11% Growth in Service Revenue, 31% in Net
Income, 12% in Adjusted EBITDA, 2.1 Million Customer Net Additions
and Record-Low Fourth Quarter Churn of 1.28% in Q4
T-Mobile US, Inc. (NASDAQ: TMUS):
Fourth Quarter and Full-Year 2016 Highlights:
Industry-leading customer
growth:
- 2.1 million total net additions in Q4
2016 - 8.2 million in 2016
- 1.2 million total branded postpaid net
additions - 4.1 million in 2016
- 933,000 branded postpaid phone net
additions in Q4 2016 - 3.3 million in 2016
- 541,000 branded prepaid net additions
in Q4 2016 - 2.5 million in 2016
- 1.28% branded postpaid phone churn in
Q4 2016, down 18 bps from Q4 2015 - 1.30% in 2016, down 9 bps from
2015
Industry-leading financial growth
(all percentages year-over-year):
- $7.2 billion service revenues, up 11%
in Q4 2016 - up 12% to $27.8 billion in 2016
- $10.2 billion total revenues, up 23% in
Q4 2016 - up 16% to $37.2 billion in 2016
- $390 million net income, up 31% in Q4
2016 - up 99% to $1.5 billion in 2016
- $0.45 EPS, up 32% in Q4 2016 - $1.69
EPS, up 106% in 2016
- $2.5 billion Adjusted EBITDA(1), up 12%
in Q4 2016 - up 41% to $10.4 billion in 2016
Strong outlook for 2017:
- Guidance range for branded postpaid net
additions of 2.4 to 3.4 million
- Net income is not available on a
forward looking basis(2)
- Adjusted EBITDA target of $10.4 to
$10.8 billion, which excludes spectrum gains and includes leasing
revenues of $0.8 to $0.9 billion. The impact from Data Stash is
expected to be immaterial.
- Cash capital expenditures guidance of
$4.8 to $5.1 billion, excluding capitalized interest
- Net cash provided by operating
activities three-year compound annual growth rate (CAGR) is
expected to be between 15% and 18%
- Free Cash Flow three-year CAGR is
expected to be between 45% and 48%(1)
__________________________________
(1) Adjusted EBITDA is a non-GAAP financial measure
and Free Cash Flow is a non-GAAP financial metric. These non-GAAP
financial items 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 items to the most
directly comparable GAAP financial items are provided in the
financial tables. (2) 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, interest expense and
interest income.
T-Mobile US, Inc. (NASDAQ: TMUS) reported Q4 2016 results which
showed that T-Mobile continues to lead the industry in both
customer and financial growth.
For the third year in a row, the Company added more than 8
million total customers and captured all of the industry’s postpaid
phone growth by adding 3.3 million branded postpaid phone customers
in 2016. In prepaid, the Company added more than 5 million net
additions over the past 3 years, including 2.5 million in 2016.
T-Mobile also completed its third year of growing service revenues,
recording 12% growth in 2016 when all of its peers showed declines.
This consistent outperformance continues to distinguish T-Mobile
from the pack in wireless and the outlook for 2017 shows that the
Company plans to continue with strong growth in customers and
financial metrics.
“These results are proof that doing right by customers is also
good for shareholders. Not only are customers flocking to T-Mobile,
but we’re also producing rock-solid financial results including 11%
growth in service revenues, 23% in total revenues, 31% in net
income and 12% in Adjusted EBITDA year-over-year in Q4,” said John
Legere, President and CEO of T-Mobile. “The competition just
doesn’t get that customers want to come first! That’s three years
in a row that we’ve added more than 8 million customers and taken
all of the postpaid phone growth in the industry. The Un-carrier
revolution continues in 2017!”
