What changed in this filing

/stocks — the workspaceLOADING

Item 1. Financial Statements

2022-10-27 compared with 2022-07-29 · 335 added, 161 removed, 602 unchanged (45% of the section changed)

2 unchanged sentences

Condensed Consolidated Balance Sheets

(in millions, except share and per share amounts) June 30,

(in millions, except share and per share amounts) September 30,

2022 December 31,

48 unchanged sentences

T-Mobile US, Inc.

Condensed Consolidated Statements of Comprehensive (Loss) Income

Three Months Ended June 30, Six Months Ended June 30,

Condensed Consolidated Statements of Comprehensive Income

Three Months Ended September 30, Nine Months Ended September 30,

(in millions, except share and per share amounts) 2022 2021 2022 2021

11 unchanged sentences

Impairment expense — — 477 —

Loss on disposal group held for sale 1,071 — 1,071 —

Depreciation and amortization 3,313 4,145 10,389 12,511

5 unchanged sentences

Total other expense, net ( 830 ) ( 896 ) ( 2,577 ) ( 2,707 )

(Loss) income before income taxes ( 163 ) 1,255 768 2,434

Income before income taxes 451 688 1,219 3,122

Income tax benefit (expense) 57 3 ( 106 ) ( 520 )

Net (loss) income $ ( 108 ) $ 978 $ 605 $ 1,911

Net income $ 508 $ 691 $ 1,113 $ 2,602

Other comprehensive income, net of tax

Reclassification of loss from cash flow hedges, net of tax effect of $ 13 , $ 12 , $ 39 , and $ 36

Unrealized (loss) gain on foreign currency translation adjustment, net of tax effect of $( 1 ), $ 0 , $( 1 ), and $ 0

39 35 113 103

Unrealized loss on foreign currency translation adjustment, net of tax effect of $ 0 , $ 0 , $( 1 ), and $ 0

( 7 ) ( 3 ) ( 11 ) —

Other comprehensive income 32 32 102 103

Total comprehensive (loss) income $ ( 74 ) $ 1,013 $ 675 $ 1,982

(Loss) earnings per share

Total comprehensive income $ 540 $ 723 $ 1,215 $ 2,705

Earnings per share

Basic $ 0.40 $ 0.55 $ 0.89 $ 2.09

7 unchanged sentences

Condensed Consolidated Statements of Cash Flows

Three Months Ended June 30, Six Months Ended June 30,

Three Months Ended September 30, Nine Months Ended September 30,

(in millions) 2022 2021 2022 2021

Operating activities

Net (loss) income $ ( 108 ) $ 978 $ 605 $ 1,911

Adjustments to reconcile net (loss) income to net cash provided by operating activities

Net income $ 508 $ 691 $ 1,113 $ 2,602

Adjustments to reconcile net income to net cash provided by operating activities

Depreciation and amortization 3,313 4,145 10,389 12,511

5 unchanged sentences

Impairment expense — — 477 —

Loss on remeasurement of disposal group held for sale 371 — 371 —

Changes in operating assets and liabilities

23 unchanged sentences

Repayments of long-term debt ( 132 ) ( 4,600 ) ( 3,145 ) ( 9,969 )

Repurchases of common stock ( 557 ) — ( 557 ) —

Tax withholdings on share-based awards ( 10 ) ( 14 ) ( 225 ) ( 308 )

1 unchanged sentence

Other, net ( 35 ) ( 48 ) ( 97 ) ( 139 )

Net cash (used in) provided by financing activities ( 1,744 ) ( 577 ) ( 3,880 ) 3,297

Change in cash and cash equivalents, including restricted cash ( 94 ) 1,119 ( 3,477 ) ( 2,585 )

Cash and cash equivalents, including restricted cash

Net cash provided by (used in) financing activities 1,927 ( 3,060 ) ( 1,953 ) 237

Change in cash and cash equivalents, including restricted cash and cash held for sale 3,763 ( 3,735 ) 286 ( 6,320 )

Cash and cash equivalents, including restricted cash and cash held for sale

Beginning of period 3,226 7,878 6,703 10,463

4 unchanged sentences

Condensed Consolidated Statement of Stockholders’ Equity

(in millions, except shares) Common Stock Outstanding Treasury Shares at Cost Par Value and Additional Paid-in Capital Accumulated Other Comprehensive Loss Accumulated Deficit Total Stockholders' Equity

Balance as of March 31, 2022 1,253,352,700 $ ( 16 ) $ 73,420 $ ( 1,329 ) $ ( 2,099 ) $ 69,976

Net loss — — — — ( 108 ) ( 108 )

(in millions, except shares) Common Stock Outstanding Treasury Stock Outstanding Treasury Shares at Cost Par Value and Additional Paid-in Capital Accumulated Other Comprehensive Loss Accumulated Deficit Total Stockholders' Equity

Balance as of June 30, 2022 1,254,010,072 1,564,549 $ ( 16 ) $ 73,552 $ ( 1,295 ) $ ( 2,207 ) $ 70,034

Net income — — — — — 508 508

Other comprehensive income — — — — 32 — 32

1 unchanged sentence

Exercise of stock options 26,614 — — 1 — — 1

Stock issued for employee stock purchase plan 802,361 — — 89 — — 89

Issuance of vested restricted stock units 219,301 — — — — — —

Forfeiture of restricted stock awards ( 42 ) 42 — — — — —

Shares withheld related to net share settlement of stock awards and stock options ( 67,575 ) — — ( 10 ) — — ( 10 )

Remeasurement of uncertain tax positions — — 5 — — 5

Repurchases of common stock ( 4,892,315 ) 4,892,315 ( 669 ) — — — ( 669 )

Transfers with NQDC plan 6,010 ( 6,010 ) — — — — —

Balance as of June 30, 2022 1,254,010,072 $ ( 16 ) $ 73,552 $ ( 1,295 ) $ ( 2,207 ) $ 70,034

Balance as of September 30, 2022 1,250,104,426 6,450,896 $ ( 685 ) $ 73,797 $ ( 1,263 ) $ ( 1,699 ) $ 70,150

Balance as of December 31, 2021 1,249,213,681 1,537,468 $ ( 13 ) $ 73,292 $ ( 1,365 ) $ ( 2,812 ) $ 69,102

5 unchanged sentences

Issuance of vested restricted stock units 5,380,712 — — — — — —

Forfeiture of restricted stock awards ( 42 ) 42 — — — — —

Shares withheld related to net share settlement of stock awards and stock options ( 1,772,442 ) — — ( 225 ) — — ( 225 )

Repurchases of common stock ( 4,892,315 ) 4,892,315 ( 669 ) — — — ( 669 )

Remeasurement of uncertain tax positions — — — 5 — — 5

Transfers with NQDC plan ( 21,071 ) 21,071 ( 3 ) 3 — — —

Balance as of June 30, 2022 1,254,010,072 $ ( 16 ) $ 73,552 $ ( 1,295 ) $ ( 2,207 ) $ 70,034

Balance as of September 30, 2022 1,250,104,426 6,450,896 $ ( 685 ) $ 73,797 $ ( 1,263 ) $ ( 1,699 ) $ 70,150

The accompanying notes are an integral part of these condensed consolidated financial statements.

2 unchanged sentences

Condensed Consolidated Statement of Stockholders’ Equity

Balance as of March 31, 2021 1,246,773,175 $ ( 14 ) $ 72,839 $ ( 1,545 ) $ ( 4,903 ) $ 66,377

Balance as of June 30, 2021 1,247,920,536 1,557,821 $ ( 14 ) $ 72,919 $ ( 1,510 ) $ ( 3,925 ) $ 67,470

Net income — — — — — 691 691

2 unchanged sentences

Exercise of stock options 14,578 — — 1 — — 1

Stock issued for employee stock purchase plan 917,444 — — 100 — — 100

Issuance of vested restricted stock units 256,605 — — — — — —

1 unchanged sentence

Transfers with NQDC plan 18,894 ( 18,894 ) 1 ( 1 ) — — —

Balance as of June 30, 2021 1,247,920,536 $ ( 14 ) $ 72,919 $ ( 1,510 ) $ ( 3,925 ) $ 67,470

Balance as of September 30, 2021 1,249,035,065 1,538,927 $ ( 13 ) $ 73,152 $ ( 1,478 ) $ ( 3,234 ) $ 68,427

Balance as of December 31, 2020 1,241,805,706 1,539,878 $ ( 11 ) $ 72,772 $ ( 1,581 ) $ ( 5,836 ) $ 65,344

7 unchanged sentences

Transfers with NQDC plan 951 ( 951 ) ( 2 ) 2 — — —

Balance as of June 30, 2021 1,247,920,536 $ ( 14 ) $ 72,919 $ ( 1,510 ) $ ( 3,925 ) $ 67,470

Balance as of September 30, 2021 1,249,035,065 1,538,927 $ ( 13 ) $ 73,152 $ ( 1,478 ) $ ( 3,234 ) $ 68,427

The accompanying notes are an integral part of these condensed consolidated financial statements.

9 unchanged sentences

Revenue from Contracts with Customers

(Loss) E arnings Per Share

Repurchases of Common Stock

Earnings Per Share

Commitments and Contingencies

11 unchanged sentences

The condensed consolidated financial statements should be read in conjunction with our consolidated financial statements included in our Annual Report on Form 10-K for the year ended December 31, 2021.

On September 6, 2022, Sprint Communications LLC, a Kansas limited liability company and wholly owned subsidiary of the Company (“Sprint Communications”), Sprint LLC, a Delaware limited liability company and wholly owned subsidiary of the Company, and Cogent Infrastructure, Inc., a Delaware corporation (the “Buyer”) and a wholly owned subsidiary of Cogent Communications Holdings, Inc., entered into a Membership Interest Purchase Agreement (the “Purchase Agreement”), pursuant to which the Buyer will acquire the U.S.

long-haul fiber network and operations (including the non-U.S.

extensions thereof) of Sprint Communications and its subsidiaries (the “Wireline Business”).

