Item 1. Financial Statements

T-Mobile US, Inc.

Condensed Consolidated Balance Sheets

(Unaudited)

(in millions, except share and per share amounts)			March 31, 2023						December 31, 2022
Assets
Current assets
Cash and cash equivalents			$	4,540					$	4,507
Accounts receivable, net of allowance for credit losses of $152 and $167			4,366						4,445
Equipment installment plan receivables, net of allowance for credit losses and imputed discount of $647 and $667			5,012						5,123
Inventory			1,741						1,884
Prepaid expenses			674						673
Other current assets			2,543						2,435
Total current assets			18,876						19,067
Property and equipment, net			42,053						42,086
Operating lease right-of-use assets			28,146						28,715
Financing lease right-of-use assets			3,282						3,257
Goodwill			12,234						12,234
Spectrum licenses			95,878						95,798
Other intangible assets, net			3,245						3,508
Equipment installment plan receivables due after one year, net of allowance for credit losses and imputed discount of $139 and $144			2,250						2,546
Other assets			4,209						4,127
Total assets			$	210,173					$	211,338
Liabilities and Stockholders' Equity
Current liabilities
Accounts payable and accrued liabilities			$	11,091					$	12,275
Short-term debt			5,215						5,164
Deferred revenue			804						780
Short-term operating lease liabilities			3,441						3,512
Short-term financing lease liabilities			1,180						1,161
Other current liabilities			2,115						1,850
Total current liabilities			23,846						24,742
Long-term debt			68,035						65,301
Long-term debt to affiliates			1,495						1,495
Tower obligations			3,897						3,934
Deferred tax liabilities			11,510						10,884
Operating lease liabilities			29,379						29,855
Financing lease liabilities			1,284						1,370
Other long-term liabilities			3,802						4,101
Total long-term liabilities			119,402						116,940
Commitments and contingencies (Note 13)
Stockholders' equity
Common stock, par value $0.00001 per share, 2,000,000,000 shares authorized; 1,260,606,989 and 1,256,876,527 shares issued, 1,204,696,325 and 1,233,960,078 shares outstanding			—						—
Additional paid-in capital			74,043						73,941
Treasury stock, at cost, 55,910,664 and 22,916,449 shares			(7,831)						(3,016)
Accumulated other comprehensive loss			(1,004)						(1,046)
Retained earnings (accumulated deficit)			1,717						(223)
Total stockholders' equity			66,925						69,656
Total liabilities and stockholders' equity			$	210,173					$	211,338

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

Index for Notes to the Condensed Consolidated Financial Statements

T-Mobile US, Inc.

Condensed Consolidated Statements of Comprehensive Income

(Unaudited)

									Three Months Ended March 31,
(in millions, except share and per share amounts)												2023						2022
Revenues
Postpaid revenues															$	11,862					$	11,201
Prepaid revenues															2,417						2,455
Wholesale and other service revenues															1,267						1,472
Total service revenues															15,546						15,128
Equipment revenues															3,719						4,694
Other revenues															367						298
Total revenues															19,632						20,120
Operating expenses
Cost of services, exclusive of depreciation and amortization shown separately below															3,061						3,727
Cost of equipment sales, exclusive of depreciation and amortization shown separately below															4,588						5,946
Selling, general and administrative															5,425						5,056
Gain on disposal group held for sale															(42)						—
Depreciation and amortization															3,203						3,585
Total operating expenses															16,235						18,314
Operating income															3,397						1,806
Other expense, net
Interest expense, net															(835)						(864)
Other income (expense), net															9						(11)
Total other expense, net															(826)						(875)
Income before income taxes															2,571						931
Income tax expense															(631)						(218)
Net income															$	1,940					$	713
Net income															$	1,940					$	713
Other comprehensive income, net of tax
Reclassification of loss from cash flow hedges, net of tax effect of $14 and $13															40						37
Unrealized gain (loss) on foreign currency translation adjustment, net of tax effect of $0 and $0															2						(1)
Other comprehensive income															42						36
Total comprehensive income															$	1,982					$	749
Earnings per share
Basic															$	1.59					$	0.57
Diluted															$	1.58					$	0.57
Weighted-average shares outstanding
Basic															1,219,608,362						1,250,505,999
Diluted															1,224,604,698						1,255,368,592

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

Index for Notes to the Condensed Consolidated Financial Statements

T-Mobile US, Inc.

Condensed Consolidated Statements of Cash Flows

(Unaudited)

									Three Months Ended March 31,
(in millions)															2023						2022
Operating activities
Net income															$	1,940					$	713
Adjustments to reconcile net income to net cash provided by operating activities
Depreciation and amortization															3,203						3,585
Stock-based compensation expense															177						141
Deferred income tax expense															611						185
Bad debt expense															222						210
Losses from sales of receivables															38						46
Gain on remeasurement of disposal group held for sale															(13)						—
Changes in operating assets and liabilities
Accounts receivable															(1,268)						(984)
Equipment installment plan receivables															152						(535)
Inventory															129						(93)
Operating lease right-of-use assets															1,008						1,469
Other current and long-term assets															(142)						(4)
Accounts payable and accrued liabilities															(882)						(59)
Short- and long-term operating lease liabilities															(1,009)						(771)
Other current and long-term liabilities															(183)						(163)
Other, net															68						105
Net cash provided by operating activities															4,051						3,845
Investing activities
Purchases of property and equipment, including capitalized interest of $(14) and $(15)															(3,001)						(3,381)
Purchases of spectrum licenses and other intangible assets, including deposits															(73)						(2,843)
Proceeds from sales of tower sites															6						—
Proceeds related to beneficial interests in securitization transactions															1,345						1,185
Acquisition of companies, net of cash and restricted cash acquired															—						(52)
Other, net															(5)						(1)
Net cash used in investing activities															(1,728)						(5,092)
Financing activities
Proceeds from issuance of long-term debt															3,013						—
Repayments of financing lease obligations															(306)						(302)
Repayments of long-term debt															(131)						(1,632)
Repurchases of common stock															(4,619)						—
Tax withholdings on share-based awards															(187)						(172)
Other, net															(43)						(30)
Net cash used in financing activities															(2,273)						(2,136)
Change in cash and cash equivalents, including restricted cash and cash held for sale															50						(3,383)
Cash and cash equivalents, including restricted cash and cash held for sale
Beginning of period															4,674						6,703
End of period															$	4,724					$	3,320

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

Index for Notes to the Condensed Consolidated Financial Statements

T-Mobile US, Inc.

