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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 September 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 October 20, 2023
Common Stock, par value $0.00001 per share 1,156,475,060 



1

T-Mobile US, Inc.
Form 10-Q
For the Quarter Ended September 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) September 30,
2023		 December 31,
2022
Assets
Current assets
Cash and cash equivalents $ 5,030  $ 4,507 
Accounts receivable, net of allowance for credit losses of $166 and $167
 4,500  4,445 
Equipment installment plan receivables, net of allowance for credit losses and imputed discount of $610 and $667
 4,470  5,123 
Inventory 1,685  1,884 
Prepaid expenses 712  673 
Other current assets 2,272  2,435 
Total current assets 18,669  19,067 
Property and equipment, net 41,080  42,086 
Operating lease right-of-use assets 27,568  28,715 
Financing lease right-of-use assets 3,390  3,257 
Goodwill 12,234  12,234 
Spectrum licenses 96,689  95,798 
Other intangible assets, net 2,824  3,508 
Equipment installment plan receivables due after one year, net of allowance for credit losses and imputed discount of $130 and $144
 1,879  2,546 
Other assets 4,246  4,127 
Total assets $ 208,579  $ 211,338 
Liabilities and Stockholders' Equity
Current liabilities
Accounts payable and accrued liabilities $ 9,665  $ 12,275 
Short-term debt 3,437  5,164 
Deferred revenue 830  780 
Short-term operating lease liabilities 3,545  3,512 
Short-term financing lease liabilities 1,286  1,161 
Other current liabilities 2,948  1,850 
Total current liabilities 21,711  24,742 
Long-term debt 70,365  65,301 
Long-term debt to affiliates 1,496  1,495 
Tower obligations 3,819  3,934 
Deferred tax liabilities 12,900  10,884 
Operating lease liabilities 28,677  29,855 
Financing lease liabilities 1,273  1,370 
Other long-term liabilities 3,640  4,101 
Total long-term liabilities 122,170  116,940 
Commitments and contingencies (Note 13)
Stockholders' equity
Common stock, par value $0.00001 per share, 2,000,000,000 shares authorized; 1,262,375,765 and 1,256,876,527 shares issued, 1,161,979,708 and 1,233,960,078 shares outstanding
 —  — 
Additional paid-in capital 74,404  73,941 
Treasury stock, at cost, 100,396,057 and 22,916,449 shares
 (14,092) (3,016)
Accumulated other comprehensive loss (949) (1,046)
Retained earnings (accumulated deficit) 5,335  (223)
Total stockholders' equity 64,698  69,656 
Total liabilities and stockholders' equity $ 208,579  $ 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
(Unaudited)

Three Months Ended September 30, Nine Months Ended September 30,
(in millions, except share and per share amounts) 2023 2022 2023 2022
Revenues
Postpaid revenues $ 12,288  $ 11,548  $ 36,220  $ 34,194 
Prepaid revenues 2,473  2,484  7,334  7,408 
Wholesale and other service revenues 1,153  1,329  3,644  4,203 
Total service revenues 15,914  15,361  47,198  45,805 
Equipment revenues 3,076  3,855  9,964  12,679 
Other revenues 262  261  918  814 
Total revenues 19,252  19,477  58,080  59,298 
Operating expenses
Cost of services, exclusive of depreciation and amortization shown separately below 2,886  3,712  8,863  11,499 
Cost of equipment sales, exclusive of depreciation and amortization shown separately below 4,249  4,982  12,925  16,036 
Selling, general and administrative 5,334  5,118  16,031  16,030 
Impairment expense —  —  —  477 
Loss (gain) on disposal group held for sale —  1,071  (25) 1,071 
Depreciation and amortization 3,187  3,313  9,500  10,389 
Total operating expenses 15,656  18,196  47,294  55,502 
Operating income 3,596  1,281  10,786  3,796 
Other expense, net
Interest expense, net (790) (827) (2,486) (2,542)
Other income (expense), net 41  (3) 56  (35)
Total other expense, net (749) (830) (2,430) (2,577)
Income before income taxes 2,847  451  8,356  1,219 
Income tax (expense) benefit (705) 57  (2,053) (106)
Net income $ 2,142  $ 508  $ 6,303  $ 1,113 
Net income $ 2,142  $ 508  $ 6,303  $ 1,113 
Other comprehensive income, net of tax
Reclassification of loss from cash flow hedges, net of tax effect of $15, $13, $42 and $39
 41  39  121  113 
Unrealized (loss) gain on foreign currency translation adjustment, net of tax effect of $0, $0, $0 and $(1)
 —  (7) 9  (11)
Amortization of actuarial gain, net of tax effect of $(11), $0, $(11) and $0
 (33) —  (33) — 
Other comprehensive income 8  32  97  102 
Total comprehensive income $ 2,150  $ 540  $ 6,400  $ 1,215 
Earnings per share
Basic $ 1.83  $ 0.40  $ 5.28  $ 0.89 
Diluted $ 1.82  $ 0.40  $ 5.26  $ 0.88 
Weighted-average shares outstanding
Basic 1,171,336,373  1,253,873,429  1,194,497,722  1,252,783,140 
Diluted 1,174,390,472  1,259,210,271  1,198,290,141  1,258,061,478 
The accompanying notes are an integral part of these condensed consolidated financial statements.
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Index for Notes to the Condensed Consolidated Financial Statements
T-Mobile US, Inc.
Condensed Consolidated Statements of Cash Flows
(Unaudited)

Three Months Ended September 30, Nine Months Ended September 30,
(in millions) 2023 2022 2023 2022
Operating activities
Net income $ 2,142  $ 508  $ 6,303  $ 1,113 
Adjustments to reconcile net income to net cash provided by operating activities
Depreciation and amortization 3,187  3,313  9,500  10,389 
Stock-based compensation expense 156  150  500  445 
Deferred income tax expense (benefit) 671  (36) 1,985  73 
Bad debt expense 228  239  663  760 
Losses from sales of receivables 46  60  135  168 
Impairment expense —  —  —  477 
Loss on remeasurement of disposal group held for sale —  371  9  371 
Changes in operating assets and liabilities
Accounts receivable (1,046) (1,224) (3,828) (3,781)
Equipment installment plan receivables 165  (77) 563  (801)
Inventory (309) (7) 182  384 
Operating lease right-of-use assets 886  1,113  2,823  4,275 
Other current and long-term assets (135) (334) 77  (450)
Accounts payable and accrued liabilities 208  342  (1,538) 319 
Short- and long-term operating lease liabilities (692) (700) (2,884) (2,218)
Other current and long-term liabilities (260) 550  (909) 587 
Other, net 47  123  119  334 
Net cash provided by operating activities 5,294  4,391  13,700  12,445 
Investing activities
Purchases of property and equipment, including capitalized interest of $(66), $(16), $(94) and $(44)
 (2,424) (3,634) (8,214) (10,587)
Purchases of spectrum licenses and other intangible assets, including deposits (119) (360) (225) (3,319)
Proceeds from sales of tower sites 2  —  10  — 
Proceeds related to beneficial interests in securitization transactions 1,131  1,308  3,785  3,614 
Acquisition of companies, net of cash and restricted cash acquired —  —  —  (52)
Other, net 17  131  36  138 
Net cash used in investing activities (1,393) (2,555) (4,608) (10,206)
Financing activities
Proceeds from issuance of long-term debt 1,983  2,972  8,446  2,972 
Repayments of financing lease obligations (304) (311) (914) (901)
Repayments of long-term debt (4,474) (132) (4,828) (3,145)
Repurchases of common stock (2,681) (557) (10,891) (557)
Tax withholdings on share-based awards (10) (10) (267) (225)
Other, net (24) (35) (113) (97)
Net cash (used in) provided by financing activities (5,510) 1,927  (8,567) (1,953)
Change in cash and cash equivalents, including restricted cash and cash held for sale (1,609) 3,763  525  286 
Cash and cash equivalents, including restricted cash and cash held for sale
Beginning of period 6,808  3,226  4,674  6,703 
End of period $ 5,199  $ 6,989  $ 5,199  $ 6,989 
The accompanying notes are an integral part of these condensed consolidated financial statements.
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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 June 30, 2023 1,180,398,748  81,090,539  $ (11,392) $ 74,161  $ (957) $ 3,938  $ 65,750 
Net income —  —  —  —  —  2,142  2,142 
Dividends declared ($0.65 per share)
 —  —  —  —  —  (745) (745)
Other comprehensive income —  —  —  —  8  —  8 
Stock-based compensation —  —  —  169  —  —  169 
Stock issued for employee stock purchase plan 708,049  —  —  84  —  —  84 
Issuance of vested restricted stock units 231,246  —  —  —  —  —  — 
Shares withheld related to net share settlement of stock awards and stock options (76,318) —  —  (10) —  —  (10)
Repurchases of common stock (19,313,159) 19,313,159  (2,702) —  —  —  (2,702)
Other, net 31,142  (7,641) 2  —  —  —  2 
Balance as of September 30, 2023 1,161,979,708  100,396,057  $ (14,092) $ 74,404  $ (949) $ 5,335  $ 64,698 
Balance as of December 31, 2022 1,233,960,078  22,916,449  $ (3,016) $ 73,941  $ (1,046) $ (223) $ 69,656 
Net income —  —  —  —  —  6,303  6,303 
Dividends declared ($0.65 per share)
 —  —  —  —  —  (745) (745)
Other comprehensive income —  —  —  —  97  —  97 
Stock-based compensation —  —  —  509  —  —  509 
Stock issued for employee stock purchase plan 1,771,475  —  —  210  —  —  210 
Issuance of vested restricted stock units 5,397,316  —  —  —  —  —  — 
Shares withheld related to net share settlement of stock awards and stock options (1,823,566) —  —  (267) —  —  (267)
Repurchases of common stock (77,460,937) 77,460,937  (11,073) —  —  —  (11,073)
Other, net 135,342  18,671  (3) 11  —  —  8 
Balance as of September 30, 2023 1,161,979,708  100,396,057  $ (14,092) $ 74,404  $ (949) $ 5,335  $ 64,698 
The accompanying notes are an integral part of these condensed consolidated financial statements.
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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 Accumulated Deficit Total Stockholders' Equity
Balance as of June 30, 2022 1,254,010,072  1,564,549  $ (16) $ 73,552  $ (1,295) $ (2,207) $ 70,034 
Net income —  —  —  —  —  508  508 
Other comprehensive income —  —  —  —  32  —  32 
Stock-based compensation —  —  —  165  —  —  165 
Stock issued for employee stock purchase plan 802,361  —  —  89  —  —  89 
Issuance of vested restricted stock units 219,301  —  —  —  —  —  — 
Shares withheld related to net share settlement of stock awards and stock options (67,575) —  —  (10) —  —  (10)
Repurchases of common stock (4,892,315) 4,892,315  (669) —  —  —  (669)
Other, net 32,582  (5,968) —  1  —  —  1 
Balance as of September 30, 2022 1,250,104,426  6,450,896  $ (685) $ 73,797  $ (1,263) $ (1,699) $ 70,150 
Balance as of December 31, 2021 1,249,213,681  1,537,468  $ (13) $ 73,292  $ (1,365) $ (2,812) $ 69,102 
Net income —  —  —  —  —  1,113  1,113 
Other comprehensive income —  —  —  —  102  —  102 
Stock-based compensation —  —  —  490  —  —  490 
Stock issued for employee stock purchase plan 2,079,086  —  —  227  —  —  227 
Issuance of vested restricted stock units 5,380,712  —  —  —  —  —  — 
Shares withheld related to net share settlement of stock awards and stock options (1,772,442) —  —  (225) —  —  (225)
Repurchases of common stock (4,892,315) 4,892,315  (669) —  —  —  (669)
Other, net 95,704  21,113  (3) 13  —  —  10 
Balance as of September 30, 2022 1,250,104,426  6,450,896  $ (685) $ 73,797  $ (1,263) $ (1,699) $ 70,150 
The accompanying notes are an integral part of these condensed consolidated financial statements.

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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 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. 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.

Dividends

On September 6, 2023, our Board of Directors authorized a stockholder return program of up to $19.0 billion that will run through December 31, 2024 (the “2023-2024 Stockholder Return Program”). The 2023-2024 Stockholder Return Program is expected to consist of additional repurchases of shares of our common stock and the payment of cash dividends. The amount available under the 2023-2024 Stockholder Return Program for share repurchases will be reduced by the amount of any cash dividends declared by us.

Dividends declared are included as a reduction to Retained earnings on our Condensed Consolidated Balance Sheets. We recognize a liability for dividends declared but for which cash has not been paid in Other current liabilities on our Condensed Consolidated Balance Sheets. Dividend cash payments to stockholders will be included in Net cash (used in) provided by financing activities on our Condensed Consolidated Statements of Cash Flows. See Note 10 - Stockholder Return Programs for more information about our 2023-2024 Stockholder Return Program.

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Index for Notes to the Condensed Consolidated Financial Statements
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 nine months ended September 30, 2023.

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. Our estimate of the upfront payment is subject to Ka’ena Corporation’s underlying business performance and the timing of transaction close, and has been updated to $1.2 billion, 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 the first quarter of 2024.

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.

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Index for Notes to the Condensed Consolidated Financial Statements
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 9.9% and 8.0% as of September 30, 2023, and December 31, 2022, respectively.

The following table summarizes the EIP receivables, including imputed discounts and related allowance for credit losses:
(in millions) September 30,
2023		 December 31,
2022
EIP receivables, gross $ 7,089  $ 8,480 
Unamortized imputed discount (453) (483)
EIP receivables, net of unamortized imputed discount 6,636  7,997 
Allowance for credit losses (287) (328)
EIP receivables, net of allowance for credit losses and imputed discount $ 6,349  $ 7,669 
Classified on our condensed consolidated balance sheets as:
Equipment installment plan receivables, net of allowance for credit losses and imputed discount $ 4,470  $ 5,123 
Equipment installment plan receivables due after one year, net of allowance for credit losses and imputed discount 1,879  2,546 
EIP receivables, net of allowance for credit losses and imputed discount $ 6,349  $ 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 September 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 Total
Current - 30 days past due $ 2,419  $ 1,355  $ 1,305  $ 896  $ 368  $ 175  $ 4,092  $ 2,426  $ 6,518 
31 - 60 days past due 8  18  7  12  2  2  17  32  49 
61 - 90 days past due 5  12  5  10  1  1  11  23  34 
More than 90 days past due 5  9  5  11  2  3  12  23  35 
EIP receivables, net of unamortized imputed discount $ 2,437  $ 1,394  $ 1,322  $ 929  $ 373  $ 181  $ 4,132  $ 2,504  $ 6,636 

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.

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Index for Notes to the Condensed Consolidated Financial Statements
The following table presents write-offs of our EIP receivables by year of origination for the nine months ended September 30, 2023:
(in millions) Originated in 2023 Originated in 2022 Originated prior to 2022 Total Write-offs
Write-offs $ 84  $ 243  $ 54  $ 381 

Activity for the nine months ended September 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:
September 30, 2023 September 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 322  341  663  305  455  760 
Write-offs (323) (381) (704) (290) (375) (665)
Change in imputed discount on short-term and long-term EIP receivables N/A 120  120  N/A 146  146 
Impact on the imputed discount from sales of EIP receivables N/A (151) (151) N/A (107) (107)
Allowance for credit losses and imputed discount, end of period $ 166  $ 740  $ 906  $ 161  $ 749  $ 910 

Off-Balance-Sheet Credit Exposures

We do not have material off-balance-sheet credit exposures as of September 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 September 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) September 30,
2023		 December 31,
2022
Other current assets $ 368  $ 344 
Other assets 114  136 

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Index for Notes to the Condensed Consolidated Financial Statements
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 September 30, 2023, and December 31, 2022, the service receivable sale arrangement provided funding of $775 million.

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

The following table summarizes the carrying amounts and classification of assets, which consist primarily of the deferred purchase price, and liabilities included on our Condensed Consolidated Balance Sheets with respect to the Service BRE:
(in millions) September 30,
2023		 December 31,
2022
Other current assets $ 210  $ 214 
Other current liabilities 355  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) September 30,
2023		 December 31,
2022
Derecognized net service accounts receivable and EIP receivables $ 2,426  $ 2,410 
Other current assets 578  558 
of which, deferred purchase price 576  556 
Other long-term assets 114  136 
of which, deferred purchase price 114  136 
Other current liabilities 355  389 
Net cash proceeds since inception 1,604  1,697 
Of which:
Change in net cash proceeds during the year-to-date period (93) (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. 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 September 30, 2023, and December 31, 2022, our deferred purchase price related to the sales of service accounts receivable and EIP receivables was $690 million and $692 million, respectively.

We recognized losses from sales of receivables, including changes in fair value of the deferred purchase price, of $46 million and $60 million for the three months ended September 30, 2023 and 2022, respectively, and $135 million and $168 million for the nine months ended September 30, 2023 and 2022, respectively, in Selling, general and administrative expenses on our Condensed Consolidated Statements of Comprehensive Income.

Continuing Involvement

Pursuant to the sale arrangements described above, we have continuing involvement with the service accounts receivable and EIP receivables we sell as we service the receivables, are required to repurchase certain receivables, including ineligible receivables, aged receivables and receivables where a write-off is imminent, and may be responsible for absorbing credit losses through reduced collections on our deferred purchase price assets. We continue to service the customers and their related receivables, including facilitating customer payment collection, in exchange for a monthly servicing fee. As the receivables are sold on a revolving basis, the customer payment collections on sold receivables may be reinvested in new receivable sales. At the direction of the purchasers of the sold receivables, we apply the same policies and procedures while servicing the sold receivables as we apply to our owned receivables, and we continue to maintain normal relationships with our customers.
13
Index for Notes to the Condensed Consolidated Financial Statements

Note 5 – Spectrum License Transactions

The following table summarizes our spectrum license activity for the nine months ended September 30, 2023:
(in millions) 2023
Spectrum licenses, beginning of year $ 95,798 
Spectrum license acquisitions 85 
Spectrum licenses transferred to held for sale (2)
Costs to clear spectrum (1)
 808 
Spectrum licenses, end of period $ 96,689 
(1)As of September 30, 2023, $767 million is included in Other current liabilities on our Condensed Consolidated Balance Sheets related to accrued spectrum clearing costs.

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 nine months ended September 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 September 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, and the FCC Chairwoman has stated that it is subject to the restoration of auction authority to the FCC by Congress.

As of September 30, 2023, the activities that are necessary to get the 3.45 GHz and 2.5 GHz spectrum, acquired pursuant to FCC Auctions 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. During the three months ended September 30, 2023, we began capitalizing interest on the costs of our C-band spectrum licenses, acquired pursuant to FCC Auction 107, as we have begun development activities necessary to prepare the spectrum for its intended use.

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. Subsequent to September 30, 2023, on October 15, 2023, we and DISH entered into an amendment (the “LPA Amendment”) to the DISH License Purchase Agreement pursuant to which, among other things, the parties agreed that (1) DISH will pay us a $100 million non-refundable extension fee (in lieu of the approximately $72 million termination fee that had previously been agreed to), (2) the closing for the purchase of the spectrum licenses by DISH will occur no later than April 1, 2024, (3) if DISH has not purchased the spectrum licenses by such date for any reason (including failure to receive the required FCC approval prior to such date), then the DISH License Purchase Agreement will automatically terminate, and we will retain the $100 million extension fee, (4) if DISH does purchase the spectrum by April 1, 2024, the $100 million extension fee will be credited against the $3.6 billion purchase price, and (5) permits us to commence auction of the spectrum prior to April 1, 2024 at our discretion (and subject to DISH’s purchase right). The LPA Amendment was approved by the Court and became effective on October 23, 2023.

If DISH does not, by April 1, 2024, purchase the 800 MHz spectrum licenses, we are required, unless otherwise approved under the 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.
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Index for Notes to the Condensed Consolidated Financial Statements
Channel 51 License Co LLC and LB License Co, LLC

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

On March 30, 2023, we and the Sellers entered into Amended and Restated License Purchase Agreements pursuant to which we and the Sellers agreed to separate the transaction into two tranches of licenses, with the closings on the acquisitions of certain licenses in Chicago, Dallas and New Orleans being deferred in order to potentially expedite the regulatory approval process for the remainder of the licenses. Subsequently, on August 25, 2023, we and the Sellers entered into Amendments No. 1 to the Amended and Restated License Purchase Agreements, which deferred the closings of certain additional licenses in Chicago and Dallas into the second closing tranche. Together, the licenses with closings deferred into the second closing tranche represent $1.1 billion of the aggregate $3.5 billion cash consideration. The licenses being acquired by us, and the total consideration being paid for the licenses, remains the same under the original License Purchase Agreements and subsequent amendments.

We anticipate that the first closing will occur no earlier than the first half of 2024 and that the second closing (on the deferred licenses) will occur in late 2024 or early 2025.

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

Comcast Corporation

On September 12, 2023, we entered into a License Purchase Agreement with Comcast Corporation and its affiliate, Comcast OTR1, LLC (together with Comcast Corporation, “Comcast”), pursuant to which we will acquire spectrum in the 600 MHz band from Comcast in exchange for total cash consideration of between $1.2 billion and $3.3 billion, subject to an application for FCC approval. The licenses will be acquired without any associated networks. We anticipate the closing will occur in the first half of 2028.

The final purchase price will be determined, in the aggregate and on a per license basis, based on the set of licenses subject to the License Purchase Agreement at the time the parties make required transfer filings with the FCC. Prior to the time of such filings, Comcast has the right to remove any or all of a certain specified subset of the licenses, totaling $2.1 billion (the “Optional Sale Licenses”), from the License Purchase Agreement. The removal of any Optional Sale Licenses would reduce the final purchase price by the assigned value of each such license, from the maximum purchase price of $3.3 billion.

The licenses are subject to an exclusive leasing arrangement between us and Comcast entered into contemporaneously with the License Purchase Agreement. If Comcast elects to remove an Optional Sale License from the License Purchase Agreement, the associated lease for such Optional Sale License will terminate, but no sooner than two years from the date of the License Purchase Agreement (with us having a minimum period of time after any such termination to cease transmitting on such license’s associated spectrum).

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.

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Index for Notes to the Condensed Consolidated Financial Statements
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 September 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 September 30, 2023, and December 31, 2022, respectively.

For the three months ended September 30, 2023 and 2022, $55 million and $51 million, respectively, and for the nine months ended September 30, 2023 and 2022, $163 million and $151 million, respectively, were amortized from Accumulated other comprehensive loss into Interest expense, net, on our Condensed Consolidated Statements of Comprehensive Income. We expect to amortize $232 million of the Accumulated other comprehensive loss associated with the derivatives into Interest expense, net, over the 12 months ending September 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.

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 $690 million and $692 million as of September 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 September 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.

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Index for Notes to the Condensed Consolidated Financial Statements
The carrying amounts and fair values of our short-term and long-term debt included on our Condensed Consolidated Balance Sheets were as follows:
(in millions) Level within the Fair Value Hierarchy September 30, 2023 December 31, 2022
Carrying Amount Fair Value
Carrying Amount (1)
Fair Value (1)
Liabilities:
Senior Notes to third parties 1 $ 70,542  $ 61,198  $ 66,582  $ 59,011 
Senior Notes to affiliates 2 1,496  1,439  1,495  1,460 
Senior Secured Notes to third parties 1 2,513  2,407  3,117  2,984 
ABS Notes to third parties 2 747  739  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 nine months ended, September 30, 2023:
(in millions) December 31,
2022
Proceeds from Issuances and Borrowings (1)
Note Redemptions (1)
 Repayments
Reclassifications (1)
Other (2)
 September 30,
2023
Short-term debt $ 5,164  $ —  $ (4,250) $ (578) $ 3,236  $ (135) $ 3,437 
Long-term debt 65,301  8,446  —  —  (3,236) (146) 70,365 
Total debt to third parties 70,465  8,446  (4,250) (578) —  (281) 73,802 
Long-term debt to affiliates 1,495  —  —  —  —  1  1,496 
Total debt $ 71,960  $ 8,446  $ (4,250) $ (578) $ —  $ (280) $ 75,298 
(1)Issuances and borrowings, note redemptions 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 $77.2 billion and $71.6 billion for the three months ended September 30, 2023 and 2022, respectively, and 4.0% and 3.9% on weighted-average debt outstanding of $75.5 billion and $72.4 billion for the nine months ended September 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.

Issuances and Borrowings

During the nine months ended September 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
5.750% Senior Notes due 2034
 1,000  (6) 994  September 14, 2023
6.000% Senior Notes due 2054
 1,000  (10) 990  September 14, 2023
Total of Senior Notes issued $ 8,500  $ (54) $ 8,446 

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Index for Notes to the Condensed Consolidated Financial Statements
Note Redemptions and Repayments

During the nine months ended September 30, 2023, we made the following redemption and repayments:
(in millions) Principal Amount Repayment Date
7.875% Senior Notes due 2023
 $ 4,250  September 15, 2023
Total Redemptions $ 4,250 
4.738% Secured Series 2018-1 A-1 Notes due 2025
 $ 394  Various
5.152% Series 2018-1 A-2 Notes due 2028
 184  Various
Total Repayments $ 578 

Asset-backed Notes

Our ABS Notes are secured by $983 million 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:
(in millions) September 30,
2023		 December 31,
2022
Assets
Equipment installment plan receivables, net $ 767  $ 652 
Equipment installment plan receivables due after one year, net 151  281 
Other current assets 94  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.

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

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 supplements our other available external financing arrangements, and proceeds are expected to be used for general corporate purposes. As of September 30, 2023, there was no outstanding balance under this program.

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Index for Notes to the Condensed Consolidated Financial Statements
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. 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.

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Index for Notes to the Condensed Consolidated Financial Statements
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) September 30,
2023		 December 31,
2022
Property and equipment, net $ 2,259  $ 2,379 
Tower obligations 3,819  3,934 
Other long-term liabilities 554  554 

Future minimum payments related to the tower obligations are approximately $432 million for the 12-month period ending September 30, 2024, $780 million in total for both of the 12-month periods ending September 30, 2025 and 2026, $804 million in total for both of the 12-month periods ending September 30, 2027 and 2028, and $4.2 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 $244 million in our Operating lease liabilities as of September 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.