The assets and liabilities of the Wireline Business disposal group are classified as held for sale and presented within Other current assets and Other current liabilities on our Condensed Consolidated Balance Sheets as of September 30, 2022.

The fair value of the Wireline Business disposal group, less costs to sell, will be reassessed during each reporting period it remains classified as held for sale, and any remeasurement to the lower of carrying amount or fair value less costs to sell will be reported as an adjustment included within Loss on disposal group held for sale on our Condensed Consolidated Statements of Comprehensive Income.

Unless otherwise specified, the amounts and information presented in the Notes to the Condensed Consolidated Financial Statements include assets and liabilities that have been reclassified as held for sale as of September 30, 2022.

On September 8, 2022, our Board of Directors authorized a stock repurchase program for up to $ 14.0 billion of our common stock through September 30, 2023 (the “2022 Stock Repurchase Program”).

The cost of repurchased shares, including equity reacquisition costs, is included in Treasury stock on our Condensed Consolidated Balance Sheets.

We accrue the cost of repurchased shares, and exclude such shares from the calculation of basic and diluted earnings per share, as of the trade date.

We recognize a liability for share repurchases which have not settled and for which cash has not been paid in Other current liabilities on our Condensed Consolidated Balance Sheets.

Cash payments to reacquire our shares, including equity reacquisition costs, are included in Repurchases of common stock on our Condensed Consolidated Statements of Cash Flows.

See Note 9 - Repurchases of Common Stock for more information about our 2022 Stock Repurchase Program.

The condensed consolidated financial statements include the balances and results of operations of T-Mobile and our consolidated subsidiaries.

9 unchanged sentences

Scope” (together, the “reference rate reform standard”).

The reference rate reform standard provides temporary optional expedients and allows for certain exceptions to applying existing GAAP for contract modifications and hedging relationships, subject to meeting certain criteria, that reference LIBOR or another reference rate expected to be discontinued as a result of reference rate reform.

The reference rate reform standard provides temporary optional expedients and allows for certain exceptions

Index for Notes to the Condensed Consolidated Financial Statements

to applying existing GAAP for contract modifications and hedging relationships, subject to meeting certain criteria, that reference LIBOR or another reference rate expected to be discontinued as a result of reference rate reform.

The reference rate reform standard is available for adoption through December 31, 2022, and the optional expedients for contract modifications must be elected for all arrangements within a given Accounting Standards Codification (“ASC”) Topic or Industry Subtopic.

As of January 1, 2022, we have elected to apply the practical expedients provided by the reference rate reform standard for all ASC Topics and Industry Subtopics related to eligible contract modifications as they occur.

This election did not have a material impact on our condensed consolidated financial statements for the three and six months ended June 30, 2022, and the impact of applying the election to future eligible contract modifications that occur through December 31, 2022, is also not expected to be material .

This election did not have a material impact on our condensed consolidated financial statements for the three and nine months ended September 30, 2022, and the impact of applying the election to future eligible contract modifications that occur through December 31, 2022, is also not expected to be material .

Contract Assets and Contract Liabilities Acquired in a Business Combination

5 unchanged sentences

In March 2022, the FASB issued ASU 2022-02, “Financial Instruments—Credit Losses (Topic 326):

Troubled Debt Restructurings and Vintage Disclosures.” The standard eliminates the accounting guidance within ASC 310-40 for troubled debt restructurings by creditors while enhancing disclosure requirements for certain loan refinancing and restructurings by

Index for Notes to the Condensed Consolidated Financial Statements

creditors when a borrower is experiencing financial difficulty.

Additionally, for public business entities, the standard requires disclosure of current-period gross write-offs by year of origination for financing receivables and net investments in leases within the scope of ASC 326-20.

The standard will become effective for us beginning January 1, 2023, and should be applied prospectively, with an option for modified retrospective application for provisions related to recognition and measurement of troubled debt restructurings.

The standard will become effective for us beginning January 1, 2023, and will be applied prospectively, with an option for modified retrospective application for provisions related to recognition and measurement of troubled debt restructurings.

Early adoption is permitted for us at any time.

8 unchanged sentences

Accounts Receivable Portfolio Segment

Accounts receivable balances are predominately composed of amounts currently due from customers (e.g., for wireless services and monthly device lease payments), device insurance administrators, wholesale partners, non-consolidated affiliates, other carriers and third-party retail channels.

Accounts receivable balances are predominately comprised of amounts currently due from customers (e.g., for wireless services and monthly device lease payments), device insurance administrators, wholesale partners, non-consolidated affiliates, other carriers and third-party retail channels.

We estimate credit losses associated with our accounts receivable portfolio segment using an expected credit loss model, which utilizes an aging schedule methodology based on historical information and adjusted for asset-specific considerations, current economic conditions and reasonable and supportable forecasts.

Index for Notes to the Condensed Consolidated Financial Statements

Our approach considers a number of factors, including our overall historical credit losses, net of recoveries, and payment experience, as well as current collection trends such as write-off frequency and severity.

We also consider other qualitative factors such as macro-economic conditions.

We also consider other qualitative factors such as current and forecasted macroeconomic conditions.

We consider the need to adjust our estimate of credit losses for reasonable and supportable forecasts of future economic conditions.

7 unchanged sentences

To determine a customer’s credit profile and assist in determining their credit class, we use a proprietary credit scoring model that measures the credit quality of a customer using several factors, such as credit bureau information, consumer credit risk scores and service and device plan characteristics.

EIP receivables had a combined weighted-average effective interest rate of 6.1 % and 5.6 % as of June 30, 2022, and December 31, 2021, respectively.

Index for Notes to the Condensed Consolidated Financial Statements

EIP receivables had a combined weighted-average effective interest rate of 6.9 % and 5.6 % as of September 30, 2022, and December 31, 2021, respectively.

The following table summarizes the EIP receivables, including imputed discounts and related allowance for credit losses:

(in millions) June 30,

(in millions) September 30,

2022 December 31,

4 unchanged sentences

EIP receivables, net of allowance for credit losses and imputed discount $ 7,562 $ 7,577

Classified on the condensed consolidated balance sheets as:

Classified on our condensed consolidated balance sheets as:

Equipment installment plan receivables, net of allowance for credit losses and imputed discount $ 5,048 $ 4,748

4 unchanged sentences

We manage our EIP receivables portfolio segment using delinquency and customer credit class as key credit quality indicators.

The following table presents the amortized cost of our EIP receivables by delinquency status, customer credit class and year of origination as of June 30, 2022:

The following table presents the amortized cost of our EIP receivables by delinquency status, customer credit class and year of origination as of September 30, 2022:

Originated in 2022 Originated in 2021 Originated prior to 2021 Total EIP Receivables, net of

7 unchanged sentences

We estimate credit losses on our EIP receivables segment by applying an expected credit loss model, which relies on historical loss data adjusted for current conditions to calculate default probabilities or an estimate for the frequency of customer default.

Index for Notes to the Condensed Consolidated Financial Statements

Our assessment of default probabilities includes receivables delinquency status, historical loss experience, how long the receivables have been outstanding and customer credit ratings, as well as customer tenure.

1 unchanged sentence

As we do for our accounts receivable portfolio segment, we consider the need to adjust our estimate of credit losses on EIP receivables for reasonable and supportable forecasts of economic conditions through monitoring external forecasts and periodic internal statistical analyses.

Index for Notes to the Condensed Consolidated Financial Statements

Activity for the six months ended June 30, 2022 and 2021, in the allowance for credit losses and unamortized imputed discount balances for the accounts receivable and EIP receivables segments were as follows:

June 30, 2022 June 30, 2021

Activity for the nine months ended September 30, 2022 and 2021, in the allowance for credit losses and unamortized imputed discount balances for the accounts receivable and EIP receivables segments were as follows:

September 30, 2022 September 30, 2021

(in millions) Accounts Receivable Allowance EIP Receivables Allowance Total Accounts Receivable Allowance EIP Receivables Allowance Total

5 unchanged sentences

Allowance for credit losses and imputed discount, end of period $ 161 $ 749 $ 910 $ 129 $ 578 $ 707

Credit loss activity has increased during 2022, as activity normalizes relative to muted Pandemic levels and other macroeconomic trends contribute to adverse scenarios and present additional uncertainty due to, for example, the potential effects associated with higher inflation, rising interest rates and changes in the Federal Reserve’s monetary policy, as well as geopolitical risks, including the war in Ukraine.

Off-Balance-Sheet Credit Exposures

We do not have material, unmitigated off-balance-sheet credit exposures as of June 30, 2022.

We do not have material, unmitigated off-balance-sheet credit exposures as of September 30, 2022.

In connection with the sales of certain service and EIP accounts receivable pursuant to the sale arrangements, we have deferred purchase price assets included on our Condensed Consolidated Balance Sheets measured at fair value that are based on a discounted cash flow model using Level 3 inputs, including customer default rates and credit worthiness, dilutions and recoveries.

4 unchanged sentences

Sales of EIP Receivables

As of both June 30, 2022, and December 31, 2021, the EIP sale arrangement provided funding of $ 1.3 billion.

As of both September 30, 2022, and December 31, 2021, the EIP sale arrangement provided funding of $ 1.3 billion.

In connection with this EIP sale arrangement, we formed a wholly owned subsidiary, which qualifies as a bankruptcy remote entity (the “EIP BRE”).

We consolidate the EIP BRE under the VIE model.

The following table summarizes the carrying amounts and classification of assets, which consist primarily of the deferred purchase price, and liabilities included on our Condensed Consolidated Balance Sheets with respect to the EIP BRE:

(in millions) June 30,

The following table summarizes the carrying amounts and classification of assets, which consist primarily of the deferred purchase price, included on our Condensed Consolidated Balance Sheets with respect to the EIP BRE:

(in millions) September 30,

2022 December 31,

1 unchanged sentence

Other assets 118 125

Index for Notes to the Condensed Consolidated Financial Statements

Sales of Service Accounts Receivable

The maximum funding commitment of the service receivable sale arrangement is $ 950 million and the facility expires in February 2023.