Condensed Consolidated Statement of Stockholders’ Equity

(Unaudited)

(in millions, except shares)									Common Stock Outstanding						Treasury Stock Outstanding						Treasury Shares at Cost						Par Value and Additional Paid-in Capital						Accumulated Other Comprehensive Loss						Retained Earnings (Accumulated Deficit)						Total Stockholders' Equity
Balance as of December 31, 2022									1,233,960,078						22,916,449						$	(3,016)					$	73,941					$	(1,046)					$	(223)					$	69,656
Net income									—						—						—						—						—						1,940						1,940
Other comprehensive income									—						—						—						—						42						—						42
Stock-based compensation									—						—						—						155						—						—						155
Stock issued for employee stock purchase plan									1,063,426						—						—						126						—						—						126
Issuance of vested restricted stock units									3,844,801						—						—						—						—						—						—
Shares withheld related to net share settlement of stock awards and stock options									(1,263,356)						—						—						(187)						—						—						(187)
Repurchases of common stock									(32,963,940)						32,963,940						(4,810)						—						—						—						(4,810)
Other, net									55,316						30,275						(5)						8						—						—						3
Balance as of March 31, 2023									1,204,696,325						55,910,664						$	(7,831)					$	74,043					$	(1,004)					$	1,717					$	66,925
Balance as of December 31, 2021									1,249,213,681						1,537,468						$	(13)					$	73,292					$	(1,365)					$	(2,812)					$	69,102
Net income									—						—						—						—						—						713						713
Other comprehensive income									—						—						—						—						36						—						36
Stock-based compensation									—						—						—						157						—						—						157
Stock issued for employee stock purchase plan									1,276,725						—						—						138						—						—						138
Issuance of vested restricted stock units									4,210,669						—						—						—						—						—						—
Shares withheld related to net share settlement of stock awards and stock options									(1,370,306)						—						—						(172)						—						—						(172)
Other, net									21,931						27,715						(3)						5						—						—						2
Balance as of March 31, 2022									1,253,352,700						1,565,183						$	(16)					$	73,420					$	(1,329)					$	(2,099)					$	69,976

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

Index for Notes to the Condensed Consolidated Financial Statements

T-Mobile US, Inc.

Index for Notes to the Condensed Consolidated Financial Statements

Note 1			Summary of Significant Accounting Policies			8
Note 2			Business Combination			8
Note 3			Receivables and Related Allowance for Credit Losses			9
Note 4			Sales of Certain Receivables			11
Note 5			Spectrum License Transactions			13
Note 6			Fair Value Measurements			14
Note 7			Debt			15
Note 8			Tower Obligations			16
Note 9			Revenue from Contracts with Customers			18
Note 10			Repurchases of Common Stock			19
Note 11			Wireline			20
Note 12			Earnings Per Share			21
Note 13			Commitments and Contingencies			21
Note 14			Restructuring Costs			24
Note 15			Additional Financial Information			25
Note 16			Subsequent Events			26

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, 2022.

The condensed consolidated financial statements include the balances and results of operations of T-Mobile and our consolidated subsidiaries. We consolidate majority-owned subsidiaries over which we exercise control, as well as variable interest entities (“VIEs”) where we are deemed to be the primary beneficiary and VIEs which cannot be deconsolidated, such as those related to our obligations to pay for the management and operation of certain of our wireless communications tower sites. 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.

On September 6, 2022, Sprint Communications LLC, a Kansas limited liability company and wholly owned subsidiary of the Company (“Sprint Communications”), Sprint LLC, a Delaware limited liability company and wholly owned subsidiary of the Company, and Cogent Infrastructure, Inc., a Delaware corporation (the “Buyer”) and a wholly owned subsidiary of Cogent Communications Holdings, Inc., entered into a Membership Interest Purchase Agreement (the “Wireline Sale Agreement”), pursuant to which the Buyer will acquire the U.S. long-haul fiber network and operations (including the non-U.S. extensions thereof) of Sprint Communications and its subsidiaries (the “Wireline Business”). Such transactions contemplated by the Wireline Sale Agreement are collectively referred to as the “Wireline Transaction.”

The assets and liabilities of the Wireline Business disposal group are classified as held for sale and presented within Other current assets and Other current liabilities on our Condensed Consolidated Balance Sheets as of March 31, 2023, and December 31, 2022. The fair value of the Wireline Business disposal group, less costs to sell, will be reassessed during each reporting period it remains classified as held for sale, and any remeasurement to the lower of carrying amount or fair value less costs to sell will be reported as an adjustment included within Gain on disposal group held for sale on our Condensed Consolidated Statements of Comprehensive Income. Unless otherwise specified, the amounts and information presented in the Notes to the Condensed Consolidated Financial Statements include assets and liabilities that have been reclassified as held for sale as of March 31, 2023, and December 31, 2022.

Accounting Pronouncements Adopted During the Current Year

Troubled Debt Restructurings and Vintage Disclosures

In March 2022, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2022-02, “Financial Instruments—Credit Losses (Topic 326): Troubled Debt Restructurings and Vintage Disclosures.” The standard eliminates the accounting guidance within ASC 310-40 for troubled debt restructurings by creditors while enhancing disclosure requirements for certain loan refinancings and restructurings by creditors when a borrower is experiencing financial difficulty. Additionally, for public business entities, the standard requires disclosure of current-period gross write-offs by year of origination for financing receivables and net investments in leases within the scope of ASC 326-20. As of January 1, 2023, we have adopted this standard, and it will be applied prospectively after this date.

