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.
|
|
|
|
|
|
|||
|
|||
|
|||
|
|||
|
|||
|
|||
|
|
|
|
|
|||
|
|||
|
|||
|
|||
|
|||
|
|||
|
|||
|
|||
|
|
|
|
|
|||
|
|||
|
|||
|
|||
|
|||
|
|
|
|
|
|||
|
|||
|
|
||
|
|
•
|
adverse economic or political conditions in the U.S. and international markets;
|
•
|
competition, industry consolidation, and changes in the market for wireless services 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 and data security;
|
•
|
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;
|
•
|
any disruption or failure of our third parties’ or key suppliers’ provisioning of products or services;
|
•
|
material adverse changes in labor matters, including labor campaigns, negotiations or additional organizing activity, and any resulting financial, operational and/or reputational impact;
|
•
|
the ability to make payments on our debt or to repay our existing indebtedness when due or to comply with the covenants contained therein;
|
•
|
adverse change in the ratings of our debt securities or adverse conditions in the credit markets;
|
•
|
changes in accounting assumptions that regulatory agencies, including the Securities and Exchange Commission (“SEC”), may require, which could result in an impact on earnings;
|
•
|
changes in tax laws, regulations and existing standards and the resolution of disputes with any taxing jurisdictions; and
|
•
|
the possibility that the reset process under our trademark license with Deutsche Telekom results in changes to the royalty rates for our trademarks.
|
•
|
Branded postpaid customers generally include customers that are qualified to pay after receiving wireless communication services utilizing phones, mobile broadband devices (including tablets), or DIGITS;
|
•
|
Branded prepaid customers generally include customers who pay for wireless communication services in advance. Our branded prepaid customers include customers of T-Mobile and MetroPCS; and
|
•
|
Wholesale customers include Machine-to-Machine (“M2M”) and MVNO that operate on our network, but are managed by wholesale partners.
|
•
|
65%
Branded postpaid customers;
|
•
|
31%
Branded prepaid customers; and
|
•
|
4%
Wholesale customers and Roaming and other services.
|
•
|
Our T-Mobile ONE plan (“T-Mobile ONE”) which gives our customers unlimited calls, 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. On T-Mobile ONE, video typically streams at DVD (480p) quality and tethering is at maximum 3G speeds. Customers on T-Mobile ONE can keep their price for service until they decide to change it and participating customers who use 2 GB or less of data in a month will get up to a $10 credit per qualifying line on their next month’s bill. Additionally, qualifying T-Mobile ONE customers on family plans can opt in for a standard monthly Netflix service plan at no additional cost. Customers can choose to add on additional features for an additional cost as follows:
|
•
|
On T-Mobile ONE Plus, customers also receive unlimited High Definition video streaming, 10 GB of high-speed 4G LTE tethering, Voicemail to Text, NameID, unlimited Gogo in-flight internet passes on capable domestic flights and up to two times faster speeds when traveling abroad in 140+ countries and destinations.
|
•
|
On T-Mobile ONE Plus International, customers receive the benefits of T-Mobile ONE Plus as well as free and reduced calling from the U.S., Mexico, and Canada to foreign countries and unlimited high-speed 4G LTE tethering.
|
•
|
Simple Choice plans, which were launched in 2013 as part of phase 1.0 of our Un-carrier initiatives, eliminated annual service contracts and simplified the lineup of consumer rate plans to one affordable plan for unlimited voice and messaging services with the option to add data services. On January 25, 2017, we streamlined our Simple Choice plan offerings to new customers into our T-Mobile ONE plan.
|
•
|
Depending on their credit profile, qualifying customers who purchase a device from us have the option of financing all or a portion of the purchase price at the time of sale over an installment period of up to 24 months using our Equipment Installment Plan (“EIP”).
|
•
|
In addition, qualifying customers who finance their initial device with an EIP can 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.
|
•
|
In 2015, we introduced JUMP! On Demand. With JUMP! On Demand, a low monthly payment 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, 2017
, 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. This is compared to an average of
79
MHz of spectrum nationwide as of
December 31, 2016
.
|
•
|
In April 2017, the Federal Communications Commission (the “FCC”) announced the results of the broadcast incentive auction which showed that we purchased a nationwide average of
31
MHz of 600 MHz low-band spectrum for
$8.0 billion
. This spectrum covered
328 million
points of presence (“POPs”) as of
December 31, 2017
. See
Note 5 - Goodwill, Spectrum Licenses and Other Intangible Assets
included in Part II, Item 8 of this Form 10-K for further information.
|
•
|
As of
December 31, 2017
, T-Mobile owned approximately
41
MHz of low-band spectrum (600 MHz and 700 MHz), quadruple its pre-auction low-band holdings. The purchased spectrum covers
100%
of the U.S.
|
•
|
As of
December 31, 2017
, at least
10
MHz of 600 MHz spectrum covering over
1.2 million
square miles and approximately
62 million
POPs was clear and available for deployment.
|
•
|
T-Mobile has actively engaged with broadcasters to accelerate FCC clearance timelines, entering into approximately
40
agreements with several parties. These agreements will, in aggregate, accelerate clearing, bringing the total clearing target to over
100 million
POPs expected by year-end 2018. We expect to reach a clearing target of
250 million
POPs by year-end 2019. T-Mobile remains committed to assisting broadcasters occupying 600 MHz spectrum to move to new frequencies.
|
•
|
In addition to spectrum clearing, T-Mobile aggressively started deployments of 600 MHz spectrum, lighting up spectrum in
586
cities and towns in
28
states across the country, covering
300,000
square miles as of December 31, 2017.
|
•
|
We had
two
new 600 MHz-capable devices in our retail distribution for the 2017 holiday season (LG V30 and Samsung GS8 Active). We expect more than a dozen new smartphones to be rolled out in 2018 to be 600 MHz-capable.
|
•
|
Our 600 MHz spectrum holdings will be used to deploy America's first nationwide 5G network expected by
2020
.
|
•
|
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 5 – Goodwill, Spectrum Licenses and Other Intangible Assets
of the Notes to the Consolidated Financial Statements included in Part II, Item 8 of this Form 10-K for further information.
|
•
|
We intend to opportunistically acquire spectrum licenses in private party transactions and future FCC spectrum license auctions.
|
•
|
Our wireless infrastructure included approximately
61,000
macro sites and approximately
18,000
distributed antenna system (DAS) and small cell sites as of
December 31, 2017
.
|
•
|
We continue to expand our coverage breadth and covered
322 million
people with 4G LTE as of
December 31, 2017
.
|
•
|
By the end of 2018, we are targeting a population coverage of
325 million
and a geographic coverage of
2.5 million
square miles.
|
•
|
VoLTE comprised almost
80%
of total voice calls as of
December 31, 2017
, compared to
64%
as of
December 31, 2016
. 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 over
875
markets. This advanced technology delivers superior speed and performance by bonding multiple discrete spectrum channels together.
|
•
|
4x4 MIMO is currently available in over
475
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 plan to start deploying massive MIMO (FD-MIMO) in selected locations later in 2018.
|
•
|
We have rolled out 256 QAM in over
925
markets. 256 QAM increases the number of bits delivered per transmission to enable faster speed. T-Mobile is the first carrier globally to have rolled out the combination of carrier aggregation, 4x4 MIMO and 256 QAM.
|
•
|
T-Mobile is implementing a significant small cell program. We plan to roll out
25,000
small cells in 2018 and early 2019. This is on top of the approximately
18,000
small cells and DAS nodes already rolled out as of the end of 2017. In conjunction with the small cell rollout, we have also started rolling out License Assisted Access. The first LAA small cell went live in New York City in the fourth quarter of 2017.
|
•
|
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, including participating in future FCC auctions of spectrum or private sales of spectrum;
|
•
|
developing assets, properties, or licenses that we have or in the future may procure;
|
•
|
creating liens on assets;
|
•
|
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 reporting 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 our 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 Board, 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 Deutsche Telekom;
|
•
|
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; or
|
•
|
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 Deutsche Telekom;
|
•
|
Deutsche Telekom’s financial performance, results of operation, or actions implied or taken by Deutsche Telekom;
|
•
|
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 we operate in;
|
•
|
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;
|
•
|
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.
|
|
Approximate Number
|
|
Approximate Size in Square Feet
|
||
Switching centers
|
61
|
|
|
1,300,000
|
|
Data centers
|
6
|
|
|
500,000
|
|
Call center
|
17
|
|
|
1,400,000
|
|
Warehouses
|
15
|
|
|
500,000
|
|
•
|
Approximately
61,000
macro sites and approximately
18,000
distributed antenna system and small cell sites.
|
•
|
Approximately
2,200
T-Mobile and MetroPCS retail locations, including stores and kiosks ranging in size from approximately
100
square feet to
17,000
square feet.
|
•
|
Office space totaling approximately
900,000
square feet for our corporate headquarters in Bellevue, Washington. We use these offices for engineering and administrative purposes.
|
•
|
Office space throughout the U.S., totaling approximately
1,700,000
square feet as of
December 31, 2017
, for use by our regional offices primarily for administrative, engineering and sales purposes.
|
|
High
|
|
Low
|
||||
Year Ended December 31, 2017
|
|
|
|
||||
First quarter
|
$
|
65.41
|
|
|
$
|
55.30
|
|
Second quarter
|
68.88
|
|
|
59.59
|
|
||
Third quarter
|
65.47
|
|
|
59.13
|
|
||
Fourth quarter
|
64.64
|
|
|
54.60
|
|
||
Year Ended December 31, 2016
|
|
|
|
||||
First quarter
|
$
|
41.23
|
|
|
$
|
33.23
|
|
Second quarter
|
44.13
|
|
|
37.93
|
|
||
Third quarter
|
48.11
|
|
|
42.71
|
|
||
Fourth quarter
|
59.19
|
|
|
44.91
|
|
•
|
any applicable contractual or charter restrictions limiting our ability to pay dividends;
|
•
|
our earnings and cash flows;
|
•
|
our capital requirements;
|
•
|
our future needs for cash;
|
•
|
our financial condition; and
|
•
|
other factors our Board of Directors deems relevant.
|
|
Total Number of Shares Repurchased
|
|
Average Price Paid per Share
|
|
Total Number of Shares Purchased as Part of Publicly Announced Repurchase Plans or Programs
|
|
Maximum Approximate Dollar Value of Shares that May Yet be Purchased Under the Plans or Programs (in millions)
|
||||||
10/1/2017 - 10/31/2017
|
—
|
|
|
$
|
—
|
|
|
—
|
|
|
$
|
—
|
|
11/1/2017 - 11/30/2017
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||
12/1/2017 - 12/31/2017
|
7,010,889
|
|
|
63.34
|
|
|
7,010,889
|
|
|
1,056
|
|
||
|
7,010,889
|
|
|
|
|
7,010,889
|
|
|
1,056
|
|
|
At December 31,
|
||||||||||||||||||||||
|
2012
|
|
2013
|
|
2014
|
|
2015
|
|
2016
|
|
2017
|
||||||||||||
T-Mobile US, Inc.
|
$
|
100.00
|
|
|
$
|
210.69
|
|
|
$
|
168.73
|
|
|
$
|
245.01
|
|
|
$
|
360.19
|
|
|
$
|
397.77
|
|
S&P 500
|
100.00
|
|
|
132.39
|
|
|
150.51
|
|
|
152.59
|
|
|
170.84
|
|
|
208.14
|
|
||||||
NASDAQ Composite
|
100.00
|
|
|
141.63
|
|
|
162.09
|
|
|
173.33
|
|
|
187.19
|
|
|
242.29
|
|
||||||
Dow Jones US Mobile Telecommunications TSM
|
100.00
|
|
|
132.12
|
|
|
118.02
|
|
|
123.77
|
|
|
157.74
|
|
|
161.29
|
|
(in millions, except per share and customer amounts)
|
As of and for the Year Ended December 31,
|
||||||||||||||||||
2017
|
|
2016
|
|
2015
|
|
2014
|
|
2013
|
|||||||||||
Statement of Operations Data
|
|
|
|
|
|
|
|
|
|
||||||||||
Total service revenues
|
$
|
30,160
|
|
|
$
|
27,844
|
|
|
$
|
24,821
|
|
|
$
|
22,375
|
|
|
$
|
19,068
|
|
Total revenues
(1)
|
40,604
|
|
|
37,490
|
|
|
32,467
|
|
|
29,920
|
|
|
24,605
|
|
|||||
Operating income
(1)
|
4,888
|
|
|
4,050
|
|
|
2,479
|
|
|
1,772
|
|
|
1,181
|
|
|||||
Total other expense, net
(1)
|
(1,727
|
)
|
|
(1,723
|
)
|
|
(1,501
|
)
|
|
(1,359
|
)
|
|
(1,130
|
)
|
|||||
Income tax benefit (expense)
|
1,375
|
|
|
(867
|
)
|
|
(245
|
)
|
|
(166
|
)
|
|
(16
|
)
|
|||||
Net income
|
4,536
|
|
|
1,460
|
|
|
733
|
|
|
247
|
|
|
35
|
|
|||||
Net income attributable to common stockholders
|
4,481
|
|
|
1,405
|
|
|
678
|
|
|
247
|
|
|
35
|
|
|||||
Earnings per share:
|
|
|
|
|
|
|
|
|
|
||||||||||
Basic
|
$
|
5.39
|
|
|
$
|
1.71
|
|
|
$
|
0.83
|
|
|
$
|
0.31
|
|
|
$
|
0.05
|
|
Diluted
|
$
|
5.20
|
|
|
$
|
1.69
|
|
|
$
|
0.82
|
|
|
$
|
0.30
|
|
|
$
|
0.05
|
|
Balance Sheet Data
|
|
|
|
|
|
|
|
|
|
||||||||||
Cash and cash equivalents
|
$
|
1,219
|
|
|
$
|
5,500
|
|
|
$
|
4,582
|
|
|
$
|
5,315
|
|
|
$
|
5,891
|
|
Property and equipment, net
|
22,196
|
|
|
20,943
|
|
|
20,000
|
|
|
16,245
|
|
|
15,349
|
|
|||||
Spectrum licenses
|
35,366
|
|
|
27,014
|
|
|
23,955
|
|
|
21,955
|
|
|
18,122
|
|
|||||
Total assets
|
70,563
|
|
|
65,891
|
|
|
62,413
|
|
|
56,639
|
|
|
49,946
|
|
|||||
Total debt, excluding tower obligations
|
28,319
|
|
|
27,786
|
|
|
26,243
|
|
|
21,946
|
|
|
20,182
|
|
|||||
Stockholders’ equity
|
22,559
|
|
|
18,236
|
|
|
16,557
|
|
|
15,663
|
|
|
14,245
|
|
|||||
Statement of Cash Flows and Operational Data
|
|
|
|
|
|
|
|
|
|
||||||||||
Net cash provided by operating activities
|
$
|
7,962
|
|
|
$
|
6,135
|
|
|
$
|
5,414
|
|
|
$
|
4,146
|
|
|
$
|
3,545
|
|
Purchases of property and equipment
|
(5,237
|
)
|
|
(4,702
|
)
|
|
(4,724
|
)
|
|
(4,317
|
)
|
|
(4,025
|
)
|
|||||
Purchases of spectrum licenses and other intangible assets, including deposits
|
(5,828
|
)
|
|
(3,968
|
)
|
|
(1,935
|
)
|
|
(2,900
|
)
|
|
(381
|
)
|
|||||
Net cash (used in) provided by financing activities
|
(1,179
|
)
|
|
463
|
|
|
3,413
|
|
|
2,524
|
|
|
4,044
|
|
|||||
Total customers (in thousands)
(2)
|
72,585
|
|
|
71,455
|
|
|
63,282
|
|
|
55,018
|
|
|
46,684
|
|
(1)
|
Effective January 1, 2017, we changed an accounting principle. The imputed discount on Equipment Installment Plan (“EIP”) receivables, which is amortized over the financed installment term using the effective interest method, and was previously presented within Interest income in our
Consolidated Statements of Comprehensive Income
, is now presented within Other revenues in our
Consolidated Statements of Comprehensive Income
. We have applied this change retrospectively and presented the effect of
$280 million
,
$248 million
,
$414 million
,
$356 million
and
$185 million
on the
years ended
December 31, 2017
,
2016
,
2015
,
2014
and
2013
, respectively in the table above. 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)
|
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 January 2017, we introduced, Un-carrier Next, where monthly wireless service fees and sales taxes are included in the advertised monthly recurring charge for T-Mobile ONE. We also unveiled Kickback on T-Mobile ONE, where participating customers who use 2 GB or less of data in a month, will get up to a $10 credit per qualifying line on their next month’s bill. In addition, we introduced the Un-contract for T-Mobile ONE with the first-ever price guarantee on an unlimited 4G LTE plan which allows current T-Mobile ONE customers to keep their price for service until they decide to change it.
|
•
|
In September 2017, we introduced, Un-carrier Next: Netflix On Us, through an exclusive new partnership with Netflix where qualifying T-Mobile ONE customers on family plans can opt in for a standard monthly Netflix service plan at no additional cost.
|
|
Year Ended December 31,
|
|
2017 Versus 2016
|
|
2016 Versus 2015
|
|||||||||||||||
(in thousands)
|
2017
|
|
2016
|
|
2015
|
# Change
|
|
% Change
|
|
# Change
|
|
% Change
|
||||||||
Net customer additions
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Branded postpaid customers
|
3,620
|
|
|
4,097
|
|
|
4,510
|
|
|
(477
|
)
|
|
(12
|
)%
|
|
(413
|
)
|
|
(9
|
)%
|
Branded prepaid customers
|
855
|
|
|
2,508
|
|
|
1,315
|
|
|
(1,653
|
)
|
|
(66
|
)%
|
|
1,193
|
|
|
91
|
%
|
Total branded customers
|
4,475
|
|
|
6,605
|
|
|
5,825
|
|
|
(2,130
|
)
|
|
(32
|
)%
|
|
780
|
|
|
13
|
%
|
|
Year Ended December 31,
|
|
Bps Change 2017 Versus 2016
|
|
Bps Change 2016 Versus 2015
|
|||||||
2017
|
|
2016
|
|
2015
|
|
|||||||
Branded postpaid phone churn
|
1.18
|
%
|
|
1.30
|
%
|
|
1.39
|
%
|
|
-12 bps
|
|
-9 bps
|
Branded prepaid churn
|
4.04
|
%
|
|
3.88
|
%
|
|
4.45
|
%
|
|
16 bps
|
|
-57 bps
|
(in millions, except per share amounts, ARPU, ABPU, and bad debt expense as a percentage of total revenues)
|
Year Ended December 31, 2017
|
||||||||||
Gross
|
|
Reimbursement
|
|
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
|
)
|
|||
Total revenues
|
(56
|
)
|
|
—
|
|
|
(56
|
)
|
|||
|
|
|
|
|
|
||||||
Operating expenses
|
|
|
|
|
|
||||||
Cost of services
|
198
|
|
|
(93
|
)
|
|
105
|
|
|||
Cost of equipment sales
|
4
|
|
|
—
|
|
|
4
|
|
|||
Selling, general and administrative
|
36
|
|
|
—
|
|
|
36
|
|
|||
Of which, bad debt expense
|
20
|
|
|
—
|
|
|
20
|
|
|||
Total operating expense
|
238
|
|
|
(93
|
)
|
|
145
|
|
|||
|
|
|
|
|
|
||||||
Operating income (loss)
|
$
|
(294
|
)
|
|
$
|
93
|
|
|
$
|
(201
|
)
|
Net income (loss)
|
$
|
(193
|
)
|
|
$
|
63
|
|
|
$
|
(130
|
)
|
|
|
|
|
|
|
||||||
Earnings per share - basic
|
$
|
(0.23
|
)
|
|
$
|
0.07
|
|
|
$
|
(0.16
|
)
|
Earnings per share - diluted
|
(0.22
|
)
|
|
0.07
|
|
|
(0.15
|
)
|
|||
|
|
|
|
|
|
||||||
Operating measures
|
|
|
|
|
|
||||||
Bad debt expense 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
|
$
|
(294
|
)
|
|
$
|
93
|
|
|
$
|
(201
|
)
|
•
|
Total revenues of
$40.6 billion
increased
$3.1 billion
, or
8%
. The increase was primarily driven by growth in service and equipment revenues as further discussed below. On September 1, 2016, we sold our marketing and distribution rights to certain existing T-Mobile co-branded customers to a current MVNO partner for nominal consideration. The MVNO Transaction shifted Branded postpaid revenues to Wholesale revenues, but did not materially impact total revenues.
|
•
|
Service revenues of
$30.2 billion
increased
$2.3 billion
, or
8%
. The increase was primarily due to growth in our average branded customer base as a result of strong customer response to our Un-carrier initiatives, promotions and the success of our MetroPCS brand.
|
•
|
Equipment revenues of
$9.4 billion
increased
$648 million
, or
7%
. The increase was primarily due to higher average revenue per device sold and an increase from customer purchases of leased devices at the end of the lease term, partially offset by lower lease revenues.
|
•
|
Operating income of
$4.9 billion
increased
$838 million
, or
21%
. The increase was primarily due to higher
Total service revenues
and lower
Depreciation and amortization
, partially offset by higher
Selling, general and administrative
, lower
Gains on disposal of spectrum licenses
and higher Cost of services expenses.
|
•
|
Net income of
$4.5 billion
increased
$3.1 billion
, or
211%
. The increase was primarily due to the impact of the Tax Cuts and Jobs Act of 2017 (the "TCJA"), which resulted in a net tax benefit of $2.2 billion in 2017, and higher operating income driven by the factors described above, partially offset by the negative impact from hurricanes. Net income included net, after-tax spectrum gains of
$174 million
and
$509 million
, for the
years ended
December 31, 2017
and
2016
, respectively.
