T-Mobile US, Inc. 10-K

Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations Overview The objectives of our Management’s Discussion and Analysis of Financial Condition and Results of Operations (“MD&A”) are to provide users of our consolidated financial statements with the following: • A narrative explanation from the perspective of management of our financial condition, results of operations, cash flows, liquidity and certain other factors that may affect future results; • Context to the consolidated financial statements; and • 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 audited consolidated financial statements as of December 31, 2024 and 2023, and for each of the three years in the period ended December 31, 2024, included in Part II, Item 8 of this Form 10-K. 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. Merger-Related Costs Merger-related costs associated with our Merger with Sprint 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; • Restructuring costs, including severance, store rationalization and network decommissioning; and • Transaction costs, including legal and professional services related to the completion of the transactions. 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. See “Adjusted EBITDA and Core Adjusted EBITDA” in the “ Performance Measures ” section of this MD&A. 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 Consolidated Statements of Cash Flows and our calculation of Adjusted Free Cash Flow. During the year ended December 31, 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 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 7 – Goodwill, Spectrum License Transactions and Other Intangible Assets of the Notes to the Consolidated Financial Statements for more information. As of June 30, 2024, we have incurred substantially all restructuring and integration costs associated with the Merger and, accordingly, no longer separately disclose Merger-related costs. The cash payments for the Merger-related costs incurred extend beyond 2024. Cash payments extending beyond 2024 primarily relate to operating and financing leases for which we have recognized accelerated lease expense. See Note 19 – Restructuring Costs of the Notes to the Consolidated Financial Statements for more information. Merger-related costs are presented below: (in millions) Year Ended December 31, 2024 Versus 2023 2023 Versus 2022 2024 2023 2022 $ Change % Change $ Change % Change Merger-related costs Cost of services, exclusive of depreciation and amortization $ 180 $ 652 $ 2,670 $ (472) (72) % $ (2,018) (76) % Cost of equipment sales, exclusive of depreciation and amortization — (12) 1,524 12 (100) % (1,536) (101) % Selling, general and administrative (59) 394 775 (453) (115) % (381) (49) % Total Merger-related costs $ 121 $ 1,034 $ 4,969 $ (913) (88) % $ (3,935) (79) % Net cash payments for Merger-related costs $ 767 $ 1,973 $ 3,364 $ (1,206) (61) % $ (1,391) (41) % 30 Table of Contents 2023 Workforce Reduction In August 2023, we implemented an initiative to reduce the size of our workforce by approximately 5,000 positions, just under 7% of our total employee base, primarily in corporate and back-office functions, and some technology roles. See Note 19 – Restructuring Costs of the Notes to the Consolidated Financial Statements for more information. Joint Ventures On April 24, 2024, we entered into a definitive agreement with a fund operated by EQT, Infrastructure VI fund (“Fund VI”), to establish a joint venture between us and Fund VI to acquire Lumos (“Lumos”), a fiber-to-the-home platform, from EQT’s predecessor fund, EQT Infrastructure III. The arrangement is expected to close in the first half of 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 definitive agreement, we expect to make an additional capital contribution of approximately $500 million in 2027 or 2028 under the existing business plan. On July 18, 2024, we entered into a definitive agreement with KKR & Co. Inc. (“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 under the existing business plan. The joint ventures will focus on market identification and selection, 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 closing of the transactions, we expect to account for the Lumos and Metronet joint ventures under the equity method of accounting and recognize service revenues for the acquired Lumos and Metronet fiber customers and wholesale costs paid to the joint ventures for network access within Cost of services on our Consolidated Statements of Comprehensive Income. Acquisition of Ka’ena Corporation 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 payment made on the Acquisition Date was for the settlement of the preexisting wholesale relationship with Ka’ena. The amount of the upfront payment was subject to customary adjustments and as a result of such adjustments, $17 million of the upfront payment was returned to T-Mobile during the fourth quarter of 2024, which resulted in a commensurate increase in the maximum payable in satisfaction of the earnout. Based on the adjusted amount paid upfront, up to an additional $420 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 began to recognize service revenues associated with these customers within Prepaid revenues and operating expenses primarily within Selling, general and administrative expenses on our 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 Consolidated Financial Statements. Acquisition of 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 31 Table of Contents 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’s wireless operations, see Note 2 – Business Combinations of the Notes to the Consolidated Financial Statements. Acquisition of Vistar Media Inc. On December 20, 2024, we entered into an agreement and plan of merger for the acquisition of 100% of the outstanding capital stock of Vistar Media Inc., a provider of technology solutions for digital-out-of-home advertisements, for a purchase price of approximately $625 million. The purchase price is subject to certain agreed-upon working capital and other adjustments. The acquisition is subject to certain customary closing conditions, including certain regulatory approvals, and is expected to close in the first quarter of 2025. Revenue Trends In 2025, we expect Postpaid service revenues to continue to grow, primarily due to continued postpaid account and customer growth as well as postpaid Average Revenue per Account (“ARPA”) growth driven by the execution of our strategy to continuously deepen our account relationships, including growth in High Speed Internet. We also expect an increase in service revenues upon the closing of our previously announced joint ventures and acquisition of UScellular. In addition, Wholesale and other service revenues are expected to continue to decline primarily as DISH services more of its Boost customers with their standalone network. Operating Expense Trends In 2025, we expect Total operating expenses to increase, primarily driven by higher Depreciation and amortization from assets placed into service associated with our continued build-out of our nationwide 5G network, a s well as higher Cost of equipment sales, driven by higher expected unit sales from a growing customer base. We also expect an increase in Total operating expenses upon the closing of our previously announced joint ventures and acquisition of UScellular. We expect these increases to be partially offset by synergy realization from the acquisition of UScellular benefiting Cost of services. Macroeconomic Trends Macroeconomic trends may result in adverse impacts on our business, and we continue to monitor these potential impacts, including potential economic recession, changes in the Federal Reserve’s monetary policy, as well as geopolitical risks, including the Ukraine-Russia and Israel-Hamas wars and further escalations thereof. Such scenarios and uncertainties may affect, among others, expected credit loss activity as well as certain fair value estimates. To date, price inflation has not had a significant impact on our operations as we have fixed rates established through long-term contracts for many of our most significant costs, including for many of our tower agreements and backhaul contracts. Similarly, our exposure to the impact of rising interest rates is limited, primarily to any new debt issuances or draws on our Revolving Credit Facility (as defined below), as interest is paid on our Senior Notes at a fixed rate. We continue to monitor the impact of these trends on the payment performance of our customers. 