8-K
TELEPHONE & DATA SYSTEMS INC /DE/ (TDS)
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d)
of The Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): May 2, 2025
TELEPHONE AND DATA SYSTEMS, INC.
(Exact name of registrant as specified in its charter)
| Delaware | 001-14157 | 36-2669023 |
|---|---|---|
| (State or other jurisdiction of incorporation) | (Commission File Number) | (IRS Employer Identification No.) |
30 North LaSalle Street, Suite 4000, Chicago, Illinois 60602
(Address of principal executive offices and zip code)
Registrant's telephone number, including area code: (312) 630-1900
Not Applicable
(Former name or former address, if changed since last report.)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
| ☐ | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) | ||||
|---|---|---|---|---|---|
| ☐ | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) | ||||
| ☐ | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) | ||||
| ☐ | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) | Securities registered pursuant to Section 12(b) of the Act: | |||
| --- | --- | --- | |||
| Title of each class | Trading Symbol | Name of each exchange on which registered | |||
| Common Shares, $.01 par value | TDS | New York Stock Exchange | |||
| Depositary Shares each representing a 1/1000th interest in a share of 6.625% Series UU Cumulative Redeemable Perpetual Preferred Stock, $.01 par value | TDSPrU | New York Stock Exchange | |||
| Depositary Shares each representing a 1/1000th interest in a share of 6.000% Series VV Cumulative Redeemable Perpetual Preferred Stock, $.01 par value | TDSPrV | New York Stock Exchange |
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
| ☐ | Emerging growth company | | --- | --- || ☐ | If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. | | --- | --- |
Item 2.02. Results of Operations and Financial Condition
On May 2, 2025, Telephone and Data Systems, Inc. (TDS) issued a news release announcing its results of operations for the period ended March 31, 2025. A copy of the news release is attached hereto as Exhibit 99.1 and incorporated by reference herein.
The information in this Item 2.02 of Form 8-K is being “furnished” and shall not be deemed “filed” for the purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liabilities of that Section, nor will any such information or exhibits be deemed incorporated by reference into any filing under the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended, except as expressly set forth by specific reference in such filing.
Item 9.01. Financial Statements and Exhibits
(d) The following exhibits are being filed herewith:
| Exhibit Number | Description of Exhibits |
|---|---|
| 99.1 | Earnings Press Release dated May 2, 2025 |
| 104 | Cover Page Interactive Data File - the cover page XBRL tags are embedded within the Inline XBRL document. |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| TELEPHONE AND DATA SYSTEMS, INC. | |||
|---|---|---|---|
| Date: | May 2, 2025 | By: | /s/ Vicki L. Villacrez |
| Vicki L. Villacrez | |||
| Executive Vice President and Chief Financial Officer |
Document
Exhibit 99.1
NEWS RELEASE
As previously announced, TDS will hold a teleconference on May 2, 2025, at 9:00 a.m. CDT. Listen to the call live via the Events & Presentations page of investors.tdsinc.com.
TDS reports first quarter 2025 results
CHICAGO (May 2, 2025) — Telephone and Data Systems, Inc. (NYSE:TDS) reported total operating revenues of $1,154 million for the first quarter of 2025, versus $1,262 million for the same period one year ago. Net income (loss) attributable to TDS common shareholders and related diluted earnings (loss) per share were $(10) million and $(0.09), respectively, for the first quarter of 2025 compared to $12 million and $0.10, respectively, in the same period one year ago.
Recent Highlights*
UScellular
•Improved postpaid handset results
◦Postpaid handset gross additions increased; postpaid handset net losses improved
•Third-party tower rental revenues increased 6%
•Ongoing 5G mid-band network deployment
◦Providing capacity and enhanced speed for our mobility and fixed wireless customers
TDS Telecom
•TDS Telecom revenues down 3%, impacted by 2024 divestitures of non-strategic assets
•Executing on fiber broadband strategy
◦Delivered 14,000 marketable fiber services addresses in Q1
◦Added 2,800 residential broadband net additions; 8,300 from fiber markets
* Comparisons are 1Q’24 to 1Q’25 unless otherwise noted
“As we work towards the expected mid-2025 closing of the sale of the wireless operations, the remaining businesses – fiber and towers – are making foundational changes that will support TDS’ transformation,” said Walter Carlson, TDS President and CEO. "In the first quarter, TDS and TDS Telecom results were impacted from the prior year divestitures of non-strategic assets, including the sale of One Neck and certain ILECs. TDS Telecom is continuing its fiber deployment adding 14,000 marketable fiber service addresses in the quarter while also investing in programs to streamline operations, enhance the customer experience and improve margins over time. And the tower business is continuing to grow the number of colocations and revenues, with third-party tower revenues increasing 6% in the quarter.”