|
•
|
Adjusted EBITDA, a non-GAAP financial measure, of
$11.2 billion
increased
$574 million
, or
5%
. The increase was primarily due to higher operating income driven by the factors described above, partially offset by lower Gains on disposal of spectrum licenses. Adjusted EBITDA included pre-tax spectrum gains of
$235 million
and
$835 million
for the
years ended
December 31, 2017
and
2016
, respectively.
|
•
|
Net cash provided by operating activities of
$8.0 billion
increased
$1.8 billion
, or
30%
. See “Liquidity and Capital Resources” section for additional information.
|
•
|
Free Cash Flow, a non-GAAP financial measure, of
$2.7 billion
increased
$1.3 billion
, or
90%
. See “Liquidity and Capital Resources” section for additional information.
|
|
Year Ended December 31,
|
|
2017 Versus 2016
|
|
2016 Versus 2015
|
||||||||||||||||||||
|
2017
|
|
2016
|
|
2015
|
|
$ Change
|
|
% Change
|
|
$ Change
|
|
% Change
|
||||||||||||
(in millions)
|
|
|
(As Adjusted - See
Note 1
)
|
|
|
|
|
|
|
|
|
||||||||||||||
Revenues
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Branded postpaid revenues
|
$
|
19,448
|
|
|
$
|
18,138
|
|
|
$
|
16,383
|
|
|
$
|
1,310
|
|
|
7
|
%
|
|
$
|
1,755
|
|
|
11
|
%
|
Branded prepaid revenues
|
9,380
|
|
|
8,553
|
|
|
7,553
|
|
|
827
|
|
|
10
|
%
|
|
1,000
|
|
|
13
|
%
|
|||||
Wholesale revenues
|
1,102
|
|
|
903
|
|
|
692
|
|
|
199
|
|
|
22
|
%
|
|
211
|
|
|
30
|
%
|
|||||
Roaming and other service revenues
|
230
|
|
|
250
|
|
|
193
|
|
|
(20
|
)
|
|
(8
|
)%
|
|
57
|
|
|
30
|
%
|
|||||
Total service revenues
|
30,160
|
|
|
27,844
|
|
|
24,821
|
|
|
2,316
|
|
|
8
|
%
|
|
3,023
|
|
|
12
|
%
|
|||||
Equipment revenues
|
9,375
|
|
|
8,727
|
|
|
6,718
|
|
|
648
|
|
|
7
|
%
|
|
2,009
|
|
|
30
|
%
|
|||||
Other revenues
|
1,069
|
|
|
919
|
|
|
928
|
|
|
150
|
|
|
16
|
%
|
|
(9
|
)
|
|
(1
|
)%
|
|||||
Total revenues
|
40,604
|
|
|
37,490
|
|
|
32,467
|
|
|
3,114
|
|
|
8
|
%
|
|
5,023
|
|
|
15
|
%
|
|||||
Operating expenses
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
Cost of services, exclusive of depreciation and amortization shown separately below
|
6,100
|
|
|
5,731
|
|
|
5,554
|
|
|
369
|
|
|
6
|
%
|
|
177
|
|
|
3
|
%
|
|||||
Cost of equipment sales
|
11,608
|
|
|
10,819
|
|
|
9,344
|
|
|
789
|
|
|
7
|
%
|
|
1,475
|
|
|
16
|
%
|
|||||
Selling, general and administrative
|
12,259
|
|
|
11,378
|
|
|
10,189
|
|
|
881
|
|
|
8
|
%
|
|
1,189
|
|
|
12
|
%
|
|||||
Depreciation and amortization
|
5,984
|
|
|
6,243
|
|
|
4,688
|
|
|
(259
|
)
|
|
(4
|
)%
|
|
1,555
|
|
|
33
|
%
|
|||||
Cost of MetroPCS business combination
|
—
|
|
|
104
|
|
|
376
|
|
|
(104
|
)
|
|
(100
|
)%
|
|
(272
|
)
|
|
(72
|
)%
|
|||||
Gains on disposal of spectrum licenses
|
(235
|
)
|
|
(835
|
)
|
|
(163
|
)
|
|
600
|
|
|
(72
|
)%
|
|
(672
|
)
|
|
NM
|
|
|||||
Total operating expense
|
35,716
|
|
|
33,440
|
|
|
29,988
|
|
|
2,276
|
|
|
7
|
%
|
|
3,452
|
|
|
12
|
%
|
|||||
Operating income
|
4,888
|
|
|
4,050
|
|
|
2,479
|
|
|
838
|
|
|
21
|
%
|
|
1,571
|
|
|
63
|
%
|
|||||
Other income (expense)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
Interest expense
|
(1,111
|
)
|
|
(1,418
|
)
|
|
(1,085
|
)
|
|
307
|
|
|
(22
|
)%
|
|
(333
|
)
|
|
31
|
%
|
|||||
Interest expense to affiliates
|
(560
|
)
|
|
(312
|
)
|
|
(411
|
)
|
|
(248
|
)
|
|
79
|
%
|
|
99
|
|
|
(24
|
)%
|
|||||
Interest income
|
17
|
|
|
13
|
|
|
6
|
|
|
4
|
|
|
31
|
%
|
|
7
|
|
|
117
|
%
|
|||||
Other expense, net
|
(73
|
)
|
|
(6
|
)
|
|
(11
|
)
|
|
(67
|
)
|
|
NM
|
|
|
5
|
|
|
(45
|
)%
|
|||||
Total other expense, net
|
(1,727
|
)
|
|
(1,723
|
)
|
|
(1,501
|
)
|
|
(4
|
)
|
|
—
|
%
|
|
(222
|
)
|
|
15
|
%
|
|||||
Income before income taxes
|
3,161
|
|
|
2,327
|
|
|
978
|
|
|
834
|
|
|
36
|
%
|
|
1,349
|
|
|
138
|
%
|
|||||
Income tax benefit (expense)
|
1,375
|
|
|
(867
|
)
|
|
(245
|
)
|
|
2,242
|
|
|
(259
|
)%
|
|
(622
|
)
|
|
254
|
%
|
|||||
Net income
|
$
|
4,536
|
|
|
$
|
1,460
|
|
|
$
|
733
|
|
|
$
|
3,076
|
|
|
211
|
%
|
|
$
|
727
|
|
|
99
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Net cash provided by operating activities
|
$
|
7,962
|
|
|
$
|
6,135
|
|
|
$
|
5,414
|
|
|
$
|
1,827
|
|
|
30
|
%
|
|
$
|
721
|
|
|
13
|
%
|
Net cash used in investing activities
|
(11,064
|
)
|
|
(5,680
|
)
|
|
(9,560
|
)
|
|
(5,384
|
)
|
|
95
|
%
|
|
3,880
|
|
|
(41
|
)%
|
|||||
Net cash (used in) provided by financing activities
|
(1,179
|
)
|
|
463
|
|
|
3,413
|
|
|
(1,642
|
)
|
|
(355
|
)%
|
|
(2,950
|
)
|
|
(86
|
)%
|
|||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Non-GAAP Financial Measures
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Adjusted EBITDA
|
$
|
11,213
|
|
|
$
|
10,639
|
|
|
$
|
7,807
|
|
|
$
|
574
|
|
|
5
|
%
|
|
$
|
2,832
|
|
|
36
|
%
|
Free Cash Flow
|
2,725
|
|
|
1,433
|
|
|
690
|
|
|
1,292
|
|
|
90
|
%
|
|
743
|
|
|
108
|
%
|
•
|
A
7%
increase in average branded postpaid phone customers, primarily from growth in our customer base driven by the continued strong customer response to our Un-carrier initiatives and promotions for services and devices, including the growing success of our business channel, T-Mobile for Business; and
|
•
|
The positive impact from a decrease in the non-cash net revenue deferral for Data Stash; partially offset by
|
•
|
A
1%
decrease in branded postpaid phone ARPU primarily driven by dilution from promotions targeting families and new segments;
|
•
|
The MVNO Transaction; and
|
•
|
The negative impact from hurricanes of approximately
$37 million
.
|
•
|
A
7%
increase in average branded prepaid customers primarily driven by growth in the customer base; and
|
•
|
A
2%
increase in branded prepaid ARPU from the success of our MetroPCS brand and the optimization of our third-party distribution channels; partially offset by
|
•
|
The negative impact from hurricanes of approximately
$11 million
.
|
•
|
An increase of $445 million in device sales revenues excluding purchased lease devices, primarily due to:
|
•
|
Higher average revenue per device sold due to an increase in the high-end device mix and the impacts of an OEM recall of its smartphone devices in 2016, partially offset by an increase in promotions and device-related commissions spending; partially offset by
|
•
|
A 2% decrease in the number of devices sold, excluding purchased lease devices, driven by a lower branded postpaid handset upgrade rate. Device sales revenue is recognized at the time of sale;
|
•
|
An increase of $395 million from customers' purchase of leased devices at the end of the lease term;
|
•
|
An increase of $231 million primarily related to proceeds from liquidation of returned customer handsets in 2017; and
|
•
|
An increase of $130 million in SIM and upgrade revenue; partially offset by
|
•
|
A decrease of $539 million in lease revenues from declining JUMP! On Demand population due to shifting focus to our EIP financing option beginning in the first quarter of 2016;
|
•
|
A decrease of $18 million in accessory revenue primarily related to the decrease in device sales volume; and
|
•
|
The negative impact from hurricanes of approximately
$8 million
.
|
•
|
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.
|
•
|
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, engineering and employee-related expenses associated with network expansion; and
|
•
|
The negative impact from hurricanes of
$105 million
, net of insurance recoveries; partially offset by
|
•
|
Lower long distance and toll costs as we continue to renegotiate contracts with vendors; and
|
•
|
Lower regulatory expenses.
|
•
|
An increase of $806 million in device cost of equipment sales, excluding purchased leased devices, primarily due to:
|
•
|
A higher average cost per device sold primarily from an increase in the high-end device mix and from the impact of an OEM recall of its smartphone devices in 2016; partially offset by
|
•
|
A 2% decrease in the number of devices sold, excluding purchased lease devices, driven by a lower branded postpaid handset upgrade rate.
|
•
|
An increase of $201 million in lease device cost of equipment sales, primarily due to:
|
•
|
An increase in lease buyouts as leases began reaching their term dates in 2017; partially offset by
|
•
|
A decrease in write downs to market value of devices returned to inventory resulting from a decrease in the number of leased device upgrades.
|
•
|
These increases are partially offset by a decrease of $159 million primarily related to:
|
•
|
A decrease in insurance and warranty claims;
|
•
|
Higher proceeds from liquidation of returned customer handsets under our insurance programs; and
|
•
|
Lower inventory adjustments related to physical adjustments and obsolete inventory; partially offset by
|
•
|
Higher costs from an increase in the volume of liquidated returned customer handsets outside of our insurance programs.
|
•
|
A decrease of $57 million in accessory cost primarily driven by the decrease in device sales volume.
|
•
|
Lower depreciation expense related to our JUMP! On Demand program resulting from a lower number of devices under lease. Under our JUMP! On Demand program, the cost of a leased wireless device is depreciated to its estimated residual value over the period expected to provide utility to us; partially offset by
|
•
|
The continued build-out of our 4G LTE network;
|
•
|
The implementation of the first component of our new billing system; and
|
•
|
Growth in our distribution footprint.
|
•
|
Operating income
, the components of which are discussed above, increased
$838 million
, or
21%
.
The negative impact from the hurricanes for the
year ended
December 31, 2017
was approximately
$201 million
, net of insurance recoveries.
|
•
|
Income tax benefit (expense)
changed
$2.2 billion
, from an expense of
$867 million
in 2016 to a benefit of
$1.4 billion
in 2017 primarily from:
|
•
|
A lower effective tax rate. The effective tax rate was a benefit of
43.5%
in
2017
, compared to an expense of
37.3%
in
2016
. The decrease in the effective income tax rate was primarily due to 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
|
•
|
A $319 million reduction in the valuation allowance against deferred tax assets in certain state jurisdictions in 2017; partially offset by
|
•
|
Higher income before income taxes.
|
•
|
Interest expense
decreased
$307 million
, or
22%
, primarily from:
|
•
|
A decrease from the early redemption of our $1.98 billion Senior Secured Term Loans and $8.3 billion of Senior Notes; partially offset by
|
•
|
An increase from the issuance of the $1.5 billion of Senior Notes in March 2017; and
|
•
|
An increase from the issuance of the $1.0 billion of Senior Notes in April 2016.
|
•
|
Interest expense to affiliates
increased
$248 million
, or
79%
, primarily from:
|
•
|
Issuance of $4.0 billion secured term loan facility with Deutsche Telekom AG ("DT") entered into in January 2017;
|
•
|
Issuance of a total of $4.0 billion in Senior Notes in May 2017;
|
•
|
An increase in drawings on our Revolving Credit Facility; and
|
•
|
Issuance of $500 million in Senior Notes in September 2017; partially offset by
|
•
|
A decrease from lower interest rates achieved through refinancing of a total of $2.5 billion of Senior Reset Notes in April 2017.
|
•
|
Other expense, net
increased
$67 million
primarily from:
|
•
|
A $73 million net loss recognized from the early redemption of certain Senior Notes; and
|
•
|
A $13 million net loss recognized from the refinancing of our outstanding Senior Secured Term Loans.
|
|
December 31,
2017 |
|
December 31,
2016 |
|
Change
|
|||||||||
(in millions)
|
$
|
|
%
|
|||||||||||
Other current assets
|
$
|
628
|
|
|
$
|
565
|
|
|
$
|
63
|
|
|
11
|
%
|
Property and equipment, net
|
306
|
|
|
375
|
|
|
(69
|
)
|
|
(18
|
)%
|
|||
Tower obligations
|
2,198
|
|
|
2,221
|
|
|
(23
|
)
|
|
(1
|
)%
|
|||
Total stockholders' deficit
|
(1,454
|
)
|
|
(1,374
|
)
|
|
(80
|
)
|
|
6
|
%
|
|
Year Ended December 31,
|
|
Change
|
|||||||||||
(in millions)
|
2017
|
|
2016
|
$
|
|
%
|
||||||||
Service revenues
|
$
|
2,113
|
|
|
$
|
2,023
|
|
|
$
|
90
|
|
|
4
|
%
|
Cost of equipment sales
|
1,003
|
|
|
1,027
|
|
|
(24
|
)
|
|
(2
|
)%
|
|||
Selling, general and administrative
|
856
|
|
|
868
|
|
|
(12
|
)
|
|
(1
|
)%
|
|||
Total comprehensive income
|
28
|
|
|
24
|
|
|
4
|
|
|
17
|
%
|
•
|
Higher
Service revenues
primarily due to the result of an increase in activity of the non-guarantor subsidiary that provides device insurance, primarily driven by growth in our customer base;
|
•
|
Lower
Cost of equipment sales
expenses primarily due to a decrease in device insurance claims and a decrease in higher cost devices used, partially offset by a decrease in device non-return fees charged to customers; and
|
•
|
Lower
Selling, general and administrative
expenses primarily due to a decrease in device insurance program service fees, partially offset by higher costs to support our growing customer base.
|
•
|
A 13% increase in the number of average branded postpaid phone and mobile broadband customers, driven by strong customer response to our Un-carrier initiatives and promotions for services and devices;
|
•
|
Higher device insurance program revenues primarily from customer growth; and
|
•
|
Higher regulatory program revenues; partially offset by
|
•
|
An increase in the non-cash net revenue deferral for Data Stash; and
|
•
|
The MVNO Transaction.
|
•
|
A 13% increase in the number of average branded prepaid customers driven by the success of our MetroPCS brand; and
|
•
|
Continued growth in new markets.
|
•
|
The MVNO Transaction;
|
•
|
Growth in customers of certain MVNO partners; and
|
•
|
An increase in data usage per customer.
|
•
|
An increase of $1.2 billion in lease revenues resulting from the launch of our JUMP! On Demand program at the end of the second quarter of 2015. Revenues associated with leased devices are recognized over the lease term; and
|
•
|
An increase of $570 million in device sales revenues, primarily due to a 9% increase in the number of devices sold. Device sales revenue is recognized at the time of sale.
|
•
|
An increase in sales of certain EIP receivables pursuant to our EIP receivables sales arrangement resulting from an increase in the maximum funding commitment in June 2016. Interest associated with EIP receivables is imputed at the time of a device sale and then recognized over the financed installment term. See
Note 2 - Receivables and Allowance for Credit Losses
of the Notes to the Consolidated Financial Statements included in Part II, Item 8 of this Form 10-K for further information; and
|
•
|
Focus on devices financed on JUMP! On Demand in the third and fourth quarters of 2015 following the launch of the program of at the end of the second quarter 2015; partially offset by
|
•
|
Higher revenue from revenue share agreements with third parties; and
|
•
|
An increase in co-location rental income from leasing space on wireless communication towers to third parties.
|
•
|
Higher regulatory program costs and expenses associated with network expansion and the build-out of our network to utilize our 700 MHz A-Block spectrum licenses, including higher employee-related costs; partially offset by
|
•
|
Lower long distance and toll costs; and
|
•
|
Synergies realized from the decommissioning of the MetroPCS CDMA network.
|
•
|
A 9% increase in the number of devices sold; and
|
•
|
An increase in the impact from returned and purchased leased devices.
|
•
|
Employee-related costs;
|
•
|
Commissions driven by an increase in branded customer additions; and
|
•
|
Promotional costs.
|
•
|
$1.5 billion in depreciation expense related to devices leased under our JUMP! On Demand program launched at the end of the second quarter of 2015. Under our JUMP! On Demand program, the cost of a leased wireless device is depreciated over the lease term to its estimated residual value. The total number of devices under lease was higher year-over-year, resulting in higher depreciation expense; and
|
•
|
The continued build-out of our 4G LTE network.
|
•
|
Operating income
, the components of which are discussed above, increased $1.6 billion, or 63%.
|
•
|
Interest expense to affiliates
decreased $99 million, or 24%, primarily from:
|
•
|
Changes in the fair value of embedded derivative instruments associated with our Senior Reset Notes issued to Deutsch Telekom in 2015; partially offset by
|
•
|
Higher interest rates on certain Senior Reset Notes issued to Deutsch Telekom, which were adjusted at reset dates in the second quarter of 2016 and in 2015.
|
•
|
Income tax expense
increased $622 million, or 254%, primarily from:
|
•
|
Higher income before income taxes; and
|
•
|
A higher effective tax rate. The effective tax rate was 37.3% in 2016, compared to 25.1% in 2015. The increase in the effective income tax rate was primarily due to income tax benefits for discrete income tax items recognized in 2015 that did not impact 2016; partially offset by the recognition of $58 million of excess tax benefits related to share-based payments following the adoption of ASU 2016-09 as of January 1, 2016.
|
•
|
Interest expense
increased $333 million, or 31%, primarily from:
|
•
|
Higher average debt balances with third parties; and
|
•
|
Lower capitalized interest costs of $83 million primarily due to a higher level of build out of our network to utilize our 700 MHz A-Block spectrum licenses in 2015, compared to 2016.
|
|
December 31,
2016 |
|
December 31,
2015 |
|
Change
|
|||||||||
(in millions)
|
$
|
|
%
|
|||||||||||
Other current assets
|
$
|
565
|
|
|
$
|
400
|
|
|
$
|
165
|
|
|
41
|
%
|
Property and equipment, net
|
375
|
|
|
454
|
|
|
(79
|
)
|
|
(17
|
)%
|
|||
Tower obligations
|
2,221
|
|
|
2,247
|
|
|
(26
|
)
|
|
(1
|
)%
|
|||
Total stockholders' deficit
|
(1,374
|
)
|
|
(1,359
|
)
|
|
(15
|
)
|
|
(1
|
)%
|
|
December 31,
2017 |
|
December 31,
2016 |
|
December 31,
2015 |
|
2017 Versus 2016
|
|
2016 Versus 2015
|
|||||||||||
(in thousands)
|
# Change
|
|
% Change
|
# Change
|
|
% Change
|
||||||||||||||
Customers, end of period
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Branded postpaid phone customers
(1)
|
34,114
|
|
|
31,297
|
|
|
29,355
|
|
|
2,817
|
|
|
9
|
%
|
|
1,942
|
|
|
7
|
%
|
Branded postpaid other customers
(1)
|
3,933
|
|
|
3,130
|
|
|
2,340
|
|
|
803
|
|
|
26
|
%
|
|
790
|
|
|
34
|
%
|
Total branded postpaid customers
|
38,047
|
|
|
34,427
|
|
|
31,695
|
|
|
3,620
|
|
|
11
|
%
|
|
2,732
|
|
|
9
|
%
|
Branded prepaid customers
|
20,668
|
|
|
19,813
|
|
|
17,631
|
|
|
855
|
|
|
4
|
%
|
|
2,182
|
|
|
12
|
%
|
Total branded customers
|
58,715
|
|
|
54,240
|
|
|
49,326
|
|
|
4,475
|
|
|
8
|
%
|
|
4,914
|
|
|
10
|
%
|
Wholesale customers
(2)
|
13,870
|
|
|
17,215
|
|
|
13,956
|
|
|
(3,345
|
)
|
|
(19
|
)%
|
|
3,259
|
|
|
23
|
%
|
Total customers, end of period
|
72,585
|
|
|
71,455
|
|
|
63,282
|
|
|
1,130
|
|
|
2
|
%
|
|
8,173
|
|
|
13
|
%
|
Adjustments to branded postpaid phone customers
(3)
|
—
|
|
|
(1,365
|
)
|
|
—
|
|
|
1,365
|
|
|
(100
|
)%
|
|
(1,365
|
)
|
|
NM
|
|
Adjustments to branded prepaid customers
(3)
|
—
|
|
|
(326
|
)
|
|
—
|
|
|
326
|
|
|
(100
|
)%
|
|
(326
|
)
|
|
NM
|
|
Adjustments to wholesale customers
(3)
|
—
|
|
|
1,691
|
|
|
—
|
|
|
(1,691
|
)
|
|
(100
|
)%
|
|
1,691
|
|
|
NM
|
|
(1)
|
During 2017, we retitled our “Branded postpaid mobile broadband customers” category to “Branded postpaid other customers” and reclassified DIGITS customers from our “Branded postpaid phone customers” category for the second quarter of 2017, when the DIGITS product was released.
