Slide 1: Supercharging the Un-carrier: Investor Factbook Q3 2020
SUPERCHARGING THE UN-CARRIER INVESTOR FACTBOOK Q3 2020
Slide 2: Table of contents and merger basis of presentation
2 3 Highlights 4 Customer Metrics 7 Financial Metrics 13 Capital Structure 14 5G Network Leadership 15 Merger & Integration 16 Guidance 17 Events & Contacts 18 Financial and Operational Tables Unless otherwise noted, historical results for T-Mobile from the close of the merger (“Merger”) with Sprint
Slide 3: T-Mobile Crosses 100 Million Total Customer Milestone and Raises Guidance
3 T-Mobile Crosses 100 Million Total Customer Milestone and Raises Second Half 2020 Financial Guidance Across the Board with Strong Third Quarter 2020 Results Industry-Leading Customer Growth • Record-high 2,035,000 total net additions, best in industry • Record-high 1,979,000 postpaid net additions
Slide 4: Total Postpaid Net Additions and Postpaid Phone Churn
4 Total Postpaid Net Additions Postpaid phone net customer additions were 689,000 in (in thousands) Q3 2020, compared to 253,000 in Q2 2020 and 754,000 in Q3 2019. ▪ Sequentially, the increase was due to promotional 1,979 activity and higher switching activity due to increased 1,314 store traffic, p
Slide 5: Postpaid Phone ARPU and Postpaid Accounts & ARPA
5 Postpaid Phone ARPU Postpaid phone ARPU was $48.55 in Q3 2020, up 1.2% from $47.99 in Q2 2020 and up 5.0% from $46.22 in Q3 2019. ▪ Sequentially, the increase was primarily due to higher premium service revenues and certain one-time $48.55 charges. $47.99 ▪ Year-over-year, the increase was primari
Slide 6: Total Prepaid Net Additions and Total Customers
6 Total Prepaid Net Additions (losses) Prepaid net customer additions were 56,000 in Q3 2020, compared to net additions of 133,000 in Q2 2020 and net (in thousands) additions of 62,000 in Q3 2019. 133 ▪ Sequentially, the decrease was primarily due to lower prepaid industry switching activity. 77 62
Slide 7: Service Revenues and Equipment Revenues
7 Service Revenues Service revenues were $14.1 billion in Q3 2020, up 7% from $13.2 billion in Q2 2020 and up 62% from $8.7 billion in ($ in millions) Q3 2019. $14,139 ▪ Sequentially, the increase was primarily due to an $13,230 increase of 128% in Wholesale revenues driven by our Master Network Ser
Slide 8: Cost of Services and Cost of Equipment Sales
8 Cost of Services, exclusive of D&A Cost of services, exclusive of depreciation and ($ in millions, % of Service revs excl. Merger-related amortization (D&A), was $3.3 billion in Q3 2020, up 7% costs) from $3.1 billion in Q2 2020 and up 91% from $1.7 billion in Q3 2019. $3,314 $3,098 ▪ Sequentially
Slide 9: Selling, General and Administrative Expense
9 Selling, General and Administrative Selling, general and administrative (SG&A) expense was $4.9 billion in Q3 2020, down 13% from $5.6 billion in (SG&A) Expense Q2 2020 and up 39% from $3.5 billion in Q3 2019. ($ in millions, % of Service revs excl. Merger- related costs and COVID-19-related costs
Slide 10: Net Income and Diluted Earnings Per Share
10 Net Income Net income was $1.3 billion in Q3 2020, up 1,039% from ($ in millions) $110 million in Q2 2020 and up 44% from $870 million in Q3 2019. EPS was $1.00 in Q3 2020, up from $0.09 in Q2 2020 and down from $1.01 in Q3 2019. ▪ Sequentially, the increases in Net income and EPS were $1,253 pri
Slide 11: Adjusted EBITDA and Net Cash Provided by Operating Activities
11 Adjusted EBITDA Adjusted EBITDA was $7.1 billion in Q3 2020, up 2% from ($ in millions, % of Service Revs) $7.0 billion in Q2 2020 and up 110% from $3.4 billion in Q3 2019. ▪ Sequentially the increase was primarily due to higher Postpaid Service and Equipment revenues, partially $7,129 offset by
Slide 12: Cash Purchases of Property and Equipment; Free Cash Flow
12 Cash Purchases of Property and Cash purchases of property and equipment were $3.2 billion in Q3 2020, compared to $2.3 billion in Q2 2020 and Equipment $1.5 billion in Q3 2019. Capitalized interest included in cash ($ in millions, % of Service Revenues) purchases of property and equipment was $10
Slide 13: Total Net Debt and Leverage Ratio
13 Total Net Debt, Excluding Tower Total debt, excluding tower obligations, at the end of Q3 2020 was $69.2 billion. Obligations & Leverage Ratio: Net Debt to Pro Forma Adj. EBITDA Net debt, excluding tower obligations, at the end of Q3 ($ in billions) 2020 was $62.6 billion. ▪ The ratio of net debt
Slide 14: 5G Network Leadership
