Market Overview

T-Mobile Delivers Its Best Q2 Ever

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1.6M Customer Net Additions; Record Service Revenues of $7.9B;
Record Low Postpaid Phone Churn of 0.95%; Strong Net Income of $782M and
EPS of $0.92; Record Adjusted EBITDA of $3.2B

T-Mobile US, Inc. (NASDAQ:TMUS):

Industry-Leading Customer Growth

  • 1.6 million total net additions – 21st consecutive quarter with more
    than 1 million net additions
  • 1.0 million total branded postpaid net additions – supported by
    continued strong postpaid other net additions
  • 686,000 branded postpaid phone net additions – led industry for the
    18th consecutive quarter
  • 91,000 branded prepaid net additions – flat year-over-year despite
    increased competitive activity in the market
  • Record low 0.95% branded postpaid phone churn, down 15 bps
    year-over-year

Strong Financial Performance (all
percentages year-over-year
)

  • Service revenues up 7% to $7.9 billion - led industry for the 17th
    consecutive quarter
  • Total revenues up 4% to $10.6 billion
  • Net income up 35% to $782 million and diluted earnings per share (EPS)
    of $0.92
  • Adjusted EBITDA(1) up 7% to $3.2 billion
  • Net cash provided by operating activities(3) up 14% to $1.3
    billion
  • Free Cash Flow(1)(3) up 61% to $774 million

Network Expansion Continues, Garners Industry
Accolades

  • T-Mobile now covers 323 million people with 4G LTE - targeting 325
    million people by year-end 2018
  • Aggressive deployment of 600 MHz in Q2 2018, augmenting existing
    low-band capabilities on 700 MHz
  • Fastest LTE network according to Ookla; outright winner in 5 of 7
    categories in most recent OpenSignal study

Continued Strong Outlook for 2018

  • Increased target for branded postpaid net customer additions of 3.0 to
    3.6 million
  • Net income is not available on a forward-looking basis(2)
  • Increased Adjusted EBITDA target of $11.5 to $11.9 billion including
    leasing revenues of $0.6 to $0.7 billion(1)
  • Cash purchases of property and equipment, excluding capitalized
    interest, of $4.9 to $5.3 billion, unchanged from the prior target
    range, now expected to come in at the high end of the range. This
    includes expenditures for 5G deployment
  • Three-year compound annual growth rates (CAGRs) for Net cash provided
    by operating activities and Free Cash Flow from FY 2016 to FY 2019
    also unchanged at 7% - 12% and 46% - 48%, respectively(1)(3)

________________________________________________________________

(1)   Adjusted EBITDA is a non-GAAP financial measure and Free Cash Flow
is a non-GAAP financial metric. These non-GAAP financial items
should be considered in addition to, but not as a substitute for,
the information provided in accordance with GAAP. Reconciliations
for these non-GAAP financial items to the most directly comparable
financial items based on GAAP as of June 30, 2018 are provided in
the Reconciliation of Non-GAAP Financial Measures to GAAP Financial
Measures tables.
(2)

We are not able to forecast net income on a forward-looking basis
without unreasonable efforts due to the high variability and
difficulty in predicting certain items that affect GAAP net income
including, but not limited to, income tax expense, stock-based
compensation expense and interest expense. Adjusted EBITDA should
not be used to predict net income as the difference between the
two measures is variable.

(3) In Q1 2018, the adoption of the new cash flow accounting standard
resulted in a reclassification of cash flows related to the deferred
purchase price from securitization transactions from operating
activities to investing activities. In addition, cash flows related
to debt prepayment and extinguishment costs were reclassified from
operating activities to financing activities. In Q1 2018, we
redefined Free Cash Flow to reflect the above changes in
classification and present cash flows on a consistent basis for
investor transparency. The effects of this change are applied
retrospectively and are provided in the Reconciliation of Non-GAAP
Financial Measures to GAAP Financial Measures tables.
 

T-Mobile US, Inc. (NASDAQ:TMUS) reported record results in the second
quarter of 2018 with industry-leading branded customer growth,
record-high service revenues, record-high Q2 profitability, and
record-low postpaid phone churn. The Un-carrier has changed wireless for
good and proven that putting customers first is the best way to deliver
sustained, industry-leading results. T-Mobile continues to balance
growth and profitability - delivering records in both categories in the
second quarter of 2018.

T-Mobile once again outperformed the competition as the company
continues to optimize its offers for key segments of the market, expand
into new geographies and set the standard for customer experience. This
has resulted in growth in postpaid phone net additions both sequentially
and year-over-year as the Un-carrier again leads the industry in the
second quarter with nearly twice the aggregate postpaid phone net
additions of Verizon, AT&T, Sprint and Comcast combined and more than
three times the net additions of our next closest competitor, Comcast.
In addition, the company delivered record-low postpaid phone churn of
0.95% - the best result in company history. These results have
translated into record-high service revenues, which T-Mobile has now
grown year-over-year for 17 quarters in a row.

