Business Segment Information

3 Months Ended

Mar. 31, 2024

Segment Reporting [Abstract]

Business Segment Information

Note 10 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.

Financial data for TDS’ reportable segments for the three month periods ended, or as of March 31, 2024 and 2023, is as follows. See Note 1 — Basis of Presentation for additional information. 

Three Months Ended or as of March 31, 2024	UScellular		TDS Telecom		Corporate, Eliminations and Other		Total
(Dollars in millions)
Operating revenues
Service	$	754	$	266	$	24	$	1,044
Equipment and product sales	196		—		22		218
Total operating revenues	950		266		46		1,262
Cost of services (excluding Depreciation, amortization and accretion reported below)	182		98		18		298
Cost of equipment and products	216		—		17		233
Selling, general and administrative	331		75		18		424
Depreciation, amortization and accretion	165		65		4		234
(Gain) loss on asset disposals, net	6		2		(1)		7
(Gain) loss on license sales and exchanges, net	(1)		—		—		(1)
Operating income (loss)	51		27		(11)		67
Equity in earnings of unconsolidated entities	42		—		—		42
Interest and dividend income	2		1		2		5
Interest expense	(43)		2		(16)		(57)
Other, net	—		1		—		1
Income (loss) before income taxes	52		31		(25)		58
Income tax expense (benefit)	28		7		(15)		20
Net income (loss)	24		24		(10)		38
Add back:
Depreciation, amortization and accretion	165		65		4		234
Expenses related to strategic alternatives review	7		—		4		11
(Gain) loss on asset disposals, net	6		2		(1)		7
(Gain) loss on license sales and exchanges, net	(1)		—		—		(1)
Interest expense	43		(2)		16		57
Income tax expense (benefit)	28		7		(15)		20
Adjusted EBITDA1	$	272	$	95	$	(1)	$	366
Investments in unconsolidated entities	$	482	$	4	$	40	$	526
Total assets	$	10,704	$	2,892	$	270	$	13,866
Capital expenditures	$	131	$	87	$	1	$	219

Three Months Ended or as of March 31, 2023	UScellular		TDS Telecom		Corporate, Eliminations and Other		Total
(Dollars in millions)
Operating revenues
Service	$	767	$	253	$	23	$	1,043
Equipment and product sales	219		—		41		260
Total operating revenues	986		253		64		1,303
Cost of services (excluding Depreciation, amortization and accretion reported below)	182		104		19		305
Cost of equipment and products	253		—		34		287
Selling, general and administrative	345		80		14		439
Depreciation, amortization and accretion	170		59		3		232
(Gain) loss on asset disposals, net	10		1		—		11
Operating income (loss)	26		8		(5)		29
Equity in earnings of unconsolidated entities	44		—		—		44
Interest and dividend income	2		1		2		5
Interest expense	(47)		2		(8)		(53)
Income (loss) before income taxes	25		11		(11)		25
Income tax expense (benefit)	11		3		(1)		13
Net income (loss)	14		8		(10)		12
Add back:
Depreciation, amortization and accretion	170		59		3		232
(Gain) loss on asset disposals, net	10		1		—		11
Interest expense	47		(2)		8		53
Income tax expense	11		3		(1)		13
Adjusted EBITDA1	$	252	$	69	$	—	$	321
Investments in unconsolidated entities	$	477	$	4	$	38	$	519
Total assets	$	10,997	$	3,141	$	401	$	14,539
Capital expenditures	$	208	$	130	$	5	$	343

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 the 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 it provides 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.