10-K – 2026-02-11 – tmus-20251231.htm

We include options to extend or terminate a lease when we are reasonably certain that we will exercise that option. We consider several factors in assessing whether renewal periods are reasonably certain of being exercised, including the continued maturation of our nationwide network, technological advances within the telecommunications industry and the availability of alternative sites. We have generally concluded we are not reasonably certain to exercise the options to extend or terminate our leases. Therefore, as of the lease commencement date, our lease terms generally do not include these options.

In determining the discount rate used to measure the right-of-use asset and lease liability, we use rates implicit in the lease, or if not readily available, we use our incremental borrowing rate. Our incremental borrowing rate is based on an estimated secured rate comprised of a risk-free rate plus a credit spread as secured by our assets. Determining a credit spread as secured by our assets may require judgment.

Certain of our lease agreements include rental payments based on changes in the consumer price index (“CPI”). Lease liabilities are not remeasured as a result of changes in the CPI; instead, changes in the CPI are treated as variable lease payments and are excluded from the measurement of the right-of-use asset and lease liability. These payments are recognized in the period in which the related obligation is incurred. Our lease agreements do not contain any material residual value guarantees or material restrictive covenants.

Generally, we elected the practical expedient to not separate lease and non-lease components in arrangements. We did not elect the short-term lease recognition exemption; as such, leases with terms shorter than 12 months are included as a right-of-use asset and lease liability.

Rental revenues and expenses associated with co-location tower sites are presented on a net basis under Topic 842. See Note 17 – Leases for further information.

Cell Tower Monetization Transactions

In 2012, we entered into a prepaid master lease arrangement in which we as the lessor provided the rights to utilize tower sites and we leased back space on certain of those towers. Prior to our merger (the “Sprint Merger”) with Sprint Corporation (“Sprint”), Sprint entered into a similar lease-out and leaseback arrangement that we assumed in the Sprint Merger.

These arrangements are treated as failed sale leasebacks in which the proceeds received are reported as a financing obligation. The principal payments on the tower obligations are included in Other, net within Net cash used in financing activities on our Consolidated Statements of Cash Flows. Our historical tower site asset costs are reported in Property and equipment, net on our Consolidated Balance Sheets and are depreciated. See Note 10 – Tower Obligations for further information.

Sprint Retirement Pension Plan

We provide the Sprint Retirement Pension Plan (the “Pension Plan”), which is a defined benefit pension plan providing postretirement benefits to certain employees. As of December 31, 2005, the Pension Plan was amended to freeze benefit plan accruals for participants.

The investments in the Pension Plan are measured at fair value on a recurring basis each quarter using quoted market prices or the net asset value per share as a practical expedient. The projected benefit obligations associated with the Pension Plan are
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Index for Notes to the Consolidated Financial Statements

determined based on actuarial models utilizing mortality tables and discount rates applied to the expected benefit term. See Note 13 – Employee Compensation and Benefit Plans for further information on the Pension Plan.

Advertising Expense

We expense the cost of advertising and other promotional expenditures to market our services and products as incurred. For the years ended December 31, 2025, 2024 and 2023, advertising expenses included in Selling, general and administrative expenses on our Consolidated Statements of Comprehensive Income were $ 3.7 billion, $ 3.1 billion and $ 2.5 billion, respectively.

Income Taxes

Deferred tax assets and liabilities are recognized based on temporary differences between the consolidated financial statements and tax bases of assets and liabilities using enacted tax rates expected to be in effect when these differences are realized. A valuation allowance is recorded when it is more likely than not that some portion or all of a deferred tax asset will not be realized. The ultimate realization of a deferred tax asset depends on the ability to generate sufficient taxable income of the appropriate character and in the appropriate taxing jurisdictions within the carryforward periods available.

We account for uncertainty in income taxes recognized on our consolidated financial statements in accordance with the accounting guidance for the financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. We assess whether it is more likely than not that a tax position will be sustained upon examination based on the technical merits of the position and adjust the unrecognized tax benefits in light of changes in facts and circumstances, such as changes in tax law, interactions with taxing authorities and developments in case law.

Other Comprehensive Income

Other comprehensive income primarily consists of adjustments, net of tax, related to reclassification of loss from cash flow hedges, fair value hedges, foreign currency translation, pension and other postretirement benefits. This is reported in Accumulated other comprehensive loss as a separate component of stockholders’ equity until realized in earnings.

Stock-Based Compensation

Stock-based compensation expense for stock awards, which include restricted stock units (“RSUs”) and performance-based restricted stock units (“PRSUs”), is measured at fair value on the grant date and recognized as expense, net of expected forfeitures, over the related service period. The fair value of stock awards is based on the closing price of our common stock on the date of grant, adjusted for expected dividend yield. RSUs are recognized as expense using the straight-line method. PRSUs are recognized as expense following a graded vesting schedule with their performance reassessed and updated on a quarterly basis, or more frequently as changes in facts and circumstances warrant.

Stockholder Return Programs

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”). On September 6, 2023, our Board of Directors authorized a stockholder return program of up to $ 19.0  billion through December 31, 2024 (the “2023-2024 Stockholder Return Program”). The 2023-2024 Stockholder Return Program consisted of additional repurchases of shares of our common stock and the payment of cash dividends. On December 13, 2024, we announced that our Board of Directors authorized our 2025 Stockholder Return Program of up to $ 14.0  billion through December 31, 2025 (the “2025 Stockholder Return Program”). The 2025 Stockholder Return Program consisted of additional repurchases of shares of our common stock and the payment of cash dividends. On December 11, 2025, we announced that our Board of Directors authorized our 2026 Stockholder Return Program of up to $ 14.6  billion that will run through December 31, 2026 (the “2026 Stockholder Return Program”). The 2026 Stockholder Return Program is expected to consist of additional repurchases of shares of our common stock and the payment of cash dividends. The amount available under the 2026 Stockholder Return Program for share repurchases will be reduced by the amount of any cash dividends declared and paid by us.

The cost of repurchased shares, including equity reacquisition costs and related taxes, is included in Treasury stock on our 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 Consolidated Balance Sheets. Cash payments to reacquire our shares, including equity reacquisition costs and related taxes, are included in Repurchases of common stock on our Consolidated Statements of Cash Flows.
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Index for Notes to the Consolidated Financial Statements

Dividends declared are included as a reduction to Retained earnings on our Consolidated Balance Sheets. We recognize a liability for dividends declared but for which cash has not been paid in Other current liabilities on our Consolidated Balance Sheets. Dividend cash payments to stockholders are included in Net cash used in financing activities on our Consolidated Statements of Cash Flows.

See Note 15 - Stockholder Return Programs for further information.

Earnings Per Share

Basic earnings per share is computed by dividing Net income attributable to common stockholders by the weighted-average number of common shares outstanding for the period. Diluted earnings per share is computed by giving effect to all potentially dilutive common shares outstanding during the period. Potentially dilutive common shares consist of outstanding stock options, RSUs and PRSUs, calculated using the treasury stock method. See Note 16 – Earnings Per Share for further information.

Variable Interest Entities

VIEs are entities that lack sufficient equity to permit the entity to finance its activities without additional subordinated financial support from other parties, have equity investors that do not have the ability to make significant decisions relating to the entity's operations through voting rights, do not have the obligation to absorb the expected losses or do not have the right to receive the residual returns of the entity. The most common type of VIE is a special purpose entity (“SPE”). SPEs are commonly used in securitization transactions in order to isolate certain assets and distribute the cash flows from those assets to investors. SPEs are generally structured to insulate investors from claims on the SPEs’ assets by creditors of other entities, including the creditors of the seller of the assets, these SPEs are commonly referred to as being bankruptcy remote.

The primary beneficiary is required to consolidate the assets and liabilities of a VIE. The primary beneficiary is the party which has both the power to direct the activities of an entity that most significantly impact the VIE's economic performance, and through its interests in the VIE, the obligation to absorb losses or the right to receive benefits from the VIE which could potentially be significant to the VIE.

In assessing which party is the primary beneficiary, all the facts and circumstances are considered, including each party’s role in establishing the VIE and its ongoing rights and responsibilities. This assessment includes, first, identifying the activities that most significantly impact the VIE’s economic performance; and second, identifying which party, if any, has power over those activities. In general, the parties that make the most significant decisions affecting the VIE (such as asset managers and servicers) or have the right to unilaterally remove those decision-makers are deemed to have the power to direct the activities of a VIE.

We consolidate VIEs when we are deemed to be the primary beneficiary or when the VIE cannot be deconsolidated. See Note 5 – Sales of Certain Receivables , Note 9 – Debt and Note 10 – Tower Obligations for further information.

Accounting Pronouncements Adopted During the Current Year

Income Tax Disclosures

In December 2023, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2023-09, “Income Taxes (Topic 740): Improvements to Income Tax Disclosures.” The standard enhances income tax disclosure requirements for all entities by requiring specified categories and greater disaggregation within the rate reconciliation table, disclosure of income taxes paid by jurisdiction, and providing clarification on uncertain tax positions and related financial statement impacts. We adopted the standard for our fiscal year 2025 annual financial statements. The guidance was applied retrospectively, and the required disclosures have been included in the Notes to the Consolidated Financial Statements. See Note 14 – Income Ta xes for further information.

Credit Losses: Purchased Loans

In November 2025, the FASB issued ASU 2025-08, “Financial instruments – Credit Losses (Topic 326): Purchased Loans,” which amends the guidance in ASC 326 on the accounting for certain purchased loans. Under the ASU, entities must account for acquired loans, excluding credit card, that meet certain criteria at acquisition (purchased seasoned loans) by recognizing them at their purchase price plus an allowance for expected credit losses. Purchased seasoned loans are defined as either: (1) non-purchased credit deteriorated loans that are obtained in a business combination, or (2) non-purchased credit deteriorated loans that (a) are obtained in an asset acquisition or upon consolidation of a variable interest entity that is not a business and (b)
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Index for Notes to the Consolidated Financial Statements

are acquired more than 90 days after their origination date by a transferee that was not involved in their origination. We adopted the standard for our fiscal year 2025 annual financial statements. This guidance was applied retrospectively, and the adoption of the standard did not have a material impact on our Consolidated Financial Statements.

Accounting Pronouncements Not Yet Adopted

Disaggregation of Income Statement Expenses

In November 2024, the FASB issued ASU 2024-03, “Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses.” The standard requires that public business entities disclose additional information about specific expense categories in the notes to financial statements for interim and annual reporting periods. The standard will become effective for us for our fiscal year 2027 annual financial statements and interim financial statements thereafter and may be applied prospectively to periods after the adoption date or retrospectively for all prior periods presented in the financial statements, with early adoption permitted. We plan to adopt the standard when it becomes effective for us beginning in our fiscal year 2027 annual financial statements, and we are currently evaluating the impact this guidance will have on the disclosures included in the Notes to the Consolidated Financial Statements.

Internal-Use Software Accounting and Disclosures

In September 2025, the FASB issued ASU 2025-06, “Intangibles—Goodwill and Other—Internal-Use Software (Subtopic 350-40): Targeted Improvements to the Accounting for Internal-Use Software.” The amendments remove all references to project stages in ASC 350-40, clarify the threshold entities apply to begin capitalizing costs and address challenges arising from the evolution of software development practices. The new guidance modernizes accounting for software developed using incremental and iterative methods, where the existing model provided limited direction on when capitalization should begin. The ASU also specifies that the disclosures under ASC 360-10, “Property, Plant, and Equipment—Overall,” apply to capitalized software costs accounted for under ASC 350-40, regardless of how those costs are presented in the financial statements. The standard will become effective for our fiscal year 2028 annual financial statements and interim financial statements thereafter and may be applied prospectively to periods after the adoption date, retrospectively for all prior periods presented in the financial statements or using a modified retrospective transition approach with early adoption permitted. We do not expect the adoption to have a material impact on our Consolidated Financial Statements and related disclosures.

Interim Reporting

In December 2025, the FASB issued ASU 2025-11, “Interim Reporting (Topic 270): Narrow-Scope Improvements.” The standard improves the navigability of interim disclosures, clarifies when Topic 270 applies and provides additional interim disclosure guidance, including a principle to disclose material events since the most recent annual reporting period. The amendments do not change the underlying objectives of interim reporting but are designed to enhance clarity in application. The standard is effective for us beginning January 1, 2028, with early adoption permitted, and may be applied prospectively or retrospectively. We evaluated this standard and concluded our current interim reporting disclosures are consistent with this standard. Accordingly, we do not expect the adoption of this standard to have a material impact on our interim reporting disclosures.

Note 2 – Business Combinations

Acquisition of Ka’ena Corporation

On March 9, 2023, we entered into a merger and unit purchase agreement (the “Merger and Unit Purchase Agreement”) for the acquisition of 100 % of the outstanding equity of Ka’ena Corporation and its subsidiaries, including, among others, Mint Mobile LLC (collectively, “Ka’ena”), for a maximum purchase price of $ 1.35  billion to be paid out 39 % in cash and 61 % in shares of T-Mobile common stock (the “Ka’ena Acquisition”). On March 13, 2024, we entered into Amendment No. 1 to the Merger and Unit Purchase Agreement, which amended, among other things, certain mechanics of the payment of the purchase consideration for the Ka’ena Acquisition, which resulted in a nominal increase in the percentage of cash compared to shares of T-Mobile common stock to be paid out as part of the total purchase price.

Upon the completion of certain customary closing conditions, including the receipt of certain regulatory approvals, on May 1, 2024 (the “Ka’ena Acquisition Date”), we completed the Ka’ena Acquisition, and as a result, Ka’ena became a wholly owned subsidiary of T-Mobile. Concurrently, and as agreed upon through the Merger and Unit Purchase Agreement, T-Mobile and Ka’ena entered into certain separate transactions, including the effective settlement of the preexisting wholesale arrangement
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Index for Notes to the Consolidated Financial Statements

between T-Mobile and Ka’ena and agreements with certain of the sellers to provide services to T-Mobile during the post-acquisition period.

Ka’ena is a provider of prepaid mobile services in the U.S. through its primary brands, Mint Mobile and Ultra Mobile, and also offers a selection of wireless devices, including handsets and other mobile communication devices. Prior to the Ka’ena Acquisition, Ka’ena was a wholesale partner of the Company for which we recognized service revenues within Wholesale and other service revenues on our Consolidated Statements of Comprehensive Income, and for which Ka’ena incurred related expenses for the use of our network. On the Ka’ena Acquisition Date, this relationship was effectively terminated, and the Company acquired Ka’ena’s prepaid customer relationships and began to recognize service revenues associated with these customers within Prepaid revenues and operating expenses primarily within Selling, general and administrative expenses on our Consolidated Statements of Comprehensive Income subsequent to the Ka’ena Acquisition Date. The Ka’ena Acquisition enhances the Company’s position as a leading prepaid wireless carrier by diversifying our brand identities, enhancing our distribution footprint and preserving the value of our relationship with Ka’ena through its acquisition, including the acquisition of its prepaid customer relationships.

The financial results of Ka’ena from the Ka’ena Acquisition Date through December 31, 2024, were not material to our Consolidated Statements of Comprehensive Income, nor were they material to our prior period consolidated results on a pro forma basis. Costs for the Ka’ena Acquisition did not have a material impact on our Consolidated Statements of Comprehensive Income.

Consideration Transferred

In accordance with the terms of the Merger and Unit Purchase Agreement, the total purchase price is variable, dependent upon specified performance indicators of Ka’ena, and consists of an upfront payment on the Ka’ena Acquisition Date and an earnout payable in the third quarter of 2026. On June 30, 2025, we amended the Merger and Unit Purchase Agreement to set the calculation of the earnout as the difference between the maximum purchase price of $ 1.35  billion and the upfront payment, as adjusted, and removed the requirement for Ka’ena to achieve specified performance indicators.

On the Ka’ena Acquisition Date and in satisfaction of the upfront payment, we transferred $ 420  million in cash and 3,264,952 shares of T-Mobile common stock valued at $ 536  million as determined based on its closing market price on April 30, 2024, for a total payment fair value of $ 956  million. An additional amount of the upfront payment payable to certain sellers was deferred and may be paid through the first quarter of 2026. As of the Ka’ena Acquisition Date, we recognized a liability of $ 27  million for the fair value of this deferred amount, which is included in the fair value of consideration transferred in the Ka’ena Acquisition. Furthermore, a portion of the upfront payment made on the Ka’ena Acquisition Date was for the settlement of the preexisting wholesale relationship with Ka’ena and excluded from the fair value of consideration transferred in the Ka’ena Acquisition. The amount of the upfront payment was subject to customary adjustments and as a result of such adjustments, $ 17  million of the upfront payment was returned to T-Mobile during the fourth quarter of 2024, which resulted in a commensurate increase in the maximum amount payable in satisfaction of the earnout.

