Company Announcements

2024 Estimated Results

UScellular

Previous

Current

(Dollars in millions)

Service revenues

$2,950-$3,050

$2,950-$3,000

Adjusted OIBDA^{1, 2} (Non-GAAP)

$750-$850

$800-$875

Adjusted EBITDA^{1, 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

2024 Estimated Results²

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

September 30, 2024

Year Ended

December 31, 2023

UScellular

TDS

Telecom

UScellular

TDS

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.

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 period¹

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

ARPU²

$        52.04

$        51.45

$        51.96

$        51.61

$        51.11

ARPA³

$      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 period¹

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)

—

ARPU^{2, 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 Broadband¹

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 connection²

$           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

September 30,

Nine Months Ended

September 30,

2024

2023

2024

vs. 2023

2024

2023

2024

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 Other¹

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 Other¹

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 Other¹

—

(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

September 30,

Nine Months Ended
September 30,

UScellular

2024

2023

2024
vs. 2023

2024

2023

2024
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
September 30,

Nine Months Ended
September 30,

UScellular Wireless

2024

2023

2024
vs. 2023

2024

2023

2024
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
accretion reported below)

193

199

(3) %

582

597

(2) %

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

September 30,

Nine Months Ended
September 30,

UScellular Towers

2024

2023

2024
vs. 2023

2024

2023

2024
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
accretion reported below)

20

18

10 %

58

55

4 %

Selling, general and administrative

8

9

(14) %

24

25

(7) %