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Jane McCahon

Senior Vice President - Corporate Relations

Phone: 312.592.5379
jane.mccahon@tdsinc.com
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TDS reports first quarter 2017 results

05/05/2017

CHICAGO, May 5, 2017 /PRNewswire/ -- 

As previously announced, TDS will hold a teleconference May 5, 2017, at 9:30 a.m. CDT. Listen to the call live via the Events & Presentations page of investors.tdsinc.com.

Telephone and Data Systems, Inc. (NYSE:TDS) reported total operating revenues of $1,238 million for the first quarter of 2017, versus $1,254 million for the same period one year ago. Net income attributable to TDS shareholders and related diluted earnings per share were $37 million and $0.33, respectively, for the first quarter of 2017, compared to $8 million and $0.07, respectively, in the same period one year ago.

"TDS businesses started the year by showing a solid first quarter," said LeRoy T. Carlson Jr., TDS president and CEO. "U.S. Cellular maintained strong customer loyalty, continued network investments and generated a strong increase in profitability, while TDS Telecom grew both IPTV and broadband connections, increasing both revenue and profitability.

"U.S. Cellular drove exceptionally low levels of postpaid handset churn by providing customers with the network quality, service offerings and product portfolios they want.  Our unlimited data plans are achieving rapid adoption and our recent launch of the Samsung Galaxy S8 is progressing well. U.S. Cellular continued enhancing its already high-quality network by investing in Voice over LTE (VoLTE) technology. We are very pleased with the low-band, 600 MHz spectrum we are purchasing at reasonable prices for the vast majority of our markets.

"TDS Telecom's Wireline segment maintained its momentum in IPTV growth by adding new connections and by increasing average revenue per connection.  Our Cable segment increased its broadband connections, generating higher residential revenue. Our hosted and managed services company, OneNeck IT Solutions, significantly increased equipment revenues."

2017 Estimated Results

Current estimates of full-year 2017 results for U.S. Cellular, TDS Telecom, and TDS are shown below.  Such estimates represent management's view as of May 5, 2017.  Such forward-looking statements should not be assumed to be current as of any future date.  TDS undertakes no duty to update such information, whether as a result of new information, future events, or otherwise.  There can be no assurance that final results will not differ materially from such estimated results. 



2017 Estimated Results
















U.S. Cellular


TDS Telecom


TDS(3)



Current

Previous


Current

Previous


Current

Previous

(Dollars in millions)












Total operating revenues (1)

$3,800-$4,000

Unchanged


$1,200-$1,250

Unchanged


$5,015-$5,265

Unchanged

Operating cash flow (1)(2)(4)

$550-$650

$500-$650


$300-$340

Unchanged


$855-$995

$805-$995

Adjusted EBITDA (2)

$700-$800

$650-$800


$300-$340

Unchanged


$1,005-$1,145

$955-$1,145

Capital expenditures (Approximately)

$500

Unchanged


$225

Unchanged


$735

Unchanged

The following tables provide reconciliations of Net income to Operating cash flow and Adjusted EBITDA for 2017 estimated results, actual results for the three months ended March 31, 2017, and actual results for the year ended December 31, 2016. In providing 2017 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.





2017 Estimated Results
















U.S. Cellular



TDS Telecom



TDS(3)

(Dollars in millions)









Net income (loss) (GAAP)


N/A



N/A



N/A

Add back:










Income tax expense (benefit)


N/A



N/A



N/A

Income (loss) before income taxes










(GAAP)

$

(45)-55


$

80-120


$

(25)-115

Add back:










Interest expense


110





165


Depreciation, amortization and











accretion expense


630



220



860

EBITDA (Non-GAAP)

$

695-795


$

300-340


$

1,000-1,140

Add back:










(Gain) loss on sale of business and











other exit costs, net







(Gain) loss on license sales and











exchanges, net


(15)





(15)


(Gain) loss on asset disposals, net


20





20

Adjusted EBITDA (Non-GAAP) (2)

$

700-800


$

300-340


$

1,005-1,145

Deduct:










Equity in earnings of unconsolidated











entities


140





140


Interest and dividend income;











other income(1)


10





10

Operating cash flow (Non-GAAP)(1)(2)(4)

$

550-650


$

300-340


$

855-995

 




Actual Results



















Three Months Ended March 31, 2017

Year ended December 31, 2016




U.S. Cellular

TDS

Telecom

TDS (3)

U.S. Cellular

TDS

Telecom

TDS (3)

(Dollars in millions)







Net income (GAAP)

$

28

$

18

$

43

$

49

$

42

$

52

Add back:








Income tax expense


33


11


34


33


25


40

Income before income taxes














(GAAP)

$

61

$

29

$

77

$

82

$

67

$

92

Add back:








Interest expense


28


1


42


113


3


170


Depreciation, amortization and















accretion expense


153


56


211


618


224


850

EBITDA (Non-GAAP)

$

242

$

86

$

330

$

813

$

294

$

1,112

Add back:














(Gain) loss on sale of business and















other exit costs, net







(1)


(Gain) loss on license sales and















exchanges, net


(17)



(17)


(19)


(1)


(20)


(Gain) loss on asset disposals, net


4


1


4


22


4


27

Adjusted EBITDA (Non-GAAP) (2)

$

229

$

86

$

317

$

816

$

298

$

1,118

Deduct:














Equity in earnings of unconsolidated















entities


33



32


140



140


Interest and dividend income;















other income (1)


3


1


4


6


3


11


Other, net


(1)



1


1



Operating cash flow (Non-GAAP) (1)(2)(4)

$

194

$

85

$

280

$

669

$

295

$

967

















Note: Totals may not foot due to rounding differences.



(1)

Equipment installment plan interest income is reflected as a component of Service revenues consistent with an accounting policy change effective January 1, 2017.  All prior period numbers have been recast to conform to this accounting change. 



(2)

Adjusted EBITDA (earnings before interest, taxes, depreciation, amortization and accretion) is defined as net income adjusted for the items set forth in the reconciliation above.  Operating cash flow is defined as net income adjusted for the items set forth in the reconciliation above.  Adjusted EBITDA and Operating cash flow 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 non-recurring, infrequent or unusual; such items may occur in the future.  Management uses Adjusted EBITDA and Operating cash flow as measurements of profitability, and therefore reconciliations to Net income are deemed appropriate.  Management believes Adjusted EBITDA and Operating cash flow are useful measures of TDS' operating results before significant recurring non-cash charges, 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, and gains and losses, while Operating cash flow 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 Adjusted EBITDA and Operating cash flow to the corresponding GAAP measure, Net income or Income before income taxes.



(3)

The TDS column includes U.S. Cellular, TDS Telecom and also the impacts of consolidating eliminations, corporate operations and non-reportable segments, all of which are not presented above.



(4)

A reconciliation of Operating cash flow (Non-GAAP) to Operating income (GAAP) for March 31, 2017, actual results can be found on the company's website at investors.tdsinc.com.

Conference Call Information

TDS will hold a conference call on May 5, 2017 at 9:30 a.m. Central Time.

Before the call, certain financial and statistical information to be discussed during the call will be posted to investors.tdsinc.com. The call will be archived on the Events & Presentations page of investors.tdsinc.com

About TDS

Telephone and Data Systems, Inc. (TDS), a Fortune 500® company, provides wireless; cable and wireline broadband, TV and voice; and hosted and managed services to approximately 6 million customers nationwide through its businesses, U.S. Cellular, TDS Telecom, OneNeck IT Solutions, and BendBroadband. Founded in 1969 and headquartered in Chicago, TDS employed 10,300 people as of March 31, 2017.

Visit www.tdsinc.com  for comprehensive financial information, including earnings releases, quarterly and annual filings, shareholder information and more.

Safe Harbor Statement Under the Private Securities Litigation Reform Act of 1995: All information set forth in this news release, except historical and factual information, represents forward-looking statements. This includes all statements about the company's plans, beliefs, estimates, and expectations. These statements are based on current estimates, projections, and assumptions, which involve certain risks and uncertainties that could cause actual results to differ materially from those in the forward-looking statements. Important factors that may affect these forward-looking statements include, but are not limited to: intense competition; the ability to execute TDS' business strategy; uncertainties in TDS' future cash flows and liquidity and access to the capital markets; the ability to make payments on TDS and U.S. Cellular indebtedness or comply with the terms of debt covenants; impacts of any pending acquisitions/divestitures/exchanges of properties and/or licenses,  including, but not limited to, the ability to obtain regulatory approvals, successfully complete the transactions and the financial impacts of such transactions; the ability of the company to successfully manage and grow its markets; the access to and pricing of unbundled network elements; the ability to obtain or maintain roaming arrangements with other carriers on acceptable terms; the state and federal telecommunications regulatory environment; the value of assets and investments; adverse changes in the ratings of TDS and U.S. Cellular debt securities by accredited ratings organizations; industry consolidation; advances in telecommunications technology; pending and future litigation; changes in income tax rates, laws, regulations or rulings; changes in customer growth rates, average monthly revenue per user, churn rates, roaming revenue and terms, the availability of wireless devices, or the mix of services and products offered by U.S. Cellular and TDS Telecom. Investors are encouraged to consider these and other risks and uncertainties that are discussed in the Form 8-K Current Report used by TDS to furnish this press release to the Securities and Exchange Commission, which are incorporated by reference herein.    

For more information about TDS and its subsidiaries, visit:
TDS: www.tdsinc.com
U.S. Cellular: www.uscellular.com
TDS Telecom: www.tdstelecom.com
OneNeck IT Solutions: www.oneneck.com

 

United States Cellular Corporation

Summary Operating Data (Unaudited)
















As of or for the Quarter Ended

3/31/2017


12/31/2016


9/30/2016



6/30/2016


3/31/2016

Retail Connections
















Postpaid

















Total at end of period


4,455,000



4,482,000



4,484,000



4,490,000



4,454,000



Gross additions


146,000



187,000



174,000



197,000



215,000




Feature phones


7,000



7,000



10,000



8,000



9,000




Smartphones


88,000



109,000



105,000



107,000



124,000




Connected devices


51,000



71,000



59,000



82,000



82,000



Net additions (losses)


(27,000)



(2,000)



(6,000)



36,000



45,000




Feature phones


(19,000)



(21,000)



(20,000)



(21,000)



(25,000)




Smartphones


(9,000)



(4,000)



(7,000)



8,000



20,000




Connected devices


1,000



23,000



21,000



49,000



50,000



ARPU (1)

$

45.42


$

45.19


$

47.08


$

47.37


$

48.13



ABPU (Non-GAAP)(2)

$

55.82


$

55.43


$

56.79


$

56.09


$

56.06



ARPA (3)

$

121.88


$

120.67


$

125.31


$

124.91


$

125.36



ABPA (Non-GAAP)(4)

$

149.78


$

148.02


$

151.16


$

147.90


$

145.99



Churn rate (5)


1.29%



1.41%



1.34%



1.20%



1.28%




Handsets


1.08%



1.23%



1.22%



1.10%



1.18%




Connected devices


2.55%



2.49%



2.04%



1.84%



2.01%


Prepaid

















Total at end of period


480,000



484,000



480,000



413,000



399,000



Gross additions


78,000



83,000



132,000



73,000



75,000



Net additions (losses)


(4,000)



4,000



67,000



14,000



12,000



ARPU (1)

$

33.66


$

33.25


$

34.39


$

34.58


$

35.51



Churn rate (5)


5.69%



5.44%



4.84%



4.86%



5.37%

Total connections at end of period (6)


4,996,000



5,031,000



5,030,000



4,973,000



4,926,000

Market penetration at end of period
















Consolidated operating population


32,089,000



31,994,000



31,994,000



31,994,000



31,994,000


Consolidated operating penetration (7)


16%



16%



16%



16%



15%

Capital expenditures (millions)

$

61


$

171


$

103


$

93


$

79

Total cell sites in service


6,417



6,415



6,374



6,324



6,306

Owned towers


4,041



4,040



4,015



3,988



3,989






















(1)

Average Revenue Per User ("ARPU") - metric is calculated by dividing a revenue base by an average number of connections and by the number of months in the period.  These revenue bases and connection populations are shown below:



Postpaid ARPU consists of total postpaid service revenues and postpaid connections.



Prepaid ARPU consists of total prepaid service revenues and prepaid connections.

(2)

Average Billings Per User ("ABPU") - non-GAAP metric is calculated by dividing total postpaid service revenues plus equipment installment plan billings by the average number of postpaid connections and by the number of months in the period.  Refer to the end of this release for a reconciliation of this metric to its most comparable GAAP metric.

(3)

Average Revenue Per Account ("ARPA") - metric is calculated by dividing total postpaid service revenues by the average number of postpaid accounts and by the number of months in the period.

(4)

Average Billings Per Account ("ABPA") - non-GAAP metric is calculated by dividing total postpaid service revenues plus equipment installment plan billings by the average number of postpaid accounts and by the number of months in the period.  Refer to the end of this release for a reconciliation of this metric to its most comparable GAAP metric.

(5)

Churn rate represents the percentage of the connections that disconnect service each month.  These rates represent the average monthly churn rate for each respective period.

(6)

Includes reseller and other connections.

(7)

Market penetration is calculated by dividing the number of wireless connections at the end of the period by the total population of consolidated operating markets as estimated by Nielsen.

 

TDS Telecom

Summary Operating Data (Unaudited)


Quarter Ended

3/31/2017


12/31/2016


9/30/2016


6/30/2016


3/31/2016

TDS Telecom















Wireline
















Residential connections

















Voice (1)


308,200



310,600



314,600



316,800



318,400



Broadband (2)


228,500



229,500



232,800



232,200



229,100



IPTV (3)


45,200



45,300



43,600



41,200



38,300



   Wireline residential connections


581,900



585,400



590,900



590,200



585,800



















Total residential revenue per connection (4)

$

45.17


$

44.27


$

44.25


$

43.67


$

43.28



















Commercial connections

















Voice (1)


154,000



157,400



160,900



164,000



167,400



Broadband (2)


21,200



21,400



21,700



21,900



22,000



managedIP (5)


150,300



150,900



151,500



149,000



148,500



   Wireline commercial connections


325,500



329,700



334,000



334,900



337,900



















Total Wireline connections


907,400



915,200



924,900



925,100



923,700


















Cable
















Cable Connections

















Broadband (6)


137,800



133,700



130,200



125,700



121,700



Video (7)


97,600



99,000



101,100



102,900



104,600



Voice (8)


59,000



59,600



59,800



58,900



58,100



   Cable connections


294,300



292,400



291,000



287,600



284,400



















Numbers may not foot due to rounding.


















(1)

The individual circuits connecting a customer to Wireline's central office facilities.

(2)

The number of Wireline customers provided high-capacity data circuits via various technologies, including DSL and dedicated internet circuit technologies.

(3)

The number of Wireline customers provided video services using IP networking technology.

(4)

Total residential revenue per connection is calculated by dividing total Wireline residential revenue by the average number of Wireline residential connections and by the number of months in the period.

(5)

The number of telephone handsets, data lines and IP trunks providing communications using IP networking technology.

(6)

Billable number of lines into a building for high-speed data services.

(7)

Generally, a home or business receiving video programming counts as one video connection. In counting bulk residential or commercial connections, such as an apartment building or hotel, connections are counted based on the number of units/rooms within the building receiving service.

(8)

Billable number of lines into a building for voice services.

 

TDS Telecom

Capital Expenditures (millions)











Quarter Ended

3/31/2017


12/31/2016


9/30/2016


6/30/2016


3/31/2016

Wireline

$

17


$

26


$

27


$

27


$

27

Cable


9



13



11



17



13

HMS


6



5



2



2



2


$

33


$

45


$

40


$

46


$

42

 

Telephone and Data Systems, Inc.

Consolidated Statement of Operations Highlights

(Unaudited)





Three Months Ended March 31,





2017


2016


2017 vs. 2016




Increase (Decrease)

(Dollars and shares in millions, except per share amounts)











Operating revenues












U.S. Cellular (1)

$

936


$

969


$

(33)


(3)%


TDS Telecom


299



281



17


6%


All Other (2)


3



4



(1)


(8)%






1,238



1,254



(16)


(1)%

Operating expenses












U.S. Cellular













Expenses excluding depreciation, amortization and














accretion


742



801



(59)


(7)%



Depreciation, amortization and accretion


153



153




1%



(Gain) loss on asset disposals, net


4



5



(1)


(28)%



(Gain) loss on license sales and exchanges, net


(17)





(17)


N/M






882



959



(77)


(8)%


TDS Telecom













Expenses excluding depreciation, amortization and














accretion


213



205



8


4%



Depreciation, amortization and accretion


56



58



(2)


(4)%



(Gain) loss on asset disposals, net


1



1




(27)%






270



264



6


2%


All Other (1)













Expenses excluding depreciation and amortization


3



4



(1)


(42)%



Depreciation and amortization


2



1



1


(11)%



(Gain) loss on asset disposals, net


(1)





(1)


90%






4



5



(1)


(27)%




Total operating expenses


1,156



1,228



(72)


(6)%

Operating income (loss)












U.S. Cellular (1)


54



10



44


>100%


TDS Telecom


29



17



12


70%


All Other (2)


(1)



(1)




97%






82



26



56


>100%

Investment and other income (expense)












Equity in earnings of unconsolidated entities


32



35



(3)


(8)%


Interest and dividend income (1)


4



3



1


63%


Interest expense


(42)



(41)



(1)


(1)%


Other, net


1





1


>100%



Total investment and other income (1)


(5)



(3)



(2)


(33)%

Income before income taxes


77



23



54


>100%


Income tax expense


34



13



21


>100%

Net income


43



10



33


>100%


Less: Net income attributable to noncontrolling













interests, net of tax


6



2



4


>100%

Net income attributable to TDS shareholders


37



8



29


>100%


TDS Preferred dividend requirement







-

Net income available to common shareholders

$

37


$

8


$

29


>100%















Basic weighted average shares outstanding


110



109



1


1%

Basic earnings per share attributable to TDS shareholders

$

0.34


$

0.07


$

0.26


>100%















Diluted weighted average shares outstanding


112



110



2


1%

Diluted earnings per share attributable to TDS shareholders

$

0.33


$

0.07


$

0.26


>100%
















N/M – Percentage change not meaningful















(1)

Equipment installment plan interest income is reflected as a component of Service revenues consistent with an accounting policy change effective January 1, 2017.  All prior period numbers have been recast to conform to this accounting change.















(2)

Consists of TDS corporate, intercompany eliminations and all other business operations not included in the U.S. Cellular and TDS Telecom segments.

 

Telephone and Data Systems, Inc.
Consolidated Statement of Cash Flows
(Unaudited)












Three Months Ended






March 31,


2017


2016

(Dollars in millions)






Cash flows from operating activities







Net income

$

43


$

10


Add (deduct) adjustments to reconcile net income to net cash flows







  from operating activities









Depreciation, amortization and accretion


211



212




Bad debts expense


24



19




Stock-based compensation expense


11



9




Deferred income taxes, net


(1)



5




Equity in earnings of unconsolidated entities


(32)



(35)




Distributions from unconsolidated entities


11



14




(Gain) loss on asset disposals, net


4



6




(Gain) loss on license sales and exchanges, net


(17)






Noncash interest expense


1



1


Changes in assets and liabilities from operations









Accounts receivable


28



20




Equipment installment plans receivable


(44)



(41)




Inventory




(1)




Accounts payable


(75)



39




Customer deposits and deferred revenues


(12)



(6)




Accrued taxes


33



63




Accrued interest


9



9




Other assets and liabilities


(57)



(78)





Net cash provided by operating activities


137



246











Cash flows from investing activities







Cash paid for additions to property, plant and equipment


(127)



(159)


Cash paid for acquisitions and licenses


(14)




Cash received from divestitures and exchanges


16



2





Net cash used in investing activities


(125)



(157)











Cash flows from financing activities







Repayment of long-term debt


(3)



(3)


TDS Common Shares reissued for benefit plans, net of tax payments


1




U.S. Cellular Common Shares reissued for benefit plans, net of tax payments


3



1


Repurchase of TDS Common Shares




(3)


Repurchase of U.S. Cellular Common Shares




(2)


Dividends paid to TDS shareholders


(17)



(16)


Other financing activities




3





Net cash used in financing activities


(16)



(20)











Net increase (decrease) in cash and cash equivalents


(4)



69











Cash and cash equivalents







Beginning of period


900



985


End of period

$

896


$

1,054











 

Telephone and Data Systems, Inc.

Consolidated Balance Sheet Highlights

(Unaudited)







ASSETS
















March 31,


December 31,




2017


2016

(Dollars in millions)






Current assets







Cash and cash equivalents

$

896


$

900


Accounts receivable from customers and others, net


829



851


Inventory, net


151



151


Prepaid expenses


116



115


Income taxes receivable


3



10


Other current assets


30



32



Total current assets


2,025



2,059









Assets held for sale


5



8









Licenses


1,904



1,895

Goodwill


770



766

Franchise rights


244



244

Other intangible assets, net


31



33

Investments in unconsolidated entities


472



451

Other investments




1









Property, plant and equipment, net


3,449



3,555









Other assets and deferred charges


449



434









Total assets

$

9,349


$

9,446

 

Telephone and Data Systems, Inc.

Consolidated Balance Sheet Highlights

(Unaudited)








LIABILITIES AND EQUITY



















March 31,


December 31,





2017


2016

(Dollars and shares in millions, except per share amounts)






Current liabilities







Current portion of long-term debt

$

12


$

12


Accounts payable


260



365


Customer deposits and deferred revenues


217



229


Accrued interest


20



11


Accrued taxes


67



44


Accrued compensation


77



127


Other current liabilities


85



99



Total current liabilities


738



887










Deferred liabilities and credits







Deferred income tax liability, net


921



922


Other deferred liabilities and credits


467



453










Long-term debt, net


2,431



2,433










Noncontrolling interests with redemption features


1



1










Equity







TDS shareholders' equity








Series A Common and Common Shares, par value $.01


1



1



Capital in excess of par value


2,394



2,386



Treasury shares, at cost


(693)



(698)



Accumulated other comprehensive income




1



Retained earnings


2,473



2,454




   Total TDS shareholders' equity


4,175



4,144











Preferred shares


1



1


Noncontrolling interests


615



605












Total equity


4,791



4,750










Total liabilities and equity

$

9,349


$

9,446

 

Balance Sheet Highlights

(Unaudited)




March 31, 2017



U.S.


TDS


TDS Corporate


Intercompany


TDS



Cellular


Telecom


& Other


Eliminations


Consolidated

(Dollars in millions)















Cash and cash equivalents

$

572


$

21


$

303


$


$

896

Affiliated cash investments




472





(472)





$

572


$

493


$

303


$

(472)


$

896

















Licenses, goodwill and other intangible
















assets

$

2,265


$

823


$

(139)


$


$

2,949

Investment in unconsolidated entities


434



4



40



(6)



472



$

2,699


$

827


$

(99)


$

(6)


$

3,421

















Property, plant and equipment, net

$

2,377


$

1,047


$

26


$

(1)


$

3,449

















Long-term debt:
















Current portion

$

11


$


$

1


$


$

12


Non-current portion


1,616



2



813





2,431



$

1,627


$

2


$

814


$


$

2,443

 

TDS Telecom Highlights

(Unaudited)





Three Months Ended March 31,











2017 vs. 2016





2017


2016


Increase (Decrease)

(Dollars in millions)











Wireline











Operating revenues












Residential

$

79


$

76


$

3


4%


Commercial


51



54



(3)


(6)%


Wholesale


49



43



6


15%



Total service revenues


179



173



6


4%


Equipment sales







(37)%






179



173



6


3%

Operating expenses












Cost of services


63



62



1


2%


Cost of equipment sold


1



1




6%


Selling, general and administrative expenses


48



48



(1)


(2)%


Expenses excluding depreciation, amortization and













accretion


111



111




-


Depreciation, amortization and accretion


39



42



(3)


(6)%






150



153



(2)


(2)%
















Operating income

$

29


$

20


$

8


41%















Cable











Operating revenues












Residential

$

41


$

35


$

5


15%


Commercial


9



10



(1)


(8)%





49



45



4


10%

Operating expenses












Cost of services


24



22



2


8%


Selling, general and administrative expenses


13



12




3%


Expenses excluding depreciation, amortization and













accretion


36



34



2


6%


Depreciation, amortization and accretion


10



9



1


10%


(Gain) loss on asset disposals, net




1




(23)%






47



44



3


6%
















Operating income

$

2


$

1


$

2


>100%















HMS











Operating revenues












Service revenues

$

29


$

29


$


(1)%


Equipment sales


43



35



7


21%






71



64



7


11%

Operating expenses












Cost of services


20



21



(1)


(3)%


Cost of equipment sold


36



29



6


21%


Selling, general and administrative expenses


11



11




1%


Expenses excluding depreciation, amortization and













accretion


67



61



6


9%


Depreciation, amortization and accretion


7



7




(6)%






74



68



5


8%
















Operating loss

$

(2)


$

(4)


$

2


43%















Intercompany revenues

$

(1)


$

(1)


$


(2)%

Intercompany expenses


(1)



(1)




(2)%















Total TDS Telecom operating income

$

29


$

17


$

12


70%
















Numbers may not foot due to rounding.


 

Telephone and Data Systems, Inc.


Financial Measures and Reconciliations






















Free Cash Flow
















Three Months Ended

March 31,




2017


2016


(Dollars in millions)








Cash flows from operating activities (GAAP)


$

137


$

246


Less: Cash paid for additions to property, plant and equipment



127



159


       Free cash flow (1)


$

10


$

87













(1)

Management uses Free cash flow as a liquidity measure and it is defined as Cash flows from operating activities less Cash paid for additions to property, plant and equipment.  Free cash flow is a non-GAAP financial measure which TDS believes may be useful to investors and other users of its financial information in evaluating liquidity, specifically, the amount of cash generated by business operations, after Cash paid for additions to property, plant and equipment.

























Postpaid ABPU and Postpaid ABPA

U.S. Cellular presents Postpaid ABPU and Postpaid ABPA to reflect the revenue shift from Service revenues to Equipment and product sales resulting from the increased adoption of equipment installment plans.  Postpaid ABPU and Postpaid ABPA, as previously defined, are non-GAAP financial measures which U.S. Cellular believes are useful to investors and other users of its financial information in showing trends in both service and equipment and product sales revenues received from customers.


















For the Quarter Ended


3/31/2017



12/31/2016



9/30/2016



6/30/2016



3/31/2016

(Dollars and connection counts in millions)















Calculation of Postpaid ARPU















Postpaid service revenues

$

608


$

607


$

635


$

636


$

639

Average number of postpaid connections


4.46



4.48



4.49



4.48



4.43

Number of months in period


3



3



3



3



3


Postpaid ARPU (GAAP metric)

$

45.42


$

45.19


$

47.08


$

47.37


$

48.13


















Calculation of Postpaid ABPU















Postpaid service revenues

$

608


$

607


$

635


$

636


$

639

Equipment installment plan billings


139



138



131



118



105


Total billings to postpaid connections

$

747


$

745


$

766


$

754


$

744

Average number of postpaid connections


4.46



4.48



4.49



4.48



4.43

Number of months in period


3



3



3



3



3


Postpaid ABPU (Non-GAAP metric)

$

55.82


$

55.43


$

56.79


$

56.09


$

56.06


















Calculation of Postpaid ARPA















Postpaid service revenues

$

608


$

607


$

635


$

636


$

639

Average number of postpaid accounts


1.66



1.68



1.69



1.70



1.70

Number of months in period


3



3



3



3



3


Postpaid ARPA (GAAP metric)

$

121.88


$

120.67


$

125.31


$

124.91


$

125.36


















Calculation of Postpaid ABPA















Postpaid service revenues

$

608


$

607


$

635


$

636


$

639

Equipment installment plan billings


139



138



131



118



105


Total billings to postpaid accounts

$

747


$

745


$

766


$

754


$

744

Average number of postpaid accounts


1.66



1.68



1.69



1.70



1.70

Number of months in period


3



3



3



3



3


Postpaid ABPA (Non-GAAP metric)

$

149.78


$

148.02


$

151.16


$

147.90


$

145.99

 

To view the original version on PR Newswire, visit:http://www.prnewswire.com/news-releases/tds-reports-first-quarter-2017-results-300452262.html

SOURCE Telephone and Data Systems, Inc.

Jane McCahon, Senior Vice President - Corporate Relations and Corporate Secretary, 312-592-5379, jane.mccahon@tdsinc.com, or Julie Mathews, IRC, Director - Investor Relations, 312-592-5341, julie.mathews@tdsinc.com
Copyright © 2017 Telephone and Data Systems, Inc. All Rights Reserved.

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