T-Mobile US, Inc. 10-Q

Item 1. Financial Statements T-Mobile US, Inc. Condensed Consolidated Balance Sheets (Unaudited) (in millions, except share and per share amounts) March 31, 2025 December 31, 2024 Assets Current assets Cash and cash equivalents $ 12,003 $ 5,409 Accounts receivable, net of allowance for credit losses of $ 175 and $ 176 4,392 4,276 Equipment installment plan receivables, net of allowance for credit losses and imputed discount of $ 647 and $ 656 4,294 4,379 Inventory 1,937 1,607 Prepaid expenses 980 880 Other current assets 3,835 1,853 Total current assets 27,441 18,404 Property and equipment, net 37,897 38,533 Operating lease right-of-use assets 25,025 25,398 Financing lease right-of-use assets 2,977 3,091 Goodwill 13,467 13,005 Spectrum licenses 98,733 100,558 Other intangible assets, net 2,618 2,512 Equipment installment plan receivables due after one year, net of allowance for credit losses and imputed discount of $ 161 and $ 158 2,111 2,209 Other assets 4,364 4,325 Total assets $ 214,633 $ 208,035 Liabilities and Stockholders' Equity Current liabilities Accounts payable and accrued liabilities $ 7,900 $ 8,463 Short-term debt 8,214 4,068 Deferred revenue 1,193 1,222 Short-term operating lease liabilities 3,305 3,281 Short-term financing lease liabilities 1,136 1,175 Other current liabilities 1,881 1,965 Total current liabilities 23,629 20,174 Long-term debt 76,033 72,700 Long-term debt to affiliates 1,497 1,497 Tower obligations 3,634 3,664 Deferred tax liabilities 17,505 16,700 Operating lease liabilities 25,974 26,408 Financing lease liabilities 1,117 1,151 Other long-term liabilities 4,139 4,000 Total long-term liabilities 129,899 126,120 Commitments and contingencies (Note 14) Stockholders' equity Common stock, par value $ 0.00001 per share, 2,000,000,000 shares authorized; 1,273,937,732 and 1,271,074,364 shares issued, 1,137,339,578 and 1,144,579,681 shares outstanding — — Additional paid-in capital 68,837 68,798 Treasury stock, at cost, 136,598,154 and 126,494,683 shares ( 23,085 ) ( 20,584 ) Accumulated other comprehensive loss ( 989 ) ( 857 ) Retained earnings 16,342 14,384 Total stockholders' equity 61,105 61,741 Total liabilities and stockholders' equity $ 214,633 $ 208,035 The accompanying notes are an integral part of these condensed consolidated financial statements. 3 Index for Notes to the Condensed Consolidated Financial Statements T-Mobile US, Inc. Condensed Consolidated Statements of Comprehensive Income (Unaudited) Three Months Ended March 31, (in millions, except share and per share amounts) 2025 2024 Revenues Postpaid revenues $ 13,594 $ 12,631 Prepaid revenues 2,643 2,403 Wholesale and other service revenues 688 1,062 Total service revenues 16,925 16,096 Equipment revenues 3,704 3,251 Other revenues 257 247 Total revenues 20,886 19,594 Operating expenses Cost of services, exclusive of depreciation and amortization shown separately below 2,602 2,688 Cost of equipment sales, exclusive of depreciation and amortization shown separately below 4,798 4,399 Selling, general and administrative 5,488 5,138 Depreciation and amortization 3,198 3,371 Total operating expenses 16,086 15,596 Operating income 4,800 3,998 Other expense, net Interest expense, net ( 916 ) ( 880 ) Other (expense) income, net ( 46 ) 20 Total other expense, net ( 962 ) ( 860 ) Income before income taxes 3,838 3,138 Income tax expense ( 885 ) ( 764 ) Net income $ 2,953 $ 2,374 Net income $ 2,953 $ 2,374 Other comprehensive (loss) income, net of tax Reclassification of loss from cash flow hedges, net of tax effect of $ 16 and $ 15 46 43 Losses on fair value hedges, net of tax effect of $( 61 ) and $ 0 ( 177 ) — Amortization of actuarial gain, net of tax effect of $ 0 and $( 2 ) ( 1 ) ( 5 ) Other comprehensive (loss) income ( 132 ) 38 Total comprehensive income $ 2,821 $ 2,412 Earnings per share Basic $ 2.59 $ 2.00 Diluted $ 2.58 $ 2.00 Weighted-average shares outstanding Basic 1,140,537,935 1,185,298,497 Diluted 1,144,655,297 1,189,092,019 The accompanying notes are an integral part of these condensed consolidated financial statements. 4 Index for Notes to the Condensed Consolidated Financial Statements T-Mobile US, Inc. Condensed Consolidated Statements of Cash Flows (Unaudited) Three Months Ended March 31, (in millions) 2025 2024 Operating activities Net income $ 2,953 $ 2,374 Adjustments to reconcile net income to net cash provided by operating activities Depreciation and amortization 3,198 3,371 Stock-based compensation expense 186 140 Deferred income tax expense 771 715 Bad debt expense 323 282 Losses from sales of receivables 22 21 Changes in operating assets and liabilities Accounts receivable ( 93 ) ( 416 ) Equipment installment plan receivables 24 277 Inventory ( 318 ) 170 Operating lease right-of-use assets 855 856 Other current and long-term assets 10 160 Accounts payable and accrued liabilities ( 268 ) ( 1,734 ) Short- and long-term operating lease liabilities ( 898 ) ( 1,017 ) Other current and long-term liabilities ( 88 ) ( 172 ) Other, net 170 57 Net cash provided by operating activities 6,847 5,084 Investing activities Purchases of property and equipment, including capitalized interest of $( 10 ) and $( 9 ) ( 2,451 ) ( 2,627 ) Purchases of spectrum licenses and other intangible assets, including deposits ( 73 ) ( 61 ) Proceeds related to beneficial interests in securitization transactions — 890 Acquisition of companies, net of cash acquired ( 727 ) — Other, net ( 158 ) 11 Net cash used in investing activities ( 3,409 ) ( 1,787 ) Financing activities Proceeds from issuance of long-term debt 7,774 3,473 Repayments of financing lease obligations ( 315 ) ( 327 ) Repayments of long-term debt ( 479 ) ( 223 ) Repurchases of common stock ( 2,494 ) ( 3,594 ) Dividends on common stock ( 1,003 ) ( 769 ) Tax withholdings on share-based awards ( 272 ) ( 192 ) Other, net ( 18 ) ( 34 ) Net cash provided by (used in) financing activities 3,193 ( 1,666 ) Change in cash and cash equivalents, including restricted cash 6,631 1,631 Cash and cash equivalents, including restricted cash Beginning of period 5,713 5,307 End of period $ 12,344 $ 6,938 The accompanying notes are an integral part of these condensed consolidated financial statements. 5 Index for Notes to the Condensed Consolidated Financial Statements T-Mobile US, Inc. Condensed Consolidated Statement of Stockholders’ Equity (Unaudited) (in millions, except share and per share amounts) Common Stock Outstanding Treasury Stock Outstanding Treasury Shares at Cost Par Value and Additional Paid-in Capital Accumulated Other Comprehensive Loss Retained Earnings Total Stockholders' Equity Balance as of December 31, 2024 1,144,579,681 126,494,683 $ ( 20,584 ) $ 68,798 $ ( 857 ) $ 14,384 $ 61,741 Net income — — — — — 2,953 2,953 Dividends declared ($ 0.88 per share) — — — — — ( 995 ) ( 995 ) Other comprehensive loss — — — — ( 132 ) — ( 132 ) Stock-based compensation — — — 177 — — 177 Stock issued for employee stock purchase plan 712,672 — — 125 — — 125 Issuance of vested restricted stock units 3,105,719 — — — — — — Shares withheld related to net share settlement of stock awards and stock options ( 1,008,606 ) — — ( 273 ) — — ( 273 ) Repurchases of common stock ( 10,091,227 ) 10,091,227 ( 2,495 ) — — — ( 2,495 ) Other, net 41,339 12,244 ( 6 ) 10 — — 4 Balance as of March 31, 2025 1,137,339,578 136,598,154 $ ( 23,085 ) $ 68,837 $ ( 989 ) $ 16,342 $ 61,105 Balance as of December 31, 2023 1,195,807,331 67,096,823 $ ( 9,373 ) $ 67,705 $ ( 964 ) $ 7,347 $ 64,715 Net income — — — — — 2,374 2,374 Dividends declared ($ 1.30 per share) — — — — — ( 1,525 ) ( 1,525 ) Other comprehensive income — — — — 38 — 38 Stock-based compensation — — — 152 — — 152 Stock issued for employee stock purchase plan 950,082 — — 112 — — 112 Issuance of vested restricted stock units 3,525,790 — — — — — — Shares withheld related to net share settlement of stock awards and stock options ( 1,171,055 ) — — ( 192 ) — — ( 192 ) Repurchases of common stock ( 21,933,790 ) 21,933,790 ( 3,604 ) — — — ( 3,604 ) Other, net 61,752 23,309 ( 5 ) 9 — — 4 Balance as of March 31, 2024 1,177,240,110 89,053,922 $ ( 12,982 ) $ 67,786 $ ( 926 ) $ 8,196 $ 62,074 The accompanying notes are an integral part of these condensed consolidated financial statements. 6 Index for Notes to the Condensed Consolidated Financial Statements T-Mobile US, Inc. Index for Notes to the Condensed Consolidated Financial Statements Note 1 Summary of Significant Accounting Policies 8 Note 2 Business Combinations 9 Note 3 Joint Ventures 11 Note 4 Receivables and Rel ated Allowance fo r C redit Losses 12 Note 5 Sales of Certain Receivables 14 Note 6 Goodwill, Spectrum License Transactions and Other Intangible Assets 15 Note 7 Fair Value Measurements 18 Note 8 Debt 20 Note 9 Tower Obligations 22 Note 10 Revenue from Contracts with Customers 23 Note 11 Segment Reporting 25 Note 12 Stockholder Return Program 25 Note 13 Earnings Per Share 26 Note 14 Commitments and Contingencies 27 Note 15 Additional Financial Information 30 Note 16 Subsequent Events 31 7 Index for Notes to the Condensed Consolidated Financial Statements T-Mobile US, Inc. Notes to the Condensed Consolidated Financial Statements Note 1 – Summary of Significant Accounting Policies Basis of Presentation The unaudited condensed consolidated financial statements of T-Mobile US, Inc. (“T-Mobile,” “we,” “our,” “us” or the “Company”) include all adjustments of a normal recurring nature necessary for the fair presentation of the results for the interim periods presented. The results for the interim periods are not necessarily indicative of those for the full year. The condensed consolidated financial statements should be read in conjunction with our consolidated financial statements included in our Annual Report on Form 10-K for the year ended December 31, 2024. The condensed consolidated financial statements include the balances and results of operations of T-Mobile and our consolidated subsidiaries. We consolidate majority-owned subsidiaries over which we exercise control, variable interest entities (“VIEs”) for which we are deemed to be the primary beneficiary and VIEs which cannot be deconsolidated, such as those related to our tower obligations as discussed in Note 9 - Tower Obligations . Intercompany transactions and balances have been eliminated in consolidation. The preparation of financial statements in conformity with United States (“U.S.”) generally accepted accounting principles (“GAAP”) requires our management to make estimates and assumptions that affect the financial statements and accompanying notes. Estimates are based on historical experience, where applicable, and other assumptions that management believes are reasonable under the circumstances. Estimates are inherently subject to judgment and actual results could differ from those estimates. Accounting Pronouncements Not Yet Adopted Income Tax Disclosures In December 2023, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2023-09, “Income Taxes (Topic 740): Improvements to Income Tax Disclosures.” The standard enhances income tax disclosure requirements for all entities by requiring specified categories and greater disaggregation within the rate reconciliation table, disclosure of income taxes paid by jurisdiction, and providing clarification on uncertain tax positions and related financial statement impacts. The standard will be effective for us for our fiscal year 2025 annual financial statements with early adoption permitted. We plan to adopt the standard when it becomes effective for us beginning in our fiscal year 2025 annual financial statements, and we expect the adoption of the standard will impact certain of our income tax disclosures. Disaggregation of Income Statement Expenses In November 2024, the FASB issued ASU 2024-03, “Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses.” In January 2025, the FASB issued ASU 2025-01, “Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40): Clarifying the Effective Date,” which clarifies the effective date of ASU 2024-03. The standard requires that public business entities disclose additional information about specific expense categories in the notes to financial statements for interim and annual reporting periods. The standard will become effective for us for our fiscal year 2027 annual financial statements and interim financial statements thereafter and may be applied prospectively to periods after the adoption date or retrospectively for all prior periods presented in the financial statements, with early adoption permitted. We plan to adopt the standard when it becomes effective for us beginning in our fiscal year 2027 annual financial statements, and we are currently evaluating the impact this guidance will have on the disclosures included in the Notes to the Consolidated Financial Statements. 