As of both June 30, 2022, and December 31, 2021, the service receivable sale arrangement provided funding of $ 775 million.

As of both September 30, 2022, and December 31, 2021, the service receivable sale arrangement provided funding of $ 775 million.

In connection with the service receivable sale arrangement, we formed a wholly owned subsidiary, which qualifies as a bankruptcy remote entity, to sell service accounts receivable (the “Service BRE”).

We consolidate the Service BRE under the VIE model.

Index for Notes to the Condensed Consolidated Financial Statements

(in millions) June 30,

(in millions) September 30,

2022 December 31,

2 unchanged sentences

Sales of Receivables

The following table summarizes the impact of the sale of certain service receivables and EIP receivables on our Condensed Consolidated Balance Sheets:

(in millions) June 30,

The following table summarizes the impact of the sale of certain service accounts receivable and EIP receivables on our Condensed Consolidated Balance Sheets:

(in millions) September 30,

2022 December 31,

Derecognized net service receivables and EIP receivables $ 2,315 $ 2,492

Derecognized net service accounts receivable and EIP receivables $ 2,411 $ 2,492

Other current assets 565 655

6 unchanged sentences

Net cash proceeds funded by reinvested collections 1,754 1,715

At inception, we elected to measure the deferred purchase price at fair value with changes in fair value included in Selling, general and administrative expense on our Condensed Consolidated Statements of Comprehensive (Loss) Income.

The fair value of the deferred purchase price is determined based on a discounted cash flow model which uses primarily Level 3 inputs, including customer default rates.

As of June 30, 2022, and December 31, 2021, our deferred purchase price related to the sales of service receivables and EIP receivables was $ 704 million and $ 779 million, respectively.

We recognized a loss from sales of receivables, including changes in fair value of the deferred purchase price, of $ 61 million and a gain of $ 12 million for the three months ended June 30, 2022 and 2021, respectively, and a loss of $ 108 million and a gain of $ 30 million for the six months ended June 30, 2022 and 2021, respectively, in Selling, general and administrative expense on our Condensed Consolidated Statements of Comprehensive (Loss) Income.

As of September 30, 2022, and December 31, 2021, our deferred purchase price related to the sales of service receivables and EIP receivables was $ 681 million and $ 779 million, respectively.

We recognized losses from sales of receivables, including changes in fair value of the deferred purchase price, of $ 60 million and $ 4 million for the three months ended September 30, 2022 and 2021, respectively, and a loss of $ 168 million and a gain of $ 26 million for the nine months ended September 30, 2022 and 2021, respectively, in Selling, general and administrative expense on our Condensed Consolidated Statements of Comprehensive Income.

Continuing Involvement

Pursuant to the sale arrangements described above, we have continuing involvement with the service receivables and EIP receivables we sell as we service the receivables, are required to repurchase certain receivables, including ineligible receivables, aged receivables and receivables where a write-off is imminent, and may be responsible for absorbing credit losses through reduced collections on our deferred purchase price assets.

Pursuant to the sale arrangements described above, we have continuing involvement with the service accounts receivable and EIP receivables we sell as we service the receivables, are required to repurchase certain receivables, including ineligible receivables, aged receivables and receivables where a write-off is imminent, and may be responsible for absorbing credit losses through reduced collections on our deferred purchase price assets.

We continue to service the customers and their related receivables, including facilitating customer payment collection, in exchange for a monthly servicing fee.

3 unchanged sentences

Note 4 – Spectrum License Transactions

The following table summarizes our spectrum license activity for the six months ended June 30, 2022:

The following table summarizes our spectrum license activity for the nine months ended September 30, 2022:

(in millions) 2022

1 unchanged sentence

Spectrum license acquisitions 3,148

Spectrum licenses transferred to held for sale ( 16 )

Costs to clear spectrum 29

Spectrum licenses, end of period $ 95,767

4 unchanged sentences

On May 4, 2022, the FCC issued us the licenses won in Auction 110.

The licenses are included in Spectrum licenses in our Condensed Consolidated Balance Sheets as of June 30, 2022.

Cash payments to acquire spectrum licenses and payments for costs to clear spectrum are included in Purchases of spectrum licenses and other intangible assets, including deposits, in our Condensed Consolidated Statements of Cash Flows.

DISH License Purchase Agreement

The licenses are included in Spectrum licenses on our Condensed Consolidated Balance Sheets as of September 30, 2022.

In September 2022, the FCC announced that we were the winning bidder of 7,156 licenses in Auction 108 (2.5 GHz) for an aggregate price of $ 304 million.

At inception of Auction 108 in June 2022, we deposited $ 65 million.

We paid the FCC the remaining $ 239 million for the licenses won in the auction in September 2022.

The aggregate cash payments made to the FCC are included in Other assets on our Condensed Consolidated Balance Sheets as of September 30, 2022, and will remain there until the corresponding licenses are received.

The timing of when the licenses will be issued will be determined by the FCC after all post-auction procedures have been completed.

Cash payments to acquire spectrum licenses and payments for costs to clear spectrum are included in Purchases of spectrum licenses and other intangible assets, including deposits, on our Condensed Consolidated Statements of Cash Flows for the three and nine months ended September 30, 2022.

License Purchase Agreements

DISH Network Corporation

On July 1, 2020, we and DISH Network Corporation (“DISH”) entered into a license purchase agreement (the “License Purchase Agreement”) pursuant to which DISH has the option to purchase certain 800 MHz spectrum licenses for a total of approximately $ 3.6 billion in a transaction to be completed, subject to an application for FCC approval, by July 1, 2023, or within five days of FCC approval, whichever date is later.

2 unchanged sentences

If the specified minimum price of $ 3.6 billion is not met in the auction, we would be relieved of the obligation to sell the licenses.

Channel 51 License Co LLC and LB License Co, LLC

On August 8, 2022, we, Channel 51 License Co LLC and LB License Co, LLC (together with Channel 51 License Co LLC, the “Sellers”) entered into License Purchase Agreements pursuant to which we will acquire spectrum in the 600 MHz band from the Sellers in exchange for total cash consideration of $ 3.5 billion.

The licenses will be acquired without any associated networks, but are currently being utilized through exclusive leasing arrangements with the Sellers.

The parties have agreed that closing will occur within 180 days after the receipt of required regulatory approvals, and payment of the $ 3.5 billion purchase price will occur no later than 40 days after the date of such closing.

We anticipate the transactions will close in mid- to late-2023.

Index for Notes to the Condensed Consolidated Financial Statements

Note 5 – Fair Value Measurements

5 unchanged sentences

We do not use derivatives for trading or speculative purposes.

Cash flows associated with qualifying hedge derivative instruments are presented in the same category on the Condensed Consolidated Statements of Cash Flows as the item being hedged.

We did not have any significant derivative instruments outstanding as of June 30, 2022, and December 31, 2021.

Cash flows associated with qualifying hedge derivative instruments are presented in the same category on our Condensed Consolidated Statements of Cash Flows as the item being hedged.

We did not have any significant derivative instruments outstanding as of September 30, 2022, and December 31, 2021.

Interest Rate Lock Derivatives

In April 2020, we terminated our interest rate lock derivatives entered into in October 2018.

Aggregate changes in the fair value of the interest rate lock derivatives, net of tax and amortization, of $ 1.4 billion and $ 1.5 billion are presented in Accumulated other comprehensive loss on our Condensed Consolidated Balance Sheets as of June 30, 2022, and December 31, 2021, respectively.

For the three months ended June 30, 2022 and 2021, $ 50 million and $ 47 million, respectively, and for the six months ended June 30, 2022 and 2021, $ 100 million and $ 93 million, respectively, were amortized from Accumulated other comprehensive loss into Interest expense, net, in the Condensed Consolidated Statements of Comprehensive (Loss) Income.

We expect to amortize $ 211 million of the Accumulated other comprehensive loss associated with the derivatives into Interest expense, net, over the 12 months ending June 30, 2023.

Index for Notes to the Condensed Consolidated Financial Statements

Aggregate changes in the fair value of the interest rate lock derivatives, net of tax and amortization, of $ 1.3 billion and $ 1.5 billion are presented in Accumulated other comprehensive loss on our Condensed Consolidated Balance Sheets as of September 30, 2022, and December 31, 2021, respectively.

For the three months ended September 30, 2022 and 2021, $ 51 million and $ 47 million, respectively, and for the nine months ended September 30, 2022 and 2021, $ 151 million and $ 140 million, respectively, were amortized from Accumulated other comprehensive loss into Interest expense, net, on our Condensed Consolidated Statements of Comprehensive Income.

We expect to amortize $ 215 million of the Accumulated other comprehensive loss associated with the derivatives into Interest expense, net, over the 12 months ending September 30, 2023.

Deferred Purchase Price Assets

1 unchanged sentence

See Note 3 – Sales of Certain Receivables for further information.

The carrying amounts of our deferred purchase price assets, which are measured at fair value on a recurring basis and are included on our Condensed Consolidated Balance Sheets, were $ 704 million and $ 779 million as of June 30, 2022, and December 31, 2021, respectively.

Fair value was equal to the carrying amount at June 30, 2022, and December 31, 2021.

The carrying amounts of our deferred purchase price assets, which are measured at fair value on a recurring basis and are included on our Condensed Consolidated Balance Sheets, were $ 681 million and $ 779 million as of September 30, 2022, and December 31, 2021, respectively.

Fair value was equal to the carrying amount at September 30, 2022, and December 31, 2021.

The fair value of our Senior Notes and Senior Secured Notes to third parties was determined based on quoted market prices in active markets, and therefore were classified as Level 1 within the fair value hierarchy.

2 unchanged sentences

Although we have determined the estimated fair values using available market information and commonly accepted valuation methodologies, considerable judgment was required in interpreting market data to develop fair value estimates for the Senior Notes to affiliates.

The fair value estimates were based on information available as of June 30, 2022, and December 31, 2021.