Based on the amount of the adjusted upfront payment, an additional $ 420  million in future cash and T-Mobile common stock is payable in satisfaction of the earnout.

• $ 251  million of the earnout amount is payment for the acquired Ka’ena business, and we recognized a liability of $ 191  million for the fair value of such deferred consideration as of the Ka’ena Acquisition Date. This liability was adjusted to fair value at each reporting date through June 30, 2025, with a corresponding offset recorded to Selling, general and administrative expenses on our Consolidated Statements of Comprehensive Income.
• $ 169  million of the earnout amount is payment for services to be provided to T-Mobile by certain of the sellers during the post-acquisition period, as well as the replacement of equity awards of certain Ka’ena employees. We recognize expenses as such services are provided during the post-acquisition period within Selling, general and administrative expenses on our Consolidated Statements of Comprehensive Income, with a corresponding offset to Other current liabilities and Other long-term liabilities on our Consolidated Balance Sheets.

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Index for Notes to the Consolidated Financial Statements

The acquisition-date fair value of consideration transferred in the Ka’ena Acquisition is comprised of the following:

(in millions) May 1, 2024
Fair value of T-Mobile common stock issued to Ka’ena stockholders related to the adjusted upfront payment $ 527  
Fair value of cash paid to Ka’ena stockholders related to the adjusted upfront payment 396  
Fair value of deferred earnout consideration 191  
Fair value of deferred other consideration 27  
Total fair value of consideration exchanged $ 1,141  

The fair value of the deferred earnout consideration was estimated using the income approach, a probability-weighted discounted cash flow model, whereby a Monte Carlo simulation method estimated the probability of different outcomes. This fair value measurement is based on significant inputs not observable in the market and, therefore, represents a Level 3 measurement as defined in ASC 820. The key assumptions in applying the income approach for the deferred earnout consideration include forecasted Ka’ena financial information, primarily revenue, marketing costs and customer metrics, the probability of achieving the forecasted financial information and the discount rate.

As of December 31, 2025, $ 242 million of liabilities for deferred earnout consideration and $ 157 million of liabilities for post-acquisition services were presented within current liabilities on our Consolidated Balance Sheets, and as of December 31, 2024, $ 202  million of liabilities for deferred consideration and $ 80  million of liabilities for post-acquisition services were presented within long-term liabilities on our Consolidated Balance Sheets.

Fair Value of Assets Acquired and Liabilities Assumed

We accounted for the Ka’ena Acquisition as a business combination. The identifiable assets acquired and liabilities assumed from Ka’ena were recorded at their fair values as of the Ka’ena Acquisition Date and consolidated with those of T-Mobile. Assigning fair values to the assets acquired and liabilities assumed at the Ka’ena Acquisition Date required the use of judgment regarding estimates and assumptions. For the fair values of the assets acquired and liabilities assumed, we used the cost and income approaches.

The following table summarizes the assigned fair values for each class of assets acquired and liabilities assumed at the Ka’ena Acquisition Date, as adjusted during the measurement period, which closed on April 30, 2025, based on information identified after the Ka’ena Acquisition Date. We retained the services of certified valuation specialists to assist with assigning values to certain acquired assets.

(in millions) May 1, 2024
Cash and cash equivalents $ 24  
Accounts receivable 34  
Inventory 3  
Prepaid expenses 5  
Other current assets 10  
Property and equipment 1  
Operating lease right-of-use assets 2  
Goodwill 777  
Other intangible assets 740  
Other assets 51  
Total assets acquired 1,647  
Accounts payable and accrued liabilities 42  
Deferred revenue 297  
Short-term operating lease liabilities 1  
Deferred tax liabilities 83  
Operating lease liabilities 2  
Other long-term liabilities 81  
Total liabilities assumed 506  
Total consideration transferred $ 1,141  

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Index for Notes to the Consolidated Financial Statements

Intangible Assets

Goodwill was assigned to our Wireless segment and has an assigned value of $ 777 million, which represents the excess of the consideration transferred over the fair values of assets acquired and liabilities assumed. The assigned goodwill recognized includes expected growth in customers and service revenues to be achieved from the operations of the combined company, the assembled workforce of Ka’ena and intangible assets that do not qualify for separate recognition. Of the total amount of assigned goodwill resulting from the Ka’ena Acquisition of $ 777 million, the amount deductible for tax purposes is $ 121 million.

Other intangible assets acquired primarily include $ 545 million of customer relationships with an estimated weighted-average useful life of six years , $ 70 million of tradenames with an estimated weighted-average useful life of eight years and $ 125 million of other intangible assets with an estimated weighted-average useful life of four years . The customer relationships are being amortized using the sum-of-the-years digits method over their estimated useful lives, and the tradenames are being amortized on a straight-line basis over their estimated useful lives.

The fair value of customer relationships was estimated using the income approach. This fair value measurement is based on significant inputs not observable in the market, and, therefore, represents a Level 3 measurement as defined in ASC 820. The key assumptions in applying the income approach include forecasted customer churn rates, revenue over an estimated period of time, the discount rate and estimated income taxes.

Acquisition of UScellular Wireless Business

On May 24, 2024, we entered into a securities purchase agreement with United States Cellular Corporation (“UScellular”), Telephone and Data Systems, Inc., and USCC Wireless Holdings, LLC for the acquisition of substantially all of UScellular’s wireless operations and select AWS, PCS, 600 MHz, 700 MHz and other spectrum assets for an aggregate purchase price of approximately $ 4.4  billion, payable in cash and the assumption of up to $ 2.0  billion of debt through exchange offers to certain UScellular debtholders.

On May 23, 2025, we launched exchange offers (the “Exchange Offers”) for any and all of certain outstanding senior notes of UScellular for new notes of T-Mobile with the same interest rate, interest payment dates, maturity dates and redemption terms as each corresponding series of senior notes of UScellular. In conjunction with the Exchange Offers, we also solicited consents for each series of the outstanding senior notes of UScellular to effect a number of amendments to the applicable indenture under which each such series of notes were issued and are governed (the “Consent Solicitations”). The consummation of the Exchange Offers and Consent Solicitations were subject to the closing of the UScellular acquisition, which occurred on August 1, 2025.

On July 22, 2025, we entered into three separate asset purchase agreements for the acquisition of substantially all of the wireless operations assets (together with UScellular’s wireless operations and select spectrum assets, the “UScellular Wireless Business”) of each of Farmers Cellular Telephone Company, Inc., Iowa RSA No. 9 Limited Partnership and Iowa RSA No. 12 Limited Partnership (collectively, the “Iowa Entities”) for an aggregate purchase price of $ 175  million payable in cash. Prior to our acquisition of the Iowa Entities, UScellular held a minority interest in each of the Iowa Entities.

The UScellular Wireless Business offers a comprehensive range of wireless communications products and services. As a combined company, we expect to increase competition in the telecommunications industry, achieve synergies and enhance our rural 5G coverage with our combined network footprint. Following the closing of the transactions, UScellular and the Iowa Entities will retain ownership of their other spectrum licenses, as well as their towers.

On August 1, 2025, upon the completion of certain customary closing conditions, including the receipt of certain regulatory approvals (the “UScellular Acquisition Date”), we completed the acquisition of the UScellular Wireless Business (the “UScellular Acquisition”), and as a result, the UScellular Wireless Business became wholly owned by T-Mobile. In exchange, on the UScellular Acquisition Date, we transferred cash of $ 2.8  billion. Additionally, the closing of the UScellular Acquisition obligated us to execute the Exchange Offers. UScellular senior notes with an aggregate outstanding principal balance of $ 1.7  billion were subsequently exchanged for T-Mobile notes in the Exchange Offers. The obligation to execute the Exchange Offers was recorded as debt assumed in the UScellular Acquisition with an aggregate assigned fair value of $ 1.7  billion. On the UScellular Acquisition Date, UScellular changed its legal name to Array Digital Infrastructure, Inc.

On August 5, 2025, we issued debt with an aggregate principal balance of $ 1.7  billion in settlement of the Exchange Offers. The issued debt consisted of 6.700 % Senior Notes due 2033 in an aggregate principal amount of $ 489 million, 6.250 % Senior Notes due 2069 in an aggregate principal amount of $ 393 million, 5.500 % Senior Notes due March 2070 in an aggregate
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Index for Notes to the Consolidated Financial Statements

principal amount of $ 401 million and 5.500 % Senior Notes due June 2070 in an aggregate principal amount of $ 395 million. The notes rank equally with all other unsecured and unsubordinated indebtedness of T-Mobile USA, Inc.

On the UScellular Acquisition Date, we entered into a master license agreement to lease space on at least 2,100 towers being retained by UScellular and extended our tenancy term on approximately 600 additional towers where we are already leasing space from UScellular for 15 years post-closing. In addition, through the master license agreement, we leased space on approximately 1,800 additional UScellular towers on an interim basis for up to 30 months after the UScellular Acquisition Date. As a result of entering into the master license agreement, we recorded right-of use assets and lease liabilities of $ 1.0 billion each on the UScellular Acquisition Date, with a corresponding increase to both deferred tax liabilities and assets of $ 261 million. For towers where we were not leasing space prior to the UScellular Acquisition Date, the related balances have been included in the fair value of assets acquired and liabilities assumed.

The financial results of the UScellular Wireless Business from the UScellular Acquisition Date through December 31, 2025, were not material to our Consolidated Statements of Comprehensive Income, nor were they material to our prior period consolidated results on a pro forma basis. Transaction-related costs for the UScellular Acquisition did not have a material impact on our Consolidated Statements of Comprehensive Income.

Consideration Transferred

The acquisition-date fair value of consideration transferred in the UScellular Acquisition is comprised of the following:

(in millions) August 1, 2025
Fair value of cash paid on the UScellular Acquisition Date $ 2,811  
Fair value of T-Mobile replacement equity awards attributable to pre-combination service 44  
Total fair value of consideration exchanged $ 2,855  

The amount of cash paid on the UScellular Acquisition Date is subject to customary adjustments, which require agreement by the parties.

Fair Value of Assets Acquired and Liabilities Assumed

We have accounted for the UScellular Acquisition as a business combination. The identifiable assets acquired and liabilities assumed of the UScellular Wireless Business were recorded at their provisionally assigned fair values as of the UScellular Acquisition Date and consolidated with those of T-Mobile. Assigning fair values to the assets acquired and liabilities assumed at the UScellular Acquisition Date requires the use of judgment regarding estimates and assumptions. For the provisionally assigned fair values of the assets acquired and liabilities assumed, we used the cost, income and market approaches.

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Index for Notes to the Consolidated Financial Statements

The following table summarizes the provisionally assigned fair values for each class of assets acquired and liabilities assumed at the UScellular Acquisition Date. We retained the services of certified valuation specialists to assist with assigning values to certain acquired assets and liabilities assumed. We are in the process of finalizing the valuation of the assets acquired and liabilities assumed. Therefore, the provisionally assigned fair values set forth below are subject to adjustment as additional information is obtained.

(in millions) August 1, 2025
Cash and cash equivalents $ 12  
Accounts receivable 317  
Equipment installment plan receivables 503  
Inventory 129  
Prepaid expenses 63  
Other current assets 33  
Property and equipment 1,448  
Operating lease right-of-use assets (1)
1,199  
Goodwill 219  
Spectrum licenses 1,730  
Other intangible assets 397  
Equipment installment plan receivables due after one year 388  
Deferred tax assets 64  
Other assets 125  
Total assets acquired 6,627  
Accounts payable and accrued liabilities 296  
Deferred revenue 275  
Short-term operating lease liabilities (1)
179  
Other current liabilities 114  
Long-term debt (2)
1,653  
Operating lease liabilities (1)
1,029  
Other long-term liabilities 226  
Total liabilities assumed 3,772  
Total consideration transferred $ 2,855  

(1) Includes $ 749  million, $ 51  million and $ 698  million of Operating lease right-of-use assets, Short-term operating lease liabilities and Operating lease liabilities, respectively, for towers associated with the UScellular master license agreement where we were not leasing tower space prior to the UScellular Acquisition Date.
(2) The obligation to execute the Exchange Offers was recorded as debt assumed in the UScellular Acquisition with an aggregate assigned fair value of $ 1.7  billion.

Intangible Assets

Goodwill was assigned to our Wireless segment and has a provisionally assigned value of $ 219 million, which represents the excess of the consideration transferred over the fair values of assets acquired and liabilities assumed. The provisionally assigned goodwill recognized includes synergies expected to be achieved from the operations of the combined company, the assembled workforce of UScellular and intangible assets that do not qualify for separate recognition. Of the total provisionally assigned amount of goodwill resulting from the UScellular Acquisition of $ 219 million, the preliminary amount deductible for tax purposes is $ 32 million. Expected synergies from the UScellular Acquisition include the cost savings from the planned integration of network infrastructure, facilities, personnel and systems.

Other intangible assets acquired include $ 379  million of customer relationships with an estimated weighted-average useful life of ten years and $ 18  million of tradenames with an estimated weighted-average useful life of one year . The customer relationships are amortized using the sum-of-the-years digits method over their estimated useful lives and the tradenames are amortized on a straight-line basis over their estimated useful lives. The preliminary fair value of customer relationships was estimated using the income approach. This fair value measurement is based on significant inputs not observable in the market, and, therefore, represents a Level 3 measurement as defined in ASC 820. The key assumptions in applying the income approach include revenue over an estimated period of time, the discount rate, forecasted expenses and contributory asset charges.

The preliminary fair value of Spectrum licenses of $ 1.7  billion was estimated using the market and income approach, specifically a Greenfield model. This fair value measurement is based on significant inputs not observable in the market and, therefore, represents a Level 3 measurement as defined in ASC 820. The key assumptions in applying the income approach
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Index for Notes to the Consolidated Financial Statements

include the discount rate, estimated market share, estimated capital and operating expenditures, forecasted service revenue and a long-term growth rate for a hypothetical market participant that enters the wireless industry and builds a nationwide wireless network.

Acquired Receivables

The fair value of the assets acquired includes Accounts receivable of $ 317 million and EIP receivables of $ 891 million. The unpaid principal balance under these contracts as of the UScellular Acquisition Date was $ 328  million and $ 1.1  billion, respectively. The difference between the fair value and the unpaid principal balance primarily represents discounting for market interest rates and amounts expected to be uncollectible.

Acquisition of Vistar Media Inc.

On December 20, 2024, we entered into an agreement and plan of merger for the acquisition of 100 % of the outstanding capital stock of Vistar, a provider of technology solutions for digital-out-of-home advertisements (the “Vistar Acquisition”).

Upon the completion of certain customary closing conditions, including the receipt of certain regulatory approvals, on February 3, 2025 (the “Vistar Acquisition Date”), we completed the Vistar Acquisition, and as a result, Vistar became a wholly owned subsidiary of T-Mobile. In exchange, we transferred cash of $ 621 million. A portion of the payment made on the Vistar Acquisition Date was for the settlement of preexisting relationships with Vistar and is excluded from the fair value of consideration transferred.

The financial results of Vistar from the Vistar Acquisition Date through December 31, 2025, were not material to our Consolidated Statements of Comprehensive Income, nor were they material to our prior period consolidated results on a pro forma basis. Costs related to the Vistar Acquisition were not material to our Consolidated Statements of Comprehensive Income.

Fair Value of Assets Acquired and Liabilities Assumed

We have accounted for the Vistar Acquisition as a business combination. The identifiable assets acquired and liabilities assumed from Vistar were recorded at their provisionally assigned fair values as of the Vistar Acquisition Date and consolidated with those of T-Mobile. Assigning fair values to the assets acquired and liabilities assumed at the Vistar Acquisition Date requires the use of judgment regarding estimates and assumptions. For the provisionally assigned fair values of the assets acquired and liabilities assumed, we used the cost and income approaches.

The following table summarizes the provisionally assigned fair values for each class of assets acquired and liabilities assumed at the Vistar Acquisition Date. We are in the process of finalizing the valuation of the assets acquired and liabilities assumed, including income tax-related amounts. Therefore, the provisionally assigned fair values set forth below are subject to adjustment as additional information is obtained.

(in millions) February 3, 2025
Cash and cash equivalents $ 42  
Accounts receivable 157  

Prepaid expense and other current assets 2  

Property and equipment 1  
Operating lease right-of-use assets 1  
Goodwill 343  
Other intangible assets 264  

Total assets acquired 810  
Accounts payable and accrued liabilities 129  
Deferred revenue 1  
Deferred tax liabilities 61  
Operating lease liabilities 2  

Total liabilities assumed 193  
Total consideration transferred $ 617  

80

Index for Notes to the Consolidated Financial Statements

Intangible Assets

Goodwill was assigned to our Wireless segment and has a provisionally assigned value of $ 343 million, which represents the excess of the consideration transferred over the fair values of assets acquired and liabilities assumed. The provisionally assigned goodwill recognized includes expected growth in service revenues to be achieved from the operations of the combined company, the assembled workforce of Vistar and intangible assets that do not qualify for separate recognition.

