Guarantor Financial Information

9 Months Ended

Sep. 30, 2019

Condensed Financial Information Disclosure [Abstract]

Guarantor Financial Information

Note 13 – Guarantor Financial Information

Pursuant to the applicable indentures and supplemental indentures, the long-term debt to affiliates and third parties issued by T-Mobile USA (“Issuer”) is fully and unconditionally guaranteed, jointly and severally, on a senior unsecured basis by T-Mobile (“Parent”) and certain of the Issuer’s 100% owned subsidiaries (“Guarantor Subsidiaries”).

The guarantees of the Guarantor Subsidiaries are subject to release in limited circumstances only upon the occurrence of certain customary conditions. The indentures and credit facilities governing the long-term debt contain covenants that, among other things, limit the ability of the Issuer and the Guarantor Subsidiaries to incur more debt, pay dividends and make distributions, make certain investments, repurchase stock, create liens or other encumbrances, enter into transactions with affiliates, enter into transactions that restrict dividends or distributions from subsidiaries, and merge, consolidate or sell, or otherwise dispose of, substantially all of their assets. Certain provisions of each of the credit facilities, indentures and supplemental indentures relating to the long-term debt restrict the ability of the Issuer to loan funds or make payments to Parent. However, the Issuer and Guarantor Subsidiaries are allowed to make certain permitted payments to the Parent under the terms of the indentures and the supplemental indentures.

On October 23, 2018, SLMA LLC was formed as a limited liability company in Delaware to serve as an escrow subsidiary to facilitate the contemplated issuance of notes by Parent in connection with the Transactions. SLMA LLC is an indirect, 100% owned finance subsidiary of Parent, as such term is used in Rule 3-10(b) of Regulation S-X, and has been designated as an unrestricted subsidiary under the Issuer’s existing debt securities. Any debt securities that may be issued from time to time by SLMA LLC will be fully and unconditionally guaranteed by Parent.

In September 2019, certain Non-Guarantor Subsidiaries became Guarantor Subsidiaries. Certain prior period amounts have been reclassified to conform to the current period’s presentation.

Presented below is the condensed consolidating financial information as of September 30, 2019 and December 31, 2018, and for the three and nine months ended September 30, 2019 and 2018.

Condensed Consolidating Balance Sheet Information

September 30, 2019

(in millions)	Parent		Issuer		Guarantor Subsidiaries		Non-Guarantor Subsidiaries			Consolidating and Eliminating Adjustments			Consolidated
Assets
Current assets
Cash and cash equivalents	$	5	$	1	$	1,539	$	108		$	—		$	1,653
Accounts receivable, net	—		—		1,524		298			—			1,822
Equipment installment plan receivables, net	—		—		2,425		—			—			2,425
Accounts receivable from affiliates	—		5		20		—			(5		)	20
Inventory	—		—		801		—			—			801
Other current assets	—		—		1,042		695			—			1,737
Total current assets	5		6		7,351		1,101			(5		)	8,458
Property and equipment, net (1)	—		—		21,891		207			—			22,098
Operating lease right-of-use assets	—		—		10,914		—			—			10,914
Financing lease right-of-use assets	—		—		2,855		—			—			2,855
Goodwill	—		—		1,930		—			—			1,930
Spectrum licenses	—		—		36,442		—			—			36,442
Other intangible assets, net	—		—		144		—			—			144
Investments in subsidiaries, net	27,946		50,500		—		—			(78,446		)	—
Intercompany receivables and note receivables	—		4,603		—		—			(4,603		)	—
Equipment installment plan receivables due after one year, net	—		—		1,469		—			—			1,469
Other assets	—		9		1,720		210			(140		)	1,799
Total assets	$	27,951	$	55,118	$	84,716	$	1,518		$	(83,194	)	$	86,109
Liabilities and Stockholders' Equity
Current liabilities
Accounts payable and accrued liabilities	$	—	$	136	$	6,005	$	265		$	—		$	6,406
Payables to affiliates	—		177		80		—			(5		)	252
Short-term debt	—		475		—		—			—			475
Deferred revenue	—		—		608		—			—			608
Short-term operating lease liabilities	—		—		2,232		—			—			2,232
Short-term financing lease liabilities	—		—		1,013		—			—			1,013
Other current liabilities	—		1,442		145		296			—			1,883
Total current liabilities	—		2,230		10,083		561			(5		)	12,869
Long-term debt	—		10,956		—		—			—			10,956
Long-term debt to affiliates	—		13,986		—		—			—			13,986
Tower obligations (1)	—		—		75		2,166			—			2,241
Deferred tax liabilities	—		—		5,436		—			(140		)	5,296
Operating lease liabilities	—		—		10,614		—			—			10,614
Financing lease liabilities	—		—		1,440		—			—			1,440
Negative carrying value of subsidiaries, net	—		—		787		—			(787		)	—
Intercompany payables and debt	180		—		4,075		348			(4,603		)	—
Other long-term liabilities	—		—		915		21			—			936
Total long-term liabilities	180		24,942		23,342		2,535			(5,530		)	45,469
Total stockholders' equity (deficit)	27,771		27,946		51,291		(1,578		)	(77,659		)	27,771
Total liabilities and stockholders' equity	$	27,951	$	55,118	$	84,716	$	1,518		$	(83,194	)	$	86,109