"T-Mobile just recorded its best Q2 in company history," said John
Legere, CEO of T-Mobile. "That means 21 quarters with over one million
net adds, record-high service revenues, industry-leading postpaid phone
net additions, and record-low postpaid phone churn. Our business is
strong, our strategy is working and we won't stop!"

Industry-Leading Customer Growth

T-Mobile continues to deliver industry-leading customer growth, and Q2
2018 was no different. We once again led the industry in branded
postpaid phone customer net additions, capturing about two thirds of the
segment. Customers continue to choose the Un-carrier over the
competition as we put all our energy and efforts into giving our
customers more value and treating them right.

     
Quarter

Six Months Ended
June 30,

(in thousands, except churn) Q2 2018     Q1 2018     Q2 2017 2018     2017
Total net customer additions(2) 1,579 1,433 1,333 3,012 2,475
Branded postpaid net customer additions 1,017 1,005 817 2,022 1,731
Branded postpaid phone net customer additions (1)(2) 686 617 533 1,303 1,331
Branded postpaid other customer additions (1) 331 388 284 719 400
Branded prepaid net customer additions(2) 91 199 94 290 480
Total customers, end of period (2)(3) 75,619 74,040 69,562 75,619 69,562
Branded postpaid phone churn 0.95 % 1.07 % 1.10 % 1.01 % 1.14 %
Branded prepaid churn 3.81 % 3.94 % 3.91 % 3.87 % 3.96 %
(1)   During the third quarter of 2017, we retitled our "Branded postpaid
mobile broadband customers" category to "Branded postpaid other
customers" and included DIGITS customers and reclassified 253,000
DIGITS customer net additions from our "Branded postpaid phone
customers" category for the second quarter of 2017, when the DIGITS
product was released.
(2) As a result of the acquisition of Iowa Wireless Services, LLC (IWS),
we included an adjustment of 13,000 branded postpaid phone and 4,000
branded prepaid IWS customers in our reported subscriber base as of
January 1, 2018. Additionally, as a result of the acquisition of
Layer3 TV, we included an adjustment of 5,000 branded prepaid
customers in our reported subscriber base as of January 22, 2018.
Customer activity post acquisition was included in our net customer
additions for Q1 2018.
(3) We believe current and future regulatory changes have made the
Lifeline program offered by our wholesale partners uneconomical. We
will continue to support our wholesale partners offering the
Lifeline program, but have excluded the Lifeline customers from our
reported wholesale subscriber base resulting in the removal of 4.4
million reported wholesale customers as of the beginning of Q2 2017.
 
  • Total net customer additions were 1.6 million in Q2 2018,
    bringing our total customer count to 75.6 million. Q2 2018 marked the
    21st straight quarter in which T-Mobile generated more than 1 million
    total net customer additions.
  • Branded postpaid net customer additions were 1.0 million in Q2
    2018, up 200,000 from Q2 2017. Strength in postpaid phone net
    additions and postpaid other net additions, driven by wearables, drove
    the year-over-year increase.
  • Branded postpaid phone net customer additions were 686,000 in
    Q2 2018, up 153,000 from Q2 2017. This marks the 18th consecutive
    quarter in which T-Mobile has led the industry in this category.
    Sequentially and year-over-year, branded postpaid phone net customer
    additions increased due to continued growth in existing and Greenfield
    markets, the growing success of new customer segments such as T-Mobile
    for Business, T-Mobile ONE Unlimited 55+, and T-Mobile ONE Military,
    as well as record-low churn.
  • Branded postpaid other net customer additions were 331,000 in
    Q2 2018, up 47,000 from Q2 2017. Year-over-year the increase was due
    to higher gross customer additions from connected devices,
    specifically the Apple watch, partially offset by lower DIGITS gross
    customer additions and higher deactivations from a growing customer
    base.
  • Branded postpaid phone churn was a record-low of 0.95% in Q2
    2018, down 15 basis points from Q2 2017, primarily due to increased
    customer satisfaction and loyalty from ongoing improvements to network
    quality, industry-leading customer service and the overall value of
    our offerings in the marketplace.
  • Branded prepaid net customer additions were 91,000 in Q2 2018,
    down 3,000 from Q2 2017.
  • Branded prepaid churn was 3.81% in Q2 2018, down 10 basis
    points compared to Q2 2017, primarily due to the continued impact from
    the optimization of our third-party distribution channels which was
    substantially completed during Q1 2017, partially offset by higher
    deactivations from a growing customer base and increased competitive
    activity in the marketplace.

Strong Financial Performance

Our strong customer results translated into record financial results.
T-Mobile again posted record-high service revenues, and Q2 marks the
17th quarter in a row where we led the industry in year-over-year
service revenue percentage growth. In addition, the company posted
strong net income and record Adjusted EBITDA.