Industry-Leading Customer
Growth
T-Mobile’s Un-carrier strategy has upended the wireless industry
and is built around listening to customers and finding solutions
for their pain points. This has resulted in a series of
consumer-friendly moves that changed the rules of wireless and
forced the competition to change along with it. So far, T-Mobile
has launched 13 Un-carrier moves in just four years including the
elimination of service contracts, ending overages, enabling
upgrades anytime, free international data roaming, unlimited music
and video streaming, and offering all unlimited plans with taxes
and fees included. The Un-carrier’s momentum has become a consumer
revolution that sets T-Mobile far apart from the competition...with
results to match.
(in thousands, except churn)
Q4 2016 Q3 2016
Q4 2015 2016 2015 Total net customer additions
2,101 1,970 2,062 8,173 8,264 Branded postpaid net customer
additions 1,197 969 1,292 4,097 4,510 Branded postpaid phone net
customer additions 933 851 917 3,307 3,511 Branded prepaid net
customer additions 541 684 469 2,508 1,315 Branded postpaid phone
churn 1.28 % 1.32 % 1.46 % 1.30 % 1.39 %
- Total net customer additions
were 2.1 million in Q4 2016, bringing the Company’s total customer
count to 71.5 million. This was the 15th consecutive quarter in
which T-Mobile generated more than 1 million total net customer
additions. For full-year 2016, total net additions were 8.2 million
marking the third year in a row of more than 8 million.
- Branded postpaid net additions
were 1.2 million in Q4 2016. For full-year 2016, branded postpaid
net customer additions were 4.1 million, well above the revised
guidance for branded postpaid net customer additions of 3.7 to 3.9
million provided in connection with the Q3 2016 earnings.
- Branded postpaid phone net
additions were 933,000 in Q4 2016, marking the 12th consecutive
quarter that T-Mobile has led the industry in branded postpaid
phone net additions. For full-year 2016, T-Mobile added 3.3 million
branded postpaid phone customers, capturing all of the industry’s
growth for the third consecutive year. Branded postpaid phone
churn was a fourth quarter record of 1.28% in Q4 2016, down 4
basis points from Q3 2016 and down 18 basis points from Q4 2015.
For full-year 2016, branded postpaid phone churn was 1.30%, down 9
basis points.
- Branded prepaid net additions
were 541,000 in Q4 2016, which once again led the industry driven
by the continued success of the MetroPCS brand. For full-year 2016,
branded prepaid net additions were 2.5 million, which was the best
annual performance in Company history. Branded prepaid churn
was 3.94% in Q4 2016, up 12 basis points from Q3 2016 and down 26
basis points from Q4 2015. For full-year 2016, branded prepaid
churn was a record-low 3.88%, down 57 basis points from full-year
2015.
- Wholesale net additions were
363,000 in Q4 2016 and 1.6 million in full-year 2016. Going
forward, T-Mobile expects wholesale net additions to be
significantly lower in 2017, as the Company’s MVNO partners
de-emphasize Lifeline in favor of higher ARPU customer
categories.
Industry-Leading Financial
Growth
T-Mobile’s Un-carrier strategy is also producing the strongest
financial growth in the industry. From the outset, the company has
focused on translating its incredible customer growth into revenue,
net income, Adjusted EBITDA, net cash provided by operating
activities and free cash flow growth - and that’s clearly showing
up in its 2016 results. T-Mobile closed the year strong and was the
only company growing service revenues year-over-year in Q4 while
the competition was negative.
(in millions,
except EPS)
Q4 2016 Q3 2016 Q4 2015
2016 2015
Q4 2016vs.Q3 2016
Q4 2016vs.Q4 2015
2016vs.2015
Total service revenues $ 7,245 $ 7,133 $ 6,556 $ 27,844 $ 24,821 2
% 11 % 12 % Total revenues 10,175 9,246 8,247 37,242 32,053 10 % 23
% 16 % Net income 390 366 297 1,460 733 7 % 31 % 99 % Diluted EPS
0.45 0.42 0.34 1.69 0.82 7 % 32 % 106 % Adjusted EBITDA 2,548 2,630
2,280 10,391 7,393 (3 )% 12 % 41 %
- Service revenues increased by
11% in Q4 2016 to $7.2 billion. This marks the 11th consecutive
quarter that T-Mobile has led the industry in year-over-year
service revenue percentage growth. For full-year 2016, service
revenues increased by 12% to $27.8 billion. This marks the third
consecutive year that T-Mobile has led the industry in service
revenue percentage growth. Total revenues increased by 23%
in Q4 2016 to $10.2 billion. This marks the 14th time in the past
15 quarters that T-Mobile has led the industry in total revenue
percentage growth. For full-year 2016, total revenues increased by
16% to $37.2 billion. This marks the third consecutive year that
T-Mobile has led the industry in total revenue percentage
growth.
