Document And Entity Information
Document And Entity Information | 3 Months Ended |
Mar. 31, 2019shares | |
Entity Registrant Name | TELEPHONE & DATA SYSTEMS INC /DE/ |
Entity Central Index Key | 0001051512 |
Document Type | 10-Q |
Document Period End Date | Mar. 31, 2019 |
Amendment Flag | false |
Current Fiscal Year End Date | --12-31 |
Entity Filer Category | Large Accelerated Filer |
Emerging Growth Company | false |
Smaller Reporting Company | false |
Document Fiscal Year Focus | 2019 |
Document Fiscal Period Focus | Q1 |
Trading Symbol | TDS |
Common Shares | |
Entity Common Stock, Shares Outstanding | 106,775,800 |
Series A Common Shares | |
Entity Common Stock, Shares Outstanding | 7,286,300 |
Consolidated Statement of Opera
Consolidated Statement of Operations - USD ($) shares in Millions, $ in Millions | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Operating revenues | ||
Total operating revenues | $ 1,257 | $ 1,225 |
Operating expenses | ||
Selling, general and administrative | 397 | 395 |
Depreciation, amortization and accretion | 227 | 221 |
(Gain) loss on asset disposals, net | (5) | 2 |
(Gain) loss on sale of business and other exit costs, net | (2) | 0 |
(Gain) loss on license sales and exchanges, net | (2) | (7) |
Total operating expenses | 1,163 | 1,145 |
Operating income | 94 | 80 |
Investment and other income (expense) | ||
Equity in earnings of unconsolidated entities | 44 | 38 |
Interest and dividend income | 9 | 5 |
Interest expense | (43) | (43) |
Other, net | 0 | 1 |
Total investment and other income | 10 | 1 |
Income before income taxes | 104 | 81 |
Income tax expense | 34 | 24 |
Net income | 70 | 57 |
Less: Net income attributable to noncontrolling interests, net of tax | 11 | 18 |
Net income attributable to TDS shareholders | $ 59 | $ 39 |
Basic weighted average shares outstanding (in shares) | 114 | 111 |
Basic earnings per share attributable to TDS shareholders (in dollars per share) | $ 0.52 | $ 0.35 |
Diluted weighted average shares outstanding (in shares) | 116 | 113 |
Diluted earnings per share attributable to TDS shareholders (in dollars per share) | $ 0.50 | $ 0.34 |
Service | ||
Operating revenues | ||
Total operating revenues | $ 995 | $ 978 |
Operating expenses | ||
Cost of goods and services | 284 | 288 |
Equipment and product sales | ||
Operating revenues | ||
Total operating revenues | 262 | 247 |
Operating expenses | ||
Cost of goods and services | $ 264 | $ 246 |
Consolidated Statement of Compr
Consolidated Statement of Comprehensive Income - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Statement of Comprehensive Income [Abstract] | ||
Net income | $ 70 | $ 57 |
Change related to retirement plan Amounts included in net periodic benefit cost for the period | ||
Amortization of prior service cost | 0 | (1) |
Comprehensive income | 70 | 56 |
Less: Net income attributable to noncontrolling interests, net of tax | 11 | 18 |
Comprehensive income attributable to TDS shareholders | $ 59 | $ 38 |
Consolidated Statement of Cash
Consolidated Statement of Cash Flows - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Cash flows from operating activities | ||
Net income | $ 70 | $ 57 |
Add (deduct) adjustments to reconcile net income to net cash flows from operating activities | ||
Depreciation, amortization and accretion | 227 | 221 |
Bad debts expense | 25 | 20 |
Stock-based compensation expense | 13 | 10 |
Deferred income taxes, net | 25 | 26 |
Equity in earnings of unconsolidated entities | (44) | (38) |
Distributions from unconsolidated entities | 19 | 17 |
(Gain) loss on asset disposals, net | (5) | 2 |
(Gain) loss on sale of business and other exit costs, net | (2) | 0 |
(Gain) loss on license sales and exchanges, net | (2) | (7) |
Noncash interest | 1 | 1 |
Changes in assets and liabilities from operations | ||
Accounts receivable | 28 | 77 |
Equipment installment plans receivable | (10) | (17) |
Inventory | (15) | (8) |
Accounts payable | 46 | (32) |
Customer deposits and deferred revenues | 5 | (28) |
Accrued taxes | 9 | (24) |
Accrued interest | 11 | 11 |
Other assets and liabilities | (74) | (74) |
Net cash provided by operating activities | 327 | 214 |
Cash flows from investing activities | ||
Cash paid for additions to property, plant and equipment | (155) | (131) |
Cash paid for acquisitions and licenses | (1) | (9) |
Cash received from investments | 2 | 100 |
Cash paid for investments | (1) | 0 |
Cash received from divestitures and exchanges | 31 | 4 |
Advance payments for license acquisitions | 135 | 0 |
Net cash used in investing activities | (259) | (36) |
Cash flows from financing activities | ||
Repayment of long-term debt | (5) | (5) |
TDS Common Shares reissued for benefit plans, net of tax payments | (3) | |
TDS Common Shares reissued for benefit plans, net of tax payments | 9 | |
U.S. Cellular Common Shares reissued for benefit plans, net of tax payments | (1) | |
U.S. Cellular Common Shares reissued for benefit plans, net of tax payments | 2 | |
Dividends paid to TDS shareholders | (19) | (18) |
Distributions to noncontrolling interests | (1) | 0 |
Other financing activities | 0 | (5) |
Net cash used in financing activities | (29) | (17) |
Net increase in cash, cash equivalents and restricted cash | 39 | 161 |
Cash, cash equivalents and restricted cash | ||
Beginning of period | 927 | 622 |
End of period | $ 966 | $ 783 |
Consolidated Balance Sheet
Consolidated Balance Sheet - USD ($) $ in Millions | Mar. 31, 2019 | Dec. 31, 2018 | |
Current assets | |||
Cash and cash equivalents | $ 959 | $ 921 | |
Short-term investments | 17 | 17 | |
Accounts receivable | |||
Customers and agents, less allowances of $70 and $71, respectively | 968 | 992 | |
Other, less allowances of $2 and $2, respectively | 99 | 107 | |
Inventory, net | 165 | 150 | |
Prepaid expenses | 91 | 103 | |
Income taxes receivable | 8 | 12 | |
Other current assets | 28 | 28 | |
Total current assets | 2,335 | 2,330 | |
Assets held for sale | 0 | 54 | |
Licenses | 2,222 | 2,195 | |
Goodwill | 509 | 509 | |
Other intangible assets, net of accumulated amortization of $174 and $168, respectively | 247 | 253 | |
Investments in unconsolidated entities | 507 | 480 | |
Property, plant and equipment | |||
In service and under construction | 12,189 | 12,074 | |
Less: Accumulated depreciation and amortization | 8,907 | 8,728 | |
Property, plant and equipment, net | 3,282 | 3,346 | |
Operating lease right-of-use assets | 965 | 0 | |
Other assets and deferred charges | 720 | 616 | |
Total assets | [1] | 10,787 | 9,783 |
Current liabilities | |||
Current portion of long-term debt | 21 | 21 | |
Accounts payable | 400 | 365 | |
Customer deposits and deferred revenues | 203 | 197 | |
Accrued interest | 22 | 11 | |
Accrued taxes | 44 | 44 | |
Accrued compensation | 73 | 127 | |
Short-term operating lease liabilities | 110 | 0 | |
Other current liabilities | 92 | 114 | |
Total current liabilities | 965 | 879 | |
Liabilities held for sale | 0 | 1 | |
Deferred liabilities and credits | |||
Deferred income tax liability, net | 665 | 640 | |
Long-term operating lease liabilities | 929 | 0 | |
Other deferred liabilities and credits | 446 | 541 | |
Long-term debt, net | 2,414 | 2,418 | |
Commitments and contingencies | |||
Noncontrolling interests with redemption features | 11 | 11 | |
TDS shareholders’ equity | |||
Series A Common and Common Shares Authorized 290 shares (25 Series A Common and 265 Common Shares) Issued 133 shares (7 Series A Common and 126 Common Shares) Outstanding 114 shares (7 Series A Common and 107 Common Shares) Par Value ($.01 per share) | 1 | 1 | |
Capital in excess of par value | 2,442 | 2,432 | |
Treasury shares, at cost, 19 Common Shares | (505) | (519) | |
Accumulated other comprehensive loss | (10) | (10) | |
Retained earnings | 2,683 | 2,656 | |
Total TDS shareholders' equity | 4,611 | 4,560 | |
Noncontrolling interests | 746 | 733 | |
Total equity | 5,357 | 5,293 | |
Total liabilities and equity | [1] | $ 10,787 | $ 9,783 |
[1] | The consolidated total assets as of March 31, 2019 and December 31, 2018, include assets held by consolidated variable interest entities (VIEs) of $895 million and $848 million, respectively, which are not available to be used to settle the obligations of TDS. The consolidated total liabilities as of March 31, 2019 and December 31, 2018, include certain liabilities of consolidated VIEs of $19 million and $21 million, respectively, for which the creditors of the VIEs have no recourse to the general credit of TDS. See Note 9 — Variable Interest Entities for additional information. |
Consolidated Balance Sheet (Par
Consolidated Balance Sheet (Parenthetical) - USD ($) $ in Millions | Mar. 31, 2019 | Dec. 31, 2018 |
Accounts receivable | ||
Customer and agent allowances | $ 70 | $ 71 |
Other allowances | 2 | 2 |
Other intangible assets | ||
Other intangible assets accumulated amortization | $ 174 | $ 168 |
TDS shareholders’ equity | ||
Authorized shares (in shares) | 290,000,000 | 290,000,000 |
Issued shares (in shares) | 133,000,000 | 133,000,000 |
Outstanding shares (in shares) | 114,000,000 | 114,000,000 |
Variable Interest Entities VIEs | ||
Total VIE assets that can be used to settle only the VIEs' obligations | $ 895 | $ 848 |
Total VIE liabilities for which creditors have no recourse | $ 19 | $ 21 |
Series A Common Shares | ||
TDS shareholders’ equity | ||
Authorized shares (in shares) | 25,000,000 | 25,000,000 |
Issued shares (in shares) | 7,000,000 | 7,000,000 |
Outstanding shares (in shares) | 7,000,000 | 7,000,000 |
Par value per share (in dollars per share) | $ 0.01 | $ 0.01 |
Common Shares | ||
TDS shareholders’ equity | ||
Authorized shares (in shares) | 265,000,000 | 265,000,000 |
Issued shares (in shares) | 126,000,000 | 126,000,000 |
Outstanding shares (in shares) | 107,000,000 | 107,000,000 |
Par value per share (in dollars per share) | $ 0.01 | $ 0.01 |
Treasury shares at cost (in shares) | 19,000,000 | 19,000,000 |
Consolidated Statement of Chang
Consolidated Statement of Changes in Equity - USD ($) $ in Millions | Total | Series A Common and Common shares | Capital in excess of par value | Treasury shares | Accumulated other comprehensive income (loss) | Retained earnings | Total TDS shareholders' equity | Noncontrolling interests |
Cumulative effect of accounting changes | $ 195 | $ (1) | $ 165 | $ 164 | $ 31 | |||
Beginning balance at Dec. 31, 2017 | 4,892 | $ 1 | $ 2,413 | $ (669) | (1) | 2,525 | 4,269 | 623 |
Net income attributable to TDS shareholders | 39 | 39 | 39 | |||||
Net income attributable to noncontrolling interests classified as equity | 8 | 0 | 8 | |||||
Other comprehensive loss | (1) | (1) | (1) | |||||
TDS Common and Series A Common share dividends | (18) | (18) | (18) | |||||
Dividend reinvestment plan | 2 | 6 | (4) | 2 | ||||
Incentive and compensation plans | 9 | 20 | (11) | 9 | ||||
Adjust investment in subsidiaries for repurchases, issuances and other compensation plans | 10 | 5 | 5 | 5 | ||||
Stock-based compensation awards | 3 | 3 | 3 | |||||
Ending balance at Mar. 31, 2018 | 5,139 | 1 | 2,421 | (643) | (3) | 2,696 | 4,472 | 667 |
Beginning balance at Dec. 31, 2018 | 5,293 | 1 | 2,432 | (519) | (10) | 2,656 | 4,560 | 733 |
Net income attributable to TDS shareholders | 59 | 59 | 59 | |||||
Net income attributable to noncontrolling interests classified as equity | 11 | 0 | 11 | |||||
TDS Common and Series A Common share dividends | (19) | (19) | (19) | |||||
Dividend reinvestment plan | 4 | 5 | (1) | 4 | ||||
Incentive and compensation plans | (3) | 9 | (12) | (3) | ||||
Adjust investment in subsidiaries for repurchases, issuances and other compensation plans | 9 | 6 | 6 | 3 | ||||
Stock-based compensation awards | 4 | 4 | 4 | |||||
Distributions to noncontrolling interests | (1) | 0 | (1) | |||||
Ending balance at Mar. 31, 2019 | $ 5,357 | $ 1 | $ 2,442 | $ (505) | $ (10) | $ 2,683 | $ 4,611 | $ 746 |
Consolidated Statement of Cha_2
Consolidated Statement of Changes in Equity (Parenthetical) - $ / shares | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Statement of Stockholders' Equity (Parenthetical) [Abstract] | ||
TDS Common and Series A Common Share dividends (in dollars per share) | $ 0.165 | $ 0.16 |
Basis of Presentation
Basis of Presentation | 3 Months Ended |
Mar. 31, 2019 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of Presentation | Note 1 Basis of Presentation The accounting policies of Telephone and Data Systems, Inc. (TDS) conform to accounting principles generally accepted in the United States of America (GAAP) as set forth in the Financial Accounting Standards Board (FASB) Accounting Standards Codification (ASC). Unless otherwise specified, references to accounting provisions and GAAP in these notes refer to the requirements of the FASB ASC. The consolidated financial statements include the accounts of TDS and subsidiaries in which it has a controlling financial interest, including TDS’ 82% -owned subsidiary, United States Cellular Corporation (U.S. Cellular) and TDS’ wholly-owned subsidiary, TDS Telecommunications LLC (TDS Telecom). In addition, the consolidated financial statements include certain entities in which TDS has a variable interest that require consolidation under GAAP. All material intercompany accounts and transactions have been eliminated. TDS’ business segments reflected in this Quarterly Report on Form 10-Q for the period ended March 31, 2019 , are U.S. Cellular, Wireline, and Cable. TDS’ non-reportable other business activities are presented as “Corporate, Eliminations and Other”, which includes the operations of TDS’ wholly-owned hosted and managed services (HMS) subsidiary, which operates under the OneNeck IT Solutions brand, and its wholly-owned subsidiary Suttle-Straus, Inc. (Suttle-Straus). HMS’ and Suttle-Straus’ financial results were not significant to TDS’ operations. All of TDS’ segments operate only in the United States, except for HMS, which includes an insignificant foreign operation. See Note 11 — Business Segment Information for summary financial information on each business segment. The unaudited consolidated financial statements included herein have been prepared by TDS pursuant to the rules and regulations of the Securities and Exchange Commission (SEC). Certain information and disclosures normally included in annual financial statements prepared in accordance with GAAP have been condensed or omitted pursuant to such rules and regulations. However, TDS believes that the disclosures included herein are adequate to make the information presented not misleading. Certain numbers included herein are rounded to millions for ease of presentation; however, certain calculated amounts and percentages are determined using the unrounded numbers. These unaudited consolidated financial statements should be read in conjunction with the consolidated financial statements and the notes thereto included in TDS’ Annual Report on Form 10-K (Form 10-K) for the year ended December 31, 2018 . The accompanying unaudited consolidated financial statements contain all adjustments (consisting of normal recurring items, unless otherwise disclosed) necessary for the fair statement of TDS’ financial position as of March 31, 2019 and December 31, 2018 and its results of operations, comprehensive income, cash flows and changes in equity for the three months ended March 31, 2019 and 2018 . These results are not necessarily indicative of the results to be expected for the full year. TDS has not changed its significant accounting and reporting policies from those disclosed in its Form 10-K for the year ended December 31, 2018 , except as disclosed in Note 8 — Leases . Restricted Cash TDS presents restricted cash with cash and cash equivalents in the Consolidated Statement of Cash Flows. The following table provides a reconciliation of Cash and cash equivalents and restricted cash reported in the Consolidated Balance Sheet to the total of the amounts in the Consolidated Statement of Cash Flows as of March 31, 2019 and December 31, 2018 . March 31, 2019 December 31, 2018 (Dollars in millions) Cash and cash equivalents $ 959 $ 921 Restricted cash included in Other current assets 7 6 Cash, cash equivalents and restricted cash in the statement of cash flows $ 966 $ 927 Recently Issued Accounting Pronouncements Not Yet Adopted In June 2016, the FASB issued Accounting Standards Update 2016-13, Financial Instruments - Credit Losses: Measurement of Credit Losses on Financial Instruments (ASU 2016-13). ASU 2016-13 requires entities to use a new forward-looking, expected loss model to estimate credit losses. It also requires additional disclosure relating to the credit quality of trade and other receivables, including information relating to management’s estimate of credit allowances. TDS is required to adopt ASU 2016-13 on January 1, 2020, using the modified retrospective approach. Early adoption is permitted; however, TDS does not intend to adopt early. TDS is evaluating the effects that adoption of ASU 2016-13 will have on its financial position, results of operations and disclosures. |
