News Details

View all news

TDS reports fourth quarter and full year 2015 results

02/19/2016

Provides 2016 guidance
As previously announced, TDS will hold a teleconference February 19, 2016 at 9:30 a.m. CST. Interested parties may listen to the call live via the Events & Presentations page of investors.tdsinc.com.

CHICAGO, Feb. 19, 2016 /PRNewswire/ -- Telephone and Data Systems, Inc. (NYSE:TDS) reported total operating revenues of $1,274.5 million for the fourth quarter of 2015, versus $1,297.1 million for the comparable period one year ago. Net loss attributable to TDS shareholders and related diluted earnings per share improved to $0.8 million and $0.01, respectively, for the fourth quarter of 2015, compared to $16.6 million and $0.15, respectively, in the comparable period one year ago. 

TDS reported total operating revenues of $5,176.2 million and $5,009.4 million for the years ended 2015 and 2014, respectively.  Net income (loss) attributed to TDS shareholders and related diluted earnings per share were $219.0 million and $1.98, respectively, for the year ended 2015, compared to $(136.4) and $(1.26), respectively, for the year ended 2014.

"Our businesses made substantial progress in 2015," said LeRoy T. Carlson, Jr., TDS president and CEO. "U.S. Cellular completed deployment of its high-quality 4G LTE network, further enhancing its strong data capabilities. TDS Telecom successfully expanded its fiber and cable broadband networks. Both businesses generated improved financial results.

"At U.S. Cellular, our excellent network and competitive plans, devices, and pricing helped improve already high-levels of customer loyalty and generated new customer growth. Sales of shared data plans and connected devices such as tablets generated additional data revenue. U.S. Cellular plans to build on its successful 4G LTE deployment with the availability of national 4G LTE roaming and new investments in technologies such as Voice over LTE.

"TDS Telecom performed well in 2015.  Our investments in fiber deployment generated impressive results with competitively priced bundles driving increased customer loyalty and higher revenue per customer. TDS Telecom's wireline segment is on track to deploy fiber to approximately 25 percent of its customers' homes by mid-year. Our cable business was successful in growing broadband customers, and we continue to look for attractive cable acquisitions. OneNeck IT Solutions generated strong equipment sales growth, and is working to more rapidly grow recurring service revenues as it executes its mid-market-focused IT strategy.

"TDS continues to return value to shareholders through dividends. This morning we announced our 42nd consecutive year of increasing cash dividend payments."

2016 Estimated Results
Estimates of full-year 2016 results for U.S. Cellular, TDS Telecom, and TDS are shown below.  Such estimates represent management's view as of February 19, 2016.  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.



2016 Estimated Results and Actual Results for the year ended December 31, 2015



U.S. Cellular


TDS Telecom


TDS (2)



Estimate


Actual


Estimate


Actual


Estimate


Actual

(Dollars in millions)















Total operating revenues

$3,900-$4,100

$

3,997


$1,130-$1,180

$

1,158


$5,040-$5,290

$

5,176

Operating cash flow (1)

$525-$650

$

675


$270-$310

$

304


$800-$965

$

981

Adjusted EBITDA (1)

$725-$850

$

852


$270-$310

$

306


$1,000-$1,165

$

1,160

Capital expenditures

Approx. $

500

$

533


Approx. $

180

$

219


Approx. $

695

$

759

 

The following table provides a reconciliation to Operating Cash Flow and Adjusted EBITDA for 2016 estimated results, and actual results for the year ended December 31, 2015:





U.S. Cellular


TDS Telecom


TDS (2)





Estimate (3)


Actual


Estimate (3)


Actual


Estimate (3)


Actual

(Dollars in millions)













Net income (loss) (GAAP)


N/A


247


N/A


46


N/A


263

Add back:














Income tax expense (benefit)


N/A


156


N/A


35


N/A


172

Income (loss) before income taxes














(GAAP)

$

0-125

$

404

$

40-80

$

81

$

(20)-145

$

435

Add back:














Interest expense


105


86



1


165


142


Depreciation, amortization and accretion expense


600


606


230


228


835


844

EBITDA

$

705-830

$

1,096

$

270-310

$

310

$

980-1,145

$

1,421

Add back:














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



(114)



(10)



(136)


(Gain) loss on license sales and exchanges, net (5)



(147)





(147)



(Gain) loss on asset disposals, net


20


16



6


20


22

Adjusted EBITDA (1)

$

725-850

$

852

$

270-310

$

306

$

1,000-1,165

$

1,160

Deduct:














Equity in earnings of unconsolidated entities


(140)


(140)




(140)


(140)


Interest and dividend income; other income


(60)


(37)



(2)


(60)


(39)

Operating cash flow (1)(4)

$

525-650

$

675

$

270-310

$

304

$

800-965

$

981



Note:

Totals may not foot due to rounding differences.



(1)

Operating cash flow is defined as net income adjusted for the items set forth in the reconciliation above.  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 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 above.



(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 2016 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.



(4)

A reconciliation of Operating cash flow (Non-GAAP) to operating income (GAAP) for full year 2015, 2014 and 2013 actual results can be found on the Guidance and Reconciliation page of the company's website at investors.tdsinc.com.



(5)

In February 2016, U.S. Cellular entered into multiple agreements to exchange licenses.  Agreements are subject to regulatory approval and other customary closing conditions, and are expected to close in 2016.  Upon closing of the transactions, U.S. Cellular expects to record a gain.  A reasonable estimate of the gains is unavailable at the time of this filing.

 

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

Repurchase Period


# Shares


Cost (in millions)

2015 (full year)



$

2014 (full year)


1,541,850


$

39.1

Total


1,541,850


$

39.1

 

Conference Call Information
TDS will hold a conference call on February 19, 2016 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 1000TM company, provides wireless; broadband, video and voice; and hosted and managed services to approximately 6.1 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 10,400 people as of December 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: 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/divestures/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 overall economy; 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; 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 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

12/31/2015


9/30/2015


6/30/2015


3/31/2015


12/31/2014

Retail Customers
















Postpaid

















Total at end of period


4,409,000



4,341,000



4,324,000



4,307,000



4,298,000



Gross additions


240,000



200,000



191,000



200,000



302,000



Net additions (losses)


68,000



17,000



17,000



9,000



98,000



ARPU (1)(11)

$

51.46


$

58.12


$

53.62


$

54.87


$

56.51



ABPU (2)(11)

$

58.57


$

63.88


$

58.08


$

58.50


$

59.13



ARPA (3)(11)

$

131.96


$

147.00


$

133.85


$

134.94


$

136.13



ABPA (4)(11)

$

150.19


$

161.57


$

144.99


$

143.86


$

142.44



Churn rate (5)


1.3%



1.4%



1.3%



1.5%



1.6%



Smartphone penetration (6)


74%



72%



69%



67%



65%


Prepaid

















Total at end of period


387,000



380,000



368,000



360,000



348,000



Gross additions


69,000



71,000



65,000



73,000



60,000



Net additions (losses)


7,000



12,000



8,000



12,000



(2,000)



ARPU (1)(11)

$

35.54


$

35.64


$

35.98


$

35.72


$

35.33



Churn rate (5)


5.4%



5.2%



5.2%



5.8%



5.9%

Total customers at end of period


4,876,000



4,807,000



4,779,000



4,775,000



4,760,000

Billed ARPU (1)(11)

$

49.40


$

55.42


$

51.29


$

52.29


$

53.63

Service revenue ARPU (1)(11)

$

55.31


$

62.31


$

57.55


$

58.01


$

60.10

Smartphones sold as a percent of total handsets sold


91%



87%



87%



86%



87%

Total population

















Consolidated markets (7)(10)


50,520,000



50,313,000



52,809,000



52,822,000



58,840,000



Consolidated operating markets (7)