The fair value estimates were based on information available as of September 30, 2022, and December 31, 2021.

As such, our estimates are not necessarily indicative of the amount we could realize in a current market exchange.

Index for Notes to the Condensed Consolidated Financial Statements

The carrying amounts and fair values of our short-term and long-term debt included on our Condensed Consolidated Balance Sheets were as follows:

Level within the Fair Value Hierarchy June 30, 2022 December 31, 2021

Level within the Fair Value Hierarchy September 30, 2022 December 31, 2021

(in millions) Carrying Amount (1)

3 unchanged sentences

Senior Notes to third parties (2)

1 $ 68,946 $ 59,904 $ 30,309 $ 32,093

Senior Notes to affiliates 2 1,495 1,412 3,739 3,844

Senior Secured Notes to third parties (2)

(1) Excludes $ 35 million and $ 47 million as of June 30, 2022, and December 31, 2021, respectively, in other financial liabilities as the carrying values approximate fair value primarily due to the short-term maturities of these instruments.

1 3,255 3,095 40,098 42,393

(1) Excludes $ 31 million and $ 47 million as of September 30, 2022, and December 31, 2021, respectively, in other financial liabilities as the carrying values approximate fair value primarily due to the short-term maturities of these instruments.

(2) Following the achievement of an investment grade issuer rating from each of the three main credit rating agencies and entry into an amendment to our Credit Agreement, the Senior Secured Notes, other than our Spectrum-Backed Notes, are no longer secured by any of our present or future assets and have been reclassified to Senior Notes to third parties as of September 30, 2022, within the table above.

See Note 6 – Debt for additional information.

Note 6 – Debt

The following table sets forth the debt balances and activity as of and for the six months ended June 30, 2022 :

The following table sets forth the debt balances and activity as of and for the nine months ended September 30, 2022 :

(in millions) December 31,

2021 Proceeds from Issuances and Borrowings (1)

Note Redemptions (1)

Repayments Reclassifications (1)

September 30,

Short-term debt $ 3,378 $ — $ ( 500 ) $ ( 395 ) $ 4,967 $ ( 52 ) $ 7,398

4 unchanged sentences

Total debt $ 74,193 $ 2,969 $ ( 2,750 ) $ ( 395 ) $ — $ ( 290 ) $ 73,727

(1) Note redemptions and reclassifications are recorded net of related issuance costs, discounts and premiums.

(1) Issuances and borrowings, note redemptions and reclassifications are recorded net of related issuance costs, discounts and premiums.

(2) Other includes the amortization of premiums, discounts, debt issuance costs and consent fees.

Our effective interest rate, excluding the impact of derivatives and capitalized interest, was approximately 3.8 % and 4.1 % for the three months ended June 30, 2022 and 2021, respectively, and 3.9 % and 4.2 % for the six months ended June 30, 2022 and 2021, respectively, on weighted-average debt outstanding of $ 71.4 billion and $ 75.5 billion for the three months ended June 30, 2022 and 2021, respectively, and on weighted-average debt outstanding of $ 72.6 billion and $ 74.5 billion for the six months ended June 30, 2022 and 2021, respectively.

Our effective interest rate, excluding the impact of derivatives and capitalized interest, was approximately 3.8 % and 4.0 % for the three months ended September 30, 2022 and 2021, respectively, and 3.9 % and 4.1 % for the nine months ended September 30, 2022 and 2021, respectively, on weighted-average debt outstanding of $ 71.6 billion and $ 74.5 billion for the three months ended September 30, 2022 and 2021, respectively, and on weighted-average debt outstanding of $ 72.4 billion and $ 74.4 billion for the nine months ended September 30, 2022 and 2021, respectively.

The weighted-average debt outstanding was calculated by applying an average of the monthly ending balances of total short-term and long-term debt and short-term and long-term debt to affiliates, net of unamortized premiums, discounts, debt issuance costs and consent fees.

Issuances and Borrowings

During the nine months ended September 30, 2022, we issued the following Senior Notes:

(in millions) Principal Issuances Premiums/Discounts and Issuance Costs Net Proceeds from Issuance of Long-Term Debt Issue Date

5.200 % Senior Notes due 2033

$ 1,250 $ ( 8 ) $ 1,242 September 15, 2022

5.650 % Senior Notes due 2053

1,000 ( 11 ) 989 September 15, 2022

5.800 % Senior Notes due 2062

750 ( 12 ) 738 September 15, 2022

Total of Senior Notes issued $ 3,000 $ ( 31 ) $ 2,969

Senior Secured Notes

Following the achievement of an investment grade issuer rating from each of the three main credit rating agencies, on August 22, 2022, we entered into an amendment (“Credit Agreement Amendment”) to our Credit Agreement, dated April 1, 2020.

Upon effectiveness of the Credit Agreement Amendment, the liens securing the Senior Secured Notes were automatically released, and our obligations under the Senior Secured Notes (hereafter, “Senior Notes”), other than our Spectrum-Backed notes, are no longer secured by any of our present or future assets.

Index for Notes to the Condensed Consolidated Financial Statements

Note Redemptions and Repayments

During the six months ended June 30, 2022, we made the following note redemptions and repayments:

During the nine months ended September 30, 2022, we made the following note redemptions and repayments:

(in millions) Principal Amount Redemption or Repayment Date Redemption Price

10 unchanged sentences

Total Repayments $ 395

Asset-backed Notes

Subsequent to September 30, 2022, on October 12, 2022, we issued $ 750 million of 4.910 % Class A senior asset-backed notes (“ABS Notes”) to third-party investors in a private placement transaction.

Our ABS Notes are secured by $ 1.0 billion of gross EIP receivables and future collections on such receivables.

In connection with issuing the ABS Notes, we formed a wholly owned subsidiary, which qualifies as a bankruptcy remote entity (the “ABS BRE”), and a trust (the “ABS Trust” and together with the ABS BRE, the “ABS Entities”), in which the ABS BRE holds a residual interest.

We will include the balances and results of operations of the ABS Entities in our consolidated financial statements.

The ABS BRE’s residual interest in the ABS Trust represents the rights to all funds not needed to make required payments on the ABS Notes and other related payments and expenses.

Under the terms of the ABS Notes, our wholly owned subsidiary, T-Mobile Financial LLC (“FinCo”), and certain of our other wholly owned subsidiaries (collectively, the “Originators”) transfer EIP receivables to the ABS BRE, which in turn transfers such receivables to the ABS Trust, which issued the ABS Notes.

The Class A senior ABS Notes have an expected weighted average life of approximately 2.5 years.

Under the terms of the transaction, there is a two-year revolving period during which we may transfer additional receivables to the ABS Entities as collections on the receivables are received.

The third-party investors in the Class A senior ABS Notes have legal recourse only to the assets of the ABS Issuer securing the ABS Notes and do not have any recourse to T-Mobile with respect to the payment of principal and interest.

The receivables transferred to the ABS Issuer will only be available for payment of the ABS Notes and other obligations arising from the transaction and will not be available to pay any obligations or claims of T-Mobile’s creditors.

Under a parent support agreement, T-Mobile has agreed to guarantee the performance of the obligations of FinCo, which will continue to service the receivables, and the other T-Mobile entities participating in the transaction to the ABS Issuer.

However, T-Mobile does not guarantee any principal or interest on the ABS Notes or any payments on the underlying EIP receivables.

Net proceeds of $ 748 million from our ABS Notes will be reflected in Proceeds from issuance of long-term debt in our Consolidated Statements of Cash Flows in the three months ending December 31, 2022.

The ABS Notes issued and the assets securing this debt will be included on our Consolidated Balance Sheets.

The expected maturities of our ABS Notes are as follows:

Expected Maturities

(in millions) 2024 2025

Class A Senior ABS Notes $ 198 $ 552

Credit Facilities

Subsequent to September 30, 2022, on October 17, 2022, T-Mobile USA, Inc., our wholly owned subsidiary, and certain of its affiliates, as guarantors, entered into an Amended and Restated Credit Agreement (the “October 2022 Credit Agreement”) with certain financial institutions named therein.

The October 2022 Credit Agreement amends and restates in its entirety the Credit Agreement originally dated April 1, 2020, and provides for a $ 7.5 billion revolving credit facility, including a letter of credit sub-facility of up to $ 1.5 billion, and a swingline loan sub-facility of up to $ 500 million.

Commitments under the October 2022

Index for Notes to the Condensed Consolidated Financial Statements

Credit Agreement will mature on October 17, 2027, except as otherwise extended or replaced.

Borrowings under the October 2022 Credit Agreement will bear interest based upon the applicable benchmark rate, depending on the type of loan and, in some cases, at our election, plus a margin.

The October 2022 Credit Agreement contains customary representations, warranties and covenants, including a financial maintenance covenant of 4.5 x with respect to T-Mobile USA, Inc.’s Leverage Ratio (as defined therein) commencing with the period ending December 31, 2022.

Note 7 – Tower Obligations

11 unchanged sentences

These activities include managing tenants and underlying ground leases, performing repair and maintenance on the towers, the obligation to absorb expected losses and the right to receive the expected future residual returns from the purchase option to acquire the CCI Lease Sites.

As we determined that we are not the primary beneficiary and do not have a controlling financial interest in the Lease Site SPEs, the Lease Site SPEs are not included in our condensed consolidated financial statements.

However, we also considered if this arrangement resulted in the sale of the CCI Lease Sites for which we would de-recognize the tower assets.

As we determined that we are not the primary beneficiary and do not have a controlling financial interest in the Lease Site SPEs, the Lease Site SPEs are not included on our condensed consolidated financial statements.

However, we also considered if this arrangement resulted in the sale of the CCI Lease Sites for which we would derecognize the tower assets.

By assessing whether control had transferred, we concluded that transfer of control criteria, as discussed in the revenue standard, were not met.

