What changed in this filing

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Item 2. Management’s Discussion and Analysis

2024-07-31 compared with 2024-04-26 · 327 added, 169 removed, 384 unchanged (56% of the section changed)

14 unchanged sentences

• 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.

• 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 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.

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

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

• the timing and effects of any future acquisition, divestiture, investment, or merger involving us, including our inability to obtain any required regulatory approval necessary to consummate any such transactions;

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

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• our wireless licenses, including those controlled through leasing agreements, are subject to renewal and may be revoked;

• our exclusive forum provision as provided in our Fifth Amended and Restated Certificate of Incorporation (the “Certificate of Incorporation”);

• our exclusive forum provision as provided in our Fifth Amended and Restated Certificate of Incorporation;

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

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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 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.

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://x.com/TMobileIR), the @MikeSievert X account (https://x.com/MikeSievert), which Mr.

Sievert also uses as a means for personal communications and observations, and the @TMobileCFO X account (https://x.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 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.

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 six months ended June 30, 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.

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Merger-Related Costs

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

Merger-related costs associated with the Sprint Merger generally include:

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

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

During the three months ended June 30, 2024, we recognized 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 was presented as a reduction in Merger-related costs and excluded from our calculations of Adjusted EBITDA and Core Adjusted EBITDA.

See Note 6 – Goodwill, Spectrum License Transactions and Other Intangible Assets of the Notes to the Condensed Consolidated Financial Statements for more information.

Merger-related costs are presented below:

(in millions) Three Months Ended March 31, Change

(in millions) Three Months Ended

June 30, Change Six Months Ended

June 30, Change

2024 2023 $ % 2024 2023 $ %

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Cost of services, exclusive of depreciation and amortization $ 73 $ 178 $ (105) (59) % $ 180 $ 386 $ (206) (53) %

Cost of equipment sales, exclusive of depreciation and amortization — (9) 9 (100) %

Cost of equipment sales, exclusive of depreciation and amortization — — — NM — (9) 9 (100) %

Selling, general and administrative (82) 98 (180) (184) % (59) 257 (316) (123) %

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

Total Merger-related (gain) costs, net $ (9) $ 276 $ (285) (103) % $ 121 $ 634 $ (513) (81) %

Net cash payments for Merger-related costs $ 241 $ 728 $ (487) (67) % $ 534 $ 1,212 $ (678) (56) %

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.

NM- Not meaningful

As of June 30, 2024, we have incurred all restructuring and integration costs associated with the Sprint Merger, with the cash payments 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.

Lumos Joint Venture

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 joint 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 Lumos fiber customers.

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

In addition, pursuant to the merger agreement, we expect to make an additional capital contribution of approximately $500 million in 2027 or 2028.

The joint venture will focus on market identification and selection, network engineering and design, network deployment, and customer installation, with us owning customer relationships and selling fiber service under the T-Mobile brand.

Upon closing of the transaction, we expect to account for the Lumos joint venture under the equity method of accounting and recognize service revenues for the acquired Lumos fiber customers and wholesale costs paid to the joint venture for network access reflected in Cost of services on our Condensed Consolidated Statements of Comprehensive Income.

Acquisition of Ka’ena Corporation

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

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

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

On May 1, 2024 (the “Acquisition Date”), we completed the merger with Ka’ena Corporation and its subsidiaries, including, among others, Mint Mobile LLC (collectively, “Ka’ena”), and as a result, Ka’ena became a wholly owned subsidiary of T-Mobile (the “Ka’ena Acquisition”).

The total purchase price is variable, dependent upon specified performance indicators of Ka’ena, and consists of an upfront payment on the Acquisition Date and an earnout payable on August 1, 2026.

On the Acquisition Date and in satisfaction of the upfront payment, we transferred $420 million in cash and 3,264,952 shares of T-Mobile common stock valued at $536 million as determined based on its closing market price on April 30, 2024, for a total payment fair value of $956 million.

A portion of the upfront payments made on the Acquisition Date was for the settlement of the preexisting wholesale relationship with Ka’ena.

Based on the amount paid upfront, up to an additional $403 million in future cash and T-Mobile common stock is payable in satisfaction of the earnout, dependent upon Ka’ena’s achievement of specified performance indicators.

Prior to the Ka’ena Acquisition, Ka’ena was a wholesale partner of the Company for which we recognized service revenues within Wholesale and other service revenues.

Upon the closing of the Ka’ena Acquisition, this relationship was effectively terminated, and the Company acquired Ka’ena’s prepaid customer relationships and will recognize service revenues associated with these customers within Prepaid revenues and operating expenses primarily within Selling, general and administrative expenses on our Condensed Consolidated Statements of Comprehensive Income subsequent to the Acquisition Date.