Postpaid service revenues, including postpaid phone revenues and postpaid other revenues, were as follows:
Three Months Ended September 30, Nine Months Ended September 30,
(in millions) 2023 2022 2023 2022
Postpaid service revenues
Postpaid phone revenues $ 10,942  $ 10,481  $ 32,393  $ 31,119 
Postpaid other revenues 1,346  1,067  3,827  3,075 
Total postpaid service revenues $ 12,288  $ 11,548  $ 36,220  $ 34,194 

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

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Index for Notes to the Condensed Consolidated Financial Statements
Contract Balances

The contract asset and contract liability balances from contracts with customers as of September 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 September 30, 2023 617  814 
Change $ 83  $ 66 

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 September 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 nine months ended September 30, 2023 and 2022 include the following:
Three Months Ended September 30, Nine Months Ended September 30,
(in millions) 2023 2022 2023 2022
Amounts included in the beginning of year contract liability balance $ 24  $ 17  $ 730  $ 702 

Remaining Performance Obligations

As of September 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 $1.5 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 September 30, 2023, the aggregate amount of the contractual minimum consideration for wholesale, roaming and service contracts is $395 million, $2.0 billion and $4.2 billion for 2023, 2024, and 2025 and beyond, respectively. These contracts have a remaining duration ranging from less than one year to eight years.

Contract Costs

The balance of deferred incremental costs to obtain contracts with customers was $2.1 billion and $1.9 billion as of September 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 were $468 million and $375 million for the three months ended September 30, 2023 and 2022, respectively, and $1.3 billion and $1.1 billion for the nine months ended September 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 nine months ended September 30, 2023 and 2022.

21
Index for Notes to the Condensed Consolidated Financial Statements
Note 10 – Stockholder Return Programs

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 September 30, 2023, we repurchased 19,313,159 shares of our common stock at an average price per share of $138.48 for a total purchase price of $2.7 billion, and during the nine months ended September 30, 2023, we repurchased 77,460,937 shares of our common stock at an average price per share of $141.57 for a total purchase price of $11.0 billion, all of which were purchased under the 2022 Stock Repurchase Program. All shares purchased during the nine months ended September 30, 2023, were purchased at market price.

2023-2024 Stockholder Return Program

On September 6, 2023, our Board of Directors authorized our 2023-2024 Stockholder Return Program of up to $19.0 billion that will run through December 31, 2024. The 2023-2024 Stockholder Return Program is expected to consist of additional repurchases of shares of our common stock and the payment of cash dividends. The amount available under the 2023-2024 Stockholder Return Program for share repurchases will be reduced by the amount of any cash dividends declared by us.

Under the 2023-2024 Stockholder Return Program, share repurchases can be made from time to time using a variety of methods, which may include open market purchases, Rule 10b5-1 plans, accelerated share repurchases, privately negotiated transactions or otherwise, all in accordance with the rules of the Securities and Exchange Commission and other applicable legal requirements. The specific timing and amount of any share repurchases, and the specific timing and amount of any dividend payments, under the 2023-2024 Stockholder Return Program will depend on prevailing share prices, general economic and market conditions, Company performance, and other considerations. In addition, the specific timing and amount of any dividend payments are subject to being declared on future dates by our Board of Directors in its sole discretion. The 2023-2024 Stockholder Return Program does not obligate us to acquire any particular amount of common stock or to declare and pay any particular amount of dividends, and the 2023-2024 Stockholder Return Program may be suspended or discontinued at any time at our discretion.

On September 25, 2023, our Board of Directors declared a cash dividend of $0.65 per share on our issued and outstanding common stock, which is payable on December 15, 2023, to stockholders of record as of the close of business on December 1, 2023. As of September 30, 2023, $745 million for dividends payable is presented within Other current liabilities on our Condensed Consolidated Balance Sheets, of which $393 million is payable to DT.

During the three and nine months ended September 30, 2023, we did not repurchase any shares of our common stock under the 2023-2024 Stockholder Return Program. As of September 30, 2023, we had up to $18.3 billion remaining under the 2023-2024 Stockholder Return Program.

Subsequent to September 30, 2023, from October 1, 2023, through October 20, 2023, we repurchased 5,515,568 shares of our common stock at an average price per share of $139.76 for a total purchase price of $771 million. As of October 20, 2023, we had up to $17.5 billion remaining under the 2023-2024 Stockholder Return 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.
22
Index for Notes to the Condensed Consolidated Financial Statements
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.

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 September 30, 2023, $246 million and $275 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 September 30, 2023, $30 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.

We recognized a pre-tax gain of $25 million during the nine months ended September 30, 2023, and a pre-tax loss of $1.1 billion during the three and nine months ended September 30, 2022, which are included within Loss (gain) on disposal group held for sale on our Condensed Consolidated Statements of Comprehensive Income. There was no gain or loss on disposal group held for sale for the three months ended September 30, 2023.

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 second quarter of 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 nine months ended September 30, 2022, all of which relates to the impairment recognized 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. There was no impairment expense recognized for the three and nine months ended September 30, 2023.

Note 12 – Earnings Per Share

The computation of basic and diluted earnings per share was as follows:
Three Months Ended September 30, Nine Months Ended September 30,
(in millions, except shares and per share amounts) 2023 2022 2023 2022
Net income $ 2,142  $ 508  $ 6,303  $ 1,113 
Weighted-average shares outstanding – basic 1,171,336,373  1,253,873,429  1,194,497,722  1,252,783,140 
Effect of dilutive securities:
Outstanding stock options and unvested stock awards 3,054,099  5,336,842  3,792,419  5,278,338 
Weighted-average shares outstanding – diluted 1,174,390,472  1,259,210,271  1,198,290,141  1,258,061,478 
Earnings per share – basic $ 1.83  $ 0.40  $ 5.28  $ 0.89 
Earnings per share – diluted $ 1.82  $ 0.40  $ 5.26  $ 0.88 
Potentially dilutive securities:
Outstanding stock options and unvested stock awards 122,700  50,004  133,137  79,122 
SoftBank contingent consideration (1)
 48,751,557  48,751,557  48,751,557  48,751,557 
(1)     Represents the weighted-average SoftBank Specified Shares Amount that is 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 (the “Letter Agreement”).

23
Index for Notes to the Condensed Consolidated Financial Statements
As of September 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 September 30, 2023 and 2022. Potentially dilutive securities were not included in the computation of diluted earnings per share if to do so would have been anti-dilutive.

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

The issuance of the SoftBank Specified Shares Amount is contingent on the trailing 45-trading-day volume-weighted average price per share of T-Mobile common stock on the NASDAQ Global Select Market being equal to or greater than $150.00 (the “Threshold Price”), at any time during the period commencing on April 1, 2022, and ending on December 31, 2025 (the “Measurement Period”). In accordance with the terms of the Letter Agreement, the Threshold Price is subject to downward adjustment by the per share amount of any cash dividends or other cash distributions declared or paid on our common stock during the Measurement Period. As of September 30, 2023, the Threshold Price is $149.35 and will automatically further adjust upon the declaration of any future cash dividends as provided in the Letter Agreement.

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 $4.7 billion for the 12-month period ending September 30, 2024, $4.3 billion in total for both of the 12-month periods ending September 30, 2025 and 2026, $2.7 billion in total for both of the 12-month periods ending September 30, 2027 and 2028, and $2.3 billion in total thereafter. These amounts are not reflective of our entire anticipated purchases under the related agreements but are determined based on the non-cancelable quantities or termination amounts to which we are contractually obligated.

On March 9, 2023, we entered into a Merger and Unit Purchase Agreement for the acquisition of 100% of the outstanding equity of Ka’ena Corporation and its subsidiaries including, among others, Mint Mobile LLC, for a maximum purchase price of $1.35 billion to be paid out 39% in cash and 61% in shares of T-Mobile common stock. Our estimate of the upfront payment is subject to Ka’ena Corporation’s underlying business performance and the timing of transaction close, and has been updated to $1.2 billion, 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 $303 million for the 12-month period ending September 30, 2024, $602 million in total for both of the 12-month periods ending September 30, 2025 and 2026, $666 million in total for both of the 12-month periods ending September 30, 2027 and 2028, and $4.4 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 are currently being utilized by us through exclusive leasing arrangements with the Sellers. On March 30, 2023, we and the Sellers entered into Amended and Restated License Purchase Agreements pursuant to which we and the Sellers agreed to separate the transaction into two tranches of licenses, with the closings on the acquisitions of certain licenses in Chicago, Dallas and New Orleans being deferred in order to potentially expedite the regulatory approval process for the remainder of the licenses. Subsequently, on August 25, 2023, we and the Sellers entered into Amendments No. 1 to the Amended and Restated License Purchase Agreements, which deferred the closings of certain additional licenses in Chicago and Dallas into the second closing tranche.
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Index for Notes to the Condensed Consolidated Financial Statements
Together, the licenses with closings deferred into the second closing tranche represent approximately $1.1 billion of the aggregate $3.5 billion cash consideration. The agreements remain subject to regulatory approval and are excluded from our reported purchase commitments above. See Note 5 – Spectrum License Transactions for additional details.

On September 12, 2023, we entered into a License Purchase Agreement with Comcast pursuant to which we will acquire spectrum in the 600 MHz band from Comcast in exchange for total cash consideration of between $1.2 billion and $3.3 billion, subject to an application for FCC approval. The licenses are subject to an exclusive leasing arrangement between us and Comcast entered into contemporaneously with the License Purchase Agreement. The agreement remains subject to regulatory approval and is excluded from our reported purchase commitments above. See Note 5 – Spectrum License Transactions for additional details.

Merger Commitments

In connection with the regulatory proceedings and approvals of the Merger pursuant to a Business Combination Agreement with Sprint and the other parties named therein (as amended, the “Business Combination Agreement”) and the other transactions contemplated by the Business Combination Agreement (collectively, the “Transactions”) we have commitments and other obligations to various state and federal agencies and certain nongovernmental organizations, including pursuant to the Consent Decree agreed to by us, DT, Sprint, SoftBank and DISH and entered by the U.S. District Court for the District of Columbia, and the FCC’s memorandum opinion and order approving our applications for approval of the Merger. These commitments and obligations include, among other things, extensive 5G network build-out commitments, obligations to deliver high-speed wireless services to the vast majority of Americans, including Americans residing in rural areas, and the marketing of an in-home broadband product where spectrum capacity is available. Other commitments relate to national security, pricing, service, employment and support of diversity initiatives. Many of the commitments specify time frames for compliance and reporting. Failure to fulfill our obligations and commitments in a timely manner could result in substantial fines, penalties, or other legal and administrative actions.

Contingencies and Litigation

Litigation and Regulatory Matters

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

On February 28, 2020, 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 September 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.
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Index for Notes to the Condensed Consolidated Financial Statements
Those matters include a wide variety of disputes, claims, government agency investigations and enforcement actions, and other proceedings. These matters include, among other things, certain ongoing FCC and state government agency investigations into Sprint’s Lifeline program. In September 2019, Sprint notified the FCC that it had claimed monthly subsidies for serving subscribers even though these subscribers may not have met usage requirements under Sprint's usage policy for the Lifeline program, due to an inadvertent coding issue in the system used to identify qualifying subscriber usage that occurred in July 2017 while the system was being updated. Sprint has made a number of payments to reimburse the federal government and certain states for excess subsidy payments.

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

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

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. On July 31, 2023, a class member filed an appeal to the final approval order challenging the Court’s award of attorneys’ fees to class counsel. We expect the remaining portion of the $350 million settlement payment to fund claims to be made once that appeal is resolved. 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. During each of the nine months ended September 30, 2023 and 2022, 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. 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.

26
Index for Notes to the Condensed Consolidated Financial Statements
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

Merger Restructuring Initiatives

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.

27
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
September 30, 2023		 Nine Months Ended
September 30, 2023		 Incurred to Date
Contract termination costs $ 7  $ 31  $ 454 
Severance costs —  3  574 
Network decommissioning 52  223  1,700 
Total restructuring plan expenses $ 59  $ 257  $ 2,728 

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

Our Merger restructuring initiatives also include the acceleration or termination of certain of our operating and financing leases for cell sites, switch sites, retail stores, network equipment and office facilities. Incremental expenses associated with accelerating amortization of the right-of-use assets on lease contracts were $67 million and $384 million for the three months ended September 30, 2023 and 2022, respectively, and $303 million and $1.6 billion for the nine months ended September 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.

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)
 September 30,
2023
Contract termination costs $ 190  $ 31  $ (199) $ —  $ 22 
Severance costs —  3  (6) 3  — 
Network decommissioning 280  223  (344) (15) 144 
Total $ 470  $ 257  $ (549) $ (12) $ 166 
(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.

2023 Workforce Reduction

In August 2023, we began implementing an initiative to reduce the size of our workforce by approximately 5,000 positions, just under 7% of our total employee base, primarily in corporate and back-office functions, and some technology roles. We recorded a pre-tax charge of $471 million during the three months ended September 30, 2023, related to the workforce reduction, which is included in Costs of services and Selling, general and administrative expenses on our Condensed Consolidated Statements of Comprehensive Income.

The changes in the liabilities associated with our workforce reduction initiative, including expenses incurred and cash payments, are as follows:
(in millions) December 31,
2022		 Expenses Incurred Cash Payments
Other (1)
 September 30,
2023
Severance costs $ —  $ 471  $ (18) $ 14  $ 467 
(1)    Other primarily consists of previously expensed vacation accruals expected to be paid out as a component of severance.

The liabilities accrued in connection with our workforce reduction activities are presented in Accounts payable and accrued liabilities on our Condensed Consolidated Balance Sheets.

Substantially all costs associated with our workforce reduction activities were recorded during the three months ended September 30, 2023, with substantially all related cash outflows extending through mid-2024.

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Index for Notes to the Condensed Consolidated Financial Statements
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) September 30,
2023		 December 31,
2022
Accounts payable $ 4,603  $ 7,213 
Payroll and related benefits 1,354  1,236 
Property and other taxes, including payroll 1,797  1,657 
Accrued interest 829  731 
Commissions and contract termination costs 287  523 
Toll and interconnect 195  227 
Other 600  688 
Accounts payable and accrued liabilities $ 9,665  $ 12,275 

Book overdrafts included in accounts payable were $713 million and $720 million as of September 30, 2023, and December 31, 2022, respectively.

Supplemental Condensed Consolidated Statements of Cash Flows Information

The following table summarizes T-Mobile’s supplemental cash flow information:
Three Months Ended September 30, Nine Months Ended September 30,
(in millions) 2023 2022 2023 2022
Interest payments, net of amounts capitalized $ 915  $ 781  $ 2,651  $ 2,548 
Operating lease payments 1,037  1,073  3,834  3,163 
Income tax payments 4  12  126  75 
Non-cash investing and financing activities
Non-cash beneficial interest obtained in exchange for securitized receivables $ 920  $ 1,181  $ 3,148  $ 3,189 
Change in accounts payable and accrued liabilities for purchases of property and equipment (459) 390  (1,196) 139 
Increase in Tower obligations from contract modification —  —  —  1,158 
Operating lease right-of-use assets obtained in exchange for lease obligations 563  479  1,676  7,045 
Financing lease right-of-use assets obtained in exchange for lease obligations 398  348  961  1,197 

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) September 30,
2023		 December 31,
2022
Cash and cash equivalents $ 5,030  $ 4,507 
Cash and cash equivalents held for sale (included in Other current assets) —  27 
Restricted cash (included in Other current assets) 94  73 
Restricted cash (included in Other assets) 75  67 
Cash and cash equivalents, including restricted cash and cash held for sale $ 5,199  $ 4,674 

Note 16 – Subsequent Events

Subsequent to September 30, 2023, on October 15, 2023, we and DISH entered into the LPA Amendment to the DISH License Purchase Agreement. See Note 5 - Spectrum License Transactions for additional information.

Subsequent to September 30, 2023, from October 1, 2023, through October 20, 2023, we repurchased 5,515,568 shares of our common stock at an average price per share of $139.76 for a total purchase price of $771 million. See Note 10 - Stockholder Return Programs for additional information regarding the 2023-2024 Stockholder Return 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 (the “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 geopolitical instability, such as the Ukraine-Russia war and Israel-Hamas war;
•our inability to manage the ongoing 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
•the dollar amount authorized for our 2023-2024 Stockholder Return Program (as defined in Note 10 – Stockholder Return Programs of the Notes to the Condensed Consolidated Financial Statements) may not be fully utilized, and our share repurchases and dividend payments pursuant thereto may fail to have the desired impact on 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 nine months ended September 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 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
September 30,		 Change Nine Months Ended
September 30,		 Change
2023 2022 $ % 2023 2022 $ %
Merger-related costs
Cost of services, exclusive of depreciation and amortization $ 120  $ 812  $ (692) (85) % $ 506  $ 2,380  $ (1,874) (79) %
Cost of equipment sales, exclusive of depreciation and amortization (3) 258  (261) (101) % (12) 1,468  (1,480) (101) %
Selling, general and administrative 35  226  (191) (85) % 292  529  (237) (45) %
Total Merger-related costs $ 152  $ 1,296  $ (1,144) (88) % $ 786  $ 4,377  $ (3,591) (82) %
Net cash payments for Merger-related costs $ 345  $ 942  $ (597) (63) % $ 1,557  $ 2,742  $ (1,185) (43) %

We expect to incur substantially all of the remaining projected Merger-related costs of approximately $200 million, excluding capital expenditures, by the end of 2023, with the cash expenditure for the Merger-related costs extending beyond 2023.

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. 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.

2023 Workforce Reduction

In August 2023, we began implementing an initiative to reduce the size of our workforce by approximately 5,000 positions, just under 7% of our total employee base, primarily in corporate and back-office functions, and some technology roles. We expect a decrease in operating expenses in 2024 driven by reduced personnel costs.

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

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.

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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. Our estimate of the upfront payment is subject to Ka’ena Corporation’s underlying business performance and the timing of transaction close, and has been updated to $1.2 billion, 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 the first quarter of 2024.

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 nine months ended September 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. 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
September 30,		 Change Nine Months Ended
September 30,		 Change
(in millions) 2023 2022 $ % 2023 2022 $ %
Revenues
Postpaid revenues $ 12,288  $ 11,548  $ 740  6  % $ 36,220  $ 34,194  $ 2,026  6  %
Prepaid revenues 2,473  2,484  (11) —  % 7,334  7,408  (74) (1) %
Wholesale and other service revenues 1,153  1,329  (176) (13) % 3,644  4,203  (559) (13) %
Total service revenues 15,914  15,361  553  4  % 47,198  45,805  1,393  3  %
Equipment revenues 3,076  3,855  (779) (20) % 9,964  12,679  (2,715) (21) %
Other revenues 262  261  1  —  % 918  814  104  13  %
Total revenues 19,252  19,477  (225) (1) % 58,080  59,298  (1,218) (2) %
Operating expenses
Cost of services, exclusive of depreciation and amortization shown separately below 2,886  3,712  (826) (22) % 8,863  11,499  (2,636) (23) %
Cost of equipment sales, exclusive of depreciation and amortization shown separately below 4,249  4,982  (733) (15) % 12,925  16,036  (3,111) (19) %
Selling, general and administrative 5,334  5,118  216  4  % 16,031  16,030  1  —  %
Impairment expense —  —  —  NM —  477  (477) (100) %
Loss (gain) on disposal group held for sale —  1,071  (1,071) (100) % (25) 1,071  (1,096) (102) %
Depreciation and amortization 3,187  3,313  (126) (4) % 9,500  10,389  (889) (9) %
Total operating expenses 15,656  18,196  (2,540) (14) % 47,294  55,502  (8,208) (15) %
Operating income 3,596  1,281  2,315  181  % 10,786  3,796  6,990  184  %
Other expense, net
Interest expense, net (790) (827) 37  (4) % (2,486) (2,542) 56  (2) %
Other income (expense), net 41  (3) 44  NM 56  (35) 91  (260) %
Total other expense, net (749) (830) 81  (10) % (2,430) (2,577) 147  (6) %
Income before income taxes 2,847  451  2,396  531  % 8,356  1,219  7,137  585  %
Income tax (expense) benefit (705) 57  (762) NM (2,053) (106) (1,947) NM
Net income $ 2,142  $ 508  $ 1,634  322  % $ 6,303  $ 1,113  $ 5,190  466  %
Statement of Cash Flows Data
Net cash provided by operating activities $ 5,294  $ 4,391  $ 903  21  % $ 13,700  $ 12,445  $ 1,255  10  %
Net cash used in investing activities (1,393) (2,555) 1,162  (45) % (4,608) (10,206) 5,598  (55) %
Net cash (used in) provided by financing activities (5,510) 1,927  (7,437) (386) % (8,567) (1,953) (6,614) 339  %
Non-GAAP Financial Measures
Adjusted EBITDA $ 7,600  $ 7,039  $ 561  8  % $ 22,204  $ 20,993  $ 1,211  6  %
Core Adjusted EBITDA 7,547  6,728  819  12  % 21,935  19,809  2,126  11  %
Adjusted Free Cash Flow 4,003  2,065 1,938 94  % 9,281  5,472  3,809  70  %
NM - Not Meaningful
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The following discussion and analysis is for the three and nine months ended September 30, 2023, compared to the same period in 2022 unless otherwise stated.

Total revenues decreased $225 million, or 1%, for the three months ended and decreased $1.2 billion, or 2%, for the nine months ended September 30, 2023. The components of these changes are discussed below.

Postpaid revenues increased $740 million, or 6%, for the three months ended and increased $2.0 billion, or 6%, for the nine months ended September 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 were relatively flat for the three months ended and decreased slightly for the nine months ended September 30, 2023, primarily from:

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

Wholesale and other service revenues decreased $176 million, or 13%, for the three months ended and decreased $559 million, or 13%, for the nine months ended September 30, 2023.

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

•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; and
•Lower MVNO revenues.

The decrease for the nine months ended September 30, 2023, was 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 $779 million, or 20%, for the three months ended and decreased $2.7 billion, or 21%, for the nine months ended September 30, 2023.

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

•A decrease of $486 million in device sales revenue, excluding purchased leased devices, primarily from:
•A decrease in the number of devices sold, primarily due to lower postpaid upgrades and prepaid sales driven by longer device lifecycles, as well as higher postpaid upgrades in the prior year period related to facilitating the migration of Sprint customers to the T-Mobile network;
•A decrease of $258 million in lease revenues, primarily due to a lower number of customer devices under lease as a result of the continued strategic shift in device financing from leasing to EIP; and
•A decrease of $74 million in accessory revenue, primarily due to a decrease in the number of associated devices sold.

The decrease for the nine months ended September 30, 2023, was primarily from:

•A decrease of $1.3 billion 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
•Slightly 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;
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•A decrease of $915 million in lease revenues and a decrease of $180 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; and
•A decrease of $228 million in accessory revenue, primarily due to a decrease in the number of associated devices sold.

Other revenues were relatively flat for the three months ended and increased $104 million, or 13%, for the nine months ended September 30, 2023.

The increase for the nine months ended September 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 $2.5 billion, or 14%, for the three months ended and decreased $8.2 billion, or 15%, for the nine months ended September 30, 2023. The components of this change are discussed below.

Cost of services, exclusive of depreciation and amortization, decreased $826 million, or 22%, for the three months ended and decreased $2.6 billion, or 23%, for the nine months ended September 30, 2023.

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

•A decrease of $692 million in Merger-related costs related to network decommissioning and integration as the majority of our decommissioning efforts were completed in 2022;
•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; and
•Higher realized Merger synergies; partially offset by
•$140 million of severance and related costs associated with the August 2023 workforce reduction; and
•Higher site costs related to the continued build-out of our nationwide 5G network.

The decrease for the nine months ended September 30, 2023, was primarily from:

•A decrease of $1.9 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
•$140 million of severance and related costs associated with the August 2023 workforce reduction; and
•Higher site costs related to the continued build-out of our nationwide 5G network.

Cost of equipment sales, exclusive of depreciation and amortization, decreased $733 million, or 15%, for the three months ended and decreased $3.1 billion, or 19%, for the nine months ended September 30, 2023.

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

•A decrease of $638 million in device cost of equipment sales, excluding purchased leased devices, primarily from:
•A decrease in the number of devices sold, primarily due to lower postpaid upgrades and prepaid sales driven by longer device lifecycles, as well as higher postpaid upgrades in the prior year period related to facilitating the migration of Sprint customers to the T-Mobile network; and
•A decrease of $41 million in accessory costs, primarily due to a decrease in the number of associated devices sold.
•Cost of equipment sales for the three months ended September 30, 2023, included $3 million of Merger-related recoveries, compared to $258 million of Merger-related costs for the three months ended September 30, 2022.
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The decrease for the nine months ended September 30, 2023, was primarily from:

•A decrease of $2.8 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
•Slightly lower average cost per device sold driven by a decrease in the high-end phone mix.
•A decrease of $101 million in accessory costs, primarily due to a decrease in the number of associated devices sold.
•Cost of equipment sales for the nine months ended September 30, 2023, included $12 million of Merger-related recoveries, compared to $1.5 billion of Merger-related costs for the nine months ended September 30, 2022.

Selling, general and administrative expenses increased $216 million, or 4%, for the three months ended and was relatively flat for the nine months ended September 30, 2023.

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

•$331 million of severance and related costs associated with the August 2023 workforce reduction;
•Gains from the sale of certain IP addresses held by the Wireline Business of $121 million recognized during the three months ended September 30, 2022; partially offset by
•Lower Merger-related costs and higher realized Merger synergies; and
•Lower costs related to outsourced functions.
•Selling, general and administrative expenses for the three months ended September 30, 2023, included $35 million of Merger-related costs, which were net of legal settlement gains of $69 million, compared to $226 million of Merger-related costs for the three months ended September 30, 2022.

