TDS reports fourth quarter and full year 2020 results
CHICAGO, Feb. 18, 2021 /PRNewswire/ --
As previously announced, TDS will hold a teleconference on February 19, 2021 at 9:00 a.m. CST. Listen to the call live via the Events & Presentations page of investors.tdsinc.com.
Telephone and Data Systems, Inc. (NYSE: TDS) reported total operating revenues of $1,376 million for the fourth quarter of 2020, versus $1,336 million for the same period one year ago. Net income attributable to TDS shareholders and related diluted earnings per share were $14 million and $0.12, respectively, for the fourth quarter of 2020 compared to $12 million and $0.10, respectively, in the same period one year ago.
TDS reported total operating revenues of $5,225 million and $5,176 million for the years ended 2020 and 2019, respectively. Net income attributable to TDS shareholders and related diluted earnings per share were $226 million and $1.93, respectively, for the year ended 2020 compared to $121 million and $1.03, respectively, for the year ended 2019.
"The TDS Family of Businesses successfully overcame the challenges of 2020, finishing the year with excellent communications services, strong financial performance and heightened awareness of the essential services that TDS and our industry provides," said LeRoy T. Carlson, Jr., TDS President and CEO. "UScellular kept churn low throughout the year, acquired new retail connections, maintained strong cost discipline and produced fine financial results. Under the leadership of our new CEO, Laurent Therivel, UScellular is in a strong position to focus on growth in 2021. TDS Telecom accomplished a transformational year as execution of its broadband-focused strategy enabled it to respond to the seismic shift to remote working and learning, highlighting the importance of high-speed broadband in the home.
"UScellular grew its service revenues, driven primarily by higher ARPU, and customers taking higher-value services and it maintained operational, quality and cost discipline. These factors contributed to increased profitability year-over-year. Significant progress was achieved with both network modernization and deployment of 5G. In 2021, connecting customers, especially in underserved areas, with the highest-quality network continues to be one of UScellular's top priorities and remains a key competitive differentiator. UScellular will also be focused on market share expansion, ramping up business and government customer opportunities that utilize 5G and IoT, enhancing customers' digital experiences, and continuing its network modernization and 5G programs.
"TDS Telecom achieved excellent growth in residential customer connections and strong financial performance in 2020, reflecting the successful execution of its broadband strategy, bolstered by increased consumer demand for broadband services caused by the large shift to remote work and learning. Out-of-territory fiber expansions and customers increasing their data speeds drove higher revenues. Successful efforts to reduce costs enabled TDS Telecom to redirect more resources to important growth opportunities. TDS Telecom's cable segment continued to significantly grow through the Continuum acquisition and increases in broadband penetration. TDS Telecom expanded its deployment of fiber both inside and outside of its traditional markets. Given the positive impacts we are seeing from our fiber investments, TDS Telecom plans to expand its fiber program by doubling the number of service addresses it builds in 2021.
"Our associates showed tremendous focus, resilience and dedication during this incredibly challenging year. I thank each of them. TDS' strong performance is a direct result of their hard and thoughtful work. The TDS Team looks forward to a very successful 2021, and to the progress we will continue to make on our long-term growth initiatives throughout the TDS Family of Businesses."
2021 Estimated Results
TDS' current estimates of full-year 2021 results for UScellular and TDS Telecom are shown below. Such estimates represent management's view as of February 18, 2021 and should not be assumed to be current as of any future date. TDS undertakes no duty to update such estimates, whether as a result of new information, future events, or otherwise. There can be no assurance that final results will not differ materially from estimated results.
UScellular | 2021 EstimatedResults | Actual Results forthe Year EndedDecember 31, 2020 | |
(Dollars in millions) | |||
Service revenues | $3,025-$3,125 | $3,067 | |
Adjusted OIBDA1 | $800-$950 | $876 | |
Adjusted EBITDA1 | $975-$1,125 | $1,063 | |
Capital expenditures | $775-$875 | $940 | |
TDS Telecom | 2021 EstimatedResults | Actual Results forthe Year EndedDecember 31, 2020 | |
(Dollars in millions) | |||
Total operating revenues | $975-$1,025 | $976 | |
Adjusted OIBDA1 | $290-$320 | $314 | |
Adjusted EBITDA1 | $290-$320 | $317 | |
Capital expenditures | $425-$475 | $368 |
The following tables provide reconciliations of Net income to Adjusted OIBDA and Adjusted EBITDA for 2021 estimated results and actual results for the year ended December 31, 2020. In providing 2021 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.