8 Index for Notes to the Condensed Consolidated Financial Statements Note 2 – Business Combinations 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 resulted 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. Upon the completion of certain customary closing conditions, including the receipt of certain regulatory approvals, on May 1, 2024 (the “Ka’ena Acquisition Date”), we completed the Ka’ena Acquisition, and as a result, Ka’ena became a wholly owned subsidiary of T-Mobile. Concurrently and as agreed upon through the Merger and Unit Purchase Agreement, T-Mobile and Ka’ena entered into certain separate transactions, including the effective settlement of the preexisting wholesale arrangement between T-Mobile and Ka’ena and agreements with certain of the sellers to provide services to T-Mobile during the post-acquisition period. In accordance with the terms of the Merger and Unit Purchase Agreement, the total purchase price is variable, dependent upon specified performance indicators of Ka’ena, and consists of an upfront payment on the Ka’ena Acquisition Date and an earnout payable on August 1, 2026. As of March 31, 2025, $ 210 million of liabilities for contingent consideration and $ 106 million of liabilities for post-acquisition services were presented within Other long-term liabilities on our Condensed Consolidated Balance Sheets. Fair Value of Assets Acquired and Liabilities Assumed We have accounted for the Ka’ena Acquisition as a business combination. The identifiable assets acquired and liabilities assumed from Ka’ena were recorded at their provisionally assigned fair values as of the Ka’ena Acquisition Date and consolidated with those of T-Mobile. During the three months ended March 31, 2025, the provisionally assigned fair values of Other long-term liabilities and Deferred tax liabilities increased $ 9 million and decreased $ 3 million, respectively, with an offsetting net increase to Goodwill, based on additional information arising subsequent to the initial valuation. These measurement period adjustments did not have an impact on our Condensed Consolidated Statements of Comprehensive Income for the three months ended March 31, 2025. Goodwill Goodwill with a provisionally assigned value of $ 777 million represents the excess of the consideration transferred over the fair values of assets acquired and liabilities assumed. The provisionally assigned goodwill recognized includes expected growth in customers and service revenues to be achieved from the operations of the combined company, the assembled workforce of Ka’ena and intangible assets that do not qualify for separate recognition. Of the total provisionally assigned amount of goodwill resulting from the Ka’ena Acquisition of $ 777 million, the preliminary amount deductible for tax purposes is $ 121 million. All of the goodwill acquired is allocated to the Wireless reporting unit. 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 substantially all of UScellular’s wireless operations and select AWS, PCS, 600 MHz, 700 MHz and other 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 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. 9 Index for Notes to the Condensed Consolidated Financial Statements 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. 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. (“Vistar”), a provider of technology solutions for digital-out-of-home advertisements (the “Vistar Acquisition”). Upon the completion of certain customary closing conditions, including the receipt of certain regulatory approvals, on February 3, 2025 (the “Vistar Acquisition Date”), we completed the Vistar Acquisition, and as a result, Vistar became a wholly owned subsidiary of T-Mobile. In exchange, T-Mobile transferred cash of $ 621 million. A portion of the payment made on the Vistar Acquisition Date was for the settlement of preexisting relationships with Vistar and is excluded from the fair value of consideration transferred. The financial results of Vistar from the Vistar Acquisition Date through March 31, 2025, were not material to our Condensed Consolidated Statements of Comprehensive Income, nor were they material to our prior period consolidated results on a pro forma basis. Costs related to the Vistar Acquisition were not material to our Condensed Consolidated Statements of Comprehensive Income. Fair Value of Assets Acquired and Liabilities Assumed We have accounted for the Vistar Acquisition as a business combination. The identifiable assets acquired and liabilities assumed from Vistar were recorded at their provisionally assigned fair values as of the Vistar Acquisition Date and consolidated with those of T-Mobile. Assigning fair values to the assets acquired and liabilities assumed at the Vistar Acquisition Date requires the use of judgment regarding estimates and assumptions. For the provisionally assigned fair values of the assets acquired and liabilities assumed, we used the cost and income approaches. The following table summarizes the provisionally assigned fair values for each class of assets acquired and liabilities assumed at the Vistar Acquisition Date. We are in the process of finalizing the valuation of the assets acquired and liabilities assumed, including income tax-related amounts. Therefore, the provisionally assigned fair values set forth below are subject to adjustment as additional information is obtained. (in millions) February 3, 2025 Cash and cash equivalents $ 42 Accounts receivable 157 Prepaid expense and other current assets 2 Property and equipment 1 Operating lease right-of-use assets 1 Goodwill 344 Other intangible assets 264 Total assets acquired 811 Accounts payable and accrued liabilities 127 Deferred revenue 1 Deferred tax liabilities 62 Operating lease liabilities 2 Total liabilities assumed 192 Total consideration transferred $ 619 Intangible Assets Goodwill with a provisionally assigned value of $ 344 million represents the excess of the consideration transferred over the fair values of assets acquired and liabilities assumed. The provisionally assigned goodwill recognized includes expected growth in service revenues to be achieved from the operations of the combined company, the assembled workforce of Vistar and intangible assets that do not qualify for separate recognition. 10 Index for Notes to the Condensed Consolidated Financial Statements Other intangible assets acquired primarily include $ 201 million of customer relationships with an estimated weighted-average useful life of nine years , $ 8 million of tradenames with an estimated weighted-average useful life of four years and $ 55 million of other intangible assets with an estimated weighted-average useful life of four years . The customer relationships are amortized using the sum-of-the-years digits method over their estimated useful lives, and the tradenames are amortized on a straight-line basis over their estimated useful lives. The preliminary fair value of customer relationships was estimated using the income approach. This fair value measurement is based on significant inputs not observable in the market, and, therefore, represents a Level 3 measurement as defined in ASC 820. The key assumptions in applying the income approach include revenue over an estimated period of time, the discount rate, forecasted expenses and contributory asset charges. Acquisition of Blis Holdco Limited On February 18, 2025, we entered into a share purchase agreement for the acquisition of 100 % of the outstanding capital stock of Blis Holdco Limited (“Blis”), a provider of advertising solutions (the “Blis Acquisition”). Upon the completion of certain customary closing conditions, including the receipt of certain regulatory approvals, on March 3, 2025 (the “Blis Acquisition Date”), we completed the Blis Acquisition, and as a result, Blis became a wholly owned subsidiary of T-Mobile. In exchange, T-Mobile transferred cash of $ 180 million. A portion of the payment made on the Blis Acquisition Date was for the settlement of preexisting relationships with Blis and is excluded from the fair value of consideration transferred. We have accounted for the Blis Acquisition as a business combination. The fair value of consideration transferred as of the Blis Acquisition Date totaled $ 174 million. The identifiable assets acquired and liabilities assumed from Blis were recorded at their provisionally assigned fair values as of the Blis Acquisition Date and consolidated with those of T-Mobile. The provisionally assigned fair values of total assets acquired, including goodwill, and total liabilities assumed at the Blis Acquisition Date were $ 276 million and $ 102 million, respectively. Goodwill with a provisionally assigned value of $ 112 million represents the excess of the consideration transferred over the fair values of assets acquired and liabilities assumed. We are in the process of finalizing the valuation of the assets acquired and liabilities assumed. Therefore, the provisionally assigned fair values above are subject to adjustment as additional information is obtained. Note 3 – Joint Ventures Lumos and Metronet 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. Subsequent to March 31, 2025, on April 1, 2025, we completed the joint acquisition of Lumos, upon the completion of certain customary closing conditions, including the receipt of certain regulatory approvals. At closing, we invested $ 926 million to acquire a 50 % equity interest in the joint venture and fiber customers. The funds invested by us will be used by the joint venture 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 mid-2025, subject to customary closing conditions and regulatory approvals. At closing, we expect to invest approximately $ 4.9 billion to acquire a 50 % equity interest in the joint venture and all existing residential fiber customers, as well as funding of the joint venture. We do not anticipate making further capital contributions following the closing under the existing business plan. 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 Condensed Consolidated Statements of Comprehensive Income. 11 Index for Notes to the Condensed Consolidated Financial Statements Note 4 – Receivables and Related Allowance for Credit Losses We maintain an allowance for credit losses by applying an expected credit loss model. Each period, management assesses the appropriateness of the level of allowance for credit losses by considering credit risk inherent within each portfolio segment as of the end of the period. We consider a receivable past due when a customer has not paid us by the contractually specified payment due date. Account balances are written off against the allowance for credit losses if collection efforts are unsuccessful and the receivable balance is deemed uncollectible (customer default), based on factors such as customer credit ratings as well as the length of time the amounts are past due. Our portfolio of receivables is comprised of two portfolio segments: accounts receivable and equipment installment plan (“EIP”) receivables. Accounts Receivable Portfolio Segment Accounts receivable balances are predominately comprised of amounts currently due from customers (e.g., for wireless communications services), device insurance administrators, wholesale partners, other carriers and third-party retail channels. We estimate credit losses associated with our accounts receivable portfolio segment using an expected credit loss model, which utilizes an aging schedule methodology based on historical information and is adjusted for asset-specific considerations, current economic conditions and reasonable and supportable forecasts. Our approach considers a number of factors, including our overall historical credit losses and payment experience, as well as current collection trends such as write-off frequency and severity. We also consider other qualitative factors such as current and forecasted macroeconomic conditions. We consider the need to adjust our estimate of credit losses for reasonable