v3.25.4
Sales of Certain Receivables
 12 Months Ended
Dec. 31, 2025
Transfers and Servicing [Abstract]  
Sales of Certain Receivables
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.
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 liabilities13 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 
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 liabilities397 409 
of which, recourse guarantee117 116 
Other long-term liabilities13 32 
of which, recourse guarantee13 32 
Net cash proceeds since inception1,372 1,468 
Of which:
Change in net cash proceeds during the year-to-date period(96)(115)
Net cash proceeds funded by reinvested collections1,468 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.
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.