Related Quotes  Telephone and Data Systems Inc Common S  34.09   0.91  2.74%  Enter Symbols:       TDS reports second quarter 2024 results CHICAGO, Aug. 2, 2024 /PRNewswire/ -- As previously announced, TDS will hold a teleconference on August 2, 2024, at 9:00 a.m. CDT. Listen to the call live via the Events & Presentations page of investors.tdsinc.com. Telephone and Data Systems, Inc. (NYSE:TDS) reported total operating revenues of $1,238 million for the second quarter of 2024, versus $1,267 million for the same period one year ago. Net income (loss) attributable to TDS common shareholders and related diluted earnings (loss) per share were $(14) million and $(0.13), respectively, for the second quarter of 2024 compared to $(19) million and $(0.17), respectively, in the same period one year ago. 2Q 2024 Highlights* UScellular Announced sale of wireless operations and select spectrum assets Now reporting Wireless and Towers segments Wireless Sequential improvement in postpaid gross additions and postpaid net losses Postpaid ARPU grew 2%; service revenues decreased 2% Towers Third-party tower revenues increased 1% Fixed wireless customers grew 40% to 134,000 Strong cost management led to increased operating income, net income and Adjusted OIBDA TDS Telecom Making progress on goal to deliver 125,000 fiber service addresses in 2024 Grew total year over year service address footprint 10% Delivered 27,000 fiber services addresses in Q2 Operating revenues grew 4%; residential revenue growth of 7% Residential broadband connections grew 5% due to broadband investments Residential ARPU grew 5% due to price increases Strong net income and Adjusted EBITDA growth Good expense discipline * Comparisons are 2Q'23 to 2Q'24 unless otherwise noted "TDS is working to optimize our portfolio of businesses to position the Company for future success," said LeRoy T. Carlson, Jr., TDS President and CEO. "During the second quarter, we announced transactions regarding both UScellular and OneNeck IT Solutions that we anticipate will accelerate achievement of our strategic objectives. We remain focused on effectively operating all our businesses and serving our customers with high-quality communications services, while we work towards successfully closing these transactions and enhancing the performance of our ongoing businesses. "In Q2, UScellular remained focused on balancing subscriber growth with financial discipline and reported solid ARPU growth, good expense discipline, and improved profitability - all combining to generate higher free cash flow. While postpaid handset subscribers declined in the quarter, UScellular saw a return to subscriber growth in prepaid and steady growth in fixed wireless. "TDS Telecom reported another quarter of notable growth in revenue and profitability as a result of its broadband investments. TDS Telecom added an additional 27,000 marketable fiber service addresses and is making good progress on its long-term goal of 1.2 million marketable fiber service addresses." Announced Transaction and Exploration of Strategic Alternatives for UScellular On May 28, 2024, Telephone and Data Systems, Inc. (TDS) and UScellular announced that they have entered into a definitive agreement to sell UScellular's wireless operations and select spectrum assets to T-Mobile. The transaction is expected to close in mid-2025, subject to regulatory approvals and the satisfaction of customary closing conditions. UScellular retains its nearly 4,400 owned towers, its equity method investments, and approximately 70% of its spectrum assets. The strategic alternatives review process is ongoing as UScellular seeks to opportunistically monetize its spectrum assets that are not subject to the T-Mobile transaction. 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 August 2, 2024 and should not be assumed to be current as of any future date. TDS undertakes no duty to update such estimates, whether as a result of new information, future events, or otherwise. There can be no assurance that final results will not differ materially from estimated results. 