Document And Entity Information
Document And Entity Information | 3 Months Ended |
Mar. 31, 2024 shares | |
Document Type | 10-Q |
Document Quarterly Report | true |
Document Period End Date | Mar. 31, 2024 |
Document Transition Report | false |
Entity File Number | 001-14157 |
Entity Registrant Name | TELEPHONE AND DATA SYSTEMS, INC. |
Entity Central Index Key | 0001051512 |
Current Fiscal Year End Date | --12-31 |
Document Fiscal Year Focus | 2024 |
Document Fiscal Period Focus | Q1 |
Amendment Flag | false |
Entity Incorporation, State or Country Code | DE |
Entity Tax Identification Number | 36-2669023 |
Entity Address, Address Line One | 30 North LaSalle Street, Suite 4000 |
Entity Address, City or Town | Chicago |
Entity Address, State or Province | IL |
Entity Address, Postal Zip Code | 60602 |
City Area Code | (312) |
Local Phone Number | 630-1900 |
Entity Current Reporting Status | Yes |
Entity Interactive Data Current | Yes |
Entity Filer Category | Large Accelerated Filer |
Smaller Reporting Company | false |
Emerging Growth Company | false |
Entity Shell Company | false |
Common Shares | |
Title of 12(b) Security | Common Shares, $.01 par value |
Trading Symbol | TDS |
Security Exchange Name | NYSE |
Entity Common Stock, Shares Outstanding | 106,000,000 |
Depository Shares each representing a 1/1000th interest in a share of 6.625% Series UU Cumulative Redeemable Perpetual Preferred Stock, $.01 par value | |
Title of 12(b) Security | Depository Shares each representing a 1/1000th interest in a share of 6.625% Series UU Cumulative Redeemable Perpetual Preferred Stock, $.01 par value |
Trading Symbol | TDSPrU |
Security Exchange Name | NYSE |
Depository Shares each representing a 1/1000th interest in a share of 6.000% Series VV Cumulative Redeemable Perpetual Preferred Stock, $.01 par value | |
Title of 12(b) Security | Depository Shares each representing a 1/1000th interest in a share of 6.000% Series VV Cumulative Redeemable Perpetual Preferred Stock, $.01 par value |
Trading Symbol | TDSPrV |
Security Exchange Name | NYSE |
Series A Common Shares | |
Entity Common Stock, Shares Outstanding | 7,000,000 |
Consolidated Statement of Opera
Consolidated Statement of Operations - USD ($) shares in Millions, $ in Millions | 3 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
Operating revenues | ||
Total operating revenues | $ 1,262 | $ 1,303 |
Operating expenses | ||
Selling, general and administrative | 424 | 439 |
Depreciation, amortization and accretion | 234 | 232 |
(Gain) loss on asset disposals, net | 7 | 11 |
(Gain) loss on license sales and exchanges, net | (1) | 0 |
Total operating expenses | 1,195 | 1,274 |
Operating income | 67 | 29 |
Investment and other income (expense) | ||
Equity in earnings of unconsolidated entities | 42 | 44 |
Interest and dividend income | 5 | 5 |
Interest expense | (57) | (53) |
Other, net | 1 | 0 |
Total investment and other expense | (9) | (4) |
Income before income taxes | 58 | 25 |
Income tax expense | 20 | 13 |
Net income | 38 | 12 |
Less: Net income attributable to noncontrolling interests, net of tax | 9 | 4 |
Net income attributable to TDS shareholders | 29 | 8 |
TDS Preferred Share dividends | 17 | 17 |
Net income (loss) attributable to TDS common shareholders | $ 12 | $ (9) |
Basic weighted average shares outstanding (in shares) | 113 | 113 |
Basic earnings (loss) per share attributable to TDS common shareholders | $ 0.11 | $ (0.08) |
Diluted weighted average shares outstanding (in shares) | 117 | 113 |
Diluted earnings (loss) per share attributable to TDS common shareholders | $ 0.10 | $ (0.08) |
Service | ||
Operating revenues | ||
Total operating revenues | $ 1,044 | $ 1,043 |
Operating expenses | ||
Cost of goods and services | 298 | 305 |
Equipment and product sales | ||
Operating revenues | ||
Total operating revenues | 218 | 260 |
Operating expenses | ||
Cost of goods and services | $ 233 | $ 287 |
Consolidated Statement of Cash
Consolidated Statement of Cash Flows - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
Cash flows from operating activities | ||
Net income | $ 38 | $ 12 |
Add (deduct) adjustments to reconcile net income to net cash flows from operating activities | ||
Depreciation, amortization and accretion | 234 | 232 |
Bad debts expense | 31 | 27 |
Stock-based compensation expense | 14 | 3 |
Deferred income taxes, net | 14 | 9 |
Equity in earnings of unconsolidated entities | (42) | (44) |
Distributions from unconsolidated entities | 22 | 20 |
(Gain) loss on asset disposals, net | 7 | 11 |
(Gain) loss on license sales and exchanges, net | (1) | 0 |
Other operating activities | 1 | 2 |
Changes in assets and liabilities from operations | ||
Accounts receivable | 27 | 22 |
Equipment installment plans receivable | 2 | 1 |
Inventory | 24 | 0 |
Accounts payable | (35) | (162) |
Customer deposits and deferred revenues | 6 | (9) |
Accrued taxes | 4 | 1 |
Accrued interest | 9 | 9 |
Other assets and liabilities | (131) | (88) |
Net cash provided by operating activities | 224 | 46 |
Cash flows from investing activities | ||
Cash paid for additions to property, plant and equipment | (235) | (331) |
Cash paid for intangible assets | (11) | (5) |
Other investing activities | 0 | 2 |
Net cash used in investing activities | (246) | (334) |
Cash flows from financing activities | ||
Issuance of long-term debt | 140 | 316 |
Repayment of long-term debt | (57) | (5) |
Repayment of short-term debt | 0 | (60) |
Tax payments for TDS stock-based compensation awards | (1) | (2) |
Repurchase of TDS Common Shares | 0 | (3) |
Dividends paid to TDS shareholders | (39) | (38) |
Distributions to noncontrolling interests | (2) | (1) |
Cash paid for software license agreements | (9) | (8) |
Other financing activities | (2) | (1) |
Net cash provided by financing activities | 30 | 198 |
Net increase (decrease) in cash, cash equivalents and restricted cash | 8 | (90) |
Cash, cash equivalents and restricted cash | ||
Beginning of period | 270 | 399 |
End of period | $ 278 | $ 309 |
Consolidated Balance Sheet
Consolidated Balance Sheet - USD ($) $ in Millions | Mar. 31, 2024 | Dec. 31, 2023 | |
Current assets | |||
Cash and cash equivalents | $ 249 | $ 236 | |
Accounts receivable | |||
Customers and agents, less allowances of $66 and $70, respectively | 955 | 992 | |
Other, less allowances of $3 and $4, respectively | 81 | 82 | |
Inventory, net | 184 | 208 | |
Prepaid expenses | 107 | 86 | |
Income taxes receivable | 3 | 4 | |
Other current assets | 49 | 52 | |
Total current assets | 1,628 | 1,660 | |
Assets held for sale | 0 | 15 | |
Licenses | 4,720 | 4,702 | |
Other intangible assets, net of accumulated amortization of $111 and $106, respectively | 178 | 183 | |
Investments in unconsolidated entities | 526 | 505 | |
Property, plant and equipment | |||
In service and under construction | 14,452 | 15,612 | |
Less: Accumulated depreciation and amortization | 9,400 | 10,550 | |
Property, plant and equipment, net | 5,052 | 5,062 | |
Operating lease right-of-use assets | 979 | 987 | |
Other assets and deferred charges | 783 | 807 | |
Total assets | [1] | 13,866 | 13,921 |
Current liabilities | |||
Current portion of long-term debt | 26 | 26 | |
Accounts payable | 302 | 360 | |
Customer deposits and deferred revenues | 284 | 277 | |
Accrued interest | 21 | 12 | |
Accrued taxes | 44 | 43 | |
Accrued compensation | 59 | 149 | |
Short-term operating lease liabilities | 147 | 147 | |
Other current liabilities | 148 | 170 | |
Total current liabilities | 1,031 | 1,184 | |
Deferred liabilities and credits | |||
Deferred income tax liability, net | 988 | 975 | |
Long-term operating lease liabilities | 883 | 890 | |
Other deferred liabilities and credits | 780 | 784 | |
Long-term debt, net | 4,164 | 4,080 | |
Commitments and contingencies | |||
Noncontrolling interests with redemption features | 16 | 12 | |
TDS shareholders’ equity | |||
Series A Common and Common Shares Authorized 290 shares (25 Series A Common and 265 Common Shares) Issued 133 shares (7 Series A Common and 126 Common Shares) Outstanding 113 shares (7 Series A Common and 106 Common Shares) Par Value ($.01 per share) | 1 | 1 | |
Capital in excess of par value | 2,570 | 2,558 | |
Preferred Shares, 0.279 shares authorized, par value $0.01 per share, 0.0444 shares outstanding (0.0168 Series UU and 0.0276 Series VV) | 1,074 | 1,074 | |
Treasury shares, at cost, 20 Common Shares | (460) | (465) | |
Accumulated other comprehensive income | 11 | 11 | |
Retained earnings | 2,008 | 2,023 | |
Total TDS shareholders' equity | 5,204 | 5,202 | |
Noncontrolling interests | 800 | 794 | |
Total equity | 6,004 | 5,996 | |
Total liabilities and equity | [1] | $ 13,866 | $ 13,921 |
[1] The consolidated total assets as of March 31, 2024 and December 31, 2023, include assets held by consolidated variable interest entities (VIEs) of $1,115 million and $1,188 million, respectively, which are not available to be used to settle the obligations of TDS. The consolidated total liabilities as of March 31, 2024 and December 31, 2023, include certain liabilities of consolidated VIEs of $23 million, for which the creditors of the VIEs have no recourse to the general credit of TDS. See Note 8 — Variable Interest Entities for additional information. |
Consolidated Balance Sheet (Par
Consolidated Balance Sheet (Parenthetical) - USD ($) $ in Millions | Mar. 31, 2024 | Dec. 31, 2023 | |
Accounts receivable | |||
Customer and agent allowances | $ 66 | $ 70 | |
Other allowances | 3 | 4 | |
Other intangible assets | |||
Other intangible assets accumulated amortization | $ 111 | $ 106 | |
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) | 113,000,000 | 113,000,000 | |
Par value per share (in dollars per share) | $ 0.01 | $ 0.01 | |
Preferred shares authorized | 279,000 | 279,000 | |
Par value per share (in dollars per share) | $ 0.01 | $ 0.01 | |
Outstanding shares (in shares) | 44,400 | 44,400 | |
Variable Interest Entities VIEs | |||
Total assets | [1] | $ 13,866 | $ 13,921 |
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) | 106,000,000 | 106,000,000 | |
Treasury shares (in shares) | 20,000,000 | 20,000,000 | |
Series UU Preferred Shares | |||
TDS shareholders’ equity | |||
Outstanding shares (in shares) | 16,800 | 16,800 | |
Series VV Preferred Shares | |||
