T-Mobile US, Inc. (Form: 10-Q, Received: 10/27/2022 16:09:56)

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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, 2022

☐ 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 October 20, 2022
Common Stock, par value $0.00001 per share			1,244,154,134

T-Mobile US, Inc.

Form 10-Q

For the Quarter Ended September 30, 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	9
	Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	31
	Item 3.	Quantitative and Qualitative Disclosures About Market Risk	55

	Item 4.	Controls and Procedures	55



PART II. OTHER INFORMATION
	Item 1.	Legal Proceedings	55
	Item 1A.	Risk Factors	56
	Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	60
	Item 3.	Defaults Upon Senior Securities	60
	Item 4.	Mine Safety Disclosures	60
	Item 5.	Other Information	60
	Item 6.	Exhibits	61










		Signatures	62

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, 2022		December 31, 2021
Assets
Current assets

Cash and cash equivalents	$	6,888	$	6,631
Accounts receivable, net of allowance for credit losses of $161 and $146	4,324		4,194
Equipment installment plan receivables, net of allowance for credit losses and imputed discount of $624 and $494	5,048		4,748

Inventory	2,247		2,567
Prepaid expenses	711		746
Other current assets	2,209		2,005

Total current assets	21,427		20,891
Property and equipment, net	41,034		39,803
Operating lease right-of-use assets	29,264		26,959
Financing lease right-of-use assets	3,619		3,322
Goodwill	12,234		12,188
Spectrum licenses	95,767		92,606
Other intangible assets, net	3,763		4,733
Equipment installment plan receivables due after one year, net of allowance for credit losses and imputed discount of $125 and $136	2,514		2,829

Other assets	3,877		3,232

Total assets	$	213,499	$	206,563
Liabilities and Stockholders' Equity
Current liabilities

Accounts payable and accrued liabilities	$	11,971	$	11,405

Short-term debt	7,398		3,378
Short-term debt to affiliates	—		2,245
Deferred revenue	777		856
Short-term operating lease liabilities	3,367		3,425
Short-term financing lease liabilities	1,239		1,120

Other current liabilities	1,610		1,070

Total current liabilities	26,362		23,499

Long-term debt	64,834		67,076
Long-term debt to affiliates	1,495		1,494
Tower obligations	3,970		2,806
Deferred tax liabilities	10,397		10,216
Operating lease liabilities	30,271		25,818
Financing lease liabilities	1,590		1,455


Other long-term liabilities	4,430		5,097

Total long-term liabilities	116,987		113,962
Commitments and contingencies (Note 14)
Stockholders' equity


Common Stock, par value $0.00001 per share, 2,000,000,000 shares authorized; 1,256,555,323 and 1,250,751,148 shares issued, 1,250,104,426 and 1,249,213,681 shares outstanding	—		—
Additional paid-in capital	73,797		73,292
Treasury stock, at cost, 6,450,896 and 1,537,468 shares issued	(685)		(13)
Accumulated other comprehensive loss	(1,263)		(1,365)
Accumulated deficit	(1,699)		(2,812)

Total stockholders' equity	70,150		69,102
Total liabilities and stockholders' equity	$	213,499	$	206,563

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

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)	2022		2021		2022		2021
Revenues

Postpaid revenues	$	11,548	$	10,804	$	34,194	$	31,599
Prepaid revenues	2,484		2,481		7,408		7,259
Wholesale and other service revenues	1,329		1,437		4,203		4,548


Total service revenues	15,361		14,722		45,805		43,406
Equipment revenues	3,855		4,660		12,679		15,221
Other revenues	261		242		814		706

Total revenues	19,477		19,624		59,298		59,333
Operating expenses

Cost of services, exclusive of depreciation and amortization shown separately below	3,712		3,538		11,499		10,413
Cost of equipment sales, exclusive of depreciation and amortization shown separately below	4,982		5,145		16,036		15,740
Selling, general and administrative	5,118		5,212		16,030		14,840
Impairment expense	—		—		477		—
Loss on disposal group held for sale	1,071		—		1,071		—
Depreciation and amortization	3,313		4,145		10,389		12,511


Total operating expenses	18,196		18,040		55,502		53,504
Operating income	1,281		1,584		3,796		5,829
Other expense, net

Interest expense, net	(827)		(836)		(2,542)		(2,521)


Other expense, net	(3)		(60)		(35)		(186)

Total other expense, net	(830)		(896)		(2,577)		(2,707)

Income before income taxes	451		688		1,219		3,122
Income tax benefit (expense)	57		3		(106)		(520)



Net income	$	508	$	691	$	1,113	$	2,602





Net income	$	508	$	691	$	1,113	$	2,602
Other comprehensive income, net of tax

Reclassification of loss from cash flow hedges, net of tax effect of $13, $12, $39, and $36	39		35		113		103

Unrealized loss on foreign currency translation adjustment, net of tax effect of $0, $0, $(1), and $0	(7)		(3)		(11)		—



Other comprehensive income	32		32		102		103
Total comprehensive income	$	540	$	723	$	1,215	$	2,705
Earnings per share



Basic	$	0.40	$	0.55	$	0.89	$	2.09



Diluted	$	0.40	$	0.55	$	0.88	$	2.07
Weighted-average shares outstanding
Basic	1,253,873,429		1,248,189,719		1,252,783,140		1,246,441,464
Diluted	1,259,210,271		1,253,661,245		1,258,061,478		1,254,391,787

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

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)	2022		2021		2022		2021
Operating activities

Net income	$	508	$	691	$	1,113	$	2,602
Adjustments to reconcile net income to net cash provided by operating activities
Depreciation and amortization	3,313		4,145		10,389		12,511
Stock-based compensation expense	150		131		445		403
Deferred income tax (benefit) expense	(36)		(27)		73		410
Bad debt expense	239		105		760		259
Losses (gains) from sales of receivables	60		4		168		(26)

Losses on redemption of debt	—		55		—		184



Impairment expense	—		—		477		—
Loss on remeasurement of disposal group held for sale	371		—		371		—
Changes in operating assets and liabilities
Accounts receivable	(1,224)		(454)		(3,781)		(2,197)
Equipment installment plan receivables	(77)		(530)		(801)		(1,825)
Inventories	(7)		41		384		904
Operating lease right-of-use assets	1,113		1,334		4,275		3,730
Other current and long-term assets	(334)		(88)		(450)		(188)
Accounts payable and accrued liabilities	342		111		319		(1,245)
Short- and long-term operating lease liabilities	(700)		(2,046)		(2,218)		(4,411)
Other current and long-term liabilities	550		(87)		587		(351)
Other, net	123		92		334		157

Net cash provided by operating activities	4,391		3,477		12,445		10,917
Investing activities

Purchases of property and equipment, including capitalized interest of $(16), $(46), $(44), and $(187)	(3,634)		(2,944)		(10,587)		(9,397)
Purchases of spectrum licenses and other intangible assets, including deposits	(360)		(407)		(3,319)		(9,337)
Proceeds from sales of tower sites	—		—		—		31
Proceeds related to beneficial interests in securitization transactions	1,308		1,071		3,614		3,099

Acquisition of companies, net of cash and restricted cash acquired	—		(1,886)		(52)		(1,916)



Other, net	131		14		138		46

Net cash used in investing activities	(2,555)		(4,152)		(10,206)		(17,474)
Financing activities

Proceeds from issuance of long-term debt	2,972		1,989		2,972		11,758



Repayments of financing lease obligations	(311)		(266)		(901)		(822)
Repayments of short-term debt for purchases of inventory, property and equipment and other financial liabilities	—		(76)		—		(167)
Repayments of long-term debt	(132)		(4,600)		(3,145)		(9,969)

Repurchases of common stock	(557)		—		(557)		—


Tax withholdings on share-based awards	(10)		(14)		(225)		(308)

Cash payments for debt prepayment or debt extinguishment costs	—		(45)		—		(116)
Other, net	(35)		(48)		(97)		(139)

Net cash provided by (used in) financing activities	1,927		(3,060)		(1,953)		237
Change in cash and cash equivalents, including restricted cash and cash held for sale	3,763		(3,735)		286		(6,320)
Cash and cash equivalents, including restricted cash and cash held for sale
Beginning of period	3,226		7,878		6,703		10,463
End of period	$	6,989	$	4,143	$	6,989	$	4,143

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

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
Exercise of stock options	26,614	—	—		1		—		—		1
Stock issued for employee stock purchase plan	802,361	—	—		89		—		—		89
Issuance of vested restricted stock units	219,301	—	—		—		—		—		—
Forfeiture of restricted stock awards	(42)	42	—		—		—		—		—
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)

Transfers with NQDC plan	6,010	(6,010)	—		—		—		—		—







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
Exercise of stock options	116,817	—	—		5		—		—		5
Stock issued for employee stock purchase plan	2,079,086	—	—		227		—		—		227
Issuance of vested restricted stock units	5,380,712	—	—		—		—		—		—
Forfeiture of restricted stock awards	(42)	42	—		—		—		—		—
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)
Remeasurement of uncertain tax positions	—	—	—		5		—		—		5
Transfers with NQDC plan	(21,071)	21,071	(3)		3		—		—		—

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.

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, 2021	1,247,920,536	1,557,821	$	(14)	$	72,919	$	(1,510)	$	(3,925)	$	67,470
Net income	—	—	—		—		—		691		691
Other comprehensive income	—	—	—		—		32		—		32
Stock-based compensation	—	—	—		147		—		—		147
Exercise of stock options	14,578	—	—		1		—		—		1
Stock issued for employee stock purchase plan	917,444	—	—		100		—		—		100
Issuance of vested restricted stock units	256,605	—	—		—		—		—		—

Shares withheld related to net share settlement of stock awards and stock options	(92,992)	—	—		(14)		—		—		(14)

Transfers with NQDC plan	18,894	(18,894)	1		(1)		—		—		—




Balance as of September 30, 2021	1,249,035,065	1,538,927	$	(13)	$	73,152	$	(1,478)	$	(3,234)	$	68,427

Balance as of December 31, 2020	1,241,805,706	1,539,878	$	(11)	$	72,772	$	(1,581)	$	(5,836)	$	65,344
Net income	—	—	—		—		—		2,602		2,602
Other comprehensive income	—	—	—		—		103		—		103

Stock-based compensation	—	—	—		451		—		—		451
Exercise of stock options	195,618	—	—		10		—		—		10
Stock issued for employee stock purchase plan	2,189,697	—	—		225		—		—		225
Issuance of vested restricted stock units	7,281,702	—	—		—		—		—		—

Shares withheld related to net share settlement of stock awards and stock options	(2,438,609)	—	—		(308)		—		—		(308)

Transfers with NQDC plan	951	(951)	(2)		2		—		—		—




Balance as of September 30, 2021	1,249,035,065	1,538,927	$	(13)	$	73,152	$	(1,478)	$	(3,234)	$	68,427

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

Index for Notes to the Condensed Consolidated Financial Statements

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	15
Note 6	Debt	16
Note 7	Tower Obligations	18
Note 8	Revenue from Contracts with Customers	19




Note 9	Repurchases of Common Stock	21
Note 10	Wireline	21
Note 11	Income Taxes	23
Note 12	Earnings Per Share	24
Note 13	Leases	24
Note 14	Commitments and Contingencies	25
Note 15	Restructuring Costs	28
Note 16	Additional Financial Information	29
Note 17	Subsequent Events	30

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, 2021.

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 “Purchase Agreement”), pursuant to which the Buyer will 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”).

The assets and liabilities of the Wireline Business disposal group are classified as held for sale and presented within Other current assets and Other current liabilities on our Condensed Consolidated Balance Sheets as of September 30, 2022. The fair value of the Wireline Business disposal group, less costs to sell, will be reassessed during each reporting period it remains classified as held for sale, and any remeasurement to the lower of carrying amount or fair value less costs to sell will be reported as an adjustment included within Loss on disposal group held for sale on our Condensed Consolidated Statements of Comprehensive Income. Unless otherwise specified, the amounts and information presented in the Notes to the Condensed Consolidated Financial Statements include assets and liabilities that have been reclassified as held for sale as of September 30, 2022.

On September 8, 2022, our Board of Directors authorized a stock repurchase program for up to $14.0 billion of our common stock through September 30, 2023 (the “2022 Stock Repurchase Program”). The cost of repurchased shares, including equity reacquisition costs, is included in Treasury stock on our Condensed Consolidated Balance Sheets. We accrue the cost of repurchased shares, and exclude such shares from the calculation of basic and diluted earnings per share, as of the trade date. We recognize a liability for share repurchases which have not settled and for which cash has not been paid in Other current liabilities on our Condensed Consolidated Balance Sheets. Cash payments to reacquire our shares, including equity reacquisition costs, are included in Repurchases of common stock on our Condensed Consolidated Statements of Cash Flows. See Note 9 - Repurchases of Common Stock for more information about our 2022 Stock Repurchase Program.

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

Index for Notes to the Condensed Consolidated Financial Statements

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 and nine months ended September 30, 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 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 will 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 comprised 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.

Index for Notes to the Condensed Consolidated Financial Statements

Our approach considers a number of factors, including our overall historical credit losses, net of recoveries, 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 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 6.9% and 5.6% as of September 30, 2022, and December 31, 2021, respectively.

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


(in millions)	September 30, 2022		December 31, 2021


EIP receivables, gross	$	8,311	$	8,207
Unamortized imputed discount	(416)		(378)

EIP receivables, net of unamortized imputed discount	7,895		7,829
Allowance for credit losses	(333)		(252)

EIP receivables, net of allowance for credit losses and imputed discount	$	7,562	$	7,577
Classified on our condensed consolidated balance sheets as:
Equipment installment plan receivables, net of allowance for credit losses and imputed discount	$	5,048	$	4,748
Equipment installment plan receivables due after one year, net of allowance for credit losses and imputed discount	2,514		2,829

EIP receivables, net of allowance for credit losses and imputed discount	$	7,562	$	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 September 30, 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	$	2,767	$	1,893	$	1,744	$	1,001	$	229	$	96	$	4,740	$	2,990	$	7,730
31 - 60 days past due	18		28		12		19		2		2		32		49		81
61 - 90 days past due	7		14		6		10		1		1		14		25		39
More than 90 days past due	7		14		6		13		2		3		15		30		45
EIP receivables, net of unamortized imputed discount	$	2,799	$	1,949	$	1,768	$	1,043	$	234	$	102	$	4,801	$	3,094	$	7,895

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.

Index for Notes to the Condensed Consolidated Financial Statements

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 nine months ended September 30, 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:


	September 30, 2022						September 30, 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	305		455		760		127		132		259
Write-offs, net of recoveries	(290)		(375)		(665)		(192)		(164)		(356)
Change in imputed discount on short-term and long-term EIP receivables	N/A		146		146		N/A		109		109
Impact on the imputed discount from sales of EIP receivables	N/A		(107)		(107)		N/A		(104)		(104)

Allowance for credit losses and imputed discount, end of period	$	161	$	749	$	910	$	129	$	578	$	707

Credit loss activity has increased during 2022, as activity normalizes relative to muted Pandemic levels and other macroeconomic trends contribute to adverse scenarios and present additional uncertainty due to, for example, the potential effects associated with higher inflation, rising interest rates and changes in the Federal Reserve’s monetary policy, as well as geopolitical risks, including the war in Ukraine.

Off-Balance-Sheet Credit Exposures

We do not have material, unmitigated off-balance-sheet credit exposures as of September 30, 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 September 30, 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, included on our Condensed Consolidated Balance Sheets with respect to the EIP BRE:


(in millions)	September 30, 2022		December 31, 2021
Other current assets	$	348	$	424
Other assets	118		125

Index for Notes to the Condensed Consolidated Financial Statements

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 September 30, 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)	September 30, 2022		December 31, 2021
Other current assets	$	217	$	231

Other current liabilities	392		348

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, 2022		December 31, 2021
Derecognized net service accounts receivable and EIP receivables	$	2,411	$	2,492
Other current assets	565		655
of which, deferred purchase price	563		654
Other long-term assets	118		125
of which, deferred purchase price	118		125

Other current liabilities	392		348

Net cash proceeds since inception	1,723		1,754
Of which:
Change in net cash proceeds during the year-to-date period	(31)		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 September 30, 2022, and December 31, 2021, our deferred purchase price related to the sales of service receivables and EIP receivables was $681 million and $779 million, respectively.

We recognized losses from sales of receivables, including changes in fair value of the deferred purchase price, of $60 million and $4 million for the three months ended September 30, 2022 and 2021, respectively, and a loss of $168 million and a gain of $26 million for the nine months ended September 30, 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 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.

Index for Notes to the Condensed Consolidated Financial Statements

Note 4 – Spectrum License Transactions

The following table summarizes our spectrum license activity for the nine months ended September 30, 2022:


(in millions)	2022
Spectrum licenses, beginning of year	$	92,606

Spectrum license acquisitions	3,148

Spectrum licenses transferred to held for sale	(16)
Costs to clear spectrum	29

Spectrum licenses, end of period	$	95,767

Spectrum Transactions

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. On May 4, 2022, the FCC issued us the licenses won in Auction 110. The licenses are included in Spectrum licenses on our Condensed Consolidated Balance Sheets as of September 30, 2022.

In September 2022, the FCC announced that we were the winning bidder of 7,156 licenses in Auction 108 (2.5 GHz) 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, 2022, 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.

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, 2022.

License Purchase Agreements

DISH Network Corporation

On July 1, 2020, we and DISH Network Corporation (“DISH”) entered into a license purchase agreement (the “License Purchase Agreement”) pursuant to which DISH has the option to purchase certain 800 MHz spectrum licenses for a total of approximately $3.6 billion in a transaction to be completed, subject to an application for FCC approval, by July 1, 2023, or within five days of FCC approval, whichever date is later.

In the event DISH breaches the License Purchase Agreement or fails to deliver the purchase price following the satisfaction or waiver of all closing conditions, DISH is liable to pay us a fee of $72 million. Additionally, if DISH does not exercise the option to purchase the 800 MHz spectrum licenses, we have an obligation to offer the licenses for sale through an auction. If the specified minimum price of $3.6 billion is not met in the auction, we would be relieved of the obligation to sell the licenses.

Channel 51 License Co LLC and LB License Co, LLC

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

The parties have agreed that closing will occur within 180 days after the receipt of required regulatory approvals, and payment of the $3.5 billion purchase price will occur no later than 40 days after the date of such closing. We anticipate the transactions will close in mid- to late-2023.

Index for Notes to the Condensed Consolidated Financial Statements

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. 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 (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 our Condensed Consolidated Statements of Cash Flows as the item being hedged. We did not have any significant derivative instruments outstanding as of September 30, 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 $1.3 billion and $1.5 billion are presented in Accumulated other comprehensive loss on our Condensed Consolidated Balance Sheets as of September 30, 2022, and December 31, 2021, respectively.

For the three months ended September 30, 2022 and 2021, $51 million and $47 million, respectively, and for the nine months ended September 30, 2022 and 2021, $151 million and $140 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 $215 million of the Accumulated other comprehensive loss associated with the derivatives into Interest expense, net, over the 12 months ending September 30, 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 $681 million and $779 million as of September 30, 2022, and December 31, 2021, respectively. Fair value was equal to the carrying amount at September 30, 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 September 30, 2022, and December 31, 2021. As such, our estimates are not necessarily indicative of the amount we could realize in a current market exchange.

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:


	Level within the Fair Value Hierarchy	September 30, 2022				December 31, 2021
(in millions)		Carrying Amount (1)		Fair Value (1)		Carrying Amount (1)		Fair Value (1)
Liabilities:
Senior Notes to third parties (2)	1	$	68,946	$	59,904	$	30,309	$	32,093
Senior Notes to affiliates	2	1,495		1,412		3,739		3,844
Senior Secured Notes to third parties (2)	1	3,255		3,095		40,098		42,393

(1) Excludes $31 million and $47 million as of September 30, 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.

(2) Following the achievement of an investment grade issuer rating from each of the three main credit rating agencies and entry into an amendment to our Credit Agreement, the Senior Secured Notes, other than our Spectrum-Backed Notes, are no longer secured by any of our present or future assets and have been reclassified to Senior Notes to third parties as of September 30, 2022, within the table above. See Note 6 – Debt for additional information.

Note 6 – Debt

The following table sets forth the debt balances and activity as of and for the nine months ended September 30, 2022:


(in millions)	December 31, 2021		Proceeds from Issuances and Borrowings (1)		Note Redemptions (1)		Repayments		Reclassifications (1)		Other (2)		September 30, 2022
Short-term debt	$	3,378	$	—	$	(500)	$	(395)	$	4,967	$	(52)	$	7,398
Long-term debt	67,076		2,969		—		—		(4,967)		(244)		64,834
Total debt to third parties	70,454		2,969		(500)		(395)		—		(296)		72,232
Short-term debt to affiliates	2,245		—		(2,250)		—		—		5		—
Long-term debt to affiliates	1,494		—		—		—		—		1		1,495
Total debt	$	74,193	$	2,969	$	(2,750)	$	(395)	$	—	$	(290)	$	73,727

(1)Issuances and borrowings, 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 3.8% and 4.0% for the three months ended September 30, 2022 and 2021, respectively, and 3.9% and 4.1% for the nine months ended September 30, 2022 and 2021, respectively, on weighted-average debt outstanding of $71.6 billion and $74.5 billion for the three months ended September 30, 2022 and 2021, respectively, and on weighted-average debt outstanding of $72.4 billion and $74.4 billion for the nine months ended September 30, 2022 and 2021, 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 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, 2022, we issued the following Senior Notes:


(in millions)	Principal Issuances		Premiums/Discounts and Issuance Costs		Net Proceeds from Issuance of Long-Term Debt		Issue Date









5.200% Senior Notes due 2033	$	1,250	$	(8)	$	1,242	September 15, 2022
5.650% Senior Notes due 2053	1,000		(11)		989		September 15, 2022
5.800% Senior Notes due 2062	750		(12)		738		September 15, 2022
Total of Senior Notes issued	$	3,000	$	(31)	$	2,969

Senior Secured Notes

Following the achievement of an investment grade issuer rating from each of the three main credit rating agencies, on August 22, 2022, we entered into an amendment (“Credit Agreement Amendment”) to our Credit Agreement, dated April 1, 2020. Upon effectiveness of the Credit Agreement Amendment, the liens securing the Senior Secured Notes were automatically released, and our obligations under the Senior Secured Notes (hereafter, “Senior Notes”), other than our Spectrum-Backed notes, are no longer secured by any of our present or future assets.

Index for Notes to the Condensed Consolidated Financial Statements

Note Redemptions and Repayments

During the nine months ended September 30, 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	%
5.375% Senior Notes to affiliates due 2022	1,250		April 15, 2022	N/A

Total Redemptions	$	2,750


4.738% Secured Series 2018-1 A-1 Notes due 2025	$	394	Various	N/A
Other debt	1		Various	N/A
Total Repayments	$	395

Asset-backed Notes

Subsequent to September 30, 2022, on October 12, 2022, we issued $750 million of 4.910% Class A senior asset-backed notes (“ABS Notes”) to third-party investors in a private placement transaction. Our ABS Notes are secured by $1.0 billion of gross EIP receivables and future collections on such receivables.

In connection with issuing the ABS Notes, 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. We will include the balances and results of operations of the ABS Entities in our consolidated financial statements. The ABS BRE’s residual interest in the ABS Trust represents the rights to all funds not needed to make required payments on the ABS Notes and other related payments and expenses.

Under the terms of the ABS Notes, our wholly owned subsidiary, T-Mobile Financial LLC (“FinCo”), and certain of our other wholly owned subsidiaries (collectively, the “Originators”) transfer EIP receivables to the ABS BRE, which in turn transfers such receivables to the ABS Trust, which issued the ABS Notes. The Class A senior ABS Notes have an expected weighted average life of approximately 2.5 years. Under the terms of the transaction, there is a two-year revolving period during which we may transfer additional receivables to the ABS Entities as collections on the receivables are received. The third-party investors in the Class A senior ABS Notes have legal recourse only to the assets of the ABS Issuer securing the ABS Notes and do not have any recourse to T-Mobile with respect to the payment of principal and interest. The receivables transferred to the ABS Issuer will only be available for payment of the ABS Notes and other obligations arising from the transaction and will not be available to pay any obligations or claims of T-Mobile’s creditors.

Under a parent support agreement, T-Mobile has agreed to guarantee the performance of the obligations of FinCo, which will continue to service the receivables, and the other T-Mobile entities participating in the transaction to the ABS Issuer. However, T-Mobile does not guarantee any principal or interest on the ABS Notes or any payments on the underlying EIP receivables.

Net proceeds of $748 million from our ABS Notes will be reflected in Proceeds from issuance of long-term debt in our Consolidated Statements of Cash Flows in the three months ending December 31, 2022. The ABS Notes issued and the assets securing this debt will be included on our Consolidated Balance Sheets.

The expected maturities of our ABS Notes are as follows:


		Expected Maturities
(in millions)	2024			2025
Class A Senior ABS Notes		$	198		$	552

Credit Facilities

Subsequent to September 30, 2022, on October 17, 2022, T-Mobile USA, Inc., our wholly owned subsidiary, and certain of its affiliates, as guarantors, entered into an Amended and Restated Credit Agreement (the “October 2022 Credit Agreement”) with certain financial institutions named therein. The October 2022 Credit Agreement amends and restates in its entirety the Credit Agreement originally dated April 1, 2020, and provides for a $7.5 billion revolving credit facility, including a letter of credit sub-facility of up to $1.5 billion, and a swingline loan sub-facility of up to $500 million. Commitments under the October 2022

Index for Notes to the Condensed Consolidated Financial Statements

Credit Agreement will mature on October 17, 2027, except as otherwise extended or replaced. Borrowings under the October 2022 Credit Agreement will bear interest based upon the applicable benchmark rate, depending on the type of loan and, in some cases, at our election, plus a margin. The October 2022 Credit Agreement contains customary representations, warranties and covenants, including a financial maintenance covenant of 4.5x with respect to T-Mobile USA, Inc.’s Leverage Ratio (as defined therein) commencing with the period ending December 31, 2022.

Note 7 – 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 operation of the tower sites.

Acquired CCI Tower Lease Arrangements

Prior to our merger (the “Merger”) with Sprint Corporation (“Sprint”) in April 2020, 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.

Index for Notes to the Condensed Consolidated Financial Statements

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

Leaseback Arrangement

On January 3, 2022, we entered into an agreement (the “Crown Agreement”) with CCI. The Crown Agreement extends the current term of the leasebacks by up to 12 years and modifies the leaseback payments for both the Existing CCI Tower Lease Arrangement and the Acquired CCI Tower Lease Arrangement. As a result of the Crown Agreement, there was an increase in our financing obligation as of the effective date of the 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, 2022		December 31, 2021
Property and equipment, net	$	2,421	$	2,548
Tower obligations	3,970		2,806
Other long-term liabilities	554		1,712

Future minimum payments related to the tower obligations are approximately $421 million for the 12-month period ending September 30, 2023, $826 million in total for both of the 12-month periods ending September 30, 2024 and 2025, $783 million in total for both of the 12-month periods ending September 30, 2026 and 2027, and $4.6 billion in total thereafter.

