T-mobile Us, Inc. · NASDAQ:TMUS
T-mobile Us — Q3 2023 Earnings Presentation
29 slides from T-mobile Us's earnings presentation, Oct 25, 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: Footnotes and non-GAAP notes
3 (1) AT&T Inc. historically does not disclose postpaid net account additions. Comcast and Charter do not disclose postpaid phone net customer additions. Industry leading claims are based on consensus expectations if results are not yet reported. (2) Core Adjusted EBITDA and Adjusted Free Cash Flow
Slide 4: Postpaid Accounts
4 Postpaid Accounts Year-Over-Year (in thousands) Continued growth in Postpaid net accounts with a decrease in net additions primarily due to: 29,498 28,813 29,112 ■ Fewer High Speed Internet only net account additions 28,212 28,526 Sequential 394 386 Continued growth in Postpaid net accounts with a
Slide 5: Postpaid Customers
5 Postpaid Customers Year-Over-Year (in thousands) Postpaid phone net customer additions were relatively 96,312 flat primarily due to: 90,414 92,232 93,525 95,086 ■ Increased deactivations from a growing customer base despite slightly lower churn 1,818 1,627 1,561 ■ Offset by higher gross additions
Slide 6: Prepaid and High Speed Internet Customers
6 Prepaid Customers Year-Over-Year (in thousands) Prepaid net customer additions decreased primarily due to: 21,341 21,366 21,392 21,516 21,595 ■ Continued moderation of industry growth ■ Fewer High Speed Internet net additions ■ Partially offset by lower churn 124 105 79 Sequential 25 26 Prepaid ne
Slide 7: Service Revenues and Postpaid Service Revenues
7 Service Revenues Year-Over-Year ($ in millions) Service revenues increased 4% primarily due to: ■ Increase in Postpaid service revenues $15,738 $15,914 ■ Partially offset by a decrease in Wholesale and other $15,361 $15,518 $15,546 service revenues, including the impact from the sale of the Wireli
Slide 8: Equipment Revenues and Cost of Equipment Sales
8 Equipment Revenues Year-Over-Year ($ in millions) Equipment revenues decreased 20% primarily due to: $4,451 ■ A lower number of devices and accessories sold due to $246 lower postpaid upgrades and prepaid sales driven by longer device lifecycles, as well as Sprint customers $4,205 moving to device
Slide 9: Cost of Services, exclusive of D&A
9 Cost of Services, exclusive of D&A Year-Over-Year ($ in millions, % of Service revenues) Cost of services, exclusive of D&A, decreased 22% primarily due to: $3,712 ■ Lower Merger-related costs related to network $3,167 $3,061 decommissioning and integration $2,916 $2,886 ■ Lower costs due to the s
Slide 10: Net Income
10 Net Income Year-Over-Year ($ in millions, % of Service revenues) Net income was $2.1 billion and Diluted earnings per share was $1.82 in Q3 2023, compared to Net income of $508 million and Diluted earnings per share of $0.40 in $2,221 Q3 2022, primarily due to the factors described above $2,142 a
Slide 11: Core Adjusted EBITDA
11 Core Adjusted EBITDA* Year-Over-Year ($ in millions, % of Service revenues) Core Adjusted EBITDA increased 12% primarily due to: ■ Higher Service revenues $7,336 $7,547 ■ Lower Cost of equipment sales, excluding Merger- $7,052 $6,728 $6,582 related costs ■ Lower Cost of services, excluding Merger
Slide 12: Cash Purchases of Property and Equipment and Adjusted Free Cash Flow
12 Cash Purchases of Property and Year-Over-Year Equipment, incl. Capitalized Interest Cash purchases of property and equipment, including ($ in millions, % of Service revenues) capitalized interest, decreased 33% 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 Q3 Net Debt (Excluding Tower 2023 was $77.9 billion. Obligations) & Net Debt to LTM Net Net debt, excluding tower obligations, at the end of Q3 Income and Core Adj. EBITDA 2023 was $72.8 billion. Ratios ($ 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 approximately $7.5 billion in 2023: ▪ Approximately $2.7 billion of SG&A expense reductions ▪ Approximately $3.2 billion of cost of service expense reductions achieved through network efficiencies ▪ Approximately $1.6 billion o
Slide 15: 2023 Outlook
15 2023 Outlook Metric Previous Revised Change at Midpoint Postpaid net customer additions 5.6 to 5.9 million 5.7 to 5.9 million 50 thousand Net income (1) N/A N/A N/A Core Adjusted EBITDA (2) $28.9 to $29.2 billion $29.0 to $29.2 billion $50 million Merger synergies ~$7.5 billion ~$7.5 billion No c
Slide 16: Investor Relations
16 Investor Relations Jud Henry Justin Taiber Rob Brust 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 investo
Slide 17: Condensed Consolidated Balance Sheets
17 T-Mobile US, Inc. Condensed Consolidated Balance Sheets (Unaudited) September 30, December 31, (in millions, except share and per share amounts) 2023 2022 Assets Current assets Cash and cash equivalents $ 5,030 $ 4,507 Accounts receivable, net of allowance for credit losses of $166 and $167 4,500
Slide 18: Condensed Consolidated Statements of Comprehensive Income
18 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) 2023 2023 2022 2023 2022 Revenues Postpaid revenues $ 12,288 $ 12,070 $
Slide 19: Condensed Consolidated Statements of Cash Flows
19 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) 2023 2023 2022 2023 2022 Operating activities Net income $ 2,142 $ 2,221 $ 508 $ 6,303 $ 1,113 Adjustments to reconci
Slide 20: Statements of Cash Flows (Continued)
20 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) 2023 2023 2022 2023 2022 Supplemental disclosure of cash flow information Interest payments, net of amoun
Slide 21: Supplementary Operating and Financial Data
21 T-Mobile US, Inc. Supplementary Operating and Financial Data (Unaudited) Nine Months Ended Quarter September 30, (in thousands) Q1 2022 Q2 2022 Q3 2022 Q4 2022 Q1 2023 Q2 2023 Q3 2023 2022 2023 Customers, end of period Postpaid phone customers (1) 70,656 71,053 71,907 72,834 73,372 74,132 74,982
Slide 22: Supplementary Operating and Financial Data
22 T-Mobile US, Inc. Supplementary Operating and Financial Data (Unaudited) Nine Months Ended Quarter September 30, (in thousands) Q1 2022 Q2 2022 Q3 2022 Q4 2022 Q1 2023 Q2 2023 Q3 2023 2022 2023 Accounts, end of period Total postpaid customer accounts (1) 27,507 27,818 28,212 28,526 28,813 29,112
Slide 23: Supplementary Operating and Financial Data (continued)
23 T-Mobile US, Inc. Supplementary Operating and Financial Data (continued) (Unaudited) Nine Months Ended Quarter September 30, (in millions, except percentages) Q1 2022 Q2 2022 Q3 2022 Q4 2022 Q1 2023 Q2 2023 Q3 2023 2022 2023 Financial measures Service revenues $15,128 $15,316 $15,361 $15,518 $15,
Slide 24: Reconciliation of Non-GAAP Financial Measures to GAAP
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 Measures (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: Adjusted Free Cash Flow Guidance Calculation
26 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 $ 18,300 $ 18,500 Cash purchases of property and equipment, including capitalized interest (9,600) (9,800) Proceeds related to beneficial
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.’