What changed in this filing

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Item 2. Management’s Discussion and Analysis

2022-05-06 compared with 2021-11-02 · 261 added, 566 removed, 300 unchanged (73% of the section changed)

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Cautionary Statement Regarding Forward-Looking Statements

This Quarterly Report on Form 10-Q (“Form 10-Q”) includes forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995.

This Quarterly Report on Form 10-Q (“Form 10-Q”) of T-Mobile US, Inc.

(“T-Mobile,” “we,” “our,” “us” or the “Company”) includes forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995.

All statements, other than statements of historical fact, including information concerning our future results of operations, are forward-looking statements.

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Forward-looking statements are based on current expectations and assumptions, which are subject to risks and uncertainties that may cause actual results to differ materially from the forward-looking statements.

The following important factors, along with the Risk Factors included in Part II, Item 1A of this Form 10-Q, could affect future results and cause those results to differ materially from those expressed in the forward-looking statements:

• natural disasters, public health crises, including the COVID-19 pandemic (the “Pandemic”), terrorist attacks or similar incidents;

• adverse economic, political or market conditions in the U.S.

and international markets, including those caused by the Pandemic;

• competition, industry consolidation and changes in the market condition for wireless services;

• data loss or other security breaches, such as the criminal cyberattack we became aware of in August 2021;

• the scarcity and cost of additional wireless spectrum, and regulations relating to spectrum use;

• our inability to retain or motivate key personnel, hire qualified personnel or maintain our corporate culture;

The following important factors, along with the Risk Factors included in Part I, Item 1A of our Annual Report on Form 10-K for the year ended December 31, 2021 and Part II, Item 1A of this Form 10-Q, could affect future results and cause those results to differ materially from those expressed in the forward-looking statements:

• adverse impact caused by the COVID-19 pandemic (the “Pandemic”), including supply chain shortages;

• competition, industry consolidation and changes in the market for wireless services;

• disruption, data loss or other security breaches, such as the criminal cyberattack we became aware of in August 2021;

• our inability to take advantage of technological developments on a timely basis;

• our inability to retain or motivate key personnel, hire qualified personnel or maintain our corporate culture;

• system failures and business disruptions, allowing for unauthorized use of or interference with our network and other systems;

• the impacts of the actions we have taken and conditions we have agreed to in connection with the regulatory proceedings and approvals of the Transactions (as defined below), including the acquisition by DISH Network Corporation (“DISH”) of the prepaid wireless business operated under the Boost Mobile and Sprint prepaid brands (excluding the Assurance brand Lifeline customers and the prepaid wireless customers of Shenandoah Personal Communications Company LLC (“Shentel”) and Swiftel Communications, Inc.), including customer accounts, inventory, contracts, intellectual property and certain other specified assets (the “Prepaid Business”), and the assumption of certain related liabilities (the “Prepaid Transaction”), the complaint and proposed final judgment (the “Consent Decree”) agreed to by us, Deutsche Telekom AG (“DT”), Sprint Corporation (“Sprint”), SoftBank Group Corp.

• the scarcity and cost of additional wireless spectrum, and regulations relating to spectrum use;

• the impacts of the actions we have taken and conditions we have agreed to in connection with the regulatory proceedings and approvals of the Transactions (as defined below), including the acquisition by DISH Network Corporation (“DISH”) of the prepaid wireless business operated under the Boost Mobile and Sprint prepaid brands (excluding the Assurance brand Lifeline customers and the prepaid wireless customers of Shenandoah Personal Communications Company LLC and Swiftel Communications, Inc.), including customer accounts, inventory, contracts, intellectual property and certain other specified assets, and the assumption of certain related liabilities (collectively, the “Prepaid Transaction”), the complaint and proposed final judgment agreed to by us, Deutsche Telekom AG (“DT”), Sprint Corporation, now known as Sprint LLC (“Sprint”), SoftBank Group Corp.

(“SoftBank”) and DISH with the U.S.

District Court for the District of Columbia, which was approved by the Court on April 1, 2020, the proposed commitments filed with the Secretary of the Federal Communications Commission (“FCC”), which we announced on May 20, 2019, certain national security commitments and undertakings, and any other commitments or undertakings entered into, including but not limited to, those we have made to certain states and nongovernmental organizations (collectively, the “Government Commitments”), and the challenges in satisfying the Government Commitments in the required time frames and the significant cumulative cost incurred in tracking, monitoring and complying with them;

• our inability to manage the ongoing commercial and transition services arrangements that we entered into with DISH in connection with the Prepaid Transaction, which we completed on July 1, 2020, and known or unknown liabilities arising in connection therewith;

• adverse economic, political or market conditions in the U.S.

and international markets, including changes resulting from increases in inflation, impacts of current geopolitical instability caused by the war in Ukraine, and those caused by the Pandemic;

• our inability to manage the ongoing commercial and transition services arrangements entered into in connection with the Prepaid Transaction, and known or unknown liabilities arising in connection therewith;

• the effects of any future acquisition, investment, or merger involving us;

• any disruption or failure of our third parties (including key suppliers) to provide products or services for the operation of our business;

• the occurrence of high fraud rates or volumes related to device financing, customer payment cards, third-party dealers, employees, subscriptions, identities or account takeover fraud;

• our substantial level of indebtedness and our inability to service our debt obligations in accordance with their terms or to comply with the restrictive covenants contained therein;

• adverse changes in the ratings of our debt securities or adverse conditions in the credit markets;

• the risk of future material weaknesses we may identify while we work to integrate and align policies, principles and practices of the two companies following the Merger (as defined below), or any other failure by us to maintain effective internal controls, and the resulting significant costs and reputational damage;

• changes in the credit market conditions, credit rating downgrades or an inability to access debt markets;

• restrictive covenants including the agreements governing our indebtedness and other financings;

• the risk of future material weaknesses we may identify while we continue to work to integrate and align policies, principles and practices of the two companies following the Merger (as defined below), or any other failure by us to maintain effective internal controls, and the resulting significant costs and reputational damage;

• any changes in regulations or in the regulatory framework under which we operate;

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• unfavorable outcomes of existing or future legal proceedings, including these proceedings and inquiries relating to the criminal cyberattack we became aware of in August 2021;

• the possibility that we may be unable to adequately protect our intellectual property rights or be accused of infringing the intellectual property rights of others;

• our offering of regulated financial services products and exposure to a wide variety of state and federal regulations;

• new or amended tax laws or regulations or administrative interpretations and judicial decisions affecting the scope or application of tax laws or regulations;

• the possibility that we may be unable to renew our spectrum leases on attractive terms or the possible revocation of our existing licenses in the event that we violate applicable laws;

• our exclusive forum provision as provided in our Certificate of Incorporation;

• interests of our significant stockholders that may differ from the interests of other stockholders;

• future sales of our common stock by DT and SoftBank and our inability to attract additional equity financing outside the United States due to foreign ownership limitations by the FCC;

• the volatility of our stock price and our lack of plan to pay cash dividends in the foreseeable future;

• failure to realize the expected benefits and synergies of the merger (the “Merger”) with Sprint, pursuant to the Business Combination Agreement with Sprint and the other parties named therein (as amended, the “Business Combination Agreement”) and the other transactions contemplated by the Business Combination Agreement (collectively, the “Transactions”) in the expected time frames or in the amounts anticipated;

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• unanticipated difficulties, disruption, or significant delays in our long-term strategy to migrate Sprint’s legacy customers onto T-Mobile’s existing billing platforms.

• changes to existing or the issuance of new accounting standards by the Financial Accounting Standards Board or other regulatory agencies.

Given these risks and uncertainties, readers are cautioned not to place undue reliance on such forward-looking statements.

We undertake no obligation to revise or publicly release the results of any revision to these forward-looking statements, except as required by law.

In this Form 10-Q, unless the context indicates otherwise, references to “T-Mobile,” “our Company,” “the Company,” “we,” “our,” and “us” refer to T-Mobile US, Inc.

as a stand-alone company prior to April 1, 2020, the date we completed the Merger with Sprint, and on and after April 1, 2020, refer to the combined company as a result of the Merger.

Investors and others should note that we announce material information to our investors using our investor relations website (https://investor.t-mobile.com), newsroom website (https://t-mobile.com/news), press releases, SEC filings and public conference calls and webcasts.

We intend to also use certain social media accounts as means of disclosing information about us and our services and for complying with our disclosure obligations under Regulation FD (the @TMobileIR Twitter account (https://twitter.com/TMobileIR) and the @MikeSievert Twitter account (https://twitter.com/MikeSievert), which Mr.

Sievert also uses as a means for personal communications and observations).

We intend to also use certain social media accounts as means of disclosing information about us and our services and for complying with our disclosure obligations under Regulation FD (the @TMobileIR Twitter account (https://twitter.com/TMobileIR), the @MikeSievert Twitter account (https://twitter.com/MikeSievert), which Mr.

Sievert also uses as a means for personal communications and observations, and the @TMobileCFO Twitter Account (https://twitter.com/tmobilecfo) and our Chief Financial Officer’s LinkedIn account (https://www.linkedin.com/in/peter-osvaldik-3887394), both of which Mr.

Osvaldik also uses as a means for personal communication and observations).

The information we post through these social media channels may be deemed material.

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• A narrative explanation from the perspective of management of our financial condition, results of operations, cash flows, liquidity and certain other factors that may affect future results;

• Context to the financial statements;

• Context to the condensed consolidated financial statements;

• Information that allows assessment of the likelihood that past performance is indicative of future performance.

Our MD&A is performed on a consolidated basis and is inclusive of the results and operations of Sprint prospectively from the close of the Merger on April 1, 2020.

The Merger enhanced our spectrum portfolio, increased our customer base, altered our product mix and created opportunities for synergies in our operations.

We anticipate an initial increase in our combined operating costs, which we expect to decrease as we realize synergies.

We expect the trends and results of operations of the combined company to be materially different than those of the standalone entities.

Our MD&A is provided as a supplement to, and should be read together with, our unaudited condensed consolidated financial statements for the three and nine months ended September 30, 2021, included in Part I, Item 1 of this Form 10-Q and audited consolidated financial statements included in Part II, Item 8 of our Annual Report on Form 10-K for the year ended December 31, 2020.

Our MD&A is provided as a supplement to, and should be read together with, our unaudited condensed consolidated financial statements as of and for the three months ended March 31, 2022, included in Part I, Item 1 of this Form 10-Q, and audited consolidated financial statements, included in Part II, Item 8 of our Annual Report on Form 10-K for the year ended December 31, 2021.

Except as expressly stated, the financial condition and results of operations discussed throughout our MD&A are those of T-Mobile US, Inc.

and its consolidated subsidiaries.

Sprint Merger

Transaction Overview

On April 1, 2020, we completed the Merger with Sprint, a communications company offering a comprehensive range of wireless and wireline communications products and services.

As a result, Sprint and its subsidiaries became wholly owned consolidated subsidiaries of T-Mobile.

The Merger has altered the size and scope of our operations, impacting our assets, liabilities, obligations, capital requirements and performance measures.

We expect the trends and results of operations of the combined company to be materially different than those of the standalone entities.

As a combined company, we have been able to enhance the breadth and depth of our nationwide 5G network, accelerate innovation, increase competition in the U.S.

wireless and broadband industries and achieve significant synergies and cost reductions by eliminating redundancies within the combined network as well as other business processes and operations.

For more information regarding the Merger, see Note 2 – Business Combinations of the Notes to the Condensed Consolidated Financial Statements.

Shentel Wireless Assets Acquisition

On July 1, 2021, we completed the acquisition of Shentel’s wireless telecommunications assets (the “Wireless Assets”) used to provide Sprint PCS’s wireless mobility communications network products in certain parts of Maryland, North Carolina, Virginia, West Virginia, Kentucky, Ohio and Pennsylvania.

As a result, T-Mobile become the legal owner of the Wireless Assets.

This transaction represented an opportunity to reacquire the exclusive rights to deliver Sprint’s wireless network services in Shentel’s former affiliate territory and simplify our operations.

The acquisition of the Wireless Assets has altered the composition of certain assets and liabilities on our balance sheet, including Goodwill and Other intangible assets.

For more information regarding our acquisition of the Wireless Assets, see Note 2 – Business Combinations of the Notes to the Condensed Consolidated Financial Statements.

