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Table of Contents
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 June 30, 2023
or
☐          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 Logo_03_2023.jpg
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 July 21, 2023
Common Stock, par value $0.00001 per share 1,176,457,229 



1

T-Mobile US, Inc.
Form 10-Q
For the Quarter Ended June 30, 2023

Table of Contents


2
Index for Notes to the Condensed Consolidated Financial Statements
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements

T-Mobile US, Inc.
Condensed Consolidated Balance Sheets
(Unaudited)

(in millions, except share and per share amounts) June 30,
2023		 December 31,
2022
Assets
Current assets
Cash and cash equivalents $ 6,647  $ 4,507 
Accounts receivable, net of allowance for credit losses of $151 and $167
 4,592  4,445 
Equipment installment plan receivables, net of allowance for credit losses and imputed discount of $623 and $667
 4,779  5,123 
Inventory 1,373  1,884 
Prepaid expenses 814  673 
Other current assets 2,032  2,435 
Total current assets 20,237  19,067 
Property and equipment, net 41,804  42,086 
Operating lease right-of-use assets 27,891  28,715 
Financing lease right-of-use assets 3,365  3,257 
Goodwill 12,234  12,234 
Spectrum licenses 95,889  95,798 
Other intangible assets, net 3,032  3,508 
Equipment installment plan receivables due after one year, net of allowance for credit losses and imputed discount of $131 and $144
 1,966  2,546 
Other assets 4,184  4,127 
Total assets $ 210,602  $ 211,338 
Liabilities and Stockholders' Equity
Current liabilities
Accounts payable and accrued liabilities $ 9,872  $ 12,275 
Short-term debt 7,731  5,164 
Deferred revenue 810  780 
Short-term operating lease liabilities 3,289  3,512 
Short-term financing lease liabilities 1,220  1,161 
Other current liabilities 1,647  1,850 
Total current liabilities 24,569  24,742 
Long-term debt 68,646  65,301 
Long-term debt to affiliates 1,495  1,495 
Tower obligations 3,860  3,934 
Deferred tax liabilities 12,226  10,884 
Operating lease liabilities 29,053  29,855 
Financing lease liabilities 1,254  1,370 
Other long-term liabilities 3,749  4,101 
Total long-term liabilities 120,283  116,940 
Commitments and contingencies (Note 13)
Stockholders' equity
Common stock, par value $0.00001 per share, 2,000,000,000 shares authorized; 1,261,489,287 and 1,256,876,527 shares issued, 1,180,398,748 and 1,233,960,078 shares outstanding
 —  — 
Additional paid-in capital 74,161  73,941 
Treasury stock, at cost, 81,090,539 and 22,916,449 shares
 (11,392) (3,016)
Accumulated other comprehensive loss (957) (1,046)
Retained earnings (accumulated deficit) 3,938  (223)
Total stockholders' equity 65,750  69,656 
Total liabilities and stockholders' equity $ 210,602  $ 211,338 
The accompanying notes are an integral part of these condensed consolidated financial statements.
3
Index for Notes to the Condensed Consolidated Financial Statements
T-Mobile US, Inc.
Condensed Consolidated Statements of Comprehensive Income (Loss)
(Unaudited)

Three Months Ended June 30, Six Months Ended June 30,
(in millions, except share and per share amounts) 2023 2022 2023 2022
Revenues
Postpaid revenues $ 12,070  $ 11,445  $ 23,932  $ 22,646 
Prepaid revenues 2,444  2,469  4,861  4,924 
Wholesale and other service revenues 1,224  1,402  2,491  2,874 
Total service revenues 15,738  15,316  31,284  30,444 
Equipment revenues 3,169  4,130  6,888  8,824 
Other revenues 289  255  656  553 
Total revenues 19,196  19,701  38,828  39,821 
Operating expenses
Cost of services, exclusive of depreciation and amortization shown separately below 2,916  4,060  5,977  7,787 
Cost of equipment sales, exclusive of depreciation and amortization shown separately below 4,088  5,108  8,676  11,054 
Selling, general and administrative 5,272  5,856  10,697  10,912 
Impairment expense —  477  —  477 
Loss (gain) on disposal group held for sale 17  —  (25) — 
Depreciation and amortization 3,110  3,491  6,313  7,076 
Total operating expenses 15,403  18,992  31,638  37,306 
Operating income 3,793  709  7,190  2,515 
Other expense, net
Interest expense, net (861) (851) (1,696) (1,715)
Other income (expense), net 6  (21) 15  (32)
Total other expense, net (855) (872) (1,681) (1,747)
Income (loss) before income taxes 2,938  (163) 5,509  768 
Income tax (expense) benefit (717) 55  (1,348) (163)
Net income (loss) $ 2,221  $ (108) $ 4,161  $ 605 
Net income (loss) $ 2,221  $ (108) $ 4,161  $ 605 
Other comprehensive income, net of tax
Reclassification of loss from cash flow hedges, net of tax effect of $13, $13, $27 and $26
 40  37  80  74 
Unrealized gain (loss) on foreign currency translation adjustment, net of tax effect of $0, $(1), $0 and $(1)
 7  (3) 9  (4)
Other comprehensive income 47  34  89  70 
Total comprehensive income (loss) $ 2,268  $ (74) $ 4,250  $ 675 
Earnings (loss) per share
Basic $ 1.86  $ (0.09) $ 3.45  $ 0.48 
Diluted $ 1.86  $ (0.09) $ 3.44  $ 0.48 
Weighted-average shares outstanding
Basic 1,193,078,891  1,253,932,986  1,206,270,341  1,252,228,959 
Diluted 1,195,533,499  1,253,932,986  1,210,220,958  1,256,873,827 
The accompanying notes are an integral part of these condensed consolidated financial statements.
4
Index for Notes to the Condensed Consolidated Financial Statements
T-Mobile US, Inc.
Condensed Consolidated Statements of Cash Flows
(Unaudited)

Three Months Ended June 30, Six Months Ended June 30,
(in millions) 2023 2022 2023 2022
Operating activities
Net income (loss) $ 2,221  $ (108) $ 4,161  $ 605 
Adjustments to reconcile net income (loss) to net cash provided by operating activities
Depreciation and amortization 3,110  3,491  6,313  7,076 
Stock-based compensation expense 167  154  344  295 
Deferred income tax expense (benefit) 703  (76) 1,314  109 
Bad debt expense 213  311  435  521 
Losses from sales of receivables 51  62  89  108 
Impairment expense —  477  —  477 
Loss on remeasurement of disposal group held for sale 22  —  9  — 
Changes in operating assets and liabilities
Accounts receivable (1,514) (1,573) (2,782) (2,557)
Equipment installment plan receivables 246  (189) 398  (724)
Inventory 362  484  491  391 
Operating lease right-of-use assets 929  1,693  1,937  3,162 
Other current and long-term assets 354  (112) 212  (116)
Accounts payable and accrued liabilities (864) 36  (1,746) (23)
Short- and long-term operating lease liabilities (1,183) (747) (2,192) (1,518)
Other current and long-term liabilities (466) 200  (649) 37 
Other, net 4  106  72  211 
Net cash provided by operating activities 4,355  4,209  8,406  8,054 
Investing activities
Purchases of property and equipment, including capitalized interest of $(14), $(13), $(28) and $(28)
 (2,789) (3,572) (5,790) (6,953)
Purchases of spectrum licenses and other intangible assets, including deposits (33) (116) (106) (2,959)
Proceeds from sales of tower sites 2  —  8  — 
Proceeds related to beneficial interests in securitization transactions 1,309  1,121  2,654  2,306 
Acquisition of companies, net of cash and restricted cash acquired —  —  —  (52)
Other, net 24  8  19  7 
Net cash used in investing activities (1,487) (2,559) (3,215) (7,651)
Financing activities
Proceeds from issuance of long-term debt 3,450  —  6,463  — 
Repayments of financing lease obligations (304) (288) (610) (590)
Repayments of long-term debt (223) (1,381) (354) (3,013)
Repurchases of common stock (3,591) —  (8,210) — 
Tax withholdings on share-based awards (70) (43) (257) (215)
Other, net (46) (32) (89) (62)
Net cash used in financing activities (784) (1,744) (3,057) (3,880)
Change in cash and cash equivalents, including restricted cash and cash held for sale 2,084  (94) 2,134  (3,477)
Cash and cash equivalents, including restricted cash and cash held for sale
Beginning of period 4,724  3,320  4,674  6,703 
End of period $ 6,808  $ 3,226  $ 6,808  $ 3,226 
The accompanying notes are an integral part of these condensed consolidated financial statements.
5
Index for Notes to the Condensed Consolidated Financial Statements
T-Mobile US, Inc.
Condensed Consolidated Statement of Stockholders’ Equity
(Unaudited)

(in millions, except shares) Common Stock Outstanding Treasury Stock Outstanding Treasury Shares at Cost Par Value and Additional Paid-in Capital Accumulated Other Comprehensive Loss Retained Earnings
(Accumulated Deficit)		 Total Stockholders' Equity
Balance as of March 31, 2023 1,204,696,325  55,910,664  $ (7,831) $ 74,043  $ (1,004) $ 1,717  $ 66,925 
Net income —  —  —  —  —  2,221  2,221 
Other comprehensive income —  —  —  —  47  —  47 
Stock-based compensation —  —  —  185  —  —  185 
Issuance of vested restricted stock units 1,321,269  —  —  —  —  —  — 
Shares withheld related to net share settlement of stock awards and stock options (483,892) —  —  (70) —  —  (70)
Repurchases of common stock (25,183,838) 25,183,838  (3,561) —  —  —  (3,561)
Other, net 48,884  (3,963) —  3  —  —  3 
Balance as of June 30, 2023 1,180,398,748  81,090,539  $ (11,392) $ 74,161  $ (957) $ 3,938  $ 65,750 
Balance as of December 31, 2022 1,233,960,078  22,916,449  $ (3,016) $ 73,941  $ (1,046) $ (223) $ 69,656 
Net income —  —  —  —  —  4,161  4,161 
Other comprehensive income —  —  —  —  89  —  89 
Stock-based compensation —  —  —  340  —  —  340 
Stock issued for employee stock purchase plan 1,063,426  —  —  126  —  —  126 
Issuance of vested restricted stock units 5,166,070  —  —  —  —  —  — 
Shares withheld related to net share settlement of stock awards and stock options (1,747,248) —  —  (257) —  —  (257)
Repurchases of common stock (58,147,778) 58,147,778  (8,371) —  —  —  (8,371)
Other, net 104,200  26,312  (5) 11  —  —  6 
Balance as of June 30, 2023 1,180,398,748  81,090,539  $ (11,392) $ 74,161  $ (957) $ 3,938  $ 65,750 
The accompanying notes are an integral part of these condensed consolidated financial statements.
6
Index for Notes to the Condensed Consolidated Financial Statements
T-Mobile US, Inc.
Condensed Consolidated Statement of Stockholders’ Equity

(in millions, except shares) Common Stock Outstanding Treasury Stock Outstanding Treasury Shares at Cost Par Value and Additional Paid-in Capital Accumulated Other Comprehensive Loss Accumulated Deficit Total Stockholders' Equity
Balance as of March 31, 2022 1,253,352,700  1,565,183  $ (16) $ 73,420  $ (1,329) $ (2,099) $ 69,976 
Net loss —  —  —  —  —  (108) (108)
Other comprehensive income —  —  —  —  34  —  34 
Stock-based compensation —  —  —  168  —  —  168 
Issuance of vested restricted stock units 950,742  —  —  —  —  —  — 
Shares withheld related to net share settlement of stock awards and stock options (334,561) —  —  (43) —  —  (43)
Other, net 41,191  (634) —  7  —  —  7 
Balance as of June 30, 2022 1,254,010,072  1,564,549  $ (16) $ 73,552  $ (1,295) $ (2,207) $ 70,034 
Balance as of December 31, 2021 1,249,213,681  1,537,468  $ (13) $ 73,292  $ (1,365) $ (2,812) $ 69,102 
Net income —  —  —  —  —  605  605 
Other comprehensive income —  —  —  —  70  —  70 
Stock-based compensation —  —  —  325  —  —  325 
Stock issued for employee stock purchase plan 1,276,725  —  —  138  —  —  138 
Issuance of vested restricted stock units 5,161,411  —  —  —  —  —  — 
Shares withheld related to net share settlement of stock awards and stock options (1,704,867) —  —  (215) —  —  (215)
Other, net 63,122  27,081  (3) 12  —  —  9 
Balance as of June 30, 2022 1,254,010,072  1,564,549  $ (16) $ 73,552  $ (1,295) $ (2,207) $ 70,034 
The accompanying notes are an integral part of these condensed consolidated financial statements.

7
Index for Notes to the Condensed Consolidated Financial Statements
T-Mobile US, Inc.
Index for Notes to the Condensed Consolidated Financial Statements


8
Index for Notes to the Condensed Consolidated Financial Statements
T-Mobile US, Inc.
Notes to the Condensed Consolidated Financial Statements

Note 1 – Summary of Significant Accounting Policies

Basis of Presentation

The unaudited condensed consolidated financial statements of T-Mobile US, Inc. (“T-Mobile,” “we,” “our,” “us” or the “Company”) include all adjustments of a normal recurring nature necessary for the fair presentation of the results for the interim periods presented. The results for the interim periods are not necessarily indicative of those for the full year. The condensed consolidated financial statements should be read in conjunction with our consolidated financial statements included in our Annual Report on Form 10-K for the year ended December 31, 2022.

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

The preparation of financial statements in conformity with United States (“U.S.”) generally accepted accounting principles (“GAAP”) requires our management to make estimates and assumptions that affect the financial statements and accompanying notes. Estimates are based on historical experience, where applicable, and other assumptions that management believes are reasonable under the circumstances. Estimates are inherently subject to judgment and actual results could differ from those estimates.

On September 6, 2022, Sprint Communications LLC, a Kansas limited liability company and wholly owned subsidiary of the Company (“Sprint Communications”), Sprint LLC, a Delaware limited liability company and wholly owned subsidiary of the Company, and Cogent Infrastructure, Inc., a Delaware corporation (the “Buyer”) and a wholly owned subsidiary of Cogent Communications Holdings, Inc., entered into a Membership Interest Purchase Agreement (the “Wireline Sale Agreement”), pursuant to which the Buyer agreed to acquire the U.S. long-haul fiber network and operations (including the non-U.S. extensions thereof) of Sprint Communications and its subsidiaries (the “Wireline Business”). Such transactions contemplated by the Wireline Sale Agreement are collectively referred to as the “Wireline Transaction.” On May 1, 2023, the Buyer and the Company completed the Wireline Transaction (the “Closing”).

The assets and liabilities of the Wireline Business disposal group were classified as held for sale and presented within Other current assets and Other current liabilities on our Condensed Consolidated Balance Sheets as of December 31, 2022. The fair value of the Wireline Business disposal group, less costs to sell, was reassessed during each reporting period it remained classified as held for sale, and any remeasurement to the lower of carrying amount or fair value less costs to sell was reported as an adjustment included within Loss (gain) on disposal group held for sale on our Condensed Consolidated Statements of Comprehensive Income (Loss). Unless otherwise specified, the amounts and information presented as of December 31, 2022, in the Notes to the Condensed Consolidated Financial Statements include assets and liabilities that were classified as held for sale.

Accounting Pronouncements Adopted During the Current Year

Troubled Debt Restructurings and Vintage Disclosures

In March 2022, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2022-02, “Financial Instruments—Credit Losses (Topic 326): Troubled Debt Restructurings and Vintage Disclosures.” The standard eliminates the accounting guidance within ASC 310-40 for troubled debt restructurings by creditors while enhancing disclosure requirements for certain loan refinancings and restructurings by creditors when a borrower is experiencing financial difficulty. Additionally, for public business entities, the standard requires disclosure of current-period gross write-offs by year of origination for financing receivables and net investments in leases within the scope of ASC 326-20. As of January 1, 2023, we have adopted this standard, and it was applied prospectively after this date. This standard did not have a material impact on our condensed consolidated financial statements as of and for the three and six months ended June 30, 2023.

9
Index for Notes to the Condensed Consolidated Financial Statements
Note 2 – Business Combination

On March 9, 2023, we entered into a Merger and Unit Purchase Agreement for the acquisition of 100% of the outstanding equity of Ka’ena Corporation and its subsidiaries including, among others, Mint Mobile LLC, for a maximum purchase price of $1.35 billion to be paid out 39% in cash and 61% in shares of T-Mobile common stock. The purchase price is variable dependent upon specified performance indicators of Ka’ena Corporation during certain periods before and after closing and consists of an upfront payment at closing of the transaction, subject to certain agreed-upon adjustments, and a variable earnout payable 24 months after closing of the transaction. The upfront payment is estimated to be approximately $950 million, before working capital adjustments. The acquisition is subject to certain customary closing conditions, including certain regulatory approvals, and is expected to close by the end of 2023.

Note 3 – Receivables and Related Allowance for Credit Losses

We maintain an allowance for credit losses by applying an expected credit loss model. Each period, management assesses the appropriateness of the level of allowance for credit losses by considering credit risk inherent within each portfolio segment as of the end of the period.

We consider a receivable past due when a customer has not paid us by the contractually specified payment due date. Account balances are written off against the allowance for credit losses if collection efforts are unsuccessful and the receivable balance is deemed uncollectible (customer default), based on factors such as customer credit ratings as well as the length of time the amounts are past due.

Our portfolio of receivables is comprised of two portfolio segments: accounts receivable and equipment installment plan (“EIP”) receivables.

Accounts Receivable Portfolio Segment

Accounts receivable balances are predominately comprised of amounts currently due from customers (e.g., for wireless communications services and monthly device lease payments), device insurance administrators, wholesale partners, non-consolidated affiliates, other carriers and third-party retail channels.

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

Our approach considers a number of factors, including our overall historical credit losses and payment experience, as well as current collection trends such as write-off frequency and severity. We also consider other qualitative factors such as current and forecasted macroeconomic conditions.

We consider the need to adjust our estimate of credit losses for reasonable and supportable forecasts of future macroeconomic conditions. To do so, we monitor external forecasts of changes in real U.S. gross domestic product and forecasts of consumer credit behavior for comparable credit exposures. We also periodically evaluate other macroeconomic indicators such as unemployment rates to assess their level of correlation with our historical credit loss statistics.

EIP Receivables Portfolio Segment

Based upon customer credit profiles at the time of customer origination, we classify the EIP receivables segment into two customer classes of “Prime” and “Subprime.” Prime customer receivables are those with lower credit risk and Subprime customer receivables are those with higher credit risk. Customers may be required to make a down payment on their equipment purchases if their assessed credit risk exceeds established underwriting thresholds. In addition, certain customers within the Subprime category may be required to pay a deposit.

To determine a customer’s credit profile and assist in determining their credit class, we use a proprietary credit scoring model that measures the credit quality of a customer leveraging several factors, such as credit bureau information and consumer credit risk scores, as well as service and device plan characteristics.

EIP receivables had a combined weighted-average effective interest rate of 9.3% and 8.0% as of June 30, 2023, and December 31, 2022, respectively.
10
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) June 30,
2023		 December 31,
2022
EIP receivables, gross $ 7,499  $ 8,480 
Unamortized imputed discount (451) (483)
EIP receivables, net of unamortized imputed discount 7,048  7,997 
Allowance for credit losses (303) (328)
EIP receivables, net of allowance for credit losses and imputed discount $ 6,745  $ 7,669 
Classified on our condensed consolidated balance sheets as:
Equipment installment plan receivables, net of allowance for credit losses and imputed discount $ 4,779  $ 5,123 
Equipment installment plan receivables due after one year, net of allowance for credit losses and imputed discount 1,966  2,546 
EIP receivables, net of allowance for credit losses and imputed discount $ 6,745  $ 7,669 

Many of our loss estimation techniques rely on delinquency-based models; therefore, delinquency is an important indicator of credit quality in the establishment of our allowance for credit losses for EIP receivables. We manage our EIP receivables portfolio segment using delinquency and customer credit class as key credit quality indicators.

The following table presents the amortized cost of our EIP receivables by delinquency status, customer credit class and year of origination as of June 30, 2023:
Originated in 2023 Originated in 2022 Originated prior to 2022 Total EIP Receivables, net of
unamortized imputed discounts
(in millions) Prime Subprime Prime Subprime Prime Subprime Prime Subprime Grand total
Current - 30 days past due $ 1,586  $ 1,216  $ 1,905  $ 1,294  $ 609  $ 315  $ 4,100  $ 2,825  $ 6,925 
31 - 60 days past due 8  12  10  17  3  3  21  32  53 
61 - 90 days past due 3  7  7  13  2  3  12  23  35 
More than 90 days past due 2  4  7  15  3  4  12  23  35 
EIP receivables, net of unamortized imputed discount $ 1,599  $ 1,239  $ 1,929  $ 1,339  $ 617  $ 325  $ 4,145  $ 2,903  $ 7,048 

We estimate credit losses on our EIP receivables segment by applying an expected credit loss model, which relies on historical loss data adjusted for current conditions to calculate default probabilities or an estimate for the frequency of customer default. Our assessment of default probabilities or frequency includes receivables delinquency status, historical loss experience, how long the receivables have been outstanding and customer credit ratings, as well as customer tenure. We multiply these estimated default probabilities by our estimated loss given default, which is the estimated amount of default or the severity of loss.

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

The following table presents write-offs of our EIP receivables by year of origination for the six months ended June 30, 2023:
(in millions) Originated in 2023 Originated in 2022 Originated prior to 2022 Total write-offs
Write-offs $ 21  $ 179  $ 55  $ 255 
11
Index for Notes to the Condensed Consolidated Financial Statements
Activity for the six months ended June 30, 2023 and 2022, in the allowance for credit losses and unamortized imputed discount balances for the accounts receivable and EIP receivables segments were as follows:
June 30, 2023 June 30, 2022
(in millions) Accounts Receivable Allowance EIP Receivables Allowance Total Accounts Receivable Allowance EIP Receivables Allowance Total
Allowance for credit losses and imputed discount, beginning of period $ 167  $ 811  $ 978  $ 146  $ 630  $ 776 
Bad debt expense 205  230  435  201  320  521 
Write-offs (221) (255) (476) (170) (240) (410)
Change in imputed discount on short-term and long-term EIP receivables N/A 75  75  N/A 75  75 
Impact on the imputed discount from sales of EIP receivables N/A (107) (107) N/A (63) (63)
Allowance for credit losses and imputed discount, end of period $ 151  $ 754  $ 905  $ 177  $ 722  $ 899 

Off-Balance-Sheet Credit Exposures

We do not have material off-balance-sheet credit exposures as of June 30, 2023. In connection with the sales of certain service accounts receivable and EIP receivables pursuant to the sale arrangements, we have deferred purchase price assets included on our Condensed Consolidated Balance Sheets measured at fair value that are based on a discounted cash flow model using Level 3 inputs, including customer default rates and credit worthiness, dilutions and recoveries. See Note 4 – Sales of Certain Receivables for further information.

Note 4 – Sales of Certain Receivables

We regularly enter into transactions to sell certain service accounts receivable and EIP receivables. The transactions, including our continuing involvement with the sold receivables and the respective impacts to our condensed consolidated financial statements, are described below.

Sales of EIP Receivables

Overview of the Transaction

In 2015, we entered into an arrangement to sell certain EIP receivables on a revolving basis (the “EIP sale arrangement”), which has been revised and extended from time to time. As of both June 30, 2023, and December 31, 2022, the EIP sale arrangement provided funding of $1.3 billion.

In connection with this EIP sale arrangement, we formed a wholly owned subsidiary, which qualifies as a bankruptcy remote entity (the “EIP BRE”). We consolidate the EIP BRE under the VIE model.

The following table summarizes the carrying amounts and classification of assets, which consist primarily of the deferred purchase price, included on our Condensed Consolidated Balance Sheets with respect to the EIP BRE:
(in millions) June 30,
2023		 December 31,
2022
Other current assets $ 365  $ 344 
Other assets 124  136 

Sales of Service Accounts Receivable

Overview of the Transaction

In 2014, we entered into an arrangement to sell certain service accounts receivable on a revolving basis (the “service receivable sale arrangement”). On February 28, 2023, we extended the scheduled expiration date of the service receivable sale arrangement to February 27, 2024. As of both June 30, 2023, and December 31, 2022, the service receivable sale arrangement provided funding of $775 million.

12
Index for Notes to the Condensed Consolidated Financial Statements
In connection with the service receivable sale arrangement, we formed a wholly owned subsidiary, which qualifies as a bankruptcy remote entity, to sell service accounts receivable (the “Service BRE”). We consolidate the Service BRE under the VIE model.

The following table summarizes the carrying amounts and classification of assets, which consist primarily of the deferred purchase price, and liabilities included on our Condensed Consolidated Balance Sheets with respect to the Service BRE:
(in millions) June 30,
2023		 December 31,
2022
Other current assets $ 222  $ 214 
Other current liabilities 375  389 

Sales of Receivables

The following table summarizes the impact of the sale of certain service accounts receivable and EIP receivables on our Condensed Consolidated Balance Sheets:
(in millions) June 30,
2023		 December 31,
2022
Derecognized net service accounts receivable and EIP receivables $ 2,430  $ 2,410 
Other current assets 587  558 
of which, deferred purchase price 586  556 
Other long-term assets 124  136 
of which, deferred purchase price 124  136 
Other current liabilities 375  389 
Net cash proceeds since inception 1,637  1,697 
Of which:
Change in net cash proceeds during the year-to-date period (60) (57)
Net cash proceeds funded by reinvested collections 1,697  1,754 

At inception, we elected to measure the deferred purchase price at fair value with changes in fair value included in Selling, general and administrative expenses on our Condensed Consolidated Statements of Comprehensive Income (Loss). The fair value of the deferred purchase price is determined based on a discounted cash flow model which uses primarily Level 3 inputs, including estimated customer default rates. As of June 30, 2023, and December 31, 2022, our deferred purchase price related to the sales of service accounts receivable and EIP receivables was $710 million and $692 million, respectively.

We recognized losses from sales of receivables, including changes in fair value of the deferred purchase price, of $51 million and $61 million for the three months ended June 30, 2023 and 2022, respectively, and $89 million and $108 million for the six months ended June 30, 2023 and 2022, respectively, in Selling, general and administrative expenses on our Condensed Consolidated Statements of Comprehensive Income (Loss).

Continuing Involvement

Pursuant to the sale arrangements described above, we have continuing involvement with the service accounts receivable and EIP receivables we sell as we service the receivables, are required to repurchase certain receivables, including ineligible receivables, aged receivables and receivables where a write-off is imminent, and may be responsible for absorbing credit losses through reduced collections on our deferred purchase price assets. We continue to service the customers and their related receivables, including facilitating customer payment collection, in exchange for a monthly servicing fee. As the receivables are sold on a revolving basis, the customer payment collections on sold receivables may be reinvested in new receivable sales. At the direction of the purchasers of the sold receivables, we apply the same policies and procedures while servicing the sold receivables as we apply to our owned receivables, and we continue to maintain normal relationships with our customers.

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Index for Notes to the Condensed Consolidated Financial Statements
Note 5 – Spectrum License Transactions

The following table summarizes our spectrum license activity for the six months ended June 30, 2023:
(in millions) 2023
Spectrum licenses, beginning of year $ 95,798 
Spectrum license acquisitions 68 
Costs to clear spectrum 23 
Spectrum licenses, end of period $ 95,889 

Cash payments to acquire spectrum licenses and payments for costs to clear spectrum are included in Purchases of spectrum licenses and other intangible assets, including deposits, on our Condensed Consolidated Statements of Cash Flows for the three and six months ended June 30, 2023.

Spectrum Transactions

In September 2022, the Federal Communications Commission (“FCC”) announced that we were the winning bidder of 7,156 licenses in Auction 108 (2.5 GHz spectrum) for an aggregate price of $304 million. At inception of Auction 108 in June 2022, we deposited $65 million. We paid the FCC the remaining $239 million for the licenses won in the auction in September 2022. The aggregate cash payments made to the FCC are included in Other assets on our Condensed Consolidated Balance Sheets as of June 30, 2023, and will remain there until the corresponding licenses are received. The timing of when the licenses will be issued will be determined by the FCC after all post-auction procedures have been completed.

As of June 30, 2023, the activities that are necessary to get the C-band, 3.45 GHz and 2.5 GHz spectrum, acquired pursuant to FCC Auctions 107, 110 and 108, ready for its intended use have not begun; as such, capitalization of the interest associated with the costs of deploying these spectrum licenses has not begun.

License Purchase Agreements

DISH Network Corporation

On July 1, 2020, we and DISH Network Corporation (“DISH”) entered into a license purchase agreement (the “DISH License Purchase Agreement”) pursuant to which DISH agreed to purchase certain 800 MHz spectrum licenses for a total of approximately $3.6 billion. The closing of the sale of spectrum under the DISH License Purchase Agreement remains subject to FCC approval. The application for FCC approval was required under the agreement to be submitted by the parties no later than June 1, 2023. As of July 27, 2023, DISH has failed to take the actions necessary to file the application as required under the DISH License Purchase Agreement; however, at the request of the Department of Justice, we have agreed not to take action to terminate the DISH License Purchase Agreement until on or about August 11, 2023. We believe the additional time is also prudent to allow the parties to determine whether an alternative arrangement is feasible, and we continue to discuss options with DISH about possible alternatives to the sale of the spectrum on the terms set forth in the DISH License Purchase Agreement. If the FCC filing is made before the agreement is terminated and the FCC subsequently approves the transaction, the parties will be required to close the agreement within five days of receiving such FCC approval.