Note 2 – Business Combination

On March 9, 2023, we entered into a Merger and Unit Purchase Agreement for the acquisition of 100% of the outstanding equity of Ka’ena Corporation and its subsidiaries including, among others, Mint Mobile LLC, for a maximum purchase price of

Index for Notes to the Condensed Consolidated Financial Statements

$1.35 billion to be paid out 39% in cash and 61% in shares of T-Mobile common stock. The purchase price is variable dependent upon specified performance indicators of Ka’ena Corporation during certain periods before and after closing and consists of an upfront payment at closing of the transaction, subject to certain agreed-upon adjustments, and a variable earnout payable 24 months after closing of the transaction. The upfront payment is estimated to be approximately $950 million, before working capital adjustments. The acquisition is subject to certain customary closing conditions, including certain regulatory approvals, and is expected to close by the end of 2023.

Note 3 – 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 and monthly device lease payments), device insurance administrators, wholesale partners, non-consolidated affiliates, other carriers and third-party retail channels.

We estimate credit losses associated with our accounts receivable portfolio segment using an expected credit loss model, which utilizes an aging schedule methodology based on historical information and adjusted for asset-specific considerations, current economic conditions and reasonable and supportable forecasts.

Our approach considers a number of factors, including our overall historical credit losses, net of recoveries, 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. We also periodically evaluate other macroeconomic indicators such as unemployment rates to assess their level of correlation with our historical credit loss statistics.

EIP Receivables Portfolio Segment

Based upon customer credit profiles at the time of customer origination, we classify the EIP receivables segment into two customer classes of “Prime” and “Subprime.” Prime customer receivables are those with lower credit risk and Subprime customer receivables are those with higher credit risk. 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 8.8% and 8.0% as of March 31, 2023, and December 31, 2022, respectively.

Index for Notes to the Condensed Consolidated Financial Statements

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

(in millions)			March 31, 2023						December 31, 2022
EIP receivables, gross			$	8,048					$	8,480
Unamortized imputed discount			(483)						(483)
EIP receivables, net of unamortized imputed discount			7,565						7,997
Allowance for credit losses			(303)						(328)
EIP receivables, net of allowance for credit losses and imputed discount			$	7,262					$	7,669
Classified on our condensed consolidated balance sheets as:
Equipment installment plan receivables, net of allowance for credit losses and imputed discount			$	5,012					$	5,123
Equipment installment plan receivables due after one year, net of allowance for credit losses and imputed discount			2,250						2,546
EIP receivables, net of allowance for credit losses and imputed discount			$	7,262					$	7,669

Many of our loss estimation techniques rely on delinquency-based models; 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, 2023:

			Originated in 2023												Originated in 2022												Originated prior to 2022												Total EIP Receivables, net of unamortized imputed discounts
(in millions)			Prime						Subprime						Prime						Subprime						Prime						Subprime						Prime						Subprime						Grand total
Current - 30 days past due			$	948					$	803					$	2,487					$	1,731					$	952					$	511					$	4,387					$	3,045					$	7,432
31 - 60 days past due			3						4						18						27						6						7						27						38						65
61 - 90 days past due			—						—						9						16						3						4						12						20						32
More than 90 days past due			—						—						8						16						5						7						13						23						36
EIP receivables, net of unamortized imputed discount			$	951					$	807					$	2,522					$	1,790					$	966					$	529					$	4,439					$	3,126					$	7,565

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 after adjusting for estimated recoveries.

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, 2023:

(in millions)			Originated in 2023												Originated in 2022												Originated prior to 2022																								Total write-offs
Write-offs			$	1											$	103											$	36																							$	140

Index for Notes to the Condensed Consolidated Financial Statements

Activity for the three months ended March 31, 2023 and 2022, in the allowance for credit losses and unamortized imputed discount balances for the accounts receivable and EIP receivables segments were as follows:

			March 31, 2023																		March 31, 2022
(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			$	167					$	811					$	978					$	146					$	630					$	776
Bad debt expense			107						115						222						96						114						210
Write-offs			(122)						(140)						(262)						(78)						(99)						(177)
Change in imputed discount on short-term and long-term EIP receivables			N/A						54						54						N/A						30						30
Impact on the imputed discount from sales of EIP receivables			N/A						(54)						(54)						N/A						(26)						(26)
Allowance for credit losses and imputed discount, end of period			$	152					$	786					$	938					$	164					$	649					$	813

Credit loss activity increased during the three months ended March 31, 2023, as activity continued to normalize relative to the three months ended March 31, 2022, which continued to be impacted by the muted pandemic levels in 2021.

Off-Balance-Sheet Credit Exposures

We do not have material off-balance-sheet credit exposures as of March 31, 2023. In connection with the sales of certain service and EIP accounts receivable pursuant to the sale arrangements, we have deferred purchase price assets included on our Condensed Consolidated Balance Sheets measured at fair value that are based on a discounted cash flow model using Level 3 inputs, including customer default rates and credit worthiness, dilutions and recoveries. See Note 4 – Sales of Certain Receivables for further information.

Note 4 – 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, 2023, and December 31, 2022, 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 assets, which consist primarily of the deferred purchase price, included on our Condensed Consolidated Balance Sheets with respect to the EIP BRE:

(in millions)			March 31, 2023						December 31, 2022
Other current assets			$	355					$	344
Other assets			130						136

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 28, 2023, we extended the scheduled expiration date of the service receivable sale

Index for Notes to the Condensed Consolidated Financial Statements

arrangement to February 27, 2024. As of both March 31, 2023, and December 31, 2022, 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 assets, which consist primarily of the deferred purchase price, and liabilities included on our Condensed Consolidated Balance Sheets with respect to the Service BRE:

(in millions)			March 31, 2023						December 31, 2022
Other current assets			$	227					$	214
Other current liabilities			383						389

Sales of Receivables

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

(in millions)			March 31, 2023						December 31, 2022
Derecognized net service accounts receivable and EIP receivables			$	2,418					$	2,410
Other current assets			582						558
of which, deferred purchase price			580						556
Other long-term assets			130						136
of which, deferred purchase price			130						136
Other current liabilities			383						389
Net cash proceeds since inception			1,668						1,697
Of which:
Change in net cash proceeds during the year-to-date period			(29)						(57)
Net cash proceeds funded by reinvested collections			1,697						1,754

At inception, we elected to measure the deferred purchase price at fair value with changes in fair value included in Selling, general and administrative expense on our Condensed Consolidated Statements of Comprehensive Income. The fair value of the deferred purchase price is determined based on a discounted cash flow model which uses primarily Level 3 inputs, including estimated customer default rates. As of March 31, 2023, and December 31, 2022, our deferred purchase price related to the sales of service receivables and EIP receivables was $710 million and $692 million, respectively.