(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.

Condensed Consolidating Balance Sheet Information

December 31, 2018

(in millions)	Parent		Issuer		Guarantor Subsidiaries		Non-Guarantor Subsidiaries			Consolidating and Eliminating Adjustments			Consolidated
Assets
Current assets
Cash and cash equivalents	$	2	$	1	$	1,082	$	118		$	—		$	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	—		—		1,032		644			—			1,676
Total current assets	2		1		7,257		1,021			—			8,281
Property and equipment, net (1)	—		—		23,113		246			—			23,359
Goodwill	—		—		1,901		—			—			1,901
Spectrum licenses	—		—		35,559		—			—			35,559
Other intangible assets, net	—		—		198		—			—			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		217			(141		)	1,623
Total assets	$	25,316	$	51,698	$	71,115	$	1,484		$	(77,145	)	$	72,468
Liabilities and Stockholders' Equity
Current liabilities
Accounts payable and accrued liabilities	$	—	$	228	$	7,263	$	250		$	—		$	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		9,009		426			—			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	—		—		4,613		—			(141		)	4,472
Deferred rent expense	—		—		2,781		—			—			2,781
Negative carrying value of subsidiaries, net	—		—		676		—			(676		)	—
Intercompany payables and debt	598		—		4,258		318			(5,174		)	—
Other long-term liabilities	—		20		926		21			—			967
Total long-term liabilities	598		25,552		14,812		2,512			(5,991		)	37,483
Total stockholders' equity (deficit)	24,718		25,314		47,294		(1,454		)	(71,154		)	24,718
Total liabilities and stockholders' equity	$	25,316	$	51,698	$	71,115	$	1,484		$	(77,145	)	$	72,468

(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.