Revenue Recognition
Revenue Recognition | 3 Months Ended |
Mar. 31, 2019 | |
Revenue from Contract with Customer [Abstract] | |
Revenue Recognition | Note 2 Revenue Recognition Disaggregation of Revenue In the following table, revenue is disaggregated by type of service and timing of revenue recognition. Service revenues are recognized over time and Equipment sales are point in time. TDS Telecom Three Months Ended March 31, 2019 U.S. Cellular Wireline Cable TDS Telecom Total 1 Corporate, Eliminations and Other Total (Dollars in millions) Revenues from contracts with customers: Type of service: Retail service $ 659 $ — $ — $ — $ — $ 659 Inbound roaming 34 — — — — 34 Residential — 81 49 131 — 131 Commercial — 43 10 54 — 54 Wholesale — 45 — 45 — 45 Other service 32 — — — 18 50 Service revenues from contracts with customers 725 170 60 229 18 973 Equipment and product sales 225 — — — 37 262 Total revenues from contracts with customers 2 $ 950 $ 170 $ 60 $ 230 $ 55 $ 1,235 Numbers may not foot due to rounding. TDS Telecom Three Months Ended March 31, 2018 U.S. Cellular Wireline Cable TDS Telecom Total 1 Corporate, Eliminations and Other Total (Dollars in millions) Revenues from contracts with customers: Type of service: Retail service $ 649 $ — $ — $ — $ — $ 649 Inbound roaming 27 — — — — 27 Residential — 80 46 126 — 126 Commercial — 48 10 57 — 57 Wholesale — 47 — 47 — 47 Other service 32 — — — 18 50 Service revenues from contracts with customers 708 175 55 230 18 956 Equipment and product sales 218 — — — 29 247 Total revenues from contracts with customers 2 $ 926 $ 175 $ 55 $ 230 $ 47 $ 1,203 Numbers may not foot due to rounding. 1 TDS Telecom Total includes eliminations between the Wireline and Cable segments. 2 Revenue line items in this table will not agree to amounts presented in the Consolidated Statement of Operations as the balances do not include all sources of revenues. Contract Balances The accounts receivable balance related to amounts billed and not paid on contracts with customers, net of allowances, is shown in the table below. March 31, 2019 December 31, 2018 (Dollars in millions) Accounts receivable Customer and agents $ 963 $ 987 Other 71 73 Total 1 $ 1,034 $ 1,060 1 Accounts receivable line items presented in this table will not agree to amounts presented in the Consolidated Balance Sheet as certain receivables are excluded from these balances. The following table provides a rollforward of contract assets from contracts with customers, which are recorded in Other current assets and Other assets and deferred charges in the Consolidated Balance Sheet. Contract Assets (Dollars in millions) Balance at December 31, 2018 $ 11 Contract additions 5 Reclassified to receivables (5 ) Balance at March 31, 2019 $ 11 The following table provides a rollforward of contract liabilities from contracts with customers, which are recorded in Customer deposits and deferred revenues and Other deferred liabilities and credits in the Consolidated Balance Sheet. Contract Liabilities (Dollars in millions) Balance at December 31, 2018 $ 203 Contract additions 79 Terminated contracts (2 ) Revenue recognized (70 ) Balance at March 31, 2019 $ 210 Transaction price allocated to the remaining performance obligations The following table includes estimated service revenue expected to be recognized in the future related to performance obligations that are unsatisfied (or partially unsatisfied) at the end of the reporting period. The estimates represent service revenue to be recognized when services are delivered to customers pursuant to service plan contracts and under certain roaming agreements with other carriers. These estimates are based on contracts in place as of March 31, 2019 , and may vary from actual results due to future contract modifications. As a practical expedient, revenue related to contracts of less than one year, generally month-to-month contracts, are excluded from these estimates. Service Revenue (Dollars in millions) Remainder of 2019 $ 335 2020 157 Thereafter 79 Total $ 571 TDS has certain contracts at U.S. Cellular and TDS Telecom in which it bills an amount equal to a fixed per-unit price multiplied by a variable quantity (e.g., certain roaming agreements with other carriers). Because TDS invoices for such items in an amount that corresponds directly with the value of the performance completed to date, TDS may recognize revenue in that amount. As a practical expedient, these contracts are excluded from the estimate of future revenues expected to be recognized related to performance obligations that are unsatisfied as of the end of a reporting period. Amounts Collected from Customers and Remitted to Governmental Authorities TDS records amounts collected from customers and remitted to governmental authorities on a net basis within a liability account if the amount is assessed upon the customer and TDS merely acts as an agent in collecting the amount on behalf of the imposing governmental authority. If the amount is assessed upon TDS, then amounts collected from customers are recorded in Service revenues and amounts remitted to governmental authorities are recorded in Selling, general and administrative expenses in the Consolidated Statement of Operations. The amounts recorded gross in revenues that are billed to customers and remitted to governmental authorities totaled $17 million and $23 million for the three months ended March 31, 2019 and 2018 , respectively. |
Fair Value Measurements
Fair Value Measurements | 3 Months Ended |
Mar. 31, 2019 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements | Note 3 Fair Value Measurements As of March 31, 2019 and December 31, 2018 , TDS did not have any material financial or nonfinancial assets or liabilities that were required to be recorded at fair value in its Consolidated Balance Sheet in accordance with GAAP. The provisions of GAAP establish a fair value hierarchy that contains three levels for inputs used in fair value measurements. Level 1 inputs include quoted market prices for identical assets or liabilities in active markets. Level 2 inputs include quoted market prices for similar assets and liabilities in active markets or quoted market prices for identical assets and liabilities in inactive markets. Level 3 inputs are unobservable. A financial instrument’s level within the fair value hierarchy is based on the lowest level of any input that is significant to the fair value measurement. A financial instrument’s level within the fair value hierarchy is not representative of its expected performance or its overall risk profile and, therefore, Level 3 assets are not necessarily higher risk than Level 2 assets or Level 1 assets. TDS has applied the provisions of fair value accounting for purposes of computing the fair value of financial instruments for disclosure purposes as displayed below. Level within the Fair Value Hierarchy March 31, 2019 December 31, 2018 Book Value Fair Value Book Value Fair Value (Dollars in millions) Cash and cash equivalents 1 $ 959 $ 959 $ 921 $ 921 Short-term investments 1 17 17 17 17 Long-term debt Retail 2 1,753 1,768 1,753 1,596 Institutional 2 534 585 534 531 Other 2 179 179 182 182 The fair values of Cash and cash equivalents and Short-term investments approximate their book values due to the short-term nature of these financial instruments. Long-term debt excludes lease obligations, other installment arrangements, the current portion of Long-term debt and debt financing costs. The fair value of “Retail” Long-term debt was estimated using market prices for TDS’ 7.0% Senior Notes, 6.875% Senior Notes, 6.625% Senior Notes and 5.875% Senior Notes, and U.S. Cellular’s 7.25% 2063 Senior Notes, 7.25% 2064 Senior Notes and 6.95% Senior Notes. TDS’ “Institutional” debt consists of U.S. Cellular’s 6.7% Senior Notes which are traded over the counter. TDS’ “Other” debt consists of a senior term loan credit agreement and other borrowings with financial institutions. TDS estimated the fair value of its Institutional and Other debt through a discounted cash flow analysis using the interest rates or estimated yield to maturity for each borrowing, which ranged from 4.25% to 7.50% and 5.03% to 8.00% at March 31, 2019 and December 31, 2018 , respectively. |
Equipment Installment Plans
Equipment Installment Plans | 3 Months Ended |
Mar. 31, 2019 | |
Receivables [Abstract] | |
Equipment Installment Plans | Note 4 Equipment Installment Plans TDS sells devices to customers under equipment installment plans over a specified time period. For certain equipment installment plans, after a specified period of time or amount of payments, the customer may have the right to upgrade to a new device and have the remaining unpaid equipment installment contract balance waived, subject to certain conditions, including trading in the original device in good working condition and signing a new equipment installment contract. TDS values this trade-in right as a guarantee liability. The guarantee liability is initially measured at fair value and is determined based on assumptions including the probability and timing of the customer upgrading to a new device and the fair value of the device being traded-in at the time of trade-in. When a customer exercises the trade-in option, both the outstanding receivable and guarantee liability balances related to the respective device are reduced to zero, and the value of the used device that is received in the transaction is recognized as inventory. If the customer does not exercise the trade-in option at the time of eligibility, TDS begins amortizing the liability and records this amortization as additional equipment revenue. As of March 31, 2019 and December 31, 2018 , the guarantee liability related to these plans was $11 million and is reflected in Customer deposits and deferred revenues in the Consolidated Balance Sheet. The following table summarizes equipment installment plan receivables as of March 31, 2019 and December 31, 2018 . March 31, 2019 December 31, 2018 (Dollars in millions) Equipment installment plan receivables, gross $ 975 $ 974 Allowance for credit losses (77 ) (77 ) Equipment installment plan receivables, net $ 898 $ 897 Net balance presented in the Consolidated Balance Sheet as: Accounts receivable — Customers and agents (Current portion) $ 571 $ 560 Other assets and deferred charges (Non-current portion) 327 337 Equipment installment plan receivables, net $ 898 $ 897 TDS uses various inputs, including internal data, information from credit bureaus and other sources, to evaluate the credit profiles of its customers. From this evaluation, a credit class is assigned to the customer that determines the number of eligible lines, the amount of credit available, and the down payment requirement, if any. Customers assigned to credit classes requiring no down payment represent a lower risk category, whereas those assigned to credit classes requiring a down payment represent a higher risk category. The balance and aging of the equipment installment plan receivables on a gross basis by credit category were as follows: March 31, 2019 December 31, 2018 Lower Risk Higher Risk Total Lower Risk Higher Risk Total (Dollars in millions) Unbilled $ 901 $ 13 $ 914 $ 904 $ 17 $ 921 Billed — current 41 1 42 35 1 36 Billed — past due 17 2 19 15 2 17 Equipment installment plan receivables, gross $ 959 $ 16 $ 975 $ 954 $ 20 $ 974 Activity for the three months ended March 31, 2019 and 2018 , in the allowance for credit losses for equipment installment plan receivables was as follows: March 31, 2019 March 31, 2018 (Dollars in millions) Allowance for credit losses, beginning of period $ 77 $ 65 Bad debts expense 18 14 Write-offs, net of recoveries (18 ) (13 ) Allowance for credit losses, end of period $ 77 $ 66 |
Earnings Per Share
Earnings Per Share | 3 Months Ended |
Mar. 31, 2019 | |
Earnings Per Share [Abstract] | |
Earnings Per Share | Note 5 Earnings Per Share Basic earnings per share attributable to TDS shareholders is computed by dividing Net income attributable to TDS shareholders by the weighted average number of common shares outstanding during the period. Diluted earnings per share attributable to TDS shareholders is computed by dividing Net income attributable to TDS shareholders by the weighted average number of common shares outstanding during the period adjusted to include the effects of potentially dilutive securities. Potentially dilutive securities primarily include incremental shares issuable upon the exercise of outstanding stock options and the vesting of performance and restricted stock units. The amounts used in computing earnings per common share and the effects of potentially dilutive securities on the weighted average number of common shares were as follows: Three Months Ended 2019 2018 (Dollars and shares in millions, except per share amounts) Basic earnings per share attributable to TDS shareholders: Net income attributable to TDS shareholders used in basic earnings per share $ 59 $ 39 Adjustments to compute diluted earnings: Noncontrolling interest adjustment (1 ) — Net income attributable to TDS shareholders used in diluted earnings per share $ 58 $ 39 Weighted average number of shares used in basic earnings per share: Common Shares 107 104 Series A Common Shares 7 7 Total 114 111 Effects of dilutive securities 2 2 Weighted average number of shares used in diluted earnings per share 116 113 Basic earnings per share attributable to TDS shareholders $ 0.52 $ 0.35 Diluted earnings per share attributable to TDS shareholders $ 0.50 $ 0.34 Certain Common Shares issuable upon the exercise of stock options or vesting of performance and restricted stock units were not included in average diluted shares outstanding for the calculation of Diluted earnings per share attributable to TDS shareholders because their effects were antidilutive. The number of such Common Shares excluded was less than 1 million and 4 million for the three months ended March 31, 2019 and 2018 , respectively. |
Intangible Assets
Intangible Assets | 3 Months Ended |
