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Share Name | Share Symbol | Market | Type |
---|---|---|---|
T Mobile US Inc | NASDAQ:TMUS | NASDAQ | Common Stock |
Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|---|---|
-2.58 | -1.57% | 162.02 | 161.81 | 162.50 | 164.85 | 161.81 | 164.19 | 6,022,397 | 01:00:00 |
x
|
QUARTERLY REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
¨
|
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
DELAWARE
|
|
20-0836269
|
(State or other jurisdiction of incorporation or organization)
|
|
(I.R.S. Employer Identification No.)
|
12920 SE 38th Street, Bellevue, Washington
|
|
98006-1350
|
(Address of principal executive offices)
|
|
(Zip Code)
|
(425) 378-4000
|
||
(Registrant’s telephone number, including area code)
|
||
Securities registered pursuant to Section 12(b) of the Act:
|
Class
|
|
Shares Outstanding as of April 18, 2019
|
|
Common Stock, $0.00001 par value per share
|
|
854,303,011
|
|
|
|||
|
|||
|
|
||
|
|
||
|
|
||
|
|
||
|
|
||
|
|||
|
|||
|
|||
|
|
|
|
|
|||
|
|||
|
|||
|
|||
|
|||
|
|||
|
|||
|
|||
|
|
(in millions, except share and per share amounts)
|
March 31,
2019 |
|
December 31,
2018 |
||||
Assets
|
|
|
|
||||
Current assets
|
|
|
|
||||
Cash and cash equivalents
|
$
|
1,439
|
|
|
$
|
1,203
|
|
Accounts receivable, net of allowances of $63 and $67
|
1,749
|
|
|
1,769
|
|
||
Equipment installment plan receivables, net
|
2,466
|
|
|
2,538
|
|
||
Accounts receivable from affiliates
|
16
|
|
|
11
|
|
||
Inventory
|
1,261
|
|
|
1,084
|
|
||
Other current assets
|
1,814
|
|
|
1,676
|
|
||
Total current assets
|
8,745
|
|
|
8,281
|
|
||
Property and equipment, net
|
21,464
|
|
|
23,359
|
|
||
Operating lease right-of-use assets
|
9,509
|
|
|
—
|
|
||
Financing lease right-of-use assets
|
2,339
|
|
|
—
|
|
||
Goodwill
|
1,901
|
|
|
1,901
|
|
||
Spectrum licenses
|
35,618
|
|
|
35,559
|
|
||
Other intangible assets, net
|
174
|
|
|
198
|
|
||
Equipment installment plan receivables due after one year, net
|
1,662
|
|
|
1,547
|
|
||
Other assets
|
1,661
|
|
|
1,623
|
|
||
Total assets
|
$
|
83,073
|
|
|
$
|
72,468
|
|
Liabilities and Stockholders' Equity
|
|
|
|
||||
Current liabilities
|
|
|
|
||||
Accounts payable and accrued liabilities
|
$
|
7,330
|
|
|
$
|
7,741
|
|
Payables to affiliates
|
242
|
|
|
200
|
|
||
Short-term debt
|
250
|
|
|
841
|
|
||
Short-term debt to affiliates
|
598
|
|
|
—
|
|
||
Deferred revenue
|
665
|
|
|
698
|
|
||
Short-term operating lease liabilities
|
2,202
|
|
|
—
|
|
||
Short-term financing lease liabilities
|
911
|
|
|
—
|
|
||
Other current liabilities
|
1,129
|
|
|
787
|
|
||
Total current liabilities
|
13,327
|
|
|
10,267
|
|
||
Long-term debt
|
10,952
|
|
|
12,124
|
|
||
Long-term debt to affiliates
|
13,985
|
|
|
14,582
|
|
||
Tower obligations
|
2,244
|
|
|
2,557
|
|
||
Deferred tax liabilities
|
4,925
|
|
|
4,472
|
|
||
Operating lease liabilities
|
9,339
|
|
|
—
|
|
||
Financing lease liabilities
|
1,224
|
|
|
—
|
|
||
Deferred rent expense
|
—
|
|
|
2,781
|
|
||
Other long-term liabilities
|
896
|
|
|
967
|
|
||
Total long-term liabilities
|
43,565
|
|
|
37,483
|
|
||
Commitments and contingencies (Note 11)
|
|
|
|
|
|
||
Stockholders' equity
|
|
|
|
||||
Common Stock, par value $0.00001 per share, 1,000,000,000 shares authorized; 855,858,890 and 851,675,119 shares issued, 854,380,118 and 850,180,317 shares outstanding
|
—
|
|
|
—
|
|
||
Additional paid-in capital
|
38,100
|
|
|
38,010
|
|
||
Treasury stock, at cost, 1,478,772 and 1,494,802 shares issued
|
(5
|
)
|
|
(6
|
)
|
||
Accumulated other comprehensive income
|
(521
|
)
|
|
(332
|
)
|
||
Accumulated deficit
|
(11,393
|
)
|
|
(12,954
|
)
|
||
Total stockholders' equity
|
26,181
|
|
|
24,718
|
|
||
Total liabilities and stockholders' equity
|
$
|
83,073
|
|
|
$
|
72,468
|
|
|
Three Months Ended March 31,
|
||||||
(in millions, except share and per share amounts)
|
2019
|
|
2018
|
||||
Revenues
|
|
|
|
||||
Branded postpaid revenues
|
$
|
5,493
|
|
|
$
|
5,070
|
|
Branded prepaid revenues
|
2,386
|
|
|
2,402
|
|
||
Wholesale revenues
|
304
|
|
|
266
|
|
||
Roaming and other service revenues
|
94
|
|
|
68
|
|
||
Total service revenues
|
8,277
|
|
|
7,806
|
|
||
Equipment revenues
|
2,516
|
|
|
2,353
|
|
||
Other revenues
|
287
|
|
|
296
|
|
||
Total revenues
|
11,080
|
|
|
10,455
|
|
||
Operating expenses
|
|
|
|
||||
Cost of services, exclusive of depreciation and amortization shown separately below
|
1,546
|
|
|
1,589
|
|
||
Cost of equipment sales, exclusive of depreciation and amortization shown separately below
|
3,016
|
|
|
2,845
|
|
||
Selling, general and administrative
|
3,442
|
|
|
3,164
|
|
||
Depreciation and amortization
|
1,600
|
|
|
1,575
|
|
||
Total operating expense
|
9,604
|
|
|
9,173
|
|
||
Operating income
|
1,476
|
|
|
1,282
|
|
||
Other income (expense)
|
|
|
|
||||
Interest expense
|
(179
|
)
|
|
(251
|
)
|
||
Interest expense to affiliates
|
(109
|
)
|
|
(166
|
)
|
||
Interest income
|
8
|
|
|
6
|
|
||
Other income (expense), net
|
7
|
|
|
10
|
|
||
Total other expense, net
|
(273
|
)
|
|
(401
|
)
|
||
Income before income taxes
|
1,203
|
|
|
881
|
|
||
Income tax expense
|
(295
|
)
|
|
(210
|
)
|
||
Net income
|
$
|
908
|
|
|
$
|
671
|
|
|
|
|
|
||||
Net income
|
$
|
908
|
|
|
$
|
671
|
|
Other comprehensive loss, net of tax
|
|
|
|
||||
Unrealized loss on available-for-sale securities, net of tax effect of $0 and $(1)
|
—
|
|
|
(3
|
)
|
||
Unrealized loss on cash flow hedges, net of tax effect of $(66) and $0
|
(189
|
)
|
|
—
|
|
||
Other comprehensive loss
|
(189
|
)
|
|
(3
|
)
|
||
Total comprehensive income
|
$
|
719
|
|
|
$
|
668
|
|
Earnings per share
|
|
|
|
||||
Basic
|
$
|
1.07
|
|
|
$
|
0.78
|
|
Diluted
|
$
|
1.06
|
|
|
$
|
0.78
|
|
Weighted average shares outstanding
|
|
|
|
||||
Basic
|
851,223,498
|
|
|
855,222,664
|
|
||
Diluted
|
858,643,481
|
|
|
862,244,084
|
|
|
Three Months Ended March 31,
|
||||||
(in millions)
|
2019
|
|
2018
|
||||
Operating activities
|
|
|
|
||||
Net income
|
$
|
908
|
|
|
$
|
671
|
|
Adjustments to reconcile net income to net cash provided by operating activities
|
|
|
|
||||
Depreciation and amortization
|
1,600
|
|
|
1,575
|
|
||
Stock-based compensation expense
|
110
|
|
|
97
|
|
||
Deferred income tax expense
|
288
|
|
|
206
|
|
||
Bad debt expense
|
73
|
|
|
54
|
|
||
Losses from sales of receivables
|
35
|
|
|
52
|
|
||
Deferred rent expense
|
—
|
|
|
4
|
|
||
Losses on redemption of debt
|
—
|
|
|
32
|
|
||
Changes in operating assets and liabilities
|
|
|
|
||||
Accounts receivable
|
(1,143
|
)
|
|
(873
|
)
|
||
Equipment installment plan receivables
|
(250
|
)
|
|
(222
|
)
|
||
Inventories
|
(265
|
)
|
|
33
|
|
||
Operating lease right-of-use assets
|
435
|
|
|
—
|
|
||
Other current and long-term assets
|
(87
|
)
|
|
132
|
|
||
Accounts payable and accrued liabilities
|
13
|
|
|
(1,028
|
)
|
||
Short and long-term operating lease liabilities
|
(522
|
)
|
|
—
|
|
||
Other current and long-term liabilities
|
121
|
|
|
45
|
|
||
Other, net
|
76
|
|
|
(8
|
)
|
||
Net cash provided by operating activities
|
1,392
|
|
|
770
|
|
||
Investing activities
|
|
|
|
||||
Purchases of property and equipment, including capitalized interest of $118 and $43
|
(1,931
|
)
|
|
(1,366
|
)
|
||
Purchases of spectrum licenses and other intangible assets, including deposits
|
(185
|
)
|
|
(51
|
)
|
||
Proceeds related to beneficial interests in securitization transactions
|
1,157
|
|
|
1,295
|
|
||
Acquisition of companies, net of cash acquired
|
—
|
|
|
(333
|
)
|
||
Other, net
|
(7
|
)
|
|
(7
|
)
|
||
Net cash used in investing activities
|
(966
|
)
|
|
(462
|
)
|
||
Financing activities
|
|
|
|
||||
Proceeds from issuance of long-term debt
|
—
|
|
|
2,494
|
|
||
Proceeds from borrowing on revolving credit facility
|
885
|
|
|
2,170
|
|
||
Repayments of revolving credit facility
|
(885
|
)
|
|
(1,725
|
)
|
||
Repayments of financing lease obligations
|
(86
|
)
|
|
(172
|
)
|
||
Repayments of long-term debt
|
—
|
|
|
(999
|
)
|
||
Repurchases of common stock
|
—
|
|
|
(666
|
)
|
||
Tax withholdings on share-based awards
|
(100
|
)
|
|
(74
|
)
|
||
Cash payments for debt prepayment or debt extinguishment costs
|
—
|
|
|
(31
|
)
|
||
Other, net
|
(4
|
)
|
|
3
|
|
||
Net cash (used in) provided by financing activities
|
(190
|
)
|
|
1,000
|
|
||
Change in cash and cash equivalents
|
236
|
|
|
1,308
|
|
||
Cash and cash equivalents
|
|
|
|
||||
Beginning of period
|
1,203
|
|
|
1,219
|
|
||
End of period
|
$
|
1,439
|
|
|
$
|
2,527
|
|
Supplemental disclosure of cash flow information
|
|
|
|
||||
Interest payments, net of amounts capitalized
|
$
|
340
|
|
|
$
|
378
|
|
Operating lease payments
(1)
|
688
|
|
|
—
|
|
||
Income tax payments
|
32
|
|
|
1
|
|
||
Noncash investing and financing activities
|
|
|
|
||||
Noncash beneficial interest obtained in exchange for securitized receivables
|
$
|
1,512
|
|
|
$
|
1,128
|
|
Changes in accounts payable for purchases of property and equipment
|
(333
|
)
|
|
(364
|
)
|
||
Leased devices transferred from inventory to property and equipment
|
147
|
|
|
304
|
|
||
Returned leased devices transferred from property and equipment to inventory
|
(57
|
)
|
|
(82
|
)
|
||
Short-term debt assumed for financing of property and equipment
|
250
|
|
|
237
|
|
||
Operating lease right-of-use assets obtained in exchange for lease obligations
|
694
|
|
|
—
|
|
||
Financing lease right-of-use assets obtained in exchange for lease obligations
|
180
|
|
|
142
|
|
(in millions, except shares)
|
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, 2017
|
859,406,651
|
|
|
$
|
(4
|
)
|
|
$
|
38,629
|
|
|
$
|
8
|
|
|
$
|
(16,074
|
)
|
|
$
|
22,559
|
|
Net income
