Technology

TDS reports fourth quarter and full year 2023 results

Published

11 months ago

February 16, 2024

Investing in our networks; Provides 2024 guidance

CHICAGO, Feb. 16, 2024 /PRNewswire/ —

As previously announced, TDS will hold a teleconference on February 16, 2024 at 9:00 a.m. CST. Listen to the call live via the Events & Presentations page of investors.tdsinc.com.

Telephone and Data Systems, Inc. (NYSE: TDS) reported total operating revenues of $1,313 million for the fourth quarter of 2023, versus $1,357 million for the same period one year ago. Net income (loss) attributable to TDS common shareholders and related diluted earnings (loss) per share were $(523) million and $(4.64), respectively, for the fourth quarter of 2023 compared to $(43) million and $(0.38), respectively, in the same period one year ago.

Excluding a $547 million ($511 million, net of tax impacts) non-cash charge related to goodwill impairment recorded at TDS Telecom during the fourth quarter of 2023, net income (loss) available to TDS common shareholders and related diluted earnings (loss) per share for the fourth quarter of 2023 were $(12) million and $(0.11), respectively.

TDS reported total operating revenues of $5,160 million and $5,413 million for the years ended 2023 and 2022, respectively. Net income (loss) attributable to TDS common shareholders and related diluted earnings (loss) per share were $(569) million and $(5.06), respectively, for the year ended 2023 compared to $(7) million and $(0.07), respectively, for the year ended 2022.

Excluding a $547 million ($511 million, net of tax impacts) non-cash charge related to goodwill impairment recorded at TDS Telecom during the fourth quarter of 2023, net income (loss) available to TDS common shareholders and related diluted earnings (loss) per share for the year ended 2023 were $(58) million and $(0.53), respectively.

Full year 2023 Highlights*

UScellular

Postpaid ARPU grew 2%Delivering on growth initiatives Fixed wireless customers grew 46% to 114,000Tower rental revenues grew 8% to $100 millionIncreased profitabilityNet income, Adjusted OIBDA and Adjusted EBITDA upGenerated positive free cash flow and increased cash flows from operating activities Began launching 5G mid-band network – providing low latency and faster speeds

TDS Telecom

Exceeded full year 2023 fiber address goalDelivered 217,000 fiber service addressesExecuting on fiber broadband strategyExpanded its footprint 12% – increased total service addresses to 1.7 millionResidential broadband connections grew 6% and Residential revenue per connection grew 4%Total Wireline expansion residential revenues grew to $75 million

*Comparisons are Year Ended December 31, 2023 to Year Ended December 31, 2022

“In 2023, the TDS Family of Companies continued to make substantial investments in our businesses in order to improve our competitiveness,” said LeRoy T. Carlson, Jr., TDS President and CEO. “UScellular made significant progress on its 5G network, while TDS Telecom ended the year with all of its fiber expansion communities initially launched.

“UScellular increased Postpaid ARPU 2% and drove strong results in fixed wireless in 2023. It was a challenging year from a mobility subscriber standpoint as the environment remains competitive. UScellular’s goal was to balance subscriber objectives with financial goals, which led to increased profitability year over year.

“In 2024, UScellular plans to continue focusing on improving customer results, growth in fixed wireless and towers, and maintaining financial discipline as we advance the network through mid-band deployment.

“In 2023, TDS Telecom delivered 217,000 marketable fiber service addresses, up 24% from the initial 2023 target. Residential broadband connections increased 6%, while residential revenue per connection grew 4%. With all markets launched, the team plans to focus on increasing broadband penetration and revenues across the fiber footprint. We expect this to result in improved profitability in 2024.”

Recent Development: On August 4, 2023, TDS and UScellular announced that the Boards of Directors of both companies decided to initiate a process to explore a range of strategic alternatives for UScellular. The process is still ongoing.

2024 Estimated Results

TDS’ current estimates of full-year 2024 results for UScellular and TDS Telecom are shown below. Such estimates represent management’s view as of February 16, 2024 and should not be assumed to be current as of any future date. TDS undertakes no duty to update such estimates, whether as a result of new information, future events, or otherwise. There can be no assurance that final results will not differ materially from estimated results.

UScellular

2024 Estimated
Results

Actual Results for

the Year Ended

December 31, 2023

(Dollars in millions)

Service revenues

$2,950-$3,050

$3,044

Adjusted OIBDA1, 2

$750-$850

$818

Adjusted EBITDA1, 2

$920-$1,020

$986

Capital expenditures

$550-$650

$611

TDS Telecom

2024 Estimated
Results

Actual Results for
the Year Ended
December 31, 2023

(Dollars in millions)

Total operating revenues

$1,070-$1,100

$1,028

Adjusted OIBDA1

$310-$340

$279

Adjusted EBITDA1

$310-$340

$285

Capital expenditures

$310-$340

$577

The following tables reconcile EBITDA, Adjusted EBITDA, and Adjusted OIBDA to the corresponding GAAP measures, Net income (loss) or Income (loss) before income taxes. In providing 2024 estimated results, TDS has not completed the below reconciliation to Net income (loss) because it does not provide guidance for income taxes. Although potentially significant, TDS believes that the impact of income taxes cannot be reasonably predicted; therefore, TDS is unable to provide such guidance.

