(State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification No.) | |||||||
(Registrant’s telephone number, including area code) | |||||
Securities registered pursuant to Section 12(b) of the Act: |
Title of each class | Trading Symbol | Name of each exchange on which registered | ||||||||||||
☒ | Accelerated filer | ☐ | |||||||||
Non-accelerated filer | ☐ | Smaller reporting company | |||||||||
Emerging growth company |
Class | Shares Outstanding as of October 20, 2022 | ||||
Common Stock, par value $0.00001 per share |
(in millions, except share and per share amounts) | September 30, 2022 | December 31, 2021 | |||||||||
Assets | |||||||||||
Current assets | |||||||||||
Cash and cash equivalents | $ | $ | |||||||||
Accounts receivable, net of allowance for credit losses of $ | |||||||||||
Equipment installment plan receivables, net of allowance for credit losses and imputed discount of $ | |||||||||||
Inventory | |||||||||||
Prepaid expenses | |||||||||||
Other current assets | |||||||||||
Total current assets | |||||||||||
Property and equipment, net | |||||||||||
Operating lease right-of-use assets | |||||||||||
Financing lease right-of-use assets | |||||||||||
Goodwill | |||||||||||
Spectrum licenses | |||||||||||
Other intangible assets, net | |||||||||||
Equipment installment plan receivables due after one year, net of allowance for credit losses and imputed discount of $ | |||||||||||
Other assets | |||||||||||
Total assets | $ | $ | |||||||||
Liabilities and Stockholders' Equity | |||||||||||
Current liabilities | |||||||||||
Accounts payable and accrued liabilities | $ | $ | |||||||||
Short-term debt | |||||||||||
Short-term debt to affiliates | |||||||||||
Deferred revenue | |||||||||||
Short-term operating lease liabilities | |||||||||||
Short-term financing lease liabilities | |||||||||||
Other current liabilities | |||||||||||
Total current liabilities | |||||||||||
Long-term debt | |||||||||||
Long-term debt to affiliates | |||||||||||
Tower obligations | |||||||||||
Deferred tax liabilities | |||||||||||
Operating lease liabilities | |||||||||||
Financing lease liabilities | |||||||||||
Other long-term liabilities | |||||||||||
Total long-term liabilities | |||||||||||
Commitments and contingencies (Note 14) | |||||||||||
Stockholders' equity | |||||||||||
Common Stock, par value $ | |||||||||||
Additional paid-in capital | |||||||||||
Treasury stock, at cost, | ( | ( | |||||||||
Accumulated other comprehensive loss | ( | ( | |||||||||
Accumulated deficit | ( | ( | |||||||||
Total stockholders' equity | |||||||||||
Total liabilities and stockholders' equity | $ | $ | |||||||||
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||
(in millions, except share and per share amounts) | 2022 | 2021 | 2022 | 2021 | |||||||||||||||||||
Revenues | |||||||||||||||||||||||
Postpaid revenues | $ | $ | $ | $ | |||||||||||||||||||
Prepaid revenues | |||||||||||||||||||||||
Wholesale and other service revenues | |||||||||||||||||||||||
Total service revenues | |||||||||||||||||||||||
Equipment revenues | |||||||||||||||||||||||
Other revenues | |||||||||||||||||||||||
Total revenues | |||||||||||||||||||||||
Operating expenses | |||||||||||||||||||||||
Cost of services, exclusive of depreciation and amortization shown separately below | |||||||||||||||||||||||
Cost of equipment sales, exclusive of depreciation and amortization shown separately below | |||||||||||||||||||||||
Selling, general and administrative | |||||||||||||||||||||||
Impairment expense | |||||||||||||||||||||||
Loss on disposal group held for sale | |||||||||||||||||||||||
Depreciation and amortization | |||||||||||||||||||||||
Total operating expenses | |||||||||||||||||||||||
Operating income | |||||||||||||||||||||||
Other expense, net | |||||||||||||||||||||||
Interest expense, net | ( | ( | ( | ( | |||||||||||||||||||
Other expense, net | ( | ( | ( | ( | |||||||||||||||||||
Total other expense, net | ( | ( | ( | ( | |||||||||||||||||||
Income before income taxes | |||||||||||||||||||||||
Income tax benefit (expense) | ( | ( | |||||||||||||||||||||
Net income | $ | $ | $ | $ | |||||||||||||||||||
Net income | $ | $ | $ | $ | |||||||||||||||||||
Other comprehensive income, net of tax | |||||||||||||||||||||||
Reclassification of loss from cash flow hedges, net of tax effect of $ | |||||||||||||||||||||||
Unrealized loss on foreign currency translation adjustment, net of tax effect of $ | ( | ( | ( | ||||||||||||||||||||
Other comprehensive income | |||||||||||||||||||||||
Total comprehensive income | $ | $ | $ | $ | |||||||||||||||||||
Earnings per share | |||||||||||||||||||||||
Basic | $ | $ | $ | $ | |||||||||||||||||||
Diluted | $ | $ | $ | $ | |||||||||||||||||||
Weighted-average shares outstanding | |||||||||||||||||||||||
Basic | |||||||||||||||||||||||
Diluted | |||||||||||||||||||||||
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||
(in millions) | 2022 | 2021 | 2022 | 2021 | |||||||||||||||||||
Operating activities | |||||||||||||||||||||||
Net income | $ | $ | $ | $ | |||||||||||||||||||
Adjustments to reconcile net income to net cash provided by operating activities | |||||||||||||||||||||||
Depreciation and amortization | |||||||||||||||||||||||
Stock-based compensation expense | |||||||||||||||||||||||
Deferred income tax (benefit) expense | ( | ( | |||||||||||||||||||||
Bad debt expense | |||||||||||||||||||||||
Losses (gains) from sales of receivables | ( | ||||||||||||||||||||||
Losses on redemption of debt | |||||||||||||||||||||||
Impairment expense | |||||||||||||||||||||||
Loss on remeasurement of disposal group held for sale | |||||||||||||||||||||||
Changes in operating assets and liabilities | |||||||||||||||||||||||
Accounts receivable | ( | ( | ( | ( | |||||||||||||||||||
Equipment installment plan receivables | ( | ( | ( | ( | |||||||||||||||||||
Inventories | ( | ||||||||||||||||||||||
Operating lease right-of-use assets | |||||||||||||||||||||||
Other current and long-term assets | ( | ( | ( | ( | |||||||||||||||||||
Accounts payable and accrued liabilities | ( | ||||||||||||||||||||||
Short- and long-term operating lease liabilities | ( | ( | ( | ( | |||||||||||||||||||
Other current and long-term liabilities | ( | ( | |||||||||||||||||||||
Other, net | |||||||||||||||||||||||
Net cash provided by operating activities | |||||||||||||||||||||||
Investing activities | |||||||||||||||||||||||
Purchases of property and equipment, including capitalized interest of $( | ( | ( | ( | ( | |||||||||||||||||||
Purchases of spectrum licenses and other intangible assets, including deposits | ( | ( | ( | ( | |||||||||||||||||||
Proceeds from sales of tower sites | |||||||||||||||||||||||
Proceeds related to beneficial interests in securitization transactions | |||||||||||||||||||||||
Acquisition of companies, net of cash and restricted cash acquired | ( | ( | ( | ||||||||||||||||||||
Other, net | |||||||||||||||||||||||
Net cash used in investing activities | ( | ( | ( | ( | |||||||||||||||||||
Financing activities | |||||||||||||||||||||||
Proceeds from issuance of long-term debt | |||||||||||||||||||||||
Repayments of financing lease obligations | ( | ( | ( | ( | |||||||||||||||||||
Repayments of short-term debt for purchases of inventory, property and equipment and other financial liabilities | ( | ( | |||||||||||||||||||||
Repayments of long-term debt | ( | ( | ( | ( | |||||||||||||||||||
Repurchases of common stock | ( | ( | |||||||||||||||||||||
Tax withholdings on share-based awards | ( | ( | ( | ( | |||||||||||||||||||
Cash payments for debt prepayment or debt extinguishment costs | ( | ( | |||||||||||||||||||||
Other, net | ( | ( | ( | ( | |||||||||||||||||||
Net cash provided by (used in) financing activities | ( | ( | |||||||||||||||||||||
Change in cash and cash equivalents, including restricted cash and cash held for sale | ( | ( | |||||||||||||||||||||
Cash and cash equivalents, including restricted cash and cash held for sale | |||||||||||||||||||||||
Beginning of period | |||||||||||||||||||||||
End of period | $ | $ | $ | $ | |||||||||||||||||||
(in millions, except shares) | Common Stock Outstanding | Treasury Stock Outstanding | Treasury Shares at Cost | Par Value and Additional Paid-in Capital | Accumulated Other Comprehensive Loss | Accumulated Deficit | Total Stockholders' Equity | |||||||||||||||||||||||||||||||||||||
Balance as of June 30, 2022 | $ | ( | $ | $ | ( | $ | ( | $ | ||||||||||||||||||||||||||||||||||||
Net income | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||
Other comprehensive income | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||
Stock-based compensation | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||
Exercise of stock options | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||
Stock issued for employee stock purchase plan | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||
Issuance of vested restricted stock units | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||
Forfeiture of restricted stock awards | ( | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||
Shares withheld related to net share settlement of stock awards and stock options | ( | — | — | ( | — | — | ( | |||||||||||||||||||||||||||||||||||||
Repurchases of common stock | ( | ( | — | — | — | ( | ||||||||||||||||||||||||||||||||||||||
Transfers with NQDC plan | ( | — | — | — | ||||||||||||||||||||||||||||||||||||||||
Balance as of September 30, 2022 | $ | ( | $ | $ | ( | $ | ( | $ | ||||||||||||||||||||||||||||||||||||
Balance as of December 31, 2021 | $ | ( | $ | $ | ( | $ | ( | $ | ||||||||||||||||||||||||||||||||||||
Net income | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||
Other comprehensive income | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||
Stock-based compensation | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||
Exercise of stock options | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||
Stock issued for employee stock purchase plan | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||
Issuance of vested restricted stock units | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||
Forfeiture of restricted stock awards | ( | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||
Shares withheld related to net share settlement of stock awards and stock options | ( | — | — | ( | — | — | ( | |||||||||||||||||||||||||||||||||||||
Repurchases of common stock | ( | ( | — | — | — | ( | ||||||||||||||||||||||||||||||||||||||
Remeasurement of uncertain tax positions | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||
Transfers with NQDC plan | ( | ( | — | — | ||||||||||||||||||||||||||||||||||||||||
Balance as of September 30, 2022 | $ | ( | $ | $ | ( | $ | ( | $ | ||||||||||||||||||||||||||||||||||||
(in millions, except shares) | Common Stock Outstanding | Treasury Stock Outstanding | Treasury Shares at Cost | Par Value and Additional Paid-in Capital | Accumulated Other Comprehensive Loss | Accumulated Deficit | Total Stockholders' Equity | ||||||||||||||||||||||||||||||||||
Balance as of June 30, 2021 | $ | ( | $ | $ | ( | $ | ( | $ | |||||||||||||||||||||||||||||||||
Net income | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||
Other comprehensive income | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||
Stock-based compensation | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||
Exercise of stock options | — | — | — | — | |||||||||||||||||||||||||||||||||||||
Stock issued for employee stock purchase plan | — | — | — | — | |||||||||||||||||||||||||||||||||||||
Issuance of vested restricted stock units | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||
Shares withheld related to net share settlement of stock awards and stock options | ( | — | — | ( | — | — | ( | ||||||||||||||||||||||||||||||||||
Transfers with NQDC plan | ( | ( | — | — | |||||||||||||||||||||||||||||||||||||
Balance as of September 30, 2021 | $ | ( | $ | $ | ( | $ | ( | $ | |||||||||||||||||||||||||||||||||
Balance as of December 31, 2020 | $ | ( | $ | $ | ( | $ | ( | $ | |||||||||||||||||||||||||||||||||
Net income | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||
Other comprehensive income | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||
Stock-based compensation | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||
Exercise of stock options | — | — | — | — | |||||||||||||||||||||||||||||||||||||
Stock issued for employee stock purchase plan | — | — | — | — | |||||||||||||||||||||||||||||||||||||
Issuance of vested restricted stock units | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||
Shares withheld related to net share settlement of stock awards and stock options | ( | — | — | ( | — | — | ( | ||||||||||||||||||||||||||||||||||
Transfers with NQDC plan | ( | ( | — | — | |||||||||||||||||||||||||||||||||||||
Balance as of September 30, 2021 | $ | ( | $ | $ | ( | $ | ( | $ | |||||||||||||||||||||||||||||||||
(in millions) | September 30, 2022 | December 31, 2021 | |||||||||
EIP receivables, gross | $ | $ | |||||||||
Unamortized imputed discount | ( | ( | |||||||||
EIP receivables, net of unamortized imputed discount | |||||||||||
Allowance for credit losses | ( | ( | |||||||||
EIP receivables, net of allowance for credit losses and imputed discount | $ | $ | |||||||||
Classified on our condensed consolidated balance sheets as: | |||||||||||
Equipment installment plan receivables, net of allowance for credit losses and imputed discount | $ | $ | |||||||||
Equipment installment plan receivables due after one year, net of allowance for credit losses and imputed discount | |||||||||||
EIP receivables, net of allowance for credit losses and imputed discount | $ | $ | |||||||||
Originated in 2022 | Originated in 2021 | Originated prior to 2021 | Total EIP Receivables, net of unamortized imputed discounts | ||||||||||||||||||||||||||||||||||||||||||||||||||
(in millions) | Prime | Subprime | Prime | Subprime | Prime | Subprime | Prime | Subprime | Grand total | ||||||||||||||||||||||||||||||||||||||||||||
Current - 30 days past due | $ | $ | $ | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||||||||||||||
31 - 60 days past due | |||||||||||||||||||||||||||||||||||||||||||||||||||||
61 - 90 days past due | |||||||||||||||||||||||||||||||||||||||||||||||||||||
More than 90 days past due | |||||||||||||||||||||||||||||||||||||||||||||||||||||
EIP receivables, net of unamortized imputed discount | $ | $ | $ | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||||||||||||||
September 30, 2022 | September 30, 2021 | ||||||||||||||||||||||||||||||||||
(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 | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||
Bad debt expense | |||||||||||||||||||||||||||||||||||
Write-offs, net of recoveries | ( | ( | ( | ( | ( | ( | |||||||||||||||||||||||||||||
Change in imputed discount on short-term and long-term EIP receivables | N/A | N/A | |||||||||||||||||||||||||||||||||
Impact on the imputed discount from sales of EIP receivables | N/A | ( | ( | N/A | ( | ( | |||||||||||||||||||||||||||||
Allowance for credit losses and imputed discount, end of period | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||
(in millions) | September 30, 2022 | December 31, 2021 | |||||||||
Other current assets | $ | $ | |||||||||
Other assets | |||||||||||
(in millions) | September 30, 2022 | December 31, 2021 | |||||||||
Other current assets | $ | $ | |||||||||
Other current liabilities |
(in millions) | September 30, 2022 | December 31, 2021 | |||||||||
Derecognized net service accounts receivable and EIP receivables | $ | $ | |||||||||
Other current assets | |||||||||||
of which, deferred purchase price | |||||||||||
Other long-term assets | |||||||||||
of which, deferred purchase price | |||||||||||
Other current liabilities | |||||||||||
Net cash proceeds since inception | |||||||||||
Of which: | |||||||||||
Change in net cash proceeds during the year-to-date period | ( | ||||||||||
Net cash proceeds funded by reinvested collections | |||||||||||
(in millions) | 2022 | ||||
Spectrum licenses, beginning of year | $ | ||||
Spectrum license acquisitions | |||||
Spectrum licenses transferred to held for sale | ( | ||||
Costs to clear spectrum | |||||
Spectrum licenses, end of period | $ | ||||
Level within the Fair Value Hierarchy | September 30, 2022 | December 31, 2021 | |||||||||||||||||||||||||||
(in millions) | Carrying Amount (1) | Fair Value (1) | Carrying Amount (1) | Fair Value (1) | |||||||||||||||||||||||||
Liabilities: | |||||||||||||||||||||||||||||
Senior Notes to third parties (2) | 1 | $ | $ | $ | $ | ||||||||||||||||||||||||
Senior Notes to affiliates | 2 | ||||||||||||||||||||||||||||
Senior Secured Notes to third parties (2) | 1 | ||||||||||||||||||||||||||||
(in millions) | December 31, 2021 | Proceeds from Issuances and Borrowings (1) | Note Redemptions (1) | Repayments | Reclassifications (1) | Other (2) | September 30, 2022 | ||||||||||||||||||||||||||||||||||
Short-term debt | $ | $ | $ | ( | $ | ( | $ | $ | ( | $ | |||||||||||||||||||||||||||||||
Long-term debt | ( | ( | |||||||||||||||||||||||||||||||||||||||
Total debt to third parties | ( | ( | ( | ||||||||||||||||||||||||||||||||||||||
Short-term debt to affiliates | ( | ||||||||||||||||||||||||||||||||||||||||
Long-term debt to affiliates | |||||||||||||||||||||||||||||||||||||||||
Total debt | $ | $ | $ | ( | $ | ( | $ | $ | ( | $ |
(in millions) | Principal Issuances | Premiums/Discounts and Issuance Costs | Net Proceeds from Issuance of Long-Term Debt | Issue Date | |||||||||||||||||||
$ | $ | ( | $ | September 15, 2022 | |||||||||||||||||||
( | September 15, 2022 | ||||||||||||||||||||||
( | September 15, 2022 | ||||||||||||||||||||||
Total of Senior Notes issued | $ | $ | ( | $ | |||||||||||||||||||
(in millions) | Principal Amount | Redemption or Repayment Date | Redemption Price | ||||||||||||||
$ | March 16, 2022 | % | |||||||||||||||
March 16, 2022 | % | ||||||||||||||||
April 15, 2022 | N/A | ||||||||||||||||
Total Redemptions | $ | ||||||||||||||||
$ | Various | N/A | |||||||||||||||
Other debt | Various | N/A | |||||||||||||||
Total Repayments | $ |
Expected Maturities | |||||||||||
(in millions) | 2024 | 2025 | |||||||||
Class A Senior ABS Notes | $ | $ | |||||||||
(in millions) | September 30, 2022 | December 31, 2021 | |||||||||
Property and equipment, net | $ | $ | |||||||||
Tower obligations | |||||||||||
