Business Segment Information

12 Months Ended

Dec. 31, 2014

Disclosure Text Block

Business Segment Information

NOTE 18 BUSINESS SEGMENT INFORMATION

U.S. Cellular and TDS Telecom are billed for all services they receive from TDS, consisting primarily of information processing, accounting and finance, and general management services. Such billings are based on expenses specifically identified to U.S. Cellular and TDS Telecom and on allocations of common expenses.Management believes the method used to allocate common expenses is reasonable and that all expenses and costs applicable to U.S. Cellular and TDS Telecom are reflected in the accompanying business segment information on a basis that is representative of what they would have been if U.S. Cellular and TDS Telecom operated on a stand-alone basis.

Financial data for TDS' reportable segments for 2014, 2013 and 2012, is as follows.

					TDS Telecom
Year Ended or as of December 31, 2014			U.S. Cellular		Wireline		Cable		HMS		TDS Telecom Eliminations		TDS Telecom Total		Corporate, Eliminations and Other		Total
(Dollars in thousands)
Operating revenues
	Service		$	3,397,937	$	714,586	$	116,855	$	109,766	$	(3,697)	$	937,510	$	(6,793)	$	4,328,654
	Equipment and product sales			494,810		1,836		-		148,966		-		150,802		35,172		680,784
		Total operating revenues		3,892,747		716,422		116,855		258,732		(3,697)		1,088,312		28,379		5,009,438
Cost of services (excluding Depreciation, amortization and accretion expense reported below)				769,911		256,878		54,265		77,392		(3,504)		385,031		9,716		1,164,658
Cost of equipment and products				1,192,669		2,336		-		126,362		-		128,698		25,444		1,346,811
Selling, general and administrative				1,591,914		189,956		36,175		53,020		(193)		278,958		(5,065)		1,865,807
Depreciation, amortization and accretion				605,997		169,044		23,643		26,912		-		219,599		10,936		836,532
Loss on impairment of assets				-		-		-		84,000		-		84,000		3,802		87,802
(Gain) loss on asset disposals, net				21,469		2,091		2,482		181		-		4,754		308		26,531
(Gain) loss on sale of business and other exit costs, net				(32,830)		(2,357)		-		-		-		(2,357)		19,341		(15,846)
(Gain) loss on license sales and exchanges				(112,993)		-		-		-		-		-		-		(112,993)
Operating income (loss)				(143,390)		98,474		290		(109,135)		-		(10,371)		(36,103)		(189,864)
Equity in earnings of unconsolidated entities				129,764		8		-		-		-		8		2,193		131,965
Interest and dividend income				12,148		2,396		8		26		-		2,430		2,379		16,957
Interest expense				(57,386)		2,695		95		(1,602)		-		1,188		(55,199)		(111,397)
Other, net				160		(32)		(1)		12		-		(21)		(24)		115
Income (loss) before income taxes				(58,704)		103,541		392		(110,699)		-		(6,766)		(86,754)		(152,224)
Add back:
Depreciation, amortization and accretion				605,997		169,044		23,643		26,912		-		219,599		10,936		836,532
Loss on impairment of assets				-		-		-		84,000		-		84,000		3,802		87,802
(Gain) loss on sale of business and other exit costs, net				(32,830)		(2,357)		-		-		-		(2,357)		19,341		(15,846)
(Gain) loss on license sales and exchanges				(112,993)		-		-		-		-		-		-		(112,993)
Interest expense				57,386		(2,695)		(95)		1,602		-		(1,188)		55,199		111,397
Adjusted income before income taxes			$	458,856	$	267,533	$	23,940	$	1,815	$	-	$	293,288	$	2,524	$	754,668
Investments in unconsolidated entities			$	283,014	$	3,803	$	-	$	-	$	-	$	3,803	$	34,912	$	321,729
Total assets			$	6,487,268	$	1,419,478	$	563,585	$	268,972	$	-	$	2,252,035	$	167,636	$	8,906,939
Capital expenditures			$	557,615	$	135,805	$	35,640	$	36,618	$	-	$	208,063	$	4,899	$	770,577

