v3.25.4
Business Combinations
 12 Months Ended
Dec. 31, 2025
Business Combination, Asset Acquisition, Transaction between Entities under Common Control, and Joint Venture Formation [Abstract]  
Business Combinations
Note 2 – Business Combinations

Acquisition of Ka’ena 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 Ka’ena Corporation and its subsidiaries, including, among others, Mint Mobile LLC (collectively, “Ka’ena”), 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 “Ka’ena 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 Ka’ena 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 “Ka’ena Acquisition Date”), we completed the Ka’ena Acquisition, and as a result, Ka’ena became a wholly owned subsidiary of T-Mobile. Concurrently, and as agreed upon through the Merger and Unit Purchase Agreement, T-Mobile and Ka’ena entered into certain separate transactions, including the effective settlement of the preexisting wholesale arrangement
between T-Mobile and Ka’ena and agreements with certain of the sellers to provide services to T-Mobile during the post-acquisition period.

Ka’ena is a provider of prepaid mobile services in the U.S. through its primary brands, Mint Mobile and Ultra Mobile, and also offers a selection of wireless devices, including handsets and other mobile communication devices. Prior to the Ka’ena Acquisition, Ka’ena was a wholesale partner of the Company for which we recognized service revenues within Wholesale and other service revenues on our Consolidated Statements of Comprehensive Income, and for which Ka’ena incurred related expenses for the use of our network. On the Ka’ena Acquisition Date, this relationship was effectively terminated, and the Company acquired Ka’ena’s prepaid customer relationships and began to recognize service revenues associated with these customers within Prepaid revenues and operating expenses primarily within Selling, general and administrative expenses on our Consolidated Statements of Comprehensive Income subsequent to the Ka’ena Acquisition Date. The Ka’ena Acquisition enhances the Company’s position as a leading prepaid wireless carrier by diversifying our brand identities, enhancing our distribution footprint and preserving the value of our relationship with Ka’ena through its acquisition, including the acquisition of its prepaid customer relationships.

The financial results of Ka’ena from the Ka’ena Acquisition Date through December 31, 2024, were not material to our Consolidated Statements of Comprehensive Income, nor were they material to our prior period consolidated results on a pro forma basis. Costs for the Ka’ena Acquisition did not have a material impact on our Consolidated Statements of Comprehensive Income.

Consideration Transferred

In accordance with the terms of the Merger and Unit Purchase Agreement, the total purchase price is variable, dependent upon specified performance indicators of Ka’ena, and consists of an upfront payment on the Ka’ena Acquisition Date and an earnout payable in the third quarter of 2026. On June 30, 2025, we amended the Merger and Unit Purchase Agreement to set the calculation of the earnout as the difference between the maximum purchase price of $1.35 billion and the upfront payment, as adjusted, and removed the requirement for Ka’ena to achieve specified performance indicators.

On the Ka’ena Acquisition Date and in satisfaction of the upfront payment, we transferred $420 million in cash and 3,264,952 shares of T-Mobile common stock valued at $536 million as determined based on its closing market price on April 30, 2024, for a total payment fair value of $956 million. An additional amount of the upfront payment payable to certain sellers was deferred and may be paid through the first quarter of 2026. As of the Ka’ena Acquisition Date, we recognized a liability of $27 million for the fair value of this deferred amount, which is included in the fair value of consideration transferred in the Ka’ena Acquisition. Furthermore, a portion of the upfront payment made on the Ka’ena Acquisition Date was for the settlement of the preexisting wholesale relationship with Ka’ena and excluded from the fair value of consideration transferred in the Ka’ena Acquisition. The amount of the upfront payment was subject to customary adjustments and as a result of such adjustments, $17 million of the upfront payment was returned to T-Mobile during the fourth quarter of 2024, which resulted in a commensurate increase in the maximum amount payable in satisfaction of the earnout.

Based on the amount of the adjusted upfront payment, an additional $420 million in future cash and T-Mobile common stock is payable in satisfaction of the earnout.

