TDS reports second quarter 2024 results
As previously announced, TDS will hold a teleconference on
2Q 2024 Highlights*
UScellular
- Announced sale of wireless operations and select spectrum assets
-
Now reporting Wireless and Towers segments
- Wireless
- Sequential improvement in postpaid gross additions and postpaid net losses
- Postpaid ARPU grew 2%; service revenues decreased 2%
- Towers
- Third-party tower revenues increased 1%
- Wireless
- Fixed wireless customers grew 40% to 134,000
- Strong cost management led to increased operating income, net income and Adjusted OIBDA
-
Making progress on goal to deliver 125,000 fiber service addresses in 2024
- Grew total year over year service address footprint 10%
- Delivered 27,000 fiber services addresses in Q2
-
Operating revenues grew 4%; residential revenue growth of 7%
- Residential broadband connections grew 5% due to broadband investments
- Residential ARPU grew 5% due to price increases
-
Strong net income and Adjusted EBITDA growth
- Good expense discipline
* Comparisons are 2Q'23 to 2Q'24 unless otherwise noted
"TDS is working to optimize our portfolio of businesses to position the Company for future success," said LeRoy T. Carlson, Jr., TDS President and CEO. "During the second quarter, we announced transactions regarding both UScellular and
"In Q2, UScellular remained focused on balancing subscriber growth with financial discipline and reported solid ARPU growth, good expense discipline, and improved profitability - all combining to generate higher free cash flow. While postpaid handset subscribers declined in the quarter, UScellular saw a return to subscriber growth in prepaid and steady growth in fixed wireless.
"
Announced Transaction and Exploration of Strategic Alternatives for UScellular
On
UScellular retains its nearly 4,400 owned towers, its equity method investments, and approximately 70% of its spectrum assets. The strategic alternatives review process is ongoing as UScellular seeks to opportunistically monetize its spectrum assets that are not subject to the T-Mobile transaction.
2024 Estimated Results
TDS' current estimates of full-year 2024 results for UScellular and
2024 Estimated Results |
||
|
|
|
UScellular |
Previous |
Current |
(Dollars in millions) |
|
|
Service revenues |
|
Unchanged |
Adjusted OIBDA1, 2 |
|
Unchanged |
Adjusted EBITDA1, 2 |
|
Unchanged |
Capital expenditures |
|
Unchanged |
|
|
|
|
Previous |
Current |
(Dollars in millions) |
|
|
Total operating revenues |
|
|
Adjusted OIBDA1 |
|
|
Adjusted EBITDA1 |
|
|
Capital expenditures |
|
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 |
|
|
(Dollars in millions) |
|
|
|
Net income (GAAP) |
N/A |
|
N/A |
Add back: |
|
|
|
Income tax expense |
N/A |
|
N/A |
Income before income taxes (GAAP) |
|
|
|
Add back: |
|
|
|
Interest expense |
185 |
|
— |
Depreciation, amortization and accretion expense |
660 |
|
270 |
EBITDA (Non-GAAP)1 |
|
|
|
Add back or deduct: |
|
|
|
(Gain) loss on asset disposals, net |
15 |
|
— |
Adjusted EBITDA (Non-GAAP)1 |
|
|
|
Deduct: |
|
|
|
Equity in earnings of unconsolidated entities |
155 |
|
— |
Interest and dividend income |
15 |
|
— |
Adjusted OIBDA (Non-GAAP)1 |
|
|
|
|
Actual Results |
||||||
|
Six Months Ended
|
|
Year Ended
|
||||
|
UScellular |
|
TDS Telecom |
|
UScellular |
|
TDS Telecom |
(Dollars in millions) |
|
|
|
|
|
|
|
Net income (loss) (GAAP) |
$ 42 |
|
$ 42 |
|
$ 58 |
|
$ (483) |
Add back: |
|
|
|
|
|
|
|
Income tax expense (benefit) |
41 |
|
10 |
|
53 |
|
(26) |
Income (loss) before income taxes (GAAP) |
$ 83 |
|
$ 52 |