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

UScellular Wireless Operations

On May 24, 2024, we entered into a securities purchase agreement with United States Cellular Corporation (“UScellular”), Telephone and Data Systems, Inc., and USCC Wireless Holdings, LLC, pursuant to which, among other things, we will acquire substantially all of UScellular’s wireless operations and select spectrum assets for an aggregate purchase price of approximately $4.4 billion, payable in cash and the assumption of up to $2.0 billion of debt through an exchange offer to be made to certain UScellular debtholders prior to closing.

To the extent any debtholders do not participate in the exchange, their bonds will continue as obligations of UScellular, and the cash portion of the purchase price will be correspondingly increased.

The transaction is expected to close in mid-2025, subject to customary closing conditions and receipt of certain regulatory approvals.

Upon closing of the transaction, we expect to account for the UScellular transaction as a business combination and to consolidate the acquired operations.

We expect this transaction will yield approximately $1.0 billion in total annual run rate cost synergies, including operating expense and capital expenditure synergies, upon integration, with total cost to achieve the integration currently estimated at between $2.2 billion to $2.6 billion.

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

Metronet Joint Venture

Subsequent to June 30, 2024, on July 18, 2024, we entered into a definitive agreement with KKR & Co.

(“KKR”) to establish a joint venture to acquire Metronet Holdings, LLC and certain of its affiliates (collectively, “Metronet”), a fiber-to-the-home platform.

This arrangement is expected to close in 2025, subject to customary closing conditions and regulatory approvals.

At closing, we expect to invest approximately $4.9 billion in the joint venture to acquire a 50% equity interest and all existing residential fiber customers, as well as funding the joint venture.

We do not anticipate making further capital contributions following the closing.

The joint venture will focus on build plans, network engineering and design, network deployment, and customer installation, with us owning customer relationships and selling fiber service under the T-Mobile brand.

Upon the closing of the transaction, we expect to account for the Metronet joint venture under the equity method of accounting and recognize service revenues for the acquired Metronet fiber customers and wholesale costs paid to the joint venture for network access reflected in Cost of services on our Condensed Consolidated Statements of Comprehensive Income.

Results of Operations

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

Three Months Ended March 31, Change

Three Months Ended

June 30, Change Six Months Ended

June 30, Change

(in millions) 2024 2023 $ % 2024 2023 $ %

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Selling, general and administrative 5,142 5,272 (130) (2) % 10,280 10,697 (417) (4) %

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

Loss (gain) on disposal group held for sale — 17 (17) (100) % — (25) 25 (100) %

Depreciation and amortization 3,248 3,110 138 4 % 6,619 6,313 306 5 %

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Interest expense, net (854) (861) 7 (1) % (1,734) (1,696) (38) 2 %

Other income, net 20 9 11 122 %

Other (expense) income, net (8) 6 (14) (233) % 12 15 (3) (20) %

Total other expense, net (862) (855) (7) 1 % (1,722) (1,681) (41) 2 %

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Adjusted Free Cash Flow 4,439 2,877 1,562 54 % 7,786 5,278 2,508 48 %

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:

The following discussion and analysis is for the three and six months ended June 30, 2024, compared to the same period in 2023, unless otherwise stated.

Total revenues increased $576 million, or 3%, for the three months ended and increased $538 million, or 1%, for the six months ended June 30, 2024.

The components of these changes are discussed below.

Postpaid revenues increased $829 million, or 7%, for the three months ended and increased $1.6 billion, or 7%, for the six months ended June 30, 2024, primarily from:

• Higher average postpaid accounts;

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

Prepaid revenues decreased slightly, primarily from:

Prepaid revenues increased $148 million, or 6%, for the three months ended and increased $134 million, or 3%, for the six months ended June 30, 2024, primarily from:

• Higher average prepaid customers, primarily from the prepaid customers acquired through the Ka’ena Acquisition;

partially offset by

• Lower prepaid ARPU.

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

mostly offset by

• Higher average prepaid customers.

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;

Wholesale and other service revenues decreased $286 million, or 23%, for the three months ended and decreased $491 million, or 20%, for the six months ended June 30, 2024.

The decrease for the three months ended June 30, 2024, was primarily from:

• Lower MVNO revenues, primarily due to DISH servicing more of its Boost customers with their standalone network, the impact from the Ka’ena Acquisition and the migration of legacy TracFone customers off of the T-Mobile network, partially offset by growth in other MVNO partners;

• Lower Affordable Connectivity Program and Lifeline revenues.

The decrease for the six months ended June 30, 2024, was primarily from:

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

• 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:

• Lower Affordable Connectivity Program and Lifeline revenues.

Equipment revenues decreased $63 million, or 2%, for the three months ended and decreased $531 million, or 8%, for the six months ended June 30, 2024.

