CHICAGO, Aug. 5, 2016 /PRNewswire/ -- Telephone and Data Systems, Inc. (NYSE:TDS) reported total operating revenues of $1,283 million for the second quarter of 2016, versus $1,276 million for the comparable period one year ago. Net income attributable to TDS shareholders and related diluted earnings per share were $28 million and $0.25, respectively, for the second quarter of 2016, compared to $23 million and $0.21, respectively, in the comparable period one year ago.
"TDS businesses showed continued progress through the quarter," said LeRoy T. Carlson, Jr., TDS president and CEO. "U.S. Cellular grew its customers while TDS Telecom achieved growth in IPTV and broadband connections and increased service revenues at OneNeck.
"U.S. Cellular maintained momentum in the quarter by increasing connections and driving exceptionally low churn, reflecting our commitment to providing a top quality network and outstanding customer service at every point of customer engagement. U.S. Cellular focused on stronger adoption of equipment installment plans (EIP), which generated strong equipment revenue growth.
"TDS Telecom achieved success in the recent quarter by growing total wireline residential connections, adding IPTV connections and increasing residential revenue per connection. TDS Telecom's cable segment added residential broadband and voice connections and increased operating revenues. TDS Telecom's IT service business, OneNeck, generated higher revenues from maintenance and professional services and increased its equipment sales of hardware solutions."
2016 Estimated Results
Current estimates of full-year 2016 results for U.S. Cellular, TDS Telecom, and TDS, which are unchanged from the previous estimates, are shown below. Such estimates represent management's view as of August 5, 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 U.S. Cellular TDS Telecom TDS(2) Current Previous Current Previous Current Previous (Dollars in millions) Total operating revenues $3,900-$4,100 Unchanged $1,130-$1,180 Unchanged $5,040-$5,290 Unchanged Operating cash flow (1) $525-$650 Unchanged $270-$310 Unchanged $800-$965 Unchanged Adjusted EBITDA (1) $725-$850 Unchanged $270-$310 Unchanged $1,000-$1,165 Unchanged Capital expenditures (Approximately) $500 Unchanged $180 Unchanged $695 Unchanged
The following tables provide a reconciliation to Operating Cash Flow and Adjusted EBITDA for 2016 estimated results, and actual results for the six months ended June 30, 2016 and year ended December 31, 2015. In providing 2016 estimated results, TDS has not completed the below reconciliation to net income because it does not provide guidance for income taxes. Although potentially significant, TDS believes that the impact of income taxes cannot be reasonably predicted; therefore, TDS is unable to provide such guidance.
2016 Estimated Results 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) $ (5)-120 $ 40-80 $ (25)-140 --- ------- --- ----- --- -------- Add back: Interest expense 110 - 165 Depreciation, amortization and accretion expense 610 230 850 --- --- --- EBITDA (Non-GAAP) $ 715-840 $ 270-310 $ 990-1,155 --- ------- --- ------- --- --------- Add back: (Gain) loss on sale of business and other exit costs, net - - - (Gain) loss on license sales and exchanges, net (10) - (10) (Gain) loss on asset disposals, net 20 - 20 --- --- --- Adjusted EBITDA (Non-GAAP) (1) $ 725-850 $ 270-310 $ 1,000-1,165 === ======= === ======= === =========== Deduct: Equity in earnings of unconsolidated entities 140 - 140 Interest and dividend income 60 - 60 --- --- --- Operating cash flow (Non-GAAP) (1) $ 525-650 $ 270-310 $ 800-965 === ======= === ======= === =======
Actual Results Six Months Ended June 30, 2016 Year ended December 31, 2015 U.S. Cellular TDS TDS (2) U.S. Cellular* TDS TDS (2)* Telecom Telecom (Dollars in millions) Net income (GAAP) $37 $25 $42 $247 $46 $263 Add back: Income tax expense 23 16 31 156 35 172 Income before income taxes (GAAP) $60 $41 $73 $404 $81 $435 Add back: Interest expense 56 1 85 86 1 142 Depreciation, amortization and accretion expense 307 112 422 606 228 844 EBITDA (Non-GAAP) $423 $154 $580 $1,096 $310 $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 (9) - (9) (147) - (147) (Gain) loss on asset disposals, net 10 2 12 16 6 22 Adjusted EBITDA (Non-GAAP) (1) $424 $156 $583 $852 $306 $1,160 ==== ==== ==== ==== ==== ====== Deduct: Equity in earnings of unconsolidated entities 72 - 72 140 - 140 Interest and dividend income 27 2 29 37 2 39 Operating cash flow (Non-GAAP) (1)(3) $325 $155 $482 $675 $304 $981 ==== ==== ==== ==== ==== ==== * Includes $58 million of revenue related to termination of the rewards points program. Note: Totals may not foot due to rounding differences.