Announced Transactions and Exploration of Strategic Alternatives for UScellular
On May 24, 2024, TDS and UScellular entered into a Securities Purchase Agreement to sell UScellular's wireless operations and select spectrum assets to T-Mobile US, Inc. (T-Mobile). The transaction is expected to close in mid-2025, subject to regulatory approval and the satisfaction of customary closing conditions. When the proposed T-Mobile transaction closes, UScellular expects the UScellular Board of Directors to declare the first of potentially several, special dividends to UScellular shareholders.
On October 17, 2024, UScellular, and certain subsidiaries of UScellular, entered into a License Purchase Agreement with Verizon Communications, Inc. (Verizon) to sell certain AWS, Cellular and PCS wireless spectrum licenses, subject to receipt of regulatory approvals, and agreed to grant Verizon certain rights to lease such licenses prior to the transaction close. Additionally, UScellular also entered into agreements with Nsight Spectrum, LLC and Nex-Tech Wireless, LLC for the sale of select spectrum licenses.
On November 6, 2024, UScellular, and certain subsidiaries of UScellular, entered into a License Purchase Agreement with New Cingular Wireless PCS, LLC (AT&T), a subsidiary of AT&T, Inc. to sell certain 3.45 GHz and 700 MHz wireless spectrum licenses, subject to receipt of regulatory approvals, and agreed to grant AT&T certain rights to lease and sub-lease such licenses prior to the transaction close.
Due to the pending transaction with T-Mobile, UScellular is not providing 2025 financial guidance.
2025 Estimated Results
TDS’ current estimates of full-year 2025 results for TDS Telecom are shown below. Such estimates represent management’s view as of May 2, 2025 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.
| 2025 Estimated Results | | --- || TDS Telecom | Previous | Current | | --- | --- | --- | | (Dollars in millions) | | | | Total operating revenues | $1,030-$1,070 | Unchanged | | Adjusted OIBDA1 (Non-GAAP) | $310-$350 | Unchanged | | Adjusted EBITDA1 (Non-GAAP) | $320-$360 | Unchanged | | Capital expenditures | $375-$425 | 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 2025 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.
| 2025 Estimated Results | Actual Results | |||||
|---|---|---|---|---|---|---|
| TDS Telecom | Year Ended<br>December 31, 2024 | |||||
| (Dollars in millions) | ||||||
| Net income (GAAP) | N/A | $ | 4 | $ | 85 | |
| Add back: | ||||||
| Income tax expense | N/A | 1 | 35 | |||
| Income before income taxes (GAAP) | 20-60 | $ | 5 | $ | 120 | |
| Add back: | ||||||
| Interest expense | — | (1) | (5) | |||
| Depreciation, amortization and accretion expense | 300 | 71 | 271 | |||
| EBITDA (Non-GAAP)1 | 320-360 | $ | 75 | $ | 385 | |
| Add back or deduct: | ||||||
| Loss on impairment of intangible assets | — | — | 1 | |||
| (Gain) loss on asset disposals, net | — | 2 | 12 | |||
| (Gain) loss on sale of business and other exit costs, net | — | — | (49) | |||
| Adjusted EBITDA (Non-GAAP)1 | 320-360 | $ | 76 | $ | 350 | |
| Deduct: | ||||||
| Interest and dividend income | 5 | 1 | 5 | |||
| Other, net | 5 | 2 | 4 | |||
| Adjusted OIBDA (Non-GAAP)1 | 310-350 | $ | 73 | $ | 340 |
All values are in US Dollars.
Numbers may not foot due to rounding.
1EBITDA, 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, 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.
Conference Call Information
TDS will hold a conference call on May 2, 2025 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/224819726
▪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 to approximately 5.5 million connections nationwide through its businesses, UScellular and TDS Telecom. Founded in 1969 and headquartered in Chicago, TDS employed approximately 7,800 associates as of March 31, 2025.
Visit investors.tdsinc.com for comprehensive financial information, including earnings releases, quarterly and annual filings, shareholder information and more.