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
671
|
|
|
671
|
|
|||||
Other comprehensive income
|
—
|
|
|
—
|
|
|
—
|
|
|
(3
|
)
|
|
—
|
|
|
(3
|
)
|
|||||
Stock-based compensation
|
—
|
|
|
—
|
|
|
108
|
|
|
—
|
|
|
—
|
|
|
108
|
|
|||||
Exercise of stock options
|
78,435
|
|
|
—
|
|
|
2
|
|
|
—
|
|
|
—
|
|
|
2
|
|
|||||
Stock issued for employee stock purchase plan
|
1,069,512
|
|
|
—
|
|
|
55
|
|
|
—
|
|
|
—
|
|
|
55
|
|
|||||
Issuance of vested restricted stock units
|
3,947,005
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Issuance of restricted stock awards
|
354,459
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Shares withheld related to net share settlement of stock awards and stock options
|
(1,235,899
|
)
|
|
—
|
|
|
(74
|
)
|
|
—
|
|
|
—
|
|
|
(74
|
)
|
|||||
Repurchases of common stock
|
(10,498,539
|
)
|
|
—
|
|
|
(666
|
)
|
|
—
|
|
|
—
|
|
|
(666
|
)
|
|||||
Transfer RSU to NQDC plan
|
(55,395
|
)
|
|
(3
|
)
|
|
3
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Prior year retained earnings
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
224
|
|
|
224
|
|
|||||
Balance as of March 31, 2018
|
853,066,229
|
|
|
$
|
(7
|
)
|
|
$
|
38,057
|
|
|
$
|
5
|
|
|
$
|
(15,179
|
)
|
|
$
|
22,876
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
Balance as of December 31, 2018
|
850,180,317
|
|
|
$
|
(6
|
)
|
|
$
|
38,010
|
|
|
$
|
(332
|
)
|
|
$
|
(12,954
|
)
|
|
$
|
24,718
|
|
Net income
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
908
|
|
|
908
|
|
|||||
Other comprehensive income
|
—
|
|
|
—
|
|
|
—
|
|
|
(189
|
)
|
|
—
|
|
|
(189
|
)
|
|||||
Stock-based compensation
|
—
|
|
|
—
|
|
|
121
|
|
|
—
|
|
|
—
|
|
|
121
|
|
|||||
Exercise of stock options
|
31,874
|
|
|
—
|
|
|
1
|
|
|
—
|
|
|
—
|
|
|
1
|
|
|||||
Stock issued for employee stock purchase plan
|
1,172,511
|
|
|
—
|
|
|
69
|
|
|
—
|
|
|
—
|
|
|
69
|
|
|||||
Issuance of vested restricted stock units
|
4,343,972
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Shares withheld related to net share settlement of stock awards and stock options
|
(1,364,621
|
)
|
|
—
|
|
|
(100
|
)
|
|
—
|
|
|
—
|
|
|
(100
|
)
|
|||||
Repurchases of common stock
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Transfer RSU from NQDC plan
|
16,065
|
|
|
1
|
|
|
(1
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Prior year retained earnings
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
653
|
|
|
653
|
|
|||||
Balance as of March 31, 2019
|
854,380,118
|
|
|
$
|
(5
|
)
|
|
$
|
38,100
|
|
|
$
|
(521
|
)
|
|
$
|
(11,393
|
)
|
|
$
|
26,181
|
|
•
|
In evaluating contracts to determine if they qualify as a lease, we consider factors such as if we have obtained or transferred substantially all of the rights to the underlying asset through exclusivity, if we can or if we have transferred the ability to direct the use of the asset by making decisions about how and for what purpose the asset will be used and if the lessor has substantive substitution rights.
|
•
|
We recognized right-of-use assets and operating lease liabilities for operating leases that have not previously been recorded. The lease liability for operating leases is based on the net present value of future minimum lease payments.
|
•
|
Capital lease assets previously included within
Property and equipment, net
were reclassified to financing lease right-of-use assets, and capital lease liabilities previously included in
Short-term debt
and
Long-term debt
were reclassified to financing lease liabilities in our Condensed Consolidated Balance Sheet.
|
•
|
Certain line items in the
Condensed Consolidated Statements of Cash Flows
and the “Supplementary disclosure of cash flow information” have been renamed to align with the new terminology presented in the new standard; “Repayment of capital lease obligations” is now presenting as “
Repayments of financing lease obligations
” and “Assets acquired under capital lease obligations” is now presenting as “Financing lease right-of-use assets obtained in exchange for lease obligations.” In the “Operating Activities” section of the
Condensed Consolidated Statements of Cash Flows
we have added “Operating lease right-of-use assets” and “Short and long-term operating lease liabilities” which represent the change in the operating lease asset and liability, respectively. Additionally, in the “Supplemental disclosure of cash flow information” section of the
Condensed Consolidated Statements of Cash Flows
we have added “Operating lease payments,” and in the “Noncash investing and financing activities” section we have added “Operating lease right-of-use assets obtained in exchange for lease obligations.”
|
•
|
In determining the discount rate used to measure the right-of-use asset and lease liability, we use rates implicit in the lease, or if not readily available, we use our incremental borrowing rate. Our incremental borrowing rate is based on an estimated secured rate comprised of a risk-free LIBOR rate plus a credit spread as secured by our assets.
|
•
|
Certain of our lease agreements include rental payments based on changes in the consumer price index (“CPI”). Lease liabilities are not remeasured as a result of changes in the CPI; instead, changes in the CPI are treated as variable lease payments and are excluded from the measurement of the right-of-use asset and lease liability. These payments are recognized in the period in which the related obligation was incurred. Our lease agreements do not contain any material residual value guarantees or material restrictive covenants.
|
•
|
We elected the use of hindsight whereby we applied current lease term assumptions that are applied to new leases in determining the expected lease term period for all cell sites. Upon adoption of the new standard and application of hindsight, our expected lease term has shortened to reflect payments due for the initial non-cancelable lease term only. This assessment corresponds to our lease term assessment for new leases and aligns with the payments that have been disclosed as lease commitments in prior years. As a result, the average remaining lease term for cell sites has decreased from approximately
nine
to
five years
based on lease contracts in effect at transition on January 1, 2019. The aggregate impact of using the hindsight is an estimated decrease in
Total operating expense
of
$240 million
in fiscal year 2019.
|
•
|
We were also required to reassess the previously failed sale-leasebacks of certain T-Mobile-owned wireless communication tower sites and determine whether the transfer of the assets to the tower operator under the arrangement met the transfer of control criteria in the revenue standard and whether a sale should be recognized.
|
•
|
We concluded that a sale has not occurred for the
6,200
tower sites transferred to Crown Castle International Corp. (“CCI”) pursuant to a master prepaid lease arrangement; therefore, these sites will continue to be accounted for as failed sale-leasebacks.
|
•
|
We concluded that a sale should be recognized for the
900
tower sites transferred to CCI pursuant to the sale of a subsidiary and the
500
tower sites transferred to Phoenix Tower International (“PTI”). Upon adoption on January 1, 2019, we derecognized our existing long-term financial obligation and the tower-related property and equipment associated with these
1,400
previously failed sale-leaseback tower sites and recognized a lease liability and right-of-use asset for the leaseback of the tower sites. The estimated impacts from the change in accounting conclusion are primarily a decrease in
Other revenues
of
$44 million
and a decrease in
Interest expense
of
$34 million
.
|
•
|
Rental revenues and expenses associated with co-location tower sites are presented on a net basis under the new lease standard. These revenues and expenses were presented on a gross basis under the former lease standard.
|
|
January 1, 2019
|
||||||||||
(in millions)
|
Beginning Balance
|
|
Cumulative Effect Adjustment
|
|
Beginning Balance, As Adjusted
|
||||||
Assets
|
|
|
|
|
|
||||||
Other current assets
|
$
|
1,676
|
|
|
$
|
(78
|
)
|
|
$
|
1,598
|
|
Property and equipment, net
|
23,359
|
|
|
(2,339
|
)
|
|
21,020
|
|
|||
Operating lease right-of-use assets
|
—
|
|
|
9,251
|
|
|
9,251
|
|
|||
Financing lease right-of-use assets
|
—
|
|
|
2,271
|
|
|
2,271
|
|
|||
Other intangible assets, net
|
198
|
|
|
(12
|
)
|
|
186
|
|
|||
Other assets
|
1,623
|
|
|
(71
|
)
|
|
1,552
|
|
|||
Liabilities and Stockholders’ Equity
|
|
|
|
|
|
||||||
Accounts payable and accrued liabilities
|
7,741
|
|
|
(65
|
)
|
|
7,676
|
|
|||
Other current liabilities
|
787
|
|
|
28
|
|
|
815
|
|
|||
Short-term and long-term debt
|
12,965
|
|
|
(2,015
|
)
|
|
10,950
|
|
|||
Tower obligations
|
2,557
|
|
|
(345
|
)
|
|
2,212
|
|
|||
Deferred tax liabilities
|
4,472
|
|
|
231
|
|
|
4,703
|
|
|||
Deferred rent expense
|
2,781
|
|
|
(2,781
|
)
|
|
—
|
|
|||
Short-term and long-term operating lease liabilities
|
—
|
|
|
11,364
|
|
|
11,364
|
|
|||
Short-term and long-term financing lease liabilities
|
—
|
|
|
2,016
|
|
|
2,016
|
|
|||
Other long-term liabilities
|
967
|
|
|
(64
|
)
|
|
903
|
|
|||
Accumulated deficit
|
$
|
(12,954
|
)
|
|
$
|
653
|
|
|
$
|
(12,301
|
)
|
•
|
The aggregate impact is a decrease in
Other revenues
of
$185 million
, a decrease in
Total operating expense
s of
$380 million
, a decrease in
Interest expense
of
$34 million
and an increase to
Net income
of
$175 million
.
|
•
|
The expected impact on our
Condensed Consolidated Statements of Cash Flows
is a decrease in
Net cash provided by operating activities
of
$10 million
and a decrease in Net cash used in financing activities of
$10 million
.
