What changed in this filing

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Item 2. Management’s Discussion and Analysis

2024-04-26 compared with 2023-10-25 · 222 added, 392 removed, 331 unchanged (65% of the section changed)

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

• the difficulties in maintaining multiple billing systems following our merger (the “Merger”) with Sprint Corporation (“Sprint”) pursuant to a Business Combination Agreement with Sprint and the other parties named therein (as amended, the “Business Combination Agreement”) and any unanticipated difficulties, disruption, or significant delays in our long-term strategy to convert Sprint’s legacy customers onto T-Mobile’s billing platforms;

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

• challenges in modernizing our existing applications and systems;

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

(“SoftBank”) and DISH with the U.S.

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

District Court for the District of Columbia, which was approved by the Court on April 1, 2020, as amended on October 23, 2023, the proposed commitments filed with the Secretary of the Federal Communications Commission (“FCC”), which we announced on May 20, 2019, certain national security commitments and undertakings, and any other commitments or undertakings entered into, including, but not limited to, those we have made to certain states and nongovernmental organizations (collectively, the “Government Commitments”), and the challenges in satisfying the Government Commitments in the required time frames and the significant cumulative costs incurred in tracking and monitoring compliance over multiple years;

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

and international markets, including changes resulting from increases in inflation or interest rates, supply chain disruptions and impacts of geopolitical instability, such as the Ukraine-Russia war and Israel-Hamas war;

• sociopolitical volatility and polarization;

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

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

• our inability to fully realize the synergy benefits from the Transactions in the expected time frame;

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

• our substantial level of indebtedness and our inability to service our debt obligations in accordance with their terms;

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

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

• the risk of future material weaknesses we may identify or any other failure by us to maintain effective internal controls, and the resulting significant costs and reputational damage;

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• unfavorable outcomes of and increased costs from existing or future regulatory or legal proceedings;

• difficulties in protecting our intellectual property rights or if we infringe on the intellectual property rights of others;

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

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• interests of DT, our controlling stockholder, which may differ from the interests of other stockholders;

• the dollar amount authorized for our 2023-2024 Stockholder Return Program (as defined in Note 10 - Stockholder Return Program of the Notes to the Condensed Consolidated Financial Statements) may not be fully utilized, and our share repurchases and dividend payments pursuant thereto may fail to have the desired impact on stockholder value;

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

• the dollar amount authorized for our 2023-2024 Stockholder Return Program (as defined in Note 10 – Stockholder Return Programs of the Notes to the Condensed Consolidated Financial Statements) may not be fully utilized, and our share repurchases and dividend payments pursuant thereto may fail to have the desired impact on stockholder value.

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

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

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

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

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

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

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

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

Our MD&A is provided as a supplement to, and should be read together with, our unaudited condensed consolidated financial statements as of and for the three and nine months ended September 30, 2023, included in Part I, Item 1 of this Form 10-Q, and audited consolidated financial statements, included in Part II, Item 8 of our Annual Report on Form 10-K for the year ended December 31, 2022.

Our MD&A is provided as a supplement to, and should be read together with, our unaudited condensed consolidated financial statements as of and for the three months ended March 31, 2024, included in Part I, Item 1 of this Form 10-Q, and audited consolidated financial statements, included in Part II, Item 8 of our Annual Report on Form 10-K for the year ended December 31, 2023.

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

and its consolidated subsidiaries.

Sprint Merger, Network Integration and Decommissioning Activities

Merger-Related Costs

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

Restructuring costs are disclosed in Note 14 – Restructuring Costs of the Notes to the Condensed Consolidated Financial Statements.

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

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Merger-related costs are presented below:

(in millions) Three Months Ended

September 30, Change Nine Months Ended

September 30, Change

(in millions) Three Months Ended March 31, Change

2024 2023 $ %

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Net cash payments for Merger-related costs $ 293 $ 484 $ (191) (39) %

We expect to incur substantially all of the remaining projected Merger-related costs of approximately $200 million, excluding capital expenditures, by the end of 2023, with the cash expenditure for the Merger-related costs extending beyond 2023.

Anticipated Merger Synergies

As a result of our ongoing restructuring and integration activities, we have realized Merger synergies by eliminating redundancies within our combined network as well as other business processes and operations.

For full-year 2023, we expect Merger synergies from Selling, general and administrative expense reductions of approximately $2.7 billion, Cost of service expense reductions of approximately $3.2 billion and avoided network expenses of approximately $1.6 billion.

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 expect a decrease in operating expenses in 2024 driven by reduced personnel costs.

For more information regarding our restructuring activities, see Note 14 – Restructuring Costs of the Notes to the Condensed Consolidated Financial Statements.

On September 6, 2022, we entered into the Wireline Sale Agreement to sell the Wireline Business for a total purchase price of $1 and the payments totaling $700 million under the IP transit services agreement.

On May 1, 2023, pursuant to the Wireline Sale Agreement, upon the terms and subject to the conditions thereof, we completed the Wireline Transaction.

For more information regarding the Wireline Sale Agreement, see Note 11 – Wireline of the Notes to the Condensed Consolidated Financial Statements.

We expect to incur all of the remaining restructuring and integration costs associated with the Merger by the first half of 2024, with the cash expenditure for the Merger-related costs extending beyond 2024.

Cash payments extending beyond 2024 primarily relate to operating and financing leases for which we have recognized accelerated lease expense.

In the second quarter of 2024, we will recognize a gain for the $100 million extension fee previously paid by DISH associated with the DISH License Purchase Agreement as a reduction to Selling, general and administrative expenses on our Condensed Consolidated Statements of Comprehensive Income.

The gain will be presented as a reduction in Merger-related costs and excluded from our calculations of Adjusted EBITDA and Core Adjusted EBITDA.

See Note 5 – Spectrum License Transactions of the Notes to the Condensed Consolidated Financial Statements for more information.

Acquisition of Ka’ena Corporation

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.

Ka’ena Corporation is currently one of our wholesale partners, offering wireless telecommunications services to customers leveraging our network.

Upon closing of the transactions, we expect to recognize customers of Ka’ena Corporation as prepaid customers and expect to see an increase in Prepaid revenues, partially offset by a decrease in Wholesale revenues.

Recent Cyberattacks

In August 2021, we were subject to a criminal cyberattack involving unauthorized access to T-Mobile’s systems.

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

During the nine months ended September 30, 2023, we recognized $50 million in reimbursements from insurance carriers for costs incurred related to the August 2021 cyberattack.

We are pursuing additional reimbursements from insurance carriers for costs incurred related to the August 2021 cyberattack.

In January 2023, we disclosed that a bad actor was obtaining data through a single Application Programming Interface (“API”) without authorization.

Based on our investigation, the impacted API is only able to provide a limited set of customer account data, including name, billing address, email, phone number, date of birth, T-Mobile account number and information such as the number of lines on the account and plan features.

The result from our investigation indicates that the bad actor(s) obtained data from this API for approximately 37 million current postpaid and prepaid customer accounts, though many of these accounts did not include the full data set.

We believe that the bad actor first retrieved data through the impacted API starting on or around November 25, 2022.

We have notified individuals whose information was impacted consistent with state and federal requirements.

We will continue to respond to litigation and regulatory inquiries in connection with this incident 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 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.

In response to the recent cyberattacks and increasing cybersecurity threats, we have significantly increased our focus on enhancing our cybersecurity practices with a substantial multi-year investment.

In the second quarter of 2023, we have hired new security leadership, and implemented significant technology improvements to our cybersecurity controls.

Those improvements include additional authentication measures and internal systems limitations and restrictions.

In addition, we have enhanced our cybersecurity awareness program, including rolling out new training for all employees.

While we have made progress to date, we plan to continue to make substantial investments to strengthen our cybersecurity program in future periods.

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 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.

Ka’ena is currently one of our wholesale partners, offering wireless telecommunications services to customers leveraging our network.