Contacts
Colleen Thompson, Vice President - Corporate Relations
colleen.thompson@tdsinc.com
Julie Mathews, IRC, Director - Investor Relations
julie.mathews@tdsinc.com
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, including with respect to the expected closing date of the transaction with T-Mobile. 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 transactions whereby UScellular has agreed to sell its wireless operations and selected spectrum assets will be successfully 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 attract people of outstanding talent throughout all levels of the organization; TDS' lack of 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 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
| United States Cellular Corporation | |||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Summary Operating Data (Unaudited) | |||||||||||||||
| As of or for the Quarter Ended | 3/31/2025 | 12/31/2024 | 9/30/2024 | 6/30/2024 | 3/31/2024 | ||||||||||
| Retail Connections | |||||||||||||||
| Postpaid | |||||||||||||||
| Total at end of period1 | 3,946,000 | 3,985,000 | 3,999,000 | 4,027,000 | 4,051,000 | ||||||||||
| Gross additions | 105,000 | 140,000 | 123,000 | 117,000 | 106,000 | ||||||||||
| Handsets | 68,000 | 93,000 | 84,000 | 73,000 | 63,000 | ||||||||||
| Connected devices | 37,000 | 47,000 | 39,000 | 44,000 | 43,000 | ||||||||||
| Net additions (losses)1 | (39,000) | (14,000) | (28,000) | (24,000) | (44,000) | ||||||||||
| Handsets | (38,000) | (19,000) | (28,000) | (29,000) | (47,000) | ||||||||||
| Connected devices | (1,000) | 5,000 | — | 5,000 | 3,000 | ||||||||||
| ARPU2 | $ | 52.06 | $ | 51.73 | $ | 52.04 | $ | 51.45 | $ | 51.96 | |||||
| ARPA3 | $ | 132.25 | $ | 131.10 | $ | 131.81 | $ | 130.41 | $ | 132.00 | |||||
| Handset upgrade rate4 | 3.1 | % | 4.8 | % | 3.5 | % | 4.1 | % | 4.5 | % | |||||
| Churn rate5 | 1.21 | % | 1.29 | % | 1.25 | % | 1.16 | % | 1.22 | % | |||||
| Handsets | 1.03 | % | 1.08 | % | 1.07 | % | 0.97 | % | 1.03 | % | |||||
| Connected devices | 2.40 | % | 2.67 | % | 2.47 | % | 2.47 | % | 2.52 | % | |||||
| Prepaid | |||||||||||||||
| Total at end of period1 | 431,000 | 448,000 | 452,000 | 439,000 | 436,000 | ||||||||||
| Gross additions | 38,000 | 46,000 | 57,000 | 50,000 | 41,000 | ||||||||||
| Net additions (losses)1 | (17,000) | (4,000) | 13,000 | 3,000 | (13,000) | ||||||||||
| ARPU2 | $ | 30.76 | $ | 30.59 | $ | 32.01 | $ | 32.37 | $ | 32.25 | |||||
| Churn rate5 | 4.17 | % | 3.70 | % | 3.30 | % | 3.60 | % | 4.06 | % | |||||
| Market penetration at end of period | |||||||||||||||
| Consolidated operating population | 31,390,000 | 32,550,000 | 32,550,000 | 32,550,000 | 32,550,000 | ||||||||||
| Consolidated operating penetration6 | 17 | % | 15 | % | 15 | % | 15 | % | 14 | % | |||||
| Capital expenditures (millions) | $ | 53 | $ | 162 | $ | 120 | $ | 165 | $ | 131 | |||||
| Total cell sites in service | 7,009 | 7,010 | 7,007 | 6,990 | 6,995 | ||||||||||
| Owned towers | 4,413 | 4,409 | 4,407 | 4,388 | 4,382 | ||||||||||
| Number of colocations7 | 2,469 | 2,444 | 2,418 | 2,392 | 2,397 | ||||||||||
| Tower tenancy rate8 | 1.56 | 1.55 | 1.55 | 1.55 | 1.55 |
1First 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.
2Average 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.
3Average 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.
4Handset upgrade rate calculated as total handset upgrade transactions divided by average postpaid handset connections.
5Churn rate represents the percentage of the connections that disconnect service each month. These rates represent the average monthly churn rate for each respective period.
6Market 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.
7Represents instances where a third-party wireless carrier rents or leases space on a company-owned tower.
