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