EX-99.2 3 tmus06302015ex992.htm TMUS EXHIBIT 99.2 TMUS 06/30/2015 EX 99.2

EXHIBIT 99.2


1





2


 
CUSTOMER METRICS
Branded Postpaid Customers
Branded postpaid net customer additions were 1,008,000 in the second quarter of 2015 compared to 1,125,000 in the first quarter of 2015 and 908,000 in the second quarter of 2014. This marked the fourth consecutive quarter in which branded postpaid net customer additions were greater than one million, a clear indicator of the continued success of the Un-carrier initiatives and strong uptake of promotions for services and devices.
T-Mobile is expected to again lead the industry in branded postpaid phone net customer additions with 760,000 in the second quarter of 2015, compared to 991,000 in the first quarter of 2015 and 579,000 in the second quarter of 2014. Branded postpaid phone gross additions in the second quarter of 2015 declined by 9% on a sequential basis, but were up 9% year-over-year. T-Mobile is expected to have captured all of the industry’s postpaid phone growth in the second quarter of 2015.
Branded postpaid mobile broadband net customer additions were 248,000 in the second quarter of 2015, compared to 134,000 in the first quarter of 2015 and 329,000 in the second quarter of 2014.
Branded postpaid phone churn was 1.32% in the second quarter of 2015, down 16 basis points compared to 1.48% in the second quarter of 2014 and up two basis points compared to 1.30% in the first quarter of 2015. The year-over-year improvement reflects ongoing improvements in the Company’s network, customer service, and the overall value of its offerings in the marketplace, resulting in increased customer satisfaction and loyalty.




3


Branded Prepaid Customers
Branded prepaid net customer additions were 178,000 in the second quarter of 2015, compared to 73,000 in the first quarter of 2015 and 102,000 in the second quarter of 2014. The higher level of branded prepaid net customer additions in the second quarter of 2015 was driven by successful promotions for services and devices and slightly lower sequential customer migrations from branded prepaid to branded postpaid.
Migrations to branded postpaid plans reduced branded prepaid net customer additions in the second quarter of 2015 by approximately 175,000, down from 195,000 in the first quarter of 2015 and up from 85,000 in the second quarter of 2014.
Branded prepaid churn was 4.93% in the second quarter of 2015, up 31 basis points from 4.62% in the first quarter of 2015 and up 43 basis points from 4.50% in the second quarter of 2014. Sequentially and year-over-year, the increase in churn was principally due to ongoing competitive activity in the marketplace.


Total Branded Customers
Total branded net customer additions were 1,186,000 in the second quarter of 2015 compared to 1,198,000 in the first quarter of 2015 and 1,010,000 in the second quarter of 2014. This was the sixth consecutive quarter in which branded net customer additions surpassed the one million milestone.









4


Wholesale Customers
Total wholesale net customer additions were 886,000 in the second quarter of 2015 compared to 620,000 in the first quarter of 2015 and 460,000 in the second quarter of 2014.
MVNO net customer additions were 919,000 in the second quarter of 2015 compared to 479,000 in the first quarter of 2015 and 235,000 in the second quarter of 2014.
M2M net customer losses were 33,000 in the second quarter of 2015 compared to net customer additions of 141,000 in the first quarter of 2015 and 225,000 in the second quarter of 2014.

Total Customers
Total net customer additions were 2,072,000 in the second quarter of 2015 compared to 1,818,000 in the first quarter of 2015 and 1,470,000 in the second quarter of 2014. This was the ninth consecutive quarter in which total net customer additions exceeded one million. It was also the fourth time in the last six quarters in which total net customer additions exceeded two million.
Since the launch of its first Un-carrier initiative nine quarters ago, T-Mobile has added more than 16 million total customers.
T-Mobile ended the second quarter of 2015 with more than 58.9 million total customers.




5



NETWORK
Network Modernization Update
T-Mobile’s 4G LTE network now covers 290 million people, up from 275 million at the end of the first quarter of 2015 and 233 million at the end of the second quarter of 2014.
The Company is targeting a total 4G LTE population coverage of 300 million people by year-end 2015. During 2015, the Company expects to add one million square miles of territory under its 4G LTE coverage.
Wideband LTE, which refers to markets that have bandwidth of at least 15+15 MHz dedicated to 4G LTE, is currently available in 212 market areas and is now expected to be available in more than 250 market areas by year-end 2015. Customers in Wideband LTE markets are regularly observing peak speeds in the 70 Mbps range, with maximum real-world speeds in excess of 145 Mbps.

Network Speed
T-Mobile has the fastest nationwide 4G LTE network in the U.S. based on download speeds from millions of user- generated tests. This is the sixth consecutive quarter that T-Mobile has led the industry in average download speeds.
In the second quarter of 2015, T-Mobile’s average 4G LTE download speed was 18.5 Mbps compared to Verizon at 18.2 Mbps, AT&T at 14.8 Mbps, and Sprint at 10.6 Mbps.




6


Spectrum
At the end of the second quarter of 2015, T-Mobile owned an average of 84 MHz of spectrum across the top 25 markets in the U.S. The spectrum is comprised of an average of 10 MHz in the 700 MHz band, 30 MHz in the 1900 MHz PCS band, and 44 MHz in the AWS band.
The Company expects to participate in future FCC spectrum auctions including the broadcast incentive auction.




7


A-Block Update
T-Mobile owns 700 MHz A-Block spectrum covering 190 million people or approximately 60% of the U.S. population and approximately 70% of the Company’s existing branded customer base. The spectrum covers 9 of the top 10 market areas and 24 of the top 30 market areas in the U.S.
Approximately 98% of the population covered by the Company’s A-Block spectrum is free and clear and ready to be deployed or will be ready for deployment in 2015. That is up from approximately 50% at the time of the original A-Block spectrum purchase from Verizon in the first quarter of 2014.
T-Mobile has deployed its 700 MHz A-Block spectrum in 141 market areas. New launches in the second quarter of 2015 included the cities of Miami, Denver, Baltimore, Kansas City, Austin, and West Palm Beach. The Company plans to continue to aggressively roll-out new 700 MHz sites with new launches planned for Los Angeles, New York, Atlanta, Seattle, Portland, and Sacramento in 2015, among others.