|
(2)
|
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.
|
(3)
|
The MVNO Transaction resulted in a transfer of Branded postpaid phone customers and Branded prepaid customers to Wholesale customers on September 1, 2016. Prospectively from September 1, 2016, net customer additions for these customers are included within Wholesale customers.
|
•
|
Higher branded postpaid phone customers driven by the continued strong customer response to our Un-carrier initiatives and promotional activities, the growing success of our business channel, T-Mobile for Business, continued growth in existing markets and distribution expansion to new Greenfield markets, and lower churn, partially offset by increased competitive activity in the marketplace with all competitors having launched Unlimited rate plans in the first quarter of 2017;
|
•
|
Higher branded prepaid customers driven by the continued success of our Metro PCS brand and continued growth from distribution expansion, partially offset by the optimization of our third-party distribution channels; and
|
•
|
Higher branded postpaid other customers primarily due to higher connected devices
and DIGITS.
|
•
|
Higher branded prepaid customers driven by the success of our MetroPCS brand, continued growth in new markets and distribution expansion, partially offset by the optimization of our third-party distribution channels; and
|
•
|
Higher branded postpaid customers driven by strong customer response to our Un-carrier initiatives and promotional activities, partially offset by higher deactivations on a growing customer base.
|
|
Year Ended December 31,
|
|
2017 Versus 2016
|
|
2016 Versus 2015
|
|||||||||||||||
(in thousands)
|
2017
|
|
2016
|
|
2015
|
# Change
|
|
% Change
|
# Change
|
|
% Change
|
|||||||||
Net customer additions
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Branded postpaid phone customers
(1)
|
2,817
|
|
|
3,307
|
|
|
3,511
|
|
|
(490
|
)
|
|
(15
|
)%
|
|
(204
|
)
|
|
(6
|
)%
|
Branded postpaid other customers
(1)
|
803
|
|
|
790
|
|
|
999
|
|
|
13
|
|
|
2
|
%
|
|
(209
|
)
|
|
(21
|
)%
|
Total branded postpaid customers
|
3,620
|
|
|
4,097
|
|
|
4,510
|
|
|
(477
|
)
|
|
(12
|
)%
|
|
(413
|
)
|
|
(9
|
)%
|
Branded prepaid customers
|
855
|
|
|
2,508
|
|
|
1,315
|
|
|
(1,653
|
)
|
|
(66
|
)%
|
|
1,193
|
|
|
91
|
%
|
Total branded customers
|
4,475
|
|
|
6,605
|
|
|
5,825
|
|
|
(2,130
|
)
|
|
(32
|
)%
|
|
780
|
|
|
13
|
%
|
Wholesale customers
(2)
|
1,183
|
|
|
1,568
|
|
|
2,439
|
|
|
(385
|
)
|
|
(25
|
)%
|
|
(871
|
)
|
|
(36
|
)%
|
Total net customer additions
|
5,658
|
|
|
8,173
|
|
|
8,264
|
|
|
(2,515
|
)
|
|
(31
|
)%
|
|
(91
|
)
|
|
(1
|
)%
|
(1)
|
During 2017, we retitled our “Branded postpaid mobile broadband customers” category to “Branded postpaid other customers” and reclassified DIGITS customer net additions from our “Branded postpaid phone customers” category for the second quarter of 2017, when the DIGITS product was released.
|
(2)
|
Net customer activity for Lifeline was excluded beginning in the second quarter of 2017 due to our determination based upon changes in the applicable government regulations that the Lifeline program offered by our wholesale partners is uneconomical.
|
•
|
Lower branded prepaid net customer additions primarily due to higher deactivations from a growing customer base, increased competitive activity in the marketplace and de-emphasis of the T-Mobile prepaid brand. Additional decreases resulted from the optimization of our third-party distribution channels; and
|
•
|
Lower branded postpaid phone net customer additions primarily due to increased competitive activity in the marketplace partially offset by the continued strong customer response to our Un-carrier initiatives and promotional activities, the growing success of our business channel, T-Mobile for Business, continued growth in new markets and distribution expansion to new Greenfield markets, and lower churn; partially offset by
|
•
|
Higher branded postpaid other net customer additions primarily due to higher gross customer additions from connected devices and DIGITS, offset by higher deactivations from a growing customer base.
|
•
|
Higher branded prepaid net customer additions primarily due to the success of our MetroPCS brand, continued growth in new markets and distribution expansion, partially offset by an increase in the number of qualified branded prepaid customers migrating to branded postpaid plans; partially offset by
|
•
|
Lower branded postpaid mobile broadband net customer additions primarily due to higher deactivations resulting from churn on a growing branded postpaid mobile broadband customer base, partially offset by higher gross customer
|
•
|
Lower branded postpaid phone net customer additions primarily due to lower gross customer additions from higher deactivations on a growing customer base, partially offset by lower churn as well as an increase in the number of qualified branded prepaid customers migrating to branded postpaid plans as well as the optimization of our third-party distribution channels.
|
|
December 31,
2017 |
|
December 31,
2016 |
|
December 31,
2015 |
|
Change
|
|
Change
|
|||||||||||
#
|
|
%
|
#
|
|
%
|
|||||||||||||||
Branded postpaid customers per account
|
2.93
|
|
|
2.86
|
|
|
2.54
|
|
|
0.07
|
|
|
2
|
%
|
|
0.32
|
|
|
13
|
%
|
|
Year Ended December 31,
|
|
Bps Change 2017 Versus 2016
|
|
Bps Change 2016 Versus 2015
|
|||||||
2017
|
|
2016
|
|
2015
|
||||||||
Branded postpaid phone churn
|
1.18
|
%
|
|
1.30
|
%
|
|
1.39
|
%
|
|
-12 bps
|
|
-9 bps
|
Branded prepaid churn
|
4.04
|
%
|
|
3.88
|
%
|
|
4.45
|
%
|
|
16 bps
|
|
-57 bps
|
•
|
The MVNO Transaction as the customers transferred had a higher rate of churn; and
|
•
|
Increased customer satisfaction and loyalty from ongoing improvements to network quality, customer service and the overall value of our offerings in the marketplace.
|
•
|
The MVNO Transaction as the customers transferred had a higher rate of churn; and
|
•
|
Increased customer satisfaction and loyalty from ongoing improvements to network quality, customer service and the overall value of our offerings in the marketplace.
|
•
|
A decrease in certain customers, which have a higher rate of branded prepaid churn;
|
•
|
Strong performance of the MetroPCS brand; and
|
•
|
A methodology change in the third quarter of 2015 as discussed below.
|
(in millions, except average number of customers, ARPU and ABPU)
|
Year Ended December 31,
|
|
2017 Versus 2016
|
|
2016 Versus 2015
|
||||||||||||||||||||
2017
|
|
2016
|
|
2015
|
$ Change
|
|
% Change
|
$ Change
|
|
% Change
|
|||||||||||||||
Calculation of Branded Postpaid Phone ARPU
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Branded postpaid service revenues
|
$
|
19,448
|
|
|
$
|
18,138
|
|
|
$
|
16,383
|
|
|
$
|
1,310
|
|
|
7
|
%
|
|
$
|
1,755
|
|
|
11
|
%
|
Less: Branded postpaid other revenues
|
(1,077
|
)
|
|
(773
|
)
|
|
(588
|
)
|
|
(304
|
)
|
|
39
|
%
|
|
(185
|
)
|
|
31
|
%
|
|||||
Branded postpaid phone service revenues
|
$
|
18,371
|
|
|
$
|
17,365
|
|
|
$
|
15,795
|
|
|
$
|
1,006
|
|
|
6
|
%
|
|
$
|
1,570
|
|
|
10
|
%
|
Divided by: Average number of branded postpaid phone customers (in thousands) and number of months in period
|
32,596
|
|
|
30,484
|
|
|
27,604
|
|
|
2,112
|
|
|
7
|
%
|
|
2,880
|
|
|
10
|
%
|
|||||
Branded postpaid phone ARPU
(1)
|
$
|
46.97
|
|
|
$
|
47.47
|
|
|
$
|
47.68
|
|
|
$
|
(0.50
|
)
|
|
(1
|
)%
|
|
$
|
(0.21
|
)
|
|
—
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Calculation of Branded Postpaid ABPU
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Branded postpaid service revenues
|
$
|
19,448
|
|
|
$
|
18,138
|
|
|
$
|
16,383
|
|
|
$
|
1,310
|
|
|
7
|
%
|
|
$
|
1,755
|
|
|
11
|
%
|
EIP billings
|
5,866
|
|
|
5,432
|
|
|
5,494
|
|
|
434
|
|
|
8
|
%
|
|
(62
|
)
|
|
(1
|
)%
|
|||||
Lease revenues
|
877
|
|
|
1,416
|
|
|
224
|
|
|
(539
|
)
|
|
(38
|
)%
|
|
1,192
|
|
|
532
|
%
|
|||||
Total billings for branded postpaid customers
|
$
|
26,191
|
|
|
$
|
24,986
|
|
|
$
|
22,101
|
|
|
$
|
1,205
|
|
|
5
|
%
|
|
$
|
2,885
|
|
|
13
|
%
|
Divided by: Average number of branded postpaid customers (in thousands) and number of months in period
|
36,079
|
|
|
33,184
|
|
|
29,341
|
|
|
2,895
|
|
|
9
|
%
|
|
3,843
|
|
|
13
|
%
|
|||||
Branded postpaid ABPU
|
$
|
60.49
|
|
|
$
|
62.75
|
|
|
$
|
62.77
|
|
|
$
|
(2.26
|
)
|
|
(4
|
)%
|
|
$
|
(0.02
|
)
|
|
—
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Calculation of Branded Prepaid ARPU
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Branded prepaid service revenues
|
$
|
9,380
|
|
|
$
|
8,553
|
|
|
$
|
7,553
|
|
|
$
|
827
|
|
|
10
|
%
|
|
$
|
1,000
|
|
|
13
|
%
|
Divided by: Average number of branded prepaid customers (in thousands) and number of months in period
|
20,204
|
|
|
18,797
|
|
|
16,704
|
|
|
1,407
|
|
|
7
|
%
|
|
2,093
|
|
|
13
|
%
|
|||||
Branded prepaid ARPU
|
$
|
38.69
|
|
|
$
|
37.92
|
|
|
$
|
37.68
|
|
|
$
|
0.77
|
|
|
2
|
%
|
|
$
|
0.24
|
|
|
1
|
%
|
(1)
|
Branded postpaid phone ARPU includes the reclassification of
43,000
DIGITS average customers and related revenue to the “Branded postpaid other customers” category for the second quarter of 2017.
|
•
|
Dilution from promotions targeting families and new segments; and
|
•
|
The negative impact from hurricanes of approximately
$0.09
; partially offset by
|
•
|
The MVNO Transaction as those customers had a lower ARPU; and
|
•
|
A decrease in the non-cash net revenue deferral for Data Stash.
|
•
|
Decreases due to an increase in the non-cash net revenue deferral for Data Stash; and
|
•
|
Dilution from promotional activities; partially offset by
|
•
|
Higher data attach rates;
|
•
|
The positive impact from our T-Mobile ONE rate plans prior to the release of Un-carrier Next in 2017 which began including taxes and fees;
|
•
|
The transfer of customers as part of the MVNO Transaction as those customers had lower ARPU;
|
•
|
Continued growth of our insurance programs; and
|
•
|
Higher regulatory program revenues.
|
•
|
Lower lease revenues;
|
•
|
Growth in the branded postpaid other customer base with lower ARPU; and
|
•
|
The negative impact from hurricanes of approximately
$0.08
.
|
•
|
Lower EIP billings due to the impact of our JUMP! On Demand program launched at the end of the second quarter of 2015;
|
•
|
Lower branded postpaid phone ARPU, as described above; and
|
•
|
Dilution from increased penetration of mobile broadband devices; partially offset by
|
•
|
An increase in lease revenues.
|
•
|
Continued growth of MetroPCS customers who generate higher ARPU; and
|
•
|
The optimization of our third-party distribution channels; partially offset by
|
•
|
The negative impact from hurricanes of approximately
$0.05
.
|
•
|
A decrease in certain customers that had lower average branded prepaid ARPU, as well as higher data attach rates; partially offset by
|
•
|
Dilution from growth of customers on rate plan promotions.
|
|
Year Ended December 31,
|
|
2017 Versus 2016
|
|
2016 Versus 2015
|
||||||||||||||||||||
(in millions)
|
2017
|
|
2016
|
|
2015
|
$ Change
|
|
% Change
|
$ Change
|
|
% Change
|
||||||||||||||
Net income
|
$
|
4,536
|
|
|
$
|
1,460
|
|
|
$
|
733
|
|
|
$
|
3,076
|
|
|
211
|
%
|
|
$
|
727
|
|
|
99
|
%
|
Adjustments:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Interest expense
|
1,111
|
|
|
1,418
|
|
|
1,085
|
|
|
(307
|
)
|
|
(22
|
)%
|
|
333
|
|
|
31
|
%
|
|||||
Interest expense to affiliates
|
560
|
|
|
312
|
|
|
411
|
|
|
248
|
|
|
79
|
%
|
|
(99
|
)
|
|
(24
|
)%
|
|||||
Interest income
(1)
|
(17
|
)
|
|
(13
|
)
|
|
(6
|
)
|
|
(4
|
)
|
|
31
|
%
|
|
(7
|
)
|
|
117
|
%
|
|||||
Other (income) expense, net
|
73
|
|
|
6
|
|
|
11
|
|
|
67
|
|
|
1,117
|
%
|
|
(5
|
)
|
|
(45
|
)%
|
|||||
Income tax expense (benefit)
|
(1,375
|
)
|
|
867
|
|
|
245
|
|
|
(2,242
|
)
|
|
(259
|
)%
|
|
622
|
|
|
254
|
%
|
|||||
Operating income
(1)
|
4,888
|
|
|
4,050
|
|
|
2,479
|
|
|
838
|
|
|
21
|
%
|
|
1,571
|
|
|
63
|
%
|
|||||
Depreciation and amortization
|
5,984
|
|
|
6,243
|
|
|
4,688
|
|
|
(259
|
)
|
|
(4
|
)%
|
|
1,555
|
|
|
33
|
%
|
|||||
Cost of MetroPCS business combination
(2)
|
—
|
|
|
104
|
|
|
376
|
|
|
(104
|
)
|
|
(100
|
)%
|
|
(272
|
)
|
|
(72
|
)%
|
|||||
Stock-based compensation
(3)
|
307
|
|
|
235
|
|
|
222
|
|
|
72
|
|
|
31
|
%
|
|
13
|
|
|
6
|
%
|
|||||
Other, net
(4)
|
34
|
|
|
7
|
|
|
42
|
|
|
27
|
|
|
386
|
%
|
|
(35
|
)
|
|
(83
|
)%
|
|||||
Adjusted EBITDA
(1)
|
$
|
11,213
|
|
|
$
|
10,639
|
|
|
$
|
7,807
|
|
|
$
|
574
|
|
|
5
|
%
|
|
$
|
2,832
|
|
|
36
|
%
|
Net income margin (Net income divided by service revenues)
|
15
|
%
|
|
5
|
%
|
|
3
|
%
|
|
|
|
|
1000 bps
|
|
|
|
|
200 bps
|
|
||||||
Adjusted EBITDA margin (Adjusted EBITDA divided by service revenues)
(1)
|
37
|
%
|
|
38
|
%
|
|
31
|
%
|
|
|
|
|
-100 bps
|
|
|
|
|
700 bps
|
|
(1)
|
The amortized imputed discount on EIP receivables previously recognized as Interest income has been retrospectively re-classified as Other revenues. See the table below and
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)
|
Beginning in the first quarter of 2017, the Company will no longer separately present Cost of MetroPCS business combination as it is insignificant.
|
(3)
|
Stock-based compensation includes payroll tax impacts and may not agree to stock-based compensation expense in the consolidated financial statements.
|
(4)
|
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, and are therefore excluded in Adjusted EBITDA.
|
•
|
An increase in branded postpaid and prepaid service revenues primarily due to strong customer response to our Un-carrier initiatives, the ongoing success of our promotional activities, and the continued strength of our MetroPCS brand;
|
•
|
Higher wholesale revenues; and
|
•
|
Higher other revenues; partially offset by
|
•
|
Higher selling, general and administrative expenses;
|
•
|
Lower gains on disposal of spectrum licenses of
$600 million
; gains on disposal were
$235 million
for the
year ended
December 31, 2017
, compared to
$835 million
in the same period in
2016
;
|
•
|
Higher cost of services expense;
|
•
|
Higher net losses on equipment; and
|
•
|
The negative impact from hurricanes of approximately
$201 million
, net of insurance recoveries.
|
•
|
Increased branded postpaid and prepaid service revenues primarily due to strong customer response to our Un-carrier initiatives and the ongoing success of our promotional activities;
|
•
|
Higher gains on disposal of spectrum licenses of $672 million; gains on disposal were $835 million in 2016 compared to $163 million in 2015;
|
•
|
Lower losses on equipment; and
|
•
|
Focused cost control and synergies realized from the MetroPCS business combination, primarily in cost of services; partially offset by
|
•
|
Higher selling, general and administrative.
|
|
Year Ended December 31, 2016
|
|
Year Ended December 31, 2015
|
||||||||||||||||||||
(in millions)
|
As Filed
|
|
Change in Accounting Principle
|
|
As Adjusted
|
|
As Filed
|
|
Change in Accounting Principle
|
|
As Adjusted
|
||||||||||||
Operating income
|
$
|
3,802
|
|
|
$
|
248
|
|
|
$
|
4,050
|
|
|
$
|
2,065
|
|
|
$
|
414
|
|
|
$
|
2,479
|
|
Interest income
|
261
|
|
|
(248
|
)
|
|
13
|
|
|
420
|
|
|
(414
|
)
|
|
6
|
|
||||||
Net income
|
1,460
|
|
|
—
|
|
|
1,460
|
|
|
733
|
|
|
—
|
|
|
733
|
|
||||||
Net income as a percentage of service revenue
|
5
|
%
|
|
—
|
%
|
|
5
|
%
|
|
3
|
%
|
|
—
|
%
|
|
3
|
%
|
||||||
Adjusted EBITDA
|
$
|
10,391
|
|
|
$
|
248
|
|
|
$
|
10,639
|
|
|
$
|
7,393
|
|
|
$
|
414
|
|
|
$
|
7,807
|
|
Adjusted EBITDA margin (Adjusted EBITDA divided by service revenues)
|
37
|
%
|
|
1
|
%
|
|
38
|
%
|
|
30
|
%
|
|
1
|
%
|
|
31
|
%
|
|
Year Ended December 31,
|
|
2017 Versus 2016
|
|
2016 Versus 2015
|
||||||||||||||||||||
(in millions)
|
2017
|
|
2016
|
|
2015
|
|
$ Change
|
|
% Change
|
|
$ Change
|
|
% Change
|
||||||||||||
Net cash provided by operating activities
|
$
|
7,962
|
|
|
$
|
6,135
|
|
|
$
|
5,414
|
|
|
$
|
1,827
|
|
|
30
|
%
|
|
$
|
721
|
|
|
13
|
%
|
Net cash used in investing activities
|
(11,064
|
)
|
|
(5,680
|
)
|
|
(9,560
|
)
|
|
(5,384
|
)
|
|
95
|
%
|
|
3,880
|
|
|
(41
|
)%
|
|||||
Net cash (used in) provided by financing activities
|
(1,179
|
)
|
|
463
|
|
|
3,413
|
|
|
(1,642
|
)
|
|
(355
|
)%
|
|
(2,950
|
)
|
|
(86
|
)%
|
•
|
$3.1 billion
increase
in Net income;
|
•
|
$2.0 billion
decrease
in net non-cash adjustments to Net income primarily due to changes in Deferred income tax expense and Depreciation and amortization, partially offset by Gains on disposal of spectrum licenses; and
|
•
|
$757 million
decrease
in net cash outflows from changes in working capital primarily due to improvements in Accounts payable and accrued liabilities, Deferred purchase price from sales of receivables and Accounts receivable, partially offset by changes in Equipment installment plan receivables and Other current and long-term assets and liabilities.
