T-mobile Us, Inc. · NASDAQ:TMUS
T-mobile Us — Q2 2021 Earnings Presentation
34 slides from T-mobile Us's earnings presentation, Jul 29, 2021
Slide 1: Together We Are Unstoppable: Investor Factbook Q2 2021
TOGETHER WE ARE UNSTOPPABLE _INVESTOR wf ew FACTBOOK Q2 2021
Slide 2: Table of 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 Unless otherwise noted, historical results for T-Mobile from the close of the merger (“Merger”) with Sprint Corporat
Slide 3: T-Mobile Raises 2021 Guidance Across the Board Again and Delivers Record Financial Results in Q2
3 T-Mobile Raises 2021 Guidance Across the Board Again and Delivers Record Financial Results in Q2 Industry-Leading Growth in Service Revenues, Profitability and Cash Flow Consistent and Profitable Customer Growth • Postpaid net additions of 1.3 million, best in industry and raising 2021 guidance •
Slide 4: Total Postpaid Net Additions and Postpaid Phone Churn
4 Total Postpaid Net Additions Postpaid phone net customer additions were 627 (in thousands) thousand in Q2 2021, compared to 773 thousand in Q1 2021 and 253 thousand in Q2 2020. ▪ Sequentially, the decrease was primarily due to lower 1,979 gross additions, driven by a continued disciplined approach
Slide 5: Postpaid Phone ARPU and Postpaid Accounts & ARPA
5 Postpaid Phone ARPU Postpaid phone ARPU was $47.61 in Q2 2021, up 0.7% from $47.30 in Q1 2021 and down 0.8% from $47.99 in Q2 2020. ▪ Sequentially, the increase was primarily due to higher premium services including Magenta MAX. $47.99 $48.55 ▪ 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 76 thousand in Q2 2021, compared to net additions of 151 thousand in Q1 2021 (in thousands) and net additions of 133 thousand in Q2 2020. ▪ Sequentially, the decrease was primarily due to lower gross additions, partially offset by low
Slide 7: Service Revenues and Equipment Revenues
7 Service Revenues Service revenues were $14.5 billion in Q2 2021, up 2% from $14.2 billion in Q1 2021 and up 10% from $13.2 billion ($ in millions) in Q2 2020. ▪ Sequentially, the increase was primarily driven by an increase in Postpaid revenues due to higher average postpaid accounts and higher po
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- amortization (D&A), was $3.5 billion in Q2 2021, up 3% related costs) from $3.4 billion in Q1 2021 and up 13% from $3.1 billion in $3,827 Q2 2020. $3,314 $3,384 $3,491
Slide 9: SG&A Expense and Depreciation & Amortization
9 Selling, General and Administrative Selling, general and administrative (SG&A) expense was $4.8 billion in Q2 2021, essentially flat compared to (SG&A) Expense $4.8 billion in Q1 2021 and down 14% from $5.6 billion in ($ in millions, % of Service revs excl. Merger- Q2 2020. related and COVID-19-re
Slide 10: Net Income and Diluted Earnings Per Share
10 Net Income Net income was $978 million in Q2 2021, up 5% from $933 ($ in millions) million in Q1 2021 and up 789% from $110 million in Q2 2020. Diluted EPS was $0.78 in Q2 2021, up from $0.74 in Q1 2021 and up from $0.09 in Q2 2020. ▪ Sequentially, the increase in Net income and diluted EPS $1,25
Slide 11: Core Adjusted EBITDA and Net Cash Provided by Operating Activities
11 Core Adjusted EBITDA Core Adjusted EBITDA was $6.0 billion in Q2 2021, up 2% ($ in millions, % of Service Revs) from $5.9 billion in Q1 2021 and up 7% from $5.6 billion in Q2 2020. ▪ Sequentially, the increase was primarily due to higher $5,864 $5,992 $5,779 Service revenues and lower SG&A expens
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 $3.3 billion in Q2 2021, compared to $3.2 billion in Q1 2021 and Equipment $2.3 billion in Q2 2020. Capitalized interest included in cash ($ in millions, % of Service Revenues) purchases of property and equipment was $57
Slide 13: Net Debt and Net Debt to LTM Pro Forma Core Adj. EBITDA Ratio
13 Net Debt (Excluding Tower Total debt, excluding tower obligations, at the end of Q2 2021 was $77.7 billion. Obligations) & Net Debt to LTM Pro Forma Core Adj. EBITDA Ratio Net debt, excluding tower obligations, at the end of Q2 ($ in billions) 2021 was $69.9 billion. ▪ The ratio of net debt, excl
Slide 14: 5G Network Leadership
5G Network Leadership Well Ahead in Our 5G Leadership 5G — RANGE o G 1 7M soca “th sia 9G ak Dore and gency Wave MORE 5G geographic coverage AC yp. | BI { ' ™| 7 . ( \ 350 Mbps 2. Download Speeds Current Mid-Band Holdings after Clearance, 2024+ == than Verizon and AT&T combined National Averages | C