Other long-term liabilities |
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||
(in millions) | 2022 | 2021 | 2022 | 2021 | |||||||||||||||||||
Postpaid service revenues | |||||||||||||||||||||||
Postpaid phone revenues | $ | $ | $ | $ | |||||||||||||||||||
Postpaid other revenues | |||||||||||||||||||||||
Total postpaid service revenues | $ | $ | $ | $ | |||||||||||||||||||
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||
(in millions) | 2022 | 2021 | 2022 | 2021 | |||||||||||||||||||
Equipment revenues from the lease of mobile communication devices | $ | $ | $ | $ |
(in millions) | Contract Assets | Contract Liabilities | |||||||||
Balance as of December 31, 2021 | $ | $ | |||||||||
Balance as of September 30, 2022 | |||||||||||
Change | $ | $ | ( | ||||||||
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||
(in millions) | 2022 | 2021 | 2022 | 2021 | |||||||||||||||||||
Amounts included in the beginning of year contract liability balance | $ | $ | $ | $ |
(in millions) | September 30, 2022 | ||||
Assets | |||||
Cash and cash equivalents | $ | ||||
Accounts receivable, net | |||||
Prepaid expenses | |||||
Other current assets | |||||
Property and equipment, net | |||||
Operating lease right-of-use assets | |||||
Other intangible assets, net | |||||
Other assets | |||||
Remeasurement of disposal group held for sale to fair value less costs to sell (1) | ( | ||||
Assets held for sale | $ | ||||
Liabilities | |||||
Accounts payable and accrued liabilities | $ | ||||
Deferred revenue | |||||
Short-term operating lease liabilities | |||||
Operating lease liabilities | |||||
Other long-term liabilities | |||||
Liabilities held for sale | |||||
Liabilities held for sale, net | $ | ( | |||
in millions | Three and Nine Months Ended September 30, 2022 | ||||
Write-down of Wireline Business net assets | $ | ||||
Accrual of estimated costs to sell | |||||
Recognition of liability for IP transit services agreement (1) | |||||
Recognition of other obligations to Buyer to be paid at or after Closing | |||||
Loss on disposal group held for sale | $ | ||||
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||
(in millions, except shares and per share amounts) | 2022 | 2021 | 2022 | 2021 | |||||||||||||||||||
Net income | $ | $ | $ | $ | |||||||||||||||||||
Weighted-average shares outstanding – basic | |||||||||||||||||||||||
Effect of dilutive securities: | |||||||||||||||||||||||
Outstanding stock options and unvested stock awards | |||||||||||||||||||||||
Weighted-average shares outstanding – diluted | |||||||||||||||||||||||
Earnings per share – basic | $ | $ | $ | $ | |||||||||||||||||||
Earnings per share – diluted | |||||||||||||||||||||||
Potentially dilutive securities: | |||||||||||||||||||||||
Outstanding stock options and unvested stock awards | |||||||||||||||||||||||
SoftBank contingent consideration (1) | |||||||||||||||||||||||
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||
(in millions) | 2022 | 2021 | 2022 | 2021 | |||||||||||||||||||
Operating lease expense | $ | $ | $ | $ | |||||||||||||||||||
Financing lease expense: | |||||||||||||||||||||||
Amortization of right-of-use assets | |||||||||||||||||||||||
Interest on lease liabilities | |||||||||||||||||||||||
Total financing lease expense | |||||||||||||||||||||||
Variable lease expense | |||||||||||||||||||||||
Total lease expense | $ | $ | $ | $ | |||||||||||||||||||
(in millions) | Operating Leases | Finance Leases | |||||||||
Twelve Months Ending September 30, | |||||||||||
2023 | $ | $ | |||||||||
2024 | |||||||||||
2025 | |||||||||||
2026 | |||||||||||
2027 | |||||||||||
Thereafter | |||||||||||
Total lease payments | |||||||||||
Less: imputed interest | |||||||||||
Total | $ | $ | |||||||||
(in millions) | Three Months Ended September 30, 2022 | Nine Months Ended September 30, 2022 | Incurred to Date | ||||||||||||||
Contract termination costs | $ | $ | $ | ||||||||||||||
Severance costs | |||||||||||||||||
Network decommissioning | |||||||||||||||||
Total restructuring plan expenses | $ | $ | $ | ||||||||||||||
(in millions) | December 31, 2021 | Expenses Incurred | Cash Payments | Adjustments for Non-Cash Items (1) | September 30, 2022 | ||||||||||||||||||||||||
Contract termination costs | $ | $ | $ | ( | $ | $ | |||||||||||||||||||||||
Severance costs | ( | ||||||||||||||||||||||||||||
Network decommissioning | ( | ( | |||||||||||||||||||||||||||
Total | $ | $ | $ | ( | $ | ( | $ |
(in millions) | September 30, 2022 | December 31, 2021 | |||||||||
Accounts payable | $ | $ | |||||||||
Payroll and related benefits | |||||||||||
Property and other taxes, including payroll | |||||||||||
Accrued interest | |||||||||||
Commissions | |||||||||||
Toll and interconnect | |||||||||||
Other | |||||||||||
Accounts payable and accrued liabilities | $ | $ |
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||
(in millions) | 2022 | 2021 | 2022 | 2021 | |||||||||||||||||||
Interest payments, net of amounts capitalized | $ | $ | $ | $ | |||||||||||||||||||
Operating lease payments | |||||||||||||||||||||||
Income tax payments | |||||||||||||||||||||||
Non-cash investing and financing activities | |||||||||||||||||||||||
Non-cash beneficial interest obtained in exchange for securitized receivables | |||||||||||||||||||||||
Change in accounts payable and accrued liabilities for purchases of property and equipment | ( | ||||||||||||||||||||||
Leased devices transferred from inventory to property and equipment | |||||||||||||||||||||||
Returned leased devices transferred from property and equipment to inventory | ( | ( | ( | ( | |||||||||||||||||||
Increase in Tower obligations from contract modification | |||||||||||||||||||||||
Operating lease right-of-use assets obtained in exchange for lease obligations | |||||||||||||||||||||||
Financing lease right-of-use assets obtained in exchange for lease obligations |
(in millions) | September 30, 2022 | December 31, 2021 | |||||||||
Cash and cash equivalents | $ | $ | |||||||||
Cash and cash equivalents held for sale (included in Other current Assets) | |||||||||||
Restricted cash (included in Other assets) | |||||||||||
Cash and cash equivalents, including restricted cash and cash held for sale | $ | $ |
(in millions) | Three Months Ended September 30, | Change | Nine Months Ended September 30, | Change | |||||||||||||||||||||||||||||||||||||||||||
2022 | 2021 | $ | % | 2022 | 2021 | $ | % | ||||||||||||||||||||||||||||||||||||||||
Merger-related costs | |||||||||||||||||||||||||||||||||||||||||||||||
Cost of services, exclusive of depreciation and amortization | $ | 812 | $ | 279 | $ | 533 | 191 | % | $ | 2,380 | $ | 688 | $ | 1,692 | 246 | % | |||||||||||||||||||||||||||||||
Cost of equipment sales, exclusive of depreciation and amortization | 258 | 236 | 22 | 9 | % | 1,468 | 340 | 1,128 | 332 | % | |||||||||||||||||||||||||||||||||||||
Selling, general and administrative | 226 | 440 | (214) | (49) | % | 529 | 836 | (307) | (37) | % | |||||||||||||||||||||||||||||||||||||
Total Merger-related costs | $ | 1,296 | $ | 955 | $ | 341 | 36 | % | $ | 4,377 | $ | 1,864 | $ | 2,513 | 135 | % | |||||||||||||||||||||||||||||||
Net cash payments for Merger-related costs | $ | 942 | $ | 617 | $ | 325 | 53 | % | $ | 2,742 | $ | 1,084 | $ | 1,658 | 153 | % |
Three Months Ended September 30, | Change | Nine Months Ended September 30, | Change | ||||||||||||||||||||||||||||||||||||||||||||
(in millions) | 2022 | 2021 | $ | % | 2022 | 2021 | $ | % | |||||||||||||||||||||||||||||||||||||||
Revenues | |||||||||||||||||||||||||||||||||||||||||||||||
Postpaid revenues | $ | 11,548 | $ | 10,804 | $ | 744 | 7 | % | $ | 34,194 | $ | 31,599 | $ | 2,595 | 8 | % | |||||||||||||||||||||||||||||||
Prepaid revenues | 2,484 | 2,481 | 3 | — | % | 7,408 | 7,259 | 149 | 2 | % | |||||||||||||||||||||||||||||||||||||
Wholesale and other service revenues | 1,329 | 1,437 | (108) | (8) | % | 4,203 | 4,548 | (345) | (8) | % | |||||||||||||||||||||||||||||||||||||
Total service revenues | 15,361 | 14,722 | 639 | 4 | % | 45,805 | 43,406 | 2,399 | 6 | % | |||||||||||||||||||||||||||||||||||||
Equipment revenues | 3,855 | 4,660 | (805) | (17) | % | 12,679 | 15,221 | (2,542) | (17) | % | |||||||||||||||||||||||||||||||||||||
Other revenues | 261 | 242 | 19 | 8 | % | 814 | 706 | 108 | 15 | % | |||||||||||||||||||||||||||||||||||||
Total revenues | 19,477 | 19,624 | (147) | (1) | % | 59,298 | 59,333 | (35) | — | % | |||||||||||||||||||||||||||||||||||||
Operating expenses | |||||||||||||||||||||||||||||||||||||||||||||||
Cost of services, exclusive of depreciation and amortization shown separately below | 3,712 | 3,538 | 174 | 5 | % | 11,499 | 10,413 | 1,086 | 10 | % | |||||||||||||||||||||||||||||||||||||
Cost of equipment sales, exclusive of depreciation and amortization shown separately below | 4,982 | 5,145 | (163) | (3) | % | 16,036 | 15,740 | 296 | 2 | % | |||||||||||||||||||||||||||||||||||||
Selling, general and administrative | 5,118 | 5,212 | (94) | (2) | % | 16,030 | 14,840 | 1,190 | 8 | % | |||||||||||||||||||||||||||||||||||||
Impairment expense | — | — | — | NM | 477 | — | 477 | NM | |||||||||||||||||||||||||||||||||||||||
Loss on disposal group held for sale | 1,071 | — | 1,071 | NM | 1,071 | — | 1,071 | NM | |||||||||||||||||||||||||||||||||||||||
Depreciation and amortization | 3,313 | 4,145 | (832) | (20) | % | 10,389 | 12,511 | (2,122) | (17) | % | |||||||||||||||||||||||||||||||||||||
Total operating expenses | 18,196 | 18,040 | 156 | 1 | % | 55,502 | 53,504 | 1,998 | 4 | % | |||||||||||||||||||||||||||||||||||||
Operating income | 1,281 | 1,584 | (303) | (19) | % | 3,796 | 5,829 | (2,033) | (35) | % | |||||||||||||||||||||||||||||||||||||
Other expense, net | |||||||||||||||||||||||||||||||||||||||||||||||
Interest expense, net | (827) | (836) | 9 | (1) | % | (2,542) | (2,521) | (21) | 1 | % | |||||||||||||||||||||||||||||||||||||
Other expense, net | (3) | (60) | 57 | (95) | % | (35) | (186) | 151 | (81) | % | |||||||||||||||||||||||||||||||||||||
Total other expense, net | (830) | (896) | 66 | (7) | % | (2,577) | (2,707) | 130 | (5) | % | |||||||||||||||||||||||||||||||||||||
Income before income taxes | 451 | 688 | (237) | (34) | % | 1,219 | 3,122 | (1,903) | (61) | % | |||||||||||||||||||||||||||||||||||||
Income tax benefit (expense) | 57 | 3 | 54 | NM | (106) | (520) | 414 | (80) | % | ||||||||||||||||||||||||||||||||||||||
Net income | $ | 508 | $ | 691 | $ | (183) | (26) | % | $ | 1,113 | $ | 2,602 | $ | (1,489) | (57) | % | |||||||||||||||||||||||||||||||
Statement of Cash Flows Data | |||||||||||||||||||||||||||||||||||||||||||||||
Net cash provided by operating activities | $ | 4,391 | $ | 3,477 | $ | 914 | 26 | % | $ | 12,445 | $ | 10,917 | $ | 1,528 | 14 | % | |||||||||||||||||||||||||||||||
Net cash used in investing activities | (2,555) | (4,152) | 1,597 | (38) | % | (10,206) | (17,474) | 7,268 | (42) | % | |||||||||||||||||||||||||||||||||||||
Net cash provided by (used in) financing activities | 1,927 | (3,060) | 4,987 | (163) | % | (1,953) | 237 | (2,190) | NM | ||||||||||||||||||||||||||||||||||||||
Non-GAAP Financial Measures | |||||||||||||||||||||||||||||||||||||||||||||||
Adjusted EBITDA | 7,039 | 6,811 | 228 | 3 | % | 20,993 | 20,622 | 371 | 2 | % | |||||||||||||||||||||||||||||||||||||
Core Adjusted EBITDA | 6,728 | 6,041 | 687 | 11 | % | 19,809 | 17,897 | 1,912 | 11 | % | |||||||||||||||||||||||||||||||||||||
Free Cash Flow | 2,065 | 1,559 | 506 | 32 | % | 5,472 | 4,534 | 938 | 21 | % | |||||||||||||||||||||||||||||||||||||
(in millions) | September 30, 2022 | December 31, 2021 | |||||||||
Current assets | $ | 20,131 | $ | 19,522 | |||||||
Noncurrent assets | 181,426 | 174,980 | |||||||||
Current liabilities | 24,836 | 22,195 | |||||||||
Noncurrent liabilities | 119,797 | 115,126 | |||||||||
Due to non-guarantors | 8,171 | 8,208 | |||||||||
Due to related parties | 1,535 | 3,842 | |||||||||
Nine Months Ended September 30, 2022 | Year Ended December 31, 2021 | ||||||||||
(in millions) | |||||||||||
Total revenues | $ | 57,423 | $ | 78,538 | |||||||
Operating income | 1,144 | 3,835 | |||||||||
Net (loss) income | (1,178) | 402 | |||||||||
Revenue from non-guarantors | 1,823 | 1,769 | |||||||||
Operating expenses to non-guarantors | 1,981 | 2,655 | |||||||||
Other expense to non-guarantors | (192) | (148) | |||||||||
(in millions) | September 30, 2022 | December 31, 2021 | |||||||||
Current assets | $ | 12,020 | $ | 11,969 | |||||||
Noncurrent assets | 9,661 | 10,347 | |||||||||
Current liabilities | 17,394 | 15,136 | |||||||||
Noncurrent liabilities | 62,408 | 70,262 | |||||||||
Due to non-guarantors | 923 | — | |||||||||
Due from non-guarantors | — | 1,787 | |||||||||
Due to related parties | 1,535 | 3,842 | |||||||||
Nine Months Ended September 30, 2022 | Year Ended December 31, 2021 | ||||||||||
(in millions) | |||||||||||
Total revenues | $ | 5 | $ | 7 | |||||||
Operating loss | (2,805) | (751) | |||||||||
Net income (loss) | 3,382 | (2,161) | |||||||||
Other income, net, from non-guarantors | 603 | 1,706 | |||||||||
(in millions) | September 30, 2022 | December 31, 2021 | |||||||||
Current assets | $ | 12,020 | $ | 11,969 | |||||||
Noncurrent assets | 17,733 | 19,375 | |||||||||
Current liabilities | 17,465 | 15,208 | |||||||||
Noncurrent liabilities | 66,871 | 75,753 | |||||||||
Due from non-guarantors | 8,072 | 10,814 | |||||||||
Due to related parties | 1,535 | 3,842 | |||||||||
Nine Months Ended September 30, 2022 | Year Ended December 31, 2021 | ||||||||||
(in millions) | |||||||||||
Total revenues | $ | 5 | $ | 7 | |||||||
Operating loss | (2,805) | (751) | |||||||||
Net income (loss) | 3,456 | (2,590) | |||||||||
Other income, net, from non-guarantors | 900 | 2,076 | |||||||||
As of September 30, | Change | ||||||||||||||||||||||
(in thousands) | 2022 | 2021 | # | % | |||||||||||||||||||
Total postpaid customer accounts (1) (2) | 28,212 | 26,901 | 1,311 | 5 | % |
Three Months Ended September 30, | Change | Nine Months Ended September 30, | Change | ||||||||||||||||||||||||||||||||||||||||||||
(in thousands) | 2022 | 2021 | # | % | 2022 | 2021 | # | % | |||||||||||||||||||||||||||||||||||||||
Postpaid net account additions | 394 | 268 | 126 | 47 | % | 1,122 | 873 | 249 | 29 | % |
As of September 30, | Change | ||||||||||||||||||||||
(in thousands) | 2022 | 2021 | # | % | |||||||||||||||||||
Customers, end of period | |||||||||||||||||||||||
Postpaid phone customers (1) (2) | 71,907 | 69,418 | 2,489 | 4 | % | ||||||||||||||||||
Postpaid other customers (1) (2) | 18,507 | 16,495 | 2,012 | 12 | % | ||||||||||||||||||
Total postpaid customers | 90,414 | 85,913 | 4,501 | 5 | % | ||||||||||||||||||
Prepaid customers (1) | 21,341 | 21,007 | 334 | 2 | % | ||||||||||||||||||
Total customers | 111,755 | 106,920 | 4,835 | 5 | % | ||||||||||||||||||
Adjustments to customers (1) (2) | (1,878) | 818 | (2,696) | NM | |||||||||||||||||||
Three Months Ended September 30, | Change | Nine Months Ended September 30, | Change | ||||||||||||||||||||||||||||||||||||||||||||
(in thousands) | 2022 | 2021 | # | % | 2022 | 2021 | # | % | |||||||||||||||||||||||||||||||||||||||
Net customer additions | |||||||||||||||||||||||||||||||||||||||||||||||
Postpaid phone customers | 854 | 673 | 181 | 27 | % | 2,166 | 2,073 | 93 | 4 | % | |||||||||||||||||||||||||||||||||||||
Postpaid other customers | 773 | 586 | 187 | 32 | % | 2,435 | 1,672 | 763 | 46 | % | |||||||||||||||||||||||||||||||||||||
Total postpaid customers | 1,627 | 1,259 | 368 | 29 | % | 4,601 | 3,745 | 856 | 23 | % | |||||||||||||||||||||||||||||||||||||
Prepaid customers | 105 | 66 | 39 | 59 | % | 313 | 293 | 20 | 7 | % | |||||||||||||||||||||||||||||||||||||
Total customers | 1,732 | 1,325 | 407 | 31 | % | 4,914 | 4,038 | 876 | 22 | % | |||||||||||||||||||||||||||||||||||||
Adjustments to customers | — | 806 | (806) | (100) | % | (1,878) | 818 | (2,696) | NM | ||||||||||||||||||||||||||||||||||||||
Three Months Ended September 30, | Change | Nine Months Ended September 30, | Change | ||||||||||||||||||||||||||||||||
2022 | 2021 | 2022 | 2021 | ||||||||||||||||||||||||||||||||
Postpaid phone churn | 0.88 | % | 0.96 | % | -8 bps | 0.87 | % | 0.93 | % | -6 bps | |||||||||||||||||||||||||
Prepaid churn | 2.88 | % | 2.90 | % | -2 bps | 2.71 | % | 2.76 | % | -5 bps | |||||||||||||||||||||||||
(in dollars) | Three Months Ended September 30, | Change | Nine Months Ended September 30, | Change | |||||||||||||||||||||||||||||||||||||||||||
2022 | 2021 | $ | % | 2022 | 2021 | $ | % | ||||||||||||||||||||||||||||||||||||||||
Postpaid ARPA | $ | 137.49 | $ | 134.54 | $ | 2.95 | 2 | % | $ | 137.32 | $ | 133.68 | $ | 3.64 | 3 | % |
(in dollars) | Three Months Ended September 30, | Change | Nine Months Ended September 30, | Change | |||||||||||||||||||||||||||||||||||||||||||
2022 | 2021 | $ | % | 2022 | 2021 | $ | % | ||||||||||||||||||||||||||||||||||||||||
Postpaid phone ARPU | $ | 48.89 | $ | 48.06 | $ | 0.83 | 2 | % | $ | 48.75 | $ | 47.66 | $ | 1.09 | 2 | % | |||||||||||||||||||||||||||||||
Prepaid ARPU | 38.86 | 39.49 | (0.63) | (2) | % | 38.92 | 38.61 | 0.31 | 1 | % | |||||||||||||||||||||||||||||||||||||
Three Months Ended September 30, | Change | Nine Months Ended September 30, | Change | ||||||||||||||||||||||||||||||||||||||||||||
(in millions) | 2022 | 2021 | $ | % | 2022 | 2021 | $ | % | |||||||||||||||||||||||||||||||||||||||
Net income | $ | 508 | $ | 691 | $ | (183) | (26) | % | $ | 1,113 | $ | 2,602 | $ | (1,489) | (57) | % | |||||||||||||||||||||||||||||||
Adjustments: | |||||||||||||||||||||||||||||||||||||||||||||||
Interest expense, net | 827 | 836 | (9) | (1) | % | 2,542 | 2,521 | 21 | 1 | % | |||||||||||||||||||||||||||||||||||||
Other expense, net | 3 | 60 | (57) | (95) | % | 35 | 186 | (151) | (81) | % | |||||||||||||||||||||||||||||||||||||
Income tax (benefit) expense | (57) | (3) | (54) | NM | 106 | 520 | (414) | (80) | % | ||||||||||||||||||||||||||||||||||||||
Operating income | 1,281 | 1,584 | (303) | (19) | % | 3,796 | 5,829 | (2,033) | (35) | % | |||||||||||||||||||||||||||||||||||||
Depreciation and amortization | 3,313 | 4,145 | (832) | (20) | % | 10,389 | 12,511 | (2,122) | (17) | % | |||||||||||||||||||||||||||||||||||||
Stock-based compensation (1) | 145 | 127 | 18 | 14 | % | 430 | 386 | 44 | 11 | % | |||||||||||||||||||||||||||||||||||||
Merger-related costs | 1,296 | 955 | 341 | 36 | % | 4,377 | 1,864 | 2,513 | 135 | % | |||||||||||||||||||||||||||||||||||||