                 
(in millions, except EPS) Quarter

Six Months Ended
June 30,

Q2 2018
vs.
Q1 2018

Q2 2018
vs.
Q2 2017

YTD 2018
vs.
YTD 2017

Q2 2018     Q1 2018     Q2 2017 2018     2017
Total service revenues $ 7,931 $ 7,806 $ 7,445 $ 15,737 $ 14,774 1.6 % 6.5 % 6.5 %
Total revenues 10,571 10,455 10,213 21,026 19,826 1.1 % 3.5 % 6.1 %
Net income 782 671 581 1,453 1,279 16.5 % 34.6 % 13.6 %
EPS 0.92 0.78 0.67 1.69 1.47 17.9 % 37.3 % 15.0 %
Adjusted EBITDA (1) 3,233 2,956 3,012 6,189 5,680 9.4 % 7.3 % 9.0 %
Cash purchases of property and equipment, including capitalized
interest
1,629 1,366 1,347 2,995 2,875 19.3 % 20.9 % 4.2 %
Net cash provided by operating activities(2) 1,261 770 1,106 2,031 1,714 63.8 % 14.0 % 18.5 %
Free Cash Flow (2) 774 668 482 1,442 667 15.9 % 60.6 % 116.2 %
(1)   Adjusted EBITDA is a non-GAAP financial measure and Free Cash Flow
is a non-GAAP financial metric. These non-GAAP financial items
should be considered in addition to, but not as a substitute for,
the information provided in accordance with GAAP. Reconciliations
for these non-GAAP financial items to the most directly comparable
financial items based on GAAP as of June 30, 2018 are provided in
the Reconciliation of Non-GAAP Financial Measures to GAAP Financial
Measures tables.
(2) In Q1 2018, the adoption of the new cash flow accounting standard
resulted in a reclassification of cash flows related to the deferred
purchase price from securitization transactions from operating
activities to investing activities. In addition, cash flows related
to debt prepayment and extinguishment costs were reclassified from
operating activities to financing activities. In Q1 2018, we
redefined Free Cash Flow to reflect the above changes in
classification and present cash flows on a consistent basis for
investor transparency. The effects of this change are applied
retrospectively and are provided in the Reconciliation of Non-GAAP
Financial Measures to GAAP Financial Measures tables.
 
  • Total service revenues increased 7% year-over-year to a
    record-high $7.9 billion, which marked the 17th consecutive quarter of
    leading the industry in year-over-year service revenue percentage
    growth.
  • Total revenues increased 4% year-over-year to $10.6 billion,
    driven primarily by growth in service revenues, partially offset by
    lower equipment revenues.
  • Branded postpaid phone Average Revenue per User (ARPU) was
    $46.52 in Q2 2018, down 0.3% from Q1 2018 and 1.2% from Q2 2017.
    Sequentially, the decrease was due to the continued adoption of tax
    inclusive plans. Year-over-year, the decrease was primarily due to the
    continued adoption of tax inclusive plans, a decrease in the non-cash
    net benefit from Data Stash, partially offset by the positive impact
    from our T-Mobile ONE rate plans and a net reduction in service
    promotional activities. For full-year 2018, we continue to expect
    branded postpaid phone ARPU to be generally stable compared to
    full-year 2017, excluding the impact from the new revenue standard.
  • Branded prepaid ARPU was $38.48 in Q2 2018, down 0.4% from Q2
    2017, primarily due to promotional activities.
  • Net income increased 35% year-over-year to a strong $782
    million in Q2 2018. The positive impacts to net income in Q2 2018 from
    the adoption of the new revenue standard and hurricane related
    reimbursements were $62 million and $45 million, respectively. The
    negative impact to net income in Q2 2018 from the proposed Sprint
    transaction was $39 million.
  • EPS increased by $0.25 to $0.92 in Q2 2018. The positive
    impacts to EPS in Q2 2018 from the adoption of the new revenue
    standard and hurricane related reimbursement were $0.07 and $0.06,
    respectively. The negative impact to EPS in Q2 2018 from the proposed
    Sprint transaction was $0.05.
  • Adjusted EBITDA increased 7% year-over-year to a record-high
    $3.2 billion in Q2 2018. The positive impacts to Adjusted EBITDA in Q2
    2018 from the adoption of the new revenue standard and hurricane
    related reimbursements were $84 million and $70 million, respectively.
  • Cash purchases of property and equipment increased by 21%
    year-over-year to $1.6 billion primarily from continued deployment of
    our low band spectrum, including 600 MHz. Cash purchases of property
    and equipment included capitalized interest of $102 million in Q2 2018
    and $34 million in Q2 2017.
  • Net cash provided by operating activities increased 14.0%
    year-over-year to $1.3 billion in Q2 2018. The increase resulted from
    an increase in net income, partially offset by higher net cash
    outflows from working capital.
  • Free Cash Flow increased 61% year-over-year to $774 million in
    Q2 2018 due to higher proceeds related to our deferred purchase price
    from securitization transactions and higher net cash provided by
    operating activities, partially offset by higher cash capex.

