TDS reports third quarter 2024 results
CHICAGO, Nov. 1, 2024 /PRNewswire/ --
As previously announced, TDS will hold a teleconference on November 1, 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 $1,224 million for the third quarter of 2024, versus $1,278 million for the same period one year ago. Net income (loss) attributable to TDS common shareholders and related diluted earnings (loss) per share were $(83) million and $(0.73), respectively, for the third quarter of 2024 compared to $(17) million and $(0.16), respectively, in the same period one year ago.
Net income attributable to TDS common shareholders excluding a UScellular wireless spectrum license impairment (non-GAAP) of $136 million ($102 million, net of tax) and related diluted earnings per share excluding a UScellular wireless spectrum license impairment (non-GAAP) were $2 million and $0.01, respectively, for the third quarter of 2024. The impairment loss was substantially all related to the retained high-band spectrum unit of accounting which includes the 28 GHz, 37 GHz and 39 GHz frequency bands.
Recent Highlights*
UScellular
-- Announced sale of select spectrum assets for $1 billion to Verizon in
October 2024, and the sale of additional spectrum to two other mobile
network operators
-- Improved wireless operating results
-- Postpaid handset net losses improved
-- Postpaid ARPU grew 2%; service revenues decreased 2%
-- Prepaid net additions up
-- Both postpaid and prepaid churn improved
-- Fixed wireless customers grew 32% to 140,000
TDS Telecom
-- Reached a milestone of 50% of service addresses now served with fiber
-- Grew total year-over-year service address footprint 9%
-- Delivered 32,000 marketable fiber services addresses in Q3; 87,000
YTD
-- Operating revenues grew 2%; residential revenue growth of 5%
-- Residential broadband connections grew 4% due to broadband
investments
-- Strong net income and Adjusted EBITDA growth
-- Good expense discipline
* Comparisons are 3Q'23 to 3Q'24 unless otherwise noted
"We continue to strategically optimize our portfolio in order to focus our resources appropriately throughout the enterprise," said LeRoy T. Carlson, Jr., TDS President and CEO. "In the third quarter, TDS completed the sale of its OneNeck operations. In addition, TDS Telecom has entered into agreements to sell certain ILEC and cable properties. In October, as part of its ongoing process to opportunistically monetize its remaining spectrum, UScellular announced that it had entered into agreements to monetize select spectrum assets for $1 billion.
"UScellular's third quarter results show that the company is continuing to balance subscriber growth with financial discipline. And while it had postpaid handset net losses in the quarter, the company saw a notable year-over-year improvement in its subscriber trajectory.
"TDS Telecom is implementing its ongoing fiber expansion strategy and it reached a milestone of 50% of its service addresses passed with fiber."
Announced Transactions 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.
The T-Mobile transaction excluded UScellular's approximately 4,400 owned towers, its equity method investments, and approximately 70% of its spectrum assets.
In October, UScellular announced a sale of select spectrum assets to Verizon for a portion of the remaining spectrum for $1 billion, and the sale of additional spectrum to two other mobile network operators for an undisclosed price. Each transaction is subject to regulatory approvals and the satisfaction of customary closing conditions and contingent upon the close of the proposed T-Mobile transaction. The process to opportunistically monetize the remaining spectrum assets continues.
