Allowances and Imputed Discount
The following table summarizes the changes in allowances and unamortized imputed discount related to its current accounts receivables and EIP receivables:
The following table summarizes the changes in unamortized imputed discount related to its long-term EIP receivables:
See Note 3 – Equipment Installment Plan Receivables for further information on EIP receivables and related unamortized imputed discount and allowance for credit losses.
Accounts Payable and Accrued Liabilities
Accounts payable and accrued liabilities are summarized as follows:
Outstanding checks included in accounts payable and accrued liabilities were $409 million and $342 million as of December 31, 2014 and 2013, respectively.
Accumulated Other Comprehensive Income
Prior to the closing of the business combination with MetroPCS, Deutsche Telekom recapitalized T-Mobile by retiring T-Mobile’s long-term debt to affiliates principal balance and all related derivative instruments, which included the interest rate swaps and cross currency interest rate swaps.
The following table presents the effects on net income (loss) of amounts reclassified from AOCI (in millions):
77
(in millions) December 31, 2014 December 31, 2013
Accounts payable $ 5,322 $ 3,026
Property and other taxes, including payroll 605 534
Payroll and related benefits 470 394
Accounts payable and accrued liabilities $ 7,364 $ 4,567
Amount Reclassified from AOCI to Income
Table of Contents
Supplemental Statements of Comprehensive Income (Loss) Information Related Party Transactions
T-Mobile has related party transactions associated with Deutsche Telekom or its affiliates in the ordinary course of business, which are included in the consolidated financial statements.
The following table summarizes the impact of significant transactions with Deutsche Telekom or its affiliates included in operating expenses in the consolidated statements of comprehensive income (loss):
Restructuring Costs
In 2014, T-Mobile began decommissioning the MetroPCS CDMA network and redundant network cell sites. See Note 2 – Business Combination with MetroPCS for further information.
In 2013, T-Mobile initiated a cost restructuring program in order to reduce its overall cost structure to align with its Un-carrier proposition and position T-Mobile for growth. Costs incurred related to the 2013 restructuring program were settled as of December 31, 2013.
In 2012, T-Mobile consolidated its call center operations and restructured operations in other parts of the business to strengthen T-Mobile’s competitiveness. Major costs incurred primarily related to lease buyout costs, severance payments and other personnel-related restructuring costs. Lease buyout costs included in accrued liabilities and other long-term liabilities related to the 2012 restructuring program were not significant as of December 31, 2014 and are being relieved over the remaining lease terms through 2022.
Restructuring expense by restructuring plans included in other, net were as follows:
78
Year Ended December 31,
(in millions) 2014 2013 2012
Discount related to roaming expenses $ (61) $ (16) $ (16)
Fees incurred for use of the T-Mobile brand 60 53 50
Expenses for telecommunications and IT services 24 102 105
Year Ended December 31,
(in millions) 2013 2012
2013 Restructuring program
Restructuring costs $ 54 $ —
2012 Restructuring program
Personnel related restructuring costs — 50
Nonpersonnel related restructuring costs — 35
Total restructuring costs $ 54 $ 85
Supplemental Statements of Cash Flows Information
The following table summarizes T-Mobile’s supplemental cash flows information:
Supplemental Statements of Stockholders’ Equity Information Preferred Stock
In 2014, T-Mobile completed a public offering of 20 million shares of mandatory convertible preferred stock for net proceeds of $982 million.
Dividends on the preferred stock will be payable on a cumulative basis when and if declared by the Company’s board of directors at an annual rate of 5.5%. The dividends may be paid in cash, shares of common stock, subject to certain limitations, or any combination of cash and shares of common stock. For the year ended December 31, 2014, the Company did not declare or pay any dividends on the preferred stock as the first scheduled dividend payment date will be in 2015.
Unless converted earlier, each share of preferred stock will convert automatically on December 15, 2017 into between 1.6119 and 1.9342 shares of common stock, subject to customary anti-dilution adjustments, depending on the applicable market value of the common stock. At any time, the preferred shares may be converted, in whole or in part, at the minimum conversion rate of 1.6119 shares of common stock, except during a fundamental change conversion period. In addition, holders may be entitled to shares based on the amount of accumulated and unpaid dividends. If certain fundamental changes involving the Company occur, the preferred stock may be converted into common shares at the applicable conversion rate, subject to certain anti-dilution adjustments, and holders will also be entitled to a make-whole amount. The preferred stock ranks senior with respect to liquidation preference and dividend rights to common stock. In the event of any voluntary or involuntary liquidation, winding-up or dissolution of the Company, each holder of preferred stock will be entitled to receive a liquidation preference in the amount of $50 per share, plus an amount equal to accumulated and unpaid dividends, after satisfaction of liabilities to the Company’s creditors and before any distribution or payment is made to any holders of common stock. The preferred stock is not redeemable.
Common Stock
In 2013, T-Mobile completed a public offering of 73 million shares of common stock at a price of $25 per share.
79
Year Ended December 31,
(in millions) 2014 2013 2012
Interest and income tax payments:
Interest payments, net of amounts capitalized $ 1,367 $ 1,156 $ 845
Income tax payments 36 20 42
Noncash investing and financing activities:
Increase in accounts payable for purchases of property and equipment 402 6 465
Issuance of short-term debt for financing of property and equipment purchases 256 470 —
Assets acquired under capital lease obligations 77 3 —
Relinquishment of accounts receivable from affiliates in satisfaction of long-term debt to affiliates — — 644
Spectrum license transactions with affiliates — — 1,633
Retirement of long-term debt to affiliates — 14,450 —
Elimination of net unamortized discounts and premiums on long-term debt to affiliates — 434 —
Issuance of new long-term debt to affiliates — 11,200 —
Settlement of accounts receivable from affiliates and other outstanding balances — 363 —
Income tax benefit from debt recapitalization — 178 —
Net assets acquired in MetroPCS business combination, excluding cash acquired — 827 —
Table of Contents