Condensed Consolidating Statement of Comprehensive Income Information

Three Months Ended September 30, 2019

(in millions)	Parent			Issuer			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Consolidating and Eliminating Adjustments			Consolidated
Revenues
Service revenues	$	—		$	—		$	8,149		$	775		$	(341	)	$	8,583
Equipment revenues	—			—			2,237			2			(53		)	2,186
Other revenues	—			3			279			51			(41		)	292
Total revenues	—			3			10,665			828			(435		)	11,061
Operating expenses
Cost of services, exclusive of depreciation and amortization shown separately below	—			—			1,760			—			(27		)	1,733
Cost of equipment sales, exclusive of depreciation and amortization shown separately below	—			—			2,440			317			(53		)	2,704
Selling, general and administrative	—			1			3,601			251			(355		)	3,498
Depreciation and amortization	—			—			1,642			13			—			1,655
Total operating expense	—			1			9,443			581			(435		)	9,590
Operating income	—			2			1,222			247			—			1,471
Other income (expense)
Interest expense	—			(111		)	(28		)	(45		)	—			(184		)
Interest expense to affiliates	—			(100		)	(5		)	—			5			(100		)
Interest income	—			6			3			1			(5		)	5
Other (expense) income, net	—			(1		)	5			(1		)	—			3
Total other expense, net	—			(206		)	(25		)	(45		)	—			(276		)
Income (loss) before income taxes	—			(204		)	1,197			202			—			1,195
Income tax expense	—			—			(281		)	(44		)	—			(325		)
Earnings of subsidiaries	870			1,074			9			—			(1,953		)	—
Net income	$	870		$	870		$	925		$	158		$	(1,953	)	$	870
Net income	$	870		$	870		$	925		$	158		$	(1,953	)	$	870
Other comprehensive (loss) income, net of tax
Other comprehensive (loss) income, net of tax	(257		)	(257		)	88			—			169			(257		)
Total comprehensive income	$	613		$	613		$	1,013		$	158		$	(1,784	)	$	613

Condensed Consolidating Statement of Comprehensive Income Information

Three Months Ended September 30, 2018

(in millions)	Parent		Issuer			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Consolidating and Eliminating Adjustments			Consolidated
Revenues
Service revenues	$	—	$	—		$	7,738		$	562		$	(234	)	$	8,066
Equipment revenues	—		—			2,444			—			(53		)	2,391
Other revenues	—		6			333			59			(16		)	382
Total revenues	—		6			10,515			621			(303		)	10,839
Operating expenses
Cost of services, exclusive of depreciation and amortization shown separately below	—		—			1,580			6			—			1,586
Cost of equipment sales, exclusive of depreciation and amortization shown separately below	—		—			2,657			258			(53		)	2,862
Selling, general and administrative	—		2			3,337			225			(250		)	3,314
Depreciation and amortization	—		—			1,621			16			—			1,637
Total operating expenses	—		2			9,195			505			(303		)	9,399
Operating income	—		4			1,320			116			—			1,440
Other income (expense)
Interest expense	—		(117		)	(29		)	(48		)	—			(194		)
Interest expense to affiliates	—		(124		)	(5		)	—			5			(124		)
Interest income	—		5			5			—			(5		)	5
Other income (expense), net	—		—			4			(1		)	—			3
Total other expense, net	—		(236		)	(25		)	(49		)	—			(310		)
Income (loss) before income taxes	—		(232		)	1,295			67			—			1,130
Income tax expense	—		—			(320		)	(15		)	—			(335		)
Earnings of subsidiaries	795		1,027			8			—			(1,830		)	—
Net income	$	795	$	795		$	983		$	52		$	(1,830	)	$	795
Net income	$	795	$	795		$	983		$	52		$	(1,830	)	$	795
Other comprehensive (loss) income, net of tax
Other comprehensive (loss) income, net of tax	—		—			—			—			—			—
Total comprehensive income	$	795	$	795		$	983		$	52		$	(1,830	)	$	795

