AP NEWS
Press release content from Business Wire. The AP news staff was not involved in its creation.
PRESS RELEASE: Paid content from Business Wire
Press release content from Business Wire. The AP news staff was not involved in its creation.

T-Mobile Reports Record Financials and Strong Customer Growth in FY 2019, Beating Increased Guidance while Balancing Growth and Profitability

February 6, 2020 GMT

BELLEVUE, Wash.--(BUSINESS WIRE)--Feb 6, 2020--

T-Mobile US, Inc. (NASDAQ: TMUS):

Record Financial Performance ( all percentages year-over-year )

Strong Customer Growth

First Nationwide 5G Network

Strong Standalone Outlook for 2020

____________________________________________

(1)

Adjusted EBITDA and Free Cash Flow are non-GAAP financial measures. These non-GAAP financial measures should be considered in addition to, but not as a substitute for, the information provided in accordance with GAAP. Reconciliations for these non-GAAP financial measures to the most directly comparable financial measures are provided in the Reconciliation of Non-GAAP Financial Measures to GAAP Financial Measures tables.

(2)

We are not able to forecast Net income on a forward-looking basis without unreasonable efforts due to the high variability and difficulty in predicting certain items that affect GAAP Net income including, but not limited to, Income tax expense, stock-based compensation expense and Interest expense. Adjusted EBITDA should not be used to predict Net income as the difference between the two measures is variable.

T-Mobile US, Inc. (NASDAQ: TMUS) once again delivered incredible results in the fourth quarter of 2019, reporting strong net customer additions including 1.9 million total net customer additions, the 27th quarter in a row with more than 1 million total net customer additions. Our 1.0 million branded postpaid phone net customer additions led the industry once again. For full-year 2019, T-Mobile had 7.0 million total net customer additions, including 4.5 million branded postpaid net customer additions - beating its increased customer guidance range of 4.1 to 4.3 million for the full-year 2019. In addition, we reported all-time record-high financial results, including service and total revenues, as well as record Q4 Adjusted EBITDA. These results concluded another record-breaking year for the Un-carrier, in which we delivered strong customer growth and record financial results for the full-year 2019 - once again beating our full-year guidance.

In December 2019, T-Mobile launched America’s first nationwide 5G network, including prepaid 5G with Metro by T-Mobile, covering more than 200 million people and more than 5,000 cities and towns across the United States with 5G. In addition, we introduced two new 600 MHz 5G capable superphones, the exclusive OnePlus 7T Pro 5G McLaren and the Samsung Galaxy Note 10+ 5G and anticipate offering an industry-leading smartphone portfolio built to work on nationwide 5G in 2020. This 5G network is the foundational layer of 5G coverage and it’s just the beginning! With the New T-Mobile, we will be able to combine this foundational layer of 5G with Sprint’s 2.5 GHz mid-band spectrum, resulting in a broad and deep nationwide 5G experience for everyone, everywhere. And, T-Mobile continues to invest in building its nationwide 4G LTE network, which now covers 327 million Americans, and continues to rapidly deploy its 600 MHz spectrum, which now covers 248 million people, and is live in nearly 8,900 cities and towns across 49 states and Puerto Rico.

“T-Mobile continues to deliver incredible results quarter after quarter! In Q4 we set new financial records across the board and recorded our 27th consecutive quarter with over 1 million total net customer additions,” said John Legere, CEO of T-Mobile. “We achieved these spectacular results all while launching the first and only nationwide 5G network, announcing Un-carrier 1.0 for New T-Mobile, and delivering a compelling and fact-based argument in court to support our pending merger. Our results continue to show that the Un-carrier strategy works, and it delivers for both customers and shareholders. I couldn’t be more confident and excited about our future and We Won’t Stop!”

Strong Customer Growth

T-Mobile continues to deliver strong customer growth, and in Q4 2019 set a record of 27 consecutive quarters of more than 1 million total net customer additions. We once again led the industry in branded postpaid phone net customer additions.