We recognized losses from sales of receivables, including changes in fair value of the deferred purchase price, of $38 million and $46 million for the three months ended March 31, 2023 and 2022, respectively, in Selling, general and administrative expense on our Condensed Consolidated Statements of Comprehensive Income.

Continuing Involvement

Pursuant to the sale arrangements described above, we have continuing involvement with the service accounts receivable and EIP receivables we sell as we service the receivables, are required to repurchase certain receivables, including ineligible receivables, aged receivables and receivables where a write-off is imminent, and may be responsible for absorbing credit losses through reduced collections on our deferred purchase price assets. 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.

Index for Notes to the Condensed Consolidated Financial Statements

Note 5 – Spectrum License Transactions

The following table summarizes our spectrum license activity for the three months ended March 31, 2023:

(in millions)			2023
Spectrum licenses, beginning of year			$	95,798
Spectrum license acquisitions			57
Costs to clear spectrum			23
Spectrum licenses, end of period			$	95,878

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, 2023.

Spectrum Transactions

In September 2022, the Federal Communications Commission (“FCC”) announced that we were the winning bidder of 7,156 licenses in Auction 108 (2.5 GHz spectrum) for an aggregate price of $304 million. At inception of Auction 108 in June 2022, we deposited $65 million. We paid the FCC the remaining $239 million for the licenses won in the auction in September 2022. The aggregate cash payments made to the FCC are included in Other assets on our Condensed Consolidated Balance Sheets as of March 31, 2023, and will remain there until the corresponding licenses are received. The timing of when the licenses will be issued will be determined by the FCC after all post-auction procedures have been completed.

As of March 31, 2023, the activities that are necessary to get the C-band, 3.45 GHz and 2.5 GHz spectrum, acquired pursuant to FCC Auctions 107, 110 and 108, ready for its intended use have not begun; as such, capitalization of the interest associated with the costs of deploying these spectrum licenses has not begun.

License Purchase Agreements

DISH Network Corporation

On July 1, 2020, we and DISH Network Corporation (“DISH”) entered into a license purchase agreement (the “DISH License Purchase Agreement”) pursuant to which DISH has the option to purchase certain 800 MHz spectrum licenses for a total of approximately $3.6 billion in a transaction to be completed, subject to an application for FCC approval, by July 1, 2023, or within five days of FCC approval, whichever date is later.

In the event DISH breaches the DISH License Purchase Agreement or fails to deliver the purchase price following the satisfaction or waiver of all closing conditions, DISH is liable to pay us a fee of $72 million. Additionally, if DISH does not exercise the option to purchase the 800 MHz spectrum licenses, we are required, unless otherwise approved under the complaint and proposed final judgment agreed to by us, Deutsche Telekom AG (“DT”), Sprint Corporation, now known as Sprint LLC (“Sprint”), SoftBank Group Corp. (“SoftBank”) and DISH with the U.S. District Court for the District of Columbia, which was approved by the Court on April 1, 2020, to offer the licenses for sale through an auction. If the specified minimum price of $3.6 billion is not met in the auction, we would be relieved of the obligation to sell the licenses.

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, but 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 (together representing $492 million of the aggregate $3.5 billion cash consideration) being deferred in order to potentially expedite the regulatory approval process for the remainder of the licenses. The licenses being acquired by us, and the total consideration being paid for the licenses, remains the same. We anticipate that the first closing will occur in mid- to late-2023 and that the second closing (on the deferred licenses) will occur in 2024.

The parties have agreed that each of the closings will occur within 180 days after the receipt of the applicable required

Index for Notes to the Condensed Consolidated Financial Statements

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.

Note 6 – 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

Periodically, we use derivatives to manage exposure to market risk, such as interest rate risk. We designate certain derivatives as hedging instruments in a qualifying hedge accounting relationship to help minimize significant, unplanned fluctuations in cash flows or fair values caused by designated market risks, such as 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, 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, the change in the fair value of the derivative instruments is reported in Other comprehensive income and recognized in earnings when the hedged item is recognized in earnings, again, through the same income statement line item.

We did not have any significant derivative instruments outstanding as of March 31, 2023, or December 31, 2022.

Interest Rate Lock Derivatives

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

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

For the three months ended March 31, 2023 and 2022, $53 million and $50 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 $223 million of the Accumulated other comprehensive loss associated with the derivatives into Interest expense, net, over the 12 months ending March 31, 2024.

Deferred Purchase Price Assets

In connection with the sales of certain service and EIP accounts receivable pursuant to the sale arrangements, we have deferred purchase price assets measured at fair value that are based on a discounted cash flow model using unobservable Level 3 inputs, including customer default rates. See Note 4 – Sales of Certain Receivables for further information.

The carrying amounts of our deferred purchase price assets, which are measured at fair value on a recurring basis and are included on our Condensed Consolidated Balance Sheets, were $710 million and $692 million as of March 31, 2023, and December 31, 2022, respectively.

Debt

The fair value of our Senior Notes and spectrum-backed Senior Secured Notes to third parties was determined based on quoted market prices in active markets, and therefore were classified as Level 1 within the fair value hierarchy. The fair value of our Senior Notes to affiliates was determined based on a discounted cash flow approach using market interest rates of instruments with similar terms and maturities and an estimate for our standalone credit risk. Accordingly, our Senior Notes to affiliates were classified as Level 2 within the fair value hierarchy. The fair value of our asset-backed notes (“ABS Notes”) was 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 ABS Notes were classified as Level 2 within the fair value hierarchy.

