T-mobile Us, Inc. · NASDAQ:TMUS
T-mobile Us — Q1 2023 Earnings Presentation
29 slides from T-mobile Us's earnings presentation, Aug 27, 2023
Slide 1: Exhibit 99.2
EXHIBIT 99.2
Slide 2: Contents
2 3 Highlights 4 Customer Metrics 7 Financial Metrics 13 Capital Structure 14 Merger & Integration 15 Guidance 16 Contacts 17 Financial and Operational Tables
Slide 3: T-Mobile Delivers Industry-Leading Growth in Customers and Profitability in Q1 2023
3 T-Mobile Delivers Industry-Leading Growth in Customers and Profitability in Q1 2023 and Raises 2023 Guidance (1) AT&T Inc. historically does not disclose postpaid net account additions. Comcast and Charter do not disclose postpaid phone net additions. Industry leading claims are based on consensus
Slide 4: Postpaid Accounts
4 Postpaid Accounts Year-Over-Year (in thousands) Continued growth in Postpaid net accounts with a 28,813 decrease in net additions primarily due to: 28,212 28,526 27,818 ■ Continued normalization of industry growth toward pre 27,507 COVID-19 pandemic levels ■ Partially offset by capturing above our
Slide 5: Postpaid Customers
5 Postpaid Customers Year-Over-Year (in thousands) Postpaid phone net customer additions decreased 90,414 92,232 93,525 primarily due to: 88,423 88,787 ■ Continued normalization of industry growth toward pre 1,818 COVID-19 pandemic levels 1,656 1,627 ■ Fewer migrations from prepaid 1,318 1,293 891 ■
Slide 6: Prepaid Customers and High Speed Internet Customers
6 Prepaid Customers Year-Over-Year (in thousands) Prepaid net customer additions decreased primarily due 21,341 21,366 21,392 to: 21,118 21,236 ■ Continued normalization of industry growth toward pre COVID-19 pandemic levels 146 ■ Partially offset by growth in High Speed Internet and 105 fewer migra
Slide 7: Service Revenues and Postpaid Service Revenues
7 Service Revenues Year-Over-Year ($ in millions) Service revenues increased 3% primarily due to: ■ Increase in Postpaid service revenues $15,518 $15,546 ■ Partially offset by a decrease in Wholesale and other $15,316 $15,361 $15,128 service revenues Sequential Service revenues increased slightly pr
Slide 8: Equipment Revenues
8 Equipment Revenues Year-Over-Year ($ in millions) Equipment revenues decreased 21% primarily due to: ■ Lower lease revenues ■ A lower number of devices sold primarily driven by higher postpaid upgrades in the prior year related to $4,694 Sprint customers moving to devices that are compatible $4,45
Slide 9: Cost of Services and SG&A Expense
9 Cost of Services, exclusive of D&A Year-Over-Year ($ in millions, % of Service revenues) Cost of services, exclusive of D&A, decreased 18% $4,060 primarily due to: $3,727 $3,712 ■ Higher realized Merger synergies $3,167 $3,061 ■ Lower Merger-related costs related to network decommissioning and int
Slide 10: Net Income and Diluted Earnings Per Share
10 Net Income (Loss) Year-Over-Year ($ in millions, % of Service revenues) Net income was $1.9 billion and Diluted earnings per share was $1.58 in Q1 2023, compared to $713 million $1,940 and $0.57 in Q1 2022, primarily due to the factors described above and included the following, net of tax: $1,47
Slide 11: Core Adjusted EBITDA and Operating Cash Flow
11 Core Adjusted EBITDA* Year-Over-Year ($ in millions, % of Service revenues) Core Adjusted EBITDA increased 9% primarily due to: $7,052 ■ Lower Cost of equipment sales, excluding Merger- $6,618 $6,728 $6,582 related costs $6,463 ■ Higher Service revenues ■ Lower Cost of services, excluding Merger-
Slide 12: Cash Purchases of Property and Equipment and Adjusted Free Cash Flow
12 Cash Purchases of Property and Year-Over-Year Equipment, incl. Capitalized Interest Cash purchases of property and equipment, including ($ in millions, % of Service revenues) capitalized interest, decreased 11% primarily due to: ■ Increased capital efficiency following our accelerated nationwide
Slide 13: Net Debt and Net Debt Ratios
13 Total debt, excluding tower obligations, at the end of Q1 Net Debt (Excluding Tower 2023 was $77.2 billion. Obligations) & Net Debt to LTM Net Net debt, excluding tower obligations, at the end of Q1 Income and Core Adj. EBITDA 2023 was $72.7 billion. Ratios ($ in billions) ■ On September 8, 2022,
Slide 14: Merger-Related Synergies Guidance and Merger-Related Costs
14 Merger-Related Synergies Guidance Merger synergies are expected to be between $7.3 billion to $7.5 billion in 2023: ▪ $2.6 billion to $2.7 billion of SG&A expense reductions ▪ $3.1 billion to $3.2 billion of cost of service expense reductions achieved through network efficiencies ▪ Approximately