 

Quarter

 

Year Ended December 31,

(in thousands, except churn)

Q4 2019

 

Q3 2019

 

Q4 2018

 

2019

 

2018

Total net customer additions

1,863

 

 

1,747

 

 

2,402

 

 

7,011

 

 

7,044

 

Branded postpaid net customer additions

1,314

 

 

1,074

 

 

1,358

 

 

4,515

 

 

4,459

 

Branded postpaid phone net customer additions

1,001

 

 

754

 

 

1,020

 

 

3,121

 

 

3,097

 

Branded postpaid other customer additions

313

 

 

320

 

 

338

 

 

1,394

 

 

1,362

 

Branded prepaid net customer additions

77

 

 

62

 

 

135

 

 

339

 

 

460

 

Total customers, end of period

86,046

 

 

84,183

 

 

79,651

 

 

86,046

 

 

79,651

 

Branded postpaid phone churn

1.01

%

 

0.89

%

 

0.99

%

 

0.89

%

 

1.01

%

Branded prepaid churn

3.97

%

 

3.98

%

 

3.99

%

 

3.82

%

 

3.96

%

Record Financial Performance

T-Mobile’s strong financial performance in Q4 2019 and full-year 2019 proves that our strategy is not only good for customers, it’s also good for stockholders. We continue to successfully translate customer growth into industry-leading service revenue growth.

(in millions, except EPS)

Quarter

 

Year Ended

December 31,

 

Q4 2019

vs.

Q3 2019

 

Q4 2019

vs.

Q4 2018

 

YTD 2019

vs.

YTD 2018

Q4 2019

 

Q3 2019

 

Q4 2018

2019

 

2018

 

 

Total service revenues

$

8,708

 

 

$

8,583

 

 

$

8,189

 

 

$

33,994

 

 

$

31,992

 

 

1.5

%

 

6.3

%

 

6.3

%

Total revenues

11,878

 

 

11,061

 

 

11,445

 

 

44,998

 

 

43,310

 

 

7.4

%

 

3.8

%

 

3.9

%

Net income

751

 

 

870

 

 

640

 

 

3,468

 

 

2,888

 

 

(13.7

)%

 

17.3

%

 

20.1

%

EPS

0.87

 

 

1.01

 

 

0.75

 

 

4.02

 

 

3.36

 

 

(13.9

)%

 

16.0

%

 

19.6

%

Adjusted EBITDA (1)

3,242

 

 

3,396

 

 

2,970

 

 

13,383

 

 

12,398

 

 

(4.5

)%

 

9.2

%

 

7.9

%

Net cash provided by operating activities

1,537

 

 

1,748

 

 

954

 

 

6,824

 

 

3,899

 

 

(12.1

)%

 

61.1

%

 

75.0

%

Cash purchases of property and equipment, including capitalized interest

1,157

 

 

1,514

 

 

1,184

 

 

6,391

 

 

5,541

 

 

(23.6

)%

 

(2.3

)%

 

15.3

%

Free Cash Flow (1)

1,398

 

 

1,134

 

 

1,220

 

 

4,319

 

 

3,552

 

 

23.3

%

 

14.6

%

 

21.6

%

(1)

Adjusted EBITDA and Free Cash Flow are non-GAAP financial measures. These non-GAAP financial measures should be considered in addition to, but not as a substitute for, the information provided in accordance with GAAP. Reconciliations for these non-GAAP financial measures to the most directly comparable financial measures are provided in the Reconciliation of Non-GAAP Financial Measures to GAAP Financial Measures tables.

The following discussion is for the three months and year ended December 31, 2019, compared to the same periods in 2018 unless otherwise stated.

First Nationwide 5G Network

T-Mobile continues to expand the footprint and improve the quality of its network to better serve its customers. 327 million Americans are covered by our 4G LTE network, and our rapid deployment of 600 MHz spectrum provides customers with even better coverage and supports the launch of our nationwide 5G network. Highlights from Q4 2019 include:

Strong Standalone Outlook for 2020

The following represents T-Mobile standalone guidance.

We expect postpaid net customer additions between 2.6 and 3.6 million in 2020.

Net income is not available on a forward-looking basis.

Adjusted EBITDA is expected to be in the range of $13.7 to $14.0 billion in 2020. Our Adjusted EBITDA target includes leasing revenues of $450 to $550 million and takes into account our network expansion, including the continued deployment of our 600 MHz spectrum and 5G network.

Cash purchases of property and equipment, including capitalized interest of approximately $400 million, are expected to be between $5.9 and $6.2 billion for full-year 2020. Cash purchases of property and equipment, excluding capitalized interest, are expected to be between $5.5 and $5.8 billion. We expect that cash purchases of property and equipment will be heavily weighted to early in the year, similar to 2019.

In Q1 2020, pre-close merger-related costs are expected to be $200 to $300 million before taxes.

Net cash provided by operating activities, excluding payments for merger-related costs and any settlement of interest rate swaps, is expected to be in the range of $7.9 to $8.5 billion.

