TDS reports first quarter 2018 results

TDS reports first quarter 2018 results

PR Newswire

CHICAGO, May 1, 2018 /PRNewswire/ --

As previously announced, TDS will hold a teleconference May 1, 2018, at 9:30 a.m. CDT. Listen to the call live via the Events & Presentations page of investors.tdsinc.com.   

Telephone and Data Systems, Inc. TDS reported total operating revenues of $1,225 million for the first quarter of 2018, versus $1,238 million for the same period one year ago. Net income available to TDS shareholders and related diluted earnings per share were $39 million and $0.34, respectively, for the first quarter of 2018, compared to $37 million and $0.33, respectively, in the same period one year ago. 

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

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

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

2018 Estimated Results

TDS' current estimates of full-year 2018 results for U.S. Cellular, TDS Telecom, and TDS are shown below.  Such estimates represent management's view as of May 1, 2018.  Such forward-looking statements should not be assumed to be current as of any future date.  TDS undertakes no duty to update such information, whether as a result of new information, future events, or otherwise.  There can be no assurance that final results will not differ materially from such estimated results. 



2018 Estimated Results



























U.S. Cellular



TDS Telecom (1)



TDS (1)(2)



Current (3)

Previous



Current (3)

Previous



Current (3)

Previous

(Dollars in millions)























Total operating revenues

$3,850-$4,050

Unchanged



$900-$950

Unchanged



$5,015-$5,265

Unchanged

Adjusted OIBDA (4)(5)

$625-$775

Unchanged



$290-$320

Unchanged



$925-$1,105

Unchanged

Adjusted EBITDA (4)

$765-$915

Unchanged



$300-$330

Unchanged



$1,075-$1,255

Unchanged

Capital expenditures

$500-$550

Unchanged





$270

Unchanged



$795-$845

Unchanged

The following tables provide reconciliations of Net income to Adjusted OIBDA and Adjusted EBITDA for 2018 estimated results, actual results for the three months ended March 31, 2018, and actual results for the year ended December 31, 2017. In providing 2018 estimated results, TDS has not completed the below reconciliation to Net income because it does not provide guidance for income taxes.  Although potentially significant, TDS believes that the impact of income taxes cannot be reasonably predicted; therefore, TDS is unable to provide such guidance.









2018 Estimated Results































U.S. Cellular (3)





TDS Telecom (1)(3)





TDS (1)(2)(3)

(Dollars in millions)

















Net income (GAAP)



N/A





N/A





N/A

Add back:



















Income tax expense (benefit)



N/A





N/A





N/A

Income before income taxes (GAAP)

$

10-160



$

80-110



$

5-185

Add back:



















Interest expense



110









170



Depreciation, amortization and accretion expense



635





220





890

EBITDA (Non-GAAP) (4)

$

755-905



$

300-330



$

1,065-1,245

Add back or deduct:



















(Gain) loss on asset disposals, net



20









20



(Gain) loss on license sales and exchanges, net



(10)









(10)

Adjusted EBITDA (Non-GAAP) (4)

$

765-915



$

300-330



$

1,075-1,255

Deduct:



















Equity in earnings of unconsolidated entities



130









130



Interest and dividend income



10





5





15



Other, net (6)







5





5

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

$

625-775



$

290-320



$

925-1,105

 







Actual Results















































Three Months Ended March 31, 2018 (3)



Year ended December 31, 2017







U.S.

Cellular



TDS

Telecom (1)



TDS (1)(2)



U.S.

Cellular

TDS

Telecom (1)

TDS (1)(2)

(Dollars in millions)























Net income (GAAP)

$

55



$

21



$

57



$

15



$

138



$

157

Add back or deduct:

























Income tax expense (benefit)



22





6





24





(287)





(13)





(279)

Income (loss) before income taxes





































(GAAP)

$

77



$

27



$

81



$

(272)



$

125



$

(122)

Add back:

























Interest expense



29









43





113









170



Depreciation, amortization and accretion expense



159





54





221





615





195





844

EBITDA (Non-GAAP) (4)

$

265



$

81



$

345



$

456



$

319



$

892

Add back or deduct:





































Loss on impairment of goodwill















370









262



(Gain) loss on asset disposals, net



1









2





17





3





21



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















(1)









(1)



(Gain) loss on license sales and exchanges, net



(7)









(7)





(22)









(22)

Adjusted EBITDA (Non-GAAP) (4)

$

259



$

81



$

340



$

820



$

323



$

1,152

Deduct:





































Equity in earnings of unconsolidated entities



38









38





137









137



Interest and dividend income



4





1





5





8





5





15



Other, net (6)



(1)





1





1









3





4

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

$

218



$

80



$

296



$

675



$

314



$

996



Note: Totals may not foot due to rounding differences.