UScellular

TDS Telecom

2024 Estimated
Results2

Actual Results for

the Year Ended

December 31, 2023

2024 Estimated
Results2

Actual Results for

the Year Ended

December 31, 2023

(Dollars in millions)

Net income (loss) (GAAP)

N/A

$58

N/A

($483)

Add back:

Income tax expense

N/A

(26)

Income (loss) before income taxes (GAAP)

$40-$140

$111

$40-$70

($509)

Add back:

Interest expense

195

196

—

(8)

Depreciation, amortization and accretion expense

665

656

270

245

EBITDA (Non-GAAP)1

$900-$1,000

$963

$310-$340

($272)

Add back or deduct:

Expenses related to strategic alternatives review

—

Loss on impairment of goodwill

—

547

(Gain) loss on asset disposals, net

—

(Gain) loss on license sales and exchanges, net

—

(2)

—

Adjusted EBITDA (Non-GAAP)1

$920-$1,020

$986

$310-$340

$285

Deduct:

Equity in earnings of unconsolidated entities

160

158

—

Interest and dividend income

—

Other, net

—

Adjusted OIBDA (Non-GAAP)1

$750-$850

$818

$310-$340

$279

Numbers may not foot due to rounding.

EBITDA, Adjusted EBITDA and Adjusted OIBDA are defined as net income adjusted for the items set forth in the reconciliation above. EBITDA, Adjusted EBITDA and Adjusted OIBDA are not measures of financial performance under Generally Accepted Accounting Principles in the United States (GAAP) and should not be considered as alternatives to Net income or Cash flows from operating activities, as indicators of cash flows or as measures of liquidity. TDS does not intend to imply that any such items set forth in the reconciliation above are infrequent or unusual; such items may occur in the future. Management uses Adjusted EBITDA and Adjusted OIBDA as measurements of profitability, and therefore reconciliations to Net income are deemed appropriate. Management believes Adjusted EBITDA and Adjusted OIBDA are useful measures of TDS’ operating results before significant recurring non-cash charges, nonrecurring expenses, 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. Adjusted EBITDA shows adjusted earnings before interest, taxes, depreciation, amortization and accretion, gains and losses, and expenses related to the strategic alternatives review of UScellular while Adjusted OIBDA reduces this measure further to exclude Equity in earnings of unconsolidated entities and Interest and dividend income in order to more effectively show the performance of operating activities excluding investment activities. The table above reconciles EBITDA, Adjusted EBITDA and Adjusted OIBDA to the corresponding GAAP measure, Net income (loss) or Income (loss) before income taxes. Additional information and reconciliations related to Non-GAAP financial measures for December 31, 2023, can be found on TDS’ website at investors.tdsinc.com.

2024 Estimated Results do not reflect any anticipated costs, expenses or results of the strategic alternatives review referenced above.

Conference Call Information
TDS will hold a conference call on February 16, 2024 at 9:00 a.m. Central Time.

Access the live call on the Events & Presentations page of investors.tdsinc.com or at https://events.q4inc.com/attendee/105947395Access the call by phone at (888) 330-2384 (US/Canada), passcode: 1328528

Before the call, certain financial and statistical information to be discussed during the call will be posted to investors.tdsinc.com. The call will be archived on the Events & Presentations page of investors.tdsinc.com.

About TDS
Telephone and Data Systems, Inc. (TDS), a Fortune 1000® company, provides wireless; broadband, video and voice; and hosted and managed services to approximately 6 million connections nationwide through its businesses, UScellular, TDS Telecom and OneNeck IT Solutions. Founded in 1969 and headquartered in Chicago, TDS employed 8,800 people as of December 31, 2023.

Visit investors.tdsinc.com for comprehensive financial information, including earnings releases, quarterly and annual filings, shareholder information and more.

Safe Harbor Statement Under the Private Securities Litigation Reform Act of 1995: All information set forth in this news release, except historical and factual information, represents forward-looking statements. This includes all statements about the company’s plans, beliefs, estimates, and expectations. These statements are based on current estimates, projections, and assumptions, which involve certain risks and uncertainties that could cause actual results to differ materially from those in the forward-looking statements. Important factors that may affect these forward-looking statements include, but are not limited to: whether any strategic alternatives for UScellular will be successfully identified or completed; whether any such strategic alternative will result in additional value for TDS or its shareholders and whether the process will have an adverse impact on TDS’ businesses; intense competition; the ability to obtain or maintain roaming arrangements with other carriers on acceptable terms and changes in roaming practices; the ability to obtain access to adequate radio spectrum to meet current or anticipated future needs, including participation in FCC auctions; the ability to attract people of outstanding talent throughout all levels of the organization; TDS’ smaller scale relative to larger competitors; changes in demand, consumer preferences and perceptions, price competition, or churn rates; advances in technology; impacts of costs, integration problems or other factors associated with acquisitions, divestitures or exchanges of properties or wireless spectrum licenses and/or expansion of TDS’ businesses; the ability of the company to successfully construct and manage its networks; difficulties involving third parties with which TDS does business; uncertainties in TDS’ future cash flows and liquidity and access to the capital markets; the ability to make payments on TDS and UScellular indebtedness or comply with the terms of debt covenants; the effect on TDS’ business if the collateral securing its secured term loan is foreclosed upon; conditions in the U.S. telecommunications industry; the value of assets and investments; the state and federal regulatory environment; pending and future litigation; cyber-attacks or other breaches of network or information technology security; control by the TDS Voting Trust; disruption in credit or other financial markets; deterioration of U.S. or global economic conditions; and the impact, duration and severity of public health emergencies. Investors are encouraged to consider these and other risks and uncertainties that are more fully described under “Risk Factors” in the most recent filing of TDS’ Form 10-K.

