2024 guidance reaffirmed
CHICAGO, May 3, 2024
/PRNewswire/ --
As previously announced, TDS will hold a teleconference on
May 3, 2024, at 9:00 a.m. CDT.
Listen to the call live via the Events & Presentations page
of investors.tdsinc.com.
Telephone and Data Systems, Inc. (NYSE:TDS) reported total
operating revenues of $1,262 million
for the first quarter of 2024, versus $1,303
million for the same period one year ago. Net income (loss)
attributable to TDS common shareholders and related diluted
earnings (loss) per share were $12
million and $0.10,
respectively, for the first quarter of 2024 compared to
$(9) million and $(0.08), respectively, in the same period one
year ago.
1Q 2024 Highlights*
UScellular
- Financial results
- Service revenues decreased 2%
- Postpaid ARPU grew 3%
- Net income, Adjusted OIBDA and Adjusted EBITDA up
significantly
- Postpaid churn rate reduced 4%
- Fixed wireless customers grew 42% to 124,000
TDS Telecom
- On track to deliver 125,000 fiber service addresses in
2024
- Delivered 28,000 fiber services addresses in Q1
- Grew total year over year service address footprint 12%
- Solid fiber growth driving strong results
- Residential broadband connections grew 6%
- Operating revenues grew 5%; Residential revenues grew 10%
- Adjusted EBITDA up significantly
* Comparisons are 1Q'23 to 1Q'24 unless otherwise noted
"The TDS Family of Companies' ongoing commitment to quality
networks supports our mission of providing outstanding
communications services to our customers," said LeRoy T. Carlson, Jr., TDS President and CEO.
"Our customers are benefiting from the deployments of mid-band
spectrum and fiber.
"UScellular continues to balance subscriber growth with
financial discipline in this highly competitive environment. Though
we lost postpaid customers in the first quarter, UScellular made
progress in postpaid churn reduction. Increased postpaid ARPU and
ongoing cost optimization programs drove notable improvements in
profitability.
"TDS Telecom is seeing strong growth in revenue and
profitability primarily as a result of the significant broadband
investments made over the past couple of years. With steady fiber
service address delivery and successful selling
activities, TDS Telecom reached a milestone by exceeding
100,000 residential broadband connections in our expansion markets.
TDS Telecom deployed an additional 28,000 marketable fiber service
addresses in the first quarter and is on track to reach its goal of
delivering 125,000 new marketable service addresses in
2024."
Exploration of Strategic Alternatives for UScellular
On August 4, 2023, TDS and
UScellular announced that the Boards of Directors of both companies
decided to initiate a process to explore a range of strategic
alternatives for UScellular. The review remains active and
on-going.
2024 Estimated Results
TDS' current estimates of full-year 2024 results for UScellular
and TDS Telecom are shown below. Such estimates represent
management's view as of May 3, 2024 and should not be assumed
to be current as of any future date. TDS undertakes no duty to
update such estimates, whether as a result of new information,
future events, or otherwise. There can be no assurance that final
results will not differ materially from estimated results.
|
2024 Estimated
Results
|
|
|
|
UScellular
|
Previous
|
Current
|
|
(Dollars in
millions)
|
|
|
|
Service
revenues
|
$2,950-$3,050
|
Unchanged
|
|
Adjusted OIBDA1,
2
|
$750-$850
|
Unchanged
|
|
Adjusted EBITDA1,
2
|
$920-$1,020
|
Unchanged
|
|
Capital
expenditures
|
$550-$650
|
Unchanged
|
|
|
TDS
Telecom
|
Previous
|
Current
|
|
(Dollars in
millions)
|
|
|
|
Total operating
revenues
|
$1,070-$1,100
|
Unchanged
|
|
Adjusted
OIBDA1
|
$310-$340
|
Unchanged
|
|
Adjusted
EBITDA1
|
$310-$340
|
Unchanged
|
|
Capital
expenditures
|
$310-$340
|
Unchanged
|
The following tables reconcile EBITDA, Adjusted EBITDA and
Adjusted OIBDA to the corresponding GAAP measures, Net income or
Income before income taxes. In providing 2024 estimated results,
TDS has not completed the below reconciliation to Net income
because it does not provide guidance for income taxes. Although
potentially significant, TDS believes that the impact of income
taxes cannot be reasonably predicted; therefore, TDS is unable to
provide such guidance.
