
10.9(a)
|
|
|
|
10.63*
|
|
|
10-Q
|
|
8/9/2010
|
|
10.5
|
|
|
|
10.64*
|
|
|
10-K
|
|
2/29/2012
|
|
10.12
|
|
|
|
10.65*
|
|
|
10-K
|
|
2/8/2018
|
|
10.69
|
|
|
|
10.66*
|
|
|
|
10-Q
|
|
5/1/2018
|
|
10.12
|
|
|
|
|
|
|
Incorporated by Reference
|
|
|
||||
Exhibit No.
|
|
Exhibit Description
|
|
Form
|
|
Date of First Filing
|
|
Exhibit Number
|
|
Filed Herein
|
10.67*
|
|
|
8-K
|
|
5/2/2013
|
|
10.4
|
|
|
|
10.68*
|
|
|
10-Q
|
|
4/24/2017
|
|
10.7
|
|
|
|
10.69*
|
|
|
10-Q
|
|
5/1/2018
|
|
10.10
|
|
|
|
10.70*
|
|
|
10-Q
|
|
4/24/2017
|
|
10.6
|
|
|
|
10.71*
|
|
|
10-Q
|
|
5/1/2018
|
|
10.11
|
|
|
|
10.72*
|
|
|
10-Q
|
|
5/1/2018
|
|
10.9
|
|
|
|
10.73*
|
|
|
10-K
|
|
2/8/2018
|
|
10.76
|
|
|
|
10.74*
|
|
|
10-K
|
|
2/25/2014
|
|
10.39
|
|
|
|
10.75*
|
|
|
|
|
|
|
|
|
|
X
|
10.76*
|
|
|
8-K
|
|
10/25/2013
|
|
10.1
|
|
|
|
10.77*
|
|
|
10-Q
|
|
8/8/2013
|
|
10.20
|
|
|
|
10.78*
|
|
|
Schedule 14A
|
|
4/26/2018
|
|
Annex A
|
|
|
|
10.79*
|
|
|
10-Q
|
|
8/8/2013
|
|
10.21
|
|
|
|
10.80*
|
|
|
10-K
|
|
2/25/2014
|
|
10.45
|
|
|
|
10.81*
|
|
|
8-K
|
|
6/4/2013
|
|
10.2
|
|
|
|
10.82*
|
|
|
10-Q
|
|
8/8/2013
|
|
10.24
|
|
|
|
10.83*
|
|
|
10-Q
|
|
8/8/2013
|
|
10.25
|
|
|
|
10.84*
|
|
|
10-K
|
|
2/19/2015
|
|
10.43
|
|
|
|
10.85*
|
|
|
10-K
|
|
2/19/2015
|
|
10.44
|
|
|
|
10.86*
|
|
|
S-8
|
|
2/19/2015
|
|
99.1
|
|
|
|
10.87*
|
|
|
10-Q
|
|
7/20/2017
|
|
10.4
|
|
|
|
10.88
|
|
|
8-K
|
|
04/30/2018
|
|
10.1
|
|
|
|
|
|
|
Incorporated by Reference
|
|
|
||||
Exhibit No.
|
|
Exhibit Description
|
|
Form
|
|
Date of First Filing
|
|
Exhibit Number
|
|
Filed Herein
|
10.89
|
|
|
8-K
|
|
04/30/2018
|
|
10.2
|
|
|
|
10.90
|
|
|
8-K
|
|
05/17/2018
|
|
10.1
|
|
|
|
10.91
|
|
|
8-K
|
|
04/30/2018
|
|
10.3
|
|
|
|
21.1
|
|
|
|
|
|
|
|
|
X
|
|
23.1
|
|
|
|
|
|
|
|
|
X
|
|
24.1
|
|
|
10-K
|
|
02/08/2018
|
|
24.1
|
|
|
|
31.1
|
|
|
|
|
|
|
|
|
X
|
|
31.2
|
|
|
|
|
|
|
|
|
X
|
|
32.1**
|
|
|
|
|
|
|
|
|
|
|
32.2**
|
|
|
|
|
|
|
|
|
|
|
101.INS
|
|
XBRL Instance Document.
|
|
|
|
|
|
|
|
X
|
101.SCH
|
|
XBRL Taxonomy Extension Schema Document.
|
|
|
|
|
|
|
|
X
|
101.CAL
|
|
XBRL Taxonomy Extension Calculation Linkbase Document.
|
|
|
|
|
|
|
|
X
|
101.DEF
|
|
XBRL Taxonomy Extension Definition Linkbase Document.
|
|
|
|
|
|
|
|
X
|
101.LAB
|
|
XBRL Taxonomy Extension Label Linkbase Document.
|
|
|
|
|
|
|
|
X
|
101.PRE
|
|
XBRL Taxonomy Extension Presentation Linkbase Document.
|
|
|
|
|
|
|
|
X
|
*
|
|
Indicates a management contract or compensatory plan or arrangement.
|
**
|
|
Furnished herein.
|
|
|
SIGNATURES
|
|
|
|
T-MOBILE US, INC.
|
|
|
|
|
|
February 6, 2019
|
|
/s/ John J. Legere
|
|
|
|
John J. Legere
Chief Executive Officer
|
|
Signature
|
|
Title
|
|
|
|
/s/ John J. Legere
|
|
Chief Executive Officer and
|
John J. Legere
|
|
Director (Principal Executive Officer)
|
|
|
|
/s/ G. Michael Sievert
|
|
President and Chief Operating Officer
|
G. Michael Sievert
|
|
Director
|
|
|
|
/s/ J. Braxton Carter
|
|
Executive Vice President and Chief Financial Officer
|
J. Braxton Carter
|
|
(Principal Financial Officer)
|
|
|
|
/s/ Peter Osvaldik
|
|
Senior Vice President, Finance and Chief Accounting
|
Peter Osvaldik
|
|
Officer (Principal Accounting Officer)
|
|
|
|
/s/ Timotheus Höttges
|
|
Chairman of the Board
|
Timotheus Höttges
|
|
|
|
|
|
/s/ Srikant Datar
|
|
Director
|
Srikant Datar
|
|
|
|
|
|
/s/ Lawrence H. Guffey
|
|
Director
|
Lawrence H. Guffey
|
|
|
|
|
|
/s/ Christian P. Illek
|
|
Director
|
Christian P. Illek
|
|
|
|
|
|
/s/ Bruno Jacobfeuerborn
|
|
Director
|
Bruno Jacobfeuerborn
|
|
|
|
|
|
/s/ Raphael Kübler
|
|
Director
|
Raphael Kübler
|
|
|
|
|
|
/s/ Thorsten Langheim
|
|
Director
|
Thorsten Langheim
|
|
|
|
|
|
/s/ Olaf Swantee
|
|
Director
|
Olaf Swantee
|
|
|
|
|
|
/s/ Teresa A. Taylor
|
|
Director
|
Teresa A. Taylor
|
|
|
|
|
|
/s/ Kelvin R. Westbrook
|
|
Director
|
Kelvin R. Westbrook
|
|
|
1.
