What changed in this filing

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Item 8. Financial Statements and Supplementary Data

2024-02-02 compared with 2023-02-14 · 439 added, 738 removed, 1433 unchanged (45% of the section changed)

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Opinions on the Financial Statements and Internal Control over Financial Reporting

We have audited the accompanying consolidated balance sheet of T-Mobile US, Inc.

and subsidiaries (the "Company") as of December 31, 2022, the related consolidated statements of comprehensive income, stockholders' equity, and cash flows, for the year ended December 31, 2022, and the related notes (collectively referred to as the "consolidated financial statements").

We have audited the accompanying consolidated balance sheets of T-Mobile US, Inc.

and subsidiaries (the “Company”) as of December 31, 2023 and 2022, the related consolidated statements of comprehensive income, stockholders' equity, and cash flows, for each of the two years in the period ended December 31, 2023, and the related notes (collectively referred to as the “consolidated financial statements”).

We also have audited the Company’s internal control over financial reporting as of December 31, 2023, based on criteria established in Internal Control — Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of the Company as of December 31, 2022, and the results of its operations and its cash flows for the year ended December 31, 2022, in conformity with accounting principles generally accepted in the United States of America.

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of the Company as of December 31, 2023 and 2022, and the results of its operations and its cash flows for each of the two years in the period ended December 31, 2023, in conformity with accounting principles generally accepted in the United States of America.

Also, in our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, 2023, based on criteria established in Internal Control — Integrated Framework (2013) issued by COSO.

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Critical Audit Matter

The critical audit matter communicated below is a matter arising from the current-period audit of the financial statements that was communicated or required to be communicated to the audit committee and that (1) relates to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments.

The critical audit matter communicated below is a matter arising from the current-period audit of the consolidated financial statements that was communicated or required to be communicated to the audit committee and that (1) relates to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments.

The communication of critical audit matters does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.

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The Company generates revenues from providing wireless communications services and selling devices and accessories to customers.

The processing and recording of wireless communications services revenues related to monthly wireless services billings is highly automated and is based on contractual terms with customers.

The processing and recording of service revenues related to monthly wireless services billings is highly automated and is based on contractual terms with customers.

Equipment revenues related to device and accessory sales are typically recognized at a point in time when control of the device or accessory is transferred to the customer or dealer.

The Company’s wireless service and equipment revenues consist of a significant volume of low-dollar transactions accumulated from multiple systems and databases.

Given the large volume of low-dollar wireless communications services and equipment revenue transactions which are initiated, accumulated, and recorded in multiple systems and databases, auditing revenues was complex and challenging due to the extent of audit effort required and the need for professionals with expertise in information technology (IT) to identify, evaluate, and test the Company’s systems, databases, automated controls, and system interface controls.

The Company’s service and equipment revenues consist of a significant volume of low-dollar transactions accumulated from multiple systems and databases.

Given the large volume of low-dollar service and equipment revenue transactions which are initiated, accumulated, and recorded in multiple systems and databases, auditing service and equipment revenues was complex and challenging due to the extent of audit effort required and the need for professionals with expertise in information technology (IT) to identify, evaluate, and test the Company’s systems, databases, automated controls, and system interface controls.

How the Critical Audit Matter Was Addressed in the Audit

Our audit procedures related to the Company’s revenue transactions included the following, among others:

Our audit procedures related to the Company’s service and equipment revenue transactions included the following, among others:

• With the assistance of our IT specialists, we:

• Identified the relevant systems and databases used to process revenue transactions and tested the relevant IT controls over each of those systems and databases.

• Performed testing of automated business controls and system interface controls within wireless communications services and equipment revenues.

◦ Identified the relevant systems and databases used to process service and equipment revenue transactions and tested the relevant IT controls over each of those systems and databases.

◦ Performed testing of automated business controls and system interface controls within service and equipment revenues.

• We tested internal controls in the revenue accounting processes, including those in place to (a) establish revenue recognition accounting policies for promotional offers, (b) record revenue and the related promotional offers in accordance with the established accounting policies and (c) reconcile the various systems to the Company’s general ledger.

• We created data visualizations to evaluate recorded revenue and trends in the related subscriber data.

• For a selection of equipment revenue transactions, we compared the amounts recognized to contractual agreements or other source documents and tested the mathematical accuracy of the recorded revenue.

• We created data visualizations to evaluate recorded service and equipment revenue and trends in the related subscriber data.

• For a selection of wholesale service revenue and equipment revenue transactions, we compared the amounts recognized to contractual agreements or other source documents and tested the mathematical accuracy of the recorded revenue.

• We developed an expectation of postpaid and prepaid service revenue amounts using historical service revenue and subscriber information and compared it to the recorded amount.

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Opinion on the Financial Statements

We have audited the accompanying consolidated balance sheet of T-Mobile US, Inc.

and its subsidiaries (the “Company”) as of December 31, 2021, and the related consolidated statements of comprehensive income, of stockholders’ equity and of cash flows for each of the two years in the period ended December 31, 2021, including the related notes (collectively referred to as the “consolidated financial statements”).

In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2021, and the results of its operations and its cash flows for each of the two years in the period ended December 31, 2021 in conformity with accounting principles generally accepted in the United States of America.

We have audited the consolidated statements of comprehensive income, of stockholders’ equity and of cash flows of T-Mobile US, Inc.

and its subsidiaries (the “Company”) for the year ended December 31, 2021, including the related notes (collectively referred to as the “consolidated financial statements”).

In our opinion, the consolidated financial statements present fairly, in all material respects, the results of operations and cash flows of the Company for the year ended December 31, 2021 in conformity with accounting principles generally accepted in the United States of America.

Basis for Opinion

These consolidated financial statements are the responsibility of the Company’s management.

Our responsibility is to express an opinion on the Company’s consolidated financial statements based on our audits.

Our responsibility is to express an opinion on the Company’s consolidated financial statements based on our audit.

We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S.

federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits of these consolidated financial statements in accordance with the standards of the PCAOB.

Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud.

Our audits included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks.

We conducted our audit of these consolidated financial statements in accordance with the standards of the PCAOB.

Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud.

Our audit included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks.

Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements.

Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements.

We believe that our audits provide a reasonable basis for our opinion.

Our audit also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements.

We believe that our audit provides a reasonable basis for our opinion.

/s/ PricewaterhouseCoopers LLP

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Short-term debt 3,619 5,164

Short-term debt to affiliates — 2,245

Deferred revenue 825 780

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Additional paid-in capital 67,705 73,941

Treasury stock, at cost, 22,916,449 and 1,537,468 shares issued

Treasury stock, at cost, 67,096,823 and 22,916,449 shares

( 9,373 ) ( 3,016 )

Accumulated other comprehensive loss ( 964 ) ( 1,046 )

Accumulated deficit ( 223 ) ( 2,812 )

Retained earnings (accumulated deficit) 7,347 ( 223 )

Total stockholders' equity 64,715 69,656

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Impairment expense — 477 —

Loss on disposal group held for sale 1,087 — —

(Gain) loss on disposal group held for sale ( 25 ) 1,087 —

Depreciation and amortization 12,818 13,651 16,383

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Interest expense, net ( 3,335 ) ( 3,364 ) ( 3,342 )

Other expense, net ( 33 ) ( 199 ) ( 405 )

Other income (expense), net 68 ( 33 ) ( 199 )

Total other expense, net ( 3,267 ) ( 3,397 ) ( 3,541 )

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Income tax expense ( 2,682 ) ( 556 ) ( 327 )

Income from continuing operations 2,590 3,024 2,744

Income from discontinued operations, net of tax — — 320

Net income $ 8,317 $ 2,590 $ 3,024

Other comprehensive income (loss), net of tax

Reclassification of loss (unrealized loss) from cash flow hedges, net of tax effect of $ 52 , $ 49 and $( 250 )

Other comprehensive income, net of tax

Reclassification of loss from cash flow hedges, net of tax effect of $ 56 , $ 52 and $ 49

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

9 ( 9 ) ( 4 )

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

Actuarial (loss) gain, net of amortization, on pension and other postretirement benefits, net of tax effect of $( 31 ), $ 61 and $ 28

( 90 ) 177 80

Net unrecognized gain on pension and other postretirement benefits, net of tax effect of $ 61 , $ 28 and $ 2

Other comprehensive income (loss) 319 216 ( 713 )

Other comprehensive income 82 319 216

Total comprehensive income $ 8,399 $ 2,909 $ 3,240

Earnings per share

Basic earnings per share:

Continuing operations $ 2.07 $ 2.42 $ 2.40

Discontinued operations — — 0.28

Basic $ 7.02 $ 2.07 $ 2.42

Diluted earnings per share:

Continuing operations $ 2.06 $ 2.41 $ 2.37

Discontinued operations — — 0.28

Diluted $ 6.93 $ 2.06 $ 2.41

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Equipment installment plan receivables 170 ( 1,184 ) ( 3,141 )

Inventories 744 201 ( 2,222 )

Inventory 197 744 201

Operating lease right-of-use assets 3,721 5,227 4,964

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Proceeds related to beneficial interests in securitization transactions 4,816 4,836 4,131

Net cash related to derivative contracts under collateral exchange arrangements — — 632

Acquisition of companies, net of cash and restricted cash acquired — ( 52 ) ( 1,916 )

Proceeds from the divestiture of prepaid business — — 1,224

Other, net 154 149 51

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Proceeds from issuance of long-term debt 8,446 3,714 14,727

Payments of consent fees related to long-term debt — — ( 109 )

Repayments of financing lease obligations ( 1,227 ) ( 1,239 ) ( 1,111 )

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Repayments of long-term debt ( 5,051 ) ( 5,556 ) ( 11,100 )

Issuance of common stock — — 19,840

Repurchases of common stock ( 13,074 ) ( 3,000 ) —

Proceeds from issuance of short-term debt — — 18,743

Repayments of short-term debt — — ( 18,929 )

Dividends on common stock ( 747 ) — —

Tax withholdings on share-based awards ( 297 ) ( 243 ) ( 316 )

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Consolidated Statement of Stockholders’ Equity

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

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

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

Net income — — — — — 3,024 3,024

Other comprehensive loss — — — — ( 713 ) — ( 713 )

Other comprehensive income — — — — 216 — 216

Stock-based compensation — — — 606 — — 606

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Shares withheld related to net share settlement of stock awards and stock options ( 2,511,512 ) — — ( 316 ) — — ( 316 )

Shares issued in secondary offering (1)

198,314,426 ( 198,314,426 ) — 19,766 — — 19,766

Shares repurchased from SoftBank (2)

( 198,314,426 ) 198,314,426 — ( 19,536 ) — — ( 19,536 )

Merger consideration 373,396,310 — — 33,533 — — 33,533

Prior year Retained Earnings (3)

— — — — — ( 67 ) ( 67 )

Other, net 220,906 ( 2,410 ) ( 2 ) 5 — — 3

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Shares withheld related to net share settlement of stock awards and stock options ( 1,900,710 ) — — ( 243 ) — — ( 243 )

Repurchases of common stock ( 21,361,409 ) 21,361,409 ( 3,000 ) — — — ( 3,000 )

Other, net 132,539 17,572 ( 3 ) 9 — ( 1 ) 5

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Net income — — — — — 8,317 8,317

Dividends declared ($ 0.65 per share)

— — — — — ( 747 ) ( 747 )

Other comprehensive income — — — — 82 — 82

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Repurchases of common stock ( 92,925,044 ) 92,925,044 ( 13,255 ) — — — ( 13,255 )

SoftBank contingent shares settlement (1)

48,751,557 ( 48,751,557 ) 6,901 ( 6,849 ) — — 52

Other, net 202,500 6,887 ( 3 ) 13 — — 10

Balance as of December 31, 2023 1,195,807,331 67,096,823 $ ( 9,373 ) $ 67,705 $ ( 964 ) $ 7,347 $ 64,715

(1) Shares issued includes 5.0 million shares purchased by Marcelo Claure.

(2) In connection with the SoftBank Monetization (as defined below), we received a payment of $ 304 million from SoftBank (as defined below).

This amount, net of tax, was treated as a reduction of the purchase price of the shares acquired from SoftBank and was recorded as Additional Paid-in Capital.

(3) Prior year Retained Earnings represents the impact of the adoption of new accounting standards on beginning Accumulated Deficit and Accumulated Other Comprehensive Loss.

(1) Represents the issuance of the SoftBank Specified Shares pursuant to the Letter Agreement.

See Note 15 – Earnings Per Share of the Notes to the Consolidated Financial Statements for more information.

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

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Property and Equipment

Goodwill, Spectrum License Transaction s and Other Intangibles Assets

Goodwill, Spectrum License Transactions and Other Intangibles Assets

Fair Value Measurements

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Employee Compensation and Benefit Plans

Discontinued Operations

SoftBank Equity Transaction

Repurchases of Common Stock

Stockholder Return Programs

Earnings Per Share

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We provide mobile communications services primarily using our 4G Long Term Evolution (“LTE”) network and our 5G technology network.

We also offer a wide selection of wireless devices, including handsets, tablets and other mobile communication devices, and accessories for sale, as well as financing through equipment installment plans (“EIP”) and leasing through JUMP!

We also provide reinsurance for device insurance policies and extended warranty contracts offered to our mobile communications customers.

In addition to our wireless communications services, we offer fast and reliable High Speed Internet utilizing our nationwide 5G network.

In addition to our wireless communications services, we offer High Speed Internet utilizing our nationwide 5G network.

Basis of Presentation

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

We consolidate majority-owned subsidiaries over which we exercise control, as well as variable interest entities (“VIEs”) where we are deemed to be the primary beneficiary and VIEs, which cannot be deconsolidated, such as those related to Tower obligations.

We consolidate majority-owned subsidiaries over which we exercise control, as well as variable interest entities (“VIEs”) for which we are deemed to be the primary beneficiary and VIEs, which cannot be deconsolidated, such as those related to Tower obligations.

Intercompany transactions and balances have been eliminated in consolidation.

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generally accepted accounting principles (“GAAP”) requires our management to make estimates and assumptions which affect our consolidated financial statements and accompanying notes.

Estimates are based on historical experience, where applicable, and other assumptions which our management believes are reasonable under the circumstances, including, but not limited to, the valuation of assets acquired and liabilities assumed through our merger (the “Merger”) with Sprint Corporation (“Sprint”) and through our acquisitions of affiliates and the potential impacts arising from macroeconomic trends.

Estimates are based on historical experience, where applicable, and other assumptions which our management believes are reasonable under the circumstances, including, but not limited to, the valuation of assets acquired and liabilities assumed through acquisitions and the potential impacts arising from macroeconomic trends.

These estimates are inherently subject to judgment and actual results could differ from those estimates.

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 “Wireline Sale Agreement”), pursuant to which the Buyer will acquire the U.S.

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 (“Sprint”), 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 “Wireline Sale Agreement”), pursuant to which the Buyer agreed to 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”).

Such transactions contemplated by the Wireline Sale Agreement are collectively referred to as the “Wireline Transaction.”

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 Consolidated Balance Sheets as of December 31, 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 Consolidated Statements of Comprehensive Income.

Unless otherwise specified, the amounts and information presented in the Notes to the Consolidated Financial Statements include assets and liabilities that have been reclassified as held for sale as of December 31, 2022.

Business Combinations

Assets acquired and liabilities assumed as part of a business combination are generally recorded at their fair value at the date of acquisition.

The excess of purchase price over the fair value of assets acquired and liabilities assumed is recorded as goodwill.

Determining fair value of identifiable assets, particularly intangibles, and liabilities acquired requires management to make estimates, which are based on all available information and in some cases assumptions with respect to the timing and amount of future revenues and expenses associated with an asset or liability.

See Note 2 – Business Combinations for further discussion of the Merger between T-Mobile and Sprint and the acquisition of the wireless telecommunications assets (the “Wireless Assets”) of Shenandoah Personal Communications Company LLC (“Shentel”) used to provide Sprint PCS’s wireless mobility

Index for Notes to the Consolidated Financial Statements

communications network products in certain parts of Maryland, North Carolina, Virginia, West Virginia Kentucky, Ohio and Pennsylvania.

Such transactions contemplated by the Wireline Sale Agreement are collectively referred to as the “Wireline Transaction.” On May 1, 2023, the Buyer and the Company completed the Wireline Transaction (the “Closing”).

The assets and liabilities of the Wireline Business disposal group were classified as held for sale and presented within Other current assets and Other current liabilities on our Consolidated Balance Sheets as of December 31, 2022.

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

Unless otherwise specified, the amounts and information presented as of December 31, 2022 in the Notes to the Consolidated Financial Statements include assets and liabilities that were classified as held for sale.

Cash and Cash Equivalents

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Treasury securities with remaining maturities of three months or less at the date of purchase.

Index for Notes to the Consolidated Financial Statements

Receivables and Related Allowance for Credit Losses

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We have an arrangement to sell certain of our customer service accounts receivable on a revolving basis, which are treated as sales of financial assets.

See Note 4 – Sales of Certain Receivables for further information.

Equipment Installment Plan Receivables

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This adjustment results in a discount or reduction in the transaction price of the contract with a customer, which is allocated to the performance obligations of the arrangement such as Service and Equipment revenues on our Consolidated Statements of Comprehensive Income.

The imputed discount rate reflects a current market interest rate and is predominately comprised of the estimated credit risk underlying the EIP receivable, reflecting the estimated credit worthiness of the customer.

The imputed discount rate reflects a current market interest rate and includes a component for estimated credit risk underlying the EIP receivable, reflecting the estimated credit worthiness of the customer.

The imputed discount on receivables is amortized over the financed installment term using the effective interest method and recognized as Other revenues on our Consolidated Statements of Comprehensive Income.

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differ from those currently anticipated, we will adjust our allowance for credit losses accordingly.

Index for Notes to the Consolidated Financial Statements

Inventories consist primarily of wireless devices and accessories, which are valued at the lower of cost or net realizable value.

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Shipping and handling costs paid to wireless device and accessories vendors as well as costs to refurbish used devices are included in the standard cost of inventory.

Net realizable value is the estimated selling price in the ordinary course of business, less reasonably predictable costs of disposal and transportation.

Net realizable value is the estimated selling price in the ordinary course of business, less reasonably predictable costs of disposal and

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transportation.

We record inventory write-downs to net realizable value for obsolete and slow-moving items based on inventory turnover trends and historical experience.

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Long-lived assets include assets that do not have indefinite lives, such as property and equipment and certain intangible assets.

Substantially all of our long-lived assets are located in the U.S., including Puerto Rico and the U.S.

Virgin Islands.

We assess potential impairments to our long-lived assets when events or changes in circumstances indicate the carrying amount of the asset may not be recoverable.