|
2024 Estimated
Results2
|
|
UScellular
|
|
TDS
Telecom
|
|
(Dollars in
millions)
|
|
|
|
|
Net income
(GAAP)
|
N/A
|
|
N/A
|
|
Add back:
|
|
|
|
|
Income tax
expense
|
N/A
|
|
N/A
|
|
Income before income
taxes (GAAP)
|
$60-$160
|
|
$40-$70
|
|
Add back:
|
|
|
|
|
Interest
expense
|
185
|
|
—
|
|
Depreciation,
amortization and accretion expense
|
660
|
|
270
|
|
EBITDA
(Non-GAAP)1
|
$905-$1,005
|
|
$310-$340
|
|
Add back or
deduct:
|
|
|
|
|
(Gain) loss on asset
disposals, net
|
15
|
|
—
|
|
Adjusted EBITDA
(Non-GAAP)1
|
$920-$1,020
|
|
$310-$340
|
|
Deduct:
|
|
|
|
|
Equity in earnings of
unconsolidated entities
|
155
|
|
—
|
|
Interest and dividend
income
|
15
|
|
—
|
|
Adjusted OIBDA
(Non-GAAP)1
|
$750-$850
|
|
$310-$340
|
|
Actual
Results
|
|
Three Months
Ended
March 31,
2024
|
|
Year
Ended
December 31,
2023
|
|
UScellular
|
|
TDS
Telecom
|
|
UScellular
|
|
TDS
Telecom
|
|
(Dollars in
millions)
|
|
|
|
|
|
|
|
|
Net income
(GAAP)
|
$
24
|
|
$
24
|
|
$
58
|
|
$
(483)
|
|
Add back:
|
|
|
|
|
|
|
|
|
Income tax
expense
|
28
|
|
7
|
|
53
|
|
(26)
|
|
Income before income
taxes (GAAP)
|
$
52
|
|
$
31
|
|
$
111
|
|
$
(509)
|
|
Add back:
|
|
|
|
|
|
|
|
|
Interest
expense
|
43
|
|
(2)
|
|
196
|
|
(8)
|
|
Depreciation,
amortization and accretion expense
|
165
|
|
65
|
|
656
|
|
245
|
|
EBITDA
(Non-GAAP)1
|
$
260
|
|
$
93
|
|
$
963
|
|
$
(272)
|
|
Add back or
deduct:
|
|
|
|
|
|
|
|
|
Expenses related to
strategic alternatives review
|
7
|
|
—
|
|
8
|
|
—
|
|
Loss on impairment of
goodwill
|
—
|
|
—
|
|
—
|
|
547
|
|
(Gain) loss on asset
disposals, net
|
6
|
|
2
|
|
17
|
|
10
|
|
(Gain) loss on license
sales and exchanges, net
|
(1)
|
|
—
|
|
(2)
|
|
—
|
|
Adjusted EBITDA
(Non-GAAP)1
|
$
272
|
|
$
95
|
|
$
986
|
|
$
285
|
|
Deduct:
|
|
|
|
|
|
|
|
|
Equity in earnings of
unconsolidated entities
|
42
|
|
—
|
|
158
|
|
—
|
|
Interest and dividend
income
|
2
|
|
1
|
|
10
|
|
4
|
|
Other, net
|
—
|
|
1
|
|
—
|
|
2
|
|
Adjusted OIBDA
(Non-GAAP)1
|
$
228
|
|
$
93
|
|
$
818
|
|
$
279
|
|
|
Numbers may not foot
due to rounding.
|
|
|
|
1
|
EBITDA, Adjusted EBITDA
and Adjusted OIBDA are defined as net income adjusted for the
items set forth in the reconciliation above. EBITDA, Adjusted
EBITDA and Adjusted OIBDA are not measures of financial performance
under Generally Accepted Accounting Principles in the United States
(GAAP) and should not be considered as alternatives to Net income
or Cash flows from operating activities, as indicators of cash
flows or as measures of liquidity. TDS does not intend to imply
that any such items set forth in the reconciliation above are
infrequent or unusual; such items may occur in the
future. Management uses Adjusted EBITDA and Adjusted OIBDA as
measurements of profitability, and therefore reconciliations to Net
income are deemed appropriate. Management believes Adjusted EBITDA
and Adjusted OIBDA are useful measures of TDS' operating results
before significant recurring non-cash charges, nonrecurring
expenses, gains and losses, and other items as presented above as
they provide additional relevant and useful information to
investors and other users of TDS' financial data in evaluating the
effectiveness of its operations and underlying business trends in a
manner that is consistent with management's evaluation of business
performance. Adjusted EBITDA shows adjusted earnings before
interest, taxes, depreciation, amortization and accretion, gains
and losses, and expenses related to the strategic alternatives
review of UScellular while Adjusted OIBDA reduces this measure
further to exclude Equity in earnings of unconsolidated entities
and Interest and dividend income in order to more effectively show
the performance of operating activities excluding investment
activities. The table above reconciles EBITDA, Adjusted EBITDA and
Adjusted OIBDA to the corresponding GAAP measure, Net income or
Income before income taxes. Additional information and
reconciliations related to Non-GAAP financial measures for March
31, 2024, can be found on TDS' website at
investors.tdsinc.com.
|
|
|
|
2
|
2024 Estimated Results
do not reflect any anticipated costs, expenses or results of the
strategic alternatives review referenced above.
|
Conference Call Information
TDS will hold a conference call on May 3, 2024 at
9:00 a.m. Central Time.
- Access the live call on the Events & Presentations page
of investors.tdsinc.com or at
https://events.q4inc.com/attendee/316610586
- Access the call by phone at (888)330-2384, conference ID:
1328528.