|
Construction
. Initially capitalized terms used and not otherwise defined in this Amendment have the meanings ascribed to them in the Master Agreement (as defined above and as amended hereby). The rules of construction set forth in
Section 1.2
of the Master Agreement shall apply to this Amendment. All provisions of the Master Agreement and the Collateral Agreements that are not expressly amended by this Amendment will continue to remain binding on the Parties.
|
2.
|
Final Site Designation and Final TCF for each Portfolio Site
. Notwithstanding anything to the contrary in the Master Agreement (including in
Section 3.3
of the Master Agreement) or any other Collateral Agreement, the Parties agree that: (i) the Final Site Designation, as of January 3, 2014, and the Final Total TCF for each Portfolio Site is set forth in
Exhibit A
attached hereto; (ii) such Final Total TCF for each Portfolio Site is conclusively binding on the Parties and final; and (iii) such Final Site Designation, as of January 3, 2014, is conclusively binding on the Parties and, subject to the terms and conditions of this Amendment (including
Section 4
of this Amendment) and
Sections 2.7(e)
,
4.2(a)
and
4.2(b)
of the Master Agreement, final. For the avoidance of doubt, the Parties acknowledge that, in accordance with
Sections 4.2(a)
and
(b)
of the Master Agreement, but subject to
Section 4(a)(1)
of this Amendment, if any outstanding Exceptions for a Portfolio Site shown as a Managed Site on
Exhibit A
attached hereto were cured on or prior to April 28, 2014, the resulting Site Designation for such Site will be used for purposes of the Settlement Technical Closing (as defined in
Section 4
of this Amendment). Notwithstanding anything herein to the contrary, (i) pursuant to
Section 2.7(e)
of the Master Agreement, the Crown Parties’ right to continue any of their efforts to cause the conversion of any remaining Managed Sites to Lease Sites or Assignable Sites, as applicable, shall not be diminished; and (ii) subject to
Section 6
of this Amendment, the Parties’ rights under the Master Agreement with respect to Authorizations or purported Authorizations obtained after April 28, 2014 shall not be modified by this Amendment.
|
3.
|
Settlement Payment
. In consideration of the Parties’ entering into this Amendment, T-Mobile will make a single payment in immediately available funds by wire transfer to an account designated in writing by Crown in the aggregate amount of $8.0 million (the “
Settlement Payment
”) within ten (10)
business days after the Effective Date and, subject to
Section 4(a)(1)
of this Amendment, such Settlement Payment and the rights provided under this Amendment will be the Parties’ sole and exclusive remedy for any matters relating to Site Designations and the calculation of TCF, Supplemental TCF, Closing Total Consideration, Subsequent Closing Total CA/NV Consideration, and Final Total Consideration, and the Parties hereby acknowledge and agree that they are not entitled to, and expressly waive, any and all other rights and remedies that the Parties may have (including under
Article 12
of the Master Agreement) relating to Site Designation and the calculation of TCF, Supplemental TCF, Closing Total Consideration, Subsequent Closing Total CA/NV Consideration, and Final Total Consideration.
|
4.
|
Settlement Technical Closing
. The Parties will conduct a Technical Closing (the “
Settlement Technical Closing
”) in accordance with this
Section 4
, the other applicable provisions of this Amendment, and
Section 2.7
of the Master Agreement on or before May 28, 2014 (the
|
(a)
|
Re-Designated Sites
. The Settlement Technical Closing will apply to those Portfolio Sites for which, as of April 28, 2014, the Site Designation has been re-designated from its original Site Designation on the Updated Site List or from the Final Site Designation on
Exhibit A
attached hereto;
provided
,
however
, that, notwithstanding the foregoing or anything to the contrary in the Master Agreement:
|
(1)
|
the only payments that the Crown Parties will be required to make to the T-Mobile Parties at and in connection with the Settlement Technical Closing will be, for each such re-designated Portfolio Site for which the Site Designation has been re-designated from the Final Site Designation on
Exhibit A
attached hereto as a result of Authorizations obtained on or prior to the Final Closing Date to a Lease Site or an Assignable Site, an amount equal to the product of 10% of the Final Total TCF multiplied by the TCF Multiple;
provided
,
however
, that the Crown Parties will not be required to make any payments with respect to the Portfolio Sites listed on
Exhibit B
attached hereto; and
|
(2)
|
the T-Mobile Parties will not be obligated to make any additional payments under
Section 3.5
of the Master Agreement or otherwise to the Crown Parties with respect to any such re-designated Portfolio Sites described in
Section 4(a)
above.
|
(b)
|
Re-Designated Excluded Sites
.
In addition, at the Settlement Technical Closing, subject to
Section 11
of this Amendment, with respect to any Portfolio Site that has been re-designated as of the Settlement Technical Closing Date as an Excluded Site from its original Site Designation on the Updated Site List, the Parties will execute and deliver such documents and instruments as may be required to rescind the transaction that occurred with respect to such Portfolio Sites at the applicable Closing under the Master Agreement and the Collateral Agreements (such rescission to be deemed effective as of the applicable Closing);
provided
,
however
, that, for the avoidance of doubt, the Parties will not be obligated to make any additional payments
|
(c)
|
Other Re-Designated Sites
.
