TDS
$24.79
Telephone and Data Systems
($.02)
(.08%)
Earnings Details
2nd Quarter June 2019
Thursday, August 1, 2019 4:05:00 PM
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Summary

TDS Lowers Revenue Guidance but Remains In-line with Estimates

Telephone and Data Systems (TDS) reported 2nd Quarter June 2019 earnings of $0.28 per share on revenue of $1.3 billion. The consensus earnings estimate was $0.32 per share on revenue of $1.3 billion. Revenue grew 0.5% on a year-over-year basis.

The company said it expects 2019 revenue of $5.025 billion to $5.275 billion. The company's previous guidance was revenue of $5.125 billion to $5.375 billion and the current consensus estimate is revenue of $5.25 billion for the year ending December 31, 2019.

Telephone and Data Systems, Inc. is a diversified telecommunications service company providing telecommunications services to wireless customers and wireline and cable connections.

Results
Reported Earnings
$0.28
Earnings Whisper
-
Consensus Estimate
$0.32
Reported Revenue
$1.26 Bil
Revenue Estimate
$1.30 Bil
Growth
Earnings Growth
Revenue Growth
Power Rating
Grade
Earnings Release

TDS reports second quarter 2019 results

CHICAGO, Aug. 1, 2019 /PRNewswire/ --  

As previously announced, TDS will hold a teleconference August 2, 2019, at 9:00 a.m. CDT. Listen to the call live via the Events & Presentations page of investors.tdsinc.com.

Telephone and Data Systems, Inc. (NYSE:TDS) reported total operating revenues of $1,261 million for the second quarter of 2019, versus $1,255 million for the same period one year ago. Net income attributable to TDS shareholders and related diluted earnings per share were $33 million and $0.28, respectively, for the second quarter of 2019 compared to $33 million and $0.29, respectively, in the same period one year ago.

"The TDS family of companies produced solid financial results for the second quarter of 2019 and made significant progress toward achieving their long-term strategic goals," said LeRoy T. Carlson, Jr., TDS President and CEO. "U.S. Cellular grew service revenues and Adjusted EBITDA, while sustaining high customer loyalty, and it continued making enhancements to its high-performing network. TDS Telecom expanded its broadband customer base, increased profitability and continued implementing its fiber deployment strategy.

"U.S. Cellular grew service revenues through an increase in average revenue per user, driven by growing interest of customers in its Total Plans, and through higher inbound roaming revenues. Customer satisfaction remained high throughout the quarter and drove very low postpaid handset churn rates. U.S. Cellular is moving steadily forward on its 5G deployment and network modernization initiatives. In the recent FCC millimeter wave auctions, U.S. Cellular successfully acquired new licenses providing access to high frequency spectrum over its footprint, that are needed to deliver exciting, new very high speed capabilities using 5G to our current and future customers.

"TDS Telecom generated both top line and bottom line growth, reporting a 60 percent increase in Net income and a 9 percent increase in Adjusted EBITDA, compared to the same quarter last year.  Both Wireline and Cable segments reported increased broadband connections and higher revenue per connection.  In Wireline, increasing video connections and customer demand for higher broadband speeds continue to offset legacy voice declines.  Wireline continued fiber expansion growth even deeper into its markets while expanding its fiber footprint in attractive out-of-territory markets in Wisconsin and Idaho. Cable operations produced an outstanding quarter, generating 9 percent growth in cable revenues which drove a 29 percent increase in Adjusted EBITDA, compared to the same quarter last year."

2019 Estimated Results

TDS' current estimates of full-year 2019 results for U.S. Cellular, TDS Telecom, and TDS are shown below.  Such estimates represent management's view as of August 1, 2019 and should not be assumed to be current as of any future date.  TDS undertakes no duty to update such estimates, whether as a result of new information, future events, or otherwise.  There can be no assurance that final results will not differ materially from estimated results.