Other intangible assets acquired include $ 201 million of customer relationships with an estimated weighted-average useful life of ten years , $ 8 million of tradenames with an estimated weighted-average useful life of four years and $ 55 million of other intangible assets with an estimated weighted-average useful life of four years . The customer relationships are amortized using the sum-of-the-years digits method over their estimated useful lives and the tradenames are amortized on a straight-line basis over their estimated useful lives.

The preliminary fair value of customer relationships was estimated using the income approach. This fair value measurement is based on significant inputs not observable in the market, and, therefore, represents a Level 3 measurement as defined in ASC 820. The key assumptions in applying the income approach include revenue over an estimated period of time, the discount rate, forecasted expenses and contributory asset charges.

Acquisition of Blis Holdco Limited

On February 18, 2025, we entered into a share purchase agreement for the acquisition of 100 % of the outstanding capital stock of Blis, a provider of advertising solutions (the “Blis Acquisition”).

Upon the completion of certain customary closing conditions, including the receipt of certain regulatory approvals, on March 3, 2025 (the “Blis Acquisition Date”), we completed the Blis Acquisition, and as a result, Blis became a wholly owned subsidiary of T-Mobile. In exchange, we transferred cash of $ 180  million. A portion of the payment made on the Blis Acquisition Date was for the settlement of preexisting relationships with Blis and is excluded from the fair value of consideration transferred.

The financial results of Blis from the Blis Acquisition Date through December 31, 2025, were not material to our Consolidated Statements of Comprehensive Income, nor were they material to our prior period consolidated results on a pro forma basis. Costs related to the Blis Acquisition were not material to our Consolidated Statements of Comprehensive Income.

We have accounted for the Blis Acquisition as a business combination. The fair value of consideration transferred as of the Blis Acquisition Date totaled $ 174  million. The identifiable assets acquired and liabilities assumed from Blis were recorded at their provisionally assigned fair values as of the Blis Acquisition Date and consolidated with those of T-Mobile. The provisionally assigned fair values of total assets acquired, including goodwill, and total liabilities assumed at the Blis Acquisition Date were $ 264  million and $ 90  million, respectively. Goodwill was assigned to our Wireless segment and has a provisionally assigned value of $ 105  million, which represents the excess of the consideration transferred over the fair values of assets acquired and liabilities assumed. The provisionally assigned goodwill recognized includes expected growth in service revenues to be achieved from the operations of the combined company, the assembled workforce of Blis and intangible assets that do not qualify for separate recognition.

We are in the process of finalizing the valuation of the assets acquired and liabilities assumed. Therefore, the provisionally assigned fair values above are subject to adjustment as additional information is obtained.

Note 3 – Joint Ventures

Lumos Joint Venture

On April 24, 2024, we entered into a definitive agreement with a fund operated by EQT, EQT Infrastructure VI (“Fund VI”), to establish a joint venture between us and Fund VI to acquire Lumos (“Lumos”), a fiber-to-the-home platform, from EQT’s predecessor fund, EQT Infrastructure III.

On April 1, 2025, we completed the joint acquisition of Lumos upon the completion of certain customary closing conditions, including the receipt of certain regulatory approvals. During the three months ended June 30, 2025, we invested $ 932  million to acquire a 50 % equity interest in the joint venture and 97,000 fiber customers. For the customers acquired, we recognized an intangible asset amortized using the sum-of-the-years digits method over a weighted-average useful life of nine years . Following the joint acquisition, Lumos transitioned to a wholesale model where we are the anchor tenant owning residential and small business customer relationships. The funds invested by us will be used by the joint venture to fund future fiber builds.
81

Index for Notes to the Consolidated Financial Statements

In addition, pursuant to the definitive agreement, we expect to make an additional capital contribution of approximately $ 500  million between 2027 and 2028 under the existing business plan.

Metronet Joint Venture

On July 18, 2024, we entered into a definitive agreement with KKR & Co. Inc. to establish a joint venture to acquire Metronet Holdings, LLC and certain of its affiliates (collectively, “Metronet”), a fiber-to-the-home platform.

On July 24, 2025, we completed the joint acquisition of Metronet upon the completion of certain customary closing conditions, including the receipt of certain regulatory approvals. During the three months ended September 30, 2025, we invested $ 4.6  billion to acquire a 50 % equity interest in the joint venture and 713,000 fiber customers. For the customers acquired, we recognized an intangible asset amortized using the sum-of-the-years digits method over a weighted-average useful life of ten years . Following the joint acquisition, Metronet became a wholesale services provider, and its residential fiber retail operations and customers transitioned to us. We do not anticipate making further capital contributions under the existing business plan.

Method of Accounting

We account for the Lumos and Metronet joint ventures under the equity method of accounting. We recognize revenues for fiber customers and the related wholesale costs paid to the joint ventures for network access within Postpaid revenues and Cost of services, respectively, on our Consolidated Statements of Comprehensive Income.

Note 4 – Receivables and Related Allowance for Credit Losses

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

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

Our portfolio of receivables is comprised of two portfolio segments: accounts receivable and EIP receivables.

Accounts Receivable Portfolio Segment

Accounts receivable balances are predominately comprised of amounts currently due from customers (e.g., for wireless communications services), device insurance administrators, wholesale partners, 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 is adjusted for asset-specific considerations, current economic conditions and reasonable and supportable forecasts.

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

We consider the need to adjust our estimate of credit losses for reasonable and supportable forecasts of future macroeconomic conditions. To do so, we monitor external forecasts of changes in real U.S. gross domestic product and forecasts of consumer credit behavior for comparable credit exposures.

EIP Receivables Portfolio Segment

Based upon customer credit profiles at the time of customer origination, as well as subsequent credit performance, we designate 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.

82

Index for Notes to the Consolidated Financial Statements

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

Installment loans acquired in the UScellular Acquisition are included in EIP receivables and generally have an initial term of 36 months. We applied our proprietary credit scoring model to the customers acquired in the UScellular Acquisition with an outstanding EIP receivable balance. Based on tenure, consumer credit risk score and credit profile, these acquired customers were classified into our customer classes of Prime or Subprime. Our proprietary credit scoring model is applied to all EIP arrangements originated after the UScellular Acquisition Date.

For EIP receivables acquired in the UScellular Acquisition, the difference between the fair value and unpaid principal balance of the loan at the acquisition date is accreted to interest income over the contractual life of the loan using the effective interest method. EIP receivables had a combined weighted-average effective interest rate of 10.3 % and 11.1 % as of December 31, 2025 and 2024, respectively.

The following table summarizes the EIP receivables, including imputed discounts and related allowance for credit losses:
(in millions) December 31,
2025 December 31,
2024

EIP receivables, gross $ 8,626   $ 7,402  
Unamortized imputed discount ( 566 ) ( 524 )
EIP receivables, net of unamortized imputed discount 8,060   6,878  
Allowance for credit losses ( 380 ) ( 290 )
EIP receivables, net of allowance for credit losses and imputed discount (1)
$ 7,680   $ 6,588  
Classified on our consolidated balance sheets as:

Equipment installment plan receivables, net of allowance for credit losses and imputed discount $ 4,997   $ 4,379  
Equipment installment plan receivables due after one year, net of allowance for credit losses and imputed discount 2,683   2,209  
EIP receivables, net of allowance for credit losses and imputed discount $ 7,680   $ 6,588  

(1) Through the UScellular Acquisition, we acquired EIP receivables with a fair value of $ 891 million as of August 1, 2025. As they were recorded at fair value, an imputed discount was not recognized on the acquired receivables.

Many of our loss estimation techniques rely on delinquency-based models categorized by customer credit class; 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, including EIP receivables acquired through the UScellular Acquisition, by delinquency status, customer credit class and year of origination as of December 31, 2025:

Originated in 2025 Originated in 2024 Originated prior to 2024 Total EIP Receivables, Net of
Unamortized Imputed Discount
(in millions) Prime Subprime Prime Subprime Prime Subprime Prime Subprime Total
Current - 30 days past due $ 4,936   $ 1,011   $ 1,499   $ 319   $ 102   $ 8   $ 6,537   $ 1,338   $ 7,875  
31 - 60 days past due 35   31   9   10   1   —   45   41   86  
61 - 90 days past due 17   19   7   8   1   1   25   28   53  
More than 90 days past due 10   17   7   10   1   1   18   28   46  
EIP receivables, net of unamortized imputed discount $ 4,998   $ 1,078   $ 1,522   $ 347   $ 105   $ 10   $ 6,625   $ 1,435   $ 8,060  

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

83

Index for Notes to the Consolidated Financial Statements

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

The following table presents write-offs of our EIP receivables by year of origination for the year ended December 31, 2025:

(in millions) Originated in 2025 Originated in 2024 Originated prior to 2024 Total

Write-offs $ 234   $ 366   $ 64   $ 664  

Activity for the years ended December 31, 2025, 2024 and 2023 in the allowance for credit losses and unamortized imputed discount balances for the accounts receivable and EIP receivables segments were as follows:
December 31, 2025 December 31, 2024 December 31, 2023
(in millions) Accounts Receivable Allowance EIP Receivables Allowance Total Accounts Receivable Allowance EIP Receivables Allowance Total Accounts Receivable Allowance EIP Receivables Allowance Total
Allowance for credit losses and imputed discount, beginning of period $ 176   $ 814   $ 990   $ 161   $ 773   $ 934   $ 167   $ 811   $ 978  
Bad debt expense 694   676   1,370   592   600   1,192   440   458   898  
Write-offs ( 654 ) ( 664 ) ( 1,318 ) ( 577 ) ( 578 ) ( 1,155 ) ( 446 ) ( 518 ) ( 964 )
Allowance for credit losses for acquired credit deteriorated receivables 10   78   88   —   —   —   —   —   —  
Change in imputed discount on short-term and long-term EIP receivables N/A 225   225   N/A 199   199   N/A 220   220  
Impact on the imputed discount from sales of EIP receivables N/A ( 183 ) ( 183 ) N/A ( 180 ) ( 180 ) N/A ( 198 ) ( 198 )
Allowance for credit losses and imputed discount, end of period $ 226   $ 946   $ 1,172   $ 176   $ 814   $ 990   $ 161   $ 773   $ 934  

Off-Balance-Sheet Credit Exposures

We do not have material off-balance-sheet credit exposures as of December 31, 2025. In connection with the sales of certain service accounts receivable and EIP receivables pursuant to the sale arrangements, we provide guarantees of credit performance included on our Consolidated Balance Sheets measured at fair value that are based on a discounted cash flow model using Level 3 inputs, including estimated customer default rates and credit worthiness, dilutions and recoveries. See Note 5 – Sales of Certain Receivables for further information.

Note 5 – 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 consolidated financial statements, are described below.

Sales of EIP Receivables

Overview of the Transaction

In 2015, we entered into an arrangement to sell certain EIP receivables on a revolving basis (the “EIP Sale Arrangement”). The maximum funding commitment of the sale arrangement is $ 1.3 billion. On November 10, 2025, we extended the scheduled expiration date of the EIP Sale Arrangement to November 18, 2026.

As of both December 31, 2025 and 2024, the EIP Sale Arrangement provided funding of $ 1.3  billion. Sales of EIP receivables occur daily and are settled on a monthly basis.

84

Index for Notes to the Consolidated Financial Statements

In connection with this EIP Sale Arrangement, we formed a wholly owned subsidiary, which qualifies as a bankruptcy remote entity (the “EIP BRE”). Pursuant to the EIP Sale Arrangement, selected receivables are transferred to the EIP BRE. The EIP BRE then sells the receivables to a non-consolidated and unaffiliated third-party entity over which we do not exercise any level of control, nor does the third-party entity qualify as a VIE.

Variable Interest Entity

We determined that the EIP BRE is a VIE, as its equity investment at risk lacks the obligation to absorb a certain portion of its expected losses. We have a variable interest in the EIP BRE and have determined that we are the primary beneficiary based on our ability to direct the activities that most significantly impact the EIP BRE’s economic performance. Those activities include selecting which receivables are transferred into the EIP BRE and sold in the EIP Sale Arrangement and funding of the EIP BRE. Additionally, our equity interest in the EIP BRE obligates us to absorb losses and gives us the right to receive benefits from the EIP BRE that could potentially be significant to the EIP BRE. Accordingly, we include the balances and results of operations of the EIP BRE in our consolidated financial statements.

The following table summarizes the carrying amounts and classification of liabilities, which consist of the recourse guarantee, included on our Consolidated Balance Sheets with respect to the EIP BRE:

(in millions) December 31,
2025 December 31,
2024

Other current liabilities $ 90   $ 81  
Other long-term liabilities 13   32  

In addition, the EIP BRE is a separate legal entity with its own separate creditors who will be entitled, prior to any liquidation of the EIP BRE, to be satisfied prior to any value in the EIP BRE becoming available to us. Accordingly, the assets of the EIP BRE may not be used to settle our general obligations, and creditors of the EIP BRE have no recourse to our general credit.

Sales of Service Accounts Receivable

Overview of the Transaction

In 2014, we entered into an arrangement to sell certain service accounts receivable on a revolving basis (the “Service Receivable Sale Arrangement”). The maximum funding commitment of the Service Receivable Sale Arrangement is $ 950 million, and the facility expires in February 2026. As of both December 31, 2025 and 2024, the Service Receivable Sale Arrangement provided funding of $ 775 million. Sales of receivables occur daily and are settled on a monthly basis. The receivables consist of service charges currently due from customers and are short-term in nature.

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”).

Pursuant to the amended Service Receivable Sale Arrangement, selected receivables are transferred to the Service BRE. The Service BRE then sells the receivables to a non-consolidated and unaffiliated third-party entity over which we do not exercise any level of control and which does not qualify as a VIE.

Variable Interest Entity

We determined that the Service BRE is a VIE, as its equity investment at risk lacks the obligation to absorb a certain portion of expected losses. We have a variable interest in the Service BRE and have determined that we are the primary beneficiary based on our ability to direct the activities that most significantly impact the Service BRE’s economic performance. Those activities include selecting which receivables are transferred into the Service BRE and sold in the Service Receivable Sale Arrangement and funding the Service BRE. Additionally, our equity interest in the Service BRE obligates us to absorb losses and gives us the right to receive benefits from the Service BRE that could potentially be significant to the Service BRE. Accordingly, we include the balances and results of operations of the Service BRE in our consolidated financial statements.

The following table summarizes the carrying amounts and classification of liabilities included on our Consolidated Balance Sheets with respect to the Service BRE:
(in millions) December 31,
2025 December 31,
2024

Other current liabilities $ 306   $ 328  

85

Index for Notes to the Consolidated Financial Statements

In addition, the Service BRE is a separate legal entity with its own separate creditors who will be entitled, prior to any liquidation of the Service BRE, to be satisfied prior to any value in the Service BRE becoming available to us. Accordingly, the assets of the Service BRE may not be used to settle our general obligations, and creditors of the Service BRE have no recourse to our general credit.

Sales of Receivables

The transfers of service accounts receivable and EIP receivables to the non-consolidated entities are accounted for as sales of financial assets. Once identified for sale, the receivable is recorded at the lower of cost or fair value. Upon sale, we derecognize the net carrying amount of the receivables.

We recognized the cash proceeds received upon sale in Net cash provided by operating activities on our Consolidated Statements of Cash Flows.

On October 22, 2024, we executed an amendment to the EIP Sale Arrangement and an amendment to the Service Receivable Sale Arrangement (together, the “Pledge Amendments”). Prior to the effective date of the Pledge Amendments, the credit enhancement feature of each of the EIP Sale Arrangement and the Service Receivable Sale Arrangement was in the form of a deferred purchase price. Pursuant to the Pledge Amendments, effective on November 1, 2024, the credit enhancement feature of each arrangement is replaced by a recourse guarantee liability, which is collateralized by pledged but unsold receivables. On November 1, 2024, we re-recognized $ 193  million of gross service accounts receivables and $ 604  million of gross EIP receivables.

Prior to the effective date of the Pledge Amendments, cash proceeds related to beneficial interests in securitization transactions in the form of the deferred purchase price were presented within Net cash used in investing activities on our Consolidated Statements of Cash Flows. Following the effective date of the Pledge Amendments, all cash proceeds associated with sold receivables are recognized within Net cash provided by operating activities on our Consolidated Statements of Cash Flows.

