UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

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

For the quarterly period ended March 31, 2022

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 US, INC.

(Exact name of registrant as specified in its charter)

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

12920 SE 38th Street

Bellevue, Washington

(Address of principal executive offices)

98006-1350

(Zip Code)

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

Title of each class	Trading Symbol	Name of each exchange on which registered
Common Stock, par value $0.00001 per share	TMUS	The NASDAQ Stock Market LLC

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

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

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

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

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

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

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

Class	Shares Outstanding as of April 29, 2022
Common Stock, par value $0.00001 per share	1,253,584,833

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T-Mobile US, Inc.

Form 10-Q

For the Quarter Ended March 31, 2022

Table of Contents

PART I. FINANCIAL INFORMATION
	Item 1.	Financial Statements	3
		Condensed Consolidated Balance Sheets	3
		Condensed Consolidated Statements of Comprehensive Income	4
		Condensed Consolidated Statements of Cash Flows	5
		Condensed Consolidated Statement of Stockholders’ Equity	6
		Notes to the Condensed Consolidated Financial Statements	8
	Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	24
	Item 3.	Quantitative and Qualitative Disclosures About Market Risk	41
	Item 4.	Controls and Procedures	41
PART II. OTHER INFORMATION
	Item 1.	Legal Proceedings	42
	Item 1A.	Risk Factors	42
	Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	43
	Item 3.	Defaults Upon Senior Securities	43
	Item 4.	Mine Safety Disclosures	43
	Item 5.	Other Information	43
	Item 6.	Exhibits	44
		Signatures	45

2

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)	March 31, 2022		December 31, 2021
Assets
Current assets
Cash and cash equivalents	$	3,245	$	6,631
Accounts receivable, net of allowance for credit losses of $164 and $146	4,016		4,194
Equipment installment plan receivables, net of allowance for credit losses and imputed discount of $522 and $494	5,061		4,748
Inventory	2,715		2,567
Prepaid expenses	727		746
Other current assets	1,691		2,005
Total current assets	17,455		20,891
Property and equipment, net	40,006		39,803
Operating lease right-of-use assets	31,449		26,959
Financing lease right-of-use assets	3,287		3,322
Goodwill	12,234		12,188
Spectrum licenses	92,661		92,606
Other intangible assets, net	4,448		4,733
Equipment installment plan receivables due after one year, net of allowance for credit losses and imputed discount of $127 and $136	2,837		2,829
Other assets	6,276		3,232
Total assets	$	210,653	$	206,563
Liabilities and Stockholders' Equity
Current liabilities
Accounts payable and accrued liabilities	$	11,134	$	11,405
Short-term debt	2,865		3,378
Short-term debt to affiliates	1,250		2,245
Deferred revenue	842		856
Short-term operating lease liabilities	3,252		3,425
Short-term financing lease liabilities	1,121		1,120
Other current liabilities	959		1,070
Total current liabilities	21,423		23,499
Long-term debt	66,861		67,076
Long-term debt to affiliates	1,494		1,494
Tower obligations	4,037		2,806
Deferred tax liabilities	10,410		10,216
Operating lease liabilities	31,187		25,818
Financing lease liabilities	1,447		1,455
Other long-term liabilities	3,818		5,097
Total long-term liabilities	119,254		113,962
Commitments and contingencies (Note 11)
Stockholders' equity
Common Stock, par value $0.00001 per share, 2,000,000,000 shares authorized; 1,254,917,883 and 1,250,751,148 shares issued, 1,253,352,700 and 1,249,213,681 shares outstanding	—		—
Additional paid-in capital	73,420		73,292
Treasury stock, at cost, 1,565,183 and 1,537,468 shares issued	(16)		(13)
Accumulated other comprehensive loss	(1,329)		(1,365)
Accumulated deficit	(2,099)		(2,812)
Total stockholders' equity	69,976		69,102
Total liabilities and stockholders' equity	$	210,653	$	206,563

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

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T-Mobile US, Inc.