The decrease for the three months ended June 30, 2024, was primarily from:

• A decrease of $140 million in device sales revenue, excluding purchased leased devices, primarily from:

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

• A net decrease in the total number of devices sold, driven by lower Assurance Wireless, prepaid and postpaid upgrade units, partially offset by higher postpaid gross addition related devices;

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;

• Slightly higher average revenue per device sold, net of promotions, primarily driven by an increase in the high-end phone mix;

partially offset by

• An increase of $121 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.

The decrease for the six months ended June 30, 2024, was primarily from:

• A decrease of $643 million in device sales revenue, excluding purchased leased devices, primarily from:

• A net decrease in the total number of devices sold, driven by lower Assurance Wireless, prepaid and postpaid upgrade units, partially offset by higher postpaid gross addition related devices;

partially offset by

• Slightly higher average revenue per device sold, net of promotions, primarily driven by an increase in the high-end phone mix;

partially offset by

• A decrease of $155 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;

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• An increase of $348 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%.

Other revenues decreased $52 million, or 18%, for the three months ended and decreased $172 million, or 26%, for the six months ended June 30, 2024, 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 $261 million, or 2%, for the three months ended and decreased $900 million, or 3%, for the six months ended June 30, 2024.

The components of this change are discussed below.

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

Cost of services , exclusive of depreciation and amortization, decreased $252 million, or 9%, for the three months ended and decreased $625 million, or 10%, for the six months ended June 30, 2024.

The decrease for the three months ended June 30, 2024, was primarily from:

• A decrease of $105 million in Merger-related costs related to network decommissioning and integration;

• Lower employee costs, primarily due to reduced headcount;

• Higher Merger synergies.

The decrease for the six months ended June 30, 2024, was primarily from:

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

• A decrease of $206 million in Merger-related costs related to network decommissioning and integration;

• 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:

• Higher Merger synergies.

Cost of equipment sales , exclusive of depreciation and amortization, was flat for the three months ended and decreased $189 million, or 2%, for the six months ended June 30, 2024.

Offsetting impacts for the three months ended June 30, 2024, primarily included:

• An increase of $99 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;

• A decrease of $65 million in device cost of equipment sales, excluding purchased leased devices, primarily from:

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

• A net decrease in the total number of devices sold, driven by lower Assurance Wireless, prepaid and postpaid upgrade units, partially offset by higher postpaid gross addition related devices;

partially offset by

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

The decrease for the six months ended June 30, 2024, was primarily from:

• A decrease of $356 million in device cost of equipment sales, excluding purchased leased devices, primarily from:

• A net decrease in the total number of devices sold, driven by lower Assurance Wireless, prepaid and postpaid upgrade units, partially offset by higher postpaid gross addition related devices;

partially offset by

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

partially offset by

• An increase of $255 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;

Selling, general and administrative expenses decreased $130 million, or 2%, for the three months ended and decreased $417 million, or 4%, for the six months ended June 30, 2024.

The decrease for the three months ended June 30, 2024, was primarily from:

• A decrease of $180 million in Merger-related costs, including the $100 million gain recognized in the current period for the extension fee previously paid by DISH associated with the DISH License Purchase Agreement;

• Higher Merger synergies;

partially offset by

• Higher costs as a result of the Ka’ena Acquisition.

The decrease for the six months ended June 30, 2024, was primarily from:

• A decrease of $316 million in Merger-related costs, including the $100 million gain recognized in the current period for the extension fee previously paid by DISH associated with the DISH License Purchase Agreement;

• Lower employee costs, primarily due to reduced headcount;

• Lower severance and restructuring expenses;

• Higher Merger synergies;

partially offset by

• 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;

• Higher legal expenses, including the settlement associated with the FCC Notices of Apparent Liability (See Note 13 – Commitments and Contingencies of the Notes to the Condensed Consolidated Financial Statements);

• Higher costs as a result of the Ka’ena Acquisition.

Loss (gain) on disposal group held for sale was a loss of $17 million for the three months ended June 30, 2023, and a gain of $25 million for the six months ended June 30, 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 and six months ended June 30, 2024.

Depreciation and amortization increased $138 million, or 4%, for the three months ended and increased $306 million, or 5%, for the six months ended June 30, 2024, 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 $837 million, or 22%, for the three months ended and increased $1.4 billion, or 20%, for the six months ended June 30, 2024.

Interest expense, net was relatively flat.

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

Income before income taxes , the components of which are discussed above, was $3.8 billion and $2.9 billion for the three months ended June 30, 2024 and 2023, respectively, and $6.9 billion and $5.5 billion for the six months ended June 30, 2024 and 2023, respectively.

Income tax expense increased $126 million, or 18%, for the three months ended and increased $259 million, or 19%, for the six months ended June 30, 2024, primarily from:

• Higher income before income taxes;

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.

