What changed in this filing

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Item 1. Financial Statements

2024-04-26 compared with 2023-10-25 · 188 added, 352 removed, 556 unchanged (49% of the section changed)

2 unchanged sentences

Condensed Consolidated Balance Sheets

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

(in millions, except share and per share amounts) March 31,

2024 December 31,

41 unchanged sentences

Accumulated other comprehensive loss ( 926 ) ( 964 )

Retained earnings (accumulated deficit) 5,335 ( 223 )

Retained earnings 8,196 7,347

Total stockholders' equity 62,074 64,715

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Condensed Consolidated Statements of Comprehensive Income

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

Three Months Ended March 31,

(in millions, except share and per share amounts) 2024 2023

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Selling, general and administrative 5,138 5,425

Impairment expense — — — 477

Loss (gain) on disposal group held for sale — 1,071 ( 25 ) 1,071

Gain on disposal group held for sale — ( 42 )

Depreciation and amortization 3,371 3,203

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Interest expense, net ( 880 ) ( 835 )

Other income (expense), net 41 ( 3 ) 56 ( 35 )

Other income, net 20 9

Total other expense, net ( 860 ) ( 826 )

Income before income taxes 3,138 2,571

Income tax (expense) benefit ( 705 ) 57 ( 2,053 ) ( 106 )

Income tax expense ( 764 ) ( 631 )

Net income $ 2,374 $ 1,940

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Reclassification of loss from cash flow hedges, net of tax effect of $ 15 and $ 14

41 39 121 113

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

— ( 7 ) 9 ( 11 )

Unrealized gain on foreign currency translation adjustment, net of tax effect of $ 0 , and $ 0

Amortization of actuarial gain, net of tax effect of $( 2 ) and $ 0

( 33 ) — ( 33 ) —

Other comprehensive income 38 42

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Condensed Consolidated Statements of Cash Flows

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

Three Months Ended March 31,

(in millions) 2024 2023

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Stock-based compensation expense 140 177

Deferred income tax expense (benefit) 671 ( 36 ) 1,985 73

Deferred income tax expense 715 611

Bad debt expense 282 222

Losses from sales of receivables 21 38

Impairment expense — — — 477

Loss on remeasurement of disposal group held for sale — 371 9 371

Gain on remeasurement of disposal group held for sale — ( 13 )

Changes in operating assets and liabilities

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Proceeds related to beneficial interests in securitization transactions 890 1,345

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

Other, net 11 ( 5 )

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Repurchases of common stock ( 3,594 ) ( 4,619 )

Dividends on common stock ( 769 ) —

Tax withholdings on share-based awards ( 192 ) ( 187 )

Other, net ( 34 ) ( 43 )

Net cash (used in) provided by financing activities ( 5,510 ) 1,927 ( 8,567 ) ( 1,953 )

Net cash used in financing activities ( 1,666 ) ( 2,273 )

Change in cash and cash equivalents, including restricted cash and cash held for sale 1,631 50

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Condensed Consolidated Statement of Stockholders’ Equity

(in millions, except shares) Common Stock Outstanding Treasury Stock Outstanding Treasury Shares at Cost Par Value and Additional Paid-in Capital Accumulated Other Comprehensive Loss Retained Earnings

(Accumulated Deficit) Total Stockholders' Equity

Balance as of June 30, 2023 1,180,398,748 81,090,539 $ ( 11,392 ) $ 74,161 $ ( 957 ) $ 3,938 $ 65,750

Net income — — — — — 2,142 2,142

Dividends declared ($ 0.65 per share)

— — — — — ( 745 ) ( 745 )

Other comprehensive income — — — — 8 — 8

Stock-based compensation — — — 169 — — 169

Stock issued for employee stock purchase plan 708,049 — — 84 — — 84

Issuance of vested restricted stock units 231,246 — — — — — —

Shares withheld related to net share settlement of stock awards and stock options ( 76,318 ) — — ( 10 ) — — ( 10 )

Repurchases of common stock ( 19,313,159 ) 19,313,159 ( 2,702 ) — — — ( 2,702 )

Other, net 31,142 ( 7,641 ) 2 — — — 2

Balance as of September 30, 2023 1,161,979,708 100,396,057 $ ( 14,092 ) $ 74,404 $ ( 949 ) $ 5,335 $ 64,698

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

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

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Other, net 61,752 23,309 ( 5 ) 9 — — 4

Balance as of September 30, 2023 1,161,979,708 100,396,057 $ ( 14,092 ) $ 74,404 $ ( 949 ) $ 5,335 $ 64,698

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

Index for Notes to the Condensed Consolidated Financial Statements

T-Mobile US, Inc.

Condensed Consolidated Statement of Stockholders’ Equity

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

Net income — — — — — 508 508

Other comprehensive income — — — — 32 — 32

Stock-based compensation — — — 165 — — 165

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

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

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

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

Other, net 32,582 ( 5,968 ) — 1 — — 1

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

Balance as of March 31, 2024 1,177,240,110 89,053,922 $ ( 12,982 ) $ 67,786 $ ( 926 ) $ 8,196 $ 62,074

Balance as of December 31, 2022 1,233,960,078 22,916,449 $ ( 3,016 ) $ 73,941 $ ( 1,046 ) $ ( 223 ) $ 69,656

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Other, net 55,316 30,275 ( 5 ) 8 — — 3

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

Balance as of March 31, 2023 1,204,696,325 55,910,664 $ ( 7,831 ) $ 74,043 $ ( 1,004 ) $ 1,717 $ 66,925

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

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Revenue from Contracts with Customers

S tock holder Return Prog r am s

Stockholder Return Program

Earnings Per Share

Commitments and Contingencies

Restructuring Costs

Additional Financial Information

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The condensed 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 our obligations to pay for the management and operation of certain of our wireless communications tower sites.

