v3.26.1
Sales of Certain Receivables
 3 Months Ended
Mar. 31, 2026
Transfers and Servicing [Abstract]  
Sales of Certain Receivables
Note 4 – Sales of Certain Receivables

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

Sales of EIP Receivables

Overview of the Transaction

In 2015, we entered into an arrangement to sell certain EIP receivables on a revolving basis (the “EIP Sale Arrangement”), which expires November 2026. As of both March 31, 2026, and December 31, 2025, the EIP Sale Arrangement provided funding of $1.3 billion.

In connection with this EIP Sale Arrangement, we formed a wholly owned subsidiary, which qualifies as a bankruptcy remote entity (the “EIP BRE”). We consolidate the EIP BRE under the VIE model.
The following table summarizes the carrying amounts and classification of liabilities, which consist of the recourse guarantee, included on our Condensed Consolidated Balance Sheets with respect to the EIP BRE:
(in millions)March 31,
2026		December 31,
2025
Other current liabilities$92 $90 
Other long-term liabilities13 13 

Sales of Service Accounts Receivable

Overview of the Transaction

In 2014, we entered into an arrangement to sell certain service accounts receivable on a revolving basis (the “Service Receivable Sale Arrangement”). On February 24, 2026, we extended the scheduled expiration date of the Service Receivable Sale Arrangement to February 23, 2027. As of both March 31, 2026, and December 31, 2025, the Service Receivable Sale Arrangement provided funding of $775 million.

In connection with the Service Receivable Sale Arrangement, we formed a wholly owned subsidiary, which qualifies as a bankruptcy remote entity, to sell service accounts receivable (the “Service BRE”). We consolidate the Service BRE under the VIE model.

The following table summarizes the carrying amounts and classification of liabilities included on our Condensed Consolidated Balance Sheets with respect to the Service BRE:
(in millions)March 31,
2026		December 31,
2025
Other current liabilities$287 $306 

Sales of Receivables

The credit enhancement feature of each of the EIP Sale Arrangement and the Service Receivable Sale Arrangement is in the form of a recourse guarantee liability, which is collateralized by pledged but unsold receivables. The recourse guarantee 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 Condensed 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 $132 million and $130 million as of March 31, 2026, and December 31, 2025, respectively. These liabilities were collateralized by $284 million and $266 million of gross service receivables and $579 million and $535 million of gross EIP receivables pledged, but unsold as of March 31, 2026, and December 31, 2025, 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 Condensed Consolidated Balance Sheets:
(in millions)March 31,
2026		December 31,
2025
Derecognized net service accounts receivable and EIP receivables$1,669 $1,651 
Other current liabilities379 397 
of which, recourse guarantee119 117 
Other long-term liabilities13 13 
of which, recourse guarantee13 13 
Net cash proceeds since inception1,352 1,372 
Of which:
Change in net cash proceeds during the year-to-date period(20)(96)
Net cash proceeds funded by reinvested collections1,372 1,468 

We recognized losses from sales of receivables, including changes in fair value of the recourse guarantee liabilities, of $20 million and $22 million for the three months ended March 31, 2026 and 2025, respectively, in Selling, general and administrative expenses on our Condensed 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 EIP receivables and service accounts 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.