Stock Analysis on Net

T-Mobile US Inc. (NASDAQ:TMUS)

Economic Value Added (EVA)

Microsoft Excel

EVA is registered trademark of Stern Stewart.

Economic value added or economic profit is the difference between revenues and costs,where costs include not only expenses, but also cost of capital.


Economic Profit

T-Mobile US Inc., economic profit calculation

US$ in millions

Microsoft Excel
12 months ended: Dec 31, 2024 Dec 31, 2023 Dec 31, 2022 Dec 31, 2021 Dec 31, 2020
Net operating profit after taxes (NOPAT)1 18,486 14,313 7,149 6,394 7,224
Cost of capital2 8.34% 7.82% 7.74% 7.32% 7.37%
Invested capital3 187,599 186,258 186,262 184,079 177,902
 
Economic profit4 2,832 (246) (7,268) (7,085) (5,890)

Based on: 10-K (reporting date: 2024-12-31), 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31).

1 NOPAT. See details »

2 Cost of capital. See details »

3 Invested capital. See details »

4 2024 Calculation
Economic profit = NOPAT – Cost of capital × Invested capital
= 18,4868.34% × 187,599 = 2,832

Item Description The company
Economic profit Economic profit is a measure of corporate performance computed by taking the spread between the return on invested capital and the cost of capital, and multiplying by the invested capital. T-Mobile US Inc. economic profit increased from 2022 to 2023 and from 2023 to 2024.

Net Operating Profit after Taxes (NOPAT)

T-Mobile US Inc., NOPAT calculation

US$ in millions

Microsoft Excel
12 months ended: Dec 31, 2024 Dec 31, 2023 Dec 31, 2022 Dec 31, 2021 Dec 31, 2020
Net income 11,339 8,317 2,590 3,024 3,064
Deferred income tax expense (benefit)1 3,120 2,600 492 197 709
Increase (decrease) in allowance for credit losses2 15 (6) 21 (48) 133
Increase (decrease) in deferred revenue3 397 45 (76) (174) 399
Increase (decrease) in restructuring initiatives4 (112) (358) 384 (77) 163
Increase (decrease) in equity equivalents5 3,420 2,281 821 (102) 1,404
Interest expense, net 3,411 3,335 3,364 3,342 2,701
Interest expense, operating lease liability6 1,306 1,367 1,368 1,053 1,193
Adjusted interest expense, net 4,717 4,702 4,732 4,395 3,894
Tax benefit of interest expense, net7 (991) (987) (994) (923) (818)
Adjusted interest expense, net, after taxes8 3,727 3,715 3,738 3,472 3,076
(Income) loss from discontinued operations, net of tax9 (320)
Net operating profit after taxes (NOPAT) 18,486 14,313 7,149 6,394 7,224

Based on: 10-K (reporting date: 2024-12-31), 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31).

1 Elimination of deferred tax expense. See details »

2 Addition of increase (decrease) in allowance for credit losses.

3 Addition of increase (decrease) in deferred revenue.

4 Addition of increase (decrease) in restructuring initiatives.

5 Addition of increase (decrease) in equity equivalents to net income.

6 2024 Calculation
Interest expense on capitalized operating leases = Operating lease liability × Discount rate
= 29,689 × 4.40% = 1,306

7 2024 Calculation
Tax benefit of interest expense, net = Adjusted interest expense, net × Statutory income tax rate
= 4,717 × 21.00% = 991

8 Addition of after taxes interest expense to net income.

9 Elimination of discontinued operations.

Item Description The company
NOPAT Net operating profit after taxes is income from operations, but after removement of taxes calculated on cash basis that are relevant to operating income. T-Mobile US Inc. NOPAT increased from 2022 to 2023 and from 2023 to 2024.

Cash Operating Taxes

T-Mobile US Inc., cash operating taxes calculation

US$ in millions

Microsoft Excel
12 months ended: Dec 31, 2024 Dec 31, 2023 Dec 31, 2022 Dec 31, 2021 Dec 31, 2020
Income tax expense 3,373 2,682 556 327 786
Less: Deferred income tax expense (benefit) 3,120 2,600 492 197 709
Add: Tax savings from interest expense, net 991 987 994 923 818
Cash operating taxes 1,244 1,069 1,058 1,053 895

Based on: 10-K (reporting date: 2024-12-31), 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31).

Item Description The company
Cash operating taxes Cash operating taxes are estimated by adjusting income tax expense for changes in deferred taxes and tax benefit from the interest deduction. T-Mobile US Inc. cash operating taxes increased from 2022 to 2023 and from 2023 to 2024.