Impairment expense | — | — | — | NM | 477 | — | 477 | NM | |||||||||||||||||||||||||||||||||||||||
Legal-related (recoveries) expenses, net (2) | (19) | — | (19) | NM | 381 | — | 381 | NM | |||||||||||||||||||||||||||||||||||||||
Loss on disposal group held for sale | 1,071 | — | 1,071 | NM | 1,071 | — | 1,071 | NM | |||||||||||||||||||||||||||||||||||||||
Other, net (3) | (48) | — | (48) | NM | 72 | 32 | 40 | 125 | % | ||||||||||||||||||||||||||||||||||||||
Adjusted EBITDA | 7,039 | 6,811 | 228 | 3 | % | 20,993 | 20,622 | 371 | 2 | % | |||||||||||||||||||||||||||||||||||||
Lease revenues | (311) | (770) | 459 | (60) | % | (1,184) | (2,725) | 1,541 | (57) | % | |||||||||||||||||||||||||||||||||||||
Core Adjusted EBITDA | $ | 6,728 | $ | 6,041 | $ | 687 | 11 | % | $ | 19,809 | $ | 17,897 | $ | 1,912 | 11 | % | |||||||||||||||||||||||||||||||
Net income margin (Net income divided by Service revenues) | 3 | % | 5 | % | -200 bps | 2 | % | 6 | % | -400 bps | |||||||||||||||||||||||||||||||||||||
Adjusted EBITDA margin (Adjusted EBITDA divided by Service revenues) | 46 | % | 46 | % | — bps | 46 | % | 48 | % | -200 bps | |||||||||||||||||||||||||||||||||||||
Core Adjusted EBITDA margin (Core Adjusted EBITDA divided by Service revenues) | 44 | % | 41 | % | 300 bps | 43 | % | 41 | % | 200 bps | |||||||||||||||||||||||||||||||||||||
Three Months Ended September 30, | Change | Nine Months Ended September 30, | Change | ||||||||||||||||||||||||||||||||||||||||||||
(in millions) | 2022 | 2021 | $ | % | 2022 | 2021 | $ | % | |||||||||||||||||||||||||||||||||||||||
Net cash provided by operating activities | $ | 4,391 | $ | 3,477 | $ | 914 | 26 | % | $ | 12,445 | $ | 10,917 | $ | 1,528 | 14 | % | |||||||||||||||||||||||||||||||
Net cash used in investing activities | (2,555) | (4,152) | 1,597 | (38) | % | (10,206) | (17,474) | 7,268 | (42) | % | |||||||||||||||||||||||||||||||||||||
Net cash provided by (used in) financing activities | 1,927 | (3,060) | 4,987 | (163) | % | (1,953) | 237 | (2,190) | (924) | % | |||||||||||||||||||||||||||||||||||||
Three Months Ended September 30, | Change | Nine Months Ended September 30, | Change | ||||||||||||||||||||||||||||||||||||||||||||
(in millions) | 2022 | 2021 | $ | % | 2022 | 2021 | $ | % | |||||||||||||||||||||||||||||||||||||||
Net cash provided by operating activities | $ | 4,391 | $ | 3,477 | $ | 914 | 26 | % | $ | 12,445 | $ | 10,917 | $ | 1,528 | 14 | % | |||||||||||||||||||||||||||||||
Cash purchases of property and equipment, including capitalized interest | (3,634) | (2,944) | (690) | 23 | % | (10,587) | (9,397) | (1,190) | 13 | % | |||||||||||||||||||||||||||||||||||||
Proceeds from sales of tower sites | — | — | — | NM | — | 31 | (31) | (100) | % | ||||||||||||||||||||||||||||||||||||||
Proceeds related to beneficial interests in securitization transactions | 1,308 | 1,071 | 237 | 22 | % | 3,614 | 3,099 | 515 | 17 | % | |||||||||||||||||||||||||||||||||||||
Cash payments for debt prepayment or debt extinguishment costs | — | (45) | 45 | (100) | % | — | (116) | 116 | (100) | % | |||||||||||||||||||||||||||||||||||||
Free Cash Flow | $ | 2,065 | $ | 1,559 | $ | 506 | 32 | % | $ | 5,472 | $ | 4,534 | $ | 938 | 21 | % | |||||||||||||||||||||||||||||||
(in millions, except share and per share amounts) | Total Number of Shares Purchased | Average Price Paid per Share | Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs | Approximate Dollar Value of Shares that may yet be Purchased Under the Plans or Programs (1) | |||||||||||||||||||
July 1, 2022 - July 31, 2022 | — | — | — | — | |||||||||||||||||||
August 1, 2022 - August 31, 2022 | — | — | — | — | |||||||||||||||||||
September 1, 2022 - September 30, 2022 | 4,892,315 | $ | 136.65 | 4,892,315 | $ | 13,331 | |||||||||||||||||
Total | 4,892,315 | 4,892,315 |
Incorporated by Reference | ||||||||||||||||||||||||||||||||
Exhibit No. | Exhibit Description | Form | Date of First Filing | Exhibit Number | Filed Herein | |||||||||||||||||||||||||||
2.1* | 8-K | 9/7/2022 | 2.1 | |||||||||||||||||||||||||||||
4.1 | 8-K | 9/15/2022 | 4.1 | |||||||||||||||||||||||||||||
4.2 | 8-K | 9/15/2022 | 4.2 | |||||||||||||||||||||||||||||
4.3 | 8-K | 9/15/2022 | 4.3 | |||||||||||||||||||||||||||||
4.4 | 8-K | 9/15/2022 | 4.4 | |||||||||||||||||||||||||||||
10.1* | X | |||||||||||||||||||||||||||||||
10.2* | X | |||||||||||||||||||||||||||||||
10.3* | 8-K | 8/22/2022 | 10.1 | |||||||||||||||||||||||||||||
22.1 | X | |||||||||||||||||||||||||||||||
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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. | X | ||||||||||||||||||||||||||||||
104 | Cover Page Interactive Data File (the cover page XBRL tags) |
* | Schedules or similar attachments to this exhibit have been omitted pursuant to Item 601(a)(5) of Regulation S-K, and portions of this exhibit that are not material and that the registrant customarily and actually treats as private or confidential have been omitted pursuant to Item 601(b)(10)(iv) of Regulation S-K. | |||||||
** | Furnished herein. | |||||||
SIGNATURES |
T-MOBILE US, INC. | |||||||||||
October 27, 2022 | /s/ Peter Osvaldik | ||||||||||
Peter Osvaldik | |||||||||||
Executive Vice President and Chief Financial Officer | |||||||||||
(Principal Financial Officer and Authorized Signatory) |
LICENSE PURCHASE AGREEMENT by and among T-MOBILE USA, INC., T-MOBILE LICENSE LLC, and CHANNEL 51 LICENSE CO LLC Dated as of August 8, 2022 |
FCC Callsign | Market Number - Market Name | Block | Service | Licensee/Seller | Purchase Price Allocation* | ||||||||||||
WRCQ549 | PEA010 - Houston, TX | E | 600 MHz | Channel 51 License Co LLC | |||||||||||||
WRCQ550 | PEA010 - Houston, TX | F | 600 MHz | Channel 51 License Co LLC | |||||||||||||
WRCQ551 | PEA003 - Chicago, IL | E | 600 MHz | Channel 51 License Co LLC | |||||||||||||
WRCQ552 | PEA003 - Chicago, IL | F | 600 MHz | Channel 51 License Co LLC | |||||||||||||
WRCQ553 | PEA002 - Los Angeles, CA | F | 600 MHz | Channel 51 License Co LLC | |||||||||||||
WRCQ554 | PEA036 - New Orleans, LA | E | 600 MHz | Channel 51 License Co LLC | |||||||||||||
WRCQ555 | PEA007 - Boston, MA | D | 600 MHz | Channel 51 License Co LLC | |||||||||||||
WRCQ556 | PEA007 - Boston, MA | E | 600 MHz | Channel 51 License Co LLC |
LICENSE PURCHASE AGREEMENT by and among T-MOBILE USA, INC., T-MOBILE LICENSE LLC, and LB LICENSE CO, LLC Dated as of August 8, 2022 |
FCC Callsign | Market Number - Market Name | Block | Service | Licensee/Seller | Purchase Price Allocation* | ||||||||||||
WQZM718 | PEA024 - Saint Louis, MO | A | 600 MHz | LB License Co, LLC | |||||||||||||
WQZM719 | PEA024 - Saint Louis, MO | B | 600 MHz | LB License Co, LLC | |||||||||||||
WQZM720 | PEA027 - Salt Lake City, UT | D | 600 MHz | LB License Co, LLC | |||||||||||||
WQZM721 | PEA011 - Atlanta, GA | D | 600 MHz | LB License Co, LLC | |||||||||||||
WQZM724 | PEA004 - San Francisco, CA | D | 600 MHz | LB License Co, LLC | |||||||||||||
WQZM726 | PEA021 - Tampa, FL | E | 600 MHz | LB License Co, LLC | |||||||||||||
WQZM728 | PEA037 - Columbus, OH | A | 600 MHz | LB License Co, LLC | |||||||||||||
WQZM729 | PEA037 - Columbus, OH | B | 600 MHz | LB License Co, LLC | |||||||||||||
WQZM731 | PEA017 - Minneapolis-St. Paul, MN | E | 600 MHz | LB License Co, LLC | |||||||||||||
WQZM732 | PEA016 - Seattle, WA | E | 600 MHz | LB License Co, LLC | |||||||||||||
WQZM733 | PEA006 - Philadelphia, PA | E | 600 MHz | LB License Co, LLC | |||||||||||||
WQZM734 | PEA005 - Baltimore, MD-Washington, DC | E | 600 MHz | LB License Co, LLC | |||||||||||||
WQZM735 | PEA008 - Dallas, TX | C | 600 MHz | LB License Co, LLC | |||||||||||||
WQZM736 | PEA008 - Dallas, TX | D | 600 MHz | LB License Co, LLC | |||||||||||||
WQZM737 | PEA008 - Dallas, TX | E | 600 MHz | LB License Co, LLC | |||||||||||||
WQZM740 | PEA015 - Phoenix, AZ | E | 600 MHz | LB License Co, LLC |
Description of Notes | ||
3.500% senior notes due 2025 | ||
1.500% senior notes due 2026 | ||
2.250% senior notes due 2026 | ||
2.625% senior notes due 2026 | ||
3.750% senior notes due 2027 | ||
5.375% senior notes due 2027 | ||
4.750% senior notes due 2028 | ||
4.750% senior notes due 2028-1 held by affiliate | ||
2.050% senior notes due 2028 | ||
2.625% senior notes due 2029 | ||
2.400% senior notes due 2029 | ||
3.375% senior notes due 2029 | ||
3.875% senior notes due 2030 | ||
2.550% senior notes due 2031 | ||
2.875% senior notes due 2031 | ||
3.500% senior notes due 2031 | ||
2.250% senior notes due 2031 | ||
2.700% senior notes due 2032 | ||
5.200% senior notes due 2033 | ||
4.375% senior notes due 2040 | ||
3.000% senior notes due 2041 | ||
4.500% senior notes due 2050 | ||
3.300% senior notes due 2051 | ||
3.400% senior notes due 2052 | ||
5.650% senior notes due 2053 | ||
3.600% senior notes due 2060 | ||
5.800% senior notes due 2062 |
Description of Notes | ||
7.875% senior notes due 2023 | ||
7.125% senior notes due 2024 | ||
7.625% senior notes due 2025 | ||
7.625% senior notes due 2026 |
Description of Notes | ||
6.000% senior notes due 2022 |
Description of Notes | ||
6.875% senior notes due 2028 | ||
8.750% senior notes due 2032 |
Description of Notes | ||
4.738% Series 2018-1 A-1 Notes due 2025 | ||
5.152% Series 2018-1 A-2 Notes due 2028 |
Name of Subsidiary | Jurisdiction of Organization | Obligor Type | ||||||
American Telecasting of Seattle, LLC | Delaware | Guarantor | ||||||
APC Realty and Equipment Company, LLC | Delaware | Guarantor | ||||||
Assurance Wireless of South Carolina, LLC | Delaware | Guarantor | ||||||
Assurance Wireless USA, L.P. | Delaware | Guarantor | ||||||
ATI Sub, LLC | Delaware | Guarantor | ||||||
Clear Wireless LLC | Nevada | Guarantor | ||||||
Clearwire Communications LLC | Delaware | Guarantor | ||||||
Clearwire Hawaii Partners Spectrum, LLC | Nevada | Guarantor | ||||||
Clearwire Legacy LLC | Delaware | Guarantor | ||||||
Clearwire Spectrum Holdings II LLC | Nevada | Guarantor | ||||||
Clearwire Spectrum Holdings III LLC | Nevada | Guarantor | ||||||
Clearwire Spectrum Holdings LLC | Nevada | Guarantor | ||||||
Clearwire XOHM LLC | Delaware | Guarantor | ||||||
Fixed Wireless Holdings, LLC | Delaware | Guarantor | ||||||
IBSV LLC | Delaware | Guarantor | ||||||
MetroPCS California, LLC | Delaware | Guarantor | ||||||
MetroPCS Florida, LLC | Delaware | Guarantor | ||||||
MetroPCS Georgia, LLC | Delaware | Guarantor | ||||||
MetroPCS Massachusetts, LLC | Delaware | Guarantor | ||||||
MetroPCS Michigan, LLC | Delaware | Guarantor | ||||||
MetroPCS Nevada, LLC | Delaware | Guarantor | ||||||
MetroPCS New York, LLC | Delaware | Guarantor | ||||||
MetroPCS Pennsylvania, LLC | Delaware | Guarantor | ||||||
MetroPCS Texas, LLC | Delaware | Guarantor | ||||||
Nextel Retail Stores, LLC | Delaware | Guarantor | ||||||
Nextel South Corp. | Georgia | Guarantor | ||||||
Nextel Systems, LLC | Delaware | Guarantor | ||||||
Nextel West Corp. | Delaware | Guarantor | ||||||
NSAC, LLC | Delaware | Guarantor | ||||||
PCTV Gold II, LLC | Delaware | Guarantor | ||||||
People’s Choice TV of Houston, LLC | Delaware | Guarantor | ||||||
PRWireless PR, LLC | Delaware | Guarantor | ||||||
PushSpring, LLC | Delaware | Guarantor | ||||||
SIHI New Zealand Holdco, Inc. | Kansas | Guarantor | ||||||
Sprint Capital Corporation | Delaware | Guarantor | ||||||
Sprint Communications LLC | Kansas | Guarantor | ||||||
Sprint Communications Company L.P. | Delaware | Guarantor |
Sprint Communications Company of New Hampshire, Inc. | New Hampshire | Guarantor | ||||||
Sprint Communications Company of Virginia, Inc. | Virginia | Guarantor | ||||||
Sprint International Communications Corporation | Delaware | Guarantor | ||||||
Sprint International Holding, Inc. | Kansas | Guarantor | ||||||
Sprint International Incorporated | Delaware | Guarantor | ||||||
Sprint International Network Company LLC | Delaware | Guarantor | ||||||
Sprint LLC | Delaware | Guarantor | ||||||
Sprint PCS Assets, L.L.C. | Delaware | Guarantor | ||||||
Sprint Solutions, Inc. | Delaware | Guarantor | ||||||
Sprint Spectrum LLC | Delaware | Guarantor | ||||||
Sprint Spectrum Realty Company, LLC | Delaware | Guarantor | ||||||
Sprint/United Management Company | Kansas | Guarantor | ||||||
SprintCom LLC | Kansas | Guarantor | ||||||
T-Mobile Central LLC | Delaware | Guarantor | ||||||
T-Mobile Financial LLC | Delaware | Guarantor | ||||||
T-Mobile Innovations LLC | Delaware | Guarantor | ||||||
T-Mobile Leasing LLC | Delaware | Guarantor | ||||||
T-Mobile License LLC | Delaware | Guarantor | ||||||
T-Mobile Northeast LLC | Delaware | Guarantor | ||||||
T-Mobile Puerto Rico Holdings LLC | Delaware | Guarantor | ||||||
T-Mobile Puerto Rico LLC | Delaware | Guarantor | ||||||
T-Mobile Resources LLC | Delaware | Guarantor | ||||||
T-Mobile South LLC | Delaware | Guarantor | ||||||
T-Mobile USA, Inc. | Delaware | Issuer | ||||||
T-Mobile West LLC | Delaware | Guarantor | ||||||
TDI Acquisition Sub, LLC | Delaware | Guarantor | ||||||
TMUS International LLC | Delaware | Guarantor | ||||||
TVN Ventures LLC | Delaware | Guarantor | ||||||
USST of Texas, Inc. | Texas | Guarantor | ||||||
Utelcom LLC | Kansas | Guarantor | ||||||
VMU GP, LLC | Delaware | Guarantor | ||||||
WBSY Licensing, LLC | Delaware | Guarantor | ||||||
Wireline Leasing Co., Inc. | Delaware | Guarantor |
/s/ G. Michael Sievert | ||
G. Michael Sievert Chief Executive Officer |
/s/ Peter Osvaldik | ||
Peter Osvaldik Executive Vice President and Chief Financial Officer |
/s/ G. Michael Sievert | ||
G. Michael Sievert Chief Executive Officer |
/s/ Peter Osvaldik | ||
Peter Osvaldik Executive Vice President and Chief Financial Officer |
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Condensed Consolidated Balance Sheets (Unaudited) (Parenthetical) - USD ($) $ in Millions |
Sep. 30, 2022 |
Dec. 31, 2021 |
---|---|---|
Statement of Financial Position [Abstract] | ||
Allowance for credit losses | $ 161 | $ 146 |
Allowance for credit losses and imputed discount current | 624 | 494 |
Allowance for credit losses and imputed discount noncurrent | $ 125 | $ 136 |
Common stock, par value (in USD per share) | $ 0.00001 | $ 0.00001 |
Common stock, shares authorized (in shares) | 2,000,000,000 | 2,000,000,000 |
Common stock, shares issued (in shares) | 1,256,555,323 | 1,250,751,148 |
Common stock, shares outstanding (in shares) | 1,250,104,426 | 1,249,213,681 |
Treasury stock, at cost (in shares) | 6,450,896 | 1,537,468 |
Condensed Consolidated Statements of Comprehensive Income (Unaudited) (Parenthetical) - USD ($) $ in Millions |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2022 |
Sep. 30, 2021 |
Sep. 30, 2022 |
Sep. 30, 2021 |
|
Income Statement [Abstract] | ||||
Cash flow hedges, tax effect | $ 13 | $ 12 | $ 39 | $ 36 |
Foreign currency translation adjustment, tax effect | $ 0 | $ 0 | $ (1) | $ 0 |
Condensed Consolidated Statements of Cash Flows (Unaudited) (Parenthetical) - USD ($) $ in Millions |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2022 |
Sep. 30, 2021 |
Sep. 30, 2022 |
Sep. 30, 2021 |
|
Statement of Cash Flows [Abstract] | ||||
Capitalized interest | $ (16) | $ (46) | $ (44) | $ (187) |
Summary of Significant Accounting Policies |
9 Months Ended |
---|---|
Sep. 30, 2022 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Summary of Significant Accounting Policies | Note 1 – Summary of Significant Accounting Policies Basis of Presentation The unaudited condensed consolidated financial statements of T-Mobile US, Inc. (“T-Mobile,” “we,” “our,” “us” or the “Company”) include all adjustments of a normal recurring nature necessary for the fair presentation of the results for the interim periods presented. The results for the interim periods are not necessarily indicative of those for the full year. The condensed consolidated financial statements should be read in conjunction with our consolidated financial statements included in our Annual Report on Form 10-K for the year ended December 31, 2021. On September 6, 2022, Sprint Communications LLC, a Kansas limited liability company and wholly owned subsidiary of the Company (“Sprint Communications”), Sprint LLC, a Delaware limited liability company and wholly owned subsidiary of the Company, and Cogent Infrastructure, Inc., a Delaware corporation (the “Buyer”) and a wholly owned subsidiary of Cogent Communications Holdings, Inc., entered into a Membership Interest Purchase Agreement (the “Purchase Agreement”), pursuant to which the Buyer will acquire the U.S. long-haul fiber network and operations (including the non-U.S. extensions thereof) of Sprint Communications and its subsidiaries (the “Wireline Business”). The assets and liabilities of the Wireline Business disposal group are classified as held for sale and presented within Other current assets and Other current liabilities on our Condensed Consolidated Balance Sheets as of September 30, 2022. The fair value of the Wireline Business disposal group, less costs to sell, will be reassessed during each reporting period it remains classified as held for sale, and any remeasurement to the lower of carrying amount or fair value less costs to sell will be reported as an adjustment included within Loss on disposal group held for sale on our Condensed Consolidated Statements of Comprehensive Income. Unless otherwise specified, the amounts and information presented in the Notes to the Condensed Consolidated Financial Statements include assets and liabilities that have been reclassified as held for sale as of September 30, 2022. On September 8, 2022, our Board of Directors authorized a stock repurchase program for up to $14.0 billion of our common stock through September 30, 2023 (the “2022 Stock Repurchase Program”). The cost of repurchased shares, including equity reacquisition costs, is included in Treasury stock on our Condensed Consolidated Balance Sheets. We accrue the cost of repurchased shares, and exclude such shares from the calculation of basic and diluted earnings per share, as of the trade date. We recognize a liability for share repurchases which have not settled and for which cash has not been paid in Other current liabilities on our Condensed Consolidated Balance Sheets. Cash payments to reacquire our shares, including equity reacquisition costs, are included in Repurchases of common stock on our Condensed Consolidated Statements of Cash Flows. See Note 9 - Repurchases of Common Stock for more information about our 2022 Stock Repurchase Program. The condensed consolidated