TDS reports third quarter 2019 results
CHICAGO, Oct. 31, 2019 /PRNewswire/ --
As previously announced, TDS will hold a teleconference November 1, 2019, 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 $1,321 million for the third quarter of 2019, versus $1,297 million for the same period one year ago. Net income attributable to TDS shareholders and related diluted earnings per share were $18 million and $0.15, respectively, for the third quarter of 2019 compared to $46 million and $0.41, respectively, in the same period one year ago.
"Our results for the third quarter reflect the investments we are making throughout the TDS Family of Companies," said LeRoy T. Carlson, Jr., TDS President and CEO. "U.S. Cellular is continuing to make improvements to its high-performing network and TDS Telecom is making progress deploying fiber in its new out-of-territory fiber markets.
"At U.S. Cellular subscriber activity built momentum throughout the quarter. Higher inbound roaming revenue and increased postpaid average revenue per user (ARPU) drove revenue growth. U.S. Cellular is progressing with network modernization. U.S. Cellular is readying its network for 5G and many customers with 4G devices are experiencing better network quality and improved speeds. U.S. Cellular is on track to launch 5G service in Iowa and Wisconsin during the first quarter of 2020.
"At TDS Telecom, customer demand for faster broadband speeds and for video connections generated higher residential revenue per connection. The Wireline segment saw growth in revenues from fiber investments which helped offset declines in legacy voice revenue. Wireline continued to expand fiber even deeper into its ILEC markets while also expanding its fiber footprint to attractive out-of-territory markets. Cable operations produced another strong quarter, generating 8% growth in revenues through increased broadband connections, which contributed to a 14% year-over-year increase in Adjusted EBITDA."
2019 Estimated Results
TDS' current estimates of full-year 2019 results for U.S. Cellular, TDS Telecom, and TDS are shown below. Such estimates represent management's view as of October 31, 2019 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.
2019 Estimated Results
U.S. Cellular TDS Telecom
TDS(1)
Previous
Current
Previous
Current
Previous
Current
(Dollars in
millions)
Total operating
revenues
$3,900-$4,100
$3,950-$4,050
$900-$950
Unchanged
$5,025-$5,275
$5,075-$5,225
Adjusted OIBDA(2)
$725-$875
$750-$850
$280-$310
Unchanged
$1,000-$1,180
$1,025-$1,155
Adjusted
EBITDA(2)
$900-$1,050
$925-$1,025
$290-$320
Unchanged
$1,185-$1,365
$1,210-$1,340
Capital
expenditures
$625-$725
Unchanged
$300-$350
Unchanged
$940-$1,090
Unchanged
The following tables provide reconciliations of Net income to Adjusted OIBDA and Adjusted EBITDA for 2019 estimated results, actual results for the nine months ended September 30, 2019, and actual results for the year ended December 31, 2018. In providing 2019 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.
2019 Estimated Results
U.S. Cellular
TDS Telecom
TDS(1)
(Dollars in millions)
Net income (GAAP) N/A N/A N/A
Add back:
Income tax expense (benefit) N/A N/A N/A
Income before income taxes (GAAP)
$80-$180
$85-$115
$70-$200
Add back:
Interest expense
115x 175
Depreciation, amortization and accretion expense 710 205 945
EBITDA (Non-GAAP)(2)
$905-$1,005
$290-$320
$1,190-$1,320
Add back or deduct:
(Gain) loss on asset disposals, net 20 20
Adjusted EBITDA (Non-GAAP)(2)
$925-$1,025
$290-$320
$1,210-$1,340
Deduct:
Equity in earnings of unconsolidated entities 160 160
Interest and dividend income 15 10 25
Adjusted OIBDA (Non-GAAP)(2)
$750-$850
$280-$310
$1,025-$1,155
Actual Results
Nine Months Ended
Year Ended
September 30, 2019 December 31, 2018
U.S. TDS TDS(1) U.S. TDS TDS(1)
Cellular Telecom Cellular Telecom
(Dollars in millions)
Net income (GAAP) $
115 $
74 $
132 $
164 $
89 $
175
Add back or deduct:
Income tax expense 55 23 64 51 16 46
Income before income taxes
(GAAP) $
170 $
97 $
196 $
215 $
105 $
221
Add back:
Interest expense 87 (2) 128 116 (2) 172
Depreciation, amortization
and accretion expense 524 150 697 640 212 883
EBITDA (Non-GAAP)(2) $
781 $
245 $
1,021 $
971 $
315 $
1,276
Add back or deduct:
(Gain) loss on asset
disposals, net 13 (7) 5 10 (2) 9
(Gain) loss on sale of
business and other exit
costs, net (1) (1)
(Gain) loss on license
sales and exchanges, net (18) (18)
Adjusted EBITDA (Non-
GAAP)(2) $
793 $
238 $
1,025 $
963 $
313 $
1,267
Deduct:
Equity in earnings of
unconsolidated entities 128 129 159 160
Interest and dividend
income 14 9 24 15 8 26
Other, net (1) 2 2
Adjusted OIBDA (Non-
GAAP)(2) $
651 $
228 $
872 $
790 $
303 $
1,079
Numbers may not foot due to rounding.
