CHICAGO, Aug. 2, 2024 /PRNewswire/ -- As previously announced, TDS will hold a teleconference on August 2, 2024, at 9:00 a.m. CDT. Listen to the call live via the Events & Presentations page of investors.tdsinc.com. Telephone and Data Systems, Inc. (NYSE:TDS) reported total operating revenues of $1,238 million for the second quarter of 2024, versus $1,267 million for the same period one year ago. Net income (loss) attributable to TDS common shareholders and related diluted earnings (loss) per share were $(14) million and $(0.13), respectively, for the second quarter of 2024 compared to $(19) million and $(0.17), respectively, in the same period one year ago. 2Q 2024 Highlights* UScellular Announced sale of wireless operations and select spectrum assets Now reporting Wireless and Towers segments Wireless Sequential improvement in postpaid gross additions and postpaid net losses Postpaid ARPU grew 2%; service revenues decreased 2% Towers Third-party tower revenues increased 1% Fixed wireless customers grew 40% to 134,000 Strong cost management led to increased operating income, net income and Adjusted OIBDA TDS Telecom Making progress on goal to deliver 125,000 fiber service addresses in 2024 Grew total year over year service address footprint 10% Delivered 27,000 fiber services addresses in Q2 Operating revenues grew 4%; residential revenue growth of 7% Residential broadband connections grew 5% due to broadband investments Residential ARPU grew 5% due to price increases Strong net income and Adjusted EBITDA growth Good expense discipline * Comparisons are 2Q'23 to 2Q'24 unless otherwise noted "TDS is working to optimize our portfolio of businesses to position the Company for future success," said LeRoy T. Carlson, Jr., TDS President and CEO. "During the second quarter, we announced transactions regarding both UScellular and OneNeck IT Solutions that we anticipate will accelerate achievement of our strategic objectives. We remain focused on effectively operating all our businesses and serving our customers with high-quality communications services, while we work towards successfully closing these transactions and enhancing the performance of our ongoing businesses. "In Q2, UScellular remained focused on balancing subscriber growth with financial discipline and reported solid ARPU growth, good expense discipline, and improved profitability - all combining to generate higher free cash flow. While postpaid handset subscribers declined in the quarter, UScellular saw a return to subscriber growth in prepaid and steady growth in fixed wireless. "TDS Telecom reported another quarter of notable growth in revenue and profitability as a result of its broadband investments. TDS Telecom added an additional 27,000 marketable fiber service addresses and is making good progress on its long-term goal of 1.2 million marketable fiber service addresses."   Announced Transaction and Exploration of Strategic Alternatives for UScellularOn May 28, 2024, Telephone and Data Systems, Inc. (TDS) and UScellular announced that they have entered into a definitive agreement to sell UScellular's wireless operations and select spectrum assets to T-Mobile. The transaction is expected to close in mid-2025, subject to regulatory approvals and the satisfaction of customary closing conditions. UScellular retains its nearly 4,400 owned towers, its equity method investments, and approximately 70% of its spectrum assets. The strategic alternatives review process is ongoing as UScellular seeks to opportunistically monetize its spectrum assets that are not subject to the T-Mobile transaction.   2024 Estimated Results TDS' current estimates of full-year 2024 results for UScellular and TDS Telecom are shown below. Such estimates represent management's view as of August 2, 2024 and should not be assumed to be current as of any future date. TDS undertakes no duty to update such estimates, whether as a result of new information, future events, or otherwise. There can be no assurance that final results will not differ materially from estimated results. 2024 Estimated Results UScellular Previous Current (Dollars in millions) Service revenues $2,950-$3,050 Unchanged Adjusted OIBDA1, 2 $750-$850 Unchanged Adjusted EBITDA1, 2 $920-$1,020 Unchanged Capital expenditures $550-$650 Unchanged TDS Telecom Previous Current (Dollars in millions) Total operating revenues $1,070-$1,100 $1,050-$1,080 Adjusted OIBDA1 $310-$340 $330-$360 Adjusted EBITDA1 $310-$340 $330-$360 Capital expenditures $310-$340 Unchanged   The following tables reconcile EBITDA, Adjusted EBITDA and Adjusted OIBDA to the corresponding GAAP measures, Net income or Income before income taxes. In providing 2024 estimated results, TDS has not completed the below reconciliation to Net income because it does not provide guidance for income taxes. Although potentially significant, TDS believes that the impact of income taxes cannot be reasonably predicted; therefore, TDS is unable to provide such guidance. 