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 November 1, 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
$2,950-$3,000
Adjusted OIBDA1, 2 (Non-GAAP)
$750-$850
$800-$875
Adjusted EBITDA1, 2 (Non-GAAP)
$920-$1,020
$970-$1,045
Capital expenditures
$550-$650
$550-$600
TDS Telecom Previous Current
(Dollars in millions)
Total operating revenues
$1,050-$1,080 Unchanged
Adjusted OIBDA1 (Non-GAAP)
$330-$360 Unchanged
Adjusted EBITDA1 (Non-GAAP)
$330-$360 Unchanged
Capital expenditures
$310-$340 Unchanged
The following tables reconcile EBITDA, Adjusted EBITDA and Adjusted OIBDA to the corresponding GAAP measures, Net income (loss) or Income (loss) before income taxes. In providing 2024 estimated results, TDS has not completed the below reconciliation to Net income (loss) 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 (loss) before income taxes (GAAP)
$(35)-$40
$60-$90
Add back:
Interest expense 180
Depreciation, amortization and accretion expense 665 270
EBITDA (Non-GAAP)(1)
$810-$885
$330-$360
Add back or deduct:
(Gain) loss on asset disposals, net 20
Adjusted EBITDA (Non-GAAP)(1)
$970-$1,045
$330-$360
Deduct:
Equity in earnings of unconsolidated entities 160
Interest and dividend income 10
Adjusted OIBDA (Non-GAAP)(1)
$800-$875
$330-$360
Actual Results
Nine Months Ended Year Ended
September 30, 2024 December 31, 2023
UScellular TDS UScellular TDS
Telecom Telecom
(Dollars in millions)
Net income (loss) (GAAP) $(37) $51 $58 $(483)
Add back:
Income tax expense (benefit) 29 15 53 (26)
Income (loss) before income taxes (GAAP) $(8) $66 $111 $(509)
Add back:
Interest expense 137 (4) 196 (8)
Depreciation, amortization and accretion expense 499 199 656 245
EBITDA (Non-GAAP)(1) $628 $261 $963 $(272)
Add back or deduct:
Expenses related to strategic alternatives review 28 8
Loss on impairment of licenses 136
Loss on impairment of goodwill 547
(Gain) loss on asset disposals, net 14 8 17 10
(Gain) loss on license sales and exchanges, net 4 (2)
Adjusted EBITDA (Non-GAAP)(1) $810 $269 $986 $285
Deduct:
Equity in earnings of unconsolidated entities 123 158
Interest and dividend income 9 4 10 4
Other, net 3 2
Adjusted OIBDA (Non-GAAP)(1) $678 $263 $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
September 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 November 1, 2024 at 9:00 a.m. Central Time.
-- Access the live call on the Events & Presentations page of
investors.tdsinc.com or athttps://events.q4inc.com/attendee/666898854
-- 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 to approximately 6 million connections nationwide through its businesses, UScellular and TDS Telecom. Founded in 1969 and headquartered in Chicago, TDS employed approximately 8,000 associates as of September 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 transactions whereby UScellular has agreed to sell its wireless operations and selected spectrum assets will be successfully completed or whether UScellular will be able to find buyers at mutually agreeable prices for its remaining spectrum assets; 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
United
States Cellular Corporation
Summary Operating Data (Unaudited)
As of or for the Quarter Ended 9/30/2024 6/30/2024 3/31/2024 12/31/2023 9/30/2023
Retail Connections
Postpaid
Total at end of period(1) 3,999,000 4,027,000 4,051,000 4,106,000 4,159,000
Gross additions 123,000 117,000 106,000 129,000 128,000
Handsets 84,000 73,000 63,000 80,000 84,000
Connected devices 39,000 44,000 43,000 49,000 44,000
Net additions (losses)(1) (28,000) (24,000) (44,000) (50,000) (35,000)
Handsets (28,000) (29,000) (47,000) (53,000) (38,000)
Connected devices - 5,000 3,000 3,000 3,000
ARPU(2) $52.04 $51.45 $51.96 $51.61 $51.11
ARPA(3) $131.81 $130.41 $132.00 $131.63 $130.91
Handset upgrade rate4 3.5 % 4.1 % 4.5 % 5.8 % 4.5 %
Churn rate5 1.25 % 1.16 % 1.22 % 1.44 % 1.30 %
Handsets 1.07 % 0.97 % 1.03 % 1.22 % 1.11 %
Connected devices 2.47 % 2.47 % 2.52 % 3.03 % 2.64 %
Prepaid
Total at end of period(1) 452,000 439,000 436,000 451,000 462,000
Gross additions 57,000 50,000 41,000 43,000 52,000
Net additions (losses)(1) 13,000 3,000 (13,000) (11,000)
ARPU2, 6 $32.01 $32.37 $32.25 $32.32 $33.44
Churn rate5 3.30 % 3.60 % 4.06 % 3.87 % 3.68 %
Market penetration at end of period
Consolidated operating population 32,550,000 32,550,000 32,550,000 32,350,000 32,350,000
Consolidated operating penetration7 15 % 15 % 14 % 15 % 15 %
Capital expenditures (millions) $120 $165 $131 $148 $111
Total cell sites in service 7,007 6,990 6,995 7,000 6,973
Owned towers 4,407 4,388 4,382 4,373 4,356
Number of colocations8 2,418 2,392 2,397 2,390 2,406
Tower tenancy rate9 1.55 1.55 1.55 1.55 1.55
(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.