2019 Estimated Results


U.S. Cellular


TDS Telecom


TDS (1)


Previous

Current


Previous

Current


Previous

Current

(Dollars in millions)









Total operating revenues

$4,000-$4,200

$3,900-$4,100*


$900-$950

Unchanged


$5,125-$5,375

$5,025-$5,275*

Adjusted OIBDA (2)

$725-$875

Unchanged


$280-$310

Unchanged


$1,000-$1,180

Unchanged

Adjusted EBITDA (2)

$900-$1,050

Unchanged


$290-$320

Unchanged


$1,185-$1,365

Unchanged

Capital expenditures

$625-$725

Unchanged


$300-$350

Unchanged


$940-$1,090

Unchanged



*

Change represents lower equipment sales revenues.

The following tables provide reconciliations of Net income to Adjusted OIBDA and Adjusted EBITDA for 2019 estimated results, actual results for the six months ended June 30, 2019, and actual results for the year ended December 31, 2018. In providing 2019 estimated results, TDS has not completed the below reconciliation to Net income because it does not provide guidance for income taxes.  Although potentially significant, TDS believes that the impact of income taxes cannot be reasonably predicted; therefore, TDS is unable to provide such guidance.


2019 Estimated Results


U.S. Cellular


TDS Telecom


TDS (1)

(Dollars in millions)






Net income (GAAP)

N/A


N/A


N/A

Add back:






Income tax expense (benefit)

N/A


N/A


N/A

Income before income taxes (GAAP)

$70-$220


$85-$115


$60-$240

Add back:






Interest expense

115



175

Depreciation, amortization and accretion expense

700


205


935

EBITDA (Non-GAAP) (2)

$885-$1,035


$290-$320


$1,170-$1,350

Add back or deduct:






(Gain) loss on asset disposals, net

15



15

Adjusted EBITDA (Non-GAAP) (2)

$900-$1,050


$290-$320


$1,185-$1,365

Deduct:






Equity in earnings of unconsolidated entities

155



155

Interest and dividend income

20


10


30

Adjusted OIBDA (Non-GAAP) (2)

$725-$875


$280-$310


$1,000-$1,180

 


Actual Results


Six Months Ended
June 30, 2019


Year Ended
December 31, 2018


U.S.

Cellular


TDS

Telecom


TDS (1)


U.S.

Cellular


TDS

Telecom


TDS (1)

(Dollars in millions)












Net income (GAAP)

$

90



$

56



$

109



$

164



$

89



$

175


Add back or deduct:












Income tax expense

41



18



50



51



16



46


Income before income taxes (GAAP)

$

131



$

74



$

159



$

215



$

105



$

221


Add back:












Interest expense

58



(1)



86



116



(2)



172


Depreciation, amortization and accretion expense

345



100



460



640



212



883


EBITDA (Non-GAAP) (2)

$

534



$

173



$

705



$

971



$

315



$

1,276


Add back or deduct:












(Gain) loss on asset disposals, net

7



(8)





10



(2)



9


(Gain) loss on sale of business and other exit costs, net

(2)





(2)








(Gain) loss on license sales and exchanges, net

(2)





(2)



(18)





(18)


Adjusted EBITDA (Non-GAAP) (2)

$

537



$

165



$

701



$

963



$

313



$

1,267


Deduct:












Equity in earnings of unconsolidated entities

84





85



159





160


Interest and dividend income

11



6



17



15



8



26


Other, net

(1)





1



(1)



2



2


Adjusted OIBDA (Non-GAAP) (2)

$

443



$

159



$

598



$

790



$

303



$

1,079



Numbers may not foot due to rounding.


(1)

The TDS column includes U.S. Cellular, TDS Telecom and also the impacts of consolidating eliminations, corporate operations and non-reportable segments.