TDS shareholders’ equity | |||
Outstanding shares (in shares) | 27,600 | 27,600 | |
Consolidated Variable Interest Entity | |||
Variable Interest Entities VIEs | |||
Total assets | $ 1,951 | $ 1,988 | |
Total liabilities | 98 | 98 | |
Consolidated Variable Interest Entity | No recourse | |||
Variable Interest Entities VIEs | |||
Total liabilities | 23 | 23 | |
Consolidated Variable Interest Entity | Assets held | |||
Variable Interest Entities VIEs | |||
Total assets | $ 1,115 | $ 1,188 | |
[1] The consolidated total assets as of March 31, 2024 and December 31, 2023, include assets held by consolidated variable interest entities (VIEs) of $1,115 million and $1,188 million, respectively, which are not available to be used to settle the obligations of TDS. The consolidated total liabilities as of March 31, 2024 and December 31, 2023, include certain liabilities of consolidated VIEs of $23 million, for which the creditors of the VIEs have no recourse to the general credit of TDS. See Note 8 — Variable Interest Entities for additional information. |
Consolidated Statement of Chang
Consolidated Statement of Changes in Equity - USD ($) $ in Millions | Total | Series A Common and Common shares | Capital in excess of par value | Preferred Shares | Treasury shares | Accumulated other comprehensive income (loss) | Retained earnings | Total TDS shareholders' equity | Noncontrolling interests |
Beginning balance at Dec. 31, 2022 | $ 6,603 | $ 1 | $ 2,551 | $ 1,074 | $ (481) | $ 5 | $ 2,699 | $ 5,849 | $ 754 |
Net income attributable to TDS shareholders | 8 | 8 | 8 | ||||||
Net income attributable to noncontrolling interests classified as equity | 3 | 0 | 3 | ||||||
TDS Common and Series A Common share dividends | (21) | (21) | (21) | ||||||
TDS Preferred share dividends | (17) | (17) | (17) | ||||||
Repurchase of Common Shares | (3) | (3) | (3) | ||||||
Dividend reinvestment plan | 1 | 1 | 1 | ||||||
Incentive and compensation plans | 2 | 4 | 9 | (11) | 2 | ||||
Adjust investment in subsidiaries for issuances and other compensation plans | 0 | (3) | (3) | 3 | |||||
Distributions to noncontrolling interests | (1) | 0 | (1) | ||||||
Ending balance at Mar. 31, 2023 | 6,575 | 1 | 2,552 | 1,074 | (474) | 5 | 2,658 | 5,816 | 759 |
Beginning balance at Dec. 31, 2023 | 5,996 | 1 | 2,558 | 1,074 | (465) | 11 | 2,023 | 5,202 | 794 |
Net income attributable to TDS shareholders | 29 | 29 | 29 | ||||||
Net income attributable to noncontrolling interests classified as equity | 4 | 0 | 4 | ||||||
TDS Common and Series A Common share dividends | (22) | (22) | (22) | ||||||
TDS Preferred share dividends | (17) | (17) | (17) | ||||||
Dividend reinvestment plan | 1 | 1 | 0 | 1 | |||||
Incentive and compensation plans | 0 | 1 | 4 | (5) | 0 | ||||
Adjust investment in subsidiaries for issuances and other compensation plans | 14 | 11 | 11 | 3 | |||||
Distributions to noncontrolling interests | (1) | 0 | (1) | ||||||
Ending balance at Mar. 31, 2024 | $ 6,004 | $ 1 | $ 2,570 | $ 1,074 | $ (460) | $ 11 | $ 2,008 | $ 5,204 | $ 800 |
Consolidated Statement of Cha_2
Consolidated Statement of Changes in Equity (Parenthetical) - $ / shares | 3 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
TDS Common and Series A Common Share dividends (in dollars per share) | $ 0.19 | $ 0.185 |
Series VV Preferred Shares | ||
TDS Preferred share dividends (in dollars per share) | 375 | 375 |
Series UU Preferred Shares | ||
TDS Preferred share dividends (in dollars per share) | $ 414 | $ 414 |
Basis of Presentation
Basis of Presentation | 3 Months Ended |
Mar. 31, 2024 | |
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’ 83%-owned subsidiary, United States Cellular Corporation (UScellular) 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 requires consolidation into the TDS financial statements under GAAP. 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, 2024, are UScellular and TDS Telecom. 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. See Note 10 — Business Segment Information for summary financial information on each business segment. 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, 2023. 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, 2024 and December 31, 2023, its results of operations, cash flows and changes in equity for the three months ended March 31, 2024 and 2023. The Consolidated Statement of Comprehensive Income was not included because comprehensive income for the three months ended March 31, 2024 and 2023, equaled net income. 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, 2023. Software License Agreements Certain software licenses are recorded as acquisitions of property, plant and equipment and the incurrence of a liability to the extent that the license fees are not fully paid at acquisition, and are treated as non-cash activity in the Consolidated Statement of Cash Flows. Such acquisitions of software licenses that are not reflected as Cash paid for additions to property, plant and equipment were $4 million and $5 million for the three months ended March 31, 2024 and 2023, respectively. Restricted Cash TDS presents restricted cash with cash and cash equivalents in the Consolidated Statement of Cash Flows. Restricted cash primarily consists of balances required under the receivables securitization agreement. See Note 7 — Debt for additional information related to the receivables securitization agreement. 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. March 31, 2024 December 31, 2023 (Dollars in millions) Cash and cash equivalents $ 249 $ 236 Restricted cash included in Other current assets 29 34 Cash, cash equivalents and restricted cash in the statement of cash flows $ 278 $ 270 Strategic Alternatives Review On August 4, 2023, TDS and UScellular announced that the Boards of Directors of both companies have decided to initiate a process to explore a range of strategic alternatives for UScellular. During the three months ended March 31, 2024, TDS incurred third-party expenses of $11 million related to the strategic alternatives review, which are included in Selling, general and administrative expenses. At this time, TDS cannot predict the ultimate outcome of such process or estimate the potential impact of such process on the financial statements. |
Revenue Recognition
Revenue Recognition | 3 Months Ended |
Mar. 31, 2024 | |
Revenue from Contract with Customer [Abstract] | |
Revenue Recognition | Note 2 Revenue Recognition Disaggregation of Revenue In the following table, TDS' revenues are disaggregated by type of service, which represents the relevant categorization of revenues for TDS' reportable segments, and timing of recognition. Service revenues are recognized over time and Equipment and product sales are recognized at a point in time. Three Months Ended March 31, 2024 UScellular TDS Telecom Corporate, Eliminations and Other Total (Dollars in millions) Revenues from contracts with customers: Type of service: Retail service $ 678 $ — $ — $ 678 Residential — 185 — 185 Commercial — 37 — 37 Wholesale — 43 — 43 Other service 51 — 18 69 Service revenues from contracts with customers 729 265 18 1,012 Equipment and product sales 196 — 22 218 Total revenues from contracts with customers 925 266 40 1,230 Operating lease income 25 1 6 32 Total operating revenues $ 950 $ 266 $ 46 $ 1,262 Three Months Ended March 31, 2023 UScellular TDS Telecom Corporate, Eliminations and Other Total (Dollars in millions) Revenues from contracts with customers: Type of service: Retail service $ 691 $ — $ — $ 691 Residential — 169 — 169 Commercial — 41 — 41 Wholesale — 42 — 42 Other service 51 — 18 69 Service revenues from contracts with customers 742 252 18 1,012 Equipment and product sales 219 — 41 260 Total revenues from contracts with customers 961 252 59 1,272 Operating lease income 25 1 5 31 Total operating revenues $ 986 $ 253 $ 64 $ 1,303 Numbers may not foot due to rounding. Contract Balances The following table provides balances for contract assets from contracts with customers, which are recorded in Other current assets and Other assets and deferred charges in the Consolidated Balance Sheet, and 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. March 31, 2024 December 31, 2023 (Dollars in millions) Contract assets $ 12 $ 14 Contract liabilities $ 380 $ 380 Revenue recognized related to contract liabilities existing at January 1, 2024 was $151 million for the three months ended March 31, 2024. Transaction price allocated to the remaining performance obligations The following table includes estimated service revenues expected to be recognized related to performance obligations that are unsatisfied (or partially unsatisfied) at the end of the reporting period. These estimates represent service revenues 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, 2024 and may vary from actual results. As practical expedients, revenue related to contracts of less than one year, generally month-to-month contracts, and contracts with a fixed per-unit price and variable quantity, are excluded from these estimates. Service Revenues (Dollars in millions) Remainder of 2024 $ 320 2025 173 Thereafter 91 Total $ 584 Contract Cost Assets TDS expects that commission fees paid as a result of obtaining contracts are recoverable, and therefore TDS defers and amortizes these costs. As a practical expedient, costs with an amortization period of one year or less are expensed as incurred. TDS also incurs fulfillment costs, such as installation costs, where there is an expectation that a future benefit will be realized. Deferred commission fees and fulfillment costs are amortized based on the timing of transfer of the goods or services to which the assets relate, typically the contract term. Contract cost asset balances, which are recorded in Other assets and deferred charges in the Consolidated Balance Sheet, were as follows: March 31, 2024 December 31, 2023 (Dollars in millions) Costs to obtain contracts Sales commissions $ 143 $ 143 Fulfillment costs Installation costs 6 6 Total contract cost assets $ 149 $ 149 Amortization of contract cost assets was $25 million and $28 million for the three months ended March 31, 2024, and 2023 respectively, and was included in Selling, general and administrative expenses and Cost of services expenses. |
