CHICAGO, Aug. 4, 2023
/PRNewswire/ --
As previously announced, TDS will hold a teleconference on
August 4, 2023, 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 $1,267 million
for the second quarter of 2023, versus $1,349 million for the same period one year ago.
Net income (loss) attributable to TDS common shareholders and
related diluted earnings (loss) per share were $(19) million and $(0.17), respectively, for the second quarter of
2023 compared to $18 million and
$0.15, respectively, in the same
period one year ago.
2Q 2023 Highlights*
UScellular
- Focused on improving subscriber trajectory to reduce
postpaid losses - made progress in reducing postpaid
churn
- Executing on growth initiatives
-
- Fixed Wireless customers grew 66% to 96,000
- Tower rental revenues grew 10%
- Reduced debt balance by $150
million in 2Q'23
- Launching 5G Mid-Band network - providing low latency and
faster speeds
-
- Ended June with availability in parts of Illinois, Iowa, Wisconsin, Maine, Missouri, Nebraska, Oklahoma, Oregon, Virginia and Washington
TDS Telecom
- Delivered 66,000 fiber service addresses through June;
remain on track to deliver 175,000 fiber addresses by end of
2023
- Broadband investments driving positive results
-
- Residential broadband connections grew 5%
- Residential broadband revenues grew 8%
- Residential revenue per connection grew 4%
- Increased full-year Adjusted EBITDA and Adjusted OIBDA
guidance due to disciplined spending
- Modestly reduced full-year capital expenditures
guidance
* Comparisons are 2Q'22 to 2Q'23 unless
otherwise noted
"The TDS Family of Companies continues to execute on its
multi-year strategies, while focusing intensely on cost
containment," said LeRoy T. Carlson,
Jr., TDS President and CEO. "UScellular has begun deploying
mid-band 5G spectrum, and TDS Telecom is making solid progress on
its fiber program.
"At UScellular, postpaid handset subscriber trends improved
slightly year-over-year driven by improvements in churn, however,
subscriber results remained challenged overall as gross additions
declined. Two of UScellular's growth areas, fixed wireless and the
tower portfolio, produced year-over-year double-digit increases in
gross additions and revenues, respectively. In July, UScellular
surpassed 100,000 fixed wireless customers – a key milestone as
momentum for the product continues.
"TDS Telecom grew its residential revenue per connection and
increased total residential broadband connections for the quarter.
TDS Telecom continues to execute its broadband growth strategy
through its multi-year fiber expansion program."
Recent Development: On August 4,
2023, TDS and UScellular announced a process to explore a
range of strategic alternatives for UScellular.
2023 Estimated Results
TDS' current estimates of full-year 2023 results for UScellular
and TDS Telecom are shown below. Such estimates represent
management's view as of August 4, 2023 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.
The 2023 Estimated Results shown below do not reflect any
anticipated costs, expenses or results of the strategic review
referenced above.
2023 Estimated
Results
|
|
|
UScellular
|
Previous
|
Current
|
(Dollars in
millions)
|
|
|
Service
revenues
|
$3,050-$3,150
|
$3,025-$3,075
|
Adjusted
OIBDA1
|
$725-$875
|
$750-$850
|
Adjusted
EBITDA1
|
$875-$1,025
|
$925-$1,025
|
Capital
expenditures
|
$600-$700
|
Unchanged
|
|
|
TDS
Telecom
|
Previous
|
Current
|
(Dollars in
millions)
|
|
|
Total operating
revenues
|
$1,030-$1,060
|
Unchanged
|
Adjusted
OIBDA1
|
$260-$290
|
$270-$300
|
Adjusted
EBITDA1
|
$260-$290
|
$270-$300
|
Capital
expenditures
|
$500-$550
|
$475-$525
|
The following tables reconcile EBITDA, Adjusted EBITDA and
Adjusted OIBDA to the corresponding GAAP measures, Net income or
Income before income taxes. In providing 2023 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.