Sprint Merger and Integration Activities

Merger-Related Costs

Merger-related costs associated with the Merger and acquisitions of affiliates generally include:

• Integration costs to achieve efficiencies in network, retail, information technology and back office operations, migrate customers to the T-Mobile network and the impact of legal matters assumed as part of the Merger;

• Integration costs to achieve efficiencies in network, retail, information technology and back office operations, migrate customers to the T-Mobile network and billing systems and the impact of legal matters assumed as part of the Merger;

• Restructuring costs, including severance, store rationalization and network decommissioning;

• Transaction costs, including legal and professional services related to the completion of the transactions.

Transaction and restructuring costs are disclosed in Note 2 – Business Combinations and Note 1 4 - Restructuring Costs , respectively, of the Notes to the Condensed Consolidated Financial Statements.

Restructuring costs are disclosed in Note 12 – Restructuring Costs of the Notes to the Condensed Consolidated Financial Statements.

Merger-related costs have been excluded from our calculations of Adjusted EBITDA and Core Adjusted EBITDA, which are non-GAAP financial measures, as we do not consider these costs to be reflective of our ongoing operating performance.

See “Adjusted EBITDA and Core Adjusted EBITDA” in the “ Performance Measures ” section of this MD&A.

Cash payments for Merger-related costs, including payments related to our restructuring plan, are included in Net cash provided by operating activities in our Condensed Consolidated Statements of Cash Flows.

Merger-related costs during the three and nine months ended September 30, 2021 and 2020, are presented below:

(in millions) Three Months Ended

September 30, Change Nine Months Ended

September 30, Change

Net cash payments for Merger-related costs, including payments related to our restructuring plan, are included in Net cash provided by operating activities on our Condensed Consolidated Statements of Cash Flows.

Merger-related costs are presented below:

(in millions) Three Months Ended March 31, Change

2022 2021 $ %

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Cost of services, exclusive of depreciation and amortization $ 607 $ 136 $ 471 346 %

Cost of equipment sales 236 — 236 NM 340 — 340 NM

Cost of equipment sales, exclusive of depreciation and amortization 751 17 734 NM

Selling, general and administrative 55 145 (90) (62) %

Total Merger-related costs $ 1,413 $ 298 $ 1,115 374 %

Cash payments for Merger-related costs $ 617 $ 379 $ 238 63 % $ 1,084 $ 910 $ 174 19 %

Net cash payments for Merger-related costs $ 893 $ 277 $ 616 222 %

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Merger-related costs will be impacted by restructuring and integration activities expected to occur over the next three years, increasing throughout 2021 and 2022, as we implement initiatives to realize cost efficiencies from the Merger.

Transaction costs, including legal and professional service fees related to the completion of the Merger and acquisitions of affiliates, are expected to continue to decrease in periods subsequent to the close of the Merger and acquisitions of affiliates.

We expect to incur a total of $12.0 billion of Merger-related costs, excluding capital expenditures, of which $7.9 billion has been incurred since the beginning of 2018, including $700 million of costs incurred by Sprint prior to the Merger.

We expect to incur the remaining $4.1 billion to complete our integration and restructuring activities over the next two years with substantially all costs incurred by the end of 2023.

Total Merger related costs for the twelve months ended December 31, 2022 are expected to be between $4.5 billion to $5.0 billion, including $1.4 billion incurred during the three months ended March 31, 2022.

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.

We expect our principal sources of funding to be sufficient to meet our liquidity requirements and anticipated payments associated with the restructuring initiatives.

Restructuring

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• The decommissioning of certain small cell sites and distributed antenna systems to achieve synergies in network costs.

Anticipated Impacts

Our integration and restructuring activities are expected to occur over the next three years with substantially all costs incurred by the end of fiscal year 2023.

We expect our principal sources of funding to be sufficient to meet our liquidity requirements and anticipated payments associated with the restructuring initiatives.

As a result of our ongoing restructuring activities, we expect to realize cost efficiencies by eliminating redundancies within our combined network as well as other business processes and operations.

We expect these activities to result in a reduction of expenses within Cost of services and Selling, general and administrative in our Condensed Consolidated Statements of Comprehensive Income.

For more information regarding our restructuring activities, see Note 12 – Restructuring Costs of the Notes to the Condensed Consolidated Financial Statements.

As we previously reported in our Current Reports on Forms 8-K furnished with the Securities and Exchange Commission on August 16, 17, 20 and 27, 2021, we were subject to a criminal cyberattack involving unauthorized access to T-Mobile’s systems.

We became aware of a potential issue on August 12, 2021.

We immediately began a forensic investigation and engaged cybersecurity experts to assist with the assessment of the incident and to help determine what data was impacted.

As we previously reported, we promptly located and closed the unauthorized access to our systems.

Our investigation uncovered that the perpetrator 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.

Based on the initial investigation findings, we moved to quickly identify current, former and prospective customers whose information was impacted and notify them, consistent with state and federal requirements.

Simultaneously, we undertook a

number of other measures to demonstrate our continued support and commitment to data privacy and protection and continued to work with our cybersecurity experts to finish our forensic investigation, with the goal to ensure we had a complete understanding of the scope and impact of the unauthorized access.

We also coordinated our efforts with law enforcement.

Our forensic investigation took time, but it is now complete, although our overall investigation into the incident is ongoing.

At this time, we believe we have a full view of the data compromised.

We have no evidence that individual financial account numbers, such as full credit or debit card numbers, were accessed or taken in relation to the cyberattack.

Throughout our forensic investigation of this cyberattack, our top priority has been to support those individuals impacted by the cyberattack.

We sent notifications to our customers and customer accounts whose names, dates of birth, Social Security numbers (“SSNs”)/Tax Identifiers (“Tax IDs”) and driver’s license/identification numbers (“ID Numbers”) were taken, consistent with state and federal requirements, including to approximately 7.8 million current customer accounts and approximately 40.0 million former and prospective customers.

We also notified an additional 1.9 million former and prospective customers who had their names, dates of birth and ID Numbers (but not valid SSNs/Tax IDs) taken.

Out of an abundance of caution during the earliest days of our investigation and to help alleviate consumer concerns and confusion, we rapidly sent notifications to approximately 5.3 million customer accounts who had their names, dates of birth and addresses taken.

These accounts did not have SSNs/Tax IDs or ID Numbers taken.

Later in our investigation, we identified approximately 790,000 additional former and prospective customers who had similar information — names, dates of birth and, in many cases, addresses, but not SSNs/Tax IDs or ID Numbers — taken and sent them notifications consistent with state and federal requirements.

Our investigation also identified approximately 26.0 million additional individuals with the same types of information taken, but for whom individual notifications were not required under state and federal law in light of the types of information taken.

By that point, since our original notifications, we had already launched a broad-reaching communications outreach program through which we kept our customers and the public informed and made information available and accessible on our website to provide support for any individuals who may have been impacted, including information on how they could take steps to protect themselves.

We also took actions to proactively reset the personal identification numbers (“PINs”) for approximately 870,000 current customer accounts whose names and PINs may have been taken.

We previously reported that further data files including phone numbers, International Mobile Equipment Identity (“IMEI”) numbers and International Mobile Subscriber Identity (“IMSI”) numbers were taken;

a significant portion of this data was related to inactive devices.

For a number of additional current Metro customers, these files included names but no other personally identifiable information.

As described above, taking steps to further ensure we are supporting individuals impacted by the cyberattack has been a top priority.

As previously reported, this support has included:

• Offering two years of free identity protection services with McAfee’s ID Theft Protection Service to any person who believes they may be affected;

• Recommending that all eligible customers sign up for free scam-blocking protection through Scam Shield;

• Supporting individuals impacted by the cyberattack with additional best practices and practical security steps such as resetting PINs and passwords;

• Publishing a customer support webpage that includes information and access to these tools at https://www.t-mobile.com/brand/data-breach-2021 1 .

As described above, we take data protection and the protection of our customers very seriously, and we have worked diligently to further enhance security across our platforms throughout this process.

As part of those efforts, and as we have previously reported, we have entered into long-term partnerships with the industry-leading cybersecurity experts at Mandiant, and with consulting firm KPMG LLP, as part of our efforts to ensure that the Company has cybersecurity practices that are among the best in our industry.

We have also created a Cyber Transformation Office reporting directly to our Chief Executive Officer that will be responsible for managing our efforts.

We have incurred certain cyberattack-related expenses which were not material and expect to continue to incur additional expenses in future periods, including costs to investigate and remediate the attack, send notifications to customers and provide additional customer support and enhance customer protection, only some of which may be covered and reimbursable by insurance.

Anticipated Impacts

As a result of our ongoing restructuring activities, we expect to realize synergies by eliminating redundancies within our combined network as well as other business processes and operations.

For full-year 2022, we expect synergies from Selling, general and administrative expense reductions of $2.3 billion to $2.4 billion and Cost of service expense reductions of $1.6 billion to $1.7 billion.

Other Potential Impacts

The operation of the legacy Sprint CDMA and LTE networks is partially supported by legacy Sprint’s Wireline network acquired through the Merger.

We expect that the legacy Sprint CDMA and LTE networks will be decommissioned during 2022.

In accordance with ASC 360-10, we assess long-lived assets for impairment when events or circumstances indicate that long-lived assets might be impaired.

We expect that the decommissioning of the legacy Sprint CDMA and LTE networks will trigger impairments of certain Wireline long-lived assets as these assets will no longer support our wireless network and the associated customers and cash flows.

The potential non-cash impairment charges are not expected to have a material impact on our condensed consolidated financial statements.

As we previously reported, we were subject to a criminal cyberattack involving unauthorized access to T-Mobile’s systems.

We promptly located and closed the unauthorized access to our systems.

Our forensic investigation was completed in October 2021, although our overall investigation into the incident is ongoing.

There are no material updates with respect to the August 2021 cyberattack and subsequent inquiries, investigations, litigations and remedial measures from our Annual Report on Form 10-K for the year ended December 31, 2021, except as disclosed in Note 11 – Commitment and Contingencies .

We have incurred certain cyberattack-related expenses that were not material and expect to continue to incur additional expenses in future periods, including costs to remediate the attack, provide additional customer support and enhance customer protection, only some of which may be covered and reimbursable by insurance.

We also intend to commit substantial additional resources towards cybersecurity initiatives over the next several years.

1 The reference to this website is intended to be an inactive textual reference and information on or accessible from such website is not included or incorporated in this report.

It is not possible to precisely measure the amount of lost revenue directly attributable to the cyberattack.

We are unable to predict the full impact of the cyberattack on customer behavior in the future, including whether a change in our customers’ behavior could negatively impact our results of operations on an ongoing basis.

Accordingly, we are not able to predict with any certainty any possible future impact to our revenues or expenses attributable to the cyberattack, which could have a material adverse effect on our future results.

As a result of the attack, we are subject to numerous arbitration demands and lawsuits, including class action lawsuits, and regulatory inquiries as described in Note 13 – Commitments and Contingencies of the Notes to the Condensed Consolidated Financial Statements and Part II, Item 1.

Legal Proceedings, and we could be subject to additional lawsuits and inquiries.

We are cooperating fully with regulators in connection with the inquiries, though we cannot predict the timing or outcome of any of these inquiries.

In light of the inherent uncertainties involved in such matters and based on the information currently available to us, as of the date of this Quarterly Report, we have not recorded any accruals for losses related to the above proceedings and inquiries as any such amounts (or ranges of amounts) are not probable or estimable at this time.

We believe it is reasonably possible that we could incur losses associated with these proceedings and inquiries, and the Company 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.

Losses associated with any adverse judgments, settlements, penalties or other resolutions of such proceedings and inquiries, including ongoing costs related thereto, could be material to our business, reputation, financial condition, cash flows and operating results in future periods.

COVID-19 Pandemic

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and international debt and equity markets.

The impact of the Pandemic has been wide-ranging, including, but not limited to, the temporary closures of many businesses and schools, “shelter in place” orders, travel restrictions, social distancing guidelines and other governmental, business and individual actions taken in response to the Pandemic.

These restrictions have impacted, and will continue to impact, our business, including the demand for our products and services and the ways in which our customers purchase and use them.

In addition, the Pandemic has resulted in economic uncertainty and a significant increase in unemployment in the United States, which could affect our customers’ purchasing decisions and ability to make timely payments.

Beginning in the first quarter of 2020, the Pandemic has peaked, subsided and seen a resurgence, leading to phased re-openings, as well as continuing or renewed containment measures.

The availability of vaccines, as well as our continued social distancing measures and incremental cleaning efforts, have facilitated the continued operation of our retail stores, after certain closures during 2020.

In addition, the Pandemic has resulted in economic uncertainty, which could affect our customers’ purchasing decisions and ability to make timely payments.

