Investing in our networks; Provides 2024 guidance
CHICAGO, Feb. 16, 2024 /PRNewswire/ —
As previously announced, TDS will hold a teleconference on February 16, 2024 at 9:00 a.m. CST. 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 $1,313 million for the fourth quarter of 2023, versus $1,357 million for the same period one year ago. Net income (loss) attributable to TDS common shareholders and related diluted earnings (loss) per share were $(523) million and $(4.64), respectively, for the fourth quarter of 2023 compared to $(43) million and $(0.38), respectively, in the same period one year ago.
Excluding a $547 million ($511 million, net of tax impacts) non-cash charge related to goodwill impairment recorded at TDS Telecom during the fourth quarter of 2023, net income (loss) available to TDS common shareholders and related diluted earnings (loss) per share for the fourth quarter of 2023 were $(12) million and $(0.11), respectively.
TDS reported total operating revenues of $5,160 million and $5,413 million for the years ended 2023 and 2022, respectively. Net income (loss) attributable to TDS common shareholders and related diluted earnings (loss) per share were $(569) million and $(5.06), respectively, for the year ended 2023 compared to $(7) million and $(0.07), respectively, for the year ended 2022.
Excluding a $547 million ($511 million, net of tax impacts) non-cash charge related to goodwill impairment recorded at TDS Telecom during the fourth quarter of 2023, net income (loss) available to TDS common shareholders and related diluted earnings (loss) per share for the year ended 2023 were $(58) million and $(0.53), respectively.
Full year 2023 Highlights*
UScellular
Postpaid ARPU grew 2%Delivering on growth initiatives Fixed wireless customers grew 46% to 114,000Tower rental revenues grew 8% to $100 millionIncreased profitabilityNet income, Adjusted OIBDA and Adjusted EBITDA upGenerated positive free cash flow and increased cash flows from operating activities Began launching 5G mid-band network – providing low latency and faster speeds
TDS Telecom
Exceeded full year 2023 fiber address goalDelivered 217,000 fiber service addressesExecuting on fiber broadband strategyExpanded its footprint 12% – increased total service addresses to 1.7 millionResidential broadband connections grew 6% and Residential revenue per connection grew 4%Total Wireline expansion residential revenues grew to $75 million
*Comparisons are Year Ended December 31, 2023 to Year Ended December 31, 2022
“In 2023, the TDS Family of Companies continued to make substantial investments in our businesses in order to improve our competitiveness,” said LeRoy T. Carlson, Jr., TDS President and CEO. “UScellular made significant progress on its 5G network, while TDS Telecom ended the year with all of its fiber expansion communities initially launched.
“UScellular increased Postpaid ARPU 2% and drove strong results in fixed wireless in 2023. It was a challenging year from a mobility subscriber standpoint as the environment remains competitive. UScellular’s goal was to balance subscriber objectives with financial goals, which led to increased profitability year over year.
“In 2024, UScellular plans to continue focusing on improving customer results, growth in fixed wireless and towers, and maintaining financial discipline as we advance the network through mid-band deployment.
“In 2023, TDS Telecom delivered 217,000 marketable fiber service addresses, up 24% from the initial 2023 target. Residential broadband connections increased 6%, while residential revenue per connection grew 4%. With all markets launched, the team plans to focus on increasing broadband penetration and revenues across the fiber footprint. We expect this to result in improved profitability in 2024.”
Recent Development: On August 4, 2023, TDS and UScellular announced that the Boards of Directors of both companies decided to initiate a process to explore a range of strategic alternatives for UScellular. The process is still ongoing.
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 February 16, 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.
UScellular
2024 Estimated
Results
Actual Results for
the Year Ended
December 31, 2023
(Dollars in millions)
Service revenues
$2,950-$3,050
$3,044
Adjusted OIBDA1, 2
$750-$850
$818
Adjusted EBITDA1, 2
$920-$1,020
$986
Capital expenditures
$550-$650
$611
TDS Telecom
2024 Estimated
Results
Actual Results for
the Year Ended
December 31, 2023
(Dollars in millions)
Total operating revenues
$1,070-$1,100
$1,028
Adjusted OIBDA1
$310-$340
$279
Adjusted EBITDA1
$310-$340
$285
Capital expenditures
$310-$340
$577
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.