32 Table of Contents Results of Operations Set forth below is a summary of our consolidated financial results: Year Ended December 31, 2024 Versus 2023 2023 Versus 2022 (in millions) 2024 2023 2022 $ Change % Change $ Change % Change Revenues Postpaid revenues $ 52,340 $ 48,692 $ 45,919 $ 3,648 7 % $ 2,773 6 % Prepaid revenues 10,399 9,767 9,857 632 6 % (90) (1) % Wholesale and other service revenues 3,439 4,782 5,547 (1,343) (28) % (765) (14) % Total service revenues 66,178 63,241 61,323 2,937 5 % 1,918 3 % Equipment revenues 14,263 14,138 17,130 125 1 % (2,992) (17) % Other revenues 959 1,179 1,118 (220) (19) % 61 5 % Total revenues 81,400 78,558 79,571 2,842 4 % (1,013) (1) % Operating expenses Cost of services, exclusive of depreciation and amortization shown separately below 10,771 11,655 14,666 (884) (8) % (3,011) (21) % Cost of equipment sales, exclusive of depreciation and amortization shown separately below 18,882 18,533 21,540 349 2 % (3,007) (14) % Selling, general and administrative 20,818 21,311 21,607 (493) (2) % (296) (1) % Impairment expense — — 477 — NM (477) (100) % (Gain) loss on disposal group held for sale — (25) 1,087 25 (100) % (1,112) (102) % Depreciation and amortization 12,919 12,818 13,651 101 1 % (833) (6) % Total operating expenses 63,390 64,292 73,028 (902) (1) % (8,736) (12) % Operating income 18,010 14,266 6,543 3,744 26 % 7,723 118 % Other expense, net Interest expense, net (3,411) (3,335) (3,364) (76) 2 % 29 (1) % Other income (expense), net 113 68 (33) 45 66 % 101 (306) % Total other expense, net (3,298) (3,267) (3,397) (31) 1 % 130 (4) % Income before income taxes 14,712 10,999 3,146 3,713 34 % 7,853 250 % Income tax expense (3,373) (2,682) (556) (691) 26 % (2,126) 382 % Net income $ 11,339 $ 8,317 $ 2,590 $ 3,022 36 % $ 5,727 221 % Statement of Cash Flows Data Net cash provided by operating activities $ 22,293 $ 18,559 $ 16,781 $ 3,734 20 % $ 1,778 11 % Net cash used in investing activities (9,072) (5,829) (12,359) (3,243) 56 % 6,530 (53) % Net cash used in financing activities (12,815) (12,097) (6,451) (718) 6 % (5,646) 88 % Non-GAAP Financial Measures Adjusted EBITDA $ 31,864 $ 29,428 $ 27,821 $ 2,436 8 % $ 1,607 6 % Core Adjusted EBITDA 31,771 29,116 26,391 2,655 9 % 2,725 10 % Adjusted Free Cash Flow 17,032 13,586 7,656 3,446 25 % 5,930 77 % NM - Not meaningful 33 Table of Contents The following discussion and analysis is for the year ended December 31, 2024, compared to the same period in 2023, unless otherwise stated. For a discussion and analysis of the year ended December 31, 2023, compared to the same period in 2022, please refer to Management’s Discussion and Analysis of Financial Condition and Results of Operations included in Part II, Item 7 of our Annual Report on Form 10-K for the year ended December 31, 2023, filed with the SEC on February 2, 2024. Total revenues increased $2.8 billion, or 4%. The components of these changes are discussed below. Postpaid revenues increased $3.6 billion, or 7%, primarily from: • Higher average postpaid accounts; and • Higher postpaid ARPA. See “Postpaid ARPA” in the “ Performance Measures ” section of this MD&A. Prepaid revenues increased $632 million, or 6%, 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. Wholesale and other service revenues decreased $1.3 billion, or 28%, primarily from: • Lower MVNO revenues, including the impact from the Ka’ena Acquisition, and lower DISH and TracFone MVNO revenue; • Lower Affordable Connectivity Program and Lifeline revenues; and • Lower Wireline revenues due to the sale of the Wireline Business on May 1, 2023. Equipment revenues increased slightly, primarily from: • An increase of $627 million in liquidation revenue, primarily due to a higher number of liquidated devices, including the impact from the transition of certain device recovery programs from external sources to in-house processing; mostly offset by • A decrease of $231 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 and prepaid devices, partially offset by higher postpaid devices; partially offset by • Higher average revenue per device sold, net of promotions, primarily driven by an increase in the high-end phone mix; and • A decrease of $219 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. Other revenues decreased $220 million, or 19%, 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 $902 million, or 1%. The components of this change are discussed below. Cost of services , exclusive of depreciation and amortization, decreased $884 million, or 8%, primarily from: • A decrease of $472 million in Merger-related costs related to network decommissioning and integration; • Lower costs due to the sale of the Wireline Business on May 1, 2023; • Lower employee costs, primarily due to reduced headcount; • $141 million of severance and related costs associated with the August 2023 workforce reduction recognized in the prior year; and • Higher Merger synergies; partially offset by • Higher site costs related to the continued build-out of our nationwide 5G network. 34 Table of Contents Cost of equipment sales , exclusive of depreciation and amortization, increased $349 million, or 2%, primarily from: • An increase of $457 million in liquidation costs, primarily due to a higher number of liquidated devices, including the impact from the transition of certain device recovery programs from external sources to in-house processing; partially offset by • A decrease of $81 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 and prepaid devices, partially offset by higher postpaid devices; partially offset by • Higher average cost per device sold, primarily driven by an increase in the high-end phone mix. Selling, general and administrative expenses decreased $493 million, or 2%, primarily from: • A decrease of $453 million in Merger-related costs, including the $100 million gain recognized during the year ended December 31, 2024, for the extension fee previously paid by DISH associated with the DISH License Purchase Agreement; • $321 million of severance and related costs associated with the August 2023 workforce reduction recognized in the prior year; • $202 million of gains associated with the closing of certain spectrum exchange transactions and $105 million of legal-related insurance recoveries recognized during the year ended December 31, 2024; and • Higher Merger synergies; partially offset by • Higher costs as a result of the Ka’ena Acquisition; and • Higher advertising expenses. Gain on disposal group held for sale was $25 million for the year ended December 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 year ended December 31, 2024. Depreciation and amortization increased slightly, primarily from higher depreciation expense from the acceleration of certain technology assets in the first half of 2024 as we continue to modernize our network, technology systems and platforms and from the continued build-out of our nationwide 5G network. Operating income , the components of which are discussed above, increased $3.7 billion, or 26%. Interest expense, net increased slightly, primarily from: • Higher interest expense, primarily due to higher average debt outstanding and a higher average effective interest rate; mostly offset by • Higher interest income, primarily due to higher average balances and higher average interest rates on short-term cash equivalents. Other income, net increased $45 million, or 66%, primarily from the $80 million gain recognized during the year ended December 31, 2024, associated with the partial settlement of the Sprint Retirement Pension Plan retiree obligations. See Note 13 – Employee Compensation and Benefit Plans for additional information. Income before income taxes , the components of which are discussed above, was $14.7 billion and $11.0 billion for the years ended December 31, 2024 and 2023, respectively. Income tax expense increased $691 million, or 26%, primarily from: • Higher income before income taxes; partially offset by • An increase in tax benefits from adjustments to certain tax reserves; and • Net tax benefits recognized from a remeasurement of deferred tax assets and liabilities in certain state jurisdictions. Our effective tax rate was 22.9% and 24.4% for the years ended December 31, 2024 and 2023, respectively. 