The change in EIP receivables was primarily due to a decrease in net cash proceeds from the sale of EIP receivables as the year ended
December 31, 2016
benefited from net cash proceeds of
$361 million
related to upsizing of the EIP securitization facility
.
|
•
|
$727 million
increase
in Net income;
|
•
|
$1.4 billion
increase
in net non-cash income and expenses included in Net income primarily due to changes in Depreciation and amortization, Deferred income tax expense and Gains on disposal of spectrum licenses; partially offset by
|
•
|
$1.4 billion
increase
in net cash outflows from changes in working capital primarily due to changes in Accounts payable and accrued liabilities of
$1.9 billion
as well as the change in Equipment installment plan receivables, including inflows from the sale of certain EIP receivables, partially offset by the change in Inventories. Net cash used for Accounts payable and accrued liabilities was
$1.2 billion
in
2016
as compared to net cash provided by Accounts payable and accrued liabilities of
$693 million
in
2015
. Net cash proceeds from the sale of EIP and service receivables was
$536 million
in 2016 as compared to
$884 million
in
2015
.
|
•
|
A
$3.0 billion
decrease
in
Sales of short-term investments
;
|
•
|
A
$1.9 billion
increase
in
Purchases of spectrum licenses and other intangible assets, including deposits
,
primarily driven by our winning bid for
1,525
licenses in the 600 MHz spectrum auction during the second quarter of 2017; and
|
•
|
A
$535 million
increase 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 beginning deployment of 600 MHz.
|
•
|
$4.7 billion
for Purchases of property and equipment, including capitalized interest of
$142 million
primarily related to the build-out of our 4G LTE network;
|
•
|
$4.0 billion
for Purchases of spectrum licenses and other intangible assets, including a
$2.2 billion
deposit made to a third party in connection with a potential asset purchase; partially offset by
|
•
|
$3.0 billion
in Sales of short-term investments.
|
•
|
$10.2 billion
for
Repayments of long-term debt
;
|
•
|
$2.9 billion
for Repayments of our revolving credit facility;
|
•
|
$486 million
for
Repayments of capital lease obligations
;
|
•
|
$427 million
for Repurchases of common shares; and
|
•
|
$300 million
for
Repayments of short-term debt for purchases of inventory, property and equipment, net
; partially offset by
|
•
|
$10.5 billion
in
Proceeds from issuance of long-term debt
; and
|
•
|
$2.9 billion
in Proceeds from borrowing on our revolving credit facility.
|
•
|
$997 million
in Proceeds from issuance of long-term debt; partially offset by
|
•
|
$205 million
for Repayments of capital lease obligations;
|
•
|
$150 million
for Repayments of short-term debt for purchases of inventory, property and equipment, net; and
|
•
|
$121 million
for Tax withholdings on share-based awards.
|
|
Year Ended December 31,
|
|
2017 Versus 2016
|
|
2016 Versus 2015
|
||||||||||||||||||||
(in millions)
|
2017
|
|
2016
|
|
2015
|
|
$ Change
|
|
% Change
|
|
$ Change
|
|
% Change
|
||||||||||||
Net cash provided by operating activities
|
$
|
7,962
|
|
|
$
|
6,135
|
|
|
$
|
5,414
|
|
|
$
|
1,827
|
|
|
30
|
%
|
|
$
|
721
|
|
|
13
|
%
|
Cash purchases of property and equipment
|
(5,237
|
)
|
|
(4,702
|
)
|
|
(4,724
|
)
|
|
(535
|
)
|
|
11
|
%
|
|
22
|
|
|
—
|
%
|
|||||
Free Cash Flow
|
$
|
2,725
|
|
|
$
|
1,433
|
|
|
$
|
690
|
|
|
$
|
1,292
|
|
|
90
|
%
|
|
$
|
743
|
|
|
108
|
%
|
•
|
Higher net cash provided by operating activities, as described above; partially offset by
|
•
|
Higher purchases of property and equipment primarily due to growth in network build as we deployed 700 MHz spectrum and began to deploy 600 MHz. Cash purchases of property and equipment includes capitalized interest of
$136 million
and
$142 million
for
2017
and
2016
, respectively.
|
•
|
Higher net cash provided by operating activities, as described above; and
|
•
|
Lower purchases of property and equipment from the build-out of our 4G LTE network in 2016, as described above. Cash purchases of property and equipment includes capitalized interest of
$142 million
and
$246 million
for
2016
and
2015
, respectively.
|
(in millions)
|
Principal Issuances
|
|
Issuance Costs
|
|
Net Proceeds from Issuance of Long-Term Debt
|
||||||
4.000% Senior Notes due 2022
|
$
|
500
|
|
|
$
|
2
|
|
|
$
|
498
|
|
5.125% Senior Notes due 2025
|
500
|
|
|
2
|
|
|
498
|
|
|||
5.375% Senior Notes due 2027
|
500
|
|
|
1
|
|
|
499
|
|
|||
Total of Senior Notes issued
|
$
|
1,500
|
|
|
$
|
5
|
|
|
$
|
1,495
|
|
(in millions)
|
Principal Amount
|
|
Write-off of Premiums, Discounts and Issuance Costs
(1)
|
|
Call Penalties
(1) (2)
|
|
Redemption
Date |
|
Redemption Price
|
|||||||
6.625% Senior Notes due 2020
|
$
|
1,000
|
|
|
$
|
(45
|
)
|
|
$
|
22
|
|
|
February 10, 2017
|
|
102.208
|
%
|
5.250% Senior Notes due 2018
|
500
|
|
|
1
|
|
|
7
|
|
|
March 4, 2017
|
|
101.313
|
%
|
|||
6.250% Senior Notes due 2021
|
1,750
|
|
|
(71
|
)
|
|
55
|
|
|
April 1, 2017
|
|
103.125
|
%
|
|||
6.464% Senior Notes due 2019
|
1,250
|
|
|
—
|
|
|
—
|
|
|
April 28, 2017
|
|
100.000
|
%
|
|||
6.542% Senior Notes due 2020
|
1,250
|
|
|
—
|
|
|
21
|
|
|
April 28, 2017
|
|
101.636
|
%
|
|||
6.633% Senior Notes due 2021
|
1,250
|
|
|
—
|
|
|
41
|
|
|
April 28, 2017
|
|
103.317
|
%
|
|||
6.731% Senior Notes due 2022
|
1,250
|
|
|
—
|
|
|
42
|
|
|
April 28, 2017
|
|
103.366
|
%
|
|||
Total note redemptions
|
$
|
8,250
|
|
|
$
|
(115
|
)
|
|
$
|
188
|
|
|
|
|
|
(1)
|
Write-off of premiums, discounts, issuance costs and call penalties are included in
Other expense, net
in our
Consolidated Statements of Comprehensive Income
. Write-off of premiums, discounts and issuance costs are included in
Other, net
within
Net cash provided by operating activities
in our
Consolidated Statements of Cash Flows
.
|
(2)
|
The call penalty is the excess paid over the principal amount. Call penalties are included within
Net cash provided by operating activities
in our
Consolidated Statements of Cash Flows
.
|
(in millions)
|
Net Proceeds from Issuance of Long-Term Debt
|
|
Extinguishments
|
|
Write-off of Discounts and Issuance Costs
(1)
|
||||||
LIBOR plus 2.00% Senior Secured Term Loan due 2022
|
$
|
2,000
|
|
|
$
|
—
|
|
|
$
|
—
|
|
LIBOR plus 2.00% Senior Secured Term Loan due 2024
|
2,000
|
|
|
—
|
|
|
—
|
|
|||
LIBOR plus 2.750% Senior Secured Term Loan
(2)
|
—
|
|
|
(1,980
|
)
|
|
13
|
|
|||
Total
|
$
|
4,000
|
|
|
$
|
(1,980
|
)
|
|
$
|
13
|
|
(1)
|
Write-off of discounts and issuance costs are included in
Other expense, net
in our
Consolidated Statements of Comprehensive Income
and
Other, net
within
Net cash provided by operating activities
in our
Consolidated Statements of Cash Flows
.
|
(2)
|
Our Senior Secured Term Loan extinguished during the
year ended
December 31, 2017
was Third Party debt.
|
(in millions)
|
Principal Issuances (Redemptions)
|
|
Discounts
(1)
|
|
Net Proceeds from Issuance of Long-Term Debt
|
||||||
4.000% Senior Notes due 2022
|
$
|
1,000
|
|
|
$
|
(23
|
)
|
|
$
|
977
|
|
5.125% Senior Notes due 2025
|
1,250
|
|
|
(28
|
)
|
|
1,222
|
|
|||
5.375% Senior Notes due 2027
(2)
|
1,250
|
|
|
(28
|
)
|
|
1,222
|
|
|||
6.288% Senior Reset Notes due 2019
|
(1,250
|
)
|
|
—
|
|
|
(1,250
|
)
|
|||
6.366% Senior Reset Notes due 2020
|
(1,250
|
)
|
|
—
|
|
|
(1,250
|
)
|
|||
Total
|
$
|
1,000
|
|
|
$
|
(79
|
)
|
|
$
|
921
|
|
(1)
|
Discounts reduce
Proceeds from issuance of long-term debt
and are included within
Net cash (used in) provided by financing activities
in our
Consolidated Statements of Cash Flows
.
|
(2)
|
In April 2017, we issued to DT
$750 million
in aggregate principal amount of the
5.375% Senior Notes due 2027
, and in September 2017, we issued to DT the remaining
$500 million
in aggregate principal amount of the
5.375% Senior Notes due 2027
.
|
(in millions)
|
Principal Issuances
|
|
Premium
|
|
Net Proceeds from Issuance of Long-Term Debt
|
||||||
5.300% Senior Notes due 2021
|
$
|
2,000
|
|
|
$
|
—
|
|
|
$
|
2,000
|
|
6.000% Senior Notes due 2024
|
1,350
|
|
|
40
|
|
|
1,390
|
|
|||
6.000% Senior Notes due 2024
|
650
|
|
|
24
|
|
|
674
|
|
|||
Total
|
$
|
4,000
|
|
|
$
|
64
|
|
|
$
|
4,064
|
|
(in millions)
|
Less Than 1 Year
|
|
1 - 3 Years
|
|
4 - 5 Years
|
|
More Than 5 Years
|
|
Total
|
||||||||||
Long-term debt
(1)
|
$
|
1,000
|
|
|
$
|
—
|
|
|
$
|
8,000
|
|
|
$
|
17,450
|
|
|
$
|
26,450
|
|
Interest on long-term debt
|
1,501
|
|
|
2,939
|
|
|
2,539
|
|
|
1,976
|
|
|
8,955
|
|
|||||
Capital lease obligations, including interest and maintenance
|
682
|
|
|
972
|
|
|
218
|
|
|
172
|
|
|
2,044
|
|
|||||
Tower obligations
(2)
|
189
|
|
|
379
|
|
|
381
|
|
|
1,006
|
|
|
1,955
|
|
|||||
Operating leases
(3)
|
2,448
|
|
|
4,083
|
|
|
2,686
|
|
|
2,251
|
|
|
11,468
|
|
|||||
Purchase obligations
(4)
|
2,146
|
|
|
2,216
|
|
|
1,492
|
|
|
960
|
|
|
6,814
|
|
|||||
Network decommissioning
(5)
|
101
|
|
|
123
|
|
|
60
|
|
|
21
|
|
|
305
|
|
|||||
Total contractual obligations
|
$
|
8,067
|
|
|
$
|
10,712
|
|
|
$
|
15,376
|
|
|
$
|
23,836
|
|
|
$
|
57,991
|
|
(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 7 – Debt
of the
Notes to the Consolidated Financial Statements
included in Part II, Item 8 of this Form 10-K for further information.
|
(2)
|
Future minimum payments, including principal and interest payments and imputed lease rental income, related to the tower obligations. See
Note 8 – Tower Obligations
of the
Notes to the Consolidated Financial Statements
included in Part II, Item 8 of this Form 10-K 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, 2017
under normal business purposes. See
Note 13 - Commitments and Contingencies
of the
Notes to the Consolidated Financial Statements
included in Part II, Item 8 of this Form 10-K 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, 2017
.
|
|
Carrying Amount
|
|
Fair Value
|
|
Fair Value Assuming
|
||||||||||
(in millions)
|
+150 Basis Point Shift
|
|
-50 Basis Point Shift
|
||||||||||||
LIBOR plus 2.00% Senior Secured Term Loan due 2022
|
$
|
2,000
|
|
|
$
|
2,000
|
|
|
$
|
1,914
|
|
|
$
|
2,000
|
|
LIBOR plus 2.00% Senior Secured Term Loan due 2024
|
2,000
|
|
|
2,020
|
|
|
1,868
|
|
|
2,020
|
|
(in millions, except share and per share amounts)
|
December 31,
2017 |
|
December 31,
2016 |
||||
Assets
|
|
|
|
||||
Current assets
|
|
|
|
||||
Cash and cash equivalents
|
$
|
1,219
|
|
|
$
|
5,500
|
|
Accounts receivable, net of allowances of $86 and $102
|
1,915
|
|
|
1,896
|
|
||
Equipment installment plan receivables, net
|
2,290
|
|
|
1,930
|
|
||
Accounts receivable from affiliates
|
22
|
|
|
40
|
|
||
Inventories
|
1,566
|
|
|
1,111
|
|
||
Asset purchase deposit
|
—
|
|
|
2,203
|
|
||
Other current assets
|
1,903
|
|
|
1,537
|
|
||
Total current assets
|
8,915
|
|
|
14,217
|
|
||
Property and equipment, net
|
22,196
|
|
|
20,943
|
|
||
Goodwill
|
1,683
|
|
|
1,683
|
|
||
Spectrum licenses
|
35,366
|
|
|
27,014
|
|
||
Other intangible assets, net
|
217
|
|
|
376
|
|
||
Equipment installment plan receivables due after one year, net
|
1,274
|
|
|
984
|
|
||
Other assets
|
912
|
|
|
674
|
|
||
Total assets
|
$
|
70,563
|
|
|
$
|
65,891
|
|
Liabilities and Stockholders' Equity
|
|
|
|
||||
Current liabilities
|
|
|
|
||||
Accounts payable and accrued liabilities
|
$
|
8,528
|
|
|
$
|
7,152
|
|
Payables to affiliates
|
182
|
|
|
125
|
|
||
Short-term debt
|
1,612
|
|
|
354
|
|
||
Deferred revenue
|
779
|
|
|
986
|
|
||
Other current liabilities
|
414
|
|
|
405
|
|
||
Total current liabilities
|
11,515
|
|
|
9,022
|
|
||
Long-term debt
|
12,121
|
|
|
21,832
|
|
||
Long-term debt to affiliates
|
14,586
|
|
|
5,600
|
|
||
Tower obligations
|
2,590
|
|
|
2,621
|
|
||
Deferred tax liabilities
|
3,537
|
|
|
4,938
|
|
||
Deferred rent expense
|
2,720
|
|
|
2,616
|
|
||
Other long-term liabilities
|
935
|
|
|
1,026
|
|
||
Total long-term liabilities
|
36,489
|
|
|
38,633
|
|
||
Commitments and contingencies (Note 13)
|
|
|
|
|
|
||
Stockholders' equity
|
|
|
|
||||
5.50% Mandatory Convertible Preferred Stock Series A, par value $0.00001 per share, 100,000,000 shares authorized; 0 and 20,000,000 shares issued; 0 and 20,000,000 shares outstanding; $0 and $1,000 aggregate liquidation value
|
—
|
|
|
—
|
|
||
Common Stock, par value $0.00001 per share, 1,000,000,000 shares authorized; 860,861,998 and 827,768,818 shares issued, 859,406,651 and 826,357,331 shares outstanding
|
—
|
|
|
—
|
|
||
Additional paid-in capital
|
38,629
|
|
|
38,846
|
|
||
Treasury stock, at cost, 1,455,347 and 1,411,487 shares issued
|
(4
|
)
|
|
(1
|
)
|
||
Accumulated other comprehensive income
|
8
|
|
|
1
|
|
||
Accumulated deficit
|
(16,074
|
)
|
|
(20,610
|
)
|
||
Total stockholders' equity
|
22,559
|
|
|
18,236
|
|
||
Total liabilities and stockholders' equity
|
$
|
70,563
|
|
|
$
|
65,891
|
|
|
Year Ended December 31,
|
||||||||||
|
2017
|
|
2016
|
|
2015
|
||||||
(in millions, except share and per share amounts)
|
|
(As Adjusted - See
Note 1
)
|
|||||||||
Revenues
|
|
|
|
|
|
||||||
Branded postpaid revenues
|
$
|
19,448
|
|
|
$
|
18,138
|
|
|
$
|
16,383
|
|
Branded prepaid revenues
|
9,380
|
|
|
8,553
|
|
|
7,553
|
|
|||
Wholesale revenues
|
1,102
|
|
|
903
|
|
|
692
|
|
|||
Roaming and other service revenues
|
230
|
|
|
250
|
|
|
193
|
|
|||
Total service revenues
|
30,160
|
|
|
27,844
|
|
|
24,821
|
|
|||
Equipment revenues
|
9,375
|
|
|
8,727
|
|
|
6,718
|
|
|||
Other revenues
|
1,069
|
|
|
919
|
|
|
928
|
|
|||
Total revenues
|
40,604
|
|
|
37,490
|
|
|
32,467
|
|
|||
Operating expenses
|
|
|
|
|
|
||||||
Cost of services, exclusive of depreciation and amortization shown separately below
|
6,100
|
|
|
5,731
|
|
|
5,554
|
|
|||
Cost of equipment sales
|
11,608
|
|
|
10,819
|
|
|
9,344
|
|
|||
Selling, general and administrative
|
12,259
|
|
|
11,378
|
|
|
10,189
|
|
|||
Depreciation and amortization
|
5,984
|
|
|
6,243
|
|
|
4,688
|
|
|||
Cost of MetroPCS business combination
|
—
|
|
|
104
|
|
|
376
|
|
|||
Gains on disposal of spectrum licenses
|
(235
|
)
|
|
(835
|
)
|
|
(163
|
)
|
|||
Total operating expense
|
35,716
|
|
|
33,440
|
|
|
29,988
|
|
|||
Operating income
|
4,888
|
|
|
4,050
|
|
|
2,479
|
|
|||
Other income (expense)
|
|
|
|
|
|
||||||
Interest expense
|
(1,111
|
)
|
|
(1,418
|
)
|
|
(1,085
|
)
|
|||
Interest expense to affiliates
|
(560
|
)
|
|
(312
|
)
|
|
(411
|
)
|
|||
Interest income
|
17
|
|
|
13
|
|
|
6
|
|
|||
Other expense, net
|
(73
|
)
|
|
(6
|
)
|
|
(11
|
)
|
|||
Total other expense, net
|
(1,727
|
)
|
|
(1,723
|
)
|
|
(1,501
|
)
|
|||
Income before income taxes
|
3,161
|
|
|
2,327
|
|
|
978
|
|
|||
Income tax benefit (expense)
|
1,375
|
|
|
(867
|
)
|
|
(245
|
)
|
|||
Net income
|
4,536
|
|
|
1,460
|
|
|
733
|
|
|||
Dividends on preferred stock
|
(55
|
)
|
|
(55
|
)
|
|
(55
|
)
|
|||
Net income attributable to common stockholders
|
$
|
4,481
|
|
|
$
|
1,405
|
|
|
$
|
678
|
|
|
|
|
|
|
|
||||||
Net income
|
$
|
4,536
|
|
|
$
|
1,460
|
|
|
$
|
733
|
|
Other comprehensive income (loss), net of tax
|
|
|
|
|
|
||||||
Unrealized gain (loss) on available-for-sale securities, net of tax effect $2, $1 and $(1)
|
7
|
|
|
2
|
|
|
(2
|
)
|
|||
Other comprehensive income (loss)
|
7
|
|
|
2
|
|
|
(2
|
)
|
|||
Total comprehensive income
|
$
|
4,543
|
|
|
$
|
1,462
|
|
|
$
|
731
|
|
Earnings per share
|
|
|
|
|
|
||||||
Basic
|
$
|
5.39
|
|
|
$
|
1.71
|
|
|
$
|
0.83
|
|
Diluted
|
$
|
5.20
|
|
|
$
|
1.69
|
|
|
$
|
0.82
|
|
Weighted average shares outstanding
|
|
|
|
|
|
||||||
Basic
|
831,850,073
|
|
|
822,470,275
|
|
|
812,994,028
|
|
|||
Diluted
|
871,787,450
|
|
|
833,054,545
|
|
|
822,617,938
|
|
|
Year Ended December 31,
|
||||||||||
(in millions)
|
2017
|
|
2016
|
|
2015
|
||||||
Operating activities
|
|
|
|
|
|
||||||
Net income
|
$
|
4,536
|
|
|
$
|
1,460
|
|
|
$
|
733
|
|
Adjustments to reconcile net income to net cash provided by operating activities
|
|
|
|
|
|
||||||
Depreciation and amortization
|
5,984
|
|
|
6,243
|
|
|
4,688
|
|
|||
Stock-based compensation expense
|
306
|
|
|
235
|
|
|
201
|
|
|||
Deferred income tax (benefit) expense
|
(1,404
|
)
|
|
914
|
|
|
256
|
|
|||
Bad debt expense
|
388
|
|
|
477
|
|
|
547
|
|
|||
Losses from sales of receivables
|
299
|
|
|
228
|
|
|
204
|
|
|||
Deferred rent expense
|
76
|
|
|
121
|
|
|
167
|
|
|||
Gains on disposal of spectrum licenses
|
(235
|
)
|
|
(835
|
)
|
|
(163
|
)
|
|||
Change in fair value of embedded derivatives
|
(52
|
)
|
|
(25
|
)
|
|
148
|
|
|||
Changes in operating assets and liabilities
|
|
|
|
|
|
||||||
Accounts receivable
|
(444
|
)
|
|
(603
|
)
|
|
(259
|
)
|
|||
Equipment installment plan receivables
|
(894
|
)
|
|
97
|
|
|
1,089
|
|
|||
Inventories
|
(844
|
)
|
|
(802
|
)
|
|
(2,495
|
)
|
|||
Deferred purchase price from sales of receivables
|
(86
|
)
|
|
(270
|
)
|
|
(185
|
)
|
|||
Other current and long-term assets
|
(575
|
)
|
|
(133
|
)
|
|
(217
|
)
|
|||
Accounts payable and accrued liabilities
|
1,079
|
|
|
(1,201
|
)
|
|
693
|
|
|||
Other current and long-term liabilities
|
(233
|
)
|
|
158
|
|
|
22
|
|
|||
Other, net
|
61
|
|
|
71
|
|
|
(15
|
)
|
|||
Net cash provided by operating activities
|
7,962
|
|
|
6,135
|
|
|
5,414
|
|
|||
Investing activities
|
|
|
|
|
|
||||||
Purchases of property and equipment, including capitalized interest of $136, $142 and $246
|
(5,237
|
)
|
|
(4,702
|
)
|
|
(4,724
|
)
|
|||
Purchases of spectrum licenses and other intangible assets, including deposits
|
(5,828
|
)
|
|
(3,968
|
)
|
|
(1,935
|
)
|
|||
Purchases of short-term investments
|
—
|
|
|
—
|
|
|
(2,997
|
)
|
|||
Sales of short-term investments
|
—
|
|
|
2,998
|
|
|
—
|
|
|||
Other, net
|
1
|
|
|
(8
|
)
|
|
96
|
|
|||
Net cash used in investing activities
|
(11,064
|
)
|
|
(5,680
|
)
|
|
(9,560
|
)
|
|||
Financing activities
|
|
|
|
|
|
||||||
Proceeds from issuance of long-term debt
|
10,480
|
|
|
997
|
|
|
3,979
|
|
|||
Proceeds from tower obligations
|
—
|
|
|
—
|
|
|
140
|
|
|||
Proceeds from borrowing on revolving credit facility
|
2,910
|
|
|
—
|
|
|
—
|
|
|||
Repayments of revolving credit facility
|
(2,910
|
)
|
|
—
|
|
|
—
|
|
|||
Repayments of capital lease obligations
|
(486
|
)
|
|
(205
|
)
|
|
(57
|
)
|
|||
Repayments of short-term debt for purchases of inventory, property and equipment, net
|
(300
|
)
|
|
(150
|
)
|
|
(564
|
)
|
|||
Repayments of long-term debt
|
(10,230
|
)
|
|
(20
|
)
|
|
—
|
|
|||
Proceeds from exercise of stock options
|
21
|
|
|
29
|
|
|
47
|
|
|||
Repurchases of common shares
|
(427
|
)
|
|
—
|
|
|
—
|
|
|||
Tax withholdings on share-based awards
|
(166
|
)
|
|
(121
|
)
|
|
(156
|
)
|
|||
Dividends on preferred stock
|
(55
|
)
|
|
(55
|
)
|
|
(55
|
)
|
|||
Other, net
|
(16
|
)
|
|
(12
|
)
|
|
79
|
|
|||
Net cash (used in) provided by financing activities
|
(1,179
|
)
|
|
463
|
|
|
3,413
|
|
|||
Change in cash and cash equivalents
|
(4,281
|
)
|
|
918
|
|
|
(733
|
)
|
|||
Cash and cash equivalents
|
|
|
|
|
|
||||||
Beginning of period
|
5,500
|
|
|
4,582
|
|
|
5,315
|
|
|||
End of period
|
$
|
1,219
|
|
|
$
|
5,500
|
|
|
$
|
4,582
|
|
Supplemental disclosure of cash flow information
|
|
|
|
|
|
||||||
Interest payments, net of amounts capitalized, $79, $0 and $0 of which recorded as debt discount (Note 7)
|
$
|
2,028
|
|
|
$
|
1,681
|
|
|
$
|
1,298
|
|
Income tax payments
|
31
|
|
|
25
|
|
|
54
|
|
|||
Changes in accounts payable for purchases of property and equipment
|
313
|
|
|
285
|
|
|
46
|
|
|||
Leased devices transferred from inventory to property and equipment
|
1,131
|
|
|
1,588
|
|
|
2,451
|
|
|||
Returned leased devices transferred from property and equipment to inventory
|
(742
|
)
|
|
(602
|
)
|
|
(166
|
)
|
|||
Issuance of short-term debt for financing of property and equipment
|
292
|
|
|
150
|
|
|
500
|
|
|||
Assets acquired under capital lease obligations
|
887
|
|
|
799
|
|
|
470
|
|
(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, 2014
|
20,000,000
|
|
|
807,468,603
|
|
|
$
|
—
|
|
|
$
|
38,503
|
|
|
$
|
1
|
|
|
$
|
(22,841
|
)
|
|
$
|
15,663
|
|
Net income
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
733
|
|
|
733
|
|
|||||
Other comprehensive loss
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(2
|
)
|
|
—
|
|
|
(2
|
)
|
|||||
Stock-based compensation
|
—
|
|
|
—
|
|
|
—
|
|
|
227
|
|
|
—
|
|
|
—
|
|
|
227
|
|
|||||
Exercise of stock options
|
—
|
|
|
2,381,650
|
|
|
—
|
|
|
47
|
|
|
—
|
|
|
—
|
|
|
47
|
|
|||||
Stock issued for employee stock purchase plan
|
—
|
|
|
761,085
|
|
|
—
|
|
|
21
|
|
|
—
|
|
|
—
|
|
|
21
|
|
|||||
Issuance of vested restricted stock units
|
—
|
|
|
11,956,345
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Shares withheld related to net share settlement of stock awards and stock options
|
—
|
|
|
(4,176,464
|
)
|
|
—
|
|
|
(156
|
)
|
|
—
|
|
|
—
|
|
|
(156
|
)
|
|||||
Excess tax benefit from stock-based compensation
|
—
|
|
|
—
|
|
|
—
|
|
|
79
|
|
|
—
|
|
|
—
|
|
|
79
|
|
|||||
Dividends on preferred stock
|
—
|
|
|
—
|
|
|
—
|
|
|
(55
|
)
|
|
—
|
|
|
—
|
|
|
(55
|
)
|
|||||
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
|
|
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.
