TELEPHONE AND DATA SYSTEMS, INC. CHICAGO, Feb. 24, 2017 /PRNewswire/ -- Telephone and Data Systems, Inc. (NYSE:TDS) reported total operating revenues of $1,278 million for the fourth quarter of 2016, versus $1,274 million for the comparable period one year ago. Net loss attributable to TDS shareholders and related diluted loss per share was $5 million and $0.05, respectively, for the fourth quarter of 2016, compared to $1 million and $0.01, respectively, in the comparable period one year ago.
TDS reported total operating revenues of $5,104 million and $5,176 million for the years ended 2016 and 2015, respectively. Net income attributable to TDS shareholders and related diluted earnings per share were $43 million and $0.39, respectively, for the year ended 2016, compared to $219 million and $1.98, respectively, for the year ended 2015.
"In 2016, the TDS family of companies continued to execute on our long-term strategic goals," said LeRoy T. Carlson, Jr., TDS President and CEO. "U.S. Cellular worked to strengthen its competitive advantages through network enhancements and other improvements to increase customer satisfaction. TDS Telecom successfully completed two substantial projects to support its broadband strategy: fiber deployment and cable analog reclamation.
"U.S. Cellular continued to invest in its high-quality network by beginning a multi-year roll-out of Voice over LTE technology, and is on track to launch its first commercial deployment early this year. We also made a significant transition by implementing 4G LTE roaming agreements that improve the quality of roaming experiences for U.S. Cellular customers and that lower our costs. U.S. Cellular's commitment to outstanding customer service drove consistently low smartphone churn throughout the year. Increased smartphone adoption and increased per customer data usage helped to offset some of the competitive pricing pressures. In the fourth quarter, as was the case through 2016, we strove to balance customer growth with profitability, which resulted in fewer new customers, and delivered on our earnings targets.
"TDS Telecom successfully completed its planned fiber deployments for 2016, enabling fiber to reach 22 percent of our service addresses. We grew our IPTV connections significantly and, combined with a greater demand for increased data speeds, we increased residential wireline revenues. Recently, we announced that TDS Telecom accepted funding through the FCC's Alternative Connect America Cost Model (A-CAM), funds that will enable us to expand and improve broadband service to nearly 160,000 locations. In our cable business, we transitioned analog cable markets to all-digital video services to improve customer experience and to reclaim spectrum that enables higher broadband speeds. Cable revenues increased 13 percent in the fourth quarter, compared to the prior year, showing that our cable broadband strategy is working. OneNeck IT Solutions continues to focus on its strategy of growing recurring service revenues through delivering IT cloud, colocation and other services tailored to mid-market businesses.
"TDS continues to return value to shareholders. During 2016, TDS paid $65 million in regular quarterly cash dividends, and this morning we announced our 43(rd )consecutive year of increasing cash dividend payments, with a 5 percent increase in our annual dividend."
2017 Estimated Results
Estimates of full-year 2017 results for U.S. Cellular, TDS Telecom, and TDS are shown below. Such estimates represent management's view as of February 24, 2017. 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.
2017 Estimated Results and Actual Results for the Year Ended December 31, 2016
U.S. Cellular TDS Telecom TDS(3)
Estimate Actual Estimate Actual Estimate Actual
(Dollars in
millions)
Total operating
revenues (1) $3,800-$4,000 $3,939 $1,200-$1,250 $1,151 $5,015-$5,265 $5,104
Operating cash
flow (2) $500-$650 $618 $300-$340 $295 $805-$995 $916
Adjusted EBITDA
(2) $650-$800 $816 $300-$340 $298 $955-$1,145 $1,118
Capital
expenditures Approx. $500 $446 Approx. $225 $173 Approx. $735 $630
The following table provides a reconciliation to Operating Cash Flow and Adjusted EBITDA for 2017 estimated results, and actual results for the year ended December 31, 2016. In providing 2017 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. Accordingly, a reconciliation to net income is not available without unreasonable effort.