Upon closing of the Ka’ena Acquisition, we expect to recognize customers of Ka’ena as prepaid customers, and we expect to see an increase in Prepaid revenues, partially offset by a decrease in Wholesale and other service revenues.

Results of Operations

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

Three Months Ended

September 30, Change Nine Months Ended

September 30, Change

Three Months Ended March 31, Change

(in millions) 2024 2023 $ %

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Selling, general and administrative 5,138 5,425 (287) (5) %

Impairment expense — — — NM — 477 (477) (100) %

Loss (gain) on disposal group held for sale — 1,071 (1,071) (100) % (25) 1,071 (1,096) (102) %

Gain on disposal group held for sale — (42) 42 (100) %

Depreciation and amortization 3,371 3,203 168 5 %

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Interest expense, net (880) (835) (45) 5 %

Other income (expense), net 41 (3) 44 NM 56 (35) 91 (260) %

Other income, net 20 9 11 122 %

Total other expense, net (860) (826) (34) 4 %

Income before income taxes 3,138 2,571 567 22 %

Income tax (expense) benefit (705) 57 (762) NM (2,053) (106) (1,947) NM

Income tax expense (764) (631) (133) 21 %

Net income $ 2,374 $ 1,940 $ 434 22 %

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Net cash used in investing activities (1,787) (1,728) (59) 3 %

Net cash (used in) provided by financing activities (5,510) 1,927 (7,437) (386) % (8,567) (1,953) (6,614) 339 %

Net cash used in financing activities (1,666) (2,273) 607 (27) %

Non-GAAP Financial Measures

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Adjusted Free Cash Flow 3,347 2,401 946 39 %

NM - Not Meaningful

The following discussion and analysis is for the three and nine months ended September 30, 2023, compared to the same period in 2022 unless otherwise stated.

Total revenues decreased $225 million, or 1%, for the three months ended and decreased $1.2 billion, or 2%, for the nine months ended September 30, 2023.

The components of these changes are discussed below.

Postpaid revenues increased $740 million, or 6%, for the three months ended and increased $2.0 billion, or 6%, for the nine months ended September 30, 2023, primarily from:

The following discussion and analysis is for the three months ended March 31, 2024, compared to the same period in 2023, unless otherwise stated.

Total revenues was relatively flat.

The offsetting changes impacting Total revenues are discussed below.

Postpaid revenues increased $769 million, or 6%, primarily from:

• Higher average postpaid accounts;

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

Prepaid revenues were relatively flat for the three months ended and decreased slightly for the nine months ended September 30, 2023, primarily from:

Prepaid revenues decreased slightly, primarily from:

• Lower prepaid ARPU.

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• Higher average prepaid customers.

Wholesale and other service revenues decreased $176 million, or 13%, for the three months ended and decreased $559 million, or 13%, for the nine months ended September 30, 2023.

The decrease for the three months ended September 30, 2023, was primarily from:

• Lower Wireline revenues due to the sale of the Wireline Business on May 1, 2023.

See Note 11 – Wireline of the Notes to the Condensed Consolidated Financial Statements for additional information;

• Lower MVNO revenues.

The decrease for the nine months ended September 30, 2023, was primarily from:

• Lower MVNO revenues;

Wholesale and other service revenues decreased $205 million, or 16%, primarily from:

• Lower Wireline revenues due to the sale of the Wireline Business on May 1, 2023;

See Note 11 – Wireline of the Notes to the Condensed Consolidated Financial Statements for additional information.

Equipment revenues decreased $779 million, or 20%, for the three months ended and decreased $2.7 billion, or 21%, for the nine months ended September 30, 2023.

The decrease for the three months ended September 30, 2023, was primarily from:

• Lower Affordable Connectivity Program and Lifeline revenues;

• Lower MVNO revenues, primarily due to DISH servicing more of its Boost customers with their standalone network and the migration of legacy TracFone customers off of the T-Mobile network, partially offset by growth in other MVNO partners.

Equipment revenues decreased $468 million, or 13%, primarily from:

• A decrease of $503 million in device sales revenue, excluding purchased leased devices, primarily from:

• A decrease in the number of devices sold, primarily due to lower postpaid upgrades and prepaid sales driven by longer device lifecycles, as well as higher postpaid upgrades in the prior year period related to facilitating the migration of Sprint customers to the T-Mobile network;

• A decrease in the number of postpaid and prepaid devices sold, including lower upgrades;

partially offset by

• Slightly higher average revenue per device sold, primarily driven by a shift in the high-end phone mix, mostly offset by an increase in promotions per postpaid device;

• A decrease of $112 million in lease revenues, primarily due to a lower number of customer devices under lease as a result of the continued strategic shift in device financing from leasing to EIP;

• A decrease of $74 million in accessory revenue, primarily due to a decrease in the number of associated devices sold.

The decrease for the nine months ended September 30, 2023, was primarily from:

• A decrease of $1.3 billion in device sales revenue, excluding purchased leased devices, primarily from:

• A decrease in the number of devices sold, primarily driven by higher postpaid upgrades in the prior year period related to facilitating the migration of Sprint customers to the T-Mobile network, as well as longer device lifecycles, and lower prepaid sales;

partially offset by

• Slightly higher average revenue per device sold, primarily driven by higher promotions in the prior year period, which included promotions for Sprint customers to facilitate the migration to the T-Mobile network, partially offset by a decrease in the high-end phone mix;

• A decrease of $915 million in lease revenues and a decrease of $180 million in customer purchases of leased devices, primarily due to a lower number of customer devices under lease as a result of the continued strategic shift in device financing from leasing to EIP;

• A decrease of $228 million in accessory revenue, primarily due to a decrease in the number of associated devices sold.

Other revenues were relatively flat for the three months ended and increased $104 million, or 13%, for the nine months ended September 30, 2023.

The increase for the nine months ended September 30, 2023, was primarily from:

• Higher interest income driven by higher imputed interest rates on EIP, which is recognized over the device financing term;

• Higher revenue from our device recovery program.

Total operating expenses decreased $2.5 billion, or 14%, for the three months ended and decreased $8.2 billion, or 15%, for the nine months ended September 30, 2023.

• An increase of $227 million in liquidation revenue, primarily due to a higher number of in-house liquidated devices, including the impact from the transition of certain device recovery programs from external sources to in-house processing.

Other revenues decreased $120 million, or 33%, primarily from the transition of certain device recovery programs from external sources to in-house processing, resulting in a change in presentation from Other revenues to Equipment revenues.

Total operating expenses decreased $639 million, or 4%.

The components of this change are discussed below.

Cost of services , exclusive of depreciation and amortization, decreased $826 million, or 22%, for the three months ended and decreased $2.6 billion, or 23%, for the nine months ended September 30, 2023.

The decrease for the three months ended September 30, 2023, was primarily from:

• A decrease of $692 million in Merger-related costs related to network decommissioning and integration as the majority of our decommissioning efforts were completed in 2022;

• Lower costs due to the sale of the Wireline Business on May 1, 2023.

See Note 11 - Wireline of the Notes to the Condensed Consolidated Financial Statements for additional information;

• Higher realized Merger synergies;

partially offset by

• $140 million of severance and related costs associated with the August 2023 workforce reduction;

• Higher site costs related to the continued build-out of our nationwide 5G network.

The decrease for the nine months ended September 30, 2023, was primarily from:

• A decrease of $1.9 billion in Merger-related costs related to network decommissioning and integration as the majority of our decommissioning efforts were completed in 2022;

• Higher realized Merger synergies;

Cost of services , exclusive of depreciation and amortization, decreased $373 million, or 12%, primarily from:

• Lower costs due to the sale of the Wireline Business on May 1, 2023;

See Note 11 - Wireline of the Notes to the Condensed Consolidated Financial Statements for additional information;

partially offset by

• $140 million of severance and related costs associated with the August 2023 workforce reduction;

• Higher site costs related to the continued build-out of our nationwide 5G network.