2024 Estimated Results UScellular Previous Current (Dollars in millions) Service revenues $2,950-$3,050 Unchanged Adjusted OIBDA1, 2 $750-$850 Unchanged Adjusted EBITDA1, 2 $920-$1,020 Unchanged Capital expenditures $550-$650 Unchanged TDS Telecom Previous Current (Dollars in millions) Total operating revenues $1,070-$1,100 $1,050-$1,080 Adjusted OIBDA1 $310-$340 $330-$360 Adjusted EBITDA1 $310-$340 $330-$360 Capital expenditures $310-$340 Unchanged The following tables reconcile EBITDA, Adjusted EBITDA and Adjusted OIBDA to the corresponding GAAP measures, Net income or Income before income taxes. In providing 2024 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. 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 before income taxes (GAAP) $60-$160 $60-$90 Add back: Interest expense 185 - Depreciation, amortization and accretion expense 660 270 EBITDA (Non-GAAP)1 $905-$1,005 $330-$360 Add back or deduct: (Gain) loss on asset disposals, net 15 - Adjusted EBITDA (Non-GAAP)1 $920-$1,020 $330-$360 Deduct: Equity in earnings of unconsolidated entities 155 - Interest and dividend income 15 - Adjusted OIBDA (Non-GAAP)1 $750-$850 $330-$360 Actual Results Six Months Ended June 30, 2024 Year Ended December 31, 2023 UScellular TDS Telecom UScellular TDS Telecom (Dollars in millions) Net income (loss) (GAAP) $ 42 $ 42 $ 58 $ (483) Add back: Income tax expense (benefit) 41 10 53 (26) Income (loss) before income taxes (GAAP) $ 83 $ 52 $ 111 $ (509) Add back: Interest expense 91 (2) 196 (8) Depreciation, amortization and accretion expense 329 131 656 245 EBITDA (Non-GAAP)1 $ 503 $ 181 $ 963 $ (272) Add back or deduct: Expenses related to strategic alternatives review 21 - 8 - Loss on impairment of goodwill - - - 547 (Gain) loss on asset disposals, net 11 6 17 10 (Gain) loss on license sales and exchanges, net 7 - (2) - Adjusted EBITDA (Non-GAAP)1 $ 542 $ 187 $ 986 $ 285 Deduct: Equity in earnings of unconsolidated entities 80 - 158 - Interest and dividend income 6 2 10 4 Other, net - 2 - 2 Adjusted OIBDA (Non-GAAP)1 $ 456 $ 183 $ 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 June 30, 2024, can be found on TDS' website at investors.tdsinc.com. 2 2024 Estimated Results do not reflect any anticipated costs, expenses or results of the strategic alternatives review referenced above. Conference Call Information TDS will hold a conference call on August 2, 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/870908711 Access the call by phone at (888)330-2384, conference ID: 1328528. Before the call, certain financial and statistical information to be discussed during the call will be posted to investors.tdsinc.com. The call will be archived on the Events & Presentations page of investors.tdsinc.com. About TDS Telephone and Data Systems, Inc. (TDS) provides wireless; broadband, video and voice; 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 8,500 associates as of June 30, 2024. Visit investors.tdsinc.com for comprehensive financial information, including earnings releases, quarterly and annual filings, shareholder information and more. Safe Harbor Statement Under the Private Securities Litigation Reform Act of 1995: All information set forth in this news release, except historical and factual information, represents forward-looking statements. This includes all statements about the company's plans, beliefs, estimates, and expectations. These statements are based on current estimates, projections, and assumptions, which involve certain risks and uncertainties that could cause actual results to differ materially from those in the forward-looking statements. Important factors that may affect these forward-looking statements include, but are not limited to: whether the announced transaction whereby UScellular has agreed to sell its wireless operations and selected spectrum assets to T-Mobile will be successfully completed or whether