					TDS Telecom
Year Ended or as of December 31, 2013			U.S. Cellular		Wireline		Cable		HMS		TDS Telecom Eliminations		TDS Telecom Total		Corporate, Eliminations and Other Reconciling Items		Total
(Dollars in thousands)
Operating revenues
	Service		$	3,594,773	$	723,372	$	35,883	$	94,875	$	(1,063)	$	853,067	$	(4,349)	$	4,443,491
	Equipment and product sales			324,063		3,195		-		90,741		-		93,936		39,746		457,745
		Total operating revenues		3,918,836		726,567		35,883		185,616		(1,063)		947,003		35,397		4,901,236
Cost of services (excluding Depreciation, amortization and accretion reported below)				763,435		266,635		17,274		60,423		(1,000)		343,332		11,416		1,118,183
Cost of equipment and products				999,000		3,831		-		75,991		-		79,822		28,311		1,107,133
Selling, general and administrative				1,677,395		220,097		11,054		44,945		(63)		276,033		(5,650)		1,947,778
Depreciation, amortization and accretion				803,781		170,868		7,571		24,262		-		202,701		11,595		1,018,077
(Gain) loss on asset disposals, net				30,606		130		28		125		-		283		(48)		30,841
(Gain) loss on sale of business and other exit costs, net				(246,767)		-		-		-		-		-		(53,889)		(300,656)
(Gain) loss on license sales and exchanges				(255,479)		-		-		-		-		-		-		(255,479)
Operating income (loss)				146,865		65,006		(44)		(20,130)		-		44,832		43,662		235,359
Equity in earnings of unconsolidated entities				131,949		19		-		-		-		19		746		132,714
Interest and dividend income				3,961		1,759		2		63		-		1,824		3,307		9,092
Gain (loss) on investments				18,556		830		-		-		-		830		(4,839)		14,547
Interest expense				(43,963)		3,265		(74)		(1,626)		-		1,565		(56,413)		(98,811)
Other, net				288		(214)		-		29		-		(185)		(140)		(37)
Income (loss) before income taxes				257,656		70,665		(116)		(21,664)		-		48,885		(13,677)		292,864
Add back:
Depreciation, amortization and accretion				803,781		170,868		7,571		24,262		-		202,701		11,595		1,018,077
(Gain) loss on sale of business and other exit costs, net				(246,767)		-		-		-		-		-		(53,889)		(300,656)
(Gain) loss on license sales and exchanges				(255,479)		-		-		-		-		-		-		(255,479)
Gain (loss) on investments				(18,556)		(830)		-		-		-		(830)		4,839		(14,547)
Interest expense				43,963		(3,265)		74		1,626		-		(1,565)		56,413		98,811
Adjusted income before income taxes			$	584,598	$	237,438	$	7,529	$	4,224	$	-	$	249,191	$	5,281	$	839,070
Investments in unconsolidated entities			$	265,585	$	3,809	$	-	$	-	$	-	$	3,809	$	32,378	$	301,772
Total assets			$	6,445,708	$	1,452,502	$	278,969	$	328,397	$	-	$	2,059,868	$	398,571	$	8,904,147
Capital expenditures			$	737,501	$	140,009	$	8,375	$	16,474	$	-	$	164,858	$	7,301	$	909,660

					TDS Telecom
Year Ended or as of December 31, 2012			U.S. Cellular		Wireline		HMS		TDS Telecom Eliminations		TDS Telecom Total		Corporate, Eliminations and Other Reconciling Items		Total
(Dollars in thousands)
Operating revenues
	Service		$	4,098,856	$	738,216	$	77,096	$	(252)	$	815,060	$	38,687	$	4,952,603
	Equipment and product sales			353,228		3,532		35,914		-		39,446		-		392,674
		Total operating revenues		4,452,084		741,748		113,010		(252)		854,506		38,687		5,345,277
Cost of services (excluding Depreciation, amortization and accretion reported below)				946,805		270,333		46,836		(252)		316,917		10,903		1,274,625
Cost of equipment and products				935,947		3,732		28,945		-		32,677		29,321		997,945
Selling, general and administrative				1,764,933		235,716		34,193		-		269,909		(941)		2,033,901
Depreciation, amortization and accretion				608,633		172,526		20,568		-		193,094		11,899		813,626
Loss on impairment of assets				-		-		-		-		-		515		515
(Gain) loss on asset disposals, net				18,088		1,020		108		-		1,128		525		19,741
(Gain) loss on sale of business and other exit costs, net				21,022		39		-		-		39		-		21,061
Operating income (loss)				156,656		58,382		(17,640)		-		40,742		(13,535)		183,863
Equity in earnings of unconsolidated entities				90,364		10		-		-		10		2,493		92,867
Interest and dividend income				3,644		3,085		25		-		3,110		2,494		9,248
Gain (loss) on investments				(3,718)		-		-		-		-		-		(3,718)
Interest expense				(42,393)		2,674		(1,160)		-		1,514		(45,866)		(86,745)
Other, net				500		(353)		(1)		-		(354)		574		720
Income (loss) before income taxes				205,053		63,798		(18,776)		-		45,022		(53,840)		196,235
Add back:
Depreciation, amortization and accretion				608,633		172,526		20,568		-		193,094		11,899		813,626
Loss on impairment of assets				-		-		-		-		-		515		515
(Gain) loss on sale of business and other exit costs, net				21,022		39		-		-		39		-		21,061
Gain (loss) on investments				3,718		-		-		-		-		-		3,718
Interest expense				42,393		(2,674)		1,160		-		(1,514)		45,866		86,745
Adjusted income before income taxes			$	880,819	$	233,689	$	2,952	$	-	$	236,641	$	4,440	$	1,121,900
Investments in unconsolidated entities			$	144,531	$	3,809	$	-	$	-	$	3,809	$	31,581	$	179,921
Total assets			$	6,587,450	$	1,519,698	$	267,798	$	-	$	1,787,496	$	248,954	$	8,623,900
Capital expenditures			$	836,748	$	158,580	$	15,344	$	-	$	173,924	$	(6,051)	$	1,004,621

Adjusted income before income taxes is a segment measure reported to the chief operating decision maker for purposes of making decisions about allocating resources to the segments and assessing their performance. Adjusted income before income taxes is defined as Income (loss) before income taxes, adjusted for the items set forth in the reconciliation above. Adjusted income before income taxes excludes these items in order to show operating results on a more comparable basis from period to period. From time to time, TDS may also exclude other items from adjusted income before income taxes if such items help reflect operating results on a more comparable basis. TDS does not intend to imply that any of such items that are excluded are non-recurring, infrequent or unusual; such itemsmay occur in the future. TDS believes Adjusted income before income taxes is a useful measure of TDS' operating results before significant recurring non-cash charges, discrete gains and losses and financing charges (Interest expense).