and supportable forecasts of future macroeconomic conditions. To do so, we monitor external forecasts of changes in real U.S. gross domestic product and forecasts of consumer credit behavior for comparable credit exposures. EIP Receivables Portfolio Segment Based upon customer credit profiles at the time of customer origination, as well as subsequent credit performance, we classify the EIP receivables segment into two customer classes of “Prime” and “Subprime.” Prime customer receivables are those with lower credit risk, and Subprime customer receivables are those with higher credit risk. Customers may be required to make a down payment on their equipment purchases if their assessed credit risk exceeds established underwriting thresholds. In addition, certain customers within the Subprime category may be required to pay a deposit. To determine a customer’s credit profile and assist in determining their credit class, we use a proprietary credit scoring model that measures the credit quality of a customer leveraging several factors, such as credit bureau information and consumer credit risk scores, as well as service and device plan characteristics. EIP receivables had a combined weighted-average effective interest rate of 11.2 % and 11.1 % as of March 31, 2025, and December 31, 2024, respectively. The following table summarizes the EIP receivables, including imputed discounts and related allowance for credit losses: (in millions) March 31, 2025 December 31, 2024 EIP receivables, gross $ 7,213 $ 7,402 Unamortized imputed discount ( 518 ) ( 524 ) EIP receivables, net of unamortized imputed discount 6,695 6,878 Allowance for credit losses ( 290 ) ( 290 ) EIP receivables, net of allowance for credit losses and imputed discount $ 6,405 $ 6,588 Classified on our condensed consolidated balance sheets as: Equipment installment plan receivables, net of allowance for credit losses and imputed discount $ 4,294 $ 4,379 Equipment installment plan receivables due after one year, net of allowance for credit losses and imputed discount 2,111 2,209 EIP receivables, net of allowance for credit losses and imputed discount $ 6,405 $ 6,588 12 Index for Notes to the Condensed Consolidated Financial Statements Many of our loss estimation techniques rely on delinquency-based models categorized by customer credit class; therefore, delinquency is an important indicator of credit quality in the establishment of our allowance for credit losses for EIP receivables. We manage our EIP receivables portfolio segment using delinquency and customer credit class as key credit quality indicators. The following table presents the amortized cost of our EIP receivables by delinquency status, customer credit class and year of origination as of March 31, 2025: Originated in 2025 Originated in 2024 Originated prior to 2024 Total EIP Receivables, Net of Unamortized Imputed Discount (in millions) Prime Subprime Prime Subprime Prime Subprime Prime Subprime Total Current - 30 days past due $ 1,314 $ 363 $ 3,307 $ 849 $ 602 $ 136 $ 5,223 $ 1,348 $ 6,571 31 - 60 days past due 5 5 15 21 3 3 23 29 52 61 - 90 days past due 1 1 10 19 3 2 14 22 36 More than 90 days past due — — 10 19 3 4 13 23 36 EIP receivables, net of unamortized imputed discount $ 1,320 $ 369 $ 3,342 $ 908 $ 611 $ 145 $ 5,273 $ 1,422 $ 6,695 We estimate credit losses on our EIP receivables segment by applying an expected credit loss model, which relies on historical loss data adjusted for current conditions to calculate default probabilities or an estimate for the frequency of customer default. Our assessment of default probabilities or frequency includes receivables delinquency status, historical loss experience, how long the receivables have been outstanding and customer credit ratings, as well as customer tenure. We multiply these estimated default probabilities by our estimated loss given default, which is the estimated amount of default or the severity of loss. As we do for our accounts receivable portfolio segment, we consider the need to adjust our estimate of credit losses on EIP receivables for reasonable and supportable forecasts of economic conditions through monitoring external forecasts and periodic internal statistical analyses. The following table presents write-offs of our EIP receivables by year of origination for the three months ended March 31, 2025: (in millions) Originated in 2025 Originated in 2024 Originated prior to 2024 Total Write-offs $ 1 $ 128 $ 29 $ 158 Activity for the three months ended March 31, 2025 and 2024, in the allowance for credit losses and unamortized imputed discount balances for the accounts receivable and EIP receivables segments were as follows: March 31, 2025 March 31, 2024 (in millions) Accounts Receivable Allowance EIP Receivables Allowance Total Accounts Receivable Allowance EIP Receivables Allowance Total Allowance for credit losses and imputed discount, beginning of period $ 176 $ 814 $ 990 $ 161 $ 773 $ 934 Bad debt expense 165 158 323 132 150 282 Write-offs ( 166 ) ( 158 ) ( 324 ) ( 132 ) ( 150 ) ( 282 ) Change in imputed discount on short-term and long-term EIP receivables N/A 36 36 N/A 31 31 Impact on the imputed discount from sales of EIP receivables N/A ( 42 ) ( 42 ) N/A ( 47 ) ( 47 ) Allowance for credit losses and imputed discount, end of period $ 175 $ 808 $ 983 $ 161 $ 757 $ 918 Off-Balance-Sheet Credit Exposures We do not have material off-balance-sheet credit exposures as of March 31, 2025. In connection with the sales of certain service accounts receivable and EIP receivables pursuant to the sale arrangements, we provide guarantees of credit performance included on our Condensed Consolidated Balance Sheets measured at fair value that are based on a discounted cash flow model 13 Index for Notes to the Condensed Consolidated Financial Statements using Level 3 inputs, including estimated customer default rates and credit worthiness, dilutions and recoveries. See Note 5 – Sales of Certain Receivables for further information. Note 5 – Sales of Certain Receivables We regularly enter into transactions to sell certain service accounts receivable and EIP receivables. The transactions, including our continuing involvement with the sold receivables and the respective impacts to our condensed consolidated financial statements, are described below. Sales of EIP Receivables Overview of the Transaction In 2015, we entered into an arrangement to sell certain EIP receivables on a revolving basis (the “EIP Sale Arrangement”), which has been revised and extended from time to time. As of both March 31, 2025, and December 31, 2024, the EIP Sale Arrangement provided funding of $ 1.3 billion. In connection with this EIP Sale Arrangement, we formed a wholly owned subsidiary, which qualifies as a bankruptcy remote entity (the “EIP BRE”). We consolidate the EIP BRE under the VIE model. The following table summarizes the carrying amounts and classification of liabilities, which consist of the recourse guarantee, included on our Condensed Consolidated Balance Sheets with respect to the EIP BRE: (in millions) March 31, 2025 December 31, 2024 Other current liabilities 97 81 Other long-term liabilities 14 32 Sales of Service Accounts Receivable Overview of the Transaction In 2014, we entered into an arrangement to sell certain service accounts receivable on a revolving basis (the “Service Receivable Sale Arrangement”). On February 25, 2025, we extended the scheduled expiration date of the Service Receivable Sale Arrangement to February 24, 2026. As of both March 31, 2025, and December 31, 2024, the Service Receivable Sale Arrangement provided funding of $ 775 million. In connection with the Service Receivable Sale Arrangement, we formed a wholly owned subsidiary, which qualifies as a bankruptcy remote entity, to sell service accounts receivable (the “Service BRE”). We consolidate the Service BRE under the VIE model. The following table summarizes the carrying amounts and classification of liabilities included on our Condensed Consolidated Balance Sheets with respect to the Service BRE: (in millions) March 31, 2025 December 31, 2024 Other current liabilities 359 328 Sales of Receivables On October 22, 2024, we executed an amendment to the EIP Sale Arrangement and an amendment to the Service Receivable Sale Arrangement (together, the “Pledge Amendments”). Prior to the effective date of the Pledge Amendments, the credit enhancement feature of each of the EIP Sale Arrangement and the Service Receivable Sale Arrangement was in the form of a deferred purchase price. Pursuant to the Pledge Amendments, effective on November 1, 2024, the credit enhancement feature of each arrangement is replaced by a recourse guarantee liability, which is collateralized by pledged but unsold receivables. For the three months ended March 31, 2025, all cash proceeds associated with sold receivables are recognized within Net cash provided by operating activities on our Condensed Consolidated Statements of Cash Flows. For the three months ended March 31, 2024, cash proceeds related to beneficial interests in securitization transactions in the form of the deferred purchase price were presented within Net cash used in investing activities on our Condensed Consolidated Statements of Cash Flows. 14 Index for Notes to the Condensed Consolidated Financial Statements The recourse guarantee represents a financial instrument that is primarily tied to the creditworthiness of our customers. At inception, we elected to measure the recourse guarantee liabilities at fair value with changes in fair value included in Selling, general and administrative expenses on our Condensed Consolidated Statements of Comprehensive Income. The fair value of the recourse guarantee liabilities is determined based on a discounted cash flow model which uses primarily Level 3 inputs, including estimated customer default rates and credit worthiness, dilutions and recoveries. Our recourse guarantee liabilities related to the sales of service receivables and EIP receivables were $ 140 million and $ 148 million as of March 31, 2025, and December 31, 2024, respectively. These liabilities were collateralized by $ 278 million and $ 286 million of gross service receivables and $ 510 million and $ 505 million of gross EIP receivables pledged but unsold as of March 31, 2025, and December 31, 2024, respectively, which represent our maximum exposure under the recourse guarantee. The following table summarizes the impact of the sales of certain service receivables and EIP receivables on our Condensed Consolidated Balance Sheets: (in millions) March 31, 2025 December 31, 2024 Derecognized net service accounts receivable and EIP receivables $ 1,581 $ 1,616 Other current liabilities 456 409 of which, recourse guarantee 126 116 Other long-term liabilities 14 32 of which, recourse guarantee 14 32 Net cash proceeds since inception 1,442 1,468 Of which: Change in net cash proceeds during the year-to-date period ( 26 ) ( 115 ) Net cash proceeds funded by reinvested collections 1,468 1,583 We recognized losses from sales of receivables, including changes in fair value of the recourse guarantee liabilities and deferred purchase price assets, of $ 22 million and $ 21 million for the three months ended March 31, 2025 and 2024, respectively, in Selling, general and administrative expenses on our Condensed Consolidated Statements of Comprehensive Income. Continuing Involvement Pursuant to the EIP Sale Arrangement and Service Receivable Sale Arrangement described above, we have continuing involvement with the service accounts receivables and EIP receivables we sell, as we service the receivables, are required to replace certain receivables, including ineligible receivables, aged receivables and receivables where a write-off is imminent, and may be responsible for absorbing credit losses through performance under our recourse guarantee liabilities. We continue to service the customers and their related receivables, including facilitating customer payment collection, in exchange for a monthly servicing fee. As the receivables are sold on a revolving basis, the customer payment collections on sold receivables may be reinvested in new receivable sales. At the direction of the purchasers of the sold receivables, we apply the same policies and procedures while servicing the sold receivables as we apply to our owned receivables, and we continue to maintain normal relationships with our