Slide 15: 5G Network Leadership: Largest, Fastest, Most Reliable
-/* 5G Network Leadership 15 America’s largest, fastest and most reliable 5G network LARGEST Ookla, a leader in mobile network testing and data analysis, confirms T-Mobile’s 5G network covers 92% of all Interstate Highway miles across America compared to 68% for AT&T and 51% for Verizon. OOKLA FASTE
Slide 16: Merger-Related Synergies and Integration
16 T-Mobile raised 2021 Merger synergies guidance for the second quarter in a row. The company expects Merger synergies to be $2.9 billion to $3.2 Improvements for billion in 2021, more than doubling the $1.3 billion delivered in 2020 Sprint customers and an increase from its prior guidance of $2.8
Slide 17: 2021 Outlook
17 2021 Outlook Metric Previous Revised Change at Midpoint Postpaid net customer additions 4.4 to 4.9 million 5.0 to 5.3 million 500 thousand Net income (1) N/A N/A N/A Core Adjusted EBITDA (2) $22.8 to $23.2 billion $23.0 to $23.3 billion $150 million Merger synergies $2.8 to $3.1 billion $2.9 to $
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) June 30, 2021 December 31, 2020 Assets Current assets Cash and cash equivalents $ 7,793 $ 10,385 Accounts receivable, net of allowance for credit losses of $123 and $194 4,528 4,2
Slide 20: Condensed Consolidated Statements of Comprehensive Income
20 T-Mobile US, Inc. Condensed Consolidated Statements of Comprehensive Income (Unaudited) Three Months Ended Six Months Ended June 30, June 30, March 31, June 30, (in millions, except share and per share amounts) 2021 2021 2020 2021 2020 Revenues Postpaid revenues $ 10,492 $ 10,303 $ 9,959 $ 20,795
Slide 21: Condensed Consolidated Statements of Cash Flows
21 T-Mobile US, Inc. Condensed Consolidated Statements of Cash Flows (Unaudited) Three Months Ended Six Months Ended June 30, June 30, March 31, June 30, (in millions) 2021 2021 2020 2021 2020 Operating activities Net income $ 978 $ 933 $ 110 $ 1,911 $ 1,061 Adjustments to reconcile net income to ne
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 Six Months Ended June 30, June 30, March 31, June 30, (in millions) 2021 2021 2020 2021 2020 Supplemental disclosure of cash flow information Interest payments, net of amounts capitalized
Slide 23: Supplementary Operating and Financial Data
23 T-Mobile US, Inc. Supplementary Operating and Financial Data (Unaudited) Six Months Ended Quarter June 30, (in thousands) Q1 2020 Q2 2020 Q3 2020 Q4 2020 Q1 2021 Q2 2021 2020 2021 Customers, end of period Postpaid phone customers (1)(2) 40,797 65,105 65,794 66,618 67,402 68,029 65,105 68,029 Post
Slide 24: Supplementary Operating and Financial Data (continued)
24 T-Mobile US, Inc. Supplementary Operating and Financial Data (continued) (Unaudited) Six Months Ended Quarter June 30, (in millions, except percentages) Q1 2020 Q2 2020 Q3 2020 Q4 2020 Q1 2021 Q2 2021 2020 2021 Financial Measures Service revenues $ 8,846 $13,230 $14,139 $14,180 $14,192 $14,492 $2
Slide 25: Calculation of Operating Measures
25 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: Six Months Ended Quarter June 30, (in millions, except average number of accounts and customers, ARPA and ARPU
Slide 26: Reconciliation of Non-GAAP Financial Measures to GAAP
26 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 27: Reconciliation of Non-GAAP Financial Measures (continued)
27 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 28: Reconciliation of Non-GAAP Financial Measures (continued)
28 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 $ 13,600 $ 13,900 Cash
Slide 29: Reconciliations to Beginning Customers and Accounts
29 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 30: Pro Forma Income Statement Metrics
30 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 31: Pro Forma Income Statement Metrics (Continued)
31 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 32: Pro Forma Income Statement Metrics (Continued)
32 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 33: Definitions of Terms
33 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 34: Cautionary Statement Regarding Forward-Looking Statements
34 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.’