The slight increase for the nine months ended September 30, 2023, was primarily from:

•$331 million of severance and related costs associated with the August 2023 workforce reduction;
•Higher commission amortization expense;
•Higher advertising expense; and
•Gains from the sale of certain IP addresses held by the Wireline Business of $121 million recognized during the three months ended September 30, 2022; offset by
•Lower Merger-related costs and higher realized Merger synergies;
•Lower legal-related expenses, including $400 million recognized in June 2022 associated with the settlement of certain litigation resulting from the August 2021 cyberattack; and
•Lower bad debt expense.
•Selling, general and administrative expenses for the nine months ended September 30, 2023, included $292 million of Merger-related costs, which were net of legal settlement gains of $134 million, compared to $529 million of Merger-related costs for the nine months ended September 30, 2022, which were net of legal settlement gains of $220 million.

Impairment expense was $477 million for the nine months ended September 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 nine months ended September 30, 2023 and the three months ended September 30, 2022.

Loss (gain) on disposal group held for sale was a gain of $25 million for the nine months ended September 30, 2023 and a loss of $1.1 billion for the three and nine months ended September 30, 2022. 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 months ended September 30, 2023.
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Depreciation and amortization decreased $126 million, or 4%, for the three months ended and decreased $889 million, or 9%, for the nine months ended September 30, 2023.

The decrease for the three and nine months ended September 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; and
•Higher amortization of capitalized software driven by increased in-service internally developed and purchased software.

Operating income, the components of which are discussed above, increased $2.3 billion, or 181%, for the three months ended and increased $7.0 billion, or 184%, for the nine months ended September 30, 2023.

Interest expense, net decreased $37 million, or 4%, for the three months ended and decreased $56 million, or 2%, for the nine months ended September 30, 2023, primarily from:

•Higher interest income, primarily due to higher average interest rates on short-term cash equivalents; and
•Higher capitalized interest, primarily driven by deployment activities associated with our C-band spectrum licenses; partially offset by
•Higher interest expense, primarily due to higher average debt outstanding and a higher average effective interest rate.

Other income (expense), net was insignificant for all periods.

Income before income taxes, the components of which are discussed above, was $2.8 billion and $451 million for the three months ended September 30, 2023 and 2022, respectively, and was $8.4 billion and $1.2 billion for the nine months ended September 30, 2023 and 2022, respectively.

Income tax expense increased $762 million for the three months ended and increased $1.9 billion for the nine months ended September 30, 2023, primarily from:

•Higher income before income taxes; and
•Tax benefits recognized during the three months ended September 30, 2022, associated with certain entity restructuring, that did not impact 2023.

Our effective tax rate was 24.8% and (12.4)% for the three months ended September 30, 2023 and 2022, respectively, and 24.6% and 8.7% for the nine months ended September 30, 2023 and 2022, respectively.

Net income, the components of which are discussed above, was $2.1 billion and $508 million for the three months ended September 30, 2023 and 2022, respectively, and was $6.3 billion and $1.1 billion for the nine months ended September 30, 2023 and 2022, respectively. Net income included:

•Merger-related costs, net of tax, of $114 million and $589 million for the three and nine months ended September 30, 2023, respectively, compared to $972 million and $3.3 billion for the three and nine months ended September 30, 2022, respectively.
•Gain on disposal group held for sale of $19 million, net of tax, for the nine months ended September 30, 2023, compared to a loss on disposal group held for sale of $803 million, net of tax, for the three and nine months ended September 30, 2022. There was no gain or loss on disposal group held for sale for the three months ended September 30, 2023.
•Impairment expense of $358 million, net of tax, for the nine months ended September 30, 2022, compared to no impairment expense for the three and nine months ended September 30, 2023 and the three months ended September 30, 2022.
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•Severance and related costs associated with the August 2023 workforce reduction of $353 million, net of tax, for the three and nine months ended September 30, 2023.
•Legal-related recoveries, net, associated with the settlement of certain litigation resulting from the August 2021 cyberattack, of $32 million for the nine months ended September 30, 2023, compared to $14 million in Legal-related recoveries, net, and $286 million in Legal-related expenses, net, for the three and nine months ended September 30, 2022, respectively. There was no Legal-related expenses or recoveries for the three months ended September 30, 2023, associated with the August 2021 cyberattack.

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.

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) September 30, 2023 December 31, 2022
Current assets $ 17,290  $ 17,661 
Noncurrent assets 179,445  181,673 
Current liabilities 20,005  23,146 
Noncurrent liabilities 127,546  120,385 
Due to non-guarantors 10,556  9,325 
Due to related parties 1,535  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) Nine Months Ended
September 30, 2023		 Year Ended
December 31, 2022
Total revenues $ 56,109  $ 77,054 
Operating income 8,107  2,985 
Net income (loss) 3,645  (572)
Revenue from non-guarantors 1,792  2,427 
Operating expenses to non-guarantors 1,942  2,659 
Other expense to non-guarantors (513) (327)

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The summarized balance sheet information for the consolidated obligor group of debt issued by Sprint is presented in the table below:
(in millions) September 30, 2023 December 31, 2022
Current assets $ 10,861  $ 9,319 
Noncurrent assets 11,406  11,271 
Current liabilities 12,594  15,854 
Noncurrent liabilities 106,703  65,118 
Due to non-guarantors 38,296  3,930 
Due to related parties 1,535  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) Nine Months Ended
September 30, 2023		 Year Ended
December 31, 2022
Total revenues $ 14  $ 7 
Operating loss (2,324) (3,479)
Net (loss) income (1)
 (5,448) 2,471 
Other (expense) income, net, (to) from non-guarantors (1,460) 525 
(1)     Net income for the year ended December 31, 2022, includes tax benefits recognized associated with certain entity 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) September 30, 2023 December 31, 2022
Current assets $ 10,861  $ 9,320 
Noncurrent assets 11,406  16,337 
Current liabilities 12,665  15,926 
Noncurrent liabilities 102,952  66,516 
Due to non-guarantors 29,225  — 
Due from non-guarantors —  5,066 
Due to related parties 1,535  1,571 

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) Nine Months Ended
September 30, 2023		 Year Ended
December 31, 2022
Total revenues $ 14  $ 7 
Operating loss (2,324) (3,479)
Net (loss) income (1)
 (5,365) 2,604 
Other (expense) income, net, (to) from non-guarantors (1,075) 941 
(1)     Net income for the year ended December 31, 2022, includes tax benefits recognized associated with certain entity 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.
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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 September 30, Change
(in thousands) 2023 2022 # %
Postpaid accounts (1)
 29,498  28,212  1,286  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
September 30,		 Change Nine Months Ended
September 30,		 Change
(in thousands) 2023 2022 # % 2023 2022 # %
Postpaid net account additions 386  394  (8) (2) % 972  1,122  (150) (13) %

Postpaid net account additions decreased 8,000, or 2%, for the three months ended and decreased 150,000, or 13%, for the nine months ended September 30, 2023.

The decrease for the three months ended September 30, 2023, was primarily from fewer High Speed Internet only net account additions.

The decrease for the nine months ended September 30, 2023, was 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.

The following table sets forth the number of ending customers:
As of September 30, Change
(in thousands) 2023 2022 # %
Customers, end of period
Postpaid phone customers (1)
 74,982  71,907  3,075  4  %
Postpaid other customers (1)
 21,330  18,507  2,823  15  %
Total postpaid customers 96,312  90,414  5,898  7  %
Prepaid customers (1)
 21,595  21,341  254  1  %
Total customers 117,907  111,755  6,152  6  %
Adjustments to customers (1)
 —  (1,878) 1,878  (100) %
(1)     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.

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High Speed Internet customers included in Postpaid other customers were 3,807,000 and 1,960,000 as of September 30, 2023 and 2022, respectively. High Speed Internet customers included in Prepaid customers were 428,000 and 162,000 as of September 30, 2023 and 2022, respectively.

Net Customer Additions

The following table sets forth the number of net customer additions:
Three Months Ended
September 30,		 Change Nine Months Ended
September 30,		 Change
(in thousands) 2023 2022 # % 2023 2022 # %
Net customer additions
Postpaid phone customers 850  854  (4) —  % 2,148  2,166  (18) (1) %
Postpaid other customers 376  773  (397) (51) % 1,932  2,435  (503) (21) %
Total postpaid customers 1,226  1,627  (401) (25) % 4,080  4,601  (521) (11) %
Prepaid customers 79  105  (26) (25) % 229  313  (84) (27) %
Total net customer additions 1,305  1,732  (427) (25) % 4,309  4,914  (605) (12) %
Adjustments to customers —  —  —  NM —  (1,878) 1,878  (100) %
NM - Not meaningful

Total net customer additions decreased 427,000, or 25%, for the three months ended and decreased 605,000, or 12%, for the nine months ended September 30, 2023.

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

•Lower postpaid other net customer additions, primarily due to deactivations from mobile internet devices in the educational sector that were originally activated during the COVID-19 pandemic (“Pandemic”) and no longer needed; and
•Lower prepaid net customer additions, primarily due to continued moderation of industry growth and fewer High Speed Internet net additions, partially offset by lower churn.
•Postpaid phone net customer additions were relatively flat, primarily due to increased deactivations from a growing customer base despite slightly lower churn, offset by higher gross additions.
•High Speed Internet net customer additions included in postpaid other net customer additions were 505,000 and 488,000 for the three months ended September 30, 2023 and 2022, respectively. High Speed Internet net customer additions included in prepaid net customer additions were 52,000 and 90,000 for the three months ended September 30, 2023 and 2022, respectively.

The decrease for the nine months ended September 30, 2023, was primarily from:

•Lower postpaid other net customer additions, primarily due to
•Deactivations from mobile internet devices in the educational sector that were originally activated during the Pandemic and no longer needed; and
•Lower net additions from other connected 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; and
•Slightly lower postpaid phone net customer additions, primarily due to increased deactivations from a growing customer base despite slightly lower churn, mostly offset by higher gross additions.
•High Speed Internet net customer additions included in postpaid other net customer additions were 1,397,000 and 1,314,000 for the nine months ended September 30, 2023 and 2022, respectively. High Speed Internet net customer additions included in prepaid net customer additions were 192,000 and 162,000 for the nine months ended September 30, 2023 and 2022, respectively.

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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
September 30,		 Change Nine Months Ended
September 30,		 Change
2023 2022 2023 2022
Postpaid phone churn 0.87  % 0.88  % -1 bps 0.84  % 0.87  % -3 bps
Prepaid churn 2.81  % 2.88  % -7 bps 2.73  % 2.71  % 2 bps

Postpaid phone churn decreased 1 basis point for the three months ended and decreased 3 basis points for the nine months ended September 30, 2023, primarily from improved customer retention driven by a differentiated value proposition and network experience.

Prepaid churn decreased 7 basis points for the three months ended and increased 2 basis points for the nine months ended September 30, 2023.

The decrease for the three months ended September 30, 2023, was primarily from improved customer retention.

The increase for the nine months ended September 30, 2023, was 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
September 30,		 Change Nine Months Ended
September 30,		 Change
2023 2022 $ % 2023 2022 $ %
Postpaid ARPA $ 139.83  $ 137.49  $ 2.34  2  % $ 138.94  $ 137.32  $ 1.62  1  %

Postpaid ARPA increased $2.34, or 2%, for the three months ended and increased $1.62, or 1%, for the nine months ended September 30, 2023.

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

•An increase in customers per account, including growth in business and continued adoption of High Speed Internet; and
•Higher premium services, primarily high-end rate plans, net of contra-revenue for content included in such plans and discounts for specific affinity groups, such as 55+, Military and First Responder; partially offset by
•Increased promotional activity; and
•An increase in High Speed Internet only accounts.

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The slight increase for the nine months ended September 30, 2023, was primarily from:

•Higher premium services, primarily high-end rate plans, net of contra-revenue for content included in such plans and discounts for specific affinity groups, such as 55+, Military and First Responder; and
•An increase in customers per account, including growth in business and continued adoption of High Speed Internet; partially offset by
•Increased promotional activity; and
•An increase in High Speed Internet only accounts.

Average Revenue Per User

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

The following table sets forth our operating measure ARPU:
(in dollars) Three Months Ended
September 30,		 Change Nine Months Ended
September 30,		 Change
2023 2022 $ % 2023 2022 $ %
Postpaid phone ARPU $ 48.93  $ 48.89  $ 0.04  —  % $ 48.80  $ 48.75  $ 0.05  —  %
Prepaid ARPU 38.18  38.86  (0.68) (2) % 38.05  38.92  (0.87) (2) %

Postpaid Phone ARPU

Postpaid phone ARPU was relatively flat for the three and nine months ended September 30, 2023, primarily from:

•Higher premium services, primarily high-end rate plans, net of contra-revenue for content included in such plans and discounts for specific affinity groups, such as 55+, Military and First Responders; offset by
•Increased promotional activity; and
•Growth in business with lower ARPU given larger account sizes.

Prepaid ARPU

Prepaid ARPU decreased $0.68, or 2%, for the three months ended and decreased $0.87, or 2%, for the nine months ended September 30, 2023, primarily from dilution from promotional rate plan mix.

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, including the August 2023 workforce reduction, which are not reflective of our core business activities.
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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.

The following table illustrates the calculation of Adjusted EBITDA and Core Adjusted EBITDA and reconciles Adjusted EBITDA and Core Adjusted EBITDA to Net income, which we consider to be the most directly comparable GAAP financial measure:
Three Months Ended
September 30,		 Change Nine Months Ended
September 30,		 Change
(in millions, except percentages) 2023 2022 $ % 2023 2022 $ %
Net income $ 2,142  $ 508  $ 1,634  322  % $ 6,303  $ 1,113  $ 5,190  466  %
Adjustments:
Interest expense, net 790  827  (37) (4) % 2,486  2,542  (56) (2) %
Other (income) expense, net (41) 3  (44) NM (56) 35  (91) (260) %
Income tax expense (benefit) 705  (57) 762  NM 2,053  106  1,947  NM
Operating income 3,596  1,281  2,315  181  % 10,786  3,796  6,990  184  %
Depreciation and amortization 3,187  3,313  (126) (4) % 9,500  10,389  (889) (9) %
Stock-based compensation (1)
 152  145  7  5  % 480  430  50  12  %
Merger-related costs 152  1,296  (1,144) (88) % 786  4,377  (3,591) (82) %
Impairment expense —  —  —  NM —  477  (477) (100) %
Legal-related (recoveries) expenses, net (2)
 —  (19) 19  (100) % (43) 381  (424) (111) %
Loss (gain) on disposal group held for sale —  1,071  (1,071) (100) % (25) 1,071  (1,096) (102) %
Other, net (3)
 513  (48) 561  NM 720  72  648  NM
Adjusted EBITDA 7,600  7,039  561  8  % 22,204  20,993  1,211  6  %
Lease revenues (53) (311) 258  (83) % (269) (1,184) 915  (77) %
Core Adjusted EBITDA
 $ 7,547  $ 6,728  $ 819  12  % $ 21,935  $ 19,809  $ 2,126  11  %
Net income margin (Net income divided by Service revenues) 13  % 3  % 1,000 bps 13  % 2  % 1,100 bps
Adjusted EBITDA margin (Adjusted EBITDA divided by Service revenues) 48  % 46  % 200 bps 47  % 46  % 100 bps
Core Adjusted EBITDA margin (Core Adjusted EBITDA divided by Service revenues)
 47  % 44  % 300 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 (recoveries) expenses, 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. Other, net, for the three and nine months ended September 30, 2023, includes $471 million of severance and related costs associated with the August 2023 workforce reduction.
NM - Not meaningful

Core Adjusted EBITDA increased $819 million, or 12%, for the three months ended and increased $2.1 billion, or 11%, for the nine months ended September 30, 2023. The components comprising Core Adjusted EBITDA are discussed further above.

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

•Higher Total service revenues;
•Lower Cost of equipment sales, excluding Merger-related costs; and
•Lower Cost of services, excluding Merger-related costs and other special items, such as severance and related costs associated with the August 2023 workforce reduction; partially offset by
•Lower Equipment revenues, excluding lease revenues.

The increase for the nine months ended September 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 and other special items, such as severance and related costs associated with the August 2023 workforce reduction; partially offset by
•Lower Equipment revenues, excluding lease revenues.

Adjusted EBITDA increased $561 million, or 8%, for the three months ended and increased $1.2 billion, or 6%, for the nine months ended September 30, 2023, primarily due to the fluctuations in Core Adjusted EBITDA, discussed above, partially offset by lower lease revenues, which decreased $258 million for the three months ended and decreased $915 million for the nine months ended September 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
September 30,		 Change Nine Months Ended
September 30,		 Change
(in millions) 2023 2022 $ % 2023 2022 $ %
Net cash provided by operating activities $ 5,294  $ 4,391  $ 903  21  % $ 13,700  $ 12,445  $ 1,255  10  %
Net cash used in investing activities (1,393) (2,555) 1,162  (45) % (4,608) (10,206) 5,598  (55) %
Net cash (used in) provided by financing activities (5,510) 1,927  (7,437) (386) % (8,567) (1,953) (6,614) 339  %

Operating Activities

Net cash provided by operating activities increased $903 million, or 21%, for the three months ended and increased $1.3 billion, or 10%, for the nine months ended September 30, 2023.

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

•A $1.7 billion increase in Net income, adjusted for non-cash income and expense; partially offset by
•An $846 million increase in net cash outflows from changes in working capital, primarily due to higher use of cash from Other current and long-term liabilities, Inventory, Operating lease right-of-use assets and Accounts payable and accrued liabilities, partially offset by lower use of cash from Equipment installment plan receivables, Other current and long-term assets and Accounts receivable.
•Net cash provided by operating activities includes the impact of $345 million and $942 million in net payments for Merger-related costs for the three months ended September 30, 2023 and 2022, respectively.
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The increase for the nine months ended September 30, 2023, was primarily from:

•A $5.1 billion increase in Net income, adjusted for non-cash income and expense; partially offset by
•A $3.8 billion increase in net cash outflows from changes in working capital, primarily due to higher use of cash from Accounts payable and accrued liabilities, Other current and long-term liabilities, Operating lease right-of-use assets and Short- and long-term operating lease liabilities, partially offset by lower use of cash from Equipment installment plan receivables and Other current and long-term assets.
•Net cash provided by operating activities includes the impact of $1.6 billion and $2.7 billion in net payments for Merger-related costs for the nine months ended September 30, 2023 and 2022, respectively.

Investing Activities

Net cash used in investing activities decreased $1.2 billion, or 45%, for the three months ended and decreased $5.6 billion, or 55%, for the nine months ended September 30, 2023.

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

•$2.4 billion in Purchases of property and equipment, including capitalized interest, from the accelerated build-out of our nationwide 5G network; partially offset by
•$1.1 billion in Proceeds related to beneficial interests in securitization transactions.

The use of cash for the nine months ended September 30, 2023, was primarily from:

•$8.2 billion in Purchases of property and equipment, including capitalized interest, from the accelerated build-out of our nationwide 5G network; partially offset by
•$3.8 billion in Proceeds related to beneficial interests in securitization transactions.

Financing Activities

Net cash used in financing activities increased $7.4 billion, or 386%, for the three months ended and increased $6.6 billion, or 339%, for the nine months ended September 30, 2023.

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

•$4.5 billion in Repayments of long-term debt;
•$2.7 billion in Repurchases of common stock; and
•$304 million in Repayments of financing lease obligations; partially offset by
•$2.0 billion in Proceeds from issuance of long-term debt.

The use of cash for the nine months ended September 30, 2023, was primarily from:

•$10.9 billion in Repurchases of common stock;
•$4.8 billion in Repayments of long-term debt;
•$914 million in Repayments of financing lease obligations; and
•$267 million in Tax withholdings on share-based awards; partially offset by
•$8.4 billion in Proceeds from issuance of long-term debt.

Cash and Cash Equivalents

As of September 30, 2023, our Cash and cash equivalents were $5.0 billion compared to $4.5 billion at December 31, 2022.

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Adjusted Free Cash Flow

Adjusted Free Cash Flow represents Net cash provided by operating activities less cash payments for Purchases of property and equipment, plus Proceeds from sales of tower sites and Proceeds related to beneficial interests in securitization transactions 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, pay dividends 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, pay dividends and provide further investment in the business.

The table below provides a reconciliation of Adjusted Free Cash Flow to Net cash provided by operating activities, which we consider to be the most directly comparable GAAP financial measure:
Three Months Ended
September 30,		 Change Nine Months Ended
September 30,		 Change
(in millions, except percentages) 2023 2022 $ % 2023 2022 $ %
Net cash provided by operating activities $ 5,294  $ 4,391  $ 903  21  % $ 13,700  $ 12,445  $ 1,255  10  %
Cash purchases of property and equipment, including capitalized interest (2,424) (3,634) 1,210  (33) % (8,214) (10,587) 2,373  (22) %
Proceeds from sales of tower sites 2  —  2  NM 10  —  10  NM
Proceeds related to beneficial interests in securitization transactions 1,131  1,308  (177) (14) % 3,785  3,614  171  5  %
Adjusted Free Cash Flow $ 4,003  $ 2,065  $ 1,938  94  % $ 9,281  $ 5,472  $ 3,809  70  %
Net cash provided by operating activities margin (Net cash provided by operating activities divided by Service revenues) 33  % 29  % 400 bps 29  % 27  % 200 bps
Adjusted Free Cash Flow margin (Adjusted Free Cash Flow divided by Service revenues) 25  % 13  % 1,200 bps 20  % 12  % 800 bps
NM - Not Meaningful

Adjusted Free Cash Flow increased $1.9 billion, or 94%, for the three months ended and increased $3.8 billion, or 70%, for the nine months ended September 30, 2023.

The increase for the three months ended September 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; and
•Higher Net cash provided by operating activities, as described above; partially offset by
•Lower Proceeds related to beneficial interests in securitization transactions, which were offset in Net cash provided by operating activities.
•Adjusted Free Cash Flow includes the impact of $345 million and $942 million in net payments for Merger-related costs for the three months ended September 30, 2023 and 2022, respectively.

The increase for the nine months ended September 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 $1.6 billion and $2.7 billion in net payments for Merger-related costs for the nine months ended September 30, 2023 and 2022, respectively.

During the nine months ended September 30, 2023 and 2022, there were no significant net cash proceeds from securitization.
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Borrowing Capacity

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

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 September 30, 2023, there was no outstanding balance under this program.

Debt Financing

As of September 30, 2023, our total debt and financing lease liabilities were $77.9 billion, excluding our tower obligations, of which $71.9 billion was classified as long-term debt and $1.3 billion was classified as long-term financing lease liabilities.

During the nine months ended September 30, 2023, we issued long-term debt for net proceeds of $8.4 billion and redeemed and repaid short-term debt with an aggregate principal amount of $4.8 billion.

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 being deferred in order to potentially expedite the regulatory approval process for the remainder of the licenses. Subsequently, on August 25, 2023, we and the Sellers entered into Amendments No. 1 to the Amended and Restated License Purchase Agreements whereby we deferred the closings of certain additional licenses in Chicago and Dallas into the second closing tranche. Together, the licenses with closings deferred into the second closing tranche represent approximately $1.1 billion of the aggregate $3.5 billion cash consideration. We anticipate that the first closing will occur no earlier than the first half of 2024 and that the second closing (on the deferred licenses) will occur in late 2024 or early 2025.

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

On September 12, 2023, we entered into a License Purchase Agreement with Comcast pursuant to which we will acquire spectrum in the 600 MHz band from Comcast in exchange for total cash consideration of between $1.2 billion and $3.3 billion, subject to an application for FCC approval. We anticipate the closing will occur in the first half of 2028.

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. Our estimate of the upfront payment is subject to Ka’ena Corporation’s underlying business performance and the timing of transaction close, and has been updated to $1.2 billion, 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 the first quarter of 2024.

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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 September 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, pay dividends or for the refinancing of existing long-term debt on an opportunistic basis. Excluding liquidity that could be needed for acquisitions of businesses, spectrum and other long-lived assets or for any potential stockholder returns, we expect our principal sources of funding to be sufficient to meet our anticipated liquidity needs for business operations for the next 12 months as well as our longer-term liquidity needs. Our intended use of any such funds is for general corporate purposes, including for capital expenditures, spectrum purchases, opportunistic investments and acquisitions, redemption of debt, tower obligations, workforce restructuring, share repurchases, dividend payments and the execution of our integration plan.

We determine future liquidity requirements for operations, capital expenditures, share repurchases and dividend payments based in large part upon projected financial and operating performance, and opportunities to acquire additional spectrum or repurchase shares. We regularly review and update these projections for changes in current and projected financial and operating results, general economic conditions, the competitive landscape and other factors. We have incurred, and will incur, substantial expenses to comply with the Government Commitments, and we are also expected to incur substantially all of the remaining projected Merger-related costs of approximately $200 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 September 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 September 30, 2023, we have entered into $8.5 billion of financing leases under these financing lease facilities, of which $388 million and $940 million was executed during the three and nine months ended September 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.

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Stockholder Returns

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 nine months ended September 30, 2023, we repurchased shares of our common stock for a total purchase price of $2.7 billion and $11.0 billion, respectively, all of which were purchased under the 2022 Stock Repurchase Program.

On September 6, 2023, our Board of Directors authorized our 2023-2024 Stockholder Return Program for up to $19.0 billion that will run through December 31, 2024. The 2023-2024 Stockholder Return Program is expected to consist of additional repurchases of shares of our common stock and the payment of cash dividends.

On September 25, 2023, our Board of Directors declared a cash dividend of $0.65 per share on our issued and outstanding shares of common stock, which will be paid in the fourth quarter of 2023. As of September 30, 2023, $745 million for dividends payable is presented within Other current liabilities on our Condensed Consolidated Balance Sheets. We intend to declare and pay approximately $3.0 billion in total additional dividends in 2024, with payments occurring each quarter during the year. The dividend amount paid per share is expected to grow by around 10% annually with the first increase expected in the fourth quarter of 2024; however, the declaration and payment of future dividends is subject to the discretion of our Board of Directors and will depend on financial and legal requirements and other considerations. The amount available under the 2023-2024 Stockholder Return Program for share repurchases will be reduced by the amount of any cash dividends declared by us.