Slide 15: 2023 Outlook
15 2023 Outlook Metric Previous Revised Change at Midpoint Postpaid net customer additions 5.0 to 5.5 million 5.3 to 5.7 million 250 thousand Net income (1) N/A N/A N/A Core Adjusted EBITDA (2) $28.7 to $29.2 billion $28.8 to $29.2 billion $50 million Merger synergies $7.2 to $7.5 billion $7.3 to $7
Slide 16: Investor Relations
16 Investor Relations Jud Henry Justin Taiber Trina Schurman Senior Vice President Senior Director Senior Director Investor Relations Investor Relations Investor Relations Zach Witterstaetter Rose Kopecky Jacob Marks Investor Relations Investor Relations Investor Relations Manager Manager Manager in
Slide 17: Condensed Consolidated Balance Sheets
17 T-Mobile US, Inc. Condensed Consolidated Balance Sheets (Unaudited) March 31, December 31, (in millions, except share and per share amounts) 2023 2022 Assets Current assets Cash and cash equivalents $ 4,540 $ 4,507 Accounts receivable, net of allowance for credit losses of $152 and $167 4,366 4,4
Slide 18: Condensed Consolidated Statements of Comprehensive Income
18 T-Mobile US, Inc. Condensed Consolidated Statements of Comprehensive Income (Unaudited) Three Months Ended March 31, December 31, March 31, (in millions, except share and per share amounts) 2023 2022 2022 Revenues Postpaid revenues $ 11,862 $ 11,725 $ 11,201 Prepaid revenues 2,417 2,449 2,455 Who
Slide 19: Condensed Consolidated Statements of Cash Flows
19 T-Mobile US, Inc. Condensed Consolidated Statements of Cash Flows (Unaudited) Three Months Ended March 31, December 31, March 31, (in millions) 2023 2022 2022 Operating activities Net income $ 1,940 $ 1,477 $ 713 Adjustments to reconcile net income to net cash provided by operating activities Dep
Slide 20: Condensed Consolidated Statements of Cash Flows (Continued)
20 T-Mobile US, Inc. Condensed Consolidated Statements of Cash Flows (Continued) (Unaudited) Three Months Ended March 31, December 31, March 31, (in millions) 2023 2022 2022 Supplemental disclosure of cash flow information Interest payments, net of amounts capitalized $ 840 $ 937 $ 778 Operating lea
Slide 21: Supplementary Operating and Financial Data
21 T-Mobile US, Inc. Supplementary Operating and Financial Data (Unaudited) Quarter (in thousands) Q1 2022 Q2 2022 Q3 2022 Q4 2022 Q1 2023 Customers, end of period Postpaid phone customers (1) 70,656 71,053 71,907 72,834 73,372 Postpaid other customers (1) 17,767 17,734 18,507 19,398 20,153 Total po
Slide 22: Supplementary Operating and Financial Data
22 T-Mobile US, Inc. Supplementary Operating and Financial Data (Unaudited) Quarter (in thousands) Q1 2022 Q2 2022 Q3 2022 Q4 2022 Q1 2023 Accounts, end of period Total postpaid customer accounts (1) 27,507 27,818 28,212 28,526 28,813 (1) Customers impacted by the decommissioning of the legacy Sprin
Slide 23: Supplementary Operating and Financial Data (continued)
23 T-Mobile US, Inc. Supplementary Operating and Financial Data (continued) (Unaudited) Quarter (in millions, except percentages) Q1 2022 Q2 2022 Q3 2022 Q4 2022 Q1 2023 Financial Measures Service revenues $15,128 $15,316 $15,361 $15,518 $15,546 Equipment revenue $ 4,694 $ 4,130 $ 3,855 $ 4,451 $ 3,
Slide 24: Reconciliation of Non-GAAP Financial Measures to GAAP Financial Measures
24 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 25: Reconciliation of Non-GAAP Financial Measures to GAAP (continued)
25 T-Mobile US, Inc. Reconciliation of Non-GAAP Financial Measures to GAAP Financial Measures (continued) (Unaudited) Net debt (excluding tower obligations) to the LTM Net income, LTM Adjusted EBITDA and LTM Core Adjusted EBITDA ratios are calculated as follows: Mar 31, Jun 30, Sep 30, Dec 31, Mar 3
Slide 26: Reconciliation of Non-GAAP Financial Measures to GAAP (continued)
26 T-Mobile US, Inc. Reconciliation of Non-GAAP Financial Measures to GAAP Financial Measures (continued) (Unaudited) The current guidance range for Adjusted Free Cash Flow is calculated as follows: FY 2023 (in millions) Guidance Range Net cash provided by operating activities $ 17,900 $ 18,300 Cash
Slide 27: Definitions of Terms
27 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 28: Definitions of Terms (continued)
28 12. Adjusted Free Cash Flow margin - Adjusted Free Cash Flow margin is calculated as Adjusted Free Cash Flow divided by Service revenues. Adjusted Free Cash Flow Margin is utilized by T-Mobile’s management, investors, and analysts to evaluate the company’s ability to convert service revenue effic
Slide 29: Cautionary Statement Regarding Forward-Looking Statements
29 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.’