UScellular
TDS Telecom
2024 Estimated
Results2
Actual Results for
the Year Ended
December 31, 2023
2024 Estimated
Results2
Actual Results for
the Year Ended
December 31, 2023
(Dollars in millions)
Net income (loss) (GAAP)
N/A
$58
N/A
($483)
Add back:
Income tax expense
N/A
53
N/A
(26)
Income (loss) before income taxes (GAAP)
$40-$140
$111
$40-$70
($509)
Add back:
Interest expense
195
196
—
(8)
Depreciation, amortization and accretion expense
665
656
270
245
EBITDA (Non-GAAP)1
$900-$1,000
$963
$310-$340
($272)
Add back or deduct:
Expenses related to strategic alternatives review
—
8
—
—
Loss on impairment of goodwill
—
—
—
547
(Gain) loss on asset disposals, net
20
17
—
10
(Gain) loss on license sales and exchanges, net
—
(2)
—
—
Adjusted EBITDA (Non-GAAP)1
$920-$1,020
$986
$310-$340
$285
Deduct:
Equity in earnings of unconsolidated entities
160
158
—
—
Interest and dividend income
10
10
—
4
Other, net
—
—
—
2
Adjusted OIBDA (Non-GAAP)1
$750-$850
$818
$310-$340
$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 (loss) or Income (loss) before income taxes. Additional information and reconciliations related to Non-GAAP financial measures for December 31, 2023, 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 February 16, 2024 at 9:00 a.m. Central Time.
Access the live call on the Events & Presentations page of investors.tdsinc.com or at https://events.q4inc.com/attendee/105947395Access the call by phone at (888) 330-2384 (US/Canada), passcode: 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 8,800 people as of December 31, 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; 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; 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.
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
12/31/2023
9/30/2023
6/30/2023
3/31/2023
12/31/2022
Retail Connections
Postpaid
Total at end of period
4,106,000
4,159,000
4,194,000
4,223,000
4,247,000
Gross additions
129,000
128,000
125,000
137,000
154,000
Handsets
80,000
84,000
83,000
93,000
105,000
Connected devices
49,000
44,000
42,000
44,000
49,000
Net additions (losses)
(50,000)
(35,000)
(28,000)
(24,000)
(17,000)
Handsets
(53,000)
(38,000)
(29,000)
(25,000)
(20,000)
Connected devices
3,000
3,000
1,000
1,000
3,000
ARPU1
$ 51.61
$ 51.11
$ 50.64
$ 50.66
$ 50.60
ARPA2
$ 131.63
$ 130.91
$ 130.19
$ 130.77
$ 130.97
Handset upgrade rate3
5.8 %
4.5 %
4.8 %
4.9 %
7.0 %
Churn rate4
1.44 %
1.30 %
1.21 %
1.27 %
1.35 %
Handsets
1.22 %
1.11 %
1.01 %
1.06 %
1.12 %
Connected devices
3.03 %
2.64 %
2.65 %
2.78 %
2.99 %
Prepaid
Total at end of period
451,000
462,000
462,000
470,000
493,000
Gross additions
43,000
52,000
50,000
43,000
61,000
Net additions (losses)
(11,000)
—
(8,000)
(23,000)
—
ARPU1, 5
$ 32.32
$ 33.44
$ 33.86
$ 33.19
$ 33.34
Churn rate4
3.87 %
3.68 %
4.18 %
4.63 %
4.11 %
Market penetration at end of period
Consolidated operating population
32,350,000
32,350,000
32,350,000
32,350,000
32,370,000
Consolidated operating penetration6
15 %
15 %
15 %
15 %
15 %
Capital expenditures (millions)
$ 148
$ 111
$ 143
$ 208
$ 176
Total cell sites in service
7,000
6,973
6,952
6,950
6,945
Owned towers
4,373
4,356
4,341
4,338
4,336
Due to rounding, the sum of quarterly results may not equal the total for the year.