UScellular will be able to find buyers at mutually agreeable prices for its spectrum assets that are not subject to the agreement with T-Mobile; whether any such strategic alternative will result in additional value for TDS or its shareholders and whether the process will have an adverse impact on TDS' businesses; strategic decisions regarding the tower business; intense competition; the ability to obtain or maintain roaming arrangements with other carriers on acceptable terms and changes in roaming practices; the ability to obtain access to adequate radio spectrum to meet current or anticipated future needs, including participation in FCC auctions; the ability to attract people of outstanding talent throughout all levels of the organization; TDS' smaller scale relative to larger competitors; changes in demand, consumer preferences and perceptions, price competition, or churn rates; advances in technology; impacts of costs, integration problems or other factors associated with acquisitions, divestitures or exchanges of properties or wireless spectrum licenses and/or expansion of TDS' businesses; the ability of the company to successfully construct and manage its networks; difficulties involving third parties with which TDS does business; uncertainties in TDS' future cash flows and liquidity and access to the capital markets; the ability to make payments on TDS and UScellular indebtedness or comply with the terms of debt covenants; the effect on TDS' business if the collateral securing its secured term loan is foreclosed upon; conditions in the U.S. telecommunications industry; the value of assets and investments; the state and federal regulatory environment, including changes in regulatory support received and the ability to pass through certain regulatory fees to customers; pending and future litigation; cyber-attacks or other breaches of network or information technology security; control by the TDS Voting Trust; disruption in credit or other financial markets; deterioration of U.S. or global economic conditions; and the impact, duration and severity of public health emergencies. Investors are encouraged to consider these and other risks and uncertainties that are more fully described under "Risk Factors" in the most recent filing of TDS' Form 10-K, as updated by any TDS Form 10-Q filed subsequent to such Form 10-K. For more information about TDS and its subsidiaries, visit: TDS: www.tdsinc.com UScellular: www.uscellular.com TDS Telecom: www.tdstelecom.com OneNeck IT Solutions: www.oneneck.com United States Cellular Corporation Summary Operating Data (Unaudited) As of or for the Quarter Ended 6/30/2024 3/31/2024 12/31/2023 9/30/2023 6/30/2023 Retail Connections Postpaid Total at end of period1 4,027,000 4,051,000 4,106,000 4,159,000 4,194,000 Gross additions 117,000 106,000 129,000 128,000 125,000 Handsets 73,000 63,000 80,000 84,000 83,000 Connected devices 44,000 43,000 49,000 44,000 42,000 Net additions (losses)1 (24,000) (44,000) (50,000) (35,000) (28,000) Handsets (29,000) (47,000) (53,000) (38,000) (29,000) Connected devices 5,000 3,000 3,000 3,000 1,000 ARPU2 $ 51.45 $ 51.96 $ 51.61 $ 51.11 $ 50.64 ARPA3 $ 130.41 $ 132.00 $ 131.63 $ 130.91 $ 130.19 Handset upgrade rate4 4.1 % 4.5 % 5.8 % 4.5 % 4.8 % Churn rate5 1.16 % 1.22 % 1.44 % 1.30 % 1.21 % Handsets 0.97 % 1.03 % 1.22 % 1.11 % 1.01 % Connected devices 2.47 % 2.52 % 3.03 % 2.64 % 2.65 % Prepaid Total at end of period1 439,000 436,000 451,000 462,000 462,000 Gross additions 50,000 41,000 43,000 52,000 50,000 Net additions (losses)1 3,000 (13,000) (11,000) - (8,000) ARPU2, 6 $ 32.37 $ 32.25 $ 32.32 $ 33.44 $ 33.86 Churn rate5 3.60 % 4.06 % 3.87 % 3.68 % 4.18 % Market penetration at end of period Consolidated operating population 32,550,000 32,550,000 32,350,000 32,350,000 32,350,000 Consolidated operating penetration7 15 % 14 % 15 % 15 % 15 % Capital expenditures (millions) $ 165 $ 131 $ 148 $ 111 $ 143 Total cell sites in service 6,990 6,995 7,000 6,973 6,952 Owned towers 