Current and future Pandemic-related restrictions on, or disruptions of, transportation networks and supply chain shortages could impact our ability to acquire handsets or other end user devices in amounts sufficient to meet customer demand and to obtain the equipment required to meet our current and future network build-out plans.

We will continue to monitor the Pandemic and its impacts and may adjust our actions as needed to continue to provide our products and services to our communities and employees.

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Set forth below is a summary of our consolidated financial results:

Three Months Ended

September 30, Change Nine Months Ended

September 30, Change

Three Months Ended March 31, Change

(in millions) 2022 2021 $ %

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Prepaid revenues 2,455 2,351 104 4 %

Wholesale revenues 944 930 14 2 % 2,776 1,663 1,113 67 %

Other service revenues 493 617 (124) (20) % 1,772 1,430 342 24 %

Wholesale and other service revenues 1,472 1,538 (66) (4) %

Total service revenues 15,128 14,192 936 7 %

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Selling, general and administrative 5,056 4,805 251 5 %

Impairment expense — — — NM — 418 (418) (100) %

Depreciation and amortization 3,585 4,289 (704) (16) %

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Other income (expense)

Interest expense (780) (765) (15) 2 % (2,392) (1,726) (666) 39 %

Interest expense to affiliates (58) (44) (14) 32 % (136) (206) 70 (34) %

Interest income 2 3 (1) (33) % 7 21 (14) (67) %

Interest expense, net (864) (835) (29) 3 %

Other expense, net (11) (125) 114 (91) %

Total other expense, net (875) (960) 85 (9) %

Income from continuing operations before income taxes 688 1,660 (972) (59) % 3,122 2,709 413 15 %

Income tax benefit (expense) 3 (407) 410 (101) % (520) (715) 195 (27) %

Income from continuing operations 691 1,253 (562) (45) % 2,602 1,994 608 30 %

Income from discontinued operations, net of tax — — — NM — 320 (320) (100) %

Income before income taxes 931 1,179 (248) (21) %

Income tax expense (218) (246) 28 (11) %

Net income $ 713 $ 933 $ (220) (24) %

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Core Adjusted EBITDA 6,463 5,864 599 10 %

Free Cash Flow, excluding gross payments for the settlement of interest rate swaps 1,559 352 1,207 343 % 4,534 2,525 2,009 80 %

NM - Not Meaningful

The following discussion and analysis is for the three and nine months ended September 30, 2021, compared to the same period in 2020 unless otherwise stated.

Total revenues increased $352 million, or 2%, for the three months ended and increased $11.3 billion, or 23%, for the nine months ended September 30, 2021.

Free Cash Flow 1,649 1,304 345 26 %

The following discussion and analysis is for the three months ended March 31, 2022, compared to the same period in 2021 unless otherwise stated.

Total revenues increased $361 million, or 2%.

The components of these changes are discussed below.

Postpaid revenues increased $595 million, or 6%, for the three months ended and increased $5.5 billion, or 21%, for the nine months ended September 30, 2021.

The increase for the three and nine months ended September 30, 2021, was primarily from:

Postpaid revenues increased $898 million, or 9%, primarily from:

• Higher average postpaid accounts;

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See “Postpaid ARPA” in the “ Performance Measures ” section of this MD&A.

Prepaid revenues increased $98 million, or 4%, for the three months ended and increased $192 million, or 3%, for the nine months ended September 30, 2021, primarily from:

• Higher average prepaid customers;

Prepaid revenues increased $104 million, or 4%, primarily from:

• Higher prepaid ARPU.

See “Prepaid ARPU” in the “ Performance Measures ” section of this MD&A;

Wholesale revenues increased $14 million, or 2%, for the three months ended and increased $1.1 billion, or 67%, for the nine months ended September 30, 2021.

The increase for the nine months ended September 30, 2021, was primarily from:

• Our Master Network Service Agreement with DISH, which went into effect on July 1, 2020;

• The success of our other MVNO relationships.

Other service revenues decreased $124 million, or 20%, for the three months ended and increased $342 million, or 24%, for the nine months ended September 30, 2021.

The decrease for the three months ended September 30, 2021, was primarily from:

• Lower advertising and wireline revenues;

partially offset by

• Higher Lifeline revenues.

The increase for the nine months ended September 30, 2021, was primarily from:

• Higher Lifeline revenues, primarily associated with operations acquired in the Merger;

• Inclusion of wireline operations acquired in the Merger.

Equipment revenues decreased $293 million, or 6%, for the three months ended and increased $3.9 billion, or 34%, for the nine months ended September 30, 2021.

The decrease for the three months ended September 30, 2021, was primarily from:

• A decrease of $580 million in lease revenues due to a lower number of customer devices under lease due to the planned shift in device financing from leasing to EIP;

• A decrease of $117 million in liquidation revenues primarily due to a lower volume of returned devices;

• Higher average prepaid customers.

Wholesale and other service revenues were essentially flat.

Equipment revenues decreased $652 million, or 12%, primarily from:

• A decrease of $554 million in lease revenues and a decrease of $139 million in customer purchases of leased devices primarily due to a lower number of customer devices under lease as a result of the continued strategic shift from device financing from leasing to EIP;

partially offset by

• An increase of $67 million in device sales revenue, excluding purchased leased devices, primarily from:

• Higher average revenue per device sold driven by a higher mix of phone versus other devices, partially offset by an increase in promotional activities;

• An increase in the number of devices sold driven by switching activity returning to more normalized levels compared to the muted conditions from the Pandemic in the prior year and the planned shift in device financing from leasing to EIP.

The increase for the nine months ended September 30, 2021, was primarily from:

• An increase of $3.3 billion in device sales revenue, excluding purchased leased devices, primarily from:

• An increase in the number of devices sold due to a larger customer base as a result of the Merger, switching activity returning to more normalized levels compared to the muted conditions from the Pandemic in the prior year and the planned shift in device financing from leasing to EIP;

• Higher average revenue per device sold driven by a higher mix of phone versus other devices, partially offset by an increase in promotional activities;

• An increase of $325 million in sales of accessories, due to increased retail store traffic due to closures arising from the Pandemic in the prior period and a larger customer base as a result of the Merger;

• An increase of $208 million in liquidation revenues, primarily due to an increase in the high-end device mix and a higher volume of returned devices;

• An increase of $198 million in purchased leased devices, primarily due to a larger base of leased devices as a result of the Merger;

• An increase in the number of devices sold, including higher upgrade volume;

partially offset by

• A decrease of $212 million in lease revenues due to a lower number of customer devices under lease due to the planned shift in device financing from leasing to EIP.

Other revenues increased $62 million, or 34%, for the three months ended and increased $204 million, or 41%, for the nine months ended September 30, 2021, primarily from higher interest income on our EIP receivables.

Operating expenses increased $1.3 billion, or 8%, for the three months ended and increased $10.4 billion, or 24%, for the nine months ended September 30, 2021.

• Lower average revenue per device sold primarily due to higher promotions, which included promotions for Sprint customers to facilitate their migration to the T-Mobile network, partially offset by an increase in the high-end phone mix.

Other revenues were essentially flat.

Operating expenses increased $694 million, or 4%.

The components of this change are discussed below.

Cost of services , exclusive of depreciation and amortization, increased $224 million, or 7%, for the three months ended and increased $2.4 billion, or 29%, for the nine months ended September 30, 2021.

The increase for the three months ended September 30, 2021, was primarily from:

• An increase of $200 million in Merger-related costs, including incremental costs associated with network decommissioning and integration;

• Higher lease expenses related to a new tower master lease agreement executed in 2020.

The increase for the nine months ended September 30, 2021, was primarily from:

• An increase in expenses associated with leases and backhaul agreements acquired in the Merger and the continued build-out of our nationwide 5G network, including a new tower master lease agreement in 2020;

• An increase of $569 million in Merger-related costs including incremental costs associated with network decommissioning and integration;

• Higher employee-related and benefit-related costs primarily due to increased headcount as a result of the Merger.

Cost of equipment sales , exclusive of depreciation and amortization, increased $778 million, or 18%, for the three months ended and increased $5.2 billion, or 49%, for the nine months ended September 30, 2021.

The increase for the three months ended September 30, 2021, was primarily from:

Cost of services , exclusive of depreciation and amortization, increased $343 million, or 10%, primarily from:

• An increase of $471 million in Merger-related costs related to network decommissioning and integration costs;

• Higher lease expenses related to a new tower master lease agreement;

partially offset by

• Higher realized Merger synergies.

Cost of equipment sales , exclusive of depreciation and amortization, increased $804 million, or 16%, primarily from:

• An increase of $987 million in device cost of equipment sales, excluding purchased leased devices, primarily from:

• Higher average costs per device sold due to a higher mix of phone versus other devices;

• An increase in the number of devices sold driven by switching activity returning to more normalized levels relative to the muted conditions from the Pandemic in the prior year and the planned shift in device financing from leasing to EIP;

• An increase in the number of devices sold, including higher upgrade volume, primarily to facilitate the migration of Sprint customers to the T-Mobile network;

• Higher average costs per device sold due to an increase in the high-end device mix;

partially offset by

• A decrease of $127 million in costs related to liquidation due to a lower volume of returned devices.

• Merger-related costs, primarily related to moving Sprint customers to devices that are compatible with the T-Mobile network, were $236 million compared to no Merger-related costs for the three months ended September 30, 2020.

The increase for the nine months ended September 30, 2021, was primarily from:

• An increase of $4.7 billion in device cost of equipment sales, excluding purchased leased devices, primarily from:

• An increase in the number of devices sold due to a larger customer base as a result of the Merger, switching activity returning to more normalized levels relative to the muted conditions from the Pandemic in the prior year and the planned shift in device financing from leasing to EIP;

• Higher average costs per device sold due to a higher mix of phone versus other devices;

• An increase of $183 million in costs related to the liquidation of a higher volume of returned devices;

• An increase of $156 million in cost of accessories, due to increased retail store traffic due to closures arising from the Pandemic in the prior period and a larger customer base as result of the Merger;

• An increase of $100 million in leased device cost of equipment sales, primarily due to a larger base of leased devices as a result of the Merger.

• Merger-related costs, primarily related to moving Sprint customers to devices that are compatible with the T-Mobile network, were $340 million compared to no Merger-related costs for the nine months ended September 30, 2020.

Selling, general and administrative expenses increased $336 million, or 7%, for the three months ended and increased $672 million, or 5%, for the nine months ended September 30, 2021.

The increase for the three months ended September 30, 2021, was primarily from:

• Merger-related costs of $440 million primarily related to integration, restructuring and legal-related expenses, compared to $209 million of Merger-related costs for the three months ended September 30, 2020;

• Higher advertising expenses.

The increase for the nine months ended September 30, 2021, was primarily from:

• Higher advertising, external labor and professional services and lease expenses primarily from the Merger;

• Higher employee-related costs due to an increase in the number of employees primarily from the Merger;

• A decrease of $284 million in customer purchases of leased devices primarily due to a lower number of customer devices under lease as a result of the continued strategic shift from device financing from leasing to EIP.

• Merger-related costs, primarily to facilitate the migration of Sprint customers to the T-Mobile network, were $751 million for the three months ended March 31, 2022, compared to $17 million for the three months ended March 31, 2021.

Selling, general and administrative expenses increased $251 million, or 5%, primarily from:

• Higher bad debt expense primarily due to estimated credit losses normalizing from muted Pandemic levels, as well as higher EIP receivables driven by higher equipment sales and a mix shift in device financing;

partially offset by

• Lower bad debt expense.

• Selling, general and administrative expenses for the nine months ended September 30, 2020 included $458 million of supplemental employee payroll, third-party commissions and cleaning-related COVID-19 costs.

There were insignificant COVID-19 costs for the nine months ended September 30, 2021.

• Merger-related costs of $836 million primarily related to integration, restructuring and legal-related expenses, compared to $1.1 billion of Merger-related costs for the nine months ended September 30, 2020.

Depreciation and amortization decreased slightly for the three months ended and increased $2.6 billion, or 26%, for the nine months ended September 30, 2021.

The decrease for the three months ended September 30, 2021, was primarily from:

• Lower Merger-related costs and higher realized Merger synergies.

• Selling, general and administrative expenses for the three months ended March 31, 2022 included $55 million of Merger-related costs primarily related to integration, restructuring and legal-related expenses, offset by legal settlement gains, compared to $145 million of Merger-related costs for the three months ended March 31, 2021.

Depreciation and amortization decreased $704 million, or 16%, primarily from:

• Lower depreciation expense on leased devices resulting from a lower number of total customer devices under lease;

• Lower amortization of customer relationship intangibles;

• Higher depreciation expense, excluding leased devices, from the continued build-out of our nationwide 5G network.