|
$ 111 |
|
$ (509) |
Add back: |
|
|
|
|
|
|
|
Interest expense |
91 |
|
(2) |
|
196 |
|
(8) |
Depreciation, amortization and accretion expense |
329 |
|
131 |
|
656 |
|
245 |
EBITDA (Non-GAAP)1 |
$ 503 |
|
$ 181 |
|
$ 963 |
|
$ (272) |
Add back or deduct: |
|
|
|
|
|
|
|
Expenses related to strategic alternatives review |
21 |
|
— |
|
8 |
|
— |
Loss on impairment of goodwill |
— |
|
— |
|
— |
|
547 |
(Gain) loss on asset disposals, net |
11 |
|
6 |
|
17 |
|
10 |
(Gain) loss on license sales and exchanges, net |
7 |
|
— |
|
(2) |
|
— |
Adjusted EBITDA (Non-GAAP)1 |
$ 542 |
|
$ 187 |
|
$ 986 |
|
$ 285 |
Deduct: |
|
|
|
|
|
|
|
Equity in earnings of unconsolidated entities |
80 |
|
— |
|
158 |
|
— |
Interest and dividend income |
6 |
|
2 |
|
10 |
|
4 |
Other, net |
— |
|
2 |
|
— |
|
2 |
Adjusted OIBDA (Non-GAAP)1 |
$ 456 |
|
$ 183 |
|
$ 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 |
|
|
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
- Access the live call on the Events & Presentations page of investors.tdsinc.com or at https://events.q4inc.com/attendee/870908711
- 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
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 the announced transaction whereby UScellular has agreed to sell its wireless operations and selected spectrum assets to T-Mobile will be successfully completed or whether UScellular will be able to find buyers at mutually agreeable prices for its spectrum assets that are not subject to the agreement with T-Mobile; 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; strategic decisions regarding the tower business; 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
For more information about TDS and its subsidiaries, visit:
TDS: www.tdsinc.com
UScellular: www.uscellular.com
United
|
|||||||||
Summary Operating Data (Unaudited) |
|||||||||
As of or for the Quarter Ended |
|
|
|
|
|
|
|
|
|
Retail Connections |
|
|
|
|
|
|
|
|
|
Postpaid |
|
|
|
|
|
|
|
|
|
Total at end of period1 |
4,027,000 |
|
4,051,000 |
|
4,106,000 |
|
4,159,000 |
|
4,194,000 |
Gross additions |
117,000 |
|
106,000 |
|
129,000 |
|
128,000 |
|
125,000 |
Handsets |
73,000 |
|
63,000 |
|
80,000 |
|
84,000 |
|
83,000 |
Connected devices |
44,000 |
|
43,000 |
|
49,000 |
|
44,000 |
|
42,000 |
Net additions (losses)1 |
(24,000) |
|
(44,000) |
|
(50,000) |
|
(35,000) |
|
(28,000) |
Handsets |
(29,000) |
|
(47,000) |
|
(53,000) |
|
(38,000) |
|
(29,000) |
Connected devices |
5,000 |
|
3,000 |
|
3,000 |
|
3,000 |
|
1,000 |
ARPU2 |
$ 51.45 |
|
$ 51.96 |
|
$ 51.61 |
|
$ 51.11 |
|
$ 50.64 |
ARPA3 |
$ 130.41 |
|
$ 132.00 |
|
$ 131.63 |
|
$ 130.91 |
|
$ 130.19 |
Handset upgrade rate4 |
4.1 % |
|
4.5 % |
|
5.8 % |
|
4.5 % |
|
4.8 % |
Churn rate5 |
1.16 % |
|
1.22 % |
|
1.44 % |
|
1.30 % |
|
1.21 % |
Handsets |
0.97 % |
|
1.03 % |
|
1.22 % |
|
1.11 % |
|
1.01 % |
Connected devices |
2.47 % |
|
2.52 % |
|
3.03 % |
|
2.64 % |
|
2.65 % |
Prepaid |
|
|
|
|
|
|
|
|
|
Total at end of period1 |
439,000 |
|
436,000 |
|
451,000 |
|
462,000 |
|
462,000 |
Gross additions |
50,000 |
|
41,000 |
|
43,000 |
|
52,000 |
|
50,000 |
Net additions (losses)1 |
3,000 |
|
(13,000) |
|
(11,000) |
|
— |
|
(8,000) |
ARPU2, 6 |
$ 32.37 |
|
$ 32.25 |
|
$ 32.32 |
|
$ 33.44 |
|
$ 33.86 |
Churn rate5 |
3.60 % |
|
4.06 % |
|
3.87 % |
|
3.68 % |
|
4.18 % |
Market penetration at end of period |
|
|
|
|
|
|
|
|
|
Consolidated operating population |
32,550,000 |
|
32,550,000 |
|
32,350,000 |
|
32,350,000 |
|
32,350,000 |
Consolidated operating penetration7 |
15 % |
|
14 % |
|
15 % |
|
15 % |
|
15 % |
