Business Segment Information

6 Months Ended

Jun. 30, 2022

Segment Reporting [Abstract]

Business Segment Information

Note 12 Business Segment Information

UScellular and TDS Telecom are billed for services they receive from TDS, consisting primarily of information processing, accounting, finance, and general management services. Such billings are based on expenses specifically identified to UScellular 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 UScellular and TDS Telecom are reflected in the accompanying business segment information on a basis that is representative of what they would have been if UScellular and TDS Telecom operated on a stand-alone basis.

Financial data for TDS’ reportable segments for the three and six month periods ended, or as of June 30, 2022 and 2021, is as follows. See Note 1 — Basis of Presentation for additional information. 

Three Months Ended or as of June 30, 2022	UScellular		TDS Telecom		Corporate, Eliminations and Other		Total
(Dollars in millions)
Operating revenues
Service	$	783	$	256	$	25	$	1,064
Equipment and product sales	244		—		41		285
Total operating revenues	1,027		256		66		1,349
Cost of services (excluding Depreciation, amortization and accretion reported below)	192		103		17		312
Cost of equipment and products	275		—		33		308
Selling, general and administrative	339		77		11		427
Depreciation, amortization and accretion	172		52		5		229
Loss on impairment of licenses	3		—		—		3
(Gain) loss on asset disposals, net	6		1		—		7
Operating income	40		23		—		63
Equity in earnings of unconsolidated entities	37		—		1		38
Interest and dividend income	3		—		2		5
Interest expense	(40)		2		(2)		(40)
Income before income taxes	40		25		1		66
Income tax expense	18		7		2		27
Net income (loss)	22		19		(2)		39
Add back:
Depreciation, amortization and accretion	172		52		5		229
Loss on impairment of licenses	3		—		—		3
(Gain) loss on asset disposals, net	6		1		—		7
Interest expense	40		(2)		2		40
Income tax expense	18		7		2		27
Adjusted EBITDA1	$	261	$	76	$	8	$	345
Investments in unconsolidated entities	$	441	$	4	$	38	$	483
Total assets	$	11,003	$	2,803	$	436	$	14,242
Capital expenditures	$	268	$	120	$	3	$	391

Three Months Ended or as of June 30, 2021	UScellular		TDS Telecom		Corporate, Eliminations and Other		Total
(Dollars in millions)
Operating revenues
Service	$	774	$	251	$	24	$	1,049
Equipment and product sales	240		—		22		262
Total operating revenues	1,014		252		45		1,311
Cost of services (excluding Depreciation, amortization and accretion reported below)	204		101		19		324
Cost of equipment and products	258		—		18		276
Selling, general and administrative	334		73		9		416
Depreciation, amortization and accretion	180		49		5		234
(Gain) loss on asset disposals, net	2		1		—		3
Operating income (loss)	36		28		(6)		58
Equity in earnings of unconsolidated entities	47		—		1		48
Interest and dividend income	2		—		1		3
Interest expense	(60)		1		(27)		(86)
Income (loss) before income taxes	25		29		(31)		23
Income tax expense (benefit)	(10)		7		(8)		(11)
Net income (loss)	35		22		(23)		34
Add back:
Depreciation, amortization and accretion	180		49		5		234
(Gain) loss on asset disposals, net	2		1		—		3
Interest expense	60		(1)		27		86
Income tax expense (benefit)	(10)		7		(8)		(11)
Adjusted EBITDA1	$	267	$	78	$	1	$	346
Investments in unconsolidated entities	$	445	$	4	$	38	$	487
Total assets	$	9,920	$	2,433	$	427	$	12,780
Capital expenditures	$	148	$	99	$	3	$	250

Six Months Ended or as of June 30, 2022	UScellular		TDS Telecom		Corporate, Eliminations and Other		Total
(Dollars in millions)
Operating revenues
Service	$	1,570	$	507	$	48	$	2,125
Equipment and product sales	467		1		71		539
Total operating revenues	2,037		507		120		2,664
Cost of services (excluding Depreciation, amortization and accretion reported below)	377		199		35		611
Cost of equipment and products	533		—		57		590
Selling, general and administrative	663		150		24		837
Depreciation, amortization and accretion	342		106		8		456
Loss on impairment of licenses	3		—		—		3
(Gain) loss on asset disposals, net	8		1		—		9
Operating income (loss)	111		51		(4)		158
Equity in earnings of unconsolidated entities	82		—		1		83
Interest and dividend income	4		—		3		7
Interest expense	(73)		4		(3)		(72)
Income (loss) before income taxes	124		56		(4)		176
Income tax expense	50		14		1		65
Net income (loss)	74		41		(4)		111
Add back:
Depreciation, amortization and accretion	342		106		8		456
Loss on impairment of licenses	3		—		—		3
(Gain) loss on asset disposals, net	8		1		—		9
Interest expense	73		(4)		3		72
Income tax expense	50		14		1		65
Adjusted EBITDA1	$	550	$	159	$	7	$	716
Capital expenditures	$	405	$	225	$	3	$	633

Six Months Ended or as of June 30, 2021	UScellular		TDS Telecom		Corporate, Eliminations and Other		Total
(Dollars in millions)
Operating revenues
Service	$	1,545	$	500	$	46	$	2,091
Equipment and product sales	492		1		45		538
Total operating revenues	2,037		501		91		2,629
Cost of services (excluding Depreciation, amortization and accretion reported below)	389		199		35		623
Cost of equipment and products	533		—		37		570
Selling, general and administrative	639		143		22		804
Depreciation, amortization and accretion	350		98		9		457
(Gain) loss on asset disposals, net	7		1		—		8
(Gain) loss on sale of business and other exit costs, net	(1)		—		—		(1)
Operating income (loss)	120		60		(12)		168
Equity in earnings of unconsolidated entities	88		—		2		90
Interest and dividend income	3		—		3		6
Interest expense	(97)		2		(43)		(138)
Other, net	—		—		(1)		(1)
Income (loss) before income taxes	114		62		(51)		125
Income tax expense (benefit)	17		15		(12)		20
Net income (loss)	97		46		(38)		105
Add back:
Depreciation, amortization and accretion	350		98		9		457
(Gain) loss on asset disposals, net	7		1		—		8
(Gain) loss on sale of business and other exit costs, net	(1)		—		—		(1)
Interest expense	97		(2)		43		138
Income tax expense (benefit)	17		15		(12)		20
Adjusted EBITDA1	$	567	$	158	$	2	$	727
Capital expenditures	$	273	$	169	$	4	$	446

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 segments' 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.