|
(in millions)
|
March 31,
2019 |
|
December 31,
2018 |
||||
EIP receivables, gross
|
$
|
4,573
|
|
|
$
|
4,534
|
|
Unamortized imputed discount
|
(341
|
)
|
|
(330
|
)
|
||
EIP receivables, net of unamortized imputed discount
|
4,232
|
|
|
4,204
|
|
||
Allowance for credit losses
|
(104
|
)
|
|
(119
|
)
|
||
EIP receivables, net
|
$
|
4,128
|
|
|
$
|
4,085
|
|
Classified on the balance sheet as:
|
|
|
|
||||
Equipment installment plan receivables, net
|
$
|
2,466
|
|
|
$
|
2,538
|
|
Equipment installment plan receivables due after one year, net
|
1,662
|
|
|
1,547
|
|
||
EIP receivables, net
|
$
|
4,128
|
|
|
$
|
4,085
|
|
|
March 31, 2019
|
|
March 31, 2018
|
||||||||||||||||||||
(in millions)
|
Accounts Receivable Allowance
|
|
EIP Receivables Allowance
|
|
Total
|
|
Accounts Receivable Allowance
|
|
EIP Receivables Allowance
|
|
Total
|
||||||||||||
Allowance for credit losses and imputed discount, beginning of period
|
$
|
67
|
|
|
$
|
449
|
|
|
$
|
516
|
|
|
$
|
86
|
|
|
$
|
396
|
|
|
$
|
482
|
|
Bad debt expense
|
15
|
|
|
59
|
|
|
74
|
|
|
4
|
|
|
50
|
|
|
54
|
|
||||||
Write-offs, net of recoveries
|
(19
|
)
|
|
(74
|
)
|
|
(93
|
)
|
|
(14
|
)
|
|
(67
|
)
|
|
(81
|
)
|
||||||
Change in imputed discount on short-term and long-term EIP receivables
|
N/A
|
|
|
53
|
|
|
53
|
|
|
N/A
|
|
|
53
|
|
|
53
|
|
||||||
Impact on the imputed discount from sales of EIP receivables
|
N/A
|
|
|
(42
|
)
|
|
(42
|
)
|
|
N/A
|
|
|
(51
|
)
|
|
(51
|
)
|
||||||
Allowance for credit losses and imputed discount, end of period
|
$
|
63
|
|
|
$
|
445
|
|
|
$
|
508
|
|
|
$
|
76
|
|
|
$
|
381
|
|
|
$
|
457
|
|
|
March 31, 2019
|
|
December 31, 2018
|
||||||||||||||||||||
(in millions)
|
Prime
|
|
Subprime
|
|
Total EIP Receivables, gross
|
|
Prime
|
|
Subprime
|
|
Total EIP Receivables, gross
|
||||||||||||
Current - 30 days past due
|
$
|
2,091
|
|
|
$
|
2,395
|
|
|
$
|
4,486
|
|
|
$
|
1,987
|
|
|
$
|
2,446
|
|
|
$
|
4,433
|
|
31 - 60 days past due
|
14
|
|
|
25
|
|
|
39
|
|
|
15
|
|
|
32
|
|
|
47
|
|
||||||
61 - 90 days past due
|
6
|
|
|
15
|
|
|
21
|
|
|
6
|
|
|
19
|
|
|
25
|
|
||||||
More than 90 days past due
|
7
|
|
|
20
|
|
|
27
|
|
|
7
|
|
|
22
|
|
|
29
|
|
||||||
Total receivables, gross
|
$
|
2,118
|
|
|
$
|
2,455
|
|
|
$
|
4,573
|
|
|
$
|
2,015
|
|
|
$
|
2,519
|
|
|
$
|
4,534
|
|
(in millions)
|
March 31,
2019 |
|
December 31,
2018 |
||||
Other current assets
|
$
|
342
|
|
|
$
|
339
|
|
Accounts payable and accrued liabilities
|
—
|
|
|
59
|
|
||
Other current liabilities
|
230
|
|
|
149
|
|
(in millions)
|
March 31,
2019 |
|
December 31,
2018 |
||||
Other current assets
|
$
|
327
|
|
|
$
|
321
|
|
Other assets
|
71
|
|
|
88
|
|
||
Other long-term liabilities
|
20
|
|
|
22
|
|
(in millions)
|
March 31,
2019 |
|
December 31,
2018 |
||||
Derecognized net service receivables and EIP receivables
|
$
|
2,546
|
|
|
$
|
2,577
|
|
Other current assets
|
669
|
|
|
660
|
|
||
of which, deferred purchase price
|
667
|
|
|
658
|
|
||
Other long-term assets
|
71
|
|
|
88
|
|
||
of which, deferred purchase price
|
71
|
|
|
88
|
|
||
Accounts payable and accrued liabilities
|
—
|
|
|
59
|
|
||
Other current liabilities
|
230
|
|
|
149
|
|
||
Other long-term liabilities
|
20
|
|
|
22
|
|
||
Net cash proceeds since inception
|
1,861
|
|
|
1,879
|
|
||
Of which:
|
|
|
|
||||
Change in net cash proceeds during the year-to-date period
|
(18
|
)
|
|
(179
|
)
|
||
Net cash proceeds funded by reinvested collections
|
1,879
|
|
|
2,058
|
|
|
Level within the Fair Value Hierarchy
|
|
March 31, 2019
|
|
December 31, 2018
|
||||||||||||
(in millions)
|
|
Carrying Amount
|
|
Fair Value
|
|
Carrying Amount
|
|
Fair Value
|
|||||||||
Assets:
|
|
|
|
|
|
|
|
|
|
||||||||
Deferred purchase price assets
|
3
|
|
$
|
738
|
|
|
$
|
738
|
|
|
$
|
746
|
|
|
$
|
746
|
|
|
Level within the Fair Value Hierarchy
|
|
March 31, 2019
|
|
December 31, 2018
|
||||||||||||
(in millions)
|
|
Carrying Amount
|
|
Fair Value
|
|
Carrying Amount
|
|
Fair Value
|
|||||||||
Liabilities:
|
|
|
|
|
|
|
|
|
|
||||||||
Senior Notes to third parties
|
1
|
|
$
|
10,952
|
|
|
$
|
11,354
|
|
|
$
|
10,950
|
|
|
$
|
10,945
|
|
Senior Notes to affiliates
|
2
|
|
9,985
|
|
|
10,201
|
|
|
9,984
|
|
|
9,802
|
|
||||
Incremental Term Loan Facility to affiliates
|
2
|
|
4,000
|
|
|
4,000
|
|
|
4,000
|
|
|
3,976
|
|
||||
Senior Reset Notes to affiliates
|
2
|
|
598
|
|
|
632
|
|
|
598
|
|
|
640
|
|
(in millions)
|
March 31,
2019 |
|
December 31,
2018 |
||||
Property and equipment, net
|
$
|
237
|
|
|
$
|
329
|
|
Tower obligations
|
2,244
|
|
|
2,557
|
|
•
|
Branded postpaid customers generally include customers who are qualified to pay after receiving wireless communication services utilizing phones, DIGITS, or connected devices which includes tablets, wearables and SyncUP DRIVE™ ;
|
•
|
Branded prepaid customers generally include customers who pay for wireless communication services in advance. Our branded prepaid customers include customers of T-Mobile and Metro by T-Mobile; and
|
•
|
Wholesale customers include Machine-to-Machine (“M2M”) and Mobile Virtual Network Operator (“MVNO”) customers that operate on our network but are managed by wholesale partners.
|
|
Three Months Ended March 31,
|
||||||
(in millions)
|
2019
|
|
2018
|
||||
Branded postpaid service revenues
|
|
|
|
||||
Branded postpaid phone revenues
|
$
|
5,183
|
|
|
$
|
4,811
|
|
Branded postpaid other revenues
|
310
|
|
|
259
|
|
||
Total branded postpaid service revenues
|
$
|
5,493
|
|
|
$
|
5,070
|
|
|
Three Months Ended March 31,
|
||||||
(in millions)
|
2019
|
|
2018
|
||||
Equipment revenues from the lease of mobile communication devices
|
$
|
161
|
|
|
$
|
171
|
|
(in millions)
|
Contract Assets Included in Other Current Assets
|
|
Contract Liabilities Included in Deferred Revenue
|
||||
Balance as of December 31, 2018
|
$
|
51
|
|
|
$
|
645
|
|
Balance as of March 31, 2019
|
44
|
|
|
615
|
|
||
Change
|
$
|
(7
|
)
|
|
$
|
(30
|
)
|
|
Three Months Ended March 31,
|
||||||
(in millions)
|
2019
|
|
2018
|
||||
Amounts included in the beginning of period contract liability balance
|
$
|
560
|
|
|
$
|
528
|
|
|
Three Months Ended March 31,
|
||||||
(in millions, except shares and per share amounts)
|
2019
|
|
2018
|
||||
Net income
|
$
|
908
|
|
|
$
|
671
|
|
|
|
|
|
||||
Weighted average shares outstanding - basic
|
851,223,498
|
|
|
855,222,664
|
|
||
Effect of dilutive securities:
|
|
|
|
||||
Outstanding stock options and unvested stock awards
|
7,419,983
|
|
|
7,021,420
|
|
||
Weighted average shares outstanding - diluted
|
858,643,481
|
|
|
862,244,084
|
|
||
|
|
|
|
||||
Earnings per share - basic
|
$
|
1.07
|
|
|
$
|
0.78
|
|
Earnings per share - diluted
|
$
|
1.06
|
|
|
$
|
0.78
|
|
|
|
|
|
||||
Potentially dilutive securities:
|
|
|
|
||||
Outstanding stock options and unvested stock awards
|
266,452
|
|
|
67,580
|
|
(in millions)
|
Three Months Ended March 31, 2019
|
||
Operating lease expense
|
$
|
602
|
|
Financing lease expense:
|
|
||
Amortization of right-of-use assets
|
113
|
|
|
Interest on lease liabilities
|
20
|
|
|
Total financing lease expense
|
133
|
|
|
Variable lease expense
|
65
|
|
|
Total lease expense
|
$
|
800
|
|
|
Three Months Ended March 31, 2019
|
|
Weighted Average Remaining Lease Term (Years)
|
|
|
Operating leases
|
6
|
|
Financing leases
|
3
|
|
Weighted Average Discount Rate
|
|
|
Operating leases
|
5.4
|
%
|
Financing leases
|
4.5
|
%
|
(in millions)
|
March 31,
2019 |
|
December 31,
2018 |
||||
Leased wireless devices, gross
|
$
|
1,080
|
|
|
$
|
1,159
|
|
Accumulated depreciation
|
(638
|
)
|
|
(622
|
)
|
||
Leased wireless devices, net
|
$
|
442
|
|
|
$
|
537
|
|
(in millions)
|
Total
|
||
Twelve Months Ending March 31,
|
|
||
2020
|
$
|
352
|
|
2021
|
46
|
|
|
Total
|
$
|
398
|
|
(in millions)
|
Total
|
||
Year Ended December 31,
|
|
||
2019
|
$
|
419
|
|
2020
|
59
|
|
|
Total
|
$
|
478
|
|
(in millions)
|
Future Minimum Payments
|
||
Year Ended December 31,
|
|
||
2019
|
$
|
909
|
|
2020
|
631
|
|
|
2021
|
389
|
|
|
2022
|
102
|
|
|
2023
|
66
|
|
|
Thereafter
|
106
|
|
|
Total
|
$
|
2,203
|
|
Included in Total
|
|
||
Interest
|
$
|