(1) Adjusted EBITDA (earnings before interest, taxes, depreciation, amortization and accretion) is defined as net income adjusted for the items set forth in the reconciliation above. Operating cash flow is defined as net income adjusted for the items set forth in the reconciliation above. Adjusted EBITDA and Operating cash flow are not measures of financial performance under Generally Accepted Accounting Principles in the United States ("GAAP") and should not be considered as alternatives to Net incomes, as indicators of cash flows or as measure of liquidity. TDS does not intend to imply that any such items set forth in the reconciliation above are non-recurring, infrequent or unusual; such items may occur in the future. Management uses Adjusted EBITDA and Operating cash flow as measurements of profitability, and therefore reconciliations to applicable GAAP income measures are deemed most appropriate. Management believes Adjusted EBITDA and Operating cash flow are useful measures of TDS' operating results before significant recurring non-cash charges, gains and losses, and other items as presented below as they provide additional relevant and useful information to investors and other users of TDS' financial data in evaluating the effectiveness of its operations and underlying business trends in a manner that is consistent with management's evaluation of business performance. Adjusted EBITDA shows adjusted earnings before interest, taxes, depreciation, amortization and accretion, while Operating cash flow reduces this measure further to exclude Equity in earnings of unconsolidated entities and Interest and dividend income in order to more effectively show the performance of operating activities excluding investment activities. The table above reconciles Adjusted EBITDA and Operating cash flow to the corresponding GAAP measure, Net income or Income (loss) before incomes taxes. (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) A reconciliation of Operating cash flow (Non- GAAP) to operating income (GAAP) for June 30, 2016 actual results can be found on the company's website at investors.tdsinc.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) 2016 (year-to-date through June 30, 2016) 111,700 $3 2015 (full year) - $ - Total 111,700 $3 ======= ===
Conference Call Information
TDS will hold a conference call on August 5, 2016 at 9:30 a.m. Central Time.
-- Access the live call on the Events & Presentations page of
investors.tdsinc.com or at
https://www.webcaster4.com/Webcast/Page/1145/16520.
-- Access the call by phone at 877/407-8029 (US/Canada), no pass code
required.
Before the call, certain financial and statistical information to be discussed during the call will be posted to investors.tdsinc.com. The call will be archived on the Events & Presentations page of investors.tdsinc.com.
About TDS
Telephone and Data Systems, Inc. (TDS), a Fortune 500((R)) company, provides wireless; cable and wireline broadband, TV and voice; and hosted and managed services to approximately 6 million customers nationwide through its businesses, U.S. Cellular, TDS Telecom, OneNeck IT Solutions, and BendBroadband. Founded in 1969 and headquartered in Chicago, TDS employed 10,400 people as of June 30, 2016.
