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TDS reports fourth quarter and full year 2020 results

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2020 results at UScellular and TDS Telecom provide strong foundation for 2021

Provides 2021 guidance

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 Estimated
Results


Actual Results for
the Year Ended
December 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 Estimated
Results


Actual Results for
the Year Ended
December 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 Information
TDS will hold a conference call on February 19, 2021 at 9:00 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, 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 Ended
December 31,


Year Ended
December 31,


2020


2019


2020
vs. 2019


2020


2019


2020
vs. 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


TDS
Corporate

& 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 Ended
December 31,


Year Ended
December 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 Ended
December 31,


Year Ended
December 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