(1) The TDS column includes U.S. Cellular, TDS
Telecom and also the impacts of consolidating
eliminations, corporate operations and non-
reportable segments.
(2) 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 non-
recurring, 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, 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,
and gains and losses, 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 September 30, 2019, can be found on
TDS' website at investors.tdsinc.com.
Conference Call Information
TDS will hold a conference call on November 1, 2019 at 9:00 a.m. Central Time.
-- Access the live call on the Events & Presentations page of
investors.tdsinc.com or at
https://www.webcaster4.com/Webcast/Page/1145/32152.
-- Access the call by phone at 877-273-7192 (US/Canada), conference ID:
4119859.
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; cable and wireline broadband, video and voice; and hosted and managed services to approximately 6 million connections nationwide through its businesses, U.S. Cellular, TDS Telecom, BendBroadband and OneNeck IT Solutions. Founded in 1969 and headquartered in Chicago, TDS employed 9,400 people as of September 30, 2019.
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: intense competition; the ability to execute TDS' business strategy; uncertainties in TDS' future cash flows and liquidity and access to the capital markets; the ability to make payments on TDS and U.S. Cellular indebtedness or comply with the terms of debt covenants; impacts of any pending acquisitions/divestitures/exchanges of properties and/or licenses, including, but not limited to, the ability to obtain regulatory approvals, successfully complete the transactions and the financial impacts of such transactions; the ability of the company to successfully manage and grow its markets; the access to and pricing of unbundled network elements; the ability to obtain or maintain roaming arrangements with other carriers on acceptable terms; the state and federal telecommunications regulatory environment; the value of assets and investments; adverse changes in the ratings of TDS and U.S. Cellular debt securities by accredited ratings organizations; industry consolidation; advances in telecommunications technology; pending and future litigation; changes in income tax rates, laws, regulations or rulings; changes in customer growth rates, average monthly revenue per user, churn rates, roaming revenue and terms, the availability of wireless devices, or the mix of services and products offered by U.S. Cellular and TDS Telecom. Investors are encouraged to consider these and other risks and uncertainties that are discussed in the Form 8-K Current Report used by TDS to furnish this press release to the Securities and Exchange Commission, which are incorporated by reference herein.