Capital expenditures (millions) |
$ 165 |
|
$ 131 |
|
$ 148 |
|
$ 111 |
|
$ 143 |
Total cell sites in service |
6,990 |
|
6,995 |
|
7,000 |
|
6,973 |
|
6,952 |
Owned towers |
4,388 |
|
4,382 |
|
4,373 |
|
4,356 |
|
4,341 |
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 |
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. |
|
|||||||||
Summary Operating Data (Unaudited) |
|||||||||
As of or for the Quarter Ended |
|
|
|
|
|
|
|
|
|
Residential connections |
|
|
|
|
|
|
|
|
|
Broadband |
|
|
|
|
|
|
|
|
|
Incumbent |
243,700 |
|
245,100 |
|
244,800 |
|
248,800 |
|
249,200 |
Expansion |
107,800 |
|
100,400 |
|
92,200 |
|
79,400 |
|
70,200 |
Cable |
198,500 |
|
202,400 |
|
202,900 |
|
204,400 |
|
204,200 |
Total Broadband1 |
550,000 |
|
547,900 |
|
539,800 |
|
532,600 |
|
523,600 |
Video |
124,800 |
|
128,800 |
|
131,500 |
|
132,400 |
|
132,300 |
Voice |
275,600 |
|
279,400 |
|
281,600 |
|
284,000 |
|
288,200 |
Total Residential connections |
950,400 |
|
956,100 |
|
952,900 |
|
949,000 |
|
944,100 |
Commercial connections |
201,500 |
|
206,200 |
|
210,200 |
|
217,400 |
|
223,300 |
Total connections |
1,152,000 |
|
1,162,200 |
|
1,163,100 |
|
1,166,400 |
|
1,167,400 |
|
|
|
|
|
|
|
|
|
|
Residential revenue per connection2 |
$ 65.26 |
|
$ 64.58 |
|
$ 62.74 |
|
$ 62.15 |
|
$ 61.97 |
|
|
|
|
|
|
|
|
|
|
Capital expenditures (millions) |
$ 78 |
|
$ 87 |
|
$ 143 |
|
$ 172 |
|
$ 132 |
Numbers may not foot due to rounding. |
|
1 |
Total residential broadband connections increased by 8,100 during the three months ended |
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. |
|
|||||||||||
Consolidated Statement of Operations Highlights |
|||||||||||
(Unaudited) |
|||||||||||
|
Three Months Ended
|
|
Six Months Ended
|
||||||||
|
2024 |
|
2023 |
|
2024 vs. 2023 |
|
2024 |
|
2023 |
|
2024 vs. 2023 |
(Dollars and shares in millions, except per share amounts) |
|
|
|
|
|
|
|
|
|
|
|
Operating revenues |
|
|
|
|
|
|
|
|
|
|
|
UScellular |
$ 927 |
|
$ 957 |
|
(3) % |
|
$ 1,877 |
|
|
|
(3) % |
|
267 |
|
257 |
|
4 % |
|
534 |
|
510 |
|
5 % |
All Other1 |
44 |
|
53 |
|
(19) % |
|
89 |
|
118 |
|
(24) % |
|
1,238 |
|
1,267 |
|
(2) % |
|
2,500 |
|
2,570 |
|
(3) % |
Operating expenses |
|
|
|
|
|
|
|
|
|
|
|
UScellular |
|
|
|
|
|
|
|
|
|
|
|
Expenses excluding depreciation, amortization and accretion |
713 |
|
759 |
|
(6) % |
|
1,442 |
|
1,538 |
|
(6) % |
Depreciation, amortization and accretion |
165 |
|
161 |
|
2 % |
|
329 |
|
330 |
|
— |
(Gain) loss on asset disposals, net |
5 |
|
3 |
|
49 % |
|
11 |
|
13 |
|
(19) % |
(Gain) loss on license sales and exchanges, net |
8 |
|
— |
|
N/M |
|
7 |
|
— |
|
N/M |
|
891 |
|
923 |
|
(3) % |
|
1,789 |
|
1,881 |
|
(5) % |
|
|
|
|
|
|
|
|
|
|
|
|
Expenses excluding depreciation, amortization and accretion |
178 |
|
189 |
|
(6) % |
|
351 |
|
374 |
|
(6) % |
Depreciation, amortization and accretion |
67 |
|
60 |
|
11 % |
|
131 |
|
119 |
|
10 % |
(Gain) loss on asset disposals, net |
4 |
|
2 |
|
N/M |
|
6 |
|
3 |
|
N/M |
|
248 |
|
251 |
|
(1) % |
|
488 |
|
496 |
|
(1) % |
All Other1 |
|
|
|
|
|
|
|
|
|
|
|
Expenses excluding depreciation and amortization |
58 |
|
56 |
|
— |
|
111 |
|
124 |
|
(11) % |
Depreciation and amortization |
1 |
|
4 |
|
(34) % |
|
7 |
|
7 |
|
(24) % |
(Gain) loss on asset disposals, net |
— |
|
— |
|
(95) % |
|
(1) |
|
— |
|
N/M |
|
60 |
|
60 |
|
(2) % |
|
117 |
|
131 |
|
(11) % |
Total operating expenses |
1,199 |
|
1,234 |
|
(3) % |
|
2,394 |
|
2,508 |
|
(5) % |
Operating income (loss) |
|
|
|
|
|
|
|
|
|
|
|
UScellular |
36 |
|
34 |
|
6 % |
|
88 |
|