In the event we terminate the DISH License Purchase Agreement due to DISH’s breach or DISH later fails to deliver the purchase price following the satisfaction or waiver of all closing conditions, DISH is liable to pay us a fee of $72 million as our sole remedy; provided, however that if the transaction has not closed by April 1, 2024, other than due to the breach by a party of its terms, both parties will have the right to terminate the License Purchase Agreement and in such event no termination fee would be payable to us.

Additionally, if DISH does not exercise the option to purchase the 800 MHz spectrum licenses, we are required, unless otherwise approved under the complaint and proposed final judgment agreed to by us, Deutsche Telekom AG (“DT”), Sprint Corporation, now known as Sprint LLC (“Sprint”), SoftBank Group Corp. (“SoftBank”) and DISH with the U.S. District Court for the District of Columbia, which was approved by the Court on April 1, 2020, to offer the licenses for sale through an auction. If the specified minimum price of $3.6 billion is not met in the auction, we would be relieved of the obligation to sell the licenses.

Channel 51 License Co LLC and LB License Co, LLC

On August 8, 2022, we, Channel 51 License Co LLC and LB License Co, LLC (together with Channel 51 License Co LLC, the “Sellers”) entered into License Purchase Agreements pursuant to which we will acquire spectrum in the 600 MHz band from the Sellers in exchange for total cash consideration of $3.5 billion.
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Index for Notes to the Condensed Consolidated Financial Statements
The licenses will be acquired without any associated networks but are currently being utilized by us through exclusive leasing arrangements with the Sellers.

On March 30, 2023, we and the Sellers entered into Amended and Restated License Purchase Agreements pursuant to which we and the Sellers agreed to separate the transaction into two tranches of licenses, with the closings on the acquisitions of certain licenses in Chicago, Dallas and New Orleans (together representing $492 million of the aggregate $3.5 billion cash consideration) being deferred in order to potentially expedite the regulatory approval process for the remainder of the licenses. The licenses being acquired by us, and the total consideration being paid for the licenses, remains the same. We anticipate that the first closing will occur in late 2023 and that the second closing (on the deferred licenses) will occur in 2024.

The parties have agreed that each of the closings will occur within 180 days after the receipt of the applicable required regulatory approvals, and payment of each portion of the aggregate $3.5 billion purchase price will occur no later than 40 days after the date of each respective closing.

Note 6 – Fair Value Measurements

The carrying values of Cash and cash equivalents, Accounts receivable and Accounts payable and accrued liabilities approximate fair value due to the short-term maturities of these instruments. The carrying values of EIP receivables approximate fair value as the receivables are recorded at their present value using an imputed interest rate.

Derivative Financial Instruments

Periodically, we use derivatives to manage exposure to market risk, such as interest rate risk. We designate certain derivatives as hedging instruments in a qualifying hedge accounting relationship to help minimize significant, unplanned fluctuations in cash flows or fair values caused by designated market risks, such as interest rate volatility. We do not use derivatives for trading or speculative purposes.

Cash flows associated with qualifying hedge derivative instruments are presented in the same category on our Condensed Consolidated Statements of Cash Flows as the item being hedged. For fair value hedges, the change in the fair value of the derivative instruments is recognized in earnings through the same income statement line item as the change in the fair value of the hedged item. For cash flow hedges, the change in the fair value of the derivative instruments is reported in Other comprehensive income and recognized in earnings when the hedged item is recognized in earnings, again, through the same income statement line item.

We did not have any significant derivative instruments outstanding as of June 30, 2023, or December 31, 2022.

Interest Rate Lock Derivatives

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

Aggregate changes in the fair value of the interest rate lock derivatives, net of tax and amortization, of $1.2 billion and $1.3 billion are presented in Accumulated other comprehensive loss on our Condensed Consolidated Balance Sheets as of June 30, 2023, and December 31, 2022, respectively.

For the three months ended June 30, 2023 and 2022, $55 million and $50 million, respectively, and for the six months ended June 30, 2023 and 2022, $108 million and $100 million, respectively, were amortized from Accumulated other comprehensive loss into Interest expense, net, on our Condensed Consolidated Statements of Comprehensive Income (Loss). We expect to amortize $227 million of the Accumulated other comprehensive loss associated with the derivatives into Interest expense, net, over the 12 months ending June 30, 2024.

Deferred Purchase Price Assets

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

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Index for Notes to the Condensed Consolidated Financial Statements
The carrying amounts of our deferred purchase price assets, which are measured at fair value on a recurring basis and are included on our Condensed Consolidated Balance Sheets, were $710 million and $692 million as of June 30, 2023, and December 31, 2022, respectively.

Debt

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

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 and ABS Notes. The fair value estimates were based on information available as of June 30, 2023, and December 31, 2022. As such, our estimates are not necessarily indicative of the amount we could realize in a current market exchange.

The carrying amounts and fair values of our short-term and long-term debt included on our Condensed Consolidated Balance Sheets were as follows:
(in millions) Level within the Fair Value Hierarchy June 30, 2023 December 31, 2022
Carrying Amount Fair Value
Carrying Amount (1)
Fair Value (1)
Liabilities:
Senior Notes to third parties 1 $ 72,884  $ 66,295  $ 66,582  $ 59,011 
Senior Notes to affiliates 2 1,495  1,458  1,495  1,460 
Senior Secured Notes to third parties 1 2,746  2,635  3,117  2,984 
ABS Notes to third parties 2 747  740  746  744 
(1)     Excludes $20 million as of December 31, 2022, in other financial liabilities as the carrying values approximate fair value, primarily due to the short-term maturities of these instruments.

Note 7 – Debt

The following table sets forth the debt balances and activity as of, and for the six months ended, June 30, 2023:
(in millions) December 31,
2022
Proceeds from Issuances and Borrowings (1)
 Repayments
Reclassifications (1)
Other (2)
 June 30,
2023
Short-term debt $ 5,164  $ —  $ (354) $ 3,012  $ (91) $ 7,731 
Long-term debt 65,301  6,462  —  (3,012) (105) 68,646 
Total debt to third parties 70,465  6,462  (354) —  (196) 76,377 
Long-term debt to affiliates 1,495  —  —  —  —  1,495 
Total debt $ 71,960  $ 6,462  $ (354) $ —  $ (196) $ 77,872 
(1)Issuances and borrowings and reclassifications are recorded net of accrued or paid issuance costs, discounts and premiums.
(2)Other includes the amortization of premiums, discounts, debt issuance costs and consent fees.

Our effective interest rate, excluding the impact of derivatives and capitalized interest, was approximately 4.0% and 3.8% on weighted-average debt outstanding of $76.4 billion and $71.4 billion for the three months ended June 30, 2023 and 2022, respectively, and 4.0% and 3.9% on weighted-average debt outstanding of $74.9 billion and $72.6 billion for the six months ended June 30, 2023 and 2022, respectively. The weighted-average debt outstanding was calculated by applying an average of the monthly ending balances of total short-term and long-term debt to third parties and short-term and long-term debt to affiliates, net of unamortized premiums, discounts, debt issuance costs and consent fees.

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Index for Notes to the Condensed Consolidated Financial Statements
Issuances and Borrowings

During the six months ended June 30, 2023, we issued the following Senior Notes:
(in millions) Principal Issuances Premiums/Discounts and Issuance Costs, Net Net Proceeds from Issuance of Long-Term Debt Issue Date
4.950% Senior Notes due 2028
 $ 1,000  $ (6) $ 994  February 9, 2023
5.050% Senior Notes due 2033
 1,250  (9) 1,241  February 9, 2023
5.650% Senior Notes due 2053
 750  26  776  February 9, 2023
4.800% Senior Notes due 2028
 900  (5) 895  May 11, 2023
5.050% Senior Notes due 2033
 1,350  (28) 1,322  May 11, 2023
5.750% Senior Notes due 2054
 1,250  (16) 1,234  May 11, 2023
Total of Senior Notes issued $ 6,500  $ (38) $ 6,462 

Note Repayments

During the six months ended June 30, 2023, we made the following repayments:
(in millions) Principal Amount Repayment Date
4.738% Secured Series 2018-1 A-1 Notes due 2025
 $ 263  Various
5.152% Series 2018-1 A-2 Notes due 2028
 91  Various
Total Repayments $ 354 

Asset-backed Notes

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

The expected maturities of our ABS Notes are as follows:
Expected Maturities
(in millions) 2024 2025
4.910% Class A Senior ABS Notes due 2028
 $ 198  $ 552 

Variable Interest Entities

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

The following table summarizes the carrying amounts and classification of assets and liabilities included in our Condensed Consolidated Balance Sheets with respect to the ABS Entities:
June 30,
2023		 December 31,
2022
(in millions)
Assets
Equipment installment plan receivables, net $ 771  $ 652 
Equipment installment plan receivables due after one year, net 150  281 
Other current assets 87  73 
Liabilities
Accounts payable and accrued liabilities $ 1  $ 1 
Long-term debt 747  746 

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

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Index for Notes to the Condensed Consolidated Financial Statements
Restricted Cash

Certain provisions of our debt agreements require us to maintain specified cash collateral balances. Amounts associated with these balances are considered to be restricted cash. See Note 15 - Additional Financial Information for our reconciliation of Cash and cash equivalents, including restricted cash and cash held for sale.

Commercial Paper

Subsequent to June 30, 2023, on July 25, 2023, we established an unsecured short-term commercial paper program with the ability to borrow up to $2.0 billion from time to time. This program will supplement our other available external financing arrangements, and proceeds are expected to be used for general corporate purposes. As of July 27, 2023, we have not issued any amount under this program.

Note 8 – Tower Obligations

Existing CCI Tower Lease Arrangements

In 2012, we conveyed to Crown Castle International Corp. (“CCI”) the exclusive right to manage and operate approximately 6,200 tower sites (“CCI Lease Sites”) via a master prepaid lease with site lease terms ranging from 23 to 37 years. CCI has fixed-price purchase options for the CCI Lease Sites totaling approximately $2.0 billion, exercisable annually on a per-tranche basis at the end of the lease term during the period from December 31, 2035, through December 31, 2049. If CCI exercises its purchase option for any tranche, it must purchase all the towers in the tranche. We lease back a portion of the space at certain tower sites.

Assets and liabilities associated with the operation of the tower sites were transferred to special purpose entities (“SPEs”). Assets included ground lease agreements or deeds for the land on which the towers are situated, the towers themselves and existing subleasing agreements with other mobile network operator tenants that lease space at the tower sites. Liabilities included the obligation to pay ground lease rentals, property taxes and other executory costs.

We determined the SPEs containing the CCI Lease Sites (“Lease Site SPEs”) are VIEs as they lack sufficient equity to finance their activities. We have a variable interest in the Lease Site SPEs but are not the primary beneficiary as we lack the power to direct the activities that most significantly impact the Lease Site SPEs’ economic performance. These activities include managing tenants and underlying ground leases, performing repair and maintenance on the towers, the obligation to absorb expected losses and the right to receive the expected future residual returns from the purchase option to acquire the CCI Lease Sites. As we determined that we are not the primary beneficiary and do not have a controlling financial interest in the Lease Site SPEs, the Lease Site SPEs are not included on our condensed consolidated financial statements.

However, we also considered if this arrangement resulted in the sale of the CCI Lease Sites for which we would derecognize the tower assets. By assessing whether control had transferred, we concluded that transfer of control criteria, as discussed in the revenue standard, were not met. Accordingly, we recorded this arrangement as a financing whereby we recorded debt, a financial obligation, and the CCI Lease Sites tower assets remained on our Condensed Consolidated Balance Sheets. We recorded long-term financial obligations in the amount of the net proceeds received and recognize interest on the tower obligations. The tower obligations are increased by interest expense and amortized through contractual leaseback payments made by us to CCI and through net cash flows generated and retained by CCI from the operation of the tower sites.

Acquired CCI Tower Lease Arrangements

Prior to our merger (the “Merger”) with Sprint, Sprint entered into a lease-out and leaseback arrangement with Global Signal Inc., a third party that was subsequently acquired by CCI, that conveyed to CCI the exclusive right to manage and operate approximately 6,400 tower sites (“Master Lease Sites”) via a master prepaid lease. These agreements were assumed upon the close of the Merger, at which point the remaining term of the lease-out was approximately 17 years with no renewal options. CCI has a fixed price purchase option for all (but not less than all) of the leased or subleased sites for approximately $2.3 billion, exercisable one year prior to the expiration of the agreement and ending 120 days prior to the expiration of the agreement. We lease back a portion of the space at certain tower sites.

We considered if this arrangement resulted in the sale of the Master Lease Sites for which we would derecognize the tower assets. By assessing whether control had transferred, we concluded that transfer of control criteria, as discussed in the revenue standard, were not met.
18
Index for Notes to the Condensed Consolidated Financial Statements
Accordingly, we recorded this arrangement as a financing whereby we recorded debt, a financial obligation, and the Master Lease Sites tower assets remained on our Condensed Consolidated Balance Sheets.

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

We recognize interest expense on the tower obligations. The tower obligations are increased by the interest expense and amortized through contractual leaseback payments made by us to CCI. The tower assets are reported in Property and equipment, net on our Condensed Consolidated Balance Sheets and are depreciated to their estimated residual values over the expected useful life of the towers, which is 20 years.

Leaseback Arrangement

On January 3, 2022, we entered into an agreement (the “Crown Agreement”) with CCI. The Crown Agreement extends the current term of the leasebacks by up to 12 years and modifies the leaseback payments for both the Existing CCI Tower Lease Arrangement and the Acquired CCI Tower Lease Arrangement. As a result of the Crown Agreement, there was an increase in our financing obligation as of the effective date of the Crown Agreement of approximately $1.2 billion, with a corresponding decrease to Other long-term liabilities associated with unfavorable contract terms. The modification resulted in a revised interest rate under the effective interest method for the tower obligations: 11.6% for the Existing CCI Tower Lease Arrangement and 5.3% for the Acquired CCI Tower Lease Arrangement. There were no changes made to either of our master prepaid leases with CCI.

The following table summarizes the balances associated with both of the tower arrangements on our Condensed Consolidated Balance Sheets:
(in millions) June 30,
2023		 December 31,
2022
Property and equipment, net $ 2,305  $ 2,379 
Tower obligations 3,860  3,934 
Other long-term liabilities 554  554 

Future minimum payments related to the tower obligations are approximately $410 million for the 12-month period ending June 30, 2024, $792 million in total for both of the 12-month periods ending June 30, 2025 and 2026, $798 million in total for both of the 12-month periods ending June 30, 2027 and 2028, and $4.3 billion in total thereafter.

We are contingently liable for future ground lease payments through the remaining term of the CCI Lease Sites and the Master Lease Sites. These contingent obligations are not included in Operating lease liabilities as any amount due is contractually owed by CCI based on the subleasing arrangement. Under the arrangement, we remain primarily liable for ground lease payments on approximately 900 sites and have included lease liabilities of $245 million in our Operating lease liabilities as of June 30, 2023.

Note 9 – Revenue from Contracts with Customers

Disaggregation of Revenue

We provide wireless communications services to three primary categories of customers:

•Postpaid customers generally include customers who are qualified to pay after receiving wireless communications services utilizing phones, High Speed Internet, mobile internet devices, including tablets and hotspots, wearables, DIGITS or other connected devices, including SyncUP and IoT;
•Prepaid customers generally include customers who pay for wireless communications services in advance; and
•Wholesale customers include Machine-to-Machine and Mobile Virtual Network Operator customers that operate on our network but are managed by wholesale partners.
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Index for Notes to the Condensed Consolidated Financial Statements
Postpaid service revenues, including postpaid phone revenues and postpaid other revenues, were as follows:
Three Months Ended June 30, Six Months Ended June 30,
(in millions) 2023 2022 2023 2022
Postpaid service revenues
Postpaid phone revenues $ 10,799  $ 10,407  $ 21,451  $ 20,638 
Postpaid other revenues 1,271  1,038  2,481  2,008 
Total postpaid service revenues $ 12,070  $ 11,445  $ 23,932  $ 22,646 

We operate as a single operating segment. The balances presented in each revenue line item on our Condensed Consolidated Statements of Comprehensive Income (Loss) represent categories of revenue from contracts with customers disaggregated by type of product and service. Postpaid and prepaid service revenues also include revenues earned for providing premium services to customers, such as device insurance services. Revenue generated from the lease of mobile communication devices is included in Equipment revenues on our Condensed Consolidated Statements of Comprehensive Income (Loss).

Contract Balances

The contract asset and contract liability balances from contracts with customers as of June 30, 2023, and December 31, 2022, were as follows:
(in millions) Contract
Assets		 Contract
Liabilities
Balance as of December 31, 2022 $ 534  $ 748 
Balance as of June 30, 2023 665  789 
Change $ 131  $ 41 

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.

Contract asset balances increased primarily due to an increase in promotions with an extended service contract, partially offset by billings on existing contracts and impairment, which is recognized as bad debt expense. The current portion of our contract assets of approximately $490 million and $356 million as of June 30, 2023, and December 31, 2022, respectively, was included in Other current assets on our Condensed Consolidated Balance Sheets.

Contract liabilities are recorded when fees are collected, or we have an unconditional right to consideration (a receivable) in advance of delivery of goods or services. Changes in contract liabilities are primarily related to the activity of prepaid customers. Contract liabilities are primarily included in Deferred revenue on our Condensed Consolidated Balance Sheets.

Revenues for the three and six months ended June 30, 2023 and 2022 include the following:
Three Months Ended June 30, Six Months Ended June 30,
(in millions) 2023 2022 2023 2022
Amounts included in the beginning of year contract liability balance $ 39  $ 31  $ 706  $ 685 

Remaining Performance Obligations

As of June 30, 2023, the aggregate amount of transaction price allocated to remaining service performance obligations for postpaid contracts with subsidized devices and promotional bill credits that result in an extended service contract is $1.8 billion. We expect to recognize revenue as the service is provided on these postpaid contracts over an extended contract term of 24 months from the time of origination.

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

Certain of our wholesale, roaming and service contracts include variable consideration based on usage and performance. This variable consideration has been excluded from the disclosure of remaining performance obligations. As of June 30, 2023, the aggregate amount of the contractual minimum consideration for wholesale, roaming and service contracts is $1.2 billion, $1.8 billion and $4.1 billion for 2023, 2024, and 2025 and beyond, respectively. These contracts have a remaining duration ranging from less than one year to eight years.
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Index for Notes to the Condensed Consolidated Financial Statements
Contract Costs

The balance of deferred incremental costs to obtain contracts with customers was $2.0 billion and $1.9 billion as of June 30, 2023, and December 31, 2022, respectively, and is included in Other assets on our Condensed Consolidated Balance Sheets. Deferred contract costs incurred to obtain postpaid service contracts are amortized over a period of 24 months. The amortization period is monitored to reflect any significant change in assumptions. Amortization of deferred contract costs included in Selling, general and administrative expenses on our Condensed Consolidated Statements of Comprehensive Income (Loss) were $444 million and $358 million for the three months ended June 30, 2023 and 2022, respectively, and $866 million and $682 million for the six months ended June 30, 2023 and 2022, respectively.

The deferred contract cost asset is assessed for impairment on a periodic basis. There were no impairment losses recognized on deferred contract cost assets for the three and six months ended June 30, 2023 and 2022.

Note 10 – Repurchases of Common Stock

2022 Stock Repurchase Program

On September 8, 2022, our Board of Directors authorized our 2022 Stock Repurchase Program for up to $14.0 billion of our common stock through September 30, 2023 (the “2022 Stock Repurchase Program”). During the three months ended June 30, 2023, we repurchased 25,183,838 shares of our common stock at an average price per share of $140.00 for a total purchase price of $3.5 billion, and during the six months ended June 30, 2023, we repurchased 58,147,778 shares of our common stock at an average price per share of $142.59 for a total purchase price of $8.3 billion, all of which were purchased under the 2022 Stock Repurchase Program. All shares purchased during the six months ended June 30, 2023, were purchased at market price. As of June 30, 2023, we had up to $2.7 billion remaining under the 2022 Stock Repurchase Program.

Subsequent to June 30, 2023, from July 1, 2023, through July 21, 2023, we repurchased 3,961,852 shares of our common stock at an average price per share of $139.43 for a total purchase price of $552 million. As of July 21, 2023, we had up to $2.2 billion remaining under the 2022 Stock Repurchase Program.

Note 11 – Wireline

Sale of the Wireline Business

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

On May 1, 2023, pursuant to the Wireline Sale Agreement, upon the terms and subject to the conditions thereof, we completed the Wireline Transaction. Under the terms of the Wireline Sale Agreement, the parties agreed to a $1 purchase price in consideration for the Purchased Interests, subject to customary adjustments, as well as payments to the Buyer pursuant to an IP transit services agreement totaling $700 million, consisting of (i) $350 million in equal monthly installments during the first year after the Closing and (ii) $350 million in equal monthly installments over the subsequent 42 months. The Buyer paid the Company $61 million at Closing. The Closing of the Wireline Transaction did not have a significant impact on the Loss (gain) on disposal group held for sale on our Condensed Consolidated Statements of Comprehensive Income (Loss).

The present value of the $700 million liability for fees payable for IP transit services was recognized and treated as part of the consideration exchanged with the Buyer to complete the disposal transaction, as there is a remote likelihood we will use any more than a de minimis amount of the services under the IP transit services agreement. Therefore, we concluded the cash payment obligations under the IP transit services agreement were part of the consideration paid to the Buyer to facilitate the sale of the Wireline Business, and therefore, included in measuring the fair value less costs to sell of the Wireline Business disposal group. As of June 30, 2023, $308 million and $295 million of this liability, including accrued interest, is presented within Other current liabilities and Other long-term liabilities, respectively, on our Condensed Consolidated Balance Sheets in accordance with the expected timing of the related payments. As of June 30, 2023, $40 million and $31 million for contractual and other payments associated with the Wireline Transaction are presented within Other current liabilities and Other long-term liabilities, respectively, on our Condensed Consolidated Balance Sheets in accordance with the expected timing of the related payments.

21
Index for Notes to the Condensed Consolidated Financial Statements
During the six months ended June 30, 2023, we recognized a pre-tax gain of $25 million, which is included within Loss (gain) on disposal group held for sale on our Condensed Consolidated Statements of Comprehensive Income (Loss). This gain was primarily due to a decrease in our accrual of estimated costs to sell.

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

2022 Wireline Impairment

During the three months ended June 30, 2022, we determined that the retirement of the legacy Sprint CDMA and LTE wireless networks triggered the need to assess the Wireline long-lived assets for impairment, as these assets no longer support our wireless network and the associated customers and cash flows in a significant manner. The results of this assessment indicated that certain Wireline long-lived assets were impaired, and as a result, we recorded noncash impairment expense of $477 million during the three months ended June 30, 2022, of which $258 million was related to Wireline Property and equipment, $212 million was related to Operating lease right-of-use assets and $7 million was related to Other intangible assets. The expense is included within Impairment expense on our Condensed Consolidated Statements of Comprehensive Income (Loss). There was no impairment expense recognized for the three and six months ended June 30, 2023.

Note 12 – Earnings (Loss) Per Share

The computation of basic and diluted earnings (loss) per share was as follows:
Three Months Ended June 30, Six Months Ended June 30,
(in millions, except shares and per share amounts) 2023 2022 2023 2022
Net income (loss) $ 2,221  $ (108) $ 4,161  $ 605 
Weighted-average shares outstanding – basic 1,193,078,891  1,253,932,986  1,206,270,341  1,252,228,959 
Effect of dilutive securities:
Outstanding stock options and unvested stock awards 2,454,608  —  3,950,617  4,644,868 
Weighted-average shares outstanding – diluted 1,195,533,499  1,253,932,986  1,210,220,958  1,256,873,827 
Earnings (loss) per share – basic $ 1.86  $ (0.09) $ 3.45  $ 0.48 
Earnings (loss) per share – diluted $ 1.86  $ (0.09) $ 3.44  $ 0.48 
Potentially dilutive securities:
Outstanding stock options and unvested stock awards 246,892  3,921,770  160,116  73,885 
SoftBank contingent consideration (1)
 48,751,557  48,751,557  48,751,557  48,751,557 
(1)     Represents the weighted-average SoftBank Specified Shares that are contingently issuable from the Merger date of April 1, 2020, pursuant to a letter agreement dated February 20, 2020, between T-Mobile, SoftBank and DT.

As of June 30, 2023, we had authorized 100 million shares of preferred stock, with a par value of $0.00001 per share. There was no preferred stock outstanding as of June 30, 2023 and 2022. Potentially dilutive securities were not included in the computation of diluted earnings (loss) per share if to do so would have been anti-dilutive.

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

Note 13 – Commitments and Contingencies

Purchase Commitments

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

Our purchase commitments are approximately $4.2 billion for the 12-month period ending June 30, 2024, $4.7 billion in total for both of the 12-month periods ending June 30, 2025 and 2026, $2.8 billion in total for both of the 12-month periods ending June 30, 2027 and 2028, and $2.5 billion in total thereafter. These amounts are not reflective of our entire anticipated purchases under the related agreements but are determined based on the non-cancelable quantities or termination amounts to which we are contractually obligated.
22
Index for Notes to the Condensed Consolidated Financial Statements

On March 9, 2023, we entered into a Merger and Unit Purchase Agreement for the acquisition of 100% of the outstanding equity of Ka’ena Corporation and its subsidiaries including, among others, Mint Mobile LLC, for a maximum purchase price of $1.35 billion to be paid out 39% in cash and 61% in shares of T-Mobile common stock. The upfront payment is estimated to be approximately $950 million, before working capital adjustments. The agreement remains subject to regulatory approval and the estimated purchase price is excluded from our reported purchase commitments above. See Note 2 – Business Combination for additional details.

Spectrum Leases

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

Our spectrum lease and service credit commitments, including renewal periods, are approximately $310 million for the 12-month period ending June 30, 2024, $595 million in total for both of the 12-month periods ending June 30, 2025 and 2026, $658 million in total for both of the 12-month periods ending June 30, 2027 and 2028, and $4.5 billion in total thereafter.

On August 8, 2022, we entered into License Purchase Agreements to acquire spectrum in the 600 MHz band from Channel 51 License Co LLC and LB License Co, LLC in exchange for total cash consideration of $3.5 billion. The licenses will be acquired without any associated networks but are currently being utilized by us through exclusive leasing arrangements with the Sellers. On March 30, 2023, we and the Sellers entered into Amended and Restated License Purchase Agreements pursuant to which we and the Sellers agreed to separate the transaction into two tranches of licenses, with the closings on the acquisitions of certain licenses in Chicago, Dallas and New Orleans (together representing $492 million of the aggregate $3.5 billion cash consideration) being deferred in order to potentially expedite the regulatory approval process for the remainder of the licenses. The agreements remain subject to regulatory approval and are excluded from our reported purchase commitments above. See Note 5 – Spectrum License Transactions for additional details.

Contingencies and Litigation

Litigation and Regulatory Matters

We are involved in various lawsuits and disputes, claims, government agency investigations and enforcement actions, and other proceedings (“Litigation and Regulatory Matters”) that arise in the ordinary course of business, which include claims of patent infringement (most of which are asserted by non-practicing entities primarily seeking monetary damages), class actions, and proceedings to enforce FCC or other government agency rules and regulations. Those Litigation and Regulatory Matters are at various stages, and some of them may proceed to trial, arbitration, hearing, or other adjudication that could result in fines, penalties, or awards of monetary or injunctive relief in the coming 12 months if they are not otherwise resolved. We have established an accrual with respect to certain of these matters, where appropriate. The accruals are reflected on our condensed consolidated financial statements, but they are not considered to be, individually or in the aggregate, material. An accrual is established when we believe it is both probable that a loss has been incurred and an amount can be reasonably estimated. For other matters, where we have not determined that a loss is probable or because the amount of loss cannot be reasonably estimated, we have not recorded an accrual due to various factors typical in contested proceedings, including, but not limited to, uncertainty concerning legal theories and their resolution by courts or regulators, uncertain damage theories and demands, and a less than fully developed factual record. For Litigation and Regulatory Matters that may result in a contingent gain, we recognize such gains on our condensed consolidated financial statements when the gain is realized or realizable. We recognize legal costs expected to be incurred in connection with Litigation and Regulatory Matters as they are incurred. Except as otherwise specified below, we do not expect that the ultimate resolution of these Litigation and Regulatory Matters, individually or in the aggregate, will have a material adverse effect on our financial position, but we note that an unfavorable outcome of some or all of the specific matters identified below or other matters that we are or may become involved in could have a material adverse impact on results of operations or cash flows for a particular period. This assessment is based on our current understanding of relevant facts and circumstances. As such, our view of these matters is subject to inherent uncertainties and may change in the future.
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Index for Notes to the Condensed Consolidated Financial Statements
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 June 30, 2023, and that accrual was included in Accounts payable and accrued liabilities on our Condensed Consolidated Balance Sheets.

