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Jane McCahon

Senior Vice President - Corporate Relations

Phone: 312.592.5379
jane.mccahon@tdsinc.com
Full Contact Info

TDS reports first quarter 2018 results

05/01/2018

CHICAGO, May 1, 2018 /PRNewswire/ --

As previously announced, TDS will hold a teleconference May 1, 2018, 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 $1,225 million for the first quarter of 2018, versus $1,238 million for the same period one year ago. Net income available to TDS shareholders and related diluted earnings per share were $39 million and $0.34, respectively, for the first quarter of 2018, compared to $37 million and $0.33, respectively, in the same period one year ago. 

"The TDS family of companies, in total, made a strong start to the year," said LeRoy T. Carlson, Jr., TDS President and CEO. "U.S. Cellular drove outstanding customer loyalty and increased its profitability, and successfully implemented continuous improvement initiatives throughout the business. TDS Telecom created momentum from its network investments and federal A-CAM funding to grow its broadband customers. 

"U.S. Cellular astutely managed growth in network capacity to meet rapidly growing customer data usage ensuring customers receive an unmatched wireless experience. For the fourth time in a row, U.S. Cellular was awarded 'Highest Wireless Network Quality Performance in the North Central Region' by the J.D. Power Wireless Network Quality Performance Study. Postpaid handset gross additions increased modestly and postpaid handset churn remained very low. U.S. Cellular's total customer base increased year over year which, together with increased revenues from device protection plans, helped to offset service plan pricing pressure.  U.S. Cellular achieved growth in total operating revenues due to increased sales of both high-priced devices and accessories.  Process improvement and cost management initiatives combined with disciplined promotions resulted in improved profitability, as reflected in higher Adjusted EBITDA.

"At TDS Telecom, the FCC approved additional A-CAM funding, which will enable us to deploy faster broadband service to more customers, in our most rural markets. The success of recent wireline fiber investments continues to enable growth into 2018, driving growth in IPTV connections and customer demand for faster broadband speeds, which generated higher residential revenue per connection. Cable operations achieved strong growth in broadband connections generating substantially higher cable revenues and Adjusted EBITDA. TDS Telecom is intensely focused on increasing broadband penetration through raising network speed and capacity, and by delivering outstanding customer experiences. Additionally, it continues to seek potential cable acquisition opportunities."

2018 Estimated Results
TDS' current estimates of full-year 2018 results for U.S. Cellular, TDS Telecom, and TDS are shown below.  Such estimates represent management's view as of May 1, 2018.  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. 


2018 Estimated Results














U.S. Cellular


TDS Telecom (1)


TDS (1)(2)


Current (3)

Previous


Current (3)

Previous


Current (3)

Previous

(Dollars in millions)












Total operating revenues

$3,850-$4,050

Unchanged


$900-$950

Unchanged


$5,015-$5,265

Unchanged

Adjusted OIBDA (4)(5)

$625-$775

Unchanged


$290-$320

Unchanged


$925-$1,105

Unchanged

Adjusted EBITDA (4)

$765-$915

Unchanged


$300-$330

Unchanged


$1,075-$1,255

Unchanged

Capital expenditures

$500-$550

Unchanged



$270

Unchanged


$795-$845

Unchanged

The following tables provide reconciliations of Net income to Adjusted OIBDA and Adjusted EBITDA for 2018 estimated results, actual results for the three months ended March 31, 2018, and actual results for the year ended December 31, 2017. In providing 2018 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.





2018 Estimated Results
















U.S. Cellular (3)



TDS Telecom (1)(3)



TDS (1)(2)(3)

(Dollars in millions)









Net income (GAAP)


N/A



N/A



N/A

Add back:










Income tax expense (benefit)


N/A



N/A



N/A

Income before income taxes (GAAP)

$

10-160


$

80-110


$

5-185

Add back:










Interest expense


110





170


Depreciation, amortization and accretion expense


635



220



890

EBITDA (Non-GAAP) (4)

$

755-905


$

300-330


$

1,065-1,245

Add back or deduct:










(Gain) loss on asset disposals, net


20





20


(Gain) loss on license sales and exchanges, net


(10)





(10)

Adjusted EBITDA (Non-GAAP) (4)

$

765-915


$

300-330


$

1,075-1,255

Deduct:










Equity in earnings of unconsolidated entities


130





130


Interest and dividend income


10



5



15


Other, net (6)




5



5

Adjusted OIBDA (Non-GAAP) (4)(5)

$

625-775


$

290-320


$

925-1,105

 




Actual Results
























Three Months Ended March 31, 2018 (3)


Year ended December 31, 2017




U.S.
Cellular


TDS
Telecom (1)


TDS (1)(2)


U.S.
Cellular

TDS
Telecom (1)

TDS (1)(2)

(Dollars in millions)












Net income (GAAP)

$

55


$

21


$

57


$

15


$

138


$

157

Add back or deduct:













Income tax expense (benefit)


22



6



24



(287)



(13)



(279)

Income (loss) before income taxes



















(GAAP)

$

77


$

27


$

81


$

(272)


$

125


$

(122)

Add back:













Interest expense


29





43



113





170


Depreciation, amortization and accretion expense


159



54



221



615



195



844

EBITDA (Non-GAAP) (4)

$

265


$

81


$

345


$

456


$

319


$

892

Add back or deduct:



















Loss on impairment of goodwill








370





262


(Gain) loss on asset disposals, net


1





2



17



3



21


(Gain) loss on sale of business and other exit costs, net








(1)





(1)


(Gain) loss on license sales and exchanges, net


(7)





(7)



(22)





(22)

Adjusted EBITDA (Non-GAAP) (4)

$

259


$

81


$

340


$

820


$

323


$

1,152

Deduct:



















Equity in earnings of unconsolidated entities


38





38



137





137


Interest and dividend income


4



1



5



8



5



15


Other, net (6)


(1)



1



1





3



4

Adjusted OIBDA (Non-GAAP) (4)(5)

$

218


$

80


$

296


$

675


$

314


$

996


Note: Totals may not foot due to rounding differences.


(1)

TDS has re-evaluated internal reporting roles with regard to its HMS business unit and, as a result, has changed its reportable segments.  Effective January 1, 2018, HMS is no longer reported under TDS Telecom.  Prior periods have been recast to conform to the revised presentation.



(2)

The TDS column includes U.S. Cellular, TDS Telecom and also the impacts of consolidating eliminations, corporate operations and non-reportable segments (including HMS as indicated in Note (1) above), all of which are not presented above.



(3)

As of January 1, 2018, TDS adopted the new revenue recognition standard, ASC 606, using a modified retrospective approach.  Under this method, the new accounting standard is applied only to the most recent period presented.  As a result, 2018 amounts include the impacts of ASC 606, but 2017 amounts remain as previously reported, except as specifically stated.



(4)

EBITDA, Adjusted EBITDA and Adjusted OIBDA are defined as net income adjusted for the items set forth in the reconciliation above.  EBITDA, Adjusted EBITDA and Adjusted OIBDA are not measures of financial performance under Generally Accepted Accounting Principles in the United States (GAAP) and should not be considered as alternatives to Net income or Cash flows from operating activities, as indicators of cash flows or as measures of liquidity.  TDS does not intend to imply that any such items set forth in the reconciliation above are non-recurring, 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, 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 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 (loss) before income taxes.



(5)

A reconciliation of Adjusted OIBDA (Non-GAAP) to Operating income (GAAP) for March 31, 2018 actual results can be found on TDS' website at investors.tdsinc.com.



(6)

ASU 2017-07, regarding net periodic pension cost and net periodic postretirement benefit cost was adopted as of January 1, 2018, and applied retrospectively.  All prior period numbers have been recast to conform to this standard.

Conference Call Information
TDS will hold a conference call on May 1, 2018 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 1000® company, provides wireless; cable and wireline broadband, TV and voice; and hosted and managed services to approximately 6 million connections nationwide through its businesses, U.S. Cellular, TDS Telecom, BendBroadband and OneNeck IT Solutions. Founded in 1969 and headquartered in Chicago, TDS employed 9,900 people as of March 31, 2018.

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

Disclaimer:
U.S. Cellular received the highest numerical score in the North Central region in the J.D. Power 2016 V2, 2017 V1 & V2, and 2018 V1 (tie) U.S. Wireless Network Quality Performance Studies. 2018 Volume 1 study based on 38,595 total responses from 5 providers, measuring the network quality experienced by customers with wireless carriers, surveyed July-December 2017. Your experiences may vary. Visit jdpower.com

United States Cellular Corporation

Summary Operating Data (Unaudited)
















As of or for the Quarter Ended

3/31/2018 (1)


12/31/2017


9/30/2017



6/30/2017


3/31/2017

Retail Connections
















Postpaid

















Total at end of period


4,481,000



4,518,000



4,513,000



4,478,000



4,455,000



Gross additions


129,000



177,000



191,000



174,000



146,000




Feature phones


5,000



5,000



7,000



7,000



7,000




Smartphones


91,000



128,000



132,000



116,000



88,000




Connected devices


33,000



44,000



52,000



51,000



51,000



Net additions (losses)


(37,000)



5,000



35,000



23,000



(27,000)




Feature phones


(15,000)



(15,000)



(15,000)



(15,000)



(19,000)




Smartphones


(1,000)



33,000



44,000



34,000



(9,000)




Connected devices


(21,000)



(13,000)



6,000



4,000



1,000



ARPU (2)

$

44.34


$

44.12


$

43.41


$

44.60


$

45.42



ABPU (Non-GAAP)(3)

$

57.10


$

56.69


$

54.71


$

55.19


$

55.82



ARPA (4)

$

118.22


$

118.05


$

116.36


$

119.73


$

121.88



ABPA (Non-GAAP)(5)

$

152.26


$

151.68


$

146.65


$

148.15


$

149.78



Churn rate (6)


1.23%



1.27%



1.16%



1.13%



1.29%




Handsets


0.97%



1.00%



0.96%



0.91%



1.08%




Connected devices


2.79%



2.84%



2.33%



2.35%



2.55%


Prepaid

















Total at end of period


525,000



519,000



515,000



484,000



480,000



Gross additions


88,000



83,000



102,000



73,000



78,000



Net additions (losses)


6,000



4,000



31,000



3,000



(4,000)



ARPU (2)

$

31.78


$

32.42


$

33.12


$

33.52


$

33.66



Churn rate (6)


5.27%



5.09%



4.75%



4.93%



5.69%

Total connections at end of period (7)


5,063,000



5,096,000



5,089,000



5,023,000



4,996,000

Market penetration at end of period
















Consolidated operating population


31,469,000



31,834,000



31,834,000



32,089,000



32,089,000


Consolidated operating penetration (8)


16%



16%



16%



16%



16%

Capital expenditures (millions)

$

70


$

213


$

112


$

84


$

61

Total cell sites in service


6,473



6,460



6,436



6,421



6,417

Owned towers


4,099



4,080



4,051



4,044



4,041


(1)

As of January 1, 2018, U.S. Cellular adopted the new revenue recognition standard, ASC 606, using a modified retrospective approach.  Under this method, the new accounting standard is applied only to the most recent period presented.  As a result, 2018 amounts include the impacts of ASC 606, but 2017 amounts remain as previously reported.

(2)

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


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


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

(3)

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.

(4)

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.

(5)

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.

(6)

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.

(7)

Includes reseller and other connections.

(8)

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)


As of or for the Quarter Ended

3/31/2018


12/31/2017


9/30/2017


6/30/2017


3/31/2017

TDS Telecom















Wireline
















Residential connections

















Voice (1)


286,000



290,600



298,200



304,600



308,200



Broadband (2)


230,500



228,600



229,900



230,200



228,500



Video (3)


50,300



48,600



47,200



46,200



45,200



   Wireline residential connections


566,900



567,700



575,300



581,000



581,900



















Total residential revenue per connection (4)

$

47.04


$

46.21


$

46.07


$

46.39


$

45.17



















Commercial connections

















Voice (1)


140,100



143,000



146,900



150,500



154,000



Broadband (2)


20,600



20,600



20,900



21,000



21,200



managedIP (5)


143,000



146,500



147,600



149,700



150,300



Video (3)


400











   Wireline commercial connections


304,000



310,100



315,300



321,200



325,500



















Total Wireline connections


870,900



877,800



890,700



902,200



907,400


















Cable
















Cable Connections

















Broadband (6)


156,800



153,300



143,800



140,300



137,800



Video (7)


100,700



101,800



97,900



97,900



97,600



Voice (8)


61,200



60,100



58,900



58,700



59,000



managedIP (5)


600



400



400



300



200



   Cable connections


319,300



315,600



301,000



297,200



294,500


Note:  Totals may not foot due to rounding differences.


(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.

(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 (Unaudited)












Quarter Ended

3/31/2018


12/31/2017


9/30/2017


6/30/2017


3/31/2017

(Dollars in millions)















Wireline

$

29


$

55


$

41


$

33


$

17

Cable


11



20



14



12



9

Total TDS Telecom (1)

$

40


$

74


$

56


$

45


$

27


Note:  Totals may not foot due to rounding differences.


(1)

TDS has re-evaluated internal reporting roles with regard to its HMS business unit and, as a result, has changed its reportable segments.  Effective January 1, 2018, HMS is no longer reported under TDS Telecom.  Prior periods have been recast to conform to the revised presentation.

 

Telephone and Data Systems, Inc.

Consolidated Statement of Operations Highlights

(Unaudited)








2018 vs. 2017








Increase

Three Months Ended March 31,

2018 (1)


2017

(Decrease)

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








Operating revenues









U.S. Cellular

$

942


$

936


1%


TDS Telecom (2)


231



228


1%


All Other (2)(3)


52



74


(28)%






1,225



1,238


(1)%

Operating expenses









U.S. Cellular










Expenses excluding depreciation, amortization and accretion


724



742


(3)%



Depreciation, amortization and accretion


159



153


3%



(Gain) loss on asset disposals, net


1



4


(62)%



(Gain) loss on license sales and exchanges, net


(7)



(17)


61%






877



882


(1)%


TDS Telecom (2)










Expenses excluding depreciation, amortization and accretion (4)


151



148


2%



Depreciation, amortization and accretion


54



49


10%



(Gain) loss on asset disposals, net




1


(51)%






205



198


4%


All Other (2)(3)










Expenses excluding depreciation and amortization (4)


55



68


(18)%



Depreciation and amortization


8



9


(4)%



(Gain) loss on asset disposals, net


1



(1)


(53)%






63



77


(17)%




Total operating expenses


1,145



1,157


(1)%

Operating income (loss)









U.S. Cellular


65



54


21%


TDS Telecom (2)(4)


25



30


(17)%


All Other (2)(3)(4)


(10)



(3)


>(100)%






80



81


(2)%

Investment and other income (expense)









Equity in earnings of unconsolidated entities


38



32


17%


Interest and dividend income


5



4


32%


Interest expense


(43)



(42)


(2)%


Other, net (4)


1



2


(44)%



Total investment and other income (expense) (4)


1



(4)


>100%

Income before income taxes


81



77


5%


Income tax expense


24



34


(29)%

Net income


57



43


33%


Less: Net income attributable to noncontrolling interests, net of tax


18



6


>100%

Net income available to TDS common shareholders

$

39


$

37


4%












Basic weighted average shares outstanding


111



110


1%

Basic earnings per share available to TDS common shareholders

$

0.35


$

0.34


3%












Diluted weighted average shares outstanding


113



112


1%

Diluted earnings per share available to TDS common shareholders

$

0.34


$

0.33


3%

Note:  Totals may not foot due to rounding differences.



(1)

As of January 1, 2018, TDS adopted the new revenue recognition standard, ASC 606, using a modified retrospective approach. Under this method, the new accounting standard is applied only to the most recent period presented. As a result, 2018 amounts include the impacts of ASC 606, but 2017 amounts remain as previously reported, except as specifically stated.



(2)

TDS has re-evaluated internal reporting roles with regard to its HMS business unit and, as a result, has changed its reportable segments.  Effective January 1, 2018, HMS is no longer reported under TDS Telecom.  Prior periods have been recast to conform to the revised presentation.



(3)

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



(4)

ASU 2017-07, regarding net periodic pension cost and net periodic postretirement benefit cost was adopted January 1, 2018, and applied retrospectively.  All prior period numbers have been recast to conform to this standard.

 

Telephone and Data Systems, Inc.

Consolidated Statement of Cash Flows

(Unaudited)






Three Months Ended





March 31,


2018 (1)


2017

(Dollars in millions)






Cash flows from operating activities







Net income

$

57


$

43


Add (deduct) adjustments to reconcile net income to net cash flows from operating activities








Depreciation, amortization and accretion


221



211



Bad debts expense


20



24



Stock-based compensation expense


10



11



Deferred income taxes, net


26



(1)



Equity in earnings of unconsolidated entities


(38)



(32)



Distributions from unconsolidated entities


17



11



(Gain) loss on asset disposals, net


2



4



(Gain) loss on license sales and exchanges, net


(7)



(17)



Noncash interest


1



1


Changes in assets and liabilities from operations








Accounts receivable


77



28



Equipment installment plans receivable


(17)



(44)



Inventory


(8)





Accounts payable


(32)



(75)



Customer deposits and deferred revenues


(28)



(12)



Accrued taxes


(24)



33



Accrued interest


11



9



Other assets and liabilities


(74)



(57)




Net cash provided by operating activities


214



137










Cash flows from investing activities







Cash paid for additions to property, plant and equipment


(131)



(127)


Cash paid for acquisitions and licenses


(9)



(14)


Cash received for investments


100




Cash received from divestitures and exchanges


4



16




Net cash used in investing activities


(36)



(125)










Cash flows from financing activities







Repayment of long-term debt


(5)



(3)


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


9



1


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


2



3


Dividends paid to TDS shareholders


(18)



(17)


Other financing activities


(5)






Net cash used in financing activities


(17)



(16)










Net increase (decrease) in cash, cash equivalents and restricted cash


161



(4)










Cash, cash equivalents and restricted cash







Beginning of period


622



904


End of period

$

783


$

900



(1)

As of January 1, 2018, TDS adopted the new revenue recognition standard, ASC 606, using a modified retrospective approach. Under this method, the new accounting standard is applied only to the most recent period presented. As a result, 2018 amounts include the impacts of ASC 606, but 2017 amounts remain as previously reported.

 

Telephone and Data Systems, Inc.

Consolidated Balance Sheet Highlights

(Unaudited)







ASSETS
















March 31,


December 31,




2018 (1)


2017

(Dollars in millions)






Current assets







Cash and cash equivalents

$

779


$

619


Short-term investments




100


Accounts receivable


955



961


Inventory, net


153



145


Prepaid expenses


104



112


Income taxes receivable


10



2


Other current assets


42



27



Total current assets


2,043



1,966









Assets held for sale


6



10









Licenses


2,240



2,232

Goodwill


509



509

Other intangible assets, net


273



279

Investments in unconsolidated entities


488



453









Property, plant and equipment, net


3,335



3,424









Other assets and deferred charges


587



422









Total assets

$

9,481


$

9,295

 

Telephone and Data Systems, Inc.

Consolidated Balance Sheet Highlights

(Unaudited)








LIABILITIES AND EQUITY



















March 31,


December 31,





2018 (1)


2017

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






Current liabilities







Current portion of long-term debt

$

20


$

20


Accounts payable


322



368


Customer deposits and deferred revenues


169



223


Accrued interest


22



11


Accrued taxes


45



64


Accrued compensation


77



126


Other current liabilities


95



106



Total current liabilities


750



918










Deferred liabilities and credits







Deferred income tax liability, net


634



552


Other deferred liabilities and credits


516



495










Long-term debt, net


2,431



2,437










Noncontrolling interests with redemption features


11



1










Equity







TDS shareholders' equity








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


1



1



Capital in excess of par value


2,421



2,413



Treasury shares, at cost


(643)



(669)



Accumulated other comprehensive income


(3)



(1)



Retained earnings


2,696



2,525




Total TDS shareholders' equity


4,472



4,269











Noncontrolling interests


667



623












Total equity


5,139



4,892










Total liabilities and equity

$

9,481


$

9,295


(1)

As of January 1, 2018, TDS adopted the new revenue recognition standard, ASC 606, using a modified retrospective approach.  Under this method, the new accounting standard is applied only to the most recent period presented.  As a result, 2018 amounts include the impacts of ASC 606, but 2017 amounts remain as previously reported.

 

Balance Sheet Highlights

(Unaudited)




March 31, 2018



U.S.


TDS


TDS Corporate


Intercompany


TDS



Cellular


Telecom


& Other


Eliminations


Consolidated

(Dollars in millions)















Cash and cash equivalents

$

509


$

21


$

249


$


$

779

Affiliated cash investments




359





(359)





$

509


$

380


$

249


$

(359)


$

779
































Licenses, goodwill and other intangible assets

$

2,231


$

768


$

23


$


$

3,022

Investment in unconsolidated entities


450



4



41



(7)



488



$

2,681


$

772


$

64


$

(7)


$

3,510

















Property, plant and equipment, net

$

2,233


$

969


$

133


$


$

3,335

















Long-term debt, net:
















Current portion

$

18


$

1


$

1


$


$

20


Non-current portion


1,618



2



811





2,431



$

1,636


$

3


$

812


$


$

2,451

 

TDS Telecom Highlights

(Unaudited)









2017 vs. 2016








Increase

Three Months Ended March 31,

2018 (1)


2017


(Decrease)

(Dollars in millions)








Wireline








Operating revenues









Residential

$

80


$

79


1%


Commercial


48



51


(6)%


Wholesale


47



49


(4)%



Total service revenues


175



179


(2)%


Equipment and product sales





26%



175



179


(2)%

Operating expenses









Cost of services


65



63


3%


Cost of equipment and products




1


(23)%


Selling, general and administrative expenses (2)