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 our obligations to pay for the management and operation of certain of our wireless communications tower sites.

Intercompany transactions and balances have been eliminated in consolidation.

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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 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.” 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 Condensed 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 Loss (gain) on disposal group held for sale on our Condensed Consolidated Statements of Comprehensive Income.

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

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 is expected to consist 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.

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

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

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

See Note 10 - Stockholder Return Programs for more information about our 2023-2024 Stockholder Return Program.

Index for Notes to the Condensed Consolidated Financial Statements

Accounting Pronouncements Adopted During the Current Year

Troubled Debt Restructurings and Vintage Disclosures

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.

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 condensed consolidated financial statements as of and for the three and nine months ended September 30, 2023.

Accounting Pronouncements Not Yet Adopted

Segment Reporting Disclosures

In November 2023, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2023-07, “Segment Reporting (Topic 280):

Improvements to Reportable Segment Disclosures.” The standard expands 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.

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 Combination

On March 9, 2023, we entered into a Merger and Unit Purchase Agreement for the acquisition of 100 % of the outstanding equity of Ka’ena Corporation and its subsidiaries including, among others, Mint Mobile LLC, 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 Corporation during certain periods before and after closing and consists of an upfront payment at closing of the transaction, subject to certain agreed-upon adjustments, and a variable earnout payable 24 months after closing of the transaction.

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

Acquisition of Ka’ena Corporation

On March 9, 2023, we entered into a Merger and Unit Purchase Agreement (the “Merger and Unit 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”), 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 “Ka’ena Acquisition”).

On March 13, 2024, we entered into Amendment No.

1 to the Merger and Unit Purchase Agreement, which amended, among other things, certain mechanics of the payment of the purchase

Index for Notes to the Condensed Consolidated Financial Statements

consideration for the Ka’ena Acquisition, which will result in a nominal increase in the percentage of cash compared to shares of T-Mobile common stock to be paid out as part of the total purchase price.

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 is currently estimated to be $ 1.2 billion, before working capital and other adjustments, which we currently estimate will result in a net upfront payment of approximately $ 950 million, with approximately 45 % to be paid in cash.

Subsequent to March 31, 2024, on April 25, 2024, we received all necessary regulatory approvals and the Ka’ena Acquisition is expected to close on May 1, 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.

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.

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 is 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 and payment experience, as well as current collection trends such as write-off frequency and severity.

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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 Condensed 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.

EIP receivables had a combined weighted-average effective interest rate of 9.9 % and 8.0 % as of September 30, 2023, and December 31, 2022, respectively.

EIP receivables had a combined weighted-average effective interest rate of 11.1 % and 10.6 % as of March 31, 2024, and December 31, 2023, respectively.

Index for Notes to the Condensed Consolidated Financial Statements

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

(in millions) September 30,

(in millions) March 31,

2024 December 31,

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

The following table presents the amortized cost of our EIP receivables by delinquency status, customer credit class and year of origination as of September 30, 2023:

The following table presents the amortized cost of our EIP receivables by delinquency status, customer credit class and year of origination as of March 31, 2024:

Originated in 2024 Originated in 2023 Originated prior to 2023 Total EIP Receivables, Net of

Unamortized Imputed Discounts

Unamortized Imputed Discount

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

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

Index for Notes to the Condensed Consolidated Financial Statements

The following table presents write-offs of our EIP receivables by year of origination for the nine months ended September 30, 2023:

The following table presents write-offs of our EIP receivables by year of origination for the three months ended March 31, 2024:

(in millions) Originated in 2024 Originated in 2023 Originated prior to 2023 Total Write-offs

Write-offs $ 2 $ 114 $ 34 $ 150

Activity for the nine months ended September 30, 2023 and 2022, in the allowance for credit losses and unamortized imputed discount balances for the accounts receivable and EIP receivables segments were as follows:

September 30, 2023 September 30, 2022

Index for Notes to the Condensed Consolidated Financial Statements

Activity for the three months ended March 31, 2024 and 2023, in the allowance for credit losses and unamortized imputed discount balances for the accounts receivable and EIP receivables segments were as follows:

March 31, 2024 March 31, 2023

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

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Off-Balance-Sheet Credit Exposures

We do not have material off-balance-sheet credit exposures as of September 30, 2023.

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 Condensed Consolidated Balance Sheets measured at fair value that are based on a discounted cash flow model using Level 3 inputs, including customer default rates and credit worthiness, dilutions and recoveries.

We do not have material off-balance-sheet credit exposures as of March 31, 2024.

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 Condensed Consolidated Balance Sheets measured at fair value that are based on a discounted cash flow model using Level 3 inputs, including estimated 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”), which has been revised and extended from time to time.

As of both September 30, 2023, and December 31, 2022, the EIP sale arrangement provided funding of $ 1.3 billion.

As of both March 31, 2024, and December 31, 2023, the EIP Sale Arrangement provided funding of $ 1.3 billion.

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

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

(in millions) September 30,

(in millions) March 31,

2024 December 31,

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Other assets 95 103

Index for Notes to the Condensed Consolidated Financial Statements

Sales of Service Accounts Receivable

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On February 27, 2024, we extended the scheduled expiration date of the Service Receivable Sale Arrangement to February 25, 2025.

As of both September 30, 2023, and December 31, 2022, the service receivable sale arrangement provided funding of $ 775 million.

As of both March 31, 2024, and December 31, 2023, the Service Receivable Sale Arrangement provided funding of $ 775 million.

Index for Notes to the Condensed Consolidated Financial Statements

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”).