The recourse guarantee, and prior to the effective date of the Pledge Amendments, the deferred purchase price, represents a financial instrument that is primarily tied to the creditworthiness of our customers. At inception, we elected to measure the recourse guarantee liabilities at fair value with changes in fair value included in Selling, general and administrative expenses on our Consolidated Statements of Comprehensive Income. The fair value of the recourse guarantee liabilities is determined based on a discounted cash flow model which primarily uses Level 3 inputs, including estimated customer default rates and credit worthiness, dilutions and recoveries. Our recourse guarantee liabilities related to the sales of service receivables and EIP receivables were $ 130 million and $ 148 million as of December 31, 2025, and December 31, 2024, respectively. These liabilities were collateralized by $ 266  million and $ 286 million of gross service receivables and $ 535 million and $ 505 million of gross EIP receivables pledged, but unsold as of December 31, 2025, and December 31, 2024, respectively, which represent our maximum exposure under the recourse guarantee.

The following table summarizes the impact of the sales of certain service receivables and EIP receivables on our Consolidated Balance Sheets:
(in millions) December 31,
2025 December 31,
2024
Derecognized net service accounts receivable and EIP receivables $ 1,651   $ 1,616  

Other current liabilities 397   409  
of which, recourse guarantee 117   116  
Other long-term liabilities 13   32  
of which, recourse guarantee 13   32  
Net cash proceeds since inception 1,372   1,468  
Of which:
Change in net cash proceeds during the year-to-date period ( 96 ) ( 115 )
Net cash proceeds funded by reinvested collections 1,468   1,583  

We recognized losses from sales of receivables, including changes in fair value of the recourse guarantee liabilities, beginning on November 1, 2024, and deferred purchase price assets of $ 58 million, $ 62 million and $ 165 million for the years ended December 31, 2025, 2024 and 2023, respectively, in Selling, general and administrative expenses on our Consolidated Statements of Comprehensive Income.

86

Index for Notes to the Consolidated Financial Statements

Continuing Involvement

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

Note 6 – Property and Equipment

The components of property and equipment, excluding amounts transferred to held for sale, were as follows:
(in millions) Useful Lives December 31,
2025 December 31,
2024

Land $ 100   $ 69  
Buildings and equipment Up to 30 years
4,521   4,377  
Wireless communications systems Up to 20 years
70,653   65,778  
Leasehold improvements Up to 10 years
2,750   2,588  
Capitalized software Up to 3 years
21,762   18,566  
Leased wireless devices Up to 16 months
30   145  
Construction in progress N/A 2,329   3,377  
Accumulated depreciation and amortization ( 63,812 ) ( 56,367 )

Property and equipment, net $ 38,333   $ 38,533  

Total depreciation and amortization expense relating to property and equipment and financing lease right-of-use assets was $ 12.6 billion, $ 12.1 billion and $ 12.0 billion for the years ended December 31, 2025, 2024 and 2023.

We capitalize interest associated with the acquisition or construction of certain property and equipment and spectrum intangible assets. We recognized capitalized interest of $ 43 million, $ 34 million and $ 104 million for the years ended December 31, 2025, 2024 and 2023, respectively.

Asset retirement obligations are primarily for certain legal obligations to remediate leased property on which our network infrastructure and administrative assets are located.

Activity in our asset retirement obligations for the years ended December 31, 2025 and 2024, were as follows:

(in millions) Year Ended
December 31, 2025 Year Ended
December 31, 2024

Asset retirement obligations, beginning of year $ 1,535   $ 1,716  
Fair value of liabilities acquired from the UScellular Acquisition 182   —  
Liabilities incurred 35   21  
Liabilities settled ( 46 ) ( 307 )
Accretion expense 73   69  
Changes in estimated cash flows —   36  

Asset retirement obligations, end of period $ 1,779   $ 1,535  

Classified on the consolidated balance sheets as:

Other current liabilities $ 114   $ 109  
Other long-term liabilities 1,665   1,426  

The corresponding assets, net of accumulated depreciation, related to asset retirement obligations were $ 561 million and $ 423 million as of December 31, 2025 and 2024, respectively.

87

Index for Notes to the Consolidated Financial Statements

Billing System Impairment

In connection with our accelerated digital transformation initiatives, including streamlining our billing technology, we evaluated our billing system architecture strategy and concluded components of our billing system replacement plan and associated development will no longer serve our future needs. As a result, we recorded a non-cash impairment of $ 278 million related to capitalized software development costs during the year ended December 31, 2025, within Impairment expense on our Consolidated Statements of Comprehensive Income.

Note 7 – Goodwill, Spectrum License Transactions and Other Intangible Assets

Goodwill

The changes in the carrying amount of goodwill for the years ended December 31, 2025 and 2024, are as follows:
(in millions) Goodwill

Balance as of December 31, 2023, net of accumulated impairment losses of $ 10,984
$ 12,234  
Goodwill from the Ka’ena Acquisition 771  
Balance as of December 31, 2024
13,005  
Adjustment to goodwill from the Ka’ena Acquisition 6  
Provisionally assigned goodwill from acquisitions in 2025 667  
Balance as of December 31, 2025, net of accumulated impairment losses of $ 10,984
$ 13,678  

Goodwill Impairment Assessment

Certain non-financial assets, including goodwill and indefinite-lived intangible assets such as Spectrum licenses, are not required to be measured at fair value on a recurring basis and are reported at carrying value. However, these assets are required to be assessed for impairment when events or circumstances indicate that carrying value may not be recoverable, and at least annually for goodwill and indefinite-lived intangible assets. The nonrecurring measurements of the fair value of these assets, for which observable market information may be limited, are classified within Level 3 of the fair value hierarchy. In the event an impairment is required, the asset is adjusted to its estimated fair value using market-based assumptions, to the extent they are available, as well as other assumptions that may require significant judgment.

For our annual assessment of our reporting units, we employed a qualitative approach. In addition, for our assessment of the Wireless reporting unit, the fair value was estimated using a market approach, which is based on market capitalization. We considered any events or change in circumstances that occurred, noting no indication that the fair value of our reporting units may be below their carrying amount at December 31, 2025.

Spectrum Licenses

The following table summarizes our spectrum license activity for the years ended December 31, 2025, 2024 and 2023:

(in millions) 2025 2024 2023
Spectrum licenses, beginning of year $ 100,558   $ 96,707   $ 95,798  

Spectrum license acquisitions 1,417   4,822   103  
Spectrum licenses acquired from the UScellular Acquisition 1,730   —   —  
Spectrum licenses transferred to held for sale ( 5,674 ) ( 1,024 ) ( 2 )
Costs to clear spectrum 1   53   808  

Spectrum licenses, end of year $ 98,032   $ 100,558   $ 96,707  

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. Cash proceeds from the sale of spectrum licenses are included in Proceeds from the sale of property, equipment and intangible assets on our Consolidated Statements of Cash Flows.

Spectrum Auctions

In September 2022, the FCC announced that we were the winning bidder of 7,156 licenses in Auction 108 (2.5 GHz spectrum) for an aggregate price of $ 304 million. At inception of Auction 108 in June 2022, we deposited $ 65 million. We paid the FCC the remaining $ 239 million for the licenses won in the auction in September 2022. On February 29, 2024, the FCC issued to us the licenses won in Auction 108, and substantially all of these licenses were deployed in March 2024.
88

Index for Notes to the Consolidated Financial Statements

Spectrum Exchange Transactions

During the years ended December 31, 2025 and 2024, we recognized $ 434  million and $ 1.2  billion, respectively, of non-cash spectrum license acquisitions associated with the closing of certain exchange transactions.

During the years ended December 31, 2025 and 2024, we recognized $ 34 million and $ 202  million, respectively, of gains associated with the closing of certain spectrum exchange transactions as a reduction to Selling, general and administrative expenses on our Consolidated Statements of Comprehensive Income. There were no gains or losses associated with spectrum exchange transactions during the year ended December 31, 2023.

As of December 31, 2025 and 2024, $ 3 million and $ 159  million, respectively, of spectrum licenses were classified as held for sale within Other assets on our Consolidated Balance Sheets related to additional spectrum exchange agreements pending regulatory approval and closing, which are expected to close in the next 12 months. The closings of these transactions are not expected to have a significant impact on our Consolidated Statements of Comprehensive Income.

License Purchase Agreements

DISH Network Corporation

On July 1, 2020, we and DISH Network Corporation (“DISH”) entered into a License Purchase Agreement (the “DISH License Purchase Agreement”) pursuant to which DISH agreed to purchase certain 800 MHz spectrum licenses for a total of approximately $ 3.6  billion. On October 15, 2023, we and DISH entered into an amendment (the “LPA Amendment”) to the DISH License Purchase Agreement pursuant to which, among other things, the parties agreed that (1) DISH will pay us a $ 100  million non-refundable extension fee (in lieu of the approximately $ 72  million termination fee that had previously been agreed to), (2) the closing for the purchase of the spectrum licenses by DISH will occur no later than April 1, 2024, (3) if DISH has not purchased the spectrum licenses by such date for any reason (including failure to receive the required FCC approval prior to such date), then the DISH License Purchase Agreement will automatically terminate, and we will retain the $ 100  million extension fee, (4) if DISH does purchase the spectrum by April 1, 2024, the $ 100  million extension fee will be credited against the $ 3.6  billion purchase price, and (5) we are permitted to commence auction of the spectrum prior to April 1, 2024 at our discretion (and subject to DISH’s purchase right). The LPA Amendment was approved by the Court and became effective on October 23, 2023. On October 25, 2023, we received a payment of $ 100  million from DISH for the extension fee and recorded a corresponding liability within Other current liabilities on our Consolidated Balance Sheets.

DISH did not purchase the 800 MHz spectrum by April 1, 2024. As such, we recognized a gain for the $ 100  million extension fee previously paid by DISH during the year ended December 31, 2024, within Selling, general and administrative expenses on our Consolidated Statements of Comprehensive Income and relieved the liability that was initially recorded upon receipt of the payment. On October 1, 2024, we concluded the auction process for the disposition of the spectrum as required under the final judgment agreed to by us, Deutsche Telekom AG (“DT”), Sprint LLC, SoftBank Group Corp. (“SoftBank”) and DISH with the U.S. District Court for the District of Columbia, which was approved by the Court on April 1, 2020, to offer the licenses for sale. We did not receive a qualifying bid and had been relieved of the obligation to sell the spectrum licenses. On May 30, 2025, we entered into a license purchase agreement for the sale of the 800 MHz spectrum licenses, as discussed below.

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.

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

The FCC approved the purchase of the first tranche on December 29, 2023. The first tranche closed on June 24, 2024, and the associated payment of $ 2.4  billion was made on August 5, 2024.
89

Index for Notes to the Consolidated Financial Statements

The FCC approved the purchase of the Dallas licenses included in the second tranche on October 22, 2024. The purchase of the Dallas licenses closed on December 6, 2024, and the associated payment of $ 541  million was made on the same day.

The FCC approved the purchase of the remaining Chicago and New Orleans deferred licenses from the second tranche on April 15, 2025. The purchase of the remaining licenses closed on June 2, 2025, and the associated payment of $ 604  million was made on the same day.

Comcast Corporation

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

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

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

On January 13, 2025, we and Comcast entered into an amendment to the Comcast License Purchase Agreement pursuant to which we will acquire additional spectrum. Subsequent to the amendment, the total cash consideration for the transaction is between $ 1.2  billion and $ 3.4  billion.

As a result of additional spectrum acquisitions we are planning with third parties, we have agreed with Comcast to accelerate the consummation of our acquisition of approximately $ 45  million of the Comcast Licenses. The parties are currently targeting a closing on the acquisition of this accelerated portion of the Comcast Licenses in the first half of 2026, with the remaining spectrum license acquisitions targeting a closing in the first half of 2028.

N77 License Co LLC

On September 10, 2024, we entered into a License Purchase Agreement with N77 License Co LLC (“Buyer”), pursuant to which Buyer had the option to purchase all or a portion of our remaining 3.45 GHz spectrum licenses in exchange for a range of cash consideration, with the specific licenses sold to be determined based upon the amount of committed financing raised by Buyer. Following receipt of the required regulatory approvals, on April 30, 2025, we completed the sale of a portion of our 3.45 GHz spectrum licenses for $ 2.0  billion. During the year ended December 31, 2025, we recognized an associated gain of $ 151  million as a reduction to Selling, general and administrative expenses on our Consolidated Statements of Comprehensive Income.

Grain Management, LLC

On May 30, 2025, we entered into a License and Unit Purchase Agreement with NEWLEVEL IV, L.P. and NEWLEVEL, LLC, both of which are affiliates of Grain Management, LLC (“Grain”), pursuant to which we will sell our 800 MHz spectrum licenses in exchange for cash consideration of $ 2.9  billion and the receipt of Grain’s 600 MHz spectrum licenses, which we are currently utilizing under lease agreements with Grain. In addition, we may receive a share of certain future proceeds from transactions entered into by Grain that monetize the 800 MHz spectrum licenses, subject to certain terms and conditions and following a certain return on invested capital for Grain. As of December 31, 2025, $ 3.6  billion of the associated 800 MHz spectrum licenses have been classified as held for sale at cost, with $ 2.9  billion and $ 690  million presented in Other current assets and Other assets, respectively, on our Consolidated Balance Sheets based on the nature of consideration to be received. The transaction is subject to customary closing conditions and contingent on the receipt of regulatory approvals, including the FCC’s approval regarding certain modifications to the 800 MHz spectrum licenses, and the parties are currently targeting a closing in the first half of 2026. We do not expect the transaction to have a material impact on our Consolidated Statements of
90

Index for Notes to the Consolidated Financial Statements

Comprehensive Income upon the transaction close. In addition, we expect an increase to our cash income tax liability of approximately $ 850  million upon the transaction close.

Impairment Assessment

For our assessment of Spectrum license impairment, we employed a qualitative approach. No events or change in circumstances have occurred that indicate the fair value of the Spectrum licenses may be below their carrying amount at December 31, 2025.

Other Intangible Assets

The components of Other intangible assets were as follows:
Useful Lives December 31, 2025 December 31, 2024
(in millions) Gross Amount Accumulated Amortization Net Amount Gross Amount Accumulated Amortization Net Amount

Customer relationships (1)
Up to 10 years
$ 7,599   $ ( 4,878 ) $ 2,721   $ 5,427   $ ( 4,123 ) $ 1,304  
Reacquired rights Up to 9 years
770   ( 416 ) 354   770   ( 323 ) 447  
Tradenames and patents (1)
Up to 19 years
430   ( 191 ) 239   338   ( 157 ) 181  
Favorable spectrum leases Up to 27 years
564   ( 184 ) 380   620   ( 169 ) 451  
Other (1)
Up to 10 years
557   ( 408 ) 149   478   ( 349 ) 129  
Other intangible assets $ 9,920   $ ( 6,077 ) $ 3,843   $ 7,633   $ ( 5,121 ) $ 2,512  

(1) Includes intangible assets acquired through our acquisitions. See Note 2 - Business Combinations and Note 3 - Joint Ventures for more information.

Amortization expense for intangible assets subject to amortization was $ 975 million, $ 857 million and $ 888 million for the years ended December 31, 2025, 2024 and 2023, respectively.

The estimated aggregate future amortization expense for intangible assets subject to amortization is summarized below:
(in millions) Estimated Future Amortization

Twelve Months Ending December 31,
2026 $ 987  
2027 769  
2028 569  
2029 430  
2030 278  
Thereafter 810  

Total $ 3,843  

Note 8 – 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 generally recorded at their present value using an imputed interest rate.

Derivative Financial Instruments

We use derivatives to manage exposure to market risk, such as exposure to fluctuations in foreign currency exchange rates and interest rates. We designate certain derivatives as hedging instruments in a qualifying hedge accounting relationship to mitigate fluctuations in values or cash flows related to such risks caused by foreign currency or 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 Consolidated Statements of Cash Flows as the item being hedged. For fair value hedges, other than foreign currency hedges, the change in the fair value of the derivative instruments is recognized in earnings through the same income statement line item as the change in the fair value of the hedged item. For cash flow hedges, as well as fair value foreign currency hedges, the change in the fair value of the derivative instruments is reported in Accumulated other comprehensive loss and recognized in earnings when the hedged item is recognized in earnings, again, through the same income statement line item.

91

Index for Notes to the Consolidated Financial Statements

We record derivatives on our Consolidated Balance Sheets at fair value that is derived primarily from observable market data, including exchange rates, interest rates and forward curves. These market inputs are utilized in the discounted cash flow calculation considering the instrument's term, notional amount, discount rate and credit risk. Significant inputs to derivative valuations are generally observable in active markets and, as such, are classified as Level 2 in the fair value hierarchy.

Cross-Currency Swaps

We enter into cross-currency swaps to offset changes in the value of our payments on foreign-denominated debt in USD and to mitigate the impact of foreign currency transaction gains and losses.

We have entered into cross-currency swap agreements, with the same notional amounts as our EUR-denominated debt issuances, to effectively convert € 4.8  billion to USD borrowings, with the same maturities as our EUR-denominated debt issuances. The swaps qualify and have been designated as fair value hedges of our EUR-denominated debt, mitigating our exposure to foreign currency transaction gains and losses.

