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Economic value added or economic profit is the difference between revenues and costs,where costs include not only expenses, but also cost of capital.

Economic Profit
Net Operating Profit after Taxes (NOPAT)
Cash Operating Taxes
Invested Capital
Cost of Capital
Economic Spread Ratio
Economic Profit Margin

T-Mobile US Inc., economic profit calculation

US$ in millions

12 months ended:	Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019
Net operating profit after taxes (NOPAT)¹	14,313)	7,149)	6,394)	7,224)	5,850)
Cost of capital²	7.07%	7.00%	6.65%	6.72%	7.29%
Invested capital³	186,258)	186,262)	184,079)	177,902)	73,081)

Economic profit⁴	1,140)	(5,892)	(5,846)	(4,722)	520)

Based on: 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31).

¹ NOPAT. See details »

² Cost of capital. See details »

³ Invested capital. See details »

⁴ 2023 Calculation
Economic profit = NOPAT – Cost of capital × Invested capital
= 14,313 – 7.07% × 186,258 = 1,140

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Item	Description	The company
Economic profit	Economic profit is a measure of corporate performance computed by taking the spread between the return on invested capital and the cost of capital, and multiplying by the invested capital.	T-Mobile US Inc. economic profit decreased from 2021 to 2022 but then increased from 2022 to 2023 exceeding 2021 level.

T-Mobile US Inc., NOPAT calculation

US$ in millions

12 months ended:	Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019
Net income	8,317)	2,590)	3,024)	3,064)	3,468)
Deferred income tax expense (benefit)¹	2,600)	492)	197)	709)	1,091)
Increase (decrease) in allowance for credit losses²	(6)	21)	(48)	133)	(6)
Increase (decrease) in deferred revenue³	45)	(76)	(174)	399)	(67)
Increase (decrease) in restructuring initiatives⁴	(358)	384)	(77)	163)	—)
Increase (decrease) in equity equivalents⁵	2,281)	821)	(102)	1,404)	1,018)
Interest expense, net	3,335)	3,364)	3,342)	2,701)	1,111)
Interest expense, operating lease liability⁶	1,367)	1,368)	1,053)	1,193)	616)
Adjusted interest expense, net	4,702)	4,732)	4,395)	3,894)	1,727)
Tax benefit of interest expense, net⁷	(987)	(994)	(923)	(818)	(363)
Adjusted interest expense, net, after taxes⁸	3,715)	3,738)	3,472)	3,076)	1,364)
(Income) loss from discontinued operations, net of tax⁹	—)	—)	—)	(320)	—)
Net operating profit after taxes (NOPAT)	14,313)	7,149)	6,394)	7,224)	5,850)

Based on: 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31).

¹ Elimination of deferred tax expense. See details »

² Addition of increase (decrease) in allowance for credit losses.

³ Addition of increase (decrease) in deferred revenue.

⁴ Addition of increase (decrease) in restructuring initiatives.

⁵ Addition of increase (decrease) in equity equivalents to net income.

⁶ 2023 Calculation
Interest expense on capitalized operating leases = Operating lease liability × Discount rate
= 31,795 × 4.30% = 1,367

⁷ 2023 Calculation
Tax benefit of interest expense, net = Adjusted interest expense, net × Statutory income tax rate
= 4,702 × 21.00% = 987

⁸ Addition of after taxes interest expense to net income.

⁹ Elimination of discontinued operations.

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Item	Description	The company
NOPAT	Net operating profit after taxes is income from operations, but after removement of taxes calculated on cash basis that are relevant to operating income.	T-Mobile US Inc. NOPAT increased from 2021 to 2022 and from 2022 to 2023.

T-Mobile US Inc., cash operating taxes calculation

US$ in millions

12 months ended:	Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019
Income tax expense	2,682)	556)	327)	786)	1,135)
Less: Deferred income tax expense (benefit)	2,600)	492)	197)	709)	1,091)
Add: Tax savings from interest expense, net	987)	994)	923)	818)	363)
Cash operating taxes	1,069)	1,058)	1,053)	895)	407)

Based on: 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31).

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Item	Description	The company
Cash operating taxes	Cash operating taxes are estimated by adjusting income tax expense for changes in deferred taxes and tax benefit from the interest deduction.	T-Mobile US Inc. cash operating taxes increased from 2021 to 2022 and from 2022 to 2023.