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

(in millions) September 30,

(in millions) March 31,

2024 December 31,

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

(in millions) September 30,

(in millions) March 31,

2024 December 31,

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

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

As of September 30, 2023, and December 31, 2022, our deferred purchase price related to the sales of service accounts receivable and EIP receivables was $ 690 million and $ 692 million, respectively.

We recognized losses from sales of receivables, including changes in fair value of the deferred purchase price, of $ 46 million and $ 60 million for the three months ended September 30, 2023 and 2022, respectively, and $ 135 million and $ 168 million for the nine months ended September 30, 2023 and 2022, respectively, in Selling, general and administrative expenses on our Condensed Consolidated Statements of Comprehensive Income.

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

As of March 31, 2024, and December 31, 2023, our deferred purchase price related to the sales of service accounts receivable and EIP receivables was $ 586 million and $ 658 million, respectively.

We recognized losses from sales of receivables, including changes in fair value of the deferred purchase price, of $ 21 million and $ 38 million for the three months ended March 31, 2024 and 2023, respectively, in Selling, general and administrative expenses on our Condensed Consolidated Statements of Comprehensive Income.

Continuing Involvement

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As the receivables are sold on a revolving basis, the customer payment collections on sold receivables may be reinvested in new receivable sales.

At the direction of the purchasers of the sold receivables, we apply the same policies and procedures while servicing the sold receivables as we apply to our owned receivables, and we continue to maintain normal relationships with our customers.

Index for Notes to the Condensed Consolidated Financial Statements

the direction of the purchasers of the sold receivables, we apply the same policies and procedures while servicing the sold receivables as we apply to our owned receivables, and we continue to maintain normal relationships with our customers.

Note 5 – Spectrum License Transactions

The following table summarizes our spectrum license activity for the nine months ended September 30, 2023:

The following table summarizes our spectrum license activity for the three months ended March 31, 2024:

(in millions) 2024

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Spectrum licenses, end of period $ 97,154

(1) As of September 30, 2023, $ 767 million is included in Other current liabilities on our Condensed Consolidated Balance Sheets related to accrued spectrum clearing costs.

Cash payments to acquire spectrum licenses and payments for costs to clear spectrum are included in Purchases of spectrum licenses and other intangible assets, including deposits, on our Condensed Consolidated Statements of Cash Flows for the three and nine months ended September 30, 2023.

Spectrum Transactions

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

The aggregate cash payments made to the FCC are included in Other assets on our Condensed Consolidated Balance Sheets as of September 30, 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, and the FCC Chairwoman has stated that it is subject to the restoration of auction authority to the FCC by Congress.

As of September 30, 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, 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 three months ended September 30, 2023, we began capitalizing interest on the costs of our C-band spectrum licenses, acquired pursuant to FCC Auction 107, as we have begun development activities necessary to prepare the spectrum for its intended use.

On February 29, 2024, the FCC issued to us the licenses won in Auction 108, and substantially all of these licenses were deployed in March 2024.

The licenses are included in Spectrum licenses on our Condensed Consolidated Balance Sheets as of March 31, 2024.

License Purchase Agreements

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

Subsequent to September 30, 2023, 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) permits us to commence auction of the spectrum prior to April 1, 2024 at our discretion (and subject to DISH’s purchase right).

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.

If DISH does not, by April 1, 2024, purchase the 800 MHz spectrum licenses, we are required, unless otherwise approved under the final judgment agreed to by us, Deutsche Telekom AG (“DT”), Sprint Corporation, now known as Sprint LLC (“Sprint”), SoftBank Group Corp.

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 Condensed Consolidated Balance Sheets.

Subsequent to March 31, 2024, DISH did not purchase the 800 MHz spectrum by April 1, 2024.

As such, we will recognize a gain for the $ 100 million extension fee previously paid by DISH in the second quarter of 2024 within Selling, general and administrative expenses on our Condensed Consolidated Statements of Comprehensive Income and relieve the liability that was initially recorded upon receipt of the payment.

Additionally, we have commenced an auction process for the disposition of the spectrum as required under the final judgment agreed to by us, Deutsche Telekom AG (“DT”), Sprint LLC, 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.

District Court for the District of Columbia, which was approved by the Court on April 1, 2020.

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.

Index for Notes to the Condensed Consolidated Financial Statements

Channel 51 License Co LLC and LB License Co, LLC

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

Index for Notes to the Condensed Consolidated Financial Statements

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.

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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.

We anticipate that the first closing will occur no earlier than the first half of 2024 and that the second closing (on the deferred licenses) will occur in late 2024 or early 2025.

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

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, with the associated cash payment expected to occur in the third 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).

Note 6 – Fair Value Measurements

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We do not use derivatives for trading or speculative purposes.

Index for Notes to the Condensed Consolidated Financial Statements

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

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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 September 30, 2023, or December 31, 2022.

We did not have any significant derivative instruments outstanding as of March 31, 2024, and December 31, 2023.

Interest Rate Lock Derivatives

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

Aggregate changes in the fair value of the interest rate lock derivatives, net of tax and amortization, of $ 1.2 billion and $ 1.3 billion are presented in Accumulated other comprehensive loss on our Condensed Consolidated Balance Sheets as of September 30, 2023, and December 31, 2022, respectively.

For the three months ended September 30, 2023 and 2022, $ 55 million and $ 51 million, respectively, and for the nine months ended September 30, 2023 and 2022, $ 163 million and $ 151 million, respectively, were amortized from Accumulated other comprehensive loss into Interest expense, net, on our Condensed Consolidated Statements of Comprehensive Income.

We expect to amortize $ 232 million of the Accumulated other comprehensive loss associated with the derivatives into Interest expense, net, over the 12 months ending September 30, 2024.