The increase for the nine months ended September 30, 2021, was primarily from:

• Higher depreciation expense, excluding leased devices, from the continued build-out of our nationwide 5G network;

• Higher depreciation expense on leased devices resulting from a larger base of leased devices as a result of the Merger;

• Higher amortization from intangible assets.

Operating income , the components of which are discussed above, decreased $981 million, or 38%, for the three months ended and increased $905 million, or 18%, for the nine months ended September 30, 2021.

Interest expense increased $15 million, or 2%, for the three months ended and increased $666 million, or 39%, for the nine months ended September 30, 2021.

The increase for the nine months ended September 30, 2021, was primarily from:

• Higher average debt outstanding due to debt assumed in the Merger and the issuance of debt;

• Lower capitalized interest;

partially offset by

• A lower average effective interest rate due to refinancing of existing debt at lower rates.

Interest expense to affiliates increased $14 million, or 32%, for the three months ended and decreased $70 million, or 34%, for the nine months ended September 30, 2021.

The decrease for the nine months ended September 30, 2021, was primarily from:

• Lower average debt outstanding due to the redemption of debt;

• Certain 4G-related network assets becoming fully depreciated;

partially offset by

• Lower capitalized interest.

Other expense, net decreased $39 million, or 39%, for the three months ended and decreased $118 million, or 39%, for the nine months ended September 30, 2021, primarily from lower losses on the extinguishment of debt.

Income from continuing operations before income taxes , the components of which are discussed above, was $688 million and $1.7 billion for the three months ended September 30, 2021 and 2020, respectively, and was $3.1 billion and $2.7 billion for the nine months ended September 30, 2021 and 2020, respectively.

Income tax expense decreased $410 million for the three months ended and decreased $195 million, or 27%, for the nine months ended September 30, 2021.

The decrease for the three months ended September 30, 2021, was primarily from:

• Tax benefits 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;

• Lower Income from continuing operations before income taxes.

Our effective tax rate was (0.3)% and 24.5% for the three months ended September 30, 2021 and 2020, respectively.

The decrease for the nine months ended September 30, 2021, was primarily from:

• A reduction in expenses that were not deductible for tax purposes;

• Higher depreciation expense, excluding leased devices, from the continued build-out of our nationwide 5G network.

Operating income , the components of which are discussed above, decreased $333 million, or 16%.

Interest expense, net was essentially flat.

Other expense, net decreased $114 million, or 91%, primarily from lower losses on the extinguishment of debt.

Income before income taxes , the components of which are discussed above, was $931 million and $1.2 billion for the three months ended March 31, 2022 and 2021, respectively.

Income tax expense decreased $28 million, or 11%, primarily from:

• Lower Income before income taxes;

partially offset by

• Higher Income from continuing operations before income taxes.

Our effective tax rate was 16.7% and 26.4% for the nine months ended September 30, 2021 and 2020, respectively.

Income from continuing operations was $691 million and $1.3 billion for the three months ended September 30, 2021 and 2020, respectively, and was $2.6 billion and $2.0 billion for the nine months ended September 30, 2021 and 2020, respectively.

The changes in Income from continuing operations were primarily due to the items discussed above.

Income from discontinued operations, net of tax, was $320 million for the nine months ended September 30, 2020, and consisted of the results of the Prepaid Business that was divested on July 1, 2020.

There were no discontinued operations for the three months ended September 30, 2020 and for the three and nine months ended September 30, 2021.

Net income , the components of which are discussed above, decreased $562 million, or 45%, for the three months ended and increased $288 million, or 12%, for the nine months ended September 30, 2021.

Net income for the three months ended September 30, 2021, included the following:

• Merger-related costs, net of tax, of $707 million for the three months ended September 30, 2021, compared to $208 million for the three months ended September 30, 2020.

Net income for the nine months ended September 30, 2021, included the following:

• Merger-related costs, net of tax, of $1.4 billion for the nine months ended September 30, 2021, compared to $960 million for the nine months ended September 30, 2020;

• Impairment expense of $366 million, net of tax, for the nine months ended September 30, 2020, compared to no impairment expense for the nine months ended September 30, 2021;

• The negative impact of supplemental employee payroll, third-party commissions and cleaning-related COVID-19 costs, net of tax, of $339 million for the nine months ended September 30, 2020, compared to an insignificant impact for the nine months ended September 30, 2021.

• A higher effective tax rate, primarily from:

• A decrease in excess tax benefits related to the vesting of restricted stock awards;

• Reduced benefits from tax credits.

Our effective tax rate was 23.3% and 20.9% for the three months ended March 31, 2022 and 2021, respectively.

Net income , the components of which are discussed above, decreased $220 million, or 24%, and included the following:

• Merger-related costs, net of tax, of $1.1 billion for the three months ended March 31, 2022, compared to $220 million for the three months ended March 31, 2021.

Guarantor Financial Information

On April 1, 2020, in connection with the closing of the Merger, we assumed certain registered debt to third parties issued by Sprint, Sprint Communications, Inc.

and Sprint Capital Corporation (collectively, the “Sprint Issuers”).

Amounts previously disclosed for the estimated values of certain acquired assets and liabilities assumed have been adjusted based on additional information arising subsequent to the initial valuation.

These revisions to the estimated values did not have a significant impact on our summarized financial information for the consolidated obligor group.

In connection with our Merger with Sprint, we assumed certain registered debt to third parties issued by Sprint, Sprint Communications LLC, formerly known as Sprint Communications, Inc.

(“Sprint Communications”) and Sprint Capital Corporation (collectively, the “Sprint Issuers”).

Pursuant to the applicable indentures and supplemental indentures, the Senior Notes to affiliates and third parties issued by T-Mobile USA, Inc.

1 unchanged sentence

Pursuant to the applicable indentures and supplemental indentures, the Senior Secured Notes to third parties issued by T-Mobile USA, Inc.

are fully and unconditionally guaranteed, jointly and severally, on a senior secured basis by Parent and the Guarantor Subsidiaries, except for the Unsecured Guarantees of Sprint Corporation, Sprint Communications, Inc., and Sprint Capital Corporation, which are provided on a senior unsecured basis.

are fully and unconditionally guaranteed, jointly and severally, on a senior secured basis by Parent and the Guarantor

Subsidiaries, except for the guarantees of Sprint, Sprint Communications and Sprint Capital Corporation, which are provided on a senior unsecured basis.

The guarantees of the Guarantor Subsidiaries are subject to release in limited circumstances only upon the occurrence of certain customary conditions.

3 unchanged sentences

Basis of Presentation

The following tables include summarized financial information of the obligor groups of debt issued by T-Mobile USA, Inc., Sprint, Sprint Communications, Inc., and Sprint Capital Corporation.

The following tables include summarized financial information of the obligor groups of debt issued by T-Mobile USA, Inc., Sprint, Sprint Communications and Sprint Capital Corporation.

The summarized financial information of each obligor group is presented on a combined basis with balances and transactions within the obligor group eliminated.

Investments in and the equity in earnings of non-guarantor subsidiaries, which would otherwise be consolidated in accordance with U.S.

GAAP, are excluded from the below summarized financial information pursuant to SEC Regulation S-X Rule 13-01.

Investments in and the equity in earnings of non-guarantor subsidiaries, which would otherwise be consolidated in accordance with GAAP, are excluded from the below summarized financial information pursuant to SEC Regulation S-X Rule 13-01.

The summarized balance sheet information for the consolidated obligor group of debt issued by T-Mobile USA, Inc.

is presented in the table below:

(in millions) September 30, 2021 December 31, 2020

(in millions) March 31, 2022 December 31, 2021

Current assets $ 16,068 $ 19,522

4 unchanged sentences

Due to related parties 2,815 3,842

Due from related parties 21 22

The summarized results of operations information for the consolidated obligor group of debt issued by T-Mobile USA, Inc.

is presented in the table below:

Nine Months Ended September 30, 2021

Year Ended December 31, 2020

Three Months Ended March 31, 2022

December 31, 2021

(in millions)

1 unchanged sentence

Operating income 891 3,835

Net income 727 1,148

Net (loss) income (48) 402

Revenue from non-guarantors 578 1,769

1 unchanged sentence

Other expense to non-guarantors (41) (148)

The summarized balance sheet information for the consolidated obligor group of debt issued by Sprint and Sprint Communications, Inc.

is presented in the table below:

(in millions) September 30, 2021 December 31, 2020

The summarized balance sheet information for the consolidated obligor group of debt issued by Sprint and Sprint Communications is presented in the table below:

(in millions) March 31, 2022 December 31, 2021

Current assets $ 7,992 $ 11,969

4 unchanged sentences

Due to related parties 2,815 3,842

The summarized results of operations information for the consolidated obligor group of debt issued by Sprint and Sprint Communications, Inc., since the acquisition of Sprint on April 1, 2020, is presented in the table below:

Nine Months Ended September 30, 2021 Nine Months Ended December 31, 2020

The summarized results of operations information for the consolidated obligor group of debt issued by Sprint and Sprint Communications is presented in the table below:

Three Months Ended March 31, 2022 Year Ended

December 31, 2021

(in millions)

2 unchanged sentences

Net loss (851) (2,161)

Revenue from non-guarantors 2 6

Other income, net, from non-guarantors 337 1,706

The summarized balance sheet information for the consolidated obligor group of debt issued by Sprint Capital Corporation is presented in the table below:

(in millions) September 30, 2021 December 31, 2020

(in millions) March 31, 2022 December 31, 2021

Current assets $ 7,992 $ 11,969

4 unchanged sentences

Due to related parties 2,815 3,842

The summarized results of operations information for the consolidated obligor group of debt issued by Sprint Capital Corporation, since the acquisition of Sprint on April 1, 2020, is presented in the table below:

Nine Months Ended September 30, 2021 Nine Months Ended December 31, 2020

The summarized results of operations information for the consolidated obligor group of debt issued by Sprint Capital Corporation is presented in the table below:

Three Months Ended March 31, 2022 Year Ended

December 31, 2021

(in millions)

2 unchanged sentences

Net loss (832) (2,590)

Revenue from non-guarantors 2 6

Other income, net, from non-guarantors 430 2,076

Affiliates Whose Securities Collateralize Securities Registered or Being Registered

For a description of the collateral arrangements relating to securities of affiliates that collateralize the Senior Secured Notes, please refer to the section entitled “Affiliates Whose Securities Collateralize the Notes and the Guarantees” in the Company’s Registration Statement on Form S-4/A filed with the SEC on April 21, 2021, which section is incorporated herein by reference.

Affiliates Whose Securities Collateralize the Senior Secured Notes

The collateral arrangements relating to securities of affiliates that collateralize the Senior Secured Notes are the same as those described in the section entitled “Affiliates Whose Securities Collateralize the Notes and the Guarantees” in the Company’s Registration Statement on Form S-4/A filed with the SEC on April 22, 2022, which section is incorporated herein by reference.

The assets, liabilities and results of operations of the combined affiliates whose securities are pledged as collateral are not materially different than the corresponding amounts presented in the condensed consolidated financial statements of the Company.

Performance Measures

In managing our business and assessing financial performance, we supplement the information provided by our financial statements with other operating or statistical data and non-GAAP financial measures.

In managing our business and assessing financial performance, we supplement the information provided by our condensed consolidated financial statements with other operating or statistical data and non-GAAP financial measures.

These operating and financial measures are utilized by our management to evaluate our operating performance and, in certain cases, our ability to meet liquidity requirements.

Although companies in the wireless industry may not define each of these measures in precisely the same way,

we believe that these measures facilitate comparisons with other companies in the wireless industry on key operating and financial measures.

The performance measures presented below include the impact of the Merger on a prospective basis from the close date of April 1, 2020, and the impact of the acquisition of the Wireless Assets from Shentel on a prospective basis from the close date of July 1, 2021.

Historical results prior to the respective close dates have not been retroactively adjusted.

Although companies in the wireless industry may not define each of these measures in precisely the same way, we believe that these measures facilitate comparisons with other companies in the wireless industry on key operating and financial measures.

Total Postpaid Accounts

A postpaid account is generally defined as a billing account number that generates revenue.

Postpaid accounts generally consist of customers that are qualified for postpaid service utilizing phones, High Speed Internet, wearables, DIGITS or other connected devices, which include tablets and SyncUp products, where they generally pay after receiving service.

As of March 31, Change

(in thousands) 2022 2021 # %

Total postpaid customer accounts (1)(2)

27,507 26,014 1,493 6 %

(1) Customers impacted by the decommissioning of the legacy Sprint CDMA network, who did not migrate to the T-Mobile network, have been excluded from our postpaid account base resulting in the removal of 57,000 postpaid accounts in the first quarter of 2022.