Condensed Consolidating Statement of Comprehensive Income Information

Nine Months Ended September 30, 2019

(in millions)	Parent			Issuer			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Consolidating and Eliminating Adjustments			Consolidated
Revenues
Service revenues	$	—		$	—		$	24,004		$	2,270		$	(988	)	$	25,286
Equipment revenues	—			—			7,128			3			(166		)	6,965
Other revenues	—			12			828			152			(123		)	869
Total revenues	—			12			31,960			2,425			(1,277		)	33,120
Operating expenses
Cost of services, exclusive of depreciation and amortization shown separately below	—			—			5,011			—			(83		)	4,928
Cost of equipment sales, exclusive of depreciation and amortization shown separately below	—			—			7,657			890			(166		)	8,381
Selling, general and administrative	—			2			10,759			750			(1,028		)	10,483
Depreciation and amortization	—			—			4,800			40			—			4,840
Total operating expense	—			2			28,227			1,680			(1,277		)	28,632
Operating income	—			10			3,733			745			—			4,488
Other income (expense)
Interest expense	—			(337		)	(69		)	(139		)	—			(545		)
Interest expense to affiliates	—			(311		)	(14		)	—			15			(310		)
Interest income	—			16			13			3			(15		)	17
Other (expense) income, net	—			(12		)	1			(1		)	—			(12		)
Total other expense, net	—			(644		)	(69		)	(137		)	—			(850		)
Income (loss) before income taxes	—			(634		)	3,664			608			—			3,638
Income tax expense	—			—			(792		)	(129		)	—			(921		)
Earnings of subsidiaries	2,717			3,351			26			—			(6,094		)	—
Net income	$	2,717		$	2,717		$	2,898		$	479		$	(6,094	)	$	2,717
Net income	$	2,717		$	2,717		$	2,898		$	479		$	(6,094	)	$	2,717
Other comprehensive (loss) income, net of tax
Other comprehensive (loss) income, net of tax	(738		)	(738		)	256			—			482			(738		)
Total comprehensive income	$	1,979		$	1,979		$	3,154		$	479		$	(5,612	)	$	1,979

Condensed Consolidating Statement of Comprehensive Income Information

Nine Months Ended September 30, 2018

(in millions)	Parent		Issuer			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Consolidating and Eliminating Adjustments			Consolidated
Revenues
Service revenues	$	—	$	—		$	22,836		$	1,651		$	(684	)	$	23,803
Equipment revenues	—		—			7,222			—			(153		)	7,069
Other revenues	—		9			849			169			(34		)	993
Total revenues	—		9			30,907			1,820			(871		)	31,865
Operating expenses
Cost of services, exclusive of depreciation and amortization shown separately below	—		—			4,688			17			—			4,705
Cost of equipment sales, exclusive of depreciation and amortization shown separately below	—		—			7,877			756			(154		)	8,479
Selling, general and administrative	—		8			9,729			643			(717		)	9,663
Depreciation and amortization	—		—			4,797			49			—			4,846
Total operating expenses	—		8			27,091			1,465			(871		)	27,693
Operating income	—		1			3,816			355			—			4,172
Other income (expense)
Interest expense	—		(411		)	(86		)	(144		)	—			(641		)
Interest expense to affiliates	—		(419		)	(14		)	—			15			(418		)
Interest income	—		17			14			1			(15		)	17
Other (expense) income, net	—		(91		)	41			(1		)	—			(51		)
Total other expense, net	—		(904		)	(45		)	(144		)	—			(1,093		)
Income (loss) before income taxes	—		(903		)	3,771			211			—			3,079
Income tax expense	—		—			(786		)	(45		)	—			(831		)
Earnings of subsidiaries	2,248		3,151			25			—			(5,424		)	—
Net income	$	2,248	$	2,248		$	3,010		$	166		$	(5,424	)	$	2,248
Net income	$	2,248	$	2,248		$	3,010		$	166		$	(5,424	)	$	2,248
Other comprehensive (loss) income, net of tax
Other comprehensive (loss) income, net of tax	—		—			—			—			—			—
Total comprehensive income	$	2,248	$	2,248		$	3,010		$	166		$	(5,424	)	$	2,248