|
|
Year Ended December 31, 2017
|
||||||||||
(in millions)
|
Unadjusted
|
|
Change in Accounting Principle
|
|
As Adjusted
|
||||||
Other revenues
|
$
|
789
|
|
|
$
|
280
|
|
|
$
|
1,069
|
|
Total revenues
|
40,324
|
|
|
280
|
|
|
40,604
|
|
|||
Operating income
|
4,608
|
|
|
280
|
|
|
4,888
|
|
|||
Interest income
|
297
|
|
|
(280
|
)
|
|
17
|
|
|||
Total other expense, net
|
(1,447
|
)
|
|
(280
|
)
|
|
(1,727
|
)
|
|||
Net income
|
4,536
|
|
|
—
|
|
|
4,536
|
|
|
Year Ended December 31, 2016
|
||||||||||
(in millions)
|
As Filed
|
|
Change in Accounting Principle
|
|
As Adjusted
|
||||||
Other revenues
|
$
|
671
|
|
|
$
|
248
|
|
|
$
|
919
|
|
Total revenues
|
37,242
|
|
|
248
|
|
|
37,490
|
|
|||
Operating income
|
3,802
|
|
|
248
|
|
|
4,050
|
|
|||
Interest income
|
261
|
|
|
(248
|
)
|
|
13
|
|
|||
Total other expense, net
|
(1,475
|
)
|
|
(248
|
)
|
|
(1,723
|
)
|
|||
Net income
|
1,460
|
|
|
—
|
|
|
1,460
|
|
|
Year Ended December 31, 2015
|
||||||||||
(in millions)
|
As Filed
|
|
Change in Accounting Principle
|
|
As Adjusted
|
||||||
Other revenues
|
$
|
514
|
|
|
$
|
414
|
|
|
$
|
928
|
|
Total revenues
|
32,053
|
|
|
414
|
|
|
32,467
|
|
|||
Operating income
|
2,065
|
|
|
414
|
|
|
2,479
|
|
|||
Interest income
|
420
|
|
|
(414
|
)
|
|
6
|
|
|||
Total other expense, net
|
(1,087
|
)
|
|
(414
|
)
|
|
(1,501
|
)
|
|||
Net income
|
733
|
|
|
—
|
|
|
733
|
|
•
|
Upon adoption, we will defer (i.e. capitalize) incremental contract acquisition costs and recognize (i.e. amortize) them over the term of the initial contract and anticipated renewal contracts to which the costs relate. Deferred contract costs have an average amortization period of approximately
24
months, subject to being monitored every period to reflect any significant change in assumptions. In addition, the deferred contract cost asset is assessed for impairment on a
|
•
|
Under the new standard, certain commissions paid to dealers previously recognized as a reduction to revenues will be recorded as commission costs in
Selling, general and administrative
expense. During 2017 such commission costs were approximately
$425 million
.
|
•
|
Promotional bill credits offered to customers on equipment sales that are paid over time and are contingent on the customer maintaining a service contract results in an extended service contract term with multiple performance obligations, which impacts the allocation and timing of revenue recognition between service revenue and equipment revenue. A contract asset will be recorded when control of the equipment transfers to the customer, and subsequently recognized as a reduction to service revenue over the extended contract term. Contract assets of approximately
$140 million
are expected to be capitalized upon adoption on January 1, 2018 as a cumulative effect adjustment.
|
•
|
We are recognizing the financing component in our EIP contracts, including those financing components that are not considered to be significant to the contract. This application is consistent with our current practice of imputing interest.
|
(in millions)
|
December 31,
2017 |
|
December 31,
2016 |
||||
EIP receivables, gross
|
$
|
3,960
|
|
|
$
|
3,230
|
|
Unamortized imputed discount
|
(264
|
)
|
|
(195
|
)
|
||
EIP receivables, net of unamortized imputed discount
|
3,696
|
|
|
3,035
|
|
||
Allowance for credit losses
|
(132
|
)
|
|
(121
|
)
|
||
EIP receivables, net
|
$
|
3,564
|
|
|
$
|
2,914
|
|
|
|
|
|
||||
Classified on the balance sheet as:
|
|
|
|
||||
Equipment installment plan receivables, net
|
$
|
2,290
|
|
|
$
|
1,930
|
|
Equipment installment plan receivables due after one year, net
|
1,274
|
|
|
984
|
|
||
EIP receivables, net
|
$
|
3,564
|
|
|
$
|
2,914
|
|
|
December 31, 2017
|
|
December 31, 2016
|
|
December 31, 2015
|
||||||||||||||||||||||||||||||
(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
|
$
|
102
|
|
|
$
|
316
|
|
|
$
|
418
|
|
|
$
|
116
|
|
|
$
|
333
|
|
|
$
|
449
|
|
|
$
|
83
|
|
|
$
|
448
|
|
|
$
|
531
|
|
Bad debt expense
|
104
|
|
|
284
|
|
|
388
|
|
|
227
|
|
|
250
|
|
|
477
|
|
|
182
|
|
|
365
|
|
|
547
|
|
|||||||||
Write-offs, net of recoveries
|
(120
|
)
|
|
(273
|
)
|
|
(393
|
)
|
|
(241
|
)
|
|
(277
|
)
|
|
(518
|
)
|
|
(149
|
)
|
|
(333
|
)
|
|
(482
|
)
|
|||||||||
Change in imputed discount on short-term and long-term EIP receivables
|
N/A
|
|
|
252
|
|
|
252
|
|
|
N/A
|
|
|
186
|
|
|
186
|
|
|
N/A
|
|
|
(84
|
)
|
|
(84
|
)
|
|||||||||
Impact on the imputed discount from sales of EIP receivables
|
N/A
|
|
|
(183
|
)
|
|
(183
|
)
|
|
N/A
|
|
|
(176
|
)
|
|
(176
|
)
|
|
N/A
|
|
|
(63
|
)
|
|
(63
|
)
|
|||||||||
Allowance for credit losses and imputed discount, end of period
|
$
|
86
|
|
|
$
|
396
|
|
|
$
|
482
|
|
|
$
|
102
|
|
|
$
|
316
|
|
|
$
|
418
|
|
|
$
|
116
|
|
|
$
|
333
|
|
|
$
|
449
|
|
|
December 31, 2017
|
|
December 31, 2016
|
||||||||||||||||||||
(in millions)
|
Prime
|
|
Subprime
|
|
Total EIP Receivables, gross
|
|
Prime
|
|
Subprime
|
|
Total EIP Receivables, gross
|
||||||||||||
Current - 30 days past due
|
$
|
1,727
|
|
|
$
|
2,133
|
|
|
$
|
3,860
|
|
|
$
|
1,375
|
|
|
$
|
1,735
|
|
|
$
|
3,110
|
|
31 - 60 days past due
|
17
|
|
|
29
|
|
|
46
|
|
|
27
|
|
|
38
|
|
|
65
|
|
||||||
61 - 90 days past due
|
6
|
|
|
16
|
|
|
22
|
|
|
7
|
|
|
16
|
|
|
23
|
|
||||||
More than 90 days past due
|
8
|
|
|
24
|
|
|
32
|
|
|
10
|
|
|
22
|
|
|
32
|
|
||||||
Total receivables, gross
|
$
|
1,758
|
|
|
$
|
2,202
|
|
|
$
|
3,960
|
|
|
$
|
1,419
|
|
|
$
|
1,811
|
|
|
$
|
3,230
|
|
(in millions)
|
December 31,
2017 |
|
December 31,
2016 |
||||
Other current assets
|
$
|
236
|
|
|
$
|
207
|
|
Accounts payable and accrued liabilities
|
25
|
|
|
17
|
|
||
Other current liabilities
|
180
|
|
|
129
|
|
(in millions)
|
December 31,
2017 |
|
December 31,
2016 |
||||
Other current assets
|
$
|
403
|
|
|
$
|
371
|
|
Other assets
|
109
|
|
|
83
|
|
||
Other long-term liabilities
|
3
|
|
|
4
|
|
(in millions)
|
December 31,
2017 |
|
December 31,
2016 |
||||
Derecognized net service receivables and EIP receivables
|
$
|
2,725
|
|
|
$
|
2,502
|
|
Other current assets
|
639
|
|
|
578
|
|
||
of which, deferred purchase price
|
636
|
|
|
576
|
|
||
Other long-term assets
|
109
|
|
|
83
|
|
||
of which, deferred purchase price
|
109
|
|
|
83
|
|
||
Accounts payable and accrued liabilities
|
25
|
|
|
17
|
|
||
Other current liabilities
|
180
|
|
|
129
|
|
||
Other long-term liabilities
|
3
|
|
|
4
|
|
||
Net cash proceeds since inception
|
2,058
|
|
|
2,030
|
|
||
Of which:
|
|
|
|
||||
Change in net cash proceeds during the year-to-date period
|
28
|
|
|
536
|
|
||
Net cash proceeds funded by reinvested collections
|
2,030
|
|
|
1,494
|
|
(in millions)
|
Useful Lives
|
|
December 31,
2017 |
|
December 31,
2016 |
||||
Buildings and equipment
|
Up to 40 years
|
|
$
|
2,066
|
|
|
$
|
1,657
|
|
Wireless communications systems
|
Up to 20 years
|
|
32,706
|
|
|
29,272
|
|
||
Leasehold improvements
|
Up to 12 years
|
|
1,182
|
|
|
1,068
|
|
||
Capitalized software
|
Up to 10 years
|
|
10,563
|
|
|
8,488
|
|
||
Leased wireless devices
|
Up to 18 months
|
|
1,209
|
|
|
2,624
|
|
||
Construction in progress
|
|
|
1,771
|
|
|
2,613
|
|
||
Accumulated depreciation and amortization
|
|
|
(27,301
|
)
|
|
(24,779
|
)
|
||
Property and equipment, net
|
|
|
$
|
22,196
|
|
|
$
|
20,943
|
|
(in millions)
|
December 31,
2017 |
|
December 31,
2016 |
||||
Leased wireless devices, gross
|
$
|
1,209
|
|
|
$
|
2,624
|
|
Accumulated depreciation
|
(417
|
)
|
|
(1,193
|
)
|
||
Leased wireless devices, net
|
$
|
792
|
|
|
$
|
1,431
|
|
(in millions)
|
Total
|
||
Year Ended December 31,
|
|
||
2018
|
$
|
485
|
|
2019
|
104
|
|
|
Total
|
$
|
589
|
|
(in millions)
|
December 31,
2017 |
|
December 31,
2016 |
||||
Asset retirement obligations, beginning of year
|
$
|
539
|
|
|
$
|
483
|
|
Liabilities incurred
|
25
|
|
|
50
|
|
||
Liabilities settled
|
(16
|
)
|
|
(67
|
)
|
||
Accretion expense
|
27
|
|
|
24
|
|
||
Changes in estimated cash flows
|
(13
|
)
|
|
49
|
|
||
Asset retirement obligations, end of year
|
$
|
562
|
|
|
$
|
539
|
|
|
|
|
|
||||
Classified on the balance sheet as:
|
|
|
|
||||
Other current liabilities
|
$
|
3
|
|
|
$
|
16
|
|
Other long-term liabilities
|
559
|
|
|
523
|
|
||
Asset retirement obligations
|
$
|
562
|
|
|
$
|
539
|
|
(in millions)
|
December 31, 2017
|
|
December 31, 2016
|
||||
Spectrum licenses, beginning of year
|
$
|
27,014
|
|
|
$
|
23,955
|
|
Spectrum license acquisitions
|
8,599
|
|
|
3,334
|
|
||
Spectrum licenses transferred to held for sale
|
(271
|
)
|
|
(324
|
)
|
||
Costs to clear spectrum
|
24
|
|
|
49
|
|
||
Spectrum licenses, end of year
|
$
|
35,366
|
|
|
$
|
27,014
|
|
•
|
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. See
Note 7 - Debt
for further information. The licenses are included in Spectrum licenses as of
December 31, 2017
, in our
Consolidated Balance Sheets
. We began deployment of these licenses on our network in the third quarter of
2017
.
|
•
|
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
|
•
|
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
.
|
•
|
We closed on an agreement with AT&T Inc. for the acquisition and exchange of certain spectrum licenses. Upon closing of the transaction during the first quarter of
2016
, we recorded the spectrum licenses received at their estimated fair value of approximately
$1.2 billion
and recognized a gain of
$636 million
included in
Gains on disposal of spectrum licenses
in our
Consolidated Statements of Comprehensive Income
.
|
•
|
We closed on agreements with multiple third parties for the purchase and exchange of certain spectrum licenses for
$1.3 billion
in cash. Upon closing of the transactions, we recorded spectrum licenses received at their estimated fair values totaling approximately
$1.7 billion
and recognized gains of
$199 million
included in
Gains on disposal of spectrum licenses
in our
Consolidated Statements of Comprehensive Income
.
|
•
|
We closed on an agreement with a third party for the purchase of certain spectrum licenses covering approximately
11 million
people for approximately
$420 million
during the fourth quarter of
2016
.