Aggregate changes in the fair value of the interest rate lock derivatives, net of tax and amortization, of $ 1.1 billion are presented in Accumulated other comprehensive loss on our Condensed Consolidated Balance Sheets as of both March 31, 2024, and December 31, 2023.

For the three months ended March 31, 2024 and 2023, $ 57 million and $ 53 million, respectively, were amortized from Accumulated other comprehensive loss into Interest expense, net, on our Condensed Consolidated Statements of Comprehensive Income.

We expect to amortize $ 241 million of the Accumulated other comprehensive loss associated with the derivatives into Interest expense, net, over the 12 months ending March 31, 2025.

Deferred Purchase Price Assets

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

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

The carrying amounts of our deferred purchase price assets, which are measured at fair value on a recurring basis and are included on our Condensed Consolidated Balance Sheets, were $ 690 million and $ 692 million as of September 30, 2023, and December 31, 2022, respectively.

Index for Notes to the Condensed 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 Condensed Consolidated Balance Sheets, were $ 586 million and $ 658 million as of March 31, 2024, and December 31, 2023, respectively.

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.

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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, considerable 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 September 30, 2023, and December 31, 2022.

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 March 31, 2024, and December 31, 2023.

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

Index for Notes to the Condensed Consolidated Financial Statements

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

(in millions) Level within the Fair Value Hierarchy September 30, 2023 December 31, 2022

Carrying Amount Fair Value Carrying Amount (1)

Fair Value (1)

(in millions) Level within the Fair Value Hierarchy March 31, 2024 December 31, 2023

Carrying Amount Fair Value Carrying Amount Fair Value

Senior Notes to third parties 1 $ 73,421 $ 67,914 $ 70,493 $ 65,962

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ABS Notes to third parties 2 1,246 1,244 748 748

(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.

Note 7 – Debt

The following table sets forth the debt balances and activity as of, and for the nine months ended, September 30, 2023 :

The following table sets forth the debt balances and activity as of, and for the three months ended, March 31, 2024 :

(in millions) December 31,

2023 Proceeds from Issuances and Borrowings (1)

Note Redemptions (1)

Repayments Reclassifications (1)

September 30,

Short-term debt $ 3,619 $ — $ ( 223 ) $ 1,983 $ ( 23 ) $ 5,356

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Total debt $ 75,018 $ 3,473 $ ( 223 ) $ — $ ( 55 ) $ 78,213

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

(1) Issuances and borrowings and reclassifications are recorded net of accrued or paid issuance costs and discounts.

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

Our effective interest rate, excluding the impact of derivatives and capitalized interest, was approximately 4.0 % and 3.8 % on weighted-average debt outstanding of $ 77.2 billion and $ 71.6 billion for the three months ended September 30, 2023 and 2022, respectively, and 4.0 % and 3.9 % on weighted-average debt outstanding of $ 75.5 billion and $ 72.4 billion for the nine months ended September 30, 2023 and 2022, respectively.

Our effective interest rate, excluding the impact of derivatives and capitalized interest, was approximately 4.1 % and 4.0 % on weighted-average debt outstanding of $ 77.4 billion and $ 73.4 billion for the three months ended March 31, 2024 and 2023, 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 to third parties and short-term and long-term debt to affiliates, net of unamortized premiums, discounts, debt issuance costs and consent fees.

Index for Notes to the Condensed Consolidated Financial Statements

Issuances and Borrowings

During the nine months ended September 30, 2023, we issued the following Senior Notes:

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

4.950 % Senior Notes due 2028

$ 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

During the three months ended March 31, 2024, we issued the following Senior Notes:

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

4.850 % Senior Notes due 2029

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

$ 1,000 $ ( 6 ) $ 994 January 12, 2024

5.150 % Senior Notes due 2034

1,000 ( 6 ) 994 September 14, 2023

1,250 ( 11 ) 1,239 January 12, 2024

5.500 % Senior Notes due 2055

1,000 ( 10 ) 990 September 14, 2023

750 ( 7 ) 743 January 12, 2024

Total of Senior Notes issued $ 3,000 $ ( 24 ) $ 2,976

Index for Notes to the Condensed Consolidated Financial Statements

Note Redemptions and Repayments

During the nine months ended September 30, 2023, we made the following redemption and repayments:

5.050 % Class A Senior ABS Notes due 2029

$ 500 $ ( 3 ) $ 497 February 14, 2024

Total of ABS Notes issued $ 500 $ ( 3 ) $ 497

Note Repayments

During the three months ended March 31, 2024, we made the following repayments:

(in millions) Principal Amount Repayment Date

7.875 % Senior Notes due 2023

$ 4,250 September 15, 2023

Total Redemptions $ 4,250

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

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Asset-backed Notes

Our ABS Notes are secured by $ 983 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 Condensed Consolidated Balance Sheets.

The expected maturities of our ABS Notes are as follows:

Expected Maturities

(in millions) 2024 2025

4.910 % Class A Senior ABS Notes due 2028

On February 14, 2024, we issued $ 500 million of 5.050 % Class A Senior ABS Notes to third parties in a private placement transaction.

These ABS Notes are secured by $ 667 million of gross EIP receivables and future collections on such receivables.

Net proceeds of $ 497 million from these ABS Notes are presented in Proceeds from issuance of long-term debt on our Condensed Consolidated Statements of Cash Flows in the three months ended March 31, 2024.

As of March 31, 2024, $ 1.3 billion of our ABS Notes were secured in total by $ 1.7 billion of gross EIP receivables and future collections on such receivables.

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

The expected maturities of our ABS Notes as of March 31, 2024, were as follows:

(in millions) Expected Maturities

Total $ 1,250

Variable Interest Entities

In connection with issuing the ABS Notes in October 2022, 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.