Invested Capital

T-Mobile US Inc., invested capital calculation (financing approach)

US$ in millions

Microsoft Excel
Dec 31, 2024 Dec 31, 2023 Dec 31, 2022 Dec 31, 2021 Dec 31, 2020
Short-term debt 4,068 3,619 5,164 3,378 4,579
Short-term debt to affiliates 2,245
Short-term financing lease liabilities 1,175 1,260 1,161 1,120 1,063
Long-term debt 72,700 69,903 65,301 67,076 61,830
Long-term debt to affiliates 1,497 1,496 1,495 1,494 4,716
Long-term financing lease liabilities 1,151 1,236 1,370 1,455 1,444
Operating lease liability1 29,689 31,795 33,367 29,243 30,587
Total reported debt & leases 110,280 109,309 107,858 106,011 104,219
Stockholders’ equity 61,741 64,715 69,656 69,102 65,344
Net deferred tax (assets) liabilities2 16,700 13,458 10,884 10,216 9,966
Allowance for credit losses3 176 161 167 146 194
Deferred revenue4 1,222 825 780 856 1,030
Restructuring initiatives5 112 470 86 163
Equity equivalents6 18,098 14,556 12,301 11,304 11,353
Accumulated other comprehensive (income) loss, net of tax7 857 964 1,046 1,365 1,581
Adjusted stockholders’ equity 80,696 80,235 83,003 81,771 78,278
Construction in progress8 (3,377) (3,286) (4,599) (3,703) (4,595)
Invested capital 187,599 186,258 186,262 184,079 177,902

Based on: 10-K (reporting date: 2024-12-31), 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31).

1 Addition of capitalized operating leases.

2 Elimination of deferred taxes from assets and liabilities. See details »

3 Addition of allowance for doubtful accounts receivable.

4 Addition of deferred revenue.

5 Addition of restructuring initiatives.

6 Addition of equity equivalents to stockholders’ equity.

7 Removal of accumulated other comprehensive income.

8 Subtraction of construction in progress.

Item Description The company
Invested capital Capital is an approximation of the economic book value of all cash invested in going-concern business activities. T-Mobile US Inc. invested capital decreased from 2022 to 2023 but then increased from 2023 to 2024 exceeding 2022 level.

Cost of Capital

T-Mobile US Inc., cost of capital calculations

Capital (fair value)1 Weights Cost of capital
Equity2 265,992 265,992 ÷ 370,154 = 0.72 0.72 × 10.31% = 7.41%
Short-term and long-term debt, including financing lease liabilities3 74,473 74,473 ÷ 370,154 = 0.20 0.20 × 4.13% × (1 – 21.00%) = 0.66%
Operating lease liability4 29,689 29,689 ÷ 370,154 = 0.08 0.08 × 4.40% × (1 – 21.00%) = 0.28%
Total: 370,154 1.00 8.34%

Based on: 10-K (reporting date: 2024-12-31).

1 US$ in millions

2 Equity. See details »

3 Short-term and long-term debt, including financing lease liabilities. See details »

4 Operating lease liability. See details »

Capital (fair value)1 Weights Cost of capital
Equity2 192,011 192,011 ÷ 296,718 = 0.65 0.65 × 10.31% = 6.67%
Short-term and long-term debt, including financing lease liabilities3 72,912 72,912 ÷ 296,718 = 0.25 0.25 × 4.02% × (1 – 21.00%) = 0.78%
Operating lease liability4 31,795 31,795 ÷ 296,718 = 0.11 0.11 × 4.30% × (1 – 21.00%) = 0.36%
Total: 296,718 1.00 7.82%

Based on: 10-K (reporting date: 2023-12-31).

1 US$ in millions

2 Equity. See details »

3 Short-term and long-term debt, including financing lease liabilities. See details »

4 Operating lease liability. See details »

Capital (fair value)1 Weights Cost of capital
Equity2 179,847 179,847 ÷ 279,964 = 0.64 0.64 × 10.31% = 6.62%
Short-term and long-term debt, including financing lease liabilities3 66,750 66,750 ÷ 279,964 = 0.24 0.24 × 3.88% × (1 – 21.00%) = 0.73%
Operating lease liability4 33,367 33,367 ÷ 279,964 = 0.12 0.12 × 4.10% × (1 – 21.00%) = 0.39%
Total: 279,964 1.00 7.74%

Based on: 10-K (reporting date: 2022-12-31).