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
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.
6
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
12/31/2023
9/30/2023
6/30/2023
3/31/2023
12/31/2022
Residential connections
Broadband
Wireline, Incumbent
244,800
248,800
249,200
247,900
249,100
Wireline, Expansion
92,200
79,400
70,200
62,800
56,100
Cable
202,900
204,400
204,200
204,700
204,800
Total Broadband
539,800
532,600
523,600
515,400
510,000
Video
131,500
132,400
132,300
132,600
135,300
Voice
281,600
284,000
288,200
289,200
291,600
Total Residential connections
952,900
949,000
944,100
937,200
936,900
Commercial connections
210,200
217,400
223,300
229,800
236,000
Total connections
1,163,100
1,166,400
1,167,400
1,167,000
1,173,000
Residential revenue per connection1
$ 62.74
$ 62.15
$ 61.97
$ 60.24
$ 59.91
Capital expenditures (millions)
$ 143
$ 172
$ 132
$ 130
$ 165
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
December 31,
Year Ended
December 31,
2023
2022
2023
vs. 2022
2023
2022
2023
vs. 2022
(Dollars and shares in millions, except per share amounts)
Operating revenues
UScellular
$ 1,000
$ 1,048
(5) %
$ 3,906
$ 4,169
(6) %
TDS Telecom
261
257
2 %
1,028
1,020
1 %
All Other1
52
52
(1) %
226
224
1 %
1,313
1,357
(3) %
5,160
5,413
(5) %
Operating expenses
UScellular
Expenses excluding depreciation, amortization and accretion
812
885
(8) %
3,096
3,379
(8) %
Depreciation, amortization and accretion
166
179
(8) %
656
700
(6) %
Loss on impairment of licenses
—
—
—
—
3
N/M
(Gain) loss on asset disposals, net
3
11
(67) %
17
19
(9) %
(Gain) loss on sale of business and other exit costs, net
—
—
N/M
—
(1)
N/M
(Gain) loss on license sales and exchanges, net
(2)
—
N/M
(2)
—
N/M
979
1,075
(9) %
3,767
4,100
(8) %
TDS Telecom
Expenses excluding depreciation, amortization and accretion
186
192
(4) %
749
732
2 %
Depreciation, amortization and accretion
65
56
17 %
245
215
14 %
Loss on impairment of goodwill
547
—
N/M
547
—
N/M
(Gain) loss on asset disposals, net
1
3
(59) %
10
7
31 %
799
252
N/M
1,551
954
63 %
All Other1
Expenses excluding depreciation and amortization
56
52
8 %
242
222
9 %
Depreciation and amortization
3
3
(6) %
14
14
(2) %
(Gain) loss on asset disposals, net
—
—
N/M
—
1
(95) %
59
56
7 %
256
237
8 %
Total operating expenses
1,837
1,383
33 %
5,574
5,291
5 %
Operating income (loss)
UScellular
21
(27)
N/M
139
69
N/M
TDS Telecom
(538)
5
N/M
(523)
66
N/M
All Other1
(7)
(4)
N/M
(30)
(13)
N/M
(524)
(26)
N/M
(414)
122
N/M
Investment and other income (expense)
Equity in earnings of unconsolidated entities
37
36
4 %
159
159
–
Interest and dividend income
4
7
(41) %
20
17
19 %
Interest expense
(66)
(55)
(20) %
(244)
(174)
(40) %
Other, net
1
—
N/M
2
1
94 %
Total investment and other income (expense)
(24)
(12)
(96) %
(63)
3
N/M
Income (loss) before income taxes
(548)
(38)
N/M
(477)
125
N/M
Income tax expense (benefit)
(45)
(8)
N/M
10
53
(81) %
Net income (loss)
(503)
(30)
N/M
(487)
72
N/M
Less: Net income (loss) attributable to noncontrolling interests, net of tax
3
(4)
N/M
13
10
28 %
Net income (loss) attributable to TDS shareholders
(506)
(26)
N/M
(500)
62
N/M
TDS Preferred Share dividends
17
17
—
69
69
–
Net loss attributable to TDS common shareholders
$ (523)
$ (43)
N/M
$ (569)
$ (7)
N/M
Basic weighted average shares outstanding
113
113
–
113
114
(1) %
Basic earnings (loss) per share attributable to TDS common shareholders
$ (4.64)
$ (0.38)
N/M
$ (5.05)
$ (0.07)
N/M
Diluted weighted average shares outstanding
113
113
–
113
114
(1) %
Diluted earnings (loss) per share attributable to TDS common shareholders
$ (4.64)
$ (0.38)
N/M
$ (5.06)
$ (0.07)
N/M
N/M – Percentage change not meaningful.
