T-Mobile Delivers Record Financial Results in Q3 2017, Raises Guidance for 2017 — Once Again

October 23, 2017

Records for Service Revenues, Net Cash Provided by Operating
Activities and Free Cash Flow with Strong Net Income of $550 Million,
and Record Q3 Adjusted EBITDA of $2.8 Billion

BELLEVUE, Wash.–(BUSINESS WIRE)–T-Mobile US, Inc. (NASDAQ: TMUS):

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

Record service revenues of $7.6 billion, up 7% — expect to lead
industry in growth for 14th quarter in a row
$10.0 billion total revenues, up 8% — expect to lead the industry in
growth for 17th time in last 18 quarters
Strong net income of $550 million, up 50%. Diluted earnings per share
("EPS") of $0.63, up 50%
Record Q3 $2.8 billion Adjusted EBITDA, up 5%(1). Adjusted
EBITDA excluding spectrum gains up 12%
Record net cash provided by operating activities of $2.4 billion, up
36%
Record free cash flow of $921 million, up 59%(1)

Customer Growth Expected to Lead the Industry:

1.3 million total net additions — 18 straight quarters of adding more
than 1 million
817,000 total branded postpaid net additions — expect to lead industry
for the 7th consecutive quarter
595,000 branded postpaid phone net additions — expect to lead the
industry for the 15th consecutive quarter
226,000 branded prepaid net additions — led by the success of MetroPCS
1.23% postpaid phone churn — down 9 bps YoY

Strong Network and Distribution Expansion:

316 million Americans covered today and targeting 321 million by the
end of 2017
15 quarters in a row with the fastest download and upload speeds —
widening the gap versus the competition
600 MHz deployment underway, more than 1.2 million sq mi to be clear
in 2017, first sites lit up in Q3, first handset hit the market in
October with another device expected to be ready for the 2017 Holiday
season
3,000 total new stores planned for 2017, with 1,200 new T-Mobile and
1,300 net new MetroPCS stores opened year-to-date

Continued strong outlook for 2017:

Raising and narrowing guidance range for branded postpaid net customer
additions to 3.3 – 3.6 million from 3.0 – 3.6 million
Net income is not available on a forward-looking basis(2)
Raising and narrowing Adjusted EBITDA target for the second time this
year to $10.8 – $11.0 billion from $10.5 – $10.9 billion, which
includes unchanged guidance on leasing revenues of $0.85 – $0.95
billion(1)
Maintaining guidance of $4.8 – $5.1 billion of cash purchases of
property and equipment, excluding capitalized interest; expect to be
at the high end of our guidance range
Three-year compound annual growth rates (CAGRs) for net cash provided
by operating activities and free cash flow from FY 2016 to FY 2019
remain unchanged at 15% – 18% and 45% – 48%, respectively(1)

(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
GAAP financial items are provided in the financial tables on pages
7-10.

(2)

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.

T-Mobile US, Inc. (NASDAQ: TMUS) reported record financial results in
the third quarter of 2017 with best-ever service revenues, net cash
provided by operating activities and free cash flow. The Un-carrier also
posted strong net income and record Q3 Adjusted EBITDA. These results
demonstrate our ability to translate customer growth into financial
growth as we continue to generate momentum. In Q3, we delivered strong
customer results across the board, including 1.3 million total net
customer additions. That marks 18 consecutive quarters that T-Mobile has
added more than 1 million total customers and we expect to continue
leading the industry in postpaid phone growth again in Q3. As a result
of this continued strong performance, we are raising our guidance for
2017 — again.

Customers are continuing to choose T-Mobile over the competition because
they get more value for their hard-earned dollar. Q3 was no different as
we unveiled our latest industry changing move: Netflix On Us. The
carriers focus on pushing bigger, fatter, pricier packages of content
and services on their customers, while T-Mobile partnered with Netflix
to give customers what they want — at no extra cost. In addition,
customers are finding out that America’s Best Unlimited Network just
keeps getting better. We continue to expand the depth and breadth of our
network, and started rolling out 600 MHz spectrum in Q3 well ahead of
schedule. The network expansion has enabled our distribution expansion,
which is progressing ahead of schedule, and will bring real competition
to every corner of the U.S. and sets T-Mobile up for more growth in the
future.

