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TDS reports first quarter 2015 results

05/01/2015

U.S. Cellular increases guidance for operating cash flow and adjusted EBITDA
As previously announced, TDS will hold a teleconference May 1, 2015 at 9:30 a.m. CDT. Interested parties may listen to the call live via the Events & Presentations page of investors.teldta.com.

CHICAGO, May 1, 2015 /PRNewswire/ -- Telephone and Data Systems, Inc. (NYSE:TDS) reported total operating revenues of $1,251.6 million for the first quarter of 2015, versus $1,196.0 million for the comparable period one year ago. Net income attributable to TDS shareholders and related diluted earnings per share were $145.7 million and $1.33, respectively, for the first quarter of 2015, compared to $18.3 million and $0.16, respectively, in the comparable period one year ago. 

"Both of our businesses had encouraging first quarters and made good progress on their strategic objectives," said LeRoy T. Carlson, Jr. , TDS president and CEO. "U.S. Cellular continued to grow its postpaid customer base and improve loyalty. TDS Telecom achieved strong growth in IPTV customers, and we continued to move forward with our cable, broadband, and hosted and managed services strategies.

"U.S. Cellular maintained strong momentum from its turnaround in customer growth last year, adding more postpaid customers and reducing churn. More customers are adopting shared data plans and adding connected devices to those accounts, leading to increases in revenue. We will bring 4G LTE speeds to 98 percent of U.S. Cellular customers this year, and we plan to drive continued substantial growth in smartphone penetration, connected devices, and data use.

"TDS Telecom achieved continued success with its IPTV service in the recent quarter, adding residential customers and increasing residential revenue per connection. As we complete the integration of our cable acquisitions, Baja Broadband and BendBroadband, we are focused on increasing residential and commercial broadband penetration. We also continue to seek and evaluate potential cable acquisitions. Our hosted and managed services company, OneNeck IT Solutions, has had some recent sales success.  We believe there is strong potential for growth at OneNeck as more businesses and organizations seek to outsource more of their IT needs."

2015 Estimated Results
Estimates of full-year 2015 results for U.S. Cellular, TDS Telecom, and TDS are shown below.  Such estimates represent management's view as of May 1, 2015.  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.



2015 Estimated Results



U.S. Cellular


TDS Telecom


TDS(2)



Current

Previous


Current

Previous


Current

Previous

(Dollars in millions)









Total operating revenues

$4,000-$4,200

Unchanged


$1,130-$1,180

Unchanged


$5,145-$5,395

Unchanged

Operating cash flow (1)

$400-$500

$350-$450


$280-$310

Unchanged


$685-$815

$635-$765

Adjusted EBITDA (1)

$580-$680

$530-$630


$280-$310

Unchanged


$870-$1,000

$820-$950

Capital expenditures

$600

Unchanged


$220

Unchanged


$830

Unchanged

 

(1)

Operating cash flow is defined as net income, adjusted for the items set forth in the reconciliation below.  Adjusted EBITDA is defined as net income, adjusted for the items set forth in the reconciliation below.  Operating cash flow and Adjusted EBITDA exclude these items in order to show operating results on a more comparable basis from period to period. From time to time, TDS may exclude other items from Operating cash flow and/or Adjusted EBITDA if such items help reflect operating results on a more comparable basis. TDS does not intend to imply that any such items that are excluded are non-recurring, infrequent or unusual; such items may occur in the future.  Operating cash flow and Adjusted EBITDA 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 as indicators of the company's operating performance or as alternatives to cash flows from operating activities, determined in accordance with GAAP, as indicators of cash flows or as measures of liquidity. TDS believes Operating cash flow and Adjusted EBITDA are useful measures of TDS' operating results before significant recurring non-cash charges, gains and losses, and other items as indicated below. The following tables provide a reconciliation to Operating cash flow and Adjusted EBITDA for 2015 estimated results, actual results for the three months ended March 31, 2015 and 2014 actual results:

 

 