Condensed Consolidating Statement of Cash Flows Information

Three Months Ended September 30, 2019

(in millions)	Parent		Issuer			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Consolidating and Eliminating Adjustments			Consolidated
Operating activities
Net cash (used in) provided by operating activities	$	—	$	(219	)	$	2,880		$	(743	)	$	(170	)	$	1,748
Investing activities
Purchases of property and equipment	—		—			(1,514		)	—			—			(1,514		)
Purchases of spectrum licenses and other intangible assets, including deposits	—		—			(13		)	—			—			(13		)
Proceeds related to beneficial interests in securitization transactions	—		—			10			890			—			900
Acquisition of companies, net of cash acquired	—		(32		)	1			—			—			(31		)
Other, net	—		(2		)	3			—			—			1
Net cash (used in) provided by investing activities	—		(34		)	(1,513		)	890			—			(657		)
Financing activities
Proceeds from borrowing on revolving credit facility, net	—		575			—			—			—			575
Repayments of revolving credit facility	—		—			(575		)	—			—			(575		)
Repayments of financing lease obligations	—		—			(235		)	—			—			(235		)
Repayments of short-term debt for purchases of inventory, property and equipment, net	—		—			(300		)	—			—			(300		)
Intercompany advances, net	1		(323		)	320			2			—			—
Tax withholdings on share-based awards	—		—			(4		)	—			—			(4		)
Intercompany dividend paid	—		—			—			(170		)	170			—
Other, net	—		—			(4		)	—			—			(4		)
Net cash provided (used in) by financing activities	1		252			(798		)	(168		)	170			(543		)
Change in cash and cash equivalents	1		(1		)	569			(21		)	—			548
Cash and cash equivalents
Beginning of period	4		2			970			129			—			1,105
End of period	$	5	$	1		$	1,539		$	108		$	—		$	1,653

Condensed Consolidating Statement of Cash Flows Information

Three Months Ended September 30, 2018

(in millions)	Parent		Issuer			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Consolidating and Eliminating Adjustments			Consolidated
Operating activities
Net cash (used in) provided by operating activities	$	—	$	(429	)	$	2,685		$	(1,292	)	$	(50	)	$	914
Investing activities
Purchases of property and equipment	—		—			(1,360		)	(2		)	—			(1,362		)
Purchases of spectrum licenses and other intangible assets, including deposits	—		—			(22		)	—			—			(22		)
Proceeds related to beneficial interests in securitization transactions	—		—			12			1,326			—			1,338
Equity investment in subsidiary	—		—			(17		)	—			17			—
Other, net	—		—			4			—			—			4
Net cash (used in) provided by investing activities	—		—			(1,383		)	1,324			17			(42		)
Financing activities
Proceeds from borrowing on revolving credit facility, net	—		1,810			—			—			—			1,810
Repayments of revolving credit facility	—		—			(2,130		)	—			—			(2,130		)
Repayments of financing lease obligations	—		—			(181		)	—			—			(181		)
Repayments of short-term debt for purchases of inventory, property and equipment, net	—		—			(246		)	—			—			(246		)
Intercompany advances, net	—		(1,383		)	1,358			25			—			—
Equity investment from parent	—		—			17			—			(17		)	—
Tax withholdings on share-based awards	—		—			(5		)	—			—			(5		)
Intercompany dividend paid	—		—			—			(50		)	50			—
Other, net	1		—			(7		)	—			—			(6		)
Net cash provided (used in) by financing activities	1		427			(1,194		)	(25		)	33			(758		)
Change in cash and cash equivalents	1		(2		)	108			7			—			114
Cash and cash equivalents
Beginning of period	1		3			165			46			—			215
End of period	$	2	$	1		$	273		$	53		$	—		$	329