•$251 million of the earnout amount is payment for the acquired Ka’ena business, and we recognized a liability of $191 million for the fair value of such deferred consideration as of the Ka’ena Acquisition Date. This liability was adjusted to fair value at each reporting date through June 30, 2025, with a corresponding offset recorded to Selling, general and administrative expenses on our Consolidated Statements of Comprehensive Income.
•$169 million of the earnout amount is payment for services to be provided to T-Mobile by certain of the sellers during the post-acquisition period, as well as the replacement of equity awards of certain Ka’ena employees. We recognize expenses as such services are provided during the post-acquisition period within Selling, general and administrative expenses on our Consolidated Statements of Comprehensive Income, with a corresponding offset to Other current liabilities and Other long-term liabilities on our Consolidated Balance Sheets.
The acquisition-date fair value of consideration transferred in the Ka’ena Acquisition is comprised of the following:
(in millions)May 1, 2024
Fair value of T-Mobile common stock issued to Ka’ena stockholders related to the adjusted upfront payment$527 
Fair value of cash paid to Ka’ena stockholders related to the adjusted upfront payment396 
Fair value of deferred earnout consideration191 
Fair value of deferred other consideration27 
Total fair value of consideration exchanged$1,141 

The fair value of the deferred earnout consideration was estimated using the income approach, a probability-weighted discounted cash flow model, whereby a Monte Carlo simulation method estimated the probability of different outcomes. This fair value measurement is based on significant inputs not observable in the market and, therefore, represents a Level 3 measurement as defined in ASC 820. The key assumptions in applying the income approach for the deferred earnout consideration include forecasted Ka’ena financial information, primarily revenue, marketing costs and customer metrics, the probability of achieving the forecasted financial information and the discount rate.

As of December 31, 2025, $242 million of liabilities for deferred earnout consideration and $157 million of liabilities for post-acquisition services were presented within current liabilities on our Consolidated Balance Sheets, and as of December 31, 2024, $202 million of liabilities for deferred consideration and $80 million of liabilities for post-acquisition services were presented within long-term liabilities on our Consolidated Balance Sheets.

Fair Value of Assets Acquired and Liabilities Assumed

We accounted for the Ka’ena Acquisition as a business combination. The identifiable assets acquired and liabilities assumed from Ka’ena were recorded at their fair values as of the Ka’ena Acquisition Date and consolidated with those of T-Mobile. Assigning fair values to the assets acquired and liabilities assumed at the Ka’ena Acquisition Date required the use of judgment regarding estimates and assumptions. For the fair values of the assets acquired and liabilities assumed, we used the cost and income approaches.

The following table summarizes the assigned fair values for each class of assets acquired and liabilities assumed at the Ka’ena Acquisition Date, as adjusted during the measurement period, which closed on April 30, 2025, based on information identified after the Ka’ena Acquisition Date. We retained the services of certified valuation specialists to assist with assigning values to certain acquired assets.
(in millions)May 1, 2024
Cash and cash equivalents$24 
Accounts receivable34 
Inventory3 
Prepaid expenses5 
Other current assets10 
Property and equipment1 
Operating lease right-of-use assets2 
Goodwill777 
Other intangible assets740 
Other assets51 
Total assets acquired1,647 
Accounts payable and accrued liabilities42 
Deferred revenue297 
Short-term operating lease liabilities1 
Deferred tax liabilities83 
Operating lease liabilities2 
Other long-term liabilities81 
Total liabilities assumed506 
Total consideration transferred$1,141 
Intangible Assets

Goodwill was assigned to our Wireless segment and has an assigned value of $777 million, which represents the excess of the consideration transferred over the fair values of assets acquired and liabilities assumed. The assigned goodwill recognized includes expected growth in customers and service revenues to be achieved from the operations of the combined company, the assembled workforce of Ka’ena and intangible assets that do not qualify for separate recognition. Of the total amount of assigned goodwill resulting from the Ka’ena Acquisition of $777 million, the amount deductible for tax purposes is $121 million.

Other intangible assets acquired primarily include $545 million of customer relationships with an estimated weighted-average useful life of six years, $70 million of tradenames with an estimated weighted-average useful life of eight years and $125 million of other intangible assets with an estimated weighted-average useful life of four years. The customer relationships are being amortized using the sum-of-the-years digits method over their estimated useful lives, and the tradenames are being amortized on a straight-line basis over their estimated useful lives.

The fair value of customer relationships was estimated using the income approach. This fair value measurement is based on significant inputs not observable in the market, and, therefore, represents a Level 3 measurement as defined in ASC 820. The key assumptions in applying the income approach include forecasted customer churn rates, revenue over an estimated period of time, the discount rate and estimated income taxes.

Acquisition of UScellular Wireless Business

On May 24, 2024, we entered into a securities purchase agreement with United States Cellular Corporation (“UScellular”), Telephone and Data Systems, Inc., and USCC Wireless Holdings, LLC for the acquisition of substantially all of UScellular’s wireless operations and select AWS, PCS, 600 MHz, 700 MHz and other spectrum assets for an aggregate purchase price of approximately $4.4 billion, payable in cash and the assumption of up to $2.0 billion of debt through exchange offers to certain UScellular debtholders.

