Guarantor Financial Information | Note 11 – Guarantor Financial Information Pursuant to the applicable indentures and supplemental indentures, the long-term debt to affiliates and third parties, excluding Senior Secured Term Loans and capital leases, issued by T-Mobile USA (“Issuer”) is fully and unconditionally guaranteed, jointly and severally, on a senior unsecured basis by T-Mobile (“Parent”) and certain of the Issuer’s 100% owned subsidiaries (“Guarantor Subsidiaries”). In January 2017, T-Mobile USA, and certain of its affiliates, as guarantors, borrowed $4.0 billion under the Incremental Term Loan Facility to refinance $1.98 billion of outstanding secured term loans under its Term Loan Credit Agreement dated November 9, 2015, with the remaining net proceeds from the transaction intended to be used to redeem callable high yield debt. In March 2017, T-Mobile USA and certain of its affiliates, as guarantors, (i) issued $500 million of public 4.000% Senior Notes due 2022 , (ii) issued $500 million of public 5.125% Senior Notes due 2025 and (iii) issued $500 million of public 5.375% Senior Notes due 2027 . See Note 6 - Debt for further information. The guarantees of the Guarantor Subsidiaries are subject to release in limited circumstances only upon the occurrence of certain customary conditions. The indentures governing the long-term debt contain covenants that, among other things, limit the ability of the Issuer and the Guarantor Subsidiaries to: incur more debt; pay dividends and make distributions; make certain investments; repurchase stock; create liens or other encumbrances; enter into transactions with affiliates; enter into transactions that restrict dividends or distributions from subsidiaries; and merge, consolidate, or sell, or otherwise dispose of, substantially all of their assets. Certain provisions of each of the indentures and the supplemental indentures relating to the long-term debt restrict the ability of the Issuer to loan funds or make payments to Parent. However, the Issuer and Guarantor Subsidiaries are allowed to make certain permitted payments to the Parent under the terms of the indentures and the supplemental indentures. Presented below is the condensed consolidating financial information as of March 31, 2017 and December 31, 2016 , and for the three months ended March 31, 2017 and 2016 . Condensed Consolidating Balance Sheet Information March 31, 2017 (in millions) Parent Issuer Guarantor Subsidiaries Non-Guarantor Subsidiaries Consolidating and Eliminating Adjustments Consolidated Assets Current assets Cash and cash equivalents $ 360 $ 3,138 $ 3,937 $ 66 $ — $ 7,501 Accounts receivable, net — — 1,618 233 — 1,851 Equipment installment plan receivables, net — — 1,880 — — 1,880 Accounts receivable from affiliates — 6 37 — (6 ) 37 Inventories — — 1,021 — — 1,021 Asset purchase deposit — — 2,203 — — 2,203 Other current assets — — 831 575 — 1,406 Total current assets 360 3,144 11,527 874 (6 ) 15,899 Property and equipment, net (1) — — 20,878 357 — 21,235 Goodwill — — 1,683 — — 1,683 Spectrum licenses — — 27,150 — — 27,150 Other intangible assets, net — — 338 — — 338 Investments in subsidiaries, net 18,381 36,147 — — (54,528 ) — Intercompany receivables 222 8,302 — — (8,524 ) — Equipment installment plan receivables due after one year, net — — 975 — — 975 Other assets — 7 464 297 — 768 Total assets $ 18,963 $ 47,600 $ 63,015 $ 1,528 $ (63,058 ) $ 68,048 Liabilities and Stockholders' Equity Current liabilities Accounts payable and accrued liabilities $ — $ 279 $ 5,596 $ 285 $ — $ 6,160 Payables to affiliates — 198 64 — (6 ) 256 Short-term debt — 7,116 426 — — 7,542 Deferred revenue — — 934 — — 934 Other current liabilities — — 247 146 — 393 Total current liabilities — 7,593 7,267 431 (6 ) 15,285 Long-term debt — 11,918 1,187 — — 13,105 Long-term debt to affiliates — 9,600 — — — 9,600 Tower obligations (1) — — 399 2,215 — 2,614 Deferred tax liabilities — — 4,842 — — 4,842 Deferred rent expense — — 2,635 — — 2,635 Negative carrying value of subsidiaries, net — — 582 — (582 ) — Intercompany payables — — 8,298 226 (8,524 ) — Other long-term liabilities — 108 893 3 — 1,004 Total long-term liabilities — 21,626 18,836 2,444 (9,106 ) 33,800 Total stockholders' equity (deficit) 18,963 18,381 36,912 (1,347 ) (53,946 ) 18,963 Total liabilities and stockholders' equity $ 18,963 $ 47,600 $ 63,015 $ 1,528 $ (63,058 ) $ 68,048 (1) Assets and liabilities for Non-Guarantor Subsidiaries are primarily included in VIEs related to the 2012 Tower Transaction. See Note 8 – Tower Obligations included in the Annual Report on Form 10-K for the year ended December 31, 2016. Condensed Consolidating Balance Sheet Information December 31, 2016 (in millions) Parent Issuer Guarantor Subsidiaries Non-Guarantor Subsidiaries Consolidating and Eliminating Adjustments Consolidated Assets Current assets Cash and cash equivalents $ 358 $ 2,733 $ 2,342 $ 67 $ — $ 5,500 Accounts receivable, net — — 1,675 221 — 1,896 Equipment installment plan receivables, net — — 1,930 — — 1,930 Accounts receivable from affiliates — — 40 — — 40 Inventories — — 1,111 — — 1,111 Asset purchase deposit — — 2,203 — — 2,203 Other current assets — — 972 565 — 1,537 Total current assets 358 2,733 10,273 853 — 14,217 Property and equipment, net (1) — — 20,568 375 — 20,943 Goodwill — — 1,683 — — 1,683 Spectrum licenses — — 27,014 — — 27,014 Other intangible assets, net — — 376 — — 376 Investments in subsidiaries, net 17,682 35,095 — — (52,777 ) — Intercompany receivables 196 6,826 — — (7,022 ) — Equipment installment plan receivables due after one year, net — — 984 — — 984 Other assets — 7 600 262 (195 ) 674 Total assets $ 18,236 $ 44,661 $ 61,498 $ 1,490 $ (59,994 ) $ 65,891 Liabilities and Stockholders' Equity Current liabilities Accounts payable and accrued liabilities $ — $ 423 $ 6,474 $ 255 $ — $ 7,152 Payables to affiliates — 79 46 — — 125 Short-term debt — 20 334 — — 354 Deferred revenue — — 986 — — 986 Other current liabilities — — 258 147 — 405 Total current liabilities — 522 8,098 402 — 9,022 Long-term debt — 20,741 1,091 — — 21,832 Long-term debt to affiliates — 5,600 — — — 5,600 Tower obligations (1) — — 400 2,221 — 2,621 Deferred tax liabilities — — 5,133 — (195 ) 4,938 Deferred rent expense — — 2,616 — — 2,616 Negative carrying value of subsidiaries, net — — 568 — (568 ) — Intercompany payables — — 6,785 237 (7,022 ) — Other long-term liabilities — 116 906 4 — 1,026 Total long-term liabilities — 26,457 17,499 2,462 (7,785 ) 38,633 Total stockholders' equity (deficit) 18,236 17,682 35,901 (1,374 ) (52,209 ) 18,236 Total liabilities and stockholders' equity $ 18,236 $ 44,661 $ 61,498 $ 1,490 $ (59,994 ) $ 65,891 (1) Assets and liabilities for Non-Guarantor Subsidiaries are primarily included in VIEs related to the 2012 Tower Transaction. See Note 8 – Tower Obligations included in the Annual Report on Form 10-K for the year ended December 31, 2016. Condensed Consolidating Statement of Comprehensive Income Information Three Months Ended March 31, 2017 (in millions) Parent Issuer Guarantor Subsidiaries Non-Guarantor Subsidiaries Consolidating and Eliminating Adjustments Consolidated Revenues Service revenues $ — $ — $ 7,018 $ 525 $ (214 ) $ 7,329 Equipment revenues — — 2,143 — (100 ) 2,043 Other revenues — — 194 52 (5 ) 241 Total revenues — — 9,355 577 (319 ) 9,613 Operating expenses Cost of services, exclusive of depreciation and amortization shown separately below — — 1,402 6 — 1,408 Cost of equipment sales — — 2,540 246 (100 ) 2,686 Selling, general and administrative — — 2,928 246 (219 ) 2,955 Depreciation and amortization — — 1,546 18 — 1,564 Cost of MetroPCS business combination — — — — — — Gains on disposal of spectrum licenses — — (37 ) — — (37 ) Total operating expenses — — 8,379 516 (319 ) 8,576 Operating income — — 976 61 — 1,037 Other income (expense) Interest expense — (264 ) (27 ) (48 ) — (339 ) Interest expense to affiliates — (99 ) (7 ) — 6 (100 ) Interest income — 9 4 — (6 ) 7 Other income (expense), net — 3 (1 ) — — 2 Total other expense, net — (351 ) (31 ) (48 ) — (430 ) Income (loss) before income taxes — (351 ) 945 13 — 607 Income tax benefit (expense) — — 96 (5 ) — 91 Earnings (loss) of subsidiaries 698 1,049 (31 ) — (1,716 ) — Net income 698 698 1,010 8 (1,716 ) 698 Dividends on preferred stock (14 ) — — — — (14 ) Net income attributable to common stockholders $ 684 $ 698 $ 1,010 $ 8 $ (1,716 ) $ 684 Net Income $ 698 $ 698 $ 1,010 $ 8 $ (1,716 ) $ 698 Other comprehensive income, net of tax Other comprehensive income, net of tax 1 1 1 1 (3 ) 1 Total comprehensive income $ 699 $ 699 $ 1,011 $ 9 $ (1,719 ) $ 699 Condensed Consolidating Statement of