4,388 4,382 4,373 4,356 4,341 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: o Postpaid ARPU consists of total postpaid service revenues and postpaid connections. o 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. TDS Telecom Summary Operating Data (Unaudited) As of or for the Quarter Ended 6/30/2024 3/31/2024 12/31/2023 9/30/2023 6/30/2023 Residential connections Broadband Incumbent 243,700 245,100 244,800 248,800 249,200 Expansion 107,800 100,400 92,200 79,400 70,200 Cable 198,500 202,400 202,900 204,400 204,200 Total Broadband1 550,000 547,900 539,800 532,600 523,600 Video 124,800 128,800 131,500 132,400 132,300 Voice 275,600 279,400 281,600 284,000 288,200 Total Residential connections 950,400 956,100 952,900 949,000 944,100 Commercial connections 201,500 206,200 210,200 217,400 223,300 Total connections 1,152,000 1,162,200 1,163,100 1,166,400 1,167,400 Residential revenue per connection2 $ 65.26 $ 64.58 $ 62.74 $ 62.15 $ 61.97 Capital expenditures (millions) $ 78 $ 87 $ 143 $ 172 $ 132 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 June 30, Six Months Ended June 30, 2024 2023 2024 vs. 2023 2024 2023 2024 vs. 2023 (Dollars and shares in millions, except per share amounts) Operating revenues UScellular $ 927 $ 957 (3) % $ 1,877 $ 1,942 (3) % TDS Telecom 267 257 4 % 534 510 5 % All Other1 44 53 (19) % 89 118 (24) % 1,238 1,267 (2) % 2,500 2,570 (3) % Operating expenses UScellular Expenses excluding depreciation, amortization and accretion 713 759 (6) % 1,442 1,538 (6) % Depreciation, amortization and accretion 165 161 2 % 329 330 - (Gain) loss on asset disposals, net 5 3 49 % 11 13 (19) % (Gain) loss on license sales and exchanges, net 8 - N/M 7 - N/M 891 923 (3) % 1,789 1,881 (5) % TDS Telecom Expenses excluding depreciation, amortization and accretion 178 189 (6) % 351 374 (6) % Depreciation, amortization and accretion 67 60 11 % 131 119 10 % (Gain) loss on asset disposals, net 4 2 N/M 6 3 N/M 248 251 (1) % 488 496 (1) % All Other1 Expenses excluding depreciation and amortization 58 56 - 111 124 (11) % Depreciation and amortization 1 4 (34) % 7 7 (24) % (Gain) loss on asset disposals, net - - (95) % (1) - N/M 60 60 (2) % 117 131 (11) % Total operating expenses 1,199 1,234 (3) % 2,394 2,508 (5) % Operating income (loss) UScellular 36 34 6 % 88 61 44 % TDS Telecom 19 7 N/M 46 15 N/M All Other1 (16) (8) N/M (28) (14) N/M 39 33 17 % 106 62 72 % Investment and other income (expense) Equity in earnings of unconsolidated entities 39 38 3 % 82 82 - Interest and dividend income 7 6 28 % 12 11 13 % Interest expense (73) (62) (18) % (131) (116) (14) % Other, net 1 - N/M 2 1 N/M Total investment and other expense (26) (18) (42) % (35) (22) (62) % Income before income taxes 13 15 (13) % 71 40 77 % Income tax expense 6 15 (57) % 26 28 (8) % Net income 7 - N/M 45 12 N/M Less: Net income attributable to noncontrolling interests, net of tax 4 2 N/M 13 6 N/M Net income (loss) attributable to TDS shareholders 3 (2) N/M 32 6 N/M TDS Preferred Share dividends 17 17 - 35 35 - Net income (loss) attributable to TDS common shareholders $ (14) $ (19) 24 % $ (3) $ (29) 91 % Basic weighted average shares outstanding 114 113 1 % 113 113 1 % Basic earnings (loss) per share attributable to TDS common shareholders $ (0.13) $ (0.17) 25 % $ (0.02) $ (0.25) 91 % Diluted weighted average shares outstanding 114 113 1 % 113 113 1 % Diluted earnings (loss) per share attributable to TDS common shareholders $ (0.13) $ (0.17) 23 % $ (0.03) $ (0.25) 89 % 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, 2024 2023 (Dollars in millions) Cash flows from operating activities Net income $ 45 $ 12 Add (deduct) adjustments to reconcile net income to net cash flows from operating activities Depreciation, amortization and accretion 467 456 Bad debts expense 51 53 Stock-based compensation expense 29 14 Deferred income taxes, net 16 22 Equity in earnings of unconsolidated entities (82) (82) Distributions from unconsolidated entities 80 78 (Gain) loss on