Condensed Consolidated Statements of Comprehensive Income

(Unaudited)

	Three Months Ended March 31,
(in millions, except share and per share amounts)	2022		2021
Revenues
Postpaid revenues	$	11,201	$	10,303
Prepaid revenues	2,455		2,351
Wholesale and other service revenues	1,472		1,538
Total service revenues	15,128		14,192
Equipment revenues	4,694		5,346
Other revenues	298		221
Total revenues	20,120		19,759
Operating expenses
Cost of services, exclusive of depreciation and amortization shown separately below	3,727		3,384
Cost of equipment sales, exclusive of depreciation and amortization shown separately below	5,946		5,142
Selling, general and administrative	5,056		4,805
Depreciation and amortization	3,585		4,289
Total operating expenses	18,314		17,620
Operating income	1,806		2,139
Other expense
Interest expense, net	(864)		(835)
Other expense, net	(11)		(125)
Total other expense, net	(875)		(960)
Income before income taxes	931		1,179
Income tax expense	(218)		(246)
Net income	$	713	$	933
Net income	$	713	$	933
Other comprehensive income (loss), net of tax
Unrealized gain on cash flow hedges, net of tax effect of $13 and $12	37		34
Unrealized (loss) gain on foreign currency translation adjustment, net of tax effect of $0 and $0	(1)		2
Other comprehensive income	36		36
Total comprehensive income	$	749	$	969
Earnings per share
Basic	$	0.57	$	0.75
Diluted	$	0.57	$	0.74
Weighted-average shares outstanding
Basic	1,250,505,999		1,243,520,026
Diluted	1,255,368,592		1,252,783,564

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

4

T-Mobile US, Inc.

Condensed Consolidated Statements of Cash Flows

(Unaudited)

	Three Months Ended March 31,
(in millions)	2022		2021
Operating activities
Net income	$	713	$	933
Adjustments to reconcile net income to net cash provided by operating activities
Depreciation and amortization	3,585		4,289
Stock-based compensation expense	141		138
Deferred income tax expense	185		211
Bad debt expense	210		82
Losses (gains) from sales of receivables	46		(18)
Losses on redemption of debt	—		101
Changes in operating assets and liabilities
Accounts receivable	(984)		96
Equipment installment plan receivables	(535)		(727)
Inventories	(93)		279
Operating lease right-of-use assets	1,469		1,124
Other current and long-term assets	(4)		54
Accounts payable and accrued liabilities	(59)		(1,384)
Short- and long-term operating lease liabilities	(771)		(1,369)
Other current and long-term liabilities	(163)		(217)
Other, net	105		69
Net cash provided by operating activities	3,845		3,661
Investing activities
Purchases of property and equipment, including capitalized interest of ($15) and ($84)	(3,381)		(3,183)
Purchases of spectrum licenses and other intangible assets, including deposits	(2,843)		(8,922)
Proceeds related to beneficial interests in securitization transactions	1,185		891
Acquisition of companies, net of cash and restricted cash acquired	(52)		(29)
Other, net	(1)		4
Net cash used in investing activities	(5,092)		(11,239)
Financing activities
Proceeds from issuance of long-term debt	—		6,763
Repayments of financing lease obligations	(302)		(287)
Repayments of short-term debt for purchases of inventory, property and equipment and other financial liabilities	—		(55)
Repayments of long-term debt	(1,632)		(2,219)
Tax withholdings on share-based awards	(172)		(218)
Cash payments for debt prepayment or debt extinguishment costs	—		(65)
Other, net	(30)		(45)
Net cash (used in) provided by financing activities	(2,136)		3,874
Change in cash and cash equivalents, including restricted cash	(3,383)		(3,704)
Cash and cash equivalents, including restricted cash
Beginning of period	6,703		10,463
End of period	$	3,320	$	6,759

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

5

T-Mobile US, Inc.