The ABS Entities meet the definition of a VIE for which we have determined that we are the primary beneficiary as we have the power to direct the activities of the ABS Entities that most significantly impact their performance.

In connection with our ABS Notes issuances, 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.

Each of the ABS Entities meet the definition of a VIE for which we have determined that we are the primary beneficiary, as we have the power to direct the activities of the ABS Entities that most significantly impact their performance.

Accordingly, we include the balances and results of operations of the ABS Entities in our condensed consolidated financial statements.

Index for Notes to the Condensed Consolidated Financial Statements

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

(in millions) September 30,

(in millions) March 31,

2024 December 31,

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Accounts payable and accrued liabilities $ 2 $ 1

Short-term debt 413 198

Long-term debt 833 550

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

See Note 15 - Additional Financial Information for our reconciliation of Cash and cash equivalents, including restricted cash and cash held for sale.

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 September 30, 2023, there was no outstanding balance under this program.

Index for Notes to the Condensed Consolidated Financial Statements

See Note 1 3 - Additional Financial Information for our reconciliation of Cash and cash equivalents, including restricted cash.

Note 8 – Tower Obligations

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Acquired CCI Tower Lease Arrangements

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

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

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

These agreements were assumed upon the

Index for Notes to the Condensed Consolidated Financial Statements

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

CCI has a fixed price purchase option for all (but not less than all) of the leased or subleased sites for approximately $ 2.3 billion, exercisable one year prior to the expiration of the agreement and ending 120 days prior to the expiration of the agreement.

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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 Condensed 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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The tower assets are reported in Property and equipment, net on our Condensed Consolidated Balance Sheets and are depreciated to their estimated residual values over the expected useful life of the towers, which is 20 years.

Index for Notes to the Condensed Consolidated Financial Statements

Leaseback Arrangement

On January 3, 2022, we entered into an agreement (the “Crown Agreement”) with CCI.

The Crown Agreement extends the current term of the leasebacks by up to 12 years and modifies the leaseback payments for both the Existing CCI Tower Lease Arrangement and the Acquired CCI Tower Lease Arrangement.

The Crown Agreement extends the current term of the leasebacks by up to 12 years and modifies the leaseback payments for both the Existing CCI Tower Lease Arrangements and the Acquired CCI Tower Lease Arrangements.

As a result of the Crown Agreement, there was an increase in our financing obligation as of the effective date of the Crown Agreement of approximately $ 1.2 billion, with a corresponding decrease to Other long-term liabilities associated with unfavorable contract terms.

The modification resulted in a revised interest rate under the effective interest method for the tower obligations:

11.6 % for the Existing CCI Tower Lease Arrangement and 5.3 % for the Acquired CCI Tower Lease Arrangement.

11.6 % for the Existing CCI Tower Lease Arrangements and 5.3 % for the Acquired CCI Tower Lease Arrangements.

There were no changes made to either of our master prepaid leases with CCI.

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

(in millions) September 30,

(in millions) March 31,

2024 December 31,

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Other long-term liabilities 554 554

Future minimum payments related to the tower obligations are approximately $ 432 million for the 12-month period ending September 30, 2024, $ 780 million in total for both of the 12-month periods ending September 30, 2025 and 2026, $ 804 million in total for both of the 12-month periods ending September 30, 2027 and 2028, and $ 4.2 billion in total thereafter.

Future minimum payments related to the tower obligations are approximately $ 421 million for the 12-month period ending March 31, 2025, $ 774 million in total for both of the 12-month periods ending March 31, 2026 and 2027, $ 816 million in total for both of the 12-month periods ending March 31, 2028 and 2029, and $ 4.0 billion in total thereafter.

We are contingently liable for future ground lease payments through the remaining term of the CCI Lease Sites and the Master Lease Sites.

These contingent obligations are not included in Operating lease liabilities, as any amount due is contractually owed by CCI based on the subleasing arrangement.

Under the arrangement, we remain primarily liable for ground lease payments on approximately 900 sites and have included lease liabilities of $ 244 million in our Operating lease liabilities as of September 30, 2023.

Under the arrangement, we remain primarily liable for ground lease payments on approximately 900 sites and have included lease liabilities of $ 241 million in our Operating lease liabilities as of March 31, 2024.

Note 9 – Revenue from Contracts with Customers

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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, mobile internet devices, including tablets and hotspots, wearables, DIGITS or other connected devices, including SyncUP and IoT;

• 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;

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

Index for Notes to the Condensed Consolidated Financial Statements

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

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

Three Months Ended March 31,

(in millions) 2024 2023

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

Index for Notes to the Condensed Consolidated Financial Statements

Contract Balances

The contract asset and contract liability balances from contracts with customers as of September 30, 2023, and December 31, 2022, were as follows:

The contract asset and contract liability balances from contracts with customers as of March 31, 2024, and December 31, 2023, were as follows:

(in millions) Contract

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Balance as of December 31, 2023 $ 607 $ 812

Balance as of September 30, 2023 617 814

Balance as of March 31, 2024 548 836

Change $ ( 59 ) $ 24

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

Contract asset balances increased primarily due to an increase in promotions with an extended service contract, partially offset by billings on existing contracts and impairment, which is recognized as bad debt expense.

The current portion of our contract assets of approximately $ 490 million and $ 356 million as of September 30, 2023, and December 31, 2022, respectively, was included in Other current assets on our Condensed Consolidated Balance Sheets.

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

The current portion of our contract assets of approximately $ 449 million and $ 495 million as of March 31, 2024, and December 31, 2023, respectively, was included in Other current assets on our Condensed Consolidated Balance Sheets.