143
|
|
Maintenance
|
45
|
|
(in millions)
|
Parent
|
|
Issuer
|
|
Guarantor Subsidiaries
|
|
Non-Guarantor Subsidiaries
|
|
Consolidating and Eliminating Adjustments
|
|
Consolidated
|
||||||||||||
Assets
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Current assets
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Cash and cash equivalents
|
$
|
3
|
|
|
$
|
2
|
|
|
$
|
1,314
|
|
|
$
|
120
|
|
|
$
|
—
|
|
|
$
|
1,439
|
|
Accounts receivable, net
|
—
|
|
|
—
|
|
|
1,465
|
|
|
284
|
|
|
—
|
|
|
1,749
|
|
||||||
Equipment installment plan receivables, net
|
—
|
|
|
—
|
|
|
2,466
|
|
|
—
|
|
|
—
|
|
|
2,466
|
|
||||||
Accounts receivable from affiliates
|
—
|
|
|
5
|
|
|
16
|
|
|
—
|
|
|
(5
|
)
|
|
16
|
|
||||||
Inventory
|
—
|
|
|
—
|
|
|
1,260
|
|
|
1
|
|
|
—
|
|
|
1,261
|
|
||||||
Other current assets
|
—
|
|
|
—
|
|
|
1,155
|
|
|
659
|
|
|
—
|
|
|
1,814
|
|
||||||
Total current assets
|
3
|
|
|
7
|
|
|
7,676
|
|
|
1,064
|
|
|
(5
|
)
|
|
8,745
|
|
||||||
Property and equipment, net
(1)
|
—
|
|
|
—
|
|
|
21,155
|
|
|
309
|
|
|
—
|
|
|
21,464
|
|
||||||
Operating lease right-of-use assets
|
—
|
|
|
—
|
|
|
9,505
|
|
|
4
|
|
|
—
|
|
|
9,509
|
|
||||||
Financing lease right-of-use assets
|
—
|
|
|
—
|
|
|
2,338
|
|
|
1
|
|
|
—
|
|
|
2,339
|
|
||||||
Goodwill
|
—
|
|
|
—
|
|
|
1,683
|
|
|
218
|
|
|
—
|
|
|
1,901
|
|
||||||
Spectrum licenses
|
—
|
|
|
—
|
|
|
35,618
|
|
|
—
|
|
|
—
|
|
|
35,618
|
|
||||||
Other intangible assets, net
|
—
|
|
|
—
|
|
|
97
|
|
|
77
|
|
|
—
|
|
|
174
|
|
||||||
Investments in subsidiaries, net
|
26,686
|
|
|
48,221
|
|
|
—
|
|
|
—
|
|
|
(74,907
|
)
|
|
—
|
|
||||||
Intercompany receivables and note receivables
|
—
|
|
|
5,275
|
|
|
—
|
|
|
—
|
|
|
(5,275
|
)
|
|
—
|
|
||||||
Equipment installment plan receivables due after one year, net
|
—
|
|
|
—
|
|
|
1,662
|
|
|
—
|
|
|
—
|
|
|
1,662
|
|
||||||
Other assets
|
—
|
|
|
7
|
|
|
1,596
|
|
|
211
|
|
|
(153
|
)
|
|
1,661
|
|
||||||
Total assets
|
$
|
26,689
|
|
|
$
|
53,510
|
|
|
$
|
81,330
|
|
|
$
|
1,884
|
|
|
$
|
(80,340
|
)
|
|
$
|
83,073
|
|
Liabilities and Stockholders' Equity
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Current liabilities
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Accounts payable and accrued liabilities
|
$
|
—
|
|
|
$
|
136
|
|
|
$
|
6,883
|
|
|
$
|
311
|
|
|
$
|
—
|
|
|
$
|
7,330
|
|
Payables to affiliates
|
—
|
|
|
189
|
|
|
58
|
|
|
—
|
|
|
(5
|
)
|
|
242
|
|
||||||
Short-term debt
|
—
|
|
|
250
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
250
|
|
||||||
Short-term debt to affiliates
|
—
|
|
|
598
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
598
|
|
||||||
Deferred revenue
|
—
|
|
|
—
|
|
|
665
|
|
|
—
|
|
|
—
|
|
|
665
|
|
||||||
Short-term operating lease liabilities
|
—
|
|
|
—
|
|
|
2,199
|
|
|
3
|
|
|
—
|
|
|
2,202
|
|
||||||
Short-term financing lease liabilities
|
—
|
|
|
—
|
|
|
911
|
|
|
—
|
|
|
—
|
|
|
911
|
|
||||||
Other current liabilities
|
—
|
|
|
714
|
|
|
157
|
|
|
258
|
|
|
—
|
|
|
1,129
|
|
||||||
Total current liabilities
|
—
|
|
|
1,887
|
|
|
10,873
|
|
|
572
|
|
|
(5
|
)
|
|
13,327
|
|
||||||
Long-term debt
|
—
|
|
|
10,952
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
10,952
|
|
||||||
Long-term debt to affiliates
|
—
|
|
|
13,985
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
13,985
|
|
||||||
Tower obligations
(1)
|
—
|
|
|
—
|
|
|
76
|
|
|
2,168
|
|
|
—
|
|
|
2,244
|
|
||||||
Deferred tax liabilities
|
—
|
|
|
—
|
|
|
5,078
|
|
|
—
|
|
|
(153
|
)
|
|
4,925
|
|
||||||
Operating lease liabilities
|
—
|
|
|
—
|
|
|
9,337
|
|
|
2
|
|
|
—
|
|
|
9,339
|
|
||||||
Financing lease liabilities
|
—
|
|
|
—
|
|
|
1,224
|
|
|
—
|
|
|
—
|
|
|
1,224
|
|
||||||
Negative carrying value of subsidiaries, net
|
—
|
|
|
—
|
|
|
761
|
|
|
—
|
|
|
(761
|
)
|
|
—
|
|
||||||
Intercompany payables and debt
|
508
|
|
|
—
|
|
|
4,412
|
|
|
355
|
|
|
(5,275
|
)
|
|
—
|
|
||||||
Other long-term liabilities
|
—
|
|
|
—
|
|
|
876
|
|
|
20
|
|
|
—
|
|
|
896
|
|
||||||
Total long-term liabilities
|
508
|
|
|
24,937
|
|
|
21,764
|
|
|
2,545
|
|
|
(6,189
|
)
|
|
43,565
|
|
||||||
Total stockholders' equity (deficit)
|
26,181
|
|
|
26,686
|
|
|
48,693
|
|
|
(1,233
|
)
|
|
(74,146
|
)
|
|
26,181
|
|
||||||
Total liabilities and stockholders' equity
|
$
|
26,689
|
|
|
$
|
53,510
|
|
|
$
|
81,330
|
|
|
$
|
1,884
|
|
|
$
|
(80,340
|
)
|
|
$
|
83,073
|
|
(1)
|
Assets and liabilities for Non-Guarantor Subsidiaries are primarily included in VIEs related to the 2012 Tower Transaction. See
Note 7 – 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
|
$
|
2
|
|
|
$
|
1
|
|
|
$
|
1,079
|
|
|
$
|
121
|
|
|
$
|
—
|
|
|
$
|
1,203
|
|
Accounts receivable, net
|
—
|
|
|
—
|
|
|
1,510
|
|
|
259
|
|
|
—
|
|
|
1,769
|
|
||||||
Equipment installment plan receivables, net
|
—
|
|
|
—
|
|
|
2,538
|
|
|
—
|
|
|
—
|
|
|
2,538
|
|
||||||
Accounts receivable from affiliates
|
—
|
|
|
—
|
|
|
11
|
|
|
—
|
|
|
—
|
|
|
11
|
|
||||||
Inventory
|
—
|
|
|
—
|
|
|
1,084
|
|
|
—
|
|
|
—
|
|
|
1,084
|
|
||||||
Other current assets
|
—
|
|
|
—
|
|
|
1,031
|
|
|
645
|
|
|
—
|
|
|
1,676
|
|
||||||
Total current assets
|
2
|
|
|
1
|
|
|
7,253
|
|
|
1,025
|
|
|
—
|
|
|
8,281
|
|
||||||
Property and equipment, net
(1)
|
—
|
|
|
—
|
|
|
23,062
|
|
|
297
|
|
|
—
|
|
|
23,359
|
|
||||||
Goodwill
|
—
|
|
|
—
|
|
|
1,683
|
|
|
218
|
|
|
—
|
|
|
1,901
|
|
||||||
Spectrum licenses
|
—
|
|
|
—
|
|
|
35,559
|
|
|
—
|
|
|
—
|
|
|
35,559
|
|
||||||
Other intangible assets, net
|
—
|
|
|
—
|
|
|
116
|
|
|
82
|
|
|
—
|
|
|
198
|
|
||||||
Investments in subsidiaries, net
|
25,314
|
|
|
46,516
|
|
|
—
|
|
|
—
|
|
|
(71,830
|
)
|
|
—
|
|
||||||
Intercompany receivables and note receivables
|
—
|
|
|
5,174
|
|
|
—
|
|
|
—
|
|
|
(5,174
|
)
|
|
—
|
|
||||||
Equipment installment plan receivables due after one year, net
|
—
|
|
|
—
|
|
|
1,547
|
|
|
—
|
|
|
—
|
|
|
1,547
|
|
||||||
Other assets
|
—
|
|
|
7
|
|
|
1,540
|
|
|
221
|
|
|
(145
|
)
|
|
1,623
|
|
||||||
Total assets
|
$
|
25,316
|
|
|
$
|
51,698
|
|
|
$
|
70,760
|
|
|
$
|
1,843
|
|
|
$
|
(77,149
|
)
|
|
$
|
72,468
|
|
Liabilities and Stockholders' Equity
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Current liabilities
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Accounts payable and accrued liabilities
|
$
|
—
|
|
|
$
|
228
|
|
|
$
|
7,240
|
|
|
$
|
273
|
|
|
$
|
—
|
|
|
$
|
7,741
|
|
Payables to affiliates
|
—
|
|
|
157
|
|
|
43
|
|
|
—
|
|
|
—
|
|
|
200
|
|
||||||
Short-term debt
|
—
|
|
|
—
|
|
|
841
|
|
|
—
|
|
|
—
|
|
|
841
|
|
||||||
Deferred revenue
|
—
|
|
|
—
|
|
|
698
|
|
|
—
|
|
|
—
|
|
|
698
|
|
||||||
Other current liabilities
|
—
|
|
|
447
|
|
|
164
|
|
|
176
|
|
|
—
|
|
|
787
|
|
||||||
Total current liabilities
|
—
|
|
|
832
|
|
|
8,986
|
|
|
449
|
|
|
—
|
|
|
10,267
|
|
||||||
Long-term debt
|
—
|
|
|
10,950
|
|
|
1,174
|
|
|
—
|
|
|
—
|
|
|
12,124
|
|
||||||
Long-term debt to affiliates
|
—
|
|
|
14,582
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
14,582
|
|
||||||
Tower obligations
(1)
|
—
|
|
|
—
|
|
|
384
|
|
|
2,173
|
|
|
—
|
|
|
2,557
|
|
||||||
Deferred tax liabilities
|
—
|
|
|
—
|
|
|
4,617
|
|
|
—
|
|
|
(145
|
)
|
|
4,472
|
|
||||||
Deferred rent expense
|
—
|
|
|
—
|
|
|
2,781
|
|
|
—
|
|
|
—
|
|
|
2,781
|
|
||||||
Negative carrying value of subsidiaries, net
|
—
|
|
|
—
|
|
|
676
|
|
|
—
|
|
|
(676
|
)
|
|
—
|
|
||||||
Intercompany payables and debt
|
598
|
|
|
—
|
|
|
4,234
|
|
|
342
|
|
|
(5,174
|
)
|
|
—
|
|
||||||
Other long-term liabilities
|
—
|
|
|
20
|
|
|
926
|
|
|
21
|
|
|
—
|
|
|
967
|
|
||||||
Total long-term liabilities
|
598
|
|
|
25,552
|
|
|
14,792
|
|
|
2,536
|
|
|
(5,995
|
)
|
|
37,483
|
|
||||||
Total stockholders' equity (deficit)
|
24,718
|
|
|
25,314
|
|
|
46,982
|
|
|
(1,142
|
)
|
|
(71,154
|
)
|
|
24,718
|
|
||||||
Total liabilities and stockholders' equity
|
$
|
25,316
|
|
|
$
|
51,698
|
|
|
$
|
70,760
|
|
|
$
|
1,843
|
|
|
$
|
(77,149
|
)
|
|
$
|
72,468
|
|
(1)
|
Assets and liabilities for Non-Guarantor Subsidiaries are primarily included in VIEs related to the 2012 Tower Transaction. See
Note 7 – Tower Obligations
for further information.