31,967,000



31,814,000



31,814,000



31,814,000



31,729,000

Market penetration at end of period

















Consolidated markets (8)


10%



10%



9%



9%



8%



Consolidated operating markets (8)


15%



15%



15%



15%



15%

Capital expenditures (000s)

$

198,111


$

134,816


$

133,666


$

66,460


$

181,655

Total cell sites in service


6,297



6,246



6,223



6,219



6,220

Owned towers (9)


3,978



3,957



3,940



3,936



4,280





















(1)

Average Revenue Per User ("ARPU") are metrics 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 Billing Per User ("ABPU") metric is calculated by dividing total postpaid service revenues plus equipment installment plan billings by the average number of postpaid customers by the number of months in the period.

(3)

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

(4)

Average Billing Per Account ("ABPA") metric is calculated by dividing total postpaid service revenues plus equipment installment plan billings by the average number of postpaid accounts by the number of months in the period.

(5)

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.

(6)

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 customers.

(7)

During the third quarter of 2015 U.S. Cellular reassessed population statistics with respect to markets which U.S. Cellular consolidates and revised its calculations to more accurately calculate such population statistics.  As a result, prior period population data and corresponding market penetration ratios were revised for markets that U.S. Cellular currently consolidates, or previously consolidated in the periods presented.  The decrease in the population of Consolidated markets is due primarily to the license exchange transactions of certain non-operating licenses in 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 (8) below.

(8)

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.

(9)

During the quarter ended March 31, 2015, U.S. Cellular sold 359 towers in divested markets.

(10)

As licenses awarded in Auction 97 have not yet been granted, population statistics related to such licenses have not been included in population data.

(11)

The quarter ended September 30, 2015 results include the recognition of $58 million in revenue due to the termination of the awards program.

 


 


TDS Telecom

Summary Operating Data (Unaudited)


Quarter Ended

12/31/2015


9/30/2015


6/30/2015


3/31/2015


12/31/2014

TDS Telecom















Wireline

















Residential connections


















Voice (1)


319,800



325,900



329,000



333,400



335,900




Broadband (2)


228,500



231,600



231,200



229,400



229,200




IPTV (3)


34,400



30,300



27,900



25,600



23,400




   Wireline residential connections


582,700



587,800



588,100



588,400



588,500





















Total residential revenue per connection (4)

$

41.24


$

42.83


$

42.10


$

42.32


$

41.56





















Commercial connections


















Voice (1)


171,500



176,700



181,800



187,500



193,200




Broadband (2)


22,400



23,000



23,700



24,300



24,700




managedIP (5)


147,100



145,900



145,100



143,200



140,200




   Wireline commercial connections


341,000



345,600



350,600



355,000



358,100





















Total Wireline connections


923,700



933,400



938,700



943,400



946,600



















Cable

















Cable Connections


















Video (6)


106,800



108,300



109,100



109,700



110,400




Broadband (7)


117,100



114,600



112,300



112,200



110,900




Voice (7)


56,400



54,000



51,500



49,100



46,000




   Cable connections


280,300



276,900



272,900



271,000



267,300





















(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

12/31/2015


9/30/2015


6/30/2015


3/31/2015


12/31/2014

Wireline

$

49,900


$

38,400


$

31,700


$

20,400


$

51,400

Cable


15,000



13,000



11,900



11,600



14,600

HMS


7,700



5,100



9,400



4,900



13,400


$

72,600


$

56,500


$

53,000


$

36,900


$

79,400

 


Telephone and Data Systems, Inc.