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, 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 6/30/2016 3/31/2016 12/31/2015 9/30/2015 6/30/2015 Retail Connections Postpaid Total at end of period 4,490,000 4,454,000 4,409,000 4,341,000 4,324,000 Gross additions 197,000 215,000 240,000 200,000 191,000 Feature phones 8,000 9,000 10,000 14,000 15,000 Smartphones 107,000 124,000 132,000 119,000 115,000 Connected devices 82,000 82,000 98,000 67,000 61,000 Net additions (losses) 36,000 45,000 68,000 17,000 17,000 Feature phones (21,000) (25,000) (25,000) (28,000) (26,000) Smartphones 8,000 20,000 23,000 6,000 7,000 Connected devices 49,000 50,000 70,000 39,000 36,000 ARPU (1)(8) $47.37 $48.13 $51.46 $58.12 $53.62 ABPU (Non- GAAP)*(2)(8) $56.09 $56.06 $58.57 $63.88 $58.06 ARPA (3)(8) $124.91 $125.36 $131.96 $147.00 $133.85 ABPA (Non- GAAP)*(4)(8) $147.90 $145.99 $150.19 $161.57 $144.94 Churn rate (5) 1.20% 1.28% 1.31% 1.41% 1.34% Handsets 1.10% 1.18% 1.23% 1.33% 1.26% Connected devices 1.84% 2.01% 1.95% 2.20% 2.13% Smartphone penetration (6) 77% 75% 74% 72% 69% Prepaid Total at end of period 413,000 399,000 387,000 380,000 368,000 Gross additions 73,000 75,000 69,000 71,000 65,000 Net additions (losses) 14,000 12,000 7,000 12,000 8,000 ARPU (1) $34.58 $35.51 $35.54 $35.64 $35.98 Churn rate (5) 4.86% 5.37% 5.40% 5.24% 5.22% Total connections at end of period (9) 4,973,000 4,926,000 4,876,000 4,807,000 4,779,000 Smartphones sold as a percent of total handsets sold 91% 92% 91% 87% 87% Market penetration at end of period Consolidated operating population 31,994,000 31,994,000 31,967,000 31,814,000 31,814,000 Consolidated operating penetration (7) 16% 15% 15% 15% 15% Capital expenditures (millions) $93 $79 $198 $135 $134 Total cell sites in service 6,324 6,306 6,297 6,246 6,223 Owned towers 3,988 3,989 3,978 3,957 3,940
* See Non-GAAP reconciliation at end. (1) Average Revenue Per User ("ARPU") -metric is calculated by dividing a revenue base by an average number of connections and by the number of months in the period. These revenue bases and connection populations are shown below: Postpaid ARPU consists of total postpaid service revenues and postpaid connections. Prepaid ARPU consists of total prepaid service revenues and prepaid connections. (2) Average Billings Per User ("ABPU") - non-GAAP metric is calculated by dividing total postpaid service revenues plus equipment installment plan billings by the average number of postpaid connections and by the number of months in the period. (3) Average Revenue Per Account ("ARPA") -metric is calculated by dividing total postpaid service revenues by the average number of postpaid accounts and by the number of months in the period. (4) Average Billings Per Account ("ABPA") - non-GAAP metric is calculated by dividing total postpaid service revenues plus equipment installment plan billings by the average number of postpaid accounts and by the number of months in the period. (5) Churn metrics represents the percentage of the connections that disconnect service each month. These rates represent the average monthly 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 connections by postpaid handset connections. (7) Market penetration is calculated by dividing the number of wireless connections at the end of the period by the total population of consolidated operating markets as estimated by Nielsen. (8) The quarter ended September 30, 2015 results include the recognition of $58 million in revenue due to the termination of the rewards program. (9) Includes reseller and other connections.