|
(in millions)
|
Parent
|
|
Issuer
|
|
Guarantor Subsidiaries
|
|
Non-Guarantor Subsidiaries
|
|
Consolidating and Eliminating Adjustments
|
|
Consolidated
|
||||||||||||
Revenues
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Service revenues
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
7,859
|
|
|
$
|
732
|
|
|
$
|
(314
|
)
|
|
$
|
8,277
|
|
Equipment revenues
|
—
|
|
|
—
|
|
|
2,570
|
|
|
—
|
|
|
(54
|
)
|
|
2,516
|
|
||||||
Other revenues
|
—
|
|
|
6
|
|
|
273
|
|
|
50
|
|
|
(42
|
)
|
|
287
|
|
||||||
Total revenues
|
—
|
|
|
6
|
|
|
10,702
|
|
|
782
|
|
|
(410
|
)
|
|
11,080
|
|
||||||
Operating expenses
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Cost of services, exclusive of depreciation and amortization shown separately below
|
—
|
|
|
—
|
|
|
1,568
|
|
|
6
|
|
|
(28
|
)
|
|
1,546
|
|
||||||
Cost of equipment sales, exclusive of depreciation and amortization shown separately below
|
—
|
|
|
—
|
|
|
2,798
|
|
|
272
|
|
|
(54
|
)
|
|
3,016
|
|
||||||
Selling, general and administrative
|
—
|
|
|
1
|
|
|
3,494
|
|
|
275
|
|
|
(328
|
)
|
|
3,442
|
|
||||||
Depreciation and amortization
|
—
|
|
|
—
|
|
|
1,578
|
|
|
22
|
|
|
—
|
|
|
1,600
|
|
||||||
Total operating expense
|
—
|
|
|
1
|
|
|
9,438
|
|
|
575
|
|
|
(410
|
)
|
|
9,604
|
|
||||||
Operating income
|
—
|
|
|
5
|
|
|
1,264
|
|
|
207
|
|
|
—
|
|
|
1,476
|
|
||||||
Other income (expense)
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Interest expense
|
—
|
|
|
(112
|
)
|
|
(20
|
)
|
|
(47
|
)
|
|
—
|
|
|
(179
|
)
|
||||||
Interest expense to affiliates
|
—
|
|
|
(109
|
)
|
|
(5
|
)
|
|
—
|
|
|
5
|
|
|
(109
|
)
|
||||||
Interest income
|
—
|
|
|
5
|
|
|
7
|
|
|
1
|
|
|
(5
|
)
|
|
8
|
|
||||||
Other income (expense), net
|
—
|
|
|
8
|
|
|
(1
|
)
|
|
—
|
|
|
—
|
|
|
7
|
|
||||||
Total other expense, net
|
—
|
|
|
(208
|
)
|
|
(19
|
)
|
|
(46
|
)
|
|
—
|
|
|
(273
|
)
|
||||||
Income (loss) before income taxes
|
—
|
|
|
(203
|
)
|
|
1,245
|
|
|
161
|
|
|
—
|
|
|
1,203
|
|
||||||
Income tax expense
|
—
|
|
|
—
|
|
|
(261
|
)
|
|
(34
|
)
|
|
—
|
|
|
(295
|
)
|
||||||
Earnings of subsidiaries
|
908
|
|
|
1,111
|
|
|
7
|
|
|
—
|
|
|
(2,026
|
)
|
|
—
|
|
||||||
Net income
|
$
|
908
|
|
|
$
|
908
|
|
|
$
|
991
|
|
|
$
|
127
|
|
|
$
|
(2,026
|
)
|
|
$
|
908
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Net income
|
$
|
908
|
|
|
$
|
908
|
|
|
$
|
991
|
|
|
$
|
127
|
|
|
$
|
(2,026
|
)
|
|
$
|
908
|
|
Other comprehensive (loss) income, net of tax
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Other comprehensive (loss) income, net of tax
|
(189
|
)
|
|
(189
|
)
|
|
65
|
|
|
—
|
|
|
124
|
|
|
(189
|
)
|
||||||
Total comprehensive income
|
$
|
719
|
|
|
$
|
719
|
|
|
$
|
1,056
|
|
|
$
|
127
|
|
|
$
|
(1,902
|
)
|
|
$
|
719
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(in millions)
|
Parent
|
|
Issuer
|
|
Guarantor Subsidiaries
|
|
Non-Guarantor Subsidiaries
|
|
Consolidating and Eliminating Adjustments
|
|
Consolidated
|
||||||||||||
Revenues
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Service revenues
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
7,487
|
|
|
$
|
540
|
|
|
$
|
(221
|
)
|
|
$
|
7,806
|
|
Equipment revenues
|
—
|
|
|
—
|
|
|
2,407
|
|
|
—
|
|
|
(54
|
)
|
|
2,353
|
|
||||||
Other revenues
|
—
|
|
|
1
|
|
|
249
|
|
|
55
|
|
|
(9
|
)
|
|
296
|
|
||||||
Total revenues
|
—
|
|
|
1
|
|
|
10,143
|
|
|
595
|
|
|
(284
|
)
|
|
10,455
|
|
||||||
Operating expenses
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Cost of services, exclusive of depreciation and amortization shown separately below
|
—
|
|
|
—
|
|
|
1,580
|
|
|
9
|
|
|
—
|
|
|
1,589
|
|
||||||
Cost of equipment sales, exclusive of depreciation and amortization shown separately below
|
—
|
|
|
—
|
|
|
2,664
|
|
|
236
|
|
|
(55
|
)
|
|
2,845
|
|
||||||
Selling, general and administrative
|
—
|
|
|
—
|
|
|
3,157
|
|
|
236
|
|
|
(229
|
)
|
|
3,164
|
|
||||||
Depreciation and amortization
|
—
|
|
|
—
|
|
|
1,554
|
|
|
21
|
|
|
—
|
|
|
1,575
|
|
||||||
Total operating expenses
|
—
|
|
|
—
|
|
|
8,955
|
|
|
502
|
|
|
(284
|
)
|
|
9,173
|
|
||||||
Operating income
|
—
|
|
|
1
|
|
|
1,188
|
|
|
93
|
|
|
—
|
|
|
1,282
|
|
||||||
Other income (expense)
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Interest expense
|
—
|
|
|
(174
|
)
|
|
(29
|
)
|
|
(48
|
)
|
|
—
|
|
|
(251
|
)
|
||||||
Interest expense to affiliates
|
—
|
|
|
(166
|
)
|
|
(5
|
)
|
|
—
|
|
|
5
|
|
|
(166
|
)
|
||||||
Interest income
|
—
|
|
|
6
|
|
|
5
|
|
|
—
|
|
|
(5
|
)
|
|
6
|
|
||||||
Other (expense) income, net
|
—
|
|
|
(32
|
)
|
|
42
|
|
|
—
|
|
|
—
|
|
|
10
|
|
||||||
Total other (expense) income, net
|
—
|
|
|
(366
|
)
|
|
13
|
|
|
(48
|
)
|
|
—
|
|
|
(401
|
)
|
||||||
Income (loss) before income taxes
|
—
|
|
|
(365
|
)
|
|
1,201
|
|
|
45
|
|
|
—
|
|
|
881
|
|
||||||
Income tax expense
|
—
|
|
|
—
|
|
|
(199
|
)
|
|
(11
|
)
|
|
—
|
|
|
(210
|
)
|
||||||
Earnings (loss) of subsidiaries
|
671
|
|
|
1,036
|
|
|
(6
|
)
|
|
—
|
|
|
(1,701
|
)
|
|
—
|
|
||||||
Net income
|
$
|
671
|
|
|
$
|
671
|
|
|
$
|
996
|
|
|
$
|
34
|
|
|
$
|
(1,701
|
)
|
|
$
|
671
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Net income
|
$
|
671
|
|
|
$
|
671
|
|
|
$
|
996
|
|
|
$
|
34
|
|
|
$
|
(1,701
|
)
|
|
$
|
671
|
|
Other comprehensive loss, net of tax
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Other comprehensive loss, net of tax
|
(3
|
)
|
|
(3
|
)
|
|
(3
|
)
|
|
—
|
|
|
6
|
|
|
(3
|
)
|
||||||
Total comprehensive income
|
$
|
668
|
|
|
$
|
668
|
|
|
$
|
993
|
|
|
$
|
34
|
|
|
$
|
(1,695
|
)
|
|
$
|
668
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(in millions)
|
Parent
|
|
Issuer
|
|
Guarantor Subsidiaries
|
|
Non-Guarantor Subsidiaries
|
|
Consolidating and Eliminating Adjustments
|
|
Consolidated
|
||||||||||||
Operating activities
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Net cash (used in) provided by operating activities
|
$
|
—
|
|
|
$
|
(248
|
)
|
|
$
|
2,797
|
|
|
$
|
(1,017
|
)
|
|
$
|
(140
|
)
|
|
$
|
1,392
|
|
Investing activities
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Purchases of property and equipment
|
—
|
|
|
—
|
|
|
(1,926
|
)
|
|
(5
|
)
|
|
—
|
|
|
(1,931
|
)
|
||||||
Purchases of spectrum licenses and other intangible assets, including deposits
|
—
|
|
|
—
|
|
|
(185
|
)
|
|
—
|
|
|
—
|
|
|
(185
|
)
|
||||||
Proceeds related to beneficial interests in securitization transactions
|
—
|
|
|
—
|
|
|
9
|
|
|
1,148
|
|
|
—
|
|
|
1,157
|
|
||||||
Other, net
|
—
|
|
|
—
|
|
|
(7
|
)
|
|
—
|
|
|
—
|
|
|
(7
|
)
|
||||||
Net cash (used in) provided by investing activities
|
—
|
|
|
—
|
|
|
(2,109
|
)
|
|
1,143
|
|
|
—
|
|
|
(966
|
)
|
||||||
Financing activities
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Proceeds from borrowing on revolving credit facility, net
|
—
|
|
|
885
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
885
|
|
||||||
Repayments of revolving credit facility
|
—
|
|
|
—
|
|
|
(885
|
)
|
|
—
|
|
|
—
|
|
|
(885
|
)
|
||||||
Repayments of financing lease obligations
|
—
|
|
|
—
|
|
|
(85
|
)
|
|
(1
|
)
|
|
—
|
|
|
(86
|
)
|
||||||
Intercompany advances, net
|
—
|
|
|
(636
|
)
|
|
622
|
|
|
14
|
|
|
—
|
|
|
—
|
|
||||||
Tax withholdings on share-based awards
|
—
|
|
|
—
|
|
|
(100
|
)
|
|
—
|
|
|
—
|
|
|
(100
|
)
|
||||||
Intercompany dividend paid
|
—
|
|
|
—
|
|
|
—
|
|
|
(140
|
)
|
|
140
|
|
|
—
|
|
||||||
Other, net
|
1
|
|
|
—
|
|
|
(5
|
)
|
|
—
|
|
|
—
|
|
|
(4
|
)
|
||||||
Net cash provided (used in) by financing activities
|
1
|
|
|
249
|
|
|
(453
|
)
|
|
(127
|
)
|
|
140
|
|
|
(190
|
)
|
||||||
Change in cash and cash equivalents
|
1
|
|
|
1
|
|
|
235
|
|
|
(1
|
)
|
|
—
|
|
|
236
|
|
||||||
Cash and cash equivalents
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Beginning of period
|
2
|
|
|
1
|
|
|
1,079
|
|
|
121
|
|
|
—
|
|
|
1,203
|
|
||||||
End of period
|
$
|
3
|
|
|
$
|
2
|
|
|
$
|
1,314
|
|
|
$
|
120
|
|
|
$
|
—
|
|
|
$
|
1,439
|
|
(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
|
|
|
$
|
(404
|
)
|
|
$
|
2,374
|
|
|
$
|
(1,201
|
)
|
|
$
|
—
|
|
|
$
|
770
|
|
Investing activities
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Purchases of property and equipment
|
—
|
|
|
—
|
|
|
(1,366
|
)
|
|
—
|
|
|
—
|
|
|
(1,366
|
)
|
||||||
Purchases of spectrum licenses and other intangible assets, including deposits
|
—
|
|
|
—
|
|
|
(51
|
)
|
|
—
|
|
|
—
|
|
|
(51
|
)
|
||||||
Proceeds related to beneficial interests in securitization transactions
|
—
|
|
|
—
|
|
|
13
|
|
|
1,282
|
|
|
—
|
|
|
1,295
|
|
||||||
Acquisition of companies, net of cash
|
—
|
|
|
—
|
|
|
(333
|
)
|
|
—
|
|
|
—
|
|
|
(333
|
)
|
||||||
Other, net
|
—
|
|
|
—
|
|
|
(7
|
)
|
|
—
|
|
|
—
|
|
|
(7
|
)
|
||||||
Net cash (used in) provided by investing activities
|
—
|
|
|
—
|
|
|
(1,744
|
)
|
|
1,282
|
|
|
—
|
|
|
(462
|
)
|
||||||
Financing activities
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Proceeds from issuance of long-term debt
|
—
|
|
|
2,494
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
2,494
|
|
||||||
Proceeds from borrowing on revolving credit facility, net
|
—
|
|
|
2,170
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
2,170
|
|
||||||
Repayments of revolving credit facility
|
—
|
|
|
—
|
|
|
(1,725
|
)
|
|
—
|
|
|
—
|
|
|
(1,725
|
)
|
||||||
Repayments of financing lease obligations
|
—
|
|
|
—
|
|
|
(172
|
)
|
|
—
|
|
|
—
|
|
|
(172
|
)
|
||||||
Repayments of long-term debt
|
—
|
|
|
—
|
|
|
(999
|
)
|
|
—
|
|
|
—
|
|
|
(999
|
)
|
||||||
Repurchases of common stock
|
(666
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(666
|
)
|
||||||
Intercompany advances, net
|
590
|
|
|
(4,260
|
)
|
|
3,679
|
|
|
(9
|
)
|
|
—
|
|
|
—
|
|
||||||
Tax withholdings on share-based awards
|
—
|
|
|
—
|
|
|
(74
|
)
|
|
—
|
|
|
—
|
|
|
(74
|
)
|
||||||
Cash payments for debt prepayment or debt extinguishment costs
|
—
|
|
|
—
|
|
|
(31
|
)
|
|
—
|
|
|
—
|
|
|
(31
|
)
|
||||||
Other, net
|
2
|
|
|
—
|
|
|
1
|
|
|
—
|
|
|
—
|
|
|
3
|
|
||||||
Net cash provided by (used in) financing activities
|
(74
|
)
|
|
404
|
|
|
679
|
|
|
(9
|
)
|
|
—
|
|
|
1,000
|
|
||||||
Change in cash and cash equivalents
|
(73
|
)
|
|
—
|
|
|
1,309
|
|
|
72
|
|
|
—
|
|
|
1,308
|
|
||||||
Cash and cash equivalents
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Beginning of period
|
74
|
|
|
1
|
|
|
1,086
|
|
|
58
|
|
|
—
|
|
|
1,219
|
|
||||||
End of period
|
$
|
1
|
|
|
$
|
1
|
|
|
$
|
2,395
|
|
|
$
|
130
|
|
|
$
|
—
|
|
|
$
|
2,527
|
|
|
|
|
|
|
|
|
|
|
|
|
|
•
|
the failure to obtain, or delays in obtaining, required regulatory approvals for the merger (the “Merger”) with Sprint Corporation (“Sprint”), pursuant to the Business Combination Agreement with Sprint and other parties therein (the “Business Combination Agreement”) and the other transactions contemplated by the Business Combination Agreement (collectively, the “Transactions”), and the risk that such approvals may result in the imposition of conditions that could adversely affect the combined company or the expected benefits of the Transactions, or the failure to satisfy any of the other conditions to the Transactions on a timely basis or at all;