For more information about TDS and its subsidiaries, visit:
TDS: www.tdsinc.com
UScellular: www.uscellular.com
TDS Telecom: www.tdstelecom.com
OneNeck IT Solutions: www.oneneck.com

United States Cellular Corporation

Summary Operating Data (Unaudited)

As of or for the Quarter Ended

12/31/2023

9/30/2023

6/30/2023

3/31/2023

12/31/2022

Retail Connections

Postpaid

Total at end of period

4,106,000

4,159,000

4,194,000

4,223,000

4,247,000

Gross additions

129,000

128,000

125,000

137,000

154,000

Handsets

80,000

84,000

83,000

93,000

105,000

Connected devices

49,000

44,000

42,000

44,000

49,000

Net additions (losses)

(50,000)

(35,000)

(28,000)

(24,000)

(17,000)

Handsets

(53,000)

(38,000)

(29,000)

(25,000)

(20,000)

Connected devices

3,000

1,000

3,000

ARPU1

$ 51.61

$ 51.11

$ 50.64

$ 50.66

$ 50.60

ARPA2

$ 131.63

$ 130.91

$ 130.19

$ 130.77

$ 130.97

Handset upgrade rate3

5.8 %

4.5 %

4.8 %

4.9 %

7.0 %

Churn rate4

1.44 %

1.30 %

1.21 %

1.27 %

1.35 %

Handsets

1.22 %

1.11 %

1.01 %

1.06 %

1.12 %

Connected devices

3.03 %

2.64 %

2.65 %

2.78 %

2.99 %

Prepaid

Total at end of period

451,000

462,000

470,000

493,000

Gross additions

43,000

52,000

50,000

43,000

61,000

Net additions (losses)

(11,000)

—

(8,000)

(23,000)

—

ARPU1, 5

$ 32.32

$ 33.44

$ 33.86

$ 33.19

$ 33.34

Churn rate4

3.87 %

3.68 %

4.18 %

4.63 %

4.11 %

Market penetration at end of period

Consolidated operating population

32,350,000

32,370,000

Consolidated operating penetration6

15 %

Capital expenditures (millions)

$ 148

$ 111

$ 143

$ 208

$ 176

Total cell sites in service

7,000

6,973

6,952

6,950

6,945

Owned towers

4,373

4,356

4,341

4,338

4,336

Due to rounding, the sum of quarterly results may not equal the total for the year.

Average Revenue Per User (ARPU) – metric is calculated by dividing a revenue base by an average number of connections and by the number of months in the period. These revenue bases and connection populations are shown below:

Postpaid ARPU consists of total postpaid service revenues and postpaid connections.Prepaid ARPU consists of total prepaid service revenues and prepaid connections.

Average Revenue Per Account (ARPA) – metric is calculated by dividing total postpaid service revenues by the average number of postpaid accounts and by the number of months in the period.

Handset upgrade rate calculated as total handset upgrade transactions divided by average postpaid handset connections.

Churn rate represents the percentage of the connections that disconnect service each month. These rates represent the average monthly churn rate for each respective period.

Fourth quarter 2023 Prepaid ARPU excludes a $6 million reduction of prepaid revenue related to an adjustment to correct a prior period error recorded in the fourth quarter of 2023.

Market penetration is calculated by dividing the number of wireless connections at the end of the period by the total estimated population of consolidated operating markets.

TDS Telecom

Summary Operating Data (Unaudited)

As of or for the Quarter Ended

12/31/2023

9/30/2023

6/30/2023

3/31/2023

12/31/2022

Residential connections

Broadband

Wireline, Incumbent

244,800

248,800

249,200

247,900

249,100

Wireline, Expansion

92,200

79,400

70,200

62,800

56,100

Cable

202,900

204,400

204,200

204,700

204,800

Total Broadband

539,800

532,600

523,600

515,400

510,000

Video

131,500

132,400

132,300

132,600

135,300

Voice

281,600

284,000

288,200

289,200

291,600

Total Residential connections

952,900

949,000

944,100

937,200

936,900

Commercial connections

210,200

217,400

223,300

229,800

236,000

Total connections

1,163,100

1,166,400

1,167,400

1,167,000

1,173,000

Residential revenue per connection1

$ 62.74

$ 62.15

$ 61.97

$ 60.24

$ 59.91

Capital expenditures (millions)

$ 143

$ 172

$ 132

$ 130

$ 165

Numbers may not foot due to rounding.