2015 Estimated Results (3)



U.S. Cellular


TDS Telecom


TDS(2)

(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)

$140-$240


$45-$75


$140 -$270

Add back:







Interest expense

$80


 -   


$140


Depreciation, amortization and accretion expense

$580


$235


$825

EBITDA

$800-$900


$280-$310


$1,105-$1,235

Add back:







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

($110)


 -   


($125)


(Gain) loss on license sales and exchanges, net

($125)


 -   


($125)


(Gain) loss on assets disposals, net

$15


 -   


$15

Adjusted EBITDA

$580-$680


$280-$310


$870-$1,000

Deduct:







Equity in earnings of unconsolidated entities

($130)


 -   


($130)


Interest and dividend income

($50)


 -   


($55)

Operating cash flow (4)

$400-$500


$280-$310


$685-$815











 



Actual Results



Three months ended March 31, 2015


Year ended December 31, 2014



U.S. Cellular


TDS

Telecom


TDS (2)


U.S. Cellular


TDS

Telecom


TDS (2)

(Dollars in millions)









Net income (loss) (GAAP)

$165


$13


$176


($47)


($24)


($147)

Add back:













Income tax expense (benefit)

$108


$8


$116


($12)


$18


($5)

Income (loss) before income taxes (GAAP)

$273


$21


$292


($59)


($7)


($153)

Add back:













Interest expense

$20



$34


$57


($1)


$111


Depreciation, amortization and accretion expense

$147


$57


$207


$606


$220


$837

EBITDA

$440


$78


$533


$605


$212


$796

Add back:













Loss on impairment of assets





$84


$88


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

($111)



($124)


($33)


($2)


($16)


(Gain) loss on license sales and exchanges, net

($123)



($123)


($113)



($113)


(Gain) loss on assets disposals, net

$4


$1


$5


$21


$5


$27

Adjusted EBITDA

$209


$80


$291


$480


$298


$781

Deduct:













Equity in earnings of unconsolidated entities

($34)



($35)


($130)



($132)


Interest and dividend income

($8)



($8)


($12)


($2)


($17)

Operating cash flow (4)

$167


$80


$248


$338


$296


$632














Note: Totals may not foot due to rounding differences.














(2)

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.

(3)

In providing 2015 Estimated Results, TDS has not completed the above reconciliation to net income because it does not provide guidance for income taxes. TDS believes that the impact of income taxes cannot be reasonably predicted; therefore, the company is unable to provide such guidance. Accordingly, a reconciliation to net income is not available without unreasonable effort.

(4)

A reconciliation of Operating cash flow (Non-GAAP) to operating income (GAAP) for March 31, 2015 actual results can be found on the company's website at investors.teldta.com.

 

Stock Repurchase Summary
TDS began repurchasing stock under its $250 million repurchase authorization on Aug. 5, 2013.   The following represents repurchases of TDS Common Shares.

 

Repurchase Period


# Shares


Cost (in millions)

2015 (first quarter)



$

2014 (full year)


1,541,850


$

39.1

Total


1,541,850


$

39.1

Conference Call Information
TDS will hold a conference call on May 1, 2015 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.teldta.com. The call will be archived on the Events & Presentations page of investors.teldta.com.

About TDS
Telephone and Data Systems, Inc. (TDS), a Fortune 1000TM company, provides wireless; cable and wireline broadband, TV and voice; and hosted and managed services to approximately 6.0 million customers nationwide through its business units, U.S. Cellular, TDS Telecom, OneNeck IT Solutions, Baja Broadband and BendBroadband. Founded in 1969 and headquartered in Chicago, TDS employed 10,600 people as of March 31, 2015.