(2)

EBITDA, Adjusted EBITDA and Adjusted OIBDA are defined as net income adjusted for the items set forth in the reconciliation above.  EBITDA, Adjusted EBITDA and Adjusted OIBDA are not measures of financial performance under Generally Accepted Accounting Principles in the United States (GAAP) and should not be considered as alternatives to Net income or Cash flows from operating activities, as indicators of cash flows or as measures of liquidity.  TDS does not intend to imply that any such items set forth in the reconciliation above are non-recurring, infrequent or unusual; such items may occur in the future.  Management uses Adjusted EBITDA and Adjusted OIBDA as measurements of profitability, and therefore reconciliations to Net income are deemed appropriate.  Management believes Adjusted EBITDA and Adjusted OIBDA are useful measures of TDS' operating results before significant recurring non-cash charges, gains and losses, and other items as presented above as they provide additional relevant and useful information to investors and other users of TDS' financial data in evaluating the effectiveness of its operations and underlying business trends in a manner that is consistent with management's evaluation of business performance.  Adjusted EBITDA shows adjusted earnings before interest, taxes, depreciation, amortization and accretion, and gains and losses, while Adjusted OIBDA reduces this measure further to exclude Equity in earnings of unconsolidated entities and Interest and dividend income in order to more effectively show the performance of operating activities excluding investment activities.  The table above reconciles EBITDA, Adjusted EBITDA and Adjusted OIBDA to the corresponding GAAP measure, Net income or Income before income taxes. Additional information and reconciliations related to Non-GAAP financial measures for June 30, 2019, can be found on TDS' website at investors.tdsinc.com.

Conference Call Information

TDS will hold a conference call on August 2, 2019 at 9:00 a.m. Central Time.

Before the call, certain financial and statistical information to be discussed during the call will be posted to investors.tdsinc.com. The call will be archived on the Events & Presentations page of investors.tdsinc.com.

About TDS

Telephone and Data Systems, Inc. (TDS), a Fortune 1000® company, provides wireless; cable and wireline broadband, video and voice; and hosted and managed services to approximately 6 million connections nationwide through its businesses, U.S. Cellular, TDS Telecom, BendBroadband and OneNeck IT Solutions. Founded in 1969 and headquartered in Chicago, TDS employed 9,400 people as of June 30, 2019.

Visit investors.tdsinc.com for comprehensive financial information, including earnings releases, quarterly and annual filings, shareholder information and more.

Safe Harbor Statement Under the Private Securities Litigation Reform Act of 1995: All information set forth in this news release, except historical and factual information, represents forward-looking statements. This includes all statements about the company's plans, beliefs, estimates, and expectations. These statements are based on current estimates, projections, and assumptions, which involve certain risks and uncertainties that could cause actual results to differ materially from those in the forward-looking statements. Important factors that may affect these forward-looking statements include, but are not limited to: intense competition; the ability to execute TDS' business strategy; uncertainties in TDS' future cash flows and liquidity and access to the capital markets; the ability to make payments on TDS and U.S. Cellular indebtedness or comply with the terms of debt covenants; impacts of any pending acquisitions/divestitures/exchanges of properties and/or licenses,  including, but not limited to, the ability to obtain regulatory approvals, successfully complete the transactions and the financial impacts of such transactions; the ability of the company to successfully manage and grow its markets; the access to and pricing of unbundled network elements; the ability to obtain or maintain roaming arrangements with other carriers on acceptable terms; the state and federal telecommunications regulatory environment; the value of assets and investments; adverse changes in the ratings of TDS and U.S. Cellular debt securities by accredited ratings organizations; industry consolidation; advances in telecommunications technology; pending and future litigation; changes in income tax rates, laws, regulations or rulings; changes in customer growth rates, average monthly revenue per user, churn rates, roaming revenue and terms, the availability of wireless devices, or the mix of services and products offered by U.S. Cellular and TDS Telecom. Investors are encouraged to consider these and other risks and uncertainties that are discussed in the Form 8-K Current Report used by TDS to furnish this press release to the Securities and Exchange Commission, which are incorporated by reference herein.