• An increase in tax benefits from adjustments to certain tax reserves.

Our effective tax rate was 22.4% and 24.4% for the three months ended June 30, 2024 and 2023, respectively, and 23.3% and 24.5% for the six months ended June 30, 2024 and 2023, respectively.

Net income , the components of which are discussed above, was $2.9 billion and $2.2 billion for the three months ended June 30, 2024 and 2023, respectively, and $5.3 billion and $4.2 billion for the six months ended June 30, 2024 and 2023, respectively.

Net income included a Merger-related gain, net of Merger-related costs and tax, of $6 million for the three months ended June 30, 2024, and Merger-related costs, net of Merger-related gain and tax, of $91 million for the six months ended June 30, 2024, compared to Merger-related costs, net of tax, of $207 million and $475 million for the three and six months ended June 30, 2023, respectively.

Guarantor Financial Information

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is presented in the table below:

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

(in millions) June 30, 2024 December 31, 2023

Current assets $ 17,771 $ 17,601

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Noncurrent liabilities (1)

119,209 128,197

Due to non-guarantors (1)

Due to related parties 1,570 1,576

(1) The decrease in Noncurrent liabilities and Due to non-guarantors was primarily driven by the impact of certain intercompany settlements during the six months ended June 30, 2024.

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

is presented in the table below:

(in millions) Three Months Ended

March 31, 2024 Year Ended

(in millions) Six Months Ended

June 30, 2024 Year Ended

December 31, 2023

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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) March 31, 2024 December 31, 2023

(in millions) June 30, 2024 December 31, 2023

Current assets $ 12,365 $ 11,193

2 unchanged sentences

Noncurrent liabilities (1)

88,406 110,688

Due to non-guarantors (1)

17,522 41,805

Due to related parties 1,570 1,576

(1) The decrease in Noncurrent liabilities and Due to non-guarantors was primarily driven by the impact of certain intercompany settlements during the six months ended June 30, 2024.

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

(in millions) Three Months Ended

March 31, 2024 Year Ended

(in millions) Six Months Ended

June 30, 2024 Year Ended

December 31, 2023

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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) March 31, 2024 December 31, 2023

(in millions) June 30, 2024 December 31, 2023

Current assets $ 12,366 $ 11,193

2 unchanged sentences

Noncurrent liabilities (1)

84,555 106,881

Due to non-guarantors (1)

Due to related parties 1,570 1,576

(1) The decrease in Noncurrent liabilities and Due to non-guarantors was primarily driven by the impact of certain intercompany settlements during the six months ended June 30, 2024.

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) Three Months Ended

March 31, 2024 Year Ended

(in millions) Six Months Ended

June 30, 2024 Year Ended

December 31, 2023

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

As of March 31, Change

As of June 30, Change

(in thousands) 2024 2023 # %

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

Three Months Ended March 31, Change

Three Months Ended

June 30, Change Six Months Ended

June 30, Change

(in thousands) 2024 2023 # % 2024 2023 # %

Postpaid net account additions 301 299 2 1 % 519 586 (67) (11) %

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

Postpaid net account additions increased slightly for the three months ended and decreased 67,000, or 11%, for the six months ended June 30, 2024.

The slight increase for the three months ended June 30, 2024, was primarily from:

• Higher gross additions;

mostly offset by

• Higher deactivations and fewer High Speed Internet only additions due to the sunsetting of promotional pricing, as well as a higher mix of High Speed Internet customers from existing accounts.

The decrease for the six months ended June 30, 2024, was primarily from:

• Higher deactivations and fewer High Speed Internet only additions due to the sunsetting of promotional pricing, as well as a higher mix of High Speed Internet customers from existing accounts;

partially offset by

• Higher gross 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.

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The following table sets forth the number of ending customers:

As of March 31, Change

As of June 30, Change

(in thousands) 2024 2023 # %

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Prepaid customers (1)

25,283 21,516 3,767 18 %

Total customers 125,893 116,602 9,291 8 %

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

Adjustments to customers (1)

3,504 — 3,504 NM

(1) In the second quarter of 2024, we acquired 3,504,000 prepaid customers through the Ka’ena Acquisition, which includes the impact of certain base adjustments to align the policies of Ka’ena and T-Mobile.

NM - Not meaningful

High Speed Internet customers included in Postpaid other customers were 4,992,000 and 3,302,000 as of June 30, 2024 and 2023, respectively.

High Speed Internet customers included in Prepaid customers were 595,000 and 376,000 as of June 30, 2024 and 2023, respectively.

