UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 31, ~~2021~~2022

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission File Number: 1-33409

T-MOBILE US, INC.

(Exact name of registrant as specified in its charter)


Delaware						20-0836269
(State or other jurisdiction of incorporation or organization)						(I.R.S. Employer Identification No.)

12920 SE 38th Street

Bellevue, Washington

(Address of principal executive offices)

98006-1350

(Zip Code)



(425)			378-4000
(Registrant’s telephone number, including area code)
Securities registered pursuant to Section 12(b) of the Act:

Title of each class

Trading Symbol

Name of each exchange on which registered

Common Stock, par value $0.00001 per share

TMUS

The NASDAQ Stock Market LLC

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.


Large accelerated filer	☒	Accelerated filer	☐
Non-accelerated filer	☐	Smaller reporting company	☐
		Emerging growth company	☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date.


Class			Shares Outstanding as of April ~~28, 2021~~29, 2022
Common Stock, par value $0.00001 per share			~~1,246,857,781~~1,253,584,833

T-Mobile US, Inc.

Form 10-Q

For the Quarter Ended March 31, ~~2021~~2022

Table of Contents

Index for Notes to the Condensed Consolidated ~~Financial~~Financial Statements

PART I. ~~Financial Information~~FINANCIAL INFORMATION

Item 1. Financial Statements

T-Mobile US, Inc.

Condensed Consolidated Balance Sheets

(Unaudited)


(in millions, except share and per share amounts)	(in millions, except share and per share amounts)	March 31, 2021		December 31, 2020		(in millions, except share and per share amounts)	March 31, 2022		December 31, 2021
Assets	Assets					Assets
Current assets	Current assets					Current assets

Cash and cash equivalents	Cash and cash equivalents	$	6,677	$	10,385	Cash and cash equivalents	$	3,245	$	6,631
Accounts receivable, net of allowance for credit losses of $143 and $194		3,592		4,254
Equipment installment plan receivables, net of allowance for credit losses and imputed discount of $512 and $478		3,841		3,577
Accounts receivable from affiliates		20		22
Accounts receivable, net of allowance for credit losses of $164 and $146						Accounts receivable, net of allowance for credit losses of $164 and $146	4,016		4,194
Equipment installment plan receivables, net of allowance for credit losses and imputed discount of $522 and $494						Equipment installment plan receivables, net of allowance for credit losses and imputed discount of $522 and $494	5,061		4,748

Inventory	Inventory	2,209		2,527		Inventory	2,715		2,567
Prepaid expenses	Prepaid expenses	670		624		Prepaid expenses	727		746
Other current assets	Other current assets	1,770		2,496		Other current assets	1,691		2,005

Total current assets	Total current assets	18,779		23,885		Total current assets	17,455		20,891
Property and equipment, net	Property and equipment, net	40,549		41,175		Property and equipment, net	40,006		39,803
Operating lease right-of-use assets	Operating lease right-of-use assets	27,793		28,021		Operating lease right-of-use assets	31,449		26,959
Financing lease right-of-use assets	Financing lease right-of-use assets	2,899		3,028		Financing lease right-of-use assets	3,287		3,322
Goodwill	Goodwill	11,158		11,117		Goodwill	12,234		12,188
Spectrum licenses	Spectrum licenses	82,901		82,828		Spectrum licenses	92,661		92,606
Other intangible assets, net	Other intangible assets, net	4,892		5,298		Other intangible assets, net	4,448		4,733
Equipment installment plan receivables due after one year, net of allowance for credit losses and imputed discount of $124 and $127		2,221		2,031
Equipment installment plan receivables due after one year, net of allowance for credit losses and imputed discount of $127 and $136						Equipment installment plan receivables due after one year, net of allowance for credit losses and imputed discount of $127 and $136	2,837		2,829

Other assets	Other assets	12,140		2,779		Other assets	6,276		3,232

Total assets	Total assets	$	203,332	$	200,162	Total assets	$	210,653	$	206,563
Liabilities and Stockholders' Equity	Liabilities and Stockholders' Equity					Liabilities and Stockholders' Equity
Current liabilities	Current liabilities					Current liabilities

Accounts payable and accrued liabilities	Accounts payable and accrued liabilities	$	8,712	$	10,196	Accounts payable and accrued liabilities	$	11,134	$	11,405
Payables to affiliates		108		157

Short-term debt	Short-term debt	4,423		4,579		Short-term debt	2,865		3,378

Short-term debt to affiliates						Short-term debt to affiliates	1,250		2,245
Deferred revenue	Deferred revenue	972		1,030		Deferred revenue	842		856
Short-term operating lease liabilities	Short-term operating lease liabilities	3,498		3,868		Short-term operating lease liabilities	3,252		3,425
Short-term financing lease liabilities	Short-term financing lease liabilities	1,013		1,063		Short-term financing lease liabilities	1,121		1,120

Other current liabilities	Other current liabilities	769		810		Other current liabilities	959		1,070

Total current liabilities	Total current liabilities	19,495		21,703		Total current liabilities	21,423		23,499

Long-term debt	Long-term debt	66,395		61,830		Long-term debt	66,861		67,076
Long-term debt to affiliates	Long-term debt to affiliates	4,721		4,716		Long-term debt to affiliates	1,494		1,494
Tower obligations	Tower obligations	2,974		3,028		Tower obligations	4,037		2,806
Deferred tax liabilities	Deferred tax liabilities	10,154		9,966		Deferred tax liabilities	10,410		10,216
Operating lease liabilities	Operating lease liabilities	26,602		26,719		Operating lease liabilities	31,187		25,818
Financing lease liabilities	Financing lease liabilities	1,316		1,444		Financing lease liabilities	1,447		1,455

Other long-term liabilities	Other long-term liabilities	5,298		5,412		Other long-term liabilities	3,818		5,097

Total long-term liabilities	Total long-term liabilities	117,460		113,115		Total long-term liabilities	119,254		113,962
Commitments and contingencies (Note 11)	Commitments and contingencies (Note 11)	0		0		Commitments and contingencies (Note 11)	0		0
Stockholders' equity	Stockholders' equity					Stockholders' equity

Common Stock, par value $0.00001 per share, 2,000,000,000 shares authorized; 1,248,334,491 and 1,243,345,584 shares issued, 1,246,773,175 and 1,241,805,706 shares outstanding		0		0
Common Stock, par value $0.00001 per share, 2,000,000,000 shares authorized; 1,254,917,883 and 1,250,751,148 shares issued, 1,253,352,700 and 1,249,213,681 shares outstanding						Common Stock, par value $0.00001 per share, 2,000,000,000 shares authorized; 1,254,917,883 and 1,250,751,148 shares issued, 1,253,352,700 and 1,249,213,681 shares outstanding	—		—
Additional paid-in capital	Additional paid-in capital	72,839		72,772		Additional paid-in capital	73,420		73,292
Treasury stock, at cost, 1,561,316 and 1,539,878 shares issued		(14)		(11)
Treasury stock, at cost, 1,565,183 and 1,537,468 shares issued						Treasury stock, at cost, 1,565,183 and 1,537,468 shares issued	(16)		(13)
Accumulated other comprehensive loss	Accumulated other comprehensive loss	(1,545)		(1,581)		Accumulated other comprehensive loss	(1,329)		(1,365)
Accumulated deficit	Accumulated deficit	(4,903)		(5,836)		Accumulated deficit	(2,099)		(2,812)

Total stockholders' equity	Total stockholders' equity	66,377		65,344		Total stockholders' equity	69,976		69,102
Total liabilities and stockholders' equity	Total liabilities and stockholders' equity	$	203,332	$	200,162	Total liabilities and stockholders' equity	$	210,653	$	206,563

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,				Three Months Ended March 31,
(in millions, except share and per share amounts)	(in millions, except share and per share amounts)	2021		2020			(in millions, except share and per share amounts)		2022	2021
Revenues	Revenues							Revenues

Postpaid revenues	Postpaid revenues	$	10,303	$	5,887			Postpaid revenues		$	11,201	$	10,303
Prepaid revenues	Prepaid revenues	2,351		2,373				Prepaid revenues		2,455		2,351
Wholesale revenues		897		325
Roaming and other service revenues		641		261
Wholesale and other service revenues								Wholesale and other service revenues		1,472		1,538

Total service revenues	Total service revenues	14,192		8,846				Total service revenues		15,128		14,192
Equipment revenues	Equipment revenues	5,346		2,117				Equipment revenues		4,694		5,346
Other revenues	Other revenues	221		150				Other revenues		298		221

Total revenues	Total revenues	19,759		11,113				Total revenues		20,120		19,759
Operating expenses	Operating expenses							Operating expenses

Cost of services, exclusive of depreciation and amortization shown separately below	Cost of services, exclusive of depreciation and amortization shown separately below	3,384		1,639				Cost of services, exclusive of depreciation and amortization shown separately below		3,727		3,384
Cost of equipment sales, exclusive of depreciation and amortization shown separately below	Cost of equipment sales, exclusive of depreciation and amortization shown separately below	5,142		2,529				Cost of equipment sales, exclusive of depreciation and amortization shown separately below		5,946		5,142
Selling, general and administrative	Selling, general and administrative	4,805		3,688				Selling, general and administrative		5,056		4,805

Depreciation and amortization	Depreciation and amortization	4,289		1,718				Depreciation and amortization		3,585		4,289

Total operating expenses	Total operating expenses	17,620		9,574				Total operating expenses		18,314		17,620
Operating income	Operating income	2,139		1,539				Operating income		1,806		2,139
Other income (expense)
Other expense								Other expense

Interest expense		(792)		(185)
Interest expense to affiliates		(46)		(99)
Interest income		3		12
Interest expense, net								Interest expense, net		(864)		(835)

Other expense, net	Other expense, net	(125)		(10)				Other expense, net		(11)		(125)

Total other expense, net	Total other expense, net	(960)		(282)				Total other expense, net		(875)		(960)

Income before income taxes	Income before income taxes	1,179		1,257				Income before income taxes		931		1,179
Income tax expense	Income tax expense	(246)		(306)				Income tax expense		(218)		(246)

Net income	Net income	$	933	$	951			Net income		$	713	$	933

Net income	Net income	$	933	$	951			Net income		$	713	$	933
Other comprehensive income (loss), net of tax	Other comprehensive income (loss), net of tax							Other comprehensive income (loss), net of tax

Unrealized gain on cash flow hedges, net of tax effect of $13 and $12								Unrealized gain on cash flow hedges, net of tax effect of $13 and $12		37		34

Unrealized gain (loss) on cash flow hedges, net of tax effect of $12 and $(276)		34		(792)

Unrealized gain on foreign currency translation adjustment, net of tax effect of $0 and $0		2		0
Unrealized (loss) gain on foreign currency translation adjustment, net of tax effect of $0 and $0								Unrealized (loss) gain on foreign currency translation adjustment, net of tax effect of $0 and $0		(1)		2

Other comprehensive income (loss)		36		(792)

Other comprehensive income								Other comprehensive income		36		36
Total comprehensive income	Total comprehensive income	$	969	$	159			Total comprehensive income		$	749	$	969
Earnings per share	Earnings per share							Earnings per share

Basic	Basic	$	0.75	$	1.11			Basic		$	0.57	$	0.75

Diluted	Diluted	$	0.74	$	1.10			Diluted		$	0.57	$	0.74
Weighted average shares outstanding
Weighted-average shares outstanding								Weighted-average shares outstanding
Basic	Basic	1,243,520,026		858,148,284				Basic		1,250,505,999		1,243,520,026
Diluted	Diluted	1,252,783,564		865,998,532				Diluted		1,255,368,592		1,252,783,564

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) 2021 2020
Operating activities
Net income $ 933 $ 951
Adjustments to reconcile net income to net cash provided by operating activities
Depreciation and amortization 4,289 1,718
Stock-based compensation expense 138 138
Deferred income tax expense 211 310
Bad debt expense 82 113
(Gains) losses from sales of receivables (18) 25
Losses on redemption of debt 101 0
Changes in operating assets and liabilities
Accounts receivable 96 (748)
Equipment installment plan receivables (727) 69
Inventories 279 (511)
Operating lease right-of-use assets 1,124 527
Other current and long-term assets 54 6
Accounts payable and accrued liabilities (1,384) (405)
Short and long-term operating lease liabilities (1,369) (725)
Other current and long-term liabilities (217) 79
Other, net 69 70
Net cash provided by operating activities 3,661 1,617
Investing activities
Purchases of property and equipment, including capitalized interest of $84 and $112 (3,183) (1,753)
Purchases of spectrum licenses and other intangible assets, including deposits (8,922) (99)
Proceeds related to beneficial interests in securitization transactions 891 868
Net cash related to derivative contracts under collateral exchange arrangements 0 (580)
Acquisition of companies, net of cash and restricted cash acquired (29) 0
Other, net 4 (16)
Net cash used in investing activities (11,239) (1,580)
Financing activities
Proceeds from issuance of long-term debt 6,763 0
Repayments of financing lease obligations (287) (282)
Repayments of short-term debt for purchases of inventory, property and equipment and other financial liabilities (55) (25)
Repayments of long-term debt (2,219) 0
Tax withholdings on share-based awards (218) (141)
Cash payments for debt prepayment or debt extinguishment costs (65) 0
Other, net (45) (5)
Net cash provided by (used in) financing activities 3,874 (453)
Change in cash and cash equivalents, including restricted cash (3,704) (416)
Cash and cash equivalents, including restricted cash
Beginning of period 10,463 1,528
End of period $ 6,759 $ 1,112


	Three Months Ended March 31,
(in millions)		2022		2021
Operating activities

Net income		$	713	$	933
Adjustments to reconcile net income to net cash provided by operating activities
Depreciation and amortization		3,585		4,289
Stock-based compensation expense		141		138
Deferred income tax expense		185		211
Bad debt expense		210		82
Losses (gains) from sales of receivables		46		(18)

Losses on redemption of debt		—		101




Changes in operating assets and liabilities
Accounts receivable		(984)		96
Equipment installment plan receivables		(535)		(727)
Inventories		(93)		279
Operating lease right-of-use assets		1,469		1,124
Other current and long-term assets		(4)		54
Accounts payable and accrued liabilities		(59)		(1,384)
Short- and long-term operating lease liabilities		(771)		(1,369)
Other current and long-term liabilities		(163)		(217)
Other, net		105		69

Net cash provided by operating activities		3,845		3,661
Investing activities

Purchases of property and equipment, including capitalized interest of ($15) and ($84)		(3,381)		(3,183)
Purchases of spectrum licenses and other intangible assets, including deposits		(2,843)		(8,922)

Proceeds related to beneficial interests in securitization transactions		1,185		891

Acquisition of companies, net of cash and restricted cash acquired		(52)		(29)



Other, net		(1)		4

Net cash used in investing activities		(5,092)		(11,239)
Financing activities

Proceeds from issuance of long-term debt		—		6,763



Repayments of financing lease obligations		(302)		(287)
Repayments of short-term debt for purchases of inventory, property and equipment and other financial liabilities		—		(55)
Repayments of long-term debt		(1,632)		(2,219)




Tax withholdings on share-based awards		(172)		(218)

Cash payments for debt prepayment or debt extinguishment costs		—		(65)
Other, net		(30)		(45)

Net cash (used in) provided by financing activities		(2,136)		3,874
Change in cash and cash equivalents, including restricted cash		(3,383)		(3,704)
Cash and cash equivalents, including restricted cash
Beginning of period		6,703		10,463
End of period		$	3,320	$	6,759

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 Shares at Cost Par Value and Additional Paid-in Capital Accumulated Other Comprehensive Loss Accumulated Deficit Total Stockholders' Equity
Balance as of December 31, 2020 1,241,805,706 $ (11) $ 72,772 $ (1,581) $ (5,836) $ 65,344
Net income — — — — 933 933
Other comprehensive income — — — 36 — 36
Stock-based compensation — — 154 — — 154
Exercise of stock options 80,802 — 3 — — 3
Stock issued for employee stock purchase plan 1,272,253 — 125 — — 125
Issuance of vested restricted stock units 5,421,839 — — — — —
Shares withheld related to net share settlement of stock awards and stock options (1,785,987) — (218) — — (218)
Transfer RSU from NQDC plan (21,438) (3) 3 — — —
Balance as of March 31, 2021 1,246,773,175 $ (14) $ 72,839 $ (1,545) $ (4,903) $ 66,377
Balance as of December 31, 2019 856,905,400 $ (8) $ 38,498 $ (868) $ (8,833) $ 28,789
Net income — — — — 951 951
Other comprehensive loss — — — (792) — (792)
Executive put option (342,000) — 1 — — 1
Stock-based compensation — — 152 — — 152
Exercise of stock options 49,193 — 1 — — 1
Stock issued for employee stock purchase plan 1,246,317 — 83 — — 83
Issuance of vested restricted stock units 4,755,209 — — — — —
Shares withheld related to net share settlement of stock awards and stock options (1,490,399) — (141) — — (141)
Distribution from NQDC plan 4,386 (3) 3 — — —
Prior year Retained Earnings — — — — (67) (67)
Balance as of March 31, 2020 861,128,106 $ (11) $ 38,597 $ (1,660) $ (7,949) $ 28,977


(in millions, except shares)	Common Stock Outstanding	Treasury Shares at Cost		Par Value and Additional Paid-in Capital		Accumulated Other Comprehensive Loss		Accumulated Deficit		Total Stockholders' Equity
Balance as of December 31, 2021	1,249,213,681	$	(13)	$	73,292	$	(1,365)	$	(2,812)	$	69,102
Net income	—	—		—		—		713		713
Other comprehensive income	—	—		—		36		—		36

Stock-based compensation	—	—		157		—		—		157
Exercise of stock options	49,647	—		2		—		—		2
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)

Transfers with NQDC plan	(27,716)	(3)		3		—		—		—







Balance as of March 31, 2022	1,253,352,700	$	(16)	$	73,420	$	(1,329)	$	(2,099)	$	69,976

Balance as of December 31, 2020	1,241,805,706	$	(11)	$	72,772	$	(1,581)	$	(5,836)	$	65,344
Net income	—	—		—		—		933		933
Other comprehensive income	—	—		—		36		—		36

Stock-based compensation	—	—		154		—		—		154
Exercise of stock options	80,802	—		3		—		—		3
Stock issued for employee stock purchase plan	1,272,253	—		125		—		—		125
Issuance of vested restricted stock units	5,421,839	—		—		—		—		—

Shares withheld related to net share settlement of stock awards and stock options	(1,785,987)	—		(218)		—		—		(218)

Transfers with NQDC plan	(21,438)	(3)		3		—		—		—

Balance as of March 31, 2021	1,246,773,175	$	(14)	$	72,839	$	(1,545)	$	(4,903)	$	66,377

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

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, ~~2020.~~2021.

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, including but not limited to, the valuation of assets acquired and liabilities assumed through the merger (the “Merger”) with Sprint Corporation (“Sprint”). These estimates~~circumstances. Estimates are inherently subject to judgment and actual results could differ from those estimates.

Accounting Pronouncements ~~Not Yet~~ Adopted During the Current Year

Reference Rate Reform

In March 2020, the Financial Accounting Standards Board (“FASB”) issued ~~ASU~~Accounting Standards Update (“ASU”) 2020-04, “Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial ~~Reporting.~~Reporting,” and has since modified the standard with ASU 2021-01, “Reference Rate Reform (Topic 848): Scope” (together, the “reference rate reform standard”). The reference rate reform standard provides temporary optional expedients and allows for certain exceptions to applying existing GAAP for contract modifications and hedging relationships, subject to meeting certain criteria, that reference LIBOR or another reference rate expected to be discontinued as a result of reference rate reform. The reference rate reform standard is available for adoption through December 31, ~~2022. We are currently evaluating~~2022, and the ~~impact this~~optional expedients for contract modifications must be elected for all arrangements within a given Accounting Standards Codification (“ASC”) Topic or Industry Subtopic. As of January 1, 2022, we have elected to apply the practical expedients provided by the reference rate reform standard ~~will~~for all ASC Topics and Industry Subtopics related to eligible contract modifications as they occur. This election did not have ~~including optional expedients,~~a material impact on our condensed consolidated financial ~~statements.~~statements for the three months ended March 31, 2022, and the impact of applying the election to future eligible contract modifications that occur through December 31, 2022 is also not expected to be material.

~~Other recent accounting pronouncements issued by the FASB (including its Emerging Issues Task Force), the American Institute of Certified Public Accountants,~~Contract Assets and ~~the SEC did not have, or are not expected to have,~~Contract Liabilities Acquired in a ~~significant impact on our present or future condensed consolidated financial statements.~~

~~Note 2 –~~ Business Combination

~~Business Combination Agreement~~In October 2021, the FASB issued ASU 2021-08, “Business Combinations (Topic 805): Accounting for Contract Assets and ~~Amendments~~Contract Liabilities from Contracts with Customers.” The standard amends ASC 805 such that contract assets and contract liabilities acquired in a business combination are added to the list of exceptions to the recognition and measurement principles such that they are recognized and measured in accordance with ASC 606. As of January 1, 2022, we have elected to adopt this standard, and it will be applied prospectively to all business combinations occurring after this date.

On April 29, 2018, we entered into a Business Combination Agreement with Sprint and the other parties named therein (as amended, the “Business Combination Agreement”) for the Merger. The Business Combination Agreement was subsequently amended to provide that, following the closing of the Merger and the other transactions contemplated by the Business Combination Agreement (collectively, the “Transactions”), SoftBank Group Corp. (“SoftBank”) would indemnify us against certain specified matters and the loss of value arising out of, or resulting from, cessation of access to spectrum under certain circumstances and subject to certain limitations and qualifications.Accounting Pronouncements Not Yet Adopted

~~On February 20, 2020, T-Mobile, SoftBank~~Troubled Debt Restructurings and ~~Deutsche Telekom AG (“DT”) entered into a letter agreement (the “Letter Agreement”). Pursuant to~~Vintage Disclosures

In March 2022, the ~~Letter Agreement, SoftBank agreed to cause its applicable affiliates to surrender to T-Mobile,~~FASB issued 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 no additional consideration, an aggregate of 48,751,557 shares of T-Mobile common stock (such number of shares, the “SoftBank Specified Shares Amount”), effective immediately following the Effective Time (as defined in the Business Combination Agreement), making SoftBank’s exchange ratio 11.31 shares of Sprint common stocktroubled debt restructurings by creditors while enhancing disclosure requirements for each share of T-Mobile common stock. This resulted in an effective exchange ratio of approximately 11.00 shares of Sprint common stock for each share of T-Mobile common stock immediately following the closing of the Merger, an increase from the originally agreed 9.75certain loan refinancings and restructurings by

Index for Notes to the Condensed Consolidated Financial Statements

~~shares. Sprint stockholders other than SoftBank received~~creditors when a borrower is experiencing financial difficulty. Additionally, for public business entities, the ~~original fixed exchange ratio~~standard requires disclosure of ~~0.10256 shares~~current-period gross write-offs by year of ~~T-Mobile common stock~~origination for ~~each share~~financing receivables and net investments in leases within the scope of ~~Sprint common stock, or the equivalent~~ASC 326-20. The standard will become effective for us beginning January 1, 2023, and should be applied prospectively, with an option for modified retrospective application for provisions related to recognition and measurement of ~~approximately 9.75 shares of Sprint common stock~~troubled debt restructurings. Early adoption is permitted for ~~each share of T-Mobile common stock.~~

The Letter Agreement requires T-Mobile to issue to SoftBank 48,751,557 shares of T-Mobile common stock, subject to the terms and conditions set forth in the Letter Agreement, for no additional consideration, if certain conditions are met. The issuance of these shares is contingent on the trailing 45-day volume-weighted average price per share of T-Mobile common stock on the NASDAQ Global Select Market being equal to or greater than $150.00,us at any ~~time during the period commencing on April 1, 2022 and ending on December 31, 2025. If the threshold price is not met, then NaN of the SoftBank Specified Shares Amount will be issued.~~

~~Closing of Sprint Merger~~

On April 1, 2020, we completed the Merger, and as a result, Sprint and its subsidiaries became wholly owned consolidated subsidiaries of T-Mobile. Sprint was the fourth-largest telecommunications company in the U.S., offering a comprehensive range of wireless and wireline communication products and services. As a combined company, we expect to be able to rapidly launch a broad and deep nationwide 5G network, accelerate innovation, increase competition in the U.S. wireless and broadband industries and achieve significant synergies and cost reductions by eliminating redundancies within the combined network as well as other business processes and operations.

Upon completion of the Merger, each share of Sprint common stock was exchanged for 0.10256 shares of T-Mobile common stock, or 9.75 shares of Sprint common stock for each share of T-Mobile common stock. After adjustments, including the holdback of the SoftBank Specified Shares Amount and fractional shares, we issued 373,396,310 shares of T-Mobile common stock to Sprint stockholders. The fair value of the T-Mobile common stock provided in exchange for Sprint common stock was approximately $31.3 billion.

