T-Mobile was hit by an investor complaint on Wednesday, questioning some of its accounting and disclosure policies.
CtW Investment Group, a union-backed investor activism firm, said it asked the Securities and Exchange Commission to investigate T-Mobile’s reporting of non-standard accounting measures as well as the company’s policy for how its accounts for customers who default on phone installment payment plans.
T-Mobile, one of the only major telecommunications firms with a non-union workforce, did not have an immediate comment when contacted by Fortune.
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In the eight-page complaint, CtW said that T-Mobile regularly cited non-standard financial results without completely detailing how to reconcile the figures with standard measures under Generally Accepted Accounting Principles, or GAAP. The SEC allows companies to give investors non-standard metrics, but requires that the companies also detail exactly how the metrics differ from the closest GAAP measures.
In T-Mobile’s case, CtW said the company reported to investors a non-standard measure of cash flow called adjusted earnings before interest, taxes, depreciation, and amortization. In 2015, T-Mobile shifted some customers from phone installment payment plans to phone leases, a change which would have an impact on cash flow, but which was not detailed, CtW said. That left investors in the dark about part of the company’s financial situation, CtW said.
CtW also complained that T-Mobile (TMUS) excluded amounts it spent to buy spectrum licenses when it reported its free cash flow, a measure which is supposed to indicate how much cash a company is producing after deducting current expenses and capital costs. Over the past three years, T-Mobile did not include in its free cash flow calculation $4.6 billion it spent for the licenses, CtW said, making its cash flow look significantly stronger.
Finally, CtW complained that T-Mobile in 2015 reduced the amount of money it set aside to cover future defaults on phone installment payment plans at a time when it should have been increasing the allowance. The change boosted T-Mobile’s net income, CtW said.
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“Despite the decrease in allowance for credit losses, all of the publicly available indicators of potential credit risk…implied that if anything, credit risk was increasing rather than declining,” CtW wrote.
In June, the SEC asked T-Mobile to provide more disclosure about its contacts with Syria and Sudan, two countries designated by the U.S. as state sponsors of terrorism, and the company complied. The agency said in a July 6 letter that it was satisfied with the Syria and Sudan disclosures and did not ask about any other of T-Mobile’s accounting or disclosure policies.