Note 8 – 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, wearables, DIGITS or other connected devices, which include tablets and SyncUP products;

•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)	2022		2021		2022		2021
Postpaid service revenues

Postpaid phone revenues	$	10,481	$	9,952	$	31,119	$	29,102
Postpaid other revenues	1,067		852		3,075		2,497

Total postpaid service revenues	$	11,548	$	10,804	$	34,194	$	31,599

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 and customer-based, third-party services. Revenue generated from the lease of mobile communication devices is included in Equipment revenues on our Condensed Consolidated Statements of Comprehensive Income.

Index for Notes to the Condensed Consolidated Financial Statements

Equipment revenues from the lease of mobile communication devices were as follows:


	Three Months Ended September 30,				Nine Months Ended September 30,
(in millions)	2022		2021		2022		2021
Equipment revenues from the lease of mobile communication devices	$	311	$	770	$	1,184	$	2,725

We provide wireline communication services to domestic and international customers. Wireline service revenues were $144 million and $179 million for the three months ended September 30, 2022 and 2021, respectively, and $433 million and $563 million for the nine months ended September 30, 2022 and 2021, respectively. Wireline service revenues are presented in Wholesale and other service revenues on our Condensed Consolidated Statements of Comprehensive Income. In September 2022, we entered into an agreement for the sale of the Wireline Business. See Note 10 – Wireline for additional information.

Contract Balances

The contract asset and contract liability balances from contracts with customers as of September 30, 2022, and December 31, 2021, were as follows:


(in millions)	Contract Assets		Contract Liabilities

Balance as of December 31, 2021	$	286	$	763
Balance as of September 30, 2022	286		739

Change	$	—	$	(24)

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 were impacted by customer activity related to new promotions, offset by billings on existing contracts and impairment, which is recognized as bad debt expense. The current portion of our contract assets of approximately $222 million and $219 million as of September 30, 2022, and December 31, 2021, 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, 2022 and 2021, include the following:


	Three Months Ended September 30,				Nine Months Ended September 30,
(in millions)	2022		2021		2022		2021
Amounts included in the beginning of year contract liability balance	$	17	$	29	$	702	$	753

Remaining Performance Obligations

As of September 30, 2022, 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 $602 million. 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, 2022, the aggregate amount of the contractual minimum consideration for wholesale, roaming and service contracts is $534 million, $2.3 billion and $5.1 billion for 2022, 2023, and 2024 and beyond, respectively. These contracts have a remaining duration ranging from less than one year to eight years.

Index for Notes to the Condensed Consolidated Financial Statements

Contract Costs

The balance of deferred incremental costs to obtain contracts with customers was $1.8 billion and $1.5 billion as of September 30, 2022, and December 31, 2021, 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 $375 million and $277 million for the three months ended September 30, 2022 and 2021, respectively, and $1.1 billion and $789 million for the nine months ended September 30, 2022 and 2021, 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, 2022 and 2021.

Note 9 – Repurchases of Common Stock

2022 Stock Repurchase Program

On September 8, 2022, our Board of Directors authorized our 2022 Stock Repurchase Program for up to $14.0 billion of our common stock through September 30, 2023. Under the 2022 Stock Repurchase Program, repurchases can be made from time to time using a variety of methods, which may include open market purchases, 10b5-1 plans, privately negotiated transactions or other methods, all in accordance with the rules of the Securities and Exchange Commission and other applicable legal requirements. The specific timing, price and size of repurchases will depend on prevailing stock prices, general economic and market conditions, and other considerations and may include up to $3.0 billion of our common stock in 2022. The 2022 Stock Repurchase Program does not obligate us to acquire any particular amount of common stock, and the 2022 Stock Repurchase Program may be suspended or discontinued at any time at our discretion. Repurchased shares will be held as Treasury stock on our Condensed Consolidated Balance Sheets.

During the three and nine months ended September 30, 2022, we repurchased 4,892,315 shares of our common stock at an average price per share of $136.65 for a total purchase price of $669 million, all of which were purchased under the 2022 Stock Repurchase program and occurred during the period from September 8, 2022, through September 30, 2022. As of September 30, 2022, we had up to approximately $13.3 billion remaining under the 2022 Stock Repurchase Program, of which up to approximately $2.3 billion was available for the remainder of 2022.

Subsequent to September 30, 2022, from October 1, 2022, through October 20, 2022, we repurchased 5,964,813 shares of our common stock at an average price per share of $136.57 for a total purchase price of $815 million. As of October 20, 2022, we had up to approximately $12.5 billion remaining under the 2022 Stock Repurchase Program, of which up to approximately $1.5 billion was available for the remainder of 2022.

Note 10 – 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 Purchase Agreement, pursuant to which the Buyer will acquire the Wireline Business. The Purchase Agreement provides that, upon the terms and conditions set forth therein, the Buyer will 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 (such transactions contemplated by the Purchase Agreement are collectively referred to as the “Wireline Transaction”).

The parties have agreed to a $1 purchase price in consideration for the Purchased Interests, subject to customary adjustments set forth in the Purchase Agreement. In addition, at the consummation of the Wireline Transaction (the “Closing”), a T-Mobile affiliate will enter into a commercial agreement for IP transit services, pursuant to which T-Mobile will pay to the Buyer an aggregate of $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 Closing is subject to customary closing conditions, including the receipt of certain required regulatory approvals and consents. Subject to the satisfaction or waiver of certain conditions and other terms and conditions of the Purchase Agreement, the Wireline Transaction is expected to close in the second half of 2023.

Index for Notes to the Condensed Consolidated Financial Statements

As a result of the Purchase Agreement and related anticipated Wireline Transaction, we concluded that the Wireline Business met the held for sale criteria upon entering into the Purchase Agreement. As such, the assets and liabilities of the Wireline Business disposal group are classified as held for sale and presented within Other current assets and Other current liabilities on our Condensed Consolidated Balance Sheets as of September 30, 2022.

The components of assets and liabilities held for sale presented within Other current assets and Other current liabilities, respectively, on our Condensed Consolidated Balance Sheets as of September 30, 2022, were as follows:


(in millions)	September 30, 2022
Assets

Cash and cash equivalents	$	28
Accounts receivable, net	38
Prepaid expenses	5
Other current assets	4

Property and equipment, net	503
Operating lease right-of-use assets	120
Other intangible assets, net	7
Other assets	7
Remeasurement of disposal group held for sale to fair value less costs to sell (1)	(371)
Assets held for sale	$	341
Liabilities

Accounts payable and accrued liabilities	$	63
Deferred revenue	4
Short-term operating lease liabilities	60



Operating lease liabilities	259
Other long-term liabilities	40
Liabilities held for sale	426
Liabilities held for sale, net	$	(85)

(1) Excludes amounts related to the establishment of liabilities for contractual and other payments associated with the Wireline Transaction, including the $700 million of fees payable for IP transit services discounted to present value and other payments to the Buyer anticipated in connection with the Wireline Transaction.

In connection with the expected sale of the Wireline Business and classification of related assets and liabilities as held for sale, we recognized a pre-tax loss of $1.1 billion during the three months ended September 30, 2022, which is included within Loss on disposal group held for sale on our Condensed Consolidated Statements of Comprehensive Income.

The components of the Loss on disposal group held for sale on our Condensed Consolidated Statements of Comprehensive Income for the three and nine months ended September 30, 2022, were as follows:


in millions	Three and Nine Months Ended September 30, 2022
Write-down of Wireline Business net assets	$	295

Accrual of estimated costs to sell	76
Recognition of liability for IP transit services agreement (1)	641
Recognition of other obligations to Buyer to be paid at or after Closing	59
Loss on disposal group held for sale	$	1,071

(1) We will continue to recognize accretion expense through the expiration of the agreement which will be included in Interest expense, net separate from the Loss on disposal group held for sale on our Condensed Consolidated Statements of Comprehensive Income.

The present value of the liability for fees payable for IP transit services has been recognized as a component of Loss on disposal group held for sale as we have not currently identified any path to utilize such services in our continuing operations and have committed to execute the agreement as a closing condition for the Wireline Transaction. We will continue to evaluate potential uses on an ongoing basis over the life of the agreement. Approximately $29 million and $613 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 as of September 30, 2022, in accordance with the expected timing of the related payments. Approximately $24 million and $35 million for contractual and other payments associated with the Transaction are presented

Index for Notes to the Condensed Consolidated Financial Statements

within Other current liabilities and Other long-term liabilities, respectively, on our Condensed Consolidated Balance Sheets as of September 30, 2022, in accordance with the expected timing of the related payments.

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 it does not qualify for reporting as a discontinued operation.

Other Wireline Asset Sales

Separate from the Wireline Transaction, we sold certain IP addresses held by the Wireline Business to other third parties during the three months ended September 30, 2022, for which we recognized a gain on disposal of $121 million, which is included as a reduction to Selling, general and administrative expenses on our Condensed Consolidated Statements of Comprehensive Income.

Wireline Impairment

We provide wireline communication services to domestic and international customers via the legacy Sprint Wireline U.S. long-haul fiber network (including non-U.S. extensions thereof) acquired through the Merger. The legacy Sprint Wireline network is primarily comprised of owned property and equipment, including land, buildings, communication systems and data processing equipment, fiber optic cable and operating lease right-of-use assets. Previously, the operation of the legacy Sprint CDMA and LTE wireless networks was supported by the legacy Sprint Wireline network. During the second quarter of 2022, we retired the legacy Sprint CDMA network and began the orderly shut-down of the LTE network.

We assess long-lived assets for impairment when events or circumstances indicate that they might be impaired. 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. In evaluating whether the Wireline long-lived assets were impaired, we estimated the fair value of these assets using a combination of the cost, income and market approaches, including market participant assumptions. The fair value measurement of the Wireline assets was estimated using significant inputs not observable in the market (Level 3).

The results of this assessment indicated that certain Wireline long-lived assets were impaired, and as a result, we recorded non-cash 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 is related to Wireline Property and equipment, $212 million is related to Operating lease right-of-use assets and $7 million is related to Other intangible assets. In measuring and allocating the impairment expense to individual Wireline long-lived assets, we did not impair the long-lived assets below their individual fair values. The expense is included within Impairment expense in our Condensed Consolidated Statements of Comprehensive Income. There was no impairment expense recognized for the three and nine months ended September 30, 2021.

Note 11 – Income Taxes

Within our Condensed Consolidated Statements of Comprehensive Income, we recorded an Income tax benefit of $57 million and $3 million for the three months ended September 30, 2022 and 2021, respectively, and Income tax expense of $106 million and $520 million for the nine months ended September 30, 2022 and 2021, respectively.

The increase in Income tax benefit for the three months ended September 30, 2022, was primarily from tax benefits associated with internal restructuring and lower income before income taxes, partially offset by tax benefits recognized in the three months ended September 30, 2021, associated with legal entity reorganization related to historical Sprint entities, including a reduction in the valuation allowance against deferred tax assets in certain state jurisdictions that did not impact the three months ended September 30, 2022.

The decrease in Income tax expense for the nine months ended September 30, 2022, was primarily from lower income before income taxes and tax benefits associated with internal restructuring, partially offset by tax benefits recognized in the nine months ended September 30, 2021, associated with legal entity reorganization related to historical Sprint entities, including a reduction in the valuation allowance against deferred tax assets in certain state jurisdictions, that did not impact the nine months ended September 30, 2022, and a decrease in excess tax benefits related to the vesting of restricted stock awards.

The effective tax rate was (12.4)% and (0.3)% for the three months ended September 30, 2022 and 2021, respectively, and 8.7% and 16.7% for the nine months ended September 30, 2022 and 2021, respectively.

Index for Notes to the Condensed Consolidated Financial Statements

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)	2022		2021		2022		2021



Net income	$	508	$	691	$	1,113	$	2,602








Weighted-average shares outstanding – basic	1,253,873,429		1,248,189,719		1,252,783,140		1,246,441,464
Effect of dilutive securities:
Outstanding stock options and unvested stock awards	5,336,842		5,471,526		5,278,338		7,950,323


Weighted-average shares outstanding – diluted	1,259,210,271		1,253,661,245		1,258,061,478		1,254,391,787




Earnings per share – basic	$	0.40	$	0.55	$	0.89	$	2.09




Earnings per share – diluted	0.40		0.55		0.88		2.07

Potentially dilutive securities:
Outstanding stock options and unvested stock awards	50,004		127,732		79,122		87,968
SoftBank contingent consideration (1)	48,751,557		48,751,557		48,751,557		48,751,557

(1) Represents the weighted-average SoftBank Specified Shares that are contingently issuable from the acquisition date of April 1, 2020, pursuant to a letter agreement dated February 20, 2020, between T-Mobile, SoftBank and Deutsche Telekom AG (“DT”).

As of September 30, 2022, 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, 2022 and 2021. 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.

Note 13 – Leases

Lessee

We are a lessee for non-cancelable operating and financing leases for cell sites, switch sites, retail stores, network equipment and office facilities with contractual terms that generally extend through 2035. Additionally, we lease dark fiber through non-cancelable operating leases with contractual terms that generally extend through 2040. The majority of cell site leases have a non-cancelable term of five to 15 years with several renewal options that can extend the lease term for five to 50 years. In addition, we have financing leases for network equipment that generally have a non-cancelable lease term of three to five years. The financing leases do not have renewal options and contain a bargain purchase option at the end of the lease.

On January 3, 2022, we entered into the Crown Agreement with CCI that modified the terms of our leased towers from CCI. The Crown Agreement modifies the monthly rental payments we will pay for sites currently leased by us, extends the non-cancellable lease term for the majority of our sites through December 2033 and will allow us the flexibility to facilitate our network integration and decommissioning activities through new site builds and termination of duplicate tower locations. The initial non-cancellable term is through December 31, 2033, followed by three optional five-year renewals. As a result of this modification, we remeasured the associated right-of use assets and lease liabilities resulting in an increase of $5.3 billion to each on the effective date of the modification, with a corresponding gross increase to both deferred tax liabilities and assets of $1.3 billion.

Index for Notes to the Condensed Consolidated Financial Statements

The components of lease expense were as follows:


	Three Months Ended September 30,				Nine Months Ended September 30,
(in millions)	2022		2021		2022		2021
Operating lease expense	$	1,498	$	1,546	$	5,231	$	4,470
Financing lease expense:
Amortization of right-of-use assets	188		205		567		553
Interest on lease liabilities	18		15		49		51
Total financing lease expense	206		220		616		604
Variable lease expense	114		113		363		298
Total lease expense	$	1,818	$	1,879	$	6,210	$	5,372

As of September 30, 2022, the weighted-average remaining lease term and discount rate for operating leases were 10 years and 4.0%, respectively.

Maturities of lease liabilities as of September 30, 2022, were as follows:


(in millions)	Operating Leases		Finance Leases
Twelve Months Ending September 30,
2023	$	4,679	$	1,286
2024	4,472		999
2025	4,000		544
2026	3,652		54
2027	3,349		23
Thereafter	22,091		14
Total lease payments	42,243		2,920
Less: imputed interest	8,286		91
Total	$	33,957	$	2,829

Interest payments for financing leases were $18 million and $15 million for the three months ended September 30, 2022 and 2021, respectively, and $49 million and $51 million for the nine months ended September 30, 2022 and 2021, respectively.

As of September 30, 2022, we have additional operating leases for commercial properties that have not yet commenced with future lease payments of approximately $253 million.

Note 14 – 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 $4.8 billion for the 12-month period ending September 30, 2023, $5.0 billion in total for both of the 12-month periods ending September 30, 2024 and 2025, $2.7 billion in total for both of the 12-month periods ending September 30, 2026 and 2027, and $2.9 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.

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.

Index for Notes to the Condensed Consolidated Financial Statements

Our spectrum lease and service credit commitments, including renewal periods, are approximately $312 million for the 12-month period ending September 30, 2023, $585 million in total for both of the 12-month periods ending September 30, 2024 and 2025, $616 million in total for both of the 12-month periods ending September 30, 2026 and 2027, and $4.6 billion in total thereafter.

In August 2022, we entered into an agreement for the purchase of certain spectrum licenses currently subject to lease agreements. The agreement remains subject to regulatory approval and the purchase price of $3.5 billion is excluded from our reported purchase commitments above. See Note 4 – Spectrum License Transactions for additional details.

Contingencies and Litigation

Litigation and Regulatory Matters

We are involved in various lawsuits and disputes, claims, government agency investigations and enforcement actions, and other proceedings (“Litigation and Regulatory Matters”) that arise in the ordinary course of business, which include claims of patent infringement (most of which are asserted by non-practicing entities primarily seeking monetary damages), class actions, and proceedings to enforce FCC or other government agency rules and regulations. Those Litigation and Regulatory Matters are at various stages, and some of them may proceed to trial, arbitration, hearing, or other adjudication that could result in fines, penalties, or awards of monetary or injunctive relief in the coming 12 months if they are not otherwise resolved. We have established an accrual with respect to certain of these matters, where appropriate. The accruals are reflected on our condensed consolidated financial statements, but they are not considered to be, individually or in the aggregate, material. An accrual is established when we believe it is both probable that a loss has been incurred and an amount can be reasonably estimated. For other matters, where we have not determined that a loss is probable or because the amount of loss cannot be reasonably estimated, we have not recorded an accrual due to various factors typical in contested proceedings, including, but not limited to, uncertainty concerning legal theories and their resolution by courts or regulators, uncertain damage theories and demands, and a less than fully developed factual record. For Litigation and Regulatory Matters that may result in a contingent gain, we recognize such gains on our condensed consolidated financial statements when the gain is realized or realizable. We recognize legal costs expected to be incurred in connection with Litigation and Regulatory Matters as they are incurred. Except as otherwise specified below, we do not expect that the ultimate resolution of these Litigation and Regulatory Matters, individually or in the aggregate, will have a material adverse effect on our financial position, but we note that an unfavorable outcome of some or all of the specific matters identified below 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, 2022, and that accrual was included in Accounts payable and accrued liabilities on our Condensed Consolidated Balance Sheets.

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

We note that pursuant to Amendment No. 2, dated as of February 20, 2020, to the Business Combination Agreement, dated as of April 29, 2018, by and among the Company, Sprint and the other parties named therein (as amended, the “Business Combination Agreement”), SoftBank agreed to indemnify us against certain specified matters and losses, including those relating to the Lifeline matters described above. Resolution of these matters could require making additional reimbursements and paying 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

Index for Notes to the Condensed Consolidated Financial Statements

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. We intend to vigorously defend this lawsuit.

In October 2020, we notified Mobile Virtual Network Operators (“MVNOs”) using the legacy Sprint CDMA network that we planned to retire that network on December 31, 2021. In response to that notice, DISH, which had Boost Mobile customers who used the legacy Sprint CDMA network, made several efforts to prevent us from retiring the CDMA network until mid-2023, including pursuing a Petition for Modification and related proceedings pursuant to the California Public Utilities Commission’s (the “CPUC”) April 2020 decision concerning the Merger. As of June 30, 2022, the orderly decommissioning of the legacy Sprint CDMA network had been completed, although certain of the CPUC proceedings remain in process.

On August 12, 2021, we became aware of a potential 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 July 26, 2022, we received preliminary approval of the proposed settlement, which remains subject to final court approval. Final court approval of the terms of the settlement is expected as early as January 2023 but could be delayed by appeals or other proceedings. If approved by the court, under the terms of the proposed 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 anticipate that, upon court approval, 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.

If approved by the court, 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 during the three months ended June 30, 2022. The expense is included within Selling, general and administrative expenses on our Condensed Consolidated Statements of Comprehensive Income. During the three and nine months ended September 30, 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 whether we will be able to obtain court approval of the proposed settlement, the number of plaintiffs who opt-out of the proposed settlement and whether the proposed settlement will be appealed.

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

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 responding to these inquiries and cooperating fully with these agencies and regulators. However, 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.

Index for Notes to the Condensed Consolidated Financial Statements

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. 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.

In March 2022, we received $220 million in settlement of certain patent litigation. We recognized the settlement, net of legal fees, as a reduction to Selling, general and administrative expenses on our Condensed Consolidated Statements of Comprehensive Income during the nine months ended September 30, 2022.

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 T-Mobile and Sprint 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.

Note 15 – Restructuring Costs

Upon close of the Merger, 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.

The following table summarizes the expenses incurred in connection with our Merger restructuring initiatives:



(in millions)	Three Months Ended September 30, 2022		Nine Months Ended September 30, 2022		Incurred to Date
Contract termination costs	$	—	$	56	$	248
Severance costs	131		164		566
Network decommissioning	318		642		1,323
Total restructuring plan expenses	$	449	$	862	$	2,137

The expenses associated with our Merger restructuring initiatives are included in Costs of services and Selling, general and administrative 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 $384 million and $265 million for the three months ended September 30, 2022 and 2021, respectively, and $1.6 billion and $649 million for the nine months ended September 30, 2022 and 2021, respectively, and are included in Costs of services and Selling, general and administrative on our Condensed Consolidated Statements of Comprehensive Income.

Index for Notes to the Condensed Consolidated Financial Statements

The changes in the liabilities associated with our Merger restructuring initiatives, including expenses incurred and cash payments, are as follows:


(in millions)	December 31, 2021		Expenses Incurred		Cash Payments		Adjustments for Non-Cash Items (1)		September 30, 2022
Contract termination costs	$	14	$	56	$	(14)	$	—	$	56
Severance costs	1		164		(46)		—		119
Network decommissioning	71		642		(221)		(231)		261
Total	$	86	$	862	$	(281)	$	(231)	$	436

(1) Non-cash items 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.

Our Merger restructuring activities are expected to occur over the next year with substantially all costs incurred by the end of fiscal year 2023. We are evaluating additional restructuring initiatives, which are dependent on consultations and negotiation with certain counterparties and the expected impact on our business operations, which could affect the amount or timing of the restructuring costs and related payments.

Note 16 – 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, 2022		December 31, 2021
Accounts payable	$	6,822	$	6,499
Payroll and related benefits	1,282		1,343
Property and other taxes, including payroll	1,756		1,830
Accrued interest	805		710
Commissions	340		348

Toll and interconnect	216		248

Other	750		427
Accounts payable and accrued liabilities	$	11,971	$	11,405

Book overdrafts included in accounts payable were $453 million and $378 million as of September 30, 2022, and December 31, 2021, respectively.

Index for Notes to the Condensed Consolidated Financial Statements

Supplemental Condensed Consolidated Statements of Cash Flows Information

The following table summarizes T-Mobile’s supplemental cash flow information:


	Three Months Ended September 30,				Nine Months Ended September 30,
(in millions)	2022		2021		2022		2021
Interest payments, net of amounts capitalized	$	781	$	884	$	2,548	$	2,742
Operating lease payments	1,073		2,251		3,163		5,165
Income tax payments	12		38		75		123
Non-cash investing and financing activities

Non-cash beneficial interest obtained in exchange for securitized receivables	1,181		891		3,189		3,361

Change in accounts payable and accrued liabilities for purchases of property and equipment	390		113		139		(427)
Leased devices transferred from inventory to property and equipment	67		214		279		1,032
Returned leased devices transferred from property and equipment to inventory	(65)		(309)		(343)		(1,170)

Increase in Tower obligations from contract modification	—		—		1,158		—
Operating lease right-of-use assets obtained in exchange for lease obligations	479		985		7,045		2,939
Financing lease right-of-use assets obtained in exchange for lease obligations	348		623		1,197		1,109

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, 2022		December 31, 2021
Cash and cash equivalents	$	6,888	$	6,631
Cash and cash equivalents held for sale (included in Other current Assets)	28		—
Restricted cash (included in Other assets)	73		72
Cash and cash equivalents, including restricted cash and cash held for sale	$	6,989	$	6,703

Note 17 – Subsequent Events

Subsequent to September 30, 2022, on October 12, 2022, we issued $750 million of 4.910% Class A senior ABS Notes to third-party investors in a private placement transaction. Our ABS Notes are secured by $1.0 billion of gross EIP receivables and future collections on such receivables. See Note 6 – Debt for additional information.

Subsequent to September 30, 2022, on October 17, 2022, we entered into an Amended and Restated Credit Agreement. See Note 6 – Debt for additional information.

Subsequent to September 30, 2022, from October 1, 2022, through October 20, 2022, we repurchased 5,964,813 shares of our common stock at an average price per share of $136.57 for a total purchase price of $815 million. See Note 9 – Repurchases of Common Stock for additional information regarding the 2022 Stock Repurchase 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, 2021, 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:

•adverse impact caused by the COVID-19 pandemic (the “Pandemic”), including supply chain shortages;

•competition, industry consolidation and changes in the market for wireless services;

•disruption, data loss or other security breaches, such as the criminal cyberattack we became aware of in August 2021;

•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 impacts of the actions we have taken and conditions we have agreed to in connection with the regulatory proceedings and approvals of the Transactions (as defined below), 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 and Swiftel Communications, Inc.), including customer accounts, inventory, contracts, intellectual property and certain other specified assets, and the assumption of certain related liabilities (collectively, the “Prepaid Transaction”), the complaint and proposed final judgment agreed to by us, Deutsche Telekom AG (“DT”), Sprint 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, 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;

•adverse economic, political or market conditions in the U.S. and international markets, including changes resulting from increases in inflation, impacts of current geopolitical instability caused by the war in Ukraine, and those caused by the Pandemic;

•our inability to manage the ongoing commercial and transition services arrangements entered into in connection with the Prepaid Transaction, and known or unknown liabilities arising in connection therewith;

•the timing and effects of any future acquisition, disposition, 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 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;

•the risk of future material weaknesses we may identify while we continue to work to integrate following the Merger (as defined below), 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 legal proceedings, including these proceedings and inquiries relating to the criminal cyberattack we became aware of in August 2021;

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•the possibility that we may be unable to adequately protect our intellectual property rights or be accused of infringing the intellectual property rights of others;

•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 exclusive forum provision as provided in our Certificate of Incorporation;

•interests of our significant stockholders that 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;

•our 2022 Stock Repurchase Program (as defined in Note 9 – Repurchases of Common Stock of the Notes to the Condensed Consolidated Financial Statements) may not be fully consummated, and our share repurchase program may not enhance long-term stockholder value;

•failure to realize the expected benefits and synergies of the merger (the “Merger”) with Sprint, pursuant to the 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”) in the expected time frames or in the amounts anticipated;

•any delay and costs of, or difficulties in, integrating our business and Sprint’s business and operations, and unexpected additional operating costs, customer loss and business disruptions, including challenges in maintaining relationships with employees, customers, suppliers or vendors; and

•unanticipated difficulties, disruption, or significant delays in our long-term strategy to migrate Sprint’s legacy customers onto T-Mobile’s existing billing platforms.

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, 2022, 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, 2021. 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 15 – 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
	2022		2021		$		%		2022		2021			$		%
Merger-related costs
Cost of services, exclusive of depreciation and amortization	$	812	$	279	$	533	191	%	$	2,380	$	688		$	1,692	246	%
Cost of equipment sales, exclusive of depreciation and amortization	258		236		22		9	%	1,468		340			1,128		332	%
Selling, general and administrative	226		440		(214)		(49)	%	529		836			(307)		(37)	%
Total Merger-related costs	$	1,296	$	955	$	341	36	%	$	4,377	$	1,864		$	2,513	135	%

Net cash payments for Merger-related costs	$	942	$	617	$	325	53	%	$	2,742	$	1,084		$	1,658	153	%

We expect to incur a total of $12.0 billion of Merger-related costs, excluding capital expenditures, of which $10.9 billion has been incurred since the beginning of 2018, including $700 million of costs incurred by Sprint prior to the Merger. We expect to incur the remaining $1.1 billion to complete our integration and restructuring activities over the next year with substantially all costs incurred by the end of 2023.