Network Expansion Continues, Garners Industry
Accolades

T-Mobile continues to increase and expand the speed and capacity of our
network to better serve our customers. Our advancements in network
technology and our spectrum resources ensure we can continue to increase
the capabilities of our network as the industry moves towards 5G.

Highlights from Q2 2018 included:

  • Operating America's Fastest 4G LTE network. In Q2 2018, we were once
    again the nation's fastest LTE network, realizing average 4G LTE
    download speeds of 31.8 Mbps, and average 4G LTE upload speeds of 11.9
    Mbps. This was the 18th consecutive quarter that we have led the
    industry in both download and upload speeds.
  • Leading in Ookla's "2018 U.S. Mobile Performance Report." In H1 2018,
    millions of actively initiated tests showed that T-Mobile customers
    receive the fastest speeds nationwide including fastest speeds in 31
    states, in rural areas, and tied for first for fastest speeds in the
    Top 100 metropolitan areas.
  • Winning 5 out of 7 categories outright in OpenSignal's "State of
    Mobile Networks: USA" report. Based on billions of measurements,
    T-Mobile won in 4G download speed, 3G download speed, overall download
    speed, 4G upload speed, and 3G latency. T-Mobile also tied for first
    in 4G availability, providing customers with an LTE signal 94% of the
    time.
  • Expanding our coverage breadth. T-Mobile now covers 323 million people
    with 4G LTE. By the end of 2018, we are targeting to cover 325 million
    people.
  • Clearing and deploying 600 MHz spectrum. At the end of Q2 2018,
    T-Mobile owned a nationwide average of 31 MHz of 600 MHz low band
    spectrum covering 328 million POPs. We expect to clear spectrum
    covering approximately 130 million POPs by year-end 2018 and target
    approximately 260 million POPs by year-end 2019. 600MHz deployments
    continue at an accelerated pace with spectrum covering more than 950
    cities and towns in 33 states already lit up. Combining 600MHz and
    700MHz, we have deployed low band spectrum to nearly 289 million POPs.
  • Introducing 5G across 600 MHz and millimeter wave spectrum. In
    addition to building out 5G on 600 MHz, T-Mobile intends to bring 5G
    to 30 cities in 2018 using both 600 MHz and millimeter wave spectrum.
    The network will harness 4G and 5G bandwidths simultaneously (dual
    connectivity) and will be ready for the introduction of the first 5G
    smartphones in 2019.

Continued Strong 2018 Outlook

In 2018, we expect postpaid net customer additions between 3.0 and 3.6
million, an increase from the prior target range of 2.6 to 3.3 million.

Net income is not available on a forward-looking basis.

Adjusted EBITDA is expected to be between $11.5 and $11.9 billion, an
increase from the prior target range of $11.4 to $11.8 billion. Our
Adjusted EBITDA target includes leasing revenues of $0.6 to $0.7
billion, unchanged from the prior guidance. Including the estimated
impact of the new revenue standard, Adjusted EBITDA is expected to
increase by an additional $0.2 to $0.5 billion for a total guidance
range of $11.7 to $12.4 billion.

For full-year 2018, we continue to expect branded postpaid phone ARPU to
be generally stable compared to full-year 2017, excluding the impact
from the new revenue standard.

Cash purchases of property and equipment, excluding capitalized
interest, are expected to be between $4.9 and $5.3 billion, unchanged
from the prior target range, but are now expected to come in at the high
end of the range. This includes expenditures for 5G deployment.

The adoption of the new cash flow accounting standard resulted in a
reclassification of cash flows related to our deferred purchase price
from securitization transactions from operating activities to investing
activities. In addition, cash flows related to debt prepayment and
extinguishment costs were reclassified from operating activities to
financing activities. In Q1 2018, we redefined Free Cash Flow to reflect
the above changes in classification and present cash flows on a
consistent basis for investor transparency. Please see the
reconciliation of non-GAAP measures in this earnings release for details
on the revised definition, which was applied retroactively to 2017.

The three-year CAGR guidance (2016 - 2019) for net cash provided by
operating activities and Free Cash Flow is unchanged at 7% - 12% and 46%
- 48%, respectively.

In 2018, we continue to expect the following impacts from the adoption
of the new revenue standard:

  • Service revenues $(0.2) - $(0.1) billion
  • Total revenues $0.3 - $0.5 billion
  • Operating expenses $(0.1) - $0.1 billion
  • Net income $0.2 - $0.4 billion
  • Adjusted EBITDA $0.2 - $0.5 billion
  • We expect postpaid phone ARPU to be negatively affected by changes in
    revenue allocation under the new revenue standard.

Financial Results

For more details on T-Mobile's Q2 2018 financial results, including the
Investor Factbook with detailed financial tables and reconciliations of
certain historical non-GAAP measures disclosed in this release to the
most comparable measures under GAAP, please visit T-Mobile US, Inc.'s
Investor Relations website at http://investor.t-mobile.com.