U.S. Cellular TDS Telecom TDS (3)
Estimate Actual Estimate Actual Estimate Actual
(Dollars in millions)
Net income (loss) (GAAP) N/A 49 N/A 42 N/A 52
Add back:
Income tax expense (benefit) N/A 33 N/A 25 N/A 40
Income (loss) before income taxes
(GAAP) $ (110)-40 $82 $ 75-115 $67 $ (95)-95 $92
----- --- -------- --- --- ------ --- --- -------
Add back:
Interest expense 110 113 - 3 170 170
Depreciation, amortization and
accretion expense 630 618 225 224 860 850
--- --- ---
EBITDA (Non-GAAP) $ 630-780 $813 $ 300-340 $294 $ 935-1,125 $1,112
--- ------- ---- --- ------- ---- --- --------- ------
Add back:
(Gain) loss on sale of business
and
other exit costs, net - - - - - (1)
(Gain) loss on license sales
and
exchanges, net - (19) - (1) - (20)
(Gain) loss on asset disposals,
net 20 22 - 4 20 27
Adjusted EBITDA (Non-GAAP)(2) $ 650-800 $816 $ 300-340 $298 $ 955-1,145 $1,118
=== ======= ==== === ======= ==== === ========= ======
Deduct:
Equity in earnings of
unconsolidated entities 140 140 - - 140 140
Interest and dividend income;
other income(1) 10 57 - 3 10 62
Other, net - 1 - - - -
Operating cash flow (Non-GAAP)(2)(4) $ 500-650 $618 $ 300-340 $295 $ 805-995 $916
=== ======= ==== === ======= ==== === ======= ====
Note: Totals may not foot due to rounding differences.
(1) In 2016, Imputed interest related to equipment
installment plans was recorded in Interest and
dividend income. Beginning in 2017, imputed
interest will be recorded in service revenues.
The company recorded $51 million in imputed
interest in 2016.
(2) 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 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 Operating cash flow as measurements
of profitability, and therefore reconciliations
to applicable GAAP income measures are deemed
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 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 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
income taxes.
(3) 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.
(4) A reconciliation of Operating cash flow (Non-
GAAP) to operating income (GAAP) for full year
2016, 2015 and 2014 actual results can be found
on the Guidance and Reconciliation page of the
company's website at investors.tdsinc.com.
------------------------------------------------
Stock Repurchase Summary
TDS began repurchasing stock under its $250 million repurchase authorization on August 5, 2013. The following represents repurchases of TDS Common Shares.
Repurchase Period # Shares Cost (in
millions)
2016 (full year) 111,700 $3
2015 (full year) - $ -
Total 111,700 $3
======= ===
Conference Call Information
TDS will hold a conference call on February 24, 2017 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/1145/19842.
-- 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 TDS Broadband Service LLC. Founded in 1969 and headquartered in Chicago, TDS employed 10,300 people as of December 31, 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 access to and pricing of unbundled network elements; the ability to obtain or maintain roaming arrangements with other carriers on acceptable terms; the state and federal telecommunications regulatory environment; the value of assets and investments; adverse changes in the ratings afforded TDS and U.S. Cellular debt securities by accredited ratings organizations; industry consolidation; advances in telecommunications technology; pending and future litigation; changes in income tax rates, laws, regulations or rulings; changes in customer growth rates, average monthly revenue per user, churn rates, roaming revenue and terms, the availability of wireless devices, or the mix of products and services offered by U.S. Cellular and TDS Telecom. Investors are encouraged to consider these and other risks and uncertainties that are discussed in the Form 8-K Current Report used by TDS to furnish this press release to the Securities and Exchange Commission ("SEC"), which are incorporated by reference herein.