Free Cash Flow, excluding payments for merger-related costs and any settlement of interest rate swaps, is expected to be in the range of $5.4 to $5.8 billion. We expect a similar seasonal development of Free Cash Flow in 2020 as in 2019 with a lower Free Cash Flow in the first quarter, ramping in later quarters, based on expected timing for cash purchases of property and equipment.

Financial Results

For more details on T-Mobile’s Q4 2019 financial results, including the Investor Factbook with detailed financial tables and reconciliations of certain historical non-GAAP measures disclosed in this release to the most comparable measures under GAAP, please visit T-Mobile US, Inc.’s Investor Relations website at http://investor.t-mobile.com.

T-Mobile Social Media

Investors and others should note that we announce material financial and operational information to our investors using our investor relations website, press releases, SEC filings and public conference calls and webcasts. We intend to also use certain social media accounts as means of disclosing information about us and our services and for complying with our disclosure obligations under Regulation FD (the @TMobileIR Twitter account ( https://twitter.com/TMobileIR ) and through April 30, 2020, the @JohnLegere Twitter ( https://twitter.com/JohnLegere ), Facebook and Periscope accounts, which Mr. Legere also uses as means for personal communications and observations, and on and after May 1, 2020 the @SievertMike Twitter ( https://twitter.com/SievertMike ) account, which Mr. Sievert also uses as a means for personal communications and observations). The information we post through these social media channels may be deemed material. Accordingly, investors should monitor these social media channels in addition to following our press releases, SEC filings and public conference calls and webcasts. The social media channels that we intend to use as a means of disclosing the information described above may be updated from time to time as listed on our investor relations website.

About T-Mobile US, Inc.

As America’s Un-carrier, T-Mobile US, Inc. (NASDAQ: TMUS) is redefining the way consumers and businesses buy wireless services through leading product and service innovation. Our nationwide 5G and advanced 4G LTE network delivers outstanding wireless experiences to 86.0 million customers who are unwilling to compromise on quality and value. Based in Bellevue, Washington, T-Mobile US provides services through its subsidiaries and operates its flagship brands, T-Mobile and Metro by T-Mobile. For more information, please visit http://www.t-mobile.com or join the conversation on Twitter using $TMUS.

Q4 2019 Earnings Call, Livestream and Webcast Access Information

Access via Phone (audio only):

Date:

Thursday, February 6, 2020

Time:

4:30 p.m. (ET)

US/Canada:

866-575-6534

International:

+1 323-794-2094

Participant Passcode:

5259088

Please plan on accessing the earnings call ten minutes prior to the scheduled start time.

Access via Social Media:

The @TMobileIR Twitter account will live-tweet the earnings call.

Submit Questions via Twitter:

Twitter:

Send a tweet to @TMobileIR or @JohnLegere using $TMUS

Access via Webcast:

The earnings call will be broadcast live via our Investor Relations website at http://investor.t-mobile.com. A replay of the earnings call will be available for two weeks starting shortly after the call concludes and can be accessed by dialing 888-203-1112 (toll free) or +1 719-457-0820 (international). The passcode required to listen to the replay is 5259088.

To automatically receive T-Mobile financial news by e-mail, please visit the T-Mobile Investor Relations website, http://investor.t-mobile.com, and subscribe to E-mail Alerts.