8


 
METROPCS
On July 1, 2015, T-Mobile officially completed the shutdown of the MetroPCS CDMA network with the decommissioning of the CDMA portion of the MetroPCS networks in Dallas, New York, Miami, Jacksonville, Orlando, and Tampa. Since the close of the business combination in May 2013, nearly 9 million legacy MetroPCS customers have been migrated to the T-Mobile network.
100% of the MetroPCS spectrum on a MHz/POP basis has now been re-farmed and integrated into the T-Mobile network, compared to 80% at the end of the first quarter of 2015.
Total decommissioning costs for CDMA network shutdowns were $34 million in the second quarter of 2015, compared to $128 million in total decommissioning costs in the first quarter of 2015. The sequential decrease in total decommissioning costs was primarily due to the timing of the CDMA network shutdowns. Typically, there is a lag of approximately 3 to 6 months between network shutdown and the recognition of decommissioning costs and realization of synergies.
The Company expects to incur additional network decommissioning costs in the range of $350 to $450 million with substantially all the costs to be recognized through the rest of 2015. Network decommissioning costs primarily relate to the acceleration of lease costs for decommissioned cell sites and are excluded from Adjusted EBITDA.




9


 
UN-CARRIER INITIATIVES
At the end of the second quarter of 2015, 93% of the branded postpaid customer base was on a Simple Choice plan, up from 92% at the end of the first quarter of 2015 and 80% at the end of the second quarter of 2014.
At the end of the second quarter of 2015, 11.3 million customers were enrolled in the JUMP! program, up from 10.3 million at the end of the first quarter of 2015 and 6.7 million at the end of the second quarter of 2014.

Un-carrier Updates
JUMP! On Demand: On June 28, 2015, T-Mobile updated its JUMP! program to enable customers to have a low monthly payment that covers the cost of leasing a new device plus the freedom to swap their leased device for a new one up to three times in twelve months with no extra fee. Under this program, at lease inception, devices are transferred from inventory to property and equipment. Devices are then depreciated to their estimated residual value. Revenues associated with the leased devices are recognized over the term of the lease.
Mobile without Borders: This program, launched on July 15, 2015, expands the benefits of T-Mobile’s Simple Choice plan by extending coverage and calling across the U.S, Canada, and Mexico at no extra charge. The upgrade makes Simple Choice the first and only wireless plan to span the entire continent.
10 GB for All: On July 15, 2015, T-Mobile updated its Family Plan program to enable qualifying family plan customers to get 10 GB of 4G LTE data at a great rate. Plans start at $100 per month for two lines each with up to 10 GB of 4G LTE data and each additional line is $20 per month. For a limited time, the fourth line is free.
Amping Music Freedom and iPhone®: On July 28, 2015, T-Mobile updated its Music Freedom program by adding Apple Music to its list of services that stream free on T-Mobile. In addition, every customer who gets a new iPhone 6 with JUMP! On Demand™ this summer can lock in the promotional price of $15 per month and simply swap it for the next comparable iPhone, if they upgrade before the end of the year. Lastly, all customers who get a new iPhone 6 with JUMP! On Demand will have exclusive priority access among T-Mobile’s customers to the next iPhone.




10


 
DEVICES
Total device sales were 8.3 million units in the second quarter of 2015 compared to 8.8 million units in the first quarter of 2015 and 6.9 million units in the second quarter of 2014.
Total smartphone sales were 7.4 million units in the second quarter of 2015 compared to 8.0 million units in the first quarter of 2015 and 6.2 million units in the second quarter of 2014.
The upgrade rate for branded postpaid customers was approximately 9% in the second quarter of 2015 compared to approximately 8% in the first quarter of 2015 and approximately 8% in the second quarter of 2014.




11


 
EQUIPMENT INSTALLMENT PLANS (EIP)
T-Mobile financed $1.697 billion of equipment sales on EIP in the second quarter of 2015, up 14.4% from $1.483 billion in the first quarter of 2015 and up 26.5% from $1.342 billion in the second quarter of 2014. The sequential and year-over-year increase was due to higher gross customer additions, growth in devices financed through EIP, including customers choosing to JUMP!, and a higher average price per device sold.
Customers on Simple Choice plans had associated EIP billings of $1.393 billion in the second quarter of 2015, up 7.8% from $1.292 billion in the first quarter of 2015 and up 72.0% from $810 million in the second quarter of 2014.
Total EIP receivables, net of imputed discount and allowances for credit losses, were $5.114 billion at the end of the second quarter of 2015 compared to $4.842 billion at the end of the first quarter of 2015 and $3.583 billion at the end of the second quarter of 2014. The $272 million sequential increase in total EIP receivables, net in the second quarter of 2015 was higher than the sequential increase of $152 million in the first quarter of 2015, and reflects growth in devices financed through EIP.
The Company continues to expect that the growth in total EIP receivables, net will moderate significantly in 2015 compared to 2014.




12


 
CUSTOMER QUALITY
EIP receivables classified as Prime were 52% of total EIP receivables at the end of the second quarter of 2015, flat from the prior quarter and down one percentage point compared to the end of the second quarter of 2014.
Total bad debt expense and losses from the factoring arrangement was $156 million in the second quarter of 2015 compared to $169 million in the first quarter of 2015 and $164 million in the second quarter of 2014. Year-over-year, total bad debt expense and losses from the factoring arrangement as a percentage of total revenues decreased 37 basis points. Sequentially, total bad debt expense and losses from the factoring arrangement as a percentage of total revenues decreased 26 basis points, primarily due to a non-recurring impact from a change to the factoring arrangement in the first quarter of 2015.




13


 
REVENUE METRICS
Branded Postpaid Phone ARPU
Branded postpaid phone ARPU was $48.19 in the second quarter of 2015, up 3.8% from $46.43 in the first quarter of 2015 and down 2.3% from $49.32 in the second quarter of 2014. Sequentially, the increase in branded postpaid phone ARPU was primarily due to the non-cash net revenue deferrals for Data Stash recognized in the first quarter of 2015. Year-over-year, the decrease was primarily due to dilution from continued growth of customers on Simple Choice plans and promotions targeting multiple phone lines, including the “4 for $100” offer.
Excluding the impacts of the non-cash net revenue deferrals for Data Stash, branded postpaid phone ARPU increased 1.0% sequentially.