On April 1, 2020, in connection with the closing of the Merger, we assumed the contingencies and litigation matters of Sprint. Those matters include a wide variety of disputes, claims, government agency investigations and enforcement actions, and other proceedings. These matters include, among other things, certain ongoing FCC and state government agency investigations into Sprint’s Lifeline program. In September 2019, Sprint notified the FCC that it had claimed monthly subsidies for serving subscribers even though these subscribers may not have met usage requirements under Sprint's usage policy for the Lifeline program, due to an inadvertent coding issue in the system used to identify qualifying subscriber usage that occurred in July 2017 while the system was being updated. Sprint has made a number of payments to reimburse the federal government and certain states for excess subsidy payments.

We note that pursuant to Amendment No. 2, dated as of February 20, 2020, to the Business Combination Agreement, dated as of April 29, 2018, by and among the Company, Sprint and the other parties named therein (as amended, the “Business Combination Agreement”), SoftBank agreed to indemnify us against certain specified matters and losses, including those relating to the Lifeline matters described above. Resolution of these matters could require us to make additional reimbursements and pay additional fines and penalties, which we do not expect to have a significant impact on our financial results. We expect that any additional liabilities related to these indemnified matters would be indemnified and reimbursed by SoftBank.

On June 1, 2021, a putative shareholder class action and derivative lawsuit was filed in the Delaware Court of Chancery, Dinkevich v. Deutsche Telekom AG, et al., Case No. C.A. No. 2021-0479, against DT, SoftBank and certain of our current and former officers and directors, asserting breach of fiduciary duty claims relating to the repricing amendment to the Business Combination Agreement, and to SoftBank’s monetization of its T-Mobile shares. We are also named as a nominal defendant in the case. We are unable to predict the potential outcome of these claims.

On August 12, 2021, we became aware of a cybersecurity issue involving unauthorized access to T-Mobile’s systems (the “August 2021 cyberattack”). We immediately began an investigation and engaged cybersecurity experts to assist with the assessment of the incident and to help determine what data was impacted. Our investigation uncovered that the perpetrator had illegally gained access to certain areas of our systems on or about March 18, 2021, but only gained access to and took data of current, former, and prospective customers beginning on or about August 3, 2021. With the assistance of our outside cybersecurity experts, we located and closed the unauthorized access to our systems and identified current, former and prospective customers whose information was impacted and notified them, consistent with state and federal requirements. We also undertook a number of other measures to demonstrate our continued support and commitment to data privacy and protection. We also coordinated with law enforcement. Our forensic investigation is complete, and we believe we have a full view of the data compromised.

As a result of the August 2021 cyberattack, we have become subject to numerous lawsuits, including mass arbitration claims and multiple class action lawsuits that have been filed in numerous jurisdictions seeking, among other things, unspecified monetary damages, costs and attorneys’ fees arising out of the August 2021 cyberattack. In December 2021, the Judicial Panel on Multidistrict Litigation consolidated the federal class action lawsuits in the U.S. District Court for the Western District of Missouri under the caption In re: T-Mobile Customer Data Security Breach Litigation, Case No. 21-md-3019-BCW. On July 22, 2022, we entered into an agreement to settle the lawsuit. On June 29, 2023, the Court issued an order granting final approval of the settlement, which is subject to potential appeals. Under the terms of the settlement, we would pay an aggregate of $350 million to fund claims submitted by class members, the legal fees of plaintiffs’ counsel and the costs of administering the settlement. We would also commit to an aggregate incremental spend of $150 million for data security and related technology in 2022 and 2023. We previously paid $35 million for claims administration purposes. We expect the remaining portion of the $350 million settlement payment to fund claims to be made by August 29, 2023, unless settlement is delayed by potential appeals. We anticipate that, upon exhaustion of any appeals, the settlement will provide a full release of all claims arising out of the August 2021 cyberattack by class members who do not opt out, against all defendants, including us, our subsidiaries and affiliates, and our directors and officers. The settlement contains no admission of liability, wrongdoing or responsibility by any of the defendants. We have the right to terminate the settlement agreement under certain conditions.

We anticipate that this settlement of the class action, along with other settlements of separate consumer claims that have been previously completed or are currently pending, will resolve substantially all of the claims brought to date by our current, former and prospective customers who were impacted by the 2021 cyberattack. In connection with the proposed class action settlement and the separate settlements, we recorded a total pre-tax charge of approximately $400 million in the second quarter of 2022.
24
Index for Notes to the Condensed Consolidated Financial Statements
During the six months ended June 30, 2023, we recognized $50 million in reimbursements from insurance carriers for costs incurred related to the August 2021 cyberattack, which is included as a reduction to Selling, general and administrative expenses on our Condensed Consolidated Statements of Comprehensive Income (Loss). The ultimate resolution of the class action depends on the number of plaintiffs who opt-out of the proposed settlement and whether the proposed settlement will be appealed.

In addition, in September 2022, a purported Company shareholder filed a derivative action in the Delaware Chancery Court under the caption Harper v. Sievert et al., Case No. 2022-0819-SG, against our current directors and certain of our former directors, alleging claims for breach of fiduciary duty relating to the Company’s cybersecurity practices. We are also named as a nominal defendant in the lawsuit. We are unable at this time to predict the potential outcome of this lawsuit or whether we may be subject to further private litigation.

We have also received inquiries from various government agencies, law enforcement and other governmental authorities related to the August 2021 cyberattack which could result in substantial fines or penalties. We are cooperating fully with these agencies and regulators and working with them to resolve these matters. While we hope to resolve them in the near term, we cannot predict the timing or outcome of any of these matters, or whether we may be subject to further regulatory inquiries, investigations, or enforcement actions.

In light of the inherent uncertainties involved in such matters and based on the information currently available to us, in addition to the previously recorded pre-tax charge of approximately $400 million noted above, we believe it is reasonably possible that we could incur additional losses associated with these proceedings and inquiries, and we will continue to evaluate information as it becomes known and will record an estimate for losses at the time or times when it is both probable that a loss has been incurred and the amount of the loss is reasonably estimable. Ongoing legal and other costs related to these proceedings and inquiries, as well as any potential future actions, may be substantial, and losses associated with any adverse judgments, settlements, penalties or other resolutions of such proceedings and inquiries could be material to our business, reputation, financial condition, cash flows and operating results.

On June 17, 2022, plaintiffs filed a putative antitrust class action complaint in the Northern District of Illinois, Dale et al. v. Deutsche Telekom AG, et al., Case No. 1:22-cv-03189, against DT, T-Mobile, and SoftBank, alleging that the Merger violated the antitrust laws and harmed competition in the U.S. retail cell service market. Plaintiffs seek injunctive relief and trebled monetary damages on behalf of a purported class of AT&T and Verizon customers who plaintiffs allege paid artificially inflated prices due to the Merger. We intend to vigorously defend this lawsuit, but we are unable to predict the potential outcome.

On January 5, 2023, we identified that a bad actor was obtaining data through a single Application Programming Interface (“API”) without authorization. Based on our investigation, the impacted API is only able to provide a limited set of customer account data, including name, billing address, email, phone number, date of birth, T-Mobile account number and information such as the number of lines on the account and plan features. The result from our investigation indicates that the bad actor(s) obtained data from this API for approximately 37 million current postpaid and prepaid customer accounts, though many of these accounts did not include the full data set. We believe that the bad actor first retrieved data through the impacted API starting on or around November 25, 2022. We have notified individuals whose information was impacted consistent with state and federal requirements.

In connection with the January 2023 cyberattack, we became subject to consumer class actions and regulatory inquires, to which we will continue to respond in due course and may incur significant expenses. However, we cannot predict the timing or outcome of any of these potential matters, or whether we may be subject to additional legal proceedings, claims, regulatory inquiries, investigations, or enforcement actions. In addition, we are unable to predict the full impact of this incident on customer behavior in the future, including whether a change in our customers’ behavior could negatively impact our results of operations on an ongoing basis, although we presently do not expect that it will have a material effect on our operations.

Note 14 – Restructuring Costs

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

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Index for Notes to the Condensed Consolidated Financial Statements
The following table summarizes the expenses incurred in connection with our Merger restructuring initiatives:
(in millions) Three Months Ended
June 30, 2023		 Six Months Ended
June 30, 2023		 Incurred to Date
Contract termination costs $ 24  $ 24  $ 447 
Severance costs —  3  574 
Network decommissioning 84  171  1,648 
Total restructuring plan expenses $ 108  $ 198  $ 2,669 

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

Our Merger restructuring initiatives also include the acceleration or termination of certain of our operating and financing leases for cell sites, switch sites, retail stores, network equipment and office facilities. Incremental expenses associated with accelerating amortization of the right-of-use assets on lease contracts were $97 million and $747 million for the three months ended June 30, 2023 and 2022, respectively, and $236 million and $1.2 billion for the six months ended June 30, 2023 and 2022, respectively, and are included in Costs of services and Selling, general and administrative expenses on our Condensed Consolidated Statements of Comprehensive Income (Loss).

The changes in the liabilities associated with our Merger restructuring initiatives, including expenses incurred and cash payments, are as follows:
(in millions) December 31,
2022		 Expenses Incurred Cash Payments
Adjustments for Non-Cash Items (1)
 June 30,
2023
Contract termination costs $ 190  $ 24  $ (185) $ (1) $ 28 
Severance costs —  3  (6) 3  — 
Network decommissioning 280  171  (273) (14) 164 
Total $ 470  $ 198  $ (464) $ (12) $ 192 
(1)    Non-cash items primarily consist of the write-off of assets within Network decommissioning.

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

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

Note 15 – Additional Financial Information

Accounts Payable and Accrued Liabilities

Accounts payable and accrued liabilities, excluding amounts classified as held for sale, are summarized as follows:
(in millions) June 30,
2023		 December 31,
2022
Accounts payable $ 5,465  $ 7,213 
Payroll and related benefits 807  1,236 
Property and other taxes, including payroll 1,678  1,657 
Accrued interest 852  731 
Commissions and contract termination costs 262  523 
Toll and interconnect 203  227 
Other 605  688 
Accounts payable and accrued liabilities $ 9,872  $ 12,275 

Book overdrafts included in accounts payable were $436 million and $720 million as of June 30, 2023, and December 31, 2022, respectively.

26
Index for Notes to the Condensed Consolidated Financial Statements
Supplemental Condensed Consolidated Statements of Cash Flows Information

The following table summarizes T-Mobile’s supplemental cash flow information:
Three Months Ended June 30, Six Months Ended June 30,
(in millions) 2023 2022 2023 2022
Interest payments, net of amounts capitalized $ 896  $ 989  $ 1,736  $ 1,767 
Operating lease payments 1,483  1,042  2,797  2,090 
Income tax payments 95  63  122  63 
Non-cash investing and financing activities
Non-cash beneficial interest obtained in exchange for securitized receivables $ 1,109  $ 990  $ 2,228  $ 2,008 
Change in accounts payable and accrued liabilities for purchases of property and equipment (408) (68) (737) (251)
Increase in Tower obligations from contract modification —  —  —  1,158 
Operating lease right-of-use assets obtained in exchange for lease obligations 674  591  1,113  6,566 
Financing lease right-of-use assets obtained in exchange for lease obligations 324  551  563  849 

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

Cash and cash equivalents, including restricted cash and cash held for sale, presented on our Condensed Consolidated Statements of Cash Flows were included on our Condensed Consolidated Balance Sheets as follows:
(in millions) June 30,
2023		 December 31,
2022
Cash and cash equivalents $ 6,647  $ 4,507 
Cash and cash equivalents held for sale (included in Other current assets) —  27 
Restricted cash (included in Other current assets) 87  73 
Restricted cash (included in Other assets) 74  67 
Cash and cash equivalents, including restricted cash and cash held for sale $ 6,808  $ 4,674 

Note 16 – Subsequent Events

Subsequent to June 30, 2023, from July 1, 2023, through July 21, 2023, we repurchased 3,961,852 shares of our common stock at an average price per share of $139.43 for a total purchase price of $552 million. See Note 10 – Repurchases of Common Stock for additional information.

Subsequent to June 30, 2023, on July 25, 2023, we established an unsecured short-term commercial paper program with the ability to borrow up to $2.0 billion from time to time. This program will supplement our other available external financing arrangements, and proceeds are expected to be used for general corporate purposes. As of July 27, 2023, we have not issued any amount under this program.


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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, 2022, 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:

•competition, industry consolidation and changes in the market for wireless communications services and other forms of connectivity;
•criminal cyberattacks, disruption, data loss or other security breaches;
•our inability to take advantage of technological developments on a timely basis;
•our inability to retain or motivate key personnel, hire qualified personnel or maintain our corporate culture;
•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 difficulties in maintaining multiple billing systems following our merger (the “Merger”) with Sprint Corporation (“Sprint”) pursuant to a Business Combination Agreement with Sprint and the other parties named therein (as amended, the “Business Combination Agreement”) and any unanticipated difficulties, disruption, or significant delays in our long-term strategy to convert Sprint’s legacy customers onto T-Mobile’s billing platforms;
•the impacts of the actions we have taken and conditions we have agreed to in connection with the regulatory proceedings and approvals of the Merger and the other transactions contemplated by the Business Combination Agreement (collectively, the “Transactions”), including the acquisition by DISH Network Corporation (“DISH”) of the prepaid wireless business operated under the Boost Mobile and Sprint prepaid brands (excluding the Assurance brand Lifeline customers and the prepaid wireless customers of Shenandoah Personal Communications Company LLC (“Shentel”) and Swiftel Communications, Inc.), including customer accounts, inventory, contracts, intellectual property and certain other specified assets, and the assumption of certain related liabilities (collectively, the “Prepaid Transaction”), the complaint and proposed final judgment agreed to by us, Deutsche Telekom AG (“DT”), 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 costs incurred in tracking and monitoring compliance over multiple years;
•adverse economic, political or market conditions in the U.S. and international markets, including changes resulting from increases in inflation or interest rates, supply chain disruptions and impacts of current geopolitical instability caused by the war in Ukraine;
•our inability to manage the ongoing commercial and transition services arrangements entered into in connection with the Prepaid Transaction, and known or unknown liabilities arising in connection therewith;
•the timing and effects of any future acquisition, divestiture, investment, or merger involving us;
•any disruption or failure of our third parties (including key suppliers) to provide products or services for the operation of our business;
•our inability to fully realize the synergy benefits from the Transactions in the expected time frame;
•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;
•changes in the credit market conditions, credit rating downgrades or an inability to access debt markets;
•restrictive covenants including the agreements governing our indebtedness and other financings;
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•the risk of future material weaknesses we may identify 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;
•unfavorable outcomes of and increased costs from existing or future regulatory or legal proceedings;
•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;
•our wireless licenses, including those controlled through leasing agreements, are subject to renewal and may be revoked;
•our exclusive forum provision as provided in our Fifth Amended and Restated Certificate of Incorporation (the “Certificate of Incorporation”);
•interests of DT, our controlling stockholder, which 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; and
•our 2022 Stock Repurchase Program (as defined in Note 10 – Repurchases of Common Stock of the Notes to the Condensed Consolidated Financial Statements) may not be fully consummated, and our share repurchase program may not enhance long-term stockholder value.

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.

Investors and others should note that we announce material information to our investors using our investor relations website (https://investor.t-mobile.com), newsroom website (https://t-mobile.com/news), press releases, SEC filings and public conference calls and webcasts. We intend to also use certain social media accounts as means of disclosing information about us and our services and for complying with our disclosure obligations under Regulation FD (the @TMobileIR Twitter account (https://twitter.com/TMobileIR), 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 provided as a supplement to, and should be read together with, our unaudited condensed consolidated financial statements as of and for the three and six months ended June 30, 2023, 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, 2022. 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.

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Sprint Merger, Network Integration and Decommissioning 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, migrate customers to the T-Mobile network and billing systems and the impact of legal matters assumed as part of the Merger;
•Restructuring costs, including severance, store rationalization and network decommissioning; and
•Transaction costs, including legal and professional services related to the completion of the transactions.

Restructuring costs are disclosed below under “Restructuring” and in Note 14 – Restructuring Costs 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. Net cash payments for Merger-related costs, including payments related to our restructuring plan, are included in Net cash provided by operating activities on our Condensed Consolidated Statements of Cash Flows.

Merger-related costs are presented below:
(in millions) Three Months Ended
June 30,		 Change Six Months Ended
June 30,		 Change
2023 2022 $ % 2023 2022 $ %
Merger-related costs
Cost of services, exclusive of depreciation and amortization $ 178  $ 961  $ (783) (81) % $ 386  $ 1,568  $ (1,182) (75) %
Cost of equipment sales, exclusive of depreciation and amortization —  459  (459) (100) % (9) 1,210  (1,219) (101) %
Selling, general and administrative 98  248  (150) (60) % 257  303  (46) (15) %
Total Merger-related costs $ 276  $ 1,668  $ (1,392) (83) % $ 634  $ 3,081  $ (2,447) (79) %
Net cash payments for Merger-related costs $ 728  $ 907  $ (179) (20) % $ 1,212  $ 1,800  $ (588) (33) %

We expect to incur substantially all of the remaining projected Merger-related costs of approximately $400 million, excluding capital expenditures, by the end of 2023, with the cash expenditure for the Merger-related costs extending beyond 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.

Restructuring

Upon the close of the Merger in April 2020, we began implementing restructuring initiatives to realize cost efficiencies from the Merger. The major activities associated with the Merger 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 Merger synergies in network costs.

For more information regarding our Merger restructuring activities, see Note 14 – Restructuring Costs of the Notes to the Condensed Consolidated Financial Statements.
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Anticipated Merger Synergies

As a result of our ongoing restructuring and integration activities, we have realized Merger synergies by eliminating redundancies within our combined network as well as other business processes and operations (see “Restructuring” above). For full-year 2023, we expect Merger synergies from Selling, general and administrative expense reductions of approximately $2.7 billion, Cost of service expense reductions of approximately $3.2 billion and avoided network expenses of approximately $1.6 billion.

Wireline

On September 6, 2022, we entered into the Wireline Sale Agreement to sell the Wireline Business for a total purchase price of $1 and the payments totaling $700 million under the IP transit services agreement. On May 1, 2023, pursuant to the Wireline Sale Agreement, upon the terms and subject to the conditions thereof, we completed the Wireline Transaction.

For more information regarding the Wireline Sale Agreement, see Note 11 – Wireline of the Notes to the Condensed Consolidated Financial Statements.

Acquisition of Ka’ena Corporation

On March 9, 2023, we entered into a Merger and Unit Purchase Agreement for the acquisition of 100% of the outstanding equity of Ka’ena Corporation and its subsidiaries including, among others, Mint Mobile LLC, for a maximum purchase price of $1.35 billion to be paid out 39% in cash and 61% in shares of T-Mobile common stock. The purchase price is variable dependent upon specified performance indicators of Ka’ena Corporation during certain periods before and after closing and consists of an upfront payment at closing of the transaction, subject to certain agreed-upon adjustments, and a variable earnout payable 24 months after closing of the transaction. The upfront payment is estimated to be approximately $950 million, before working capital adjustments. The acquisition is subject to certain customary closing conditions, including certain regulatory approvals, and is expected to close by the end of 2023.

Ka’ena Corporation is currently one of our wholesale partners, offering wireless telecommunications services to customers leveraging our network. Upon closing of the transactions, we expect to recognize customers of Ka’ena Corporation as prepaid customers and expect to see an increase in Prepaid revenues, partially offset by a decrease in Wholesale revenues.

Recent Cyberattacks

In August 2021, we were subject to a criminal cyberattack involving unauthorized access to T-Mobile’s systems. As a result of the attack, we are subject to numerous arbitration demands and lawsuits, including class action lawsuits, and regulatory inquiries as described in Note 13 – Commitments and Contingencies of the Notes to the Condensed Consolidated Financial Statements.

During the six months ended June 30, 2023, we recognized $50 million in reimbursements from insurance carriers for costs incurred related to the August 2021 cyberattack. We are pursuing additional reimbursements from insurance carriers for costs incurred related to the August 2021 cyberattack.

In January 2023, we disclosed that a bad actor was obtaining data through a single Application Programming Interface (“API”) without authorization. Based on our investigation, the impacted API is only able to provide a limited set of customer account data, including name, billing address, email, phone number, date of birth, T-Mobile account number and information such as the number of lines on the account and plan features. The result from our investigation indicates that the bad actor(s) obtained data from this API for approximately 37 million current postpaid and prepaid customer accounts, though many of these accounts did not include the full data set. We believe that the bad actor first retrieved data through the impacted API starting on or around November 25, 2022. We have notified individuals whose information was impacted consistent with state and federal requirements.

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

In response to the recent cyberattacks and increasing cybersecurity threats, we have significantly increased our focus on enhancing our cybersecurity practices with a substantial multi-year investment. In the second quarter of 2023, we have hired new security leadership, and implemented significant technology improvements to our cybersecurity controls.
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Those improvements include additional authentication measures and internal systems limitations and restrictions. In addition, we have enhanced our cybersecurity awareness program, including rolling out new training for all employees. While we have made progress to date, we plan to continue to make substantial investments to strengthen our cybersecurity program in future periods.
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Results of Operations

Set forth below is a summary of our consolidated financial results:
Three Months Ended
June 30,		 Change Six Months Ended
June 30,		 Change
(in millions) 2023 2022 $ % 2023 2022 $ %
Revenues
Postpaid revenues $ 12,070  $ 11,445  $ 625  5  % $ 23,932  $ 22,646  $ 1,286  6  %
Prepaid revenues 2,444  2,469  (25) (1) % 4,861  4,924  (63) (1) %
Wholesale and other service revenues 1,224  1,402  (178) (13) % 2,491  2,874  (383) (13) %
Total service revenues 15,738  15,316  422  3  % 31,284  30,444  840  3  %
Equipment revenues 3,169  4,130  (961) (23) % 6,888  8,824  (1,936) (22) %
Other revenues 289  255  34  13  % 656  553  103  19  %
Total revenues 19,196  19,701  (505) (3) % 38,828  39,821  (993) (2) %
Operating expenses
Cost of services, exclusive of depreciation and amortization shown separately below 2,916  4,060  (1,144) (28) % 5,977  7,787  (1,810) (23) %
Cost of equipment sales, exclusive of depreciation and amortization shown separately below 4,088  5,108  (1,020) (20) % 8,676  11,054  (2,378) (22) %
Selling, general and administrative 5,272  5,856  (584) (10) % 10,697  10,912  (215) (2) %
Impairment expense —  477  (477) (100) % —  477  (477) (100) %
Loss (gain) on disposal group held for sale 17  —  17  NM (25) —  (25) NM
Depreciation and amortization 3,110  3,491  (381) (11) % 6,313  7,076  (763) (11) %
Total operating expenses 15,403  18,992  (3,589) (19) % 31,638  37,306  (5,668) (15) %
Operating income 3,793  709  3,084  435  % 7,190  2,515  4,675  186  %
Other expense, net
Interest expense, net (861) (851) (10) 1  % (1,696) (1,715) 19  (1) %
Other income (expense), net 6  (21) 27  (129) % 15  (32) 47  (147) %
Total other expense, net (855) (872) 17  (2) % (1,681) (1,747) 66  (4) %
Income (loss) before income taxes 2,938  (163) 3,101  NM 5,509  768  4,741  617  %
Income tax (expense) benefit (717) 55  (772) NM (1,348) (163) (1,185) 727  %
Net income (loss) $ 2,221  $ (108) $ 2,329  NM $ 4,161  $ 605  $ 3,556  588  %
Statement of Cash Flows Data
Net cash provided by operating activities $ 4,355  $ 4,209  $ 146  3  % $ 8,406  $ 8,054  $ 352  4  %
Net cash used in investing activities (1,487) (2,559) 1,072  (42) % (3,215) (7,651) 4,436  (58) %
Net cash used in financing activities (784) (1,744) 960  (55) % (3,057) (3,880) 823  (21) %
Non-GAAP Financial Measures
Adjusted EBITDA $ 7,405  $ 7,004  $ 401  6  % $ 14,604  $ 13,954  $ 650  5  %
Core Adjusted EBITDA 7,336  6,618  718  11  % 14,388  13,081  1,307  10  %
Adjusted Free Cash Flow 2,877  1,758 1,119 64  % 5,278  3,407  1,871  55  %
NM - Not Meaningful
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The following discussion and analysis is for the three and six months ended June 30, 2023, compared to the same period in 2022 unless otherwise stated.

Total revenues decreased $505 million, or 3%, for the three months ended and decreased $993 million, or 2%, for the six months ended June 30, 2023. The components of these changes are discussed below.

Postpaid revenues increased $625 million, or 5%, for the three months ended and increased $1.3 billion, or 6%, for the six months ended June 30, 2023, primarily from:

•Higher average postpaid accounts; and
•Higher postpaid ARPA. See “Postpaid ARPA” in the “Performance Measures” section of this MD&A.

Prepaid revenues decreased slightly for the three and six months ended June 30, 2023, primarily from:

•Lower prepaid ARPU. See “Prepaid ARPU” in the “Performance Measures” section of this MD&A; partially offset by
•Higher average prepaid customers.

Wholesale and other service revenues decreased $178 million, or 13%, for the three months ended and decreased $383 million, or 13%, for the six months ended June 30, 2023, primarily from:

•Lower MVNO revenues; and
•Lower Wireline revenues due to the sale of the Wireline Business on May 1, 2023. See Note 11 – Wireline of the Notes to the Condensed Consolidated Financial Statements for additional information.

Equipment revenues decreased $961 million, or 23%, for the three months ended and decreased $1.9 billion, or 22%, for the six months ended June 30, 2023.

The decrease for the three months ended June 30, 2023, was primarily from:

•A decrease of $429 million in device sales revenue, excluding purchased leased devices, primarily from:
•A decrease in the number of devices sold, primarily driven by higher postpaid upgrades in the prior year period related to facilitating the migration of Sprint customers to the T-Mobile network, as well as longer device lifecycles, and lower prepaid sales; partially offset by
•Higher average revenue per device sold, primarily driven by higher promotions in the prior year period, which included promotions for Sprint customers to facilitate the migration to the T-Mobile network; and
•A decrease of $317 million in lease revenues and a decrease of $46 million in customer purchases of leased devices primarily due to a lower number of customer devices under lease as a result of the continued strategic shift in device financing from leasing to EIP.

The decrease for the six months ended June 30, 2023, was primarily from:

•A decrease of $814 million in device sales revenue, excluding purchased leased devices, primarily from:
•A decrease in the number of devices sold, primarily driven by higher postpaid upgrades in the prior year period related to facilitating the migration of Sprint customers to the T-Mobile network, as well as longer device lifecycles, and lower prepaid sales; partially offset by
•Higher average revenue per device sold, primarily driven by higher promotions in the prior year period, which included promotions for Sprint customers to facilitate the migration to the T-Mobile network, partially offset by a decrease in the high-end phone mix; and
•A decrease of $657 million in lease revenues and a decrease of $133 million in customer purchases of leased devices primarily due to a lower number of customer devices under lease as a result of the continued strategic shift in device financing from leasing to EIP.

Other revenues increased $34 million, or 13%, for the three months ended and increased $103 million, or 19%, for the six months ended June 30, 2023.

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The increase for the three months ended June 30, 2023, was primarily from higher interest income driven by higher imputed interest rates on EIP, which is recognized over the device financing term.

The increase for the six months ended June 30, 2023, was primarily from:

•Higher interest income driven by higher imputed interest rates on EIP, which is recognized over the device financing term; and
•Higher revenue from our device recovery program.

Total operating expenses decreased $3.6 billion, or 19%, for the three months ended and decreased $5.7 billion, or 15%, for the six months ended June 30, 2023. The components of this change are discussed below.

Cost of services, exclusive of depreciation and amortization, decreased $1.1 billion, or 28%, for the three months ended and decreased $1.8 billion, or 23%, for the six months ended June 30, 2023.

The decrease for the three months ended June 30, 2023, was primarily from:

•A decrease of $783 million in Merger-related costs related to network decommissioning and integration as the majority of our decommissioning efforts were completed in 2022;
•Higher realized Merger synergies; and
•Lower costs due to the sale of the Wireline Business on May 1, 2023. See Note 11 - Wireline of the Notes to the Condensed Consolidated Financial Statements for additional information; partially offset by
•Higher site costs related to the continued build-out of our nationwide 5G network.

The decrease for the six months ended June 30, 2023, was primarily from:

•A decrease of $1.2 billion in Merger-related costs related to network decommissioning and integration as the majority of our decommissioning efforts were completed in 2022;
•Higher realized Merger synergies; and
•Lower costs due to the sale of the Wireline Business on May 1, 2023. See Note 11 - Wireline of the Notes to the Condensed Consolidated Financial Statements for additional information; partially offset by
•Higher site costs related to the continued build-out of our nationwide 5G network.

Cost of equipment sales, exclusive of depreciation and amortization, decreased $1.0 billion, or 20%, for the three months ended and decreased $2.4 billion, or 22%, for the six months ended June 30, 2023.