Consolidated Statement of Operations Highlights

Three Months Ended December 31,

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







Change





2015


2014


Amount

Percent

Operating revenues












U.S. Cellular

$

987,035


$

1,008,744


$

(21,709)


(2)%


TDS Telecom


283,871



281,889



1,982


1%


All Other (1)


3,549



6,428



(2,879)


(45)%






1,274,455



1,297,061



(22,606)


(2)%

Operating expenses












U.S. Cellular













Expenses excluding depreciation, amortization and accretion


849,895



939,331



(89,436)


(10)%



Depreciation, amortization and accretion


156,420



140,955



15,465


11%



(Gain) loss on asset disposals, net


4,045



4,695



(650)


(14)%



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


270



(5,136)



5,406


>100%



(Gain) loss on license sales and exchanges, net




(21,547)



21,547


N/M






1,010,630



1,058,298



(47,668)


(5)%


TDS Telecom













Expenses excluding depreciation, amortization and accretion


213,864



205,825



8,039


4%



Depreciation, amortization and accretion


57,713



58,394



(681)


(1)%



(Gain) loss on asset disposals, net


3,083



2,060



1,023


50%



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


(6,371)



(156)



(6,215)


>(100)%






268,289



266,123



2,166


1%


All Other (1)













Expenses excluding depreciation and amortization


4,719



4,039



680


17%



Depreciation and amortization


1,785



2,168



(383)


(18)%



Loss on impairment of assets




3,802



(3,802)


N/M



(Gain) loss on asset disposals, net




150



(150)


N/M



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


145



(1,475)



1,620


>100%






6,649



8,684



(2,035)


(23)%


















Total operating expenses


1,285,568



1,333,105



(47,537)


(4)%

Operating income (loss)












U.S. Cellular


(23,595)



(49,554)



25,959


52%


TDS Telecom


15,582



15,766



(184)


(1)%


All Other (1)


(3,100)



(2,256)



(844)


(37)%






(11,113)



(36,044)



24,931


69%

Investment and other income (expense)












Equity in earnings of unconsolidated entities


30,253



23,767



6,486


27%


Interest and dividend income


10,664



7,194



3,470


48%


Interest expense


(38,927)



(27,622)



(11,305)


(41)%


Other, net


249



(164)



413


>100%



Total investment and other income


2,239



3,175



(936)


(29)%

Loss before income taxes


(8,874)



(32,869)



23,995


73%


Income tax expense (benefit)


(6,788)



(12,208)



5,420


44%

Net loss


(2,086)



(20,661)



18,575


90%


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


(1,254)



(4,120)



2,866


70%

Net loss attributable to TDS shareholders


(832)



(16,541)



15,709


95%


TDS Preferred dividend requirement


(12)



(12)




-

Net loss available to common shareholders

$

(844)


$

(16,553)


$

15,709


95%















Basic weighted average shares outstanding


109,067



107,995



1,072


1%

Basic earnings (loss) per share attributable to TDS shareholders

$

(0.01)


$

(0.15)


$

0.15


95%















Diluted weighted average shares outstanding


109,067



107,995



1,072


1%

Diluted earnings (loss) per share attributable to TDS shareholders

$

(0.01)


$

(0.15)


$

0.14


88%

















(1)

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

N/M – Percentage change not meaningful

 


Telephone and Data Systems, Inc.

Consolidated Statement of Operations Highlights

Twelve Months Ended December 31,

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







Change





2015


2014


Amount

Percent

Operating revenues












U.S. Cellular

$

3,996,853


$

3,892,747


$

104,106


3%


TDS Telecom


1,158,043



1,088,312



69,731


6%


All Other (1)


21,345



28,379



(7,034)


(25)%






5,176,241



5,009,438



166,803


3%

Operating expenses












U.S. Cellular













Expenses excluding depreciation, amortization and accretion


3,321,582



3,554,494



(232,912)


(7)%



Depreciation, amortization and accretion


606,455



605,997



458


-



(Gain) loss on asset disposals, net


16,313



21,469



(5,156)


(24)%



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


(113,555)



(32,830)



(80,725)


>(100)%



(Gain) loss on license sales and exchanges, net


(146,884)



(112,993)



(33,891)


(30)%






3,683,911



4,036,137



(352,226)


(9)%


TDS Telecom













Expenses excluding depreciation, amortization and accretion


854,179



792,687



61,492


8%



Depreciation, amortization and accretion


228,060



219,599



8,461


4%



Loss on impairment of assets




84,000



(84,000)