1 US$ in millions

2 Equity. See details »

3 Short-term and long-term debt, including financing lease liabilities. See details »

4 Operating lease liability. See details »

Capital (fair value)1 Weights Cost of capital
Equity2 155,512 155,512 ÷ 265,707 = 0.59 0.59 × 10.31% = 6.03%
Short-term and long-term debt, including financing lease liabilities3 80,952 80,952 ÷ 265,707 = 0.30 0.30 × 4.05% × (1 – 21.00%) = 0.97%
Operating lease liability4 29,243 29,243 ÷ 265,707 = 0.11 0.11 × 3.60% × (1 – 21.00%) = 0.31%
Total: 265,707 1.00 7.32%

Based on: 10-K (reporting date: 2021-12-31).

1 US$ in millions

2 Equity. See details »

3 Short-term and long-term debt, including financing lease liabilities. See details »

4 Operating lease liability. See details »

Capital (fair value)1 Weights Cost of capital
Equity2 148,167 148,167 ÷ 259,461 = 0.57 0.57 × 10.31% = 5.89%
Short-term and long-term debt, including financing lease liabilities3 80,707 80,707 ÷ 259,461 = 0.31 0.31 × 4.56% × (1 – 21.00%) = 1.12%
Operating lease liability4 30,587 30,587 ÷ 259,461 = 0.12 0.12 × 3.90% × (1 – 21.00%) = 0.36%
Total: 259,461 1.00 7.37%

Based on: 10-K (reporting date: 2020-12-31).

1 US$ in millions

2 Equity. See details »

3 Short-term and long-term debt, including financing lease liabilities. See details »

4 Operating lease liability. See details »


Economic Spread Ratio

T-Mobile US Inc., economic spread ratio calculation, comparison to benchmarks

Microsoft Excel
Dec 31, 2024 Dec 31, 2023 Dec 31, 2022 Dec 31, 2021 Dec 31, 2020
Selected Financial Data (US$ in millions)
Economic profit1 2,832 (246) (7,268) (7,085) (5,890)
Invested capital2 187,599 186,258 186,262 184,079 177,902
Performance Ratio
Economic spread ratio3 1.51% -0.13% -3.90% -3.85% -3.31%
Benchmarks
Economic Spread Ratio, Competitors4
AT&T Inc. -2.37% -0.22% -7.02% 0.54% -6.48%
Verizon Communications Inc. 0.60% -0.97% 2.06% 2.80% 2.17%

Based on: 10-K (reporting date: 2024-12-31), 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31).

1 Economic profit. See details »

2 Invested capital. See details »

3 2024 Calculation
Economic spread ratio = 100 × Economic profit ÷ Invested capital
= 100 × 2,832 ÷ 187,599 = 1.51%

4 Click competitor name to see calculations.

Performance ratio Description The company
Economic spread ratio The ratio of economic profit to invested capital, also equal to the difference between return on invested capital (ROIC) and cost of capital. T-Mobile US Inc. economic spread ratio improved from 2022 to 2023 and from 2023 to 2024.

Economic Profit Margin

T-Mobile US Inc., economic profit margin calculation, comparison to benchmarks

Microsoft Excel
Dec 31, 2024 Dec 31, 2023 Dec 31, 2022 Dec 31, 2021 Dec 31, 2020
Selected Financial Data (US$ in millions)
Economic profit1 2,832 (246) (7,268) (7,085) (5,890)
 
Revenues 81,400 78,558 79,571 80,118 68,397
Add: Increase (decrease) in deferred revenue 397 45 (76) (174) 399
Adjusted revenues 81,797 78,603 79,495 79,944 68,796
Performance Ratio
Economic profit margin2 3.46% -0.31% -9.14% -8.86% -8.56%
Benchmarks
Economic Profit Margin, Competitors3
AT&T Inc. -6.08% -0.57% -17.98% 1.40% -15.54%
Verizon Communications Inc. 1.36% -2.21% 4.53% 6.08% 4.19%

Based on: 10-K (reporting date: 2024-12-31), 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31).

1 Economic profit. See details »

2 2024 Calculation
Economic profit margin = 100 × Economic profit ÷ Adjusted revenues
= 100 × 2,832 ÷ 81,797 = 3.46%

3 Click competitor name to see calculations.

Performance ratio Description The company
Economic profit margin The ratio of economic profit to sales. It is the company profit margin covering income efficiency and asset management. Economic profit margin is not biased in favor of capital-intensive business models, because any added capital is a cost to the economic profit margin. T-Mobile US Inc. economic profit margin improved from 2022 to 2023 and from 2023 to 2024.