3 unchanged sentences

Acquired CCI Tower Lease Arrangements

Prior to the merger (the “Merger”) with Sprint Corporation (“Sprint”), Sprint entered into a lease-out and leaseback arrangement with Global Signal Inc., a third party that was subsequently acquired by CCI, that conveyed to CCI the exclusive right to manage and operate approximately 6,400 tower sites (“Master Lease Sites”) via a master prepaid lease.

Prior to our merger (the “Merger”) with Sprint Corporation (“Sprint”) in April 2020, Sprint entered into a lease-out and leaseback arrangement with Global Signal Inc., a third party that was subsequently acquired by CCI, that conveyed to CCI the exclusive right to manage and operate approximately 6,400 tower sites (“Master Lease Sites”) via a master prepaid lease.

These agreements were assumed upon the close of the Merger, at which point the remaining term of the lease-out was approximately 17 years with no renewal options.

1 unchanged sentence

We lease back a portion of the space at certain tower sites.

Index for Notes to the Condensed Consolidated Financial Statements

We considered if this arrangement resulted in the sale of the Master Lease Sites for which we would de-recognize the tower assets.

We considered if this arrangement resulted in the sale of the Master Lease Sites for which we would derecognize the tower assets.

By assessing whether control had transferred, we concluded that transfer of control criteria, as discussed in the revenue standard, were not met.

2 unchanged sentences

Additionally, we recognized $ 1.7 billion in Other long-term liabilities associated with contract terms that are unfavorable to current market rates, which include unfavorable terms associated with the fixed-price purchase option in 2037.

Index for Notes to the Condensed Consolidated Financial Statements

We recognize interest expense on the tower obligations.

9 unchanged sentences

The following table summarizes the balances associated with both of the tower arrangements on our Condensed Consolidated Balance Sheets:

(in millions) June 30,

(in millions) September 30,

2022 December 31,

2 unchanged sentences

Other long-term liabilities 554 1,712

Future minimum payments related to the tower obligations are approximately $ 418 million for the 12-month period ending June 30, 2023, $ 837 million in total for both of the 12-month periods ending June 30, 2024 and 2025, $ 778 million in total for both of the 12-month periods ending June 30, 2026 and 2027, and $ 4.7 billion in total thereafter.

Future minimum payments related to the tower obligations are approximately $ 421 million for the 12-month period ending September 30, 2023, $ 826 million in total for both of the 12-month periods ending September 30, 2024 and 2025, $ 783 million in total for both of the 12-month periods ending September 30, 2026 and 2027, and $ 4.6 billion in total thereafter.

Note 8 – Revenue from Contracts with Customers

4 unchanged sentences

• Wholesale customers include Machine-to-Machine and Mobile Virtual Network Operator customers that operate on our network but are managed by wholesale partners.

Index for Notes to the Condensed Consolidated Financial Statements

Postpaid service revenues, including postpaid phone revenues and postpaid other revenues, were as follows:

Three Months Ended June 30, Six Months Ended June 30,

Three Months Ended September 30, Nine Months Ended September 30,

(in millions) 2022 2021 2022 2021

4 unchanged sentences

We operate as a single operating segment.

The balances presented in each revenue line item on our Condensed Consolidated Statements of Comprehensive (Loss) Income represent categories of revenue from contracts with customers disaggregated by type of product and service.

The balances presented in each revenue line item on our Condensed Consolidated Statements of Comprehensive Income represent categories of revenue from contracts with customers disaggregated by type of product and service.

Postpaid and prepaid service revenues also include revenues earned for providing premium services to customers, such as device insurance services and customer-based, third-party services.

Revenue generated from the lease of mobile communication devices is included in Equipment revenues on our Condensed Consolidated Statements of Comprehensive (Loss) Income.

Revenue generated from the lease of mobile communication devices is included in Equipment revenues on our Condensed Consolidated Statements of Comprehensive Income.

Index for Notes to the Condensed Consolidated Financial Statements

Equipment revenues from the lease of mobile communication devices were as follows:

Three Months Ended June 30, Six Months Ended June 30,

Three Months Ended September 30, Nine Months Ended September 30,

(in millions) 2022 2021 2022 2021

1 unchanged sentence

We provide wireline communication services to domestic and international customers.

Wireline service revenues were $ 143 million and $ 187 million for the three months ended June 30, 2022 and 2021, respectively, and $ 289 million and $ 384 million for the six months ended June 30, 2022 and 2021, respectively.

Wireline service revenues are presented in Wholesale and other service revenues on our Condensed Consolidated Statements of Comprehensive (Loss) Income.

Wireline service revenues were $ 144 million and $ 179 million for the three months ended September 30, 2022 and 2021, respectively, and $ 433 million and $ 563 million for the nine months ended September 30, 2022 and 2021, respectively.

Wireline service revenues are presented in Wholesale and other service revenues on our Condensed Consolidated Statements of Comprehensive Income.

In September 2022, we entered into an agreement for the sale of the Wireline Business.

See Note 10 – Wireline for additional information.

Contract Balances

The contract asset and contract liability balances from contracts with customers as of June 30, 2022, and December 31, 2021, were as follows:

The contract asset and contract liability balances from contracts with customers as of September 30, 2022, and December 31, 2021, were as follows:

(in millions) Contract

1 unchanged sentence

Balance as of December 31, 2021 $ 286 $ 763

Balance as of June 30, 2022 294 756

Balance as of September 30, 2022 286 739

Change $ — $ ( 24 )

Contract assets primarily represent revenue recognized for equipment sales with promotional bill credits offered to customers that are paid over time and are contingent on the customer maintaining a service contract.

The change in the contract asset balance includes customer activity related to new promotions, offset by billings on existing contracts and impairment which is recognized as bad debt expense.

The current portion of our contract assets of approximately $ 227 million and $ 219 million as of June 30, 2022, and December 31, 2021, respectively, was included in Other current assets on our Condensed Consolidated Balance Sheets.

Contract asset balances were impacted by customer activity related to new promotions, offset by billings on existing contracts and impairment, which is recognized as bad debt expense.

The current portion of our contract assets of approximately $ 222 million and $ 219 million as of September 30, 2022, and December 31, 2021, respectively, was included in Other current assets on our Condensed Consolidated Balance Sheets.

Contract liabilities are recorded when fees are collected, or we have an unconditional right to consideration (a receivable) in advance of delivery of goods or services.

1 unchanged sentence

Contract liabilities are primarily included in Deferred revenue on our Condensed Consolidated Balance Sheets.

Revenues for the three and six months ended June 30, 2022 and 2021, include the following:

Three Months Ended June 30, Six Months Ended June 30,

Revenues for the three and nine months ended September 30, 2022 and 2021, include the following:

Three Months Ended September 30, Nine Months Ended September 30,

(in millions) 2022 2021 2022 2021

Amounts included in the beginning of year contract liability balance $ 17 $ 29 $ 702 $ 753

Index for Notes to the Condensed Consolidated Financial Statements

Remaining Performance Obligations

As of June 30, 2022, the aggregate amount of transaction price allocated to remaining service performance obligations for postpaid contracts with subsidized devices and promotional bill credits that result in an extended service contract is $ 700 million.

As of September 30, 2022, the aggregate amount of transaction price allocated to remaining service performance obligations for postpaid contracts with subsidized devices and promotional bill credits that result in an extended service contract is $ 602 million.

We expect to recognize revenue as the service is provided on these postpaid contracts over an extended contract term of 24 months from the time of origination.

2 unchanged sentences

This variable consideration has been excluded from the disclosure of remaining performance obligations.

As of June 30, 2022, the aggregate amount of the contractual minimum consideration for wholesale, roaming and service contracts is $ 1.1 billion, $ 2.3 billion and $ 4.7 billion for 2022, 2023, and 2024 and beyond, respectively.

As of September 30, 2022, the aggregate amount of the contractual minimum consideration for wholesale, roaming and service contracts is $ 534 million, $ 2.3 billion and $ 5.1 billion for 2022, 2023, and 2024 and beyond, respectively.

These contracts have a remaining duration ranging from less than one year to eight years .

Index for Notes to the Condensed Consolidated Financial Statements

Contract Costs

The balance of deferred incremental costs to obtain contracts with customers was $ 1.7 billion and $ 1.5 billion as of June 30, 2022, and December 31, 2021, respectively, and is included in Other assets on our Condensed Consolidated Balance Sheets.

The balance of deferred incremental costs to obtain contracts with customers was $ 1.8 billion and $ 1.5 billion as of September 30, 2022, and December 31, 2021, respectively, and is included in Other assets on our Condensed Consolidated Balance Sheets.

Deferred contract costs incurred to obtain postpaid service contracts are amortized over a period of 24 months.

The amortization period is monitored to reflect any significant change in assumptions.

Amortization of deferred contract costs included in Selling, general and administrative expenses on our Condensed Consolidated Statements of Comprehensive (Loss) Income were $ 358 million and $ 264 million for the three months ended June 30, 2022 and 2021, respectively, and $ 682 million and $ 512 million for the six months ended June 30, 2022 and 2021, respectively.

Amortization of deferred contract costs included in Selling, general and administrative expenses on our Condensed Consolidated Statements of Comprehensive Income were $ 375 million and $ 277 million for the three months ended September 30, 2022 and 2021, respectively, and $ 1.1 billion and $ 789 million for the nine months ended September 30, 2022 and 2021, respectively.

The deferred contract cost asset is assessed for impairment on a periodic basis.

There were no impairment losses recognized on deferred contract cost assets for the three and six months ended June 30, 2022 and 2021.

Note 9 – (Loss) Earnings Per Share

The computation of basic and diluted (loss) earnings per share was as follows:

Three Months Ended June 30, Six Months Ended June 30,

There were no impairment losses recognized on deferred contract cost assets for the three and nine months ended September 30, 2022 and 2021.

Note 9 – Repurchases of Common Stock

2022 Stock Repurchase Program

On September 8, 2022, our Board of Directors authorized our 2022 Stock Repurchase Program for up to $ 14.0 billion of our common stock through September 30, 2023.