(2) In the first quarter of 2021, we acquired 4,000 postpaid accounts through our acquisition of an affiliate.

Total postpaid customer accounts increased 1,493,000, or 6%, primarily due to the continued focus on growing new relationships with customers driven by higher switching activity and growth in new and under-penetrated segments, including High Speed Internet.

Postpaid Net Account Additions

The following table sets forth the number of postpaid net account additions:

Three Months Ended March 31, Change

(in thousands) 2022 2021 # %

Postpaid net account additions 348 257 91 35 %

Postpaid net account additions increased 91,000, or 35%, primarily due to the continued focus on growing new relationships with customers driven by higher switching activity and growth in new and under-penetrated segments, including High Speed Internet.

A customer is generally defined as a SIM number with a unique T-Mobile identifier which is associated with an account that generates revenue.

Customers are qualified either for postpaid service utilizing phones, home internet, wearables, DIGITS or other connected devices, which include tablets and SyncUp products, where they generally pay after receiving service, or prepaid service, where they generally pay in advance of receiving service.

Customers are qualified either for postpaid service utilizing phones, High Speed Internet, wearables, DIGITS or other connected devices, which include tablets and SyncUp products, where they generally pay after receiving service, or prepaid service, where they generally pay in advance of receiving service.

The following table sets forth the number of ending customers:

As of September 30, Change

As of March 31, Change

(in thousands) 2022 2021 # %

6 unchanged sentences

Prepaid customers 21,118 20,865 253 1 %

21,007 20,630 377 2 %

Total customers 109,541 103,437 6,104 6 %

Acquired customers, net of base adjustments (1) (2)

818 29,228 (28,410) (97) %

(1) Includes customers acquired in connection with the Merger and certain customer base adjustments.

See Customer Base Adjustments and Net Customer Additions tables below.

(558) 12 (570) NM

(1) Customers impacted by the decommissioning of the legacy Sprint CDMA network, who did not migrate to the T-Mobile network, have been excluded from our postpaid customer base resulting in the removal of 212,000 postpaid phone customers and 349,000 postpaid other customers in the first quarter of 2022.

In connection with our acquisition of companies, we included a base adjustment in the first quarter of 2022 to increase postpaid phone customers by 17,000 and reduce postpaid other customers by 14,000.

(2) In the first quarter of 2021, we acquired 11,000 postpaid phone customers and 1,000 postpaid other customers through our acquisition of an affiliate.

In the third quarter of 2021, we acquired 716,000 postpaid phone customers and 90,000 postpaid other customers through our acquisition of the Wireless Assets from Shentel.

NM - Not Meaningful

Total customers increased 6,104,000, or 6%, primarily from:

• Higher postpaid phone customers, primarily due to the continued success of new customer segments and rate plans and continued growth in existing and new markets, along with targeted promotional activity and increased retail store traffic due to closures arising from the Pandemic in the prior period;

• Higher postpaid other customers, primarily due to growth in other connected devices, primarily related to public and educational sector customers and wearable products, and growth in home internet;

• Higher postpaid phone customers, primarily due to the continued focus on growing new relationships with customers, driven by higher switching activity and growth in new and under-penetrated segments;

• Higher postpaid other customers, primarily due to growth in other connected devices, including growth in High Speed Internet and wearable products;

• Higher prepaid customers, primarily due to the continued success of our prepaid business due to promotional activity and rate plan offers;

Customer Base Adjustments

Certain adjustments were made to align the customer reporting policies of T-Mobile and Sprint.

The adjustments made to the reported T-Mobile and Sprint ending customer base as of March 31, 2020, are presented below:

(in thousands) Postpaid phone customers Postpaid other customers Total postpaid customers Prepaid customers Total customers

Reconciliation to beginning customers

T-Mobile customers as reported, end of period March 31, 2020 40,797 7,014 47,811 20,732 68,543

Sprint customers as reported, end of period March 31, 2020 25,916 8,428 34,344 8,256 42,600

Total combined customers, end of period March 31, 2020 66,713 15,442 82,155 28,988 111,143

Reseller reclassification to wholesale customers (1)

(199) (2,872) (3,071) — (3,071)

EIP reclassification from postpaid to prepaid (2)

(963) — (963) 963 —

Divested prepaid customers (3)

— — — (9,207) (9,207)

Rate plan threshold (4)

(182) (918) (1,100) — (1,100)

Customers with non-phone devices (5)

(226) 226 — — —

Collection policy alignment (6)

(150) (46) (196) — (196)

Miscellaneous adjustments (7)

(141) (43) (184) (302) (486)

Total Adjustments (1,861) (3,653) (5,514) (8,546) (14,060)

Adjusted beginning customers as of April 1, 2020 64,852 11,789 76,641 20,442 97,083

(1) In connection with the closing of the Merger, we refined our definition of wholesale customers, resulting in the reclassification of certain postpaid and prepaid reseller customers to wholesale customers.

Starting with the three months ended March 31, 2020, we discontinued reporting wholesale customers to focus on postpaid and prepaid customers and wholesale revenues, which we consider more relevant than the number of wholesale customers given the expansion of M2M and IoT products.

(2) Prepaid customers with a device installment billing plan historically included as Sprint postpaid customers have been reclassified to prepaid customers to align with T-Mobile policy.

(3) Customers associated with the Sprint wireless prepaid and Boost Mobile brands that were divested on July 1, 2020, have been excluded from our reported customers.

(4) Customers who have rate plans with monthly recurring charges which are considered insignificant have been excluded from our reported customers.

(5) Customers with postpaid phone rate plans without a phone (e.g., non-phone devices) have been reclassified from postpaid phone to postpaid other customers to align with T-Mobile policy.

(6) Certain Sprint customers subject to collection activity for an extended period of time have been excluded from our reported customers to align with T-Mobile policy.

(7) Miscellaneous insignificant adjustments to align with T-Mobile policy.

partially offset by lower prepaid industry demand associated with continued industry shift to postpaid plans.

Total customers included High Speed Internet customers of 984,000 and 193,000 as of March 31, 2022 and 2021, respectively.

Net Customer Additions

The following table sets forth the number of net customer additions:

Three Months Ended

September 30, Change Nine Months Ended

September 30, Change

Three Months Ended March 31, Change

(in thousands) 2022 2021 # %

3 unchanged sentences

Total postpaid customers 1,318 1,210 108 9 %

Prepaid customers 66 56 10 18 % 293 61 232 NM

Prepaid customers 62 151 (89) (59) %

Total customers 1,380 1,361 19 1 %

1 unchanged sentence

NM - Not Meaningful

Total net customer additions decreased 710,000, or 35%, for the three months ended and increased 109,000, or 3%, for the nine months ended September 30, 2021.

The decrease for the three months ended September 30, 2021, was primarily from:

• Lower postpaid other net customer additions, primarily due to elevated gross additions in the prior period related to the public and educational sector resulting from the Pandemic, as well as higher churn in the current period related to post-Pandemic demand levels;

• Lower postpaid phone net customer additions, primarily due to higher churn, mostly offset by higher gross additions driven by switching activity returning to more normalized levels relative to muted conditions from the Pandemic in the prior year and continued growth from T-Mobile for Business;

partially offset by

• Higher prepaid net customer additions, primarily driven by higher gross additions, partially offset by higher churn and migrations to postpaid plans.

The increase for the nine months ended September 30, 2021, was primarily from:

• Higher postpaid phone net customer additions, primarily due to increased retail store traffic due to closures arising from the Pandemic in the prior period, partially offset by higher churn;

• Higher prepaid net customer additions, primarily due to lower churn;

Total net customer additions increased 19,000, or 1%, primarily from:

• Higher postpaid other net customer additions, primarily due to an increase in High Speed Internet customers, connected devices and wearables;

partially offset by

• Lower postpaid other net customer additions, primarily due to elevated gross additions in the prior period related to the public and educational sector resulting from the Pandemic and higher disconnects from an increased customer base.

• Lower postpaid phone net customer additions driven by a focus on deepening Sprint customer relationships in the prior year in order to decrease churn, as Sprint customers historically had fewer lines per account, partially offset by higher industry switching activity and lower churn;

• Lower prepaid net customer additions associated with the continued industry shift to postpaid plans, partially offset by lower churn.

• High Speed Internet net customer additions included in postpaid other net customer additions were 329,000 and 93,000 for the three months ended March 31, 2022 and 2021, respectively.

High Speed Internet net customer additions included in prepaid net customer additions were 9,000 for the three months ended March 31, 2022.

There were no prepaid High Speed Internet customer additions for the three months ended March 31, 2021.

Churn represents the number of customers whose service was disconnected as a percentage of the average number of customers during the specified period further divided by the number of months in the period.

2 unchanged sentences

The following table sets forth the churn:

Three Months Ended

September 30, Change Nine Months Ended

September 30, Change

2021 2020 2021 2020

Postpaid phone churn 0.96 % 0.90 % 6 bps 0.93 % 0.85 % 8 bps

Prepaid churn 2.90 % 2.86 % 4 bps 2.76 % 3.07 % -31 bps

Postpaid phone churn increased 6 basis points for the three months ended and increased 8 basis points for the nine months ended September 30, 2021.

The increase for the three months ended September 30, 2021, was primarily from:

• More normalized switching activity relative to the muted Pandemic-driven conditions a year ago;

• Elevated Sprint churn during the accelerated integration process.

The increase for the nine months ended September 30, 2021, was primarily from:

• Higher churn from customers acquired in the Merger;

• More normalized switching activity relative to the muted Pandemic-driven conditions a year ago.

Prepaid churn increased 4 basis points for the three months ended and decreased 31 basis points for the nine months ended September 30, 2021.

The increase for the three months ended September 30, 2021, was primarily from more normalized switching activity relative to the muted Pandemic-driven conditions a year ago.

The decrease for the nine months ended September 30, 2021, was primarily from:

• Promotional activity;

• Improved quality of recently acquired customers.

Total Postpaid Accounts

A postpaid account is generally defined as a billing account number that generates revenue.

Postpaid accounts are generally comprised of customers that are qualified for postpaid service utilizing phones, home internet, wearables, DIGITS or other connected devices which include tablets and SyncUp products, where they generally pay after receiving service.

As of September 30, Change

(in thousands) 2021 2020 # %

Accounts, end of period

Total postpaid customer accounts (1)(2)

26,901 25,623 1,278 5 %

(1) Includes accounts acquired in connection with the Merger and certain account base adjustments.

See Account Base Adjustments table below.

(2) In the third quarter of 2021, we acquired 270,000 postpaid accounts through our acquisition of the Wireless Assets of Shentel.

Total postpaid customer accounts increased 1,278,000, or 5%, primarily due to the continued success of new customer segments and rate plans, continued growth in existing and new markets, including our home internet product, along with promotional activity and increased retail store traffic due to closures arising from the Pandemic in the prior period.

Account Base Adjustments

Certain adjustments were made to align the account reporting policies of T-Mobile and Sprint.

The adjustments made to the reported T-Mobile and Sprint ending account base as of March 31, 2020 are presented below:

(in thousands) Postpaid Accounts

Reconciliation to beginning accounts

T-Mobile accounts as reported, end of period March 31, 2020 15,244

Sprint accounts, end of period March 31, 2020 11,246

Total combined accounts, end of period March 31, 2020 26,490

Reseller reclassification to wholesale accounts (1)

EIP reclassification from postpaid to prepaid (2)

Rate plan threshold (3)

Collection policy alignment (4)

Miscellaneous adjustments (5)

Total Adjustments (1,105)

Adjusted beginning accounts as of April 1, 2020 25,385

(1) In connection with the closing of the Merger, we refined our definition of wholesale accounts resulting in the reclassification of certain postpaid and prepaid reseller accounts to wholesale accounts.

(2) Prepaid accounts with a customer with a device installment billing plan historically included as Sprint postpaid accounts have been reclassified to prepaid accounts to align with T-Mobile policy.

(3) Accounts with customers who have rate plans with monthly recurring charges which are considered insignificant have been excluded from our reported accounts.

(4) Certain Sprint accounts subject to collection activity for an extended period of time have been excluded from our reported accounts to align with T-Mobile policy.

(5) Miscellaneous insignificant adjustments to align with T-Mobile policy.

Average Revenue Per User

ARPU represents the average monthly service revenue earned from customers.

We believe ARPU provides management, investors and analysts with useful information to assess and evaluate our service revenue per customer and assist in forecasting our future service revenues generated from our customer base.