The decrease for the three months ended June 30, 2023, was primarily from:

•A decrease of $917 million in device cost of equipment sales, excluding purchased leased devices, primarily from:
•A decrease in the number of devices sold, primarily driven by higher postpaid upgrades in the prior year period related to facilitating the migration of Sprint customers to the T-Mobile network, as well as longer device lifecycles, and lower prepaid sales.
•Cost of equipment sales for the three months ended June 30, 2022, included $459 million of Merger-related costs, compared to no Merger-related costs for the three months ended June 30, 2023.

The decrease for the six months ended June 30, 2023, was primarily from:

•A decrease of $2.1 billion in device cost of equipment sales, excluding purchased leased devices, primarily from:
•A decrease in the number of devices sold, primarily driven by higher postpaid upgrades in the prior year period related to facilitating the migration of Sprint customers to the T-Mobile network, as well as longer device lifecycles, and lower prepaid sales; and
•Lower average cost per device sold driven by a decrease in the high-end phone mix.
•Cost of equipment sales for the six months ended June 30, 2023, included $9 million of Merger-related recoveries, compared to $1.2 billion of Merger-related costs for the six months ended June 30, 2022.

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Selling, general and administrative expenses decreased $584 million, or 10%, for the three months ended and decreased $215 million, or 2%, for the six months ended June 30, 2023.

The decrease for the three months ended June 30, 2023, was primarily from:

•Lower legal-related expenses, primarily driven by the settlement of certain litigation associated with the August 2021 cyberattack of $400 million during the three months ended June 30, 2022;
•Lower Merger-related costs and higher realized Merger synergies;
•Lower severance and restructuring expenses; and
•Lower bad debt expense; partially offset by
•Higher advertising expense; and
•Higher commission amortization expense.
•Selling, general and administrative expenses for the three months ended June 30, 2023, included $98 million of Merger-related costs, which were net of legal settlement gains of $65 million, compared to $248 million of Merger-related costs for the three months ended June 30, 2022.

The decrease for the six months ended June 30, 2023, was primarily from:

•Lower legal-related expenses, primarily driven by the settlement of certain litigation associated with the August 2021 cyberattack of $400 million during the six months ended June 30, 2022; and
•Lower bad debt expense; partially offset by
•Higher commission amortization expense; and
•Higher advertising expense.
•Selling, general and administrative expenses for the six months ended June 30, 2023, included $257 million of Merger-related costs, which were net of legal settlement gains of $65 million, compared to $303 million of Merger-related costs for the six months ended June 30, 2022, which were net of legal settlement gains of $220 million.

Impairment expense was $477 million for the three and six months ended June 30, 2022, due to the non-cash impairment of certain Wireline Property and equipment, Operating lease right-of-use assets and Other intangible assets. There was no impairment expense for the three and six months ended June 30, 2023.

Loss (gain) on disposal group held for sale was a loss of $17 million for the three months ended June 30, 2023, and a gain of $25 million for the six months ended June 30, 2023. See Note 11 - Wireline of the Notes to the Condensed Consolidated Financial Statements for additional information. There was no gain or loss on disposal group held for sale for the three and six months ended June 30, 2022.

Depreciation and amortization decreased $381 million, or 11%, for the three months ended and decreased $763 million, or 11%, for the six months ended June 30, 2023.

The decrease for the three and six months ended June 30, 2023, was primarily 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, including assets impacted by the decommissioning of the legacy Sprint CDMA and LTE networks in 2022; partially offset by
•Higher depreciation expense, excluding leased devices, from the continued build-out of our nationwide 5G network.

Operating income, the components of which are discussed above, increased $3.1 billion, or 435%, for the three months ended and increased $4.7 billion, or 186%, for the six months ended June 30, 2023.

Interest expense, net was relatively flat and was impacted by the following:

•Higher interest expense, primarily due to higher average debt outstanding and a higher average effective interest rate; offset by
•Higher interest income, primarily due to higher average interest rates on short-term cash equivalents.
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Other income (expense), net was insignificant for all periods.

Income (loss) before income taxes, the components of which are discussed above, was income of $2.9 billion and a loss of $163 million for the three months ended June 30, 2023 and 2022, respectively, and was income of $5.5 billion and $768 million for the six months ended June 30, 2023 and 2022, respectively.

Income tax expense increased $772 million for the three months ended and increased $1.2 billion for the six months ended June 30, 2023, primarily from higher income before income taxes.

Our effective tax rate was 24.4% and 33.6% for the three months ended June 30, 2023 and 2022, respectively, and 24.5% and 21.2% for the six months ended June 30, 2023 and 2022, respectively.

Net income (loss), the components of which are discussed above, was income of $2.2 billion and a loss of $108 million for the three months ended June 30, 2023 and 2022, respectively, and was income of $4.2 billion and $605 million for the six months ended June 30, 2023 and 2022, respectively. Net income (loss) included:

•Merger-related costs, net of tax, of $207 million and $475 million for the three and six months ended June 30, 2023, respectively, compared to $1.3 billion and $2.3 billion for the three and six months ended June 30, 2022, respectively.
•Impairment expense of $358 million for the three and six months ended June 30, 2022, compared to no impairment expense for the three and six months ended June 30, 2023.
•Legal-related expenses, net, including the impact of the settlement of certain litigation associated with the August 2021 cyberattack, of $300 million for the three and six months ended June 30, 2022, compared to Legal-related recoveries, net, of $32 million for the six months ended June 30, 2023.

Guarantor Financial Information

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

The guarantees of the Guarantor Subsidiaries are subject to release in limited circumstances only upon the occurrence of certain customary conditions. Generally, the guarantees of the Guarantor Subsidiaries with respect to the Senior Notes issued by T-Mobile USA, Inc. (other than $3.5 billion in principal amount of Senior Notes issued in 2017 and 2018) and the credit agreement entered into by T-Mobile USA, Inc. will be automatically and unconditionally released if, immediately following such release and any concurrent releases of other guarantees, the aggregate principal amount of indebtedness of non-guarantor subsidiaries (other than certain specified subsidiaries) would not exceed $2.0 billion. The indentures, supplemental indentures and credit agreements governing the long-term debt contain covenants that, among other things, limit the ability of the Issuers or borrowers and the Guarantor Subsidiaries to incur more debt, create liens or other encumbrances, and merge, consolidate or sell, or otherwise dispose of, substantially all of their assets.

Basis of Presentation

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

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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) June 30, 2023 December 31, 2022
Current assets $ 18,819  $ 17,661 
Noncurrent assets 179,853  181,673 
Current liabilities 22,838  23,146 
Noncurrent liabilities 125,003  120,385 
Due to non-guarantors 10,140  9,325 
Due to related parties 1,556  1,571 

The summarized results of operations information for the consolidated obligor group of debt issued by T-Mobile USA, Inc. is presented in the table below:
(in millions) Six Months Ended
June 30, 2023		 Year Ended
December 31, 2022
Total revenues $ 37,487  $ 77,054 
Operating income 5,356  2,985 
Net income (loss) 2,359  (572)
Revenue from non-guarantors 1,168  2,427 
Operating expenses to non-guarantors 1,334  2,659 
Other expense to non-guarantors (335) (327)

The summarized balance sheet information for the consolidated obligor group of debt issued by Sprint is presented in the table below:
(in millions) June 30, 2023 December 31, 2022
Current assets $ 17,767  $ 9,319 
Noncurrent assets 11,475  11,271 
Current liabilities 16,226  15,854 
Noncurrent liabilities 105,069  65,118 
Due to non-guarantors 39,146  3,930 
Due to related parties 1,556  1,571 

The summarized results of operations information for the consolidated obligor group of debt issued by Sprint is presented in the table below:
(in millions) Six Months Ended
June 30, 2023		 Year Ended
December 31, 2022
Total revenues $ 8  $ 7 
Operating loss (1,542) (3,479)
Net (loss) income (1)
 (3,409) 2,471 
Other (expense) income, net, (to) from non-guarantors (933) 525 
(1)     Net income for the year ended December 31, 2022, includes tax benefits recognized associated with internal restructuring.

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) June 30, 2023 December 31, 2022
Current assets $ 17,767  $ 9,320 
Noncurrent assets 11,475  16,337 
Current liabilities 16,298  15,926 
Noncurrent liabilities 101,295  66,516 
Due to non-guarantors 30,113  — 
Due from non-guarantors —  5,066 
Due to related parties 1,556  1,571 

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The summarized results of operations information for the consolidated obligor group of debt issued by Sprint Capital Corporation is presented in the table below:
(in millions) Six Months Ended
June 30, 2023		 Year Ended
December 31, 2022
Total revenues $ 8  $ 7 
Operating loss (1,542) (3,479)
Net (loss) income (1)
 (3,305) 2,604 
Other (expense) income, net, (to) from non-guarantors (676) 941 
(1)     Net income for the year ended December 31, 2022, includes tax benefits recognized associated with internal restructuring.

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.

Postpaid Accounts

A postpaid account is generally defined as a billing account number that generates revenue. Postpaid accounts generally consist of customers that are qualified for postpaid service utilizing phones, High Speed Internet, mobile internet devices, including tablets and hotspots, wearables, DIGITS or other connected devices, including SyncUP and IoT, where they generally pay after receiving service.

The following table sets forth the number of ending postpaid accounts:
As of June 30, Change
(in thousands) 2023 2022 # %
Postpaid accounts (1)
 29,112  27,818  1,294  5  %
(1)     Customers impacted by the decommissioning of the legacy Sprint CDMA and LTE and T-Mobile UMTS networks have been excluded from our postpaid account base resulting in the removal of 57,000 postpaid accounts in the first quarter of 2022 and 69,000 postpaid accounts in the second quarter of 2022.

Postpaid Net Account Additions

The following table sets forth the number of postpaid net account additions:
Three Months Ended
June 30,		 Change Six Months Ended
June 30,		 Change
(in thousands) 2023 2022 # % 2023 2022 # %
Postpaid net account additions 299  380  (81) (21) % 586  728  (142) (20) %

Postpaid net account additions decreased 81,000, or 21%, for the three months ended and decreased 142,000, or 20%, for the six months ended June 30, 2023, primarily from:

•Continued moderation of industry growth; and
•Fewer High Speed Internet only net account additions.

Customers

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

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The following table sets forth the number of ending customers:
As of June 30, Change
(in thousands) 2023 2022 # %
Customers, end of period
Postpaid phone customers (1)
 74,132  71,053  3,079  4  %
Postpaid other customers (1)
 20,954  17,734  3,220  18  %
Total postpaid customers 95,086  88,787  6,299  7  %
Prepaid customers (1)
 21,516  21,236  280  1  %
Total customers 116,602  110,023  6,579  6  %
Adjustments to customers (1)
 —  (1,878) 1,878  (100) %
(1)     The total base adjustment in the second quarter of 2022 was a reduction of 1,320,000 total customers. Customers impacted by the decommissioning of the legacy Sprint CDMA and LTE and T-Mobile UMTS networks have been excluded from our customer base resulting in the removal of 212,000 postpaid phone customers and 349,000 postpaid other customers in the first quarter of 2022 and 284,000 postpaid phone customers, 946,000 postpaid other customers and 28,000 prepaid customers in the second quarter of 2022. In connection with our acquisition of companies, we included a base adjustment in the first quarter of 2022 to increase postpaid phone customers by 17,000 and reduce postpaid other customers by 14,000. Certain customers now serviced through reseller contracts were removed from our reported postpaid customer base resulting in the removal of 42,000 postpaid phone customers and 20,000 postpaid other customers in the second quarter of 2022.

High Speed Internet customers included in Postpaid other customers were 3,302,000 and 1,472,000 as of June 30, 2023 and 2022, respectively. High Speed Internet customers included in Prepaid customers were 376,000 and 72,000 as of June 30, 2023 and 2022, respectively.

Net Customer Additions

The following table sets forth the number of net customer additions:
Three Months Ended
June 30,		 Change Six Months Ended
June 30,		 Change
(in thousands) 2023 2022 # % 2023 2022 # %
Net customer additions
Postpaid phone customers 760  723  37  5  % 1,298  1,312  (14) (1) %
Postpaid other customers 801  933  (132) (14) % 1,556  1,662  (106) (6) %
Total postpaid customers 1,561  1,656  (95) (6) % 2,854  2,974  (120) (4) %
Prepaid customers 124  146  (22) (15) % 150  208  (58) (28) %
Total customers 1,685  1,802  (117) (6) % 3,004  3,182  (178) (6) %
Adjustments to customers —  (1,320) 1,320  (100) % —  (1,878) 1,878  (100) %

Total net customer additions decreased 117,000, or 6%, for the three months ended and decreased 178,000, or 6%, for the six months ended June 30, 2023.

The decrease for the three months ended June 30, 2023, was primarily from:

•Lower postpaid other net customer additions, primarily due to
•Lower net additions from mobile internet devices; and
•Lower High Speed Internet net customer additions, primarily due to increased deactivations from a growing customer base, mostly offset by continued growth in gross additions driven by increasing customer demand; and
•Lower prepaid net customer additions, primarily due to continued moderation of industry growth and continued industry migration of prepaid to postpaid; partially offset by
•Higher postpaid phone net customer additions, primarily due to higher gross additions and lower churn.
•High Speed Internet net customer additions included in postpaid other net customer additions were 447,000 and 497,000 for the three months ended June 30, 2023 and 2022, respectively. High Speed Internet net customer additions included in prepaid net customer additions were 62,000 and 63,000 for the three months ended June 30, 2023 and 2022, respectively.
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The decrease for the six months ended June 30, 2023, was primarily from:

•Lower postpaid other net customer additions, primarily due to
•Lower net additions from mobile internet devices; partially offset by
•Higher High Speed Internet net customer additions, primarily due to continued growth in gross additions driven by increasing customer demand, partially offset by increased deactivations from a growing customer base; and
•Lower prepaid net customer additions, primarily due to continued moderation of industry growth and continued industry migration of prepaid to postpaid, partially offset by growth in High Speed Internet.
•High Speed Internet net customer additions included in postpaid other net customer additions were 892,000 and 826,000 for the six months ended June 30, 2023 and 2022, respectively. High Speed Internet net customer additions included in prepaid net customer additions were 140,000 and 72,000 for the six months ended June 30, 2023 and 2022, respectively.

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 had their service restored within a certain period of time and excludes customers who received service for less than a certain minimum period of time. We believe that churn provides management, investors and analysts with useful information to evaluate customer retention and loyalty.

The following table sets forth the churn:
Three Months Ended
June 30,		 Change Six Months Ended
June 30,		 Change
2023 2022 2023 2022
Postpaid phone churn 0.77  % 0.80  % -3 bps 0.83  % 0.86  % -3 bps
Prepaid churn 2.62  % 2.58  % 4 bps 2.69  % 2.62  % 7 bps

Postpaid phone churn decreased 3 basis points for the three months ended and decreased 3 basis points for the six months ended June 30, 2023, primarily from improved customer retention driven by a differentiated value proposition and network experience.

Prepaid churn increased 4 basis points for the three months ended and increased 7 basis points for the six months ended June 30, 2023, primarily from continued industry migration of prepaid to postpaid.

Postpaid Average Revenue Per Account

Postpaid Average Revenue per Account (“ARPA”) represents the average monthly postpaid service revenue earned per account. Postpaid ARPA is calculated as Postpaid revenues for the specified period divided by the average number of postpaid accounts during the period, further divided by the number of months in the period. We believe postpaid ARPA provides management, investors and analysts with useful information to assess and evaluate our postpaid service revenue realization and 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, mobile internet devices, including tablets and hotspots, wearables, DIGITS or other connected devices, including SyncUP and IoT.

The following table sets forth our operating measure ARPA:
(in dollars) Three Months Ended
June 30,		 Change Six Months Ended
June 30,		 Change
2023 2022 $ % 2023 2022 $ %
Postpaid ARPA $ 138.94  $ 137.92  $ 1.02  1  % $ 138.49  $ 137.23  $ 1.26  1  %

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Postpaid ARPA increased $1.02, or 1%, for the three months ended and increased $1.26, or 1%, for the six months ended June 30, 2023.

The increase for the three months ended June 30, 2023, was primarily from:

•An increase in customers per account, including continued adoption of High Speed Internet; and
•Higher premium services, primarily high-end rate plans; partially offset by
•Increased promotional activity;
•An increase in High Speed Internet only accounts; and
•Growth in rate plans for specific customer cohorts, such as Business, Military and First Responder.

The increase for the six months ended June 30, 2023, was primarily from:

•Higher premium services, primarily high-end rate plans; and
•An increase in customers per account, including continued adoption of High Speed Internet; partially offset by
•Increased promotional activity;
•An increase in High Speed Internet only accounts; and
•Growth in rate plans for specific customer cohorts, such as Business, Military and First Responder.

Average Revenue Per User

Average Revenue per User (“ARPU”) represents the average monthly service revenue earned per customer. ARPU is calculated as service revenues for the specified period divided by the average number of customers during the period, further divided by the number of months in the period. We believe ARPU provides management, investors and analysts with useful information to assess and evaluate our service revenue per customer and assist in forecasting our future service revenues generated from our customer base. Postpaid phone ARPU excludes postpaid other customers and related revenues, which include High Speed Internet, mobile internet devices, including tablets and hotspots, wearables, DIGITS and other connected devices, including SyncUP and IoT.

The following table sets forth our operating measure ARPU:
(in dollars) Three Months Ended
June 30,		 Change Six Months Ended
June 30,		 Change
2023 2022 $ % 2023 2022 $ %
Postpaid phone ARPU $ 48.84  $ 48.96  $ (0.12) —  % $ 48.73  $ 48.69  $ 0.04  —  %
Prepaid ARPU 37.98  38.71  (0.73) (2) % 37.98  38.95  (0.97) (2) %

Postpaid Phone ARPU

Postpaid phone ARPU was relatively flat for the three and six months ended June 30, 2023.

The slight decrease for the three months ended June 30, 2023, was primarily from:

•Increased promotional activity; and
•Growth in rate plans for specific customer cohorts, such as Business, Military and First Responder; mostly offset by
•Higher premium services, primarily high-end rate plans.

The slight increase for the six months ended June 30, 2023, was primarily from:

•Higher premium services, primarily high-end rate plans; mostly offset by
•Increased promotional activity; and
•Growth in rate plans for specific customer cohorts, such as Business, Military and First Responder.
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Prepaid ARPU

Prepaid ARPU decreased $0.73, or 2%, for the three months ended and decreased $0.97, or 2%, for the six months ended June 30, 2023, primarily from:

•Dilution from promotional rate plan mix; partially offset by
•Higher non-recurring charges.

Adjusted EBITDA and Core Adjusted EBITDA

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

Adjusted EBITDA, Adjusted EBITDA margin, Core Adjusted EBITDA and Core Adjusted EBITDA margin are non-GAAP financial measures utilized by our management to monitor the financial performance of our operations. We historically used Adjusted EBITDA and we currently use Core Adjusted EBITDA internally as a measure to evaluate and compensate our personnel and management for their performance. We use Adjusted EBITDA and Core Adjusted EBITDA as benchmarks to evaluate our operating performance in comparison to our competitors. Management believes analysts and investors use Adjusted EBITDA and Core Adjusted EBITDA as supplemental measures to evaluate overall operating performance and to facilitate comparisons with other wireless communications services companies because they are indicative of our ongoing operating performance and trends by excluding the impact of interest expense from financing, non-cash depreciation and amortization from capital investments, stock-based compensation, Merger-related costs, including network decommissioning costs, impairment expense, gain on disposal groups held for sale and certain legal-related recoveries and expenses, as well as other special income and expenses which are not reflective of our core business activities. Management believes analysts and investors use Core Adjusted EBITDA because it normalizes for the transition in the Company’s device financing strategy, by excluding the impact of device lease revenues from Adjusted EBITDA, to align with the exclusion of the related depreciation expense on leased devices from Adjusted EBITDA. Adjusted EBITDA, Adjusted EBITDA margin, Core Adjusted EBITDA and Core Adjusted EBITDA margin have limitations as analytical tools and should not be considered in isolation or as substitutes for income from operations, net income or any other measure of financial performance reported in accordance with GAAP.

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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 (loss), which we consider to be the most directly comparable GAAP financial measure:
Three Months Ended
June 30,		 Change Six Months Ended
June 30,		 Change
(in millions, except percentages) 2023 2022 $ % 2023 2022 $ %
Net income (loss) $ 2,221  $ (108) $ 2,329  NM $ 4,161  $ 605  $ 3,556  588  %
Adjustments:
Interest expense, net 861  851  10  1  % 1,696  1,715  (19) (1) %
Other (income) expense, net (6) 21  (27) (129) % (15) 32  (47) (147) %
Income tax expense (benefit) 717  (55) 772  NM 1,348  163  1,185  727  %
Operating income 3,793  709  3,084  435  % 7,190  2,515  4,675  186  %
Depreciation and amortization 3,110  3,491  (381) (11) % 6,313  7,076  (763) (11) %
Stock-based compensation (1)
 155  149  6  4  % 328  285  43  15  %
Merger-related costs 276  1,668  (1,392) (83) % 634  3,081  (2,447) (79) %
Impairment expense —  477  (477) (100) % —  477  (477) (100) %
Legal-related expenses (recoveries), net (2)
 —  400  (400) (100) % (43) 400  (443) (111) %
Loss (gain) on disposal group held for sale 17  —  17  NM (25) —  (25) NM
Other, net (3)
 54  110  (56) (51) % 207  120  87  73  %
Adjusted EBITDA 7,405  7,004  401  6  % 14,604  13,954  650  5  %
Lease revenues (69) (386) 317  (82) % (216) (873) 657  (75) %
Core Adjusted EBITDA
 $ 7,336  $ 6,618  $ 718  11  % $ 14,388  $ 13,081  $ 1,307  10  %
Net income (loss) margin (Net income (loss) divided by Service revenues) 14  % (1) % 1,500 bps 13  % 2  % 1,100 bps
Adjusted EBITDA margin (Adjusted EBITDA divided by Service revenues) 47  % 46  % 100 bps 47  % 46  % 100 bps
Core Adjusted EBITDA margin (Core Adjusted EBITDA divided by Service revenues)
 47  % 43  % 400 bps 46  % 43  % 300 bps
(1)Stock-based compensation includes payroll tax impacts and may not agree with stock-based compensation expense on the condensed consolidated financial statements. Additionally, certain stock-based compensation expenses associated with the Transactions have been included in Merger-related costs.
(2)Legal-related expenses (recoveries), net, consists of the settlement of certain litigation associated with the August 2021 cyberattack and is presented net of insurance recoveries.
(3)Other, net, primarily consists of certain severance, restructuring and other expenses and income not directly attributable to the Merger which are not reflective of T-Mobile’s core business activities (“special items”), and are, therefore, excluded from Adjusted EBITDA and Core Adjusted EBITDA.
NM - Not meaningful

Core Adjusted EBITDA increased $718 million, or 11%, for the three months ended and increased $1.3 billion, or 10%, for the six months ended June 30, 2023. The components comprising Core Adjusted EBITDA are discussed further above.

The increase for the three months ended June 30, 2023, was primarily from:

•Lower Cost of equipment sales, excluding Merger-related costs;
•Higher Total service revenues; and
•Lower Cost of services, excluding Merger-related costs; partially offset by
•Lower Equipment revenues, excluding lease revenues.

The increase for the six months ended June 30, 2023, was primarily from:

•Lower Cost of equipment sales, excluding Merger-related costs;
•Higher Total service revenues; and
•Lower Cost of services, excluding Merger-related costs; partially offset by
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•Lower Equipment revenues, excluding lease revenues; and
•Higher Selling, general and administrative expenses, excluding Merger-related costs, Legal-related expenses and other special items.

Adjusted EBITDA increased $401 million, or 6%, for the three months ended and increased $650 million, or 5%, for the six months ended June 30, 2023, primarily due to the fluctuations in Core Adjusted EBITDA, discussed above, partially offset by lower lease revenues, which decreased $317 million for the three months ended and decreased $657 million for the six months ended June 30, 2023.

Liquidity and Capital Resources

Our principal sources of liquidity are our cash and cash equivalents and cash generated from operations, proceeds from issuance of debt, financing leases, the sale of certain receivables, the Revolving Credit Facility (as defined below) and, beginning in July 2023, an unsecured short-term commercial paper program. Further, the incurrence of additional indebtedness may inhibit our ability to incur new debt in the future to finance our business strategy under the terms governing our existing and future indebtedness.

Cash Flows

The following is a condensed schedule of our cash flows:
Three Months Ended
June 30,		 Change Six Months Ended
June 30,		 Change
(in millions) 2023 2022 $ % 2023 2022 $ %
Net cash provided by operating activities $ 4,355  $ 4,209  $ 146  3  % $ 8,406  $ 8,054  $ 352  4  %
Net cash used in investing activities (1,487) (2,559) 1,072  (42) % (3,215) (7,651) 4,436  (58) %
Net cash used in financing activities (784) (1,744) 960  (55) % (3,057) (3,880) 823  (21) %

Operating Activities

Net cash provided by operating activities increased $146 million, or 3%, for the three months ended and increased $352 million, or 4%, for the six months ended June 30, 2023.

The increase for the three months ended June 30, 2023, was primarily from:

•A $2.1 billion increase in Net income, adjusted for non-cash income and expense; partially offset by
•A $1.9 billion increase in net cash outflows from changes in working capital, primarily due to higher use of cash from Accounts payable and accrued liabilities, Operating lease right-of-use assets, Other current and long-term liabilities, Short- and long-term operating lease liabilities and Inventory, partially offset by lower use of cash from Other current and long-term assets and Equipment installment plan receivables.
•Net cash provided by operating activities includes the impact of $728 million and $907 million in net payments for Merger-related costs for the three months ended June 30, 2023 and 2022, respectively.

The increase for the six months ended June 30, 2023, was primarily from:

•A $3.3 billion increase in Net income, adjusted for non-cash income and expense; partially offset by
•A $3.0 billion increase in net cash outflows from changes in working capital, primarily due to higher use of cash from Accounts payable and accrued liabilities, Operating lease right-of-use assets, Other current and long-term liabilities, Short- and long-term operating lease liabilities and Accounts receivable, partially offset by lower use of cash from Equipment installment plan receivables, Other current and long-term assets and Inventory.
•Net cash provided by operating activities includes the impact of $1.2 billion and $1.8 billion in net payments for Merger-related costs for the six months ended June 30, 2023 and 2022, respectively.

Investing Activities

Net cash used in investing activities decreased $1.1 billion, or 42%, for the three months ended and decreased $4.4 billion, or 58%, for the six months ended June 30, 2023.
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The use of cash for the three months ended June 30, 2023, was primarily from:

•$2.8 billion in Purchases of property and equipment, including capitalized interest, from the accelerated build-out of our nationwide 5G network; partially offset by
•$1.3 billion in Proceeds related to beneficial interests in securitization transactions.

The use of cash for the six months ended June 30, 2023, was primarily from:

•$5.8 billion in Purchases of property and equipment, including capitalized interest, from the accelerated build-out of our nationwide 5G network; partially offset by
•$2.7 billion in Proceeds related to beneficial interests in securitization transactions.

Financing Activities

Net cash used in financing activities decreased $960 million, or 55%, for the three months ended and decreased $823 million, or 21%, for the six months ended June 30, 2023.

The use of cash for the three months ended June 30, 2023, was primarily from:

•$3.6 billion in Repurchases of common stock;
•$304 million in Repayments of financing lease obligations; and
•$223 million in Repayments of long-term debt; partially offset by
•$3.5 billion in Proceeds from issuance of long-term debt.

The use of cash for the six months ended June 30, 2023, was primarily from:

•$8.2 billion in Repurchases of common stock;
•$610 million in Repayments of financing lease obligations;
•$354 million in Repayments of long-term debt; and
•$257 million in Tax withholdings on share-based awards; partially offset by
•$6.5 billion in Proceeds from issuance of long-term debt.

Cash and Cash Equivalents

As of June 30, 2023, our Cash and cash equivalents were $6.6 billion compared to $4.5 billion at December 31, 2022.

Adjusted Free Cash Flow

Adjusted Free Cash Flow represents Net cash provided by operating activities less cash payments for Purchases of property and equipment, including Proceeds from sales of tower sites and Proceeds related to beneficial interests in securitization transactions and less Cash payments for debt prepayment or debt extinguishment costs. Adjusted Free Cash Flow is a non-GAAP financial measure utilized by management, investors and analysts of our financial information to evaluate cash available to pay debt, repurchase shares and provide further investment in the business. Starting in the first quarter of 2023, we renamed Free Cash Flow to Adjusted Free Cash Flow. This change in name did not result in any change to the definition or calculation of this non-GAAP financial measure. Adjusted Free Cash Flow margin is calculated as Adjusted Free Cash Flow divided by Service Revenues. Adjusted Free Cash Flow Margin is utilized by management, investors, and analysts to evaluate the company’s ability to convert service revenue efficiently into cash available to pay debt, repurchase shares and provide further investment in the business.