- Branded postpaid phone Average
Revenue per User (ARPU) was $48.37 in Q4 2016, up 0.7% from Q4
2015. For full-year 2016, branded postpaid phone ARPU was $47.47,
down 0.4% from 2015.
- Net income increased by 31%
year-over-year in Q4 2016 to $390 million. For full-year 2016, net
income increased by 99% to $1.5 billion. Excluding spectrum gains,
the year-over-year and full-year growth in net income was 84% and
50%, respectively. Net income, excluding spectrum gains, as a
percentage of service revenue was 3.4% in 2016, up from 2.6% in
2015. Diluted Earnings per share (EPS) increased by $0.11
year-over-year in Q4 2016 to $0.45. The after-tax impact on EPS of
spectrum gains was $0.10 in Q4 2015. For full-year 2016, diluted
EPS increased by $0.87 to $1.69, up 106% from 2015. The after-tax
impact on EPS of spectrum gains was $0.62 in 2016 and $0.12 in
2015.
- Adjusted EBITDA increased by 12%
year-over-year in Q4 2016 to $2.5 billion. For full-year 2016,
Adjusted EBITDA increased by 41% to $10.4 billion. Excluding
spectrum gains, the year-over-year and full-year growth in Adjusted
EBITDA was 19% and 32%, respectively. Adjusted EBITDA margin,
excluding spectrum gains, was 34% in 2016, up from 29% in
2015.
- Cash capital expenditures
reflect the Company’s continued investment in the expansion of its
4G LTE network. In Q4 2016, cash capital expenditures, excluding
capitalized interest, were $0.8 billion. Cash capital expenditures
included capitalized interest of $71 million in Q4 2016, $17
million in Q3 2016 and $50 million in Q4 2015. For full-year 2016,
cash capital expenditures, excluding capitalized interest, were
$4.6 billion, up from $4.5 billion in 2015. Cash capital
expenditures included capitalized interest of $142 million and $246
million, respectively.
- Net cash provided by operating
activities was $1.6 billion in Q4 2016, a decrease of $631
million year-over-year. For full-year 2016, net cash provided by
operating activities was $6.1 billion, an increase of $721 million
from 2015. Free cash flow decreased $59 million to $743
million in Q4 2016. For full-year 2016, free cash flow increased
$743 million to $1.4 billion.
Fastest and Fastest Growing 4G LTE
Network
T-Mobile currently provides 4G LTE coverage to 314 million
people, and is targeting to provide 320 million people with 4G LTE
coverage by year-end 2017. The Company continues to increase the
depth, breadth and functionality of its LTE network by adding new
spectrum to increase coverage, and re-farming existing spectrum and
implementing new technology to augment capacity. Collectively,
these network advancements help provide even further improved
network performance and reliability for T-Mobile’s customers.
At the end of Q4 2016, T-Mobile owned or had agreements to own
an average of 86 MHz of spectrum across the top 25 markets in the
U.S. In Q4 2016, T-Mobile closed on the previously announced
Chicago 700 MHz A-Block transaction, and in Q1 2017 the Company
closed on the previously announced Eastern Montana 700 MHz A-Block
transaction, bringing its total low-band spectrum holdings to 272
million POPs. T-Mobile has deployed its 700 MHz A-Block spectrum in
over 500 market areas covering more than 252 million people under
the name “Extended Range LTE” to enhance coverage and in-building
performance for its customers.