Branded Postpaid ABPU
Branded postpaid ABPU was a record $63.29 in the second quarter of 2015, up 3.9% from $60.94 in the first quarter of 2015 and up 5.9% from $59.79 in the second quarter of 2014. Sequentially, the increase in branded postpaid ABPU was primarily due to the non-cash net revenue deferrals for Data Stash recognized in the first quarter of 2015 and growth in EIP billings on a per user basis. Year-over-year, the increase was primarily due to growth in EIP billings on a per user basis, offset in part by lower branded postpaid phone ARPU.
Excluding the impacts of the non-cash net revenue deferrals for Data Stash, branded postpaid ABPU increased 1.7% sequentially.





14


Branded Postpaid Customers per Account
Branded postpaid customers per account was 2.43 at the end of the second quarter of 2015, compared to 2.39 at the end of the first quarter of 2015 and 2.23 at the end of the second quarter of 2014. The sequential and year-over-year increase was primarily a result of service promotions targeting multiple phone lines, including the “4 for $100” offer, and increased penetration of mobile broadband devices.

Branded Postpaid ARPA
Branded postpaid ARPA was $113.50 in the second quarter of 2015, up 5.1% from $108.04 in the first quarter of 2015 and up 6.0% from $107.11 in the second quarter of 2014. Sequentially, the increase in branded postpaid ARPA was primarily due to the non-cash net revenue deferrals for Data Stash recognized in the first quarter of 2015 and an increase in the number of branded postpaid customers per account. Year-over-year, the increase was primarily due to higher regulatory program revenues and an increase in the number of branded postpaid customers per account, partially offset by dilution from continued growth of customers on promotions targeting multiple phone lines, including the “4 for $100” offer.
Excluding the impacts of the non-cash net revenue deferrals for Data Stash, branded postpaid ARPA increased 2.1% sequentially.




15


Branded Postpaid ABPA
Branded postpaid ABPA was a record $152.31 in the second quarter of 2015, up 5.0% from $145.03 in the first quarter of 2015 and up 15.6% from $131.81 in the second quarter of 2014. Sequentially, the increase in branded postpaid ABPA was primarily due to the non-cash net revenue deferrals for Data Stash recognized in the first quarter of 2015, growth in EIP billings, and an increase in the number of branded postpaid customers per account. Year-over-year, the increase was primarily due to growth in EIP billings and an increase in the number of branded postpaid customers per account.
Excluding the impacts of the non-cash net revenue deferrals for Data Stash, branded postpaid ABPA increased 2.8% sequentially.

Branded Prepaid ARPU
Branded prepaid ARPU was $37.83 in the second quarter of 2015, essentially flat from $37.81 in the first quarter of 2015 and up 1.8% from $37.16 in the second quarter of 2014. Year-over-year, the increase in branded prepaid ARPU was primarily due to an increase in data attach rates.




16


 
REVENUES
Service Revenues
T-Mobile is expected to again lead the industry in year-over-year service revenue growth in the second quarter of 2015. This would mark the fifth consecutive quarter that T-Mobile has led the industry in year-over-year service revenue growth.
Service revenues were $6.144 billion in the second quarter of 2015, up 5.6% from $5.819 billion in the first quarter of 2015 and up 12.0% from $5.484 billion in the second quarter of 2014. The year-over-year service revenue growth of 12.0% was an acceleration in the growth rate of three percentage points compared to the first quarter of 2015.
Sequentially, the increase in service revenues was primarily due to growth in the Company’s customer base from the continued success of T-Mobile’s Un-carrier initiatives and strong customer response to promotional activities targeting families as well as the non-cash net revenue deferrals for Data Stash recognized in the first quarter of 2015.
Year-over-year, the increase in service revenues was primarily due to growth in the Company’s customer base from the continued success of T-Mobile’s Un-carrier initiatives as well as the success of the MetroPCS brand, partially offset by lower branded postpaid phone ARPU.
Excluding the impacts of the non-cash net revenue deferrals for Data Stash, service revenues increased 3.7% sequentially.




17


Equipment Revenues
Equipment revenues were $1.915 billion in the second quarter of 2015, up 3.5% from $1.851 billion in the first quarter of 2015 and up 19.7% from $1.600 billion in the second quarter of 2014.
Sequentially, the increase in equipment revenues was primarily due to a higher average revenue per device sold, partially offset by a decrease in the number of devices sold.
Year-over-year, the increase in equipment revenues was primarily due to an increase in the number of devices sold, including higher device upgrade volumes.

Total Revenues
T-Mobile is expected to again lead the industry in year-over-year total revenue growth in the second quarter of 2015.
Total revenues were $8.179 billion in the second quarter of 2015, up 5.2% from $7.778 billion in the first quarter of 2015 and up 13.8% from $7.185 billion in the second quarter of 2014.




18


 
OPERATING EXPENSES
Cost of Services
Cost of services was $1.397 billion in the second quarter of 2015, essentially flat compared to $1.395 billion in the first quarter of 2015 and down 3.9% from $1.453 billion in the second quarter of 2014. Sequentially, increases in cost of services due to the network expansion and 700 MHz A-Block build out were largely offset by lower lease expense. The year-over-year decrease was primarily due to network synergies realized from the decommissioning of the MetroPCS CDMA network.

Cost of Equipment Sales
Cost of equipment sales was $2.661 billion in the second quarter of 2015, down 0.7% from $2.679 billion in the first quarter of 2015 and up 20.1% from $2.215 billion in the second quarter of 2014. The sequential decrease was primarily due to a decrease in the number of devices sold, offset in part by a higher average cost per device sold. The year-over-year increase was primarily due to an increase in the number of devices sold, including higher device upgrade volumes.




19


Selling, General and Admin. (“SG&A”) Expenses
SG&A expenses were $2.438 billion in the second quarter of 2015, up 2.8% from $2.372 billion in the first quarter of 2015 and up 13.3% from $2.151 billion in the second quarter of 2014. The sequential and year-over-year increase was primarily due to higher employee-related expenses associated with an increase in the number of retail, administrative and customer support employees to support the growing customer base and higher commissions. Additionally, an increase in promotional costs contributed to the year-over-year increase.