Condensed Consolidated Statement of Stockholders’ Equity

(Unaudited)

(in millions, except shares)	Common Stock Outstanding	Treasury Shares at Cost		Par Value and Additional Paid-in Capital		Accumulated Other Comprehensive Loss		Accumulated Deficit		Total Stockholders' Equity
Balance as of December 31, 2021	1,249,213,681	$	(13)	$	73,292	$	(1,365)	$	(2,812)	$	69,102
Net income	—	—		—		—		713		713
Other comprehensive income	—	—		—		36		—		36
Stock-based compensation	—	—		157		—		—		157
Exercise of stock options	49,647	—		2		—		—		2
Stock issued for employee stock purchase plan	1,276,725	—		138		—		—		138
Issuance of vested restricted stock units	4,210,669	—		—		—		—		—
Shares withheld related to net share settlement of stock awards and stock options	(1,370,306)	—		(172)		—		—		(172)
Transfers with NQDC plan	(27,716)	(3)		3		—		—		—
Balance as of March 31, 2022	1,253,352,700	$	(16)	$	73,420	$	(1,329)	$	(2,099)	$	69,976
Balance as of December 31, 2020	1,241,805,706	$	(11)	$	72,772	$	(1,581)	$	(5,836)	$	65,344
Net income	—	—		—		—		933		933
Other comprehensive income	—	—		—		36		—		36
Stock-based compensation	—	—		154		—		—		154
Exercise of stock options	80,802	—		3		—		—		3
Stock issued for employee stock purchase plan	1,272,253	—		125		—		—		125
Issuance of vested restricted stock units	5,421,839	—		—		—		—		—
Shares withheld related to net share settlement of stock awards and stock options	(1,785,987)	—		(218)		—		—		(218)
Transfers with NQDC plan	(21,438)	(3)		3		—		—		—
Balance as of March 31, 2021	1,246,773,175	$	(14)	$	72,839	$	(1,545)	$	(4,903)	$	66,377

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

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T-Mobile US, Inc.

Index for Notes to the Condensed Consolidated Financial Statements

Note 1	Summary of Significant Accounting Policies	8
Note 2	Receivables and Related Allowance for Credit Losses	9
Note 3	Sales of Certain Receivables	11
Note 4	Spectrum License Transactions	12
Note 5	Fair Value Measurements	13
Note 6	Debt	14
Note 7	Tower Obligations	14
Note 8	Revenue from Contracts with Customers	16
Note 9	Earnings Per Share	18
Note 10	Leases	18
Note 11	Commitments and Contingencies	19
Note 12	Restructuring Costs	22
Note 13	Additional Financial Information	23
Note 14	Subsequent Events	23

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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, 2021.

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

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

Accounting Pronouncements Adopted During the Current Year

Reference Rate Reform

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

Contract Assets and Contract Liabilities Acquired in a Business Combination

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

Accounting Pronouncements Not Yet Adopted

Troubled Debt Restructurings and Vintage Disclosures

In March 2022, the FASB issued ASU 2022-02, “Financial Instruments—Credit Losses (Topic 326): Troubled Debt Restructurings and Vintage Disclosures.” The standard eliminates the accounting guidance within ASC 310-40 for troubled debt restructurings by creditors while enhancing disclosure requirements for certain loan refinancings and restructurings by

8

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. The standard will become effective for us beginning January 1, 2023, and should be applied prospectively, with an option for modified retrospective application for provisions related to recognition and measurement of troubled debt restructurings. Early adoption is permitted for us at any time. We are currently evaluating the impact of the standard on our future consolidated financial statements.

Note 2 – 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 period end.

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

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

Accounts Receivable Portfolio Segment

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

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

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

We consider the need to adjust our estimate of credit losses for reasonable and supportable forecasts of future economic 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 economic indicators such as unemployment rates to assess their level of correlation with our historical credit loss statistics.

EIP Receivables Portfolio Segment

Based upon customer credit profiles at the time of customer origination, we classify the EIP receivables segment into 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 using several factors, such as credit bureau information, consumer credit risk scores and service and device plan characteristics. EIP receivables had a combined weighted-average effective interest rate of 5.7% and 5.6% as of March 31, 2022 and December 31, 2021, respectively.