For more information about TDS and its subsidiaries, visit:
TDS: www.tdsinc.com
U.S. Cellular: 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 9/30/2019 6/30/2019 3/31/2019 12/31/2018 9/30/2018
--- ---
Retail Connections
Postpaid
Total at end of period 4,395,000 4,414,000 4,440,000 4,472,000 4,466,000
Gross additions 163,000 137,000 137,000 179,000 172,000
Feature phones 3,000 5,000 4,000 4,000 3,000
Smartphones 121,000 97,000 98,000 132,000 130,000
Connected devices 39,000 35,000 35,000 43,000 39,000
Net additions (losses) (19,000) (26,000) (32,000) 6,000 (1,000)
Feature phones (11,000) (10,000) (13,000) (11,000) (14,000)
Smartphones 9,000 (1,000) (1,000) 31,000 29,000
Connected devices (17,000) (15,000) (18,000) (14,000) (16,000)
ARPU(1) $
46.16 $
45.90 $
45.44 $
45.58 $
45.31
ARPA(2) $
119.87 $
119.46 $
118.84 $
119.60 $
119.42
Churn rate(3) 1.38 1.23 1.26 1.29 1.29
% % % % %
Handsets 1.09 0.97 0.99 1.00 1.02
% % % % %
Connected devices 3.44 3.01 3.08 3.20 3.04
% % % % %
Prepaid
Total at end of period 510,000 500,000 503,000 516,000 528,000
Gross additions 70,000 61,000 61,000 66,000 80,000
Net additions (losses) 9,000 (2,000) (13,000) (12,000) 1,000
ARPU(1) $
34.35 $
34.43 $
33.44 $
32.80 $
32.09
Churn rate(3) 4.03 4.20 4.92 4.98 4.98
% % % % %
Total connections at end of period4 4,957,000 4,967,000 4,995,000 5,041,000 5,050,000
Market penetration at end of period
Consolidated operating population 31,310,000 31,310,000 31,310,000 31,469,000 31,469,000
Consolidated operating penetration5 16
% 16
% 16
% 16
% 16
%
Capital expenditures (millions) $
170 $
195 $
102 $
242 $
118
Total cell sites in service 6,554 6,535 6,506 6,531 6,506
Owned towers 4,123 4,116 4,106 4,129 4,119
(1) 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.
(2) 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.
(3) 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.
4 Includes
reseller and
other
connections.
5 Market
penetration is
calculated by
dividing the
number of
wireless
connections at
the end of the
period by the
total
population of
consolidated
operating
markets as
estimated by
Nielsen.
TDS Telecom
Summary Operating Data (Unaudited)
As of or for the Quarter Ended 9/30/2019 6/30/2019 3/31/2019 12/31/2018 9/30/2018
--- ---
TDS Telecom
Wireline
---
Residential connections
Voice(1) 266,100 269,000 271,100 274,100 278,400
Broadband(2) 242,200 240,200 236,100 235,400 237,100
Video(3) 57,300 56,200 54,300 54,000 53,100
Wireline residential connections 565,600 565,500 561,500 563,500 568,600
Total residential revenue per
connection4 $
49.02 $
47.88 $
48.16 $
47.39 $
47.30
Commercial connections
Voice(1) 121,200 124,200 127,300 130,500 134,000
Broadband(2) 20,600 20,600 20,400 20,600 20,700
managedIP5 124,500 128,300 132,000 134,000 138,000
Video(3) 400 400 400 400 400
Wireline commercial connections 266,600 273,500 280,100 285,400 293,100
Total Wireline connections 832,300 839,000 841,500 848,900 861,700
Cable
---
Cable residential and commercial connections
Broadband6 174,900 172,600 171,100 167,400 163,600
Video7 98,000 100,300 101,400 102,900 102,100
Voice8 63,900 64,800 65,400 65,200 63,600
managedIP5 1,200 1,100 1,100 1,000 700
Total Cable connections 338,000 338,900 339,000 336,500 330,100
Numbers may not foot due to rounding.
(1) The individual circuits connecting a
customer to Wireline's central office
facilities that provide voice
services.
(2) The number of Wireline customers
provided high-capacity data circuits
via various technologies, including
DSL and dedicated internet circuit
technologies.
(3) The number of Wireline customers
provided video services.
4 Total residential revenue per
connection is calculated by dividing
total Wireline residential revenue by
the average number of Wireline
residential connections and by the
number of months in the period.
5 The number of telephone handsets, data
lines and IP trunks providing
communications using IP networking
technology.
6 Billable number of lines into a
building for high-speed data
services.
7 Generally, a home or business receiving
video programming counts as one video
connection. In counting bulk
residential or commercial connections,
such as an apartment building or
hotel, connections are counted based
on the number of units/rooms within
the building receiving service.
8 Billable number of lines into a
building for voice services.
TDS Telecom
Capital Expenditures (Unaudited)
Quarter Ended 9/30/2019 6/30/2019 3/31/2019 12/31/2018 9/30/2018
--- ---
(Dollars in millions)
Wireline $
61 $
55 $
29 $
73 $
41
Cable 20 15 13 19 13
Total TDS Telecom $
81 $
70 $
42 $
91 $
54
Numbers may not foot due
to rounding.
