01—Abstract
Summary
Summary of the 10-K filed February 14, 2017. Cited figures are marked; the original filing is the authoritative source.
T-Mobile US, Inc.'s 2016 10-K filing highlights a period of substantial growth and strategic advancement.
The company significantly increased its total revenues by 16% to $37.2 billiona, driven by a 12% rise in service revenues and a notable 30% jump in equipment revenues. This growth was fueled by the continued success of its "Un-carrier" strategy, which resonated well with customers, leading to improved branded postpaid phone churn and a solid increase in total branded customers. The company also demonstrated strong operational improvements, with operating income soaring by 84% and net income more than doubling year-over-year.
T-Mobile continued to invest heavily in its network infrastructure, expanding its 4G LTE coverage and capacity through spectrum acquisition and technology deployment, positioning itself for future growth and enhanced customer experience. Despite significant debt, the company's operational performance and free cash flow generation improved, indicating a strengthening financial position. The filing also underscores T-Mobile's commitment to innovation with initiatives like the T-Mobile ONE plan, aiming to simplify offerings and provide better value.
The company actively manages its spectrum portfolio and continues to expand its network's reach and speed, reinforcing its competitive position in the dynamic wireless market. While facing inherent industry risks such as intense competition and regulatory scrutiny, T-Mobile's strategic execution and customer-centric approach appear to be driving positive momentum.
02—Key points
Key Highlights
- Total revenues increased by 16% to $37.2 billion, driven by strong service and equipment revenue growth.
- Operating income increased significantly by 84% to $3.8 billion, reflecting improved operational efficiency and revenue growth.
- Net income more than doubled, increasing by 99% to $1.5 billion, demonstrating enhanced profitability.
- Branded postpaid phone churn improved to 1.30% in 2016, indicating successful customer retention efforts.
- The company expanded its 4G LTE coverage to 314 million people and continued to invest in network capacity and speed.
- Free Cash Flow saw a substantial increase of 108% to $1.4 billion, showcasing improved cash generation.
- The "Un-carrier" strategy continued to drive customer growth and satisfaction, with T-Mobile recognized for network speed leadership.
03—One dollar
Follow one dollar
Of each $1.00 of revenue in FY2016, T-Mobile US, Inc. kept $0.04.
- Revenue$37.49B100.0%
- Cost of revenue−$10.82B28.9%
- Gross profit$26.67B71.1%
- Operating costs−$22.62B60.3%
- Operating income$4.05B10.8%
- Interest, other & tax−$2.59B6.9%
- Net income$1.46B3.9%
Where FY2016 revenue went
$37.49B- SG&A: $11.38B, 30% of revenue
- Other operating costs: $11.24B, 30% of revenue
- Cost of revenue: $10.82B, 29% of revenue
- Net income: $1.46B, 3.9% of revenue
- Interest, other & tax: $2.59B, 6.9% of revenue
Kept 3.9% as net incomeNet income $1.46B · 3.9%
Full revenue history →04—Financials
Financial Highlights
Figures from 10-KFY2016filed February 14, 2017Financial Statements
FY2016 against FY2015
| Line item | FY2016FY2015 | Change |
|---|---|---|
| Revenue | $37.49B$32.47B | +15.5% |
| Cost of Revenue | $10.82B$9.34B | +15.8% |
| Gross Profit | $26.67B$23.12B | +15.3% |
| SG&A Expenses | $11.38B$10.19B | +11.7% |
| Operating Expenses | $33.44B$29.99B | +11.5% |
| Operating Income | $4.05B$2.48B | +63.4% |
| Interest Expense | $1.42B$1.08B | +30.7% |
| Net Income | $1.46B$733.00M | +99.2% |
| EPS (Basic) | $1.71$0.83 | +106.0% |
| EPS (Diluted) | $1.69$0.82 | +106.1% |
| Shares Outstanding (Basic) | 822.47M812.99M | +1.2% |
| Shares Outstanding (Diluted) | 833.05M822.62M | +1.3% |
05—Questions
Frequently Asked Questions
What was T-Mobile's revenue growth in 2016?
T-Mobile's total revenues increased by 16% in 2016, reaching $37.2 billion. This growth was primarily driven by an 11% increase in branded postpaid revenues and a significant 30% increase in equipment revenues.
How did T-Mobile's profitability change in 2016?
T-Mobile experienced a substantial improvement in profitability during 2016. Operating income rose by 84% to $3.8 billion, and net income more than doubled, increasing by 99% to $1.5 billion, largely due to higher revenues and gains on spectrum license disposals.
What is the significance of the 'Un-carrier' strategy for T-Mobile?
The 'Un-carrier' strategy is central to T-Mobile's success. It focuses on addressing customer pain points through innovative offerings like simplified plans, no annual contracts, and data benefits. This strategy was a key driver for customer growth and improved branded postpaid phone churn in 2016, leading to a stronger competitive position.
How is T-Mobile investing in its network?
T-Mobile is aggressively investing in its network to enhance coverage and capacity. This includes expanding its 4G LTE network to cover 314 million people and deploying new technologies like Extended Range LTE, VoLTE, and Carrier Aggregation. The company also continues to acquire spectrum licenses to support future growth and technological advancements.
06—Continue