Mar. 31, 2019 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Intangible Assets | Note 6 Intangible Assets Activity related to Licenses for the three months ended March 31, 2019 , is presented below: Licenses (Dollars in millions) Balance at December 31, 2018 $ 2,195 Acquisitions 1 Exchanges - Licenses received 26 Balance at March 31, 2019 $ 2,222 During 2019, TDS committed to purchase spectrum licenses in the amount of $249 million, subject to regulatory approval. TDS paid $135 million of this amount in the three months ended March 31, 2019, and expects to pay substantially all of the remainder in 2019. This advance payment is included in Other assets and deferred charges in the March 31, 2019 Consolidated Balance Sheet. |
Investments In Unconsolidated E
Investments In Unconsolidated Entities | 3 Months Ended |
Mar. 31, 2019 | |
Equity Method Investments and Joint Ventures [Abstract] | |
Investments in Unconsolidated Entities | Note 7 Investments in Unconsolidated Entities Investments in unconsolidated entities consist of amounts invested in entities in which TDS holds a noncontrolling interest. TDS’ Investments in unconsolidated entities are accounted for using either the equity method or measurement alternative method as shown in the table below. The measurement alternative method was elected for investments without readily determinable fair values formerly accounted for under the cost method. The measurement alternative fair value represents cost minus any impairments plus or minus any observable price changes. TDS did not have an impairment or observable price change related to these investments for the three months ended March 31, 2019 . March 31, 2019 December 31, 2018 (Dollars in millions) Equity method investments $ 485 $ 459 Measurement alternative method investments 22 21 Total investments in unconsolidated entities $ 507 $ 480 The following table, which is based in part on information provided by third parties, summarizes the combined results of operations of TDS’ equity method investments. Three Months Ended 2019 2018 (Dollars in millions) Revenues $ 1,696 $ 1,663 Operating expenses 1,221 1,213 Operating income 475 450 Other income (expense), net (6 ) (1 ) Net income $ 469 $ 449 |
Leases
Leases | 3 Months Ended |
Mar. 31, 2019 | |
Leases [Abstract] | |
Leases | Note 8 Leases Change in Accounting Policy In February 2016, the FASB issued Accounting Standards Update 2016-02, Leases and has since amended the standard with Accounting Standards Updates 2018-01, Leases: Land Easement Practical Expedient for Transition to Topic 842 , Accounting Standards Update 2018-10, Codification Improvements to Topic 842, Leases , Accounting Standards Update 2018-11, Leases: Targeted Improvements, and Accounting Standards Update 2018-20, Leases: Narrow-Scope Improvements for Lessors , collectively referred to as ASC 842. This standard replaces the previous lease accounting standard under ASC 840 - Leases and requires lessees to record a right-of-use (ROU) asset and lease liability for the majority of leases. TDS adopted the provisions of ASC 842 on January 1, 2019, using a modified retrospective method. Under this method, TDS elected to apply the new accounting standard only to the most recent period presented, recognizing the cumulative effect of the accounting change, if any, as an adjustment to the beginning balance of retained earnings. Accordingly, prior periods have not been recast to reflect the new accounting standard. The cumulative effect of applying the provisions of ASC 842 had no impact on retained earnings as of January 1, 2019. TDS elected transitional practical expedients for existing leases which eliminated the requirements to reassess existing lease classification, initial direct costs, and whether contracts contain leases. TDS also elected the practical expedient related to land easements that allows it to carry forward the accounting treatment for pre-existing land easement agreements. The cumulative effect of the adoption of ASC 842 on TDS’ Consolidated Balance Sheet is presented below. December 31, 2018 ASC 842 Adjustment January 1, 2019 (Dollars in millions) Prepaid expenses $ 103 $ (13 ) $ 90 Operating lease right-of-use assets — 975 975 Other assets and deferred charges 616 (12 ) 604 Short-term operating lease liabilities — 112 112 Other current liabilities 114 (8 ) 106 Long-term operating lease liabilities — 949 949 Other deferred liabilities and credits 541 (103 ) 438 As a result of the adoption of ASC 842, TDS recorded ROU assets and lease liabilities for its operating leases in its Consolidated Balance Sheet as of January 1, 2019. The lease liabilities are calculated as the discounted value of future lease payments. The difference between the lease liabilities and the corresponding ROU assets is a result of various lease prepayments and straight-line expense recognition deferral balances as of December 31, 2018, which were offset against the ROU assets as of January 1, 2019. Finance leases are included in Property, plant and equipment and Long-term debt, net consistent with presentation under prior accounting standards. Lessee Agreements A lease is generally present in a contract if the lessee controls the use of identified property, plant or equipment for a period of time in exchange for consideration. Nearly all of TDS’ leases are classified as operating leases, although it does have a small number of finance leases. TDS’ most significant leases are for land and tower spaces, network facilities, retail spaces, and offices. TDS has agreements with both lease and nonlease components, which are accounted for separately. As part of the present value calculation for the lease liabilities, TDS uses an incremental borrowing rate as the rates implicit in the leases are not readily determinable. The incremental borrowing rates used for lease accounting are based on TDS' unsecured rates, adjusted to approximate what TDS would have to borrow on a collateralized basis over a similar period of time as the recognized lease term. TDS applies the incremental borrowing rates to lease components using a portfolio approach based upon the length of the lease term and the reporting entity in which the lease resides. The cost of nonlease components in TDS’ lease portfolio (e.g., utilities and common area maintenance) are not typically predetermined at lease commencement and are expensed as incurred at their relative standalone price. Variable lease expense occurs when, subsequent to the lease commencement, lease payments are made that were not originally included in the lease liability calculation. TDS’ variable lease payments are primarily a result of leases with escalations that are tied to an index. The incremental changes due to the index changes are recorded as variable lease expense and are not included in the ROU assets or lease liabilities. Lease term recognition determines the periods to allocate expense and also has a significant impact on the lease liability and ROU asset calculations. Many of TDS’ leases include renewal and early termination options. At lease commencement, the lease terms include options to extend the lease when TDS is reasonably certain that it will exercise the options. The lease terms do not include early termination options unless TDS is reasonably certain to exercise the options. Certain asset classes have similar lease characteristics; therefore, TDS has applied the portfolio approach for lease term recognition for its tower space, retail, and certain ground lease asset classes. The following table shows the components of lease cost included in the Consolidated Statement of Operations: Three Months Ended (Dollars in millions) Operating lease cost $ 43 Variable lease cost 2 Total lease cost $ 45 The following table shows supplemental cash flow information related to lease activities: Three Months Ended (Dollars in millions) Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows from operating leases $ 41 ROU assets obtained in exchange for lease obligations: Operating leases $ 25 Finance leases 7 The following table shows the classification of TDS’ operating and finance leases in its Consolidated Balance Sheet: March 31, 2019 (Dollars in millions) Operating Leases Operating lease right-of-use assets $ 965 Short-term operating lease liabilities $ 110 Long-term operating lease liabilities 929 Total operating lease liabilities $ 1,039 Finance Leases Property, plant and equipment $ 17 Less: Accumulated depreciation and amortization 4 Property, plant and equipment, net $ 13 Current portion of long-term debt $ 1 Long-term debt, net 5 Total finance lease liabilities $ 6 The table below shows a weighted-average analysis for lease term and discount rate for all leases: March 31, 2019 Weighted Average Remaining Lease Term Operating leases 12 years Finance leases 22 years Weighted Average Discount Rate Operating leases 4.5 % Finance leases 6.9 % The maturities of lease liabilities are as follows: Operating Leases Finance Leases (Dollars in millions) Remainder of 2019 $ 118 $ 1 2020 161 1 2021 144 — 2022 127 1 2023 111 — Thereafter 764 14 Total lease payments 1 $ 1,425 $ 17 Less: Imputed interest 386 11 Present value of lease liabilities $ 1,039 $ 6 1 Lease payments exclude $11 million of legally binding lease payments for leases signed but not yet commenced. Lessor Agreements TDS’ most significant lessor leases are for tower space and colocation space. All of TDS’ lessor leases are classified as operating leases. A lease is generally present in a contract if the lessee controls the use of identified property, plant, or equipment for a period of time in exchange for consideration. TDS’ lessor agreements with lease and nonlease components are generally accounted for separately; however, certain service agreements with insignificant lease components are accounted for as nonlease transactions. Lease term recognition determines the periods to allocate revenue over the term of the lease. Many of TDS’ leases include renewal and early termination options. At lease commencement, lease terms include options to extend the lease when TDS is reasonably certain that lessees will exercise the options. Lease terms would not include periods after the date of a termination option that lessees are reasonably certain to exercise. Variable lease income occurs when, subsequent to the lease commencement, lease payments are received that were not originally included in the lease receivable calculation. TDS’ variable lease income is primarily a result of leases with escalations that are tied to an index. The incremental increases due to the index changes are recorded as variable lease income. The following table shows the components of lease income which are included in service revenue in the Consolidated Statement of Operations: Three Months Ended (Dollars in millions) Operating lease income $ 22 The maturities of expected lease payments to be received are as follows: Operating Leases (Dollars in millions) Remainder of 2019 $ 57 2020 70 2021 37 2022 25 2023 13 Thereafter 10 Total future lease maturities $ 212 Disclosures under ASC 840 As of December 31, 2018, future minimum rental payments required under operating leases and rental receipts expected under operating leases that have noncancellable lease terms in excess of one year were as follows: Operating Leases Future Minimum Rental Payments Operating Leases Future Minimum Rental Receipts (Dollars in millions) 2019 $ 170 $ 59 2020 158 48 2021 142 35 2022 126 23 2023 110 10 Thereafter 784 7 Total $ 1,490 $ 182 |
Variable Interest Entities
Variable Interest Entities | 3 Months Ended |
Mar. 31, 2019 | |
Variable Interest Entities [Abstract] | |
Variable Interest Entities | Note 9 Variable Interest Entities Consolidated VIEs TDS consolidates VIEs in which it has a controlling financial interest as defined by GAAP and is therefore deemed the primary beneficiary. A controlling financial interest will have both of the following characteristics: (a) the power to direct the VIE activities that most significantly impact economic performance; and (b) the obligation to absorb the VIE losses and the right to receive benefits that are significant to the VIE. TDS reviews these criteria initially at the time it enters into agreements and subsequently when events warranting reconsideration occur. These VIEs have risks similar to those described in the “Risk Factors” in TDS’ Form 10-K for the year ended December 31, 2018 . During 2017, U.S. Cellular formed USCC EIP LLC (Seller/Sub-Servicer), USCC Receivables Funding LLC (Transferor) and the USCC Master Note Trust (Trust), collectively the special purpose entities (SPEs), to facilitate a securitized borrowing using its equipment installment plan receivables. Under a Receivables Sale Agreement, U.S. Cellular wholly-owned, majority-owned and unconsolidated entities, collectively referred to as “affiliated entities”, transfers device equipment installment plan contracts to the Seller/Sub-Servicer. The Seller/Sub-Servicer aggregates device equipment installment plan contracts, and performs servicing, collection and all other administrative activities related to accounting for the equipment installment plan contracts. The Seller/Sub-Servicer sells the eligible equipment installment plan receivables to the Transferor, a bankruptcy remote entity, which subsequently sells the receivables to the Trust. The Trust, which is bankruptcy remote and isolated from the creditors of U.S. Cellular, will be responsible for issuing asset-backed variable funding notes (Notes), which are collateralized by the equipment installment plan receivables owned by the Trust. Given that U.S. Cellular has the power to direct the activities of these SPEs, and that these SPEs lack sufficient equity to finance their activities, U.S. Cellular is deemed to have a controlling financial interest in the SPEs and, therefore, consolidates them. All transactions with third parties (e.g., issuance of the asset-backed variable funding notes) will be accounted for as a secured borrowing due to the pledging of equipment installment plan contracts as collateral, significant continuing involvement in the transferred assets, subordinated interests of the cash flows, and continued evidence of control of the receivables. The following VIEs were formed to participate in FCC auctions of wireless spectrum and to fund, establish, and provide wireless service with respect to any FCC licenses won in the auctions: ▪ Advantage Spectrum, L.P. (Advantage Spectrum) and Sunshine Spectrum, Inc., the general partner of Advantage Spectrum; and ▪ King Street Wireless, L.P. (King Street Wireless) and King Street Wireless, Inc., the general partner of King Street Wireless. These particular VIEs are collectively referred to as designated entities. The power to direct the activities that most significantly impact the economic performance of these VIEs is shared. Specifically, the general partner of these VIEs has the exclusive right to manage, operate and control the limited partnerships and make all decisions to carry on the business of the partnerships. The general partner of each partnership needs the consent of the limited partner, an indirect TDS subsidiary, to sell or lease certain licenses, to make certain large expenditures, admit other partners or liquidate the limited partnerships. Although the power to direct the activities of these VIEs is shared, TDS has the most significant level of exposure to the variability associated with the economic performance of the VIEs, indicating that TDS is the primary beneficiary of the VIEs. Therefore, in accordance with GAAP, these VIEs are consolidated. TDS also consolidates other VIEs that are limited partnerships that provide wireless service. A limited partnership is a variable interest entity unless the limited partners hold substantive participating rights or kick-out rights over the general