47



48


(3)%


Expenses excluding depreciation, amortization and accretion


112



112


-


Depreciation, amortization and accretion


37



39


(5)%



149



151


(1)%


Operating income (2)

$

26


$

28


(6)%









Cable








Operating revenues









Residential

$

46


$

41


12%


Commercial


10



9


13%



55



49


12%

Operating expenses









Cost of services


26



24


7%


Selling, general and administrative expenses


13



13


6%


Expenses excluding depreciation, amortization and accretion


39



36


7%


Depreciation, amortization and accretion


17



10


71%



57



47


20%


Operating income

$

(1)


$

2


>(100)%









Total TDS Telecom operating income (2)(3)

$

25


$

30


(17)%


Note:  Totals may not foot due to rounding differences.


(1)

As of January 1, 2018, TDS adopted the new revenue recognition standard, ASC 606, using a modified retrospective approach. Under this method, the new accounting standard is applied only to the most recent period presented. As a result, 2018 amounts include the impacts of ASC 606, but 2017 amounts remain as previously reported, except as specifically stated.



(2)

ASU 2017-07, regarding net periodic pension cost and net periodic postretirement benefit cost was adopted as of January 1, 2018, and applied retrospectively.  All prior period numbers have been recast to conform to this standard.



(3)

TDS has re-evaluated internal reporting roles with regard to its HMS business unit and, as a result, has changed its reportable segments.  Effective January 1, 2018, HMS is no longer reported under TDS Telecom.  Prior periods have been recast to conform to the revised presentation.

 

Telephone and Data Systems, Inc.

Financial Measures and Reconciliations















Free Cash Flow















Three Months Ended March 31,

2018


2017

(Dollars in millions)






Cash flows from operating activities (GAAP)

$

214


$

137

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


131



127


Free cash flow (Non-GAAP)(1)

$

83


$

10



(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 net cash generated by business operations after deducting 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 herein, 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


3/31/2018 (1)



12/31/2017



9/30/2017



6/30/2017



3/31/2017

(Dollars and connection counts in millions)















Calculation of Postpaid ARPU















Postpaid service revenues

$

598


$

598


$

586


$

597


$

608

Average number of postpaid connections


4.50



4.52



4.50



4.47



4.46

Number of months in period


3



3



3



3



3


Postpaid ARPU (GAAP metric)

$

44.34


$

44.12


$

43.41


$

44.60


$

45.42
















Calculation of Postpaid ABPU















Postpaid service revenues

$

598


$

598


$

586


$

597


$

608

Equipment installment plan billings


172



170



152



142



139


Total billings to postpaid connections

$

770


$

768


$

738


$

739


$

747

Average number of postpaid connections


4.50



4.52



4.50



4.47



4.46

Number of months in period


3



3



3



3



3


Postpaid ABPU (Non-GAAP metric)

$

57.10


$

56.69


$

54.71


$

55.19


$

55.82
















Calculation of Postpaid ARPA















Postpaid service revenues

$

598


$

598


$

586


$

597


$

608

Average number of postpaid accounts


1.69



1.69



1.68



1.66



1.66

Number of months in period


3



3



3



3



3


Postpaid ARPA (GAAP metric)

$

118.22


$

118.05


$

116.36


$

119.73


$

121.88
















Calculation of Postpaid ABPA















Postpaid service revenues

$

598


$

598


$

586


$

597


$

608

Equipment installment plan billings


172



170



152



142



139


Total billings to postpaid accounts

$

770


$

768


$

738


$

739


$

747

Average number of postpaid accounts


1.69



1.69



1.68



1.66



1.66

Number of months in period


3



3



3



3



3


Postpaid ABPA (Non-GAAP metric)

$

152.26


$

151.68


$

146.65


$

148.15


$

149.78


(1)

As of January 1, 2018, U.S. Cellular adopted the new revenue recognition standard, ASC 606, using a modified retrospective approach. Under this method, the new accounting standard is applied only to the most recent period presented. As a result, 2018 amounts include the impacts of ASC 606, but 2017 amounts remain as previously reported.

 

Cision View original content:http://www.prnewswire.com/news-releases/tds-reports-first-quarter-2018-results-300639993.html

SOURCE Telephone and Data Systems, Inc.

Copyright © 2017 Telephone and Data Systems, Inc. All Rights Reserved.

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Aug 14, 2018 04:02 PM

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