customers. Note 6 – Goodwill, Spectrum License Transactions and Other Intangible Assets Goodwill The changes in the carrying amount of goodwill for the three months ended March 31, 2025, are as follows: (in millions) Goodwill Balance as of December 31, 2024, net of accumulated impairment losses of $ 10,984 $ 13,005 Adjustment to goodwill from the Ka’ena Acquisition 6 Provisionally assigned goodwill from acquisitions in 2025 456 Balance as of March 31, 2025, net of accumulated impairment losses of $ 10,984 $ 13,467 15 Index for Notes to the Condensed Consolidated Financial Statements Spectrum Licenses The following table summarizes our spectrum license activity for the three months ended March 31, 2025: (in millions) Spectrum Spectrum licenses, beginning of year $ 100,558 Spectrum license acquisitions 254 Spectrum licenses transferred to held for sale ( 2,084 ) Costs to clear spectrum 5 Spectrum licenses, end of period $ 98,733 Cash payments to acquire spectrum licenses and payments for costs to clear spectrum are included in Purchases of spectrum licenses and other intangible assets, including deposits, on our Condensed Consolidated Statements of Cash Flows for the three months ended March 31, 2025. License Purchase Agreements Channel 51 License Co LLC and LB License Co, LLC On August 8, 2022, we, Channel 51 License Co LLC and LB License Co, LLC (together with Channel 51 License Co LLC, the “Sellers”) entered into License Purchase Agreements pursuant to which we will acquire spectrum in the 600 MHz band from the Sellers in exchange for total cash consideration of $ 3.5 billion. The licenses will be acquired without any associated networks and are currently being utilized by us through exclusive leasing arrangements with the Sellers. On March 30, 2023, we and the Sellers entered into Amended and Restated License Purchase Agreements pursuant to which we and the Sellers agreed to separate the transaction into two tranches of licenses, with the closings on the acquisitions of certain licenses in Chicago, Dallas and New Orleans being deferred in order to potentially expedite the regulatory approval process for the remainder of the licenses. Subsequently, on August 25, 2023, we and the Sellers entered into Amendments No. 1 to the Amended and Restated License Purchase Agreements, which deferred the closings of certain additional licenses in Chicago and Dallas into the second closing tranche. Together, the licenses with closings deferred into the second closing tranche represent $ 1.1 billion of the aggregate $ 3.5 billion cash consideration. The licenses being acquired by us, and the total consideration being paid for the licenses, remain the same under the original License Purchase Agreements and subsequent amendments. The Federal Communications Commission (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 the second quarter of 2025. The parties have agreed that each of the closings will occur within 180 days after the receipt of the applicable required regulatory approvals, and payment of each portion of the aggregate $ 3.5 billion purchase price will occur no later than 40 days after the date of each respective closing. Comcast Corporation On September 12, 2023, we entered into a License Purchase Agreement (the “Comcast License Purchase Agreement”) with Comcast Corporation and its affiliate, Comcast OTR1, LLC (together with Comcast Corporation, “Comcast”), pursuant to which we will acquire spectrum in the 600 MHz band from Comcast in exchange for total cash consideration of between $ 1.2 billion and $ 3.3 billion, subject to an application for FCC approval. The licenses will be acquired without any associated networks. We anticipate the closing will occur in the first half of 2028. The final purchase price will be determined, in the aggregate and on a per license basis, based on the set of licenses subject to the Comcast License Purchase Agreement at the time the parties make required transfer filings with the FCC. Prior to the time of such filings, Comcast has the right to remove any or all of a certain specified subset of the licenses, totaling $ 2.1 billion (the “Optional Sale Licenses”), from the Comcast License Purchase Agreement. The removal of any Optional Sale Licenses would reduce the final purchase price by the assigned value of each such license, from the maximum purchase price of $ 3.3 billion. 16 Index for Notes to the Condensed Consolidated Financial Statements The licenses are subject to an exclusive leasing arrangement between us and Comcast, which was entered into contemporaneously with the Comcast License Purchase Agreement. If Comcast elects to remove an Optional Sale License from the Comcast License Purchase Agreement, the associated lease for such Optional Sale License will terminate, but no sooner than two years from the date of the Comcast License Purchase Agreement (with us having a minimum period of time after any such termination to cease transmitting on such license’s associated spectrum). On January 13, 2025, we and Comcast entered into an amendment to the Comcast 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. N77 License Co LLC 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 March 31, 2025, $ 1.8 billion of the associated licenses have been classified as held for sale at cost and presented in Other current assets on our Condensed Consolidated Balance Sheets. The transaction is subject to receipt of regulatory approvals and is expected to close in the second quarter of 2025. The closing of this transaction is not expected to have a material impact on our Condensed Consolidated Statements of Comprehensive Income. Grain Management, LLC On March 20, 2025, we announced that we have agreed in principle to a sale of our 800 MHz spectrum licenses to Grain Management, LLC (“Grain”) in exchange for cash consideration and the receipt of Grain’s 600 MHz spectrum licenses. Although a non-binding term sheet has been entered into, no definitive agreements have been executed. The transaction, if finalized, would be subject to FCC approval and certain other customary closing conditions. Spectrum Exchange Transactions During the three months ended March 31, 2025 and 2024, we recognized non-cash spectrum license acquisitions associated with the closing of certain spectrum exchange transactions of $ 172 million and $ 101 million, respectively. During the three months ended March 31, 2025 and 2024, we recognized gains associated with the closing of certain spectrum exchange transactions of $ 12 million and $ 25 million, respectively, as a reduction to Selling, general and administrative expenses on our Condensed Consolidated Statements of Comprehensive Income. As of March 31, 2025, $ 243 million of spectrum licenses were classified as held for sale within Other assets on our Condensed Consolidated Balance Sheets related to spectrum exchange agreements pending regulatory approval and closing, which are expected to close in the next 12 months. The closings of these transactions are not expected to have a significant impact on our Condensed Consolidated Statements of Comprehensive Income. Other Intangible Assets The components of Other intangible assets were as follows: Useful Lives March 31, 2025 December 31, 2024 (in millions) Gross Amount Accumulated Amortization Net Amount Gross Amount Accumulated Amortization Net Amount Customer relationships (1) Up to 9 years $ 5,672 $ ( 4,302 ) $ 1,370 $ 5,427 $ ( 4,123 ) $ 1,304 Reacquired rights Up to 9 years 770 ( 347 ) 423 770 ( 323 ) 447 Tradenames and patents (1) Up to 19 years 353 ( 163 ) 190 338 ( 157 ) 181 Favorable spectrum leases Up to 27 years 616 ( 176 ) 440 620 ( 169 ) 451 Other (1) Up to 10 years 556 ( 361 ) 195 478 ( 349 ) 129 Other intangible assets $ 7,967 $ ( 5,349 ) $ 2,618 $ 7,633 $ ( 5,121 ) $ 2,512 (1) Includes intangible assets acquired through our acquisitions. See Note 2 - Business Combinations for more information. Amortization expense for intangible assets subject to amortization was $ 229 million and $ 211 million for the three months ended March 31, 2025 and 2024, respectively. 17 Index for Notes to the Condensed Consolidated Financial Statements The estimated aggregate future amortization expense for intangible assets subject to amortization is summarized below: (in millions) Estimated Future Amortization Twelve Months Ending March 31, 2026 $ 776 2027 591 2028 423 2029 267 2030 163 Thereafter 398 Total $ 2,618 Note 7 – Fair Value Measurements The carrying values of Cash and cash equivalents, Accounts receivable and Accounts payable and accrued liabilities approximate fair value due to the short-term maturities of these instruments. The carrying values of EIP receivables approximate fair value as the receivables are recorded at their present value using an imputed interest rate. Derivative Financial Instruments We use derivatives to manage exposure to market risk, such as exposure to fluctuations in foreign currency exchange rates and interest rates. We designate certain derivatives as hedging instruments in a qualifying hedge accounting relationship to mitigate fluctuations in values or cash flows related to such risks caused by foreign currency or interest rate volatility. We do not use derivatives for trading or speculative purposes. Cash flows associated with qualifying hedge derivative instruments are presented in the same category on our Condensed Consolidated Statements of Cash Flows as the item being hedged. For fair value hedges, other than foreign currency hedges, the change in the fair value of the derivative instruments is recognized in earnings through the same income statement line item as the change in the fair value of the hedged item. For cash flow hedges, as well as fair value foreign currency hedges, the change in the fair value of the derivative instruments is reported in Accumulated other comprehensive loss and recognized in earnings when the hedged item is recognized in earnings, again, through the same income statement line item. We record derivatives on our Condensed Consolidated Balance Sheets at fair value that is derived primarily from observable market data, including exchange rates, interest rates and forward curves. These market inputs are utilized in the discounted cash flow calculation considering the instrument's term, notional amount, discount rate and credit risk. Significant inputs to derivative valuations are generally observable in active markets and, as such, are classified as Level 2 in the fair value hierarchy. Cross-Currency Swaps We enter into cross-currency swaps to offset changes in the value of our payments on foreign-denominated debt in USD and to mitigate the impact of foreign currency transaction gains and losses. We have entered into cross-currency swap agreements, with the same notional amounts as our EUR-denominated debt issuances, to effectively convert € 4.8 billion to USD borrowings, with the same maturities as our EUR-denominated debt issuances. The swaps qualify and have been designated as fair value hedges of our EUR-denominated debt, mitigating our exposure to foreign currency transaction gains and losses. Accordingly, all changes in the fair value of the swaps will be initially recorded through Accumulated other comprehensive loss on our Condensed Consolidated Balance Sheets and reclassified to earnings in an amount that exactly offsets the periodic transaction gain or loss on remeasuring the debt, such that there will be no earnings volatility due to changes in foreign-currency exchange rates. Transaction gains or losses on remeasuring the EUR-denominated debt, as well as the offsetting swap amounts, are recorded within Other (expense) income, net on our Condensed Consolidated Statements of Comprehensive Income. Changes in the fair value of the swaps may be different from the current period transaction gain or loss on remeasurement of the debt, in which case the difference will remain in Accumulated other comprehensive loss on our Condensed Consolidated 18 Index for Notes to the Condensed Consolidated Financial Statements Balance Sheets. These differences generally represent credit or liquidity risk, referred to as a basis spread, and the time value of money (“excluded components”). The value of the excluded components is recognized in earnings using a systematic and rational method by accruing the current-period swap settlements into Interest expense, net, on our Condensed Consolidated Statements