Total Merger-related costs for the year ending December 31, 2022, are expected to be between $4.8 billion to $5.0 billion, including $1.3 billion and $4.4 billion incurred during the three and nine months ended September 30, 2022, respectively. We are evaluating additional restructuring initiatives which are dependent on consultations and negotiation with certain counterparties and the expected impact on our business operations, which could affect the amount or timing of the restructuring costs and related payments. We expect our principal sources of funding to be sufficient to meet our liquidity requirements and anticipated payments associated with the restructuring initiatives.

Network Integration

To achieve Merger synergies in network costs, we are performing rationalization activities to identify duplicative networks, backhaul services and other agreements in addition to decommissioning certain small cell sites and distributed antenna systems. These initiatives also include the acceleration or termination of certain of our operating and financing leases for cell sites, switch sites and network equipment. As of September 30, 2022, we have decommissioned substantially all targeted Sprint macro sites.

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To allow for the realization of these synergies associated with network integration, we retired certain legacy networks, including the legacy Sprint CDMA network in the second quarter and the LTE network in the third quarter of 2022. Customers impacted by the decommissioning of these networks have been excluded from our customer base and postpaid account base. See the “Performance Measures” section of this MD&A for more details.

Restructuring

Upon the close of the Merger, we began implementing restructuring initiatives to realize cost efficiencies from the Merger. The major activities associated with the restructuring initiatives to date include:

•Contract termination costs associated with rationalization of retail stores, distribution channels, duplicative network and backhaul services and other agreements;

•Severance costs associated with the reduction of redundant processes and functions; and

•The decommissioning of certain small cell sites and distributed antenna systems to achieve Merger synergies in network costs.

For more information regarding our restructuring activities, see Note 15 – Restructuring Costs of the Notes to the Condensed Consolidated Financial Statements.

Other Impacts

Anticipated Merger Synergies

As a result of our ongoing restructuring and integration activities, we expect to realize Merger synergies by eliminating redundancies within our combined network as well as other business processes and operations. For full-year 2022, we expect Merger synergies from Selling, general and administrative expense reductions of $2.4 billion, Cost of service expense reductions of $2.0 billion to $2.1 billion and avoided network expenses of $1.3 billion.

Wireline Impacts

Previously, the operation of the legacy Sprint CDMA and LTE wireless networks was supported by the legacy Sprint Wireline network. During the second quarter of 2022, we retired the legacy Sprint CDMA network and began the orderly shut-down of the LTE network. 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 non-cash impairment expense of $477 million related to Wireline Property and equipment, Operating lease right-of-use assets and Other intangible assets for the nine months ended September 30, 2022, all of which relates to the impairment recognized during the three months ended June 30, 2022. We continue to provide Wireline services to existing Wireline customers.

For more information regarding this non-cash impairment, see Note 10 – Wireline of the Notes to the Condensed Consolidated Financial Statements.

On September 6, 2022, we entered into a Purchase Agreement to sell the Wireline Business for a total purchase price of $1. In addition, at the consummation of the Wireline Transaction, we will enter into an agreement for IP transit services for $700 million. Subject to the satisfaction or waiver of certain conditions and the other terms and conditions of the Purchase Agreement, the Wireline Transaction is expected to close in the second half of 2023. As a result of the Purchase Agreement and related anticipated Wireline Transaction, we concluded that the Wireline Business met the held for sale criteria upon entering into the Purchase Agreement. As such, the assets and liabilities of the Wireline Business disposal group are classified as held for sale and presented within Other current assets and Other current liabilities on our Condensed Consolidated Balance Sheets as of September 30, 2022. In connection with the expected sale of the Wireline Business and classification of related assets and liabilities as held for sale, we recognized a pre-tax loss of $1.1 billion during the three and nine months ended September 30, 2022, which is included within Loss on disposal group held for sale on our Condensed Consolidated Statements of Comprehensive Income. The fair value of the Wireline Business disposal group, less costs to sell, will be reassessed during each reporting period it remains classified as held for sale, and any remeasurement to the lower of carrying amount or fair value less costs to sell will be reported as an adjustment to the Loss on disposal group held for sale.

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For more information regarding the Purchase Agreement to sell the Wireline Business, see Note 10 – Wireline of the Notes to the Condensed Consolidated Financial Statements.

Cyberattack

As we previously reported, we were subject to a criminal cyberattack involving unauthorized access to T-Mobile’s systems. We promptly located and closed the unauthorized access to our systems. Our forensic investigation was completed in October 2021. There are no material updates with respect to the August 2021 cyberattack and subsequent inquiries, investigations, litigations and remedial measures from our Annual Report on Form 10-K for the year ended December 31, 2021, except as disclosed in Note 14 – Commitments and Contingencies of the Notes to the Condensed Consolidated Financial Statements.

In connection with the proposed class action settlement and the separate settlements reached with a number of consumers, we recorded a total pre-tax charge of approximately $400 million in the second quarter of 2022. We expect to continue to incur additional expenses in future periods, including costs to remediate the attack, resolve inquiries by various government authorities, provide additional customer support and enhance customer protection, only some of which may be covered and reimbursable by insurance. In addition to the committed aggregate incremental spend of $150 million for data security and related technology in 2022 and 2023 under the proposed settlement agreement, we intend to commit substantial additional resources towards cybersecurity initiatives over the next several years.

During the three and nine months ended September 30, 2022, 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.

COVID-19 Pandemic and Other Macroeconomic Trends

The Pandemic has resulted in a widespread health crisis that has adversely affected businesses, economies and financial markets worldwide, and has caused significant volatility in the U.S. and international debt and equity markets. In addition, the Pandemic has resulted in economic uncertainty, which could affect our customers’ purchasing decisions and ability to make timely payments. Current and future Pandemic-related restrictions on, or disruptions of, transportation networks and supply chain shortages could impact our ability to acquire handsets or other end user devices in amounts sufficient to meet customer demand and to obtain the equipment required to meet our current and future network build-out plans. We will continue to monitor the Pandemic and its impacts and may adjust our actions as needed to continue to provide our products and services to our communities and employees.

As a critical communications infrastructure provider as designated by the government, our focus has been on providing crucial connectivity to our customers and impacted communities while ensuring the safety and well-being of our employees.

Other macroeconomic trends may result in adverse impacts on our business, and we continue to monitor these potential impacts, including higher inflation, rising interest rates, potential economic recession and changes in the Federal Reserve’s monetary policy and geopolitical risks, including the war in Ukraine. Such scenarios and uncertainties may affect, among others, expected credit loss activity as well as certain fair value estimates.

Inflation Reduction Act

On August 16, 2022, President Biden signed the Inflation Reduction Act of 2022 (“IRA”) into law. The IRA includes several changes to existing tax law, including a minimum tax on adjusted financial statement income of applicable corporations and an excise tax on certain corporate stock buybacks. The tax provisions included in the IRA are generally effective beginning January 1, 2023, and no significant impact to the 2022 consolidated financial statements is anticipated. Management continues to review the IRA tax provisions to assess impacts to our future consolidated financial statements.

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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)	2022		2021		$		%		2022		2021		$		%
Revenues

Postpaid revenues	$	11,548	$	10,804	$	744	7	%	$	34,194	$	31,599	$	2,595	8	%
Prepaid revenues	2,484		2,481		3		—	%	7,408		7,259		149		2	%
Wholesale and other service revenues	1,329		1,437		(108)		(8)	%	4,203		4,548		(345)		(8)	%





Total service revenues	15,361		14,722		639		4	%	45,805		43,406		2,399		6	%





Equipment revenues	3,855		4,660		(805)		(17)	%	12,679		15,221		(2,542)		(17)	%
Other revenues	261		242		19		8	%	814		706		108		15	%

Total revenues	19,477		19,624		(147)		(1)	%	59,298		59,333		(35)		—	%
Operating expenses

Cost of services, exclusive of depreciation and amortization shown separately below	3,712		3,538		174		5	%	11,499		10,413		1,086		10	%
Cost of equipment sales, exclusive of depreciation and amortization shown separately below	4,982		5,145		(163)		(3)	%	16,036		15,740		296		2	%
Selling, general and administrative	5,118		5,212		(94)		(2)	%	16,030		14,840		1,190		8	%
Impairment expense	—		—		—		NM		477		—		477		NM
Loss on disposal group held for sale	1,071		—		1,071		NM		1,071		—		1,071		NM
Depreciation and amortization	3,313		4,145		(832)		(20)	%	10,389		12,511		(2,122)		(17)	%



Total operating expenses	18,196		18,040		156		1	%	55,502		53,504		1,998		4	%
Operating income	1,281		1,584		(303)		(19)	%	3,796		5,829		(2,033)		(35)	%
Other expense, net

Interest expense, net	(827)		(836)		9		(1)	%	(2,542)		(2,521)		(21)		1	%


Other expense, net	(3)		(60)		57		(95)	%	(35)		(186)		151		(81)	%

Total other expense, net	(830)		(896)		66		(7)	%	(2,577)		(2,707)		130		(5)	%

Income before income taxes	451		688		(237)		(34)	%	1,219		3,122		(1,903)		(61)	%
Income tax benefit (expense)	57		3		54		NM		(106)		(520)		414		(80)	%



Net income	$	508	$	691	$	(183)	(26)	%	$	1,113	$	2,602	$	(1,489)	(57)	%






Statement of Cash Flows Data
Net cash provided by operating activities	$	4,391	$	3,477	$	914	26	%	$	12,445	$	10,917	$	1,528	14	%
Net cash used in investing activities	(2,555)		(4,152)		1,597		(38)	%	(10,206)		(17,474)		7,268		(42)	%
Net cash provided by (used in) financing activities	1,927		(3,060)		4,987		(163)	%	(1,953)		237		(2,190)		NM
Non-GAAP Financial Measures
Adjusted EBITDA	7,039		6,811		228		3	%	20,993		20,622		371		2	%
Core Adjusted EBITDA	6,728		6,041		687		11	%	19,809		17,897		1,912		11	%
Free Cash Flow	2,065		1,559		506		32	%	5,472		4,534		938		21	%

NM - Not Meaningful

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The following discussion and analysis is for the three and nine months ended September 30, 2022, compared to the same period in 2021 unless otherwise stated.

Total revenues decreased slightly for the three months ended and were relatively flat for the nine months ended September 30, 2022. The components of these changes are discussed below.

Postpaid revenues increased $744 million, or 7%, for the three months ended and increased $2.6 billion, or 8%, for the nine months ended September 30, 2022, 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 flat for the three months ended and increased $149 million, or 2%, for the nine months ended September 30, 2022.

The increase for the nine months ended September 30, 2022, was primarily from:

•Higher average prepaid customers; and

•Higher prepaid ARPU. See “Prepaid ARPU” in the “Performance Measures” section of this MD&A.

Wholesale and other service revenues decreased $108 million, or 8%, for the three months ended and decreased $345 million, or 8%, for the nine months ended September 30, 2022.

The decrease for the three months ended September 30, 2022, was primarily from:

•Lower MVNO and Wireline revenues.

The decrease for the nine months ended September 30, 2022, was primarily from:

•Lower advertising, Wireline and MVNO revenues; partially offset by

•Higher Lifeline revenues.

Equipment revenues decreased $805 million, or 17%, for the three months ended and decreased $2.5 billion, or 17%, for the nine months ended September 30, 2022.

The decrease for the three months ended September 30, 2022, was primarily from:

•A decrease of $458 million in lease revenues and a decrease of $158 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 $102 million in device sales revenue, excluding purchased leased devices, primarily from:

•A decrease in the number of devices sold due to fewer prepaid and postpaid upgrades; and

•An increase in contra-revenue primarily driven by higher imputed interest rates on equipment installment plans, which is recognized in Other revenues over the device financing term; partially offset by

•Higher average revenue per device sold primarily due to an increase in the high-end phone mix.

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The decrease for the nine months ended September 30, 2022, was primarily from:

•A decrease of $1.5 billion in lease revenues and a decrease of $493 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 $310 million in device sales revenue, excluding purchased leased devices, primarily from:

•Lower average revenue per device sold, primarily driven by higher promotions, which included promotions for Sprint customers to facilitate their migration to the T-Mobile network; and

•An increase in the number of devices sold, including higher upgrade volume for Sprint customers to facilitate their migration to the T-Mobile network, partially offset by lower prepaid upgrades.

Other revenues increased slightly for the three months ended and increased $108 million, or 15%, for the nine months ended September 30, 2022.

The increase for the nine months ended September 30, 2022, was primarily from:

•Higher interest income driven by higher imputed interest rates on equipment installment plans which is recognized over the device financing term.

Total operating expenses increased slightly for the three months ended and increased $2.0 billion, or 4%, for the nine months ended September 30, 2022. The components of this change are discussed below.

Cost of services, exclusive of depreciation and amortization, increased $174 million, or 5%, for the three months ended and increased $1.1 billion, or 10%, for the nine months ended September 30, 2022.

The increase for the three months ended September 30, 2022, was primarily from:

•An increase of $533 million in Merger-related costs related to network decommissioning and integration costs; and

•Higher site costs related to the continued build-out of our nationwide 5G network; partially offset by

•Higher realized Merger synergies.

The increase for the nine months ended September 30, 2022, was primarily from:

•An increase of $1.7 billion in Merger-related costs related to network decommissioning and integration costs; and

•Higher site costs related to the continued build-out of our nationwide 5G network; partially offset by

•Higher realized Merger synergies.

Cost of equipment sales, exclusive of depreciation and amortization, decreased $163 million, or 3%, for the three months ended and increased $296 million, or 2%, for the nine months ended September 30, 2022.

The decrease for the three months ended September 30, 2022, was primarily from:

•A decrease of $225 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 $81 million in device cost of equipment sales, excluding purchased leased devices, primarily from:

•A decrease in the number of devices sold due to fewer prepaid and postpaid upgrades; partially offset by

•Higher average cost per device sold, driven by an increase in the high-end phone mix; partially offset by

•Higher device insurance claims and warranty fulfillment.

•Merger-related costs, primarily to facilitate the migration of Sprint customers to the T-Mobile network, were $258 million for the three months ended September 30, 2022, compared to $236 million for the three months ended September 30, 2021.

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The increase for the nine months ended September 30, 2022, was primarily from:

•An increase of $871 million in device cost of equipment sales, excluding purchased leased devices, primarily from:

•Higher average costs per device sold due to an increase in the high-end device mix; and

•An increase in the number of devices sold, including higher upgrade volume, primarily to facilitate the migration of Sprint customers to the T-Mobile network, partially offset by lower prepaid upgrades; and

•Higher device insurance claims and warranty fulfillment; partially offset by

•A decrease of $807 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.

•Merger-related costs, primarily to facilitate the migration of Sprint customers to the T-Mobile network, were $1.5 billion for the nine months ended September 30, 2022, compared to $340 million for the nine months ended September 30, 2021.

Selling, general and administrative expenses decreased $94 million, or 2%, for the three months ended and increased $1.2 billion, or 8%, for the nine months ended September 30, 2022.

The decrease for the three months ended September 30, 2022, was primarily from:

•Lower Merger-related costs and higher realized Merger synergies; and

•Gains from the sale of certain IP addresses held by the Wireline Business; partially offset by

•Higher bad debt expense driven by higher receivable balances, as well as normalization relative to muted Pandemic levels a year ago.

•Selling, general and administrative expenses for the three months ended September 30, 2022, included $226 million of Merger-related costs, primarily related to integration and restructuring, compared to $440 million of Merger-related costs for the three months ended September 30, 2021.

The increase for the nine months ended September 30, 2022, was primarily from:

•Higher bad debt expense driven by higher receivable balances, as well as normalization relative to muted Pandemic levels a year ago and estimated potential future macroeconomic impacts; and

•Higher legal-related expenses, net of recoveries, including $400 million recognized in June 2022 for the settlement of certain litigation associated with the August 2021 cyberattack; partially offset by

•Higher realized Merger synergies and lower Merger-related costs; and

•Gains from the sale of certain IP addresses held by the Wireline Business

•Selling, general and administrative expenses for the nine months ended September 30, 2022, included $529 million of Merger-related costs, primarily related to integration, restructuring and legal-related expenses, offset by legal settlement gains, compared to $836 million of Merger-related costs for the nine months ended September 30, 2021.

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. See Note 10 - Wireline of the Notes to the Condensed Consolidated Financial Statements for additional information. There was no impairment expense for the three months ended September 30, 2022, or the three and nine months ended September 30, 2021.

Loss on disposal group held for sale was $1.1 billion for the three and nine months ended September 30, 2022, due to the agreement for the sale of the Wireline Business. See Note 10 - Wireline of the Notes to the Condensed Consolidated Financial Statements for additional information. There was no loss on disposal group held for sale for the three and nine months ended September 30, 2021.

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Depreciation and amortization decreased $832 million, or 20%, for the three months ended and decreased $2.1 billion, or 17%, for the nine months ended September 30, 2022, 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; partially offset by

•Higher depreciation expense, excluding leased devices, from the continued build-out of our nationwide 5G network.

Operating income, the components of which are discussed above, decreased $303 million, or 19%, for the three months ended and decreased $2.0 billion, or 35%, for the nine months ended September 30, 2022.

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

•Lower average debt outstanding and a lower average effective interest rate due to the retirement of higher interest rate debt and the issuance of a lower gross principal amount of lower interest rate debt; offset by

•Lower capitalized interest related to the deployment of our 600 MHz spectrum.

Other expense, net decreased $57 million, or 95%, for the three months ended and decreased $151 million, or 81%, for the nine months ended September 30, 2022. The decrease for the three and nine months ended September 30, 2022, was primarily from lower losses on the extinguishment of debt.

Income before income taxes, the components of which are discussed above, was $451 million and $688 million for the three months ended September 30, 2022 and 2021, respectively, and was $1.2 billion and $3.1 billion for the nine months ended September 30, 2022 and 2021, respectively.

Income tax benefit increased $54 million for the three months ended September 30, 2022 primarily from:

•Tax benefits associated with internal restructuring; and

•Lower Income before income taxes; partially offset by

•Tax benefits recognized in the third quarter of 2021 associated with legal entity reorganization related to historical Sprint entities, including a reduction in the valuation allowance against deferred tax assets in certain state jurisdictions, that did not impact 2022.

Our effective tax rate was (12.4)% and (0.3)% for the three months ended September 30, 2022 and 2021, respectively.

Income tax expense decreased $414 million, or 80%, for the nine months ended September 30, 2022, primarily from:

•Lower Income before income taxes; and

•Tax benefits associated with internal restructuring; partially offset by

•A decrease in excess tax benefits related to the vesting of restricted stock awards.

Our effective tax rate was 8.7% and 16.7% for the nine months ended September 30, 2022 and 2021, respectively.

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Net income, the components of which are discussed above, was $508 million and $691 million for the three months ended September 30, 2022 and 2021, respectively, and was $1.1 billion and $2.6 billion for the nine months ended September 30, 2022 and 2021, respectively.

Net income for the three months ended September 30, 2022, included the following:

•Merger-related costs, net of tax, of $972 million for the three months ended September 30, 2022, compared to $707 million for the three months ended September 30, 2021.

•Loss on disposal group held for sale of $803 million, net of tax, for the three months ended September 30, 2022, compared to no loss on disposal group held for sale for the three months ended September 30, 2021.

Net income for the nine months ended September 30, 2022, included the following:

•Merger-related costs, net of tax, of $3.3 billion for the nine months ended September 30, 2022, compared to $1.4 billion for the nine months ended September 30, 2021.

•Loss on disposal group held for sale of $803 million, net of tax, for the nine months ended September 30, 2022, compared to no loss on disposal group held for sale for the nine months ended September 30, 2021.

•Impairment expense of $358 million, net of tax, for the nine months ended September 30, 2022, compared to no impairment expense for the nine months ended September 30, 2021.

•Legal-related expenses, net of recoveries, including from the impact of the settlement of certain litigation associated with the August 2021 cyberattack, of $286 million, net of tax, for the nine months ended September 30, 2022.

Guarantor Financial Information

In connection with our Merger with Sprint, we assumed certain registered debt to third parties issued by Sprint, Sprint Communications LLC, formerly known as Sprint Communications, Inc. (“Sprint Communications”) and Sprint Capital Corporation (collectively, the “Sprint Issuers”).

Pursuant to the applicable indentures and supplemental indentures, the Senior Notes to affiliates and third parties issued by T-Mobile USA, Inc. and the Sprint Issuers (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”).

Pursuant to the applicable indentures and supplemental indentures, the Senior Secured Notes to third parties issued by T-Mobile USA, Inc. are fully and unconditionally guaranteed, jointly and severally, on a senior secured basis by Parent and the Guarantor Subsidiaries, except for the guarantees of Sprint, Sprint Communications and Sprint Capital Corporation, which are provided on a senior unsecured basis.

The guarantees of the Guarantor Subsidiaries are subject to release in limited circumstances only upon the occurrence of certain customary conditions. 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, pay dividends and make distributions, make certain investments, repurchase stock, create liens or other encumbrances, enter into transactions with affiliates, enter into transactions that restrict dividends or distributions from subsidiaries, and merge, consolidate or sell, or otherwise dispose of, substantially all of their assets. Certain provisions of each of the credit agreements, indentures and supplemental indentures relating to the long-term debt restrict the ability of the Issuers or borrowers to loan funds or make payments to Parent. However, the Issuers or borrowers and Guarantor Subsidiaries are allowed to make certain permitted payments to Parent under the terms of the indentures, supplemental indentures and credit agreements.

Basis of Presentation

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

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The summarized balance sheet information for the consolidated obligor group of debt issued by T-Mobile USA, Inc. is presented in the table below:


(in millions)	September 30, 2022		December 31, 2021
Current assets	$	20,131	$	19,522
Noncurrent assets	181,426		174,980
Current liabilities	24,836		22,195
Noncurrent liabilities	119,797		115,126
Due to non-guarantors	8,171		8,208

Due to related parties	1,535		3,842

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:


	Nine Months Ended September 30, 2022		Year Ended December 31, 2021
(in millions)
Total revenues	$	57,423	$	78,538
Operating income	1,144		3,835
Net (loss) income	(1,178)		402
Revenue from non-guarantors	1,823		1,769
Operating expenses to non-guarantors	1,981		2,655
Other expense to non-guarantors	(192)		(148)

The summarized balance sheet information for the consolidated obligor group of debt issued by Sprint and Sprint Communications is presented in the table below:


(in millions)	September 30, 2022		December 31, 2021
Current assets	$	12,020	$	11,969
Noncurrent assets	9,661		10,347
Current liabilities	17,394		15,136
Noncurrent liabilities	62,408		70,262
Due to non-guarantors	923		—
Due from non-guarantors	—		1,787
Due to related parties	1,535		3,842

The summarized results of operations information for the consolidated obligor group of debt issued by Sprint and Sprint Communications is presented in the table below:


	Nine Months Ended September 30, 2022		Year Ended December 31, 2021
(in millions)
Total revenues	$	5	$	7
Operating loss	(2,805)		(751)
Net income (loss)	3,382		(2,161)


Other income, net, from non-guarantors	603		1,706

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, 2022		December 31, 2021
Current assets	$	12,020	$	11,969
Noncurrent assets	17,733		19,375
Current liabilities	17,465		15,208
Noncurrent liabilities	66,871		75,753

Due from non-guarantors	8,072		10,814
Due to related parties	1,535		3,842

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The summarized results of operations information for the consolidated obligor group of debt issued by Sprint Capital Corporation is presented in the table below:


	Nine Months Ended September 30, 2022		Year Ended December 31, 2021
(in millions)
Total revenues	$	5	$	7
Operating loss	(2,805)		(751)
Net income (loss)	3,456		(2,590)


Other income, net, from non-guarantors	900		2,076

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.

Total 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, wearables, DIGITS or other connected devices, which include tablets and SyncUP products, where they generally pay after receiving service.


	As of September 30,		Change
(in thousands)	2022	2021	#	%

Total postpaid customer accounts (1) (2)	28,212	26,901	1,311	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.

(2) In the first quarter of 2021, we acquired 4,000 postpaid accounts through our acquisition of an affiliate. In the third quarter of 2021, we acquired 270,000 postpaid accounts through our acquisition of the Wireless Assets of Shentel.

Total postpaid customer accounts increased 1,311,000, or 5%, primarily due to the Company’s differentiated growth strategy in new and under-penetrated markets, including continued growth in High Speed Internet.

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)	2022	2021	#	%		2022	2021		#	%

Postpaid net account additions	394	268	126	47	%	1,122	873		249	29	%

Postpaid net account additions increased 126,000, or 47%, for the three months ended and increased 249,000, or 29%, for the nine months ended September 30, 2022, primarily due to the Company’s differentiated growth strategy in new and under-penetrated markets, including continued growth in High Speed Internet.

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, wearables, DIGITS or other connected devices, which include tablets and SyncUP products, where they generally pay after receiving service, or prepaid service, where they generally pay in advance of receiving service.

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The following table sets forth the number of ending customers:


	As of September 30,		Change
(in thousands)	2022	2021	#	%
Customers, end of period

Postpaid phone customers (1) (2)	71,907	69,418	2,489	4	%
Postpaid other customers (1) (2)	18,507	16,495	2,012	12	%

Total postpaid customers	90,414	85,913	4,501	5	%
Prepaid customers (1)	21,341	21,007	334	2	%

Total customers	111,755	106,920	4,835	5	%
Adjustments to customers (1) (2)	(1,878)	818	(2,696)	NM

(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.

(2) In the first quarter of 2021, we acquired 11,000 postpaid phone customers and 1,000 postpaid other customers through our acquisition of an affiliate. In the third quarter of 2021, we acquired 716,000 postpaid phone customers and 90,000 postpaid other customers through our acquisition of the Wireless Assets from Shentel.

NM - Not Meaningful

Total customers increased 4,835,000, or 5%, primarily from:

•Higher postpaid phone customers, primarily due to growth in new customer account relationships;

•Higher postpaid other customers, primarily due to growth in other connected devices, including growth in High Speed Internet and wearable products; and

•Higher prepaid customers, primarily due to the continued success of our prepaid business due to promotional activity and rate plan offers; partially offset by lower prepaid industry demand associated with continued industry shift to postpaid plans.

Total customers included High Speed Internet customers of 2,122,000 and 422,000 as of September 30, 2022 and 2021, 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)	2022	2021	#	%		2022	2021		#	%
Net customer additions

Postpaid phone customers	854	673	181	27	%	2,166	2,073		93	4	%
Postpaid other customers	773	586	187	32	%	2,435	1,672		763	46	%

Total postpaid customers	1,627	1,259	368	29	%	4,601	3,745		856	23	%
Prepaid customers	105	66	39	59	%	313	293		20	7	%

Total customers	1,732	1,325	407	31	%	4,914	4,038		876	22	%
Adjustments to customers	—	806	(806)	(100)	%	(1,878)	818		(2,696)	NM

NM - Not Meaningful

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Total net customer additions increased 407,000, or 31%, for the three months ended and increased 876,000, or 22%, for the nine months ended September 30, 2022.