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The table below provides a reconciliation of Adjusted Free Cash Flow to Net cash provided by operating activities, which we consider to be the most directly comparable GAAP financial measure:
Three Months Ended
June 30,		 Change Six Months Ended
June 30,		 Change
(in millions, except percentages) 2023 2022 $ % 2023 2022 $ %
Net cash provided by operating activities $ 4,355  $ 4,209  $ 146  3  % $ 8,406  $ 8,054  $ 352  4  %
Cash purchases of property and equipment, including capitalized interest (2,789) (3,572) 783  (22) % (5,790) (6,953) 1,163  (17) %
Proceeds from sales of tower sites 2  —  2  NM 8  —  8  NM
Proceeds related to beneficial interests in securitization transactions 1,309  1,121  188  17  % 2,654  2,306  348  15  %
Adjusted Free Cash Flow $ 2,877  $ 1,758  $ 1,119  64  % $ 5,278  $ 3,407  $ 1,871  55  %
Net cash provided by operating activities margin (Net cash provided by operating activities divided by Service revenues) 28  % 27  % 100 bps 27  % 26  % 100 bps
Adjusted Free Cash Flow margin (Adjusted Free Cash Flow divided by Service revenues) 18  % 11  % 700 bps 17  % 11  % 600 bps
NM - Not Meaningful

Adjusted Free Cash Flow increased $1.1 billion, or 64%, for the three months ended and increased $1.9 billion, or 55%, for the six months ended June 30, 2023.

The increase for the three months ended June 30, 2023, was primarily impacted by the following:

•Lower Cash purchases of property and equipment, including capitalized interest, driven by increased capital efficiencies from accelerated investments in our nationwide 5G network in 2022;
•Higher Proceeds related to beneficial interests in securitization transactions, which were offset in Net cash provided by operating activities; and
•Higher Net cash provided by operating activities, as described above.
•Adjusted Free Cash Flow includes the impact of $728 million and $907 million in net payments for Merger-related costs for the three months ended June 30, 2023 and 2022, respectively.

The increase for the six months ended June 30, 2023, was primarily impacted by the following:

•Lower Cash purchases of property and equipment, including capitalized interest, driven by increased capital efficiencies from accelerated investments in our nationwide 5G network in 2022;
•Higher Net cash provided by operating activities, as described above; and
•Higher Proceeds related to beneficial interests in securitization transactions, which were offset in Net cash provided by operating activities.
•Adjusted Free Cash Flow includes the impact of $1.2 billion and $1.8 billion in net payments for Merger-related costs for the six months ended June 30, 2023 and 2022, respectively.

During the six months ended June 30, 2023 and 2022, there were no significant net cash proceeds from securitization.

Borrowing Capacity

We maintain a revolving credit facility (the “Revolving Credit Facility”) with an aggregate commitment amount of $7.5 billion. As of June 30, 2023, there was no outstanding balance under the Revolving Credit Facility.

Subsequent to June 30, 2023, on July 25, 2023, we established an unsecured short-term commercial paper program with the ability to borrow up to $2.0 billion from time to time. This program will supplement our other available external financing arrangements and proceeds are expected to be used for general corporate purposes. As of July 27, 2023, we have not issued any amount under this program.

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Debt Financing

As of June 30, 2023, our total debt and financing lease liabilities were $80.3 billion, excluding our tower obligations, of which $70.1 billion was classified as long-term debt and $1.3 billion was classified as long-term financing lease liabilities.

During the six months ended June 30, 2023, we issued long-term debt for net proceeds of $6.5 billion and repaid short-term debt with an aggregate principal amount of $354 million.

For more information regarding our debt financing transactions, see Note 7 - Debt of the Notes to the Condensed Consolidated Financial Statements.

License Purchase Agreements

On August 8, 2022, we entered into License Purchase Agreements to acquire spectrum in the 600 MHz band from Channel 51 License Co LLC and LB License Co, LLC in exchange for total cash consideration of $3.5 billion. On March 30, 2023, we and the Sellers entered into Amended and Restated License Purchase Agreements pursuant to which we and the Sellers agreed to bifurcate the transaction into two tranches of licenses, with the closings on the acquisitions of certain licenses in Chicago, Dallas and New Orleans (together representing $492 million of the aggregate $3.5 billion cash consideration) being deferred in order to potentially expedite the regulatory approval process for the remainder of the licenses. We anticipate that the first closing will occur in late 2023 and that the second closing (on the deferred licenses) will occur in 2024.

The parties have agreed that each of the closings will occur within 180 days after the receipt of the applicable required regulatory approvals, and payment of each portion of the aggregate $3.5 billion purchase price will occur no later than 40 days after the date of each respective closing.

For more information regarding our License Purchase Agreements, see Note 5 – Spectrum License Transactions of the Notes to the Condensed Consolidated Financial Statements.

Acquisition of Ka’ena Corporation

On March 9, 2023, we entered into a Merger and Unit Purchase Agreement for the acquisition of 100% of the outstanding equity of Ka’ena Corporation and its subsidiaries including, among others, Mint Mobile LLC for a maximum purchase price of $1.35 billion to be paid out 39% in cash and 61% in shares of T-Mobile common stock. The purchase price is variable dependent upon specified performance indicators of Ka’ena Corporation during certain periods before and after closing and consists of an upfront payment at closing of the transaction, subject to certain agreed-upon adjustments, and a variable earnout payable 24 months after closing of the transaction. The upfront payment is estimated to be approximately $950 million, before working capital adjustments. The acquisition is subject to certain customary closing conditions, including certain regulatory approvals, and is expected to close by the end of 2023.

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 June 30, 2023, we derecognized net receivables of $2.4 billion upon sale through these arrangements. 

For more information regarding these off-balance sheet arrangements, see Note 4 – 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 debt, to continue to opportunistically acquire spectrum licenses or other long-lived assets in private party transactions, repurchase shares, or for the refinancing of existing long-term debt on an opportunistic basis. Excluding liquidity that could be needed for acquisitions of businesses, spectrum and other long-lived assets or for any potential stockholder returns, we expect our principal sources of funding to be sufficient to meet our anticipated liquidity needs for business operations for the next 12 months as well as our longer-term liquidity needs. Our intended use of any such funds is for general corporate purposes, including for capital expenditures, spectrum purchases, opportunistic investments and acquisitions, redemption of debt, tower obligations, share repurchases and the execution of our integration plan.

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We determine future liquidity requirements for operations, capital expenditures and share repurchases based in large part upon projected financial and operating performance, and opportunities to acquire additional spectrum or repurchase shares. We regularly review and update these projections for changes in current and projected financial and operating results, general economic conditions, the competitive landscape and other factors. We have incurred, and will incur, substantial expenses to comply with the Government Commitments, and we are also expected to incur substantially all of the remaining projected Merger-related costs of approximately $400 million, excluding capital expenditures, by the end of 2023, with the cash expenditure for the Merger-related costs extending beyond 2023. 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. There are a number of additional risks and uncertainties that could cause our financial and operating results and capital requirements to differ materially from our projections, which could cause future liquidity to differ materially from our assessment.

The indentures, supplemental indentures and credit agreements governing our long-term debt to affiliates and third parties, excluding financing leases, contain covenants that, among other things, limit the ability of the Issuers or borrowers and the Guarantor Subsidiaries to incur more debt, create liens or other encumbrances, and merge, consolidate or sell, or otherwise dispose of, substantially all of their assets. We were in compliance with all restrictive debt covenants as of June 30, 2023.

Financing Lease Facilities

We have uncommitted financing lease facilities with certain third parties that provide us with the ability to enter into financing leases for network equipment and services. As of June 30, 2023, we have entered into $8.1 billion of financing leases under these financing lease facilities, of which $314 million and $552 million was executed during the three and six months ended June 30, 2023, respectively. We expect to enter into up to a total of $1.2 billion in financing lease commitments during the year ending December 31, 2023.

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 and customer base of T-Mobile and Sprint. Property and equipment capital expenditures primarily relate to the integration of our network and spectrum licenses, including acquired Sprint PCS and 2.5 GHz spectrum licenses, as we build out our nationwide 5G network. We expect a reduction in capital expenditures related to these efforts in 2023 compared to 2022. Future capital expenditure requirements will include the deployment of our recently acquired C-band and 3.45 GHz spectrum licenses.

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

Stockholder Returns

We have never declared or paid any cash dividends on our common stock. However, we continue to evaluate alternatives for returning value to stockholders, and we could elect to declare dividends in the future.

On September 8, 2022, our Board of Directors authorized our 2022 Stock Repurchase Program for up to $14.0 billion of our common stock through September 30, 2023. During the three and six months ended June 30, 2023, we repurchased shares of our common stock for a total purchase price of $3.5 billion and $8.3 billion, respectively, all of which were purchased under the 2022 Stock Repurchase Program. As of June 30, 2023, we had up to $2.7 billion remaining under the 2022 Stock Repurchase Program.

Subsequent to June 30, 2023, from July 1, 2023, through July 21, 2023, we repurchased additional shares of our common stock for a total purchase price of $552 million. As of July 21, 2023, we had up to $2.2 billion remaining under the 2022 Stock Repurchase Program.

For additional information regarding the 2022 Stock Repurchase Program, see Note 10 – Repurchases of Common Stock of the Notes to the Condensed Consolidated Financial Statements.

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Related Party Transactions

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

As of July 21, 2023, DT held, directly or indirectly, approximately 51.4% of the outstanding T-Mobile common stock, with the remaining approximately 48.6% of the outstanding T-Mobile common stock held by SoftBank and 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 July 21, 2023, over approximately 55.2% of the outstanding T-Mobile common stock.

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

Section 219 of the Iran Threat Reduction and the Syria Human Rights Act of 2012 added Section 13(r) to the Exchange Act. Section 13(r) requires an issuer to disclose in its annual or quarterly reports, as applicable, whether it or any of its affiliates knowingly engaged in certain activities, transactions or dealings relating to Iran or with designated natural persons or entities involved in terrorism or the proliferation of weapons of mass destruction. Disclosure is required even where the activities, transactions or dealings are conducted outside the U.S. by non-U.S. affiliates in compliance with applicable law, and whether or not the activities are sanctionable under U.S. law.

As of the date of this report, we are not aware of any activity, transaction or dealing by us or any of our affiliates for the three months ended June 30, 2023, 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: Telecommunication Kish Company, Mobile Telecommunication Company of Iran, and Telecommunication Infrastructure Company of Iran. In addition, during the three months ended June 30, 2023, DT, through certain of its non-U.S. subsidiaries, provided basic telecommunications services to five customers in Germany identified on the Specially Designated Nationals and Blocked Persons List maintained by the U.S. Department of Treasury’s Office of Foreign Assets Control: Bank Melli, Europäisch-Iranische Handelsbank, CPG Engineering & Commercial Services GmbH, Golgohar Trade and Technology GmbH and International Trade and Industrial Technology ITRITEC GmbH. With respect to the first four of these customers, the services have been terminated or are in the process of being terminated. DT is currently evaluating the relationship its non-U.S. subsidiary has with International Trade and Technology ITRITEC GmbH. For the three months ended June 30, 2023, gross revenues of all DT affiliates generated by roaming and interconnection traffic and telecommunications services with the Iranian parties identified herein were less than $0.1 million, and the estimated net profits were less than $0.1 million.

In addition, DT, through certain of its non-U.S. subsidiaries that operate a fixed-line network in their respective European home countries (in particular Germany), provides telecommunications services in the ordinary course of business to the Embassy of Iran in those European countries. Gross revenues and net profits recorded from these activities for the three months ended June 30, 2023, 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 June 30, 2023, 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 June 30, 2023, 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 June 30, 2023, were both under $0.1 million. We understand that the SoftBank subsidiary intends to continue such activities.

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Critical Accounting Estimates

Preparation of our condensed consolidated financial statements in accordance with 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, 2022, 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 risk as previously disclosed in Part II, Item 7A of our Annual Report on Form 10-K for the year ended December 31, 2022.

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 31.1 and 31.2 to this Form 10-Q.

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.

PART II. OTHER INFORMATION

Item 1. Legal Proceedings

For more information regarding the legal proceedings in which we are involved, see Note 13 – Commitments and Contingencies of the Notes to the Condensed Consolidated Financial Statements.

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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, 2022.

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 whose products and services we rely on in operating our business.

Our business involves the receipt, storage, and transmission of 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”). Additionally, to offer services to our customers and operate our business, we utilize a number of products and services, such as IT networks and systems, including those we own and operate as well as others provided by third-party providers, such as cloud services (collectively, “Systems”).

We are subject to persistent cyberattacks and threats to our business from a variety of bad actors, many of whom attempt to gain unauthorized access to and compromise Confidential Information and Systems. In some cases, the bad actors exploit bugs, errors, misconfigurations or other vulnerabilities in our Systems to obtain Confidential Information. In other cases, these bad actors may obtain unauthorized access to Confidential Information utilizing credentials taken from our customers, employees, or third-party providers through credential harvesting, social engineering or other means. Other bad actors aim to cause serious operational disruptions to our business and Systems through ransomware or distributed denial of services attacks.

Cyberattacks against companies like ours have increased in frequency and potential harm over time, and the 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 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 behest of foreign governments.

In addition, we routinely rely upon third-party providers whose products and services are used in our business. These third-party providers have experienced in the past, and will continue to experience in the future, cyberattacks that involve attempts to obtain unauthorized access to our Confidential Information and/or to create operational disruptions that could 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 “Recent Cyberattacks” in the Overview section of our Management’s Discussion and Analysis of Financial Condition and Results of Operations. 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 13 – Commitments and Contingencies of the Notes to the Consolidated Financial Statements.

In January 2023, we disclosed that a bad actor was obtaining data through a single Application Programming Interface (“API”) without authorization. Based on our investigation, the impacted API is only able to provide a limited set of customer account data, including name, billing address, email, phone number, date of birth, T-Mobile account number and information such as the number of lines on the account and plan features. The result from our investigation indicates that the bad actor(s) obtained data from this API for approximately 37 million current postpaid and prepaid customer accounts, though many of these accounts did not include the full data set. We believe that the bad actor first retrieved data through the impacted API starting on or around November 25, 2022. We have notified individuals whose information was impacted consistent with state and federal requirements.

As a result of the August 2021 cyberattack and the January 2023 cyberattack, we have incurred and may continue to incur significant costs or experience other material financial impacts, which may not be covered by, or may exceed the coverage limits of, our cyber liability insurance, and such costs and impacts may have a material adverse effect on our business, reputation, financial condition, cash flows and operating results.
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In addition to the recent cyberattacks, 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. Some of these incidents have occurred at third-party providers, including third parties who provide us with various Systems and others who sell our products and services through retail locations or take care of our customers.

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. We also expect that threat actors will continue to gain sophistication including in the use of tools and techniques (such as artificial intelligence) that are specifically designed to circumvent security controls, evade detection, and obfuscate forensic evidence, making it more challenging for us to identify, investigate and recover from future cyberattacks in a timely and effective manner. If we fail to protect Confidential Information or to prevent operational disruptions from future cyberattacks, there may be a material adverse effect on our business, reputation, financial condition, cash flows, and operating results.

Unfavorable outcomes of legal proceedings may adversely affect our business, reputation, financial condition, cash flows and operating results.

We and our affiliates are involved in various disputes, governmental and/or regulatory inspections, investigations and proceedings, mass arbitrations and litigation matters. Such legal proceedings can be complex, costly, and highly disruptive to our business operations by diverting the attention and energy of management and other key personnel.

In connection with the Transactions, we became subject to a number of legal proceedings, including a putative shareholder class action and derivative lawsuit and a putative antitrust class action. For more information, see “– Contingencies and Litigation – Litigation and Regulatory Matters” in Note 13 – Commitments and Contingencies of the Notes to the Consolidated Financial Statements. It is possible that stockholders of T-Mobile and/or Sprint may file additional putative class action lawsuits or shareholder derivative actions against the Company and the legacy T-Mobile board of directors and/or the legacy Sprint board of directors. Among other remedies, these stockholders could seek damages. The outcome of any litigation is uncertain, and any such potential lawsuits could result in substantial costs and may be costly and distracting to management.

Additionally, 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. Unfavorable resolution of these matters could require us to make additional reimbursements and pay additional fines and penalties.

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. We recorded an accrual for an estimated payment amount as of March 31, 2020, which is included in Accounts payable and accrued liabilities on our Consolidated Balance Sheets.

As a result of the August 2021 cyberattack, we are subject to numerous lawsuits, including consolidated class action lawsuits seeking unspecified monetary damages, mass consumer arbitrations, a shareholder derivative lawsuit and inquiries by various government agencies, law enforcement and other governmental authorities, and we may be subject to further regulatory inquiries and private litigation. We are cooperating fully with regulators and vigorously defending against the class actions and other lawsuits. On July 22, 2022, we entered into an agreement to settle the consolidated class action lawsuit. On June 29, 2023, the Court issued an order granting final approval of the settlement, which is subject to potential appeals.
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Under the terms of the settlement, we would pay an aggregate of $350 million to fund claims submitted by class members, the legal fees of plaintiffs’ counsel and the costs of administering the settlement. We would also commit to an aggregate incremental spend of $150 million for data security and related technology in 2022 and 2023. In connection with the class action settlement and other settlements of separate consumer claims that have been previously completed or are currently pending, we recorded a total pre-tax charge of approximately $400 million during the three months ended June 30, 2022. In light of the inherent uncertainties involved in such matters and based on the information currently available to us, we believe it is reasonably possible that we could incur additional losses associated with these proceedings and inquiries, and we will continue to evaluate information as it becomes known and will record an estimate for losses at the time or times when it is both probable that a loss has been incurred and the amount of the loss is reasonably estimable. In addition, in connection with the January 2023 cyberattack, we have received notices of consumer class actions and regulatory inquires, to which we will continue to respond in due course. Ongoing legal and other costs related to these proceedings and inquiries, as well as any potential future proceedings and inquiries related to the August 2021 cyberattack and the January 2023 cyberattack, may be substantial, and losses associated with any adverse judgments, settlements, penalties or other resolutions of such proceedings and inquiries could be significant and have a material adverse impact on our business, reputation, financial condition, cash flows and operating results.

We, along with equipment manufacturers and other carriers, are subject to current and potential future lawsuits alleging adverse health effects arising from the use of wireless handsets or from wireless transmission equipment such as cell towers. In addition, the FCC has from time to time gathered data regarding wireless device emissions, and its assessment of the risks associated with using wireless devices may evolve based on its findings. Any of these allegations or changes in risk assessments could result in customers purchasing fewer devices and wireless services, could result in significant legal and regulatory liability, and could have a material adverse effect on our business, reputation, financial condition, cash flows and operating results.

The assessment of the outcome of legal proceedings, including our potential liability, if any, is a highly subjective process that requires judgments about future events that are not within our control. The amounts ultimately received or paid upon settlement or pursuant to final judgment, order or decree may differ materially from amounts accrued in our financial statements. In addition, litigation or similar proceedings could impose restraints on our current or future manner of doing business. Such potential outcomes including judgments, awards, settlements or orders could 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

Issuer Purchases of Equity Securities

The table below provides information regarding our share repurchases during the three months ended June 30, 2023:
(in millions, except share and per share amounts) Total Number of Shares Purchased Average Price Paid per Share Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs
Approximate Dollar Value of Shares that may yet be Purchased Under the Plans or Programs (1)
April 1, 2023 - April 30, 2023 7,238,721  $ 147.62  7,238,721  $ 5,166 
May 1, 2023 - May 31, 2023 10,318,210  140.53  10,318,210  3,716 
June 1, 2023 - June 30, 2023 7,626,907  132.06  7,626,907  2,709 
Total 25,183,838  25,183,838 
(1)    On September 8, 2022, our Board of Directors authorized our 2022 Stock Repurchase Program for up to $14.0 billion of our common stock through September 30, 2023. The amounts presented represent the remaining shares authorized for purchase under the 2022 Stock Repurchase Program as of the end of the period.

On May 3, 2023, the SEC adopted amendments to modernize share repurchase disclosure requirements, including requiring issuers to disclose daily share repurchase activity in an exhibit to their Form 10-Q and Form 10-K. We will be required to comply with the amendments beginning with our first filing that covers the first full fiscal quarter that begins on October 1, 2023. We plan to apply the applicable amendments, including the discontinuation of the monthly share repurchase activity in this Item and replacing with daily share repurchase activity as an exhibit to our Form 10-Qs and Form 10-Ks, beginning in our Form 10-K for the year ending December 31, 2023.

See Note 10 - Repurchases of Common Stock of the Notes to the Condensed Consolidated Financial Statements for more information about our 2022 Stock Repurchase Program.

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Item 3. Defaults Upon Senior Securities

None.

Item 4. Mine Safety Disclosures

Not applicable.

Item 5. Other Information

During the quarter ended June 30, 2023, none of the Company’s directors or officers adopted, modified, or terminated any “Rule 10b5-1 trading arrangement” or “non-Rule 10b5-1 trading arrangement,” as each term is defined in Item 408 of Regulation S-K.

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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 8-K 5/11/2023 4.3
4.2 8-K 5/11/2023 4.4
4.3 8-K 5/11/2023 4.5
10.1* X
10.2* X
10.3* X
10.4* X
10.5* DEF 14A 4/28/2023 Annex A
10.6* DEF 14A 4/28/2023 Annex B
22.1 X
31.1 X
31.2 X
32.1** X
32.2** X
101.INS XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document.
101.SCH XBRL Taxonomy Extension Schema Document. X
101.CAL XBRL Taxonomy Extension Calculation Linkbase Document. X
101.DEF XBRL Taxonomy Extension Definition Linkbase Document. X
101.LAB XBRL Taxonomy Extension Label Linkbase Document. X
101.PRE XBRL Taxonomy Extension Presentation Linkbase. X
104 Cover Page Interactive Data File (the cover page XBRL tags)

*
Indicates a management contract or compensatory plan or 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.
July 27, 2023 /s/ Peter Osvaldik
Peter Osvaldik
Executive Vice President and Chief Financial Officer
(Principal Financial Officer and Authorized Signatory)

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EX-10.1 2 tmus06302023ex101.htm TMUS EXHIBIT 10.1 Document
EXHIBIT 10.1
T-MOBILE US, INC.
2023 INCENTIVE AWARD PLAN

RESTRICTED STOCK UNIT GRANT NOTICE
(TIME-VESTING)
T-Mobile US, Inc., a Delaware corporation (the “Company”), has granted to the participant listed below (“Participant”) the Restricted Stock Units (the “RSUs”) described in this Restricted Stock Unit Grant Notice (this “Grant Notice”), subject to the terms and conditions of the T-Mobile US, Inc. 2023 Incentive Award Plan (as amended from time to time, the “Plan”) and the Restricted Stock Unit Agreement attached hereto as Exhibit A (the “Agreement”), both of which are incorporated into this Grant Notice by reference. Capitalized terms not specifically defined in this Grant Notice or the Agreement have the meanings given to them in the Plan.
Participant: [____]
Grant Date: [____]
Number of RSUs: [____]
Vesting Schedule:
(a)[One-third (1/3rd)] of the RSUs granted hereby shall vest on each of the first [three (3)] anniversaries of the Grant Date (each, a “Vesting Date”), subject to Participant’s continued status as a Service Provider through the applicable Vesting Date.
(b)Notwithstanding the foregoing:
(i)If Participant incurs a Termination of Service due to Participant’s death or Disability, any then-unvested RSUs shall vest upon such Termination of Service.
(ii)If Participant incurs a Termination of Service as a result of a Workforce Reduction or Divestiture, any then-unvested RSUs otherwise scheduled to become vested upon the next scheduled Vesting Date shall vest upon such Termination of Service; provided, however, that Participant will not be eligible to receive any vesting of the RSUs under this subsection (b)(ii) unless Participant executes and, if applicable, does not revoke all documents required under the applicable Company severance program or otherwise, including without limitation any required release of claims, within the applicable time frames set forth in such documents or as prescribed by the Company (which, in either case, shall be no later than sixty (60) days following the date of such Termination of Service). In the event Participant fails to execute all required documents in a timely fashion, then if any RSUs have vested or been paid to Participant after the Termination of Service but before Participant’s failure to execute all required documents, Participant covenants and agrees that Participant will have no right, title or interest in such amount vested or paid and that Participant will cause such amount to be returned immediately to the Company upon notice. [For Mr. Sievert only, clause (ii) is replaced in its entirety with the following: Without Cause or For Good Reason. If Participant incurs a Termination of Service (other than as provided in subsection (b)(iii) below) either (1) by the Company or its Affiliates for any reason other than Cause (including due to non-renewal of Participant’s Amended and Restated Employment Agreement with the Company dated March 9, 2023, as amended from time to time, or any successor agreement (the “Employment Agreement”) by notice given by the Company, but excluding due to Participant’s death or Disability) or (2) by Participant for Good Reason, then, in either case, subject to and conditioned upon Participant’s timely execution and non-revocation of the Release (as defined in the Employment Agreement) that becomes fully effective within the time frame set forth in the Employment Agreement, any then-unvested RSUs shall vest on the Release Effective Date (as defined in the Employment Agreement) (and, for clarity, such unvested RSUs shall remain outstanding and eligible to vest on the Release Effective Date).]



(iii)Subject to the provisions of Article VIII of the Plan, if (A) a Change in Control is consummated and (B) upon the consummation of the Change in Control or at any time during the one (1)-year period thereafter, Participant incurs a Termination of Service (1) by the Company or its Affiliates for any reason other than Cause ([For Mr. Sievert only: including due to non-renewal of the Employment Agreement by notice given by the Company, but] excluding due to Participant’s death or Disability) or (2) by Participant for Good Reason, then, in either case, any then-unvested RSUs shall vest as of such Termination of Service.
Definitions:     For purposes of this Grant Notice and the Agreement, the following terms shall have the following meanings:
(i)“Divestiture” means a Termination of Service as the result of a divestiture or sale of a business unit as determined by Participant’s employer based on the personnel records of the Company and its Affiliates. [For Mr. Sievert only, this definition is omitted in its entirety.]
(ii)“Workforce Reduction” means Participant’s Termination of Service as a result of a reduction in force, realignment or similar measure as determined by Participant’s employer and (i) Participant is officially notified in writing of such Termination of Service due to a workforce reduction and eligibility for the Company’s severance program under which Participant is covered, or (ii) if not covered by a Company severance program, Participant is notified in writing by an authorized officer of the Company or any Affiliates that the Termination of Service is as a result of such action. [For Mr. Sievert only, this definition is omitted in its entirety.]
Participant must accept this Agreement electronically pursuant to the online acceptance procedure established by the Company within ninety (90) days after the Agreement is presented to Participant for review. If Participant fails to accept the RSUs within such ninety (90)-day period, the Company may, in its sole discretion, rescind the RSUs in their entirety. By accepting (whether in writing, electronically or otherwise) the RSUs, Participant agrees to be bound by the terms of this Grant Notice, the Plan and the Agreement. Participant has reviewed the Plan, this Grant Notice and the Agreement in their entirety, has had an opportunity to obtain the advice of counsel prior to executing this Grant Notice and fully understands all provisions of the Plan, this Grant Notice and the Agreement. Participant hereby agrees to accept as binding, conclusive and final all decisions or interpretations of the Administrator upon any questions arising under the Plan, this Grant Notice or the Agreement.

2




T-MOBILE US, INC. PARTICIPANT
By:
Name: [Participant Name]
Title:


3




RESTRICTED STOCK UNIT AGREEMENT
Capitalized terms not specifically defined in this Restricted Stock Unit Agreement (this “Agreement”) have the meanings specified in the Grant Notice or, if not defined in the Grant Notice, in the Plan.
ARTICLE I.
    GENERAL
1.1Award of RSUs. The Company has granted the RSUs to Participant effective as of the Grant Date set forth in the Grant Notice (the “Grant Date”). Each RSU represents the right to receive one Share, as set forth in this Agreement. Participant will have no right to the distribution of any Shares until the time (if ever) the RSUs have vested.
1.2Incorporation of Terms of Plan. The RSUs are subject to the terms and conditions set forth in this Agreement and the Plan, which is incorporated herein by reference. In the event of any inconsistency between the Plan and this Agreement, the terms of the Plan will control, unless it is expressly specified in this Agreement or the Grant Notice that the specific provision of the Plan will not apply. For clarity, the foregoing sentence shall not limit the applicability of any additive language contained in this Agreement which provides supplemental or additional terms not inconsistent with the Plan.
1.3Unsecured Promise. The RSUs will at all times prior to settlement represent an unsecured Company obligation payable only from the Company’s general assets.
ARTICLE II.
VESTING; FORFEITURE AND SETTLEMENT
2.1Vesting; Forfeiture. The RSUs will vest according to the vesting schedule in the Grant Notice except that any fraction of an RSU that would otherwise be vested will be accumulated and will vest only when a whole RSU has accumulated. Except as otherwise set forth in the Grant Notice, the Plan or this Agreement, and unless the Administrator otherwise determines, in the event of Participant’s Termination of Service for any reason, all unvested RSUs will immediately and automatically be cancelled and forfeited (after taking into consideration any accelerated vesting which may occur in connection with such Termination of Service, if any) and Participant shall have no further right to or interest in such cancelled and forfeited RSUs.
2.2Settlement.
(a)RSUs that vest will be paid in Shares as soon as administratively practicable after the vesting of the applicable RSU, but in no event later than the earlier of (i) ninety (90) days following the date on which the applicable RSU vests or (ii) March 15th of the calendar year immediately following the calendar year in which the applicable RSU vests; provided, that if Participant elects to defer settlement of vested RSUs pursuant to Section 2.2(c), each vested RSU shall be settled in accordance with such deferral. [For Mr. Sievert only, replace with: RSUs that vest will be paid in Shares as soon as administratively practicable after the vesting of the applicable RSU, but in no event later the earlier of the earlier of (i) ninety (90) days following the date on which the applicable RSU vests or (ii) March 15th of the calendar year immediately following the calendar year in which the vesting date occurs (or, with respect to RSUs that become vested on the Release Effective Date in connection with a Termination of Service, within seventy-four (74) days following the date of such Termination of Service); provided, that if Participant elects to defer settlement of vested RSUs pursuant to Section 2.2(c), each vested RSU shall be settled in accordance with such deferral.] Notwithstanding the foregoing, if the vesting of an RSU is subject to execution of [the Release][a release of claims], and such [Release][release of claims] may be executed and/or revoked in a calendar year following the calendar year in which the payment event occurs, the payment shall be made in the second such calendar year to the extent necessary to comply with Section 409A.