61 |
|
44 % |
|
19 |
|
7 |
|
N/M |
|
46 |
|
15 |
|
N/M |
All Other1 |
(16) |
|
(8) |
|
N/M |
|
(28) |
|
(14) |
|
N/M |
|
39 |
|
33 |
|
17 % |
|
106 |
|
62 |
|
72 % |
Investment and other income (expense) |
|
|
|
|
|
|
|
|
|
|
|
Equity in earnings of unconsolidated entities |
39 |
|
38 |
|
3 % |
|
82 |
|
82 |
|
— |
Interest and dividend income |
7 |
|
6 |
|
28 % |
|
12 |
|
11 |
|
13 % |
Interest expense |
(73) |
|
(62) |
|
(18) % |
|
(131) |
|
(116) |
|
(14) % |
Other, net |
1 |
|
— |
|
N/M |
|
2 |
|
1 |
|
N/M |
Total investment and other expense |
(26) |
|
(18) |
|
(42) % |
|
(35) |
|
(22) |
|
(62) % |
Income before income taxes |
13 |
|
15 |
|
(13) % |
|
71 |
|
40 |
|
77 % |
Income tax expense |
6 |
|
15 |
|
(57) % |
|
26 |
|
28 |
|
(8) % |
Net income |
7 |
|
— |
|
N/M |
|
45 |
|
12 |
|
N/M |
Less: Net income attributable to noncontrolling interests, net of tax |
4 |
|
2 |
|
N/M |
|
13 |
|
6 |
|
N/M |
Net income (loss) attributable to TDS shareholders |
3 |
|
(2) |
|
N/M |
|
32 |
|
6 |
|
N/M |
TDS Preferred Share dividends |
17 |
|
17 |
|
— |
|
35 |
|
35 |
|
— |
Net income (loss) attributable to TDS common shareholders |
$ (14) |
|
$ (19) |
|
24 % |
|
$ (3) |
|
$ (29) |
|
91 % |
|
|
|
|
|
|
|
|
|
|
|
|
Basic weighted average shares outstanding |
114 |
|
113 |
|
1 % |
|
113 |
|
113 |
|
1 % |
Basic earnings (loss) per share attributable to TDS common shareholders |
$ (0.13) |
|
|
|
25 % |
|
$ (0.02) |
|
|
|
91 % |
|
|
|
|
|
|
|
|
|
|
|
|
Diluted weighted average shares outstanding |
114 |
|
113 |
|
1 % |
|
113 |
|
113 |
|
1 % |
Diluted earnings (loss) per share attributable to TDS common shareholders |
$ (0.13) |
|
|
|
23 % |
|
$ (0.03) |
|
|
|
89 % |
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 |
|
|||
Consolidated Statement of Cash Flows |
|||
(Unaudited) |
|||
|
Six Months Ended
|
||
|
2024 |
|
2023 |
(Dollars in millions) |
|
|
|
Cash flows from operating activities |
|
|
|
Net income |
$ 45 |
|
$ 12 |
Add (deduct) adjustments to reconcile net income to net cash flows from operating activities |
|
|
|
Depreciation, amortization and accretion |
467 |
|
456 |
Bad debts expense |
51 |
|
53 |
Stock-based compensation expense |
29 |
|
14 |
Deferred income taxes, net |
16 |
|
22 |
Equity in earnings of unconsolidated entities |
(82) |
|
(82) |
Distributions from unconsolidated entities |
80 |
|
78 |
(Gain) loss on asset disposals, net |
16 |
|
16 |
(Gain) loss on license sales and exchanges, net |
7 |
|
— |
Other operating activities |
5 |
|
4 |
Changes in assets and liabilities from operations |
|
|
|
Accounts receivable |
6 |
|
19 |
Equipment installment plans receivable |
5 |
|
7 |
Inventory |
54 |
|
52 |
Accounts payable |
(14) |
|
(124) |
Customer deposits and deferred revenues |
7 |
|
(9) |
Accrued taxes |
7 |
|
56 |
Accrued interest |
5 |
|
(1) |
Other assets and liabilities |
(78) |
|
(59) |
Net cash provided by operating activities |
626 |
|
514 |
|
|
|
|
Cash flows from investing activities |
|
|
|
Cash paid for additions to property, plant and equipment |
(451) |
|
(629) |
Cash paid for intangible assets |
(15) |
|
(8) |
Other investing activities |
1 |
|
8 |
Net cash used in investing activities |
(465) |
|
(629) |
|
|
|
|
Cash flows from financing activities |
|
|
|
Issuance of long-term debt |
440 |
|
391 |
Repayment of long-term debt |
(401) |
|
(209) |
Repayment of short-term debt |
— |
|
(60) |
Tax payments for TDS stock-based compensation awards |
(10) |
|
(3) |
Tax payments for UScellular stock-based compensation awards |
(12) |
|
(6) |
Repurchase of TDS Common Shares |
— |
|
(6) |