If any indicators of impairment are present, we test recoverability.

The carrying value of a long-lived asset or asset group is not recoverable if the carrying value exceeds the sum of the estimated undiscounted future cash flows expected to be generated from the use and eventual disposition of the asset or asset group.

If the estimated undiscounted future cash flows do not exceed the asset or asset group’s carrying amount, then an impairment loss is recorded, measured as the amount by which the carrying amount of a long-lived asset or asset group exceeds its estimated fair value.

During the second quarter of 2022, we determined that the retirement of the legacy Sprint CDMA and LTE wireless networks triggered the need to separately assess the Wireline long-lived asset group for impairment and the results of this assessment indicated that certain Wireline long-lived assets were impaired.

See Note 16 - Wireline for further information.

Property and Equipment

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We capitalize interest associated with the acquisition or construction of certain property and equipment.

Capitalized interest is reported as a reduction in interest expense and depreciated over the useful life of the related assets.

We record an asset retirement obligation for the estimated fair value of legal obligations associated with the retirement of tangible long-lived assets and a corresponding increase in the carrying amount of the related asset in the period in which the

Index for Notes to the Consolidated Financial Statements

obligation is incurred.

Capitalized interest is reported as a reduction in interest expense and depreciated over the useful life of the related asset.

In periods subsequent to initial measurement, we recognize changes in the liability resulting from the passage of time and revisions to either the timing or the amount of the original estimate.

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Device Leases

Through the Merger, we acquired device lease contracts in which Sprint is the lessor (the “Sprint Flex Lease Program”), substantially all of which are classified as operating leases, as well as the associated fixed assets (i.e., the leased devices).

These leased devices were recorded as fixed assets at their acquisition date fair value and presented within Property and equipment, net on our Consolidated Balance Sheets.

Beginning in 2021, we discontinued offering the Sprint Flex lease program and are shifting customer device financing to EIP plans.

Our leasing programs (“Leasing Programs”), which include JUMP!

On Demand and the Sprint Flex Lease Program, allow customers to lease a device (handset or tablet) generally over an initial period of 18 months and upgrade the device with a new device when eligibility requirements are met.

We depreciate leased devices to their estimated residual value, on a group basis, using the straight-line method over the estimated useful life of the device.

We depreciate leased devices to their estimated residual value, on a group basis,

Index for Notes to the Consolidated Financial Statements

using the straight-line method over the estimated useful life of the device.

The estimated useful life reflects the period for which we estimate the group of leased devices will provide utility to us, which may be longer than the initial lease term based on customer options in the Sprint Flex Lease Program to renew the lease on a month-to-month basis after the initial lease term concludes.

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Lost and stolen devices are incorporated into the estimates of depreciation expense and recognized as an adjustment to accumulated depreciation when the loss event occurs.

Our policy of using the group method of depreciation has been applied to acquired leased devices as well as leases originated subsequent to the Merger.

Acquired leased devices are grouped based on the age of the device.

Revenues associated with the leased devices, net of lease incentives, are generally recognized on a straight-line basis over the lease term.

In 2021, we discontinued offering the Sprint Flex Lease Program and shifted customer device financing to EIP plans.

For arrangements in which we are the lessor of devices, we separate lease and non-lease components.

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Intangible assets that do not have indefinite useful lives are amortized over their estimated useful lives.

Through the Merger, we acquired lease agreements (the “Agreements”) with various educational and non-profit institutions that provide us with the right to use Federal Communications Commission (“FCC”) spectrum licenses (Educational Broadband Services or “EBS spectrum”) in the 2.5 GHz band.

In addition to the Agreements with educational institutions and private owners who hold the licenses, we also acquired direct ownership of spectrum licenses previously acquired by Sprint through government auctions or other acquisitions.

The Agreements with educational and certain non-profit institutions are typically for terms of five to 10 years with automatic renewal provisions, bringing the total term of the Agreements up to 30 years.

We have lease agreements (the “Agreements”) with various educational and non-profit institutions that provide us with the right to use Federal Communications Commission (“FCC”) spectrum licenses (known as “Educational Broadband Services” or “EBS” spectrum) in the 2.5 GHz band.

The Agreements are typically for terms of five to 10 years with automatic renewal provisions, bringing the total term of the Agreements up to 30 years.

A majority of the Agreements include a right of first refusal to acquire, lease or otherwise use the license at the end of the automatic renewal periods.

Index for Notes to the Consolidated Financial Statements

Leased FCC spectrum licenses are recorded as executory contracts whereby, as a result of business combination accounting, an intangible asset or liability is recorded reflecting the extent to which contractual terms are favorable or unfavorable to current market rates.

These intangible assets or liabilities are amortized over the estimated remaining useful life of the lease agreements.

Contractual lease payments are recognized on a straight-line basis over the remaining term of the arrangement, including renewals, and are presented in Costs of services on our Consolidated Statements of Comprehensive Income.

Customer lists and the Sprint trade name are amortized using the sum-of-the-years digits method over the period in which the asset is expected to contribute to future cash flows.

Reacquired rights are amortized on a straight-line basis over the remaining term of the Management Agreement (as defined in Note 2 – Business Combinations ), which represents the period of expected economic benefit.

Leased FCC spectrum licenses are recorded as executory contracts, and contractual lease payments are recognized on a straight-line basis over the remaining term of the arrangement, including renewals, and are presented in Costs of services on our Consolidated Statements of Comprehensive Income.

Customer relationships are amortized using the sum-of-the-years digits method.

The remaining finite-lived intangible assets are amortized using the straight-line method.

We assess potential impairments to our long-lived assets when events or changes in circumstances indicate the carrying amount of the asset may not be recoverable.

If any indicators of impairment are present, we test recoverability.

Business Combinations

Assets acquired and liabilities assumed as part of a business combination are generally recorded at their fair value at the date of acquisition.

The excess of purchase price over the fair value of assets acquired and liabilities assumed is recorded as goodwill.

See Note 2 – Business Combinations for further discussion of the acquisition of the wireless telecommunications assets (the “Wireless Assets”) of Shenandoah Personal Communications Company LLC (“Shentel”) 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.

Index for Notes to the Consolidated Financial Statements

Goodwill and Indefinite-Lived Intangible Assets

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At times, we enter into agreements to sell or exchange spectrum licenses.

Upon entering into the arrangement, if the transaction has been deemed to have commercial substance, spectrum licenses are reviewed for impairment.

The licenses are transferred at their carrying value, as adjusted for any impairment recognized, to assets held for sale, which is included in Other current assets on our Consolidated Balance Sheets until approval and completion of the exchange or sale.

Upon closing of the transaction, spectrum licenses acquired as part of an exchange of nonmonetary assets are recorded at fair value and the difference between the fair value of the spectrum licenses obtained, carrying value of the spectrum licenses transferred and cash paid, if any, is recognized as a gain or loss on disposal of spectrum licenses included in Selling, general and administrative expenses on our Consolidated Statements of Comprehensive Income.

Upon entering into the arrangement, if the transaction has been deemed to have commercial substance and the spectrum licenses meet the held for sale criteria, the licenses are classified as held for sale at their carrying value, as adjusted for any impairment recognized, included in Other current assets on our Consolidated Balance Sheets until approval and completion of the exchange or sale.

Upon closing of the transaction, spectrum licenses acquired as part of an exchange of nonmonetary assets are recorded at fair value and the difference between the fair value of the spectrum licenses obtained, carrying value of the spectrum licenses transferred and cash paid, if any, is recognized as a gain or loss on disposal of spectrum licenses included in Selling, general and administrative expense on our Consolidated Statements of Comprehensive Income.

Our fair value estimates of spectrum licenses are based on information for which there is little or no observable market data.

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This enhanced value from combining owned and leased spectrum licenses is referred to as an aggregation premium.

The aggregation premium is a component of the overall fair value of our owned FCC spectrum licenses, which are recorded as indefinite-lived intangible assets.

The aggregation premium is a component of the overall fair value of our owned FCC spectrum licenses.

We assess the carrying value of our goodwill and other indefinite-lived intangible assets, such as our spectrum license portfolio, for potential impairment annually as of December 31 or more frequently, if events or changes in circumstances indicate such assets might be impaired.

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If the fair value exceeds the book value, then no impairment is measured.

As of December 31, 2022, we have identified one reporting

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unit for which discrete financial information is available and results are regularly reviewed by management:

As of December 31, 2023, we have identified one reporting unit:

The wireless reporting unit consists of all the assets and liabilities of T-Mobile US, Inc.

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The fair value of the wireless reporting unit is determined using a market approach, which is based on market capitalization.

We recognize market capitalization is subject to volatility and will monitor changes in market capitalization to determine whether declines, if any, necessitate an interim impairment review.

In the event market capitalization does decline below its book value, we will consider the length, severity and reasons for the decline when assessing whether potential impairment exists, including considering whether a control premium should be added to the market capitalization.

We recognize that market capitalization is subject to volatility and will monitor changes in market capitalization to determine whether declines, if any, necessitate an interim impairment review.

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to the market capitalization.

We believe short-term fluctuations in share price may not necessarily reflect the underlying aggregate fair value.

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If actual results or future expectations are not consistent with the assumptions used in our estimate of fair value, it may result in the recording of significant impairment charges on goodwill or spectrum licenses.

The most significant assumptions within the valuation models are the discount rate, revenues, EBITDA margins, capital expenditures and long-term growth rate.

For more information regarding our impairment assessments, see Note 1 – Summary of Significant Accounting Policies and Note 6 – Goodwill, Spectrum License Transactions and Other Intangible Assets of the Notes to the Consolidated Financial Statements.

The most significant assumptions within the valuation models are the discount rate based on the weighted-average cost of capital, revenues, EBITDA margins, capital expenditures and long-term growth rate.

For more information regarding our impairment assessments of indefinite-lived intangible assets, see Note 6 – Goodwill, Spectrum License Transactions and Other Intangible Assets .

Fair Value Measurements

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Level 3 Unobservable inputs for which there is little or no market data, which require us to develop assumptions of what market participants would use in pricing the asset or liability.

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Assets and liabilities are classified in their entirety based on the lowest level of input that is significant to the fair value measurement.

Our assessment of the significance of a particular input to the fair value measurement requires judgment and may affect the placement of assets and liabilities being measured within the fair value hierarchy.

The carrying values of Cash and cash equivalents, Accounts receivable, Accounts receivable from affiliates and Accounts payable and accrued liabilities approximate fair value due to the short-term maturities of these instruments.

The carrying values of Cash and cash equivalents, Accounts receivable and Accounts payable and accrued liabilities approximate fair value due to the short-term maturities of these instruments.

The carrying values of EIP receivables approximate fair value as the receivables are recorded at their present value using an imputed interest rate.

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See Note 7 – Fair Value Measurements for a comparison of the carrying values and fair values of our short-term and long-term debt.

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Derivative Financial Instruments

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Consideration payable to a customer is treated as a reduction of the total transaction price, unless the payment is in exchange for a distinct good or service, such as certain commissions paid to dealers, in which case the payment is treated as a purchase of that distinct good or service.

Federal Universal Service Fund (“USF”) and state USF are assessed by various governmental authorities in connection with the services we provide to our customers and are included in Cost of services.

Federal Universal Service Fund (“USF”) and state USF fees are assessed by various governmental authorities in connection with the services we provide to our customers and are included in Cost of services.

When we separately bill and collect these regulatory fees from customers, they are recorded gross in Total service revenues on our Consolidated Statements of Comprehensive Income.

For the years ended December 31, 2023, 2022 and 2021, we recorded approximately $ 317 million, $ 185 million and $ 216 million, respectively, of USF fees on a gross basis.

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We have made an accounting policy election to exclude from the measurement of the transaction price all taxes assessed by a governmental authority that are both imposed on and concurrent with a specific revenue-producing transaction and collected by us from a customer (e.g., sales, use, value added, and some excise taxes).

Wireline Revenue

Performance obligations related to our Wireline customers include the provision of domestic and international data communications services.

Wireline revenues are included in Other service revenues on our Consolidated Statements of Comprehensive Income.

Equipment Revenues

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We estimate variable consideration (e.g., device returns or certain payments to indirect dealers) primarily based on historical experience.

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Equipment sales not probable of collection are generally recorded as payments are received.

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Generally, our devices and service plans are available at standard prices, which are maintained on price lists and published on our website and/or within our retail stores.

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For contracts that involve more than one product or service that are identified as separate performance obligations, the transaction price is allocated to the performance obligations based on their relative standalone selling prices.

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Our service contracts allow customers to frequently modify their contracts without incurring penalties, in many cases.

Each time a contract is modified, we evaluate the change in scope or price of the contract to determine if the modification should be treated as a separate contract, as if there is a termination of the existing contract and creation of a new contract, or if the modification should be considered a change associated with the existing contract.

For contract modifications, we evaluate the change in scope or price of the contract to determine if the modification should be

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treated as a separate contract, as if there is a termination of the existing contract and creation of a new contract, or if the modification should be considered a change associated with the existing contract.

We typically do not have significant impacts from contract modifications.

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Commissions paid upon device upgrade are not capitalized if the remaining customer contract is less than one year.

Commissions paid when the customer has a lease are treated as initial direct costs and recognized over the lease term.

Incremental costs to obtain equipment contracts (e.g., commissions paid on device and accessory sales) are recognized when the equipment is transferred to the customer.

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Cell Site, Retail Store and Office Facility Leases

We are a lessee for non-cancelable operating and financing leases for cell sites, switch sites, retail stores, network equipment, office facilities and dark fiber.

We are a lessee for non-cancelable operating and financing leases for cell sites, switch sites, retail stores, network equipment and office facilities.

We recognize a right-of-use asset and lease liability for operating leases based on the net present value of future minimum lease payments.

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Expense for our financing leases is comprised of the amortization expense associated with the right-of-use asset and interest expense recognized based on the effective interest method.

We include options to extend or terminate a lease when we are reasonably certain that we will exercise that option.

We consider several factors in assessing whether renewal periods are reasonably certain of being exercised, including the continued maturation of our nationwide network, technological advances within the telecommunications industry and the availability of alternative sites.

We have concluded we are not reasonably certain to exercise the options to extend or terminate our leases.

We have generally concluded we are not reasonably certain to exercise the options to extend or terminate our leases.

Therefore, as of the lease commencement date, our lease terms generally do not include these options.

We include options to extend or terminate a lease when we are reasonably certain that we will exercise that option.

Index for Notes to the Consolidated Financial Statements

In determining the discount rate used to measure the right-of-use asset and lease liability, we use rates implicit in the lease, or if not readily available, we use our incremental borrowing rate.

Our incremental borrowing rate is based on an estimated secured rate comprised of a risk-free rate plus a credit spread as secured by our assets.

Determining a credit spread as secured by our assets may require significant judgment.

Determining a credit spread as secured by our assets may require judgment.

Certain of our lease agreements include rental payments based on changes in the consumer price index (“CPI”).

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Our lease agreements do not contain any material residual value guarantees or material restrictive covenants.

Generally, we elected the practical expedient to not separate lease and non-lease components in arrangements where we are the lessee.

Generally, we elected the practical expedient to not separate lease and non-lease components in arrangements.

For arrangements in which we are the lessor of wireless handset devices, we did not elect this practical expedient.

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See Note 16 – Leases for further information.

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Cell Tower Monetization Transactions

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Sprint Retirement Pension Plan

Through the Merger, we acquired the assets and assumed the liabilities associated with the Sprint Retirement Pension Plan (the “Pension Plan”), which is a defined benefit pension plan providing post-retirement benefits to certain employees.

We provide the Sprint Retirement Pension Plan (the “Pension Plan”), which is a defined benefit pension plan providing post-retirement benefits to certain employees.

As of December 31, 2005, the Pension Plan was amended to freeze benefit plan accruals for participants.

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We expense the cost of advertising and other promotional expenditures to market our services and products as incurred.

For the years ended December 31, 2022, 2021 and 2020, advertising expenses included in Selling, general and administrative expenses on our Consolidated Statements of Comprehensive Income were $ 2.3 billion, $ 2.2 billion and $ 1.8 billion, respectively.

For the years ended December 31, 2023, 2022 and 2021, advertising expenses included in Selling, general and administrative expense on our Consolidated Statements of Comprehensive Income were $ 2.5 billion, $ 2.3 billion and $ 2.2 billion, respectively.

Deferred tax assets and liabilities are recognized based on temporary differences between the consolidated financial statements and tax bases of assets and liabilities using enacted tax rates expected to be in effect when these differences are realized.

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The ultimate realization of a deferred tax asset depends on the ability to generate sufficient taxable income of the appropriate character and in the appropriate taxing jurisdictions within the carryforward periods available.

We account for uncertainty in income taxes recognized on our consolidated financial statements in accordance with the accounting guidance for the financial statement recognition and measurement of a tax position taken or expected to be taken in

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a tax return.

We assess whether it is more likely than not that a tax position will be sustained upon examination based on the technical merits of the position and adjust the unrecognized tax benefits in light of changes in facts and circumstances, such as changes in tax law, interactions with taxing authorities and developments in case law.

Other Comprehensive Income (Loss)

Other comprehensive income (loss) consists of adjustments, net of tax, related to reclassification of loss from cash flow hedges, foreign currency translation and pension and other postretirement benefits.

Other Comprehensive Income

Other comprehensive income primarily consists of adjustments, net of tax, related to reclassification of loss from cash flow hedges and pension and other postretirement benefits.

This is reported in Accumulated other comprehensive loss as a separate component of stockholders’ equity until realized in earnings.

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Stock-based compensation expense for stock awards, which include restricted stock units (“RSUs”) and performance-based restricted stock units (“PRSUs”), is measured at fair value on the grant date and recognized as expense, net of expected forfeitures, over the related service period.

The fair value of stock awards is based on the closing price of our common stock on the date of grant.

The fair value of stock awards is based on the closing price of our common stock on the date of grant, adjusted for expected dividend yield.

RSUs are recognized as expense using the straight-line method.

PRSUs are recognized as expense following a graded vesting schedule with their performance re-assessed and updated on a quarterly basis, or more frequently as changes in facts and circumstances warrant.

Share Repurchases

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”).

PRSUs are recognized as expense following a graded vesting schedule with their performance reassessed and updated on a quarterly basis, or more frequently as changes in facts and circumstances warrant.

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Stockholder Return Programs

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”), which was utilized as of September 30, 2023.

On September 6, 2023, our Board of Directors authorized a stockholder return program of up to $ 19.0 billion that will run through December 31, 2024 (the “2023-2024 Stockholder Return Program”).

The 2023-2024 Stockholder Return Program consists of additional repurchases of shares of our common stock and the payment of cash dividends.