Cost of equipment sales , exclusive of depreciation and amortization, decreased $733 million, or 15%, for the three months ended and decreased $3.1 billion, or 19%, for the nine months ended September 30, 2023.

The decrease for the three months ended September 30, 2023, was primarily from:

• Lower employee costs, primarily due to reduced headcount;

• A decrease of $101 million in Merger-related costs related to network decommissioning and integration, as well as higher Merger synergies.

Cost of equipment sales , exclusive of depreciation and amortization, decreased $189 million, or 4%, primarily from:

• A decrease of $291 million in device cost of equipment sales, excluding purchased leased devices, primarily from:

• A decrease of $41 million in accessory costs, primarily due to a decrease in the number of associated devices sold.

• Cost of equipment sales for the three months ended September 30, 2023, included $3 million of Merger-related recoveries, compared to $258 million of Merger-related costs for the three months ended September 30, 2022.

The decrease for the nine months ended September 30, 2023, was primarily from:

• A decrease of $2.8 billion in device cost of equipment sales, excluding purchased leased devices, primarily from:

• Slightly lower average cost per device sold driven by a decrease in the high-end phone mix.

• A decrease of $101 million in accessory costs, primarily due to a decrease in the number of associated devices sold.

• Cost of equipment sales for the nine months ended September 30, 2023, included $12 million of Merger-related recoveries, compared to $1.5 billion of Merger-related costs for the nine months ended September 30, 2022.

Selling, general and administrative expenses increased $216 million, or 4%, for the three months ended and was relatively flat for the nine months ended September 30, 2023.

The increase for the three months ended September 30, 2023, was primarily from:

• $331 million of severance and related costs associated with the August 2023 workforce reduction;

• Gains from the sale of certain IP addresses held by the Wireline Business of $121 million recognized during the three months ended September 30, 2022;

• A decrease in the number of postpaid and prepaid devices sold, including lower upgrades;

partially offset by

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

• Lower costs related to outsourced functions.

• Selling, general and administrative expenses for the three months ended September 30, 2023, included $35 million of Merger-related costs, which were net of legal settlement gains of $69 million, compared to $226 million of Merger-related costs for the three months ended September 30, 2022.

The slight increase for the nine months ended September 30, 2023, was primarily from:

• $331 million of severance and related costs associated with the August 2023 workforce reduction;

• Higher commission amortization expense;

• Higher advertising expense;

• Gains from the sale of certain IP addresses held by the Wireline Business of $121 million recognized during the three months ended September 30, 2022;

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

• Lower legal-related expenses, including $400 million recognized in June 2022 associated with the settlement of certain litigation resulting from the August 2021 cyberattack;

• Lower bad debt expense.

• Selling, general and administrative expenses for the nine months ended September 30, 2023, included $292 million of Merger-related costs, which were net of legal settlement gains of $134 million, compared to $529 million of Merger-related costs for the nine months ended September 30, 2022, which were net of legal settlement gains of $220 million.

Impairment expense was $477 million for the nine months ended September 30, 2022, due to the non-cash impairment of certain Wireline Property and equipment, Operating lease right-of-use assets and Other intangible assets.

There was no impairment expense for the three and nine months ended September 30, 2023 and the three months ended September 30, 2022.

Loss (gain) on disposal group held for sale was a gain of $25 million for the nine months ended September 30, 2023 and a loss of $1.1 billion for the three and nine months ended September 30, 2022.

See Note 11 - Wireline of the Notes to the Condensed Consolidated Financial Statements for additional information.

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

Depreciation and amortization decreased $126 million, or 4%, for the three months ended and decreased $889 million, or 9%, for the nine months ended September 30, 2023.

The decrease for the three and nine months ended September 30, 2023, was primarily from:

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

• Certain 4G-related network assets becoming fully depreciated, including assets impacted by the decommissioning of the legacy Sprint CDMA and LTE networks in 2022;

• Higher average cost per device sold, primarily driven by a shift in the high-end phone mix;

partially offset by

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

• Higher amortization of capitalized software driven by increased in-service internally developed and purchased software.

Operating income , the components of which are discussed above, increased $2.3 billion, or 181%, for the three months ended and increased $7.0 billion, or 184%, for the nine months ended September 30, 2023.

Interest expense, net decreased $37 million, or 4%, for the three months ended and decreased $56 million, or 2%, for the nine months ended September 30, 2023, primarily from:

• Higher interest income, primarily due to higher average interest rates on short-term cash equivalents;

• Higher capitalized interest, primarily driven by deployment activities associated with our C-band spectrum licenses;

• An increase of $156 million in liquidation costs, primarily due to a higher number of in-house liquidated devices, including the impact from the transition of certain device recovery programs from external sources to in-house processing.

Selling, general and administrative expenses decreased $287 million, or 5%, primarily from:

• A decrease of $136 million in Merger-related costs, as well as higher Merger synergies;

• Lower employee costs, primarily due to reduced headcount;

• Lower severance and restructuring expenses;

partially offset by

• Higher interest expense, primarily due to higher average debt outstanding and a higher average effective interest rate.

Other income (expense), net was insignificant for all periods.

Income before income taxes , the components of which are discussed above, was $2.8 billion and $451 million for the three months ended September 30, 2023 and 2022, respectively, and was $8.4 billion and $1.2 billion for the nine months ended September 30, 2023 and 2022, respectively.

Income tax expense increased $762 million for the three months ended and increased $1.9 billion for the nine months ended September 30, 2023, primarily from:

• Higher income before income taxes;

• Tax benefits recognized during the three months ended September 30, 2022, associated with certain entity restructuring, that did not impact 2023.

Our effective tax rate was 24.8% and (12.4)% for the three months ended September 30, 2023 and 2022, respectively, and 24.6% and 8.7% for the nine months ended September 30, 2023 and 2022, respectively.

Net income , the components of which are discussed above, was $2.1 billion and $508 million for the three months ended September 30, 2023 and 2022, respectively, and was $6.3 billion and $1.1 billion for the nine months ended September 30, 2023 and 2022, respectively.

Net income included:

• Merger-related costs, net of tax, of $114 million and $589 million for the three and nine months ended September 30, 2023, respectively, compared to $972 million and $3.3 billion for the three and nine months ended September 30, 2022, respectively.

• Gain on disposal group held for sale of $19 million, net of tax, for the nine months ended September 30, 2023, compared to a loss on disposal group held for sale of $803 million, net of tax, for the three and nine months ended September 30, 2022.

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

• Impairment expense of $358 million, net of tax, for the nine months ended September 30, 2022, compared to no impairment expense for the three and nine months ended September 30, 2023 and the three months ended September 30, 2022.

• Severance and related costs associated with the August 2023 workforce reduction of $353 million, net of tax, for the three and nine months ended September 30, 2023.

• Legal-related recoveries, net, associated with the settlement of certain litigation resulting from the August 2021 cyberattack, of $32 million for the nine months ended September 30, 2023, compared to $14 million in Legal-related recoveries, net, and $286 million in Legal-related expenses, net, for the three and nine months ended September 30, 2022, respectively.

There was no Legal-related expenses or recoveries for the three months ended September 30, 2023, associated with the August 2021 cyberattack.

• Higher legal expenses.

Gain on disposal group held for sale was $42 million for the three months ended March 31, 2023, related to the sale of the Wireline Business on May 1, 2023.

There was no gain or loss on disposal group held for sale for the three months ended March 31, 2024.

Depreciation and amortization increased $168 million, or 5%, primarily from higher depreciation expense from the acceleration of certain technology assets as we continue to modernize our network, technology systems and platforms.

Operating income , the components of which are discussed above, increased $601 million, or 18%.

Interest expense, net increased $45 million, or 5%, primarily from:

• Higher interest expense, primarily due to higher average debt outstanding and a slightly higher average effective interest rate;

partially offset by

• Higher interest income, primarily due to higher average balances and higher average interest rates on short-term cash equivalents.

Other income, net was insignificant for both periods.