9

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

(in millions)	March 31, 2022		December 31, 2021
EIP receivables, gross	$	8,547	$	8,207
Unamortized imputed discount	(381)		(378)
EIP receivables, net of unamortized imputed discount	8,166		7,829
Allowance for credit losses	(268)		(252)
EIP receivables, net of allowance for credit losses and imputed discount	$	7,898	$	7,577
Classified on the condensed consolidated balance sheets as:
Equipment installment plan receivables, net of allowance for credit losses and imputed discount	$	5,061	$	4,748
Equipment installment plan receivables due after one year, net of allowance for credit losses and imputed discount	2,837		2,829
EIP receivables, net of allowance for credit losses and imputed discount	$	7,898	$	7,577

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

The following table presents the amortized cost of our EIP receivables by delinquency status, customer credit class and year of origination as of March 31, 2022:

	Originated in 2022				Originated in 2021				Originated prior to 2021				Total EIP Receivables, net of unamortized imputed discounts
(in millions)	Prime		Subprime		Prime		Subprime		Prime		Subprime		Prime		Subprime		Grand total
Current - 30 days past due	$	1,434	$	1,053	$	2,895	$	1,736	$	602	$	294	$	4,931	$	3,083	$	8,014
31 - 60 days past due	8		8		25		33		5		6		38		47		85
61 - 90 days past due	1		1		9		15		2		3		12		19		31
More than 90 days past due	—		1		9		16		3		7		12		24		36
EIP receivables, net of unamortized imputed discount	$	1,443	$	1,063	$	2,938	$	1,800	$	612	$	310	$	4,993	$	3,173	$	8,166

We estimate 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 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 or severity of the default loss after adjusting for estimated recoveries.

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

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

	March 31, 2022						March 31, 2021
(in millions)	Accounts Receivable Allowance		EIP Receivables Allowance		Total		Accounts Receivable Allowance		EIP Receivables Allowance		Total
Allowance for credit losses and imputed discount, beginning of period	$	146	$	630	$	776	$	194	$	605	$	799
Bad debt expense	96		114		210		28		54		82
Write-offs, net of recoveries	(78)		(99)		(177)		(79)		(54)		(133)
Change in imputed discount on short-term and long-term EIP receivables	N/A		30		30		N/A		66		66
Impact on the imputed discount from sales of EIP receivables	N/A		(26)		(26)		N/A		(35)		(35)
Allowance for credit losses and imputed discount, end of period	$	164	$	649	$	813	$	143	$	636	$	779

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Off-Balance-Sheet Credit Exposures

We do not have material, unmitigated off-balance-sheet credit exposures as of March 31, 2022. In connection with the sales of certain service and EIP accounts receivable pursuant to the sale arrangements, we have deferred purchase price assets included 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 3 – Sales of Certain Receivables for further information.

Note 3 – 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

As of both March 31, 2022 and December 31, 2021, 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, and liabilities included on our Condensed Consolidated Balance Sheets with respect to the EIP BRE:

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

Sales of Service Accounts Receivable

The maximum funding commitment of the service receivable sale arrangement is $950 million and the facility expires in February 2023. As of both March 31, 2022 and December 31, 2021, the service receivable sale arrangement provided funding of $775 million.

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

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

(in millions)	March 31, 2022		December 31, 2021
Other current assets	$	231	$	231
Other current liabilities	317		348

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Sales of Receivables

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

(in millions)	March 31, 2022		December 31, 2021
Derecognized net service receivables and EIP receivables	$	2,480	$	2,492
Other current assets	613		655
of which, deferred purchase price	611		654
Other long-term assets	108		125
of which, deferred purchase price	108		125
Other current liabilities	317		348
Other long-term liabilities	2		—
Net cash proceeds since inception	1,750		1,754
Of which:
Change in net cash proceeds during the year-to-date period	(4)		39
Net cash proceeds funded by reinvested collections	1,754		1,715

At inception, we elected to measure the deferred purchase price at fair value with changes in fair value included in Selling, general and administrative expense on our Condensed Consolidated Statements of Comprehensive Income. The fair value of the deferred purchase price is determined based on a discounted cash flow model which uses primarily Level 3 inputs, including customer default rates. As of March 31, 2022 and December 31, 2021, our deferred purchase price related to the sales of service receivables and EIP receivables was $719 million and $779 million, respectively.

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

Continuing Involvement

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

Note 4 – Spectrum License Transactions

The following table summarizes our spectrum license activity for the three months ended March 31, 2022:

(in millions)	2022
Spectrum licenses, beginning of year	$	92,606
Spectrum license acquisitions	55
Spectrum licenses, end of period	$	92,661

In January 2022, the FCC announced that we were the winning bidder of 199 licenses in Auction 110 (mid-band spectrum) for an aggregate purchase price of $2.9 billion. At inception of Auction 110 in September 2021, we deposited $100 million. We paid the FCC the remaining $2.8 billion for the licenses won in the auction in February 2022.