(b)Notwithstanding the foregoing, the Company may delay any payment under this Agreement that the Company reasonably determines would violate Applicable Law or an applicable provision of the Plan until the earliest date the Company reasonably determines the making of the payment will not cause such a violation (in accordance with Treasury Regulation Section 1.409A-2(b)(7)(ii)); provided, that the Company reasonably believes the delay will not result in the imposition of excise taxes under Section 409A.
(c)Subject to Section 10.6 of the Plan, Participant may elect to defer delivery of the Shares payable upon vesting of the RSUs in accordance with the terms and conditions set forth in the Company’s Non-Qualified Deferred Compensation Plan (as amended and restated effective as of January 1, 2014 and as may be further amended from time to time), any successor plan or any other deferred compensation arrangement.
ARTICLE III.
TAXATION AND TAX WITHHOLDING
3.1Representation. Participant represents to the Company that Participant has reviewed with Participant’s own tax advisors the tax consequences of the RSUs and the transactions contemplated by the Grant Notice and this Agreement. Participant is relying solely on such advisors and not on any statements or representations of the Company or any of its Affiliates or their respective agents.
3.2Tax Withholding.
(a)Subject to Section 4.2(b) below and Section 9.5 of the Plan, the Company will have the authority and the right to deduct or withhold, or require Participant to remit to the Company, an amount sufficient to satisfy any all federal, state, local and foreign taxes required by Applicable Law to be withheld in connection with the vesting or settlement of the RSUs or any other taxable event related to the RSUs, including, without limitation, the authority to deduct such amounts from other compensation payable to Participant by the Company.
(b)Unless [the Company / the Administrator]1 otherwise determines, the Company shall withhold, or cause to be withheld, in satisfaction of any applicable withholding tax obligations and in accordance with Section 9.5 of the Plan, a number of Shares otherwise issuable upon settlement of the RSUs having a fair market value not exceeding the aggregate amount of such withholding tax liabilities based on the minimum individual statutory withholding rates in Participant’s applicable jurisdictions for federal, state, local and foreign income tax and payroll tax purposes that are applicable to such taxable income.
(c)    Participant acknowledges that Participant is ultimately liable and responsible for all taxes owed in connection with the RSUs, regardless of any action the Company or any Affiliate takes with respect to any tax withholding obligations that arise in connection with the RSUs. Neither the Company nor any Affiliate makes any representation or undertaking regarding the treatment of any tax withholding in connection with the grant, vesting or payment of the RSUs or the subsequent sale of Shares. The Company and its Affiliates do not commit and are under no obligation to structure the RSUs to reduce or eliminate Participant’s tax liability.
ARTICLE IV.
    COVENANTS
4.1Restrictive Covenants. Participant has previously entered into a Restrictive Covenant and Confidentiality Agreement (or similarly titled document) (the “Restrictive Covenant Agreement”). The vesting of the RSUs and Participant’s receipt of benefits hereunder is specifically conditioned on Participant’s continued compliance with the Restrictive Covenant Agreement except for the Covenant Not to Compete (as defined therein) in the Restrictive Covenant Agreement. To the extent allowed by and consistent with Applicable Law and any applicable limitations period, if the Company determines at any time that Participant has materially breached the Restrictive Covenant Agreement (excluding the
1 Note to Draft: Administrator for Section 16 persons; Company for others.
2




Covenant Not to Compete), then in addition to the remedies available under the Restrictive Covenant Agreement, the Company will be entitled to (i) cause any then-unvested RSUs to be immediately canceled without any payment of consideration therefor by the Company and (ii) recover from Participant in its sole discretion some or all of the Shares (or proceeds received by Participant from such Shares) paid to Participant upon settlement of the RSUs pursuant to this Agreement. Participant recognizes that if Participant materially breaches the Restrictive Covenant Agreement (excluding the Covenant Not to Compete), the losses to the Company and/or its Affiliates may amount to the full value of any Shares paid to Participant upon settlement of the RSUs pursuant to this Agreement.
4.2Covenant Not to Compete.2 Participant agrees that, during the term of Participant’s employment with the Company and its Affiliates (and their respective predecessors) and for a period of one year [For Sievert only: “one year” is replaced with “18 months”] immediately following the termination of such employment, Participant shall not either directly or indirectly, with or without compensation: (a) engage in, provide, offer to provide, or assist anyone in providing, services to or for a business, entity or individual that is substantially the same as or similar to the Company’s Business (as defined in the Restrictive Covenant Agreement) or that competes with the Company’s Business, directly or indirectly, in the geographic areas where the Company and/or its Affiliates provide services; or (b) compete with the Company, its Affiliates or its dealers within the geographic areas where such entities provide or are permitted to provide services. Participant understands that the noncompetition obligations in this paragraph shall not apply unless at the time this Agreement is executed, or at a later date, Participant’s annualized earnings meet or exceed the minimum amount required by the Revised Code of Washington 49.62. Participant agrees that the noncompetition obligation contained in this Section 5.2, if not enforceable at the time this Agreement is entered into, may nevertheless become enforceable in the future due to changes in Participant’s compensation.
ARTICLE V.
OTHER PROVISIONS
5.1Adjustments. Participant acknowledges that the RSUs and the Shares subject to the RSUs are subject to adjustment, modification and termination in certain events as provided in this Agreement and the Plan.
5.2Clawback. The RSUs and the Shares issuable hereunder shall be subject to any clawback or recoupment policy in effect on the Grant Date or as may be adopted or maintained by the Company following the Grant Date, including the Dodd-Frank Wall Street Reform and Consumer Protection Act and any rules or regulations promulgated thereunder.
5.3Notices. Any notice to be given under the terms of this Agreement to the Company must be in writing and addressed to the Company in care of the Company’s Head of Stock Compensation at the Company’s principal office or the Head of Stock Compensation’s then-current email address or facsimile number. Any notice to be given under the terms of this Agreement to Participant must be in writing and addressed to Participant (or, if Participant is then deceased, to the Designated Beneficiary) at Participant’s last known mailing address, email address or facsimile number in the Company’s personnel files. By a notice given pursuant to this Section, either party may designate a different address for notices to be given to that party. Any notice will be deemed duly given when actually received, when sent by email, when sent by certified mail (return receipt requested) and deposited with postage prepaid in a post office or branch post office regularly maintained by the United States Postal Service, when delivered by a nationally recognized express shipping company or upon receipt of a facsimile transmission confirmation.
5.4Arbitration. The Company and Participant shall make a good faith attempt to resolve any and all claims and disputes regarding the RSUs, the Grant Notice or this Agreement in accordance with any dispute resolution adopted by the Company before resorting to any other dispute resolution procedure. If the claim or dispute is not resolved in that manner and involves any rights or obligations under the Grant Notice and/or this Agreement, then the claim or dispute will be determined by arbitration in accordance with the then-current American Arbitration Association (“AAA”) national rules for the resolution of employment disputes by arbitration, except as modified herein. The arbitration will be
2 Note to Draft: To be updated pending final FTC rule.
3




conducted by a sole neutral arbitrator who has had both training and experience as an arbitrator of employee compensation matters. If the Company and Participant cannot agree on an arbitrator, then the arbitrator will be selected by the AAA applying the criteria in this Section 6.4. Reasonable discovery will be permitted and the arbitrator may decide any issue as to discovery. The arbitrator may decide any issue as to whether or as to the extent to which, any dispute is subject to the dispute resolution provisions of this Section 6.4. The arbitrator may award only relief at law contemplated under the Grant Notice, this Agreement and the Plan and the arbitrator may not award incidental, consequential or punitive damages, attorney’s fees or any form or equitable relief, to either party. The arbitrator must base the arbitration award on the provisions of this Section 6.4 and Applicable Law and must render the award in writing, including an explanation of the reasons for the award. Judgment upon the award may be entered by any court having jurisdiction of the matter, and the decision of the arbitrator will be final and binding. The statute of limitations applicable to the commencement of a lawsuit will apply to the commencement of an arbitration. The arbitrator’s fees will be paid in equal portions by the Company and Participant, unless the Company agrees to pay all such fees.
5.5Venue. Any arbitration, legal or equitable action or any proceeding arising directly, indirectly, or otherwise in connection with, out of, related to or from the Grant Notice or this Agreement, or any provision thereof or hereof, shall exclusively be filed and adjudicated in King County, Washington and no other venue.
5.6Conformity to Securities Laws. Participant acknowledges that the Plan, the Grant Notice and this Agreement are intended to conform to the extent necessary with all Applicable Laws and, to the extent Applicable Laws permit, will be deemed amended as necessary to conform to Applicable Laws.
5.7Successors and Assigns. The Company may assign any of its rights under this Agreement to single or multiple assignees, and this Agreement will inure to the benefit of the successors and assigns of the Company. Subject to the restrictions on transfer set forth in this Agreement or the Plan, this Agreement will be binding upon and inure to the benefit of the heirs, legatees, legal representatives, successors and assigns of the parties hereto.
5.8Limitations Applicable to Section 16 Persons. Notwithstanding any other provision of the Plan or this Agreement, if Participant is subject to Section 16 of the Exchange Act, the Plan, the Grant Notice, this Agreement and the RSUs will be subject to any additional limitations set forth in any applicable exemptive rule under Section 16 of the Exchange Act (including any amendment to Rule 16b-3) that are requirements for the application of such exemptive rule. To the extent Applicable Laws permit, this Agreement will be deemed amended as necessary to conform to such applicable exemptive rule.
5.9Entire Agreement; Amendment. The Plan, the Grant Notice and this Agreement (including any exhibit hereto) constitute the entire agreement of the parties and supersede in their entirety all prior undertakings and agreements of the Company and Participant with respect to the subject matter hereof. [For Sievert only, the following is added “, including without limitation, any provisions of the Employment Agreement that would otherwise apply to the RSUs.”] To the extent permitted by the Plan, the Grant Notice and this Agreement may be wholly or partially amended or otherwise modified, suspended or terminated at any time or from time to time by the Administrator or the Board; provided, however, that except as may otherwise be provided by the Plan, no amendment, modification, suspension or termination of this Agreement shall materially and adversely affect the RSUs or without the written consent of Participant.
5.10Severability. If any portion of the Grant Notice or this Agreement or any action taken under the Grant Notice or this Agreement, in any case is held illegal or invalid for any reason, the illegality or invalidity will not affect the remaining parts of the Grant Notice and/or this Agreement (as applicable), and the Grant Notice and/or this Agreement (as applicable) will be construed and enforced as if the illegal or invalid provisions had been excluded, and the illegal or invalid action will be null and void.
4




5.11Limitation on Participant’s Rights. Participation in the Plan confers no rights or interests other than as herein provided. This Agreement creates only a contractual obligation on the part of the Company as to amounts payable and may not be construed as creating a trust. Neither the Plan nor any underlying program, in and of itself, has any assets. Participant will have only the rights of a general unsecured creditor of the Company with respect to amounts credited and benefits payable, if any, with respect to the RSUs, and rights no greater than the right to receive cash or the Shares as a general unsecured creditor with respect to the RSUs, as and when settled pursuant to the terms of this Agreement.
5.12Not a Contract of Employment or Service. Nothing in the Plan, the Grant Notice or this Agreement confers upon Participant any right to continue in the employ or service of the Company or its Affiliate or interferes with or restricts in any way the rights of the Company and its Affiliates, which rights are hereby expressly reserved, to discharge or terminate the services of Participant at any time for any reason whatsoever, with or without Cause, except to the extent expressly provided otherwise in a written agreement between the Company or an Affiliate and Participant.
5.13Counterparts. The Grant Notice may be executed in one or more counterparts, including by way of any electronic signature, subject to Applicable Law, each of which will be deemed an original and all of which together will constitute one instrument.
5.14Governing Law. The Grant Notice and this Agreement will be governed by and interpreted in accordance with the laws of the State of Delaware, disregarding any state’s choice-of-law principles requiring the application of a jurisdiction’s laws other than the State of Delaware; provided, that the provisions of Article V of this Agreement shall be governed by and construed in accordance with the laws of the State of Washington for employees employed in the State of Washington [For Mr. Sievert only: “The Grant Notice and this Agreement will be governed by and interpreted in accordance with the laws of the State of Delaware, disregarding any state’s choice-of-law principles requiring the application of a jurisdiction’s laws other than the State of Delaware”].
5.15Section 409A.
(a)This Agreement shall be interpreted in accordance with the requirements of Section 409A.  Notwithstanding any provision of this Agreement, the Company may adopt such amendments to this Agreement or adopt other policies and procedures (including amendments, policies and procedures with retroactive effect), or take any other actions, that the Administrator determines are necessary or appropriate to avoid the imposition of taxes under Section 409A, provided, however, that this Section 6.15 shall not create an obligation on the part of the Company to adopt any such amendment, policy or procedure or take any such other action, nor shall the Company have any liability for failing to do so. To the extent that any payment window spans two calendar years, Participant shall have no discretion over or ability to control the actual year in which payment is made. 
(b)    Notwithstanding anything to the contrary in this Agreement, no amounts that constitute “non-qualified deferred compensation” (within the meaning of Section 409A) shall be paid to Participant under this Agreement during the six (6)-month period following Participant’s “separation from service” to the extent that the Administrator determines that Participant is a “specified employee” (each within the meaning of Section 409A) at the time of such separation from service and that paying such amounts at the time or times indicated in this Agreement would be a prohibited distribution under Section 409A(a)(2)(b)(i). If the payment of any such amounts is delayed as a result of the previous sentence, then on the first business day following the end of such six (6)-month period (or such earlier date upon which such amount can be paid under Section 409A without being subject to such additional taxes), the Company shall pay to Participant in a lump-sum all amounts that would have otherwise been payable to Participant during such six (6)-month period under this Agreement.

5.16Titles. Titles are provided herein for convenience only and are not to serve as a basis for interpretation or construction of this Agreement.
* * * * *


5



EX-10.2 3 tmus06302023ex102.htm TMUS EXHIBIT 10.2 Document
EXHIBIT 10.2
T-MOBILE US, INC.
2023 INCENTIVE AWARD PLAN

RESTRICTED STOCK UNIT GRANT NOTICE
(PERFORMANCE-VESTING; STOCK-SETTLED)
T-Mobile US, Inc., a Delaware corporation (the “Company”), has granted to the participant listed below (“Participant”) the Restricted Stock Units (the “RSUs”) described in this Restricted Stock Unit Grant Notice (this “Grant Notice”), subject to the terms and conditions of the T-Mobile US, Inc. 2023 Incentive Award Plan (as amended from time to time, the “Plan”) and the Restricted Stock Unit Agreement attached hereto as Exhibit A (the “Agreement”), both of which are incorporated into this Grant Notice by reference. Capitalized terms not specifically defined in this Grant Notice or the Agreement have the meanings given to them in the Plan.
Participant: [____]
Grant Date: [____]
Number of RSUs (at target): [____]
Vesting Schedule:
(a)     Subject to subsection (b) below, and further subject to and conditioned upon Participant’s continued status as a Service Provider through the Vesting Date, a number of RSUs equal to the Performance-Adjusted Units (as defined and determined in accordance with Exhibit B attached hereto) shall vest on the third (3rd) anniversary of the Grant Date (the “Vesting Date”).
(b)    Notwithstanding the foregoing:
(i)If Participant incurs a Termination of Service prior to the Vesting Date due to Participant’s death or Disability, any then-unvested RSUs shall vest (based on the target level of performance, as determined in accordance with Exhibit B attached hereto) upon such Termination of Service.



(ii)If Participant incurs a Termination of Service prior to the Vesting Date as a result of a Workforce Reduction or Divestiture, then (A) the number of Performance-Adjusted Units shall be determined (in accordance with Exhibit B attached hereto) as soon as administratively practicable following the last day of the Performance Period, and (B) a number of RSUs equal to the product of such Performance-Adjusted Units multiplied by the Pro Rata Fraction shall become earned and vested and (C) any remaining unearned RSUs shall be canceled and forfeited effective as of the last day of the Performance Period; provided, however, that Participant will not be eligible to receive any vesting of the RSUs under this subsection (b)(ii) unless Participant executes and, if applicable, does not revoke all documents required under the applicable Company severance program or otherwise, including without limitation any required release of claims, within the applicable time frames set forth in such documents or as prescribed by the Company (which, in either case, shall be no later than sixty (60) days following the date of such Termination of Service). In the event Participant fails to execute all required documents in a timely fashion, then if any RSUs have vested or been paid to Participant after the Termination of Service but before Participant’s failure to execute all required documents, Participant covenants and agrees that Participant will have no right, title or interest in such amount vested or paid and that Participant will cause such amount to be returned immediately to the Company upon notice. [For Mr. Sievert only, clause (ii) is replaced in its entirety with the following: Without Cause or For Good Reason. If Participant incurs a Termination of Service prior to the Vesting Date (other than as provided in subsection (b)(iii) below) either (1) by the Company or its Affiliates for any reason other than Cause (including due to non-renewal of Participant’s Amended and Restated Employment Agreement with the Company dated March 9, 2023, as amended from time to time, or any successor agreement (the “Employment Agreement”) by notice given by the Company, but excluding due to Participant’s death or Disability) or (2) by Participant for Good Reason, then, in either case, subject to and conditioned upon Participant’s timely execution and non-revocation of the Release (as defined in the Employment Agreement) that becomes fully effective within the time frame set forth in the Employment Agreement, (x) a number of RSUs determined by multiplying (A) the total number of RSUs granted hereby (at target) by (B) a fraction, the numerator of which equals the number of days elapsed from the commencement of the Performance Period through (and including) the date of such Termination of Service and the denominator of which equals the total number of days in the Performance Period shall become earned and vested as of the Release Effective Date based on the actual level of performance attained through the date of such Termination of Service (determined in accordance with Exhibit B as if the Performance Period had ended as of the last trading day immediately preceding the date of such Termination of Service; and (y) a number of RSUs determined by multiplying (A) the total number of RSUs granted hereby (at target) by (B) a fraction, the numerator of which equals the number of days from the date of such Termination of Service through the last day of the Performance Period and the denominator of which equals the total number of days in the Performance Period shall become earned and vested as of the Release Effective Date (as defined in the Employment Agreement) based on the greater of the target level of performance or the actual level of performance attained through the date of such Termination of Service (determined in accordance with Exhibit B as if the Performance Period had ended as of the last trading day immediately preceding the date of such Termination of Service).]
(iii)[For Mr. Sievert only, this subsection (iii) is omitted in its entirety.] Subject to the provisions of Article VIII of the Plan, if (A) a Change in Control is consummated and (B) upon the consummation of the Change in Control or at any time during the one (1)-year period thereafter, Participant incurs a Termination of Service (1) by the Company or its Affiliates for any reason other than Cause, but excluding due to Participant’s death or Disability) or (2) by Participant for Good Reason, then, in either case, any then-unvested RSUs shall become immediately earned and vested as of the date of such Termination of Service at the greater of (x) the target level of performance or (y) the actual level of performance under Exhibit B determined as if the Performance Period had ended as of the last trading day immediately preceding the Change in Control.
(iv) Notwithstanding any other provision in this Agreement to the contrary, if (A) a Change in Control occurs prior to the end of the Performance Period, (B) the RSUs granted hereby are assumed, converted or replaced by the resulting entity in the Change in Control and (C) Participant’s status as a Service Provider continues through the end of the Performance Period, then the number of RSUs granted hereby that will be earned with respect to such Performance Period shall not be less than the number of RSUs that would be earned based on the target level of performance (as determined in accordance with Exhibit B attached hereto).
2



Definitions:     For purposes of this Grant Notice and the Agreement, the following terms shall have the following meanings:
(i)“Divestiture” means a Termination of Service as the result of a divestiture or sale of a business unit as determined by Participant’s employer based on the personnel records of the Company and its Affiliates. [For Mr. Sievert only, this definition is omitted in its entirety.]
(ii)“Performance Period” means the period beginning [  ] and ending on the third (3rd) anniversary thereof.
(iii)“Pro Rata Fraction” means a fraction, the numerator of which is the number of days from the Grant Date through the date of Participant’s Termination of Service and the denominator of which is the number of days from the Grant Date through [the last day of the Performance Period]. [For Mr. Sievert only, this definition is omitted in its entirety.]
(iv)[For Mr. Sievert only, include this subsection (iii).]“Release Effective Date” means the date on which the release described in Section 5(b) of the Employment Agreement becomes effective and irrevocable.]
(v)“Workforce Reduction” means Participant’s Termination of Service as a result of a reduction in force, realignment or similar measure as determined by Participant’s employer and (i) Participant is officially notified in writing of such Termination of Service due to a workforce reduction and eligibility for the Company’s severance program under which Participant is covered, or (ii) if not covered by a Company severance program, Participant is notified in writing by an authorized officer of the Company or any Affiliates that the Termination of Service is as a result of such action. [For Mr. Sievert only, this definition is omitted in its entirety.]

Participant must accept this Agreement electronically pursuant to the online acceptance procedure established by the Company within ninety (90) days after the Agreement is presented to Participant for review. If Participant fails to accept the RSUs within such ninety (90)-day period, the Company may, in its sole discretion, rescind the RSUs in their entirety. By accepting (whether in writing, electronically or otherwise) the RSUs, Participant agrees to be bound by the terms of this Grant Notice, the Plan and the Agreement. Participant has reviewed the Plan, this Grant Notice and the Agreement in their entirety, has had an opportunity to obtain the advice of counsel prior to executing this Grant Notice and fully understands all provisions of the Plan, this Grant Notice and the Agreement. Participant hereby agrees to accept as binding, conclusive and final all decisions or interpretations of the Administrator upon any questions arising under the Plan, this Grant Notice or the Agreement.
T-MOBILE US, INC. PARTICIPANT
By:
Name: [Participant Name]
Title:


3



EXHIBIT A
RESTRICTED STOCK UNIT AGREEMENT
Capitalized terms not specifically defined in this Restricted Stock Unit Agreement (this “Agreement”) have the meanings specified in the Grant Notice or, if not defined in the Grant Notice, in the Plan.
ARTICLE I.
    GENERAL
1.1Award of RSUs. The Company has granted the RSUs to Participant effective as of the Grant Date set forth in the Grant Notice (the “Grant Date”). Each RSU represents the right to receive one Share, as set forth in this Agreement. Participant will have no right to the distribution of any Shares until the time (if ever) the RSUs have vested.
1.2Incorporation of Terms of Plan. The RSUs are subject to the terms and conditions set forth in this Agreement and the Plan, which is incorporated herein by reference. In the event of any inconsistency between the Plan and this Agreement, the terms of the Plan will control, unless it is expressly specified in this Agreement or the Grant Notice that the specific provision of the Plan will not apply. For clarity, the foregoing sentence shall not limit the applicability of any additive language contained in this Agreement which provides supplemental or additional terms not inconsistent with the Plan.
1.3Unsecured Promise. The RSUs will at all times prior to settlement represent an unsecured Company obligation payable only from the Company’s general assets.
ARTICLE II.
VESTING; FORFEITURE AND SETTLEMENT
2.1Vesting; Forfeiture. The RSUs will vest according to the vesting schedule in the Grant Notice. Except as otherwise set forth in the Grant Notice, the Plan or this Agreement, and unless the Administrator otherwise determines, in the event of Participant’s Termination of Service for any reason, all unvested RSUs will immediately and automatically be cancelled and forfeited (after taking into consideration any accelerated vesting which may occur in connection with such Termination of Service, if any) and Participant shall have no further right to or interest in such cancelled and forfeited RSUs.
2.2Settlement.
(a)RSUs that vest will be paid in Shares as soon as administratively practicable after the vesting of the applicable RSU, but in no event later than the earlier of (i) ninety (90) days following the date on which the applicable RSU vests or (ii) March 15th of the calendar year immediately following the calendar year in which the vesting date occurs; provided, that if Participant elects to defer settlement of vested RSUs pursuant to Section 2.2(c), each vested RSU shall be settled in accordance with such deferral [For Mr. Sievert only, replace with: RSUs that vest will be paid in Shares as soon as administratively practicable after the vesting of the applicable RSU, but in no event later than the earlier of the earlier of (i) ninety (90) days following the date on which the applicable RSU vests or (ii) March 15th of the calendar year immediately following the calendar year in which the vesting date occurs (or, with respect to RSUs that become vested on the Release Effective Date in connection with a Termination of Service, within seventy-four (74) days following the date of such Termination of Service); provided, that if Participant elects to defer settlement of vested RSUs pursuant to Section 2.2(c), each vested RSU shall be settled in accordance with such deferral.] Notwithstanding the foregoing, if the vesting of an RSU is subject to execution of [the Release][a release of claims], and such [Release][release of claims] may be executed and/or revoked in a calendar year following the calendar year in which the payment event occurs, the payment shall be made in the second such calendar year to the extent necessary to comply with Section 409A.