The amount available under the 2023-2024 Stockholder Return Program for share repurchases will be reduced by the amount of any cash dividends declared by us.

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

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

See Note 15 - Repurchases of Common Stock for more information about our 2022 Stock Repurchase Program.

Dividends declared are included as a reduction to Retained earnings on our Consolidated Balance Sheets.

We recognize a liability for dividends declared but for which cash has not been paid in Other current liabilities on our Consolidated Balance Sheets.

Dividend cash payments to stockholders are included in Net cash provided by (used in) financing activities on our Consolidated Statements of Cash Flows.

See Note 13 - Stockholder Return Programs for more information about our 2022 Stock Repurchase Program and 2023-2024 Stockholder Return Program.

Earnings Per Share

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The primary beneficiary is the party which has both the power to direct the activities of an entity that most significantly impact the VIE's economic performance, and through its interests in the VIE, the obligation to absorb losses or the right to receive benefits from the VIE which could potentially be significant to the VIE.

We consolidate VIEs when we are deemed to be the primary beneficiary or when the VIE cannot be deconsolidated.

See Note 4 – Sales of Certain Receivables , Note 8 – Debt and Note 9 – Tower Obligations for further information.

In assessing which party is the primary beneficiary, all the facts and circumstances are considered, including each party’s role in establishing the VIE and its ongoing rights and responsibilities.

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and second, identifying which party, if any, has power over those activities.

In general, the parties that make the most significant decisions affecting the VIE (such as asset managers and

In general, the parties that make the most significant decisions affecting the VIE (such as asset managers and servicers) or have the right to unilaterally remove those decision-makers are deemed to have the power to direct the activities of a VIE.

We consolidate VIEs when we are deemed to be the primary beneficiary or when the VIE cannot be deconsolidated.

See Note 4 – Sales of Certain Receivables , Note 8 – Debt and Note 9 – Tower Obligations for further information.

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servicers) or have the right to unilaterally remove those decision-makers are deemed to have the power to direct the activities of a VIE.

Device Purchases Cash Flow Presentation

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Accounting Pronouncements Adopted During the Current Year

Reference Rate Reform

In March 2020, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2020-04, “Reference Rate Reform (Topic 848):

Facilitation of the Effects of Reference Rate Reform on Financial Reporting,” and has since modified the standard with ASU 2021-01, “Reference Rate Reform (Topic 848):

Scope” and ASU 2022-06, “Reference Rate Reform (Topic 848):

Deferral of the Sunset Date of Topic 848” (together, the “reference rate reform standard”).

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

The reference rate reform standard is available for adoption through December 31, 2024, 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 consolidated financial statements for the year ended December 31, 2022, and the impact of applying the election to future eligible contract modifications that occur through December 31, 2024, is also not expected to be material.

Contract Assets and Contract Liabilities Acquired in a Business Combination

In October 2021, the FASB issued ASU 2021-08, “Business Combinations (Topic 805):

Accounting for Contract Assets and Contract Liabilities from Contracts with Customers.” The standard amends ASC 805 such that contract assets and contract liabilities acquired in a business combination are added to the list of exceptions to the recognition and measurement principles such that they are recognized and measured in accordance with ASC 606.

As of January 1, 2022, we have elected to adopt this standard, and it will be applied prospectively to all business combinations occurring after this date.

Accounting Pronouncements Not Yet Adopted

Troubled Debt Restructurings and Vintage Disclosures

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

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

Troubled Debt Restructurings and Vintage Disclosures.” The standard eliminates the accounting guidance within ASC 310-40 for troubled debt restructurings by creditors while enhancing disclosure requirements for certain loan refinancings and restructurings by creditors when a borrower is experiencing financial difficulty.

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

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

Early adoption is permitted for us at any time.

We plan to adopt the standard when it becomes effective for us beginning January 1, 2023.

We expect the adoption of the standard to impact our disclosure of current period write-offs for certain receivables, but do not expect other updates in the standard to have a material impact on our consolidated financial statements.

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As of January 1, 2023, we have adopted this standard, and it was applied prospectively after this date.

This standard did not have a material impact on our consolidated financial statements as of and for the year ended December 31, 2023.

Accounting Pronouncements Not Yet Adopted

Segment Reporting Disclosures

In November 2023, the FASB issued ASU 2023-07, “Segment Reporting (Topic 280):

Improvements to Reportable Segment Disclosures.” The standard improves reportable segment disclosure requirements for public business entities primarily through enhanced disclosures about significant segment expenses that are regularly provided to the chief operating decision maker (“CODM”) and included within each reported measure of segment profit (referred to as the “significant expense principle”).

The standard will become effective for us for our fiscal year 2024 annual financial statements and interim financial statements thereafter and will be applied retrospectively for all prior periods presented in the financial statements, with early adoption permitted.

We plan to adopt the standard when it becomes effective for us beginning in our fiscal year 2024 annual financial statements, and we are currently evaluating the impact this guidance will have on the disclosures included in the Notes to the Consolidated Financial Statements.

Income Tax Disclosures

In December 2023, the FASB issued ASU 2023-09, “Income Taxes (Topic 740):

Improvements to Income Tax Disclosures.” The standard enhances income tax disclosure requirements for all entities by requiring specified categories and greater disaggregation within the rate reconciliation table, disclosure of income taxes paid by jurisdiction, and providing clarification on uncertain tax positions and related financial statement impacts.

The standard will be effective for us for our fiscal year 2025 annual financial statements with early adoption permitted.

We plan to adopt the standard when it becomes effective for us beginning in our fiscal year 2025 annual financial statements, and we expect the adoption of the standard will impact certain of our income tax disclosures.

Note 2 – Business Combinations

Business Combination Agreement and Amendments

On April 29, 2018, we entered into a Business Combination Agreement with Sprint and the other parties named therein (as amended, the “Business Combination Agreement”) for the Merger.

The Business Combination Agreement was subsequently amended to provide that, following the closing of the Merger and the other transactions contemplated by the Business Combination Agreement (collectively, the “Transactions”), SoftBank would indemnify us against certain specified matters and the loss of value arising out of, or resulting from, cessation of access to spectrum under certain circumstances and subject to certain limitations and qualifications.

On February 20, 2020, T-Mobile, SoftBank and Deutsche Telekom AG (“DT”) entered into a letter agreement (the “Letter Agreement”).

Pursuant to the Letter Agreement, SoftBank agreed to cause its applicable affiliates to surrender to T-Mobile, for no additional consideration, an aggregate of 48,751,557 shares of T-Mobile common stock (such number of shares, the “SoftBank Specified Shares Amount”), effective immediately following the Effective Time (as defined in the Business Combination Agreement), making SoftBank’s exchange ratio 11.31 shares of Sprint common stock for each share of T-Mobile common stock.

This resulted in an effective exchange ratio of approximately 11.00 shares of Sprint common stock for each share of T-Mobile common stock immediately following the closing of the Merger, an increase from the originally agreed 9.75 shares.

Sprint stockholders, other than SoftBank, received the original fixed exchange ratio of 0.10256 shares of T-Mobile common stock for each share of Sprint common stock, or the equivalent of approximately 9.75 shares of Sprint common stock for each share of T-Mobile common stock.

The Letter Agreement requires T-Mobile to issue to SoftBank 48,751,557 shares of T-Mobile common stock, subject to the terms and conditions set forth in the Letter Agreement, for no additional consideration, if certain conditions are met.

The issuance of these shares is contingent on the trailing 45-day volume-weighted average price per share of T-Mobile common stock on the NASDAQ Global Select Market being equal to or greater than $ 150.00 , at any time during the period commencing on April 1, 2022 and ending on December 31, 2025.

If the threshold price is not met, then none of the SoftBank Specified Shares Amount will be issued.

Closing of Sprint Merger

On April 1, 2020, we completed the Merger, and as a result, Sprint and its subsidiaries became wholly owned consolidated subsidiaries of T-Mobile.

Sprint was the fourth-largest telecommunications company in the U.S., offering a comprehensive range of wireless and wireline communication products and services.

As a combined company, we have been able to rapidly launch a broad and deep 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.

Upon completion of the Merger, each share of Sprint common stock was exchanged for 0.10256 shares of T-Mobile common stock, or 9.75 shares of Sprint common stock for each share of T-Mobile common stock.

After adjustments, including the holdback of the SoftBank Specified Shares Amount and fractional shares, we issued 373,396,310 shares of T-Mobile common stock to Sprint stockholders.

The fair value of the T-Mobile common stock provided in exchange for Sprint common stock was approximately $ 31.3 billion.

Additional components of consideration included the repayment of certain of Sprint’s debt, replacement of equity awards attributable to pre-combination services, contingent consideration and a cash payment received from SoftBank for certain reimbursed Merger expenses.

Immediately following the closing of the Merger and the surrender of the SoftBank Specified Shares Amount, pursuant to the Letter Agreement described above, DT and SoftBank held, directly or indirectly, approximately 43.6 % and 24.7 %, respectively, of the outstanding T-Mobile common stock, with the remaining approximately 31.7 % of the outstanding T-Mobile common stock held by other stockholders.

See Note 14 – SoftBank Equity Transaction for ownership details as of December 31, 2022.

Index for Notes to the Consolidated Financial Statements

Consideration Transferred

The acquisition-date fair value of consideration transferred in the Merger totaled $ 40.8 billion, comprised of the following:

(in millions) April 1, 2020

Fair value of T-Mobile common stock issued to Sprint stockholders (1)

Fair value of T-Mobile replacement equity awards attributable to pre-combination service (2)

Repayment of Sprint’s debt (including accrued interest and prepayment penalties) (3)

Fair value of contingent consideration (4)

Payment received from selling stockholder (5)

Total consideration exchanged $ 40,827

(1) Represents the fair value of T-Mobile common stock issued to Sprint stockholders pursuant to the Business Combination Agreement, less shares surrendered by SoftBank pursuant to the Letter Agreement.

The fair value is based on 373,396,310 shares of T-Mobile common stock issued at an exchange ratio of 0.10256 shares of T-Mobile common stock per share of Sprint common stock, less 48,751,557 T-Mobile shares surrendered by SoftBank which are treated as contingent consideration, and the closing price per share of T-Mobile common stock on NASDAQ on March 31, 2020, of $ 83.90 , as shares were transferred to Sprint stockholders prior to the opening of markets on April 1, 2020.

(2) Equity-based awards held by Sprint employees prior to the acquisition date have been replaced with T-Mobile equity-based awards.

The portion of the equity-based awards that relates to services performed by the employee prior to the acquisition date is included within consideration transferred, and includes stock options, restricted stock units and performance-based restricted stock units.

(3) Represents the cash consideration paid concurrent with the close of the Merger to retire certain Sprint debt, as required by change in control provisions of the debt, plus interest and prepayment penalties.

(4) Represents the fair value of the SoftBank Specified Shares Amount contingent consideration that may be issued as set forth in the Letter Agreement.

(5) Represents receipt of a cash payment from SoftBank for certain reimbursed Merger expenses.

The SoftBank Specified Shares Amount was determined to be contingent consideration with an acquisition-date fair value of $ 1.9 billion.

We estimated the fair value using the income approach, a probability-weighted discounted cash flow model, whereby a Monte Carlo simulation method estimated the probability of different outcomes as the likelihood of achieving the 45-day volume-weighted average price threshold is not easily predicted.

This fair value measurement is based on significant inputs not observable in the market and, therefore, represents a Level 3 measurement as defined in ASC 820:

Fair Value Measurement.

The key assumptions in applying the income approach include the estimated future share-price volatility, which was based on historical market trends and the estimated future performance of T-Mobile.

The maximum amount of contingent consideration that could be issued to SoftBank has an estimated value of $ 7.3 billion, based on SoftBank Specified Shares Amount of 48,751,557 multiplied by the defined volume-weighted average price per share of $ 150.00 .

The contingent consideration that could be delivered to SoftBank is classified within equity and is not subject to remeasurement.

Fair Value of Assets Acquired and Liabilities Assumed

We accounted for the Merger as a business combination.

The identifiable assets acquired and liabilities assumed of Sprint were recorded at their fair values as of the acquisition date and consolidated with those of T-Mobile.

Assigning fair market values to the assets acquired and liabilities assumed at the date of an acquisition requires the use of significant judgment regarding estimates and assumptions.

For the fair values of the assets acquired and liabilities assumed, we used the cost, income and market approaches, including market participant assumptions.

Index for Notes to the Consolidated Financial Statements

The following table summarizes the fair values for each major class of assets acquired and liabilities assumed at the acquisition date.

We retained the services of certified valuation specialists to assist with assigning values to certain acquired assets and assumed liabilities.

(in millions) April 1, 2020

Cash and cash equivalents $ 2,084

Accounts receivable 1,775

Equipment installment plan receivables 1,088

Inventory 658

Prepaid expenses 140

Assets held for sale 1,908

Other current assets 637

Property and equipment 18,435

Operating lease right-of-use assets 6,583

Financing lease right-of-use assets 291

Goodwill 9,423

Spectrum licenses 45,400

Other intangible assets 6,280

Equipment installment plan receivables due after one year, net 247

Other assets (1)

Total assets acquired 95,489

Accounts payable and accrued liabilities 5,015

Short-term debt 2,760

Deferred revenue 508

Short-term operating lease liabilities 1,818

Short-term financing lease liabilities 8

Liabilities held for sale 475

Other current liabilities 681

Long-term debt 29,037

Tower obligations 950

Deferred tax liabilities 3,478

Operating lease liabilities 5,615

Financing lease liabilities 12

Other long-term liabilities 4,305

Total liabilities assumed 54,662

Total consideration transferred $ 40,827

(1) Included in Other assets acquired is $ 80 million in restricted cash.

Amounts initially disclosed for the estimated values of certain acquired assets and liabilities assumed were adjusted through March 31, 2021 (the close of the measurement period) based on information arising after the initial valuation.

Intangible Assets and Liabilities

Goodwill with an assigned value of $ 9.4 billion represents the excess of the consideration transferred over the fair values of assets acquired and liabilities assumed.

The goodwill recognized includes synergies expected to be achieved from the operations of the combined company, the assembled workforce of Sprint and intangible assets that do not qualify for separate recognition.

Expected synergies from the Merger include the cost savings from the planned integration of network infrastructure, facilities, personnel and systems.

None of the goodwill resulting from the Merger is deductible for tax purposes.

All of the goodwill acquired is allocated to the wireless reporting unit.

Other intangible assets include $ 4.9 billion of customer relationships with a weighted-average useful life of eight years and tradenames of $ 207 million with a useful life of two years .

Leased spectrum arrangements that have favorable (asset) and unfavorable (liability) terms compared to current market rates were assigned fair values of $ 745 million and $ 125 million, respectively, with 18 -year and 19 -year weighted-average useful lives, respectively.

Index for Notes to the Consolidated Financial Statements

The fair value of Spectrum licenses of $ 45.4 billion was estimated using the income approach, specifically a Greenfield model.

This fair value measurement is based on significant inputs not observable in the market and, therefore, represents a Level 3 measurement as defined in ASC 820:

Fair Value Measurement.

The key assumptions in applying the income approach include the discount rate, estimated market share, estimated capital and operating expenditures, forecasted service revenue and a long-term growth rate for a hypothetical market participant that enters the wireless industry and builds a nationwide wireless network.

Acquired Receivables

The fair value of the assets acquired includes Accounts receivable of $ 1.8 billion and EIP receivables of $ 1.3 billion.

The UPB under these contracts as of April 1, 2020, the date of the Merger, was $ 1.8 billion and $ 1.6 billion, respectively.

The difference between the fair value and the UPB primarily represents amounts expected to be uncollectible.

Indemnification Assets and Contingent Liabilities

Pursuant to Amendment No.

2 to the Business Combination Agreement, SoftBank agreed to indemnify us against certain specified matters and losses.

As of the acquisition date, we recorded a contingent liability and an offsetting indemnification asset for the expected reimbursement by SoftBank for certain Lifeline matters.

The liability is presented in Accounts payable and accrued liabilities, and the indemnification asset is presented in Other current assets within our acquired assets and liabilities at the acquisition date.

In November 2020, we entered into a consent decree with the FCC to resolve certain Lifeline matters, which resulted in a payment of $ 200 million by SoftBank.

Final resolution of these matters could require making additional reimbursements and paying additional fines and penalties, which we do not expect to have a significant impact on our financial results.

We expect that any additional liabilities related to these matters would be indemnified and reimbursed by SoftBank.

Deferred Taxes

As a result of the Merger, we acquired deferred tax assets for which a valuation allowance reserve is deemed to be necessary, as well as additional uncertain tax benefit reserves.

As of the date of the Merger, the amount of the valuation allowance reserve and uncertain tax benefit reserves was $ 851 million and $ 660 million, respectively.

Pro Forma Information

The following unaudited pro forma financial information gives effect to the Transactions as if they had been completed on January 1, 2019.

The unaudited pro forma information was prepared in accordance with the requirements of ASC 805:

Business Combinations, which is a different basis than pro forma information prepared under Article 11 of Regulation S-X (“Article 11”).

As such, they are not directly comparable with historical results for stand-alone T-Mobile prior to April 1, 2020, historical results for T-Mobile from April 1, 2020 that reflect the Transactions and are inclusive of the results and operations of Sprint, nor our previously provided pro forma financials prepared in accordance with Article 11.

The pro forma results for the years ended December 31, 2020 and 2019 include the impact of several significant nonrecurring pro forma adjustments to previously reported operating results.

The pro forma adjustments are based on historically reported transactions by the respective companies.

The pro forma results do not include any anticipated synergies or other expected benefits of the acquisition.

Year Ended December 31,

(in millions) 2020 2019

Total revenues $ 74,681 $ 70,607

Income from continuing operations 3,302 185

Income from discontinued operations, net of tax 677 1,594

Net income 3,979 1,792

Significant nonrecurring pro forma adjustments include:

• Transaction costs of $ 559 million that were incurred during the year ended December 31, 2020 are assumed to have occurred on the pro forma close date of January 1, 2019, and are recognized as if incurred in the first quarter of 2019;

• The Prepaid Business divested on July 1, 2020, is assumed to have been classified as discontinued operations as of January 1, 2019, and the related activities are presented in Income from discontinued operations, net of tax;

• Permanent financing issued and debt redemptions occurring in connection with the closing of the Merger are assumed to have occurred on January 1, 2019, and historical interest expense associated with repaid borrowings is removed;

Index for Notes to the Consolidated Financial Statements

• Tangible and intangible assets are assumed to be recorded at their estimated fair values as of January 1, 2019 and are depreciated or amortized over their estimated useful lives;

• Accounting policies of Sprint are conformed to those of T-Mobile including depreciation for leased devices, distribution arrangements with Brightstar US, Inc., amortization of costs to acquire a contract and certain tower lease transactions.