"Just step back and look at these financial results — they’re
incredible! Record service revenues, record free cash flow, record Q3
Adjusted EBITDA — and that’s on top of 18 quarters in a row with more
than one million customers added," said John Legere, President and CEO
of T-Mobile. "We’re delivering results that no one else can match and
have proven time and time again that we know how to fight for customers
and win for shareholders. We won’t stop!"

Strong Financial Performance

Our strong financial performance in Q3 2017 continues to prove
T-Mobile's Un-carrier strategy is a winning formula.

(in millions, except Diluted EPS)	Quarter	Nine Months Ended September 30,	Q3 2017 vs. Q2 2017	Q3 2017 vs. Q3 2016	2017 vs. 2016
Q3 2017	Q2 2017	Q3 2016	2017	2016
Total service revenues	$	7,629	$	7,445	$	7,133	$	22,403	$	20,599	2	%	7	%	9	%
Total revenues(1)	10,019	10,213	9,305	29,845	27,256	(2	)%	8	%	9	%
Net income	550	581	366	1,829	1,070	(5	)%	50	%	71	%
Diluted EPS	0.63	0.67	0.42	2.10	1.24	(6	)%	50	%	69	%
Adjusted EBITDA(1)	2,822	3,012	2,689	8,502	8,032	(6	)%	5	%	6	%
Cash purchases of property and equipment, including capitalized interest	1,441	1,347	1,159	4,316	3,843	7	%	24	%	12	%
Net cash provided by operating activities	2,362	1,829	1,740	5,904	4,533	29	%	36	%	30	%
Free Cash Flow	921	482	581	1,588	690	91	%	59	%	130	%

(1)	The amortized imputed discount on EIP receivables previously recognized as Interest income has been retrospectively reclassified as Other revenues. The effects of this change in accounting principle are provided in the financial tables.

Total service revenues increased 7% year-over-year in Q3 2017
to $7.6 billion which is expected to mark the 14th quarter in a row
that T-Mobile has led the industry in year-over-year service revenue
percentage growth. The negative impact from hurricanes was $31 million
in Q3 2017.
Total revenues increased 8% in Q3 2017 to $10.0 billion which
is expected to mark the 17th time in the last 18 quarters that
T-Mobile has led the industry in total revenue percentage growth
year-over-year. The negative impact from hurricanes was $39 million in
Q3 2017.
Branded postpaid phone Average Revenue per User (ARPU) was
$46.93 in Q3 2017, down 0.3% from Q2 2017 and down 2.5% from Q3 2016
primarily due to the continued adoption of T-Mobile ONE including
taxes and fees, dilution from promotional activities and negative
hurricane related impacts of $0.19, partially offset by the impact of
the MVNO transaction and Data Stash for the year-over-year period.
T-Mobile continues to expect that branded postpaid phone ARPU in
full-year 2017 will be generally stable compared to full-year 2016,
with some quarterly variations driven by the actual migrations to
T-Mobile ONE rate plans, inclusive of Un-carrier Next.
Branded prepaid ARPU was a record-high $38.93 in Q3 2017, up
2.4% from Q3 2016, primarily due to continued growth of MetroPCS
customers who generate higher ARPU, partially offset by negative
hurricane related impacts of $0.18.
Net income increased 50% year-over-year in Q3 2017 to $550
million. Net income as a percentage of service revenue was 7% in Q3
2017, up from 5% in Q3 2016. The negative impact on net income from
hurricane related losses in Texas, Florida and Puerto Rico from lost
revenue, assets damaged or destroyed and other costs incurred was $90
million in Q3 2017. As of September 30, 2017, our assessment of losses
is ongoing and we expect additional expenses to be incurred and
customer activity to be impacted in Q4 2017 primarily related to our
operations in Puerto Rico. We have not recognized any potential
insurance recoveries related to those hurricane losses as we continue
to assess the damage and work with our insurance carriers.
Diluted EPS increased 50% year-over-year in Q3 2017 to $0.63.
The negative impact from hurricanes for Q3 2017 was $0.10.
Adjusted EBITDA increased 5% year-over-year in Q3 2017 to a Q3
record-high of $2.8 billion primarily from higher service revenues and
lower losses on equipment, partially offset by higher SG&A costs,
higher cost of services expense, lower gains on disposal of spectrum
licenses and a $148 million negative impact from hurricanes. Excluding
spectrum gains from all periods, Adjusted EBITDA growth was 12%
year-over-year. Adjusted EBITDA margin as a percentage of service
revenue was 37% in Q3 2017, down from 38% in Q3 2016. The decrease was
primarily driven by lower gains on disposal of spectrum licenses
compared to prior year period.
Cash purchases of property and equipment increased 24%
year-over-year in Q3 2017 to $1.4 billion and included capitalized
interest of $29 million in Q3 2017 compared to $17 million in Q3 2016.
Net cash provided by operating activities increased 36%
year-over-year in Q3 2017 to $2.4 billion. The increase was primarily
due to higher net income and higher non-cash adjustments to net income
and a lower net use from working capital changes.
Free cash flow increased 59% year-over-year in Q3 2017 to a
record $921 million. The increase was primarily due to the increase in
net cash provided by operating activities, partially offset by an
increase in cash purchases of property and equipment.