For more information about TDS and its subsidiaries, visit:
TDS: www.tdsinc.com
U.S. Cellular: www.uscellular.com
TDS Telecom: www.tdstelecom.com
OneNeck IT Solutions: www.oneneck.com
United States Cellular Corporation
Summary Operating Data (Unaudited)
Quarter Ended 12/31/2016 9/30/2016 6/30/2016 3/31/2016 12/31/2015
Retail Connections
Postpaid
Total at end of period 4,482,000 4,484,000 4,490,000 4,454,000 4,409,000
Gross additions 187,000 174,000 197,000 215,000 240,000
Feature phones 7,000 10,000 8,000 9,000 10,000
Smartphones 109,000 105,000 107,000 124,000 132,000
Connected devices 71,000 59,000 82,000 82,000 98,000
Net additions (losses) (2,000) (6,000) 36,000 45,000 68,000
Feature phones (21,000) (20,000) (21,000) (25,000) (25,000)
Smartphones (4,000) (7,000) 8,000 20,000 23,000
Connected devices 23,000 21,000 49,000 50,000 70,000
ARPU (1) $45.19 $47.08 $47.37 $48.13 $51.46
ABPU (Non-GAAP)(2) $55.43 $56.79 $56.09 $56.06 $58.57
ARPA (3) $120.67 $125.31 $124.91 $125.36 $131.96
ABPA (Non-GAAP)(4) $148.02 $151.16 $147.90 $145.99 $150.19
Churn rate (5) 1.41% 1.34% 1.20% 1.28% 1.31%
Handsets 1.23% 1.22% 1.10% 1.18% 1.23%
Connected devices 2.49% 2.04% 1.84% 2.01% 1.95%
Smartphone penetration (6) 79% 78% 77% 75% 74%
Prepaid
Total at end of period 484,000 480,000 413,000 399,000 387,000
Gross additions 83,000 132,000 73,000 75,000 69,000
Net additions 4,000 67,000 14,000 12,000 7,000
ARPU (1) $33.25 $34.39 $34.58 $35.51 $35.54
Churn rate (5) 5.44% 4.84% 4.86% 5.37% 5.40%
Total connections at end of period (7) 5,031,000 5,030,000 4,973,000 4,926,000 4,876,000
Smartphones sold as a percent of total
handsets sold 93% 92% 91% 92% 91%
Market penetration at end of period
Consolidated operating population 31,994,000 31,994,000 31,994,000 31,994,000 31,967,000
Consolidated operating
penetration (8) 16% 16% 16% 15% 15%
Capital expenditures (millions) $171 $103 $93 $79 $198
Total cell sites in service 6,415 6,374 6,324 6,306 6,297
Owned towers 4,040 4,015 3,988 3,989 3,978
(1) Average Revenue Per
User ("ARPU") -
metric 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
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.
(3) Average Revenue Per
Account ("ARPA") -
metric 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
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.
(5) 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.
(6) Smartphone
penetration is
calculated by
dividing postpaid
smartphone
connections by
postpaid handset
connections.
(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)
Quarter Ended 12/31/2016 9/30/2016 6/30/2016 3/31/2016 12/31/2015
TDS Telecom
Wireline
--------
Residential
connections
Voice (1) 310,600 314,600 316,800 318,400 319,800
Broadband (2) 229,500 232,800 232,200 229,100 228,500
IPTV (3) 45,300 43,600 41,200 38,300 34,400
Wireline residential connections 585,400 590,900 590,200 585,800 582,700
------- ------- ------- ------- -------
Total residential
revenue per
connection (4) $44.27 $44.25 $43.67 $43.28 $41.24
Commercial
connections
Voice (1) 157,400 160,900 164,000 167,400 171,500
Broadband (2) 21,400 21,700 21,900 22,000 22,400
managedIP (5) 150,900 151,500 149,000 148,500 147,100
Wireline commercial connections 329,700 334,000 334,900 337,900 341,000
------- ------- ------- ------- -------
Total Wireline
connections 915,200 924,900 925,100 923,700 923,700
Cable
-----
Cable Connections
Broadband (2) 133,700 130,200 125,700 121,700 117,100
Video (6) 99,000 101,100 102,900 104,600 106,800
Voice (1) 59,600 59,800 58,900 58,100 56,400
Cable connections 292,400 291,000 287,600 284,400 280,300
======= ======= ======= ======= =======
Numbers may not foot due to rounding.
