(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 are non-GAAP financial measures. These non-GAAP financial measures should be considered in addition to, but not as a substitute for, the information provided in accordance with GAAP. Reconciliations for these non-GAAP financial measures to the most directly comparable GAAP financial measures are provided in the Reconciliation of Non-GAAP Financial Measures to GAAP Financial Measures tables. We are not able to forecast Net income on a forward-looking basis without unreasonable efforts due to the high variability and difficulty in predicting certain items that affect Net income, including, but not limited to, Income tax expense and Interest expense. Core Adjusted EBITDA should not be used to predict Net income as the difference between this measure and Net income is variable.
4
Postpaid Accounts
(in thousands)
Year-Over-Year
Continued growth in Postpaid accounts with a decrease in net additions primarily due to:
■Fewer High Speed Internet only additions due to the sunsetting of promotional pricing
Sequential
Continued growth in Postpaid accounts with an increase in net additions primarily due to:
■Seasonally higher gross additions
■Mostly offset by seasonally higher deactivations
Year-Over-Year
Postpaid ARPA increased 4% primarily due to:
■Higher premium services, primarily high-end rate plans, net of contra revenues for content included in such plans, and discounts for specific affinity groups (55+, military, and first responders)
■An increase in customers per account, including continued adoption of High Speed Internet
■The impact from rate plan optimizations
■Partially offset by increased promotional activity and an increase in High Speed Internet only accounts
Postpaid phone ARPU increased 2% due to:
■Higher premium services, primarily high-end rate plans, net of contra revenues for content included in such plans, and discounts for specific affinity groups (55+, military, and first responders)
■The impact from rate plan optimizations
■Partially offset by increased promotional activity and growth in business customers with lower ARPU given larger account sizes
Sequential
Postpaid ARPA increased 2% due to:
■Higher premium services, primarily high-end rate plans, net of contra revenues for content included in such plans, and discounts for specific affinity groups (55+, military, and first responders)
■The impact from rate plan optimizations
■An increase in customers per account, including continued adoption of High Speed Internet
■Partially offset by increased promotional activity and an increase in High Speed Internet only accounts
Sequential
Postpaid phone ARPU increased 1% due to:
■The impact from rate plan optimizations
■Higher premium services, primarily high-end rate plans, net of contra revenues for content included in such plans, and discounts for specific affinity groups (55+, military, and first responders)
■Partially offset by increased promotional activity
Postpaid ARPA & Postpaid Phone ARPU
5
Postpaid Customers
(in thousands)
Year-Over-Year
Postpaid phone net customer additions increased primarily due to:
■Higher prepaid to postpaid migrations
■Lower churn
■Higher gross additions
■Partially offset by increased deactivations from a growing customer base
Postpaid other net customer additions increased primarily due to:
■Higher prior year deactivations of lower ARPU mobile internet devices in the educational sector that were activated during the Pandemic and no longer needed
■Partially offset by lower net additions from wearables and High Speed Internet
Sequential
Postpaid phone net customer additions increased due to:
■Seasonally higher gross additions
■Partially offset by seasonally higher churn
Postpaid other net customer additions increased primarily due to:
■Higher prior quarter deactivations of lower ARPU mobile internet devices in the educational sector that were activated during the Pandemic and no longer needed
■Partially offset by lower net additions from wearables
Year-Over-Year
Postpaid phone churn decreased 1 basis point.
Sequential
Postpaid phone churn increased 6 basis points primarily due to:
■Seasonal trends
Postpaid Phone Churn
6
Prepaid Customers
(in thousands)
During Q2 2024, we acquired 3.5 million prepaid customers, net of certain base adjustments, through the acquisition of Mint Mobile and Ultra Mobile.
Year-Over-Year
Prepaid net customer additions decreased primarily due to:
■Continued moderation of prepaid industry growth
■Higher prepaid to postpaid migrations
■Lower net additions from High Speed Internet
■Partially offset by higher net additions following the acquisition of Mint Mobile and Ultra Mobile
Sequential
Prepaid net customer additions decreased primarily due to:
■Continued moderation of prepaid industry growth and higher seasonal churn
■Partially offset by higher net additions from a full quarter of Mint Mobile and Ultra Mobile operations
Year-Over-Year
High Speed Internet net customer additions decreased primarily due to:
■Increased deactivations from a growing customer base
■Lower gross additions driven by sunsetting of promotional pricing
■Partially offset by a lower churn rate
Sequential
High Speed Internet net customer additions increased primarily due to:
■Higher gross additions
■Mostly offset by increased deactivations
High Speed Internet Customers
(in thousands)
7
Service Revenues
($ in millions)
Year-Over-Year
Service revenues increased 5% primarily due to:
■Increase in Postpaid service revenues
■An increase in Prepaid service revenues, primarily driven by the impact of the acquisition of Mint Mobile and Ultra Mobile
■Partially offset by a decrease in Wholesale and other service revenues, primarily driven by lower MVNO revenues, including the impact of the of acquisition of Mint Mobile and Ultra Mobile and lower Affordable Connectivity Program and Lifeline revenues
Sequential
Service revenues increased 2% primarily due to:
■Increase in Postpaid service revenues
■An increase in Prepaid service revenues, primarily driven by the impact of the acquisition of Mint Mobile and Ultra Mobile
■Partially offset by a decrease in Wholesale and other service revenues driven primarily by lower Affordable Connectivity Program revenues and the impact of the acquisition of Mint Mobile and Ultra Mobile
Year-Over-Year
Postpaid service revenues increased 8% primarily due to:
■Higher postpaid ARPA
■Higher average postpaid accounts
Sequential
Postpaid service revenues increased 3% primarily due to:
■Higher postpaid ARPA
■Higher average postpaid accounts
Postpaid Service Revenues
($ in millions)
8
Equipment Revenues
($ in millions)
Year-Over-Year
Equipment revenues increased 4% primarily due to:
■A higher average revenue per device sold, net of promotions, primarily driven by an increase in the high-end phone mix
■Higher liquidation revenue primarily due to a higher number of in-house liquidated devices, including the impact from the transition of certain device recovery programs from external sources to in-house processing resulting in a change in presentation from Other revenues to Equipment revenues
■Partially offset by a net decrease in the total number of devices sold, driven by lower Assurance Wireless and prepaid devices, partially offset by higher postpaid devices
Sequential
Equipment revenues increased 3% primarily due to:
■A higher average revenue per device sold, net of promotions, primarily due to a seasonal increase in the high-end phone mix
■Slightly offset by a net decrease in the total number of devices sold, driven by lower Assurance Wireless sales which were mostly offset by a higher number of postpaid devices sold due to seasonality
Year-Over-Year
Cost of equipment sales, exclusive of Depreciation and Amortization (D&A), increased 1% due to:
■A higher average cost per device sold, primarily driven by an increase in the high-end phone mix
■Higher liquidation costs primarily due to a higher number of in-house liquidated devices, including the impact from the transition of certain device recovery programs from external sources to in-house processing
■Mostly offset by a net decrease in the total number of devices sold, driven by lower Assurance Wireless and prepaid devices, partially offset by higher postpaid devices
Sequential
Cost of equipment sales, exclusive of D&A, increased 5% primarily due to:
■A higher average cost per device sold due to a seasonal increase in the high-end phone mix
Sequential
■Slightly offset by a net decrease in the total number of devices sold, driven by lower Assurance Wireless sales which were mostly offset by a higher number of postpaid devices sold due to seasonality
Cost of Equipment Sales, exclusive of D&A
($ in millions)
9
Cost of Services, exclusive of D&A
($ in millions, % of Service revenues)
Year-Over-Year
Cost of services, exclusive of D&A, decreased 6% primarily due to:
■Prior year severance and related costs of $140 million
■Prior year Merger-related costs related to network decommissioning and integration
■Higher Merger synergies
■Partially offset by higher site costs related to the continued build-out of our nationwide 5G network
Sequential
Cost of services, exclusive of D&A, increased 2%, or $58 million.