20


 
ADJUSTED EBITDA
T-Mobile is expected to again lead the industry in year-over-year Adjusted EBITDA growth in the second quarter of 2015.
Adjusted EBITDA was $1.817 billion in the second quarter of 2015, up 30.9% from $1.388 billion in the first quarter of 2015 and up 25.2% from $1.451 billion in the second quarter of 2014.
Sequentially, the increase in Adjusted EBITDA was primarily due to higher service revenues from growth in the customer base, decreased losses on equipment sales, and the impact of the non-cash net revenue deferrals for Data Stash recognized in the first quarter of 2015, partially offset by higher selling, general and administrative expenses associated with customer growth.
Year-over-year, the increase in Adjusted EBITDA was primarily due to higher service revenues from growth in the customer base and lower cost of services, partially offset by higher selling, general and administrative expenses associated with customer growth.
Adjusted EBITDA in the second quarter of 2015 was impacted by the non-cash net revenue deferrals for Data Stash of $3 million, compared to the $112 million non-cash net revenue deferrals in the first quarter of 2015. Excluding the impacts of the non-cash net revenue deferrals for Data Stash, Adjusted EBITDA in the second quarter of 2015 increased 21.3% sequentially.
Adjusted EBITDA margin was 30% in the second quarter of 2015 compared to 24% in the first quarter of 2015 and 26% in the second quarter of 2014.




21


NET INCOME AND EARNINGS PER SHARE
Net income was $361 million in the second quarter of 2015 compared to a net loss of $63 million in the first quarter of 2015 and net income of $391 million in the second quarter of 2014. The sequential increase in net income was primarily due to higher operating income in the second quarter of 2015. The year-over-year decline was primarily due to gains on disposal of spectrum licenses of $747 million recognized in the second quarter of 2014, partially offset by a decrease in income tax expense primarily due to the impact of income tax benefits for discrete items recognized in the second quarter of 2015, including recent changes in state and local income tax laws and the recognition of certain federal tax credits.
Earnings per share was $0.42 in the second quarter of 2015 compared to a loss per share of $(0.09) in the first quarter of 2015 and earnings per share of $0.48 in the second quarter of 2014.
T-Mobile expects to report positive earnings per share for all the remaining quarters and the full-year of 2015.


CAPITAL EXPENDITURES
Cash capital expenditures for property and equipment were $1.191 billion in the second quarter of 2015 compared to $982 million in the first quarter of 2015 and $940 million in the second quarter of 2014. The sequential and year-over-year increase was primarily due to the timing of network spend in connection with T-Mobile’s modernization program and the build out for the 4G LTE on the 700 MHz A-Block and 1900 MHz PCS spectrum.




22


FREE CASH FLOW
Beginning in the second quarter of 2015, T-Mobile will report Free Cash Flow, which is defined as net cash provided by operating activities less cash capital expenditures, and cease reporting Simple Free Cash Flow, which is defined as Adjusted EBITDA less cash capital expenditures. T-Mobile believes that Free Cash Flow provides a more complete representation of the cash available to pay debt and provide further investment in the business.
Net cash provided by operating activities was $1.161 billion in the second quarter of 2015, compared to $489 million in the first quarter of 2015 and $970 million in the second quarter of 2014.
Free Cash Flow was a loss of $30 million in the second quarter of 2015, compared to a loss of $493 million in the first quarter of 2015 and Free Cash Flow of $30 million in the second quarter of 2014. Sequentially, the improvement in Free Cash Flow was due to higher operating income and increases from changes in net working capital, partially offset by higher cash capital expenditures. Year-over-year, the decrease was primarily due to decreases from changes in net working capital and higher cash capital expenditures, partially offset by higher operating income.
Adjusted Free Cash Flow was $73 million in the second quarter of 2015, compared to a loss of $422 million in the first quarter of 2015 and Adjusted Free Cash Flow of $35 million in the second quarter of 2014. Adjusted Free Cash Flow excludes decommissioning payments related to the one-time shutdown of the CDMA portion of the MetroPCS network from Free Cash Flow.
The Company continues to expect that Free Cash Flow will be positive for the full-year 2015.




23


CAPITAL STRUCTURE
Net debt, excluding tower obligations, at the end of the second quarter of 2015 was $19.7 billion.
Total debt, excluding tower obligations, at the end of the second quarter of 2015 was $22.4 billion and was comprised of short-term debt of $0.4 billion, long-term debt to affiliates of $5.6 billion, and long-term debt of $16.4 billion.
The ratio of net debt, excluding tower obligations, to Adjusted EBITDA for the trailing last twelve month (“LTM”) period was 3.1x at the end of the second quarter of 2015 compared to 3.3x at the end of the first quarter of 2015 and 3.4x at the end of the second quarter of 2014.
The Company’s cash position remains strong with $2.6 billion in cash at the end of the second quarter of 2015. The cash balance declined in the second quarter of 2015 compared to the end of the first quarter of 2015 due primarily to a decrease in accounts payable and accrued liabilities related to the timing of vendor payments.




24


 
GUIDANCE
T-Mobile expects to drive further customer momentum while delivering strong growth in Adjusted EBITDA.
With the success of T-Mobile's Simple Choice plan and the continued evolution of the Un-carrier strategy, branded postpaid net customer additions for full-year 2015 are now expected to be between 3.4 and 3.9 million, an increase from the previous guidance of 3.0 to 3.5 million.
For full-year 2015, T-Mobile expects Adjusted EBITDA to be in the range of $6.8 to $7.2 billion, which is unchanged from previous guidance despite the increase in branded postpaid net customer additions guidance.
Cash capital expenditures for full-year 2015 are expected to be in the range of $4.4 to $4.7 billion, which is unchanged from previous guidance.
T-Mobile’s financial guidance for full-year 2015 excludes any benefit from the impact of JUMP! On Demand. The Company intends to disclose the aggregate non-cash impact from JUMP! On Demand and Data Stash in future quarters. In the second quarter of 2015, there were no significant impacts to financial results from JUMP! On Demand and Data Stash.