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

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

Revenues for the three and nine months ended September 30, 2023 and 2022 include the following:

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

Revenues for the three months ended March 31, 2024 and 2023 include the following:

Three Months Ended March 31,

(in millions) 2024 2023

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Remaining Performance Obligations

As of September 30, 2023, the aggregate amount of transaction price allocated to remaining service performance obligations for postpaid contracts with subsidized devices and promotional bill credits that result in an extended service contract is $ 1.5 billion.

As of March 31, 2024, the aggregate amount of transaction price allocated to remaining service performance obligations for postpaid contracts with subsidized devices and promotional bill credits that result in an extended service contract is $ 1.3 billion.

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

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

As of September 30, 2023, the aggregate amount of the contractual minimum consideration for wholesale, roaming and service contracts is $ 395 million, $ 2.0 billion and $ 4.2 billion for 2023, 2024, and 2025 and beyond, respectively.

As of March 31, 2024, the aggregate amount of the contractual minimum consideration for wholesale, roaming and service contracts is $ 1.3 billion, $ 1.6 billion and $ 2.8 billion for the remainder of 2024, 2025, and 2026 and beyond, respectively.

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

Index for Notes to the Condensed Consolidated Financial Statements

Contract Costs

The balance of deferred incremental costs to obtain contracts with customers was $ 2.1 billion and $ 1.9 billion as of September 30, 2023, and December 31, 2022, respectively, and is included in Other assets on our Condensed Consolidated Balance Sheets.

The balance of deferred incremental costs to obtain contracts with customers was $ 2.1 billion as of both March 31, 2024, and December 31, 2023, and is included in Other assets on our Condensed Consolidated Balance Sheets.

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

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

Amortization of deferred contract costs included in Selling, general and administrative expenses on our Condensed Consolidated Statements of Comprehensive Income were $ 468 million and $ 375 million for the three months ended September 30, 2023 and 2022, respectively, and $ 1.3 billion and $ 1.1 billion for the nine months ended September 30, 2023 and 2022, respectively.

Amortization of deferred contract costs included in Selling, general and administrative expenses on our Condensed Consolidated Statements of Comprehensive Income were $ 489 million and $ 422 million for the three months ended March 31, 2024 and 2023, respectively.

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

There were no impairment losses recognized on deferred contract cost assets for the three and nine months ended September 30, 2023 and 2022.

Index for Notes to the Condensed Consolidated Financial Statements

Note 10 – 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 (the “2022 Stock Repurchase Program”).

During the three months ended September 30, 2023, we repurchased 19,313,159 shares of our common stock at an average price per share of $ 138.48 for a total purchase price of $ 2.7 billion, and 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, all of which were purchased under the 2022 Stock Repurchase Program.

All shares purchased during the nine months ended September 30, 2023, were purchased at market price.

There were no impairment losses recognized on deferred contract cost assets for the three months ended March 31, 2024 and 2023.

Note 10 – Stockholder Return Program

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 through December 31, 2024.

The 2023-2024 Stockholder Return Program is expected to consist 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.

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 is payable on December 15, 2023, to stockholders of record as of the close of business on December 1, 2023.

As of September 30, 2023, $ 745 million for dividends payable is presented within Other current liabilities on our Condensed Consolidated Balance Sheets, of which $ 393 million is payable to DT.

During the three and nine months ended September 30, 2023, we did not repurchase any shares of our common stock under the 2023-2024 Stockholder Return Program.

As of September 30, 2023, we had up to $ 18.3 billion remaining under the 2023-2024 Stockholder Return Program.

Subsequent to September 30, 2023, from October 1, 2023, through October 20, 2023, we repurchased 5,515,568 shares of our common stock at an average price per share of $ 139.76 for a total purchase price of $ 771 million.

As of October 20, 2023, we had up to $ 17.5 billion remaining under the 2023-2024 Stockholder Return Program.

Note 11 – 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 agreed to acquire the Wireline Business.

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

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”).

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

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 was paid on March 14, 2024, to stockholders of record as of the close of business on March 1, 2024.

On March 15, 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 June 13, 2024, to stockholders of record as of the close of business on May 31, 2024.

During the three months ended March 31, 2024, we paid an aggregate of $ 769 million in cash dividends to our stockholders, which was presented within Net cash used in financing activities on our Condensed Consolidated Statements of Cash Flows, of which $ 388 million was paid to DT.

As of March 31, 2024, $ 756 million for dividends payable is presented within Other current liabilities on our Condensed Consolidated Balance Sheets, of which $ 386 million is payable to DT.

During the three months ended March 31, 2024, we repurchased 21,933,790 shares of our common stock at an average price per share of $ 162.69 for a total purchase price of $ 3.6 billion under the 2023-2024 Stockholder Return Program.

All shares repurchased during the three months ended March 31, 2024, were purchased at market price.

As of March 31, 2024, we had up to $ 11.7 billion remaining under the 2023-2024 Stockholder Return Program for repurchases of shares and quarterly dividends through December 31, 2024.

The next quarterly cash dividend will be paid on June 13, 2024.

Subsequent to March 31, 2024, from April 1, 2024, through April 19, 2024, we repurchased 5,427,946 shares of our common stock at an average price per share of $ 160.97 for a total purchase price of $ 874 million.

As of April 19, 2024, we had up to $ 10.8 billion remaining under the 2023-2024 Stockholder Return Program for repurchases of shares and quarterly dividends through December 31, 2024.

Index for Notes to the Condensed Consolidated Financial Statements

Company $ 61 million at Closing.

The Closing of the Wireline Transaction did not have a significant impact on the Loss (gain) on disposal group held for sale on our Condensed 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 group.

As of September 30, 2023, $ 246 million and $ 275 million of this liability, including accrued interest, is presented within Other current liabilities and Other long-term liabilities, respectively, on our Condensed Consolidated Balance Sheets in accordance with the expected timing of the related payments.

