T-Mobile US, Inc.

Following opening remarks, the earnings call will be open for questions via the conference line by pressing the star, followed by one, and via Twitter by sending a tweet to at T-Mobile IR or at Mike Sievert using cash tag TMUS. I would now like to turn the conference over to Mr. Judd Henry, Senior Vice President and Head of Investor Relations for T-Mobile US.

Please go ahead, sir.

welcome to t-mobile's fourth quarter and full year 2020 earnings call on the call today are mike sievert our president and ceo peter oswaldic our cfo neville ray our president of technology matt staniff our chief marketing officer as well as other members of the senior leadership team during this call we will make forward-looking statements which involve a number of risks and uncertainties that may cause actual results to differ materially from our from our forward-looking statements We provide a comprehensive list of risk factors in our SEC filings, which I encourage you to review. Our earnings release, investor factbook, and other documents related to our Q4 and full year 2020 results, as well as reconciliations between our GAAP and non-GAAP results we discuss on this call, can be found on the quarterly results section of the investor relations website. Please note that we expect to file our annual report on Form 10-K later this month following the completion of our first year-end audit following our merger with Sprint. Results prior to the second quarter in our earnings materials represent the historical results of standalone T-Mobile prior to our merger with Sprint. I would also note that we will not comment directly or indirectly on the FCC's ongoing C-band auction, C-band spectrum, or the post-auction market structure. Likewise, we look forward to having a great discussion with you around our merger synergies and future business trends at our upcoming Analyst Day, and we'll focus today's Q&A on our 2020 results and guidance for 2021. With that, let me turn it over to Mike. Thanks, Judd. Hi, everybody. We're coming to you live from our Bellevue, Washington offices today. We have some amazing results to cover, and we're going to jump right in. I did plan this call to be a little bit shorter than usual to respect your time, mindful that we're going to be seeing you for a much more in-depth discussion at our analyst day coming up just next month. Our whole team is really looking forward to being with you. But today, we are so excited to share our Q4 and full year 2020 results. And with results like these, I never get tired of hosting these calls and talking about our business because, as it turns out, 2020 was T-Mobile's best year ever across our major customer and financial metrics. Not just because we're bigger now after our merger, but because of how our team delivered. And we capped off this year with a very strong Q4, beating expectations and showing that we have momentum on our side. So our business is well positioned for success in 2021 and more importantly, beyond. From network to synergies to operations and new investment areas, T-Mobile showed again this quarter that we're positioned to win. Those of you that follow us know that we're focused on three core ambitions. First, continuing to profitably outgrow the competition. Second, delivering bigger than expected merger synergies faster than anticipated to drive scale and enterprise value. And third, making the decisions and investments to drive the long-term growth and the exciting cash generation potential of this company as you look at our full year and q4 results it's clear that we're doing exactly that and listen the thesis for our company has never been more clear we're very rapidly leaping ahead of the pack on network with the best assets the best team and the most loved brand in our space if we play our cards right T-Mobile is positioned to stay ahead in the 5G race for years to come. This quarter showcased a few key points that are important to understand when you look at T-Mobile and when you look at the whole competitive landscape. First, we delivered the highest post-paid customer growth in our history in 2020, finishing on top of the pack again in Q4 while simultaneously delivering strong service revenue, EBITDA, and cash flow. Look across the major players in this industry, and you'll note that only T-Mobile delivered significant growth in customers and profitability. Second point, T-Mobile delivered the industry's best churn on our flagship T-Mobile brand, and we did it by delivering the best-in-class experiences across network, value, and customer service. Just let that sink in for just a second. The best churn in the industry. Although we don't normally report on T-Mobile brand specific churn, I did want to make that point clear. T-Mobile went from worst to first on churn with our winning formula. And that formula is only getting better as we pull away from the pack on 5G and more customers begin to care about that. And here's the point. We know how to apply that same formula to our much higher churning Sprint branded customers, creating a big potential tailwind on future performance once this integration is substantially complete. Third key point, our growth and profitability are fueled by the rapid unlocking of synergies, which we are achieving faster than expected, as today's numbers made very clear. And finally, these synergies have helped us deliver the nation's fastest, biggest, and most available 5G network, which is going to inform the competitive landscape for years to come. So let's dive into these just a little bit. As you saw in January, when we shared our early customer results, we ended 2020 as the clear growth leader in wireless, profitably taking share again, despite all the complexities of our merger. In fact, we delivered our highest ever total postpaid net ads of 5.5 million. And we grew our postpaid phone base by an estimated 2.2 million, an industry best. We did all that and still delivered strong financials, building upon our improved scale from the merger with over $50 billion in service revenue, growing year over year when our peers were relatively flat, and growing to $24.6 billion of adjusted EBITDA. In a quarter when Verizon sacrificed growth for profitability and AT&T sacrificed profit growth for customer growth, only T-Mobile delivered customer growth and profitability growth, beating consensus on both. And with our guidance that Peter will share in a moment, it looks like only T-Mobile is expected to deliver both again in meaningful ways again this year. Churn. As I mentioned, we also didn't miss a beat on churn. Our total postpaid phone churn across all brands was essentially flat year over year for both the full year and the fourth quarter compared to standalone T-Mobile a year ago. This is including the legacy Sprint customers that were churning at over 2% this time a year ago in Q4. And as I said, postpaid phone churn for our branded T-Mobile base was the lowest of all national carriers and a company record low for a Q4, a reflection of genuine customer loyalty that's earned by giving customers the best network and the best value with great customer experiences, something