|
•
|
the occurrence of events that may give rise to a right of one or both of the parties to terminate the Business Combination Agreement;
|
•
|
adverse effects on the market price of our common stock or on our operating results because of a failure to complete the Merger in the anticipated timeframe or at all;
|
•
|
inability to obtain the financing contemplated to be obtained in connection with the Transactions on the expected terms or timing or at all;
|
•
|
the ability of us, Sprint and the combined company to make payments on debt or to repay existing or future indebtedness when due or to comply with the covenants contained therein;
|
•
|
adverse changes in the ratings of our or Sprint’s debt securities or adverse conditions in the credit markets;
|
•
|
negative effects of the announcement, pendency or consummation of the Transactions on the market price of our common stock and on our or Sprint’s operating results, including as a result of changes in key customer, supplier, employee or other business relationships;
|
•
|
significant costs related to the Transactions, including financing costs and unknown liabilities of Sprint or that may arise;
|
•
|
failure to realize the expected benefits and synergies of the Transactions in the expected timeframes or at all;
|
•
|
costs or difficulties related to the integration of Sprint’s network and operations into our network and operations;
|
•
|
the risk of litigation or regulatory actions related to the Transactions;
|
•
|
the inability of us, Sprint or the combined company to retain and hire key personnel;
|
•
|
the risk that certain contractual restrictions contained in the Business Combination Agreement during the pendency of the Transactions could adversely affect our or Sprint’s ability to pursue business opportunities or strategic transactions;
|
•
|
adverse economic, political or market conditions in the U.S. and international markets;
|
•
|
competition, industry consolidation, and changes in the market for wireless services, which could negatively affect our ability to attract and retain customers;
|
•
|
the effects of any future merger, investment, or acquisition involving us, as well as the effects of mergers, investments, or acquisitions in the technology, media and telecommunications industry;
|
•
|
challenges in implementing our business strategies or funding our operations, including payment for additional spectrum or network upgrades;
|
•
|
the possibility that we may be unable to renew our spectrum licenses on attractive terms or acquire new spectrum licenses at reasonable costs and terms;
|
•
|
difficulties in managing growth in wireless data services, including network quality;
|
•
|
material changes in available technology and the effects of such changes, including product substitutions and deployment costs and performance;
|
•
|
the timing, scope and financial impact of our deployment of advanced network and business technologies;
|
•
|
the impact on our networks and business from major technology equipment failures;
|
•
|
breaches of our and/or our third-party vendors’ networks, information technology (“IT”) and data security, resulting in unauthorized access to customer confidential information;
|
•
|
natural disasters, terrorist attacks or similar incidents;
|
•
|
unfavorable outcomes of existing or future litigation;
|
•
|
any changes in the regulatory environments in which we operate, including any increase in restrictions on the ability to operate our networks and changes in data privacy laws;
|
•
|
any disruption or failure of our third parties’ or key suppliers’ provisioning of products or services;
|
•
|
material adverse changes in labor matters, including labor campaigns, negotiations or additional organizing activity, and any resulting financial, operational and/or reputational impact;
|
•
|
changes in accounting assumptions that regulatory agencies, including the Securities and Exchange Commission (“SEC”), may require, which could result in an impact on earnings;
|
•
|
changes in tax laws, regulations and existing standards and the resolution of disputes with any taxing jurisdictions;
|
•
|
the possibility that the reset process under our trademark license results in changes to the royalty rates for our trademarks;
|
•
|
the possibility that we may be unable to adequately protect our intellectual property rights or be accused of infringing the intellectual property rights of others;
|
•
|
our business, investor confidence in our financial results and stock price may be adversely affected if our internal controls are not effective;
|
•
|
the occurrence of high fraud rates related to device financing, credit card, dealers, or subscriptions; and
|
•
|
interests of a majority stockholder may differ from the interests of other stockholders.
|
•
|
A narrative explanation from the perspective of management of our financial condition, results of operations, cash flows, liquidity and certain other factors that may affect future results;
|
•
|
Context to the financial statements; and
|
•
|
Information that allows assessment of the likelihood that past performance is indicative of future performance.
|
•
|
Total revenues of
$11.1 billion
for the
three months ended
March 31, 2019
increased
$625 million
, or
6%
, primarily driven by growth in service and equipment revenues as further discussed below.
|
•
|
Service revenues of
$8.3 billion
for the
three months ended
March 31, 2019
increased
$471 million
, or
6%
, primarily due to growth in our average branded customer base driven by the continued growth in existing and Greenfield markets, including the growing success of new customer segments and rate plans such as T-Mobile ONE Unlimited 55+, T-Mobile ONE Military, T-Mobile for Business and T-Mobile Essentials, along with record low churn and growth in wearables and other connected devices.
|
•
|
Equipment revenues of
$2.5 billion
for the
three months ended
March 31, 2019
increased
$163 million
, or
7%
, primarily due to a higher average revenue per device sold, partially offset by a decrease in the number of devices sold, excluding purchased leased devices.
|
•
|
Operating income
of
$1.5 billion
for the
three months ended
March 31, 2019
increased
$194 million
, or
15%
, primarily due to higher Service revenues, partially offset by higher
Selling, general and administrative
expenses, including merger-related costs of
$113 million
. Operating income also included the negative impact from hurricanes of
$36 million
for three months ended March 31, 2018.
|
•
|
Net income
of
$908 million
for the
three months ended
March 31, 2019
increased
$237 million
, or
35%
, primarily due to higher
Operating income
and lower interest expense and interest expense to affiliates, partially offset by higher
Income tax expense
. The negative impact of merger-related costs was
$93 million
, net of tax, for the
three months ended
March 31, 2019
. Net income also included the negative impact from hurricanes of
$23 million
, net of tax, for three months ended March 31, 2018.
|
•
|
Adjusted EBITDA
, a non-GAAP financial measure, of
$3.3 billion
for the
three months ended
March 31, 2019
increased
$328 million
, or
11%
, primarily due to higher
Operating income
driven by the factors described above. See “
Performance Measures
” for additional information.
|
•
|
Net cash provided by operating activities
of
$1.4 billion
for the
three months ended
March 31, 2019
increased
$622 million
, or
81%
. See “
Liquidity and Capital Resources
” for additional information.
|
•
|
Free Cash Flow, a non-GAAP financial measure, of
$618 million
for the
three months ended
March 31, 2019
decreased
$50 million
, or
7%
. Free Cash Flow includes
$34 million
in payments for merger-related costs for the
three months ended
March 31, 2019
. See “
Liquidity and Capital Resources
” for additional information.
|
|
Three Months Ended March 31,
|
|
Change
|
|||||||||||
(in millions)
|
2019
|
|
2018
|
|
$
|
|
%
|
|||||||
Revenues
|
|
|
|
|
|
|
|
|||||||
Branded postpaid revenues
|
$
|
5,493
|
|
|
$
|
5,070
|
|
|
$
|
423
|
|
|
8
|
%
|
Branded prepaid revenues
|
2,386
|
|
|
2,402
|
|
|
(16
|
)
|
|
(1
|
)%
|
|||
Wholesale revenues
|
304
|
|
|
266
|
|
|
38
|
|
|
14
|
%
|
|||
Roaming and other service revenues
|
94
|
|
|
68
|
|
|
26
|
|
|
38
|
%
|
|||
Total service revenues
|
8,277
|
|
|
7,806
|
|
|
471
|
|
|
6
|
%
|
|||
Equipment revenues
|
2,516
|
|
|
2,353
|
|
|
163
|
|
|
7
|
%
|
|||
Other revenues
|
287
|
|
|
296
|
|
|
(9
|
)
|
|
(3
|
)%
|
|||
Total revenues
|
11,080
|
|
|
10,455
|
|
|
625
|
|
|
6
|
%
|
|||
Operating expenses
|
|
|
|
|
|
|
|
|||||||
Cost of services, exclusive of depreciation and amortization shown separately below
|
1,546
|
|
|
1,589
|
|
|
(43
|
)
|
|
(3
|
)%
|
|||
Cost of equipment sales, exclusive of depreciation and amortization shown separately below
|
3,016
|
|
|
2,845
|
|
|
171
|
|
|
6
|
%
|
|||
Selling, general and administrative
|
3,442
|
|
|
3,164
|
|
|
278
|
|
|
9
|
%
|
|||
Depreciation and amortization
|
1,600
|
|
|
1,575
|
|
|
25
|
|
|
2
|
%
|
|||
Total operating expense
|
9,604
|
|
|
9,173
|
|
|
431
|
|
|
5
|
%
|
|||
Operating income
|
1,476
|
|
|
1,282
|
|
|
194
|
|
|
15
|
%
|
|||
Other income (expense)
|
|
|
|
|
|
|
|
|||||||
Interest expense
|
(179
|
)
|
|
(251
|
)
|
|
72
|
|
|
(29
|
)%
|
|||
Interest expense to affiliates
|
(109
|
)
|
|
(166
|
)
|
|
57
|
|
|
(34
|
)%
|
|||
Interest income
|
8
|
|
|
6
|
|
|
2
|
|
|
33
|
%
|
|||
Other income (expense), net
|
7
|
|
|
10
|
|
|
(3
|
)
|
|
(30
|
)%
|
|||
Total other expense, net
|
(273
|
)
|
|
(401
|
)
|
|
128
|
|
|
(32
|
)%
|
|||
Income before income taxes
|
1,203
|
|
|
881
|
|
|
322
|
|
|
37
|
%
|
|||
Income tax expense
|
(295
|
)
|
|
(210
|
)
|
|
(85
|
)
|
|
40
|
%
|
|||
Net income
|
$
|
908
|
|
|
$
|
671
|
|
|
$
|
237
|
|
|
35
|
%
|
Statement of Cash Flows Data
|
|
|
|
|
|
|
|
|||||||
Net cash provided by operating activities
|
$
|
1,392
|
|
|
$
|
770
|
|
|
$
|
622
|
|
|
81
|
%
|
Net cash used in investing activities
|
(966
|
)
|
|
(462
|
)
|
|
(504
|
)
|
|
109
|
%
|
|||
Net cash (used in) provided by financing activities
|
(190
|
)
|
|
1,000
|
|
|
(1,190
|
)
|
|
(119
|
)%
|
|||
Non-GAAP Financial Measures
|
|
|
|
|
|
|
|
|||||||
Adjusted EBITDA
|
$
|
3,284
|
|
|
$
|
2,956
|
|
|
$
|
328
|
|
|
11
|
%
|
Free Cash Flow
|
618
|
|
|
668
|
|
|
(50
|
)
|
|
(7
|
)%
|
•
|
Higher average branded postpaid phone customers, primarily from growth in our customer base driven by the continued growth in existing and Greenfield markets including the growing success of new customer segments and rate plans such as T-Mobile ONE Unlimited 55+, T-Mobile ONE Military, T-Mobile for Business and T-Mobile Essentials, along with record low churn; and
|
•
|
Higher average branded postpaid other customers, driven by higher wearables and other connected devices, specifically the Apple watch; partially offset by
|
•
|
Lower branded postpaid phone Average Revenue Per User (“ARPU”). See “Branded Postpaid Phone ARPU” in the “
Performance Measures
” section of this MD&A.