Accordingly, all changes in the fair value of the swaps will be initially recorded through Accumulated other comprehensive loss on our Consolidated Balance Sheets and reclassified to earnings in an amount that exactly offsets the periodic transaction gain or loss on remeasuring the debt, such that there will be no earnings volatility due to changes in foreign-currency exchange rates. Transaction gains or losses on remeasuring the EUR-denominated debt, as well as the offsetting swap amounts, are recorded within Other (expense) income, net on our Consolidated Statements of Comprehensive Income.

Changes in the fair value of the swaps may be different from the current period transaction gain or loss on remeasurement of the debt, in which case the difference will remain in Accumulated other comprehensive loss on our Consolidated Balance Sheets. These differences generally represent credit or liquidity risk, referred to as a basis spread, and the time value of money (“excluded components”). The value of the excluded components is recognized in earnings using a systematic and rational method by accruing the current-period swap settlements into Interest expense, net, on our Consolidated Statements of Comprehensive Income. If an amount remains in Accumulated other comprehensive loss on our Consolidated Balance Sheets upon settlement of the derivative, those amounts will be reclassified to earnings at that time.

The following table summarizes the activity of our cross-currency swaps:

Year Ended December 31,
(in millions) 2025 2024

Other (expense) income, net
Pre-tax transaction (loss) gain on remeasurement of EUR-denominated debt $ ( 661 ) $ 79  
Amount recognized in Other (expense) income, net reclassified from Accumulated other comprehensive loss
661   ( 79 )
Accumulated other comprehensive loss
Amount recognized in Accumulated other comprehensive loss reclassified to Other (expense) income, net
$ ( 661 ) $ 79  
Gain (loss) associated with the change in fair value of cross-currency swaps recognized in Accumulated other comprehensive loss
410   ( 58 )

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 our terminated interest rate lock derivatives, net of amortization, of $ 771 million and $ 960 million are presented in Accumulated other comprehensive loss on our Consolidated Balance Sheets as of December 31, 2025 and 2024, respectively.

During the years ended December 31, 2025, 2024 and 2023, we amortized $ 254 million, $ 236 million, and $ 219 million respectively, from Accumulated other comprehensive loss into Interest expense, net, on our Consolidated Statements of Comprehensive Income. We expect to amortize $ 274  million of the Accumulated other comprehensive loss associated with the derivatives into Interest expense, net, over the 12 months ending December 31, 2026.

Recourse Guarantee Liabilities

In connection with the sales of certain service and EIP accounts receivable pursuant to the sale arrangements, we have recourse guarantee liabilities measured at fair value that are based on a discounted cash flow model using unobservable Level 3 inputs, including estimated customer default rates and credit worthiness. See Note 5 – Sales of Certain Receivables for further information.

92

Index for Notes to the Consolidated Financial Statements

The carrying amounts of our recourse guarantee liabilities of $ 130 million and $ 148 million are included on our Consolidated Balance Sheets as of December 31, 2025 and 2024, respectively.

Debt

The fair values of our Senior Notes and spectrum-backed Senior Secured Notes to third parties were determined based on quoted market prices in active markets. Accordingly, our Senior Notes and spectrum-backed Senior Secured Notes to third parties were classified as Level 1 within the fair value hierarchy. The fair value of our Senior Notes to affiliates was determined based on the fair value of the Senior Notes to third parties with similar terms and maturities. Accordingly, our Senior Notes to affiliates were classified as Level 2 within the fair value hierarchy. The fair values of our Senior Notes to third parties (EUR-denominated) and ABS Notes were primarily based on quoted prices in inactive markets for identical instruments and observable changes in market interest rates, both of which are Level 2 inputs. Accordingly, our Senior Notes to third parties (EUR-denominated) and ABS Notes were classified as Level 2 within the fair value hierarchy. The fair value of our ECA Facilities (as defined below) was determined based on a discounted cash flow approach using market interest rates of instruments with similar maturities and credit risk. Accordingly, our ECA Facilities 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, judgment was required in interpreting market data to develop fair value estimates for the Senior Notes to third parties (EUR-denominated), Senior Notes to affiliates, ABS Notes and ECA Facilities. The fair value estimates were based on information available as of December 31, 2025 and 2024. As such, our estimates are not necessarily indicative of the amount we could realize in a current market exchange.

The carrying amounts and fair values of our short-term and long-term debt, excluding accrued interest, included on our Consolidated Balance Sheets were as follows:
(in millions) Level within the Fair Value Hierarchy December 31, 2025 December 31, 2024
Carrying Amount Fair Value Carrying Amount Fair Value
Liabilities:
Senior Notes to third parties 1 $ 74,575   $ 70,517   $ 71,783   $ 65,631  
Senior Notes to third parties (EUR-denominated) 2 5,551   5,460   2,058   2,125  
Senior Notes to affiliates 2 1,498   1,500   1,497   1,491  
Senior Secured Notes to third parties 1 844   835   1,361   1,330  
ABS Notes to third parties 2 1,995   2,017   1,566   1,570  
ECA Facilities to third parties 2 1,819   1,876   —   —  

93

Index for Notes to the Consolidated Financial Statements

Note 9 – Debt

Debt was as follows:
(in millions) December 31,
2025 December 31,
2024
3.500 % Senior Notes due 2025
$ —   $ 3,000  
4.738 % Series 2018-1 A-1 Notes due 2025
—   131  
1.500 % Senior Notes due 2026
1,000   1,000  
2.250 % Senior Notes due 2026
1,800   1,800  
2.625 % Senior Notes due 2026
1,200   1,200  
7.625 % Senior Notes due 2026
—   1,500  
3.750 % Senior Notes due 2027
4,000   4,000  
5.375 % Senior Notes due 2027
—   500  
2.050 % Senior Notes due 2028
1,750   1,750  
4.750 % Senior Notes due 2028
1,500   1,500  
4.750 % Senior Notes to affiliates due 2028
1,500   1,500  
4.800 % Senior Notes due 2028
900   900  
4.910 % Class A Senior ABS Notes due 2025
—   570  
4.950 % Senior Notes due 2028
1,000   1,000  
5.152 % Series 2018-1 A-2 Notes due 2028
827   1,194  
6.875 % Senior Notes due 2028
2,475   2,475  
2.400 % Senior Notes due 2029
500   500  
2.625 % Senior Notes due 2029
1,000   1,000  
3.375 % Senior Notes due 2029
2,350   2,350  
3.550 % Senior Notes due 2029 (EUR-denominated)
705   621  
4.200 % Senior Notes due 2029
700   700  
4.250 % Class A Senior ABS Notes due 2029
500   500  
4.740 % Class A Senior ABS Notes due 2029
500   —  
4.850 % Senior Notes due 2029
1,000   1,000  
5.050 % Class A Senior ABS Notes due 2029
500   500  
3.875 % Senior Notes due 2030
7,000   7,000  
4.340 % Class A Senior ABS Notes due 2030
500   —  
2.250 % Senior Notes due 2031
1,000   1,000  
2.550 % Senior Notes due 2031
2,500   2,500  
2.875 % Senior Notes due 2031
1,000   1,000  
3.500 % Senior Notes due 2031
2,450   2,450  
2.700 % Senior Notes due 2032
1,000   1,000  
3.150 % Senior Notes due 2032 (EUR-denominated)
1,175   —  
3.700 % Senior Notes due 2032 (EUR-denominated)
881   777  
5.125 % Senior Notes due 2032
1,250   —  
8.750 % Senior Notes due 2032
2,000   2,000  
4.625 % Senior Notes due 2033
800   —  
5.050 % Senior Notes due 2033
2,600   2,600  
5.200 % Senior Notes due 2033
1,250   1,250  
6.700 % Senior Notes due 2033
489   —  
5.150 % Senior Notes due 2034
1,250   1,250  
5.750 % Senior Notes due 2034
1,000   1,000  
4.700 % Senior Notes due 2035
900   900  
4.950 % Senior Notes due 2035
1,000   —  
5.300 % Senior Notes due 2035
1,000   —  
ECA Facility due March 2036 (1)
913   —  
ECA Facility due November 2036 (1)
957   —  
3.850 % Senior Notes due 2036 (EUR-denominated)
764   673  
3.500 % Senior Notes due 2037 (EUR-denominated)
1,175   —  
4.375 % Senior Notes due 2040
2,000   2,000  
3.000 % Senior Notes due 2041
2,500   2,500  
3.800 % Senior Notes due 2045 (EUR-denominated)
881   —  
4.500 % Senior Notes due 2050
3,000   3,000  
3.300 % Senior Notes due 2051
3,000   3,000  
3.400 % Senior Notes due 2052
2,800   2,800  
5.650 % Senior Notes due 2053
1,750   1,750  
5.750 % Senior Notes due 2054
1,250   1,250  
6.000 % Senior Notes due 2054
1,000   1,000  

94

Index for Notes to the Consolidated Financial Statements

5.250 % Senior Notes due 2055
900   900  
5.500 % Senior Notes due 2055
750   750  
5.875 % Senior Notes due 2055
1,250   —  
5.700 % Senior Notes due 2056
1,000   —  
3.600 % Senior Notes due 2060
1,700   1,700  
5.800 % Senior Notes due 2062
750   750  
6.250 % Senior Notes due 2069
393   —  
5.500 % Senior Notes due March 2070
401   —  
5.500 % Senior Notes due June 2070
395   —  
Unamortized Premium on debt to third parties 666   775  
Unamortized Discount on debt to third parties ( 313 ) ( 223 )
Debt issuance costs and consent fees ( 352 ) ( 278 )
Total debt 86,282   78,265  

Less: Current portion of Senior Notes
5,135   4,068  
Total long-term debt $ 81,147   $ 74,197  

(1) Interest is based on the Secured Overnight Financing Rate (“SOFR”) for the interest period plus an applicable margin. The floating rate, including the applicable margin, on the ECA Facility due March 2036 was 4.927 % for the interest payment made during the year ended December 31, 2025. No interest was paid on the ECA Facility due November 2036 during the year ended December 31, 2025.

Long-term debt was classified as follows:

(in millions) December 31,
2025 December 31,
2024

Long-term debt $ 79,649   $ 72,700  
Long-term debt to affiliates 1,498   1,497  
Total long-term debt $ 81,147   $ 74,197  

Our effective interest rate, excluding the impact of derivatives and capitalized interest, was approximately 4.2 % and 4.1 % on weighted-average debt outstanding of $ 83.0  billion and $ 78.3  billion for the years ended December 31, 2025 and 2024, respectively. The weighted-average debt outstanding was calculated by applying an average of the monthly ending balances of total short-term and long-term debt to third parties and short-term and long-term debt to affiliates, net of unamortized premiums, discounts, debt issuance costs and consent fees.

Senior Notes

The Senior Notes are guaranteed on a senior unsecured basis by the Company and certain of our consolidated subsidiaries. They are redeemable at our discretion, in whole or in part, at any time. The redemption price is calculated by reference to the date on which such notes are redeemed and includes a premium, generally until the notes reach a par call date, on or after which they are redeemable at par. The amount of time by which the par call date, where applicable, precedes the maturity date of the respective series of Senior Notes generally varies from one month to three years .

95

Index for Notes to the Consolidated Financial Statements

Issuances and Borrowings

During the year ended December 31, 2025, we issued and borrowed the following debt:

(in millions) Principal Issuances Discounts and Issuance Costs,
Net (1)
Net Proceeds from Issuance of Long-Term Debt Issue Date
3.150 % Senior Notes due 2032 (EUR-denominated)
$ 1,036   $ ( 5 ) $ 1,031   February 11, 2025
3.500 % Senior Notes due 2037 (EUR-denominated)
1,036   ( 8 ) 1,028   February 11, 2025
3.800 % Senior Notes due 2045 (EUR-denominated)
777   ( 7 ) 770   February 11, 2025
5.125 % Senior Notes due 2032
1,250   ( 7 ) 1,243   March 27, 2025
5.300 % Senior Notes due 2035
1,000   ( 7 ) 993   March 27, 2025
5.875 % Senior Notes due 2055
1,250   ( 15 ) 1,235   March 27, 2025
6.700 % Senior Notes due 2033 (2)
489   56   —   August 5, 2025
6.250 % Senior Notes due 2069 (2)
393   3   —   August 5, 2025
5.500 % Senior Notes due March 2070 (2)
401   ( 42 ) —   August 5, 2025
5.500 % Senior Notes due June 2070 (2)
395   ( 42 ) —   August 5, 2025
4.625 % Senior Notes due 2033
800   ( 5 ) 795   October 9, 2025
4.950 % Senior Notes due 2035
1,000   ( 9 ) 991   October 9, 2025
5.700 % Senior Notes due 2056
1,000   ( 15 ) 985   October 9, 2025
Total of Senior Notes issued 10,827   ( 103 ) 9,071  
4.740 % Class A Senior ABS Notes due 2029
500   ( 2 ) 498   February 27, 2025
4.340 % Class A Senior ABS Notes due 2030
500   ( 2 ) 498   August 6, 2025
Total of ABS Notes issued 1,000   ( 4 ) 996  
4.927 % ECA Facility due March 2036
1,000   ( 30 ) 970   March 17, 2025
4.502 % ECA Facility due November 2036
500   ( 13 ) 487   November 28, 2025
4.392 % ECA Facility due November 2036
500   ( 11 ) 489   December 18, 2025
Total of credit facilities borrowed 2,000   ( 54 ) 1,946  
Total Issuances and Borrowings $ 13,827   $ ( 161 ) $ 12,013  

(1) Includes accrued or paid issuance costs and discounts.
(2) In connection with the closing of the UScellular Acquisition, we became obligated to execute the Exchange Offers of certain senior notes of UScellular pursuant to which T-Mobile notes with an aggregate outstanding principal balance of $ 1.7  billion were issued with the same interest rate, interest payment dates, maturity dates and redemption terms as each corresponding series of senior notes of UScellular. See Note 2 – Business Combinations for further information regarding the UScellular Acquisition.

Subsequent to December 31, 2025, on January 12, 2026, we issued $ 1.2  billion of 5.000 % Senior Notes due 2036 and $ 850  million of 5.850 % Senior Notes due 2056.

Credit Facilities

We maintain a revolving credit facility (the “Revolving Credit Facility”) with an aggregate commitment amount of $ 7.5 billion, including a letter of credit sub-facility of up to $ 1.5 billion and a swingline loan sub-facility of up to $ 500  million. As of December 31, 2025 and 2024, we did not have an outstanding balance under the Revolving Credit Facility.

Subsequent to December 31, 2025, on January 5, 2026, we entered into a Second Amended and Restated Credit Agreement (the “January 2026 Credit Agreement”) with certain financial institutions named therein. The January 2026 Credit Agreement amends and restates in its entirety the Amended and Restated Credit Agreement dated as of October 17, 2022. The January 2026 Credit Agreement increases the commitments under the revolving credit facility from $ 7.5  billion to $ 10.0  billion and extends the maturity of the commitments to January 5, 2031, except as otherwise extended or replaced.
96

Index for Notes to the Consolidated Financial Statements

Note Redemptions and Repayments

During the year ended December 31, 2025, we made the following note redemptions and repayments:

(in millions) Principal Amount Write-off of Issuance Cost and Consent Fees (1)
Redemption or Repayment Date Redemption Price
3.500 % Senior Notes due 2025
$ 3,000   $ —   April 15, 2025 N/A
5.375 % Senior Notes due 2027
500   1   September 1, 2025 100   %
7.625 % Senior Notes due 2026
1,500   ( 13 ) November 1, 2025 100   %
Total Redemptions $ 5,000   $ ( 12 )

4.738 % Secured Series 2018-1 A-1 Notes due 2025
$ 131   $ —   January 13, 2025 N/A
ECA Facility due March 2036 87   —   Various N/A
5.152 % Series 2018-1 A-2 Notes due 2028
368   —   Various N/A
4.910 % Class A Senior ABS Notes due 2025
570   —   Various N/A
ECA Facility due November 2036 43   —   November 28, 2025 N/A
Total Repayments $ 1,199   $ —  

(1) Write-off of issuance costs and consent fees are included in Other (expense) income, net on our Consolidated Statements of Comprehensive Income. Write-off of issuance costs and consent fees are included in Other, net within Net cash provided by operating activities on our Consolidated Statements of Cash Flows.

Subsequent to December 31, 2025, on January 22, 2026, we delivered notices of redemption on $ 3.0  billion aggregate principal amount of our 4.750 % Senior Notes due 2028 and 4.750 % Senior Notes to affiliates due 2028. We redeemed the notes at par on February 1, 2026.

