T-mobile Us, Inc. · NASDAQ:TMUS
T-mobile Us — Q3 2021 Earnings Presentation
35 slides from T-mobile Us's earnings presentation, Nov 2, 2021
Slide 1: Investor Factbook Q3 2021
TOGETHER WE ARE UNSTOPPABLE _INVESTOR ew & ew FACTBOOK Q3 2021
Slide 2: Contents
2 3 Highlights 4 Customer Metrics 7 Financial Metrics 13 Capital Structure 14 5G Network Leadership 16 Merger & Integration 17 Guidance 18 Contacts 19 Financial and Operational Tables The results and analysis presented below include the impact of T-Mobile’s merger (“Merger”) with Sprint Corporation
Slide 3: T-Mobile Delivers Industry-Leading Growth in Postpaid Service Revenues, Customers and Cash Flow
3 T-Mobile Delivers Industry-Leading Growth in Postpaid Service Revenues, Postpaid Customers and Cash Flow in Q3 Raises 2021 Guidance for the Third Consecutive Quarter Consistent and Profitable Customer Growth • Postpaid net additions of 1.3 million, best in industry and raising 2021 guidance • Post
Slide 4: Total Postpaid Net Additions and Postpaid Phone Churn
4 Total Postpaid Net Additions Total postpaid net customer additions were 1.3 million in (in thousands) Q3 2021, compared to 1.3 million in Q2 2021 and 2.0 million in Q3 2020. Postpaid phone net customer additions were 673 1,979 thousand in Q3 2021, compared to 627 thousand in Q2 2021 and 689 thousa
Slide 5: Postpaid Phone ARPU and Postpaid Accounts & ARPA
5 Postpaid Phone ARPU Postpaid phone ARPU was $48.06 in Q3 2021, up 0.9% from $47.61 in Q2 2021 and down 1.0% from $48.55 in Q3 2020. ▪ Sequentially, the increase was primarily due to higher premium services including Magenta MAX. $48.55 $48.06 ▪ Year-over-year, the decrease was primarily driven by
Slide 6: Total Prepaid Net Additions and Total Customers
6 Total Prepaid Net Additions Prepaid net customer additions were 66 thousand in Q3 2021, compared to net additions of 76 thousand in Q2 2021 (in thousands) and net additions of 56 thousand in Q3 2020. ▪ Sequentially, the decrease was primarily driven by higher churn, mostly offset by seasonally hig
Slide 7: Service Revenues and Equipment Revenues
7 Service Revenues Service revenues were $14.7 billion in Q3 2021, up 2% from $14.5 billion in Q2 2021 and up 4% from $14.1 billion in ($ in millions) Q3 2020. ▪ Sequentially and year-over-year, the increase was primarily due to an increase in Postpaid revenues, $14,722 primarily driven by higher av
Slide 8: Cost of Services and Cost of Equipment Sales
8 Cost of Services, exclusive of D&A Cost of services, exclusive of depreciation and ($ in millions, % of Service revenues) amortization (D&A), was $3.5 billion in Q3 2021, up 1% from $3.5 billion in Q2 2021 and up 7% from $3.3 billion in $3,827 Q3 2020. $3,384 $3,491 $3,538 ▪ Sequentially, Cost of
Slide 9: SG&A Expense and Depreciation & Amortization
9 Selling, General and Administrative Selling, general and administrative (SG&A) expense was $5.2 billion in Q3 2021, up 8% from $4.8 billion in Q2 (SG&A) Expense 2021 and up 7% from $4.9 billion in Q3 2020. ($ in millions, % of Service revenues) ▪ Sequentially and year-over-year, the increase was d
Slide 10: Net Income and Diluted Earnings Per Share
10 Net Income Net income was $691 million in Q3 2021, down 29% from ($ in millions) $978 million in Q2 2021 and down 45% from $1.3 billion in Q3 2020. Diluted EPS was $0.55 in Q3 2021, down from $0.78 in Q2 2021 and down from $1.00 in Q3 2020. ▪ Sequentially, the decrease in Net income and diluted $
Slide 11: Core Adjusted EBITDA and Net Cash Provided by Operating Activities
11 Core Adjusted EBITDA Core Adjusted EBITDA was $6.0 billion in Q3 2021, up 1% ($ in millions, % of Service revenues) from $6.0 billion in Q2 2021 and up 5% from $5.8 billion in Q3 2020. $6,041 ▪ Sequentially, the increase was primarily due to lower $5,864 $5,992 $5,779 Cost of equipment sales, exc
Slide 12: Cash Purchases of Property and Equipment and Free Cash Flow