T-Mobile Social Media

Investors and others should note that we announce material financial and
operational information to our investors using our investor relations
website, press releases, SEC filings and public conference calls and
webcasts. We also intend to use the @TMobileIR Twitter account (https://twitter.com/TMobileIR)
and the @JohnLegere Twitter (https://twitter.com/JohnLegere),
Facebook and Periscope accounts, which Mr. Legere also uses as a means
for personal communications and observations, as means of disclosing
information about the Company and its services and for complying with
its disclosure obligations under Regulation FD. The information we post
through these social media channels may be deemed material. Accordingly,
investors should monitor these social media channels in addition to
following our press releases, SEC filings and public conference calls
and webcasts. The social media channels that we intend to use as a means
of disclosing the information described above may be updated from time
to time as listed on our investor relations website.

About T-Mobile US, Inc.

As America's Un-carrier, T-Mobile US, Inc. (NASDAQ:TMUS) is redefining
the way consumers and businesses buy wireless services through leading
product and service innovation. Our advanced nationwide 4G LTE network
delivers outstanding wireless experiences to approximately 76 million
customers who are unwilling to compromise on quality and value. Based in
Bellevue, Washington, T-Mobile US provides services through its
subsidiaries and operates its flagship brands, T-Mobile and MetroPCS.
For more information, please visit http://www.t-mobile.com
or join the conversation on Twitter using $TMUS.

Q2 2018 Earnings Call, Livestream and Webcast
Access Information

Access via Phone (audio only):

Date:     August 1, 2018
Time: 4:30 p.m. (EDT)
Call-in Numbers US/Canada: 866-575-6534
International: +1 786-460-7205
Participant Passcode: 7079522

Please plan on accessing the earnings call ten minutes prior to the
scheduled start time.

Access via Social Media:

The @TMobileIR Twitter account will live-tweet the earnings call.

Submit Questions via Text, Twitter, or Facebook:

Text:     Send a text message to 313131, enter the keyword TMUS followed by a
space
Twitter: Send a tweet to @TMobileIR or @JohnLegere using $TMUS
Facebook: Post a comment to John Legere's Facebook Earnings post

Access via Webcast:

The earnings call will be broadcast live via our Investor Relations
website at http://investor.t-mobile.com.
A replay of the earnings call will be available for two weeks starting
shortly after the call concludes and can be accessed by dialing
888-203-1112 (toll free) or +1 719-457-0820 (international). The
passcode required to listen to the replay is 7079522.

To automatically receive T-Mobile financial news by e-mail, please visit
the T-Mobile Investor Relations website, http://investor.t-mobile.com,
and subscribe to E-mail Alerts.