Dividends paid to TDS shareholders |
(61) |
|
(76) |
Payment of debt issuance costs |
(16) |
|
— |
Distributions to noncontrolling interests |
(3) |
|
(2) |
Cash paid for software license agreements |
(21) |
|
(20) |
Other financing activities |
(1) |
|
— |
Net cash provided by (used in) financing activities |
(85) |
|
9 |
|
|
|
|
Net increase (decrease) in cash, cash equivalents and restricted cash |
76 |
|
(106) |
|
|
|
|
Cash, cash equivalents and restricted cash |
|
|
|
Beginning of period |
270 |
|
399 |
End of period |
$ 346 |
|
$ 293 |
|
|||
Consolidated Balance Sheet Highlights |
|||
(Unaudited) |
|||
|
|||
ASSETS |
|||
|
|
|
|
|
|
|
|
(Dollars in millions) |
|
|
|
Current assets |
|
|
|
Cash and cash equivalents |
$ 322 |
|
$ 236 |
Accounts receivable, net |
1,037 |
|
1,074 |
Inventory, net |
148 |
|
208 |
Prepaid expenses |
88 |
|
86 |
Income taxes receivable |
4 |
|
4 |
Other current assets |
42 |
|
52 |
Total current assets |
1,641 |
|
1,660 |
|
|
|
|
Assets held for sale |
120 |
|
15 |
|
|
|
|
Licenses |
4,724 |
|
4,702 |
|
|
|
|
Other intangible assets, net |
173 |
|
183 |
|
|
|
|
Investments in unconsolidated entities |
507 |
|
505 |
|
|
|
|
Property, plant and equipment, net |
4,988 |
|
5,062 |
|
|
|
|
Operating lease right-of-use assets |
966 |
|
987 |
|
|
|
|
Other assets and deferred charges |
753 |
|
807 |
|
|
|
|
Total assets |
$ 13,872 |
|
$ 13,921 |
|
|||
Consolidated Balance Sheet Highlights |
|||
(Unaudited) |
|||
|
|||
LIABILITIES AND EQUITY |
|||
|
|
|
|
|
|
|
|
(Dollars in millions, except per share amounts) |
|
|
|
Current liabilities |
|
|
|
Current portion of long-term debt |
$ 29 |
|
$ 26 |
Accounts payable |
327 |
|
360 |
Customer deposits and deferred revenues |
282 |
|
277 |
Accrued interest |
17 |
|
12 |
Accrued taxes |
43 |
|
43 |
Accrued compensation |
94 |
|
149 |
Short-term operating lease liabilities |
145 |
|
147 |
Other current liabilities |
149 |
|
170 |
Total current liabilities |
1,086 |
|
1,184 |
|
|
|
|
Liabilities held for sale |
34 |
|
— |
|
|
|
|
Deferred liabilities and credits |
|
|
|
Deferred income tax liability, net |
992 |
|
975 |
Long-term operating lease liabilities |
873 |
|
890 |
Other deferred liabilities and credits |
786 |
|
784 |
|
|
|
|
Long-term debt, net |
4,103 |
|
4,080 |
|
|
|
|
Noncontrolling interests with redemption features |
16 |
|
12 |
|
|
|
|
Equity |
|
|
|
TDS shareholders' equity |
|
|
|
Series A Common and Common Shares, par value |
1 |
|
1 |
Capital in excess of par value |
2,542 |
|
2,558 |
Preferred Shares, par value |
1,074 |
|
1,074 |
|
(437) |
|
(465) |
Accumulated other comprehensive income |
11 |
|
11 |
Retained earnings |
1,957 |
|
2,023 |
Total TDS shareholders' equity |
5,148 |
|
5,202 |
|
|
|
|
Noncontrolling interests |
834 |
|
794 |
|
|
|
|
Total equity |
5,982 |
|
5,996 |
|
|
|
|
Total liabilities and equity |
$ 13,872 |
|
$ 13,921 |
Balance Sheet Highlights |
|||||||||
(Unaudited) |
|||||||||
|
|
||||||||
|
|
||||||||
|
|
|
TDS |
|
TDS |
|
Intercompany |
|
TDS |
|
UScellular |
|
Telecom |
|
& Other |
|
Eliminations |
|
Consolidated |
(Dollars in millions) |
|
|
|
|
|
|
|
|
|
Cash and cash equivalents |
$ 195 |
|
$ 58 |
|
$ 125 |
|
$ (56) |
|
$ 322 |
|
|
|
|
|
|
|
|
|
|
Licenses and other intangible assets |
$ 4,715 |
|
$ 177 |
|
$ 5 |
|
$ — |
|
$ 4,897 |
Investment in unconsolidated entities |
461 |
|
4 |
|
49 |
|
(7) |
|
507 |
|
$ 5,176 |
|
$ 181 |
|
$ 54 |
|
$ (7) |
|
$ 5,404 |
|
|
|
|
|
|
|
|
|
|
Property, plant and equipment, net |
$ 2,540 |
|
$ 2,429 |
|
$ 19 |
|
$ — |
|
$ 4,988 |
|
|
|
|
|
|
|
|
|
|