8Average 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 | 3/31/2025 | 12/31/2024 | 9/30/2024 | 6/30/2024 | 3/31/2024 | ||||||||||
| Residential connections | |||||||||||||||
| Broadband | |||||||||||||||
| Incumbent Fiber | 119,700 | 118,500 | 115,900 | 113,100 | 109,800 | ||||||||||
| Incumbent Copper | 112,600 | 116,900 | 125,600 | 130,600 | 135,300 | ||||||||||
| Expansion Fiber | 133,200 | 126,100 | 115,300 | 107,800 | 100,400 | ||||||||||
| Cable | 190,200 | 191,500 | 195,900 | 198,500 | 202,400 | ||||||||||
| Total Broadband1 | 555,800 | 553,000 | 552,700 | 550,000 | 547,900 | ||||||||||
| Video | 118,700 | 121,000 | 122,100 | 124,800 | 128,800 | ||||||||||
| Voice | 256,900 | 261,600 | 271,300 | 275,600 | 279,400 | ||||||||||
| Total Residential connections | 931,400 | 935,600 | 946,100 | 950,400 | 956,100 | ||||||||||
| Commercial connections | 187,600 | 190,500 | 197,200 | 201,500 | 206,200 | ||||||||||
| Total connections2 | 1,119,000 | 1,126,100 | 1,143,300 | 1,152,000 | 1,162,200 | ||||||||||
| Total residential broadband net adds | 2,800 | 7,900 | 2,700 | 2,100 | 6,400 | ||||||||||
| Residential fiber churn3 | 0.9 | % | 1.0 | % | 1.3 | % | 1.2 | % | 1.0 | % | |||||
| Total residential broadband churn | 1.3 | % | 1.4 | % | 1.7 | % | 1.7 | % | 1.4 | % | |||||
| Residential revenue per connection4 | $ | 65.67 | $ | 64.72 | $ | 65.41 | $ | 65.26 | $ | 64.58 | |||||
| Capital expenditures (millions) | $ | 59 | $ | 82 | $ | 78 | $ | 78 | $ | 87 |
Numbers may not foot due to rounding.
1Total 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.
2Q1 2024 total connections include 18,100 subscribers that were part of the 2024 divestitures.
3Residential fiber churn represents the percentage of incumbent and expansion fiber connections that disconnected service each month. These rates represent the average monthly churn rate for each respective period.
4Total 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<br>March 31, | ||||||
| 2025 | 2024 | 2025<br>vs. 2024 | ||||
| (Dollars and shares in millions, except per share amounts) | ||||||
| Operating revenues | ||||||
| UScellular | $ | 891 | $ | 950 | (6) | % |
| TDS Telecom | 257 | 266 | (3) | % | ||
| All Other1 | 6 | 46 | (87) | % | ||
| 1,154 | 1,262 | (9) | % | |||
| Operating expenses | ||||||
| UScellular | ||||||
| Expenses excluding depreciation, amortization and accretion | 686 | 729 | (6) | % | ||
| Depreciation, amortization and accretion | 163 | 165 | (2) | % | ||
| (Gain) loss on asset disposals, net | 2 | 6 | (65) | % | ||
| (Gain) loss on license sales and exchanges, net | (1) | (1) | 18 | % | ||
| 850 | 899 | (5) | % | |||
| TDS Telecom | ||||||
| Expenses excluding depreciation, amortization and accretion | 184 | 173 | 6 | % | ||
| Depreciation, amortization and accretion | 71 | 65 | 10 | % | ||
| (Gain) loss on asset disposals, net | 2 | 2 | (9) | % | ||
| 258 | 240 | 7 | % | |||
| All Other1 | ||||||
| Expenses excluding depreciation and amortization | 13 | 53 | (76) | % | ||
| Depreciation and amortization | — | 4 | (74) | % | ||
| (Gain) loss on asset disposals, net | — | (1) | N/M | |||
| (Gain) loss on sale of business and other exit costs, net | (1) | — | N/M | |||
| 11 | 56 | (77) | % | |||
| Total operating expenses | 1,119 | 1,195 | (6) | % | ||
| Operating income (loss) | ||||||
| UScellular | 41 | 51 | (19) | % | ||
| TDS Telecom | — | 27 | N/M | |||
| All Other1 | (6) | (11) | 38 | % | ||
| 35 | 67 | (49) | % | |||
| Other income (expense) | ||||||
| Equity in earnings of unconsolidated entities | 37 | 42 | (14) | % | ||
| Interest and dividend income | 6 | 5 | 28 | % | ||
| Interest expense | (61) | (57) | (3) | % | ||
| Other, net | 3 | 1 | N/M | |||
| Total other expense | (15) | (9) | (46) | % | ||
| Income before income taxes | 20 | 58 | (65) | % | ||
| Income tax expense | 8 | 20 | (57) | % | ||
| Net income | 12 | 38 | (69) | % | ||
| Less: Net income attributable to noncontrolling interests, net of tax | 5 | 9 | (49) | % | ||
| Net income attributable to TDS shareholders | 7 | 29 | (74) | % | ||
| TDS Preferred Share dividends | 17 | 17 | — | |||
| Net income (loss) attributable to TDS common shareholders | $ | (10) | $ | 12 | N/M | |
| Basic weighted average shares outstanding | 115 | 113 | 1 | % | ||
| Basic earnings (loss) per share attributable to TDS common shareholders | $ | (0.09) | $ | 0.11 | N/M | |
| Diluted weighted average shares outstanding | 115 | 117 | (2) | % | ||
| Diluted earnings (loss) per share attributable to TDS common shareholders | $ | (0.09) | $ | 0.10 | N/M |
N/M - Percentage change not meaningful.
Numbers may not foot due to rounding.
1Consists 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) | ||||||||||
| Three Months Ended<br>March 31, | ||||||||||
| 2025 | 2024 | |||||||||
| (Dollars in millions) | ||||||||||
| Cash flows from operating activities | ||||||||||
| Net income | $ | 12 | $ | 38 | ||||||
| Add (deduct) adjustments to reconcile net income to net cash flows from operating activities | ||||||||||
| Depreciation, amortization and accretion | 234 | 234 | ||||||||
| Bad debts expense | 21 | 31 | ||||||||
| Stock-based compensation expense | 28 | 14 | ||||||||
| Deferred income taxes, net | 7 | 14 | ||||||||
| Equity in earnings of unconsolidated entities | (37) | (42) | ||||||||
| Distributions from unconsolidated entities | 11 | 22 | ||||||||
| (Gain) loss on asset disposals, net | 4 | 7 | ||||||||
| (Gain) loss on sale of business and other exit costs, net | (1) | — | ||||||||
| (Gain) loss on license sales and exchanges, net | (1) | (1) | ||||||||
| Other operating activities | 2 | 1 | ||||||||
| Changes in assets and liabilities from operations | ||||||||||
| Accounts receivable | 1 | 27 | ||||||||
| Equipment installment plans receivable | 38 | 2 | ||||||||
| Inventory | — | 24 | ||||||||
| Accounts payable | (17) | (35) | ||||||||
| Customer deposits and deferred revenues | (7) | 6 | ||||||||
| Accrued taxes | 1 | 4 | ||||||||
| Accrued interest | 9 | 9 | ||||||||
| Other assets and liabilities | (119) | (131) | ||||||||
| Net cash provided by operating activities | 186 | 224 | ||||||||
| Cash flows from investing activities | ||||||||||
| Cash paid for additions to property, plant and equipment | (129) | (235) | ||||||||
| Cash paid for licenses | (2) | (11) | ||||||||
| Cash received from divestitures | 8 | — | ||||||||
| Net cash used in investing activities | (123) | (246) | ||||||||
| Cash flows from financing activities | ||||||||||
| Issuance of long-term debt | — | 140 | ||||||||
| Repayment of long-term debt | (8) | (57) | ||||||||
| Tax payments, net of cash receipts, for TDS stock-based compensation awards | (6) | (1) | ||||||||
| Tax payments, net of cash receipts, for UScellular stock-based compensation awards | (7) | — | ||||||||
| Repurchase of UScellular Common Shares | (21) | — | ||||||||
| Dividends paid to TDS shareholders | (22) | (39) | ||||||||
| Distributions to noncontrolling interests | (2) | (2) | ||||||||
| Cash paid for software license agreements | (10) | (9) | ||||||||
| Other financing activities | — | (2) | ||||||||
| Net cash provided by (used in) financing activities | (76) | 30 | ||||||||
| Net increase (decrease) in cash, cash equivalents and restricted cash | (13) | 8 | ||||||||
| Cash, cash equivalents and restricted cash | ||||||||||
| Beginning of period | 384 | 270 | ||||||||
| End of period | $ | 371 | $ | 278 | ||||||
| Telephone and Data Systems, Inc. | ||||||||||
| --- | --- | --- | --- | --- | ||||||
| Consolidated Balance Sheet Highlights | ||||||||||
| (Unaudited) | ||||||||||
| ASSETS | ||||||||||
| March 31, 2025 | December 31, 2024 | |||||||||
| (Dollars in millions) | ||||||||||
| Current assets | ||||||||||
| Cash and cash equivalents | $ | 348 | $ | 364 | ||||||
| Accounts receivable, net | 1,004 | 1,041 | ||||||||
| Inventory, net | 182 | 183 | ||||||||
| Prepaid expenses | 98 | 72 | ||||||||
| Income taxes receivable | 3 | 2 | ||||||||
| Other current assets | 38 | 33 | ||||||||
| Total current assets | 1,673 | 1,695 | ||||||||
| Assets held for sale | 14 | — | ||||||||
| Licenses | 4,590 | 4,588 | ||||||||
| Other intangible assets, net | 154 | 161 | ||||||||
| Investments in unconsolidated entities | 527 | 500 | ||||||||
| Property, plant and equipment, net | 4,871 | 4,994 | ||||||||
| Operating lease right-of-use assets | 978 | 982 | ||||||||
| Other assets and deferred charges | 729 | 762 | ||||||||
| Total assets | $ | 13,536 | $ | 13,682 | ||||||
| Telephone and Data Systems, Inc. | ||||||||||
| --- | --- | --- | --- | --- | ||||||
| Consolidated Balance Sheet Highlights | ||||||||||
| (Unaudited) | ||||||||||
| LIABILITIES AND EQUITY | ||||||||||
| March 31, 2025 | December 31, 2024 | |||||||||
| (Dollars in millions, except per share amounts) | ||||||||||
| Current liabilities | ||||||||||
| Current portion of long-term debt | $ | 35 | $ | 31 | ||||||
| Accounts payable | 247 | 280 | ||||||||
| Customer deposits and deferred revenues | 276 | 283 | ||||||||
| Accrued interest | 25 | 16 | ||||||||
| Accrued taxes | 41 | 39 | ||||||||
| Accrued compensation | 62 | 150 | ||||||||
| Short-term operating lease liabilities | 151 | 153 | ||||||||
| Other current liabilities | 123 | 138 | ||||||||
| Total current liabilities | 960 | 1,090 | ||||||||
| Liabilities held for sale | 5 | — | ||||||||
| Deferred liabilities and credits | ||||||||||
| Deferred income tax liability, net | 987 | 981 | ||||||||
| Long-term operating lease liabilities | 867 | 867 | ||||||||
| Other deferred liabilities and credits | 807 | 809 | ||||||||
| Long-term debt, net | 4,042 | 4,051 | ||||||||
| Noncontrolling interests with redemption features | 16 | 16 | ||||||||
| Equity | ||||||||||
| TDS shareholders' equity | ||||||||||
| Series A Common and Common Shares, par value $0.01 per share | 1 | 1 | ||||||||
| Capital in excess of par value | 2,581 | 2,574 | ||||||||
| Preferred Shares, par value $0.01 per share | 1,074 | 1,074 | ||||||||
| Treasury shares, at cost | (414) | (425) | ||||||||
| Accumulated other comprehensive income | 18 | 18 | ||||||||
| Retained earnings | 1,818 | 1,849 | ||||||||
| Total TDS shareholders' equity | 5,078 | 5,091 | ||||||||
| Noncontrolling interests | 774 | 777 | ||||||||
| Total equity | 5,852 | 5,868 | ||||||||
| Total liabilities and equity | $ | 13,536 | $ | 13,682 | ||||||
| Balance Sheet Highlights | ||||||||||
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
| (Unaudited) | ||||||||||
| March 31, 2025 | ||||||||||
| TDS | TDS Corporate | Intercompany | TDS | |||||||
| UScellular | Telecom | & Other | Eliminations | Consolidated | ||||||
| (Dollars in millions) | ||||||||||
| Cash and cash equivalents | $ | 182 | $ | 124 | $ | 167 | $ | (125) | $ | 348 |
| Licenses and other intangible assets | $ | 4,581 | $ | 157 | $ | 6 | $ | — | $ | 4,744 |
| Investment in unconsolidated entities | 479 | 4 | 51 | (7) | 527 | |||||
| $ | 5,060 | $ | 161 | $ | 57 | $ | (7) | $ | 5,271 | |
| Property, plant and equipment, net | $ | 2,394 | $ | 2,459 | $ | 18 | $ | — | $ | 4,871 |
| Long-term debt, net: | ||||||||||
| Current portion | $ | 26 | $ | — | $ | 9 | $ | — | $ | 35 |
| Non-current portion | 2,829 | 3 | 1,210 | — | 4,042 | |||||
| $ | 2,855 | $ | 3 | $ | 1,219 | $ | — | $ | 4,077 |
United States Cellular Corporation
Segment Results
(Unaudited)
| Three Months Ended<br>March 31, | ||||||
|---|---|---|---|---|---|---|
| UScellular | 2025 | 2024 | 2025<br>vs. 2024 | |||
| (Dollars in millions) | ||||||
| Operating Revenues | ||||||
| Wireless | $ | 864 | $ | 925 | (7) | % |
| Towers | 61 | 58 | 5 | % | ||
| Intra-company eliminations | (34) | (33) | (3) | % | ||
| Total operating revenues | 891 | 950 | (6) | % | ||
| Operating expenses | ||||||
| Wireless | 844 | 896 | (6) | % | ||
| Towers | 40 | 36 | 11 | % | ||
| Intra-company eliminations | (34) | (33) | (3) | % | ||
| Total operating expenses | 850 | 899 | (5) | % | ||
| Operating income | $ | 41 | $ | 51 | (19) | % |
| Adjusted OIBDA (Non-GAAP) | $ | 215 | $ | 228 | (6) | % |
| Adjusted EBITDA (Non-GAAP) | $ | 254 | $ | 272 | (7) | % |
| Capital expenditures | $ | 53 | $ | 131 | (60) | % |
United States Cellular Corporation
Segment Results
(Unaudited)
| Three Months Ended<br>March 31, | ||||||
|---|---|---|---|---|---|---|
| UScellular Wireless | 2025 | 2024 | 2025<br>vs. 2024 | |||
| (Dollars in millions) | ||||||
| Retail service | $ | 660 | $ | 678 | (3) | % |
| Other | 54 | 51 | 8 | % | ||
| Service revenues | 714 | 729 | (2) | % | ||
| Equipment sales | 150 | 196 | (24) | % | ||
| Total operating revenues | 864 | 925 | (7) | % | ||
| System operations (excluding Depreciation, amortization and accretion reported below) | 191 | 197 | (3) | % | ||
| Cost of equipment sold | 178 | 216 | (18) | % | ||
| Selling, general and administrative | 322 | 324 | — | |||
| Depreciation, amortization and accretion | 152 | 154 | (2) | % | ||
| (Gain) loss on asset disposals, net | 2 | 6 | (73) | % | ||
| (Gain) loss on license sales and exchanges, net | (1) | (1) | 18 | % | ||
| Total operating expenses | 844 | 896 | (6) | % | ||
| Operating income | $ | 20 | $ | 29 | (30) | % |
| Adjusted OIBDA (Non-GAAP) | $ | 182 | $ | 195 | (7) | % |
| Adjusted EBITDA (Non-GAAP) | $ | 182 | $ | 195 | (7) | % |
| Capital expenditures | $ | 51 | $ | 127 | (60) | % |
| Three Months Ended<br>March 31, | ||||||
| --- | --- | --- | --- | --- | --- | --- |
| UScellular Towers | 2025 | 2024 | 2025<br>vs. 2024 | |||
| (Dollars in millions) | ||||||
| Third-party revenues | $ | 27 | $ | 25 | 6 | % |
| Intra-company revenues | 34 | 33 | 3 | % | ||
| Total tower revenues | 61 | 58 | 5 | % | ||
| System operations (excluding Depreciation, amortization and accretion reported below) | 19 | 18 | 4 | % | ||
| Selling, general and administrative | 10 | 7 | 33 | % | ||
| Depreciation, amortization and accretion | 11 | 11 | 5 | % | ||
| Total operating expenses | 40 | 36 | 11 | % | ||
| Operating income | $ | 21 | $ | 22 | (5) | % |
| Adjusted OIBDA (Non-GAAP) | $ | 33 | $ | 33 | (1) | % |
| Adjusted EBITDA (Non-GAAP) | $ | 33 | $ | 33 | (1) | % |
| Capital expenditures | $ | 2 | $ | 4 | (42) | % |
| TDS Telecom Highlights | ||||||
| --- | --- | --- | --- | --- | --- | --- |
| (Unaudited) | ||||||
| Three Months Ended<br>March 31, | ||||||
| 2025 | 2024 | 2025<br>vs. 2024 | ||||
| (Dollars in millions) | ||||||
| Operating revenues | ||||||
| Residential | ||||||
| Incumbent | $ | 86 | $ | 90 | (5) | % |
| Expansion | 34 | 26 | 33 | % | ||
| Cable | 64 | 70 | (8) | % | ||
| Total residential | 184 | 185 | (1) | % | ||
| Commercial | 35 | 37 | (6) | % | ||
| Wholesale | 39 | 44 | (12) | % | ||
| Total service revenues | 257 | 266 | (3) | % | ||
| Equipment revenues | — | — | 23 | % | ||
| Total operating revenues | 257 | 266 | (3) | % | ||
| Cost of services | 101 | 98 | 3 | % | ||
| Cost of equipment and products | — | — | 47 | % | ||
| Selling, general and administrative expenses | 83 | 75 | 10 | % | ||
| Depreciation, amortization and accretion | 71 | 65 | 10 | % | ||
| (Gain) loss on asset disposals, net | 2 | 2 | (9) | % | ||
| Total operating expenses | 258 | 240 | 7 | % | ||
| Operating income | $ | — | $ | 27 | N/M |
N/M - Percentage change not meaningful
Numbers may not foot due to rounding.
Telephone and Data Systems, Inc.