UScellular | TDS Telecom | ||||||||||
Estimate | Actual | Estimate | Actual | ||||||||
(Dollars in millions) | |||||||||||
Net income (GAAP) | N/A | $233 | N/A | $100 | |||||||
Add back: | |||||||||||
Income tax expense | N/A | 17 | N/A | 18 | |||||||
Income before income taxes (GAAP) | $135-$285 | $250 | $80-$110 | $117 | |||||||
Add back: | |||||||||||
Interest expense | 135 | 112 | — | (4) | |||||||
Depreciation, amortization and accretion expense | 685 | 683 | 210 | 203 | |||||||
EBITDA (Non-GAAP)1 | $955-$1,105 | $1,045 | $290-$320 | $316 | |||||||
Add back or deduct: | |||||||||||
(Gain) loss on asset disposals, net | 20 | 25 | — | 1 | |||||||
(Gain) loss on license sales and exchanges, net | — | (5) | — | — | |||||||
(Gain) loss on investments | — | (2) | — | — | |||||||
Adjusted EBITDA (Non-GAAP)1 | $975-$1,125 | $1,063 | $290-$320 | $317 | |||||||
Deduct: | |||||||||||
Equity in earnings of unconsolidated entities | 170 | 179 | — | — | |||||||
Interest and dividend income | 5 | 8 | — | 5 | |||||||
Other, net | — | — | — | (1) | |||||||
Adjusted OIBDA (Non-GAAP)1 | $800-$950 | $876 | $290-$320 | $314 | |||||||
Numbers may not foot due to rounding. | |
1 | 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 before income taxes. Additional information and reconciliations related to Non-GAAP financial measures for December 31, 2020, can be found on TDS' website at investors.tdsinc.com. |
Conference Call InformationTDS will hold a conference call on February 19, 2021 at 9:00 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/1145/40052
- Access the call by phone at 833-968-2187 (US/Canada), conference ID: 5593349
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 TDSTelephone and Data Systems, Inc. (TDS), a Fortune 1000® company, provides wireless; cable and wireline broadband, video and voice; and hosted and managed services to approximately 6 million connections nationwide through its businesses, UScellular, TDS Telecom, BendBroadband and OneNeck IT Solutions. Founded in 1969 and headquartered in Chicago, TDS employed 9,200 people as of December 31, 2020.
Visit investors.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 obtain or maintain roaming arrangements with other carriers on acceptable terms; the ability to obtain access to adequate radio spectrum to meet current or anticipated future needs, including participation in FCC auctions; the ability to attract people of outstanding talent throughout all levels of the organization; TDS' smaller scale relative to larger competitors; changes in demand, consumer preferences and perceptions, price competition, or churn rates; advances in technology; impacts of costs, integration problems or other factors associated with acquisitions, divestitures or exchanges of properties or wireless spectrum licenses and/or expansion of TDS' businesses; the ability of the company to successfully construct and manage its networks; difficulties involving third parties; uncertainties in TDS' future cash flows and liquidity and access to the capital markets; the ability to make payments on TDS and UScellular indebtedness or comply with the terms of debt covenants; conditions in the U.S. telecommunications industry; the value of assets and investments; the state and federal regulatory environment; pending and future litigation; cyber-attacks or other breaches of network or information technology security; disruption in credit or other financial markets; deterioration of U.S. or global economic conditions; the impact, duration and severity of public health emergencies, such as the COVID-19 pandemic. Investors are encouraged to consider these and other risks and uncertainties that are more fully described under "Risk Factors" in the most recent filing of TDS' Form 10-K.