8
Represents instances where a third-party wireless carrier rents or leases space on a company-owned tower.
9
Average number of tenants that lease space on company-owned towers, measured on a per-tower basis.
TDS Telecom
Summary Operating Data (Unaudited)
As of or for the Quarter Ended 9/30/2024 6/30/2024 3/31/2024 12/31/2023 9/30/2023
Residential connections
Broadband
Incumbent 241,500 243,700 245,100 244,800 248,800
Expansion 115,300 107,800 100,400 92,200 79,400
Cable 195,900 198,500 202,400 202,900 204,400
Total Broadband(1) 552,700 550,000 547,900 539,800 532,600
Video 122,100 124,800 128,800 131,500 132,400
Voice 271,300 275,600 279,400 281,600 284,000
Total Residential connections 946,100 950,400 956,100 952,900 949,000
Commercial connections 197,200 201,500 206,200 210,200 217,400
Total connections 1,143,300 1,152,000 1,162,200 1,163,100 1,166,400
Residential revenue per connection(2) $65.41 $65.26 $64.58 $62.74 $62.15
Capital expenditures (millions) $78 $78 $87 $143 $172
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 Nine Months Ended
September 30, September 30,
2024 2023 2024 2024 2023 2024
vs. 2023 vs. 2023
(Dollars and shares in millions, except per share amounts)
Operating revenues
UScellular $922 $963 (4) % $2,799 $2,906 (4) %
TDS Telecom 263 256 2 % 797 767 4 %
All Other(1) 39 59 (33) % 128 175 (27) %
1,224 1,278 (4) % 3,724 3,848 (3) %
Operating expenses
UScellular
Expenses excluding depreciation, amortization and accretion 707 746 (5) % 2,149 2,285 (6) %
Depreciation, amortization and accretion 167 159 5 % 499 490 2 %
Loss on impairment of licenses 136 N/M 136 N/M
(Gain) loss on asset disposals, net 4 1 N/M 14 14 4 %
(Gain) loss on license sales and exchanges, net (2) N/M 4 N/M
1,012 906 12 % 2,802 2,789
TDS Telecom
Expenses excluding depreciation, amortization and accretion 182 189 (4) % 533 563 (5) %
Depreciation, amortization and accretion 68 61 11 % 199 180 11 %
(Gain) loss on asset disposals, net 3 6 (52) % 8 8
252 256 (1) % 741 752 (1) %
All Other(1)
Expenses excluding depreciation and amortization 49 64 (22) % 159 187 (14) %
Depreciation and amortization 3 5 (73) % 6 11 (40) %
(Gain) loss on asset disposals, net (1) (1) N/M 1 N/M
(Gain) loss on sale of business and other exit costs, net (12) N/M (12) N/M
40 68 (43) % 154 197 (22) %
Total operating expenses 1,304 1,230 6 % 3,697 3,738 (1) %
Operating income (loss)
UScellular (90) 57 N/M (3) 117 N/M
TDS Telecom 10 N/M 56 15 N/M
All Other(1) - (9) N/M (26) (22) (18) %
(80) 48 N/M 27 110 (76) %
Investment and other income (expense)
Equity in earnings of unconsolidated entities 43 40 9 % 125 122 3 %
Interest and dividend income 8 5 51 % 20 16 25 %
Interest expense (76) (62) (22) % (208) (178) (17) %
Other, net 1 N/M 3 1 N/M
Total investment and other expense (24) (17) (41) % (60) (39) (52) %
Income (loss) before income taxes (104) 31 N/M (33) 71 N/M
Income tax expense (benefit) (25) 27 N/M 1 55 (98) %
Net income (loss) (79) 4 N/M (34) 16 N/M