Index for Notes to the Condensed Consolidated Financial Statements

Although we have determined the estimated fair values using available market information and commonly accepted valuation methodologies, considerable judgment was required in interpreting market data to develop fair value estimates for the Senior Notes to affiliates. The fair value estimates were based on information available as of March 31, 2023, and December 31, 2022. As such, our estimates are not necessarily indicative of the amount we could realize in a current market exchange.

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, 2023												December 31, 2022
Carrying Amount (1)						Fair Value (1)			Carrying Amount (1)						Fair Value (1)
Liabilities:
Senior Notes to third parties			1						$	69,513					$	63,743					$	66,582					$	59,011
Senior Notes to affiliates			2						1,495						1,485						1,495						1,460
Senior Secured Notes to third parties			1						2,979						2,866						3,117						2,984
ABS Notes to third parties			2						747						754						746						744

(1) Excludes $11 million and $20 million as of March 31, 2023, and December 31, 2022, respectively, in other financial liabilities as the carrying values approximate fair value primarily due to the short-term maturities of these instruments.

Note 7 – Debt

The following table sets forth the debt balances and activity as of, and for the three months ended, March 31, 2023**:**

(in millions)			December 31, 2022						Proceeds from Issuances and Borrowings (1)																		Repayments						Reclassifications (1)						Other (2)						March 31, 2023
Short-term debt			$	5,164					$	—																	$	(131)					$	224					$	(42)					$	5,215
Long-term debt			65,301						3,011																		—						(224)						(53)						68,035
Total debt to third parties			70,465						3,011																		(131)						—						(95)						73,250
Long-term debt to affiliates			1,495						—																		—						—						—						1,495
Total debt			$	71,960					$	3,011																	$	(131)					$	—					$	(95)					$	74,745

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

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

Our effective interest rate, excluding the impact of derivatives and capitalized interest, was approximately 4.0% and 3.9% for the three months ended March 31, 2023 and 2022, respectively, on weighted-average debt outstanding of $73.4 billion and $73.7 billion for the three months ended March 31, 2023 and 2022, 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 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, 2023, we issued the following Senior Notes:

(in millions)			Principal Issuances						Premiums/Discounts and Issuance Costs, Net						Net Proceeds from Issuance of Long-Term Debt						Issue Date
4.950% Senior Notes due 2028			$	1,000					$	(6)					$	994					February 9, 2023
5.050% Senior Notes due 2033			1,250						(9)						1,241						February 9, 2023
5.650% Senior Notes due 2053			750						26						776						February 9, 2023
Total of Senior Notes issued			$	3,000					$	11					$	3,011

Index for Notes to the Condensed Consolidated Financial Statements

Note Repayments

During the three months ended March 31, 2023, we made the following repayments:

(in millions)			Principal Amount																		Repayment Date
4.738% Secured Series 2018-1 A-1 Notes due 2025			$	131																	Various

Asset-backed Notes

Our ABS Notes are secured by $1.0 billion of gross EIP receivables and future collections on such receivables. The ABS Notes issued and the assets securing this debt are included on our Condensed Consolidated Balance Sheets.

The expected maturities of our ABS Notes are as follows:

									Expected Maturities
(in millions)						2024						2025
4.910% Class A Senior ABS Notes due 2028									$	198					$	552

Variable Interest Entities

In connection with issuing the ABS Notes in October 2022, we formed a wholly owned subsidiary, which qualifies as a bankruptcy remote entity (the “ABS BRE”), and a trust (the “ABS Trust” and together with the ABS BRE, the “ABS Entities”), in which the ABS BRE holds a residual interest. The ABS Entities meet the definition of a VIE for which we have determined that we are the primary beneficiary as we have the power to direct the activities of the ABS Entities that most significantly impact their performance. 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:

			March 31, 2023
(in millions)
Assets
Equipment installment plan receivables, net			$	720
Equipment installment plan receivables due after one year, net			205
Other current assets			84
Liabilities
Accounts payable and accrued liabilities			$	1
Long-term debt			747

See Note 3 – Receivable and Related Allowance for Credit Losses for additional information on the EIP receivables used to secure the ABS Notes.

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

Note 8 – 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.

Index for Notes to the Condensed Consolidated Financial Statements

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 “Merger”) with Sprint, Sprint entered into a lease-out and leaseback arrangement with Global Signal Inc., a third party that was subsequently acquired by CCI, that conveyed to CCI the exclusive right to manage and operate approximately 6,400 tower sites (“Master Lease Sites”) via a master prepaid lease. These agreements were assumed upon the close of the Merger, at which point the remaining term of the lease-out was approximately 17 years with no renewal options. 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.

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.

As of the closing date of the Merger, we recognized Property and equipment with a fair value of $2.8 billion and tower obligations related to amounts owed to CCI under the leaseback of $1.1 billion. Additionally, we recognized $1.7 billion in Other long-term liabilities associated with contract terms that are unfavorable to current market rates, which include unfavorable terms associated with the fixed-price purchase option in 2037.

We recognize interest expense on the tower obligations. 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 Arrangement and the Acquired CCI Tower Lease Arrangement. As a result of the Crown Agreement, there was an increase in our financing obligation as of the effective date of the Crown Agreement of approximately $1.2 billion, with a corresponding decrease to Other long-term liabilities associated with unfavorable contract terms. The modification resulted in a revised interest rate under the effective interest method for the tower obligations: 11.6% for the Existing CCI Tower Lease Arrangement and 5.3% for the Acquired CCI Tower Lease Arrangement. There were no changes made to either of our master prepaid leases with CCI.

Index for Notes to the Condensed Consolidated Financial Statements

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

(in millions)			March 31, 2023						December 31, 2022
Property and equipment, net			$	2,338					$	2,379
Tower obligations			3,897						3,934
Other long-term liabilities			554						554

Future minimum payments related to the tower obligations are approximately $427 million for the 12-month period ending March 31, 2024, $804 million in total for both of the 12-month periods ending March 31, 2025 and 2026, $793 million in total for both of the 12-month periods ending March 31, 2027 and 2028, and $4.4 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 $246 million in our Operating lease liabilities as of March 31, 2023.

Note 9 – 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, tablets, wearables, DIGITS or other connected devices;

• 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.