Telephone and Data Systems, Inc.
Consolidated Statement of Operations Highlights
(Unaudited)
Three Months Ended
Nine Months Ended
September 30, September 30,
2019 2018 2019 2019 2018 2019
vs. 2018 vs. 2018
---
(Dollars and shares in millions, except per
share amounts)
Operating revenues
U.S. Cellular $
1,031 $
1,001 3 $
2,970 $
2,916 2
% %
TDS Telecom 231 234 (1)
% 695 695 -
All Other(1) 59 62 (4)
%
% 175 166 5
1,321 1,297 2 3,840 3,777 2
% %
Operating expenses
U.S. Cellular
Expenses excluding depreciation, 823 804 2 2,319 2,296 1
amortization and accretion % %
Depreciation, amortization and 181 160 13 524 478 10
accretion % %
(Gain) loss on asset disposals, 5 3 66
net % 13 5 N/M
(Gain) loss on sale of business
and other exit costs, net - N/M (1) N/M
(Gain) loss on license sales and 2 N/M (18) 98
exchanges, net %
1,011 967 5 2,855 2,761 3
% %
TDS Telecom
Expenses excluding depreciation, 162 157 3
amortization and accretion % 467 466 -
Depreciation, amortization and 50 53 (6) 150 160 (6)
accretion
% %
(Gain) loss on asset disposals,
net - (3) N/M (7) (2) N/M
212 206 3 609 624 (2)
%
%
All Other(1)
Expenses excluding depreciation 62 65 (3)
and amortization %
% 182 176 3
Depreciation and amortization 6 7 (5) 23 24 (5)
% %
(Gain) loss on asset disposals,
net 1 N/M (1) N/M
69 73 (3)
%
% 205 200 2
Total operating expenses 1,292 1,246 4 3,669 3,585 2
% %
Operating income (loss)
U.S. Cellular 20 34 (40) 115 155 (26)
% %
TDS Telecom 20 28 (29)
%
% 86 71 21
All Other(1) (11) (11) (5)
%
% (30) (34) 13
29 51 (43) 171 192 (11)
% %
Investment and other income (expense)
Equity in earnings of 44 42 5 129 121 7
unconsolidated entities % %
Interest and dividend income 7 6 15 24 18 39
% %
Interest expense (42) (43) 1 (128) (129) 1
% %
Other, net - 2 N/M 1 N/M
Total investment and other 9 7 34
income % 25 11 N/M
Income before income taxes 38 58 (35) 196 203 (3)
% %
Income tax expense 15 5 N/M 64 48 32
%
Net income 23 53 (57) 132 155 (15)
% %
Less: Net income attributable to 5 7 (27) 22 36 (39)
noncontrolling interests, net
of tax % %
Net income attributable to TDS $
18 $
46 (62) $
110 $
119 (7)
shareholders
% %
Basic weighted average shares 115 112 2 114 112 2
outstanding % %
Basic earnings per share $
0.15 $
0.41 (63) $
0.96 $
1.06 (9)
attributable to TDS
shareholders % %
Diluted weighted average shares 116 114 2 116 113 2
outstanding % %
Diluted earnings per share $
0.15 $
0.41 (63) $
0.93 $
1.04 (10)
attributable to TDS
shareholders % %
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 U.S. Cellular and
TDS Telecom segments.
Telephone and Data Systems, Inc.