(1)

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





(2)

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





(3)

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





(4)

EBITDA, Adjusted EBITDA and Adjusted OIBDA are defined as net income adjusted for the items set forth in the reconciliation above.  EBITDA, Adjusted EBITDA and Adjusted OIBDA are not measures of financial performance under Generally Accepted Accounting Principles in the United States (GAAP) and should not be considered as alternatives to Net income or Cash flows from operating activities, as indicators of cash flows or as measures of liquidity.  TDS does not intend to imply that any such items set forth in the reconciliation above are non-recurring, infrequent or unusual; such items may occur in the future.  Management uses Adjusted EBITDA and Adjusted OIBDA as measurements of profitability, and therefore reconciliations to Net income are deemed appropriate.  Management believes Adjusted EBITDA and Adjusted OIBDA are useful measures of TDS' operating results before significant recurring non-cash charges, gains and losses, and other items as presented above as they provide additional relevant and useful information to investors and other users of TDS' financial data in evaluating the effectiveness of its operations and underlying business trends in a manner that is consistent with management's evaluation of business performance.  Adjusted EBITDA shows adjusted earnings before interest, taxes, depreciation, amortization and accretion, and gains and losses, while Adjusted OIBDA reduces this measure further to exclude Equity in earnings of unconsolidated entities and Interest and dividend income in order to more effectively show the performance of operating activities excluding investment activities.  The table above reconciles EBITDA, Adjusted EBITDA and Adjusted OIBDA to the corresponding GAAP measure, Net income or Income (loss) before income taxes.





(5)

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





(6)

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

Conference Call Information

TDS will hold a conference call on May 1, 2018 at 9:30 a.m. Central Time.

Before the call, certain financial and statistical information to be discussed during the call will be posted to investors.tdsinc.com. The call will be archived on the Events & Presentations page of investors.tdsinc.com

About TDS

Telephone and Data Systems, Inc. (TDS), a Fortune 1000® company, provides wireless; cable and wireline broadband, TV and voice; and hosted and managed services to approximately 6 million connections nationwide through its businesses, U.S. Cellular, TDS Telecom, BendBroadband and OneNeck IT Solutions. Founded in 1969 and headquartered in Chicago, TDS employed 9,900 people as of March 31, 2018.

Visit www.tdsinc.com for comprehensive financial information, including earnings releases, quarterly and annual filings, shareholder information and more.

Safe Harbor Statement Under the Private Securities Litigation Reform Act of 1995: All information set forth in this news release, except historical and factual information, represents forward-looking statements. This includes all statements about the company's plans, beliefs, estimates, and expectations. These statements are based on current estimates, projections, and assumptions, which involve certain risks and uncertainties that could cause actual results to differ materially from those in the forward-looking statements. Important factors that may affect these forward-looking statements include, but are not limited to: intense competition; the ability to execute TDS' business strategy; uncertainties in TDS' future cash flows and liquidity and access to the capital markets; the ability to make payments on TDS and U.S. Cellular indebtedness or comply with the terms of debt covenants; impacts of any pending acquisitions/divestitures/exchanges of properties and/or licenses,  including, but not limited to, the ability to obtain regulatory approvals, successfully complete the transactions and the financial impacts of such transactions; the ability of the company to successfully manage and grow its markets; the access to and pricing of unbundled network elements; the ability to obtain or maintain roaming arrangements with other carriers on acceptable terms; the state and federal telecommunications regulatory environment; the value of assets and investments; adverse changes in the ratings of TDS and U.S. Cellular debt securities by accredited ratings organizations; industry consolidation; advances in telecommunications technology; pending and future litigation; changes in income tax rates, laws, regulations or rulings; changes in customer growth rates, average monthly revenue per user, churn rates, roaming revenue and terms, the availability of wireless devices, or the mix of services and products offered by U.S. Cellular and TDS Telecom. Investors are encouraged to consider these and other risks and uncertainties that are discussed in the Form 8-K Current Report used by TDS to furnish this press release to the Securities and Exchange Commission, which are incorporated by reference herein.    

