UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

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

For the quarterly period ended June 30, 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 July 22, 2022
Common Stock, par value $0.00001 per share	1,254,041,236

1

T-Mobile US, Inc.

Form 10-Q

For the Quarter Ended June 30, 2022

Table of Contents

PART I. FINANCIAL INFORMATION
	Item 1.	Financial Statements	3
		Condensed Consolidated Balance Sheets	3
		Condensed Consolidated Statements of Comprehensive (Loss) Income	4
		Condensed Consolidated Statements of Cash Flows	5
		Condensed Consolidated Statement of Stockholders’ Equity	6
		Notes to the Condensed Consolidated Financial Statements	9
	Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	26
	Item 3.	Quantitative and Qualitative Disclosures About Market Risk	48
	Item 4.	Controls and Procedures	48
PART II. OTHER INFORMATION
	Item 1.	Legal Proceedings	48
	Item 1A.	Risk Factors	49
	Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	51
	Item 3.	Defaults Upon Senior Securities	51
	Item 4.	Mine Safety Disclosures	51
	Item 5.	Other Information	51
	Item 6.	Exhibits	52
		Signatures	53

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)	June 30, 2022		December 31, 2021
Assets
Current assets
Cash and cash equivalents	$	3,151	$	6,631
Accounts receivable, net of allowance for credit losses of $177 and $146	4,466		4,194
Equipment installment plan receivables, net of allowance for credit losses and imputed discount of $600 and $494	5,129		4,748
Inventory	2,243		2,567
Prepaid expenses	776		746
Other current assets	1,711		2,005
Total current assets	17,476		20,891
Property and equipment, net	40,245		39,803
Operating lease right-of-use assets	30,110		26,959
Financing lease right-of-use assets	3,588		3,322
Goodwill	12,234		12,188
Spectrum licenses	95,632		92,606
Other intangible assets, net	4,140		4,733
Equipment installment plan receivables due after one year, net of allowance for credit losses and imputed discount of $122 and $136	2,605		2,829
Other assets	3,433		3,232
Total assets	$	209,463	$	206,563
Liabilities and Stockholders' Equity
Current liabilities
Accounts payable and accrued liabilities	$	11,182	$	11,405
Short-term debt	2,942		3,378
Short-term debt to affiliates	—		2,245
Deferred revenue	810		856
Short-term operating lease liabilities	3,348		3,425
Short-term financing lease liabilities	1,220		1,120
Other current liabilities	1,120		1,070
Total current liabilities	20,622		23,499
Long-term debt	66,552		67,076
Long-term debt to affiliates	1,495		1,494
Tower obligations	4,006		2,806
Deferred tax liabilities	10,433		10,216
Operating lease liabilities	30,916		25,818
Financing lease liabilities	1,597		1,455
Other long-term liabilities	3,808		5,097
Total long-term liabilities	118,807		113,962
Commitments and contingencies (Note 11)
Stockholders' equity
Common Stock, par value $0.00001 per share, 2,000,000,000 shares authorized; 1,255,574,620 and 1,250,751,148 shares issued, 1,254,010,072 and 1,249,213,681 shares outstanding	—		—
Additional paid-in capital	73,552		73,292
Treasury stock, at cost, 1,564,549 and 1,537,468 shares issued	(16)		(13)
Accumulated other comprehensive loss	(1,295)		(1,365)
Accumulated deficit	(2,207)		(2,812)
Total stockholders' equity	70,034		69,102
Total liabilities and stockholders' equity	$	209,463	$	206,563

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

3

T-Mobile US, Inc.

Condensed Consolidated Statements of Comprehensive (Loss) Income

(Unaudited)