Consolidated Statement of Cash Flows
(Unaudited)
Nine Months Ended
September 30,
2019 2018
---
(Dollars in millions)
Cash flows from operating activities
Net income $
132 $
155
Add (deduct) adjustments to reconcile net income
to net cash flows from operating activities
Depreciation, amortization and
accretion 697 662
Bad debts expense 80 71
Stock-based compensation expense 47 37
Deferred income taxes, net 23 31
Equity in earnings of
unconsolidated entities (129) (121)
Distributions from unconsolidated
entities 100 91
(Gain) loss on asset disposals,
net 5 3
(Gain) loss on sale of business
and other exit costs, net (1)
(Gain) loss on license sales and
exchanges, net - (18)
Other operating activities 4 3
Changes in assets and liabilities from
operations
Accounts receivable (42) (5)
Equipment installment plans
receivable (42) (88)
Inventory 3 13
Accounts payable (4) 13
Customer deposits and deferred
revenues (2) (7)
Accrued taxes 37 (3)
Accrued interest 9 11
Other assets and liabilities (43) (36)
Net cash provided by operating
activities 874 812
Cash flows from investing activities
Cash paid for additions to
property, plant and equipment (631) (447)
Cash paid for acquisitions and
licenses (257) (10)
Cash received from investments 29 100
Cash paid for investments (11)
Cash received from divestitures
and exchanges 32 28
Other investing activities 1 4
Net cash used in investing
activities (837) (325)
Cash flows from financing activities
Repayment of long-term debt (16) (15)
TDS Common Shares reissued for
benefit plans, net of tax
payments (6) 27
U.S. Cellular Common Shares
reissued for benefit plans, net
of tax payments (8) 7
Repurchase of U.S. Cellular Common
Shares (21)
Dividends paid to TDS shareholders (57) (54)
Distributions to noncontrolling
interests (3) (5)
Other financing activities 8 (2)
Net cash used in financing
activities (103) (42)
Net increase (decrease) in cash,
cash equivalents and restricted
cash (66) 445
Cash, cash equivalents and restricted cash
Beginning of period 927 622
End of period $
861 $
1,067
Telephone and Data Systems, Inc.
Consolidated Balance Sheet Highlights
(Unaudited)
ASSETS
September 30, 2019
(1) December 31, 2018
---
(Dollars in millions)
Current assets
Cash and cash equivalents $
853 $
921
Short-term investments - 17
Accounts receivable 1,116 1,099
Inventory, net 147 150
Prepaid expenses 98 103
Income taxes receivable 3 12
Other current assets 28 28
Total current assets 2,245 2,330
Assets held for sale 9 54
Licenses 2,470 2,195
Goodwill 509 509
Other intangible assets, net 235 253
Investments in unconsolidated entities 511 480
Property, plant and equipment, net 3,353 3,346
Operating lease right-of-use assets 970
Other assets and deferred charges 579 616
Total assets $
10,881 $
9,783
Telephone and Data Systems, Inc.
Consolidated Balance Sheet Highlights
(Unaudited)
LIABILITIES AND EQUITY
September 30, 2019
(1) December 31, 2018
---
(Dollars in millions, except per share amounts)
Current liabilities
Current portion of long-term debt $
21 $
21
Accounts payable 386 365
Customer deposits and deferred
revenues 195 197
Accrued interest 20 11
Accrued taxes 63 44
Accrued compensation 111 127
Short-term operating lease
liabilities 115
Other current liabilities 90 114
Total current liabilities 1,001 879
Liabilities held for sale 1 1
Deferred liabilities and credits
Deferred income tax liability, net 664 640
Long-term operating lease
liabilities 931
Other deferred liabilities and
credits 475 541
Long-term debt, net 2,405 2,418
Noncontrolling interests with
redemption features 11 11
Equity
TDS shareholders' equity
Series A Common and Common Shares,
par value $.01 per share 1 1
Capital in excess of par value 2,456 2,432
Treasury shares, at cost (481) (519)
Accumulated other comprehensive loss (10) (10)
Retained earnings 2,680 2,656
Total TDS shareholders' equity 4,646 4,560
Noncontrolling interests 747 733
Total equity 5,393 5,293
Total liabilities and equity $
10,881 $
9,783
(1) As of January 1, 2019, TDS
adopted the new lease
accounting standard, ASC 842,
using a modified retrospective
method. Under this method, the
new accounting standard is
applied only to the most recent
period presented. As a result,
2019 amounts include the
impacts of ASC 842, but 2018
amounts remain as previously
reported.