financial statements include the balances and results of operations of T-Mobile and our consolidated subsidiaries. We consolidate majority-owned subsidiaries over which we exercise control, as well as variable interest entities (“VIEs”) where we are deemed to be the primary beneficiary and VIEs which cannot be deconsolidated, such as those related to our obligations to pay for the management and operation of certain of our wireless communications tower sites. Intercompany transactions and balances have been eliminated in consolidation. The preparation of financial statements in conformity with United States (“U.S.”) generally accepted accounting principles (“GAAP”) requires our management to make estimates and assumptions that affect the financial statements and accompanying notes. Estimates are based on historical experience, where applicable, and other assumptions that management believes are reasonable under the circumstances. Estimates are inherently subject to judgment and actual results could differ from those estimates. Accounting Pronouncements Adopted During the Current Year Reference Rate Reform In March 2020, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2020-04, “Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting,” and has since modified the standard with ASU 2021-01, “Reference Rate Reform (Topic 848): Scope” (together, the “reference rate reform standard”). The reference rate reform standard provides temporary optional expedients and allows for certain exceptions to applying existing GAAP for contract modifications and hedging relationships, subject to meeting certain criteria, that reference LIBOR or another reference rate expected to be discontinued as a result of reference rate reform. The reference rate reform standard is available for adoption through December 31, 2022, and the optional expedients for contract modifications must be elected for all arrangements within a given Accounting Standards Codification (“ASC”) Topic or Industry Subtopic. As of January 1, 2022, we have elected to apply the practical expedients provided by the reference rate reform standard for all ASC Topics and Industry Subtopics related to eligible contract modifications as they occur. This election did not have a material impact on our condensed consolidated financial statements for the three and nine months ended September 30, 2022, and the impact of applying the election to future eligible contract modifications that occur through December 31, 2022, is also not expected to be material. Contract Assets and Contract Liabilities Acquired in a Business Combination In October 2021, the FASB issued ASU 2021-08, “Business Combinations (Topic 805): Accounting for Contract Assets and Contract Liabilities from Contracts with Customers.” The standard amends ASC 805 such that contract assets and contract liabilities acquired in a business combination are added to the list of exceptions to the recognition and measurement principles such that they are recognized and measured in accordance with ASC 606. As of January 1, 2022, we have elected to adopt this standard, and it will be applied prospectively to all business combinations occurring after this date. Accounting Pronouncements Not Yet Adopted Troubled Debt Restructurings and Vintage Disclosures In March 2022, the FASB issued ASU 2022-02, “Financial Instruments—Credit Losses (Topic 326): Troubled Debt Restructurings and Vintage Disclosures.” The standard eliminates the accounting guidance within ASC 310-40 for troubled debt restructurings by creditors while enhancing disclosure requirements for certain loan refinancings and restructurings by creditors when a borrower is experiencing financial difficulty. Additionally, for public business entities, the standard requires disclosure of current-period gross write-offs by year of origination for financing receivables and net investments in leases within the scope of ASC 326-20. The standard will become effective for us beginning January 1, 2023, and will be applied prospectively, with an option for modified retrospective application for provisions related to recognition and measurement of troubled debt restructurings. Early adoption is permitted for us at any time. We are currently evaluating the impact of the standard on our future consolidated financial statements.
|
Receivables and Related Allowance for Credit Losses |
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Receivables [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Receivables and Related Allowance for Credit Losses | Note 2 – Receivables and Related Allowance for Credit Losses We maintain an allowance for credit losses by applying an expected credit loss model. Each period, management assesses the appropriateness of the level of allowance for credit losses by considering credit risk inherent within each portfolio segment as of period end. We consider a receivable past due when a customer has not paid us by the contractually specified payment due date. Account balances are written off against the allowance for credit losses if collection efforts are unsuccessful and the receivable balance is deemed uncollectible (customer default), based on factors such as customer credit ratings as well as the length of time the amounts are past due. Our portfolio of receivables is comprised of two portfolio segments: accounts receivable and equipment installment plan (“EIP”) receivables. Accounts Receivable Portfolio Segment Accounts receivable balances are predominately comprised of amounts currently due from customers (e.g., for wireless services and monthly device lease payments), device insurance administrators, wholesale partners, non-consolidated affiliates, other carriers and third-party retail channels. We estimate credit losses associated with our accounts receivable portfolio segment using an expected credit loss model, which utilizes an aging schedule methodology based on historical information and adjusted for asset-specific considerations, current economic conditions and reasonable and supportable forecasts. Our approach considers a number of factors, including our overall historical credit losses, net of recoveries, and payment experience, as well as current collection trends such as write-off frequency and severity. We also consider other qualitative factors such as current and forecasted macroeconomic conditions. We consider the need to adjust our estimate of credit losses for reasonable and supportable forecasts of future economic conditions. To do so, we monitor external forecasts of changes in real U.S. gross domestic product and forecasts of consumer credit behavior for comparable credit exposures. We also periodically evaluate other economic indicators such as unemployment rates to assess their level of correlation with our historical credit loss statistics. EIP Receivables Portfolio Segment Based upon customer credit profiles at the time of customer origination, we classify the EIP receivables segment into two customer classes of “Prime” and “Subprime.” Prime customer receivables are those with lower credit risk and Subprime customer receivables are those with higher credit risk. Customers may be required to make a down payment on their equipment purchases if their assessed credit risk exceeds established underwriting thresholds. In addition, certain customers within the Subprime category may be required to pay a deposit. To determine a customer’s credit profile and assist in determining their credit class, we use a proprietary credit scoring model that measures the credit quality of a customer using several factors, such as credit bureau information, consumer credit risk scores and service and device plan characteristics. EIP receivables had a combined weighted-average effective interest rate of 6.9% and 5.6% as of September 30, 2022, and December 31, 2021, respectively. The following table summarizes the EIP receivables, including imputed discounts and related allowance for credit losses:
Many of our loss estimation techniques rely on delinquency-based models; therefore, delinquency is an important indicator of credit quality in the establishment of our allowance for credit losses for EIP receivables. We manage our EIP receivables portfolio segment using delinquency and customer credit class as key credit quality indicators. The following table presents the amortized cost of our EIP receivables by delinquency status, customer credit class and year of origination as of September 30, 2022:
We estimate credit losses on our EIP receivables segment by applying an expected credit loss model, which relies on historical loss data adjusted for current conditions to calculate default probabilities or an estimate for the frequency of customer default. Our assessment of default probabilities includes receivables delinquency status, historical loss experience, how long the receivables have been outstanding and customer credit ratings, as well as customer tenure. We multiply these estimated default probabilities by our estimated loss given default, which is the estimated amount or severity of the default loss after adjusting for estimated recoveries. As we do for our accounts receivable portfolio segment, we consider the need to adjust our estimate of credit losses on EIP receivables for reasonable and supportable forecasts of economic conditions through monitoring external forecasts and periodic internal statistical analyses. Activity for the nine months ended September 30, 2022 and 2021, in the allowance for credit losses and unamortized imputed discount balances for the accounts receivable and EIP receivables segments were as follows:
Credit loss activity has increased during 2022, as activity normalizes relative to muted Pandemic levels and other macroeconomic trends contribute to adverse scenarios and present additional uncertainty due to, for example, the potential effects associated with higher inflation, rising interest rates and changes in the Federal Reserve’s monetary policy, as well as geopolitical risks, including the war in Ukraine. Off-Balance-Sheet Credit Exposures We do not have material, unmitigated off-balance-sheet credit exposures as of September 30, 2022. In connection with the sales of certain service and EIP accounts receivable pursuant to the sale arrangements, we have deferred purchase price assets included on our Condensed Consolidated Balance Sheets measured at fair value that are based on a discounted cash flow model using Level 3 inputs, including customer default rates and credit worthiness, dilutions and recoveries. See Note 3 – Sales of Certain Receivables for further information.
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Sales of Certain Receivables |
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Transfers and Servicing [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Sales of Certain Receivables | Note 3 – Sales of Certain Receivables We regularly enter into transactions to sell certain service accounts receivable and EIP receivables. The transactions, including our continuing involvement with the sold receivables and the respective impacts to our condensed consolidated financial statements, are described below. Sales of EIP Receivables As of both September 30, 2022, and December 31, 2021, the EIP sale arrangement provided funding of $1.3 billion. In connection with this EIP sale arrangement, we formed a wholly owned subsidiary, which qualifies as a bankruptcy remote entity (the “EIP BRE”). We consolidate the EIP BRE under the VIE model. The following table summarizes the carrying amounts and classification of assets, which consist primarily of the deferred purchase price, included on our Condensed Consolidated Balance Sheets with respect to the EIP BRE:
Sales of Service Accounts Receivable The maximum funding commitment of the service receivable sale arrangement is $950 million and the facility expires in February 2023. As of both September 30, 2022, and December 31, 2021, the service receivable sale arrangement provided funding of $775 million. In connection with the service receivable sale arrangement, we formed a wholly owned subsidiary, which qualifies as a bankruptcy remote entity, to sell service accounts receivable (the “Service BRE”). We consolidate the Service BRE under the VIE model. The following table summarizes the carrying amounts and classification of assets, which consist primarily of the deferred purchase price, and liabilities included on our Condensed Consolidated Balance Sheets with respect to the Service BRE:
Sales of Receivables The following table summarizes the impact of the sale of certain service accounts receivable and EIP receivables on our Condensed Consolidated Balance Sheets:
At inception, we elected to measure the deferred purchase price at fair value with changes in fair value included in Selling, general and administrative expense on our Condensed Consolidated Statements of Comprehensive Income. The fair value of the deferred purchase price is determined based on a discounted cash flow model which uses primarily Level 3 inputs, including customer default rates. As of September 30, 2022, and December 31, 2021, our deferred purchase price related to the sales of service receivables and EIP receivables was $681 million and $779 million, respectively. We recognized losses from sales of receivables, including changes in fair value of the deferred purchase price, of $60 million and $4 million for the three months ended September 30, 2022 and 2021, respectively, and a loss of $168 million and a gain of $26 million for the nine months ended September 30, 2022 and 2021, respectively, in Selling, general and administrative expense on our Condensed Consolidated Statements of Comprehensive Income. Continuing Involvement Pursuant to the sale arrangements described above, we have continuing involvement with the service accounts receivable and EIP receivables we sell as we service the receivables, are required to repurchase certain receivables, including ineligible receivables, aged receivables and receivables where a write-off is imminent, and may be responsible for absorbing credit losses through reduced collections on our deferred purchase price assets. We continue to service the customers and their related receivables, including facilitating customer payment collection, in exchange for a monthly servicing fee. As the receivables are sold on a revolving basis, the customer payment collections on sold receivables may be reinvested in new receivable sales. At the direction of the purchasers of the sold receivables, we apply the same policies and procedures while servicing the sold receivables as we apply to our owned receivables, and we continue to maintain normal relationships with our customers.
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Spectrum License Transactions |
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Goodwill and Intangible Assets Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||
Spectrum License Transactions | Note 4 – Spectrum License Transactions The following table summarizes our spectrum license activity for the nine months ended September 30, 2022:
Spectrum Transactions In January 2022, the FCC announced that we were the winning bidder of 199 licenses in Auction 110 (mid-band spectrum) for an aggregate purchase price of $2.9 billion. At inception of Auction 110 in September 2021, we deposited $100 million. We paid the FCC the remaining $2.8 billion for the licenses won in the auction in February 2022. On May 4, 2022, the FCC issued us the licenses won in Auction 110. The licenses are included in Spectrum licenses on our Condensed Consolidated Balance Sheets as of September 30, 2022. In September 2022, the FCC announced that we were the winning bidder of 7,156 licenses in Auction 108 (2.5 GHz) for an aggregate price of $304 million. At inception of Auction 108 in June 2022, we deposited $65 million. We paid the FCC the remaining $239 million for the licenses won in the auction in September 2022. The aggregate cash payments made to the FCC are included in Other assets on our Condensed Consolidated Balance Sheets as of September 30, 2022, and will remain there until the corresponding licenses are received. The timing of when the licenses will be issued will be determined by the FCC after all post-auction procedures have been completed. Cash payments to acquire spectrum licenses and payments for costs to clear spectrum are included in Purchases of spectrum licenses and other intangible assets, including deposits, on our Condensed Consolidated Statements of Cash Flows for the three and nine months ended September 30, 2022. License Purchase Agreements DISH Network Corporation On July 1, 2020, we and DISH Network Corporation (“DISH”) entered into a license purchase agreement (the “License Purchase Agreement”) pursuant to which DISH has the option to purchase certain 800 MHz spectrum licenses for a total of approximately $3.6 billion in a transaction to be completed, subject to an application for FCC approval, by July 1, 2023, or within five days of FCC approval, whichever date is later. In the event DISH breaches the License Purchase Agreement or fails to deliver the purchase price following the satisfaction or waiver of all closing conditions, DISH is liable to pay us a fee of $72 million. Additionally, if DISH does not exercise the option to purchase the 800 MHz spectrum licenses, we have an obligation to offer the licenses for sale through an auction. If the specified minimum price of $3.6 billion is not met in the auction, we would be relieved of the obligation to sell the licenses. Channel 51 License Co LLC and LB License Co, LLC On August 8, 2022, we, Channel 51 License Co LLC and LB License Co, LLC (together with Channel 51 License Co LLC, the “Sellers”) entered into License Purchase Agreements pursuant to which we will acquire spectrum in the 600 MHz band from the Sellers in exchange for total cash consideration of $3.5 billion. The licenses will be acquired without any associated networks, but are currently being utilized through exclusive leasing arrangements with the Sellers. The parties have agreed that closing will occur within 180 days after the receipt of required regulatory approvals, and payment of the $3.5 billion purchase price will occur no later than 40 days after the date of such closing. We anticipate the transactions will close in mid- to late-2023.