In addition, at the Settlement Technical Closing, with respect to any Portfolio Site that has been re-designated as of the Settlement Technical Closing Date: (i) as a Non-Contributable Site or as a Non-Assignable Site from its original Site Designation on the Updated Site List; or (ii) as a Pre-Lease Site from its original Site Designation on the Updated Site List (other than if it were a Non-Contributable Site on the Updated Site List), the Parties will execute and deliver such documents and instruments as may be required to reflect such re-designation with respect to such Portfolio Sites;
provided
,
however
, that, for the avoidance of doubt, the Parties will not be obligated to make any additional payments under
Section 3.5
of the Master Agreement or otherwise to the other Parties with respect to, or as a result of, the re-designation of any such Portfolio Sites.
|
5.
|
Closing Conditions Satisfied
. For purposes of
Section 3.4(c
) of the Master Agreement, the Parties agree that the Minimum Lease Site and Assignable Site Closing Condition and Minimum Contributable Site and Assignable Site Closing Condition were satisfied as of the Initial Closing Date, and would have been satisfied on the Initial Closing Date, irrespective of the Final Site Designation and Final Total TCF for each Portfolio Site.
|
6.
|
Exhibit B Sites; Matters Related to Curing of Exceptions
.
|
(a)
|
Acknowledgement of Certain Cure Obligation
.
Notwithstanding anything to the contrary in the Master Agreement, but subject to
Section 6(c)
of this Amendment, the T-Mobile Parties will not be required to cure any Exception required for any assignment or sublease of any Ground Lease for any of the Portfolio Sites listed on
Exhibit B
attached hereto that are Managed Sites.
|
(b)
|
Exhibit B Sites that are Special Zoning Sites
. Subject to
Section 6(c)
of this Amendment, the Portfolio Sites listed on
Exhibit B
attached hereto designated as Special Zoning Sites shall continue to be Non-Contributable Sites unless Crown, at Crown’s sole discretion, elects to cure any Exceptions causing such Portfolio Sites listed on
Exhibit B
attached hereto to be Special Zoning Sites.
|
(c)
|
Cooperation to Cure Exceptions
. Subject to
Section 6(d)
of this Amendment, the Parties acknowledge their continuing obligations under Sections
4.2(a)
,
4.2(b)
, and
2.7(e)(ii)
of the Master Agreement regarding uncured Exceptions (except that the Parties acknowledge and agree that such obligations arising under
Sections 4.2(a)
and
(b)
of the Master Agreement do not apply to the Portfolio Sites listed on
Exhibit B
attached hereto).
|
(d)
|
Termination of Certain Cure Obligations
. The Parties agree that the T-Mobile Parties’ obligations to cure any uncured Exceptions under the Master Agreement (other than under
Section 2.7(e)(ii)
of the Master Agreement) will terminate effective as of the Final Closing Date.
|
7.
|
Mutual Releases
. Each Party hereby releases, remises, acquits and forever discharges any and all Claims, at law or in equity, based upon, related to, arising out of, or having any connection with, any matters relating to Site Designations and the calculation of TCF, Supplemental TCF, Closing Total Consideration, Subsequent Closing Total CA/NV Consideration, and Final Total Consideration (including any payments that might otherwise be due and payable as a result of those determinations and calculations) that it may have had or claimed to have had, or now has or claims to have, or hereafter may have or claim to have, whether known or unknown, against the other Parties to this Amendment and their Affiliates, attorneys, agents, assigns, insurers, and any other Person that they represent in their capacity as such. For clarification, this release does not apply to (a) any obligations created or preserved by this Amendment, including the obligations described in
Section 4
of this Amendment; or (b) any other payments or obligations required to be paid or performed by the Parties set forth in the Master Agreement or any other Collateral Agreement that are unrelated to Site Designations and the calculation of TCF, Supplemental TCF, Closing Total Consideration, Subsequent Closing Total CA/NV Consideration, and Final Total Consideration.
|
8.
|
Covenant Not to Sue
. Each Party covenants that it will not assert any Claim in any forum (including the Settlement Firm as set forth in
Sections 3.3(c)
or
4.4
of the Master Agreement) against the released Persons based upon, related to, arising out of, or having any connection with the matters released in
Section 7
of this Amendment. For clarification, this covenant does not apply to breaches of this Amendment.
|
9.
|
Covenant to Provide Consents
. The T-Mobile Parties hereby covenant and agree to timely provide Crown with copies of any Ground Lessor consent that cures an Exception for a Portfolio Site that is received by the T-Mobile Parties after the Final Closing Date, notwithstanding that any such consent will not result in the payment of the Deferred Managed Site Consideration for any Portfolio Site converted after the Final Closing Date.
|
10.
|
Warranty
. Each Party warrants that the matters being released pursuant to this Amendment have not been assigned or otherwise transferred to any other person or entity.
|
11.
|
Certain Sites
.
|
(a)
|
Certain STC One LLC Site
. The T-Mobile Parties acknowledge and agree that the Portfolio Site identified as T-Mobile Tower ID IE04346A and Crown Business Unit Number 823327 (“
STC One Site
”) is and has been owned by STC One LLC (“
STC One
”) and that STC One’s ownership of the STC One Site predates the date of the Master Agreement. The T-Mobile Parties hereby quitclaim any right, title, and interest in the STC Site to STC One. Accordingly, the STC One Site shall be an Excluded Site, but the transactions that were consummated at the Initial Closing with respect to such Site need not and will not be rescinded to return the STC One Site to the T-Mobile Parties, but rather, such Site shall remain owned (as it always has been) by STC One.
|
(b)
|
Certain CA/NV Sites
. Notwithstanding that the Portfolio Sites identified as T-Mobile Tower IDs IE04198A, IE04344A, LA02148A, LA02205A, SD06250A, SV00413A, and SF03099A are referred to as Assigned Sites (as that term is defined in the CA/NV Consent and Acknowledgement) in, and made a part of
Schedule 1
to, the CA/NV Consent and Acknowledgement, the Parties hereby acknowledge and agree that such Portfolio Sites are Excluded Sites and, as such, have been, and continue to be Retained Sites subject to the Retained Site Lease and Sublease (as those terms are defined in the CA/NV Consent and Acknowledgement).