The selected unaudited pro forma condensed combined financial information is provided for illustrative purposes only and does not purport to represent what the actual consolidated results of operations would have been had the Transactions actually occurred on January 1, 2019, nor do they purport to project the future consolidated results of operations.

For the periods subsequent to the Merger close date, the acquired Sprint subsidiaries contributed total revenues and operating income of $ 20.5 billion and $ 1.3 billion, respectively, for the year ended December 31, 2020, that were included on our Consolidated Statements of Comprehensive Income.

Regulatory Matters

The Transactions were the subject of various legal and regulatory proceedings involving a number of state and federal agencies.

In connection with those proceedings and the approval of the Transactions, we have certain commitments and other obligations to various state and federal agencies and certain nongovernmental organizations.

See Note 1 9 – Commitments and Contingencies for further information.

Prepaid Transaction

On July 26, 2019, we entered into the Asset Purchase Agreement with Sprint and DISH, pursuant to which, following the consummation of the Merger, DISH would acquire the Prepaid Business.

On June 17, 2020, T-Mobile, Sprint and DISH entered into the First Amendment to the Asset Purchase Agreement.

Pursuant to the First Amendment of the Asset Purchase Agreement, T-Mobile, Sprint and DISH agreed to proceed with the closing of the Prepaid Transaction, in accordance with the Asset Purchase Agreement, on July 1, 2020, subject to the terms and conditions of the Asset Purchase Agreement and the terms and conditions of the Consent Decree.

On July 1, 2020, pursuant to the Asset Purchase Agreement, we completed the Prepaid Transaction.

Upon closing of the Prepaid Transaction, we received $ 1.4 billion from DISH for the Prepaid Business, subject to working capital adjustments.

See Note 12 – Discontinued Operations for further information.

Shenandoah Personal Communications Company Affiliate Relationship

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On August 26, 2020, Sprint, now our indirect subsidiary, on behalf of and as the direct or indirect owner of Sprint PCS, exercised its option by delivering a binding notice of exercise to Shentel.

Index for Notes to the Consolidated Financial Statements

On May 28, 2021, T-Mobile USA, Inc., a Delaware corporation and our direct wholly owned subsidiary, entered into an Asset Purchase Agreement (the “Purchase Agreement”) with Shentel, for the acquisition of the Wireless Assets for an aggregate purchase price of approximately $ 1.9 billion in cash, subject to certain adjustments prescribed by the Management Agreement and such additional adjustments agreed by the parties.

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Concurrently, and as agreed to through the Purchase Agreement, T-Mobile and Shentel entered into certain separate transactions, including the effective settlement of the pre-existing arrangements between T-Mobile and Shentel under the Management Agreement.

Index for Notes to the Consolidated Financial Statements

In exchange, T-Mobile transferred cash of approximately $ 2.0 billion, approximately $ 1.9 billion of which was determined to be consideration transferred for the Wireless Assets and the remainder of which was determined to relate to separate transactions, primarily associated with the effective settlement of pre-existing arrangements between T-Mobile and Shentel.

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Intangible Assets and Liabilities

Goodwill with an assigned value of $ 1.0 billion, substantially all of which is deductible for tax purposes, represents the anticipated cost savings from the operations of the combined company resulting from the planned integration of network infrastructure and facilities, the assembled workforce hired concurrently with the acquisition of Wireless Assets, and the intangible assets that do not qualify for separate recognition.

Index for Notes to the Consolidated Financial Statements

intangible assets that do not qualify for separate recognition.

All of the goodwill acquired is allocated to the wireless reporting unit.

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The key assumptions in applying the income approach include forecasted subscriber growth rates, revenue over an estimated period of time, the discount rate, estimated capital expenditures, estimated income taxes and the long-term growth rate, as well as forecasted earnings before interest, taxes, depreciation and amortization (“EBITDA”) margins.

Index for Notes to the Consolidated Financial Statements

Acquisition of Ka’ena Corporation

On March 9, 2023, we entered into a Merger and Unit Purchase Agreement (the “Merger and Purchase Agreement”) for the acquisition of 100 % of the outstanding equity of Ka’ena Corporation and its subsidiaries including, among others, Mint Mobile LLC (collectively, “Ka’ena” and the “Ka’ena Acquisition”), for a maximum purchase price of $ 1.35 billion to be paid out 39 % in cash and 61 % in shares of T-Mobile common stock.

The purchase price is variable dependent upon specified performance indicators of Ka’ena during certain periods before and after closing and consists of an upfront payment at closing of the transaction, subject to certain agreed-upon working capital and other adjustments, and a variable earnout payable 24 months after closing of the transaction.

Our estimate of the upfront payment is subject to Ka’ena’s underlying business performance and the timing of transaction close, and has been updated to $ 1.2 billion, before working capital and other adjustments.

The acquisition is subject to certain customary closing conditions, including certain regulatory approvals, and is expected to close by the end of the first quarter of 2024.

Note 3 – Receivables and Related Allowance for Credit Losses

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Accounts Receivable Portfolio Segment

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

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

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

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

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

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gross domestic product and forecasts of consumer credit behavior for comparable credit exposures.

We also periodically evaluate other macroeconomic indicators such as unemployment rates to assess their level of correlation with our historical credit loss statistics.

Index for Notes to the Consolidated Financial Statements

EIP Receivables Portfolio Segment

Based upon customer credit profiles at the time of customer origination, we classify the EIP receivables segment into two customer classes of “Prime” and “Subprime.” Prime customer receivables are those with lower credit risk and Subprime customer receivables are those with higher credit risk.

Based upon customer credit profiles at the time of customer origination, as well as subsequent credit performance, we classify the EIP receivables segment into two customer classes of “Prime” and “Subprime.” Prime customer receivables are those with lower credit risk and Subprime customer receivables are those with higher credit risk.

Customers may be required to make a down payment on their equipment purchases if their assessed credit risk exceeds established underwriting thresholds.

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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 leveraging several factors, such as credit bureau information and consumer credit risk scores, as well as service and device plan characteristics.

Installment receivables acquired in the Merger are included in EIP receivables.

We applied our proprietary credit scoring model to the customers acquired in the Merger with an outstanding EIP receivable balance.

Based on tenure, consumer credit risk score and credit profile, these acquired customers were classified into our customer classes of Prime or Subprime.

For EIP receivables acquired in the Merger, the difference between the fair value and UPB of the receivable at the acquisition date is accreted to interest income over the contractual life of the receivable using the effective interest method.

As of December 31, 2023, we enhanced our proprietary credit scoring model to more fully reflect current payment performance in the assigned credit score by enabling migration between the Prime and Subprime credit class categories, which aligns with our expected credit loss model methodology.

The impact of this change was a net migration of approximately 12 % of the EIP receivables from Subprime to the Prime credit class category.

As our credit loss model already captured current payment performance, this change did not have a significant impact on our estimated expected credit losses.

EIP receivables had a combined weighted-average effective interest rate of 10.6 % and 8.0 % as of December 31, 2023, and 2022, respectively.

Index for Notes to the Consolidated Financial Statements

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

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Originated in 2023 Originated in 2022 Originated prior to 2022 Total EIP Receivables, Net of

unamortized imputed discounts

(in millions) Prime Subprime Prime Subprime Prime Subprime Prime Subprime Grand total

Unamortized Imputed Discount

(in millions) Prime Subprime Prime Subprime Prime Subprime Prime Subprime Total

Current - 30 days past due $ 3,925 $ 987 $ 1,129 $ 304 $ 253 $ 40 $ 5,307 $ 1,331 $ 6,638

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

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

We multiply these estimated default probabilities by our estimated loss given default, which is the estimated amount or severity of the default loss after adjusting for estimated recoveries.

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

Our assessment of default probabilities or frequency includes receivables delinquency status, historical loss experience, how

Index for Notes to the Consolidated Financial Statements

long the receivables have been outstanding and customer credit ratings, as well as customer tenure.

We multiply these estimated default probabilities by our estimated loss given default, which is the estimated amount of default or the severity of loss.

The following table presents write-offs of our EIP receivables by year of origination for the year ended December 31, 2023:

(in millions) Originated in 2023 Originated in 2022 Originated prior to 2022 Total Write-offs

Write-offs $ 174 $ 284 $ 60 $ 518

Activity for the years ended December 31, 2023, 2022 and 2021, in the allowance for credit losses and unamortized imputed discount balances for the accounts receivable and EIP receivables segments were as follows:

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Allowance for credit losses and imputed discount, beginning of period $ 167 $ 811 $ 978 $ 146 $ 630 $ 776 $ 194 $ 605 $ 799

Beginning balance adjustment due to implementation of the new credit loss standard — — — — — — — 91 91

Bad debt expense 440 458 898 433 593 1,026 231 221 452

Write-offs, net of recoveries ( 412 ) ( 518 ) ( 930 ) ( 279 ) ( 248 ) ( 527 ) ( 205 ) ( 175 ) ( 380 )

Write-offs ( 446 ) ( 518 ) ( 964 ) ( 412 ) ( 518 ) ( 930 ) ( 279 ) ( 248 ) ( 527 )

Change in imputed discount on short-term and long-term EIP receivables N/A 220 220 N/A 262 262 N/A 187 187

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Allowance for credit losses and imputed discount, end of period $ 161 $ 773 $ 934 $ 167 $ 811 $ 978 $ 146 $ 630 $ 776

Credit loss activity increased during 2022, as activity normalized relative to muted Pandemic levels in 2021 and other macroeconomic trends contributed to adverse scenarios and presented 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 off-balance-sheet credit exposures as of December 31, 2023.

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 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.

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

See Note 4 – Sales of Certain Receivables for further information.

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In 2015, we entered into an arrangement to sell certain EIP receivables on a revolving basis (the “EIP sale arrangement”).

The maximum funding commitment of the EIP sale arrangement is $ 1.3 billion.

The maximum funding commitment of the sale arrangement is $ 1.3 billion.

On November 14, 2023, we extended the scheduled expiration date of the EIP sale arrangement to November 18, 2024.

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Sales of EIP receivables occur daily and are settled on a monthly basis.

Index for Notes to the Consolidated Financial Statements

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

Pursuant to the EIP sale arrangement, selected receivables are transferred to the EIP BRE.

The EIP BRE then sells the receivables to a non-consolidated and unaffiliated third-party entity over which we do not exercise any level

Index for Notes to the Consolidated Financial Statements

of control, nor does the third-party entity qualify as a VIE.

The EIP BRE then sells the receivables to a non-consolidated and unaffiliated third-party entity over which we do not exercise any level of control, nor does the third-party entity qualify as a VIE.

Variable Interest Entity

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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”).

Pursuant to the service receivable sale arrangement, selected receivables are transferred to the Service BRE.

The Service BRE then sells the receivables to a non-consolidated and unaffiliated third party entity over which we do not exercise any level of control, nor does the third party qualify as a VIE.

Pursuant to the amended service receivable sale arrangement, selected receivables are transferred to the Service BRE.

The Service BRE then sells the receivables to a non-consolidated and unaffiliated third-party entity over which we do not exercise any level of control and which does not qualify as a VIE.

Variable Interest Entity

Prior to the March 2021 amendment of the service receivable sale arrangement, the Service BRE did not qualify as a VIE, but due to the significant level of control we exercised over the entity, it was consolidated.

In March 2021, the amendment to the service receivable sale arrangement triggered a VIE reassessment, and we determined that the Service BRE now qualifies as a VIE.

We determined that the Service BRE is a VIE, as its equity investment at risk lacks the obligation to absorb a certain portion of expected losses.

We have a variable interest in the Service BRE and have determined that we are the primary beneficiary based on our ability to direct the activities that most significantly impact the Service BRE’s economic performance.

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Sales of Receivables

The transfers of service receivables and EIP receivables to the non-consolidated entities are accounted for as sales of financial assets.

The transfers of service accounts receivable and EIP receivables to the non-consolidated entities are accounted for as sales of financial assets.

Once identified for sale, the receivable is recorded at the lower of cost or fair value.

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As of December 31, 2023 and 2022, our deferred purchase price related to the sales of service receivables and EIP receivables was $ 658 million and $ 692 million, respectively.

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

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

(in millions) December 31,

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As of both December 31, 2023 and 2022, the total principal balance of outstanding transferred service receivables and EIP receivables was $ 1.0 billion.

Index for Notes to the Consolidated Financial Statements

Continuing Involvement

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

Index for Notes to the Consolidated Financial Statements

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.

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Total depreciation expense relating to property and equipment and financing lease right-of-use assets was $ 12.0 billion, $ 12.7 billion and $ 15.2 billion for the years ended December 31, 2023, 2022 and 2021, respectively.

These amounts include depreciation expense related to leased wireless devices of $ 1.1 billion for the year ended December 31, 2022 and $ 3.1 billion for each of the years ended December 31, 2021 and 2020.

These amounts include depreciation expense related to leased wireless devices of $ 170 million, $ 1.1 billion and $ 3.1 billion for the years ended December 31, 2023, 2022 and 2021, respectively.

We capitalize interest associated with the acquisition or construction of certain property and equipment and spectrum intangible assets.

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The corresponding assets, net of accumulated depreciation and excluding amounts transferred to held for sale, related to asset retirement obligations were $ 462 million and $ 546 million as of December 31, 2023 and 2022, respectively.

Index for Notes to the Consolidated Financial Statements

Postpaid Billing System Impairment

In connection with the continuing integration of the businesses following the Merger, we evaluated the long-term billing system architecture strategy for our postpaid customers.

In order to facilitate customer migration from the Sprint legacy billing platform, our postpaid billing system replacement plan and associated development will no longer serve our future needs.

As a result, we recorded a non-cash impairment of $ 200 million related to capitalized software development costs for the year ended December 31, 2020.

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

Wireline Impairment

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

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.

Index for Notes to the Consolidated Financial Statements

associated customers and cash flows in a significant manner.

The results of this assessment indicated that certain Wireline long-lived assets were impaired.

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Balance as of December 31, 2021, net of accumulated impairment losses of $ 10,984

Purchase price adjustments of goodwill in 2021 22

Goodwill from acquisitions in 2022 46

Balance as of December 31, 2022 12,234

Goodwill from acquisitions in 2022 46

Balance as of December 31, 2023 $ 12,234

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The nonrecurring measurements of the fair value of these assets, for which observable market information may be limited, are classified within Level 3 of the fair value hierarchy.

In the event an impairment is required, the asset is adjusted to its estimated fair value using market-based assumptions, to the extent they are available, as well as other assumptions that may require significant judgement.

For our annual assessment of the wireless reporting unit, we employed a qualitative approach.

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In addition to performing an assessment under the market approach we also considered any events or change in circumstances that occurred, noting no indication that the fair value of the wireless reporting unit may be below its carrying amount at December 31, 2023.

In the year ended December 31, 2020, we recognized a goodwill impairment of $ 218 million for the Layer3 reporting unit.

The impairment was the result of our enhanced in-home broadband opportunity following the Merger, along with the acquisition of certain content rights, which has created a strategic shift in our TVision TM services offering.

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

Index for Notes to the Consolidated Financial Statements

Intangible Assets

Identifiable Intangible Assets Acquired from the Merger

The following table summarizes the fair value of the intangible assets acquired in the Merger:

Weighted-Average Useful Life (in years) Fair Value as of April 1, 2020

(in millions)

Spectrum licenses Indefinite-lived $ 45,400

Tradenames (1)

Customer relationships 8 years

Favorable spectrum leases 18 years

Other intangible assets 7 years

Total intangible assets acquired $ 51,680

(1) Tradenames include the Sprint brand.

The fair value of spectrum licenses includes the value associated with aggregating a nationwide portfolio of owned and leased spectrum.

Favorable spectrum leases represent a contract where the market rate is higher than the future contractual lease payments.

We lease this spectrum from third parties who hold the spectrum licenses.

As these contracts pertain to intangible assets, they are excluded from the lease accounting guidance (ASC 842) and are accounted for as service contracts in which the expense is recognized on a straight-line basis over the lease term.

Favorable spectrum leases of $ 745 million were recorded as an intangible asset as a result of purchase accounting and are being amortized on a straight-line basis over the associated remaining lease term.

Additionally, we recognized unfavorable spectrum lease liabilities of $ 125 million, which are also amortized over their respective remaining lease terms and are included in Other liabilities on our Consolidated Balance Sheets.

The customer relationship intangible assets represent the value associated with the acquired Sprint customers.

The customer relationship intangible assets are amortized using the sum-of-the-years digits method over periods of up to eight years .

Other intangible assets are amortized over the remaining period that the asset is expected to provide a benefit to us.

Identifiable Intangible Assets Acquired in the Shentel Acquisition

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Spectrum license acquisitions 103 3,152 9,545

Spectrum licenses acquired in Merger — — 45,400

Spectrum licenses transferred to held for sale ( 2 ) ( 64 ) ( 28 )

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Spectrum Transactions

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.

We expect to incur an additional $ 767 million in fixed relocation costs, which will be paid through 2024.

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.

In January 2022, the FCC announced that we were the winning bidder of 199 licenses in Auction 110 (3.45 GHz spectrum) for an aggregate purchase price of $ 2.9 billion.

Index for Notes to the 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 inception of Auction 110 in September 2021, we deposited $ 100 million.

We paid the FCC the remaining $ 2.8 billion for the licenses won in the auction in February 2022.

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

The licenses are included in Spectrum licenses on our Consolidated Balance Sheets as of December 31, 2022.

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

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The aggregate cash payments made to the FCC are included in Other assets on our Consolidated Balance Sheets as of December 31, 2023, 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 Consolidated Statements of Cash Flows for the year ended December 31, 2022.

As of December 31, 2022, the activities that are necessary to get the C-band, mid-band and 2.5 GHz spectrum ready for its intended use have not begun;

as such, capitalization of the interest associated with the costs of acquiring these spectrum licenses has not begun.

The timing of when the licenses will be issued will be determined by the FCC after all post-auction procedures have been completed, which has been delayed due to the suspension of auction authority to the FCC by Congress.

In December 2023, Congress passed the 5G Spectrum Authority Licensing Enforcement (SALE) Act, which gives the FCC temporary authority to grant licenses from previous auctions.

As a result, the Auction 108 licenses are expected to be issued in the first quarter of 2024.

As of December 31, 2023, the activities that are necessary to get the 3.45 GHz and 2.5 GHz spectrum acquired pursuant to FCC Auctions 110 and 108, respectively, ready for its intended use have not begun;

as such, capitalization of the interest associated with the costs of deploying these spectrum licenses has not begun.