Year-Over-Year
SG&A expense decreased 3% primarily due to:
■Prior year severance and related costs of $331 million
■Higher Merger synergies
■Partially offset by higher costs as the result of the acquisition of Mint Mobile and Ultra Mobile
Sequential
SG&A expense increased slightly primarily due to:
■A $100 million gain recognized in the prior quarter for the extension fee previously paid by DISH pursuant to the license purchase agreement for 800 MHz spectrum, which was not purchased
Selling, General and Administrative (SG&A) Expense
($ in millions, % of Service revenues)
10
Net Income
($ in millions, % of Service revenues)
Diluted Earnings Per Share
(Diluted EPS)
Year-Over-Year
Net income was $3.1 billion and Diluted earnings per share was $2.61 in Q3 2024, compared to $2.1 billion and $1.82 in Q3 2023, primarily due to the factors described above and included the following, net of tax:
■Merger-related costs of $114 million, or $0.10 per share, in Q3 2023
■Severance and related costs of $353 million or $0.30 per share, in Q3 2023
Sequential
Net income was $3.1 billion and Diluted earnings per share was $2.61 in Q3 2024, compared to $2.9 billion and $2.49 in Q2 2024, primarily due to the factors described above.
11
Core Adjusted EBITDA*
($ in millions, % of Service revenues)
*Excludes Special Items (see detail on page 23)
Year-Over-Year
Core Adjusted EBITDA increased 9% primarily due to:
■Partially offset by higher Cost of equipment sales
Year-Over-Year
Net cash provided by operating activities increased 16% primarily due to:
■Higher Net income, adjusted for non-cash income and expenses
■Partially offset by higher net cash outflows from changes in working capital
Sequential
Net cash provided by operating activities increased 11% primarily due to:
■Lower net cash outflows from changes in working capital
■Higher Net income, adjusted for non-cash income and expenses
The impact of net payments for Merger-related costs on Net cash provided by operating activities was $124 million in Q3 2024 compared to $241 million in Q2 2024 and $345 million in Q3 2023.
Effective November 1, 2024, following amendments to the company’s Equipment Installment Plan Sale and Service Receivable Sale arrangements, all cash proceeds associated with the sale of such receivables, a portion of which is currently recognized as Proceeds related to beneficial interests in securitization transactions within investing cash flows, will be recognized as operating cash flows. These amendments will not have a net impact on Adjusted Free Cash Flow.
Net Cash Provided by Operating Activities
($ in millions)
12
Cash Purchases of Property and Equipment, incl. Capitalized Interest
($ in millions, % of Service revenues)
Year-Over-Year
Cash purchases of property and equipment, including capitalized interest, decreased 19% primarily due to:
■Increased capital efficiencies from accelerated investments in our nationwide 5G network build-out in previous years
Sequential
Cash purchases of property and equipment, including capitalized interest, decreased 4% primarily due to:
■Planned timing of capital purchases
Year-Over-Year
Adjusted Free Cash Flow increased 29% primarily due to:
■Higher Net cash provided by operating activities
■Lower Cash purchases of property and equipment
■Partially offset by lower proceeds related to securitization transactions, which were offset in Net cash provided by operating activities. There were no significant net cash proceeds during the quarter from securitization.
Sequential
Adjusted Free Cash Flow increased 16% primarily due to:
■Higher Net cash provided by operating activities
The impact of net payments for Merger-related costs on Adjusted Free Cash Flow was $124 million in Q3 2024 compared to $241 million in Q2 2024 and $345 million in Q3 2023.
Adjusted Free Cash Flow
($ in millions)
13
Net Debt (Excluding Tower Obligations) & Net Debt to LTM Net Income and Core Adj. EBITDA Ratios
($ in billions)
Stockholder Returns
($ in millions)
Total debt, excluding tower obligations, at the end of Q3 2024 was $82.3 billion.
Net debt, excluding tower obligations, at the end of Q3 2024 was $72.6 billion.
■On September 6, 2023, the Board of Directors authorized a stockholder return program for up to $19.0 billion that will run through December 31, 2024, consisting of additional repurchases of shares and payment of cash dividends.
■During Q3 2024, 3.2 million shares were repurchased for $644 million.
■On a cumulative basis, as of September 30, 2024, a total of 153.4 million shares were repurchased for approximately $22.7 billion.
■During Q3 2024, the company paid a cash dividend of $0.65 per each share of common stock, or approximately $758 million, on September 12, 2024.
■As of September 30, 2024, the remaining authorization for stock repurchases and quarterly cash dividends through December 2024 is $7.3 billion, with the next dividend payable on December 12, 2024.
14
2024 Outlook
Metric
Previous
Revised
Change at Midpoint
Postpaid net customer additions
5.4 to 5.7 million
5.6 to 5.8 million
150 thousand
Net income (1)
N/A
N/A
N/A
Effective tax rate
24% to 25%
~24%
(50) bps
Core Adjusted EBITDA (2)
$31.5 to $31.8 billion
$31.6 to $31.8 billion
$50 million
Net cash provided by operating activities
$21.8 to $22.2 billion
$22.0 to $22.3 billion
$150 million
Capital expenditures (3)
$8.7 to $9.1 billion
$8.8 to $9.0 billion
No change
Adjusted Free Cash Flow (4)
$16.6 to $17.0 billion
$16.7 to $17.0 billion
$50 million
(1)We are not able to forecast Net income on a forward-looking basis without unreasonable efforts due to the high variability and difficulty in predicting certain items that affect GAAP Net income, including, but not limited to, Income tax expense and Interest expense. Core Adjusted EBITDA should not be used to predict Net income as the difference between this measure and Net income is variable.
(2)Management uses Core Adjusted EBITDA as a measure to monitor the financial performance of our operations, excluding the impact of lease revenues from our related device financing programs. Our guidance ranges assume lease revenues of approximately $100 million for 2024.