Income before income taxes , the components of which are discussed above, was $3.1 billion and $2.6 billion for the three months ended March 31, 2024 and 2023, respectively.

Income tax expense increased $133 million, or 21%, primarily from higher income before income taxes.

Our effective tax rate was 24.4% and 24.5% for the three months ended March 31, 2024 and 2023, respectively.

Net income , the components of which are discussed above, was $2.4 billion and $1.9 billion for the three months ended March 31, 2024 and 2023, respectively.

Net income included Merger-related costs, net of tax, of $97 million for the three months ended March 31, 2024, compared to $268 million for the three months ended March 31, 2023.

Guarantor Financial Information

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will be automatically and unconditionally released if, immediately following such release and any concurrent releases of other guarantees, the aggregate principal amount of indebtedness of non-guarantor subsidiaries (other than certain specified subsidiaries) would not exceed $2.0 billion.

The indentures, supplemental indentures and credit agreements governing the long-term debt contain covenants that, among other things, limit the ability of the Issuers or borrowers and the Guarantor Subsidiaries to incur more debt, create liens or other encumbrances, and merge, consolidate or sell, or otherwise dispose of, substantially all of their assets.

The indentures, supplemental indentures and credit agreements governing the long-term debt contain covenants that, among other things, limit the ability of the Issuers or borrowers and the Guarantor Subsidiaries to incur more debt, create liens or other encumbrances, and to merge, consolidate or sell, or otherwise dispose of, substantially all of their assets.

Basis of Presentation

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is presented in the table below:

(in millions) September 30, 2023 December 31, 2022

(in millions) March 31, 2024 December 31, 2023

Current assets $ 17,865 $ 17,601

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is presented in the table below:

(in millions) Nine Months Ended

September 30, 2023 Year Ended

(in millions) Three Months Ended

March 31, 2024 Year Ended

December 31, 2023

1 unchanged sentence

Operating income 3,107 10,707

Net income (loss) 3,645 (572)

Net income 1,531 4,766

Revenue from non-guarantors 645 2,393

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

(in millions) September 30, 2023 December 31, 2022

(in millions) March 31, 2024 December 31, 2023

Current assets $ 12,020 $ 11,193

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

(in millions) Nine Months Ended

September 30, 2023 Year Ended

(in millions) Three Months Ended

March 31, 2024 Year Ended

December 31, 2023

1 unchanged sentence

Operating loss (980) (3,197)

Net (loss) income (1)

(5,448) 2,471

Other (expense) income, net, (to) from non-guarantors (1,460) 525

(1) Net income for the year ended December 31, 2022, includes tax benefits recognized associated with certain entity restructuring.

Net loss (2,259) (7,629)

Other expense, net, to non-guarantors (353) (2,005)

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

(in millions) September 30, 2023 December 31, 2022

(in millions) March 31, 2024 December 31, 2023

Current assets $ 12,021 $ 11,193

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Due to non-guarantors 37,775 32,706

Due from non-guarantors — 5,066

Due to related parties 1,563 1,576

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

(in millions) Nine Months Ended

September 30, 2023 Year Ended

(in millions) Three Months Ended

March 31, 2024 Year Ended

December 31, 2023

1 unchanged sentence

Operating loss (980) (3,197)

Net (loss) income (1)

(5,365) 2,604

Other (expense) income, net, (to) from non-guarantors (1,075) 941

(1) Net income for the year ended December 31, 2022, includes tax benefits recognized associated with certain entity restructuring.

Net loss (2,221) (7,491)

Other expense, net, to non-guarantors (242) (1,489)

Performance Measures

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

Postpaid accounts generally consist of customers that are qualified for postpaid service utilizing phones, High Speed Internet, mobile internet devices, including tablets and hotspots, wearables, DIGITS or other connected devices, including SyncUP and IoT, where they generally pay after receiving service.

Postpaid accounts generally consist of customers that are qualified for postpaid service utilizing phones, High Speed Internet modems, mobile internet devices (including tablets and hotspots), wearables, DIGITS and other connected devices (including SyncUP and IoT), where they generally pay after receiving service.

The following table sets forth the number of ending postpaid accounts:

As of September 30, Change

As of March 31, Change

(in thousands) 2024 2023 # %

Postpaid accounts 30,015 28,813 1,202 4 %

29,498 28,212 1,286 5 %

(1) Customers impacted by the decommissioning of the legacy Sprint CDMA and LTE and T-Mobile UMTS networks have been excluded from our postpaid account base resulting in the removal of 57,000 postpaid accounts in the first quarter of 2022 and 69,000 postpaid accounts in the second quarter of 2022.

Postpaid Net Account Additions

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

Three Months Ended

September 30, Change Nine Months Ended

September 30, Change

Three Months Ended March 31, Change

(in thousands) 2024 2023 # %

Postpaid net account additions 218 287 (69) (24) %

Postpaid net account additions decreased 8,000, or 2%, for the three months ended and decreased 150,000, or 13%, for the nine months ended September 30, 2023.

The decrease for the three months ended September 30, 2023, was primarily from fewer High Speed Internet only net account additions.

The decrease for the nine months ended September 30, 2023, was primarily from:

• Continued moderation of industry growth;

• Fewer High Speed Internet only net account additions.

Postpaid net account additions decreased 69,000, or 24%, primarily from fewer High Speed Internet only net account additions.

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

Customers are qualified either for postpaid service utilizing phones, High Speed Internet, mobile internet devices, including tablets and hotspots, wearables, DIGITS or other connected devices, including SyncUP and IoT, where they generally pay after receiving service, or prepaid service, where they generally pay in advance of receiving service.

Customers are qualified either for postpaid service utilizing phones, High Speed Internet modems, mobile internet devices (including tablets and hotspots), wearables, DIGITS and other connected devices (including SyncUP and IoT), where they generally pay after receiving service, or prepaid service, where they generally pay in advance of receiving service.

The following table sets forth the number of ending customers:

As of September 30, Change

As of March 31, Change

(in thousands) 2024 2023 # %

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Postpaid phone customers 76,468 73,372 3,096 4 %

74,982 71,907 3,075 4 %

Postpaid other customers 22,804 20,153 2,651 13 %

21,330 18,507 2,823 15 %

Total postpaid customers 99,272 93,525 5,747 6 %

Prepaid customers 21,600 21,392 208 1 %

21,595 21,341 254 1 %

Total customers 120,872 114,917 5,955 5 %

Adjustments to customers (1)

— (1,878) 1,878 (100) %

(1) Customers impacted by the decommissioning of the legacy Sprint CDMA and LTE and T-Mobile UMTS networks have been excluded from our customer base resulting in the removal of 212,000 postpaid phone customers and 349,000 postpaid other customers in the first quarter of 2022 and 284,000 postpaid phone customers, 946,000 postpaid other customers and 28,000 prepaid customers in the second quarter of 2022.

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

Certain customers now serviced through reseller contracts were removed from our reported postpaid customer base resulting in the removal of 42,000 postpaid phone customers and 20,000 postpaid other customers in the second quarter of 2022.

High Speed Internet customers included in Postpaid other customers were 3,807,000 and 1,960,000 as of September 30, 2023 and 2022, respectively.

High Speed Internet customers included in Prepaid customers were 428,000 and 162,000 as of September 30, 2023 and 2022, respectively.

Net Customer Additions

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

Three Months Ended

September 30, Change Nine Months Ended

September 30, Change

High Speed Internet customers included in Postpaid other customers were 4,634,000 and 2,855,000 as of March 31, 2024 and 2023, respectively.

High Speed Internet customers included in Prepaid customers were 547,000 and 314,000 as of March 31, 2024 and 2023, respectively.