35 Table of Contents Net income , the components of which are discussed above, was $11.3 billion and $8.3 billion for the years ended December 31, 2024 and 2023, respectively. Net income included: • Merger-related costs, net of Merger-related gain and tax, of $91 million for the year ended December 31, 2024, compared to Merger-related costs, net of tax, of $775 million for the year ended December 31, 2023. • Severance and related costs associated with the August 2023 workforce reduction of $347 million, net of tax, for the year ended December 31, 2023. Guarantor Financial Information Pursuant to the applicable indentures and supplemental indentures, the Senior Notes to affiliates and third parties issued by T-Mobile USA, Inc., Sprint and Sprint Capital Corporation (collectively, the “Issuers”) are fully and unconditionally guaranteed, jointly and severally, on a senior unsecured basis by T-Mobile (“Parent”) and certain of Parent’s 100% owned subsidiaries (“Guarantor Subsidiaries”). The guarantees of the Guarantor Subsidiaries are subject to release in limited circumstances only upon the occurrence of certain customary conditions. Generally, the guarantees of the Guarantor Subsidiaries with respect to the Senior Notes issued by T-Mobile USA, Inc. (other than $3.5 billion in principal amount of Senior Notes issued in 2017 and 2018) and the credit agreement entered into by T-Mobile USA, Inc. 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 to merge, consolidate or sell, or otherwise dispose of, substantially all of their assets. Basis of Presentation The following tables include summarized financial information of the obligor groups of debt issued by T-Mobile USA, Inc., Sprint and Sprint Capital Corporation. The summarized financial information of each obligor group is presented on a combined basis with balances and transactions within the obligor group eliminated. Investments in and the equity in earnings of non-guarantor subsidiaries, which would otherwise be consolidated in accordance with GAAP, are excluded from the below summarized financial information pursuant to SEC Regulation S-X Rule 13-01. The summarized balance sheet information for the consolidated obligor group of debt issued by T-Mobile USA, Inc. is presented in the table below: (in millions) December 31, 2024 December 31, 2023 Current assets $ 16,741 $ 17,601 Noncurrent assets 179,335 178,252 Current liabilities 18,279 19,040 Noncurrent liabilities (1) 122,934 128,197 Due to non-guarantors (1) 1,507 10,916 Due to related parties 2,098 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 year ended December 31, 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) Year Ended December 31, 2024 Year Ended December 31, 2023 Total revenues $ 78,996 $ 75,934 Operating income 14,463 10,707 Net income 8,360 4,766 Revenue from non-guarantors 2,619 2,393 Operating expenses to non-guarantors 2,481 2,569 Other expense to non-guarantors (116) (699) 36 Table of Contents The summarized balance sheet information for the consolidated obligor group of debt issued by Sprint is presented in the table below: (in millions) December 31, 2024 December 31, 2023 Current assets $ 10,970 $ 11,193 Noncurrent assets 14,734 11,324 Current liabilities 12,683 12,751 Noncurrent liabilities (1) 96,145 110,688 Due to non-guarantors (1) 21,371 41,805 Due to related parties 2,098 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 year ended December 31, 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) Year Ended December 31, 2024 Year Ended December 31, 2023 Total revenues $ 330 $ 19 Operating loss (3,628) (3,197) Net loss (8,101) (7,629) Other expense, net, to non-guarantors (584) (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) December 31, 2024 December 31, 2023 Current assets $ 10,970 $ 11,193 Noncurrent assets 14,734 11,324 Current liabilities 12,756 12,823 Noncurrent liabilities (1) 92,278 106,881 Due to non-guarantors (1) 12,318 32,706 Due to related parties 2,098 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 year ended December 31, 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) Year Ended December 31, 2024 Year Ended December 31, 2023 Total revenues $ 330 $ 19 Operating loss (3,628) (3,197) Net loss (8,041) (7,491) Other expense, net, to non-guarantors (257) (1,489) Performance Measures In managing our business and assessing financial performance, we supplement the information provided by our consolidated financial statements with other operating or statistical data and non-GAAP financial measures. These operating and financial measures are utilized by our management to evaluate our operating performance and, in certain cases, our ability to meet liquidity requirements. Although companies in the wireless industry may not define each of these measures in precisely the same way, we believe that these measures facilitate comparisons with other companies in the wireless industry on key operating and financial measures. Postpaid Accounts 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 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. 37 Table of Contents The following table sets forth the number of ending postpaid accounts: As of December 31, 2024 Versus 2023 2023 Versus 2022 (in thousands) 2024 2023 2022 # Change % Change # Change % Change Postpaid accounts (1) 30,894 29,797 28,526 1,097 4 % 1,271 4 % (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: Year Ended December 31, 2024 Versus 2023 2023 Versus 2022 (in thousands) 2024 2023 2022 # Change % Change # Change % Change Postpaid net account additions 1,097 1,271 1,436 (174) (14) % (165) (11) % Postpaid net account additions decreased 174,000, or 14%, for the year ended December 31, 2024, primarily from fewer High Speed Internet only additions. Customers 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 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 December 31, 2024 Versus 2023 2023 Versus 2022 (in thousands) 2024 2023 2022 # Change % Change # Change % Change Customers, end of period Postpaid phone customers 79,013 75,936 72,834 3,077 4 % 3,102 4 % Postpaid other customers 25,105 22,116 19,398 2,989 14 % 2,718 14 % Total postpaid customers 104,118 98,052 92,232 6,066 6 % 5,820 6 % Prepaid customers (1) 25,410 21,648 21,366 3,762 17 % 282 1 % Total customers 129,528 119,700 113,598 9,828 8 % 6,102 5 % Adjustments to customers (1) (2) 3,504 170 (1,878) 3,334 NM 2,048 (109) % (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. (2) 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 the fourth quarter of 2023, we recognized an additional base adjustment to increase postpaid phone customers by 20,000 and increase postpaid other customers by 150,000 due to fewer customers than expected whose service was deactivated as a result of the network shut-downs. 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. NM - Not meaningful High Speed Internet customers included in Postpaid other customers were 5,742,000 and 4,288,000 as of December 31, 2024 and 2023, respectively. High Speed Internet customers included in Prepaid customers were 688,000 and 488,000 as of December 31, 2024 and 2023, respectively. 