MetroPCS Communications, Inc. (NYSE: PCS - News), the nation’s leading provider of no annual contract, unlimited, flat-rate wireless communications service, today announced financial and operational results for the quarter and year ended December 31, 2011. MetroPCS reported growth in quarterly Adjusted EBITDA of 15% over the fourth quarter 2010 and ended the fourth quarter 2011 with over 9.3 million subscribers.
Roger D. Linquist, Chairman and Chief Executive Officer of MetroPCS, said, ”We reported solid financial and operating results for 2011, marked by record Adjusted EBITDA for the full year and the fourth quarter as well as strong full year subscriber growth. Adjusted EBITDA both for the fourth quarter and the full year 2011 was the highest in company history at $362 million and $1.3 billion, respectively. These Adjusted EBITDA results represent strong year over year growth rates of 15% and 13%, respectively. Operationally, during the fourth quarter, we effectively balanced growth with profitability, recorded a sequential 80 basis point decline in churn, and recorded a 300 basis point sequential increase in Adjusted EBITDA margin.
“Throughout 2011, we maintained our cost discipline while growing our subscriber base. We believe 2011 results were driven by our compelling lineup of smartphones and our continued investment in our CDMA network combined with our focus on enhancing the customer experience. For the sixth consecutive year, we added over 1 million net subscribers, growing our subscriber base at a 30% CAGR over the same period. This growth rate is outstanding and we believe demonstrates that no annual contract mobile broadband wireless service continues to be the fastest growing sector within wireless. As we move towards the second half of 2012, we expect to offer MetroPCS subscribers Android smartphones on our 4G LTE network at lower prices. Since our launch of Android smartphones in late 2010, 35% of our subscriber base is now on a smartphone plan. With our 4G LTE network and line-up of smartphones, we believe we can build on our momentum and continue to drive profitable growth,” Linquist concluded.
2011 Operational Highlights
Approximately 1.2 million net subscriber additions, surpassing the 9.3 million subscriber milestone
Sixth consecutive year of over 1 million net subscriber additions
Introduced 4G LTE service plans which offer unprecedented value
Launched and continued to build out 4G LTE service in all major metropolitan areas
Introduced MetroPCS unlimited wireless service in selected portions of Connecticut and Massachusetts
Completed amendment and expansion of senior secured credit facility and completed an additional $1 billion of borrowing 2011 Smartphone Launches include:
World’s first commercially available 4G LTE Android smartphone, Samsung Galaxy Indulge
Samsung Admire and Huawei M835 Android CDMA smartphones 4G LTE LG Esteem for entertainment-minded consumers HTC Wildfire S, Company’s first Android smartphone provided by HTC
2011 Service Offering Additions:
Visual Voice Mail services allowing subscribers to manage voice mail directly on their mobile screen
Rhapsody music service, which offers an unlimited mobile music experience with access to more than 12 million songs
Added content from Disney/ABC Television Group and ESPN to MetroSTUDIO Video on Demand application for 4G LTE handsets. Clips and full-length videos are now available on 20 channels including: NBC Universal, Black Entertainment Television (BET), ESPN, ABC Entertainment and Univision.
2011 Announced Partnerships:
MetroPCS handsets available on Amazon.com
Official wireless provider of USA Basketball
Exclusive wireless provider for The Ultimate Fighting Championship® in the U.S. and Puerto Rico
Quarterly Consolidated Results
Consolidated service revenues of $1.1 billion for the fourth quarter of 2011, an increase of $162 million, or 17%, when compared to the prior year’s fourth quarter.
Income from operations increased $8 million, or 4%, for the fourth quarter of 2011 when compared to the prior year’s fourth quarter.
Net income increased $77 million, or 573%, for the fourth quarter of 2011 when compared to the prior year’s fourth quarter. Net income for the fourth quarter of 2010 includes approximately $60 million in net charges related to the extinguishment of our 9 1/4% Senior Notes due 2014 and a gain recognized on a FCC license exchange consummated during the quarter. On a non-GAAP basis excluding the loss on extinguishment of debt and gain on the FCC license exchange, net income for the fourth quarter 2010 would have been $74 million, or $0.20 per common share.
Adjusted EBITDA of $362 million increased by $47 million for the fourth quarter of 2011, or 15%, when compared to the prior year’s fourth quarter.
Average revenue per user (ARPU) of $40.55 for the fourth quarter of 2011 represents an increase of $0.76 when compared to the fourth quarter of 2010. The increase in ARPU was primarily attributable to continued demand for our Wireless for All and 4G LTE service plans offset by an increase in family plan penetration from 32% of our customer base in 2010 to 45% of our customer base in 2011.
The Company’s cost per gross addition (CPGA) of $166 for the fourth quarter of 2011 represents an increase of $4 when compared to the prior year’s fourth quarter. The increase was primarily driven by increased promotional activities.
Cost per user (CPU) increased to $20.00 in the fourth quarter of 2011, or a 6% increase over the fourth quarter of 2010. The increase in CPU is primarily driven by the increase in retention expense for existing customers, costs associated with our 4G LTE network upgrade and roaming expenses associated with Metro USA, offset by the continued scaling of our business.
Churn decreased 80 basis points from 4.5% to 3.7%, when compared to the third quarter of 2011, and increased 20 basis points when compared to the fourth quarter of 2010. The sequential decrease in churn was driven by normal seasonal effects related to the traditional retail selling periods, as well as improved network performance resulting from the investment in our CDMA network to meet increased data demands. When compared to the fourth quarter of 2010, the increase in churn was primarily driven by an increase in gross additions, adjusted for false churn, in the first nine months of 2011 over the first nine months of 2010, and we believe continued economic pressures on our subscribers as well as increased data demands on our CDMA network driven by Android penetration.
Annual Consolidated Results
MetroPCS reported consolidated service revenues of $4.4 billion, an increase of 20% over the prior year.
Income from operations increased $29 million, or 4%, for the year ended December 31, 2011 as compared to the prior year.
Consolidated Adjusted EBITDA of $1.3 billion increased $156 million, or 13%, when compared to the prior year.
Net income for the year was $301 million and increased $108 million, or 56%, when compared to the prior year. Net income for 2010 includes approximately $59 million in net charges related to the extinguishment of our 9 1/4% Senior Notes due 2014 and gains recognized on FCC license exchanges consummated during the year. On a non-GAAP basis excluding the loss on extinguishment of debt and gains on FCC license exchanges, net income for 2010 would have been $252 million, or $0.70 per common share.