|
2023 Estimated
Results
|
|
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)
|
$50-$150
|
|
$40-$70
|
Add back:
|
|
|
|
Interest
expense
|
200
|
|
—
|
Depreciation,
amortization and accretion expense
|
655
|
|
230
|
EBITDA
(Non-GAAP)1
|
$905-$1,005
|
|
$270-$300
|
Add back or
deduct:
|
|
|
|
(Gain) loss on asset
disposals, net
|
20
|
|
—
|
Adjusted EBITDA
(Non-GAAP)1
|
$925-$1,025
|
|
$270-$300
|
Deduct:
|
|
|
|
Equity in earnings of
unconsolidated entities
|
160
|
|
—
|
Interest and dividend
income
|
15
|
|
—
|
Adjusted OIBDA
(Non-GAAP)1
|
$750-$850
|
|
$270-$300
|
|
Actual
Results
|
|
Six Months
Ended
June 30,
2023
|
|
Year
Ended
December 31,
2022
|
|
UScellular
|
|
TDS
Telecom
|
|
UScellular
|
|
TDS
Telecom
|
(Dollars in
millions)
|
|
|
|
|
|
|
|
Net income
(GAAP)
|
$
20
|
|
$
15
|
|
$
35
|
|
$
53
|
Add back:
|
|
|
|
|
|
|
|
Income tax
expense
|
29
|
|
5
|
|
37
|
|
23
|
Income before income
taxes (GAAP)
|
$
49
|
|
$
21
|
|
$
72
|
|
$
76
|
Add back:
|
|
|
|
|
|
|
|
Interest
expense
|
99
|
|
(4)
|
|
163
|
|
(7)
|
Depreciation,
amortization and accretion expense
|
330
|
|
119
|
|
700
|
|
215
|
EBITDA
(Non-GAAP)1
|
$
478
|
|
$
136
|
|
$
935
|
|
$
284
|
Add back or
deduct:
|
|
|
|
|
|
|
|
Loss on impairment of
licenses
|
—
|
|
—
|
|
3
|
|
—
|
(Gain) loss on asset
disposals, net
|
13
|
|
3
|
|
19
|
|
7
|
(Gain) loss on sale of
business and other exit costs, net
|
—
|
|
—
|
|
(1)
|
|
—
|
Adjusted EBITDA
(Non-GAAP)1
|
$
491
|
|
$
139
|
|
$
956
|
|
$
291
|
Deduct:
|
|
|
|
|
|
|
|
Equity in earnings of
unconsolidated entities
|
82
|
|
—
|
|
158
|
|
—
|
Interest and dividend
income
|
5
|
|
2
|
|
8
|
|
2
|
Other, net
|
—
|
|
1
|
|
—
|
|
1
|
Adjusted OIBDA
(Non-GAAP)1
|
$
404
|
|
$
136
|
|
$
790
|
|
$
288
|
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
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 June 30, 2023, can be found on TDS'
website at investors.tdsinc.com.
|
Stock Repurchase
During the second quarter of 2023,
TDS repurchased 255,090 of its Common Shares for $3 million.
Conference Call Information
TDS will hold a conference
call on August 4, 2023 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/745533112
- Access the call by phone at (888)330-2384, conference ID:
1328528.
Before the call, certain financial and statistical information
to be discussed during the call will be posted to
investors.tdsinc.com. The call will be archived on the Events &
Presentations page of investors.tdsinc.com.
About TDS
Telephone and Data Systems, Inc. (TDS), a
Fortune 1000® company, provides wireless; broadband,
video and voice; and hosted and managed services to
approximately 6 million connections nationwide through its
businesses, UScellular, TDS Telecom, and OneNeck IT Solutions.
Founded in 1969 and headquartered in Chicago, TDS employed approximately 9,100
associates as of June 30, 2023.
Visit investors.tdsinc.com for comprehensive financial
information, including earnings releases, quarterly and annual
filings, shareholder information and more.
