Business Segment Information (Tables)

9 Months Ended

Sep. 30, 2022

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


Three Months Ended or as of September 30, 2022	UScellular		TDS Telecom		Corporate, Eliminations and Other		Total
(Dollars in millions)
Operating revenues
Service	$	781	$	256	$	24	$	1,061
Equipment and product sales	302		—		29		331
Total operating revenues	1,083		256		53		1,392
Cost of services (excluding Depreciation, amortization and accretion reported below)	197		109		20		326
Cost of equipment and products	354		—		23		377
Selling, general and administrative	369		81		12		462
Depreciation, amortization and accretion	177		53		4		234

(Gain) loss on asset disposals, net	1		3		—		4


Operating income (loss)	(15)		10		(6)		(11)
Equity in earnings of unconsolidated entities	40		—		—		40
Interest and dividend income	2		1		1		4

Interest expense	(42)		2		(6)		(46)

Income (loss) before income taxes	(15)		13		(11)		(13)
Income tax expense (benefit)	(3)		3		(3)		(3)
Net income (loss)	(12)		10		(8)		(10)
Add back:
Depreciation, amortization and accretion	177		53		4		234

(Gain) loss on asset disposals, net	1		3		—		4



Interest expense	42		(2)		6		46
Income tax expense (benefit)	(3)		3		(3)		(3)
Adjusted EBITDA1	$	205	$	66	$	—	$	271

Investments in unconsolidated entities	$	461	$	4	$	38	$	503
Total assets	$	11,056	$	2,949	$	474	$	14,479
Capital expenditures	$	136	$	166	$	3	$	305


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



Nine Months Ended or as of September 30, 2022	UScellular		TDS Telecom		Corporate, Eliminations and Other		Total
(Dollars in millions)
Operating revenues
Service	$	2,351	$	763	$	72	$	3,186
Equipment and product sales	769		1		100		870
Total operating revenues	3,120		763		173		4,056
Cost of services (excluding Depreciation, amortization and accretion reported below)	574		308		54		936
Cost of equipment and products	887		1		79		967
Selling, general and administrative	1,032		231		37		1,300
Depreciation, amortization and accretion	520		158		13		691
Loss on impairment of licenses	3		—		—		3
(Gain) loss on asset disposals, net	9		4		—		13
(Gain) loss on sale of business and other exit costs, net	(1)		—		—		(1)

Operating income (loss)	96		61		(10)		147
Equity in earnings of unconsolidated entities	122		—		1		123
Interest and dividend income	5		1		4		10

Interest expense	(115)		5		(8)		(118)
Other, net	—		1		—		1
Income (loss) before income taxes	108		68		(13)		163
Income tax expense (benefit)	46		18		(2)		62
Net income (loss)	62		51		(12)		101
Add back:
Depreciation, amortization and accretion	520		158		13		691
Loss on impairment of licenses	3		—		—		3
(Gain) loss on asset disposals, net	9		4		—		13
(Gain) loss on sale of business and other exit costs, net	(1)		—		—		(1)


Interest expense	115		(5)		8		118
Income tax expense (benefit)	46		18		(2)		62
Adjusted EBITDA1	$	754	$	226	$	7	$	987

Capital expenditures	$	541	$	391	$	6	$	938



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

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.