Net Customer Additions (Losses)

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

Three Months Ended March 31, Change

(in thousands) 2024 2023 # %

Net customer additions

Net customer additions (losses)

Postpaid phone customers 532 538 (6) (1) %

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Total net customer additions 1,172 1,319 (147) (11) %

Adjustments to customers — — — NM — (1,878) 1,878 (100) %

NM - Not meaningful

Total net customer additions decreased 427,000, or 25%, for the three months ended and decreased 605,000, or 12%, for the nine months ended September 30, 2023.

The decrease for the three months ended September 30, 2023, was primarily from:

• Lower postpaid other net customer additions, primarily due to deactivations from mobile internet devices in the educational sector that were originally activated during the COVID-19 pandemic (“Pandemic”) and no longer needed;

• Lower prepaid net customer additions, primarily due to continued moderation of industry growth and fewer High Speed Internet net additions, partially offset by lower churn.

• Postpaid phone net customer additions were relatively flat, primarily due to increased deactivations from a growing customer base despite slightly lower churn, offset by higher gross additions.

• High Speed Internet net customer additions included in postpaid other net customer additions were 505,000 and 488,000 for the three months ended September 30, 2023 and 2022, respectively.

High Speed Internet net customer additions included in prepaid net customer additions were 52,000 and 90,000 for the three months ended September 30, 2023 and 2022, respectively.

The decrease for the nine months ended September 30, 2023, was primarily from:

Total net customer additions decreased 147,000, or 11%, primarily from:

• Prepaid net customer losses, primarily due to lower gross additions driven by continued moderation of prepaid industry growth and lower net additions from High Speed Internet;

• Lower postpaid other net customer additions, primarily due to

• Deactivations from mobile internet devices in the educational sector that were originally activated during the Pandemic and no longer needed;

• Lower net additions from other connected devices;

• Lower net additions from High Speed Internet, primarily driven by increased deactivations from a growing customer base and lower gross additions driven by sunsetting of promotional pricing in order to maximize long-term value creation, partially offset by a lower churn rate;

• Lower net additions from wearables;

partially offset by

• Higher High Speed Internet net customer additions, primarily due to continued growth in gross additions driven by increasing customer demand, partially offset by increased deactivations from a growing customer base;

• Lower prepaid net customer additions, primarily due to continued moderation of industry growth and continued industry migration of prepaid to postpaid, partially offset by growth in High Speed Internet;

• Slightly lower postpaid phone net customer additions, primarily due to increased deactivations from a growing customer base despite slightly lower churn, mostly offset by higher gross additions.

• High Speed Internet net customer additions included in postpaid other net customer additions were 1,397,000 and 1,314,000 for the nine months ended September 30, 2023 and 2022, respectively.

High Speed Internet net customer additions included in prepaid net customer additions were 192,000 and 162,000 for the nine months ended September 30, 2023 and 2022, respectively.

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

The number of customers whose service was disconnected is presented net of customers that subsequently had their service restored within a certain period of time and excludes customers who received service for less than a certain minimum period of time.

• Higher net additions from other connected devices;

• Slightly lower postpaid phone net customer additions, primarily due to increased deactivations from a growing customer base, mostly offset by lower churn and higher gross additions.

• High Speed Internet net customer additions included in postpaid other net customer additions were 346,000 and 445,000 for the three months ended March 31, 2024 and 2023, respectively.

High Speed Internet net customer additions included in prepaid net customer (losses) additions were 59,000 and 78,000 for the three months ended March 31, 2024 and 2023, respectively.

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

The number of customers whose service was deactivated is presented net of customers that subsequently had their service restored within a certain period of time and excludes customers who received service for less than a certain minimum period of time.

We believe that churn provides management, investors and analysts with useful information to evaluate customer retention and loyalty.

The following table sets forth the churn:

Three Months Ended

September 30, Change Nine Months Ended

September 30, Change

2023 2022 2023 2022

Postpaid phone churn 0.87 % 0.88 % -1 bps 0.84 % 0.87 % -3 bps

Prepaid churn 2.81 % 2.88 % -7 bps 2.73 % 2.71 % 2 bps

Postpaid phone churn decreased 1 basis point for the three months ended and decreased 3 basis points for the nine months ended September 30, 2023, primarily from improved customer retention driven by a differentiated value proposition and network experience.

Prepaid churn decreased 7 basis points for the three months ended and increased 2 basis points for the nine months ended September 30, 2023.

The decrease for the three months ended September 30, 2023, was primarily from improved customer retention.

The increase for the nine months ended September 30, 2023, was primarily from continued industry migration of prepaid to postpaid.

Three Months Ended March 31, Change

Postpaid phone churn 0.86 % 0.89 % -3 bps

Prepaid churn 2.75 % 2.76 % -1 bps

Postpaid phone churn decreased 3 basis points, primarily from improved customer retention driven by value and network leadership.

Prepaid churn was relatively flat.

Postpaid Average Revenue Per Account

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Postpaid ARPA is calculated as Postpaid revenues for the specified period divided by the average number of postpaid accounts during the period, further divided by the number of months in the period.

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

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

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

We consider postpaid ARPA to be indicative of our revenue growth potential given the increase in the average number of postpaid phone customers per account and increases in postpaid other customers, including High Speed Internet, mobile internet devices (including tablets and hotspots), wearables, DIGITS and other connected devices (including SyncUP and IoT).

The following table sets forth our operating measure ARPA:

(in dollars) Three Months Ended

September 30, Change Nine Months Ended

September 30, Change

(in dollars) Three Months Ended March 31, Change

2024 2023 $ %

Postpaid ARPA $ 140.88 $ 138.04 $ 2.84 2 %

Postpaid ARPA increased $2.34, or 2%, for the three months ended and increased $1.62, or 1%, for the nine months ended September 30, 2023.

The increase for the three months ended September 30, 2023, was primarily from:

• An increase in customers per account, including growth in business and continued adoption of High Speed Internet;

• Higher premium services, primarily high-end rate plans, net of contra-revenue for content included in such plans and discounts for specific affinity groups, such as 55+, Military and First Responder;

partially offset by

• Increased promotional activity;

• An increase in High Speed Internet only accounts.

The slight increase for the nine months ended September 30, 2023, was primarily from:

Postpaid ARPA increased $2.84, or 2%, primarily from:

• Higher premium services, primarily high-end rate plans, net of contra-revenue for content included in such plans, and discounts for specific affinity groups, such as 55+, Military and First Responder;

• An increase in customers per account, including growth in business and continued adoption of High Speed Internet;

• An increase in customers per account, including continued adoption of High Speed Internet;

partially offset by

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The following table sets forth our operating measure ARPU:

(in dollars) Three Months Ended

September 30, Change Nine Months Ended

September 30, Change

(in dollars) Three Months Ended March 31, Change

2024 2023 $ %

2 unchanged sentences

Postpaid Phone ARPU

Postpaid phone ARPU was relatively flat for the three and nine months ended September 30, 2023, primarily from:

Postpaid phone ARPU was relatively flat, primarily from:

• Increased promotional activity;

• Growth in business with lower ARPU given larger account sizes.

Prepaid ARPU decreased $0.68, or 2%, for the three months ended and decreased $0.87, or 2%, for the nine months ended September 30, 2023, primarily from dilution from promotional rate plan mix.

• Growth in business customers with lower ARPU given larger account sizes.

Prepaid ARPU decreased $0.80, or 2%, primarily from dilution from rate plan mix.

Adjusted EBITDA and Core Adjusted EBITDA

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

Adjusted EBITDA represents earnings before Interest expense, net of Interest income, Income tax expense, Depreciation and amortization, stock-based compensation and certain expenses, gains and losses, which are not reflective of our ongoing operating performance (“Special Items”).

Special Items include Merger-related costs, gain on disposal groups held for sale, certain legal-related recoveries and expenses, restructuring costs not directly attributable to the Merger (including severance), and other non-core gains and losses.

Core Adjusted EBITDA represents Adjusted EBITDA less device lease revenues.