of Comprehensive Income. If an amount remains in Accumulated other comprehensive loss on our Condensed Consolidated Balance Sheets upon settlement of the derivative, those amounts will be reclassified to earnings at that time. The following table summarizes the activity of our cross-currency swaps: (in millions) Three Months Ended March 31, 2025 Other (expense) income, net Pre-tax transaction loss on remeasurement of EUR-denominated debt $ ( 218 ) Amount recognized in Other (expense) income, net reclassified from Accumulated other comprehensive loss 218 Accumulated other comprehensive loss Amount recognized in Accumulated other comprehensive loss reclassified to Other (expense) income, net $ ( 218 ) Loss associated with the change in fair value of cross-currency swaps recognized in Accumulated other comprehensive loss ( 20 ) Interest Rate Lock Derivatives In April 2020, we terminated our interest rate lock derivatives entered into in October 2018. Aggregate changes in the fair value of our terminated interest rate lock derivatives, net of amortization, of $ 914 million and $ 960 million are presented in Accumulated other comprehensive loss on our Condensed Consolidated Balance Sheets as of March 31, 2025, and December 31, 2024, respectively. For the three months ended March 31, 2025 and 2024, $ 62 million and $ 57 million, respectively, were amortized from Accumulated other comprehensive loss into Interest expense, net, on our Condensed Consolidated Statements of Comprehensive Income. We expect to amortize $ 259 million of the Accumulated other comprehensive loss associated with the derivatives into Interest expense, net, over the 12 months ending March 31, 2026. Debt The fair values of our Senior Notes and spectrum-backed Senior Secured Notes to third parties were determined based on quoted market prices in active markets. Accordingly, our Senior Notes and spectrum-backed Senior Secured Notes to third parties were classified as Level 1 within the fair value hierarchy. The fair value of our Senior Notes to affiliates was determined based on the fair value of the Senior Notes to third parties with similar terms and maturities. Accordingly, our Senior Notes to affiliates were classified as Level 2 within the fair value hierarchy. The fair values of our Senior Notes to third parties (EUR-denominated) and asset-backed notes (“ABS Notes”) were primarily based on quoted prices in inactive markets for identical instruments and observable changes in market interest rates, both of which are Level 2 inputs. Accordingly, our Senior Notes to third parties (EUR-denominated) and ABS Notes were classified as Level 2 within the fair value hierarchy. The fair value of our ECA Facility (as defined below) was determined based on a discounted cash flow approach using market interest rates of instruments with similar maturities and credit risk. Accordingly, our ECA Facility was classified as Level 2 within the fair value hierarchy. Although we have determined the estimated fair values using available market information and commonly accepted valuation methodologies, judgment was required in interpreting market data to develop fair value estimates for the Senior Notes to third parties (EUR-denominated), Senior Notes to affiliates, ABS Notes and ECA Facility. The fair value estimates were based on information available as of March 31, 2025, and December 31, 2024. As such, our estimates are not necessarily indicative of the amount we could realize in a current market exchange. 19 Index for Notes to the Condensed Consolidated Financial Statements The carrying amounts and fair values of our short-term and long-term debt included on our Condensed Consolidated Balance Sheets were as follows: (in millions) Level within the Fair Value Hierarchy March 31, 2025 December 31, 2024 Carrying Amount Fair Value Carrying Amount Fair Value Liabilities: Senior Notes to third parties 1 $ 75,232 $ 70,002 $ 71,783 $ 65,631 Senior Notes to third parties (EUR-denominated) 2 5,105 4,995 2,058 2,125 Senior Notes to affiliates 2 1,497 1,500 1,497 1,491 Senior Secured Notes to third parties 1 1,132 1,107 1,361 1,330 ABS Notes to third parties 2 1,851 1,866 1,566 1,570 ECA Facility to third parties 2 927 958 — — Note 8 – Debt The following table sets forth the debt balances and activity as of, and for the three months ended, March 31, 2025: (in millions) December 31, 2024 Proceeds from Issuances and Borrowings (1) Repayments Reclassifications (1) Other (2) March 31, 2025 Short-term debt $ 4,068 $ — $ ( 479 ) $ 4,628 $ ( 3 ) $ 8,214 Long-term debt 72,700 7,768 — ( 4,628 ) 193 76,033 Total debt to third parties 76,768 7,768 ( 479 ) — 190 84,247 Long-term debt to affiliates 1,497 — — — — 1,497 Total debt $ 78,265 $ 7,768 $ ( 479 ) $ — $ 190 $ 85,744 (1) Issuances and borrowings and reclassifications are recorded net of accrued or paid issuance costs and discounts. (2) Other includes the amortization of premiums, discounts, debt issuance costs and consent fees and the impact from changes in foreign currency exchange rates. Our effective interest rate, excluding the impact of derivatives and capitalized interest, was approximately 4.0 % and 4.1 % on weighted-average debt outstanding of $ 80.8 billion and $ 77.4 billion for the three months ended March 31, 2025 and 2024, respectively. The weighted-average debt outstanding was calculated by applying an average of the monthly ending balances of total short-term and long-term debt to third parties and short-term and long-term debt to affiliates, net of unamortized premiums, discounts, debt issuance costs and consent fees. Issuances and Borrowings During the three months ended March 31, 2025, we issued and borrowed the following debt: (in millions) Principal Issuances Discounts and Issuance Costs, Net (1) Net Proceeds from Issuance of Long-Term Debt Issue Date 3.150 % Senior Notes due 2032 (EUR-denominated) $ 1,036 $ ( 5 ) $ 1,031 February 11, 2025 3.500 % Senior Notes due 2037 (EUR-denominated) 1,036 ( 8 ) 1,028 February 11, 2025 3.800 % Senior Notes due 2045 (EUR-denominated) 777 ( 7 ) 770 February 11, 2025 5.125 % Senior Notes due 2032 1,250 ( 7 ) 1,243 March 27, 2025 5.300 % Senior Notes due 2035 1,000 ( 7 ) 993 March 27, 2025 5.875 % Senior Notes due 2055 1,250 ( 15 ) 1,235 March 27, 2025 Total of Senior Notes issued 6,349 ( 49 ) 6,300 4.740 % Class A Senior ABS Notes due 2029 500 ( 2 ) 498 February 27, 2025 Total of ABS Notes issued 500 ( 2 ) 498 4.927 % ECA Facility due 2036 1,000 ( 30 ) 970 March 17, 2025 Total of credit facility borrowed 1,000 ( 30 ) 970 Total Issuances and Borrowings $ 7,849 $ ( 81 ) $ 7,768 (1) Includes accrued or paid issuance costs and discounts. 20 Index for Notes to the Condensed Consolidated Financial Statements Repayments During the three months ended March 31, 2025, we made the following repayments: (in millions) Principal Amount Payment Date 4.738 % Secured Series 2018-1 A-1 Notes due 2025 $ 131 January 13, 2025 5.152 % Series 2018-1 A-2 Notes due 2028 92 Various 4.910 % Class A Senior ABS Notes due 2025 213 Various ECA Facility due 2036 43 March 17, 2025 Total Repayments $ 479 Subsequent to March 31, 2025, on April 15, 2025, we repaid at maturity $ 3.0 billion of our 3.500 % Senior Notes due 2025. Asset-backed Notes On February 27, 2025, we issued $ 500 million of 4.740 % Class A Senior ABS Notes to third parties in a private placement transaction. Net proceeds of $ 498 million from these ABS Notes are presented in Proceeds from issuance of long-term debt on our Condensed Consolidated Statements of Cash Flows for the three months ended March 31, 2025. As of March 31, 2025, $ 1.9 billion of our ABS Notes were secured in total by $ 2.5 billion of gross EIP receivables and future collections on such receivables. Our ABS Notes and the assets securing this debt are included on our Condensed Consolidated Balance Sheets. The expected maturities of our ABS Notes as of March 31, 2025, were as follows: (in millions) Expected Maturities 2025 $ 357 2026 594 2027 822 2028 84 Total $ 1,857 Variable Interest Entities In connection with our ABS Notes issuances, we formed a wholly owned subsidiary, which qualifies as a bankruptcy remote entity (the “ABS BRE”), and a trust (the “ABS Trust” and together with the ABS BRE, the “ABS Entities”), in which the ABS BRE holds a residual interest. Each of the ABS Entities meet the definition of a VIE for which we have determined that we are the primary beneficiary, as we have the power to direct the activities of the ABS Entities that most significantly impact their performance. Accordingly, we include the balances and results of operations of the ABS Entities in our condensed consolidated financial statements. The following table summarizes the carrying amounts and classification of assets and liabilities included in our Condensed Consolidated Balance Sheets with respect to the ABS Entities: (in millions) March 31, 2025 December 31, 2024 Assets Equipment installment plan receivables, net $ 1,714 $ 1,472 Equipment installment plan receivables due after one year, net 526 352 Other current assets 247 151 Liabilities Accounts payable and accrued liabilities $ 4 $ 2 Short-term debt 427 570 Long-term debt 1,425 996 See Note 4 – Receivables and Related Allowance for Credit Losses for additional information on the EIP receivables used to secure the ABS Notes. 21 Index for Notes to the Condensed Consolidated Financial Statements Restricted Cash Certain provisions of our debt agreements require us to maintain specified cash collateral balances. Amounts associated with these balances are considered to be restricted cash. See Note 1 5 – Additional Financial Information for our reconciliation of Cash and cash equivalents, including restricted cash. ECA Facility On January 31, 2025, our wholly owned subsidiary, T-Mobile USA, Inc., entered into a credit agreement with certain financial institutions, backed by an Export Credit Agency (the “ECA Facility”), providing for a loan of up to $ 1.0 billion to finance network equipment-related purchases. The obligations under the ECA Facility are also guaranteed by us and by all of our wholly owned domestic restricted subsidiaries (subject to customary exceptions). On March 17, 2025, we drew down the full $ 1.0 billion available under the ECA Facility and recognized the net proceeds within Proceeds from issuance of long-term debt on our Condensed Consolidated Statements of Cash Flows. Borrowings under the ECA facility are amortized semi-annually in equal installments up to the maturity date of March 15, 2036. Interest is based on the Secured Overnight Financing Rate for the interest period plus an applicable margin. Note 9 – Tower Obligations Existing CCI Tower Lease Arrangements In 2012, we conveyed to Crown Castle International Corp. (“CCI”) the exclusive right to manage and operate approximately 6,200 tower sites (“CCI Lease Sites”) via a master prepaid lease with site lease terms ranging from 23 to 37 years. CCI has fixed-price purchase options for the CCI Lease Sites totaling approximately $ 2.0 billion, exercisable annually on a per-tranche basis at the end of the lease term during the period from December 31, 2035, through December 31, 2049. If CCI exercises its purchase option for any tranche, it must purchase all the towers in the tranche. We lease back a portion of the space at certain tower sites. Assets and liabilities associated with the operation of the tower sites were transferred to special purpose entities (“SPEs”). Assets included ground lease agreements or deeds for the land on which the towers are situated, the towers themselves and existing subleasing agreements with other mobile network operator tenants that lease space at the tower sites. Liabilities included the obligation to pay ground lease rentals, property taxes and other executory costs. We determined the SPEs containing the CCI Lease Sites (“Lease Site SPEs”) are VIEs as they lack sufficient equity to finance their activities. We have a variable interest in the Lease Site SPEs but are not the primary beneficiary as we lack the power to direct the activities that most significantly impact the Lease Site SPEs’ economic performance. These activities include managing tenants and underlying ground leases, performing repair and maintenance on the towers, the obligation to absorb expected losses and the right to receive the expected future residual returns from the purchase option to acquire