|
|
Useful Lives
|
|
December 31, 2017
|
|
December 31, 2016
|
||||||||||||||||||||
(in millions)
|
|
Gross Amount
|
|
Accumulated Amortization
|
|
Net Amount
|
|
Gross Amount
|
|
Accumulated Amortization
|
|
Net Amount
|
|||||||||||||
Customer lists
|
Up to 6 years
|
|
$
|
1,104
|
|
|
$
|
(1,016
|
)
|
|
$
|
88
|
|
|
$
|
1,104
|
|
|
$
|
(894
|
)
|
|
$
|
210
|
|
Trademarks and patents
|
Up to 19 years
|
|
307
|
|
|
(192
|
)
|
|
115
|
|
|
303
|
|
|
(156
|
)
|
|
147
|
|
||||||
Other
|
Up to 28 years
|
|
49
|
|
|
(35
|
)
|
|
14
|
|
|
50
|
|
|
(31
|
)
|
|
19
|
|
||||||
Other intangible assets
|
|
|
$
|
1,460
|
|
|
$
|
(1,243
|
)
|
|
$
|
217
|
|
|
$
|
1,457
|
|
|
$
|
(1,081
|
)
|
|
$
|
376
|
|
(in millions)
|
Estimated Future Amortization
|
||
Year Ending December 31,
|
|
||
2018
|
$
|
105
|
|
2019
|
52
|
|
|
2020
|
35
|
|
|
2021
|
14
|
|
|
2022
|
4
|
|
|
Thereafter
|
7
|
|
|
Total
|
$
|
217
|
|
|
December 31, 2017
|
||||||||||||||
(in millions)
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Total
|
||||||||
Other long-term liabilities
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
66
|
|
|
$
|
66
|
|
|
December 31, 2016
|
||||||||||||||
(in millions)
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Total
|
||||||||
Other long-term liabilities
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
118
|
|
|
$
|
118
|
|
|
Year Ended December 31,
|
||||||||||
(in millions)
|
2017
|
|
2016
|
|
2015
|
||||||
Embedded derivatives
|
$
|
52
|
|
|
$
|
25
|
|
|
$
|
(148
|
)
|
|
Level within the Fair Value Hierarchy
|
|
December 31, 2017
|
|
December 31, 2016
|
||||||||||||
(in millions)
|
|
Carrying Amount
|
|
Fair Value
|
|
Carrying Amount
|
|
Fair Value
|
|||||||||
Assets:
|
|
|
|
|
|
|
|
|
|
||||||||
Deferred purchase price assets
|
3
|
|
$
|
745
|
|
|
$
|
745
|
|
|
$
|
659
|
|
|
$
|
659
|
|
Liabilities:
|
|
|
|
|
|
|
|
|
|
||||||||
Guarantee liabilities
|
3
|
|
105
|
|
|
105
|
|
|
135
|
|
|
135
|
|
|
Level within the Fair Value Hierarchy
|
|
December 31, 2017
|
|
December 31, 2016
|
||||||||||||
(in millions)
|
|
Principal Amount
|
|
Fair Value
|
|
Principal Amount
|
|
Fair Value
|
|||||||||
Liabilities:
|
|
|
|
|
|
|
|
|
|
||||||||
Senior Notes to third parties
|
1
|
|
$
|
11,850
|
|
|
$
|
12,540
|
|
|
$
|
18,600
|
|
|
$
|
19,584
|
|
Senior Notes to affiliates
|
2
|
|
7,500
|
|
|
7,852
|
|
|
—
|
|
|
—
|
|
||||
Incremental Term Loan Facility to affiliates
|
2
|
|
4,000
|
|
|
4,020
|
|
|
—
|
|
|
—
|
|
||||
Senior Reset Notes to affiliates
|
2
|
|
3,100
|
|
|
3,260
|
|
|
5,600
|
|
|
5,955
|
|
||||
Senior Secured Term Loans
|
2
|
|
—
|
|
|
—
|
|
|
1,980
|
|
|
2,005
|
|
(in millions)
|
December 31,
2017 |
|
December 31,
2016 |
||||
5.250% Senior Notes due 2018
|
$
|
—
|
|
|
$
|
500
|
|
6.464% Senior Notes due 2019
|
—
|
|
|
1,250
|
|
||
6.288% Senior Reset Notes to affiliates due 2019
|
—
|
|
|
1,250
|
|
||
6.542% Senior Notes due 2020
|
—
|
|
|
1,250
|
|
||
6.625% Senior Notes due 2020
|
—
|
|
|
1,000
|
|
||
6.366% Senior Reset Notes to affiliates due 2020
|
—
|
|
|
1,250
|
|
||
6.250% Senior Notes due 2021
|
—
|
|
|
1,750
|
|
||
6.633% Senior Notes due 2021
|
—
|
|
|
1,250
|
|
||
5.300% Senior Notes to affiliates due 2021
|
2,000
|
|
|
—
|
|
||
8.097% Senior Reset Notes to affiliates due 2021
|
1,250
|
|
|
1,250
|
|
||
6.125% Senior Notes due 2022
|
1,000
|
|
|
1,000
|
|
||
6.731% Senior Notes due 2022
|
—
|
|
|
1,250
|
|
||
4.000% Senior Notes due 2022
|
500
|
|
|
—
|
|
||
4.000% Senior Notes to affiliates due 2022
|
1,000
|
|
|
—
|
|
||
8.195% Senior Reset Notes to affiliates due 2022
|
1,250
|
|
|
1,250
|
|
||
Incremental term loan facility to affiliates due 2022
|
2,000
|
|
|
—
|
|
||
6.000% Senior Notes due 2023
|
1,300
|
|
|
1,300
|
|
||
6.625% Senior Notes due 2023
|
1,750
|
|
|
1,750
|
|
||
6.836% Senior Notes due 2023
|
600
|
|
|
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
|
|
|
—
|
|
||
6.000% Senior Notes to affiliates due 2024
|
650
|
|
|
—
|
|
||
Incremental term loan facility to affiliates due 2024
|
2,000
|
|
|
—
|
|
||
5.125% Senior Notes due 2025
|
500
|
|
|
—
|
|
||
6.375% Senior Notes due 2025
|
1,700
|
|
|
1,700
|
|
||
5.125% Senior Notes to affiliates due 2025
|
1,250
|
|
|
—
|
|
||
6.500% Senior Notes due 2026
|
2,000
|
|
|
2,000
|
|
||
5.375% Senior Notes due 2027
|
500
|
|
|
—
|
|
||
5.375% Senior Notes to affiliates Due 2027
|
1,250
|
|
|
—
|
|
||
Senior Secured Term Loans
|
—
|
|
|
1,980
|
|
||
Capital leases
|
1,824
|
|
|
1,425
|
|
||
Unamortized premium from purchase price allocation fair value adjustment
|
78
|
|
|
212
|
|
||
Unamortized premium on debt to affiliates
|
59
|
|
|
—
|
|
||
Unamortized discount on Senior Secured Term Loans
|
—
|
|
|
(8
|
)
|
||
Unamortized discount on affiliates Senior Notes
|
(73
|
)
|
|
—
|
|
||
Debt issuance cost
|
(19
|
)
|
|
(23
|
)
|
||
Total debt
|
28,319
|
|
|
27,786
|
|
||
Less: Current portion of Senior Secured Term Loans
|
—
|
|
|
20
|
|
||
Less: Current portion of Senior Notes
|
999
|
|
|
—
|
|
||
Less: Current portion of capital leases
|
613
|
|
|
334
|
|
||
Total long-term debt
|
$
|
26,707
|
|
|
$
|
27,432
|
|
|
|
|
|
||||
Classified on the balance sheet as:
|
|
|
|
||||
Long-term debt
|
$
|
12,121
|
|
|
$
|
21,832
|
|
Long-term debt to affiliates
|
14,586
|
|
|
5,600
|
|
||
Total long-term debt
|
$
|
26,707
|
|
|
$
|
27,432
|
|
(in millions)
|
Principal Issuances
|
|
Issuance Costs
|
|
Net Proceeds from Issuance of Long-Term Debt
|
||||||
4.000% Senior Notes due 2022
|
$
|
500
|
|
|
$
|
2
|
|
|
$
|
498
|
|
5.125% Senior Notes due 2025
|
500
|
|
|
2
|
|
|
498
|
|
|||
5.375% Senior Notes due 2027
|
500
|
|
|
1
|
|
|
499
|
|
|||
Total of Senior Notes issued
|
$
|
1,500
|
|
|
$
|
5
|
|
|
$
|
1,495
|
|
(in millions)
|
Principal Amount
|
|
Write-off of Premiums, Discounts and Issuance Costs
(1)
|
|
Call Penalties
(1) (2)
|
|
Redemption
Date |
|
Redemption Price
|
|||||||
6.625% Senior Notes due 2020
|
$
|
1,000
|
|
|
$
|
(45
|
)
|
|
$
|
22
|
|
|
February 10, 2017
|
|
102.208
|
%
|
5.250% Senior Notes due 2018
|
500
|
|
|
1
|
|
|
7
|
|
|
March 4, 2017
|
|
101.313
|
%
|
|||
6.250% Senior Notes due 2021
|
1,750
|
|
|
(71
|
)
|
|
55
|
|
|
April 1, 2017
|
|
103.125
|
%
|
|||
6.464% Senior Notes due 2019
|
1,250
|
|
|
—
|
|
|
—
|
|
|
April 28, 2017
|
|
100.000
|
%
|
|||
6.542% Senior Notes due 2020
|
1,250
|
|
|
—
|
|
|
21
|
|
|
April 28, 2017
|
|
101.636
|
%
|
|||
6.633% Senior Notes due 2021
|
1,250
|
|
|
—
|
|
|
41
|
|
|
April 28, 2017
|
|
103.317
|
%
|
|||
6.731% Senior Notes due 2022
|
1,250
|
|
|
—
|
|
|
42
|
|
|
April 28, 2017
|
|
103.366
|
%
|
|||
Total note redemptions
|
$
|
8,250
|
|
|
$
|
(115
|
)
|
|
$
|
188
|
|
|
|
|
|
(1)
|
Write-off of premiums, discounts, issuance costs and call penalties are included in
Other expense, net
in our
Consolidated Statements of Comprehensive Income
. Write-off of premiums, discounts and issuance costs are included in
Other, net
within
Net cash provided by operating activities
in our
Consolidated Statements of Cash Flows
.
|
(2)
|
The call penalty is the excess paid over the principal amount. Call penalties are included within
Net cash provided by operating activities
in our
Consolidated Statements of Cash Flows
.
|
(in millions)
|
Net Proceeds from Issuance of Long-Term Debt
|
|
Extinguishments
|
|
Write-off of Discounts and Issuance Costs
(1)
|
||||||
LIBOR plus 2.00% Senior Secured Term Loan due 2022
|
$
|
2,000
|
|
|
$
|
—
|
|
|
$
|
—
|
|
LIBOR plus 2.00% Senior Secured Term Loan due 2024
|
2,000
|
|
|
—
|
|
|
—
|
|
|||
LIBOR plus 2.750% Senior Secured Term Loan
(2)
|
—
|
|
|
(1,980
|
)
|
|
13
|
|
|||
Total
|
$
|
4,000
|
|
|
$
|
(1,980
|
)
|
|
$
|
13
|
|
(1)
|
Write-off of discounts and issuance costs are included in
Other expense, net
in our
Consolidated Statements of Comprehensive Income
and
Other, net
within
Net cash provided by operating activities
in our
Consolidated Statements of Cash Flows
.
|
(2)
|
Our Senior Secured Term Loan extinguished during the
year ended
December 31, 2017
was Third Party debt.
|
(in millions)
|
Principal Issuances (Redemptions)
|
|
Discounts
(1)
|
|
Net Proceeds from Issuance of Long-Term Debt
|
||||||
4.000% Senior Notes due 2022
|
$
|
1,000
|
|
|
$
|
(23
|
)
|
|
$
|
977
|
|
5.125% Senior Notes due 2025
|
1,250
|
|
|
(28
|
)
|
|
1,222
|
|
|||
5.375% Senior Notes due 2027
(2)
|
1,250
|
|
|
(28
|
)
|
|
1,222
|
|
|||
6.288% Senior Reset Notes due 2019
|
(1,250
|
)
|
|
—
|
|
|
(1,250
|
)
|
|||
6.366% Senior Reset Notes due 2020
|
(1,250
|
)
|
|
—
|
|
|
(1,250
|
)
|
|||
Total
|
$
|
1,000
|
|
|
$
|
(79
|
)
|
|
$
|
921
|
|
(1)
|
Discounts reduce
Proceeds from issuance of long-term debt
and are included within
Net cash (used in) provided by financing activities
in our
Consolidated Statements of Cash Flows
.
|
(2)
|
In April 2017, we issued to DT
$750 million
in aggregate principal amount of the
5.375% Senior Notes due 2027
, and in September 2017, we issued to DT the remaining
$500 million
in aggregate principal amount of the
5.375% Senior Notes due 2027
.
|
(in millions)
|
Principal Issuances
|
|
Premium
|
|
Net Proceeds from Issuance of Long-Term Debt
|
||||||
5.300% Senior Notes due 2021
|
$
|
2,000
|
|
|
$
|
—
|
|
|
$
|
2,000
|
|
6.000% Senior Notes due 2024
|
1,350
|
|
|
40
|
|
|
1,390
|
|
|||
6.000% Senior Notes due 2024
|
650
|
|
|
24
|
|
|
674
|
|
|||
Total
|
$
|
4,000
|
|
|
$
|
64
|
|
|
$
|
4,064
|
|
(in millions)
|
Future Minimum Payments
|
||
Year Ended December 31,
|
|
||
2018
|
$
|
682
|
|
2019
|
634
|
|
|
2020
|
338
|
|
|
2021
|
151
|
|
|
2022
|
67
|
|
|
Thereafter
|
172
|
|
|
Total
|
$
|
2,044
|
|
Included in Total
|
|
||
Interest
|
$
|
169
|
|
Maintenance
|
51
|
|
(in millions)
|
December 31,
2017 |
|
December 31,
2016 |
||||
JP Morgan Chase
|
$
|
20
|
|
|
$
|
20
|
|
Deutsche Bank
|
59
|
|
|
54
|
|
||
Total outstanding balance
|
$
|
79
|
|
|
$
|
74
|
|
(in millions)
|
December 31,
2017 |
|
December 31,
2016 |
||||
Property and equipment, net
|
$
|
402
|
|
|
$
|
485
|
|
Long-term financial obligation
|
2,590
|
|
|
2,621
|
|
(in millions, except shares, per share and contractual life amounts)
|
December 31,
2017 |
|
December 31,
2016 |
|
December 31,
2015 |
||||||
Stock-based compensation expense
|
$
|
306
|
|
|
$
|
235
|
|
|
$
|
201
|
|
Income tax benefit related to stock-based compensation
|
73
|
|
|
80
|
|
|
71
|
|
|||
Realized excess tax benefit
|
—
|
|
|
—
|
|
|
79
|
|
|||
Weighted average fair value per stock award granted
|
60.21
|
|
|
45.07
|
|
|
35.56
|
|
|||
Unrecognized compensation expense
|
445
|
|
|
389
|
|
|
327
|
|
|||
Weighted average period to be recognized (years)
|
1.9
|
|
|
2.0
|
|
|
2.0
|
|
|||
Fair value of stock awards vested
|
503
|
|
|
354
|
|
|
445
|
|
(in millions, except shares, per share and contractual life amounts)
|
Number of Units
(1)
|
|
Weighted Average Grant Date Fair Value
|
|
Weighted Average Remaining Contractual Term (Years)
|
|
Aggregate Intrinsic Value
|
|||||
Nonvested, December 31, 2016
|
15,715,391
|
|
|
$
|
37.93
|
|
|
1.1
|
|
$
|
904
|
|
Granted
|
7,133,359
|
|
|
60.21
|
|
|
|
|
|
|||
Vested
|
(8,338,271
|
)
|
|
35.47
|
|
|
|
|
|
|||
Forfeited
|
(814,936
|
)
|
|
49.02
|
|
|
|
|
|
|||
Nonvested, December 31, 2017
|
13,695,543
|
|
|
50.38
|
|
|
1.1
|
|
870
|
|
(1)
|
PRSUs included in the table above are shown at target. Share payout can range from
0
to
200%
based on different performance outcomes.
|
|
Shares
|
|
Weighted Average Exercise Price
|
|
Weighted Average Remaining Contractual Term (Years)
|
|||
Outstanding and exercisable, December 31, 2016
|
833,931
|
|
|
$
|
31.75
|
|
|
2.3
|
Exercised
|
(450,873
|
)
|
|
44.18
|
|
|
|
|
Expired
|
(9,900
|
)
|
|
45.76
|
|
|
|
|
Outstanding and exercisable, December 31, 2017
|
373,158
|
|
|
16.36
|
|
|
2.8
|
(in millions)
|
December 31,
2017 |
|
December 31,
2016 |
|
December 31,
2015 |
||||||
Compensation expense
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
27
|
|
Payments
|
—
|
|
|
52
|
|
|
57
|
|
(In millions, except shares and per share price)
|
Number of Shares Repurchased
|
|
Average Price Paid Per Share
|
|
Total Purchase Price
|
|||||
Year Ended December 31, 2017
|
7,010,889
|
|
|
$
|
63.34
|
|
|
$
|
444
|
|
|
Year Ended December 31,
|
||||||||||
(in millions)
|
2017
|
|
2016
|
|
2015
|
||||||
U.S.
|
$
|
3,274
|
|
|
$
|
2,286
|
|
|
$
|
898
|
|
Puerto Rico
|
(113
|
)
|
|
41
|
|
|
80
|
|
|||
Income before income taxes
|
$
|
3,161
|
|
|
$
|
2,327
|
|
|
$
|
978
|
|
|
Year Ended December 31,
|
||||||||||
(in millions)
|
2017
|
|
2016
|
|
2015
|
||||||
Current tax benefit (expense)
|
|
|
|
|
|
||||||
Federal
|
$
|
—
|
|
|
$
|
66
|
|
|
$
|
30
|
|
State
|
(28
|
)
|
|
(29
|
)
|
|
(2
|
)
|
|||
Puerto Rico
|
(1
|
)
|
|
10
|
|
|
(17
|
)
|
|||
Total current tax benefit (expense)
|
(29
|
)
|
|
47
|
|
|
11
|
|
|||
Deferred tax benefit (expense)
|
|
|
|
|
|
||||||
Federal
|
1,182
|
|
|
(804
|
)
|
|
(281
|
)
|
|||
State
|
173
|
|
|
(96
|
)
|
|
37
|
|
|||
Puerto Rico
|
49
|
|
|
(14
|
)
|
|
(12
|
)
|
|||
Total deferred tax benefit (expense)
|
1,404
|
|
|
(914
|
)
|
|
(256
|
)
|
|||
Total income tax benefit (expense)
|
$
|
1,375
|
|
|
$
|
(867
|
)
|
|
$
|
(245
|
)
|
|
Year Ended December 31,
|
|||||||
|
2017
|
|
2016
|
|
2015
|
|||
Federal statutory income tax rate
|
35.0
|
%
|
|
35.0
|
%
|
|
35.0
|
%
|
Effect of the Tax Cuts and Jobs Act
|
(68.9
|
)
|
|
—
|
|
|
—
|
|
Change in valuation allowance
|
(11.4
|
)
|
|
1.0
|
|
|
(3.2
|
)
|
State taxes, net of federal benefit
|
4.8
|
|
|
4.0
|
|
|
(1.1
|
)
|
Equity-based compensation
|
(2.4
|
)
|
|
(2.2
|
)
|
|
—
|
|
Puerto Rico taxes, net of federal benefit
|
(1.5
|
)
|
|
—
|
|
|
3.3
|
|
Permanent differences
|
0.5
|
|
|
0.6
|
|
|
1.6
|
|
Federal tax credits, net of reserves
|
0.3
|
|
|
(0.5
|
)
|
|
(9.5
|
)
|
Other, net
|
0.1
|
|
|
(0.6
|
)
|
|
(1.0
|
)
|
Effective income tax rate
|
(43.5
|
)%
|
|
37.3
|
%
|
|
25.1
|
%
|
(in millions)
|
December 31,
2017 |
|
December 31,
2016 |
||||
Deferred tax assets
|
|
|
|
||||
Loss carryforwards
|
$
|
1,576
|
|
|
$
|
1,442
|
|
Deferred rents
|
759
|
|
|
1,153
|
|
||
Reserves and accruals
|
667
|
|
|
1,058
|
|
||
Federal and state tax credits
|
298
|
|
|
284
|
|
||
Debt fair market value adjustment
|
—
|
|
|
83
|
|
||
Other
|
403
|
|
|
430
|
|
||
Deferred tax assets, gross
|
3,703
|
|
|
4,450
|
|
||
Valuation allowance
|
(273
|
)
|
|
(573
|
)
|
||
Deferred tax assets, net
|
3,430
|
|
|
3,877
|
|
||
Deferred tax liabilities
|
|
|
|
||||
Spectrum licenses
|
5,038
|
|
|
6,952
|
|
||
Property and equipment
|
1,840
|
|
|
1,732
|
|
||
Other intangible assets
|
41
|
|
|
119
|
|
||
Other
|
48
|
|
|
12
|
|
||
Total deferred tax liabilities
|
6,967
|
|
|
8,815
|
|
||
Net deferred tax liabilities
|
$
|
3,537
|
|
|
$
|
4,938
|
|
|
|
|
|
||||
Classified on the balance sheet as:
|
|
|
|
||||
Deferred tax liabilities
|
$
|
3,537
|
|
|
$
|
4,938
|
|
|
Year Ended December 31,
|
||||||||||
(in millions)
|
2017
|
|
2016
|
|
2015
|
||||||
Unrecognized tax benefits, beginning of year
|
$
|
410
|
|
|
$
|
411
|
|
|
$
|
388
|
|
Gross decreases to tax positions in prior periods
|
(10
|
)
|
|
(5
|
)
|
|
(112
|
)
|
|||
Gross increases to current period tax positions
|
12
|
|
|
4
|
|
|
135
|
|
|||
Unrecognized tax benefits, end of year
|
$
|
412
|
|
|
$
|
410
|
|
|
$
|
411
|
|
|
Year Ended December 31,
|
||||||||||
(in millions, except shares and per share amounts)
|
2017
|
|
2016
|
|
2015
|
||||||
Net income
|
$
|
4,536
|
|
|
$
|
1,460
|
|
|
$
|
733
|
|
Less: Dividends on mandatory convertible preferred stock
|
(55
|
)
|
|
(55
|
)
|
|
(55
|
)
|
|||
Net income attributable to common stockholders - basic
|
4,481
|
|
|
1,405
|
|
|
678
|
|
|||
Add: Dividends related to mandatory convertible preferred stock
|
55
|
|
|
—
|
|
|
—
|
|
|||
Net income attributable to common stockholders - diluted
|
$
|
4,536
|
|
|
$
|
1,405
|
|
|
$
|
678
|
|
|
|
|
|
|
|
||||||
Weighted average shares outstanding - basic
|
831,850,073
|
|
|
822,470,275
|
|
|
812,994,028
|
|
|||
Effect of dilutive securities:
|
|
|
|
|
|
||||||
Outstanding stock options and unvested stock awards
|
9,200,873
|
|
|
10,584,270
|
|
|
9,623,910
|
|
|||
Mandatory convertible preferred stock
|
30,736,504
|
|
|
—
|
|
|
—
|
|
|||
Weighted average shares outstanding - diluted
|
871,787,450
|
|
|
833,054,545
|
|
|
822,617,938
|
|
|||
|
|
|
|
|
|
||||||
Earnings per share - basic
|
$
|
5.39
|
|
|
$
|
1.71
|
|
|
$
|
0.83
|
|
Earnings per share - diluted
|
$
|
5.20
|
|
|
$
|
1.69
|
|
|
$
|
0.82
|
|
|
|
|
|
|
|
||||||
Potentially dilutive securities:
|
|
|
|
|
|
||||||
Outstanding stock options and unvested stock awards
|
33,980
|
|
|
3,528,683
|
|
|
4,842,370
|
|
|||
Mandatory convertible preferred stock
|
—
|
|
|
32,238,000
|
|
|
32,238,000
|
|
(in millions)
|
December 31,
2017 |
|
December 31,
2016 |
||||
Accounts payable
|
$
|
6,182
|
|
|
$
|
5,163
|
|
Payroll and related benefits
|
614
|
|
|
559
|
|
||
Property and other taxes, including payroll
|
620
|
|
|
525
|
|
||
Interest
|
253
|
|
|
423
|
|
||
Commissions
|
324
|
|
|
159
|
|
||
Network decommissioning
|
92
|
|
|
101
|
|
||
Toll and interconnect
|
109
|
|
|
85
|
|
||
Advertising
|
46
|
|
|
44
|
|
||
Other
|
288
|
|
|
93
|
|
||
Accounts payable and accrued liabilities
|
$
|
8,528
|
|
|
$
|
7,152
|
|
|
Year Ended December 31,
|
||||||||||
