UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

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

For the quarterly period ended June 30, 2023

or

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

For the transition period from    to

Commission File Number: 1-33409

T-MOBILE US, INC.

(Exact name of registrant as specified in its charter)

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

12920 SE 38th Street

Bellevue, Washington

(Address of principal executive offices)

98006-1350

(Zip Code)

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

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

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

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

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

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

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

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

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

Class	Shares Outstanding as of July 21, 2023
Common Stock, par value $0.00001 per share	1,176,457,229

1

T-Mobile US, Inc.

Form 10-Q

For the Quarter Ended June 30, 2023

Table of Contents

PART I. FINANCIAL INFORMATION
	Item 1.	Financial Statements	3
		Condensed Consolidated Balance Sheets	3
		Condensed Consolidated Statements of Comprehensive Income (Loss)	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	28
	Item 3.	Quantitative and Qualitative Disclosures About Market Risk	51
	Item 4.	Controls and Procedures	51
PART II. OTHER INFORMATION
	Item 1.	Legal Proceedings	51
	Item 1A.	Risk Factors	52
	Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	54
	Item 3.	Defaults Upon Senior Securities	55
	Item 4.	Mine Safety Disclosures	55
	Item 5.	Other Information	55
	Item 6.	Exhibits	56
		Signatures	57

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, 2023		December 31, 2022
Assets
Current assets
Cash and cash equivalents	$	6,647	$	4,507
Accounts receivable, net of allowance for credit losses of $151 and $167	4,592		4,445
Equipment installment plan receivables, net of allowance for credit losses and imputed discount of $623 and $667	4,779		5,123
Inventory	1,373		1,884
Prepaid expenses	814		673
Other current assets	2,032		2,435
Total current assets	20,237		19,067
Property and equipment, net	41,804		42,086
Operating lease right-of-use assets	27,891		28,715
Financing lease right-of-use assets	3,365		3,257
Goodwill	12,234		12,234
Spectrum licenses	95,889		95,798
Other intangible assets, net	3,032		3,508
Equipment installment plan receivables due after one year, net of allowance for credit losses and imputed discount of $131 and $144	1,966		2,546
Other assets	4,184		4,127
Total assets	$	210,602	$	211,338
Liabilities and Stockholders' Equity
Current liabilities
Accounts payable and accrued liabilities	$	9,872	$	12,275
Short-term debt	7,731		5,164
Deferred revenue	810		780
Short-term operating lease liabilities	3,289		3,512
Short-term financing lease liabilities	1,220		1,161
Other current liabilities	1,647		1,850
Total current liabilities	24,569		24,742
Long-term debt	68,646		65,301
Long-term debt to affiliates	1,495		1,495
Tower obligations	3,860		3,934
Deferred tax liabilities	12,226		10,884
Operating lease liabilities	29,053		29,855
Financing lease liabilities	1,254		1,370
Other long-term liabilities	3,749		4,101
Total long-term liabilities	120,283		116,940
Commitments and contingencies (Note 13)
Stockholders' equity
Common stock, par value $0.00001 per share, 2,000,000,000 shares authorized; 1,261,489,287 and 1,256,876,527 shares issued, 1,180,398,748 and 1,233,960,078 shares outstanding	—		—
Additional paid-in capital	74,161		73,941
Treasury stock, at cost, 81,090,539 and 22,916,449 shares	(11,392)		(3,016)
Accumulated other comprehensive loss	(957)		(1,046)
Retained earnings (accumulated deficit)	3,938		(223)
Total stockholders' equity	65,750		69,656
Total liabilities and stockholders' equity	$	210,602	$	211,338

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

3

T-Mobile US, Inc.

Condensed Consolidated Statements of Comprehensive Income (Loss)

(Unaudited)

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

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

4

T-Mobile US, Inc.

Condensed Consolidated Statements of Cash Flows

(Unaudited)