For more information about TDS and its subsidiaries, visit:
TDS: www.tdsinc.com
U.S. Cellular: www.uscellular.com
TDS Telecom: www.tdstelecom.com
OneNeck IT Solutions: www.oneneck.com

United States Cellular Corporation

Summary Operating Data (Unaudited)

As of or for the Quarter Ended

6/30/2019


3/31/2019


12/31/2018


9/30/2018


6/30/2018

Retail Connections










Postpaid










Total at end of period

4,414,000



4,440,000



4,472,000



4,466,000



4,468,000


Gross additions

137,000



137,000



179,000



172,000



146,000


Feature phones

5,000



4,000



4,000



3,000



5,000


Smartphones

97,000



98,000



132,000



130,000



106,000


Connected devices

35,000



35,000



43,000



39,000



35,000


Net additions (losses)

(26,000)



(32,000)



6,000



(1,000)



(13,000)


Feature phones

(10,000)



(13,000)



(11,000)



(14,000)



(12,000)


Smartphones

(1,000)



(1,000)



31,000



29,000



17,000


Connected devices

(15,000)



(18,000)



(14,000)



(16,000)



(18,000)


ARPU (1)

$

45.90



$

45.44



$

45.58



$

45.31



$

44.74


ARPA (2)

$

119.46



$

118.84



$

119.60



$

119.42



$

118.57


Churn rate (3)

1.23

%


1.26

%


1.29

%


1.29

%


1.19

%

Handsets

0.97

%


0.99

%


1.00

%


1.02

%


0.92

%

Connected devices

3.01

%


3.08

%


3.20

%


3.04

%


2.85

%

Prepaid










Total at end of period

500,000



503,000



516,000



528,000



527,000


Gross additions

61,000



61,000



66,000



80,000



78,000


Net additions (losses)

(2,000)



(13,000)



(12,000)



1,000



2,000


ARPU (1)

$

34.43



$

33.44



$

32.80



$

32.09



$

32.32


Churn rate (3)

4.20

%


4.92

%


4.98

%


4.98

%


4.83

%

Total connections at end of period (4)

4,967,000



4,995,000



5,041,000



5,050,000



5,051,000


Market penetration at end of period










Consolidated operating population

31,310,000



31,310,000



31,469,000



31,469,000



31,469,000


Consolidated operating penetration (5)

16

%


16

%


16

%


16

%


16

%

Capital expenditures (millions)

$

195



$

102



$

242



$

118



$

86


Total cell sites in service

6,535



6,506



6,531



6,506



6,478


Owned towers

4,116



4,106



4,129



4,119



4,105




(1)

Average Revenue Per User (ARPU) - metric is calculated by dividing a revenue base by an average number of connections and by the number of months in the period.  These revenue bases and connection populations are shown below:


Postpaid ARPU consists of total postpaid service revenues and postpaid connections.


Prepaid ARPU consists of total prepaid service revenues and prepaid connections.



(2)

Average Revenue Per Account (ARPA) - metric is calculated by dividing total postpaid service revenues by the average number of postpaid accounts and by the number of months in the period.



(3)

Churn rate represents the percentage of the connections that disconnect service each month.  These rates represent the average monthly churn rate for each respective period.



(4)

Includes reseller and other connections.



(5)

Market penetration is calculated by dividing the number of wireless connections at the end of the period by the total population of consolidated operating markets as estimated by Nielsen.

 

TDS Telecom

Summary Operating Data (Unaudited)

As of or for the Quarter Ended

6/30/2019


3/31/2019


12/31/2018


9/30/2018


6/30/2018

TDS Telecom










Wireline










Residential connections










Voice (1)

269,000



271,100



274,100



278,400



282,200


Broadband (2)

240,200



236,100



235,400



237,100



234,300


Video (3)

56,200



54,300



54,000



53,100



51,500


Wireline residential connections

565,500



561,500



563,500



568,600



568,000












Total residential revenue per connection (4)

$

47.88



$

48.16



$

47.39



$

47.30



$

47.22












Commercial connections










Voice (1)

124,200



127,300



130,500



134,000



137,300


Broadband (2)

20,600



20,400



20,600



20,700



20,600


managedIP (5)

128,300



132,000



134,000



138,000



141,400


Video (3)

400



400



400



400



400


Wireline commercial connections

273,500



280,100



285,400



293,100



299,600












Total Wireline connections

839,000



841,500



848,900



861,700



867,700












Cable










Cable residential and commercial connections










Broadband (6)

172,600



171,100



167,400



163,600



159,400


Video (7)

100,300



101,400



102,900



102,100



101,600


Voice (8)

64,800



65,400



65,200



63,600



62,000


managedIP (5)

1,100



1,100



1,000



700



700


Total Cable connections

338,900



339,000



336,500



330,100



323,700



Numbers may not foot due to rounding.