Fair Value Measurements
Fair Value Measurements | 3 Months Ended |
Mar. 31, 2024 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements | Note 3 Fair Value Measurements As of March 31, 2024 and December 31, 2023, 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, 2024 December 31, 2023 Book Value Fair Value Book Value Fair Value (Dollars in millions) Long-term debt Retail 2 $ 1,500 $ 1,109 $ 1,500 $ 1,097 Institutional 2 536 435 536 451 Other 2 2,187 2,187 2,103 2,103 Long-term debt excludes lease obligations, 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 UScellular Senior Notes, which are traded on the New York Stock Exchange. TDS’ “Institutional” debt consists of UScellular’s 6.7% Senior Notes which are traded over the counter. TDS’ “Other” debt consists of term loan credit agreements, receivables securitization agreement and export credit financing agreements. 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 3.52% to 7.93% and 3.52% to 7.96% at March 31, 2024 and December 31, 2023, respectively. The fair values of Cash and cash equivalents, restricted cash and short-term debt approximate their book values due to the short-term nature of these financial instruments. |
Equipment Installment Plans
Equipment Installment Plans | 3 Months Ended |
Mar. 31, 2024 | |
Receivables [Abstract] | |
Equipment Installment Plans | Note 4 Equipment Installment Plans UScellular 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. The following table summarizes equipment installment plan receivables. March 31, 2024 December 31, 2023 (Dollars in millions) Equipment installment plan receivables, gross $ 1,120 $ 1,151 Allowance for credit losses (88) (90) Equipment installment plan receivables, net $ 1,032 $ 1,061 Net balance presented in the Consolidated Balance Sheet as: Accounts receivable — Customers and agents (Current portion) $ 570 $ 577 Other assets and deferred charges (Non-current portion) 462 484 Equipment installment plan receivables, net $ 1,032 $ 1,061 UScellular uses various inputs to evaluate the credit profiles of its customers, including internal data, information from credit bureaus and other sources. 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. These credit classes are grouped into four credit categories: lowest risk, lower risk, slight risk and higher risk. A customer's assigned credit class is reviewed periodically and a change is made, if appropriate. An equipment installment plan billed amount is considered past due if not paid within 30 days. The balance and aging of the equipment installment plan receivables on a gross basis by credit category were as follows: March 31, 2024 December 31, 2023 Lowest Risk Lower Risk Slight Risk Higher Risk Total Lowest Risk Lower Risk Slight Risk Higher Risk Total (Dollars in millions) Unbilled $ 957 $ 84 $ 15 $ 4 $ 1,060 $ 977 $ 88 $ 16 $ 4 $ 1,085 Billed — current 38 4 1 — 43 35 5 2 1 43 Billed — past due 9 5 2 1 17 12 7 3 1 23 Total $ 1,004 $ 93 $ 18 $ 5 $ 1,120 $ 1,024 $ 100 $ 21 $ 6 $ 1,151 The balance of the equipment installment plan receivables as of March 31, 2024 on a gross basis by year of origination were as follows: 2021 2022 2023 2024 Total (Dollars in millions) Lowest Risk $ 18 $ 328 $ 510 $ 148 $ 1,004 Lower Risk 1 20 56 16 93 Slight Risk — 2 10 6 18 Higher Risk — 1 3 1 5 Total $ 19 $ 351 $ 579 $ 171 $ 1,120 The write-offs, net of recoveries for the three months ended March 31, 2024 on a gross basis by year of origination were as follows: 2021 2022 2023 Total (Dollars in millions) Write-offs, net of recoveries $ 1 $ 8 $ 15 $ 24 Activity for the three months ended March 31, 2024 and 2023, in the allowance for credit losses for equipment installment plan receivables was as follows: March 31, 2024 March 31, 2023 (Dollars in millions) Allowance for credit losses, beginning of period $ 90 $ 96 Bad debts expense 22 18 Write-offs, net of recoveries (24) (20) Allowance for credit losses, end of period $ 88 $ 94 |
Earnings Per Share
Earnings Per Share | 3 Months Ended |
Mar. 31, 2024 | |
Earnings Per Share [Abstract] | |
Earnings Per Share | Note 5 Earnings Per Share Basic earnings (loss) per share attributable to TDS common shareholders is computed by dividing Net income (loss) attributable to TDS common shareholders by the weighted average number of Common Shares outstanding during the period. Diluted earnings (loss) per share attributable to TDS common shareholders is computed by dividing Net income (loss) attributable to TDS common 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, as calculated using the treasury stock method. The amounts used in computing basic and diluted earnings (loss) per share attributable to TDS common shareholders were as follows: Three Months Ended 2024 2023 (Dollars and shares in millions, except per share amounts) Net income (loss) attributable to TDS common shareholders $ 12 $ (9) Weighted average number of shares used in basic earnings (loss) per share: Common Shares 106 106 Series A Common Shares 7 7 Total 113 113 Effects of dilutive securities 4 — Weighted average number of shares used in diluted earnings (loss) per share 117 113 Basic earnings (loss) per share attributable to TDS common shareholders $ 0.11 $ (0.08) Diluted earnings (loss) per share attributable to TDS common shareholders $ 0.10 $ (0.08) Certain Common Shares issuable upon the exercise of stock options or vesting of performance and restricted stock units were not included in weighted average diluted shares outstanding for the calculation of Diluted earnings (loss) per share attributable to TDS common shareholders because their effects were antidilutive. The number of such Common Shares excluded was 2 million and 4 million for the three months ended March 31, 2024 and 2023, respectively. |
Investments In Unconsolidated E
Investments In Unconsolidated Entities | 3 Months Ended |
Mar. 31, 2024 | |
Equity Method Investments and Joint Ventures [Abstract] | |
Investments in Unconsolidated Entities | Note 6 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 the equity method, measurement alternative method or net asset value practical expedient method as shown in the table below. The carrying value of measurement alternative method investments represents cost minus any impairments plus or minus any observable price changes. March 31, 2024 December 31, 2023 (Dollars in millions) Equity method investments $ 497 $ 477 Measurement alternative method investments 20 19 Investments recorded using the net asset value practical expedient 9 9 Total investments in unconsolidated entities $ 526 $ 505 The following table, which is based on unaudited information provided in part by third parties, summarizes the combined results of operations of TDS’ equity method investments. Three Months Ended 2024 2023 (Dollars in millions) Revenues $ 1,849 $ 1,809 Operating expenses 1,421 1,366 Operating income 428 443 Other income (expense), net (9) (16) Net income $ 419 $ 427 |
Debt
Debt | 3 Months Ended |
Mar. 31, 2024 | |
Debt Disclosure [Abstract] | |
Debt | Note 7 Debt Revolving Credit Agreements TDS has a revolving credit agreement with maximum borrowing capacity of $400 million. Amounts under the agreement may be borrowed, repaid and reborrowed from time to time until maturity in July 2026. During the three months ended March 31, 2024, TDS borrowed $100 million under its revolving credit agreement. Borrowings under the TDS revolving credit agreement bear interest at a rate of Secured Overnight Financing Rate (SOFR) plus 1.60%. As of March 31, 2024, the outstanding borrowings under the agreement were $200 million, and the unused borrowing capacity was $199 million. Receivables Securitization Agreement UScellular, through its subsidiaries, has a receivables securitization agreement that permits securitized borrowings using its equipment installment plan receivables. Amounts under the agreement may be borrowed, repaid and reborrowed from time to time until September 2025. Unless the agreement is amended to extend the maturity date, repayments based on receivable collections commence in October 2025. The outstanding borrowings bear interest at a rate of the lender's cost of funds (which has historically tracked closely to SOFR) plus 1.15%. During the three months ended March 31, 2024, UScellular borrowed $40 million and repaid $50 million under its receivables securitization agreement. As of March 31, 2024, the outstanding borrowings under the agreement were $140 million and the unused borrowing capacity was $310 million, subject to sufficient collateral to satisfy the asset borrowing base provisions of the agreement. As of March 31, 2024, the USCC Master Note Trust held $233 million of assets available to be pledged as collateral for the receivables securitization agreement. In April 2024, UScellular repaid an additional $75 million under the agreement. Term Loan Agreement In May 2024, TDS entered into a $375 million unsecured term loan credit agreement. At closing, $300 million was drawn, less original issue discount, and the remaining $75 million may be drawn until November 2025. The maturity date of the agreement is May 2029. The agreement requires TDS to make prepayments of the outstanding borrowings to the extent TDS receives cash proceeds in excess of prescribed thresholds from certain transactions as more fully described in the agreement. Borrowings under the agreement bear interest at a rate of SOFR plus 7.00%. Quarterly payments of the outstanding borrowings multiplied by 0.25% are required beginning in September 2024, with the amount increasing if the remaining available capacity is drawn. Debt Covenants The TDS and UScellular revolving credit agreements, term loan agreements including the secured term loan, export credit financing agreements and the UScellular receivables securitization agreement require TDS or UScellular, as applicable, to comply with certain affirmative and negative covenants, which include certain financial covenants that may restrict the borrowing capacity available. TDS and UScellular are required to maintain the Consolidated Leverage Ratio as of the end of any fiscal quarter at a level not to exceed the following: 4.25 to 1.00 from January 1, 2023 through March 31, 2024; 4.00 to 1.00 from April 1, 2024 through March 31, 2025; 3.75 to 1.00 from April 1, 2025 and thereafter. TDS and UScellular are also required to maintain the Consolidated Interest Coverage Ratio at a level not lower than 3.00 to 1.00 as of the end of any fiscal quarter. TDS and UScellular believe they were in compliance as of March 31, 2024 with all such financial covenants. The term loan agreement entered into in May 2024 requires TDS to comply with certain affirmative and negative covenants, which includes a financial covenant that may restrict the borrowing capacity available. TDS is required to maintain the Consolidated Leverage Ratio as of the end of any fiscal quarter at a level not to exceed the following: 4.50 to 1.00 from April 1, 2024 through March 31, 2025; 4.25 to 1.00 from April 1, 2025 and thereafter. |