Asset-backed Notes

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. 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 EIP receivables transferred to the ABS Entities and related assets, consisting primarily of restricted cash, will only be available for payment of the ABS Notes and expenses related thereto, payments to the Originators in respect of additional transfers of device payment plan agreement receivables, and other obligations arising from our ABS Notes transactions, and will not be available to pay our other obligations until the associated ABS Notes and related obligations are satisfied. The third-party investors in the Class A senior ABS Notes have legal recourse only to the assets of the ABS Trust 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 Trust 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. However, T-Mobile does not guarantee any principal or interest on the ABS Notes or any payments on the underlying EIP receivables.

Cash collections on the EIP receivables are required at certain specified times to be placed into segregated accounts. Deposits to the segregated accounts are considered restricted cash and are included in Other current assets on our Consolidated Balance Sheets.

As of December 31, 2025, $ 2.0 billion of our ABS Notes were secured in total by $ 2.6 billion of gross EIP receivables and collections on such receivables. Our ABS Notes and the assets securing this debt are included on our Consolidated Balance Sheets.

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Index for Notes to the Consolidated Financial Statements

The expected maturities of our ABS Notes as of December 31, 2025, were as follows:

(in millions) Expected Maturities

2026 $ 594  
2027 1,050  
2028 356  
Total $ 2,000  

Variable Interest Entities

The ABS Entities meet the definition of a VIE for which we have determined that we are the primary beneficiary as we have the power to direct the activities of the ABS Entities that most significantly impact their performance. Those activities include selecting which receivables are transferred into the ABS Entities, servicing such receivables, and funding of the ABS Entities. Additionally, our equity interest and residual interest in the ABS BRE and the ABS Trust, respectively, obligate us to absorb losses and give us the right to receive benefits from the ABS Entities that could potentially be significant to the ABS Entities. Accordingly, we include the balances and results of operations of the ABS Entities in our consolidated financial statements.

The following table summarizes the carrying amounts and classification of assets and liabilities included in our Consolidated Balance Sheets with respect to the ABS Entities:

(in millions) December 31,
2025 December 31,
2024

Assets
Equipment installment plan receivables, net $ 1,865   $ 1,472  
Equipment installment plan receivables due after one year, net 543   352  
Other current assets 232   151  
Liabilities
Accounts payable and accrued liabilities $ 3   $ 2  
Short-term debt 594   570  
Long-term debt 1,401   996  

See Note 4 – Receivables and Related Allowance for Credit Losses for additional information on the EIP receivables used to secure the ABS Notes.

Master Receivables Financing Agreement

Subsequent to December 31, 2025, on February 5, 2026, we entered into a master receivables financing agreement with certain third parties that provides for a revolving loan facility secured by pledged service customer relationships, which include current as well as future monthly service receivables, during the borrowing period (the “MRFA”). Concurrently with the execution of the MRFA, we borrowed $ 1.0  billion with a floating interest rate indexed to SOFR plus an applicable margin, maturing on February 5, 2027, a one-year borrowing period. The net proceeds will be reflected in Proceeds from issuance of short-term debt on our Condensed Consolidated Statements of Cash Flows for the three months ending March 31, 2026.

Spectrum Financing

On April 1, 2020, in connection with the closing of the Sprint Merger, we assumed Sprint’s spectrum-backed notes, which are collateralized by the acquired, directly held and third-party leased Spectrum licenses (collectively, the “Spectrum Portfolio”) transferred to wholly owned bankruptcy-remote special purpose entities (collectively, the “Spectrum Financing SPEs”). As of December 31, 2025 and 2024, the total outstanding obligations under these Notes were $ 827  million and $ 1.3  billion, respectively.

In October 2016, certain subsidiaries of Sprint Communications, Inc. transferred the Spectrum Portfolio to the Spectrum Financing SPEs, which was used as collateral to raise an initial $ 3.5  billion in senior secured notes (the “2016 Spectrum-Backed Notes”) bearing interest at 3.360 % per annum under a $ 7.0  billion securitization program. The 2016 Spectrum-Backed Notes were repayable over a five-year term, with interest-only payments over the first four quarters and amortizing quarterly principal payments thereafter commencing December 2017 through September 2021. We fully repaid the 2016 Spectrum-Backed Notes in 2021.

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Index for Notes to the Consolidated Financial Statements

In March 2018, Sprint issued approximately $ 3.9  billion in aggregate principal amount of senior secured notes (the “2018 Spectrum-Backed Notes” and together with the 2016 Spectrum-Backed Notes, the “Spectrum-Backed Notes”) under the existing $ 7.0  billion securitization program, consisting of two series of senior secured notes. The first series of notes totaled $ 2.1  billion in aggregate principal amount, bearing interest at 4.738 % per annum, and had quarterly interest-only payments until June 2021, with additional quarterly principal payments commencing in June 2021 through March 2025, which was fully repaid on January 13, 2025. The second series of notes totaled approximately $ 1.8  billion in aggregate principal amount, bears interest at 5.152 % per annum, and had quarterly interest-only payments until June 2023, with additional quarterly principal payments commencing in June 2023 through March 2028. As of December 31, 2025, $ 368 million of the aggregate principal amount was classified as Short-term debt on our Consolidated Balance Sheets. The Spectrum Portfolio, which also serves as collateral for the Spectrum-Backed Notes, remains substantially identical to the original portfolio from October 2016.

Simultaneously with the October 2016 offering, Sprint Communications, Inc. entered into a long-term lease with the Spectrum Financing SPEs for the ongoing use of the Spectrum Portfolio. Sprint Communications, Inc. is required to make monthly lease payments to the Spectrum Financing SPEs in an aggregate amount that is market-based relative to the spectrum usage rights as of the closing date and equal to $ 165 million per month. The lease payments, which are guaranteed by T-Mobile subsidiaries subsequent to the Sprint Merger, are sufficient to service all outstanding series of the 2016 Spectrum-Backed Notes and the lease also constitutes collateral for the senior secured notes. Because the Spectrum Financing SPEs are wholly owned T-Mobile subsidiaries subsequent to the Sprint Merger, these entities are consolidated and all intercompany activity has been eliminated.

Each Spectrum Financing SPE is a separate legal entity with its own separate creditors who will be entitled, prior to and upon the liquidation of the respective Spectrum Financing SPE, to be satisfied out of the Spectrum Financing SPE’s assets prior to any assets of such Spectrum Financing SPE becoming available to T-Mobile. Accordingly, the assets of each Spectrum Financing SPE are not available to satisfy the debts and other obligations owed to other creditors of T-Mobile until the obligations of such Spectrum Financing SPE under the Spectrum-Backed Notes are paid in full. Certain provisions of the Spectrum Financing facility require us to maintain specified cash collateral balances. Amounts associated with these balances are considered to be restricted cash.

Restricted Cash

Certain provisions of our debt agreements require us to maintain specified cash collateral balances. Amounts associated with these balances are considered to be restricted cash.

Commercial Paper

On July 25, 2023, we established an unsecured short-term commercial paper program with the ability to borrow up to $ 2.0  billion from time to time. This program supplements our other available external financing arrangements, and proceeds are expected to be used for general corporate purposes. As of December 31, 2025 and 2024, there was no outstanding balance under this program.

Standby Letters of Credit

For the purposes of securing our general purpose obligations and obligations to provide device insurance services, we maintain an agreement for standby letters of credit with certain financial institutions. Our outstanding standby letters of credit were $ 116 million and $ 152 million as of December 31, 2025 and 2024, respectively.

ECA Facilities

On January 31, 2025, we entered into a credit agreement with certain financial institutions, backed by an Export Credit Agency (an “ECA Facility”), providing for a loan of up to $ 1.0 billion to finance network equipment-related purchases (the “ECA Facility due March 2036”). The obligations under this ECA Facility are also guaranteed by us and by all of our wholly owned domestic restricted subsidiaries (subject to customary exceptions). On March 17, 2025, we drew down the full $ 1.0 billion available under the ECA Facility due March 2036 and recognized the net proceeds within Proceeds from issuance of long-term debt, net on our Consolidated Statements of Cash Flows. Borrowings under this ECA Facility are amortized semi-annually in equal installments up to the maturity date of March 15, 2036. Interest is based on the SOFR for the interest period plus an applicable margin.

On August 29, 2025, we entered into an ECA Facility, providing for a loan of up to $ 1.0  billion to finance network equipment-related purchases (the “ECA Facility due November 2036”). The obligations under this ECA Facility are also guaranteed by us and by all of our wholly owned domestic restricted subsidiaries (subject to customary exceptions). During the fourth quarter of
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Index for Notes to the Consolidated Financial Statements

2025, we drew down the full $ 1.0  billion available under the ECA Facility due November 2036 and recognized the net proceeds within Proceeds from issuance of long-term debt, net on our Consolidated Statements of Cash Flows. Borrowings under this ECA Facility are amortized semi-annually in equal installments up to the maturity date of November 30, 2036. Interest is based on SOFR for the interest period plus an applicable margin.

Note 10 – 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 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 Consolidated Balance Sheets. We recorded long-term financial obligations in the amount of the net proceeds received and recognize interest on the tower obligations. The tower obligations are increased by interest expense and amortized through contractual leaseback payments made by us to CCI and through net cash flows generated and retained by CCI from the operation of the tower sites.

Acquired CCI Tower Lease Arrangements

Prior to the Sprint Merger, 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 Sprint 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 Consolidated Balance Sheets.

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 Consolidated Balance Sheets and are depreciated to their estimated residual values over the expected useful life of the towers, which is 20 years.

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Index for Notes to the Consolidated Financial Statements

Leaseback Arrangement

On January 3, 2022, we entered into an agreement (the “Crown Agreement”) with CCI. The Crown Agreement extends the current term of the leasebacks by up to 12 years and modifies the leaseback payments for both the Existing CCI Tower Lease Arrangements and the Acquired CCI Tower Lease Arrangements. As a result of the Crown Agreement, there was an increase in our financing obligation as of the effective date of the Crown Agreement of approximately $ 1.2 billion, with a corresponding decrease to Other long-term liabilities associated with unfavorable contract terms. The modification resulted in a revised interest rate under the effective interest method for the tower obligations: 11.6 % for the Existing CCI Tower Lease Arrangements and 5.3 % for the Acquired CCI Tower Lease Arrangements. 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 Consolidated Balance Sheets:
(in millions) December 31,
2025 December 31,
2024
Property and equipment, net $ 1,922   $ 2,069  
Tower obligations 3,532   3,664  
Other long-term liabilities 554   554  

Future minimum payments related to the tower obligations are approximately $ 389 million for the 12-month period ending December 31, 2026, $ 810 million in total for both of the 12-month periods ending December 31, 2027 and 2028, $ 862 million in total for both of the 12-month periods ending December 31, 2029 and 2030, and $ 3.2 billion in total thereafter.

We are contingently liable for future ground lease payments through the remaining term of the CCI Lease Sites and the Master Lease Sites. These contingent obligations are not included in Operating lease liabilities, as any amount due is contractually owed by CCI based on the subleasing arrangement. Under the arrangement, we remain primarily liable for ground lease payments on approximately 900 sites and have included lease liabilities of $ 241 million in our Operating lease liabilities as of December 31, 2025.

Note 11 – Revenue from Contracts with Customers

Disaggregation of Revenue

We provide wireless communications and broadband services to a variety of customers, but focus primarily on two categories of customers:

• Postpaid customers generally include customers who are qualified to pay after receiving service utilizing phones, 5G broadband gateways, fiber connections, mobile internet devices (including tablets and hotspots), wearables, DIGITS and other connected devices (including SyncUP and IoT); and
• Prepaid customers generally include customers who pay for service in advance.

We also provide services to wholesale customers which 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:
Year Ended December 31,
(in millions) 2025 2024 2023
Postpaid service revenues

Postpaid phone revenues $ 49,443   $ 45,762   $ 43,449  
Postpaid other revenues 8,489   6,578   5,243  

Total postpaid service revenues $ 57,932   $ 52,340   $ 48,692  

The balances presented in each revenue line item on our 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.

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Index for Notes to the Consolidated Financial Statements

Contract Balances

The contract asset and contract liability balances from contracts with customers as of December 31, 2025 and 2024, were as follows:
(in millions) Contract
Assets Contract
Liabilities

Balance as of December 31, 2024 $ 720   $ 1,219  
Balance as of December 31, 2025 1,307   1,653  

Change $ 587   $ 434  

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.

The change in the contract asset balance reflects 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 $ 920 million and $ 492 million as of December 31, 2025 and 2024, respectively, was included in Other current assets on our 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, including customers acquired through the Ka’ena Acquisition, as well as contract liabilities assumed in the UScellular Acquisition. Contract liabilities are primarily included in Deferred revenue on our Consolidated Balance Sheets.

Revenues for the years ended December 31, 2025, 2024 and 2023, include the following:
Year Ended December 31,
(in millions) 2025 2024 2023
Amounts included in the beginning of year contract liability balance $ 1,173   $ 787   $ 747  

Remaining Performance Obligations

As of December 31, 2025, the aggregate amount of the 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 $ 2.7 billion. We expect to recognize revenue as the service is provided on these postpaid contracts, generally over a period 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 December 31, 2025, the aggregate amount of the contractual minimum consideration for wholesale, roaming and service contracts is $ 1.2 billion, $ 938 million and $ 2.2 billion for 2026, 2027 and 2028 and beyond, respectively. These contracts have a remaining duration ranging from less than one year to six years .

Contract Costs

The balance of deferred incremental costs to obtain contracts with customers was $ 2.0 billion for both December 31, 2025 and 2024, and is included in Other assets on our 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 Consolidated Statements of Comprehensive Income were $ 1.9  billion, $ 2.0  billion, and $ 1.8 billion for the years ended December 31, 2025, 2024 and 2023, 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 years ended December 31, 2025, 2024 and 2023.

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Index for Notes to the Consolidated Financial Statements

Note 12 – Segment Reporting

We manage our business activities on a consolidated basis and operate as a single operating segment: Wireless. We primarily derive our revenue in the United States by providing wireless communications and broadband services to customers using our wireless networks and selling devices that provide customers access to our wireless networks. The accounting policies of the Wireless segment are the same as those described in Note 1 – Summary of Significant Accounting Policies .

Our chief operating decision maker (“CODM”) is our President and Chief Executive Officer. The CODM uses Net income, as reported on our Consolidated Statements of Comprehensive Income, in evaluating performance of the Wireless segment and determining how to allocate resources of the Company as a whole, including investing in our networks and customers, stockholder return programs and acquisition strategy. The CODM does not review assets in evaluating the results of the Wireless segment, and therefore, such information is not presented.

The following table provides the operating financial results of our Wireless segment:

Year Ended December 31,
(in millions) 2025 2024 2023
Total revenues $ 88,309   $ 81,400   $ 78,558  
Less: Significant and other segment expenses
Cost of equipment sales 21,277   18,882   18,533  
Employee expenses 8,553   7,041   7,629  
Lease expense 5,197   5,066   5,398  
Advertising expense 3,668   3,067   2,515  
Bad debt expense 1,370   1,192   898  
Other segment items (1)
16,179   15,223   16,526  
Impairment expense 278   —   —  
Gain on disposal group held for sale —   —   ( 25 )
Depreciation and amortization 13,508   12,919   12,818  
Interest expense, net 3,774   3,411   3,335  
Other expense (income), net 224   ( 113 ) ( 68 )
Income tax expense 3,289   3,373   2,682  
Segment net income $ 10,992   $ 11,339   $ 8,317  

(1) Other segment items included in Segment net income primarily includes certain third-party commissions, external labor and services and backhaul expenses.

Note 13 – Employee Compensation and Benefit Plans

In June 2023, the stockholders of the Company approved the T-Mobile US, Inc. 2023 Incentive Award Plan (the “2023 Plan”), which replaced the 2013 Omnibus Incentive Plan and the Sprint Corporation Amended and Restated 2015 Omnibus Incentive Plan that T-Mobile assumed in connection with the closing of the Sprint Merger (collectively, with the 2023 Plan, the “Incentive Plans”). Under the 2023 Plan, we are authorized to issue up to 33 million shares of our common stock and can grant stock options, stock appreciation rights, restricted stock, RSUs and PRSUs to eligible employees, consultants, advisors and non-employee directors. As of December 31, 2025, there were approximately 25 million shares of common stock available for future grants under the 2023 Plan.

We grant RSUs to eligible employees, key executives and certain non-employee directors and PRSUs to eligible key executives. RSUs entitle the grantee to receive shares of our common stock upon vesting (with vesting generally occurring annually over a three-year service period), subject to continued service through the applicable vesting date. PRSUs entitle the holder to receive shares of our common stock at the end of a performance period of generally up to three years , if the applicable performance goals are achieved, and generally subject to continued service through the applicable performance period. The number of shares ultimately received by the holder of PRSUs is dependent on our business performance against the specified performance goal(s) over a pre-established performance period. We also maintain an employee stock purchase plan (“ESPP”), under which eligible employees can purchase our common stock at a discounted price.