Total residential revenue per connection is calculated by dividing total residential revenue by the average number of residential connections and by the number of months in the period.

Telephone and Data Systems, Inc.

Consolidated Statement of Operations Highlights

(Unaudited)

Three Months Ended

December 31,

Year Ended

December 31,

2023

2022

2023

vs. 2022

2023

2022

2023

vs. 2022

(Dollars and shares in millions, except per share amounts)

Operating revenues

UScellular

$ 1,000

$ 1,048

(5) %

$ 3,906

$ 4,169

(6) %

TDS Telecom

261

257

2 %

1,028

1,020

1 %

All Other1

(1) %

226

224

1 %

1,313

1,357

(3) %

5,160

5,413

(5) %

Operating expenses

UScellular

Expenses excluding depreciation, amortization and accretion

812

885

(8) %

3,096

3,379

(8) %

Depreciation, amortization and accretion

166

179

(8) %

656

700

(6) %

Loss on impairment of licenses

—

N/M

(Gain) loss on asset disposals, net

(67) %

(9) %

(Gain) loss on sale of business and other exit costs, net

—

N/M

—

(1)

N/M

(Gain) loss on license sales and exchanges, net

(2)

—

N/M

(2)

—

N/M

979

1,075

(9) %

3,767

4,100

(8) %

TDS Telecom

Expenses excluding depreciation, amortization and accretion

186

192

(4) %

749

732

2 %

Depreciation, amortization and accretion

17 %

245

215

14 %

Loss on impairment of goodwill

547

—

N/M

547

—

N/M

(Gain) loss on asset disposals, net

(59) %

31 %

799

252

N/M

1,551

954

63 %

All Other1

Expenses excluding depreciation and amortization

8 %

242

222

9 %

Depreciation and amortization

(6) %

(2) %

(Gain) loss on asset disposals, net

—

N/M

—

(95) %

7 %

256

237

8 %

Total operating expenses

1,837

1,383

33 %

5,574

5,291

5 %

Operating income (loss)

UScellular

(27)

N/M

139

N/M

TDS Telecom

(538)

N/M

(523)

N/M

All Other1

(7)

(4)

N/M

(30)

(13)

N/M

(524)

(26)

N/M

(414)

122

N/M

Investment and other income (expense)

Equity in earnings of unconsolidated entities

4 %

159

–

Interest and dividend income

(41) %

19 %

Interest expense

(66)

(55)

(20) %

(244)

(174)

(40) %

Other, net

—

N/M

94 %

Total investment and other income (expense)

(24)

(12)

(96) %

(63)

N/M

Income (loss) before income taxes

(548)

(38)

N/M

(477)

125

N/M

Income tax expense (benefit)

(45)

(8)

N/M

(81) %

Net income (loss)

(503)

(30)

N/M

(487)

N/M

Less: Net income (loss) attributable to noncontrolling interests, net of tax

(4)

N/M

28 %

Net income (loss) attributable to TDS shareholders

(506)

(26)

N/M

(500)

N/M

TDS Preferred Share dividends

—

–

Net loss attributable to TDS common shareholders

$ (523)

$ (43)

N/M

$ (569)

$ (7)

N/M

Basic weighted average shares outstanding

113

–

113

114

(1) %

Basic earnings (loss) per share attributable to TDS common shareholders

$ (4.64)

$ (0.38)

N/M

$ (5.05)

$ (0.07)

N/M

Diluted weighted average shares outstanding

113

–

113

114

(1) %

Diluted earnings (loss) per share attributable to TDS common shareholders

$ (4.64)

$ (0.38)

N/M

$ (5.06)

$ (0.07)

N/M

N/M – Percentage change not meaningful.

Numbers may not foot due to rounding.

Consists of TDS corporate, intercompany eliminations and other business operations not included in UScellular and TDS Telecom segments.

Telephone and Data Systems, Inc.

Consolidated Statement of Cash Flows

(Unaudited)

Year Ended December 31,

2023

2022

(Dollars in millions)

Cash flows from operating activities

Net income (loss)

$ (487)

$ 72

Add (deduct) adjustments to reconcile net income (loss) to net cash flows from operating activities

Depreciation, amortization and accretion

915

929

Bad debts expense

111

138

Stock-based compensation expense

Deferred income taxes, net

Equity in earnings of unconsolidated entities

(159)

Distributions from unconsolidated entities

150

145

Loss on impairment of intangible assets

547

(Gain) loss on asset disposals, net

(Gain) loss on sale of business and other exit costs, net

—

(1)

(Gain) loss on license sales and exchanges, net

(2)

—

Other operating activities

Changes in assets and liabilities from operations

Accounts receivable

(69)

Equipment installment plans receivable

(20)

(199)

Inventory

(90)

Accounts payable

(99)

Customer deposits and deferred revenues

(8)

Accrued taxes

127

Other assets and liabilities

(3)

Net cash provided by operating activities

1,142

1,155

Cash flows from investing activities

Cash paid for additions to property, plant and equipment

(1,211)

(1,161)

Cash paid for licenses and other intangible assets

(130)