2024 Estimated Results2 UScellular TDS Telecom (Dollars in millions) Net income (GAAP) N/A N/A Add back: Income tax expense N/A N/A Income before income taxes (GAAP) $60-$160 $60-$90 Add back: Interest expense 185 — Depreciation, amortization and accretion expense 660 270 EBITDA (Non-GAAP)1 $905-$1,005 $330-$360 Add back or deduct: (Gain) loss on asset disposals, net 15 — Adjusted EBITDA (Non-GAAP)1 $920-$1,020 $330-$360 Deduct: Equity in earnings of unconsolidated entities 155 — Interest and dividend income 15 — Adjusted OIBDA (Non-GAAP)1 $750-$850 $330-$360   Actual Results Six Months Ended June 30, 2024 Year Ended December 31, 2023 UScellular TDS Telecom UScellular TDS Telecom (Dollars in millions) Net income (loss) (GAAP) $             42 $             42 $             58 $         (483) Add back: Income tax expense (benefit) 41 10 53 (26) Income (loss) before income taxes (GAAP) $             83 $             52 $           111 $         (509) Add back: Interest expense 91 (2) 196 (8) Depreciation, amortization and accretion expense 329 131 656 245 EBITDA (Non-GAAP)1 $           503 $           181 $           963 $         (272) Add back or deduct: Expenses related to strategic alternatives review 21 — 8 — Loss on impairment of goodwill — — — 547 (Gain) loss on asset disposals, net 11 6 17 10 (Gain) loss on license sales and exchanges, net 7 — (2) — Adjusted EBITDA (Non-GAAP)1 $           542 $           187 $           986 $           285 Deduct: Equity in earnings of unconsolidated entities 80 — 158 — Interest and dividend income 6 2 10 4 Other, net — 2 — 2 Adjusted OIBDA (Non-GAAP)1 $           456 $           183 $           818 $           279 Numbers may not foot due to rounding. 1 EBITDA, Adjusted EBITDA and Adjusted OIBDA are defined as net income adjusted for the items set forth in the reconciliation above. EBITDA, Adjusted EBITDA and Adjusted OIBDA are not measures of financial performance under Generally Accepted Accounting Principles in the United States (GAAP) and should not be considered as alternatives to Net income or Cash flows from operating activities, as indicators of cash flows or as measures of liquidity. TDS does not intend to imply that any such items set forth in the reconciliation above are infrequent or unusual; such items may occur in the future. Management uses Adjusted EBITDA and Adjusted OIBDA as measurements of profitability, and therefore reconciliations to Net income are deemed appropriate. Management believes Adjusted EBITDA and Adjusted OIBDA are useful measures of TDS' operating results before significant recurring non-cash charges, nonrecurring expenses, gains and losses, and other items as presented above as they provide additional relevant and useful information to investors and other users of TDS' financial data in evaluating the effectiveness of its operations and underlying business trends in a manner that is consistent with management's evaluation of business performance. Adjusted EBITDA shows adjusted earnings before interest, taxes, depreciation, amortization and accretion, gains and losses, and expenses related to the strategic alternatives review of UScellular while Adjusted OIBDA reduces this measure further to exclude Equity in earnings of unconsolidated entities and Interest and dividend income in order to more effectively show the performance of operating activities excluding investment activities. The table above reconciles EBITDA, Adjusted EBITDA and Adjusted OIBDA to the corresponding GAAP measure, Net income or Income before income taxes. Additional information and reconciliations related to Non-GAAP financial measures for June 30, 2024, can be found on TDS' website at investors.tdsinc.com. 2 2024 Estimated Results do not reflect any anticipated costs, expenses or results of the strategic alternatives review referenced above. Conference Call InformationTDS will hold a conference call on August 2, 2024 at 9:00 a.m. Central Time. Access the live call on the Events & Presentations page of investors.tdsinc.com or at https://events.q4inc.com/attendee/870908711 Access the call by phone at (888)330-2384, conference ID: 1328528. Before the call, certain financial and statistical information to be discussed during the call will be posted to investors.tdsinc.com. The call will be archived on the Events & Presentations page of investors.tdsinc.com.  