TDS Telecom Summary Operating Data (Unaudited) Quarter Ended 6/30/2016 3/31/2016 12/31/2015 9/30/2015 6/30/2015 TDS Telecom Wireline -------- Residential connections Voice (1) 316,800 318,400 319,800 325,900 329,000 Broadband (2) 232,200 229,100 228,500 231,600 231,200 IPTV (3) 41,200 38,300 34,400 30,300 27,900 Wireline residential connections 590,200 585,800 582,700 587,800 588,100 ------- ------- ------- ------- ------- Total residential revenue per connection (4) $43.67 $43.28 $41.24 $42.83 $42.10 Commercial connections Voice (1) 164,000 167,400 171,500 176,700 181,800 Broadband (2) 21,900 22,000 22,400 23,000 23,700 managedIP (5) 149,000 148,500 147,100 145,900 145,100 Wireline commercial connections 334,900 337,900 341,000 345,600 350,600 ------- ------- ------- ------- ------- Total Wireline connections 925,100 923,700 923,700 933,400 938,700 Cable ----- Cable Connections Video (6) 102,900 104,600 106,800 108,300 109,100 Broadband (7) 125,700 121,700 117,100 114,600 112,300 Voice (8) 58,900 58,100 56,400 54,000 51,500 Cable connections 287,600 284,400 280,300 276,900 272,900 ======= ======= ======= ======= =======
Numbers may not foot due to rounding. (1) The individual circuits connecting a customer to Wireline's central office facilities. (2) The number of Wireline customers provided high- capacity data circuits via various technologies, including DSL and dedicated internet circuit technologies. (3) The number of Wireline customers provided video services using IP networking technology. (4) Total residential revenue per connection is calculated by dividing total Wireline residential revenue by the average number of total Wireline residential connections and by the number of months in the period. (5) The number of telephone handsets, data lines and IP trunks providing communications using IP networking technology. (6) 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) Billable number of lines into a building for high- speed data services. (8) Billable number of lines into a building for voice services.
TDS Telecom Capital Expenditures (millions) Quarter Ended 6/30/2016 3/31/2016 12/31/2015 9/30/2015 6/30/2015 Wireline $27 $27 $50 $38 $32 Cable 17 13 15 13 12 HMS 2 2 8 5 9 $46 $42 $73 $56 $53 === === === === ===
Telephone and Data Systems, Inc. Consolidated Statement of Operations Highlights (Unaudited) Three Months Ended June 30, 2016 2015 2016 vs. 2015 Increase (Decrease) (Dollars and shares in millions, except per share amounts) Operating revenues U.S. Cellular $980 $976 $4 - TDS Telecom 300 295 5 2% All Other (1) 3 5 (2) (40)% 1,283 1,276 7 1% ----- ----- --- Operating expenses U.S. Cellular Expenses excluding depreciation, amortization and accretion 812 814 (2) - Depreciation, amortization and accretion 154 151 3 2% (Gain) loss on asset disposals, net 5 5 - (12)% (Gain) loss on sale of business and other exit costs, net - (2) 2 N/M (Gain) loss on license sales and exchanges, net (9) - (9) >(100)% 962 968 (6) (1)% --- --- --- TDS Telecom Expenses excluding depreciation, amortization and accretion 221 216 4 2% Depreciation, amortization and accretion 54 57 (3) (6)% (Gain) loss on asset disposals, net 1 (1) 2 >100% (Gain) loss on sale of business and other exit costs, net - (3) 3 >100% 275 269 6 2% --- --- --- All Other (1) Expenses excluding depreciation and amortization 3 4 (1) (49)% Depreciation and amortization 2 3 (1) (52)% (Gain) loss on asset disposals, net - 1 (1) >100% (Gain) loss on sale of business and other exit costs, net (2) - (1) 1 100% 5 7 (2) (45)% --- --- --- Total operating expenses 1,242 1,244 (2) - ----- ----- --- Operating income (loss) U.S. Cellular 18 8 10 >100% TDS Telecom 24 26 (1) (5)% All Other (1) (1) (2) - 61% 41 32 9 28% --- --- --- Investment and other income (expense) Equity in earnings of unconsolidated entities 36 