38 Table of Contents Net Customer Additions The following table sets forth the number of net customer additions: Year Ended December 31, 2024 Versus 2023 2023 Versus 2022 (in thousands) 2024 2023 2022 # Change % Change # Change % Change Net customer additions Postpaid phone customers 3,077 3,082 3,093 (5) — % (11) — % Postpaid other customers 2,989 2,568 3,326 421 16 % (758) (23) % Total postpaid customers 6,066 5,650 6,419 416 7 % (769) (12) % Prepaid customers 258 282 338 (24) (9) % (56) (17) % Total net customer additions 6,324 5,932 6,757 392 7 % (825) (12) % Adjustments to customers (1) (2) 3,504 170 (1,878) 3,334 NM 2,048 (109) % (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. (2) 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 the fourth quarter of 2023, we recognized an additional base adjustment to increase postpaid phone customers by 20,000 and increase postpaid other customers by 150,000 due to fewer customers than expected whose service was deactivated as a result of the network shut-downs. 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. NM - Not meaningful Total net customer additions increased 392,000, or 7%, primarily from: • Higher postpaid other net customer additions, primarily due to • Higher net additions from mobile internet devices, primarily due to higher prior year deactivations of lower ARPU mobile internet devices in the educational sector that were activated during the COVID-19 pandemic and no longer needed; and • Higher net additions from other connected devices; partially offset by • Lower net additions from wearables; and • Lower net additions from High Speed Internet, primarily driven by increased deactivations from a growing customer base, partially offset by a lower churn rate; partially offset by • 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 net additions following the Ka’ena Acquisition. • High Speed Internet net customer additions included in postpaid other net customer additions were 1,454,000 and 1,878,000 for the years ended December 31, 2024 and 2023, respectively. High Speed Internet net customer additions included in prepaid net customer additions were 200,000 and 252,000 for the years ended December 31, 2024 and 2023, respectively. Churn 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: Year Ended December 31, Bps Change 2024 Versus 2023 Bps Change 2023 Versus 2022 2024 2023 2022 Postpaid phone churn 0.86 % 0.87 % 0.88 % -1 bps -1 bps Prepaid churn 2.73 % 2.76 % 2.77 % -3 bps -1 bps Postpaid phone churn decreased 1 basis point, primarily from improved customer retention, including the benefits of a differentiated value proposition and network experience. 39 Table of Contents Prepaid churn decreased 3 basis points, primarily from improved customer retention. Postpaid Average Revenue Per Account Postpaid Average Revenue per Account (“ARPA”) represents the average monthly postpaid service revenue earned per account. 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 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) Year Ended December 31, 2024 Versus 2023 2023 Versus 2022 2024 2023 2022 $ Change % Change $ Change % Change Postpaid ARPA $ 143.85 $ 139.27 $ 137.43 $ 4.58 3 % $ 1.84 1 % Postpaid ARPA increased $4.58, or 3%, primarily from: • Higher premium services, primarily high-end rate plans, net of contra-revenues for content included in such plans, and discounts for specific affinity groups, such as 55+, military and first responders; • An increase in customers per account, including continued adoption of High Speed Internet; and • The impact from rate plan optimizations; partially offset by • Increased promotional activity; and • An increase in total High Speed Internet only accounts. Average Revenue Per User 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. 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. Postpaid phone ARPU excludes postpaid other customers and related revenues, which include 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 ARPU: (in dollars) Year Ended December 31, 2024 Versus 2023 2023 Versus 2022 2024 2023 2022 $ Change % Change $ Change % Change Postpaid phone ARPU $ 49.35 $ 48.83 $ 48.78 $ 0.52 1 % $ 0.05 — % Prepaid ARPU 36.06 37.92 38.76 (1.86) (5) % (0.84) (2) % Postpaid Phone ARPU Postpaid phone ARPU increased slightly, primarily from: • Higher premium services, primarily high-end rate plans, net of contra-revenues for content included in such plans, and discounts for specific affinity groups, such as 55+, military and first responders; and • The impact from rate plan optimizations; mostly offset by • Increased promotional activity. Prepaid ARPU Prepaid ARPU decreased $1.86, or 5%, primarily from the inclusion of lower ARPU prepaid customers associated with the Ka’ena Acquisition. 40 Table of Contents 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) loss 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. Adjusted EBITDA margin represents Adjusted EBITDA divided by Service revenues. Core Adjusted EBITDA margin represents Core Adjusted EBITDA divided by Service revenues. Adjusted EBITDA, Adjusted EBITDA margin, Core Adjusted EBITDA and Core Adjusted EBITDA margin are non-GAAP financial measures utilized by our management, including our chief operating decision maker, to monitor the financial performance of our operations and allocate resources of the Company as a whole. We historically used Adjusted EBITDA, and we currently use Core Adjusted EBITDA internally as a measure to evaluate and compensate our personnel and management for their performance. 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, 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. Adjusted EBITDA, Adjusted EBITDA margin, Core Adjusted EBITDA and Core Adjusted EBITDA margin have limitations as analytical tools and should not be considered in isolation or as substitutes for income from operations, net income or any other measure of financial performance reported in accordance with GAAP. 41 Table of Contents 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: Year Ended December 31, 2024 Versus 2023 2023 Versus 2022 (in millions, except percentages) 2024 2023 2022 $ Change % Change $ Change % Change Net income $ 11,339 $ 8,317 $ 2,590 $ 3,022 36 % $ 5,727 221 % Adjustments: Interest expense, net 3,411 3,335 3,364 76 2 % (29) (1) % Other (income) expense, net (113) (68) 33 (45) 66 % (101) (306) % Income tax expense 3,373 2,682 556 691 26 % 2,126 382 % Operating income 18,010 14,266 6,543 3,744 26 % 7,723 118 % Depreciation and amortization 12,919 12,818 13,651 101 1 % (833) (6) % Stock-based compensation (1) 586 644 576 (58) (9) % 68 12 % Merger-related costs (2) 121 1,034 4,969 (913) (88) % (3,935) (79) % Impairment expense — — 477 — NM (477) (100) % Legal-related (recoveries) expenses, net (3) (89) (42) 391 (47) 112 % (433) (111) % (Gain) loss on disposal group held for sale — (25) 1,087 25 (100) % (1,112) (102) % Other, net (4) 317 733 127 (416) (57) % 606 477 % Adjusted EBITDA 31,864 29,428 27,821 2,436 8 % 1,607 6 % Lease revenues (93) (312) (1,430) 219 (70) % 1,118 (78) % Core Adjusted EBITDA $ 31,771 $ 29,116 $ 26,391 $ 2,655 9 % $ 2,725 10 % Net income margin (Net income divided by Service revenues) 17 % 13 % 4 % 400 bps 900 bps Adjusted EBITDA margin (Adjusted EBITDA divided by Service revenues) 48 % 47 % 45 % 100 bps 200 bps Core Adjusted EBITDA margin (Core Adjusted EBITDA divided by Service revenues) 48 % 46 % 43 % 200 bps 300 bps (1) Stock-based compensation includes payroll tax impacts and may not agree with stock-based compensation expense on the consolidated financial statements. Additionally, certain stock-based compensation expenses associated with the Transactions have been included in Merger-related costs. (2) Merger-related costs, for the year ended December 31, 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 (recoveries) expenses, 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. Other, net, for the year ended December 31, 2023, includes $462 million of severance and related costs associated with the August 2023 workforce reduction. NM - Not meaningful Core Adjusted EBITDA increased $2.7 billion, or 9%, for the year ended December 31, 2024. The components comprising Core Adjusted EBITDA are discussed further above. The increase was primarily from: • Higher Total service revenues; • Higher Equipment revenues, excluding lease revenues; and • Lower Cost of services, excluding Special Items; partially offset by • Higher Selling, general and administrative expenses, excluding Special Items; and • Higher Cost of equipment sales, excluding Special Items. Adjusted EBITDA increased $2.4 billion, or 8%, for the year ended December 31, 2024, primarily due to the fluctuations in Core Adjusted EBITDA, discussed above, partially offset by lower lease revenues, which decreased $219 million for the year ended December 31, 2024. 