Condensed Consolidating Statement of Cash Flows Information

Nine Months Ended September 30, 2019

(in millions)	Parent		Issuer			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Consolidating and Eliminating Adjustments			Consolidated
Operating activities
Net cash (used in) provided by operating activities	$	—	$	(591	)	$	8,739		$	(2,396	)	$	(465	)	$	5,287
Investing activities
Purchases of property and equipment	—		—			(5,234		)	—			—			(5,234		)
Purchases of spectrum licenses and other intangible assets, including deposits	—		—			(863		)	—			—			(863		)
Proceeds related to beneficial interests in securitization transactions	—		—			27			2,869			—			2,896
Acquisition of companies, net of cash acquired	—		(32		)	1			—			—			(31		)
Other, net	—		(2		)	(4		)	—			—			(6		)
Net cash (used in) provided by investing activities	—		(34		)	(6,073		)	2,869			—			(3,238		)
Financing activities
Proceeds from borrowing on revolving credit facility, net	—		2,340			—			—			—			2,340
Repayments of revolving credit facility	—		—			(2,340		)	—			—			(2,340		)
Repayments of financing lease obligations	—		—			(550		)	—			—			(550		)
Repayments of short-term debt for purchases of inventory, property and equipment, net	—		—			(300		)	—			—			(300		)
Repayments of long-term debt	—		—			(600		)	—			—			(600		)
Intercompany advances, net	1		(1,715		)	1,732			(18		)	—			—
Tax withholdings on share-based awards	—		—			(108		)	—			—			(108		)
Cash payments for debt prepayment or debt extinguishment costs	—		—			(28		)	—			—			(28		)
Intercompany dividend paid	—		—			—			(465		)	465			—
Other, net	2		—			(15		)	—			—			(13		)
Net cash provided (used in) by financing activities	3		625			(2,209		)	(483		)	465			(1,599		)
Change in cash and cash equivalents	3		—			457			(10		)	—			450
Cash and cash equivalents
Beginning of period	2		1			1,082			118			—			1,203
End of period	$	5	$	1		$	1,539		$	108		$	—		$	1,653

Condensed Consolidating Statement of Cash Flows Information

Nine Months Ended September 30, 2018

(in millions)	Parent			Issuer			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Consolidating and Eliminating Adjustments			Consolidated
Operating activities
Net cash (used in) provided by operating activities	$	—		$	(1,091	)	$	7,963		$	(3,747	)	$	(180	)	$	2,945
Investing activities
Purchases of property and equipment	—			—			(4,354		)	(3		)	—			(4,357		)
Purchases of spectrum licenses and other intangible assets, including deposits	—			—			(101		)	—			—			(101		)
Proceeds related to beneficial interests in securitization transactions	—			—			37			3,919			—			3,956
Acquisition of companies, net of cash	—			—			(338		)	—			—			(338		)
Equity investment in subsidiary	—			—			(43		)	—			43			—
Other, net	—			—			30			—			—			30
Net cash (used in) provided by investing activities	—			—			(4,769		)	3,916			43			(810		)
Financing activities
Proceeds from issuance of long-term debt	—			2,494			—			—			—			2,494
Payments of consent fees related to long-term debt	—			—			(38		)	—			—			(38		)
Proceeds from borrowing on revolving credit facility, net	—			6,050			—			—			—			6,050
Repayments of revolving credit facility	—			—			(6,050		)	—			—			(6,050		)
Repayments of financing lease obligations	—			—			(508		)	—			—			(508		)
Repayments of short-term debt for purchases of inventory, property and equipment, net	—			—			(246		)	—			—			(246		)
Repayments of long-term debt	—			—			(3,349		)	—			—			(3,349		)
Repurchases of common stock	(1,071		)	—			—			—			—			(1,071		)
Intercompany advances, net	995			(7,453		)	6,452			6			—			—
Equity investment from parent	—			—			43			—			(43		)	—
Tax withholdings on share-based awards	—			—			(89		)	—			—			(89		)
Cash payments for debt prepayment or debt extinguishment costs	—			—			(212		)	—			—			(212		)
Intercompany dividend paid	—			—			—			(180		)	180			—
Other, net	4			—			(10		)	—			—			(6		)
Net cash (used in) provided by financing activities	(72		)	1,091			(4,007		)	(174		)	137			(3,025		)
Change in cash and cash equivalents	(72		)	—			(813		)	(5		)	—			(890		)
Cash and cash equivalents
Beginning of period	74			1			1,086			58			—			1,219
End of period	$	2		$	1		$	273		$	53		$	—		$	329