 
OTHER EVENTS
J.D. Power Recognizes T-Mobile for Customer Care
On July 30, 2015, J.D. Power recognized T-Mobile for its leadership in Customer Care Performance, awarding the Company the highest ranking among full service wireless providers in the J.D. Power 2015 Wireless Customer Care Full-Service Study - Volume 2. Regaining the highest ranking reinforces T-Mobile’s track record as an organization with a strong focus and commitment to providing an outstanding customer experience whether you call in, come in to the store, or access online.
UPCOMING EVENTS (All dates and attendance tentative)
Oppenheimer 18th Annual Technology, Internet and Communications Conference, August 11-12, 2015, Boston, MA
Goldman Sachs 24th Annual Communacopia Conference, September 16-18, 2015, New York, NY
T-Mobile US, Inc. Q3 2015 Earnings Report, October 28, 2015



25


 
CONTACT INFORMATION
Press:                             
Media Relations                        
T-Mobile US, Inc.                                                
mediarelations@t-mobile.com                
http://newsroom.t-mobile.com                

Investor Relations:
Nils Paellmann, nils.paellmann@t-mobile.com
Ben Barrett, ben.barrett@t-mobile.com
Chezzarae Hart, chezzarae.hart@t-mobile.com
Cristal Dunkin, cristal.dunkin@t-mobile.com

877-281-TMUS or 212-358-3210
investor.relations@t-mobile.com
http://investor.t-mobile.com



26



T-Mobile US, Inc.
Condensed Consolidated Balance Sheets
(Unaudited)

(in millions, except share and per share amounts)
June 30,
2015
 
December 31,
2014
Assets
 
 
 
Current assets
 
 
 
Cash and cash equivalents
$
2,642

 
$
5,315

Accounts receivable, net of allowances of $91 and $83
1,827

 
1,865

Equipment installment plan receivables, net
3,503

 
3,062

Accounts receivable from affiliates
52

 
76

Inventories
1,135

 
1,085

Deferred tax assets, net
1,479

 
988

Other current assets
1,019

 
1,593

Total current assets
11,657

 
13,984

Property and equipment, net
16,910

 
16,245

Goodwill
1,683

 
1,683

Spectrum licenses
24,272

 
21,955

Other intangible assets, net
735

 
870

Equipment installment plan receivables due after one year, net
1,611

 
1,628

Other assets
320

 
288

Total assets
$
57,188

 
$
56,653

Liabilities and Stockholders' Equity
 
 
 
Current liabilities
 
 
 
Accounts payable and accrued liabilities
$
6,645

 
$
7,364

Current payables to affiliates
101

 
231

Short-term debt
386

 
87

Deferred revenue
574

 
459

Other current liabilities
558

 
635

Total current liabilities
8,264

 
8,776

Long-term debt
16,386

 
16,273

Long-term debt to affiliates
5,600

 
5,600

Long-term financial obligation
2,526

 
2,521

Deferred tax liabilities
5,306

 
4,873

Deferred rents
2,411

 
2,331

Other long-term liabilities
642

 
616

Total long-term liabilities
32,871

 
32,214

Commitments and contingencies
 
 
 
Stockholders' equity
 
 
 
5.50% Mandatory Convertible Preferred Stock Series A, par value $0.00001 per share, 100,000,000 shares authorized; 20,000,000 and 20,000,000 shares issued and outstanding; $1,000 and $1,000 aggregate liquidation value

 

Common Stock, par value $0.00001 per share, 1,000,000,000 shares authorized; 816,196,073 and 808,851,108 shares issued, 814,813,568 and 807,468,603 shares outstanding

 

Additional paid-in capital
38,595

 
38,503

Treasury stock, at cost, 1,382,505 and 1,382,505 shares issued

 

Accumulated other comprehensive income
1

 
1

Accumulated deficit
(22,543
)
 
(22,841
)
Total stockholders' equity
16,053

 
15,663

Total liabilities and stockholders' equity
$
57,188

 
$
56,653



27


T-Mobile US, Inc.
Condensed Consolidated Statements of Comprehensive Income (Loss)
(Unaudited)
 
Three Months Ended
 
Six Months Ended June 30,
(in millions, except shares and per share amounts)
June 30,
2015
 
March 31,
2015
 
June 30,
2014
 
2015
 
2014
Revenues
 
 
 
 
 
 
 
 
 
Branded postpaid revenues
$
4,075

 
$
3,774

 
$
3,511

 
$
7,849

 
$
6,958

Branded prepaid revenues
1,861

 
1,842

 
1,736

 
3,703

 
3,384

Wholesale revenues
164

 
158

 
172

 
322

 
346

Roaming and other service revenues
44

 
45

 
65

 
89

 
133

Total service revenues
6,144

 
5,819

 
5,484

 
11,963

 
10,821

Equipment revenues
1,915

 
1,851

 
1,600

 
3,766

 
3,048

Other revenues
120

 
108

 
101

 
228

 
191

Total revenues
8,179

 
7,778

 
7,185

 
15,957

 
14,060

Operating expenses
 
 
 
 
 
 
 
 
 
Cost of services, exclusive of depreciation and amortization shown separately below
1,397

 
1,395

 
1,453

 
2,792

 
2,917

Cost of equipment sales
2,661

 
2,679

 
2,215

 
5,340

 
4,501

Selling, general and administrative
2,438

 
2,372

 
2,151

 
4,810

 
4,247

Depreciation and amortization
1,075

 
1,087

 
1,129

 
2,162

 
2,184

Cost of MetroPCS business combination
34

 
128

 
22

 
162

 
34

Gains on disposal of spectrum licenses
(23
)
 

 
(747
)
 
(23
)
 
(757
)
Total operating expenses
7,582

 
7,661

 
6,223

 
15,243

 
13,126

Operating income
597

 
117

 
962

 
714

 
934

Other income (expense)
 
 
 
 
 
 
 
 
 
Interest expense to affiliates
(92
)
 
(64
)
 
(85
)
 
(156
)
 
(103
)
Interest expense
(257
)
 
(261
)
 
(271
)
 
(518
)
 
(547
)
Interest income
114

 
112

 
83

 
226

 
158

Other income (expense), net
1

 
(8
)
 
(12
)
 
(7
)
 
(18
)
Total other expense, net
(234
)
 
(221
)
 
(285
)
 
(455
)
 
(510
)
Income (loss) before income taxes
363

 
(104
)
 
677

 
259

 
424

Income tax expense (benefit)
2

 
(41
)
 
286

 
(39
)
 
184

Net income (loss)
361

 
(63
)
 