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: impacts of any pending acquisition and divestiture transactions,  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 overall economy; competition; 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 afforded TDS and U.S. Cellular debt securities by accredited ratings organizations; industry consolidation; advances in telecommunications technology; uncertainty of access to the capital markets;  pending and future litigation; changes in income tax rates, laws, regulations or rulings; acquisitions/divestitures of properties and/or licenses; 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 products and services 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 ("SEC"), 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

3/31/2015


12/31/2014


9/30/2014


6/30/2014


3/31/2014

Retail Customers
















Postpaid

















Total at end of period


4,307,000



4,298,000



4,200,000



4,148,000



4,174,000



Gross additions


200,000



302,000



251,000



190,000



197,000



Net additions (losses)


9,000



98,000



52,000



(26,000)



(93,000)



ARPU (1)

$

54.87


$

56.51


$

56.37


$

56.82


$

57.59



ARPA (2)

$

134.94


$

136.13


$

132.99


$

131.95


$

132.03



Churn rate (3)


1.5%



1.6%



1.6%



1.7%



2.3%



Smartphone penetration (4)


66.9%



64.8%



61.7%



58.4%



55.8%


Prepaid

















Total at end of period


360,000



348,000



350,000



352,000



356,000



Gross additions


73,000



60,000



64,000



65,000



85,000



Net additions (losses)


12,000



(2,000)



(2,000)



(4,000)



13,000



ARPU (1)

$

35.72


$

35.33


$

34.40


$

34.02


$

32.22



Churn rate (3)


5.8%



5.9%



6.3%



6.5%



6.9%

Total customers at end of period


4,775,000



4,760,000



4,674,000



4,653,000



4,684,000

Billed ARPU (1)

$

52.29


$

53.63


$

53.24


$

53.36


$

53.93

Service revenue ARPU (1)

$

58.01


$

60.10


$

60.92


$

60.32


$

60.19

Smartphones sold as a percent of total

  handsets sold


85.7%



86.5%



80.8%



79.0%



78.2%

Total population

















Consolidated markets (5)


45,737,000



50,906,000



54,817,000



54,817,000



54,817,000



Consolidated operating markets (5)


31,814,000



31,729,000



31,729,000



31,729,000



31,729,000

Market penetration at end of period

















Consolidated markets (6)


10.4%



9.4%



8.5%



8.5%



8.5%



Consolidated operating markets (6)


15.0%



15.0%



14.7%



14.7%



14.8%

Capital expenditures (000s)

$

66,460


$

181,655


$

142,452


$

143,927


$

89,581

Total cell sites in service


6,219



6,220



6,209



6,183



6,165

Owned towers (7)


3,955



4,281



4,487



4,457



4,448



(1)

Average Revenue Per User ("ARPU") metrics are calculated by dividing a revenue base by an average number of customers by the number of months in the period.  These revenue bases and customer populations are shown below:


a

Postpaid ARPU consists of total postpaid service revenues and postpaid customers


b

Prepaid ARPU consists of total prepaid service revenues and prepaid customers


c

Billed ARPU consists of total postpaid, prepaid and reseller service revenues and postpaid, prepaid and reseller customers


d

Service revenue ARPU consists of total postpaid, prepaid and reseller service revenues, inbound roaming and other service revenues and postpaid, prepaid and reseller customers

(2)

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

(3)

Churn metrics represent the percentage of the postpaid or prepaid customers that disconnect service each month. These metrics represent the average monthly postpaid or prepaid churn rate for each respective period

(4)

Smartphones represent wireless devices which run on an Android, Apple, BlackBerry or Windows Mobile operating system, excluding connected devices. Smartphone penetration is calculated by dividing postpaid smartphone customers by total postpaid handset customers

(5)

The decrease in the population of Consolidated markets is due primarily to the license exchange transactions of certain non-operating licenses in North Carolina in December 2014 and Illinois and Indiana in March 2015. Total Population is used only to calculate market penetration of consolidated markets and consolidated operating markets, respectively.  See footnote (6) below.