‘|: 5G Network Leadership T-Mobile is on a mission to build America’s best 5G network, offering customers unrivalled coverage and capacity where they live, work, and play Verizon America’s Largest 5G Network rat covering 1.4 million square miles Low-band 5G Mid-band 5G More than 270M 30M: 280M peopl
Slide 15: Merger Integration and Synergies
15 T-Mobile remains highly confident in its ability to integrate the networks, people and assets of Sprint and T-Mobile. This integration is expected to deliver $6 billion in annualized savings and deliver a net present value of synergies of $43 billion through a combination of expense reductions an
Slide 16: H2 2020 Outlook
16 H2 2020 Outlook Previous Current Change at Midpoint Postpaid Net Customer Additions 1.7 to 1.9 million Achieved in Q3 2020 N/A Postpaid Phone Net Customer Additions N/A 1.3 to 1.4 million N/A Net Income (1) N/A N/A N/A Adjusted EBITDA $12.4 to $12.7 billion $13.6 to $13.7 billion $1.1 billion Lea
Slide 17: Upcoming Events and Contact Information
17 Upcoming Events (All dates and attendance tentative) Event Date MoffetNathanson 5G Summit November 12, 2020 (Virtual) New Street Research/Boston Consulting Group 5G Conference November 17, 2020 (Virtual) Morgan Stanley European TMT Conference November 18-20, 2020 (Virtual) Bank of America Leverag
Slide 18: Condensed Consolidated Balance Sheets
18 T-Mobile US, Inc. Condensed Consolidated Balance Sheets (Unaudited) (in millions, except share and per share amounts) September 30, 2020 December 31, 2019 Assets Current assets Cash and cash equivalents $ 6,571 $ 1,528 Accounts receivable, net of allowance for credit losses of $208 and $61 4,313
Slide 19: Condensed Consolidated Statements of Comprehensive Income
19 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) 2020 2020 2019 2020 2019 Revenues Postpaid revenues $ 10,209 $ 9,959 $
Slide 20: Condensed Consolidated Statements of Cash Flows
20 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) 2020 2020 2019 2020 2019 Operating activities Net income $ 1,253 $ 110 $ 870 $ 2,314 $ 2,717 Adjustments to reconcile
Slide 21: Condensed Consolidated Statements of Cash Flows (Continued)
21 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) 2020 2020 2019 2020 2019 Supplemental disclosure of cash flow information Interest payments, net of amoun
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 2019 Q2 2019 Q3 2019 Q4 2019 Q1 2020 Q2 2020 Q3 2020 2019 2020 Customers, end of period Postpaid phone customers (1) 37,880 38,590 39,344 40,345 40,797 65,105 65,794
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 2019 Q2 2019 Q3 2019 Q4 2019 Q1 2020 Q2 2020 Q3 2020 2019 2020 Financial Measures Service revenues $ 8,391 $ 8,546 $ 8,713 $ 8,850 $ 8,
Slide 24: Calculation of Operating Measures
24 T-Mobile US, Inc. Calculation of Operating Measures (Unaudited) The following table illustrates the calculation of our operating measures ARPA and ARPU and reconciles these measures to the related service revenues: Nine Months Ended Quarter September 30, (in millions, except average number of cus
Slide 25: Reconciliation of Non-GAAP Financial Measures to GAAP
25 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 26: Reconciliation of Non-GAAP Financial Measures (continued)
26 T-Mobile US, Inc. Reconciliation of Non-GAAP Financial Measures to GAAP Financial Measures (continued) (Unaudited) Net debt (excluding tower obligations) to the last twelve months Adjusted EBITDA ratios is calculated as follows: Mar 31, Jun 30, Sep 30, Dec 31, Mar 31, Jun 30, Sep 30, (in millions
Slide 27: Free Cash Flow Guidance Reconciliation
27 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: H2 2020 Current Guidance (in millions) Range Net cash provided by operating activities $ 5,900 $ 6,100 Cash pu
Slide 28: Reconciliations to Beginning Customers and Accounts
28 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 29: Pro Forma Income Statement Metrics
29 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 30: Pro Forma Income Statement Metrics (Continued)
30 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 31: Pro Forma Income Statement Metrics (Continued)
31 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 periods ended September 30, 2019, and Marc
Slide 32: Definitions of Terms
32 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 33: Cautionary Statement Regarding Forward-Looking Statements
33 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.’