(614)

Other investing activities

(8)

Net cash used in investing activities

(1,327)

(1,783)

Cash flows from financing activities

Issuance of long-term debt

1,081

1,154

Repayment of long-term debt

(723)

(332)

Issuance of short-term debt

—

110

Repayment of short-term debt

(60)

(50)

TDS Common Shares reissued for benefit plans, net of tax payments

(3)

(4)

UScellular Common Shares reissued for benefit plans, net of tax payments

(6)

(5)

Repurchase of TDS Common Shares

(6)

(40)

Repurchase of UScellular Common Shares

—

(43)

Dividends paid to TDS shareholders

(153)

(151)

Payment of debt and equity issuance costs

(5)

(2)

Distributions to noncontrolling interests

(3)

Cash paid for software license agreements

(66)

(23)

Other financing activities

—

Net cash provided by financing activities

613

Net decrease in cash, cash equivalents and restricted cash

(129)

(15)

Cash, cash equivalents and restricted cash

Beginning of period

399

414

End of period

$ 270

$ 399

Telephone and Data Systems, Inc.

Consolidated Balance Sheet Highlights

(Unaudited)

ASSETS

December 31,

2023

2022

(Dollars in millions)

Current assets

Cash and cash equivalents

$ 236

$ 360

Accounts receivable, net

1,074

1,181

Inventory, net

208

268

Prepaid expenses

102

Income taxes receivable

Other current assets

Total current assets

1,660

2,028

Assets held for sale

Licenses

4,702

4,699

Goodwill

—

547

Other intangible assets, net

183

204

Investments in unconsolidated entities

505

495

Property, plant andequipment, net

5,062

4,760

Operating lease right-of-use assets

987

995

Other assets and deferred charges

807

796

Total assets

$ 13,921

$ 14,550

Telephone and Data Systems, Inc.

Consolidated Balance Sheet Highlights

(Unaudited)

LIABILITIES AND EQUITY

December 31,

2023

2022

(Dollars in millions, except per share amounts)

Current liabilities

Current portion of long-term debt

$ 26

$ 19

Accounts payable

360

506

Customer deposits and deferred revenues

277

285

Accrued interest

Accrued taxes

Accrued compensation

149

144

Short-term operating lease liabilities

147

146

Other current liabilities

170

356

Total current liabilities

1,184

1,514

Deferred liabilities and credits

Deferred income tax liability, net

975

969

Long-term operating lease liabilities

890

908

Other deferred liabilities and credits

784

813

Long-term debt, net

4,080

3,731

Noncontrolling interests with redemption features

Equity

TDS shareholders’ equity

Series A Common and Common Shares, par value $0.01 per share

Capital in excess of par value

2,558

2,551

Preferred Shares, par value $0.01 per share

1,074

Treasury shares, at cost

(465)

(481)

Accumulated other comprehensive income

Retained earnings

2,023

2,699

Total TDS shareholders’ equity

5,202

5,849

Noncontrolling interests

794

754

Total equity

5,996

6,603

Total liabilities and equity

$ 13,921

$ 14,550

Balance Sheet Highlights

(Unaudited)

December 31, 2023

UScellular

TDS

Telecom

TDS Corporate

& Other

Intercompany

Eliminations

TDS

Consolidated

(Dollars in millions)

Cash and cash equivalents

$ 150

$ 37

$ 90

$ (41)

$ 236

Licenses and other intangible assets

$ 4,693

$ 187

$ 5

$ —

$ 4,885

Investment in unconsolidated entities

461

(8)

505

$ 5,154

$ 191

$ 53

$ (8)

$ 5,390

Property, plant and equipment, net

$ 2,576

$ 2,402

$ 84

$ —

$ 5,062

Long-term debt, net:

Current portion

$ 20

$ —

$ 6

$ —

$ 26

Non-current portion

3,044

1,033

—

4,080

$ 3,064

$ 3

$ 1,039

$ —

$ 4,106

TDS Telecom Highlights

(Unaudited)

Three Months Ended

December 31,

Year Ended

December 31,

2023

2022

2023 vs. 2022

2023

2022

2023 vs. 2022

(Dollars in millions)

Operating revenues

Residential

Wireline, Incumbent

$ 88

$ 87

1 %

$ 352

$ 350

1 %

Wireline, Expansion

61 %

53 %

Cable

2 %

273

270

1 %

Total residential

179

168

6 %

700

669

5 %

Commercial

(13) %

155

173

(10) %

Wholesale

(1) %

172

177

(3) %

Total service revenues

261

256

2 %

1,027

1,019

1 %

Equipment revenues

—

(22) %

(12) %

Total operating revenues

261

257

2 %

1,028

1,020

1 %

Cost of services

104

110

(5) %

423

418

1 %

Cost of equipment and products

—

N/M

—

(26) %

Selling, general and administrative expenses

(1) %

326

313

4 %

Depreciation, amortization and accretion

17 %

245

215

14 %

Loss on impairment of goodwill

547

—

N/M

547

—

N/M

(Gain) loss on asset disposals, net

(59) %

31 %

Total operating expenses

799

252

N/M

1,551

954

63 %

Operating income (loss)

$ (538)

$ 5

N/M

$ (523)

$ 66

N/M

N/M – Percentage change not meaningful.

Numbers may not foot due to rounding.

Telephone and Data Systems, Inc.

Financial Measures and Reconciliations

Free Cash Flow

Three Months Ended

December 31,

Year Ended

December 31,

TDS Consolidated

2023

2022

2023

2022

(Dollars in millions)

Cash flows from operating activities (GAAP)

$ 218

$ 255

$ 1,142

$ 1,155

Cash paid for additions to property, plant and equipment

(304)

(367)

(1,211)

(1,161)

Cash paid for software license agreements

(37)

(18)

(66)

(23)

Free cash flow (Non-GAAP)1

$ (123)

$ (130)

$ (135)

$ (29)

Three Months Ended

December 31,

Year Ended

December 31,

UScellular

2023

2022

2023

2022

(Dollars in millions)

Cash flows from operating activities (GAAP)

$ 148

$ 180

$ 866

$ 832

Cash paid for additions to property, plant and equipment

(155)

(192)

(608)

(602)

Cash paid for software license agreements

(37)

(17)

(66)

(22)

Free cash flow (Non-GAAP)1

$ (44)

$ (29)

$ 192

$ 208

Free cash flow is a non-GAAP financial measure which TDS believes may be useful to investors and other users of its financial information in evaluating liquidity, specifically, the amount of net cash generated by business operations after deducting Cash paid for additions to property, plant and equipment and Cash paid for software license agreements.

EBITDA, Adjusted EBITDA and Adjusted OIBDA

The following table reconciles EBITDA, Adjusted EBITDA and Adjusted OIBDA to the corresponding GAAP measures, Net income and Income before income taxes.

Year Ended December 31,

UScellular

2023

2022

(Dollars in millions)

Net income (GAAP)

$ 58

$ 35

Add back or deduct:

Income tax benefit

Income before income taxes (GAAP)

111

Add back:

Interest expense

196

163

Depreciation, amortization and accretion expense

656

700

EBITDA (Non-GAAP)

963

935

Add back or deduct:

Expenses related to strategic alternatives review

—

Loss on impairment of licenses

—

(Gain) loss on asset disposals, net

(Gain) loss on sale of business and other exit costs, net

—

(1)

(Gain) loss on license sales and exchanges, net

(2)

—

Adjusted EBITDA (Non-GAAP)

986

956

Deduct:

Equity in earnings of unconsolidated entities

158

Interest and dividend income

Adjusted OIBDA (Non-GAAP)

$ 818

$ 790

Net income excluding Goodwill impairment charge

The following non-GAAP financial measures present certain information in the table below excluding the effect of the goodwill impairment charge at TDS Telecom and related tax impacts. The goodwill impairment charge, which occurred in the fourth quarter of 2023, is being excluded in this presentation, as it is not related to the current operations of TDS. TDS believes these measures may be useful to investors and other users of its financial information when comparing the current period financial results with periods that were not impacted by such a charge.

Three Months Ended

December 31,

Year Ended

December 31,

2023

2022

2023

2022

(Dollars in millions)

Net loss attributable to TDS common shareholders (GAAP)

$ (523)

$ (43)

$ (569)

$ (7)

Adjustments:

Loss on impairment of goodwill

547

—

547

—

Deferred tax benefit on the tax-amortizable portion of the impaired Goodwill

(36)

—

(36)

—

Subtotal of Non-GAAP adjustments

511

—

511

—

Net loss attributable to TDS common shareholders excluding goodwill impairment
charge (Non-GAAP)

(12)

(43)

(58)

(7)

Noncontrolling interest adjustment to compute earnings (loss)

—

(1)

Net loss attributable to TDS common shareholders excluding goodwill impairment
charge used in diluted earnings (loss) per share (Non-GAAP)

$ (12)

$ (43)

$ (59)

$ (8)

Diluted weighted average shares outstanding

113

114

Diluted earnings (loss) per share attributable to TDS common shareholders (GAAP)

$ (4.64)

$ (0.38)

$ (5.06)

$ (0.07)

Adjustments:

Loss on impairment of goodwill

4.85

—

4.85

—

Deferred tax benefit on the tax-amortizable portion of the impaired Goodwill

(0.32)

—

(0.32)

—

Diluted earnings (loss) per share attributable to TDS common shareholders excluding
impairment of goodwill charge (Non-GAAP)

$ (0.11)

$ (0.38)

$ (0.53)

$ (0.07)

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SOURCE Telephone and Data Systems, Inc.

Technology

Global Cloud Industry Outlook worth $1,256.8 billion by 2025- Exclusive Report by MarketsandMarkets™

Published

52 minutes ago

January 15, 2025

DELRAY BEACH, Fla., Jan. 15, 2025 /PRNewswire/ — According to a research report “Global Cloud Industry Outlook 2025: A Preview of the Future of Cloud Innovation” published by MarketsandMarkets, the global cloud industry will grow from USD 1,091.4 billion in 2024 to USD 1,256.8 billion by 2025 at a YoY increase of 15.1%.

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Cloud Service Providers’ (CSPs’) focus on multi-cloud and hybrid strategies primarily drives the cloud industry in 2025. Looking ahead, the cloud landscape is set for a transformative shift, characterized by the widespread adoption of generative AI, increased competition, and heightened demand for industry-specific solutions.

Cloud developments in 2024 and upcoming predictions in 2025

The cloud market is set for continued growth, driven by increasing adoption in emerging economies and expanding cloud implementations by BFSI firms through both organic and inorganic initiatives. More organizations are turning to multi-cloud and hybrid strategies to boost flexibility and resilience. Meanwhile, the integration of Generative AI with cloud platforms is driving new innovations in services and applications, as competition among Cloud Service Providers (CSPs) heats up, resulting in more specialized and competitive offerings. As cybersecurity risks in the cloud grow, security and compliance will become top priorities. The demand for industry-specific cloud solutions will rise, with retail expected to see the highest growth in the coming years. This growth is reflected in the IT services spending, projected to rise from $1.59 trillion in 2024 to $1.74 trillion in 2025, highlighting the increasing demand for cloud-based solutions across industries. Cloud-native technologies like containers will play a critical role, and managing complex hybrid infrastructures remains a key challenge for CSPs striving for seamless operations.

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Top Key Companies in Global Cloud Industry Outlook:

AWS, Microsoft, Google, Salesforce, and IBM are the major players in cloud industry, with a 35.1% combined market share in 2023. Other prominent market players are Oracle, SAP, Alibaba Cloud, Adobe and Tencent Cloud. In 2024, key CSPs strive to maintain their cloud leadership positions with new product launches and product enhancements, Gen AI advancements, and strategic deals, partnerships and collaborations. In 2025, cloud providers will continue investments in advanced security and sovereign cloud, hike cloud service prices, launch cloud regions in unexplored countries, and focus on industry-specific cloud offerings.

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North America leads the Cloud Industry, and Asia Pacific experiences the highest YoY growth.

North America dominates the cloud market, as most major CSPs are headquartered in the United States; they are driving the continued adoption of cloud AI, analytics, and digitalization across sectors ranging from healthcare and finance to retail. Europe remains stable in its growth due to market demand for compliance, security, and regulatory solutions that the cloud provides, as well as governmental digital initiatives. Asia Pacific sees the highest year-over-year growth, driven by rapid digitalization, cloud migration in emerging markets, and robust government support. The Middle East and Africa are experiencing significant growth, particularly in the energy and government sectors. Latin America is expanding due to rising demand for cloud services in e-commerce, education, and digital services.

Browse Adjacent Markets: Cloud Computing Market Research Reports & Consulting

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Cloud AI Market– Global Forecast to 2029

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Technology

Purina Awards $125,000 to Five U.S.-Based Pet Startups through 2025 Pet Care Innovation Prize

Published

52 minutes ago

January 15, 2025

Winning startups across the pet industry – from veterinary care to treats and e-commerce – will compete for an additional $25,000 Grand Prize in March

ST. LOUIS, Jan. 15, 2025 /PRNewswire/ — Today, five pet care startups from across the country have been named finalists in the ninth annual Pet Care Innovation Prize powered by Purina. Each finalist – which represent startups across the entire pet care spectrum – will receive $25,000 and mentorship support from Purina, a global leader in pet care, as the startups work to scale their businesses in the growing $324.19 billion* global pet care industry.

The 2025 Pet Care Innovation Prize Winners were selected from nearly 150 applicants from around the world. This year’s winners are:

VEA: Based in Alexandria, Va., VEA is an AI-driven platform designed to predict disease, generate diagnostic plans and support nutrition for longevity. VEA also aims to solve workflow and documentation challenges for clinical staff, reducing the number of clicks it takes to complete exams and enabling veterinary teams to focus more on patient care.Maven: New York-based Maven is the first vet-recommended health sensor capable of continuously monitoring pets’ well-being and identifying early, clinically relevant changes. With these insights, pet owners and clinic teams can diagnose issues sooner and treat more effectively, helping pets live healthier, happier lives.Ten Lives: San Francisco-based Ten Lives produces the cleanest animal proteins for cats. Using microbes to convert sugar to protein, Ten Lives develops the same proteins naturally found in prey such as rabbit, fish and lamb, made without animals in human-grade precision fermentation facilities.ShopDot Pet: Based in Missoula, Mont., ShopDot Pet is a platform that allows neighborhood pet care providers such as groomers, trainers and vets to generate additional revenue by easily selling pet essentials without the heavy costs of inventory or shipping. ShopDot Pet enables pet service businesses and great pet brands to collaborate and sell more together.Yak9 Chews: Based in Austin, Tex., Yak9 Chews is an award-winning premium pet brand dedicated to crafting all-natural, long-lasting cheese chews for dogs, made from simple, real and ethically sourced ingredients.

In addition to the $25,000 in non-dilutive prize money, each of the five startup winners also receives mentorship from the Pet Care Innovation team at Purina and Active Capital, as well as the opportunity to participate in an accelerator boot camp at Purina’s headquarters in St. Louis, MO, which features sessions with Purina’s top pet experts and influential voices across the pet care industry.