Forward-Looking Statements

This communication includes forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. All statements other than statements of historical fact, including information concerning T-Mobile US, Inc.’s future results of operations, are forward-looking statements. These forward-looking statements are generally identified by the words “anticipate”, “believe”, “estimate”, “expect”, “intend”, “may”, “could” or similar expressions. Forward-looking statements are based on current expectations and assumptions, which are subject to risks and uncertainties and may cause actual results to differ materially from the forward-looking statements. Important factors that could affect future results and cause those results to differ materially from those expressed in the forward-looking statements include, among others, the following: the failure to obtain, or delays in obtaining, regulatory approval for the merger (the “Merger”) with Sprint Corporation (“Sprint”), pursuant to the Business Combination Agreement with Sprint and other parties therein (as amended, the “Business Combination Agreement”) and the other transactions contemplated by the Business Combination Agreement (collectively, the “Transactions”), risks associated with the actions and conditions we have agreed to in connection with regulatory approval for the Transactions, and the risk that such regulatory approval may result in the imposition of additional conditions that, if accepted by the parties, could adversely affect the combined company or the expected benefits of the Transactions, or the failure to satisfy any of the other conditions to the Transactions on a timely basis or at all; the risk that the antitrust litigation related to the Transactions brought by the attorneys general of certain states and the District of Columbia will result in an order preventing the completion of the Transactions and the risk of other litigation or regulatory or regulatory actions related to the Transactions; the exercise by one or both parties of a right to terminate the Business Combination Agreement; adverse effects on the market price of our common stock or on our operating results because of a failure to complete the Merger in the anticipated time frame, on the anticipated terms or at all; inability to obtain the financing contemplated to be obtained in connection with the Transactions on the expected terms or timing or at all; the ability of us, Sprint and the combined company to make payments on debt or to repay existing or future indebtedness when due or to comply with the covenants contained therein; adverse changes in the ratings of our or Sprint’s debt securities or adverse conditions in the credit markets; negative effects of the announcement, pendency or consummation of the Transactions on the market price of our common stock and on our or Sprint’s operating results, including as a result of changes in key customer, supplier, employee or other business relationships; the assumption of significant liabilities in connection with, and significant costs related to the Transactions, including financing costs and unknown liabilities of Sprint that may become liabilities of the combined company or that may otherwise arise and financing costs; failure to realize the expected benefits and synergies of the Transactions in the expected time frames, in part or at all; costs or difficulties related to the integration of Sprint’s network and operations into our network and operations, including intellectual property and communications systems, administrative and information technology infrastructure and accounting, financial reporting and internal control systems; differences with Sprint’s control environments, cultures, and auditor expectations may result in future material weaknesses, significant deficiencies, and/or control deficiencies while we work to integrate the companies and align guidelines and practices; costs or difficulties related to the completion of the divestiture of Sprint’s prepaid wireless businesses to DISH Network Corporation and the satisfaction of any related government commitments to such divestiture; the inability of us, Sprint or the combined company to retain and hire key personnel; the risk that certain contractual restrictions contained in the Business Combination Agreement during the pendency of the Transactions could adversely affect our or Sprint’s ability to pursue business opportunities or strategic transactions; adverse economic, political or market conditions in the U.S. and international markets; competition, industry consolidation, and changes in the market for wireless services, which could negatively affect our ability to attract and retain customers; the effects of any future merger, investment, or acquisition involving us, as well as the effects of mergers, investments, or acquisitions in the technology, media and telecommunications industry; challenges in implementing our business strategies or funding our operations, including payment for additional spectrum or network upgrades; the possibility that we may be unable to renew our spectrum licenses on attractive terms or acquire new spectrum licenses at reasonable costs and terms; difficulties in managing growth in wireless data services, including network quality; material changes in available technology and the effects of such changes, including product substitutions and deployment costs and performance; the timing, scope and financial impact of our deployment of advanced network and business technologies; the impact on our networks and business from major technology equipment failures; inability to implement and maintain effective cyber security measures over critical business systems; breaches of our and/or our third-party vendors’ networks, information technology and data security, resulting in unauthorized access to customer confidential information; natural disasters, terrorist attacks or similar incidents; unfavorable outcomes of existing or future litigation; any changes in the regulatory environments in which we operate, including any increase in restrictions on the ability to operate our networks and changes in data privacy laws; any disruption or failure of our third parties’ or key suppliers’ provisioning of products or services; material adverse changes in labor matters, including labor campaigns, negotiations or additional organizing activity, and any resulting financial, operational and/or reputational impact; changes in accounting assumptions that regulatory agencies, including the Securities and Exchange Commission (“SEC”), may require, which could result in an impact on earnings; changes in tax laws, regulations and existing standards and the resolution of disputes with any taxing jurisdictions; the possibility that the reset process under our trademark license results in changes to the royalty rates for our trademarks; the possibility that we may be unable to adequately protect our intellectual property rights or be accused of infringing the intellectual property rights of others; our business, investor confidence in our financial results and stock price may be adversely affected if our internal controls are not effective; the occurrence of high fraud rates related to device financing, credit cards, dealers, or subscriptions; and interests of our majority stockholder may differ from the interests of other stockholders. Given these risks and uncertainties, readers are cautioned not to place undue reliance on such forward-looking statements. We undertake no obligation to revise or publicly release the results of any revision to these forward-looking statements, except as required by law.

