10-KPeriod: FY2015

T-Mobile US, Inc. Annual Report, Year Ended Dec 31, 2015

Filed February 17, 2016For Securities:TMUSTMUSZTMUSITMUSL

Summary

T-Mobile US, Inc. reported a strong financial performance for the year ended December 31, 2015, demonstrating significant growth in total revenues, which reached $32.1 billion, an 8% increase year-over-year. This growth was primarily driven by a 14% increase in branded postpaid revenues and an 8% increase in branded prepaid revenues, reflecting the continued success of its "Un-carrier" strategy and network improvements. The company also saw a substantial increase in net income to $733 million, up from $247 million in the prior year, and an improvement in Adjusted EBITDA to $7.4 billion. T-Mobile continued to expand its network coverage and capacity, with its LTE network covering 305 million people. The company also focused on customer retention, evidenced by a decrease in branded postpaid phone churn to 1.39%. The "Un-carrier" initiatives, including no annual contracts, unlimited streaming, and international roaming benefits, continue to resonate with customers, driving strong net customer additions of 8.3 million. The company remains committed to investing in network expansion and spectrum acquisition to support future growth.

Financial Highlights

55 data points
Beta

Revenue

$32.47B

71.2% Gross Margin

Net Income

$733.00M

2.3% Net Margin

EPS (Diluted)

$0.82

Total Assets

$62.41B

Cash & Equivalents

$4.58B

Free Cash Flow

$690.00M

Financial Statements
Beta
Revenue$32.47B
Cost of Revenue$9.34B
Gross Profit$23.12B
SG&A Expenses$10.19B
Operating Expenses$29.99B
Operating Income$2.48B
Interest Expense$1.08B
Net Income$733.00M
EPS (Basic)$0.83
EPS (Diluted)$0.82
Shares Outstanding (Basic)812.99M
Shares Outstanding (Diluted)822.62M

Key Highlights

  • 1Total revenues increased by 8% to $32.1 billion in 2015, driven by strong customer growth and "Un-carrier" initiatives.
  • 2Net income significantly increased to $733 million, up from $247 million in 2014.
  • 3Adjusted EBITDA grew by 31% to $7.4 billion, indicating improved operational profitability.
  • 4Branded postpaid phone churn improved to 1.39%, showcasing enhanced customer retention.
  • 5Total customers grew to 63.3 million, a 15% increase year-over-year, with 8.3 million net customer additions.
  • 6Capital expenditures for property and equipment were $4.7 billion, reflecting ongoing network investments.
  • 7T-Mobile significantly expanded its LTE network coverage to 305 million people.

Frequently Asked Questions

T-Mobile's primary growth driver in 2015 was the continued success of its "Un-carrier" strategy, which focuses on addressing customer pain points through innovative service plans and a commitment to customer experience. This strategy led to strong branded postpaid and prepaid revenue growth and significant net customer additions.

T-Mobile is significantly investing in its network infrastructure to enhance coverage and capacity. This includes the ongoing upgrade to LTE technology, the build-out of its 700 MHz A-Block spectrum, and the acquisition of additional spectrum licenses through auctions and private transactions. Capital expenditures for property and equipment were substantial in 2015, underscoring this commitment.

T-Mobile focuses on customer retention through its "Un-carrier" initiatives, which aim to provide value, simplicity, and a superior customer experience. Evidence of this focus includes a reduction in branded postpaid phone churn to 1.39% in 2015, indicating increased customer loyalty and satisfaction.

The JUMP! On Demand program allows customers to lease new devices and upgrade them up to three times a year with no extra fees. While it drives customer acquisition and loyalty, it also impacts revenue recognition, shifting revenue from immediate equipment sales to longer-term lease revenue and increasing depreciation expenses related to leased devices.