(1) Refers to the individual circuits connecting a customer
to Wireline's central office facilities or the Cable
billable number of lines into a building for voice
services.
(2) Refers to the number of Wireline customers provided
high-capacity data circuits via various technologies,
including DSL and dedicated internet circuit
technologies or the Cable billable number of lines
into a building for high-speed data services.
(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.
TDS Telecom
Capital Expenditures (millions)
Quarter
Ended 12/31/2016 9/30/2016 6/30/2016 3/31/2016 12/31/2015
Wireline $26 $27 $27 $27 $50
Cable 13 11 17 13 15
HMS 5 2 2 2 8
$45 $40 $46 $42 $73
=== === === === ===
Telephone and Data Systems, Inc.
Consolidated Statement of Operations Highlights
(Unaudited)
Three Months Ended December 31,
2016 2015 2016 vs. 2015
Increase (Decrease)
(Dollars and shares in millions, except per share amounts)
Operating revenues
U.S. Cellular $991 $987 $4 -
TDS Telecom 283 284 (1) -
All Other (1) 4 3 1 >100%
1,278 1,274 4 -
----- ----- ---
Operating expenses
U.S. Cellular
Expenses excluding depreciation, amortization
and
accretion 861 851 10 1%
Depreciation, amortization and accretion 156 156 - -
(Gain) loss on asset disposals, net 6 4 2 43%
(Gain) loss on license sales and exchanges, net (3) - (3) N/M
1,020 1,011 9 1%
----- ----- ---
TDS Telecom
Expenses excluding depreciation, amortization
and
accretion 212 214 (1) (1)%
Depreciation, amortization and accretion 56 58 (2) (3)%
(Gain) loss on asset disposals, net 1 3 (2) (71)%
(Gain) loss on sale of business and other exit
costs, net - (6) 6 N/M
(Gain) loss on license sales and exchanges, net (1) - (1) N/M
269 268 - -
--- --- ---
All Other (1)
Expenses excluding depreciation and
amortization 2 4 (2) 17%
Depreciation and amortization 2 2 - (4)%
5 6 (1) 25%
--- --- ---
Total operating expenses 1,294 1,285 9 1%
----- ----- ---
Operating income (loss)
U.S. Cellular (29) (24) (5) (21)%
TDS Telecom 14 16 (1) (7)%
All Other (1) (1) (3) 2 36%
(16) (11) (5) (44)%
--- --- ---
Investment and other income (expense)
Equity in earnings of unconsolidated entities 30 30 - -
Interest and dividend income 18 11 7 68%
Interest expense (43) (39) (4) (12)%
Total investment and other income 5 2 3 >100%
--- --- ---
Loss before income taxes (11) (9) (2) (25)%
Income tax expense (benefit) (6) (7) 1 24%
Net loss (5) (2) (3) >(100)%
Less: Net income attributable to noncontrolling
interests, net of tax - (1) 1 (65)%
--- --- ---
Net loss attributable to TDS shareholders (5) (1) (4) >(100)%
TDS Preferred dividend requirement - - - -
Net loss available to TDS common shareholders $(5) $(1) $(4) >(100)%
=== === ===
Basic weighted average shares outstanding 110 109 1 1%
Basic loss per share available to TDS common $(0.05) $(0.01) $(0.04) >(100)%
shareholders
Diluted weighted average shares outstanding 110 109 1 1%
Diluted loss per share available to TDS common $(0.05) $(0.01) $(0.04) >(100)%
shareholders
(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
Numbers may not foot due to rounding.
Telephone and Data Systems, Inc.