“At Purina, our commitment to enriching the lives of pets and their people is strengthened through collaboration with innovative startups, such as the incredible cohort of this year’s Pet Care Innovation Prize finalists,” said Patrick Mullen, co-lead of Purina’s 9 Square Ventures group and vice president of strategic planning at Purina. “These passionate pet care entrepreneurs are tackling challenges in a variety of areas that all have the opportunity to help pets and those who are passionate about them thrive. We are excited to partner with these companies to foster their growth and success in the continuously growing and competitive pet care landscape.”

The five finalists will compete for an additional $25,000 grand prize this March at a pitch competition at Global Pet Expo, an annual trade show presented by the American Pet Products Association and the Pet Industry Distributors Association, where each startup will present to Purina executives, industry influencers and investors.

Purina, through its 9 Square Ventures corporate venturing group, partnered with investing leaders at Active Capital to create the Pet Care Innovation Prize in 2016. The effort provides financial support and mentorship opportunities for early-stage companies that are defining the future of pet care through novel products or services that provide meaningful solutions in the areas of pet health and wellness, services, technology, food, treats and litter.

9 Square Ventures leverages Purina’s knowledge, experience, and financial resources to help emerging pet care startups scale their businesses and make a positive impact on the lives of as many pets and their owners as possible. The group has been steadily investing millions of dollars in a diverse set of early-stage pet care startups since it was founded in 2014.

For more information about the Pet Care Innovation Prize powered by Purina, visit https://petcareinnovation.net.

*From Precedence Research

About Purina
Nestlé Purina PetCare creates richer lives for pets and the people who love them. Founded in 1894, Purina has helped dogs and cats live longer, healthier lives by offering scientifically based nutritional innovations.

Purina manufactures some of the world’s most trusted and popular pet care products, including Purina ONE, Pro Plan, Friskies and Tidy Cats. Our more than 11,000 U.S. associates take pride in our trusted pet food, treat and litter brands that feed 46 million dogs and 68 million cats every year. Nearly 500 Purina scientists, veterinarians, and pet care experts ensure our commitment to unsurpassed quality and nutrition.

Over the past five years, Purina has contributed more than $150 million towards organizations that bring, and keep, people and pets together, as well as those that help our communities and environment thrive. Purina is part of Nestlé, a global leader in Nutrition, Health and Wellness. For more information, visit purina.com or subscribe here to get the latest Purina news.

About Active Capital:
Active Capital is a St. Louis-based impact investing leader, helping startups and investors come together to grow innovative products and initiatives. Active Capital manages the Pet Care Innovation Prize.

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SOURCE Nestle Purina PetCare

Technology

East Baton Rouge Parish Becomes INdigital’s First NGCS Customer in Louisiana

Published

52 minutes ago

January 15, 2025

BATON ROUGE, La. and FORT WAYNE, Ind., Jan. 15, 2025 /PRNewswire/ — INdigital, a leading provider of advanced 911 solutions, is proud to announce that East Baton Rouge Parish has become the company’s first Next-Generation Core Services (NGCS) customer in Louisiana. This milestone underscores INdigital’s commitment to delivering innovative and reliable emergency communication solutions across the state.

East Baton Rouge Parish Communications District’s decision to select INdigital as their NGCS provider was driven by INdigital’s proven track record of delivering reliable and innovative communication solutions. “INdigital stood out with its advanced technology and infrastructure, which align with our vision for a modernized 911 communication system that can efficiently handle our community’s increasing demands,” said Jim Verlander East Baton Rouge Parish Communication District Director.

Next-Generation Core Services transform traditional 911 systems by enabling advanced features such as multimedia communication, enhanced location accuracy, and seamless interoperability. These innovations are designed to better serve residents and first responders during critical situations.

“This partnership with East Baton Rouge Parish reinforces our commitment to helping public safety answering points (PSAPs) stay at the forefront of 911 technology,” said Eric Hartman, Executive Vice President at INdigital. “By embracing NGCS, East Baton Rouge is ensuring their community benefits from faster, more accurate, and more resilient emergency communications.”

Looking ahead, the NGCS project is expected to shape the future of emergency communications across Louisiana. “We envision a seamless network that enhances real-time information sharing, swiftly and efficiently enabling access to critical data across jurisdictional lines. This will not only improve response times during emergencies but also facilitate better coordination among first responder agencies,” said Verlander. “As we move forward, the innovative technologies of Next Generation Core Services will undoubtedly shape a safer and more connected future for all Louisianans.”

INdigital’s expansion into Louisiana’s NGCS market marks a significant growth milestone. With existing partnerships in the state, this latest collaboration showcases INdigital’s ability to adapt its state-of-the-art solutions to meet local needs while maintaining a national standard of excellence.

For more information about INdigital and its services, visit indigital.net.

About INdigital
INdigital is a leading provider of 911 solutions, dedicated to improving public safety through innovative technology. With a focus on delivering reliable, scalable, and advanced communication systems, INdigital supports emergency service agencies across the country in their mission to save lives.

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SOURCE INdigital