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Fair Value Measurements |
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Fair Value Measurements | Note 5 – Fair Value Measurements The carrying values of Cash and cash equivalents, Accounts receivable and Accounts payable and accrued liabilities approximate fair value due to the short-term maturities of these instruments. The carrying values of EIP receivables approximate fair value as the receivables are recorded at their present value using an imputed interest rate. Derivative Financial Instruments Periodically, we use derivatives to manage exposure to market risk, such as interest rate risk. We designate certain derivatives as hedging instruments in a qualifying hedge accounting relationship (cash flow hedge) to help minimize significant, unplanned fluctuations in cash flows caused by interest rate volatility. We do not use derivatives for trading or speculative purposes. Cash flows associated with qualifying hedge derivative instruments are presented in the same category on our Condensed Consolidated Statements of Cash Flows as the item being hedged. We did not have any significant derivative instruments outstanding as of September 30, 2022, and December 31, 2021. Interest Rate Lock Derivatives In April 2020, we terminated our interest rate lock derivatives entered into in October 2018. Aggregate changes in the fair value of the interest rate lock derivatives, net of tax and amortization, of $1.3 billion and $1.5 billion are presented in Accumulated other comprehensive loss on our Condensed Consolidated Balance Sheets as of September 30, 2022, and December 31, 2021, respectively. For the three months ended September 30, 2022 and 2021, $51 million and $47 million, respectively, and for the nine months ended September 30, 2022 and 2021, $151 million and $140 million, respectively, were amortized from Accumulated other comprehensive loss into Interest expense, net, on our Condensed Consolidated Statements of Comprehensive Income. We expect to amortize $215 million of the Accumulated other comprehensive loss associated with the derivatives into Interest expense, net, over the 12 months ending September 30, 2023. Deferred Purchase Price Assets In connection with the sales of certain service and EIP accounts receivable pursuant to the sale arrangements, we have deferred purchase price assets measured at fair value that are based on a discounted cash flow model using unobservable Level 3 inputs, including customer default rates. See Note 3 – Sales of Certain Receivables for further information. The carrying amounts of our deferred purchase price assets, which are measured at fair value on a recurring basis and are included on our Condensed Consolidated Balance Sheets, were $681 million and $779 million as of September 30, 2022, and December 31, 2021, respectively. Fair value was equal to the carrying amount at September 30, 2022, and December 31, 2021. Debt The fair value of our Senior Notes and Senior Secured Notes to third parties was determined based on quoted market prices in active markets, and therefore were classified as Level 1 within the fair value hierarchy. The fair value of our Senior Notes to affiliates was determined based on a discounted cash flow approach using market interest rates of instruments with similar terms and maturities and an estimate for our standalone credit risk. Accordingly, our Senior Notes to affiliates were classified as Level 2 within the fair value hierarchy. Although we have determined the estimated fair values using available market information and commonly accepted valuation methodologies, considerable judgment was required in interpreting market data to develop fair value estimates for the Senior Notes to affiliates. The fair value estimates were based on information available as of September 30, 2022, and December 31, 2021. As such, our estimates are not necessarily indicative of the amount we could realize in a current market exchange. The carrying amounts and fair values of our short-term and long-term debt included on our Condensed Consolidated Balance Sheets were as follows:
(1) Excludes $31 million and $47 million as of September 30, 2022, and December 31, 2021, respectively, in other financial liabilities as the carrying values approximate fair value primarily due to the short-term maturities of these instruments. (2) Following the achievement of an investment grade issuer rating from each of the three main credit rating agencies and entry into an amendment to our Credit Agreement, the Senior Secured Notes, other than our Spectrum-Backed Notes, are no longer secured by any of our present or future assets and have been reclassified to Senior Notes to third parties as of September 30, 2022, within the table above. See Note 6 – Debt for additional information.
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Debt |
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Debt Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Debt | Note 6 – Debt The following table sets forth the debt balances and activity as of and for the nine months ended September 30, 2022:
(1)Issuances and borrowings, note redemptions and reclassifications are recorded net of related issuance costs, discounts and premiums. (2)Other includes the amortization of premiums, discounts, debt issuance costs and consent fees. Our effective interest rate, excluding the impact of derivatives and capitalized interest, was approximately 3.8% and 4.0% for the three months ended September 30, 2022 and 2021, respectively, and 3.9% and 4.1% for the nine months ended September 30, 2022 and 2021, respectively, on weighted-average debt outstanding of $71.6 billion and $74.5 billion for the three months ended September 30, 2022 and 2021, respectively, and on weighted-average debt outstanding of $72.4 billion and $74.4 billion for the nine months ended September 30, 2022 and 2021, respectively. The weighted-average debt outstanding was calculated by applying an average of the monthly ending balances of total short-term and long-term debt and short-term and long-term debt to affiliates, net of unamortized premiums, discounts, debt issuance costs and consent fees. Issuances and Borrowings During the nine months ended September 30, 2022, we issued the following Senior Notes:
Senior Secured Notes Following the achievement of an investment grade issuer rating from each of the three main credit rating agencies, on August 22, 2022, we entered into an amendment (“Credit Agreement Amendment”) to our Credit Agreement, dated April 1, 2020. Upon effectiveness of the Credit Agreement Amendment, the liens securing the Senior Secured Notes were automatically released, and our obligations under the Senior Secured Notes (hereafter, “Senior Notes”), other than our Spectrum-Backed notes, are no longer secured by any of our present or future assets. Note Redemptions and Repayments During the nine months ended September 30, 2022, we made the following note redemptions and repayments:
Asset-backed Notes Subsequent to September 30, 2022, on October 12, 2022, we issued $750 million of 4.910% Class A senior asset-backed notes (“ABS Notes”) to third-party investors in a private placement transaction. Our ABS Notes are secured by $1.0 billion of gross EIP receivables and future collections on such receivables. In connection with issuing the ABS Notes, we formed a wholly owned subsidiary, which qualifies as a bankruptcy remote entity (the “ABS BRE”), and a trust (the “ABS Trust” and together with the ABS BRE, the “ABS Entities”), in which the ABS BRE holds a residual interest. We will include the balances and results of operations of the ABS Entities in our consolidated financial statements. The ABS BRE’s residual interest in the ABS Trust represents the rights to all funds not needed to make required payments on the ABS Notes and other related payments and expenses. Under the terms of the ABS Notes, our wholly owned subsidiary, T-Mobile Financial LLC (“FinCo”), and certain of our other wholly owned subsidiaries (collectively, the “Originators”) transfer EIP receivables to the ABS BRE, which in turn transfers such receivables to the ABS Trust, which issued the ABS Notes. The Class A senior ABS Notes have an expected weighted average life of approximately 2.5 years. Under the terms of the transaction, there is a two-year revolving period during which we may transfer additional receivables to the ABS Entities as collections on the receivables are received. The third-party investors in the Class A senior ABS Notes have legal recourse only to the assets of the ABS Issuer securing the ABS Notes and do not have any recourse to T-Mobile with respect to the payment of principal and interest. The receivables transferred to the ABS Issuer will only be available for payment of the ABS Notes and other obligations arising from the transaction and will not be available to pay any obligations or claims of T-Mobile’s creditors. Under a parent support agreement, T-Mobile has agreed to guarantee the performance of the obligations of FinCo, which will continue to service the receivables, and the other T-Mobile entities participating in the transaction to the ABS Issuer. However, T-Mobile does not guarantee any principal or interest on the ABS Notes or any payments on the underlying EIP receivables. Net proceeds of $748 million from our ABS Notes will be reflected in Proceeds from issuance of long-term debt in our Consolidated Statements of Cash Flows in the three months ending December 31, 2022. The ABS Notes issued and the assets securing this debt will be included on our Consolidated Balance Sheets. The expected maturities of our ABS Notes are as follows:
Credit Facilities Subsequent to September 30, 2022, on October 17, 2022, T-Mobile USA, Inc., our wholly owned subsidiary, and certain of its affiliates, as guarantors, entered into an Amended and Restated Credit Agreement (the “October 2022 Credit Agreement”) with certain financial institutions named therein. The October 2022 Credit Agreement amends and restates in its entirety the Credit Agreement originally dated April 1, 2020, and provides for a $7.5 billion revolving credit facility, including a letter of credit sub-facility of up to $1.5 billion, and a swingline loan sub-facility of up to $500 million. Commitments under the October 2022 Credit Agreement will mature on October 17, 2027, except as otherwise extended or replaced. Borrowings under the October 2022 Credit Agreement will bear interest based upon the applicable benchmark rate, depending on the type of loan and, in some cases, at our election, plus a margin. The October 2022 Credit Agreement contains customary representations, warranties and covenants, including a financial maintenance covenant of 4.5x with respect to T-Mobile USA, Inc.’s Leverage Ratio (as defined therein) commencing with the period ending December 31, 2022.
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Tower Obligations |
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Tower Obligations | Note 7 – Tower Obligations Existing CCI Tower Lease Arrangements In 2012, we conveyed to Crown Castle International Corp. (“CCI”) the exclusive right to manage and operate approximately 6,200 tower sites (“CCI Lease Sites”) via a master prepaid lease with site lease terms ranging from 23 to 37 years. CCI has fixed-price purchase options for the CCI Lease Sites totaling approximately $2.0 billion, exercisable annually on a per-tranche basis at the end of the lease term during the period from December 31, 2035, through December 31, 2049. If CCI exercises its purchase option for any tranche, it must purchase all the towers in the tranche. We lease back a portion of the space at certain tower sites. Assets and liabilities associated with the operation of the tower sites were transferred to special purpose entities (“SPEs”). Assets included ground lease agreements or deeds for the land on which the towers are situated, the towers themselves and existing subleasing agreements with other mobile network operator tenants that lease space at the tower sites. Liabilities included the obligation to pay ground lease rentals, property taxes and other executory costs. We determined the SPEs containing the CCI Lease Sites (“Lease Site SPEs”) are VIEs as they lack sufficient equity to finance their activities. We have a variable interest in the Lease Site SPEs but are not the primary beneficiary as we lack the power to direct the activities that most significantly impact the Lease Site SPEs’ economic performance. These activities include managing tenants and underlying ground leases, performing repair and maintenance on the towers, the obligation to absorb expected losses and the right to receive the expected future residual returns from the purchase option to acquire the CCI Lease Sites. As we determined that we are not the primary beneficiary and do not have a controlling financial interest in the Lease Site SPEs, the Lease Site SPEs are not included on our condensed consolidated financial statements. However, we also considered if this arrangement resulted in the sale of the CCI Lease Sites for which we would derecognize the tower assets. By assessing whether control had transferred, we concluded that transfer of control criteria, as discussed in the revenue standard, were not met. Accordingly, we recorded this arrangement as a financing whereby we recorded debt, a financial obligation, and the CCI Lease Sites tower assets remained on our Condensed Consolidated Balance Sheets. We recorded long-term financial obligations in the amount of the net proceeds received and recognize interest on the tower obligations. The tower obligations are increased by interest expense and amortized through contractual leaseback payments made by us to CCI and through net cash flows generated and retained by CCI from operation of the tower sites. Acquired CCI Tower Lease Arrangements Prior to our merger (the “Merger”) with Sprint Corporation (“Sprint”) in April 2020, Sprint entered into a lease-out and leaseback arrangement with Global Signal Inc., a third party that was subsequently acquired by CCI, that conveyed to CCI the exclusive right to manage and operate approximately 6,400 tower sites (“Master Lease Sites”) via a master prepaid lease. These agreements were assumed upon the close of the Merger, at which point the remaining term of the lease-out was approximately 17 years with no renewal options. CCI has a fixed price purchase option for all (but not less than all) of the leased or subleased sites for approximately $2.3 billion, exercisable one year prior to the expiration of the agreement and ending 120 days prior to the expiration of the agreement. We lease back a portion of the space at certain tower sites. We considered if this arrangement resulted in the sale of the Master Lease Sites for which we would derecognize the tower assets. By assessing whether control had transferred, we concluded that transfer of control criteria, as discussed in the revenue standard, were not met. Accordingly, we recorded this arrangement as a financing whereby we recorded debt, a financial obligation, and the Master Lease Sites tower assets remained on our Condensed Consolidated Balance Sheets. As of the closing date of the Merger, we recognized Property and equipment with a fair value of $2.8 billion and tower obligations related to amounts owed to CCI under the leaseback of $1.1 billion. Additionally, we recognized $1.7 billion in Other long-term liabilities associated with contract terms that are unfavorable to current market rates, which include unfavorable terms associated with the fixed-price purchase option in 2037. We recognize interest expense on the tower obligations. The tower obligations are increased by the interest expense and amortized through contractual leaseback payments made by us to CCI. The tower assets are reported in Property and equipment, net on our Condensed Consolidated Balance Sheets and are depreciated to their estimated residual values over the expected useful life of the towers, which is 20 years. Leaseback Arrangement On January 3, 2022, we entered into an agreement (the “Crown Agreement”) with CCI. The Crown Agreement extends the current term of the leasebacks by up to 12 years and modifies the leaseback payments for both the Existing CCI Tower Lease Arrangement and the Acquired CCI Tower Lease Arrangement. As a result of the Crown Agreement, there was an increase in our financing obligation as of the effective date of the agreement of approximately $1.2 billion, with a corresponding decrease to Other long-term liabilities associated with unfavorable contract terms. The modification resulted in a revised interest rate under the effective interest method for the tower obligations: 11.6% for the Existing CCI Tower Lease Arrangement and 5.3% for the Acquired CCI Tower Lease Arrangement. There were no changes made to either of our master prepaid leases with CCI. The following table summarizes the balances associated with both of the tower arrangements on our Condensed Consolidated Balance Sheets:
Future minimum payments related to the tower obligations are approximately $421 million for the 12-month period ending September 30, 2023, $826 million in total for both of the 12-month periods ending September 30, 2024 and 2025, $783 million in total for both of the 12-month periods ending September 30, 2026 and 2027, and $4.6 billion in total thereafter.
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Revenue from Contracts with Customers |
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Revenue from Contracts with Customers | Note 8 – Revenue from Contracts with Customers Disaggregation of Revenue We provide wireless communications services to three primary categories of customers: •Postpaid customers generally include customers who are qualified to pay after receiving wireless communications services utilizing phones, High Speed Internet, wearables, DIGITS or other connected devices, which include tablets and SyncUP products; •Prepaid customers generally include customers who pay for wireless communications services in advance; and •Wholesale customers include Machine-to-Machine and Mobile Virtual Network Operator customers that operate on our network but are managed by wholesale partners. Postpaid service revenues, including postpaid phone revenues and postpaid other revenues, were as follows:
We operate as a single operating segment. The balances presented in each revenue line item on our Condensed Consolidated Statements of Comprehensive Income represent categories of revenue from contracts with customers disaggregated by type of product and service. Postpaid and prepaid service revenues also include revenues earned for providing premium services to customers, such as device insurance services and customer-based, third-party services. Revenue generated from the lease of mobile communication devices is included in Equipment revenues on our Condensed Consolidated Statements of Comprehensive Income. Equipment revenues from the lease of mobile communication devices were as follows:
We provide wireline communication services to domestic and international customers. Wireline service revenues were $144 million and $179 million for the three months ended September 30, 2022 and 2021, respectively, and $433 million and $563 million for the nine months ended September 30, 2022 and 2021, respectively. Wireline service revenues are presented in Wholesale and other service revenues on our Condensed Consolidated Statements of Comprehensive Income. In September 2022, we entered into an agreement for the sale of the Wireline Business. See Note 10 – Wireline for additional information. Contract Balances The contract asset and contract liability balances from contracts with customers as of September 30, 2022, and December 31, 2021, were as follows:
Contract assets primarily represent revenue recognized for equipment sales with promotional bill credits offered to customers that are paid over time and are contingent on the customer maintaining a service contract. Contract asset balances were impacted by customer activity related to new promotions, offset by billings on existing contracts and impairment, which is recognized as bad debt expense. The current portion of our contract assets of approximately $222 million and $219 million as of September 30, 2022, and December 31, 2021, respectively, was included in Other current assets on our Condensed Consolidated Balance Sheets. Contract liabilities are recorded when fees are collected, or we have an unconditional right to consideration (a receivable) in advance of delivery of goods or services. Changes in contract liabilities are primarily related to the activity of prepaid customers. Contract liabilities are primarily included in Deferred revenue on our Condensed Consolidated Balance Sheets. Revenues for the three and nine months ended September 30, 2022 and 2021, include the following:
Remaining Performance Obligations As of September 30, 2022, the aggregate amount of transaction price allocated to remaining service performance obligations for postpaid contracts with subsidized devices and promotional bill credits that result in an extended service contract is $602 million. We expect to recognize revenue as the service is provided on these postpaid contracts over an extended contract term of 24 months from the time of origination. Information about remaining performance obligations that are part of a contract that has an original expected duration of one year or less has been excluded from the above, which primarily consists of monthly service contracts. Certain of our wholesale, roaming and service contracts include variable consideration based on usage and performance. This variable consideration has been excluded from the disclosure of remaining performance obligations. As of September 30, 2022, the aggregate amount of the contractual minimum consideration for wholesale, roaming and service contracts is $534 million, $2.3 billion and $5.1 billion for 2022, 2023, and 2024 and beyond, respectively. These contracts have a remaining duration ranging from less than one year to eight years. Contract Costs The balance of deferred incremental costs to obtain contracts with customers was $1.8 billion and $1.5 billion as of September 30, 2022, and December 31, 2021, respectively, and is included in Other assets on our Condensed Consolidated Balance Sheets. Deferred contract costs incurred to obtain postpaid service contracts are amortized over a period of 24 months. The amortization period is monitored to reflect any significant change in assumptions. Amortization of deferred contract costs included in Selling, general and administrative expenses on our Condensed Consolidated Statements of Comprehensive Income were $375 million and $277 million for the three months ended September 30, 2022 and 2021, respectively, and $1.1 billion and $789 million for the nine months ended September 30, 2022 and 2021, respectively. The deferred contract cost asset is assessed for impairment on a periodic basis. There were no impairment losses recognized on deferred contract cost assets for the three and nine months ended September 30, 2022 and 2021.
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Repurchases of Common Stock |
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Equity [Abstract] | |
Repurchases of Common Stock | Note 9 – Repurchases of Common Stock 2022 Stock Repurchase Program On September 8, 2022, our Board of Directors authorized our 2022 Stock Repurchase Program for up to $14.0 billion of our common stock through September 30, 2023. Under the 2022 Stock Repurchase Program, repurchases can be made from time to time using a variety of methods, which may include open market purchases, 10b5-1 plans, privately negotiated transactions or other methods, all in accordance with the rules of the Securities and Exchange Commission and other applicable legal requirements. The specific timing, price and size of repurchases will depend on prevailing stock prices, general economic and market conditions, and other considerations and may include up to $3.0 billion of our common stock in 2022. The 2022 Stock Repurchase Program does not obligate us to acquire any particular amount of common stock, and the 2022 Stock Repurchase Program may be suspended or discontinued at any time at our discretion. Repurchased shares will be held as Treasury stock on our Condensed Consolidated Balance Sheets. During the three and nine months ended September 30, 2022, we repurchased 4,892,315 shares of our common stock at an average price per share of $136.65 for a total purchase price of $669 million, all of which were purchased under the 2022 Stock Repurchase program and occurred during the period from September 8, 2022, through September 30, 2022. As of September 30, 2022, we had up to approximately $13.3 billion remaining under the 2022 Stock Repurchase Program, of which up to approximately $2.3 billion was available for the remainder of 2022. Subsequent to September 30, 2022, from October 1, 2022, through October 20, 2022, we repurchased 5,964,813 shares of our common stock at an average price per share of $136.57 for a total purchase price of $815 million. As of October 20, 2022, we had up to approximately $12.5 billion remaining under the 2022 Stock Repurchase Program, of which up to approximately $1.5 billion was available for the remainder of 2022.