12 Cash Purchases of Property and Cash purchases of property and equipment were $2.9 billion in Q3 2021, compared to $3.3 billion in Q2 2021 and Equipment $3.2 billion in Q3 2020. Capitalized interest included in cash ($ in millions, % of Service revenues) purchases of property and equipment was $46
Slide 13: Net Debt and Net Debt to LTM Pro Forma Core Adjusted EBITDA
13 Net Debt (Excluding Tower Total debt, excluding tower obligations, at the end of Q3 2021 was $75.2 billion. Obligations) & Net Debt to LTM Pro Forma Core Adj. EBITDA Ratio Net debt, excluding tower obligations, at the end of Q3 ($ in billions) 2021 was $71.2 billion. ▪ The ratio of net debt, excl
Slide 14: 5G Network Leadership: Further Extending Our 5G Leadership
-: 5G Network Leadership 14 Further Extending Our 5G Leadership COVERED POPs, MILLIONS ‘ Mobile 5G Coverage MORE 5G geographic coverage than Verizon and AT&T combined MID BAND 5G COVERAGE & SPECTRUM DEPLOYED 300 300M 200 MHZ POPS: 200 M DEPTH: 100 MHZ r 60 MHZ VERIZON — YE 2021 SPECTRUM DEPTH, MHz S
Slide 15: Recognized as the 5G Leader
-/* 5G Network Leadership 15 Recognized as the 5G Leader T-Mobile’s 5G is 2x faster than AT&T and Verizon and has the highest 5G availability globally with average speeds that have increased 36% since last quarter - October 2021 OPENSiGNAL T-Mobile is ranked first or tied for first across all networ
Slide 16: Unlocking synergies faster than planned
16 We’re unlocking synergies faster than planned to fuel growth investments and 5G network build. The Company expects Merger synergies to be $3.2 billion to $3.5 Improvements for billion in 2021, more than doubling the $1.3 billion delivered in 2020 Sprint customers and an increase from its prior gu
Slide 17: 2021 Outlook
17 2021 Outlook Metric Previous Revised Change at Midpoint Postpaid net customer additions 5.0 to 5.3 million 5.1 to 5.3 million 50 thousand Net income (1) N/A N/A N/A Core Adjusted EBITDA (2) $23.0 to $23.3 billion $23.4 to $23.5 billion $300 million Merger synergies $2.9 to $3.2 billion $3.2 to $3
Slide 18: Investor Relations
18 Investor Relations Jud Henry Justin Taiber Trina Schurman Senior Vice President Senior Director Senior Director Investor Relations Investor Relations Investor Relations Samia Bhatti Zach Witterstaetter Rose Kopecky Jacob Marks Investor Relations Investor Relations Investor Relations Investor Rela
Slide 19: Condensed Consolidated Balance Sheets
19 T-Mobile US, Inc. Condensed Consolidated Balance Sheets (Unaudited) (in millions, except share and per share amounts) September 30, 2021 December 31, 2020 Assets Current assets Cash and cash equivalents $ 4,055 $ 10,385 Accounts receivable, net of allowance for credit losses of $129 and $194 4,10
Slide 20: Condensed Consolidated Statements of Comprehensive Income
20 T-Mobile US, Inc. Condensed Consolidated Statements of Comprehensive Income (Unaudited) Three Months Ended Nine Months Ended September 30, September 30, June 30, September 30, (in millions, except share and per share amounts) 2021 2021 2020 2021 2020 Revenues Postpaid revenues $ 10,804 $ 10,492 $
Slide 21: Condensed Consolidated Statements of Cash Flows
21 T-Mobile US, Inc. Condensed Consolidated Statements of Cash Flows (Unaudited) Three Months Ended Nine Months Ended September 30, September 30, June 30, September 30, (in millions) 2021 2021 2020 2021 2020 Operating activities Net income $ 691 $ 978 $ 1,253 $ 2,602 $ 2,314 Adjustments to reconcile
Slide 22: Condensed Consolidated Statements of Cash Flows (Continued)
22 T-Mobile US, Inc. Condensed Consolidated Statements of Cash Flows (Continued) (Unaudited) Three Months Ended Nine Months Ended September 30, September 30, June 30, September 30, (in millions) 2021 2021 2020 2021 2020 Supplemental disclosure of cash flow information Interest payments, net of amoun
Slide 23: Supplementary Operating and Financial Data
23 T-Mobile US, Inc. Supplementary Operating and Financial Data (Unaudited) Nine Months Ended Quarter September 30, (in thousands) Q1 2020 Q2 2020 Q3 2020 Q4 2020 Q1 2021 Q2 2021 Q3 2021 2020 2021 Customers, end of period Postpaid phone customers (1)(2) 40,797 65,105 65,794 66,618 67,402 68,029 69,4