Before the call, certain financial and statistical information
to be discussed during the call will be posted to
investors.tdsinc.com. The call will be archived on the Events &
Presentations page of investors.tdsinc.com.
About TDS
Telephone and Data Systems, Inc. (TDS), a Fortune
1000® company, provides wireless; broadband, video and
voice; and hosted and managed services to approximately 6
million connections nationwide through its businesses, UScellular,
TDS Telecom, and OneNeck IT Solutions. Founded in 1969 and
headquartered in Chicago, TDS
employed approximately 8,600 associates as of March 31, 2024.
Visit investors.tdsinc.com for comprehensive financial
information, including earnings releases, quarterly and annual
filings, shareholder information and more.
Safe Harbor Statement Under the Private Securities
Litigation Reform Act of 1995: All information set
forth in this news release, except historical and factual
information, represents forward-looking statements. This includes
all statements about the company's plans, beliefs, estimates, and
expectations. These statements are based on current estimates,
projections, and assumptions, which involve certain risks and
uncertainties that could cause actual results to differ materially
from those in the forward-looking statements. Important factors
that may affect these forward-looking statements include, but are
not limited to: whether any strategic alternatives for UScellular
will be successfully identified or completed; whether any such
strategic alternative will result in additional value for TDS or
its shareholders and whether the process will have an adverse
impact on TDS' businesses; intense competition; the ability to
obtain or maintain roaming arrangements with other carriers on
acceptable terms and changes in roaming practices; the ability to
obtain access to adequate radio spectrum to meet current or
anticipated future needs, including participation in FCC auctions;
the ability to attract people of outstanding talent throughout all
levels of the organization; TDS' smaller scale relative to larger
competitors; changes in demand, consumer preferences and
perceptions, price competition, or churn rates; advances in
technology; impacts of costs, integration problems or other factors
associated with acquisitions, divestitures or exchanges of
properties or wireless spectrum licenses and/or expansion of TDS'
businesses; the ability of the company to successfully construct
and manage its networks; difficulties involving third parties with
which TDS does business; uncertainties in TDS' future cash flows
and liquidity and access to the capital markets; the ability to
make payments on TDS and UScellular indebtedness or comply with the
terms of debt covenants; the effect on TDS' business if the
collateral securing its secured term loan is foreclosed upon;
conditions in the U.S. telecommunications industry; the value of
assets and investments; the state and federal regulatory
environment; pending and future litigation; cyber-attacks or other
breaches of network or information technology security; control by
the TDS Voting Trust; disruption in credit or other financial
markets; deterioration of U.S. or global economic conditions; and
the impact, duration and severity of public health emergencies.
Investors are encouraged to consider these and other risks and
uncertainties that are more fully described under "Risk Factors" in
the most recent filing of TDS' Form 10-K, as updated by any TDS
Form 10-Q filed subsequent to such Form 10-K.
For more information about TDS and its subsidiaries, visit:
TDS: www.tdsinc.com
UScellular: www.uscellular.com
TDS Telecom: www.tdstelecom.com
OneNeck IT Solutions: www.oneneck.com
|
United States
Cellular Corporation
|
|
Summary Operating
Data (Unaudited)
|
|
As of or for the
Quarter Ended
|
3/31/2024
|
|
12/31/2023
|
|
9/30/2023
|
|
6/30/2023
|
|
3/31/2023
|
|
Retail
Connections
|
|
|
|
|
|
|
|
|
|
|
Postpaid
|
|
|
|
|
|
|
|
|
|
|
Total at end of
period1
|
4,051,000
|
|
4,106,000
|
|
4,159,000
|
|
4,194,000
|
|
4,223,000
|
|
Gross
additions
|
106,000
|
|
129,000
|
|
128,000
|
|
125,000
|
|
137,000
|
|
Handsets
|
63,000
|
|
80,000
|
|
84,000
|
|
83,000
|
|
93,000
|
|
Connected
devices
|
43,000
|
|
49,000
|
|
44,000
|
|
42,000
|
|
44,000
|
|
Net additions
(losses)1
|