(b)Notwithstanding the foregoing, the Company may delay any payment under this Agreement that the Company reasonably determines would violate Applicable Law or an applicable provision of the Plan until the earliest date the Company reasonably determines the making of the payment will not cause such a violation (in accordance with Treasury Regulation Section 1.409A-2(b)(7)(ii)); provided, that the Company reasonably believes the delay will not result in the imposition of excise taxes under Section 409A.
(c)Subject to Section 10.6 of the Plan, Participant may elect to defer delivery of the Shares payable upon vesting of the RSUs in accordance with the terms and conditions set forth in the Company’s Non-Qualified Deferred Compensation Plan (as amended and restated effective as of January 1, 2014 and as may be further amended from time to time), any successor plan or any other deferred compensation arrangement.
ARTICLE III.
TAXATION AND TAX WITHHOLDING
3.1Representation. Participant represents to the Company that Participant has reviewed with Participant’s own tax advisors the tax consequences of the RSUs and the transactions contemplated by the Grant Notice and this Agreement. Participant is relying solely on such advisors and not on any statements or representations of the Company or any of its Affiliates or their respective agents.
3.2Tax Withholding.
(a)Subject to Section 3.2(b) below and Section 9.5 of the Plan, the Company will have the authority and the right to deduct or withhold, or require Participant to remit to the Company, an amount sufficient to satisfy any all federal, state, local and foreign taxes required by Applicable Law to be withheld in connection with the vesting or settlement of the RSUs or any other taxable event related to the RSUs, including, without limitation, the authority to deduct such amounts from other compensation payable to Participant by the Company.
(b)Unless [the Company / the Administrator]1 otherwise determines, the Company shall withhold, or cause to be withheld, in satisfaction of any applicable withholding tax obligations and in accordance with Section 9.5 of the Plan, a number of Shares otherwise issuable upon settlement of the RSUs having a fair market value not exceeding the aggregate amount of such withholding tax liabilities based on the minimum individual statutory withholding rates in Participant’s applicable jurisdictions for federal, state, local and foreign income tax and payroll tax purposes that are applicable to such taxable income.
(c)Participant acknowledges that Participant is ultimately liable and responsible for all taxes owed in connection with the RSUs, regardless of any action the Company or any Affiliate takes with respect to any tax withholding obligations that arise in connection with the RSUs. Neither the Company nor any Affiliate makes any representation or undertaking regarding the treatment of any tax withholding in connection with the grant, vesting or payment of the RSUs or the subsequent sale of Shares. The Company and its Affiliates do not commit and are under no obligation to structure the RSUs to reduce or eliminate Participant’s tax liability.
ARTICLE IV.
    COVENANTS
4.1Restrictive Covenants. Participant has previously entered into a Restrictive Covenant and Confidentiality Agreement (or similarly titled document) (the “Restrictive Covenant Agreement”). The vesting of the RSUs and Participant’s receipt of benefits hereunder is specifically conditioned on Participant’s continued compliance with the Restrictive Covenant Agreement except for the Covenant Not to Compete (as defined therein) in the Restrictive Covenant Agreement. To the extent allowed by and consistent with Applicable Law and any applicable limitations period, if the Company determines at any time that Participant has materially breached the Restrictive Covenant Agreement (excluding the
1 Note to Draft: Administrator for Section 16 persons; Company for others.
2



Covenant Not to Compete), then in addition to the remedies available under the Restrictive Covenant Agreement, the Company will be entitled to (i) cause any then-unvested RSUs to be immediately canceled without any payment of consideration therefor by the Company and (ii) recover from Participant in its sole discretion some or all of the Shares (or proceeds received by Participant from such Shares) paid to Participant upon settlement of the RSUs pursuant to this Agreement. Participant recognizes that if Participant materially breaches the Restrictive Covenant Agreement (excluding the Covenant Not to Compete), the losses to the Company and/or its Affiliates may amount to the full value of any Shares paid to Participant upon settlement of the RSUs pursuant to this Agreement.
4.2Covenant Not to Compete.2 Participant agrees that, during the term of Participant’s employment with the Company and its Affiliates (and their respective predecessors) and for a period of one year [For Sievert only: “one year” is replaced with “18 months”] immediately following the termination of such employment, Participant shall not either directly or indirectly, with or without compensation: (a) engage in, provide, offer to provide, or assist anyone in providing, services to or for a business, entity or individual that is substantially the same as or similar to the Company’s Business (as defined in the Restrictive Covenant Agreement) or that competes with the Company’s Business, directly or indirectly, in the geographic areas where the Company and/or its Affiliates provide services; or (b) compete with the Company, its Affiliates or its dealers within the geographic areas where such entities provide or are permitted to provide services. Participant understands that the noncompetition obligations in this paragraph shall not apply unless at the time this Agreement is executed, or at a later date, Participant’s annualized earnings meet or exceed the minimum amount required by the Revised Code of Washington 49.62. Participant agrees that the noncompetition obligation contained in this Section 4.2, if not enforceable at the time this Agreement is entered into, may nevertheless become enforceable in the future due to changes in Participant’s compensation.
ARTICLE V.
OTHER PROVISIONS
5.1Adjustments. Participant acknowledges that the RSUs and the Shares subject to the RSUs are subject to adjustment, modification and termination in certain events as provided in this Agreement and the Plan.
5.2Clawback. The RSUs and the Shares issuable hereunder shall be subject to any clawback or recoupment policy in effect on the Grant Date or as may be adopted or maintained by the Company following the Grant Date, including the Dodd-Frank Wall Street Reform and Consumer Protection Act and any rules or regulations promulgated thereunder.
5.3Notices. Any notice to be given under the terms of this Agreement to the Company must be in writing and addressed to the Company in care of the Company’s Head of Stock Compensation at the Company’s principal office or the Head of Stock Compensation’s then-current email address or facsimile number. Any notice to be given under the terms of this Agreement to Participant must be in writing and addressed to Participant (or, if Participant is then deceased, to the Designated Beneficiary) at Participant’s last known mailing address, email address or facsimile number in the Company’s personnel files. By a notice given pursuant to this Section, either party may designate a different address for notices to be given to that party. Any notice will be deemed duly given when actually received, when sent by email, when sent by certified mail (return receipt requested) and deposited with postage prepaid in a post office or branch post office regularly maintained by the United States Postal Service, when delivered by a nationally recognized express shipping company or upon receipt of a facsimile transmission confirmation.
5.4Arbitration. The Company and Participant shall make a good faith attempt to resolve any and all claims and disputes regarding the RSUs, the Grant Notice or this Agreement in accordance with any dispute resolution adopted by the Company before resorting to any other dispute resolution procedure. If the claim or dispute is not resolved in that manner and involves any rights or obligations under the Grant Notice and/or this Agreement, then the claim or dispute will be determined by arbitration in accordance with the then-current American Arbitration Association (“AAA”) national rules for the resolution of employment disputes by arbitration, except as modified herein. The arbitration will be
2 Note to Draft: To be updated pending final FTC rule.
3



conducted by a sole neutral arbitrator who has had both training and experience as an arbitrator of employee compensation matters. If the Company and Participant cannot agree on an arbitrator, then the arbitrator will be selected by the AAA applying the criteria in this Section 5.4. Reasonable discovery will be permitted and the arbitrator may decide any issue as to discovery. The arbitrator may decide any issue as to whether or as to the extent to which, any dispute is subject to the dispute resolution provisions of this Section 5.4. The arbitrator may award only relief at law contemplated under the Grant Notice, this Agreement and the Plan and the arbitrator may not award incidental, consequential or punitive damages, attorney’s fees or any form or equitable relief, to either party. The arbitrator must base the arbitration award on the provisions of this Section 5.4 and Applicable Law and must render the award in writing, including an explanation of the reasons for the award. Judgment upon the award may be entered by any court having jurisdiction of the matter, and the decision of the arbitrator will be final and binding. The statute of limitations applicable to the commencement of a lawsuit will apply to the commencement of an arbitration. The arbitrator’s fees will be paid in equal portions by the Company and Participant, unless the Company agrees to pay all such fees.
5.5Venue. Any arbitration, legal or equitable action or any proceeding arising directly, indirectly, or otherwise in connection with, out of, related to or from the Grant Notice or this Agreement, or any provision thereof or hereof, shall exclusively be filed and adjudicated in King County, Washington and no other venue.
5.6Conformity to Securities Laws. Participant acknowledges that the Plan, the Grant Notice and this Agreement are intended to conform to the extent necessary with all Applicable Laws and, to the extent Applicable Laws permit, will be deemed amended as necessary to conform to Applicable Laws.
5.7Successors and Assigns. The Company may assign any of its rights under this Agreement to single or multiple assignees, and this Agreement will inure to the benefit of the successors and assigns of the Company. Subject to the restrictions on transfer set forth in this Agreement or the Plan, this Agreement will be binding upon and inure to the benefit of the heirs, legatees, legal representatives, successors and assigns of the parties hereto.
5.8Limitations Applicable to Section 16 Persons. Notwithstanding any other provision of the Plan or this Agreement, if Participant is subject to Section 16 of the Exchange Act, the Plan, the Grant Notice, this Agreement and the RSUs will be subject to any additional limitations set forth in any applicable exemptive rule under Section 16 of the Exchange Act (including any amendment to Rule 16b-3) that are requirements for the application of such exemptive rule. To the extent Applicable Laws permit, this Agreement will be deemed amended as necessary to conform to such applicable exemptive rule.
5.9Entire Agreement; Amendment. The Plan, the Grant Notice and this Agreement (including any exhibit hereto) constitute the entire agreement of the parties and supersede in their entirety all prior undertakings and agreements of the Company and Participant with respect to the subject matter hereof. [For Sievert only, the following is added “, including without limitation, any provisions of the Employment Agreement that would otherwise apply to the RSUs.”] To the extent permitted by the Plan, the Grant Notice and this Agreement may be wholly or partially amended or otherwise modified, suspended or terminated at any time or from time to time by the Administrator or the Board; provided, however, that except as may otherwise be provided by the Plan, no amendment, modification, suspension or termination of this Agreement shall materially and adversely affect the RSUs or without the written consent of Participant.
5.10Severability. If any portion of the Grant Notice or this Agreement or any action taken under the Grant Notice or this Agreement, in any case is held illegal or invalid for any reason, the illegality or invalidity will not affect the remaining parts of the Grant Notice and/or this Agreement (as applicable), and the Grant Notice and/or this Agreement (as applicable) will be construed and enforced as if the illegal or invalid provisions had been excluded, and the illegal or invalid action will be null and void.
4



5.11Limitation on Participant’s Rights. Participation in the Plan confers no rights or interests other than as herein provided. This Agreement creates only a contractual obligation on the part of the Company as to amounts payable and may not be construed as creating a trust. Neither the Plan nor any underlying program, in and of itself, has any assets. Participant will have only the rights of a general unsecured creditor of the Company with respect to amounts credited and benefits payable, if any, with respect to the RSUs, and rights no greater than the right to receive the Shares as a general unsecured creditor with respect to the RSUs, as and when settled pursuant to the terms of this Agreement.
5.12Not a Contract of Employment or Service. Nothing in the Plan, the Grant Notice or this Agreement confers upon Participant any right to continue in the employ or service of the Company or its Affiliate or interferes with or restricts in any way the rights of the Company and its Affiliates, which rights are hereby expressly reserved, to discharge or terminate the services of Participant at any time for any reason whatsoever, with or without Cause, except to the extent expressly provided otherwise in a written agreement between the Company or an Affiliate and Participant.
5.13Counterparts. The Grant Notice may be executed in one or more counterparts, including by way of any electronic signature, subject to Applicable Law, each of which will be deemed an original and all of which together will constitute one instrument.
5.14Governing Law. The Grant Notice and this Agreement will be governed by and interpreted in accordance with the laws of the State of Delaware, disregarding any state’s choice-of-law principles requiring the application of a jurisdiction’s laws other than the State of Delaware; provided, that the provisions of Article V of this Agreement shall be governed by and construed in accordance with the laws of the State of Washington for employees employed in the State of Washington [For Mr. Sievert only, Section 5.14 is replaced in its entirety with the following: Governing Law. The Grant Notice and this Agreement will be governed by and interpreted in accordance with the laws of the State of Delaware, disregarding any state’s choice-of-law principles requiring the application of a jurisdiction’s laws other than the State of Delaware.]
5.15Section 409A.
(a)This Agreement shall be interpreted in accordance with the requirements of Section 409A. Notwithstanding any provision of this Agreement, the Company may adopt such amendments to this Agreement or adopt other policies and procedures (including amendments, policies and procedures with retroactive effect), or take any other actions, that the Administrator determines are necessary or appropriate to avoid the imposition of taxes under Section 409A, provided, however, that this Section 5.15 shall not create an obligation on the part of the Company to adopt any such amendment, policy or procedure or take any such other action, nor shall the Company have any liability for failing to do so. To the extent that any payment window spans two calendar years, Participant shall have no discretion over or ability to control the actual year in which payment is made.
(b)    Notwithstanding anything to the contrary in this Agreement, no amounts that constitute “non-qualified deferred compensation” (within the meaning of Section 409A) shall be paid to Participant under this Agreement during the six (6)-month period following Participant’s “separation from service” to the extent that the Administrator determines that Participant is a “specified employee” (each within the meaning of Section 409A) at the time of such separation from service and that paying such amounts at the time or times indicated in this Agreement would be a prohibited distribution under Section 409A(a)(2)(b)(i). If the payment of any such amounts is delayed as a result of the previous sentence, then on the first business day following the end of such six (6)-month period (or such earlier date upon which such amount can be paid under Section 409A without being subject to such additional taxes), the Company shall pay to Participant in a lump-sum all amounts that would have otherwise been payable to Participant during such six (6)-month period under this Agreement.
5.16Titles. Titles are provided herein for convenience only and are not to serve as a basis for interpretation or construction of this Agreement.
* * * * *

5



EXHIBIT B
PERFORMANCE-VESTING CONDITIONS
6


EX-10.3 4 tmus06302023ex103.htm TMUS EXHIBIT 10.3 Document
EXHIBIT 10.3
T-MOBILE US, INC.
2023 INCENTIVE AWARD PLAN

RESTRICTED STOCK UNIT GRANT NOTICE
(PERFORMANCE-VESTING; CASH-SETTLED)
T-Mobile US, Inc., a Delaware corporation (the “Company”), has granted to the participant listed below (“Participant”) the Restricted Stock Units (the “RSUs”) described in this Restricted Stock Unit Grant Notice (this “Grant Notice”), subject to the terms and conditions of the T-Mobile US, Inc. 2023 Incentive Award Plan (as amended from time to time, the “Plan”) and the Restricted Stock Unit Agreement attached hereto as Exhibit A (the “Agreement”), both of which are incorporated into this Grant Notice by reference. Capitalized terms not specifically defined in this Grant Notice or the Agreement have the meanings given to them in the Plan.
Participant: [____]
Grant Date: [____]
Number of RSUs (at target): [____]
Vesting Schedule:
(a)     Subject to subsection (b) below, and further subject to and conditioned upon Participant’s continued status as a Service Provider through the Vesting Date, a number of RSUs equal to the Performance-Adjusted Units (as defined and determined in accordance with Exhibit B attached hereto) shall vest on the third (3rd) anniversary of the Grant Date (the “Vesting Date”).
(b)    Notwithstanding the foregoing:
(i)If Participant incurs a Termination of Service prior to the Vesting Date due to Participant’s death or Disability, any then-unvested RSUs shall vest (based on the target level of performance, as determined in accordance with Exhibit B attached hereto) upon such Termination of Service.



(ii)If Participant incurs a Termination of Service prior to the Vesting Date as a result of a Workforce Reduction or Divestiture, then (A) the number of Performance-Adjusted Units shall be determined (in accordance with Exhibit B attached hereto) as soon as administratively practicable following the last day of the Performance Period, and (B) a number of RSUs equal to the product of such Performance-Adjusted Units multiplied by the Pro Rata Fraction shall become earned and vested and (C) any remaining unearned RSUs shall be canceled and forfeited effective as of the last day of the Performance Period; provided, however, that Participant will not be eligible to receive any vesting of the RSUs under this subsection (b)(ii) unless Participant executes and, if applicable, does not revoke all documents required under the applicable Company severance program or otherwise, including without limitation any required release of claims, within the applicable time frames set forth in such documents or as prescribed by the Company (which, in either case, shall be no later than sixty (60) days following the date of such Termination of Service). In the event Participant fails to execute all required documents in a timely fashion, then if any RSUs have vested or been paid to Participant after the Termination of Service but before Participant’s failure to execute all required documents, Participant covenants and agrees that Participant will have no right, title or interest in such amount vested or paid and that Participant will cause such amount to be returned immediately to the Company upon notice. [For Mr. Sievert only, clause (ii) is replaced in its entirety with the following: Without Cause or For Good Reason. If Participant incurs a Termination of Service prior to the Vesting Date (other than as provided in subsection (b)(iii) below) either (1) by the Company or its Affiliates for any reason other than Cause (including due to non-renewal of Participant’s Amended and Restated Employment Agreement with the Company dated March 9, 2023, as amended from time to time, or any successor agreement (the “Employment Agreement”) by notice given by the Company, but excluding due to Participant’s death or Disability) or (2) by Participant for Good Reason, then, in either case, subject to and conditioned upon Participant’s timely execution and non-revocation of the Release (as defined in the Employment Agreement) that becomes fully effective within the time frame set forth in the Employment Agreement, (x) a number of RSUs determined by multiplying (A) the total number of RSUs granted hereby (at target) by (B) a fraction, the numerator of which equals the number of days elapsed from the commencement of the Performance Period through (and including) the date of such Termination of Service and the denominator of which equals the total number of days in the Performance Period shall become earned and vested as of the Release Effective Date (as defined in the Employment Agreement) based on the actual level of performance attained through the date of such Termination of Service (determined in accordance with Exhibit B as if the Performance Period had ended as of the last trading day immediately preceding the date of such Termination of Service; and (y) a number of RSUs determined by multiplying (A) the total number of RSUs granted hereby (at target) by (B) a fraction, the numerator of which equals the number of days from the date of such Termination of Service through the last day of the Performance Period and the denominator of which equals the total number of days in the Performance Period shall become earned and vested as of the Release Effective Date based on the greater of the target level of performance or the actual level of performance attained through the date of such Termination of Service (determined in accordance with Exhibit B as if the Performance Period had ended as of the last trading day immediately preceding the date of such Termination of Service).]
(iii)[For Mr. Sievert only, this subsection (iii) is omitted in its entirety.] Subject to the provisions of Article VIII of the Plan, if (A) a Change in Control is consummated and (B) upon the consummation of the Change in Control or at any time during the one (1)-year period thereafter, Participant incurs a Termination of Service (1) by the Company or its Affiliates for any reason other than Cause, but excluding due to Participant’s death or Disability) or (2) by Participant for Good Reason, then, in either case, any then-unvested RSUs shall become immediately earned and vested as of the date of such Termination of Service at the greater of (x) the target level of performance or (y) the actual level of performance under Exhibit B determined as if the Performance Period had ended as of the last trading day immediately preceding the Change in Control.
(iv) Notwithstanding any other provision in this Agreement to the contrary, if (A) a Change in Control occurs prior to the end of the Performance Period, (B) the RSUs granted hereby are assumed, converted or replaced by the resulting entity in the Change in Control and (C) Participant’s status as a Service Provider continues through the end of the Performance Period, then the number of RSUs granted hereby that will be earned with respect to such Performance Period shall not be less than the number of RSUs that would be earned based on the target level of performance (as determined in accordance with Exhibit B attached hereto).
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Definitions:     For purposes of this Grant Notice and the Agreement, the following terms shall have the following meanings:
(i)“Divestiture” means a Termination of Service as the result of a divestiture or sale of a business unit as determined by Participant’s employer based on the personnel records of the Company and its Affiliates. [For Mr. Sievert only, this definition is omitted in its entirety.]
(ii)“Performance Period” means the period beginning [  ] and ending on the third (3rd) anniversary thereof.
(iii)“Pro Rata Fraction” means a fraction, the numerator of which is the number of days from the Grant Date through the date of Participant’s Termination of Service and the denominator of which is the number of days from the Grant Date through [the last day of the Performance Period]. [For Mr. Sievert only, this definition is omitted in its entirety.]
(iv)[For Mr. Sievert only, include this subsection (iii).]“Release Effective Date” means the date on which the release described in Section 5(b) of the Employment Agreement becomes effective and irrevocable.]
(v)“Workforce Reduction” means Participant’s Termination of Service as a result of a reduction in force, realignment or similar measure as determined by Participant’s employer and (i) Participant is officially notified in writing of such Termination of Service due to a workforce reduction and eligibility for the Company’s severance program under which Participant is covered, or (ii) if not covered by a Company severance program, Participant is notified in writing by an authorized officer of the Company or any Affiliates that the Termination of Service is as a result of such action. [For Mr. Sievert only, this definition is omitted in its entirety.]

Participant must accept this Agreement electronically pursuant to the online acceptance procedure established by the Company within ninety (90) days after the Agreement is presented to Participant for review. If Participant fails to accept the RSUs within such ninety (90)-day period, the Company may, in its sole discretion, rescind the RSUs in their entirety. By accepting (whether in writing, electronically or otherwise) the RSUs, Participant agrees to be bound by the terms of this Grant Notice, the Plan and the Agreement. Participant has reviewed the Plan, this Grant Notice and the Agreement in their entirety, has had an opportunity to obtain the advice of counsel prior to executing this Grant Notice and fully understands all provisions of the Plan, this Grant Notice and the Agreement. Participant hereby agrees to accept as binding, conclusive and final all decisions or interpretations of the Administrator upon any questions arising under the Plan, this Grant Notice or the Agreement.
T-MOBILE US, INC. PARTICIPANT
By:
Name: [Participant Name]
Title:


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EXHIBIT A
RESTRICTED STOCK UNIT AGREEMENT
Capitalized terms not specifically defined in this Restricted Stock Unit Agreement (this “Agreement”) have the meanings specified in the Grant Notice or, if not defined in the Grant Notice, in the Plan.
ARTICLE I.
    GENERAL
1.1Award of RSUs. The Company has granted the RSUs to Participant effective as of the Grant Date set forth in the Grant Notice (the “Grant Date”). Each RSU represents the right to receive an amount in cash equal to the Fair Market Value of one Share, as set forth in this Agreement. Participant will have no right to the distribution of any Shares until the time (if ever) the RSUs have vested.
1.2Incorporation of Terms of Plan. The RSUs are subject to the terms and conditions set forth in this Agreement and the Plan, which is incorporated herein by reference. In the event of any inconsistency between the Plan and this Agreement, the terms of the Plan will control, unless it is expressly specified in this Agreement or the Grant Notice that the specific provision of the Plan will not apply. For clarity, the foregoing sentence shall not limit the applicability of any additive language contained in this Agreement which provides supplemental or additional terms not inconsistent with the Plan.
1.3Unsecured Promise. The RSUs will at all times prior to settlement represent an unsecured Company obligation payable only from the Company’s general assets.
ARTICLE II.
VESTING; FORFEITURE AND SETTLEMENT
2.1Vesting; Forfeiture. The RSUs will vest according to the vesting schedule in the Grant Notice. Except as otherwise set forth in the Grant Notice, the Plan or this Agreement, and unless the Administrator otherwise determines, in the event of Participant’s Termination of Service for any reason, all unvested RSUs will immediately and automatically be cancelled and forfeited (after taking into consideration any accelerated vesting which may occur in connection with such Termination of Service, if any) and Participant shall have no further right to or interest in such cancelled and forfeited RSUs.
2.2Settlement.
(a)RSUs that vest will be paid in cash as soon as administratively practicable after the vesting of the applicable RSU, but in no event later than the earlier of (i) ninety (90) days following the date on which the applicable RSU vests or (ii) March 15th of the calendar year immediately following the calendar year in which the vesting date occurs; provided, that if Participant elects to defer settlement of vested RSUs pursuant to Section 2.2(c), each vested RSU shall be settled in accordance with such deferral. [For Mr. Sievert only, replace with: RSUs that vest will be paid in cash as soon as administratively practicable after the vesting of the applicable RSU, but in no event later than the earlier of (i) ninety (90) days following the date on which the applicable RSU vests or (ii) March 15th of the calendar year immediately following the calendar year in which the vesting date occurs (or, with respect to RSUs that become vested on the Release Effective Date in connection with a Termination of Service, within seventy-four (74) days following the date of such Termination of Service); provided, that if Participant elects to defer settlement of vested RSUs pursuant to Section 2.2(c), each vested RSU shall be settled in accordance with such deferral.] Notwithstanding the foregoing, if the vesting of an RSU is subject to execution of [the Release][a release of claims], and such [Release][release of claims] may be executed and/or revoked in a calendar year following the calendar year in which the payment event occurs, the payment shall be made in the second such calendar year to the extent necessary to comply with Section 409A.



(b)Notwithstanding the foregoing, the Company may delay any payment under this Agreement that the Company reasonably determines would violate Applicable Law or an applicable provision of the Plan until the earliest date the Company reasonably determines the making of the payment will not cause such a violation (in accordance with Treasury Regulation Section 1.409A-2(b)(7)(ii)); provided, that the Company reasonably believes the delay will not result in the imposition of excise taxes under Section 409A.
(c)Subject to Section 10.6 of the Plan, Participant may elect to defer delivery of the cash payable upon vesting of the RSUs in accordance with the terms and conditions set forth in the Company’s Non-Qualified Deferred Compensation Plan (as amended and restated effective as of January 1, 2014 and as may be further amended from time to time), any successor plan or any other deferred compensation arrangement.
ARTICLE III.
TAXATION AND TAX WITHHOLDING
3.1Representation. Participant represents to the Company that Participant has reviewed with Participant’s own tax advisors the tax consequences of the RSUs and the transactions contemplated by the Grant Notice and this Agreement. Participant is relying solely on such advisors and not on any statements or representations of the Company or any of its Affiliates or their respective agents.
3.2Tax Withholding.
(a)The Company shall withhold or cause to be withheld, from the amounts payable to Participant under this Agreement, and/or from the Participant’s wages or other cash compensation paid by the Company or any Affiliate thereof, all applicable foreign, federal, state and/or local taxes as are required to be withheld pursuant to applicable law or regulation.
(b)Participant acknowledges that Participant is ultimately liable and responsible for all taxes owed in connection with the RSUs, regardless of any action the Company or any Affiliate takes with respect to any tax withholding obligations that arise in connection with the RSUs. Neither the Company nor any Affiliate makes any representation or undertaking regarding the treatment of any tax withholding in connection with the grant, vesting or payment of the RSUs. The Company and its Affiliates do not commit and are under no obligation to structure the RSUs to reduce or eliminate Participant’s tax liability.
ARTICLE IV.
    COVENANTS
4.1Restrictive Covenants. Participant has previously entered into a Restrictive Covenant and Confidentiality Agreement (or similarly titled document) (the “Restrictive Covenant Agreement”). The vesting of the RSUs and Participant’s receipt of benefits hereunder is specifically conditioned on Participant’s continued compliance with the Restrictive Covenant Agreement except for the Covenant Not to Compete (as defined therein) in the Restrictive Covenant Agreement. To the extent allowed by and consistent with Applicable Law and any applicable limitations period, if the Company determines at any time that Participant has materially breached the Restrictive Covenant Agreement (excluding the Covenant Not to Compete), then in addition to the remedies available under the Restrictive Covenant Agreement, the Company will be entitled to (i) cause any then-unvested RSUs to be immediately canceled without any payment of consideration therefor by the Company and (ii) recover from Participant in its sole discretion some or all of the cash paid to Participant upon settlement of the RSUs pursuant to this Agreement. Participant recognizes that if Participant materially breaches the Restrictive Covenant Agreement (excluding the Covenant Not to Compete), the losses to the Company and/or its Affiliates may amount to the full amount of any cash paid to Participant upon settlement of the RSUs pursuant to this Agreement.
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4.2Covenant Not to Compete.1 Participant agrees that, during the term of Participant’s employment with the Company and its Affiliates (and their respective predecessors) and for a period of one year [For Sievert only: “one year” is replaced with “18 months”] immediately following the termination of such employment, Participant shall not either directly or indirectly, with or without compensation: (a) engage in, provide, offer to provide, or assist anyone in providing, services to or for a business, entity or individual that is substantially the same as or similar to the Company’s Business (as defined in the Restrictive Covenant Agreement) or that competes with the Company’s Business, directly or indirectly, in the geographic areas where the Company and/or its Affiliates provide services; or (b) compete with the Company, its Affiliates or its dealers within the geographic areas where such entities provide or are permitted to provide services. Participant understands that the noncompetition obligations in this paragraph shall not apply unless at the time this Agreement is executed, or at a later date, Participant’s annualized earnings meet or exceed the minimum amount required by the Revised Code of Washington 49.62. Participant agrees that the noncompetition obligation contained in this Section 4.2, if not enforceable at the time this Agreement is entered into, may nevertheless become enforceable in the future due to changes in Participant’s compensation.
ARTICLE V.
OTHER PROVISIONS
5.1Adjustments. Participant acknowledges that the RSUs and the Shares subject to the RSUs are subject to adjustment, modification and termination in certain events as provided in this Agreement and the Plan.
5.2Clawback. The RSUs and the cash issuable hereunder shall be subject to any clawback or recoupment policy in effect on the Grant Date or as may be adopted or maintained by the Company following the Grant Date, including the Dodd-Frank Wall Street Reform and Consumer Protection Act and any rules or regulations promulgated thereunder.
5.3Notices. Any notice to be given under the terms of this Agreement to the Company must be in writing and addressed to the Company in care of the Company’s Head of Stock Compensation at the Company’s principal office or the Head of Stock Compensation’s then-current email address or facsimile number. Any notice to be given under the terms of this Agreement to Participant must be in writing and addressed to Participant (or, if Participant is then deceased, to the Designated Beneficiary) at Participant’s last known mailing address, email address or facsimile number in the Company’s personnel files. By a notice given pursuant to this Section, either party may designate a different address for notices to be given to that party. Any notice will be deemed duly given when actually received, when sent by email, when sent by certified mail (return receipt requested) and deposited with postage prepaid in a post office or branch post office regularly maintained by the United States Postal Service, when delivered by a nationally recognized express shipping company or upon receipt of a facsimile transmission confirmation.
5.4Arbitration. The Company and Participant shall make a good faith attempt to resolve any and all claims and disputes regarding the RSUs, the Grant Notice or this Agreement in accordance with any dispute resolution adopted by the Company before resorting to any other dispute resolution procedure. If the claim or dispute is not resolved in that manner and involves any rights or obligations under the Grant Notice and/or this Agreement, then the claim or dispute will be determined by arbitration in accordance with the then-current American Arbitration Association (“AAA”) national rules for the resolution of employment disputes by arbitration, except as modified herein. The arbitration will be conducted by a sole neutral arbitrator who has had both training and experience as an arbitrator of employee compensation matters. If the Company and Participant cannot agree on an arbitrator, then the arbitrator will be selected by the AAA applying the criteria in this Section 5.4. Reasonable discovery will be permitted and the arbitrator may decide any issue as to discovery. The arbitrator may decide any issue as to whether or as to the extent to which, any dispute is subject to the dispute resolution provisions of this Section 5.4. The arbitrator may award only relief at law contemplated under the Grant Notice, this Agreement and the Plan and the arbitrator may not award incidental, consequential or punitive damages, attorney’s fees or any form or equitable relief, to either party. The arbitrator must base the arbitration award on the provisions of this Section 5.4 and Applicable Law and must render the award in writing,
1 Note to Draft: To be updated pending final FTC rule.
3




including an explanation of the reasons for the award. Judgment upon the award may be entered by any court having jurisdiction of the matter, and the decision of the arbitrator will be final and binding. The statute of limitations applicable to the commencement of a lawsuit will apply to the commencement of an arbitration. The arbitrator’s fees will be paid in equal portions by the Company and Participant, unless the Company agrees to pay all such fees.
5.5Venue. Any arbitration, legal or equitable action or any proceeding arising directly, indirectly, or otherwise in connection with, out of, related to or from the Grant Notice or this Agreement, or any provision thereof or hereof, shall exclusively be filed and adjudicated in King County, Washington and no other venue.
5.6Conformity to Securities Laws. Participant acknowledges that the Plan, the Grant Notice and this Agreement are intended to conform to the extent necessary with all Applicable Laws and, to the extent Applicable Laws permit, will be deemed amended as necessary to conform to Applicable Laws.
5.7Successors and Assigns. The Company may assign any of its rights under this Agreement to single or multiple assignees, and this Agreement will inure to the benefit of the successors and assigns of the Company. Subject to the restrictions on transfer set forth in this Agreement or the Plan, this Agreement will be binding upon and inure to the benefit of the heirs, legatees, legal representatives, successors and assigns of the parties hereto.
5.8Limitations Applicable to Section 16 Persons. Notwithstanding any other provision of the Plan or this Agreement, if Participant is subject to Section 16 of the Exchange Act, the Plan, the Grant Notice, this Agreement and the RSUs will be subject to any additional limitations set forth in any applicable exemptive rule under Section 16 of the Exchange Act (including any amendment to Rule 16b-3) that are requirements for the application of such exemptive rule. To the extent Applicable Laws permit, this Agreement will be deemed amended as necessary to conform to such applicable exemptive rule.
5.9Entire Agreement; Amendment. The Plan, the Grant Notice and this Agreement (including any exhibit hereto) constitute the entire agreement of the parties and supersede in their entirety all prior undertakings and agreements of the Company and Participant with respect to the subject matter hereof. [For Sievert only, the following is added “, including without limitation, any provisions of the Employment Agreement that would otherwise apply to the RSUs.”] To the extent permitted by the Plan, the Grant Notice and this Agreement may be wholly or partially amended or otherwise modified, suspended or terminated at any time or from time to time by the Administrator or the Board; provided, however, that except as may otherwise be provided by the Plan, no amendment, modification, suspension or termination of this Agreement shall materially and adversely affect the RSUs or without the written consent of Participant.
5.10Severability. If any portion of the Grant Notice or this Agreement or any action taken under the Grant Notice or this Agreement, in any case is held illegal or invalid for any reason, the illegality or invalidity will not affect the remaining parts of the Grant Notice and/or this Agreement (as applicable), and the Grant Notice and/or this Agreement (as applicable) will be construed and enforced as if the illegal or invalid provisions had been excluded, and the illegal or invalid action will be null and void.
5.11Limitation on Participant’s Rights. Participation in the Plan confers no rights or interests other than as herein provided. This Agreement creates only a contractual obligation on the part of the Company as to amounts payable and may not be construed as creating a trust. Neither the Plan nor any underlying program, in and of itself, has any assets. Participant will have only the rights of a general unsecured creditor of the Company with respect to amounts credited and benefits payable, if any, with respect to the RSUs, and rights no greater than the right to receive cash as a general unsecured creditor with respect to the RSUs, as and when settled pursuant to the terms of this Agreement.
5.12Not a Contract of Employment or Service. Nothing in the Plan, the Grant Notice or this Agreement confers upon Participant any right to continue in the employ or service of the Company or its Affiliate or interferes with or restricts in any way the rights of the Company and its Affiliates, which rights are hereby expressly reserved, to discharge or terminate the services of Participant at any time for any reason whatsoever, with or without Cause, except to the extent expressly provided otherwise in a written agreement between the Company or an Affiliate and Participant.
4