Comprehensive Income Information Three Months Ended March 31, 2016 (in millions) Parent Issuer Guarantor Subsidiaries (As adjusted - See Note 1) Non-Guarantor Subsidiaries Consolidating and Eliminating Adjustments Consolidated (As adjusted - See Note 1) Revenues Service revenues $ — $ — $ 6,287 $ 463 $ (172 ) $ 6,578 Equipment revenues — — 1,981 — (130 ) 1,851 Other revenues — — 191 (1) 48 (4 ) 235 Total revenues — — 8,459 (1) 511 (306 ) 8,664 Operating expenses Cost of services, exclusive of depreciation and amortization shown separately below — — 1,415 6 — 1,421 Cost of equipment sales — — 2,287 217 (130 ) 2,374 Selling, general and administrative — — 2,724 201 (176 ) 2,749 Depreciation and amortization — — 1,532 20 — 1,552 Cost of MetroPCS business combination — — 36 — — 36 Gains on disposal of spectrum licenses — — (636 ) — — (636 ) Total operating expenses — — 7,358 444 (306 ) 7,496 Operating income — — 1,101 (1) 67 — 1,168 Other income (expense) Interest expense — (274 ) (17 ) (48 ) — (339 ) Interest expense to affiliates — (79 ) — — — (79 ) Interest income (expense) — 8 (5 ) (1) — — 3 Other expense, net — — (2 ) — — (2 ) Total other expense, net — (345 ) (24 ) (1) (48 ) — (417 ) Income (loss) before income taxes — (345 ) 1,077 19 — 751 Income tax expense — — (263 ) (9 ) — (272 ) Earnings (loss) of subsidiaries 479 824 (10 ) — (1,293 ) — Net income 479 479 804 10 (1,293 ) 479 Dividends on preferred stock (14 ) — — — — (14 ) Net income attributable to common stockholders $ 465 $ 479 $ 804 $ 10 $ (1,293 ) $ 465 Net income $ 479 $ 479 $ 804 $ 10 $ (1,293 ) $ 479 Other comprehensive loss, net of tax Other comprehensive loss, net of tax (3 ) (3 ) (3 ) — 6 (3 ) Total comprehensive income $ 476 $ 476 $ 801 $ 10 $ (1,287 ) $ 476 (1) The amortized imputed discount on EIP receivables previously recognized as Interest income has been retrospectively reclassified as Other revenues. See Note 1 Basis of Presentation for further detail. Condensed Consolidating Statement of Cash Flows Information Three Months Ended March 31, 2017 (in millions) Parent Issuer Guarantor Subsidiaries Non-Guarantor Subsidiaries Consolidating and Eliminating Adjustments Consolidated Operating activities Net cash provided by (used in) operating activities $ 1 $ (5,090 ) $ 6,803 $ (1 ) $ — $ 1,713 Investing activities Purchases of property and equipment — — (1,528 ) — — (1,528 ) Purchases of spectrum licenses and other intangible assets, including deposits — — (14 ) — — (14 ) Other, net — — (8 ) — — (8 ) Net cash used in investing activities — — (1,550 ) — — (1,550 ) Financing activities Proceeds from issuance of long-term debt — 5,495 — — — 5,495 Repayments of capital lease obligations — — (90 ) — — (90 ) Repayments of long-term debt — — (3,480 ) — — (3,480 ) Tax withholdings on share-based awards — — (92 ) — — (92 ) Dividends on preferred stock (14 ) — — — — (14 ) Other, net 15 — 4 — — 19 Net cash (used in) provided by financing activities 1 5,495 (3,658 ) — — 1,838 Change in cash and cash equivalents 2 405 1,595 (1 ) — 2,001 Cash and cash equivalents Beginning of period 358 2,733 2,342 67 — 5,500 End of period $ 360 $ 3,138 $ 3,937 $ 66 $ — $ 7,501 Condensed Consolidating Statement of Cash Flows Information Three Months Ended March 31, 2016 (in millions) Parent Issuer Guarantor Subsidiaries Non-Guarantor Subsidiaries Consolidating and Eliminating Adjustments Consolidated Operating activities Net cash provided by (used in) operating activities $ — $ (298 ) $ 1,283 $ 40 $ — $ 1,025 Investing activities Purchases of property and equipment — — (1,335 ) — — (1,335 ) Purchases of spectrum licenses and other intangible assets, including deposits — — (594 ) — — (594 ) Sales of short-term investments — — 75 — — 75 Other, net — — (6 ) — — (6 ) Net cash used in investing activities — — (1,860 ) — — (1,860 ) Financing activities Repayments of capital lease obligations — — (36 ) — — (36 ) Repayments of long-term debt — — (5 ) — — (5 ) Tax withholdings on share-based awards — — (46 ) — — (46 ) Dividends on preferred stock (14 ) — — — — (14 ) Other, net 1 — — — — 1 Net cash used in financing activities (13 ) — (87 ) — — (100 ) Change in cash and cash equivalents (13 ) (298 ) (664 ) 40 — (935 ) Cash and cash equivalents Beginning of period 378 1,767 2,364 73 — 4,582 End of period $ 365 $ 1,469 $ 1,700 $ 113 $ — $ 3,647 |