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Wireline |
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Wireline | Note 10 – Wireline Sale of the Wireline Business On September 6, 2022, two of our wholly owned subsidiaries, Sprint Communications and Sprint LLC, and Cogent Infrastructure, Inc., entered into the Purchase Agreement, pursuant to which the Buyer will acquire the Wireline Business. The Purchase Agreement provides that, upon the terms and conditions set forth therein, the Buyer will purchase all of the issued and outstanding membership interests (the “Purchased Interests”) of a Delaware limited liability company that holds certain assets and liabilities relating to the Wireline Business (such transactions contemplated by the Purchase Agreement are collectively referred to as the “Wireline Transaction”). The parties have agreed to a $1 purchase price in consideration for the Purchased Interests, subject to customary adjustments set forth in the Purchase Agreement. In addition, at the consummation of the Wireline Transaction (the “Closing”), a T-Mobile affiliate will enter into a commercial agreement for IP transit services, pursuant to which T-Mobile will pay to the Buyer an aggregate of $700 million, consisting of (i) $350 million in equal monthly installments during the first year after the Closing and (ii) $350 million in equal monthly installments over the subsequent 42 months. The Closing is subject to customary closing conditions, including the receipt of certain required regulatory approvals and consents. Subject to the satisfaction or waiver of certain conditions and other terms and conditions of the Purchase Agreement, the Wireline Transaction is expected to close in the second half of 2023. As a result of the Purchase Agreement and related anticipated Wireline Transaction, we concluded that the Wireline Business met the held for sale criteria upon entering into the Purchase Agreement. As such, the assets and liabilities of the Wireline Business disposal group are classified as held for sale and presented within Other current assets and Other current liabilities on our Condensed Consolidated Balance Sheets as of September 30, 2022. The components of assets and liabilities held for sale presented within Other current assets and Other current liabilities, respectively, on our Condensed Consolidated Balance Sheets as of September 30, 2022, were as follows:
(1) Excludes amounts related to the establishment of liabilities for contractual and other payments associated with the Wireline Transaction, including the $700 million of fees payable for IP transit services discounted to present value and other payments to the Buyer anticipated in connection with the Wireline Transaction. In connection with the expected sale of the Wireline Business and classification of related assets and liabilities as held for sale, we recognized a pre-tax loss of $1.1 billion during the three months ended September 30, 2022, which is included within Loss on disposal group held for sale on our Condensed Consolidated Statements of Comprehensive Income. The components of the Loss on disposal group held for sale on our Condensed Consolidated Statements of Comprehensive Income for the three and nine months ended September 30, 2022, were as follows:
(1) We will continue to recognize accretion expense through the expiration of the agreement which will be included in Interest expense, net separate from the Loss on disposal group held for sale on our Condensed Consolidated Statements of Comprehensive Income. The present value of the liability for fees payable for IP transit services has been recognized as a component of Loss on disposal group held for sale as we have not currently identified any path to utilize such services in our continuing operations and have committed to execute the agreement as a closing condition for the Wireline Transaction. We will continue to evaluate potential uses on an ongoing basis over the life of the agreement. Approximately $29 million and $613 million of this liability, including accrued interest, is presented within Other current liabilities and Other long-term liabilities, respectively, on our Condensed Consolidated Balance Sheets as of September 30, 2022, in accordance with the expected timing of the related payments. Approximately $24 million and $35 million for contractual and other payments associated with the Transaction are presented within Other current liabilities and Other long-term liabilities, respectively, on our Condensed Consolidated Balance Sheets as of September 30, 2022, in accordance with the expected timing of the related payments. We do not consider the sale of the Wireline Business to be a strategic shift that will have a major effect on the Company’s operations and financial results, and therefore it does not qualify for reporting as a discontinued operation. Other Wireline Asset Sales Separate from the Wireline Transaction, we sold certain IP addresses held by the Wireline Business to other third parties during the three months ended September 30, 2022, for which we recognized a gain on disposal of $121 million, which is included as a reduction to Selling, general and administrative expenses on our Condensed Consolidated Statements of Comprehensive Income. Wireline Impairment We provide wireline communication services to domestic and international customers via the legacy Sprint Wireline U.S. long-haul fiber network (including non-U.S. extensions thereof) acquired through the Merger. The legacy Sprint Wireline network is primarily comprised of owned property and equipment, including land, buildings, communication systems and data processing equipment, fiber optic cable and operating lease right-of-use assets. Previously, the operation of the legacy Sprint CDMA and LTE wireless networks was supported by the legacy Sprint Wireline network. During the second quarter of 2022, we retired the legacy Sprint CDMA network and began the orderly shut-down of the LTE network. We assess long-lived assets for impairment when events or circumstances indicate that they might be impaired. During the second quarter of 2022, we determined that the retirement of the legacy Sprint CDMA and LTE wireless networks triggered the need to assess the Wireline long-lived assets for impairment, as these assets no longer support our wireless network and the associated customers and cash flows in a significant manner. In evaluating whether the Wireline long-lived assets were impaired, we estimated the fair value of these assets using a combination of the cost, income and market approaches, including market participant assumptions. The fair value measurement of the Wireline assets was estimated using significant inputs not observable in the market (Level 3). The results of this assessment indicated that certain Wireline long-lived assets were impaired, and as a result, we recorded non-cash impairment expense of $477 million during the nine months ended September 30, 2022, all of which relates to the impairment recognized during the three months ended June 30, 2022, of which $258 million is related to Wireline Property and equipment, $212 million is related to Operating lease right-of-use assets and $7 million is related to Other intangible assets. In measuring and allocating the impairment expense to individual Wireline long-lived assets, we did not impair the long-lived assets below their individual fair values. The expense is included within Impairment expense in our Condensed Consolidated Statements of Comprehensive Income. There was no impairment expense recognized for the three and nine months ended September 30, 2021.
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Income Taxes |
9 Months Ended |
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Sep. 30, 2022 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Note 11 – Income Taxes Within our Condensed Consolidated Statements of Comprehensive Income, we recorded an Income tax benefit of $57 million and $3 million for the three months ended September 30, 2022 and 2021, respectively, and Income tax expense of $106 million and $520 million for the nine months ended September 30, 2022 and 2021, respectively. The increase in Income tax benefit for the three months ended September 30, 2022, was primarily from tax benefits associated with internal restructuring and lower income before income taxes, partially offset by tax benefits recognized in the three months ended September 30, 2021, associated with legal entity reorganization related to historical Sprint entities, including a reduction in the valuation allowance against deferred tax assets in certain state jurisdictions that did not impact the three months ended September 30, 2022. The decrease in Income tax expense for the nine months ended September 30, 2022, was primarily from lower income before income taxes and tax benefits associated with internal restructuring, partially offset by tax benefits recognized in the nine months ended September 30, 2021, associated with legal entity reorganization related to historical Sprint entities, including a reduction in the valuation allowance against deferred tax assets in certain state jurisdictions, that did not impact the nine months ended September 30, 2022, and a decrease in excess tax benefits related to the vesting of restricted stock awards. The effective tax rate was (12.4)% and (0.3)% for the three months ended September 30, 2022 and 2021, respectively, and 8.7% and 16.7% for the nine months ended September 30, 2022 and 2021, respectively.
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Earnings Per Share |
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Earnings Per Share | Note 12 – Earnings Per Share The computation of basic and diluted earnings per share was as follows:
(1) Represents the weighted-average SoftBank Specified Shares that are contingently issuable from the acquisition date of April 1, 2020, pursuant to a letter agreement dated February 20, 2020, between T-Mobile, SoftBank and Deutsche Telekom AG (“DT”). As of September 30, 2022, we had authorized 100 million shares of preferred stock, with a par value of $0.00001 per share. There was no preferred stock outstanding as of September 30, 2022 and 2021. Potentially dilutive securities were not included in the computation of diluted earnings per share if to do so would have been anti-dilutive. The SoftBank Specified Shares Amount of 48,751,557 shares of T-Mobile common stock was determined to be contingent consideration for the Merger and is not dilutive until the defined volume-weighted average price per share is reached.
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Leases |
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Leases [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Leases | Note 13 – Leases Lessee We are a lessee for non-cancelable operating and financing leases for cell sites, switch sites, retail stores, network equipment and office facilities with contractual terms that generally extend through 2035. Additionally, we lease dark fiber through non-cancelable operating leases with contractual terms that generally extend through 2040. The majority of cell site leases have a non-cancelable term of to 15 years with several renewal options that can extend the lease term for to 50 years. In addition, we have financing leases for network equipment that generally have a non-cancelable lease term of to five years. The financing leases do not have renewal options and contain a bargain purchase option at the end of the lease. On January 3, 2022, we entered into the Crown Agreement with CCI that modified the terms of our leased towers from CCI. The Crown Agreement modifies the monthly rental payments we will pay for sites currently leased by us, extends the non-cancellable lease term for the majority of our sites through December 2033 and will allow us the flexibility to facilitate our network integration and decommissioning activities through new site builds and termination of duplicate tower locations. The initial non-cancellable term is through December 31, 2033, followed by three optional five-year renewals. As a result of this modification, we remeasured the associated right-of use assets and lease liabilities resulting in an increase of $5.3 billion to each on the effective date of the modification, with a corresponding gross increase to both deferred tax liabilities and assets of $1.3 billion. The components of lease expense were as follows:
As of September 30, 2022, the weighted-average remaining lease term and discount rate for operating leases were 10 years and 4.0%, respectively. Maturities of lease liabilities as of September 30, 2022, were as follows:
Interest payments for financing leases were $18 million and $15 million for the three months ended September 30, 2022 and 2021, respectively, and $49 million and $51 million for the nine months ended September 30, 2022 and 2021, respectively. As of September 30, 2022, we have additional operating leases for commercial properties that have not yet commenced with future lease payments of approximately $253 million.
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Leases | Note 13 – Leases Lessee We are a lessee for non-cancelable operating and financing leases for cell sites, switch sites, retail stores, network equipment and office facilities with contractual terms that generally extend through 2035. Additionally, we lease dark fiber through non-cancelable operating leases with contractual terms that generally extend through 2040. The majority of cell site leases have a non-cancelable term of to 15 years with several renewal options that can extend the lease term for to 50 years. In addition, we have financing leases for network equipment that generally have a non-cancelable lease term of to five years. The financing leases do not have renewal options and contain a bargain purchase option at the end of the lease. On January 3, 2022, we entered into the Crown Agreement with CCI that modified the terms of our leased towers from CCI. The Crown Agreement modifies the monthly rental payments we will pay for sites currently leased by us, extends the non-cancellable lease term for the majority of our sites through December 2033 and will allow us the flexibility to facilitate our network integration and decommissioning activities through new site builds and termination of duplicate tower locations. The initial non-cancellable term is through December 31, 2033, followed by three optional five-year renewals. As a result of this modification, we remeasured the associated right-of use assets and lease liabilities resulting in an increase of $5.3 billion to each on the effective date of the modification, with a corresponding gross increase to both deferred tax liabilities and assets of $1.3 billion. The components of lease expense were as follows:
As of September 30, 2022, the weighted-average remaining lease term and discount rate for operating leases were 10 years and 4.0%, respectively. Maturities of lease liabilities as of September 30, 2022, were as follows:
Interest payments for financing leases were $18 million and $15 million for the three months ended September 30, 2022 and 2021, respectively, and $49 million and $51 million for the nine months ended September 30, 2022 and 2021, respectively. As of September 30, 2022, we have additional operating leases for commercial properties that have not yet commenced with future lease payments of approximately $253 million.
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Commitments and Contingencies |
9 Months Ended |
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Sep. 30, 2022 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Note 14 – Commitments and Contingencies Purchase Commitments We have commitments for non-dedicated transportation lines with varying expiration terms that generally extend through 2038. In addition, we have commitments to purchase wireless devices, network services, equipment, software, marketing sponsorship agreements and other items in the ordinary course of business, with various terms through 2043. Our purchase commitments are approximately $4.8 billion for the 12-month period ending September 30, 2023, $5.0 billion in total for both of the 12-month periods ending September 30, 2024 and 2025, $2.7 billion in total for both of the 12-month periods ending September 30, 2026 and 2027, and $2.9 billion in total thereafter. These amounts are not reflective of our entire anticipated purchases under the related agreements but are determined based on the non-cancelable quantities or termination amounts to which we are contractually obligated. Spectrum Leases We lease spectrum from various parties. These leases include service obligations to the lessors. Certain spectrum leases provide for minimum lease payments, additional charges, renewal options and escalation clauses. Leased spectrum agreements have varying expiration terms that generally extend through 2050. We expect that all renewal periods in our spectrum leases will be exercised by us. Certain spectrum leases also include purchase options and right-of-first refusal clauses in which we are provided the opportunity to exercise our purchase option if the lessor receives a purchase offer from a third party. The purchase of the leased spectrum is at our option and therefore the option price is not included in the commitments below. Our spectrum lease and service credit commitments, including renewal periods, are approximately $312 million for the 12-month period ending September 30, 2023, $585 million in total for both of the 12-month periods ending September 30, 2024 and 2025, $616 million in total for both of the 12-month periods ending September 30, 2026 and 2027, and $4.6 billion in total thereafter. In August 2022, we entered into an agreement for the purchase of certain spectrum licenses currently subject to lease agreements. The agreement remains subject to regulatory approval and the purchase price of $3.5 billion is excluded from our reported purchase commitments above. See Note 4 – Spectrum License Transactions for additional details. Contingencies and Litigation Litigation and Regulatory Matters We are involved in various lawsuits and disputes, claims, government agency investigations and enforcement actions, and other proceedings (“Litigation and Regulatory Matters”) that arise in the ordinary course of business, which include claims of patent infringement (most of which are asserted by non-practicing entities primarily seeking monetary damages), class actions, and proceedings to enforce FCC or other government agency rules and regulations. Those Litigation and Regulatory Matters are at various stages, and some of them may proceed to trial, arbitration, hearing, or other adjudication that could result in fines, penalties, or awards of monetary or injunctive relief in the coming 12 months if they are not otherwise resolved. We have established an accrual with respect to certain of these matters, where appropriate. The accruals are reflected on our condensed consolidated financial statements, but they are not considered to be, individually or in the aggregate, material. An accrual is established when we believe it is both probable that a loss has been incurred and an amount can be reasonably estimated. For other matters, where we have not determined that a loss is probable or because the amount of loss cannot be reasonably estimated, we have not recorded an accrual due to various factors typical in contested proceedings, including, but not limited to, uncertainty concerning legal theories and their resolution by courts or regulators, uncertain damage theories and demands, and a less than fully developed factual record. For Litigation and Regulatory Matters that may result in a contingent gain, we recognize such gains on our condensed consolidated financial statements when the gain is realized or realizable. We recognize legal costs expected to be incurred in connection with Litigation and Regulatory Matters as they are incurred. Except as otherwise specified below, we do not expect that the ultimate resolution of these Litigation and Regulatory Matters, individually or in the aggregate, will have a material adverse effect on our financial position, but we note that an unfavorable outcome of some or all of the specific matters identified below could have a material adverse impact on results of operations or cash flows for a particular period. This assessment is based on our current understanding of relevant facts and circumstances. As such, our view of these matters is subject to inherent uncertainties and may change in the future. On February 28, 2020, we received a Notice of Apparent Liability for Forfeiture and Admonishment from the FCC, which proposed a penalty against us for allegedly violating section 222 of the Communications Act and the FCC’s regulations governing the privacy of customer information. In the first quarter of 2020, we recorded an accrual for an estimated payment amount. We maintained the accrual as of September 30, 2022, and that accrual was included in Accounts payable and accrued liabilities on our Condensed Consolidated Balance Sheets. On April 1, 2020, in connection with the closing of the Merger, we assumed the contingencies and litigation matters of Sprint. Those matters include a wide variety of disputes, claims, government agency investigations and enforcement actions, and other proceedings. These matters include, among other things, certain ongoing FCC and state government agency investigations into Sprint’s Lifeline program. In September 2019, Sprint notified the FCC that it had claimed monthly subsidies for serving subscribers even though these subscribers may not have met usage requirements under Sprint's usage policy for the Lifeline program, due to an inadvertent coding issue in the system used to identify qualifying subscriber usage that occurred in July 2017 while the system was being updated. Sprint has made a number of payments to reimburse the federal government and certain states for excess subsidy payments. We note that pursuant to Amendment No. 2, dated as of February 20, 2020, to the Business Combination Agreement, dated as of April 29, 2018, by and among the Company, Sprint and the other parties named therein (as amended, the “Business Combination Agreement”), SoftBank agreed to indemnify us against certain specified matters and losses, including those relating to the Lifeline matters described above. Resolution of these matters could require making additional reimbursements and paying additional fines and penalties, which we do not expect to have a significant impact on our financial results. We expect that any additional liabilities related to these indemnified matters would be indemnified and reimbursed by SoftBank. On June 1, 2021, a putative shareholder class action and derivative lawsuit was filed in the Delaware Court of Chancery, Dinkevich v. Deutsche Telekom AG, et al., Case No. C.A. No. 2021-0479, against DT, SoftBank and certain of our current and former officers and directors, asserting breach of fiduciary duty claims relating to the repricing amendment to the Business Combination Agreement, and to SoftBank’s monetization of its T-Mobile shares. We are also named as a nominal defendant in the case. We are unable to predict the potential outcome of these claims. We intend to vigorously defend this lawsuit. In October 2020, we notified Mobile Virtual Network Operators (“MVNOs”) using the legacy Sprint CDMA network that we planned to retire that network on December 31, 2021. In response to that notice, DISH, which had Boost Mobile customers who used the legacy Sprint CDMA network, made several efforts to prevent us from retiring the CDMA network until mid-2023, including pursuing a Petition for Modification and related proceedings pursuant to the California Public Utilities Commission’s (the “CPUC”) April 2020 decision concerning the Merger. As of June 30, 2022, the orderly decommissioning of the legacy Sprint CDMA network had been completed, although certain of the CPUC proceedings remain in process. On August 12, 2021, we became aware of a potential cybersecurity issue involving unauthorized access to T-Mobile’s systems (the “August 2021 cyberattack”). We immediately began an investigation and engaged cybersecurity experts to assist with the assessment of the incident and to help determine what data was impacted. Our investigation uncovered that the perpetrator had illegally gained access to certain areas of our systems on or about March 18, 2021, but only gained access to and took data of current, former, and prospective customers beginning on or about August 3, 2021. With the assistance of our outside cybersecurity experts, we located and closed the unauthorized access to our systems and identified current, former and prospective customers whose information was impacted and notified them, consistent with state and federal requirements. We also undertook a number of other measures to demonstrate our continued support and commitment to data privacy and protection. We also coordinated with law enforcement. Our forensic investigation is complete, and we believe we have a full view of the data compromised. As a result of the August 2021 cyberattack, we have become subject to numerous lawsuits, including mass arbitration claims and multiple class action lawsuits that have been filed in numerous jurisdictions seeking, among other things, unspecified monetary damages, costs and attorneys’ fees arising out of the August 2021 cyberattack. In December 2021, the Judicial Panel on Multidistrict Litigation consolidated the federal class action lawsuits in the U.S. District Court for the Western District of Missouri under the caption In re: T-Mobile Customer Data Security Breach Litigation, Case No. 21-md-3019-BCW. On July 22, 2022, we entered into an agreement to settle the lawsuit. On July 26, 2022, we received preliminary approval of the proposed settlement, which remains subject to final court approval. Final court approval of the terms of the settlement is expected as early as January 2023 but could be delayed by appeals or other proceedings. If approved by the court, under the terms of the proposed settlement, we would pay an aggregate of $350 million to fund claims submitted by class members, the legal fees of plaintiffs’ counsel and the costs of administering the settlement. We would also commit to an aggregate incremental spend of $150 million for data security and related technology in 2022 and 2023. We anticipate that, upon court approval, the settlement will provide a full release of all claims arising out of the August 2021 cyberattack by class members, who do not opt out, against all defendants, including us, our subsidiaries and affiliates, and our directors and officers. The settlement contains no admission of liability, wrongdoing or responsibility by any of the defendants. We have the right to terminate the settlement agreement under certain conditions. If approved by the court, we anticipate that this settlement of the class action, along with other settlements of separate consumer claims that have been previously completed or are currently pending, will resolve substantially all of the claims brought to date by our current, former and prospective customers who were impacted by the 2021 cyberattack. In connection with the proposed class action settlement and the separate settlements, we recorded a total pre-tax charge of approximately $400 million during the three months ended June 30, 2022. The expense is included within Selling, general and administrative expenses on our Condensed Consolidated Statements of Comprehensive Income. During the three and nine months ended September 30, 2022, we recognized $50 million in reimbursements from insurance carriers for costs incurred related to the August 2021 cyberattack, which is included as a reduction to Selling, general and administrative expenses on our Condensed Consolidated Statements of Comprehensive Income. The ultimate resolution of the class action depends on whether we will be able to obtain court approval of the proposed settlement, the number of plaintiffs who opt-out of the proposed settlement and whether the proposed settlement will be appealed. In addition, in September 2022, a purported Company shareholder filed a derivative action in the Delaware Chancery Court under the caption Harper v. Sievert et al., Case No. 2022-0819-SG, against our current directors and certain of our former directors, alleging claims for breach of fiduciary duty relating to the Company’s cybersecurity practices. We are also named as a nominal defendant in the lawsuit. We are unable at this time to predict the potential outcome of this lawsuit or whether we may be subject to further private litigation. We intend to vigorously defend this lawsuit. We have also received inquiries from various government agencies, law enforcement and other governmental authorities related to the August 2021 cyberattack which could result in substantial fines or penalties. We are responding to these inquiries and cooperating fully with these agencies and regulators. However, we cannot predict the timing or outcome of any of these matters, or whether we may be subject to further regulatory inquiries, investigations, or enforcement actions. In light of the inherent uncertainties involved in such matters and based on the information currently available to us, we believe it is reasonably possible that we could incur additional losses associated with these proceedings and inquiries, and we will continue to evaluate information as it becomes known and will record an estimate for losses at the time or times when it is both probable that a loss has been incurred and the amount of the loss is reasonably estimable. Ongoing legal and other costs related to these proceedings and inquiries, as well as any potential future actions, may be substantial, and losses associated with any adverse judgments, settlements, penalties or other resolutions of such proceedings and inquiries could be material to our business, reputation, financial condition, cash flows and operating results. In March 2022, we received $220 million in settlement of certain patent litigation. We recognized the settlement, net of legal fees, as a reduction to Selling, general and administrative expenses on our Condensed Consolidated Statements of Comprehensive Income during the nine months ended September 30, 2022. On June 17, 2022, plaintiffs filed a putative antitrust class action complaint in the Northern District of Illinois, Dale et al. v. Deutsche Telekom AG, et al., Case No. 1:22-cv-03189, against DT, T-Mobile, and Softbank, alleging that the T-Mobile and Sprint merger violated the antitrust laws and harmed competition in the U.S. retail cell service market. Plaintiffs seek injunctive relief and trebled monetary damages on behalf of a purported class of AT&T and Verizon customers who plaintiffs allege paid artificially inflated prices due to the merger. We intend to vigorously defend this lawsuit, but we are unable to predict the potential outcome.
