Financial Analysis

Note 2 Business Combinations Acquisition of Kaena 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 Kaena Corporation and its subsidiaries, including, among others, Mint Mobile LLC (collectively, Kaena), 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 Kaena 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 Kaena 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 Kaena Acquisition Date), we completed the Kaena Acquisition, and as a result, Kaena became a wholly owned subsidiary of T-Mobile. Concurrently, and as agreed upon through the Merger and Unit Purchase Agreement, T-Mobile and Kaena entered into certain separate transactions, including the effective settlement of the preexisting wholesale arrangement between T-Mobile and Kaena and agreements with certain of the sellers to provide services to T-Mobile during the post-acquisition period. In accordance with the …

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Note 14 Commitments and Contingencies 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 Group Corp. (SoftBank) and DISH Network Corporation (DISH) and entered by the U.S. District Court for the District of Columbia, and the FCCs 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 dispu …

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Note 8 Debt The following table sets forth the debt balances and activity as of, and for the six months ended, June 30, 2026: (in millions) December 31, 2025 Proceeds from Issuances and Borrowings (1) Redemptions and Repayments (1) Reclassifications (1) Other (2) June 30, 2026 Short-term debt $ 5,135 $ $ (4,771) $ 5,751 $ 2 $ 6,117 Long-term debt 79,649 6,393 (1,497) (5,751) (290) 78,504 Total debt to third parties 84,784 6,393 (6,268) (288) 84,621 Long-term debt to affiliates 1,498 (1,498) Total debt $ 86,282 $ 6,393 $ (7,766) $ $ (288) $ 84,621 (1) Issuances and borrowings, note redemptions and reclassifications are recorded net of accrued or paid issuance costs and discounts. (2) Other includes the amortization of premiums, discounts, debt issuance costs and consent fees and the impact from changes in foreign currency exchange rates. Our effective interest rate, excluding the impact of derivatives and capitalized interest, was 4.3% and 4.1% on weighted-average debt outstanding of $85.1 billion and $83.5 billion for the three months ended June 30, 2026 and 2025, respectively, and 4.2% and 4.1% on weighted-average debt outstanding of $85.9 billion and $81.7 billion for the six months ended June 30, 2026 and 2025, 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, …

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Note 7 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 Condensed 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 …

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Note 6 Spectrum License Transactions Spectrum Licenses The following table summarizes our spectrum license activity for the six months ended June 30, 2026: (in millions) Spectrum Spectrum licenses, beginning of year $ 98,032 Spectrum license acquisitions 653 Spectrum licenses transferred to held for sale (507) Spectrum licenses, end of period $ 98,178 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 Condensed Consolidated Statements of Cash Flows. Spectrum Auction In June 2026, the Federal Communications Commission (FCC) announced that we were the winning bidder of 102 licenses in Auction 113 (AWS-3 band spectrum) for an aggregate purchase price of $278 million. At the inception of Auction 113 in April 2026, we deposited $25 million. The $25 million deposit made to the FCC is included in Other assets on our Condensed Consolidated Balance Sheets as of June 30, 2026, and will remain there until the corresponding licenses are received. On July 10, 2026, we paid the FCC an additional $31 million and expect to pay the remaining $222 million on July 24, 2026, for the licenses won in the auction. The timing of when the licenses will be issued will be determined by the FCC after all post-auction procedures have been c …

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Accounting Pronouncements Adopted During the Current Year Interim Reporting In December 2025, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (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. We evaluated this standard and concluded our interim reporting disclosures are consistent with this standard. Accordingly, the adoption of this standard in the first quarter of 2026 did not have a material impact on our interim reporting disclosures. Internal-Use Software Accounting and Disclosures In September 2025, the FASB issued ASU 2025-06, IntangiblesGoodwill and OtherInternal-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 capitali …

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Note 15 Restructuring Costs UScellular Acquisition Restructuring Initiatives Upon completing the UScellular Acquisition on August 1, 2025, we began implementing restructuring initiatives to realize cost efficiencies and eliminate redundancies. The major activities associated with the UScellular Acquisition restructuring initiatives include contract termination costs associated with the rationalization of retail stores, distribution channels, duplicative network and backhaul services and other agreements, severance costs associated with the integration of redundant processes and functions and the decommissioning of certain cell sites and distributed antenna systems to achieve synergies in network costs. The following table summarizes the expenses incurred in connection with our UScellular Acquisition restructuring initiatives: (in millions) Three Months Ended June 30, 2026 Six Months Ended June 30, 2026 Incurred to Date Contract termination costs $ 51 $ 92 $ 124 Severance costs 31 57 120 Network decommissioning 8 26 42 Total restructuring plan expenses $ 90 $ 175 $ 286 The expenses associated with our UScellular Acquisition restructuring initiatives are included in Cost of services and Selling, general and administrative expenses on our Condensed Consolidated Statements of Comprehensive Income. Our UScellular Acquisition restructuring initiatives also include the acceleration or termination of certain of our operating leases for cell sites, switch sites and retail stores. Incr …

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Note 10 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: Postpaid generally includes customers that 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 generally includes customers that 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. The balances presented in each revenue line item on our Condensed Consolidated Statements of Comprehensive Income represent categories of revenue from contracts with customers disaggregated by type of product and service. Postpaid and prepaid service revenues also include revenues earned for providing premium services to customers, such as device insurance services. Contract Balances The contract asset and contract liability balances from contracts with customers as of June 30, 2026 and December 31, 2025, were as follows: (in millions) Contract Assets Contract Liabilities Balance as of December 31, 2025 $ 1,307 $ 1,653 Balance as of June 30, 2026 1,283 1,511 Change $ (24) $ (142) Contract assets primarily represent revenue recognized for equipmen …

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Note 11 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 Part II, Item 8, Note 1 Summary of Significant Accounting Policies of our Annual Report on Form 10-K for the year ended December 31, 2025. Our chief operating decision maker (CODM) is our President and Chief Executive Officer. The CODM uses Net income, as reported on our Condensed 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: Three Months Ended June 30, Six Months Ended June 30, (in millions) 2026 2025 2026 2025 Total revenues $ 22,791 $ 21,132 $ 45,898 $ 42,018 Less: Significant and other segment expenses Cost of equipment sales 5,055 4,659 10,543 9,457 Employee expenses 1,971 1,902 4,105 3,811 L …

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Note 17 Subsequent Events On July 1, 2026, the FCC approved the sale of our 800 MHz spectrum licenses to Grain. See Note 6 - Spectrum License Transactions for additional information. From July 1, 2026, through July 17, 2026, we repurchased 2,149,600 shares of our common stock at an average price per share of $182.53 for a total purchase price of $392 million. See Note 12 - Stockholder Return Program for additional information. …

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