Customer Growth Expected to Lead the Industry

We listen to customers, solve their pain points and give them unmatched
service on America's Best Unlimited Network. Our formula is simple, but
our straightforward approach has completely disrupted the wireless
industry for nearly half a decade and forced the competition to respond
to our moves.

Quarter	Nine Months Ended September 30,
(in thousands, except churn)	Q3 2017	Q2 2017	Q3 2016	2017	2016
Total net customer additions	1,329	1,333	1,970	3,804	6,072
Branded postpaid net customer additions	817	817	969	2,548	2,900
Branded postpaid phone net customer additions(1)	595	533	851	1,926	2,374
Branded postpaid other customers(1)	222	284	118	622	526
Branded prepaid net customer additions	226	94	684	706	1,967
Total customers, end of period(2)	70,731	69,562	69,354	70,731	69,354
Branded postpaid phone churn	1.23	%	1.10	%	1.32	%	1.18	%	1.30	%

(1)

During the third quarter of 2017, we retitled our “Branded postpaid
mobile broadband customers” category to “Branded postpaid other
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)

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
160,000 and 4,368,000 reported wholesale customers as of the
beginning of the third quarter of 2017 and the second quarter of
2017, respectively. No further Lifeline adjustments are expected in
future periods.

Total net customer additions were 1.3 million in Q3 2017,
bringing our total customer count to 70.7 million. Q3 2017 marks 18
straight quarters in which T-Mobile generated more than 1 million
total net customer additions.
Branded postpaid net customer additions were 817,000 in Q3
2017, which is expected to lead the industry for the 7th consecutive
quarter.
Branded postpaid phone net customer additions were 595,000 in
Q3 2017, driven by back to school seasonality and strong customer
response to promotional activities and Un-carrier initiatives,
including Netflix On Us. Q3 2017 is expected to mark the 15th
consecutive quarter that T-Mobile has led the industry in this
category. While growth accelerated sequentially, the increase was less
than last year primarily due to lower gross customer additions from
increased competitive activity in the marketplace, the split and shift
in iPhone launch timing and the negative impact from hurricanes.
Branded postpaid phone churn was 1.23% in Q3 2017, down 9 basis
points from Q3 2016.
Branded prepaid net customer additions were 226,000 in Q3 2017,
down year-over-year due to higher deactivations from a growing
customer base and increased competitive activity in the marketplace.
Branded prepaid net customer additions were up sequentially primarily
due to the success of MetroPCS promotions in the quarter and lower
churn for legacy T-Mobile prepaid customers, partially offset by
higher MetroPCS deactivations from increased competitive activity in
the marketplace.
Branded prepaid churn was 4.25% in Q3 2017, up 34 basis points
compared to Q2 2017 and up 43 basis points compared to Q3 2016.