391

 
298

 
240

Dividends on preferred stock
(14
)
 
(14
)
 

 
(28
)
 

Net income (loss) attributable to common stockholders
$
347

 
$
(77
)
 
$
391

 
$
270

 
$
240

Other comprehensive loss, net of tax
 
 
 
 
 
 
 
 
 
Unrealized loss on available-for-sale securities, net of tax effect of $0, $0, $0, $0 and $(1)

 

 

 

 
(3
)
Other comprehensive loss, net of tax

 

 

 

 
(3
)
Total comprehensive income (loss)
$
361

 
$
(63
)
 
$
391

 
$
298

 
$
237

Earnings (loss) per share
 
 
 
 
 
 
 
 
 
Basic
$
0.43

 
$
(0.09
)
 
$
0.49

 
$
0.33

 
$
0.30

Diluted
$
0.42

 
$
(0.09
)
 
$
0.48

 
$
0.33

 
$
0.30

Weighted average shares outstanding
 
 
 
 
 
 
 
 
 
Basic
811,605,031

 
808,605,526

 
803,923,913

 
810,113,564

 
803,226,194

Diluted
821,122,537

 
808,605,526

 
813,556,137

 
819,548,539

 
812,903,135



28


T-Mobile US, Inc.
Condensed Consolidated Statements of Cash Flows
(Unaudited)
 
Six Months Ended June 30,
(in millions)
2015
 
2014
Operating activities
 
 
 
Net cash provided by operating activities
$
1,650

 
$
1,729

 
 
 
 
Investing activities
 
 
 
Purchases of property and equipment
(2,173
)
 
(1,887
)
Purchases of spectrum licenses and other intangible assets
(1,844
)
 
(2,367
)
Other, net
(12
)
 
(21
)
Net cash used in investing activities
(4,029
)
 
(4,275
)
 
 
 
 
Financing activities
 
 
 
Repayments of short-term debt for purchases of inventory, property and equipment, net
(248
)
 
(231
)
Other, net
(46
)
 
(34
)
Net cash used in financing activities
(294
)
 
(265
)
 
 
 
 
Change in cash and cash equivalents
(2,673
)
 
(2,811
)
 
 
 
 
Cash and cash equivalents
 
 
 
Beginning of period
5,315

 
5,891

End of period
$
2,642

 
$
3,080



29


T-Mobile US, Inc. Supplementary Operating and Financial Data

 
Quarter
 
Six Months Ended June 30,
(in thousands)
Q1 2014
 
Q2 2014
 
Q3 2014
 
Q4 2014
 
Q1 2015
 
Q2 2015
 
2014
 
2015
Customers, end of period
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Branded postpaid phone customers
23,054

 
23,633

 
24,807

 
25,844

 
26,835

 
27,595

 
23,633

 
27,595

Branded postpaid mobile broadband customers
568

 
897

 
1,102

 
1,341

 
1,475

 
1,723

 
897

 
1,723

Total branded postpaid customers
23,622

 
24,530

 
25,909

 
27,185

 
28,310

 
29,318

 
24,530

 
29,318

Branded prepaid customers
15,537

 
15,639

 
16,050

 
16,316

 
16,389

 
16,567

 
15,639

 
16,567

Total branded customers
39,159

 
40,169

 
41,959

 
43,501

 
44,699

 
45,885

 
40,169

 
45,885

M2M customers
3,822

 
4,047

 
4,269

 
4,421

 
4,562

 
4,529

 
4,047

 
4,529

MVNO customers
6,094

 
6,329

 
6,662

 
7,096

 
7,575

 
8,494

 
6,329

 
8,494

Total wholesale customers
9,916

 
10,376

 
10,931

 
11,517

 
12,137

 
13,023

 
10,376

 
13,023

Total customers, end of period
49,075

 
50,545

 
52,890

 
55,018

 
56,836

 
58,908

 
50,545

 
58,908


 
Quarter
 
Six Months Ended June 30,
(in thousands)
Q1 2014
 
Q2 2014
 
Q3 2014
 
Q4 2014
 
Q1 2015
 
Q2 2015
 
2014
 
2015
Net customer additions (losses)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Branded postpaid phone customers
1,256

 
579

 
1,175

 
1,037

 
991

 
760

 
1,835

 
1,751

Branded postpaid mobile broadband customers
67

 
329

 
204

 
239

 
134

 
248

 
396

 
382

Total branded postpaid customers
1,323

 
908

 
1,379

 
1,276

 
1,125

 
1,008

 
2,231

 
2,133

Branded prepaid customers
465

 
102

 
411

 
266

 
73

 
178

 
567

 
251

Total branded customers
1,788

 
1,010

 
1,790

 
1,542

 
1,198

 
1,186

 
2,798

 
2,384

M2M customers
220

 
225

 
222

 
152

 
141

 
(33
)
 
445

 
108

MVNO customers
383

 
235

 
333

 
434

 
479

 
919

 
618

 
1,398

Total wholesale customers
603

 
460

 
555

 
586

 
620

 
886

 
1,063

 
1,506

Total net customer additions
2,391

 
1,470

 
2,345

 
2,128

 
1,818

 
2,072

 
3,861

 
3,890

Note: Certain customer numbers may not add due to rounding.

 
Quarter
 
Six Months Ended June 30,
 
Q1 2014
 
Q2 2014
 
Q3 2014
 
Q4 2014
 
Q1 2015
 
Q2 2015
 
2014
 
2015
Branded postpaid phone churn
1.47
%
 
1.48
%
 
1.64
%
 
1.73
%
 
1.30
%
 
1.32
%
 
1.47
%
 
1.31
%
Branded prepaid churn
4.34
%
 
4.50
%
 
4.78
%
 
5.39
%
 
4.62
%
 
4.93
%
 
4.42
%
 
4.78
%






















30


T-Mobile US, Inc. Supplementary Operating and Financial Data (continued)