partner. For certain limited partnerships, U.S. Cellular is the general partner and manages the operations. In these partnerships, the limited partners do not have substantive kick-out or participating rights and, further, such limited partners do not have the authority to remove the general partner. Therefore, these limited partnerships are also recognized as VIEs and are consolidated under the variable interest model. The following table presents the classification and balances of the consolidated VIEs’ assets and liabilities in TDS’ Consolidated Balance Sheet. March 31, 2019 December 31, 2018 (Dollars in millions) Assets Cash and cash equivalents $ 8 $ 9 Short-term investments 17 17 Accounts receivable 617 609 Inventory, net 4 5 Other current assets 5 5 Licenses 647 647 Property, plant and equipment, net 85 88 Operating lease right-of-use assets 37 — Other assets and deferred charges 338 347 Total assets $ 1,758 $ 1,727 Liabilities Current liabilities $ 34 $ 31 Long-term operating lease liabilities 34 — Deferred liabilities and credits 12 15 Total liabilities $ 80 $ 46 Unconsolidated VIEs TDS manages the operations of and holds a variable interest in certain other limited partnerships, but is not the primary beneficiary of these entities and, therefore, does not consolidate them under the variable interest model. TDS’ total investment in these unconsolidated entities was $4 million at both March 31, 2019 and December 31, 2018 , and is included in Investments in unconsolidated entities in TDS’ Consolidated Balance Sheet. The maximum exposure from unconsolidated VIEs is limited to the investment held by TDS in those entities. Other Related Matters TDS made contributions, loans and/or advances to its VIEs totaling $183 million and $19 million , during the three months ended March 31, 2019 and 2018 , respectively; of which $168 million in 2019 and $10 million in 2018 , are related to USCC EIP LLC as discussed above. TDS may agree to make additional capital contributions and/or advances to these or other VIEs and/or to their general partners to provide additional funding for operations or the development of licenses granted in various auctions. TDS may finance such amounts with a combination of cash on hand, borrowings under its revolving credit agreement and/or other long-term debt. There is no assurance that TDS will be able to obtain additional financing on commercially reasonable terms or at all to provide such financial support. The limited partnership agreements of Advantage Spectrum and King Street Wireless also provide the general partner with a put option whereby the general partner may require the limited partner, a subsidiary of U.S. Cellular, to purchase its interest in the limited partnership. The general partner’s put options related to its interests in King Street Wireless will become exercisable in 2019. The general partner’s put options related to its interest in Advantage Spectrum will become exercisable in 2021 and 2022. The greater of the carrying value of the general partner's investment or the value of the put option, net of any borrowings due to TDS, is recorded as Noncontrolling interests with redemption features in TDS’ Consolidated Balance Sheet. Also in accordance with GAAP, minority share of income or changes in the redemption value of the put options, net of interest accrued on the loans, are recorded as a component of Net income attributable to noncontrolling interests, net of tax, in TDS’ Consolidated Statement of Operations. During the first quarter of 2018, TDS recorded an out-of-period adjustment attributable to 2016 and 2017 due to errors in the application of accounting guidance applicable to the calculation of Noncontrolling interests with redemption features related to King Street Wireless, Inc. This out-of-period adjustment had the impact of increasing Net income attributable to noncontrolling interests, net of tax, by $6 million and decreasing Net income attributable to TDS shareholders by $6 million for the three months ended March 31, 2018. TDS determined that this adjustment was not material to any of the periods impacted. |
Noncontrolling Interests
Noncontrolling Interests | 3 Months Ended |
Mar. 31, 2019 | |
Consolidation, Less than Wholly Owned Subsidiary, Parent Ownership Interest, Change Due to Net Income Attributable to Parent and Effects of Changes, Net [Abstract] | |
Noncontrolling Interests | Note 10 Noncontrolling Interests The following schedule discloses the effects of Net income attributable to TDS shareholders and changes in TDS’ ownership interest in U.S. Cellular on TDS’ equity: Three Months Ended March 31, 2019 2018 (Dollars in millions) Net income attributable to TDS shareholders $ 59 $ 39 Transfers to noncontrolling interests Change in TDS' Capital in excess of par value from U.S. Cellular's issuance of U.S. Cellular shares (2 ) (2 ) Change in TDS' Capital in excess of par value from U.S. Cellular's repurchases of U.S. Cellular shares — — Purchase of ownership in subsidiaries from noncontrolling interests — — Net transfers to noncontrolling interests (2 ) (2 ) Change from net income attributable to TDS and transfers to noncontrolling interests $ 57 $ 37 |
Business Segment Information
Business Segment Information | 3 Months Ended |
Mar. 31, 2019 | |
Segment Reporting [Abstract] | |
Business Segment Information | Note 11 Business Segment Information U.S. Cellular and TDS Telecom are billed for services they receive from TDS, consisting primarily of information processing, accounting and finance, and general management services. Such billings are based on expenses specifically identified to U.S. Cellular 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 U.S. Cellular and TDS Telecom are reflected in the accompanying business segment information on a basis that is representative of what they would have been if U.S. Cellular and TDS Telecom operated on a stand-alone basis. Financial data for TDS’ reportable segments for the three month periods ended, or as of March 31, 2019 and 2018 , is as follows. See Note 1 — Basis of Presentation for additional information. TDS Telecom Three Months Ended or as of March 31, 2019 U.S. Cellular Wireline Cable TDS Telecom Total 1 Corporate, Eliminations and Other Total (Dollars in millions) Operating revenues Service $ 741 $ 170 $ 60 $ 230 $ 24 $ 995 Equipment and product sales 225 — — — 37 262 Total operating revenues 966 171 60 230 61 1,257 Cost of services (excluding Depreciation, amortization and accretion reported below) 176 63 26 88 20 284 Cost of equipment and products 233 — — — 31 264 Selling, general and administrative 326 47 14 61 10 397 Depreciation, amortization and accretion 169 34 17 50 8 227 (Gain) loss on asset disposals, net 2 (7 ) — (7 ) — (5 ) (Gain) loss sale of business and other exit costs, net (2 ) — — — — (2 ) (Gain) loss on license sales and exchanges, net (2 ) — — — — (2 ) Operating income (loss) 64 34 2 37 (7 ) 94 Equity in earnings of unconsolidated entities 44 — — — — 44 Interest and dividend income 6 3 — 3 — 9 Interest expense (29 ) 1 — — (14 ) (43 ) Other, net — — — — — — Income (loss) before income taxes 85 38 3 40 (21 ) 104 Income tax expense (benefit) 2 27 10 (3 ) 34 Net income (loss) 58 31 (19 ) 70 Add back: Depreciation, amortization and accretion 169 34 17 50 8 227 (Gain) loss on asset disposals, net 2 (7 ) — (7 ) — (5 ) (Gain) loss sale of business and other exit costs, net (2 ) — — — — (2 ) (Gain) loss on license sales and exchanges, net (2 ) — — — — (2 ) Interest expense 29 (1 ) — — 14 43 Income tax expense (benefit) 2 27 10 (3 ) 34 Adjusted EBITDA 3 $ 281 $ 63 $ 20 $ 83 $ 1 $ 365 Investments in unconsolidated entities $ 468 $ 4 $ — $ 4 $ 35 $ 507 Total assets $ 8,229 $ 1,353 $ 641 $ 1,986 $ 572 $ 10,787 Capital expenditures $ 102 $ 29 $ 13 $ 42 $ 3 $ 147 Numbers may not foot due to rounding. TDS Telecom Three Months Ended or as of March 31, 2018 U.S. Cellular Wireline Cable TDS Telecom Total 1 Corporate, Eliminations and Other Total (Dollars in millions) Operating revenues Service $ 724 $ 175 $ 55 $ 230 $ 24 $ 978 Equipment and product sales 218 — — — 29 247 Total operating revenues 942 175 55 231 52 1,225 Cost of services (excluding Depreciation, amortization and accretion reported below) 179 65 26 90 19 288 Cost of equipment and products 219 — — — 27 246 Selling, general and administrative 326 47 13 60 9 395 Depreciation, amortization and accretion 159 37 17 54 8 221 (Gain) loss on asset disposals, net 1 — — — 1 2 (Gain) loss on license sales and exchanges, net (7 ) — — — — (7 ) Operating income (loss) 65 26 (1 ) 25 (10 ) 80 Equity in earnings of unconsolidated entities 38 — — — — 38 Interest and dividend income 4 1 — 1 — 5 Interest expense (29 ) — — — (14 ) (43 ) Other, net (1 ) 1 — 1 1 1 Income (loss) before income taxes 77 28 (1 ) 27 (23 ) 81 Income tax expense (benefit) 2 22 6 (4 ) 24 Net income (loss) 55 21 (19 ) 57 Add back: Depreciation, amortization and accretion 159 37 17 54 8 221 (Gain) loss on asset disposals, net 1 — — — 1 2 (Gain) loss on license sales and exchanges, net (7 ) — — — — (7 ) Interest expense 29 — — — 14 43 Income tax expense (benefit) 2 22 6 (4 ) 24 Adjusted EBITDA 3 $ 259 $ 65 $ 16 $ 81 $ — $ 340 Investments in unconsolidated entities $ 450 $ 4 $ — $ 4 $ 34 $ 488 Total assets $ 7,048 $ 1,264 $ 644 $ 1,901 $ 532 $ 9,481 Capital expenditures $ 70 $ 29 $ 11 $ 40 $ 5 $ 115 Numbers may not foot due to rounding. 1 TDS Telecom Total includes eliminations between the Wireline and Cable segments. 2 Income tax expense (benefit) is not provided at the individual segment level for Wireline and Cable. TDS calculates income tax expense for “TDS Telecom Total”. 3 Adjusted earnings before interest, taxes, depreciation, amortization and accretion (Adjusted EBITDA) is a segment measure reported to the chief operating decision maker for purposes of making decisions about allocating resources to the segments and 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. |
Basis of Presentation (Policies
Basis of Presentation (Policies) | 3 Months Ended |
Mar. 31, 2019 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Principles of Consolidation | The accounting policies of Telephone and Data Systems, Inc. (TDS) conform to accounting principles generally accepted in the United States of America (GAAP) as set forth in the Financial Accounting Standards Board (FASB) Accounting Standards Codification (ASC). Unless otherwise specified, references to accounting provisions and GAAP in these notes refer to the requirements of the FASB ASC. The consolidated financial statements include the accounts of TDS and subsidiaries in which it has a controlling financial interest, including TDS’ 82% -owned subsidiary, United States Cellular Corporation (U.S. Cellular) and TDS’ wholly-owned subsidiary, TDS Telecommunications LLC (TDS Telecom). In addition, the consolidated financial statements include certain entities in which TDS has a variable interest that require consolidation under GAAP. All material intercompany accounts and transactions have been eliminated. TDS’ business segments reflected in this Quarterly Report on Form 10-Q for the period ended March 31, 2019 , are U.S. Cellular, Wireline, and Cable. TDS’ non-reportable other business activities are presented as “Corporate, Eliminations and Other”, which includes the operations of TDS’ wholly-owned hosted and managed services (HMS) subsidiary, which operates under the OneNeck IT Solutions brand, and its wholly-owned subsidiary Suttle-Straus, Inc. (Suttle-Straus). HMS’ and Suttle-Straus’ financial results were not significant to TDS’ operations. All of TDS’ segments operate only in the United States, except for HMS, which includes an insignificant foreign operation. See Note 11 — Business Segment Information for summary financial information on each business segment. |
Basis of Accounting | The unaudited consolidated financial statements included herein have been prepared by TDS pursuant to the rules and regulations of the Securities and Exchange Commission (SEC). Certain information and disclosures normally included in annual financial statements prepared in accordance with GAAP have been condensed or omitted pursuant to such rules and regulations. However, TDS believes that the disclosures included herein are adequate to make the information presented not misleading. Certain numbers included herein are rounded to millions for ease of presentation; however, certain calculated amounts and percentages are determined using the unrounded numbers. These unaudited consolidated financial statements should be read in conjunction with the consolidated financial statements and the notes thereto included in TDS’ Annual Report on Form 10-K (Form 10-K) for the year ended December 31, 2018 . The accompanying unaudited consolidated financial statements contain all adjustments (consisting of normal recurring items, unless otherwise disclosed) necessary for the fair statement of TDS’ financial position as of March 31, 2019 and December 31, 2018 and its results of operations, comprehensive income, cash flows and changes in equity for the three months ended March 31, 2019 and 2018 . These results are not necessarily indicative of the results to be expected for the full year. TDS has not changed its significant accounting and reporting policies from those disclosed in its Form 10-K for the year ended December 31, 2018 , except as disclosed in Note 8 — Leases . |
Recently Adopted Accounting Pronouncements and Recently Issued Accounting Pronouncements Not Yet Adopted | In June 2016, the FASB issued Accounting Standards Update 2016-13, Financial Instruments - Credit Losses: Measurement of Credit Losses on Financial Instruments (ASU 2016-13). ASU 2016-13 requires entities to use a new forward-looking, expected loss model to estimate credit losses. It also requires additional disclosure relating to the credit quality of trade and other receivables, including information relating to management’s estimate of credit allowances. TDS is required to adopt ASU 2016-13 on January 1, 2020, using the modified retrospective approach. Early adoption is permitted; however, TDS does not intend to adopt early. TDS is evaluating the effects that adoption of ASU 2016-13 will have on its financial position, results of operations and disclosures. In February 2016, the FASB issued Accounting Standards Update 2016-02, Leases and has since amended the standard with Accounting Standards Updates 2018-01, Leases: Land Easement Practical Expedient for Transition to Topic 842 , Accounting Standards Update 2018-10, Codification Improvements to Topic 842, Leases , Accounting Standards Update 2018-11, Leases: Targeted Improvements, and Accounting Standards Update 2018-20, Leases: Narrow-Scope Improvements for Lessors , collectively referred to as ASC 842. This standard replaces the previous lease accounting standard under ASC 840 - Leases and requires lessees to record a right-of-use (ROU) asset and lease liability for the majority of leases. TDS adopted the provisions of ASC 842 on January 1, 2019, using a modified retrospective method. Under this method, TDS elected to apply the new accounting standard only to the most recent period presented, recognizing the cumulative effect of the accounting change, if any, as an adjustment to the beginning balance of retained earnings. Accordingly, prior periods have not been recast to reflect the new accounting standard. The cumulative effect of applying the provisions of ASC 842 had no impact on retained earnings as of January 1, 2019. |