asset disposals, net 16 16 (Gain) loss on license sales and exchanges, net 7 - Other operating activities 5 4 Changes in assets and liabilities from operations Accounts receivable 6 19 Equipment installment plans receivable 5 7 Inventory 54 52 Accounts payable (14) (124) Customer deposits and deferred revenues 7 (9) Accrued taxes 7 56 Accrued interest 5 (1) Other assets and liabilities (78) (59) Net cash provided by operating activities 626 514 Cash flows from investing activities Cash paid for additions to property, plant and equipment (451) (629) Cash paid for intangible assets (15) (8) Other investing activities 1 8 Net cash used in investing activities (465) (629) Cash flows from financing activities Issuance of long-term debt 440 391 Repayment of long-term debt (401) (209) Repayment of short-term debt - (60) Tax payments for TDS stock-based compensation awards (10) (3) Tax payments for UScellular stock-based compensation awards (12) (6) Repurchase of TDS Common Shares - (6) Dividends paid to TDS shareholders (61) (76) Payment of debt issuance costs (16) - Distributions to noncontrolling interests (3) (2) Cash paid for software license agreements (21) (20) Other financing activities (1) - Net cash provided by (used in) financing activities (85) 9 Net increase (decrease) in cash, cash equivalents and restricted cash 76 (106) Cash, cash equivalents and restricted cash Beginning of period 270 399 End of period $ 346 $ 293 Telephone and Data Systems, Inc. Consolidated Balance Sheet Highlights (Unaudited) ASSETS June 30, 2024 December 31, 2023 (Dollars in millions) Current assets Cash and cash equivalents $ 322 $ 236 Accounts receivable, net 1,037 1,074 Inventory, net 148 208 Prepaid expenses 88 86 Income taxes receivable 4 4 Other current assets 42 52 Total current assets 1,641 1,660 Assets held for sale 120 15 Licenses 4,724 4,702 Other intangible assets, net 173 183 Investments in unconsolidated entities 507 505 Property, plant and equipment, net 4,988 5,062 Operating lease right-of-use assets 966 987 Other assets and deferred charges 753 807 Total assets $ 13,872 $ 13,921 Telephone and Data Systems, Inc. Consolidated Balance Sheet Highlights (Unaudited) LIABILITIES AND EQUITY June 30, 2024 December 31, 2023 (Dollars in millions, except per share amounts) Current liabilities Current portion of long-term debt $ 29 $ 26 Accounts payable 327 360 Customer deposits and deferred revenues 282 277 Accrued interest 17 12 Accrued taxes 43 43 Accrued compensation 94 149 Short-term operating lease liabilities 145 147 Other current liabilities 149 170 Total current liabilities 1,086 1,184 Liabilities held for sale 34 - Deferred liabilities and credits Deferred income tax liability, net 992 975 Long-term operating lease liabilities 873 890 Other deferred liabilities and credits 786 784 Long-term debt, net 4,103 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 2,542 2,558 Preferred Shares, par value $0.01 per share 1,074 1,074 Treasury shares, at cost (437) (465) Accumulated other comprehensive income 11 11 Retained earnings 1,957 2,023 Total TDS shareholders' equity 5,148 5,202 Noncontrolling interests 834 794 Total equity 5,982 5,996 Total liabilities and equity $ 13,872 $ 13,921 Balance Sheet Highlights (Unaudited) June 30, 2024 TDS TDS Corporate Intercompany TDS UScellular Telecom & Other Eliminations Consolidated (Dollars in millions) Cash and cash equivalents $ 195 $ 58 $ 125 $ (56) $ 322 Licenses and other intangible assets $ 4,715 $ 177 $ 5 $ - $ 4,897 Investment in unconsolidated entities 461 4 49 (7) 507 $ 5,176 $ 181 $ 54 $ (7) $ 5,404 Property, plant and equipment, net $ 2,540 $ 2,429 $ 19 $ - $ 4,988 Long-term debt, net: Current portion $ 20 $ - $ 9 $ - $ 29 Non-current portion 2,887 3 1,213 - 4,103 $ 2,907 $ 3 $ 1,222 $ - $ 4,132 United States Cellular Corporation Segment Results (Unaudited) Three Months Ended June 30, Six Months Ended June 30, UScellular 2024 2023 2024 vs. 2023 2024 2023 2024 vs. 2023 (Dollars in millions) Operating