Slide 24: Supplementary Operating and Financial Data (continued)
24 T-Mobile US, Inc. Supplementary Operating and Financial Data (continued) (Unaudited) Nine Months Ended Quarter September 30, (in millions, except percentages) Q1 2020 Q2 2020 Q3 2020 Q4 2020 Q1 2021 Q2 2021 Q3 2021 2020 2021 Financial Measures Service revenues $ 8,846 $13,230 $14,139 $14,180 $14,
Slide 25: Device Financing and Supplementary Data
25 Nine Months Ended Quarter September 30, (in millions, except percentages) Q1 2020 Q2 2020 Q3 2020 Q4 2020 Q1 2021 Q2 2021 Q3 2021 2020 2021 Device Financing - Equipment Installment Plans Gross EIP financed $ 1,440 $ 1,825 $ 2,356 $ 4,126 $ 3,379 $ 3,348 $ 3,434 $ 5,621 $10,161 EIP billings 1,790
Slide 26: Calculation of Operating Measures
26 T-Mobile US, Inc. Calculation of Operating Measures (Unaudited) The following table illustrates the calculation of our operating measures ARPA and ARPU from the related service revenues: Nine Months Ended Quarter September 30, (in millions, except average number of accounts and customers, ARPA an
Slide 27: Reconciliation of Non-GAAP Financial Measures to GAAP
27 T-Mobile US, Inc. Reconciliation of Non-GAAP Financial Measures to GAAP Financial Measures (Unaudited) This Investor Factbook 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 accorda
Slide 28: Reconciliation of Non-GAAP Financial Measures to GAAP (continued)
28 T-Mobile US, Inc. Reconciliation of Non-GAAP Financial Measures to GAAP Financial Measures (continued) (Unaudited) Net debt (excluding tower obligations) to the LTM Pro Forma Adjusted EBITDA and LTM Pro Forma Core Adjusted EBITDA ratios are calculated as follows: Mar 31, Jun 30, Sep 30, Dec 31, M
Slide 29: Reconciliation of Non-GAAP Financial Measures to GAAP (continued)
29 T-Mobile US, Inc. Reconciliation of Non-GAAP Financial Measures to GAAP Financial Measures (continued) (Unaudited) Our current guidance range for Free Cash Flow is calculated as follows: FY 2021 Current Guidance (in millions) Range Net cash provided by operating activities $ 13,900 $ 14,000 Cash
Slide 30: Reconciliations to Beginning Customers and Accounts
30 T-Mobile US, Inc. Reconciliations to Beginning Customers and Accounts (Unaudited) Postpaid Postpaid Total phone other postpaid Prepaid Total (in thousands) customers customers customers customers customers Reconciliation to beginning customers T-Mobile customers as reported, end of period March 3
Slide 31: Pro Forma Income Statement Metrics
31 T-Mobile US, Inc. Pro Forma Income Statement Metrics (Unaudited) The following tables present certain income statement metrics on a pro forma basis as though the Merger had been completed on January 1, 2019. The unaudited pro forma income statement metrics have been prepared in accordance with Ar
Slide 32: Pro Forma Income Statement Metrics (Continued)
32 T-Mobile US, Inc. Pro Forma Income Statement Metrics (Continued) (Unaudited) Three Months Ended September December March 31, (in millions) 30, 2019 31, 2019 2020 Depreciation and amortization Combined depreciation and amortization (1) $ 3,882 $ 4,332 $ 4,061 Pro forma adjustments (5) 202 (210) (4
Slide 33: Pro Forma Income Statement Metrics (Continued)
33 T-Mobile US, Inc. Pro Forma Income Statement Metrics (Continued) (Unaudited) (1) Represents the sum of historically filed T-Mobile and Sprint standalone GAAP reported amounts. Please reference the T-Mobile Quarterly Reports on Form 10-Q for the quarterly period ended March 31, 2020 and the Curren
Slide 34: Definitions of Terms
34 Definitions of Terms Operating and financial measures are utilized by T-Mobile’s management to evaluate its operating performance and, in certain cases, its ability to meet liquidity requirements. Although companies in the wireless industry may not define measures in precisely the same way, T-Mob
Slide 35: Cautionary Statement Regarding Forward-Looking Statements
35 Cautionary Statement Regarding 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.’