Variable Interest Entities
Variable Interest Entities | 3 Months Ended |
Mar. 31, 2024 | |
Variable Interest Entities [Abstract] | |
Variable Interest Entities | Note 8 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. TDS reviews the criteria for a controlling financial interest 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 this Form 10-Q and TDS’ Form 10-K for the year ended December 31, 2023. UScellular 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, UScellular wholly-owned, majority-owned and unconsolidated entities, collectively referred to as “affiliated entities”, transfer 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 UScellular, 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 UScellular has the power to direct the activities of these SPEs, and that these SPEs lack sufficient equity to finance their activities, UScellular 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 licenses and to fund, establish, and provide wireless service with respect to any FCC wireless spectrum 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 wireless spectrum 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 into the TDS financial statements. 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, UScellular 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 also are recognized as VIEs and are consolidated into the TDS financial statements 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, 2024 December 31, 2023 (Dollars in millions) Assets Cash and cash equivalents $ 30 $ 24 Accounts receivable 619 631 Inventory, net 3 4 Other current assets 26 30 Licenses 639 639 Property, plant and equipment, net 119 123 Operating lease right-of-use assets 44 43 Other assets and deferred charges 471 494 Total assets $ 1,951 $ 1,988 Liabilities Current liabilities $ 34 $ 34 Long-term operating lease liabilities 38 38 Other deferred liabilities and credits 26 26 Total liabilities 1 $ 98 $ 98 1 Total liabilities does not include amounts borrowed under the receivables securitization agreement. See Note 7 – Debt for additional information. 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 into the TDS financial statements under the variable interest model. TDS’ total investment in these unconsolidated entities was $6 million at both March 31, 2024 and December 31, 2023, 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 or advances to its VIEs totaling $207 million for both the three months ended March 31, 2024 and 2023, of which $187 million in 2024 and $193 million in 2023, 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 their operations or the development of wireless spectrum licenses granted in various auctions. TDS may finance such amounts with a combination of cash on hand, borrowings under its revolving credit or receivables securitization agreements 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 agreement of Advantage Spectrum also provides the general partner with a put option whereby the general partner may require the limited partner, a subsidiary of UScellular, to purchase its interest in the limited partnership. The put option has not been exercised. |
Noncontrolling Interests
Noncontrolling Interests | 3 Months Ended |
Mar. 31, 2024 | |
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 9 Noncontrolling Interests The following schedule discloses the effects of Net income attributable to TDS shareholders and changes in TDS’ ownership interest in UScellular on TDS’ equity: Three Months Ended March 31, 2024 2023 (Dollars in millions) Net income attributable to TDS shareholders $ 29 $ 8 Transfers (to) from noncontrolling interests Change in TDS' Capital in excess of par value from UScellular's issuance of UScellular shares (1) (3) Net transfers (to) from noncontrolling interests (1) (3) Net income attributable to TDS shareholders after transfers (to) from noncontrolling interests $ 28 $ 5 |
Business Segment Information
Business Segment Information | 3 Months Ended |
Mar. 31, 2024 | |
Segment Reporting [Abstract] | |
Business Segment Information | Note 10 Business Segment Information UScellular and TDS Telecom are billed for services they receive from TDS, consisting primarily of information processing, accounting, finance, and general management services. Such billings are based on expenses specifically identified to UScellular and TDS Telecom and on allocations of common expenses. Management believes the method used to allocate common expenses is reasonable and that all expenses and costs applicable to UScellular and TDS Telecom are reflected in the accompanying business segment information. Financial data for TDS’ reportable segments for the three month periods ended, or as of March 31, 2024 and 2023, is as follows. See Note 1 — Basis of Presentation for additional information. Three Months Ended or as of March 31, 2024 UScellular TDS Telecom Corporate, Eliminations and Other Total (Dollars in millions) Operating revenues Service $ 754 $ 266 $ 24 $ 1,044 Equipment and product sales 196 — 22 218 Total operating revenues 950 266 46 1,262 Cost of services (excluding Depreciation, amortization and accretion reported below) 182 98 18 298 Cost of equipment and products 216 — 17 233 Selling, general and administrative 331 75 18 424 Depreciation, amortization and accretion 165 65 4 234 (Gain) loss on asset disposals, net 6 2 (1) 7 (Gain) loss on license sales and exchanges, net (1) — — (1) Operating income (loss) 51 27 (11) 67 Equity in earnings of unconsolidated entities 42 — — 42 Interest and dividend income 2 1 2 5 Interest expense (43) 2 (16) (57) Other, net — 1 — 1 Income (loss) before income taxes 52 31 (25) 58 Income tax expense (benefit) 28 7 (15) 20 Net income (loss) 24 24 (10) 38 Add back: Depreciation, amortization and accretion 165 65 4 234 Expenses related to strategic alternatives review 7 — 4 11 (Gain) loss on asset disposals, net 6 2 (1) 7 (Gain) loss on license sales and exchanges, net (1) — — (1) Interest expense 43 (2) 16 57 Income tax expense (benefit) 28 7 (15) 20 Adjusted EBITDA 1 $ 272 $ 95 $ (1) $ 366 Investments in unconsolidated entities $ 482 $ 4 $ 40 $ 526 Total assets $ 10,704 $ 2,892 $ 270 $ 13,866 Capital expenditures $ 131 $ 87 $ 1 $ 219 Three Months Ended or as of March 31, 2023 UScellular TDS Telecom Corporate, Eliminations and Other Total (Dollars in millions) Operating revenues Service $ 767 $ 253 $ 23 $ 1,043 Equipment and product sales 219 — 41 260 Total operating revenues 986 253 64 1,303 Cost of services (excluding Depreciation, amortization and accretion reported below) 182 104 19 305 Cost of equipment and products 253 — 34 287 Selling, general and administrative 345 80 14 439 Depreciation, amortization and accretion 170 59 3 232 (Gain) loss on asset disposals, net 10 1 — 11 Operating income (loss) 26 8 (5) 29 Equity in earnings of unconsolidated entities 44 — — 44 Interest and dividend income 2 1 2 5 Interest expense (47) 2 (8) (53) Income (loss) before income taxes 25 11 (11) 25 Income tax expense (benefit) 11 3 (1) 13 Net income (loss) 14 8 (10) 12 Add back: Depreciation, amortization and accretion 170 59 3 232 (Gain) loss on asset disposals, net 10 1 — 11 Interest expense 47 (2) 8 53 Income tax expense 11 3 (1) 13 Adjusted EBITDA 1 $ 252 $ 69 $ — $ 321 Investments in unconsolidated entities $ 477 $ 4 $ 38 $ 519 Total assets $ 10,997 $ 3,141 $ 401 $ 14,539 Capital expenditures $ 208 $ 130 $ 5 $ 343 Numbers may not foot due to rounding. 1 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 assessing the segments' performance. Adjusted EBITDA is defined as net income, adjusted for the items set forth in the reconciliation above. TDS believes Adjusted EBITDA is a useful measure of TDS’ operating results before significant recurring non-cash charges, gains and losses, and other items as presented above as it provides additional relevant and useful information to investors and other users of TDS' financial data in evaluating the effectiveness of its operations and underlying business trends in a manner that is consistent with management's evaluation of business performance. |
Pay vs Performance Disclosure
Pay vs Performance Disclosure - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
Pay vs Performance Disclosure | ||
Net income attributable to TDS shareholders | $ 29 | $ 8 |
Insider Trading Arrangements
Insider Trading Arrangements | 3 Months Ended |
Mar. 31, 2024 | |
Trading Arrangements, by Individual | |
Rule 10b5-1 Arrangement Adopted | false |
Non-Rule 10b5-1 Arrangement Adopted | false |
Rule 10b5-1 Arrangement Terminated | false |
Non-Rule 10b5-1 Arrangement Terminated | false |
Basis of Presentation (Policies
Basis of Presentation (Policies) | 3 Months Ended |
Mar. 31, 2024 | |
Accounting Policy Disclosures [Line Items] | |
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’ 83%-owned subsidiary, United States Cellular Corporation (UScellular) 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 requires consolidation into the TDS financial statements under GAAP. 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, 2024, are UScellular and TDS Telecom. 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. See Note 10 — Business Segment Information for summary financial information on each business segment. |
Basis of Accounting | 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, 2023. 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, 2024 and December 31, 2023, its results of operations, cash flows and changes in equity for the three months ended March 31, 2024 and 2023. The Consolidated Statement of Comprehensive Income was not included because comprehensive income for the three months ended March 31, 2024 and 2023, equaled net income. 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, 2023. |