35 1 3% Interest and dividend income 15 10 5 52% Interest expense (43) (34) (9) (26)% Other, net 1 1 - >(100)% Total investment and other income 9 12 (3) (25)% --- --- --- Income before income taxes 50 44 6 14% Income tax expense 18 18 - 4% Net income 32 26 6 20% Less: Net income attributable to noncontrolling interests, net of tax 4 3 1 18% --- --- --- Net income attributable to TDS shareholders 28 23 5 21% TDS Preferred dividend requirement - - - - Net income available to common shareholders $28 $23 $5 21% === === === Basic weighted average shares outstanding 109 108 1 1% Basic earnings per share attributable to TDS shareholders $0.25 $0.21 $0.04 19% Diluted weighted average shares outstanding 111 110 1 1% Diluted earnings per share attributable to TDS shareholders $0.25 $0.21 $0.04 19%
(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 (Unaudited) Six Months Ended June 30, 2016 2015 2016 vs. 2015 Increase (Decrease) (Dollars and shares in millions, except per share amounts) Operating revenues U.S. Cellular $1,938 $1,941 $(3) - TDS Telecom 581 575 6 1% All Other (1) 7 12 (5) (45)% 2,526 2,528 (2) - ----- ----- --- Operating expenses U.S. Cellular Expenses excluding depreciation, amortization and accretion 1,613 1,610 3 - Depreciation, amortization and accretion 307 298 9 3% (Gain) loss on asset disposals, net 10 10 - 2% (Gain) loss on sale of business and other exit costs, net - (113) 113 100% (Gain) loss on license sales and exchanges, net (9) (123) 114 93% 1,921 1,682 239 14% ----- ----- --- TDS Telecom Expenses excluding depreciation, amortization and accretion 426 417 10 2% Depreciation, amortization and accretion 112 114 (2) (2)% (Gain) loss on asset disposals, net 2 - 2 >100% (Gain) loss on sale of business and other exit costs, net - (3) 3 >100% 540 528 12 2% --- --- --- All Other (1) Expenses excluding depreciation and amortization 5 10 (5) (54)% Depreciation and amortization 3 6 (3) (40)% (Gain) loss on sale of business and other exit costs, net (2) - (13) 13 100% 8 3 5 >100% --- --- --- Total operating expenses 2,469 2,213 256 12% ----- ----- --- Operating income (loss) U.S. Cellular (3) 17 259 (242) (93)% TDS Telecom 41 47 (6) (12)% All Other (1) (1) 9 (10) >(100)% 57 315 (258) (82)% --- --- ---- Investment and other income (expense) Equity in earnings of unconsolidated entities 72 70 2 2% Interest and dividend income 29 19 10 58% Interest expense (85) (68) (17) (25)% Total investment and other income 16 21 (5) (24)% --- --- --- Income before income taxes 73 336 (263) (78)% Income tax expense 31 134 (103) (77)% Net income 42 202 (160) (79)% Less: Net income attributable to noncontrolling interests, net of tax 6 33 (27) (82)% --- --- --- Net income attributable to TDS shareholders 36 169 (133) (79)% TDS Preferred dividend requirement - - - - Net income available to common shareholders $36 $169 $(133) (79)% === ==== ===== Basic weighted average shares outstanding 109 108 1 1% Basic earnings per share attributable to TDS shareholders $0.33 $1.56 $(1.23) (79)% Diluted weighted average shares outstanding 111 109 2 1% Diluted earnings per share attributable to TDS shareholders $0.32 $1.53 $(1.21) (79)%
(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 $12 million on the tower sale as a result of a lower basis in the assets disposed in 2015. (3) Year-over-year comparisons are affected by gains of $252 million from sales and exchanges of businesses and licenses in 2015. N/M - Percentage change not meaningful