For more information about TDS and its subsidiaries, visit:TDS: www.tdsinc.com UScellular: 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 | 12/31/2020 | 9/30/2020 | 6/30/2020 | 3/31/2020 | 12/31/2019 | ||||||||||||||
Retail Connections | |||||||||||||||||||
Postpaid | |||||||||||||||||||
Total at end of period | 4,412,000 | 4,401,000 | 4,372,000 | 4,359,000 | 4,383,000 | ||||||||||||||
Gross additions | 171,000 | 168,000 | 129,000 | 132,000 | 170,000 | ||||||||||||||
Feature phones | 2,000 | 4,000 | 3,000 | 2,000 | 2,000 | ||||||||||||||
Smartphones | 117,000 | 98,000 | 82,000 | 88,000 | 128,000 | ||||||||||||||
Connected devices | 52,000 | 66,000 | 44,000 | 42,000 | 40,000 | ||||||||||||||
Net additions (losses) | 11,000 | 28,000 | 12,000 | (26,000) | (12,000) | ||||||||||||||
Feature phones | (9,000) | (8,000) | (8,000) | (10,000) | (11,000) | ||||||||||||||
Smartphones | 12,000 | 8,000 | 11,000 | (10,000) | 13,000 | ||||||||||||||
Connected devices | 8,000 | 28,000 | 9,000 | (6,000) | (14,000) | ||||||||||||||
ARPU1 | $ | 47.51 | $ | 47.10 | $ | 46.24 | $ | 47.23 | $ | 46.57 | |||||||||
ARPA2 | $ | 124.87 | $ | 123.27 | $ | 120.70 | $ | 122.92 | $ | 120.99 | |||||||||
Churn rate3 | 1.21 | % | 1.06 | % | 0.89 | % | 1.21 | % | 1.38 | % | |||||||||
Handsets | 1.01 | % | 0.88 | % | 0.71 | % | 0.95 | % | 1.11 | % | |||||||||
Connected devices | 2.64 | % | 2.35 | % | 2.24 | % | 3.11 | % | 3.44 | % | |||||||||
Prepaid | |||||||||||||||||||
Total at end of period | 499,000 | 506,000 | 496,000 | 494,000 | 506,000 | ||||||||||||||
Gross additions | 56,000 | 65,000 | 62,000 | 57,000 | 63,000 | ||||||||||||||
Net additions (losses) | (8,000) | 11,000 | 2,000 | (12,000) | (3,000) | ||||||||||||||
ARPU1 | $ | 35.15 | $ | 35.45 | $ | 34.89 | $ | 34.07 | $ | 34.11 | |||||||||
Churn rate3 | 4.24 | % | 3.59 | % | 4.05 | % | 4.67 | % | 4.40 | % | |||||||||
Total connections at end of period4 | 4,968,000 | 4,962,000 | 4,919,000 | 4,903,000 | 4,941,000 | ||||||||||||||
Market penetration at end of period | |||||||||||||||||||
Consolidated operating population | 31,314,000 | 31,314,000 | 31,292,000 | 31,292,000 | 30,740,000 | ||||||||||||||
Consolidated operating penetration5 | 16 | % | 16 | % | 16 | % | 16 | % | 16 | % | |||||||||
Capital expenditures (millions) | $ | 320 | $ | 216 | $ | 168 | $ | 236 | $ | 243 | |||||||||
Total cell sites in service | 6,797 | 6,758 | 6,673 | 6,629 | 6,578 | ||||||||||||||
Owned towers | 4,271 | 4,246 | 4,208 | 4,184 | 4,166 | ||||||||||||||
Due to rounding, the sum of quarterly results may not equal the total for the year. | ||
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 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. | |
3 | 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. | |
4 | Includes reseller and other connections. | |
5 | Market penetration is calculated by dividing the number of wireless connections at the end of the period by the total estimated population of consolidated operating markets. | |
TDS Telecom | |||||||||||||||||||
Summary Operating Data (Unaudited) | |||||||||||||||||||
As of or for the Quarter Ended | 12/31/2020 | 9/30/2020 | 6/30/2020 | 3/31/2020 | 12/31/2019 | ||||||||||||||
TDS Telecom | |||||||||||||||||||
Wireline | |||||||||||||||||||
Residential connections | |||||||||||||||||||
Voice1 | 256,900 | 260,000 | 261,800 | 259,100 | 262,100 | ||||||||||||||
Broadband2 | 262,900 | 260,700 | 255,100 | 242,700 | 241,300 | ||||||||||||||
Video3 | 63,000 | 62,300 | 61,400 | 59,000 | 58,500 | ||||||||||||||
Wireline residential connections | 582,800 | 583,000 | 578,300 | 560,700 | 561,900 | ||||||||||||||
Total residential revenue per connection4 | $ | 51.33 | $ | 51.45 | $ | 49.73 | $ | 50.12 | $ | 49.11 | |||||||||
Commercial connections | |||||||||||||||||||
Voice1 | 106,700 | 109,400 | 112,400 | 114,400 | 117,800 | ||||||||||||||
Broadband2 | 21,000 | 20,800 | 20,700 | 20,500 | 20,400 | ||||||||||||||
managedIP5 | 111,400 | 114,900 | 115,500 | 118,300 | 121,200 | ||||||||||||||
Video3 | 200 | 200 | 200 | 100 | 100 | ||||||||||||||
Wireline commercial connections | 239,400 | 245,400 | 248,700 | 253,400 | 259,600 | ||||||||||||||
Total Wireline connections | 822,200 | 828,400 | 827,000 | 814,200 | 821,500 | ||||||||||||||
Cable | |||||||||||||||||||
Cable residential and commercial connections | |||||||||||||||||||
Broadband6 | 209,400 | 206,200 | 203,700 | 196,800 | 193,500 | ||||||||||||||
Video7 | 100,800 | 101,800 | 103,400 | 105,100 | 106,600 | ||||||||||||||
Voice8 | 66,800 | 67,700 | 69,000 | 68,900 | 69,500 | ||||||||||||||
managedIP5 | 1,900 | 1,800 | 1,800 | 1,400 | 1,300 | ||||||||||||||
Total Cable connections | 378,900 | 377,400 | 378,000 | 372,300 | 370,900 | ||||||||||||||
Numbers may not foot due to rounding. | |
1 | The individual circuits connecting a customer to Wireline's central office facilities that provide voice services. |
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 | 12/31/2020 | 9/30/2020 | 6/30/2020 | 3/31/2020 | 12/31/2019 | ||||||||||||||
(Dollars in millions) | |||||||||||||||||||
Wireline | $ | 122 | $ | 74 | $ | 58 | $ | 39 | $ | 98 | |||||||||
Cable | 25 | 18 | 17 | 15 | 26 | ||||||||||||||
Total TDS Telecom | $ | 147 | $ | 92 | $ | 75 | $ | 54 | $ | 124 | |||||||||
Telephone and Data Systems, Inc. | |||||||||||||||||||||
Consolidated Statement of Operations Highlights | |||||||||||||||||||||
(Unaudited) | |||||||||||||||||||||
Three Months EndedDecember 31, | Year EndedDecember 31, | ||||||||||||||||||||
2020 | 2019 | 2020vs. 2019 | 2020 | 2019 | 2020vs. 2019 | ||||||||||||||||
(Dollars and shares in millions, except per share amounts) | |||||||||||||||||||||
Operating revenues | |||||||||||||||||||||
UScellular | $ | 1,073 | $ | 1,052 | 2 | % | $ | 4,037 | $ | 4,022 | – | ||||||||||
TDS Telecom | 248 | 235 | 6 | % | 976 | 930 | 5 | % | |||||||||||||
All Other1 | 55 | 49 | 10 | % | 212 | 224 | (6) | % | |||||||||||||
1,376 | 1,336 | 3 | % | 5,225 | 5,176 | 1 | % | ||||||||||||||
Operating expenses | |||||||||||||||||||||
UScellular | |||||||||||||||||||||
Expenses excluding depreciation, amortization and accretion | 895 | 871 | 3 | % | 3,161 | 3,190 | (1) | % | |||||||||||||
Depreciation, amortization and accretion | 168 | 178 | (6) | % | 683 | 702 | (3) | % | |||||||||||||
(Gain) loss on asset disposals, net | 11 | 6 | 91 | % | 25 | 19 | 36 | % | |||||||||||||
(Gain) loss on sale of business and other exit costs, net | — | — | N/M | — | (1) | N/M | |||||||||||||||
(Gain) loss on license sales and exchanges, net | (5) | — | N/M | (5) | — | N/M | |||||||||||||||
1,069 | 1,055 | 1 | % | 3,864 | 3,910 | (1) | % | ||||||||||||||
TDS Telecom | |||||||||||||||||||||
Expenses excluding depreciation, amortization and accretion | 175 | 162 | 8 | % | 663 | 629 | 5 | % | |||||||||||||
Depreciation, amortization and accretion | 50 | 51 | (1) | % | 203 | 200 | 1 | % | |||||||||||||
(Gain) loss on asset disposals, net | — | — | 38 | % | 1 | (7) | N/M | ||||||||||||||
226 | 213 | 6 | % | 866 | 823 | 5 | % | ||||||||||||||
All Other1 | |||||||||||||||||||||
Expenses excluding depreciation and amortization | 55 | 53 | 3 | % | 211 | 235 | (10) | % | |||||||||||||
Depreciation and amortization | 6 | 7 | (22) | % | 23 | 30 | (23) | % | |||||||||||||
(Gain) loss on asset disposals, net | — | — | N/M | 1 | — | 19 | % | ||||||||||||||
60 | 60 | – | 236 | 264 | (11) | % | |||||||||||||||
Total operating expenses | 1,355 | 1,328 | 2 | % | 4,966 | 4,997 | (1) | % | |||||||||||||
Operating income (loss) | |||||||||||||||||||||
UScellular | 4 | (3) | N/M | 173 | 112 | 54 | % | ||||||||||||||
TDS Telecom | 23 | 21 | 6 | % | 110 | 107 | 3 | % | |||||||||||||
All Other1 | (6) | (11) | 47 | % | (24) | (40) | 41 | % | |||||||||||||
21 | 8 | N/M | 259 | 179 | 45 | % | |||||||||||||||
Investment and other income (expense) | |||||||||||||||||||||
Equity in earnings of unconsolidated entities | 43 | 39 | 11 | % | 181 | 168 | 8 | % | |||||||||||||
Interest and dividend income | 3 | 5 | (33) | % | 15 | 29 | (49) | % | |||||||||||||
Gain (loss) on investments | (1) | — | N/M | 2 | — | N/M | |||||||||||||||
Interest expense | (50) | (37) | (36) | % | (168) | (165) | (2) | % | |||||||||||||
Other, net | — | (1) | N/M | (1) | — | N/M | |||||||||||||||
Total investment and other income | (5) | 6 | N/M | 29 | 32 | (10) | % | ||||||||||||||
Income before income taxes | 16 | 14 | 13 | % | 288 | 211 | 36 | % | |||||||||||||
Income tax expense | — | (1) | N/M | 19 | 64 | (71) | % | ||||||||||||||
Net income | 16 | 15 | 4 | % | 269 | 147 | 83 | % | |||||||||||||
Less: Net income attributable to noncontrolling interests, net of tax | 2 | 3 | (44) | % | 43 | 26 | 70 | % | |||||||||||||
Net income attributable to TDS shareholders | $ | 14 | $ | 12 | 18 | % | $ | 226 | $ | 121 | 86 | % | |||||||||
Basic weighted average shares outstanding | 114 | 115 | – | 114 | 114 | – | |||||||||||||||
Basic earnings per share attributable to TDS shareholders | $ | 0.12 | $ | 0.10 | 19 | % | $ | 1.97 | $ | 1.06 | 86 | % | |||||||||
Diluted weighted average shares outstanding | 115 | 116 | – | 115 | 116 | – | |||||||||||||||
Diluted earnings per share attributable to TDS shareholders | $ | 0.12 | $ | 0.10 | 21 | % | $ | 1.93 | $ | 1.03 | 87 | % | |||||||||
N/M - Percentage change not meaningful. | |
Numbers may not foot due to rounding. | |
1 | Consists of TDS corporate, intercompany eliminations and all other business operations not included in the UScellular and TDS Telecom segments. |
Telephone and Data Systems, Inc. | |||||||
Consolidated Statement of Cash Flows | |||||||
(Unaudited) | |||||||
Year Ended December 31, | 2020 | 2019 | |||||
(Dollars in millions) | |||||||
Cash flows from operating activities | |||||||
Net income | $ | 269 | $ | 147 | |||
Add (deduct) adjustments to reconcile net income to net cash flows from operating activities | |||||||
Depreciation, amortization and accretion | 909 | 932 | |||||
Bad debts expense | 77 | 112 | |||||
Stock-based compensation expense | 53 | 59 | |||||
Deferred income taxes, net | 190 | 34 | |||||
Equity in earnings of unconsolidated entities | (181) | (168) | |||||
Distributions from unconsolidated entities | 189 | 162 | |||||
(Gain) loss on asset disposals, net | 27 | 12 | |||||
(Gain) loss on sale of business and other exit costs, net | — | (1) | |||||
(Gain) loss on license sales and exchanges, net | (5) | — | |||||
(Gain) loss on investments | (2) | — | |||||
Other operating activities | 3 | 4 | |||||
Changes in assets and liabilities from operations | |||||||
Accounts receivable | (16) | (49) | |||||
Equipment installment plans receivable | (54) | (97) | |||||
Inventory | 12 | (19) | |||||
Accounts payable | 173 | (60) | |||||
Customer deposits and deferred revenues | 4 | (9) | |||||
Accrued taxes | (120) | (17) | |||||
Other assets and liabilities | 4 | (26) | |||||
Net cash provided by operating activities | 1,532 | 1,016 | |||||
Cash flows from investing activities | |||||||
Cash paid for additions to property, plant and equipment | (1,338) | (957) | |||||
Cash paid for acquisitions and licenses | (172) | (346) | |||||
Cash received from investments | 1 | 29 | |||||
Cash paid for investments | (3) | (11) | |||||
Cash received from divestitures and exchanges | 26 | 41 | |||||
Advance payments for license acquisitions | (30) | (5) | |||||
Other investing activities | 5 | — | |||||
Net cash used in investing activities | (1,511) | (1,249) | |||||
Cash flows from financing activities | |||||||
Issuance of long-term debt | 1,250 | — | |||||
Repayment of long-term debt | (110) | (118) | |||||
TDS Common Shares reissued for benefit plans, net of tax payments | (3) | (6) | |||||
UScellular Common Shares reissued for benefit plans, net of tax payments | (11) | (9) | |||||
Repurchase of TDS Common Shares | (14) | — | |||||
Repurchase of UScellular Common Shares | (23) | (21) | |||||
Dividends paid to TDS shareholders | (78) | (75) | |||||
Payment of debt issuance costs | (41) | (1) | |||||
Distributions to noncontrolling interests | (2) | (4) | |||||
Payments to acquire additional interest in subsidiaries | (11) | — | |||||
Other financing activities | — | 14 | |||||
Net cash provided by (used in) financing activities | 957 | (220) | |||||
Net increase (decrease) in cash, cash equivalents and restricted cash | 978 | (453) | |||||
Cash, cash equivalents and restricted cash | |||||||
Beginning of period | 474 | 927 | |||||
End of period | $ | 1,452 | $ | 474 | |||
Telephone and Data Systems, Inc. | |||||||
Consolidated Balance Sheet Highlights | |||||||
(Unaudited) | |||||||
ASSETS | |||||||
December 31, | 2020 | 2019 | |||||
(Dollars in millions) | |||||||
Current assets | |||||||
Cash and cash equivalents | $ | 1,429 | $ | 465 | |||
Short-term investments | 3 | — | |||||
Accounts receivable, net | 1,112 | 1,124 | |||||
Inventory, net | 154 | 169 | |||||
Prepaid expenses | 105 | 98 | |||||