Revenues Wireless $ 902 $ 932 (3) % $ 1,826 $ 1,892 (3) % Towers 58 57 3 % 116 113 3 % Intra-company eliminations (33) (32) (4) % (65) (63) (3) % Total operating revenues 927 957 (3) % 1,877 1,942 (3) % Operating expenses Wireless 885 916 (3) % 1,779 1,868 (5) % Towers 39 39 1 % 75 76 (1) % Intra-company eliminations (33) (32) (4) % (65) (63) (3) % Total operating expenses 891 923 (3) % 1,789 1,881 (5) % Operating income $ 36 $ 34 6 % $ 88 $ 61 44 % Adjusted OIBDA (Non-GAAP) $ 227 $ 198 14 % $ 456 $ 404 13 % Adjusted EBITDA (Non-GAAP) $ 268 $ 239 13 % $ 542 $ 491 10 % Capital expenditures $ 165 $ 143 15 % $ 295 $ 351 (16) % Three Months Ended June 30, Six Months Ended June 30, UScellular Wireless 2024 2023 2024 vs. 2023 2024 2023 2024 vs. 2023 (Dollars in millions) Retail service $ 666 $ 686 (3) % $ 1,344 $ 1,378 (2) % Other 52 49 7 % 102 99 3 % Service revenues 718 735 (2) % 1,446 1,477 (2) % Equipment sales 184 197 (6) % 380 415 (9) % Total operating revenues 902 932 (3) % 1,826 1,892 (3) % System operations (excluding Depreciation, amortization and accretion reported below) 194 203 (4) % 390 398 (2) % Cost of equipment sold 211 228 (7) % 427 480 (11) % Selling, general and administrative 313 333 (6) % 637 670 (5) % Depreciation, amortization and accretion 154 149 3 % 308 307 - (Gain) loss on asset disposals, net 5 3 40 % 10 13 (23) % (Gain) loss on license sales and exchanges, net 8 - N/M 7 - N/M Total operating expenses 885 916 (3) % 1,779 1,868 (5) % Operating income $ 17 $ 16 5 % $ 47 $ 24 97 % Adjusted OIBDA (Non-GAAP) $ 196 $ 168 16 % $ 392 $ 344 14 % Adjusted EBITDA (Non-GAAP) $ 196 $ 168 16 % $ 392 $ 344 14 % Capital expenditures $ 160 $ 140 13 % $ 286 $ 346 (17) % N/M - Percentage change not meaningful United States Cellular Corporation Segment Results (Unaudited) Three Months Ended June 30, Six Months Ended June 30, UScellular Towers 2024 2023 2024 vs. 2023 2024 2023 2024 vs. 2023 (Dollars in millions) Third-party revenues $ 25 $ 25 1 % $ 51 $ 50 2 % Intra-company revenues 33 32 4 % 65 63 3 % Total tower revenues 58 57 3 % 116 113 3 % System operations (excluding Depreciation, amortization and accretion reported below) 19 19 (1) % 37 37 1 % Selling, general and administrative 9 8 8 % 16 16 (3) % Depreciation, amortization and accretion 11 12 (5) % 21 23 (5) % (Gain) loss on asset disposals, net - - N/M 1 - N/M Total operating expenses 39 39 1 % 75 76 (1) % Operating income $ 19 $ 18 7 % $ 41 $ 37 10 % Adjusted OIBDA (Non-GAAP) $ 31 $ 30 6 % $ 64 $ 60 7 % Adjusted EBITDA (Non-GAAP) $ 31 $ 30 6 % $ 64 $ 60 7 % Capital expenditures $ 5 $ 3 N/M $ 9 $ 5 89 % N/M - Percentage change not meaningful TDS Telecom Highlights (Unaudited) Three Months Ended June 30, Six Months Ended June 30, 2024 2023 2024 vs. 2023 2024 2023 2024 vs. 2023 (Dollars in millions) Operating revenues Residential Incumbent $ 90 $ 89 1 % $ 180 $ 175 3 % Expansion 28 18 60 % 54 33 65 % Cable 69 68 1 % 138 136 2 % Total residential 186 175 7 % 372 344 8 % Commercial 37 39 (6) % 74 80 (8) % Wholesale 44 43 2 % 88 86 2 % Total service revenues 267 257 4 % 534 510 5 % Equipment revenues - - 19 % - - (12) % Total operating revenues 267 257 4 % 534 510 5 % Cost of services 98 108 (9) % 196 212 (8) % Cost of equipment and products - - (28) % - - (7) % Selling, general and administrative expenses 80 81 (2) % 155 162 (4) % Depreciation, amortization and accretion 67 60 11 % 131 119 10 % (Gain) loss on asset disposals, net 4 2 N/M 6 3 N/M Total operating expenses 248 251 (1) % 488 496 (1) % Operating income $ 19 $ 7 N/M $ 46 $ 15 N/M N/M - Percentage change not meaningful Numbers may not foot due to rounding. Telephone and Data Systems, Inc. Free Cash Flow (Unaudited) Three Months Ended June 30, Six Months Ended June 30, TDS - CONSOLIDATED 2024 2023 2024 2023 (Dollars in millions) Cash flows from operating activities (GAAP) $ 403 $ 469 $ 626 $ 514 Cash paid for additions to property, plant and equipment (216) (298) (451) (629) Cash paid for software license