Forward-Looking Statements

This news release includes "forward-looking statements" within the
meaning of the U.S. federal securities laws. Any statements made herein
that are not statements of historical fact, including statements
about T-Mobile US, Inc.'s plans, outlook, beliefs, opinions,
projections, guidance, strategy, store openings, position within the
industry relative to its competitors, deployment of spectrum and
expected network modernization and other advancements, are
forward-looking statements. Generally, forward-looking statements may be
identified by words such as "anticipate," "expect," "suggests," "plan,"
"project," "believe," "intend," "estimates," "targets," "views," "may,"
"will," "forecast," "outlook," and other similar expressions. The
forward-looking statements speak only as of the date made, are based on
current assumptions and expectations, and involve a number of risks and
uncertainties. Important factors that could affect future results and
cause those results to differ materially from those expressed in the
forward-looking statements include, among others, the following: the
failure to obtain, or delays in obtaining, required regulatory approvals
for the proposed transaction with Sprint, and the risk that such
approvals may result in the imposition of conditions that could
adversely affect the combined company or the expected benefits of the
proposed transaction with Sprint Corporation ("Sprint"), or the failure
to satisfy any of the other conditions to the proposed transaction with
Sprint on a timely basis or at all; the occurrence of events that may
give rise to a right of one or both of the parties to terminate the
Business Combination Agreement with Sprint; adverse effects on the
market price of our or Sprint's common stock and on our or Sprint's
operating results because of a failure to complete the proposed
transaction in the anticipated timeframe or at all; inability to obtain
the financing contemplated to be obtained in connection with the
proposed transaction on the expected terms or timing or at all; the
ability of us, Sprint and the combined company to make payments on debt
or to repay existing or future indebtedness when due or to comply with
the covenants contained therein; adverse changes in the ratings of our
or Sprint's debt securities or adverse conditions in the credit markets;
negative effects of the announcement, pendency or consummation of the
proposed transaction on the market price of our or Sprint's common stock
and on our or Sprint's operating results, including as a result of
changes in key customer, supplier, employee or other business
relationships; significant costs related to the proposed transaction,
including financing costs, and unknown liabilities; failure to realize
the expected benefits and synergies of the proposed transaction in the
expected timeframes or at all; costs or difficulties related to the
integration of Sprint's network and operations into our network and
operations; the risk of litigation or regulatory actions related to the
proposed transaction; the inability of us, Sprint or the combined
company to retain and hire key personnel; the risk that certain
contractual restrictions contained in the Business Combination Agreement
during the pendency of the proposed transaction could adversely affect
our or Sprint's ability to pursue business opportunities or strategic
transactions; effects of changes in the regulatory environment in which
we and Sprint operate; adverse economic or political conditions in the
U.S. and international markets; competition, industry consolidation, and
changes in the market for wireless services could negatively affect our
ability to attract and retain customers; the effects of any future
merger, investment, or acquisition involving us, as well as the effects
of mergers, investments, or acquisitions in the technology, media and
telecommunications industry; challenges in implementing our business
strategies or funding our operations, including payment for additional
spectrum or network upgrades; the possibility that we may be unable to
renew our spectrum licenses on attractive terms or acquire new spectrum
licenses at reasonable costs and terms; difficulties in managing growth
in wireless data services, including network quality; material changes
in available technology and the effects of such changes, including
product substitutions and deployment costs and performance; the timing,
scope and financial impact of our deployment of advanced network and
business technologies; the impact on our networks and business from
major technology equipment failures; breaches of our and/or our
third-party vendors' networks, information technology and data security;
natural disasters, terrorist attacks or similar incidents; unfavorable
outcomes of existing or future litigation; any changes in the regulatory
environments in which we operate, including any increase in restrictions
on the ability to operate our networks; any disruption or failure of our
third parties' or key suppliers' provisioning of products or services;
material adverse changes in labor matters, including labor campaigns,
negotiations or additional organizing activity, and any resulting
financial, operational and/or reputational impact; the ability to make
payments on our debt or to repay our existing indebtedness when due or
to comply with the covenants contained therein; adverse change in the
ratings of our debt securities or adverse conditions in the credit
markets; changes in accounting assumptions that regulatory agencies,
including the Securities and Exchange Commission ("SEC"), may require,
which could result in an impact on earnings; changes in tax laws,
regulations and existing standards and the resolution of disputes with
any taxing jurisdictions; the possibility that the reset process under
our trademark license with Deutsche Telekom AG results in changes to the
royalty rates for our trademarks; and other risks described in our
filings with the SEC. You should not place undue reliance on these
forward-looking statements. We do not undertake to update
forward-looking statements, whether as a result of new information,
future events or otherwise, except as required by law.

T-Mobile US, Inc.
Reconciliation of Non-GAAP Financial
Measures to GAAP Financial Measures

(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 for the non-GAAP financial measures to the most directly
comparable GAAP financial measures are provided below. T-Mobile is not
able to forecast net income on a forward-looking basis without
unreasonable efforts due to the high variability and difficulty in
predicting certain items that affect GAAP net income including, but not
limited to, income tax expense, stock-based compensation expense and
interest expense. Adjusted EBITDA should not be used to predict net
income as the difference between the two measures is variable.

Adjusted EBITDA is reconciled to net income as follows:

     
Quarter

Six Months Ended
June 30,

(in millions) Q1 2017     Q2 2017     Q3 2017     Q4 2017     Q1 2018     Q2 2018 2017     2018
Net income $ 698 $ 581 $ 550 $ 2,707 $ 671 $ 782 $ 1,279 $ 1,453
Adjustments:
Interest expense 339 265 253 254 251 196 604 447
Interest expense to affiliates 100 131 167 162 166 128 231 294
Interest income (7 ) (6 ) (2 ) (2 ) (6 ) (6 ) (13 ) (12 )
Other (income) expense, net (2 ) 92 (1 ) (16 ) (10 ) 64 90 54
Income tax expense (benefit) (91 ) 353   356   (1,993 ) 210   286   262   496  
Operating income 1,037 1,416 1,323 1,112 1,282 1,450 2,453 2,732
Depreciation and amortization 1,564 1,519 1,416 1,485 1,575 1,634 3,083 3,209
Stock-based compensation (1) 67 72 83 85 96 106 139 202
Cost associated with proposed Sprint transaction 41 41
Other, net (2)   5     29   3   2   5   5  
Adjusted EBITDA $ 2,668   $ 3,012   $ 2,822   $ 2,711   $ 2,956   $ 3,233   $ 5,680   $ 6,189  
(1)   Stock-based compensation includes payroll tax impacts and may not
agree to stock-based compensation expense in the condensed
consolidated financial statements.
(2) Other, net may not agree to the Condensed Consolidated Statements of
Comprehensive Income primarily due to certain non-routine operating
activities, such as other special items that would not be expected
to reoccur, and are therefore excluded in Adjusted EBITDA.
 