	Three Months Ended June 30,				Six Months Ended June 30,
(in millions)	2023		2022		2023		2022
Operating activities
Net income (loss)	$	2,221	$	(108)	$	4,161	$	605
Adjustments to reconcile net income (loss) to net cash provided by operating activities
Depreciation and amortization	3,110		3,491		6,313		7,076
Stock-based compensation expense	167		154		344		295
Deferred income tax expense (benefit)	703		(76)		1,314		109
Bad debt expense	213		311		435		521
Losses from sales of receivables	51		62		89		108
Impairment expense	—		477		—		477
Loss on remeasurement of disposal group held for sale	22		—		9		—
Changes in operating assets and liabilities
Accounts receivable	(1,514)		(1,573)		(2,782)		(2,557)
Equipment installment plan receivables	246		(189)		398		(724)
Inventory	362		484		491		391
Operating lease right-of-use assets	929		1,693		1,937		3,162
Other current and long-term assets	354		(112)		212		(116)
Accounts payable and accrued liabilities	(864)		36		(1,746)		(23)
Short- and long-term operating lease liabilities	(1,183)		(747)		(2,192)		(1,518)
Other current and long-term liabilities	(466)		200		(649)		37
Other, net	4		106		72		211
Net cash provided by operating activities	4,355		4,209		8,406		8,054
Investing activities
Purchases of property and equipment, including capitalized interest of $(14), $(13), $(28) and $(28)	(2,789)		(3,572)		(5,790)		(6,953)
Purchases of spectrum licenses and other intangible assets, including deposits	(33)		(116)		(106)		(2,959)
Proceeds from sales of tower sites	2		—		8		—
Proceeds related to beneficial interests in securitization transactions	1,309		1,121		2,654		2,306
Acquisition of companies, net of cash and restricted cash acquired	—		—		—		(52)
Other, net	24		8		19		7
Net cash used in investing activities	(1,487)		(2,559)		(3,215)		(7,651)
Financing activities
Proceeds from issuance of long-term debt	3,450		—		6,463		—
Repayments of financing lease obligations	(304)		(288)		(610)		(590)
Repayments of long-term debt	(223)		(1,381)		(354)		(3,013)
Repurchases of common stock	(3,591)		—		(8,210)		—
Tax withholdings on share-based awards	(70)		(43)		(257)		(215)
Other, net	(46)		(32)		(89)		(62)
Net cash used in financing activities	(784)		(1,744)		(3,057)		(3,880)
Change in cash and cash equivalents, including restricted cash and cash held for sale	2,084		(94)		2,134		(3,477)
Cash and cash equivalents, including restricted cash and cash held for sale
Beginning of period	4,724		3,320		4,674		6,703
End of period	$	6,808	$	3,226	$	6,808	$	3,226

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

5

T-Mobile US, Inc.

Condensed Consolidated Statement of Stockholders’ Equity

(Unaudited)

(in millions, except shares)	Common Stock Outstanding	Treasury Stock Outstanding	Treasury Shares at Cost		Par Value and Additional Paid-in Capital		Accumulated Other Comprehensive Loss		Retained Earnings (Accumulated Deficit)		Total Stockholders' Equity
Balance as of March 31, 2023	1,204,696,325	55,910,664	$	(7,831)	$	74,043	$	(1,004)	$	1,717	$	66,925
Net income	—	—	—		—		—		2,221		2,221
Other comprehensive income	—	—	—		—		47		—		47
Stock-based compensation	—	—	—		185		—		—		185
Issuance of vested restricted stock units	1,321,269	—	—		—		—		—		—
Shares withheld related to net share settlement of stock awards and stock options	(483,892)	—	—		(70)		—		—		(70)
Repurchases of common stock	(25,183,838)	25,183,838	(3,561)		—		—		—		(3,561)
Other, net	48,884	(3,963)	—		3		—		—		3
Balance as of June 30, 2023	1,180,398,748	81,090,539	$	(11,392)	$	74,161	$	(957)	$	3,938	$	65,750
Balance as of December 31, 2022	1,233,960,078	22,916,449	$	(3,016)	$	73,941	$	(1,046)	$	(223)	$	69,656
Net income	—	—	—		—		—		4,161		4,161
Other comprehensive income	—	—	—		—		89		—		89
Stock-based compensation	—	—	—		340		—		—		340
Stock issued for employee stock purchase plan	1,063,426	—	—		126		—		—		126
Issuance of vested restricted stock units	5,166,070	—	—		—		—		—		—
Shares withheld related to net share settlement of stock awards and stock options	(1,747,248)	—	—		(257)		—		—		(257)
Repurchases of common stock	(58,147,778)	58,147,778	(8,371)		—		—		—		(8,371)
Other, net	104,200	26,312	(5)		11		—		—		6
Balance as of June 30, 2023	1,180,398,748	81,090,539	$	(11,392)	$	74,161	$	(957)	$	3,938	$	65,750

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

6

T-Mobile US, Inc.

Condensed Consolidated Statement of Stockholders’ Equity

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

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

7

T-Mobile US, Inc.