Less: Net income (loss) attributable to noncontrolling interests, net of tax (13) 4 N/M 10 N/M
Net income (loss) attributable to TDS shareholders (66) N/M (34) 6 N/M
TDS Preferred Share dividends 17 17 52 52
Net income (loss) attributable to TDS common shareholders $(83) $(17) N/M $(86) $(46) (86) %
Basic weighted average shares outstanding 114 113 1 % 114 113 1 %
Basic earnings (loss) per share attributable to TDS common shareholders $(0.73) $(0.16) N/M $(0.75) $(0.41) (85) %
Diluted weighted average shares outstanding 114 113 1 % 114 113 1 %
Diluted earnings (loss) per share attributable to TDS common shareholders $(0.73) $(0.16) N/M $(0.75) $(0.41) (83) %
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)
Nine Months Ended
September 30,
2024 2023
(Dollars in millions)
Cash flows from operating activities
Net income (loss) $(34) $16
Add (deduct) adjustments to reconcile net income (loss) to net cash flows from operating activities
Depreciation, amortization and accretion 704 681
Bad debts expense 72 77
Stock-based compensation expense 48 27
Deferred income taxes, net (15) 38
Equity in earnings of unconsolidated entities (125) (122)
Distributions from unconsolidated entities 106 97
Loss on impairment of licenses 136
(Gain) loss on asset disposals, net 23 22
(Gain) loss on sale of business and other exit costs, net (12)
(Gain) loss on license sales and exchanges, net 4
Other operating activities 6 4
Changes in assets and liabilities from operations
Accounts receivable 33 11
Equipment installment plans receivable 12 20
Inventory 37 87
Accounts payable 3 (36)
Customer deposits and deferred revenues (3) (15)
Accrued taxes 16 72
Accrued interest 13 8
Other assets and liabilities (91) (64)
Net cash provided by operating activities 933 923
Cash flows from investing activities
Cash paid for additions to property, plant and equipment (655) (906)
Cash paid for licenses (17) (24)
Cash received from divestitures 91
Other investing activities 1 8
Net cash used in investing activities (580) (922)
Cash flows from financing activities
Issuance of long-term debt 440 781
Repayment of long-term debt (408) (664)
Repayment of short-term debt - (60)
Tax payments for TDS stock-based compensation awards (10) (3)
Tax payments for UScellular stock-based compensation awards (11) (6)
Repurchase of TDS Common Shares - (6)
Repurchase of UScellular Common Shares (26)
Dividends paid to TDS shareholders (83) (114)
Payment of debt issuance costs (16) (4)
Distributions to noncontrolling interests (4) (2)
Cash paid for software license agreements (32) (29)
Other financing activities (1)
Net cash used in financing activities (151) (107)
Net increase (decrease) in cash, cash equivalents and restricted cash 202 (106)
Cash, cash equivalents and restricted cash
Beginning of period 270 399
End of period $472 $293
Telephone and Data Systems, Inc
Consolidated Balance Sheet Highlights
(Unaudited)
ASSETS
September 30, 2024 December 31, 2023
(Dollars in millions)
Current assets
Cash and cash equivalents $451 $236