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

									Three Months Ended March 31,
(in millions)															2023						2022
Postpaid service revenues
Postpaid phone revenues															$	10,652					$	10,231
Postpaid other revenues															1,210						970
Total postpaid service revenues															$	11,862					$	11,201

We operate as a single operating segment. 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, 2023, and December 31, 2022, were as follows:

(in millions)			Contract Assets						Contract Liabilities
Balance as of December 31, 2022			$	534					$	748
Balance as of March 31, 2023			686						778
Change			$	152					$	30

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.

Index for Notes to the Condensed Consolidated Financial Statements

Contract asset balances increased primarily due to an increase in promotions with an extended service contract, partially offset by billings on existing contracts and impairment, which is recognized as bad debt expense. The current portion of our contract assets of approximately $466 million and $356 million as of March 31, 2023, and December 31, 2022, 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. Contract liabilities are primarily included in Deferred revenue on our Condensed Consolidated Balance Sheets.

Revenues for the three months ended March 31, 2023 and 2022 include the following:

									Three Months Ended March 31,
(in millions)															2023						2022
Amounts included in the beginning of year contract liability balance															$	667					$	654

Remaining Performance Obligations

As of March 31, 2023, the aggregate amount of transaction price allocated to remaining service performance obligations for postpaid contracts with subsidized devices and promotional bill credits that result in an extended service contract is $1.8 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, 2023, the aggregate amount of the contractual minimum consideration for wholesale, roaming and service contracts is $2.0 billion, $1.9 billion and $4.0 billion for 2023, 2024, and 2025 and beyond, respectively. These contracts have a remaining duration ranging from less than one year to eight years.

Contract Costs

The balance of deferred incremental costs to obtain contracts with customers was $2.0 billion and $1.9 billion as of March 31, 2023, and December 31, 2022, respectively, 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 $422 million and $324 million for the three months ended March 31, 2023 and 2022, 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, 2023 and 2022.

Note 10 – Repurchases of Common Stock

2022 Stock Repurchase Program

On September 8, 2022, our Board of Directors authorized our 2022 Stock Repurchase Program for up to $14.0 billion of our common stock through September 30, 2023 (the “2022 Stock Repurchase Program”). During the three months ended March 31, 2023, we repurchased 32,963,940 shares of our common stock at an average price per share of $144.57 for a total purchase price of $4.8 billion, all of which were purchased under the 2022 Stock Repurchase Program. All shares purchased during the three months ended March 31, 2023, were purchased at market price. As of March 31, 2023, we had up to $6.2 billion remaining under the 2022 Stock Repurchase Program.

Subsequent to March 31, 2023, from April 1, 2023, through April 21, 2023, we repurchased 5,114,527 shares of our common stock at an average price per share of $147.96 for a total purchase price of $757 million. As of April 21, 2023, we had up to $5.5 billion remaining under the 2022 Stock Repurchase Program.

Index for Notes to the Condensed Consolidated Financial Statements

Note 11 – Wireline

Sale of the Wireline Business

On September 6, 2022, two of our wholly owned subsidiaries, Sprint Communications and Sprint LLC, and Cogent Infrastructure, Inc. entered into the Wireline Sale Agreement, pursuant to which the Buyer will acquire the Wireline Business. The Wireline Sale Agreement provides that, upon the terms and conditions set forth therein, the Buyer will purchase all of the issued and outstanding membership interests (the “Purchased Interests”) of a Delaware limited liability company that holds certain assets and liabilities relating to the Wireline Business.

The parties have agreed to a $1 purchase price in consideration for the Purchased Interests, subject to customary adjustments set forth in the Wireline Sale Agreement. In addition, at the consummation of the Wireline Transaction (the “Closing”), a T-Mobile affiliate will enter into a commercial agreement for IP transit services, pursuant to which T-Mobile will pay to the Buyer an aggregate of $700 million, consisting of (i) $350 million in equal monthly installments during the first year after the Closing and (ii) $350 million in equal monthly installments over the subsequent 42 months. As of March 31, 2023, all required regulatory approvals and consents have been received, and the Wireline Transaction is expected to close in the beginning of May 2023, subject to the satisfaction or waiver of certain conditions and other terms and conditions of the Wireline Sale Agreement.

As a result of the Wireline Sale Agreement and related anticipated Wireline Transaction, we concluded that the Wireline Business met the held for sale criteria upon entering into the Wireline Sale Agreement. As such, the assets and liabilities of the Wireline Business disposal group are classified as held for sale and presented within Other current assets and Other current liabilities on our Condensed Consolidated Balance Sheets as of March 31, 2023, and December 31, 2022.

The components of assets and liabilities held for sale presented within Other current assets and Other current liabilities, respectively, on our Condensed Consolidated Balance Sheets as of March 31, 2023, were as follows:

(in millions)			March 31, 2023
Assets
Cash and cash equivalents			$	30
Accounts receivable, net			40
Prepaid expenses			19
Other current assets			9
Property and equipment, net			511
Operating lease right-of-use assets			138
Other intangible assets, net			7
Other assets			7
Remeasurement of disposal group held for sale to fair value less remaining costs to sell (1)			(364)
Assets held for sale			$	397
Liabilities
Accounts payable and accrued liabilities			$	64
Deferred revenue			8
Short-term operating lease liabilities			62
Operating lease liabilities			245
Other long-term liabilities			39
Liabilities held for sale			418
Liabilities held for sale, net			$	(21)

(1) Excludes amounts related to the establishment of liabilities for contractual and other payments associated with the Wireline Transaction, including the $700 million of fees payable for IP transit services discounted to present value and other payments to the Buyer anticipated in connection with the Wireline Transaction.

During the three months ended March 31, 2023, we recognized a pre-tax gain of $42 million, which is included within Gain on disposal group held for sale on our Condensed Consolidated Statements of Comprehensive Income. This gain was primarily due to a decrease in our accrual of estimated costs to sell.

