TDS reports second quarter 2024 results
CHICAGO, Aug. 2, 2024 /PRNewswire/ --
As previously announced, TDS will hold a teleconference on August 2, 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 $1,238 million for the second quarter of 2024, versus $1,267 million for the same period one year ago. Net income (loss) attributable to TDS common shareholders and related diluted earnings (loss) per share were $(14) million and $(0.13), respectively, for the second quarter of 2024 compared to $(19) million and $(0.17), respectively, in the same period one year ago.
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%
-- Fixed wireless customers grew 40% to 134,000
-- Strong cost management led to increased operating income, net income and
Adjusted OIBDA
TDS Telecom
-- 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 OneNeck IT Solutions that we anticipate will accelerate achievement of our strategic objectives. We remain focused on effectively operating all our businesses and serving our customers with high-quality communications services, while we work towards successfully closing these transactions and enhancing the performance of our ongoing businesses.
"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.
"TDS Telecom reported another quarter of notable growth in revenue and profitability as a result of its broadband investments. TDS Telecom added an additional 27,000 marketable fiber service addresses and is making good progress on its long-term goal of 1.2 million marketable fiber service addresses."
Announced Transaction and Exploration of Strategic Alternatives for UScellular
On May 28, 2024, Telephone and Data Systems, Inc. (TDS) and UScellular announced that they have entered into a definitive agreement to sell UScellular's wireless operations and select spectrum assets to T-Mobile. The transaction is expected to close in mid-2025, subject to regulatory approvals and the satisfaction of customary closing conditions.
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 TDS Telecom are shown below. Such estimates represent management's view as of August 2, 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
$1,050-$1,080
Adjusted OIBDA(1)
$310-$340
$330-$360
Adjusted EBITDA(1)
$310-$340
$330-$360
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
Results(2)
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
$60-$90
Add back:
Interest expense 185
Depreciation, amortization and accretion expense 660 270
EBITDA (Non-GAAP)(1)
$905-$1,005
$330-$360
Add back or deduct:
(Gain) loss on asset disposals, net 15
Adjusted EBITDA (Non-GAAP)(1)
$920-$1,020
$330-$360
Deduct:
Equity in earnings of unconsolidated entities 155
Interest and dividend income 15
Adjusted OIBDA (Non-GAAP)(1)
$750-$850
$330-$360
Actual Results
Six Months Ended Year Ended
June 30, 2024 December 31, 2023
UScellular TDS UScellular TDS
Telecom 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 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 June 30, 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 August 2, 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/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
Telephone and Data Systems, Inc. (TDS) 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 8,500 associates as of June 30, 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 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 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, including changes in regulatory support received and the ability to pass through certain regulatory fees to customers; 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 6/30/2024 3/31/2024 12/31/2023 9/30/2023 6/30/2023
Retail Connections
Postpaid
Total at end of period(1) 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
ARPU(2) $51.45 $51.96 $51.61 $51.11 $50.64
ARPA(3) $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 period(1) 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 $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 6/30/2024 3/31/2024 12/31/2023 9/30/2023 6/30/2023
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 Broadband(1) 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 connection(2) $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 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 Six Months Ended
June 30, June 30,
2024 2023 2024 2024 2023 2024
vs. 2023 vs. 2023
(Dollars and shares in millions, except per share amounts)
Operating revenues
UScellular $927 $957 (3) % $1,877 $1,942 (3) %
TDS Telecom 267 257 4 % 534 510 5 %
All Other(1) 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) %
TDS Telecom
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 Other(1)
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 %
TDS Telecom 19 7 N/M 46 15 N/M
All Other(1) (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) $(0.17) 25 % $(0.02) $(0.25) 91 %
Diluted weighted average shares outstanding 114 113 1 % 113 113 1 %
Diluted earnings (loss) per share attributable to TDS common shareholders $(0.13) $(0.17) 23 % $(0.03) $(0.25) 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 TDS Telecom segments.
Telephone and Data Systems, Inc.
Consolidated Statement of Cash Flows
(Unaudited)
Six Months Ended
June 30,
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
Telephone and Data Systems, Inc.
Consolidated Balance Sheet Highlights
(Unaudited)
ASSETS
June 30, 2024 December 31, 2023
(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
Telephone and Data Systems, Inc.
Consolidated Balance Sheet Highlights
(Unaudited)
LIABILITIES AND EQUITY
June 30, 2024 December 31, 2023
(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 $0.01 per share 1 1
Capital in excess of par value 2,542 2,558
Preferred Shares, par value $0.01 per share 1,074 1,074
Treasury shares, at cost (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)
June 30, 2024
TDS TDS Intercompany TDS
Corporate
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
United States Cellular Corporation
Segment Results
(Unaudited)
Three Months Ended Six Months Ended
June 30,
June 30,
UScellular 2024 2023 2024 2024 2023 2024
vs. 2023
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
June 30,
June 30,
UScellular Wireless 2024 2023 2024 2024 2023 2024
vs. 2023
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
United States Cellular Corporation
Segment Results
(Unaudited)
Three Months Ended Six Months Ended
June 30,
June 30,
UScellular Towers 2024 2023 2024 2024 2023 2024
vs. 2023
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
June 30,
June 30,
2024 2023 2024 2024 2023 2024
vs. 2023 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.
Telephone and Data Systems, Inc.
Free Cash Flow
(Unaudited)
Three Months Ended Six Months Ended
June 30, June 30,
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
June 30, June 30,
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.
Telephone and Data Systems, Inc.
EBITDA, Adjusted EBITDA and Adjusted OIBDA
(Unaudited)
The following tables reconcile EBITDA, Adjusted EBITDA and Adjusted OIBDA to the corresponding GAAP measures, Net income,
Income before income taxes and/or Operating income. Income and expense items below Operating income are not provided at the
individual segment level for UScellular Wireless and UScellular Towers; therefore, the reconciliations begin with EBITDA and the
most comparable GAAP measure is Operating income rather than Net income at the segment level.
Three Months Ended
June 30,
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
June 30,
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
June 30,
UScellular Wireless 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
June 30,
UScellular Towers 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
June 30,
TDS TELECOM 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 Telephone and Data Systems, Inc.