that the un-carrier is truly famous for. And as we continue to integrate, we're bringing more of that same T-Mobile experience directly to our Sprint customers. As we saw in Q4, others may try to buy customer loyalty because they see what we see. We're pulling ahead of the pack on network, and we're about to take all their customers. But unfortunately, their results show that it's painfully expensive and ultimately just a band-aid to mask the real drivers of why customers eventually leave. The fact is there are no shortcuts to creating genuine loyalty and sustainably low churn, and I'm confident we'll see all of this play out down the road. And while we're talking about great customer experiences, just today, J.D. Power recognized T-Mobile for the best customer care in wireless for the 21st time and the seventh time in a row, meaning we've earned more top honors than any other wireless provider in the history of their study. As you've heard me say before, T-Mobile now has the scale and the resources to do something that's never truly been done before, offer customers the best value and the best network. Perceived network quality was the moat around the Verizon and AT&T castles that allowed them to overcharge customers for years. But T-Mobile is freeing customers across the country from having to compromise. This evolution creates a path to penetrate further into prime customers and businesses that require the highest quality network experience. And it creates compelling reasons for them to adopt more premium plans. One of the reasons all of this works is that only T-Mobile is operating in a synergy-backed model, which allows us to simultaneously deliver customer and profit growth while also investing big in the business. Let me say this. Our national capital plan may be ambitious, but it's known, and it's supported by our massive synergies. We'll talk about this more next month, I expect. Let's talk about those synergies for a minute. We delivered $1.3 billion in run rate synergies in 2020. That's more than we guided last quarter and well ahead of our plan. This progress includes the start of our customer migration work, something that's key to unlocking synergies. And we already have over 4 million Sprint customers moved over to the T-Mobile network. I also told you that we expected synergies in 2021 to be more than double what they were in 2020. Well, we still expect it to double and then some. as we now expect to realize 2.7 to 3.0 billion in run rate synergies in 2021. These synergies allow us to make smart investments in the future, and that starts with the network. Only T-Mobile offers the fastest, biggest, and most available 5G network in America. The country has never seen anything like this network build. We're tracking ahead of schedule, and the results are clearly beginning to differentiate, not just on 5G, but on network performance overall. To have the best network, you have to win across both coverage and capacity. T-Mobile's extended range 5G now delivers 5G coverage across 1.6 million square miles, reaching 280 million people, offering nearly two and a half times more geographic coverage than AT&T and nearly four times that of Verizon's so-called nationwide 5G. And we're also expanding our ultra-capacity 5G at an unprecedented pace. This is where you see truly game-changing speeds and capabilities enabled by the bigger channels of spectrum found in mid-band and millimeter We brought ultra-capacity 5G to 106 million people last year, 50 times more than Verizon's ultra-wideband, just crushing our goals. And now we're on to our next audacious goal, to cover 200 million people nationwide by the end of this year. For a number of reasons, getting to 200 million is a much taller challenge, but we've ramped the biggest network factory this country has ever seen, and we're up to the task. This is important. We're now running a huge deployment machine at pace with a proven rollout model, something that takes a long time to ramp, a process we started way back in early 2018. I expect we'll be talking more about this advantage next month also. And third parties are seeing the results. Just last week, new independent data from OpenSignal was released, and it's based on billions of measurements from real customers And it proves T-Mobile customers get the fastest 5G download speeds, fastest 5G upload speeds, and they get a 5G signal more often than anyone else. And, of course, you'll see these advantages in our marketing and messaging, including with our latest Super Bowl message this weekend. I actually think the perception battle is the biggest one, and we're all over it. This team operates and executes, and our goal is to not miss opportunities. For example, we're increasing our specialized sales force and building tailored products for large enterprise and government. We see room to run here. We've competed mostly on price in the past, if we're honest. And now we have a premium product that's increasingly the catalyst for our wins. On the consumer side, we're planning to add significantly more points of distribution and thousands of sales and service agents to reach beyond urban areas, where we have historically had our big success. We have a multi-year expansion plan to bring real competition and a quality service to 50 million U.S. households in smaller markets, where our market share is currently only half of what our national market share is. This is a huge opportunity to bring our un-carrier story to more of America. And we'll soon roll out our 5G home broadband offering to bring critical connectivity to rural parts of this country and actual competition to the cable-opoly. All of these opportunities are built on our game-changing Ultra Capacity 5G that we are rapidly expanding across the country, further distancing ourselves from the competition every day. So these are just a few things to whet your appetite. We'll dive deeper into each of these opportunities next month when you can hear directly from the leaders who are driving these growth areas. So hopefully you get the idea that this team believes T-Mobile is well-positioned. We will expand our proven un-carrier strategy and capitalize on our emerging network leadership, our customer-loving brand, and our new scale as we tackle the challenges and opportunities that are ahead. As I said earlier, this wasn't just another great year at T-Mobile. It was our best year yet. We delivered the highest post-paid customer growth in our history while simultaneously delivering strong revenue, EBITDA, and cash flow growth. Only T-Mobile delivered significant growth in customers and profitability, fueled by the rapid and faster than expected unlocking of synergies. And only T-Mobile can say that we offer the nation's fastest, biggest, and most available 5G network. And we did all this while navigating a pandemic that made us rethink how to best serve our customers and protect our employees. And in only the first nine months after the merger. Great work by an amazing team. And you know what? We're just getting started. So let me turn it over to Peter to take us through the financials and our guidance. Peter, take it away.