For more information about TDS and its subsidiaries, visit:

TDS: www.tdsinc.com

U.S. Cellular: www.uscellular.com

TDS Telecom: www.tdstelecom.com

OneNeck IT Solutions: www.oneneck.com

Disclaimer:

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

United States Cellular Corporation

Summary Operating Data (Unaudited)































As of or for the Quarter Ended

3/31/2018 (1)



12/31/2017



9/30/2017





6/30/2017



3/31/2017

Retail Connections































Postpaid

































Total at end of period



4,481,000





4,518,000





4,513,000





4,478,000





4,455,000





Gross additions



129,000





177,000





191,000





174,000





146,000







Feature phones



5,000





5,000





7,000





7,000





7,000







Smartphones



91,000





128,000





132,000





116,000





88,000







Connected devices



33,000





44,000





52,000





51,000





51,000





Net additions (losses)



(37,000)





5,000





35,000





23,000





(27,000)







Feature phones



(15,000)





(15,000)





(15,000)





(15,000)





(19,000)







Smartphones



(1,000)





33,000





44,000





34,000





(9,000)







Connected devices



(21,000)





(13,000)





6,000





4,000





1,000





ARPU (2)

$

44.34



$

44.12



$

43.41



$

44.60



$

45.42





ABPU (Non-GAAP)(3)

$

57.10



$

56.69



$

54.71



$

55.19



$

55.82





ARPA (4)

$

118.22



$

118.05



$

116.36



$

119.73



$

121.88





ABPA (Non-GAAP)(5)

$

152.26



$

151.68



$

146.65



$

148.15



$

149.78





Churn rate (6)



1.23%





1.27%





1.16%





1.13%





1.29%







Handsets



0.97%





1.00%





0.96%





0.91%





1.08%







Connected devices



2.79%





2.84%





2.33%





2.35%





2.55%



Prepaid

































Total at end of period



525,000





519,000





515,000





484,000





480,000





Gross additions



88,000





83,000





102,000





73,000





78,000





Net additions (losses)



6,000





4,000





31,000





3,000





(4,000)





ARPU (2)

$

31.78



$

32.42



$

33.12



$

33.52



$

33.66





Churn rate (6)



5.27%





5.09%





4.75%





4.93%





5.69%

Total connections at end of period (7)



5,063,000





5,096,000





5,089,000





5,023,000





4,996,000

Market penetration at end of period































Consolidated operating population



31,469,000





31,834,000





31,834,000





32,089,000





32,089,000



Consolidated operating penetration (8)



16%





16%





16%





16%





16%

Capital expenditures (millions)

$

70



$

213



$

112



$

84



$

61

Total cell sites in service



6,473





6,460





6,436





6,421





6,417

Owned towers



4,099





4,080





4,051





4,044





4,041



(1)

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

(2)

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



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



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

(3)

Average Billings Per User (ABPU) - non-GAAP metric is calculated by dividing total postpaid service revenues plus equipment installment plan billings by the average number of postpaid connections and by the number of months in the period.  Refer to the end of this release for a reconciliation of this metric to its most comparable GAAP metric.

(4)

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

(5)

Average Billings Per Account (ABPA) - non-GAAP metric is calculated by dividing total postpaid service revenues plus equipment installment plan billings by the average number of postpaid accounts and by the number of months in the period.  Refer to the end of this release for a reconciliation of this metric to its most comparable GAAP metric.

(6)

Churn rate represents the percentage of the connections that disconnect service each month.  These rates represent the average monthly churn rate for each respective period.

(7)

Includes reseller and other connections.

(8)

Market penetration is calculated by dividing the number of wireless connections at the end of the period by the total population of consolidated operating markets as estimated by Nielsen.

 

TDS Telecom

Summary Operating Data (Unaudited)



As of or for the Quarter Ended

3/31/2018



12/31/2017



9/30/2017



6/30/2017



3/31/2017

TDS Telecom





























Wireline































Residential connections

































Voice (1)



286,000





290,600





298,200





304,600





308,200





Broadband (2)



230,500





228,600





229,900





230,200





228,500





Video (3)



50,300





48,600





47,200





46,200





45,200





   Wireline residential connections



566,900





567,700





575,300





581,000





581,900





































Total residential revenue per connection (4)

$

47.04



$

46.21



$

46.07



$

46.39



$

45.17





































Commercial connections

































Voice (1)



140,100





143,000





146,900





150,500





154,000





Broadband (2)



20,600





20,600





20,900





21,000





21,200





managedIP (5)



143,000





146,500





147,600





149,700





150,300





Video (3)



400





















   Wireline commercial connections



304,000





310,100





315,300





321,200





325,500





































Total Wireline connections



870,900





877,800





890,700





902,200





907,400



































Cable































Cable Connections

































Broadband (6)



156,800





153,300





143,800





140,300





137,800





Video (7)



100,700





101,800





97,900





97,900





97,600





Voice (8)



61,200





60,100





58,900





58,700





59,000





managedIP (5)



600





400





400





300





200





   Cable connections



319,300





315,600





301,000





297,200





294,500



Note:  Totals may not foot due to rounding differences.