the CCI Lease Sites. As we determined that we are not the primary beneficiary and do not have a controlling financial interest in the Lease Site SPEs, the Lease Site SPEs are not included on our condensed consolidated financial statements. However, we also considered if this arrangement resulted in the sale of the CCI Lease Sites for which we would derecognize the tower assets. By assessing whether control had transferred, we concluded that transfer of control criteria, as discussed in the revenue standard, were not met. Accordingly, we recorded this arrangement as a financing whereby we recorded debt, a financial obligation, and the CCI Lease Sites tower assets remained on our Condensed Consolidated Balance Sheets. We recorded long-term financial obligations in the amount of the net proceeds received and recognize interest on the tower obligations. The tower obligations are increased by interest expense and amortized through contractual leaseback payments made by us to CCI and through net cash flows generated and retained by CCI from the operation of the tower sites. Acquired CCI Tower Lease Arrangements Prior to our merger (the “Sprint Merger”) with Sprint Corporation (“Sprint”), Sprint entered into a lease-out and leaseback arrangement with Global Signal Inc., a third party that was subsequently acquired by CCI, that conveyed to CCI the exclusive right to manage and operate approximately 6,400 tower sites (“Master Lease Sites”) via a master prepaid lease. These agreements were assumed upon the close of the Sprint Merger, at which point the remaining term of the lease-out was approximately 17 years with no renewal options. CCI has a fixed price purchase option for all (but not less than all) of the leased or subleased sites for approximately $ 2.3 billion, exercisable one year prior to the expiration of the agreement and ending 120 days prior to the expiration of the agreement. We lease back a portion of the space at certain tower sites. 22 Index for Notes to the Condensed Consolidated Financial Statements We considered if this arrangement resulted in the sale of the Master Lease Sites for which we would derecognize the tower assets. By assessing whether control had transferred, we concluded that transfer of control criteria, as discussed in the revenue standard, were not met. Accordingly, we recorded this arrangement as a financing whereby we recorded debt, a financial obligation, and the Master Lease Sites tower assets remained on our Condensed Consolidated Balance Sheets. We recognize interest expense on the tower obligations. The tower obligations are increased by the interest expense and amortized through contractual leaseback payments made by us to CCI. The tower assets are reported in Property and equipment, net on our Condensed Consolidated Balance Sheets and are depreciated to their estimated residual values over the expected useful life of the towers, which is 20 years. Leaseback Arrangement On January 3, 2022, we entered into an agreement (the “Crown Agreement”) with CCI. The Crown Agreement extends the current term of the leasebacks by up to 12 years and modifies the leaseback payments for both the Existing CCI Tower Lease Arrangements and the Acquired CCI Tower Lease Arrangements. As a result of the Crown Agreement, there was an increase in our financing obligation as of the effective date of the Crown Agreement of approximately $ 1.2 billion, with a corresponding decrease to Other long-term liabilities associated with unfavorable contract terms. The modification resulted in a revised interest rate under the effective interest method for the tower obligations: 11.6 % for the Existing CCI Tower Lease Arrangements and 5.3 % for the Acquired CCI Tower Lease Arrangements. There were no changes made to either of our master prepaid leases with CCI. The following table summarizes the balances associated with both of the tower arrangements on our Condensed Consolidated Balance Sheets: (in millions) March 31, 2025 December 31, 2024 Property and equipment, net $ 2,032 $ 2,069 Tower obligations 3,634 3,664 Other long-term liabilities 554 554 Future minimum payments related to the tower obligations are approximately $ 382 million for the 12-month period ending March 31, 2026, $ 793 million in total for both of the 12-month periods ending March 31, 2027 and 2028, $ 841 million in total for both of the 12-month periods ending March 31, 2029 and 2030, and $ 3.6 billion in total thereafter. We are contingently liable for future ground lease payments through the remaining term of the CCI Lease Sites and the Master Lease Sites. These contingent obligations are not included in Operating lease liabilities, as any amount due is contractually owed by CCI based on the subleasing arrangement. Under the arrangement, we remain primarily liable for ground lease payments on approximately 900 sites and have included lease liabilities of $ 249 million in our Operating lease liabilities as of March 31, 2025. Note 10 – Revenue from Contracts with Customers Disaggregation of Revenue We provide wireless communications services to three primary categories of customers: • Postpaid customers generally include customers who are qualified to pay after receiving wireless communications services utilizing phones, High Speed Internet, mobile internet devices (including tablets and hotspots), wearables, DIGITS and other connected devices (including SyncUP and IoT); • Prepaid customers generally include customers who pay for wireless communications services in advance; and • Wholesale customers include Machine-to-Machine and Mobile Virtual Network Operator customers that operate on our network but are managed by wholesale partners. 23 Index for Notes to the Condensed Consolidated Financial Statements Postpaid service revenues, including postpaid phone revenues and postpaid other revenues, were as follows: Three Months Ended March 31, (in millions) 2025 2024 Postpaid service revenues Postpaid phone revenues $ 11,733 $ 11,145 Postpaid other revenues 1,861 1,486 Total postpaid service revenues $ 13,594 $ 12,631 The balances presented in each revenue line item on our Condensed Consolidated Statements of Comprehensive Income represent categories of revenue from contracts with customers disaggregated by type of product and service. Postpaid and prepaid service revenues also include revenues earned for providing premium services to customers, such as device insurance services. Revenue generated from the lease of mobile communication devices is included in Equipment revenues on our Condensed Consolidated Statements of Comprehensive Income. Contract Balances The contract asset and contract liability balances from contracts with customers as of March 31, 2025, and December 31, 2024, were as follows: (in millions) Contract Assets Contract Liabilities Balance as of December 31, 2024 $ 720 $ 1,219 Balance as of March 31, 2025 800 1,192 Change $ 80 $ ( 27 ) Contract assets primarily represent revenue recognized for equipment sales with promotional bill credits offered to customers that are paid over time and are contingent on the customer maintaining a service contract. The change in the contract asset balance reflects customer activity related to new promotions, offset by billings on existing contracts and impairment, which is recognized as bad debt expense. The current portion of our contract assets of $ 562 million and $ 492 million as of March 31, 2025, and December 31, 2024, respectively, was included in Other current assets on our Condensed Consolidated Balance Sheets. Contract liabilities are recorded when fees are collected, or we have an unconditional right to consideration (a receivable) in advance of delivery of goods or services. Changes in contract liabilities are primarily related to the activity of prepaid customers, including customers acquired through the Ka’ena Acquisition. Contract liabilities are primarily included in Deferred revenue on our Condensed Consolidated Balance Sheets. Revenues for the three months ended March 31, 2025 and 2024, include the following: Three Months Ended March 31, (in millions) 2025 2024 Amounts included in the beginning of year contract liability balance $ 903 $ 698 Remaining Performance Obligations As of March 31, 2025, the aggregate amount of the transaction price allocated to remaining service performance obligations for postpaid contracts with subsidized devices and promotional bill credits that result in an extended service contract is $ 1.9 billion. We expect to recognize revenue as the service is provided on these postpaid contracts over an extended contract term of 24 months from the time of origination. Information about remaining performance obligations that are part of a contract that has an original expected duration of one year or less has been excluded from the above, which primarily consists of monthly service contracts. Certain of our wholesale, roaming and service contracts include variable consideration based on usage and performance. This variable consideration has been excluded from the disclosure of remaining performance obligations. As of March 31, 2025, the aggregate amount of the contractual minimum consideration for wholesale, roaming and service contracts is $ 783 million, $ 1.1 billion and $ 2.1 billion for the remainder of 2025, 2026 and 2027 and beyond, respectively. These contracts have a remaining duration ranging from less than one year to seven years . 24 Index for Notes to the Condensed Consolidated Financial Statements Contract Costs The balance of deferred incremental costs to obtain contracts with customers was $ 2.0 billion as of both March 31, 2025, and December 31, 2024, and is included in Other assets on our Condensed Consolidated Balance Sheets. Deferred contract costs incurred to obtain postpaid service contracts are amortized over a period of 24 months. The amortization period is monitored to reflect any significant change in assumptions. Amortization of deferred contract costs included in Selling, general and administrative expenses on our Condensed Consolidated Statements of Comprehensive Income were $ 485 million and $ 489 million for the three months ended March 31, 2025 and 2024, respectively. The deferred contract cost asset is assessed for impairment on a periodic basis. There were no impairment losses recognized on deferred contract cost assets for the three months ended March 31, 2025 and 2024. Note 11 – Segment Reporting We manage our business activities on a consolidated basis and operate as a single operating segment: Wireless. We primarily derive our revenue in the United States by providing wireless communications services to customers using our wireless networks and selling devices that provide customers access to our wireless networks. The accounting policies of the Wireless segment are the same as those described in Part II, Item 8, Note 1 – Summary of Significant Accounting Policies of our Annual Report on Form 10-K for the year ended December 31, 2024. Our chief operating decision maker (“CODM”) is our President and Chief Executive Officer, G. Michael Sievert. The CODM uses Net income, as reported on our Condensed Consolidated Statements of Comprehensive Income, in evaluating performance of the Wireless segment and determining how to allocate resources of the Company as a whole, including investing in our networks and customers, stockholder return programs and acquisition strategy. The CODM does not review assets in evaluating the results of the Wireless segment, and therefore, such information is not presented. The following table provides the operating financial results of our Wireless segment: Three Months Ended March 31, (in millions) 2025 2024 Total revenues $ 20,886 $ 19,594 Less: Significant and other segment expenses Cost of equipment sales 4,798 4,399 Employee expenses 1,909 1,683 Lease expense 1,207 1,268 Advertising expense 812 648 Bad debt expense 323 282 Other segment items (1) 3,839 3,945 Depreciation and amortization 3,198 3,371 Interest expense, net 916 880 Other expense (income), net 46 ( 20 ) Income tax expense 885 764 Segment net income $ 2,953 $ 2,374 (1) Other segment items included in Segment net income primarily includes certain third-party commissions, external labor and services and backhaul expenses. Note 12 – Stockholder Return Program 2025 Stockholder Return Program 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”). The 2025 Stockholder Return Program consists of repurchases of shares of our common stock and the payment of cash dividends. 