Long-term debt, net: |
|
|
|
|
|
|
|
|
|
Current portion |
$ 20 |
|
$ — |
|
$ 9 |
|
$ — |
|
$ 29 |
Non-current portion |
2,887 |
|
3 |
|
1,213 |
|
— |
|
4,103 |
|
$ 2,907 |
|
$ 3 |
|
$ 1,222 |
|
$ — |
|
$ 4,132 |
Segment Results (Unaudited) |
|||||||||||
|
|||||||||||
|
Three Months Ended
|
|
Six Months Ended
|
||||||||
UScellular |
2024 |
|
2023 |
|
2024 |
|
2024 |
|
2023 |
|
2024 vs. 2023 |
(Dollars in millions) |
|
|
|
|
|
|
|
|
|
|
|
Operating Revenues |
|
|
|
|
|
|
|
|
|
|
|
Wireless |
$ 902 |
|
$ 932 |
|
(3) % |
|
$ 1,826 |
|
$ 1,892 |
|
(3) % |
Towers |
58 |
|
57 |
|
3 % |
|
116 |
|
113 |
|
3 % |
Intra-company eliminations |
(33) |
|
(32) |
|
(4) % |
|
(65) |
|
(63) |
|
(3) % |
Total operating revenues |
927 |
|
957 |
|
(3) % |
|
1,877 |
|
1,942 |
|
(3) % |
|
|
|
|
|
|
|
|
|
|
|
|
Operating expenses |
|
|
|
|
|
|
|
|
|
|
|
Wireless |
885 |
|
916 |
|
(3) % |
|
1,779 |
|
1,868 |
|
(5) % |
Towers |
39 |
|
39 |
|
1 % |
|
75 |
|
76 |
|
(1) % |
Intra-company eliminations |
(33) |
|
(32) |
|
(4) % |
|
(65) |
|
(63) |
|
(3) % |
Total operating expenses |
891 |
|
923 |
|
(3) % |
|
1,789 |
|
1,881 |
|
(5) % |
|
|
|
|
|
|
|
|
|
|
|
|
Operating income |
$ 36 |
|
$ 34 |
|
6 % |
|
$ 88 |
|
$ 61 |
|
44 % |
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted OIBDA (Non-GAAP) |
$ 227 |
|
$ 198 |
|
14 % |
|
$ 456 |
|
$ 404 |
|
13 % |
Adjusted EBITDA (Non-GAAP) |
$ 268 |
|
$ 239 |
|
13 % |
|
$ 542 |
|
$ 491 |
|
10 % |
Capital expenditures |
$ 165 |
|
$ 143 |
|
15 % |
|
$ 295 |
|
$ 351 |
|
(16) % |
|
Three Months Ended
|
|
Six Months Ended
|
||||||||
|
2024 |
|
2023 |
|
2024 |
|
2024 |
|
2023 |
|
2024 vs. 2023 |
(Dollars in millions) |
|
|
|
|
|
|
|
|
|
|
|
Retail service |
$ 666 |
|
$ 686 |
|
(3) % |
|
$ 1,344 |
|
$ 1,378 |
|
(2) % |
Other |
52 |
|
49 |
|
7 % |
|
102 |
|
99 |
|
3 % |
Service revenues |
718 |
|
735 |
|
(2) % |
|
1,446 |
|
1,477 |
|
(2) % |
Equipment sales |
184 |
|
197 |
|
(6) % |
|
380 |
|
415 |
|
(9) % |
Total operating revenues |
902 |
|
932 |
|
(3) % |
|
1,826 |
|
1,892 |
|
(3) % |
|
|
|
|
|
|
|
|
|
|
|
|
System operations (excluding Depreciation, amortization and accretion reported below) |
194 |
|
203 |
|
(4) % |
|
390 |
|
398 |
|
(2) % |
Cost of equipment sold |
211 |
|
228 |
|
(7) % |
|
427 |
|
480 |
|
(11) % |
Selling, general and administrative |
313 |
|
333 |
|
(6) % |
|
637 |
|
670 |
|
(5) % |
Depreciation, amortization and accretion |
154 |
|
149 |
|
3 % |
|
308 |
|
307 |
|
— |
(Gain) loss on asset disposals, net |
5 |
|
3 |
|
40 % |
|
10 |
|
13 |
|
(23) % |
(Gain) loss on license sales and exchanges, net |
8 |
|
— |
|
N/M |
|
7 |
|
— |
|
N/M |
Total operating expenses |
885 |
|
916 |
|
(3) % |
|
1,779 |
|
1,868 |
|
(5) % |
|
|
|
|
|
|
|
|
|
|
|
|
Operating income |
$ 17 |
|
$ 16 |
|
5 % |
|
$ 47 |
|
$ 24 |
|
97 % |
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted OIBDA (Non-GAAP) |
$ 196 |
|
$ 168 |
|
16 % |
|
$ 392 |
|
$ 344 |
|
14 % |
Adjusted EBITDA (Non-GAAP) |
$ 196 |
|
$ 168 |
|
16 % |
|
$ 392 |
|
$ 344 |
|
14 % |
Capital expenditures |
$ 160 |
|
$ 140 |
|
13 % |
|
$ 286 |
|
$ 346 |
|
(17) % |
N/M - Percentage change not meaningful |
Segment Results (Unaudited) |
|||||||||||
|
|||||||||||
|
Three Months Ended
|
|
Six Months Ended
|
||||||||
|
2024 |
|
2023 |
|
2024 |
|
2024 |
|
2023 |
|
2024 vs. 2023 |
(Dollars in millions) |
|
|
|
|
|
|
|
|
|
|
|
Third-party revenues |
$ 25 |
|
$ 25 |
|
1 % |
|
$ 51 |
|
$ 50 |
|
2 % |
Intra-company revenues |
33 |
|
32 |
|
4 % |
|
65 |
|
63 |
|
3 % |
Total tower revenues |
58 |
|
57 |
|
3 % |
|
116 |
|
113 |
|
3 % |
|
|
|
|
|
|
|
|
|
|
|