Numbers may not foot due to rounding.
1
Consists of TDS corporate, intercompany eliminations and other business operations not included in UScellular and TDS Telecom segments.
Telephone and Data Systems, Inc.
Consolidated Statement of Cash Flows
(Unaudited)
Year Ended December 31,
2023
2022
(Dollars in millions)
Cash flows from operating activities
Net income (loss)
$ (487)
$ 72
Add (deduct) adjustments to reconcile net income (loss) to net cash flows from operating activities
Depreciation, amortization and accretion
915
929
Bad debts expense
111
138
Stock-based compensation expense
41
42
Deferred income taxes, net
8
47
Equity in earnings of unconsolidated entities
(159)
(159)
Distributions from unconsolidated entities
150
145
Loss on impairment of intangible assets
547
3
(Gain) loss on asset disposals, net
27
27
(Gain) loss on sale of business and other exit costs, net
—
(1)
(Gain) loss on license sales and exchanges, net
(2)
—
Other operating activities
8
10
Changes in assets and liabilities from operations
Accounts receivable
2
(69)
Equipment installment plans receivable
(20)
(199)
Inventory
61
(90)
Accounts payable
(99)
32
Customer deposits and deferred revenues
(8)
48
Accrued taxes
50
127
Other assets and liabilities
(3)
53
Net cash provided by operating activities
1,142
1,155
Cash flows from investing activities
Cash paid for additions to property, plant and equipment
(1,211)
(1,161)
Cash paid for licenses and other intangible assets
(130)
(614)
Other investing activities
14
(8)
Net cash used in investing activities
(1,327)
(1,783)
Cash flows from financing activities
Issuance of long-term debt
1,081
1,154
Repayment of long-term debt
(723)
(332)
Issuance of short-term debt
—
110
Repayment of short-term debt
(60)
(50)
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)
(40)
Repurchase of UScellular Common Shares
—
(43)
Dividends paid to TDS shareholders
(153)
(151)
Payment of debt and equity issuance costs
(5)
(2)
Distributions to noncontrolling interests
(3)
(3)
Cash paid for software license agreements
(66)
(23)
Other financing activities
—
2
Net cash provided by financing activities
56
613
Net decrease in cash, cash equivalents and restricted cash
(129)
(15)
Cash, cash equivalents and restricted cash
Beginning of period
399
414
End of period
$ 270
$ 399
Telephone and Data Systems, Inc.
Consolidated Balance Sheet Highlights
(Unaudited)
ASSETS
December 31,
2023
2022
(Dollars in millions)
Current assets
Cash and cash equivalents
$ 236
$ 360
Accounts receivable, net
1,074
1,181
Inventory, net
208
268
Prepaid expenses
86
102
Income taxes receivable
4
59
Other current assets
52
58
Total current assets
1,660
2,028
Assets held for sale
15
26
Licenses
4,702
4,699
Goodwill
—
547
Other intangible assets, net
183
204
Investments in unconsolidated entities
505
495
Property, plant andequipment, net
5,062
4,760
Operating lease right-of-use assets
987
995
Other assets and deferred charges
807
796
Total assets
$ 13,921
$ 14,550
Telephone and Data Systems, Inc.