Additional components of consideration included the repayment of certain of Sprint’s debt, replacement of equity awards attributable to pre-combination services, contingent consideration and a cash payment received from SoftBank for certain reimbursed Merger expenses.

Immediately following the closing of the Merger and the surrender of the SoftBank Specified Shares Amount, pursuant to the Letter Agreement described above, DT and SoftBank held, directly or indirectly, approximately 43.6% and 24.7%, respectively, of the outstanding T-Mobile common stock, with the remaining approximately 31.7% of the outstanding T-Mobile common stock held by other stockholders.

~~Consideration Transferred~~

~~The acquisition-date fair value of consideration transferred in the Merger totaled $40.8 billion, comprised of the following:~~


~~(in millions)~~	~~April 1, 2020~~
~~Fair value of T-Mobile common stock issued to Sprint stockholders~~ ~~(1)~~	$	~~31,328~~
~~Fair value of T-Mobile replacement equity awards attributable to pre-combination service~~ ~~(2)~~	~~323~~
~~Repayment of Sprint’s debt (including accrued interest and prepayment penalties)~~ ~~(3)~~	~~7,396~~

~~Value of contingent consideration~~ ~~(4)~~	~~1,882~~
~~Payment received from selling stockholder~~ ~~(5)~~	~~(102)~~
~~Total consideration exchanged~~	$	~~40,827~~

(1) Represents the fair value of T-Mobile common stock issued to Sprint stockholders pursuant to the Business Combination Agreement, less shares surrendered by SoftBank pursuant to the Letter Agreement. The fair value is based on 373,396,310 shares of Sprint common stock issued and outstanding as of March 31, 2020, an exchange ratio of 0.10256 shares of T-Mobile common stock per share of Sprint common stock, less 48,751,557 T-Mobile shares surrendered by SoftBank whichtime. We are treated as contingent consideration, and the closing price per share of T-Mobile common stock on NASDAQ on March 31, 2020, of $83.90, as shares were transferred to Sprint stockholders prior to the opening of markets on April 1, 2020.

(2) Equity-based awards held by Sprint employees prior to the acquisition date have been replaced with T-Mobile equity-based awards. The portion of the equity-based awards that relates to services performed by the employee prior to the acquisition date is included within consideration transferred, and includes stock options, restricted stock units and performance-based restricted stock units.

(3) Represents the cash consideration paid concurrent with the close of the Merger to retire certain Sprint debt, as required by change in control provisions of the debt, plus interest and prepayment penalties.

~~(4) Represents the fair value of the SoftBank Specified Shares Amount contingent consideration that may be issued as set forth in the Letter Agreement.~~

~~(5) Represents receipt of a cash payment from SoftBank for certain expenses associated with the Merger.~~

The SoftBank Specified Shares Amount was determined to be contingent consideration with an acquisition-date fair value of $1.9 billion. We estimated the fair value using the income approach, a probability-weighted discounted cash flow model,

~~Index for Notes to the Condensed Consolidated Financial Statements~~

whereby a Monte Carlo simulation method estimated the probability of different outcomes as the likelihood of achieving the 45-day volume-weighted average price threshold is not easily predicted. 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: Fair Value Measurement. The key assumptions in applying the income approach include estimated future share-price volatility, which was based on historical market trends and estimated future performance of T-Mobile.

The maximum amount of contingent consideration that could be issued to SoftBank has an estimated value of $7.3 billion, based on SoftBank Specified Shares Amount of 48,751,557 multiplied by the defined volume-weighted average price per share of $150.00. The contingent consideration that could be delivered to SoftBank is classified within equity and is not subject to remeasurement.

~~Fair Value of Assets Acquired and Liabilities Assumed~~

We accounted for the Merger as a business combination. The identifiable assets acquired and liabilities assumed of Sprint were recorded at their fair values as of the acquisition date and consolidated with those of T-Mobile. Assigning fair market values to the assets acquired and liabilities assumed at the date of an acquisition requires the use of significant judgment regarding estimates and assumptions. For the fair values of the assets acquired and liabilities assumed, we used the cost, income and market approaches, including market participant assumptions.

The following table summarizes the fair values for each major class of assets acquired and liabilities assumed at the acquisition date. We retained the services of certified valuation specialists to assist with assigning values to certain acquired assets and assumed liabilities.


~~(in millions)~~	~~April 1, 2020~~
~~Cash and cash equivalents~~	$	~~2,084~~
~~Accounts receivable~~	~~1,775~~
~~Equipment installment plan receivables~~	~~1,088~~
~~Inventory~~	~~658~~
~~Prepaid expenses~~	~~140~~
~~Assets held for sale~~	~~1,908~~
~~Other current assets~~	~~637~~
~~Property and equipment~~	~~18,435~~
~~Operating lease right-of-use assets~~	~~6,583~~
~~Financing lease right-of-use assets~~	~~291~~
~~Goodwill~~	~~9,423~~
~~Spectrum licenses~~	~~45,400~~
~~Other intangible assets~~	~~6,280~~
~~Equipment installment plan receivables due after one year, net~~	~~247~~
~~Other assets~~ ~~(1)~~	~~540~~
~~Total assets acquired~~	~~95,489~~
~~Accounts payable and accrued liabilities~~	~~5,015~~
~~Short-term debt~~	~~2,760~~
~~Deferred revenue~~	~~508~~
~~Short-term operating lease liabilities~~	~~1,818~~
~~Short-term financing lease liabilities~~	8
~~Liabilities held for sale~~	~~475~~
~~Other current liabilities~~	~~681~~
~~Long-term debt~~	~~29,037~~
~~Tower obligations~~	~~950~~
~~Deferred tax liabilities~~	~~3,478~~
~~Operating lease liabilities~~	~~5,615~~
~~Financing lease liabilities~~	12

~~Other long-term liabilities~~	~~4,305~~
~~Total liabilities assumed~~	~~54,662~~

~~Total consideration transferred~~	$	~~40,827~~

~~(1) Included in Other assets acquired is $80 million in restricted cash.~~

~~Index for Notes to the Condensed Consolidated Financial Statements~~

Amounts previously disclosed for the estimated values of certain acquired assets and liabilities assumed have been adjusted based on additional information arising subsequent to the initial valuation. The measurement period adjustments we recognized during the three months ended March 31, 2021 did not have a significant impact on our Condensed Consolidated Statements of Comprehensive Income for the three months ended March 31, 2021.

~~Intangible Assets and Liabilities~~

Goodwill with an assigned value of $9.4 billion represents the excess of the consideration transferred over the fair values of assets acquired and liabilities assumed. The goodwill recognized includes synergies expected to be achieved from the operations of the combined company, the assembled workforce of Sprint and intangible assets that do not qualify for separate recognition. Expected synergies from the Merger include the cost savings from the planned integration of network infrastructure, facilities, personnel and systems. NaN of the goodwill resulting from the Merger is deductible for tax purposes. All of the goodwill acquired is allocated to the wireless reporting unit.

Other intangible assets include $4.9 billion of customer relationships with a weighted-average useful life of eight years and tradenames of $207 million with a useful life of two years. Leased spectrum arrangements that have favorable (asset) and unfavorable (liability) terms compared to current market rates were assigned fair values of $745 million and $125 million, respectively, with 18-year and 19-year weighted average useful lives, respectively.

The fair value of Spectrum licenses of $45.4 billion was estimated using the income approach, specifically a Greenfield model. 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: Fair Value Measurement. The key assumptions in applying the income approach include the discount rate, estimated market share, estimated capital and operating expenditures, forecasted service revenue and a long-term growth rate for a hypothetical market participant that enters the wireless industry and builds a nationwide wireless network.

~~Acquired Receivables~~

The fair value of the assets acquired includes Accounts receivable of $1.8 billion and Equipment installment plan (“EIP”) receivables of $1.3 billion. The unpaid principal balance under these contracts as of April 1, 2020, the date of the Merger, was $1.8 billion and $1.6 billion, respectively. The difference between the fair value and the unpaid principal balance primarily represents amounts expected to be uncollectible.

~~Indemnification Assets and Contingent Liabilities~~

Pursuant to Amendment No 2. to the Business Combination Agreement, SoftBank agreed to indemnify us against certain specified matters and losses. As of the acquisition date, we recorded a contingent liability and an offsetting indemnification asset for the expected reimbursement by SoftBank for certain Lifeline matters. The liability is presented in Accounts payable and accrued liabilities, and the indemnification asset is presented in Other current assets within our acquired assets and liabilities at the acquisition date. In November 2020, we entered into a consent decree with the FCC to resolve certain Lifeline matters, which resulted in a payment of $200 million by SoftBank. Final resolution of this matter 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 matters would be indemnified and reimbursed by SoftBank.

~~Deferred Taxes~~

As a result of the Merger, we acquired deferred tax assets for which a valuation allowance reserve is deemed to be necessary, as well as additional uncertain tax benefit reserves. The amount of the valuation allowance reserve and uncertain tax benefit reserves was $851 million and $660 million, respectively.

~~Transaction Costs~~

We recognized transaction costs of $13 million and $38 million for the three months ended March 31, 2021 and 2020, respectively. These costs were associated with legal and professional services and were recognized as Selling, general and administrative expenses in our Condensed Consolidated Statements of Comprehensive Income.

~~Index for Notes to the Condensed Consolidated Financial Statements~~

~~Pro Forma Information~~

The following unaudited pro forma financial information gives effect to the Transactions as if they had been completed on January 1, 2019. The unaudited pro forma information was prepared in accordance with the requirements of ASC 805: Business Combinations, which is a different basis than pro forma information prepared under Article 11 of Regulation S-X (“Article 11”). As such, they are not directly comparable with historical results for stand-alone T-Mobile prior to April 1, 2020, historical results for T-Mobile from April 1, 2020 that reflect the Transactions and are inclusive of the results and operations of Sprint, nor our previously provided pro forma financials prepared in accordance with Article 11. The pro forma results for the three months ended March 31, 2020 includecurrently evaluating the impact of ~~several significant nonrecurring pro forma adjustments to previously reported operating results. The pro forma adjustments are based~~the standard on ~~historically reported transactions by the respective companies. The pro forma results do not include any anticipated synergies or other expected benefits of the acquisition.~~

~~(in millions)~~

~~Three Months Ended March 31, 2020~~

~~Total revenues~~

~~17,408~~

~~Income from continuing operations~~

~~1,111~~

~~Income from discontinued operations, net of tax~~

~~357~~

~~Net income~~

~~1,468~~

~~Significant nonrecurring pro forma adjustments include:~~

•Transaction costs of $57 million that were incurred during the three months ended March 31, 2020 are assumed to have occurred on the pro forma close date of January 1, 2019, and are recognized as if incurred in the first quarter of 2019;

•The Prepaid Business divested on July 1, 2020, is assumed to have been classified as discontinued operations as of January 1, 2019, and the related activities are presented in Income from discontinued operations, net of tax;

•Permanent financing issued and debt redemptions occurring in connection with the closing of the Merger are assumed to have occurred on January 1, 2019, and historical interest expense associated with repaid borrowings is removed;

•~~Tangible and intangible assets are assumed to be recorded at their estimated fair values as of January 1, 2019 and are depreciated or amortized over their estimated useful lives; and~~

•Accounting policies of Sprint are conformed to those of T-Mobile including depreciation for leased devices, Brightstar distribution, amortization of costs to acquire a contract and certain tower lease transactions.

The selected unaudited pro forma condensed combined financial information is provided for illustrative purposes only and does not purport to represent what the actual consolidated results of operations would have been had the Transactions actually occurred on January 1, 2019, nor do they purport to project theour future consolidated ~~results of operations.~~

~~Regulatory Matters~~

The Transactions were the subject of various legal and regulatory proceedings involving a number of state and federal agencies. In connection with those proceedings and the approval of the Transactions, we have certain commitments and other obligations to various state and federal agencies and certain nongovernmental organizations. See ~~Note 1~~1 ~~- Commitments and Contingencies~~ ~~for further information.~~

~~Shenandoah Personal Communications Company Affiliate Relationship~~

Sprint PCS (specifically Sprint Spectrum L.P.) is party to a variety of publicly filed agreements with Shenandoah Personal Communications Company LLC (“Shentel”), pursuant to which Shentel is the exclusive provider of Sprint PCS’s wireless mobility communications network products in certain parts of Maryland, North Carolina, Virginia, West Virginia, Kentucky, Ohio and Pennsylvania. Pursuant to one such agreement, the Sprint PCS Management Agreement, dated November 5, 1999 (as amended, supplemented and modified from time to time, the “Management Agreement”), Sprint PCS was granted an option to purchase Shentel’s wireless telecommunications assets used to provide services pursuant to the Management Agreement. On August 26, 2020, Sprint, now our direct subsidiary, on behalf of and as the direct or indirect owner of Sprint PCS, exercised its option by delivering a binding notice of exercise to Shentel. The exercise of this option triggered a requirement for the parties to engage three independent valuation providers to calculate the “entire business value” (the “Entire Business Value”) of such wireless telecommunications assets, pursuant to a formula and valuation process prescribed in the Management Agreement.

~~Index for Notes to the Condensed Consolidated Financial Statements~~

On February 1, 2021, in accordance with the Management Agreement and other agreed-upon terms, the Entire Business Value of Shentel’s wireless telecommunication assets used to provide services pursuant to the Management Agreement was determined to be $2.1 billion, and correspondingly, the base purchase price for such wireless telecommunication assets shall be ninety percent (90%) of that Entire Business Value amount ($1.9 billion), subject to certain other purchase price adjustments prescribed by the Management Agreement and such additional purchase price adjustments agreed by the parties. The parties are negotiating the remaining outstanding terms of a definitive agreement to govern the purchase of Shentel’s wireless telecommunication assets and expect the transaction to close in the third quarter of 2021 after satisfying customary conditions to closing.financial statements.

Note 32 – Receivables and ~~Expected~~Related Allowance for Credit Losses

We maintain an allowance for credit losses by applying an expected credit ~~losses that assesses the lifetime credit losses that we expect to incur related to our receivable portfolio segments.~~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 period end.

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 2 portfolio segments: accounts receivable and ~~EIP~~equipment installment plan (“EIP”) receivables.

Accounts Receivable Portfolio Segment

~~Our accounts~~Accounts receivable ~~segment primarily consists~~balances are predominately composed of amounts currently due from customers ~~including service~~(e.g., for wireless services and ~~leased~~monthly device ~~receivables,~~lease payments), device insurance administrators, wholesale partners, non-consolidated affiliates, other carriers and third-party retail ~~channels and other carriers.~~channels.

We estimate ~~expected~~ credit losses associated with our accounts receivable portfolio segment using an expected credit loss model, which utilizes an aging schedule methodology ~~that utilizes~~based on historical information and adjusted for asset-specific considerations, current economic conditions ~~to develop expected credit losses by aging bucket, including for receivables that are not past due.~~and reasonable and supportable forecasts.

~~To determine the appropriate credit loss percentages by aging bucket, we consider~~Our approach considers a number of factors, including our overall historical credit losses, net of recoveries, and timely payment experience, as well as current collection trends such as write-off frequency and ~~severity, credit quality of the customer base, and~~severity. We also consider other qualitative factors such as macro-economic ~~conditions, including the expected economic impacts of the COVID-19 pandemic (the “Pandemic”).~~conditions.

We consider the need to adjust our estimate of ~~expected~~ credit losses for reasonable and supportable forecasts of future economic conditions. To do so, we monitor ~~professional~~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 economic 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 2 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.~~purchases if their assessed credit risk exceeds established underwriting thresholds. In addition, certain customers within the Subprime category ~~are~~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 using several factors, such as credit bureau information, consumer credit risk scores and service and device plan characteristics.

~~Installment loans acquired in the Merger are included in~~ EIP ~~receivables. We applied our proprietary credit scoring model to the customers acquired in the Merger with an outstanding EIP receivable balance. Based on tenure, consumer credit risk score~~receivables had a combined weighted-average effective interest rate of 5.7% and ~~credit profile, these acquired customers were classified into our customer classes~~5.6% as of ~~Prime or Subprime. Our proprietary credit scoring model is applied to all EIP arrangements originated after the Merger close date.~~March 31, 2022 and December 31, 2021, respectively.

139

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,
2021 December 31,
2020
EIP receivables, gross $ 6,698 $ 6,213
Unamortized imputed discount (356) (325)
EIP receivables, net of unamortized imputed discount 6,342 5,888
Allowance for credit losses (280) (280)
EIP receivables, net of allowance for credit losses and imputed discount $ 6,062 $ 5,608
Classified on the balance sheet as:
Equipment installment plan receivables, net of allowance for credit losses and imputed discount $ 3,841 $ 3,577
Equipment installment plan receivables due after one year, net of allowance for credit losses and imputed discount 2,221 2,031
EIP receivables, net of allowance for credit losses and imputed discount $ 6,062 $ 5,608


(in millions)	March 31, 2022		December 31, 2021


EIP receivables, gross	$	8,547	$	8,207
Unamortized imputed discount	(381)		(378)

EIP receivables, net of unamortized imputed discount	8,166		7,829
Allowance for credit losses	(268)		(252)

EIP receivables, net of allowance for credit losses and imputed discount	$	7,898	$	7,577
Classified on the condensed consolidated balance sheets as:
Equipment installment plan receivables, net of allowance for credit losses and imputed discount	$	5,061	$	4,748
Equipment installment plan receivables due after one year, net of allowance for credit losses and imputed discount	2,837		2,829

EIP receivables, net of allowance for credit losses and imputed discount	$	7,898	$	7,577

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, ~~2021:~~2022:


		Originated in 2021				Originated in 2020				Originated prior to 2020				Total EIP Receivables, net of unamortized imputed discounts							Originated in 2022				Originated in 2021				Originated prior to 2021				Total EIP Receivables, net of unamortized imputed discounts
(in millions)	(in millions)	Prime		Subprime		Prime		Subprime		Prime		Subprime		Prime		Subprime		Grand total		(in millions)	Prime		Subprime		Prime		Subprime		Prime		Subprime		Prime		Subprime		Grand total
Current - 30 days past due	Current - 30 days past due	$	1,180	$	1,005	$	1,999	$	1,455	$	383	$	225	$	3,562	$	2,685	$	6,247	Current - 30 days past due	$	1,434	$	1,053	$	2,895	$	1,736	$	602	$	294	$	4,931	$	3,083	$	8,014
31 - 60 days past due	31 - 60 days past due	5		5		13		20		3		5		21		30		51		31 - 60 days past due	8		8		25		33		5		6		38		47		85
61 - 90 days past due	61 - 90 days past due	0		1		5		10		2		2		7		13		20		61 - 90 days past due	1		1		9		15		2		3		12		19		31
More than 90 days past due	More than 90 days past due	0		0		5		11		2		6		7		17		24		More than 90 days past due	—		1		9		16		3		7		12		24		36
EIP receivables, net of unamortized imputed discount	EIP receivables, net of unamortized imputed discount	$	1,185	$	1,011	$	2,022	$	1,496	$	390	$	238	$	3,597	$	2,745	$	6,342	EIP receivables, net of unamortized imputed discount	$	1,443	$	1,063	$	2,938	$	1,800	$	612	$	310	$	4,993	$	3,173	$	8,166

We estimate ~~expected~~ credit losses on our EIP receivables segment by ~~using~~applying an expected credit loss model, which relies on historical loss data adjusted for current conditions to calculate default probabilities or an estimate for ~~our outstanding EIP loans. We consider various risk characteristics when calculating~~the frequency of customer default. Our assessment of default probabilities ~~such as~~includes receivables delinquency status, historical loss experience, how long ~~such loans~~the receivables have been outstanding and customer credit ratings, as well as customer ~~tenure, delinquency status and other correlated variables identified through statistical analyses.~~tenure. We multiply these estimated default probabilities by our estimated loss given default, which ~~considers~~is the estimated amount or severity of the default loss after adjusting for estimated recoveries.

As we do for our accounts receivable portfolio segment, we consider the need to adjust our estimate of ~~expected~~credit losses on EIP receivables for reasonable and supportable forecasts of economic conditions through monitoring external ~~professional~~ forecasts and periodic internal statistical ~~analyses, including the expected economic impacts of the Pandemic.~~analyses.

For EIP receivables acquired in the Merger, the difference between the fair value and unpaid principal balance of the loan at the acquisition date is accreted to interest income over the contractual life of the loan using the effective interest method. EIP receivables had a combined weighted average effective interest rate of 6.7% as of both March 31, 2021 and December 31, 2020.

~~Index for Notes to the Condensed Consolidated Financial Statements~~

Activity for the three months ended March 31, ~~2021~~2022 and ~~2020,~~2021, in the allowance for credit losses and unamortized imputed discount balances for the accounts receivable and EIP receivables segments were as follows:

March 31, 2021 March 31, 2020
(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 $ 194 $ 605 $ 799 $ 61 $ 399 $ 460
Beginning balance adjustment due to implementation of the new credit loss standard 0 0 0 0 91 91
Bad debt expense 28 54 82 42 71 113
Write-offs, net of recoveries (79) (54) (133) (34) (61) (95)
Change in imputed discount on short-term and long-term EIP receivables N/A 66 66 N/A 5 5
Impact on the imputed discount from sales of EIP receivables N/A (35) (35) N/A (36) (36)
Allowance for credit losses and imputed discount, end of period $ 143 $ 636 $ 779 $ 69 $ 469 $ 538


	March 31, 2022						March 31, 2021
(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	$	146	$	630	$	776	$	194	$	605	$	799


Bad debt expense	96		114		210		28		54		82
Write-offs, net of recoveries	(78)		(99)		(177)		(79)		(54)		(133)
Change in imputed discount on short-term and long-term EIP receivables	N/A		30		30		N/A		66		66
Impact on the imputed discount from sales of EIP receivables	N/A		(26)		(26)		N/A		(35)		(35)

Allowance for credit losses and imputed discount, end of period	$	164	$	649	$	813	$	143	$	636	$	779

Index for Notes to the Condensed Consolidated Financial Statements

Off-Balance-Sheet Credit Exposures

We do not have material, unmitigated off-balance-sheet credit exposures as of March 31, ~~2021.~~2022. In connection with the sales of certain service and EIP accounts receivable pursuant to the sale arrangements, we have deferred purchase price assets included inon 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 43 – Sales of Certain Receivables for further information.

Note 43 – Sales of Certain Receivables

We ~~have entered~~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”). The maximum funding commitment of the sale arrangement is $1.3 billion. The scheduled expiration date of the EIP sale arrangement is November 18, 2021.

On April 30, 2020, we agreed with the purchaser banks to update our collection policies to temporarily allow for flexibility for modifications to the EIP receivables sold that are impacted by the Pandemic and exclusion of such EIP receivables from all pool performance triggers.

As of both March 31, ~~2021~~2022 and December 31, ~~2020,~~2021, the EIP sale arrangement provided funding of $1.3 billion. ~~Sales of EIP receivables occur daily and are settled on a monthly basis.~~

In connection with this EIP sale arrangement, we formed a wholly owned subsidiary, which qualifies as a bankruptcy remote entity (the “EIP BRE”). ~~Pursuant to~~We consolidate the EIP ~~sale arrangement, our wholly owned subsidiary transfers selected receivables to~~BRE under the EIP BRE. The EIP BRE then sells the receivables to a non-consolidated and unaffiliated third-party entity over which we do not exercise any level of control, nor does the third-party entity qualify as a VIE.VIE model.

~~Index for Notes to the Condensed Consolidated Financial Statements~~

~~Variable Interest Entity~~

We determined that the EIP BRE is a VIE as its equity investment at risk lacks the obligation to absorb a certain portion of its expected losses. We have a variable interest in the EIP BRE and have determined that we are the primary beneficiary based on our ability to direct the activities which most significantly impact the EIP BRE’s economic performance. Those activities include selecting which receivables are transferred into the EIP BRE and sold in the EIP sale arrangement and funding of the EIP BRE. Additionally, our equity interest in the EIP BRE obligates us to absorb losses and gives us the right to receive benefits from the EIP BRE that could potentially be significant to the EIP BRE. Accordingly, we include the balances and results of operations of the EIP BRE in our condensed consolidated financial statements.

The following table summarizes the carrying amounts and classification of assets, which consist primarily of the deferred purchase price, and liabilities included inon our Condensed Consolidated Balance Sheets with respect to the EIP BRE:

(in millions) March 31,
2021 December 31,
2020
Other current assets $ 390 $ 388
Other assets 113 120
Other long-term liabilities 4 4

In addition, the EIP BRE is a separate legal entity with its own separate creditors who will be entitled, prior to any liquidation of the EIP BRE, to be satisfied prior to any value in the EIP BRE becoming available to us. Accordingly, the assets of the EIP BRE may not be used to settle our general obligations and creditors of the EIP BRE have limited recourse to our general credit.