Subsequent to September 30, 2023, from October 1, 2023, through October 20, 2023, we repurchased 5,515,568 shares of our common stock for a total purchase price of $771 million. As of October 20, 2023, we had up to $17.5 billion remaining under the 2023-2024 Stockholder Return Program.

For additional information regarding the 2022 Stock Repurchase Program and the 2023-2024 Stockholder Return Program, see Note 10 – Stockholder Return Programs of the Notes to the Condensed Consolidated Financial Statements.

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 October 20, 2023, DT held, directly or indirectly, approximately 52.3% of the outstanding T-Mobile common stock, with the remaining approximately 47.7% 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 October 20, 2023, over approximately 56.2% 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 September 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 September 30, 2023, DT, through certain of its non-U.S.
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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 September 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 September 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 September 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 September 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 September 30, 2023, were both under $0.1 million. We understand that the SoftBank subsidiary intends to continue such activities.

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.
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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.

Item 1A. Risk Factors

Other than the updated risk factors 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.

Risks Related to Our Business

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.
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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.

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.

Our business may be adversely impacted if we are not able to successfully manage the ongoing arrangements entered into in connection with the Prepaid Transaction and known or unknown liabilities arising in connection therewith.

In connection with the closing of the Prepaid Transaction, we and DISH entered into certain arrangements, including a Master Network Services Agreement (the “MNSA”) and a License Purchase Agreement (as amended, the “DISH License Purchase Agreement”). Pursuant to the MNSA, DISH will receive network services from the Company for a period of seven years. As set forth in the MNSA, the Company provides DISH, among other things, (a) legacy network services for certain Boost Mobile prepaid end users on the Sprint network, (b) T-Mobile network services for certain end users that have been migrated to the T-Mobile network or provisioned on the T-Mobile network by or on behalf of DISH and (c) infrastructure mobile network operator services to assist in the access and integration of the DISH network.
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Pursuant to the DISH License Purchase Agreement, DISH has agreed to purchase all of Sprint’s 800 MHz spectrum (approximately 13.5 MHz of nationwide spectrum) for a total of approximately $3.6 billion. Pursuant to an amendment to the DISH License Purchase Agreement (the “LPS Amendment”) executed by us and DISH and approved by the Court along with a proposed amendment to the Final Judgment on October 23, 2023, if DISH fails to purchase such spectrum on or prior to April 1, 2024, then DISH’s sole liability will be that we can retain a non-refundable extension fee of approximately $100 million. In such instance, T-Mobile may be required to conduct an auction sale of all of Sprint’s 800 MHz spectrum under the terms set forth in the Final Judgment, but would not be required to divest such spectrum for an amount less than $3.6 billion.

Failure to successfully manage these ongoing arrangements entered into in connection with the Prepaid Transaction and liabilities arising in connection therewith may result in material unanticipated problems, including diversion of management time and energy, significant expenses and liabilities. There may also be other potential adverse consequences and unforeseen increased expenses or liabilities associated with the Prepaid Transaction, the occurrence of which could materially impact our business, financial condition, liquidity and operating results. In addition, there may be an increase in competition from DISH and other third parties that DISH may enter into commercial agreements with, who are significantly larger and with greater resources and scale advantages as compared to us. Such increased competition may result in our loss of customers and other business relationships.

Risks Related to Legal and Regulatory Matters

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. 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. On July 31, 2023, a class member filed an appeal to the final approval order challenging the Court’s award of attorneys’ fees to class counsel. We expect the remaining portion of the $350 million settlement payment to fund claims to be made once that appeal is resolved. 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.
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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.

Risks Related to Ownership of Our Common Stock

We cannot guarantee that our 2023-2024 Stockholder Return Program will be fully utilized, and our share repurchases and dividend payments pursuant thereto may fail to have the desired impact on stockholder value.

Our Board of Directors has authorized the 2023-2024 Stockholder Return Program for up to $19.0 billion that will run through December 31, 2024. The 2023-2024 Stockholder Return Program is expected to consist of additional repurchases of shares of our common stock and payment of cash dividends. The existence of the 2023-2024 Stockholder Return Program could cause our stock price, in certain cases, to be higher or lower than it otherwise would be and could potentially reduce the market liquidity or have other unintended consequences for our stock. In addition to the approximately $750 million dividend we declared on September 25, 2023, which is payable on December 15, 2023 to stockholders of record as of the close of business on December 1, 2023, we intend to declare and pay approximately $3.0 billion in total additional dividends in 2024, with payments occurring each quarter during the year. The dividend amount paid per share is expected to grow by around 10% annually, however, the declaration and payment of future dividends is subject to the discretion of our Board of Directors and will depend on financial and legal requirements and other considerations. The amount available under the 2023-2024 Stockholder Return Program for share repurchases will be reduced by the amount of any cash dividends declared by the Company.

Under the 2023-2024 Stockholder Return Program, share repurchases can be made from time to time using a variety of methods, which may include open market purchases, Rule 10b5-1 plans, accelerated share repurchases, privately negotiated transactions or otherwise, all in accordance with the rules of the Securities and Exchange Commission and other applicable legal requirements. The specific timing and amount of any share repurchases, and the specific timing and amount of any dividend payments, under the 2023-2024 Stockholder Return Program will depend on prevailing share prices, general economic and market conditions, Company performance and other considerations. In addition, the specific timing and amount of any dividend payments are subject to declaration on future dates by the Board in its sole discretion. The 2023-2024 Stockholder Return Program does not obligate the Company to acquire any particular amount of common stock or to declare and pay any particular amount of dividends, and the 2023-2024 Stockholder Return Program may be suspended or discontinued at any time at the Company’s discretion.

In addition, the threshold price that would trigger the issuance of additional shares of T-Mobile common stock to SoftBank under the Letter Agreement is subject to downward adjustment by the per share amount of any cash dividends or other cash distributions declared or paid on the Company’s common stock during the measurement period set forth in the Letter Agreement. As a result, any declaration of cash dividends could potentially result in the issuance of shares of T-Mobile common stock to SoftBank under the Letter Agreement based on the lower threshold price that would not otherwise occur without the cash dividends, which would cause the interests of our stockholders to be diluted.
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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 September 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)
July 1, 2023 - July 31, 2023 5,711,470  $ 139.81  5,711,470  $ 1,910 
August 1, 2023 - August 31, 2023 7,881,202  136.50  7,881,202  834 
September 1, 2023 - September 30, 2023 5,720,487  139.89  5,720,487  18,255 
Total 19,313,159  19,313,159 
(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. On September 6, 2023, our Board of Directors authorized our 2023-2024 Stockholder Return Program of up to an additional $19.0 billion that will run through December 31, 2024. The amounts presented represent the remaining shares authorized for purchase under the 2022 Stock Repurchase Program and the 2023-2024 Stockholder Return Program as of the end of the period. The amount available under the 2023-2024 Stockholder Return Program for share repurchases has been reduced by the $745 million of cash dividends declared by us on September 25, 2023.

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 - Stockholder Return Programs of the Notes to the Condensed Consolidated Financial Statements for more information about our 2022 Stock Repurchase Program and 2023-2024 Stockholder Return Program.

Item 3. Defaults Upon Senior Securities

None.

Item 4. Mine Safety Disclosures

Not applicable.

Item 5. Other Information

On September 13, 2023, Deeanne King, Executive Vice President and Chief People Officer, adopted a trading plan intended to satisfy Rule 10b5-1(c) to sell up to 24,328 shares of T-Mobile US, Inc. common stock between December 13, 2023, and September 12, 2024, for a total duration of 274 days, subject to certain conditions.

On September 14, 2023, Dara Bazzano, Senior Vice President and Chief Accounting Officer, adopted a trading plan intended to satisfy Rule 10b5-1(c) to sell up to 3,953 shares of T-Mobile US, Inc. common stock between December 13, 2023, and March 15, 2024, for a total duration of 93 days, subject to certain conditions.
57
Table of Contents
Item 6. Exhibits
Incorporated by Reference
Exhibit No. Exhibit Description Form Date of First Filing Exhibit Number Filed Herein
4.1 8-K 9/14/2023 4.2
4.2 8-K 9/14/2023 4.3
10.1 X
10.2 X
10.3* X
10.4 X
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.
58
Table of Contents
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.
October 25, 2023 /s/ Peter Osvaldik
Peter Osvaldik
Executive Vice President and Chief Financial Officer
(Principal Financial Officer and Authorized Signatory)

59
EX-10.1 2 tmus09302023ex101.htm TMUS EXHIBIT 10.1 Document
EXHIBIT 10.1
AMENDMENT NO. 1 TO THE
AMENDED AND RESTATED LICENSE PURCHASE AGREEMENT BY AND AMONG T-MOBILE USA, INC., T-MOBILE LICENSE LLC, NEXTEL WEST CORP., AND CHANNEL 51 LICENSE CO LLC DATED AS OF MARCH 30, 2023
AND
TO THE LICENSE PURCHASE AGREEMENT BY AND AMONG T-MOBILE USA, INC., T-MOBILE LICENSE LLC, NEXTEL WEST CORP., AND CHANNEL 51 LICENSE CO LLC DATED AS OF MARCH 30, 2023

THIS AMENDMENT NO. 1 (this “Amendment”), dated as of August 25, 2023, to the Amended and Restated License Purchase Agreement By and Among T-Mobile USA, Inc., T-Mobile License LLC, Nextel West Corp., and Channel 51 License Co LLC, dated as of March 30, 2023 (the “First Closing License Purchase Agreement”) and to the License Purchase Agreement By and Among T-Mobile USA, Inc., T-Mobile License LLC, Nextel West Corp., and Channel 51 License Co LLC, dated as of March 30, 2023 (the “Second Closing License Purchase Agreement”), is entered into by and among (i) T-MOBILE USA, INC., a Delaware corporation (“T-Mobile”), T-MOBILE LICENSE LLC, a Delaware limited liability company (“T-Mobile License”), and NEXTEL WEST CORP., a Delaware corporation (“Nextel” and collectively with T-Mobile and T-Mobile License, the “T-Mobile Parties”), and (ii) CHANNEL 51 LICENSE CO LLC, a Delaware limited liability company (“Channel 51” or the “Seller”). Each T-Mobile Party and the Seller is a “Party,” and the T-Mobile Parties and the Seller are the “Parties”; provided that as the context requires (i.e., when the applicable provision describes a two-party relationship or interaction), the T-Mobile Parties, collectively, shall be deemed to be a single Party. Capitalized terms used herein without definition shall have the respective meanings attributed thereto in the First Closing License Purchase Agreement and the Second Closing License Purchase Agreement.

WHEREAS the Parties agreed that certain Seller Licenses would be included in and subject to the terms of the First Closing License Purchase Agreement and other Seller Licenses would be included in and subject to the terms of the Second Closing License Purchase Agreement;

WHEREAS, the Parties have agreed that it is in their mutual best interests to reallocate the Seller License for the Chicago, Illinois market originally scheduled for sale in the First Closing License Purchase Agreement to be scheduled for sale in the Second Closing License Purchase Agreement; and

WHEREAS, the undersigned Parties desire to amend the First Closing License Purchase Agreement and the Second Closing License Purchase Agreement to reflect this reallocation of the Chicago, Illinois Seller License to the Second Closing License Purchase Agreement.

NOW, THEREFORE, in consideration of the foregoing and for other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the undersigned Parties hereby agree as follows:

1.     Amend and Restate Recitals for the First Closing License Purchase Agreement and Second Closing License Purchase Agreement. The recitals of both agreements are amended and restated in their entirety as follows:

    (a)    The recitals of the First Closing License Purchase Agreement are hereby deleted in their entirety and replaced with the following:




“WHEREAS, the Seller holds the 600 MHz licenses granted by the FCC that are identified in Schedule A (the “Seller Licenses”) for the Houston, Texas, Los Angeles, California and Boston, Massachusetts markets;

WHEREAS, the Seller leases the Seller Licenses to T-Mobile License pursuant to a spectrum lease identified by ULS Application File No. 0009021213 (as amended and restated concurrently with the execution and delivery of this Agreement, the “Existing Lease”);

WHEREAS, the T-Mobile Parties and Seller are party to the License Purchase Agreement, dated as of August 8, 2022, pursuant to which Seller has agreed to sell, and the T-Mobile Parties have agreed to purchase, the Seller Licenses (and the 600 MHz licenses granted by the FCC subject to the Second Closing License Purchase Agreement (as defined below)) in the manner and subject to the terms and conditions set forth therein, with respect to which Nextel became a party pursuant to the Assignment and Joinder, dated as of September 2, 2022 (collectively, the “Original Agreement”);

WHEREAS, the Parties desire to amend and restate the Original Agreement in its entirety on the terms and conditions set forth in this Agreement;

WHEREAS, concurrently with the execution and delivery of this Agreement, the Parties are entering into a license purchase agreement (the “Second Closing License Purchase Agreement”) pursuant to which the T-Mobile Parties will purchase from Seller and Seller will sell to the T-Mobile Parties additional 600 MHz licenses granted by the FCC (for the Chicago, Illinois and New Orleans, Louisiana markets, as more specifically identified therein); and

WHEREAS, concurrently with the execution and delivery of this Agreement, the T-Mobile Parties and LB License Co, LLC (“LB License”) are entering into (i) an amended and restated license purchase agreement (the “LB First Closing License Purchase Agreement”) pursuant to which the T-Mobile Parties will purchase from LB License and LB License will sell to the T-Mobile Parties, certain 600 MHz licenses granted by the FCC (for the St. Louis, Missouri, Salt Lake City, Utah, Atlanta, Georgia, San Francisco, California, Tampa, Florida, Columbus, Ohio, Minneapolis-St. Paul, Minnesota, Seattle, Washington, Philadelphia, Pennsylvania, Baltimore, Maryland – Washington, DC and Phoenix, Arizona markets, as more specifically identified therein) and (ii) a license purchase agreement pursuant to which the T-Mobile Parties will purchase from LB License and LB License will sell to the T-Mobile Parties, additional 600 MHz licenses granted by the FCC (for the Dallas, Texas market, as more specifically identified therein).”

    (b)    The recitals of the Second Closing License Purchase Agreement are hereby deleted in their entirety and replaced with the following:


WHEREAS, the Seller leases the Seller Licenses to T-Mobile License pursuant to a spectrum lease identified by ULS Application File No. 0009021213 (as amended and restated concurrently with the execution and delivery of this Agreement, the “Existing Lease”);

2



“WHEREAS, the Seller holds the 600 MHz licenses granted by the FCC that are identified in Schedule A (the “Seller Licenses”) for the Chicago, Illinois and New Orleans, Louisiana markets; WHEREAS, concurrently with the execution and delivery of this Agreement, the Parties are entering into an amended and restated license purchase agreement (the “First Closing License Purchase Agreement”) pursuant to which the T-Mobile Parties will purchase from Seller and Seller will sell to the T-Mobile Parties certain 600 MHz licenses granted by the FCC (for the Houston, Texas, Los Angeles, California and Boston, Massachusetts markets, as more specifically identified therein); and

WHEREAS, concurrently with the execution and delivery of this Agreement, the T-Mobile Parties and LB License Co, LLC (“LB License”) are entering into (i) an amended and restated license purchase agreement pursuant to which the T-Mobile Parties will purchase from LB License and LB License will sell to the T-Mobile Parties, certain 600 MHz licenses granted by the FCC (for the St. Louis, Missouri, Salt Lake City, Utah, Atlanta, Georgia, San Francisco, California, Tampa, Florida, Columbus, Ohio, Minneapolis-St. Paul, Minnesota, Seattle, Washington, Philadelphia, Pennsylvania, Baltimore, Maryland and Phoenix, Arizona markets, as more specifically identified therein) and (ii) a license purchase agreement pursuant to which the T-Mobile Parties will purchase from LB License and LB License will sell to the T-Mobile Parties, additional 600 MHz licenses granted by the FCC (for the Dallas, Texas market, as more specifically identified therein).”

2.    Amend and Restate Schedule A for the First Closing License Purchase Agreement and Second Closing License Purchase Agreement. Attachment 1 to this Amendment amends and restates in full the Schedule A Seller Licenses in the First Closing License Purchase Agreement, and Attachment 2 to this Amendment amends and restates the Schedule A Seller Licenses in the Second Closing License Purchase Agreement.

3.    Aggregate Purchase Price Updates. The aggregate purchase prices in both agreements are modified and amended as follows:

    (a)    The first paragraph of Section 2.1(b) of the First Closing License Purchase Agreement is hereby amended and restated as follows:

“(b)    In consideration for the grant, sale, conveyance, assignment, transfer and delivery of the Seller Licenses as set forth in Section 2.1(a), the T-Mobile Parties shall pay or cause to be paid, an aggregate amount in Cash equal to One Billion Two Hundred Eighty Million One Hundred Eighty-One Thousand Four Hundred Three Dollars ($1,280,181,403), less the applicable prepaid amount under the Existing Lease in accordance with Section 5.6(c) (the “Purchase Price”), which shall be payable as follows:”

    (b)    Exhibit B-1 Confession of Judgment of the First Closing License Purchase Agreement Purchase Price Payment reference “ONE BILLION FIVE HUNDRED SEVENTY-TWO MILLION SIX HUNDRED SEVENTY-TWO THOUSAND SIX HUNDRED EIGHT DOLLARS ($1,572,672,608)” is hereby deleted and replaced with “ONE BILLION TWO HUNDRED EIGHTY MILLION ONE HUNDRED EIGHTY-ONE THOUSAND FOUR HUNDRED THREE DOLLARS ($1,280,181,403).”

    (c)    Section 5 of Exhibit B-2 of the First Closing License Purchase Agreement principal amount reference “ONE BILLION FIVE HUNDRED SEVENTY-TWO MILLION SIX HUNDRED SEVENTY-TWO THOUSAND SIX HUNDRED EIGHT DOLLARS ($1,572,672,608)” is hereby deleted and replaced with “ONE BILLION TWO HUNDRED EIGHTY MILLION ONE HUNDRED EIGHTY-ONE THOUSAND FOUR HUNDRED THREE DOLLARS ($1,280,181,403).”

3



    (d)    The first paragraph of Section 2.1(b) of the Second Closing License Purchase Agreement is hereby amended and restated as follows:

“(b)    In consideration for the grant, sale, conveyance, assignment, transfer and delivery of the Seller Licenses as set forth in Section 2.1(a), the T-Mobile Parties shall pay or cause to be paid, an aggregate amount in Cash equal to Six Hundred Four Million One Hundred Seventy-One Thousand Nine Hundred Dollars ($604,171,900), less the applicable prepaid amount under the Existing Lease in accordance with Section 5.6(c) (the “Purchase Price”), which shall be payable as follows:”

4.    Effect of Amendment. Except as expressly modified pursuant to this Amendment, all of the terms, covenants and provisions of the First Closing License Purchase Agreement and Second Closing License Purchase Agreement shall continue in full force and effect. This Amendment is otherwise subject to the provisions of the First Closing License Purchase Agreement and Second Closing License Purchase Agreement, including without limitation Section 9.6 (Governing Law; Venue; Waiver of Jury Trial).

5.    Counterparts. This Amendment may be executed in any number of counterparts, including by original or facsimile counterparts or other electronic signature, and each such counterpart hereof shall be deemed to be an original instrument, but all such counterparts together shall constitute but one agreement.

[Signature Page follows]
4



IN WITNESS WHEREOF, the Parties hereto have duly executed this Amendment as of the date first above written.

T-MOBILE USA, INC. CHANNEL 51 LICENSE CO LLC
By: Channel 51, LLC, its sole member
By: /s/ Peter Osvaldik
By: /s/ Paul Chisholm
Name: Peter Osvaldik Name: Paul Chisholm
Title: Chief Financial Officer Title: Managing Member
T-MOBILE LICENSE LLC
By: /s/ Peter Osvaldik
Name: Peter Osvaldik
Title: Chief Financial Officer
NEXTEL WEST CORP.
By: /s/ Peter Osvaldik
Name: Peter Osvaldik
Title: Chief Financial Officer
    
                


    
    
[Signature Page to Amendment No. 1 dated as of August 25, 2023, to the Amended And Restated License Purchase Agreement By and Among T-Mobile USA, Inc., T-Mobile License LLC, Nextel West Corp., and Channel 51 License Co LLC dated as of March 30, 2023 and to the License Purchase Agreement By and Among T-Mobile USA, Inc., T-Mobile License LLC, Nextel West Corp., and Channel 51 License Co LLC, dated as of March 30, 2023]
Attachment 1 – SCHEDULE A TO AMENDED AND RESTATED LICENSE PURCHASE AGREEMENT BY AND AMONG T-MOBILE USA, INC., T-MOBILE LICENSE LLC, NEXTEL WEST CORP., AND CHANNEL 51 LICENSE CO LLC DATED AS OF MARCH 30, 2023

SCHEDULE A

Seller Licenses

FCC Callsign Market Number - Market Name Block Service Licensee/Seller Assignee* Purchase Price Allocation**
WRCQ549 PEA010 - Houston, TX E 600 MHz Channel 51 License Co LLC Nextel West Corp.
WRCQ550 PEA010 - Houston, TX F 600 MHz Channel 51 License Co LLC Nextel West Corp.
WRCQ553 PEA002 - Los Angeles, CA F 600 MHz Channel 51 License Co LLC Nextel West Corp.
WRCQ555 PEA007 - Boston, MA D 600 MHz Channel 51 License Co LLC Nextel West Corp.
WRCQ556 PEA007 - Boston, MA E 600 MHz Channel 51 License Co LLC Nextel West Corp.

*Subject to Section 9.1.

**Between the date of this Agreement and the Closing, the Parties shall discuss in good faith an allocation of the Purchase Price among the Seller Licenses, it being understood that the Parties shall be under no obligation to agree to an allocation or to file tax returns consistent with any agreed allocation.  Any such allocation shall be solely for tax purposes and not for any other purpose related to this Agreement or the transactions contemplated hereby. In no event shall there be any adjustment to the Purchase Price payable to the Seller pursuant to this Agreement based on any such allocation.



Attachment 2 – SCHEDULE A TO LICENSE PURCHASE AGREEMENT BY AND AMONG T-MOBILE USA, INC., T-MOBILE LICENSE LLC, NEXTEL WEST CORP., AND CHANNEL 51 LICENSE CO LLC DATED AS OF MARCH 30, 2023

SCHEDULE A

Seller Licenses

FCC Callsign Market Number - Market Name Block Service Licensee/Seller Assignee* Purchase Price Allocation
WRCQ551 PEA003 - Chicago, IL E 600 MHz Channel 51 License Co LLC Nextel West Corp. $292,491,205
WRCQ552 PEA003 - Chicago, IL F 600 MHz Channel 51 License Co LLC Nextel West Corp. $292,491,205
WRCQ554 PEA036 - New Orleans, LA E 600 MHz Channel 51 License Co LLC T-Mobile License LLC $19,189,490

*Subject to Section 9.1.

EX-10.2 3 tmus09302023ex102.htm TMUS EXHIBIT 10.2 Document
EXHIBIT 10.2
AMENDMENT NO. 1 TO THE
AMENDED AND RESTATED LICENSE PURCHASE AGREEMENT BY AND AMONG T-MOBILE USA, INC., T-MOBILE LICENSE LLC, NEXTEL WEST CORP., AND LB LICENSE CO, LLC DATED AS OF MARCH 30, 2023
AND
TO THE LICENSE PURCHASE AGREEMENT BY AND AMONG T-MOBILE USA, INC., T-MOBILE LICENSE LLC, NEXTEL WEST CORP., AND LB LICENSE CO, LLC DATED AS OF MARCH 30, 2023

THIS AMENDMENT NO. 1 (this “Amendment”), dated as of August 25, 2023, to the Amended and Restated License Purchase Agreement By and Among T-Mobile USA, Inc., T-Mobile License LLC, Nextel West Corp., and LB License Co, LLC, dated as of March 30, 2023 (the “First Closing License Purchase Agreement”) and to the License Purchase Agreement By and Among T-Mobile USA, Inc., T-Mobile License LLC, Nextel West Corp., and LB License Co, LLC, dated as of March 30, 2023 (the “Second Closing License Purchase Agreement”), is entered into by and among (i) T-MOBILE USA, INC., a Delaware corporation (“T-Mobile”), T-MOBILE LICENSE LLC, a Delaware limited liability company (“T-Mobile License”), and NEXTEL WEST CORP., a Delaware corporation (“Nextel” and collectively with T-Mobile and T-Mobile License, the “T-Mobile Parties”), and (ii) LB LICENSE CO, LLC, a Delaware limited liability company (“LB License” or the “Seller”). Each T-Mobile Party and the Seller is a “Party,” and the T-Mobile Parties and the Seller are the “Parties”; provided that as the context requires (i.e., when the applicable provision describes a two-party relationship or interaction), the T-Mobile Parties, collectively, shall be deemed to be a single Party. Capitalized terms used herein without definition shall have the respective meanings attributed thereto in the First Closing License Purchase Agreement and the Second Closing License Purchase Agreement.

WHEREAS the Parties agreed that certain Seller Licenses would be included in and subject to the terms of the First Closing License Purchase Agreement and other Seller Licenses would be included in and subject to the terms of the Second Closing License Purchase Agreement;

WHEREAS, the Parties have agreed that it is in their mutual best interests to reallocate the Seller Licenses for the Dallas, Texas market originally scheduled for sale in the First Closing License Purchase Agreement to be scheduled for sale in the Second Closing License Purchase Agreement; and

WHEREAS, the undersigned Parties desire to amend the First Closing License Purchase Agreement and the Second Closing License Purchase Agreement to reflect this reallocation of the Dallas, Texas Seller Licenses to the Second Closing License Purchase Agreement.