(44,000)
|
|
(50,000)
|
|
(35,000)
|
|
(28,000)
|
|
(24,000)
|
|
Handsets
|
(47,000)
|
|
(53,000)
|
|
(38,000)
|
|
(29,000)
|
|
(25,000)
|
|
Connected
devices
|
3,000
|
|
3,000
|
|
3,000
|
|
1,000
|
|
1,000
|
|
ARPU2
|
$
51.96
|
|
$
51.61
|
|
$
51.11
|
|
$
50.64
|
|
$
50.66
|
|
ARPA3
|
$
132.00
|
|
$ 131.63
|
|
$ 130.91
|
|
$ 130.19
|
|
$ 130.77
|
|
Handset upgrade
rate4
|
4.5 %
|
|
5.8 %
|
|
4.5 %
|
|
4.8 %
|
|
4.9 %
|
|
Churn
rate5
|
1.22 %
|
|
1.44 %
|
|
1.30 %
|
|
1.21 %
|
|
1.27 %
|
|
Handsets
|
1.03 %
|
|
1.22 %
|
|
1.11 %
|
|
1.01 %
|
|
1.06 %
|
|
Connected
devices
|
2.52 %
|
|
3.03 %
|
|
2.64 %
|
|
2.65 %
|
|
2.78 %
|
|
Prepaid
|
|
|
|
|
|
|
|
|
|
|
Total at end of
period1
|
436,000
|
|
451,000
|
|
462,000
|
|
462,000
|
|
470,000
|
|
Gross
additions
|
41,000
|
|
43,000
|
|
52,000
|
|
50,000
|
|
43,000
|
|
Net additions
(losses)1
|
(13,000)
|
|
(11,000)
|
|
—
|
|
(8,000)
|
|
(23,000)
|
|
ARPU2,
6
|
$
32.25
|
|
$
32.32
|
|
$
33.44
|
|
$
33.86
|
|
$
33.19
|
|
Churn
rate5
|
4.06 %
|
|
3.87 %
|
|
3.68 %
|
|
4.18 %
|
|
4.63 %
|
|
Market penetration
at end of period
|
|
|
|
|
|
|
|
|
|
|
Consolidated operating
population
|
32,550,000
|
|
32,350,000
|
|
32,350,000
|
|
32,350,000
|
|
32,350,000
|
|
Consolidated operating
penetration7
|
14 %
|
|
15 %
|
|
15 %
|
|
15 %
|
|
15 %
|
|
Capital expenditures
(millions)
|
$
131
|
|
$
148
|
|
$
111
|
|
$
143
|
|
$
208
|
|
Total cell sites in
service
|
6,995
|
|
7,000
|
|
6,973
|
|
6,952
|
|
6,950
|
|
Owned
towers
|
4,382
|
|
4,373
|
|
4,356
|
|
4,341
|
|
4,338
|
|
|
|
1
|
First quarter 2024
connections were adjusted to remove subscribers that could no
longer access the UScellular network due to the CDMA shutdown. This
resulted in 11,000 and 2,000 subscribers removed from the postpaid
and prepaid base, respectively, that are not included in Net
additions (losses) for the quarter.
|
|
2
|
Average Revenue Per
User (ARPU) - metric is calculated by dividing a revenue base by an
average number of connections and by the number of months in the
period. These revenue bases and connection populations are
shown below:
|
|
• Postpaid
ARPU consists of total postpaid service revenues and postpaid
connections.
|
|
• Prepaid
ARPU consists of total prepaid service revenues and prepaid
connections.
|
|
3
|
Average Revenue Per
Account (ARPA) - metric is calculated by dividing total postpaid
service revenues by the average number of postpaid accounts and by
the number of months in the period.
|
|
4
|
Handset upgrade rate
calculated as total handset upgrade transactions divided by average
postpaid handset connections.
|
|
5
|
Churn rate represents
the percentage of the connections that disconnect service each
month. These rates represent the average monthly churn rate for
each respective period.
|
|
6
|
Fourth quarter 2023
Prepaid ARPU excludes a $6 million reduction of prepaid revenue
related to an adjustment to correct a prior period error recorded
in the fourth quarter of 2023.
|
|
7
|
Market penetration is
calculated by dividing the number of wireless connections at the
end of the period by the total estimated population of consolidated
operating markets.
|
|
TDS
Telecom
|
|
Summary Operating
Data (Unaudited)
|
|
As of or for the
Quarter Ended
|
3/31/2024
|
|
12/31/2023
|
|
9/30/2023
|
|
6/30/2023
|
|
3/31/2023
|
|
Residential
connections
|
|
|
|
|
|
|
|
|
|
|
Broadband
|
|
|
|
|
|
|
|
|
|
|
Incumbent
|
245,100
|
|
244,800
|
|
248,800
|
|
249,200
|
|
247,900
|
|
Expansion
|
100,400
|
|
92,200
|
|
79,400
|
|
70,200
|
|
62,800
|
|
Cable
|
202,400
|
|
202,900
|
|
204,400
|
|
204,200
|
|
204,700
|
|
Total
Broadband1
|
547,900
|
|
539,800
|
|
532,600
|
|
523,600
|
|
515,400
|
|
Video
|
128,800
|
|
131,500
|
|
132,400
|
|
132,300
|
|
132,600
|
|
Voice
|
279,400
|
|
281,600
|
|
284,000
|
|
288,200
|
|
289,200
|
|
Total Residential
connections
|
956,100
|
|
952,900
|
|
949,000
|
|
944,100
|
|
937,200
|
|
Commercial
connections
|
206,200
|
|
210,200
|
|
217,400
|
|
223,300
|
|
229,800
|
|
Total
connections
|
1,162,200
|
|
1,163,100
|
|
1,166,400
|
|
1,167,400
|
|
1,167,000
|
|
|
|
|
|
|
|
|
|
|
|
Residential revenue
per connection2
|
$
64.58
|
|
$
62.74
|
|
$
62.15
|
|
$
61.97
|
|
$
60.24
|
|
|
|
|
|
|
|
|
|
|
|
Capital expenditures
(millions)
|
$
87
|
|
$
143
|
|
$
172
|
|
$
132
|
|
$
130
|
|
|
Numbers may not foot
due to rounding.