T-Mobile continues to expand its capacity through the re-farming
of existing spectrum and implementation of new technologies to
support current and future customer growth. At the end of Q4 2016,
approximately 70% of spectrum was being used for 4G LTE compared to
52% at the end of Q4 2015. The Company expects to continue to
re-farm spectrum currently committed to 2G and 3G technologies.
Re-farmed spectrum enables T-Mobile to continue expanding Wideband
LTE, which currently covers 232 million people. During Q4 and
throughout 2016, the Company has deployed and expanded new
technologies like VoLTE, Carrier Aggregation, and 4x4 MIMO that
have delivered material capacity benefits to both customers and the
T-Mobile network.
All of these improvements have enabled T-Mobile’s 4G LTE network
to become the fastest in the nation based on both download and
upload speeds from millions of user-generated tests. This is the
twelfth consecutive quarter that the Company has held that
title.
2017 Outlook
T-Mobile’s 2017 guidance shows that the Company plans to
continue with strong growth in customers, Adjusted EBITDA, net cash
provided by operating activities and free cash flow. In 2017,
T-Mobile expects to add between 2.4 and 3.4 million branded
postpaid net additions. While Net income is not available on a
forward looking basis, the Company is targeting between $10.4 and
$10.8 billion in Adjusted EBITDA, which excludes spectrum gains and
includes leasing revenues of $0.8 to $0.9 billion (the impact from
Data Stash is expected to be immaterial). Cash capital expenditures
guidance is $4.8 to $5.1 billion, excluding capitalized interest.
Net cash provided by operating activities three-year CAGR is
expected to be between 15% and 18%. Free Cash Flow three-year CAGR
is expected to be between 45% and 48%.
Financial Results
For more details on T-Mobile’s Q4 2016 and full-year 2016
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 the Company announces
material financial and operational information to its investors
using its investor relations website, press releases, SEC filings
and public conference calls and webcasts. The Company also intends
to use the @TMobileIR Twitter account (https://twitter.com/TMobileIR) and the @JohnLegere
Twitter (https://twitter.com/JohnLegere), Facebook and
Periscope accounts, which Mr. Legere also uses as a means for
personal communications and observations, as means of disclosing
information about the Company and its services and for complying
with its disclosure obligations under Regulation FD. 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 the Company’s press
releases, SEC filings and public conference calls and webcasts. The
social media channels that the Company intends to use as a means of
disclosing the information described above may be updated from time
to time as listed on the Company’s 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. The Company’s
advanced nationwide 4G LTE network delivers outstanding wireless
experiences to 71.5 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 MetroPCS. For more information,
please visit http://www.t-mobile.com or join the conversation on
Twitter using $TMUS.
Q4 2016 and Full-Year 2016 Earnings
Call, Livestream and Webcast Access Information
Access via Phone (audio only):
Date: February 14, 2017 Time:
10:00 a.m. (EST) Call-in Numbers: 800-432-9830 International:
719-234-7318 Participant Passcode: 3231453
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 Text, Twitter, or Facebook:
Text: Send a text message to
313131, enter the keyword TMUS followed by a space Twitter:
Send a tweet to @TMobileIR or @JohnLegere
using $TMUS
Facebook: Post a comment to John Legere’s Facebook Earnings post
Access via Webcast:
The earnings call will be broadcast live via the Company’s
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 719-457-0820 (international). The
passcode required to listen to the replay is 8628938.