Income taxes receivable | 187 | 36 | |||||
Other current assets | 36 | 29 | |||||
Total current assets | 3,026 | 1,921 | |||||
Assets held for sale | 2 | — | |||||
Licenses | 2,638 | 2,480 | |||||
Goodwill | 547 | 547 | |||||
Other intangible assets, net | 213 | 239 | |||||
Investments in unconsolidated entities | 477 | 488 | |||||
Property, plant and equipment, net | 3,972 | 3,527 | |||||
Operating lease right-of-use assets | 998 | 972 | |||||
Other assets and deferred charges | 652 | 607 | |||||
Total assets | $ | 12,525 | $ | 10,781 | |||
Telephone and Data Systems, Inc. | |||||||
Consolidated Balance Sheet Highlights | |||||||
(Unaudited) | |||||||
LIABILITIES AND EQUITY | |||||||
December 31, | 2020 | 2019 | |||||
(Dollars in millions, except per share amounts) | |||||||
Current liabilities | |||||||
Current portion of long-term debt | $ | 5 | $ | 10 | |||
Accounts payable | 508 | 374 | |||||
Customer deposits and deferred revenues | 193 | 189 | |||||
Accrued interest | 16 | 11 | |||||
Accrued taxes | 69 | 41 | |||||
Accrued compensation | 132 | 121 | |||||
Short-term operating lease liabilities | 129 | 116 | |||||
Other current liabilities | 101 | 100 | |||||
Total current liabilities | 1,153 | 962 | |||||
Liabilities held for sale | 1 | — | |||||
Deferred liabilities and credits | |||||||
Deferred income tax liability, net | 863 | 676 | |||||
Long-term operating lease liabilities | 940 | 931 | |||||
Other deferred liabilities and credits | 541 | 481 | |||||
Long-term debt, net | 3,424 | 2,316 | |||||
Noncontrolling interests with redemption features | 10 | 11 | |||||
Equity | |||||||
TDS shareholders' equity | |||||||
Series A Common and Common Shares, par value $0.01 per share | 1 | 1 | |||||
Capital in excess of par value | 2,482 | 2,468 | |||||
Treasury shares, at cost | (477) | (479) | |||||
Accumulated other comprehensive loss | (4) | (9) | |||||
Retained earnings | 2,802 | 2,672 | |||||
Total TDS shareholders' equity | 4,804 | 4,653 | |||||
Noncontrolling interests | 789 | 751 | |||||
Total equity | 5,593 | 5,404 | |||||
Total liabilities and equity | $ | 12,525 | $ | 10,781 | |||
Balance Sheet Highlights | |||||||||||||||||||
(Unaudited) | |||||||||||||||||||
December 31, 2020 | |||||||||||||||||||
UScellular | TDS Telecom | TDSCorporate & Other | Intercompany Eliminations | TDS Consolidated | |||||||||||||||
(Dollars in millions) | |||||||||||||||||||
Cash and cash equivalents | $ | 1,271 | $ | 178 | $ | 170 | $ | (190) | $ | 1,429 | |||||||||
Licenses, goodwill and other intangible assets | $ | 2,629 | $ | 761 | $ | 8 | $ | — | $ | 3,398 | |||||||||
Investment in unconsolidated entities | 435 | 4 | 45 | (7) | 477 | ||||||||||||||
$ | 3,064 | $ | 765 | $ | 53 | $ | (7) | $ | 3,875 | ||||||||||
Property, plant and equipment, net | $ | 2,466 | $ | 1,408 | $ | 98 | $ | — | $ | 3,972 | |||||||||
Long-term debt, net: | |||||||||||||||||||
Current portion | $ | 2 | $ | — | $ | 3 | $ | — | $ | 5 | |||||||||
Non-current portion | 2,489 | 4 | 931 | — | 3,424 | ||||||||||||||
$ | 2,491 | $ | 4 | $ | 934 | $ | — | $ | 3,429 | ||||||||||
TDS Telecom Highlights | |||||||||||||||||||||
(Unaudited) | |||||||||||||||||||||