	Three Months Ended June 30,				Six Months Ended June 30,
(in millions, except share and per share amounts)	2022		2021		2022		2021
Revenues
Postpaid revenues	$	11,445	$	10,492	$	22,646	$	20,795
Prepaid revenues	2,469		2,427		4,924		4,778
Wholesale and other service revenues	1,402		1,573		2,874		3,111
Total service revenues	15,316		14,492		30,444		28,684
Equipment revenues	4,130		5,215		8,824		10,561
Other revenues	255		243		553		464
Total revenues	19,701		19,950		39,821		39,709
Operating expenses
Cost of services, exclusive of depreciation and amortization shown separately below	4,060		3,491		7,787		6,875
Cost of equipment sales, exclusive of depreciation and amortization shown separately below	5,108		5,453		11,054		10,595
Selling, general and administrative	5,856		4,823		10,912		9,628
Impairment expense	477		—		477		—
Depreciation and amortization	3,491		4,077		7,076		8,366
Total operating expenses	18,992		17,844		37,306		35,464
Operating income	709		2,106		2,515		4,245
Other expense, net
Interest expense, net	(851)		(850)		(1,715)		(1,685)
Other expense, net	(21)		(1)		(32)		(126)
Total other expense, net	(872)		(851)		(1,747)		(1,811)
(Loss) income before income taxes	(163)		1,255		768		2,434
Income tax benefit (expense)	55		(277)		(163)		(523)
Net (loss) income	$	(108)	$	978	$	605	$	1,911
Net (loss) income	$	(108)	$	978	$	605	$	1,911
Other comprehensive income, net of tax
Reclassification of loss from cash flow hedges, net of tax effect of $13, $12, $26, and $24	37		34		74		68
Unrealized (loss) gain on foreign currency translation adjustment, net of tax effect of $(1), $0, $(1), and $0	(3)		1		(4)		3
Other comprehensive income	34		35		70		71
Total comprehensive (loss) income	$	(74)	$	1,013	$	675	$	1,982
(Loss) earnings per share
Basic	$	(0.09)	$	0.78	$	0.48	$	1.53
Diluted	$	(0.09)	$	0.78	$	0.48	$	1.52
Weighted-average shares outstanding
Basic	1,253,932,986		1,247,563,331		1,252,228,959		1,245,552,847
Diluted	1,253,932,986		1,253,718,122		1,256,873,827		1,254,264,464

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 June 30,				Six Months Ended June 30,
(in millions)	2022		2021		2022		2021
Operating activities
Net (loss) income	$	(108)	$	978	$	605	$	1,911
Adjustments to reconcile net (loss) income to net cash provided by operating activities
Depreciation and amortization	3,491		4,077		7,076		8,366
Stock-based compensation expense	154		134		295		272
Deferred income tax (benefit) expense	(76)		226		109		437
Bad debt expense	311		72		521		154
Losses (gains) from sales of receivables	62		(12)		108		(30)
Losses on redemption of debt	—		28		—		129
Impairment expense	477		—		477		—
Changes in operating assets and liabilities
Accounts receivable	(1,573)		(1,839)		(2,557)		(1,743)
Equipment installment plan receivables	(189)		(568)		(724)		(1,295)
Inventories	484		584		391		863
Operating lease right-of-use assets	1,693		1,272		3,162		2,396
Other current and long-term assets	(112)		(154)		(116)		(100)
Accounts payable and accrued liabilities	36		28		(23)		(1,356)
Short- and long-term operating lease liabilities	(747)		(996)		(1,518)		(2,365)
Other current and long-term liabilities	200		(47)		37		(264)
Other, net	106		(4)		211		65
Net cash provided by operating activities	4,209		3,779		8,054		7,440
Investing activities
Purchases of property and equipment, including capitalized interest of $(13), $(57), $(28), and $(141)	(3,572)		(3,270)		(6,953)		(6,453)
Purchases of spectrum licenses and other intangible assets, including deposits	(116)		(8)		(2,959)		(8,930)
Proceeds from sales of tower sites	—		31		—		31
Proceeds related to beneficial interests in securitization transactions	1,121		1,137		2,306		2,028
Acquisition of companies, net of cash and restricted cash acquired	—		(1)		(52)		(30)
Other, net	8		28		7		32
Net cash used in investing activities	(2,559)		(2,083)		(7,651)		(13,322)
Financing activities
Proceeds from issuance of long-term debt	—		3,006		—		9,769
Repayments of financing lease obligations	(288)		(269)		(590)		(556)
Repayments of short-term debt for purchases of inventory, property and equipment and other financial liabilities	—		(36)		—		(91)
Repayments of long-term debt	(1,381)		(3,150)		(3,013)		(5,369)
Tax withholdings on share-based awards	(43)		(76)		(215)		(294)
Cash payments for debt prepayment or debt extinguishment costs	—		(6)		—		(71)
Other, net	(32)		(46)		(62)		(91)
Net cash (used in) provided by financing activities	(1,744)		(577)		(3,880)		3,297
Change in cash and cash equivalents, including restricted cash	(94)		1,119		(3,477)		(2,585)
Cash and cash equivalents, including restricted cash
Beginning of period	3,320		6,759		6,703		10,463
End of period	$	3,226	$	7,878	$	3,226	$	7,878