|
|
|
|
1
|
Total residential
broadband connections increased by 8,100 during the three months
ended March 31, 2024, due primarily to net additions of 6,400 as
well as certain other adjustments.
|
|
2
|
Total residential
revenue per connection is calculated by dividing total residential
revenue by the average number of residential connections and by the
number of months in the period.
|
|
Telephone and Data
Systems, Inc.
|
|
Consolidated
Statement of Operations Highlights
|
|
(Unaudited)
|
|
Three Months
Ended
March
31,
|
|
2024
|
|
2023
|
|
2024
vs. 2023
|
|
(Dollars and shares in
millions, except per share amounts)
|
|
|
|
|
|
|
Operating
revenues
|
|
|
|
|
|
|
UScellular
|
$ 950
|
|
$
986
|
|
(4) %
|
|
TDS Telecom
|
266
|
|
253
|
|
5 %
|
|
All
Other1
|
46
|
|
64
|
|
(29) %
|
|
1,262
|
|
1,303
|
|
(3) %
|
|
Operating
expenses
|
|
|
|
|
|
|
UScellular
|
|
|
|
|
|
|
Expenses excluding
depreciation, amortization and accretion
|
729
|
|
780
|
|
(7) %
|
|
Depreciation,
amortization and accretion
|
165
|
|
170
|
|
(2) %
|
|
(Gain) loss on asset
disposals, net
|
6
|
|
10
|
|
(43) %
|
|
(Gain) loss on license
sales and exchanges, net
|
(1)
|
|
—
|
|
N/M
|
|
899
|
|
960
|
|
(6) %
|
|
TDS Telecom
|
|
|
|
|
|
|
Expenses excluding
depreciation, amortization and accretion
|
173
|
|
185
|
|
(6) %
|
|
Depreciation,
amortization and accretion
|
65
|
|
59
|
|
10 %
|
|
(Gain) loss on asset
disposals, net
|
2
|
|
1
|
|
60 %
|
|
240
|
|
245
|
|
(2) %
|
|
All
Other1
|
|
|
|
|
|
|
Expenses excluding
depreciation and amortization
|
53
|
|
66
|
|
(20) %
|
|
Depreciation and
amortization
|
4
|
|
3
|
|
(14) %
|
|
(Gain) loss on asset
disposals, net
|
(1)
|
|
—
|
|
N/M
|
|
56
|
|
69
|
|
(20) %
|
|
Total operating
expenses
|
1,195
|
|
1,274
|
|
(6) %
|
|
Operating income
(loss)
|
|
|
|
|
|
|
UScellular
|
51
|
|
26
|
|
94 %
|
|
TDS Telecom
|
27
|
|
8
|
|
N/M
|
|
All
Other1
|
(11)
|
|
(5)
|
|
(83) %
|
|
67
|
|
29
|
|
N/M
|
|
Investment and other
income (expense)
|
|
|
|
|
|
|
Equity in earnings of
unconsolidated entities
|
42
|
|
44
|
|
(3) %
|
|
Interest and dividend
income
|
5
|
|
5
|
|
(4) %
|
|
Interest
expense
|
(57)
|
|
(53)
|
|
(9) %
|
|
Other, net
|
1
|
|
—
|
|
N/M
|
|
Total investment and
other income (expense)
|
(9)
|
|
(4)
|
|
N/M
|
|
Income before income
taxes
|
58
|
|
25
|
|
N/M
|
|
Income tax
expense
|
20
|
|
13
|
|
49 %
|
|
Net
income
|
38
|
|
12
|
|
N/M
|
|
Less: Net income
attributable to noncontrolling interests, net of tax
|
9
|
|
4
|
|
N/M
|
|
Net income
attributable to TDS shareholders
|
29
|
|
8
|
|
N/M
|
|
TDS Preferred Share
dividends
|
17
|
|
17
|
|
—
|
|
Net income (loss)
attributable to TDS common shareholders
|
$
12
|
|
$ (9)
|
|
N/M
|
|
|
|
|
|
|
|
Basic weighted
average shares outstanding
|
113
|
|
113
|
|
—
|
|
Basic earnings
(loss) per share attributable to TDS common
shareholders
|
$ 0.11
|
|
$ (0.08)
|
|
N/M
|
|
|
|
|
|
|
|
Diluted weighted
average shares outstanding
|
117
|
|
113
|
|
4 %
|
|
Diluted earnings
(loss) per share attributable to TDS common
shareholders
|
$ 0.10
|
|
$ (0.08)
|
|
N/M
|
|
|
N/M - Percentage change
not meaningful.
|
|
|
Numbers may not foot
due to rounding.
|
|
|
|
1
|
Consists of TDS
corporate, intercompany eliminations and all other business
operations not included in the UScellular and TDS Telecom
segments.
|
|
Telephone and Data
Systems, Inc.
