10-KPeriod: FY2019

T-Mobile US, Inc. Annual Report, Year Ended Dec 31, 2019

Filed February 6, 2020For Securities:TMUSTMUSZTMUSITMUSL

Summary

T-Mobile US, Inc. (TMUS) filed its 2019 Form 10-K on February 5, 2020, detailing its financial performance and significant strategic initiatives. The report highlights a robust operational year, marked by strong customer growth, particularly in the branded postpaid segment, and significant investments in network expansion, including the launch of a nationwide 5G network in December 2019. Financially, the company demonstrated revenue growth and improved operating income, partly driven by its customer-centric "Un-carrier" strategy. The most critical development discussed is the ongoing merger with Sprint, which was expected to close in early 2020, subject to regulatory and judicial approvals. This merger represented a transformative event for T-Mobile, aiming to create a more formidable competitor in the U.S. wireless market with enhanced network capabilities and greater scale. The company detailed the extensive efforts and commitments made to secure regulatory approval, including a significant divestiture to DISH Network. Investors were closely watching the progress and potential hurdles of this merger, as it was central to T-Mobile's future growth and competitive positioning.

Financial Highlights

54 data points
Beta

Revenue

$45.00B

Net Income

$3.47B

7.7% Net Margin

EPS (Diluted)

$4.02

Total Assets

$86.92B

Cash & Equivalents

$1.53B

Free Cash Flow

$433.00M

Financial Statements
Beta
Revenue$45.00B
SG&A Expenses$14.14B
Operating Expenses$39.28B
Operating Income$5.72B
Interest Expense$727.00M
Net Income$3.47B
EPS (Basic)$4.06
EPS (Diluted)$4.02
Shares Outstanding (Basic)854.14M
Shares Outstanding (Diluted)863.43M

Key Highlights

  • 1T-Mobile launched its first nationwide 5G network in December 2019, covering over 200 million people across more than 5,000 cities and towns.
  • 2Total revenues increased by 4% to $45.0 billion in 2019, primarily driven by a 6% increase in service revenues to $34.0 billion.
  • 3Branded postpaid customers increased by 4.5 million, contributing to a total of 47.0 million branded postpaid customers by year-end 2019.
  • 4Branded postpaid phone churn improved to 0.89% in 2019, down from 1.01% in 2018, indicating enhanced customer loyalty.
  • 5Net income increased by 20% to $3.5 billion in 2019, reflecting higher operating income and lower interest expenses.
  • 6Free Cash Flow increased by 22% to $4.3 billion in 2019, demonstrating improved operational cash generation.
  • 7The company was actively pursuing the merger with Sprint, which was expected to close in early 2020, subject to regulatory and legal approvals.

Frequently Asked Questions

As of the filing date (February 6, 2020), T-Mobile US, Inc. expected the merger with Sprint to close in early 2020. The company had received approvals from the FCC and DOJ, subject to certain divestiture commitments, including the sale of a prepaid wireless business to DISH Network. However, the merger was still subject to judicial approvals and other closing conditions.

T-Mobile launched its nationwide 5G network in December 2019, covering over 200 million people. This launch was a key strategic initiative, leveraging its 600 MHz spectrum. While the financial impact for 2019 was primarily related to the initial deployment costs, the company viewed this as foundational for future growth and competitive positioning.

In 2019, T-Mobile reported total revenues of $45.0 billion, an increase of 4% from 2018. Service revenues grew by 6% to $34.0 billion. Operating income increased by 8% to $5.7 billion, and net income rose by 20% to $3.5 billion. Free Cash Flow also saw a significant increase of 22% to $4.3 billion.

As of December 31, 2019, T-Mobile had total debt and financing lease liabilities of approximately $27.3 billion. The company's principal sources of liquidity were cash generated from operations, cash and cash equivalents, and revolving credit facilities. The upcoming Sprint merger was expected to significantly increase the combined company's indebtedness, with anticipated consolidated indebtedness of $69.0 to $71.0 billion.