N/M



(Gain) loss on asset disposals, net


5,874



4,754



1,120


24%



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


(9,530)



(2,357)



(7,173)








1,078,583



1,098,683



(20,100)


(2)%


All Other (1)













Expenses excluding depreciation and amortization


19,643



30,095



(10,452)


(35)%



Depreciation and amortization


9,846



10,936



(1,090)


(10)%



Loss on impairment of assets




3,802



(3,802)


N/M



(Gain) loss on asset disposals, net


(11)



308



(319)


>(100)%



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


(12,802)



19,341



(32,143)


>(100)%






16,676



64,482



(47,806)


(74)%


















Total operating expenses


4,779,170



5,199,302



(420,132)


(8)%

Operating income (loss)












U.S. Cellular


312,942



(143,390)



456,332


>100%


TDS Telecom


79,460



(10,371)



89,831


>100%


All Other (1)


4,669



(36,103)



40,772


>100%






397,071



(189,864)



586,935


>100%

Investment and other income (expense)












Equity in earnings of unconsolidated entities


140,076



131,965



8,111


6%


Interest and dividend income


38,783



16,957



21,826


>100%


Interest expense


(141,719)



(111,397)



(30,322)


(27)%


Other, net


391



115



276


>100%



Total investment and other income


37,531



37,640



(109)


-

Income (loss) before income taxes


434,602



(152,224)



586,826


>100%


Income tax expense (benefit)


171,992



(4,932)



176,924


>100%

Net income (loss)


262,610



(147,292)



409,902


>100%


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


43,573



(10,937)



54,510


>100%

Net income (loss) attributable to TDS shareholders


219,037



(136,355)



355,392


>100%


TDS Preferred dividend requirement


(49)



(49)




-

Net income (loss) available to common shareholders

$

218,988


$

(136,404)


$

355,392


>100%















Basic weighted average shares outstanding


108,645



108,485



160


-

Basic earnings (loss) per share attributable to TDS shareholders

$

2.02


$

(1.26)


$

3.28


N/M















Diluted weighted average shares outstanding


109,910



108,485



1,425


1%

Diluted earnings (loss) per share attributable to TDS shareholders

$

1.98


$

(1.26)


$

3.24


>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 in 2015.  Due to the Airadigm Transaction, TDS recognized expenses of $20.2 million related to exit and disposal activities in 2014.

N/M – Percentage change not meaningful

 


Telephone and Data Systems, Inc.

Consolidated Balance Sheet Highlights

(Unaudited, dollars in thousands)






ASSETS













December 31,


December 31,



2015


2014

Current assets







Cash and cash equivalents

$

984,643


$

471,901


Accounts receivable from customers and others, net


802,856



683,681


Inventory, net


158,222



273,707


Net deferred income tax asset




107,686


Prepaid expenses


112,235



86,506


Income taxes receivable


70,094



113,708


Other current assets


30,293



29,766




2,158,343



1,766,955








Assets held for sale




103,343








Licenses


1,844,348



1,453,574

Goodwill


765,792



771,352

Franchise rights


244,180



244,300

Other intangible assets, net


46,525



64,499

Investments in unconsolidated entities


401,720



321,729

Other investments


616



508








Property, plant and equipment, net


3,764,477



3,846,125








Other assets and deferred charges (1)


196,461



282,037








Total assets

$

9,422,462


$

8,854,422










(1)

TDS reclassified unamortized debt issuance costs of $52.5 million as of December 31, 2014 from Other assets and deferred charges to Long-term debt, net due to early adoption of ASU 2015-03.

 


Telephone and Data Systems, Inc.