Net Customer Additions

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

Three Months Ended

June 30, Change Six Months Ended

June 30, Change

(in thousands) 2024 2023 # % 2024 2023 # %

Net customer additions (losses)

Net customer additions

Postpaid phone customers 777 760 17 2 % 1,309 1,298 11 1 %

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Total net customer additions 1,517 1,685 (168) (10) % 2,689 3,004 (315) (10) %

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;

Adjustments to customers 3,504 — 3,504 NM 3,504 — 3,504 NM

NM - Not meaningful

Total net customer additions decreased 168,000, or 10%, for the three months ended and decreased 315,000, or 10% for the six months ended June 30, 2024.

The decrease for the three months ended June 30, 2024, was primarily from:

• Lower postpaid other net customer additions, primarily due to

• 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;

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

• Lower net additions from High Speed Internet, primarily driven by increased deactivations from a growing customer base, partially offset by a lower churn rate;

• Lower net additions from wearables;

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• 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.

partially offset by

• Higher prepaid net customer additions, primarily due to higher gross additions following the Ka’ena Acquisition and lower churn, partially offset by continued moderation of prepaid industry growth;

• Higher postpaid phone net customer additions, primarily due to higher gross additions, partially offset by increased deactivations from a growing base and slightly higher churn.

• High Speed Internet net customer additions included in postpaid other net customer additions were 358,000 and 447,000 for the three months ended June 30, 2024 and 2023, respectively.

High Speed Internet net customer additions included in prepaid net customer additions were 48,000 and 62,000 for the three months ended June 30, 2024 and 2023, respectively.

The decrease for the six months ended June 30, 2024, was primarily from:

• Lower postpaid other net customer additions, primarily due to

• Lower net additions from High Speed Internet, primarily driven by increased deactivations from a growing customer base, partially offset by a lower churn rate;

• Lower net additions from wearables;

partially offset by

• Higher net additions from other connected devices;

• Lower prepaid net customer additions, primarily driven by continued moderation of prepaid industry growth and lower net additions from High Speed Internet, partially offset by higher gross additions following the Ka’ena Acquisition and lower churn;

partially offset by

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

• High Speed Internet net customer additions included in postpaid other net customer additions were 704,000 and 892,000 for the six months ended June 30, 2024 and 2023, respectively.

High Speed Internet net customer additions included in prepaid net customer additions were 107,000 and 140,000 for the six months ended June 30, 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.

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The following table sets forth the churn:

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.

Three Months Ended

June 30, Change Six Months Ended

June 30, Change

2024 2023 2024 2023

Postpaid phone churn 0.80 % 0.77 % 3 bps 0.83 % 0.83 % — bps

Prepaid churn 2.54 % 2.62 % -8 bps 2.64 % 2.69 % -5 bps

Postpaid phone churn increased 3 basis points for the three months ended June 30, 2024, primarily due to rate plan optimizations.

Postpaid phone churn was flat for the six months ended June 30, 2024, impacted by:

• Improved customer retention driven by value and network leadership;

• Rate plan optimizations.

Prepaid churn decreased 8 basis points for the three months ended and decreased 5 basis points for the six months ended June 30, 2024, primarily driven by the inclusion of prepaid customers associated with the Ka’ena Acquisition with lower churn.

Postpaid Average Revenue Per Account

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The following table sets forth our operating measure ARPA:

(in dollars) Three Months Ended March 31, Change

(in dollars) Three Months Ended

June 30, Change Six Months Ended

June 30, Change

2024 2023 $ % 2024 2023 $ %

Postpaid ARPA $ 142.54 $ 138.94 $ 3.60 3 % $ 141.71 $ 138.49 $ 3.22 2 %

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;

Postpaid ARPA increased $3.60, or 3%, for the three months ended and increased $3.22, or 2%, for the six months ended June 30, 2024, primarily from:

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

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Average Revenue per User (“ARPU”) represents the average monthly service revenue earned per customer.

ARPU is calculated as service revenues for the specified period divided by the average number of customers during the period, further divided by the number of months in the period.

ARPU is calculated as service revenues for the specified period divided by the average number of customers during the period, further divided by

the number of months in the period.

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

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The following table sets forth our operating measure ARPU:

(in dollars) Three Months Ended March 31, Change

(in dollars) Three Months Ended

June 30, Change Six Months Ended

June 30, Change

2024 2023 $ % 2024 2023 $ %

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Postpaid Phone ARPU

Postpaid phone ARPU was relatively flat, primarily from:

Postpaid phone ARPU was flat for the three months ended and six months ended June 30, 2024, primarily from:

• Increased promotional activity;

• 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.

Prepaid ARPU decreased $2.04, or 5%, for the three months ended and decreased $1.46, or 4%, for the six months ended June 30, 2024, primarily from the inclusion of lower ARPU prepaid customers associated with the Ka’ena Acquisition.

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 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.

