Analysis of Debt
Total Debt (Carrying Amount)
T-Mobile US Inc., balance sheet: debt
US$ in millions
Based on: 10-K (reporting date: 2025-12-31), 10-K (reporting date: 2024-12-31), 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31).
Total debt, encompassing both short-term and long-term obligations including financing lease liabilities, exhibited a generally increasing trend over the five-year period. While a slight decrease was observed between 2021 and 2022, the subsequent years demonstrate consistent growth in overall debt levels.
- Total Debt Trend
- The carrying amount of total debt decreased from US$76,768 million in 2021 to US$74,491 million in 2022, representing a reduction of approximately 2.9%. However, from 2022 through 2025, total debt increased steadily, reaching US$88,552 million. This represents an overall increase of approximately 15.7% from 2022 to 2025.
- Short-Term Debt
- Short-term debt demonstrated volatility. It increased significantly from US$3,378 million in 2021 to US$5,164 million in 2022, before decreasing to US$3,619 million in 2023. A further increase to US$4,068 million occurred in 2024, followed by another rise to US$5,135 million in 2025, exceeding the 2022 peak. The component of short-term debt to affiliates was only reported for 2021, at US$2,245 million.
- Long-Term Debt
- Long-term debt remained the dominant portion of the company’s debt structure. It decreased slightly from US$67,076 million in 2021 to US$65,301 million in 2022, then increased consistently through 2025, reaching US$79,649 million. Long-term debt to affiliates remained relatively stable across the period, increasing incrementally each year from US$1,494 million in 2021 to US$1,498 million in 2025.
- Financing Lease Liabilities
- Both short-term and long-term financing lease liabilities exhibited a decreasing trend. Short-term financing lease liabilities decreased modestly from US$1,120 million in 2021 to US$1,163 million in 2025. Long-term financing lease liabilities decreased more substantially, from US$1,455 million in 2021 to US$1,107 million in 2025. These declines suggest a potential shift in financing strategies related to lease arrangements.
The consistent growth in total debt from 2022 onward, coupled with the decreasing trend in financing lease liabilities, suggests the company may be relying more on traditional debt instruments to fund its operations and investments. The volatility in short-term debt warrants further investigation to understand the underlying drivers of these fluctuations.
Total Debt (Fair Value)
| Dec 31, 2025 | |
|---|---|
| Selected Financial Data (US$ in millions) | |
| Senior Notes to third parties | 70,517) |
| Senior Notes to third parties, EUR-denominated | 5,460) |
| Senior Notes to affiliates | 1,500) |
| Senior Secured Notes to third parties | 835) |
| ABS Notes to third parties | 2,017) |
| ECA Facilities to third parties | 1,876) |
| Other debt | —) |
| Financing lease liabilities | 2,270) |
| Total short-term and long-term debt, including financing lease liabilities (fair value) | 84,475) |
| Financial Ratio | |
| Debt, fair value to carrying amount ratio | 0.95 |
Based on: 10-K (reporting date: 2025-12-31).
Weighted-average Interest Rate on Debt
Weighted-average effective interest rate on debt and financing lease liabilities: 4.22%
| Interest rate | Debt amount1 | Interest rate × Debt amount | Weighted-average interest rate2 |
|---|---|---|---|
| 4.20% | 83,000) | 3,486) | |
| 5.00% | 2,270) | 114) | |
| Total | 85,270) | 3,600) | |
| 4.22% | |||
Based on: 10-K (reporting date: 2025-12-31).
1 US$ in millions
2 Weighted-average interest rate = 100 × 3,600 ÷ 85,270 = 4.22%
Interest Costs Incurred
T-Mobile US Inc., interest costs incurred
US$ in millions
Based on: 10-K (reporting date: 2025-12-31), 10-K (reporting date: 2024-12-31), 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31).
Interest expense, net, remained relatively stable between 2021 and 2023, fluctuating around the US$3.3 billion mark. A noticeable increase is observed in 2024 and 2025, reaching US$3.774 billion. Capitalized interest decreased significantly from 2021 to 2022, then exhibited some volatility, increasing slightly in 2023 and 2025, but remaining substantially lower than the 2021 level. Interest costs incurred generally mirrored the trend of net interest expense, with a similar increase in the later years of the period.
- Net Interest Expense
- Net interest expense experienced minimal change from US$3,342 million in 2021 to US$3,335 million in 2023. A rise to US$3,411 million in 2024 is followed by a more substantial increase to US$3,774 million in 2025, indicating a growing cost of borrowing over the latter part of the analyzed period.
- Capitalized Interest
- Capitalized interest declined sharply from US$210 million in 2021 to US$61 million in 2022. It then increased to US$104 million in 2023, decreased to US$34 million in 2024, and rose again to US$43 million in 2025. This suggests fluctuations in projects under development that qualify for interest capitalization.
- Total Interest Costs Incurred
- Total interest costs incurred decreased from US$3,552 million in 2021 to US$3,425 million in 2022. The subsequent years show a slight increase, reaching US$3,439 million in 2023 and US$3,445 million in 2024. A more pronounced increase is evident in 2025, with total costs reaching US$3,817 million, aligning with the trend observed in net interest expense.
The increasing trend in both net interest expense and total interest costs incurred from 2024 to 2025 warrants further investigation. This could be due to increased debt levels, rising interest rates, or a combination of both. The relatively small and fluctuating amount of capitalized interest suggests that significant capital projects are not consistently driving interest expense.
Adjusted Interest Coverage Ratio
Based on: 10-K (reporting date: 2025-12-31), 10-K (reporting date: 2024-12-31), 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31).
2025 Calculations
1 Interest coverage ratio (without capitalized interest) = EBIT ÷ Interest expense, net
= 18,055 ÷ 3,774 = 4.78
2 Adjusted interest coverage ratio (with capitalized interest) = EBIT ÷ Interest costs incurred
= 18,055 ÷ 3,817 = 4.73
The interest coverage ratios demonstrate a notable improvement over the observed period. Initially, the ratios are relatively low, but exhibit a clear upward trajectory before stabilizing. This suggests a strengthening ability to meet interest obligations from earnings.
- Interest Coverage Ratio (without capitalized interest)
- The interest coverage ratio, excluding capitalized interest, begins at 2.00 in 2021 and declines slightly to 1.94 in 2022. A substantial increase is then observed, rising to 4.30 in 2023 and further to 5.31 in 2024. The ratio experiences a modest decrease in 2025, settling at 4.78. This pattern indicates an initial period of limited coverage, followed by significant improvement and subsequent stabilization at a healthy level.
- Adjusted Interest Coverage Ratio (with capitalized interest)
- The adjusted interest coverage ratio, incorporating capitalized interest, mirrors the trend of the unadjusted ratio. Starting at 1.88 in 2021, it increases to 1.90 in 2022. Similar to the other ratio, a marked improvement occurs in 2023, reaching 4.17, and continues to 5.26 in 2024. The ratio concludes the period at 4.73 in 2025, demonstrating a slight decline from the prior year but remaining at a considerably improved level compared to the earlier years. The inclusion of capitalized interest results in consistently lower values than the ratio excluding it, as expected.
- Comparative Analysis
- The difference between the two ratios remains relatively consistent throughout the period, reflecting the stable nature of capitalized interest. Both ratios demonstrate a similar pattern of improvement, suggesting that changes in earnings are the primary driver of the observed trends, rather than fluctuations in capitalized interest. The increase from 2022 to 2023 is particularly significant for both metrics, indicating a substantial positive shift in the company’s ability to cover its interest expense.