As of September 30, 2023, $ 30 million and $ 31 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 Condensed Consolidated Balance Sheets in accordance with the expected timing of the related payments.

We recognized a pre-tax gain of $ 25 million during the nine months ended September 30, 2023, and a pre-tax loss of $ 1.1 billion during the three and nine months ended September 30, 2022, which are included within Loss (gain) on disposal group held for sale on our Condensed Consolidated Statements of Comprehensive Income.

There was no gain or loss on disposal group held for sale for the three months ended September 30, 2023.

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 the Wireline Business did not qualify for reporting as a discontinued operation.

2022 Wireline Impairment

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.

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

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

There was no impairment expense recognized for the three and nine months ended September 30, 2023.

Note 11 – Earnings Per Share

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

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

Three Months Ended March 31,

(in millions, except shares and per share amounts) 2024 2023

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Effect of dilutive securities:

Outstanding stock options and unvested stock awards 3,054,099 5,336,842 3,792,419 5,278,338

Outstanding stock options, unvested stock awards 3,793,522 4,996,336

Weighted-average shares outstanding – diluted 1,189,092,019 1,224,604,698

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SoftBank contingent consideration (1)

48,751,557 48,751,557 48,751,557 48,751,557

(1) Represents the weighted-average SoftBank Specified Shares Amount that is 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”).

Index for Notes to the Condensed Consolidated Financial Statements

As of September 30, 2023, we had authorized 100 million shares of preferred stock, with a par value of $ 0.00001 per share.

There was no preferred stock outstanding as of September 30, 2023 and 2022.

(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”).

The SoftBank Specified Shares were determined to be contingent consideration for the Merger and was not dilutive until the defined volume-weighted average price per share was reached (the “Threshold Price”).

As of the close of trading on December 22, 2023, the Threshold Price was reached.

On December 28, 2023, the Company issued the SoftBank Specified Shares to SoftBank in accordance with the Letter Agreement.

As of March 31, 2024, we had authorized 100 million shares of preferred stock, with a par value of $ 0.00001 per share.

There was no preferred stock outstanding as of March 31, 2024 and 2023.

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 issuance of the SoftBank Specified Shares Amount is contingent on the trailing 45 -trading-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 (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 is 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 September 30, 2023, the Threshold Price is $ 149.35 and will automatically further adjust upon the declaration of any future cash dividends as provided in the Letter Agreement.

Note 12 – Commitments and Contingencies

Purchase Commitments

We have commitments for non-dedicated transportation lines with varying expiration terms that generally extend through 2038.

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

Our purchase commitments are approximately $ 4.7 billion for the 12-month period ending September 30, 2024, $ 4.3 billion in total for both of the 12-month periods ending September 30, 2025 and 2026, $ 2.7 billion in total for both of the 12-month periods ending September 30, 2027 and 2028, and $ 2.3 billion in total thereafter.

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

The agreement remains subject to regulatory approval, and the estimated purchase price is excluded from our reported purchase commitments above.

See Note 2 – Business Combination for additional details.

Spectrum Leases

We lease spectrum from various parties.

These leases include service obligations to the lessors.

Certain spectrum leases provide for minimum lease payments, additional charges, renewal options and escalation clauses.

Leased spectrum agreements have varying expiration terms that generally extend through 2050.

We expect that all renewal periods in our spectrum leases will be exercised by us.

Certain spectrum leases also include purchase options and right-of-first refusal clauses in which we are provided the opportunity to exercise our purchase option if the lessor receives a purchase offer from a third party.

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

Our spectrum lease and service credit commitments, including renewal periods, are approximately $ 303 million for the 12-month period ending September 30, 2024, $ 602 million in total for both of the 12-month periods ending September 30, 2025 and 2026, $ 666 million in total for both of the 12-month periods ending September 30, 2027 and 2028, and $ 4.4 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 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 Condensed 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 agreements remain subject to regulatory approval and are excluded from our reported purchase commitments above.

See Note 5 – Spectrum License Transactions 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 5 – Spectrum License Transactions for additional details.

Merger Commitments

In connection with the regulatory proceedings and approvals of the Merger pursuant to a 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.

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.

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

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

Index for Notes to the Condensed Consolidated Financial Statements

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

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

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On February 28, 2020, we received a Notice of Apparent Liability for Forfeiture and Admonishment from the FCC, which proposed a penalty against us for allegedly violating section 222 of the Communications Act and the FCC’s regulations governing the privacy of customer information.

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

We maintained the accrual as of September 30, 2023, and that accrual was included in Accounts payable and accrued liabilities on our Condensed Consolidated Balance Sheets.

We have included an accrual for the settlement amount that we believe to be probable in Accounts payable and accrued liabilities on our Condensed Consolidated Balance Sheets as of March 31, 2024.

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

Index for Notes to the Condensed Consolidated Financial Statements

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

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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 would also commit to an aggregate incremental spend of $ 150 million for data security and related technology in 2022 and 2023.

We also committed to an aggregate incremental spend of $ 150 million for data security and related technology in

Index for Notes to the Condensed Consolidated Financial Statements

2022 and 2023.

We previously paid $ 35 million for claims administration purposes.

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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 each of the nine months ended September 30, 2023 and 2022, we recognized $ 50 million in reimbursements from insurance carriers for costs incurred related to the August 2021 cyberattack, which is included as a reduction to Selling, general and administrative expenses on our Condensed Consolidated Statements of Comprehensive Income.

During the three months ended March 31, 2023, we recognized $ 50 million in reimbursements from insurance carriers for costs incurred related to the August 2021 cyberattack, which is included as a reduction to Selling, general and administrative expenses on our Condensed Consolidated Statements of Comprehensive Income.