(in millions)	March 31, 2022		December 31, 2021
Other current assets	$	382	$	424
Other assets	108		125
Other long-term liabilities	2		—

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”).~~ The maximum funding commitment of the service receivable sale arrangement is $950 million and the facility expires in ~~March 2022.~~February 2023. As of both March 31, ~~2021~~2022 and December 31, ~~2020,~~2021, the service receivable sale arrangement provided funding of $775 million and $772 million, respectively. Sales of receivables occur daily and are settled on a monthly basis. The receivables consist of service charges currently due from customers and are short-term in nature.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”). ~~In March 2021, we amended~~We consolidate the sale arrangement to conform its structure to the EIP sale arrangement (the “March 2021 Amendment”). This involved, among other things, removal of an unaffiliated special purpose entity that we did not consolidateService BRE under the original structure and changes in contractual counterparties. While the amendment simplified the structure of the arrangement making it more efficient, it did not impact the maximum funding commitment under, or the level of funding provided by, the facility.VIE model.

Pursuant to the amended service receivable sale arrangement, our wholly owned subsidiary transfers selected receivables to the Service BRE. The Service BRE then sells the receivables to a non-consolidated and unaffiliated third-party entity over which we do not exercise any level of control and which does not qualify as a VIE.

~~Variable Interest Entity~~

~~Prior to the March 2021 Amendment, the Service BRE did not qualify as a VIE, but due to the significant level of control we exercised over the entity, it was consolidated.~~

The March 2021 Amendment to the service receivable sale arrangement triggered a VIE reassessment, and we determined that the Service BRE now qualifies as a VIE. We have a variable interest in the Service BRE and have determined that we are the primary beneficiary based on our ability to direct the activities that most significantly impact the Service BRE’s economic performance. Those activities include selecting which receivables are transferred into the Service BRE and sold in the service receivable sale arrangement and funding the Service BRE. Additionally, our equity interest in the Service BRE obligates us to absorb losses and gives us the right to receive benefits from the Service BRE that could potentially be significant to the Service BRE. Accordingly, we include the balances and results of operations of the Service BRE in our condensed consolidated financial statements.

~~Index for Notes to the Condensed Consolidated Financial Statements~~

(in millions) March 31,
2021 December 31,
2020
Other current assets $ 268 $ 378
Other current liabilities 248 357


(in millions)	March 31, 2022		December 31, 2021
Other current assets	$	231	$	231

Other current liabilities	317		348

~~In addition,~~

Index for Notes to the Service BRE is a separate legal entity with its own separate creditors who will be entitled, prior to any liquidation of the Service BRE, to be satisfied prior to any value in the Service BRE becoming available to us. Accordingly, the assets of the Service BRE may not be used to settle our general obligations, and creditors of the Service BRE have limited recourse to our general credit.

Condensed Consolidated Financial Statements

Sales of Receivables

The ~~transfers~~following table summarizes the impact of the sale of certain service receivables and EIP receivables to the non-consolidated entities are accounted for as sales of financial assets. Once identified for sale, the receivable is recorded at the lower of cost or fair value. Upon sale, we derecognize the net carrying amount of the receivables.on our Condensed Consolidated Balance Sheets:


(in millions)	March 31, 2022		December 31, 2021
Derecognized net service receivables and EIP receivables	$	2,480	$	2,492
Other current assets	613		655
of which, deferred purchase price	611		654
Other long-term assets	108		125
of which, deferred purchase price	108		125

Other current liabilities	317		348
Other long-term liabilities	2		—
Net cash proceeds since inception	1,750		1,754
Of which:
Change in net cash proceeds during the year-to-date period	(4)		39
Net cash proceeds funded by reinvested collections	1,754		1,715

We recognize the cash proceeds received upon sale in Net cash provided by operating activities in our Condensed Consolidated Statements of Cash Flows. We recognize proceeds net of the deferred purchase price, consisting of a receivable from the purchasers that entitles us to certain collections on the receivables. We recognize the collection of the deferred purchase price in Net cash used in investing activities in our Condensed Consolidated Statements of Cash Flows as Proceeds related to beneficial interests in securitization transactions.

The deferred purchase price represents a financial asset that is primarily tied to the creditworthiness of the customers and which can be settled in such a way that we may not recover substantially all of our recorded investment, due to default by the customers on the underlying receivables. 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 inon 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 customer default rates. As of March 31, ~~2021~~2022 and December 31, ~~2020,~~2021, our deferred purchase price related to the sales of service receivables and EIP receivables was ~~$769~~$719 million and ~~$884~~$779 million, respectively.

~~The following table summarizes the impact of the sale of certain service receivables and EIP receivables in our Condensed Consolidated Balance Sheets:~~

(in millions) March 31,
2021 December 31,
2020
Derecognized net service receivables and EIP receivables $ 2,537 $ 2,528
Other current assets 658 766
of which, deferred purchase price 656 764
Other long-term assets 113 120
of which, deferred purchase price 113 120
Other current liabilities 248 357
Other long-term liabilities 4 4
Net cash proceeds since inception 1,737 1,715
Of which:
Change in net cash proceeds during the year-to-date period 22 (229)
Net cash proceeds funded by reinvested collections 1,715 1,944

We recognized a ~~gain~~loss from sales of receivables, including ~~adjustments to the receivables’ fair values and~~ changes in fair value of the deferred purchase price, of ~~$18~~$46 million and a ~~loss from sales~~gain of ~~receivables of $25~~$18 million for the three months ended March 31, ~~2021~~2022 and ~~2020,~~2021, respectively, in Selling, general and administrative expense inon our Condensed Consolidated Statements of Comprehensive Income.

~~Index for Notes to the Condensed Consolidated Financial Statements~~

Continuing Involvement

Pursuant to the sale arrangements described above, we have continuing involvement with the service receivables and EIP receivables we sell as we service the receivables, are required to repurchase certain receivables, including ineligible receivables, aged receivables and receivables where 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. Pursuant to the EIP sale arrangement, under certain circumstances, we are required to deposit cash or replacement EIP receivables primarily for contracts terminated by customers under our JUMP! program.

Note 54 – ~~Goodwill,~~ Spectrum License Transactions ~~and Other Intangible Assets~~

~~Goodwill~~

~~The changes in the carrying amount of goodwill for the three months ended March 31, 2021 and year ended December 31, 2020, are as follows:~~


~~(in millions)~~	~~Goodwill~~

~~Historical goodwill, net of accumulated impairment losses of $10,766~~	$	~~1,930~~
~~Goodwill from acquisitions in 2020~~	~~9,405~~
~~Layer3 goodwill impairment~~	~~(218)~~
~~Balance as of December 31, 2020~~	~~11,117~~

~~Purchase price adjustment of goodwill from acquisitions in 2020~~	22
~~Goodwill from acquisitions in 2021~~	19

~~Balance as of March 31, 2021~~	$	~~11,158~~
~~Accumulated impairment losses at March 31, 2021~~	$	~~(10,984)~~

On April 1, 2020, we completed our Merger with Sprint, which was accounted for as a business combination resulting in $9.4 billion in goodwill. The acquired goodwill was allocated to the wireless reporting unit and will be tested for impairment at this level. See ~~Note 2 - Business Combination~~ ~~for further information.~~

~~Intangible Assets~~

~~Identifiable Intangible Assets Acquired~~

~~The following table summarizes the fair value of the intangible assets acquired in the Merger:~~


	~~Weighted Average Useful Life (in years)~~	Fair Value as of April 1, 2020 (in millions)
~~Spectrum licenses~~	~~Indefinite-lived~~	$	~~45,400~~
~~Tradenames~~ ~~(1)~~	~~2 years~~	~~207~~
~~Customer relationships~~	~~8 years~~	~~4,900~~
~~Favorable spectrum leases~~	~~18 years~~	~~745~~
~~Other intangible assets~~	~~7 years~~	~~428~~
~~Total intangible assets acquired~~		$	~~51,680~~

~~(1) Tradenames include the Sprint brand.~~

Spectrum licenses are issued for a fixed period of time, typically up to 15 years; however, the FCC has granted license renewals routinely and at a nominal cost. The spectrum licenses acquired expire at various dates and we believe we will be able to meet all requirements necessary to secure renewal of our spectrum licenses at a nominal cost. Moreover, we determined that there are currently no legal, regulatory, contractual, competitive, economic or other factors that limit the useful lives of our spectrum licenses. Therefore, we determined the spectrum licenses should be treated as indefinite-lived intangible assets. The fair value of spectrum licenses includes the value associated with aggregating a nationwide portfolio of owned and leased spectrum.

~~Index for Notes to the Condensed Consolidated Financial Statements~~

Favorable spectrum leases represent a contract where the market rate is higher than the future contractual lease payments. We lease this spectrum from third parties who hold the spectrum licenses. As these contracts pertain to intangible assets, they are excluded from the lease accounting guidance (ASC 842) and are accounted for as service contracts in which the expense is recognized on a straight-line basis over the lease team. Favorable spectrum leases of $745 million were recorded as an intangible asset as a result of purchase accounting and are amortized on a straight-line basis over the associated remaining lease term. Additionally, we recognized unfavorable spectrum lease liabilities of $125 million, which are also amortized over their respective remaining lease terms and are included in Other liabilities in our Condensed Consolidated Balance Sheets.

The customer relationship intangible assets represent the value associated with the acquired Sprint customers. The customer relationship intangible assets are amortized using the sum-of-the-years’ digits method over periods of up to eight years.

~~Other intangible assets are amortized over the remaining period that the asset is expected to provide benefit to us.~~

~~Spectrum Licenses~~

The following table summarizes our spectrum license activity for the three months ended March 31, ~~2021:~~

2022:

(in millions)

~~2021~~2022

Spectrum licenses, beginning of year

~~82,828~~92,606

Spectrum license acquisitions

7255

~~Costs to clear spectrum~~

Spectrum licenses, end of period

~~82,901~~92,661

In ~~March 2021,~~January 2022, the ~~Federal Communications Commission (“FCC”),~~FCC announced that we were the winning bidder of ~~142~~199 licenses in Auction ~~107 (C-band~~110 (mid-band spectrum) for an aggregate purchase price of ~~$9.3 billion, excluding relocation costs.~~$2.9 billion. At ~~the~~ inception of Auction ~~107~~110 in ~~October 2020,~~September 2021, we deposited ~~$438~~$100 million. ~~Upon conclusion of Auction 107 in March 2021, we~~We paid the FCC the remaining ~~$8.9~~$2.8 billion for the licenses won in the ~~auction. We expect to incur an additional $1.2 billion~~auction in ~~relocation costs which will be paid through 2024.~~February 2022.

The aggregate cash payments made to the FCC are included in Other assets as of March 31, ~~2021~~2022 in our Condensed Consolidated Balance Sheets, 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.~~completed, which we expect to occur in mid-2022. 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 in our Condensed Consolidated Statements of Cash Flows for the three months ended March 31, ~~2021.~~

~~Other Intangible Assets~~

~~The components of Other intangible assets were as follows:~~

Useful Lives March 31, 2021 December 31, 2020
(in millions) Gross Amount Accumulated Amortization Net Amount Gross Amount Accumulated Amortization Net Amount
Customer relationships Up to 8 years $ 4,903 $ (1,153) $ 3,750 $ 4,900 $ (865) $ 4,035
Tradenames and patents Up to 19 years 603 (461) 142 598 (412) 186
Favorable spectrum leases Up to 27 years 741 (44) 697 790 (35) 755
Other Up to 10 years 377 (74) 303 377 (55) 322
Other intangible assets $ 6,624 $ (1,732) $ 4,892 $ 6,665 $ (1,367) $ 5,298

~~Amortization expense for intangible assets subject to amortization was $366 million and $25 million for the three months ended March 31, 2021 and 2020, respectively.~~

2022.

1912

Index for Notes to the Condensed Consolidated Financial Statements

~~The estimated aggregate future amortization expense for intangible assets subject to amortization are summarized below:~~

(in millions) Estimated Future Amortization
Twelve Months Ending March 31,
2022 $ 1,154
2023 941
2024 785
2025 627
2026 468
Thereafter 917
Total $ 4,892

~~Substantially all of the estimated future amortization expense is associated with intangible assets acquired in the Merger.~~

Note 65 – Fair Value Measurements

The carrying values of Cash and cash equivalents, Accounts receivable ~~Accounts receivable from affiliates,~~and Accounts payable and accrued liabilities ~~and borrowings under vendor financing arrangements with our primary network equipment suppliers~~ approximate fair value due to the short-term maturities of these instruments.

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 (cash flow hedge) to help minimize significant, unplanned fluctuations in cash flows caused by interest rate volatility. We do not use derivatives for trading or speculative purposes.

~~Interest Rate Lock Derivatives~~

In October 2018, we entered into interest rate lock derivatives with notional amounts of $9.6 billion. In November 2019, we extended the mandatory termination date on our interest rate lock derivatives to June 3, 2020. For the three months ended March 31, 2020, we made net collateral transfers to certain of our derivative counterparties totaling $580 million, which included variation margin transfers to (or from) such derivative counterparties based on daily market movements. No amounts were transferred to the derivative counterparties subsequent to March 31, 2020. These collateral transfers are included in~~Net cash related to derivative contracts under collateral exchange arrangements within Net cash used in investing activities in our Condensed Consolidated Statements of Cash Flows.~~

We recorded interest rate lock derivatives on our Condensed Consolidated Balance Sheets at fair value that was derived primarily from observable market data, including yield curves. Interest rate lock derivatives were classified as Level 2 in the fair value hierarchy. Cash flows associated with qualifying hedge derivative instruments are presented in the same category on the Condensed Consolidated Statements of Cash Flows as the item being hedged. We did not have any significant derivative instruments outstanding as of March 31, 2022 and December 31, 2021.

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 ~~$1.6~~$1.4 billion and $1.5 billion are presented in Accumulated other comprehensive loss on our Condensed Consolidated Balance Sheets as of ~~both~~ March 31, ~~2021~~2022 and December 31, ~~2020.~~

Between April 2 and April 6, 2020, in connection with the issuance of an aggregate of $19.0 billion of Senior Secured Notes bearing interest rates ranging from 3.500% to 4.500% and maturing in 2025 through 2050, we terminated our interest rate lock derivatives.2021, respectively.

Upon the issuance of debt to which the hedged interest rate risk related, we began amortizing the Accumulated other comprehensive loss with the derivatives into Interest expense in a manner consistent with how the hedged interest payments affect earnings. For the three months ended March 31, 2022 and 2021, $50 million and $46 million, ~~was~~respectively, were amortized from Accumulated other comprehensive loss into Interest expense, net in the Condensed Consolidated Statements of Comprehensive Income. ~~NaN amounts were amortized into Interest expense for the three months ended March 31, 2020.~~ We expect to amortize ~~$192~~$207 million of the Accumulated other comprehensive loss associated with the derivatives into Interest expense, net over the ~~next~~ 12 ~~months.~~months ended March 31, 2023.

~~Index for Notes to the Condensed Consolidated Financial Statements~~

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 43 – 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 inon our Condensed Consolidated Balance Sheets, were ~~$769~~$719 million and ~~$884~~$779 million atas of March 31, ~~2021~~2022 and December 31, ~~2020,~~2021, respectively. Fair value was equal to the carrying amount at March 31, ~~2021~~2022 and December 31, ~~2020.~~2021.

Debt

The fair value of our Senior ~~Unsecured~~ Notes and 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.

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, ~~2021~~2022 and December 31, ~~2020.~~2021. As such, our estimates are not necessarily indicative of the amount we could realize in a current market exchange.

Index for Notes to the Condensed Consolidated Financial Statements

The carrying amounts and fair values of our short-term and long-term debt included inon our Condensed Consolidated Balance Sheets were as follows:

Level within the Fair Value Hierarchy March 31, 2021 December 31, 2020
(in millions)
Carrying Amount (1)
Fair Value (1)
Carrying Amount (1)
Fair Value (1)
Liabilities:
Senior Unsecured Notes to third parties 1 $ 34,648 $ 36,563 $ 29,966 $ 32,450
Senior Notes to affiliates 2 4,721 4,941 4,716 4,991
Senior Secured Notes to third parties 1 35,983 37,821 36,204 40,519


	Level within the Fair Value Hierarchy	March 31, 2022				December 31, 2021
(in millions)		Carrying Amount (1)		Fair Value (1)		Carrying Amount (1)		Fair Value (1)
Liabilities:
Senior Notes to third parties	1	$	29,720	$	29,682	$	30,309	$	32,093
Senior Notes to affiliates	2	2,744		2,774		3,739		3,844
Senior Secured Notes to third parties	1	39,964		38,274		40,098		42,393

(1) Excludes ~~$186~~$42 million and ~~$240~~$47 million as of March 31, ~~2021~~2022 and December 31, ~~2020,~~2021, respectively, in ~~vendor financing arrangements and~~ other ~~debt~~financial liabilities as the carrying values approximate fair value primarily due to the short-term maturities of these instruments.

Note 76 – Debt

The following table sets forth the debt balances and activity as of, and for the three months ended, March 31, ~~2021~~2022:


(in millions)	(in millions)	December 31, 2020		Proceeds from Issuances and Borrowings (1)		Note Redemptions (1)		Repayments		Reclassifications (1)		Other (2)		March 31, 2021		(in millions)	December 31, 2021		Note Redemptions (1)		Repayments		Reclassifications (1)		Other (2)		March 31, 2022
Short-term debt	Short-term debt	$	4,579	$	0	$	0	$	(274)	$	144	$	(26)	$	4,423	Short-term debt	$	3,378	$	(500)	$	(132)	$	132	$	(13)	$	2,865
Long-term debt	Long-term debt	61,830		6,758		(1,964)		0		(144)		(85)		66,395		Long-term debt	67,076		—		—		(132)		(83)		66,861
Total debt to third parties	Total debt to third parties	66,409		6,758		(1,964)		(274)		0		(111)		70,818		Total debt to third parties	70,454		(500)		(132)		—		(96)		69,726

Short-term debt to affiliates																Short-term debt to affiliates	2,245		(1,000)		—		—		5		1,250
Long-term debt to affiliates	Long-term debt to affiliates	4,716		0		0		0		0		5		4,721		Long-term debt to affiliates	1,494		—		—		—		—		1,494
Total debt	Total debt	$	71,125	$	6,758	$	(1,964)	$	(274)	$	0	$	(106)	$	75,539	Total debt	$	74,193	$	(1,500)	$	(132)	$	—	$	(91)	$	72,470

(1)~~Issuances and borrowings, note~~Note redemptions and reclassifications are recorded net of related 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 ~~4.3%~~3.9% and ~~5.2%~~4.3% for the three months ended March 31, ~~2021~~2022 and ~~2020,~~2021, respectively, on ~~weighted average~~weighted-average debt outstanding of $73.7 billion ~~and $25.0 billion~~ for both the three months ended March 31, ~~2021~~2022 and ~~2020, respectively.~~2021. The ~~weighted average~~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.

~~Index for Notes to the Condensed Consolidated Financial Statements~~

~~Issuances~~Note Redemptions and ~~Borrowings~~Repayments

During the three months ended March 31, ~~2021,~~2022, we ~~issued~~made the following ~~Senior Notes:~~note redemptions and repayments:

(in millions) Principal Issuances Issuance Costs Net Proceeds from Issuance of Long-Term Debt Issue Date
2.250% Senior Notes due 2026 $ 1,000 $ (7) $ 993 January 14, 2021
2.625% Senior Notes due 2029 1,000 (7) 993 January 14, 2021
2.875% Senior Notes due 2031 1,000 (7) 993 January 14, 2021
2.625% Senior Notes due 2026 1,200 (7) 1,193 March 23, 2021
3.375% Senior Notes due 2029 1,250 (7) 1,243 March 23, 2021
3.500% Senior Notes due 2031 1,350 (7) 1,343 March 23, 2021
Total of Senior Notes issued $ 6,800 $ (42) $ 6,758


(in millions)	Principal Amount		Redemption or Repayment Date	Redemption Price
4.000% Senior Notes due 2022	$	500	March 16, 2022	100.000	%







4.000% Senior Notes to affiliates due 2022	1,000		March 16, 2022	100.000	%

Total Redemptions	$	1,500


4.738% Secured Series 2018-1 A-1 Notes due 2025	$	131	Various	N/A
Other debt	1		Various	N/A
Total Repayments	$	132

~~Credit Facilities~~

~~On October 30, 2020,~~Subsequent to March 31, 2022, on April 15, 2022, we entered into a $5.0 billion senior secured term loan commitment with certain financial institutions. On January 14, 2021, we issued an aggregate of $3.0 billion of Senior Notes. A portion of the senior secured term loan commitment was reduced by an amount equal to the aggregate gross proceeds of the Senior Notes, which reduced the commitment to $2.0 billion. On March 23, 2021, we issued an aggregate of $3.8 billion of Senior Notes. The senior secured term loan commitment was terminated upon the issuance of the $3.8 billion of Senior Notes.

~~Senior Notes~~

~~On January 14, 2021, we issued $1.0 billion of 2.250% Senior Notes due 2026, $1.0 billion of 2.625% Senior Notes due 2029, and $1.0 billion of 2.875% Senior Notes due 2031.~~

~~On March 23, 2021, we issued $1.2 billion of 2.625% Senior Notes due 2026,~~repaid at maturity $1.25 billion of ~~3.375%~~our 5.375% Senior Notes to affiliates due ~~2029, and $1.35 billion of 3.500% Senior Notes due 2031.~~

~~Note Redemption~~

On March 27, 2021, we redeemed $2.0 billion aggregate principal amount of our 6.500% Senior Notes due 2026. The notes were redeemed at a redemption price equal to 103.250% of the principal amount of the notes (plus accrued and unpaid interest thereon), and were paid on March 26, 2021. The redemption premium was $65 million and the write off of issuance costs and consent fees was approximately $36 million, which was included in Other expense, net in our Condensed Consolidated Statements of Comprehensive Income and Losses on redemption of debt in our Condensed Consolidated Statements of Cash Flows.

~~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.~~2022.

Note 87 – 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 (the “2012 Tower Transaction”).~~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.~~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 for an initial term of 10 years, followed by optional renewals at customary terms.~~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.

~~Index for Notes to the Condensed Consolidated Financial Statements~~

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 ~~VIE~~SPEs but are not the primary beneficiary as we lack the power to direct the activities that most significantly impact the Lease Site ~~VIE’s~~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 in 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 de-recognize 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 ~~balance sheet.~~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 at a rate of approximately 8% using the effective interest method.~~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 operation of the tower sites.

Acquired CCI Tower Lease Arrangements

Prior to the ~~Merger,~~merger (the “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 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 for an initial term of 10 years, followed by optional renewals at customary terms.~~sites.

We considered if this arrangement resulted in the sale of the Master Lease Sites for which we would de-recognize 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 ~~balance sheet.~~Condensed Consolidated Balance Sheets.

As of the closing date of the Merger, ~~date,~~ 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 ~~includes~~include unfavorable terms associated with the fixed-price purchase option in 2037.

We recognize interest expense on the tower ~~obligations at a rate of approximately 6% using the effective interest method.~~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 inon our Condensed Consolidated Balance Sheets and are depreciated to their estimated residual values over the expected useful life of the ~~tower,~~towers, which is 20 years.

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

(in millions) March 31,
2021 December 31,
2020
Property and equipment, net $ 2,715 $ 2,838
Tower obligations 2,974 3,028
Other long-term liabilities 1,712 1,712
Leaseback Arrangement

~~Future minimum~~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 twelve years and modifies the leaseback payments ~~related~~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 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 are approximately $399 million~~obligations: 11.6% for the ~~year ending March 31, 2022, $690 million in total~~Existing CCI Tower Lease Arrangement and 5.3% for the ~~years ending March 31, 2023 and 2024, $601 million in total for years ending March 31, 2025 and 2026, and $549 million in total for years thereafter.~~Acquired CCI Tower Lease Arrangement. There were no changes made to either of our master prepaid leases with CCI.

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

2315

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, 2022		December 31, 2021
Property and equipment, net	$	2,505	$	2,548
Tower obligations	4,037		2,806
Other long-term liabilities	554		1,712

Future minimum payments related to the tower obligations are approximately ~~900 sites and have included lease liabilities of $282~~$415 million for the 12-month period ending March 31, 2023, $848 million in ~~our Operating lease liabilities as of~~total for the 12-month periods ending March 31, ~~2021.~~2024 and 2025, $774 million in total for the 12-month periods ending March 31, 2026 and 2027, and $4.8 billion in total thereafter.