Postpaid phone ARPU excludes postpaid other customers and related revenues, which include home internet, wearables, DIGITS and other connected devices such as tablets and SyncUp products.

The following table illustrates the calculation of our operating measure ARPU and reconciles this measure to the related service revenues:

(in millions, except average number of customers and ARPU) Three Months Ended

September 30, Change Nine Months Ended

September 30, Change

2021 2020 $ % 2021 2020 $ %

Calculation of Postpaid Phone ARPU

Postpaid service revenues $ 10,804 $ 10,209 $ 595 6 % $ 31,599 $ 26,055 $ 5,544 21 %

Postpaid other revenues (852) (677) (175) 26 % (2,497) (1,605) (892) 56 %

Postpaid phone service revenues 9,952 9,532 420 4 % 29,102 24,450 4,652 19 %

Average number of postpaid phone customers (in thousands) and number of months in period 69,033 65,437 3,596 5 % 67,848 56,971 10,877 19 %

Postpaid phone ARPU $ 48.06 $ 48.55 $ (0.49) (1) % $ 47.66 $ 47.69 $ (0.03) NM

Calculation of Prepaid ARPU

Prepaid service revenues $ 2,481 $ 2,383 $ 98 4 % $ 7,259 $ 7,067 $ 192 3 %

Average number of prepaid customers (in thousands) and number of months in period 20,936 20,632 304 1 % 20,886 20,591 295 1 %

Prepaid ARPU $ 39.49 $ 38.49 $ 1.00 3 % $ 38.61 $ 38.13 $ 0.48 1 %

NM - Not Meaningful

Postpaid Phone ARPU

Postpaid phone ARPU decreased $0.49, or 1%, for the three months ended and was essentially flat for the nine months ended September 30, 2021.

The decrease for the three months ended September 30, 2021, was primarily from:

• Promotional activity;

• The impact of the transition of Sprint customers to tax-inclusive rate plans;

Three Months Ended March 31, Change

Postpaid phone churn 0.93 % 0.98 % -5 bps

Prepaid churn 2.67 % 2.78 % -11 bps

Postpaid phone churn decreased 5 basis points, primarily from:

• Reduced Sprint churn as we progress through the integration process;

partially offset by

• Higher premium services, including Magenta Max.

Postpaid phone ARPU was essentially flat for the nine months ended September 30, 2021, and was primarily impacted by:

• More normalized switching activity relative to the muted Pandemic-driven conditions a year ago.

Prepaid churn decreased 11 basis points, primarily from:

• Promotional activity;

• The impact of the transition of Sprint customers to tax-inclusive rate plans;

• Higher premium services, including Magenta Max;

• The net impact of customers acquired in the Merger, which have higher ARPU (net of changes arising from the reduction in base due to policy adjustments and reclassification of certain ARPU components from the acquired customers being moved to other revenue lines).

Prepaid ARPU increased $1.00, or 3%, for the three months ended and increased $0.48, or 1%, for the nine months ended September 30, 2021, primarily due to:

• Higher premium services;

• Higher revenues due to improved rate plan mix;

partially offset by

• A reduction in certain non-recurring charges.

• More normalized switching activity relative to the muted Pandemic-driven conditions a year ago.

Average Revenue Per Account

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We believe postpaid ARPA provides management, investors and analysts with useful information to assess and evaluate our postpaid service revenue realization and assist in forecasting our future postpaid service revenues on a per account basis.

We consider postpaid ARPA to be indicative of our revenue growth potential given the increase in the average number of postpaid phone customers per account and increases in postpaid other customers, including home internet, wearables, DIGITS or other connected devices, which include tablets and SyncUp products.

The following table illustrates the calculation of our operating measure ARPA and reconciles this measure to the related service revenues:

(in millions, except average number of accounts, ARPA) Three Months Ended

September 30, Change Nine Months Ended

September 30, Change

We consider postpaid ARPA to be indicative of our revenue growth potential given the increase in the average number of postpaid phone customers per account and increases in postpaid other customers, including High Speed Internet, wearables, DIGITS or other connected devices, which include tablets and SyncUp products.

The following table sets forth our operating measure ARPA:

(in dollars) Three Months Ended March 31, Change

2022 2021 $ %

Calculation of Postpaid ARPA

Postpaid service revenues $ 10,804 $ 10,209 $ 595 6 % $ 31,599 $ 26,055 $ 5,544 21 %

Average number of postpaid accounts (in thousands) and number of months in period 26,766 25,582 1,184 5 % 26,264 22,054 4,210 19 %

Postpaid ARPA $ 136.53 $ 132.91 $ 3.62 3 %

Postpaid ARPA

Postpaid ARPA increased $1.51, or 1%, for the three months ended and increased $2.41, or 2%, for the nine months ended September 30, 2021.

The increase for the three months ended September 30, 2021, was primarily from:

Postpaid ARPA increased $3.62, or 3%, primarily from:

• Higher premium services, including Magenta Max;

• An increase in customers per account;

• An increase in customers per account, including from the success of High Speed Internet;

partially offset by

• Promotional activity;

• The impact of the transition of Sprint customers to tax-inclusive rate plans.

The increase for the nine months ended September 30, 2021, was primarily from:

• An increase in customers per account;

• Higher premium service, including Magenta Max;

• Increased promotional activity.

Average Revenue Per User

ARPU represents the average monthly service revenue earned from customers.

Postpaid phone ARPU excludes postpaid other customers and related revenues, which include High Speed Internet, wearables, DIGITS and other connected devices such as tablets and SyncUp products.

The following table sets forth our operating measure ARPU:

(in dollars) Three Months Ended March 31, Change

2022 2021 $ %

Postpaid phone ARPU $ 48.41 $ 47.30 $ 1.11 2 %

Prepaid ARPU $ 39.19 $ 37.81 $ 1.38 4 %

Postpaid Phone ARPU

Postpaid phone ARPU increased $1.11, or 2%, and was primarily impacted by:

• Higher premium services, including Magenta Max;

partially offset by

• Promotional activity;

• The impact of the transition of Sprint customers to tax-inclusive rate plans.

• Increased promotional activity.

Prepaid ARPU increased $1.38, or 4%, primarily due to higher premium services.

Adjusted EBITDA and Core Adjusted EBITDA

Beginning in the first quarter of 2021, we began disclosing Core Adjusted EBITDA as a financial measure to improve comparability as we de-emphasize device leasing programs as part of our value proposition.

Adjusted EBITDA represents earnings before Interest expense, net of Interest income, Income tax expense, Depreciation and amortization, stock-based compensation and certain income and expenses not reflective of our ongoing operating performance.

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We use Adjusted EBITDA and Core Adjusted EBITDA as benchmarks to evaluate our operating performance in comparison to our competitors.

Management believes analysts and investors use Adjusted EBITDA and Core Adjusted EBITDA as supplemental

measures to evaluate overall operating performance and facilitate comparisons with other wireless communications services companies because they are indicative of our ongoing operating performance and trends by excluding the impact of interest expense from financing, non-cash depreciation and amortization from capital investments, stock-based compensation, Merger-related costs including network decommissioning costs and incremental costs directly attributable to the Pandemic, as they are not indicative of our ongoing operating performance, as well as certain other nonrecurring income and expenses.

Management believes analysts and investors use Adjusted EBITDA and Core Adjusted EBITDA as supplemental measures to evaluate overall operating performance and facilitate comparisons with other wireless communications services companies because they are indicative of our ongoing operating performance and trends by excluding the impact of interest expense from financing, non-cash depreciation and amortization from capital investments, stock-based compensation and Merger-related costs including network decommissioning costs, as they are not indicative of our ongoing operating performance, as well as certain nonrecurring income and expenses.

Management believes analysts and investors use Core Adjusted EBITDA because it normalizes for the transition in the Company’s device financing strategy, by excluding the impact of device lease revenues from Adjusted EBITDA, to align with the exclusion of the related depreciation expense on leased devices from Adjusted EBITDA.

Adjusted EBITDA, Adjusted EBITDA margin, Core Adjusted EBITDA and Core Adjusted EBITDA margin have limitations as analytical tools and should not be considered in isolation or as substitutes for income from operations, net income or any other measure of financial performance reported in accordance with U.S.

Generally Accepted Accounting Principles (“GAAP”).

The following table illustrates the calculation of Adjusted EBITDA and Core Adjusted EBITDA and reconciles Adjusted EBITDA and Core Adjusted EBITDA to Net income, which we consider to be the most directly comparable GAAP financial measure:

Three Months Ended

September 30, Change Nine Months Ended

September 30, Change

Three Months Ended March 31, Change

(in millions) 2022 2021 $ %

Net income $ 713 $ 933 $ (220) (24) %

Income from discontinued operations, net of tax — — — NM — (320) 320 (100) %

Income from continuing operations 691 1,253 (562) (45) % 2,602 1,994 608 30 %

Interest expense 780 765 15 2 % 2,392 1,726 666 39 %

Interest expense to affiliates 58 44 14 32 % 136 206 (70) (34) %

Interest income (2) (3) 1 (33) % (7) (21) 14 (67) %

Interest expense, net 864 835 29 3 %

Other expense, net 11 125 (114) (91) %

Income tax (benefit) expense (3) 407 (410) (101) % 520 715 (195) (27) %

Income tax expense 218 246 (28) (11) %

Operating income 1,806 2,139 (333) (16) %

Depreciation and amortization 3,585 4,289 (704) (16) %

Operating income from discontinued operations (1)

— — — NM — 432 (432) (100) %

Stock-based compensation (1)

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Merger-related costs 1,413 298 1,115 374 %

COVID-19-related costs — — — NM — 458 (458) (100) %

Impairment expense — — — NM — 418 (418) (100) %

Other, net (2)

4 unchanged sentences

$ 6,463 $ 5,864 $ 599 10 %

Net income margin (Net income divided by Service revenues) 5 % 9 % -400 bps 6 % 6 % — bps

Adjusted EBITDA margin (Adjusted EBITDA divided by Service revenues) 46 % 50 % -400 bps 48 % 49 % -100 bps

Net income margin (Net income divided by Service revenues) 5 % 7 % -200 bps

Adjusted EBITDA margin (Adjusted EBITDA divided by Service revenues) 46 % 49 % -300 bps

Core Adjusted EBITDA margin (Core Adjusted EBITDA divided by Service revenues)

41 % 41 % — bps 41 % 41 % — bps

NM - Not Meaningful

(1) Following the Prepaid Transaction starting on July 1, 2020, we provide MVNO services to DISH.

We have included the operating income from April 1, 2020 through June 30, 2020, in our determination of Adjusted EBITDA to reflect contributions of the Prepaid Business that were replaced by the MVNO Agreement beginning on July 1, 2020 in order to enable management, analysts and investors to better assess ongoing operating performance and trends.

43 % 41 % 200 bps

(1) Stock-based compensation includes payroll tax impacts and may not agree with stock-based compensation expense in the condensed consolidated financial statements.

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(2) Other, net may not agree with the Condensed Consolidated Statements of Comprehensive Income primarily due to certain non-routine operating activities, such as other special items that would not be expected to reoccur or are not reflective of T-Mobile’s ongoing operating performance, and are, therefore, excluded from Adjusted EBITDA and Core Adjusted EBITDA.

Core Adjusted EBITDA increased $262 million, or 5%, for the three months ended and increased $3.0 billion, or 20%, for the nine months ended September 30, 2021.

Core Adjusted EBITDA increased $599 million, or 10%, for the three months ended March 31, 2022.

The components comprising Core Adjusted EBITDA are discussed further above.

The increase for the three months ended September 30, 2021 was primarily due to:

• Higher Total service revenues;

• Higher Equipment revenues, excluding Lease revenues;

partially offset by

• Higher Cost of equipment sales, excluding Merger-related costs.

The increase for the nine months ended September 30, 2021, was primarily due to:

The increase was primarily due to:

• Higher Total service revenues;

• Higher Equipment revenues, excluding Lease revenues;

• Lower Cost of services, excluding Merger-related costs;

partially offset by

• Higher Cost of equipment sales, excluding Merger-related costs;

• Higher Cost of services, excluding Merger-related costs;

• Higher Selling, general and administrative expenses, excluding Merger-related costs and supplemental employee payroll, third-party commissions and cleaning-related COVID-19 costs.

Adjusted EBITDA decreased $318 million, or 4%, for the three months ended and increased $2.8 billion, or 16%, for the nine months ended September 30, 2021.

The changes were primarily due to the fluctuations in Core Adjusted EBITDA, discussed above, including changes in Lease revenues.