42 Table of Contents 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 and 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. Cash Flows The following is a condensed schedule of our cash flows: Year Ended December 31, 2024 Versus 2023 2023 Versus 2022 (in millions) 2024 2023 2022 $ Change % Change $ Change % Change Net cash provided by operating activities $ 22,293 $ 18,559 $ 16,781 $ 3,734 20 % $ 1,778 11 % Net cash used in investing activities (9,072) (5,829) (12,359) (3,243) 56 % 6,530 (53) % Net cash used in financing activities (12,815) (12,097) (6,451) (718) 6 % (5,646) 88 % Operating Activities Net cash provided by operating activities increased $3.7 billion, or 20%, primarily from: • A $3.7 billion increase in Net income, adjusted for non-cash income and expenses; and • A $49 million decrease in net cash outflows from changes in working capital, primarily due to lower use of cash from Accounts receivable and Other current and long-term liabilities, partially offset by higher use of cash from Accounts payable and accrued liabilities, Equipment installment plan receivables and Operating lease right-of-use assets. • Net cash provided by operating activities includes the impact of $767 million and $2.0 billion in net payments for Merger-related costs for the years ended December 31, 2024 and 2023, respectively. Investing Activities Net cash used in investing activities increased $3.2 billion, or 56%. The use of cash was primarily from: • $8.8 billion in Purchases of property and equipment, including capitalized interest, from the continued build-out of our nationwide 5G network; • $3.5 billion in Purchases of spectrum licenses and other intangible assets, including deposits, primarily for the 600 MHz licenses purchased from Channel 51 License Co LLC and LB License Co, LLC (see Note 7 – Goodwill, Spectrum License Transactions and Other Intangible Assets of the Notes to the Consolidated Financial Statements); and • $373 million of cash consideration, net of cash acquired, related to the Ka’ena Acquisition; partially offset by • $3.6 billion in Proceeds related to beneficial interests in securitization transactions. Financing Activities Net cash used in financing activities increased $718 million, or 6%. The use of cash was primarily from: • $11.2 billion in Repurchases of common stock; • $5.1 billion in Repayments of long-term debt; • $3.3 billion in Dividends on common stock; • $1.4 billion in Repayments of financing lease obligations; and • $269 million in Tax withholdings on share-based awards; partially offset by • $8.6 billion in Proceeds from issuance of long-term debt. Cash and Cash Equivalents As of December 31, 2024, our Cash and cash equivalents were $5.4 billion compared to $5.1 billion at December 31, 2023. 43 Table of Contents 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. 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. Adjusted Free Cash Flow margin is calculated as Adjusted Free Cash Flow divided by Service revenues. Adjusted Free Cash Flow margin is utilized by management, investors, and analysts to evaluate the Company’s ability to convert service revenue efficiently into cash available to pay debt, repurchase shares, pay dividends and provide further investment in the business. 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: Year Ended December 31, 2024 Versus 2023 2023 Versus 2022 (in millions, except percentages) 2024 2023 2022 $ Change % Change $ Change % Change Net cash provided by operating activities $ 22,293 $ 18,559 $ 16,781 $ 3,734 20 % $ 1,778 11 % Cash purchases of property and equipment, including capitalized interest (8,840) (9,801) (13,970) 961 (10) % 4,169 (30) % Proceeds from sales of tower sites — 12 9 (12) (100) % 3 33 % Proceeds related to beneficial interests in securitization transactions 3,579 4,816 4,836 (1,237) (26) % (20) — % Adjusted Free Cash Flow $ 17,032 $ 13,586 $ 7,656 $ 3,446 25 % $ 5,930 77 % Net cash provided by operating activities margin (Net cash provided by operating activities divided by Service revenues) 34 % 29 % 27 % 500 bps 200 bps Adjusted Free Cash Flow margin (Adjusted Free Cash Flow divided by Service revenues) 26 % 21 % 12 % 500 bps 900 bps Adjusted Free Cash Flow increased $3.4 billion, or 25%, for the year ended December 31, 2024, primarily from: • Higher Net cash provided by operating activities, as described above; and • 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 $767 million and $2.0 billion for the years ended December 31, 2024 and 2023, respectively, in net payments for Merger-related costs. During the years ended December 31, 2024 and 2023, there were no significant net cash proceeds from securitization. On October 22, 2024, we executed amendments (the “Pledge Amendments”) to the EIP Sale Arrangement and the Service Receivable Sale Arrangement (as discussed in Note 5 – Sales of Certain Receivables of the Notes to the Consolidated Financial Statements). Following the effective date of the Pledge Amendments of November 1, 2024, all cash proceeds associated with the sale of such receivables, a portion of which, prior to November 1, 2024, were recognized as Proceeds related to beneficial interests in securitization transactions within Net cash used in investing activities on our Consolidated Statements of Cash Flows, were recognized as operating cash flows. The Pledge Amendments did not have a net impact on Adjusted Free Cash Flow. Borrowing Capacity We maintain a revolving credit facility (the “Revolving Credit Facility”) with an aggregate commitment amount of $7.5 billion. As of December 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 December 31, 2024, there was no outstanding balance under this program. 44 Table of Contents Debt Financing As of December 31, 2024, our total debt and financing lease liabilities were $80.6 billion, excluding our tower obligations, of which $74.2 billion was classified as long-term debt and $1.2 billion was classified as long-term financing lease liabilities. During the year ended December 31, 2024, we issued long-term debt for net proceeds of $8.6 billion and repaid short-term debt with an aggregate principal amount of $5.1 billion. For more information regarding our debt financing transactions, see Note 9 – Debt of the Notes to the Consolidated Financial Statements. Spectrum Auctions In September 2022, the FCC announced that we were the winning bidder of 7,156 licenses in Auction 108 (2.5 GHz spectrum) for an aggregate price of $304 million. At inception of Auction 108 in June 2022, we deposited $65 million. We paid the FCC the remaining $239 million for the licenses won in the auction in September 2022. On February 29, 2024, the FCC issued to us the licenses won in Auction 108, and substantially all of these licenses were deployed in March 2024. For more information regarding our spectrum licenses, see Note 7 – Goodwill, Spectrum License Transactions and Other Intangible Assets of the Notes to the