The increase for the three months ended September 30, 2022, was primarily from:

•Higher postpaid other net customer additions, primarily due to continued growth in High Speed Internet, partially offset by lower net additions from mobile internet devices and wearables;

•Higher postpaid phone net customer additions, primarily due to higher gross additions driven by growth in new customer account relationships and lower churn; and

•Higher prepaid net customer additions, primarily due to the introduction of our High Speed Internet offering.

•High Speed Internet net customer additions included in postpaid other net customer additions were 488,000 and 134,000 for the three months ended September 30, 2022 and 2021, respectively. High Speed Internet net customer additions included in prepaid net customer additions were 90,000 for the three months ended September 30, 2022. Our prepaid High Speed Internet launch was in the first quarter of 2022. Therefore, there were no prepaid High Speed Internet net customer additions for the three months ended September 30, 2021.

The increase for the nine months ended September 30, 2022, was primarily from:

•Higher postpaid other net customer additions, primarily due to an increase in High Speed Internet net customer additions and wearables, partially offset by lower net additions from mobile internet devices;

•Higher postpaid phone net customer additions, primarily due to lower churn and higher gross additions driven by growth in new account relationships; and

•Higher prepaid net customer additions, primarily due to the introduction of our High Speed Internet offering, partially offset by the continued industry shift to postpaid plans.

•High Speed Internet net customer additions included in postpaid other net customer additions were 1,314,000 and 322,000 for the nine months ended September 30, 2022 and 2021, respectively. High Speed Internet net customer additions included in prepaid net customer additions were 162,000 for the nine months ended September 30, 2022. Our prepaid High Speed Internet launch was in the first quarter of 2022. Therefore, there were no prepaid High Speed Internet net customer additions for the nine months ended September 30, 2021.

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 have their service restored within a certain 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
	2022		2021			2022		2021
Postpaid phone churn	0.88	%	0.96	%	-8 bps	0.87	%	0.93	%		-6 bps
Prepaid churn	2.88	%	2.90	%	-2 bps	2.71	%	2.76	%		-5 bps

Postpaid phone churn decreased 8 basis points for the three months ended and decreased 6 basis points for the nine months ended September 30, 2022, primarily from:

•Reduced Sprint churn as we progress through the integration process; partially offset by

•More normalized switching activity and payment performance relative to the muted Pandemic-driven conditions a year ago.

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Prepaid churn decreased 2 basis points for the three months ended and decreased 5 basis points for the nine months ended September 30, 2022, primarily from:

•Promotional activity; partially offset by

•More normalized switching activity and payment performance relative to the muted Pandemic-driven conditions a year ago.

Average Revenue Per Account

Average Revenue per Account (“ARPA”) represents the average monthly postpaid service revenue earned per account. 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, wearables, DIGITS or other connected devices, which include tablets and SyncUP products.

The following table sets forth our operating measure ARPA:


(in dollars)	Three Months Ended September 30,				Change				Nine Months Ended September 30,				Change
	2022		2021		$		%		2022		2021			$		%





Postpaid ARPA	$	137.49	$	134.54	$	2.95	2	%	$	137.32	$	133.68		$	3.64	3	%

Postpaid ARPA increased $2.95, or 2%, for the three months ended and increased $3.64, or 3%, for the nine months ended September 30, 2022.

The increase for the three months ended September 30, 2022, was primarily from:

•Higher premium services, including Magenta Max;

•Continued adoption of High Speed Internet from existing accounts; and

•Higher non-recurring charges relative to muted Pandemic levels; partially offset by

•An increase in High Speed Internet only accounts; and

•An increase in promotional impacts for Sprint customers from the network transition.

The increase for the nine months ended September 30, 2022, was primarily from:

•Higher premium services, including Magenta Max;

•Continued adoption of High Speed Internet from existing accounts; and

•Higher non-recurring charges relative to muted Pandemic levels; partially offset by

•An increase in promotional impacts for Sprint customers from the network transition; and

•An increase in High Speed Internet only accounts.

Average Revenue Per User

ARPU represents the average monthly service revenue earned from customers. 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, wearables, DIGITS and other connected devices such as tablets and SyncUP products.

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The following table sets forth our operating measure ARPU:


(in dollars)	Three Months Ended September 30,				Change				Nine Months Ended September 30,				Change
	2022		2021		$		%		2022		2021			$		%







Postpaid phone ARPU	$	48.89	$	48.06	$	0.83	2	%	$	48.75	$	47.66		$	1.09	2	%












Prepaid ARPU	38.86		39.49		(0.63)		(2)	%	38.92		38.61			0.31		1	%

Postpaid Phone ARPU

Postpaid phone ARPU increased $0.83, or 2%, for the three months ended and increased $1.09, or 2%, for the nine months ended September 30, 2022, primarily due to:

•Higher premium services, including Magenta Max; and

•Higher non-recurring charges relative to muted Pandemic levels; partially offset by

•An increase in promotional impacts for Sprint customers from the network transition; and

•Higher lines per account driven by deepening Sprint relationships.

Prepaid ARPU

Prepaid ARPU decreased $0.63, or 2%, for the three months ended and increased $0.31, or 1%, for the nine months ended September 30, 2022.

The decrease for the three months ended September 30, 2022, was primarily from:

•Increased promotional activity; partially offset by

•An increase in one-time fees.

The increase for the nine months ended September 30, 2022, was primarily from:

•Higher premium services; partially offset by

•Increased promotional activity.

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 use 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 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, losses on disposal groups held for sale and certain legal-related recoveries and expenses, as they are not indicative of our ongoing operating performance, as well as certain nonrecurring income and expenses. Management believes analysts and investors use Core Adjusted EBITDA because it normalizes for the transition in the Company’s device financing strategy, by excluding the impact of device lease revenues from Adjusted EBITDA, to align with the exclusion of the related depreciation expense on leased devices from Adjusted EBITDA. Adjusted EBITDA, Adjusted EBITDA margin, Core Adjusted EBITDA and Core Adjusted EBITDA margin have limitations as analytical tools and should not be considered in isolation or as substitutes for income from operations, net income or any other measure of financial performance reported in accordance with GAAP.

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The following table illustrates the calculation of Adjusted EBITDA and Core Adjusted EBITDA and reconciles Adjusted EBITDA and Core Adjusted EBITDA to Net income, 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)	2022			2021			$		%		2022			2021				$		%

Net income	$	508		$	691		$	(183)	(26)	%	$	1,113		$	2,602			$	(1,489)	(57)	%
Adjustments:


Interest expense, net	827			836			(9)		(1)	%	2,542			2,521				21		1	%


Other expense, net	3			60			(57)		(95)	%	35			186				(151)		(81)	%
Income tax (benefit) expense	(57)			(3)			(54)		NM		106			520				(414)		(80)	%

Operating income	1,281			1,584			(303)		(19)	%	3,796			5,829				(2,033)		(35)	%
Depreciation and amortization	3,313			4,145			(832)		(20)	%	10,389			12,511				(2,122)		(17)	%


Stock-based compensation (1)	145			127			18		14	%	430			386				44		11	%
Merger-related costs	1,296			955			341		36	%	4,377			1,864				2,513		135	%

Impairment expense	—			—			—		NM		477			—				477		NM
Legal-related (recoveries) expenses, net (2)	(19)			—			(19)		NM		381			—				381		NM
Loss on disposal group held for sale	1,071			—			1,071		NM		1,071			—				1,071		NM
Other, net (3)	(48)			—			(48)		NM		72			32				40		125	%

Adjusted EBITDA	7,039			6,811			228		3	%	20,993			20,622				371		2	%
Lease revenues	(311)			(770)			459		(60)	%	(1,184)			(2,725)				1,541		(57)	%
Core Adjusted EBITDA	$	6,728		$	6,041		$	687	11	%	$	19,809		$	17,897			$	1,912	11	%
Net income margin (Net income divided by Service revenues)	3		%	5		%			-200 bps		2		%	6		%				-400 bps
Adjusted EBITDA margin (Adjusted EBITDA divided by Service revenues)	46		%	46		%			— bps		46		%	48		%				-200 bps
Core Adjusted EBITDA margin (Core Adjusted EBITDA divided by Service revenues)	44		%	41		%			300 bps		43		%	41		%				200 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, including gains from the sale of IP addresses, not directly attributable to the Merger which would not be expected to reoccur or are not reflective of T-Mobile’s ongoing operating performance (“special items”), and are, therefore, excluded from Adjusted EBITDA and Core Adjusted EBITDA.

NM - Not meaningful

Core Adjusted EBITDA increased $687 million, or 11%, for the three months ended and increased $1.9 billion, or 11%, for the nine months ended September 30, 2022. The components comprising Core Adjusted EBITDA are discussed further above.

The increase for the three months ended September 30, 2022, was primarily due to:

•Higher Total service revenues;

•Lower Cost of services, excluding Merger-related costs; and

•Lower Cost of equipment sales, excluding Merger-related costs; partially offset by

•Lower Equipment revenues, excluding lease revenues; and

•Higher Selling, general and administrative expenses, excluding Merger-related costs and other special items, such as gains from the sale of IP addresses.

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The increase for the nine months ended September 30, 2022, was primarily due to:

•Higher Total service revenues;

•Lower Cost of equipment sales, excluding Merger-related costs; and

•Lower Cost of services, excluding Merger-related costs; partially offset by

•Higher Selling, general and administrative expenses, excluding Merger-related costs, certain legal-related expenses, net of recoveries, and other special items, such as gains from the sale of IP addresses; and

•Lower Equipment revenues, excluding lease revenues.

Adjusted EBITDA increased $228 million, or 3%, for the three months ended and increased $371 million, or 2%, for the nine months ended September 30, 2022. The slight increases were primarily due to the fluctuations in Core Adjusted EBITDA, discussed above, including changes in Lease revenues. Lease revenues decreased $459 million for the three months ended and decreased $1.5 billion for the nine months ended September 30, 2022.

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 and the Revolving Credit Facility (as defined below). Further, the incurrence of additional indebtedness may inhibit our ability to incur new debt under the terms governing our existing and future indebtedness, which may make it more difficult for us to incur new debt in the future to finance our business strategy.

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)	2022		2021		$		%		2022		2021			$		%
Net cash provided by operating activities	$	4,391	$	3,477	$	914	26	%	$	12,445	$	10,917		$	1,528	14	%
Net cash used in investing activities	(2,555)		(4,152)		1,597		(38)	%	(10,206)		(17,474)			7,268		(42)	%
Net cash provided by (used in) financing activities	1,927		(3,060)		4,987		(163)	%	(1,953)		237			(2,190)		(924)	%

Operating Activities

Net cash provided by operating activities increased $914 million, or 26%, for the three months ended and increased $1.5 billion, or 14%, for the nine months ended September 30, 2022.

The increase for the three months ended September 30, 2022, was primarily from:

•A $1.4 billion decrease in net cash outflows from changes in working capital, primarily due to lower use of cash from Short- and long-term operating lease liabilities, including the impact of a $1.0 billion advance rent payment related to the modification of one of our master lease agreements during the three months ended September 30, 2021, Other current and long-term liabilities and Equipment installment plan receivables, partially offset by higher use of cash from Accounts receivable; partially offset by

•A $468 million decrease in Net income, adjusted for non-cash income and expense.

•Net cash provided by operating activities includes the impact of $942 million and $617 million in net payments for Merger-related costs for the three months ended September 30, 2022 and 2021, respectively.

The increase for the nine months ended September 30, 2022, was primarily from:

•A $3.9 billion decrease in net cash outflows from changes in working capital, primarily due to lower use of cash from Short- and long-term operating lease liabilities, including the impact of a $1.0 billion advance rent payment related to the modification of one of our master lease agreements during the nine months ended September 30, 2021, Accounts payable and accrued liabilities, Equipment installment plan receivables, other Current and long-term liabilities and

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Operating lease right-of-use assets, partially offset by higher use of cash from Accounts receivable and Inventories; partially offset by

•A $2.4 billion decrease in Net income, adjusted for non-cash income and expense.

•Net cash provided by operating activities includes the impact of $2.7 billion and $1.1 billion in net payments for Merger-related costs for the nine months ended September 30, 2022 and 2021, respectively.

Investing Activities

Net cash used in investing activities decreased $1.6 billion, or 38%, for the three months ended and decreased $7.3 billion, or 42%, for the nine months ended September 30, 2022.

The use of cash for the three months ended September 30, 2022, was primarily from:

•$3.6 billion in Purchases of property and equipment, including capitalized interest, from the accelerated build-out of our nationwide 5G network, including from network integration related to the Merger; and

•$360 million in Purchases of spectrum licenses and other intangible assets, including deposits, primarily due to $239 million paid for spectrum licenses won at the conclusion of Auction 108 in September 2022; partially offset by

•$1.3 billion in Proceeds related to beneficial interests in securitization transactions.

The use of cash for the nine months ended September 30, 2022, was primarily from:

•$10.6 billion in Purchases of property and equipment, including capitalized interest, from the accelerated build-out of our nationwide 5G network, including from network integration related to the Merger; and

•$3.3 billion in Purchases of spectrum licenses and other intangible assets, including deposits, primarily due to $2.8 billion paid for spectrum licenses won at the conclusion of Auction 110 in February 2022 and $304 million paid in total for spectrum licenses won at the conclusion of Auction 108 in September 2022; partially offset by

•$3.6 billion in Proceeds related to beneficial interests in securitization transactions.

Financing Activities

Net cash provided by financing activities increased $5.0 billion from a net use of cash for the three months ended September 30, 2021, to a net source of cash for the three months ended September 30, 2022. Net cash used in financing activities increased $2.2 billion from a net source of cash for the nine months ended September 30, 2021, to a net use of cash for the nine months ended September 30, 2022.

The net source of cash for the three months ended September 30, 2022, was primarily from:

•$3.0 billion in Proceeds from issuance of long-term debt; partially offset by

•$557 million in Repurchases of common stock; and

•$311 million in Repayments of financing lease obligations.

The net use of cash for the nine months ended September 30, 2022, was primarily from:

•$3.1 billion in Repayments of long-term debt;

•$901 million in Repayments of financing lease obligations;

•$557 million in Repurchases of common stock; and

•$225 million in Tax withholdings on share-based awards; partially offset by

•$3.0 billion in Proceeds from issuance of long-term debt.

Cash and Cash Equivalents

As of September 30, 2022, our Cash and cash equivalents were $6.9 billion compared to $6.6 billion at December 31, 2021.

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Free Cash Flow

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

The table below provides a reconciliation of 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)	2022		2021		$		%		2022		2021			$		%

Net cash provided by operating activities	$	4,391	$	3,477	$	914	26	%	$	12,445	$	10,917		$	1,528	14	%
Cash purchases of property and equipment, including capitalized interest	(3,634)		(2,944)		(690)		23	%	(10,587)		(9,397)			(1,190)		13	%
Proceeds from sales of tower sites	—		—		—		NM		—		31			(31)		(100)	%
Proceeds related to beneficial interests in securitization transactions	1,308		1,071		237		22	%	3,614		3,099			515		17	%
Cash payments for debt prepayment or debt extinguishment costs	—		(45)		45		(100)	%	—		(116)			116		(100)	%
Free Cash Flow	$	2,065	$	1,559	$	506	32	%	$	5,472	$	4,534		$	938	21	%

Free Cash Flow increased $506 million, or 32%, for the three months ended and increased $938 million, or 21%, for the nine months ended September 30, 2022.

The increase for the three months ended September 30, 2022, was primarily impacted by the following:

•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; partially offset by

•Higher Cash purchases of property and equipment, including capitalized interest.

•Free Cash Flow includes $942 million and $617 million in net payments for Merger-related costs for the three months ended September 30, 2022 and 2021, respectively.

The increase for the nine months ended September 30, 2022, was primarily impacted by the following:

•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; partially offset by

•Higher Cash purchases of property and equipment, including capitalized interest.

•Free Cash Flow includes $2.7 billion and $1.1 billion in net payments for Merger-related costs for the nine months ended September 30, 2022 and 2021, respectively.

During the three and nine months ended September 30, 2022 and 2021, there were no significant net cash proceeds from securitization.

Borrowing Capacity

We maintain a revolving credit facility (the “Revolving Credit Facility”) with an aggregate commitment amount of $5.5 billion. As of September 30, 2022, there was no outstanding balance under the Revolving Credit Facility.

Subsequent to September 30, 2022, on October 17, 2022, we entered into an Amended and Restated Credit Agreement, which, among other things, increased the aggregate commitment amount of the Revolving Credit Facility to $7.5 billion. See Note 6 - Debt of the Notes to the Condensed Consolidated Financial Statements for more information regarding the Amended and Restated Credit Agreement.

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Debt Financing

As of September 30, 2022, our total debt and financing lease liabilities were $76.6 billion, excluding our tower obligations, of which $66.3 billion was classified as long-term debt and $1.6 billion was classified as long-term financing lease liabilities.

During the nine months ended September 30, 2022, we issued long-term debt for net proceeds of $3.0 billion and repaid short- and long-term debt with an aggregate principal amount of $3.1 billion.

Subsequent to September 30, 2022, on October 12, 2022, we issued $750 million of 4.910% Class A senior ABS Notes to third-party investors in a private placement transaction.

For more information regarding our debt financing transactions, see Note 6 – Debt of the Notes to the Condensed Consolidated Financial Statements.

Spectrum Auctions

In January 2022, the Federal Communications Commission (“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 the 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.

In September 2022, the FCC announced that we were the winning bidder of 7,156 licenses in Auction 108 (2.5 GHz) for an aggregate price of $304 million. At the 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.

For more information regarding our spectrum licenses, see Note 4 – Spectrum License Transactions 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.

For more information regarding our License Purchase Agreements, see Note 4 – Spectrum License Transactions of the Notes to the Condensed Consolidated Financial Statements.

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, 2022, we derecognized net receivables of $2.4 billion upon sale through these arrangements.

For more information regarding these off-balance sheet arrangements, see Note 3 – Sales of Certain Receivables of the Notes to the Condensed Consolidated Financial Statements.

Future Sources and Uses of Liquidity

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

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We determine future liquidity requirements for operations, capital expenditures and share repurchases based in large part upon projected financial and operating performance, and opportunities to acquire additional spectrum or repurchase shares. We regularly review and update these projections for changes in current and projected financial and operating results, general economic conditions, the competitive landscape and other factors. We have incurred, and will incur, substantial expenses to comply with the Government Commitments, and we are also expected to incur substantial restructuring expenses in connection with integrating and coordinating T-Mobile’s and Sprint’s businesses, operations, policies and procedures. See “Restructuring” in this MD&A. 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. These expenses could exceed the costs historically borne by us and adversely affect our financial condition and results of operations. There are a number of additional risks and uncertainties, including those due to the impact of the Pandemic, 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, 2022.

Financing Lease Facilities

We have entered into 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, 2022, we have committed to $7.5 billion of financing leases under these financing lease facilities, of which $325 million and $1.2 billion was executed during the three and nine months ended September 30, 2022, respectively. We expect to enter into up to an additional $40 million in financing lease commitments during the year ending December 31, 2022.

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 following 2022. Future capital expenditure requirements will include the deployment of our recently acquired C-band and 3.45 GHz licenses.

For more information regarding our spectrum licenses, see Note 4 – Spectrum License Transactions of the Notes to the Condensed Consolidated Financial Statements.

Stockholder Returns

We have never declared or paid any cash dividends on our common stock, and we do not intend to declare or pay any cash dividends on our common stock in the foreseeable future.

During the three and nine months ended September 30, 2022, we repurchased shares of our common stock for a total purchase price of $669 million, all of which were purchased under the 2022 Stock Repurchase program and occurred during the period from September 8, 2022, through September 30, 2022. As of September 30, 2022, we had up to approximately $13.3 billion remaining under the 2022 Stock Repurchase Program, of which up to approximately $2.3 billion was available for the remainder of 2022.

Subsequent to September 30, 2022, from October 1, 2022, through October 20, 2022, we repurchased additional shares of our common stock for a total purchase price of $815 million. As of October 20, 2022, we had up to approximately $12.5 billion remaining under the 2022 Stock Repurchase Program, of which up to approximately $1.5 billion is available for the remainder of 2022.

For additional information regarding the 2022 Stock Repurchase Program, see Note 9 – Repurchases of Common Stock of the Notes to the Condensed Consolidated Financial Statements.

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Related Party Transactions

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

As of October 20, 2022, DT and SoftBank held, directly or indirectly, approximately 48.6% and 3.2%, respectively, of the outstanding T-Mobile common stock, with the remaining approximately 48.2% of the outstanding T-Mobile common stock held by 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, 2022, over approximately 52.2% of the outstanding T-Mobile common stock.

Disclosure of Iranian Activities under Section 13(r) of the Securities Exchange Act of 1934

Section 219 of the Iran Threat Reduction and Syria Human Rights Act of 2012 added Section 13(r) to the Exchange Act of 1934, as amended (“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, 2022, 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: Irancell Telecommunications Services Company, Telecommunication Kish Company, Mobile Telecommunication Company of Iran, and Telecommunication Infrastructure Company of Iran. In addition, during the three months ended September 30, 2022, DT, through certain of its non-U.S. subsidiaries, provided basic telecommunications services to four 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 and Golgohar Trade and Technology GmbH. These services have been terminated or are in the process of being terminated. For the three months ended September 30, 2022, 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, 2022, 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, 2022, 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, 2022, 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, 2022, were both under $0.1 million. We understand that the SoftBank subsidiary intends to continue such activities.

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Critical Accounting Policies and 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, 2021, 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 market risk as previously disclosed in Part II, Item 7A of our Annual Report on Form 10-K for the year ended December 31, 2021.

Item 4. Controls and Procedures

Evaluation of Disclosure Controls and Procedures

We maintain disclosure controls and procedures designed to ensure information required to be disclosed in our periodic reports filed or submitted under the Exchange Act, is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms. Our disclosure controls include the use of a Disclosure Committee which is comprised of representatives from our Accounting, Legal, Treasury, Technology, Risk Management, Government Affairs and Investor Relations functions and are designed to ensure that information required to be disclosed in the reports we file or submit under the Exchange Act is accumulated and communicated to our management, including our principal executive officer and principal financial officer, as appropriate, to allow timely decisions regarding required disclosure.

Under the supervision and with the participation of our management, including our Chief Executive Officer and our Chief Financial Officer, we carried out an evaluation of the effectiveness of the design and operation of our disclosure controls and procedures, as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act. Based upon that evaluation, our Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures were effective, as of the end of the period covered by this Form 10-Q.

The certifications required by Section 302 of the Sarbanes-Oxley Act of 2002 (the “Sarbanes-Oxley Act”) are filed as Exhibits 31.1 and 31.2, respectively, 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 14 – Commitments and Contingencies of the Notes to the Condensed Consolidated Financial Statements.

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Item 1A. Risk Factors

Other than the updated risk 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, 2021.

Risks Related to Our Business and the Wireless Industry

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.

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”). We are subject to persistent cyberattacks and threats to our networks, systems, and supply chain from a variety of bad actors, many of whom attempt to gain access to and compromise Confidential Information by exploiting bugs, errors, misconfigurations or other vulnerabilities in our networks and other systems (including purchased and third-party systems) or by engaging in credential harvesting or social engineering. In some cases, these bad actors may obtain unauthorized access to Confidential Information utilizing credentials taken from our customers, employees, or third parties. Other bad actors aim to cause serious operational disruptions to our business or networks through other means, such as 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 provide certain Confidential Information to third-party providers whose products and services are used in our business operations, including as part of our IT systems, such as cloud services. These third-party providers have experienced in the past, and will continue to experience in the future, cyberattacks that involve attempts to obtain unauthorized access to our Confidential Information and/or to create operational disruptions that could adversely affect our business, and these providers also face other security challenges common to all parties that collect and process information.

In August 2021, we disclosed that our systems were subject to a criminal cyberattack that compromised certain data of millions of our current customers, former customers, and prospective customers, including, in some instances, social security numbers, names, addresses, dates of birth and driver’s license/identification numbers. With the assistance of outside cybersecurity experts, we located and closed the unauthorized access to our systems and identified current, former, and prospective customers whose information was impacted and notified them, consistent with state and federal requirements. We have incurred certain cyberattack-related expenses, including costs to remediate the attack, provide additional customer support and enhance customer protection, and expect to incur additional expense in future periods resulting from the attack. For more information, see “Cyberattack” in the Overview section of MD&A. 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 14 – Commitments and Contingencies of the Notes to the Condensed Consolidated Financial Statements.” As a result of the August 2021 cyberattack, we may incur significant costs or experience other material financial impacts, which may not be covered by, or may exceed the coverage limits of, our cyber 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 August 2021 cyberattack, 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.

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

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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. Our inability to protect Confidential Information or to prevent operational disruptions from future cyberattacks may have a material adverse effect on our business, reputation, financial condition, cash flows, and operating results.

Risks Related to Our Indebtedness

Our substantial level of indebtedness could adversely affect our business flexibility, ability to service our debt, and increase our borrowing costs.

We have, and we expect that we will continue to have, a substantial amount of debt. Our substantial level of indebtedness could have the effect of, among other things, reducing our flexibility in responding to changing business, economic, market and industry conditions and increasing the amount of cash required to service our debt. In addition, this level of indebtedness may also reduce funds available for capital expenditures, any board-approved share repurchases and other activities. Those impacts may put us at a competitive disadvantage relative to other companies with lower debt levels. Further, we may need to incur substantial additional indebtedness in the future, subject to the restrictions contained in our debt instruments, if any, which could increase the risks associated with our capital structure.

Our ability to service our substantial debt obligations will depend on future performance, which will be affected by business, economic, market and industry conditions and other factors, including our ability to achieve the expected benefits of the Transactions. There is no guarantee that we will be able to generate sufficient cash flow to service our debt obligations when due. If we are unable to meet such obligations or fail to comply with the financial and other restrictive covenants contained in the agreements governing such debt obligations, we may be required to refinance all or part of our debt, sell important strategic assets at unfavorable prices or make additional borrowings. We may not be able to, at any given time, refinance our debt, sell assets or make additional borrowings on commercially reasonable terms or at all, which could have a material adverse effect on our business, financial condition and operating results.

Changes in credit market conditions could adversely affect our ability to raise debt favorably.

Instability in the global financial markets, inflation, policies of various governmental and regulatory agencies, including changes in monetary policy and interest rates, and other general economic conditions could lead to volatility in the credit and equity markets. This volatility could limit our access to the capital markets, leading to higher borrowing costs or, in some cases, the inability to obtain financing on terms that are acceptable to us or at all.

In addition, any hedging agreements we have and may continue to enter into to limit our exposure to interest rate increases or foreign currency fluctuations may not offer complete protection from these risks or may be unsuccessful, and consequently may effectively increase the interest rate we pay on our debt or the exchange rate with respect to any debt we may incur in a foreign currency, and any portion not subject to such hedging agreements would have full exposure to interest rate increases or foreign currency fluctuations, as applicable. If any financial institutions that are parties to our hedging agreements were to default on their payment obligations to us, declare bankruptcy or become insolvent, we would be unhedged against the underlying exposures. Any posting of collateral by us under our hedging agreements and the modification or termination of any of our hedging agreements could negatively impact our liquidity or other financial metrics. Any of these risks could have a material adverse effect on our business, financial condition and operating results.