On May 23, 2025, we launched exchange offers (the “Exchange Offers”) for any and all of certain outstanding senior notes of UScellular for new notes of T-Mobile with the same interest rate, interest payment dates, maturity dates and redemption terms as each corresponding series of senior notes of UScellular. In conjunction with the Exchange Offers, we also solicited consents for each series of the outstanding senior notes of UScellular to effect a number of amendments to the applicable indenture under which each such series of notes were issued and are governed (the “Consent Solicitations”). The consummation of the Exchange Offers and Consent Solicitations were subject to the closing of the UScellular acquisition, which occurred on August 1, 2025.

On July 22, 2025, we entered into three separate asset purchase agreements for the acquisition of substantially all of the wireless operations assets (together with UScellular’s wireless operations and select spectrum assets, the “UScellular Wireless Business”) of each of Farmers Cellular Telephone Company, Inc., Iowa RSA No. 9 Limited Partnership and Iowa RSA No. 12 Limited Partnership (collectively, the “Iowa Entities”) for an aggregate purchase price of $175 million payable in cash. Prior to our acquisition of the Iowa Entities, UScellular held a minority interest in each of the Iowa Entities.

The UScellular Wireless Business offers a comprehensive range of wireless communications products and services. As a combined company, we expect to increase competition in the telecommunications industry, achieve synergies and enhance our rural 5G coverage with our combined network footprint. Following the closing of the transactions, UScellular and the Iowa Entities will retain ownership of their other spectrum licenses, as well as their towers.

On August 1, 2025, upon the completion of certain customary closing conditions, including the receipt of certain regulatory approvals (the “UScellular Acquisition Date”), we completed the acquisition of the UScellular Wireless Business (the “UScellular Acquisition”), and as a result, the UScellular Wireless Business became wholly owned by T-Mobile. In exchange, on the UScellular Acquisition Date, we transferred cash of $2.8 billion. Additionally, the closing of the UScellular Acquisition obligated us to execute the Exchange Offers. UScellular senior notes with an aggregate outstanding principal balance of $1.7 billion were subsequently exchanged for T-Mobile notes in the Exchange Offers. The obligation to execute the Exchange Offers was recorded as debt assumed in the UScellular Acquisition with an aggregate assigned fair value of $1.7 billion. On the UScellular Acquisition Date, UScellular changed its legal name to Array Digital Infrastructure, Inc.

On August 5, 2025, we issued debt with an aggregate principal balance of $1.7 billion in settlement of the Exchange Offers. The issued debt consisted of 6.700% Senior Notes due 2033 in an aggregate principal amount of $489 million, 6.250% Senior Notes due 2069 in an aggregate principal amount of $393 million, 5.500% Senior Notes due March 2070 in an aggregate
principal amount of $401 million and 5.500% Senior Notes due June 2070 in an aggregate principal amount of $395 million. The notes rank equally with all other unsecured and unsubordinated indebtedness of T-Mobile USA, Inc.

On the UScellular Acquisition Date, we entered into a master license agreement to lease space on at least 2,100 towers being retained by UScellular and extended our tenancy term on approximately 600 additional towers where we are already leasing space from UScellular for 15 years post-closing. In addition, through the master license agreement, we leased space on approximately 1,800 additional UScellular towers on an interim basis for up to 30 months after the UScellular Acquisition Date. As a result of entering into the master license agreement, we recorded right-of use assets and lease liabilities of $1.0 billion each on the UScellular Acquisition Date, with a corresponding increase to both deferred tax liabilities and assets of $261 million. For towers where we were not leasing space prior to the UScellular Acquisition Date, the related balances have been included in the fair value of assets acquired and liabilities assumed.

The financial results of the UScellular Wireless Business from the UScellular Acquisition Date through December 31, 2025, were not material to our Consolidated Statements of Comprehensive Income, nor were they material to our prior period consolidated results on a pro forma basis. Transaction-related costs for the UScellular Acquisition did not have a material impact on our Consolidated Statements of Comprehensive Income.

Consideration Transferred

The acquisition-date fair value of consideration transferred in the UScellular Acquisition is comprised of the following:
(in millions)August 1, 2025
Fair value of cash paid on the UScellular Acquisition Date$2,811 
Fair value of T-Mobile replacement equity awards attributable to pre-combination service44 
Total fair value of consideration exchanged$2,855 

The amount of cash paid on the UScellular Acquisition Date is subject to customary adjustments, which require agreement by the parties.