5.13Counterparts. The Grant Notice may be executed in one or more counterparts, including by way of any electronic signature, subject to Applicable Law, each of which will be deemed an original and all of which together will constitute one instrument.
5.14Governing Law. The Grant Notice and this Agreement will be governed by and interpreted in accordance with the laws of the State of Delaware, disregarding any state’s choice-of-law principles requiring the application of a jurisdiction’s laws other than the State of Delaware; provided, that the provisions of Article V of this Agreement shall be governed by and construed in accordance with the laws of the State of Washington for employees employed in the State of Washington [For Mr. Sievert only, Section 5.14 is replaced in its entirety with the following: Governing Law. The Grant Notice and this Agreement will be governed by and interpreted in accordance with the laws of the State of Delaware, disregarding any state’s choice-of-law principles requiring the application of a jurisdiction’s laws other than the State of Delaware.]
5.15Section 409A.
(a)This Agreement shall be interpreted in accordance with the requirements of Section 409A. Notwithstanding any provision of this Agreement, the Company may adopt such amendments to this Agreement or adopt other policies and procedures (including amendments, policies and procedures with retroactive effect), or take any other actions, that the Administrator determines are necessary or appropriate to avoid the imposition of taxes under Section 409A, provided, however, that this Section 5.15 shall not create an obligation on the part of the Company to adopt any such amendment, policy or procedure or take any such other action, nor shall the Company have any liability for failing to do so. To the extent that any payment window spans two calendar years, Participant shall have no discretion over or ability to control the actual year in which payment is made.
(b)    Notwithstanding anything to the contrary in this Agreement, no amounts that constitute “non-qualified deferred compensation” (within the meaning of Section 409A) shall be paid to Participant under this Agreement during the six (6)-month period following Participant’s “separation from service” to the extent that the Administrator determines that Participant is a “specified employee” (each within the meaning of Section 409A) at the time of such separation from service and that paying such amounts at the time or times indicated in this Agreement would be a prohibited distribution under Section 409A(a)(2)(b)(i). If the payment of any such amounts is delayed as a result of the previous sentence, then on the first business day following the end of such six (6)-month period (or such earlier date upon which such amount can be paid under Section 409A without being subject to such additional taxes), the Company shall pay to Participant in a lump-sum all amounts that would have otherwise been payable to Participant during such six (6)-month period under this Agreement.
5.16Titles. Titles are provided herein for convenience only and are not to serve as a basis for interpretation or construction of this Agreement.
* * * * *



5




EXHIBIT B
PERFORMANCE-VESTING CONDITIONS
6



EX-10.4 5 tmus06302023ex104.htm TMUS EXHIBIT 10.4 Document

EXHIBIT 10.4
T-MOBILE US, INC.
2023 INCENTIVE AWARD PLAN

RESTRICTED STOCK UNIT GRANT NOTICE
(TIME-VESTING, NON-AFFILIATED DIRECTOR – ANNUAL AWARD)
T-Mobile US, Inc., a Delaware corporation (the “Company”), has granted to the participant listed below (“Participant”) the Restricted Stock Units (the “RSUs”) described in this Restricted Stock Unit Grant Notice (this “Grant Notice”), subject to the terms and conditions of the T-Mobile US, Inc. 2023 Incentive Award Plan (as amended from time to time, the “Plan”) and the Restricted Stock Unit Agreement attached hereto as Exhibit A (the “Agreement”), both of which are incorporated into this Grant Notice by reference. Capitalized terms not specifically defined in this Grant Notice or the Agreement have the meanings given to them in the Plan.
Participant: [____]
Grant Date: [____]
Number of RSUs: [____]1
Vesting Schedule:
(a)One hundred percent (100%) of the RSUs granted hereby shall vest on the first anniversary of the Grant Date (the “Vesting Date”), subject to Participant’s continued status as a Service Provider through the Vesting Date.
(b)Notwithstanding the foregoing:
(i)If Participant incurs a Termination of Service due to Participant’s death or Disability, any then-unvested RSUs shall vest upon such Termination of Service.
(ii)If Participant incurs a Termination of Service at the next annual meeting of stockholders of the Company to occur following the Grant Date (e.g., because Participant does not stand for re-election to the Board or otherwise resigns as of the date of such annual meeting), and if the date of such annual meeting occurs prior to the Vesting Date, then any then-unvested RSUs otherwise scheduled to become vested on the Vesting Date shall remain outstanding following Participant’s Termination of Service and shall become vested as of the Vesting Date.
(iii)If a Change in Control occurs and Participant has not incurred a Termination of Service prior to such Change in Control, any then-unvested RSUs shall vest as of immediately prior to the Change in Control in accordance with Section 8.3(a) of the Plan.

1 Note: The number of RSUs is based on a “divisor price”, which is the closing price of the Common Stock on the Grant Date.




Participant must accept this Agreement electronically pursuant to the online acceptance procedure established by the Company within ninety (90) days after the Agreement is presented to Participant for review. If Participant fails to accept the RSUs within such ninety (90)-day period, the Company may, in its sole discretion, rescind the RSUs in their entirety. By accepting (whether in writing, electronically or otherwise) the RSUs, Participant agrees to be bound by the terms of this Grant Notice, the Plan and the Agreement. Participant has reviewed the Plan, this Grant Notice and the Agreement in their entirety, has had an opportunity to obtain the advice of counsel prior to executing this Grant Notice and fully understands all provisions of the Plan, this Grant Notice and the Agreement. Participant hereby agrees to accept as binding, conclusive and final all decisions or interpretations of the Administrator upon any questions arising under the Plan, this Grant Notice or the Agreement.





RESTRICTED STOCK UNIT AGREEMENT
Capitalized terms not specifically defined in this Restricted Stock Unit Agreement (this “Agreement”) have the meanings specified in the Grant Notice or, if not defined in the Grant Notice, in the Plan.
ARTICLE I.
    GENERAL
1.1Award of RSUs. The Company has granted the RSUs to Participant effective as of the Grant Date set forth in the Grant Notice (the “Grant Date”). Each RSU represents the right to receive one Share, as set forth in this Agreement. Participant will have no right to the distribution of any Shares until the time (if ever) the RSUs have vested.
1.2Incorporation of Terms of Plan. The RSUs are subject to the terms and conditions set forth in this Agreement and the Plan, which is incorporated herein by reference. In the event of any inconsistency between the Plan and this Agreement, the terms of the Plan will control, unless it is expressly specified in this Agreement or the Grant Notice that the specific provision of the Plan will not apply. For clarity, the foregoing sentence shall not limit the applicability of any additive language contained in this Agreement which provides supplemental or additional terms not inconsistent with the Plan.
1.3Unsecured Promise. The RSUs will at all times prior to settlement represent an unsecured Company obligation payable only from the Company’s general assets.
ARTICLE II.
VESTING; FORFEITURE AND SETTLEMENT
2.1Vesting; Forfeiture. The RSUs will vest according to the vesting schedule in the Grant Notice. Except as otherwise set forth in the Grant Notice, the Plan or this Agreement, and unless the Administrator otherwise determines, in the event of Participant’s Termination of Service for any reason, all unvested RSUs will immediately and automatically be cancelled and forfeited (after taking into consideration any accelerated vesting which may occur in connection with such Termination of Service, if any) and Participant shall have no further right to or interest in such cancelled and forfeited RSUs.
2.2Settlement.
(a)RSUs that vest will be paid in Shares as soon as administratively practicable after the vesting of the applicable RSU, but in no event later than the earlier of (i) ninety (90) days following the date on which the applicable RSU vests or (ii) March 15th of the calendar year immediately following the calendar year in which the applicable RSU vests.
(b)Notwithstanding the foregoing, the Company may delay any payment under this Agreement that the Company reasonably determines would violate Applicable Law or an applicable provision of the Plan until the earliest date the Company reasonably determines the making of the payment will not cause such a violation (in accordance with Treasury Regulation Section 1.409A-2(b)(7)(ii)); provided, that the Company reasonably believes the delay will not result in the imposition of excise taxes under Section 409A.
ARTICLE III.
TAXATION AND TAX WITHHOLDING
3.1Representation. Participant represents to the Company that Participant has reviewed with Participant’s own tax advisors the tax consequences of the RSUs and the transactions contemplated by the Grant Notice and this Agreement. Participant is relying solely on such advisors and not on any statements or representations of the Company or any of its Affiliates or their respective agents.



3.2Tax Withholding.
(a)Subject to Section 4.2(b) below and Section 9.5 of the Plan, the Company will have the authority and the right to deduct or withhold, or require Participant to remit to the Company, an amount sufficient to satisfy all federal, state, local and foreign taxes required by Applicable Law to be withheld in connection with the vesting or settlement of the RSUs or any other taxable event related to the RSUs, including, without limitation, the authority to deduct such amounts from other compensation payable to Participant by the Company.
(b)Unless the Company otherwise determines, the Company shall withhold, or cause to be withheld, in satisfaction of any applicable withholding tax obligations and in accordance with Section 9.5 of the Plan, a number of Shares otherwise issuable upon settlement of the RSUs having a fair market value not exceeding the aggregate amount of such withholding tax liabilities based on the minimum individual statutory withholding rates in Participant’s applicable jurisdictions for federal, state, local and foreign income tax and payroll tax purposes that are applicable to such taxable income.
(c)    Participant acknowledges that Participant is ultimately liable and responsible for all taxes owed in connection with the RSUs, regardless of any action the Company or any Affiliate takes with respect to any tax withholding obligations that arise in connection with the RSUs. Neither the Company nor any Affiliate makes any representation or undertaking regarding the treatment of any tax withholding in connection with the grant, vesting or payment of the RSUs or the subsequent sale of Shares. The Company and its Affiliates do not commit and are under no obligation to structure the RSUs to reduce or eliminate Participant’s tax liability.
ARTICLE IV.
OTHER PROVISIONS
4.1Adjustments. Participant acknowledges that the RSUs and the Shares subject to the RSUs are subject to adjustment, modification and termination in certain events as provided in this Agreement and the Plan.
4.2Clawback. The RSUs and the Shares issuable hereunder shall be subject to any clawback or recoupment policy in effect on the Grant Date or as may be adopted or maintained by the Company following the Grant Date, including the Dodd-Frank Wall Street Reform and Consumer Protection Act and any rules or regulations promulgated thereunder.
4.3Notices. Any notice to be given under the terms of this Agreement to the Company must be in writing and addressed to the Company in care of the Company’s Head of Stock Compensation at the Company’s principal office or the Head of Stock Compensation’s then-current email address or facsimile number. Any notice to be given under the terms of this Agreement to Participant must be in writing and addressed to Participant (or, if Participant is then deceased, to the Designated Beneficiary) at Participant’s last known mailing address, email address or facsimile number in the Company’s personnel files. By a notice given pursuant to this Section, either party may designate a different address for notices to be given to that party. Any notice will be deemed duly given when actually received, when sent by email, when sent by certified mail (return receipt requested) and deposited with postage prepaid in a post office or branch post office regularly maintained by the United States Postal Service, when delivered by a nationally recognized express shipping company or upon receipt of a facsimile transmission confirmation.
4.4Arbitration. The Company and Participant shall make a good faith attempt to resolve any and all claims and disputes regarding the RSUs, the Grant Notice or this Agreement in accordance with any dispute resolution adopted by the Company before resorting to any other dispute resolution procedure. If the claim or dispute is not resolved in that manner and involves any rights or obligations under the Grant Notice and/or this Agreement, then the claim or dispute will be determined by arbitration in accordance with the then-current American Arbitration Association (“AAA”) national rules for the resolution of employment disputes by arbitration, except as modified herein. The arbitration will be conducted by a sole neutral arbitrator who has had both training and experience as an arbitrator of employee compensation matters. If the Company and Participant cannot agree on an arbitrator, then the arbitrator will be selected by the AAA applying the criteria in this Section 5.4. Reasonable discovery will be permitted and the arbitrator may decide any issue as to discovery. The arbitrator may decide any issue as to whether or as to the extent to which, any dispute is subject to the dispute resolution provisions of this Section 5.4. The arbitrator may award only relief at law contemplated under the Grant Notice, this Agreement and the Plan and the arbitrator may not award incidental, consequential or punitive damages, attorney’s fees or any form or equitable relief, to either party. The arbitrator must base the arbitration award on the provisions of this Section 5.4 and Applicable Law and must render the award in writing, including an explanation of the reasons for the award. Judgment upon the award may be entered by any court having jurisdiction of the matter, and the decision of the arbitrator will be final and binding. The statute of limitations applicable to the commencement of a lawsuit will apply to the commencement of an arbitration. The arbitrator’s fees will be paid in equal portions by the Company and Participant, unless the Company agrees to pay all such fees.




4.5Venue. Any arbitration, legal or equitable action or any proceeding arising directly, indirectly, or otherwise in connection with, out of, related to or from the Grant Notice or this Agreement, or any provision thereof or hereof, shall exclusively be filed and adjudicated in King County, Washington and no other venue.
4.6Conformity to Securities Laws. Participant acknowledges that the Plan, the Grant Notice and this Agreement are intended to conform to the extent necessary with all Applicable Laws and, to the extent Applicable Laws permit, will be deemed amended as necessary to conform to Applicable Laws.
4.7Successors and Assigns. The Company may assign any of its rights under this Agreement to single or multiple assignees, and this Agreement will inure to the benefit of the successors and assigns of the Company. Subject to the restrictions on transfer set forth in this Agreement or the Plan, this Agreement will be binding upon and inure to the benefit of the heirs, legatees, legal representatives, successors and assigns of the parties hereto.
4.8Limitations Applicable to Section 16 Persons. Notwithstanding any other provision of the Plan or this Agreement, if Participant is subject to Section 16 of the Exchange Act, the Plan, the Grant Notice, this Agreement and the RSUs will be subject to any additional limitations set forth in any applicable exemptive rule under Section 16 of the Exchange Act (including any amendment to Rule 16b-3) that are requirements for the application of such exemptive rule. To the extent Applicable Laws permit, this Agreement will be deemed amended as necessary to conform to such applicable exemptive rule.
4.9Entire Agreement; Amendment. The Plan, the Grant Notice and this Agreement (including any exhibit hereto) constitute the entire agreement of the parties and supersede in their entirety all prior undertakings and agreements of the Company and Participant with respect to the subject matter hereof. To the extent permitted by the Plan, the Grant Notice and this Agreement may be wholly or partially amended or otherwise modified, suspended or terminated at any time or from time to time by the Administrator or the Board; provided, however, that except as may otherwise be provided by the Plan, no amendment, modification, suspension or termination of this Agreement shall materially and adversely affect the RSUs or without the written consent of Participant.
4.10Severability. If any portion of the Grant Notice or this Agreement or any action taken under the Grant Notice or this Agreement, in any case is held illegal or invalid for any reason, the illegality or invalidity will not affect the remaining parts of the Grant Notice and/or this Agreement (as applicable), and the Grant Notice and/or this Agreement (as applicable) will be construed and enforced as if the illegal or invalid provisions had been excluded, and the illegal or invalid action will be null and void.
4.11Limitation on Participant’s Rights. Participation in the Plan confers no rights or interests other than as herein provided. This Agreement creates only a contractual obligation on the part of the Company as to amounts payable and may not be construed as creating a trust. Neither the Plan nor any underlying program, in and of itself, has any assets. Participant will have only the rights of a general unsecured creditor of the Company with respect to amounts credited and benefits payable, if any, with respect to the RSUs, and rights no greater than the right to receive cash or the Shares as a general unsecured creditor with respect to the RSUs, as and when settled pursuant to the terms of this Agreement.




4.12Not a Contract of Employment or Service. Nothing in the Plan, the Grant Notice or this Agreement confers upon Participant any right to continue in the employ or service of the Company or its Affiliate or interferes with or restricts in any way the rights of the Company and its Affiliates, which rights are hereby expressly reserved, to discharge or terminate the services of Participant at any time for any reason whatsoever, with or without Cause, except to the extent expressly provided otherwise in a written agreement between the Company or an Affiliate and Participant.
4.13Counterparts. The Grant Notice may be executed in one or more counterparts, including by way of any electronic signature, subject to Applicable Law, each of which will be deemed an original and all of which together will constitute one instrument.
4.14Governing Law. The Grant Notice and this Agreement will be governed by and interpreted in accordance with the laws of the State of Delaware, disregarding any state’s choice-of-law principles requiring the application of a jurisdiction’s laws other than the State of Delaware.
4.15Section 409A.
(a)This Agreement shall be interpreted in accordance with the requirements of Section 409A.  Notwithstanding any provision of this Agreement, the Company may adopt such amendments to this Agreement or adopt other policies and procedures (including amendments, policies and procedures with retroactive effect), or take any other actions, that the Administrator determines are necessary or appropriate to avoid the imposition of taxes under Section 409A, provided, however, that this Section 5.15 shall not create an obligation on the part of the Company to adopt any such amendment, policy or procedure or take any such other action, nor shall the Company have any liability for failing to do so. To the extent that any payment window spans two calendar years, Participant shall have no discretion over or ability to control the actual year in which payment is made. 
(b)    Notwithstanding anything to the contrary in this Agreement, no amounts that constitute “non-qualified deferred compensation” (within the meaning of Section 409A) shall be paid to Participant under this Agreement during the six (6)-month period following Participant’s “separation from service” to the extent that the Administrator determines that Participant is a “specified employee” (each within the meaning of Section 409A) at the time of such separation from service and that paying such amounts at the time or times indicated in this Agreement would be a prohibited distribution under Section 409A(a)(2)(b)(i). If the payment of any such amounts is delayed as a result of the previous sentence, then on the first business day following the end of such six (6)-month period (or such earlier date upon which such amount can be paid under Section 409A without being subject to such additional taxes), the Company shall pay to Participant in a lump-sum all amounts that would have otherwise been payable to Participant during such six (6)-month period under this Agreement.

4.16Titles. Titles are provided herein for convenience only and are not to serve as a basis for interpretation or construction of this Agreement.
* * * * *





EX-22.1 6 tmus06302023ex221.htm TMUS EXHIBIT 22.1 Document
EXHIBIT 22.1
Subsidiary Guarantors and Issuers of Guaranteed Securities
Guaranteed Securities

The following securities (collectively, the “T-Mobile USA Senior Notes”) issued by T-Mobile USA, Inc., a Delaware corporation and wholly-owned subsidiary of T-Mobile US, Inc. (the “Company”), were outstanding as of June 30, 2023, including those that may no longer be subject to reporting as provided by Regulation S-X Rule 13-01:

Description of Notes
3.500% senior notes due 2025
1.500% senior notes due 2026
2.250% senior notes due 2026
2.625% senior notes due 2026
3.750% senior notes due 2027
5.375% senior notes due 2027
4.750% senior notes due 2028
4.750% senior notes due 2028-1 held by affiliate
2.050% senior notes due 2028
4.950% senior notes due 2028
4.800% senior notes due 2028
2.625% senior notes due 2029
2.400% senior notes due 2029
3.375% senior notes due 2029
3.875% senior notes due 2030
2.550% senior notes due 2031
2.875% senior notes due 2031
3.500% senior notes due 2031
2.250% senior notes due 2031
2.700% senior notes due 2032
5.200% senior notes due 2033
5.050% senior notes due 2033
4.375% senior notes due 2040
3.000% senior notes due 2041
4.500% senior notes due 2050
3.300% senior notes due 2051
3.400% senior notes due 2052
5.650% senior notes due 2053
5.750% Senior Notes due 2054
3.600% senior notes due 2060
5.800% senior notes due 2062

        


The following securities (collectively, the “Sprint Senior Notes”) issued by Sprint LLC, a Delaware limited liability company and wholly-owned subsidiary of the Company, were outstanding as of June 30, 2023, including those that may no longer be subject to reporting as provided by Regulation S-X Rule 13-01:

Description of Notes
7.875% senior notes due 2023
7.125% senior notes due 2024
7.625% senior notes due 2025
7.625% senior notes due 2026

The following securities (collectively, the “Sprint Capital Corporation Senior Notes”) issued by Sprint Capital Corporation, a Delaware corporation and wholly-owned subsidiary of the Company, were outstanding as of June 30, 2023, including those that may no longer be subject to reporting as provided by Regulation S-X Rule 13-01:

Description of Notes
6.875% senior notes due 2028
8.750% senior notes due 2032




Obligors

As of June 30, 2023, the obligors under the T-Mobile USA Senior Notes consisted of the Company, as a guarantor, and its subsidiaries listed in the following table.

Name of Subsidiary Jurisdiction of Organization Obligor Type
American Telecasting of Seattle, LLC Delaware Guarantor
APC Realty and Equipment Company, LLC Delaware Guarantor
Assurance Wireless of South Carolina, LLC Delaware Guarantor
Assurance Wireless USA, L.P. Delaware Guarantor
ATI Sub, LLC Delaware Guarantor
Clear Wireless LLC Nevada Guarantor
Clearwire Communications LLC Delaware Guarantor
Clearwire Legacy LLC Delaware Guarantor
Clearwire Spectrum Holdings II LLC Nevada Guarantor
Clearwire Spectrum Holdings III LLC Nevada Guarantor
Clearwire Spectrum Holdings LLC Nevada Guarantor
Fixed Wireless Holdings, LLC Delaware Guarantor
IBSV LLC Delaware Guarantor
MetroPCS California, LLC Delaware Guarantor
MetroPCS Florida, LLC Delaware Guarantor
MetroPCS Georgia, LLC Delaware Guarantor
MetroPCS Massachusetts, LLC Delaware Guarantor
MetroPCS Michigan, LLC Delaware Guarantor
MetroPCS Nevada, LLC Delaware Guarantor
MetroPCS New York, LLC Delaware Guarantor
MetroPCS Pennsylvania, LLC Delaware Guarantor
MetroPCS Texas, LLC Delaware Guarantor
Nextel Retail Stores, LLC Delaware Guarantor
Nextel South Corp. Georgia Guarantor
Nextel Systems, LLC Delaware Guarantor
Nextel West Corp. Delaware Guarantor
NSAC, LLC Delaware Guarantor
PRWireless PR, LLC Delaware Guarantor
PushSpring, LLC Delaware Guarantor
Sprint Capital Corporation Delaware Guarantor
Sprint Communications LLC Delaware Guarantor
Sprint LLC Delaware Guarantor
Sprint PCS Assets, L.L.C. Delaware Guarantor
Sprint Solutions LLC Delaware Guarantor
Sprint Spectrum LLC Delaware Guarantor
Sprint Spectrum Realty Company, LLC Delaware Guarantor
SprintCom LLC Kansas Guarantor


T-Mobile Central LLC Delaware Guarantor
T-Mobile Financial LLC Delaware Guarantor
T-Mobile Innovations LLC Delaware Guarantor
T-Mobile Leasing LLC Delaware Guarantor
T-Mobile License LLC Delaware Guarantor
T-Mobile Northeast LLC Delaware Guarantor
T-Mobile Puerto Rico Holdings LLC Delaware Guarantor
T-Mobile Puerto Rico LLC Delaware Guarantor
T-Mobile Resources LLC Delaware Guarantor
T-Mobile South LLC Delaware Guarantor
T-Mobile USA, Inc. Delaware Issuer
T-Mobile West LLC Delaware Guarantor
TDI Acquisition Sub, LLC Delaware Guarantor
TMUS International LLC Delaware Guarantor
TVN Ventures LLC Delaware Guarantor
VMU GP, LLC Delaware Guarantor
WBSY Licensing, LLC Delaware Guarantor

As of June 30, 2023, the obligors under the Sprint Senior Notes consisted of the Company, as a guarantor; Sprint LLC (a Delaware limited liability company), as issuer and T-Mobile USA, Inc. (a Delaware corporation) and Sprint Communications LLC (a Delaware limited liability company) as guarantors.

As of June 30, 2023, the obligors under the Sprint Capital Corporation Senior Notes consisted of the Company, as a guarantor; Sprint Capital Corporation (a Delaware corporation), as issuer and T-Mobile USA, Inc. (a Delaware corporation), Sprint LLC (a Delaware limited liability company) and Sprint Communications LLC (a Delaware limited liability company) as guarantors.



EX-31.1 7 tmus06302023ex311.htm TMUS EXHIBIT 31.1 Document

EXHIBIT 31.1

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

I, G. Michael Sievert, certify that:

1.I have reviewed this Quarterly Report on Form 10-Q of T-Mobile US, Inc.;

2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a)Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b)Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c)Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d)Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and

5.The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):

(a)All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

(b)Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

July 27, 2023
/s/ G. Michael Sievert
G. Michael Sievert
Chief Executive Officer


EX-31.2 8 tmus06302023ex312.htm TMUS EXHIBIT 31.2 Document

EXHIBIT 31.2

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

I, Peter Osvaldik, certify that:

1.I have reviewed this Quarterly Report on Form 10-Q of T-Mobile US, Inc.;

2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a)Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b)Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c)Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d)Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and

5.The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):

(a)All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

(b)Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

July 27, 2023
/s/ Peter Osvaldik
Peter Osvaldik
Executive Vice President and Chief Financial Officer


EX-32.1 9 tmus06302023ex321.htm TMUS EXHIBIT 32.1 Document

EXHIBIT 32.1

Certification of Chief Executive Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

In connection with the Quarterly Report of T-Mobile US, Inc. (the “Company”), on Form 10-Q for the quarter ended June 30, 2023, as filed with the Securities and Exchange Commission (the “Report”), G. Michael Sievert, Chief Executive Officer of the Company, does hereby certify, pursuant to § 906 of the Sarbanes-Oxley Act of 2002 (18 U.S.C. § 1350), that to his knowledge:

1.The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

2.The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

July 27, 2023
/s/ G. Michael Sievert
G. Michael Sievert
Chief Executive Officer


EX-32.2 10 tmus06302023ex322.htm TMUS EXHIBIT 32.2 Document

EXHIBIT 32.2

Certification of Chief Financial Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

In connection with the Quarterly Report of T-Mobile US, Inc. (the “Company”), on Form 10-Q for the quarter ended June 30, 2023, as filed with the Securities and Exchange Commission (the “Report”), Peter Osvaldik, Executive Vice President and Chief Financial Officer of the Company, does hereby certify, pursuant to § 906 of the Sarbanes-Oxley Act of 2002 (18 U.S.C. § 1350), that to his knowledge:

1.The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

2.The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

July 27, 2023
/s/ Peter Osvaldik
Peter Osvaldik
Executive Vice President and Chief Financial Officer