Note 98 – 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, ~~home internet,~~High Speed Internet, wearables, DIGITS ~~(a service that allows our customers to use multiple mobile numbers on any compatible smartphone or device with internet connection),~~ or other connected devices, which ~~includes~~include tablets and SyncUP ~~products.~~products;

•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) 2021 2020
Postpaid service revenues
Postpaid phone revenues $ 9,483 $ 5,577
Postpaid other revenues 820 310
Total postpaid service revenues $ 10,303 $ 5,887


	Three Months Ended March 31,
(in millions)		2022		2021
Postpaid service revenues

Postpaid phone revenues		$	10,231	$	9,483
Postpaid other revenues		970		820

Total postpaid service revenues		$	11,201	$	10,303

We operate as a single operating segment. The balances presented ~~within~~in each revenue line item inon our Condensed Consolidated Statements of Comprehensive Income represent categories of revenue from contracts with customers disaggregated by type of product and service. Service revenues also include revenues earned for providing ~~value added~~premium services to customers, such as device insurance services and customer-based, third-party services. Revenue generated from the lease of mobile communication devices is included ~~within~~in Equipment revenues inon our Condensed Consolidated Statements of Comprehensive Income.

Equipment revenues from the lease of mobile communication devices were as follows:


	Three Months Ended March 31,
(in millions)		2022		2021
Equipment revenues from the lease of mobile communication devices		$	487	$	1,041

We provide wireline communication services to domestic and international customers. Wireline service revenues ofwere $146 million and $197 million for the three months ended March 31, 2022 and 2021, respectively. Wireline service revenues are presented in ~~Roaming~~Wholesale and other service revenues inon our Condensed Consolidated Statements of Comprehensive Income.

~~Equipment revenues from~~

Index for Notes to the ~~lease of mobile communication devices were as follows:~~Condensed Consolidated Financial Statements

Three Months Ended March 31,
(in millions) 2021 2020
Equipment revenues from the lease of mobile communication devices $ 1,041 $ 165

Contract Balances

The contract asset and contract liability balances from contracts with customers as of ~~December~~March 31, ~~2020~~2022 and ~~March~~December 31, 2021, were as follows:

(in millions) Contract Assets Contract Liabilities
Balance as of December 31, 2020 $ 278 $ 824
Balance as of March 31, 2021 275 775
Change $ (3) $ (49)


(in millions)	Contract Assets		Contract Liabilities

Balance as of December 31, 2021	$	286	$	763
Balance as of March 31, 2022	275		768

Change	$	(11)	$	5

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~~Contract asset balance includes 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 approximately

~~Index for Notes to the Condensed Consolidated Financial Statements~~

~~$205~~ $210 million and ~~$204~~$219 million as of March 31, ~~2021~~2022 and December 31, ~~2020,~~2021, respectively, was included in Other current assets inon 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 inon our Condensed Consolidated Balance Sheets.

Revenues for the three months ended March 31, ~~2021~~2022 and ~~2020,~~2021 include the following:

Three Months Ended March 31,
(in millions) 2021 2020
Amounts included in the beginning of year contract liability balance $ 683 $ 528


	Three Months Ended March 31,
(in millions)		2022		2021
Amounts included in the beginning of year contract liability balance		$	654	$	683

Remaining Performance Obligations

As of March 31, ~~2021,~~2022, 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 ~~$1.3 billion.~~$798 million. We expect to recognize revenue as the service is provided on these postpaid contracts over an extended contract term of 24 ~~months.~~

Asmonths at the time of March 31, 2021, the aggregate amount of transaction price allocated to remaining service and lease performance obligations associated with operating leases was $1.3 billion and $766 million, respectively. We expect to recognize this revenue as service is provided over the lease contract term of 18 months.origination.

Information about remaining performance obligations that are part of a contract that has an original expected duration of one year or less ~~have~~has been excluded from the above, which primarily consists of monthly service contracts.

Certain of our wholesale, roaming and ~~other~~ service contracts include variable consideration based on ~~usage.~~usage and performance. This variable consideration has been excluded from the disclosure of remaining performance obligations. As of March 31, ~~2021,~~2022, the aggregate amount of the contractual minimum consideration for wholesale, roaming and ~~other~~ service contracts is $936 million, $1.0 billion ~~$1.2~~and $2.7 billion for 2022, 2023, and ~~$945 million for 2021, 2022, and 2023~~2024 and beyond, respectively. These contracts have a remaining duration ranging from less than one year to ~~nine~~eight years.

Contract Costs

The ~~total~~ balance of deferred incremental costs to obtain contracts with customers was ~~$1.2~~$1.6 billion and ~~$1.1~~$1.5 billion as of March 31, ~~2021~~2022 and December 31, ~~2020,~~2021, respectively, and is included in Other assets inon 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 is included in Selling, general and administrative expenses inon our Condensed Consolidated Statements of Comprehensive Income and ~~was $248~~were $324 million and ~~$205~~$248 million for the three months ended March 31, ~~2021~~2022 and ~~2020,~~2021, respectively.

The deferred contract cost asset is assessed for impairment on a periodic basis. There were 0no impairment losses recognized on deferred contract cost assets for the three months ended March 31, ~~2021~~2022 and ~~2020.~~2021.

2517

Index for Notes to the Condensed Consolidated Financial Statements

Note 109 – 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) 2021 2020
Net income $ 933 $ 951
Weighted average shares outstanding - basic 1,243,520,026 858,148,284
Effect of dilutive securities:
Outstanding stock options and unvested stock awards 9,263,538 7,850,248
Weighted average shares outstanding - diluted 1,252,783,564 865,998,532
Earnings per share - basic $ 0.75 $ 1.11
Earnings per share - diluted $ 0.74 $ 1.10
Potentially dilutive securities:
Outstanding stock options and unvested stock awards 6 1,807,812
SoftBank contingent consideration (1)
48,751,557 0


	Three Months Ended March 31,
(in millions, except shares and per share amounts)		2022		2021



Net income		$	713	$	933








Weighted-average shares outstanding – basic		1,250,505,999		1,243,520,026
Effect of dilutive securities:
Outstanding stock options and unvested stock awards		4,862,593		9,263,538


Weighted-average shares outstanding – diluted		1,255,368,592		1,252,783,564




Earnings per share – basic		$	0.57	$	0.75




Earnings per share – diluted		$	0.57	$	0.74

Potentially dilutive securities:
Outstanding stock options and unvested stock awards		2,054,344		6
SoftBank contingent consideration (1)		48,751,557		48,751,557

(1) Represents the ~~weighted average~~weighted-average SoftBank Specified Shares ~~outstanding~~that are contingently issuable from ~~January~~the acquisition date of April 1, ~~2021, through March 31, 2021. No~~2020, pursuant to a letter agreement dated February 20, 2020 between T-Mobile, SoftBank ~~Specified Shares were outstanding during the three months ended March 31, 2020.~~and Deutsche Telekom AG (“DT”).

As of March 31, ~~2021,~~2022, we had authorized 100 million shares of preferred stock, with a par value of $0.00001 per share. There was 0no preferred stock outstanding as of March 31, ~~2021~~2022 and ~~2020.~~2021. Potentially dilutive securities were not included in the computation of diluted earnings per share if to do so would have been ~~anti-dilutive or if there was a net loss for the period.~~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 10 – Leases

Lessee

We are a lessee for non-cancelable operating and financing leases for cell sites, switch sites, retail stores, network equipment and office facilities with contractual terms that generally extend through 2035. Additionally, we lease dark fiber through non-cancelable operating leases with contractual terms that generally extend through 2041. The majority of cell site leases have a non-cancelable term of five to 15 years with several renewal options that can extend the lease term for five to 50 years. In addition, we have financing leases for network equipment that generally have a non-cancelable lease term of three to five years. The financing leases do not have renewal options and contain a bargain purchase option at the end of the lease.

On January 3, 2022, we entered into the Crown Agreement with CCI that modified the terms of our leased towers from CCI. The Crown Agreement modifies the monthly rental payments we will pay for sites currently leased by us, extends the non-cancellable lease term for the majority of our sites through December 2033 and will allow us the flexibility to facilitate our network integration and decommissioning activities through new site builds and termination of duplicate tower locations. The initial non-cancellable term is through December 31, 2033, followed by 3 optional five-year renewals. As a result of this modification, we remeasured the associated right-of use assets and lease liabilities resulting in an increase of $5.3 billion to each on the effective date of the modification, with a corresponding gross increase to both deferred tax liabilities and assets of $1.3 billion.

Index for Notes to the Condensed Consolidated Financial Statements

The components of lease expense were as follows:


	Three Months Ended March 31,
(in millions)		2022		2021
Operating lease expense		$	1,748	$	1,391
Financing lease expense:
Amortization of right-of-use assets		185		173
Interest on lease liabilities		15		20
Total financing lease expense		200		193
Variable lease expense		127		95
Total lease expense		$	2,075	$	1,679

As of March 31, 2022, the weighted-average remaining lease term and discount rate for operating leases were 10 years and 3.9%, respectively.

Maturities of lease liabilities as of March 31, 2022, were as follows:


(in millions)	Operating Leases		Finance Leases
Twelve Months Ending March 31,
2023	$	4,199	$	1,163
2024	4,479		835
2025	4,103		495
2026	3,553		101
2027	3,274		29
Thereafter	23,509		25
Total lease payments	43,117		2,648
Less: imputed interest	8,678		80
Total	$	34,439	$	2,568

Interest payments for financing leases were $15 million and $19 million for the three months ended March 31, 2022 and 2021, respectively.

As of March 31, 2022, we have additional operating leases for commercial properties that have not yet commenced with future lease payments of approximately $85 million.

Note 11 – Commitments and Contingencies

Purchase Commitments

We have commitments for non-dedicated transportation lines with varying expiration terms that generally extend through ~~2029.~~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 ~~$3.9~~$4.4 billion for the ~~year~~twelve-month period ending March 31, ~~2022, $4.3~~2023, $5.5 billion in total for each of the ~~years~~twelve-month periods ending March 31, ~~2023~~2024 and ~~2024, $2.2~~2025, $2.4 billion in total for each of the ~~years~~twelve-month periods ending March 31, ~~2025 and~~ 2026 and ~~$1.6~~2027 and $3.1 billion in total ~~for the years~~ 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.

Spectrum Leases

~~In connection with the Merger, we assumed certain~~We lease spectrum ~~lease contracts~~ from ~~Sprint that~~various parties. These leases include service obligations to the lessors. Certain ~~of the~~ 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 $340 million for the year ending March 31, 2022, $662 million in total for the years ending March 31, 2023 and 2024, $579 million in total for the years ending March 31, 2025 and 2026 and $5.0 billion in total for the years thereafter.

We accrue a monthly obligation for the services and equipment based on the total estimated available service credits divided by the term of the lease. The obligation is reduced by services provided and as actual invoices are presented and paid to the lessors. The maximum remaining service commitment on March 31, 2021 was $91 million and is expected to be incurred over the term of the related lease agreements, which generally range from 15 to 30 years.

2619

Index for Notes to the Condensed Consolidated Financial Statements

~~Merger Commitments~~

~~In connection with the regulatory proceedings~~Our spectrum lease and ~~approvals of the Transactions, we have~~service credit 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 and DISH Network Corporation (“DISH”) 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 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 frames for compliance. Failure to fulfill our obligations and commitments in a timely manner could result in substantial fines, penalties, or other legal and administrative actions.

~~We expect that our monetary commitments associated with these matters~~renewal periods, are approximately ~~$24~~$345 million for the ~~year~~twelve-month period ending March 31, ~~2022, $37~~2023, $627 million in total for each of the ~~years~~twelve-month periods ending March 31, ~~2023 and~~ 2024 and ~~$11~~2025, $623 million in total for each of the ~~years~~twelve-month periods ending March 31, ~~2025~~2026 and ~~2026. These amounts do not represent our entire anticipated costs to achieve specified network coverage~~2027 and ~~performance requirements, employment targets or commitments to provide access to affordable rate plans, but represent only those amounts for which we are required to make a specified payment~~$4.9 billion in ~~connection with our commitments or settlements.~~total thereafter.

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, which is~~appropriate. The accruals are reflected in the condensed consolidated financial statements, but ~~that is~~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 ~~which~~that may result in a contingent gain, we recognize such gains in the 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 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, ~~2021, which~~2022, and that accrual was included in Accounts payable and accrued liabilities inon 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 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. ~~Resolution of these matters could require making additional reimbursements and paying additional fines and penalties.~~

~~Index for Notes to the Condensed Consolidated Financial Statements~~

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.~~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. ~~See~~

On June 1, 2021, a putative shareholder class action and derivative lawsuit was filed in the Delaware Court of Chancery, ~~Note 2 -~~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 ~~for further information.~~ 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. We intend to vigorously defend this lawsuit.

In October 2020, we notified Mobile Virtual Network Operators (“MVNOs”) using the legacy Sprint CDMA network that we

Index for Notes to the Condensed Consolidated Financial Statements

planned to sunset that network on December 31, 2021. In response to that notice, DISH Network Corporation (“DISH”), which has Boost Mobile customers who use the legacy Sprint CDMA network, made several efforts to prevent us from sunsetting the CDMA network until mid-2023, including by urging the U.S. Department of Justice to move for a finding of contempt under the April 1, 2020 Final Judgment entered by the U.S. District Court for the District of Columbia, and by pursuing a Petition for Modification and related proceedings pursuant to the California Public Utilities Commission’s (the “CPUC”) April 2020 decision concerning the Merger. We disagree with the merits of DISH’s positions and have opposed them. On October 22, 2021, we announced that we would delay the full decommissioning of the legacy Sprint CDMA network for three months, until March 31, 2022, to, among other things, help ensure that DISH and other MVNOs fulfill their contractual responsibilities and transition customers off the legacy Sprint CDMA network before the decommissioning. In March 2022, the CPUC denied DISH’s Petition for Modification. We cannot predict the outcome of the other proceedings described above, but we intend to vigorously oppose any efforts to further delay the sunset of the legacy Sprint CDMA network. The orderly decommissioning of the legacy Sprint CDMA network began as planned on March 31, 2022, and is expected to be completed during the second fiscal quarter of 2022, and we will continue to help ensure that DISH and other MVNOs fulfill their contractual responsibilities and transition customers off the legacy Sprint CDMA network before the decommissioning.

On August 12, 2021, we became aware of a potential 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 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. In addition, in November 2021, a purported Company shareholder filed a derivative action in the U.S. District Court for the Western District of Washington, Litwin v. Sievert et al., No. 2:21-cv-01599, against our current directors, alleging several claims concerning the Company’s cybersecurity practices. In April 2022, the Litwin case was voluntarily dismissed without prejudice. We are unable to predict at this time the potential outcome of any of the other claims described above or whether we may be subject to further private litigation. We intend to vigorously defend all of these lawsuits.

In addition, the Company has received inquiries from various government agencies, law enforcement and other governmental authorities related to the August 2021 cyberattack, which could result in fines or penalties. We are responding to these inquiries and cooperating fully with regulators. However, we cannot predict the timing or outcome of any of these inquiries, or whether we may be subject to further regulatory inquiries.

In light of the inherent uncertainties involved in such matters and based on the information currently available to us, as of the date of this Quarterly Report, we have not recorded any accruals for losses related to the above proceedings and inquiries, as any such amounts (or ranges of amounts) are not probable or estimable at this time. We believe it is reasonably possible that we could incur losses associated with these proceedings and inquiries, and the Company 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 proceedings and inquiries, 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.

In March 2022, we received $220 million in settlement of certain patent litigation. We recognized the settlement, net of legal fees, as a reduction to Selling, general and administrative expenses on our Condensed Consolidated Statements of Comprehensive Income.

Index for Notes to the Condensed Consolidated Financial Statements

Note 12 – Restructuring Costs

Upon close of the Merger, we began implementing restructuring initiatives to realize cost efficiencies and reduce redundancies. The major activities associated with the 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 ~~network infrastructure including~~certain small cell sites and ~~equipment~~distributed antenna systems to achieve synergies in network costs.

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

(in millions) Three Months Ended March 31, 2021 Plan to Date
Contract termination costs $ 6 $ 184
Severance costs 16 401
Network decommissioning 12 509
Total restructuring plan expenses $ 34 $ 1,094



(in millions)	Three Months Ended March 31, 2022		Incurred to Date
Contract termination costs	$	—	$	192
Severance costs	4		406
Network decommissioning	133		814
Total restructuring plan expenses	$	137	$	1,412

The expenses associated with the restructuring initiatives are included in Costs of services and Selling, general and administrative inon our Condensed Consolidated Statements of Comprehensive Income. ~~No expenses were incurred related to our restructuring initiatives for the three months ended March 31, 2020.~~

Our 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 $464 million and $123 million for the three months ended March 31, 2022 and 2021, respectively, and are included ~~within~~in Costs of services and Selling, general and administrative inon our Condensed Consolidated Statements of Comprehensive Income. ~~No restructuring expenses were incurred related to the acceleration or termination of leases for the three months ended March 31, 2020.~~

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


(in millions)	(in millions)	December 31, 2020		Expenses Incurred		Cash Payments		Adjustments for Non-Cash Items (1)		March 31, 2021		(in millions)	December 31, 2021		Expenses Incurred		Cash Payments		Adjustments for Non-Cash Items (1)		March 31, 2022
Contract termination costs	Contract termination costs	$	81	$	6	$	(44)	$	0	$	43	Contract termination costs	$	14	$	—	$	(5)	$	—	$	9
Severance costs	Severance costs	52		16		(38)		(5)		25		Severance costs	1		4		(3)		—		2
Network decommissioning	Network decommissioning	30		12		(28)		(2)		12		Network decommissioning	71		133		(59)		(5)		140
Total	Total	$	163	$	34	$	(110)	$	(7)	$	80	Total	$	86	$	137	$	(67)	$	(5)	$	151

(1) Non-cash items ~~consists~~consist of ~~non-cash stock-based compensation included within Severance costs and~~ the write-off of assets within Network decommissioning.

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

Our restructuring activities are expected to occur over the next ~~three~~two years with substantially all costs incurred by the end of fiscal year 2023. We are evaluating additional restructuring initiatives, which are dependent on consultations and negotiation with certain counterparties and the expected impact on our business operations, which could affect the amount or timing of the restructuring costs and related payments.

2822

Index for Notes to the Condensed Consolidated Financial Statements

Note 13 – Additional Financial Information

Accounts Payable and Accrued Liabilities

Accounts payable and accrued liabilities are summarized as follows:

(in millions) March 31,
2021 December 31,
2020
Accounts payable $ 4,559 $ 5,564
Payroll and related benefits 785 1,163
Property and other taxes, including payroll 1,540 1,540
Interest 777 771
Commissions 327 399
Toll and interconnect 233 217
Advertising 109 135
Other 382 407
Accounts payable and accrued liabilities $ 8,712 $ 10,196


(in millions)	March 31, 2022		December 31, 2021
Accounts payable	$	6,739	$	6,499
Payroll and related benefits	842		1,343
Property and other taxes, including payroll	1,764		1,830
Accrued interest	825		710
Commissions	270		348

Toll and interconnect	230		248
Advertising	11		59
Other	453		368
Accounts payable and accrued liabilities	$	11,134	$	11,405

Book overdrafts included in accounts payable ~~and accrued liabilities~~ were ~~$285~~$405 million and ~~$628~~$378 million as of March 31, ~~2021~~2022 and December 31, ~~2020,~~2021, 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,				Three Months Ended March 31,
(in millions)	(in millions)	2021		2020			(in millions)	2022		2021
Interest payments, net of amounts capitalized	Interest payments, net of amounts capitalized	$	945	$	341		Interest payments, net of amounts capitalized	$	778	$	945
Operating lease payments	Operating lease payments	1,651		875			Operating lease payments	1,048		1,651
Income tax payments	Income tax payments	22		24			Income tax payments	—		22
Non-cash investing and financing activities	Non-cash investing and financing activities						Non-cash investing and financing activities

Non-cash beneficial interest obtained in exchange for securitized receivables	Non-cash beneficial interest obtained in exchange for securitized receivables	1,381		1,613			Non-cash beneficial interest obtained in exchange for securitized receivables	1,018		1,381

Change in accounts payable and accrued liabilities for purchases of property and equipment	Change in accounts payable and accrued liabilities for purchases of property and equipment	(173)		(301)			Change in accounts payable and accrued liabilities for purchases of property and equipment	(183)		(173)
Leased devices transferred from inventory to property and equipment	Leased devices transferred from inventory to property and equipment	485		309			Leased devices transferred from inventory to property and equipment	129		485
Returned leased devices transferred from property and equipment to inventory	Returned leased devices transferred from property and equipment to inventory	(445)		(59)			Returned leased devices transferred from property and equipment to inventory	(183)		(445)

Increase in Tower obligations from contract modification							Increase in Tower obligations from contract modification	1,158		—
Operating lease right-of-use assets obtained in exchange for lease obligations	Operating lease right-of-use assets obtained in exchange for lease obligations	911		555			Operating lease right-of-use assets obtained in exchange for lease obligations	5,975		911
Financing lease right-of-use assets obtained in exchange for lease obligations	Financing lease right-of-use assets obtained in exchange for lease obligations	109		178			Financing lease right-of-use assets obtained in exchange for lease obligations	298		109

Note 14 – Subsequent Events

Subsequent to March 31, 2022, on April 15, 2022, we repaid at maturity $1.25 billion of our 5.375% Senior Notes to affiliates due 2022.

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Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

Cautionary Statement Regarding Forward-Looking Statements

This Quarterly Report on Form 10-Q (“Form 10-Q”) of T-Mobile US, Inc. (“T-Mobile,” “we,” “our,” “us” or the “Company”) includes forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. All statements, other than statements of historical fact, including information concerning our future results of operations, are forward-looking statements. These forward-looking statements are generally identified by the words “anticipate,” “believe,” “estimate,” “expect,” “intend,” “may,” “could” or similar expressions. Forward-looking statements are based on current expectations and assumptions, which are subject to risks and uncertainties that may cause actual results to differ materially from the forward-looking statements. The following important factors, along with the Risk Factors included in Part I, Item 1A of our Annual Report on Form 10-K for the year ended December 31, 2021 and Part II, Item 1A of this Form 10-Q, could affect future results and cause those results to differ materially from those expressed in the forward-looking statements:

•~~natural disasters, public health crises, including~~adverse impact caused by the COVID-19 pandemic (the “Pandemic”), ~~terrorist attacks or similar incidents;~~

•~~adverse economic, political or market conditions in the U.S. and international markets,~~ including ~~those caused by the Pandemic;~~supply chain shortages;

•competition, industry consolidation and changes in the market ~~condition~~ for wireless services;

•disruption, data loss or other security ~~breaches;~~breaches, such as the criminal cyberattack we became aware of in August 2021;

•~~the scarcity and cost~~our inability to take advantage of ~~additional wireless spectrum, and regulations relating to spectrum use;~~technological developments on a timely basis;

•our inability to retain or motivate key personnel, hire qualified personnel or maintain our corporate culture;

•~~our inability to take advantage of technological developments on a timely basis;~~

•system failures and business disruptions, allowing for unauthorized use of or interference with our network and other systems;

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

•the impacts of the actions we have taken and conditions we have agreed to in connection with the regulatory proceedings and approvals of the Transactions (as defined below), including the acquisition by DISH Network Corporation (“DISH”) of the prepaid wireless business operated under the Boost Mobile and Sprint prepaid brands (excluding the Assurance brand Lifeline customers and the prepaid wireless customers of Shenandoah Personal Communications Company LLC ~~(“Shentel”)~~ and Swiftel Communications, Inc.), including customer accounts, inventory, contracts, intellectual property and certain other specified assets, ~~(the “Prepaid Business”),~~ and the assumption of certain related liabilities ~~(the~~(collectively, the “Prepaid Transaction”), the complaint and proposed final judgment ~~(the “Consent Decree”)~~ 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, the proposed commitments filed with the Secretary of the Federal Communications Commission (“FCC”), which we announced on May 20, 2019, certain national security commitments and undertakings, and any other commitments or undertakings entered into, including but not limited to, those we have made to certain states and nongovernmental organizations (collectively, the “Government Commitments”), and the challenges in satisfying the Government Commitments in the required time frames and the significant cumulative ~~cost~~costs incurred in tracking and monitoring compliance;

•adverse economic, political or market conditions in the U.S. and ~~complying with them;~~international markets, including changes resulting from increases in inflation, impacts of current geopolitical instability caused by the war in Ukraine, and those caused by the Pandemic;

•our inability to manage the ongoing commercial and transition services arrangements ~~that we~~ entered into ~~with DISH~~ in connection with the Prepaid Transaction, ~~which we completed on July 1, 2020 (collectively, the “Divestiture Transaction”),~~ and known or unknown liabilities arising in connection therewith;

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

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

•~~the occurrence of high fraud rates or volumes related to device financing, customer payment cards, third-party dealers, employees, subscriptions, identities or account takeover fraud;~~

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

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

•restrictive covenants including the agreements governing our ~~debt securities or adverse conditions in the credit markets;~~indebtedness and other financings;

•the risk of future material weaknesses we may identify while we continue to work to integrate and align policies, principles and practices of the two companies following the Merger (as defined below), or any other failure by us to maintain effective internal controls, and the resulting significant costs and reputational damage;

•any changes in regulations or in the regulatory framework under which we operate;

•laws and regulations relating to the handling of privacy and data protection;

~~Table of Contents~~

•unfavorable outcomes of existing or future legal ~~proceedings;~~proceedings, including these proceedings and inquiries relating to the criminal cyberattack we became aware of in August 2021;

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•the possibility that we may be unable to adequately protect our intellectual property rights or be accused of infringing the intellectual property rights of others;

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

•new or amended tax laws or regulations or administrative interpretations and judicial decisions affecting the scope or application of tax laws or regulations;

•~~the possibility that we may be unable to renew~~ our ~~spectrum leases on attractive terms or the possible revocation~~exclusive forum provision as provided in our Certificate of ~~our existing licenses in the event that we violate applicable laws;~~Incorporation;

•interests of our significant stockholders that may differ from the interests of other stockholders;

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

•~~the volatility of our stock price and our lack of plan to pay cash dividends in the foreseeable future;~~

•failure to realize the expected benefits and synergies of the merger (the “Merger”) with Sprint, 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 (collectively, the “Transactions”) in the expected ~~timeframes~~time frames or in the amounts anticipated;

•any delay and costs of, or difficulties in, integrating our business and Sprint’s business and operations, and unexpected additional operating costs, customer loss and business ~~disruption,~~disruptions, including challenges in maintaining relationships with employees, customers, suppliers or vendors; and

•unanticipated difficulties, disruption, or significant delays in our long-term strategy to migrate Sprint’s legacy customers onto T-Mobile’s existing billing ~~platforms; and~~

•~~changes to existing or the issuance of new accounting standards by the Financial Accounting Standards Board or other regulatory agencies.~~platforms.