Special Items include Merger-related (gain) costs, net, loss (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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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 March 31, Change

Three Months Ended

June 30, Change Six Months Ended

June 30, Change

(in millions, except percentages) 2024 2023 $ % 2024 2023 $ %

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Interest expense, net 854 861 (7) (1) % 1,734 1,696 38 2 %

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

Other expense (income), net 8 (6) 14 (233) % (12) (15) 3 (20) %

Income tax expense 843 717 126 18 % 1,607 1,348 259 19 %

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147 155 (8) (5) % 287 328 (41) (13) %

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

Legal-related recoveries, net (2)

Merger-related (gain) costs, net (2)

(9) 276 (285) (103) % 121 634 (513) (81) %

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

Legal-related expenses (recoveries), net (3)

15 — 15 NM 15 (43) 58 (135) %

Loss (gain) on disposal group held for sale — 17 (17) (100) % — (25) 25 (100) %

Other, net (4)

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$ 8,027 $ 7,336 $ 691 9 % $ 15,644 $ 14,388 $ 1,256 9 %

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

Net income margin (Net income divided by Service revenues) 18 % 14 % 400 bps 16 % 13 % 300 bps

Adjusted EBITDA margin (Adjusted EBITDA divided by Service revenues) 49 % 47 % 200 bps 48 % 47 % 100 bps

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

47 % 45 % 200 bps

49 % 47 % 200 bps 48 % 46 % 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, net, consists of the settlement of certain litigation associated with the August 2021 cyberattack and is presented net of insurance recoveries.

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

(2) Merger-related (gain) costs, net, for the three and six months ended June 30, 2024, includes the $100 million gain recognized for the extension fee previously paid by DISH associated with the DISH License Purchase Agreement.

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

(4) 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%.

NM - Not meaningful

Core Adjusted EBITDA increased $691 million, or 9%, for the three months ended and increased $1.3 billion, or 9%, for the six months ended June 30, 2024.

The components comprising Core Adjusted EBITDA are discussed further above.

The increase was primarily from:

The increase for the three months ended June 30, 2024, was primarily from:

• Higher Total service revenues;

• Lower Cost of services, excluding Special Items.

The increase for the six months ended June 30, 2024, was primarily from:

• Higher Total service revenues;

• Lower Cost of services, excluding Special Items;

• Lower Cost of equipment sales, excluding Special Items;

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• 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.

Adjusted EBITDA increased $648 million, or 9%, for the three months ended and increased $1.1 billion, or 8%, for the six months ended June 30, 2024, primarily due to the fluctuations in Core Adjusted EBITDA, discussed above, partially offset by lower lease revenues, which decreased $43 million for the three months ended and decreased $155 million for the six months ended June 30, 2024.

Liquidity and Capital Resources

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The following is a condensed schedule of our cash flows:

Three Months Ended March 31, Change

Three Months Ended

June 30, Change Six Months Ended

June 30, Change

(in millions) 2024 2023 $ % 2024 2023 $ %

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Operating Activities

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

Net cash provided by operating activities increased $1.2 billion, or 27%, for the three months ended and increased $2.2 billion, or 26%, for the six months ended June 30, 2024.

The increase for the three months ended June 30, 2024, was primarily from:

• A $954 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.

• A $212 million decrease in net cash outflows from changes in working capital, primarily due to lower use of cash from Accounts payable and accrued liabilities, Accounts receivable and Other current and long-term liabilities, partially offset by higher use of cash from Other current and long-term assets and Inventory.

• Net cash provided by operating activities includes the impact of $241 million and $728 million in net payments for Merger-related costs for the three months ended June 30, 2024 and 2023, respectively.

The increase for the six months ended June 30, 2024, was primarily from:

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

• A $531 million decrease in net cash outflows from changes in working capital, primarily due to lower use of cash from Accounts receivable, partially offset by higher use of cash from Other current and long-term assets and Operating lease right-of-use assets.

• Net cash provided by operating activities includes the impact of $534 million and $1.2 billion in net payments for Merger-related costs for the six months ended June 30, 2024 and 2023, respectively.

Investing Activities

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

The use of cash was primarily from:

Net cash used in investing activities increased $191 million, or 13%, for the three months ended and increased $250 million, or 8%, for the six months ended June 30, 2024.

The use of cash for the three months ended June 30, 2024, was primarily from:

• $2.0 billion in Purchases of property and equipment, including capitalized interest, from the continued build-out of our nationwide 5G network;

• $390 million of cash consideration, net of cash acquired, related to the Ka’ena Acquisition;

• $156 million in Purchases of spectrum licenses and other intangible assets, including deposits ;

partially offset by

• $958 million in Proceeds related to beneficial interests in securitization transactions.

