Business Segment Information (Tables)

3 Months Ended

Mar. 31, 2021

Financial data for TDS’ reportable segments for the three month periods ended, or as of March 31, 2021 and March 31, 2020, is as follows. See Note 1 — Basis of Presentation for additional information.


Three Months Ended or as of March 31, 2021	UScellular		TDS Telecom		Corporate, Eliminations and Other		Total
(Dollars in millions)
Operating revenues
Service	$	771	$	249	$	22	$	1,042
Equipment and product sales	252		—		24		276
Total operating revenues	1,023		249		46		1,318
Cost of services (excluding Depreciation, amortization and accretion reported below)	185		97		17		299
Cost of equipment and products	275		—		18		293
Selling, general and administrative	305		70		13		388
Depreciation, amortization and accretion	170		49		5		224
(Gain) loss on asset disposals, net	5		—		—		5
(Gain) loss on sale of business and other exit costs, net	(1)		—		—		(1)

Operating income (loss)	84		32		(6)		110
Equity in earnings of unconsolidated entities	42		—		—		42
Interest and dividend income	2		—		1		3

Interest expense	(39)		1		(15)		(53)

Income (loss) before income taxes	89		33		(20)		102
Income tax expense (benefit)	27		8		(4)		31
Net income (loss)	62		24		(15)		71
Add back:
Depreciation, amortization and accretion	170		49		5		224
(Gain) loss on asset disposals, net	5		—		—		5
(Gain) loss on sale of business and other exit costs, net	(1)		—		—		(1)


Interest expense	39		(1)		15		53
Income tax expense (benefit)	27		8		(4)		31
Adjusted EBITDA1	$	302	$	81	$	—	$	383

Investments in unconsolidated entities	$	455	$	4	$	38	$	497
Total assets	$	10,148	$	2,377	$	882	$	13,407
Capital expenditures	$	125	$	70	$	2	$	197


Three Months Ended or as of March 31, 2020	UScellular		TDS Telecom		Corporate, Eliminations and Other		Total
(Dollars in millions)
Operating revenues
Service	$	762	$	240	$	24	$	1,026
Equipment and product sales	201		—		34		235
Total operating revenues	963		240		58		1,261
Cost of services (excluding Depreciation, amortization and accretion reported below)	180		95		18		293
Cost of equipment and products	217		—		29		246
Selling, general and administrative	335		65		11		411
Depreciation, amortization and accretion	177		52		6		235

(Gain) loss on asset disposals, net	4		—		—		4


Operating income (loss)	50		28		(6)		72
Equity in earnings of unconsolidated entities	45		—		—		45
Interest and dividend income	4		2		—		6
Interest expense	(24)		1		(14)		(37)
Other, net	1		—		(1)		—
Income (loss) before income taxes	76		31		(21)		86
Income tax expense (benefit)	4		4		(5)		3
Net income (loss)	72		28		(17)		83
Add back:
Depreciation, amortization and accretion	177		52		6		235

(Gain) loss on asset disposals, net	4		—		—		4


Interest expense	24		(1)		14		37
Income tax expense (benefit)	4		4		(5)		3
Adjusted EBITDA1	$	281	$	82	$	(1)	$	362

Investments in unconsolidated entities	$	469	$	4	$	36	$	509
Total assets	$	8,251	$	2,221	$	423	$	10,895
Capital expenditures	$	236	$	54	$	2	$	292

Numbers may not foot due to rounding.

1Adjusted earnings before interest, taxes, depreciation, amortization and accretion (Adjusted EBITDA) is a segment measure reported to the chief operating decision maker for purposes of 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.