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Index for Notes to the Consolidated Financial Statements

Stock-based compensation expense and related income tax benefits were as follows:
As of and for the Year Ended December 31,
(in millions, except shares, per share and contractual life amounts) 2025 2024 2023
Stock-based compensation expense $ 829   $ 649   $ 667  
Income tax benefit related to stock-based compensation $ 146   $ 129   $ 130  
Weighted-average fair value per stock award granted $ 254.93   $ 162.99   $ 143.09  
Unrecognized compensation expense $ 932   $ 645   $ 637  
Weighted-average period to be recognized (years) 1.9 1.8 1.8
Fair value of stock awards vested $ 1,333   $ 820   $ 889  

Stock Awards

The following activity occurred under the Incentive Plans during the year ended December 31, 2025:

Time-Based Restricted Stock Units
(in millions, except shares, per share and contractual life amounts) Number of Units or Awards Weighted-Average Grant Date Fair Value Weighted-Average Remaining Contractual Term (Years) Aggregate Intrinsic Value

Nonvested, December 31, 2024
6,637,235   $ 151.55   0.8 $ 1,465  

Granted 4,164,914   259.31  
Assumed through acquisition 339,324   233.41  
Vested ( 4,535,878 ) 166.10  
Forfeited ( 554,457 ) 217.70  

Nonvested, December 31, 2025
6,051,138   215.34   0.8 1,226  

Performance-Based Restricted Stock Units
(in millions, except shares, per share and contractual life amounts) Number of Units or Awards Weighted-Average Grant Date Fair Value Weighted-Average Remaining Contractual Term (Years) Aggregate Intrinsic Value

Nonvested, December 31, 2024
559,364   $ 159.79   0.9 $ 123  

Granted 400,650   269.28  
Performance award achievement adjustments (1)
241,488   155.67  
Vested ( 614,347 ) 164.83  
Forfeited ( 69,035 ) 256.21  

Nonvested, December 31, 2025
518,120   223.71   1.6 105  

(1) Represents PRSUs granted prior to 2025 for which the performance achievement period was completed in 2025, resulting in incremental unit awards. These PRSU awards are also included in the amount vested in 2025.

PRSUs included in the table above are shown at target. Share payout can range from 0 % to 200 % based on different performance outcomes. Weighted-average grant date fair value of RSU and PRSU awards assumed through acquisition is based on the fair value on the date assumed.

Payment of the underlying shares in connection with the vesting of RSU and PRSU awards generally triggers a tax obligation for the employee, which is required to be remitted to the relevant tax authorities. With respect to RSUs and PRSUs settled in shares, we have agreed to withhold shares of common stock otherwise issuable under the RSU and PRSU awards to cover certain of these tax obligations, with the net shares issued to the employee accounted for as outstanding common stock. We withheld 1,677,377 , 1,552,111 and 2,027,800 shares of common stock to cover tax obligations associated with the payment of shares upon vesting of stock awards and remitted cash of $ 434 million, $ 269 million and $ 297 million to the appropriate tax authorities for the years ended December 31, 2025, 2024 and 2023, respectively.

Employee Stock Purchase Plan

Our ESPP allows eligible employees to contribute up to 15 % of their eligible earnings toward the semi-annual purchase of our shares of common stock at a discounted price, subject to an annual maximum dollar amount. Employees can purchase stock at a 15 % discount applied to the closing stock price on the first or last day of the six-month offering period, whichever price is
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Index for Notes to the Consolidated Financial Statements

lower. The number of shares issued under our ESPP was 1,150,449 , 1,519,242 and 1,771,475 for the years ended December 31, 2025, 2024 and 2023, respectively. In June 2023, the stockholders of the Company approved an amendment to our ESPP plan, increasing the share reserve to 14,000,000 . As of December 31, 2025, the number of securities remaining available for future sale and issuance under the ESPP was 10,622,260 .

Pension and Other Postretirement Benefits Plans

On December 20, 2024, we settled $ 572 million of our Sprint Retirement Pension Plan retiree obligations, resulting in a gain of $ 80 million, recognized within Other (expense) income, net on our Consolidated Statements of Comprehensive Income. This partial plan settlement is the result of us purchasing a nonparticipating annuity that involves the transfer of significant risk from us to the insurance company (commonly referred to as a “buy-out”). This transaction is an irrevocable action, relieves us of our responsibility for the postretirement benefit obligations that were settled, and eliminates the risks related to the obligation and the assets used to effect the settlement.

The objective for the investment portfolio of the Pension Plan is to achieve a long-term nominal rate of return, net of fees, that exceeds the Pension Plan's long-term expected rate of return on investments for funding purposes. To meet this objective, our investment strategy is governed by an asset allocation policy, whereby a targeted allocation percentage is assigned to each asset class as follows: 51 % to equities; 30 % to fixed income investments; and 19 % to real estate, infrastructure and private assets. Actual allocations are allowed to deviate from target allocation percentages within a range for each asset class as defined in the investment policy. The long-term expected rate of return on plan assets was 8 % and 7 % for the years ended December 31, 2025 and 2024, respectively, while the actual rate of return on plan assets was 16 % and 6 % for the years ended December 31, 2025 and 2024, respectively. The long-term expected rate of return on investments for funding purposes is 8 % for the year ending December 31, 2026.

The components of net benefit recognized for the Pension Plan were as follows:
Year Ended December 31,
(in millions) 2025 2024 2023

Interest on projected benefit obligations $ 50   $ 83   $ 86  
Gain on settlement and amortization of actuarial gain ( 8 ) ( 119 ) ( 59 )
Expected return on pension plan assets ( 52 ) ( 99 ) ( 97 )

Net pension benefit $ ( 10 ) $ ( 135 ) $ ( 70 )

The net benefit associated with the Pension Plan is included in Other income (expense), net on our Consolidated Statements of Comprehensive Income.

Investments of the Pension Plan are measured at fair value on a recurring basis, which is determined using quoted market prices or estimated fair values. As of December 31, 2025, 13 % of the investment portfolio was valued at quoted prices in active markets for identical assets, 76 % was valued using quoted prices for similar assets in active or inactive markets, or other observable inputs, and 11 % was valued using unobservable inputs that are supported by little or no market activity, the majority of which used the net asset value per share (or its equivalent) as a practical expedient to measure the fair value. As of December 31, 2024, 26 % of the investment portfolio was valued at quoted prices in active markets for identical assets, 62 % was valued using quoted prices for similar assets in active or inactive markets, or other observable inputs, and 12 % was valued using unobservable inputs that are supported by little or no market activity, the majority of which used the net asset value per share (or its equivalent) as a practical expedient to measure the fair value.

The fair values of our Pension Plan assets and certain other postretirement benefit plan assets in aggregate were $ 732  million and $ 626  million as of December 31, 2025 and 2024, respectively. Our accumulated benefit obligations in aggregate were $ 908  million and $ 895  million as of December 31, 2025 and 2024, respectively. As a result, the plans were underfunded by approximately $ 176 million and $ 269 million as of December 31, 2025 and 2024, respectively, and were recorded in Other long-term liabilities on our Consolidated Balance Sheets. In determining our pension obligation for the years ended December 31, 2025 and 2024, we used a weighted-average discount rate of 6 % for both years.

During the years ended December 31, 2025, 2024 and 2023, we made contributions of $ 66 million, $ 52 million and $ 32 million, respectively, to the benefit plans. We expect to make contributions to the Plan of $ 31 million through the year ending December 31, 2026.

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Index for Notes to the Consolidated Financial Statements

Future benefits expected to be paid are approximately $ 54 million for the 12-month period ending December 31, 2026, $ 114 million in total for both of the 12-month periods ending December 31, 2027 and 2028, $ 122 million in total for both of the 12-month periods ending December 31, 2029 and 2030, and $ 323 million in total thereafter.

Employee Retirement Savings Plan

We sponsor retirement savings plans for the majority of our employees under Section 401(k) of the Internal Revenue Code and similar plans. The plans allow employees to contribute a portion of their pre-tax and post-tax income in accordance with specified guidelines. The plans provide that we match a percentage of employee contributions up to certain limits. Employer matching contributions were $ 171 million, $ 159 million and $ 171 million for the years ended December 31, 2025, 2024 and 2023, respectively.

Note 14 – Income Taxes

Our sources of Income before income taxes were as follows:
Year Ended December 31,
(in millions) 2025 2024 2023
U.S. income $ 14,018   $ 14,607   $ 10,943  
Foreign income 263   105   56  
Income before income taxes $ 14,281   $ 14,712   $ 10,999  

Income tax expense is summarized as follows:
Year Ended December 31,
(in millions) 2025 2024 2023
Current tax expense
Federal $ ( 54 ) $ ( 57 ) $ ( 42 )
State ( 295 ) ( 179 ) ( 28 )
Foreign ( 76 ) ( 17 ) ( 12 )
Total current tax expense ( 425 ) ( 253 ) ( 82 )
Deferred tax expense
Federal ( 2,608 ) ( 2,743 ) ( 2,150 )
State ( 216 ) ( 348 ) ( 417 )
Foreign ( 40 ) ( 29 ) ( 33 )
Total deferred tax expense ( 2,864 ) ( 3,120 ) ( 2,600 )
Total income tax expense $ ( 3,289 ) $ ( 3,373 ) $ ( 2,682 )

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Index for Notes to the Consolidated Financial Statements

The following table summarizes income tax expense and the calculation of the effective income tax rate:

Year Ended December 31, 2025 Year Ended December 31, 2024 Year Ended December 31, 2023
(in millions, except percentages) Income Tax Expense Effective Tax Rate Income Tax Expense Effective Tax Rate Income Tax Expense Effective Tax Rate
Pre-tax income $ 14,281   $ 14,712   $ 10,999  
Income tax expense 3,289   3,373   2,682  
Effective income tax rate 23.0   % 22.9   % 24.4   %

US federal statutory income tax rate 2,999   21.0   % 3,089   21.0   % 2,310   21.0   %
Domestic federal
Tax credits ( 286 ) ( 2.0 ) % ( 141 ) ( 1.0 ) % ( 130 ) ( 1.2 ) %
Non-taxable or non-deductible items ( 34 ) ( 0.2 ) % 35   0.2   % ( 5 ) —   %
Cross-border tax laws 55   0.3   % 21   0.2   % 19   0.2   %

Changes in valuation allowances ( 1 ) —   % ( 14 ) ( 0.1 ) % ( 12 ) ( 0.1 ) %
Other 15   0.1   % ( 26 ) ( 0.2 ) % ( 6 ) —   %
Domestic state & local income tax, net of federal income tax effect 421   3.0   % 451   3.1   % 422   3.8   %
Foreign tax effects 67   0.5   % 26   0.2   % 26   0.2   %
Changes in unrecognized tax benefits 53   0.3   % ( 68 ) ( 0.5 ) % 58   0.5   %

Effective income tax rate $ 3,289   23.0   % $ 3,373   22.9   % $ 2,682   24.4   %

In 2025, state and local income taxes in California, Illinois, Iowa, Texas and Wisconsin comprise the majority of the domestic state and local income taxes, net of federal income tax effect category. In 2024, state and local income taxes in California, Florida, Illinois, New Jersey and Texas comprise the majority of that same category. In 2023, state and local income taxes in California, Florida, Illinois, New Jersey, New York and New York City comprise the majority of that same category.

Significant components of deferred income tax assets and liabilities, tax effected, are as follows:

(in millions) December 31,
2025 December 31,
2024
Deferred tax assets
Loss carryforwards $ 2,537   $ 3,844  

Lease liabilities 7,814   7,781  

Reserves and accruals 1,160   958  

Other 2,932   3,959  
Deferred tax assets, gross 14,443   16,542  
Valuation allowance ( 240 ) ( 259 )
Deferred tax assets, net 14,203   16,283  
Deferred tax liabilities
Spectrum licenses 20,105   19,527  
Property and equipment 6,399   5,874  
Lease right-of-use assets 6,543   6,508  

Other 739   1,074  
Total deferred tax liabilities 33,786   32,983  
Net deferred tax liabilities $ 19,583   $ 16,700  

Classified on the consolidated balance sheets as:

Deferred tax liabilities $ 19,583   $ 16,700  

As of December 31, 2025, we have tax effected federal net operating loss (“NOL”) carryforwards of $ 1.8 billion, state NOL carryforwards of $ 1.4 billion and foreign NOL carryforwards of $ 8  million, expiring through 2045. Federal and certain state NOLs of $ 1.7  billion generated in and after 2018 do not expire. As of December 31, 2025, our tax effected federal, state and foreign NOL carryforwards for financial reporting purposes were approximately $ 167 million, $ 682 million and $ 8  million, respectively, less than our NOL carryforwards for federal, state and foreign income tax purposes, due to unrecognized tax benefits of the same amount. The unrecognized tax benefit amounts exclude offsetting tax effects of $ 180 million in other jurisdictions.

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Index for Notes to the Consolidated Financial Statements

As of December 31, 2025, we have research and development, corporate alternative minimum tax, investment and other general business credit carryforwards with a combined value of $ 648 million for federal income tax purposes, an immaterial amount of which begins to expire in 2042.

As of December 31, 2025, 2024 and 2023, our valuation allowance was $ 240 million, $ 259 million and $ 306 million, respectively. The change from December 31, 2024, to December 31, 2025 primarily related to the release of valuation allowance on state NOLs due to the expiration of those attributes. The change from December 31, 2023, to December 31, 2024 primarily related to a reduction in the valuation allowance against federal and state deferred tax assets resulting from a change in expected utilization of accumulated capital losses.

We file income tax returns in the U.S. federal jurisdiction and in various state and foreign jurisdictions. We are currently under examination by various states. Management does not believe the resolution of any of the audits will result in a material change to our financial condition, results of operations or cash flows. The IRS has concluded audits of certain of our federal tax returns, most recently the 2020 tax year; however, NOL and other carryforwards for certain prior periods remain open for examination. U.S. federal, state and foreign examination for years prior to 2006 are generally closed.

A reconciliation of the beginning and ending amount of unrecognized tax benefits were as follows:
Year Ended December 31,
(in millions) 2025 2024 2023
Unrecognized tax benefits, beginning of year $ 1,470   $ 1,477   $ 1,254  
Gross increases to tax positions in prior periods 70   140   19  
Gross decreases to tax positions in prior periods ( 147 ) ( 201 ) ( 39 )
Gross increases to current period tax positions 166   132   256  

Gross decreases due to settlements with taxing authorities ( 62 ) ( 11 ) —  
Gross decreases due to statute of limitations lapse ( 18 ) ( 67 ) ( 13 )
Unrecognized tax benefits, end of year $ 1,479   $ 1,470   $ 1,477  

As of December 31, 2025, 2024 and 2023, we had $ 1.3  billion in unrecognized tax benefits that, if recognized, would affect our annual effective tax rate. Penalties and interest on income tax assessments are included in Selling, general and administrative and Interest expense, respectively, on our Consolidated Statements of Comprehensive Income. The accrued interest and penalties associated with unrecognized tax benefits are insignificant.

Income taxes paid, net of refunds received, were as follows:

Year Ended December 31,
(in millions) 2025 2024 2023
Federal $ 97   $ 113   $ 10  
State & local
Texas 34   27   26  
Illinois 42   NM 18  
California 190   ( 10 ) ( 10 )
Other 65   40   26  
Total state & local 331   57   60  
Foreign
Puerto Rico NM NM 35  
Other 23   9   3  
Total foreign 23   9   38  
Total income taxes paid, net $ 451   $ 179   $ 108  

NM - Not meaningful, the amount of income taxes paid does not meet the 5% disaggregation threshold for reporting.

Note 15 – Stockholder Return Programs

2022 Stock Repurchase Program

On September 8, 2022, our Board of Directors authorized our 2022 Stock Repurchase Program for up to $ 14.0  billion of our common stock through September 30, 2023. During the nine months ended September 30, 2023, we repurchased 77,460,937 shares of our common stock at an average price per share of $ 141.57 for a total purchase price of $ 11.0  billion under the 2022
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Index for Notes to the Consolidated Financial Statements

Stock Repurchase Program. All shares purchased during the nine months ended September 30, 2023, were purchased at market price.

2023-2024 Stockholder Return Program

On September 6, 2023, our Board of Directors authorized our 2023-2024 Stockholder Return Program of up to $ 19.0 billion that ran from October 1, 2023, through December 31, 2024. The 2023-2024 Stockholder Return Program consisted of repurchases of shares of our common stock and the payment of cash dividends.

During the years ended December 31, 2024 and 2023, we paid an aggregate of $ 3.3 billion and $ 747 million, respectively, in cash dividends to our stockholders under the 2023-2024 Stockholder Return Program, which were presented within Net cash used in financing activities on our Consolidated Statements of Cash Flows, of which during the years ended December 31, 2024 and 2023, $ 1.7 billion and $ 393 million, respectively, were paid to DT.