Safe Harbor Statement Under the Private Securities
Litigation Reform Act of 1995: All information set
forth in this news release, except historical and factual
information, represents forward-looking statements. This includes
all statements about the company's plans, beliefs, estimates, and
expectations. These statements are based on current estimates,
projections, and assumptions, which involve certain risks and
uncertainties that could cause actual results to differ materially
from those in the forward-looking statements. Important factors
that may affect these forward-looking statements include, but are
not limited to: whether any strategic alternatives for UScellular
will be successfully identified or completed; whether any such
strategic alternative will result in additional value for TDS or
its shareholders and whether the process will have an adverse
impact on TDS' businesses; intense competition; the ability to
obtain or maintain roaming arrangements with other carriers on
acceptable terms and changes in roaming practices; the ability to
obtain access to adequate radio spectrum to meet current or
anticipated future needs, including participation in FCC auctions;
the ability to attract people of outstanding talent throughout all
levels of the organization; TDS' smaller scale relative to larger
competitors; changes in demand, consumer preferences and
perceptions, price competition, or churn rates; advances in
technology; impacts of costs, integration problems or other factors
associated with acquisitions, divestitures or exchanges of
properties or wireless spectrum licenses and/or expansion of TDS'
businesses; the ability of the company to successfully construct
and manage its networks; difficulties involving third parties with
which TDS does business; uncertainties in TDS' future cash flows
and liquidity and access to the capital markets; the ability to
make payments on TDS and UScellular indebtedness or comply with the
terms of debt covenants; conditions in the U.S. telecommunications
industry; the value of assets and investments; the state and
federal regulatory environment; pending and future litigation;
cyber-attacks or other breaches of network or information
technology security; control by the TDS Voting Trust; disruption in
credit or other financial markets; deterioration of U.S. or global
economic conditions; and the impact, duration and severity of
public health emergencies. Investors are encouraged to consider
these and other risks and uncertainties that are more fully
described under "Risk Factors" in the most recent filing of TDS'
Form 10-K, as updated by any TDS Form 10-Q filed subsequent to such
Form 10-K.
For more information about TDS and its subsidiaries, visit:
TDS: www.tdsinc.com
UScellular: www.uscellular.com
TDS Telecom: www.tdstelecom.com
OneNeck IT Solutions: www.oneneck.com
United States
Cellular Corporation
|
Summary Operating
Data (Unaudited)
|
As of or for the
Quarter Ended
|
6/30/2023
|
|
3/31/2023
|
|
12/31/2022
|
|
9/30/2022
|
|
6/30/2022
|
Retail
Connections
|
|
|
|
|
|
|
|
|
|
Postpaid
|
|
|
|
|
|
|
|
|
|
Total at end of
period
|
4,194,000
|
|
4,223,000
|
|
4,247,000
|
|
4,264,000
|
|
4,296,000
|
Gross
additions
|
125,000
|
|
137,000
|
|
154,000
|
|
151,000
|
|
128,000
|
Handsets
|
83,000
|
|
93,000
|
|
105,000
|
|
107,000
|
|
94,000
|
Connected
devices
|
42,000
|
|
44,000
|
|
49,000
|
|
44,000
|
|
34,000
|
Net additions
(losses)
|
(28,000)
|
|
(24,000)
|
|
(17,000)
|
|
(31,000)
|
|
(40,000)
|
Handsets
|
(29,000)
|
|
(25,000)
|
|
(20,000)
|
|
(22,000)
|
|
(31,000)
|
Connected
devices
|
1,000
|
|
1,000
|
|
3,000
|
|
(9,000)
|
|
(9,000)
|
ARPU1
|
$
50.64
|
|
$
50.66
|
|
$
50.60
|
|
$
50.21
|
|
$
50.07
|
ARPA2
|
$
130.19
|
|
$ 130.77
|
|
$ 130.97
|
|
$ 130.27
|
|
$ 130.43
|
Handset upgrade
rate3
|
4.8 %
|
|
4.9 %
|
|
7.0 %
|
|
8.1 %
|
|
6.0 %
|
Churn
rate4
|
1.21 %
|
|
1.27 %
|
|
1.35 %
|
|
1.42 %
|
|
1.30 %
|
Handsets
|
1.01 %
|
|
1.06 %
|
|
1.12 %
|
|
1.15 %
|
|
1.10 %
|
Connected
devices
|
2.65 %
|
|
2.78 %
|
|
2.99 %
|
|
3.40 %
|
|
2.73 %
|
Prepaid
|
|
|
|
|
|
|
|
|
|
Total at end of
period
|
462,000
|
|
470,000
|
|
493,000
|
|
493,000
|
|
490,000
|
Gross
additions
|
50,000
|
|
43,000
|
|
61,000
|
|
62,000
|
|
56,000
|
Net additions
(losses)
|
(8,000)
|
|
(23,000)
|
|
—
|
|
2,000
|
|
(4,000)
|
ARPU1
|
$
33.86
|
|
$
33.19
|
|
$
33.34
|
|
$
35.04
|
|
$
35.25
|
Churn
rate4
|
4.18 %
|
|
4.63 %
|
|
4.11 %
|
|
4.07 %
|
|
4.07 %
|
Market penetration
at end of period
|
|
|
|
|
|
|
|
|
|
Consolidated operating
population
|
32,350,000
|
|
32,350,000
|
|
32,370,000
|
|
32,370,000
|
|
32,370,000
|
Consolidated operating
penetration5
|
15 %
|
|
15 %
|
|
15 %
|
|
15 %
|
|
15 %
|
Capital expenditures
(millions)
|
$
143
|
|
$
208
|
|
$
176
|
|
$
136
|
|
$
268
|
Total cell sites in
service
|
6,952
|
|
6,950
|
|
6,945
|
|
6,933
|
|
6,916
|
Owned
towers
|
4,341
|
|
4,338
|
|
4,336
|
|
4,329
|
|
4,323
|
|
|
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
|
Handset upgrade rate
calculated as total handset upgrade transactions divided by average
postpaid handset connections.