During the year ended December 31, 2023, we capitalized interest on the costs of our C-band spectrum licenses, acquired pursuant to FCC Auction 107, during the period that development activities occurred.

License Purchase Agreements

DISH Network Corporation

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

In the event DISH breaches the DISH License Purchase Agreement or fails to deliver the purchase price following the satisfaction or waiver of all closing conditions, DISH is liable to pay us a fee of $ 72 million.

Additionally, if DISH does not exercise the option to purchase the 800 MHz spectrum licenses, we are required, unless otherwise approved under the Consent Decree, to offer the licenses for sale through an auction.

On July 1, 2020, we and DISH Network Corporation (“DISH”) entered into a License Purchase Agreement (the “DISH License Purchase Agreement”) pursuant to which DISH agreed to purchase certain 800 MHz spectrum licenses for a total of approximately $ 3.6 billion.

The closing of the sale of spectrum under the DISH License Purchase Agreement remains subject to FCC approval.

On October 15, 2023, we and DISH entered into an amendment (the “LPA Amendment”) to the DISH License Purchase Agreement pursuant to which, among other things, the parties agreed that (1) DISH will pay us a $ 100 million non-refundable extension fee (in lieu of the approximately $ 72 million termination fee that had previously been agreed to), (2) the closing for the purchase of the spectrum licenses by DISH will occur no later than April 1, 2024, (3) if DISH has not purchased the spectrum licenses by such date for any reason (including failure to receive the required FCC approval prior to such date), then the DISH License Purchase Agreement will automatically terminate, and we will retain the $ 100 million extension fee, (4) if DISH does purchase the spectrum by April 1, 2024, the $ 100 million extension fee will be credited against the $ 3.6 billion purchase price, and (5) we are permitted to commence auction of the spectrum prior to April 1, 2024 at our discretion (and subject to DISH’s purchase right).

The LPA Amendment was approved by the Court and became effective on October 23, 2023.

On October 25, 2023, we received a payment of $ 100 million from DISH for the extension fee and recorded a corresponding liability within Other current liabilities on our Consolidated Balance Sheets.

If DISH does not, by April 1, 2024, purchase the 800 MHz spectrum licenses, we are required, unless otherwise approved by the U.S.

Department of Justice under the final judgment agreed to by us, Deutsche Telekom AG (“DT”), 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, to offer the licenses for sale through an auction.

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

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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.

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

On March 30, 2023, we and the Sellers entered into Amended and Restated License Purchase Agreements pursuant to which we and the Sellers agreed to separate the transaction into two tranches of licenses, with the closings on the acquisitions of certain licenses in Chicago, Dallas and New Orleans being deferred in order to potentially expedite the regulatory approval process for the remainder of the licenses.

Subsequently, on August 25, 2023, we and the Sellers entered into Amendments No.

1 to the Amended and Restated License Purchase Agreements, which deferred the closings of certain additional licenses in Chicago and Dallas into the second closing tranche.

Together, the licenses with closings deferred into the second closing tranche represent $ 1.1 billion of the aggregate $ 3.5 billion cash consideration.

The licenses being acquired by us, and the total consideration being paid for the licenses, remains the same under the original License Purchase Agreements and subsequent amendments.

Index for Notes to the Consolidated Financial Statements

The FCC approved the purchase of the first tranche on December 29, 2023, and we expect the closing of the first tranche to occur in the second quarter of 2024.

We anticipate that the second closing (on the deferred licenses) will occur in late 2024 or early 2025.

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

Comcast Corporation

On September 12, 2023, we entered into a License Purchase Agreement with Comcast Corporation and its affiliate, Comcast OTR1, LLC (together with Comcast Corporation, “Comcast”), pursuant to which we will acquire spectrum in the 600 MHz band from Comcast in exchange for total cash consideration of between $ 1.2 billion and $ 3.3 billion, subject to an application for FCC approval.

The licenses will be acquired without any associated networks.

We anticipate the closing will occur in the first half of 2028.

The final purchase price will be determined, in the aggregate and on a per license basis, based on the set of licenses subject to the License Purchase Agreement at the time the parties make required transfer filings with the FCC.

Prior to the time of such filings, Comcast has the right to remove any or all of a certain specified subset of the licenses, totaling $ 2.1 billion (the “Optional Sale Licenses”), from the License Purchase Agreement.

The removal of any Optional Sale Licenses would reduce the final purchase price by the assigned value of each such license, from the maximum purchase price of $ 3.3 billion.

The licenses are subject to an exclusive leasing arrangement between us and Comcast entered into contemporaneously with the License Purchase Agreement.

If Comcast elects to remove an Optional Sale License from the License Purchase Agreement, the associated lease for such Optional Sale License will terminate, but no sooner than two years from the date of the License Purchase Agreement (with us having a minimum period of time after any such termination to cease transmitting on such license’s associated spectrum).

Impairment Assessment

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No events or change in circumstances have occurred that indicate the fair value of the Spectrum licenses may be below its carrying amount at December 31, 2023.

Index for Notes to the Consolidated Financial Statements

Other Intangible Assets

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Other intangible assets $ 6,900 $ ( 4,282 ) $ 2,618 $ 6,907 $ ( 3,399 ) $ 3,508

Amortization expense for intangible assets subject to amortization was $ 1.2 billion, $ 1.3 billion and $ 1.2 billion for the years ended December 31, 2022, 2021 and 2020, respectively.

Amortization expense for intangible assets subject to amortization was $ 888 million, $ 1.2 billion and $ 1.3 billion for the years ended December 31, 2023, 2022 and 2021, respectively.

Index for Notes to the Consolidated Financial Statements

The estimated aggregate future amortization expense for intangible assets subject to amortization is summarized below:

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For fair value hedges, the change in the fair value of the derivative instruments is recognized in earnings through the same income statement line item as the change in the fair value of the hedged item.

For cash flow hedges, the change in the fair value of the derivative instruments is reported in Other comprehensive income (loss) and recognized in earnings when the hedged item is recognized in earnings, again, through the same income statement line item.

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

Index for Notes to the Consolidated Financial Statements

For cash flow hedges, the change in the fair value of the derivative instruments is reported in Other comprehensive income and recognized in earnings when the hedged item is recognized in earnings, again, through the same income statement line item.

We did not have any significant derivative instruments outstanding as of December 31, 2023 and 2022.

Interest Rate Lock Derivatives

During the three months ended March 31, 2020, we made net collateral transfers to certain of our derivative counterparties totaling $ 580 million, which are included in Net cash related to derivative contracts under collateral exchange arrangements within Net cash used in investing activities on our Consolidated Statements of Cash Flows.

Between April 2 and April 6, 2020, in connection with the issuance of an aggregate of $ 19.0 billion of Senior Secured Notes, we terminated our interest rate lock derivatives.

At the time of termination, the interest rate lock derivatives were a liability of $ 2.3 billion, of which $ 1.2 billion was cash-collateralized.

The cash flows associated with the settlement of interest rate lock derivatives are presented on a gross basis on our Consolidated Statements of Cash Flows, with the total cash payments to settle the swaps of $ 2.3 billion presented in changes in Other current and long-term liabilities within Net cash provided by operating activities and the return of cash collateral of $ 1.2 billion presented as an inflow in Net cash related to derivative contracts under collateral exchange arrangements within Net cash used in investing activities for the year ended December 31, 2020.

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 $ 1.1 billion and $ 1.3 billion are presented in Accumulated other comprehensive loss on our Consolidated Balance Sheets as of December 31, 2023 and 2022, respectively.

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See Note 4 – Sales of Certain Receivables for further information.

Index for Notes to the Consolidated Financial Statements

The carrying amounts of our deferred purchase price assets, which are measured at fair value on a recurring basis and are included on our Consolidated Balance Sheets, were $ 658 million and $ 692 million as of December 31, 2023 and 2022, respectively.

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

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

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

The fair value of our Senior Notes to affiliates was determined based on a discounted cash flow approach using market interest rates of instruments with similar terms and maturities and an estimate for our standalone credit risk.

Accordingly, our Senior Notes to affiliates were classified as Level 2 within the fair value hierarchy.

The fair value of our ABS Notes was determined based on quoted prices in inactive markets for identical instruments and observable changes in market interest rates, both of which are Level 2 inputs, as well as projected changes in cash collections on the underlying pool of receivables securing the ABS Notes, which is a Level 3 input.

Due to the overcollateralization of the ABS Notes, projected changes in cash collections, such as changes resulting from customer default rates, on the pool of receivables securing such notes do not significantly affect the fair value estimate of the ABS Notes and therefore such notes were classified as Level 2 within the fair value hierarchy.

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

The fair value of our asset-backed notes (“ABS Notes”) was primarily based on quoted prices in inactive markets for identical instruments and observable changes in market interest rates, both of which are Level 2 inputs.

Accordingly, our ABS Notes were classified as Level 2 within the fair value hierarchy.

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

The fair value estimates were based on information available as of December 31, 2023, and 2022.

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

Index for Notes to the Consolidated Financial Statements

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

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

(in millions) Carrying Amount (1)

Fair Value (1)

Carrying Amount (1)

(in millions) Level within the Fair Value Hierarchy December 31, 2023 December 31, 2022

Carrying Amount Fair Value Carrying Amount (1)

Fair Value (1)

Senior Notes to third parties 1 $ 70,493 $ 65,962 $ 66,582 $ 59,011

1 $ 66,582 $ 59,011 $ 30,309 $ 32,093

Senior Notes to affiliates 2 1,496 1,499 1,495 1,460

Senior Secured Notes to third parties 1 2,281 2,207 3,117 2,984

1 3,117 2,984 40,098 42,393

ABS Notes to third parties 2 748 748 746 744

(1) Excludes $ 20 million and $ 47 million as of December 31, 2022, and 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 (which exclude, for the avoidance of doubt, the Spectrum-Backed Notes), are no longer secured and have been reclassified to Senior Notes to third parties as of September 30, 2022, within the table above.

See Note 8 – Debt for additional information.

(1) Excludes $ 20 million as of December 31, 2022, in other financial liabilities as the carrying values approximate fair value, primarily due to the short-term maturities of these instruments.

Index for Notes to the Consolidated Financial Statements

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2023 December 31,

4.000 % Senior Notes to affiliates due 2022

7.875 % Senior Notes due 2023

5.375 % Senior Notes to affiliates due 2022

7.125 % Senior Notes due 2024

3.500 % Senior Notes due 2025

7.125 % Senior Notes due 2024

3.500 % Senior Notes due 2025

4.738 % Series 2018-1 A-1 Notes due 2025

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4.750 % Senior Notes to affiliates due 2028

4.800 % Senior Notes due 2028

4.910 % Class A Senior ABS Notes due 2028

4.950 % Senior Notes due 2028

5.152 % Series 2018-1 A-2 Notes due 2028

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5.650 % Senior Notes due 2053

5.750 % Senior Notes due 2054

6.000 % Senior Notes due 2054

3.600 % Senior Notes due 2060

5.800 % Senior Notes due 2062

Other debt — 20

Unamortized premium on debt to third parties 1,011 1,335

Unamortized discount on debt to affiliates — ( 5 )

Unamortized discount on debt to third parties ( 223 ) ( 199 )

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Total long-term debt $ 71,399 $ 66,796

Our effective interest rate, excluding the impact of derivatives and capitalized interest, was approximately 3.9 % and 4.1 % for the years ended December 31, 2022 and 2021, respectively, on weighted-average debt outstanding of $ 72.5 billion and $ 74.0 billion for the years ended December 31, 2022 and 2021, respectively.

The weighted-average debt outstanding was

Index for Notes to the Consolidated Financial Statements

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.

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 to release the liens securing the obligations under the Credit Agreement.

Upon effectiveness of the Credit Agreement Amendment, the liens securing the Senior Secured Notes were also automatically released, and our obligations under the Senior Secured Notes (thereafter, together with our other senior unsecured notes, “Senior Notes”), which for the avoidance of doubt exclude the Spectrum-Backed Notes, are no longer secured.

Our effective interest rate, excluding the impact of derivatives and capitalized interest, was approximately 4.0 % and 3.9 % on weighted-average debt outstanding of $ 75.4 billion and $ 72.5 billion for the years ended December 31, 2023 and 2022, 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.

The Senior Notes are guaranteed on a senior unsecured basis by the Company and certain of our consolidated subsidiaries.

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Issuances and Borrowings

During the year ended December 31, 2022, we issued the following Senior Notes and ABS Notes:

During the year ended December 31, 2023, 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

4.950 % Senior Notes due 2028

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

$ 1,000 $ ( 6 ) $ 994 February 9, 2023

5.050 % Senior Notes due 2033

1,250 ( 9 ) 1,241 February 9, 2023

5.650 % Senior Notes due 2053

750 26 776 February 9, 2023

4.800 % Senior Notes due 2028

900 ( 5 ) 895 May 11, 2023

5.050 % Senior Notes due 2033

1,350 ( 28 ) 1,322 May 11, 2023

5.750 % Senior Notes due 2054

1,250 ( 16 ) 1,234 May 11, 2023

5.750 % Senior Notes due 2034

1,000 ( 6 ) 994 September 14, 2023

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Total of Senior Notes issued $ 8,500 $ ( 54 ) $ 8,446

4.910 % Class A Senior ABS Notes due 2028

750 ( 4 ) 746 October 12, 2022

Total of ABS Notes issued $ 750 $ ( 4 ) $ 746

On September 15, 2022, T-Mobile USA and certain of its affiliates, as guarantors, issued an aggregate of $ 3.0 billion of Senior Notes bearing interest from 5.200 % to 5.800 % and maturing in 2033 to 2062, and used the net proceeds of $ 3.0 billion for general corporate purposes, including among other things, share repurchases and refinancing of existing indebtedness on an ongoing basis.

Subsequent to December 31, 2022, on February 9, 2023, we issued $ 1.0 billion of 4.950 % Senior Notes due 2028, $ 1.3 billion of 5.050 % Senior Notes due 2033 and $ 750 million of 5.650 % Senior Notes due 2053.

We intend to use the net proceeds of $ 3.0 billion for general corporate purposes, which may include among other things, share repurchases and refinancing of existing indebtedness on an ongoing basis.

Subsequent to December 31, 2023, on January 12, 2024, we issued $ 1.0 billion of 4.850 % Senior Notes due 2029, $ 1.3 billion of 5.150 % Senior Notes due 2034 and $ 750 million of 5.500 % Senior Notes due 2055.

We intend to use the net proceeds of $ 3.0 billion for general corporate purposes, which may include among other things, share repurchases, any dividends declared by our Board of Directors and refinancing of existing indebtedness on an ongoing basis.

Credit Facilities

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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 ended December 31, 2022.

As of December 31, 2022, we did not have an outstanding balance under this facility.

As of December 31, 2023 and 2022, we did not have an outstanding balance under this facility.

Index for Notes to the Consolidated Financial Statements

Note Redemptions and Repayments

During the year ended December 31, 2022, we made the following note redemptions and repayments:

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

4.000 % Senior Notes due 2022

$ 500 March 16, 2022 100.000 %

4.000 % Senior Notes to affiliates due 2022

1,000 March 16, 2022 100.000 %

5.375 % Senior Notes to affiliates due 2022

1,250 April 15, 2022 N/A

Note Redemption and Repayments

During the year ended December 31, 2023, we made the following note redemption and repayments:

(in millions) Principal Amount Redemption or Repayment Date

7.875 % Senior Notes due 2023

2,280 November 15, 2022 N/A

$ 4,250 September 15, 2023

Total Redemptions $ 4,250

4.738 % Secured Series 2018-1 A-1 Notes due 2025

$ 525 Various N/A

Other debt 1 Various N/A

$ 525 Various

5.152 % Series 2018-1 A-2 Notes due 2028

Total Repayments $ 801

Our losses on extinguishment of debt were $ 184 million and $ 371 million for the years ended December 31, 2021 and 2020, respectively, and are included in Other expense, net on our Consolidated Statements of Comprehensive Income.

There was no loss on extinguishment of debt for the year ended December 31, 2022.

Asset-backed Notes

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.

Our ABS Notes are secured by $ 982 million of gross EIP receivables and future collections on such receivables.

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

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.

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

The ABS Notes are redeemable, in whole but not in part, on or after the payment date in November 2023.

If redeemed on or after the payment date in November 2024, or if the aggregate principal balance of the transferred EIP receivables is equal to or less than 10% of the aggregate principal balance of the EIP receivables transferred upon issuance of the ABS Notes, we can redeem the ABS Notes without incurring a Make-Whole Payment;

The ABS Notes became redeemable, in whole but not in part, in November 2023.

If redeemed on or after November 20, 2024, or if the aggregate principal balance of the transferred EIP receivables is equal to or less than 10% of the aggregate principal balance of the EIP receivables transferred upon issuance of the ABS Notes, we can redeem the ABS Notes without incurring a Make-Whole Payment;

otherwise, a Make-Whole Payment applies.

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Deposits to the segregated accounts are considered restricted cash and are included in Other current assets on our Consolidated Balance Sheets.

Index for Notes to the Consolidated Financial Statements

Net proceeds of $ 746 million from our ABS Notes are reflected in Proceeds from issuance of long-term debt on our Consolidated Statements of Cash Flows in the year ended December 31, 2022.

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

The expected maturities of our ABS Notes are as follows:

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4.910 % Class A Senior ABS Notes due 2028

Index for Notes to the Consolidated Financial Statements

Variable Interest Entities

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The following table summarizes the carrying amounts and classification of assets and liabilities included in our Consolidated Balance Sheets with respect to the ABS Entities:

(in millions)

(in millions) December 31,

2023 December 31,

Equipment installment plan receivables, net $ 739 $ 652

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Accounts payable and accrued liabilities 1 1

Short-term debt 198 —

Long-term debt 550 746

See Note 3 – Receivable and Related Allowance for Credit Losses for additional information on the EIP receivables used to secure the ABS Notes.

See Note 3 – Receivables and Related Allowance for Credit Losses for additional information on the EIP receivables used to secure the ABS Notes.

Spectrum Financing

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The second series of notes totaled approximately $ 1.8 billion in aggregate principal amount, bears interest at 5.152 % per annum, and has quarterly interest-only payments until June 2023, with additional quarterly principal payments commencing in June 2023 through March 2028.

As of December 31, 2022, $ 276 million of the aggregate principal amount was classified as

Index for Notes to the Consolidated Financial Statements

Short-term debt on our Consolidated Balance Sheets.

As of December 31, 2023, $ 368 million of the aggregate principal amount was classified as Short-term debt on our Consolidated Balance Sheets.

The Spectrum Portfolio, which also serves as collateral for the Spectrum-Backed Notes, remains substantially identical to the original portfolio from October 2016.