Accounts receivable, net 997 1,074
Inventory, net 167 208
Prepaid expenses 88 86
Income taxes receivable 3 4
Other current assets 40 52
Total current assets 1,746 1,660
Assets held for sale 17 15
Licenses 4,586 4,702
Other intangible assets, net 168 183
Investments in unconsolidated entities 524 505
Property, plant and
equipment, net 4,987 5,062
Operating lease right-of-use assets 970 987
Other assets and deferred charges 728 807
Total assets $13,726 $13,921
Telephone and Data Systems, Inc
Consolidated Balance Sheet Highlights
(Unaudited)
LIABILITIES AND EQUITY
September 30, 2024 December 31, 2023
(Dollars in millions, except per share amounts)
Current liabilities
Current portion of long-term debt $29 $26
Accounts payable 334 360
Customer deposits and deferred revenues 270 277
Accrued interest 26 12
Accrued taxes 49 43
Accrued compensation 107 149
Short-term operating lease liabilities 151 147
Other current liabilities 132 170
Total current liabilities 1,098 1,184
Liabilities held for sale 7
Deferred liabilities and credits
Deferred income tax liability, net 961 975
Long-term operating lease liabilities 862 890
Other deferred liabilities and credits 812 784
Long-term debt, net 4,097 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 2,557 2,558
Preferred Shares, par value $0.01 per share 1,074 1,074
Treasury shares, at cost (433) (465)
Accumulated other comprehensive income 11 11
Retained earnings 1,865 2,023
Total TDS shareholders' equity 5,075 5,202
Noncontrolling interests 798 794
Total equity 5,873 5,996
Total liabilities and equity $13,726 $13,921
Balance Sheet Highlights
(Unaudited)
September 30, 2024
TDS TDS Corporate Intercompany TDS
UScellular Telecom & Other Eliminations Consolidated
(Dollars in millions)
Cash and cash equivalents $272 $83 $175 $(79) $451
Licenses and other intangible assets $4,576 $173 $5
$ - $4,754
Investment in unconsolidated entities 478 4 50 (8) 524
$5,054 $177 $55 $(8) $5,278
Property, plant and equipment, net $2,504 $2,465 $18
$ - $4,987
Long-term debt, net:
Current portion $20
$ - $9
$ - $29
Non-current portion 2,882 3 1,212 4,097
$2,902 $3 $1,221
$ - $4,126
United States Cellular Corporation
Segment Results
(Unaudited)
Three Months Ended Nine Months Ended
September 30,
September 30,
UScellular 2024 2023 2024 2024 2023 2024
vs. 2023 vs. 2023
(Dollars in millions)
Operating Revenues
Wireless $896 $938 (4) % $2,722 $2,831 (4) %
Towers 59 57 2 % 175 170 3 %
Intra-company eliminations (33) (32) (3) % (98) (95) (3) %
Total operating revenues 922 963 (4) % 2,799 2,906 (4) %
Operating expenses
Wireless 1,005 900 12 % 2,784 2,770 1 %
Towers 40 38 4 % 116 114 1 %
Intra-company eliminations (33) (32) (3) % (98) (95) (3) %
Total operating expenses 1,012 906 12 % 2,802 2,789
Operating income (loss) $(90) $57 N/M $(3) $117 N/M
Adjusted OIBDA (Non-GAAP) $222 $220 1 % $678 $624 9 %
Adjusted EBITDA (Non-GAAP) $269 $263 3 % $810 $753 8 %
Capital expenditures $120 $111 8 % $415 $462 (10) %
N/M - Percentage change not meaningful