agreements (11) (12) (21) (20) Free cash flow (Non-GAAP)1 $ 176 $ 159 $ 154 $ (135) Three Months Ended June 30, Six Months Ended June 30, UScellular 2024 2023 2024 2023 (Dollars in millions) Cash flows from operating activities (GAAP) $ 313 $ 349 $ 516 $ 390 Cash paid for additions to property, plant and equipment (137) (155) (270) (351) Cash paid for software license agreements (11) (12) (20) (19) Free cash flow (Non-GAAP)1 $ 165 $ 182 $ 226 $ 20 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. Telephone and Data Systems, Inc. EBITDA, Adjusted EBITDA and Adjusted OIBDA (Unaudited) The following tables reconcile EBITDA, Adjusted EBITDA and Adjusted OIBDA to the corresponding GAAP measures, Net income, Income before income taxes and/or Operating income. Income and expense items below Operating income are not provided at the individual segment level for UScellular Wireless and UScellular Towers; therefore, the reconciliations begin with EBITDA and the most comparable GAAP measure is Operating income rather than Net income at the segment level. Three Months Ended June 30, TDS - CONSOLIDATED 2024 2023 (Dollars in millions) Net income (GAAP) $ 7 $ - Add back: Income tax expense 6 15 Income before income taxes (GAAP) 13 15 Add back: Interest expense 73 62 Depreciation, amortization and accretion 233 225 EBITDA (Non-GAAP) 319 302 Add back or deduct: Expenses related to strategic alternatives review 21 - (Gain) loss on asset disposals, net 9 5 (Gain) loss on license sales and exchanges, net 8 - Adjusted EBITDA (Non-GAAP) 357 307 Deduct: Equity in earnings of unconsolidated entities 39 38 Interest and dividend income 7 6 Other, net 1 - Adjusted OIBDA (Non-GAAP) $ 310 $ 263 EBITDA, Adjusted EBITDA and Adjusted OIBDA Three Months Ended June 30, UScellular 2024 2023 (Dollars in millions) Net income (GAAP) $ 18 $ 5 Add back: Income tax expense 14 19 Income before income taxes (GAAP) 32 24 Add back: Interest expense 45 51 Depreciation, amortization and accretion 165 161 EBITDA (Non-GAAP) 242 236 Add back or deduct: Expenses related to strategic alternatives review 13 - (Gain) loss on asset disposals, net 5 3 (Gain) loss on license sales and exchanges, net 8 - Adjusted EBITDA (Non-GAAP) 268 239 Deduct: Equity in earnings of unconsolidated entities 38 38 Interest and dividend income 3 3 Adjusted OIBDA (Non-GAAP) $ 227 $ 198 Three Months Ended June 30, UScellular Wireless 2024 2023 (Dollars in millions) EBITDA (Non-GAAP) $ 171 $ 165 Add back or deduct: Expenses related to strategic alternatives review 12 - (Gain) loss on asset disposals, net 5 3 (Gain) loss on license sales and exchanges, net 8 - Adjusted EBITDA and Adjusted OIBDA (Non-GAAP) 196 168 Deduct: Depreciation, amortization and accretion 154 149 Expenses related to strategic alternatives review 12 - (Gain) loss on asset disposals, net 5 3 (Gain) loss on license sales and exchanges, net 8 - Operating income (GAAP) $ 17 $ 16 Three Months Ended June 30, UScellular Towers 2024 2023 (Dollars in millions) EBITDA (Non-GAAP) $ 30 $ 30 Add back or deduct: Expenses related to strategic alternatives review 1 - Adjusted EBITDA and Adjusted OIBDA (Non-GAAP) 31 30 Deduct: Depreciation, amortization and accretion 11 12 Expenses related to strategic alternatives review 1 - Operating income (GAAP) $ 19 $ 18 EBITDA, Adjusted EBITDA and Adjusted OIBDA Three Months Ended June 30, TDS TELECOM 2024 2023 (Dollars in millions) Net income (GAAP) $ 18 $ 7 Add back: Income tax expense 3 3 Income before income taxes (GAAP) 21 10 Add back: Interest expense - (2) Depreciation, amortization and accretion 67 60 EBITDA (Non-GAAP) 88 68 Add back or deduct: (Gain) loss on asset disposals, net 4 2 Adjusted EBITDA (Non-GAAP) 91 70 Deduct: Interest and dividend income 1 1 Other, net 1 - Adjusted OIBDA (Non-GAAP) $ 89 $ 68 Numbers may not foot due to rounding. View original content:https://www.prnewswire.com/news-releases/tds-reports-second-quarter-2024-results-302213208.html SOURCE Telephone and Data Systems, Inc.   back