Strong Network and Distribution Expansion

Our network and distribution expansion is allowing us to bring America's
Best Unlimited Network to every coverable inch of the country and
provide rural America with real wireless choice. Our network remains the
fastest in America, a title we have held for the last 15 quarters in a
row. With more spectrum being cleared and deployed and the
implementation of new technology, we will continue to broaden and deepen
our coverage for the benefit of all customers.

During Q3 2017, we have continued to make investments to expand and
improve our network including:

Clearing and deploying 600 MHz spectrum. At least 10 MHz covering more
than 1.2 million square miles will be clear and ready to deploy in
2017, with one compatible device out already and another expected to
be ready for the 2017 Holiday season. We also expect the majority of
new devices introduced in 2018 to be compatible with our 600 MHz
spectrum. We have deployed 600 MHz spectrum in Cheyenne, Wyoming, and
Scarborough, Maine, and expect to have additional cities and areas in
multiple states come online in 2017. We will also use a portion of our
600 MHz spectrum holdings to deploy America’s first nationwide 5G
network in the 2019 / 2020 time frame.
Expanding our 4G LTE coverage breadth to 316 million people. We are
targeting 4G LTE coverage of 321 million people by the end of 2017.
Growing our distribution footprint by 30 to 40 million POPs from the
beginning of 2016 through year-end 2017. We plan to open 3,000 stores
in 2017, including 1,500 T-Mobile stores and 1,500 MetroPCS stores. To
date, we have built 1,200 new T-Mobile stores and 1,300 net new
MetroPCS stores.

Continued strong outlook for 2017

We are raising and narrowing our postpaid net customer additions
guidance to 3.3 – 3.6 million from 3.0 – 3.6 million.

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

We are raising and narrowing our Adjusted EBITDA target for the second
time this year to between $10.8 and $11.0 billion, up from the prior
guidance range of $10.5 – $10.9 billion. Our Adjusted EBITDA target
includes unchanged guidance on leasing revenues of $0.85 – $0.95 billion.

The guidance for cash purchases of property and equipment, excluding
capitalized interest, is unchanged at $4.8 – $5.1 billion, but we expect
to be at the high end of the guidance range.

The three-year CAGRs guidance for net cash provided by operating
activities and Free Cash Flow from full-year 2016 to full-year 2019 also
remains unchanged at 15% – 18% and 45% – 48%, respectively.

Financial Results

For more details on T-Mobile’s Q3 2017 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.

Check out the video blog from John Legere, covering our quarterly
results here newsroom.t-mobile.com/q3-2017.

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 70.7 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.

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, 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," 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: adverse
economic or political conditions in the U.S. and international markets;
competition in the wireless services market, including new competitors
entering the industry as technologies converge; the effects any future
merger or acquisition involving us, as well as the effects of mergers or
acquisitions in the technology, media and telecommunications industry;
challenges in implementing our business strategies or funding our
wireless 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; 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; 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; 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; and
changes in tax laws, regulations and existing standards and the
resolution of disputes with any taxing jurisdictions; and other risks
described in our filings with the SEC, including those described in our
most recently filed Annual Report on Form 10-K. 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.
Effect of Change in Accounting Principle
(Unaudited)

Effective January 1, 2017, we began presenting the amortization of the
imputed discount on our Equipment Installment Plan (“EIP”) receivables
as Other revenue on our Condensed Consolidated Statements of
Comprehensive Income. Prior to the change, the imputed interest was
presented as Interest income. We made this change to provide a better
representation of amounts earned from our major ongoing operations,
align with industry practice and enhance comparability. We have applied
this change in accounting principle retrospectively and presented the
effect of the change in the table below. For additional information, see
Note 1 – Basis of Presentation of the Notes to the Consolidated
Financial Statements included in Part I, Item 1 of our Form 10-Q to be
filed on or about October 23, 2017.