United States Cellular Corporation
Segment Results
(Unaudited)
Three Months Ended Nine Months Ended
September 30,
September 30,
UScellular Wireless 2024 2023 2024 2024 2023 2024
vs. 2023 vs. 2023
(Dollars in millions)
Retail service $669 $687 (3) % $2,014 $2,065 (2) %
Other 52 50 5 % 154 149 4 %
Service revenues 721 737 (2) % 2,168 2,214 (2) %
Equipment sales 175 201 (13) % 554 617 (10) %
Total operating revenues 896 938 (4) % 2,722 2,831 (4) %
System operations (excluding Depreciation, amortization and 193 199 (3) % 582 597 (2) %
accretion reported below)
Cost of equipment sold 203 228 (11) % 630 708 (11) %
Selling, general and administrative 316 324 (3) % 953 995 (4) %
Depreciation, amortization and accretion 155 148 5 % 466 456 2 %
Loss on impairment of licenses 136 N/M 136 N/M
(Gain) loss on asset disposals, net 4 1 N/M 13 14 (1) %
(Gain) loss on license sales and exchanges, net (2) N/M 4 N/M
Total operating expenses 1,005 900 12 % 2,784 2,770 1 %
Operating income (loss) $(109) $38 N/M $(62) $61 N/M
Adjusted OIBDA (Non-GAAP) $191 $190 1 % $583 $534 9 %
Adjusted EBITDA (Non-GAAP) $191 $190 1 % $583 $534 9 %
Capital expenditures $114 $106 7 % $400 $452 (12) %
Three Months Ended Nine Months Ended
September 30,
September 30,
UScellular Towers 2024 2023 2024 2024 2023 2024
vs. 2023 vs. 2023
(Dollars in millions)
Third-party revenues $26 $25 1 % $77 $75 2 %
Intra-company revenues 33 32 3 % 98 95 3 %
Total tower revenues 59 57 2 % 175 170 3 %
System operations (excluding Depreciation, amortization and 20 18 10 % 58 55 4 %
accretion reported below)
Selling, general and administrative 8 9 (14) % 24 25 (7) %
Depreciation, amortization and accretion 12 11 7 % 33 34 (1) %
(Gain) loss on asset disposals, net N/M 1 N/M
Total operating expenses 40 38 4 % 116 114 1 %
Operating income $19 $19 (1) % $59 $56 7 %
Adjusted OIBDA (Non-GAAP) $31 $30 3 % $95 $90 6 %
Adjusted EBITDA (Non-GAAP) $31 $30 3 % $95 $90 6 %
Capital expenditures $6 $5 33 % $15 $10 61 %
N/M - Percentage change not meaningful
TDS Telecom Highlights
(Unaudited)
Three Months Ended Nine Months Ended
September 30, September 30,
2024 2023 2024 2024 2023 2024
vs. 2023 vs. 2023
(Dollars in millions)
Operating revenues
Residential
Incumbent $90 $89 1 % $269 $264 2 %
Expansion 29 20 46 % 83 52 58 %
Cable 67 68 (2) % 206 204 1 %
Total residential 186 177 5 % 558 521 7 %
Commercial 36 38 (4) % 110 118 (7) %
Wholesale 40 42 (3) % 128 127 1 %
Total service revenues 262 256 2 % 796 766 4 %
Equipment revenues - (6) % 1 1 (10) %
Total operating revenues 263 256 2 % 797 767 4 %
Cost of services 101 107 (6) % 297 319 (7) %
Cost of equipment and products - 26 % 1 4 %
Selling, general and administrative expenses 81 82 (1) % 236 244 (3) %
Depreciation, amortization and accretion 68 61 11 % 199 180 11 %
(Gain) loss on asset disposals, net 3 6 (52) % 8 8
Total operating expenses 252 256 (1) % 741 752 (1) %
Operating income $10
$ - N/M $56 $15 N/M
N/M - Percentage change not meaningful
Numbers may not foot due to rounding.