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 March 31, 2022	1,253,352,700	$	(16)	$	73,420	$	(1,329)	$	(2,099)	$	69,976
Net loss	—	—		—		—		(108)		(108)
Other comprehensive income	—	—		—		34		—		34
Stock-based compensation	—	—		168		—		—		168
Exercise of stock options	40,556	—		2		—		—		2
Issuance of vested restricted stock units	950,742	—		—		—		—		—
Shares withheld related to net share settlement of stock awards and stock options	(334,561)	—		(43)		—		—		(43)
Remeasurement of uncertain tax positions	—	—		5		—		—		5
Transfers with NQDC plan	635	—		—		—		—		—
Balance as of June 30, 2022	1,254,010,072	$	(16)	$	73,552	$	(1,295)	$	(2,207)	$	70,034
Balance as of December 31, 2021	1,249,213,681	$	(13)	$	73,292	$	(1,365)	$	(2,812)	$	69,102
Net income	—	—		—		—		605		605
Other comprehensive income	—	—		—		70		—		70
Stock-based compensation	—	—		325		—		—		325
Exercise of stock options	90,203	—		4		—		—		4
Stock issued for employee stock purchase plan	1,276,725	—		138		—		—		138
Issuance of vested restricted stock units	5,161,411	—		—		—		—		—
Shares withheld related to net share settlement of stock awards and stock options	(1,704,867)	—		(215)		—		—		(215)
Remeasurement of uncertain tax positions	—	—		5		—		—		5
Transfers with NQDC plan	(27,081)	(3)		3		—		—		—
Balance as of June 30, 2022	1,254,010,072	$	(16)	$	73,552	$	(1,295)	$	(2,207)	$	70,034

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

6

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 March 31, 2021	1,246,773,175	$	(14)	$	72,839	$	(1,545)	$	(4,903)	$	66,377
Net income	—	—		—		—		978		978
Other comprehensive income	—	—		—		35		—		35
Stock-based compensation	—	—		150		—		—		150
Exercise of stock options	100,238	—		6		—		—		6
Issuance of vested restricted stock units	1,603,258	—		—		—		—		—
Shares withheld related to net share settlement of stock awards and stock options	(559,630)	—		(76)		—		—		(76)
Transfers with NQDC plan	3,495	—		—		—		—		—
Balance as of June 30, 2021	1,247,920,536	$	(14)	$	72,919	$	(1,510)	$	(3,925)	$	67,470
Balance as of December 31, 2020	1,241,805,706	$	(11)	$	72,772	$	(1,581)	$	(5,836)	$	65,344
Net income	—	—		—		—		1,911		1,911
Other comprehensive income	—	—		—		71		—		71
Stock-based compensation	—	—		304		—		—		304
Exercise of stock options	181,040	—		9		—		—		9
Stock issued for employee stock purchase plan	1,272,253	—		125		—		—		125
Issuance of vested restricted stock units	7,025,097	—		—		—		—		—
Shares withheld related to net share settlement of stock awards and stock options	(2,345,617)	—		(294)		—		—		(294)
Transfers with NQDC plan	(17,943)	(3)		3		—		—		—
Balance as of June 30, 2021	1,247,920,536	$	(14)	$	72,919	$	(1,510)	$	(3,925)	$	67,470

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

7

T-Mobile US, Inc.

Index for Notes to the Condensed Consolidated Financial Statements

Note 1	Summary of Significant Accounting Policies	9
Note 2	Receivables and Related Allowance for Credit Losses	10
Note 3	Sales of Certain Receivables	12
Note 4	Spectrum License Transactions	14
Note 5	Fair Value Measurements	14
Note 6	Debt	15
Note 7	Tower Obligations	16
Note 8	Revenue from Contracts with Customers	17
Note 9	(Loss) Earnings Per Share	19
Note 10	Leases	20
Note 11	Commitments and Contingencies	21
Note 12	Restructuring Costs	23
Note 13	Additional Financial Information	24
Note 14	Subsequent Events	25

8

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