Given these risks and uncertainties, readers are cautioned not to place undue reliance on such forward-looking statements. We undertake no obligation to revise or publicly release the results of any revision to these forward-looking statements, except as required by law. In this Form 10-Q, unless the context indicates otherwise, references to “T-Mobile,” “our Company,” “the Company,” “we,” “our,” and “us” refer to T-Mobile US, Inc. as a standalone company prior to April 1, 2020, the date we completed the Merger with Sprint, and on and after April 1, 2020, refer to the combined company as a result of the Merger.

Investors and others should note that we announce material ~~financial and operational~~ information to our investors using our investor relations website (https://investor.t-mobile.com), newsroom website (https://t-mobile.com/news), press releases, SEC filings and public conference calls and webcasts. We intend to also use certain social media accounts as means of disclosing information about us and our services and for complying with our disclosure obligations under Regulation FD (the @TMobileIR Twitter account (https://twitter.com/TMobileIR) ~~and~~, the @MikeSievert Twitter account (https://twitter.com/MikeSievert), which Mr. Sievert also uses as a means for personal communications and observations, and the @TMobileCFO Twitter Account (https://twitter.com/tmobilecfo) and our Chief Financial Officer’s LinkedIn account (https://www.linkedin.com/in/peter-osvaldik-3887394), both of which Mr. Osvaldik also uses as a means for personal communication and observations). The information we post through these social media channels may be deemed material. Accordingly, investors should monitor these social media channels in addition to following our press releases, SEC filings and public conference calls and webcasts. The social media channels that we intend to use as a means of disclosing the information described above may be updated from time to time as listed on our Investor Relations website.

Overview

The objectives of our Management’s Discussion and Analysis of Financial Condition and Results of Operations (“MD&A”) are to provide users of our condensed consolidated financial statements with the following:

•A narrative explanation from the perspective of management of our financial condition, results of operations, cash flows, liquidity and certain other factors that may affect future results;

•Context to the condensed consolidated financial statements; and

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

Our MD&A is performed on a consolidated basis and is inclusive of the results and operations of Sprint prospectively from the close of the Merger on April 1, 2020. The Merger enhanced our spectrum portfolio, increased our customer base, altered our product mix and created opportunities for synergies in our operations. We anticipate an initial increase in our combined operating costs, which we expect to decrease as we realize synergies. We expect the trends and results of operations of the combined company to be materially different than those of the standalone entities.

~~Table of Contents~~

Our MD&A is provided as a supplement to, and should be read together with, our unaudited condensed consolidated financial statements as of and for the three months ended March 31, ~~2021,~~2022, included in Part I, Item 1 of this Form 10-Q, and audited consolidated financial statements, included in Part II, Item 8 of our Annual Report on Form 10-K for the year ended December 31, ~~2020.~~2021. Except as expressly stated, the financial condition and results of operations discussed throughout our MD&A are those of T-Mobile US, Inc. and its consolidated subsidiaries.

~~Sprint Merger~~

~~Transaction Overview~~

~~On April 1, 2020, we completed the Merger with Sprint, a communications company offering a comprehensive range~~Table of ~~wireless and wireline communications products and services. As a result, Sprint and its subsidiaries became wholly owned consolidated subsidiaries of T-Mobile.~~

The Merger has altered the size and scope of our operations, impacting our assets, liabilities, obligations, capital requirements and performance measures. We expect the trends and results of operations of the combined company to be materially different than those of the standalone entities. As a combined company, we expect to be able to enhance the breadth and depth of our nationwide 5G network, accelerate innovation, increase competition in the U.S. wireless, video and broadband industries and achieve significant synergies and cost reductions by eliminating redundancies within the combined network as well as other business processes and operations.

~~For more information regarding the Merger, see~~ ~~Note 2 – Business Combination~~Contents ~~of the Notes to the Condensed Consolidated Financial Statements.~~

Sprint Merger and Integration Activities

Merger-Related Costs

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

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

•Restructuring costs, including severance, store rationalization and network decommissioning; and

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

~~Transaction and restructuring~~Restructuring costs are disclosed in Note 212 – ~~Business Combination~~ ~~and~~ ~~Note 1~~2 - Restructuring Costs~~, respectively.~~ of the Notes to the Condensed Consolidated Financial Statements. Merger-related costs have been excluded from our calculations of Adjusted EBITDA and Core Adjusted EBITDA, which are non-GAAP financial measures, as we do not consider these costs to be reflective of our ongoing operating performance. See “Adjusted EBITDA and Core Adjusted EBITDA” in the “Performance Measures” section of this MD&A. ~~Cash~~Net cash payments for Merger-related costs, including payments related to our restructuring plan, are included in Net cash provided by operating activities inon our Condensed Consolidated Statements of Cash Flows.

Merger-related costs ~~during the three months ended March 31, 2021 and 2020~~ are presented below:

(in millions) Three Months Ended March 31, Change
2021 2020 $ %
Merger-related costs
Cost of services, exclusive of depreciation and amortization $ 136 $ — $ 136 NM
Cost of equipment sales 17 — 17 NM
Selling, general and administrative 145 143 2 1 %
Total Merger-related costs $ 298 $ 143 $ 155 108 %
Cash payments for Merger-related costs $ 277 $ 161 $ 116 72 %


(in millions)	Three Months Ended March 31,	Change
		2022		2021		$		%
Merger-related costs
Cost of services, exclusive of depreciation and amortization		$	607	$	136	$	471	346	%
Cost of equipment sales, exclusive of depreciation and amortization		751		17		734		NM
Selling, general and administrative		55		145		(90)		(62)	%
Total Merger-related costs		$	1,413	$	298	$	1,115	374	%

Net cash payments for Merger-related costs		$	893	$	277	$	616	222	%

NM - Not Meaningful

We expect to incur a total of $12.0 billion of Merger-related costs, ~~will be impacted~~excluding capital expenditures, of which $7.9 billion has been incurred since the beginning of 2018, including $700 million of costs incurred by Sprint prior to the Merger. We expect to incur the remaining $4.1 billion to complete our integration and restructuring ~~and integration~~ activities ~~expected to occur~~ over the next ~~three~~two years ~~as we implement initiatives to realize cost efficiencies from~~with substantially all costs incurred by the ~~Merger. Transaction~~end of 2023.

Total Merger related costs ~~including legal and professional service fees related to~~for the ~~completion of the Merger and acquisitions of affiliates,~~twelve months ended December 31, 2022 are expected to ~~decrease in periods subsequent~~be between $4.5 billion to $5.0 billion, including $1.4 billion incurred during the ~~close~~three months ended March 31, 2022. We are evaluating additional restructuring initiatives which are dependent on consultations and negotiation with certain counterparties and the expected impact on our business operations, which could affect the amount or timing of the ~~Merger.~~restructuring costs and related payments. We expect our principal sources of funding to be sufficient to meet our liquidity requirements and anticipated payments associated with the restructuring initiatives.

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Restructuring

Upon the close of the Merger, we began implementing restructuring initiatives to realize cost efficiencies from the Merger. The major activities associated with the restructuring initiatives to date include:

•Contract termination costs associated with rationalization of retail stores, distribution channels, duplicative network and backhaul services and other agreements;

•Severance costs associated with the reduction of redundant processes and functions; and

•The decommissioning of certain small cell sites and distributed antenna systems to achieve synergies in network costs.

For more information regarding our restructuring activities, see Note 12 – Restructuring Costs of the Notes to the Condensed Consolidated Financial Statements.

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Anticipated Impacts

Our restructuring activities are expected to occur over the next three years with substantially all costs incurred by the end of fiscal year 2023. We are evaluating additional restructuring initiatives which are dependent on consultations and negotiation with certain counterparties and the expected impact on our business operations, which could affect the amount or timing of the restructuring costs and related payments. We expect our principal sources of funding to be sufficient to meet our liquidity requirements and anticipated payments associated with the restructuring initiatives.Synergies

As a result of our ongoing restructuring activities, we expect to realize ~~cost efficiencies~~synergies by eliminating redundancies within our combined network as well as other business processes and operations. WeFor full-year 2022, we expect ~~these activities to result in a reduction of expenses withinCost of services and~~synergies from Selling, general and administrative expense reductions of $2.3 billion to $2.4 billion and Cost of service expense reductions of $1.6 billion to $1.7 billion.

Other Potential Impacts

The operation of the legacy Sprint CDMA and LTE networks is partially supported by legacy Sprint’s Wireline network acquired through the Merger. We expect that the legacy Sprint CDMA and LTE networks will be decommissioned during 2022. In accordance with ASC 360-10, we assess long-lived assets for impairment when events or circumstances indicate that long-lived assets might be impaired. We expect that the decommissioning of the legacy Sprint CDMA and LTE networks will trigger impairments of certain Wireline long-lived assets as these assets will no longer support our wireless network and the associated customers and cash flows. The potential non-cash impairment charges are not expected to have a material impact on our condensed consolidated financial statements.

Cyberattack

As we previously reported, we were subject to a criminalcyberattack involving unauthorized access to T-Mobile’s systems. We promptly located and closed the unauthorized access to our systems. Our forensic investigation was completed in October 2021, although our ~~Condensed Consolidated Statements~~overall investigation into the incident is ongoing. There are no material updates with respect to the August 2021 cyberattack and subsequent inquiries, investigations, litigations and remedial measures from our Annual Report on Form 10-K for the year ended December 31, 2021, except as disclosed in Note 11 – Commitment and Contingencies. We have incurred certain cyberattack-related expenses that were not material and expect to continue to incur additional expenses in future periods, including costs to remediate the attack, provide additional customer support and enhance customer protection, only some of ~~Comprehensive Income.~~which may be covered and reimbursable by insurance. We also intend to commit substantial additional resources towards cybersecurity initiatives over the next several years.

COVID-19 Pandemic

The Pandemic has resulted in a widespread health crisis that has adversely affected businesses, economies and financial markets worldwide, and has caused significant volatility in the U.S. and international debt and equity markets. The impact of the Pandemic has been wide-ranging, including, but not limited to, the temporary closures of many businesses and schools, “shelter in place” orders, travel restrictions, social distancing guidelines and other governmental, business and individual actions taken in response to the Pandemic. These restrictions have impacted, and will continue to impact, our business, including the demand for our products and services and the ways in which our customers purchase and use them. In addition, the Pandemic has resulted in economic uncertainty, ~~and a significant increase in unemployment in the United States,~~ which could affect our customers’ purchasing decisions and ability to make timely payments. ~~Throughout this past year,~~Current and future Pandemic-related restrictions on, or disruptions of, transportation networks and supply chain shortages could impact our ability to acquire handsets or other end user devices in amounts sufficient to meet customer demand and to obtain the ~~Pandemic has peaked, subsided~~equipment required to meet our current and seen a resurgence, leading to phased re-openings, as well as continuing or renewed containment measures. The introduction and expanding availability of vaccines, as well as our continued social distancing measures and incremental cleaning efforts, have facilitated the continued operation of our retail stores.future network build-out plans. We will continue to monitor the Pandemic and its impacts and may adjust our actions as needed to continue to provide our products and services to our communities and employees.

As a critical communications infrastructure provider as designated by the government, our focus has been on providing crucial connectivity to our customers and impacted communities while ensuring the safety and well-being of our employees.

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Results of Operations

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

Three Months Ended March 31, Change
(in millions) 2021 2020 $ %
Revenues
Postpaid revenues $ 10,303 $ 5,887 $ 4,416 75 %
Prepaid revenues 2,351 2,373 (22) (1) %
Wholesale revenues 897 325 572 176 %
Roaming and other service revenues 641 261 380 146 %
Total service revenues 14,192 8,846 5,346 60 %
Equipment revenues 5,346 2,117 3,229 153 %
Other revenues 221 150 71 47 %
Total revenues 19,759 11,113 8,646 78 %
Operating expenses
Cost of services, exclusive of depreciation and amortization shown separately below 3,384 1,639 1,745 106 %
Cost of equipment sales, exclusive of depreciation and amortization shown separately below 5,142 2,529 2,613 103 %
Selling, general and administrative 4,805 3,688 1,117 30 %
Depreciation and amortization 4,289 1,718 2,571 150 %
Total operating expenses 17,620 9,574 8,046 84 %
Operating income 2,139 1,539 600 39 %
Other income (expense)
Interest expense (792) (185) (607) 328 %
Interest expense to affiliates (46) (99) 53 (54) %
Interest income 3 12 (9) (75) %
Other expense, net (125) (10) (115) NM
Total other expense, net (960) (282) (678) 240 %
Income before income taxes 1,179 1,257 (78) (6) %
Income tax expense (246) (306) 60 (20) %
Net income $ 933 $ 951 $ (18) (2) %
Statement of Cash Flows Data
Net cash provided by operating activities $ 3,661 $ 1,617 $ 2,044 126 %
Net cash used in investing activities (11,239) (1,580) (9,659) 611 %
Net cash provided by (used in) financing activities 3,874 (453) 4,327 NM
Non-GAAP Financial Measures
Adjusted EBITDA 6,905 3,665 3,240 88 %
Core Adjusted EBITDA 5,864 3,500 2,364 68 %
Free Cash Flow 1,304 732 572 78 %

~~NM - Not Meaningful~~


	Three Months Ended March 31,			Change
(in millions)		2022		2021		$		%
Revenues

Postpaid revenues		$	11,201	$	10,303	$	898	9	%
Prepaid revenues		2,455		2,351		104		4	%
Wholesale and other service revenues		1,472		1,538		(66)		(4)	%





Total service revenues		15,128		14,192		936		7	%





Equipment revenues		4,694		5,346		(652)		(12)	%
Other revenues		298		221		77		35	%

Total revenues		20,120		19,759		361		2	%
Operating expenses

Cost of services, exclusive of depreciation and amortization shown separately below		3,727		3,384		343		10	%
Cost of equipment sales, exclusive of depreciation and amortization shown separately below		5,946		5,142		804		16	%
Selling, general and administrative		5,056		4,805		251		5	%

Depreciation and amortization		3,585		4,289		(704)		(16)	%



Total operating expenses		18,314		17,620		694		4	%
Operating income		1,806		2,139		(333)		(16)	%
Other income (expense)

Interest expense, net		(864)		(835)		(29)		3	%


Other expense, net		(11)		(125)		114		(91)	%

Total other expense, net		(875)		(960)		85		(9)	%

Income before income taxes		931		1,179		(248)		(21)	%
Income tax expense		(218)		(246)		28		(11)	%



Net income		$	713	$	933	$	(220)	(24)	%






Statement of Cash Flows Data
Net cash provided by operating activities		$	3,845	$	3,661	$	184	5	%
Net cash used in investing activities		(5,092)		(11,239)		6,147		(55)	%
Net cash (used in) provided by financing activities		(2,136)		3,874		(6,010)		(155)	%
Non-GAAP Financial Measures
Adjusted EBITDA		6,950		6,905		45		1	%
Core Adjusted EBITDA		6,463		5,864		599		10	%
Free Cash Flow		1,649		1,304		345		26	%

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The following discussion and analysis is for the three months ended March 31, ~~2021,~~2022, compared to the same period in ~~2020~~2021 unless otherwise stated.

Total revenues increased ~~$8.6 billion,~~$361 million, or ~~78%~~2%. The components of ~~this change~~these changes are discussed below.

Postpaid revenues increased ~~$4.4 billion,~~$898 million, or ~~75%~~9%, primarily from:

•Higher average postpaid phone customers, primarily from customers acquired in the Merger and the success of new customer segments and rate plans, as well as continued growth in existing and new markets, along with promotional activities;

•~~Higher average postpaid other customers, primarily from customers acquired in the Merger and growth in other connected devices, primarily related to public and educational sector customers;~~accounts; and

•Higher postpaid ~~phone ARPU, primarily as a result of customers acquired in the Merger.~~ARPA. See “Postpaid ~~Phone ARPU”~~ARPA” in the “Performance Measures” section of this MD&A.

Prepaid revenues ~~were essentially flat.~~

~~Wholesale revenues~~ increased ~~$572~~$104 million, or ~~176%~~4%, primarily from:

•~~Our Master Network Service Agreement with DISH, which went into effect on July 1, 2020;~~Higher prepaid ARPU. See “Prepaid ARPU” in the “Performance Measures” section of this MD&A; and

•~~Customers acquired in the Merger.~~Higher average prepaid customers.

~~Roaming~~Wholesale and other service revenueswere essentially flat.

Equipment revenues ~~increased $380~~decreased $652 million, or ~~146%~~12%, primarily from:

•~~Inclusion~~A decrease of ~~wireline operations acquired~~$554 million in ~~the Merger;~~lease revenues and

•~~Higher Lifeline, advertising and affiliate revenues,~~ a decrease of $139 million in customer purchases of leased devices primarily due to ~~operations acquired in~~a lower number of customer devices under lease as a result of the ~~Merger;~~continued strategic shift from device financing from leasing to EIP; partially offset by

•~~Lower domestic roaming due to revenue generated from Sprint customers roaming on the T-Mobile network in periods before the Merger.~~

~~Equipment revenues~~ ~~increased $3.2 billion, or 153%, primarily from:~~

•An increase of ~~$1.7 billion~~$67 million in device sales revenue, excluding purchased leased devices, primarily from:

•An increase in the number of devices sold, ~~excluding purchased leased devices, due to an increase in our customer base primarily due to the Merger; and~~including higher upgrade volume; partially offset by

•~~Higher~~Lower average revenue per device sold ~~excluding purchased leased devices,~~primarily due to higher promotions, which included promotions for Sprint customers to facilitate their migration to the T-Mobile network, partially offset by an increase in the high-end ~~device mix primarily driven by a larger postpaid customer base as a result of the Merger;~~

•~~An increase of $876 million in lease revenues due to a higher number of customer devices under lease, primarily from leases acquired in the Merger;~~

•~~An increase of $237 million in sales of leased devices, primarily due to a larger base of leased devices as a result of the Merger; and~~

•~~An increase of $227 million in revenues primarily related to the liquidation of a higher volume of returned devices primarily as a result of the Merger.~~phone mix.

Other revenues ~~increased$71 million, or 47%, primarily from higher interest income on our EIP receivables.~~were essentially flat.

Operating expenses increased ~~$8.0 billion,~~$694 million, or ~~84%~~4%. The components of this change are discussed below.

Cost of services, exclusive of depreciation and amortization, increased ~~$1.7 billion,~~$343 million, or ~~106%~~10%, primarily from:

•An increase of $471 million in ~~expenses associated with leases, backhaul agreements~~Merger-related costs related to network decommissioning and ~~other network expenses acquired in the~~integration costs; and

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~~Merger and the continued build-out of our nationwide 5G network;~~

•Higher ~~employee-related and benefit-related costs primarily due~~lease expenses related to ~~increased headcount as~~ a ~~result of the Merger;~~new tower master lease agreement; partially offset by

•~~An increase of $136 million for the three months ended March 31, 2021, in Merger-related costs including incremental costs associated with network decommissioning and integration; and~~

•~~An increase in repair and maintenance costs, primarily due to the~~Higher realized Merger ~~and severe weather occurring during the three months ended March 31, 2021.~~synergies.

Cost of equipment sales, exclusive of depreciation and amortization, increased ~~$2.6 billion,~~$804 million, or ~~103%~~16%, primarily from:

•An increase of ~~$2.0 billion~~ $987 millionin device cost of equipment sales, excluding purchased leased devices, primarily from:

•An increase in the number of devices sold, ~~excluding purchased leased devices, due~~including higher upgrade volume, primarily to ~~an increase in our customer base primarily due~~facilitate the migration of Sprint customers to the ~~Merger;~~T-Mobile network; and

•Higher average costs per device sold ~~excluding purchased leased devices,~~ due to an increase in the high-end device ~~mix~~mix; partially offset by

•A decrease of $284 million in customer purchases of leased devices primarily ~~driven by~~due to a ~~larger postpaid~~lower number of customer ~~base~~devices under lease as a result of the ~~Merger;~~continued strategic shift from device financing from leasing to EIP.

•~~An increase~~Merger-related costs, primarily to facilitate the migration of ~~$255 million in leased device cost of equipment sales, primarily due to a larger base of leased devices as a result of the Merger; and~~

•~~An increase of $159 million in costs related~~Sprint customers to the ~~liquidation of a higher volume of returned devices primarily as a result of~~T-Mobile network, were $751 million for the ~~Merger.~~three months ended March 31, 2022, compared to $17 million for the three months ended March 31, 2021.

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Selling, general and administrative expenses increased ~~$1.1 billion,~~$251 million, or ~~30%~~5%, primarily from:

•Higher ~~external labor and professional services, advertising and lease expense from the Merger;~~

•~~Higher employee-related costs due to an increase in the number of employees primarily from the Merger; and~~

•~~Higher commission~~bad debt expense primarily due to estimated credit losses normalizing from muted Pandemic levels, as well as higher ~~gross customer additions;~~EIP receivables driven by higher equipment sales and a mix shift in device financing; partially offset by

•Lower ~~bad debt expense.~~Merger-related costs and higher realized Merger synergies.

•Selling, general and administrative expenses for the three months ended March 31, ~~2020~~2022 included ~~$117~~$55 million of ~~supplemental employee payroll, third-party commissions~~Merger-related costs primarily related to integration, restructuring and ~~cleaning-related COVID-19 costs. There were insignificant COVID-19~~legal-related expenses, offset by legal settlement gains, compared to $145 million of Merger-related costs for the three months ended March 31, 2021.

•Merger-related costs of $145 million, including transaction costs associated with legal and professional service and restructuring costs including severance and store rationalization, in the three months ended March 31, 2021, compared to $143 million of Merger-related costs in the three months ended March 31, 2020.

Depreciation and amortization ~~increased $2.6 billion,~~decreased $704 million, or ~~150%~~16%, primarily ~~as a result of the Merger, including:~~from:

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

•Certain 4G-related network assets becoming fully depreciated; partially offset by

•Higher depreciation expense, ~~from assets acquired in the Merger,~~ excluding leased devices, ~~and expansion~~ from the continued build-out of our nationwide 5G ~~network;~~

•~~Higher depreciation expense on leased devices resulting from a larger base of leased devices as a result of the Merger; and~~

•~~Higher amortization from intangible assets acquired in the Merger.~~network.

Operating income, the components of which are discussed above, ~~increased $600~~decreased $333 million, or ~~39%~~16%.

Interest expense, ~~increased $607 million, or 328%, primarily from:~~

•~~The assumption of debt with a fair value of $31.8 billion in connection with the Merger;~~

•~~The issuance of an aggregate principal amount of $31.8 billion of Senior Secured Notes in 2020;~~

•~~Amortization of interest rate swap derivatives beginning upon settlement in April 2020; and~~

•~~The issuance of an aggregate principal amount of $3.0 billion of Senior Notes in January 2021; partially offset by~~

•~~The repayment of an aggregate principal amount of $4.2 billion of Senior Notes in 2020.~~

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~~Interest expense to affiliates~~net decreased $53 million, or 54%, primarily from the redemption of an aggregate principal amount of $5.25 billion of Senior Notes to affiliates and the repayment of an aggregate principal amount of $4.0 billion in Incremental term loan facility to affiliates in 2020, partially offset by lower capitalized interest.was essentially flat.