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 news release includes “forward-looking statements" within
the meaning of the U.S. federal securities laws. Any statements
made herein that are not statements of historical fact, including
statements about T-Mobile US, Inc.’s plans, outlook,
beliefs, opinions, projections, guidance, strategy, expected
network modernization and other advancements, are forward-looking
statements. Generally, forward-looking statements may be identified
by words such as “anticipate,” “expect,” “suggests,” “plan,”
“project,” “believe,” “intend,” “estimates,” “targets,” “views,”
“may,” “will,” “forecast,” and other similar expressions. The
forward-looking statements speak only as of the date made, are
based on current assumptions and expectations, and involve a number
of risks and uncertainties. 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: adverse economic or political conditions in
the U.S. and international markets; competition in the wireless
services market, including new competitors entering the industry as
technologies converge; the effects any future merger or acquisition
involving us, as well as the effects of mergers or acquisitions in
the technology, media and telecommunications industry; challenges
in implementing our business strategies or funding our wireless
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; 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; breaches of our and/or our third
party vendors’ networks, information technology and data security;
natural disasters, terrorist attacks or similar incidents; 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; 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; the ability to make payments on our debt or to repay our
existing indebtedness when due; adverse change in the ratings of
our debt securities or adverse conditions in the credit markets;
changes in accounting assumptions that regulatory agencies,
including the Securities and Exchange Commission (“SEC”), may
require, which could result in an impact on earnings; and changes
in tax laws, regulations and existing standards and the resolution
of disputes with any taxing jurisdictions; and other risks
described in our filings with the SEC, including those
described in our most recently filed Annual Report on Form 10-K.
You should not place undue reliance on these forward-looking
statements. We do not undertake to update forward-looking
statements, whether as a result of new information, future events
or otherwise, except as required by law.
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, interest expense and interest
income. The Company is making an accounting change in 2017 to
include imputed interest associated with EIP receivables in Other
revenues which will be included in Adjusted EBITDA.
Adjusted EBITDA is reconciled to net income (loss) as
follows:
Quarter
Year EndedDecember 31,
(in millions) Q1 2015 Q2 2015
Q3 2015 Q4 2015
Q1 2016 Q2 2016
Q3 2016 Q4 2016 2015
2016 Net income (loss) $ (63 ) $ 361 $ 138 $ 297 $
479 $ 225 $ 366 $ 390 $ 733 $ 1,460 Adjustments: Interest expense
261 257 262 305 339 368 376 335 1,085 1,418 Interest expense to
affiliates 64 92 121 134 79 93 76 64 411 312 Interest income (112 )
(114 ) (109 ) (85 ) (68 ) (68 ) (62 ) (63 ) (420 ) (261 ) Other
expense (income), net 8 (1 ) 1 3 2 3 1 — 11 6 Income tax expense
(benefit) (41 ) 2 100 184 272 147
232 216 245 867 Operating income
117 597 513 838 1,103 768 989 942 2,065 3,802 Depreciation and
amortization 1,087 1,075 1,157 1,369 1,552 1,575 1,568 1,548 4,688
6,243 Cost of MetroPCS business combination 128 34 193 21 36 59 15
(6 ) 376 104 Stock-based compensation (1) 56 71 43 52 53 61 57 64
222 235 Other, net (1) — 40 2 — 5
1 1 — 42 7 Adjusted
EBITDA $ 1,388 $ 1,817 $ 1,908 $ 2,280
$ 2,749 $ 2,464 $ 2,630 $ 2,548 $ 7,393
$ 10,391 (1) Stock-based
compensation includes payroll tax impacts and may not agree to
stock based compensation expense in the condensed consolidated
financial statements. 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, 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. Adjusted
EBITDA margin represents Adjusted EBITDA divided by service
revenues. 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
metric 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 as they are not indicative of T-Mobile’s
ongoing operating performance and certain other nonrecurring
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 GAAP.