Three Months EndedDecember 31, | Year EndedDecember 31, | ||||||||||||||||||||
2020 | 2019 | 2020 vs.2019 | 2020 | 2019 | 2020 vs.2019 | ||||||||||||||||
(Dollars in millions) | |||||||||||||||||||||
Wireline | |||||||||||||||||||||
Operating revenues | |||||||||||||||||||||
Residential | $ | 90 | $ | 83 | 8 | % | $ | 349 | $ | 328 | 6 | % | |||||||||
Commercial | 37 | 40 | (8) | % | 152 | 168 | (9) | % | |||||||||||||
Wholesale | 46 | 47 | (3) | % | 182 | 186 | (2) | % | |||||||||||||
Total service revenues | 173 | 171 | 1 | % | 684 | 682 | – | ||||||||||||||
Equipment and product sales | — | — | (34) | % | 1 | 1 | (31) | % | |||||||||||||
173 | 171 | 1 | % | 685 | 683 | – | |||||||||||||||
Operating expenses | |||||||||||||||||||||
Cost of services | 72 | 68 | 5 | % | 269 | 263 | 2 | % | |||||||||||||
Cost of equipment and products | — | — | (55) | % | 1 | 1 | (36) | % | |||||||||||||
Selling, general and administrative expenses | 51 | 50 | 1 | % | 199 | 199 | – | ||||||||||||||
Expenses excluding depreciation, amortization and accretion | 123 | 119 | 3 | % | 468 | 463 | 1 | % | |||||||||||||
Depreciation, amortization and accretion | 30 | 33 | (9) | % | 124 | 132 | (6) | % | |||||||||||||
(Gain) loss on asset disposals, net | — | — | N/M | — | (8) | N/M | |||||||||||||||
154 | 153 | 1 | % | 593 | 587 | 1 | % | ||||||||||||||
Operating income | $ | 19 | $ | 18 | 5 | % | $ | 92 | $ | 96 | (4) | % | |||||||||
Cable | |||||||||||||||||||||
Operating revenues | |||||||||||||||||||||
Residential | $ | 63 | $ | 53 | 19 | % | $ | 245 | $ | 205 | 20 | % | |||||||||
Commercial | 13 | 11 | 15 | % | 47 | 43 | 10 | % | |||||||||||||
76 | 64 | 18 | % | 292 | 247 | 18 | % | ||||||||||||||
Operating expenses | |||||||||||||||||||||
Cost of services | 33 | 26 | 24 | % | 123 | 105 | 17 | % | |||||||||||||
Selling, general and administrative expenses | 19 | 17 | 12 | % | 72 | 62 | 16 | % | |||||||||||||
Expenses excluding depreciation, amortization and accretion | 52 | 44 | 19 | % | 195 | 167 | 17 | % | |||||||||||||
Depreciation, amortization and accretion | 20 | 17 | 16 | % | 78 | 68 | 15 | % | |||||||||||||
(Gain) loss on asset disposals, net | — | — | (87) | % | 1 | 1 | (26) | % | |||||||||||||
72 | 61 | 18 | % | 274 | 236 | 16 | % | ||||||||||||||
Operating income | $ | 4 | $ | 3 | 17 | % | $ | 18 | $ | 11 | 60 | % | |||||||||
Total TDS Telecom operating income | $ | 23 | $ | 21 | 6 | % | $ | 110 | $ | 107 | 3 | % | |||||||||
N/M - Percentage change not meaningful. |
Numbers may not foot due to rounding. |
Telephone and Data Systems, Inc. | |||||||||||||||
Financial Measures and Reconciliations | |||||||||||||||
Free Cash Flow | |||||||||||||||
Three Months EndedDecember 31, | Year EndedDecember 31, | ||||||||||||||
2020 | 2019 | 2020 | 2019 | ||||||||||||
(Dollars in millions) | |||||||||||||||
Cash flows from operating activities (GAAP) | $ | 366 | $ | 142 | $ | 1,532 | $ | 1,016 | |||||||
Less: Cash paid for additions to property, plant and equipment | 424 | 326 | 1,338 | 957 | |||||||||||
Free cash flow (Non-GAAP)1 | $ | (58) | $ | (184) | $ | 194 | $ | 59 | |||||||
1 | 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. |
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SOURCE Telephone and Data Systems