T-Mobile USA, Inc. ("T-Mobile") today reported its third quarter 2012
results, which demonstrate that successful execution of the Company's
Challenger Strategy continues to improve performance in key operational
and financial areas. T-Mobile ended the third quarter of 2012 with 33.3
million customers, a net addition of 160,000 customers compared to the
second quarter of 2012. The sequential improvement was driven primarily
by the continued expansion of branded prepaid customers and a reduction
in branded contract net customer losses. The Company's branded prepaid
customer growth was its best quarterly performance of this year and
exceeded the annual growth reported in 2011.
In the quarter, the Company reported adjusted OIBDA of $1.2 billion and
an adjusted OIBDA margin of 29%, which are down sequentially and from
the third quarter of 2011. As expected, third quarter 2012 adjusted
OIBDA reflects higher advertising expenditures related to the Company's
Adjusted OIBDA and OIBDA
(dollars in millions)
Property and equipment, net of accumulated depreciation of $17,410
and $15,599, respectively
Other intangible assets, net of accumulated amortization of $237
and $216, respectively
Unrealized gain (loss) on cash flow hedges and foreign currency
Unrealized gain (loss) on available-for-sale securities
Adjustments to reconcile net (loss) income to net cash provided by
T-MOBILE USAReconciliation of Non-GAAP Financial Measures to GAAP
Financial Measures(dollars in millions)(unaudited)
This press release 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 from the non-GAAP financial measures to the most
directly comparable GAAP financial measures are provided below following
Selected Data and the financial statements.
Adjusted OIBDA is reconciled to operating income as follows:
This news release includes "forward-looking statements" within the
meaning of the Private Securities Litigation Reform Act of 1995. The
statements in this news release regarding the business outlook, expected
performance and forward-looking guidance, as well as other statements
that are not historical facts, are forward looking statements. The words
"estimate," "project," "forecast," "intend," "expect," "believe,"
"target," "providing guidance" and similar expressions are intended to
identify forward-looking statements.
Forward-looking statements are estimates and projections reflecting
management's judgment based on currently available information and
involve a number of risks and uncertainties that could cause actual
results to differ materially from those suggested by the forward-looking
statements. With respect to these forward-looking statements, management
has made assumptions regarding, among other things, customer and network
usage, customer growth and retention, pricing, operating costs, the
timing of various events and the economic and regulatory environment.
About T-Mobile USA
Based in Bellevue, Wash., T-Mobile USA, Inc. is the U.S. wireless
operation of Deutsche Telekom AG (OTCQX: DTEGY). By the end of the third
quarter of 2012, approximately 131 million mobile customers were served
by the mobile communication segments of the Deutsche Telekom group -
33.3 million by T-Mobile USA - all via a common technology platform
based on GSM and UMTS and additionally HSPA+ 21/HSPA+ 42. T-Mobile USA's
innovative wireless products and services help empower people to connect
to those who matter most. Multiple independent research studies continue
to rank T-Mobile USA among the highest in numerous regions throughout
the U.S. in wireless customer care and call quality.
In order to provide comparability with the results of other US wireless
carriers, all financial amounts are in US dollars and are based on
accounting principles generally accepted in the United States ("GAAP").
T-Mobile USA results are included in the consolidated results of
Deutsche Telekom, but differ from the information contained herein as,
among other things, Deutsche Telekom reports financial results in Euros
and in accordance with International Financial Reporting Standards
For more information, please visit http://www.T-Mobile.com.
T-Mobile is a federally registered trademark of Deutsche Telekom AG. For
further information on Deutsche Telekom, please visit www.telekom.de/investor-relations.
Definitions of Terms
Since all companies do not calculate these figures in the same manner,
the information contained in this press release may not be comparable to
similarly titled measures reported by other companies.
1. A customer is defined as a SIM card with a unique T-Mobile USA mobile
identity number which generates revenue. Branded contract and branded
prepaid customers include FlexPay customers depending on the type of
rate plan selected. FlexPay customers with a contract are included in
branded contract customers, and FlexPay customers without a contract are
included in branded prepaid customers. Additionally, machine-to-machine
customers (also known as M2M) are included within contract customers,
some of which may not have monthly recurring charges required under
contract. Mobile virtual network operators (MVNO) are classified as
prepaid customers as they most closely align with this customer segment.
2. Prior quarter amounts have been restated to conform to current period
customer reporting classifications.
3. Churn is defined as the number of customers whose service was
discontinued, expressed as a rounded monthly percentage of the average
number of customers during the specified period. We believe that churn,
which is a measure of customer retention and loyalty, provides relevant
and useful information and is used by our management to evaluate the
operating performance of our business.
4. Average Revenue Per User ("ARPU") represents the average monthly
service revenue earned from customers. ARPU is calculated by dividing
service revenues for the specified period by the average customers
during the period, and further dividing by the number of months in the
period and rounding to the nearest dollar. We believe ARPU provides
management with useful information to evaluate the revenues generated
from our customer base.
Service revenues include contract, prepaid, and roaming and other
service revenues, and do not include equipment sales and other revenues.
Data services revenues (including messaging and non-messaging revenue)
are a non-GAAP financial measure and are included in the various
components of service revenues. Handset insurance revenues are included
in contract service revenues.
Branded revenues include contract and prepaid revenues, and do not
include wholesale (M2M and MVNO), roaming, other service revenues,
equipment sales, and other revenues.
5. Data ARPU is defined as total data revenues divided by average total
customers during the period, rounded to the nearest ten cents. Total
data revenues include data revenues from contract customers, prepaid
customers, Wi-Fi revenues and data roaming revenues. Branded data
revenues exclude data revenues from M2M customers, MVNO, Wi-Fi revenues
and data roaming revenues. The relative value of data revenues from
bundled unlimited voice and data plans (including a relative value for
messaging and non-messaging data revenue) are included in total data
6. Operating Income Before Interest, Depreciation, Amortization and
Impairment ("OIBDA") is a non-GAAP financial measure, which we define as
operating income before depreciation, amortization and impairment
charges. In a capital-intensive industry such as wireless
telecommunications, we believe OIBDA, as well as the associated
percentage margin calculation, to be meaningful measures of our
operating performance. OIBDA should not be construed as an alternative
to operating income or net income as determined in accordance with GAAP,
as an alternative to cash flows from operating activities as determined
in accordance with GAAP or as a measure of liquidity. We use OIBDA as an
integral part of our planning and internal financial reporting
processes, to evaluate the performance of our business by senior
management and to compare our performance with that of many of our
competitors. We believe that operating income is the financial measure
calculated and presented in accordance with GAAP that is the most
directly comparable to OIBDA. OIBDA is adjusted to exclude transactions
that are not reflective of our ongoing operating performance and is
detailed in the Reconciliation of Non-GAAP Financials Measures to GAAP
Financial Measures schedule.
7. Adjusted OIBDA margin is a non-GAAP financial measure, which we
define as adjusted OIBDA (as described in Note 6 above) divided by
8. Capital expenditures consist of amounts paid for construction and the
purchase of property and equipment.
9. High speed packet access plus (HSPA+ 21 and HSPA+ 42 technologies)
offers customers a 4G experience, including data speeds comparable to
other 4G network speeds currently available to mobile device users in
the United States.
10. Smartphones are defined as UMTS/HSPA/HSPA+ 21/HSPA+ 42 enabled
converged devices distributed by T-Mobile USA, which integrate voice and
Supplementary Operating and Financial Data - US GAAP
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