(1)

The individual circuits connecting a customer to Wireline's central office facilities.



(2)

The number of Wireline customers provided high-capacity data circuits via various technologies, including DSL and dedicated internet circuit technologies.



(3)

The number of Wireline customers provided video services.



(4)

Total residential revenue per connection is calculated by dividing total Wireline residential revenue by the average number of Wireline residential connections and by the number of months in the period.



(5)

The number of telephone handsets, data lines and IP trunks providing communications using IP networking technology.



(6)

Billable number of lines into a building for high-speed data services.



(7)

Generally, a home or business receiving video programming counts as one video connection. In counting bulk residential or commercial connections, such as an apartment building or hotel, connections are counted based on the number of units/rooms within the building receiving service.



(8)

Billable number of lines into a building for voice services.

 

TDS Telecom

Capital Expenditures (Unaudited)

Quarter Ended

6/30/2019


3/31/2019


12/31/2018


9/30/2018


6/30/2018

(Dollars in millions)










Wireline

$

55



$

29



$

73



$

41



$

33


Cable

15



13



19



13



13


Total TDS Telecom

$

70



$

42



$

91



$

54



$

46



Numbers may not foot due to rounding.

 

Telephone and Data Systems, Inc.

Consolidated Statement of Operations Highlights

(Unaudited)






Three Months Ended
June 30,


Six Months Ended
June 30,


2019


2018


2019

vs. 2018


2019


2018


2019

vs. 2018

(Dollars and shares in millions, except per share amounts)












Operating revenues












U.S. Cellular

$

973



$

974




$

1,939



$

1,915



1

%

TDS Telecom

233



230



1

%


464



461



1

%

All Other (1)

55



51



6

%


115



104



11

%


1,261



1,255




2,518



2,480



2

%

Operating expenses












U.S. Cellular












Expenses excluding depreciation, amortization and accretion

761



769



(1)

%


1,496



1,492



Depreciation, amortization and accretion

177



159



11

%


345



317



8

%

(Gain) loss on asset disposals, net

5



1



N/M



7



2



N/M


(Gain) loss on sale of business and other exit costs, net





N/M



(2)





N/M


(Gain) loss on license sales and exchanges, net



(11)



N/M



(2)



(17)



88

%


943



918



3

%


1,844



1,794



3

%

TDS Telecom












Expenses excluding depreciation, amortization and accretion

155



158



(2)

%


305



308



(1)

%

Depreciation, amortization and accretion

50



53



(7)

%


100



107



(7)

%

(Gain) loss on asset disposals, net

(1)



1



N/M



(8)



1



N/M



204



212



(4)

%


398



417



(5)

%

All Other (1)












Expenses excluding depreciation and amortization

58



57



3

%


119



112



6

%

Depreciation and amortization

7



8



(6)

%


15



17



(4)

%

(Gain) loss on asset disposals, net

1





N/M



1





N/M



66



64



2

%


134



128



5

%

Total operating expenses

1,213



1,194



2

%


2,376



2,339



2

%

Operating income (loss)












U.S. Cellular

30



56



(45)

%


95



121



(21)

%

TDS Telecom

29



18



60

%


66



43



52

%

All Other (1)

(11)



(13)



14

%


(19)



(23)



20

%


48



61



(21)

%


142



141



1

%

Investment and other income (expense)












Equity in earnings of unconsolidated entities

41



40



2

%


85



78



9

%

Interest and dividend income

9



6



43

%


17



11



51

%

Interest expense

(43)