Consolidated Balance Sheet Highlights

(Unaudited, dollars in thousands)








LIABILITIES AND EQUITY



















December 31,


December 31,





2015


2014

Current liabilities








Current portion of long-term debt

$

14,306


$

808



Accounts payable


348,737



387,125



Customer deposits and deferred revenues


288,412



324,318



Accrued interest


11,962



7,919



Accrued taxes


40,569



46,734



Accrued compensation


113,375



114,549



Other current liabilities


127,023



181,803






944,384



1,063,256










Liabilities held for sale




21,643










Deferred liabilities and credits








Net deferred income tax liability


900,054



941,519



Other deferred liabilities and credits


432,949



430,774










Long-term debt, net (1)


2,439,827



1,941,069










Noncontrolling interests with redemption features


1,097



1,150










Equity







TDS shareholders' equity








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


1,328



1,327



Capital in excess of par value


2,363,558



2,336,511



Treasury shares, at cost


(727,182)



(748,199)



Accumulated other comprehensive income


355



6,452



Retained earnings


2,487,491



2,330,187




 Total TDS shareholders' equity


4,125,550



3,926,278











Preferred shares


824



824


Noncontrolling interests


577,777



527,909












Total equity


4,704,151



4,455,011










Total liabilities and equity

$

9,422,462


$

8,854,422












(1)

TDS reclassified unamortized debt issuance costs of $52.5 million as of December 31, 2014 from Other assets and deferred charges to Long-term debt, net due to early adoption of ASU 2015-03.

 

Balance Sheet Highlights

December 31, 2015

(Unaudited, dollars in thousands)






U.S.


TDS


TDS Corporate


Intercompany


TDS




Cellular


Telecom


& Other


Eliminations


Consolidated

Cash and cash equivalents

$

715,376


$

40,303


$

228,964


$


$

984,643

Affiliated cash investments




298,472





(298,472)





$

715,376


$

338,775


$

228,964


$

(298,472)


$

984,643


















Licenses, goodwill and other intangible assets

$

2,203,808


$

835,149


$

(138,112)


$


$

2,900,845

Investment in unconsolidated entities


363,383



3,802



39,888



(5,353)



401,720

Long-term and other investments




423



193





616




$

2,567,191


$

839,374


$

(98,031)


$

(5,353)


$

3,303,181



































Property, plant and equipment, net

$

2,648,933


$

1,093,790


$

21,963


$

(209)


$

3,764,477


















Long-term debt:
















Current portion

$

11,313


$

25


$

2,968


$


$

14,306


Non-current portion, net


1,628,507



1,399



809,921





2,439,827




$

1,639,820


$

1,424


$

812,889


$


$

2,454,133

 

Telephone and Data Systems, Inc.

Consolidated Statement of Cash Flows

Twelve Months Ended December 31,

(Unaudited, dollars in thousands)






2015


2014

Cash flows from operating activities







Net income (loss)

$

262,610


$

(147,292)



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










Depreciation, amortization and accretion


844,361



836,532





Bad debts expense


112,292



107,861





Stock-based compensation expense


40,400



35,793





Deferred income taxes, net


70,849



71,713





Equity in earnings of unconsolidated entities


(140,076)



(131,965)





Distributions from unconsolidated entities


60,060



112,349





Loss on impairment of assets




87,802





(Gain) loss on asset disposals, net


22,176



26,531





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


(135,887)



(15,846)





(Gain) loss on license sales and exchanges, net


(146,884)



(112,993)





Noncash interest expense


2,760



1,642





Other operating activities


(769)



(641)



Changes in assets and liabilities from operations










Accounts receivable


(120,230)



17,629





Equipment installment plans receivable


(133,734)



(188,829)





Inventory


115,482



(29,149)





Accounts payable


7,245



(117,264)





Customer deposits and deferred revenues


(35,850)



33,952





Accrued taxes


38,259



(122,921)





Accrued interest


4,046



1,277





Other assets and liabilities


(77,416)



(71,369)





   Net cash provided by operating activities


789,694



394,812











Cash flows from investing activities







Cash used for additions to property, plant and equipment


(800,628)



(799,496)


Cash paid for acquisitions and licenses


(286,861)