Adjusted EBITDA - Earnings before Interest expense, net of Interest
income, Income tax expense, depreciation and amortization expense,
non-cash stock-based compensation and certain expenses not reflective of
T-Mobile's ongoing operating performance. Adjusted EBITDA margin
represents Adjusted EBITDA divided by service revenues. Adjusted EBITDA
is a non-GAAP financial measure utilized by T-Mobile's management to
monitor the financial performance of our operations. T-Mobile uses
Adjusted EBITDA internally as a metric to evaluate and compensate its
personnel and management for their performance, and as a benchmark to
evaluate T-Mobile's operating performance in comparison to its
competitors. Management believes analysts and investors use Adjusted
EBITDA as a supplemental measure to evaluate overall operating
performance and facilitate comparisons with other wireless
communications companies because it is indicative of T-Mobile's ongoing
operating performance and trends by excluding the impact of interest
expense from financing, non-cash depreciation and amortization from
capital investments, non-cash stock-based compensation, network
decommissioning costs and costs related to the proposed Sprint
transaction, as they are not indicative of T-Mobile's ongoing operating
performance, as well as certain other nonrecurring income and expenses.
Adjusted EBITDA has limitations as an analytical tool and should not be
considered in isolation or as a substitute for income from operations,
net income or any other measure of financial performance reported in
accordance with U.S. Generally Accepted Accounting Principles ("GAAP").

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 Net income
and Adjusted EBITDA ratios are calculated as follows:

                     
(in millions, except net debt ratio) Mar 31,
2017
Jun 30,
2017
Sep 30,
2017
Dec 31,
2017
Mar 31,
2018
Jun 30,
2018
Short-term debt $ 7,542 $ 522 $ 558 $ 1,612 $ 3,320 $ 1,004
Short-term debt to affiliates 680 445 320
Long-term debt 13,105 13,206 13,163 12,121 12,127 12,065
Long-term debt to affiliates 9,600 14,086 14,586 14,586 14,586 14,581
Less: Cash and cash equivalents (7,501 ) (181 ) (739 ) (1,219 ) (2,527 ) (215 )
Net debt (excluding Tower Obligations) $ 22,746   $ 28,313   $ 27,568   $ 27,100   $ 27,951   $ 27,755  
Divided by: Last twelve months Net income $ 1,679   $ 2,035   $ 2,219   $ 4,536   $ 4,509   $ 4,710  
Net Debt (excluding Tower Obligations) to last twelve months Net
income
13.5   13.9   12.4   6.0   6.2   5.9  
Divided by: Last twelve months Adjusted EBITDA $ 10,493   $ 10,976   $ 11,109   $ 11,213   $ 11,501   $ 11,722  
Net Debt (excluding Tower Obligations) to last twelve months
Adjusted EBITDA Ratio
2.2   2.6   2.5   2.4   2.4   2.4  
 

Net debt - Short-term debt, short-term debt to affiliates, long-term
debt (excluding tower obligations), and long-term debt to affiliates,
less cash and cash equivalents.

Free Cash Flow(1) is calculated as follows:

     
Quarter

Six Months Ended
June 30,

(in millions) Q1 2017     Q2 2017     Q3 2017     Q4 2017     Q1 2018     Q2 2018 2017     2018
Net cash provided by operating activities $ 608 $ 1,106 $ 1,252 $ 865 $ 770 $ 1,261 $ 1,714 $ 2,031
Cash purchases of property and equipment (1,528 ) (1,347 ) (1,441 ) (921 ) (1,366 ) (1,629 ) (2,875 ) (2,995 )
Proceeds related to beneficial interests in securitization
transactions
1,134 882 1,110 1,193 1,295 1,323 2,016 2,618
Cash payments for debt prepayment or debt extinguishment costs (29 ) (159 )     (31 ) (181 ) (188 ) (212 )
Free Cash Flow $ 185   $ 482   $ 921   $ 1,137   $ 668   $ 774   $ 667   $ 1,442  
Net cash (used in) provided by investing activities $ (416 ) $ (6,251 ) $ (345 ) $ 267   $ (462 ) $ (306 ) $ (6,667 ) $ (768 )
Net cash provided by (used in) financing activities $ 1,809   $ (2,175 ) $ (349 ) $ (652 ) $ 1,000   $ (3,267 ) $ (366 ) $ (2,267 )
(1)   In Q1 2018, the adoption of the new cash flow accounting standard
resulted in a reclassification of cash flows related to the deferred
purchase price from securitization transactions from operating
activities to investing activities. In addition, cash flows related
to debt prepayment and extinguishment costs were reclassified from
operating activities to financing activities. In Q1 2018, we
redefined Free Cash Flow to reflect the above changes in
classification and present cash flows on a consistent basis for
investor transparency. The effects of this change are applied
retrospectively.
 

Free Cash Flow - Net cash provided by operating activities less cash
purchases of property and equipment, including proceeds related to
beneficial interests in securitization transactions and less cash
payments for debt prepayment of debt extinguishment costs. Free Cash
Flow is utilized by T-Mobile's management, investors, and analysts to
evaluate cash available to pay debt and provide further investment in
the business.