|
|
Consolidated
Statement of Cash Flows
|
|
(Unaudited)
|
|
Three Months
Ended
March
31,
|
|
2024
|
|
2023
|
|
(Dollars in
millions)
|
|
|
|
|
Cash flows from
operating activities
|
|
|
|
|
Net income
|
$
38
|
|
$
12
|
|
Add (deduct)
adjustments to reconcile net income to net cash flows from
operating activities
|
|
|
|
|
Depreciation,
amortization and accretion
|
234
|
|
232
|
|
Bad debts
expense
|
31
|
|
27
|
|
Stock-based
compensation expense
|
14
|
|
3
|
|
Deferred income taxes,
net
|
14
|
|
9
|
|
Equity in earnings of
unconsolidated entities
|
(42)
|
|
(44)
|
|
Distributions from
unconsolidated entities
|
22
|
|
20
|
|
(Gain) loss on asset
disposals, net
|
7
|
|
11
|
|
(Gain) loss on license
sales and exchanges, net
|
(1)
|
|
—
|
|
Other operating
activities
|
1
|
|
2
|
|
Changes in assets and
liabilities from operations
|
|
|
|
|
Accounts
receivable
|
27
|
|
22
|
|
Equipment installment
plans receivable
|
2
|
|
1
|
|
Inventory
|
24
|
|
—
|
|
Accounts
payable
|
(35)
|
|
(162)
|
|
Customer deposits and
deferred revenues
|
6
|
|
(9)
|
|
Accrued
taxes
|
4
|
|
1
|
|
Accrued
interest
|
9
|
|
9
|
|
Other assets and
liabilities
|
(131)
|
|
(88)
|
|
Net cash provided by
operating activities
|
224
|
|
46
|
|
|
|
|
|
Cash flows from
investing activities
|
|
|
|
|
Cash paid for
additions to property, plant and equipment
|
(235)
|
|
(331)
|
|
Cash paid for
intangible assets
|
(11)
|
|
(5)
|
|
Other investing
activities
|
—
|
|
2
|
|
Net cash used in
investing activities
|
(246)
|
|
(334)
|
|
|
|
|
|
Cash flows from
financing activities
|
|
|
|
|
Issuance of long-term
debt
|
140
|
|
316
|
|
Repayment of long-term
debt
|
(57)
|
|
(5)
|
|
Repayment of
short-term debt
|
—
|
|
(60)
|
|
Tax payments for TDS
stock-based compensation awards
|
(1)
|
|
(2)
|
|
Repurchase of TDS
Common Shares
|
—
|
|
(3)
|
|
Dividends paid to TDS
shareholders
|
(39)
|
|
(38)
|
|
Distributions to
noncontrolling interests
|
(2)
|
|
(1)
|
|
Cash paid for software
license agreements
|
(9)
|
|
(8)
|
|
Other financing
activities
|
(2)
|
|
(1)
|
|
Net cash provided by
financing activities
|
30
|
|
198
|
|
|
|
|
|
Net increase
(decrease) in cash, cash equivalents and restricted
cash
|
8
|
|
(90)
|
|
|
|
|
|
Cash, cash
equivalents and restricted cash
|
|
|
|
|
Beginning of
period
|
270
|
|
399
|
|
End of
period
|
$
278
|
|
$
309
|
|
Telephone and Data
Systems, Inc.
|
|
Consolidated Balance
Sheet Highlights
|
|
(Unaudited)
|
|
|
ASSETS
|
|
|
|
|
|
March 31,
2024
|
|
December 31,
2023
|
|
(Dollars in
millions)
|
|
|
|
|
Current
assets
|
|
|
|
|
Cash and cash
equivalents
|
$
249
|
|
$
236
|
|
Accounts receivable,
net
|
1,036
|
|
1,074
|
|
Inventory,
net
|
184
|
|
208
|
|
Prepaid
expenses
|
107
|
|
86
|
|
Income taxes
receivable
|
3
|
|
4
|
|
Other current
assets
|
49
|
|
52
|
|
Total current
assets
|
1,628
|
|
1,660
|
|
|
|
|
|
Assets held for
sale
|
—
|
|
15
|
|
|
|
|
|
Licenses
|
4,720
|
|
4,702
|
|
|
|
|
|
Other intangible
assets, net
|
178
|
|
183
|
|
|
|
|
|
Investments in
unconsolidated entities
|
526
|
|
505
|
|
|
|
|
|
Property, plant
and equipment, net
|
5,052
|
|
5,062
|
|
|
|
|
|
Operating lease
right-of-use assets
|
979
|
|
987
|
|
|
|
|
|
Other assets and
deferred charges
|
783
|
|
807
|
|
|
|
|
|
Total
assets
|
$
13,866
|
|
$
13,921
|
|
Telephone and Data
Systems, Inc.