The use of cash for the six months ended June 30, 2024, was primarily from:

• $4.7 billion in Purchases of property and equipment, including capitalized interest, from the continued build-out of our nationwide 5G network;

• $390 million of cash consideration, net of cash acquired, related to the Ka’ena Acquisition;

• $217 million in Purchases of spectrum licenses and other intangible assets, including deposits ;

partially offset by

• $1.8 billion in Proceeds related to beneficial interests in securitization transactions.

Financing Activities

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

The use of cash was primarily from:

Net cash used in financing activities increased $3.4 billion, or 427%, for the three months ended and increased $2.7 billion, or 90%, for the six months ended June 30, 2024.

The use of cash for the three months ended June 30, 2024, was primarily from:

• $2.7 billion in Repayments of long-term debt;

• $2.4 billion in Repurchases of common stock;

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• $351 million in Repayments of financing lease obligations;

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

partially offset by

• $2.1 billion in Proceeds from issuance of long-term debt.

The use of cash for the six months ended June 30, 2024, was primarily from:

• $6.0 billion in Repurchases of common stock;

• $2.9 billion in Repayments of long-term debt;

• $1.5 billion in Dividends on common stock ;

• $678 million in Repayments of financing lease obligations;

• $208 million in Tax withholdings on share-based awards;

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Cash and Cash Equivalents

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

As of June 30, 2024, our Cash and cash equivalents were $6.4 billion compared to $5.1 billion at December 31, 2023.

Adjusted Free Cash Flow

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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 March 31, Change

Three Months Ended

June 30, Change Six Months Ended

June 30, Change

(in millions, except percentages) 2024 2023 $ % 2024 2023 $ %

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Adjusted Free Cash Flow $ 4,439 $ 2,877 $ 1,562 54 % $ 7,786 $ 5,278 $ 2,508 48 %

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:

Net cash provided by operating activities margin (Net cash provided by operating activities divided by Service revenues) 34 % 28 % 600 bps 33 % 27 % 600 bps

Adjusted Free Cash Flow margin (Adjusted Free Cash Flow divided by Service revenues) 27 % 18 % 900 bps 24 % 17 % 700 bps

Adjusted Free Cash Flow increased $1.6 billion, or 54%, for the three months ended and increased $2.5 billion, or 48%, for the six months ended June 30, 2024, primarily from:

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

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• 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 $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.

• Adjusted Free Cash Flow includes the impact of $241 million and $728 million for the three months ended June 30, 2024 and 2023, respectively, and $534 million and $1.2 billion for the six months ended June 30, 2024 and 2023, respectively, in net payments for Merger-related costs.

During the six months ended June 30, 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 March 31, 2024, there was no outstanding balance under the Revolving Credit Facility.

As of June 30, 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.

As of June 30, 2024, there was no outstanding balance under this program.

Debt Financing

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.

As of June 30, 2024, our total debt and financing lease liabilities were $80.0 billion, excluding our tower obligations, of which $71.7 billion was classified as long-term debt and $1.1 billion was classified as long-term financing lease liabilities.

During the six months ended June 30, 2024, we issued long-term debt for net proceeds of $5.6 billion and repaid short-term debt with an aggregate principal amount of $2.9 billion.

For more information regarding our debt financing transactions, see Note 8 – Debt of the Notes to the Condensed Consolidated Financial Statements.

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On August 8, 2022, we entered into License Purchase Agreements to acquire spectrum in the 600 MHz band from Channel 51 License Co LLC and LB License Co, LLC in exchange for total cash consideration of $3.5 billion.

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

On March 30, 2023, we and

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

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

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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.

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.

The FCC approved the purchase of the first tranche on December 29, 2023.

The first tranche closed on June 24, 2024, with the associated payment of $2.4 billion due on August 5, 2024.

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

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Acquisition of Ka’ena Corporation

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.

On the Acquisition Date, we completed the Ka’ena Acquisition.

The total purchase price is variable, dependent upon specified performance indicators of Ka’ena, and consists of an upfront payment on the Acquisition Date and an earnout payable on August 1, 2026.

A portion of the upfront payment made on the Acquisition Date was for the settlement of the preexisting wholesale relationship with Ka’ena.

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

Lumos Joint Venture

On April 24, 2024, we entered into a merger agreement with Fund VI for the joint acquisition by us and Fund VI of Lumos from EQT’s predecessor fund, EQT Infrastructure III.

The Lumos joint 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 Lumos 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.

In addition, pursuant to the merger agreement, we expect to make an additional capital contribution of approximately $500 million in 2027 or 2028.

For more information regarding the Lumos joint venture, see Note 3 – Joint Ventures of the Notes to the Condensed Consolidated Financial Statements.

UScellular Wireless Operations

On May 24, 2024, we entered into a securities purchase agreement with UScellular pursuant to which, among other things, we will acquire substantially all of UScellular’s wireless operations and select spectrum assets for an aggregate purchase price of approximately $4.4 billion, payable in cash and the assumption of up to $2.0 billion of debt through an exchange offer to be made to certain UScellular debtholders prior to closing.