(6)

Market penetration is calculated by dividing the number of wireless customers at the end of the period by the total population of consolidated markets and consolidated operating markets, respectively, as estimated by Claritas.  The increase in consolidated markets penetration is due primarily to a lower denominator as a result of the license divestitures described in footnote (5) above

(7)

During the quarters ended March 31, 2015 and December 31, 2014, sold 359 and 236 towers, respectively, in divested markets

 

TDS Telecom

Summary Operating Data (Unaudited)



















Quarter Ended

3/31/2015


12/31/2014


9/30/2014


6/30/2014


3/31/2014

TDS Telecom















Wireline

















Residential connections


















Voice (1)


333,400



335,900



340,300



346,100



348,700




Broadband (2)


229,400



229,200



231,600



232,700



229,000




IPTV (3)


25,600



23,400



20,700



18,200



15,900




   Wireline residential connections


588,400



588,500



592,600



597,000



593,600





















Total residential revenue per connection (4)

$

42.32


$

41.56


$

41.47


$

41.05


$

40.79





















Commercial connections


















Voice (1)


187,500



193,200



199,300



206,200



212,200




Broadband (2)


24,300



24,700



25,300



26,000



26,600




managedIP (5)


143,200



140,200



137,700



133,300



131,000




   Wireline commercial connections


355,000



358,100



362,300



365,500



369,800





















Total Wireline connections


943,400



946,600



954,900



962,500



963,400



















Cable

















Cable Connections


















Video (6)


109,700



110,400



109,100



69,700



68,700




Broadband (7)


112,200



110,900



106,400



63,200



63,000




Voice (7)


49,100



46,000



41,800



17,800



17,700




   Cable connections


271,000



267,300



257,300



150,700



149,400





















(1)

The individual circuit connecting customers to TDS Telecom's central office facilities

(2)

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

(3)

The number of customers provided video services using IP networking technology

(4)

Total residential revenue per connection is calculated by dividing the average residential revenue for the period by the average number of residential connections for the period

(5)

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

(6)

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

(7)

Broadband and voice connections reflect billable number of lines into a building for high speed data and voice services, respectively

 

 

TDS Telecom

Capital Expenditures (000s)
















Quarter Ended


3/31/2015



12/31/2014



9/30/2014



6/30/2014



3/31/2014

Wireline

$

20,400


$

51,400


$

34,200


$

27,400


$

22,900

Cable


11,600



14,600



7,600



7,200



6,200

HMS


4,900



13,400



9,800



10,600



2,800


$

36,900


$

79,400


$

51,600


$

45,200


$

31,900

 

 

Telephone and Data Systems, Inc.

Consolidated Statement of Operations Highlights

Three Months Ended March 31,

(Unaudited, dollars and shares in thousands, except per share amounts)











Change





2015


2014


Amount

Percent

Operating revenues












U.S. Cellular

$

965,245


$

925,811


$

39,434


4%


TDS Telecom


279,985



262,416



17,569


7%


All Other (1)


6,363



7,735



(1,372)


(18%)






1,251,593



1,195,962



55,631


5%

Operating expenses












U.S. Cellular













Expenses excluding depreciation, amortization and accretion


797,946



846,645



(48,699)


(6%)



Depreciation, amortization and accretion


147,085



167,753



(20,668)


(12%)



(Gain) loss on asset disposals, net


4,251



1,934



2,317


>100%



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


(111,477)



(6,900)



(104,577)


>100%



(Gain) loss on license sales and exchanges, net


(122,873)



(91,446)



(31,427)


(34%)






714,932



917,986



(203,054)


(22%)


TDS Telecom













Expenses excluding depreciation, amortization and accretion


200,460



190,303



10,157


5%



Depreciation, amortization and accretion


57,163



53,775



3,388


6%



(Gain) loss on asset disposals, net


1,130



344



786


>100%






258,753



244,422



14,331


6%


All Other (1)













Expenses excluding depreciation and amortization


5,262



9,326



(4,064)


(44%)



Depreciation and amortization


2,327



3,391



(1,064)


(31%)



(Gain) loss on asset disposals, net


(4)



152



(156)


>(100%)



(Gain) loss on sale of business and other exit costs, net (2)


(12,306)



-



(12,306)


N/M






(4,721)



12,869



(17,590)


>(100%)


















Total operating expenses


968,964



1,175,277



(206,313)


(18%)

Operating income (loss)












U.S. Cellular


250,313



7,825



242,488


>100%


TDS Telecom


21,232



17,994



3,238


18%


All Other  (1)


11,084



(5,134)



16,218


>(100%)






282,629



20,685



261,944


>100%

Investment and other income (expense)












Equity in earnings of unconsolidated entities


34,641



37,327



(2,686)


(7%)


Interest and dividend income


8,385



2,486



5,899


>100%


Interest expense


(33,830)



(28,707)



(5,123)


(18%)


Other, net


(4)



160



(164)


>(100%)



Total investment and other income


9,192



11,266



(2,074)


(18%)

Income before income taxes


291,821



31,951



259,870


>100%


Income tax expense (benefit)


116,020



11,657



104,363


>100%

Net income


175,801



20,294



155,507


>100%


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


30,061



2,040



28,021


>100%

Net income attributable to TDS shareholders


145,740



18,254



127,486


>100%


TDS Preferred dividend requirement


(12)



(12)




Net income available to common shareholders

$

145,728


$

18,242


$

127,486


>100%















Basic weighted average shares outstanding


108,169



108,988



(819)


(1%)

Basic earnings per share attributable to TDS shareholders

$

1.35


$

0.17


$

1.18


>100%















Diluted weighted average shares outstanding


108,946



109,672



(726)


(1%)

Diluted earnings per share attributable to TDS shareholders

$

1.33


$

0.16


$

1.17


>100%



(1)

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

(2)

Compared to U.S. Cellular, TDS recognized an incremental gain of $11.9 million on the tower sale as a result of a lower basis in the assets disposed.

N/M – Percentage change not meaningful

 

 

Telephone and Data Systems, Inc.

Consolidated Balance Sheet Highlights

(Unaudited, dollars in thousands)








ASSETS

















March 31,


December 31,



2015


2014

Current assets







Cash and cash equivalents

$

635,120


$

471,901


Accounts receivable from customers and others


658,888



683,681


Inventory, net


178,313



273,707


Net deferred income tax asset


92,791



107,686


Prepaid expenses


97,707



86,506


Income taxes receivable


853



113,708


Other current assets


29,132



29,766




1,692,804



1,766,955








Assets held for sale


29,771



103,343








Investments







Licenses


1,837,238



1,453,574


Goodwill


771,674



771,352


Franchise rights


244,300



244,300


Other intangible assets, net


59,708



64,499


Investments in unconsolidated entities


343,382



321,729


Other investments


485



508




3,256,787



2,855,962








Property, plant and equipment, net







U.S. Cellular


2,645,117



2,728,217


TDS Telecom


1,077,924



1,093,671


Other


23,793



24,237




3,746,834



3,846,125








Other assets and deferred charges


270,042



334,554








Total assets

$

8,996,238


$

8,906,939

 

 

Telephone and Data Systems, Inc.

Consolidated Balance Sheet Highlights

(Unaudited, dollars in thousands)










LIABILITIES AND EQUITY























March 31,


December 31,





2015


2014

Current liabilities








Current portion of long-term debt

$

805


$

808



Accounts payable


312,091



387,125



Customer deposits and deferred revenues


338,076



324,318



Accrued interest


17,376



7,919



Accrued taxes


174,043



46,734



Accrued compensation


68,838



114,549



Other current liabilities


145,871



181,803






1,057,100



1,063,256










Liabilities held for sale


406



21,643










Deferred liabilities and credits








Net deferred income tax liability


878,809



941,519



Other deferred liabilities and credits


441,745



430,774










Long-term debt


1,993,457



1,993,586










Noncontrolling interests with redemption features


6,619



1,150










Equity







TDS shareholders' equity








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


1,327



1,327



Capital in excess of par value


2,344,274



2,336,511



Treasury shares, at cost


(745,590)



(748,199)



Accumulated other comprehensive loss


6,012



6,452



Retained earnings


2,460,323



2,330,187




   Total TDS shareholders' equity


4,066,346



3,926,278











Preferred shares


824



824


Noncontrolling interests


550,932



527,909












Total equity


4,618,102



4,455,011










Total liabilities and equity

$

8,996,238


$

8,906,939

 

 

Balance Sheet Highlights

March 31, 2015

(Unaudited, dollars in thousands)






































U.S.


TDS


TDS Corporate


Intercompany


TDS




Cellular


Telecom


& Other


Eliminations


Consolidated

Cash and cash equivalents

$

336,893


$

68,221


$

230,006


$

 - 


$

635,120

Affiliated cash investments


 - 



407,200



 - 



(407,200)



 - 



$

336,893


$

475,421


$

230,006


$

(407,200)


$

635,120


















Licenses, goodwill and other intangible assets

$

2,197,253


$

853,625


$

(137,958)


$

 - 


$

2,912,920

Investment in unconsolidated entities


304,501



3,805



39,898



(4,822)



343,382

Long-term and other investments


 - 



484



 - 



 - 



485




$

2,501,754


$

857,914


$

(98,060)


$

(4,821)


$

3,256,787



































Property, plant and equipment, net

$

2,645,117


$

1,077,924


$

23,990


$

(197)


$

3,746,834


















Long-term debt:
















Current portion

$

57


$

25


$

723


$

 - 


$

805


Non-current portion


1,151,901



1,406



840,150



 - 



1,993,457




$

1,151,958


$

1,431


$

840,873


$

 - 


$

1,994,262

 

 

Telephone and Data Systems, Inc.

Consolidated Statement of Cash Flows

Three Months Ended March 31,

(Unaudited, dollars in thousands)






2015


2014

Cash flows from operating activities







Net income (loss)

$

175,801


$

20,294



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










Depreciation, amortization and accretion


206,575



224,919





Bad debts expense


29,849



21,559





Stock-based compensation expense


8,096



6,759





Deferred income taxes, net


(47,466)



(14,510)





Equity in earnings of unconsolidated entities


(34,641)



(37,327)





Distributions from unconsolidated entities


12,988



12,820





(Gain) loss on asset disposals, net


5,377



2,430





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


(123,783)



(6,900)





(Gain) loss on license sales and exchanges, net


(122,873)



(91,446)





Noncash interest expense


670



506





Other operating activities


-



47



Changes in assets and liabilities from operations










Accounts receivable


21,240



90,555





Equipment installment plans receivable


(36,498)



2,394





Inventory


95,395



19,656





Accounts payable


(13,592)



(53,403)





Customer deposits and deferred revenues


13,319



(1,447)





Accrued taxes


251,510



(1,634)





Accrued interest


9,460



9,136





Other assets and liabilities


(96,121)



(99,471)







355,306



104,937











Cash flows from investing activities







Cash used for additions to property, plant and equipment


(166,461)



(150,890)


Cash paid for acquisitions and licenses


(280,710)



(8,254)


Cash received from divestitures and exchanges


274,131



103,042


Cash received for investments




10,000


Other investing activities


2,765



1,623







(170,275)



(44,479)











Cash flows from financing activities







Repayment of long-term debt


(247)



(392)


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


213



(50)


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


487



316


Repurchase of TDS Common Shares




(3,342)


Repurchase of U.S. Cellular Common Shares


(2,302)



(2,000)


Dividends paid to TDS shareholders


(15,232)



(14,582)


Payment of debt issuance costs


(3,018)




Distributions to noncontrolling interests


(225)



(346)


Other financing activities


(1,488)



2,834







(21,812)



(17,562)











Net increase in cash and cash equivalents


163,219



42,896











Cash and cash equivalents







Beginning of period


471,901



830,014


End of period

$

635,120


$

872,910

 

