T-Mobile Reports Record Financials And Strong Customer Growth In FY 2018

Record Financial Performance in FY 2018

• Record Service revenues of $8.2 billion, up 6% in Q4 2018 — up 6% to $32.0 billion in 2018
• Record Total revenues of $11.4 billion, up 6% in Q4 2018 — up 7% to $43.3 billion in 2018
• Strong Net income of $640 million, down 76% in Q4 2018 — down 36% to $2.9 billion in 2018. Up 21% and 22% in Q4 2018 and 2018, respectively, excluding the impact of the Tax Cuts and Jobs Act (“TCJA”) of $2.2 billion in 2017
• Diluted earnings per share (“EPS”) of $0.75 and $3.36 in Q4 2018 and 2018, respectively
• Record Q4 Adjusted EBITDA⁽¹⁾ of $3.0 billion, up 10% in Q4 2018 — up 11% to $12.4 billion in 2018
• Strong Net cash provided by operating activities⁽²⁾ of $954 million, up 10%, and $3.9 billion, up 2%, in Q4 2018 and 2018, respectively
• Record Free Cash Flow⁽¹⁾⁽²⁾ of $1.2 billion, up 7% in Q4 2018 — up 30% to $3.6 billion in 2018
  
  Accelerating Customer Growth

• Record 2.4 million total net additions in Q4 2018 — 7.0 million in 2018
• 1.4 million branded postpaid net additions in Q4 2018, best in the industry — 4.5 million in 2018
• 1.0 million branded postpaid phone net additions in Q4 2018, best in an industry — 3.1 million in 2018
• 135,000 branded prepaid net additions in Q4 2018, expect to be best in the industry — 460,000 in 2018
• Q4 record-low branded postpaid phone churn of 0.99% in Q4 2018, down 19 bps YoY — 1.01% in 2018, down 17 bps from 2017
  
  Building the First Real 5G Network While Improving 4G LTE

• T-Mobile is building out standards-based 5G today, plans to have nationwide 5G coverage next year
• Aggressive deployment of 600 MHz using 5G ready equipment, now reaching over 2,700 cities and towns on 29 devices
• T-Mobile now covers more than 325 million people with 4G LTE
• Fastest 4G LTE network for 20th consecutive quarter based on analysis by Ookla^® of Speedtest Intelligence data
  
  Strong Outlook for 2019

• Branded postpaid net customer additions of 2.6 to 3.6 million
• Net income is not available on a forward-looking basis⁽³⁾
• Adjusted EBITDA target, excluding the impact of the new lease standard, of $12.7 to $13.2 billion, which includes leasing revenues of $0.6 to $0.7 billion⁽¹⁾
• Cash purchases of property and equipment, excluding capitalized interest of approximately $400 million, of $5.4 to $5.7 billion and cash purchases of property and equipment, including capitalized interest, of $5.8 to $6.1 billion
• Three-year compound annual growth rate (CAGR) from FY 2016 to FY 2019 for Net cash provided by operating activities is expected to be at 17% – 21%, up from prior guidance of 7% – 12%⁽²⁾
• Three-year CAGR from FY 2016 to FY 2019 for Free Cash Flow maintained at 46% – 48%⁽¹⁾⁽²⁾
  
• Adjusted EBITDA and 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 financial measures are provided in the Reconciliation of Non-GAAP Financial Measures to GAAP Financial Measures tables.
• In Q1 2018, the adoption of the new cash flow accounting standard resulted in a reclassification of cash flows related to the deferred purchase price from securitization transactions from operating activities to investing activities. In addition, cash flows related to debt prepayment and extinguishment costs were reclassified from operating activities to financing activities. In Q1 2018, we redefined Free Cash Flow to reflect the above changes in classification and present cash flows on a consistent basis for investor transparency. The effects of this change are applied retrospectively and 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 GAAP net income including, but not limited to, income tax expense, stock-based compensation expense and interest expense. Adjusted EBITDA should not be used to predict net income as the difference between the two measures is variable.

T-Mobile US, Inc. reported another strong quarter with record financials and the best postpaid phone growth in the industry. In Q4, T-Mobile delivered record-high service and total revenues, strong net income, record Q4 Adjusted EBITDA, record-low Q4 postpaid phone churn, strong net cash provided by operating activities and record Free Cash Flow. These results cap off 2018 where the Company delivered strong customer growth and service revenue growth for the fifth consecutive year.

Un-carrier is all about putting customers first by solving everyday pain points. When customers join T-Mobile, they get more value for their money and the best customer service in the industry – all on the nation’s fastest 4G LTE network. The Company’s investments in new geographies, underpenetrated segments, and a completely new model for customer care continue to pay off. As a result, the Un-carrier’s customer growth accelerated year-over-year with T-Mobile again leading the industry in the fourth quarter, capturing more than 50% of industry postpaid phone growth and 56% more postpaid phone net additions than our next closest competitor. In addition, T-Mobile delivered record-low Q4 postpaid phone churn of 0.99% – the best result for the fourth quarter in T-Mobile’s history.

“This never gets old! T-Mobile finished another year with record-breaking financials and our best-ever customer growth! Record revenues, strong net income, record Adjusted EBITDA, our lowest-ever Q4 postpaid phone churn that was better than AT&T for the very first time!” said John Legere, CEO of T-Mobile. “T-Mobile is competing hard and winning customers – and we continue to deliver results beyond expectations. Our 2019 guidance shows that we expect our incredible standalone momentum to continue!”―CT Bureau