The Parties hereby acknowledge and agree that (i) the site identified as T-Mobile Tower ID LA02233A, which was never a Portfolio Site, was inadvertently referred to in the CA/NV Consent and Acknowledgement as an Assigned Site, (ii) the Site identified as T-Mobile Tower ID LA02323A, which is a Portfolio Site, is an Assigned Site as referred to in the CA/NV Consent and Acknowledgement despite the fact that it was inadvertently omitted from the list of Assigned Sites attached as Schedule 1 to the CA/NV Consent and Acknowledgement, and (iii) the Site identified as T-Mobile Tower ID LA64151A, which is a Portfolio Site, replaced the site identified as T-Mobile Tower ID LA02233A, but is not a CA/NV Site and is not subject to the CA/NV Consent and Acknowledgement, the CA/NV Site Agreements, or any other agreements governing the CA/NV Sites, including the CA/NV Master Lease.
|
12.
|
Other Outstanding Matters
. This Amendment and the Settlement Payment made herein only settle and resolve all disputed matters relating to the Final Site Designation and the Final Total TCF and the related matters described in this Amendment. Any other contractual matters, obligations, covenants, obligations to pay or perform, disputes, or issues (irrespective of whether such items are addressed in the Master Agreement or the Collateral Agreements) by and among the T-Mobile Parties (or any of their affiliates) and the Crown Parties (or any of their affiliates) remain unaffected by this Amendment.
|
13.
|
Entire Agreement; Modifications Only in Writing
. This Amendment, the Master Agreement (as amended by this Amendment), and the Collateral Agreements (as amended by this Amendment) constitute the entire agreement between the Parties with respect to the subject matter hereof and thereof and supersede all prior agreements, both written and oral, between the Parties with respect to the subject matter hereof and thereof. This Amendment shall be binding upon and inure solely to the benefit of each Party and its successors and permitted assigns.
|
14.
|
Representation by Counsel
. The Parties agree that they have entered into this Amendment after having received competent advice from counsel of their choice with respect to this Amendment and all other matters related thereto.
|
15.
|
Severability
. If any provision of this Amendment is determined to be invalid for any reason, then that provision shall be severed from the Amendment, but the remainder of the Amendment shall be fully enforceable.
|
16.
|
Counterparts
. This Amendment may be executed in counterparts, each of which shall be deemed to be an original, but all of which shall constitute one and the same agreement.
|
This T-Mobile Tower Equipment Approval ("
Approval
") is sent and agreed upon pursuant and subject to that certain
[INSERT either “Second Amendment to MPL Site Master Lease Agreement” or “Second Amendment to Sale Site Master Lease Agreement”, as applicable]
_________________, dated ____________, 2014 (the “
Second Amendment
”) and subject to the certain
[INSERT either “MPL Site Master Lease Agreement” or “Sale Site Master Lease Agreement”, as applicable]
_________________, dated November 30, 2012, entered into by and among
[INSERT either “CCTMO LLC (“Crown”)” if the site is subject to the MPL Site MLA, or “CCTM1 LLC and CCTM2 LLC (collectively, and each individually, “Crown”)” if the site is subject to the Sale Site MLA]
_________________, T-Mobile USA, Inc. and the T-Mobile Collocator entities identified therein, as amended (the "
MLA
"). The T-Mobile Collocator entity that is party to the Site Location Agreement identified below (the “
SLA
”) is referred to herein as “
T-Mobile
”. This Approval amends the SLA to permit the installation and operation of certain Communications Equipment that meets the definition of “
T-Mobile Reserved Amount of Tower Equipment
” as set forth in Section 9(c) of the MLA, without any increase in the T-Mobile Total Rent Amount (or “
Use Fees
” if the Site is a Managed Site) at the Site identified below (the “
Site
”).
|
BU#:
|
|
Existing Agreement#:
|
|
Site Name:
|
|
Application #:
|
|
|
|
Application Revision #:
|
|
This T-Mobile Tower Equipment Approval ("
Approval
") is sent and agreed upon pursuant and subject to that certain
[INSERT either “Second Amendment to MPL Site Master Lease Agreement” or “Second Amendment to Sale Site Master Lease Agreement”, as applicable]
_________________, dated ____________, 2014 (the “
Second Amendment
”) and subject to the certain
[INSERT either “MPL Site Master Lease Agreement” or “Sale Site Master Lease Agreement”, as applicable]
_________________, dated November 30, 2012, entered into by and among
[INSERT either “CCTMO LLC (“Crown”)” if the site is subject to the MPL Site MLA, or “CCTM1 LLC and CCTM2 LLC (collectively, and each individually, “Crown”)” if the site is subject to the Sale Site MLA]
_________________, T-Mobile USA, Inc. and the T-Mobile Collocator entities identified therein, as amended (the "
MLA
"). The T-Mobile Collocator entity that is party to the Site Location Agreement identified below (the “
SLA
”) is referred to herein as “
T-Mobile
”. This Approval amends the SLA to permit the installation and operation of certain Communications Equipment that meets the definition of “
T-Mobile Reserved Amount of Tower Equipment
” as set forth in Section 9(c) of the MLA, without any increase in the T-Mobile Total Rent Amount (or “
Use Fees
” if the Site is a Managed Site) at the Site identified below (the “
Site
”).
|
BU#:
|
|
Existing Agreement#:
|
|
Site Name:
|
|
Application #:
|
|
|
|
Application Revision #:
|
|
(i)
|
the T-Mobile SPEs, T-Mobile Parent, and CCTMO entered into that certain Master Prepaid Lease, dated as of November 30, 2012 (as amended, modified, and supplemented from time to time, the “
MPL
”);
|
(ii)
|
CCTMO, T-Mobile Parent, and the T-Mobile Contributors entered into that certain MPL Site Master Lease Agreement, dated as of November 30, 2012 (as amended, modified, and supplemented from time to time, the “
MPL Site MLA
”);
|
(iii)
|
the Sale Site Subsidiaries, the T-Mobile Contributors, and T-Mobile Parent entered into that certain Sale Site Master Lease Agreement, dated as of November 30, 2012 (as amended, modified, and supplemented from time to time, the “
Sale Site MLA
”);
|
(iv)
|
the T-Mobile Contributors, the T-Mobile SPEs, CCTMO, and the Sale Site Subsidiaries entered into that certain Management Agreement, dated as of November 30, 2012 (as amended, modified, and supplemented from time to time, the “
Management Agreement
”);
|
(v)
|
the T-Mobile SPEs and CCTMO entered into that certain General Assignment and Assumption Agreement, dated as of November 30, 2012 (the “
General Assignment
”); and
|
(vi)
|
the Parties and/or their Affiliates executed and delivered certain other Collateral Agreements.