Lease revenues decreased $580 million for the three months ended and $211 million for the nine months ended September 30, 2021.

• Higher Selling, general and administrative expenses, excluding Merger-related costs;

• Lower Equipment revenues, excluding Lease revenues.

Adjusted EBITDA increased $45 million, or 1%, for the three months ended March 31, 2022.

The change was primarily due to the increase in Core Adjusted EBITDA, discussed above, partially offset by a decrease in Lease revenues of $554 million for the three months ended March 31, 2022.

Liquidity and Capital Resources

Our principal sources of liquidity are our cash and cash equivalents and cash generated from operations, proceeds from issuance of long-term debt and common stock, financing leases, the sale of certain receivables, financing arrangements of vendor payables which effectively extend payment terms and the Revolving Credit Facility (as defined below).

Our principal sources of liquidity are our cash and cash equivalents and cash generated from operations, proceeds from issuance of debt and common stock, financing leases, the sale of certain receivables and the Revolving Credit Facility (as defined below).

Further, the incurrence of additional indebtedness may inhibit our ability to incur new debt under the terms governing our existing and future indebtedness, which may make it more difficult for us to incur new debt in the future to finance our business strategy.

The following is a condensed schedule of our cash flows for the three and nine months ended September 30, 2021 and 2020:

Three Months Ended

September 30, Change Nine Months Ended

September 30, Change

The following is a condensed schedule of our cash flows:

Three Months Ended March 31, Change

(in millions) 2022 2021 $ %

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Operating Activities

Net cash provided by operating activities increased $705 million, or 25%, for the three months ended and increased $5.8 billion, or 111%, for the nine months ended September 30, 2021.

The increase for the three months ended September 30, 2021, was primarily from:

• A $1.8 billion decrease in net cash outflows from changes in working capital, primarily due to lower use of cash from Accounts receivable, Accounts payable and accrued liabilities and Inventories, partially offset by higher use of cash from operating lease liabilities, including a $1.0 billion advance rent payment related to the modification of one of our master lease agreements;

Net cash provided by operating activities increased $184 million, or 5%, primarily from:

• A $1.0 billion decrease in net cash outflows from changes in working capital, primarily due to lower use of cash from Accounts payable and accrued liabilities, Short- and long-term operating lease liabilities and Operating lease right-of-use assets, partially offset by higher use of cash from Accounts receivable and Inventories;

partially offset by

• A $1.1 billion decrease in Net income, adjusted for non-cash income and expense.

• Net cash provided by operating activities includes $617 million and $379 million in payments for Merger-related costs for the three months ended September 30, 2021 and 2020, respectively.

The increase for the nine months ended September 30, 2021, was primarily from:

• A $4.2 billion decrease in net cash outflows from changes in working capital, primarily due to the one-time impact of $2.3 billion in gross payments for the settlement of interest rate swaps related to Merger financing for the nine months ended September 30, 2020, included in the use of cash from Other current and long-term liabilities, as well as lower use of cash from Inventories, Accounts payable and accrued liabilities and operating lease right-of-use assets, partially offset by higher use of cash from Equipment installment plan receivables and operating lease liabilities, including a $1.0 billion advance rent payment related to the modification of one of our master lease agreements;

• A $1.5 billion increase in Net income, adjusted for non-cash income and expense.

• Net cash provided by operating activities includes $1.1 billion and $910 million in payments for Merger-related costs for the nine months ended September 30, 2021 and 2020, respectively.

• An $820 million decrease in Net income, adjusted for non-cash income and expense.

• Net cash provided by operating activities includes $893 million and $277 million in net payments for Merger-related costs for the three months ended March 31, 2022 and 2021, respectively.

Investing Activities

Net cash used in investing activities increased $3.0 billion, or 267%, for the three months ended and increased $8.4 billion, or 93%, for the nine months ended September 30, 2021.

The use of cash for the three months ended September 30, 2021, was primarily from:

• $2.9 billion in Purchases of property and equipment, including capitalized interest, from network integration related to the Merger and the continued build-out of our nationwide 5G network;

• $1.9 billion in Acquisitions of companies, primarily due to our acquisition of the Wireless Assets (as defined in Note 2 – Business Combinations of the Notes to the Condensed Consolidated Financial Statements);

• $407 million in Purchases of spectrum licenses and other intangible assets, including deposits;

partially offset by

• $1.1 billion in Proceeds related to beneficial interests in securitization transactions.

The use of cash for the nine months ended September 30, 2021, was primarily from:

• $9.4 billion in Purchases of property and equipment, including capitalized interest, from network integration related to the Merger and the continued build-out of our nationwide 5G network;

• $9.3 billion in Purchases of spectrum licenses and other intangible assets, including deposits, primarily due to $8.9 billion paid for spectrum licenses won at the conclusion of Auction 107 in March 2021;

Net cash used in investing activities decreased $6.1 billion, or 55%.

The use of cash was primarily from:

• $3.4 billion in Purchases of property and equipment, including capitalized interest, from network integration related to the Merger and the accelerated build-out of our nationwide 5G network;

• $2.8 billion in Purchases of spectrum licenses and other intangible assets, including deposits, primarily due to $2.8 billion paid for spectrum licenses won at the conclusion of Auction 110 in February 2022;

partially offset by

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Financing Activities

Net cash used in financing activities decreased $3.1 billion for the three months ended and Net cash provided by financing activities decreased $8.8 billion for the nine months ended September 30, 2021.

The use of cash for the three months ended September 30, 2021, was primarily from:

• $4.6 billion in Repayments of long-term debt;

• $266 million in Repayments of financing lease obligations;

partially offset by

• $2.0 billion in Proceeds from issuance of long-term debt, net of issuance costs.

The source of cash for the nine months ended September 30, 2021, was primarily from:

• $11.8 billion in Proceeds from issuance of long-term debt, net of issuance costs;

partially offset by

Net cash provided by financing activities decreased $6.0 billion, or 155%.

The use of cash was primarily from:

• $1.6 billion in Repayments of long-term debt;

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Cash and Cash Equivalents

As of September 30, 2021, our Cash and cash equivalents were $4.1 billion compared to $10.4 billion at December 31, 2020.

As of March 31, 2022, our Cash and cash equivalents were $3.2 billion compared to $6.6 billion at December 31, 2021.

Free Cash Flow

Free Cash Flow represents Net cash provided by operating activities less cash payments for Purchases of property and equipment, including Proceeds from sales of tower sites and Proceeds related to beneficial interests in securitization transactions, less Cash payments for debt prepayment or debt extinguishment.

Free Cash Flow and Free Cash Flow, excluding gross payments for the settlement of interest rate swaps, are non-GAAP financial measures utilized by our management, investors and analysts of our financial information to evaluate cash available to pay debt and provide further investment in the business.

In the second quarter of 2021, we sold tower sites for proceeds of $31 million, which are included in Proceeds from sales of tower sites within Net cash used in investing activities in our Condensed Consolidated Statements of Cash Flows.

As these proceeds were from the sale of fixed assets and are used by management to assess cash available for capital expenditures during the year, we determined the proceeds are relevant for the calculation of Free Cash Flow and included them in the table below.

Other proceeds from the sale of fixed assets for the periods presented are not significant.

We have presented the impact of the sales in the table below, which reconciles Free Cash Flow and Free Cash Flow, excluding gross payments for the settlement of interest rate swaps, to Net cash provided by operating activities, which we consider to be the most directly comparable GAAP financial measure.

Three Months Ended

September 30, Change Nine Months Ended

September 30, Change

Free Cash Flow represents Net cash provided by operating activities less cash payments for Purchases of property and equipment, including Proceeds related to beneficial interests in securitization transactions, less Cash payments for debt prepayment or debt extinguishment.

Free Cash Flow is a non-GAAP financial measure utilized by management, investors and analysts of our financial information to evaluate cash available to pay debt and provide further investment in the business.

The table below provides a reconciliation of Free Cash Flow to Net cash provided by operating activities, which we consider to

be the most directly comparable GAAP financial measure.

Three Months Ended March 31, Change

(in millions) 2022 2021 $ %

1 unchanged sentence

Cash purchases of property and equipment (3,381) (3,183) (198) 6 %

Proceeds from sales of tower sites — — — NM 31 — 31 NM

Proceeds related to beneficial interests in securitization transactions 1,185 891 294 33 %

Cash payments for debt prepayment or debt extinguishment costs — (65) 65 (100) %

Free Cash Flow 1,559 352 1,207 343 % 4,534 182 4,352 NM

Gross cash paid for the settlement of interest rate swaps — — — NM — 2,343 (2,343) (100) %

Free Cash Flow, excluding gross payments for the settlement of interest rate swaps $ 1,559 $ 352 $ 1,207 343 % $ 4,534 $ 2,525 $ 2,009 80 %

NM - Not Meaningful

Free Cash Flow, excluding gross payments for the settlement of interest rate swaps, increased $1.2 billion, or 343%, for the three months ended and increased $2.0 billion, or 80%, for the nine months ended September 30, 2021.

The increase for the three months ended September 30, 2021, was impacted by the following:

• Higher Net cash provided by operating activities, as described above;

• Lower Cash purchases of property and equipment, including capitalized interest of $46 million and $108 million for the three months ended September 30, 2021 and 2020, respectively;

Free Cash Flow $ 1,649 $ 1,304 $ 345 26 %

Free Cash Flow increased $345 million, or 26%.

The increase was primarily impacted by the following:

• Higher Proceeds related to beneficial interests in securitization transactions;

• Free Cash Flow includes $617 million and $379 million in payments for Merger-related costs for the three months ended September 30, 2021 and 2020, respectively.

The increase for the nine months ended September 30, 2021, was impacted by the following:

• Higher Net cash provided by operating activities, as described above;

• Higher Proceeds related to beneficial interests in securitization transactions;

partially offset by

• Higher Cash purchases of property and equipment, including capitalized interest of $187 million and $339 million for the nine months ended September 30, 2021 and 2020, respectively.

• Free Cash Flow includes $1.1 billion and $910 million in payments for Merger-related costs for the nine months ended September 30, 2021 and 2020, respectively.

• The calculation of Free Cash Flow, excluding gross payments for the settlement of interest rate swaps, excludes the one-time impact of gross payments for the settlement of interest rate swaps related to Merger financing of $2.3 billion for the nine months ended September 30, 2020.

• Higher Cash purchases of property and equipment, including capitalized interest.

• Free Cash Flow includes $893 million and $277 million in net payments for Merger-related costs for the three months ended March 31, 2022 and 2021, respectively.

Borrowing Capacity

We maintain a financing arrangement with Deutsche Bank AG, which allows for up to $108 million in borrowings.

Under the financing arrangement, we can effectively extend payment terms for invoices payable to certain vendors.

As of September 30, 2021, there were no outstanding balances under such financing arrangement.

We also maintain vendor financing arrangements primarily with our main network equipment suppliers.

Under the respective agreements, we can obtain extended financing terms.

During the three and nine months ended September 30, 2021, we repaid $76 million and $167 million, respectively, associated with the vendor financing arrangements and other financial liabilities.

These payments are included in Repayments of short-term debt for purchases of inventory, property and equipment and other financial liabilities, in our Condensed Consolidated Statements of Cash Flows.

As of September 30, 2021 and December 31, 2020, the outstanding balance under the vendor financing arrangements and other financial liabilities was $69 million and $240 million, respectively, of which $12 million and $122 million, respectively, was assumed in connection with the closing of the Merger.

We maintain a revolving credit facility (the “Revolving Credit Facility”) with an aggregate commitment amount of $5.5 billion.

As of September 30, 2021, there was no outstanding balance under the Revolving Credit Facility.

On October 30, 2020, we entered into a $5.0 billion senior secured term loan commitment with certain financial institutions.

On January 14, 2021, we issued an aggregate of $3.0 billion of senior notes.

The senior secured term loan commitment was reduced by an amount equal to the aggregate gross proceeds of the Senior Notes, which reduced the commitment to $2.0 billion.

On March 23, 2021, we issued an aggregate of $3.8 billion of Senior Notes.

The senior secured term loan commitment was terminated upon the issuance of the $3.8 billion of Senior Notes.

As of March 31, 2022, there was no outstanding balance under the Revolving Credit Facility.

Debt Financing

As of September 30, 2021, our total debt and financing lease liabilities were $75.2 billion, excluding our tower obligations, of which $68.1 billion was classified as long-term debt and $1.6 billion was classified as long-term financing lease liabilities.

During the nine months ended September 30, 2021, we issued long-term debt for net proceeds of $11.8 billion and redeemed and repaid short- and long-term debt with an aggregate principal amount of $10.1 billion.