Revenue from Contract with Customer | TDS has certain contracts at U.S. Cellular and TDS Telecom in which it bills an amount equal to a fixed per-unit price multiplied by a variable quantity (e.g., certain roaming agreements with other carriers). Because TDS invoices for such items in an amount that corresponds directly with the value of the performance completed to date, TDS may recognize revenue in that amount. As a practical expedient, these contracts are excluded from the estimate of future revenues expected to be recognized related to performance obligations that are unsatisfied as of the end of a reporting period. TDS records amounts collected from customers and remitted to governmental authorities on a net basis within a liability account if the amount is assessed upon the customer and TDS merely acts as an agent in collecting the amount on behalf of the imposing governmental authority. If the amount is assessed upon TDS, then amounts collected from customers are recorded in Service revenues and amounts remitted to governmental authorities are recorded in Selling, general and administrative expenses in the Consolidated Statement of Operations. The amounts recorded gross in revenues that are billed to customers and remitted to governmental authorities totaled $17 million and $23 million for the three months ended March 31, 2019 and 2018 , respectively. As a practical expedient, revenue related to contracts of less than one year, generally month-to-month contracts, are excluded from these estimates. |
Lessee Agreements | A lease is generally present in a contract if the lessee controls the use of identified property, plant or equipment for a period of time in exchange for consideration. Nearly all of TDS’ leases are classified as operating leases, although it does have a small number of finance leases. TDS’ most significant leases are for land and tower spaces, network facilities, retail spaces, and offices. TDS has agreements with both lease and nonlease components, which are accounted for separately. As part of the present value calculation for the lease liabilities, TDS uses an incremental borrowing rate as the rates implicit in the leases are not readily determinable. The incremental borrowing rates used for lease accounting are based on TDS' unsecured rates, adjusted to approximate what TDS would have to borrow on a collateralized basis over a similar period of time as the recognized lease term. TDS applies the incremental borrowing rates to lease components using a portfolio approach based upon the length of the lease term and the reporting entity in which the lease resides. The cost of nonlease components in TDS’ lease portfolio (e.g., utilities and common area maintenance) are not typically predetermined at lease commencement and are expensed as incurred at their relative standalone price. Variable lease expense occurs when, subsequent to the lease commencement, lease payments are made that were not originally included in the lease liability calculation. TDS’ variable lease payments are primarily a result of leases with escalations that are tied to an index. The incremental changes due to the index changes are recorded as variable lease expense and are not included in the ROU assets or lease liabilities. Lease term recognition determines the periods to allocate expense and also has a significant impact on the lease liability and ROU asset calculations. Many of TDS’ leases include renewal and early termination options. At lease commencement, the lease terms include options to extend the lease when TDS is reasonably certain that it will exercise the options. The lease terms do not include early termination options unless TDS is reasonably certain to exercise the options. Certain asset classes have similar lease characteristics; therefore, TDS has applied the portfolio approach for lease term recognition for its tower space, retail, and certain ground lease asset classes. |
Lessor Agreements | TDS’ most significant lessor leases are for tower space and colocation space. All of TDS’ lessor leases are classified as operating leases. A lease is generally present in a contract if the lessee controls the use of identified property, plant, or equipment for a period of time in exchange for consideration. TDS’ lessor agreements with lease and nonlease components are generally accounted for separately; however, certain service agreements with insignificant lease components are accounted for as nonlease transactions. Lease term recognition determines the periods to allocate revenue over the term of the lease. Many of TDS’ leases include renewal and early termination options. At lease commencement, lease terms include options to extend the lease when TDS is reasonably certain that lessees will exercise the options. Lease terms would not include periods after the date of a termination option that lessees are reasonably certain to exercise. Variable lease income occurs when, subsequent to the lease commencement, lease payments are received that were not originally included in the lease receivable calculation. TDS’ variable lease income is primarily a result of leases with escalations that are tied to an index. The incremental increases due to the index changes are recorded as variable lease income. |
Variable Interest Entities | TDS consolidates VIEs in which it has a controlling financial interest as defined by GAAP and is therefore deemed the primary beneficiary. A controlling financial interest will have both of the following characteristics: (a) the power to direct the VIE activities that most significantly impact economic performance; and (b) the obligation to absorb the VIE losses and the right to receive benefits that are significant to the VIE. TDS reviews these criteria initially at the time it enters into agreements and subsequently when events warranting reconsideration occur. These VIEs have risks similar to those described in the “Risk Factors” in TDS’ Form 10-K for the year ended December 31, 2018 . |
Basis of Presentation (Tables)
Basis of Presentation (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Reconciliation of cash, cash equivalents and restricted cash | The following table provides a reconciliation of Cash and cash equivalents and restricted cash reported in the Consolidated Balance Sheet to the total of the amounts in the Consolidated Statement of Cash Flows as of March 31, 2019 and December 31, 2018 . March 31, 2019 December 31, 2018 (Dollars in millions) Cash and cash equivalents $ 959 $ 921 Restricted cash included in Other current assets 7 6 Cash, cash equivalents and restricted cash in the statement of cash flows $ 966 $ 927 |
Revenue Recognition (Tables)
Revenue Recognition (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Revenue from Contract with Customer [Abstract] | |
Disaggregation of Revenues | In the following table, revenue is disaggregated by type of service and timing of revenue recognition. Service revenues are recognized over time and Equipment sales are point in time. TDS Telecom Three Months Ended March 31, 2019 U.S. Cellular Wireline Cable TDS Telecom Total 1 Corporate, Eliminations and Other Total (Dollars in millions) Revenues from contracts with customers: Type of service: Retail service $ 659 $ — $ — $ — $ — $ 659 Inbound roaming 34 — — — — 34 Residential — 81 49 131 — 131 Commercial — 43 10 54 — 54 Wholesale — 45 — 45 — 45 Other service 32 — — — 18 50 Service revenues from contracts with customers 725 170 60 229 18 973 Equipment and product sales 225 — — — 37 262 Total revenues from contracts with customers 2 $ 950 $ 170 $ 60 $ 230 $ 55 $ 1,235 Numbers may not foot due to rounding. TDS Telecom Three Months Ended March 31, 2018 U.S. Cellular Wireline Cable TDS Telecom Total 1 Corporate, Eliminations and Other Total (Dollars in millions) Revenues from contracts with customers: Type of service: Retail service $ 649 $ — $ — $ — $ — $ 649 Inbound roaming 27 — — — — 27 Residential — 80 46 126 — 126 Commercial — 48 10 57 — 57 Wholesale — 47 — 47 — 47 Other service 32 — — — 18 50 Service revenues from contracts with customers 708 175 55 230 18 956 Equipment and product sales 218 — — — 29 247 Total revenues from contracts with customers 2 $ 926 $ 175 $ 55 $ 230 $ 47 $ 1,203 Numbers may not foot due to rounding. 1 TDS Telecom Total includes eliminations between the Wireline and Cable segments. 2 Revenue line items in this table will not agree to amounts presented in the Consolidated Statement of Operations as the balances do not include all sources of revenues. |
Contract with Customer, Assets and Liabilities | The accounts receivable balance related to amounts billed and not paid on contracts with customers, net of allowances, is shown in the table below. March 31, 2019 December 31, 2018 (Dollars in millions) Accounts receivable Customer and agents $ 963 $ 987 Other 71 73 Total 1 $ 1,034 $ 1,060 1 Accounts receivable line items presented in this table will not agree to amounts presented in the Consolidated Balance Sheet as certain receivables are excluded from these balances. The following table provides a rollforward of contract assets from contracts with customers, which are recorded in Other current assets and Other assets and deferred charges in the Consolidated Balance Sheet. Contract Assets (Dollars in millions) Balance at December 31, 2018 $ 11 Contract additions 5 Reclassified to receivables (5 ) Balance at March 31, 2019 $ 11 The following table provides a rollforward of contract liabilities from contracts with customers, which are recorded in Customer deposits and deferred revenues and Other deferred liabilities and credits in the Consolidated Balance Sheet. Contract Liabilities (Dollars in millions) Balance at December 31, 2018 $ 203 Contract additions 79 Terminated contracts (2 ) Revenue recognized (70 ) Balance at March 31, 2019 $ 210 |
Remaining Performance Obligations | The following table includes estimated service revenue expected to be recognized in the future related to performance obligations that are unsatisfied (or partially unsatisfied) at the end of the reporting period. The estimates represent service revenue to be recognized when services are delivered to customers pursuant to service plan contracts and under certain roaming agreements with other carriers. These estimates are based on contracts in place as of March 31, 2019 , and may vary from actual results due to future contract modifications. As a practical expedient, revenue related to contracts of less than one year, generally month-to-month contracts, are excluded from these estimates. Service Revenue (Dollars in millions) Remainder of 2019 $ 335 2020 157 Thereafter 79 Total $ 571 |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Fair Value Disclosures [Abstract] | |
Fair value measurements | TDS has applied the provisions of fair value accounting for purposes of computing the fair value of financial instruments for disclosure purposes as displayed below. Level within the Fair Value Hierarchy March 31, 2019 December 31, 2018 Book Value Fair Value Book Value Fair Value (Dollars in millions) Cash and cash equivalents 1 $ 959 $ 959 $ 921 $ 921 Short-term investments 1 17 17 17 17 Long-term debt Retail 2 1,753 1,768 1,753 1,596 Institutional 2 534 585 534 531 Other 2 179 179 182 182 |
Equipment Installment Plans (Ta
Equipment Installment Plans (Table) | 3 Months Ended |
Mar. 31, 2019 | |
Receivables [Abstract] | |
Equipment installment plan receivables | The following table summarizes equipment installment plan receivables as of March 31, 2019 and December 31, 2018 . March 31, 2019 December 31, 2018 (Dollars in millions) Equipment installment plan receivables, gross $ 975 $ 974 Allowance for credit losses (77 ) (77 ) Equipment installment plan receivables, net $ 898 $ 897 Net balance presented in the Consolidated Balance Sheet as: Accounts receivable — Customers and agents (Current portion) $ 571 $ 560 Other assets and deferred charges (Non-current portion) 327 337 Equipment installment plan receivables, net $ 898 $ 897 |
Equipment installment plan receivables credit categories | The balance and aging of the equipment installment plan receivables on a gross basis by credit category were as follows: March 31, 2019 December 31, 2018 Lower Risk Higher Risk Total Lower Risk Higher Risk Total (Dollars in millions) Unbilled $ 901 $ 13 $ 914 $ 904 $ 17 $ 921 Billed — current 41 1 42 35 1 36 Billed — past due 17 2 19 15 2 17 Equipment installment plan receivables, gross $ 959 $ 16 $ 975 $ 954 $ 20 $ 974 |
Equipment installment plans allowance for credit losses | Activity for the three months ended March 31, 2019 and 2018 , in the allowance for credit losses for equipment installment plan receivables was as follows: March 31, 2019 March 31, 2018 (Dollars in millions) Allowance for credit losses, beginning of period $ 77 $ 65 Bad debts expense 18 14 Write-offs, net of recoveries (18 ) (13 ) Allowance for credit losses, end of period $ 77 $ 66 |
Earnings Per Share (Tables)
Earnings Per Share (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Earnings Per Share [Abstract] | |
Earnings per share | The amounts used in computing earnings per common share and the effects of potentially dilutive securities on the weighted average number of common shares were as follows: Three Months Ended 2019 2018 (Dollars and shares in millions, except per share amounts) Basic earnings per share attributable to TDS shareholders: Net income attributable to TDS shareholders used in basic earnings per share $ 59 $ 39 Adjustments to compute diluted earnings: Noncontrolling interest adjustment (1 ) — Net income attributable to TDS shareholders used in diluted earnings per share $ 58 $ 39 Weighted average number of shares used in basic earnings per share: Common Shares 107 104 Series A Common Shares 7 7 Total 114 111 Effects of dilutive securities 2 2 Weighted average number of shares used in diluted earnings per share 116 113 Basic earnings per share attributable to TDS shareholders $ 0.52 $ 0.35 Diluted earnings per share attributable to TDS shareholders $ 0.50 $ 0.34 |
Intangible Assets (Tables)
Intangible Assets (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Licenses | |
Licenses | Activity related to Licenses for the three months ended March 31, 2019 , is presented below: Licenses (Dollars in millions) Balance at December 31, 2018 $ 2,195 Acquisitions 1 Exchanges - Licenses received 26 Balance at March 31, 2019 $ 2,222 |
Investment in Unconsolidated En
Investment in Unconsolidated Entities (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Equity Method Investments and Joint Ventures [Abstract] | |
Equity and measurement alternative method investments | TDS’ Investments in unconsolidated entities are accounted for using either the equity method or measurement alternative method as shown in the table below. The measurement alternative method was elected for investments without readily determinable fair values formerly accounted for under the cost method. The measurement alternative fair value represents cost minus any impairments plus or minus any observable price changes. TDS did not have an impairment or observable price change related to these investments for the three months ended March 31, 2019 . March 31, 2019 December 31, 2018 (Dollars in millions) Equity method investments $ 485 $ 459 Measurement alternative method investments 22 21 Total investments in unconsolidated entities $ 507 $ 480 |
Equity method investments, summarized results of operations | The following table, which is based in part on information provided by third parties, summarizes the combined results of operations of TDS’ equity method investments. Three Months Ended 2019 2018 (Dollars in millions) Revenues $ 1,696 $ 1,663 Operating expenses 1,221 1,213 Operating income 475 450 Other income (expense), net (6 ) (1 ) Net income $ 469 $ 449 |