Index for Notes to the Condensed Consolidated Financial Statements

Note 1	Summary of Significant Accounting Policies	9
Note 2	Business Combination	10
Note 3	Receivables and Related Allowance for Credit Losses	10
Note 4	Sales of Certain Receivables	12
Note 5	Spectrum License Transactions	14
Note 6	Fair Value Measurements	15
Note 7	Debt	16
Note 8	Tower Obligations	18
Note 9	Revenue from Contracts with Customers	19
Note 10	Repurchases of Common Stock	21
Note 11	Wireline	21
Note 12	Earnings (Loss) Per Share	22
Note 13	Commitments and Contingencies	22
Note 14	Restructuring Costs	25
Note 15	Additional Financial Information	26
Note 16	Subsequent Events	27

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, 2022.

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

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

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

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

Accounting Pronouncements Adopted During the Current Year

Troubled Debt Restructurings and Vintage Disclosures

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

9

Note 2 – Business Combination

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

Note 3 – Receivables and Related Allowance for Credit Losses

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

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

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

Accounts Receivable Portfolio Segment

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

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

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

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

EIP Receivables Portfolio Segment

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

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

EIP receivables had a combined weighted-average effective interest rate of 9.3% and 8.0% as of June 30, 2023, and December 31, 2022, respectively.

10

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

(in millions)	June 30, 2023		December 31, 2022
EIP receivables, gross	$	7,499	$	8,480
Unamortized imputed discount	(451)		(483)
EIP receivables, net of unamortized imputed discount	7,048		7,997
Allowance for credit losses	(303)		(328)
EIP receivables, net of allowance for credit losses and imputed discount	$	6,745	$	7,669
Classified on our condensed consolidated balance sheets as:
Equipment installment plan receivables, net of allowance for credit losses and imputed discount	$	4,779	$	5,123
Equipment installment plan receivables due after one year, net of allowance for credit losses and imputed discount	1,966		2,546
EIP receivables, net of allowance for credit losses and imputed discount	$	6,745	$	7,669

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

The following table presents the amortized cost of our EIP receivables by delinquency status, customer credit class and year of origination as of June 30, 2023:

	Originated in 2023				Originated in 2022				Originated prior to 2022				Total EIP Receivables, net of unamortized imputed discounts
(in millions)	Prime		Subprime		Prime		Subprime		Prime		Subprime		Prime		Subprime		Grand total
Current - 30 days past due	$	1,586	$	1,216	$	1,905	$	1,294	$	609	$	315	$	4,100	$	2,825	$	6,925
31 - 60 days past due	8		12		10		17		3		3		21		32		53
61 - 90 days past due	3		7		7		13		2		3		12		23		35
More than 90 days past due	2		4		7		15		3		4		12		23		35
EIP receivables, net of unamortized imputed discount	$	1,599	$	1,239	$	1,929	$	1,339	$	617	$	325	$	4,145	$	2,903	$	7,048

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

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

The following table presents write-offs of our EIP receivables by year of origination for the six months ended June 30, 2023:

(in millions)	Originated in 2023		Originated in 2022		Originated prior to 2022		Total write-offs
Write-offs	$	21	$	179	$	55	$	255

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Activity for the six months ended June 30, 2023 and 2022, in the allowance for credit losses and unamortized imputed discount balances for the accounts receivable and EIP receivables segments were as follows:

	June 30, 2023						June 30, 2022
(in millions)	Accounts Receivable Allowance		EIP Receivables Allowance		Total		Accounts Receivable Allowance		EIP Receivables Allowance		Total
Allowance for credit losses and imputed discount, beginning of period	$	167	$	811	$	978	$	146	$	630	$	776
Bad debt expense	205		230		435		201		320		521
Write-offs	(221)		(255)		(476)		(170)		(240)		(410)
Change in imputed discount on short-term and long-term EIP receivables	N/A		75		75		N/A		75		75
Impact on the imputed discount from sales of EIP receivables	N/A		(107)		(107)		N/A		(63)		(63)
Allowance for credit losses and imputed discount, end of period	$	151	$	754	$	905	$	177	$	722	$	899

Off-Balance-Sheet Credit Exposures

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

Note 4 – Sales of Certain Receivables

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

Sales of EIP Receivables

Overview of the Transaction

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

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

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

(in millions)	June 30, 2023		December 31, 2022
Other current assets	$	365	$	344
Other assets	124		136

Sales of Service Accounts Receivable

Overview of the Transaction

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

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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: