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): February 21, 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 February 21, 2025, Telephone and Data Systems, Inc. (TDS) issued a news release announcing its results of operations for the period ended December 31, 2024. 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 February21, 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: | February 21, 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 February 21, 2025 at 9:00 a.m. CST. Listen to the call live via the Events & Presentations page of investors.tdsinc.com.
TDS reports fourth quarter and full year 2024 results
Investing in our networks; TDS Telecom provides 2025 guidance
CHICAGO (February 21, 2025) — Telephone and Data Systems, Inc. (NYSE:TDS) reported total operating revenues of $1,240 million for the fourth quarter of 2024, versus $1,313 million for the same period one year ago. Net income (loss) attributable to TDS common shareholders and related diluted earnings (loss) per share were $(11) million and $(0.10), respectively, for the fourth quarter of 2024 compared to $(523) million and $(4.64), respectively, in the same period one year ago.
Net income (loss) attributable to TDS common shareholders excluding a fourth quarter 2023 TDS Telecom non-cash charge related to goodwill impairment (Non-GAAP) of $547 million ($511 million, net of tax) and related diluted earnings (loss) per share excluding a fourth quarter 2023 TDS Telecom non-cash charge related to goodwill impairment (Non-GAAP) were $(12) million and $(0.11), respectively, for the fourth quarter of 2023.
TDS reported total operating revenues of $4,964 million and $5,160 million for the years ended 2024 and 2023, respectively. Net income (loss) attributable to TDS common shareholders and related diluted earnings (loss) per share were $(97) million and $(0.85), respectively, for the year ended 2024 compared to $(569) million and $(5.06), respectively, for the year ended 2023. Net income attributable to TDS common shareholders excluding 2024 impairment losses (non-GAAP) of $137 million ($103 million, net of tax) and related diluted earnings (loss) per share excluding 2024 impairment losses (non-GAAP) were $(12) million and $(0.11), respectively, for the year ended 2024. Substantially all of the UScellular impairment loss was related to the retained high-band spectrum unit of accounting which includes the 28 GHz, 37GHz and 38 GHz frequency bands.
Net income (loss) attributable to TDS common shareholders excluding a fourth quarter 2023 TDS Telecom non-cash charge related to goodwill impairment (Non-GAAP) of $547 million ($511 million, net of tax) and related diluted earnings (loss) per share excluding a fourth quarter 2023 TDS Telecom non-cash charge related to goodwill impairment (Non-GAAP) were $(58) million and $(0.53), respectively, for the year ended 2023.
Full year 2024 Highlights*
UScellular
•Announced multiple transactions related to the strategic alternatives review
◦Transaction with T-Mobile and four spectrum transactions with various mobile network operators
•Improved wireless operating results
◦Postpaid and prepaid net losses improved
◦Postpaid and prepaid churn improved
◦Fixed wireless customers grew 27%
•Cash flows from operating activities and free cash flow up year over year
•Ongoing 5G mid-band network deployment — providing additional capacity and faster speeds for our customers
TDS Telecom
•Exceeded full year 2024 fiber address goal
◦Delivered 129,000 marketable fiber service addresses
•Executing on fiber broadband strategy
◦Expanded footprint 6% — increased total service addresses to 1.8 million
◦Residential broadband connections grew 2% and Residential revenue per connection grew 5%
◦Total Wireline expansion residential revenues grew to $114 million, up from $75 million
*Comparisons are Year Ended December 31, 2024 to Year Ended December 31, 2023
“During 2024, we made significant progress on the strategic review of alternatives at UScellular,” said Walter C. D. Carlson, TDS President and CEO. “And as part of our mission to provide outstanding communication services to our customers, both business units invested in their high-quality networks. UScellular continued to deploy its mid-band spectrum to enhance speed and capacity while TDS Telecom grew its footprint and delivered 129,000 new marketable fiber service addresses.
“In 2025, TDS Telecom will continue its ongoing fiber expansion and the FCC’s Enhanced Alternative Connect America Cost Model program and intends to bring a fiber-rich network to over 150,000 new marketable service addresses throughout the country. And while UScellular works toward a successful close on the sale of its wireless operations and spectrum transactions, UScellular remains focused on its operational priorities and growing its tower business.”
Announced Transactions
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.
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 February 21, 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.
| TDS Telecom | 2025 Estimated Results | Actual Results for<br>the Year Ended<br>December 31, 2024 |
|---|---|---|
| (Dollars in millions) | ||
| Total operating revenues | $1,030-$1,070 | $1,061 |
| Adjusted OIBDA1 (Non-GAAP) | $310-$350 | $340 |
| Adjusted EBITDA1 (Non-GAAP) | $320-$360 | $350 |
| Capital expenditures | $375-$425 | $324 |
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.
| TDS Telecom | |||
|---|---|---|---|
| 2025 Estimated Results | Actual Results for<br><br>the Year Ended<br><br>December 31, 2024 | ||
| (Dollars in millions) | |||
| Net income (GAAP) | N/A | $85 | |
| Add back: | |||
| Income tax expense | N/A | 35 | |
| Income before income taxes (GAAP) | $20-$60 | $120 | |
| Add back: | |||
| Interest expense | — | (5) | |
| Depreciation, amortization and accretion | 300 | 271 | |
| EBITDA (Non-GAAP)1 | $320-$360 | $385 | |
| Add back or deduct: | |||
| Loss on impairment of intangible assets | — | 1 | |
| (Gain) loss on asset disposals, net | — | 12 | |
| (Gain) loss on sale of business and other exit costs, net | — | (49) | |
| Adjusted EBITDA (Non-GAAP)1 | $320-$360 | $350 | |
| Deduct: | |||
| Interest and dividend income | 5 | 5 | |
| Other, net | 5 | 4 | |
| Adjusted OIBDA (Non-GAAP)1 | $310-$350 | $340 |
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. Additional information and reconciliations related to Non-GAAP financial measures for December 31, 2024, can be found on TDS' website at investors.tdsinc.com.
Conference Call Information
TDS will hold a conference call on February 21, 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/548841993
•Access 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) 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 7,900 associates as of December 31, 2024.
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. 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 or whether UScellular will be able to find buyers at mutually agreeable prices for its remaining spectrum assets; 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; if the announced transactions are not successfully completed there may be substantial changes in which the wireless business is conducted; if the announced transactions are successfully completed, substantial costs will be triggered and changes required in the manner in which UScellular’s remaining business is conducted; 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' 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 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.
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 | 12/31/2024 | 9/30/2024 | 6/30/2024 | 3/31/2024 | 12/31/2023 | ||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Retail Connections | |||||||||||||||
| Postpaid | |||||||||||||||
| Total at end of period1 | 3,985,000 | 3,999,000 | 4,027,000 | 4,051,000 | 4,106,000 | ||||||||||
| Gross additions | 140,000 | 123,000 | 117,000 | 106,000 | 129,000 | ||||||||||
| Handsets | 93,000 | 84,000 | 73,000 | 63,000 | 80,000 | ||||||||||
| Connected devices | 47,000 | 39,000 | 44,000 | 43,000 | 49,000 | ||||||||||
| Net additions (losses)1 | (14,000) | (28,000) | (24,000) | (44,000) | (50,000) | ||||||||||
| Handsets | (19,000) | (28,000) | (29,000) | (47,000) | (53,000) | ||||||||||
| Connected devices | 5,000 | — | 5,000 | 3,000 | 3,000 | ||||||||||
| ARPU2 | $ | 51.73 | $ | 52.04 | $ | 51.45 | $ | 51.96 | $ | 51.61 | |||||
| ARPA3 | $ | 131.10 | $ | 131.81 | $ | 130.41 | $ | 132.00 | $ | 131.63 | |||||
| Handset upgrade rate4 | 4.8 | % | 3.5 | % | 4.1 | % | 4.5 | % | 5.8 | % | |||||
| Churn rate5 | 1.29 | % | 1.25 | % | 1.16 | % | 1.22 | % | 1.44 | % | |||||
| Handsets | 1.08 | % | 1.07 | % | 0.97 | % | 1.03 | % | 1.22 | % | |||||
| Connected devices | 2.67 | % | 2.47 | % | 2.47 | % | 2.52 | % | 3.03 | % | |||||
| Prepaid | |||||||||||||||
| Total at end of period1 | 448,000 | 452,000 | 439,000 | 436,000 | 451,000 | ||||||||||
| Gross additions | 46,000 | 57,000 | 50,000 | 41,000 | 43,000 | ||||||||||
| Net additions (losses)1 | (4,000) | 13,000 | 3,000 | (13,000) | (11,000) | ||||||||||
| ARPU2, 6 | $ | 30.59 | $ | 32.01 | $ | 32.37 | $ | 32.25 | $ | 32.32 | |||||
| Churn rate5 | 3.70 | % | 3.30 | % | 3.60 | % | 4.06 | % | 3.87 | % | |||||
| Market penetration at end of period | |||||||||||||||
| Consolidated operating population | 32,550,000 | 32,550,000 | 32,550,000 | 32,550,000 | 32,350,000 | ||||||||||
| Consolidated operating penetration7 | 15 | % | 15 | % | 15 | % | 14 | % | 15 | % | |||||
| Capital expenditures (millions) | $ | 162 | $ | 120 | $ | 165 | $ | 131 | $ | 148 | |||||
| Total cell sites in service | 7,010 | 7,007 | 6,990 | 6,995 | 7,000 | ||||||||||
| Owned towers | 4,409 | 4,407 | 4,388 | 4,382 | 4,373 | ||||||||||
| Number of colocations8 | 2,444 | 2,418 | 2,392 | 2,397 | 2,390 | ||||||||||
| Tower tenancy rate9 | 1.55 | 1.55 | 1.55 | 1.55 | 1.55 |
Due to rounding, the sum of quarterly results may not equal the total for the year.
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.
6Fourth 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.
7Market 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.
8Represents instances where a third-party wireless carrier rents or leases space on a company-owned tower.
9Average 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 | 12/31/2024 | 9/30/2024 | 6/30/2024 | 3/31/2024 | 12/31/2023 | |||||
|---|---|---|---|---|---|---|---|---|---|---|
| Residential connections | ||||||||||
| Broadband | ||||||||||
| Incumbent Fiber | 118,500 | 115,900 | 113,100 | 109,800 | 110,100 | |||||
| Incumbent Copper | 116,900 | 125,600 | 130,600 | 135,300 | 134,700 | |||||
| Expansion Fiber | 126,100 | 115,300 | 107,800 | 100,400 | 92,200 | |||||
| Cable | 191,500 | 195,900 | 198,500 | 202,400 | 202,900 | |||||
| Total Broadband1 | 553,000 | 552,700 | 550,000 | 547,900 | 539,800 | |||||
| Video | 121,000 | 122,100 | 124,800 | 128,800 | 131,500 | |||||
| Voice | 261,600 | 271,300 | 275,600 | 279,400 | 281,600 | |||||
| Total Residential connections | 935,600 | 946,100 | 950,400 | 956,100 | 952,900 | |||||
| Commercial connections | 190,500 | 197,200 | 201,500 | 206,200 | 210,200 | |||||
| Total connections2 | 1,126,100 | 1,143,300 | 1,152,000 | 1,162,200 | 1,163,100 | |||||
| Residential revenue per connection3 | $ | 64.72 | $ | 65.41 | $ | 65.26 | $ | 64.58 | $ | 62.74 |
| Capital expenditures (millions) | $ | 82 | $ | 78 | $ | 78 | $ | 87 | $ | 143 |
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.
2Divestitures in the fourth quarter of 2024 resulted in a decrease of 15,700 connections.
3Total 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>December 31, | Year Ended<br>December 31, | |||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| 2024 | 2023 | 2024<br><br>vs. 2023 | 2024 | 2023 | 2024<br><br>vs. 2023 | |||||||
| (Dollars and shares in millions, except per share amounts) | ||||||||||||
| Operating revenues | ||||||||||||
| UScellular | $ | 970 | $ | 1,000 | (3) | % | $ | 3,770 | $ | 3,906 | (3) | % |
| TDS Telecom | 264 | 261 | 1 | % | 1,061 | 1,028 | 3 | % | ||||
| All Other1 | 6 | 52 | (90) | % | 133 | 226 | (41) | % | ||||
| 1,240 | 1,313 | (6) | % | 4,964 | 5,160 | (4) | % | |||||
| Operating expenses | ||||||||||||
| UScellular | ||||||||||||
| Expenses excluding depreciation, amortization and accretion | 811 | 812 | — | 2,960 | 3,096 | (4) | % | |||||
| Depreciation, amortization and accretion | 165 | 166 | — | 665 | 656 | 1 | % | |||||
| Loss on impairment of licenses | — | — | — | 136 | — | N/M | ||||||
| (Gain) loss on asset disposals, net | 4 | 3 | 3 | % | 18 | 17 | 3 | % | ||||
| (Gain) loss on license sales and exchanges, net | (1) | (2) | 59 | % | 3 | (2) | N/M | |||||
| 979 | 979 | — | 3,782 | 3,767 | — | |||||||
| TDS Telecom | ||||||||||||
| Expenses excluding depreciation, amortization and accretion | 187 | 186 | 1 | % | 721 | 749 | (4) | % | ||||
| Depreciation, amortization and accretion | 72 | 65 | 10 | % | 271 | 245 | 10 | % | ||||
| Loss on impairment of intangible assets | 1 | 547 | (100) | % | 1 | 547 | (100) | % | ||||
| (Gain) loss on asset disposals, net | 4 | 1 | N/M | 12 | 10 | 28 | % | |||||
| (Gain) loss on sale of business and other exit costs, net | (49) | — | N/M | (49) | — | N/M | ||||||
| 215 | 799 | (73) | % | 956 | 1,551 | (38) | % | |||||
| All Other1 | ||||||||||||
| Expenses excluding depreciation and amortization | 16 | 56 | (73) | % | 175 | 242 | (28) | % | ||||
| Depreciation and amortization | 1 | 3 | (71) | % | 7 | 14 | (47) | % | ||||
| (Gain) loss on sale of business and other exit costs, net | (8) | — | N/M | (19) | — | N/M | ||||||
| Total operating expenses | 9 | 59 | (85) | % | 163 | 256 | (36) | % | ||||
| 1,203 | 1,837 | (35) | % | 4,901 | 5,574 | (12) | % | |||||
| Operating income (loss) | ||||||||||||
| UScellular | (9) | 21 | N/M | (12) | 139 | N/M | ||||||
| TDS Telecom | 49 | (538) | N/M | 105 | (523) | N/M | ||||||
| All Other1 | (4) | (7) | 53 | % | (30) | (30) | (1) | % | ||||
| 37 | (524) | N/M | 63 | (414) | N/M | |||||||
| Investment and other income (expense) | ||||||||||||
| Equity in earnings of unconsolidated entities | 39 | 37 | 3 | % | 164 | 159 | 3 | % | ||||
| Interest and dividend income | 7 | 4 | 80 | % | 27 | 20 | 36 | % | ||||
| Interest expense | (72) | (66) | (9) | % | (279) | (244) | (15) | % | ||||
| Other, net | 2 | 1 | N/M | 5 | 2 | N/M | ||||||
| Total investment and other income (expense) | (24) | (24) | (1) | % | (83) | (63) | (33) | % | ||||
| Income (loss) before income taxes | 13 | (548) | N/M | (20) | (477) | 96 | % | |||||
| Income tax expense (benefit) | 6 | (45) | N/M | 6 | 10 | (34) | % | |||||
| Net income (loss) | 7 | (503) | N/M | (26) | (487) | 95 | % | |||||
| Less: Net income attributable to noncontrolling interests, net of tax | 1 | 3 | (53) | % | 2 | 13 | (90) | % | ||||
| Net income (loss) attributable to TDS shareholders | 6 | (506) | N/M | (28) | (500) | 94 | % | |||||
| TDS Preferred Share dividends | 17 | 17 | — | 69 | 69 | — | ||||||
| Net income (loss) attributable to TDS common shareholders | $ | (11) | $ | (523) | 98 | % | $ | (97) | $ | (569) | 83 | % |
| Basic weighted average shares outstanding | 114 | 113 | 1 | % | 114 | 113 | 1 | % | ||||
| Basic earnings (loss) per share attributable to TDS common shareholders | $ | (0.10) | $ | (4.64) | 98 | % | $ | (0.85) | $ | (5.05) | 83 | % |
| Diluted weighted average shares outstanding | 114 | 113 | 1 | % | 114 | 113 | 1 | % | ||||
| Diluted earnings (loss) per share attributable to TDS common shareholders | $ | (0.10) | $ | (4.64) | 98 | % | $ | (0.85) | $ | (5.06) | 83 | % |
| N/M - Percentage change not meaningful. | ||||||||||||
| Numbers may not foot due to rounding. |
1 Consists of TDS corporate, intercompany eliminations and all other business operations not included in the UScellular and TDS Telecom segments.
Telephone and Data Systems, Inc.
Consolidated Statement of Cash Flows
(Unaudited)
| Year Ended December 31, | 2024 | 2023 | ||
|---|---|---|---|---|
| (Dollars in millions) | ||||
| Cash flows from operating activities | ||||
| Net income (loss) | $ | (26) | $ | (487) |
| Add (deduct) adjustments to reconcile net income (loss) to net cash flows from operating activities | ||||
| Depreciation, amortization and accretion | 943 | 915 | ||
| Bad debts expense | 106 | 111 | ||
| Stock-based compensation expense | 71 | 41 | ||
| Deferred income taxes, net | 3 | 8 | ||
| Equity in earnings of unconsolidated entities | (164) | (159) | ||
| Distributions from unconsolidated entities | 169 | 150 | ||
| Loss on impairment of intangible assets | 137 | 547 | ||
| (Gain) loss on asset disposals, net | 30 | 27 | ||
| (Gain) loss on sale of business and other exit costs, net | (68) | — | ||
| (Gain) loss on license sales and exchanges, net | 3 | (2) | ||
| Other operating activities | 9 | 8 | ||
| Changes in assets and liabilities from operations | ||||
| Accounts receivable | (10) | 2 | ||
| Equipment installment plans receivable | (37) | (20) | ||
| Inventory | 20 | 61 | ||
| Accounts payable | (40) | (99) | ||
| Customer deposits and deferred revenues | 9 | (8) | ||
| Accrued taxes | (4) | 50 | ||
| Other assets and liabilities | (6) | (3) | ||
| Net cash provided by operating activities | 1,145 | 1,142 | ||
| Cash flows from investing activities | ||||
| Cash paid for additions to property, plant and equipment | (884) | (1,211) | ||
| Cash paid for licenses | (20) | (130) | ||
| Cash received from divestitures | 147 | 1 | ||
| Other investing activities | 3 | 13 | ||
| Net cash used in investing activities | (754) | (1,327) | ||
| Cash flows from financing activities | ||||
| Issuance of long-term debt | 440 | 1,081 | ||
| Repayment of long-term debt | (456) | (723) | ||
| Repayment of short-term debt | — | (60) | ||
| TDS Common Shares reissued for stock-based compensation awards, net of tax payments | (2) | (3) | ||
| UScellular Common Shares reissued for stock-based compensation awards, net of tax payments | (11) | (6) | ||
| Repurchase of TDS Common Shares | — | (6) | ||
| Repurchase of UScellular Common Shares | (54) | — | ||
| Dividends paid to TDS shareholders | (104) | (153) | ||
| Payment of debt issuance costs | (16) | (5) | ||
| Distributions to noncontrolling interests | (5) | (3) | ||
| Cash paid for software license agreements | (67) | (66) | ||
| Other financing activities | (2) | — | ||
| Net cash provided by (used in) financing activities | (277) | 56 | ||
| Net increase (decrease) in cash, cash equivalents and restricted cash | 114 | (129) | ||
| Cash, cash equivalents and restricted cash | ||||
| Beginning of period | 270 | 399 | ||
| End of period | $ | 384 | $ | 270 |
Telephone and Data Systems, Inc.
Consolidated Balance Sheet Highlights
(Unaudited)
ASSETS
| December 31, | 2024 | 2023 | ||
|---|---|---|---|---|
| (Dollars in millions) | ||||
| Current assets | ||||
| Cash and cash equivalents | $ | 364 | $ | 236 |
| Accounts receivable, net | 1,041 | 1,074 | ||
| Inventory, net | 183 | 208 | ||
| Prepaid expenses | 72 | 86 | ||
| Income taxes receivable | 2 | 4 | ||
| Other current assets | 33 | 52 | ||
| Total current assets | 1,695 | 1,660 | ||
| Assets held for sale | — | 15 | ||
| Licenses | 4,588 | 4,702 | ||
| Other intangible assets, net | 161 | 183 | ||
| Investments in unconsolidated entities | 500 | 505 | ||
| Property, plant and equipment, net | 4,994 | 5,062 | ||
| Operating lease right-of-use assets | 982 | 987 | ||
| Other assets and deferred charges | 762 | 807 | ||
| Total assets | $ | 13,682 | $ | 13,921 |
Telephone and Data Systems, Inc.
Consolidated Balance Sheet Highlights
(Unaudited)
LIABILITIES AND EQUITY
| December 31, | 2024 | 2023 | ||
|---|---|---|---|---|
| (Dollars in millions, except per share amounts) | ||||
| Current liabilities | ||||
| Current portion of long-term debt | $ | 31 | $ | 26 |
| Accounts payable | 280 | 360 | ||
| Customer deposits and deferred revenues | 283 | 277 | ||
| Accrued interest | 16 | 12 | ||
| Accrued taxes | 39 | 43 | ||
| Accrued compensation | 150 | 149 | ||
| Short-term operating lease liabilities | 153 | 147 | ||
| Other current liabilities | 138 | 170 | ||
| Total current liabilities | 1,090 | 1,184 | ||
| Deferred liabilities and credits | ||||
| Deferred income tax liability, net | 981 | 975 | ||
| Long-term operating lease liabilities | 867 | 890 | ||
| Other deferred liabilities and credits | 809 | 784 | ||
| Long-term debt, net | 4,051 | 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 | 2,574 | 2,558 | ||
| Preferred Shares, par value $0.01 per share | 1,074 | 1,074 | ||
| Treasury shares, at cost | (425) | (465) | ||
| Accumulated other comprehensive income | 18 | 11 | ||
| Retained earnings | 1,849 | 2,023 | ||
| Total TDS shareholders' equity | 5,091 | 5,202 | ||
| Noncontrolling interests | 777 | 794 | ||
| Total equity | 5,868 | 5,996 | ||
| Total liabilities and equity | $ | 13,682 | $ | 13,921 |
Balance Sheet Highlights
(Unaudited)
| December 31, 2024 | ||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| UScellular | TDS<br><br>Telecom | TDS Corporate<br><br>& Other | Intercompany<br><br>Eliminations | TDS<br><br>Consolidated | ||||||||
| (Dollars in millions) | ||||||||||||
| Cash and cash equivalents | $ | 144 | $ | 142 | $ | 218 | $ | (140) | $ | 364 | ||
| Licenses and other intangible assets | $ | 4,579 | $ | 164 | $ | 6 | $ | — | $ | 4,749 | ||
| Investment in unconsolidated entities | 454 | 4 | 50 | (8) | 500 | |||||||
| $ | 5,033 | $ | 168 | $ | 56 | $ | (8) | $ | 5,249 | |||
| Property, plant and equipment, net | $ | 2,502 | $ | 2,475 | $ | 17 | $ | — | $ | 4,994 | ||
| Long-term debt, net: | ||||||||||||
| Current portion | $ | 22 | $ | — | $ | 9 | $ | — | $ | 31 | ||
| Non-current portion | 2,837 | 3 | 1,211 | — | 4,051 | |||||||
| $ | 2,859 | $ | 3 | $ | 1,220 | $ | — | $ | 4,082 | |||
| United States Cellular Corporation | ||||||||||||
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
| Segment Results | ||||||||||||
| (Unaudited) | ||||||||||||
| Three Months Ended<br>December 31, | Year Ended<br>December 31, | |||||||||||
| UScellular | 2024 | 2023 | 2024<br>vs. 2023 | 2024 | 2023 | 2024<br>vs. 2023 | ||||||
| (Dollars in millions) | ||||||||||||
| Operating Revenues | ||||||||||||
| Wireless | $ | 944 | $ | 975 | (3) | % | $ | 3,667 | $ | 3,805 | (4) | % |
| Towers | 59 | 57 | 3 | % | 234 | 228 | 3 | % | ||||
| Intra-company eliminations | (33) | (32) | (3) | % | (131) | (127) | (3) | % | ||||
| Total operating revenues | 970 | 1,000 | (3) | % | 3,770 | 3,906 | (3) | % | ||||
| Operating expenses | ||||||||||||
| Wireless | 971 | 975 | — | 3,757 | 3,743 | — | ||||||
| Towers | 41 | 36 | 12 | % | 156 | 151 | 3 | % | ||||
| Intra-company eliminations | (33) | (32) | (3) | % | (131) | (127) | (3) | % | ||||
| Total operating expenses | 979 | 979 | — | 3,782 | 3,767 | — | ||||||
| Operating income (loss) | $ | (9) | $ | 21 | N/M | $ | (12) | $ | 139 | N/M | ||
| Adjusted OIBDA (Non-GAAP) | $ | 167 | $ | 194 | (14) | % | $ | 845 | $ | 818 | 3 | % |
| Adjusted EBITDA (Non-GAAP) | $ | 208 | $ | 233 | (11) | % | $ | 1,018 | $ | 986 | 3 | % |
| Capital expenditures | $ | 162 | $ | 148 | 9 | % | $ | 577 | $ | 611 | (6) | % |
N/M - Percentage change not meaningful
| United States Cellular Corporation | ||||||||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Segment Results | ||||||||||||||||||||||||||
| (Unaudited) | ||||||||||||||||||||||||||
| Three Months Ended<br>December 31, | Year Ended<br>December 31, | |||||||||||||||||||||||||
| UScellular Wireless | 2024 | 2023 | 2024<br>vs. 2023 | 2024 | 2023 | 2024<br>vs. 2023 | ||||||||||||||||||||
| (Dollars in millions) | ||||||||||||||||||||||||||
| Retail service | $ | 661 | $ | 678 | (3) | % | $ | 2,674 | $ | 2,742 | (2) | % | ||||||||||||||
| Other | 55 | 52 | 7 | % | 210 | 201 | 5 | % | ||||||||||||||||||
| Service revenues | 716 | 730 | (2) | % | 2,884 | 2,943 | (2) | % | ||||||||||||||||||
| Equipment sales | 228 | 245 | (7) | % | 783 | 862 | (9) | % | ||||||||||||||||||
| Total operating revenues | 944 | 975 | (3) | % | 3,667 | 3,805 | (4) | % | ||||||||||||||||||
| System operations (excluding Depreciation, amortization and accretion reported below) | 195 | 197 | (1) | % | 777 | 794 | (2) | % | ||||||||||||||||||
| Cost of equipment sold | 276 | 280 | (1) | % | 906 | 988 | (8) | % | ||||||||||||||||||
| Selling, general and administrative | 344 | 340 | 1 | % | 1,298 | 1,334 | (3) | % | ||||||||||||||||||
| Depreciation, amortization and accretion | 153 | 155 | — | 620 | 610 | 1 | % | |||||||||||||||||||
| Loss on impairment of licenses | — | — | — | 136 | — | N/M | ||||||||||||||||||||
| (Gain) loss on asset disposals, net | 4 | 5 | (37) | % | 17 | 19 | (11) | % | ||||||||||||||||||
| (Gain) loss on license sales and exchanges, net | (1) | (2) | 59 | % | 3 | (2) | N/M | |||||||||||||||||||
| Total operating expenses | 971 | 975 | — | 3,757 | 3,743 | — | ||||||||||||||||||||
| Operating income (loss) | $ | (27) | $ | — | N/M | $ | (90) | $ | 62 | N/M | ||||||||||||||||
| Adjusted OIBDA (Non-GAAP) | $ | 137 | $ | 164 | (16) | % | $ | 719 | $ | 697 | 3 | % | ||||||||||||||
| Adjusted EBITDA (Non-GAAP) | $ | 137 | $ | 164 | (16) | % | $ | 719 | $ | 697 | 3 | % | ||||||||||||||
| Capital expenditures | $ | 154 | $ | 127 | 21 | % | $ | 554 | $ | 580 | (5) | % | Three Months Ended<br>December 31, | Year Ended<br>December 31, | ||||||||||||
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | ||||||||||||||
| UScellular Towers | 2024 | 2023 | 2024<br>vs. 2023 | 2024 | 2023 | 2024<br>vs. 2023 | ||||||||||||||||||||
| (Dollars in millions) | ||||||||||||||||||||||||||
| Third-party revenues | $ | 26 | $ | 25 | 4 | % | $ | 103 | $ | 101 | 2 | % | ||||||||||||||
| Intra-company revenues | 33 | 32 | 3 | % | 131 | 127 | 3 | % | ||||||||||||||||||
| Total tower revenues | 59 | 57 | 3 | % | 234 | 228 | 3 | % | ||||||||||||||||||
| System operations (excluding Depreciation, amortization and accretion reported below) | 20 | 18 | 11 | % | 78 | 73 | 6 | % | ||||||||||||||||||
| Selling, general and administrative | 9 | 9 | 2 | % | 32 | 34 | (5) | % | ||||||||||||||||||
| Depreciation, amortization and accretion | 12 | 11 | — | 45 | 46 | (1) | % | |||||||||||||||||||
| (Gain) loss on asset disposals, net | — | (2) | N/M | 1 | (2) | N/M | ||||||||||||||||||||
| Total operating expenses | 41 | 36 | 12 | % | 156 | 151 | 3 | % | ||||||||||||||||||
| Operating income | $ | 18 | $ | 21 | (11) | % | $ | 78 | $ | 77 | 2 | % | ||||||||||||||
| Adjusted OIBDA (Non-GAAP) | $ | 30 | $ | 30 | — | $ | 126 | $ | 121 | 4 | % | |||||||||||||||
| Adjusted EBITDA (Non-GAAP) | $ | 30 | $ | 30 | — | $ | 126 | $ | 121 | 4 | % | |||||||||||||||
| Capital expenditures | $ | 8 | $ | 21 | (62) | % | $ | 23 | $ | 31 | (24) | % |
N/M - Percentage change not meaningful
TDS Telecom Highlights
(Unaudited)
| Three Months Ended<br>December 31, | Year Ended<br>December 31, | |||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| 2024 | 2023 | 2024 vs. 2023 | 2024 | 2023 | 2024 vs. 2022 | |||||||
| (Dollars in millions) | ||||||||||||
| Operating revenues | ||||||||||||
| Residential | ||||||||||||
| Incumbent | $ | 86 | $ | 88 | (2) | % | $ | 355 | $ | 352 | 1 | % |
| Expansion | 31 | 23 | 39 | % | 114 | 75 | 52 | % | ||||
| Cable | 65 | 69 | (5) | % | 270 | 273 | (1) | % | ||||
| Total residential | 182 | 179 | 2 | % | 740 | 700 | 6 | % | ||||
| Commercial | 37 | 37 | — | 148 | 155 | (5) | % | |||||
| Wholesale | 44 | 45 | — | 173 | 172 | — | ||||||
| Total service revenues | 264 | 261 | 1 | % | 1,060 | 1,027 | 3 | % | ||||
| Equipment revenues | — | — | 19 | % | 1 | 1 | (3) | % | ||||
| Total operating revenues | 264 | 261 | 1 | % | 1,061 | 1,028 | 3 | % | ||||
| Cost of services | 103 | 104 | (1) | % | 400 | 423 | (5) | % | ||||
| Cost of equipment and products | — | — | N/M | 1 | — | 58 | % | |||||
| Selling, general and administrative expenses | 84 | 82 | 2 | % | 320 | 326 | (2) | % | ||||
| Depreciation, amortization and accretion | 72 | 65 | 10 | % | 271 | 245 | 10 | % | ||||
| Loss on impairment of intangible assets | 1 | 547 | (100) | % | 1 | 547 | (100) | % | ||||
| (Gain) loss on asset disposals, net | 4 | 1 | N/M | 12 | 10 | 28 | % | |||||
| (Gain) loss on sale of business and other exit costs, net | (49) | — | N/M | (49) | — | N/M | ||||||
| Total operating expenses | 215 | 799 | (73) | % | 956 | 1,551 | (38) | % | ||||
| Operating income (loss) | $ | 49 | $ | (538) | N/M | $ | 105 | $ | (523) | N/M | ||
| Adjusted OIBDA (Non-GAAP) | $ | 77 | $ | 76 | 2 | % | $ | 340 | $ | 279 | 22 | % |
| Adjusted EBITDA (Non-GAAP) | $ | 80 | $ | 78 | 3 | % | $ | 350 | $ | 285 | 23 | % |
| Capital expenditures | $ | 82 | $ | 143 | (43) | % | $ | 324 | $ | 577 | (44) | % |
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>December 31, | Year Ended<br>December 31, | |||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| TDS Consolidated | 2024 | 2023 | 2024 | 2023 | ||||||||||||||
| (Dollars in millions) | ||||||||||||||||||
| Cash flows from operating activities (GAAP) | $ | 213 | $ | 218 | $ | 1,145 | $ | 1,142 | ||||||||||
| Cash paid for additions to property, plant and equipment | (230) | (304) | (884) | (1,211) | ||||||||||||||
| Cash paid for software license agreements | (35) | (37) | (67) | (66) | ||||||||||||||
| Free cash flow (Non-GAAP)1 | $ | (52) | $ | (123) | $ | 194 | $ | (135) | Three Months Ended<br>December 31, | Year Ended<br>December 31, | ||||||||
| --- | --- | --- | --- | --- | --- | --- | --- | --- | ||||||||||
| UScellular | 2024 | 2023 | 2024 | 2023 | ||||||||||||||
| (Dollars in millions) | ||||||||||||||||||
| Cash flows from operating activities (GAAP) | $ | 121 | $ | 148 | $ | 883 | $ | 866 | ||||||||||
| Cash paid for additions to property, plant and equipment | (139) | (155) | (537) | (608) | ||||||||||||||
| Cash paid for software license agreements | (35) | (37) | (66) | (66) | ||||||||||||||
| Free cash flow (Non-GAAP)1 | $ | (53) | $ | (44) | $ | 280 | $ | 192 |
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.
Intangible assets impairment, net of tax
The following non-GAAP financial measure isolates the total effects on net income of the Loss on impairment of intangible assets at TDS Telecom and UScellular, including tax impacts. TDS believes this measure may be useful to investors and other users of its financial information to assist in comparing financial results with periods that were not impacted by impairment charges.
| Three Months Ended<br>December 31, | Year Ended<br>December 31, | |||||||
|---|---|---|---|---|---|---|---|---|
| 2024 | 2023 | 2024 | 2023 | |||||
| (Dollars in millions) | ||||||||
| Net income (loss) attributable to TDS common shareholders (GAAP) | $ | (11) | $ | (523) | $ | (97) | $ | (569) |
| Adjustments: | ||||||||
| Loss on impairment of intangible assets | 1 | 547 | 137 | 547 | ||||
| Deferred tax benefit on the tax-amortizable portion of the impaired intangible assets | — | (36) | (34) | (36) | ||||
| UScellular noncontrolling public shareholders' portion of the intangible assets | — | — | (18) | — | ||||
| Subtotal of Non-GAAP adjustments | 1 | 511 | 85 | 511 | ||||
| Net income (loss) attributable to TDS common shareholders excluding intangible assets impairment charge (Non-GAAP) | (10) | (12) | (12) | (58) | ||||
| Noncontrolling interest adjustment to compute diluted earnings (loss) per share | — | — | — | (1) | ||||
| Net income (loss) attributable to TDS common shareholders excluding intangible assets impairment charge used in diluted earnings (loss) per share (Non-GAAP) | $ | (10) | $ | (12) | $ | (12) | $ | (59) |
| Diluted weighted average shares outstanding used for diluted earnings (loss) per share attributable to TDS common shareholders | 114 | 113 | 114 | 113 | ||||
| Diluted weighted average shares outstanding used for diluted earnings (loss) per share attributable to TDS common shareholders excluding intangible assets impairment charge | 114 | 113 | 114 | 113 | ||||
| Diluted earnings (loss) per share attributable to TDS common shareholders (GAAP) | $ | (0.10) | $ | (4.64) | $ | (0.85) | $ | (5.06) |
| Adjustments: | ||||||||
| Loss on impairment of intangible assets | 0.01 | 4.85 | 1.20 | 4.85 | ||||
| Deferred tax benefit on the tax-amortizable portion of the impaired intangible assets | — | (0.32) | (0.30) | (0.32) | ||||
| UScellular noncontrolling public shareholders' portion of the impaired intangible assets | — | — | (0.16) | — | ||||
| Diluted earnings (loss) per share attributable to TDS common shareholders excluding intangible assets impairment charge (Non-GAAP) | $ | (0.09) | $ | (0.11) | $ | (0.11) | $ | (0.53) |
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 (loss) and Income (loss) before income taxes. Income and expense items below Operating income (loss) 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 (loss) rather than Net income (loss) at the segment level.
| Three Months Ended<br>December 31, | Year Ended<br>December 31, | |||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| UScellular | 2024 | 2023 | 2024 | 2023 | ||||||||||||||
| (Dollars in millions) | ||||||||||||||||||
| Net income (loss) (GAAP) | $ | 5 | $ | 15 | $ | (32) | $ | 58 | ||||||||||
| Add back or deduct: | ||||||||||||||||||
| Income tax expense (benefit) | (19) | (4) | 10 | 53 | ||||||||||||||
| Income (loss) before income taxes (GAAP) | (14) | 11 | (22) | 111 | ||||||||||||||
| Add back: | ||||||||||||||||||
| Interest expense | 46 | 49 | 183 | 196 | ||||||||||||||
| Depreciation, amortization and accretion expense | 165 | 166 | 665 | 656 | ||||||||||||||
| EBITDA (Non-GAAP) | 197 | 226 | 826 | 963 | ||||||||||||||
| Add back or deduct: | ||||||||||||||||||
| Expenses related to strategic alternatives review | 8 | 6 | 35 | 8 | ||||||||||||||
| Loss on impairment of licenses | — | — | 136 | — | ||||||||||||||
| (Gain) loss on asset disposals, net | 4 | 3 | 18 | 17 | ||||||||||||||
| (Gain) loss on license sales and exchanges, net | (1) | (2) | 3 | (2) | ||||||||||||||
| Adjusted EBITDA (Non-GAAP) | 208 | 233 | 1,018 | 986 | ||||||||||||||
| Deduct: | ||||||||||||||||||
| Equity in earnings of unconsolidated entities | 38 | 37 | 161 | 158 | ||||||||||||||
| Interest and dividend income | 3 | 2 | 12 | 10 | ||||||||||||||
| Adjusted OIBDA (Non-GAAP) | $ | 167 | $ | 194 | $ | 845 | $ | 818 | ||||||||||
| Three Months Ended<br>December 31, | Year Ended<br>December 31, | |||||||||||||||||
| --- | --- | --- | --- | --- | --- | --- | --- | --- | ||||||||||
| UScellular Wireless | 2024 | 2023 | 2024 | 2023 | ||||||||||||||
| (Dollars in millions) | ||||||||||||||||||
| EBITDA (Non-GAAP) | $ | 126 | $ | 155 | $ | 530 | $ | 672 | ||||||||||
| Add back or deduct: | ||||||||||||||||||
| Expenses related to strategic alternatives review | 8 | 6 | 33 | 8 | ||||||||||||||
| Loss on impairment of licenses | — | — | 136 | — | ||||||||||||||
| (Gain) loss on asset disposals, net | 4 | 5 | 17 | 19 | ||||||||||||||
| (Gain) loss on license sales and exchanges, net | (1) | (2) | 3 | (2) | ||||||||||||||
| Adjusted EBITDA and Adjusted OIBDA (Non-GAAP) | 137 | 164 | 719 | 697 | ||||||||||||||
| Deduct: | ||||||||||||||||||
| Depreciation, amortization and accretion | 153 | 155 | 620 | 610 | ||||||||||||||
| Expenses related to strategic alternatives review | 8 | 6 | 33 | 8 | ||||||||||||||
| Loss on impairment of licenses | — | — | 136 | — | ||||||||||||||
| (Gain) loss on asset disposals, net | 4 | 5 | 17 | 19 | ||||||||||||||
| (Gain) loss on license sales and exchanges, net | (1) | (2) | 3 | (2) | ||||||||||||||
| Operating income (loss) (GAAP) | $ | (27) | $ | — | $ | (90) | $ | 62 | ||||||||||
| Three Months Ended<br>December 31, | Year Ended<br>December 31, | |||||||||||||||||
| --- | --- | --- | --- | --- | --- | --- | --- | --- | ||||||||||
| UScellular Towers | 2024 | 2023 | 2024 | 2023 | ||||||||||||||
| (Dollars in millions) | ||||||||||||||||||
| EBITDA (Non-GAAP) | $ | 30 | $ | 32 | $ | 123 | $ | 123 | ||||||||||
| Add back or deduct: | ||||||||||||||||||
| Expenses related to strategic alternatives review | — | — | 2 | — | ||||||||||||||
| (Gain) loss on asset disposals, net | — | (2) | 1 | (2) | ||||||||||||||
| Adjusted EBITDA and Adjusted OIBDA (Non-GAAP) | 30 | 30 | 126 | 121 | ||||||||||||||
| Deduct: | ||||||||||||||||||
| Depreciation, amortization and accretion | 12 | 11 | 45 | 46 | ||||||||||||||
| Expenses related to strategic alternatives review | — | — | 2 | — | ||||||||||||||
| (Gain) loss on asset disposals, net | — | (2) | 1 | (2) | ||||||||||||||
| Operating income (GAAP) | $ | 18 | $ | 21 | $ | 78 | $ | 77 | Three Months Ended<br>December 31, | Year Ended<br>December 31, | ||||||||
| --- | --- | --- | --- | --- | --- | --- | --- | --- | ||||||||||
| TDS Telecom | 2024 | 2023 | 2024 | 2023 | ||||||||||||||
| (Dollars in millions) | ||||||||||||||||||
| Net income (loss) (GAAP) | $ | 34 | $ | (503) | $ | 85 | $ | (483) | ||||||||||
| Add back or deduct: | ||||||||||||||||||
| Income tax expense (benefit) | 20 | (31) | 35 | (26) | ||||||||||||||
| Income (loss) before income taxes (GAAP) | 54 | (534) | 120 | (509) | ||||||||||||||
| Add back: | ||||||||||||||||||
| Interest expense | (2) | (2) | (5) | (8) | ||||||||||||||
| Depreciation, amortization and accretion expense | 72 | 65 | 271 | 245 | ||||||||||||||
| EBITDA (Non-GAAP) | 124 | (470) | 385 | (272) | ||||||||||||||
| Add back or deduct: | ||||||||||||||||||
| Loss on impairment of intangible assets | 1 | 547 | 1 | 547 | ||||||||||||||
| (Gain) loss on asset disposals, net | 4 | 1 | 12 | 10 | ||||||||||||||
| (Gain) loss on sale of business and other exit costs, net | (49) | — | (49) | — | ||||||||||||||
| Adjusted EBITDA (Non-GAAP) | 80 | 78 | 350 | 285 | ||||||||||||||
| Deduct: | ||||||||||||||||||
| Interest and dividend income | 2 | 1 | 5 | 4 | ||||||||||||||
| Other, net | 1 | 1 | 4 | 2 | ||||||||||||||
| Adjusted OIBDA (Non-GAAP) | $ | 77 | $ | 76 | $ | 340 | $ | 279 |
18