|
4
|
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.
|
5
|
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
|
6/30/2023
|
|
3/31/2023
|
|
12/31/2022
|
|
9/30/2022
|
|
6/30/2022
|
Residential
connections
|
|
|
|
|
|
|
|
|
|
Broadband
|
|
|
|
|
|
|
|
|
|
Wireline,
Incumbent
|
249,200
|
|
247,900
|
|
249,100
|
|
252,600
|
|
252,700
|
Wireline,
Expansion
|
70,200
|
|
62,800
|
|
56,100
|
|
49,400
|
|
44,100
|
Cable
|
204,200
|
|
204,700
|
|
204,800
|
|
204,500
|
|
204,000
|
Total
Broadband
|
523,600
|
|
515,400
|
|
510,000
|
|
506,500
|
|
500,800
|
Video
|
132,300
|
|
132,600
|
|
135,300
|
|
136,600
|
|
137,400
|
Voice
|
288,200
|
|
289,200
|
|
291,600
|
|
295,500
|
|
298,300
|
Total Residential
connections
|
944,100
|
|
937,200
|
|
936,900
|
|
938,600
|
|
936,500
|
Commercial
connections
|
223,300
|
|
229,800
|
|
236,000
|
|
242,800
|
|
250,700
|
Total
connections
|
1,167,400
|
|
1,167,000
|
|
1,173,000
|
|
1,181,400
|
|
1,187,200
|
|
|
|
|
|
|
|
|
|
|
Residential revenue
per connection1
|
$
61.97
|
|
$
60.24
|
|
$
59.91
|
|
$
60.32
|
|
$
59.67
|
|
|
|
|
|
|
|
|
|
|
Capital expenditures
(millions)
|
$
132
|
|
$
130
|
|
$
165
|
|
$
166
|
|
$
120
|
|
Numbers may not foot
due to rounding.
|
1
|
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
June
30,
|
|
Six Months
Ended
June
30,
|
|
2023
|
|
2022
|
|
2023
vs. 2022
|
|
2023
|
|
2022
|
|
2023
vs. 2022
|
(Dollars and shares in
millions, except per share amounts)
|
|
|
|
|
|
|
|
|
|
|
|
Operating
revenues
|
|
|
|
|
|
|
|
|
|
|
|
UScellular
|
$ 957
|
|
$ 1,027
|
|
(7) %
|
|
$
1,942
|
|
$ 2,037
|
|
(5) %
|
TDS Telecom
|
257
|
|
256
|
|
1 %
|
|
510
|
|
507
|
|
1 %
|
All
Other1
|
53
|
|
66
|
|
(19) %
|
|
118
|
|
120
|
|
(2) %
|
|
1,267
|
|
1,349
|
|
(6) %
|
|
2,570
|
|
2,664
|
|
(4) %
|
Operating
expenses
|
|
|
|
|
|
|
|
|
|
|
|
UScellular
|
|
|
|
|
|
|
|
|
|
|
|
Expenses excluding
depreciation, amortization and accretion
|
759
|
|
806
|
|
(6) %
|
|
1,538
|
|
1,573
|
|
(2) %
|
Depreciation,
amortization and accretion
|
161
|
|
172
|
|
(7) %
|
|
330
|
|
342
|
|
(4) %
|
Loss on impairment of
licenses
|
—
|
|
3
|
|
N/M
|
|
—
|
|
3
|
|
N/M
|
(Gain) loss on asset
disposals, net
|
3
|
|
6
|
|
(44) %
|
|
13
|
|
8
|
|
73 %
|
|
923
|
|
987
|
|
(7) %
|
|
1,881
|
|
1,926
|
|
(2) %
|
TDS Telecom
|
|
|
|
|
|
|
|
|
|
|
|
Expenses excluding
depreciation, amortization and accretion
|
189
|
|
180
|
|
5 %
|
|
374
|
|
349
|
|
7 %
|
Depreciation,
amortization and accretion