Consolidated Statement of Operations Highlights
(Unaudited)
Year Ended December 31,
2016 vs. 2015
2016 2015 Increase (Decrease)
(Dollars and shares in millions, except per share amounts)
Operating revenues
U.S. Cellular $3,939 $3,997 $(58) (1)%
TDS Telecom 1,151 1,158 (7) (1)%
All Other (1) 14 21 (7) (35)%
5,104 5,176 (72) (1)%
----- ----- ---
Operating expenses
U.S. Cellular
Expenses excluding depreciation, amortization and
accretion 3,321 3,322 (1) -
Depreciation, amortization and accretion 618 607 11 2%
(Gain) loss on asset disposals, net 22 16 6 36%
(Gain) loss on sale of business and other exit
costs, net - (114) 114 100%
(Gain) loss on license sales and exchanges, net (19) (147) 128 87%
3,942 3,684 258 7%
----- ----- ---
TDS Telecom
Expenses excluding depreciation, amortization and
accretion 856 854 2 -
Depreciation, amortization and accretion 224 228 (4) (2)%
(Gain) loss on asset disposals, net 4 6 (2) (24)%
(Gain) loss on sale of business and other exit
costs, net - (10) 10 >100%
(Gain) loss on license sales and exchanges, net (1) - (1) N/M
1,084 1,079 6 1%
----- ----- ---
All Other (1)
Expenses excluding depreciation and amortization 10 19 (9) (42)%
Depreciation and amortization 8 9 (1) (27)%
(Gain) loss on asset disposals, net 1 - 1 >100%
(Gain) loss on sale of business and other exit
costs, net (2) (1) (12) 11 96%
18 16 2 9%
--- --- ---
Total operating expenses 5,044 4,779 265 6%
----- ----- ---
Operating income (loss)
U.S. Cellular (3) 313 (316) >(100)%
TDS Telecom 67 79 (12) (15)%
All Other (1) (4) 5 (9) >(100)%
60 397 (337) (85)%
--- --- ----
Investment and other income (expense)
Equity in earnings of unconsolidated entities 140 140 - -
Interest and dividend income 62 39 23 60%
Interest expense (170) (142) (28) (20)%
Other, net - 1 (1) (98)%
Total investment and other income 32 38 (6) (16)%
--- --- ---
Income before income taxes 92 435 (343) (79)%
Income tax expense 40 172 (132) (77)%
Net income 52 263 (211) (80)%
Less: Net income attributable to noncontrolling
interest, net of tax 9 44 (35) 79%
--- --- ---
Net income attributable to TDS shareholders 43 219 (176) (80)%
TDS Preferred dividend requirement - - - -
Net income available to TDS common shareholders $43 $219 $(176) (80)%
=== ==== =====
Basic weighted average shares outstanding 110 109 1 1%
Basic earnings per share available to TDS common
shareholders $0.39 $2.02 $(1.62) (80)%
===
Diluted weighted average shares outstanding 111 110 1 1%
Diluted earnings per share available to TDS common
shareholders $0.39 $1.98 $(1.59) (80)%
===
(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.
N/M - Percentage change not meaningful
Numbers may not foot due to rounding.
Telephone and Data Systems, Inc.
Consolidated Statement of Cash Flows
(Unaudited)
Year Ended December 31,
2016 2015
(Dollars in millions)
Cash flows from operating activities
Net income $52 $263
Add (deduct) adjustments to reconcile net income (loss) to net
cash flows from operating activities
Depreciation, amortization and accretion 850 844
Bad debts expense 102 112
Stock-based compensation expense 42 40
Deferred income taxes, net 22 71
Equity in earnings of unconsolidated entities (140) (140)
Distributions from unconsolidated entities 93 60
(Gain) loss on asset disposals, net 27 22
(Gain) loss on sale of business and other exit costs,
net (1) (136)
(Gain) loss on license sales and exchanges, net (20) (147)
Noncash interest expense 3 3
Other operating activities (3) (1)
Changes in assets and liabilities from operations
Accounts receivable (23) (120)
Equipment installment plans receivable (246) (134)
Inventory 4 115
Accounts payable 36 7
Customer deposits and deferred revenues (52) (36)
Accrued taxes 60 38
Accrued interest (1) 4
Other assets and liabilities (23) (75)
Net cash provided by operating activities 782 790
--- ---
Cash flows from investing activities
Cash used for additions to property, plant and equipment (636) (801)
Cash paid for acquisitions and licenses (53) (287)
Cash received from divestitures and exchanges 21 343
Cash received for investments - -
Federal Communications Commission deposit (143) -
Other investing activities 3 7
Net cash used in investing activities (808) (738)
---- ----
Cash flows from financing activities
Issuance of long-term debt 2 525
Repayment of long-term debt (12) (1)
TDS Common Shares reissued for benefit plans, net of tax
payments 9 13
U.S. Cellular Common Shares reissued for benefit plans, net of
tax payments 6 2
Repurchase of TDS Common Shares (3) -
Repurchase of U.S. Cellular Common Shares (5) (6)
Dividends paid to TDS shareholders (65) (61)
Payment of debt issuance costs (4) (13)
Distributions to noncontrolling interests (1) (6)
Payments to acquire additional interest in subsidiaries - (4)
Other financing activities 14 12
Net cash provided by (used in) financing
activities (59) 461
--- ---
Net increase (decrease) in cash and cash equivalents (85) 513
Cash and cash equivalents
Beginning of period 985 472
End of period $900 $985
==========
Telephone and Data Systems, Inc.