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Restructuring Costs |
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Restructuring and Related Activities [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Restructuring Costs | Note 15 – Restructuring Costs Upon close of the Merger, we began implementing restructuring initiatives to realize cost efficiencies and reduce redundancies. The major activities associated with the Merger restructuring initiatives to date include contract termination costs associated with the rationalization of retail stores, distribution channels, duplicative network and backhaul services and other agreements, severance costs associated with the integration of redundant processes and functions and the decommissioning of certain small cell sites and distributed antenna systems to achieve Merger synergies in network costs. The following table summarizes the expenses incurred in connection with our Merger restructuring initiatives:
The expenses associated with our Merger restructuring initiatives are included in Costs of services and Selling, general and administrative on our Condensed Consolidated Statements of Comprehensive Income. Our Merger restructuring initiatives also include the acceleration or termination of certain of our operating and financing leases for cell sites, switch sites, retail stores, network equipment and office facilities. Incremental expenses associated with accelerating amortization of the right-of-use assets on lease contracts were $384 million and $265 million for the three months ended September 30, 2022 and 2021, respectively, and $1.6 billion and $649 million for the nine months ended September 30, 2022 and 2021, respectively, and are included in Costs of services and Selling, general and administrative on our Condensed Consolidated Statements of Comprehensive Income. The changes in the liabilities associated with our Merger restructuring initiatives, including expenses incurred and cash payments, are as follows:
(1) Non-cash items consist of the write-off of assets within Network decommissioning. The liabilities accrued in connection with our Merger restructuring initiatives are presented in Accounts payable and accrued liabilities on our Condensed Consolidated Balance Sheets. Our Merger restructuring activities are expected to occur over the next year with substantially all costs incurred by the end of fiscal year 2023. We are evaluating additional restructuring initiatives, which are dependent on consultations and negotiation with certain counterparties and the expected impact on our business operations, which could affect the amount or timing of the restructuring costs and related payments.
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Additional Financial Information |
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Supplemental Financial Statement Elements [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Additional Financial Information | Note 16 – Additional Financial Information Accounts Payable and Accrued Liabilities Accounts payable and accrued liabilities, excluding amounts classified as held for sale, are summarized as follows:
Book overdrafts included in accounts payable were $453 million and $378 million as of September 30, 2022, and December 31, 2021, respectively. Supplemental Condensed Consolidated Statements of Cash Flows Information The following table summarizes T-Mobile’s supplemental cash flow information:
Cash and cash equivalents, including restricted cash and cash held for sale Cash and cash equivalents, including restricted cash and cash held for sale, presented on our Condensed Consolidated Statements of Cash Flows were included on our Condensed Consolidated Balance Sheets as follows:
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Subsequent Events |
9 Months Ended |
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Sep. 30, 2022 | |
Subsequent Events [Abstract] | |
Subsequent Events | Note 17 – Subsequent Events Subsequent to September 30, 2022, on October 12, 2022, we issued $750 million of 4.910% Class A senior ABS Notes to third-party investors in a private placement transaction. Our ABS Notes are secured by $1.0 billion of gross EIP receivables and future collections on such receivables. See Note 6 – Debt for additional information. Subsequent to September 30, 2022, on October 17, 2022, we entered into an Amended and Restated Credit Agreement. See Note 6 – Debt for additional information. Subsequent to September 30, 2022, from October 1, 2022, through October 20, 2022, we repurchased 5,964,813 shares of our common stock at an average price per share of $136.57 for a total purchase price of $815 million. See Note 9 – Repurchases of Common Stock for additional information regarding the 2022 Stock Repurchase Program.
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Summary of Significant Accounting Policies (Policies) |
9 Months Ended |
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Sep. 30, 2022 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Consolidation | The unaudited condensed consolidated financial statements of T-Mobile US, Inc. (“T-Mobile,” “we,” “our,” “us” or the “Company”) include all adjustments of a normal recurring nature necessary for the fair presentation of the results for the interim periods presented. The results for the interim periods are not necessarily indicative of those for the full year. The condensed consolidated financial statements should be read in conjunction with our consolidated financial statements included in our Annual Report on Form 10-K for the year ended December 31, 2021. On September 6, 2022, Sprint Communications LLC, a Kansas limited liability company and wholly owned subsidiary of the Company (“Sprint Communications”), Sprint LLC, a Delaware limited liability company and wholly owned subsidiary of the Company, and Cogent Infrastructure, Inc., a Delaware corporation (the “Buyer”) and a wholly owned subsidiary of Cogent Communications Holdings, Inc., entered into a Membership Interest Purchase Agreement (the “Purchase Agreement”), pursuant to which the Buyer will acquire the U.S. long-haul fiber network and operations (including the non-U.S. extensions thereof) of Sprint Communications and its subsidiaries (the “Wireline Business”). The assets and liabilities of the Wireline Business disposal group are classified as held for sale and presented within Other current assets and Other current liabilities on our Condensed Consolidated Balance Sheets as of September 30, 2022. The fair value of the Wireline Business disposal group, less costs to sell, will be reassessed during each reporting period it remains classified as held for sale, and any remeasurement to the lower of carrying amount or fair value less costs to sell will be reported as an adjustment included within Loss on disposal group held for sale on our Condensed Consolidated Statements of Comprehensive Income. Unless otherwise specified, the amounts and information presented in the Notes to the Condensed Consolidated Financial Statements include assets and liabilities that have been reclassified as held for sale as of September 30, 2022. On September 8, 2022, our Board of Directors authorized a stock repurchase program for up to $14.0 billion of our common stock through September 30, 2023 (the “2022 Stock Repurchase Program”). The cost of repurchased shares, including equity reacquisition costs, is included in Treasury stock on our Condensed Consolidated Balance Sheets. We accrue the cost of repurchased shares, and exclude such shares from the calculation of basic and diluted earnings per share, as of the trade date. We recognize a liability for share repurchases which have not settled and for which cash has not been paid in Other current liabilities on our Condensed Consolidated Balance Sheets. Cash payments to reacquire our shares, including equity reacquisition costs, are included in Repurchases of common stock on our Condensed Consolidated Statements of Cash Flows. See Note 9 - Repurchases of Common Stock for more information about our 2022 Stock Repurchase Program. The condensed consolidated financial statements include the balances and results of operations of T-Mobile and our consolidated subsidiaries. We consolidate majority-owned subsidiaries over which we exercise control, as well as variable interest entities (“VIEs”) where we are deemed to be the primary beneficiary and VIEs which cannot be deconsolidated, such as those related to our obligations to pay for the management and operation of certain of our wireless communications tower sites. Intercompany transactions and balances have been eliminated in consolidation.
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Basis of Accounting | The preparation of financial statements in conformity with United States (“U.S.”) generally accepted accounting principles (“GAAP”) requires our management to make estimates and assumptions that affect the financial statements and accompanying notes. |
Use of Estimates | Estimates are based on historical experience, where applicable, and other assumptions that management believes are reasonable under the circumstances. Estimates are inherently subject to judgment and actual results could differ from those estimates. |
Accounting Pronouncements Adopted During the Current Year/Accounting Pronouncements Not Yet Adopted | Accounting Pronouncements Adopted During the Current Year Reference Rate Reform In March 2020, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2020-04, “Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting,” and has since modified the standard with ASU 2021-01, “Reference Rate Reform (Topic 848): Scope” (together, the “reference rate reform standard”). The reference rate reform standard provides temporary optional expedients and allows for certain exceptions to applying existing GAAP for contract modifications and hedging relationships, subject to meeting certain criteria, that reference LIBOR or another reference rate expected to be discontinued as a result of reference rate reform. The reference rate reform standard is available for adoption through December 31, 2022, and the optional expedients for contract modifications must be elected for all arrangements within a given Accounting Standards Codification (“ASC”) Topic or Industry Subtopic. As of January 1, 2022, we have elected to apply the practical expedients provided by the reference rate reform standard for all ASC Topics and Industry Subtopics related to eligible contract modifications as they occur. This election did not have a material impact on our condensed consolidated financial statements for the three and nine months ended September 30, 2022, and the impact of applying the election to future eligible contract modifications that occur through December 31, 2022, is also not expected to be material. Contract Assets and Contract Liabilities Acquired in a Business Combination In October 2021, the FASB issued ASU 2021-08, “Business Combinations (Topic 805): Accounting for Contract Assets and Contract Liabilities from Contracts with Customers.” The standard amends ASC 805 such that contract assets and contract liabilities acquired in a business combination are added to the list of exceptions to the recognition and measurement principles such that they are recognized and measured in accordance with ASC 606. As of January 1, 2022, we have elected to adopt this standard, and it will be applied prospectively to all business combinations occurring after this date. Accounting Pronouncements Not Yet Adopted Troubled Debt Restructurings and Vintage Disclosures In March 2022, the FASB issued ASU 2022-02, “Financial Instruments—Credit Losses (Topic 326): Troubled Debt Restructurings and Vintage Disclosures.” The standard eliminates the accounting guidance within ASC 310-40 for troubled debt restructurings by creditors while enhancing disclosure requirements for certain loan refinancings and restructurings by creditors when a borrower is experiencing financial difficulty. Additionally, for public business entities, the standard requires disclosure of current-period gross write-offs by year of origination for financing receivables and net investments in leases within the scope of ASC 326-20. The standard will become effective for us beginning January 1, 2023, and will be applied prospectively, with an option for modified retrospective application for provisions related to recognition and measurement of troubled debt restructurings. Early adoption is permitted for us at any time. We are currently evaluating the impact of the standard on our future consolidated financial statements.
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Receivables and Related Allowance for Credit Losses (Tables) |
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Receivables [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Equipment Installment Plan Receivables | The following table summarizes the EIP receivables, including imputed discounts and related allowance for credit losses:
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Schedule of Equipment Installment Plan Receivables by Credit Category | The following table presents the amortized cost of our EIP receivables by delinquency status, customer credit class and year of origination as of September 30, 2022:
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Schedule of Unamortized Imputed Discount and Allowance for Credit Losses for Equipment Installment Plan Receivables | Activity for the nine months ended September 30, 2022 and 2021, in the allowance for credit losses and unamortized imputed discount balances for the accounts receivable and EIP receivables segments were as follows:
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Sales of Certain Receivables (Tables) |
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Transfers and Servicing [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Variable Interest Entities - EIP | The following table summarizes the carrying amounts and classification of assets, which consist primarily of the deferred purchase price, included on our Condensed Consolidated Balance Sheets with respect to the EIP BRE:
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Schedule of Variable Interest Entities | The following table summarizes the carrying amounts and classification of assets, which consist primarily of the deferred purchase price, and liabilities included on our Condensed Consolidated Balance Sheets with respect to the Service BRE:
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Schedule of Factoring Arrangement | The following table summarizes the impact of the sale of certain service accounts receivable and EIP receivables on our Condensed Consolidated Balance Sheets:
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Spectrum License Transactions (Tables) |
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Sep. 30, 2022 | |||||||||||||||||||||||||||||||||||||||||||
Goodwill and Intangible Assets Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||
Schedule of Spectrum Licenses | The following table summarizes our spectrum license activity for the nine months ended September 30, 2022:
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Fair Value Measurements (Tables) |
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Sep. 30, 2022 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value Disclosures [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Carrying Values and Fair Values of Long-term Debt | The carrying amounts and fair values of our short-term and long-term debt included on our Condensed Consolidated Balance Sheets were as follows:
(1) Excludes $31 million and $47 million as of September 30, 2022, and December 31, 2021, respectively, in other financial liabilities as the carrying values approximate fair value primarily due to the short-term maturities of these instruments. (2) Following the achievement of an investment grade issuer rating from each of the three main credit rating agencies and entry into an amendment to our Credit Agreement, the Senior Secured Notes, other than our Spectrum-Backed Notes, are no longer secured by any of our present or future assets and have been reclassified to Senior Notes to third parties as of September 30, 2022, within the table above. See Note 6 – Debt for additional information.
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Debt (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2022 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Debt Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Debt Balances and Activity | The following table sets forth the debt balances and activity as of and for the nine months ended September 30, 2022:
(1)Issuances and borrowings, note redemptions and reclassifications are recorded net of related issuance costs, discounts and premiums. (2)Other includes the amortization of premiums, discounts, debt issuance costs and consent fees. During the nine months ended September 30, 2022, we issued the following Senior Notes:
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Schedule of Debt Instrument Redemption | During the nine months ended September 30, 2022, we made the following note redemptions and repayments:
Asset-backed Notes Subsequent to September 30, 2022, on October 12, 2022, we issued $750 million of 4.910% Class A senior asset-backed notes (“ABS Notes”) to third-party investors in a private placement transaction. Our ABS Notes are secured by $1.0 billion of gross EIP receivables and future collections on such receivables. In connection with issuing the ABS Notes, we formed a wholly owned subsidiary, which qualifies as a bankruptcy remote entity (the “ABS BRE”), and a trust (the “ABS Trust” and together with the ABS BRE, the “ABS Entities”), in which the ABS BRE holds a residual interest. We will include the balances and results of operations of the ABS Entities in our consolidated financial statements. The ABS BRE’s residual interest in the ABS Trust represents the rights to all funds not needed to make required payments on the ABS Notes and other related payments and expenses. Under the terms of the ABS Notes, our wholly owned subsidiary, T-Mobile Financial LLC (“FinCo”), and certain of our other wholly owned subsidiaries (collectively, the “Originators”) transfer EIP receivables to the ABS BRE, which in turn transfers such receivables to the ABS Trust, which issued the ABS Notes. The Class A senior ABS Notes have an expected weighted average life of approximately 2.5 years. Under the terms of the transaction, there is a two-year revolving period during which we may transfer additional receivables to the ABS Entities as collections on the receivables are received. The third-party investors in the Class A senior ABS Notes have legal recourse only to the assets of the ABS Issuer securing the ABS Notes and do not have any recourse to T-Mobile with respect to the payment of principal and interest. The receivables transferred to the ABS Issuer will only be available for payment of the ABS Notes and other obligations arising from the transaction and will not be available to pay any obligations or claims of T-Mobile’s creditors. Under a parent support agreement, T-Mobile has agreed to guarantee the performance of the obligations of FinCo, which will continue to service the receivables, and the other T-Mobile entities participating in the transaction to the ABS Issuer. However, T-Mobile does not guarantee any principal or interest on the ABS Notes or any payments on the underlying EIP receivables. Net proceeds of $748 million from our ABS Notes will be reflected in Proceeds from issuance of long-term debt in our Consolidated Statements of Cash Flows in the three months ending December 31, 2022. The ABS Notes issued and the assets securing this debt will be included on our Consolidated Balance Sheets. The expected maturities of our ABS Notes are as follows:
Credit Facilities Subsequent to September 30, 2022, on October 17, 2022, T-Mobile USA, Inc., our wholly owned subsidiary, and certain of its affiliates, as guarantors, entered into an Amended and Restated Credit Agreement (the “October 2022 Credit Agreement”) with certain financial institutions named therein. The October 2022 Credit Agreement amends and restates in its entirety the Credit Agreement originally dated April 1, 2020, and provides for a $7.5 billion revolving credit facility, including a letter of credit sub-facility of up to $1.5 billion, and a swingline loan sub-facility of up to $500 million. Commitments under the October 2022 Credit Agreement will mature on October 17, 2027, except as otherwise extended or replaced. Borrowings under the October 2022 Credit Agreement will bear interest based upon the applicable benchmark rate, depending on the type of loan and, in some cases, at our election, plus a margin. The October 2022 Credit Agreement contains customary representations, warranties and covenants, including a financial maintenance covenant of 4.5x with respect to T-Mobile USA, Inc.’s Leverage Ratio (as defined therein) commencing with the period ending December 31, 2022.