|
|
Consolidated Balance
Sheet Highlights
|
|
(Unaudited)
|
|
|
LIABILITIES AND
EQUITY
|
|
|
|
|
|
March 31,
2024
|
|
December 31,
2023
|
|
(Dollars in millions,
except per share amounts)
|
|
|
|
|
Current
liabilities
|
|
|
|
|
Current portion of
long-term debt
|
$
26
|
|
$
26
|
|
Accounts
payable
|
302
|
|
360
|
|
Customer deposits and
deferred revenues
|
284
|
|
277
|
|
Accrued
interest
|
21
|
|
12
|
|
Accrued
taxes
|
44
|
|
43
|
|
Accrued
compensation
|
59
|
|
149
|
|
Short-term operating
lease liabilities
|
147
|
|
147
|
|
Other current
liabilities
|
148
|
|
170
|
|
Total current
liabilities
|
1,031
|
|
1,184
|
|
|
|
|
|
Deferred liabilities
and credits
|
|
|
|
|
Deferred income tax
liability, net
|
988
|
|
975
|
|
Long-term operating
lease liabilities
|
883
|
|
890
|
|
Other deferred
liabilities and credits
|
780
|
|
784
|
|
|
|
|
|
Long-term debt,
net
|
4,164
|
|
4,080
|
|
|
|
|
|
Noncontrolling
interests with redemption features
|
16
|
|
12
|
|
|
|
|
|
Equity
|
|
|
|
|
TDS shareholders'
equity
|
|
|
|
|
Series A Common and
Common Shares, par value $0.01 per share
|
1
|
|
1
|
|
Capital in excess of
par value
|
2,570
|
|
2,558
|
|
Preferred Shares, par
value $0.01 per share
|
1,074
|
|
1,074
|
|
Treasury shares, at
cost
|
(460)
|
|
(465)
|
|
Accumulated other
comprehensive income
|
11
|
|
11
|
|
Retained
earnings
|
2,008
|
|
2,023
|
|
Total TDS
shareholders' equity
|
5,204
|
|
5,202
|
|
|
|
|
|
Noncontrolling
interests
|
800
|
|
794
|
|
|
|
|
|
Total
equity
|
6,004
|
|
5,996
|
|
|
|
|
|
Total liabilities
and equity
|
$
13,866
|
|
$
13,921
|
|
Balance Sheet
Highlights
|
|
(Unaudited)
|
|
|
|
March 31,
2024
|
|
|
|
TDS
|
|
TDS
Corporate
|
|
Intercompany
|
|
TDS
|
|
UScellular
|
|
Telecom
|
|
&
Other
|
|
Eliminations
|
|
Consolidated
|
|
(Dollars in
millions)
|
|
|
|
|
|
|
|
|
|
|
Cash and cash
equivalents
|
$
185
|
|
$
38
|
|
$
65
|
|
$
(39)
|
|
$
249
|
|
|
|
|
|
|
|
|
|
|
|
Licenses and other
intangible assets
|
$
4,711
|
|
$
182
|
|
$
5
|
|
$
—
|
|
$
4,898
|
|
Investment in
unconsolidated entities
|
482
|
|
4
|
|
48
|
|
(8)
|
|
526
|
|
$
5,193
|
|
$
186
|
|
$
53
|
|
$
(8)
|
|
$
5,424
|
|
|
|
|
|
|
|
|
|
|
|
Property, plant and
equipment, net
|
$
2,540
|
|
$
2,429
|
|
$
83
|
|
$
—
|
|
$
5,052
|
|
|
|
|
|
|
|
|
|
|
|
Long-term debt,
net:
|
|
|
|
|
|
|
|
|
|
|
Current
portion
|
$
20
|
|
$
—
|
|
$
6
|
|
$
—
|
|
$
26
|
|
Non-current
portion
|
3,029
|
|
3
|
|
1,132
|
|
—
|
|
4,164
|
|
$
3,049
|
|
$
3
|
|
$
1,138
|
|
$
—
|
|
$
4,190
|
|
TDS Telecom
Highlights
|
|
(Unaudited)
|
|
|
|
|
|
|
|
Three Months
Ended
March
31,
|
|
2024
|
|
2023
|
|
2024
vs. 2023
|
|
(Dollars in
millions)
|
|
|
|
|
|
|
Operating
revenues
|
|
|
|
|
|
|
Residential
|
|
|
|
|
|
|
Incumbent
|
$
90
|
|
$
86
|
|
4 %
|
|
Expansion
|
26
|
|
15
|
|
71 %
|
|
Cable
|
70
|
|
68
|
|
3 %
|
|
Total
residential
|
185
|
|
169
|
|
10 %
|
|
Commercial
|
37
|
|
41
|
|
(9) %
|
|
Wholesale
|
44
|
|
43
|
|
3 %
|
|
Total service
revenues
|
266
|
|
253
|
|
5 %
|
|
Equipment
revenues
|
—
|
|
—
|
|
(35) %
|
|
Total operating
revenues
|
266
|
|
253
|
|
5 %
|
|
|
|
|
|
|
|
Cost of
services
|
98
|
|
104
|
|
(6) %
|
|
Cost of equipment and
products
|
—
|
|
—
|
|
15 %
|
|
Selling, general and
administrative expenses
|
75
|
|
80
|
|
(6) %
|
|
Depreciation,
amortization and accretion
|
65
|
|
59
|
|
10 %
|
|
(Gain) loss on asset
disposals, net
|
2
|
|
1
|
|
60 %
|
|
Total operating
expenses
|
240
|
|
245
|
|
(2) %
|
|
|
|
|
|
|
|
Operating
income
|
$
27
|
|
$
8
|
|
N/M
|
|
|
N/M - Percentage change
not meaningful
|
|
|
Numbers may not foot
due to rounding.
|
|
Telephone and Data
Systems, Inc.