(1)

The individual circuits connecting a customer to Wireline's central office facilities.

(2)

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

(3)

The number of Wireline customers provided video services.

(4)

Total residential revenue per connection is calculated by dividing total Wireline residential revenue by the average number of Wireline residential connections and by the number of months in the period.

(5)

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

(6)

Billable number of lines into a building for high-speed data services.

(7)

Generally, a home or business receiving video programming counts as one video connection. In counting bulk residential or commercial connections, such as an apartment building or hotel, connections are counted based on the number of units/rooms within the building receiving service.

(8)

Billable number of lines into a building for voice services.

 

TDS Telecom

Capital Expenditures (Unaudited)























Quarter Ended

3/31/2018



12/31/2017



9/30/2017



6/30/2017



3/31/2017

(Dollars in millions)





























Wireline

$

29



$

55



$

41



$

33



$

17

Cable



11





20





14





12





9

Total TDS Telecom (1)

$

40



$

74



$

56



$

45



$

27



Note:  Totals may not foot due to rounding differences.



(1)

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

 

Telephone and Data Systems, Inc.

Consolidated Statement of Operations Highlights

(Unaudited)















2018 vs. 2017















Increase

Three Months Ended March 31,

2018 (1)



2017

(Decrease)

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















Operating revenues

















U.S. Cellular

$

942



$

936



1%



TDS Telecom (2)



231





228



1%



All Other (2)(3)



52





74



(28)%











1,225





1,238



(1)%

Operating expenses

















U.S. Cellular



















Expenses excluding depreciation, amortization and accretion



724





742



(3)%





Depreciation, amortization and accretion



159





153



3%





(Gain) loss on asset disposals, net



1





4



(62)%





(Gain) loss on license sales and exchanges, net



(7)





(17)



61%











877





882



(1)%



TDS Telecom (2)



















Expenses excluding depreciation, amortization and accretion (4)



151





148



2%





Depreciation, amortization and accretion



54





49



10%





(Gain) loss on asset disposals, net







1



(51)%











205





198



4%



All Other (2)(3)



















Expenses excluding depreciation and amortization (4)



55





68



(18)%





Depreciation and amortization



8





9



(4)%





(Gain) loss on asset disposals, net



1





(1)



(53)%











63





77



(17)%







Total operating expenses



1,145





1,157



(1)%

Operating income (loss)

















U.S. Cellular



65





54



21%



TDS Telecom (2)(4)



25





30



(17)%



All Other (2)(3)(4)



(10)





(3)



>(100)%











80





81



(2)%

Investment and other income (expense)

















Equity in earnings of unconsolidated entities



38





32



17%



Interest and dividend income



5





4



32%



Interest expense



(43)





(42)



(2)%



Other, net (4)



1





2



(44)%





Total investment and other income (expense) (4)



1





(4)



>100%

Income before income taxes



81





77



5%



Income tax expense



24





34



(29)%

Net income



57





43



33%



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



18





6



>100%

Net income available to TDS common shareholders

$

39



$

37



4%























Basic weighted average shares outstanding



111





110



1%

Basic earnings per share available to TDS common shareholders

$

0.35



$

0.34



3%























Diluted weighted average shares outstanding



113





112



1%

Diluted earnings per share available to TDS common shareholders

$

0.34



$

0.33



3%

Note:  Totals may not foot due to rounding differences.





(1)

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





(2)

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





(3)

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





(4)

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

 

Telephone and Data Systems, Inc.