|
60
|
|
52
|
|
15 %
|
|
119
|
|
106
|
|
12 %
|
(Gain) loss on asset
disposals, net
|
2
|
|
1
|
|
N/M
|
|
3
|
|
1
|
|
N/M
|
|
251
|
|
233
|
|
8 %
|
|
496
|
|
456
|
|
9 %
|
All
Other1
|
|
|
|
|
|
|
|
|
|
|
|
Expenses excluding
depreciation and amortization
|
56
|
|
61
|
|
(7) %
|
|
124
|
|
116
|
|
6 %
|
Depreciation and
amortization
|
4
|
|
5
|
|
3 %
|
|
7
|
|
8
|
|
(2) %
|
|
60
|
|
66
|
|
(7) %
|
|
131
|
|
124
|
|
6 %
|
Total operating
expenses
|
1,234
|
|
1,286
|
|
(4) %
|
|
2,508
|
|
2,506
|
|
—
|
Operating income
(loss)
|
|
|
|
|
|
|
|
|
|
|
|
UScellular
|
34
|
|
40
|
|
(13) %
|
|
61
|
|
111
|
|
(45) %
|
TDS Telecom
|
7
|
|
23
|
|
(71) %
|
|
15
|
|
51
|
|
(72) %
|
All
Other1
|
(8)
|
|
—
|
|
N/M
|
|
(14)
|
|
(4)
|
|
N/M
|
|
33
|
|
63
|
|
(47) %
|
|
62
|
|
158
|
|
(61) %
|
Investment and other
income (expense)
|
|
|
|
|
|
|
|
|
|
|
|
Equity in earnings of
unconsolidated entities
|
38
|
|
38
|
|
1 %
|
|
82
|
|
83
|
|
(1) %
|
Interest and dividend
income
|
6
|
|
5
|
|
10 %
|
|
11
|
|
7
|
|
61 %
|
Interest
expense
|
(62)
|
|
(40)
|
|
(54) %
|
|
(116)
|
|
(72)
|
|
(59) %
|
Other, net
|
—
|
|
—
|
|
(34) %
|
|
1
|
|
—
|
|
26 %
|
Total investment and
other income (expense)
|
(18)
|
|
3
|
|
N/M
|
|
(22)
|
|
18
|
|
N/M
|
Income before income
taxes
|
15
|
|
66
|
|
(77) %
|
|
40
|
|
176
|
|
(77) %
|
Income tax
expense
|
15
|
|
27
|
|
(43) %
|
|
28
|
|
65
|
|
(56) %
|
Net
income
|
—
|
|
39
|
|
(100) %
|
|
12
|
|
111
|
|
(90) %
|
Less: Net income
attributable to noncontrolling interests, net of tax
|
2
|
|
4
|
|
(63) %
|
|
6
|
|
15
|
|
(67) %
|
Net income (loss)
attributable to TDS shareholders
|
(2)
|
|
35
|
|
N/M
|
|
6
|
|
96
|
|
(93) %
|
TDS Preferred Share
dividends
|
17
|
|
17
|
|
—
|
|
35
|
|
35
|
|
—
|
Net income (loss)
attributable to TDS common shareholders
|
$
(19)
|
|
$ 18
|
|
N/M
|
|
$
(29)
|
|
$ 61
|
|
N/M
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic weighted
average shares outstanding
|
113
|
|
115
|
|
(2) %
|
|
113
|
|
115
|
|
(2) %
|
Basic earnings
(loss) per share attributable to TDS common
shareholders
|
$
(0.17)
|
|
$
0.15
|
|
N/M
|
|
$
(0.25)
|
|
$
0.53
|
|
N/M
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted weighted
average shares outstanding
|
113
|
|
116
|
|
(3) %
|
|
113
|
|
116
|
|
(3) %
|
Diluted earnings
(loss) per share attributable to TDS common
shareholders
|
$
(0.17)
|
|
$
0.15
|
|
N/M
|
|
$
(0.25)
|
|
$
0.52
|
|
N/M
|
|
N/M - Percentage change
not meaningful.