The agreements governing our indebtedness and other financings include restrictive covenants that limit our operating

flexibility.

The agreements governing our indebtedness and other financings impose operating and financial restrictions. These restrictions, subject in certain cases to customary baskets, exceptions and maintenance and incurrence-based financial tests, together with our debt service obligations, may limit our ability to engage in transactions and pursue strategic business opportunities. These restrictions could limit our ability to obtain debt financing, refinance or pay principal on our outstanding indebtedness,

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complete acquisitions for cash or indebtedness or react to business, economic, market and industry conditions and other changes in our operating environment or the economy. Any future indebtedness that we incur may contain similar or more restrictive covenants. Any failure to comply with the restrictions of our debt agreements may result in an event of default under these agreements, which in turn may result in defaults or acceleration of obligations under these and other agreements, giving our lenders the right to terminate the commitments they had made or the right to require us to repay all amounts then outstanding plus any interest, fees, penalties or premiums. An event of default may also compel us to sell certain assets securing indebtedness under certain of these agreements.

Credit rating downgrades and/or inability to access debt markets could adversely affect our business, cash flows, financial condition and operating results.

Credit ratings impact the cost and availability of future borrowings and, as a result, cost of capital. Our current ratings reflect each rating agency’s opinion of our financial strength, operating performance and ability to meet our debt obligations. Our capital structure and business model are reliant on continued access to debt markets. Each rating agency reviews our ratings periodically, and there can be no assurance that such ratings will be maintained in the future. A downgrade in our corporate rating and/or our issued debt ratings could impact our ability to access debt markets and adversely affect our business, cash flows, financial condition and operating results.

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 14 – Commitments and Contingencies of the Notes to the Condensed 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 making additional reimbursements and paying 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 was 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 July 26, 2022, we received preliminary approval of the proposed settlement, which remains subject to final court approval. Final court approval of the terms of the settlement is expected as early as January 2023 but could be delayed by appeals or other proceedings. If approved by the court, under the terms of the proposed settlement, we would pay an aggregate of $350 million to fund claims submitted by class members, the legal fees of plaintiffs’ counsel and the costs of administering the settlement. We would also commit to an aggregate incremental spend of $150 million for data security and related technology in 2022 and 2023. In connection with the proposed 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 in the second quarter of 2022. In light of the inherent uncertainties involved in such matters and based on the information currently available

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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. 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, 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 2022 Stock Repurchase Program will be fully consummated or that our 2022 Stock Repurchase Program will enhance long-term stockholder value.

Our Board of Directors has authorized our 2022 Stock Repurchase Program for up to $14.0 billion of the Company’s common stock through September 30, 2023, including up to $3.0 billion through 2022, with $669 million spent by the Company on share repurchases as of September 30, 2022. Any share repurchases will depend upon, among other factors, our cash balances and potential future capital requirements, our results of operations and financial condition, our ability to access capital markets, our priorities for the use of cash for other purposes, the price of our common stock, and other factors that we may deem relevant.

The existence of the 2022 Stock Repurchase 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. We can provide no assurance that we will repurchase shares of our common stock at favorable prices, if at all. Although the program is intended to enhance long-term stockholder value, there is no assurance it will do so.

In addition, the 2022 Stock Repurchase Program does not obligate the Company to acquire any particular amount of common stock. The 2022 Stock Repurchase Program may be suspended or discontinued, or the amount to be spent by the Company to repurchase shares could be reduced, at any time at the Company’s discretion. Any decision to reduce or discontinue repurchasing shares of our common stock pursuant to our 2022 Stock Repurchase Program could cause the market price for our common stock to decline and may negatively impact our reputation and investor confidence in us.

Table of Contents

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, 2022:


(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, 2022 - July 31, 2022	—	—		—	—
August 1, 2022 - August 31, 2022	—	—		—	—
September 1, 2022 - September 30, 2022	4,892,315	$	136.65	4,892,315	$	13,331
Total	4,892,315			4,892,315

(1) On September 8, 2022, our Board of Directors authorized our 2022 Stock Repurchase Program for up to $14.0 billion of our common stock through September 30, 2023. The amounts presented represent the remaining shares authorized for purchase under the 2022 Stock Repurchase Program as of the end of the period, of which approximately $2.3 billion is available for the remainder of 2022.

See Note 9 - Repurchases of Common Stock in the Notes to the Condensed Consolidated Financial Statements for more information about our 2022 Stock Repurchase Program.

Item 3. Defaults Upon Senior Securities

None.

Item 4. Mine Safety Disclosures

Not applicable.

Item 5. Other Information

None.

Table of Contents

Item 6. Exhibits

Incorporated by Reference

Exhibit No.

Exhibit Description

Form

Date of First Filing

Exhibit Number

Filed Herein

2.1*

Membership Interest Purchase Agreement, dated as of September 6, 2022, by and among Sprint LLC, Sprint Communications LLC, and Cogent Infrastructure, Inc.

8-K

9/7/2022

2.1

4.1

Indenture, dated as of September 15, 2022 by and among T-Mobile USA, Inc., the Company and Deutsche Bank Trust Company Americas, as trustee.

8-K

9/15/2022

4.1

4.2

First Supplemental Indenture, dated as of September 15, 2022, by and among T-Mobile USA, Inc., the Guarantors (as defined therein) and Deutsche Bank Trust Company Americas, as trustee, including the Form of 5.200% Senior Note due 2033.

8-K

9/15/2022

4.2

4.3

Second Supplemental Indenture, dated as of September 15, 2022, by and among T-Mobile USA, Inc., the Guarantors (as defined therein) and Deutsche Bank Trust Company Americas, as trustee, including the Form of 5.650% Senior Note due 2053.

8-K

9/15/2022

4.3

4.4

Third Supplemental Indenture, dated as of September 15, 2022, by and among T-Mobile USA, Inc., the Guarantors (as defined therein) and Deutsche Bank Trust Company Americas, as trustee, including the Form of 5.800% Senior Note due 2062.

8-K

9/15/2022

4.4

10.1*

License Purchase Agreement, dated as of August 8, 2022, by and among T-Mobile USA, Inc., T-Mobile License LLC and Channel 51 License Co LLC.

10.2*

License Purchase Agreement, dated as of August 8, 2022, by and among T-Mobile USA, Inc., T-Mobile License LLC and LB License Co, LLC.

10.3*

Third Amendment and Collateral Release, dated as of August 22, 2022, to the Credit Agreement, dated as of April 1, 2020, among T-Mobile USA, Inc., Deutsche Bank AG New York Branch, as administrative agent , and each of the issuing banks and lenders party thereto.

8-K

8/22/2022

10.1

22.1

Subsidiary Guarantors and Issuers of Guaranteed Securities.

31.1

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

31.2

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

32.1**

Certification of Chief Executive Officer Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

32.2**

Certification of Chief Financial Officer Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

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.

101.CAL

XBRL Taxonomy Extension Calculation Linkbase Document.

101.DEF

XBRL Taxonomy Extension Definition Linkbase Document.

101.LAB

XBRL Taxonomy Extension Label Linkbase Document.

101.PRE

XBRL Taxonomy Extension Presentation Linkbase.

104

Cover Page Interactive Data File (the cover page XBRL tags)



*						Schedules or similar attachments to this exhibit have been omitted pursuant to Item 601(a)(5) of Regulation S-K, and portions of this exhibit that are not material and that the registrant customarily and actually treats as private or confidential have been omitted pursuant to Item 601(b)(10)(iv) of Regulation S-K.
**						Furnished herein.

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 27, 2022						/s/ Peter Osvaldik
						Peter Osvaldik
						Executive Vice President and Chief Financial Officer
						(Principal Financial Officer and Authorized Signatory)

EXHIBIT 10.1


LICENSE PURCHASE AGREEMENT by and among T-MOBILE USA, INC., T-MOBILE LICENSE LLC, and CHANNEL 51 LICENSE CO LLC Dated as of August 8, 2022

TABLE OF CONTENTS

Page


ARTICLE 1 definitions			1
ARTICLE 2 PURCHASE AND SALE OF LICENSES			5
Section 2.1 Purchase and Sale of Seller Licenses			5
Section 2.2 No Assumption of Liabilities			7
Section 2.3 Closing			7
ARTICLE 3 REPRESENTATIONS AND WARRANTIES OF THE SELLER			8
Section 3.1 Organization			8
Section 3.2 Power and Authority			8
Section 3.3 Enforceability			9
Section 3.4 Non-Contravention			9
Section 3.5 Compliance With Laws			9
Section 3.6 Seller Licenses			10
Section 3.7 Litigation			11
Section 3.8 No Brokers			12
Section 3.9 Solvency and Debtor Relief Laws			12
Section 3.10 Disclaimer of Other Representations and Warranties			12
ARTICLE 4 REPRESENTATIONS AND WARRANTIES OF THE T-Mobile PARTIES			13
Section 4.1 Organization; Place of Business			13
Section 4.2 Power and Authority			13
Section 4.3 Enforceability			13
Section 4.4 Non-Contravention			13
Section 4.5 Litigation			14
Section 4.6 Qualification			14
Section 4.7 Available Funds			14
Section 4.8 Solvency and Debtor Relief Laws			15
Section 4.9 No Brokers			16
Section 4.10 Disclaimer of Other Representations and Warranties			16
ARTICLE 5 COVENANTS AND OTHER AGREEMENTS			16
Section 5.1 Covenants of the T-Mobile Parties and the Seller Pending the Closing			16
Section 5.2 Confidentiality			16
Section 5.3 Compliance with Law; Compliance with Licenses; Non-Solicitation; Updates			17
Section 5.4 Governmental Filings			18
Section 5.5 Withholding			19
Section 5.6 Existing Lease			20
ARTICLE 6 CONDITIONS TO CLOSING			20
Section 6.1 Conditions to the Obligations of the T-Mobile Parties			20
Section 6.2 Conditions to the Obligations of the Seller			21

- i -


ARTICLE 7 TERMINATION			22
Section 7.1 Termination			22
ARTICLE 8 SURVIVAL And indEMNIFICATION			24
Section 8.1 Survival			24
Section 8.2 General Indemnification Obligation			24
Section 8.3 Limitations			25
Section 8.4 Indemnification Procedures			26
Section 8.5 Treatment of Payments			27
Section 8.6 Exclusive Remedy			27
Section 8.7 Seller Assets			27
ARTICLE 9 MiSCELLANEOUS			27
Section 9.1 Assignment			27
Section 9.2 Further Assurances			28
Section 9.3 Entire Agreement; Amendment			28
Section 9.4 Waiver			29
Section 9.5 Notices			29
Section 9.6 Governing Law; Venue; Waiver of Jury Trial			30
Section 9.7 No Benefit to Others			31
Section 9.8 United States Dollars; Headings, Gender, “Person,” and “including”			31
Section 9.9 Severability			31
Section 9.10 Counterparts and Electronic Signatures			32
Section 9.11 Expenses			32
Section 9.12 Bulk Transfer Laws			32
Section 9.13 Construction of “Seller License”			32

- ii -

LICENSE PURCHASE AGREEMENT

THIS LICENSE PURCHASE AGREEMENT (this “Agreement”), dated as of August 8, 2022, is entered into by and among (i) T-MOBILE USA, INC., a Delaware corporation (“T-Mobile”), and T-MOBILE LICENSE LLC, a Delaware limited liability company (“T-Mobile License” and collectively with T-Mobile, 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.

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

WHEREAS, the Seller leases the Seller Licenses to T-Mobile License pursuant to a spectrum lease identified by ULS Application File No. 0009021213 (the “Existing Lease”);

WHEREAS, the Seller wishes to sell, and T-Mobile and T-Mobile License wishes to purchase, the Seller Licenses in the manner and subject to the terms and conditions set forth in this Agreement; and

WHEREAS, concurrently with the execution and delivery of this Agreement, the T-Mobile Parties and LB License Co, LLC (“LB License”) are entering a license purchase agreement (the “LB 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.

NOW, THEREFORE, in consideration of the promises 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.

“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.

“Bankruptcy Code” means title 11 of the United States Code, 11 U.S.C. §§101-1532, as amended from time to time.

“Burdensome Condition” has the meaning set forth on Schedule B.

“Burdensome Condition Expiration Date” has the meaning set forth in Section 7.1(a)(vi).

“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.

“Cash” means cash in Dollars.

“Channel 51” has the meaning set forth in the preamble.

“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.

“Debtor Relief Laws” means the Bankruptcy Code, and all other liquidation, conservatorship, bankruptcy, general assignment for the benefit of creditors, moratorium, rearrangement, receivership, examinership, insolvency, reorganization, or similar debtor relief Laws of the United States or other applicable jurisdictions from time to time in effect and affecting the rights of creditors generally.

“Deferred Payment Date” has the meaning set forth in Section 2.1(b)(ii).

“Delaware Courts” has the meaning set forth in Section 9.6.

“Disclosure Schedule” has the meaning set forth in Article 3.

“DOJ” means the United States Department of Justice.

“Existing Lease” has the meaning set forth in the recitals.

“FCC” means the Federal Communications Commission or any successor entity thereto.

“FCC Applications” has the meaning set forth in Section 5.4(a).

“FCC Consent” means the requisite consent or consents of the FCC to permit the assignment by the Seller to T-Mobile License (or its designee in accordance with Section 9.1(b)) of the Seller Licenses.

“FCC Order” means a written action or order by the FCC or any of its bureaus.

“FCC Order Condition” has the meaning set forth in Section 6.1(a).

“FCC Rules” means the rules, regulations and orders of the FCC.

(ii) 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, (iii) 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 (iv) 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.

“FTC” means the United States Federal Trade Commission.

“Governmental Authority” means a federal, state or local court, legislature, governmental agency, commission or regulatory or administrative authority or instrumentality.

“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).

“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.

“LB License” 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.

“Lien” means any mortgage, lien, pledge, charge, security interest, easement, conditional sales contract, reversionary interest, transfer restriction (other than transfer restrictions arising under the FCC Rules), right of first refusal, voting trust agreement, preemptive right, or other adverse claim or defect of title.

“Losses” has the meaning set forth in Section 8.2(a).

“Material Affiliates” has the meaning set forth in Section 4.8(a).

“NDA” has the meaning set forth in Section 5.2(a).

“NSA” has the meaning set forth in Section 3.4.

“Outside Date” has the meaning set forth in Section 7.1(a)(iv).

“Party(ies)” has the meaning set forth in the preamble.

“Person” has the meaning set forth in Section 9.8.

“Post-Closing Purchase Price Payment” has the meaning set forth in Section 2.1(b)(ii).

“Purchase Price” has the meaning set forth in Section 2.1(b).

“Seller” has the meaning set forth in the preamble.

“Seller Licenses” has the meaning set forth in the recitals.

“Solvent” has the meaning set forth in Section 4.8(a).

“Subsidiaries” means, as to any Person, the Affiliates of such Person that, directly or indirectly, are controlled by such Person.

“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 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.

“Unjust Enrichment Amount” means the reimbursement amount, plus interest, determined by the FCC pursuant to 47 C.F.R. § 1.2111(b) for the assignment of the Seller Licenses on the Closing Date, as provided by the FCC prior to the Closing Date.

ARTICLE 2
PURCHASE AND SALE OF LICENSES

Section 2.1Purchase and Sale of Seller Licenses

(a)At the Closing, the Seller 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 (other than conditions and limitations placed on the Seller Licenses by the FCC that are generally applicable to 600 MHz licenses), and T-Mobile License shall purchase, and T-Mobile shall cause T-Mobile License to purchase (or, subject to Section 9.1, cause the applicable Affiliate of T-Mobile to purchase) from the Seller, all right, title and interest of the Seller in and to the Seller Licenses (as set forth on Schedule A).

(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 Eight Hundred Eighty-Four Million Three Hundred Fifty-Three Thousand Three Hundred Two and 60 / 100 Dollars ($1,884,353,302.60), less the applicable prepaid amount under the Existing Lease in accordance with Section 5.6(b) (the “Purchase Price”), which shall be payable as follows:

(i)at the Closing, to the U.S. Government, an amount equal to the Unjust Enrichment Amount (by wire transfer of immediately available funds to the U.S. Government’s account for such purpose); and

(ii)on or prior to the date that is forty (40) days after the Closing Date (the “Deferred Payment Date”), to the Seller, an amount in Cash equal to the Purchase Price minus the Unjust Enrichment Amount (the “Post-Closing Purchase Price Payment”), by wire transfer of immediately available funds to such account(s) as the Seller shall designate no later than three (3) Business Days prior to such payment date. In no event shall the Purchase Price be pro-rated or adjusted if Closing occurs but not all Seller Licenses are assigned to T-Mobile License (or, subject to Section 9.1, an Affiliate of T-Mobile designated by T-Mobile) at Closing because a Burdensome Condition was imposed and T-Mobile failed to exercise its termination right set forth in Section 7.1(a)(vi) prior to the applicable Burdensome Condition Expiration Date.

(iii) Notwithstanding anything to the contrary in this Agreement:

(A)Each T-Mobile Party hereby irrevocably and unconditionally accepts, not merely as a surety but also as a co-debtor, joint and several liability hereunder in consideration of the agreements provided by the Seller under this Agreement, for the mutual benefit, directly and indirectly, of each T-Mobile Party and in consideration of the undertakings of the T-Mobile Parties to accept joint and several liability for the Purchase Price and all other obligations from time to time owing by the T-Mobile Parties to the Seller under this Agreement. Accordingly, each T-Mobile Party hereby waives any and all suretyship defenses with respect to the obligations of the other T-Mobile Party under this Agreement that would otherwise be available to such T-Mobile Party under applicable law.

(B)Subject to the occurrence of the Closing, the T-Mobile Parties’ obligation to pay the Post-Closing Purchase Price Payment and any other amounts that may become payable to the Seller pursuant to this Section 2.1(b)(iii) is absolute and unconditional and is not subject to any abatement, counterclaim, defense, deferment, interruption, recoupment, reduction, or setoff (including in connection with any indemnity or other claims under Article 8) for any reason whatsoever; provided that the foregoing shall not limit the rights of the T-Mobile Parties under Article 8 or otherwise under this Agreement.

(C)The Parties acknowledge that the obligation of the T-Mobile Parties to pay the Post-Closing Purchase Price Payment on the Deferred Payment Date is an integral part of the transactions contemplated by this Agreement and that, without these agreements, AND WITHOUT THE AGREEMENTS TO CONFESS JUDGMENT SET FORTH IN EXHIBIT B-1 (WHICH ARE INCORPORATED INTO AND ARE AN INTEGRAL PART OF THIS SECTION 2.1(b)(iii)(C)), THE SELLER WOULD NOT ENTER INTO THIS AGREEMENT.

(D)In addition to all other remedies available to the Seller hereunder, if the Post-Closing Purchase Price Payment is not paid in full in Cash to the Seller on or prior to the Deferred Payment Date, upon the request of the Seller (in its sole discretion), the T-Mobile Parties shall cooperate in good faith with the Seller, and take all steps necessary, proper or advisable, in each case subject to the receipt of all applicable consents, approvals and/or clearances of the FCC and other Governmental Authorities as described in this Section 2.1(b)(iii)(D), to assign (including to assign legal title to) the Seller Licenses back to the Seller and/or provide the Seller with all rights with respect thereto (including pursuant to a lease arrangement) as soon as reasonably practicable after receipt of such notice from the Seller, make any necessary filings with the FCC or other Governmental Authorities to seek the FCC’s or any other Governmental Authority’s consent to such assignment (including if necessary to seek the expiration or termination of

any applicable HSR waiting period related to such transfer), and use reasonable best efforts to obtain such consents (or expiration or termination of such waiting period), and to pay all filing fees due to any Governmental Authority in connection with such necessary filings. The Seller shall be entitled to make the foregoing request of T-Mobile at any time occurring after the Deferred Payment Date but prior to the date that the Seller receives the Post-Closing Purchase Price Payment and any other amounts payable to the Seller pursuant to this Section 2.1, in each case in Cash in full. Notwithstanding any assignment of the Seller Licenses back to the Seller, the T-Mobile Parties shall pay the reasonable and documented out-of-pocket fees, costs and expenses incurred by the Seller and its Affiliates in connection with the assignment of the Seller Licenses back to the Seller (including but not limited to legal fees, costs, and expenses related to making any required filings with any Governmental Authority and obtaining the expiration or termination of any required waiting periods in connection with the transfer of the Seller Licenses back to the Seller). Notwithstanding anything to the contrary in this Agreement, in the event that the Seller exercises its rights pursuant to this Section 2.1(b)(iii)(D), upon the assignment to the Seller of the Seller Licenses or the rights with respect to the Seller Licenses (including pursuant to a lease arrangement), the Seller shall return to T-Mobile or its applicable Affiliate (as designated by T-Mobile) any amounts paid to the Seller pursuant to this Agreement, including any portion of the Purchase Price, except for the payment of the Seller’s reasonable and documented out-of-pocket fees, costs and expenses as contemplated hereby, and the Seller shall have no further remedy under this Agreement or with respect to the transactions contemplated hereby; provided that, for the avoidance of doubt, in no event shall the Seller be required to return the Unjust Enrichment Amount or any other amount paid to any U.S. Governmental Authority or Person other than the Seller (or the Person or Persons the Seller designates to receive payment in accordance with Section 2.1(b)(ii)) pursuant to or in connection with this Agreement.

(E)The remedies set forth in this Section 2.1(b) and elsewhere in this Agreement shall be cumulative and not the exclusive remedies of the Seller if the Post-Closing Purchase Price Payment is not paid in full in Cash on or prior to the Deferred Payment Date and nothing in this Section 2.1(b) shall preclude the Seller from also seeking any other remedy, including damages, available at law, in equity or otherwise; provided that, for the avoidance of doubt and notwithstanding anything in this Agreement to the contrary, in no event shall the Seller be entitled to receive both an assignment back of the Seller Licenses or rights (including leasehold rights) thereto in accordance with Section 2.1(b)(iii)(D) and the Post-Closing Purchase Price Payment. For the avoidance of doubt, if the consent of any Governmental Authority is required as a condition to assign the Seller Licenses back to the Seller pursuant to Section 2.1(b)(iii)(D) and such consent is not obtained, the Seller’s election to receive such assignment back of the Seller Licenses pursuant to Section 2.1(b)(iii)(D) shall be deemed irrevocably revoked and the Seller shall continue to be entitled to receive the Post-Closing Purchase Price Payment in Cash in full.

Section 2.2No Assumption of Liabilities

INCURRED, OR OTHERWISE PERTAIN TO ACTIONS, EVENTS OR CIRCUMSTANCES OCCURRING OR EXISTING PRIOR TO THE CLOSING WITH RESPECT TO THE SELLER LICENSES OR OTHERWISE. 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 SELLER LICENSES.

Section 2.3Closing

(a)Unless this Agreement shall have been earlier terminated in accordance with the provisions of this Agreement, the closing of the transactions contemplated by this Agreement (the “Closing”) shall be consummated via electronic document exchange at 10:00 a.m. Eastern time (i) on the date designated by T-Mobile that is not more than one hundred forty (140) days after the satisfaction or T-Mobile’s waiver in writing of the FCC Order Condition (and on not less than three (3) Business Days prior written notice from T-Mobile to the Seller), but subject to the satisfaction or waiver of the conditions set forth in Article 6, or (ii) at such other time or place as may be agreed upon in writing by T-Mobile and the Seller. The date of the Closing is referred to herein as the “Closing Date”.

(b)At the Closing, the Seller shall deliver to the T-Mobile Parties: (i) with respect to the Seller Licenses, an instrument of assignment in the form attached hereto as Exhibit A, executed by the Seller; and (ii) the closing certificate required to be delivered pursuant to Section 6.1(d), executed by an authorized representative of the Seller.

(c)Subject to the last sentence of this Section 2.3(c), at the Closing, the T-Mobile Parties shall deliver to the Seller: (i) with respect to the Seller Licenses, an instrument of assignment in the form attached hereto as Exhibit A, executed by T-Mobile License (or, subject to Section 9.1, an Affiliate of T-Mobile designated by T-Mobile); (ii) A CONFESSION OF JUDGMENT AFFIDAVIT, IN THE FORM ATTACHED HERETO AS EXHIBIT B-2, EXECUTED BY EACH OF THE T-MOBILE PARTIES (INCLUDING ANY ASSIGNEE OR AFFILIATES OF T-MOBILE THAT EXECUTES A JOINDER TO THIS AGREEMENT PURSUANT TO SECTION 9.1(b)); and (iii) the closing certificate required to be delivered pursuant to Section 6.2(d), executed by an authorized officer of each of the T-Mobile Parties. Notwithstanding the foregoing, to the extent that, subject to Section 9.1, an Affiliate of T-Mobile designated by T-Mobile is to receive assignment of the Seller Licenses, such designated Affiliate shall also be made a party (in addition to the T-Mobile Parties) and execute the deliverables set forth in clauses (ii)-(iii) of this Section 2.3(c) as a condition to the Seller’s obligation to consummate the Closing.

ARTICLE 3
REPRESENTATIONS AND WARRANTIES OF THE SELLER

Except as set forth in the Schedules delivered by the Seller to the T-Mobile Parties on the date hereof (the “Disclosure Schedule”) (it being agreed that any matter disclosed in a Schedule with respect to any Section shall be deemed to have been disclosed with respect to any other Section to the extent its relevance and applicability to such Section is reasonably apparent from the wording of such disclosure), the Seller hereby represents and warrants to the T-Mobile Parties as follows:

Section 3.1Organization

The Seller is a limited liability company, duly formed and validly existing under the laws of the State of Delaware.

Section 3.2Power and Authority

The Seller has the requisite limited liability company power and authority to execute, deliver and perform this Agreement and the other Transaction Documents to which it is, or will be, a party and to consummate the transactions contemplated hereby. The execution, delivery and performance by the Seller of this Agreement and all the other Transaction Documents required to be executed and delivered by the Seller in accordance with the provisions of this Agreement have been duly authorized by all necessary limited liability company action on the part of the Seller. This Agreement has been, and the other Transaction Documents to which the Seller is a party have been, or will be, duly executed and delivered by the Seller.

Section 3.3Enforceability

This Agreement constitutes, and the other Transaction Documents to which the Seller is a party constitute or will constitute, the legal, valid and binding obligations of the Seller, enforceable against the 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 or state Governmental Authorities and except for the Unjust Enrichment Amount payment obligation noted in the Disclosure Schedule, the execution, delivery and performance by the Seller of this Agreement and the other Transaction Documents to which the Seller 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 the Seller or the Seller Licenses is subject (except as may be required by the T-Mobile Parties’ circumstances), (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 the Seller or any of the Seller Licenses, (c) the limited liability company agreement or other governing documents of the Seller, or (d) any material mortgage, indenture, agreement (including, but not limited to the Letter of Agreement from Paul Chisholm, Managing Member, Channel 51, LLC, to Assistant Attorney General for National Security, DOJ, dated June 22, 2018 (the “NSA”)), contract, commitment, lease, plan, license or other instrument, document or understanding, oral or written, to which the Seller is a party or subject, by which the Seller may have rights or by which any of the Seller 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 the Seller thereunder.