The present value of the liability for fees payable for IP transit services was recognized as a component of Loss on disposal group held for sale in 2022, as we have not currently identified any path to utilize such services in our continuing operations

Index for Notes to the Condensed Consolidated Financial Statements

and have committed to execute the agreement as a closing condition for the Wireline Transaction. We will continue to evaluate potential uses on an ongoing basis over the life of the agreement. $321 million and $334 million of this liability, including accrued interest, is presented within Other current liabilities and Other long-term liabilities, respectively, on our Condensed Consolidated Balance Sheets as of March 31, 2023, in accordance with the expected timing of the related payments. $2 million and $26 million for contractual and other payments associated with the Wireline Transaction are presented within Other current liabilities and Other long-term liabilities, respectively, on our Condensed Consolidated Balance Sheets as of March 31, 2023, in accordance with the expected timing of the related payments.

We do not consider the sale of the Wireline Business to be a strategic shift that will have a major effect on the Company’s operations and financial results, and therefore it does not qualify for reporting as a discontinued operation.

Note 12 – 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)															2023						2022
Net income															$	1,940					$	713
Weighted-average shares outstanding – basic															1,219,608,362						1,250,505,999
Effect of dilutive securities:
Outstanding stock options and unvested stock awards															4,996,336						4,862,593
Weighted-average shares outstanding – diluted															1,224,604,698						1,255,368,592
Earnings per share – basic															$	1.59					$	0.57
Earnings per share – diluted															$	1.58					$	0.57
Potentially dilutive securities:
Outstanding stock options and unvested stock awards															98,175						2,054,344
SoftBank contingent consideration (1)															48,751,557						48,751,557

(1) Represents the weighted-average SoftBank Specified Shares that are contingently issuable from the Merger date of April 1, 2020, pursuant to a letter agreement dated February 20, 2020, between T-Mobile, SoftBank and DT.

As of March 31, 2023, we had authorized 100 million shares of preferred stock, with a par value of $0.00001 per share. There was no preferred stock outstanding as of March 31, 2023 and 2022. Potentially dilutive securities were not included in the computation of diluted earnings per share if to do so would have been anti-dilutive.

The SoftBank Specified Shares Amount of 48,751,557 shares of T-Mobile common stock was determined to be contingent consideration for the Merger and is not dilutive until the defined volume-weighted average price per share is reached.

Note 13 – Commitments and Contingencies

Purchase Commitments

We have commitments for non-dedicated transportation lines with varying expiration terms that generally extend through 2038. In addition, we have commitments to purchase wireless devices, network services, equipment, software, marketing sponsorship agreements and other items in the ordinary course of business, with various terms through 2043.

Our purchase commitments are approximately $4.4 billion for the 12-month period ending March 31, 2024, $5.1 billion in total for both of the 12-month periods ending March 31, 2025 and 2026, $2.9 billion in total for both of the 12-month periods ending March 31, 2027 and 2028, and $2.8 billion in total thereafter. These amounts are not reflective of our entire anticipated purchases under the related agreements but are determined based on the non-cancelable quantities or termination amounts to which we are contractually obligated.

On March 9, 2023, we entered into a Merger and Unit Purchase Agreement for the acquisition of 100% of the outstanding equity of Ka’ena Corporation and its subsidiaries including, among others, Mint Mobile LLC, for a maximum purchase price of $1.35 billion to be paid out 39% in cash and 61% in shares of T-Mobile common stock. The upfront payment is estimated to be approximately $950 million, before working capital adjustments. The agreement remains subject to regulatory approval and the

Index for Notes to the Condensed Consolidated Financial Statements

estimated purchase price is excluded from our reported commitments above. See Note 2 – Business Combination for additional details.

Spectrum Leases

We lease spectrum from various parties. These leases include service obligations to the lessors. Certain spectrum leases provide for minimum lease payments, additional charges, renewal options and escalation clauses. Leased spectrum agreements have varying expiration terms that generally extend through 2050. We expect that all renewal periods in our spectrum leases will be exercised by us. Certain spectrum leases also include purchase options and right-of-first refusal clauses in which we are provided the opportunity to exercise our purchase option if the lessor receives a purchase offer from a third party. The purchase of the leased spectrum is at our option and therefore the option price is not included in the commitments below.

Our spectrum lease and service credit commitments, including renewal periods, are approximately $316 million for the 12-month period ending March 31, 2024, $581 million in total for both of the 12-month periods ending March 31, 2025 and 2026, $635 million in total for both of the 12-month periods ending March 31, 2027 and 2028, and $4.5 billion in total thereafter.

On August 8, 2022, we entered into License Purchase Agreements to acquire spectrum in the 600 MHz band from Channel 51 License Co LLC and LB License Co, LLC in exchange for total cash consideration of $3.5 billion. 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 (together representing $492 million of the aggregate $3.5 billion cash consideration) being deferred in order to potentially expedite the regulatory approval process for the remainder of the licenses. The agreements remain subject to regulatory approval and are excluded from our reported commitments above. See Note 5 – Spectrum License Transactions for additional details.

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, we received a Notice of Apparent Liability for Forfeiture and Admonishment from the FCC, which proposed a penalty against us for allegedly violating section 222 of the Communications Act and the FCC’s regulations governing the privacy of customer information. In the first quarter of 2020, we recorded an accrual for an estimated payment amount. We maintained the accrual as of March 31, 2023, and that accrual was included in Accounts payable and accrued liabilities on our Condensed Consolidated Balance Sheets.

On April 1, 2020, in connection with the closing of the 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

Index for Notes to the Condensed Consolidated Financial Statements

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 (as amended, the “Business Combination Agreement”), 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 making additional reimbursements and paying 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.

In October 2020, we notified Mobile Virtual Network Operators (“MVNOs”) using the legacy Sprint CDMA network that we planned to retire that network on December 31, 2021. In response to that notice, DISH, which had Boost Mobile customers who used the legacy Sprint CDMA network, made several efforts to prevent us from retiring the CDMA network until mid-2023, including pursuing a Petition for Modification and related proceedings pursuant to the California Public Utilities Commission’s (the “CPUC”) April 2020 decision concerning the Merger. As of June 30, 2022, the orderly decommissioning of the legacy Sprint CDMA network had been completed, although certain of the CPUC proceedings remain in process.