Consolidated Statement of Cash Flows

(Unaudited)











Three Months Ended









March 31,



2018 (1)



2017

(Dollars in millions)











Cash flows from operating activities













Net income

$

57



$

43



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















Depreciation, amortization and accretion



221





211





Bad debts expense



20





24





Stock-based compensation expense



10





11





Deferred income taxes, net



26





(1)





Equity in earnings of unconsolidated entities



(38)





(32)





Distributions from unconsolidated entities



17





11





(Gain) loss on asset disposals, net



2





4





(Gain) loss on license sales and exchanges, net



(7)





(17)





Noncash interest



1





1



Changes in assets and liabilities from operations















Accounts receivable



77





28





Equipment installment plans receivable



(17)





(44)





Inventory



(8)









Accounts payable



(32)





(75)





Customer deposits and deferred revenues



(28)





(12)





Accrued taxes



(24)





33





Accrued interest



11





9





Other assets and liabilities



(74)





(57)







Net cash provided by operating activities



214





137



















Cash flows from investing activities













Cash paid for additions to property, plant and equipment



(131)





(127)



Cash paid for acquisitions and licenses



(9)





(14)



Cash received for investments



100







Cash received from divestitures and exchanges



4





16







Net cash used in investing activities



(36)





(125)



















Cash flows from financing activities













Repayment of long-term debt



(5)





(3)



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



9





1



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



2





3



Dividends paid to TDS shareholders



(18)





(17)



Other financing activities



(5)











Net cash used in financing activities



(17)





(16)



















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



161





(4)



















Cash, cash equivalents and restricted cash













Beginning of period



622





904



End of period

$

783



$

900





(1)

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

 

Telephone and Data Systems, Inc.

Consolidated Balance Sheet Highlights

(Unaudited)













ASSETS































March 31,



December 31,







2018 (1)



2017

(Dollars in millions)











Current assets













Cash and cash equivalents

$

779



$

619



Short-term investments







100



Accounts receivable



955





961



Inventory, net



153





145



Prepaid expenses



104





112



Income taxes receivable



10





2



Other current assets



42





27





Total current assets



2,043





1,966

















Assets held for sale



6





10

















Licenses



2,240





2,232

Goodwill



509





509

Other intangible assets, net



273





279

Investments in unconsolidated entities



488





453

















Property, plant and equipment, net



3,335





3,424

















Other assets and deferred charges



587





422

















Total assets

$

9,481



$

9,295

 

Telephone and Data Systems, Inc.

Consolidated Balance Sheet Highlights

(Unaudited)















LIABILITIES AND EQUITY





































March 31,



December 31,









2018 (1)



2017

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











Current liabilities













Current portion of long-term debt

$

20



$

20



Accounts payable



322





368



Customer deposits and deferred revenues



169





223



Accrued interest



22





11



Accrued taxes



45





64



Accrued compensation



77





126



Other current liabilities



95





106





Total current liabilities



750





918



















Deferred liabilities and credits













Deferred income tax liability, net



634





552



Other deferred liabilities and credits



516





495



















Long-term debt, net



2,431





2,437



















Noncontrolling interests with redemption features



11





1



















Equity













TDS shareholders' equity















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



1





1





Capital in excess of par value



2,421





2,413





Treasury shares, at cost



(643)





(669)





Accumulated other comprehensive income



(3)





(1)





Retained earnings



2,696





2,525







Total TDS shareholders' equity



4,472





4,269





















Noncontrolling interests



667





623























Total equity



5,139





4,892



















Total liabilities and equity

$

9,481



$

9,295



(1)

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

 

Balance Sheet Highlights

(Unaudited)







March 31, 2018





U.S.



TDS



TDS Corporate



Intercompany



TDS





Cellular



Telecom



& Other



Eliminations



Consolidated

(Dollars in millions)





























Cash and cash equivalents

$

509



$

21



$

249



$



$

779

Affiliated cash investments







359









(359)









$

509



$

380



$

249



$

(359)



$

779































































Licenses, goodwill and other intangible assets

$

2,231



$

768



$

23



$



$

3,022

Investment in unconsolidated entities



450





4





41





(7)





488





$

2,681



$

772



$

64



$

(7)



$

3,510

































Property, plant and equipment, net

$

2,233



$

969



$

133



$



$

3,335

































Long-term debt, net:































Current portion

$

18



$

1



$

1



$



$

20



Non-current portion



1,618





2





811









2,431





$

1,636



$

3



$

812



$



$

2,451

 

TDS Telecom Highlights

(Unaudited)

















2017 vs. 2016















Increase

Three Months Ended March 31,

2018 (1)



2017



(Decrease)

(Dollars in millions)















Wireline















Operating revenues

















Residential

$

80



$

79



1%



Commercial



48





51



(6)%



Wholesale



47





49



(4)%





Total service revenues



175





179



(2)%



Equipment and product sales









26%





175





179



(2)%

Operating expenses

















Cost of services



65





63



3%



Cost of equipment and products







1



(23)%



Selling, general and administrative expenses (2)