|
1.
|
Definitions
. Initially capitalized terms used and not defined herein have the meanings set forth in the Master Agreement. In addition, the following terms will have the meanings set forth below:
|
(a)
|
“
Effective Date
” means, for each Natural Conversion Site, Reversion Site, and Rescission Site, the applicable “Effective Date” set forth on
Schedule A
hereto.
|
(b)
|
“
Final Site Designation
” means, for each Portfolio Site, the applicable “Final Site Designation” set forth on
Exhibit A
to the Settlement Agreement, as more particularly set forth on
Schedule A
hereto.
|
(c)
|
“
Initial Closing Site Designation
” means, for each Portfolio Site, the Site Designation used for such Portfolio Site at the Initial Closing, as more particularly set forth on
Schedule A
hereto.
|
(d)
|
“Natural Conversion Site”
means each Portfolio Site for which: (i) its Initial Closing Site Designation is either “Non-Contributable Site”, “Pre-Lease Site”, or “Non-Assignable Site”; and (ii) its Settlement Technical Closing Site Designation is either “Lease Site”, “Pre-Lease Site”, or “Assignable Site”;
provided
,
however
, that, notwithstanding the foregoing, Natural Conversion Sites do not include any Portfolio Site for which its Initial Closing Site Designation and Settlement Technical Closing Site Designation are each “Pre-Lease Site”.
|
(e)
|
“
Rescission Site
” means each Portfolio Site for which: (i) its Initial Closing Site Designation is not “Excluded Site”; and (ii) its Settlement Technical Closing Site Designation is “Excluded Site”. For the avoidance of doubt, Rescission Sites are subject to
Section 4(b)
of the Settlement Agreement.
|
(f)
|
“Reversion Site”
means each Portfolio Site for which: (i) its Initial Closing Site Designation is either “Lease Site”, “Pre-Lease Site”, or “Assignable Site”; and (ii) its Settlement Technical Closing Site Designation is either “Non-Contributable Site”, “Pre-Lease Site”, or “Non-Assignable Site”;
provided
,
however
, that, notwithstanding the foregoing, Reversion Sites do not include any Portfolio Site for which its Initial Closing Site Designation and Settlement Technical Closing Site Designation are each “Pre-Lease Site”. For the avoidance of doubt, Reversion Sites are subject to
Section 4(c)
of the Settlement Agreement.
|
(g)
|
“
Settlement Agreement Date
” means May 8, 2014, which is the effective date of the Settlement Agreement.
|
(h)
|
“
Settlement Technical Closing Site
” means each Portfolio Site for which its Settlement Technical Closing Site Designation changed either from the Initial Closing Site Designation or the Final Site Designation.
|
(i)
|
“
Settlement Technical Closing Site Designation
” means, for each Portfolio Site, the applicable “Settlement Technical Closing Site Designation” as of the Settlement Technical Closing Site Designation Date, as more particularly set forth on
Schedule A
hereto.
|
(j)
|
“
Settlement Technical Closing Site Designation Date
” means May 16, 2014.
|
(k)
|
“
Transfer Site
” means each Natural Conversion Site and each Reversion Site.
|
2.
|
Settlement Technical Closing Payment
. On the Settlement Technical Closing Date, the Crown Parties will pay to the T-Mobile Parties $5,478,448 (the “
Settlement Technical Closing Payment
”) in immediately available funds by wire transfer to an account designated in writing by the T-Mobile Parties. The Settlement Technical Closing Payment is the aggregate payment contemplated by
Section 4(a)(1)
of the Settlement Agreement, which aggregate payment is equal to the sum of all “Settlement Technical Closing Payments” listed on
Schedule A
hereto for those Settlement Technical Closing Sites for which such payment is due.
|
3.
|
Master Portfolio Site List; Amendment of Collateral Agreements
.
|
(a)
|
Master Portfolio Site List.
The Parties acknowledge and agree that: (i) the Site Designation for each Portfolio Site as of the Settlement Technical Closing Site Designation Date was its Settlement Technical Closing Site Designation; and (ii) each Portfolio Site shall continue to be treated as a Portfolio Site with such a Site Designation (to the extent applicable, subject to any future Conversion Closing of such Portfolio Site), subject to the provisions of the Master Agreement and the Collateral Agreements.
|
(b)
|
Amendment of Collateral Agreements
. The Parties agree that, from and after the applicable Effective Date (which may be earlier than the Settlement Technical Closing Site Designation Date) for each Settlement Technical Closing Site: (i) if and to the extent applicable,
Exhibit A
and
Exhibit B
of the MPL,
Exhibit A
and
Exhibit B
of the MPL Site MLA,
Exhibit A
and
Exhibit B
of the Sale Site MLA, and
Exhibit A-1
,
Exhibit A-2
, and
Exhibit A-3
of the Management Agreement shall be deemed to have been amended to be consistent with the Settlement Technical Closing Site Designation and other information for such Settlement Technical Closing Site set forth on
Schedule A
hereto; and (ii) to the extent that any other Exhibits or Schedules in the Collateral Agreements are inconsistent with the Settlement Technical Closing Site Designation or other information for such Settlement Technical Closing Site set forth on
Schedule A
hereto, the Settlement Technical Closing Site Designation and other information on
Schedule A
hereto for such Settlement Technical Closing Site will control. For the avoidance of doubt, the Parties acknowledge and agree that the intent and effect of the amendments in this
Section 3(b)
is, among others, that, subject to the other terms and conditions of this Agreement, the applicable Transfer Sites and the related Included Property becoming: (A) subject to the MPL will be deemed to have been leased to CCTMO by the applicable T-Mobile SPE as if originally subject to the MPL as of the applicable Effective Date; (B) subject to the MPL Site MLA as Leased Sites will be deemed to have been leased to the applicable T-Mobile Contributor by CCTMO to the same extent as if originally subject to the MPL Site MLA as Leased Sites as of the applicable Effective Date; (C) subject to the Sale Site MLA as Assignable Sites will be deemed to have been leased to the applicable T-Mobile Contributor by the applicable Sale Site Subsidiary to the same extent as if originally subject to the Sale Site MLA as Assignable Sites as of the applicable Effective Date; and (D) subject to the Management Agreement will be deemed to have been managed by CCTMO or the applicable Sale Site Subsidiary, as applicable, for the benefit of the applicable T-Mobile Contributor or T-Mobile SPE as if originally subject to the Management Agreement as of the applicable Effective Date.
|
(c)
|
One-Time Change of Site Designation
. The Parties agree that the Settlement Technical Closing Site Designation for Site ID# SC54512A / BU 828131 is “Pre-Lease Site”, notwithstanding that the Final Site Designation for such Portfolio Site is “Lease Site” in the Settlement Agreement;
provided
,
however
, the Parties acknowledge and agree that nothing in this
Section 3(c)
constitutes a course of dealing, commitment, or obligation to make any other changes to such Final Site Designations for any other Portfolio Sites, unless otherwise required by the Master Agreement and the Collateral Agreements.
|
4.
|
Transfer of Transfer Sites and Other Settlement Technical Closing Transactions
.
|
(a)
|
Transfer and Assumption - General.