Consolidated Balance Sheet Highlights
(Unaudited)
ASSETS
December 31, December
31,
2016 2015
(Dollars in millions)
Current assets
Cash and cash
equivalents $900 $985
Accounts
receivable
from
customers
and others,
net 851 803
Inventory,
net 151 158
Prepaid
expenses 115 112
Income taxes
receivable 10 70
Other current
assets 32 30
Total current assets 2,059 2,158
Assets held for sale 8 -
Licenses 1,895 1,844
Goodwill 766 766
Franchise rights 244 244
Other intangible assets, net 33 47
Investments in unconsolidated
entities 451 402
Other investments 1 -
Property, plant and equipment, net 3,555 3,764
Other assets and deferred charges 434 197
--- ---
Total assets $9,446 $9,422
====== ======
Telephone and Data Systems, Inc.
Consolidated Balance Sheet Highlights
(Unaudited)
LIABILITIES AND EQUITY
December 31, December
31,
2016 2015
(Dollars and shares in millions, except per share
amounts)
Current liabilities
Current portion
of long-term
debt $12 $14
Accounts payable 365 349
Customer deposits
and deferred
revenues 229 288
Accrued interest 11 12
Accrued taxes 44 41
Accrued
compensation 127 113
Other current
liabilities 99 127
Total current liabilities 887 944
Deferred liabilities and credits
Net deferred
income tax
liability 922 900
Other deferred
liabilities and
credits 453 433
Long-term debt, net 2,433 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 2,386 2,365
Treasury shares,
at cost (698) (727)
Accumulated other
comprehensive
income 1 -
Retained earnings 2,454 2,487
Total TDS shareholders' equity 4,144 4,126
Preferred shares 1 1
Noncontrolling
interests 605 577
Total equity 4,750 4,704
Total liabilities and equity $9,446 $9,422
====== ======
Telephone and Data Systems, Inc.