 
Quarter
 
Six Months Ended June 30,
 
Q1 2014
 
Q2 2014
 
Q3 2014
 
Q4 2014
 
Q1 2015
 
Q2 2015
 
2014
 
2015
Financial Metrics
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Service revenues (in millions)
$5,337
 
$5,484
 
$5,684
 
$5,870
 
$5,819
 
$6,144
 
$10,821
 
$11,963
Total revenues (in millions)
$6,875
 
$7,185
 
$7,350
 
$8,154
 
$7,778
 
$8,179
 
$14,060
 
$15,957
Adjusted EBITDA (in millions)
$1,088
 
$1,451
 
$1,346
 
$1,751
 
$1,388
 
$1,817
 
$2,539
 
$3,205
Adjusted EBITDA margin
20%
 
26%
 
24%
 
30%
 
24%
 
30%
 
23%
 
27%
Net income (loss) (in millions)
$(151)
 
$391
 
$(94)
 
$101
 
$(63)
 
$361
 
$240
 
$298
Cash capex - Property & Equipment (in millions)
$947
 
$940
 
$1,131
 
$1,299
 
$982
 
$1,191
 
$1,887
 
$2,173
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Revenue Metrics
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Branded postpaid ARPA
$108.97
 
$107.11
 
$109.80
 
$109.87
 
$108.04
 
$113.50
 
$108.02
 
$110.81
Branded postpaid ABPA
$129.74
 
$131.81
 
$138.73
 
$143.79
 
$145.03
 
$152.31
 
$130.79
 
$148.72
Branded postpaid accounts, end of period
10,812
 
11,017
 
11,297
 
11,506
 
11,831
 
12,061
 
11,017
 
12,061
Branded postpaid customers per account
2.18
 
2.23
 
2.29
 
2.36
 
2.39
 
2.43
 
2.23
 
2.43
Branded postpaid phone ARPU
$50.48
 
$49.32
 
$49.84
 
$48.26
 
$46.43
 
$48.19
 
$49.89
 
$47.33
Branded postpaid ABPU
$59.54
 
$59.79
 
$61.59
 
$61.80
 
$60.94
 
$63.29
 
$59.67
 
$62.14
Branded prepaid ARPU
$36.09
 
$37.16
 
$37.59
 
$37.51
 
$37.81
 
$37.83
 
$36.63
 
$37.82
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Devices
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Smartphone sales units (in millions)
6.9
 
6.2
 
6.9
 
8.0
 
8.0
 
7.4
 
13.1
 
15.4
Branded postpaid handset upgrade rate
7%
 
8%
 
9%
 
11%
 
8%
 
9%
 
15%
 
17%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Equipment Installment Plans
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
EIP financed (in millions)
$1,249
 
$1,342
 
$1,317
 
$1,902
 
$1,483
 
$1,697
 
$2,591
 
$3,180
EIP billings (in millions)
$657
 
$810
 
$967
 
$1,162
 
$1,292
 
$1,393
 
$1,467
 
$2,685
EIP receivables, net (in millions)
$3,086
 
$3,583
 
$3,963
 
$4,690
 
$4,842
 
$5,114
 
$3,583
 
$5,114
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Customer Quality
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
EIP receivables classified as prime
53%
 
53%
 
53%
 
54%
 
52%
 
52%
 
53%
 
52%
Total bad debt expense and losses from factoring arrangement (in millions)
$157
 
$164
 
$152
 
$150
 
$169
 
$156
 
$321
 
$325



31


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.

Adjusted EBITDA is reconciled to net income (loss) as follows:
 
Quarter
 
Six Months Ended June 30,
(in millions)
Q1 2014
 
Q2 2014
 
Q3 2014
 
Q4 2014
 
Q1 2015
 
Q2 2015
 
2014
 
2015
Net income (loss)
$
(151
)
 
$
391

 
$
(94
)
 
$
101

 
$
(63
)
 
$
361

 
$
240

 
$
298

Adjustments:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Interest expense to affiliates
18

 
85

 
83

 
92

 
64

 
92

 
103

 
156

Interest expense
276

 
271

 
260

 
266

 
261

 
257

 
547

 
518

Interest income
(75
)
 
(83
)
 
(97
)
 
(104
)
 
(112
)
 
(114
)
 
(158
)
 
(226
)
Other expense (income), net
6

 
12

 
14

 
(21
)
 
8

 
(1
)
 
18

 
7

Income tax expense (benefit)
(102
)
 
286

 
(117
)
 
99

 
(41
)
 
2

 
184

 
(39
)
Operating income (loss)
(28
)
 
962

 
49

 
433

 
117

 
597

 
934

 
714

Depreciation and amortization
1,055

 
1,129

 
1,138

 
1,090

 
1,087

 
1,075

 
2,184

 
2,162

Cost of MetroPCS business combination
12

 
22

 
97

 
168

 
128

 
34

 
34

 
162

Stock based compensation
49

 
63

 
45

 
54

 
56

 
71

 
112

 
127

Gains on disposal of spectrum licenses (1)

 
(731
)
 
11

 

 

 

 
(731
)
 

Other, net

 
6

 
6

 
6

 

 
40

 
6

 
40

Adjusted EBITDA
$
1,088

 
$
1,451

 
$
1,346

 
$
1,751

 
$
1,388

 
$
1,817

 
$
2,539

 
$
3,205


(1)
Gains on disposal of spectrum licenses may not agree to the Condensed Consolidated Statements of Comprehensive Income (Loss) primarily due to certain routine operating activities, such as insignificant or routine spectrum license exchanges that would be expected to reoccur, and are therefore included in Adjusted EBITDA.
























32


T-Mobile US, Inc.
Reconciliation of Non-GAAP Financial Measures to GAAP Financial Measures (continued)
(Unaudited)

The following tables illustrate the calculation of ARPA and ABPA and reconcile these measures to the related service revenues, which we consider to be the most directly comparable GAAP financial measure to ARPA and ABPA:

 
Quarter
 
Six Months Ended June 30,
(in millions, except average number of accounts, ARPA and ABPA)
Q1 2014
 
Q2 2014
 
Q3 2014
 
Q4 2014
 
Q1 2015
 
Q2 2015
 
2014
 
2015
Calculation of Branded Postpaid ARPA
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Branded postpaid service revenues
$
3,447

 
$
3,511

 
$
3,670

 
$
3,764

 
$
3,774

 
$
4,075

 
$
6,958

 
$
7,849

Divided by: Average number of branded postpaid accounts (in thousands) and number of months in period
10,543