Leases (Tables)
Leases (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Leases [Abstract] | |
Schedule of new accounting pronouncements and changes in accounting principles | The cumulative effect of the adoption of ASC 842 on TDS’ Consolidated Balance Sheet is presented below. December 31, 2018 ASC 842 Adjustment January 1, 2019 (Dollars in millions) Prepaid expenses $ 103 $ (13 ) $ 90 Operating lease right-of-use assets — 975 975 Other assets and deferred charges 616 (12 ) 604 Short-term operating lease liabilities — 112 112 Other current liabilities 114 (8 ) 106 Long-term operating lease liabilities — 949 949 Other deferred liabilities and credits 541 (103 ) 438 |
Components of lease expense | The following table shows the components of lease cost included in the Consolidated Statement of Operations: Three Months Ended (Dollars in millions) Operating lease cost $ 43 Variable lease cost 2 Total lease cost $ 45 |
Supplemental cash flow information related to leases | The following table shows supplemental cash flow information related to lease activities: Three Months Ended (Dollars in millions) Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows from operating leases $ 41 ROU assets obtained in exchange for lease obligations: Operating leases $ 25 Finance leases 7 |
Supplemental balance sheet information related to leases | The following table shows the classification of TDS’ operating and finance leases in its Consolidated Balance Sheet: March 31, 2019 (Dollars in millions) Operating Leases Operating lease right-of-use assets $ 965 Short-term operating lease liabilities $ 110 Long-term operating lease liabilities 929 Total operating lease liabilities $ 1,039 Finance Leases Property, plant and equipment $ 17 Less: Accumulated depreciation and amortization 4 Property, plant and equipment, net $ 13 Current portion of long-term debt $ 1 Long-term debt, net 5 Total finance lease liabilities $ 6 |
Schedule of weighted average remaining lease term and weighted average discount rate related to leases | The table below shows a weighted-average analysis for lease term and discount rate for all leases: March 31, 2019 Weighted Average Remaining Lease Term Operating leases 12 years Finance leases 22 years Weighted Average Discount Rate Operating leases 4.5 % Finance leases 6.9 % |
Maturities of lease liabilities | The maturities of lease liabilities are as follows: Operating Leases Finance Leases (Dollars in millions) Remainder of 2019 $ 118 $ 1 2020 161 1 2021 144 — 2022 127 1 2023 111 — Thereafter 764 14 Total lease payments 1 $ 1,425 $ 17 Less: Imputed interest 386 11 Present value of lease liabilities $ 1,039 $ 6 1 Lease payments exclude $11 million of legally binding lease payments for leases signed but not yet commenced. |
Lease income | The following table shows the components of lease income which are included in service revenue in the Consolidated Statement of Operations: Three Months Ended (Dollars in millions) Operating lease income $ 22 |
Maturities of expected lease revenues | The maturities of expected lease payments to be received are as follows: Operating Leases (Dollars in millions) Remainder of 2019 $ 57 2020 70 2021 37 2022 25 2023 13 Thereafter 10 Total future lease maturities $ 212 |
Lease commitments | As of December 31, 2018, future minimum rental payments required under operating leases and rental receipts expected under operating leases that have noncancellable lease terms in excess of one year were as follows: Operating Leases Future Minimum Rental Payments Operating Leases Future Minimum Rental Receipts (Dollars in millions) 2019 $ 170 $ 59 2020 158 48 2021 142 35 2022 126 23 2023 110 10 Thereafter 784 7 Total $ 1,490 $ 182 |
Variable Interest Entities (Tab
Variable Interest Entities (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Variable Interest Entities [Abstract] | |
Consolidated VIE assets and liabilities | The following table presents the classification and balances of the consolidated VIEs’ assets and liabilities in TDS’ Consolidated Balance Sheet. March 31, 2019 December 31, 2018 (Dollars in millions) Assets Cash and cash equivalents $ 8 $ 9 Short-term investments 17 17 Accounts receivable 617 609 Inventory, net 4 5 Other current assets 5 5 Licenses 647 647 Property, plant and equipment, net 85 88 Operating lease right-of-use assets 37 — Other assets and deferred charges 338 347 Total assets $ 1,758 $ 1,727 Liabilities Current liabilities $ 34 $ 31 Long-term operating lease liabilities 34 — Deferred liabilities and credits 12 15 Total liabilities $ 80 $ 46 |
Noncontrolling Interests (Table
Noncontrolling Interests (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Consolidation, Less than Wholly Owned Subsidiary, Parent Ownership Interest, Change Due to Net Income Attributable to Parent and Effects of Changes, Net [Abstract] | |
Noncontrolling interests | The following schedule discloses the effects of Net income attributable to TDS shareholders and changes in TDS’ ownership interest in U.S. Cellular on TDS’ equity: Three Months Ended March 31, 2019 2018 (Dollars in millions) Net income attributable to TDS shareholders $ 59 $ 39 Transfers to noncontrolling interests Change in TDS' Capital in excess of par value from U.S. Cellular's issuance of U.S. Cellular shares (2 ) (2 ) Change in TDS' Capital in excess of par value from U.S. Cellular's repurchases of U.S. Cellular shares — — Purchase of ownership in subsidiaries from noncontrolling interests — — Net transfers to noncontrolling interests (2 ) (2 ) Change from net income attributable to TDS and transfers to noncontrolling interests $ 57 $ 37 |
Business Segment Information (T
Business Segment Information (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Segment Reporting [Abstract] | |
Business segment information | Financial data for TDS’ reportable segments for the three month periods ended, or as of March 31, 2019 and 2018 , is as follows. See Note 1 — Basis of Presentation for additional information. TDS Telecom Three Months Ended or as of March 31, 2019 U.S. Cellular Wireline Cable TDS Telecom Total 1 Corporate, Eliminations and Other Total (Dollars in millions) Operating revenues Service $ 741 $ 170 $ 60 $ 230 $ 24 $ 995 Equipment and product sales 225 — — — 37 262 Total operating revenues 966 171 60 230 61 1,257 Cost of services (excluding Depreciation, amortization and accretion reported below) 176 63 26 88 20 284 Cost of equipment and products 233 — — — 31 264 Selling, general and administrative 326 47 14 61 10 397 Depreciation, amortization and accretion 169 34 17 50 8 227 (Gain) loss on asset disposals, net 2 (7 ) — (7 ) — (5 ) (Gain) loss sale of business and other exit costs, net (2 ) — — — — (2 ) (Gain) loss on license sales and exchanges, net (2 ) — — — — (2 ) Operating income (loss) 64 34 2 37 (7 ) 94 Equity in earnings of unconsolidated entities 44 — — — — 44 Interest and dividend income 6 3 — 3 — 9 Interest expense (29 ) 1 — — (14 ) (43 ) Other, net — — — — — — Income (loss) before income taxes 85 38 3 40 (21 ) 104 Income tax expense (benefit) 2 27 10 (3 ) 34 Net income (loss) 58 31 (19 ) 70 Add back: Depreciation, amortization and accretion 169 34 17 50 8 227 (Gain) loss on asset disposals, net 2 (7 ) — (7 ) — (5 ) (Gain) loss sale of business and other exit costs, net (2 ) — — — — (2 ) (Gain) loss on license sales and exchanges, net (2 ) — — — — (2 ) Interest expense 29 (1 ) — — 14 43 Income tax expense (benefit) 2 27 10 (3 ) 34 Adjusted EBITDA 3 $ 281 $ 63 $ 20 $ 83 $ 1 $ 365 Investments in unconsolidated entities $ 468 $ 4 $ — $ 4 $ 35 $ 507 Total assets $ 8,229 $ 1,353 $ 641 $ 1,986 $ 572 $ 10,787 Capital expenditures $ 102 $ 29 $ 13 $ 42 $ 3 $ 147 Numbers may not foot due to rounding. TDS Telecom Three Months Ended or as of March 31, 2018 U.S. Cellular Wireline Cable TDS Telecom Total 1 Corporate, Eliminations and Other Total (Dollars in millions) Operating revenues Service $ 724 $ 175 $ 55 $ 230 $ 24 $ 978 Equipment and product sales 218 — — — 29 247 Total operating revenues 942 175 55 231 52 1,225 Cost of services (excluding Depreciation, amortization and accretion reported below) 179 65 26 90 19 288 Cost of equipment and products 219 — — — 27 246 Selling, general and administrative 326 47 13 60 9 395 Depreciation, amortization and accretion 159 37 17 54 8 221 (Gain) loss on asset disposals, net 1 — — — 1 2 (Gain) loss on license sales and exchanges, net (7 ) — — — — (7 ) Operating income (loss) 65 26 (1 ) 25 (10 ) 80 Equity in earnings of unconsolidated entities 38 — — — — 38 Interest and dividend income 4 1 — 1 — 5 Interest expense (29 ) — — — (14 ) (43 ) Other, net (1 ) 1 — 1 1 1 Income (loss) before income taxes 77 28 (1 ) 27 (23 ) 81 Income tax expense (benefit) 2 22 6 (4 ) 24 Net income (loss) 55 21 (19 ) 57 Add back: Depreciation, amortization and accretion 159 37 17 54 8 221 (Gain) loss on asset disposals, net 1 — — — 1 2 (Gain) loss on license sales and exchanges, net (7 ) — — — — (7 ) Interest expense 29 — — — 14 43 Income tax expense (benefit) 2 22 6 (4 ) 24 Adjusted EBITDA 3 $ 259 $ 65 $ 16 $ 81 $ — $ 340 Investments in unconsolidated entities $ 450 $ 4 $ — $ 4 $ 34 $ 488 Total assets $ 7,048 $ 1,264 $ 644 $ 1,901 $ 532 $ 9,481 Capital expenditures $ 70 $ 29 $ 11 $ 40 $ 5 $ 115 Numbers may not foot due to rounding. 1 TDS Telecom Total includes eliminations between the Wireline and Cable segments. 2 Income tax expense (benefit) is not provided at the individual segment level for Wireline and Cable. TDS calculates income tax expense for “TDS Telecom Total”. 3 Adjusted earnings before interest, taxes, depreciation, amortization and accretion (Adjusted EBITDA) is a segment measure reported to the chief operating decision maker for purposes of making decisions about allocating resources to the segments and 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. |
Basis of Presentation - Narrati
Basis of Presentation - Narrative (Details) | Mar. 31, 2019 |
U.S. Cellular | |
Basis of Presentation [Line Items] | |
TDS ownership of U.S. Cellular | 82.00% |
Basis of Presentation - Restric
Basis of Presentation - Restricted Cash, Cash Equivalents and Restricted Cash (Details) - USD ($) $ in Millions | Mar. 31, 2019 | Dec. 31, 2018 | Mar. 31, 2018 | Dec. 31, 2017 |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||||
Cash and cash equivalents | $ 959 | $ 921 | ||
Restricted cash included in Other current assets | 7 | 6 | ||
Cash, cash equivalents and restricted cash in the statement of cash flows | $ 966 | $ 927 | $ 783 | $ 622 |
Revenue Recognition - Disaggreg
Revenue Recognition - Disaggregation Of Revenue (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Disaggregation of revenue | ||
Revenue from contracts with customers | $ 1,235 | $ 1,203 |
Transferred over time | ||
Disaggregation of revenue | ||
Revenue from contracts with customers | 973 | 956 |
Transferred over time | Retail service | ||
Disaggregation of revenue | ||
Revenue from contracts with customers | 659 | 649 |
Transferred over time | Inbound roaming | ||
Disaggregation of revenue | ||
Revenue from contracts with customers | 34 | 27 |
Transferred over time | Residential | ||
Disaggregation of revenue | ||
Revenue from contracts with customers | 131 | 126 |
Transferred over time | Commercial | ||
Disaggregation of revenue | ||
Revenue from contracts with customers | 54 | 57 |
Transferred over time | Wholesale | ||
Disaggregation of revenue | ||
Revenue from contracts with customers | 45 | 47 |
Transferred over time | Other service | ||
Disaggregation of revenue | ||
Revenue from contracts with customers | 50 | 50 |
Transferred at point in time | Equipment and product sales | ||
Disaggregation of revenue | ||
Revenue from contracts with customers | 262 | 247 |
U.S. Cellular | ||
Disaggregation of revenue | ||
Revenue from contracts with customers | 950 | 926 |
U.S. Cellular | Transferred over time | ||
Disaggregation of revenue | ||
Revenue from contracts with customers | 725 | 708 |
U.S. Cellular | Transferred over time | Retail service | ||
Disaggregation of revenue | ||
Revenue from contracts with customers | 659 | 649 |
U.S. Cellular | Transferred over time | Inbound roaming | ||
Disaggregation of revenue | ||
Revenue from contracts with customers | 34 | 27 |
U.S. Cellular | Transferred over time | Residential | ||
Disaggregation of revenue | ||
Revenue from contracts with customers | 0 | 0 |
U.S. Cellular | Transferred over time | Commercial | ||
Disaggregation of revenue | ||
Revenue from contracts with customers | 0 | 0 |
U.S. Cellular | Transferred over time | Wholesale | ||
Disaggregation of revenue | ||
Revenue from contracts with customers | 0 | 0 |
U.S. Cellular | Transferred over time | Other service | ||
Disaggregation of revenue | ||
Revenue from contracts with customers | 32 | 32 |
U.S. Cellular | Transferred at point in time | Equipment and product sales | ||
Disaggregation of revenue | ||
Revenue from contracts with customers | 225 | 218 |
TDS Telecom Total | ||
Disaggregation of revenue | ||
Revenue from contracts with customers | 230 | 230 |
TDS Telecom Total | Transferred over time | ||
Disaggregation of revenue | ||
Revenue from contracts with customers | 229 | 230 |
TDS Telecom Total | Transferred over time | Retail service | ||
Disaggregation of revenue | ||
Revenue from contracts with customers | 0 | 0 |
TDS Telecom Total | Transferred over time | Inbound roaming | ||
Disaggregation of revenue | ||
Revenue from contracts with customers | 0 | 0 |
TDS Telecom Total | Transferred over time | Residential | ||
Disaggregation of revenue | ||
Revenue from contracts with customers | 131 | 126 |
TDS Telecom Total | Transferred over time | Commercial | ||
Disaggregation of revenue | ||
Revenue from contracts with customers | 54 | 57 |
TDS Telecom Total | Transferred over time | Wholesale | ||
Disaggregation of revenue | ||
Revenue from contracts with customers | 45 | 47 |
TDS Telecom Total | Transferred over time | Other service | ||
Disaggregation of revenue | ||
Revenue from contracts with customers | 0 | 0 |
TDS Telecom Total | Transferred at point in time | Equipment and product sales | ||
Disaggregation of revenue | ||
Revenue from contracts with customers | 0 | 0 |
TDS Telecom Wireline | ||
Disaggregation of revenue | ||
Revenue from contracts with customers | 170 | 175 |
TDS Telecom Wireline | Transferred over time | ||
Disaggregation of revenue | ||
Revenue from contracts with customers | 170 | 175 |
TDS Telecom Wireline | Transferred over time | Retail service | ||
Disaggregation of revenue | ||
Revenue from contracts with customers | 0 | 0 |
TDS Telecom Wireline | Transferred over time | Inbound roaming | ||
Disaggregation of revenue | ||
Revenue from contracts with customers | 0 | 0 |
TDS Telecom Wireline | Transferred over time | Residential | ||
Disaggregation of revenue | ||
Revenue from contracts with customers | 81 | 80 |
TDS Telecom Wireline | Transferred over time | Commercial | ||
Disaggregation of revenue | ||
Revenue from contracts with customers | 43 | 48 |
TDS Telecom Wireline | Transferred over time | Wholesale | ||
Disaggregation of revenue | ||
Revenue from contracts with customers | 45 | 47 |
TDS Telecom Wireline | Transferred over time | Other service | ||
Disaggregation of revenue | ||
Revenue from contracts with customers | 0 | 0 |
TDS Telecom Wireline | Transferred at point in time | Equipment and product sales | ||
Disaggregation of revenue | ||
Revenue from contracts with customers | 0 | 0 |
TDS Telecom Cable | ||
Disaggregation of revenue | ||
Revenue from contracts with customers | 60 | 55 |
TDS Telecom Cable | Transferred over time | ||