Under the 2022 Stock Repurchase Program, repurchases can be made from time to time using a variety of methods, which may include open market purchases, 10b5-1 plans, privately negotiated transactions or other methods, all in accordance with the rules of the Securities and Exchange Commission and other applicable legal requirements.

The specific timing, price and size of repurchases will depend on prevailing stock prices, general economic and market conditions, and other considerations and may include up to $ 3.0 billion of our common stock in 2022.

The 2022 Stock Repurchase Program does not obligate us to acquire any particular amount of common stock, and the 2022 Stock Repurchase Program may be suspended or discontinued at any time at our discretion.

Repurchased shares will be held as Treasury stock on our Condensed Consolidated Balance Sheets.

During the three and nine months ended September 30, 2022, we repurchased 4,892,315 shares of our common stock at an average price per share of $ 136.65 for a total purchase price of $ 669 million, all of which were purchased under the 2022 Stock Repurchase program and occurred during the period from September 8, 2022, through September 30, 2022.

As of September 30, 2022, we had up to approximately $ 13.3 billion remaining under the 2022 Stock Repurchase Program, of which up to approximately $ 2.3 billion was available for the remainder of 2022.

Subsequent to September 30, 2022, from October 1, 2022, through October 20, 2022, we repurchased 5,964,813 shares of our common stock at an average price per share of $ 136.57 for a total purchase price of $ 815 million.

As of October 20, 2022, we had up to approximately $ 12.5 billion remaining under the 2022 Stock Repurchase Program, of which up to approximately $ 1.5 billion was available for the remainder of 2022.

Note 10 – Wireline

Sale of the Wireline Business

On September 6, 2022, two of our wholly owned subsidiaries, Sprint Communications and Sprint LLC, and Cogent Infrastructure, Inc., entered into the Purchase Agreement, pursuant to which the Buyer will acquire the Wireline Business.

The Purchase Agreement provides that, upon the terms and conditions set forth therein, the Buyer will purchase all of the issued and outstanding membership interests (the “Purchased Interests”) of a Delaware limited liability company that holds certain assets and liabilities relating to the Wireline Business (such transactions contemplated by the Purchase Agreement are collectively referred to as the “Wireline Transaction”).

The parties have agreed to a $ 1 purchase price in consideration for the Purchased Interests, subject to customary adjustments set forth in the Purchase Agreement.

In addition, at the consummation of the Wireline Transaction (the “Closing”), a T-Mobile affiliate will enter into a commercial agreement for IP transit services, pursuant to which T-Mobile will pay to the Buyer an aggregate of $ 700 million, consisting of (i) $ 350 million in equal monthly installments during the first year after the Closing and (ii) $ 350 million in equal monthly installments over the subsequent 42 months.

The Closing is subject to customary closing conditions, including the receipt of certain required regulatory approvals and consents.

Subject to the satisfaction or waiver of certain conditions and other terms and conditions of the Purchase Agreement, the Wireline Transaction is expected to close in the second half of 2023.

Index for Notes to the Condensed Consolidated Financial Statements

As a result of the Purchase Agreement and related anticipated Wireline Transaction, we concluded that the Wireline Business met the held for sale criteria upon entering into the Purchase Agreement.

As such, the assets and liabilities of the Wireline Business disposal group are classified as held for sale and presented within Other current assets and Other current liabilities on our Condensed Consolidated Balance Sheets as of September 30, 2022.

The components of assets and liabilities held for sale presented within Other current assets and Other current liabilities, respectively, on our Condensed Consolidated Balance Sheets as of September 30, 2022, were as follows:

(in millions) September 30,

Cash and cash equivalents $ 28

Accounts receivable, net 38

Prepaid expenses 5

Other current assets 4

Property and equipment, net 503

Operating lease right-of-use assets 120

Other intangible assets, net 7

Other assets 7

Remeasurement of disposal group held for sale to fair value less costs to sell (1)

Assets held for sale $ 341

Accounts payable and accrued liabilities $ 63

Deferred revenue 4

Short-term operating lease liabilities 60

Operating lease liabilities 259

Other long-term liabilities 40

Liabilities held for sale 426

Liabilities held for sale, net $ ( 85 )

(1) Excludes amounts related to the establishment of liabilities for contractual and other payments associated with the Wireline Transaction, including the $ 700 million of fees payable for IP transit services discounted to present value and other payments to the Buyer anticipated in connection with the Wireline Transaction.

In connection with the expected sale of the Wireline Business and classification of related assets and liabilities as held for sale, we recognized a pre-tax loss of $ 1.1 billion during the three months ended September 30, 2022, which is included within Loss on disposal group held for sale on our Condensed Consolidated Statements of Comprehensive Income.

The components of the Loss on disposal group held for sale on our Condensed Consolidated Statements of Comprehensive Income for the three and nine months ended September 30, 2022, were as follows:

in millions Three and Nine Months Ended September 30, 2022

Write-down of Wireline Business net assets $ 295

Accrual of estimated costs to sell 76

Recognition of liability for IP transit services agreement (1)

Recognition of other obligations to Buyer to be paid at or after Closing 59

Loss on disposal group held for sale $ 1,071

(1) We will continue to recognize accretion expense through the expiration of the agreement which will be included in Interest expense, net separate from the Loss on disposal group held for sale on our Condensed Consolidated Statements of Comprehensive Income.

The present value of the liability for fees payable for IP transit services has been recognized as a component of Loss on disposal group held for sale as we have not currently identified any path to utilize such services in our continuing operations and have committed to execute the agreement as a closing condition for the Wireline Transaction.

We will continue to evaluate potential uses on an ongoing basis over the life of the agreement.

Approximately $ 29 million and $ 613 million of this liability, including accrued interest, is presented within Other current liabilities and Other long-term liabilities, respectively, on our Condensed Consolidated Balance Sheets as of September 30, 2022, in accordance with the expected timing of the related payments.

Approximately $ 24 million and $ 35 million for contractual and other payments associated with the Transaction are presented

Index for Notes to the Condensed Consolidated Financial Statements

within Other current liabilities and Other long-term liabilities, respectively, on our Condensed Consolidated Balance Sheets as of September 30, 2022, in accordance with the expected timing of the related payments.

We do not consider the sale of the Wireline Business to be a strategic shift that will have a major effect on the Company’s operations and financial results, and therefore it does not qualify for reporting as a discontinued operation.

Other Wireline Asset Sales

Separate from the Wireline Transaction, we sold certain IP addresses held by the Wireline Business to other third parties during the three months ended September 30, 2022, for which we recognized a gain on disposal of $ 121 million, which is included as a reduction to Selling, general and administrative expenses on our Condensed Consolidated Statements of Comprehensive Income.

Wireline Impairment

We provide wireline communication services to domestic and international customers via the legacy Sprint Wireline U.S.

long-haul fiber network (including non-U.S.

extensions thereof) acquired through the Merger.

The legacy Sprint Wireline network is primarily comprised of owned property and equipment, including land, buildings, communication systems and data processing equipment, fiber optic cable and operating lease right-of-use assets.

Previously, the operation of the legacy Sprint CDMA and LTE wireless networks was supported by the legacy Sprint Wireline network.

During the second quarter of 2022, we retired the legacy Sprint CDMA network and began the orderly shut-down of the LTE network.

We assess long-lived assets for impairment when events or circumstances indicate that they might be impaired.

During the second quarter of 2022, we determined that the retirement of the legacy Sprint CDMA and LTE wireless networks triggered the need to assess the Wireline long-lived assets for impairment, as these assets no longer support our wireless network and the associated customers and cash flows in a significant manner.

In evaluating whether the Wireline long-lived assets were impaired, we estimated the fair value of these assets using a combination of the cost, income and market approaches, including market participant assumptions.

The fair value measurement of the Wireline assets was estimated using significant inputs not observable in the market (Level 3).

The results of this assessment indicated that certain Wireline long-lived assets were impaired, and as a result, we recorded non-cash impairment expense of $ 477 million during the nine months ended September 30, 2022, all of which relates to the impairment recognized during the three months ended June 30, 2022, of which $ 258 million is related to Wireline Property and equipment, $ 212 million is related to Operating lease right-of-use assets and $ 7 million is related to Other intangible assets.

In measuring and allocating the impairment expense to individual Wireline long-lived assets, we did not impair the long-lived assets below their individual fair values.

The expense is included within Impairment expense in our Condensed Consolidated Statements of Comprehensive Income.

There was no impairment expense recognized for the three and nine months ended September 30, 2021.

Note 11 – Income Taxes

Within our Condensed Consolidated Statements of Comprehensive Income, we recorded an Income tax benefit of $ 57 million and $ 3 million for the three months ended September 30, 2022 and 2021, respectively, and Income tax expense of $ 106 million and $ 520 million for the nine months ended September 30, 2022 and 2021, respectively.

The increase in Income tax benefit for the three months ended September 30, 2022, was primarily from tax benefits associated with internal restructuring and lower income before income taxes, partially offset by tax benefits recognized in the three months ended September 30, 2021, associated with legal entity reorganization related to historical Sprint entities, including a reduction in the valuation allowance against deferred tax assets in certain state jurisdictions that did not impact the three months ended September 30, 2022.

The decrease in Income tax expense for the nine months ended September 30, 2022, was primarily from lower income before income taxes and tax benefits associated with internal restructuring, partially offset by tax benefits recognized in the nine months ended September 30, 2021, associated with legal entity reorganization related to historical Sprint entities, including a reduction in the valuation allowance against deferred tax assets in certain state jurisdictions, that did not impact the nine months ended September 30, 2022, and a decrease in excess tax benefits related to the vesting of restricted stock awards.

The effective tax rate was ( 12.4 )% and ( 0.3 )% for the three months ended September 30, 2022 and 2021, respectively, and 8.7 % and 16.7 % for the nine months ended September 30, 2022 and 2021, respectively.