During the years ended December 31, 2024 and 2023, we repurchased 59,376,922 shares of our common stock at an average price per share of $ 187.07 for a total purchase price of $ 11.1  billion and 15,464,107 shares of our common stock at an average price per share of $ 144.95 for a total purchase price of $ 2.2  billion, respectively, under the 2023-2024 Stockholder Return Program. All shares repurchased during the years ended December 31, 2024 and 2023, were purchased at market price.

2025 Stockholder Return Program

On December 13, 2024, we announced that our Board of Directors authorized our 2025 Stockholder Return Program of up to $ 14.0  billion through December 31, 2025. The 2025 Stockholder Return Program consisted of repurchases of shares of our common stock and the payment of cash dividends.

On November 21, 2024, our Board of Directors declared a cash dividend of $ 0.88 per share on our issued and outstanding common stock, which was paid on March 13, 2025, to stockholders of record as of the close of business on February 28, 2025.

On February 6, 2025, our Board of Directors declared a cash dividend of $ 0.88 per share on our issued and outstanding common stock, which was paid on June 12, 2025, to stockholders of record as of the close of business on May 30, 2025.

On June 5, 2025, our Board of Directors declared a cash dividend of $ 0.88 per share on our issued and outstanding common stock, which was paid on September 11, 2025, to stockholders of record as of the close of business on August 29, 2025.

On September 18, 2025, our Board of Directors declared a cash dividend of $ 1.02 per share on our issued and outstanding common stock, which was paid on December 11, 2025, to stockholders of record as of the close of business on November 26, 2025.

During the year ended December 31, 2025, we paid an aggregate of $ 4.1 billion in cash dividends to our stockholders under the 2025 Stockholder Return Program, which were presented within Net cash used in financing activities on our Consolidated Statements of Cash Flows, of which during the year ended December 31, 2025, $ 2.1 billion were paid to DT.

During the year ended December 31, 2025, we repurchased 42,363,226 shares of our common stock at an average price per share of $ 232.96 for a total purchase price of $ 9.9 billion, under the 2025 Stockholder Return Program. All shares repurchased during the year ended December 31, 2025, were purchased at market price.

2026 Stockholder Return Program

On December 11, 2025, we announced that our Board of Directors authorized our 2026 Stockholder Return Program of up to $ 14.6 billion that will run through December 31, 2026. The 2026 Stockholder Return Program is expected to consist of additional repurchases of shares of our common stock and the payment of cash dividends. The amount available under the 2026 Stockholder Return Program for share repurchases will be reduced by the amount of any cash dividends declared and paid by us.

Under the 2026 Stockholder Return Program, share repurchases can be made from time to time using a variety of methods, which may include open market purchases, Rule 10b5-1 plans, accelerated share repurchases, privately negotiated transactions or otherwise, all in accordance with the rules of the Securities and Exchange Commission and other applicable legal requirements. The specific timing and amount of any share repurchases, and the specific timing and amount of any dividend payments, under the 2026 Stockholder Return Program will depend on prevailing share prices, general economic and market
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conditions, Company performance, and other considerations. In addition, the specific timing and amount of any dividend payments are subject to being declared on future dates by the Board in its sole discretion. The 2026 Stockholder Return Program does not obligate the Company to acquire any particular amount of common stock or to declare and pay any particular amount of dividends, and the 2026 Stockholder Return Program may be suspended or discontinued at any time at the Company’s discretion.

On December 4, 2025, our Board of Directors declared a cash dividend of $ 1.02 per share on our issued and outstanding common stock, which will be paid on March 12, 2026, to stockholders of record as of the close of business on February 27, 2026. As of December 31, 2025, $ 1.1 billion for dividends payable is presented within Other current liabilities on our Consolidated Balance Sheets, of which $ 594 million is payable to DT.

During the year ended December 31, 2025, we did not repurchase any shares of our common stock under the 2026 Stockholder Return Program. As of December 31, 2025, we had up to $ 14.6 billion remaining under the 2026 Stockholder Return Program.

Subsequent to December 31, 2025, from January 1, 2026, through February 6, 2026, we repurchased 5,106,691 shares of our common stock at an average price per share of $ 192.61 for a total purchase price of $ 984 million. As of February 6, 2026, we had up to $ 13.6  billion remaining under the 2026 Stockholder Return Program for repurchases of shares and quarterly dividends through December 31, 2026.

Note 16 – Earnings Per Share

The computation of basic and diluted earnings per share was as follows:
Year Ended December 31,
(in millions, except shares and per share amounts) 2025 2024 2023

Net income $ 10,992   $ 11,339   $ 8,317  

Weighted-average shares outstanding – basic (1) (2)
1,127,984,348   1,169,195,373   1,185,121,562  
Effect of dilutive securities:
Outstanding stock options, unvested stock awards and SoftBank contingent consideration (1) (2)
3,091,903   4,018,525   15,164,702  

Weighted-average shares outstanding – diluted 1,131,076,251   1,173,213,898   1,200,286,264  

Earnings per share – basic $ 9.75   $ 9.70   $ 7.02  
Earnings per share – diluted $ 9.72   $ 9.66   $ 6.93  

Potentially dilutive securities:
Outstanding stock options and unvested stock awards 77,805   25,652   148,537  
Ka’ena Acquisition earnout (3)
—   750,162   —  

(1)     For year ended December 31, 2025, the weighted-average number of shares issuable related to the Ka’ena Acquisition earnout (“Ka’ena Shares”) are included in our calculations of basic and diluted weighted-average shares outstanding based on the 20 trading day volume-weighted average price as of December 31, 2025, as further described below.
(2)     During 2023, the SoftBank Specified Shares (as defined below) were issued and included in our calculations of basic and diluted weighted-average shares outstanding as further described below.
(3)     Represents the Ka’ena Shares that were contingently issuable based on achievement of specified performance indicators from the Ka’ena Acquisition closing date of May 1, 2024, based on the maximum number of shares contingently issuable for the earnout and 20 trading day volume-weighted average price as of December 31, 2024.

As of December 31, 2025, 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 December 31, 2025 and 2024. Potentially dilutive securities were not included in the computation of diluted earnings per share if to do so would have been anti-dilutive.

The Ka’ena Shares were previously contingent consideration for the Ka’ena Acquisition. On June 30, 2025, we amended the Merger and Unit Purchase Agreement to set the calculation of the earnout as the difference between the maximum purchase price of $ 1.35  billion and the upfront payment, as adjusted, and removed the requirement for Ka’ena to achieve specified performance indicators. The Ka’ena Shares issuable are included in the calculation of basic and diluted weighted-average shares outstanding for the year ended December 31, 2025. The Ka’ena Shares are expected to be issued after the Ka’ena Acquisition earnout payment date.

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Index for Notes to the Consolidated Financial Statements

On February 20, 2020, T-Mobile, SoftBank and DT entered into a letter agreement (the “Letter Agreement”). Pursuant to the Letter Agreement, an aggregate of 48,751,557 shares of T-Mobile common stock (the “SoftBank Specified Shares”) were contingently issuable from the Sprint Merger date of April 1, 2020. The SoftBank Specified Shares was determined to be contingent consideration for the Sprint Merger and was not dilutive until the defined volume-weighted average price per share was reached.

The issuance of the SoftBank Specified Shares was contingent on the trailing 45 -trading day volume-weighted average (“VWAP”) per share of T-Mobile common stock on the NASDAQ Global Select Market being equal to or greater than $ 150.00 (the “Threshold Price”), at any time during the period commencing on April 1, 2022, and ending on December 31, 2025 (the “Measurement Period”). In accordance with the terms of the Letter Agreement, the Threshold Price was subject to downward adjustment by the per share amount of any cash dividends or other cash distributions declared or paid on our common stock during the Measurement Period.

As of the close of trading on December 22, 2023, the 45 -trading day VWAP exceeded $ 149.35 , the then-current Threshold Price, and the Company delivered the SoftBank Specified Shares to SoftBank in accordance with the Letter Agreement on December 28, 2023, by reissuing Company treasury shares. Upon reissuance of treasury shares, the Company recorded a reclassification from Treasury shares to Additional paid-in capital of $ 6.9  billion, calculated based on the cost of treasury shares reissued.

The SoftBank Specified Shares issued are included in the calculation of basic and diluted weighted-average shares outstanding from the date the contingency associated with the issuance of the SoftBank Specified Shares was resolved and the beginning of the Company’s fourth quarter of 2023, respectively.

Note 17 – 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 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.

The components of lease expense were as follows:
Year Ended December 31,
(in millions) 2025 2024 2023
Operating lease expense $ 4,945   $ 4,787   $ 4,987  
Financing lease expense:
Amortization of right-of-use assets 794   787   684  
Interest on lease liabilities 126   111   79  
Total financing lease expense 920   898   763  
Variable lease expense 252   279   411  
Total lease expense $ 6,117   $ 5,964   $ 6,161  

Information relating to the lease term and discount rate is as follows:

Year Ended December 31,
2025 2024 2023
Weighted-Average Remaining Lease Term (Years)
Operating leases 8 8 9
Financing leases 2 2 2
Weighted-Average Discount Rate
Operating leases 4.6   % 4.4   % 4.3   %
Financing leases 5.0   % 5.3   % 4.6   %

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Index for Notes to the Consolidated Financial Statements

Maturities of lease liabilities as of December 31, 2025, were as follows:
(in millions) Operating Leases Finance Leases
Twelve Months Ending December 31,
2026 $ 5,060   $ 1,222  
2027 4,782   772  
2028 4,425   347  
2029 4,111   17  
2030 3,730   4  
Thereafter 13,987   7  
Total lease payments 36,095   2,369  
Less: imputed interest ( 5,910 ) ( 99 )
Total $ 30,185   $ 2,270  

Interest payments for financing leases were $ 126 million, $ 111 million and $ 79 million for the years ended December 31, 2025, 2024 and 2023, respectively.

As of December 31, 2025, we have additional operating leases for commercial properties that have not yet commenced with future lease payments of approximately $ 38 million.

As of December 31, 2025, we were contingently liable for future ground lease payments related to certain tower obligations. These contingent obligations are not included in the above table as the amounts owed are contractually owed by CCI based on the subleasing arrangement. See Note 10 – Tower Obligations for further information.

On the UScellular Acquisition Date, we entered into a master license agreement to lease space on at least 2,100 towers being retained by UScellular and extended our tenancy term on approximately 600 additional towers where we are already leasing space from UScellular for 15 years post-closing. In addition, through the master license agreement, we leased space on approximately 1,800 additional UScellular towers on an interim basis for up to 30 months after the UScellular Acquisition Date. As a result of entering into the master license agreement, we recorded right-of use assets and lease liabilities of $ 1.0 billion each on the UScellular Acquisition Date, with a corresponding increase to both deferred tax liabilities and assets of $ 261 million.

Note 18 – 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 2045.

The following table summarizes the timing of such purchase commitments as of December 31, 2025:

(in millions) Less Than 1 Year 1 - 3 Years 3 - 5 Years More Than 5 Years Total
Purchase commitments (1)
$ 5,047   $ 6,181   $ 2,990   $ 2,836   $ 17,054  

(1)     These amounts are not reflective of our entire anticipated purchases under the related agreements but are determined based on the non-cancelable quantities or termination amounts to which we are contractually obligated.

On April 24, 2024, we entered into a definitive agreement with a fund operated by EQT, Fund VI, to establish a joint venture between us and Fund VI to acquire Lumos, a fiber-to-the-home platform, from EQT’s predecessor fund, EQT Infrastructure III. On April 1, 2025, we completed the joint acquisition of Lumos. Pursuant to the definitive agreement, we expect to make an additional capital contribution of approximately $ 500  million between 2027 and 2028 under the existing business plan. The additional capital contribution is excluded from our reported purchase commitments above. See Note 3 – Joint Ventures for additional details.

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Index for Notes to the Consolidated Financial Statements

Spectrum

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.

The following table summarizes the timing of spectrum lease and service credit commitments, including renewal periods as of December 31, 2025:

(in millions) Less Than 1 Year 1 - 3 Years 3 - 5 Years More Than 5 Years Total
Spectrum leases and service credits $ 297   $ 629   $ 645   $ 3,448   $ 5,019  

On September 12, 2023, we entered into a License Purchase Agreement with Comcast pursuant to which we will acquire spectrum in the 600 MHz band from Comcast in exchange for total cash consideration of between $ 1.2  billion and $ 3.3  billion, subject to an application for FCC approval. The licenses are subject to an exclusive leasing arrangement between us and Comcast entered into contemporaneously with the License Purchase Agreement. On January 13, 2025, we and Comcast entered into an amendment to the License Purchase Agreement pursuant to which we will acquire additional spectrum. Subsequent to the amendment, the total cash consideration for the transaction is between $ 1.2  billion and $ 3.4  billion. The agreement remains subject to an application for FCC approval and is excluded from our reported purchase commitments above. See Note 7 – Goodwill, Spectrum License Transactions and Other Intangible Assets for additional details.

Sprint Merger Commitments

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

Contingencies and Litigation

Litigation and Regulatory Matters

We are involved in various lawsuits and disputes, claims, government agency investigations and enforcement actions, and other proceedings (“Litigation and Regulatory Matters”) that arise in the ordinary course of business, which include claims of patent infringement (most of which are asserted by non-practicing entities primarily seeking monetary damages), class actions, and proceedings to enforce FCC or other government agency rules and regulations. Those Litigation and Regulatory Matters are at various stages, and some of them may proceed to trial, arbitration, hearing, or other adjudication that could result in fines, penalties, or awards of monetary or injunctive relief in the coming 12 months if they are not otherwise resolved. We have established an accrual with respect to certain of these matters, where appropriate. The accruals are reflected on our 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 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
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material adverse effect on our financial position, but we note that an unfavorable outcome of some or all of the specific matters identified below, or other matters that we are or may become involved in could have a material adverse impact on results of operations or cash flows for a particular period. This assessment is based on our current understanding of relevant facts and circumstances. As such, our view of these matters is subject to inherent uncertainties and may change in the future.

On February 28, 2020, T-Mobile and Sprint each received a Notice of Apparent Liability for Forfeiture and Admonishment from the FCC, which proposed a penalty for allegedly violating section 222 of the Communications Act and the FCC’s regulations governing the privacy of customer information. On April 29, 2024, the FCC issued Forfeiture Orders against T-Mobile and Sprint that largely adopted the allegations and conclusions of the Notices of Apparent Liability and imposed penalties on T-Mobile and Sprint. T-Mobile and Sprint paid those penalties under protest, and on June 27, 2024, T-Mobile and Sprint filed Petitions for Review challenging the FCC’s Forfeiture Orders in the United States Court of Appeals for the District of Columbia. On August 15, 2025, a panel of three judges denied the petitions for review. On January 23, 2026, the Court of Appeals denied T-Mobile’s petitions for rehearing and rehearing en banc. T-Mobile intends to file a petition for a writ of certiorari with the United States Supreme Court. We are unable to predict the potential outcome of those proceedings.

On April 1, 2020, in connection with the closing of the Sprint 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.

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

On August 12, 2021, we became aware of a cybersecurity issue involving unauthorized access to T-Mobile’s systems (the “August 2021 cyberattack”). 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.

As a result of the August 2021 cyberattack, we have become subject to numerous lawsuits, including mass arbitration claims and multiple class action lawsuits that have been filed in numerous jurisdictions seeking, among other things, unspecified monetary damages, costs and attorneys’ fees arising out of the August 2021 cyberattack. In December 2021, the Judicial Panel on Multidistrict Litigation consolidated the federal class action lawsuits in the U.S. District Court for the Western District of Missouri under the caption In re: T-Mobile Customer Data Security Breach Litigation , Case No. 21-md-3019-BCW. On July 22, 2022, we entered into an agreement to settle the lawsuit. On June 29, 2023, the Court issued an order granting final approval of the settlement. All appeals have been resolved, and the settlement is now final. Under the terms of the settlement, we have paid 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. As required under the terms of the settlement, we have spent an aggregate of $ 150  million for data security and related technology in 2022 and 2023. The settlement provides a full release of all claims arising out of the August 2021 cyberattack by class members who did 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 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 class action settlement and the separate settlements, we recorded a total pre-tax charge of approximately $ 400  million in the second quarter of 2022. During the years ended December 31, 2024 and 2023, we recognized $ 105  million and $ 50  million, respectively, 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 Consolidated Statements of Comprehensive Income. There were no reimbursements recognized during the year ended December 31, 2025.

We have also received inquiries and contested legal proceedings 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 reached an agreement with the FCC, which was announced on September 30, 2024, to resolve one of those inquiries. We will continue to cooperate fully with the other agencies and regulators inquiring about the matter with an aim to resolve all of these matters. While we hope to resolve them in the near term, we cannot predict the timing or outcome of any of these matters or whether we may be subject to further regulatory inquiries, investigations, or enforcement actions.
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Index for Notes to the Consolidated Financial Statements