Revenue from Contract with Customer | As practical expedients, revenue related to contracts of less than one year, generally month-to-month contracts, and contracts with a fixed per-unit price and variable quantity, are excluded from these estimates.TDS expects that commission fees paid as a result of obtaining contracts are recoverable, and therefore TDS defers and amortizes these costs. As a practical expedient, costs with an amortization period of one year or less are expensed as incurred. TDS also incurs fulfillment costs, such as installation costs, where there is an expectation that a future benefit will be realized. Deferred commission fees and fulfillment costs are amortized based on the timing of transfer of the goods or services to which the assets relate, typically the contract term. |
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. TDS reviews the criteria for a controlling financial interest 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 this Form 10-Q and TDS’ Form 10-K for the year ended December 31, 2023. |
Basis of Presentation (Tables)
Basis of Presentation (Tables) | 3 Months Ended |
Mar. 31, 2024 | |
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. March 31, 2024 December 31, 2023 (Dollars in millions) Cash and cash equivalents $ 249 $ 236 Restricted cash included in Other current assets 29 34 Cash, cash equivalents and restricted cash in the statement of cash flows $ 278 $ 270 |
Revenue Recognition (Tables)
Revenue Recognition (Tables) | 3 Months Ended |
Mar. 31, 2024 | |
Revenue from Contract with Customer [Abstract] | |
Disaggregation of Revenues | In the following table, TDS' revenues are disaggregated by type of service, which represents the relevant categorization of revenues for TDS' reportable segments, and timing of recognition. Service revenues are recognized over time and Equipment and product sales are recognized at a point in time. Three Months Ended March 31, 2024 UScellular TDS Telecom Corporate, Eliminations and Other Total (Dollars in millions) Revenues from contracts with customers: Type of service: Retail service $ 678 $ — $ — $ 678 Residential — 185 — 185 Commercial — 37 — 37 Wholesale — 43 — 43 Other service 51 — 18 69 Service revenues from contracts with customers 729 265 18 1,012 Equipment and product sales 196 — 22 218 Total revenues from contracts with customers 925 266 40 1,230 Operating lease income 25 1 6 32 Total operating revenues $ 950 $ 266 $ 46 $ 1,262 Three Months Ended March 31, 2023 UScellular TDS Telecom Corporate, Eliminations and Other Total (Dollars in millions) Revenues from contracts with customers: Type of service: Retail service $ 691 $ — $ — $ 691 Residential — 169 — 169 Commercial — 41 — 41 Wholesale — 42 — 42 Other service 51 — 18 69 Service revenues from contracts with customers 742 252 18 1,012 Equipment and product sales 219 — 41 260 Total revenues from contracts with customers 961 252 59 1,272 Operating lease income 25 1 5 31 Total operating revenues $ 986 $ 253 $ 64 $ 1,303 Numbers may not foot due to rounding. |
Contract with Customer, Assets and Liabilities | The following table provides balances for contract assets from contracts with customers, which are recorded in Other current assets and Other assets and deferred charges in the Consolidated Balance Sheet, and 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. March 31, 2024 December 31, 2023 (Dollars in millions) Contract assets $ 12 $ 14 Contract liabilities $ 380 $ 380 |
Remaining Performance Obligations | The following table includes estimated service revenues expected to be recognized related to performance obligations that are unsatisfied (or partially unsatisfied) at the end of the reporting period. These estimates represent service revenues 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, 2024 and may vary from actual results. As practical expedients, revenue related to contracts of less than one year, generally month-to-month contracts, and contracts with a fixed per-unit price and variable quantity, are excluded from these estimates. Service Revenues (Dollars in millions) Remainder of 2024 $ 320 2025 173 Thereafter 91 Total $ 584 |
Contract Cost Assets | TDS expects that commission fees paid as a result of obtaining contracts are recoverable, and therefore TDS defers and amortizes these costs. As a practical expedient, costs with an amortization period of one year or less are expensed as incurred. TDS also incurs fulfillment costs, such as installation costs, where there is an expectation that a future benefit will be realized. Deferred commission fees and fulfillment costs are amortized based on the timing of transfer of the goods or services to which the assets relate, typically the contract term. Contract cost asset balances, which are recorded in Other assets and deferred charges in the Consolidated Balance Sheet, were as follows: March 31, 2024 December 31, 2023 (Dollars in millions) Costs to obtain contracts Sales commissions $ 143 $ 143 Fulfillment costs Installation costs 6 6 Total contract cost assets $ 149 $ 149 |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 3 Months Ended |
Mar. 31, 2024 | |
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, 2024 December 31, 2023 Book Value Fair Value Book Value Fair Value (Dollars in millions) Long-term debt Retail 2 $ 1,500 $ 1,109 $ 1,500 $ 1,097 Institutional 2 536 435 536 451 Other 2 2,187 2,187 2,103 2,103 |
Equipment Installment Plans (Ta
Equipment Installment Plans (Table) | 3 Months Ended |
Mar. 31, 2024 | |
Receivables [Abstract] | |
Equipment installment plan receivables | The following table summarizes equipment installment plan receivables. March 31, 2024 December 31, 2023 (Dollars in millions) Equipment installment plan receivables, gross $ 1,120 $ 1,151 Allowance for credit losses (88) (90) Equipment installment plan receivables, net $ 1,032 $ 1,061 Net balance presented in the Consolidated Balance Sheet as: Accounts receivable — Customers and agents (Current portion) $ 570 $ 577 Other assets and deferred charges (Non-current portion) 462 484 Equipment installment plan receivables, net $ 1,032 $ 1,061 |
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, 2024 December 31, 2023 Lowest Risk Lower Risk Slight Risk Higher Risk Total Lowest Risk Lower Risk Slight Risk Higher Risk Total (Dollars in millions) Unbilled $ 957 $ 84 $ 15 $ 4 $ 1,060 $ 977 $ 88 $ 16 $ 4 $ 1,085 Billed — current 38 4 1 — 43 35 5 2 1 43 Billed — past due 9 5 2 1 17 12 7 3 1 23 Total $ 1,004 $ 93 $ 18 $ 5 $ 1,120 $ 1,024 $ 100 $ 21 $ 6 $ 1,151 The balance of the equipment installment plan receivables as of March 31, 2024 on a gross basis by year of origination were as follows: 2021 2022 2023 2024 Total (Dollars in millions) Lowest Risk $ 18 $ 328 $ 510 $ 148 $ 1,004 Lower Risk 1 20 56 16 93 Slight Risk — 2 10 6 18 Higher Risk — 1 3 1 5 Total $ 19 $ 351 $ 579 $ 171 $ 1,120 |
Equipment installment plans allowance for credit losses | The write-offs, net of recoveries for the three months ended March 31, 2024 on a gross basis by year of origination were as follows: 2021 2022 2023 Total (Dollars in millions) Write-offs, net of recoveries $ 1 $ 8 $ 15 $ 24 Activity for the three months ended March 31, 2024 and 2023, in the allowance for credit losses for equipment installment plan receivables was as follows: March 31, 2024 March 31, 2023 (Dollars in millions) Allowance for credit losses, beginning of period $ 90 $ 96 Bad debts expense 22 18 Write-offs, net of recoveries (24) (20) Allowance for credit losses, end of period $ 88 $ 94 |
Earnings Per Share (Tables)
Earnings Per Share (Tables) | 3 Months Ended |
Mar. 31, 2024 | |
Earnings Per Share [Abstract] | |
Earnings per share | The amounts used in computing basic and diluted earnings (loss) per share attributable to TDS common shareholders were as follows: Three Months Ended 2024 2023 (Dollars and shares in millions, except per share amounts) Net income (loss) attributable to TDS common shareholders $ 12 $ (9) Weighted average number of shares used in basic earnings (loss) per share: Common Shares 106 106 Series A Common Shares 7 7 Total 113 113 Effects of dilutive securities 4 — Weighted average number of shares used in diluted earnings (loss) per share 117 113 Basic earnings (loss) per share attributable to TDS common shareholders $ 0.11 $ (0.08) Diluted earnings (loss) per share attributable to TDS common shareholders $ 0.10 $ (0.08) |
Investments in Unconsolidated_2
Investments in Unconsolidated Entities (Tables) | 3 Months Ended |
Mar. 31, 2024 | |
Equity Method Investments and Joint Ventures [Abstract] | |
Equity and measurement alternative method investments | TDS’ Investments in unconsolidated entities are accounted for using the equity method, measurement alternative method or net asset value practical expedient method as shown in the table below. The carrying value of measurement alternative method investments represents cost minus any impairments plus or minus any observable price changes. March 31, 2024 December 31, 2023 (Dollars in millions) Equity method investments $ 497 $ 477 Measurement alternative method investments 20 19 Investments recorded using the net asset value practical expedient 9 9 Total investments in unconsolidated entities $ 526 $ 505 The following table, which is based on unaudited information provided in part by third parties, summarizes the combined results of operations of TDS’ equity method investments. Three Months Ended 2024 2023 (Dollars in millions) Revenues $ 1,849 $ 1,809 Operating expenses 1,421 1,366 Operating income 428 443 Other income (expense), net (9) (16) Net income $ 419 $ 427 |
Variable Interest Entities (Tab
Variable Interest Entities (Tables) | 3 Months Ended |
Mar. 31, 2024 | |