|
System operations (excluding Depreciation, amortization and accretion reported below) |
19 |
|
19 |
|
(1) % |
|
37 |
|
37 |
|
1 % |
Selling, general and administrative |
9 |
|
8 |
|
8 % |
|
16 |
|
16 |
|
(3) % |
Depreciation, amortization and accretion |
11 |
|
12 |
|
(5) % |
|
21 |
|
23 |
|
(5) % |
(Gain) loss on asset disposals, net |
— |
|
— |
|
N/M |
|
1 |
|
— |
|
N/M |
Total operating expenses |
39 |
|
39 |
|
1 % |
|
75 |
|
76 |
|
(1) % |
|
|
|
|
|
|
|
|
|
|
|
|
Operating income |
$ 19 |
|
$ 18 |
|
7 % |
|
$ 41 |
|
$ 37 |
|
10 % |
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted OIBDA (Non-GAAP) |
$ 31 |
|
$ 30 |
|
6 % |
|
$ 64 |
|
$ 60 |
|
7 % |
Adjusted EBITDA (Non-GAAP) |
$ 31 |
|
$ 30 |
|
6 % |
|
$ 64 |
|
$ 60 |
|
7 % |
Capital expenditures |
$ 5 |
|
$ 3 |
|
N/M |
|
$ 9 |
|
$ 5 |
|
89 % |
N/M - Percentage change not meaningful |
TDS Telecom Highlights |
|||||||||||
(Unaudited) |
|||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
|
|
Six Months Ended
|
||||||||
|
2024 |
|
2023 |
|
2024 vs. 2023 |
|
2024 |
|
2023 |
|
2024 vs. 2023 |
(Dollars in millions) |
|
|
|
|
|
|
|
|
|
|
|
Operating revenues |
|
|
|
|
|
|
|
|
|
|
|
Residential |
|
|
|
|
|
|
|
|
|
|
|
Incumbent |
$ 90 |
|
$ 89 |
|
1 % |
|
$ 180 |
|
$ 175 |
|
3 % |
Expansion |
28 |
|
18 |
|
60 % |
|
54 |
|
33 |
|
65 % |
Cable |
69 |
|
68 |
|
1 % |
|
138 |
|
136 |
|
2 % |
Total residential |
186 |
|
175 |
|
7 % |
|
372 |
|
344 |
|
8 % |
Commercial |
37 |
|
39 |
|
(6) % |
|
74 |
|
80 |
|
(8) % |
Wholesale |
44 |
|
43 |
|
2 % |
|
88 |
|
86 |
|
2 % |
Total service revenues |
267 |
|
257 |
|
4 % |
|
534 |
|
510 |
|
5 % |
Equipment revenues |
— |
|
— |
|
19 % |
|
— |
|
— |
|
(12) % |
Total operating revenues |
267 |
|
257 |
|
4 % |
|
534 |
|
510 |
|
5 % |
|
|
|
|
|
|
|
|
|
|
|
|
Cost of services |
98 |
|
108 |
|
(9) % |
|
196 |
|
212 |
|
(8) % |
Cost of equipment and products |
— |
|
— |
|
(28) % |
|
— |
|
— |
|
(7) % |
Selling, general and administrative expenses |
80 |
|
81 |
|
(2) % |
|
155 |
|
162 |
|
(4) % |
Depreciation, amortization and accretion |
67 |
|
60 |
|
11 % |
|
131 |
|
119 |
|
10 % |
(Gain) loss on asset disposals, net |
4 |
|
2 |
|
N/M |
|
6 |
|
3 |
|
N/M |
Total operating expenses |
248 |
|
251 |
|
(1) % |
|
488 |
|
496 |
|
(1) % |
|
|
|
|
|
|
|
|
|
|
|
|
Operating income |
$ 19 |
|
$ 7 |
|
N/M |
|
$ 46 |
|
$ 15 |
|
N/M |
N/M - Percentage change not meaningful |
Numbers may not foot due to rounding. |
Free Cash Flow (Unaudited) |
|||||||
|
|||||||
|
Three Months Ended
|
|
Six Months Ended
|
||||
TDS - CONSOLIDATED |
2024 |
|
2023 |
|
2024 |
|
2023 |
(Dollars in millions) |
|
|
|
|
|
|
|
Cash flows from operating activities (GAAP) |
$ 403 |
|
$ 469 |
|
$ 626 |
|
$ 514 |
Cash paid for additions to property, plant and equipment |
(216) |
|
(298) |
|
(451) |
|
(629) |
Cash paid for software license agreements |
(11) |
|
(12) |
|
(21) |
|
(20) |
Free cash flow (Non-GAAP)1 |
$ 176 |
|
$ 159 |
|
$ 154 |
|
$ (135) |
|
|||||||
|
Three Months Ended
|
|
Six Months Ended
|
||||
UScellular |
2024 |
|
2023 |
|
2024 |
|
2023 |
(Dollars in millions) |
|
|
|
|
|
|
|
Cash flows from operating activities (GAAP) |
$ 313 |
|
$ 349 |
|
$ 516 |
|
$ 390 |
Cash paid for additions to property, plant and equipment |
(137) |
|
(155) |
|
(270) |
|
(351) |
Cash paid for software license agreements |
(11) |
|
(12) |
|
(20) |
|
(19) |
Free cash flow (Non-GAAP)1 |
$ 165 |
|
$ 182 |
|
$ 226 |
|
$ 20 |
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 (Unaudited) |
|||
|
|||
The following tables reconcile EBITDA, Adjusted EBITDA and Adjusted OIBDA to the corresponding GAAP measures, Net income, |