Index for Notes to the Condensed Consolidated Financial Statements

Note 12 – Earnings Per Share

The computation of basic and diluted earnings per share was as follows:

Three Months Ended September 30, Nine Months Ended September 30,

(in millions, except shares and per share amounts) 2022 2021 2022 2021

Net (loss) income $ ( 108 ) $ 978 $ 605 $ 1,911

Net income $ 508 $ 691 $ 1,113 $ 2,602

Weighted-average shares outstanding – basic 1,253,873,429 1,248,189,719 1,252,783,140 1,246,441,464

2 unchanged sentences

Weighted-average shares outstanding – diluted 1,259,210,271 1,253,661,245 1,258,061,478 1,254,391,787

(Loss) earnings per share – basic $ ( 0.09 ) $ 0.78 $ 0.48 $ 1.53

(Loss) earnings per share – diluted ( 0.09 ) 0.78 0.48 1.52

Earnings per share – basic $ 0.40 $ 0.55 $ 0.89 $ 2.09

Earnings per share – diluted 0.40 0.55 0.88 2.07

Potentially dilutive securities:

3 unchanged sentences

(1) Represents the weighted-average SoftBank Specified Shares that are contingently issuable from the acquisition date of April 1, 2020, pursuant to a letter agreement dated February 20, 2020, between T-Mobile, SoftBank and Deutsche Telekom AG (“DT”).

As of June 30, 2022, we had authorized 100 million shares of preferred stock, with a par value of $ 0.00001 per share.

There was no preferred stock outstanding as of June 30, 2022 and 2021.

Potentially dilutive securities were not included in the computation of diluted (loss) earnings per share if to do so would have been anti-dilutive.

As of September 30, 2022, we had authorized 100 million shares of preferred stock, with a par value of $ 0.00001 per share.

There was no preferred stock outstanding as of September 30, 2022 and 2021.

Potentially dilutive securities were not included in the computation of diluted earnings per share if to do so would have been anti-dilutive.

The SoftBank Specified Shares Amount of 48,751,557 shares of T-Mobile common stock was determined to be contingent consideration for the Merger and is not dilutive until the defined volume-weighted average price per share is reached.

Index for Notes to the Condensed Consolidated Financial Statements

Note 13 – Leases

8 unchanged sentences

As a result of this modification, we remeasured the associated right-of use assets and lease liabilities resulting in an increase of $ 5.3 billion to each on the effective date of the modification, with a corresponding gross increase to both deferred tax liabilities and assets of $ 1.3 billion.

Index for Notes to the Condensed Consolidated Financial Statements

The components of lease expense were as follows:

Three Months Ended June 30, Six Months Ended June 30,

Three Months Ended September 30, Nine Months Ended September 30,

(in millions) 2022 2021 2022 2021

6 unchanged sentences

Total lease expense $ 1,818 $ 1,879 $ 6,210 $ 5,372

As of June 30, 2022, the weighted-average remaining lease term and discount rate for operating leases were 10 years and 3.9 %, respectively.

Maturities of lease liabilities as of June 30, 2022, were as follows:

As of September 30, 2022, the weighted-average remaining lease term and discount rate for operating leases were 10 years and 4.0 %, respectively.

Maturities of lease liabilities as of September 30, 2022, were as follows:

(in millions) Operating Leases Finance Leases

Twelve Months Ending June 30,

Twelve Months Ending September 30,

2023 $ 4,679 $ 1,286

7 unchanged sentences

Total $ 33,957 $ 2,829

Interest payments for financing leases were $ 16 million and $ 17 million for the three months ended June 30, 2022 and 2021, respectively, and $ 31 million and $ 36 million for the six months ended June 30, 2022 and 2021, respectively.

As of June 30, 2022, we have additional operating leases for commercial properties that have not yet commenced with future lease payments of approximately $ 214 million.

Index for Notes to the Condensed Consolidated Financial Statements

Interest payments for financing leases were $ 18 million and $ 15 million for the three months ended September 30, 2022 and 2021, respectively, and $ 49 million and $ 51 million for the nine months ended September 30, 2022 and 2021, respectively.

As of September 30, 2022, we have additional operating leases for commercial properties that have not yet commenced with future lease payments of approximately $ 253 million.

Note 14 – Commitments and Contingencies

2 unchanged sentences

In addition, we have commitments to purchase wireless devices, network services, equipment, software, marketing sponsorship agreements and other items in the ordinary course of business, with various terms through 2043.

Our purchase commitments are approximately $ 4.4 billion for the 12-month period ending June 30, 2023, $ 5.3 billion in total for both of the 12-month periods ending June 30, 2024 and 2025, $ 2.5 billion in total for both of the 12-month periods ending June 30, 2026 and 2027, and $ 2.9 billion in total thereafter.

Our purchase commitments are approximately $ 4.8 billion for the 12-month period ending September 30, 2023, $ 5.0 billion in total for both of the 12-month periods ending September 30, 2024 and 2025, $ 2.7 billion in total for both of the 12-month periods ending September 30, 2026 and 2027, and $ 2.9 billion in total thereafter.

These amounts are not reflective of our entire anticipated purchases under the related agreements but are determined based on the non-cancelable quantities or termination amounts to which we are contractually obligated.

7 unchanged sentences

The purchase of the leased spectrum is at our option and therefore the option price is not included in the commitments below.

Our spectrum lease and service credit commitments, including renewal periods, are approximately $ 330 million for the 12-month period ending June 30, 2023, $ 599 million in total for both of the 12-month periods ending June 30, 2024 and 2025, $ 615 million in total for both of the 12-month periods ending June 30, 2026 and 2027, and $ 4.7 billion in total thereafter.

Index for Notes to the Condensed Consolidated Financial Statements

Our spectrum lease and service credit commitments, including renewal periods, are approximately $ 312 million for the 12-month period ending September 30, 2023, $ 585 million in total for both of the 12-month periods ending September 30, 2024 and 2025, $ 616 million in total for both of the 12-month periods ending September 30, 2026 and 2027, and $ 4.6 billion in total thereafter.

In August 2022, we entered into an agreement for the purchase of certain spectrum licenses currently subject to lease agreements.

The agreement remains subject to regulatory approval and the purchase price of $ 3.5 billion is excluded from our reported purchase commitments above.

See Note 4 – Spectrum License Transactions for additional details.

Contingencies and Litigation

3 unchanged sentences

We have established an accrual with respect to certain of these matters, where appropriate.

The accruals are reflected in the condensed consolidated financial statements, but they are not considered to be, individually or in the aggregate, material.

The accruals are reflected on our condensed consolidated financial statements, but they are not considered to be, individually or in the aggregate, material.

An accrual is established when we believe it is both probable that a loss has been incurred and an amount can be reasonably estimated.

For other matters, where we have not determined that a loss is probable or because the amount of loss cannot be reasonably estimated, we have not recorded an accrual due to various factors typical in contested proceedings, including, but not limited to, uncertainty concerning legal theories and their resolution by courts or regulators, uncertain damage theories and demands, and a less than fully developed factual record.

For Litigation and Regulatory Matters that may result in a contingent gain, we recognize such gains in the condensed consolidated financial statements when the gain is realized or realizable.

For Litigation and Regulatory Matters that may result in a contingent gain, we recognize such gains on our condensed consolidated financial statements when the gain is realized or realizable.

We recognize legal costs expected to be incurred in connection with Litigation and Regulatory Matters as they are incurred.

4 unchanged sentences

In the first quarter of 2020, we recorded an accrual for an estimated payment amount.

We maintained the accrual as of June 30, 2022, and that accrual was included in Accounts payable and accrued liabilities on our Condensed Consolidated Balance Sheets.

We maintained the accrual as of September 30, 2022, and that accrual was included in Accounts payable and accrued liabilities on our Condensed Consolidated Balance Sheets.

On April 1, 2020, in connection with the closing of the Merger, we assumed the contingencies and litigation matters of Sprint.

Index for Notes to the Condensed Consolidated Financial Statements

Those matters include a wide variety of disputes, claims, government agency investigations and enforcement actions, and other proceedings.

8 unchanged sentences

Deutsche Telekom AG, et al.

2021-0479, against DT, SoftBank and certain of our current and former officers and directors, asserting breach of fiduciary duty claims relating to the repricing amendment to the Business Combination Agreement, and to SoftBank’s monetization of its T-Mobile shares.

2021-0479, against DT, SoftBank and certain of our current and former officers and directors, asserting breach of fiduciary duty claims relating to the repricing amendment to the Business

Index for Notes to the Condensed Consolidated Financial Statements

Combination Agreement, and to SoftBank’s monetization of its T-Mobile shares.

We are also named as a nominal defendant in the case.

1 unchanged sentence

We intend to vigorously defend this lawsuit.

In October 2020, we notified Mobile Virtual Network Operators (“MVNOs”) using the legacy Sprint CDMA network that we planned to sunset that network on December 31, 2021.

In response to that notice, DISH, which had Boost Mobile customers who used the legacy Sprint CDMA network, made several efforts to prevent us from sunsetting the CDMA network until mid-2023, including pursuing a Petition for Modification and related proceedings pursuant to the California Public Utilities Commission’s (the “CPUC”) April 2020 decision concerning the Merger.

As of June 30, 2022, the orderly decommissioning of the legacy Sprint CDMA network has been completed.

With the exception of the CPUC proceedings, all other proceedings described above have been successfully resolved.

In October 2020, we notified Mobile Virtual Network Operators (“MVNOs”) using the legacy Sprint CDMA network that we planned to retire that network on December 31, 2021.

In response to that notice, DISH, which had Boost Mobile customers who used the legacy Sprint CDMA network, made several efforts to prevent us from retiring the CDMA network until mid-2023, including pursuing a Petition for Modification and related proceedings pursuant to the California Public Utilities Commission’s (the “CPUC”) April 2020 decision concerning the Merger.

As of June 30, 2022, the orderly decommissioning of the legacy Sprint CDMA network had been completed, although certain of the CPUC proceedings remain in process.

On August 12, 2021, we became aware of a potential cybersecurity issue involving unauthorized access to T-Mobile’s systems (the “August 2021 cyberattack”).