Balance Sheet Highlights
(Unaudited)
December 31, 2016
U.S. TDS TDS Corporate Intercompany TDS
Cellular Telecom & Other Eliminations Consolidated
(Dollars in millions)
Cash and cash equivalents $586 $18 $296 $ - $900
Affiliated cash investments - 430 - (430) -
$586 $448 $296 $(430) $900
==== ==== ==== ===== ====
Licenses, goodwill and other intangible
assets $2,256 $821 $(139) $ - $2,938
Investment in unconsolidated entities 413 4 40 (6) 451
Long-term and other investments - - 1 - 1
--- --- --- ---
$2,669 $825 $(98) $(6) $3,390
====== ==== ==== === ======
Property, plant and equipment, net $2,470 $1,059 $26 $ - $3,555
====== ====== === === === ======
Long-term debt:
Current portion $11 $ - $1 $ - $12
Non-current portion, net 1,618 2 813 - 2,433
$1,629 $2 $814 $ - $2,445
====== === ==== === === ======
TDS Telecom Highlights
(Unaudited)
Three Months Ended December 31,
2016 2015 2016 vs. 2015
Increase (Decrease)
(Dollars in millions)
Wireline
Operating revenues
Residential $78 $72 $5 8%
Commercial 52 54 (3) (5)%
Wholesale 44 46 (2) (5)%
Total
service
revenues 174 173 1 -
Equipment and
product sales - - - (30)%
Total
operating
revenues 174 174 1 -
--- --- ---
Operating expenses
Cost of
services 66 66 - -
Cost of
equipment and
products 1 1 - 11%
Selling,
general and
administrative
expenses 49 49 - -
Expenses
excluding
depreciation,
amortization
and accretion 116 116 - -
Depreciation,
amortization
and accretion 40 41 (1) (4)%
(Gain) loss on
asset
disposals,
net - 2 (1) (84)%
(Gain) loss on
sale of
business and
other exit
costs, net - (6) 6 N/M
(Gain) loss on
license sales
and
exchanges,
net (1) - (1) N/M
156 152 3 2%
--- --- ---
Operating
income $19 $21 $(3) (12)%
----------
Cable
Operating revenues
Residential $38 $34 $4 13%
Commercial 11 9 1 15%
Total
operating
revenues 49 43 6 13%
--- --- ---
Operating expenses
Cost of
services 24 19 5 26%
Selling,
general and
administrative
expenses 13 13 - 1%
Expenses
excluding
depreciation,
amortization
and accretion 38 32 5 16%
Depreciation,
amortization
and accretion 9 9 - -
(Gain) loss on
asset
disposals,
net 1 1 (1) (54)%
47 43 4 10%
--- --- ---
Operating
income $1 $ - $1 >100%
---------- ---
HMS
Operating revenues
Service
revenues $28 $28 $(1) (2)%
Equipment and
product sales 34 40 (7) (16)%
Total
operating
revenues 61 69 (7) (10)%
--- --- ---
Operating expenses
Cost of
services 21 22 (1) (5)%
Cost of
equipment and
products 28 34 (6) (19)%
Selling,
general and
administrative
expenses 12 11 1 6%
Expenses
excluding
depreciation,
amortization
and accretion 60 67 (7) (10)%
Depreciation,
amortization
and accretion 7 7 - (3)%
67 74 (7) (10)%
--- --- ---
Operating loss $(6) $(6) $ - 4%
------------ ---
Intercompany revenues $(1) $(1) $ - (1)%
Intercompany expenses (1) (1) - (1)%
--- --- ---
Total TDS Telecom operating
income $14 $16 $(1) (7)%
=== === ===
Numbers may not foot due to rounding.
N/M - Percentage change not meaningful
TDS Telecom Highlights
(Unaudited)
Year Ended December 31,
2016 2015 2016 vs. 2015
Increase (Decrease)
(Dollars in millions)
Wireline
Operating revenues
Residential $309 $297 $13 4%
Commercial 212 221 (9) (4)%
Wholesale 175 181 (7) (4)%
Total
service
revenues 696 699 (3) -
Equipment and
product sales 2 2 - (9)%
Total
operating
revenues 698 701 (3) -
--- --- ---
Operating expenses
Cost of
services 258 255 4 1%
Cost of
equipment and
products 2 2 - 1%
Selling,
general and
administrative
expenses 197 194 3 2%
Expenses
excluding
depreciation,
amortization
and accretion 458 451 7 1%
Depreciation,
amortization
and accretion 159 166 (7) (4)%
(Gain) loss on
asset
disposals,
net 2 5 (3) (62)%
(Gain) loss on
sale of
business and
other exit
costs, net - (10) 10 >100%
(Gain) loss on
license sales
and
exchanges,
net (1) - (1) N/M
618 612 6 1%
--- --- ---
Operating
income $80 $89 $(9) (10)%
----------
Cable
Operating revenues
Residential $147 $138 $8 6%
Commercial 38 36 2 6%
Total
operating
revenues 185 175 10 6%
--- --- ---
Operating expenses
Cost of
services 94 79 15 19%
Selling,
general and
administrative
expenses 51 54 (3) (6)%
Expenses
excluding
depreciation,
amortization
and accretion 144 133 12 9%
Depreciation,
amortization
and accretion 37 35 1 4%
(Gain) loss on
asset
disposals,
net 2 1 2 >100%
183 169 15 9%
--- --- ---
Operating
income $2 $6 $(5) (71)%
----------
HMS
Operating revenues
Service
revenues $119 $117 $2 1%
Equipment and
product sales 155 170 (15) (9)%
Total
operating
revenues 273 287 (13) (5)%
--- --- ---
Operating expenses
Cost of
services 82 85 (3) (4)%
Cost of
equipment and
products 128 143 (14) (10)%
Selling,
general and
administrative
expenses 48 47 1 3%
Expenses
excluding
depreciation,
amortization
and accretion 259 275 (16) (6)%
Depreciation,
amortization
and accretion 29 27 2 6%
288 302 (15) (5)%
--- --- ---
Operating loss $(14) $(15) $1 7%
------------
Intercompany revenues $(5) $(5) $ - 1%
Intercompany expenses (5) (5) - 1%
--- --- ---
Total TDS Telecom operating
income (loss) $67 $79 $(12) (15)%
=== === ====
Numbers may not foot due to rounding.