(43)



1

%


(86)



(86)



1

%

Other, net



1



N/M



1



2



N/M


Total investment and other income

7



4



54

%


17



5



N/M


Income before income taxes

55



65



(16)

%


159



146



9

%

Income tax expense

16



21



(23)

%


50



45



12

%

Net income

39



44



(12)

%


109



101



8

%

Less: Net income attributable to noncontrolling interests, net of tax

6



11



(44)

%


17



29



(41)

%

Net income attributable to TDS shareholders

$

33



$

33



(2)

%


$

92



$

72



28

%













Basic weighted average shares outstanding

114



112



2

%


114



112



2

%

Basic earnings per share attributable to TDS shareholders

$

0.29



$

0.30



(4)

%


$

0.81



$

0.65



25

%













Diluted weighted average shares outstanding

116



113



3

%


116



113



3

%

Diluted earnings per share attributable to TDS shareholders

$

0.28



$

0.29



(4)

%


$

0.78



$

0.63



24

%


N/M - Percentage change not meaningful.


Numbers may not foot due to rounding.


(1)

Consists of TDS corporate, intercompany eliminations and all other business operations not included in the U.S. Cellular and TDS Telecom segments.

 

Telephone and Data Systems, Inc.

Consolidated Statement of Cash Flows

(Unaudited)



Six Months Ended
June 30,


2019


2018

(Dollars in millions)




Cash flows from operating activities




Net income

$

109



$

101


Add (deduct) adjustments to reconcile net income to net cash flows from operating activities




Depreciation, amortization and accretion

460



441


Bad debts expense

50



43


Stock-based compensation expense

33



23


Deferred income taxes, net

40



25


Equity in earnings of unconsolidated entities

(85)



(78)


Distributions from unconsolidated entities

76



70


(Gain) loss on asset disposals, net



3


(Gain) loss on sale of business and other exit costs, net

(2)




(Gain) loss on license sales and exchanges, net

(2)



(17)


Other operating activities

3



2


Changes in assets and liabilities from operations




Accounts receivable

(2)



51


Equipment installment plans receivable

(11)



(47)


Inventory

(4)



(8)


Accounts payable

(9)



(50)


Customer deposits and deferred revenues

8



(25)


Accrued taxes

2



(5)


Other assets and liabilities

(74)



(66)


Net cash provided by operating activities

592



463






Cash flows from investing activities




Cash paid for additions to property, plant and equipment

(393)



(275)


Cash paid for acquisitions and licenses

(255)



(10)


Cash received from investments

11



100


Cash paid for investments

(11)




Cash received from divestitures and exchanges

32



21


Other investing activities



3


Net cash used in investing activities

(616)



(161)






Cash flows from financing activities




Repayment of long-term debt

(11)



(10)


TDS Common Shares reissued for benefit plans, net of tax payments

(6)



7


U.S. Cellular Common Shares reissued for benefit plans, net of tax payments

(8)




Dividends paid to TDS shareholders

(38)



(36)


Distributions to noncontrolling interests

(2)



(4)


Other financing activities

3



(4)


Net cash used in financing activities

(62)



(47)






Net increase (decrease) in cash, cash equivalents and restricted cash

(86)



255






Cash, cash equivalents and restricted cash




Beginning of period

927



622


End of period

$

841



$

877


 

Telephone and Data Systems, Inc.

Consolidated Balance Sheet Highlights

(Unaudited)


ASSETS






June 30, 2019 (1)


December 31, 2018

(Dollars in millions)




Current assets




Cash and cash equivalents

$

834



$

921


Short-term investments

18



17


Accounts receivable

1,082



1,099


Inventory, net

154



150


Prepaid expenses

95



103


Income taxes receivable

17



12


Other current assets

28



28


Total current assets

2,228



2,330






Assets held for sale



54






Licenses

2,478



2,195






Goodwill

509



509






Other intangible assets, net

241



253






Investments in unconsolidated entities

490



480






Property, plant and equipment, net

3,318



3,346






Operating lease right-of-use assets

963








Other assets and deferred charges

568



616






Total assets

$

10,795



$

9,783


 

Telephone and Data Systems, Inc.

