T-Mobile US Announces $19 Billion Shareholder Return Program and Dividend Increase Plans

T-Mobile US Announces $19 Billion Shareholder Return Program and Dividend Increase Plans

(IN BRIEF) T-Mobile US has announced a second phase of its shareholder return program, allocating up to $19 billion for the period from Q4 2023 to the end of 2024. This program includes quarterly dividends totaling approximately $3.75 billion, beginning in October 2023. Additionally, Deutsche Telekom plans to sell a portion of its T-Mobile US shares in 2024 without compromising its majority ownership. The first quarterly dividend of approximately $750 million will be paid in Q4 2023. Deutsche Telekom expects to receive around $1.8 billion in dividend payments over the next five quarters. The company aims to increase the dividend per share by about 10% annually. Deutsche Telekom retains a majority equity stake in T-Mobile US, allowing it to maintain control even if new shares are issued to SoftBank as part of the merger agreement.

(PRESS RELEASE) BONN, 7-Sep-2023 — /EuropaWire/ — T-Mobile US announced a second tranche of its shareholder return program of up to 19 billion U.S. dollars for the period from the fourth quarter of 2023 to the end of 2024. Under the program, T-Mobile US announced the intention to declare and pay dividends of around 3.75 billion U.S. dollars in total to be paid out on a quarterly basis from October 1, 2023, to December 31, 2024. The amount available for repurchases of shares of T-Mobile US will be reduced by the amount of any cash dividends declared and paid by T-Mobile US.

Beside this, Deutsche Telekom plans to sell a portion of its T-Mobile US shares on the market beginning in 2024, without jeopardizing its own majority ownership position in T-Mobile US. The precise number of T Mobile US shares that Deutsche Telekom plans to sell is yet to be decided.

The first quarterly dividend from T-Mobile US of around 750 million U.S. dollars is set to be paid in the fourth quarter of 2023. In total, Deutsche Telekom expects to receive around 1.8 billion U.S. dollars after taxes in dividend payments over the next five quarters. T-Mobile intends to increase the dividend per share by around 10 percent annually.

In mid-July 2023, Deutsche Telekom held an equity interest of 51.4 percent in T-Mobile US. The stake has grown over recent quarters because Deutsche Telekom did not sell any of the shares from its portfolio during the first tranche of T-Mobile US’s shareholder return program in which T-Mobile US announced it would buy back shares for a total of 14 billion U.S. dollars from October 1, 2022 to September 30, 2023. As such, Deutsche Telekom remains on course for a sustainable and stable majority in its U.S. subsidiary, allowing Deutsche Telekom to maintain its majority equity stake in T-Mobile US if new shares of T-Mobile US are issued to Softbank in Japan, which had been agreed as part of the merger with Sprint in the event of the T-Mobile US share price achieving a certain defined price (true-up).

Deutsche Telekom confirms the statements made at its 2021 Capital Markets Day. As such there is no change to the dividend policy. Recurring adjusted earnings per share remains key. 40 to 60 percent of this is to be paid out to shareholders, with a minimum dividend of 60 eurocents per share. A return to the comfort zone for the debt corridor – the ratio of net debt to adjusted EBITDA of 2.25 to 2.75 – is expected by the end of 2024.

This media information contains forward-looking statements that reflect the current views of Deutsche Telekom management with respect to future events. They are generally identified by the words “expect,” “anticipate,” “believe,” “intend,” “estimate,” “aim,” “goal,” “plan,” “will,” “seek,” “outlook,” or similar expressions and include generally any information that relates to expectations or targets for revenue, adjusted EBITDA AL, or other performance measures. Forward-looking statements are based on current plans, estimates, and projections, and should therefore be considered with caution. Such statements are subject to risks and uncertainties, most of which are difficult to predict and are generally beyond Deutsche Telekom’s control. They include, for instance, the progress of Deutsche Telekom’s staff-related restructuring measures and the impact of other significant strategic or business initiatives, including acquisitions, dispositions, and business combinations. In addition, movements in exchange rates and interest rates, regulatory rulings, stronger than expected competition, technological change, litigation and regulatory developments, among other factors, may have a material adverse effect on costs and revenue development. If these or other risks and uncertainties materialize, or if the assumptions underlying any of these statements prove incorrect, Deutsche Telekom’s actual results may be materially different from those expressed or implied by such statements. Deutsche Telekom can offer no assurance that its expectations or targets will be achieved. Without prejudice to existing obligations under capital market law, Deutsche Telekom does not assume any obligation to update forward-looking statements to account for new information or future events or anything else. In addition to figures prepared in accordance with IFRS, Deutsche Telekom presents alternative performance measures, e.g., EBITDA, EBITDA AL, adjusted EBITDA, adjusted EBITDA AL, adjusted EBITDA margin AL, core EBITDA, adjusted EBIT, EBIT margin, adjusted net profit/loss, adjusted earnings per share, free cash flow, free cash flow AL, gross debt, and net debt. These measures should be considered in addition to, but not as a substitute for, the information prepared in accordance with IFRS. Alternative performance measures are not subject to IFRS or any other generally accepted accounting principles. Other companies may define these terms in different ways.

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SOURCE: Deutsche Telekom AG


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