Other expense, net ~~increased $115~~decreased $114 million, or 91%, primarily from lower losses on the extinguishment of debt.

Income before income taxes, the components of which are discussed above, was $931 million and $1.2 billion for the three months ended March 31, 2022 and 2021, respectively.~~decreased $78 million, or 6%.~~

Income tax expense decreased ~~$60~~$28 million, or ~~20%~~11%, primarily from:

•~~An increase~~Lower Income before income taxes; partially offset by

•A higher effective tax rate, primarily from:

•A decrease in excess tax benefits related to the vesting of restricted stock ~~awards~~awards; and ~~lower income before taxes~~

•Reduced benefits from tax credits.

Our effective tax rate was 23.3% and 20.9% for the three months ended March 31, 2022 and 2021, ~~compared to the three months ended March 31, 2020.~~

•~~The effective tax rate was 20.9% and 24.4% for the three months ended March 31, 2021 and 2020,~~ respectively.

Net income, the components of which are discussed above, decreased ~~$18~~$220 million, or 2%24%, and included the following:

•Merger-related costs, net of tax, of ~~$220 million~~$1.1 billion for the three months ended March 31, ~~2021,~~2022, compared to ~~$117~~$220 million ~~for the three months ended March 31, 2020.~~

•The negative impact of supplemental employee payroll, third-party commissions and cleaning-related COVID-19 costs, net of tax, of $86 million for the three months ended March 31, 2020, compared to no impact for the three months ended March 31, 2021.

Guarantor Financial Information

~~On April 1, 2020, in~~In connection with ~~the closing of the~~our Merger with Sprint, we assumed certain registered debt to third parties issued by Sprint, Sprint Communications LLC, formerly known as Sprint Communications, Inc. (“Sprint Communications”) and Sprint Capital Corporation (collectively, the “Sprint Issuers”). Amounts previously disclosed for the estimated values of certain acquired assets and liabilities assumed have been adjusted based on additional information arising subsequent to the initial valuation. These revisions to the estimated values did not have a significant impact on our summarized financial information for the consolidated obligor group.

Pursuant to the applicable indentures and supplemental indentures, the Senior Notes to affiliates and third parties issued by T-Mobile USA, Inc. and the Sprint Issuers (collectively, the “Issuers”) are fully and unconditionally guaranteed, jointly and severally, on a senior unsecured basis by T-Mobile (“Parent”) and certain of Parent’s 100% owned subsidiaries (“Guarantor Subsidiaries”).

Pursuant to the applicable indentures and supplemental indentures, the Senior Secured Notes to third parties issued by T-Mobile USA, Inc. are fully and unconditionally guaranteed, jointly and severally, on a senior secured basis by Parent and the Guarantor

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Subsidiaries, except for the ~~Unsecured Guarantees~~guarantees of Sprint, ~~Corporation,~~ Sprint Communications ~~Inc.,~~ and Sprint Capital Corporation, which are provided on a senior unsecured basis.

The guarantees of the Guarantor Subsidiaries are subject to release in limited circumstances only upon the occurrence of certain customary conditions. The indentures, supplemental indentures and credit agreements governing the long-term debt contain covenants that, among other things, limit the ability of the Issuers or borrowers and the Guarantor Subsidiaries to incur more debt, pay dividends and make distributions, make certain investments, repurchase stock, create liens or other encumbrances, enter into transactions with affiliates, enter into transactions that restrict dividends or distributions from subsidiaries, and merge, consolidate or sell, or otherwise dispose of, substantially all of their assets. Certain provisions of each of the credit agreements, indentures and supplemental indentures relating to the long-term debt restrict the ability of the Issuers or borrowers to loan funds or make payments to Parent. However, the Issuers or borrowers and Guarantor Subsidiaries are allowed to make certain permitted payments to Parent under the terms of the indentures, supplemental indentures and credit agreements.

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Basis of Presentation

The following tables include summarized financial information of the obligor groups of debt issued by T-Mobile USA, Inc., Sprint, Sprint Communications ~~Inc.,~~ and Sprint Capital Corporation. The summarized financial information of each obligor group is presented on a combined basis with balances and transactions within the obligor group eliminated. Investments in and the equity in earnings of non-guarantor subsidiaries, which would otherwise be consolidated in accordance with ~~U.S.~~ GAAP, are excluded from the below summarized financial information pursuant to SEC Regulation S-X Rule 13-01.

The summarized balance sheet information for the consolidated obligor group of debt issued by T-Mobile USA, Inc. is presented in the table below:

(in millions) March 31, 2021 December 31, 2020
Current assets $ 17,615 $ 22,638
Noncurrent assets 173,783 165,294
Current liabilities 17,959 19,982
Noncurrent liabilities 117,678 112,930
Due to non-guarantors 7,697 7,433
Due to related parties 4,829 4,873
Due from related parties 20 22


(in millions)	March 31, 2022		December 31, 2021
Current assets	$	16,068	$	19,522
Noncurrent assets	182,515		174,980
Current liabilities	20,188		22,195
Noncurrent liabilities	122,025		115,126
Due to non-guarantors	8,554		8,208

Due to related parties	2,815		3,842

The summarized results of operations information for the consolidated obligor group of debt issued by T-Mobile USA, Inc. is presented in the table below:

Three Months Ended March 31, 2021 Year Ended December 31, 2020
(in millions)
Total revenues $ 19,429 $ 67,112
Operating income 1,429 4,335
Net income 335 1,148
Revenue from non-guarantors 404 1,496
Operating expenses to non-guarantors 656 2,127
Other expense to non-guarantors (36) (114)


	Three Months Ended March 31, 2022		Year Ended December 31, 2021
(in millions)
Total revenues	$	19,477	$	78,538
Operating income	891		3,835
Net (loss) income	(48)		402
Revenue from non-guarantors	578		1,769
Operating expenses to non-guarantors	653		2,655
Other expense to non-guarantors	(41)		(148)

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

(in millions) March 31, 2021 December 31, 2020
Current assets $ 620 $ 2,646
Noncurrent assets 29,521 26,278
Current liabilities 4,192 4,209
Noncurrent liabilities 69,002 65,161
Due from non-guarantors 29,257 25,993
Due to related parties 4,789 4,786


(in millions)	March 31, 2022		December 31, 2021
Current assets	$	7,992	$	11,969
Noncurrent assets	12,038		10,347
Current liabilities	13,237		15,136
Noncurrent liabilities	69,674		70,262

Due from non-guarantors	88		1,787
Due to related parties	2,815		3,842

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The summarized results of operations information for the consolidated obligor group of debt issued by Sprint and Sprint Communications ~~Inc., since the acquisition of Sprint on April 1, 2020,~~ is presented in the table below:

Three Months Ended March 31, 2021 Nine Months Ended December 31, 2020
(in millions)
Total revenues $ 2 $ 10
Operating loss (1) (15)
Net loss (495) (2,229)
Revenue from non-guarantors 2 6
Other income, net, from non-guarantors 680 1,084


	Three Months Ended March 31, 2022		Year Ended December 31, 2021
(in millions)
Total revenues	$	1	$	7
Operating loss	(529)		(751)
Net loss	(851)		(2,161)


Other income, net, from non-guarantors	337		1,706

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

(in millions) March 31, 2021 December 31, 2020
Current assets $ 620 $ 2,646
Noncurrent assets 38,586 35,330
Current liabilities 4,263 4,281
Noncurrent liabilities 74,083 70,253
Due from non-guarantors 38,322 35,046
Due to related parties 4,789 4,786


(in millions)	March 31, 2022		December 31, 2021
Current assets	$	7,992	$	11,969
Noncurrent assets	21,043		19,375
Current liabilities	13,307		15,208
Noncurrent liabilities	75,125		75,753

Due from non-guarantors	9,093		10,814
Due to related parties	2,815		3,842

The summarized results of operations information for the consolidated obligor group of debt issued by Sprint Capital Corporation ~~since the acquisition of Sprint on April 1, 2020,~~ is presented in the table below:

Three Months Ended March 31, 2021 Nine Months Ended December 31, 2020
(in millions)
Total revenues $ 2 $ 10
Operating loss (1) (15)
Net loss (475) (2,165)
Revenue from non-guarantors 2 6
Other income, net, from non-guarantors 773 1,085


	Three Months Ended March 31, 2022		Year Ended December 31, 2021
(in millions)
Total revenues	$	1	$	7
Operating loss	(529)		(751)
Net loss	(832)		(2,590)


Other income, net, from non-guarantors	430		2,076

Affiliates Whose Securities Collateralize ~~Securities Registered or Being Registered~~the Senior Secured Notes

~~For a description of the~~The collateral arrangements relating to securities of affiliates that collateralize the Senior Secured Notes ~~please refer to~~are the same as those described in the section entitled “Affiliates Whose Securities Collateralize the Notes and the Guarantees” in the Company’s Registration Statement on Form S-4/A filed with the SEC on April ~~21, 2021,~~22, 2022, which section is incorporated herein by reference.

The assets, liabilities and results of operations of the combined affiliates whose securities are pledged as ~~Collateral~~collateral are not materially different than the corresponding amounts presented in the condensed consolidated financial statements of the Company.

Performance Measures

In managing our business and assessing financial performance, we supplement the information provided by our condensed consolidated financial statements with other operating or statistical data and non-GAAP financial measures. These operating and financial measures are utilized by our management to evaluate our operating performance and, in certain cases, our ability to meet liquidity requirements. Although companies in the wireless industry may not define each of these measures in precisely the same way, we believe that these measures facilitate comparisons with other companies in the wireless industry on key operating and financial measures.

~~The performance measures presented below include the impact of the Merger on a prospective basis from the close date of April 1, 2020. Historical results were not restated.~~

~~Customers~~

A customer is generally defined as a SIM number with a unique T-Mobile identifier which is associated with an account that generates revenue. Customers are qualified either for postpaid service utilizing phones, home internet, wearables, DIGITS or other connected devices, which include tablets and SyncUp products, where they generally pay after receiving service, or prepaid service, where they generally pay in advance of receiving service.

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~~The following table sets forth the number of ending customers:~~

As of March 31, 2021 Change
(in thousands) 2021 2020 # %
Customers, end of period
Postpaid phone customers (1)(2)
67,402 40,797 26,605 65 %
Postpaid other customers (1)(2)
15,170 7,014 8,156 116 %
Total postpaid customers 82,572 47,811 34,761 73 %
Prepaid customers (1)
20,865 20,732 133 1 %
Total customers 103,437 68,543 34,894 51 %
Acquired customers, net of base adjustments (2)
12 — 12 NM

~~NM - Not Meaningful~~

~~(1) Includes customers acquired in connection with the Merger and certain customer base adjustments. See Customer Base Adjustments and Net Customer Additions tables below.~~

~~(2) In the first quarter of 2021, we acquired 11,000 postpaid phone customers and 1,000 postpaid other customers through our acquisition of an affiliate.~~

~~Total customers increased 34,894,000, or 51%, primarily from:~~

•Higher postpaid phone customers, primarily due to customers acquired in the Merger and the success of new customer segments and rate plans and continued growth in existing and new markets, along with ongoing promotional activities;

•Higher postpaid other customers, primarily due to customers acquired in the Merger and growth in other connected devices, primarily related to public and educational sector customers and wearable products; and

•Higher prepaid customers, primarily due to the continued success of our prepaid business due to ongoing promotional activities and rate plan offers, partially offset by customer base adjustments made to align the customer reporting policies of T-Mobile and Sprint.

~~Customer Base Adjustments~~

~~Certain adjustments were made to align the customer reporting policies of T-Mobile and Sprint.~~

~~The adjustments made to the reported T-Mobile and Sprint ending customer base as of March 31, 2020, are presented below:~~

(in thousands) Postpaid phone customers Postpaid other customers Total postpaid customers Prepaid customers Total customers
Reconciliation to beginning customers
T-Mobile customers as reported, end of period March 31, 2020 40,797 7,014 47,811 20,732 68,543
Sprint customers as reported, end of period March 31, 2020 25,916 8,428 34,344 8,256 42,600
Total combined customers, end of period March 31, 2020 66,713 15,442 82,155 28,988 111,143
Adjustments
Reseller reclassification to wholesale customers (1)
(199) (2,872) (3,071) — (3,071)
EIP reclassification from postpaid to prepaid (2)
(963) — (963) 963 —
Divested prepaid customers (3)
— — — (9,207) (9,207)
Rate plan threshold (4)
(182) (918) (1,100) — (1,100)
Customers with non-phone devices (5)
(226) 226 — — —
Collection policy alignment (6)
(150) (46) (196) — (196)
Miscellaneous adjustments (7)
(141) (43) (184) (302) (486)
Total Adjustments (1,861) (3,653) (5,514) (8,546) (14,060)
Adjusted beginning customers as of April 1, 2020 64,852 11,789 76,641 20,442 97,083

(1) In connection with the closing of the Merger, we refined our definition of wholesale customers resulting in the reclassification of certain postpaid and prepaid reseller customers to wholesale customers. Starting with the three months ended March 31, 2020, we discontinued reporting wholesale customers to focus on postpaid and prepaid customers and wholesale revenues, which we consider more relevant than the number of wholesale customers given the expansion of M2M and IoT products.

~~(2) Prepaid customers with a device installment billing plan historically included as Sprint postpaid customers have been reclassified to prepaid customers to align with T-Mobile policy.~~

~~(3) Customers associated with the Sprint wireless prepaid and Boost Mobile brands that were divested on July 1, 2020, have been excluded from our reported customers.~~

~~(4) Customers who have rate plans with monthly recurring charges which are considered insignificant have been excluded from our reported customers.~~

~~(5) Customers with postpaid phone rate plans without a phone (e.g., non-phone devices) have been reclassified from postpaid phone to postpaid other customers to align with T-Mobile policy.~~

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~~(6) Certain Sprint customers subject to collection activity for an extended period of time have been excluded from our reported customers to align with T-Mobile policy.~~

~~(7) Miscellaneous insignificant adjustments to align with T-Mobile policy.~~

~~Net Customer Additions (Losses)~~

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

Three Months Ended March 31, Change
(in thousands) 2021 2020 # %
Net customer additions
Postpaid phone customers 773 452 321 71 %
Postpaid other customers 437 325 112 34 %
Total postpaid customers 1,210 777 433 56 %
Prepaid customers 151 (128) 279 NM
Total customers 1,361 649 712 110 %

~~NM - Not Meaningful~~

~~Total net customer additions increased 712,000, or 110%, primarily from:~~

•Higher postpaid phone net customer additions, primarily due to expanded retail presence as a result of the Merger and increased retail store traffic due to closures arising from the Pandemic in the prior period, as well as increased growth from T-Mobile for Business, partially offset by higher churn from customers acquired in the Merger;

•~~Higher prepaid net customer additions, primarily due to lower churn; and~~

•Higher postpaid other net customer additions, primarily due to expanded retail presence as a result of the Merger, higher gross additions from connected devices, and increased retail store traffic due to closures arising from the Pandemic in the prior period and lower churn.

~~Churn~~

Churn represents the number of customers whose service was disconnected as a percentage of the average number of customers during the specified period further divided by the number of months in the period. The number of customers whose service was disconnected is presented net of customers that subsequently have their service restored within a certain period of time. We believe that churn provides management, investors and analysts with useful information to evaluate customer retention and loyalty.

~~The following table sets forth the churn:~~

Three Months Ended March 31, Change
2021 2020
Postpaid phone churn 0.98 % 0.86 % 12 bps
Prepaid churn 2.78 % 3.52 % -74 bps

~~Postpaid phone churn increased 12 basis points, primarily due to the inclusion of the customer base acquired in the Merger with higher churn.~~

~~Prepaid churn decreased 74 basis points, primarily due to lower switching activity and improved quality of recently acquired customers.~~

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Total Postpaid Accounts

A postpaid account is generally defined as a billing account number that generates revenue. Postpaid accounts ~~are~~ generally ~~comprised~~consist of customers that are qualified for postpaid service utilizing phones, ~~home internet,~~High Speed Internet, wearables, DIGITS or other connected devices, which include tablets and SyncUp products, where they generally pay after receiving service.


		As of March 31, 2021		Change			As of March 31,	Change
(in thousands)	(in thousands)	2021	2020	#	%				(in thousands)	2022	2021	#	%
Accounts, end of period

Total postpaid customer accounts~~(1)~~(2)	Total postpaid customer accounts~~(1)~~(2)	26,014	15,244	10,770	71	%			Total postpaid customer accounts~~(1)~~(2)	27,507	26,014	1,493	6	%

(1) ~~Includes accounts acquired in connection with~~Customers impacted by the ~~Merger and certain~~decommissioning of the legacy Sprint CDMA network, who did not migrate to the T-Mobile network, have been excluded from our postpaid account base ~~adjustments. See Account Base Adjustments table below.~~resulting in the removal of 57,000 postpaid accounts in the first quarter of 2022.

(2) In the first quarter of 2021, we acquired 4,000 postpaid accounts through our acquisition of an affiliate.

Total postpaid customer accounts increased ~~10,770,000,~~1,493,000, or ~~71%~~6%, primarily due to ~~10,150,000 accounts acquired in~~ the ~~Merger, the success of~~continued focus on growing new ~~customer segments~~relationships with customers driven by higher switching activity and ~~rate plans, continued~~ growth in ~~existing~~new and ~~new markets,~~under-penetrated segments, including ~~our home internet product, along with ongoing promotional activities.~~High Speed Internet.

Postpaid Net Account ~~Base Adjustments~~

~~Certain adjustments were made to align the account reporting policies of T-Mobile and Sprint.~~Additions

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


	Three Months Ended March 31,	Change
(in thousands)		2022	2021	#	%

Postpaid net account additions		348	257	91	35	%

Postpaid net account additions increased 91,000, or 35%, primarily due to the ~~reported~~continued focus on growing new relationships with customers driven by higher switching activity and growth in new and under-penetrated segments, including High Speed Internet.

Customers

A customer is generally defined as a SIM number with a unique T-Mobile identifier which is associated with an account that generates revenue. Customers are qualified either for postpaid service utilizing phones, High Speed Internet, wearables, DIGITS or other connected devices, which include tablets and ~~Sprint~~SyncUp products, where they generally pay after receiving service, or prepaid service, where they generally pay in advance of receiving service.

The following table sets forth the number of ending ~~account base as of March 31, 2020 are presented below:~~


~~(in thousands)~~						~~Postpaid Accounts~~
~~Reconciliation to beginning accounts~~
~~T-Mobile accounts as reported, end of period March 31, 2020~~						~~15,244~~
~~Sprint accounts, end of period March 31, 2020~~						~~11,246~~
~~Total combined accounts, end of period March 31, 2020~~						~~26,490~~
~~Adjustments~~
~~Reseller reclassification to wholesale accounts~~ ~~(1)~~						~~(1)~~
~~EIP reclassification from postpaid to prepaid~~ ~~(2)~~						~~(963)~~
~~Rate plan threshold~~ ~~(3)~~						~~(18)~~
~~Collection policy alignment~~ ~~(4)~~						~~(76)~~
~~Miscellaneous adjustments~~ ~~(5)~~						~~(47)~~
~~Total Adjustments~~						~~(1,105)~~
~~Adjusted beginning accounts as of April 1, 2020~~						~~25,385~~

customers:


	As of March 31,		Change
(in thousands)	2022	2021	#	%
Customers, end of period

Postpaid phone customers (1) (2)	70,656	67,402	3,254	5	%
Postpaid other customers (1) (2)	17,767	15,170	2,597	17	%

Total postpaid customers	88,423	82,572	5,851	7	%
Prepaid customers	21,118	20,865	253	1	%

Total customers	109,541	103,437	6,104	6	%
Acquired customers, net of base adjustments (1) (2)	(558)	12	(570)	NM

(1) ~~In connection with~~Customers impacted by the ~~closing~~decommissioning of the ~~Merger, we refined our definition of wholesale accounts resulting in~~legacy Sprint CDMA network, who did not migrate to the ~~reclassification of certain postpaid and prepaid reseller accounts to wholesale accounts.~~

~~(2) Prepaid accounts with a customer with a device installment billing plan historically included as Sprint postpaid accounts have been reclassified to prepaid accounts to align with~~ T-Mobile ~~policy.~~

~~(3) Accounts with customers who have rate plans with monthly recurring charges which are considered insignificant~~network, have been excluded from our ~~reported accounts.~~postpaid customer base resulting in the removal of 212,000 postpaid phone customers and 349,000 postpaid other customers in the first quarter of 2022. In connection with our acquisition of companies, we included a base adjustment in the first quarter of 2022 to increase postpaid phone customers by 17,000 and reduce postpaid other customers by 14,000.

~~(4) Certain Sprint accounts subject to collection activity for~~(2) In the first quarter of 2021, we acquired 11,000 postpaid phone customers and 1,000 postpaid other customers through our acquisition of an ~~extended period of time have been excluded from our reported accounts to align with T-Mobile policy.~~affiliate.

~~(5) Miscellaneous insignificant adjustments to align with T-Mobile policy.~~

NM - Not Meaningful

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Total customers increased 6,104,000, or 6%, primarily from:

•Higher postpaid phone customers, primarily due to the continued focus on growing new relationships with customers, driven by higher switching activity and growth in new and under-penetrated segments;

•Higher postpaid other customers, primarily due to growth in other connected devices, including growth in High Speed Internet and wearable products; and

•Higher prepaid customers, primarily due to the continued success of our prepaid business due to promotional activity and rate plan offers; partially offset by lower prepaid industry demand associated with continued industry shift to postpaid plans.

Total customers included High Speed Internet customers of 984,000 and 193,000 as of March 31, 2022 and 2021, respectively.

Net Customer Additions

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


	Three Months Ended March 31,		Change
(in thousands)		2022	2021		#	%
Net customer additions

Postpaid phone customers			589	773		(184)	(24)	%
Postpaid other customers			729	437		292	67	%

Total postpaid customers			1,318	1,210		108	9	%
Prepaid customers			62	151		(89)	(59)	%

Total customers			1,380	1,361		19	1	%
Acquired customers, net of base adjustments			(558)	12		(570)	NM

NM - Not Meaningful

Total net customer additions increased 19,000, or 1%, primarily from:

•Higher postpaid other net customer additions, primarily due to an increase in High Speed Internet customers, connected devices and wearables; partially offset by

•Lower postpaid phone net customer additions driven by a focus on deepening Sprint customer relationships in the prior year in order to decrease churn, as Sprint customers historically had fewer lines per account, partially offset by higher industry switching activity and lower churn; and

•Lower prepaid net customer additions associated with the continued industry shift to postpaid plans, partially offset by lower churn.

•High Speed Internet net customer additions included in postpaid other net customer additions were 329,000 and 93,000 for the three months ended March 31, 2022 and 2021, respectively. High Speed Internet net customer additions included in prepaid net customer additions were 9,000 for the three months ended March 31, 2022. There were no prepaid High Speed Internet customer additions for the three months ended March 31, 2021.

Churn

The following table sets forth the churn:


		Three Months Ended March 31,				Change
	2022		2021
Postpaid phone churn				0.93	%	0.98	%	-5 bps
Prepaid churn				2.67	%	2.78	%	-11 bps

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Postpaid phone churn decreased 5 basis points, primarily from:

•Reduced Sprint churn as we progress through the integration process; partially offset by

•More normalized switching activity relative to the muted Pandemic-driven conditions a year ago.

Prepaid churn decreased 11 basis points, primarily from:

•Promotional activity; partially offset by

•More normalized switching activity relative to the muted Pandemic-driven conditions a year ago.

Average Revenue Per Account

Average Revenue per Account (“ARPA”) represents the average monthly postpaid service revenue earned per account. We believe postpaid ARPA provides management, investors and analysts with useful information to assess and evaluate our postpaid service revenue realization and assist in forecasting our future postpaid service revenues on a per account basis. We consider postpaid ARPA to be indicative of our revenue growth potential given the increase in the average number of postpaid phone customers per account and increases in postpaid other customers, including High Speed Internet, wearables, DIGITS or other connected devices, which include tablets and SyncUp products.

The following table sets forth our operating measure ARPA:


(in dollars)	Three Months Ended March 31,	Change
				2022			2021	$		%





Postpaid ARPA		$	136.53		$	132.91		$	3.62	3	%

Postpaid ARPA increased $3.62, or 3%, primarily from:

•Higher premium services, including Magenta Max; and

•An increase in customers per account, including from the success of High Speed Internet; partially offset by

•Increased promotional activity.

Average Revenue Per User

ARPU represents the average monthly service revenue earned from customers. We believe ARPU provides management, investors and analysts with useful information to assess and evaluate our service revenue per customer and assist in forecasting our future service revenues generated from our customer base. Postpaid phone ARPU excludes postpaid other customers and related revenues, which include ~~home internet,~~High Speed Internet, wearables, DIGITS and other connected devices such as tablets and SyncUp products.