 
10,928

 
11,141

 
11,421

 
11,645

 
11,966

 
10,736

 
11,806

Branded postpaid ARPA
$
108.97

 
$
107.11

 
$
109.80

 
$
109.87

 
$
108.04

 
$
113.50

 
$
108.02

 
$
110.81

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Calculation of Branded Postpaid ABPA
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Branded postpaid service revenues
$
3,447

 
$
3,511

 
$
3,670

 
$
3,764

 
$
3,774

 
$
4,075

 
$
6,958

 
$
7,849

Add: EIP billings
657

 
810

 
967

 
1,162

 
1,292

 
1,393

 
1,467

 
2,685

Total billings for branded postpaid customers
$
4,104

 
$
4,321

 
$
4,637

 
$
4,926

 
$
5,066

 
$
5,468

 
$
8,425

 
$
10,534

Divided by: Average number of branded postpaid accounts (in thousands) and number of months in period
10,543

 
10,928

 
11,141

 
11,421

 
11,645

 
11,966

 
10,736

 
11,806

Branded postpaid ABPA
$
129.74

 
$
131.81

 
$
138.73

 
$
143.79

 
$
145.03

 
$
152.31

 
$
130.79

 
$
148.72



33


T-Mobile US, Inc.
Reconciliation of Non-GAAP Financial Measures to GAAP Financial Measures (continued)
(Unaudited)

The following tables illustrate the calculation of ARPU and ABPU and reconcile these measures to the related service revenues, which we consider to be the most directly comparable GAAP financial measure to ARPU and ABPU:
 
Quarter
 
Six Months Ended June 30,
(in millions, except average number of customers, ARPU and ABPU)
Q1 2014
 
Q2 2014
 
Q3 2014
 
Q4 2014
 
Q1 2015
 
Q2 2015
 
2014
 
2015
Calculation of Branded Postpaid Phone ARPU
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Branded postpaid service revenues
$
3,447

 
$
3,511

 
$
3,670

 
$
3,764

 
$
3,774

 
$
4,075

 
$
6,958

 
$
7,849

Less: Branded postpaid mobile broadband revenues
(47
)
 
(54
)
 
(68
)
 
(92
)
 
(109
)
 
(135
)
 
(101
)
 
(244
)
Branded postpaid phone service revenues
$
3,400

 
$
3,457

 
$
3,602

 
$
3,672

 
$
3,665

 
$
3,940

 
$
6,857

 
$
7,605

Divided by: Average number of branded postpaid phone customers (in thousands) and number of months in period
22,447

 
23,368

 
24,091

 
25,359

 
26,313

 
27,250

 
22,908

 
26,781

Branded postpaid phone ARPU
$
50.48

 
$
49.32

 
$
49.84

 
$
48.26

 
$
46.43

 
$
48.19

 
$
49.89

 
$
47.33

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Calculation of Branded Postpaid ABPU
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Branded postpaid service revenues
$
3,447

 
$
3,511

 
$
3,670

 
$
3,764

 
$
3,774

 
$
4,075

 
$
6,958

 
$
7,849

Add: EIP billings
657

 
810

 
967

 
1,162

 
1,292

 
1,393

 
1,467

 
2,685

Total billings for branded postpaid customers
$
4,104

 
$
4,321

 
$
4,637

 
$
4,926

 
$
5,066

 
$
5,468

 
$
8,425

 
$
10,534

Divided by: Average number of branded postpaid customers (in thousands) and number of months in period
22,975

 
24,092

 
25,095

 
26,572

 
27,717

 
28,797

 
23,533

 
28,257

Branded postpaid ABPU
$
59.54

 
$
59.79

 
$
61.59

 
$
61.80

 
$
60.94

 
$
63.29

 
$
59.67

 
$
62.14

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Calculation of Branded Prepaid ARPU
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Branded Prepaid Service Revenues
$
1,648

 
$
1,736

 
$
1,790

 
$
1,812

 
$
1,842

 
$
1,861

 
$
3,384

 
$
3,703

Divided by: Average number of branded prepaid customers (in thousands) and number of months in period
15,221

 
15,569

 
15,875

 
16,097

 
16,238

 
16,396

 
15,395

 
16,317

Branded prepaid ARPU
$
36.09

 
$
37.16

 
$
37.59

 
$
37.51

 
$
37.81

 
$
37.83

 
$
36.63

 
$
37.82




















34


T-Mobile US, Inc.
Reconciliation of Non-GAAP Financial Measures to GAAP Financial Measures (continued)
(Unaudited)

Net debt (excluding Tower Obligations) to last twelve months adjusted EBITDA ratio is calculated as follows:

 
Three Months Ended
(in millions, except net debt ratio)
Mar 31,
2014
 
Jun 30,
2014
 
Sep 30,
2014
 
Dec 31,
2014
 
Mar 31,
2015
 
Jun 30,
2015
Short-term debt
$
151

 
$
272

 
$
1,168

 
$
87

 
$
467

 
$
386

Long-term debt to affiliates
5,600

 
5,600

 
5,600

 
5,600

 
5,600

 
5,600

Long-term debt
14,331

 
14,369

 
16,284

 
16,273

 
16,261

 
16,386

Less: Cash and cash equivalents
(5,471
)
 
(3,080
)
 
(5,787
)
 
(5,315
)
 
(3,032
)
 
(2,642
)
Net Debt (excluding Tower Obligations)
$
14,611

 
$
17,161

 
$
17,265

 
$
16,645

 
$
19,296

 
$
19,730

Divided by: Last twelve months Adjusted EBITDA (1)
$
4,936

 
$
5,122

 
$
5,124

 
$
5,636

 
$
5,936

 
$
6,302

Net Debt (excluding Tower Obligations) to Last Twelve Months Adjusted EBITDA Ratio
3.0

 
3.4

 
3.4

 
3.0

 
3.3

 
3.1


(1)
March 31, 2014 Adjusted EBITDA for the last twelve months includes Pro Forma combined results from Q2 2013 to reflect the results of MetroPCS prior to the business combination.

Free cash flow and adjusted free cash flow are calculated as follows:

 
Quarter
 
Six Months Ended June 30,
(in millions)
Q1 2014
 
Q2 2014
 
Q3 2014
 
Q4 2014
 
Q1 2015
 
Q2 2015
 
2014
 
2015
Net cash provided by operating activities
$
759

 
$
970