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is required to make monthly lease payments to the Spectrum Financing SPEs in an aggregate amount that is market-based relative to the spectrum usage rights as of the closing date and equal to $ 165 million per month.

The lease payments, which are guaranteed by T-Mobile subsidiaries subsequent to the Merger, are sufficient to service all outstanding series of the 2016 Spectrum-Backed Notes and the lease also constitutes collateral for the senior secured notes.

The lease payments, which are guaranteed by T-Mobile subsidiaries subsequent to the Merger, are sufficient to service all outstanding series of the 2016 Spectrum-Backed Notes and the lease also

Index for Notes to the Consolidated Financial Statements

constitutes collateral for the senior secured notes.

Because the Spectrum Financing SPEs are wholly owned T-Mobile subsidiaries subsequent to the Merger, these entities are consolidated and all intercompany activity has been eliminated.

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Amounts associated with these balances are considered to be restricted cash.

Commercial Paper

On July 25, 2023, we established an unsecured short-term commercial paper program with the ability to borrow up to $ 2.0 billion from time to time.

This program supplements our other available external financing arrangements, and proceeds are expected to be used for general corporate purposes.

As of December 31, 2023, there was no outstanding balance under this program.

Standby Letters of Credit

For the purposes of securing our obligations to provide device insurance services and for the purposes of securing our general purpose obligations, we maintain an agreement for standby letters of credit with certain financial institutions.

We assumed certain of Sprint’s standby letters of credit in the Merger.

Our outstanding standby letters of credit were $ 238 million and $ 352 million as of December 31, 2023 and 2022, respectively.

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Accordingly, we recorded this arrangement as a financing whereby we recorded debt, a financial obligation, and the CCI Lease Sites tower assets remained on our Consolidated Balance Sheets.

We recorded long-

We recorded long-term financial obligations in the amount of the net proceeds received and recognize interest on the tower obligations.

Index for Notes to the Consolidated Financial Statements

term financial obligations in the amount of the net proceeds received and recognize interest on the tower obligations.

The tower obligations are increased by interest expense and amortized through contractual leaseback payments made by us to CCI and through net cash flows generated and retained by CCI from the operation of the tower sites.

obligations are increased by interest expense and amortized through contractual leaseback payments made by us to CCI and through net cash flows generated and retained by CCI from the operation of the tower sites.

Acquired CCI Tower Lease Arrangements

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Accordingly, we recorded this arrangement as a financing whereby we recorded debt, a financial obligation, and the Master Lease Sites tower assets remained on our Consolidated Balance Sheets.

As of the closing date of the Merger, we recognized Property and equipment with a fair value of $ 2.8 billion and tower obligations related to amounts owed to CCI under the leaseback of $ 1.1 billion.

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

We recognize interest expense on the tower obligations.

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We provide wireless communications services to three primary categories of customers:

• Postpaid customers generally include customers who are qualified to pay after receiving wireless communications services utilizing phones, High Speed Internet, tablets, wearables, DIGITS or other connected devices;

• Postpaid customers generally include customers who are qualified to pay after receiving wireless communications services utilizing phones, High Speed Internet, mobile internet devices (including tablets and hotspots), wearables, DIGITS and other connected devices, including SyncUP and IoT;

• Prepaid customers generally include customers who pay for wireless communications services in advance;

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

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

Year Ended December 31,

(in millions) 2022 2021 2020

Equipment revenues from the lease of mobile communication devices $ 1,430 $ 3,348 $ 4,181

Contract Balances

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(in millions) Contract

Assets Contract Liabilities

Assets Contract

Balance as of December 31, 2022 $ 534 $ 748

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

Index for Notes to the Consolidated Financial Statements

Revenues for the years ended December 31, 2023, 2022 and 2021 include the following:

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Amounts included in the beginning of year contract liability balance $ 747 $ 760 $ 767

Index for Notes to the Consolidated Financial Statements

Remaining Performance Obligations

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As of December 31, 2023, the aggregate amount of the contractual minimum consideration for wholesale, roaming and service contracts is $ 1.9 billion, $ 1.6 billion and $ 2.7 billion for 2024, 2025, and 2026 and beyond, respectively.

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

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

Contract Costs

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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 Consolidated Statements of Comprehensive Income were $ 1.5 billion, $ 1.1 billion and $ 865 million for the years ended December 31, 2022, 2021 and 2020, respectively.

Amortization of deferred contract costs included in Selling, general and administrative expense on our Consolidated Statements of Comprehensive Income were $ 1.8 billion, $ 1.5 billion and $ 1.1 billion for the years ended December 31, 2023, 2022 and 2021, respectively.

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

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Note 11 – Employee Compensation and Benefit Plans

Under our 2013 Omnibus Incentive Plan and the Sprint Corporation Amended and Restated 2015 Omnibus Incentive Plan that T-Mobile assumed in connection with the closing of the Merger (the “Incentive Plans”), we are authorized to issue up to 101 million shares of our common stock.

Under our Incentive Plans, we can grant stock options, stock appreciation rights, restricted stock, restricted stock units (“RSUs”), and performance awards to eligible employees, consultants, advisors and non-employee directors.

As of December 31, 2022, there were approximately 15 million shares of common stock available for future grants under our Incentive Plans.

In June 2023, the stockholders of the Company approved the T-Mobile US, Inc.

2023 Incentive Award Plan (the “2023 Plan”) which replaced the 2013 Omnibus Incentive Plan and the Sprint Corporation Amended and Restated 2015 Omnibus Incentive Plan that T-Mobile assumed in connection with the closing of the Merger (collectively, with the 2023 Plan, the “Incentive Plans”).

Under the 2023 Plan, we are authorized to issue up to 33 million shares of our common stock and can grant stock options, stock appreciation rights, restricted stock, RSUs and PRSUs to eligible employees, consultants, advisors and non-employee directors.

As of December 31, 2023, there were approximately 33 million shares of common stock available for future grants under the 2023 Plan.

We grant RSUs to eligible employees, key executives and certain non-employee directors and PRSUs to eligible key executives.

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We also maintain an employee stock purchase plan (“ESPP”), under which eligible employees can purchase our common stock at a discounted price.

Index for Notes to the Consolidated Financial Statements

Stock-based compensation expense and related income tax benefits were as follows:

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Fair value of stock awards vested $ 889 $ 743 $ 944

Upon the completion of our Merger with Sprint, T-Mobile assumed Sprint’s stock compensation plans.

In addition, pursuant to the Business Combination Agreement, at the Effective Time, each outstanding option to purchase Sprint common stock (other than under Sprint’s Employee Stock Purchase Plan), each award of time-based RSUs in respect of shares of Sprint common stock and each award of performance-based RSUs in respect of shares of Sprint common stock, in each case, that was outstanding immediately prior to the Effective Time was automatically adjusted by the Exchange Ratio (as defined in the Business Combination Agreement) and converted into an equity award of the same type covering shares of T-Mobile common stock, on the same terms and conditions (including, if applicable, any continuing vesting requirements (but excluding any performance-based vesting conditions)) under the applicable Sprint plan and award agreement in effect immediately prior to the Effective Time (the “Assumed Awards”).

The applicable amount of performance-based RSUs eligible for conversion was based on formulas and approximated 100 % of target.

Any accrued but unpaid dividend equivalents with respect to any such award of time-based RSUs or performance-based RSUs were assumed by T-Mobile at the Effective Time and became an obligation with respect to the applicable award of RSUs in respect of shares of T-Mobile common stock.

On April 22, 2020, we filed a Registration Statement on Form S-8 to register a total of 25,304,224 shares of common stock, representing those covered by the Sprint Corporation 1997 Long-Term Stock Incentive Program, the Sprint Corporation 2007 Omnibus Incentive Plan (the “Sprint 2007 Plan”) and the Sprint Corporation Amended and Restated 2015 Omnibus Incentive Plan (the “2015 Plan”) that T-Mobile assumed in connection with the closing of the Merger.

This included 7,043,843 shares of T-Mobile common stock issuable upon exercise or settlement of the Assumed Awards held by current directors, officers, employees and consultants of T-Mobile or its subsidiaries who were directors, officers, employees and consultants of Sprint or its subsidiaries immediately prior to the Effective Time, as well as (i) 12,420,945 shares of T-Mobile common stock that remain available for issuance under the 2015 Plan and (ii) 5,839,436 additional shares of T-Mobile common stock subject to awards granted under the 2015 Plan that may become available for issuance under the 2015 Plan if any awards under the 2015 Plan are forfeited, lapse unexercised or are settled in cash.

Index for Notes to the Consolidated Financial Statements

The following activity occurred under the Incentive Plans during the year ended December 31, 2023:

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7,755,943 136.67 0.9 1,244

Index for Notes to the Consolidated Financial Statements

Performance-Based Restricted Stock Units

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Performance award achievement adjustments (1)

579,306 113.20

Vested ( 1,384,895 ) 114.57

Forfeited ( 14,639 ) 159.06

Other adjustments ( 82,843 ) 118.00

Nonvested, December 31, 2023

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The number of shares issued under our ESPP was 1,771,475 , 2,079,086 and 2,189,542 for the years ended December 31, 2023, 2022 and 2021, respectively.

In June 2023, the stockholders of the Company approved an amendment to our ESPP plan, increasing the share reserve to 14,000,000 .

As of December 31, 2023, the number of securities remaining available for future sale and issuance under the ESPP was 13,291,951 .

Sprint’s ESPP was terminated prior to the Merger close and legacy Sprint employees were eligible to enroll in our ESPP on August 15, 2020.

Our ESPP provides for an annual increase in the aggregate number of shares of our common stock reserved for sale and authorized for issuance thereunder as of the first day of each fiscal year (beginning with fiscal year 2016) equal to the lesser of (i) 5,000,000 shares of our common stock, and (ii) the number of shares of T-Mobile common stock determined by the Compensation Committee of the Board of Directors of the Company (the “Compensation Committee”).

For fiscal years 2016 through 2019, the Compensation Committee determined that no such increase in shares of our common stock was necessary.

However, an additional 5,000,000 shares of our common stock were automatically added to the ESPP share reserve as of each of January 1, 2020 and January 1, 2021.

No additional shares of our common stock were automatically added as of January 1, 2022 and 2023.

Stock Options

Stock options outstanding relate to the Metro Communications, Inc.

2010 Equity Incentive Compensation Plan, the Amended and Restated Metro Communications, Inc.

2004 Equity Incentive Compensation Plan, the Layer3 TV, Inc.

2013 Stock Plan, the Sprint 2007 Plan and the Sprint 2015 Plan (collectively, the “Stock Option Plans”).

No stock option awards were granted during the year ended December 31, 2022.

Index for Notes to the Consolidated Financial Statements

The following activity occurred under the Stock Option Plans:

Shares Weighted-Average Exercise Price Weighted-Average Remaining Contractual Term (Years)

Outstanding at December 31, 2021

695,844 $ 53.01 3.3

Exercised ( 150,112 ) 45.96

Expired/canceled ( 1,260 ) 25.95

Outstanding at December 31, 2022

544,472 55.02 2.4

Exercisable at December 31, 2022

544,472 55.02 2.4

Weighted-average grant date fair value of stock options assumed through acquisition is based on the fair value on the date assumed.

Stock options exercised under the Stock Option Plans generated proceeds of approximately $ 7 million, $ 10 million and $ 48 million for the years ended December 31, 2022, 2021 and 2020, respectively.

The grant-date fair value of share-based incentive compensation awards attributable to post-combination services including restricted stock units and stock options, from the Merger was approximately $ 163 million.

Pension and Other Postretirement Benefits Plans

Upon the completion of our Merger with Sprint, we acquired the assets and assumed the liabilities associated with the Pension Plan as well as other postretirement employee benefit plans.

As of December 31, 2005, the Pension Plan was amended to freeze benefit plan accruals for the participants.

The plan assets acquired and obligations assumed were recognized at fair value on the Merger close date.

The objective for the investment portfolio of the Pension Plan is to achieve a long-term nominal rate of return, net of fees, that exceeds the Pension Plan's long-term expected rate of return on investments for funding purposes.

To meet this objective, our investment strategy is governed by an asset allocation policy, whereby a targeted allocation percentage is assigned to each asset class as follows:

To meet this objective, our investment strategy is governed by an asset allocation policy, whereby a targeted allocation percentage is assigned to each asset

Index for Notes to the Consolidated Financial Statements

class as follows:

48 % to equities;

35 % to fixed income investments;

11 % to real estate, infrastructure and private assets;

and 4 % to other investments including hedge funds.

and 17 % to real estate, infrastructure and private assets.

Actual allocations are allowed to deviate from target allocation percentages within a range for each asset class as defined in the investment policy.

1 unchanged sentence

The long-term expected rate of return on investments for funding purposes is 7 % for the year ended December 31, 2024.

The components of net expense recognized for the Pension Plan were as follows:

The components of net benefit recognized for the Pension Plan were as follows:

Year Ended December 31,

1 unchanged sentence

Interest on projected benefit obligations $ 86 $ 65

Amortization of actuarial gain ( 59 ) —

Expected return on pension plan assets ( 97 ) ( 71 )

Net pension expense $ ( 6 ) $ 5

The net expense associated with the Pension Plan is included in Other expense, net on our Consolidated Statements of Comprehensive Income.

Net pension benefit $ ( 70 ) $ ( 6 )

The net benefit associated with the Pension Plan is included in Other income (expense), net on our Consolidated Statements of Comprehensive Income.

Investments of the Pension Plan are measured at fair value on a recurring basis, which is determined using quoted market prices or estimated fair values.

As of December 31, 2022, 17 % of the investment portfolio was valued at quoted prices in active markets for identical assets, 79 % was valued using quoted prices for similar assets in active or inactive markets, or other observable inputs, and 4 % was valued using unobservable inputs that are supported by little or no market activity.

As of December 31, 2021, 14 % of the investment portfolio was valued at quoted prices in active markets for identical assets, 81 % was valued using quoted prices for similar assets in active or inactive markets, or other observable inputs, and 5 % was valued using unobservable inputs that are supported by little or no market activity, the majority of which used the net asset value per share (or its equivalent) as a practical expedient to measure the fair value.

As of both December 31, 2023 and 2022, 17 % of the investment portfolio was valued at quoted prices in active markets for identical assets, 79 % was valued using quoted prices for similar assets in active or inactive markets, or other observable inputs, and 4 % was valued using unobservable inputs that are supported by little or no market activity, the majority of which used the net asset value per share (or its equivalent) as a practical expedient to measure the fair value.

The fair values of our Pension Plan assets and certain other postretirement benefit plan assets in aggregate were $ 1.3 billion and $ 1.2 billion as of December 31, 2023 and 2022, respectively.

Certain investments, as a practical expedient, are reported at estimated fair value, utilizing net asset values of $ 10 million as of December 31, 2023, which are part of our Plan assets.

Our accumulated benefit obligations in aggregate were $ 1.6 billion and $ 2.2 billion as of December 31, 2022 and 2021,

Index for Notes to the Consolidated Financial Statements

respectively.

Our accumulated benefit obligations in aggregate were $ 1.6 billion as of both December 31, 2023 and 2022.

As a result, the plans were underfunded by approximately $ 350 million and $ 342 million as of December 31, 2023 and 2022, respectively, and were recorded in Other long-term liabilities on our Consolidated Balance Sheets.

2 unchanged sentences

We expect to make contributions to the Plan of $ 52 million through the year ending December 31, 2024.

Future benefits expected to be paid are approximately $ 101 million for the year ending December 31, 2023, $ 210 million in total for the years ending December 31, 2024 and 2025, $ 219 million in total for the years ending December 31, 2026 and 2027, and $ 567 million in total thereafter.

Future benefits expected to be paid are approximately $ 104 million for the 12-month period ending December 31, 2024, $ 215 million in total for both of the 12-month periods ending December 31, 2025 and 2026, $ 223 million in total for both of the 12-month periods ending December 31, 2027 and 2028, and $ 571 million in total thereafter.

Employee Retirement Savings Plan

3 unchanged sentences

Employer matching contributions were $ 171 million, $ 175 million and $ 190 million for the years ended December 31, 2023, 2022 and 2021, respectively.

Note 12 – Discontinued Operations

On July 26, 2019, we entered into an Asset Purchase Agreement with Sprint and DISH.

On June 17, 2020, T-Mobile, Sprint and DISH entered into the First Amendment.

Pursuant to the First Amendment to the Asset Purchase Agreement, T-Mobile, Sprint and DISH agreed to proceed with the closing of the Prepaid Transaction, in accordance with the Asset Purchase Agreement, on July 1, 2020, subject to the terms and conditions of the Asset Purchase Agreement and the terms and conditions of the Consent Decree.

On July 1, 2020, pursuant to the Asset Purchase Agreement, upon the terms and subject to the conditions thereof, we completed the Prepaid Transaction.

Upon closing of the Prepaid Transaction, we received $ 1.4 billion from DISH for the Prepaid Business, subject to a working capital adjustment.

The close of the Prepaid Transaction did not have a significant impact on our Consolidated Statements of Comprehensive Income.

The results of the Prepaid Business include revenues and expenses directly attributable to the operations disposed.

Corporate and administrative expenses, including Interest expense, net, not directly attributable to the operations were not allocated to the Prepaid Business.

The results of the Prepaid Business from April 1, 2020, through December 31, 2020, are presented in Income from discontinued operations, net of tax on our Consolidated Statements of Comprehensive Income.

There was no income from discontinued operations for the years ended December 31, 2022 or 2021.

The components of discontinued operations from the Merger close date of April 1, 2020, through December 31, 2020, were as follows:

(in millions) Year Ended

December 31, 2020

Major classes of line items constituting pretax income from discontinued operations

Prepaid revenues $ 973

Roaming and other service revenues 27

Total service revenues 1,000

Equipment revenues 270

Total revenues 1,270

Cost of services 25

Cost of equipment sales 499

Selling, general and administrative 314

Total operating expenses 838

Pretax income from discontinued operations 432

Income tax expense ( 112 )

Income from discontinued operations $ 320

Index for Notes to the Consolidated Financial Statements

Net cash provided by operating activities from the Prepaid Business included in the Consolidated Statements of Cash Flows for the year ended December 31, 2020, were $ 611 million, all of which relates to the operations of the Prepaid Business during the three months ended June 30, 2020.

There were no cash flows from investing or financing activities related to the Prepaid Business for the year ended December 31, 2020.