|
Numbers may not foot
due to rounding.
|
1
|
Consists of TDS
corporate, intercompany eliminations and all other business
operations not included in the UScellular and TDS Telecom
segments.
|
Telephone and Data
Systems, Inc.
|
Consolidated
Statement of Cash Flows
|
(Unaudited)
|
|
Six Months
Ended
June
30,
|
|
2023
|
|
2022
|
(Dollars in
millions)
|
|
|
|
Cash flows from
operating activities
|
|
|
|
Net income
|
$
12
|
|
$
111
|
Add (deduct)
adjustments to reconcile net income to net cash flows from
operating activities
|
|
|
|
Depreciation,
amortization and accretion
|
456
|
|
456
|
Bad debts
expense
|
53
|
|
54
|
Stock-based
compensation expense
|
14
|
|
23
|
Deferred income taxes,
net
|
22
|
|
52
|
Equity in earnings of
unconsolidated entities
|
(82)
|
|
(83)
|
Distributions from
unconsolidated entities
|
78
|
|
80
|
Loss on impairment of
licenses
|
—
|
|
3
|
(Gain) loss on asset
disposals, net
|
16
|
|
9
|
Other operating
activities
|
4
|
|
3
|
Changes in assets and
liabilities from operations
|
|
|
|
Accounts
receivable
|
19
|
|
(25)
|
Equipment installment
plans receivable
|
7
|
|
(25)
|
Inventory
|
52
|
|
(35)
|
Accounts
payable
|
(124)
|
|
(6)
|
Customer deposits and
deferred revenues
|
(9)
|
|
7
|
Accrued
taxes
|
56
|
|
131
|
Accrued
interest
|
(1)
|
|
1
|
Other assets and
liabilities
|
(59)
|
|
(22)
|
Net cash provided by
operating activities
|
514
|
|
734
|
|
|
|
|
Cash flows from
investing activities
|
|
|
|
Cash paid for
additions to property, plant and equipment
|
(629)
|
|
(526)
|
Cash paid for
intangible assets
|
(8)
|
|
(585)
|
Advance payments for
license acquisitions
|
—
|
|
(1)
|
Other investing
activities
|
8
|
|
(10)
|
Net cash used in
investing activities
|
(629)
|
|
(1,122)
|
|
|
|
|
Cash flows from
financing activities
|
|
|
|
Issuance of long-term
debt
|
391
|
|
776
|
Repayment of long-term
debt
|
(209)
|
|
(228)
|
Issuance of short-term
debt
|
—
|
|
60
|
Repayment of
short-term debt
|
(60)
|
|
—
|
TDS Common Shares
reissued for benefit plans, net of tax payments
|
(3)
|
|
(4)
|
UScellular Common
Shares reissued for benefit plans, net of tax payments
|
(6)
|
|
(5)
|
Repurchase of TDS
Common Shares
|
(6)
|
|
(20)
|
Repurchase of
UScellular Common Shares
|
—
|
|
(18)
|
Dividends paid to TDS
shareholders
|
(76)
|
|
(76)
|
Distributions to
noncontrolling interests
|
(2)
|
|
(2)
|
Cash paid for software
license agreements
|
(20)
|
|
(3)
|
Other financing
activities
|
—
|
|
(1)
|
Net cash provided by
financing activities
|
9
|
|
479
|
|
|
|
|
Net increase
(decrease) in cash, cash equivalents and restricted
cash
|
(106)
|
|
91
|
|
|
|
|
Cash, cash
equivalents and restricted cash
|
|
|
|
Beginning of
period
|
399
|
|
414
|
End of
period
|
$
293
|
|
$
505
|
Telephone and Data
Systems, Inc.