(in millions, except for margin %'s and Net Debt Ratios)	Quarter	Nine Months Ended September 30,
Q1 2016	Q2 2016	Q3 2016	Q4 2016	Q1 2017	Q2 2017	Q3 2017	2016	2017
EIP imputed discount	$	65	$	65	$	59	$	59	$	62	$	68	$	74	$	189	$	204
Other revenue – as adjusted	$	235	$	211	$	224	$	249	$	241	$	262	$	272	$	670	$	775
Other revenues – unadjusted	170	146	165	190	179	194	198	481	571
Total revenues – as adjusted	$	8,664	$	9,287	$	9,305	$	10,234	$	9,613	$	10,213	$	10,019	$	27,256	$	29,845
Total revenues – unadjusted	8,599	9,222	9,246	10,175	9,551	10,145	9,945	27,067	29,641
Operating income – as adjusted	$	1,168	$	833	$	1,048	$	1,001	$	1,037	$	1,416	$	1,323	$	3,049	$	3,776
Operating income – unadjusted	1,103	768	989	942	975	1,348	1,249	2,860	3,572
Interest income – as adjusted	$	3	$	3	$	3	$	4	$	7	$	6	$	2	$	9	$	15
Interest income – unadjusted	68	68	62	63	69	74	76	198	219
Total other expense, net – as adjusted	$	(417	)	$	(461	)	$	(450	)	$	(395	)	$	(430	)	$	(482	)	$	(417	)	$	(1,328	)	$	(1,329	)
Total other expense, net – unadjusted	(352	)	(396	)	(391	)	(336	)	(368	)	(414	)	(343	)	(1,139	)	(1,125	)
Net income – as adjusted	$	479	$	225	$	366	$	390	$	698	$	581	$	550	$	1,070	$	1,829
Net income – unadjusted	479	225	366	390	698	581	550	1,070	1,829
Adjusted EBITDA – as adjusted	$	2,814	$	2,529	$	2,689	$	2,607	$	2,668	$	3,012	$	2,822	$	8,032	$	8,502
Adjusted EBITDA – unadjusted	2,749	2,464	2,630	2,548	2,606	2,944	2,748	7,843	8,298
Net income margin – as adjusted	7	%	3	%	5	%	5	%	10	%	8	%	7	%	5	%	8	%
Net income margin – unadjusted	7	%	3	%	5	%	5	%	10	%	8	%	7	%	5	%	8	%
Adjusted EBITDA margin – as adjusted	43	%	37	%	38	%	36	%	36	%	40	%	37	%	39	%	38	%
Adjusted EBITDA margin – unadjusted	42	%	36	%	37	%	35	%	36	%	40	%	36	%	38	%	37	%
Last twelve months Net income – as adjusted	$	1,275	$	1,139	$	1,367	$	1,460	$	1,679	$	2,035	$	2,219	N/A	N/A
Last twelve months Net income – unadjusted	1,275	1,139	1,367	1,460	1,679	2,035	2,219	N/A	N/A
Last twelve months Adjusted EBITDA – as adjusted (1)	$	9,124	$	9,723	$	10,396	$	10,639	$	10,493	$	10,976	$	11,109	N/A	N/A
Last twelve months Adjusted EBITDA – unadjusted (1)	8,754	9,401	10,123	10,391	10,248	10,728	10,846	N/A	N/A
Net Debt (excluding Tower Obligations) to Last Twelve Months Net income – as adjusted	15.6	19.2	16.4	15.3	13.5	13.9	12.4	N/A	N/A
Net Debt (excluding Tower Obligations) to Last Twelve Months Net income – unadjusted	15.6	19.2	16.4	15.3	13.5	13.9	12.4	N/A	N/A
Net Debt (excluding Tower Obligations) to LTM Adjusted EBITDA Ratio – as adjusted	2.2	2.3	2.2	2.1	2.2	2.6	2.5	N/A	N/A
Net Debt (excluding Tower Obligations) to LTM Adjusted EBITDA Ratio – unadjusted	2.3	2.3	2.2	2.1	2.2	2.6	2.5	N/A	N/A