Leases (Tables)

6 Months Ended

Jun. 30, 2019

Leases [Abstract]

Schedule of new accounting pronouncements and changes in accounting principles

The cumulative effect of the adoption of ASC 842 on TDS’ Consolidated Balance Sheet as of January 1, 2019 is presented below.

	December 31, 2018		ASC 842 Adjustment			January 1, 2019
(Dollars in millions)
Prepaid expenses	$	103	$	(13	)	$	90
Operating lease right-of-use assets	—		975			975
Other assets and deferred charges	616		(12		)	604
Short-term operating lease liabilities	—		112			112
Other current liabilities	114		(8		)	106
Long-term operating lease liabilities	—		949			949
Other deferred liabilities and credits	541		(103		)	438

Components of lease expense

The following table shows the components of lease cost included in the Consolidated Statement of Operations:

	Three Months Ended June 30, 2019		Six Months Ended June 30, 2019
(Dollars in millions)
Operating lease cost	$	44	$	87
Financing lease cost:
Amortization of ROU assets	1		1
Variable lease cost	2		4
Total lease cost	$	47	$	92

Supplemental cash flow information related to leases

The following table shows supplemental cash flow information related to lease activities:

	Six Months Ended June 30, 2019
(Dollars in millions)
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases	$	84
ROU assets obtained in exchange for lease obligations:
Operating leases	$	57
Finance leases	7

Supplemental balance sheet information related to leases

The following table shows the classification of TDS’ operating and finance leases in its Consolidated Balance Sheet:

	June 30, 2019
(Dollars in millions)
Operating Leases
Operating lease right-of-use assets	$	963
Short-term operating lease liabilities	$	112
Long-term operating lease liabilities	927
Total operating lease liabilities	$	1,039
Finance Leases
Property, plant and equipment	$	17
Less: Accumulated depreciation and amortization	4
Property, plant and equipment, net	$	13
Current portion of long-term debt	$	1
Long-term debt, net	5
Total finance lease liabilities	$	6

Schedule of weighted average remaining lease term and weighted average discount rate related to leases

The table below shows a weighted-average analysis for lease term and discount rate for all leases:

	June 30, 2019
Weighted Average Remaining Lease Term
Operating leases	12 years
Finance leases	23 years
Weighted Average Discount Rate
Operating leases	4.5	%
Finance leases	6.9	%

Maturities of lease liabilities

The maturities of lease liabilities are as follows:

	Operating Leases		Finance Leases
(Dollars in millions)
Remainder of 2019	$	73	$	1
2020	162		1
2021	147		—
2022	131		1
2023	116		—
Thereafter	791		13
Total lease payments1	$	1,420	$	16
Less: Imputed interest	381		10
Present value of lease liabilities	$	1,039	$	6

¹ 

Lease payments exclude $8 million of legally binding lease payments for leases signed but not yet commenced.

Lease income

The following table shows the components of lease income which are included in service revenue in the Consolidated Statement of Operations:

	Three Months Ended June 30, 2019		Six Months Ended June 30, 2019
(Dollars in millions)
Operating lease income	$	23	$	45

Maturities of expected lease revenues

The maturities of expected lease payments to be received are as follows:

	Operating Leases
(Dollars in millions)
Remainder of 2019	$	39
2020	80
2021	45
2022	31
2023	19
Thereafter	14
Total future lease maturities	$	228

Lease commitments

As of December 31, 2018, future minimum rental payments required under operating leases and rental receipts expected under operating leases that have noncancellable lease terms in excess of one year were as follows:

	Operating Leases Future Minimum Rental Payments		Operating Leases Future Minimum Rental Receipts
(Dollars in millions)
2019	$	170	$	59
2020	158		48
2021	142		35
2022	126		23
2023	110		10
Thereafter	784		7
Total	$	1,490	$	182