Important Additional Information

In connection with the Transactions, T-Mobile US, Inc. (“T-Mobile”) has filed a registration statement on Form S-4 (File No. 333-226435), which contains a joint consent solicitation statement of T-Mobile and Sprint Corporation (“Sprint”), that also constitutes a prospectus of T-Mobile (the “joint consent solicitation statement/prospectus”), and each party will file other documents regarding the Transactions with the SEC. The registration statement on Form S-4 was declared effective by the SEC on October 29, 2018, and T-Mobile and Sprint commenced mailing the joint consent solicitation statement/prospectus to their respective stockholders on October 29, 2018. INVESTORS AND SECURITY HOLDERS ARE URGED TO READ THE JOINT CONSENT SOLICITATION STATEMENT/PROSPECTUS AND OTHER RELEVANT DOCUMENTS FILED WITH THE SEC WHEN THEY BECOME AVAILABLE BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION. Investors and security holders may obtain these documents free of charge from the SEC’s website or from T-Mobile or Sprint. The documents filed by T-Mobile may be obtained free of charge at T-Mobile’s website, at www.t-mobile.com, or at the SEC’s website, at www.sec.gov, or from T-Mobile by requesting them by mail at T-Mobile US, Inc., Investor Relations, 1 Park Avenue, 14th Floor, New York, NY 10016, or by telephone at 212-358-3210. The documents filed by Sprint may be obtained free of charge at Sprint’s website, at www.sprint.com, or at the SEC’s website, at www.sec.gov, or from Sprint by requesting them by mail at Sprint Corporation, Shareholder Relations, 6200 Sprint Parkway, Mailstop KSOPHF0302-3B679, Overland Park, Kansas 66251, or by telephone at 913-794-1091.

No Offer or Solicitation

This communication shall not constitute an offer to sell or the solicitation of an offer to buy any securities, nor shall there be any sale of securities in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such jurisdiction. No offering of securities shall be made except by means of a prospectus meeting the requirements of Section 10 of the U.S. Securities Act of 1933, as amended.

T-Mobile US, Inc.
Reconciliation of Non-GAAP Financial Measures to GAAP Financial Measures
(Unaudited)

This Press Release includes non-GAAP financial measures. The non-GAAP financial measures should be considered in addition to, but not as a substitute for, the information provided in accordance with GAAP. Reconciliations for the non-GAAP financial measures to the most directly comparable GAAP financial measures are provided below. T-Mobile is not able to forecast Net income on a forward-looking basis without unreasonable efforts due to the high variability and difficulty in predicting certain items that affect GAAP net income including, but not limited to, Income tax expense, stock-based compensation expense and Interest expense. Adjusted EBITDA should not be used to predict Net income as the difference between the two measures is variable.

Adjusted EBITDA is reconciled to Net income as follows:

 

Quarter

 

Year Ended

December 31,

(in millions)

Q1 2018

 

Q2 2018

 

Q3 2018

 

Q4 2018

 

Q1 2019

 

Q2 2019

 

Q3 2019

 

Q4 2019

 

2018

 

2019

Net income

$

671

 

 

$

782

 

 

$

795

 

 

$

640

 

 

$

908

 

 

$

939

 

 

$

870

 

 

$

751

 

 

$

2,888

 

 

$

3,468

 

Adjustments:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest expense

251

 

 

196

 

 

194

 

 

194

 

 

179

 

 

182

 

 

184

 

 

182

 

 

835

 

 

727

 

Interest expense to affiliates

166

 

 

128

 

 

124

 

 

104

 

 

109

 

 

101

 

 

100

 

 

98

 

 

522

 

 

408

 

Interest income

(6

)

 

(6

)

 

(5

)

 

(2

)

 

(8

)

 

(4

)

 

(5

)

 

(7

)

 

(19

)

 

(24

)

Other (income) expense, net

(10

)

 

64

 

 

(3

)

 

3

 

 

(7

)

 

22

 

 

(3

)

 

(4

)

 

54

 

 

8

 

Income tax expense

210

 

 

286

 

 

335

 

 

198

 

 

295

 

 

301

 

 

325

 

 

214

 

 

1,029

 

 

1,135

 

Operating income

1,282

 

 

1,450

 

 

1,440

 

 

1,137

 

 

1,476

 

 

1,541

 

 

1,471

 

 

1,234

 

 

5,309

 

 

5,722

 

Depreciation and amortization

1,575

 

 

1,634

 

 

1,637

 

 

1,640

 

 

1,600

 

 

1,585

 

 

1,655

 

 

1,776

 

 

6,486

 

 

6,616

 

Stock-based compensation (1)

96

 

 

106

 

 

102

 

 

85

 

 

93

 

 

111

 

 

108

 

 

111

 

 

389

 

 

423

 

Merger-related costs

 

 

41

 

 

53

 

 