Section 3.5Compliance With Laws

The Seller 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 Seller Licenses, including the FCC Rules. For clarity, without limiting the representations and warranties in Section 3.4, no representation or warranty is made under this Section 3.5, Section 3.6, Section 3.7 or elsewhere under this Agreement regarding the absence or results of any investigation or challenge brought by any Governmental Authority following the date hereof or the Closing Date on the grounds that the sale of the Seller Licenses to T-Mobile License (or, subject to Section 9.1, another Affiliate of T-Mobile designated by T-Mobile) or other transactions contemplated hereby would require registration, declaration or filing with such Governmental Authority or violate any antitrust law.

Section 3.6Seller Licenses

(a)Each of the Seller Licenses has been validly issued, is in full force and effect, is validly held by the Seller, is free and clear of conditions or restrictions, other than those routinely imposed in conjunction with FCC licenses of a similar type or as noted in the Disclosure Schedule, and was granted to the Seller by Final Order. Each of the Seller Licenses is free and clear of all Liens. At the Closing, each of the Seller Licenses will be free and clear of all Liens. The Seller has not used or granted any of the Seller Licenses or granted any rights therein, except in accordance with the Existing Lease or as noted in the Disclosure Schedule.

(b)Except for the Existing Lease, none of the spectrum covered by the Seller 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)Except as noted in the Disclosure Schedule, there are no existing applications, petitions to deny or complaints or proceedings pending or, to the Seller’s knowledge, threatened, before the FCC or any other tribunal, governmental authority or regulatory agency relating to any of the Seller Licenses or which otherwise will or would reasonably be expected to impair any Seller License, other than matters of public record pertaining to the Existing Lease and proceedings affecting the wireless telecommunications industry or 600 MHz licenses or licensees generally. No governmental authority or regulatory agency has, to the Seller’s knowledge, threatened to terminate or suspend any of the Seller Licenses. There are no third-party claims of any kind that have been asserted with respect to any of the Seller Licenses. The Seller is not in violation or default and has not received any notice of any claim of violation or default, with respect to any of the Seller Licenses. No event has occurred with respect to any of the Seller Licenses that permits, or after notice or lapse of time or both would permit, revocation or termination thereof or that will or would reasonably be expected to result in any violation or default, claim of violation or default or impairment of the rights of the Seller, as the holder of the Seller Licenses.

(d)Each Seller License is held solely by the Seller, as set forth on Schedule A. Except as set forth in the Existing Lease, no shareholder, officer, employee or former employee of the Seller or any Affiliate thereof, or any other Person, holds or has any proprietary, financial or other interest (direct or indirect) in, or any authority to use, or any other right or claim in or to, any of the Seller Licenses.

(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 Seller Licenses. Except for the Seller Licenses, with respect to which all Liabilities will be satisfied in full upon the payment of the Unjust Enrichment Amount to the U.S. Government, the consummation of the transactions contemplated hereunder will not cause the FCC to impose any unjust enrichment penalties pursuant to 47 C.F.R. §1.2111.

(f)The Seller has no reason to believe that any of the Seller Licenses will not be renewed in the ordinary course. Except for the Unjust Enrichment Amount payment obligation noted in the Disclosure Schedule, none of the Seller Licenses will be impaired by the consummation of the transactions contemplated hereby. The Seller is not aware 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 Seller License, (ii) seeks the imposition of any adverse modification or amendment with respect to any Seller License, (iii) seeks the payment of a fine, sanction, penalty, damages or contribution in connection with the use of any Seller License, or (iv) in any other way would reasonably be expected to impair the Seller Licenses (taken as whole), other than matters of public record pertaining to the Existing Lease

and proceedings affecting the wireless communications industry or 600 MHz licenses or licensees generally.

(g)Except for the Unjust Enrichment Amount payment obligation noted in the Disclosure Schedule, there are no liabilities of the Seller 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 Seller License or otherwise to which the T-Mobile Parties or any of their Affiliates will be subject from and after the Closing as a result of the consummation of the transactions contemplated hereby or otherwise.

(h)With respect to each Seller License, (i) all material documents required to be filed at any time by the Seller with the FCC or pursuant to the NSA with respect to such Seller 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 Seller License was first issued or transferred to the Seller or any Affiliate thereof are correct in all material respects. None of the Seller Licenses are subject to any conditions other than those appearing on the face of the Seller Licenses and those imposed by the FCC Rules upon the wireless communications services industry generally or upon 600 MHz licenses or licensees generally. Except for the payment of the Unjust Enrichment Amount, there are no obligations to make any payments to the FCC associated with any Seller License, nor will the consummation of the transactions contemplated hereby cause 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 the Seller or any of its past or current Affiliates received from the FCC in connection with any Seller License.

(i)The Seller 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 Seller 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 the Seller Licenses in particular, (ii) the FCC Rules restricting foreign ownership of common carrier radio licenses and (iii) the NSA. The Seller is in material compliance with all terms and conditions of, and all of its obligations under, each Seller License.

Section 3.7Litigation

Except for matters of public record pertaining to the Existing Lease and 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 the Seller’s knowledge, threatened against the Seller or any Affiliate thereof that would reasonably be expected to impair any of the Seller Licenses, or that seeks to enjoin this Agreement or the transactions contemplated hereby or otherwise prevent the Seller from performing its obligations under this Agreement or consummating the transactions contemplated hereby. Neither the Seller 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 impairs any of the Seller Licenses or that would prevent or would reasonably be expected to delay or impair the ability of the Seller to consummate the transactions contemplated by this Agreement or otherwise perform its obligations hereunder.

Section 3.8No Brokers

The Seller 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.

Section 3.9Solvency and Debtor Relief Laws

(a)The Seller is Solvent as of the date of this Agreement and will, after giving effect to the transactions contemplated by this Agreement, the receipt of the Purchase Price when due (assuming timely payment thereof by the T-Mobile Parties), and the payment of all related fees and expenses, be Solvent at and immediately after the Closing and the Deferred Payment Date. No case, proceeding or process in which the Seller is a debtor, defendant or party seeking an order for its own relief or reorganization has been brought or is pending, or to the knowledge of the Seller, threatened, by or against the Seller under any Debtor Relief Laws. The Seller has not taken any action in contemplation of, or that would constitute the basis for, the institution of any such case, proceeding or process.

(b)The Seller has no intention of, and is not contemplating, seeking relief under any Debtor Relief Laws within one hundred eighty (180) days after the Closing.

(c)The Seller has structured the transactions contemplated by this Agreement in good faith, as it relates to Debtor Relief Laws.

(d)The Seller acknowledges and agrees that the representations and warranties contained in this Section 3.9 constitute a material inducement to the T-Mobile Parties to enter into this Agreement and the transactions contemplated by this Agreement, and that the T-Mobile Parties would not have entered into this Agreement and the transactions contemplated by this Agreement absent the representations and warranties contained in this Section 3.9.

Section 3.10Disclaimer of Other Representations and Warranties

EXCEPT AS EXPRESSLY SET FORTH IN ARTICLE 3 OF THIS AGREEMENT, THE SELLER DOES NOT MAKE ANY OTHER REPRESENTATIONS OR WARRANTIES WHATSOEVER, EXPRESS OR IMPLIED, AT LAW OR IN EQUITY, WITH RESPECT TO THE SELLER LICENSES IN CONNECTION WITH THE TRANSACTIONS CONTEMPLATED HEREBY. THE SELLER ACKNOWLEDGES AND AGREES THAT, EXCEPT AS EXPRESSLY SET FORTH IN ARTICLE 4 OF THIS AGREEMENT, THE T-MOBILE PARTIES DO NOT MAKE, AND THE SELLER HEREBY DISCLAIMS, ANY OTHER REPRESENTATIONS OR WARRANTIES WHATSOEVER, EXPRESS OR IMPLIED, AT LAW OR IN EQUITY, WITH RESPECT TO THE TRANSACTIONS CONTEMPLATED HEREBY.

ARTICLE 4
REPRESENTATIONS AND WARRANTIES OF THE T-MOBILE PARTIES

Each T-Mobile Party jointly and severally hereby represents and warrants to the Seller as follows:

Section 4.1Organization; Place of Business

Each T-Mobile Party is a corporation or limited liability company, as the case may be, duly organized and validly existing under the laws of the State of Delaware.

Section 4.2Power and Authority

such T-Mobile Party in accordance with the provisions of this Agreement have been duly authorized by all necessary corporate or limited liability company, as applicable, 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

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 or state Governmental Authorities, 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, (i) any Law to which either T-Mobile Party is subject (except as may be required by the Seller’s circumstances), (ii) 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, (iii) the articles of incorporation, certificate of formation, bylaws, operating agreement or similar organizational documents of either T-Mobile Party, or (iv) any credit agreement or 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 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 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 prevent or would reasonably be expected to impair or delay the ability of either T-Mobile Party to consummate the transactions contemplated by this Agreement or otherwise perform either of their obligations hereunder.

Section 4.6Qualification

(c) to be approved as the assignee of the Seller 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 (a) will have available to them unrestricted cash on hand or other immediately available sources 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 and to satisfy all other monetary and other obligations of the T-Mobile Parties under this Agreement, (b) will have at Closing or the Deferred Payment Date, as applicable, the resources and capabilities (financial or otherwise) to perform its obligations to be performed on such date and (c) have not, and will not have as of the Closing or at any time between Closing and the Deferred Payment Date, incurred any obligation, commitment, restriction or liability of any kind, absolute or contingent, present or future, which would render unavailable the resources and capabilities necessary to satisfy the T-Mobile Parties’ payment obligations under this Agreement when due. The T-Mobile Parties are not in breach or default (nor has any event occurred which with notice, lapse of time, or both would constitute a breach of, or default) under any credit agreement or material mortgage, indenture, agreement, contract, commitment, lease, plan, license or other instrument, document or understanding, oral or written, related to indebtedness to which either T-Mobile Party is a party or subject, in each of the foregoing cases, in a manner that would, or to the knowledge of the T-Mobile Parties, reasonably could be expected to, prevent, impair or delay the T-Mobile Parties’ ability to satisfy their payment obligations under this Agreement when due. There are no other facts or circumstances that would, or to the knowledge of the T-Mobile Parties, reasonably could be expected to, prevent, impair or delay the T-Mobile Parties’ ability to satisfy their payment obligations under this Agreement when due. The T-Mobile Parties expressly acknowledge and agree that their obligations under this Agreement, including their obligations to pay the Purchase Price and to consummate the transactions contemplated hereby or any of the other transactions contemplated by this Agreement, are not subject to, or conditioned on, the receipt or availability of any funds or financing.

Section 4.8Solvency and Debtor Relief Laws

(a)The T-Mobile Parties and their respective Material Affiliates (on a consolidated basis) and each T-Mobile Party and its respective Material Affiliates (each on a stand-alone basis): (i) is Solvent as of the date of this Agreement; and (ii) will be Solvent immediately after (x) the date of this Agreement, after giving effect to the execution of this Agreement and taking into account the obligations of the T-Mobile Parties under this Agreement, and (y) each of the Closing and the Deferred Payment Date, in each case after giving effect to the transactions contemplated by this Agreement (including the payment of the Purchase Price and any other amounts required to be paid in connection with the transactions contemplated by this Agreement when due and the payment of all related fees and expenses). As of each of the date of this Agreement and the Closing Date, (x) no case, proceeding or process in which either T-Mobile Party or any of its respective Material Affiliates is a debtor, defendant or Person seeking an order for its own relief or reorganization under any Debtor Relief Laws has been brought or pending, or to the knowledge of the T-Mobile Parties has been threatened by or against a T-Mobile Party or any of its respective Material Affiliates, and (y) neither T-Mobile Party nor any of its respective Material Affiliates have taken any action in contemplation of, or that would constitute the basis for, the institution of any such case, proceeding or process. As used in this Agreement, the term “Solvent” shall mean, with respect to a particular date, that on such date, (A) the sum of the assets, at a fair valuation, of the applicable person or persons will exceed its or their debts, (B) such person or persons have not incurred and do not intend to incur, and do not believe that it or they will incur, debts beyond its or their ability to pay such debts as such debts mature, and

(C) the applicable person or persons will have sufficient capital and liquidity with which to conduct its or their business. For purposes of this Section 4.8 and Section 3.9, (x) “claim” has the meaning ascribed to such term in section 101(5) of the Bankruptcy Code, (y) “debt” has the meaning ascribed to such term in section 101(12) of the Bankruptcy Code and (z) “Material Affiliates” shall mean each of the Subsidiaries of T-Mobile with consolidated total assets of such Subsidiary and its Subsidiaries, as set forth on the most recent balance sheet of such Subsidiary prepared in accordance with GAAP, equal to or greater than 5.0% of the consolidated total assets of T-Mobile.

(b)None of the T-Mobile Parties has any intention of, and is not contemplating, seeking relief under any Debtor Relief Laws within 180 days after the Closing.

(c)Each of the T-Mobile Parties has structured the transactions contemplated by this Agreement in good faith, as it relates to Debtor Relief Laws.

(d)Each T-Mobile Party acknowledges and agrees that the representations and warranties contained in this Section 4.8 constitute a material inducement to the Seller to enter into this Agreement and the transactions contemplated by this Agreement, and that the Seller would not have entered into this Agreement and the transactions contemplated by this Agreement absent the representations and warranties contained in this Section 4.8.

Section 4.9No 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 the Seller or any Affiliate thereof could become liable or obligated.

Section 4.10Disclaimer of Other Representations and Warranties

EXCEPT AS EXPRESSLY SET FORTH IN ARTICLE 4 OF THIS AGREEMENT, THE T-MOBILE PARTIES DO NOT MAKE ANY OTHER REPRESENTATIONS OR WARRANTIES WHATSOEVER, EXPRESS OR IMPLIED, AT LAW OR IN EQUITY, WITH RESPECT TO THE TRANSACTIONS CONTEMPLATED HEREBY. THE T-MOBILE PARTIES ACKNOWLEDGE AND AGREE THAT, EXCEPT AS EXPRESSLY SET FORTH IN ARTICLE 3 OF THIS AGREEMENT, THE SELLER DOES NOT MAKE, AND THE T-MOBILE PARTIES HEREBY DISCLAIM, ANY OTHER REPRESENTATIONS OR WARRANTIES WHATSOEVER, EXPRESS OR IMPLIED, AT LAW OR IN EQUITY, WITH RESPECT TO THE SELLER LICENSES IN CONNECTION WITH THE TRANSACTIONS CONTEMPLATED HEREBY.

ARTICLE 5
COVENANTS AND OTHER AGREEMENTS

Section 5.1Covenants of the T-Mobile Parties and the Seller Pending the Closing

From the date hereof until the Closing, subject to each Party’s rights under this Agreement, each Party shall use its reasonable best 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 as soon as reasonably practicable after the date hereof and in any event by or before the Outside Date.

Section 5.2Confidentiality

(a)The Nondisclosure Agreement effective as of March 28, 2022 between T-Mobile and Channel 51, LLC (the “NDA”) shall remain in effect in accordance with its terms, and the Seller agrees that it is bound by the terms and conditions of the NDA to the same extent as Channel 51, LLC.

(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), (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 (including in connection with the making of any required filings or notifications to a Governmental Authority concerning the transactions described herein or in responding to any requests for information or documents made by a Governmental Authority investigating the transactions described herein) 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 and (iii) each Party shall have the right to make disclosure of the Transaction Information (as defined in the NDA) with respect to this Agreement, the Transaction Documents or the transactions contemplated hereby or by the other Transaction Documents in connection with any proceeding related to the enforcement of this Agreement, including without limitation, the Seller’s right to confess judgement against the T-Mobile Parties pursuant to Section 2.1(b)(iii)(C). Notwithstanding the foregoing, no Party has to share in advance any filings made in connection with the transactions described herein under the HSR Act including any attachments thereto.

Section 5.3Compliance with Law; Compliance with Licenses; Non-Solicitation; Updates

(a)Compliance with Law. From the date hereof until the earlier to occur of the Closing and the termination of this Agreement in accordance with the provisions of Section 7.1, the Seller shall, and shall cause its controlled Affiliates to, comply in all material respects with all Laws to the extent that they relate to any of the Seller Licenses.

(b)Compliance with Licenses. From the date hereof until the earlier to occur of the Closing or the termination of this Agreement in accordance with the provisions of Section 7.1, (i) the Seller shall maintain all of its rights and interest in, and the validity of, the Seller Licenses, and shall not, and shall cause its controlled Affiliates not to, engage in any transaction or take any action or omit to take any action that will or would reasonably be expected to adversely affect its rights or interest in, or the validity of, the Seller Licenses, and (ii) the Seller 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 the Seller Licenses. Without limiting the foregoing, from the date hereof until the earlier to occur of the Closing and the termination of this Agreement in accordance with the provisions of Section 7.1 the Seller shall not seek the modification of any of the Seller Licenses without the prior written consent of T-Mobile.

the agents and representatives of the Seller and its Subsidiaries not to, directly or indirectly, sell, transfer, assign or otherwise dispose of any of the Seller Licenses or enter into any agreement, arrangement or understanding, solicit inquiries or proposals, furnish non-public information or initiate or participate in any negotiations or discussions whatsoever with respect to any of the foregoing transaction.

(d)Notice of Certain Events. Each Party shall promptly notify the other in writing of (i) 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 causing any of the representations and warranties of such Party in Article 3 or Article 4, as applicable, such that the conditions set forth in Section 6.1(b) or Section 6.2(b) would not be satisfied. No disclosure by either Party pursuant to this Section 5.3(d), however, shall be deemed to amend or supplement this Agreement or to prevent or cure any misrepresentation by such Party herein, unless the other Party shall have expressly so agreed in writing.

Section 5.4Governmental Filings

(a)As soon as practicable after the date of this Agreement, the Parties shall file with the FCC all applications necessary to obtain the FCC Consent (the “FCC Applications”). The Parties shall use their respective commercially reasonable efforts to file the FCC Applications within twenty (20) Business Days after the date of this Agreement. The Parties shall cooperate in the diligent submission of any additional information requested by the FCC with respect to the FCC Applications, and will use (and cause their respective Affiliates to use) their respective reasonable best efforts to take all steps necessary, proper or advisable to obtain the FCC Consent as soon as reasonably practicable after the filing date and, subject to Section 5.4(d), without any Burdensome Conditions. Without limiting the foregoing, once obtained, the Parties shall use their respective reasonable best efforts to (x) have the FCC remove conditions on the Seller Licenses associated with the Seller’s commitments and undertakings pursuant to the NSA and (y) maintain the effectiveness of the FCC Consent until the earlier of the Closing or the termination of this Agreement in accordance with its terms, including by cooperating to make such filings and taking such actions as may be necessary to extend the effectiveness of the FCC Consent. As soon as practicable after the date of this Agreement, the Seller shall request that the DOJ request in writing that the FCC remove upon Closing the condition on the Seller Licenses regarding compliance with the NSA and the Seller shall reasonably cooperate with, and reasonably provide information and respond to requests by, DOJ and the FCC in connection with this request to remove the license condition.

(b)At such time as the Parties agree in good faith (with a view to consummating the transactions contemplated hereby as promptly as practicable, subject to each Party’s rights under this Agreement), but in no event later than five (5) Business Days after the FCC Consent shall have been obtained, the Parties shall, or shall cause their ultimate parent entity as that term is defined in the HSR Act to, 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, including any documents required to be filed in connection therewith (the “HSR Notice”). The HSR Notice shall specifically request early termination of the waiting period prescribed by the HSR Act, if applicable. The Parties shall cooperate in the diligent submission of any supplemental information requested by the FTC or the DOJ with respect to the HSR Notice.

(c)Each Party shall, and shall cause its Affiliates 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 or in Section 9.1(b), including by (i) providing upon request 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 proceeding by a private party relating to the approval of the transactions contemplated hereby by any Governmental Authority. To the extent practicable under the circumstances, neither Party nor 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 either 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 either Party is required 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. Subject to applicable Law, the Parties will consult and cooperate with each other in connection with any analyses, appearances, presentations, memoranda, briefs, arguments, and proposals made or submitted to any Governmental Authority regarding the transactions contemplated by this Agreement by or on behalf of any Party.

(d)In the event that at any time after the date hereof any of the Seller or the T-Mobile Parties, or any of their respective Affiliates, enters into any transaction or takes some other action that could have the effect of delaying, preventing or otherwise impeding the receipt of any regulatory approvals necessary to effect the transactions contemplated hereby, such Party or Parties shall use its or their reasonable best efforts to eliminate or otherwise mitigate as fully as possible any such adverse effect on obtaining such approvals; provided that 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 T-Mobile Party or any of its Affiliates to enter into a spectrum auction or acquire spectrum at auction. Furthermore, the undertakings set forth in Schedule B are incorporated into and are an integral part of this Section 5.4(d).

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. The T-Mobile Parties shall consult in good faith with the Seller in determining whether any such deduction or withholding is required. 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.

Section 5.6Existing Lease

(a)Until the earlier of the Closing or the termination of this Agreement in accordance with its terms, the Parties shall, and shall cause their controlled Affiliates, to take all such actions as are necessary to maintain the Existing Lease in full force and effect on its current terms, including (i) extending the terms of the Existing Lease following execution of this Agreement no later than thirty (30) days prior to the expiration of its then-current terms, (ii) not giving any notice of termination under the Existing Lease and (iii) making such filings with the FCC, in good faith cooperation with the other Parties, as may be necessary in connection with the foregoing.

(b)Effective as of the earlier to occur of Closing and the termination of this Agreement in accordance with Section 7.1(a)(vi), notwithstanding anything in the Existing Lease to the contrary, the Existing Lease automatically shall terminate in full and be of no further force or effect such that, subject to the following sentence, no Party or any of its Affiliates will have any further Liability thereunder, and the Parties shall, and shall cause their Affiliates to, take all such actions as are necessary to effect such termination. Any amount prepaid by the T-Mobile Parties or their Affiliates, solely with respect to the prepayment period (which shall be no longer than six (6) months) that commences prior to the Closing Date and ends after the Closing Date under the Existing Lease, if any (which amount shall be calculated by prorating the number of days elapsed following the Closing Date in the applicable period), shall reduce the amount of the Purchase Price, and any amounts unpaid by the T-Mobile Parties or their Affiliates with respect to the period occurring prior to the Closing Date shall be paid on the Closing Date.

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 is subject to the satisfaction on or prior to the Closing Date of each of the following conditions, unless waived in writing by T-Mobile (or deemed waived pursuant to Section 7.1(a)(vi)):

(a)The FCC Consent shall have been obtained by one or more FCC Orders and forty (40) days have passed since the issuance of such FCC Orders (without regard to publication in the Federal Register or to status as to Final Order) (the “FCC Order Condition”), each of which shall be free of any Burdensome Condition.

(b)All of the representations and warranties of the Seller contained in Article 3 shall have been true and correct as of the date of this Agreement and shall be true and correct on the Closing Date as if made on the 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 and without giving effect to any updated information disclosed by the Seller to the T-Mobile Parties pursuant to Section 5.3(d), in each case with only such exceptions as have not had a material adverse effect on the Seller Licenses (taken as a whole), the use thereof or the ability of the Seller to consummate the transactions contemplated hereby.

(c)The Seller 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 the Closing.

(d)T-Mobile shall have received a certificate from the Seller, dated as of the Closing Date, certifying that the conditions specified in Section 6.1(b) and Section 6.1(c), as it relates to the Seller, have been fulfilled.

(e)No award, order, writ, decree, stay, injunction or judgment by any arbitrator or Governmental Authority (including the FCC) shall be in effect that enjoins or prohibits the consummation of the transactions contemplated hereby.

(f)Any applicable waiting period under the HSR Act relating to the transactions contemplated by this Agreement shall have expired or been terminated, free of any Burdensome Condition.

(g)Except for the T-Mobile Parties’ operations authorized under the Existing Lease, the Seller shall have discontinued all of its operations on and uses of the spectrum covered by the Seller Licenses.

(h)The Seller or its applicable direct or indirect parent entity (if the Seller or one or more of its direct or indirect parent companies are disregarding 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 the T-Mobile to confirm that no withholding is required with respect to the payments to be made pursuant to Section 2.1.

(i)The “Closing” as defined in the LB License Purchase Agreement shall have occurred (or shall be occurring simultaneously with the Closing under this Agreement).

(j)The T-Mobile Parties shall have received the deliverables set forth in Section 2.3(b).

Section 6.2Conditions to the Obligations of the Seller

The obligation of the Seller to consummate the transactions contemplated by this Agreement is subject to the satisfaction on or prior to the Closing Date of each of the following conditions, unless waived in writing by the Seller:

(a)The FCC Consent shall have been obtained by one or more FCC Orders.

(b)All of the representations and warranties of the T-Mobile Parties contained in this Agreement shall have been true and correct in all material respects as of the date of this Agreement and shall be true and correct in all material respects on the Closing Date as if made on the 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 and without giving effect to any updated information disclosed by the T-Mobile Parties to the Seller pursuant to Section 5.3(d).

(c)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 the Closing.

(d)The Seller 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(b) and Section 6.2(c) have been fulfilled.

(f)Any applicable waiting period under the HSR Act relating to the transactions contemplated by this Agreement shall have expired or been terminated.

(g)The “Closing” as defined in the LB License Purchase Agreement shall have occurred (or shall be occurring simultaneously with the Closing under this Agreement).

(h)The Seller shall have received the deliverables set forth in Section 2.3(c).

ARTICLE 7
TERMINATION

Section 7.1Termination

(a)This Agreement may be terminated before the Closing Date only as follows:

(i)by mutual written consent of the Parties;

(ii)by T-Mobile by written notice to the Seller, at any time if (x) any of the Seller’s representations and warranties contained in this Agreement were not true and correct as of the date hereof, and such failure would result in the failure of the Seller to meet the conditions set forth in Section 6.1(b), (y) any of the Seller’s representations and warranties contained in this Agreement fails to be true and correct as of the Closing Date, and such failure would result in the failure of the Seller to meet the conditions set forth in Section 6.1(b), or (z) the Seller 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(c); provided that T-Mobile shall have given the Seller written notice of such failure and the Seller shall not have cured such failure (if curable) within thirty (30) days after receipt of such notice;

(iii)by the Seller by written notice to T-Mobile, at any time if (x) any of the T-Mobile Parties’ representations and warranties contained in this Agreement were not true and correct as of the date hereof, and such failure would result in the failure of the T-Mobile Parties to meet the conditions set forth in Section 6.2(b), (y) any of the T-Mobile Parties’ representations and warranties contained in this Agreement fails to be true and correct as of the 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(b), or (z) 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(c); provided that the Seller shall have given the T-Mobile Parties written notice of such failure and the T-Mobile Parties shall not have cured such failure (if curable) within thirty (30) days after receipt of such notice;

(iv)by either T-Mobile or the Seller by written notice to the other, if the Closing does not occur by the date that is eighteen (18) months after the date of this Agreement (the “Outside Date”) and the failure of the Closing to occur by the Outside Date does not result in whole or in part from a breach by the terminating Party (or if the terminating Party is T-Mobile, breach by either T-Mobile or T-Mobile License) of its obligations hereunder; provided that, if the FCC Consent has been obtained on or prior to the date that is eighteen (18) months after the date of this Agreement, then the Outside Date automatically shall be extended to the date that is twenty-four (24) months after the date of this Agreement;

(v)by either T-Mobile or the Seller by written notice to the other if the consummation of the transactions contemplated hereby 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;

(vi)by T-Mobile by written notice to the Seller if the FCC imposes or the DOJ or the FTC obtains an order from a tribunal of competent jurisdiction that imposes any Burdensome Condition in connection with the pursuit of the FCC Consent, 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 so long as T-Mobile terminates this Agreement within forty (40) days of the FCC imposing, or the DOJ or the FTC obtaining an order imposing, the Burdensome Condition (each such date that is forty (40) days after either (x) the FCC imposing a Burdensome Condition or (y) the DOJ or FTC obtaining an order imposing a Burdensome Condition, a “Burdensome Condition Expiration Date”). Notwithstanding anything to the contrary in this Agreement, (A) if T-Mobile does not exercise the termination right set forth in this Section 7.1(a)(vi) prior to the Burdensome Condition Expiration Date with respect to the FCC imposing a Burdensome Condition, then the T-Mobile Parties shall be deemed to have waived the condition set forth in Section 6.1(a), solely with respect to each FCC Order being free of any Burdensome Condition, as of the 12:01am on such Burdensome Condition Expiration Date and (B) if T-Mobile does not exercise the termination right set forth in this Section 7.1(a)(vi) prior to the Burdensome Condition Expiration Date with respect to the DOJ or FTC obtaining an order imposing a Burdensome Condition, then the T-Mobile Parties shall be deemed to have waived the condition set forth in Section 6.1(f), solely with respect to the expiration or early termination (if applicable) of the waiting period under the HSR Act free of any Burdensome Condition, as of the 12:01am on such Burdensome Condition Expiration Date; or

(vii)by either T-Mobile or the Seller by written notice to the other if the LB License Purchase Agreement has been terminated in accordance with its terms.