(3)Capital expenditures means cash purchases of property and equipment, including capitalized interest.
(4)Adjusted Free Cash Flow guidance does not assume any material net cash inflows from securitization in 2024.
15
Investor Relations
Cathy Yao
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
investor.relations@t-mobile.com
https://investor.t-mobile.com
16
T-Mobile US, Inc.
Condensed Consolidated Balance Sheets
(Unaudited)
(in millions, except share and per share amounts)
September 30, 2024
December 31, 2023
Assets
Current assets
Cash and cash equivalents
$
9,754
$
5,135
Accounts receivable, net of allowance for credit losses of $162 and $161
4,286
4,692
Equipment installment plan receivables, net of allowance for credit losses and imputed discount of $575 and $623
3,595
4,456
Inventory
1,789
1,678
Prepaid expenses
953
702
Other current assets
2,154
2,352
Total current assets
22,531
19,015
Property and equipment, net
37,603
40,432
Operating lease right-of-use assets
25,833
27,135
Financing lease right-of-use assets
3,352
3,270
Goodwill
13,015
12,234
Spectrum licenses
98,736
96,707
Other intangible assets, net
2,762
2,618
Equipment installment plan receivables due after one year, net of allowance for credit losses and imputed discount of $130 and $150
1,752
2,042
Other assets
5,158
4,229
Total assets
$
210,742
$
207,682
Liabilities and Stockholders' Equity
Current liabilities
Accounts payable and accrued liabilities
$
7,496
$
10,373
Short-term debt
5,851
3,619
Deferred revenue
1,125
825
Short-term operating lease liabilities
3,328
3,555
Short-term financing lease liabilities
1,252
1,260
Other current liabilities
1,903
1,296
Total current liabilities
20,955
20,928
Long-term debt
72,522
69,903
Long-term debt to affiliates
1,497
1,496
Tower obligations
3,695
3,777
Deferred tax liabilities
15,849
13,458
Operating lease liabilities
26,821
28,240
Financing lease liabilities
1,185
1,236
Other long-term liabilities
3,968
3,929
Total long-term liabilities
125,537
122,039
Commitments and contingencies
Stockholders' equity
Common stock, par value $0.00001 per share, 2,000,000,000 shares authorized; 1,270,824,969 and 1,262,904,154 shares issued, 1,164,613,922 and 1,195,807,331 shares outstanding
—
—
Additional paid-in capital
68,659
67,705
Treasury stock, at cost, 106,211,047 and 67,096,823 shares issued
(15,921)
(9,373)
Accumulated other comprehensive loss
(889)
(964)
Retained earnings
12,401
7,347
Total stockholders' equity
64,250
64,715
Total liabilities and stockholders' equity
$
210,742
$
207,682
17
T-Mobile US, Inc.
Condensed Consolidated Statements of Comprehensive Income
(Unaudited)
Three Months Ended
Nine Months Ended September 30,
(in millions, except share and per share amounts)
September 30, 2024
June 30, 2024
September 30, 2023
2024
2023
Revenues
Postpaid revenues
$
13,308
$
12,899
$
12,288
$
38,838
$
36,220
Prepaid revenues
2,716
2,592
2,473
7,711
7,334
Wholesale and other service revenues
701
938
1,153
2,701
3,644
Total service revenues
16,725
16,429
15,914
49,250
47,198
Equipment revenues
3,207
3,106
3,076
9,564
9,964
Other revenues
230
237
262
714
918
Total revenues
20,162
19,772
19,252
59,528
58,080
Operating expenses
Cost of services, exclusive of depreciation and amortization shown separately below
2,722
2,664
2,886
8,074
8,863
Cost of equipment sales, exclusive of depreciation and amortization shown separately below
4,307
4,088
4,249
12,794
12,925
Selling, general and administrative
5,186
5,142
5,334
15,466
16,031
Gain on disposal group held for sale
—
—
—
—
(25)
Depreciation and amortization
3,151
3,248
3,187
9,770
9,500
Total operating expenses
15,366
15,142
15,656
46,104
47,294
Operating income
4,796
4,630
3,596
13,424
10,786
Other expense, net
Interest expense, net
(836)
(854)
(790)
(2,570)
(2,486)
Other income (expense), net
7
(8)
41
19
56
Total other expense, net
(829)
(862)
(749)
(2,551)
(2,430)
Income before income taxes
3,967
3,768
2,847
10,873
8,356
Income tax expense
(908)
(843)
(705)
(2,515)
(2,053)
Net income
$
3,059
$
2,925
$
2,142
$
8,358
$
6,303
Net income
$
3,059
$
2,925
$
2,142
$
8,358
$
6,303
Other comprehensive income, net of tax
Reclassification of loss from cash flow hedges, net of tax effect of $15, $15, $15, $45 and $42
44
43
41
130
121
Net unrealized loss on fair value hedges, net of tax effect of $(5), $(10), $0, $(15) and $0
(12)
(30)
—
(42)
—
Unrealized gain on foreign currency translation adjustment, net of tax effect of $0, $0, $0, $0 and $0
—
—
—
—
9
Amortization of actuarial gain, net of tax effect of $(2), $(1), $(11), $(5) and $(11)
(4)
(4)
(33)
(13)
(33)
Other comprehensive income
28
9
8
75
97
Total comprehensive income
$
3,087
$
2,934
$
2,150
$
8,433
$
6,400
Earnings per share
Basic
$
2.62
$
2.50
$
1.83
$
7.12
$
5.28
Diluted
$
2.61
$
2.49
$
1.82
$
7.10
$
5.26
Weighted-average shares outstanding
Basic
1,166,961,755
1,170,025,862
1,171,336,373
1,174,069,336
1,194,497,722
Diluted
1,170,649,561
1,172,447,353
1,174,390,472
1,177,637,145
1,198,290,141
18
T-Mobile US, Inc.