Consolidated Financial Statements. License Purchase Agreements 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 (together with Channel 51 License Co LLC, the “Sellers”) 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. Subsequently, on August 25, 2023, we and the Sellers entered into Amendments No. 1 to the Amended and Restated License Purchase Agreements, whereby we deferred the closings of certain additional licenses in Chicago and Dallas into the second closing tranche. Together, the licenses with closings deferred into the second closing tranche represent 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. The first tranche closed on June 24, 2024, and the associated payment of $2.4 billion was made on August 5, 2024. The FCC approved the purchase of the Dallas licenses included in the second tranche on October 22, 2024. The purchase of the Dallas licenses closed on December 6, 2024, and the associated payment of $541 million was made on the same day. We anticipate that the remaining deferred licenses from the second tranche of $604 million will close in 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. On January 13, 2025, we and Comcast entered into an amendment to the License Purchase Agreement pursuant to which we will acquire additional spectrum. Subsequent to the amendment, the total cash consideration for the transaction is between $1.2 billion and $3.4 billion. We anticipate the closing will occur in the first half of 2028. On September 10, 2024, we entered into a License Purchase Agreement with N77 License Co LLC (“Buyer”), pursuant to which Buyer has the option to purchase all or a portion of our remaining 3.45 GHz spectrum licenses in exchange for a range of cash consideration, with the specific licenses sold to be determined based upon the amount of committed financing raised by Buyer. As of December 31, 2024 and 2023, the licenses subject to the License Purchase Agreement were held at cost of $2.7 billion in Spectrum licenses on our Consolidated Balance Sheets. We maintain the right to terminate the License Purchase 45 Table of Contents Agreement no later than February 7, 2025, as we did not receive written notice of committed financing as of December 9, 2024, from the Buyer at or above a certain target level of cash consideration. If we do not terminate the License Purchase Agreement, the transaction is subject to FCC approval. Acquisition of Ka’ena Corporation 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. 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. The amount of the upfront payment was subject to customary adjustments and as a result of such adjustments, $17 million of the upfront payment was returned to T-Mobile during the fourth quarter of 2024, which resulted in a commensurate increase in the maximum payable in satisfaction of the earnout. Based on the adjusted amount paid upfront, up to an additional $420 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. For more information regarding the Ka’ena Acquisition, see Note 2 – Business Combinations of the Notes to the Consolidated Financial Statements. Lumos Joint Venture On April 24, 2024, we entered into a definitive agreement with Fund VI to establish a joint venture between us and Fund VI to acquire Lumos from EQT’s predecessor fund, EQT Infrastructure III. The arrangement is expected to close in the first half of 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 definitive agreement, we expect to make an additional capital contribution of approximately $500 million in 2027 or 2028 under the existing business plan. For more information regarding the Lumos joint venture, see Note 3 – Joint Ventures of the Notes to the Consolidated Financial Statements. Acquisition of 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 and to 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 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 under the existing business plan. For more information regarding the Metronet joint venture, see Note 3 – Joint Ventures of the Notes to the Consolidated Financial Statements. 46 Table of Contents Acquisition of Vistar Media Inc. On December 20, 2024, we entered into an agreement and plan of merger for the acquisition of 100% of the outstanding capital stock of Vistar Media Inc., for a purchase price of approximately $625 million. The purchase price is subject to certain agreed-upon working capital and other adjustments. The acquisition is subject to certain customary closing conditions, including certain regulatory approvals, and is expected to close in the first quarter of 2025. For more information regarding the acquisition of Vistar Media Inc., see Note 2 – Business Combinations of the Notes to the 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 December 31, 2024, we derecognized net receivables of $1.6 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 Consolidated Financial Statements. Future Sources and Uses of Liquidity We may seek additional sources of liquidity, including through the issuance of additional debt, to continue to opportunistically acquire spectrum licenses or other long-lived assets in private party transactions, repurchase shares, pay dividends or for the refinancing of existing long-term debt on an opportunistic basis. 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, share repurchases, and dividend payments. 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 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 December 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 December 31, 2024, we have entered into $9.9 billion of financing leases under these financing lease facilities, of which $1.2 billion was executed during the year ended December 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, 2025. Capital Expenditures Our liquidity requirements for capital expenditures have been driven primarily by capital expenditures for spectrum licenses, the construction, expansion and upgrading of our network infrastructure, the integration of the networks, spectrum, technology, personnel and customer base of T-Mobile and Sprint, which is substantially complete, and investments in information technology platforms. We expect to maintain our investment in capital expenditures related to these efforts in 2025 compared to 47 Table of Contents 2024, as we continue to build out our nationwide 5G network and our digital transformation. Future capital expenditure requirements will be primarily driven by the deployment of acquired spectrum licenses. For more information regarding our spectrum licenses, see Note 7 – Goodwill, Spectrum License Transactions and Other Intangible Assets of the Notes to the Consolidated Financial Statements. Stockholder Returns On September 6, 2023, our Board of Directors authorized our 2023-2024 Stockholder Return Program of up to $19.0 billion that ran from October 1, 2023, through December 31, 2024. The 2023-2024 Stockholder Return Program consisted of repurchases of shares of our common stock and the payment of cash dividends. During the year ended December 31, 2024, we repurchased 59,376,922 shares of our common stock at an average price per share of $187.07 for a total purchase price of $11.1 billion, all of which were purchased under the 2023-2024 Stockholder Return Program. During the year ended December 31, 2024, we paid an aggregate of $3.3 billion, in cash dividends to our stockholders, which was presented within Net cash used in financing activities on our Consolidated Statements of Cash Flows. On December 13, 2024, we announced that our Board of Directors authorized our 2025 Stockholder Return Program of up to $14.0 billion that will run through December 31, 2025. The 2025 Stockholder Return Program is expected to consist of additional repurchases of shares of our common stock and the payment of cash dividends. 