Telephone and Data Systems, Inc. Consolidated Statement of Cash Flows (Unaudited) Six Months Ended June 30, 2016 2015 (Dollars in millions) Cash flows from operating activities Net income $42 $202 Add (deduct) adjustments to reconcile net income to net cash flows from operating activities Depreciation, amortization and accretion 422 418 Bad debts expense 46 55 Stock-based compensation expense 18 18 Deferred income taxes, net 8 (41) Equity in earnings of unconsolidated entities (72) (70) Distributions from unconsolidated entities 30 27 (Gain) loss on asset disposals, net 12 10 (Gain) loss on sale of business and other exit costs, net - (129) (Gain) loss on license sales and exchanges, net (9) (123) Noncash interest expense 2 1 Other operating activities (3) - Changes in assets and liabilities from operations Accounts receivable (6) (18) Equipment installment plans receivable (94) (65) Inventory (26) 127 Accounts payable 32 30 Customer deposits and deferred revenues (18) (7) Accrued taxes 76 191 Accrued interest (1) - Other assets and liabilities (59) (88) Net cash provided by operating activities 400 538 --- --- Cash flows from investing activities Cash used for additions to property, plant and equipment (281) (359) Cash paid for acquisitions and licenses (46) (281) Cash received from divestitures and exchanges 17 292 Federal Communications Commission deposit (143) - Other investing activities 1 2 Net cash used in investing activities (452) (346) ---- ---- Cash flows from financing activities Repayment of long-term debt (6) - Issuance of long-term debt 2 - TDS Common Shares reissued for benefit plans, net of tax payments - 10 U.S. Cellular Common Shares reissued for benefit plans, net of tax payments 3 (2) Repurchase of TDS Common Shares (3) - Repurchase of U.S. Cellular Common Shares (2) (2) Dividends paid to TDS shareholders (32) (31) Payment of debt issuance costs (4) (3) Distributions to noncontrolling interests (1) (6) Other financing activities 9 2 Net cash provided by financing activities (34) (32) --- --- Net increase (decrease) in cash and cash equivalents (86) 160 Cash and cash equivalents Beginning of period 985 472 End of period $899 $632
Telephone and Data Systems, Inc. Consolidated Balance Sheet Highlights (Unaudited) ASSETS June 30, December 31, 2016 2015 (Dollars in millions) Current assets Cash and cash equivalents $899 $985 Accounts receivable from customers and others, net 824 803 Inventory, net 184 158 Prepaid expenses 121 112 Income taxes receivable 6 70 Other current assets 31 30 Total current assets 2,065 2,158 Assets held for sale 23 - Licenses 1,864 1,844 Goodwill 766 766 Franchise rights 244 244 Other intangible assets, net 39 47 Investments in unconsolidated entities 446 402 Property, plant and equipment, net 3,613 3,764 Other assets and deferred charges 366 197 --- --- Total assets $9,426 $9,422 ====== ======
Telephone and Data Systems, Inc. Consolidated Balance Sheet Highlights (Unaudited) LIABILITIES AND EQUITY June 30, December 31, 2016 2015 (Dollars in millions) Current liabilities Current portion of long-term debt $14 $14 Accounts payable 362 349 Customer deposits and deferred revenues 269 288 Accrued interest 11 12 Accrued taxes 50 41 Accrued compensation 96 113 Other current liabilities 96 127 Total current liabilities 898 944 Deferred liabilities and credits Deferred income tax liability, net 908 900 Other deferred liabilities and credits 447 433 Long-term debt 2,436 2,440 Noncontrolling interests with redemption features 1 1 Equity TDS shareholders' equity Series A Common and Common Shares, par value $.01 1 1 Capital in excess of par value 2,363 2,365 Treasury shares, at cost (717) (727) Accumulated other comprehensive income (loss) - - Retained earnings 2,487 2,487 Total TDS shareholders' equity 4,134 4,126 Preferred shares 1 1 Noncontrolling interests 601 577 Total equity 4,736 4,704 Total liabilities and equity $9,426 $9,422 ====== ======