T-Mobile US, Inc.Reconciliation of
Non-GAAP Financial Measures to GAAP Financial Measures
(continued)(Unaudited)
Net debt (excluding Tower Obligations) to last twelve months
Adjusted EBITDA ratio is calculated as follows:
(in millions,
except net debt ratio) Mar 31, 2015 Jun
30, 2015 Sep 30, 2015 Dec 31,
2015 Mar 31, 2016 Jun 30, 2016
Sep 30, 2016 Dec 31, 2016 Short-term
debt $ 467 $ 386 $ 114 $ 182 $ 365 $ 258 $ 325 $ 354 Long-term debt
to affiliates 5,600 5,600 5,600 5,600 5,600 5,600 5,600 5,600
Long-term debt (1) 16,248 16,373 16,430 20,461 20,505 21,574 21,825
21,832 Less: Cash and cash equivalents (3,032 ) (2,642 ) (2,633 )
(4,582 ) (3,647 ) (5,538 ) (5,352 ) (5,500 ) Less: Short-term
investments — — — (2,998 ) (2,925 ) — —
— Net Debt (excluding Tower Obligations) $ 19,283
$ 19,717 $ 19,511 $ 18,663 $ 19,898
$ 21,894 $ 22,398 $ 22,286 Divided by:
Last twelve months Adjusted EBITDA $ 5,936 $ 6,302 $
6,864 $ 7,393 $ 8,754 $ 9,401 $ 10,123
$ 10,391 Net Debt (excluding Tower Obligations) to
Last Twelve Months Adjusted EBITDA Ratio 3.2 3.1 2.8
2.5 2.3 2.3 2.2 2.1
(1) Long-term debt as of March 31, 2015
through December 31, 2015 has been restated for the adoption of
Accounting Standards Update 2015-03, “Simplifying the Presentation
of Debt Issuance Costs” in Q1 2016. The impact to the Net Debt
(excluding Tower Obligations) to Last Twelve Months Adjusted EBITDA
Ratio was not significant.
Net debt - Short-term debt, long-term debt to affiliates, and
long-term debt (excluding tower obligations), less cash and cash
equivalents and short-term investments.
Free cash flow and adjusted free cash flow are calculated as
follows:
Quarter
Year EndedDecember 31,
(in millions) Q1 2015 Q2 2015
Q3 2015 Q4 2015
Q1 2016 Q2 2016
Q3 2016 Q4 2016 2015
2016 Net cash provided by operating activities $ 489
$ 1,161 $ 1,531 $ 2,233 $ 1,025 $ 1,768 $ 1,740 $ 1,602 $ 5,414 $
6,135 Cash purchases of property and equipment (982 ) (1,191 )
(1,120 ) (1,431 ) (1,335 ) (1,349 ) (1,159 ) (859 ) (4,724 ) (4,702
) Free Cash Flow (493 ) (30 ) 411 802 (310 ) 419 581 743 690 1,433
MetroPCS CDMA network decommissioning payments 71 103
76 95 63 66 43 37 345
209 Adjusted Free Cash Flow $ (422 ) $ 73 $
487 $ 897 $ (247 ) $ 485 $ 624 $ 780
$ 1,035 $ 1,642 Net cash used in investing
activities $ (2,692 ) $ (1,337 ) $ (1,209 ) $ (4,322 ) $ (1,860 ) $
(667 ) $ (1,859 ) $ (1,294 ) $ (9,560 ) $ (5,680 ) Net cash
provided by (used in) financing activities $ (80 ) $ (214 ) $ (331
) $ 4,038 $ (100 ) $ 790 $ (67 ) $ (160 ) $ 3,413
$ 463
Free Cash Flow - Net cash provided by operating activities less
cash capital expenditures for property and equipment. 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.
Adjusted Free Cash Flow - Free Cash Flow excluding
decommissioning payments related to the shutdown of the CDMA
portion of the MetroPCS network.