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 2025 Stockholder Return Program for share repurchases will be reduced by the amount of any cash dividends declared and paid by us. The 2025 Stockholder Return Program is the next step consistent with the Company’s capital allocation framework outlined at its recent Capital Markets Day. As discussed at Capital Markets Day, the Company expects its business plan to support approximately $80.0 billion in investments and capital returns between September 18, 2024, and the end of 2027. The Company currently plans to allocate such funds as follows: • Up to $50.0 billion for share repurchases and cash dividends, which includes the 2025 Stockholder Return Program; • Approximately $19.5 billion in a discretionary and flexible envelope for potential activities, which may include de-levering, investments in our core business, strategic investments, and/or additional capital returns to stockholders beyond the $50.0 billion initial allocation; and • Approximately $10.5 billion to complete pending transactions. See Note 2 - Business Combinations , Note 3 - Joint Ventures and Note 7 – Goodwill, Spectrum License Transactions and Other Intangible Assets for additional information. On November 21, 2024, our Board of Directors declared a cash dividend of $0.88 per share on our issued and outstanding common stock, which will be paid on March 13, 2025, to stockholders of record as of the close of business on February 28, 2025. As of December 31, 2024, $1.0 billion for dividends payable is presented within Other current liabilities on our Consolidated Balance Sheets. Subsequent to December 31, 2024, from January 1, 2025, through January 24, 2025, we repurchased 2,855,113 shares of our common stock at an average price per share of $216.03 for a total purchase price of $617 million under the 2025 Stockholder Return Program. As of January 24, 2025, we had up to $13.4 billion remaining under the 2025 Stockholder Return Program for repurchases of shares and quarterly dividends through December 31, 2025. For additional information regarding the 2023-2024 Stockholder Return Program and the 2025 Stockholder Return Program, see Note 1 5 – Stockholder Return Progra ms of the Notes to the Consolidated Financial Statements. 48 Table of Contents Contractual Obligations In connection with the regulatory approvals of the Transactions, we made commitments to various state and federal agencies, including the U.S. Department of Justice and FCC. For more information regarding these commitments, see Note 1 8 – Commitments and Contingencies of the Notes to the Consolidated Financial Statements. The following table summarizes our material contractual obligations and borrowings as of December 31, 2024, and the timing and effect that such commitments are expected to have on our liquidity and capital requirements in future periods: (in millions) Less Than 1 Year 1 - 3 Years 3 - 5 Years More Than 5 Years Total Long-term debt (1) $ 4,069 $ 11,735 $ 15,388 $ 46,799 $ 77,991 Interest on long-term debt 3,203 5,792 4,695 22,773 36,463 Financing lease liabilities, including imputed interest 1,242 1,166 29 — 2,437 Tower obligations (2) 380 788 835 3,677 5,680 Operating lease liabilities, including imputed interest 4,491 8,493 7,241 15,664 35,889 Purchase obligations (3) (4) (5) (6) 4,589 5,050 2,240 2,338 14,217 Spectrum leases and service credits (7) 289 613 641 3,807 5,350 IP transit services liability (8) 100 183 — — 283 Total contractual obligations $ 18,363 $ 33,820 $ 31,069 $ 95,058 $ 178,310 (1) Represents principal amounts of long-term debt to affiliates and third parties at maturity, excluding unamortized premiums, discounts, debt issuance costs, consent fees, and financing lease obligations. See Note 9 – Debt of the Notes to the Consolidated Financial Statements for further information. (2) Future minimum payments, including principal and interest payments, related to the tower obligations. See Note 10 – Tower Obligations of the Notes to the Consolidated Financial Statements for further information. (3) The minimum commitment for certain obligations is based on termination penalties that could be paid to exit the contracts. Termination penalties are included in the above table as payments due as of the earliest we could exit the contract, typically in less than one year. For certain contracts that include fixed volume purchase commitments and fixed prices for various products, the purchase obligations are calculated using fixed volumes and contractually fixed prices for the products that are expected to be purchased. This table does not include open purchase orders as of December 31, 2024 under normal business purposes. See Note 1 8 – Commitments and Contingencies of the Notes to the Consolidated Financial Statements for further information. (4) 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. As of December 31, 2024, the remaining deferred licenses from the second tranche of $604 million are subject to regulatory approval and are excluded from our reported purchase commitments above. On September 12, 2023, we entered into a License Purchase Agreement to acquire spectrum in the 600 MHz band from Comcast in exchange for total cash consideration of between $1.2 billion and $3.3 billion. On January 13, 2025, we and Comcast entered into an amendment to the License Purchase Agreement pursuant to which we will acquire additional spectrum. Subsequent to the amendment, the total cash consideration for the transaction is between $1.2 billion and $3.4 billion. The agreement, as amended, remains subject to an application for FCC approval. Total consideration for this License Purchase Agreement is excluded from our reported purchase obligations above. See Note 7 – Goodwill, Spectrum License Transactions and Other Intangible Assets of the Notes to the Consolidated Financial Statements for further information. (5) On May 1, 2024, we completed the Ka’ena Acquisition and based on the amount of the adjusted upfront payment, up to an additional $420 million in future cash and T-Mobile common stock is payable in satisfaction of the earnout and is excluded from our reported purchase commitments above. Additionally, on May 24, 2024, we entered into a securities purchase agreement with UScellular for an aggregate purchase price of approximately $4.4 billion, payable in cash and the assumption of up to $2.0 billion of debt, as well as entered into a master license agreement with estimated minimum lease payments of $1.4 billion over 15 years post-closing. On December 20, 2024, we entered into an agreement and plan of merger for the acquisition of 100% of the outstanding capital stock of Vistar Media Inc. for a purchase price of approximately $625 million. These transactions are subject to customary closing conditions and receipt of certain regulatory approvals and are excluded from our reported purchase obligations above. See Note 2 – Business Combinations of the Notes to the Consolidated Financial Statements for further information. (6) On April 24, 2024, we entered into a definitive agreement with Fund VI to establish a joint venture between us and Fund VI to acquire Lumos. We expect to invest approximately $950 million in the joint venture. In addition, pursuant to the definitive agreement, we expect to make an additional capital contribution of approximately $500 million in 2027 or 2028 under the existing business plan. Additionally, on July 18, 2024, we entered into a definitive agreement with KKR to establish a joint venture to acquire Metronet. At closing, we expect to invest approximately $4.9 billion in the joint venture. These transactions are subject to customary closing conditions and regulatory approvals and are excluded from our reported purchase obligations above. See Note 3 – Joint Ventures of the Notes to the Consolidated Financial Statements for further information. (7) Spectrum lease agreements are typically for terms of five to 10 years with automatic renewal provisions, bringing the total term of the agreements up to 30 years. (8) On May 1, 2023, Cogent Infrastructure, Inc. and the Company completed the Wireline Transaction. Under the terms of the Wireline Sale Agreement, the Company agreed to make payments pursuant to an IP transit services agreement totaling $700 million, consisting of (i) $350 million in equal monthly installments during the first year after the closing and (ii) $350 million in equal monthly installments over the subsequent 42 months. For more information regarding the Wireline Transaction, see Note 1 – Summary of Significant Accounting Policies of the Notes to the Consolidated Financial Statements. 