To the extent any debtholders do not participate in the exchange, their bonds will continue as obligations of UScellular, and the cash portion of the purchase price will be correspondingly increased.

The transaction is expected to close in mid-2025, subject to customary closing conditions and receipt of certain regulatory approvals.

Following the closing of the transaction, UScellular will retain ownership of its other spectrum, as well as its towers.

Subject to the closing of the transaction, we will enter into a 15-year master license agreement to lease space on at least 2,100 towers being retained.

Additionally, we will extend our tenancy term on approximately 600 towers where we are already leasing space from UScellular for 15 years post-closing.

We estimate the incremental future minimum lease payments associated with the master license agreement will be $1.4 billion over 15 years post-closing.

Metronet Joint Venture

Subsequent to June 30, 2024, on July 18, 2024, we entered into a definitive agreement with KKR to establish a joint venture to acquire Metronet.

This arrangement is expected to close in 2025, subject to customary closing conditions and regulatory approvals.

At closing, we expect to invest approximately $4.9 billion in the joint venture to acquire a 50% equity interest and all existing residential fiber customers, as well as funding the joint venture.

We do not anticipate making further capital contributions following the closing.

For more information regarding the Metronet joint venture, see Note 3 – Joint Ventures of the Notes to the Condensed Consolidated Financial Statements.

Off-Balance Sheet Arrangements

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

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

As of June 30, 2024, we derecognized net receivables of $2.3 billion upon sale through these arrangements.

For more information regarding these off-balance sheet arrangements, see Note 5 – Sales of Certain Receivables of the Notes to the Condensed Consolidated Financial Statements.

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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 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.

We have incurred, and will incur, substantial expenses to comply with the Government Commitments, and we have incurred all of the remaining restructuring and integration costs associated with the Merger, 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 March 31, 2024.

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

As of June 30, 2024, we have entered into $9.3 billion of financing leases under these financing lease facilities, of which $309 million and $567 million was executed during the three and six months ended June 30, 2024, respectively.

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

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

For more information regarding our spectrum licenses, see Note 6 – Goodwill, Spectrum License Transactions and Other Intangible Assets of the Notes to the Condensed Consolidated Financial Statements.

Stockholder Returns

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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.

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 was paid on June 13, 2024, to stockholders of record as of the close of business on May 31, 2024.

On June 13, 2024, our Board of Directors declared a cash dividend of $0.65 per share on our issued and outstanding common stock, which will be paid on September 12, 2024, to stockholders of record as of the close of business on August 30, 2024.

During the three and six months ended June 30, 2024, we paid an aggregate of $759 million and $1.5 billion, respectively, 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 June 30, 2024, $758 million for dividends payable is presented within Other current liabilities on our Condensed Consolidated Balance Sheets.

During the three months ended June 30, 2024, we repurchased 13,979,843 shares of our common stock at an average price per share of $162.85 for a total purchase price of $2.3 billion, and during the six months ended June 30, 2024, we repurchased 35,913,633 shares of common stock at an average price per share of $162.75 for a total purchase price of $5.8 billion, under the 2023-2024 Stockholder Return Program.

As of June 30, 2024, we had up to $8.7 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 September 12, 2024.

For additional information regarding the 2023-2024 Stockholder Return Program, see Note 1 1 – Stockholder Return Program of the Notes to the Condensed Consolidated Financial Statements.

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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.

As of July 26, 2024, DT and SoftBank held, directly or indirectly, approximately 50.4% and 7.3%, respectively, of the outstanding T-Mobile common stock, with the remaining approximately 42.3% 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 July 26, 2024, over approximately 57.4% 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 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.

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 June 30, 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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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.

In addition, during the three months ended June 30, 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.

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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.

For the three months ended June 30, 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 March 31, 2024, were less than $0.1 million.

Gross revenues and net profits recorded from these activities for the three months ended June 30, 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 March 31, 2024, SoftBank had no gross revenues from such services and no net profit was generated.

During the three months ended June 30, 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 March 31, 2024, SoftBank estimates that gross revenues and net profit generated by such services were both under $0.1 million.

During the three months ended June 30, 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 revenues and net profit generated by such services during the three months ended March 31, 2024, were both under $0.1 million.

SoftBank estimates that gross revenues and net profit generated by such services during the three months ended June 30, 2024, were both under $0.1 million.

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

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For information regarding recently issued accounting standards, see Note 1 – Summary of Significant Accounting Policies of the Notes to the Condensed Consolidated Financial Statements.

Quantitative and Qualitative Disclosures About Market Risk

There have been no material changes to the interest rate risk as previously disclosed in Part II, Item 7A of our Annual Report on Form 10-K for the year ended December 31, 2023.

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