As of March 31, 2022, our total debt and financing lease liabilities were $75.0 billion, excluding our tower obligations, of which $68.4 billion was classified as long-term debt and $1.4 billion was classified as long-term financing lease liabilities.

During the three months ended March 31, 2022, we repaid short- and long-term debt with an aggregate principal amount of $1.6 billion.

There were no new issuances or borrowings during the three months ended March 31, 2022.

Subsequent to March 31, 2022, on April 15, 2022, we repaid at maturity $1.25 billion of our 5.375% Senior Notes to affiliates due 2022.

For more information regarding our debt financing transactions, see Note 6 – Debt of the Notes to the Condensed Consolidated Financial Statements.

Spectrum Auction

In March 2021, the FCC announced that we were the winning bidder of 142 licenses in Auction 107 (C-band spectrum) for an aggregate purchase price of $9.3 billion, excluding relocation costs.

At the inception of Auction 107 in October 2020, we deposited $438 million.

Upon conclusion of Auction 107 in March 2021, we paid the FCC the remaining $8.9 billion for the licenses won in the auction.

We expect to incur an additional $1.2 billion in relocation costs which will be paid through 2024.

For more information regarding our spectrum licenses, see Note 5 - Goodwill, Spectrum License Transactions and Other Intangible Assets of the Notes to the Condensed Consolidated Financial Statements.

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 the 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.

For more information regarding our spectrum licenses, see Note 4 – Spectrum License Transactions of the Notes to the Condensed Consolidated Financial Statements.

Off-Balance Sheet Arrangements

We have arrangements, as amended from time to time, to sell certain EIP accounts receivable and service accounts receivable on a revolving basis as a source of liquidity.

As of September 30, 2021, we derecognized net receivables of $2.5 billion upon sale through these arrangements.

As of March 31, 2022, we derecognized net receivables of $2.5 billion upon sale through these arrangements.

For more information regarding these off-balance sheet arrangements, see Note 3 – Sales of Certain Receivables of the Notes to the Condensed Consolidated Financial Statements.

Future Sources and Uses of Liquidity

We may seek additional sources of liquidity, including through the issuance of additional long-term debt in 2021, to continue to opportunistically acquire spectrum licenses or other assets in private party transactions or for the refinancing of existing long-term debt on an opportunistic basis.

We may seek additional sources of liquidity, including through the issuance of additional debt, to continue to opportunistically acquire spectrum licenses or other assets in private party transactions or for the refinancing of existing long-term debt on an opportunistic basis.

Excluding liquidity that could be needed for spectrum acquisitions, or for other assets, we expect our principal sources of funding to be sufficient to meet our anticipated liquidity needs for business operations for the next 12 months as well as our longer-term liquidity needs.

Our intended use of any such funds is for general corporate purposes, including for capital expenditures, spectrum purchases, opportunistic investments and acquisitions, redemption of high yield callable debt, tower obligations, potential stockholder returns and the execution of our integration plan.

Our intended use of any such funds is for general corporate purposes, including for capital expenditures, spectrum purchases, opportunistic investments and acquisitions, redemption of debt, tower obligations and the execution of our integration plan.

We determine future liquidity requirements, for both operations and capital expenditures, based in large part upon projected financial and operating performance, and opportunities to acquire additional spectrum.

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We have incurred, and will incur, substantial expenses to comply with the Government Commitments, and we are also expected to incur substantial restructuring expenses in connection with integrating and coordinating T-Mobile’s and Sprint’s businesses, operations, policies and procedures.

See “Restructuring” of this MD&A.

While we have assumed that a certain level of Merger-related expenses will be incurred, factors beyond our control, including required consultation and negotiation with certain counterparties, could affect the total amount or the timing of these expenses.

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However, the Issuers or borrowers are allowed to make certain permitted payments to Parent under the terms of each of the credit agreements, indentures and supplemental indentures relating to the long-term debt to affiliates and third parties.

We were in compliance with all restrictive debt covenants as of September 30, 2021.

Shentel Wireless Assets Acquisition

On July 1, 2021, we closed on the acquisition of the Wireless Assets (as defined in Note 2 – Business Combinations of the Notes to the Condensed Consolidated Financial Statements) for a cash purchase price of approximately $1.9 billion.

For more information regarding the acquisition of the Wireless Assets, see Note 2 – Business Combinations of the Notes to the Condensed Consolidated Financial Statements.

We were in compliance with all restrictive debt covenants as of March 31, 2022.

Financing Lease Facilities

We have entered into uncommitted financing lease facilities with certain partners that provide us with the ability to enter into financing leases for network equipment and services.

As of September 30, 2021, we have committed to $6.2 billion of financing leases under these financing lease facilities, of which $599 million and $1.1 billion was executed during the three and nine months ended September 30, 2021, respectively.

We have entered into uncommitted financing lease facilities with certain third parties that provide us with the ability to enter into financing leases for network equipment and services.

As of March 31, 2022, we have committed to $6.6 billion of financing leases under these financing lease facilities, of which $299 million was executed during the three months ended March 31, 2022.

We expect to enter into up to an additional $901 million in financing lease commitments during the year ending December 31, 2022.

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Our liquidity requirements have been driven primarily by capital expenditures for spectrum licenses, the construction, expansion and upgrading of our network infrastructure and the integration of the networks, spectrum, technology, personnel, customer base and business practices of T-Mobile and Sprint.

Property and equipment capital expenditures primarily relate to the integration of our network and spectrum licenses, including the acquired C-band licenses won in Auction 107, acquired Sprint 2.5 GHz spectrum licenses and existing 600 MHz spectrum licenses as we build out our nationwide 5G network.

We expect the majority of our remaining capital expenditures related to these efforts to occur in 2021 and 2022, after which we expect a reduction in capital expenditure requirements.

For more information regarding our spectrum licenses, see Note 5 - Goodwill, Spectrum License Transactions and Other Intangible Assets of the Notes to the Condensed Consolidated Financial Statements.

We have never paid or declared any cash dividends on our common stock, and we do not intend to declare or pay any cash dividends on our common stock in the foreseeable future.

Property and equipment capital expenditures primarily relate to the integration of our network and spectrum licenses, including acquired Sprint PCS and 2.5 GHz spectrum licenses and existing 600 MHz spectrum licenses as we build out our nationwide 5G network.

We expect the majority of our remaining capital expenditures related to these efforts to occur in 2022, after which we expect a reduction in capital expenditure requirements.

For more information regarding our spectrum licenses, see Note 4 – Spectrum License Transactions of the Notes to the Condensed Consolidated Financial Statements.

Stockholder Returns

We have never declared or paid any cash dividends on our common stock, and we do not intend to declare or pay any cash dividends on our common stock in the foreseeable future.

We may use cash to repurchase shares of our common stock, subject to, among other things, approval by the Board of Directors and our sufficient access to sources of liquidity, including potentially debt capital markets.

Related Party Transactions

We have related party transactions associated with DT, SoftBank or their affiliates in the ordinary course of business, including intercompany servicing and licensing.

As of April 29, 2022, DT and SoftBank held, directly or indirectly, approximately 48.3% and 3.2%, respectively, of the outstanding T-Mobile common stock, with the remaining approximately 48.5% of the outstanding T-Mobile common stock held by other stockholders.

As a result of the Proxy, Lock-Up and ROFR Agreement, dated April 1, 2020, by and between DT and SoftBank and the Proxy, Lock-Up and ROFR Agreement, dated June 22, 2020, by and among DT, Claure Mobile LLC, and Marcelo Claure, DT has voting control, as of April 29, 2022, over approximately 51.8% of the outstanding T-Mobile common stock.

Disclosure of Iranian Activities under Section 13(r) of the Securities Exchange Act of 1934

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affiliates in compliance with applicable law, and whether or not the activities are sanctionable under U.S.

As of the date of this report, we are not aware of any activity, transaction or dealing by us or any of our affiliates for the three months ended September 30, 2021, that requires disclosure in this report under Section 13(r) of the Exchange Act, except as set forth below with respect to affiliates that we do not control and that are our affiliates solely due to their common control with either DT or SoftBank.

As of the date of this report, we are not aware of any activity, transaction or dealing by us or any of our affiliates for the three months ended March 31, 2022, that requires disclosure in this report under Section 13(r) of the Exchange Act, except as set forth below with respect to affiliates that we do not control and that are our affiliates solely due to their common control with either DT or SoftBank.

We have relied upon DT and SoftBank for information regarding their respective activities, transactions and dealings.

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Irancell Telecommunications Services Company, Telecommunication Kish Company, Mobile Telecommunication Company of Iran, and Telecommunication Infrastructure Company of Iran.

In addition, during the three months ended September 30, 2021, DT, through certain of its non-U.S.

subsidiaries, provided basic telecommunications services to two customers in Germany identified on the Specially Designated Nationals and Blocked Persons List maintained by the U.S.

Department of Treasury’s

Office of Foreign Assets Control:

Bank Melli and Europäisch-Iranische Handelsbank.

In addition, during the three months ended March 31, 2022, DT, through certain of its non-U.S.

subsidiaries, provided basic telecommunications services to four customers in Germany identified on the Specially Designated Nationals and Blocked Persons List maintained by the U.S.

Department of Treasury’s Office of Foreign Assets Control:

Bank Melli, Europäisch-Iranische Handelsbank, CPG Engineering & Commercial Services GmbH and Golgohar Trade and Technology GmbH.

These services have been terminated or are in the process of being terminated.

For the three months ended September 30, 2021, gross revenues of all DT affiliates generated by roaming and interconnection traffic and telecommunications services with the Iranian parties identified herein were less than $0.1 million, and the estimated net profits were less than $0.1 million.

For the three months ended March 31, 2022, gross revenues of all DT affiliates generated by roaming and

interconnection traffic and telecommunications services with the Iranian parties identified herein were less than $0.1 million, and the estimated net profits were less than $0.1 million.

In addition, DT, through certain of its non-U.S.

subsidiaries that operate a fixed-line network in their respective European home countries (in particular Germany), provides telecommunications services in the ordinary course of business to the Embassy of Iran in those European countries.

Gross revenues and net profits recorded from these activities for the three months ended September 30, 2021 were less than $0.1 million.

Gross revenues and net profits recorded from these activities for the three months ended March 31, 2022 were less than $0.1 million.

We understand that DT intends to continue these activities.

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subsidiaries, provides roaming services in Iran through Irancell Telecommunications Services Company.

During the three months ended September 30, 2021, SoftBank had no gross revenues from such services and no net profit was generated.

During the three months ended March 31, 2022, SoftBank had no gross revenues from such services and no net profit was generated.

We understand that the SoftBank subsidiary intends to continue such services.

This subsidiary also provides telecommunications services in the ordinary course of business to accounts affiliated with the Embassy of Iran in Japan.

During the three months ended September 30, 2021, SoftBank estimates that gross revenues and net profit generated by such services were both under $0.1 million.

During the three months ended March 31, 2022, SoftBank estimates that gross revenues and net profit generated by such services were both under $0.1 million.

We understand that the SoftBank subsidiary is obligated under contract and intends to continue such services.

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indirect subsidiaries, provides office supplies to the Embassy of Iran in Japan.

SoftBank estimates that gross revenue and net profit generated by such services during the three months ended September 30, 2021, were both under $0.1 million.

SoftBank estimates that gross revenue and net profit generated by such services during the three months ended March 31, 2022, were both under $0.1 million.

We understand that the SoftBank subsidiary intends to continue such activities.

Critical Accounting Policies and Estimates

Preparation of our condensed consolidated financial statements in accordance with U.S.

GAAP requires us to make estimates and assumptions that affect the reported amounts of certain assets, liabilities, revenues and expenses, as well as related disclosure of contingent assets and liabilities.

Preparation of our condensed consolidated financial statements in accordance with GAAP requires us to make estimates and assumptions that affect the reported amounts of certain assets, liabilities, revenues and expenses, as well as related disclosure of contingent assets and liabilities.

There have been no material changes to the critical accounting policies and estimates as previously disclosed in Part II, Item 8 of our Annual Report on Form 10-K for the year ended December 31, 2021, and which are hereby incorporated by reference herein.

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Quantitative and Qualitative Disclosures About Market Risk

There have been no material changes to the interest rate risk as previously disclosed in Part II, Item 7A of our Annual Report on Form 10-K for the year ended December 31, 2020.

There have been no material changes to the market risk as previously disclosed in Part II, Item 7A of our Annual Report on Form 10-K for the year ended December 31, 2021.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 2. Management’s Discussion and Analysis