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, 2024 December 31, 2023 (Dollars in millions) Assets Cash and cash equivalents $ 30 $ 24 Accounts receivable 619 631 Inventory, net 3 4 Other current assets 26 30 Licenses 639 639 Property, plant and equipment, net 119 123 Operating lease right-of-use assets 44 43 Other assets and deferred charges 471 494 Total assets $ 1,951 $ 1,988 Liabilities Current liabilities $ 34 $ 34 Long-term operating lease liabilities 38 38 Other deferred liabilities and credits 26 26 Total liabilities 1 $ 98 $ 98 1 Total liabilities does not include amounts borrowed under the receivables securitization agreement. See Note 7 – Debt for additional information. |
Noncontrolling Interests (Table
Noncontrolling Interests (Tables) | 3 Months Ended |
Mar. 31, 2024 | |
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 UScellular on TDS’ equity: Three Months Ended March 31, 2024 2023 (Dollars in millions) Net income attributable to TDS shareholders $ 29 $ 8 Transfers (to) from noncontrolling interests Change in TDS' Capital in excess of par value from UScellular's issuance of UScellular shares (1) (3) Net transfers (to) from noncontrolling interests (1) (3) Net income attributable to TDS shareholders after transfers (to) from noncontrolling interests $ 28 $ 5 |
Business Segment Information (T
Business Segment Information (Tables) | 3 Months Ended |
Mar. 31, 2024 | |
Segment Reporting [Abstract] | |
Business segment information | Financial data for TDS’ reportable segments for the three month periods ended, or as of March 31, 2024 and 2023, is as follows. See Note 1 — Basis of Presentation for additional information. Three Months Ended or as of March 31, 2024 UScellular TDS Telecom Corporate, Eliminations and Other Total (Dollars in millions) Operating revenues Service $ 754 $ 266 $ 24 $ 1,044 Equipment and product sales 196 — 22 218 Total operating revenues 950 266 46 1,262 Cost of services (excluding Depreciation, amortization and accretion reported below) 182 98 18 298 Cost of equipment and products 216 — 17 233 Selling, general and administrative 331 75 18 424 Depreciation, amortization and accretion 165 65 4 234 (Gain) loss on asset disposals, net 6 2 (1) 7 (Gain) loss on license sales and exchanges, net (1) — — (1) Operating income (loss) 51 27 (11) 67 Equity in earnings of unconsolidated entities 42 — — 42 Interest and dividend income 2 1 2 5 Interest expense (43) 2 (16) (57) Other, net — 1 — 1 Income (loss) before income taxes 52 31 (25) 58 Income tax expense (benefit) 28 7 (15) 20 Net income (loss) 24 24 (10) 38 Add back: Depreciation, amortization and accretion 165 65 4 234 Expenses related to strategic alternatives review 7 — 4 11 (Gain) loss on asset disposals, net 6 2 (1) 7 (Gain) loss on license sales and exchanges, net (1) — — (1) Interest expense 43 (2) 16 57 Income tax expense (benefit) 28 7 (15) 20 Adjusted EBITDA 1 $ 272 $ 95 $ (1) $ 366 Investments in unconsolidated entities $ 482 $ 4 $ 40 $ 526 Total assets $ 10,704 $ 2,892 $ 270 $ 13,866 Capital expenditures $ 131 $ 87 $ 1 $ 219 Three Months Ended or as of March 31, 2023 UScellular TDS Telecom Corporate, Eliminations and Other Total (Dollars in millions) Operating revenues Service $ 767 $ 253 $ 23 $ 1,043 Equipment and product sales 219 — 41 260 Total operating revenues 986 253 64 1,303 Cost of services (excluding Depreciation, amortization and accretion reported below) 182 104 19 305 Cost of equipment and products 253 — 34 287 Selling, general and administrative 345 80 14 439 Depreciation, amortization and accretion 170 59 3 232 (Gain) loss on asset disposals, net 10 1 — 11 Operating income (loss) 26 8 (5) 29 Equity in earnings of unconsolidated entities 44 — — 44 Interest and dividend income 2 1 2 5 Interest expense (47) 2 (8) (53) Income (loss) before income taxes 25 11 (11) 25 Income tax expense (benefit) 11 3 (1) 13 Net income (loss) 14 8 (10) 12 Add back: Depreciation, amortization and accretion 170 59 3 232 (Gain) loss on asset disposals, net 10 1 — 11 Interest expense 47 (2) 8 53 Income tax expense 11 3 (1) 13 Adjusted EBITDA 1 $ 252 $ 69 $ — $ 321 Investments in unconsolidated entities $ 477 $ 4 $ 38 $ 519 Total assets $ 10,997 $ 3,141 $ 401 $ 14,539 Capital expenditures $ 208 $ 130 $ 5 $ 343 Numbers may not foot due to rounding. 1 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 assessing the segments' performance. Adjusted EBITDA is defined as net income, adjusted for the items set forth in the reconciliation above. TDS believes Adjusted EBITDA is a useful measure of TDS’ operating results before significant recurring non-cash charges, gains and losses, and other items as presented above as it provides additional relevant and useful information to investors and other users of TDS' financial data in evaluating the effectiveness of its operations and underlying business trends in a manner that is consistent with management's evaluation of business performance. |
Basis of Presentation - Narrati
Basis of Presentation - Narrative (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
Basis of Presentation [Line Items] | ||
Noncash software license acquisitions | $ 4 | $ 5 |
Expenses related to strategic alternatives review | $ 11 | |
UScellular | ||
Basis of Presentation [Line Items] | ||
TDS ownership of UScellular | 83% |
Basis of Presentation - Cash, C
Basis of Presentation - Cash, Cash Equivalents and Restricted Cash (Details) - USD ($) $ in Millions | Mar. 31, 2024 | Dec. 31, 2023 | Mar. 31, 2023 | Dec. 31, 2022 |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||||
Cash and cash equivalents | $ 249 | $ 236 | ||
Restricted cash included in Other current assets | 29 | 34 | ||
Cash, cash equivalents and restricted cash in the statement of cash flows | $ 278 | $ 270 | $ 309 | $ 399 |
Revenue Recognition - Disaggreg
Revenue Recognition - Disaggregation of Revenue (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
Disaggregation of revenue | ||
Revenue from contracts with customers | $ 1,230 | $ 1,272 |
Operating lease income | 32 | 31 |
Total operating revenues | 1,262 | 1,303 |
Transferred over time | ||
Disaggregation of revenue | ||
Revenue from contracts with customers | 1,012 | 1,012 |
Transferred over time | Retail service | ||
Disaggregation of revenue | ||
Revenue from contracts with customers | 678 | 691 |
Transferred over time | Residential | ||
Disaggregation of revenue | ||
Revenue from contracts with customers | 185 | 169 |
Transferred over time | Commercial | ||
Disaggregation of revenue | ||
Revenue from contracts with customers | 37 | 41 |
Transferred over time | Wholesale | ||
Disaggregation of revenue | ||
Revenue from contracts with customers | 43 | 42 |
Transferred over time | Other service | ||
Disaggregation of revenue | ||
Revenue from contracts with customers | 69 | 69 |
Transferred at point in time | Equipment and product sales | ||
Disaggregation of revenue | ||
Revenue from contracts with customers | 218 | 260 |
UScellular | ||
Disaggregation of revenue | ||
Revenue from contracts with customers | 925 | 961 |
Operating lease income | 25 | 25 |
Total operating revenues | 950 | 986 |
UScellular | Transferred over time | ||
Disaggregation of revenue | ||
Revenue from contracts with customers | 729 | 742 |
UScellular | Transferred over time | Retail service | ||
Disaggregation of revenue | ||
Revenue from contracts with customers | 678 | 691 |
UScellular | Transferred over time | Residential | ||
Disaggregation of revenue | ||
Revenue from contracts with customers | 0 | 0 |
UScellular | Transferred over time | Commercial | ||
Disaggregation of revenue | ||
Revenue from contracts with customers | 0 | 0 |
UScellular | Transferred over time | Wholesale | ||
Disaggregation of revenue | ||
Revenue from contracts with customers | 0 | 0 |
UScellular | Transferred over time | Other service | ||
Disaggregation of revenue | ||
Revenue from contracts with customers | 51 | 51 |
UScellular | Transferred at point in time | Equipment and product sales | ||
Disaggregation of revenue | ||
Revenue from contracts with customers | 196 | 219 |
TDS Telecom | ||
Disaggregation of revenue | ||
Revenue from contracts with customers | 266 | 252 |
Operating lease income | 1 | 1 |
Total operating revenues | 266 | 253 |
TDS Telecom | Transferred over time | ||
Disaggregation of revenue | ||
Revenue from contracts with customers | 265 | 252 |
TDS Telecom | Transferred over time | Retail service | ||
Disaggregation of revenue | ||
Revenue from contracts with customers | 0 | 0 |
TDS Telecom | Transferred over time | Residential | ||
Disaggregation of revenue | ||
Revenue from contracts with customers | 185 | 169 |
TDS Telecom | Transferred over time | Commercial | ||
Disaggregation of revenue | ||
Revenue from contracts with customers | 37 | 41 |
TDS Telecom | Transferred over time | Wholesale | ||
Disaggregation of revenue | ||
Revenue from contracts with customers | 43 | 42 |
TDS Telecom | Transferred over time | Other service | ||
Disaggregation of revenue | ||
Revenue from contracts with customers | 0 | 0 |
TDS Telecom | 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 | 40 | 59 |
Operating lease income | 6 | 5 |
Total operating revenues | 46 | 64 |
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 | 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 | $ 22 | $ 41 |
Revenue Recognition - Contract
Revenue Recognition - Contract Assets and Contract Liabilities (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2024 | Dec. 31, 2023 | |
Revenue from Contract with Customer [Abstract] | ||
Contract assets | $ 12 | $ 14 |
Contract liabilities | 380 | $ 380 |
Revenue recognized | $ 151 |
Revenue Recognition - Performan
Revenue Recognition - Performance Obligations (Details) $ in Millions | Mar. 31, 2024 USD ($) |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Remaining performance obligation | $ 584 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2024-04-01 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Remaining performance obligation | $ 320 |
Expected timing of remaining performance obligation, period | 9 months |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2025-01-01 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Remaining performance obligation | $ 173 |
Expected timing of remaining performance obligation, period | 1 year |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2026-01-01 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Remaining performance obligation | $ 91 |
Expected timing of remaining performance obligation, period |
Revenue Recognition - Contrac_2