Continuing Involvement

Upon the closing of the Prepaid Transaction, we and DISH entered into (i) a DISH License Purchase Agreement pursuant to which (a) 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 certain additional closing conditions, following an application for FCC approval to be filed three years following the closing of the Merger and (b) we will have the option to lease back from DISH, as needed, a portion of the spectrum sold for an additional two years following the closing of the spectrum sale transaction, (ii) a Transition Services Agreement providing for our provisioning of transition services to DISH in connection with the Prepaid Business for a period of up to three years following the closing of the Prepaid Transaction, (iii) a Master Network Services Agreement providing for the provisioning of network services to customers of the Prepaid Business for a period of up to seven years following the closing of the Prepaid Transaction, and (iv) an Option to Acquire Tower and Retail Assets, offering DISH the option to acquire certain decommissioned towers and retail locations from us, subject to obtaining all necessary third-party consents, for a period of up to five years following the closing of the Prepaid Transaction.

In the event DISH breaches the DISH License Purchase Agreement or fails to deliver the purchase price following the satisfaction or waiver of all closing conditions, DISH’s sole liability is to pay us a fee of approximately $ 72 million.

Additionally, if DISH does not exercise the option to purchase the 800 MHz spectrum licenses, we have an obligation to offer the licenses for sale through an auction.

If the specified minimum price of $ 3.6 billion was not met in the auction, we would retain the licenses.

As it is not probable that the sale of 800 MHz spectrum licenses will close within one year, the criteria for presentation as an asset held for sale is not met.

Cash flows associated with the Master Network Services Agreement and Transition Services Agreement are included in Net cash provided by operating activities on our Consolidated Statements of Cash Flows.

Note 12 – Income Taxes

5 unchanged sentences

Income before income taxes $ 10,999 $ 3,146 $ 3,351

Index for Notes to the Consolidated Financial Statements

Income tax expense is summarized as follows:

12 unchanged sentences

Total income tax expense $ ( 2,682 ) $ ( 556 ) $ ( 327 )

Index for Notes to the Consolidated Financial Statements

The reconciliation between the U.S.

35 unchanged sentences

Deferred tax liabilities $ 13,458 $ 10,884

Index for Notes to the Consolidated Financial Statements

As of December 31, 2023, we have tax effected federal net operating loss (“NOL”) carryforwards of $ 5.0 billion, state NOL carryforwards of $ 1.8 billion and foreign NOL carryforwards of $ 22 million, expiring through 2043.

Federal and certain state NOLs generated in and after 2018 do not expire.

Federal and certain state NOLs of $ 4.9 billion generated in and after 2018 do not expire.

As of December 31, 2023, our tax effected federal and state NOL carryforwards for financial reporting purposes were approximately $ 199 million and $ 636 million, respectively, less than our NOL carryforwards for federal and state income tax purposes, due to unrecognized tax benefits of the same amount.

1 unchanged sentence

The unrecognized tax benefit amounts exclude offsetting tax effects of $ 168 million in other jurisdictions.

As of December 31, 2022, we have research and development, foreign tax and other general business credit carryforwards with a combined value of $ 704 million for federal income tax purposes, an immaterial amount of which begins to expire in 2023.

As of December 31, 2023, we have research and development, corporate alternative minimum tax, foreign tax and other general business credit carryforwards with a combined value of $ 803 million for federal income tax purposes, an immaterial amount of which begins to expire in 2031.

As of December 31, 2023, 2022 and 2021, our valuation allowance was $ 306 million, $ 375 million and $ 435 million, respectively.

The change from December 31, 2022 to December 31, 2023 primarily related to a reduction in the valuation allowance against deferred tax assets in certain state jurisdictions resulting from expiration of the related state tax attributes.

The change from December 31, 2021 to December 31, 2022 primarily related to a reduction in the valuation allowance against deferred tax assets in certain foreign jurisdictions resulting from legal entity reorganizations.

The change from December 31, 2020 to December 31, 2021 primarily related to a reduction in the valuation allowance against deferred tax

Index for Notes to the Consolidated Financial Statements

assets in certain state jurisdictions resulting from legal entity reorganizations of legacy Sprint entities.

It is possible that our valuation allowance may change within the next 12 months.

We file income tax returns in the U.S.

16 unchanged sentences

Unrecognized tax benefits, end of year $ 1,477 $ 1,254 $ 1,217

As of December 31, 2022, 2021 and 2020, we had $ 962 million, $ 932 million and $ 857 million, respectively, in unrecognized tax benefits that, if recognized, would affect our annual effective tax rate.

As of December 31, 2023, 2022 and 2021, we had $ 1.3 billion, $ 962 million and $ 932 million, respectively, in unrecognized tax benefits that, if recognized, would affect our annual effective tax rate.

Penalties and interest on income tax assessments are included in Selling, general and administrative and Interest expense, respectively, on our Consolidated Statements of Comprehensive Income.

1 unchanged sentence

It is possible that the amount of unrecognized tax benefits related to our uncertain tax positions may change within the next 12 months.

Note 14 – SoftBank Equity Transaction

On June 22, 2020, we entered into a Master Framework Agreement (the “Master Framework Agreement”) by and among the Company, SoftBank, SoftBank Group Capital Ltd, a wholly owned subsidiary of SoftBank (“SBGC”), Delaware Project 4 L.L.C., a wholly owned subsidiary of SoftBank, Delaware Project 6 L.L.C., a wholly owned subsidiary of SoftBank, Claure Mobile LLC (“CM LLC”), DT, and T-Mobile Agent LLC, a wholly owned subsidiary of the Company.

In connection with the Master Framework Agreement, DT waived the restriction on the transfer under its Proxy, Lock-Up and ROFR Agreement, dated April 1, 2020, with SoftBank (the “SoftBank Proxy Agreement”) with respect to approximately 198 million shares of our common stock held by SoftBank (the “Released Shares”).

Under the terms of the Master Framework Agreement and the agreements contemplated thereby, SBGC sold the Released Shares to us and we entered into several transactions to sell an equivalent number of our common shares (the “SoftBank Monetization”).

In 2020, we settled our involvement with all such transactions with no net impact to our Consolidated Statements of Comprehensive Income and we received a payment from SoftBank for $ 304 million for our role in facilitating the SoftBank Monetization.

The payment received from SoftBank, net of tax, of $ 230 million was recorded as Additional paid-in capital on our Consolidated Balance Sheets and is presented as a reduction of Repurchases of common stock in Net cash (used in) provided by financing activities on our Consolidated Statements of Cash Flows .

Ownership Following the SoftBank Monetization

The SoftBank Proxy Agreement remains in effect with respect to the remaining shares of our common stock held by SoftBank and any SoftBank Specified Shares Amount that may be issued to SoftBank.

In addition, on June 22, 2020, DT, CM LLC, and Marcelo Claure, a member of our board of directors, entered into a Proxy, Lock-Up and ROFR Agreement (the “Claure Proxy Agreement,” together with the SoftBank Proxy Agreement, the “Proxy Agreements”), pursuant to which any shares of our common stock acquired after June 22, 2020 by Mr.

Claure or CM LLC, an entity controlled by Mr.

Claure, other than shares acquired as a result of Mr.

Claure’s role as a director or officer of the Company, will be voted in the manner as directed by DT.

Index for Notes to the Consolidated Financial Statements

As of December 31, 2022, DT and SoftBank held, directly or indirectly, approximately 49.0 % and 3.2 %, respectively, of the outstanding T-Mobile common stock, with the remaining approximately 47.8 % of the outstanding T-Mobile common stock held by other stockholders.

Accordingly, as a result of the Proxy Agreements, DT has voting control as of December 31, 2022 over approximately 52.7 % of the outstanding T-Mobile common stock.

Note 15 – Repurchases of Common Stock

Note 13 – Stockholder Return Programs

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.

The specific timing, price and size of repurchases will depend on prevailing stock prices, general economic and market conditions, and other considerations.

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 Consolidated Balance Sheets.

During the year ended December 31, 2022, we repurchased 21,361,409 shares of our common stock at an average price per share of $ 140.44 for a total purchase price of $ 3.0 billion, all of which were purchased under the 2022 Stock Repurchase Program.

All shares purchased during the year ended December 31, 2022, were purchased at market price.

As of December 31, 2022, we had up to $ 11.0 billion remaining under the 2022 Stock Repurchase Program.

Subsequent to December 31, 2022, from January 1, 2023 through February 10, 2023, we repurchased 14,676,718 shares of our common stock at an average price per share of $ 145.70 for a total purchase price of $ 2.1 billion.

As of February 10, 2023, we had up to $ 8.9 billion remaining under the 2022 Stock Repurchase Program .

During the nine months ended September 30, 2023, we repurchased 77,460,937 shares of our common stock at an average price per share of $ 141.57 for a total purchase price of $ 11.0 billion under the 2022 Stock Repurchase Program.

All shares purchased during the nine months ended September 30, 2023, were purchased at market price.

2023-2024 Stockholder Return Program

On September 6, 2023, our Board of Directors authorized our 2023-2024 Stockholder Return Program of up to $ 19.0 billion that will run from October 1, 2023, through December 31, 2024.

The 2023-2024 Stockholder Return Program consists of

Index for Notes to the Consolidated Financial Statements

additional repurchases of shares of our common stock and the payment of cash dividends.

The amount available under the 2023-2024 Stockholder Return Program for share repurchases will be reduced by the amount of any cash dividends declared by us.

Under the 2023-2024 Stockholder Return Program, share repurchases can be made from time to time using a variety of methods, which may include open market purchases, Rule 10b5-1 plans, accelerated share repurchases, privately negotiated transactions or otherwise, all in accordance with the rules of the Securities and Exchange Commission and other applicable legal requirements.

The specific timing and amount of any share repurchases, and the specific timing and amount of any dividend payments, under the 2023-2024 Stockholder Return Program will depend on prevailing share prices, general economic and market conditions, Company performance, and other considerations.

In addition, the specific timing and amount of any dividend payments are subject to being declared on future dates by our Board of Directors in its sole discretion.

The 2023-2024 Stockholder Return Program does not obligate us to acquire any particular amount of common stock or to declare and pay any particular amount of dividends, and the 2023-2024 Stockholder Return Program may be suspended or discontinued at any time at our discretion.

On September 25, 2023, our Board of Directors declared a cash dividend of $ 0.65 per share on our issued and outstanding common stock, which was paid on December 15, 2023, to stockholders of record as of the close of business on December 1, 2023.

During the year ended December 31, 2023, we paid an aggregate of $ 747 million in cash dividends to our stockholders, which was presented within Net cash provided by (used in) financing activities on our Consolidated Statements of Cash Flows, of which $ 393 million was paid to DT.

During the year ended December 31, 2023, we repurchased 15,464,107 shares of our common stock at an average price per share of $ 144.95 for a total purchase price of $ 2.2 billion under the 2023-2024 Stockholder Return Program, all of which were repurchased during the three months ended December 31, 2023.

All shares repurchased during the three months ended December 31, 2023, were purchased at market price.

As of December 31, 2023, we had up to $ 16.0 billion remaining under the 2023-2024 Stockholder Return Program.

Subsequent to December 31, 2023, on January 24, 2024, our Board of Directors declared a cash dividend of $ 0.65 per share on our issued and outstanding common stock, which is payable on March 14, 2024, to stockholders of record as of the close of business on March 1, 2024.

Subsequent to December 31, 2023, from January 1, 2024, through January 31, 2024, we repurchased 9,024,185 shares of our common stock at an average price per share of $ 162.98 for a total purchase price of $ 1.5 billion.

As of January 31, 2024, we had up to $ 14.5 billion remaining under the 2023-2024 Stockholder Return Program, less the amount to be paid pursuant to the dividends declared in the first quarter of 2024.

Note 14 – 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 Wireline Sale Agreement, pursuant to which the Buyer will acquire the Wireline Business.

The Wireline Sale 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.

The parties have agreed to a $ 1 purchase price in consideration for the Purchased Interests, subject to customary adjustments set forth in the Wireline Sale 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 Wireline Sale Agreement, the Wireline Transaction is expected to close mid-year 2023.

As a result of the Wireline Sale Agreement and related anticipated Wireline Transaction, we concluded that the Wireline Business met the held for sale criteria upon entering into the Wireline Sale 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 Consolidated Balance Sheets as of December 31, 2022.

The Wireline Sale Agreement provided that, upon the terms and conditions set forth therein, the Buyer agreed to 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.

On May 1, 2023, pursuant to the Wireline Sale Agreement, upon the terms and subject to the conditions thereof, we completed the Wireline Transaction.

Under the terms of the Wireline Sale Agreement, the parties agreed to a $ 1 purchase price in consideration for the Purchased Interests, subject to customary adjustments, as well as payments to the Buyer pursuant to an IP transit services agreement totaling $ 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 Buyer paid the Company $ 61 million at Closing.

The Closing of the Wireline Transaction did not have a significant impact on the (Gain) loss on disposal group held for sale on our Consolidated Statements of Comprehensive Income.

The present value of the $ 700 million liability for fees payable for IP transit services was recognized and treated as part of the consideration exchanged with the Buyer to complete the disposal transaction, as there is a remote likelihood we will use any more than a de minimis amount of the services under the IP transit services agreement.

Therefore, we concluded the cash payment obligations under the IP transit services agreement were part of the consideration paid to the Buyer to facilitate the sale of the Wireline Business, and therefore, included in measuring the fair value less costs to sell of the Wireline Business disposal

Index for Notes to the Consolidated Financial Statements

The components of assets and liabilities held for sale presented within Other current assets and Other current liabilities, respectively, on our Consolidated Balance Sheets as of December 31, 2022, were as follows:

(in millions) December 31,

Cash and cash equivalents $ 27

Accounts receivable, net 34

Prepaid expenses 2

Other current assets 3

Property and equipment, net 505

Operating lease right-of-use assets 125

Other intangible assets, net 7

Other assets 8

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

Assets held for sale $ 334

Accounts payable and accrued liabilities $ 63

Deferred revenue 4

Short-term operating lease liabilities 60

Operating lease liabilities 250

Other long-term liabilities 38

Liabilities held for sale 415

Liabilities held for sale, net $ ( 81 )

(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 year ended December 31, 2022, which is included within Loss on disposal group held for sale on our Consolidated Statements of Comprehensive Income.

The components of the Loss on disposal group held for sale on our Consolidated Statements of Comprehensive Income for the year ended December 31, 2022, were as follows:

(in millions) Year Ended

December 31, 2022

Write-down of Wireline Business net assets $ 305

Accrual of total 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 65

Loss on disposal group held for sale $ 1,087

(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 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 $ 117 million and $ 531 million of this liability, including accrued interest, is presented within Other current liabilities and Other long-term liabilities, respectively, on our Consolidated Balance Sheets as of December 31, 2022, in accordance with the expected timing of the related payments.

Approximately $ 30 million and $ 35 million for contractual and other payments associated with the Wireline Transaction are presented within Other current liabilities and Other long-term liabilities, respectively, on our Consolidated Balance Sheets as of December 31, 2022, in accordance with the expected timing of the related payments.

As of December 31, 2023, $ 183 million and $ 255 million of this liability, including accrued interest, is presented within Other current liabilities and Other long-term liabilities, respectively, on our Consolidated Balance Sheets in accordance with the expected timing of the related payments.

We recognized a pre-tax gain of $ 25 million during the year ended December 31, 2023, and a pre-tax loss of $ 1.1 billion during the year ended December 31, 2022, which are included within (Gain) loss on disposal group held for sale on our Consolidated Statements of Comprehensive Income.

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.

Index for Notes to the Consolidated Financial Statements

Other Wireline Asset Sales

Separate from the Wireline Transaction, we recognized a gain on disposal of $ 121 million during the year ended December 31, 2022, all of which relates to the sale of certain IP addresses held by the Wireline Business to other third parties during the three months ended September 30, 2022.

The gain on disposal is included as a reduction to Selling, general and administrative expenses on our Consolidated Statements of Comprehensive Income.

The gain on disposal is included as a reduction to Selling, general and administrative expense on our Consolidated Statements of Comprehensive Income.

Wireline Impairment

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

Prior to the closing of the Wireline Transaction, we provided 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.

extensions thereof).

The legacy Sprint Wireline network was 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.

1 unchanged sentence

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.

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 supported 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.

3 unchanged sentences

The expense is included within Impairment Expense on our Consolidated Statements of Comprehensive Income.

There was no impairment expense recognized for the year ended December 31, 2023.

Index for Notes to the Consolidated Financial Statements

3 unchanged sentences

(in millions, except shares and per share amounts) 2023 2022 2021

Income from continuing operations $ 2,590 $ 3,024 $ 2,744

Income from discontinued operations, net of tax — — 320

Net income $ 8,317 $ 2,590 $ 3,024

1 unchanged sentence

Effect of dilutive securities:

Outstanding stock options and unvested stock awards 5,612,835 7,614,938 10,543,102

Outstanding stock options, unvested stock awards and SoftBank contingent consideration (2)

15,164,702 5,612,835 7,614,938

Weighted-average shares outstanding – diluted 1,200,286,264 1,255,376,769 1,254,769,926

Basic earnings per share:

Continuing operations $ 2.07 $ 2.42 $ 2.40

Discontinued operations — — 0.28

Earnings per share – basic $ 7.02 $ 2.07 $ 2.42

Diluted earnings per share:

Continuing operations $ 2.06 $ 2.41 $ 2.37

Discontinued operations — — 0.28

Earnings per share – diluted $ 6.93 $ 2.06 $ 2.41

3 unchanged sentences

— 48,751,557 48,751,557

(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 DT.

(1) Represents the weighted-average number of shares (“SoftBank Specified Shares”) that were contingently issuable from the Merger date of April 1, 2020, pursuant to a letter agreement dated February 20, 2020, between T-Mobile, SoftBank and DT (the “ Letter Agreement”).

(2) During 2023, the SoftBank Specified Shares were issued and included in our calculations of basic and diluted weighted-average shares outstanding as further described below.

As of December 31, 2023, we had authorized 100 million shares of preferred stock, with a par value of $ 0.00001 per share.

1 unchanged sentence

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.

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

The issuance of the SoftBank Specified Shares was contingent on the trailing 45 -trading day volume-weighted average (“VWAP”) per share of T-Mobile common stock on the NASDAQ Global Select Market being equal to or greater than $ 150.00 (the “Threshold Price”), at any time during the period commencing on April 1, 2022, and ending on December 31, 2025 (the “Measurement Period”).

In accordance with the terms of the Letter Agreement, the Threshold Price was subject to downward adjustment by the per share amount of any cash dividends or other cash distributions declared or paid on our common stock during the Measurement Period.

As of the close of trading on December 22, 2023, the 45 -trading day VWAP exceeded $ 149.35 , the then-current Threshold Price, and the Company delivered the SoftBank Specified Shares to SoftBank in accordance with the Letter Agreement on December 28, 2023, by reissuing Company treasury shares.