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

Management believes analysts and investors use Adjusted EBITDA and Core Adjusted EBITDA as supplemental measures to evaluate overall operating performance and to facilitate comparisons with other wireless communications services companies because they are indicative of our ongoing operating performance and trends by excluding the impact of interest expense from financing, non-cash depreciation and amortization from capital investments, stock-based compensation, Merger-related costs, including network decommissioning

costs, impairment expense, gain on disposal groups held for sale and certain legal-related recoveries and expenses, as well as other special income and expenses, including the August 2023 workforce reduction, which are not reflective of our core business activities.

Management believes analysts and investors use Adjusted EBITDA and Core Adjusted EBITDA as supplemental measures to evaluate overall operating performance and to facilitate comparisons with other wireless communications services companies because they are indicative of our ongoing operating performance and trends by excluding the impact of interest expense from financing, non-cash depreciation and amortization from capital investments, non-cash stock-based compensation, and Special Items.

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

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

Three Months Ended

September 30, Change Nine Months Ended

September 30, Change

Three Months Ended March 31, Change

(in millions, except percentages) 2024 2023 $ %

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Interest expense, net 880 835 45 5 %

Other (income) expense, net (41) 3 (44) NM (56) 35 (91) (260) %

Income tax expense (benefit) 705 (57) 762 NM 2,053 106 1,947 NM

Other income, net (20) (9) (11) 122 %

Income tax expense 764 631 133 21 %

Operating income 3,998 3,397 601 18 %

3 unchanged sentences

Merger-related costs 130 358 (228) (64) %

Impairment expense — — — NM — 477 (477) (100) %

Legal-related (recoveries) expenses, net (2)

Legal-related recoveries, net (2)

— (43) 43 (100) %

Loss (gain) on disposal group held for sale — 1,071 (1,071) (100) % (25) 1,071 (1,096) (102) %

Gain on disposal group held for sale — (42) 42 (100) %

Other, net (3)

513 (48) 561 NM 720 72 648 NM

13 153 (140) (92) %

Adjusted EBITDA 7,652 7,199 453 6 %

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$ 7,617 $ 7,052 $ 565 8 %

Net income margin (Net income divided by Service revenues) 13 % 3 % 1,000 bps 13 % 2 % 1,100 bps

Adjusted EBITDA margin (Adjusted EBITDA divided by Service revenues) 48 % 46 % 200 bps 47 % 46 % 100 bps

Net income margin (Net income divided by Service revenues) 15 % 12 % 300 bps

Adjusted EBITDA margin (Adjusted EBITDA divided by Service revenues) 48 % 46 % 200 bps

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

47 % 44 % 300 bps 46 % 43 % 300 bps

47 % 45 % 200 bps

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

Additionally, certain stock-based compensation expenses associated with the Transactions have been included in Merger-related costs.

(2) Legal-related (recoveries) expenses, net, consists of the settlement of certain litigation associated with the August 2021 cyberattack and is presented net of insurance recoveries.

(3) Other, net, primarily consists of certain severance, restructuring and other expenses and income not directly attributable to the Merger which are not reflective of T-Mobile’s core business activities (“special items”) and are, therefore, excluded from Adjusted EBITDA and Core Adjusted EBITDA.

Other, net, for the three and nine months ended September 30, 2023, includes $471 million of severance and related costs associated with the August 2023 workforce reduction.

NM - Not meaningful

Core Adjusted EBITDA increased $819 million, or 12%, for the three months ended and increased $2.1 billion, or 11%, for the nine months ended September 30, 2023.

(2) Legal-related recoveries, net, consists of the settlement of certain litigation associated with the August 2021 cyberattack and is presented net of insurance recoveries.

(3) Other, net, primarily consists of certain severance, restructuring and other expenses, gains and losses, not directly attributable to the Merger which are not reflective of T-Mobile’s core business activities and are, therefore, excluded from Adjusted EBITDA and Core Adjusted EBITDA.

Core Adjusted EBITDA increased $565 million, or 8%.

The components comprising Core Adjusted EBITDA are discussed further above.

The increase for the three months ended September 30, 2023, was primarily from:

• Higher Total service revenues;

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

• Lower Cost of services, excluding Merger-related costs and other special items, such as severance and related costs associated with the August 2023 workforce reduction;

partially offset by

• Lower Equipment revenues, excluding lease revenues.

The increase for the nine months ended September 30, 2023, was primarily from:

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

The increase was primarily from:

• Higher Total service revenues;

• Lower Cost of services, excluding Merger-related costs and other special items, such as severance and related costs associated with the August 2023 workforce reduction;

• Lower Cost of services, excluding Special Items;

• Lower Cost of equipment sales, excluding Special Items;

partially offset by

• Lower Equipment revenues, excluding lease revenues;

Adjusted EBITDA increased $561 million, or 8%, for the three months ended and increased $1.2 billion, or 6%, for the nine months ended September 30, 2023, primarily due to the fluctuations in Core Adjusted EBITDA, discussed above, partially offset by lower lease revenues, which decreased $258 million for the three months ended and decreased $915 million for the nine months ended September 30, 2023.

• Lower Other revenues.

Adjusted EBITDA increased $453 million, or 6%, primarily due to the fluctuations in Core Adjusted EBITDA, discussed above, partially offset by lower lease revenues, which decreased $112 million.

Liquidity and Capital Resources

Our principal sources of liquidity are our cash and cash equivalents and cash generated from operations, proceeds from issuance of debt, financing leases, the sale of certain receivables, the Revolving Credit Facility (as defined below) and, beginning in July 2023, an unsecured short-term commercial paper program.

Further, the incurrence of additional indebtedness may inhibit our ability to incur new debt in the future to finance our business strategy under the terms governing our existing and future indebtedness.

The following is a condensed schedule of our cash flows:

Three Months Ended

September 30, Change Nine Months Ended

September 30, Change

Three Months Ended March 31, Change

(in millions) 2024 2023 $ %

1 unchanged sentence

Net cash used in investing activities (1,787) (1,728) (59) 3 %

Net cash (used in) provided by financing activities (5,510) 1,927 (7,437) (386) % (8,567) (1,953) (6,614) 339 %

Net cash used in financing activities (1,666) (2,273) 607 (27) %

Operating Activities

Net cash provided by operating activities increased $903 million, or 21%, for the three months ended and increased $1.3 billion, or 10%, for the nine months ended September 30, 2023.

The increase for the three months ended September 30, 2023, was primarily from:

• A $1.7 billion increase in Net income, adjusted for non-cash income and expense;

partially offset by

• An $846 million increase in net cash outflows from changes in working capital, primarily due to higher use of cash from Other current and long-term liabilities, Inventory, Operating lease right-of-use assets and Accounts payable and accrued liabilities, partially offset by lower use of cash from Equipment installment plan receivables, Other current and long-term assets and Accounts receivable.

• Net cash provided by operating activities includes the impact of $345 million and $942 million in net payments for Merger-related costs for the three months ended September 30, 2023 and 2022, respectively.

The increase for the nine months ended September 30, 2023, was primarily from:

• A $5.1 billion increase in Net income, adjusted for non-cash income and expense;

partially offset by

• A $3.8 billion increase in net cash outflows from changes in working capital, primarily due to higher use of cash from Accounts payable and accrued liabilities, Other current and long-term liabilities, Operating lease right-of-use assets and Short- and long-term operating lease liabilities, partially offset by lower use of cash from Equipment installment plan receivables and Other current and long-term assets.

• Net cash provided by operating activities includes the impact of $1.6 billion and $2.7 billion in net payments for Merger-related costs for the nine months ended September 30, 2023 and 2022, respectively.

Net cash provided by operating activities increased $1.0 billion, or 25%, primarily from:

• A $714 million increase in Net income, adjusted for non-cash income and expense;

• A $319 million decrease in net cash outflows from changes in working capital, primarily due to lower use of cash from Accounts receivable, Other current and long-term assets and Equipment installment plan receivables, partially offset by higher use of cash from Accounts payable and accrued liabilities and Operating lease right-of-use assets.

