Business Segment Information (Tables)

9 Months Ended

Sep. 30, 2021

Financial data for TDS’ reportable segments for the three and nine month periods ended, or as of September 30, 2021 and 2020, is as follows. See Note 1 — Basis of Presentation for additional information.


Three Months Ended or as of September 30, 2021	UScellular		TDS Telecom		Corporate, Eliminations and Other		Total
(Dollars in millions)
Operating revenues
Service	$	788	$	251	$	26	$	1,065
Equipment and product sales	228		—		35		263
Total operating revenues	1,016		252		60		1,328
Cost of services (excluding Depreciation, amortization and accretion reported below)	205		102		20		327
Cost of equipment and products	252		—		30		282
Selling, general and administrative	346		72		11		429
Depreciation, amortization and accretion	160		49		4		213
(Gain) loss on asset disposals, net	8		1		(1)		8


Operating income (loss)	45		27		(3)		69
Equity in earnings of unconsolidated entities	48		—		—		48
Interest and dividend income	1		—		2		3

Interest expense	(45)		1		(10)		(54)

Income (loss) before income taxes	49		28		(11)		66
Income tax expense (benefit)	14		7		(2)		19
Net income (loss)	35		21		(9)		47
Add back:
Depreciation, amortization and accretion	160		49		4		213
(Gain) loss on asset disposals, net	8		1		(1)		8



Interest expense	45		(1)		10		54
Income tax expense (benefit)	14		7		(2)		19
Adjusted EBITDA1	$	262	$	77	$	2	$	341

Investments in unconsolidated entities	$	466	$	4	$	39	$	509
Total assets	$	10,144	$	2,493	$	809	$	13,446
Capital expenditures	$	185	$	91	$	3	$	279


Three Months Ended or as of September 30, 2020	UScellular		TDS Telecom		Corporate, Eliminations and Other		Total
(Dollars in millions)
Operating revenues
Service	$	775	$	247	$	24	$	1,046
Equipment and product sales	252		—		26		278
Total operating revenues	1,027		247		50		1,324
Cost of services (excluding Depreciation, amortization and accretion reported below)	203		100		18		321
Cost of equipment and products	257		—		21		278
Selling, general and administrative	335		69		11		415
Depreciation, amortization and accretion	161		49		7		217

(Gain) loss on asset disposals, net	6		—		—		6


Operating income (loss)	65		28		(6)		87
Equity in earnings of unconsolidated entities	48		—		—		48
Interest and dividend income	2		1		1		4
Gain (loss) on investments	3		—		—		3
Interest expense	(29)		1		(15)		(43)

Income (loss) before income taxes	89		29		(19)		99
Income tax expense (benefit)	4		4		(2)		6
Net income (loss)	85		25		(17)		93
Add back:
Depreciation, amortization and accretion	161		49		7		217

(Gain) loss on asset disposals, net	6		—		—		6


Gain (loss) on investments	(3)		—		—		(3)
Interest expense	29		(1)		15		43
Income tax expense (benefit)	4		4		(2)		6
Adjusted EBITDA1	$	282	$	78	$	2	$	362

Investments in unconsolidated entities	$	467	$	4	$	37	$	508
Total assets	$	9,180	$	2,250	$	465	$	11,895
Capital expenditures	$	216	$	92	$	2	$	310



Nine Months Ended or as of September 30, 2021	UScellular		TDS Telecom		Corporate, Eliminations and Other		Total
(Dollars in millions)
Operating revenues
Service	$	2,333	$	751	$	72	$	3,156
Equipment and product sales	720		1		80		801
Total operating revenues	3,053		752		152		3,957
Cost of services (excluding Depreciation, amortization and accretion reported below)	594		301		55		950
Cost of equipment and products	786		—		66		852
Selling, general and administrative	984		216		32		1,232
Depreciation, amortization and accretion	510		147		13		670
(Gain) loss on asset disposals, net	15		2		—		17
(Gain) loss on sale of business and other exit costs, net	(1)		—		—		(1)

Operating income (loss)	165		87		(15)		237
Equity in earnings of unconsolidated entities	137		—		1		138
Interest and dividend income	5		1		3		9

Interest expense	(144)		3		(52)		(193)
Other, net	—		(1)		—		(1)
Income (loss) before income taxes	163		90		(63)		190
Income tax expense (benefit)	31		22		(15)		38
Net income (loss)	132		68		(48)		152
Add back:
Depreciation, amortization and accretion	510		147		13		670
(Gain) loss on asset disposals, net	15		2		—		17
(Gain) loss on sale of business and other exit costs, net	(1)		—		—		(1)


Interest expense	144		(3)		52		193
Income tax expense (benefit)	31		22		(15)		38
Adjusted EBITDA1	$	831	$	235	$	3	$	1,069

Capital expenditures	$	458	$	260	$	8	$	726



Nine Months Ended or as of September 30, 2020	UScellular		TDS Telecom		Corporate, Eliminations and Other		Total
(Dollars in millions)
Operating revenues
Service	$	2,290	$	727	$	71	$	3,088
Equipment and product sales	674		1		86		761
Total operating revenues	2,964		728		157		3,849
Cost of services (excluding Depreciation, amortization and accretion reported below)	580		287		52		919
Cost of equipment and products	692		1		72		765
Selling, general and administrative	994		200		33		1,227
Depreciation, amortization and accretion	516		152		17		685

(Gain) loss on asset disposals, net	14		1		—		15


Operating income (loss)	168		87		(17)		238
Equity in earnings of unconsolidated entities	137		—		1		138
Interest and dividend income	6		4		2		12
Gain (loss) on investments	3		—		—		3
Interest expense	(76)		3		(46)		(119)
Other, net	—		(1)		—		(1)
Income (loss) before income taxes	238		94		(61)		271
Income tax expense (benefit)	11		13		(7)		17
Net income (loss)	227		81		(54)		254
Add back:
Depreciation, amortization and accretion	516		152		17		685

(Gain) loss on asset disposals, net	14		1		—		15


Gain (loss) on investments	(3)		—		—		(3)
Interest expense	76		(3)		46		119
Income tax expense (benefit)	11		13		(7)		17
Adjusted EBITDA1	$	841	$	243	$	3	$	1,087

Capital expenditures	$	621	$	221	$	7	$	849

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.