Consolidated Balance Sheet Highlights
(Unaudited)
LIABILITIES AND EQUITY
December 31,
2023
2022
(Dollars in millions, except per share amounts)
Current liabilities
Current portion of long-term debt
$ 26
$ 19
Accounts payable
360
506
Customer deposits and deferred revenues
277
285
Accrued interest
12
12
Accrued taxes
43
46
Accrued compensation
149
144
Short-term operating lease liabilities
147
146
Other current liabilities
170
356
Total current liabilities
1,184
1,514
Deferred liabilities and credits
Deferred income tax liability, net
975
969
Long-term operating lease liabilities
890
908
Other deferred liabilities and credits
784
813
Long-term debt, net
4,080
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
2,558
2,551
Preferred Shares, par value $0.01 per share
1,074
1,074
Treasury shares, at cost
(465)
(481)
Accumulated other comprehensive income
11
5
Retained earnings
2,023
2,699
Total TDS shareholders’ equity
5,202
5,849
Noncontrolling interests
794
754
Total equity
5,996
6,603
Total liabilities and equity
$ 13,921
$ 14,550
Balance Sheet Highlights
(Unaudited)
December 31, 2023
UScellular
TDS
Telecom
TDS Corporate
& Other
Intercompany
Eliminations
TDS
Consolidated
(Dollars in millions)
Cash and cash equivalents
$ 150
$ 37
$ 90
$ (41)
$ 236
Licenses and other intangible assets
$ 4,693
$ 187
$ 5
$ —
$ 4,885
Investment in unconsolidated entities
461
4
48
(8)
505
$ 5,154
$ 191
$ 53
$ (8)
$ 5,390
Property, plant and equipment, net
$ 2,576
$ 2,402
$ 84
$ —
$ 5,062
Long-term debt, net:
Current portion
$ 20
$ —
$ 6
$ —
$ 26
Non-current portion
3,044
3
1,033
—
4,080
$ 3,064
$ 3
$ 1,039
$ —
$ 4,106
TDS Telecom Highlights
(Unaudited)
Three Months Ended
December 31,
Year Ended
December 31,
2023
2022
2023 vs. 2022
2023
2022
2023 vs. 2022
(Dollars in millions)
Operating revenues
Residential
Wireline, Incumbent
$ 88
$ 87
1 %
$ 352
$ 350
1 %
Wireline, Expansion
23
14
61 %
75
49
53 %
Cable
69
67
2 %
273
270
1 %
Total residential
179
168
6 %
700
669
5 %
Commercial
37
43
(13) %
155
173
(10) %
Wholesale
45
45
(1) %
172
177
(3) %
Total service revenues
261
256
2 %
1,027
1,019
1 %
Equipment revenues
—
—
(22) %
1
1
(12) %
Total operating revenues
261
257
2 %
1,028
1,020
1 %
Cost of services
104
110
(5) %
423
418
1 %
Cost of equipment and products
—
—
N/M
—
1
(26) %
Selling, general and administrative expenses
82
83
(1) %
326
313
4 %
Depreciation, amortization and accretion
65
56
17 %
245
215
14 %
Loss on impairment of goodwill
547
—
N/M
547
—
N/M
(Gain) loss on asset disposals, net
1
3
(59) %
10
7
31 %
Total operating expenses
799
252
N/M
1,551
954
63 %
Operating income (loss)
$ (538)
$ 5
N/M
$ (523)
$ 66
N/M
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
December 31,
Year Ended
December 31,
TDS Consolidated
2023
2022
2023
2022
(Dollars in millions)
Cash flows from operating activities (GAAP)
$ 218
$ 255
$ 1,142
$ 1,155
Cash paid for additions to property, plant and equipment
(304)
(367)
(1,211)
(1,161)
Cash paid for software license agreements
(37)
(18)
(66)
(23)
Free cash flow (Non-GAAP)1
$ (123)
$ (130)
$ (135)
$ (29)
Three Months Ended
December 31,
Year Ended
December 31,
UScellular
2023
2022
2023
2022
(Dollars in millions)
Cash flows from operating activities (GAAP)
$ 148
$ 180
$ 866
$ 832
Cash paid for additions to property, plant and equipment
(155)
(192)
(608)
(602)
Cash paid for software license agreements
(37)
(17)
(66)
(22)
Free cash flow (Non-GAAP)1
$ (44)
$ (29)
$ 192
$ 208
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.