The ultimate resolution of the class action depends on the number of plaintiffs who opt out of the proposed settlement and whether the proposed settlement will be appealed.

Index for Notes to the Condensed 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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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.

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.

3 unchanged sentences

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.

In connection with the January 2023 cyberattack, we became subject to consumer class actions and regulatory inquiries, 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.

In addition, we are unable to predict the full impact of this incident on customer behavior in the future, including whether a change in our customers’ behavior could negatively impact our results of operations on an ongoing basis, although we presently do not expect that it will have a material effect on our operations.

Note 14 – Restructuring 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 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.

Index for Notes to the Condensed Consolidated Financial Statements

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

(in millions) Three Months Ended

September 30, 2023 Nine Months Ended

September 30, 2023 Incurred to Date

Contract termination costs $ 7 $ 31 $ 454

Severance costs — 3 574

Network decommissioning 52 223 1,700

Total restructuring plan expenses $ 59 $ 257 $ 2,728

The expenses associated with our Merger restructuring initiatives are included in Costs of services and Selling, general and administrative expenses on our Condensed 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 $ 67 million and $ 384 million for the three months ended September 30, 2023 and 2022, respectively, and $ 303 million and $ 1.6 billion for the nine months ended September 30, 2023 and 2022, respectively, and are included in Costs of services and Selling, general and administrative expenses on our Condensed 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,

2022 Expenses Incurred Cash Payments Adjustments for Non-Cash Items (1)

September 30,

Contract termination costs $ 190 $ 31 $ ( 199 ) $ — $ 22

Severance costs — 3 ( 6 ) 3 —

Network decommissioning 280 223 ( 344 ) ( 15 ) 144

Total $ 470 $ 257 $ ( 549 ) $ ( 12 ) $ 166

(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 Condensed Consolidated Balance Sheets.

We expect to incur substantially all remaining costs associated with our Merger restructuring activities by the end of this year, with the related cash outflows extending beyond 2023.

2023 Workforce Reduction

In August 2023, we began implementing 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 $ 471 million during the three months ended September 30, 2023, related to the workforce reduction, which is included in Costs of services and Selling, general and administrative expenses on our Condensed 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)

September 30,

Severance costs $ — $ 471 $ ( 18 ) $ 14 $ 467

(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 Condensed Consolidated Balance Sheets.

Substantially all costs associated with our workforce reduction activities were recorded during the three months ended September 30, 2023, with substantially all related cash outflows extending through mid-2024.

Index for Notes to the Condensed Consolidated Financial Statements

Note 13 – Additional Financial Information

Accounts Payable and Accrued Liabilities

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

(in millions) September 30,

Accounts payable and accrued liabilities are summarized as follows:

(in millions) March 31,

2024 December 31,

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Accrued interest 887 818

Commissions and contract termination costs 287 523

Toll and interconnect 195 227

Other 600 688

Other accrued liabilities 1,112 1,136

Accounts payable and accrued liabilities $ 7,720 $ 10,373

Book overdrafts included in accounts payable were $ 713 million and $ 720 million as of September 30, 2023, and December 31, 2022, respectively.

Book overdrafts included in accounts payable were $ 702 million and $ 740 million as of March 31, 2024, and December 31, 2023, respectively.

Supplemental Condensed Consolidated Statements of Cash Flows Information

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

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

Three Months Ended March 31,

(in millions) 2024 2023

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Change in accounts payable and accrued liabilities for purchases of property and equipment ( 894 ) ( 329 )

Increase in Tower obligations from contract modification — — — 1,158

Operating lease right-of-use assets obtained in exchange for lease obligations 487 439

Financing lease right-of-use assets obtained in exchange for lease obligations 263 239

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

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

(in millions) September 30,

Cash and cash equivalents, including restricted cash

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

(in millions) March 31,

2024 December 31,

Cash and cash equivalents $ 6,708 $ 5,135

Cash and cash equivalents held for sale (included in Other current assets) — 27

Restricted cash (included in Other current assets) 154 101

Restricted cash (included in Other assets) 76 71

Cash and cash equivalents, including restricted cash and cash held for sale $ 5,199 $ 4,674

Cash and cash equivalents, including restricted cash $ 6,938 $ 5,307

Note 14 – Subsequent Events

Subsequent to September 30, 2023, on October 15, 2023, we and DISH entered into the LPA Amendment to the DISH License Purchase Agreement.

See Note 5 - Spectrum License Transactions for additional information.

See Note 10 - Stockholder Return Programs for additional information regarding the 2023-2024 Stockholder Return Program.

See Note 10 - Stockholder Return Program for additional information regarding the 2023-2024 Stockholder Return Program.

Subsequent to March 31, 2024, on April 24, 2024, we entered into a Merger Agreement with a fund operated by EQT Infrastructure VI fund (“Fund VI”) for the joint acquisition by us and Fund VI of Lumos, a fiber-to-the-home platform (“Lumos”), from EQT’s predecessor fund EQT Infrastructure III.

The Lumos acquisition is expected to close in late 2024 or early 2025, subject to customary closing conditions and regulatory approvals.

At closing, we expect to invest approximately $ 950 million in the joint venture to acquire a 50 % equity interest and all existing fiber customers.

The funds invested by us will be used to fund future fiber builds.

In addition, we are expected to contribute an additional commitment of approximately $ 500 million between 2027 and 2028.

Subsequent to March 31, 2024, on April 25, 2024, we received all necessary regulatory approvals for the Ka’ena Acquisition, which is expected to close on May 1, 2024.

See Note 2 - Business Combination for more information.

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

What changed 10-Q

Item 1. Financial Statements