United States For information on changes resulting from the first-time application of the IFRS 16 “Leases” accounting standard and changes in the organizational structure, please refer to the section “Group organization, strategy, and management.” Customer development (XLS:) Download thousands June 30, 2019 Mar. 31, 2019 Change June 30, 2019/Mar. 31, 2019% Dec. 31, 2018 Change June 30, 2019/Dec. 31, 2018% June 30, 2018 Change June 30, 2019/June 30, 2018% Mobile customers 83,052 81,301 2.2 79,651 4.3 75,619 9.8 Branded customers 65,983 64,744 1.9 63,656 3.7 61,049 8.1 Branded postpaid 44,646 43,538 2.5 42,519 5.0 40,082 11.4 Branded prepay 21,337 21,206 0.6 21,137 0.9 20,967 1.8 Wholesale customers 17,069 16,557 3.1 15,995 6.7 14,570 17.2 Total At June 30, 2019, the United States operating segment (T-Mobile US) had 83.1 million customers, compared to 79.7 million customers at December 31, 2018. Net customer additions were 3.4 million for the first half of 2019, compared to 3.0 million net customer additions for the first half of 2018, due to the factors described below. Branded customers. Branded postpaid net customer additions were 2,127 thousand for the first half of 2019, compared to 2,022 thousand branded postpaid net customer additions for the first half of 2018. The increase resulted from higher branded postpaid phone net customer additions primarily due to record-low churn and higher branded postpaid other net customer additions primarily due to higher gross customer additions from connected devices, partially offset by higher deactivations from a growing customer base. Branded prepay net customer additions were 200 thousand for the first half of 2019, compared to 290 thousand branded prepay net customer additions for the first half of 2018. The decrease in net customer additions was primarily due to continued promotional activities in the marketplace, partially offset by lower churn. Wholesale customers. Wholesale net customer additions were 1,074 thousand for the first half of 2019, compared to 700 thousand for the first half of 2018. The increase was due primarily to higher gross additions from the continued success of our M2M and MVNO partnerships. Development of operations (XLS:) Download millions of € Q1 2019 Q2 2019 Q2 2018 Change % H1 2019 H1 2018 Change % FY 2018 a Prior-year comparatives were calculated on a pro forma basis for the redefined key performance indicators resulting from the introduction of the IFRS 16 accounting standard. TOTAL REVENUE 9,796 9,826 8,821 11.4 19,623 17,277 13.6 36,522 Profit from operations (EBIT) 1,376 1,465 1,201 22.0 2,840 2,338 21.5 4,634 EBIT margin % 14.0 14.9 13.6 14.5 13.5 12.7 Depreciation, amortization and impairment losses (1,835) (1,870) (1,321) (41.6) (3,704) (2,544) (45.6) (5,294) EBITDA 3,210 3,334 2,522 32.2 6,545 4,882 34.1 9,928 EBITDA ALa 2,580 2,672 2,520 6.0 5,252 4,879 7.6 9,924 Special factors affecting EBITDA (99) (200) (32) n.a. (299) (4) n.a. (160) EBITDA (adjusted for special factors) 3,309 3,534 2,553 38.4 6,843 4,885 40.1 10,088 EBITDA AL (ADJUSTED FOR SPECIAL FACTORS)a 2,679 2,872 2,552 12.5 5,551 4,883 13.7 10,084 EBITDA AL margin (adjusted for special factors)a % 27.3 29.2 28.9 28.3 28.3 27.6 CASH CAPEX (1,713) (2,272) (1,353) (67.9) (3,985) (2,495) (59.7) (4,661) Total revenue Total revenue for the United States operating segment of EUR 19.6 billion in the first half of 2019 increased by 13.6 percent, compared to EUR 17.3 billion in the first half of 2018. In U.S. dollars, T-Mobile US’ total revenues increased by 6.0 percent year-on-year due primarily to an increase in service revenue driven by growth in our average branded customer base driven by the continued growth in existing and greenfield markets, including the growing success of new customer segments and rate plans such as Unlimited 55+, Military, Business, and Essentials, along with record low churn and growth in wearables and other connected devices; partially offset by decreases in branded postpaid and branded prepaid average revenue per user (ARPU). EBITDA AL, adjusted EBITDA AL In euros, adjusted EBITDA AL increased by 13.7 percent to EUR 5.6 billion in the first half of 2019, compared to EUR 4.9 billion in the first half of 2018. The adjusted EBITDA AL margin of 28.3 percent in the first half of 2019 remained relatively flat, compared to the first half of 2018. In U.S. dollars, adjusted EBITDA AL increased by 6.1 percent during the same period. Adjusted EBITDA AL increased due primarily to higher service revenues, as further discussed above. These increases were partially offset by higher employee related costs, costs related to outsourced functions, commissions and costs primarily related to an increase in amortization expense related to costs that were capitalized upon the adoption of IFRS 15 on January 1, 2018, and the impact from hurricane-related reimbursements of USD 128 million received in the first half of 2018. There was no significant impact from hurricanes for the first half of 2019. EBITDA AL for the first half of 2019 included special factors of EUR -299 million compared to special factors of EUR -4 million for the first half of 2018. The change in special factors was primarily due to the expenses associated with the proposed Sprint transaction in the first half of 2019 and a purchase and investment gain in the first quarter of 2018. Overall, EBITDA AL increased by 7.6 percent to EUR 5.3 billion in the first half of 2019, compared to EUR 4.9 billion in the first half of 2018, due to the factors described above, including special factors. EBIT EBIT increased to EUR 2.8 billion in the first half of 2019 compared to EUR 2.3 billion in the first half of 2018 driven by higher EBITDA AL. Depreciation and amortization expense increased due to the application of the IFRS 16 accounting standard as of January 1, 2019, which results in higher depreciation charges for capitalized right-of-use-assets previously recognized as operating expenses for operating leases. Excluding the impacts of IFRS 16 depreciation decreased due to a lower number of devices under lease, partially offset by higher depreciation charges related to the continued deployment of low-band spectrum, including 600 MHz, and laying the groundwork for 5G. Cash capex Cash capex increased to EUR 4.0 billion in the first half of 2019, compared to EUR 2.5 billion in the first half of 2018, primarily due to an increase in spectrum licenses acquired and accelerated rollout of our 600 MHz low-band spectrum including laying the groundwork for 5G. schließen Postpaid Customers who pay for communication services after receiving them (usually on a monthly basis). schließen Prepay/prepaid In contrast to postpay contracts, prepay communication services are services for which credit has been purchased in advance with no fixed-term contractual obligations. schließen Wholesale Refers to the business of selling services to third parties who sell them to their own retail customers either directly or after further processing. schließen M2M - Machine to Machine Communication between machines. The information is automatically sent to the recipient. For example, in an emergency, alarm systems automatically send a signal to security or the police. schließen MVNO - Mobile Virtual Network Operator Company that offers mobile minutes at relatively low prices without subsidized handsets. A mobile virtual network operator does not have its own wireless network, but uses the infrastructure of another mobile operator to provide its services. schließen Service revenues Revenues generated with mobile customers from services (i.e., revenues from voice services – incoming and outgoing calls – and data services), plus roaming revenues, monthly charges, and visitor revenues. schließen 5G New communications standard, which offers data rates in the gigabit range, converges fixed-network and mobile communications, and supports the Internet of Things – rollout starting 2020.