Upon reissuance of treasury shares, the Company recorded a reclassification from Treasury shares to Additional paid-in capital of $ 6.9 billion calculated based on the cost of treasury shares reissued.

The SoftBank Specified Shares issued are included in the calculation of basic and diluted weighted-average shares outstanding from the date the contingency associated with the issuance of the SoftBank Specified Shares was resolved and the beginning of the Company’s fourth quarter of 2023, respectively.

Note 16 – Leases

We are a lessee for non-cancelable operating and financing leases for cell sites, switch sites, retail stores, network equipment and office facilities with contractual terms that generally extend through 2035.

Additionally, we lease dark fiber through non-cancelable operating leases with contractual terms that generally extend through 2040.

The majority of cell site leases have a non-cancelable term of five to 15 years with several renewal options that can extend the lease term for five to 50 years.

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The financing leases do not have renewal options and contain a bargain purchase option at the end of the lease.

On January 3, 2022, we entered into the Crown Agreement with CCI that modified the terms of our leased towers from CCI.

The Crown Agreement modifies the monthly rental payments we will pay for sites currently leased by us, extends the non-cancellable lease term for the majority of our sites through December 2033 and will allow us the flexibility to facilitate our network integration and decommissioning activities through new site builds and termination of duplicate tower locations.

The initial non-cancellable term is through December 31, 2033, followed by three optional five-year renewals.

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

Index for Notes to the Consolidated Financial Statements

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Leased wireless devices, net $ 115 $ 269

For equipment revenues from the lease of mobile communication devices, see Note 10 – Revenue from Contracts with Customers .

Index for Notes to the Consolidated Financial Statements

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Wireline Impairment

See Note 14 - Wireline for further information.

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

Spectrum Leases

On March 9, 2023, we entered into the Merger and Purchase Agreement for the acquisition of 100 % of the outstanding equity of Ka’ena, for a maximum purchase price of $ 1.35 billion to be paid out 39 % in cash and 61 % in shares of T-Mobile common stock.

The agreement remains subject to regulatory approval, and the estimated purchase price is excluded from our reported purchase commitments above.

See Note 2 – Business Combinations for additional details.

We lease spectrum from various parties.

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Our spectrum lease and service credit commitments, including renewal periods, are approximately $ 303 million for the 12-month period ending December 31, 2024, $ 612 million in total for both of the 12-month periods ending December 31, 2025 and 2026, $ 682 million in total for both of the 12-month periods ending December 31, 2027 and 2028, and $ 4.3 billion in total thereafter.

On August 8, 2022, we entered into License Purchase Agreements to acquire spectrum in the 600 MHz band from Channel 51

License Co LLC and LB License Co, LLC in exchange for total cash consideration of $ 3.5 billion.

The agreements remain subject to regulatory approval and are excluded from our reported commitments above.

See Note 6 – Go odwill, Spectrum License Transactions and Other In ta n gible Assets for additional details.

On August 8, 2022, we entered into License Purchase Agreements to acquire spectrum in the 600 MHz band from Channel 51 License Co LLC and LB License Co, LLC in exchange for total cash consideration of $ 3.5 billion.

The licenses are currently being utilized by us through exclusive leasing arrangements with the Sellers.

Subsequently, on August 25, 2023, we and the Sellers entered into Amendments No.

1 to the Amended and Restated License Purchase Agreements, which deferred the closings of certain additional licenses in Chicago and Dallas into the second closing

Index for Notes to the Consolidated Financial Statements

Together, the licenses with closings deferred into the second closing tranche represent approximately $ 1.1 billion of the aggregate $ 3.5 billion cash consideration.

The FCC approved the purchase of the first tranche, totaling $ 2.4 billion, on December 29, 2023, and we expect the closing of the first tranche to occur in the second quarter of 2024.

The closing of the second tranche remains subject to regulatory approval.

The agreement is excluded from our reported purchase commitments above.

See Note 6 – Goodwill, Spectrum License Transactions and Other Intangible Assets for additional details.

On September 12, 2023, we entered into a License Purchase Agreement with Comcast pursuant to which we will acquire spectrum in the 600 MHz band from Comcast in exchange for total cash consideration of between $ 1.2 billion and $ 3.3 billion, subject to an application for FCC approval.

The licenses are subject to an exclusive leasing arrangement between us and Comcast entered into contemporaneously with the License Purchase Agreement.

The agreement remains subject to regulatory approval and is excluded from our reported purchase commitments above.

See Note 6 – Goodwill, Spectrum License Transactions and Other Intangible Assets for additional details.

Merger Commitments

In connection with the regulatory proceedings and approvals of the Merger 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”), we have commitments and other obligations to various state and federal agencies and certain nongovernmental organizations, including pursuant to the Consent Decree agreed to by us, DT, Sprint, SoftBank and DISH and entered by the U.S.

District Court for the District of Columbia, and the FCC’s memorandum opinion and order approving our applications for approval of the Merger.

These commitments and obligations include, among other things, extensive 5G network build-out commitments, obligations to deliver high-speed wireless services to the vast majority of Americans, including Americans residing in rural areas, and the marketing of an in-home broadband product where spectrum capacity is available.

Other commitments relate to national security, pricing, service, employment and support of diversity initiatives.

Many of the commitments specify time frames for compliance and reporting.

Failure to fulfill our obligations and commitments in a timely manner could result in substantial fines, penalties, or other legal and administrative actions.

Contingencies and Litigation

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

The accruals are reflected on our consolidated

Index for Notes to the Consolidated Financial Statements

financial statements, but they are not considered to be, individually or in the aggregate, material.

The accruals are reflected on our 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.

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We maintained the accrual as of December 31, 2023, and that accrual was included in Accounts payable and accrued liabilities on our Consolidated Balance Sheets.

Index for Notes to the Consolidated Financial Statements

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

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We note that pursuant to Amendment No.

2, dated as of February 20, 2020, to the Business Combination Agreement, SoftBank agreed to indemnify us against certain specified matters and losses, including those relating to the Lifeline matters described above.

Resolution of these matters could require making additional reimbursements and paying additional fines and penalties, which we do not expect to have a significant impact on our financial results.

2, dated as of February 20, 2020, to the Business Combination Agreement, dated as of April 29, 2018, by and among the Company, Sprint and the other parties named therein, SoftBank agreed to indemnify us against certain specified matters and losses, including those relating to the Lifeline matters described above.

Resolution of these matters could require us to make additional reimbursements and pay additional fines and penalties, which we do not expect to have a significant impact on our financial results.

We expect that any additional liabilities related to these indemnified matters would be indemnified and reimbursed by SoftBank.

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We are unable to predict the potential outcome of these claims.

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 cybersecurity issue involving unauthorized access to T-Mobile’s systems (the “August 2021 cyberattack”).

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Our forensic investigation is complete, and we believe we have a full view of the data compromised.

Index for Notes to the Consolidated Financial Statements

As a result of the August 2021 cyberattack, we have become subject to numerous lawsuits, including mass arbitration claims and multiple class action lawsuits that have been filed in numerous jurisdictions seeking, among other things, unspecified monetary damages, costs and attorneys’ fees arising out of the August 2021 cyberattack.

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On July 22, 2022, we entered into an agreement to settle the lawsuit.

On July 26, 2022, we received preliminary approval of the proposed settlement, which remains subject to final court approval.

The court conducted a final approval hearing on January 20, 2023, and we await a ruling from the court.

If approved by the court, under the terms of the proposed settlement, we would pay an aggregate of $ 350 million to fund claims submitted by class members, the legal fees of plaintiffs’ counsel and the costs of administering the settlement.

We would also commit to an aggregate incremental spend of $ 150 million for data security and related technology in 2022 and 2023.

We anticipate that, upon court approval, the settlement will provide a full release of all claims arising out of the August 2021 cyberattack by class members, who do not opt out, against all defendants, including us, our subsidiaries and affiliates, and our directors and officers.

On June 29, 2023, the Court issued an order granting final approval of the settlement, which is subject to potential appeals.

Under the terms of the settlement, we would pay an aggregate of $ 350 million to fund claims submitted by class members, the legal fees of plaintiffs’ counsel and the costs of administering the settlement.

We also committed to an aggregate incremental spend of $ 150 million for data security and related technology in 2022 and 2023.

We previously paid $ 35 million for claims administration purposes.

On July 31, 2023, a class member filed an appeal to the final approval order challenging the Court’s award of attorneys’ fees to class counsel.

We expect the remaining portion of the $ 350 million settlement payment to fund claims to be made once that appeal is resolved.

We anticipate that, upon exhaustion of any appeals, the settlement will provide a full release of all claims arising out of the August 2021 cyberattack by class members who do not opt out, against all defendants, including us, our subsidiaries and affiliates, and our directors and officers.

The settlement contains no admission of liability, wrongdoing or responsibility by any of the defendants.

We have the right to terminate the settlement agreement under certain conditions.

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

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

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

During the year ended December 31, 2022, we recognized $ 100 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 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.

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

In connection with the proposed class action settlement and the separate settlements, we recorded a total pre-tax charge of approximately $ 400 million in the second quarter of 2022.

During the years ended December 31, 2023 and 2022, we recognized $ 50 million and $ 100 million, respectively, 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 expense on our Consolidated Statements of Comprehensive Income.

The ultimate resolution of the class action depends on the number of plaintiffs who opt-out of the proposed settlement and whether the proposed settlement will be appealed.

Index for Notes to the Consolidated Financial Statements

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

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

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

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

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

We are cooperating fully with these agencies and regulators and working with them to resolve these matters.

While we hope to resolve them in the near term, we cannot predict the timing or outcome of any of these matters, or whether we may be subject to further regulatory inquiries, investigations, or enforcement actions.

In light of the inherent uncertainties involved in such matters and based on the information currently available to us, in addition to the previously recorded pre-tax charge of approximately $ 400 million noted above, we believe it is reasonably possible that we could incur additional losses associated with these proceedings and inquiries, and we will continue to evaluate information as it becomes known and will record an estimate for losses at the time or times when it is both probable that a loss has been incurred and the amount of the loss is reasonably estimable.

Ongoing legal and other costs related to these proceedings and inquiries, as well as any potential future actions, may be substantial, and losses associated with any adverse judgments, settlements, penalties or other resolutions of such proceedings and inquiries could be material to our business, reputation, financial condition, cash flows and operating results.

In 2022, we received $ 333 million in gross settlements of certain patent litigation assumed in the Merger.

We recognized these settlements, net of legal fees, as a reduction to Selling, general and administrative expenses on our Consolidated Statements of Comprehensive Income during the year ended December 31, 2022.

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

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Plaintiffs seek injunctive relief and trebled monetary damages on behalf of a purported class of AT&T and Verizon customers who plaintiffs allege paid artificially inflated prices due to the Merger.

We intend to vigorously defend this lawsuit, but we are unable to predict the potential outcome.

On January 5, 2023, we identified that a bad actor was obtaining data through a single API without authorization.

Based on our investigation to date, the impacted API is only able to provide a limited set of customer account data, including name, billing address, email, phone number, date of birth, T-Mobile account number and information such as the number of lines on the account and plan features.

The result from our investigation to date indicates that the bad actor(s) obtained data from this API

Index for Notes to the Consolidated Financial Statements

for approximately 37 million current postpaid and prepaid customer accounts, though many of these accounts did not include the full data set.

We are vigorously defending this lawsuit, but we are unable to predict the potential outcome.

On January 5, 2023, we identified that a bad actor was obtaining data through a single Application Programming Interface (“API”) without authorization.

Based on our investigation, the impacted API is only able to provide a limited set of customer account data, including name, billing address, email, phone number, date of birth, T-Mobile account number and information such as the number of lines on the account and plan features.

The result from our investigation indicates that the bad actor(s) obtained data from this API for approximately 37 million current postpaid and prepaid customer accounts, though many of these accounts did not include the full data set.

We believe that the bad actor first retrieved data through the impacted API starting on or around November 25, 2022.

We continue to investigate the incident and have notified individuals whose information was impacted consistent with state and federal requirements.

In connection with the January 2023 cyberattack, we have received notices of consumer class actions and regulatory inquires, to which we will respond to in due course and may incur significant expenses.

We have notified individuals whose information was impacted consistent with state and federal requirements.

In connection with the January 2023 cyberattack, we became subject to consumer class actions and regulatory inquires, to which we will continue to respond in due course and may incur significant expenses.

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

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Note 18 – Restructuring Costs

Upon close of the Merger, we began implementing restructuring initiatives to realize cost efficiencies and reduce redundancies.

The major activities associated with the Merger restructuring initiatives to date include contract termination costs associated with the rationalization of retail stores, distribution channels, duplicative network and backhaul services and other agreements, severance costs associated with the integration of redundant processes and functions and the decommissioning of certain small cell sites and distributed antenna systems to achieve Merger synergies in network costs.

Merger Restructuring Initiatives

Upon close of the Merger in April 2020, we began implementing restructuring initiatives to realize cost efficiencies and reduce redundancies.

The major activities associated with the Merger restructuring initiatives included contract termination costs associated with the rationalization of retail stores, distribution channels, duplicative network and backhaul services and other agreements, severance costs associated with the integration of redundant processes and functions and the decommissioning of certain small cell sites and distributed antenna systems to achieve Merger synergies in network costs.

Index for Notes to the Consolidated Financial Statements

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

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December 31, 2021 Year Ended

December 31, 2022 Year Ended

December 31, 2023 Incurred to Date

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Total restructuring plan expenses $ 215 $ 1,196 $ 337 $ 2,808

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

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

Incremental expenses associated with accelerating amortization of the right-of-use assets on lease contracts were $ 1.7 billion, $ 873 million and $ 153 million for the years ended December 31, 2022, 2021 and 2020, respectively, and are included in Costs of services and Selling, general and administrative on our Consolidated Statements of Comprehensive Income.

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

Our Merger restructuring initiatives also included 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 terminated leases and leases for which we have recognized accelerated lease expense were $ 390 million, $ 1.7 billion and $ 873 million for the years ended December 31, 2023, 2022 and 2021, respectively, and are included in Costs of services and Selling, general and administrative expenses on our Consolidated Statements of Comprehensive Income.

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

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

December 31, 2022

(in millions) December 31,

2022 Expenses Incurred Cash Payments Adjustments for Non-Cash Items (1)

Contract termination costs $ 190 $ 45 $ ( 217 ) $ — $ 18

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Total $ 470 $ 337 $ ( 672 ) $ ( 23 ) $ 112

(1) Non-cash items consist of the write-off of assets within Network decommissioning.

(1) Non-cash items primarily consist of the write-off of assets within Network decommissioning.

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

Our Merger restructuring activities are expected to occur over the next year with substantially all costs incurred by the end of fiscal year 2023, with the related cash outflows extending beyond 2023.

We continue to evaluate 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 to incur all of the remaining restructuring and integration costs associated with the Merger by the first half of 2024, with the cash expenditure for the Merger-related costs extending beyond 2024.

Cash payments extending beyond 2024 primarily relate to operating and financing leases for which we have recognized accelerated lease expense.

See Note 16 – Leases for more details on the expected amount and timing of our lease payments.

2023 Workforce Reduction

In August 2023, we implemented an initiative to reduce the size of our workforce by approximately 5,000 positions, just under 7 % of our total employee base, primarily in corporate and back-office functions, and some technology roles.

We recorded a pre-tax charge of $ 462 million during the year ended December 31, 2023, related to the workforce reduction, which is included in Cost of services and Selling, general and administrative expenses on our Consolidated Statements of Comprehensive Income.

The changes in the liabilities associated with our workforce reduction initiative, including expenses incurred and cash payments, are as follows:

(in millions) December 31,

2022 Expenses Incurred Cash Payments Other (1)

Severance costs $ — $ 462 $ ( 281 ) $ 14 $ 195

(1) Other primarily consists of previously expensed vacation accruals expected to be paid out as a component of severance.

The liabilities accrued in connection with our workforce reduction activities are presented in Accounts payable and accrued liabilities on our Consolidated Balance Sheets.

Substantially all costs associated with our workforce reduction activities were recorded during the year ended December 31, 2023, with substantially all related cash outflows extending through mid-2024.

Index for Notes to the Consolidated Financial Statements

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Accounts payable and accrued liabilities $ 10,373 $ 12,275

Book overdrafts included in accounts payable were $ 720 million and $ 378 million as of December 31, 2022, and 2021, respectively.

Book overdrafts included in accounts payable were $ 740 million and $ 720 million as of December 31, 2023, and 2022,

respectively.

Related Party Transactions

We have related party transactions associated with DT or its affiliates in the ordinary course of business, which are included in the Consolidated Financial Statements.

During the year ended December 31, 2022, we redeemed $ 2.3 billion aggregate principal amount of our 4.000 % and 5.375 % Senior Notes to affiliates due 2022.

See Note 8 - Debt for further information.

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

The following table summarizes the impact of significant transactions with DT or its affiliates included in Operating expenses in the Consolidated Statements of Comprehensive Income:

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International long distance agreement 20 25 37

We have an agreement with DT for the reimbursement of certain administrative expenses, which were $ 4 million, $ 5 million and $ 6 million for the years ended December 31, 2022, 2021 and 2020, respectively.

We have an agreement with DT for the reimbursement of certain administrative expenses, which were $ 4 million for the years ended December 31, 2023, and 2022 and $ 5 million for the year ended December 31, 2021.

During the year ended December 31, 2023, we paid an aggregate of $ 747 million in cash dividends to our stockholders, of which $ 393 million was paid to DT.

See Note 13 - Stockholder Return Program s for further information.

Supplemental Consolidated Statements of Cash Flows Information

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Non-cash beneficial interest obtained in exchange for securitized receivables $ 3,990 $ 4,192 $ 4,237

Non-cash consideration for the acquisition of Sprint — — 33,533

Change in accounts payable and accrued liabilities for purchases of property and equipment ( 860 ) 133 366

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Note 20 – Subsequent Events

Subsequent to December 31, 2022, on January 5, 2023, we identified that a bad actor was obtaining data through a single API without authorization.

See Note 19 – Commitments and Contingencies for additional information.

See Note 8 - Debt for additional information.

Subsequent to December 31, 2022, from January 1, 2023, through February 10, 2023, we repurchased 14,676,718 shares of our common stock at an average price per share of $ 145.70 for a total purchase price of $ 2.1 billion.

See Note 15 – Repurchases of Common Stock for additional information.

See Note 13 - Stockholder Return Programs for additional information regarding the 2023-2024 Stockholder Return Program.

Changes in and Disagreements with Accountants on Accounting and Financial Disclosure

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-K

Item 8. Financial Statements and Supplementary Data