T-Mobile US Inc., invested capital calculation (financing approach)

US$ in millions

	Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019
Short-term debt	3,619)	5,164)	3,378)	4,579)	25)
Short-term debt to affiliates	—)	—)	2,245)	—)	—)
Short-term financing lease liabilities	1,260)	1,161)	1,120)	1,063)	957)
Long-term debt	69,903)	65,301)	67,076)	61,830)	10,958)
Long-term debt to affiliates	1,496)	1,495)	1,494)	4,716)	13,986)
Long-term financing lease liabilities	1,236)	1,370)	1,455)	1,444)	1,346)
Operating lease liability¹	31,795)	33,367)	29,243)	30,587)	12,826)
Total reported debt & leases	109,309)	107,858)	106,011)	104,219)	40,098)
Stockholders’ equity	64,715)	69,656)	69,102)	65,344)	28,789)
Net deferred tax (assets) liabilities²	13,458)	10,884)	10,216)	9,966)	5,607)
Allowance for credit losses³	161)	167)	146)	194)	61)
Deferred revenue⁴	825)	780)	856)	1,030)	631)
Restructuring initiatives⁵	112)	470)	86)	163)	—)
Equity equivalents⁶	14,556)	12,301)	11,304)	11,353)	6,299)
Accumulated other comprehensive (income) loss, net of tax⁷	964)	1,046)	1,365)	1,581)	868)
Adjusted stockholders’ equity	80,235)	83,003)	81,771)	78,278)	35,956)
Construction in progress⁸	(3,286)	(4,599)	(3,703)	(4,595)	(2,973)
Invested capital	186,258)	186,262)	184,079)	177,902)	73,081)

Based on: 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31).

¹ Addition of capitalized operating leases.

² Elimination of deferred taxes from assets and liabilities. See details »

³ Addition of allowance for doubtful accounts receivable.

⁴ Addition of deferred revenue.

⁵ Addition of restructuring initiatives.

⁶ Addition of equity equivalents to stockholders’ equity.

⁷ Removal of accumulated other comprehensive income.

⁸ Subtraction of construction in progress.

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Item	Description	The company
Invested capital	Capital is an approximation of the economic book value of all cash invested in going-concern business activities.	T-Mobile US Inc. invested capital increased from 2021 to 2022 but then slightly decreased from 2022 to 2023.

T-Mobile US Inc., cost of capital calculations

Dec 31, 2023

	Capital (fair value)¹	Weights					Cost of capital
Equity²	192,011)	192,011)	÷	296,718)	=	0.65	0.65	×	9.16%	=	5.93%
Short-term and long-term debt, including financing lease liabilities³	72,912)	72,912)	÷	296,718)	=	0.25	0.25	×	4.02% × (1 – 21.00%)	=	0.78%
Operating lease liability⁴	31,795)	31,795)	÷	296,718)	=	0.11	0.11	×	4.30% × (1 – 21.00%)	=	0.36%
Total:	296,718)					1.00					7.07%

Based on: 10-K (reporting date: 2023-12-31).

¹ US$ in millions

² Equity. See details »

³ Short-term and long-term debt, including financing lease liabilities. See details »

⁴ Operating lease liability. See details »

Dec 31, 2022

	Capital (fair value)¹	Weights					Cost of capital
Equity²	179,847)	179,847)	÷	279,964)	=	0.64	0.64	×	9.16%	=	5.88%
Short-term and long-term debt, including financing lease liabilities³	66,750)	66,750)	÷	279,964)	=	0.24	0.24	×	3.88% × (1 – 21.00%)	=	0.73%
Operating lease liability⁴	33,367)	33,367)	÷	279,964)	=	0.12	0.12	×	4.10% × (1 – 21.00%)	=	0.39%
Total:	279,964)					1.00					7.00%

Based on: 10-K (reporting date: 2022-12-31).

¹ US$ in millions

² Equity. See details »

³ Short-term and long-term debt, including financing lease liabilities. See details »

⁴ Operating lease liability. See details »

Dec 31, 2021

	Capital (fair value)¹	Weights					Cost of capital
Equity²	155,512)	155,512)	÷	265,707)	=	0.59	0.59	×	9.16%	=	5.36%
Short-term and long-term debt, including financing lease liabilities³	80,952)	80,952)	÷	265,707)	=	0.30	0.30	×	4.05% × (1 – 21.00%)	=	0.97%
Operating lease liability⁴	29,243)	29,243)	÷	265,707)	=	0.11	0.11	×	3.60% × (1 – 21.00%)	=	0.31%
Total:	265,707)					1.00					6.65%

Based on: 10-K (reporting date: 2021-12-31).