NOW, THEREFORE, in consideration of the foregoing and for other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the undersigned Parties hereby agree as follows:

1.     Amend and Restate Recitals for the First Closing License Purchase Agreement and Second Closing License Purchase Agreement. The recitals of both agreements are amended and restated in their entirety as follows:

    (a)    The recitals of the First Closing License Purchase Agreement are hereby deleted in their entirety and replaced with the following:

“WHEREAS, the Seller holds the 600 MHz licenses granted by the FCC that are identified in Schedule A (the “Seller Licenses”) for the St. Louis, Missouri, Salt Lake City, Utah, Atlanta, Georgia, San Francisco, California, Tampa, Florida, Columbus, Ohio, Minneapolis-St.



Paul, Minnesota, Seattle, Washington, Philadelphia, Pennsylvania, Baltimore, Maryland – Washington, DC and Phoenix, Arizona markets;

WHEREAS, the Seller leases the Seller Licenses to T-Mobile License pursuant to a spectrum lease identified by ULS Application File No. 0009021220 (as amended and restated concurrently with the execution and delivery of this Agreement, the “Existing Lease”);

WHEREAS, the T-Mobile Parties and Seller are party to the License Purchase Agreement, dated as of August 8, 2022, pursuant to which Seller has agreed to sell, and the T-Mobile Parties have agreed to purchase, the Seller Licenses (and the 600 MHz licenses granted by the FCC subject to the Second Closing License Purchase Agreement (as defined below)) in the manner and subject to the terms and conditions set forth therein, with respect to which Nextel became a party pursuant to the Assignment and Joinder, dated as of September 2, 2022 (collectively, the “Original Agreement”);

WHEREAS, the Parties desire to amend and restate the Original Agreement in its entirety on the terms and conditions set forth in this Agreement;

WHEREAS, concurrently with the execution and delivery of this Agreement, the Parties are entering into a license purchase agreement (the “Second Closing License Purchase Agreement”) pursuant to which the T-Mobile Parties will purchase from Seller and Seller will sell to the T-Mobile Parties additional 600 MHz licenses granted by the FCC (for the Dallas, Texas market, as more specifically identified therein); and

WHEREAS, concurrently with the execution and delivery of this Agreement, the T-Mobile Parties and Channel 51 License Co LLC (“Channel 51”) are entering into (i) an amended and restated license purchase agreement (the “Channel 51 First Closing License Purchase Agreement”) pursuant to which the T-Mobile Parties will purchase from Channel 51 and Channel 51 will sell to the T-Mobile Parties, certain 600 MHz licenses granted by the FCC (for the Houston, Texas, Los Angeles, California and Boston, Massachusetts markets, as more specifically identified therein) and (ii) a license purchase agreement pursuant to which the T-Mobile Parties will purchase from Channel 51 and Channel 51 will sell to the T-Mobile Parties, additional 600 MHz licenses granted by the FCC (for the Chicago, Illinois and New Orleans, Louisiana markets, as more specifically identified therein).”

    (b)    The recitals of the Second Closing License Purchase Agreement are hereby deleted in their entirety and replaced with the following:

“WHEREAS, the Seller holds the 600 MHz licenses granted by the FCC that are identified in Schedule A (the “Seller Licenses”) for the Dallas, Texas market;

WHEREAS, the Seller leases the Seller Licenses to T-Mobile License pursuant to a spectrum lease identified by ULS Application File No. 0009021220 (as amended and restated concurrently with the execution and delivery of this Agreement, the “Existing Lease”);

WHEREAS, concurrently with the execution and delivery of this Agreement, the Parties are entering into an amended and restated license purchase agreement (the “First Closing License Purchase Agreement”) pursuant to which the T-Mobile Parties will purchase from Seller and Seller will sell to the T-Mobile Parties certain 600 MHz licenses granted by the FCC (for the St. Louis, Missouri, Salt Lake City, Utah, Atlanta, Georgia, San Francisco, California, Tampa, Florida, Columbus, Ohio, Minneapolis-St.
2



Paul, Minnesota, Seattle, Washington, Philadelphia, Pennsylvania, Baltimore, Maryland – Washington, DC and Phoenix, Arizona markets); and

WHEREAS, concurrently with the execution and delivery of this Agreement, the T-Mobile Parties and Channel 51 License Co LLC (“Channel 51”) are entering into (i) an amended and restated license purchase agreement pursuant to which the T-Mobile Parties will purchase from Channel 51 and Channel 51 will sell to the T-Mobile Parties, certain 600 MHz licenses granted by the FCC (for the Houston, Texas, Los Angeles, California and Boston, Massachusetts markets, as more specifically identified therein) and (ii) a license purchase agreement pursuant to which the T-Mobile Parties will purchase from Channel 51 and Channel 51 will sell to the T-Mobile Parties, additional 600 MHz licenses granted by the FCC (for the Chicago, Illinois and New Orleans, Louisiana markets, as more specifically identified therein).”

2.    Amend and Restate Schedule A for the First Closing License Purchase Agreement and Second Closing License Purchase Agreement. Attachment 1 to this Amendment amends and restates in full the Schedule A Seller Licenses in the First Closing License Purchase Agreement, and Attachment 2 to this Amendment amends and restates the Schedule A Seller Licenses in the Second Closing License Purchase Agreement.

3.    Aggregate Purchase Price Updates. The aggregate purchase prices in both agreements are modified and amended as follows:

    (a)    The first paragraph of Section 2.1(b) of the First Closing License Purchase Agreement is hereby amended and restated as follows:

“(b)    In consideration for the grant, sale, conveyance, assignment, transfer and delivery of the Seller Licenses as set forth in Section 2.1(a), the T-Mobile Parties shall pay or cause to be paid, an aggregate amount in Cash equal to One Billion Seventy-Four Million Six Hundred Ninety-Six Thousand Four Hundred Sixty-Five Dollars ($1,074,696,465), less the applicable prepaid amount under the Existing Lease in accordance with Section 5.6(c) (the “Purchase Price”), which shall be payable as follows:”

    (b)    Exhibit B-1 Confession of Judgment of the First Closing License Purchase Agreement Purchase Price Payment reference “ONE BILLION FOUR HUNDRED THIRTY-FIVE MILLION THREE HUNDRED TWENTY-NINE THOUSAND NINE HUNDRED FIFTY-THREE DOLLARS ($1,435,329,953)” is hereby deleted and replaced with “ONE BILLION SEVENTY-FOUR MILLION SIX HUNDRED NINETY-SIX THOUSAND FOUR HUNDRED SIXTY-FIVE DOLLARS ($1,074,696,465).”

    (c)    Section 5 of Exhibit B-2 of the First Closing License Purchase Agreement principal amount reference “ONE BILLION FOUR HUNDRED THIRTY-FIVE MILLION THREE HUNDRED TWENTY-NINE THOUSAND NINE HUNDRED FIFTY-THREE DOLLARS ($1,435,329,953)” is hereby deleted and replaced with “ONE BILLION SEVENTY-FOUR MILLION SIX HUNDRED NINETY-SIX THOUSAND FOUR HUNDRED SIXTY-FIVE DOLLARS ($1,074,696,465).”

    (d)    The first paragraph of Section 2.1(b) of the Second Closing License Purchase Agreement is hereby amended and restated as follows:

“(b) In consideration for the grant, sale, conveyance, assignment, transfer and delivery of the Seller Licenses as set forth in Section 2.1(a), the T-Mobile Parties shall pay or cause to be paid, an aggregate amount in Cash equal to Five Hundred Forty Million Nine Hundred Fifty Thousand Two Hundred Thirty-Two Dollars ($540,950,232), less the applicable prepaid amount under the Existing Lease in accordance with Section 5.6(c) (the “Purchase Price”), which shall be payable as follows:”
3




4.    Effect of Amendment. Except as expressly modified pursuant to this Amendment, all of the terms, covenants and provisions of the First Closing License Purchase Agreement and Second Closing License Purchase Agreement shall continue in full force and effect. This Amendment is otherwise subject to the provisions of the First Closing License Purchase Agreement and Second Closing License Purchase Agreement, including without limitation Section 9.6 (Governing Law; Venue; Waiver of Jury Trial).

5.    Counterparts. This Amendment may be executed in any number of counterparts, including by original or facsimile counterparts or other electronic signature, and each such counterpart hereof shall be deemed to be an original instrument, but all such counterparts together shall constitute but one agreement.

[Signature Page follows]
4



IN WITNESS WHEREOF, the Parties hereto have duly executed this Amendment as of the date first above written.
T-MOBILE USA, INC LB LICENSE CO, LLC
By: /s/ Peter Osvaldik
By: /s/ Monish Kundra
Name: Peter Osvaldik Name: Monish Kundra
Title: Chief Financial Officer Title: Authorized Signatory
T-MOBILE LICENSE LLC
By: /s/ Peter Osvaldik
Name: Peter Osvaldik
Title: Chief Financial Officer
NEXTEL WEST CORP.
By: /s/ Peter Osvaldik
Name: Peter Osvaldik
Title: Chief Financial Officer
                


    
    
[Signature Page to Amendment No. 1 dated as of August 25, 2023, to the Amended And Restated License Purchase Agreement By and Among T-Mobile USA, Inc., T-Mobile License LLC, Nextel West Corp., and LB License Co, LLC dated as of March 30, 2023 and to the License Purchase Agreement By and Among T-Mobile USA, Inc., T-Mobile License LLC, Nextel West Corp., and LB License Co, LLC, dated as of March 30, 2023]
Attachment 1 – SCHEDULE A TO AMENDED AND RESTATED LICENSE PURCHASE AGREEMENT BY AND AMONG T-MOBILE USA, INC., T-MOBILE LICENSE LLC, NEXTEL WEST CORP., AND LB LICENSE CO, LLC DATED AS OF MARCH 30, 2023

SCHEDULE A

Seller Licenses
FCC Callsign Market Number - Market Name

Block

Service
 Licensee/ Seller

Assignee*
 Purchase Price Allocation**
WQZM718 PEA024 - Saint Louis, MO A 600 MHz LB License Co, LLC Nextel West Corp.
WQZM719 PEA024 - Saint Louis, MO B 600 MHz LB License Co, LLC Nextel West Corp.
WQZM720 PEA027 - Salt Lake City, UT D 600 MHz LB License Co, LLC Nextel West Corp.
WQZM721 PEA011 - Atlanta, GA D 600 MHz LB License Co, LLC T-Mobile License LLC
WQZM724 PEA004 - San Francisco, CA D 600 MHz LB License Co, LLC Nextel West Corp.
WQZM726 PEA021 - Tampa, FL E 600 MHz LB License Co, LLC Nextel West Corp.
WQZM728 PEA037 - Columbus, OH A 600 MHz LB License Co, LLC Nextel West Corp.
WQZM729 PEA037 - Columbus, OH B 600 MHz LB License Co, LLC Nextel West Corp.
WQZM731 PEA017 - Minneapolis-St. Paul, MN E 600 MHz LB License Co, LLC Nextel West Corp.
WQZM732 PEA016 - Seattle, WA E 600 MHz LB License Co, LLC T-Mobile License LLC
WQZM733 PEA006 - Philadelphia, PA E 600 MHz LB License Co, LLC T-Mobile License LLC
WQZM734 PEA005 - Baltimore, MD-Washington, DC E 600 MHz LB License Co, LLC T-Mobile License LLC
WQZM740 PEA015 - Phoenix, AZ E 600 MHz LB License Co, LLC Nextel West Corp.

* Subject to Section 9.1.

** Between the date of this Agreement and the Closing, the Parties shall discuss in good faith an allocation of the Purchase Price among the Seller Licenses, it being understood that the Parties shall be under no obligation to agree to an allocation or to file tax returns consistent with any agreed allocation.  Any such allocation shall be solely for tax purposes and not for any other purpose related to this Agreement or the transactions contemplated hereby. In no event shall there be any adjustment to the Purchase Price payable to the Seller pursuant to this Agreement based on any such allocation.
Attachment 2 – SCHEDULE A TO LICENSE PURCHASE AGREEMENT BY AND AMONG T-MOBILE USA, INC., T-MOBILE LICENSE LLC, NEXTEL WEST CORP., AND LB LICENSE CO, LLC DATED AS OF MARCH 30, 2023


SCHEDULE A

Seller Licenses

FCC Callsign Market Number - Market Name

Block

Service

Licensee/Seller

Assignee*
 Purchase Price Allocation
WQZM735 PEA008 - Dallas, TX C 600 MHz LB License Co, LLC Nextel West Corp. $180,316,744
WQZM736 PEA008 - Dallas, TX D 600 MHz LB License Co, LLC Nextel West Corp. $180,316,744
WQZM737 PEA008 - Dallas, TX E 600 MHz LB License Co, LLC Nextel West Corp. $180,316,744

*Subject to Section 9.1.

EX-10.3 4 tmus09302023ex103.htm TMUS EXHIBIT 10.3 Document
EXHIBIT 10.3
T-MOBILE US, INC.
12920 SE 38th Street
Bellevue, WA 98006-1350
8/24/2023

Peter Ewens
8620 NE 21st Place
Clyde Hill, WA 98004

RE: Eligibility for Certain Payments and Benefits
Dear Peter:
This letter (the “Letter”) outlines certain payments and benefits that you will be eligible for upon your retirement from T-Mobile US, Inc. (the “Company”) on February 1, 2024 (the “Retirement Date”, and your retirement on the Retirement Date, the “Retirement”).
1.STI Award: Notwithstanding anything in the T-Mobile US, Inc. 2013 Omnibus Incentive Plan, as amended from time to time, and any successor plan thereto (the “Omnibus Plan”) or in the award agreement between you and the Company evidencing the grant of a short-term annual incentive award for the 2024 calendar year (the “2024 STI Award”, and such agreement, the “STI Award Agreement”), upon your Retirement, the Company will pay you a pro-rated 2024 STI Award, calculated based on target performance, and pro-rated based on the number of days you were employed by the Company during the 2024 calendar year (the “Pro-Rata STI Award”). The Pro-Rata STI Award will be paid to you within seventy-four (74) days following the Retirement Date. For the avoidance of doubt, in accordance with the terms of the award agreement between you and the Company evidencing the grant of a short-term annual incentive award for the 2023 calendar year (the "2023 STI Award", and together with the 2024 STI Award, the "STI Awards"), the 2023 STI Award, to the extent earned by you in accordance with the terms and conditions of such award agreement and unpaid as of your Retirement Date, will be paid to you on the date on which short-term annual incentive awards for calendar year 2023 are paid to similarly situated executives of the Company.

2.RSUs and PRSUs: Notwithstanding anything in the Omnibus Plan or in any award agreement between you and the Company evidencing the grant of an award of time-based restricted stock units ("RSUs") or performance-based restricted stock units (“PRSUs”) (as applicable) (each, an "LTI Award Agreement'') (including any continued employment or continued service requirements set forth therein that would, absent this Letter, apply to the vesting and payment of your then-outstanding RSUs or PRSUs, as applicable), (a) no further RSUs or PRSUs shall be granted to you following the date of this Letter, and (b) upon your Retirement, your then-outstanding RSUs and PRSUs will be subject to the following provisions:

a.RSUs. Upon your Retirement, your then-outstanding and unvested RSUs will remain outstanding and will continue to vest and be paid to you in accordance with the terms of the applicable LTI Award Agreement.

EXHIBIT 10.3
b.PRSUs. Upon your Retirement, your then-outstanding and unvested PRSUs will remain outstanding and will continue to be eligible to vest and be paid to you in accordance with the terms of the applicable LTI Award Agreement; provided, however, that the number of PRSUs that vest and become payable to you, and the Adjustment Percentage (as defined in the applicable LTI Award Agreement), shall be determined based on the lesser of (i) the actual level of attainment of the applicable performance measures during the applicable Performance Period (as defined in the applicable LTI Award Agreement), as determined by the Company following the conclusion of the Performance Period, or (ii) the actual level of attainment of the applicable performance measures during the portion of the applicable Performance Period ending on the Retirement Date (i.e., determined as if the applicable Performance Period had ended on the Retirement Date), as determined by the Company.
c.Death; Disability. Notwithstanding Sections 2(a) and (b) above, in the event of your death or Disability (as defined in the Omnibus Plan) following your Retirement but prior to the last date on which any RSUs and PRSUs become vested in accordance with Sections 2(a) and (b) above, your then-outstanding and unvested RSUs and PRSUs will vest in full (without pro-ration and, with respect to the PRSUs, at the target level of performance) on the date of your death or Disability and be paid to you within sixty (60) days following the date of such death or Disability.

3.COBRA Benefits: During the period commencing on the Retirement Date and ending on the earlier of the end of the last day of the eighteenth (18th) calendar month following the Retirement Date or, if earlier, the date on which you become eligible for coverage under a subsequent employer’s group medical and dental plans (in either case, the “COBRA Period”), subject to your valid election to continue healthcare coverage under Section 4980B of the Internal Revenue Code of 1986, as amended (the “Code”), and the regulations thereunder, the Company will continue to provide to you and your dependents, at the Company’s sole expense, coverage under its group medical and dental plans at the same levels in effect on the Retirement Date; provided, however, that if (a) any plan pursuant to which such benefits are provided is not, or ceases prior to the expiration of the continuation coverage period to be, exempt from the application of Section 409A of the Code under Treasury Regulation Section 1.409A-1(a)(S), (b) the Company is otherwise unable to continue to cover you or your dependents under its group health plans, or (c) the Company cannot provide the benefit without violating applicable law (including, without limitation, Section 2716 of the Public Health Service Act), then, in any such case, an amount equal to the dollar value of the balance of the Company’s subsidy shall thereafter be paid to you in substantially equal, then-currently-taxable monthly instalments over the COBRA Period (or remaining portion thereof) (collectively, the “COBRA Benefits”).

4.Continued Mobile Service Discount: Following your Retirement, you shall continue to be eligible for the Company’s employee mobile service discount program, in accordance with the terms of such program as in effect from time to time during such period (the “Continued Mobile Discounts”).

5.Release Requirement and Restrictive Covenants: Notwithstanding anything herein or in any applicable STI Award Agreement and any LTI Award Agreement (collectively, the "Award Agreements") to the contrary, you will not be eligible to receive any of the payments and benefits described in Sections 1 through 4 (other than the 2023 STI Award) above unless (i) you execute and do not revoke a release of claims in a form prescribed by the Company (the “Release”) that becomes effective and irrevocable no later than sixty (60) days following the Retirement Date (the date on which such Release becomes effective and irrevocable, the

EXHIBIT 10.3
"Release Effective Date'') and (ii) you continue to comply with the terms and conditions of the Restrictive Covenant Agreement (as defined below), subject to written notice and an opportunity to cure any noncompliance if reasonably capable of cure no later than ten (10) days following your receipt of such notice.

If the aggregate period during which you are entitled to consider and/or revoke the Release spans two calendar years, no payments under this Letter will be made prior to the beginning of the second such calendar year (and any payments otherwise payable prior thereto (if any) will instead be paid on the first regularly scheduled Company payroll date occurring in the latter such calendar year or, if later, on the first regularly scheduled Company payroll date following the Release Effective Date).

6.Exclusions; Amendment; No Other Modifications: Your Award Agreements will be deemed amended to the extent necessary to reflect this Letter. Except as otherwise expressly set forth in this Letter, the terms and conditions set forth in the Omnibus Plan and the Award Agreements will continue to apply to your STI Awards, RSUs and PRSUs following the date of this Letter.

7.Restrictive Covenants: Notwithstanding anything herein or in the Restrictive Covenant and Confidentiality Agreement between you and T-Mobile USA, Inc.(the “Restrictive Covenant Agreement”), the duration of the post-termination "Restricted Period" (as defined in Section 4 of the Restrictive Covenant Agreement) is hereby increased such that it shall extend through the later of one (1) year following your Retirement Date or the last date on which any RSUs and/or PRSUs are paid to you in accordance with the terms of this Letter.

8.Acknowledgement: You acknowledge and agree that during the period between the date of this Letter and the Retirement Date, the Company may change your title and/or your duties, authority or responsibility on behalf of the Company, and any such change shall not be a breach by the Company, of or constitute "good reason" (or any term of comparable effect) under, any agreement between you and the Company or its affiliates or any other plan, program or policy of the Company or its affiliates.

9.No Right to Continued Employment: Nothing contained in this Letter shall confer upon you any right to continue in the employ or service of the Company or affect the right of the Company to terminate your employment or service at any time.

10.No Tax Advice: The Company is not making any warranties or representations to you with respect to the income tax consequences associated with this Letter, the treatment of your STI Awards, RSUs and/or PRSUs contemplated hereunder, the COBRA Benefits or the Continued Mobile Discounts and you are in no manner relying on the Company, its affiliates or any of their respective representatives for an assessment of such tax consequences. You are hereby advised to consult with your own tax advisor with respect to any tax consequences associated with this Letter.

11.Governing Law: This Letter shall be governed by and construed in accordance with the laws of the State of Delaware without giving effect to the principles of conflicts of laws, and applicable federal law.

EXHIBIT 10.3

12.Section 409A: Notwithstanding anything to the contrary in the Omnibus Plan, any LTI Award Agreement or this Letter, if the Company determines that paying any amounts to you in respect of your RSUs and/or PRSUs at the time(s) indicated in any LTI Award Agreement or this Letter (as applicable) would be a prohibited distribution under Section 409A(a)(2)(B)(i) of the Code, then no such payment shall be paid to you prior to the expiration of the six (6)-month period following your "separation from service" with the Company (within the meaning of Section 409A of the Code) if you are a "specified employee" (within the meaning of Section 409A of the Code) on the date of your separation from service (such a delay, the “Six Month Delay”). If the payment of any such amount is subject to the Six Month Delay, 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 resulting in a prohibited distribution, including as a result of your death), the Company shall pay you a lump-sum amount equal to the cumulative amounts that would have otherwise been payable to you during such six (6)-month period (without interest). As of the date of this Letter, the Company intends that the RSUs will be subject to the Six Month Delay and the PRSUs will not be subject to the Six Month Delay. For the purposes of Section 409A of the Code, any right to a series of installment payments pursuant to this Agreement shall be treated as a right to a series of separate payments, and each RSU or PRSU (and any amounts payable in respect thereof) shall be treated separately from each other RSU and PRSU (and any amounts arising in connection therewith).

13.Miscellaneous: This Letter, together with the Omnibus Plan and the Award Agreements, sets forth the final and entire agreement of the parties with respect to the subject matter hereof and supersedes all prior agreements, promises, covenants, arrangements, communications, representations or warranties, whether oral or written, by the Company and you, or any representative of the Company or you, with respect to the subject matter hereof. This Letter may be amended at any time by the Company, provided that no amendment may, without your consent, materially impair your rights under any Award Agreement. This Letter may be executed in one or more counterparts, each of which will be deemed to be an original but all of which together will constitute one and the same instrument.





EXHIBIT 10.3
Please indicate your acknowledgment of, and agreement to, the terms and conditions set forth in this Letter by signing in the space below and returning a signed copy of this Letter to me. Please retain one fully-executed original for your files.