Condensed Consolidated Statements of Cash Flows
(Unaudited)
Three Months Ended
Nine Months Ended September 30,
(in millions)
September 30, 2024
June 30, 2024
September 30, 2023
2024
2023
Operating activities
Net income
$
3,059
$
2,925
$
2,142
$
8,358
$
6,303
Adjustments to reconcile net income to net cash provided by operating activities
Depreciation and amortization
3,151
3,248
3,187
9,770
9,500
Stock-based compensation expense
170
164
156
474
500
Deferred income tax expense
817
747
671
2,279
1,985
Bad debt expense
299
255
228
836
663
Losses from sales of receivables
23
25
46
69
135
Loss on remeasurement of disposal group held for sale
—
—
—
—
9
Changes in operating assets and liabilities
Accounts receivable
(734)
(1,286)
(1,046)
(2,436)
(3,828)
Equipment installment plan receivables
(72)
155
165
360
563
Inventory
(448)
221
(309)
(57)
182
Operating lease right-of-use assets
877
872
886
2,605
2,823
Other current and long-term assets
(19)
(416)
(135)
(275)
77
Accounts payable and accrued liabilities
(165)
38
208
(1,861)
(1,538)
Short- and long-term operating lease liabilities
(805)
(1,148)
(692)
(2,970)
(2,884)
Other current and long-term liabilities
(125)
(360)
(260)
(657)
(909)
Other, net
111
81
47
249
119
Net cash provided by operating activities
6,139
5,521
5,294
16,744
13,700
Investing activities
Purchases of property and equipment, including capitalized interest of $(9), $(8), $(66), $(26) and $(94)
(1,961)
(2,040)
(2,424)
(6,628)
(8,214)
Purchases of spectrum licenses and other intangible assets, including deposits
(2,419)
(156)
(119)
(2,636)
(225)
Proceeds from sales of tower sites
—
—
2
—
10
Proceeds related to beneficial interests in securitization transactions
984
958
1,131
2,832
3,785
Acquisition of companies, net of cash acquired
—
(390)
—
(390)
—
Other, net
89
(50)
17
50
36
Net cash used in investing activities
(3,307)
(1,678)
(1,393)
(6,772)
(4,608)
Financing activities
Proceeds from issuance of long-term debt
2,480
2,136
1,983
8,089
8,446
Repayments of financing lease obligations
(347)
(351)
(304)
(1,025)
(914)
Repayments of long-term debt
(223)
(2,723)
(4,474)
(3,169)
(4,828)
Repurchases of common stock
(560)
(2,387)
(2,681)
(6,541)
(10,891)
Dividends on common stock
(758)
(759)
—
(2,286)
—
Tax withholdings on share-based awards
(36)
(16)
(10)
(244)
(267)
Other, net
(49)
(34)
(24)
(117)
(113)
Net cash provided by (used in) financing activities
507
(4,134)
(5,510)
(5,293)
(8,567)
Change in cash and cash equivalents, including restricted cash and cash held for sale
3,339
(291)
(1,609)
4,679
525
Cash and cash equivalents, including restricted cash and cash held for sale
Beginning of period
6,647
6,938
6,808
5,307
4,674
End of period
$
9,986
$
6,647
$
5,199
$
9,986
$
5,199
19
T-Mobile US, Inc.
Condensed Consolidated Statements of Cash Flows (Continued)
(Unaudited)
Three Months Ended
Nine Months Ended September 30,
(in millions)
September 30, 2024
June 30, 2024
September 30, 2023
2024
2023
Supplemental disclosure of cash flow information
Interest payments, net of amounts capitalized
$
947
$
935
$
915
$
2,778
$
2,651
Operating lease payments
1,127
1,457
1,037
3,928
3,834
Income tax payments
50
107
4
164
126
Non-cash investing and financing activities
Non-cash beneficial interest obtained in exchange for securitized receivables
$
789
$
833
$
920
$
2,283
$
3,148
Change in accounts payable and accrued liabilities for purchases of property and equipment
41
(232)
(459)
(1,085)
(1,196)
Operating lease right-of-use assets obtained in exchange for lease obligations
469
344
563
1,300
1,676
Financing lease right-of-use assets obtained in exchange for lease obligations
409
311
398
983
961
Contingent and other deferred consideration related to the Ka’ena Acquisition
—
210
—
210
—
20
T-Mobile US, Inc.
Supplementary Operating and Financial Data
(Unaudited)
Quarter
Nine Months Ended September 30,
(in thousands)
Q1 2023
Q2 2023
Q3 2023
Q4 2023
Q1 2024
Q2 2024
Q3 2024
2023
2024
Customers, end of period
Postpaid phone customers (1)
73,372
74,132
74,982
75,936
76,468
77,245
78,110
74,982
78,110
Postpaid other customers (1)
20,153
20,954
21,330
22,116
22,804
23,365
24,075
21,330
24,075
Total postpaid customers
93,525
95,086
96,312
98,052
99,272
100,610
102,185
96,312
102,185
Prepaid customers (2)
21,392
21,516
21,595
21,648
21,600
25,283
25,307
21,595
25,307
Total customers
114,917
116,602
117,907
119,700
120,872
125,893
127,492
117,907
127,492
Adjustments to customers (1) (2)
—
—
—
170
—
3,504
—
—
3,504
(1)In the fourth quarter of 2023, we recognized an additional base adjustment to increase postpaid phone customers by 20,000 and increase postpaid other customers by 150,000 due to fewer customers than expected whose service was deactivated as a result of the network shutdowns.
(2)In the second quarter of 2024, we acquired 3,504,000 prepaid customers through our acquisition of Ka’ena, which includes the impact of certain base adjustments to align the policies of Ka’ena and T-Mobile.
Quarter
Nine Months Ended September 30,
(in thousands)
Q1 2023
Q2 2023
Q3 2023
Q4 2023
Q1 2024
Q2 2024
Q3 2024
2023
2024
Net customer additions (losses)
Postpaid phone customers
538
760
850
934
532
777
865
2,148
2,174
Postpaid other customers
755
801
376
636
688
561
710
1,932
1,959
Total postpaid customers
1,293
1,561
1,226
1,570
1,220
1,338
1,575
4,080
4,133
Prepaid customers
26
124
79
53
(48)
179
24
229
155
Total net customer additions
1,319
1,685
1,305
1,623
1,172
1,517
1,599
4,309
4,288
Migrations from prepaid to postpaid plans
145
140
155
170
145
140
175
440
460
Quarter
Nine Months Ended September 30,
Q1 2023
Q2 2023
Q3 2023
Q4 2023
Q1 2024
Q2 2024
Q3 2024
2023
2024
Churn
Postpaid phone churn
0.89
%
0.77
%
0.87
%
0.96
%
0.86
%
0.80
%
0.86
%
0.84
%
0.84
%
Prepaid churn
2.76
%
2.62
%
2.81
%
2.86
%
2.75
%
2.54
%
2.78
%
2.73
%
2.69
%
Quarter
Nine Months Ended September 30,
Q1 2023
Q2 2023
Q3 2023
Q4 2023
Q1 2024
Q2 2024
Q3 2024
2023
2024
Postpaid upgrade rate
Postpaid device upgrade rate
3.2
%
2.6
%
2.7
%
3.2
%
2.4
%
2.3
%
2.6
%
8.5
%
7.5
%
21
T-Mobile US, Inc.
Supplementary Operating and Financial Data
(Unaudited)
Quarter
Nine Months Ended September 30,
(in thousands)
Q1 2023
Q2 2023
Q3 2023
Q4 2023
Q1 2024
Q2 2024
Q3 2024
2023
2024
Accounts, end of period
Total postpaid customer accounts
28,813
29,112
29,498
29,797
30,015
30,316
30,631
29,498
30,631
Quarter
Nine Months Ended September 30,
(in thousands)
Q1 2023
Q2 2023
Q3 2023
Q4 2023
Q1 2024
Q2 2024
Q3 2024
2023
2024
Net account additions
Postpaid net account additions
287
299
386
299
218
301
315
972
834
Quarter
Nine Months Ended September 30,
(in thousands)
Q1 2023
Q2 2023
Q3 2023
Q4 2023
Q1 2024
Q2 2024
Q3 2024
2023
2024
High speed internet customers, end of period
Postpaid high speed internet customers
2,855
3,302
3,807
4,288
4,634
4,992
5,377
3,807
5,377
Prepaid high speed internet customers
314
376
428
488
547
595
625
428
625
Total high speed internet customers, end of period
3,169
3,678
4,235
4,776
5,181
5,587
6,002
4,235
6,002
Quarter
Nine Months Ended September 30,
(in thousands)
Q1 2023
Q2 2023
Q3 2023
Q4 2023
Q1 2024
Q2 2024
Q3 2024
2023
2024
High speed internet - net customer additions
Postpaid high speed internet customers
445
447
505
481
346
358
385
1,397
1,089
Prepaid high speed internet customers
78
62
52
60
59
48
30
192
137
Total high speed internet net customer additions
523
509
557
541
405
406
415
1,589
1,226
Quarter
Nine Months Ended September 30,
(in millions)
Q1 2023
Q2 2023
Q3 2023
Q4 2023
Q1 2024
Q2 2024
Q3 2024
2023
2024
Device financing - equipment installment plans
Gross EIP financed
$
3,335
$
2,858
$
3,116
$
4,275
$
3,218
$
3,037
$
3,304
$
9,309
$
9,559
EIP billings
3,871
3,732
3,622
3,829
3,880
3,604
3,423
11,225
10,907
EIP receivables, net
7,262
6,745
6,349
6,498
5,967
5,556
5,347
6,349
5,347
Device financing - leased devices
Lease revenues
$
147
$
69
$
53
$
43
$
35
$
26
$
21
$
269
$
82
Leased device depreciation
58
46
37
29
22
15
11
141
48
Quarter
Nine Months Ended September 30,
(in dollars)
Q1 2023
Q2 2023
Q3 2023
Q4 2023
Q1 2024
Q2 2024
Q3 2024
2023
2024
Operating measures
Postpaid ARPA
$
138.04
$
138.94
$
139.83
$
140.23
$
140.88
$
142.54
$
145.60
$
138.94
$
143.02
Postpaid phone ARPU
48.63
48.84
48.93
48.91
48.79
49.07
49.79
48.80
49.22
Prepaid ARPU
37.98
37.98
38.18
37.55
37.18
35.94
35.81
38.05
36.27
22
T-Mobile US, Inc.
Supplementary Operating and Financial Data (continued)
(Unaudited)
Quarter
Nine Months Ended September 30,
(in millions, except percentages)
Q1 2023
Q2 2023
Q3 2023
Q4 2023
Q1 2024
Q2 2024
Q3 2024
2023
2024
Financial measures
Service revenues
$
15,546
$
15,738
$
15,914
$
16,043
$
16,096
$
16,429
$
16,725
$
47,198
$
49,250
Equipment revenues
$
3,719
$
3,169
$
3,076
$
4,174
$
3,251
$
3,106
$
3,207
$
9,964
$
9,564
Lease revenues
147
69
53
43
35
26
21
269
82
Equipment sales
$
3,572
$
3,100
$
3,023
$
4,131
$
3,216
$
3,080
$
3,186
$
9,695
$
9,482
Total revenues
$
19,632
$
19,196
$
19,252
$
20,478
$
19,594
$
19,772
$
20,162
$
58,080
$
59,528
Net income
$
1,940
$
2,221
$
2,142
$
2,014
$
2,374
$
2,925
$
3,059
$
6,303
$
8,358
Net income margin
12.5
%
14.1
%
13.5
%
12.6
%
14.7
%
17.8
%
18.3
%
13.4
%
17.0
%
Adjusted EBITDA
$
7,199
$
7,405
$
7,600
$
7,224
$
7,652
$
8,053
$
8,243
$
22,204
$
23,948
Adjusted EBITDA margin
46.3
%
47.1
%
47.8
%
45.0
%
47.5
%
49.0
%
49.3
%
47.0
%
48.6
%
Core Adjusted EBITDA
$
7,052
$
7,336
$
7,547
$
7,181
$
7,617
$
8,027
$
8,222
$
21,935
$
23,866
Core Adjusted EBITDA margin
45.4
%
46.6
%
47.4
%
44.8
%
47.3
%
48.9
%
49.2
%
46.5
%
48.5
%
Cost of services, exclusive of depreciation and amortization
$
3,061
$
2,916
$
2,886
$
2,792
$
2,688
$
2,664
$
2,722
$
8,863
$
8,074
Merger-related costs
208
178
120
146
107
73
—
506
180
Other Special Items
23
18
154
—
1
—
67
195
68
Cost of services, excluding depreciation and amortization and Special Items
$
2,830
$
2,720
$
2,612
$
2,646
$
2,580
$
2,591
$
2,655
$
8,162
$
7,826
Cost of equipment sales, exclusive of depreciation and amortization
$
4,588
$
4,088
$
4,249
$
5,608
$
4,399
$
4,088
$
4,307
$
12,925
$
12,794
Merger-related recoveries
(9)
—
(3)
—
—
—
—
(12)
—
Cost of equipment sales, excluding depreciation and amortization and Special Items
$
4,597
$
4,088
$
4,252
$
5,608
$
4,399
$
4,088
$
4,307
$
12,937
$
12,794
Selling, general and administrative
$
5,425
$
5,272
$
5,334
$
5,280
$
5,138
$
5,142
$
5,186
$
16,031
$
15,466
Merger-related costs (gain), net
159
98
35
102
23
(82)
—
292
(59)
Other Special Items
87
36
359
14
12
37
86
482
135
Selling, general and administrative, excluding Special Items
$
5,179
$
5,138
$
4,940
$
5,164
$
5,103
$
5,187
$
5,100
$
15,257
$
15,390
Total bad debt expense and losses from sales of receivables
$
260
$
264
$
274
$
265
$
303
$
280
$
322
$
798
$
905
Bad debt and losses from sales of receivables as a percentage of Total revenues
1.3
%
1.4
%
1.4
%
1.3
%
1.5
%
1.4
%
1.6
%
1.4
%
1.5
%
Cash purchases of property and equipment including capitalized interest
$
3,001
$
2,789
$
2,424
$
1,587
$
2,627
$
2,040
$
1,961
$
8,214
$
6,628
Capitalized interest
14
14
66
10
9
8
9
94
26
Net cash proceeds from securitization
$
(29)
$
(31)
$
(33)
$
(21)
$
(29)
$
(30)
$
(29)
$
(93)
$
(88)
Net cash payments for Merger-related costs
$
484
$
728
$
345
$
416
$
293
$
241
$
124
$
1,557
$
658
Quarter
Nine Months Ended September 30,
(in millions, except share and per share amounts)
Q1 2023
Q2 2023
Q3 2023
Q4 2023
Q1 2024
Q2 2024
Q3 2024
2023
2024
Stockholder returns
Total repurchases
$
4,766
$
3,525
$
2,675
$
2,241
$
3,568
$
2,277
$
644
$
10,966
$
6,489
Total shares repurchased
32,963,940
25,183,838
19,313,159
15,464,107
21,933,790
13,979,843
3,179,707
77,460,937
39,093,340
Average purchase price per share
$
144.57
$
140.00
$
138.48
$
144.95
$
162.69
$
162.85
$
202.45
$
141.57
$
165.98
Total dividends paid
$
—
$
—
$
—
$
747
$
769
$
759
$
758
$
—
$
2,286
Dividends per share
$
—
$
—
$
—
$
0.65
$
0.65
$
0.65
$
0.65
$
—
$
1.95
Total stockholder returns
$
4,766
$
3,525
$
2,675
$
2,988
$
4,337
$
3,036
$
1,402
$
10,966
$
8,775
Cumulative total repurchases
$
7,766
$
11,291
$
13,966
$
16,207
$
19,775
$
22,052
$
22,696
$
13,966
$
22,696
Cumulative shares repurchased
54,325,349
79,509,187
98,822,346
114,286,453
136,220,243
150,200,086
153,379,793
98,822,346
153,379,793
Cumulative stockholder returns
$
7,766
$
11,291
$
13,966
$
16,954
$
21,291
$
24,327
$
25,729
$
13,966
$
25,729
23
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 accordance with GAAP. Reconciliations for the non-GAAP financial measures to the most directly comparable GAAP financial measures are provided below. T-Mobile is not able to forecast Net income on a forward-looking basis without unreasonable efforts due to the high variability and difficulty in predicting certain items that affect GAAP net income, including, but not limited to, Income tax expense and Interest expense. Adjusted EBITDA and Core Adjusted EBITDA should not be used to predict Net income, as the difference between either of these measures and Net income is variable.