(b)In the event of the termination of this Agreement 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; provided that (i) nothing herein shall relieve any Party from any Liability resulting from or arising out of any breach by such Party of this Agreement, and (ii) this Section 7.1(b) 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).

ARTICLE 8
SURVIVAL AND INDEMNIFICATION

Section 8.1Survival

All representations and warranties made by the Parties in this Agreement, and all covenants and agreements of the Parties set forth in this Agreement to be performed on or prior to the Closing Date, shall survive for a period lasting twelve (12) months after the Closing and shall expire at such time, except that (a) the representations contained in Sections 3.1, 3.2, 3.3, 3.4, 3.6(a), 3.6(e), 3.6(g) and 3.6(i) and Sections 4.1, 4.2, 4.3 and 4.4 shall survive for a period lasting three (3) years after the Closing and shall expire at such time, (b) claims for fraud shall survive for the applicable statute of limitations, and (c) the Seller’s right to confess judgment against the T-Mobile Parties pursuant to Section 2.1(b)(iii)(C) shall survive indefinitely. All covenants and agreements to be performed after the Closing Date shall survive the 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, covenant or agreement 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. 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 the Closing, each Party (the “Indemnifying Party”) agrees to indemnify and hold harmless the other Party (i.e., each of the T-Mobile Parties or the Seller, 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”) actually 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:

(i)any inaccuracy in or breach of the representations and warranties made by the Indemnifying Party herein or in any certificate or other document delivered pursuant hereto; and

(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 the Closing, the Seller as Indemnifying Party agrees to indemnify and hold harmless 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 actually incurred or suffered by any such Indemnified Party that result from, relate to or arise out of any claims by third parties arising out of or in connection with the ownership or use by the Seller of the Seller Licenses prior to the Closing (other than claims arising from or in connection with the Existing Lease or the use or operation of the Seller Licenses by the T-Mobile Parties or their Affiliates thereunder and the Seller shall have no liability for such claims).

(c)From and after the Closing, the T-Mobile Parties (jointly and severally, acting as a single Party) as Indemnifying Party agree to indemnify, hold harmless and reimburse the Party and its Affiliates, and the Seller’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 actually incurred or suffered by any such Indemnified Party that result from, relate to or arise out of any claims by third parties arising out of or in connection with the ownership or use by T-Mobile License or other T-Mobile Affiliates on or after the Closing of the Seller Licenses.

Section 8.3Limitations

(a)In no event shall the Seller have liability under Section 8.2(a)(i) to the extent a breach of a representation or warranty results from, relates to or arises out of the T-Mobile Parties’ breach of the Existing Lease or the use or operation of the Seller Licenses by the T-Mobile Parties or their Affiliates thereunder. In no event shall the Seller’s aggregate liability under this Article 8 or otherwise pursuant to this Agreement exceed the Purchase Price (or portion thereof) actually received by the Seller pursuant to this Agreement.

(b)In no event shall the T-Mobile Parties’ aggregate liability under this Article 8 exceed the Purchase Price; provided that in no event shall the foregoing limitation of liability

apply to or limit T-Mobile Parties’ liability, or the Seller’s remedies, with respect to the payment of the Purchase Price, including the remedies of the Seller set forth in Section 2.1(b).

(c)Notwithstanding any other provisions of this Agreement, in no event shall any Party be liable for any Losses that are lost profits, consequential, exemplary, special, incidental or punitive damages, 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 awarded to a third party pursuant to a final, non-appealable order; provided that, for the avoidance of doubt, this Section 8.3(c) shall not limit the T-Mobile Parties’ obligations to pay any interest, fees, costs or expenses that may become payable to the Seller pursuant to Section 2.1(b)(iii), including in connection the failure to pay the Purchase Price when due hereunder.

(d)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 of the Parties acknowledges and agrees that the Seller Licenses and the transactions contemplated by this Agreement are unique and each of the Seller and the T-Mobile Parties would not have an adequate remedy at law for money damages in the event that this Agreement has not been performed in accordance with its terms, and therefore agrees that, in addition to all other remedies available at law or in equity, the other Party shall be entitled to an injunction or injunctions to prevent or restrain breaches or threatened breaches of this Agreement by the other (as applicable), and to specifically enforce the terms and provisions of this Agreement to prevent breaches or threatened breaches of, or to enforce compliance with, the covenants and obligations of the other (as applicable). Each Party agrees that it will not oppose the granting of an injunction, specific performance and other equitable relief on the basis that any other Party has an adequate remedy at law or that any award of specific performance is not an appropriate remedy for any reason at law or in equity (subject to such Party’s rights to defend such matter on its merits). Any Party seeking an injunction or injunctions to prevent breaches of this Agreement and to enforce specifically the terms and provisions of this Agreement shall not be required to provide any bond or other security in connection with any such order or injunction. The foregoing shall not be deemed to be or construed as a waiver or election of remedies by any of the Parties, and each of the Parties expressly reserve any and all rights and remedies available to them at law or in equity in the event of any breach or default by the other Parties under this Agreement.

Section 8.4Indemnification Procedures

(a)In the event that any claim or demand for which the Indemnifying Party would be liable to an Indemnified Party under this Article 8 is asserted against or sought to be collected from an Indemnified Party by a third party, the Indemnified Party shall give notice of such claim or demand promptly to the Indemnifying Party, which notice(s) shall specify the nature of such claim or demand in reasonable detail and the amount or the estimated amount thereof to the extent then feasible (the “Claim Notice”) and shall attach to such Claim Notice copies of any applicable summonses, complaints, pleadings, written claims, demands, notices, correspondence or other documents evidencing or supporting such claim.

(b)Upon receipt of a Claim Notice, the Indemnifying Party shall be entitled, at its expense, to participate in, but not to control, determine or conduct, the defense of such claim; provided that the Indemnified Party shall not be required to share any information that it is prohibited from disclosing under applicable Law or contract or that would reasonably be expected to result in the loss of attorney-client or other privilege. The Indemnified Party shall

have the right in its sole discretion to conduct the defense of, and to settle or to consent to the entry of judgment with respect to, any such claim; provided that, except with the consent of the Indemnifying Party (which consent shall not be unreasonably withheld, conditioned or delayed), no settlement or consent to the entry of judgment of any such claim shall be determinative of the amount of Losses relating to such matter or any indemnification obligation of the Indemnifying Party under this Article 8. In the event that the Indemnifying Party has consented to any such settlement, entry of judgment, adjustment or compromise, the amount of such settlement, entry of judgment, adjustment or compromise so approved shall be conclusively deemed to be a liability of the Indemnifying Party hereunder (if it is determined that the Indemnifying Party has liability for such claim or demand).

(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.

(e)For purposes of clarity but not by way of limitation, the provisions of this Section 8.4 shall not apply to any procedure for any proceeding seeking payment of the Purchase Price, including the Seller’s power to confess judgment against the T-Mobile Parties pursuant to Section 2.1(b)(iii)(C).

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 purchase price to the extent permitted under applicable law.

Section 8.6Exclusive Remedy

Following the 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, provided that nothing in the foregoing nor in any other provision of this Article 8 shall limit or otherwise affect (a) any Party’s equitable remedies, (b) the Seller’s rights or remedies with respect to the T-Mobile Parties’ failure to pay the Purchase Price in full in Cash when due hereunder, including the Seller’s power to confess judgment against the T-Mobile Parties pursuant to Section 2.1(b)(iii)(C), but subject to Section 8.3(c), or (c) any Party’s rights or remedies based on fraud.

Section 8.7Seller Assets

The Seller covenants and agrees that it shall maintain cash in an amount of not less than Two Million Five Hundred Thousand Dollars ($2,500,000) during the period commencing on the Closing Date and ending on the one-year anniversary of the Closing Date and, during such period, such proceeds shall be available to the Seller to satisfy any indemnification obligations of the Seller under this Article 8, including to settle any litigation with third parties related to the Seller Licenses.

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 either Party under this Agreement shall not be assignable by such Party without the prior written consent of the other Party, except as otherwise provided in this Section 9.1.

(b)Prior to Closing, T-Mobile License may assign all or a portion of its rights hereunder to receive any of the Seller Licenses to one or more controlled Affiliates of T-Mobile; provided that (i) such assignee, transferee or delegee is organized or incorporated in the State of Delaware and has the same ultimate parent entity (as that term is defined in the HSR Act) as T-Mobile Parties, (ii) the T-Mobile Parties furnish the Seller with reasonably satisfactory assurance of performance of this Agreement and the other Transaction Documents, and joinder to this Agreement and the other Transaction Documents (including pursuant to which such assignee, transferee or delegee makes the representations and warranties of the T-Mobile Parties in Article 4 and agrees to be subject to the Seller’s right to confess judgement against such assignee, transferee or delegee pursuant to Section 2.1(b)(iii)(C)), by such assignee, transferee or delegee as a condition precedent to any such assignment, (iii) the assignment, transfer or delegation would not reasonably be expected to prevent or delay by more than twenty (20) days the FCC’s approval of the transactions contemplated hereby or the expiration or termination of the waiting period under the HSR Act, (iv) 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 Seller hereunder; and (v) subject to Sections 5.4(c) and 5.4(d) of this Agreement and taking actions at the reasonable request and expense of the T-Mobile Parties as are reasonably necessary to effect an assignment pursuant to this Section 9.1(b), the T-Mobile Parties shall be solely responsible for any modifications of the FCC Applications necessary to effect the assignment of rights contemplated by this Section 9.1(b).

(c)Notwithstanding the foregoing, in no event may the T-Mobile Parties (or any Affiliate designee of the T-Mobile Parties pursuant to Section 9.1(b)) assign any Seller License or any of their rights hereunder during the period commencing on the Closing Date through the date on which the Purchase Price payable to the Seller under this Agreement is paid in full. For purposes of this Section 9.1(c), a direct transfer, sale or disposition of a majority of the equity interests or voting interests of T-Mobile License (or its Affiliate designee of T-Mobile License pursuant to Section 9.1(b)) (whether by contract or otherwise) shall be deemed an assignment hereunder.

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 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; provided that, except as expressly set forth herein, nothing herein shall

expand, limiting or otherwise modify the rights and obligations of the Parties or their Affiliates under the Existing Lease.

(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), 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

Email: nancy.victory@us.dlapiper.com and marc.samuel@us.dlapiper.com

If to the Seller, to:

Channel 51 License Co LLC

701 Brickell Ave, Suite 1700

Miami, FL 33131

Attention: Paul Chisholm

Phone: (781) 526-2005

Email: paul@chisholmco.com

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

Hogan Lovells US LLP

8350 Broad Street, 17th Floor
Tysons, VA 22102

Attention: Randy Segal

Email: randy.segal@hoganlovells.com

and

Jenner & Block LLP

1099 New York Avenue, NW, Suite 900

Washington, DC 20001-4412

Attention: Trey Hanbury

Email: thanbury@jenner.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; Venue; Waiver of Jury Trial

This Agreement and all disputes, claims, or controversies arising out of or relating to this Agreement or the transactions contemplated hereby 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 thereof. Each Party hereby (a) irrevocably and unconditionally consents to submit itself to the sole and exclusive personal jurisdiction any State Court of the State of Delaware or any Federal Court of the United States of America sitting in the State of Delaware (collectively, the “Delaware Courts”) in connection with any dispute, claim, or controversy arising out of or relating to this Agreement or the transactions contemplated hereby, (b) waives any objection to the laying of venue of any such litigation in any of the Delaware Courts, (c) agrees not to plead or claim in any such court that such litigation brought therein has been brought in an inconvenient forum and agrees not otherwise to attempt to deny or defeat such personal jurisdiction or venue by motion or other request for leave from any such court, and (d) agrees that it will not bring any action, suit, or proceeding in connection with any dispute, claim, or controversy arising out of or relating to this Agreement or the transactions contemplated hereby, in any court or other tribunal, other than any of the Delaware Courts. Each Party hereby irrevocably and unconditionally agrees that service of process in connection with any dispute, claim, or controversy arising out of or relating to this Agreement or the transactions contemplated hereby may be made upon such party by prepaid certified or registered mail, with a validated proof of mailing receipt constituting evidence of valid service, directed to such Party at the address specified in Section 9.5. Service made in such manner, to the fullest extent permitted by applicable law, shall have the same legal force and effect as if served upon such Party personally within the State of Delaware. Nothing herein shall be deemed to limit or prohibit service of process by any other manner as may be permitted by applicable law. Each of the Parties hereto hereby agrees that this Agreement has been entered into in express reliance on 6 Del. C. § 2708. EACH PARTY 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, SUIT, OR PROCEEDING ARISING OUT OF THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY. EACH PARTY (I) 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 (II) ACKNOWLEDGES THAT IT AND THE OTHER

PARTIES 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.

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 any such 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 provided in this Agreement, 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. Without limiting the generality of the foregoing, (a) each Party shall pay (and T-Mobile shall cause T-Mobile License (or, subject to Section 9.1, an Affiliate of T-Mobile designated by T-Mobile) to pay) the total filing fee payable by it as an “acquiring person” in connection with the filing of the HSR Notice, and (b) the T-Mobile Parties, on the one hand, and the Seller, on the other hand, each shall pay fifty percent (50%) of the filing and application fees in connection with the FCC Consent(s) with respect to the Seller Licenses, 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).

Section 9.12Bulk Transfer Laws

The T-Mobile Parties hereby waive compliance by the Seller and its Affiliates with the provisions of any bulk sales, bulk transfer or other similar Laws of any jurisdiction in connection with the transactions contemplated by this Agreement.

Section 9.13Construction of “Seller 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 “Seller 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 the Seller that no event has occurred that permits revocation of a “Seller License” of the Seller would be deemed to include a representation that no event has occurred that permits revocation of any portion of such Seller License.

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

IN WITNESS WHEREOF, the parties have duly executed this Agreement 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

[Signature Page to License Purchase Agreement]

SCHEDULE A

Seller Licenses

FCC Callsign

Market Number - Market Name

Block

Service

Licensee/Seller

Purchase Price Allocation*

WRCQ549

PEA010 - Houston, TX

600 MHz

Channel 51 License Co LLC

WRCQ550

PEA010 - Houston, TX

600 MHz

Channel 51 License Co LLC

WRCQ551

PEA003 - Chicago, IL

600 MHz

Channel 51 License Co LLC

WRCQ552

PEA003 - Chicago, IL

600 MHz

Channel 51 License Co LLC

WRCQ553

PEA002 - Los Angeles, CA

600 MHz

Channel 51 License Co LLC

WRCQ554

PEA036 - New Orleans, LA

600 MHz

Channel 51 License Co LLC

WRCQ555

PEA007 - Boston, MA

600 MHz

Channel 51 License Co LLC

WRCQ556

PEA007 - Boston, MA

600 MHz

Channel 51 License Co LLC

*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.

SCHEDULE B

Certain Undertakings; Burdensome Condition

EXHIBIT A

FORM OF INSTRUMENT OF ASSIGNMENT

EXHIBIT B-1

CONFESSION OF JUDGMENT

EXHIBIT B-2

FORM OF CONFESSION OF JUDGMENT AFFIDAVIT

EXHIBIT 10.2


LICENSE PURCHASE AGREEMENT by and among T-MOBILE USA, INC., T-MOBILE LICENSE LLC, and LB LICENSE CO, LLC Dated as of August 8, 2022

TABLE OF CONTENTS

Page


ARTICLE 1 definitions			1
ARTICLE 2 PURCHASE AND SALE OF LICENSES			4
Section 2.1 Purchase and Sale of Seller Licenses			4
Section 2.2 No Assumption of Liabilities			7
Section 2.3 Closing			7
ARTICLE 3 REPRESENTATIONS AND WARRANTIES OF THE SELLER			8
Section 3.1 Organization			8
Section 3.2 Power and Authority			8
Section 3.3 Enforceability			8
Section 3.4 Non-Contravention			8
Section 3.5 Compliance With Laws			9
Section 3.6 Seller Licenses			9
Section 3.7 Litigation			11
Section 3.8 No Brokers			11
Section 3.9 Solvency and Debtor Relief Laws			11
Section 3.10 Disclaimer of Other Representations and Warranties			12
ARTICLE 4 REPRESENTATIONS AND WARRANTIES OF THE T-Mobile PARTIES			12
Section 4.1 Organization; Place of Business			12
Section 4.2 Power and Authority			12
Section 4.3 Enforceability			13
Section 4.4 Non-Contravention			13
Section 4.5 Litigation			13
Section 4.6 Qualification			13
Section 4.7 Available Funds			14
Section 4.8 Solvency and Debtor Relief Laws			14
Section 4.9 No Brokers			15
Section 4.10 Disclaimer of Other Representations and Warranties			15
ARTICLE 5 COVENANTS AND OTHER AGREEMENTS			16
Section 5.1 Covenants of the T-Mobile Parties and the Seller Pending the Closing			16
Section 5.2 Confidentiality			16
Section 5.3 Compliance with Law; Compliance with Licenses; Non-Solicitation; Updates			16
Section 5.4 Governmental Filings			17
Section 5.5 Withholding			19
Section 5.6 Existing Lease			19
ARTICLE 6 CONDITIONS TO CLOSING			20
Section 6.1 Conditions to the Obligations of the T-Mobile Parties			20
Section 6.2 Conditions to the Obligations of the Seller			21

- i -


ARTICLE 7 TERMINATION			21
Section 7.1 Termination			21
ARTICLE 8 SURVIVAL And indEMNIFICATION			23
Section 8.1 Survival			23
Section 8.2 General Indemnification Obligation			24
Section 8.3 Limitations			24
Section 8.4 Indemnification Procedures			25
Section 8.5 Treatment of Payments			26
Section 8.6 Exclusive Remedy			26
Section 8.7 Seller Assets			27
ARTICLE 9 MiSCELLANEOUS			27
Section 9.1 Assignment			27
Section 9.2 Further Assurances			28
Section 9.3 Entire Agreement; Amendment			28
Section 9.4 Waiver			28
Section 9.5 Notices			28
Section 9.6 Governing Law; Venue; Waiver of Jury Trial			30
Section 9.7 No Benefit to Others			30
Section 9.8 United States Dollars; Headings, Gender, “Person,” and “including”			31
Section 9.9 Severability			31
Section 9.10 Counterparts and Electronic Signatures			31
Section 9.11 Expenses			31
Section 9.12 Bulk Transfer Laws			32
Section 9.13 Construction of “Seller License”			32

- ii -

LICENSE PURCHASE AGREEMENT

THIS LICENSE PURCHASE AGREEMENT (this “Agreement”), dated as of August 8, 2022, is entered into by and among (i) T-MOBILE USA, INC., a Delaware corporation (“T-Mobile”), and T-MOBILE LICENSE LLC, a Delaware limited liability company (“T-Mobile License” and collectively with T-Mobile, 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.

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

WHEREAS, the Seller leases the Seller Licenses to T-Mobile License pursuant to a spectrum lease identified by ULS Application File No. 0009021220 (the “Existing Lease”);

WHEREAS, the Seller wishes to sell, and T-Mobile and T-Mobile License wishes to purchase, the Seller Licenses in the manner and subject to the terms and conditions set forth in this Agreement; 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 a license purchase agreement (the “Channel 51 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.

ARTICLE 1
DEFINITIONS

As used in this Agreement, the following terms shall have the meanings set forth or referenced below:

“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.

“Bankruptcy Code” means title 11 of the United States Code, 11 U.S.C. §§101-1532, as amended from time to time.

“Burdensome Condition” has the meaning set forth on Schedule B.

“Burdensome Condition Expiration Date” has the meaning set forth in Section 7.1(a)(vi).

“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.

“Cash” means cash in Dollars.

“Channel 51” has the meaning set forth in the recitals.

“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.

“Deferred Payment Date” has the meaning set forth in Section 2.1(b)(i).

“Delaware Courts” has the meaning set forth in Section 9.6.

“Disclosure Schedule” has the meaning set forth in Article 3.

“DOJ” means the United States Department of Justice.

“Existing Lease” has the meaning set forth in the recitals.

“FCC” means the Federal Communications Commission or any successor entity thereto.

“FCC Applications” has the meaning set forth in Section 5.4(a).

“FCC Order” means a written action or order by the FCC or any of its bureaus.

“FCC Order Condition” has the meaning set forth in Section 6.1(a).

“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, including the FCC Consent, as to which (i) 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, (ii) 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, (iii) 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 (iv) 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.

“FTC” means the United States Federal Trade Commission.

“Governmental Authority” means a federal, state or local court, legislature, governmental agency, commission or regulatory or administrative authority or instrumentality.

“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).

“LB License” has the meaning set forth in the preamble.

“Losses” has the meaning set forth in Section 8.2(a).

“Material Affiliates” has the meaning set forth in Section 4.8(a).

“NDA” has the meaning set forth in Section 5.2(a).

“NSA” has the meaning set forth in Section 3.4.

“Outside Date” has the meaning set forth in Section 7.1(a)(iv).

“Party(ies)” has the meaning set forth in the preamble.

“Person” has the meaning set forth in Section 9.8.

“Purchase Price” has the meaning set forth in Section 2.1(b).

“Seller” has the meaning set forth in the preamble.

“Seller Licenses” has the meaning set forth in the recitals.

“Solvent” has the meaning set forth in Section 4.8(a).

“Subsidiaries” means, as to any Person, the Affiliates of such Person that, directly or indirectly, are controlled by such Person.

“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.

ARTICLE 2
PURCHASE AND SALE OF LICENSES

Section 2.1Purchase and Sale of Seller Licenses

(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 Six Hundred Fifteen Million Six Hundred Forty-Six Thousand Six Hundred Ninety-Seven and 40/100 Dollars ($1,615,646,697.40), less the applicable prepaid amount under the Existing Lease in accordance with Section 5.6(b) (the “Purchase Price”), which shall be payable as follows:

(i)on or prior to the date that is forty (40) days after the Closing Date (the “Deferred Payment Date”), to the Seller, an amount in Cash equal to the Purchase Price by wire transfer of immediately available funds to such account(s) as the Seller shall

designate no later than three (3) Business Days prior to such payment date. In no event shall the Purchase Price be pro-rated or adjusted if Closing occurs but not all Seller Licenses are assigned to T-Mobile License (or, subject to Section 9.1, an Affiliate of T-Mobile designated by T-Mobile) at Closing because a Burdensome Condition was imposed and T-Mobile failed to exercise its termination right set forth in Section 7.1(a)(vi) prior to the applicable Burdensome Condition Expiration Date.

(ii) Notwithstanding anything to the contrary in this Agreement:

(B)Subject to the occurrence of the Closing, the T-Mobile Parties’ obligation to pay the Purchase Price and any other amounts that may become payable to the Seller pursuant to this Section 2.1(b)(ii) is absolute and unconditional and is not subject to any abatement, counterclaim, defense, deferment, interruption, recoupment, reduction, or setoff (including in connection with any indemnity or other claims under Article 8) for any reason whatsoever; provided that the foregoing shall not limit the rights of the T-Mobile Parties under Article 8 or otherwise under this Agreement.

(C)The Parties acknowledge that the obligation of the T-Mobile Parties to pay the Purchase Price on the Deferred Payment Date is an integral part of the transactions contemplated by this Agreement and that, without these agreements, AND WITHOUT THE AGREEMENTS TO CONFESS JUDGMENT SET FORTH IN EXHIBIT B-1 (WHICH ARE INCORPORATED INTO AND ARE AN INTEGRAL PART OF THIS SECTION 2.1(b)(ii)(C)), THE SELLER WOULD NOT ENTER INTO THIS AGREEMENT.

(D)In addition to all other remedies available to the Seller hereunder, if the Purchase Price is not paid in full in Cash to the Seller on or prior to the Deferred Payment Date, upon the request of the Seller (in its sole discretion), the T-Mobile Parties shall cooperate in good faith with the Seller, and take all steps necessary, proper or advisable, in each case subject to the receipt of all applicable consents, approvals and/or clearances of the FCC and other Governmental Authorities as described in this Section 2.1(b)(ii)(D), to assign (including to assign legal title to) the Seller Licenses back to the Seller and/or provide the Seller with all rights with respect thereto (including pursuant to a lease arrangement) as soon as reasonably practicable after receipt of such notice from the Seller, make any necessary filings with the FCC or other Governmental Authorities to seek the FCC’s or any other Governmental Authority’s consent to such assignment (including if necessary to seek the expiration or termination of any applicable HSR waiting period related to such transfer), and use reasonable best efforts to obtain such consents (or expiration or termination of such waiting period), and to pay all filing fees due to any Governmental Authority in connection with such necessary filings. The Seller shall be entitled to make the

foregoing request of T-Mobile at any time occurring after the Deferred Payment Date but prior to the date that the Seller receives the Purchase Price and any other amounts payable to the Seller pursuant to this Section 2.1, in each case in Cash in full. Notwithstanding any assignment of the Seller Licenses back to the Seller, the T-Mobile Parties shall pay the reasonable and documented out-of-pocket fees, costs and expenses incurred by the Seller and its Affiliates in connection with the assignment of the Seller Licenses back to the Seller (including but not limited to legal fees, costs, and expenses related to making any required filings with any Governmental Authority and obtaining the expiration or termination of any required waiting periods in connection with the transfer of the Seller Licenses back to the Seller). Notwithstanding anything to the contrary in this Agreement, in the event that the Seller exercises its rights pursuant to this Section 2.1(b)(ii)(D), upon the assignment to the Seller of the Seller Licenses or the rights with respect to the Seller Licenses (including pursuant to a lease arrangement), the Seller shall return to T-Mobile or its applicable Affiliate (as designated by T-Mobile) any amounts paid to the Seller pursuant to this Agreement, including any portion of the Purchase Price, except for the payment of the Seller’s reasonable and documented out-of-pocket fees, costs and expenses as contemplated hereby, and the Seller shall have no further remedy under this Agreement or with respect to the transactions contemplated hereby; provided that, for the avoidance of doubt, in no event shall the Seller be required to return any amount paid to any U.S. Governmental Authority or Person other than the Seller (or the Person or Persons the Seller designates to receive payment in accordance with Section 2.1(b)(i)) pursuant to or in connection with this Agreement.