Financial Measures
and Reconciliations
(Unaudited)
|
|
|
Free Cash
Flow
|
|
|
Three Months
Ended
March
31,
|
|
TDS -
CONSOLIDATED
|
2024
|
|
2023
|
|
(Dollars in
millions)
|
|
|
|
|
Cash flows from
operating activities (GAAP)
|
$
224
|
|
$
46
|
|
Cash paid for additions
to property, plant and equipment
|
(235)
|
|
(331)
|
|
Cash paid for software
license agreements
|
(9)
|
|
(8)
|
|
Free cash flow
(Non-GAAP)1
|
$
(20)
|
|
$
(293)
|
|
Three Months
Ended
March
31,
|
|
UScellular
|
2024
|
|
2023
|
|
(Dollars in
millions)
|
|
|
|
|
Cash flows from
operating activities (GAAP)
|
$
203
|
|
$
41
|
|
Cash paid for additions
to property, plant and equipment
|
(133)
|
|
(196)
|
|
Cash paid for software
license agreements
|
(9)
|
|
(7)
|
|
Free cash flow
(Non-GAAP)1
|
$
61
|
|
$
(162)
|
|
|
|
1
|
Free cash flow is a
non-GAAP financial measure which TDS believes may be useful to
investors and other users of its financial information in
evaluating liquidity, specifically, the amount of net cash
generated by business operations after deducting Cash paid for
additions to property, plant and equipment and Cash paid for
software license agreements.
|
EBITDA, Adjusted EBITDA and Adjusted OIBDA
The following tables reconcile EBITDA, Adjusted EBITDA and
Adjusted OIBDA to the corresponding GAAP measures, Net income and
Income before income taxes.
|
Three Months
Ended
March
31,
|
|
UScellular
|
2024
|
|
2023
|
|
(Dollars in
millions)
|
|
|
|
|
Net income
(GAAP)
|
$
24
|
|
$
14
|
|
Add back:
|
|
|
|
|
Income tax
expense
|
28
|
|
11
|
|
Income before income
taxes (GAAP)
|
52
|
|
25
|
|
Add back:
|
|
|
|
|
Interest
expense
|
43
|
|
47
|
|
Depreciation,
amortization and accretion
|
165
|
|
170
|
|
EBITDA
(Non-GAAP)
|
260
|
|
242
|
|
Add back or
deduct:
|
|
|
|
|
Expenses related to
strategic alternatives review
|
7
|
|
—
|
|
(Gain) loss on asset
disposals, net
|
6
|
|
10
|
|
(Gain) loss on license
sales and exchanges, net
|
(1)
|
|
—
|
|
Adjusted EBITDA
(Non-GAAP)
|
272
|
|
252
|
|
Deduct:
|
|
|
|
|
Equity in earnings of
unconsolidated entities
|
42
|
|
44
|
|
Interest and dividend
income
|
2
|
|
2
|
|
Adjusted OIBDA
(Non-GAAP)
|
$
228
|
|
$
206
|
|
Three Months
Ended
March
31,
|
|
TDS
TELECOM
|
2024
|
|
2023
|
|
(Dollars in
millions)
|
|
|
|
|
Net income
(GAAP)
|
$
24
|
|
$
8
|
|
Add back:
|
|
|
|
|
Income tax
expense
|
7
|
|
3
|
|
Interest
expense
|
(2)
|
|
(2)
|
|
Depreciation,
amortization and accretion
|
65
|
|
59
|
|
EBITDA
(Non-GAAP)
|
93
|
|
68
|
|
Add back or
deduct:
|
|
|
|
|
(Gain) loss on asset
disposals, net
|
2
|
|
1
|
|
Adjusted EBITDA
(Non-GAAP)
|
95
|
|
69
|
|
Deduct:
|
|
|
|
|
Interest and dividend
income
|
1
|
|
1
|
|
Other, net
|
1
|
|
—
|
|
Adjusted OIBDA
(Non-GAAP)
|
93
|
|
68
|
|
Deduct:
|
|
|
|
|
Depreciation,
amortization and accretion
|
65
|
|
59
|
|
(Gain) loss on asset
disposals, net
|
2
|
|
1
|
|
Operating income
(GAAP)
|
$
27
|
|
$
8
|
|
|
Numbers may not foot
due to rounding.
|
View original
content:https://www.prnewswire.com/news-releases/tds-reports-first-quarter-2024-results-302135294.html
SOURCE Telephone and Data Systems, Inc.