EBITDA, Adjusted EBITDA and Adjusted OIBDA
The following table reconciles EBITDA, Adjusted EBITDA and Adjusted OIBDA to the corresponding GAAP measures, Net income and Income before income taxes.
Year Ended December 31,
UScellular
2023
2022
(Dollars in millions)
Net income (GAAP)
$ 58
$ 35
Add back or deduct:
Income tax benefit
53
37
Income before income taxes (GAAP)
111
72
Add back:
Interest expense
196
163
Depreciation, amortization and accretion expense
656
700
EBITDA (Non-GAAP)
963
935
Add back or deduct:
Expenses related to strategic alternatives review
8
—
Loss on impairment of licenses
—
3
(Gain) loss on asset disposals, net
17
19
(Gain) loss on sale of business and other exit costs, net
—
(1)
(Gain) loss on license sales and exchanges, net
(2)
—
Adjusted EBITDA (Non-GAAP)
986
956
Deduct:
Equity in earnings of unconsolidated entities
158
158
Interest and dividend income
10
8
Adjusted OIBDA (Non-GAAP)
$ 818
$ 790
Net income excluding Goodwill impairment charge
The following non-GAAP financial measures present certain information in the table below excluding the effect of the goodwill impairment charge at TDS Telecom and related tax impacts. The goodwill impairment charge, which occurred in the fourth quarter of 2023, is being excluded in this presentation, as it is not related to the current operations of TDS. TDS believes these measures may be useful to investors and other users of its financial information when comparing the current period financial results with periods that were not impacted by such a charge.
Three Months Ended
December 31,
Year Ended
December 31,
2023
2022
2023
2022
(Dollars in millions)
Net loss attributable to TDS common shareholders (GAAP)
$ (523)
$ (43)
$ (569)
$ (7)
Adjustments:
Loss on impairment of goodwill
547
—
547
—
Deferred tax benefit on the tax-amortizable portion of the impaired Goodwill
(36)
—
(36)
—
Subtotal of Non-GAAP adjustments
511
—
511
—
Net loss attributable to TDS common shareholders excluding goodwill impairment
charge (Non-GAAP)
(12)
(43)
(58)
(7)
Noncontrolling interest adjustment to compute earnings (loss)
—
—
(1)
(1)
Net loss attributable to TDS common shareholders excluding goodwill impairment
charge used in diluted earnings (loss) per share (Non-GAAP)
$ (12)
$ (43)
$ (59)
$ (8)
Diluted weighted average shares outstanding
113
113
113
114
Diluted earnings (loss) per share attributable to TDS common shareholders (GAAP)
$ (4.64)
$ (0.38)
$ (5.06)
$ (0.07)
Adjustments:
Loss on impairment of goodwill
4.85
—
4.85
—
Deferred tax benefit on the tax-amortizable portion of the impaired Goodwill
(0.32)
—
(0.32)
—
Diluted earnings (loss) per share attributable to TDS common shareholders excluding
impairment of goodwill charge (Non-GAAP)
$ (0.11)
$ (0.38)
$ (0.53)
$ (0.07)
View original content:https://www.prnewswire.com/news-releases/tds-reports-fourth-quarter-and-full-year-2023-results-302063497.html
SOURCE Telephone and Data Systems, Inc.
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