Financial Measures
(Unaudited)
Free Cash Flow
| Three Months Ended<br>March 31, | ||||||||||
|---|---|---|---|---|---|---|---|---|---|---|
| TDS CONSOLIDATED | 2025 | 2024 | ||||||||
| (Dollars in millions) | ||||||||||
| Cash flows from operating activities (GAAP) | $ | 186 | $ | 224 | ||||||
| Cash paid for additions to property, plant and equipment | (129) | (235) | ||||||||
| Cash paid for software license agreements | (10) | (9) | ||||||||
| Free cash flow (Non-GAAP)1 | $ | 47 | $ | (20) | Three Months Ended<br>March 31, | |||||
| --- | --- | --- | --- | --- | ||||||
| UScellular | 2025 | 2024 | ||||||||
| (Dollars in millions) | ||||||||||
| Cash flows from operating activities (GAAP) | $ | 160 | $ | 203 | ||||||
| Cash paid for additions to property, plant and equipment | (72) | (133) | ||||||||
| Cash paid for software license agreements | (9) | (9) | ||||||||
| Free cash flow (Non-GAAP)1 | $ | 79 | $ | 61 |
1Free 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 table reconciles EBITDA, Adjusted EBITDA and Adjusted OIBDA to the corresponding GAAP measures, Net income and Income before income taxes. 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 directly comparable GAAP measure is Operating income rather than Net income at the segment level.
| Three Months Ended<br>March 31, | ||||
|---|---|---|---|---|
| UScellular | 2025 | 2024 | ||
| (Dollars in millions) | ||||
| Net income (GAAP) | $ | 20 | $ | 24 |
| Add back or deduct: | ||||
| Income tax expense | 20 | 28 | ||
| Income before income taxes (GAAP) | 40 | 52 | ||
| Add back: | ||||
| Interest expense | 40 | 43 | ||
| Depreciation, amortization and accretion expense | 163 | 165 | ||
| EBITDA (Non-GAAP) | 243 | 260 | ||
| Add back or deduct: | ||||
| Expenses related to strategic alternatives review | 10 | 7 | ||
| (Gain) loss on asset disposals, net | 2 | 6 | ||
| (Gain) loss on license sales and exchanges, net | (1) | (1) | ||
| Adjusted EBITDA (Non-GAAP) | 254 | 272 | ||
| Deduct: | ||||
| Equity in earnings of unconsolidated entities | 36 | 42 | ||
| Interest and dividend income | 3 | 2 | ||
| Adjusted OIBDA (Non-GAAP) | $ | 215 | $ | 228 |
| Three Months Ended<br>March 31, | ||||
| --- | --- | --- | --- | --- |
| UScellular Wireless | 2025 | 2024 | ||
| (Dollars in millions) | ||||
| EBITDA (Non-GAAP) | $ | 172 | $ | 183 |
| Add back or deduct: | ||||
| Expenses related to strategic alternatives review | 9 | 7 | ||
| (Gain) loss on asset disposals, net | 2 | 6 | ||
| (Gain) loss on license sales and exchanges, net | (1) | (1) | ||
| Adjusted EBITDA and Adjusted OIBDA (Non-GAAP) | 182 | 195 | ||
| Deduct: | ||||
| Depreciation, amortization and accretion | 152 | 154 | ||
| Expenses related to strategic alternatives review | 9 | 7 | ||
| (Gain) loss on asset disposals, net | 2 | 6 | ||
| (Gain) loss on license sales and exchanges, net | (1) | (1) | ||
| Operating income (GAAP) | $ | 20 | $ | 29 |
| Three Months Ended<br>March 31, | ||||
| --- | --- | --- | --- | --- |
| UScellular Towers | 2025 | 2024 | ||
| (Dollars in millions) | ||||
| EBITDA (Non-GAAP) | $ | 32 | $ | 33 |
| Add back or deduct: | ||||
| Expenses related to strategic alternatives review | 1 | — | ||
| Adjusted EBITDA and Adjusted OIBDA (Non-GAAP) | 33 | 33 | ||
| Deduct: | ||||
| Depreciation, amortization and accretion | 11 | 11 | ||
| Expenses related to strategic alternatives review | 1 | — | ||
| Operating income (GAAP) | $ | 21 | $ | 22 |
| Three Months Ended<br>March 31, | ||||
| --- | --- | --- | --- | --- |
| TDS Telecom | 2025 | 2024 | ||
| (Dollars in millions) | ||||
| Net income (GAAP) | $ | 4 | $ | 24 |
| Add back or deduct: | ||||
| Income tax expense | 1 | 7 | ||
| Income before income taxes (GAAP) | 5 | 31 | ||
| Add back: | ||||
| Interest expense | (1) | (2) | ||
| Depreciation, amortization and accretion expense | 71 | 65 | ||
| EBITDA (Non-GAAP) | 75 | 93 | ||
| Add back or deduct: | ||||
| (Gain) loss on asset disposals, net | 2 | 2 | ||
| Adjusted EBITDA (Non-GAAP) | 76 | 95 | ||
| Deduct: | ||||
| Interest and dividend income | 1 | 1 | ||
| Other, net | 2 | 1 | ||
| Adjusted OIBDA (Non-GAAP) | $ | 73 | $ | 93 |
Numbers may not foot due to rounding.
16