Telephone and Data Systems, Inc
Financial Measures
(Unaudited)
Free Cash Flow
Three Months Ended Nine Months Ended
September 30, September 30,
TDS - CONSOLIDATED 2024 2023 2024 2023
(Dollars in millions)
Cash flows from operating activities (GAAP) $306 $408 $933 $923
Cash paid for additions to property, plant and equipment (203) (278) (655) (906)
Cash paid for software license agreements (11) (9) (32) (29)
Free cash flow (Non-GAAP)(1) $92 $121 $246 $(12)
Three Months Ended Nine Months Ended
September 30, September 30,
UScellular 2024 2023 2024 2023
(Dollars in millions)
Cash flows from operating activities (GAAP) $245 $329 $761 $719
Cash paid for additions to property, plant and equipment (129) (103) (399) (454)
Cash paid for software license agreements (11) (9) (31) (28)
Free cash flow (Non-GAAP)(1) $105 $217 $331 $237
(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 a
mount 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.
Licenses impairment, net of tax
The following non-GAAP financial measure isolates the total effects on net income of the current period Loss on impairment of intangible assets at UScellular, including tax impacts. TDS believes this measure may be useful to investors and other users of its financial information to assist in comparing the current period financial results with
periods that were not impacted by such a charge.
Three Months Ended Nine Months Ended
September 30,
September 30,
2024 2023 2024 2023
(Dollars in millions)
Net loss attributable to TDS common shareholders (GAAP) $(83) $(17) $(86) $(46)
Adjustments:
Loss on impairment of licenses 136 136
Deferred tax benefit on the tax-amortizable portion of the (34) (34)
impaired licenses
UScellular noncontrolling public shareholders' portion of the (17) (17)
impaired licenses
Subtotal of Non-GAAP adjustments 85 85
Net income (loss) attributable to TDS common shareholders 2 (17) (1) (46)
excluding licenses impairment charge (Non-GAAP)
Noncontrolling interest adjustment to compute diluted earnings (1) (1) (1)
(loss)
Net income (loss) attributable to TDS common shareholders $1 $(18) $(2) $(46)
excluding licenses impairment charge used in diluted earnings
(loss) per share (Non-GAAP)
Diluted weighted average shares outstanding used for diluted 114 113 114 113
loss per share attributable to TDS common shareholders
Diluted weighted average shares outstanding used for diluted 117 113 114 113
earnings (loss) per share attributable to TDS common
shareholders excluding licenses impairment charge
Diluted earnings (loss) per share attributable to TDS $(0.73) $(0.16) $(0.75) $(0.41)
common shareholders (GAAP)
Adjustments:
Loss on impairment of licenses 1.18 1.19
Deferred tax benefit on the tax-amortizable portion of the (0.29) (0.30)
impaired licenses
UScellular noncontrolling public shareholders' portion of the (0.15) (0.16)
impaired licenses
Diluted earnings (loss) per share attributable to TDS common $0.01 $(0.16) $(0.02) $(0.41)
shareholders excluding licenses impairment charge (Non-GAAP)
Telephone and Data Systems, Inc.
EBITDA, Adjusted EBITDA and Adjusted OIBDA
(Unaudited)
The following table reconciles EBITDA, Adjusted EBITDA and Adjusted OIBDA to the corresponding GAAP measures, Net income and Income before income taxes
Three Months Ended
September 30,
TDS TELECOM 2024 2023
(Dollars in millions)
Net income (GAAP) $9 $4
Add back:
Income tax expense 4
Income before income taxes (GAAP) 14 4
Add back:
Interest expense (1) (2)
Depreciation, amortization and accretion 68 61
EBITDA (Non-GAAP) 80 63
Add back or deduct:
(Gain) loss on asset disposals, net 3 6
Adjusted EBITDA (Non-GAAP) 83 68
Deduct:
Interest and dividend income 1 1
Other, net 1
Adjusted OIBDA (Non-GAAP) $81 $67
Numbers may not foot due to rounding.
View original content:https://www.prnewswire.com/news-releases/tds-reports-third-quarter-2024-results-302293870.html
SOURCE Telephone and Data Systems, Inc.