Subject to
Section 4(d)
below and the applicable provisions of the Settlement Agreement, the Master Agreement, and the other Collateral Agreements, for each Transfer Site, effective as of the applicable Effective Date:
|
(i)
|
the Site Designation for such Transfer Site changed to its Settlement Technical Closing Site Designation;
|
(ii)
|
except for Transfer Sites where the Transferor is listed as “no entity change” on
Schedule A
hereto, the applicable “Transferor” identified on
Schedule A
hereto (each, a “
Transferor
”) shall be deemed to have sold, assigned, conveyed, transferred, and delivered, free and clear of all Liens (except for Permitted Encumbrances), to the applicable “Transferee” identified on
Schedule A
hereto (each, a “
Transferee
”), and such Transferee shall be deemed to have accepted all of such Transferor’s right, title, and interest in, to, and under the following items, excluding any Excluded Assets if the applicable Transferor is a T-Mobile Party:
|
(A)
|
such Transfer Site;
|
(B)
|
the related Included Property;
|
(C)
|
any Ground Leases (including any applicable New Agreements as defined in
Section 4(d)
) relating to such Transfer Site; and
|
(D)
|
any Collocation Agreements (including any applicable New Agreements as defined in
Section 4(d)
) relating to such Transfer Site, if its Settlement Technical Closing Site Designation is either: (1) “Pre-Lease Site” and its Initial Closing Site Designation is “Non-Contributable Site”, (2) “Assignable Site”, (3) “Non-Contributable Site” and its Initial Closing Site Designation is “Pre-Lease Site”, or (4) “Non-Assignable Site”;
|
(iii)
|
if the Settlement Technical Closing Site Designation for such Transfer Site is “Non-Assignable Site”, then, without limiting any provision of the Management Agreement, the Master Agreement, or the other Collateral Agreements, the applicable Transferor shall be deemed to have delegated to the applicable Transferee, and the applicable Transferee shall be deemed to have assumed, the portion of the Post-Closing Liabilities of the Crown Parties, if any, relating to, arising out of or that are in connection with the operation, use, or occupancy of such Transfer Site after the applicable Effective Date;
|
(iv)
|
if the Settlement Technical Closing Site Designation for such Transfer Site is either: (1) “Pre-Lease Site” and its Initial Closing Site Designation is “Non-Contributable Site”, or (2) “Assignable Site”, then, without limiting any provision of the Master Agreement or any Collateral Agreement or
Section 4(a)(v)
below, the applicable Transferor shall be deemed to have delegated to the applicable
|
(v)
|
if the Settlement Technical Closing Site Designation for such Transfer Site is “Lease Site”, then:
|
(A)
|
subject to
Section 6(e)
of the MPL, the applicable Transferor (or, if the Transferor is listed as “no entity change” on
Schedule A
hereto, the applicable T-Mobile SPE) sold, assigned, conveyed, transferred and delivered to CCTMO, and CCTMO accepted, all of such Transferor’s (or, as applicable, the T-Mobile SPE’s) right, title, and interest in, to, and under any Collocation Agreements (including any applicable New Agreements as defined in
Section 4(d)
) relating to such Transfer Site; and
|
(B)
|
the applicable Transferor (or, if the Transferor is listed as “no entity change” on
Schedule A
hereto, the applicable T-Mobile SPE) delegated to CCTMO, and CCTMO assumed, the portion of the Post-Closing Liabilities of the T-Mobile Parties, if any, relating to, arising out of or that are in connection with the operation, use, or occupancy of such Transfer Site after the applicable Effective Date;
|
(vi)
|
if the Settlement Technical Closing Site Designation for such Transfer Site is “Pre-Lease Site” and its Initial Closing Site Designation is “Lease Site”, then CCTMO sold, assigned, conveyed, transferred, and delivered to the applicable T-Mobile SPE, and such T-Mobile SPE accepted, all of CCTMO’s right, title, and interest in, to, and under any Collocation Agreements (including any applicable New Agreements as defined in
Section 4(d)
) relating to such Transfer Site; and
|
(vii)
|
if the Settlement Technical Closing Site Designation for such Transfer Site is “Non-Contributable Site” and its Initial Closing Site Designation is “Lease Site”, then CCTMO sold, assigned, conveyed, transferred, and delivered to the applicable Transferee, and such Transferee accepted, all of CCTMO’s right, title, and interest in, to, and under any Collocation Agreements (including any applicable New Agreements as defined in
Section 4(d)
) relating to such Transfer Site.
|
(b)
|
Rescission Sites in General
. Subject to
Section 4(c)
and
Section 4(d)
below and in accordance with and subject to the Settlement Agreement (including
Section 4(b)
thereof), for each Rescission Site: (i) effective as of the Initial Closing Date, the Parties shall be deemed to have rescinded the transactions that occurred with respect to such Rescission Site at or in connection with the Initial Closing under the Master Agreement and the Collateral Agreements; and (ii) such Initial Closing transactions with respect to such Rescission Site are hereby declared and acknowledged to be void
ab initio
. Without limiting the generality of the foregoing: (A) effective as of the Initial Closing Date, the Site Location Agreement for each Rescission Site shall be deemed to have been rescinded and is hereby declared and acknowledged to be void
ab initio
; and (B) the Parties acknowledge that, on the Settlement Agreement Date, CCTMO, CCTM1, and CCTM2 (each, a “
Crown Party Transferor
”) delivered possession and operational control of the Rescission Sites to the applicable T-Mobile Party.
|
(c)
|
Collocation Agreements and Post-Closing Liabilities Relating to Rescission Sites.