|
•
|
$136 million
in device sales revenues, excluding purchased leased devices, primarily from:
|
•
|
Higher average revenue per device sold due to an increase in the high-end device mix and lower promotions; partially offset by
|
•
|
An
8%
decrease in the number of devices sold, excluding purchased leased devices.
|
•
|
A decrease of $46 million in co-location rental revenue from the adoption of the new lease standard; partially offset by
|
•
|
Higher amortized imputed discount on EIP receivables primarily due to an increase in volumes financed; and
|
•
|
Higher advertising revenues.
|
•
|
The positive impact of the new lease standard of approximately $95 million resulting from the decrease in the average lease term and the change in accounting conclusion for certain sale-leaseback sites;
|
•
|
Lower regulatory program costs; and
|
•
|
The negative impact from hurricanes of
$36 million
for three months ended March 31, 2018; partially offset by
|
•
|
Higher costs for customer appreciation programs and network expansion.
|
•
|
An increase in device cost of equipment sales, excluding purchased leased devices, primarily due to a higher average cost per device sold, primarily due to an increase in the high-end device mix, partially offset by an
8%
decrease in the number of devices sold, excluding purchased lease devices; partially offset by
|
•
|
Lower warranty costs.
|
•
|
Higher commissions including an $81 million increase in amortization expense related to commission costs that were capitalized beginning upon the adoption of ASC 606 on January 1, 2018;
|
•
|
Merger-related costs of
$113 million
versus
zero
in Q1 2018; and
|
•
|
Higher costs related to outsourced functions, managed services and employee-related costs; partially offset by
|
•
|
Lower promotional and advertising costs.
|
•
|
The continued deployment of low band spectrum, including 600 MHz, and laying the groundwork for 5G; partially offset by
|
•
|
Lower depreciation expense related to our JUMP! On Demand program resulting from a lower total number of devices under lease.
|
•
|
Merger-related costs of
$113 million
;
|
•
|
The negative impact from hurricanes of
$36 million
for the three months ended March 31, 2018. The impact from hurricanes is not material in the three months ended March 31, 2019; and
|
•
|
The net positive impact of the new lease standard of approximately $49 million.
|
•
|
The redemption in April 2018 of aggregate principal amount of
$2.4 billion
Senior Notes, with various interest rates and maturity dates; and
|
•
|
Higher capitalized interest costs of
$32 million
, primarily due to the build out of our network to utilize our 600 MHz spectrum licenses.
|
•
|
Higher capitalized interest costs of
$43 million
, primarily due to the build out of our network to utilize our 600 MHz spectrum licenses; and
|
•
|
Lower interest rates achieved through refinancing a total of
$2.5 billion
of Senior Reset Notes in April 2018.
|
•
|
A
$25 million
bargain purchase gain as part of our purchase price allocation related to the IWS acquisition and a
$15 million
gain on our previously held equity interest in IWS; partially offset by
|
•
|
A
$32 million
loss on early redemption of
$1.0 billion
of
6.125%
Senior Notes due
2022
in January 2018.
|
•
|
Merger-related costs of
$93 million
, net of tax; partially offset by
|
•
|
No significant impact from hurricanes for the three months ended March 31, 2019, compared to a negative impact from hurricanes of
$23 million
net of tax for three months ended March 31, 2018.
|
|
March 31,
2019 |
|
December 31,
2018 |
|
Change
|
|||||||||
(in millions)
|
$
|
|
%
|
|||||||||||
Other current assets
|
$
|
659
|
|
|
$
|
645
|
|
|
$
|
14
|
|
|
2
|
%
|
Property and equipment, net
|
309
|
|
|
297
|
|
|
12
|
|
|
4
|
%
|
|||
Goodwill
|
218
|
|
|
218
|
|
|
—
|
|
|
NM
|
|
|||
Tower obligations
|
2,168
|
|
|
2,173
|
|
|
(5
|
)
|
|
—
|
%
|
|||
Total stockholders' deficit
|
(1,233
|
)
|
|
(1,142
|
)
|
|
(91
|
)
|
|
8
|
%
|
|
Three Months Ended March 31,
|
|
Change
|
|||||||||||
(in millions)
|
2019
|
|
2018
|
$
|
|
%
|
||||||||
Service revenues
|
$
|
732
|
|
|
$
|
540
|
|
|
$
|
192
|
|
|
36
|
%
|
Cost of equipment sales, exclusive of depreciation and amortization shown separately below
|
272
|
|
|
236
|
|
|
36
|
|
|
15
|
%
|
|||
Selling, general and administrative
|
275
|
|
|
236
|
|
|
39
|
|
|
17
|
%
|
|||
Total comprehensive income
|
127
|
|
|
34
|
|
|
93
|
|
|
274
|
%
|
•
|
Higher
Service revenues
, primarily due to an increase in activity of the non-guarantor subsidiary that provides device insurance, primarily driven by a net increase in average revenue as well as growth in our customer base related to a device protection product that launched at the end of August 2018 and sales of the new product; partially offset by
|
•
|
Higher
Cost of equipment sales, exclusive of depreciation and amortization shown separately below
, primarily due to higher cost devices used for device insurance claims fulfillment, partially offset by an increase in device liquidations and a decrease in device non-return fees charged to customers; and
|
•
|
Higher
Selling, general and administrative
expenses, primarily due to an increase in billing services fees due to an increase in rate during the fourth quarter of 2018 and an increase in program expenses.
|
|
March 31,
2019 |
|
March 31,
2018 |
|
Change
|
||||||
(in thousands)
|
#
|
|
%
|
||||||||
Customers, end of period
|
|
|
|
|
|
|
|
||||
Branded postpaid phone customers
|
37,880
|
|
|
34,744
|
|
|
3,136
|
|
|
9
|
%
|
Branded postpaid other customers
|
5,658
|
|
|
4,321
|
|
|
1,337
|
|
|
31
|
%
|
Total branded postpaid customers
|
43,538
|
|
|
39,065
|
|
|
4,473
|
|
|
11
|
%
|
Branded prepaid customers
|
21,206
|
|
|
20,876
|
|
|
330
|
|
|
2
|
%
|
Total branded customers
|
64,744
|
|
|
59,941
|
|
|
4,803
|
|
|
8
|
%
|
Wholesale customers
|
16,557
|
|
|
14,099
|
|
|
2,458
|
|
|
17
|
%
|
Total customers, end of period
|
81,301
|
|
|
74,040
|
|
|
7,261
|
|
|
10
|
%
|
•
|
Higher branded postpaid phone customers driven by the growing success of new customer segments and rate plans such as T-Mobile ONE Unlimited 55+, T-Mobile ONE Military, T-Mobile for Business and T-Mobile Essentials and continued growth in existing and Greenfield markets, along with record-low churn, partially offset by competitive activity;
|
•
|
Higher branded postpaid other customers, primarily due to strength in gross customer additions from wearables; and
|
•
|
Higher branded prepaid customers driven by the continued success of our Metro by T-Mobile brand due to promotional activities, rate plan offers, and growth in connected devices, along with lower churn.
|
|
Three Months Ended March 31,
|
|
Change
|
||||||||
(in thousands)
|
2019
|
|
2018
|
#
|
|
%
|
|||||
Net customer additions
|
|
|
|
|
|
|
|
||||
Branded postpaid phone customers
|
656
|
|
|
617
|
|
|
39
|
|
|
6
|
%
|
Branded postpaid other customers
|
363
|
|
|
388
|
|
|
(25
|
)
|
|
(6
|
)%
|
Total branded postpaid customers
|
1,019
|
|
|
1,005
|
|
|
14
|
|
|
1
|
%
|
Branded prepaid customers
|
69
|
|
|
199
|
|
|
(130
|
)
|
|
(65
|
)%
|
Total branded customers
|
1,088
|
|
|
1,204
|
|
|
(116
|
)
|
|
(10
|
)%
|
Wholesale customers
|
562
|
|
|
229
|
|
|
333
|
|
|
145
|
%
|
Total net customer additions
|
1,650
|
|
|
1,433
|
|
|
217
|
|
|
15
|
%
|
•
|
Lower branded prepaid net customer additions primarily due to continued promotional activities in the marketplace, partially offset by lower churn; and
|
•
|
Lower branded postpaid other net customer additions primarily due to higher deactivations from a growing customer base, partially offset by lower churn; partially offset by
|
•
|
Higher branded postpaid phone net customer additions primarily due to record-low churn.
|
|
March 31,
2019 |
|
March 31,
2018 |
|
Change
|
||||||
#
|
|
%
|
|||||||||
Branded postpaid customers per account
|
3.06
|
|
|
2.95
|
|
|
0.11
|
|
|
4
|
%
|
|
Three Months Ended March 31,
|
|
Bps Change
|
||||
2019
|
|
2018
|
|||||
Branded postpaid phone churn
|
0.88
|
%
|
|
1.07
|
%
|
|
-19 bps
|
Branded prepaid churn
|
3.85
|
%
|
|
3.94
|
%
|
|
-9 bps
|
(in millions, except average number of customers and ARPU)
|
Three Months Ended March 31,
|
|
Change
|
|||||||||||
2019
|
|
2018
|
|
$
|
|
%
|
||||||||
Calculation of Branded Postpaid Phone ARPU
|
|
|
|
|
|
|
|
|||||||
Branded postpaid service revenues
|
$
|
5,493
|
|
|
$
|
5,070
|
|
|
$
|
423
|
|
|
8
|
%
|
Less: Branded postpaid other revenues
|
(310
|
)
|
|
(259
|
)
|
|
(51
|
)
|
|
20
|
%
|
|||
Branded postpaid phone service revenues
|
$
|
5,183
|
|
|
$
|
4,811
|
|
|
$
|
372
|
|
|
8
|
%
|
Divided by: Average number of branded postpaid phone customers (in thousands) and number of months in period
|
37,504
|
|
|
34,371
|
|
|
3,133
|
|
|
9
|
%
|
|||
Branded postpaid phone ARPU
|
$
|
46.07
|
|
|
$
|
46.66
|
|
|
$
|
(0.59
|
)
|
|
(1
|
)%
|
Calculation of Branded Prepaid ARPU
|
|
|
|
|
|
|
|
|
|
|||||
Branded prepaid service revenues
|
$
|
2,386
|
|
|
$
|
2,402
|
|
|
$
|
(16
|
)
|
|
(1
|
)%
|
Divided by: Average number of branded prepaid customers (in thousands) and number of months in period
|
21,122
|
|
|
20,583
|
|
|
539
|
|
|
3
|
%
|
|||
Branded prepaid ARPU
|
$
|
37.65
|
|
|
$
|
38.90
|
|
|
$
|
(1.25
|
)
|
|
(3
|
)%
|
•
|
A reduction in regulatory program revenues from the continued adoption of tax inclusive plans;
|
•
|
A reduction in certain non-recurring charges;
|
•
|
The growing success of new customer segments and rate plans such as T-Mobile ONE Unlimited 55+, T-Mobile ONE Military, T-Mobile for Business and T-Mobile Essentials; and
|
•
|
The ongoing growth in our Netflix offering, which totaled $0.51 for the three months ended March 31, 2019, and decreased branded postpaid phone ARPU by $0.27 compared to the three months ended March 31, 2018; partially offset by
|
•
|
Higher premium services revenue; and
|
•
|
A net reduction in promotional activities.