19 unchanged sentences

If approved by the court, we anticipate that this settlement of the class action, along with other settlements of separate consumer claims that have been previously completed or are currently pending, will resolve substantially all of the claims brought to date by our current, former and prospective customers who were impacted by the 2021 cyberattack.

In connection with the proposed

Index for Notes to the Condensed Consolidated Financial Statements

class action settlement and the separate settlements, we recorded a total pre-tax charge of approximately $ 400 million for the three and six months ended June 30, 2022, in Selling, general and administrative expenses on our Condensed Consolidated Statements of Comprehensive (Loss) Income.

In connection with the proposed class action settlement and the separate settlements, we recorded a total pre-tax charge of approximately $ 400 million during the three months ended June 30, 2022.

The expense is included within Selling, general and administrative expenses on our Condensed Consolidated Statements of Comprehensive Income.

During the three and nine months ended September 30, 2022, we recognized $ 50 million in reimbursements from insurance carriers for costs incurred related to the August 2021 cyberattack, which is included as a reduction to Selling, general and administrative expenses on our Condensed Consolidated Statements of Comprehensive Income.

The ultimate resolution of the class action depends on whether we will be able to obtain court approval of the proposed settlement, the number of plaintiffs who opt-out of the proposed settlement and whether the proposed settlement will be appealed.

In addition, we have received inquiries from various government agencies, law enforcement and other governmental authorities related to the August 2021 cyberattack, which could result in substantial fines or penalties.

In addition, in September 2022, a purported Company shareholder filed a derivative action in the Delaware Chancery Court under the caption Harper v.

Sievert et al., Case No.

2022-0819-SG, against our current directors and certain of our former directors, alleging claims for breach of fiduciary duty relating to the Company’s cybersecurity practices.

We are also named as a nominal defendant in the lawsuit.

We are unable at this time to predict the potential outcome of this lawsuit or whether we may be subject to further private litigation.

We intend to vigorously defend this lawsuit.

We have also received inquiries from various government agencies, law enforcement and other governmental authorities related to the August 2021 cyberattack which could result in substantial fines or penalties.

We are responding to these inquiries and cooperating fully with these agencies and regulators.

However, we cannot predict the timing or outcome of any of these matters, or whether we may be subject to further regulatory inquiries, investigations, or enforcement actions.

Index for Notes to the Condensed Consolidated Financial Statements

In light of the inherent uncertainties involved in such matters and based on the information currently available to us, we believe it is reasonably possible that we could incur additional losses associated with these proceedings and inquiries, and we will continue to evaluate information as it becomes known and will record an estimate for losses at the time or times when it is both probable that a loss has been incurred and the amount of the loss is reasonably estimable.

1 unchanged sentence

In March 2022, we received $ 220 million in settlement of certain patent litigation.

We recognized the settlement, net of legal fees, as a reduction to Selling, general and administrative expenses on our Condensed Consolidated Statements of Comprehensive (Loss) Income during the six months ended June 30, 2022.

We recognized the settlement, net of legal fees, as a reduction to Selling, general and administrative expenses on our Condensed Consolidated Statements of Comprehensive Income during the nine months ended September 30, 2022.

On June 17, 2022, plaintiffs filed a putative antitrust class action complaint in the Northern District of Illinois, Dale et al.

8 unchanged sentences

The following table summarizes the expenses incurred in connection with our Merger restructuring initiatives:

(in millions) Three Months Ended June 30, 2022 Six Months Ended June 30, 2022 Incurred to Date

(in millions) Three Months Ended September 30, 2022 Nine Months Ended September 30, 2022 Incurred to Date

Contract termination costs $ — $ 56 $ 248

2 unchanged sentences

Total restructuring plan expenses $ 449 $ 862 $ 2,137

The expenses associated with our Merger restructuring initiatives are included in Costs of services and Selling, general and administrative on our Condensed Consolidated Statements of Comprehensive (Loss) Income.

Our Merger restructuring initiatives also include the acceleration or termination of certain of our operating and financing leases for cell sites, switch sites, retail stores, network equipment and office facilities.

Incremental expenses associated with accelerating amortization of the right-of-use assets on lease contracts were $ 747 million and $ 261 million for the three months ended June 30, 2022 and 2021, respectively, and $ 1.2 billion and $ 384 million for the six months ended June 30, 2022 and 2021, respectively, and are included in Costs of services and Selling, general and administrative on our Condensed Consolidated Statements of Comprehensive (Loss) Income.

Incremental expenses associated with accelerating amortization of the right-of-use assets on lease contracts were $ 384 million and $ 265 million for the three months ended September 30, 2022 and 2021, respectively, and $ 1.6 billion and $ 649 million for the nine months ended September 30, 2022 and 2021, respectively, and are included in Costs of services and Selling, general and administrative on our Condensed Consolidated Statements of Comprehensive Income.

Index for Notes to the Condensed Consolidated Financial Statements

The changes in the liabilities associated with our Merger restructuring initiatives, including expenses incurred and cash payments, are as follows:

(in millions) December 31,

2021 Expenses Incurred Cash Payments Adjustments for Non-Cash Items (1)

(in millions) December 31, 2021 Expenses Incurred Cash Payments Adjustments for Non-Cash Items (1)

September 30, 2022

Contract termination costs $ 14 $ 56 $ ( 14 ) $ — $ 56

4 unchanged sentences

The liabilities accrued in connection with our Merger restructuring initiatives are presented in Accounts payable and accrued liabilities on our Condensed Consolidated Balance Sheets.

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

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

We are evaluating additional restructuring initiatives, which are dependent on consultations and negotiation with certain counterparties and the expected impact on our business operations, which could affect the amount or timing of the restructuring costs and related payments.

1 unchanged sentence

Accounts Payable and Accrued Liabilities

Accounts payable and accrued liabilities are summarized as follows:

(in millions) June 30,

Accounts payable and accrued liabilities, excluding amounts classified as held for sale, are summarized as follows:

(in millions) September 30,

2022 December 31,

7 unchanged sentences

Accounts payable and accrued liabilities $ 11,971 $ 11,405

Book overdrafts included in accounts payable were $ 273 million and $ 378 million as of June 30, 2022, and December 31, 2021, respectively.

Book overdrafts included in accounts payable were $ 453 million and $ 378 million as of September 30, 2022, and December 31, 2021, respectively.

Index for Notes to the Condensed Consolidated Financial Statements

1 unchanged sentence

The following table summarizes T-Mobile’s supplemental cash flow information:

Three Months Ended June 30, Six Months Ended June 30,

Three Months Ended September 30, Nine Months Ended September 30,

(in millions) 2022 2021 2022 2021

10 unchanged sentences

Financing lease right-of-use assets obtained in exchange for lease obligations 348 623 1,197 1,109

Wireline Impairment

We provide wireline communication services to domestic and international customers via the legacy Sprint Wireline network acquired through the Merger.

Previously, the operation of the legacy Sprint CDMA and LTE wireless networks was supported by the legacy Sprint Wireline network.

During the second quarter of 2022, we retired the legacy Sprint CDMA network and began the orderly shut-down of the LTE network.

We assess long-lived assets for impairment when events or circumstances indicate that they might be impaired.

We determined that the retirement of the legacy Sprint CDMA and LTE wireless networks triggered the need to assess the Wireline long-lived assets for impairment, as these assets no longer support our wireless network and the associated customers and cash flows in a significant manner.

In evaluating whether the Wireline long-lived assets are impaired, we estimated the fair value of these assets using a combination of the cost, income and market approaches, including market participant assumptions.

The fair value measurement of the Wireline assets was estimated using significant inputs not observable in the market (Level 3).

The results of this assessment indicated that certain Wireline long-lived assets were impaired, and as a result, we recorded non-cash impairment expense of $ 477 million during the three and six months ended June 30, 2022, of which $ 258 million is related to Wireline Property and equipment, $ 212 million is related to Operating lease right-of-use assets and $ 7 million is related to Other intangible assets.

In measuring and allocating the impairment expense to individual Wireline long-lived assets, we did not impair the long-lived assets below their individual fair values.

After recording the impairment expense, the carrying amount of the Wireline long-lived assets recorded in our Condensed Consolidated Balance Sheet is $ 675 million as of June 30, 2022.

The expense is included within Impairment expense in our Condensed Consolidated Statements of Comprehensive (Loss) Income.

There was no impairment expense recognized for the three and six months ended June 30, 2021.

Cash and cash equivalents, including restricted cash and cash held for sale

Cash and cash equivalents, including restricted cash and cash held for sale, presented on our Condensed Consolidated Statements of Cash Flows were included on our Condensed Consolidated Balance Sheets as follows:

(in millions) September 30,

2022 December 31,

Cash and cash equivalents $ 6,888 $ 6,631

Cash and cash equivalents held for sale (included in Other current Assets) 28 —

Restricted cash (included in Other assets) 73 72

Cash and cash equivalents, including restricted cash and cash held for sale $ 6,989 $ 6,703

Note 17 – Subsequent Events

Subsequent to June 30, 2022, on July 22, 2022, we entered into an agreement to settle a consolidated class action lawsuit asserting claims related to the August 2021 cyberattack.

In connection with the proposed class action settlement and certain separate settlements, we recorded a total pre-tax charge of approximately $ 400 million for the three and six months ended June 30, 2022, in Selling, general and administrative expenses on our Condensed Consolidated Statements of Comprehensive (Loss) Income.

See N ote 11 – Commitments and Contingencies for additional information.

Subsequent to September 30, 2022, on October 12, 2022, we issued $ 750 million of 4.910 % Class A senior ABS Notes to third-party investors in a private placement transaction.

Our ABS Notes are secured by $ 1.0 billion of gross EIP receivables and future collections on such receivables.

See Note 6 – Debt for additional information.

Subsequent to September 30, 2022, on October 17, 2022, we entered into an Amended and Restated Credit Agreement.

See Note 6 – Debt for additional information.

See Note 9 – Repurchases of Common Stock for additional information regarding the 2022 Stock Repurchase Program.

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 1. Financial Statements