(295,253)


Cash received from divestitures and exchanges


342,870



187,645


Cash received for investments




50,000


Federal Communications Commission deposit




(60,000)


Other investing activities


6,932



7,360





   Net cash used in investing activities


(737,687)



(909,744)











Cash flows from financing activities







Repayment of long-term debt


(816)



(1,072)


Issuance of long-term debt


525,000



275,000


Repayment of borrowing under revolving credit facility




(150,000)


Borrowing under revolving credit facility




150,000


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


13,329



(2,019)


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


2,167



830


Repurchase of TDS Common Shares




(39,096)


Repurchase of U.S. Cellular Common Shares


(6,188)



(18,943)


Dividends paid to TDS shareholders


(61,219)



(58,040)


Payment of debt issuance costs


(13,026)



(10,215)


Distributions to noncontrolling interests


(6,369)



(627)


Payments to acquire additional interest in subsidiaries


(3,983)




Other financing activities


11,840



11,001





   Net cash provided by financing activities


460,735



156,819











Net increase (decrease) in cash and cash equivalents


512,742



(358,113)











Cash and cash equivalents







Beginning of period


471,901



830,014


End of period

$

984,643


$

471,901

 

TDS Telecom Highlights

Three Months Ended December 31,

(Unaudited, dollars in thousands)







Change





2015


2014


Amount


Percent

Wireline











Operating revenues












Residential

$

72,473


$

73,538


$

(1,065)


(1)%


Commercial


54,445



56,675



(2,230)


(4)%


Wholesale


46,337



49,493



(3,156)


(6)%



Total service revenues


173,255



179,706



(6,451)


(4)%


Equipment and product sales


487



427



60


14%






173,742



180,133



(6,391)


(4)%

Operating expenses












Cost of services


66,152



64,101



2,051


3%


Cost of equipment and products


537



543



(6)


(1)%


Selling, general and administrative expenses


48,919



49,101



(182)


-


Depreciation, amortization and accretion


41,401



43,123



(1,722)


(4)%


(Gain) loss on asset disposals, net


1,721



589



1,132


>100%


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


(6,371)



(156)



(6,215)


>(100)%






152,359



157,301



(4,942)


(3)%
















Operating income

$

21,383


$

22,832


$

(1,449)


(6)%















Cable











Operating revenues












Residential

$

33,530


$

34,587


$

(1,057)


(3)%


Commercial


9,232



8,762



470


5%



Total service revenues


42,762



43,349



(587)


(1)%


Equipment and product sales


160





160


N/M






42,922



43,349



(427)


(1)%

Operating expenses












Cost of services


19,416



19,265



151


1%


Cost of equipment and products


69





69


N/M


Selling, general and administrative expenses


13,003



13,564



(561)


(4)%


Depreciation, amortization and accretion


9,162



8,554



608


7%


(Gain) loss on asset disposals, net


1,252



1,366



(114)


(8)%






42,902



42,749



153


-
















Operating income

$

20


$

600


$

(580)


(97)%















HMS











Operating revenues












Service revenues

$

28,499


$

27,009


$

1,490


6%


Equipment and product sales


40,107



33,136



6,971


21%






68,606



60,145



8,461


14%

Operating expenses












Cost of services


22,018



19,703



2,315


12%


Cost of equipment and products


34,150



28,201



5,949


21%


Selling, general and administrative expenses


10,999



13,085



(2,086)


(16)%


Depreciation, amortization and accretion


7,150



6,717



433


6%


(Gain) loss on asset disposals, net


110



105



5


5%






74,427



67,811



6,616


10%
















Operating (loss)

$

(5,821)


$

(7,666)


$

1,845


24%















Intercompany revenues

$

(1,399)


$

(1,738)


$

339


20%

Intercompany expenses


(1,399)



(1,738)



339


20%















Total TDS Telecom operating income

$

15,582


$

15,766


$

(184)


(1)%

 

TDS Telecom Highlights

Twelve Months Ended December 31,

(Unaudited, dollars in thousands)








Change





2015


2014


Amount


Percent

Wireline











Operating revenues












Residential

$

296,943


$

293,304


$

3,639


1%


Commercial


220,643



229,306



(8,663)


(4)%


Wholesale


181,352



191,976



(10,624)


(6)%



Total service revenues


698,938



714,586



(15,648)


(2)%


Equipment and product sales


1,965



1,836



129


7%






700,903



716,422



(15,519)


(2)%

Operating expenses












Cost of services


254,879



256,878



(1,999)


(1)%


Cost of equipment and products


2,212



2,336



(124)


(5)%


Selling, general and administrative expenses


193,850



189,956



3,894


2%


Depreciation, amortization and accretion


165,841



169,044



(3,203)


(2)%


(Gain) loss on asset disposals, net


5,094



2,091



3,003


>100%


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


(9,530)



(2,357)



(7,173)


>(100)%






612,346



617,948



(5,602)


(1)%
















Operating income

$

88,557


$

98,474


$

(9,917)


(10)%















Cable











Operating revenues












Residential

$

138,377


$

93,983


$

44,394


47%


Commercial


36,152



22,872



13,280


58%



Total service revenues


174,529



116,855



57,674


49%


Equipment and product sales


437





437


N/M






174,966



116,855



58,111


50%

Operating expenses












Cost of services


78,758



54,265



24,493


45%


Cost of equipment and products


169





169


N/M


Selling, general and administrative expenses


53,738



36,175



17,563


49%


Depreciation, amortization and accretion


35,271



23,643



11,628


49%


(Gain) loss on asset disposals, net


691



2,482



(1,791)


(72)%






168,627



116,565



52,062


45%
















Operating income

$

6,339


$

290


$

6,049


>100%















HMS











Operating revenues












Service revenues

$

116,810


$

109,766


$

7,044


6%


Equipment and product sales


169,985



148,966



21,019


14%






286,795



258,732



28,063


11%

Operating expenses












Cost of services


85,163



77,392



7,771


10%


Cost of equipment and products


142,927



126,362



16,565


13%


Selling, general and administrative expenses


47,104



53,020



(5,916)


(11)%


Depreciation, amortization and accretion


26,948



26,912



36


-


Loss on impairment of assets




84,000



(84,000)


N/M


(Gain) loss on asset disposals, net


89



181



(92)


(51)%






302,231



367,867



(65,636)


(18)%
















Operating (loss)

$

(15,436)


$

(109,135)


$

93,699


86%















Intercompany revenues

$

(4,621)


$

(3,697)


$

(924)


(25)%

Intercompany expenses


(4,621)



(3,697)



(924)


(25)%















Total TDS Telecom operating income (loss)

$

79,460


$

(10,371)


$

89,831


>100%

 


Telephone and Data Systems, Inc.

Financial Measures and Reconciliations

(Unaudited, dollars in thousands)










TDS Consolidated












Three Months Ended


Twelve Months Ended





December 31,


December 31,



2015


2014


2015


2014












Cash flows from operating activities


$

62,776


$

(101,399)


$

789,694


$

394,812

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



242,516



245,778



800,628



799,496



Free cash flow



(179,740)



(347,177)



(10,934)



(404,684)

Add: Sprint Cost Reimbursement



2,378



19,085



29,974



71,097



Adjusted free cash flow (1)


$

(177,362)


$

(328,092)


$

19,040


$

(333,587)


















(1)

Free cash flow is defined as Cash flows from operating activities less Cash used for additions to property, plant and equipment.  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.  Sprint decommissioning and Sprint Cost Reimbursement are further defined and discussed in our Annual Report on Form 10-K for the year ended December 31, 2015.  Free cash flow and Adjusted free cash flow are non-GAAP financial measures 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-fourth-quarter-and-full-year-2015-results-300222914.html

SOURCE Telephone and Data Systems, Inc.

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

Multimedia Files:

View all news