47





48



(3)%



Expenses excluding depreciation, amortization and accretion



112





112



-



Depreciation, amortization and accretion



37





39



(5)%





149





151



(1)%



Operating income (2)

$

26



$

28



(6)%

















Cable















Operating revenues

















Residential

$

46



$

41



12%



Commercial



10





9



13%





55





49



12%

Operating expenses

















Cost of services



26





24



7%



Selling, general and administrative expenses



13





13



6%



Expenses excluding depreciation, amortization and accretion



39





36



7%



Depreciation, amortization and accretion



17





10



71%





57





47



20%



Operating income

$

(1)



$

2



>(100)%

















Total TDS Telecom operating income (2)(3)

$

25



$

30



(17)%



Note:  Totals may not foot due to rounding differences.



(1)

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





(2)

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





(3)

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

 

Telephone and Data Systems, Inc.

Financial Measures and Reconciliations





























Free Cash Flow





























Three Months Ended March 31,

2018



2017

(Dollars in millions)











Cash flows from operating activities (GAAP)

$

214



$

137

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



131





127



Free cash flow (Non-GAAP)(1)

$

83



$

10





(1)

Management uses Free cash flow as a liquidity measure and it is defined as Cash flows from operating activities less Cash paid for additions to property, plant and equipment.  Free cash flow is a non-GAAP financial measure which TDS believes may be useful to investors and other users of its financial information in evaluating liquidity, specifically, the amount of net cash generated by business operations after deducting Cash paid for additions to property, plant and equipment.

Postpaid ABPU and Postpaid ABPA

U.S. Cellular presents Postpaid ABPU and Postpaid ABPA to reflect the revenue shift from Service revenues to Equipment and product sales resulting from the increased adoption of equipment installment plans.  Postpaid ABPU and Postpaid ABPA, as previously defined herein, are non-GAAP financial measures which U.S. Cellular believes are useful to investors and other users of its financial information in showing trends in both service and equipment and product sales revenues received from customers.

For the Quarter Ended



3/31/2018 (1)





12/31/2017





9/30/2017





6/30/2017





3/31/2017

(Dollars and connection counts in millions)





























Calculation of Postpaid ARPU





























Postpaid service revenues

$

598



$

598



$

586



$

597



$

608

Average number of postpaid connections



4.50





4.52





4.50





4.47





4.46

Number of months in period



3





3





3





3





3



Postpaid ARPU (GAAP metric)

$

44.34



$

44.12



$

43.41



$

44.60



$

45.42































Calculation of Postpaid ABPU





























Postpaid service revenues

$

598



$

598



$

586



$

597



$

608

Equipment installment plan billings



172





170





152





142





139



Total billings to postpaid connections

$

770



$

768



$

738



$

739



$

747

Average number of postpaid connections



4.50





4.52





4.50





4.47





4.46

Number of months in period



3





3





3





3





3



Postpaid ABPU (Non-GAAP metric)

$

57.10



$

56.69



$

54.71



$

55.19



$

55.82































Calculation of Postpaid ARPA





























Postpaid service revenues

$

598



$

598



$

586



$

597



$

608

Average number of postpaid accounts



1.69





1.69





1.68





1.66





1.66

Number of months in period



3





3





3





3





3



Postpaid ARPA (GAAP metric)

$

118.22



$

118.05



$

116.36



$

119.73



$

121.88































Calculation of Postpaid ABPA





























Postpaid service revenues

$

598



$

598



$

586



$

597



$

608

Equipment installment plan billings



172





170





152





142





139



Total billings to postpaid accounts

$

770



$

768



$

738



$

739



$

747

Average number of postpaid accounts



1.69





1.69





1.68





1.66





1.66

Number of months in period



3





3





3





3





3



Postpaid ABPA (Non-GAAP metric)

$

152.26



$

151.68



$

146.65



$

148.15



$

149.78



(1)

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

 

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

SOURCE Telephone and Data Systems, Inc.

Market News and Data brought to you by Benzinga APIs
Comments
Loading...
Date
ticker
name
Actual EPS
EPS Surprise
Actual Rev
Rev Surprise
Posted In: EarningsPress ReleasesConference Call Announcements
Benzinga simplifies the market for smarter investing

Trade confidently with insights and alerts from analyst ratings, free reports and breaking news that affects the stocks you care about.

Join Now: Free!