Consolidated Balance Sheet Highlights

(Unaudited)


LIABILITIES AND EQUITY






June 30, 2019 (1)


December 31, 2018

(Dollars in millions, except per share amounts)




Current liabilities




Current portion of long-term debt

$

21



$

21


Accounts payable

367



365


Customer deposits and deferred revenues

205



197


Accrued interest

13



11


Accrued taxes

45



44


Accrued compensation

77



127


Short-term operating lease liabilities

112




Other current liabilities

85



114


Total current liabilities

925



879






Liabilities held for sale



1






Deferred liabilities and credits




Deferred income tax liability, net

681



640


Long-term operating lease liabilities

927




Other deferred liabilities and credits

450



541






Long-term debt, net

2,409



2,418






Noncontrolling interests with redemption features

10



11






Equity




TDS shareholders' equity




Series A Common and Common Shares, par value $.01 per share

1



1


Capital in excess of par value

2,438



2,432


Treasury shares, at cost

(488)



(519)


Accumulated other comprehensive loss

(10)



(10)


Retained earnings

2,684



2,656


Total TDS shareholders' equity

4,625



4,560






Noncontrolling interests

768



733






Total equity

5,393



5,293






Total liabilities and equity

$

10,795



$

9,783




(1)

As of January 1, 2019, TDS adopted the new lease accounting standard, ASC 842. Under this method, the new accounting standard is applied only to the most recent period presented. As a result, 2019 amounts include the impacts of ASC 842, but 2018 amounts remain as previously reported.

 

Balance Sheet Highlights

(Unaudited)




June 30, 2019


U.S.


TDS


TDS
Corporate


Intercompany


TDS


Cellular


Telecom


& Other


Eliminations


Consolidated

(Dollars in millions)










Cash and cash equivalents

$

528



$

26



$

280



$



$

834


Affiliated cash investments



499





(499)





$

528



$

525



$

280



$

(499)



$

834












Licenses, goodwill and other intangible assets

$

2,469



$

745



$

14



$



$

3,228


Investment in unconsolidated entities

450



4



46



(10)



490



$

2,919



$

749



$

60



$

(10)



$

3,718












Property, plant and equipment, net

$

2,154



$

1,047



$

117



$



$

3,318












Long-term debt, net:










Current portion

$

19



$

1



$

1



$



$

21


Non-current portion

1,596



2



811





2,409



$

1,615



$

3



$

812



$



$

2,430


 

TDS Telecom Highlights

(Unaudited)














Three Months Ended
June 30,


Six Months Ended
June 30,


2019


2018


2019 vs.
2018


2019


2018


2019 vs.
2018

(Dollars in millions)












Wireline












Operating revenues












Residential

$

81



$

80



1

%


$

162



$

160



1

%

Commercial

42



46



(8)

%


86



94



(9)

%

Wholesale

49



46



5

%


94



94



1

%

Total service revenues

172



173



(1)

%


342



348



(2)

%

Equipment and product sales





(36)

%


1



1



(28)

%


172



174



(1)

%


343



349



(2)

%

Operating expenses












Cost of services

64



67



(3)

%


127



131



(3)

%

Cost of equipment and products





(44)

%


1



1



(33)

%

Selling, general and administrative expenses

49



50



(1)

%


96



97



(1)

%

Expenses excluding depreciation, amortization and accretion

114



117



(3)

%


224



229



(2)

%

Depreciation, amortization and accretion

33



36



(8)

%


66



72



(9)

%

(Gain) loss on asset disposals, net

(1)



1



N/M



(8)



1



N/M



145



153



(5)

%


282



302



(7)