Fair Value of Assets Acquired and Liabilities Assumed

We have accounted for the UScellular Acquisition as a business combination. The identifiable assets acquired and liabilities assumed of the UScellular Wireless Business were recorded at their provisionally assigned fair values as of the UScellular Acquisition Date and consolidated with those of T-Mobile. Assigning fair values to the assets acquired and liabilities assumed at the UScellular Acquisition Date requires the use of judgment regarding estimates and assumptions. For the provisionally assigned fair values of the assets acquired and liabilities assumed, we used the cost, income and market approaches.
The following table summarizes the provisionally assigned fair values for each class of assets acquired and liabilities assumed at the UScellular Acquisition Date. We retained the services of certified valuation specialists to assist with assigning values to certain acquired assets and liabilities assumed. We are in the process of finalizing the valuation of the assets acquired and liabilities assumed. Therefore, the provisionally assigned fair values set forth below are subject to adjustment as additional information is obtained.
(in millions)August 1, 2025
Cash and cash equivalents$12 
Accounts receivable317 
Equipment installment plan receivables503 
Inventory129 
Prepaid expenses63 
Other current assets33 
Property and equipment1,448 
Operating lease right-of-use assets (1)
1,199 
Goodwill219 
Spectrum licenses1,730 
Other intangible assets397 
Equipment installment plan receivables due after one year388 
Deferred tax assets64 
Other assets125 
Total assets acquired6,627 
Accounts payable and accrued liabilities296 
Deferred revenue275 
Short-term operating lease liabilities (1)
179 
Other current liabilities114 
Long-term debt (2)
1,653 
Operating lease liabilities (1)
1,029 
Other long-term liabilities226 
Total liabilities assumed3,772 
Total consideration transferred$2,855 
(1)Includes $749 million, $51 million and $698 million of Operating lease right-of-use assets, Short-term operating lease liabilities and Operating lease liabilities, respectively, for towers associated with the UScellular master license agreement where we were not leasing tower space prior to the UScellular Acquisition Date.
(2)The obligation to execute the Exchange Offers was recorded as debt assumed in the UScellular Acquisition with an aggregate assigned fair value of $1.7 billion.

Intangible Assets

Goodwill was assigned to our Wireless segment and has a provisionally assigned value of $219 million, which represents the excess of the consideration transferred over the fair values of assets acquired and liabilities assumed. The provisionally assigned goodwill recognized includes synergies expected to be achieved from the operations of the combined company, the assembled workforce of UScellular and intangible assets that do not qualify for separate recognition. Of the total provisionally assigned amount of goodwill resulting from the UScellular Acquisition of $219 million, the preliminary amount deductible for tax purposes is $32 million. Expected synergies from the UScellular Acquisition include the cost savings from the planned integration of network infrastructure, facilities, personnel and systems.

Other intangible assets acquired include $379 million of customer relationships with an estimated weighted-average useful life of ten years and $18 million of tradenames with an estimated weighted-average useful life of one year. The customer relationships are amortized using the sum-of-the-years digits method over their estimated useful lives and the tradenames are amortized on a straight-line basis over their estimated useful lives. The preliminary fair value of customer relationships was estimated using the income approach. This fair value measurement is based on significant inputs not observable in the market, and, therefore, represents a Level 3 measurement as defined in ASC 820. The key assumptions in applying the income approach include revenue over an estimated period of time, the discount rate, forecasted expenses and contributory asset charges.

The preliminary fair value of Spectrum licenses of $1.7 billion was estimated using the market and income approach, specifically a Greenfield model. This fair value measurement is based on significant inputs not observable in the market and, therefore, represents a Level 3 measurement as defined in ASC 820. The key assumptions in applying the income approach
include the discount rate, estimated market share, estimated capital and operating expenditures, forecasted service revenue and a long-term growth rate for a hypothetical market participant that enters the wireless industry and builds a nationwide wireless network.

Acquired Receivables

The fair value of the assets acquired includes Accounts receivable of $317 million and EIP receivables of $891 million. The unpaid principal balance under these contracts as of the UScellular Acquisition Date was $328 million and $1.1 billion, respectively. The difference between the fair value and the unpaid principal balance primarily represents discounting for market interest rates and amounts expected to be uncollectible.

Acquisition of Vistar Media Inc.

On December 20, 2024, we entered into an agreement and plan of merger for the acquisition of 100% of the outstanding capital stock of Vistar, a provider of technology solutions for digital-out-of-home advertisements (the “Vistar Acquisition”).

Upon the completion of certain customary closing conditions, including the receipt of certain regulatory approvals, on February 3, 2025 (the “Vistar Acquisition Date”), we completed the Vistar Acquisition, and as a result, Vistar became a wholly owned subsidiary of T-Mobile. In exchange, we transferred cash of $621 million. A portion of the payment made on the Vistar Acquisition Date was for the settlement of preexisting relationships with Vistar and is excluded from the fair value of consideration transferred.