Sincerely,
T-MOBILE US, INC.
By: /s/ Deeanne King
Deeanne King
Executive Vice President, Chief Human Resource Officer
AGREED and ACCEPTED as of the date below:
/s/ Peter Ewens 9/6/2023
Peter Ewens Date


EX-10.4 5 tmus09302023ex104.htm TMUS EXHIBIT 10.4 Document
EXHIBIT 10.4
LICENSE PURCHASE AGREEMENT


by and among

T-MOBILE USA, INC.,
T-MOBILE LICENSE LLC,
T-MOBILE US, INC.,
COMCAST OTR1, LLC,
and
COMCAST CORPORATION


Dated as of September 12, 2023


TABLE OF CONTENTS


    Page

ARTICLE 1 Definitions
ARTICLE 2 PURCHASE AND SALE OF LICENSES
Section 2.1    Purchase and Sale of Licenses
Section 2.2    No Assumption of Liabilities
Section 2.3    Closings
ARTICLE 3 REPRESENTATIONS AND WARRANTIES OF THE COMCAST PARTIES
Section 3.1    Organization
Section 3.2    Power and Authority
Section 3.3    Enforceability
Section 3.4    Non-Contravention
Section 3.5    Compliance With Laws
Section 3.6    Licenses
Section 3.7    Litigation
Section 3.8    No Brokers
Section 3.9    No Other Representations and Warranties
ARTICLE 4 REPRESENTATIONS AND WARRANTIES OF THE T-MOBILE PARTIES
Section 4.1    Organization
Section 4.2    Power and Authority
Section 4.3    Enforceability
Section 4.4    Non-Contravention
Section 4.5    Litigation
Section 4.6    Qualification
Section 4.7    Available Funds
Section 4.8    No Brokers
Section 4.9    No Other Representations and Warranties
ARTICLE 5 COVENANTS AND OTHER AGREEMENTS
Section 5.1    Covenants of the T-Mobile Parties and the Comcast Parties Pending the Closing
Section 5.2    Confidentiality
Section 5.3    Compliance with Licenses and Lease; Non-Solicitation; Notice of Certain Events
Section 5.4    Governmental Filings
Section 5.5    Withholding
ARTICLE 6 CONDITIONS TO CLOSING
Section 6.1    Conditions to the Obligations of the T-Mobile Parties
Section 6.2    Conditions to the Obligations of the Comcast Parties
ARTICLE 7 TERMINATION
Section 7.1    Termination
ARTICLE 8 SURVIVAL AND INDEMNIFICATION
- i -
Section 8.1    Survival
Section 8.2    General Indemnification Obligation
Section 8.3    Limitations
Section 8.4    Indemnification Procedures
Section 8.5    Treatment of Payments
Section 8.6    Exclusive Remedy
ARTICLE 9 MISCELLANEOUS
Section 9.1    Assignment
Section 9.2    Further Assurances
Section 9.3    Entire Agreement; Amendment
Section 9.4    Waiver
Section 9.5    Notices
Section 9.6    Governing Law; Submission to Jurisdiction; Waiver of Jury Trial
Section 9.7    No Benefit to Others
Section 9.8    United States Dollars; Headings, Gender, “Person,” and “including”
Section 9.9    Severability
Section 9.10    Counterparts and Electronic Signatures
Section 9.11    Expenses
Section 9.12    Construction of “License”
Section 9.13    Guaranty



Schedules, Annexes, Exhibits

Schedule A    –    Licenses
Schedule B    –    “Burdensome Condition”
Schedule C    –    Certain Principles for Closings and FCC Application Filings
Schedule D    –    Certain Rights and Obligations Relating to Other Spectrum Transactions
Schedule E    –    Certain License Transfers
Annex 1    –    T-Mobile Existing Spectrum Transactions

Disclosure Schedules
- ii -
EXHIBIT 10.4
LICENSE PURCHASE AGREEMENT
Exhibit A – Form of Instrument of Assignment THIS LICENSE PURCHASE AGREEMENT (this “Agreement”), dated as of September 12, 2023, is entered into by and among (i) T-MOBILE USA, INC., a Delaware corporation (“T-Mobile”), (ii) T-MOBILE LICENSE LLC, a Delaware limited liability company (“T-Mobile License” and collectively with T-Mobile, the “T-Mobile Parties”), (iii) T-Mobile US, Inc., a Delaware corporation (solely for the purposes of Section 9.13) (“Guarantor”), (iv) COMCAST OTR1, LLC, a Delaware limited liability company (“Comcast License”), and (v) COMCAST CORPORATION, a Pennsylvania corporation (“Comcast” and collectively with Comcast License, the “Comcast Parties”). Each T-Mobile Party and each Comcast Party is a “Party,” and the T-Mobile Parties and the Comcast Parties collectively are the “Parties”; provided that, as the context requires (i.e., when the applicable provision describes a two-party relationship or interaction), the T-Mobile Parties, collectively, shall be deemed to be a single Party and Comcast Parties shall be deemed to be the other Party.
WHEREAS, Comcast License holds the 600 MHz licenses granted by the FCC that are identified in Schedule A (the “Licenses”);
WHEREAS, concurrently with the execution and delivery of this Agreement, the Parties are entering into a Long-Term Spectrum Manager Lease Agreement pursuant to which Comcast License will lease the Licenses to T-Mobile License pursuant to the terms and subject to the conditions thereof (the “Lease”); and
WHEREAS, Comcast License wishes to sell, and T-Mobile License wishes to purchase, the Licenses in the manner and subject to the terms and conditions set forth in this Agreement.
NOW, THEREFORE, in consideration of the premises and the mutual representations, warranties, covenants, conditions and agreements hereinafter set forth, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties, intending to be legally bound, agree as follows:

ARTICLE 1
DEFINITIONS
As used in this Agreement, the following terms shall have the meanings set forth or referenced below:
“Affiliate” means, as to any Person, any other Person that, directly or indirectly, is in control of, is controlled by, or is under common control with, such Person. The term “control” (including, with correlative meanings, the terms “controlled by” and “under common control with”), as applied to any Person, means the possession, direct or indirect, of the power to direct or cause the direction of the management and policies of such Person, whether through the ownership of voting securities or other ownership interest, by contract or otherwise. Affiliates of Comcast and T-Mobile include only entities that are controlled Affiliates of the respective Party (or, in the case of T-Mobile, Guarantor).
“Agreement” means this Agreement and all Exhibits and Schedules hereto, as amended, supplemented or otherwise modified from time to time in accordance with the terms hereof.

“Applicable Prepaid Lease Amount” means, with respect to the Licenses subject to a Closing, any amount prepaid by the T-Mobile Parties or their Affiliates under the Lease for a quarterly period that commences prior to the applicable Closing Date and ends after such Closing Date to the extent attributable to such Licenses for the period from and including the Closing Date through the end of such quarterly period (which amount shall be calculated by prorating such quarterly payment amount for the number of days in such period from and including the Closing Date through the end of such quarterly period relative to the total number of days in such quarterly period).
“Applicable Purchase Price” has the meaning set forth in Section 2.1(b).
“Assumed Liabilities” has the meaning set forth in Section 2.2.
“Attributed Affiliate” means T-Mobile’s Affiliates, any other Person in which T-Mobile or its Affiliates holds an attributable interest pursuant to 47 C.F.R. § 20.22(b) or any successor regulation and any other Person that holds such an attributable interest in T-Mobile or its Affiliates.
“Burdensome Condition” has the meaning set forth in Schedule B.
“Business Day” means any day, other than a Saturday or Sunday, on which commercial banks and foreign exchange markets are open for business in the county of New York, State of New York.
“Claim Notice” has the meaning set forth in Section 8.4(a).
“Closing” has the meaning set forth in Section 2.3(a).
“Closing Date” has the meaning set forth in Section 2.3(a).
“Code” means the Internal Revenue Code of 1986, as amended, and the rules and regulations promulgated thereunder.
“Comcast” has the meaning set forth in the preamble.
“Comcast License” has the meaning set forth in the preamble.
“Comcast Parties” has the meaning set forth in the preamble.
“Disclosure Schedules” has the meaning set forth in Article 3.
“DOJ” means the United States Department of Justice.
“End Date” has the meaning set forth in Section 7(a)(iv).
“FCC” means the Federal Communications Commission, including any of its Bureaus operating on delegated authority, or any successor entity thereto.
“FCC Application” has the meaning set forth in Section 5.4(a).
“FCC Consent” means, with respect to one or more of the Licenses, the requisite consent of the FCC to permit the assignment by Comcast License to T-Mobile License (or, subject to Section 9.1, another Affiliate of T-Mobile designated by T-Mobile) of such Licenses.
2


“FCC Order” means a written action or order by the FCC or any of its bureaus.
“FCC Rules” means the rules, regulations and orders of the FCC.

“Final Order” means an action or decision that has been granted by the FCC as to which (a) no request for a stay or similar request is pending, no stay is in effect, the action or decision has not been vacated, reversed, set aside, annulled or suspended and any deadline for filing such request that may be designated by statute or regulation has passed, (b) no petition for rehearing or reconsideration or application for review is pending and the time for the filing of any such petition or application has passed, (c) the FCC does not have the action or decision under reconsideration on its own motion and the time within which it may effect such reconsideration has passed and (d) no appeal is pending including other administrative or judicial review, or in effect and any deadline for filing any such appeal that may be designated by statute or rule has passed.
“Final Order Condition” has the meaning set forth in Section 6.1(a).
“FTC” means the United States Federal Trade Commission or any successor entity thereto.
“Fundamental Representations” has the meaning set forth in Section 8.1.
“Governmental Authority” means a federal, state or local court, legislature, governmental agency, commission or regulatory or administrative authority or instrumentality.
“Guaranteed Obligations” has the meaning set forth in Section 9.13.
“Guarantor” has the meaning set forth in the preamble.
“HSR Act” means the Hart-Scott-Rodino Antitrust Improvement Act of 1976, as amended, any successor statute thereto, and the rules and regulations promulgated thereunder.
“HSR Notice” has the meaning set forth in Section 5.4(b).
“Indemnified Party” has the meaning set forth in Section 8.2(a).
“Indemnifying Party” has the meaning set forth in Section 8.2(a).
“Initial Lease Commencement Date” has the meaning set forth in the Lease.
“Instrument of Assignment” has the meaning set forth in Section 2.3(b).
“Knowledge” means (a) in the case of the Comcast Parties, the actual knowledge, after reasonable inquiry, of the employees of Comcast Corporation holding the titles of Senior Vice President, Wireless Strategy & Development (as of the date hereof, Tom Nagel); Vice President, Wireless Partnerships & Development (as of the date hereof, Justin Markle); Corporate Executive Vice President, Legal Regulatory Affairs, and Senior Deputy General Counsel (as of the date hereof, Frank Buono) and Vice President, Regulatory Affairs (as of the date hereof, Brian Josef) or, for purposes of Closing if such titles no longer exist at Closing, equivalent employees of Comcast Corporation who have the same or substantially similar responsibilities with respect to Comcast’s spectrum business; and (b) in the case of the T-Mobile Parties, the actual knowledge, after reasonable inquiry, of the employees of T-Mobile holding the titles of SVP, Corporate Development and Roaming (as of the date hereof, Dirk Mosa); Director, Corporate Development (as of the date hereof, Scott Sundblad), EVP and General Counsel (as of the date hereof, Mark Nelson) and SVP, Government Affairs (as of the date hereof, Kathleen Ham) or, for purposes of Closing if such titles no longer exist at Closing, equivalent employees of T-Mobile who have the same or substantially similar responsibilities with respect to T-Mobile’s spectrum business.
3


“Law” means applicable common law and any statute, ordinance, code or other law, rule, permit, permit condition, regulation, order, decree, technical or other standard, requirement or procedure enacted, adopted, promulgated, applied, issued or followed by any Governmental Authority.
“Lease” has the meaning set forth in the recitals.
“Liabilities” means any direct or indirect liability, indebtedness, guaranty, endorsement, claim, loss, damage, deficiency, cost, expense, obligation or responsibility, of any kind or nature whatsoever, whether fixed or unfixed, known or unknown, asserted or unasserted, choate or inchoate, liquidated or unliquidated, secured or unsecured, accrued, contingent or otherwise.
“Licenses” has the meaning set forth in the recitals.
“Lien” means any mortgage, lien, pledge, charge, security interest, easement, conditional sales contract, reversionary interest, transfer restriction, right of first refusal, voting trust agreement, preemptive right or other adverse claim or defect of title (in each case, other than (a) transfer restrictions and generally applicable Liens under the FCC Rules, (b) with respect to any License, any Liens routinely imposed in conjunction with FCC licenses of a similar type or (c) any Lien imposed in connection with the consummation of the transactions contemplated hereby or otherwise as a result of actions taken by T-Mobile or any of its Affiliates).
“Losses” has the meaning set forth in Section 8.2(a).
“Low-Band Licenses” means licenses granted by the FCC below 1 GHz.
“NDA” has the meaning set forth in Section 5.2(a).
“Non-Transferred Comcast License” means a License with respect to which a Closing has not occurred.
“Part 1 License” has the meaning set forth in Section 2.1(c).
“Person” has the meaning set forth in Section 9.8.
“Requisite Part 1 Initial Closing Licenses” means Part 1 Licenses that result in a quotient of at least seventy-five percent (75%) with respect to the following: (a) the sum of the POPs, as set forth on Exhibit A, attributable to (i) the Part 1 Licenses that would be subject to the first Closing that includes Part 1 Licenses (other than a Closing pursuant to Schedule D), (ii) the Part 1 Licenses for which a Closing has occurred pursuant to Schedule D and (iii) any former Part 1 Licenses that have ceased to be Part 1 Licenses pursuant to Section 2.1(c) or as a result of Comcast validly terminating this Agreement with respect to such Part 1 Licenses pursuant to Section 7.1(a)(iv); divided by (b) the sum of the POPs, as set forth on Exhibit A, attributable to all of the Part 1 Licenses set forth on Schedule A, regardless of whether this Agreement remains in effect with respect to such Part 1 Licenses. For the avoidance of doubt, (x) clause (a) above excludes any former Part 1 Licenses with respect to which this Agreement has been terminated pursuant to any provision of Section 7.1 other than Section 7.1(a)(iv) or Section 7.1(a)(vii) and (y) the POPs set forth on Exhibit A shall not be updated after the date of this Agreement.
4


“Solicitation” has the meaning set forth in Section 5.3(b)(i).
“Target Closing Date” has the meaning set forth in Section 2.3(a).
“Taxes” means any taxes, duties, assessments, fees, levies, or similar governmental charges, together with any interest, penalties, and additions to tax, imposed by any taxing authority, wherever located (i.e., whether federal, state, local, municipal, or foreign), including all net income, gross income, gross receipts, net receipts, sales, use, transfer, franchise, privilege, profits, social security, disability, withholding, payroll, unemployment, employment, excise, severance, property, windfall profits, value added, ad valorem, occupation, or any other similar governmental charge or imposition.
“T-Mobile” has the meaning set forth in the preamble.
“T-Mobile License” has the meaning set forth in the preamble.
“T-Mobile Parties” has the meaning set forth in the preamble.
“Transaction Documents” means this Agreement, the Lease and all other agreements, documents and instruments required to be delivered by any Party or its designee to any other Party or its designee in accordance with the provisions of this Agreement or the Lease.
ARTICLE 2
PURCHASE AND SALE OF LICENSES
Section 2.1Purchase and Sale of Licenses
(a)At each Closing, Comcast License shall grant, sell, convey, assign, transfer and deliver to T-Mobile License (or, subject to Section 9.1, another Affiliate of T-Mobile designated by T-Mobile), free and clear of all Liens, and T-Mobile License shall purchase (or, subject to Section 9.1, cause the applicable Affiliate of T-Mobile to purchase) from Comcast License, all right, title and interest of Comcast License in and to the Licenses subject to such Closing.
(b)At each Closing, subject to Schedule D, in consideration for the grant, sale, conveyance, assignment, transfer and delivery of the Licenses subject to such Closing in accordance with Section 2.1, T-Mobile License shall pay or cause to be paid an aggregate amount equal to (i) the sum of the amounts set forth in the “Purchase Price Allocation” column on Schedule A for the Licenses subject to such Closing, minus (ii) the Applicable Prepaid Lease Amount (the “Applicable Purchase Price”), in each case, by wire transfer of immediately available funds to such account(s) as Comcast License shall designate no later than three (3) Business Days prior to the applicable Closing Date. The maximum aggregate purchase price for all of the Licenses is $3,275,102,752, which, for the avoidance of doubt, is the sum of all of the amounts set forth in the “Purchase Price Allocation” column on Schedule A for all of the Licenses.
(c)Notwithstanding anything to the contrary in this Agreement, immediately upon Comcast License’s delivery of a notice of termination of the Lease with respect to one or more Licenses set forth on Part 1A or Part 1B of Schedule A (each, a “Part 1 License”) pursuant to Section 7(d)(iii) of the Lease (without regard to when such termination of the Lease may be effective), each such Part 1 License shall automatically be removed from Schedule A and shall
5