Free cash flow three-year CAGR is calculated as follows:
(in millions, except
CAGR Range) 2016 2019 Guidance Range CAGR
Range Net cash provided by operating activities $ 6,135 $ 9,400
$ 10,000 15 % 18 % Cash purchases of
property and equipment (4,702 ) (5,000 ) (5,400 ) 2 %
5 % Free Cash Flow $ 1,433 $ 4,400 $ 4,600 45
% 48 %
T-Mobile US, Inc.Reconciliation of
Operating Measures to Branded Postpaid Service
Revenues(Unaudited)
The following tables illustrate the calculation of our operating
measures ARPU and ABPU and reconcile these measures to the related
service revenues:
Quarter
Year EndedDecember 31,
(in millions, except average number of customers, ARPU and
ABPU) Q1 2015 Q2 2015
Q3 2015 Q4 2015 Q1
2016 Q2 2016 Q3 2016
Q4 2016 2015 2016
Calculation of Branded Postpaid Phone ARPU Branded postpaid
service revenues $ 3,774 $ 4,075 $ 4,197 $ 4,337 $ 4,302 $ 4,509 $
4,647 $ 4,680 $ 16,383 $ 18,138 Less: Branded postpaid mobile
broadband revenues (109 ) (135 ) (165 ) (179 ) (182 ) (193 ) (193 )
(205 ) (588 ) (773 ) Branded postpaid phone service revenues $
3,665 $ 3,940 $ 4,032 $ 4,158 $ 4,120
$ 4,316 $ 4,454 $ 4,475 $ 15,795
$ 17,365 Divided by: Average number of branded postpaid
phone customers (in thousands) and number of months in period
26,313 27,250 28,003 28,849 29,720
30,537 30,836 30,842 27,604
30,484 Branded postpaid phone ARPU $ 46.43 $ 48.19
$ 47.99 $ 48.05 $ 46.21 $ 47.11
$ 48.15 $ 48.37 $ 47.68 $ 47.47
Calculation of Branded Postpaid ABPU Branded postpaid
service revenues $ 3,774 $ 4,075 $ 4,197 $ 4,337 $ 4,302 $ 4,509 $
4,647 $ 4,680 $ 16,383 $ 18,138 EIP billings 1,292 1,393 1,409
1,400 1,324 1,344 1,394 1,370 5,494 5,432 Lease revenues — —
30 194 342 367 353 354
224 1,416 Total billings for branded postpaid
customers $ 5,066 $ 5,468 $ 5,636 $ 5,931
$ 5,968 $ 6,220 $ 6,394 $ 6,404
$ 22,101 $ 24,986 Divided by: Average number of
branded postpaid customers (in thousands) and number of months in
period 27,717 28,797 29,838 31,013
32,140 33,125 33,632 33,839 29,341
33,184 Branded postpaid ABPU $ 60.94 $ 63.29
$ 62.96 $ 63.74 $ 61.90 $ 62.59
$ 63.38 $ 63.08 $ 62.77 $ 62.75
Calculation of Branded Prepaid ARPU Branded prepaid service
revenues $ 1,842 $ 1,861 $ 1,894 $ 1,956 $ 2,025 $ 2,119 $ 2,182 $
2,227 $ 7,553 $ 8,553 Divided by: Average number of branded prepaid
customers (in thousands) and number of months in period 16,238
16,396 16,853 17,330 17,962
18,662 19,134 19,431 16,704 18,797
Branded prepaid ARPU $ 37.81 $ 37.83 $ 37.46
$ 37.63 $ 37.58 $ 37.86 $ 38.01
$ 38.20 $ 37.68 $ 37.92
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 mobile broadband customers
and related revenues.
Average Billings per User (ABPU) - Average monthly branded
postpaid service revenues earned from customers plus monthly EIP
billings and lease revenues divided by the average branded postpaid
customers during the period, further divided by the number of
months in the period. T-Mobile believes branded postpaid ABPU is
indicative of estimated cash collections, including device
financing payments, from T-Mobile’s postpaid customers each
month.
View source
version on businesswire.com: http://www.businesswire.com/news/home/20170214005477/en/
Press Contact:T-Mobile US, Inc.Media
Relationsmediarelations@t-mobile.comhttp://newsroom.t-mobile.comorInvestor
Relations Contact:T-Mobile US, Inc.Nils Paellmann877-281-TMUS
or
212-358-3210investor.relations@t-mobile.comhttp://investor.t-mobile.com
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