|||
|
|||
|
Three Months Ended
|
||
TDS - CONSOLIDATED |
2024 |
|
2023 |
(Dollars in millions) |
|
|
|
Net income (GAAP) |
$ 7 |
|
$ — |
Add back: |
|
|
|
Income tax expense |
6 |
|
15 |
Income before income taxes (GAAP) |
13 |
|
15 |
Add back: |
|
|
|
Interest expense |
73 |
|
62 |
Depreciation, amortization and accretion |
233 |
|
225 |
EBITDA (Non-GAAP) |
319 |
|
302 |
Add back or deduct: |
|
|
|
Expenses related to strategic alternatives review |
21 |
|
— |
(Gain) loss on asset disposals, net |
9 |
|
5 |
(Gain) loss on license sales and exchanges, net |
8 |
|
— |
Adjusted EBITDA (Non-GAAP) |
357 |
|
307 |
Deduct: |
|
|
|
Equity in earnings of unconsolidated entities |
39 |
|
38 |
Interest and dividend income |
7 |
|
6 |
Other, net |
1 |
|
— |
Adjusted OIBDA (Non-GAAP) |
$ 310 |
|
$ 263 |
EBITDA, Adjusted EBITDA and Adjusted OIBDA |
|||
|
|||
|
Three Months Ended
|
||
UScellular |
2024 |
|
2023 |
(Dollars in millions) |
|
|
|
Net income (GAAP) |
$ 18 |
|
$ 5 |
Add back: |
|
|
|
Income tax expense |
14 |
|
19 |
Income before income taxes (GAAP) |
32 |
|
24 |
Add back: |
|
|
|
Interest expense |
45 |
|
51 |
Depreciation, amortization and accretion |
165 |
|
161 |
EBITDA (Non-GAAP) |
242 |
|
236 |
Add back or deduct: |
|
|
|
Expenses related to strategic alternatives review |
13 |
|
— |
(Gain) loss on asset disposals, net |
5 |
|
3 |
(Gain) loss on license sales and exchanges, net |
8 |
|
— |
Adjusted EBITDA (Non-GAAP) |
268 |
|
239 |
Deduct: |
|
|
|
Equity in earnings of unconsolidated entities |
38 |
|
38 |
Interest and dividend income |
3 |
|
3 |
Adjusted OIBDA (Non-GAAP) |
$ 227 |
|
$ 198 |
|
Three Months Ended
|
||
|
2024 |
|
2023 |
(Dollars in millions) |
|
|
|
EBITDA (Non-GAAP) |
$ 171 |
|
$ 165 |
Add back or deduct: |
|
|
|
Expenses related to strategic alternatives review |
12 |
|
— |
(Gain) loss on asset disposals, net |
5 |
|
3 |
(Gain) loss on license sales and exchanges, net |
8 |
|
— |
Adjusted EBITDA and Adjusted OIBDA (Non-GAAP) |
196 |
|
168 |
Deduct: |
|
|
|
Depreciation, amortization and accretion |
154 |
|
149 |
Expenses related to strategic alternatives review |
12 |
|
— |
(Gain) loss on asset disposals, net |
5 |
|
3 |
(Gain) loss on license sales and exchanges, net |
8 |
|
— |
Operating income (GAAP) |
$ 17 |
|
$ 16 |
|
Three Months Ended
|
||
|
2024 |
|
2023 |
(Dollars in millions) |
|
|
|
EBITDA (Non-GAAP) |
$ 30 |
|
$ 30 |
Add back or deduct: |
|
|
|
Expenses related to strategic alternatives review |
1 |
|
— |
Adjusted EBITDA and Adjusted OIBDA (Non-GAAP) |
31 |
|
30 |
Deduct: |
|
|
|
Depreciation, amortization and accretion |
11 |
|
12 |
Expenses related to strategic alternatives review |
1 |
|
— |
Operating income (GAAP) |
$ 19 |
|
$ 18 |
EBITDA, Adjusted EBITDA and Adjusted OIBDA |
|||
|
|||
|
Three Months Ended
|
||
|
2024 |
|
2023 |
(Dollars in millions) |
|
|
|
Net income (GAAP) |
$ 18 |
|
$ 7 |
Add back: |
|
|
|
Income tax expense |
3 |
|
3 |
Income before income taxes (GAAP) |
21 |
|
10 |
Add back: |
|
|
|
Interest expense |
— |
|
(2) |
Depreciation, amortization and accretion |
67 |
|
60 |
EBITDA (Non-GAAP) |
88 |
|
68 |
Add back or deduct: |
|
|
|
(Gain) loss on asset disposals, net |
4 |
|
2 |
Adjusted EBITDA (Non-GAAP) |
91 |
|
70 |
Deduct: |
|
|
|
Interest and dividend income |
1 |
|
1 |
Other, net |
1 |
|
— |
Adjusted OIBDA (Non-GAAP) |
$ 89 |
|
$ 68 |
Numbers may not foot due to rounding. |
View original content:https://www.prnewswire.com/news-releases/tds-reports-second-quarter-2024-results-302213208.html
SOURCE