Without limiting the generality of
Section (4)(b)
above or
Section 4(d)
below, and subject to the Settlement Agreement, for each Rescission Site, effective as of the Settlement Agreement Date, to the extent applicable: (i) the applicable Crown Party Transferor shall be deemed to have sold, assigned, conveyed, transferred and delivered to the applicable Transferee for such Rescission Site, and such Transferee shall be deemed to have accepted, all of such Crown Party Transferor’s right, title, and interest in, to, and under the Collocation Agreements relating to such Rescission Site (including any applicable New Agreements as defined in
Section 4(d)
), free and clear of all Liens, except Permitted Encumbrances; and (ii) the applicable Crown Party Transferor shall be deemed to have delegated to the applicable Transferee, and such Transferee shall be deemed to have assumed, the portion of the Post-Closing Liabilities of the applicable Crown Party Transferor with respect to such Collocation Agreements relating to, arising out of or that are in connection with the operation, use, or occupancy of such Rescission Site on or after the Settlement Agreement Date (including any applicable New Agreements as defined in
Section 4(d)
).
|
(d)
|
Collocation Agreements, Ground Leases and Amendments to Collocation Agreements and Ground Leases Relating to Transfer Sites and Rescission Sites
. The Parties acknowledge that certain Crown Parties (either on their own behalf or as attorney-in-fact on behalf of the applicable T-Mobile Party) entered into certain new Collocation Agreements and Ground Leases and amendments to existing Collocation Agreements and Ground Leases with respect to the Transfer Sites and Rescission Sites (each such instrument, a “
New Agreement
”). Within 45 days after the Settlement Technical Closing Date, the Crown Parties will provide to the T-Mobile Parties true, correct, and complete copies of each New Agreement that relates to either a Rescission Site or a Reversion Site;
provided
,
however
, that such foregoing obligation to provide copies of certain New Agreements is not intended to limit or expand any of the rights or obligations of the Parties that otherwise exist under the Master Agreement and the Collateral Agreements. The Parties agree that the Transfer Sites and Rescission Sites, and the transactions contemplated by
Section 4(a)
,
Section 4(b)
,
|
5.
|
Amendment of the General Assignment
. The Parties acknowledge that, after the Initial Closing, the Verizon Master Lease Agreements (as defined in the General Assignment) were bifurcated in accordance with that certain Consent and Bifurcation, dated as of October 5, 2012, by and among Cellco Partnership (d/b/a Verizon Wireless) and T-Mobile Parent. Accordingly, effective as of October 5, 2012,
clause (iii)
of
Section 1
of the General Assignment is amended and restated in its entirety as follows:
|
6.
|
Amendments to UCC Financing Statements
. On or after the Settlement Technical Closing Date, the Crown Parties hereby authorize the T-Mobile Parties, at their own cost and expense, to file amendments to the UCC financing statements listed on
Schedule B
hereto to amend and restated the collateral description to read as set forth on
Schedule B
hereto.
|
7.
|
Certification Regarding Conditions Precedent to Settlement Closing
.
|
(a)
|
Certification by the Crown Parties
. The Crown Parties hereby certify that, with respect to the Natural Conversion Sites, each of the conditions precedent applicable to the Settlement Technical Closing that are set forth in
Article 11
of the Master Agreement have been satisfied or waived (to the extent permitted under applicable Law).
|
(b)
|
Certification by the T-Mobile Parties
. The T-Mobile Parties hereby certify that, with respect to the Natural Conversion Sites, each of the conditions precedent applicable to the Settlement Technical Closing that are set forth in
Article 10
of the Master Agreement have been satisfied or waived (to the extent permitted under applicable Law).
|
8.
|
Fees and Expenses
. Except as otherwise expressly set forth in this Agreement, all legal and other costs and expenses incurred in connection with this Agreement and the transactions contemplated by this Agreement shall be paid by the Party incurring such costs and expenses.
|
9.
|
Full Force and Effect
. Except as expressly set forth in this Agreement, the Master Agreement and other Collateral Agreements (including the Exhibits and Schedules thereto) are otherwise unmodified and remain in full force and effect in accordance with their respective terms.
|
10.
|
Entire Agreement; Modifications Only in Writing; Collateral Agreement
. This Agreement constitutes the entire agreement among the Parties with respect to the subject matter hereof and supersedes all prior agreements, both written and oral, among the Parties with respect to the subject matter hereof. This Agreement shall be binding upon and inure solely to the benefit of each Party and its successors and permitted assigns. This Agreement may be amended, modified or supplemented only by written agreement of the Parties. The Parties acknowledge and agree that this Agreement constitutes a Collateral Agreement.
|
11.
|
Severability
. If any provision of this Agreement is determined to be invalid for any reason, then that provision shall be severed from the Agreement, but the remainder of the Agreement shall be fully enforceable.
|
12.
|
Time of Essence
. Time is of the essence in this Agreement, and whenever a date or time is set forth in this Agreement, the same has entered into and formed a part of the consideration for this Agreement.
|
13.
|
Governing Law
. This Agreement shall be governed by and construed in accordance with the laws of the State of New York (regardless of the laws that might otherwise govern under applicable principles of conflict of laws thereof) as to all matters, including matters of validity, construction, effect, performance and remedies.
|
14.
|
Counterparts
. This Agreement may be executed in separate counterparts, each of which shall be deemed to be an original, but all of which shall constitute one and the same agreement. Delivery of an executed counterpart to this Agreement by facsimile or other electronic transmission (including documents in PDF format) shall be effective as delivery of a manually executed counterpart to this Agreement.
|
T-MOBILE HANDSET FUNDING LLC
|
||
as Transferor
|
||
|
||
By:
|
/s/ Dirk Wehrse
|
|
|
Name:
|
Dirk Wehrse
|
|
Title:
|
Senior Vice President, Treasury &
|
|
|
Treasurer
|
|
|
|
T-MOBILE FINANCIAL LLC
|
||
In its individual capacity and as Servicer
|
||
|
||
By:
|
/s/ Dirk Wehrse
|
|
|
Name:
|
Dirk Wehrse
|
|
Title:
|
Assistant Treasurer
|
|
|
|
T-MOBILE US, INC.