cease to be a “License” for all purposes of this Agreement (including that it will not be transferred hereunder and no portion of the Applicable Purchase Price will be paid with respect thereto). For the avoidance of doubt, only the Part 1 Licenses shall be subject to removal as provided in this Section 2.1(c).
Section 2.2No Assumption of Liabilities
THIS IS A PURCHASE AND SALE OF ASSETS AND THE T-MOBILE PARTIES SHALL NOT ASSUME, BE BOUND BY OR RESPONSIBLE FOR, OR BE DEEMED TO HAVE ASSUMED, BECOME BOUND BY OR RESPONSIBLE FOR, UNDER THIS AGREEMENT OR BY REASON OF THE TRANSACTIONS CONTEMPLATED HEREBY, ANY LIABILITIES OF EITHER COMCAST PARTY OF ANY KIND OR NATURE, KNOWN OR UNKNOWN, CONTINGENT OR OTHERWISE, THAT EXISTED PRIOR TO THE CLOSING, OTHER THAN ANY EXECUTORY OBLIGATIONS (INCLUDING APPLICABLE BUILD-OUT REQUIREMENTS) APPLICABLE TO THE HOLDER OF THE LICENSES (OTHER THAN ANY LIABILITIES WITH RESPECT TO ANY BREACH THEREOF BY A COMCAST PARTY OR ANY OF ITS AFFILIATES PRIOR TO THE APPLICABLE CLOSING). THE T-MOBILE PARTIES SHALL BE LIABLE FOR ALL OF THE LIABILITIES ARISING FROM AND AFTER THE CLOSING OUT OF OR RELATING TO THE OWNERSHIP, OPERATION OR USE OF THE LICENSES AND ANY EXECUTORY OBLIGATIONS (INCLUDING APPLICABLE BUILD-OUT REQUIREMENTS) APPLICABLE TO THE HOLDER OF THE LICENSES (OTHER THAN ANY LIABLIITIES WITH RESPECT TO ANY BREACH THEREOF BY A COMCAST PARTY OR ANY OF ITS AFFILIATES PRIOR TO THE APPLICABLE CLOSING) (SUCH LIABILITIES, THE “ASSUMED LIABILITIES”). NOTHING IN THIS SECTION 2.2 SHALL LIMIT THE LIABILITIES OR OBLIGATIONS OF A PARTY OR ITS AFFILIATES UNDER THE LEASE.
Section 2.3Closings
(a)Except to the extent this Agreement shall have been earlier terminated with respect to such License in accordance with the provisions of this Agreement, the consummation of the transactions contemplated by this Agreement shall occur at one or more Closings (each, a “Closing”), in each case, via electronic document exchange at 10:00 a.m. Eastern time (i) on the date designated by T-Mobile that is not more than five (5) Business Days after the satisfaction or T-Mobile’s waiver in writing of the Final Order Condition with respect to a License (and on not less than three (3) Business Days prior written notice from T-Mobile to Comcast), but subject to the satisfaction or waiver of the conditions set forth in Article 6 with respect to such License; provided that, notwithstanding anything in this Agreement to the contrary, unless T-Mobile and Comcast agree otherwise, except as set forth on Schedule C and Schedule D, (x) in no event shall any Closing with respect to any License occur prior to the date that is the same day of the month as the Initial Lease Commencement Date in the fifty-fourth (54th) month following the Initial Lease Commencement Date (the “Target Closing Date”); provided further that, if no such day exists, the Target Closing Date shall be the last day of such fifty-fourth (54th) month, and (y) in no event shall Comcast be required to consummate any Closing with respect to any Part 1 License unless the first such Closing includes the Requisite Part 1 Initial Closing Licenses, or (ii) at such other time or place as may be agreed upon in writing by T-Mobile and Comcast. The date of each Closing is referred to herein as the “Closing Date” with respect to such Closing.
(b)Subject to the terms and conditions hereof, at each Closing, the applicable Parties shall execute and deliver, with respect to the Licenses subject to such Closing, an instrument of assignment in the form attached hereto as Exhibit A (an “Instrument of Assignment”) and the other certificates and documents required to be delivered at such Closing pursuant to Article 6.
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ARTICLE 3
REPRESENTATIONS AND WARRANTIES OF THE COMCAST PARTIES
Except as set forth in the Schedules delivered by the Comcast Parties to the T-Mobile Parties on the date hereof (the “Disclosure Schedules”) or as a result of T-Mobile License’s or its Affiliates’ use or operation of the Licenses (including under the Lease or any emergency special temporary authorization granted by the FCC), each Comcast Party hereby jointly and severally represents and warrants to the T-Mobile Parties as follows:
Section 3.1Organization
Comcast License is a limited liability company, duly formed and validly existing under the laws of the State of Delaware. Comcast is a corporation, duly formed and validly existing under the laws of the Commonwealth of Pennsylvania.
Section 3.2Power and Authority
Such Comcast Party has the requisite power and authority to execute, deliver and perform this Agreement. The execution, delivery and performance by such Comcast Party of this Agreement and all the other Transaction Documents required to be executed and delivered by such Comcast Party in accordance with the provisions of this Agreement have been duly authorized by all necessary action on the part of such Comcast Party. This Agreement has been, and the other Transaction Documents to which such Comcast Party is a party have been, or will be, duly executed and delivered by such Comcast Party.
Section 3.3Enforceability
This Agreement constitutes, and the other Transaction Documents to which such Comcast Party is a party constitute or will constitute, the legal, valid and binding obligations of such Comcast Party, enforceable against such Comcast Party in accordance with their respective terms, except as such enforceability may be limited by bankruptcy, insolvency, reorganization, moratorium, fraudulent conveyance, fraudulent transfer and other similar laws affecting creditors’ rights generally and by general principles of equity.
Section 3.4Non-Contravention
Upon the receipt of the FCC Consent, compliance with any applicable requirements of the HSR Act and the giving of any post-Closing notifications required by the FCC, the execution, delivery and performance by such Comcast Party of this Agreement and the other Transaction Documents to which such Comcast Party is, or will be, a party do not and will not violate or conflict with or result in the breach of any term, condition or provision of, or require the consent of or giving of notice to any other Person under, (a) any Law to which such Comcast Party or any of the Licenses is subject, (b) any judgment, order, writ, injunction, decree or award of any court, arbitrator or governmental or regulatory official, body or authority that is applicable to such Comcast Party or any of the Licenses, (c) the governing documents of such Comcast Party, or (d) any material mortgage, indenture, agreement, contract, commitment, lease, plan, license or other instrument, document or understanding, oral or written, to which such Comcast Party is a party or subject, by which such Comcast Party may have rights or by which any of the Licenses may be bound or affected, or give any party with rights thereunder the right to terminate, modify, accelerate or otherwise materially change the existing rights or obligations of such Comcast Party thereunder.
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Section 3.5Compliance With Laws
Such Comcast Party is not in violation in any material respect of any federal, state or local law, ordinance, code, order or governmental rule or regulation that relates to any of the Licenses, including all pertinent aspects of the FCC Rules.
Section 3.6Licenses
(a)Each of the Licenses has been validly issued, is in full force and effect, is validly held by Comcast License and is free and clear of all Liens (except in accordance with the Lease). At the Closing, each of such Licenses will be free and clear of all Liens, other than those routinely imposed in conjunction with FCC licenses of a similar type. Such Comcast Party has not used or granted any of such Licenses or granted any rights therein, except in accordance with the Lease.
(b)Except for the Lease, none of the spectrum covered by the Licenses is subject to any lease or other agreement or arrangement with any third party, including any agreement giving any third party any right to use such spectrum.
(c)There are no existing applications, petitions to deny or complaints or proceedings pending or, to such Comcast Party’s Knowledge, threatened, before the FCC or any other tribunal, Governmental Authority relating to any of the Licenses or which otherwise will or would reasonably be expected to adversely affect any such License, other than proceedings affecting the wireless telecommunications industry or 600 MHz licenses or licensees generally. No Governmental Authority has, to such Comcast Party’s Knowledge, threatened to terminate, fail to renew or suspend any of such Licenses. There are no third-party claims of any kind that have been asserted with respect to any of such Licenses. Such Comcast Party is not in material violation or default and has not received any notice of any claim of material violation or default, with respect to any of such Licenses. No event has occurred with respect to any of such Licenses that permits, or after notice or lapse of time or both would permit, revocation, non-renewal or termination thereof or that will or would reasonably be expected to result in any material violation or default, claim of material violation or default or impairment of the rights of such Comcast Party, as the holder of such Licenses.
(d)Each License is held solely by Comcast License. No shareholder, officer, employee or former employee of such Comcast Party or any Affiliate thereof, or any other Person, holds or has any proprietary, financial or other interest in, or any authority to use, or any other right or claim in or to, any of such Licenses (other than as an equityholder of Comcast or any of its Affiliates).
(e)No amounts (including installment payments consisting of principal and/or interest or late payment fees) are due to the FCC or the United States Department of the Treasury in respect of the Licenses. The consummation of the transactions contemplated hereunder will not entitle the FCC to impose any unjust enrichment penalties pursuant to 47 C.F.R. §1.2111.
(f)Such Comcast Party has no reason to believe that any of the Licenses will not be renewed in the ordinary course. As of the date hereof, such Comcast Party has no Knowledge of any basis for any application, action, petition, objection or other pleading, or for any proceeding with the FCC or any other Governmental Authority, which (i) questions or contests the validity of, or seeks the revocation, forfeiture, non-renewal or suspension of, any such License, (ii) seeks the imposition of any modification or amendment with respect to any such License, (iii) seeks the payment of a fine, sanction, penalty, damages or contribution in connection with the use of any such License, or (iv) in any other way will or would reasonably be expected to adversely affect any such License, other than proceedings affecting the wireless communications industry or 600 MHz licenses or FCC licensees generally.
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(g)There are no liabilities of such Comcast Party or any Affiliate thereof (whether matured or unmatured, direct or indirect, or absolute, contingent or otherwise), whether related to, associated with, or attached to, any License or otherwise to which the T-Mobile Parties or any of their Affiliates will be subject from and after the applicable Closing as a result of the consummation of the transactions contemplated hereby or otherwise, other than the Assumed Liabilities.
(h)With respect to each License, (i) all material documents required to be filed at any time by such Comcast Party with the FCC with respect to such License have been timely filed or the time period for such filing has not lapsed, and (ii) all such documents filed since the date that such License was first issued or transferred to Comcast License or any Affiliate thereof are correct in all material respects. None of such Licenses is subject to any conditions other than those appearing on the face of such License and those imposed by the FCC Rules upon the wireless communications services industry generally or upon 600 MHz licenses or licensees generally. There are no obligations to make any payments to the FCC associated with any such License, nor will the consummation of the transactions contemplated hereby entitle the FCC to require any Party or any of its Affiliates to refund to the FCC all or any portion of any bidding credit that Comcast License or any of its past or current Affiliates received from the FCC in connection with any such License.
(i)Comcast License and each Affiliate thereof is in compliance in all material respects with, and is not in violation in any material respect of, any Law applicable to the Licenses to which any of them is subject, including all pertinent aspects of the FCC Rules, including (i) the FCC Rules pertaining to eligibility to hold 600 MHz licenses in general, and such Licenses in particular, and (ii) the FCC Rules restricting foreign ownership of common carrier radio licenses. Comcast License is in material compliance with all terms and conditions of, and all of its obligations under, each such License.
Section 3.7Litigation
Except for proceedings affecting the wireless communications services industry generally or 600 MHz licenses or licensees generally, no litigation, arbitration, investigation or other proceeding of or before any court, arbitrator or governmental or regulatory official, body or authority is pending or, to such Comcast Party’s Knowledge, threatened against such Comcast Party or any Affiliate thereof that would reasonably be expected to adversely affect any of the Licenses, or that seeks to enjoin this Agreement or the transactions contemplated hereby or otherwise prevent such Comcast Party from performing its obligations under this Agreement or consummating the transactions contemplated hereby. Neither such Comcast Party nor any Affiliate thereof is a party to or subject to the provisions of any judgment, order, writ, injunction, decree or award of any court, arbitrator or governmental or regulatory official, body or authority that adversely affects any of such Licenses or that would reasonably be expected to impair the ability of such Comcast Party to consummate the transactions contemplated by this Agreement.
Section 3.8No Brokers
Such Comcast Party and its agents have incurred no obligation or liability, contingent or otherwise, for brokerage or finders’ fees or agents’ commissions or other similar payments in connection with this Agreement or the transactions contemplated hereby for which the T-Mobile Parties or any Affiliate thereof could become liable or obligated.
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Section 3.9No Other Representations and Warranties
Except for the representations and warranties contained in this Article 3, in the Lease or in any other agreements and documents delivered pursuant to this Agreement or the Lease, (a) the Comcast Parties acknowledge that neither the T-Mobile Parties nor any other Person has made any other express or implied representation or warranty, whether with respect to either T-Mobile Party, the Licenses or otherwise, in connection with the transactions contemplated by this Agreement or the Lease and (b) the Comcast Parties hereby disclaim all reliance on any other representation, warranty, statement, or information made, communicated, or furnished (orally or in writing) to the Comcast Parties or their respective Affiliates or representatives (including any opinion, information or advice that may have been or may be provided or made available to the Comcast Parties by any member, manager, director, officer, employee, agent, consultant, or representative of either T-Mobile Party) in connection with the transactions contemplated by this Agreement or the Lease.
ARTICLE 4
REPRESENTATIONS AND WARRANTIES OF THE T-MOBILE PARTIES
Each T-Mobile Party jointly and severally hereby represents and warrants to the Comcast Parties as follows:
Section 4.1Organization
T-Mobile License is a limited liability company, duly formed and validly existing under the laws of the State of Delaware. T-Mobile is a corporation, duly formed and validly existing under the laws of the State of Delaware.
Section 4.2Power and Authority
Each T-Mobile Party has the requisite power and authority to execute, deliver and perform this Agreement. The execution, delivery and performance by each T-Mobile Party of this Agreement and all the other Transaction Documents required to be executed and delivered by such T-Mobile Party in accordance with the provisions of this Agreement have been duly authorized by all necessary action on the part of such T-Mobile Party. This Agreement has been, and the other Transaction Documents to which either of the T-Mobile Parties is a party have been, or will be, duly executed and delivered by the applicable T-Mobile Parties.
Section 4.3Enforceability
This Agreement constitutes, and the other Transaction Documents to which either T-Mobile Party is a party constitute or will constitute, the legal, valid and binding obligations of each applicable T-Mobile Party, enforceable against such T-Mobile Party in accordance with their respective terms, except as such enforceability may be limited by bankruptcy, insolvency, reorganization, moratorium, fraudulent conveyance, fraudulent transfer and other similar laws affecting creditors’ rights generally and by general principles of equity.
Section 4.4Non-Contravention
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Upon the receipt of the FCC Consent, compliance with any applicable requirements of the HSR Act and the giving of any post-Closing notifications required by the FCC, the execution, delivery and performance by each T-Mobile Party of this Agreement and the other Transaction Documents to which such T-Mobile Party is a party do not and will not violate or conflict with or result in the breach of any term, condition or provision of, or require the consent of or giving of notice to any other Person under, (a) any Law to which either T-Mobile Party is subject, (b) any judgment, order, writ, injunction, decree or award of any court, arbitrator or governmental or regulatory official, body or authority that is applicable to either T-Mobile Party, (c) the governing documents of either T-Mobile Party, or (d) any material mortgage, indenture, agreement, contract, commitment, lease, plan, license or other instrument, document or understanding, oral or written, to which either T-Mobile Party is a party or subject, by which either T-Mobile Party may have rights, or give any party with rights thereunder the right to terminate, modify, accelerate or otherwise materially change the existing rights or obligations of either T-Mobile Party thereunder.
Section 4.5Litigation
Except for proceedings affecting the wireless communications services industry generally, no litigation, arbitration, investigation or other proceeding of or before any court, arbitrator or governmental or regulatory official, body or authority is pending or, to either T-Mobile Party’s Knowledge, threatened against either T-Mobile Party or any Affiliate thereof that seeks to enjoin this Agreement or the transactions contemplated hereby or otherwise prevent either T-Mobile Party from performing its obligations under this Agreement or consummating the transactions contemplated hereby. No T-Mobile Party or any Affiliate thereof is a party to or subject to the provisions of any judgment, order, writ, injunction, decree or award of any court, arbitrator or governmental or regulatory official, body or authority that would reasonably be expected to impair the ability of either T-Mobile Party to consummate the transactions contemplated by this Agreement.
Section 4.6Qualification
T-Mobile License is, and any other Affiliate of T-Mobile designated by T-Mobile pursuant to Section 9.1 will be, fully qualified under the Communications Act of 1934, as amended, and the FCC Rules (i) to hold and receive FCC licenses generally, (ii) to hold and receive the Licenses, upon the consummation of the transactions contemplated hereby, and (iii) to be approved as the assignee of the Licenses. T-Mobile License is, and any other Affiliate designated by T-Mobile pursuant to Section 9.1 will be, in material compliance with Section 310(b) of the Communications Act of 1934, as amended, and all FCC Rules promulgated thereunder with respect to alien ownership.
Section 4.7Available Funds
The T-Mobile Parties will have available to them funds sufficient to satisfy, no later than the date they become due, all of the T-Mobile Parties’ payment obligations under Section 2.1(b) and to consummate the transactions contemplated hereby.
Section 4.8No Brokers
No T-Mobile Party, nor agent thereof, has incurred any obligation or liability, contingent or otherwise, for brokerage or finders’ fees or agents’ commissions or other similar payments in connection with this Agreement or the transactions contemplated hereby for which either Comcast Party or any Affiliate thereof could become liable or obligated.
Section 4.9No Other Representations and Warranties
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Except for the representations and warranties contained in this Article 4, in the Lease or in any other agreements and documents delivered pursuant to this Agreement or the Lease, (a) the T-Mobile Parties acknowledge that neither the Comcast Parties nor any other Person has made any other express or implied representation or warranty, whether with respect to either Comcast Party or otherwise, in connection with the transactions contemplated by this Agreement or the Lease and (b) the T-Mobile Parties hereby disclaim all reliance on any other representation, warranty, statement, or information made, communicated, or furnished (orally or in writing) to the T-Mobile Parties or their respective Affiliates or representatives (including any opinion, information or advice that may have been or may be provided or made available to the T-Mobile Parties by any member, manager, director, officer, employee, agent, consultant, or representative of either Comcast Party) in connection with the transactions contemplated by this Agreement or the Lease.
ARTICLE 5
COVENANTS AND OTHER AGREEMENTS
Section 5.1Covenants of the T-Mobile Parties and the Comcast Parties Pending the Closing
    From the date hereof until the Closing, each Party shall use commercially reasonable efforts to take, or cause to be taken, all actions, and do, or cause to be done, all things necessary, proper or advisable and consistent with applicable Law to carry out all of their respective obligations under this Agreement, to cause the conditions of the other Party set forth in Article 6 to be satisfied and to consummate and make effective the transactions contemplated hereby prior to the applicable date set forth in Section 7.1(a)(iv), in each case, subject to Section 5.4(d) and Section 5.4(e).
Section 5.2Confidentiality
(a)The Nondisclosure Agreement, dated August 16, 2023, by and between T-Mobile and Comcast (the “NDA”) shall remain in effect in accordance with its terms, provided that the term of the NDA with respect to Transaction Information will terminate on the date that is two (2) years following the final Closing Date hereunder (or, if earlier, the date that is two (2) years following termination of this Agreement with respect to all remaining Licenses), but in any event no earlier than the termination date set forth in the NDA. Any permitted assignee of the Comcast Parties’ rights and obligations under this Agreement shall sign a joinder to the NDA in a form reasonably satisfactory to T-Mobile.
(b)The Parties acknowledge and agree that the existence of this Agreement, the terms and conditions of this Agreement and the substance of the negotiations between the Parties regarding such terms and conditions constitute “Transaction Information” under the NDA.
(c)Notwithstanding the foregoing or the terms of the NDA, (i) each Party shall have the right to issue a press release regarding the transactions contemplated hereby in the form that has been previously approved by the other Party (such approval not to be unreasonably withheld, delayed or conditioned), and (ii) each Party shall have the right to make disclosure of Transaction Information (as defined under the NDA) with respect to this Agreement or the transactions contemplated hereby to the extent such disclosure is required under applicable Law or the rules and regulations of a stock exchange on which such Party’s securities are traded, provided that the disclosing Party provides the other Party as much opportunity to review and comment in advance on such disclosure as is practicable under the circumstances.
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Section 5.3Compliance with Licenses and Lease; Non-Solicitation; Notice of Certain Events
(a)Compliance with Licenses. From the date hereof until the Closing with respect to one or more of the Licenses, (i) each Comcast Party shall use its commercially reasonable efforts to maintain all of its rights and interest in, and the validity of, such Licenses, and shall not, and shall cause its Affiliates not to, engage in any transaction or take any action or omit to take any action with the specific intention of impairing its rights or interest in, or the validity of, such Licenses (provided that the foregoing shall not restrict Comcast’s ability to take any action permitted in accordance with Schedule E), and (ii) such Comcast Party shall promptly provide the T-Mobile Parties with copies of all applications and other correspondence to the FCC and any notices, orders or correspondence received from the FCC to the extent specifically related to such Licenses; provided that, subject to Section 5.4, in no event shall such Comcast Party be obligated to disclose any confidential or commercially sensitive information of Comcast or its Affiliates filed with the FCC by Comcast or its Affiliates pursuant to a protective order issued by the FCC, or subject to a request pursuant to Section 0.459 of the FCC’s rules that such information not be made routinely available for public inspection. Without limiting the foregoing, no Comcast Party shall seek the modification of any such Licenses without the prior written consent of the T-Mobile Parties, provided that no notification to or consent of (written or otherwise) the T-Mobile Parties shall be required for modifications specifically listed in Section 1.929(k)(1-4) of the FCC’s rules, including pro forma assignment or transfers of control, or filed as an “Administrative Update” using FCC Form 601. Each Party shall, and shall cause its applicable Affiliates to, perform its and their respective obligations under the Lease; provided that, in the event of a termination, revocation or other impairment of any of the Licenses resulting from a breach of the Lease by T-Mobile License or any of its Affiliates, the sole and exclusive remedies of Comcast License, its Affiliates and their respective successors and assigns with respect to such breach of the Lease (but, for the avoidance of doubt, not any separate breach of this Agreement) shall be as set forth in Section 11(c) of the Lease (and no separate or additional remedies shall be available pursuant to this Agreement).
(b)Non-Solicitation. Except with respect to any transaction permitted by Schedule E:
(i)prior to the date that is six (6) months after the date hereof each Comcast Party shall not, and shall cause its Affiliates not to, directly or indirectly (including through any of its or their respective officers or other representatives acting at its or their direction), (A) enter into any agreement or (B) solicit inquiries or proposals (including by furnishing non-public information) or initiate or participate in any negotiations or discussions whatsoever (any of the actions described in this clause (B), a “Solicitation”) related to the sale, transfer, assignment or other disposition of any of the Part 1 Licenses; and
(ii)each Comcast Party shall not, and shall cause its Affiliates not to, directly or indirectly (including through any of its or their respective officers or other representatives acting at its or their direction), enter into any agreement or engage in any Solicitation related to the sale, transfer, assignment or other disposition of any of the Licenses (other than the Part 1 Licenses);
provided that this Section 5.3(b) shall terminate with respect to a License upon termination of this Agreement in accordance with the provisions of Section 7.1 with respect to such License.
(c)Notice of Certain Events. Each Party shall promptly notify the other in writing (i) of any action, suit or proceeding that shall be instituted or threatened against such Party to restrain, prohibit or otherwise challenge the legality of any transactions contemplated by this Agreement, and (ii) if such Party acquires knowledge of any development that would reasonably be expected to result in the failure of any of the conditions set forth in Article 6. No disclosure by either Party pursuant to this Section 5.3(c), however, shall be deemed to amend or supplement this Agreement or to prevent or cure any misrepresentation by such Party herein, including that each such disclosure shall be disregarded for purposes of Article 6 and Article 8.
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Section 5.4Governmental Filings
(a)The Parties shall file with the FCC all applications necessary to obtain the FCC Consents (the “FCC Applications”). The Parties shall use their respective commercially reasonable efforts to file the FCC Applications at such times and in such manner consistent with the principles set forth on Schedule C. The Parties shall cooperate in the diligent submission of any additional information requested by the FCC with respect to the FCC Applications and, subject to the terms and conditions of this Agreement, will use their respective commercially reasonable efforts to take all steps necessary and proper to obtain the FCC Consents.
(b)At such time or times as the Parties agree in good faith (with a view to consummating each Closing as promptly as practicable after the Final Order Condition is satisfied with respect to such Closing and prior to the End Date), but in no event later than five (5) Business Days after the FCC Consents for the Licenses subject to such Closing shall have been obtained, the Parties shall prepare and file with the FTC and the DOJ the notifications required pursuant to the HSR Act with respect to the transactions contemplated by this Agreement with respect to such Licenses, including any documents required to be filed in connection therewith (each, an “HSR Notice”). The Parties shall use their respective commercially reasonable efforts to obtain, and each HSR Notice shall specifically request, early termination of the waiting period prescribed by the HSR Act (if the FTC and the DOJ are accepting such requests at such time). The Parties shall cooperate in the diligent submission of any supplemental information requested by the FTC or the DOJ with respect to each HSR Notice.
(c)To the extent permitted by applicable Law, each Party shall, and shall cause its Affiliates to, use their respective commercially reasonable efforts to cooperate with the other Party in connection with the making of all filings and the obtaining of all approvals referred to in this Section 5.4, including by using their respective commercially reasonable efforts in connection with (i) providing copies of all such filings and attachments to the non-filing Party, (ii) furnishing all information required for all such filings, (iii) promptly keeping the other Party informed in all material respects of any material communication received by such Party or its Affiliates from, or given by such Party or its Affiliates to, any Governmental Authority relating to the approval of the transactions contemplated hereby and of any material communication received or given in connection with any proceeding by a private party relating to the approval of the transactions contemplated hereby by any Governmental Authority, and (iv) permitting the other Party to review in advance any material communication delivered to, and consulting with the other Party in advance of any meeting or conference with, any Governmental Authority relating to the transactions contemplated hereby or in connection with any filings by a private party relating to the approval of the transactions contemplated hereby by any Governmental Authority. To the extent practicable under the circumstances, no Party or its Affiliates shall participate in any meeting or discussion expected to address substantive matters related to the transactions contemplated hereby, either in person or by telephone (or otherwise remotely), with any Governmental Authority in connection with the proposed transaction unless, to the extent not prohibited by such Governmental Authority, it gives the other Party the opportunity to attend and observe. The Parties shall advise each other promptly in respect of any understandings, undertakings or agreements (oral or written) that any of them proposes to make or enter into with the FTC, the DOJ or any other Governmental Authority in connection with the transactions contemplated hereby. To the extent that confidential information of any Party is required or requested to be filed with any Governmental Authority, the Party submitting such information shall, prior to such disclosure, (A) notify the Party whose confidential information is to be disclosed, and (B) together with the Party whose information is to be disclosed, seek and use commercially reasonable efforts to secure confidential treatment of such information pursuant to the applicable protective order or other confidentiality procedures of such Governmental Authority.
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(d)Except as otherwise specified on Schedule D, (i) in the event that at any time after the date hereof any of the T-Mobile Parties or their Affiliates enters into any transaction that includes Low-Band Licenses that would have the effect of causing the T-Mobile Parties or their Affiliates to exceed the screen for Low-Band Licenses under applicable FCC Rules in an applicable market (or to increase their attribution in a market where the T-Mobile Parties or their Affiliates already exceed such screen), the T-Mobile Parties and their Affiliates shall use their commercially reasonable efforts to eliminate or otherwise mitigate as fully as possible any resulting adverse effect that would reasonably be expected to materially delay, prevent or otherwise impede the receipt of any regulatory approvals necessary to effect the transactions contemplated hereby; provided that nothing in this Section 5.4 or otherwise in this Agreement (except as otherwise specified on Schedule D) shall prevent or limit in any way, or impose any obligation with respect to, or impose any condition upon, the right or ability of a T-Mobile Party or any of its Affiliates to enter into a spectrum auction or acquire spectrum at auction, or to acquire spectrum, in each case, that is not a Low-Band License or outside of the geographic markets in Schedule A, and (ii) notwithstanding the foregoing or anything to the contrary in this Section 5.4 or otherwise in this Agreement, in no event shall either T-Mobile Party or any of its Affiliates be required to divest any asset or business, refrain from acquiring any Low-Band Licenses or other assets with respect to which either T-Mobile Party or any of its Affiliates is attributed ownership under FCC Rules as of the date of this Agreement, or accept any Burdensome Condition, in each case, in connection with the pursuit of the FCC Consents, the expiration or early termination (if applicable) of the waiting period under the HSR Act or otherwise in connection with this Agreement or the transactions contemplated hereby.
(e)Nothing in this Section 5.4 or otherwise in this Agreement shall prevent or limit in any way, or impose any obligation with respect to, or impose any condition upon, the right or ability of a Comcast Party or any of its Affiliates to enter into a spectrum license auction or acquire spectrum licenses at auction, or to acquire, sell, lease or take any other action with respect to spectrum licenses (in each case, but without limiting actions Comcast is permitted to take under Section 5.3(b) or Schedule E, except with respect to the obligations of the Comcast Parties and its Affiliates under this Agreement and the Lease with respect to the Licenses). Notwithstanding anything to the contrary in this Section 5.4 or otherwise in this Agreement, in no event shall either Comcast Party or any of its Affiliates be required to divest any asset or business, refrain from acquiring, selling, or leasing any Low-Band Licenses or other assets with respect to which either Comcast Party or any of its Affiliates is attributed ownership under FCC Rules as of the date of this Agreement, alter any of its businesses, accept any condition that is adverse to any of its business operations (other than any such conditions that are both de minimis and administrative in nature) or take any other action with respect to its businesses, in each case, in connection with the pursuit of the FCC Consents, the expiration or early termination (if applicable) of the waiting period under the HSR Act or otherwise in connection with this Agreement or the transactions contemplated hereby (except for conditions on the Licenses that will only be in effect upon the Closing with respect to the applicable Licenses).
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Section 5.5Withholding
The T-Mobile Parties (and their respective agents) shall be entitled to deduct and withhold from the amounts payable or otherwise deliverable pursuant to this Agreement such amounts as are required to be deducted or withheld therefrom under the Code or under any provision of state, local or foreign Tax Law; provided that the Comcast Parties shall be entitled to any refund of such amounts received with respect to any pre-Closing period. The T-Mobile Parties shall consult in good faith with the Comcast Parties in determining whether any such deduction or withholding is required and shall provide at least ten (10) Business Days’ prior notice to any Closing to the Comcast Parties of its intent to make such deduction or withholding. To the extent such amounts are so deducted or withheld, such amounts shall be treated for all purposes under this Agreement as having been paid to the Person to whom such amounts would otherwise have been paid. The applicable withholding agent will promptly pay or cause to be paid any amounts withheld pursuant to this Section 5.5 for applicable Taxes to the appropriate Governmental Authority.
ARTICLE 6
CONDITIONS TO CLOSING
Section 6.1Conditions to the Obligations of the T-Mobile Parties
The obligation of the T-Mobile Parties to consummate the transactions contemplated by this Agreement with respect to one or more of the Licenses is subject to the satisfaction on or prior to each applicable Closing Date of each of the following conditions with respect to such Licenses, unless waived in writing by T-Mobile:
(a)The FCC Consents with respect to such Licenses shall have been obtained by one or more FCC Orders, each of which shall have become a Final Order, free of any Burdensome Condition (the “Final Order Condition”).
(b)Any applicable waiting period under the HSR Act relating to the transactions contemplated by this Agreement with respect to such Licenses shall have expired or been terminated.
(c)No Law, award, order, writ, decree, injunction or judgment by any arbitrator or Governmental Authority shall be in effect that enjoins or prohibits the consummation of the transactions contemplated hereby with respect to such Licenses.
(d)Except for the T-Mobile Parties’ operations authorized by the FCC under the Lease, the Comcast Parties shall have discontinued or will at the applicable Closing discontinue all of their operations on and uses of the spectrum covered by such Licenses.
(e)With respect to such Licenses, (i) all of the Fundamental Representations of the Comcast Parties (other than those contained in Section 3.6(i)) shall be true and correct in all material respects on the applicable Closing Date as if made on such Closing Date, disregarding materiality qualifiers therein (except where such representation or warranty speaks as of a specific date), and (ii) all of the other representations and warranties of the Comcast Parties contained in this Agreement (including, for the avoidance of doubt, those contained in Section 3.6(i)) shall be true and correct on the applicable Closing Date as if made on such Closing Date (except where such representation or warranty speaks as of a specific date), without regard to materiality qualifiers contained in such representations and warranties, in the case of this clause (ii), with only such exceptions as have not had a material adverse effect on such Licenses (taken as a whole), the use thereof or the ability of the Comcast Parties to consummate the transactions contemplated hereby.
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(f)With respect to such Licenses, the Comcast Parties shall have performed and complied in all material respects with all covenants and agreements required by this Agreement to be performed or complied with by any of them prior to or at such Closing.
(g)T-Mobile shall receive at the applicable Closing a certificate from the Comcast Parties, dated as of the Closing Date, certifying that the conditions specified in Section 6.1(e) and Section 6.1(f) have been fulfilled with respect to the applicable Closing.
(h)Each Comcast Party or its applicable direct or indirect parent entity (if such Comcast Party or one or more of its direct or indirect parent companies are disregarded entities for Tax purposes) shall have delivered to the T-Mobile Parties a duly completed and executed Form W-9 or such other documentation reasonably satisfactory to T-Mobile to confirm that no withholding is required with respect to the payments to be made at such Closing pursuant to Section 2.1.
(i)The T-Mobile Parties shall receive at the applicable Closing an Instrument of Assignment with respect to such Licenses, duly executed by the applicable Comcast Parties.
Section 6.2Conditions to the Obligations of the Comcast Parties
The obligation of the Comcast Parties to consummate the transactions contemplated by this Agreement with respect to one or more of the Licenses is subject to the satisfaction on or prior to each applicable Closing Date of each of the following conditions with respect to such Licenses, unless waived in writing by Comcast:
(a)The FCC Consents with respect to such Licenses shall have been obtained by one or more FCC Orders, each of which shall have become a Final Order, free of any conditions on the Comcast Parties and their Affiliates except for conditions (x) on such Licenses that will only be in effect upon the Closing with respect to such Licenses or (y) that are both de minimis and administrative in nature.
(b)Any applicable waiting period under the HSR Act relating to the transactions contemplated by this Agreement with respect to such Licenses shall have expired or been terminated.
(c)No Law, award, order, writ, decree, injunction or judgment by any arbitrator or Governmental Authority shall be in effect that enjoins or prohibits the consummation of the transactions contemplated hereby with respect to such Licenses.
(d)With respect to such Licenses, (i) all of the Fundamental Representations of the T-Mobile Parties shall be true and correct in all material respects on the applicable Closing Date as if made on such Closing Date, disregarding materiality qualifiers therein (except where such representation or warranty speaks as of a specific date), and (ii) all of the other representations and warranties of the T-Mobile Parties contained in this Agreement shall be true and correct on the applicable Closing Date as if made on such Closing Date (except where such representation or warranty speaks as of a specific date), without regard to materiality qualifiers contained in such representations and warranties, in the case of this clause (ii), with only such exceptions as have not had a material adverse effect on the ability of the T-Mobile Parties to consummate the transactions contemplated hereby.
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(e)With respect to such Licenses, the T-Mobile Parties shall have performed and complied in all material respects with all covenants and agreements required by this Agreement to be performed or complied with by any of them prior to or at such Closing.
(f)The Comcast Parties shall have received a certificate from the T-Mobile Parties, dated as of the Closing Date, certifying that the conditions specified in Section 6.2(d) and Section 6.2(e) have been fulfilled with respect to the applicable Closing.
(g)The Comcast Parties shall receive at the applicable Closing an Instrument of Assignment with respect to such Licenses, duly executed by the applicable T-Mobile Parties.
ARTICLE 7
TERMINATION
Section 7.1Termination
(a)This Agreement may be terminated with respect to one or more of the Licenses before the final Closing Date hereunder, only as follows and only with respect to one or more Licenses with respect to which the transactions contemplated hereby have not been consummated:
(i)by mutual written consent of the Parties;
(ii)by T-Mobile, by written notice to Comcast, at any time if, with respect to such Licenses, (A) any of a Comcast Party’s representations and warranties contained in this Agreement fails to be true and correct as of the applicable Closing Date, and such failure would result in the failure of the Comcast Parties to meet the conditions set forth in Section 6.1(e), or (B) a Comcast Party fails to comply with any of its covenants or obligations set forth herein, and such failure to comply would result in the failure of the condition set forth in Section 6.1(f); provided that T-Mobile shall have given the Comcast Parties written notice of such failure, such Comcast Party shall not have cured such failure (if curable) within thirty (30) days after receipt of such notice, and the T-Mobile Parties are not then in material breach of this Agreement;
(iii)by Comcast, by written notice to T-Mobile, at any time if, with respect to such Licenses, (A) any of the T-Mobile Parties’ representations and warranties contained in this Agreement fails to be true and correct as of the applicable Closing Date, and such failure would result in the failure of the T-Mobile Parties to meet the conditions set forth in Section 6.2(d), or (B) the T-Mobile Parties fail to comply with any of their covenants or obligations set forth herein, and such failure to comply would result in the failure of the condition set forth in Section 6.2(e); provided that the Comcast Parties shall have given the T-Mobile Parties written notice of such failure, the T-Mobile Parties shall not have cured such failure (if curable) within thirty (30) days after receipt of such notice, and the Comcast Parties are not then in material breach of this Agreement;
(iv)by either Party, by written notice to the other Party, if (A) the applicable Closing does not occur by (1) April 12, 2029 or (2) with respect to any Closing pursuant to Schedule D, the date that is twenty-four (24) months after the applicable FCC Application is filed (as applicable, the “End Date”), and (B) the failure of such Closing to occur by such date does not result in whole or in part from a breach by such Party or any of its Affiliates of their respective obligations hereunder or under the Lease;
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(v)by either Party, by written notice to the other Party, if the consummation of the transactions contemplated hereby with respect to such Licenses shall be prohibited by a final, non-appealable order, decree or injunction of a court of competent jurisdiction or of the FCC, the DOJ or the FTC, or if the FCC designates for hearing the FCC Application with respect to such Licenses;
(vi)automatically, with respect to any such License for which the Lease has been terminated; provided that, if such termination is pursuant to Section 7(d)(vii) of the Lease and the Lease is ultimately reinstated with respect to such Licenses, such termination of this Agreement shall immediately become null and void; or
(vii)automatically, with respect to any Part 1 License, at the time Comcast License delivers a notice of termination of the Lease pursuant to Section 7(d)(iii) of the Lease, as described in Section 2.1(c).
(b)In the event of the termination of this Agreement with respect to one or more of the Licenses pursuant to the provisions of Section 7.1(a), this Agreement shall become void and have no effect, without any liability on the part of any of the Parties or their partners, shareholders, members, directors or officers in respect of this Agreement, in each case, solely with respect to such Licenses, and each such License shall automatically be removed from Schedule A and shall cease to be a “License” for all purposes of this Agreement (including that it will not be transferred hereunder and no portion of the Applicable Purchase Price will be paid with respect thereto); provided that (i) the Parties shall cooperate in good faith to withdraw the FCC Applications (or portions thereof) applicable to such Licenses, (ii) nothing herein shall relieve any Party from any Losses resulting from or arising out of any willful and knowing material breach by such Party of this Agreement (it being agreed that the T-Mobile Parties’ or the Comcast Parties’ failure to consummate the transactions contemplated herein pursuant to the terms hereof shall constitute a willful and knowing material breach), (iii) this Section 7.1(b), Section 5.2 and Article 9 shall survive termination of this Agreement for any reason (it being understood that the survival of Section 9.11 shall not preclude a Party’s expenses from being included in damages for a breach of this Agreement by the other Party) and (iv) this Agreement shall remain in full force and effect with respect to the Licenses not subject to such termination. The Parties acknowledge that the failure of a condition set forth in Article 6 or termination of this Agreement with respect to one License will not limit the obligations of the Parties with respect to any other License.
ARTICLE 8
SURVIVAL AND INDEMNIFICATION
Section 8.1Survival
The representations and warranties made by the Parties in Sections 3.1, 3.2, 3.3, 3.4(c), 3.6(a), 3.6(e), 3.6(i) and 3.8 and Sections 4.1, 4.2, 4.3, 4.4(c), and 4.8 (such representations and warranties, the “Fundamental Representations”) shall survive for a period of six (6) years after the applicable Closing with respect to the Licenses subject to such Closing. All other representations and warranties made by the Parties in this Agreement and all covenants and agreements to be performed prior to a Closing Date shall survive for a period of twelve (12) months after the applicable Closing with respect to the Licenses subject to such Closing. All covenants and agreements to be performed after a Closing Date shall survive such Closing and continue in full force and effect until the full performance thereof or as otherwise provided herein. Any claim by a Party based upon breach of any such representation or warranty made pursuant to Section 8.2 or otherwise must be submitted to the other Party prior to the expiration of the applicable survival period, in which case such claim shall survive until fully-resolved and satisfied in accordance with such resolution.
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It is the express intent of the Parties to modify the applicable statute of limitations to the extent set forth in this Section 8.1.
Section 8.2General Indemnification Obligation
(a)From and after each Closing, each Party (the “Indemnifying Party”) agrees to indemnify, hold harmless and reimburse the other Party (i.e., each of the T-Mobile Parties or the Comcast Parties, as the case may be) and its Affiliates, and its and their respective shareholders, partners, directors, officers, members, managers, agents, employees, successors and assigns (each, an “Indemnified Party”) against and in respect of any and all damages, losses, deficiencies, liabilities, assessments, fines, judgments, costs and other expenses (including reasonable legal fees and expenses and reasonable expenses of investigation) (“Losses”) incurred or suffered by any Indemnified Party, whether such Losses relate to claims, actions or causes of action asserted by any Indemnified Party against the Indemnifying Party or asserted by third parties, that result from, relate to or arise out of the following, in each case, as it relates to the Licenses subject to such Closing:
(i)any inaccuracy in or breach of the representations and warranties made by the Indemnifying Party herein or in any certificate delivered by the Indemnifying Party at such Closing; or
(ii)any nonfulfillment or breach by the Indemnifying Party of any of the covenants or agreements made by the Indemnifying Party herein.
(b)From and after each Closing, each Comcast Party as Indemnifying Party agrees to indemnify, hold harmless and reimburse the T-Mobile Parties and their Affiliates, and the T-Mobile Parties’ and their Affiliates’ respective shareholders, partners, directors, officers, agents, employees, successors and assigns, as Indemnified Parties, against and in respect of any and all Losses incurred or suffered by any such Indemnified Party that result from, relate to or arise out of: (i) the ownership and use by such Comcast Party or its Affiliates of the Licenses subject to such Closing prior to such Closing; or (ii) any Liabilities of a Comcast Party or any of its Affiliates relating to such Licenses, unless separately assumed or transferred or subject to indemnification by the T-Mobile Parties and their Affiliates pursuant to an agreement unrelated to this Agreement, in each case, excluding Losses arising from or in connection with (x) the Lease or the use or operation of the Licenses by T-Mobile License or its Affiliates thereunder or under any emergency special temporary authorization granted by the FCC or (y) the Assumed Liabilities.
(c)From and after each Closing, the T-Mobile Parties as Indemnifying Party agree to indemnify, hold harmless and reimburse each Comcast Party and its Affiliates, and such Comcast Party’s and its Affiliates’ respective shareholders, partners, directors, officers, members, managers, agents, employees, successors and assigns, as Indemnified Parties, against and in respect of any and all Losses incurred or suffered by any such Indemnified Party that result from, relate to or arise out of: (i) the ownership and use by T-Mobile License or other T-Mobile Affiliates of the Licenses subject to such Closing after such Closing; or (ii) any Liabilities of a T-Mobile Party or any of its Affiliates relating to such Licenses, including the Assumed Liabilities, unless separately assumed or transferred or subject to indemnification by the Comcast Parties and their Affiliates pursuant to an agreement unrelated to this Agreement.
Section 8.3Limitations
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(a)No Indemnifying Party shall have any obligation to indemnify any Indemnified Party against any Losses pursuant to Section 8.2(a)(i) (other than with respect to inaccuracies in or breaches of an Indemnifying Party’s Fundamental Representations) unless and until (i) any such Losses arising out of a single set of (or series of related) facts and circumstances exceeds $50,000, and (ii) the aggregate amount of all such Losses of the Indemnified Parties with respect to a License exceeds the amount that is one percent (1%) of the amount set forth in the “Purchase Price Allocation” column on Schedule A in respect of such License, and, in the case of either clause (i) or clause (ii), such Indemnifying Party shall only be liable to the Indemnified Parties for Losses in excess of each such threshold. The aggregate amount of all Losses for which an Indemnifying Party shall be liable pursuant to Section 8.2(a)(i) (other than with respect to inaccuracies in or breaches of an Indemnifying Party’s Fundamental Representations) with respect to a License shall not exceed the amount that is ten percent (10%) of the amount set forth in the “Purchase Price Allocation” column on Schedule A in respect of such License. In no event shall the aggregate liability of either the Comcast Parties or the T-Mobile Parties for any Losses pursuant to Section 8.2(a) exceed the aggregate amount paid to the Comcast Parties hereunder with respect to the specific Licenses that are the subject of the breaches that gives rise to such Losses.
(b)For all purposes of this Article 8, including whether or not any inaccuracy in or breach of any representation or warranty has occurred and the amount of Losses resulting from, relating to or arising out of any such inaccuracy or breach, any materiality, material adverse effect or other similar qualification contained in or otherwise applicable to such representation or warranty shall be disregarded.
(c)Notwithstanding any other provisions of this Agreement (but without limiting Section 8.6), in no event shall any Party be liable for any Losses under this Article 8 that are exemplary or punitive, or otherwise not constituting actual direct Losses, regardless of the theory of recovery; provided that this Section 8.3(c) shall not apply to any damages actually paid to third parties pursuant to a final judicial order.
(d)Each Indemnified Party shall take, and cause its Affiliates to take, all reasonable steps to mitigate any Losses indemnifiable under this Article 8 upon becoming aware of any event or circumstance that would be reasonably expected to, or does, give rise thereto, including incurring costs only to the minimum extent necessary to remedy the breach that gives rise to such Losses (it being understood that reasonable costs incurred in furtherance thereof shall, subject to the terms, conditions and limitations herein, constitute indemnifiable Losses to the extent such costs mitigate such Losses). The amount of any Losses for which an Indemnified Party claims indemnification under this Agreement shall be reduced by: (i) any insurance proceeds actually received by the Indemnified Party with respect to such Losses (net of any increases in premiums or other costs attributable thereto); and (ii) any indemnification or reimbursement payments actually received by the Indemnified Party from third parties (other than insurers) with respect to such Losses (net of any costs attributable thereto).
(e)Each Party acknowledges and agrees that the Licenses are unique and that, prior to each Closing, remedies at law, including monetary damages, will be inadequate in the event of a breach by it in the performance of its obligations under this Agreement with respect to the Licenses subject to such Closing. Accordingly, each Party agrees that in the event of any such breach, the other Party shall be entitled to a decree of specific performance pursuant to which such Party is ordered to affirmatively carry out its pre-Closing and Closing obligations under this Agreement with respect to such Licenses, subject to the conditions of this Agreement. The foregoing shall not be deemed to be or construed as a waiver or election of remedies by either Party, and each Party expressly reserves any and all rights and remedies available to it at law or in equity in the event of any breach or default by the other Party under this Agreement.
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Section 8.4Indemnification Procedures
(a)Any party seeking indemnification pursuant to this Article 8 shall promptly notify in writing (in accordance with the provisions of Section 9.5) (a “Claim Notice”) the other party or parties from whom such indemnification is sought of a third party’s assertion of any claim with respect to which the indemnification provisions set forth in this Article 8 relate, providing in reasonable detail the facts giving rise to such claim, a statement of the Indemnified Party’s Losses to the extent then known, and an estimate of the amount of Losses that the Indemnified Party reasonably anticipates it will suffer or incur, provided, however, that no delay on the part of the Indemnified Party in giving the Claim Notice shall relieve the Indemnifying Party from any obligation hereunder unless (and solely to the extent) the Indemnifying Party is prejudiced thereby.
(b)Upon receipt of a Claim Notice, the Indemnifying Party shall have the right, upon written notice to the Indemnified Party within twenty (20) Business Days after its receipt of any Claim Notice, to undertake the control and defense of such claim if the Indemnifying Party acknowledges in writing that, based on the facts set forth in the applicable Claim Notice, the Indemnifying Party would have an indemnification obligation for Losses arising out of the applicable third-party claim (subject to the terms, conditions and limitations herein); provided, however, that (x) the Indemnifying Party shall consult with the Indemnified Party in good faith relating to the defense of such claim; and (y) the Indemnifying Party shall not have the right to assume the defense of any portion of such claim that is criminal in nature or seeks non-de minimis injunctive relief. If the Indemnifying Party has undertaken the defense of any such claim, the Indemnifying Party may not agree to any settlement or compromise of such claim without the prior written consent of the Indemnified Party unless (i) in connection with such settlement or compromise, the Indemnifying Party acknowledges in writing its obligation to pay in full the amount of the settlement or compromise and all associated expenses (notwithstanding any of the limitations in this Article 8 to the contrary), (ii) the settlement or compromise does not involve anything but the one-time payment of money, and (iii) the Indemnifying Party obtains, at no cost to the Indemnified Party, a release executed and delivered by the claiming third party or parties of all claims against the Indemnified Party and its Affiliates in connection with the applicable claim. Subject to the foregoing, if the Indemnified Party has undertaken the defense of any such claim, the Indemnified Party may not agree to any settlement or compromise of such claim without the prior written consent of the Indemnifying Party (not to be unreasonably withheld, conditioned or delayed); provided that such consent shall not be required if (x) the settlement or compromise does not involve anything but the one-time payment of money for which the Indemnified Party shall be solely responsible (and in respect of which the Indemnified Party waives all claims against the Indemnifying Party and its Affiliates), and (y) the Indemnified Party obtains, at no cost to the Indemnifying Party, a release executed and delivered by the claiming third party or parties of all claims against the Indemnifying Party and its Affiliates in connection with the applicable claims. In no event shall the party that has undertaken the defense of any such claim in accordance with the foregoing be required to agree to any settlement or compromise of any such claim.
(c)In the event an Indemnified Party has a claim against the Indemnifying Party hereunder that does not involve a claim or demand being asserted against or sought to be collected from it by a third party, the Indemnified Party shall promptly send a Claim Notice with respect to such claim to the Indemnifying Party.
(d)The failure of the Indemnified Party to give the Indemnifying Party a Claim Notice in accordance with the requirements of this Article 8 shall not relieve the Indemnifying Party from any liability in respect of such claim, demand or action under this Article 8, except to the extent of any prejudice or damages to the Indemnifying Party as a result thereof.
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Section 8.5Treatment of Payments
Any payment made pursuant to the indemnification obligations arising under Section 8.2 shall be treated as an adjustment to the Applicable Purchase Price to the extent permitted under applicable Law.
Section 8.6Exclusive Remedy
Following each Closing, the Parties acknowledge and agree that the indemnification rights of the Parties and their Affiliates under this Article 8 are their exclusive remedy with respect to any and all claims arising out of or in relation to this Agreement and the Transaction Documents, in each case, as it relates to the Licenses subject to such Closing; provided that nothing in this Article 8 or otherwise in this Agreement shall limit any Party’s equitable remedies or any Party’s rights or remedies based on actual and intentional fraud under New York law (or, for the avoidance of doubt, any Losses payable in accordance with Section 7.1(b)).
ARTICLE 9
MISCELLANEOUS
Section 9.1Assignment
(a)This Agreement shall be binding upon and inure to the benefit of the Parties and their successors and permitted assigns. The rights and obligations of a Party under this Agreement shall not be assignable by such Party without the written consent of the other Party, except as otherwise provided in this Section 9.1 and Schedule E.
(b)T-Mobile License may assign all or a portion of its rights hereunder to receive any of the Licenses to one or more Affiliates of T-Mobile or any successor to all or substantially all of T-Mobile’s business by way of merger, consolidation, liquidation, purchase of assets of T-Mobile or other form of acquisition or other form of reorganization; provided that, (i) the T-Mobile Parties furnish the Comcast Parties with reasonably satisfactory assurance of performance of this Agreement by such assignee, transferee or delegee, (ii) the assignment, transfer or delegation would not reasonably be expected to prevent or delay by more than an immaterial period of time the FCC’s approval of the transactions contemplated hereby or the expiration or termination of the waiting period under the HSR Act, and (iii) no such assignment, transfer or delegation shall relieve either of the T-Mobile Parties or any successor in interest of either of the T-Mobile Parties of any of its obligations to the Comcast Parties hereunder. After giving effect to such assignment, such assignee shall be a “T-Mobile Party” for purposes of this Agreement.
Section 9.2Further Assurances
Each Party will cooperate with the other Party and execute and deliver to the other Party such other instruments and documents and take such other actions as may be reasonably requested from time to time by the other Party as necessary to carry out, evidence and confirm the intended purposes of this Agreement.
Section 9.3Entire Agreement; Amendment
(a)This Agreement, including its Schedules and Exhibits, which are specifically incorporated herein, together with the other Transaction Documents and the NDA, set forth the entire understanding of the Parties with respect to the transactions contemplated hereby and supersede any and all previous agreements and understandings, oral or written, between or among the Parties regarding the transactions contemplated hereby.
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(b)This Agreement shall not be amended or modified except by written instrument duly executed by each of the Parties.
Section 9.4Waiver
No waiver of any term or provision of this Agreement shall be effective unless in writing, signed by the Party against whom enforcement of the same is sought. The grant of a waiver in one instance does not constitute a continuing waiver in all similar instances. No failure by any Party to exercise, and no delay by any Party in exercising, any right, remedy, power or privilege hereunder shall operate as a waiver thereof.
Section 9.5Notices
Any notice, request, demand, waiver, consent, approval or other communication that is required or permitted hereunder shall be in writing and shall be deemed given only if delivered personally or sent by registered or certified mail or by Federal Express or other overnight mail service, postage prepaid, or by e-mail (with written confirmation of receipt, other than by means of automatically-generated reply), as follows:
    If to the T-Mobile Parties (or any of them), to:
T-Mobile USA, Inc.
12920 SE 38th Street
Bellevue, Washington 98006
Attention: General Counsel
E-mail: Mark.Nelson@T-Mobile.com

