v3.20.4
Business Combination (Tables)
 12 Months Ended
Dec. 31, 2020
Business Combinations [Abstract]  
Schedule of Components of Consideration Transferred
The acquisition-date fair value of consideration transferred in the Merger totaled $40.8 billion, comprised of the following:
(in millions)April 1, 2020
Fair value of T-Mobile common stock issued to Sprint stockholders (1)
$31,328 
Fair value of T-Mobile replacement equity awards attributable to pre-combination service (2)
323 
Repayment of Sprint’s debt (including accrued interest and prepayment penalties) (3)
7,396 
Value of contingent consideration (4)
1,882 
Payment received from selling stockholder (5)
(102)
Total consideration exchanged$40,827 

(1) Represents the fair value of T-Mobile common stock issued to Sprint stockholders pursuant to the Business Combination Agreement, less shares surrendered by SoftBank pursuant to the Letter Agreement. The fair value is based on 373,396,310 shares of Sprint common stock issued and outstanding as of March 31, 2020, an exchange ratio of 0.10256 shares of T-Mobile common stock per share of Sprint common stock, less 48,751,557 T-Mobile shares surrendered by SoftBank which are treated as contingent consideration, and the closing price per share of T-Mobile common stock on NASDAQ on March 31, 2020, of $83.90, as shares were transferred to Sprint stockholders prior to the opening of markets on April 1, 2020.
(2) Equity-based awards held by Sprint employees prior to the acquisition date have been replaced with T-Mobile equity-based awards. The portion of the equity-based awards that relates to services performed by the employee prior to the acquisition date is included within consideration transferred, and includes stock options, restricted stock units and performance-based restricted stock units.
(3) Represents the cash consideration paid concurrent with the close of the Merger to retire certain Sprint debt, as required by change in control provisions of the debt, plus interest and prepayment penalties.
(4) Represents the fair value of the SoftBank Specified Shares Amount contingent consideration that may be issued as set forth in the Letter Agreement.
(5) Represents receipt of a cash payment from SoftBank for certain expenses associated with the Merger and is presented in Cash paid for acquisition of companies, net of cash acquired within our Consolidated Statements of Cash Flows.
Schedule of Amounts Recognized as of Acquisition Date
The following table summarizes the estimated fair values for each major class of assets acquired and liabilities assumed at the acquisition date. We retained the services of certified valuation specialists to assist with assigning estimated values to certain acquired assets and assumed liabilities. As of December 31, 2020, the valuation of assets acquired and liabilities assumed is substantially complete except for the finalization of certain aspects of spectrum valuation, the valuation of certain income tax matters and loss contingencies.

(in millions)April 1, 2020
Cash and cash equivalents$2,084 
Accounts receivable1,781 
Equipment installment plan receivables1,088 
Inventory658 
Prepaid expenses140 
Assets held for sale1,908 
Other current assets631 
Property and equipment18,435 
Operating lease right-of-use assets6,583 
Financing lease right-of-use assets291 
Goodwill9,401 
Spectrum licenses45,400 
Other intangible assets6,325 
Equipment installment plan receivables due after one year, net247 
Other assets (1)
540 
Total assets acquired95,512 
Accounts payable and accrued liabilities4,944 
Short-term debt2,760 
Deferred revenue508 
Short-term operating lease liabilities1,818 
Short-term financing lease liabilities8 
Liabilities held for sale475 
Other current liabilities671 
Long-term debt29,037 
Tower obligations950 
Deferred tax liabilities3,513 
Operating lease liabilities5,615 
Financing lease liabilities12 
Other long-term liabilities4,374 
Total liabilities assumed54,685 
Total consideration transferred$40,827 
(1) Included in Other assets acquired is $80 million in restricted cash.
Schedule of Pro Forma Information
The following unaudited pro forma financial information gives effect to the Transactions as if they had been completed on January 1, 2019. The unaudited pro forma information was prepared in accordance with the requirements of ASC 805, which is a different basis than pro forma information prepared under Article 11 of Regulation S-X (“Article 11”). As such, they are not directly comparable with historical results for stand-alone T-Mobile prior to April 1, 2020, historical results for T-Mobile from April 1, 2020 that reflect the Transactions and are inclusive of the results and operations of Sprint, nor our previously provided pro forma financials prepared in accordance with Article 11. The pro forma results for the years ended December 31, 2020 and 2019 include the impact of several adjustments to previously reported operating results. The pro forma adjustments are based on historically reported transactions by the respective companies. The pro forma results do not include any anticipated synergies or other expected benefits of the acquisition.
Year Ended December 31,
(in millions, except per share amounts)20202019
Total revenues$74,681 $70,607 
Income from continuing operations3,302 185 
Income from discontinued operations, net of tax677 1,594 
Net income3,979 1,792