(E)The remedies set forth in this Section 2.1(b) and elsewhere in this Agreement shall be cumulative and not the exclusive remedies of the Seller if the Purchase Price is not paid in full in Cash on or prior to the Deferred Payment Date and nothing in this Section 2.1(b) shall preclude the Seller from also seeking any other remedy, including damages, available at law, in equity or otherwise; provided that, for the avoidance of doubt and notwithstanding anything in this Agreement to the contrary, in no event shall the Seller be entitled to receive both an assignment back of the Seller Licenses or rights (including leasehold rights) thereto in accordance with Section 2.1(b)(ii)(D) and the Purchase Price. For the avoidance of doubt, if the consent of any Governmental Authority is required as a condition to assign the Seller Licenses back to the Seller pursuant to Section 2.1(b)(ii)(D) and such consent is not obtained, the Seller’s election to receive such assignment back of the Seller Licenses pursuant to Section 2.1(b)(ii)(D) shall be deemed irrevocably revoked and the Seller shall continue to be entitled to receive the Purchase Price in Cash in full.

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 THE SELLER OF ANY KIND OR NATURE, KNOWN OR UNKNOWN, CONTINGENT OR OTHERWISE, THAT EXISTED, AROSE, WERE INCURRED, OR OTHERWISE PERTAIN TO ACTIONS, EVENTS OR CIRCUMSTANCES OCCURRING OR EXISTING PRIOR TO THE CLOSING WITH RESPECT TO THE SELLER LICENSES OR OTHERWISE. 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 SELLER LICENSES.

Section 2.3Closing

ARTICLE 3
REPRESENTATIONS AND WARRANTIES OF THE SELLER

Section 3.1Organization

The Seller is a limited liability company, duly formed and validly existing under the laws of the State of Delaware.

Section 3.2Power and Authority

The Seller has the requisite limited liability company power and authority to execute, deliver and perform this Agreement and the other Transaction Documents to which it is, or will

be, a party and to consummate the transactions contemplated hereby. The execution, delivery and performance by the Seller of this Agreement and all the other Transaction Documents required to be executed and delivered by the Seller in accordance with the provisions of this Agreement have been duly authorized by all necessary limited liability company action on the part of the Seller. This Agreement has been, and the other Transaction Documents to which the Seller is a party have been, or will be, duly executed and delivered by the Seller.

Section 3.3Enforceability

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 or state Governmental Authorities, the execution, delivery and performance by the Seller of this Agreement and the other Transaction Documents to which the Seller 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 the Seller or the Seller Licenses is subject (except as may be required by the T-Mobile Parties’ circumstances), (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 the Seller or any of the Seller Licenses, (c) the limited liability company agreement or other governing documents of the Seller, or (d) any material mortgage, indenture, agreement (including, but not limited to the Letter of Agreement from Monish Kundra, Member, Board of Directors, LB License, to Assistant Attorney General for National Security, DOJ, dated July 20, 2018 (the “NSA”)), contract, commitment, lease, plan, license or other instrument, document or understanding, oral or written, to which the Seller is a party or subject, by which the Seller may have rights or by which any of the Seller 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 the Seller thereunder.

Section 3.5Compliance With Laws

Section 3.6Seller Licenses

(a)Each of the Seller Licenses has been validly issued, is in full force and effect, is validly held by the Seller, is free and clear of conditions or restrictions, other than those routinely

imposed in conjunction with FCC licenses of a similar type or as noted in the Disclosure Schedule, and was granted to the Seller by Final Order. Each of the Seller Licenses is free and clear of all Liens. At the Closing, each of the Seller Licenses will be free and clear of all Liens. The Seller has not used or granted any of the Seller Licenses or granted any rights therein, except in accordance with the Existing Lease or as noted in the Disclosure Schedule.

(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 Seller Licenses. The consummation of the transactions contemplated hereunder will not cause the FCC to impose any unjust enrichment penalties pursuant to 47 C.F.R. §1.2111 with respect to the Seller Licenses.

(f)The Seller has no reason to believe that any of the Seller Licenses will not be renewed in the ordinary course. None of the Seller Licenses will be impaired by the consummation of the transactions contemplated hereby. The Seller is not aware 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 Seller License, (ii) seeks the imposition of any adverse modification or amendment with respect to any Seller License, (iii) seeks the payment of a fine, sanction, penalty, damages or contribution in connection with the use of any Seller License, or (iv) in any other way would reasonably be expected to impair the Seller Licenses (taken as whole), other than matters of public record pertaining to the Existing Lease and proceedings affecting the wireless communications industry or 600 MHz licenses or licensees generally.

(g)There are no liabilities of the Seller 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 Seller License or otherwise to which the T-Mobile Parties or any of their

Affiliates will be subject from and after the Closing as a result of the consummation of the transactions contemplated hereby or otherwise.

(h)With respect to each Seller License, (i) all material documents required to be filed at any time by the Seller with the FCC or pursuant to the NSA with respect to such Seller 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 Seller License was first issued or transferred to the Seller or any Affiliate thereof are correct in all material respects. None of the Seller Licenses are subject to any conditions other than those appearing on the face of the Seller Licenses 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 Seller License, nor will the consummation of the transactions contemplated hereby cause 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 the Seller or any of its past or current Affiliates received from the FCC in connection with any Seller License.

Section 3.7Litigation

Section 3.8No Brokers

Section 3.9Solvency and Debtor Relief Laws

order for its own relief or reorganization has been brought or is pending, or to the knowledge of the Seller, threatened, by or against the Seller under any Debtor Relief Laws. The Seller has not taken any action in contemplation of, or that would constitute the basis for, the institution of any such case, proceeding or process.

(b)The Seller has no intention of, and is not contemplating, seeking relief under any Debtor Relief Laws within one hundred eighty (180) days after the Closing.

(c)The Seller has structured the transactions contemplated by this Agreement in good faith, as it relates to Debtor Relief Laws.

Section 3.10Disclaimer of Other Representations and Warranties

ARTICLE 4
REPRESENTATIONS AND WARRANTIES OF THE T-MOBILE PARTIES

Each T-Mobile Party jointly and severally hereby represents and warrants to the Seller as follows:

Section 4.1Organization; Place of Business

Each T-Mobile Party is a corporation or limited liability company, as the case may be, duly organized and validly existing under the laws of the State of Delaware.

Section 4.2Power and Authority

Each T-Mobile Party has the requisite corporate or limited liability company, as applicable, power and authority to execute, deliver and perform this Agreement and the other Transaction Documents to which it is, or will be, a party and to consummate the transactions contemplated hereby. 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 corporate or limited liability company, as applicable, 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

Section 4.4Non-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 or state Governmental Authorities, 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, (i) any Law to which either T-Mobile Party is subject (except as may be required by the Seller’s circumstances), (ii) 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, (iii) the articles of incorporation, certificate of formation, bylaws, operating agreement or similar organizational documents of either T-Mobile Party, or (iv) any credit agreement or 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

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 (a) to hold and receive FCC licenses generally, (b) to hold and receive the Seller Licenses, upon the consummation of the transactions contemplated hereby, and (c) to be approved as the assignee of the Seller 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

Section 4.8Solvency and Debtor Relief Laws

Affiliates” shall mean each of the Subsidiaries of T-Mobile with consolidated total assets of such Subsidiary and its Subsidiaries, as set forth on the most recent balance sheet of such Subsidiary prepared in accordance with GAAP, equal to or greater than 5.0% of the consolidated total assets of T-Mobile.

(b)None of the T-Mobile Parties has any intention of, and is not contemplating, seeking relief under any Debtor Relief Laws within 180 days after the Closing.

(c)Each of the T-Mobile Parties has structured the transactions contemplated by this Agreement in good faith, as it relates to Debtor Relief Laws.

Section 4.9No Brokers

Section 4.10Disclaimer of Other Representations and Warranties

ARTICLE 5
COVENANTS AND OTHER AGREEMENTS

Section 5.1Covenants of the T-Mobile Parties and the Seller Pending the Closing

Section 5.2Confidentiality

(a)The Nondisclosure Agreement effective as of March 28, 2022 between T-Mobile and LB Spectrum Holdings, LLC (the “NDA”) shall remain in effect in accordance with its

terms, and the Seller agrees that it is bound by the terms and conditions of the NDA to the same extent as LB Spectrum Holdings, LLC.

(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), (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 (including in connection with the making of any required filings or notifications to a Governmental Authority concerning the transactions described herein or in responding to any requests for information or documents made by a Governmental Authority investigating the transactions described herein) 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 and (iii) each Party shall have the right to make disclosure of the Transaction Information (as defined in the NDA) with respect to this Agreement, the Transaction Documents or the transactions contemplated hereby or by the other Transaction Documents in connection with any proceeding related to the enforcement of this Agreement, including without limitation, the Seller’s right to confess judgement against the T-Mobile Parties pursuant to Section 2.1(b)(ii)(C). Notwithstanding the foregoing, no Party has to share in advance any filings made in connection with the transactions described herein under the HSR Act including any attachments thereto.

Section 5.3Compliance with Law; Compliance with Licenses; Non-Solicitation; Updates

(c)Non-solicitation. Prior to the earlier to occur of the Closing or any termination of this Agreement in accordance with the provisions of Section 7.1, the Seller shall not, and shall cause its Subsidiaries and each of their officers and employees not to, and the Seller shall direct the agents and representatives of the Seller and its Subsidiaries not to, directly or indirectly, sell, transfer, assign or otherwise dispose of any of the Seller Licenses or enter into any agreement, arrangement or understanding, solicit inquiries or proposals, furnish non-public information or

initiate or participate in any negotiations or discussions whatsoever with respect to any of the foregoing transaction.

Section 5.4Governmental Filings

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 proceeding by a private party relating to the approval of the transactions contemplated hereby by any Governmental Authority. To the extent practicable under the circumstances, neither Party nor 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 either 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 either Party is required 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. Subject to applicable Law, the Parties will consult and cooperate with each other in connection with any analyses, appearances, presentations, memoranda, briefs, arguments, and proposals made or submitted to any Governmental Authority regarding the transactions contemplated by this Agreement by or on behalf of any Party.

Section 5.5Withholding

Section 5.6Existing Lease

(a)Until the earlier of the Closing or the termination of this Agreement in accordance with its terms, the Parties shall, and shall cause their controlled Affiliates, to take all such actions

as are necessary to maintain the Existing Lease in full force and effect on its current terms, including (i) extending the terms of the Existing Lease following execution of this Agreement no later than thirty (30) days prior to the expiration of its then-current terms, (ii) not giving any notice of termination under the Existing Lease and (iii) making such filings with the FCC, in good faith cooperation with the other Parties, as may be necessary in connection with the foregoing.

ARTICLE 6
CONDITIONS TO CLOSING

Section 6.1Conditions to the Obligations of the T-Mobile Parties

(f)Any applicable waiting period under the HSR Act relating to the transactions contemplated by this Agreement shall have expired or been terminated, free of any Burdensome Condition.

(i)The “Closing” as defined in the Channel 51 License Purchase Agreement shall have occurred (or shall be occurring simultaneously with the Closing under this Agreement).

(j)The T-Mobile Parties shall have received the deliverables set forth in Section 2.3(b).

Section 6.2Conditions to the Obligations of the Seller

(a)The FCC Consent shall have been obtained by one or more FCC Orders.

(f)Any applicable waiting period under the HSR Act relating to the transactions contemplated by this Agreement shall have expired or been terminated.

(g)The “Closing” as defined in the Channel 51 License Purchase Agreement shall have occurred (or shall be occurring simultaneously with the Closing under this Agreement).

(h)The Seller shall have received the deliverables set forth in Section 2.3(c).

ARTICLE 7
TERMINATION

Section 7.1Termination

(a)This Agreement may be terminated before the Closing Date only as follows:

(i)by mutual written consent of the Parties;

(v)by either T-Mobile or the Seller by written notice to the other if the consummation of the transactions contemplated hereby 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;

(vii)by either T-Mobile or the Seller by written notice to the other if the Channel 51 License Purchase Agreement has been terminated in accordance with its terms.

ARTICLE 8
SURVIVAL AND INDEMNIFICATION

Section 8.1Survival

All representations and warranties made by the Parties in this Agreement, and all covenants and agreements of the Parties set forth in this Agreement to be performed on or prior to the Closing Date, shall survive for a period lasting twelve (12) months after the Closing and shall expire at such time, except that (a) the representations contained in Sections 3.1, 3.2, 3.3, 3.4, 3.6(a), 3.6(e), 3.6(g) and 3.6(i) and Sections 4.1, 4.2, 4.3 and 4.4 shall survive for a period lasting three (3) years after the Closing and shall expire at such time, (b) claims for fraud shall survive for the applicable statute of limitations, and (c) the Seller’s right to confess judgment against the T-Mobile Parties pursuant to Section 2.1(b)(ii)(C) shall survive indefinitely. All covenants and agreements to be performed after the Closing Date shall survive the 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, covenant or agreement 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. 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

(i)any inaccuracy in or breach of the representations and warranties made by the Indemnifying Party herein or in any certificate or other document delivered pursuant hereto; and

(ii)any nonfulfillment or breach by the Indemnifying Party of any of the covenants or agreements made by the Indemnifying Party herein.

Section 8.3Limitations

(b)In no event shall the T-Mobile Parties’ aggregate liability under this Article 8 exceed the Purchase Price; provided that in no event shall the foregoing limitation of liability

apply to or limit T-Mobile Parties’ liability, or the Seller’s remedies, with respect to the payment of the Purchase Price, including the remedies of the Seller set forth in Section 2.1(b).

(c)Notwithstanding any other provisions of this Agreement, in no event shall any Party be liable for any Losses that are lost profits, consequential, exemplary, special, incidental or punitive damages, 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 awarded to a third party pursuant to a final, non-appealable order; provided that, for the avoidance of doubt, this Section 8.3(c) shall not limit the T-Mobile Parties’ obligations to pay any interest, fees, costs or expenses that may become payable to the Seller pursuant to Section 2.1(b)(ii), including in connection the failure to pay the Purchase Price when due hereunder.

Section 8.4Indemnification Procedures

expected to result in the loss of attorney-client or other privilege. The Indemnified Party shall have the right in its sole discretion to conduct the defense of, and to settle or to consent to the entry of judgment with respect to, any such claim; provided that, except with the consent of the Indemnifying Party (which consent shall not be unreasonably withheld, conditioned or delayed), no settlement or consent to the entry of judgment of any such claim shall be determinative of the amount of Losses relating to such matter or any indemnification obligation of the Indemnifying Party under this Article 8. In the event that the Indemnifying Party has consented to any such settlement, entry of judgment, adjustment or compromise, the amount of such settlement, entry of judgment, adjustment or compromise so approved shall be conclusively deemed to be a liability of the Indemnifying Party hereunder (if it is determined that the Indemnifying Party has liability for such claim or demand).

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 purchase price to the extent permitted under applicable law.

Section 8.6Exclusive Remedy

Following the 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, provided that nothing in the foregoing nor in any other provision of this Article 8 shall limit or otherwise affect (a) any Party’s equitable remedies, (b) the Seller’s rights or remedies with respect to the T-Mobile Parties’ failure to pay the Purchase Price in full in Cash when due hereunder, including the Seller’s power to confess judgment against the T-Mobile Parties pursuant to Section 2.1(b)(ii)(C), but subject to Section 8.3(c), or (c) any Party’s rights or remedies based on fraud.

Section 8.7Seller Assets

ARTICLE 9
MISCELLANEOUS

Section 9.1Assignment

(b)Prior to Closing, T-Mobile License may assign all or a portion of its rights hereunder to receive any of the Seller Licenses to one or more controlled Affiliates of T-Mobile; provided that (i) such assignee, transferee or delegee is organized or incorporated in the State of Delaware and has the same ultimate parent entity (as that term is defined in the HSR Act) as T-Mobile Parties, (ii) the T-Mobile Parties furnish the Seller with reasonably satisfactory assurance of performance of this Agreement and the other Transaction Documents, and joinder to this Agreement and the other Transaction Documents (including pursuant to which such assignee, transferee or delegee makes the representations and warranties of the T-Mobile Parties in Article 4 and agrees to be subject to the Seller’s right to confess judgement against such assignee, transferee or delegee pursuant to Section 2.1(b)(ii)(C)), by such assignee, transferee or delegee as a condition precedent to any such assignment, (iii) the assignment, transfer or delegation would not reasonably be expected to prevent or delay by more than twenty (20) days the FCC’s approval of the transactions contemplated hereby or the expiration or termination of the waiting period under the HSR Act, (iv) 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 Seller hereunder; and (v) subject to Sections 5.4(c) and 5.4(d) of this Agreement and taking actions at the reasonable request and expense of the T-Mobile Parties as are reasonably necessary to effect an assignment pursuant to this Section 9.1(b), the T-Mobile Parties shall be solely responsible for any modifications of the FCC Applications necessary to effect the assignment of rights contemplated by this Section 9.1(b).

Section 9.2Further Assurances

Section 9.3Entire Agreement; Amendment

expand, limiting or otherwise modify the rights and obligations of the Parties or their Affiliates under the Existing Lease.

(b)This Agreement shall not be amended or modified except by written instrument duly executed by each of the Parties.

Section 9.4Waiver

Section 9.5Notices

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

Email: nancy.victory@us.dlapiper.com and marc.samuel@us.dlapiper.com

If to the Seller, to:

LB License Co, LLC

701 Brickell Ave, Suite 1700

Miami, FL 33131

Attention: Monish Kundra

Phone: (703) 519-3029

Email: monish.kundra@colcap.com

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

Hogan Lovells US LLP

8350 Broad Street, 17th Floor
Tysons, VA 22102

Attention: Randy Segal

Email: randy.segal@hoganlovells.com

and

Jenner & Block LLP

1099 New York Avenue, NW, Suite 900

Washington, DC 20001-4412

Attention: Trey Hanbury

Email: thanbury@jenner.com

Section 9.6Governing Law; Venue; Waiver of Jury Trial

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 (II) ACKNOWLEDGES THAT IT AND THE OTHER PARTIES 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

Section 9.8United States Dollars; Headings, Gender, “Person,” and “including”

Section 9.9Severability

Section 9.10Counterparts and Electronic Signatures

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

Section 9.12Bulk Transfer Laws

Section 9.13Construction of “Seller License”

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

IN WITNESS WHEREOF, the parties have duly executed this Agreement as of the date first above written.

T-MOBILE USA, INC. LB LICENSE CO, LLC

By: /s/ Chief Financial Officer ________    By: /s/ Monish Kundra_________________
Name:    Peter Osvaldik                Name:    Monish Kundra
Title:     Chief Financial Officer        Title: Authorized Signatory

T-MOBILE LICENSE LLC

By: /s/ Chief Financial Officer ________
Name:    Peter Osvaldik
Title:     Chief Financial Officer

[Signature Page to License Purchase Agreement]

SCHEDULE A

Seller Licenses

FCC Callsign

Market Number - Market Name

Block

Service

Licensee/Seller

Purchase Price Allocation*

WQZM718

PEA024 - Saint Louis, MO

600 MHz

LB License Co, LLC

WQZM719

PEA024 - Saint Louis, MO

600 MHz

LB License Co, LLC

WQZM720

PEA027 - Salt Lake City, UT

600 MHz

LB License Co, LLC

WQZM721

PEA011 - Atlanta, GA

600 MHz

LB License Co, LLC

WQZM724

PEA004 - San Francisco, CA

600 MHz

LB License Co, LLC

WQZM726

PEA021 - Tampa, FL

600 MHz

LB License Co, LLC

WQZM728

PEA037 - Columbus, OH

600 MHz

LB License Co, LLC

WQZM729

PEA037 - Columbus, OH

600 MHz

LB License Co, LLC

WQZM731

PEA017 - Minneapolis-St. Paul, MN

600 MHz

LB License Co, LLC

WQZM732

PEA016 - Seattle, WA

600 MHz

LB License Co, LLC

WQZM733

PEA006 - Philadelphia, PA

600 MHz

LB License Co, LLC

WQZM734

PEA005 - Baltimore, MD-Washington, DC

600 MHz

LB License Co, LLC

WQZM735

PEA008 - Dallas, TX

600 MHz

LB License Co, LLC

WQZM736

PEA008 - Dallas, TX

600 MHz

LB License Co, LLC

WQZM737

PEA008 - Dallas, TX

600 MHz

LB License Co, LLC

WQZM740

PEA015 - Phoenix, AZ

600 MHz

LB License Co, LLC

SCHEDULE B

Certain Undertakings; Burdensome Condition

EXHIBIT A

FORM OF INSTRUMENT OF ASSIGNMENT

EXHIBIT B-1

CONFESSION OF JUDGMENT

EXHIBIT B-2

FORM OF CONFESSION OF JUDGMENT AFFIDAVIT

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, 2022, 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
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
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
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, 2022, including those that may no longer be subject to reporting as provided by Regulation S-X Rule 13-01:


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

The following securities (the “Sprint Communications Senior Notes”) issued by Sprint Communications LLC, a Kansas limited liability company and wholly-owned subsidiary of the Company, were outstanding as of September 30, 2022, including those that may no longer be subject to reporting as provided by Regulation S-X Rule 13-01:


Description of Notes
6.000% senior notes due 2022

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, 2022, 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

The following securities (collectively, the “Sprint Spectrum Notes”) issued by Sprint Spectrum Co LLC (a Delaware limited liability company), Sprint Spectrum Co II LLC (a Delaware limited liability company), Sprint Spectrum Co III LLC (a Delaware limited liability company), each a wholly-owned subsidiary of the Company, were outstanding as of September 30, 2022, including those that may no longer be subject to reporting as provided by Regulation S-X Rule 13-01:


Description of Notes
4.738% Series 2018-1 A-1 Notes due 2025
5.152% Series 2018-1 A-2 Notes due 2028

Obligors

As of September 30, 2022, the obligors under the T-Mobile USA Senior Notes consisted of the Company, as a guarantor, and its subsidiaries listed in the following table.


Name of Subsidiary	Jurisdiction of Organization	Obligor Type
American Telecasting of Seattle, LLC	Delaware	Guarantor
APC Realty and Equipment Company, LLC	Delaware	Guarantor
Assurance Wireless of South Carolina, LLC	Delaware	Guarantor
Assurance Wireless USA, L.P.	Delaware	Guarantor
ATI Sub, LLC	Delaware	Guarantor
Clear Wireless LLC	Nevada	Guarantor
Clearwire Communications LLC	Delaware	Guarantor
Clearwire Hawaii Partners Spectrum, LLC	Nevada	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
Clearwire XOHM LLC	Delaware	Guarantor
Fixed Wireless Holdings, LLC	Delaware	Guarantor
IBSV LLC	Delaware	Guarantor
MetroPCS California, LLC	Delaware	Guarantor
MetroPCS Florida, LLC	Delaware	Guarantor
MetroPCS Georgia, LLC	Delaware	Guarantor
MetroPCS Massachusetts, LLC	Delaware	Guarantor
MetroPCS Michigan, LLC	Delaware	Guarantor
MetroPCS Nevada, LLC	Delaware	Guarantor
MetroPCS New York, LLC	Delaware	Guarantor
MetroPCS Pennsylvania, LLC	Delaware	Guarantor
MetroPCS Texas, LLC	Delaware	Guarantor
Nextel Retail Stores, LLC	Delaware	Guarantor
Nextel South Corp.	Georgia	Guarantor
Nextel Systems, LLC	Delaware	Guarantor
Nextel West Corp.	Delaware	Guarantor
NSAC, LLC	Delaware	Guarantor
PCTV Gold II, LLC	Delaware	Guarantor
People’s Choice TV of Houston, LLC	Delaware	Guarantor
PRWireless PR, LLC	Delaware	Guarantor
PushSpring, LLC	Delaware	Guarantor
SIHI New Zealand Holdco, Inc.	Kansas	Guarantor
Sprint Capital Corporation	Delaware	Guarantor
Sprint Communications LLC	Kansas	Guarantor
Sprint Communications Company L.P.	Delaware	Guarantor


Sprint Communications Company of New Hampshire, Inc.	New Hampshire	Guarantor
Sprint Communications Company of Virginia, Inc.	Virginia	Guarantor
Sprint International Communications Corporation	Delaware	Guarantor
Sprint International Holding, Inc.	Kansas	Guarantor
Sprint International Incorporated	Delaware	Guarantor
Sprint International Network Company LLC	Delaware	Guarantor
Sprint LLC	Delaware	Guarantor
Sprint PCS Assets, L.L.C.	Delaware	Guarantor
Sprint Solutions, Inc.	Delaware	Guarantor
Sprint Spectrum LLC	Delaware	Guarantor
Sprint Spectrum Realty Company, LLC	Delaware	Guarantor
Sprint/United Management Company	Kansas	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
USST of Texas, Inc.	Texas	Guarantor
Utelcom LLC	Kansas	Guarantor
VMU GP, LLC	Delaware	Guarantor
WBSY Licensing, LLC	Delaware	Guarantor
Wireline Leasing Co., Inc.	Delaware	Guarantor

As of September 30, 2022, 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 Kansas limited liability company) as guarantors.

As of September 30, 2022, the obligors under the Sprint Communications Senior Notes consisted of the Company, as a guarantor; Sprint Communications LLC (a Kansas limited liability company), as issuer and T-Mobile USA, Inc. (a Delaware corporation) and Sprint LLC (a Delaware limited liability company) as guarantors.

As of September 30, 2022, 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 Kansas limited liability company) as guarantors.

As of September 30, 2022, the obligors under the Sprint Spectrum Notes consisted of Sprint Spectrum Co LLC (a Delaware limited liability company), Sprint Spectrum Co II LLC (a Delaware limited liability company), Sprint Spectrum Co III LLC (a Delaware limited liability company), as co-issuers and Sprint Spectrum License Holder LLC (a Delaware limited liability company), Sprint Spectrum License Holder II LLC (a Delaware limited liability company), Sprint Spectrum License Holder III LLC (a Delaware limited liability company), Sprint Spectrum PledgeCo LLC (a Delaware limited liability company), Sprint Spectrum PledgeCo II LLC (a Delaware limited liability company) and Sprint Spectrum PledgeCo III LLC (a Delaware limited liability company) as guarantors.

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 27, 2022


/s/ G. Michael Sievert
G. Michael Sievert Chief Executive Officer

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.;

(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 27, 2022


/s/ Peter Osvaldik
Peter Osvaldik Executive Vice President and Chief Financial Officer

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, 2022, 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 27, 2022


/s/ G. Michael Sievert
G. Michael Sievert Chief Executive Officer

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, 2022, 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 27, 2022


/s/ Peter Osvaldik
Peter Osvaldik Executive Vice President and Chief Financial Officer