|
Consolidated Balance
Sheet Highlights
|
(Unaudited)
|
|
ASSETS
|
|
|
|
|
|
June 30,
2023
|
|
December 31,
2022
|
(Dollars in
millions)
|
|
|
|
Current
assets
|
|
|
|
Cash and cash
equivalents
|
$
251
|
|
$
360
|
Accounts receivable,
net
|
1,107
|
|
1,181
|
Inventory,
net
|
216
|
|
268
|
Prepaid
expenses
|
104
|
|
102
|
Income taxes
receivable
|
5
|
|
59
|
Other current
assets
|
63
|
|
58
|
Total current
assets
|
1,746
|
|
2,028
|
|
|
|
|
Assets held for
sale
|
16
|
|
26
|
|
|
|
|
Licenses
|
4,704
|
|
4,699
|
|
|
|
|
Goodwill
|
547
|
|
547
|
|
|
|
|
Other intangible
assets, net
|
193
|
|
204
|
|
|
|
|
Investments in
unconsolidated entities
|
500
|
|
495
|
|
|
|
|
Property, plant
and equipment, net
|
4,932
|
|
4,760
|
|
|
|
|
Operating lease
right-of-use assets
|
988
|
|
995
|
|
|
|
|
Other assets and
deferred charges
|
780
|
|
796
|
|
|
|
|
Total
assets
|
$
14,406
|
|
$
14,550
|
Telephone and Data
Systems, Inc.
|
Consolidated Balance
Sheet Highlights
|
(Unaudited)
|
|
LIABILITIES AND
EQUITY
|
|
|
|
|
|
June 30,
2023
|
|
December 31,
2022
|
(Dollars in millions,
except per share amounts)
|
|
|
|
Current
liabilities
|
|
|
|
Current portion of
long-term debt
|
$
60
|
|
$
19
|
Accounts
payable
|
364
|
|
506
|
Customer deposits and
deferred revenues
|
278
|
|
285
|
Accrued
interest
|
12
|
|
12
|
Accrued
taxes
|
45
|
|
46
|
Accrued
compensation
|
104
|
|
144
|
Short-term operating
lease liabilities
|
147
|
|
146
|
Other current
liabilities
|
268
|
|
356
|
Total current
liabilities
|
1,278
|
|
1,514
|
|
|
|
|
Deferred liabilities
and credits
|
|
|
|
Deferred income tax
liability, net
|
987
|
|
969
|
Long-term operating
lease liabilities
|
900
|
|
908
|
Other deferred
liabilities and credits
|
820
|
|
813
|
|
|
|
|
Long-term debt,
net
|
3,872
|
|
3,731
|
|
|
|
|
Noncontrolling
interests with redemption features
|
12
|
|
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
|
2,532
|
|
2,551
|
Preferred Shares, par
value $0.01 per share
|
1,074
|
|
1,074
|
Treasury shares, at
cost
|
(466)
|
|
(481)
|
Accumulated other
comprehensive income
|
5
|
|
5
|
Retained
earnings
|
2,606
|
|
2,699
|
Total TDS
shareholders' equity
|
5,752
|
|
5,849
|
|
|
|
|
Noncontrolling
interests
|
785
|
|
754
|
|
|
|
|
Total
equity
|
6,537
|
|
6,603
|
|
|
|
|
Total liabilities
and equity
|
$
14,406
|
|
$
14,550
|
Balance Sheet
Highlights
|
(Unaudited)
|
|
|
|
June 30,
2023
|
|
|
|
TDS
|
|
TDS
Corporate
|
|
Intercompany
|
|
TDS
|
|
UScellular
|
|
Telecom
|
|
&
Other
|
|
Eliminations
|
|
Consolidated
|
(Dollars in
millions)
|
|
|
|
|
|
|
|
|
|
Cash and cash
equivalents
|
$
186
|
|
$
73
|
|
$
69
|
|
$
(77)
|
|
$
251
|
|
|
|
|
|
|
|
|
|
|
Licenses, goodwill and
other intangible assets
|
$
4,694
|
|
$
744
|
|
$
6
|
|
$
—
|
|
$
5,444
|
Investment in
unconsolidated entities
|
457
|
|
4
|
|
47