Revenue Recognition - Contract Cost Assets (Details) - USD ($) $ in Millions | Mar. 31, 2024 | Dec. 31, 2023 |
Contract Cost Assets | ||
Contract cost assets | $ 149 | $ 149 |
Sales commissions | ||
Contract Cost Assets | ||
Contract cost assets | 143 | 143 |
Installation costs | ||
Contract Cost Assets | ||
Contract cost assets | $ 6 | $ 6 |
Revenue Recognition - Narrative
Revenue Recognition - Narrative (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
Capitalized contract cost | ||
Amortization of contract cost assets | $ 25 | $ 28 |
Fair Value Measurements (Detail
Fair Value Measurements (Details) - USD ($) $ in Millions | Mar. 31, 2024 | Dec. 31, 2023 |
6.7% Senior Notes | UScellular | ||
Financial Instruments | ||
Interest rate | 6.70% | |
Institutional and Other | Minimum | ||
Financial Instruments | ||
Interest rate | 3.52% | 3.52% |
Institutional and Other | Maximum | ||
Financial Instruments | ||
Interest rate | 7.93% | 7.96% |
Book Value | Retail | ||
Financial Instruments | ||
Long-term debt | $ 1,500 | $ 1,500 |
Book Value | Institutional | ||
Financial Instruments | ||
Long-term debt | 536 | 536 |
Book Value | Other | ||
Financial Instruments | ||
Long-term debt | 2,187 | 2,103 |
Fair Value | Level 2 | Retail | ||
Financial Instruments | ||
Long-term debt | 1,109 | 1,097 |
Fair Value | Level 2 | Institutional | ||
Financial Instruments | ||
Long-term debt | 435 | 451 |
Fair Value | Level 2 | Other | ||
Financial Instruments | ||
Long-term debt | $ 2,187 | $ 2,103 |
Equipment Installment Plans - E
Equipment Installment Plans - EIP Receivables (Details) - USD ($) $ in Millions | Mar. 31, 2024 | Dec. 31, 2023 |
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Equipment installment plan receivables, gross | $ 1,120 | $ 1,151 |
Allowance for credit losses | (88) | (90) |
Equipment installment plan receivables, net | 1,032 | 1,061 |
Accounts receivable — Customers and agents (Current portion) | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Equipment installment plan receivables, net | 570 | 577 |
Other assets and deferred charges (Non-current portion) | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Equipment installment plan receivables, net | $ 462 | $ 484 |
Equipment Installment Plans - G
Equipment Installment Plans - Gross Receivables by Credit Category (Details) - USD ($) $ in Millions | Mar. 31, 2024 | Dec. 31, 2023 |
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Equipment installment plan receivables, gross | $ 1,120 | $ 1,151 |
2021 | 19 | |
2022 | 351 | |
2023 | 579 | |
2024 | 171 | |
Unbilled | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Equipment installment plan receivables, gross | 1,060 | 1,085 |
Billed | Current | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Equipment installment plan receivables, gross | 43 | 43 |
Billed | Past due | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Equipment installment plan receivables, gross | 17 | 23 |
Lowest Risk | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Equipment installment plan receivables, gross | 1,004 | 1,024 |
2021 | 18 | |
2022 | 328 | |
2023 | 510 | |
2024 | 148 | |
Lowest Risk | Unbilled | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Equipment installment plan receivables, gross | 957 | 977 |
Lowest Risk | Billed | Current | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Equipment installment plan receivables, gross | 38 | 35 |
Lowest Risk | Billed | Past due | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Equipment installment plan receivables, gross | 9 | 12 |
Lower Risk | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Equipment installment plan receivables, gross | 93 | 100 |
2021 | 1 | |
2022 | 20 | |
2023 | 56 | |
2024 | 16 | |
Lower Risk | Unbilled | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Equipment installment plan receivables, gross | 84 | 88 |
Lower Risk | Billed | Current | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Equipment installment plan receivables, gross | 4 | 5 |
Lower Risk | Billed | Past due | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Equipment installment plan receivables, gross | 5 | 7 |
Slight Risk | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Equipment installment plan receivables, gross | 18 | 21 |
2021 | 0 | |
2022 | 2 | |
2023 | 10 | |
2024 | 6 | |
Slight Risk | Unbilled | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Equipment installment plan receivables, gross | 15 | 16 |
Slight Risk | Billed | Current | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Equipment installment plan receivables, gross | 1 | 2 |
Slight Risk | Billed | Past due | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Equipment installment plan receivables, gross | 2 | 3 |
Higher Risk | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Equipment installment plan receivables, gross | 5 | 6 |
2021 | 0 | |
2022 | 1 | |
2023 | 3 | |
2024 | 1 | |
Higher Risk | Unbilled | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Equipment installment plan receivables, gross | 4 | 4 |
Higher Risk | Billed | Current | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Equipment installment plan receivables, gross | 0 | 1 |
Higher Risk | Billed | Past due | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Equipment installment plan receivables, gross | $ 1 | $ 1 |
Equipment Installment Plans - A
Equipment Installment Plans - Allowance for Credit Losses (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
Allowance for credit losses | ||
Allowance for credit losses, beginning of period | $ 90 | |
Allowance for credit losses, end of period | 88 | |
Equipment Installment Plan Receivable | ||
Allowance for credit losses | ||
Write-offs, net of recoveries, originated in 2021 | 1 | |
Write-offs, net of recoveries, originated in 2022 | 8 | |
Write-offs, net of recoveries, originated in 2023 | 15 | |
Write-offs, net of recoveries, Total | 24 | $ 20 |
Allowance for credit losses, beginning of period | 90 | 96 |
Bad debts expense | 22 | 18 |
Write-offs, net of recoveries | (24) | (20) |
Allowance for credit losses, end of period | $ 88 | $ 94 |
Earnings Per Share - Reconcilia
Earnings Per Share - Reconciliation (Details) - USD ($) $ / shares in Units, shares in Millions, $ in Millions | 3 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
Earnings per share | ||
Net income (loss) attributable to TDS common shareholders | $ 12 | $ (9) |
Weighted average number of shares used in basic earnings (loss) per share: | 113 | 113 |
Effects of dilutive securities (in shares) | 4 | 0 |
Weighted average number of shares used in diluted earnings (loss) per share | 117 | 113 |
Basic earnings (loss) per share attributable to TDS common shareholders | $ 0.11 | $ (0.08) |
Diluted earnings (loss) per share attributable to TDS common shareholders | $ 0.10 | $ (0.08) |
Common Shares | ||
Earnings per share | ||
Weighted average number of shares used in basic earnings (loss) per share: | 106 | 106 |
Series A Common Shares | ||
Earnings per share | ||
Weighted average number of shares used in basic earnings (loss) per share: | 7 | 7 |
Earnings Per Share - Narrative
Earnings Per Share - Narrative (Details) - shares shares in Millions | 3 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Antidilutive securities (in shares) | 2 | 4 |
Investments in Unconsolidated_3
Investments in Unconsolidated Entities - Schedule of Investments (Details) - USD ($) $ in Millions | 3 Months Ended | ||
Mar. 31, 2024 | Mar. 31, 2023 | Dec. 31, 2023 | |
Equity Method Investments and Joint Ventures [Abstract] | |||
Equity method investments | $ 497 | $ 477 | |
Measurement alternative method investments | 20 | 19 | |
Investments recorded using the net asset value practical expedient | 9 | 9 | |
Total investments in unconsolidated entities | 526 | $ 519 | $ 505 |
Schedule of Equity Method Investments [Line Items] | |||
Revenues | 1,262 | 1,303 | |
Operating expenses | 1,195 | 1,274 | |
Operating income | 67 | 29 | |
Other income (expense), net | 1 | 0 | |
Net income | 38 | 12 | |
Equity Method Investments | |||
Schedule of Equity Method Investments [Line Items] | |||
Revenues | 1,849 | 1,809 | |
Operating expenses | 1,421 | 1,366 | |
Operating income | 428 | 443 | |
Other income (expense), net | (9) | (16) | |
Net income | $ 419 | $ 427 |
Debt - Revolving Credit Agreeme
Debt - Revolving Credit Agreements (Details) - TDS Revolving Credit Agreement $ in Millions | 3 Months Ended |
Mar. 31, 2024 USD ($) | |
Line of Credit Facility [Line Items] | |
Maximum borrowing capacity | $ 400 |
Amount borrowed and outstanding | 200 |
Amount available for use | 199 |
Amount borrowed during the period | $ 100 |
SOFR rate | |
Line of Credit Facility [Line Items] | |
Contractual spread | 1.60% |
Debt - Receivables Securitizati
Debt - Receivables Securitization Agreement (Details) - USD ($) $ in Millions | 1 Months Ended | 3 Months Ended | |
Apr. 30, 2024 | Mar. 31, 2024 | Dec. 31, 2023 | |
Debt Instrument [Line Items] | |||
Equipment installment plan receivables | $ 1,120 | $ 1,151 | |
UScellular | Receivables securitization agreement | |||
Debt Instrument [Line Items] | |||
Amount borrowed during the period | 40 | ||
Amount repaid during the period | 50 | ||
Amount borrowed and outstanding | 140 | ||
Amount available for use | 310 | ||
UScellular | Receivables securitization agreement | Subsequent event | |||
Debt Instrument [Line Items] | |||
Amount repaid during the period | $ 75 | ||
UScellular | Receivables securitization agreement | Assets available to be pledged | |||
Debt Instrument [Line Items] | |||
Equipment installment plan receivables | $ 233 | ||
Lender's cost of funds | UScellular | Receivables securitization agreement | |||
Debt Instrument [Line Items] | |||
Contractual spread | 1.15% |
Debt - Term Loan Agreement (Det
Debt - Term Loan Agreement (Details) - TDS Term Loan - Subsequent event - USD ($) $ in Millions | Sep. 01, 2024 | May 01, 2024 |
Debt Instrument [Line Items] | ||
Maximum borrowing capacity | $ 375 | |
Amount available for use | 75 | |
Amount borrowed during the period | $ 300 | |
Quarterly installment rate | 0.25% | |
SOFR rate | ||
Debt Instrument [Line Items] | ||
Contractual spread | 7% |
Debt - Narrative (Details)
Debt - Narrative (Details) | Apr. 01, 2025 | Apr. 01, 2024 | Mar. 31, 2024 |