N/M - Percentage change not meaningful
Telephone and Data Systems, Inc.
Financial Measures and Reconciliations
(Unaudited)
Free Cash Flow and Adjusted Free Cash Flow
Three Months Ended December 31, Year Ended December 31,
2016 2015 2016 2015
(Dollars in millions)
Cash flows from operating activities (GAAP) $144 $63 $782 $790
Less: Cash used for additions to property,
plant and equipment 209 243 636 801
Free cash flow (65) (180) 146 (11)
Add: Sprint Cost Reimbursement 1 2 7 30
Adjusted free cash flow (Non-GAAP)(1) $(64) $(178) $153 $19
(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,
2016. 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 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 revenues received from customers.
For the Quarter Ended 12/31/2016 9/30/2016 6/30/2016 3/31/2016 12/31/2015
(Dollars and connection
counts in millions)
Calculation of Postpaid
ARPU
-----------------------
Postpaid service revenues $607 $635 $636 $639 $674
Average number of postpaid
connections 4.48 4.49 4.48 4.43 4.37
Number of months in period 3 3 3 3 3
Postpaid
ARPU (GAAP
metric) $45.19 $47.08 $47.37 $48.13 $51.46
===
Calculation of Postpaid
ABPU
-----------------------
Postpaid service revenues $607 $635 $636 $639 $674
Equipment installment plan
billings 138 131 118 105 93
--- --- --- --- ---
Total
billings to
postpaid
connections $745 $766 $754 $744 $767
Average number of postpaid
connections 4.48 4.49 4.48 4.43 4.37
Number of months in period 3 3 3 3 3
Postpaid
ABPU (Non-
GAAP
metric) $55.43 $56.79 $56.09 $56.06 $58.57
===
Calculation of Postpaid
ARPA
-----------------------
Postpaid service revenues $607 $635 $636 $639 $674
Average number of postpaid
accounts 1.68 1.69 1.70 1.70 1.70
Number of months in period 3 3 3 3 3
Postpaid
ARPA (GAAP
metric) $120.67 $125.31 $124.91 $125.36 $131.96
===
Calculation of Postpaid
ABPA
-----------------------
Postpaid service revenues $607 $635 $636 $639 $674
Equipment installment plan
billings 138 131 118 105 93
--- --- --- --- ---
Total
billings to
postpaid
accounts $745 $766 $754 $744 $767
Average number of postpaid
accounts 1.68 1.69 1.70 1.70 1.70
Number of months in period 3 3 3 3 3
Postpaid
ABPA (Non-
GAAP
metric) $148.02 $151.16 $147.90 $145.99 $150.19
===
To view the original version on PR Newswire, visit:http://www.prnewswire.com/news-releases/tds-reports-fourth-quarter-and-full-year-2016-results-300413192.html
SOURCE Telephone and Data Systems, Inc.