Adjusted EBITDA and Core Adjusted EBITDA are reconciled to Net income as follows:
Quarter
Nine Months Ended September 30,
(in millions, except percentages)
Q1 2023
Q2 2023
Q3 2023
Q4 2023
Q1 2024
Q2 2024
Q3 2024
2023
2024
Net income
$
1,940
$
2,221
$
2,142
$
2,014
$
2,374
$
2,925
$
3,059
$
6,303
$
8,358
Adjustments:
Interest expense, net
835
861
790
849
880
854
836
2,486
2,570
Other (income) expense, net
(9)
(6)
(41)
(12)
(20)
8
(7)
(56)
(19)
Income tax expense
631
717
705
629
764
843
908
2,053
2,515
Operating income
3,397
3,793
3,596
3,480
3,998
4,630
4,796
10,786
13,424
Depreciation and amortization
3,203
3,110
3,187
3,318
3,371
3,248
3,151
9,500
9,770
Stock-based compensation (1)
173
155
152
164
140
147
143
480
430
Merger-related costs (gain), net (2)
358
276
152
248
130
(9)
—
786
121
Legal-related (recoveries) expenses, net (3)
(43)
—
—
1
—
15
1
(43)
16
(Gain) loss on disposal group held for sale
(42)
17
—
—
—
—
—
(25)
—
Other, net (4)
153
54
513
13
13
22
152
720
187
Adjusted EBITDA
7,199
7,405
7,600
7,224
7,652
8,053
8,243
22,204
23,948
Lease revenues
(147)
(69)
(53)
(43)
(35)
(26)
(21)
(269)
(82)
Core Adjusted EBITDA
$
7,052
$
7,336
$
7,547
$
7,181
$
7,617
$
8,027
$
8,222
$
21,935
$
23,866
Net income margin (Net income divided by Service revenues)
12.5
%
14.1
%
13.5
%
12.6
%
14.7
%
17.8
%
18.3
%
13.4
%
17.0
%
Adjusted EBITDA margin (Adjusted EBITDA divided by Service revenues)
46.3
%
47.1
%
47.8
%
45.0
%
47.5
%
49.0
%
49.3
%
47.0
%
48.6
%
Core Adjusted EBITDA margin (Core Adjusted EBITDA divided by Service revenues)
45.4
%
46.6
%
47.4
%
44.8
%
47.3
%
48.9
%
49.2
%
46.5
%
48.5
%
(1)Stock-based compensation includes payroll tax impacts and may not agree to stock-based compensation expense on the Condensed Consolidated Financial Statements. Additionally, certain stock-based compensation expenses associated with the merger with Sprint Corporation (the “Merger”) have been included in Merger-related costs (gain), net.
(2)Merger-related costs (gain), net, for the nine months ended September 30, 2024, includes the $100 million gain recognized for the extension fee previously paid by DISH associated with the DISH License Purchase Agreement.
(3)Legal-related (recoveries) expenses, net, consists of the settlement of certain litigation associated with the August 2021 cyberattack and is presented net of insurance recoveries.
(4)Other, net, primarily consists of certain severance, restructuring and other expenses, gains and losses, including severance and related costs associated with the August 2023 workforce reduction, not directly attributable to the Merger which are not reflective of T-Mobile’s core business activities and are, therefore, excluded from Adjusted EBITDA and Core Adjusted EBITDA.