Debt Instrument [Line Items] | |||
Consolidated leverage ratio | 4.25 | ||
Consolidated interest coverage ratio | 3 | ||
Subsequent event | |||
Debt Instrument [Line Items] | |||
Consolidated leverage ratio | 3.75 | 4 | |
Subsequent event | TDS Term Loan | |||
Debt Instrument [Line Items] | |||
Consolidated leverage ratio | 4.25 | 4.50 |
Variable Interest Entities - Co
Variable Interest Entities - Consolidated Balance Sheet (Details) - USD ($) $ in Millions | Mar. 31, 2024 | Dec. 31, 2023 | Mar. 31, 2023 | ||
Assets | |||||
Cash and cash equivalents | $ 249 | $ 236 | |||
Accounts receivable | 955 | 992 | |||
Inventory, net | 184 | 208 | |||
Other current assets | 49 | 52 | |||
Licenses | 4,720 | 4,702 | |||
Property, plant and equipment, net | 5,052 | 5,062 | |||
Operating lease right-of-use assets | 979 | 987 | |||
Other assets and deferred charges | 783 | 807 | |||
Total assets | 13,866 | [1] | 13,921 | [1] | $ 14,539 |
Liabilities | |||||
Current liabilities | 1,031 | 1,184 | |||
Long-term operating lease liabilities | 883 | 890 | |||
Other deferred liabilities and credits | 780 | 784 | |||
Consolidated Variable Interest Entities | |||||
Assets | |||||
Cash and cash equivalents | 30 | 24 | |||
Accounts receivable | 619 | 631 | |||
Inventory, net | 3 | 4 | |||
Other current assets | 26 | 30 | |||
Licenses | 639 | 639 | |||
Property, plant and equipment, net | 119 | 123 | |||
Operating lease right-of-use assets | 44 | 43 | |||
Other assets and deferred charges | 471 | 494 | |||
Total assets | 1,951 | 1,988 | |||
Liabilities | |||||
Current liabilities | 34 | 34 | |||
Long-term operating lease liabilities | 38 | 38 | |||
Other deferred liabilities and credits | 26 | 26 | |||
Total liabilities | $ 98 | $ 98 | |||
[1] The consolidated total assets as of March 31, 2024 and December 31, 2023, include assets held by consolidated variable interest entities (VIEs) of $1,115 million and $1,188 million, respectively, which are not available to be used to settle the obligations of TDS. The consolidated total liabilities as of March 31, 2024 and December 31, 2023, include certain liabilities of consolidated VIEs of $23 million, for which the creditors of the VIEs have no recourse to the general credit of TDS. See Note 8 — Variable Interest Entities for additional information. |
Variable Interest Entities - Na
Variable Interest Entities - Narrative (Details) - USD ($) $ in Millions | 3 Months Ended | ||
Mar. 31, 2024 | Mar. 31, 2023 | Dec. 31, 2023 | |
Variable Interest Entity [Line Items] | |||
Investment in unconsolidated entities, maximum exposure | $ 6 | $ 6 | |
Capital contributions, loans or advances | 207 | $ 207 | |
USCC EIP LLC | |||
Variable Interest Entity [Line Items] | |||
Capital contributions, loans or advances | $ 187 | $ 193 |
Noncontrolling Interests (Detai
Noncontrolling Interests (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
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 | $ 29 | $ 8 |
Transfers (to) from noncontrolling interests | ||
Change in TDS' Capital in excess of par value from UScellular's issuance of UScellular shares | (1) | (3) |
Net transfers (to) from noncontrolling interests | (1) | (3) |
Net income attributable to TDS shareholders after transfers (to) from noncontrolling interests | $ 28 | $ 5 |
Business Segment Information (D
Business Segment Information (Details) - USD ($) $ in Millions | 3 Months Ended | ||||
Mar. 31, 2024 | Mar. 31, 2023 | Dec. 31, 2023 | |||
Segment Reporting Information [Line Items] | |||||
Total operating revenues | $ 1,262 | $ 1,303 | |||
Selling, general and administrative | 424 | 439 | |||
Depreciation, amortization and accretion | 234 | 232 | |||
(Gain) loss on asset disposals, net | 7 | 11 | |||
(Gain) loss on license sales and exchanges, net | (1) | 0 | |||
Operating income (loss) | 67 | 29 | |||
Equity in earnings of unconsolidated entities | 42 | 44 | |||
Interest and dividend income | 5 | 5 | |||
Interest expense | (57) | (53) | |||
Other, net | 1 | 0 | |||
Income before income taxes | 58 | 25 | |||
Income tax expense (benefit) | 20 | 13 | |||
Net income | 38 | 12 | |||
Depreciation, amortization and accretion | 234 | 232 | |||
Expenses related to strategic alternatives review | 11 | ||||
(Gain) loss on asset disposals, net | 7 | 11 | |||
(Gain) loss on license sales and exchanges, net | (1) | 0 | |||
Interest expense | 57 | 53 | |||
Income tax expense | 20 | 13 | |||
Adjusted EBITDA | 366 | 321 | |||
Investments in unconsolidated entities | 526 | 519 | $ 505 | ||
Total assets | 13,866 | [1] | 14,539 | $ 13,921 | [1] |
Capital expenditures | 219 | 343 | |||
Service | |||||
Segment Reporting Information [Line Items] | |||||
Total operating revenues | 1,044 | 1,043 | |||
Cost of goods and services | 298 | 305 | |||
Equipment and product sales | |||||
Segment Reporting Information [Line Items] | |||||
Total operating revenues | 218 | 260 | |||
Cost of goods and services | 233 | 287 | |||
Corporate, Eliminations and Other | |||||
Segment Reporting Information [Line Items] | |||||
Total operating revenues | 46 | 64 | |||
Selling, general and administrative | 18 | 14 | |||
Depreciation, amortization and accretion | 4 | 3 | |||
(Gain) loss on asset disposals, net | (1) | 0 | |||
(Gain) loss on license sales and exchanges, net | 0 | ||||
Operating income (loss) | (11) | (5) | |||
Equity in earnings of unconsolidated entities | 0 | 0 | |||
Interest and dividend income | 2 | 2 | |||
Interest expense | (16) | (8) | |||
Other, net | 0 | ||||
Income before income taxes | (25) | (11) | |||
Income tax expense (benefit) | (15) | (1) | |||
Net income | (10) | (10) | |||
Depreciation, amortization and accretion | 4 | 3 | |||
Expenses related to strategic alternatives review | 4 | ||||
(Gain) loss on asset disposals, net | (1) | 0 | |||
(Gain) loss on license sales and exchanges, net | 0 | ||||
Interest expense | 16 | 8 | |||
Income tax expense | (15) | (1) | |||
Adjusted EBITDA | (1) | 0 | |||
Investments in unconsolidated entities | 40 | 38 | |||
Total assets | 270 | 401 | |||
Capital expenditures | 1 | 5 | |||
Corporate, Eliminations and Other | Service | |||||
Segment Reporting Information [Line Items] | |||||
Total operating revenues | 24 | 23 | |||
Cost of goods and services | 18 | 19 | |||
Corporate, Eliminations and Other | Equipment and product sales | |||||
Segment Reporting Information [Line Items] | |||||
Total operating revenues | 22 | 41 | |||
Cost of goods and services | 17 | 34 | |||
UScellular | |||||
Segment Reporting Information [Line Items] | |||||
Total operating revenues | 950 | 986 | |||
UScellular | Operating segment | |||||
Segment Reporting Information [Line Items] | |||||
Total operating revenues | 950 | 986 | |||
Selling, general and administrative | 331 | 345 | |||
Depreciation, amortization and accretion | 165 | 170 | |||
(Gain) loss on asset disposals, net | 6 | 10 | |||
(Gain) loss on license sales and exchanges, net | (1) | ||||
Operating income (loss) | 51 | 26 | |||
Equity in earnings of unconsolidated entities | 42 | 44 | |||
Interest and dividend income | 2 | 2 | |||
Interest expense | (43) | (47) | |||
Other, net | 0 | ||||
Income before income taxes | 52 | 25 | |||
Income tax expense (benefit) | 28 | 11 | |||
Net income | 24 | 14 | |||
Depreciation, amortization and accretion | 165 | 170 | |||
Expenses related to strategic alternatives review | 7 | ||||
(Gain) loss on asset disposals, net | 6 | 10 | |||
(Gain) loss on license sales and exchanges, net | (1) | ||||
Interest expense | 43 | 47 | |||
Income tax expense | 28 | 11 | |||
Adjusted EBITDA | 272 | 252 | |||
Investments in unconsolidated entities | 482 | 477 | |||
Total assets | 10,704 | 10,997 | |||
Capital expenditures | 131 | 208 | |||
UScellular | Operating segment | Service | |||||
Segment Reporting Information [Line Items] | |||||
Total operating revenues | 754 | 767 | |||
Cost of goods and services | 182 | 182 | |||
UScellular | Operating segment | Equipment and product sales | |||||
Segment Reporting Information [Line Items] | |||||
Total operating revenues | 196 | 219 | |||
Cost of goods and services | 216 | 253 | |||
TDS Telecom | |||||
Segment Reporting Information [Line Items] | |||||
Total operating revenues | 266 | 253 | |||
TDS Telecom | Operating segment | |||||
Segment Reporting Information [Line Items] | |||||
Total operating revenues | 266 | 253 | |||
Selling, general and administrative | 75 | 80 | |||
Depreciation, amortization and accretion | 65 | 59 | |||
(Gain) loss on asset disposals, net | 2 | 1 | |||
(Gain) loss on license sales and exchanges, net | 0 | ||||
Operating income (loss) | 27 | 8 | |||
Equity in earnings of unconsolidated entities | 0 | 0 | |||
Interest and dividend income | 1 | 1 | |||
Interest expense | 2 | 2 | |||
Other, net | 1 | ||||
Income before income taxes | 31 | 11 | |||
Income tax expense (benefit) | 7 | 3 | |||
Net income | 24 | 8 | |||
Depreciation, amortization and accretion | 65 | 59 | |||
Expenses related to strategic alternatives review | 0 | ||||
(Gain) loss on asset disposals, net | 2 | 1 | |||
(Gain) loss on license sales and exchanges, net | 0 | ||||
Interest expense | (2) | (2) | |||
Income tax expense | 7 | 3 | |||
Adjusted EBITDA | 95 | 69 | |||
Investments in unconsolidated entities | 4 | 4 | |||
Total assets | 2,892 | 3,141 | |||
Capital expenditures | 87 | 130 | |||
TDS Telecom | Operating segment | Service | |||||
Segment Reporting Information [Line Items] | |||||
Total operating revenues | 266 | 253 | |||
Cost of goods and services | 98 | 104 | |||
TDS Telecom | Operating segment | Equipment and product sales | |||||
Segment Reporting Information [Line Items] | |||||
Total operating revenues | 0 | 0 | |||
Cost of goods and services | $ 0 | $ 0 | |||
[1] The consolidated total assets as of March 31, 2024 and December 31, 2023, include assets held by consolidated variable interest entities (VIEs) of $1,115 million and $1,188 million, respectively, which are not available to be used to settle the obligations of TDS. The consolidated total liabilities as of March 31, 2024 and December 31, 2023, include certain liabilities of consolidated VIEs of $23 million, for which the creditors of the VIEs have no recourse to the general credit of TDS. See Note 8 — Variable Interest Entities for additional information. |