Balance Sheet Highlights (Unaudited) June 30, 2016 U.S. TDS TDS Corporate Intercompany TDS Cellular Telecom & Other Eliminations Consolidated (Dollars in millions) Cash and cash equivalents $621 $40 $238 $ - $899 Affiliated cash investments - 359 - (359) - $621 $399 $238 $(359) $899 ==== ==== ==== ===== ==== Licenses, goodwill and other intangible assets $2,224 $828 $(138) $ - $2,913 Investment in unconsolidated entities 407 4 40 (6) 446 $2,631 $832 $(98) $(6) $3,359 ====== ==== ==== === ====== Property, plant and equipment, net $2,510 $1,078 $25 $ - $3,613 ====== ====== === === === ====== Long-term debt: Current portion $11 $ - $3 $ - $14 Non-current portion 1,623 1 812 - 2,436 $1,634 $1 $815 $ - $2,450 ====== === ==== === === ======
TDS Telecom Highlights (Unaudited) Three Months Ended June 30, 2016 2015 2016 vs. 2015 Increase (Decrease) Wireline Operating revenues Residential $77 $74 $3 4% Commercial 53 55 (2) (4)% Wholesale 44 46 (1) (3)% Total service revenues 175 175 - - Equipment sales - 1 - (11)% 175 176 (1) - --- --- --- Operating expenses Cost of services 64 63 1 - Cost of equipment sold - 1 (1) (22)% Selling, general and administrative expenses 49 49 - - Depreciation, amortization and accretion 37 41 (4) (10)% (Gain) loss on asset disposals, net 1 1 - (43)% (Gain) loss on sale of business and other exit costs, net - (3) 3 >100% 151 152 (1) (1)% --- --- --- Operating income $25 $24 $(1) 1% ---------- Cable Operating revenues Residential $36 $35 $1 3% Commercial 9 10 - (3)% Total service revenues 45 45 1 2% Operating expenses Cost of services 24 20 4 19% Selling, general and administrative expenses 12 14 (2) (11)% Depreciation, amortization and accretion 9 9 - 5% (Gain) loss on asset disposals, net - (2) 2 >100% 46 41 5 12% --- --- --- Operating income $ - $4 $(4) >(100)% ---------- --- HMS Operating revenues Service revenues $33 $29 $3 11% Equipment sales 47 46 1 3% 80 76 4 6% --- --- --- Operating expenses Cost of services 19 22 (3) (13)% Cost of equipment sold 39 39 - 1% Selling, general and administrative expenses 15 11 4 33% Depreciation, amortization and accretion 7 7 1 11% 80 78 2 2% --- --- --- Operating (loss) $ - $(3) $2 99% ---------- --- Intercompany revenues $(1) $(1) $ - 20% Intercompany expenses (1) (1) - 20% --- --- --- Total TDS Telecom operating income $24 $26 $(1) (5)% === === === Numbers may not foot due to rounding.
TDS Telecom Highlights (Unaudited) Six Months Ended June 30, 2016 2015 2016 vs. 2015 Increase (Decrease) (Dollars in millions) Wireline Operating revenues Residential $153 $149 $4 3% Commercial 107 111 (4) (4)% Wholesale 87 91 (4) (4)% Total service revenues 347 351 (4) (1)% Equipment sales 1 1 - 2% 348 352 (4) (1)% --- --- --- Operating expenses Cost of services 126 125 1 - Cost of equipment sold 1 1 - (15)% Selling, general and administrative expenses 98 95 3 3% Depreciation, amortization and accretion 78 83 (5) (6)% (Gain) loss on asset disposals, net 1 2 (1) (35)% (Gain) loss on sale of business and other exit costs, net - (3) 3 >100% 304 303 1 - --- --- --- Operating income $45 $49 $(5) (9)% ---------- Cable Operating revenues Residential $72 $70 $2 2% Commercial 19 18 1 3% Total service revenues 90 88 3 2% --- --- --- Operating expenses Cost of services 46 40 6 15% Selling, general and administrative expenses 24 26 (2) (7)% Depreciation, amortization and accretion 18 18 - 5% (Gain) loss on asset disposals, net 1 (1) 2 >100% 90 83 7 8% --- --- --- Operating income $1 $5 $(5) (90)% ---------- HMS Operating revenues Service revenues $62 $58 $4 7% Equipment sales 82 79 4 5% 144 137 8 6% --- --- --- Operating expenses Cost of services 40 42 (2) (4)% Cost of equipment sold 68 66 3 4% Selling, general and administrative expenses 25 24 2 6% Depreciation, amortization and accretion 15 13 2 12% 148 144 4 3% --- --- --- Operating (loss) $(4) $(8) $4 46% ---------- Intercompany revenues $(2) $(2) $ - (2)% Intercompany expenses (2) (2) - (2)% --- --- --- Total TDS Telecom operating income $41 $47 $(6) (12)% === === === Numbers may not foot due to rounding.