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 July 26, 2022, we received preliminary approval of the proposed settlement, which remains subject to final court approval. The court conducted a final approval hearing on January 20, 2023, and we await a ruling from the court. If approved by the court, under the terms of the proposed settlement, we would pay an aggregate of $350 million to fund claims submitted by class members, the legal fees of plaintiffs’ counsel and the costs of administering the settlement. We would also commit to an aggregate incremental spend of $150 million for data security and related technology in 2022 and 2023. We anticipate that, upon court approval, the settlement will provide a full release of all claims arising out of the August 2021 cyberattack by class members, who do 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 have the right to terminate the settlement agreement under certain conditions.

If approved by the court, 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 proposed class action settlement and the separate settlements, we recorded a total pre-tax charge of approximately $400 million in the second quarter of 2022. During the three months ended March 31, 2023, we recognized $50 million in reimbursements from insurance carriers for costs incurred related to the August 2021 cyberattack, which is included as a reduction to Selling, general

Index for Notes to the Condensed Consolidated Financial Statements

and administrative expenses on our Condensed Consolidated Statements of Comprehensive Income. The ultimate resolution of the class action depends on whether we will be able to obtain court approval of the proposed settlement, the number of plaintiffs who opt-out of the proposed settlement and whether the proposed settlement will be appealed.

In addition, in September 2022, a purported Company shareholder filed a derivative action in the Delaware Chancery Court 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. We are unable at this time to predict the potential outcome of this lawsuit or whether we may be subject to further private litigation.

We have also received inquiries 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 are cooperating fully with these agencies and regulators and working with them to resolve 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 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 who plaintiffs allege paid artificially inflated prices due to the Merger. We intend to vigorously defend this lawsuit, but we are unable to predict the potential outcome.

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 inquires, to which we will respond in due course and may incur significant expenses. However, we cannot predict the timing or outcome of any of these potential matters, or whether we may be subject to additional legal proceedings, claims, regulatory inquiries, investigations, or enforcement actions. In addition, we are unable to predict the full impact of this incident on customer behavior in the future, including whether a change in our customers’ behavior could negatively impact our results of operations on an ongoing basis, although we presently do not expect that it will have a material effect on our operations.

Note 14 – Restructuring Costs

Upon close of the Merger in April 2020, we began implementing restructuring initiatives to realize cost efficiencies and reduce redundancies. The major activities associated with the Merger restructuring initiatives to date include contract termination costs associated with the rationalization of retail stores, distribution channels, duplicative network and backhaul services and other agreements, severance costs associated with the integration of redundant processes and functions and the decommissioning of certain small cell sites and distributed antenna systems to achieve Merger synergies in network costs.

Index for Notes to the Condensed Consolidated Financial Statements

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

(in millions)									Three Months Ended March 31, 2023						Incurred to Date
Contract termination costs									$	—					$	423
Severance costs									3						574
Network decommissioning									87						1,564
Total restructuring plan expenses									$	90					$	2,561

The expenses associated with our Merger restructuring initiatives are included in Costs of services and Selling, general and administrative expenses on our Condensed Consolidated Statements of Comprehensive Income.

Our Merger restructuring initiatives also include the acceleration or termination of certain of our operating and financing leases for cell sites, switch sites, retail stores, network equipment and office facilities. Incremental expenses associated with accelerating amortization of the right-of-use assets on lease contracts were $139 million and $464 million for the three months ended March 31, 2023 and 2022, respectively, and are included in Costs of services and Selling, general and administrative expenses on our Condensed Consolidated Statements of Comprehensive Income.

The changes in the liabilities associated with our Merger restructuring initiatives, including expenses incurred and cash payments, are as follows:

(in millions)			December 31, 2022						Expenses Incurred						Cash Payments						Adjustments for Non-Cash Items (1)						March 31, 2023
Contract termination costs			$	190					$	—					$	(8)					$	—					$	182
Severance costs			—						3						(5)						3						1
Network decommissioning			280						87						(88)						(10)						269
Total			$	470					$	90					$	(101)					$	(7)					$	452

(1) Non-cash items primarily consist of the write-off of assets within Network decommissioning.

The liabilities accrued in connection with our Merger restructuring initiatives are presented in Accounts payable and accrued liabilities on our Condensed Consolidated Balance Sheets.

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

Note 15 – Additional Financial Information

Accounts Payable and Accrued Liabilities

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

(in millions)			March 31, 2023						December 31, 2022
Accounts payable			$	6,429					$	7,213
Payroll and related benefits			859						1,236
Property and other taxes, including payroll			1,630						1,657
Accrued interest			797						731
Commissions and contract termination costs			469						523
Toll and interconnect			195						227
Other			712						688
Accounts payable and accrued liabilities			$	11,091					$	12,275

Book overdrafts included in accounts payable were $556 million and $720 million as of March 31, 2023, and December 31, 2022, respectively.

Index for Notes to the Condensed Consolidated Financial Statements

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)															2023						2022
Interest payments, net of amounts capitalized															$	840					$	778
Operating lease payments															1,314						1,048
Income tax payments															27						—
Non-cash investing and financing activities
Non-cash beneficial interest obtained in exchange for securitized receivables															$	1,119					$	1,018
Change in accounts payable and accrued liabilities for purchases of property and equipment															(329)						(183)
Increase in Tower obligations from contract modification															—						1,158
Operating lease right-of-use assets obtained in exchange for lease obligations															439						5,975
Financing lease right-of-use assets obtained in exchange for lease obligations															239						298

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

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

(in millions)			March 31, 2023						December 31, 2022
Cash and cash equivalents			$	4,540					$	4,507
Cash and cash equivalents held for sale (included in Other current assets)			30						27
Restricted cash (included in Other current assets)			85						73
Restricted cash (included in Other assets)			69						67
Cash and cash equivalents, including restricted cash and cash held for sale			$	4,724					$	4,674

Note 16 – Subsequent Events

Subsequent to March 31, 2023, from April 1, 2023, through April 21, 2023, we repurchased 5,114,527 shares of our common stock at an average price per share of $147.96 for a total purchase price of $757 million. See Note 10 – Repurchases of Common Stock for additional information.