The aggregate cash payments made to the FCC are included in Other assets as of March 31, 2022 in our Condensed Consolidated Balance Sheets, and will remain there until the corresponding licenses are received. The timing of when the licenses will be issued will be determined by the FCC after all post-auction procedures have been completed, which we expect to occur in mid-2022. Cash payments to acquire spectrum licenses and payments for costs to clear spectrum are included in Purchases of spectrum licenses and other intangible assets, including deposits in our Condensed Consolidated Statements of Cash Flows for the three months ended March 31, 2022.

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Note 5 – 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.

Derivative Financial Instruments

Periodically, we use derivatives to manage exposure to market risk, such as interest rate risk. We designate certain derivatives as hedging instruments in a qualifying hedge accounting relationship (cash flow hedge) to help minimize significant, unplanned fluctuations in cash flows caused by interest rate volatility. We do not use derivatives for trading or speculative purposes. Cash flows associated with qualifying hedge derivative instruments are presented in the same category on the Condensed Consolidated Statements of Cash Flows as the item being hedged. We did not have any significant derivative instruments outstanding as of March 31, 2022 and December 31, 2021.

Interest Rate Lock Derivatives

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

Aggregate changes in the fair value of the interest rate lock derivatives, net of tax and amortization, of $1.4 billion and $1.5 billion are presented in Accumulated other comprehensive loss on our Condensed Consolidated Balance Sheets as of March 31, 2022 and December 31, 2021, respectively.

For the three months ended March 31, 2022 and 2021, $50 million and $46 million, respectively, were amortized from Accumulated other comprehensive loss into Interest expense, net in the Condensed Consolidated Statements of Comprehensive Income. We expect to amortize $207 million of the Accumulated other comprehensive loss associated with the derivatives into Interest expense, net over the 12 months ended March 31, 2023.

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 3 – 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 $719 million and $779 million as of March 31, 2022 and December 31, 2021, respectively. Fair value was equal to the carrying amount at March 31, 2022 and December 31, 2021.

Debt

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

Although we have determined the estimated fair values using available market information and commonly accepted valuation methodologies, considerable judgment was required in interpreting market data to develop fair value estimates for the Senior Notes to affiliates. The fair value estimates were based on information available as of March 31, 2022 and December 31, 2021. As such, our estimates are not necessarily indicative of the amount we could realize in a current market exchange.

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

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

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

Note 6 – Debt

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

(in millions)	December 31, 2021		Note Redemptions (1)		Repayments		Reclassifications (1)		Other (2)		March 31, 2022
Short-term debt	$	3,378	$	(500)	$	(132)	$	132	$	(13)	$	2,865
Long-term debt	67,076		—		—		(132)		(83)		66,861
Total debt to third parties	70,454		(500)		(132)		—		(96)		69,726
Short-term debt to affiliates	2,245		(1,000)		—		—		5		1,250
Long-term debt to affiliates	1,494		—		—		—		—		1,494
Total debt	$	74,193	$	(1,500)	$	(132)	$	—	$	(91)	$	72,470

(1)Note redemptions and reclassifications are recorded net of related issuance costs, discounts and premiums.

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

Our effective interest rate, excluding the impact of derivatives and capitalized interest, was approximately 3.9% and 4.3% for the three months ended March 31, 2022 and 2021, respectively, on weighted-average debt outstanding of $73.7 billion for both the three months ended March 31, 2022 and 2021. The weighted-average debt outstanding was calculated by applying an average of the monthly ending balances of total short-term and long-term debt and short-term and long-term debt to affiliates, net of unamortized premiums, discounts, debt issuance costs and consent fees.

Note Redemptions and Repayments

During the three months ended March 31, 2022, we made the following note redemptions and repayments:

(in millions)	Principal Amount		Redemption or Repayment Date	Redemption Price
4.000% Senior Notes due 2022	$	500	March 16, 2022	100.000	%
4.000% Senior Notes to affiliates due 2022	1,000		March 16, 2022	100.000	%
Total Redemptions	$	1,500