102

 

 

113

 

 

222

 

 

159

 

 

126

 

 

196

 

 

620

 

Other, net (2)

3

 

 

2

 

 

7

 

 

6

 

 

2

 

 

2

 

 

3

 

 

(5

)

 

18

 

 

2

 

Adjusted EBITDA

$

2,956

 

 

$

3,233

 

 

$

3,239

 

 

$

2,970

 

 

$

3,284

 

 

$

3,461

 

 

$

3,396

 

 

$

3,242

 

 

$

12,398

 

 

$

13,383

 

(1)

Stock-based compensation includes payroll tax impacts and may not agree to stock-based compensation expense in the consolidated financial statements. Additionally, certain stock-based compensation expenses associated with the Transactions have been included in Merger-related costs.

(2)

Other, net may not agree to the Consolidated Statements of Comprehensive Income, primarily due to certain non-routine operating activities, such as other special items that would not be expected to reoccur or are not reflective of T-Mobile’s ongoing operating performance, and are therefore excluded in Adjusted EBITDA.

Adjusted EBITDA - Earnings before Interest expense, net of Interest income, Income tax expense, Depreciation and amortization expense, non-cash Stock-based compensation and certain expenses not reflective of T-Mobile’s ongoing operating performance, such as merger-related costs. Adjusted EBITDA is a non-GAAP financial measure utilized by T-Mobile’s management to monitor the financial performance of our operations. T-Mobile uses Adjusted EBITDA internally as a measure to evaluate and compensate its personnel and management for their performance, and as a benchmark to evaluate T-Mobile’s operating performance in comparison to its competitors. Management believes analysts and investors use Adjusted EBITDA as a supplemental measure to evaluate overall operating performance and facilitate comparisons with other wireless communications companies because it is indicative of T-Mobile’s ongoing operating performance and trends by excluding the impact of Interest expense from financing, non-cash depreciation and amortization from capital investments, non-cash stock-based compensation, network decommissioning costs and costs related to the Transactions, as they are not indicative of T-Mobile’s ongoing operating performance, as well as certain other nonrecurring income and expenses. Adjusted EBITDA has limitations as an analytical tool and should not be considered in isolation or as a substitute for income from operations, Net income or any other measure of financial performance reported in accordance with U.S. Generally Accepted Accounting Principles (“GAAP”).

Net debt (excluding tower obligations) (1) to last twelve months net income and Adjusted EBITDA ratios are calculated as follows:

(in millions, except net debt ratios)

Mar 31,
2018

 

 

Jun 30,
2018

 

 

Sep 30,
2018

 

Dec 31,
2018

 

Mar 31,
2019

 

Jun 30,
2019

 

Sep 30,
2019

 

Dec 31,
2019

Short-term debt

$

3,320

 

 

$

1,004

 

 

$

783

 

 

$

841

 

 

$

250

 

 

$

300

 

 

$

475

 

 

$

25

 

Short-term debt to affiliates

445

 

 

320

 

 

 

 

 

 

598

 

 

 

 

 

 

 

Short-term financing lease liabilities (1)

 

 

 

 

 

 

 

 

911

 

 

963

 

 

1,013

 

 

957

 

Long-term debt

12,127

 

 

12,065

 

 

11,993

 

 

12,124

 

 

10,952

 

 

10,954

 

 

10,956

 

 

10,958

 

Long-term debt to affiliates

14,586

 

 

14,581

 

 

14,581

 

 

14,582

 

 

13,985

 

 

13,985

 

 

13,986

 

 

13,986

 

Financing lease liabilities (1)

 

 

 

 

 

 

 

 

1,224

 

 

1,314

 

 

1,440

 

 

1,346

 

Less: Cash and cash equivalents

(2,527

)

 

(215

)

 

(329

)

 

(1,203

)

 

(1,439

)

 

(1,105

)

 

(1,653

)

 

(1,528

)

Net debt (excluding tower obligations)

$

27,951

 

 

$

27,755

 

 

$

27,028

 

 

$

26,344

 

 

$

26,481

 

 

$

26,411

 

 

$

26,217

 

 

$

25,744

 

Divided by: Last twelve months Net income

$

4,509

 

 

$

4,710

 

 

$

4,955

 

 

$

2,888

 

 

$

3,125

 

 

$

3,282

 

 

$

3,357

 

 

$

3,468

 

Net debt (excluding tower obligations) to last twelve months Net income Ratio

6.2

 

 

5.9

 

 

5.5

 

 

9.1

 

 