with a required copy (which shall not itself constitute proper notice) to:

T-Mobile USA, Inc.
12920 SE 38th Street
Bellevue, Washington 98006
Attention: Senior Vice President, Corporate Strategy & Development
E-mail: Peter.Ewens@T-Mobile.com

and

DLA Piper LLP (US)
500 8th Street NW
Washington, DC 20004
Attention: Nancy Victory and Marc Samuel If to the Comcast Parties, to:
Email: nancy.victory@us.dlapiper.com and marc.samuel@us.dlapiper.com

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        Comcast Corporation
        One Comcast Center
1701 John F. Kennedy Blvd.
Philadelphia, PA 19103-2838
        Attention: Chief Legal Officer
        Email: corporate_legal@comcast.com

        with a required copy (which shall not itself constitute proper notice) to:
        Davis Polk & Wardwell LLP
        450 Lexington Avenue
        New York, NY 10017
        Attention: Brian Wolfe
        Email: brian.wolfe@davispolk.com

or to such other address as the addressee may have specified in a notice duly given to the sender as provided herein. Such notice, request, demand, waiver, consent, approval or other communication will be deemed to have been given as of the date so delivered.
Section 9.6Governing Law; Submission to Jurisdiction; Waiver of Jury Trial
This Agreement shall be governed by and interpreted and enforced in accordance with the laws of the State of New York without reference to any of its choice of law rules that would cause the laws of any other jurisdiction to apply. In connection with any controversy arising out of or related to this Agreement, the Parties hereby irrevocably consent to the jurisdiction of the United States District Court for the Southern District of New York, if a basis for federal court jurisdiction is present, and, otherwise, in the state courts of the State of New York. Each of the Parties irrevocably consents to service of process out of the aforementioned courts and waives any objection which it may now or hereafter have to the laying of venue of any action or proceeding arising out of or in connection with this Agreement brought in the aforementioned courts and hereby further irrevocably waives and agrees not to plead or claim in such courts that any such action or proceeding brought in such courts has been brought in an inconvenient forum. EACH PARTY HERETO HEREBY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY ACTION ARISING OUT OF THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY. EACH PARTY HERETO (A) CERTIFIES THAT NO REPRESENTATIVE OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH PARTY WOULD NOT, IN THE EVENT OF ANY ACTION, SUIT OR PROCEEDING, SEEK TO ENFORCE THE FOREGOING WAIVER AND (B) ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED TO ENTER INTO THIS AGREEMENT, BY, AMONG OTHER THINGS, THE MUTUAL WAIVER AND CERTIFICATIONS IN THIS SECTION 9.6.
Section 9.7No Benefit to Others
The representations, warranties, covenants and agreements contained in this Agreement are for the sole benefit of the Parties and, in the case of Article 8, the other Indemnified Parties, and their heirs, executors, administrators, legal representatives, successors and assigns, and they shall not be construed as conferring any rights on any other Persons.
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Section 9.8United States Dollars; Headings, Gender, “Person,” and “including”
All references herein to “$” or “Dollars” are to United States Dollars. All section headings contained in this Agreement are for convenience of reference only, do not form a part of this Agreement and shall not affect in any way the meaning or interpretation of this Agreement. Unless otherwise specified, any reference herein to a Section, Article, Schedule or Exhibit shall be a reference to such Section or Article of, or Schedule or Exhibit to, this Agreement. Words used herein, regardless of the number and gender specifically used, shall be deemed and construed to include any other number, singular or plural, and any other gender, masculine, feminine, or neuter, as the context requires. Any reference to a “Person” herein shall include an individual, firm, corporation, partnership, limited liability company, trust, Governmental Authority or body, association, unincorporated organization or any other entity. Whenever used in this Agreement, the word “including,” and variations thereof, even when not modified by the phrase “but not limited to” or “without limitation,” shall not be construed to imply any limitation and shall mean “including but not limited to.” In the event that an obligation or period hereunder falls or expires on a day that is not a Business Day, such date for performance or period shall be extended to the next Business Day.
Section 9.9Severability
Any provision of this Agreement that is invalid or unenforceable in any jurisdiction shall be ineffective to the extent of such invalidity or unenforceability without invalidating or rendering unenforceable the remaining provisions hereof, and such invalidity or unenforceability in any jurisdiction shall not invalidate or render unenforceable such provisions in any other jurisdiction. Moreover, the Parties agree that the invalid or unenforceable provision shall be enforced to the maximum extent permitted by law in accordance with the intention of the Parties as expressed by such provision.
Section 9.10Counterparts and Electronic Signatures
This Agreement may be executed in any number of counterparts and any Party may execute any such counterpart, each of which when executed and delivered shall be deemed to be an original and all of which counterparts taken together shall constitute but one and the same instrument. This Agreement shall become binding when one or more counterparts taken together shall have been executed and delivered by all of the Parties. It shall not be necessary in making proof of this Agreement or any counterpart hereof to produce or account for any of the other counterparts. The Parties intend to sign and deliver this Agreement by electronic transmission. Each Party agrees that the delivery of this Agreement by electronic transmission shall have the same force and effect as delivery of original signatures and that each Party may use such signatures as evidence of the execution and delivery of this Agreement by all Parties to the same extent that an original signature could be used.
Section 9.11Expenses
Except as otherwise expressly provided in this Agreement, including this Section 9.11, each Party shall pay its own expenses incidental to the preparation of this Agreement, the carrying out of the provisions of this Agreement and the consummation of the transactions contemplated hereby. The T-Mobile Parties, on the one hand, and the Comcast Parties, on the other hand, each shall pay fifty percent (50%) of the total filing and application fees in connection with the FCC Consents and the HSR Notices, and each Party shall bear its own other expenses incurred in connection with each such filing described in this sentence. This Section shall survive termination of this Agreement, and shall apply irrespective of whether the Closing occurs, except as provided in Section 7.1(b).
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Section 9.12Construction of “License”
Notwithstanding anything herein to the contrary, unless the context otherwise requires, all representations, warranties, covenants and agreements contained herein that are specified to apply to a “License” shall be deemed to be made both with respect to such license taken as a whole and with respect to any portion of such license. For example, and without limiting the generality of the foregoing, a representation by a Comcast Party that no event has occurred that permits revocation of a “License” would be deemed to include a representation that no event has occurred that permits revocation of any portion of such License.
Section 9.13Guaranty
    Guarantor, intending to be legally bound, hereby absolutely, irrevocably and unconditionally guarantees to the Comcast Parties the due and punctual performance and discharge of all obligations of the T-Mobile Parties under this Agreement, as if Guarantor were a direct party hereto (collectively, the “Guaranteed Obligations”). Such guaranty shall be construed as an unconditional, absolute and continuing guaranty. In the event the T-Mobile Parties fail to discharge any of the Guaranteed Obligations when required, the Comcast Parties may at any time and from time to time, at such Person’s option, take any and all actions available hereunder to enforce Guarantor’s obligations with respect to the Guaranteed Obligations. In connection with the foregoing guaranty, Guarantor hereby waives notice of acceptance hereof and of the Guaranteed Obligations, presentment, demand for payment, protest and notice of protest. Notwithstanding the foregoing, Guarantor reserves all defenses that the T-Mobile Parties may be entitled to under this Agreement or otherwise.
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IN WITNESS WHEREOF, the parties have duly executed this Agreement as of the date first above written.
T-MOBILE USA, INC. COMCAST CORPORATION
By: /s/ Peter Osvaldik
By: /s/ Jason Armstrong
Name: Peter Osvaldik Name: Jason Armstrong
Title: Chief Financial Officer Title: Chief Financial Officer & Treasurer
T-MOBILE LICENSE LLC COMCAST OTR1, LLC
By: /s/ Peter Osvaldik
By: /s/ Jason Armstrong
Name: Peter Osvaldik Name: Jason Armstrong
Title: Chief Financial Officer Title: Chief Financial Officer & Treasurer
T-MOBILE US, INC.,
solely for the purposes of Section 9.13
By: /s/ Peter Osvaldik
Name: Peter Osvaldik
Title: Chief Financial Officer

EX-22.1 6 tmus09302023ex221.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 September 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
5.750% senior notes due 2034
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
6.000% 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 September 30, 2023, including those that may no longer be subject to reporting as provided by Regulation S-X Rule 13-01:

Description of Notes
7.125% 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 September 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 September 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
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 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 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 September 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 September 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 tmus09302023ex311.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.

October 25, 2023
/s/ G. Michael Sievert
G. Michael Sievert
Chief Executive Officer


EX-31.2 8 tmus09302023ex312.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.

October 25, 2023
/s/ Peter Osvaldik
Peter Osvaldik
Executive Vice President and Chief Financial Officer


EX-32.1 9 tmus09302023ex321.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 September 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.

October 25, 2023
/s/ G. Michael Sievert
G. Michael Sievert
Chief Executive Officer


EX-32.2 10 tmus09302023ex322.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 September 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.

October 25, 2023
/s/ Peter Osvaldik
Peter Osvaldik
Executive Vice President and Chief Financial Officer