(in millions)
|
2017
|
|
2016
|
|
2015
|
||||||
Discount related to roaming expenses
|
$
|
—
|
|
|
$
|
(15
|
)
|
|
$
|
(21
|
)
|
Fees incurred for use of the T-Mobile brand
|
79
|
|
|
74
|
|
|
65
|
|
|||
Expenses for telecommunications and IT services
|
12
|
|
|
25
|
|
|
23
|
|
|||
International long distance agreement
|
55
|
|
|
60
|
|
|
—
|
|
(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 8 – 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
|
$
|
358
|
|
|
$
|
2,733
|
|
|
$
|
2,342
|
|
|
$
|
67
|
|
|
$
|
—
|
|
|
$
|
5,500
|
|
Accounts receivable, net
|
—
|
|
|
—
|
|
|
1,675
|
|
|
221
|
|
|
—
|
|
|
1,896
|
|
||||||
Equipment installment plan receivables, net
|
—
|
|
|
—
|
|
|
1,930
|
|
|
—
|
|
|
—
|
|
|
1,930
|
|
||||||
Accounts receivable from affiliates
|
—
|
|
|
—
|
|
|
40
|
|
|
—
|
|
|
—
|
|
|
40
|
|
||||||
Inventories
|
—
|
|
|
—
|
|
|
1,111
|
|
|
—
|
|
|
—
|
|
|
1,111
|
|
||||||
Asset purchase deposit
|
—
|
|
|
—
|
|
|
2,203
|
|
|
—
|
|
|
—
|
|
|
2,203
|
|
||||||
Other current assets
|
—
|
|
|
—
|
|
|
972
|
|
|
565
|
|
|
—
|
|
|
1,537
|
|
||||||
Total current assets
|
358
|
|
|
2,733
|
|
|
10,273
|
|
|
853
|
|
|
—
|
|
|
14,217
|
|
||||||
Property and equipment, net
(1)
|
—
|
|
|
—
|
|
|
20,568
|
|
|
375
|
|
|
—
|
|
|
20,943
|
|
||||||
Goodwill
|
—
|
|
|
—
|
|
|
1,683
|
|
|
—
|
|
|
—
|
|
|
1,683
|
|
||||||
Spectrum licenses
|
—
|
|
|
—
|
|
|
27,014
|
|
|
—
|
|
|
—
|
|
|
27,014
|
|
||||||
Other intangible assets, net
|
—
|
|
|
—
|
|
|
376
|
|
|
—
|
|
|
—
|
|
|
376
|
|
||||||
Investments in subsidiaries, net
|
17,682
|
|
|
35,095
|
|
|
—
|
|
|
—
|
|
|
(52,777
|
)
|
|
—
|
|
||||||
Intercompany receivables and note receivables
|
196
|
|
|
6,826
|
|
|
—
|
|
|
—
|
|
|
(7,022
|
)
|
|
—
|
|
||||||
Equipment installment plan receivables due after one year, net
|
—
|
|
|
—
|
|
|
984
|
|
|
—
|
|
|
—
|
|
|
984
|
|
||||||
Other assets
|
—
|
|
|
7
|
|
|
600
|
|
|
262
|
|
|
(195
|
)
|
|
674
|
|
||||||
Total assets
|
$
|
18,236
|
|
|
$
|
44,661
|
|
|
$
|
61,498
|
|
|
$
|
1,490
|
|
|
$
|
(59,994
|
)
|
|
$
|
65,891
|
|
Liabilities and Stockholders' Equity
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Current liabilities
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Accounts payable and accrued liabilities
|
$
|
—
|
|
|
$
|
423
|
|
|
$
|
6,474
|
|
|
$
|
255
|
|
|
$
|
—
|
|
|
$
|
7,152
|
|
Payables to affiliates
|
—
|
|
|
79
|
|
|
46
|
|
|
—
|
|
|
—
|
|
|
125
|
|
||||||
Short-term debt
|
—
|
|
|
20
|
|
|
334
|
|
|
—
|
|
|
—
|
|
|
354
|
|
||||||
Deferred revenue
|
—
|
|
|
—
|
|
|
986
|
|
|
—
|
|
|
—
|
|
|
986
|
|
||||||
Other current liabilities
|
—
|
|
|
—
|
|
|
258
|
|
|
147
|
|
|
—
|
|
|
405
|
|
||||||
Total current liabilities
|
—
|
|
|
522
|
|
|
8,098
|
|
|
402
|
|
|
—
|
|
|
9,022
|
|
||||||
Long-term debt
|
—
|
|
|
20,741
|
|
|
1,091
|
|
|
—
|
|
|
—
|
|
|
21,832
|
|
||||||
Long-term debt to affiliates
|
—
|
|
|
5,600
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
5,600
|
|
||||||
Tower obligations
(1)
|
—
|
|
|
—
|
|
|
400
|
|
|
2,221
|
|
|
—
|
|
|
2,621
|
|
||||||
Deferred tax liabilities
|
—
|
|
|
—
|
|
|
5,133
|
|
|
—
|
|
|
(195
|
)
|
|
4,938
|
|
||||||
Deferred rent expense
|
—
|
|
|
—
|
|
|
2,616
|
|
|
—
|
|
|
—
|
|
|
2,616
|
|
||||||
Negative carrying value of subsidiaries, net
|
—
|
|
|
—
|
|
|
568
|
|
|
—
|
|
|
(568
|
)
|
|
—
|
|
||||||
Intercompany payables and debt
|
—
|
|
|
—
|
|
|
6,785
|
|
|
237
|
|
|
(7,022
|
)
|
|
—
|
|
||||||
Other long-term liabilities
|
—
|
|
|
116
|
|
|
906
|
|
|
4
|
|
|
—
|
|
|
1,026
|
|
||||||
Total long-term liabilities
|
—
|
|
|
26,457
|
|
|
17,499
|
|
|
2,462
|
|
|
(7,785
|
)
|
|
38,633
|
|
||||||
Total stockholders' equity (deficit)
|
18,236
|
|
|
17,682
|
|
|
35,901
|
|
|
(1,374
|
)
|
|
(52,209
|
)
|
|
18,236
|
|
||||||
Total liabilities and stockholders' equity
|
$
|
18,236
|
|
|
$
|
44,661
|
|
|
$
|
61,498
|
|
|
$
|
1,490
|
|
|
$
|
(59,994
|
)
|
|
$
|
65,891
|
|
(1)
|
Assets and liabilities for Non-Guarantor Subsidiaries are primarily included in VIEs related to the 2012 Tower Transaction. See
Note 8 – Tower Obligations
for further information.
|
(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 expense
|
—
|
|
|
—
|
|
|
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 (expense) income, net
|
—
|
|
|
(88
|
)
|
|
16
|
|
|
(1
|
)
|
|
—
|
|
|
(73
|
)
|
||||||
Total other income (expense), net
|
1
|
|
|
(1,430
|
)
|
|
(106
|
)
|
|
(192
|
)
|
|
—
|
|
|
(1,727
|
)
|
||||||
Income (loss) before income taxes
|
1
|
|
|
(1,427
|
)
|
|
4,407
|
|
|
180
|
|
|
—
|
|
|
3,161
|
|
||||||
Income tax benefit (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 (As adjusted - See
Note 1
)
|
|
Non-Guarantor Subsidiaries
|
|
Consolidating and Eliminating Adjustments
|
|
Consolidated (As adjusted - See
Note 1
)
|
||||||||||||
Revenues
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Service revenues
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
26,613
|
|
|
$
|
2,023
|
|
|
$
|
(792
|
)
|
|
$
|
27,844
|
|
Equipment revenues
|
—
|
|
|
—
|
|
|
9,145
|
|
|
—
|
|
|
(418
|
)
|
|
8,727
|
|
||||||
Other revenues
|
—
|
|
|
3
|
|
|
739
|
|
(1)
|
195
|
|
|
(18
|
)
|
|
919
|
|
||||||
Total revenues
|
—
|
|
|
3
|
|
|
36,497
|
|
(1)
|
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
|
|
(1)
|
221
|
|
|
—
|
|
|
4,050
|
|
||||||
Other income (expense)
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Interest expense
|
—
|
|
|
(1,147
|
)
|
|
(82
|
)
|
|
(189
|
)
|
|
—
|
|
|
(1,418
|
)
|
||||||
Interest expense to affiliates
|
—
|
|
|
(312
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(312
|
)
|
||||||
Interest income (expense)
|
—
|
|
|
31
|
|
|
(18
|
)
|
(1)
|
—
|
|
|
—
|
|
|
13
|
|
||||||
Other income (expense), net
|
—
|
|
|
2
|
|
|
(8
|
)
|
|
—
|
|
|
—
|
|
|
(6
|
)
|
||||||
Total other expense, net
|
—
|
|
|
(1,426
|
)
|
|
(108
|
)
|
(1)
|
(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
|
|
(1)
|
The amortized imputed discount on EIP receivables previously recognized as Interest income has been retrospectively reclassified as Other revenues. See
Note 1 - Summary of Significant Accounting Policies
for further information.
|
(in millions)
|
Parent
|
|
Issuer
|
|
Guarantor Subsidiaries (As adjusted - See
Note 1
)
|
|
Non-Guarantor Subsidiaries
|
|
Consolidating and Eliminating Adjustments
|
|
Consolidated (As adjusted - See
Note 1
)
|
||||||||||||
Revenues
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Service revenues
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
23,748
|
|
|
$
|
1,669
|
|
|
$
|
(596
|
)
|
|
$
|
24,821
|
|
Equipment revenues
|
—
|
|
|
—
|
|
|
7,148
|
|
|
—
|
|
|
(430
|
)
|
|
6,718
|
|
||||||
Other revenues
|
—
|
|
|
1
|
|
|
770
|
|
(1)
|
171
|
|
|
(14
|
)
|
|
928
|
|
||||||
Total revenues
|
—
|
|
|
1
|
|
|
31,666
|
|
(1)
|
1,840
|
|
|
(1,040
|
)
|
|
32,467
|
|
||||||
Operating expenses
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Cost of services, exclusive of depreciation and amortization shown separately below
|
—
|
|
|
—
|
|
|
5,530
|
|
|
24
|
|
|
—
|
|
|
5,554
|
|
||||||
Cost of equipment sales
|
—
|
|
|
—
|
|
|
9,055
|
|
|
720
|
|
|
(431
|
)
|
|
9,344
|
|
||||||
Selling, general and administrative
|
—
|
|
|
—
|
|
|
10,065
|
|
|
733
|
|
|
(609
|
)
|
|
10,189
|
|
||||||
Depreciation and amortization
|
—
|
|
|
—
|
|
|
4,605
|
|
|
83
|
|
|
—
|
|
|
4,688
|
|
||||||
Cost of MetroPCS business combination
|
—
|
|
|
—
|
|
|
376
|
|
|
—
|
|
|
—
|
|
|
376
|
|
||||||
Gains on disposal of spectrum licenses
|
—
|
|
|
—
|
|
|
(163
|
)
|
|
—
|
|
|
—
|
|
|
(163
|
)
|
||||||
Total operating expenses
|
—
|
|
|
—
|
|
|
29,468
|
|
|
1,560
|
|
|
(1,040
|
)
|
|
29,988
|
|
||||||
Operating income
|
—
|
|
|
1
|
|
|
2,198
|
|
(1)
|
280
|
|
|
—
|
|
|
2,479
|
|
||||||
Other income (expense)
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Interest expense
|
—
|
|
|
(847
|
)
|
|
(50
|
)
|
|
(188
|
)
|
|
—
|
|
|
(1,085
|
)
|
||||||
Interest expense to affiliates
|
—
|
|
|
(411
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(411
|
)
|
||||||
Interest income
|
—
|
|
|
2
|
|
|
4
|
|
(1)
|
—
|
|
|
—
|
|
|
6
|
|
||||||
Other expense, net
|
—
|
|
|
(10
|
)
|
|
—
|
|
|
(1
|
)
|
|
—
|
|
|
(11
|
)
|
||||||
Total other expense, net
|
—
|
|
|
(1,266
|
)
|
|
(46
|
)
|
(1)
|
(189
|
)
|
|
—
|
|
|
(1,501
|
)
|
||||||
Income (loss) before income taxes
|
—
|
|
|
(1,265
|
)
|
|
2,152
|
|
|
91
|
|
|
—
|
|
|
978
|
|
||||||
Income tax expense
|
—
|
|
|
—
|
|
|
(214
|
)
|
|
(31
|
)
|
|
—
|
|
|
(245
|
)
|
||||||
Earnings (loss) of subsidiaries
|
733
|
|
|
1,998
|
|
|
(48
|
)
|
|
—
|
|
|
(2,683
|
)
|
|
—
|
|
||||||
Net income
|
733
|
|
|
733
|
|
|
1,890
|
|
|
60
|
|
|
(2,683
|
)
|
|
733
|
|
||||||
Dividends on preferred stock
|
(55
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(55
|
)
|
||||||
Net income attributable to common stockholders
|
$
|
678
|
|
|
$
|
733
|
|
|
$
|
1,890
|
|
|
$
|
60
|
|
|
$
|
(2,683
|
)
|
|
$
|
678
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Net income
|
$
|
733
|
|
|
$
|
733
|
|
|
$
|
1,890
|
|
|
$
|
60
|
|
|
$
|
(2,683
|
)
|
|
$
|
733
|
|
Other comprehensive loss, net of tax
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Other comprehensive loss, net of tax
|
(2
|
)
|
|
(2
|
)
|
|
(2
|
)
|
|
—
|
|
|
4
|
|
|
(2
|
)
|
||||||
Total comprehensive income
|
$
|
731
|
|
|
$
|
731
|
|
|
$
|
1,888
|
|
|
$
|
60
|
|
|
$
|
(2,679
|
)
|
|
$
|
731
|
|
(1)
|
The amortized imputed discount on EIP receivables previously recognized as Interest income has been retrospectively reclassified as Other revenues. See
Note 1 - Summary of Significant Accounting Policies
for further information.
|
(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
|
)
|
|
$
|
9,616
|
|
|
$
|
58
|
|
|
$
|
(100
|
)
|
|
$
|
7,962
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Investing activities
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Purchases of property and equipment
|
—
|
|
|
—
|
|
|
(5,237
|
)
|
|
—
|
|
|
—
|
|
|
(5,237
|
)
|
||||||
Purchases of spectrum licenses and other intangible assets, including deposits
|
—
|
|
|
—
|
|
|
(5,828
|
)
|
|
—
|
|
|
—
|
|
|
(5,828
|
)
|
||||||
Equity investment in subsidiary
|
(308
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
308
|
|
|
—
|
|
||||||
Other, net
|
—
|
|
|
—
|
|
|
1
|
|
|
—
|
|
|
—
|
|
|
1
|
|
||||||
Net cash used in investing activities
|
(308
|
)
|
|
—
|
|
|
(11,064
|
)
|
|
—
|
|
|
308
|
|
|
(11,064
|
)
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
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
|
)
|
||||||
Proceeds from exercise of stock options
|
21
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
21
|
|
||||||
Repurchases of common shares
|
(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
|
)
|
||||||
Intercompany dividend paid
|
—
|
|
|
—
|
|
|
—
|
|
|
(100
|
)
|
|
100
|
|
|
—
|
|
||||||
Dividends on preferred stock
|
(55
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(55
|
)
|
||||||
Other, net
|
—
|
|
|
—
|
|
|
(16
|
)
|
|
—
|
|
|
—
|
|
|
(16
|
)
|
||||||
Net cash provided by (used in) financing activities
|
23
|
|
|
(1,119
|
)
|
|
192
|
|
|
(67
|
)
|
|
(208
|
)
|
|
(1,179
|
)
|
||||||
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
|
)
|
|
$
|
7,541
|
|
|
$
|
33
|
|
|
$
|
(110
|
)
|
|
$
|
6,135
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
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
|
)
|
||||||
Sales of short-term investments
|
—
|
|
|
2,000
|
|
|
998
|
|
|
—
|
|
|
—
|
|
|
2,998
|
|
||||||
Other, net
|
—
|
|
|
—
|
|
|
(8
|
)
|
|
—
|
|
|
—
|
|
|
(8
|
)
|
||||||
Net cash provided by (used in) investing activities
|
—
|
|
|
2,000
|
|
|
(7,680
|
)
|
|
—
|
|
|
—
|
|
|
(5,680
|
)
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
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
|
|
|
—
|
|
|
—
|
|
||||||
Proceeds from exercise of stock options
|
29
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
29
|
|
||||||
Tax withholdings on share-based awards
|
—
|
|
|
—
|
|
|
(121
|
)
|
|
—
|
|
|
—
|
|
|
(121
|
)
|
||||||
Intercompany dividend paid
|
—
|
|
|
—
|
|
|
—
|
|
|
(110
|
)
|
|
110
|
|
|
—
|
|
||||||
Dividends on preferred stock
|
(55
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(55
|
)
|
||||||
Other, net
|
—
|
|
|
—
|
|
|
(12
|
)
|
|
—
|
|
|
—
|
|
|
(12
|
)
|
||||||
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)
|
Parent
|
|
Issuer
|
|
Guarantor Subsidiaries
|
|
Non-Guarantor Subsidiaries
|
|
Consolidating and Eliminating Adjustments
|
|
Consolidated
|
||||||||||||
Operating activities
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Net cash provided by (used in) operating activities
|
$
|
(1
|
)
|
|
$
|
(1,147
|
)
|
|
$
|
6,652
|
|
|
$
|
85
|
|
|
$
|
(175
|
)
|
|
$
|
5,414
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Investing activities
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Purchases of property and equipment
|
—
|
|
|
—
|
|
|
(4,724
|
)
|
|
—
|
|
|
—
|
|
|
(4,724
|
)
|
||||||
Purchases of spectrum licenses and other intangible assets, including deposits
|
—
|
|
|
—
|
|
|
(1,935
|
)
|
|
—
|
|
|
—
|
|
|
(1,935
|
)
|
||||||
Purchases of short-term investments
|
—
|
|
|
(1,999
|
)
|
|
(998
|
)
|
|
—
|
|
|
—
|
|
|
(2,997
|
)
|
||||||
Investment in subsidiaries
|
(1,905
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,905
|
|
|
—
|
|
||||||
Other, net
|
—
|
|
|
—
|
|
|
96
|
|
|
—
|
|
|
—
|
|
|
96
|
|
||||||
Net cash used in investing activities
|
(1,905
|
)
|
|
(1,999
|
)
|
|
(7,561
|
)
|
|
—
|
|
|
1,905
|
|
|
(9,560
|
)
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Financing activities
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Proceeds from capital contribution
|
—
|
|
|
1,905
|
|
|
—
|
|
|
—
|
|
|
(1,905
|
)
|
|
—
|
|
||||||
Proceeds from issuance of long-term debt
|
—
|
|
|
3,979
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
3,979
|
|
||||||
Proceeds from tower obligations
|
—
|
|
|
140
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
140
|
|
||||||
Repayments of capital lease obligations
|
—
|
|
|
—
|
|
|
(57
|
)
|
|
—
|
|
|
—
|
|
|
(57
|
)
|
||||||
Repayments of short-term debt for purchases of inventory, property and equipment, net
|
—
|
|
|
—
|
|
|
(564
|
)
|
|
—
|
|
|
—
|
|
|
(564
|
)
|
||||||
Intercompany advances, net
|
—
|
|
|
(3,357
|
)
|
|
3,288
|
|
|
69
|
|
|
—
|
|
|
—
|
|
||||||
Proceeds from exercise of stock options
|
47
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
47
|
|
||||||
Intercompany dividend paid
|
—
|
|
|
—
|
|
|
—
|
|
|
(175
|
)
|
|
175
|
|
|
—
|
|
||||||
Tax withholdings on share-based awards
|
—
|
|
|
—
|
|
|
(156
|
)
|
|
—
|
|
|
—
|
|
|
(156
|
)
|
||||||
Dividends on preferred stock
|
(41
|
)
|
|
—
|
|
|
(14
|
)
|
|
—
|
|
|
—
|
|
|
(55
|
)
|
||||||
Other, net
|
—
|
|
|
—
|
|
|
79
|
|
|
—
|
|
|
—
|
|
|
79
|
|
||||||
Net cash provided by (used in) financing activities
|
6
|
|
|
2,667
|
|
|
2,576
|
|
|
(106
|
)
|
|
(1,730
|
)
|
|
3,413
|
|
||||||
Change in cash and cash equivalents
|
(1,900
|
)
|
|
(479
|
)
|
|
1,667
|
|
|
(21
|
)
|
|
—
|
|
|
(733
|
)
|
||||||
Cash and cash equivalents
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Beginning of period
|
2,278
|
|
|
2,246
|
|
|
697
|
|
|
94
|
|
|
—
|
|
|
5,315
|
|
||||||
End of period
|
$
|
378
|
|
|
$
|
1,767
|
|
|
$
|
2,364
|
|
|
$
|
73
|
|
|
$
|
—
|
|
|
$
|
4,582
|
|
(in millions, except shares and per share amounts)
|
First Quarter
|
|
Second Quarter
|
|
Third Quarter
|
|
Fourth Quarter
|
|
Full Year
|
||||||||||
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
|
869,395,250
|
|
|
870,456,447
|
|
|
871,420,065
|
|
|
871,501,578
|
|
|
871,787,450
|
|
|||||
Net income includes:
|
|
|
|
|
|
|
|
|
|
||||||||||
Gains on disposal of spectrum licenses
|
$
|
(37
|
)
|
|
$
|
(1
|
)
|
|
$
|
(29
|
)
|
|
$
|
(168
|
)
|
|
$
|
(235
|
)
|
2016
|
|
|
|
|
|
|
|
|
|
||||||||||
Total revenues
(1)
|
$
|
8,664
|
|
|
$
|
9,287
|
|
|
$
|
9,305
|
|
|
$
|
10,234
|
|
|
$
|
37,490
|
|
Operating income
(1)
|
1,168
|
|
|
833
|
|
|
1,048
|
|
|
1,001
|
|
|
4,050
|
|
|||||
Net income
|
479
|
|
|
225
|
|
|
366
|
|
|
390
|
|
|
1,460
|
|
|||||
Dividends on preferred stock
|
(14
|
)
|
|
(14
|
)
|
|
(13
|
)
|
|
(14
|
)
|
|
(55
|
)
|
|||||
Net income attributable to common stockholders
|
465
|
|
|
211
|
|
|
353
|
|
|
376
|
|
|
1,405
|
|
|||||
Earnings per share
|
|
|
|
|
|
|
|
|
|
||||||||||
Basic
|
$
|
0.57
|
|
|
$
|
0.26
|
|
|
$
|
0.43
|
|
|
$
|
0.46
|
|
|
$
|
1.71
|
|
Diluted
|
0.56
|
|
|
0.25
|
|
|
0.42
|
|
|
0.45
|
|
|
1.69
|
|
|||||
Weighted average shares outstanding
|
|
|
|
|
|
|
|
|
|
||||||||||
Basic
|
819,431,761
|
|
|
822,434,490
|
|
|
822,998,697
|
|
|
824,982,734
|
|
|
822,470,275
|
|
|||||
Diluted
|
859,382,827
|
|
|
829,752,956
|
|
|
832,257,819
|
|
|
867,262,400
|
|
|
833,054,545
|
|
|||||
Net income includes:
|
|
|
|
|
|
|
|
|
|
||||||||||
Cost of MetroPCS business combination
|
$
|
36
|
|
|
$
|
59
|
|
|
$
|
15
|
|
|
$
|
(6
|
)
|
|
$
|
104
|
|
Gains on disposal of spectrum licenses
|
(636
|
)
|
|
—
|
|
|
(199
|
)
|
|
—
|
|
|
(835
|
)
|
(1)
|
The amortized imputed discount on EIP receivables previously recognized as Interest income has been retrospectively re-classified as Other revenues. 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.