49 Table of Contents Certain commitments and obligations are included in the table based on the year of required payment or an estimate of the year of payment. Other long-term liabilities have been omitted from the table above due to the uncertainty of the timing of payments, combined with the lack of historical trends to predict future payments. The purchase obligations reflected in the table above are primarily commitments to purchase spectrum licenses, wireless devices, network services, equipment, software, marketing sponsorship agreements and other items in the ordinary course of business. These amounts do not represent our entire anticipated purchases in the future but represent only those items for which we are contractually committed. Where we are committed to make a minimum payment to the supplier regardless of whether we take delivery, we have included only that minimum payment as a purchase obligation. The acquisition of spectrum licenses is subject to regulatory approval and other customary closing conditions. Related Party Transactions 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 January 24, 2025, DT and SoftBank held, directly or indirectly, approximately 51.5% and 7.5%, respectively, of the outstanding T-Mobile common stock, with the remaining approximately 41.0% 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 January 24, 2025, over approximately 58.7% of the outstanding T-Mobile common stock. Disclosure of Iranian Activities under Section 13(r) of the Exchange Act Section 219 of the Iran Threat Reduction and the Syria Human Rights Act of 2012 added Section 13(r) to the Exchange Act. Section 13(r) requires an issuer to disclose in its annual or quarterly reports, as applicable, whether it or any of its affiliates knowingly engaged in certain activities, transactions or dealings relating to Iran or with designated natural persons or entities involved in terrorism or the proliferation of weapons of mass destruction. Disclosure is required even where the activities, transactions or dealings are conducted outside the U.S. by non-U.S. affiliates in compliance with applicable law, and whether or not the activities are sanctionable under U.S. law. 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 year ended December 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. DT, through certain of its non-U.S. 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: Irancell Telecommunications Services Company, Telecommunication Kish Company, Mobile Telecommunication Company of Iran, and Telecommunication Infrastructure Company of Iran. In addition, during the year ended December 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. These services have been terminated or are in the process of being terminated. For the year ended December 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 year ended December 31, 2024, were less than $0.1 million. We understand that DT intends to continue these activities. Separately, SoftBank, through one of its non-U.S. subsidiaries, provides roaming services in Iran through Irancell Telecommunications Services Company. During the year ended December 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 year ended December 31, 2024, SoftBank estimates that gross revenues and net profit 50 Table of Contents 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. In addition, SoftBank, through one of its non-U.S. 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 year ended December 31, 2024, were both under $0.1 million. We understand that the SoftBank subsidiary intends to continue such activities. Critical Accounting Estimates Our significant accounting policies are fundamental to understanding our results of operations and financial condition as they require that we use estimates and assumptions that may affect the value of our assets or liabilities and financial results. See Note 1 – Summary of Significant Accounting Policies of the Notes to the Consolidated Financial Statements for further information. Two of these policies, discussed below, relate to critical estimates because they require management to make difficult, subjective and complex judgments about matters that are inherently uncertain and because it is likely that materially different amounts would be reported under different conditions or using different assumptions. Actual results could differ from those estimates. Management and the Audit Committee of the Board of Directors have reviewed and approved the accounting policies associated with these critical estimates. Depreciation Our property and equipment balance represents a significant component of our consolidated assets. We record property and equipment at cost, and we generally depreciate property and equipment on a straight-line basis over the estimated useful life of the assets. If all other factors were to remain unchanged, we expect that a one-year increase in the useful lives of our in-service property and equipment would have resulted in a decrease of approximately $3.2 billion in our 2024 depreciation expense and that a one-year decrease in the useful life would have resulted in an increase of approximately $4.6 billion in our 2024 depreciation expense. See Note 1 – Summary of Significant Accounting Policies and Note 6 – Property and Equipment of the Notes to the Consolidated Financial Statements for information regarding depreciation of assets, including management’s underlying estimates of useful lives. Income Taxes We account for uncertainty in income taxes recognized in the financial statements in accordance with the accounting guidance for the financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. We assess whether it is more likely than not that a tax position will be sustained upon examination based on the technical merits of the position and adjust the unrecognized tax benefits in light of changes in facts and circumstances, such as changes in tax law, interactions with taxing authorities and developments in case law. The income tax laws of the jurisdictions in which we operate are complex and subject to different interpretations by management and the relevant government taxing authorities. In establishing a provision for income tax expense, we must make judgments about the application of these inherently complex tax laws. We must also make estimates about when in the future certain items will affect taxable income in the various tax jurisdictions. Our interpretations may be subjected to review during examination by taxing authorities and disputes may arise over the respective tax positions. We attempt to resolve these disputes during the tax examination and audit process and ultimately through the court system when applicable. We monitor relevant tax authorities and revise our estimate of accrued income taxes due to changes in income tax laws and their interpretation by the courts and regulatory authorities on a quarterly basis. Revisions of our estimate of accrued income taxes also may result from our own income tax planning and from the resolution of income tax controversies. Such revisions in our estimates may be material to our Income tax expense for any given quarter. Accounting Pronouncements Not Yet Adopted For information regarding recently issued accounting standards, see Note 1 – Summary of Significant Accounting Policies of the Notes to the Consolidated Financial Statements. 51 Table of Contents