8.5

 

 

8.0

 

 

7.8

 

 

7.4

 

Divided by: Last twelve months Adjusted EBITDA

$

11,501

 

 

$

11,722

 

 

$

12,139

 

 

$

12,398

 

 

$

12,726

 

 

$

12,954

 

 

$

13,111

 

 

$

13,383

 

Net debt (excluding tower obligations) to last twelve months Adjusted EBITDA Ratio

2.4

 

 

2.4

 

 

2.2

 

 

2.1

 

 

2.1

 

 

2.0

 

 

2.0

 

 

1.9

 

Net debt is defined as Short-term debt, Short-term debt to affiliates, Short-term financing lease liabilities, Long-term debt (excluding tower obligations), Long-term debt to affiliates, and Financing lease liabilities less Cash and cash equivalents.

(1)

In Q1 2019, the adoption of the new lease accounting standard resulted in a reclassification of capital lease liabilities previously included in Short-term debt and Long-term debt to Short-term financing lease liabilities and Financing lease liabilities in our Consolidated Balance Sheet. In Q1 2019, we redefined Net debt (excluding Tower obligations) to reflect the above changes in classification and present Net debt (excluding tower obligations) on a consistent basis for investor transparency. The effects of this change are applied prospectively, consistent with the adoption of the standard. See Note 1 – Summary of Significant Accounting Policies in our Annual Report on Form 10-K for the year ended December 31, 2019, for additional details.

Free Cash Flow is calculated as follows:

 

Quarter

 

Year Ended

December 31,

(in millions)

Q1 2018

 

Q2 2018

 

Q3 2018

 

Q4 2018

 

Q1 2019

 

Q2 2019

 

Q3 2019

 

Q4 2019

 

2018

 

2019

Net cash provided by operating activities

$

770

 

 

$

1,261

 

 

$

914

 

 

$

954

 

 

$

1,392

 

 

$

2,147

 

 

$

1,748

 

 

$

1,537

 

 

$

3,899

 

 

$

6,824

 

Cash purchases of property and equipment

(1,366

)

 

(1,629

)

 

(1,362

)

 

(1,184

)

 

(1,931

)

 

(1,789

)

 

(1,514

)

 

(1,157

)

 

(5,541

)

 

(6,391

)

Proceeds related to beneficial interests in securitization transactions

1,295

 

 

1,323

 

 

1,338

 

 

1,450

 

 

1,157

 

 

839

 

 

900

 

 

980

 

 

5,406

 

 

3,876

 

Proceeds from sales of tower sites

 

 

 

 

 

 

 

 

 

 

 

 

 

 

38

 

 

 

 

38

 

Cash payments for debt prepayment or debt extinguishment costs

(31

)

 

(181

)

 

 

 

 

 

 

 

(28

)

 

 

 

 

 

(212

)

 

(28

)

Free Cash Flow

668

 

 

774

 

 

890

 

 

1,220

 

 

618

 

 

1,169

 

 

1,134

 

 

1,398

 

 

3,552

 

 

4,319

 

Payments for merger-related costs

 

 

17

 

 

23

 

 

46

 

 

34

 

 

151

 

 

124

 

 

133

 

 

86

 

 

442

 

Free Cash Flow, excluding payments for merger-related costs

$

668

 

 

$

791

 

 

$

913

 

 

$

1,266

 

 

$

652

 

 

$

1,320

 

 

$

1,258

 

 

$

1,531

 

 

$

3,638

 

 

$

4,761

 

Net cash (used in) provided by investing activities

$

(462

)

 

$

(306

)

 

$

(42

)

 

$

231

 

 

$

(966

)

 

$

(1,615

)

 

$

(657

)

 

$

(887

)

 

$

(579

)

 

$

(4,125

)

Net cash provided by (used in) financing activities

$

1,000

 

 

$

(3,267

)

 

$

(758

)

 

$

(311

)

 

$

(190

)

 

$

(866

)

 

$

(543

)

 

$

(775

)

 

$

(3,336

)

 

$

(2,374

)

Free Cash Flow - Net cash provided by operating activities less Cash purchases of property and equipment, including Proceeds from sales of tower sites and Proceeds related to beneficial interests in securitization transactions and less Cash payments for debt prepayment of debt extinguishment costs. Free Cash Flow is utilized by T-Mobile’s management, investors, and analysts to evaluate cash available to pay debt and provide further investment in the business.