|
|
|
|
|
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
|
|
|
|
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
|
|
|
|
4.1
|
|
|
8-K
|
|
9/21/2010
|
|
4.1
|
|
|
|
4.2
|
|
|
8-K
|
|
9/21/2010
|
|
4.2
|
|
|
|
4.3
|
|
|
8-K
|
|
11/17/2010
|
|
4.1
|
|
|
|
4.4
|
|
|
10-K
|
|
3/1/2011
|
|
10.19(d)
|
|
|
|
4.5
|
|
|
10-K
|
|
3/1/2011
|
|
10.19(e)
|
|
|
|
4.6
|
|
|
8-K
|
|
12/17/2012
|
|
4.1
|
|
|
|
4.7
|
|
|
8-K
|
|
12/17/2012
|
|
4.2
|
|
|
|
4.8
|
|
|
8-K
|
|
5/2/2013
|
|
4.15
|
|
|
|
4.9
|
|
|
10-Q
|
|
8/8/2013
|
|
4.19
|
|
|
|
4.10
|
|
|
10-Q
|
|
10/28/2014
|
|
4.2
|
|
|
|
4.11
|
|
|
10-Q
|
|
10/27/2015
|
|
4.2
|
|
|
|
4.12
|
|
|
10-Q
|
|
10/24/2016
|
|
4.1
|
|
|
|
|
|
|
Incorporated by Reference
|
|
|
||||
Exhibit No.
|
|
Exhibit Description
|
|
Form
|
|
Date of First Filing
|
|
Exhibit Number
|
|
Filed Herein
|
4.13
|
|
|
8-K
|
|
3/22/2013
|
|
4.1
|
|
|
|
4.14
|
|
|
8-K
|
|
3/22/2013
|
|
4.2
|
|
|
|
4.15
|
|
|
8-K
|
|
3/22/2013
|
|
4.3
|
|
|
|
4.16
|
|
|
8-K
|
|
3/22/2013
|
|
4.4
|
|
|
|
4.17
|
|
|
8-K
|
|
3/22/2013
|
|
4.5
|
|
|
|
4.18
|
|
|
10-Q
|
|
8/8/2013
|
|
4.17
|
|
|
|
4.19
|
|
|
8-K
|
|
5/2/2013
|
|
4.16
|
|
|
|
4.20
|
|
|
10-Q
|
|
8/8/2013
|
|
4.20
|
|
|
|
4.21
|
|
|
10-Q
|
|
10/28/2014
|
|
4.1
|
|
|
|
4.22
|
|
|
10-Q
|
|
10/27/2015
|
|
4.1
|
|
|
|
4.23
|
|
|
10-Q
|
|
10/24/2016
|
|
4.2
|
|
|
|
4.24
|
|
|
|
|
|
|
|
|
X
|
|
4.25
|
|
|
8-K
|
|
5/2/2013
|
|
4.1
|
|
|
|
4.26
|
|
|
8-K
|
|
5/2/2013
|
|
4.2
|
|
|
|
4.27
|
|
|
8-K
|
|
5/2/2013
|
|
4.3
|
|
|
|
4.28
|
|
|
8-K
|
|
5/2/2013
|
|
4.4
|
|
|
|
4.29
|
|
|
8-K
|
|
5/2/2013
|
|
4.5
|
|
|
|
4.30
|
|
|
8-K
|
|
5/2/2013
|
|
4.6
|
|
|
|
|
|
|
Incorporated by Reference
|
|
|
||||
Exhibit No.
|
|
Exhibit Description
|
|
Form
|
|
Date of First Filing
|
|
Exhibit Number
|
|
Filed Herein
|
4.31
|
|
|
8-K
|
|
5/2/2013
|
|
4.7
|
|
|
|
4.32
|
|
|
8-K
|
|
5/2/2013
|
|
4.8
|
|
|
|
4.33
|
|
|
8-K
|
|
5/2/2013
|
|
4.9
|
|
|
|
4.34
|
|
|
8-K
|
|
5/2/2013
|
|
4.10
|
|
|
|
4.35
|
|
|
8-K
|
|
5/2/2013
|
|
4.11
|
|
|
|
4.36
|
|
|
8-K
|
|
5/2/2013
|
|
4.12
|
|
|
|
4.37
|
|
|
10-Q
|
|
8/8/2013
|
|
4.18
|
|
|
|
4.38
|
|
|
8-K
|
|
8/22/2013
|
|
4.1
|
|
|
|
4.39
|
|
|
8-K
|
|
11/22/2013
|
|
4.1
|
|
|
|
4.40
|
|
|
8-K
|
|
11/22/2013
|
|
4.2
|
|
|
|
4.41
|
|
|
10-Q
|
|
10/28/2014
|
|
4.3
|
|
|
|
4.42
|
|
|
8-K
|
|
9/5/2014
|
|
4.1
|
|
|
|
4.43
|
|
|
8-K
|
|
9/5/2014
|
|
4.2
|
|
|
|
4.44
|
|
|
10-Q
|
|
10/27/2015
|
|
4.3
|
|
|
|
4.45
|
|
|
8-K
|
|
11/5/2015
|
|
4.1
|
|
|
|
|
|
|
Incorporated by Reference
|
|
|
||||
Exhibit No.
|
|
Exhibit Description
|
|
Form
|
|
Date of First Filing
|
|
Exhibit Number
|
|
Filed Herein
|
4.46
|
|
|
8-K
|
|
4/1/2016
|
|
4.1
|
|
|
|
4.47
|
|
|
10-Q
|
|
10/24/2016
|
|
4.3
|
|
|
|
4.48
|
|
|
8-K
|
|
3/16/2017
|
|
4.1
|
|
|
|
4.49
|
|
|
8-K
|
|
3/16/2017
|
|
4.2
|
|
|
|
4.50
|
|
|
8-K
|
|
3/16/2017
|
|
4.3
|
|
|
|
4.51
|
|
|
8-K
|
|
4/28/2017
|
|
4.1
|
|
|
|
4.52
|
|
|
8-K
|
|
4/28/2017
|
|
4.2
|
|
|
|
4.53
|
|
|
8-K
|
|
4/28/2017
|
|
4.3
|
|
|
|
4.54
|
|
|
8-K
|
|
5/9/2017
|
|
4.1
|
|
|
|
4.55
|
|
|
8-K
|
|
5/9/2017
|
|
4.2
|
|
|
|
4.56
|
|
|
|
|
|
|
|
|
X
|
|
4.57
|
|
|
8-K
|
|
1/25/2018
|
|
4.1
|
|
|
|
|
|
|
Incorporated by Reference
|
|
|
||||
Exhibit No.
|
|
Exhibit Description
|
|
Form
|
|
Date of First Filing
|
|
Exhibit Number
|
|
Filed Herein
|
4.58
|
|
|
8-K
|
|
1/25/2018
|
|
4.2
|
|
|
|
4.59
|
|
|
8-K
|
|
5/2/2013
|
|
4.13
|
|
|
|
10.1
|
|
|
10-Q
|
|
8/8/2013
|
|
10.1
|
|
|
|
10.2
|
|
|
10-Q
|
|
8/8/2013
|
|
10.2
|
|
|
|
10.3
|
|
|
10-Q
|
|
8/8/2013
|
|
10.3
|
|
|
|
10.4
|
|
|
10-Q
|
|
8/8/2013
|
|
10.4
|
|
|
|
10.5
|
|
|
10-Q
|
|
8/8/2013
|
|
10.5
|
|
|
|
10.6
|
|
|
10-Q
|
|
8/8/2013
|
|
10.6
|
|
|
|
10.7
|
|
|
10-Q
|
|
8/8/2013
|
|
10.7
|
|
|
|
10.8
|
|
|
10-Q
|
|
8/8/2013
|
|
10.8
|
|
|
|
10.9
|
|
|
8-K
|
|
5/2/2013
|
|
10.1
|
|
|
|
10.10
|
|
|
10-Q
|
|
8/8/2013
|
|
10.10
|
|
|
|
|
|
|
Incorporated by Reference
|
|
|
||||
Exhibit No.
|
|
Exhibit Description
|
|
Form
|
|
Date of First Filing
|
|
Exhibit Number
|
|
Filed Herein
|
10.11
|
|
|
8-K
|
|
5/2/2013
|
|
10.2
|
|
|
|
10.12
|
|
|
8-K
|
|
5/2/2013
|
|
4.14
|
|
|
|
10.13
|
|
|
8-K
|
|
11/20/2013
|
|
10.1
|
|
|
|
10.14
|
|
|
8-K
|
|
9/5/2014
|
|
10.1
|
|
|
|
10.15
|
|
|
8-K
|
|
11/5/2015
|
|
10.2
|
|
|
|
10.16
|
|
|
8-K
|
|
3/22/2013
|
|
10.1
|
|
|
|
10.17
|
|
|
8-K
|
|
8/22/2013
|
|
10.1
|
|
|
|
10.18
|
|
|
8-K
|
|
1/6/2014
|
|
10.1
|
|
|
|
10.19
|
|
|
8-K
|
|
1/6/2014
|
|
10.2
|
|
|
|
10.20
|
|
|
10-K
|
|
2/14/2017
|
|
10.29
|
|
|
|
10.21
|
|
|
8-K
|
|
3/4/2014
|
|
10.1
|
|
|
|
10.22
|
|
|
10-K
|
|
2/19/2015
|
|
10.55
|
|
|
|
|
|
|
Incorporated by Reference
|
|
|
||||
Exhibit No.
|
|
Exhibit Description
|
|
Form
|
|
Date of First Filing
|
|
Exhibit Number
|
|
Filed Herein
|
10.23
|
|
|
10-Q
|
|
4/28/2015
|
|
10.5
|
|
|
|
10.24
|
|
|
8-K
|
|
3/4/2014
|
|
10.2
|
|
|
|
10.25
|
|
|
10-K
|
|
2/19/2015
|
|
10.56
|
|
|
|
10.26
|
|
|
10-Q
|
|
4/28/2015
|
|
10.6
|
|
|
|
10.27
|
|
|
10-K
|
|
2/14/2017
|
|
10.33
|
|
|
|
10.28
|
|
|
10-Q
|
|
7/20/2017
|
|
10.1
|
|
|
|
10.29
|
|
|
8-K
|
|
12/6/2016
|
|
10.1
|
|
|
|
10.30
|
|
|
10-Q
|
|
7/20/2017
|
|
10.2
|
|
|
|
10.31
|
|
|
|
|
|
|
|
|
X
|
|
10.32
|
|
|
8-K
|
|
11/12/2015
|
|
10.1
|
|
|
|
10.33
|
|
|
10-Q
|
|
4/24/2017
|
|
10.3
|
|
|
|
|
|
|
Incorporated by Reference
|
|
|
||||
Exhibit No.
|
|
Exhibit Description
|
|
Form
|
|
Date of First Filing
|
|
Exhibit Number
|
|
Filed Herein
|
10.34
|
|
|
10-Q
|
|
4/24/2017
|
|
10.4
|
|
|
|
10.35
|
|
|
10-Q
|
|
4/24/2017
|
|
10.5
|
|
|
|
10.36
|
|
|
8-K
|
|
7/27/2017
|
|
10.1
|
|
|
|
10.37
|
|
|
8-K
|
|
12/30/2016
|
|
10.3
|
|
|
|
10.38
|
|
|
8-K
|
|
1/25/2017
|
|
10.1
|
|
|
|
10.39
|
|
|
8-K
|
|
6/8/2016
|
|
10.1
|
|
|
|
10.40
|
|
|
10-K
|
|
2/14/2017
|
|
10.41
|
|
|
|
10.41
|
|
|
10-Q
|
|
10/23/2017
|
|
10.2
|
|
|
|
10.42
|
|
|
8-K
|
|
6/8/2016
|
|
10.2
|
|
|
|
10.43
|
|
|
10-Q
|
|
10/24/2016
|
|
10.1
|
|
|
|
10.44
|
|
|
10-K
|
|
2/14/2017
|
|
10.46
|
|
|
|
|
|
|
Incorporated by Reference
|
|
|
||||
Exhibit No.
|
|
Exhibit Description
|
|
Form
|
|
Date of First Filing
|
|
Exhibit Number
|
|
Filed Herein
|
10.45
|
|
|
10-K
|
|
2/14/2017
|
|
10.47
|
|
|
|
10.46
|
|
|
10-Q
|
|
7/20/2017
|
|
10.3
|
|
|
|
10.47
|
|
|
10-Q
|
|
10/23/2017
|
|
10.3
|
|
|
|
10.48
|
|
|
|
|
|
|
|
|
X
|
|
10.49
|
|
|
8-K
|
|
3/7/2016
|
|
1.1
|
|
|
|
10.50
|
|
|
8-K
|
|
11/2/2016
|
|
10.1
|
|
|
|
10.51
|
|
|
8-K
|
|
4/26/2016
|
|
1.1
|
|
|
|
10.52
|
|
|
8-K
|
|
11/2/2016
|
|
10.2
|
|
|
|
10.53
|
|
|
8-K
|
|
4/29/2016
|
|
1.1
|
|
|
|
10.54
|
|
|
8-K
|
|
11/2/2016
|
|
10.3
|
|
|
|
10.55
|
|
|
8-K
|
|
3/16/2017
|
|
10.1
|
|
|
|
10.56
|
|
|
8-K
|
|
12/30/2016
|
|
10.1
|
|
|
|
|
|
|
Incorporated by Reference
|
|
|
||||
Exhibit No.
|
|
Exhibit Description
|
|
Form
|
|
Date of First Filing
|
|
Exhibit Number
|
|
Filed Herein
|
10.57
|
|
|
8-K
|
|
12/30/2016
|
|
10.2
|
|
|
|
10.58
|
|
|
8-K
|
|
1/25/2018
|
|
10.1
|
|
|
|
10.59*
|
|
|
S-1/A
|
|
2/27/2007
|
|
10.1(a)
|
|
|
|
10.60*
|
|
|
Schedule 14A
|
|
4/19/2010
|
|
Annex A
|
|
|
|
10.61*
|
|
|
10-Q
|
|
8/9/2010
|
|
10.2
|
|
|
|
10.62*
|
|
|
10-Q
|
|
10/30/2012
|
|
10.1
|
|
|
|
10.63*
|
|
|
10-K
|
|
3/1/2013
|
|
10.9(a)
|
|
|
|
10.64*
|
|
|
10-K
|
|
3/1/2013
|
|
10.9(b)
|
|
|
|
10.65*
|
|
|
10-Q
|
|
8/9/2010
|
|
10.5
|
|
|
|
10.66*
|
|
|
10-K
|
|
2/29/2012
|
|
10.12
|
|
|
|
10.67*
|
|
|
10-K
|
|
3/1/2013
|
|
10.12(b)
|
|
|
|
10.68*
|
|
|
8-K
|
|
5/2/2013
|
|
10.3
|
|
|
|
10.69*
|
|
|
|
|
|
|
|
|
X
|
|
10.70*
|
|
|
8-K
|
|
5/2/2013
|
|
10.4
|
|
|
|
10.71*
|
|
|
10-Q
|
|
8/8/2013
|
|
10.17
|
|
|
|
10.72*
|
|
|
10-K
|
|
2/25/2014
|
|
10.35
|
|
|
|
10.73*
|
|
|
8-K
|
|
2/26/2015
|
|
10.1
|
|
|
|
10.74*
|
|
|
10-Q
|
|
4/24/2017
|
|
10.7
|
|
|
|
10.75*
|
|
|
10-Q
|
|
4/24/2017
|
|
10.6
|
|
|
|
10.76*
|
|
|
|
|
|
|
|
|
X
|
|
10.77*
|
|
|
10-K
|
|
2/25/2014
|
|
10.39
|
|
|
|
|
|
|
Incorporated by Reference
|
|
|
||||
Exhibit No.
|
|
Exhibit Description
|
|
Form
|
|
Date of First Filing
|
|
Exhibit Number
|
|
Filed Herein
|
10.78*
|
|
|
8-K
|
|
10/25/2013
|
|
10.1
|
|
|
|
10.79*
|
|
|
10-Q
|
|
8/8/2013
|
|
10.20
|
|
|
|
10.80*
|
|
|
10-Q
|
|
8/8/2013
|
|
10.21
|
|
|
|
10.81*
|
|
|
10-K
|
|
2/25/2014
|
|
10.45
|
|
|
|
10.82*
|
|
|
8-K
|
|
6/4/2013
|
|
10.2
|
|
|
|
10.83*
|
|
|
10-Q
|
|
8/8/2013
|
|
10.24
|
|
|
|
10.84*
|
|
|
10-Q
|
|
8/8/2013
|
|
10.25
|
|
|
|
10.85*
|
|
|
10-K
|
|
2/19/2015
|
|
10.43
|
|
|
|
10.86*
|
|
|
10-K
|
|
2/19/2015
|
|
10.44
|
|
|
|
10.87*
|
|
|
S-8
|
|
2/19/2015
|
|
99.1
|
|
|
|
10.88*
|
|
|
10-Q
|
|
7/20/2017
|
|
10.4
|
|
|
|
12.1
|
|
|
|
|
|
|
|
|
X
|
|
21.1
|
|
|
|
|
|
|
|
|
X
|
|
23.1
|
|
|
|
|
|
|
|
|
X
|
|
24.1
|
|
Power of Attorney, pursuant to which amendments to this Form 10-K may be filed (included on the signature page contained in Part IV of the Form 10-K).
|
|
|
|
|
|
|
|
X
|
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 7, 2018
|
|
/s/ John J. Legere
|
|
|
|
John J. Legere
President and Chief Executive Officer
|
|
Signature
|
|
Title
|
|
|
|
/s/ John J. Legere
|
|
President and Chief Executive Officer and
|
John J. Legere
|
|
Director (Principal Executive Officer)
|
|
|
|
/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/ W. Michael Barnes
|
|
Director
|
W. Michael Barnes
|
|
|
|
|
|
/s/ Thomas Dannenfeldt
|
|
Director
|
Thomas Dannenfeldt
|
|
|
|
|
|
/s/ Srikant Datar
|
|
Director
|
Srikant Datar
|
|
|
|
|
|
/s/ Lawrence H. Guffey
|
|
Director
|
Lawrence H. Guffey
|
|
|
|
|
|
/s/ Bruno Jacobfeuerborn
|
|
Director
|
Bruno Jacobfeuerborn
|
|
|
|
|
|
/s/ Raphael Kübler
|
|
Director
|
Raphael Kübler
|
|
|
|
|
|
/s/ Thorsten Langheim
|
|
Director
|
Thorsten Langheim
|
|
|
|
|
|
/s/ Teresa A. Taylor
|
|
Director
|
Teresa A. Taylor
|
|
|
|
|
|
/s/ Kelvin R. Westbrook
|
|
Director
|
Kelvin R. Westbrook
|
|
|