24
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:
(in millions, except net debt ratios)
Mar 31, 2023
Jun 30, 2023
Sep 30, 2023
Dec 31, 2023
Mar 31, 2024
Jun 30, 2024
Sep 30, 2024
Short-term debt
$
5,215
$
7,731
$
3,437
$
3,619
$
5,356
$
5,867
$
5,851
Short-term financing lease liabilities
1,180
1,220
1,286
1,260
1,265
1,252
1,252
Long-term debt
68,035
68,646
70,365
69,903
71,361
70,203
72,522
Long-term debt to affiliates
1,495
1,495
1,496
1,496
1,496
1,496
1,497
Financing lease liabilities
1,284
1,254
1,273
1,236
1,163
1,133
1,185
Less: Cash and cash equivalents
(4,540)
(6,647)
(5,030)
(5,135)
(6,708)
(6,417)
(9,754)
Net debt (excluding tower obligations)
$
72,669
$
73,699
$
72,827
$
72,379
$
73,933
$
73,534
$
72,553
Divided by: Last twelve months Net income
$
3,817
$
6,146
$
7,780
$
8,317
$
8,751
$
9,455
$
10,372
Net debt (excluding tower obligations) to LTM Net income Ratio
19.0
12.0
9.4
8.7
8.4
7.8
7.0
Divided by: Last twelve months Adjusted EBITDA
$
28,070
$
28,471
$
29,032
$
29,428
$
29,881
$
30,529
$
31,172
Net debt (excluding tower obligations) to LTM Adjusted EBITDA Ratio
2.6
2.6
2.5
2.5
2.5
2.4
2.3
Divided by: Last twelve months Core Adjusted EBITDA
$
26,980
$
27,698
$
28,517
$
29,116
$
29,681
$
30,372
$
31,047
Net debt (excluding tower obligations) to LTM Core Adjusted EBITDA Ratio
2.7
2.7
2.6
2.5
2.5
2.4
2.3
Adjusted Free Cash Flow is calculated as follows:
Quarter
Nine Months Ended September 30,
(in millions, except percentages)
Q1 2023
Q2 2023
Q3 2023
Q4 2023
Q1 2024
Q2 2024
Q3 2024
2023
2024
Net cash provided by operating activities
$
4,051
$
4,355
$
5,294
$
4,859
$
5,084
$
5,521
$
6,139
$
13,700
$
16,744
Cash purchases of property and equipment, including capitalized interest
(3,001)
(2,789)
(2,424)
(1,587)
(2,627)
(2,040)
(1,961)
(8,214)
(6,628)
Proceeds from sales of tower sites
6
2
2
2
—
—
—
10
—
Proceeds related to beneficial interests in securitization transactions
1,345
1,309
1,131
1,031
890
958
984
3,785
2,832
Adjusted Free Cash Flow
$
2,401
$
2,877
$
4,003
$
4,305
$
3,347
$
4,439
$
5,162
$
9,281
$
12,948
Net cash provided by operating activities margin
26.1
%
27.7
%
33.3
%
30.3
%
31.6
%
33.6
%
36.7
%
29.0
%
34.0
%
Adjusted Free Cash Flow margin
15.4
%
18.3
%
25.2
%
26.8
%
20.8
%
27.0
%
30.9
%
19.7
%
26.3
%
25
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 2024
(in millions)
Guidance Range
Net cash provided by operating activities
$
22,000
$
22,300
Cash purchases of property and equipment, including capitalized interest
(8,800)
(9,000)
Proceeds related to beneficial interests in securitization transactions (1)
3,500
3,700
Adjusted Free Cash Flow
$
16,700
$
17,000
(1)Adjusted Free Cash Flow guidance does not assume any material net cash inflows from securitization in 2024.
The previous guidance range for Adjusted Free Cash Flow was calculated as follows:
FY 2024
(in millions)
Guidance Range
Net cash provided by operating activities
$
21,800
$
22,200
Cash purchases of property and equipment, including capitalized interest
(8,700)
(9,100)
Proceeds related to beneficial interests in securitization transactions (1)
3,500
3,900
Adjusted Free Cash Flow
$
16,600
$
17,000
(1)Adjusted Free Cash Flow guidance does not assume any material net cash inflows from securitization in 2024.
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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-Mobile believes the measures facilitate key operating performance comparisons with other companies in the wireless industry to provide management, investors and analysts with useful information to assess and evaluate past performance and assist in forecasting future performance.
1.Account - A billing account number that generates revenue. Postpaid accounts generally consist of customers that are qualified for postpaid service utilizing phones, High Speed Internet modems, mobile internet devices, including tablets and hotspots, wearables, DIGITS or other connected devices, including SyncUP and IoT, where they generally pay after receiving service.
2.Customer - A SIM number with a unique T-Mobile identifier which is associated with an account that generates revenue. Customers are qualified either for postpaid service utilizing phones, High Speed Internet modems, mobile internet devices, including tablets and hotspots, wearables, DIGITS or other connected devices, including SyncUP and IoT, where they generally pay after receiving service, or prepaid service, where they generally pay in advance of receiving service.
3.Churn - The number of customers whose service was deactivated as a percentage of the average number of customers during the specified period further divided by the number of months in the period. The number of customers whose service was deactivated is presented net of customers that subsequently have their service restored within a certain period of time and excludes customers who received service for less than a certain minimum period of time.
4.Postpaid Average Revenue Per Account (Postpaid ARPA) - Average monthly postpaid service revenue earned per account. Postpaid service revenues for the specified period divided by the average number of postpaid accounts during the period, further divided by the number of months in the period.
Average Revenue Per User (ARPU) - Average monthly service revenue earned per customer. Service revenues for the specified period divided by the average number of customers during the period, further divided by the number of months in the period.
Postpaid phone ARPU excludes postpaid other customers and related revenues.
Service revenues - Postpaid, including handset insurance, prepaid, wholesale and other service revenues.
5.Cost of services - Costs directly attributable to providing wireless service through the operation of T-Mobile’s network, including direct switch and cell site costs, such as rent, network access and transport costs, utilities, maintenance, associated labor costs, long distance costs, regulatory program costs, roaming fees paid to other carriers and data content costs.
Cost of equipment sales - Costs of devices and accessories sold to customers and dealers, device costs to fulfill insurance and warranty claims, write-downs of inventory related to shrinkage and obsolescence, and shipping and handling costs.
Selling, general and administrative expenses - Costs not directly attributable to providing wireless service for the operation of sales, customer care and corporate activities. These include all commissions paid to dealers and retail employees for activations and upgrades, labor and facilities costs associated with retail sales force and administrative space, marketing and promotional costs, customer support and billing, bad debt expense and administrative support activities.
6.Net income margin - Net income divided by Service revenues.
7.Adjusted EBITDA and Core Adjusted EBITDA - Adjusted EBITDA represents earnings before Interest expense, net of Interest income, Income tax expense, Depreciation and amortization, stock-based compensation and Special Items. Core Adjusted EBITDA represents Adjusted EBITDA less device lease revenues. Core Adjusted EBITDA and Adjusted EBITDA are non-GAAP financial measures utilized by T-Mobile’s management to monitor the financial performance of our operations. T-Mobile historically used Adjusted EBITDA and T-Mobile currently uses Core Adjusted EBITDA internally as a measure to evaluate and compensate its personnel and management for their performance. T-Mobile uses Adjusted EBITDA and Core Adjusted EBITDA as benchmarks to evaluate its operating performance in comparison to competitors. Management believes analysts and investors use Core Adjusted EBITDA and Adjusted EBITDA as supplemental measures to evaluate overall operating performance and to facilitate comparisons with other wireless communications services companies because they are indicative of T-Mobile’s ongoing operating performance and trends by excluding the impact of Interest expense from financing, non-cash depreciation and amortization from capital investments, non-cash stock-based compensation and Special Items. Management believes analysts and investors use Core Adjusted EBITDA because it normalizes for the transition in the company’s device financing strategy, by excluding the impact of device lease revenues from Adjusted EBITDA, to align with the related depreciation expense on leased devices, which is excluded from the definition of Adjusted EBITDA. Core Adjusted EBITDA and Adjusted EBITDA have limitations as analytical tools and should not be considered in isolation or as a substitute for Income from operations, Net income or any other measure of financial performance reported in accordance with U.S. Generally Accepted Accounting Principles (“GAAP”).