 

TDS Telecom Highlights

Three Months Ended March 31,

(Unaudited, dollars in thousands)

























Change





2015


2014


Amount


Percent

Wireline











Operating revenues












Residential

$

74,686


$

72,505


$

2,181


3%


Commercial


55,762



57,980



(2,218)


(4%)


Wholesale


45,243



46,448



(1,205)


(3%)



Total service revenues


175,691



176,933



(1,242)


(1%)


Equipment sales


444



553



(109)


(20%)






176,135



177,486



(1,351)


(1%)

Operating expenses












Cost of services


62,427



64,400



(1,973)


(3%)


Cost of equipment sold


563



483



80


17%


Selling, general and administrative expenses


45,669



46,520



(851)


(2%)


Depreciation, amortization and accretion


42,009



42,736



(727)


(2%)


(Gain) loss on asset disposals, net


518



245



273


>100%






151,186



154,384



(3,198)


(2%)
















Operating income

$

24,949


$

23,102


$

1,847


8%















Cable











Operating revenues












Residential

$

35,046


$

18,253


$

16,793


92%


Commercial


8,435



4,250



4,185


98%



Total service revenues


43,481



22,503



20,978


93%


Equipment sales


88





88


N/M






43,569



22,503



21,066


94%

Operating expenses












Cost of services


19,948



10,955



8,993


82%


Cost of equipment sold


60









Selling, general and administrative expenses


12,625



6,378



6,247


98%


Depreciation, amortization and accretion


8,719



4,361



4,358


100%


(Gain) loss on asset disposals, net


682



65



617


>100%






42,034



21,759



20,275


93%
















Operating income

$

1,535


$

744


$

791


>100%















HMS











Operating revenues












Service revenues

$

28,416


$

27,376


$

1,040


4%


Equipment sales


32,545



35,732



(3,187)


(9%)






60,961



63,108



(2,147)


(3%)

Operating expenses












Cost of services


20,028



16,946



3,082


18%


Cost of equipment sold


27,130



30,467



(3,337)


(11%)


Selling, general and administrative expenses


12,690



14,835



(2,145)


(14%)


Depreciation, amortization and accretion


6,435



6,678



(243)


(4%)


(Gain) loss on asset disposals, net


(70)



34



(104)


>(100)%






66,213



68,960



(2,747)


(4%)
















Operating (loss)

$

(5,252)


$

(5,852)


$

600


10%















Intercompany revenues

$

(680)


$

(681)


$

1


Intercompany expenses


(680)



(681)



1
















Total TDS Telecom operating income

$

21,232


$

17,994


$

3,238


18%

 

Telephone and Data Systems, Inc.

Financial Measures and Reconciliations

(Unaudited, dollars in thousands)














TDS Consolidated














Three Months Ended





March 31,



2015


2014











Cash flows from operating activities


$

355,306


$

104,937


Add: Sprint Cost Reimbursement



15,712



11,254


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



166,461



150,889



Adjusted free cash flow (1)


$

204,557


$

(34,698)



(1)

Adjusted free cash flow is defined as Cash flows from operating activities (which includes cash outflows related to the Sprint decommissioning), as adjusted for cash proceeds from the Sprint Cost Reimbursement (which are included in Cash flows from investing activities in the Consolidated Statement of Cash Flows), less Cash used for additions to property, plant and equipment. Adjusted 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 the amount of cash generated by business operations (including cash proceeds from the Sprint Cost Reimbursement), after Cash used for additions to property, plant and equipment.

 

To view the original version on PR Newswire, visit:http://www.prnewswire.com/news-releases/tds-reports-first-quarter-2015-results-300075865.html

SOURCE Telephone and Data Systems, Inc.

Jane McCahon, Vice President, Corporate Relations and Corporate Secretary, 312-592-5379, jane.mccahon@tdsinc.com; or Julie Mathews, Investor Relations Manager, 312-592-5341, julie.mathews@tdsinc.com

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