%

Operating income

$

27



$

21



29

%


$

61



$

47



30

%













Cable












Operating revenues












Residential

$

51



$

47



8

%


$

100



$

92



8

%

Commercial

11



10



9

%


21



20



8

%


62



57



9

%


121



112



8

%

Operating expenses












Cost of services

27



27





52



52




Selling, general and administrative expenses

15



15



5

%


30



28



6

%

Expenses excluding depreciation, amortization and accretion

42



41



2

%


82



80



2

%

Depreciation, amortization and accretion

17



18



(4)

%


34



35



(3)

%

(Gain) loss on asset disposals, net





(54)

%


1



1



(4)

%


59



59





117



116



1

%

Operating income (loss)

$

2



$

(3)



N/M



$

5



$

(4)



N/M














Total TDS Telecom operating income

$

29



$

18



60

%


$

66



$

43



52

%


N/M - Percentage change not meaningful.


Numbers may not foot due to rounding.

 

Telephone and Data Systems, Inc.

Financial Measures and Reconciliations


Free Cash Flow



Three Months Ended
June 30,


Six Months Ended
June 30,


2019


2018


2019


2018

(Dollars in millions)








Cash flows from operating activities (GAAP)

$

265



$

249



$

592



$

463


Less: Cash paid for additions to property, plant and equipment

239



145



393



275


Free cash flow (Non-GAAP) (1)

$

26



$

104



$

199



$

188




(1)

Free cash flow is a non-GAAP financial measure which TDS believes may be useful to investors and other users of its financial information in evaluating liquidity, specifically, the amount of net cash generated by business operations after deducting Cash paid for additions to property, plant and equipment.

EBITDA, Adjusted EBITDA and Adjusted OIBDA

The following tables reconcile EBITDA, Adjusted EBITDA and Adjusted OIBDA to the corresponding GAAP measures, Net income or Income (loss) before income taxes and Operating income (loss).


Three Months Ended
June 30,

TDS TELECOM

2019


2018

(Dollars in millions)




Net income (GAAP)

$

25



$

16


Add back:




Income tax expense

8



5


Interest expense

(1)




Depreciation, amortization and accretion

50



53


EBITDA (Non-GAAP)

82



74


Add back or deduct:




(Gain) loss on asset disposals, net

(1)



1


Adjusted EBITDA (Non-GAAP)

82



75


Deduct:




Interest and dividend income

3



2


Other, net



1


Adjusted OIBDA (Non-GAAP)

78



73


Deduct:




Depreciation, amortization and accretion

50



53


(Gain) loss on asset disposals, net

(1)



1


Operating income (GAAP)

$

29



$

18



Numbers may not foot due to rounding.




Three Months Ended
June 30,

WIRELINE

2019


2018

(Dollars in millions)




Income before income taxes (GAAP)

$

30



$

24


Add back:




Interest expense

(1)




Depreciation, amortization and accretion

33



36


EBITDA (Non-GAAP)

62



59


Add back or deduct:




(Gain) loss on asset disposals, net

(1)



1


Adjusted EBITDA (Non-GAAP)

62



59


Deduct:




Interest and dividend income

3



2


Other, net



1


Adjusted OIBDA (Non-GAAP)

59



57


Deduct:




Depreciation, amortization and accretion

33



36


(Gain) loss on asset disposals, net

(1)



1


Operating income (GAAP)

$

27



$

21



Numbers may not foot due to rounding.




Three Months Ended
June 30,

CABLE

2019


2018

(Dollars in millions)




Income (loss) before income taxes (GAAP)

$

3



$

(2)


Add back:




Depreciation, amortization and accretion

17



18


EBITDA (Non-GAAP)

20



15


Add back or deduct:




(Gain) loss on asset disposals, net




Adjusted EBITDA (Non-GAAP)

20



16


Deduct:




Interest and dividend income




Adjusted OIBDA (Non-GAAP)

20



16


Deduct:




Depreciation, amortization and accretion

17



18


(Gain) loss on asset disposals, net




Operating income (loss) (GAAP)

$

2



$

(3)



Numbers may not foot due to rounding.

 

Cision View original content:http://www.prnewswire.com/news-releases/tds-reports-second-quarter-2019-results-300895287.html

SOURCE Telephone and Data Systems, Inc.