Telephone and Data Systems, Inc. Financial Measures and Reconciliations (Unaudited) Free Cash Flow and Adjusted Free Cash Flow Three Months Ended June 30, Six Months Ended June 30, 2016 2015 2016 2015 (Dollars in millions) Cash flows from operating activities (GAAP) $154 $183 $400 $538 Less: Cash used for additions to property, plant and equipment 122 193 281 359 --- --- --- --- Free cash flow 32 (10) 119 179 Add: Sprint Cost Reimbursement 2 7 4 23 Adjusted free cash flow (Non-GAAP)(1) $34 $(3) $123 $202 === === ==== ====
(1) Management uses Free cash flow as a liquidity measure and it is defined as Cash flows from operating activities less Cash paid for additions to property, plant and equipment. 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 paid 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 paid for additions to property, plant and equipment.
Postpaid ABPU and Postpaid ABPA
U.S. Cellular presents Postpaid ABPU and Postpaid ABPA to reflect the revenue shift from Service revenues to Equipment and product sales resulting from the increased adoption of equipment installment plans. Postpaid ABPU and Postpaid ABPA, as previously defined, are non-GAAP financial measure which U.S. Cellular believes are useful to investors and other users of its financial information in showing trends in both service and equipment revenues received from customers.
Three Months Ended June 30, Six Months Ended June 30, 2016 2015 2016 2015 (Dollars and connection counts in millions) Calculation of Postpaid ARPU ----------------------- Postpaid service revenues $636 $694 $1,275 $1,401 Average number of postpaid connections 4.48 4.31 4.45 4.31 Number of months in period 3 3 6 6 Postpaid ARPU (GAAP metric) $47.37 $53.62 $47.76 $54.24 === Calculation of Postpaid ABPU ----------------------- Postpaid service revenues $636 $694 $1,275 $1,401 Equipment installment plan billings 118 58 223 104 --- --- --- --- Total billings to postpaid connections $754 $752 $1,498 $1,505 Average number of postpaid connections 4.48 4.31 4.45 4.31 Number of months in period 3 3 6 6 Postpaid ABPU (Non- GAAP metric) $56.09 $58.06 $56.08 $58.28 === Calculation of Postpaid ARPA ----------------------- Postpaid service revenues $636 $694 $1,275 $1,401 Average number of postpaid accounts 1.70 1.73 1.70 1.74 Number of months in period 3 3 6 6 Postpaid ARPA (GAAP metric) $124.91 $133.85 $125.13 $134.39 === Calculation of Postpaid ABPA ----------------------- Postpaid service revenues $636 $694 $1,275 $1,401 Equipment installment plan billings 118 58 223 104 --- --- --- --- Total billings to postpaid accounts $754 $752 $1,498 $1,505 Average number of postpaid accounts 1.70 1.73 1.70 1.74 Number of months in period 3 3 6 6 Postpaid ABPA (Non- GAAP metric) $147.90 $144.94 $146.95 $144.40 ===
To view the original version on PR Newswire, visit:http://www.prnewswire.com/news-releases/tds-reports-second-quarter-2016-results-300309796.html
SOURCE Telephone and Data Systems, Inc.