• Net cash provided by operating activities includes the impact of $293 million and $484 million in net payments for Merger-related costs for the three months ended March 31, 2024 and 2023, respectively.

Investing Activities

Net cash used in investing activities decreased $1.2 billion, or 45%, for the three months ended and decreased $5.6 billion, or 55%, for the nine months ended September 30, 2023.

The use of cash for the three months ended September 30, 2023, was primarily from:

• $2.4 billion in Purchases of property and equipment, including capitalized interest, from the accelerated build-out of our nationwide 5G network;

partially offset by

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

The use of cash for the nine months ended September 30, 2023, was primarily from:

• $8.2 billion in Purchases of property and equipment, including capitalized interest, from the accelerated build-out of our nationwide 5G network;

Net cash used in investing activities increased $59 million, or 3%.

The use of cash was primarily from:

• $2.6 billion in Purchases of property and equipment, including capitalized interest, from the continued build-out of our nationwide 5G network;

partially offset by

• $3.8 billion in Proceeds related to beneficial interests in securitization transactions.

• $890 million in Proceeds related to beneficial interests in securitization transactions.

Financing Activities

Net cash used in financing activities increased $7.4 billion, or 386%, for the three months ended and increased $6.6 billion, or 339%, for the nine months ended September 30, 2023.

The use of cash for the three months ended September 30, 2023, was primarily from:

• $4.5 billion in Repayments of long-term debt;

• $2.7 billion in Repurchases of common stock;

• $304 million in Repayments of financing lease obligations;

partially offset by

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

The use of cash for the nine months ended September 30, 2023, was primarily from:

Net cash used in financing activities decreased $607 million, or 27%.

The use of cash was primarily from:

• $3.6 billion in Repurchases of common stock;

• $4.8 billion in Repayments of long-term debt;

• $769 million in Dividends on common stock ;

• $327 million in Repayments of financing lease obligations;

• $223 million in Repayments of long-term debt;

• $192 million in Tax withholdings on share-based awards;

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Cash and Cash Equivalents

As of September 30, 2023, our Cash and cash equivalents were $5.0 billion compared to $4.5 billion at December 31, 2022.

As of March 31, 2024, our Cash and cash equivalents were $6.7 billion compared to $5.1 billion at December 31, 2023.

Adjusted Free Cash Flow

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

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

Starting in the first quarter of 2023, we renamed Free Cash Flow to Adjusted Free Cash Flow.

This change in name did not result in any change to the definition or calculation of this non-GAAP financial measure.

Adjusted Free Cash Flow margin is calculated as Adjusted Free Cash Flow divided by Service Revenues.

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The table below provides a reconciliation of Adjusted Free Cash Flow to Net cash provided by operating activities, which we consider to be the most directly comparable GAAP financial measure:

Three Months Ended

September 30, Change Nine Months Ended

September 30, Change

Three Months Ended March 31, Change

(in millions, except percentages) 2024 2023 $ %

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Cash purchases of property and equipment, including capitalized interest (2,627) (3,001) 374 (12) %

Proceeds from sales of tower sites 2 — 2 NM 10 — 10 NM

Proceeds from sales of tower sites — 6 (6) (100) %

Proceeds related to beneficial interests in securitization transactions 890 1,345 (455) (34) %

Adjusted Free Cash Flow $ 3,347 $ 2,401 $ 946 39 %

Net cash provided by operating activities margin (Net cash provided by operating activities divided by Service revenues) 33 % 29 % 400 bps 29 % 27 % 200 bps

Adjusted Free Cash Flow margin (Adjusted Free Cash Flow divided by Service revenues) 25 % 13 % 1,200 bps 20 % 12 % 800 bps

NM - Not Meaningful

Adjusted Free Cash Flow increased $1.9 billion, or 94%, for the three months ended and increased $3.8 billion, or 70%, for the nine months ended September 30, 2023.

The increase for the three months ended September 30, 2023, was primarily impacted by the following:

• Lower Cash purchases of property and equipment, including capitalized interest, driven by increased capital efficiencies from accelerated investments in our nationwide 5G network in 2022;

Net cash provided by operating activities margin (Net cash provided by operating activities divided by Service revenues) 32 % 26 % 600 bps

Adjusted Free Cash Flow margin (Adjusted Free Cash Flow divided by Service revenues) 21 % 15 % 600 bps

Adjusted Free Cash Flow increased $946 million, or 39%, primarily from:

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

• Lower Cash purchases of property and equipment, including capitalized interest, driven by increased capital efficiencies from accelerated investments in our nationwide 5G network in previous years;

partially offset by

• Lower Proceeds related to beneficial interests in securitization transactions, which were offset in Net cash provided by operating activities.

• Adjusted Free Cash Flow includes the impact of $345 million and $942 million in net payments for Merger-related costs for the three months ended September 30, 2023 and 2022, respectively.

The increase for the nine months ended September 30, 2023, was primarily impacted by the following:

• Lower Cash purchases of property and equipment, including capitalized interest, driven by increased capital efficiencies from accelerated investments in our nationwide 5G network in 2022;

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

• Higher Proceeds related to beneficial interests in securitization transactions, which were offset in Net cash provided by operating activities.

• Adjusted Free Cash Flow includes the impact of $1.6 billion and $2.7 billion in net payments for Merger-related costs for the nine months ended September 30, 2023 and 2022, respectively.

During the nine months ended September 30, 2023 and 2022, there were no significant net cash proceeds from securitization.

• Adjusted Free Cash Flow includes the impact of $293 million and $484 million in net payments for Merger-related costs for the three months ended March 31, 2024 and 2023, respectively.

During the three months ended March 31, 2024 and 2023, there were no significant net cash proceeds from securitization.

Borrowing Capacity

We maintain a revolving credit facility (the “Revolving Credit Facility”) with an aggregate commitment amount of $7.5 billion.

As of September 30, 2023, there was no outstanding balance under the Revolving Credit Facility.

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 will supplement 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.

As of March 31, 2024, there was no outstanding balance under the Revolving Credit Facility.

We maintain 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 March 31, 2024, there was no outstanding balance under this program.

Debt Financing

As of September 30, 2023, our total debt and financing lease liabilities were $77.9 billion, excluding our tower obligations, of which $71.9 billion was classified as long-term debt and $1.3 billion was classified as long-term financing lease liabilities.

During the nine months ended September 30, 2023, we issued long-term debt for net proceeds of $8.4 billion and redeemed and repaid short-term debt with an aggregate principal amount of $4.8 billion.

As of March 31, 2024, our total debt and financing lease liabilities were $80.6 billion, excluding our tower obligations, of which $72.9 billion was classified as long-term debt and $1.2 billion was classified as long-term financing lease liabilities.

During the three months ended March 31, 2024, we issued long-term debt for net proceeds of $3.5 billion and repaid short-term debt with an aggregate principal amount of $223 million.

For more information regarding our debt financing transactions, see Note 7 - Debt of the Notes to the Condensed Consolidated Financial Statements.

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

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 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.

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.

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

For more information regarding our License Purchase Agreements, see Note 5 – Spectrum License Transactions of the Notes to the Condensed Consolidated Financial Statements.

Acquisition of Ka’ena Corporation

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 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.

On March 9, 2023, we entered into a Merger and Unit Purchase Agreement for 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 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.

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.

Lumos Acquisition

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.

Off-Balance Sheet Arrangements

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

As of September 30, 2023, we derecognized net receivables of $2.4 billion upon sale through these arrangements.

As of March 31, 2024, we derecognized net receivables of $2.2 billion upon sale through these arrangements.

For more information regarding these off-balance sheet arrangements, see Note 4 – Sales of Certain Receivables of the Notes to the Condensed Consolidated Financial Statements.

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

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

We determine future liquidity requirements for operations, capital expenditures, share repurchases and dividend payments based in large part upon projected financial and operating performance, and opportunities to acquire additional spectrum or repurchase shares.

