Financial data for TDS’ reportable segments for the three and nine month periods ended, or as of September 30, 2016 and 2015, is as follows. See Note 1 — Basis of Presentation for additional information.

					TDS Telecom
Three Months Ended or as of September 30, 2016			U.S. Cellular		Wireline		Cable		HMS		TDS Telecom Eliminations		TDS Telecom Total		Corporate, Eliminations and Other		Total
(Dollars in millions)
Operating revenues
	Service		$	771	$	174	$	46	$	29	$	(1)	$	248	$	(6)	$	1,013
	Equipment and product sales			239		–		–		39		–		39		10		288
		Total operating revenues		1,010		175		46		68		(1)		287		4		1,301
Cost of services (excluding Depreciation, amortization
	and accretion reported below)			196		67		23		21		(1)		110		(1)		305
Cost of equipment and products				280		1		–		33		–		33		8		321
Selling, general and administrative				370		50		13		12		–		75		(5)		440
Depreciation, amortization and accretion				155		41		9		7		–		57		2		214
(Gain) loss on asset disposals, net				7		1		1		–		–		2		(1)		8
(Gain) loss on license sales and exchanges, net				(7)		–		–		–		–		–		–		(7)
Operating income (loss)				9		16		–		(5)		–		12		(1)		20
Equity in earnings of unconsolidated entities				38		–		–		–		–		–		–		38
Interest and dividend income				14		1		–		–		–		1		–		15
Interest expense				(28)		–		–		(1)		–		(1)		(13)		(42)
Other, net				–		–		–		–		–		–		(1)		(1)
Income (loss) before income taxes				33		17		–		(6)		–		11		(14)		30
Income tax expense (benefit)1				15										4		(5)		14
Net income (loss)				18										7		(9)		16
Add back:
Depreciation, amortization and accretion				155		41		9		7		–		57		2		214
(Gain) loss on asset disposals, net				7		1		1		–		–		2		(1)		8
(Gain) loss on license sales and exchanges, net				(7)		–		–		–		–		–		–		(7)
Interest expense				28		–		–		1		–		1		13		42
Income tax expense (benefit)1				15										4		(5)		14
Adjusted EBITDA2			$	216	$	58	$	10	$	3	$	–	$	71	$	–	$	287

Investments in unconsolidated entities			$	420	$	4	$	–	$	–	$	–	$	4	$	35	$	459
Total assets			$	7,104	$	1,259	$	592	$	273	$	–	$	2,123	$	222	$	9,449
Capital expenditures			$	103	$	27	$	11	$	2	$	–	$	40	$	2	$	145

Numbers may not foot due to rounding.

					TDS Telecom
Three Months Ended or as of September 30, 2015			U.S. Cellular		Wireline		Cable		HMS		TDS Telecom Eliminations		TDS Telecom Total		Corporate, Eliminations and Other		Total
(Dollars in millions)
Operating revenues
	Service		$	896	$	175	$	44	$	30	$	(1)	$	248	$	(6)	$	1,138
	Equipment and product sales			173		–		–		51		–		52		11		236
		Total operating revenues		1,069		175		44		82		(1)		299		6		1,374
Cost of services (excluding Depreciation, amortization
	and accretion reported below)			199		64		20		21		(1)		103		1		303
Cost of equipment and products				287		1		–		43		–		44		6		337
Selling, general and administrative				375		50		14		12		–		77		(2)		450
Depreciation, amortization and accretion				152		41		9		7		–		57		2		211
(Gain) loss on asset disposals, net				3		2		–		–		–		2		–		5
(Gain) loss on sale of business and other exit costs, net				(1)		–		–		–		–		–		–		(1)
(Gain) loss on license sales and exchanges, net				(24)		–		–		–		–		–		–		(24)
Operating income (loss)				78		18		1		(2)		–		17		(2)		93
Equity in earnings of unconsolidated entities				40		–		–		–		–		–		–		40
Interest and dividend income				9		1		–		–		–		1		–		10
Interest expense				(21)		–		–		(1)		–		–		(14)		(35)
Other, net				–		–		–		–		–		–		–		–
Income (loss) before income taxes				106		19		1		(2)		–		17		(15)		108
Income tax expense (benefit)1				41										8		(3)		46
Net income (loss)				65										9		(12)		62
Add back:
Depreciation, amortization and accretion				152		41		9		7		–		57		2		211
(Gain) loss on asset disposals, net				3		2		–		–		–		2		–		5
(Gain) loss on sale of business and other exit costs, net				(1)		–		–		–		–		–		–		(1)
(Gain) loss on license sales and exchanges, net				(24)		–		–		–		–		–		–		(24)
Interest expense				21		–		–		1		–		–		14		35
Income tax expense (benefit)1				41		–		–		–		–		8		(3)		46
Adjusted EBITDA2			$	257	$	61	$	10	$	5	$	–	$	76	$	1	$	334

Investments in unconsolidated entities			$	348	$	4	$	–	$	–	$	–	$	4	$	34	$	386
Total assets			$	6,911	$	1,322	$	572	$	299	$	–	$	2,193	$	159	$	9,263
Capital expenditures			$	135	$	38	$	13	$	5	$	–	$	56	$	3	$	194

Numbers may not foot due to rounding.

					TDS Telecom
Nine Months Ended or as of September 30, 2016			U.S. Cellular		Wireline		Cable		HMS		TDS Telecom Eliminations		TDS Telecom Total		Corporate, Eliminations and Other		Total
(Dollars in millions)
Operating revenues
	Service		$	2,293	$	522	$	136	$	91	$	(3)	$	746	$	(18)	$	3,021
	Equipment and product sales			655		1		–		121		–		123		27		805
		Total operating revenues		2,948		523		137		212		(3)		868		10		3,826
Cost of services (excluding Depreciation, amortization
	and accretion reported below)			572		192		69		61		(3)		320		(1)		891
Cost of equipment and products				799		2		–		101		–		103		19		921
Selling, general and administrative				1,089		148		37		37		–		222		(12)		1,299
Depreciation, amortization and accretion3				462		119		27		22		–		168		6		636
(Gain) loss on asset disposals, net				16		2		2		–		–		4		–		20
(Gain) loss on sale of business and other exit costs, net				–		–		–		–		–		–		(1)		(1)
(Gain) loss on license sales and exchanges, net				(16)		–		–		–		–		–		–		(16)
Operating income (loss)				26		61		1		(9)		–		53		(3)		76
Equity in earnings of unconsolidated entities				110		–		–		–		–		–		(1)		109
Interest and dividend income				41		2		–		–		–		2		1		44
Interest expense				(84)		1		–		(3)		–		(2)		(41)		(127)
Other, net				–		–		–		–		–		–		1		1
Income (loss) before income taxes				93		63		1		(12)		–		53		(43)		103
Income tax expense (benefit)1				39										20		(14)		45
Net income (loss)				54										32		(28)		58
Add back:
Depreciation, amortization and accretion3				462		119		27		22		–		168		6		636
(Gain) loss on asset disposals, net				16		2		2		–		–		4		–		20
(Gain) loss on sale of business and other exit costs, net				–		–		–		–		–		–		(1)		(1)
(Gain) loss on license sales and exchanges, net				(16)		–		–		–		–		–		–		(16)
Interest expense				84		(1)		–		3		–		2		41		127
Income tax expense (benefit)1				39										20		(14)		45
Adjusted EBITDA2			$	639	$	183	$	30	$	13	$	–	$	226	$	4	$	869

Investments in unconsolidated entities			$	420	$	4	$	–	$	–	$	–	$	4	$	35	$	459
Total assets			$	7,104	$	1,259	$	592	$	273	$	–	$	2,123	$	222	$	9,449
Capital expenditures			$	275	$	82	$	41	$	6	$	–	$	128	$	9	$	412

Numbers may not foot due to rounding.

					TDS Telecom
Nine Months Ended or as of September 30, 2015			U.S. Cellular		Wireline		Cable		HMS		TDS Telecom Eliminations		TDS Telecom Total		Corporate, Eliminations and Other		Total
(Dollars in millions)
Operating revenues
	Service		$	2,549	$	526	$	132	$	88	$	(3)	$	743	$	(10)	$	3,282
	Equipment and product sales			461		1		–		130		–		132		27		620
		Total operating revenues		3,010		527		132		218		(3)		874		18		3,902
Cost of services (excluding Depreciation, amortization
	and accretion reported below)			586		189		59		63		(3)		308		3		897
Cost of equipment and products				779		2		–		109		–		111		17		907
Selling, general and administrative				1,107		145		41		36		–		222		(5)		1,324
Depreciation, amortization and accretion				450		124		26		20		–		170		8		628
(Gain) loss on asset disposals, net				12		3		(1)		–		–		3		–		15
(Gain) loss on sale of business and other exit costs, net				(114)		(3)		–		–		–		(3)		(13)		(130)
(Gain) loss on license sales and exchanges, net				(147)		–		–		–		–		–		–		(147)
Operating income (loss)				337		67		6		(10)		–		64		7		408
Equity in earnings of unconsolidated entities				110		–		–		–		–		–		–		110
Interest and dividend income				26		2		–		–		–		2		–		28
Interest expense				(61)		1		–		(2)		–		–		(42)		(103)
Other, net				(1)		–		–		–		–		–		1		–
Income (loss) before income taxes				411		70		7		(11)		–		65		(33)		443
Income tax expense (benefit)1				161										27		(10)		178
Net income (loss)				250										38		(23)		265
Add back:
Depreciation, amortization and accretion				450		124		26		20		–		170		8		628
(Gain) loss on asset disposals, net				12		3		(1)		–		–		3		–		15
(Gain) loss on sale of business and other exit costs, net				(114)		(3)		–		–		–		(3)		(13)		(130)
(Gain) loss on license sales and exchanges, net				(147)		–		–		–		–		–		–		(147)
Interest expense				61		(1)		–		2		–		–		42		103
Income tax expense (benefit)1				161		–		–		–		–		27		(10)		178
Adjusted EBITDA2			$	673	$	193	$	32	$	10	$	–	$	236	$	3	$	912

Investments in unconsolidated entities			$	348	$	4	$	–	$	–	$	–	$	4	$	34	$	386
Total assets			$	6,911	$	1,322	$	572	$	299	$	–	$	2,193	$	159	$	9,263
Capital expenditures			$	335	$	91	$	37	$	19	$	–	$	146	$	6	$	487

Numbers may not foot due to rounding.

1	Income tax expense (benefit) is not provided at the individual segment level for Wireline, Cable and HMS. TDS calculates income tax expense for “TDS Telecom Total”.

2	Adjusted earnings before interest, taxes, depreciation, amortization and accretion (“Adjusted EBITDA”) 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 EBITDA is defined as net income, adjusted for the items set forth in the reconciliation above. TDS believes Adjusted EBITDA is a useful measure 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.

3	During the nine months ended September 30, 2016, TDS recorded an out-of-period adjustment attributable to the third quarter of 2014 through the first quarter of 2016 related to the over-depreciation of certain assets in the Wireline segment. TDS has determined that this adjustment was not material to the prior quarterly or annual periods and also was not material to the current period or anticipated full year 2016 results. As a result of this out-of-period adjustment, Depreciation, amortization and accretion expense decreased by $4 million for the nine months ended September 30, 2016. This adjustment was made in the second quarter of 2016.