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

(Unaudited)

Free Cash Flow(1) three-year CAGR is calculated as follows:

         
FY FY  
(in millions, except CAGR Range) 2016 2019 Guidance Range CAGR Range
Net cash provided by operating activities $ 2,779 $ 3,405     $ 3,855 7 %   12 %
Cash purchases of property and equipment (4,702 ) (5,100 ) (5,400 ) 3 % 5 %
Proceeds related to beneficial interests in securitization
transactions
3,356 6,195 6,195
Cash payments for debt prepayment or debt extinguishment costs     (50 )
Free Cash Flow $ 1,433   $ 4,600   $ 4,600   46 % 48 %
(1)   In Q1 2018, the adoption of the new cash flow accounting standard
resulted in a reclassification of cash flows related to the deferred
purchase price from securitization transactions from operating
activities to investing activities. In addition, cash flows related
to debt prepayment and extinguishment costs were reclassified from
operating activities to financing activities. In Q1 2018, we
redefined Free Cash Flow to reflect the above changes in
classification and present cash flows on a consistent basis for
investor transparency. The effects of this change are applied
retrospectively.
 

T-Mobile US, Inc.
Reconciliation of Operating Measures to
Service Revenues

(Unaudited)

The following tables illustrate the calculation of our operating
measures ARPU and Average Billings Per User (ABPU) and reconcile these
measures to the related service revenues:

     
(in millions, except average number of customers, ARPU and ABPU) Quarter

Six Months Ended
June 30,

Q1 2017     Q2 2017     Q3 2017     Q4 2017     Q1 2018     Q2 2018 2017     2018
Calculation of Branded Postpaid Phone ARPU
Branded postpaid service revenues $ 4,725 $ 4,820 $ 4,920 $ 4,983 $ 5,070 $ 5,164 $ 9,545 $ 10,234
Less: Branded postpaid other revenues (225 ) (255 ) (294 ) (303 ) (259 ) (272 ) (480 ) (531 )
Branded postpaid phone service revenues $ 4,500   $ 4,565   $ 4,626   $ 4,680   $ 4,811   $ 4,892   $ 9,065   $ 9,703  
Divided by: Average number of branded postpaid phone customers (in
thousands) and number of months in period
31,564 32,329 32,852 33,640 34,371 35,051 31,946 34,711
Branded postpaid phone ARPU (1) $ 47.53   $ 47.07   $ 46.93   $ 46.38   $ 46.66   $ 46.52   $ 47.29   $ 46.59  
 
Calculation of Branded Postpaid ABPU
Branded postpaid service revenues $ 4,725 $ 4,820 $ 4,920 $ 4,983 $ 5,070 $ 5,164 $ 9,545 $ 10,234
EIP billings 1,402 1,402 1,481 1,581 1,698 1,585 2,804 3,283
Lease revenues 324   234   159   160   171   177   558   348  
Total billings for branded postpaid customers $ 6,451   $ 6,456   $ 6,560   $ 6,724   $ 6,939   $ 6,926   $ 12,907   $ 13,865  
Divided by: Average number of branded postpaid customers (in
thousands) and number of months in period
34,740 35,636 36,505 37,436 38,458 39,559 35,188 39,009
Branded postpaid ABPU $ 61.89   $ 60.40   $ 59.89   $ 59.88   $ 60.14   $ 58.37   $ 61.14   $ 59.24  
 
Calculation of Branded Prepaid ARPU
Branded prepaid service revenues $ 2,299 $ 2,334 $ 2,376 $ 2,371 $ 2,402 $ 2,402 $ 4,633 $ 4,804
Divided by: Average number of branded prepaid customers (in
thousands) and number of months in period
19,889   20,131   20,336   20,461   20,583   20,806   20,010   20,695  
Branded prepaid ARPU $ 38.53   $ 38.65   $ 38.93   $ 38.63   $ 38.90   $ 38.48   $ 38.59   $ 38.69  
(1)   Branded postpaid phone ARPU includes the reclassification of 43,000
DIGITS average customers and related revenue to the "Branded
postpaid other customers" category for the second quarter of 2017.
 

Average Revenue Per User (ARPU) - Average monthly service revenues
earned from customers. Service revenues for the specified period divided
by the average customers during the period, further divided by the
number of months in the period.

Branded postpaid phone ARPU excludes mobile broadband and DIGITS
customers and related revenues.

Average Billings per User (ABPU) - Average monthly branded postpaid
service revenues earned from customers plus monthly equipment
installment plan (EIP) billings and lease revenues divided by the
average branded postpaid customers during the period, further divided by
the number of months in the period. T-Mobile believes branded postpaid
ABPU is indicative of estimated cash collections, including device
financing payments, from T-Mobile's postpaid customers each month.

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