We regularly review and update these projections for changes in current and projected financial and operating results, general economic conditions, the competitive landscape and other factors.

We have incurred, and will incur, substantial expenses to comply with the Government Commitments, and we are also expected to incur substantially all of the remaining projected Merger-related costs of approximately $200 million, excluding capital expenditures, by the end of 2023, with the cash expenditure for the Merger-related costs extending beyond 2023.

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

We have incurred, and will incur, substantial expenses to comply with the Government Commitments, and we also expect to incur all of the remaining restructuring and integration costs associated with the Merger by the first half of 2024, with the cash expenditures for the Merger-related costs extending beyond 2024.

There are a number of additional risks and uncertainties that could cause our financial and operating results and capital requirements to differ materially from our projections, which could cause future liquidity to differ materially from our assessment.

The indentures, supplemental indentures and credit agreements governing our long-term debt to affiliates and third parties, excluding financing leases, contain covenants that, among other things, limit the ability of the Issuers or borrowers and the Guarantor Subsidiaries to incur more debt, create liens or other encumbrances, and merge, consolidate or sell, or otherwise dispose of, substantially all of their assets.

We were in compliance with all restrictive debt covenants as of September 30, 2023.

We were in compliance with all restrictive debt covenants as of March 31, 2024.

Financing Lease Facilities

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

As of September 30, 2023, we have entered into $8.5 billion of financing leases under these financing lease facilities, of which $388 million and $940 million was executed during the three and nine months ended September 30, 2023, respectively.

As of March 31, 2024, we have entered into $9.0 billion of financing leases under these financing lease facilities, of which $258 million was executed during the three months ended March 31, 2024.

We expect to enter into up to a total of $1.2 billion in financing lease commitments during the year ending December 31, 2024.

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

We expect a reduction in capital expenditures related to these efforts in 2023 compared to 2022.

We expect a reduction in capital expenditures related to these efforts in 2024 compared to 2023 given the substantial deployment of the 5G network completed in the preceding years.

Future capital expenditure requirements will include the deployment of our recently acquired C-band and 3.45 GHz spectrum licenses.

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Stockholder Returns

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.

During the three and nine months ended September 30, 2023, we repurchased shares of our common stock for a total purchase price of $2.7 billion and $11.0 billion, respectively, all of which were purchased under the 2022 Stock Repurchase Program.

On September 6, 2023, our Board of Directors authorized our 2023-2024 Stockholder Return Program for 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.

On September 25, 2023, our Board of Directors declared a cash dividend of $0.65 per share on our issued and outstanding shares of common stock, which will be paid in the fourth quarter of 2023.

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

We intend to declare and pay approximately $3.0 billion in total additional dividends in 2024, with payments occurring each quarter during the year.

On September 6, 2023, our Board of Directors authorized our 2023-2024 Stockholder Return Program for up to $19.0 billion that will run from October 1, 2023, through December 31, 2024.

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

We intend to declare and pay approximately $3.0 billion in total dividends in 2024, with payments occurring each quarter during the year.

The dividend amount paid per share is expected to grow by around 10% annually with the first increase expected in the fourth quarter of 2024;

however, the declaration and payment of future dividends is subject to the discretion of our Board of Directors and will depend on financial and legal requirements and other considerations.

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.

Subsequent to September 30, 2023, from October 1, 2023, through October 20, 2023, we repurchased 5,515,568 shares of our common stock 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.

For additional information regarding the 2022 Stock Repurchase Program and the 2023-2024 Stockholder Return Program, see Note 10 – Stockholder Return Programs of the Notes to the Condensed Consolidated Financial Statements.

however, the declaration and payment of all dividends is subject to the discretion of our Board of Directors and will depend on financial and legal requirements and other considerations.

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

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 shares of 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.

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

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.

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.

For additional information regarding the 2023-2024 Stockholder Return Program, see Note 10 – Stockholder Return Program of the Notes to the Condensed Consolidated Financial Statements.

Related Party Transactions

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

As of October 20, 2023, DT held, directly or indirectly, approximately 52.3% of the outstanding T-Mobile common stock, with the remaining approximately 47.7% of the outstanding T-Mobile common stock held by SoftBank and other stockholders.

As a result of the Proxy, Lock-Up and ROFR Agreement, dated April 1, 2020, by and between DT and SoftBank and the Proxy, Lock-Up and ROFR Agreement, dated June 22, 2020, by and among DT, Claure Mobile LLC, and Marcelo Claure, DT has voting control, as of October 20, 2023, over approximately 56.2% of the outstanding T-Mobile common stock.

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

As of April 19, 2024, DT and SoftBank held, directly or indirectly, approximately 50.4% and 7.9%, respectively, of the outstanding T-Mobile common stock, with the remaining approximately 41.7% of the outstanding T-Mobile common stock held by other stockholders.

As a result of the Proxy, Lock-Up and ROFR Agreement, dated April 1, 2020, by and between DT and SoftBank, DT has voting control, as of April 19, 2024, over approximately 58.0% of the outstanding T-Mobile common stock.

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

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

As of the date of this report, we are not aware of any activity, transaction or dealing by us or any of our affiliates for the three months ended September 30, 2023, that requires disclosure in this report under Section 13(r) of the Exchange Act, except as set forth below with respect to affiliates that we do not control and that are our affiliates solely due to their common control with either DT or SoftBank.

As of the date of this report, we are not aware of any activity, transaction or dealing by us or any of our affiliates for the three months ended March 31, 2024, that requires disclosure in this report under Section 13(r) of the Exchange Act, except as set forth below with respect to affiliates that we do not control and that are our affiliates solely due to their common control with either DT or SoftBank.

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

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subsidiaries, is party to roaming and interconnect agreements with the following mobile and fixed line telecommunication providers in Iran, some of which are or may be government-controlled entities:

Telecommunication Kish Company, Mobile Telecommunication Company of Iran, and Telecommunication Infrastructure Company of Iran.

In addition, during the three months ended September 30, 2023, DT, through certain of its non-U.S.

subsidiaries, provided basic telecommunications services to five customers in Germany identified on the Specially Designated

Nationals and Blocked Persons List maintained by the U.S.

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

In addition, during the three months ended March 31, 2024, DT, through certain of its non-U.S.

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

Department of Treasury’s Office of Foreign Assets Control:

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

With respect to the first four of these customers, the services have been terminated or are in the process of being terminated.

DT is currently evaluating the relationship its non-U.S.

subsidiary has with International Trade and Technology ITRITEC GmbH.

For the three months ended September 30, 2023, gross revenues of all DT affiliates generated by roaming and interconnection traffic and telecommunications services with the Iranian parties identified herein were less than $0.1 million, and the estimated net profits were less than $0.1 million.

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

For the three months ended March 31, 2024, gross revenues of all DT affiliates generated by roaming and interconnection traffic and telecommunications services with the Iranian parties identified herein were less than $0.1 million, and the estimated net profits were less than $0.1 million.

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

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

Gross revenues and net profits recorded from these activities for the three months ended September 30, 2023, were less than $0.1 million.

Gross revenues and net profits recorded from these activities for the three months ended March 31, 2024, were less than $0.1 million.

We understand that DT intends to continue these activities.

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

During the three months ended September 30, 2023, SoftBank had no gross revenues from such services and no net profit was generated.

During the three months ended March 31, 2024, SoftBank had no gross revenues from such services and no net profit was generated.

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

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

During the three months ended September 30, 2023, SoftBank estimates that gross revenues and net profit generated by such services were both under $0.1 million.

During the three months ended March 31, 2024, SoftBank estimates that gross revenues and net profit generated by such services were both under $0.1 million.

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

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

SoftBank estimates that gross revenue and net profit generated by such services during the three months ended September 30, 2023, were both under $0.1 million.

SoftBank estimates that gross revenues and net profit generated by such services during the three months ended March 31, 2024, were both under $0.1 million.

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

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

What changed 10-Q

Item 2. Management’s Discussion and Analysis