|
|
(8)
|
|
500
|
|
$
5,151
|
|
$
748
|
|
$
53
|
|
$
(8)
|
|
$
5,944
|
|
|
|
|
|
|
|
|
|
|
Property, plant and
equipment, net
|
$
2,640
|
|
$
2,203
|
|
$
89
|
|
$
—
|
|
$
4,932
|
|
|
|
|
|
|
|
|
|
|
Long-term debt,
net:
|
|
|
|
|
|
|
|
|
|
Current
portion
|
$
54
|
|
$
—
|
|
$
6
|
|
$
—
|
|
$
60
|
Non-current
portion
|
3,105
|
|
3
|
|
764
|
|
—
|
|
3,872
|
|
$
3,159
|
|
$
3
|
|
$
770
|
|
$
—
|
|
$
3,932
|
TDS Telecom
Highlights
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
June
30,
|
|
Six Months
Ended
June
30,
|
|
2023
|
|
2022
|
|
2023
vs. 2022
|
|
2023
|
|
2022
|
|
2023
vs. 2022
|
(Dollars in
millions)
|
|
|
|
|
|
|
|
|
|
|
|
Operating
revenues
|
|
|
|
|
|
|
|
|
|
|
|
Residential
|
|
|
|
|
|
|
|
|
|
|
|
Wireline,
Incumbent
|
$
89
|
|
$
88
|
|
1 %
|
|
$
175
|
|
$ 173
|
|
1 %
|
Wireline,
Expansion
|
18
|
|
12
|
|
48 %
|
|
33
|
|
22
|
|
46 %
|
Cable
|
68
|
|
68
|
|
1 %
|
|
136
|
|
135
|
|
1 %
|
Total
residential
|
175
|
|
168
|
|
4 %
|
|
344
|
|
330
|
|
4 %
|
Commercial
|
39
|
|
44
|
|
(10) %
|
|
80
|
|
87
|
|
(8) %
|
Wholesale
|
43
|
|
45
|
|
(4) %
|
|
86
|
|
89
|
|
(4) %
|
Total service
revenues
|
257
|
|
256
|
|
1 %
|
|
510
|
|
507
|
|
1 %
|
Equipment
revenues
|
—
|
|
—
|
|
(5) %
|
|
—
|
|
1
|
|
(17) %
|
Total operating
revenues
|
257
|
|
256
|
|
1 %
|
|
510
|
|
507
|
|
1 %
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of
services
|
108
|
|
103
|
|
5 %
|
|
212
|
|
199
|
|
7 %
|
Cost of equipment and
products
|
—
|
|
—
|
|
24 %
|
|
—
|
|
—
|
|
(10) %
|
Selling, general and
administrative expenses
|
81
|
|
77
|
|
5 %
|
|
162
|
|
150
|
|
8 %
|
Depreciation,
amortization and accretion
|
60
|
|
52
|
|
15 %
|
|
119
|
|
106
|
|
12 %
|
(Gain) loss on asset
disposals, net
|
2
|
|
1
|
|
N/M
|
|
3
|
|
1
|
|
N/M
|
Total operating
expenses
|
251
|
|
233
|
|
8 %
|
|
496
|
|
456
|
|
9 %
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating
income
|
$
7
|
|
$
23
|
|
(71) %
|
|
$
15
|
|
$
51
|
|
(72) %
|
|
N/M - Percentage change
not meaningful.
|
Numbers may not foot
due to rounding.
|
Telephone and Data
Systems, Inc.
Financial Measures
and Reconciliations
(Unaudited)
|
Free Cash
Flow
|
|
|
Three Months
Ended
June
30,
|
|
Six Months
Ended
June
30,
|
|
2023
|
|
2022
|
|
2023
|
|
2022
|
(Dollars in
millions)
|
|
|
|
|
|
|
|
Cash flows from
operating activities (GAAP)
|
$
469
|
|
$
352
|
|
$
514
|
|
$
734
|
Cash paid for additions
to property, plant and equipment
|
(298)
|
|
(256)
|
|
(629)
|
|
(526)
|
Cash paid for software
license agreements
|
(12)
|
|
—
|
|
(20)
|
|
(3)
|
Free cash flow
(Non-GAAP)1
|
$
159
|
|
$
96
|
|
$
(135)
|
|
$
205
|
|
|
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.
|
View original
content:https://www.prnewswire.com/news-releases/tds-reports-second-quarter-2023-results-301893557.html
SOURCE Telephone and Data Systems