The financial results of Vistar from the Vistar Acquisition Date through December 31, 2025, were not material to our Consolidated Statements of Comprehensive Income, nor were they material to our prior period consolidated results on a pro forma basis. Costs related to the Vistar Acquisition were not material to our Consolidated Statements of Comprehensive Income.

Fair Value of Assets Acquired and Liabilities Assumed

We have accounted for the Vistar Acquisition as a business combination. The identifiable assets acquired and liabilities assumed from Vistar were recorded at their provisionally assigned fair values as of the Vistar Acquisition Date and consolidated with those of T-Mobile. Assigning fair values to the assets acquired and liabilities assumed at the Vistar Acquisition Date requires the use of judgment regarding estimates and assumptions. For the provisionally assigned fair values of the assets acquired and liabilities assumed, we used the cost and income approaches.

The following table summarizes the provisionally assigned fair values for each class of assets acquired and liabilities assumed at the Vistar Acquisition Date. We are in the process of finalizing the valuation of the assets acquired and liabilities assumed, including income tax-related amounts. Therefore, the provisionally assigned fair values set forth below are subject to adjustment as additional information is obtained.
(in millions)February 3, 2025
Cash and cash equivalents$42 
Accounts receivable157 
Prepaid expense and other current assets2 
Property and equipment1 
Operating lease right-of-use assets1 
Goodwill343 
Other intangible assets264 
Total assets acquired810 
Accounts payable and accrued liabilities129 
Deferred revenue1 
Deferred tax liabilities61 
Operating lease liabilities2 
Total liabilities assumed193 
Total consideration transferred$617 
Intangible Assets

Goodwill was assigned to our Wireless segment and has a provisionally assigned value of $343 million, which represents the excess of the consideration transferred over the fair values of assets acquired and liabilities assumed. The provisionally assigned goodwill recognized includes expected growth in service revenues to be achieved from the operations of the combined company, the assembled workforce of Vistar and intangible assets that do not qualify for separate recognition.

Other intangible assets acquired include $201 million of customer relationships with an estimated weighted-average useful life of ten years, $8 million of tradenames with an estimated weighted-average useful life of four years and $55 million of other intangible assets with an estimated weighted-average useful life of four years. The customer relationships are amortized using the sum-of-the-years digits method over their estimated useful lives and the tradenames are amortized on a straight-line basis over their estimated useful lives.

The preliminary fair value of customer relationships was estimated using the income approach. This fair value measurement is based on significant inputs not observable in the market, and, therefore, represents a Level 3 measurement as defined in ASC 820. The key assumptions in applying the income approach include revenue over an estimated period of time, the discount rate, forecasted expenses and contributory asset charges.

Acquisition of Blis Holdco Limited

On February 18, 2025, we entered into a share purchase agreement for the acquisition of 100% of the outstanding capital stock of Blis, a provider of advertising solutions (the “Blis Acquisition”).

Upon the completion of certain customary closing conditions, including the receipt of certain regulatory approvals, on March 3, 2025 (the “Blis Acquisition Date”), we completed the Blis Acquisition, and as a result, Blis became a wholly owned subsidiary of T-Mobile. In exchange, we transferred cash of $180 million. A portion of the payment made on the Blis Acquisition Date was for the settlement of preexisting relationships with Blis and is excluded from the fair value of consideration transferred.

The financial results of Blis from the Blis Acquisition Date through December 31, 2025, were not material to our Consolidated Statements of Comprehensive Income, nor were they material to our prior period consolidated results on a pro forma basis. Costs related to the Blis Acquisition were not material to our Consolidated Statements of Comprehensive Income.

We have accounted for the Blis Acquisition as a business combination. The fair value of consideration transferred as of the Blis Acquisition Date totaled $174 million. The identifiable assets acquired and liabilities assumed from Blis were recorded at their provisionally assigned fair values as of the Blis Acquisition Date and consolidated with those of T-Mobile. The provisionally assigned fair values of total assets acquired, including goodwill, and total liabilities assumed at the Blis Acquisition Date were $264 million and $90 million, respectively. Goodwill was assigned to our Wireless segment and has a provisionally assigned value of $105 million, which represents the excess of the consideration transferred over the fair values of assets acquired and liabilities assumed. The provisionally assigned goodwill recognized includes expected growth in service revenues to be achieved from the operations of the combined company, the assembled workforce of Blis and intangible assets that do not qualify for separate recognition.

We are in the process of finalizing the valuation of the assets acquired and liabilities assumed. Therefore, the provisionally assigned fair values above are subject to adjustment as additional information is obtained.