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. 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 was paid on March 13, 2025, to stockholders of record as of the close of business on February 28, 2025. 25 Index for Notes to the Condensed Consolidated Financial Statements On February 6, 2025, 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 June 12, 2025, to stockholders of record as of the close of business on May 30, 2025. During the three months ended March 31, 2025, we paid an aggregate of $ 1.0 billion in cash dividends to our stockholders, which was presented within Net cash provided by (used in) financing activities on our Condensed Consolidated Statements of Cash Flows, of which $ 518 million was paid to Deutsche Telekom AG (“DT”). As of March 31, 2025, $ 993 million for dividends payable is presented within Other current liabilities on our Condensed Consolidated Balance Sheets, of which $ 518 million is payable to DT. During the three months ended March 31, 2025, we repurchased 10,091,227 shares of our common stock at an average price per share of $ 244.77 for a total purchase price of $ 2.5 billion, under the 2025 Stockholder Return Program. All shares repurchased during the three months ended March 31, 2025, were purchased at market price. As of March 31, 2025, we had up to $ 10.5 billion remaining under the 2025 Stockholder Return Program for repurchases of shares and quarterly dividends through December 31, 2025. Subsequent to March 31, 2025, from April 1, 2025, through April 17, 2025, we repurchased 1,975,200 shares of our common stock at an average price per share of $ 259.09 for a total purchase price of $ 512 million. As of April 17, 2025, we had up to $ 10.0 billion remaining under the 2025 Stockholder Return Program for repurchases of shares and quarterly dividends through December 31, 2025. Note 13 – Earnings Per Share The computation of basic and diluted earnings per share was as follows: Three Months Ended March 31, (in millions, except shares and per share amounts) 2025 2024 Net income $ 2,953 $ 2,374 Weighted-average shares outstanding – basic 1,140,537,935 1,185,298,497 Effect of dilutive securities: Outstanding stock options, unvested stock awards 4,117,362 3,793,522 Weighted-average shares outstanding – diluted 1,144,655,297 1,189,092,019 Earnings per share – basic $ 2.59 $ 2.00 Earnings per share – diluted $ 2.58 $ 2.00 Potentially dilutive securities: Outstanding stock options and unvested stock awards 961,773 6 Ka’ena Acquisition contingent consideration (1) 979,153 — (1) The weighted-average number of shares contingently issuable related to the Ka’ena Acquisition earnout consideration (“Ka’ena Contingent Shares”) are included in potentially dilutive securities based on the maximum number of shares contingently issuable for the earnout and the 20 trading day volume-weighted average price as of March 31, 2025. No Ka’ena Contingent Shares were outstanding during the three months ended March 31, 2025, as the threshold specified performance indicators had not been achieved. As of March 31, 2025, we had authorized 100 million shares of preferred stock, with a par value of $ 0.00001 per share. There was no preferred stock outstanding as of March 31, 2025 and 2024. Potentially dilutive securities were not included in the computation of diluted earnings per share if to do so would have been anti-dilutive. 26 Index for Notes to the Condensed Consolidated Financial Statements Note 14 – Commitments and Contingencies Purchase Commitments We have commitments for non-dedicated transportation lines with varying expiration terms that generally extend through 2038. In addition, we have commitments to purchase wireless devices, network services, equipment, software, marketing sponsorship agreements and other items in the ordinary course of business, with various terms through 2043. The following table summarizes the timing of such purchase commitments as of March 31, 2025: (in millions) Less Than 1 Year 1 - 3 Years 3 - 5 Years More Than 5 Years Total Purchase commitments (1) $ 4,575 $ 5,383 $ 2,071 $ 2,207 $ 14,236 (1) These amounts are not reflective of our entire anticipated purchases under the related agreements but are determined based on the non-cancelable quantities or termination amounts to which we are contractually obligated. From April 1, 2025, through April 18, 2025, we entered into additional contracts for non-dedicated transportation lines with varying expiration terms that generally extend through 2038 and are expected to increase our total purchase commitments by approximately $ 1.5 billion. On April 24, 2024, we entered into a definitive agreement with a fund operated by EQT, Fund VI, to establish a joint venture between us and Fund VI to acquire Lumos, a fiber-to-the-home platform, from EQT’s predecessor fund, EQT Infrastructure III. Subsequent to March 31, 2025, on April 1, 2025, we completed the joint acquisition of Lumos, upon the completion of certain customary closing conditions, including the receipt of certain regulatory approvals. At closing, we invested $ 926 million to acquire a 50 % equity interest in the joint venture and fiber customers. The funds invested by us will be used by the joint venture 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. The purchase price and expected additional capital contribution are excluded from our reported purchase commitments above. See Note 3 – Joint Ventures for additional details. On May 24, 2024, we entered into a securities purchase agreement with 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. Following the closing of the transaction, we will enter into a 15-year master license agreement and estimate the incremental future minimum lease payments will be $ 1.4 billion over 15 years post-closing. The securities purchase agreement remains subject to regulatory approval. The estimated purchase price and incremental minimum lease payments are excluded from our reported purchase commitments above. See Note 2 – Business Combinations for additional details. On July 18, 2024, we entered into a definitive agreement with KKR to establish a joint venture to acquire Metronet, a fiber-to-the-home platform. At closing, we expect to invest approximately $ 4.9 billion to acquire a 50 % equity interest in the joint venture and all existing residential fiber customers, as well as funding of the joint venture. The agreement remains subject to regulatory approval, and the estimated purchase price is excluded from our reported purchase commitments above. See Note 3 – Joint Ventures for additional details. Sprint Merger Commitments In connection with the regulatory proceedings and approvals of the Sprint Merger pursuant to the Business Combination Agreement with Sprint and the other parties named therein (as amended, the “Business Combination Agreement”) and the other transactions contemplated by the Business Combination Agreement, we have commitments and other obligations to various state and federal agencies and certain nongovernmental organizations, including pursuant to the Consent Decree agreed to by us, DT, Sprint, SoftBank Group Corp. (“SoftBank”) and DISH Network Corporation and entered by the U.S. District Court for the District of Columbia, and the FCC’s memorandum opinion and order approving our applications for approval of the Sprint Merger. These commitments and obligations include, among other things, extensive 5G network build-out commitments, obligations to deliver high-speed wireless services to the vast majority of Americans, including Americans residing in rural areas, and the marketing of an in-home broadband product where spectrum capacity is available. Other commitments relate to national security, pricing, service, employment and support of diversity initiatives. Many of the commitments specify time 27 Index for Notes to the Condensed Consolidated Financial Statements frames for compliance and reporting. Failure to fulfill our obligations and commitments in a timely manner could result in substantial fines, penalties, or other legal and administrative actions. Contingencies and Litigation Litigation and Regulatory Matters We are involved in various lawsuits and disputes, claims, government agency investigations and enforcement actions, and other proceedings (“Litigation and Regulatory Matters”) that arise in the ordinary course of business, which include claims of patent infringement (most of which are asserted by non-practicing entities primarily seeking monetary damages), class actions, and proceedings to enforce FCC or other government agency rules and regulations. Those Litigation and Regulatory Matters are at various stages, and some of them may proceed to trial, arbitration, hearing, or other adjudication that could result in fines, penalties, or awards of monetary or injunctive relief in the coming 12 months if they are not otherwise resolved. We have established an accrual with respect to certain of these matters, where appropriate. The accruals are reflected on our condensed consolidated financial statements, but they are not considered to be, individually or in the aggregate, material. An accrual is established when we believe it is both probable that a loss has been incurred and an amount can be reasonably estimated. For other matters, where we have not determined that a loss is probable or because the amount of loss cannot be reasonably estimated, we have not recorded an accrual due to various factors typical in contested proceedings, including, but not limited to, uncertainty concerning legal theories and their resolution by courts or regulators, uncertain damage theories and demands, and a less than fully developed factual record. For Litigation and Regulatory Matters that may result in a contingent gain, we recognize such gains on our condensed consolidated financial statements when the gain is realized or realizable. We recognize legal costs expected to be incurred in connection with Litigation and Regulatory Matters as they are incurred. Except as otherwise specified below, we do not expect that the ultimate resolution of these Litigation and Regulatory Matters, individually or in the aggregate, will have a material adverse effect on our financial position, but we note that an unfavorable outcome of some or all of the specific matters identified below, or other matters that we are or may become involved in could have a material adverse impact on results of operations or cash flows for a particular period. This assessment is based on our current understanding of relevant facts and circumstances. As such, our view of these matters is subject to inherent uncertainties and may change in the future. On February 28, 2020, T-Mobile and Sprint each received a Notice of Apparent Liability for Forfeiture and Admonishment from the FCC, which proposed a penalty for allegedly violating section 222 of the Communications Act and the FCC’s regulations governing the privacy of customer information. On April 29, 2024, the FCC issued Forfeiture Orders against T-Mobile and Sprint that largely adopted the allegations and conclusions of the Notices of Apparent Liability and imposed penalties on T-Mobile and Sprint. T-Mobile and Sprint paid those penalties under protest, and on June 27, 2024, T-Mobile and Sprint filed Petitions for Review challenging the FCC’s Forfeiture Orders in the United States Court of Appeals for the District of Columbia. We are unable to predict the potential outcome of those proceedings. On April 1, 2020, in connection with the closing of the Sprint Merger, we assumed the contingencies and litigation matters of Sprint. Those matters include a wide variety of disputes, claims, government agency investigations and enforcement actions, and other proceedings. These matters include, among other things, certain ongoing FCC and state government agency investigations into Sprint’s Lifeline program. In September 2019, Sprint notified the FCC that it had claimed monthly subsidies for serving subscribers, even though these subscribers may not have met usage requirements under Sprint's usage policy for the Lifeline program, due to an inadvertent coding issue in the system used to identify qualifying subscriber usage that occurred in July 2017 while the system was being updated. Sprint has made a number of payments to reimburse the federal government and certain states for excess subsidy payments. We note that, pursuant to Amendment No. 2, dated as of February 20, 2020, to the Business Combination Agreement, dated as of April 29, 2018, by and among the Company, Sprint and the other parties named therein, SoftBank agreed to indemnify us against certain specified matters and losses, including those relating to the Lifeline matters described above. Resolution of these matters could require us to make additional reimbursements and pay additional fines and penalties, which we do not expect to have a significant impact on our financial results. We expect that any additional liabilities related to these indemnified matters would be indemnified and reimbursed by SoftBank. On June 1, 2021, a putative shareholder class action and derivative lawsuit was filed in the Delaware Court of Chancery, Dinkevich v. Deutsche Telekom AG, et al. , Case No. C.A. No. 2021-0479, against DT, SoftBank and certain of our current and former officers and directors, asserting breach of fiduciary duty claims relating to the repricing amendment to the Business Combination Agreement and to SoftBank’s monetization of its T-Mobile shares. We are also named as a nominal defendant in the case. We are unable to predict the potential outcome of these claims. 