The following table ~~illustrates the calculation of~~sets forth our operating measure ~~ARPU and reconciles this measure to the related service revenues:~~ARPU:

(in millions, except average number of customers and ARPU) Three Months Ended March 31, Change
2021 2020 $ %
Calculation of Postpaid Phone ARPU
Postpaid service revenues $ 10,303 $ 5,887 $ 4,416 75 %
Less: Postpaid other revenues (820) (310) (510) 165 %
Postpaid phone service revenues 9,483 5,577 3,906 70 %
Divided by: Average number of postpaid phone customers (in thousands) and number of months in period 66,834 40,585 26,249 65 %
Postpaid phone ARPU $ 47.30 $ 45.80 $ 1.50 3 %
Calculation of Prepaid ARPU
Prepaid service revenues $ 2,351 $ 2,373 $ (22) (1) %
Divided by: Average number of prepaid customers (in thousands) and number of months in period 20,728 20,759 (31) — %
Prepaid ARPU $ 37.81 $ 38.11 $ (0.30) (1) %


(in dollars)	Three Months Ended March 31,	Change
				2022			2021	$		%







Postpaid phone ARPU		$	48.41		$	47.30		$	1.11	2	%












Prepaid ARPU		$	39.19		$	37.81		$	1.38	4	%

Postpaid Phone ARPU

Postpaid phone ARPU increased ~~$1.50,~~$1.11, or 3%2%, and was primarily ~~due to:~~impacted by:

•The net impact of customers acquired in the Merger, which have higher ARPU (net of changes arising from the reduction in base due to policy adjustments and reclassification of certain ARPU components from the acquired customers being moved to other revenue lines); and

•Higher premium ~~service revenues;~~services, including Magenta Max; partially offset by

•~~Ongoing~~Increased promotional activity.

Prepaid ARPU

Prepaid ARPU ~~decreased $0.30,~~increased $1.38, or 1%4%, primarily due to ~~ongoing promotional activity.~~

~~Average Revenue Per Account~~

Average Revenue per Account (“ARPA”) represents the average monthly postpaid service revenue earned per account. We believe postpaid ARPA provides management, investors and analysts with useful information to assess and evaluate our postpaid service revenue realization and assist in forecasting our future postpaid service revenues on a per account basis. We consider postpaid ARPA to be indicative of our revenue growth potential given the increase in the average number of postpaid phone customers per account and increases in postpaid other customers, including home internet, wearables, DIGITS or other connected devices, which include tablets and SyncUp products.higher premium services.

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~~The following table illustrates the calculation of our operating measure ARPA and reconciles this measure to the related service revenues:~~

(in millions, except average number of accounts, ARPA) Three Months Ended March 31, Change
2021 2020 $ %
Calculation of Postpaid ARPA
Postpaid service revenues $ 10,303 $ 5,887 $ 4,416 75 %
Divided by: Average number of postpaid accounts (in thousands) and number of months in period 25,840 15,155 10,685 71 %
Postpaid ARPA $ 132.91 $ 129.47 $ 3.44 3 %

~~Postpaid ARPA~~

~~Postpaid ARPA increased $3.44, or 3%, primarily due to:~~

•~~An increase in customers per account, including further penetration in connected devices;~~

•~~Higher premium service revenues; and~~

•~~The net impact of customers acquired in the Merger; partially offset by~~

•~~Ongoing promotional activity.~~

Adjusted EBITDA and Core Adjusted EBITDA

Beginning in the first quarter of 2021, we are disclosing Core Adjusted EBITDA as a financial measure to improve comparability as we de-emphasize device leasing programs as part of our value proposition.

Adjusted EBITDA represents earnings before Interest expense, net of Interest income, Income tax expense, Depreciation and amortization, stock-based compensation and certain income and expenses not reflective of our ongoing operating performance. Core Adjusted EBITDA represents Adjusted EBITDA less device lease revenues. ~~Net income margin represents Net income divided by Service revenues.~~ Adjusted EBITDA margin represents Adjusted EBITDA divided by Service revenues. Core Adjusted EBITDA margin represents Core Adjusted EBITDA divided by Service revenues.

Adjusted EBITDA, Adjusted EBITDA margin, Core Adjusted EBITDA and Core Adjusted EBITDA margin are non-GAAP financial measures utilized by our management to monitor the financial performance of our operations. We use Adjusted EBITDA internally as a measure to evaluate and compensate our personnel and management for their performance. We use Adjusted EBITDA and Core Adjusted EBITDA as benchmarks to evaluate our operating performance in comparison to our competitors. Management believes analysts and investors use Adjusted EBITDA and Core Adjusted EBITDA as supplemental measures to evaluate overall operating performance and facilitate comparisons with other wireless communications services companies because they are indicative of our ongoing operating performance and trends by excluding the impact of interest expense from financing, non-cash depreciation and amortization from capital investments, stock-based compensation and Merger-related costs including network decommissioning costs, ~~and incremental costs directly attributable to the Pandemic,~~ as they are not indicative of our ongoing operating performance, as well as certain ~~other~~ nonrecurring income and expenses. Management believes analysts and investors use Core Adjusted EBITDA because it normalizes for the transition in the Company’s device financing strategy, by excluding the impact of device lease revenues from Adjusted EBITDA, to align with the exclusion of the related depreciation expense on leased devices from Adjusted EBITDA. Adjusted EBITDA, Adjusted EBITDA margin, Core Adjusted EBITDA and Core Adjusted EBITDA margin have limitations as analytical tools and should not be considered in isolation or as substitutes for income from operations, net income or any other measure of financial performance reported in accordance with ~~U.S. Generally Accepted Accounting Principles (“GAAP”).~~GAAP.

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

Three Months Ended March 31, Change
(in millions) 2021 2020 $ %
Net income $ 933 $ 951 $ (18) (2) %
Adjustments:
Interest expense 792 185 607 328 %
Interest expense to affiliates 46 99 (53) (54) %
Interest income (3) (12) 9 (75) %
Other expense, net 125 10 115 NM
Income tax expense 246 306 (60) (20) %
Operating income 2,139 1,539 600 39 %
Depreciation and amortization 4,289 1,718 2,571 150 %
Stock-based compensation (1)
130 123 7 6 %
Merger-related costs 298 143 155 108 %
COVID-19-related costs — 117 (117) (100) %
Other, net (2)
49 25 24 96 %
Adjusted EBITDA 6,905 3,665 3,240 88 %
Lease revenues (1,041) (165) (876) 531 %
Core Adjusted EBITDA $ 5,864 $ 3,500 $ 2,364 68 %
Net income margin (Net income divided by Service revenues) 7 % 11 % -400 bps
Adjusted EBITDA margin (Adjusted EBITDA divided by Service revenues) 49 % 41 % 800 bps
Core Adjusted EBITDA margin (Core Adjusted EBITDA divided by Service revenues) 41 % 40 % 100 bps

~~NM - Not Meaningful~~


	Three Months Ended March 31,		Change
(in millions)		2022				2021				$	%

Net income			$	713			$	933			$	(220)	(24)	%
Adjustments:


Interest expense, net			864				835				29		3	%


Other expense, net			11				125				(114)		(91)	%
Income tax expense			218				246				(28)		(11)	%

Operating income			1,806				2,139				(333)		(16)	%
Depreciation and amortization			3,585				4,289				(704)		(16)	%


Stock-based compensation (1)			136				130				6		5	%
Merger-related costs			1,413				298				1,115		374	%


Other, net (2)			10				49				(39)		(80)	%

Adjusted EBITDA			6,950				6,905				45		1	%
Lease revenues			(487)				(1,041)				554		(53)	%
Core Adjusted EBITDA			$	6,463			$	5,864			$	599	10	%
Net income margin (Net income divided by Service revenues)			5		%		7		%				-200 bps
Adjusted EBITDA margin (Adjusted EBITDA divided by Service revenues)			46		%		49		%				-300 bps
Core Adjusted EBITDA margin (Core Adjusted EBITDA divided by Service revenues)			43		%		41		%				200 bps

(1)Stock-based compensation includes payroll tax impacts and may not agree towith stock-based compensation expense in the condensed consolidated financial statements. Additionally, certain stock-based compensation expenses associated with the Transactions have been included in Merger-related costs.

(2)Other, net may not agree towith the Condensed Consolidated Statements of Comprehensive Income primarily due to certain non-routine operating activities, such as other special items that would not be expected to reoccur or are not reflective of T-Mobile’s ongoing operating performance, and are, therefore, excluded infrom Adjusted EBITDA and Core Adjusted EBITDA.

Core Adjusted EBITDA increased ~~$3.2 billion~~$599 million, or ~~88%.~~10%, for the three months ended March 31, 2022. The components comprising Core Adjusted EBITDA are discussed further above.

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The increase was primarily due to:

•Higher Total service revenues; and

•~~Higher Equipment revenues, including an increase in lease revenues~~Lower Cost of ~~$876 million;~~services, excluding Merger-related costs; partially offset by

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

•~~Higher Cost of services expenses, excluding Merger-related costs; and~~

•Higher Selling, general and administrative expenses, excluding Merger-related ~~costs~~costs; and ~~supplemental employee payroll, third-party commissions and cleaning-related COVID-19 costs.~~

•Lower Equipment revenues, excluding Lease revenues.

~~Core~~ Adjusted EBITDA increased ~~$2.4 billion~~$45 million, or ~~68%.~~1%, for the three months ended March 31, 2022. The ~~increase~~change was primarily due to anthe increase in Core Adjusted EBITDA, as discussed above, ~~excluding lease revenues.~~partially offset by a decrease in Lease revenues of $554 million for the three months ended March 31, 2022.

Liquidity and Capital Resources

Our principal sources of liquidity are our cash and cash equivalents and cash generated from operations, proceeds from issuance of ~~long-term~~ debt and common stock, financing leases, the sale of certain receivables ~~financing arrangements of vendor payables which effectively extend payment terms~~ and the Revolving Credit Facility (as defined below). Further, the incurrence of additional indebtedness may inhibit our ability to incur new debt under the terms governing our existing and future indebtedness, which may make it more difficult for us to incur new debt in the future to finance our business strategy.

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Cash Flows

The following is a condensed schedule of our cash ~~flows for the three months ended March 31, 2021 and 2020:~~

Three Months Ended March 31, Change
(in millions) 2021 2020 $ %
Net cash provided by operating activities $ 3,661 $ 1,617 $ 2,044 126 %
Net cash used in investing activities (11,239) (1,580) (9,659) 611 %
Net cash provided by (used in) financing activities 3,874 (453) 4,327 NM

~~NM - Not meaningful~~flows:


	Three Months Ended March 31,	Change
(in millions)		2022		2021		$		%
Net cash provided by operating activities		$	3,845	$	3,661	$	184	5	%
Net cash used in investing activities		(5,092)		(11,239)		6,147		(55)	%
Net cash (used in) provided by financing activities		(2,136)		3,874		(6,010)		(155)	%

Operating Activities

Net cash provided by operating activities increased ~~$2.0 billion,~~$184 million, or ~~126%~~5%, primarily from:

•A ~~$2.5~~$1.0 billion ~~increase in Net income, adjusted for non-cash income and expense; partially offset by~~

•~~A $436 million increase~~decrease in net cash outflows from changes in working capital, primarily due to ~~higher~~lower use of cash from Accounts payable and accrued liabilities, ~~Equipment installment plan receivables and Other current~~Short- and long-term operating lease liabilities and Operating lease right-of-use assets, partially offset by ~~lower~~higher use of cash from Accounts receivable and ~~Inventories.~~Inventories; partially offset by

•An $820 million decrease in Net income, adjusted for non-cash income and expense.

•Net cash provided by operating activities includes $893 million and $277 million ~~and $161 million~~ in net payments for Merger-related costs for the three months ended March 31, ~~2021~~2022 and ~~2020,~~2021, respectively.

Investing Activities

Net cash used in investing activities ~~increased $9.7~~decreased $6.1 billion, or ~~611%~~55%. The use of cash was primarily from:

•$8.9 billion in Purchases of spectrum licenses and other intangible assets, including deposits, primarily due to $8.9 billion paid for spectrum licenses won at the conclusion of Auction 107 in March 2021; and

•~~$3.2~~3.4 billion in Purchases of property and equipment, including capitalized interest, from network integration related to the Merger and the ~~continued~~accelerated build-out of our nationwide 5G network;

•$2.8 billion in Purchases of spectrum licenses and other intangible assets, including deposits, primarily due to $2.8 billion paid for spectrum licenses won at the conclusion of Auction 110 in February 2022; partially offset by

•$~~891 million~~1.2 billion in Proceeds related to beneficial interests in securitization transactions.

Financing Activities

Net cash provided by ~~(used in)~~ financing activities ~~increased $4.3 billion.~~decreased $6.0 billion, or 155%. The ~~source~~use of cash was primarily from:

•$~~6.8 billion in Proceeds from issuance of long-term debt, net of issuance costs, from the issuance of $6.8 billion in Senior Notes; partially offset by~~

•~~$2.2~~1.6 billion in Repayments of long-term ~~debt driven by the redemption~~debt;

Table of ~~$2.0 billion aggregate principal amount of our 6.500% Senior Notes due 2026 and repayments of $219 million aggregate principal amount of our 3.360% Senior Secured Series 2016-1 A-1 Notes due 2021;~~Contents

•$~~287~~302 million in Repayments of financing lease obligations; and

•$~~218~~172 million in Tax withholdings on share-based awards.

Cash and Cash Equivalents

As of March 31, ~~2021,~~2022, our Cash and cash equivalents were ~~$6.7~~$3.2 billion compared to ~~$10.4~~$6.6 billion at December 31, ~~2020.~~2021.

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Free Cash Flow

Free Cash Flow represents Net cash provided by operating activities less cash payments for Purchases of property and equipment, including Proceeds related to beneficial interests in securitization transactions, less Cash payments for debt prepayment or debt extinguishment. Free Cash Flow is a non-GAAP financial measure utilized by ~~our~~ management, investors and analysts of our financial information to evaluate cash available to pay debt and provide further investment in the business.

The table below provides a reconciliation of Free Cash Flow to Net cash provided by operating activities, which we consider to

be the most directly comparable GAAP financial measure.

Three Months Ended March 31, Change
(in millions) 2021 2020 $ %
Net cash provided by operating activities $ 3,661 $ 1,617 $ 2,044 126 %
Cash purchases of property and equipment (3,183) (1,753) (1,430) 82 %
Proceeds related to beneficial interests in securitization transactions 891 868 23 3 %
Cash payments for debt prepayment or debt extinguishment costs (65) — (65) NM
Free Cash Flow $ 1,304 $ 732 $ 572 78 %

~~NM - Not Meaningful~~


	Three Months Ended March 31,		Change
(in millions)		2022	2021				$	%

Net cash provided by operating activities			$	3,845	$	3,661		$	184	5	%
Cash purchases of property and equipment			(3,381)		(3,183)			(198)		6	%

Proceeds related to beneficial interests in securitization transactions			1,185		891			294		33	%
Cash payments for debt prepayment or debt extinguishment costs			—		(65)			65		(100)	%
Free Cash Flow			$	1,649	$	1,304		$	345	26	%

Free Cash Flow increased ~~$572~~$345 million, or ~~78%~~26%. The increase was primarily impacted by the following:

•Higher Proceeds related to beneficial interests in securitization transactions; and

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

•Higher Cash purchases of property and equipment, including capitalized interest of $84 million and $112 million for the three months ended March 31, 2021 and 2020, respectively, from network integration related to the Merger and the continued build-out of our nationwide 5G network.interest.

•Free Cash Flow includes $893 million and $277 million ~~and $161 million~~ in net payments for Merger-related costs for the three months ended March 31, ~~2021~~2022 and ~~2020,~~2021, respectively.

Borrowing Capacity

We maintain a financing arrangement with Deutsche Bank AG, which allows for up to $108 million in borrowings. Under the financing arrangement, we can effectively extend payment terms for invoices payable to certain vendors. As of March 31, 2021, there were no outstanding balances under such financing arrangement.

We also maintain vendor financing arrangements primarily with our main network equipment suppliers. Under the respective agreements, we can obtain extended financing terms. During the three months ended March 31, 2021, we repaid $55 million associated with the vendor financing arrangements and other financial liabilities. These payments are included in Repayments of short-term debt for purchases of inventory, property and equipment and other financial liabilities, in our Condensed Consolidated Statements of Cash Flows. As of March 31, 2021, the outstanding balance under the vendor financing arrangements and other financial liabilities was $186 million, of which $96 million was assumed in connection with the closing of the Merger. As of March 31, 2020, there were no outstanding borrowings under the vendor financing agreements.

We maintain a revolving credit facility (the “Revolving Credit Facility”) with an aggregate commitment amount of $5.5 billion. As of March 31, ~~2021,~~2022, there was no outstanding balance under the Revolving Credit Facility.

On October 30, 2020, we entered into a $5.0 billion senior secured term loan commitment with certain financial institutions. On January 14, 2021, we issued an aggregate of $3.0 billion of Senior Notes. The senior secured term loan commitment was reduced by an amount equal to the aggregate gross proceeds of the Senior Notes, which reduced the commitment to $2.0 billion. On March 23, 2021, we issued an aggregate of $3.8 billion of Senior Notes. The senior secured term loan commitment was terminated upon the issuance of the $3.8 billion of Senior Notes.

Debt Financing

As of March 31, ~~2021,~~2022, our total debt and financing lease liabilities were ~~$77.9~~$75.0 billion, excluding our tower obligations, of which ~~$71.1~~$68.4 billion was classified as long-term debt and ~~$1.3~~$1.4 billion was classified as long-term financing lease liabilities.

During the three months ended March 31, ~~2021,~~2022, we ~~issued long-term debt for net proceeds of $6.8 billion and redeemed and~~ repaid short- and long-term debt with an aggregate principal amount of ~~$2.3~~$1.6 billion.

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There were no new issuances or borrowings during the three months ended March 31, 2022.

Subsequent to March 31, 2022, on April 15, 2022, we repaid at maturity $1.25 billion of our 5.375% Senior Notes to affiliates due 2022.

For more information regarding our debt financing transactions, see Note 76 -– Debt of the Notes to the Condensed Consolidated Financial Statements.

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Spectrum Auction

In ~~March 2021,~~January 2022, the FCC announced that we were the winning bidder of ~~142~~199 licenses in Auction ~~107 (C-band~~110 (mid-band spectrum) for an aggregate purchase price of ~~$9.3 billion, excluding relocation costs.~~$2.9 billion. At the inception of Auction ~~107~~110 in ~~October 2020,~~September 2021, we deposited ~~$438~~$100 million. ~~Upon conclusion of Auction 107 in March 2021, we~~We paid the FCC the remaining ~~$8.9~~$2.8 billion for the licenses won in the ~~auction. We expect to incur an additional $1.2 billion~~auction in ~~relocation costs which will be paid through 2024.~~February 2022.

For more information regarding our spectrum licenses, see Note 54 - ~~Goodwill,~~– Spectrum License Transactions ~~and Other Intangible Assets~~ of the Notes to the Condensed Consolidated Financial Statements.

Off-Balance Sheet Arrangements

We have arrangements, as amended from time to time, to sell certain EIP accounts receivable and service accounts receivable on a revolving basis as a source of liquidity. As of March 31, ~~2021,~~2022, we derecognized net receivables of $2.5 billion upon sale through these arrangements.

For more information regarding these off-balance sheet arrangements, see Note 4 3 – Sales of Certain Receivables of the Notes to the Condensed Consolidated Financial Statements.

Future Sources and Uses of Liquidity

We may seek additional sources of liquidity, including through the issuance of additional ~~long-term~~ debt, ~~in 2021,~~ to continue to opportunistically acquire spectrum licenses or other assets in private party transactions or for the refinancing of existing long-term debt on an opportunistic basis. Excluding liquidity that could be needed for spectrum acquisitions, or for other assets, we expect our principal sources of funding to be sufficient to meet our anticipated liquidity needs for business operations for the next 12 months as well as our longer-term liquidity needs. Our intended use of any such funds is for general corporate purposes, including for capital expenditures, spectrum purchases, opportunistic investments and acquisitions, redemption of ~~high yield callable~~ debt, tower obligations and the execution of our integration plan.

We determine future liquidity requirements, for both operations and capital expenditures, based in large part upon projected financial and operating performance, and opportunities to acquire additional spectrum. We regularly review and update these projections for changes in current and projected financial and operating results, general economic conditions, the competitive landscape and other factors. We have incurred, and will incur, substantial expenses to comply with the Government Commitments, and we are also expected to incur substantial restructuring expenses in connection with integrating and coordinating T-Mobile’s and Sprint’s businesses, operations, policies and procedures. See “Restructuring” of this MD&A. While we have assumed that a certain level of Merger-related expenses will be incurred, factors beyond our control, including required consultation and negotiation with certain counterparties, could affect the total amount or the timing of these expenses. These expenses could exceed the costs historically borne by us and adversely affect our financial condition and results of operations. There are a number of additional risks and uncertainties, including those due to the impact of the Pandemic, that could cause our financial and operating results and capital requirements to differ materially from our projections, which could cause future liquidity to differ materially from our assessment.

The indentures, supplemental indentures and credit agreements governing our long-term debt to affiliates and third parties, excluding financing leases, contain covenants that, among other things, limit the ability of the Issuers or borrowers and the Guarantor Subsidiaries to incur more debt, pay dividends and make distributions on our common stock, make certain investments, repurchase stock, create liens or other encumbrances, enter into transactions with affiliates, enter into transactions that restrict dividends or distributions from subsidiaries, and merge, consolidate or sell, or otherwise dispose of, substantially all of their assets. Certain provisions of each of the credit agreements, indentures and supplemental indentures relating to the long-term debt to affiliates and third parties restrict the ability of the Issuers or borrowers to loan funds or make payments to Parent. However, the Issuers or borrowers are allowed to make certain permitted payments to Parent under the terms of each of the credit agreements, indentures and supplemental indentures relating to the long-term debt to affiliates and third parties. We were in compliance with all restrictive debt covenants as of March 31, ~~2021.~~2022.

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~~Shentel Wireless Asset Acquisition~~

Sprint PCS (specifically Sprint Spectrum L.P.) is party to a variety of publicly filed agreements with Shentel, pursuant to which Shentel is the exclusive provider of Sprint PCS’s wireless mobility communications network products in certain parts of Maryland, North Carolina, Virginia, West Virginia, Kentucky, Ohio and Pennsylvania. Pursuant to one such agreement, the Sprint PCS Management Agreement, dated November 5, 1999 (as amended, supplemented and modified from time to time, the “Management Agreement”), Sprint PCS was granted an option to purchase Shentel’s wireless telecommunications assets used to provide services pursuant to the Management Agreement. On August 26, 2020, Sprint, now our indirect subsidiary, on behalf of and as the direct or indirect owner of Sprint PCS, exercised its option by delivering a binding notice of exercise to Shentel. T-Mobile’s exercise of its option triggered a requirement for the parties to engage three independent valuation providers to calculate the “entire business value” (the “Entire Business Value”) of such wireless telecommunications assets, pursuant to a formula and valuation process prescribed in the Management Agreement.

On February 1, 2021, in accordance with the Management Agreement and other agreed-upon terms, the Entire Business Value of Shentel’s wireless telecommunications assets used to provide services pursuant to the Management Agreement was determined to be $2.1 billion, and correspondingly, the base purchase price for such wireless telecommunications assets shall be ninety percent (90%) of that Entire Business Value amount ($1.9 billion), subject to certain other purchase price adjustments prescribed by the Management Agreement and such additional purchase price adjustments agreed by the parties. The parties are negotiating the remaining outstanding terms of a definitive agreement to govern the purchase of Shentel’s wireless telecommunication assets and expect the transaction to close in the third quarter of 2021 after satisfying customary conditions to closing.

Financing Lease Facilities

We have entered into uncommitted financing lease facilities with certain ~~partners~~third parties that provide us with the ability to enter into financing leases for network equipment and services. As of March 31, ~~2021,~~2022, we have committed to ~~$5.2~~$6.6 billion of financing leases under these financing lease facilities, of which ~~$108~~$299 million was executed during the three months ended March 31, ~~2021.~~2022. We expect to enter into up to an additional ~~$1.1 billion~~$901 million in financing lease commitments during the year ending December 31, ~~2021.~~2022.

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Capital Expenditures

Our liquidity requirements have been driven primarily by capital expenditures for spectrum licenses, the construction, expansion and upgrading of our network infrastructure and the integration of the networks, spectrum, technology, personnel, customer base and business practices of T-Mobile and Sprint. Property and equipment capital expenditures primarily relate to the integration of our network and spectrum licenses, including ~~the pending acquisition of C-band licenses won in Auction 107,~~ acquired Sprint PCS and 2.5 GHz spectrum licenses and existing 600 MHz spectrum licenses as we build out our nationwide 5G network. We expect the majority of our remaining capital expenditures related to these efforts to occur in ~~2021 and~~ 2022, after which we expect a reduction in capital expenditure requirements.