|
•
|
Dilution from promotional rate plans; and
|
•
|
Growth in our Amazon Prime offering, which impacted prepaid ARPU by $0.32, is included as a benefit to certain Metro by T-Mobile unlimited rate plans for the
three months ended
March 31, 2019
; partially offset by
|
•
|
Certain non-recurring charges.
|
|
Three Months Ended March 31,
|
|
Change
|
|||||||||||
(in millions)
|
2019
|
|
2018
|
|
$
|
|
%
|
|||||||
Net income
|
$
|
908
|
|
|
$
|
671
|
|
|
$
|
237
|
|
|
35
|
%
|
Adjustments:
|
|
|
|
|
|
|
|
|
|
|||||
Interest expense
|
179
|
|
|
251
|
|
|
(72
|
)
|
|
(29
|
)%
|
|||
Interest expense to affiliates
|
109
|
|
|
166
|
|
|
(57
|
)
|
|
(34
|
)%
|
|||
Interest income
|
(8
|
)
|
|
(6
|
)
|
|
(2
|
)
|
|
33
|
%
|
|||
Other (income) expense, net
|
(7
|
)
|
|
(10
|
)
|
|
3
|
|
|
(30
|
)%
|
|||
Income tax expense (benefit)
|
295
|
|
|
210
|
|
|
85
|
|
|
40
|
%
|
|||
Operating income
|
1,476
|
|
|
1,282
|
|
|
194
|
|
|
15
|
%
|
|||
Depreciation and amortization
|
1,600
|
|
|
1,575
|
|
|
25
|
|
|
2
|
%
|
|||
Stock-based compensation
(1)
|
93
|
|
|
96
|
|
|
(3
|
)
|
|
(3
|
)%
|
|||
Merger-related costs
|
113
|
|
|
—
|
|
|
113
|
|
|
NM
|
|
|||
Other, net
(2)
|
2
|
|
|
3
|
|
|
(1
|
)
|
|
(33
|
)%
|
|||
Adjusted EBITDA
|
$
|
3,284
|
|
|
$
|
2,956
|
|
|
$
|
328
|
|
|
11
|
%
|
Net income margin (Net income divided by service revenues)
|
11
|
%
|
|
9
|
%
|
|
|
|
|
200 bps
|
|
|||
Adjusted EBITDA margin (Adjusted EBITDA divided by service revenues)
|
40
|
%
|
|
38
|
%
|
|
|
|
|
200 bps
|
|
(1)
|
Stock-based compensation includes payroll tax impacts and may not agree to stock-based compensation expense in the
condensed consolidated financial statements
. Additionally, certain stock-based compensation expenses associated with the Transactions have been included in
Merger-related costs
.
|
(2)
|
Other, net may not agree to the
Condensed Consolidated Statements of Comprehensive Income
primarily due to certain non-routine operating activities, such as other special items that would not be expected to reoccur or are not reflective of T-Mobile’s ongoing operating performance, and are therefore excluded in Adjusted EBITDA.
|
•
|
Higher service revenues, as further discussed above;
|
•
|
The positive impact of the new lease standard of approximately $49 million; and
|
•
|
The negative impact from hurricanes of
$36 million
for three months ended March 31, 2018. There was no significant impact from hurricanes for the three months ended March 31, 2019; partially offset by
|
•
|
Higher Selling, general and administrative expenses.
|
|
Three Months Ended March 31,
|
|
Change
|
|||||||||||
(in millions)
|
2019
|
|
2018
|
|
$
|
|
%
|
|||||||
Net cash provided by operating activities
|
$
|
1,392
|
|
|
$
|
770
|
|
|
$
|
622
|
|
|
81
|
%
|
Net cash used in investing activities
|
(966
|
)
|
|
(462
|
)
|
|
(504
|
)
|
|
109
|
%
|
|||
Net cash (used in) provided by financing activities
|
(190
|
)
|
|
1,000
|
|
|
(1,190
|
)
|
|
(119
|
)%
|
•
|
A
$237 million
increase in
Net income
; and
|
•
|
A
$215 million
decrease in net cash outflows from changes in working capital, primarily due to lower use from
Accounts payable and accrued liabilities
, partially offset by an increase in Inventories, Accounts receivable and Other current and long-term assets.
|
•
|
Changes in
Operating lease right-of-use assets
and
Short and long-term operating lease liabilities
are now presented in
Changes in operating assets and liabilities
due to the adoption of the new lease standard. The net impact of changes in these accounts decreased
Net cash provided by operating activities
by $87 million.
|
•
|
$1.9 billion
in Purchases of property and equipment, including capitalized interest, primarily driven by growth in network build as we continued deployment of low band spectrum, including 600 MHz, and started laying the groundwork for 5G; and
|
•
|
$185 million
in Purchases of spectrum licenses and other intangible assets, including deposits; partially offset by
|
•
|
$1.2 billion
in Proceeds related to beneficial interests in securitization transactions.
|
•
|
$100 million
for Tax withholdings on share-based awards; and
|
•
|
$86 million
for Repayments of capital lease obligations.
|
•
|
Activity under the revolving credit facility included borrowing and full repayment of
$885 million
, for a net of $0 impact.
|
|
Three Months Ended March 31,
|
|
Change
|
|||||||||||
(in millions)
|
2019
|
|
2018
|
|
$
|
|
%
|
|||||||
Net cash provided by operating activities
|
$
|
1,392
|
|
|
$
|
770
|
|
|
$
|
622
|
|
|
81
|
%
|
Cash purchases of property and equipment
|
(1,931
|
)
|
|
(1,366
|
)
|
|
(565
|
)
|
|
41
|
%
|
|||
Proceeds related to beneficial interests in securitization transactions
|
1,157
|
|
|
1,295
|
|
|
(138
|
)
|
|
(11
|
)%
|
|||
Cash payments for debt prepayment or debt extinguishment costs
|
—
|
|
|
(31
|
)
|
|
31
|
|
|
NM
|
|
|||
Free Cash Flow
|
$
|
618
|
|
|
$
|
668
|
|
|
$
|
(50
|
)
|
|
(7
|
)%
|
•
|
Higher Cash Purchases of property and equipment, net of capitalized interest of
$118 million
and
$43 million
for the
three months ended
March 31,
2019
and
2018
, respectively. The increase in cash purchases of property and equipment was primarily due to growth in network build as we continued deployment of low band spectrum, including 600 MHz, and started laying the groundwork for 5G; and
|
•
|
Lower proceeds related to our deferred purchase price from securitization transactions; partially offset by
|
•
|
Higher Net cash provided by operating activities.
|
•
|
Free Cash Flow includes
$34 million
in payments for merger-related costs for the
three months ended
March 31, 2019
.
|
•
|
In evaluating contracts to determine if they qualify as a lease, we consider factors such as if we have obtained or transferred substantially all of the rights to the underlying asset through exclusivity, if we can or if we have transferred the ability to direct the use of the asset by making decisions about how and for what purpose the asset will be used and if the lessor has substantive substitution rights.
|
•
|
We recognized right-of-use assets and operating lease liabilities for operating leases that have not previously been recorded. The lease liability for operating leases is based on the net present value of future minimum lease payments. The right-of-use asset for operating leases is based on the lease liability adjusted for the reclassification of certain balance sheet amounts such as prepaid rent and deferred rent which we remeasured at adoption due to the application of hindsight to our lease term estimates. Deferred and prepaid rent will no longer be presented separately.
|
•
|
Capital lease assets previously included within
Property and equipment, net
were reclassified to financing lease right-of-use assets and capital lease liabilities previously included in
Short-term debt
and
Long-term debt
were reclassified to financing lease liabilities in our Condensed Consolidated Balance Sheet.
|
•
|
Certain line items in the
Condensed Consolidated Statements of Cash Flows
and the “Supplementary disclosure of cash flow information” have been renamed to align with the new terminology presented in the new standard; “Repayment of capital lease obligations” is now presenting as “
Repayments of financing lease obligations
” and “Assets acquired under capital lease obligations” is now presenting as “Financing lease right-of-use assets obtained in exchange for lease obligations.” In the “Operating Activities” section of the
Condensed Consolidated Statements of Cash Flows
we have added “Operating lease right-of-use assets” and “Short and long-term operating lease liabilities” which represent the change in the operating lease asset and liability, respectively. Additionally, in the “Supplemental disclosure of cash flow information” section of the
Condensed Consolidated Statements of Cash Flows
we have added “Operating lease payments,” and in the “Noncash investing and financing activities” section we have added “Operating lease right-of-use assets obtained in exchange for lease obligations.”
|
•
|
In determining the discount rate used to measure the right-of-use asset and lease liability, we use rates implicit in the lease, or if not readily available, we use our incremental borrowing rate. Our incremental borrowing rate is based on an estimated secured rate comprised of a risk-free LIBOR rate plus a credit spread as secured by our assets.
|
•
|
Certain of our lease agreements include rental payments based on changes in the consumer price index (CPI). Lease liabilities are not remeasured as a result of changes in the CPI; instead, changes in the CPI are treated as variable lease payments and are excluded from the measurement of the right-of-use asset and lease liability. These payments are recognized in the period in which the related obligation was incurred. Our lease agreements do not contain any material residual value guarantees or material restrictive covenants.
|
•
|
We elected the use of hindsight whereby we applied current lease term assumptions that are applied to new leases in determining the expected lease term period for all cell sites. Upon adoption of the new standard and application of hindsight our expected lease term has shortened to reflect payments due for the initial non-cancelable lease term only. This assessment corresponds to our lease term assessment for new leases and aligns with the payments that have been disclosed as lease commitments in prior years. As a result, the average remaining lease term for cell sites has decreased from approximately
nine
to
five years
based on lease contracts in effect at transition on January 1, 2019. The aggregate impact of using the hindsight is an estimated decrease in Total operating expense of
$240 million
in fiscal year 2019.
|
•
|
We were also required to reassess the previously failed sale-leasebacks of certain T-Mobile-owned wireless communication tower sites and determine whether the transfer of the assets to the tower operator under the arrangement met the transfer of control criteria in the revenue standard and whether a sale should be recognized.
|
•
|
We concluded that a sale has not occurred for the 6,200 tower sites transferred to CCI pursuant to a master prepaid lease arrangement; therefore, these sites will continue to be accounted for as failed sale-leasebacks.
|
•
|
We concluded that a sale should be recognized for the 900 tower sites transferred to CCI pursuant to the sale of a subsidiary and the 500 tower sites transferred to PTI. Upon adoption on January 1, 2019 we derecognized our existing long-term financial obligation and the tower-related property and equipment associated with these 1,400 previously failed sale-leaseback tower sites and recognized a lease liability and right-of-use asset for the leaseback of the tower sites. The estimated impacts from the change in accounting conclusion are primarily a decrease in
Other revenues
of
$44 million
and a decrease in
Interest expense
of
$34 million
.
|
•
|
Rental revenues and expenses associated with co-location tower sites are presented on a net basis under the new lease standard. These revenues and expenses were presented on a gross basis under the former lease standard.
|
|
|
|
|
Incorporated by Reference
|
|
|
||||
Exhibit No.
|
|
Exhibit Description
|
|
Form
|
|
Date of First Filing
|
|
Exhibit Number
|
|
Filed Herein
|
10.1
|
|
|
|
8-K
|
|
03/04/2019
|
|
10.1
|
|
|
10.2*
|
|
Second Amendment, dated as of March 25, 2019, to Amended and Restated Employment Agreement, dated as of December 20, 2017, between T-Mobile US, Inc. and J. Braxton Carter.
|
|
|
|
|
|
|
|
X
|
31.1
|
|
|
|
|
|
|
|
|
X
|
|
31.2
|
|
|
|
|
|
|
|
|
X
|
|
32.1**
|
|
|
|
|
|
|
|
|
|
|
32.2**
|
|
|
|
|
|
|
|
|
|
|
101.INS
|
|
XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document.
|
|
|
|
|
|
|
|
|
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.
|
|
|
|
|
|
April 25, 2019
|
|
/s/ J. Braxton Carter
|
|
|
|
J. Braxton Carter
|
|
|
|
Executive Vice President and Chief Financial Officer
|
|
|
|
(Principal Financial Officer and Authorized Signatory)
|
|
1 Year T Mobile US Chart |
1 Month T Mobile US Chart |
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