Disaggregation of revenue | ||
Revenue from contracts with customers | 60 | 55 |
TDS Telecom Cable | Transferred over time | Retail service | ||
Disaggregation of revenue | ||
Revenue from contracts with customers | 0 | 0 |
TDS Telecom Cable | Transferred over time | Inbound roaming | ||
Disaggregation of revenue | ||
Revenue from contracts with customers | 0 | 0 |
TDS Telecom Cable | Transferred over time | Residential | ||
Disaggregation of revenue | ||
Revenue from contracts with customers | 49 | 46 |
TDS Telecom Cable | Transferred over time | Commercial | ||
Disaggregation of revenue | ||
Revenue from contracts with customers | 10 | 10 |
TDS Telecom Cable | Transferred over time | Wholesale | ||
Disaggregation of revenue | ||
Revenue from contracts with customers | 0 | 0 |
TDS Telecom Cable | Transferred over time | Other service | ||
Disaggregation of revenue | ||
Revenue from contracts with customers | 0 | 0 |
TDS Telecom Cable | Transferred at point in time | Equipment and product sales | ||
Disaggregation of revenue | ||
Revenue from contracts with customers | 0 | 0 |
Corporate, Eliminations and Other | ||
Disaggregation of revenue | ||
Revenue from contracts with customers | 55 | 47 |
Corporate, Eliminations and Other | Transferred over time | ||
Disaggregation of revenue | ||
Revenue from contracts with customers | 18 | 18 |
Corporate, Eliminations and Other | Transferred over time | Retail service | ||
Disaggregation of revenue | ||
Revenue from contracts with customers | 0 | 0 |
Corporate, Eliminations and Other | Transferred over time | Inbound roaming | ||
Disaggregation of revenue | ||
Revenue from contracts with customers | 0 | 0 |
Corporate, Eliminations and Other | Transferred over time | Residential | ||
Disaggregation of revenue | ||
Revenue from contracts with customers | 0 | 0 |
Corporate, Eliminations and Other | Transferred over time | Commercial | ||
Disaggregation of revenue | ||
Revenue from contracts with customers | 0 | 0 |
Corporate, Eliminations and Other | Transferred over time | Wholesale | ||
Disaggregation of revenue | ||
Revenue from contracts with customers | 0 | 0 |
Corporate, Eliminations and Other | Transferred over time | Other service | ||
Disaggregation of revenue | ||
Revenue from contracts with customers | 18 | 18 |
Corporate, Eliminations and Other | Transferred at point in time | Equipment and product sales | ||
Disaggregation of revenue | ||
Revenue from contracts with customers | $ 37 | $ 29 |
Revenue Recognition - Accounts
Revenue Recognition - Accounts Receivable (Details) - USD ($) $ in Millions | Mar. 31, 2019 | Dec. 31, 2018 |
Accounts receivable [Line Items] | ||
Customer and agents | $ 968 | $ 992 |
Other | 99 | 107 |
Accounts receivable from contract with customer | ||
Accounts receivable [Line Items] | ||
Customer and agents | 963 | 987 |
Other | 71 | 73 |
Total | $ 1,034 | $ 1,060 |
Revenue Recognition - Contract
Revenue Recognition - Contract Assets (Details) $ in Millions | 3 Months Ended |
Mar. 31, 2019USD ($) | |
Contract Assets | |
Balance, beginning of period | $ 11 |
Contract additions | 5 |
Reclassified to receivables | (5) |
Balance, end of period | $ 11 |
Revenue Recognition - Contrac_2
Revenue Recognition - Contract Liabilities (Details) $ in Millions | 3 Months Ended |
Mar. 31, 2019USD ($) | |
Contract Liabilities | |
Balance, beginning of period | $ 203 |
Contract additions | 79 |
Terminated contracts | (2) |
Revenue recognized | (70) |
Balance, end of period | $ 210 |
Revenue Recognition - Performan
Revenue Recognition - Performance Obligations (Details) $ in Millions | Mar. 31, 2019USD ($) |
Revenue from Contract with Customer [Abstract] | |
Remaining performance obligation | $ 571 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2019-04-01 | |
Revenue from Contract with Customer [Abstract] | |
Remaining performance obligation | $ 335 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Expected timing of remaining performance obligation, period | 9 months |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2020-01-01 | |
Revenue from Contract with Customer [Abstract] | |
Remaining performance obligation | $ 157 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Expected timing of remaining performance obligation, period | 1 year |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2021-01-01 | |
Revenue from Contract with Customer [Abstract] | |
Remaining performance obligation | $ 79 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Expected timing of remaining performance obligation, period |
Revenue Recognition - Narrative
Revenue Recognition - Narrative (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Revenue from Contract with Customer [Abstract] | ||
Amounts recorded gross in revenues that are billed to customers and remitted to governmental authorities | $ 17 | $ 23 |
Fair Value Measurements (Detail
Fair Value Measurements (Details) - USD ($) $ in Millions | Mar. 31, 2019 | Dec. 31, 2018 |
Financial Instruments | ||
Cash and cash equivalents | $ 959 | $ 921 |
Short-term investments | $ 17 | 17 |
7.0% Senior Notes | ||
Financial Instruments | ||
Interest rate | 7.00% | |
6.875% Senior Notes | ||
Financial Instruments | ||
Interest rate | 6.875% | |
6.625% Senior Notes | ||
Financial Instruments | ||
Interest rate | 6.625% | |
5.875% Senior Notes | ||
Financial Instruments | ||
Interest rate | 5.875% | |
6.95% Senior Notes | U.S. Cellular | ||
Financial Instruments | ||
Interest rate | 6.95% | |
7.25% 2063 Senior Notes | U.S. Cellular | ||
Financial Instruments | ||
Interest rate | 7.25% | |
7.25% 2064 Senior Notes | U.S. Cellular | ||
Financial Instruments | ||
Interest rate | 7.25% | |
6.7% Senior Notes | U.S. Cellular | ||
Financial Instruments | ||
Interest rate | 6.70% | |
Book Value | ||
Financial Instruments | ||
Cash and cash equivalents | $ 959 | 921 |
Short-term investments | 17 | 17 |
Book Value | Retail | ||
Financial Instruments | ||
Long-term debt | 1,753 | 1,753 |
Book Value | Institutional | ||
Financial Instruments | ||
Long-term debt | 534 | 534 |
Book Value | Other | ||
Financial Instruments | ||
Long-term debt | 179 | 182 |
Fair Value | Level 1 | ||
Financial Instruments | ||
Cash and cash equivalents | 959 | 921 |
Short-term investments | 17 | 17 |
Fair Value | Level 2 | Retail | ||
Financial Instruments | ||
Long-term debt | 1,768 | 1,596 |
Fair Value | Level 2 | Institutional | ||
Financial Instruments | ||
Long-term debt | 585 | 531 |
Fair Value | Level 2 | Other | ||
Financial Instruments | ||
Long-term debt | $ 179 | $ 182 |
Interest rate | Institutional and Other | Minimum | ||
Financial Instruments | ||
Fair value assumption, interest rate | 4.25% | 5.03% |
Interest rate | Institutional and Other | Maximum | ||
Financial Instruments | ||
Fair value assumption, interest rate | 7.50% | 8.00% |
Equipment Installment Plans - N
Equipment Installment Plans - Narrative (Details) - USD ($) $ in Millions | Mar. 31, 2019 | Dec. 31, 2018 |
Receivables [Abstract] | ||
Guarantee liability | $ 11 | $ 11 |
Equipment Installment Plans - E
Equipment Installment Plans - EIP Receivables (Details) - USD ($) $ in Millions | Mar. 31, 2019 | Dec. 31, 2018 |
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Equipment installment plan receivables, gross | $ 975 | $ 974 |
Allowance for credit losses | (77) | (77) |
Equipment installment plan receivables, net | 898 | 897 |
Accounts receivable — Customers and agents (Current portion) | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Equipment installment plan receivables, net | 571 | 560 |
Other assets and deferred charges (Non-current portion) | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Equipment installment plan receivables, net | $ 327 | $ 337 |
Equipment Installment Plans - G
Equipment Installment Plans - Gross Receivables by Credit Category (Details) - USD ($) $ in Millions | Mar. 31, 2019 | Dec. 31, 2018 |
Financing Receivable, Recorded Investment [Line Items] | ||
Equipment installment plan receivables, gross | $ 975 | $ 974 |
Unbilled | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Equipment installment plan receivables | 914 | 921 |
Billed | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Equipment installment plan receivables | 42 | 36 |
Equipment installment plan receivables, past due | 19 | 17 |
Lower Risk | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Equipment installment plan receivables, gross | 959 | 954 |
Lower Risk | Unbilled | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Equipment installment plan receivables | 901 | 904 |
Lower Risk | Billed | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Equipment installment plan receivables | 41 | 35 |
Equipment installment plan receivables, past due | 17 | 15 |
Higher Risk | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Equipment installment plan receivables, gross | 16 | 20 |
Higher Risk | Unbilled | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Equipment installment plan receivables | 13 | 17 |
Higher Risk | Billed | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Equipment installment plan receivables | 1 | 1 |
Equipment installment plan receivables, past due | $ 2 | $ 2 |
Equipment Installment Plans - A
Equipment Installment Plans - Allowance for Credit Losses (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Allowance for credit losses | ||
Allowance for credit losses, beginning of period | $ 77 | |
Allowance for credit losses, end of period | 77 | |
Equipment Installment Plan Receivable | ||
Allowance for credit losses | ||
Allowance for credit losses, beginning of period | 77 | $ 65 |
Bad debts expense | 18 | 14 |
Write-offs, net of recoveries | (18) | (13) |
Allowance for credit losses, end of period | $ 77 | $ 66 |
Earnings Per Share - Reconcilia
Earnings Per Share - Reconciliation (Details) - USD ($) $ / shares in Units, shares in Millions, $ in Millions | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Earnings per share | ||
Net income attributable to TDS shareholders used in basic earnings per share | $ 59 | $ 39 |
Noncontrolling interest adjustment | (1) | 0 |
Net income attributable to TDS shareholders used in diluted earnings per share | $ 58 | $ 39 |
Weighted average number of shares used in basic earnings per share (in shares) | 114 | 111 |
Effects of dilutive securities (in shares) | 2 | 2 |
Weighted average number of shares used in diluted earnings per share (in shares) | 116 | 113 |
Basic earnings per share attributable to TDS shareholders (in dollars per share) | $ 0.52 | $ 0.35 |
Diluted earnings per share attributable to TDS shareholders (in dollars per share) | $ 0.50 | $ 0.34 |
Common Shares | ||
Earnings per share | ||
Weighted average number of shares used in basic earnings per share (in shares) | 107 | 104 |
Series A Common Shares | ||
Earnings per share | ||
Weighted average number of shares used in basic earnings per share (in shares) | 7 | 7 |
Earnings Per Share - Narrative
Earnings Per Share - Narrative (Details) - shares shares in Millions | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Antidilutive securities (in shares) | 4 | |
Maximum | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Antidilutive securities (in shares) | 1 |
Intangible Assets (Details)
Intangible Assets (Details) - Licenses $ in Millions | 3 Months Ended |
Mar. 31, 2019USD ($) | |
Licenses | |
Balance, beginning of period | $ 2,195 |
Acquisitions | 1 |
Exchanges - Licenses received | 26 |
Balance, end of period | $ 2,222 |
Intangible Assets - Narrative (
Intangible Assets - Narrative (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Licenses | ||
Advance payments for license acquisitions | $ (135) | $ 0 |
Licenses | ||
Licenses | ||
Commitment to purchase licenses | $ 249 |
Investment in Unconsolidated _2
Investment in Unconsolidated Entities - Narrative (Details) | 3 Months Ended |
Mar. 31, 2019USD ($) | |
Equity Method Investments and Joint Ventures [Abstract] | |
Measurement alternative, impairment | $ 0 |
Measurement alternative, observable price change | $ 0 |
Investment in Unconsolidated _3
Investment in Unconsolidated Entities - Schedule of Investments (Details) - USD ($) $ in Millions | 3 Months Ended | ||
Mar. 31, 2019 | Mar. 31, 2018 | Dec. 31, 2018 | |
Equity Method Investments and Joint Ventures [Abstract] | |||
Equity method investments | $ 485 | $ 459 | |
Measurement alternative method investments | 22 | 21 | |
Total investments in unconsolidated entities | 507 | $ 488 | $ 480 |
Equity method investments, combined income statements | |||
Revenues | 1,696 | 1,663 | |
Operating expenses | 1,221 | 1,213 | |
Operating income | 475 | 450 | |
Other income (expense), net | (6) | (1) | |
Net income | $ 469 | $ 449 |
Leases - Narrative (Details)
Leases - Narrative (Details) - USD ($) $ in Millions | Dec. 31, 2018 | Dec. 31, 2017 |
Leases [Line Items] | ||
Cumulative effect of accounting changes | $ 195 | |
Retained earnings | ||
Leases [Line Items] | ||
Cumulative effect of accounting changes | $ 165 | |
ASC 842 | Retained earnings | ||
Leases [Line Items] | ||
Cumulative effect of accounting changes | $ 0 |
Leases - Consolidated Balance S
Leases - Consolidated Balance Sheet (Details) - USD ($) $ in Millions | Mar. 31, 2019 | Jan. 01, 2019 | Dec. 31, 2018 |
Leases - Consolidated Balance Sheet [Abstract] | |||
Prepaid expenses | $ 91 | $ 90 | $ 103 |
Operating lease right-of-use assets | 965 | 975 | 0 |
Other assets and deferred charges | 720 | 604 | 616 |
Short-term operating lease liabilities | 110 | 112 | 0 |
Other current liabilities | 92 | 106 | 114 |
Long-term operating lease liabilities | 929 | 949 | 0 |
Other deferred liabilities and credits | $ 446 | 438 | $ 541 |
ASC 842 Adjustment | |||
Leases - Consolidated Balance Sheet [Abstract] | |||
Prepaid expenses | (13) | ||
Operating lease right-of-use assets | 975 | ||
Other assets and deferred charges | (12) | ||
Short-term operating lease liabilities | 112 | ||
Other current liabilities | (8) | ||
Long-term operating lease liabilities | 949 | ||
Other deferred liabilities and credits | $ (103) |
Leases - Lease Cost (Details)
Leases - Lease Cost (Details) $ in Millions | 3 Months Ended |
Mar. 31, 2019USD ($) | |
Lease, Cost [Abstract] | |
Operating lease cost | $ 43 |
Variable lease cost | 2 |
Total lease cost | $ 45 |
Leases - Supplemental Cash Flow
Leases - Supplemental Cash Flow Information (Details) $ in Millions | 3 Months Ended |
Mar. 31, 2019USD ($) | |
Cash paid for amounts included in the measurement of lease liabilities: | |
Operating cash flows from operating leases | $ 41 |
ROU assets obtained in exchange for lease obligations: | |
Operating leases | 25 |
Finance leases | $ 7 |
Leases - Classification of Oper
Leases - Classification of Operating and Finance Leases (Details) - USD ($) $ in Millions | Mar. 31, 2019 | Jan. 01, 2019 | Dec. 31, 2018 |
Operating Leases | |||
Operating lease right-of-use assets | $ 965 | $ 975 | $ 0 |
Short-term operating lease liabilities | 110 | 112 | 0 |
Long-term operating lease liabilities | 929 | $ 949 | 0 |
Total operating lease liabilities | 1,039 | ||
Finance Leases | |||
Property, plant and equipment | 12,189 | 12,074 | |
Less: Accumulated depreciation and amortization | 8,907 | 8,728 | |
Property, plant and equipment, net | 3,282 | 3,346 | |
Current portion of long-term debt | 21 | 21 | |
Long-term debt, net | 2,414 | $ 2,418 | |
Total finance lease liabilities | 6 | ||
Operating leases | |||
Operating Leases | |||
Operating lease right-of-use assets | 965 | ||
Short-term operating lease liabilities | 110 | ||
Long-term operating lease liabilities | 929 | ||
Total operating lease liabilities | 1,039 | ||
Finance leases | |||
Finance Leases | |||