Our guidance range for Free Cash Flow is calculated as follows:

 

FY

(in millions)

2020 Guidance Range

Net cash provided by operating activities (1)

$

7,900

 

 

$

8,500

 

Cash purchases of property and equipment

(5,900

)

 

(6,200

)

Proceeds related to beneficial interests in securitization transactions

3,400

 

 

3,500

 

Free Cash Flow

$

5,400

 

 

$

5,800

 

(1)

Guidance for Net cash provided by operating activities excludes payments for merger-related costs and any settlement of interest rate swaps, which are not available without unreasonable effort and may be significant. The interest rate swaps will be settled upon the issuance of fixed-rate debt or the mandatory termination date of June 3, 2020. See Note 7 – Fair Value Measurements in our Annual Report on Form 10-K for the year ended December 31, 2019, for additional details.

The following table illustrates the calculation of our operating measure ARPU and reconciles this measure to the related service revenues:

(in millions, except average number of customers and ARPU)

Quarter

 

Year Ended

December 31,

Q1 2018

 

Q2 2018

 

Q3 2018

 

Q4 2018

 

Q1 2019

 

Q2 2019

 

Q3 2019

 

Q4 2019

 

2018

 

2019

Calculation of Branded Postpaid Phone ARPU

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Branded postpaid service revenues

$

5,070

 

 

$

5,164

 

 

$

5,244

 

 

$

5,384

 

 

$

5,493

 

 

$

5,613

 

 

$

5,746

 

 

$

5,821

 

 

$

20,862

 

 

$

22,673

 

Less: Branded postpaid other revenues

(259

)

 

(272

)

 

(289

)

 

(297

)

 

(310

)

 

(326

)

 

(346

)

 

(362

)

 

(1,117

)

 

(1,344

)

Branded postpaid phone service revenues

$

4,811

 

 

$

4,892

 

 

$

4,955

 

 

$

5,087

 

 

$

5,183

 

 

$

5,287

 

 

$

5,400

 

 

$

5,459

 

 

$

19,745

 

 

$

21,329

 

Divided by: Average number of branded postpaid phone customers (in thousands) and number of months in period

34,371

 

35,051

 

35,779

 

36,631

 

37,504

 

38,226

 

38,944

 

39,736

 

35,458

 

38,602

Branded postpaid phone ARPU

$

46.66

 

 

$

46.52

 

 

$

46.17

 

 

$

46.29

 

 

$

46.07

 

 

$

46.10

 

 

$

46.22

 

 

$

45.79

 

 

$

46.40

 

 

$

46.04

 

Calculation of Branded Prepaid ARPU

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Branded prepaid service revenues

$

2,402

 

 

$

2,402

 

 

$

2,395

 

 

$

2,399

 

 

$

2,386

 

 

$

2,379

 

 

$

2,385

 

 

$

2,393

 

 

$

9,598

 

 

$

9,543

 

Divided by: Average number of branded prepaid customers (in thousands) and number of months in period

20,583

 

 

20,806

 

 

20,820

 

 

20,833

 

 

21,122

 

 

21,169

 

 

20,837

 

 

20,691

 

 

20,761

 

 

20,955

 

Branded prepaid ARPU

$

38.90

 

 

$

38.48

 

 

$

38.34

 

 

$

38.39

 

 

$

37.65

 

 

$

37.46

 

 

$

38.16

 

 

$

38.54

 

 

$

38.53

 

 

$

37.95

 

Average Revenue Per User (ARPU) - Average monthly Service revenues earned from customers. Service revenues for the specified period divided by the average customers during the period, further divided by the number of months in the period.

Branded postpaid phone ARPU excludes branded postpaid other customers and related revenues.

View source version on businesswire.com:https://www.businesswire.com/news/home/20200206005925/en/

CONTACT: Press Contact:

Media Relations

T-Mobile US, Inc.

mediarelations@t-mobile.com

http://newsroom.t-mobile.comInvestor Relations Contact:

Nils Paellmann

T-Mobile US, Inc.

investor.relations@t-mobile.com

http://investor.t-mobile.com

KEYWORD: UNITED STATES NORTH AMERICA WASHINGTON

INDUSTRY KEYWORD: CONSUMER ELECTRONICS TECHNOLOGY OTHER TECHNOLOGY TELECOMMUNICATIONS MOBILE/WIRELESS NETWORKS HARDWARE

SOURCE: T-Mobile US, Inc.

Copyright Business Wire 2020.

PUB: 02/06/2020 04:01 PM/DISC: 02/06/2020 04:01 PM

http://www.businesswire.com/news/home/20200206005925/en