|
||
as Guarantor
|
||
|
||
By:
|
/s/ Dirk Wehrse
|
|
|
Name:
|
Dirk Wehrse
|
|
Title:
|
Senior Vice President, Treasury &
|
|
|
Treasurer
|
|
|
|
T-MOBILE USA, INC.
|
||
as Guarantor
|
||
|
||
By:
|
/s/ Dirk Wehrse
|
|
|
Name:
|
Dirk Wehrse
|
|
Title:
|
Senior Vice President, Treasury &
|
|
|
Treasurer
|
|
|
ROYAL BANK OF CANADA
|
|||
as Administrative Agent
|
|||
|
|||
By:
|
/s/ Thomas C. Dean
|
||
|
Name:
|
Thomas C. Dean
|
|
|
Title:
|
Authorized Signatory
|
|
|
|
||
By:
|
/s/ Lisa Wang
|
||
|
Name:
|
Lisa Wang
|
|
|
Title:
|
Authorized Signatory
|
|
|
|
||
ROYAL BANK OF CANADA
|
|||
as Funding Agent
|
|||
|
|||
By:
|
/s/ Thomas C. Dean
|
|
|
|
Name:
|
Thomas C. Dean
|
|
|
Title:
|
Authorized Signatory
|
|
|
|
|
|
By:
|
/s/ Lisa Wang
|
|
|
|
Name:
|
Lisa Wang
|
|
|
Title:
|
Authorized Signatory
|
|
|
|
|
LANDESBANK HESSEN-THURINGEN
|
||
GIROZENTRALE,
|
||
as a Funding Agent
|
||
|
||
By:
|
/s/ Bjoern Mollner
|
|
|
Name:
|
Bjoern Mollner
|
|
Title:
|
Senior Vice President
|
|
|
|
By:
|
/s/ Daniel Geflitter
|
|
|
Name:
|
Daniel Geflitter
|
|
Title:
|
Associate
|
|
|
MUFG BANK, LTD. F/K/A THE BANK OF
|
||
TOKYO-MITSUBISHI UFJ, LTD.,
|
||
as a Funding Agent
|
||
|
||
By:
|
/s/ Christopher Pohl
|
|
|
Name:
|
Christopher Pohl
|
|
Title:
|
Managing Director
|
|
|
BNP PARIBAS,
|
||
as a Funding Agent
|
||
|
||
By:
|
/s/ Chris Fukuoka
|
|
|
Name:
|
Chris Fukuoka
|
|
Title:
|
Vice President
|
|
|
|
By:
|
/s/ Advait Joshi
|
|
|
Name:
|
Advait Joshi
|
|
Title:
|
Director
|
|
|
Name
|
|
State of Incorporation
|
IBSV LLC
|
|
Delaware
|
Iowa Wireless Services Holding Corporation
|
|
Delaware
|
L3TV DC Cable System, LLC
|
|
Delaware
|
L3TV Chicagoland Cable System, LLC
|
|
Delaware
|
L3TV Colorado Cable System, LLC
|
|
Delaware
|
L3TV Dallas Cable System, LLC
|
|
Delaware
|
L3TV Detroit Cable System, LLC
|
|
Delaware
|
L3TV Los Angeles Cable System, LLC
|
|
Delaware
|
L3TV New York Cable System, LLC
|
|
Delaware
|
L3TV Philadelphia Cable System, LLC
|
|
Delaware
|
L3TV San Francisco Cable System, LLC
|
|
Delaware
|
Layer3 TV, Inc.
|
|
Delaware
|
LayerG, LLC
|
|
Delaware
|
MetroPCS California, LLC
|
|
Delaware
|
MetroPCS Florida, LLC
|
|
Delaware
|
MetroPCS Georgia, LLC
|
|
Delaware
|
MetroPCS Massachusetts, LLC
|
|
Delaware
|
MetroPCS Michigan, LLC
|
|
Delaware
|
MetroPCS Networks California, LLC
|
|
Delaware
|
MetroPCS Networks Florida, LLC
|
|
Delaware
|
MetroPCS Nevada, LLC
|
|
Delaware
|
MetroPCS New York, LLC
|
|
Delaware
|
MetroPCS Pennsylvania, LLC
|
|
Delaware
|
MetroPCS Texas, LLC
|
|
Delaware
|
MFP LeaseCo, LLC
|
|
Delaware
|
Powertel Memphis Licenses, Inc.
|
|
Delaware
|
Powertel/Memphis, Inc.
|
|
Delaware
|
SunCom Wireless Holdings, Inc.
|
|
Delaware
|
SunCom Wireless License Company, LLC
|
|
Delaware
|
SunCom Wireless Operating Company, L.L.C.
|
|
Delaware
|
SunCom Wireless Property Company, L.L.C.
|
|
Delaware
|
SunCom Wireless, Inc.
|
|
Delaware
|
T-Mobile Airtime Funding LLC
|
|
Delaware
|
T-Mobile Central LLC
|
|
Delaware
|
T-Mobile Financial LLC
|
|
Delaware
|
T-Mobile Handset Funding LLC
|
|
Delaware
|
T-Mobile Leasing LLC
|
|
Delaware
|
T-Mobile License LLC
|
|
Delaware
|
T-Mobile Northeast LLC
|
|
Delaware
|
T-Mobile PCS Holdings LLC
|
|
Delaware
|
T-Mobile Puerto Rico Holdings LLC
|
|
Delaware
|
T-Mobile Puerto Rico LLC
|
|
Delaware
|
T-Mobile Resources Corporation
|
|
Delaware
|
T-Mobile South LLC
|
|
Delaware
|
T-Mobile Subsidiary IV Corporation
|
|
Delaware
|
T-Mobile USA Tower LLC
|
|
Delaware
|
T-Mobile USA, Inc.
|
|
Delaware
|
T-Mobile West LLC
|
|
Delaware
|
T-Mobile West Tower LLC
|
|
Delaware
|
TMUS Assurance Corporation
|
|
Hawaii
|
Triton PCS Finance Company, Inc.
|
|
Delaware
|
Triton PCS Holdings Company L.L.C.
|
|
Delaware
|
1.
|
I have reviewed this
Annual Report
on
Form 10-K
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
Chief Executive Officer
|
1.
|
I have reviewed this
Annual Report
on
Form 10-K
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
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
|