Balance Sheet Highlights
(Unaudited)
September 30, 2019
U.S. TDS TDS Intercompany TDS
Corporate
Cellular Telecom & Other Eliminations Consolidated
---
(Dollars in millions)
Cash and cash
equivalents $
570 $
36 $
247
$ $
853
Affiliated cash
investments - 509 (509)
$
570 $
545 $
247 $
(509) $
853
Licenses, goodwill and
other intangible
assets $
2,461 $
741 $
12
$ $
3,214
Investment in
unconsolidated
entities 471 4 46 (10) 511
$
2,932 $
745 $
58 $
(10) $
3,725
Property, plant and
equipment, net $
2,144 $
1,096 $
113
$ $
3,353
Long-term debt, net:
Current portion $
19 $
1 $
1
$ $
21
Non-current portion 1,592 3 810 2,405
$
1,611 $
4 $
811
$ $
2,426
TDS Telecom Highlights
(Unaudited)
Three Months Ended
Nine Months Ended
September 30,
September 30,
2019 2018 2019 vs. 2019 2018 2019 vs.
2018 2018
---
(Dollars in millions)
Wireline
Operating revenues
Residential $
83 $
81 3 $
245 $
241 2
% %
Commercial 41 46 (9) 127 140 (9)
% %
Wholesale 45 50 (11) 139 144 (3)
% %
Total service revenues 169 176 (4) 512 524 (2)
% %
Equipment and product (19) 1 1 (25)
sales
% %
169 177 (4) 512 526 (3)
% %
Operating expenses
Cost of services 68 68 (1) 195 200 (2)
% %
Cost of equipment and (7) 1 1 (26)
products
% %
Selling, general and 52 49 7 148 146 2
administrative expenses % %
Expenses excluding
depreciation, %
amortization and %
accretion 120 118 2 344 346 (1)
Depreciation, 33 35 (8) 99 108 (8)
amortization and
accretion % %
(Gain) loss on asset
disposals, net (4) N/M (8) (3) N/M
153 149 3 435 451 (4)
%
%
Operating income $
16 $
28 (41)
%
% $
78 $
75 4
Cable
Operating revenues
Residential $
52 $
47 9 $
152 $
140 9
% %
Commercial 10 10 1 32 30 6
% %
62 58 8 184 170 8
% %
Operating expenses
Cost of services 27 26 4 79 78 1
% %
Selling, general and 15 14 6 44 42 6
administrative expenses % %
Expenses excluding
depreciation, % %
amortization and
accretion 42 40 5 124 120 3
Depreciation, 17 17 (2) 51 52 (3)
amortization and
accretion % %
(Gain) loss on asset 1 (86) 1 1 (49)
disposals, net
% %
59 58 2 175 174 1
% %
Operating income (loss) $
3
$ N/M $
8 $
(4) N/M
Total TDS Telecom $
20 $
28 (29)
operating income %
% $
86 $
71 21
N/M -Percentage change not
meaningful.
Numbers may not foot due to
rounding.
Telephone and Data Systems, Inc.
Financial Measures and Reconciliations
Free Cash Flow
Three Months Ended Nine Months Ended
September 30, September 30,
2019 2018 2019 2018
---
(Dollars in millions)
Cash flows
from
operating
activities
(GAAP) $
282 $
349 $
874 $
812
Less: Cash
paid for
additions
to
property,
plant and
equipment 238 171 631 447
Free cash
flow (Non-
GAAP)(1) $
44 $
178 $
243 $
365
(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.
EBITDA, Adjusted EBITDA and Adjusted OIBDA
The following table reconciles EBITDA, Adjusted EBITDA and Adjusted OIBDA to the corresponding GAAP measures, Income before income taxes and Operating income.
Three Months Ended
September 30,
CABLE 2019 2018
---
(Dollars in millions)
Income before income taxes (GAAP) $
4
$
Add back:
Depreciation, amortization and accretion 17 17
EBITDA (Non-GAAP) 21 18
Add back or deduct:
(Gain) loss on asset disposals, net 1
Adjusted EBITDA (Non-GAAP) 21 18
Deduct:
Interest and dividend income
Adjusted OIBDA (Non-GAAP) 20 18
Deduct:
Depreciation, amortization and accretion 17 17
(Gain) loss on asset disposals, net 1
Operating income (GAAP) $
3
$
Numbers may not foot due
to rounding.
View original content:http://www.prnewswire.com/news-releases/tds-reports-third-quarter-2019-results-300949431.html
SOURCE Telephone and Data Systems, Inc.