28 Index for Notes to the Condensed Consolidated Financial Statements On August 12, 2021, we became aware of a cybersecurity issue involving unauthorized access to T-Mobile’s systems (the “August 2021 cyberattack”). We immediately began an investigation and engaged cybersecurity experts to assist with the assessment of the incident and to help determine what data was impacted. Our investigation uncovered that the perpetrator had illegally gained access to certain areas of our systems on or about March 18, 2021, but only gained access to and took data of current, former, and prospective customers beginning on or about August 3, 2021. With the assistance of our outside cybersecurity experts, we located and closed the unauthorized access to our systems and identified current, former and prospective customers whose information was impacted and notified them, consistent with state and federal requirements. We also undertook a number of other measures to demonstrate our continued support and commitment to data privacy and protection. We also coordinated with law enforcement. Our forensic investigation is complete, and we believe we have a full view of the data compromised. As a result of the August 2021 cyberattack, we have become subject to numerous lawsuits, including mass arbitration claims and multiple class action lawsuits that have been filed in numerous jurisdictions seeking, among other things, unspecified monetary damages, costs and attorneys’ fees arising out of the August 2021 cyberattack. In December 2021, the Judicial Panel on Multidistrict Litigation consolidated the federal class action lawsuits in the U.S. District Court for the Western District of Missouri under the caption In re: T-Mobile Customer Data Security Breach Litigation , Case No. 21-md-3019-BCW. On July 22, 2022, we entered into an agreement to settle the lawsuit. On June 29, 2023, the Court issued an order granting final approval of the settlement. All appeals have been resolved, and the settlement is now final. Under the terms of the settlement, we have paid an aggregate of $ 350 million to fund claims submitted by class members, the legal fees of plaintiffs’ counsel and the costs of administering the settlement. As required under the terms of the settlement, we have spent an aggregate of $ 150 million for data security and related technology in 2022 and 2023. The settlement provides a full release of all claims arising out of the August 2021 cyberattack by class members who did not opt out, against all defendants, including us, our subsidiaries and affiliates, and our directors and officers. The settlement contains no admission of liability, wrongdoing or responsibility by any of the defendants. We anticipate that this settlement of the class action, along with other settlements of separate consumer claims that have been previously completed or are currently pending, will resolve substantially all of the claims brought to date by our current, former and prospective customers who were impacted by the 2021 cyberattack. In connection with the class action settlement and the separate settlements, we recorded a total pre-tax charge of approximately $ 400 million in the second quarter of 2022. In addition, in September 2022, a purported Company shareholder filed a derivative action in the Delaware Court of Chancery under the caption Harper v. Sievert et al., Case No. 2022-0819-SG, against our current directors and certain of our former directors, alleging claims for breach of fiduciary duty relating to the Company’s cybersecurity practices. We are also named as a nominal defendant in the lawsuit. On May 31, 2024, the court issued an opinion dismissing the plaintiff’s complaint in its entirety. The plaintiff appealed that decision, and on February 17, 2025, the Delaware Supreme Court affirmed the Court of Chancery’s decision dismissing the complaint. We are unable at this time to predict whether we may be subject to further private litigation relating to the August 2021 cyberattack or the Company’s cybersecurity practices. We have also received inquiries and contested legal proceedings from various government agencies, law enforcement and other governmental authorities related to the August 2021 cyberattack, which could result in substantial fines or penalties. We reached an agreement with the FCC, which was announced on September 30, 2024, to resolve one of those inquiries. We will continue to cooperate fully with the other agencies and regulators inquiring about the matter with an aim to resolve all of these matters. While we hope to resolve them in the near term, we cannot predict the timing or outcome of any of these matters or whether we may be subject to further regulatory inquiries, investigations, or enforcement actions. In light of the inherent uncertainties involved in such matters, and based on the information currently available to us, in addition to the previously recorded pre-tax charge of approximately $ 400 million noted above, we believe it is reasonably possible that we could incur additional losses associated with these proceedings and inquiries, and we will continue to evaluate information as it becomes known and will record an estimate for losses at the time or times when it is both probable that a loss has been incurred and the amount of the loss is reasonably estimable. Ongoing legal and other costs related to these proceedings and inquiries, as well as any potential future actions, may be substantial, and losses associated with any adverse judgments, settlements, penalties or other resolutions of such proceedings and inquiries could be material to our business, reputation, financial condition, cash flows and operating results. On June 17, 2022, plaintiffs filed a putative antitrust class action complaint in the Northern District of Illinois, Dale et al. v. Deutsche Telekom AG, et al. , Case No. 1:22-cv-03189, against DT, T-Mobile, and SoftBank, alleging that the Sprint Merger violated the antitrust laws and harmed competition in the U.S. retail cell service market. Plaintiffs seek injunctive relief and trebled monetary damages on behalf of a purported class of AT&T and Verizon customers whom plaintiffs allege paid artificially inflated prices due to the Sprint Merger. We are vigorously defending this lawsuit, but we are unable to predict the potential outcome. 29 Index for Notes to the Condensed Consolidated Financial Statements On January 5, 2023, we identified that a bad actor was obtaining data through a single Application Programming Interface (“API”) without authorization. Based on our investigation, the impacted API is only able to provide a limited set of customer account data, including name, billing address, email, phone number, date of birth, T-Mobile account number and information, such as the number of lines on the account and plan features. The result from our investigation indicates that the bad actor(s) obtained data from this API for approximately 37 million current postpaid and prepaid customer accounts, though many of these accounts did not include the full data set. We believe that the bad actor first retrieved data through the impacted API starting on or around November 25, 2022. We have notified individuals whose information was impacted consistent with state and federal requirements. In connection with the January 2023 cyberattack, we became subject to consumer class actions and regulatory inquiries, to which we will continue to respond in due course and may incur significant expenses. However, we cannot predict the timing or outcome of any of these potential matters or whether we may be subject to additional legal proceedings, claims, regulatory inquiries, investigations, or enforcement actions. In addition, we are unable to predict the full impact of this incident on customer behavior in the future, including whether a change in our customers’ behavior could negatively impact our results of operations on an ongoing basis, although we presently do not expect that it will have a material effect on our operations. On February 25, 2025, a purported Company shareholder filed a putative class action and derivative lawsuit in the Delaware Court of Chancery under the caption Palkon v. Deutsche Telekom AG et al. , Case No. 2025-0211-PAF, against four DT entities, our current directors, and certain of our former directors, asserting breach of fiduciary duty and unjust enrichment claims relating to our 2022 Stock Repurchase Program and our 2023-2024 Stockholder Return Program. We are also named as a nominal defendant in the lawsuit. We are unable to predict the potential outcome of these claims. Note 15 – Additional Financial Information Accounts Payable and Accrued Liabilities Accounts payable and accrued liabilities are summarized as follows: (in millions) March 31, 2025 December 31, 2024 Accounts payable $ 4,015 $ 4,242 Property and other taxes, including payroll 1,643 1,524 Payroll and related benefits 680 1,072 Accrued interest 947 905 Other accrued liabilities 615 720 Accounts payable and accrued liabilities $ 7,900 $ 8,463 Book overdrafts included in accounts payable were $ 228 million and $ 460 million as of March 31, 2025, and December 31, 2024, respectively. Supplemental Condensed Consolidated Statements of Cash Flows Information The following table summarizes T-Mobile’s supplemental cash flow information: Three Months Ended March 31, (in millions) 2025 2024 Interest payments, net of amounts capitalized $ 934 $ 896 Operating lease payments 1,214 1,344 Income tax payments 15 7 Non-cash investing and financing activities Non-cash beneficial interest obtained in exchange for securitized receivables $ — $ 661 Change in accounts payable and accrued liabilities for purchases of property and equipment ( 463 ) ( 894 ) Operating lease right-of-use assets obtained in exchange for lease obligations 481 487 Financing lease right-of-use assets obtained in exchange for lease obligations 248 263 30 Index for Notes to the Condensed Consolidated Financial Statements Cash and Cash Equivalents, Including Restricted Cash Cash and cash equivalents, including restricted cash, presented on our Condensed Consolidated Statements of Cash Flows were included on our Condensed Consolidated Balance Sheets as follows: (in millions) March 31, 2025 December 31, 2024 Cash and cash equivalents $ 12,003 $ 5,409 Restricted cash (included in Other current assets) 263 231 Restricted cash (included in Other assets) 78 73 Cash and cash equivalents, including restricted cash $ 12,344 $ 5,713 Note 16 – Subsequent Events Subsequent to March 31, 2025, on April 1, 2025, we completed the joint acquisition of Lumos. See Note 3 - Joint Ventures for additional information. Subsequent to March 31, 2025, on April 15, 2025, we repaid at maturity $ 3.0 billion of our 3.500 % Senior Notes due 2025. Subsequent to March 31, 2025, from April 1, 2025, through April 17, 2025, we repurchased 1,975,200 shares of our common stock at an average price per share of $ 259.09 for a total purchase price of $ 512 million. See Note 1 2 - Stockholder Return Program for additional information. 31 Table of Contents