¹ US$ in millions

² Equity. See details »

³ Short-term and long-term debt, including financing lease liabilities. See details »

⁴ Operating lease liability. See details »

Dec 31, 2020

	Capital (fair value)¹	Weights					Cost of capital
Equity²	148,167)	148,167)	÷	259,461)	=	0.57	0.57	×	9.16%	=	5.23%
Short-term and long-term debt, including financing lease liabilities³	80,707)	80,707)	÷	259,461)	=	0.31	0.31	×	4.56% × (1 – 21.00%)	=	1.12%
Operating lease liability⁴	30,587)	30,587)	÷	259,461)	=	0.12	0.12	×	3.90% × (1 – 21.00%)	=	0.36%
Total:	259,461)					1.00					6.72%

Based on: 10-K (reporting date: 2020-12-31).

¹ US$ in millions

² Equity. See details »

³ Short-term and long-term debt, including financing lease liabilities. See details »

⁴ Operating lease liability. See details »

Dec 31, 2019

	Capital (fair value)¹	Weights					Cost of capital
Equity²	70,928)	70,928)	÷	111,927)	=	0.63	0.63	×	9.16%	=	5.81%
Short-term and long-term debt, including financing lease liabilities³	28,173)	28,173)	÷	111,927)	=	0.25	0.25	×	5.30% × (1 – 21.00%)	=	1.05%
Operating lease liability⁴	12,826)	12,826)	÷	111,927)	=	0.11	0.11	×	4.80% × (1 – 21.00%)	=	0.43%
Total:	111,927)					1.00					7.29%

Based on: 10-K (reporting date: 2019-12-31).

¹ US$ in millions

² Equity. See details »

³ Short-term and long-term debt, including financing lease liabilities. See details »

⁴ Operating lease liability. See details »

T-Mobile US Inc., economic spread ratio calculation, comparison to benchmarks

	Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019
Selected Financial Data (US$ in millions)
Economic profit¹	1,140)	(5,892)	(5,846)	(4,722)	520)
Invested capital²	186,258)	186,262)	184,079)	177,902)	73,081)
Performance Ratio
Economic spread ratio³	0.61%	-3.16%	-3.18%	-2.65%	0.71%
Benchmarks
Economic Spread Ratio, Competitors⁴
AT&T Inc.	0.20%	-6.55%	0.95%	-6.01%	-2.26%
Verizon Communications Inc.	-0.61%	2.42%	3.19%	2.59%	4.24%

Based on: 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31).

¹ Economic profit. See details »

² Invested capital. See details »

³ 2023 Calculation
Economic spread ratio = 100 × Economic profit ÷ Invested capital
= 100 × 1,140 ÷ 186,258 = 0.61%

⁴ Click competitor name to see calculations.

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Performance ratio	Description	The company
Economic spread ratio	The ratio of economic profit to invested capital, also equal to the difference between return on invested capital (ROIC) and cost of capital.	T-Mobile US Inc. economic spread ratio improved from 2021 to 2022 and from 2022 to 2023.

T-Mobile US Inc., economic profit margin calculation, comparison to benchmarks

	Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019
Selected Financial Data (US$ in millions)
Economic profit¹	1,140)	(5,892)	(5,846)	(4,722)	520)

Revenues	78,558)	79,571)	80,118)	68,397)	44,998)
Add: Increase (decrease) in deferred revenue	45)	(76)	(174)	399)	(67)
Adjusted revenues	78,603)	79,495)	79,944)	68,796)	44,931)
Performance Ratio
Economic profit margin²	1.45%	-7.41%	-7.31%	-6.86%	1.16%
Benchmarks
Economic Profit Margin, Competitors³
AT&T Inc.	0.54%	-16.80%	2.46%	-14.42%	-5.46%
Verizon Communications Inc.	-1.39%	5.34%	6.93%	4.99%	7.09%

Based on: 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31).

¹ Economic profit. See details »

² 2023 Calculation
Economic profit margin = 100 × Economic profit ÷ Adjusted revenues
= 100 × 1,140 ÷ 78,603 = 1.45%

³ Click competitor name to see calculations.

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Performance ratio	Description	The company
Economic profit margin	The ratio of economic profit to sales. It is the company profit margin covering income efficiency and asset management. Economic profit margin is not biased in favor of capital-intensive business models, because any added capital is a cost to the economic profit margin.	T-Mobile US Inc. economic profit margin deteriorated from 2021 to 2022 but then improved from 2022 to 2023 exceeding 2021 level.

T-Mobile US Inc. (NASDAQ:TMUS)

Economic Value Added (EVA)

Economic Profit

Net Operating Profit after Taxes (NOPAT)

Cash Operating Taxes

Invested Capital

Cost of Capital

Economic Spread Ratio

Economic Profit Margin