Property, plant and equipment | 17 | ||
Less: Accumulated depreciation and amortization | 4 | ||
Property, plant and equipment, net | 13 | ||
Current portion of long-term debt | 1 | ||
Long-term debt, net | 5 | ||
Total finance lease liabilities | $ 6 |
Leases - Lease Term and Discoun
Leases - Lease Term and Discount Rate (Details) | Mar. 31, 2019 |
Weighted Average Remaining Lease Term | |
Operating leases | 12 years |
Finance leases | 22 years |
Weighted Average Discount Rate | |
Operating leases | 4.50% |
Finance leases | 6.90% |
Leases - Maturities of Lease Li
Leases - Maturities of Lease Liabilities (Details) $ in Millions | Mar. 31, 2019USD ($) |
Operating Leases Future Minimum Rental Payments | |
Remainder of 2019 | $ 118 |
2020 | 161 |
2021 | 144 |
2022 | 127 |
2023 | 111 |
Thereafter | 764 |
Total lease payments | 1,425 |
Less: Imputed interest | 386 |
Present value of lease liabilities | 1,039 |
Legally binding lease payments for leases signed but not yet commenced | 11 |
Finance Leases | |
Remainder of 2019 | 1 |
2020 | 1 |
2021 | 0 |
2022 | 1 |
2023 | 0 |
Thereafter | 14 |
Total lease payments | 17 |
Less: Imputed interest | 11 |
Present value of lease liabilities | $ 6 |
Leases - Components of Lease In
Leases - Components of Lease Income (Details) $ in Millions | 3 Months Ended |
Mar. 31, 2019USD ($) | |
Leases [Abstract] | |
Operating lease income | $ 22 |
Leases - Maturities of Expected
Leases - Maturities of Expected Lease Revenues (Details) $ in Millions | Mar. 31, 2019USD ($) |
Leases [Abstract] | |
Remainder of 2019 | $ 57 |
2020 | 70 |
2021 | 37 |
2022 | 25 |
2023 | 13 |
Thereafter | 10 |
Total future lease maturities | $ 212 |
Leases - Minimum Lease Obligati
Leases - Minimum Lease Obligations (Details) $ in Millions | Mar. 31, 2019USD ($) |
Operating Leases Future Minimum Rental Payments | |
2019 | $ 170 |
2020 | 158 |
2021 | 142 |
2022 | 126 |
2023 | 110 |
Thereafter | 784 |
Total | 1,490 |
Operating Leases Future Minimum Rental Receipts | |
2019 | 59 |
2020 | 48 |
2021 | 35 |
2022 | 23 |
2023 | 10 |
Thereafter | 7 |
Total | $ 182 |
Variable Interest Entities - Co
Variable Interest Entities - Consolidated Balance Sheet (Details) - USD ($) $ in Millions | Mar. 31, 2019 | Jan. 01, 2019 | Dec. 31, 2018 |
Assets | |||
Cash and cash equivalents | $ 959 | $ 921 | |
Short-term investments | 17 | 17 | |
Accounts receivable | 968 | 992 | |
Inventory, net | 165 | 150 | |
Other current assets | 28 | 28 | |
Licenses | 2,222 | 2,195 | |
Property, plant and equipment, net | 3,282 | 3,346 | |
Operating lease right-of-use assets | 965 | $ 975 | 0 |
Other assets and deferred charges | 720 | 604 | 616 |
Liabilities | |||
Current liabilities | 965 | 879 | |
Long-term operating lease liabilities | 929 | $ 949 | 0 |
Consolidated Variable Interest Entities | |||
Assets | |||
Cash and cash equivalents | 8 | 9 | |
Short-term investments | 17 | 17 | |
Accounts receivable | 617 | 609 | |
Inventory, net | 4 | 5 | |
Other current assets | 5 | 5 | |
Licenses | 647 | 647 | |
Property, plant and equipment, net | 85 | 88 | |
Operating lease right-of-use assets | 37 | 0 | |
Other assets and deferred charges | 338 | 347 | |
Total assets | 1,758 | 1,727 | |
Liabilities | |||
Current liabilities | 34 | 31 | |
Long-term operating lease liabilities | 34 | 0 | |
Deferred liabilities and credits | 12 | 15 | |
Total liabilities | $ 80 | $ 46 |
Variable Interest Entities - Na
Variable Interest Entities - Narrative (Details) - USD ($) $ in Millions | 3 Months Ended | ||
Mar. 31, 2019 | Mar. 31, 2018 | Dec. 31, 2018 | |
Variable Interest Entity [Line Items] | |||
Investment in unconsolidated entities, maximum exposure | $ 4 | $ 4 | |
Capital contributions, loans or advances | 183 | $ 19 | |
USCC EIP LLC | |||
Variable Interest Entity [Line Items] | |||
Capital contributions, loans or advances | $ 168 | 10 | |
King Street Wireless Out Of Period Adjustment | |||
Variable Interest Entity [Line Items] | |||
Immaterial error correction | During the first quarter of 2018, TDS recorded an out-of-period adjustment attributable to 2016 and 2017 due to errors in the application of accounting guidance applicable to the calculation of Noncontrolling interests with redemption features related to King Street Wireless, Inc. This out-of-period adjustment had the impact of increasing Net income attributable to noncontrolling interests, net of tax, by $6 million and decreasing Net income attributable to TDS shareholders by $6 million for the three months ended March 31, 2018. TDS determined that this adjustment was not material to any of the periods impacted. | ||
King Street Wireless Out Of Period Adjustment | Net income attributable to noncontrolling interests, net of tax | |||
Variable Interest Entity [Line Items] | |||
Out-of-period adjustment | 6 | ||
King Street Wireless Out Of Period Adjustment | Net income attributable to TDS shareholders | |||
Variable Interest Entity [Line Items] | |||
Out-of-period adjustment | $ (6) |
Noncontrolling Interests (Detai
Noncontrolling Interests (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Consolidation, Less than Wholly Owned Subsidiary, Parent Ownership Interest, Change Due to Net Income Attributable to Parent and Effects of Changes, Net [Abstract] | ||
Net income attributable to TDS shareholders | $ 59 | $ 39 |
Transfers to noncontrolling interests | ||
Change in TDS' Capital in excess of par value from U.S. Cellular's issuance of U.S. Cellular shares | (2) | (2) |
Change in TDS' Capital in excess of par value from U.S. Cellular's repurchases of U.S. Cellular shares | 0 | 0 |
Purchase of ownership in subsidiaries from noncontrolling interests | 0 | 0 |
Net transfers to noncontrolling interests | (2) | (2) |
Change from net income attributable to TDS and transfers to noncontrolling interests | $ 57 | $ 37 |
Business Segment Information (D
Business Segment Information (Details) - USD ($) $ in Millions | 3 Months Ended | ||||
Mar. 31, 2019 | Mar. 31, 2018 | Dec. 31, 2018 | |||
Segment Reporting Information [Line Items] | |||||
Total operating revenues | $ 1,257 | $ 1,225 | |||
Selling, general and administrative | 397 | 395 | |||
Depreciation, amortization and accretion | 227 | 221 | |||
(Gain) loss on asset disposals, net | (5) | 2 | |||
(Gain) loss on sale of business and other exit costs, net | (2) | 0 | |||
(Gain) loss on license sales and exchanges, net | (2) | (7) | |||
Operating income | 94 | 80 | |||
Equity in earnings of unconsolidated entities | 44 | 38 | |||
Interest and dividend income | 9 | 5 | |||
Interest expense | (43) | (43) | |||
Other, net | 0 | 1 | |||
Income before income taxes | 104 | 81 | |||
Income tax expense (benefit) | 34 | 24 | |||
Net income | 70 | 57 | |||
Depreciation, amortization and accretion | 227 | 221 | |||
(Gain) loss on asset disposals, net | (5) | 2 | |||
(Gain) loss on sale of business and other exit costs, net | (2) | 0 | |||
(Gain) loss on license sales and exchanges, net | (2) | (7) | |||
Interest expense | 43 | 43 | |||
Income tax expense | 34 | 24 | |||
Adjusted EBITDA | 365 | 340 | |||
Investments in unconsolidated entities | 507 | 488 | $ 480 | ||
Total assets | 10,787 | [1] | 9,481 | $ 9,783 | [1] |
Capital expenditures | 147 | 115 | |||
Service | |||||
Segment Reporting Information [Line Items] | |||||
Total operating revenues | 995 | 978 | |||
Cost of goods and services | 284 | 288 | |||
Equipment and product sales | |||||
Segment Reporting Information [Line Items] | |||||
Total operating revenues | 262 | 247 | |||
Cost of goods and services | 264 | 246 | |||
U.S. Cellular | |||||
Segment Reporting Information [Line Items] | |||||
Total operating revenues | 966 | 942 | |||
Selling, general and administrative | 326 | 326 | |||
Depreciation, amortization and accretion | 169 | 159 | |||
(Gain) loss on asset disposals, net | 2 | 1 | |||
(Gain) loss on sale of business and other exit costs, net | (2) | ||||
(Gain) loss on license sales and exchanges, net | (2) | (7) | |||
Operating income | 64 | 65 | |||
Equity in earnings of unconsolidated entities | 44 | 38 | |||
Interest and dividend income | 6 | 4 | |||
Interest expense | (29) | (29) | |||
Other, net | 0 | (1) | |||
Income before income taxes | 85 | 77 | |||
Income tax expense (benefit) | 27 | 22 | |||
Net income | 58 | 55 | |||
Depreciation, amortization and accretion | 169 | 159 | |||
(Gain) loss on asset disposals, net | 2 | 1 | |||
(Gain) loss on sale of business and other exit costs, net | (2) | ||||
(Gain) loss on license sales and exchanges, net | (2) | (7) | |||
Interest expense | 29 | 29 | |||
Income tax expense | 27 | 22 | |||
Adjusted EBITDA | 281 | 259 | |||
Investments in unconsolidated entities | 468 | 450 | |||
Total assets | 8,229 | 7,048 | |||
Capital expenditures | 102 | 70 | |||
U.S. Cellular | Service | |||||
Segment Reporting Information [Line Items] | |||||
Total operating revenues | 741 | 724 | |||
Cost of goods and services | 176 | 179 | |||
U.S. Cellular | Equipment and product sales | |||||
Segment Reporting Information [Line Items] | |||||
Total operating revenues | 225 | 218 | |||
Cost of goods and services | 233 | 219 | |||
TDS Telecom Total | |||||
Segment Reporting Information [Line Items] | |||||
Total operating revenues | 230 | 231 | |||
Selling, general and administrative | 61 | 60 | |||
Depreciation, amortization and accretion | 50 | 54 | |||
(Gain) loss on asset disposals, net | (7) | 0 | |||
(Gain) loss on sale of business and other exit costs, net | 0 | ||||
(Gain) loss on license sales and exchanges, net | 0 | 0 | |||
Operating income | 37 | 25 | |||
Equity in earnings of unconsolidated entities | 0 | 0 | |||
Interest and dividend income | 3 | 1 | |||
Interest expense | 0 | 0 | |||
Other, net | 0 | 1 | |||
Income before income taxes | 40 | 27 | |||
Income tax expense (benefit) | 10 | 6 | |||
Net income | 31 | 21 | |||
Depreciation, amortization and accretion | 50 | 54 | |||
(Gain) loss on asset disposals, net | (7) | 0 | |||
(Gain) loss on sale of business and other exit costs, net | 0 | ||||
(Gain) loss on license sales and exchanges, net | 0 | 0 | |||
Interest expense | 0 | 0 | |||
Income tax expense | 10 | 6 | |||
Adjusted EBITDA | 83 | 81 | |||
Investments in unconsolidated entities | 4 | 4 | |||
Total assets | 1,986 | 1,901 | |||
Capital expenditures | 42 | 40 | |||
TDS Telecom Total | Service | |||||
Segment Reporting Information [Line Items] | |||||
Total operating revenues | 230 | 230 | |||
Cost of goods and services | 88 | 90 | |||
TDS Telecom Total | Equipment and product sales | |||||
Segment Reporting Information [Line Items] | |||||
Total operating revenues | 0 | 0 | |||
Cost of goods and services | 0 | 0 | |||
TDS Telecom Wireline | |||||
Segment Reporting Information [Line Items] | |||||
Total operating revenues | 171 | 175 | |||
Selling, general and administrative | 47 | 47 | |||
Depreciation, amortization and accretion | 34 | 37 | |||
(Gain) loss on asset disposals, net | (7) | 0 | |||
(Gain) loss on sale of business and other exit costs, net | 0 | ||||
(Gain) loss on license sales and exchanges, net | 0 | 0 | |||
Operating income | 34 | 26 | |||
Equity in earnings of unconsolidated entities | 0 | 0 | |||
Interest and dividend income | 3 | 1 | |||
Interest expense | 1 | 0 | |||
Other, net | 0 | 1 | |||
Income before income taxes | 38 | 28 | |||
Depreciation, amortization and accretion | 34 | 37 | |||
(Gain) loss on asset disposals, net | (7) | 0 | |||
(Gain) loss on sale of business and other exit costs, net | 0 | ||||
(Gain) loss on license sales and exchanges, net | 0 | 0 | |||
Interest expense | (1) | 0 | |||
Adjusted EBITDA | 63 | 65 | |||
Investments in unconsolidated entities | 4 | 4 | |||
Total assets | 1,353 | 1,264 | |||
Capital expenditures | 29 | 29 | |||
TDS Telecom Wireline | Service | |||||
Segment Reporting Information [Line Items] | |||||
Total operating revenues | 170 | 175 | |||
Cost of goods and services | 63 | 65 | |||
TDS Telecom Wireline | Equipment and product sales | |||||
Segment Reporting Information [Line Items] | |||||
Total operating revenues | 0 | 0 | |||
Cost of goods and services | 0 | 0 | |||
TDS Telecom Cable | |||||
Segment Reporting Information [Line Items] | |||||
Total operating revenues | 60 | 55 | |||
Selling, general and administrative | 14 | 13 | |||
Depreciation, amortization and accretion | 17 | 17 | |||
(Gain) loss on asset disposals, net | 0 | 0 | |||
(Gain) loss on sale of business and other exit costs, net | 0 | ||||
(Gain) loss on license sales and exchanges, net | 0 | 0 | |||
Operating income | 2 | (1) | |||
Equity in earnings of unconsolidated entities | 0 | 0 | |||
Interest and dividend income | 0 | 0 | |||
Interest expense | 0 | 0 | |||
Other, net | 0 | 0 | |||
Income before income taxes | 3 | (1) | |||
Depreciation, amortization and accretion | 17 | 17 | |||
(Gain) loss on asset disposals, net | 0 | 0 | |||
(Gain) loss on sale of business and other exit costs, net | 0 | ||||
(Gain) loss on license sales and exchanges, net | 0 | 0 | |||
Interest expense | 0 | 0 | |||
Adjusted EBITDA | 20 | 16 | |||
Investments in unconsolidated entities | 0 | 0 | |||
Total assets | 641 | 644 | |||
Capital expenditures | 13 | 11 | |||
TDS Telecom Cable | Service | |||||
Segment Reporting Information [Line Items] | |||||
Total operating revenues | 60 | 55 | |||
Cost of goods and services | 26 | 26 | |||
TDS Telecom Cable | Equipment and product sales | |||||
Segment Reporting Information [Line Items] | |||||
Total operating revenues | 0 | 0 | |||
Cost of goods and services | 0 | 0 | |||
Corporate, Eliminations and Other | |||||
Segment Reporting Information [Line Items] | |||||
Total operating revenues | 61 | 52 | |||
Selling, general and administrative | 10 | 9 | |||
Depreciation, amortization and accretion | 8 | 8 | |||
(Gain) loss on asset disposals, net | 0 | 1 | |||
(Gain) loss on sale of business and other exit costs, net | 0 | ||||
(Gain) loss on license sales and exchanges, net | 0 | 0 | |||
Operating income | (7) | (10) | |||
Equity in earnings of unconsolidated entities | 0 | 0 | |||
Interest and dividend income | 0 | 0 | |||
Interest expense | (14) | (14) | |||
Other, net | 0 | 1 | |||
Income before income taxes | (21) | (23) | |||
Income tax expense (benefit) | (3) | (4) | |||
Net income | (19) | (19) | |||
Depreciation, amortization and accretion | 8 | 8 | |||
(Gain) loss on asset disposals, net | 0 | 1 | |||
(Gain) loss on sale of business and other exit costs, net | 0 | ||||
(Gain) loss on license sales and exchanges, net | 0 | 0 | |||
Interest expense | 14 | 14 | |||
Income tax expense | (3) | (4) | |||
Adjusted EBITDA | 1 | 0 | |||
Investments in unconsolidated entities | 35 | 34 | |||
Total assets | 572 | 532 | |||
Capital expenditures | 3 | 5 | |||
Corporate, Eliminations and Other | Service | |||||
Segment Reporting Information [Line Items] | |||||
Total operating revenues | 24 | 24 | |||
Cost of goods and services | 20 | 19 | |||
Corporate, Eliminations and Other | Equipment and product sales | |||||
Segment Reporting Information [Line Items] | |||||
Total operating revenues | 37 | 29 | |||
Cost of goods and services | $ 31 | $ 27 | |||
[1] | The consolidated total assets as of March 31, 2019 and December 31, 2018, include assets held by consolidated variable interest entities (VIEs) of $895 million and $848 million, respectively, which are not available to be used to settle the obligations of TDS. The consolidated total liabilities as of March 31, 2019 and December 31, 2018, include certain liabilities of consolidated VIEs of $19 million and $21 million, respectively, for which the creditors of the VIEs have no recourse to the general credit of TDS. See Note 9 — Variable Interest Entities for additional information. |