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Schedule of Maturities of ABC Notes | The expected maturities of our ABS Notes are as follows:
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Tower Obligations (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2022 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Leases [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Impacts to Consolidated Balance Sheets | The following table summarizes the balances associated with both of the tower arrangements on our Condensed Consolidated Balance Sheets:
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Revenue from Contracts with Customers (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2022 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Revenue from Contract with Customer [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Disaggregation of Revenue | Postpaid service revenues, including postpaid phone revenues and postpaid other revenues, were as follows:
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Schedule of Contract Liability and Receivable Balances | The contract asset and contract liability balances from contracts with customers as of September 30, 2022, and December 31, 2021, were as follows:
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Wireline (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2022 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Discontinued Operations and Disposal Groups [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Assets Held for Sale and Liabilities Held for Sale | The components of assets and liabilities held for sale presented within Other current assets and Other current liabilities, respectively, on our Condensed Consolidated Balance Sheets as of September 30, 2022, were as follows:
(1) Excludes amounts related to the establishment of liabilities for contractual and other payments associated with the Wireline Transaction, including the $700 million of fees payable for IP transit services discounted to present value and other payments to the Buyer anticipated in connection with the Wireline Transaction. The components of the Loss on disposal group held for sale on our Condensed Consolidated Statements of Comprehensive Income for the three and nine months ended September 30, 2022, were as follows:
(1) We will continue to recognize accretion expense through the expiration of the agreement which will be included in Interest expense, net separate from the Loss on disposal group held for sale on our Condensed Consolidated Statements of Comprehensive Income.
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Earnings Per Share (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2022 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Earnings Per Share [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Computation of Basic and Diluted Earnings Per Share | The computation of basic and diluted earnings per share was as follows:
(1) Represents the weighted-average SoftBank Specified Shares that are contingently issuable from the acquisition date of April 1, 2020, pursuant to a letter agreement dated February 20, 2020, between T-Mobile, SoftBank and Deutsche Telekom AG (“DT”).
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Leases (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2022 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Leases [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Components of Lease Expense | The components of lease expense were as follows:
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Schedule of Maturity Operating Lease Liabilities | Maturities of lease liabilities as of September 30, 2022, were as follows:
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Schedule of Maturity Finance Lease Liabilities | Maturities of lease liabilities as of September 30, 2022, were as follows:
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Restructuring Costs (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2022 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Restructuring and Related Activities [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Restructuring Plan Expenses Incurred | The following table summarizes the expenses incurred in connection with our Merger restructuring initiatives:
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Schedule of Activity Related to Expenses Incurred and Cash Payments Made | The changes in the liabilities associated with our Merger restructuring initiatives, including expenses incurred and cash payments, are as follows:
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Additional Financial Information (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Supplemental Financial Statement Elements [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Accounts Payable and Accrued Liabilities | Accounts payable and accrued liabilities, excluding amounts classified as held for sale, are summarized as follows:
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Schedule of Cash Flow, Supplemental Disclosures | The following table summarizes T-Mobile’s supplemental cash flow information:
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Schedule of Restricted Cash | Cash and cash equivalents, including restricted cash and cash held for sale, presented on our Condensed Consolidated Statements of Cash Flows were included on our Condensed Consolidated Balance Sheets as follows:
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Schedule of Cash and Cash Equivalents, Including Cash Held For Sale | Cash and cash equivalents, including restricted cash and cash held for sale, presented on our Condensed Consolidated Statements of Cash Flows were included on our Condensed Consolidated Balance Sheets as follows:
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Sales of Certain Receivables - Sales of EIP Receivables (Details) - USD ($) $ in Millions |
Sep. 30, 2022 |
Dec. 31, 2021 |
---|---|---|
Variable Interest Entity [Line Items] | ||
Other current assets | $ 2,209 | $ 2,005 |
Other assets | 3,877 | 3,232 |
EIP Securitization Arrangement | ||
Variable Interest Entity [Line Items] | ||
Revolving receivables facility, maximum borrowing capacity | 1,300 | 1,300 |
Other current assets | 348 | 424 |
Other assets | $ 118 | $ 125 |
Sales of Certain Receivables - Sales of Service Receivables (Details) - USD ($) $ in Millions |
Sep. 30, 2022 |
Dec. 31, 2021 |
---|---|---|
Variable Interest Entity [Line Items] | ||
Other current assets | $ 2,209 | $ 2,005 |
Other current liabilities | 1,610 | 1,070 |
Variable Interest Entity, Not Primary Beneficiary | Factoring Arrangement | ||
Variable Interest Entity [Line Items] | ||
Revolving receivables facility, maximum borrowing capacity | 950 | |
Revolving receivables facility, outstanding borrowings | 775 | 775 |
Other current assets | 217 | 231 |
Other current liabilities | $ 392 | $ 348 |
Spectrum License Transactions - Spectrum License Activity (Details) - Licensing Agreements $ in Millions |
9 Months Ended |
---|---|
Sep. 30, 2022
USD ($)
| |
Indefinite-lived Intangible Assets [Roll Forward] | |
Beginning balance | $ 92,606 |
Spectrum license acquisitions | 3,148 |
Spectrum licenses transferred to held for sale | (16) |
Costs to clear spectrum | 29 |
Ending balance | $ 95,767 |
Fair Value Measurements - Narrative (Details) - USD ($) $ in Millions |
3 Months Ended | 9 Months Ended | |||
---|---|---|---|---|---|
Sep. 30, 2022 |
Sep. 30, 2021 |
Sep. 30, 2022 |
Sep. 30, 2021 |
Dec. 31, 2021 |
|
Derivative [Line Items] | |||||
Accumulated other comprehensive loss | $ 1,263 | $ 1,263 | $ 1,365 | ||
Level 3 | Fair Value | |||||
Derivative [Line Items] | |||||
Carrying amounts of deferred purchase price assets | 681 | 681 | 779 | ||
Interest Expense | |||||
Derivative [Line Items] | |||||
Amount amortized from AOCI into interest expense | 51 | $ 47 | 151 | $ 140 | |
Amount expected to be amortized from AOCI into interest expense over next 12 months | 215 | ||||
Interest Rate Contract | |||||
Derivative [Line Items] | |||||
Accumulated other comprehensive loss | $ 1,300 | $ 1,300 | $ 1,500 |
Debt - Asset-backed Notes (Details) - A Senior Class - ABS Notes - Subsequent Event $ in Millions |
Oct. 12, 2022
USD ($)
|
---|---|
Debt Instrument [Line Items] | |
Expected Maturity 2024 | $ 198 |
Expected maturity 2025 | $ 552 |
Tower Obligations - Sale Leaseback Transaction (Details) - USD ($) $ in Millions |
Sep. 30, 2022 |
Dec. 31, 2021 |
---|---|---|
Property and equipment, net | ||
Sale Leaseback Transaction [Line Items] | ||
Sale-leasebacks | $ 2,421 | $ 2,548 |
Tower obligations | ||
Sale Leaseback Transaction [Line Items] | ||
Sale-leasebacks | 3,970 | 2,806 |
Other long-term liabilities | ||
Sale Leaseback Transaction [Line Items] | ||
Sale-leasebacks | $ 554 | $ 1,712 |
Revenue from Contracts with Customers - Disaggregation of Revenue (Details) - USD ($) $ in Millions |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2022 |
Sep. 30, 2021 |
Sep. 30, 2022 |
Sep. 30, 2021 |
|
Disaggregation of Revenue [Line Items] | ||||
Revenues | $ 19,477 | $ 19,624 | $ 59,298 | $ 59,333 |
Postpaid phone revenues | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | 10,481 | 9,952 | 31,119 | 29,102 |
Postpaid other revenues | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | 1,067 | 852 | 3,075 | 2,497 |
Total postpaid service revenues | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | 11,548 | 10,804 | 34,194 | 31,599 |
Equipment revenues from the lease of mobile communication devices | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | 311 | 770 | 1,184 | 2,725 |
Wireless service revenues | Sprint | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | $ 144 | $ 179 | $ 433 | $ 563 |
Revenue from Contracts with Customers - Contract Balances (Details) - USD ($) $ in Millions |
3 Months Ended | 9 Months Ended | |||
---|---|---|---|---|---|
Sep. 30, 2022 |
Sep. 30, 2021 |
Sep. 30, 2022 |
Sep. 30, 2021 |
Dec. 31, 2021 |
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Revenue from Contract with Customer [Abstract] | |||||
Contract Assets | $ 286 | $ 286 | $ 286 | ||
Contract Liabilities | 739 | 739 | 763 | ||
Change in contract assets included in other current assets | 0 | ||||
Change in contracts liabilities included in deferred revenue | (24) | ||||
Current portion of contract assets | 222 | 222 | $ 219 | ||
Amounts included in the beginning of year contract liability balance | $ 17 | $ 29 | $ 702 | $ 753 |
Revenue from Contracts with Customers - Contract Costs (Details) - USD ($) |
3 Months Ended | 9 Months Ended | |||
---|---|---|---|---|---|
Sep. 30, 2022 |
Sep. 30, 2021 |
Sep. 30, 2022 |
Sep. 30, 2021 |
Dec. 31, 2021 |
|
Capitalized Contract Cost [Abstract] | |||||
Deferred incremental costs to obtain contracts | $ 1,800,000,000 | $ 1,800,000,000 | $ 1,500,000,000 | ||
Average amortization period, deferred contract costs (in months) | 24 months | 24 months | |||
Amortization of deferred costs | $ 375,000,000 | $ 277,000,000 | $ 1,100,000,000 | $ 789,000,000 | |
Impairment losses recognized on deferred contract cost assets | $ 0 | $ 0 | $ 0 | $ 0 |
Repurchases of Common Stock - Narrative (Details) - USD ($) $ / shares in Units, $ in Millions |
1 Months Ended | 3 Months Ended | 9 Months Ended | |
---|---|---|---|---|
Oct. 20, 2022 |
Sep. 30, 2022 |
Sep. 30, 2022 |
Sep. 08, 2022 |
|
Equity, Class of Treasury Stock [Line Items] | ||||
Repurchases of common stock | $ 669 | $ 669 | ||
2022 Stock Repurchase Program | ||||
Equity, Class of Treasury Stock [Line Items] | ||||
Stock repurchase program, authorized amount | 2,300 | 2,300 | $ 14,000 | |
Share repurchase authorization amount | $ 13,300 | $ 13,300 | $ 3,000 | |
Repurchases of common stock (in shares) | 4,892,315 | 4,892,315 | ||
Average price paid per share (in USD per share) | $ 136.65 | $ 136.65 | ||
Repurchases of common stock | $ 669 | $ 669 | ||
2022 Stock Repurchase Program | Subsequent Event | ||||
Equity, Class of Treasury Stock [Line Items] | ||||
Stock repurchase program, authorized amount | $ 1,500 | |||
Share repurchase authorization amount | $ 12,500 | |||
Repurchases of common stock (in shares) | 5,964,813 | |||
Average price paid per share (in USD per share) | $ 136.57 | |||
Repurchases of common stock | $ 815 |
Wireline - Schedule of Assets held for Sale and Liabilities Held for Sale (Details)(Details) - USD ($) $ in Millions |
Sep. 30, 2022 |
Dec. 31, 2021 |
---|---|---|
Assets | ||
Cash and cash equivalents | $ 28 | $ 0 |
Disposal Group, Held-for-sale, Not Discontinued Operations | Wireline Business | ||
Assets | ||
Cash and cash equivalents | 28 | |
Accounts receivable, net | 38 | |
Prepaid expenses | 5 | |
Other current assets | 4 | |
Property and equipment, net | 503 | |
Operating lease right-of-use assets | 120 | |
Other intangible assets, net | 7 | |
Other assets | 7 | |
Remeasurement of disposal group held for sale to fair value less costs to sell | (371) | |
Assets held for sale | 341 | |
Liabilities | ||
Accounts payable and accrued liabilities | 63 | |
Deferred revenue | 4 | |
Short-term operating lease liabilities | 60 | |
Operating lease liabilities | 259 | |
Other long-term liabilities | 40 | |
Liabilities held for sale | 426 | |
Liabilities held for sale, net | (85) | |
Transaction fees payable | $ 700 |
Wireline - Loss on disposal group held for sale (Details) - USD ($) $ in Millions |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2022 |
Sep. 30, 2021 |
Sep. 30, 2022 |
Sep. 30, 2021 |
|
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||
Loss on disposal group held for sale | $ 1,071 | $ 0 | $ 1,071 | $ 0 |
Disposal Group, Held-for-sale, Not Discontinued Operations | Wireline Business | ||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||
Write-down of Wireline Business net assets | 295 | |||
Accrual of estimated costs to sell | 76 | |||
Recognition of liability for IP transit services agreement | 641 | |||
Recognition of other obligations to Buyer to be paid at or after Closing | 59 | |||
Loss on disposal group held for sale | $ 1,071 |
Income Taxes - Narrative (Details) - USD ($) $ in Millions |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2022 |
Sep. 30, 2021 |
Sep. 30, 2022 |
Sep. 30, 2021 |
|
Income Tax Disclosure [Abstract] | ||||
Income tax expense (benefit) | $ (57) | $ (3) | $ 106 | $ 520 |
Effective tax rate (in percent) | (12.40%) | (0.30%) | 8.70% | 16.70% |
Earnings Per Share - Narrative (Details) - $ / shares |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2022 |
Sep. 30, 2021 |
Sep. 30, 2022 |
Sep. 30, 2021 |
|
SoftBank contingent consideration | ||||
Class of Stock [Line Items] | ||||
Potentially dilutive securities (in shares) | 48,751,557 | 48,751,557 | 48,751,557 | 48,751,557 |
Mandatory Convertible Preferred Stock Series A | ||||
Class of Stock [Line Items] | ||||
Preferred shares authorized (in shares) | 100,000,000 | 100,000,000 | ||
Preferred stock, par value (in USD per share) | $ 0.00001 | $ 0.00001 | ||
Preferred shares outstanding (in shares) | 0 | 0 | 0 | 0 |
Leases - Components of Lease Expense (Details) - USD ($) $ in Millions |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2022 |
Sep. 30, 2021 |
Sep. 30, 2022 |
Sep. 30, 2021 |
|
Leases [Abstract] | ||||
Operating lease expense | $ 1,498 | $ 1,546 | $ 5,231 | $ 4,470 |
Financing lease expense: | ||||
Amortization of right-of-use assets | 188 | 205 | 567 | 553 |
Interest on lease liabilities | 18 | 15 | 49 | 51 |
Total financing lease expense | 206 | 220 | 616 | 604 |
Variable lease expense | 114 | 113 | 363 | 298 |
Total lease expense | $ 1,818 | $ 1,879 | $ 6,210 | $ 5,372 |
Leases - Maturity of Operating and Finance Lease Liabilities (Details) $ in Millions |
Sep. 30, 2022
USD ($)
|
---|---|
Operating Leases | |
2023 | $ 4,679 |
2024 | 4,472 |
2025 | 4,000 |
2026 | 3,652 |
2027 | 3,349 |
Thereafter | 22,091 |
Total lease payments | 42,243 |
Less: imputed interest | 8,286 |
Total | 33,957 |
Finance Leases | |
2023 | 1,286 |
2024 | 999 |
2025 | 544 |
2026 | 54 |
2027 | 23 |
Thereafter | 14 |
Total lease payments | 2,920 |
Less: imputed interest | 91 |
Total | $ 2,829 |
Restructuring Costs - Restructuring Plan Expenses Incurred (Details) $ in Millions |
3 Months Ended | 9 Months Ended |
---|---|---|
Sep. 30, 2022
USD ($)
|
Sep. 30, 2022
USD ($)
|
|
Restructuring Cost and Reserve [Line Items] | ||
Restructuring charges | $ 449 | $ 862 |
Incurred to Date | 2,137 | 2,137 |
Contract termination costs | ||
Restructuring Cost and Reserve [Line Items] | ||
Restructuring charges | 0 | 56 |
Incurred to Date | 248 | 248 |
Severance costs | ||
Restructuring Cost and Reserve [Line Items] | ||
Restructuring charges | 131 | 164 |
Incurred to Date | 566 | 566 |
Network decommissioning | ||
Restructuring Cost and Reserve [Line Items] | ||
Restructuring charges | 318 | 642 |
Incurred to Date | $ 1,323 | $ 1,323 |
Restructuring Costs - Narrative (Details) - USD ($) $ in Millions |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2022 |
Sep. 30, 2021 |
Sep. 30, 2022 |
Sep. 30, 2021 |
|
Restructuring and Related Activities [Abstract] | ||||
Amortization of the right-of-use assets on lease contracts | $ 384 | $ 265 | $ 1,600 | $ 649 |
Additional Financial Information - Accounts Payable and Accrued Liabilities (Details) - USD ($) $ in Millions |
Sep. 30, 2022 |
Dec. 31, 2021 |
---|---|---|
Supplemental Financial Statement Elements [Abstract] | ||
Accounts payable | $ 6,822 | $ 6,499 |
Payroll and related benefits | 1,282 | 1,343 |
Property and other taxes, including payroll | 1,756 | 1,830 |
Accrued interest | 805 | 710 |
Commissions | 340 | 348 |
Toll and interconnect | 216 | 248 |
Other | 750 | 427 |
Accounts payable and accrued liabilities | 11,971 | 11,405 |
Accounts Payable and Accrued Liabilities | ||
Accounts Payable and Accrued Liabilities [Line Items] | ||
Outstanding checks | $ 453 | $ 378 |
Additional Financial Information - Cash and cash equivalents, including restricted cash and cash held for sale (Details) - USD ($) $ in Millions |
Sep. 30, 2022 |
Dec. 31, 2021 |
---|---|---|
Supplemental Financial Statement Elements [Abstract] | ||
Cash and cash equivalents | $ 6,888 | $ 6,631 |
Cash and cash equivalents held for sale (included in Other current Assets) | 28 | 0 |
Restricted cash (included in Other assets) | 73 | 72 |
Cash and cash equivalents, including restricted cash and cash held for sale | $ 6,989 | $ 6,703 |
Subsequent Events - Narrative (Details) - USD ($) |
1 Months Ended | 3 Months Ended | 9 Months Ended | |
---|---|---|---|---|
Oct. 20, 2022 |
Sep. 30, 2022 |
Sep. 30, 2022 |
Oct. 12, 2022 |
|
Subsequent Event [Line Items] | ||||
Repurchases of common stock | $ 669,000,000 | $ 669,000,000 | ||
2022 Stock Repurchase Program | ||||
Subsequent Event [Line Items] | ||||
Shares repurchased (in shares) | 4,892,315 | 4,892,315 | ||
Average price paid per share (in USD per share) | $ 136.65 | $ 136.65 | ||
Repurchases of common stock | $ 669,000,000 | $ 669,000,000 | ||
Subsequent Event | 2022 Stock Repurchase Program | ||||
Subsequent Event [Line Items] | ||||
Shares repurchased (in shares) | 5,964,813 | |||
Average price paid per share (in USD per share) | $ 136.57 | |||
Repurchases of common stock | $ 815,000,000 | |||
ABS Notes | Subsequent Event | ||||
Subsequent Event [Line Items] | ||||
Principal Issuances | $ 750,000,000 | |||
Interest rate, stated percentage | 4.91% | |||
EIP receivables | $ 1,000,000,000 |
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