8.Special Items - Certain expenses, gains, and losses which are not reflective of our ongoing performance. Special Items include Merger-related costs (gain), net, (Gain) loss on disposal groups held for sale, certain legal-related recoveries and expenses, restructuring costs not directly attributable to the Merger (including severance), and other non-core gains and losses.
9.Adjusted EBITDA margin and Core Adjusted EBITDA margin - Adjusted EBITDA margin is calculated as Adjusted EBITDA divided by Service revenues. Core Adjusted EBITDA margin is calculated as Core Adjusted EBITDA divided by Service revenues. Adjusted EBITDA margin and Core Adjusted EBITDA margin are non-GAAP financial measures utilized by T-Mobile’s management to monitor the financial performance of our operations.
10.Net cash provided by operating activities margin - Net cash provided by operating activities margin is calculated as Net cash provided by operating activities divided by Service revenues.
11.Adjusted Free Cash Flow - Net cash provided by operating activities less cash payments for purchases of property and equipment, plus proceeds from sales of tower sites and proceeds related to beneficial interests in securitization transactions and less Cash payments for debt prepayment or debt extinguishment costs. Adjusted Free Cash Flow is utilized by T-Mobile’s management, investors, and analysts of our financial information to evaluate cash available to pay debt, repurchase shares, pay dividends and provide further investment in the business.
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 efficiently into cash available to pay debt, repurchase shares, pay dividends and provide further investment in the business.
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13.Net debt - Short-term debt, short-term debt to affiliates, long-term debt (excluding tower obligations), and long-term debt to affiliates, short-term financing lease liabilities and financing lease liabilities, less cash and cash equivalents.
14.Merger-related costs include:
•Integration costs to achieve efficiencies in network, retail, information technology and back office operations, migrate customers to the T-Mobile network and billing systems and the impact of legal matters assumed as part of the Merger;
•Restructuring costs, including severance, store rationalization and network decommissioning; and
•Transaction costs, including legal and professional services related to the completion of the Merger and the acquisitions of affiliates.
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.’s future results of operations, are forward-looking statements. These forward-looking statements are generally identified by the words “anticipate,” “believe,” “estimate,” “expect,” “intend,” “may,” “could” or similar expressions. Forward-looking statements are based on current expectations and assumptions, which are subject to risks and uncertainties and may cause actual results to differ materially from the forward-looking statements. Important factors that could affect future results and cause those results to differ materially from those expressed in the forward-looking statements include, among others, the following: competition, industry consolidation and changes in the market for wireless communications services and other forms of connectivity; criminal cyberattacks, disruption, data loss or other security breaches; our inability to take advantage of technological developments on a timely basis; our inability to retain or motivate key personnel, hire qualified personnel or maintain our corporate culture; system failures and business disruptions, allowing for unauthorized use of or interference with our network and other systems; the scarcity and cost of additional wireless spectrum, and regulations relating to spectrum use; the impacts of the actions we have taken and conditions we have agreed to in connection with the regulatory proceedings and approvals of the Transactions (as defined below), including the acquisition by DISH Network Corporation (“DISH”) of the prepaid wireless business operated under the Boost Mobile and Sprint prepaid brands (excluding the Assurance brand Lifeline customers and the prepaid wireless customers of Shenandoah Personal Communications Company LLC and Swiftel Communications, Inc.), including customer accounts, inventory, contracts, intellectual property and certain other specified assets, and the assumption of certain related liabilities (collectively, the “Prepaid Transaction”), the complaint and proposed final judgment agreed to by us, Deutsche Telekom AG (“DT”), Sprint Corporation, now known as Sprint LLC (“Sprint”), SoftBank Group Corp. (“SoftBank”) and DISH with the U.S. District Court for the District of Columbia, which was approved by the Court on April 1, 2020, the proposed commitments filed with the Secretary of the Federal Communications Commission (“FCC”), which we announced on May 20, 2019, certain national security commitments and undertakings, and any other commitments or undertakings entered into, including, but not limited to, those we have made to certain states and nongovernmental organizations (collectively, the “Government Commitments”), and the challenges in satisfying the Government Commitments in the required time frames and the significant cumulative costs incurred in tracking and monitoring compliance over multiple years; adverse economic, political or market conditions in the U.S. and international markets, including changes resulting from increases in inflation or interest rates, supply chain disruptions and impacts of geopolitical instability, such as the Ukraine-Russia war and Israel-Hamas war; sociopolitical volatility and polarization; our inability to manage the ongoing commercial services arrangements entered into in connection with the Prepaid Transaction, and known or unknown liabilities arising in connection therewith; the timing and effects of any future acquisition, divestiture, investment, or merger involving us, including our inability to obtain any required regulatory approval necessary to consummate any such transactions; any disruption or failure of our third parties (including key suppliers) to provide products or services for the operation of our business; our substantial level of indebtedness and our inability to service our debt obligations in accordance with their terms; changes in the credit market conditions, credit rating downgrades or an inability to access debt markets; the risk of future material weaknesses we may identify, or any other failure by us to maintain effective internal controls, and the resulting significant costs and reputational damage; any changes in regulations or in the regulatory framework under which we operate; laws and regulations relating to the handling of privacy and data protection; unfavorable outcomes of and increased costs from existing or future regulatory or legal proceedings; difficulties in protecting our intellectual property rights or if we infringe on the intellectual property rights of others; our offering of regulated financial services products and exposure to a wide variety of state and federal regulations; new or amended tax laws or regulations or administrative interpretations and judicial decisions affecting the scope or application of tax laws or regulations; our wireless licenses, including those controlled through leasing agreements, are subject to renewal and may be revoked; our exclusive forum provision as provided in our Certificate of Incorporation; interests of DT, our controlling stockholder, which may differ from the interests of other stockholders; the dollar amount authorized for our 2023-2024 Stockholder Return Program may not be fully utilized, and our share repurchases and dividend payments pursuant thereto may fail to have the desired impact on stockholder value; future sales of our common stock by DT and SoftBank and our inability to attract additional equity financing outside the United States due to foreign ownership limitations by the FCC; and other risks as disclosed in our most recent annual report on Form 10-K, 10-Q and other filings with the Securities and Exchange Commission. Given these risks and uncertainties, readers are cautioned not to place undue reliance on such forward- looking statements. We undertake no obligation to revise or publicly release the results of any revision to these forward-looking statements, except as required by law.
About T-Mobile US, Inc.
T-Mobile US, Inc. (NASDAQ: TMUS) is America’s supercharged Un-carrier, delivering an advanced 4G LTE and transformative nationwide 5G network that will offer reliable connectivity for all. T-Mobile’s customers benefit from its unmatched combination of value and quality, unwavering obsession with offering them the best possible service experience and undisputable drive for disruption that creates competition and innovation in wireless and beyond. Based in Bellevue, Wash., T-Mobile provides services through its subsidiaries and operates its flagship brands, T-Mobile, Metro by T-Mobile and Mint Mobile. For more information please visit: http://www.t-mobile.com.