~~Dividends~~Stockholder Returns

We have never ~~paid~~declared or ~~declared~~paid any cash dividends on our common stock, and we do not intend to declare or pay any cash dividends on our common stock in the foreseeable future. ~~Our credit facilities and the indentures and supplemental indentures governing~~

We may use cash to repurchase shares of our ~~long-term debt~~common stock, subject to, ~~affiliates and third parties, excluding financing leases, contain covenants that,~~ among other things, ~~restrict~~approval by the Board of Directors and our ~~ability~~sufficient access to ~~declare or pay dividends on our common stock.~~sources of liquidity, including potentially debt capital markets.

Related Party Transactions

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

As of April 29, 2022, DT and SoftBank held, directly or indirectly, approximately 48.3% and 3.2%, respectively, of the outstanding T-Mobile common stock, with the remaining approximately 48.5% of the outstanding T-Mobile common stock held by other stockholders. As a result of the Proxy, Lock-Up and ROFR Agreement, dated April 1, 2020, by and between DT and SoftBank and the Proxy, Lock-Up and ROFR Agreement, dated June 22, 2020, by and among DT, Claure Mobile LLC, and Marcelo Claure, DT has voting control, as of April 29, 2022, over approximately 51.8% of the outstanding T-Mobile common stock.

Disclosure of Iranian Activities under Section 13(r) of the Securities Exchange Act of 1934

Section 219 of the Iran Threat Reduction and Syria Human Rights Act of 2012 added Section 13(r) to the Exchange Act of 1934, as amended (“Exchange Act”). Section 13(r) requires an issuer to disclose in its annual or quarterly reports, as applicable,

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whether it or any of its affiliates knowingly engaged in certain activities, transactions or dealings relating to Iran or with designated natural persons or entities involved in terrorism or the proliferation of weapons of mass destruction. Disclosure is required even where the activities, transactions or dealings are conducted outside the U.S. by non-U.S. affiliates in compliance with applicable law, and whether or not the activities are sanctionable under U.S. law.

As of the date of this report, we are not aware of any activity, transaction or dealing by us or any of our affiliates for the three months ended March 31, ~~2021,~~2022, that requires disclosure in this report under Section 13(r) of the Exchange Act, except as set forth below with respect to affiliates that we do not control and that are our affiliates solely due to their common control with either DT or SoftBank. We have relied upon DT and SoftBank for information regarding their respective activities, transactions and dealings.

DT, through certain of its non-U.S. subsidiaries, is party to roaming and interconnect agreements with the following mobile and fixed line telecommunication providers in Iran, some of which are or may be government-controlled entities: Irancell Telecommunications Services Company, Telecommunication Kish Company, Mobile Telecommunication Company of Iran, and Telecommunication Infrastructure Company of Iran. In addition, during the three months ended March 31, ~~2021,~~2022, DT, through certain of its non-U.S. subsidiaries, provided basic telecommunications services to ~~two~~four customers in Germany identified on the Specially Designated Nationals and Blocked Persons List maintained by the U.S. Department of Treasury’s Office of Foreign Assets Control: Bank Melli, ~~and~~ Europäisch-Iranische ~~Handelsbank.~~Handelsbank, CPG Engineering & Commercial Services GmbH and Golgohar Trade and Technology GmbH. These services have been terminated or are in the process of being terminated. For the three months ended March 31, ~~2021,~~2022, gross revenues of all DT affiliates generated by roaming and

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interconnection traffic and telecommunications services with the Iranian parties identified herein were less than $0.1 million, and the estimated net profits were less than $0.1 million.

In addition, DT, through certain of its non-U.S. subsidiaries that operate a fixed-line network in their respective European home countries (in particular Germany), provides telecommunications services in the ordinary course of business to the Embassy of Iran in those European countries. Gross revenues and net profits recorded from these activities for the three months ended March 31, ~~2021~~2022 were less than $0.1 million. We understand that DT intends to continue these activities.

Separately, SoftBank, through one of its non-U.S. subsidiaries, provides roaming services in Iran through Irancell Telecommunications Services Company. During the three months ended March 31, ~~2021,~~2022, SoftBank had no gross revenues from such services and no net profit was generated. We understand that the SoftBank subsidiary intends to continue such services. This subsidiary also provides telecommunications services in the ordinary course of business to accounts affiliated with the Embassy of Iran in Japan. During the three months ended March 31, ~~2021,~~2022, SoftBank estimates that gross revenues and net profit generated by such services were both under $0.1 million. We understand that the SoftBank subsidiary is obligated under contract and intends to continue such services.

In addition, SoftBank, through one of its non-U.S. indirect subsidiaries, provides office supplies to the Embassy of Iran in Japan. SoftBank estimates that gross revenue and net profit generated by such services during the three months ended March 31, ~~2021,~~2022, were both under $0.1 million. We understand that the SoftBank subsidiary intends to continue such activities.

Critical Accounting Policies and Estimates

Preparation of our condensed consolidated financial statements in accordance with ~~U.S.~~ GAAP requires us to make estimates and assumptions that affect the reported amounts of certain assets, liabilities, revenues and expenses, as well as related disclosure of contingent assets and liabilities. There have been no material changes to the critical accounting policies and estimates as previously disclosed in Part II, Item 8 of our Annual Report on Form 10-K for the year ended December 31, ~~2020,~~2021, and which are hereby incorporated by reference herein.

Accounting Pronouncements Not Yet Adopted

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

Item 3. Quantitative and Qualitative Disclosures About Market Risk

There have been no material changes to the ~~interest rate~~market risk as previously disclosed in Part II, Item 7A of our Annual Report on Form 10-K for the year ended December 31, ~~2020.~~2021.

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Item 4. Controls and Procedures

Evaluation of Disclosure Controls and Procedures

We maintain disclosure controls and procedures designed to ensure information required to be disclosed in our periodic reports filed or submitted under the Exchange Act, is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms. Our disclosure controls include the use of a Disclosure Committee which is comprised of representatives from our Accounting, Legal, Treasury, Technology, Risk Management, Government Affairs and Investor Relations functions and are designed to ensure that information required to be disclosed in the reports we file or submit under the Exchange Act is accumulated and communicated to our management, including our principal executive officer and principal financial officer, as appropriate, to allow timely decisions regarding required disclosure.

Under the supervision and with the participation of our management, including our Chief Executive Officer and our Chief Financial Officer, we carried out an evaluation of the effectiveness of the design and operation of our disclosure controls and procedures, as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act. Based upon that evaluation, our Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures were effective, as of the end of the period covered by this Form 10-Q.

The certifications required by Section 302 of the Sarbanes-Oxley Act of 2002 (the “Sarbanes-Oxley Act”) are filed as ~~exhibits~~Exhibits 31.1 and 31.2, respectively, to this Form 10-Q.

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Changes in Internal Control over Financial Reporting

There were no changes in our internal control over financial reporting, as defined in Rules 13a-15(f) and 15d-15(f) of the Exchange Act, during our most recently completed fiscal quarter that materially affected or are reasonably likely to materially affect our internal control over financial reporting.

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PART II. ~~OTHER INFORMATION~~

Item 1. Legal Proceedings

For more information regarding the legal proceedings in which we are involved, see Note ~~2 - Business Combination~~ ~~and~~ ~~Note 1~~1 11 – Commitments and Contingenciesof the Notes to the Condensed Consolidated Financial Statements.

Item 1A. Risk Factors

Other than the updated risk factor below, there have been no material changes in our risk factors as previously disclosed in Part I, Item 1A of our Annual Report on Form 10-K for the year ended December 31, ~~2020.~~2021.

We have experienced criminal cyberattacks and could in the future be further harmed by disruption, data loss or other security breaches, whether directly or indirectly through third parties.

Our ~~Fifth Amended~~business involves the receipt, storage, and ~~Restated Certificate~~transmission of ~~Incorporation designates the Court~~confidential information about our customers, such as sensitive personal, account and payment card information, confidential information about our employees and suppliers, and other sensitive information about our Company, such as our business plans, transactions, financial information, and intellectual property (collectively, “Confidential Information”). We are subject to persistent cyberattacks and threats to our networks, systems, and supply chain from a variety of ~~Chancery~~bad actors, many of ~~the State~~whom attempt to gain access to and compromise Confidential Information by exploiting bugs, errors, misconfigurations or other vulnerabilities in our networks and other systems (including purchased and third-party systems) or engaging in credential harvesting or social engineering. In some cases, these bad actors may obtain unauthorized access to Confidential Information utilizing credentials taken from our customers, employees, or third parties. Other bad actors aim to cause serious operational disruptions to our business or networks through other means, such as through ransomware or distributed denial of Delaware as the sole and exclusive forum for certain actions and proceedings, which could limit the ability of our stockholders to obtain a judicial forum of their choice for disputes with the Company or its directors, officers or employees.services attacks.

~~Our Fifth Amended~~Cyberattacks against companies like ours have increased in frequency and Restated Certificate of Incorporation (the “Certificate of Incorporation”) provides that, unless we consent in writing to the selection of an alternative forum, the Court of Chancery of the State of Delaware shall be the sole and exclusive forum for (i) any derivative action or proceeding brought on behalf of the Company, (ii) any action asserting a claim of breach of a fiduciary duty owed by any director, officer or employee of the Company to the Company or its stockholders, (iii) any action asserting a claim arising pursuant to any provision of the General Corporation Law of the State of Delaware, the Certificate of Incorporation or the Company’s bylaws or (iv) any other action asserting a claim arising under, in connection with, and governed by the internal affairs doctrine. This choice of forum provision does not waive our compliance with our obligations under the federal securities lawspotential harm over time, and the ~~rules~~methods used to gain unauthorized access constantly evolve, making it increasingly difficult to anticipate, prevent, and/or detect incidents successfully in every instance. They are perpetrated by a variety of groups and ~~regulations thereunder. Moreover,~~persons, including state-sponsored parties, malicious actors, employees, contractors, or other unrelated third parties. Some of these persons reside in jurisdictions where law enforcement measures to address such attacks are ineffective or unavailable, and such attacks may even be perpetrated by or at the ~~provision does not apply to suits brought to enforce a duty or liability created by the Exchange Act or by the Securities Act~~behest of ~~1933, as amended.~~foreign governments.

~~This choice~~In addition, we routinely provide certain Confidential Information to third-party providers whose products and services are used in our business operations, including as part of ~~forum provision may increase costs~~our IT systems, such as cloud services. These third-party providers have experienced in the past, and will continue to ~~bring a claim, discourage claims~~ experience in the future, cyberattacks that involve attempts to obtain unauthorized access to our Confidential Information and/or ~~limit a stockholder’s ability~~ to ~~bring a claim in a judicial forum~~create operational disruptions that the stockholder finds favorable for disputes with the Company or its directors, officers or employees, which may discourage such lawsuits against the Company and its directors, officers and employees, even though an action, if successful, might benefit our stockholders. Alternatively, if a court were to find the choice of forum provision to be inapplicable or unenforceable in an action, we may incur additional costs associated with resolving such matters in other jurisdictions, which could ~~increase our costs of litigation and~~ adversely affect our business, and these providers also face other security challenges common to all parties that collect and process information.

In August 2021, we disclosed that our systems were subject to a criminal cyberattack that compromised certain data of millions of our current customers, former customers, and prospective customers, including, in some instances, social security numbers, names, addresses, dates of birth and driver’s license/identification numbers. With the assistance of 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 have incurred certain cyberattack-related expenses, including costs to remediate the attack, provide additional customer support and enhance customer protection, and expect to incur additional expense in future periods resulting from the attack. For more information, see “Cyberattack” in the Overview section of MD&A. As a result of the August 2021 cyberattack, we are subject to numerous claims, lawsuits and regulatory inquiries, the ongoing costs of which may be material, and we may be subject to further regulatory inquiries and private litigation. For more information, see “– Contingencies and Litigation – Litigation and Regulatory Matters” in Note 11 – Commitments and Contingencies of the Notes to the Consolidated Financial Statements.” As a result of the August 2021 cyberattack, we may incur significant costs or experience other material financial ~~condition.~~impacts, which

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may not be covered by, or may exceed the coverage limits of, our cyber insurance, and such costs and impacts may have a material adverse effect on our business, reputation, financial condition, cash flows and operating results.

In addition to the August 2021 cyberattack, we have experienced other unrelated immaterial incidents involving unauthorized access to certain Confidential Information. Typically, these incidents have involved attempts to commit fraud by taking control of a customer’s phone line, often by using compromised credentials. In other cases, the incidents have involved unauthorized access to certain of our customers’ private information, including credit card information, financial data, social security numbers or passwords, and to certain of our intellectual property.

Our procedures and safeguards to prevent unauthorized access to Confidential Information and to defend against cyberattacks seeking to disrupt our operations must be continually evaluated and enhanced to address the ever-evolving threat landscape and changing cybersecurity regulations. These preventative actions require the investment of significant resources and management time and attention. Additionally, we do not have control of the cybersecurity systems, breach prevention, and response protocols of our third-party providers. While T-Mobile may have contractual rights to assess the effectiveness of many of our providers’ systems and protocols, we do not have the means to know or assess the effectiveness of all of our providers’ systems and controls at all times. We cannot provide any assurances that actions taken by us, or our third-party providers will adequately repel a significant cyberattack or prevent or substantially mitigate the impacts of cybersecurity breaches or misuses of Confidential Information, unauthorized access to our networks or systems or exploits against third-party environments, or that we or our third-party providers, will be able to effectively identify, investigate, and remediate such incidents in a timely manner or at all. We expect to continue to be the target of cyberattacks, given the nature of our business, and we expect the same with respect to our third-party providers. Our inability to protect Confidential Information or to prevent operational disruptions from future cyberattacks may have a material adverse effect on our business, reputation, financial condition, cash flows, and operating results.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

None.

Item 3. Defaults Upon Senior Securities

None.

Item 4. Mine Safety Disclosures

~~None.~~Not applicable.

Item 5. Other Information

None.

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Item 6. Exhibits

Incorporated by Reference
Exhibit No. Exhibit Description Form Date of First Filing Exhibit Number Filed Herein
4.1
Forty-Third Supplemental Indenture, dated as of January 14, 2021, by and among T-Mobile USA, Inc., T-Mobile US, Inc., the other guarantors party thereto and Deutsche Bank Trust Company Americas, as trustee, including the Form of 2.250% Senior Note due 2026.
8-K 1/14/2021 4.2
4.2
Forty-Fourth Supplemental Indenture, dated as of January 14, 2021, by and among T-Mobile USA, Inc., T-Mobile US, Inc., the other guarantors party thereto and Deutsche Bank Trust Company Americas, as trustee, including the Form of 2.625% Senior Note due 2029.
8-K 1/14/2021 4.3
4.3
Forty-Fifth Supplemental Indenture, dated as of January 14, 2021, by and among T-Mobile USA, Inc., T-Mobile US, Inc., the other guarantors party thereto and Deutsche Bank Trust Company Americas, as trustee, including the Form of 2.875% Senior Note due 2031.
8-K 1/14/2021 4.4
4.4
Forty-Sixth Supplemental Indenture, dated as of March 23, 2021, by and among T-Mobile USA, Inc., T-Mobile US, Inc., the other guarantors party thereto and Deutsche Bank Trust Company Americas, as trustee, including the Form of 2.625% Senior Note due 2026.
8-K 3/23/2021 4.2
4.5
Forty-Seventh Supplemental Indenture, dated as of March 23, 2021, by and among T-Mobile USA, Inc., T-Mobile US, Inc., the other guarantors party thereto and Deutsche Bank Trust Company Americas, as trustee, including the Form of 3.375% Senior Note due 2029.
8-K 3/23/2021 4.3
4.6
Forty-Eighth Supplemental Indenture, dated as of March 23, 2021, by and among T-Mobile USA, Inc., T-Mobile US, Inc., the other guarantors party thereto and Deutsche Bank Trust Company Americas, as trustee, including the Form of 3.500% Senior Note due 2031.
8-K 3/23/2021 4.4
10.1*
Form of Restricted Stock Unit Award Agreement (Time-Vesting) for Executive Officers under the Sprint Corporation 2015 Amended and Restated Omnibus Incentive Plan.
X
10.2*
Form of Restricted Stock Unit Award Agreement (Performance-Vesting) for Executive Officers under the Sprint Corporation 2015 Amended and Restated Omnibus Incentive Plan.
X
10.3*
Form of Restricted Stock Unit Award Agreement (Performance-Vesting) (Cash Settled) for Executive Officers under the T-Mobile US, Inc. 2013 Omnibus Incentive Plan.
X
10.4*
Annual Incentive Award Notice under the 2013 Omnibus Incentive Plan.
X
10.5
First Amended and Restated Receivables Sale and Conveyancing Agreement, dated as of March 2, 2021, by and among T-Mobile West LLC, T-Mobile Central LLC, T-Mobile Northeast LLC and T-Mobile South LLC, as sellers, and T-Mobile PCS Holdings LLC, as purchaser.
X
10.6
First Amended and Restated Receivables Sale and Contribution Agreement, dated as of March 2, 2021, by and between T-Mobile PCS Holdings LLC, as seller, and T-Mobile Airtime Funding LLC, as purchaser.
X

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~~10.7~~Incorporated by Reference

Exhibit No.

Exhibit Description

Form

Date of First Filing

Exhibit Number

Filed Herein

10.1*

~~Fifth Amended and Restated Master Receivables Purchase~~Employment Letter Agreement, ~~dated as of March 2,~~effective October 11, 2021, ~~among T-Mobile Airtime Funding LLC, as transferor, T-Mobile PCS Holdings LLC, as servicer,~~between T-Mobile US, Inc. and T-Mobile USA, Inc., as performance guarantors, Billing Gate One LLC, as outgoing purchaser, Landesbank Hessen-Thuringen Girozentrale, as outgoing bank purchasing agent, MUFG Bank (Europe) N.V., Germany Branch, as outgoing bank collections agent, The Toronto-Dominion Bank, as administrative agent, and certain financial institutions party thereto.Mark W. Nelson.

~~10.8~~10.2

~~Performance Guaranty,~~First Amendment to First Amended and Restated Sale and Conveyancing Agreement, dated as of ~~March 2, 2021,~~February 28, 2022, by and among T-Mobile West LLC, T-Mobile Central LLC, T-Mobile Northeast LLC and T-Mobile South LLC, as sellers, and T-Mobile USA, Inc. as purchaser.

10.3

First Amendment to First Amended and Restated Receivables Sale and Contribution Agreement, dated as of February 28, 2022, by and between T-Mobile USA, Inc., as seller, and T-Mobile Airtime Funding LLC, as purchaser.

10.4

Second Amendment to Fifth Amended and Restated Master Receivables Purchase Agreement, dated as of February 28, 2022, by and among T-Mobile Airtime Funding LLC, as transferor, T-Mobile USA, Inc., in its individual capacity and as servicer, T-Mobile US, Inc. and T-Mobile USA, Inc., as performance guarantors, The Toronto-Dominion Bank, as administrative agent, and certain financial institutions party thereto.

22.1

Subsidiary Guarantors and Issuers of Guaranteed Securities and Affiliates Whose Securities Collateralize Securities of the ~~Registrant~~Registrant.

31.1

Certifications of Chief Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

31.2

Certifications of Chief Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

32.1**

Certification of Chief Executive Officer Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

32.2**

Certification of Chief Financial Officer Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

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*						Indicates a management contract or compensatory plan or ~~arrangement.~~arrangement

**						Furnished herein.

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						SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.


						T-MOBILE US, INC.

May ~~4, 2021~~6, 2022						/s/ Peter Osvaldik
						Peter Osvaldik
						Executive Vice President and Chief Financial Officer
						(Principal Financial Officer and Authorized Signatory)

5545


PART I. FINANCIAL INFORMATION






	Item 1.	Financial Statements	3





	~~Item~~ 1 .	~~Financial Statements~~	3
		Condensed Consolidated Balance Sheets	3
		Condensed Consolidated Statements of Comprehensive Income	4
		Condensed Consolidated Statements of Cash Flows	5
		Condensed Consolidated Statement of Stockholders’ Equity	6
		Notes to the Condensed Consolidated Financial Statements	78
	Item 2 .2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	3024
	Item 3 .3.	Quantitative and Qualitative Disclosures About Market Risk	5041

	Item 4 .	Controls and Procedures	5141



PART II. OTHER INFORMATION
	Item 1.	Legal Proceedings	5242
	Item 1A.	Risk Factors	5242
	Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	5243
	Item 3.	Defaults Upon Senior Securities	5243
	Item 4.	Mine Safety Disclosures	5243
	Item 5.	Other Information	5243
	Item 6.	Exhibits	5344










		Signatures	5545


Note 1	Summary of Significant Accounting Policies	8

Note 2	~~Business Combination~~Receivables and Related Allowance for Credit Losses	89
Note 3	~~Receivables and Expected Credit Losses~~	13
~~Note 4~~	Sales of Certain Receivables	1511

Note 4	5Spectrum License Transactions	~~Goodwill,~~ S ~~pectrum License Transactions~~ ~~and Other Intangible Assets~~	1812
Note 65	Fair Value Measurements	2013
Note 76	Debt	2114
Note 87	Tower Obligations	2214
Note 98	Revenue from Contracts with Customers	2416





Note 1 09	Earnings Per Share	2618

Note 110	1Leases	18
Note 11	Commitments and Contingencies	2619
Note 1 212	Restructuring Costs	2822
Note 1 313	Additional Financial Information	2923
Note 14	Subsequent Events	23


	March 31, 2021						March 31, 2020
(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	$	194	$	605	$	799	$	61	$	399	$	460
Beginning balance adjustment due to implementation of the new credit loss standard	0		0		0		0		91		91

Bad debt expense	28		54		82		42		71		113
Write-offs, net of recoveries	(79)		(54)		(133)		(34)		(61)		(95)
Change in imputed discount on short-term and long-term EIP receivables	N/A		66		66		N/A		5		5
Impact on the imputed discount from sales of EIP receivables	N/A		(35)		(35)		N/A		(36)		(36)

Allowance for credit losses and imputed discount, end of period	$	143	$	636	$	779	$	69	$	469	$	538


	Useful Lives	March 31, 2021						December 31, 2020
(in millions)		Gross Amount		Accumulated Amortization		Net Amount		Gross Amount		Accumulated Amortization		Net Amount

Customer relationships	Up to 8 years	$	4,903	$	(1,153)	$	3,750	$	4,900	$	(865)	$	4,035
Tradenames and patents	Up to 19 years	603		(461)		142		598		(412)		186
Favorable spectrum leases	Up to 27 years	741		(44)		697		790		(35)		755
Other	Up to 10 years	377		(74)		303		377		(55)		322

Other intangible assets		$	6,624	$	(1,732)	$	4,892	$	6,665	$	(1,367)	$	5,298


(in millions)	Estimated Future Amortization

Twelve Months Ending March 31,
2022	$	1,154
2023	941
2024	785
2025	627
2026	468
Thereafter	917

Total	$	4,892


(in millions)	Principal Issuances		Issuance Costs		Net Proceeds from Issuance of Long-Term Debt		Issue Date
















2.250% Senior Notes due 2026	$	1,000	$	(7)	$	993	January 14, 2021
2.625% Senior Notes due 2029	1,000		(7)		993		January 14, 2021
2.875% Senior Notes due 2031	1,000		(7)		993		January 14, 2021
2.625% Senior Notes due 2026	1,200		(7)		1,193		March 23, 2021
3.375% Senior Notes due 2029	1,250		(7)		1,243		March 23, 2021
3.500% Senior Notes due 2031	1,350		(7)		1,343		March 23, 2021
Total of Senior Notes issued	$	6,800	$	(42)	$	6,758


(in millions)	Contract Assets		Contract Liabilities

Balance as of December 31, 2020	$	278	$	824
Balance as of March 31, 2021	275		775

Change	$	(3)	$	(49)



(in millions)	Three Months Ended March 31, 2021		Plan to Date
Contract termination costs	$	6	$	184
Severance costs	16		401
Network decommissioning	12		509
Total restructuring plan expenses	$	34	$	1,094


	Three Months Ended March 31, 2021		Year Ended December 31, 2020
(in millions)
Total revenues	$	19,429	$	67,112
Operating income	1,429		4,335
Net income	335		1,148
Revenue from non-guarantors	404		1,496
Operating expenses to non-guarantors	656		2,127
Other expense to non-guarantors	(36)		(114)


	Three Months Ended March 31, 2021		Nine Months Ended December 31, 2020
(in millions)
Total revenues	$	2	$	10
Operating loss	(1)		(15)
Net loss	(495)		(2,229)
Revenue from non-guarantors	2		6

Other income, net, from non-guarantors	680		1,084