About TDSTelephone and Data Systems, Inc. (TDS) provides wireless; broadband, video and voice; and hosted and managed services to approximately 6 million connections nationwide through its businesses, UScellular, TDS Telecom, and OneNeck IT Solutions. Founded in 1969 and headquartered in Chicago, TDS employed approximately 8,500 associates as of June 30, 2024. Visit investors.tdsinc.com for comprehensive financial information, including earnings releases, quarterly and annual filings, shareholder information and more. Safe Harbor Statement Under the Private Securities Litigation Reform Act of 1995: All information set forth in this news release, except historical and factual information, represents forward-looking statements. This includes all statements about the company's plans, beliefs, estimates, and expectations. These statements are based on current estimates, projections, and assumptions, which involve certain risks and uncertainties that could cause actual results to differ materially from those in the forward-looking statements. Important factors that may affect these forward-looking statements include, but are not limited to: whether the announced transaction whereby UScellular has agreed to sell its wireless operations and selected spectrum assets to T-Mobile will be successfully completed or whether UScellular will be able to find buyers at mutually agreeable prices for its spectrum assets that are not subject to the agreement with T-Mobile; whether any such strategic alternative will result in additional value for TDS or its shareholders and whether the process will have an adverse impact on TDS' businesses; strategic decisions regarding the tower business; intense competition; the ability to obtain or maintain roaming arrangements with other carriers on acceptable terms and changes in roaming practices; the ability to obtain access to adequate radio spectrum to meet current or anticipated future needs, including participation in FCC auctions; the ability to attract people of outstanding talent throughout all levels of the organization; TDS' smaller scale relative to larger competitors; changes in demand, consumer preferences and perceptions, price competition, or churn rates; advances in technology; impacts of costs, integration problems or other factors associated with acquisitions, divestitures or exchanges of properties or wireless spectrum licenses and/or expansion of TDS' businesses; the ability of the company to successfully construct and manage its networks; difficulties involving third parties with which TDS does business; uncertainties in TDS' future cash flows and liquidity and access to the capital markets; the ability to make payments on TDS and UScellular indebtedness or comply with the terms of debt covenants; the effect on TDS' business if the collateral securing its secured term loan is foreclosed upon; conditions in the U.S. telecommunications industry; the value of assets and investments; the state and federal regulatory environment, including changes in regulatory support received and the ability to pass through certain regulatory fees to customers; pending and future litigation; cyber-attacks or other breaches of network or information technology security; control by the TDS Voting Trust; disruption in credit or other financial markets; deterioration of U.S. or global economic conditions; and the impact, duration and severity of public health emergencies. Investors are encouraged to consider these and other risks and uncertainties that are more fully described under "Risk Factors" in the most recent filing of TDS' Form 10-K, as updated by any TDS Form 10-Q filed subsequent to such Form 10-K.    For more information about TDS and its subsidiaries, visit:TDS: www.tdsinc.com UScellular: www.uscellular.com TDS Telecom: www.tdstelecom.com OneNeck IT Solutions: www.oneneck.com    United States Cellular Corporation Summary Operating Data (Unaudited) As of or for the Quarter Ended 6/30/2024 3/31/2024 12/31/2023 9/30/2023 6/30/2023 Retail Connections Postpaid Total at end of period1 4,027,000 4,051,000 4,106,000 4,159,000 4,194,000 Gross additions 117,000 106,000 129,000 128,000 125,000 Handsets 73,000 63,000 80,000 84,000 83,000 Connected devices 44,000 43,000 49,000 44,000 42,000 Net additions (losses)1 (24,000) (44,000) (50,000) (35,000) (28,000) Handsets (29,000) (47,000) (53,000) (38,000) (29,000) Connected devices 5,000 3,000 3,000 3,000 1,000 ARPU2 $        51.45 $        51.96 $        51.61 $        51.11 $        50.64 ARPA3 $      130.41 $      132.00 $      131.63 $      130.91 $      130.19 Handset upgrade rate4 4.1 % 4.5 % 5.8 % 4.5 % 4.8 % Churn rate5 1.16 % 1.22 % 1.44 % 1.30 % 1.21 % Handsets 0.97 % 1.03 % 1.22 % 1.11 % 1.01 % Connected devices 2.47 % 2.52 % 3.03 % 2.64 % 2.65 % Prepaid Total at end of period1 439,000 436,000 451,000 462,000 462,000 Gross additions 50,000 41,000 43,000 52,000 50,000 Net additions (losses)1 3,000 (13,000) (11,000) — (8,000) ARPU2, 6 $        32.37 $        32.25 $        32.32 $        33.44 $        33.86 Churn rate5 3.60 % 4.06 % 3.87 % 3.68 % 4.18 % Market penetration at end of period Consolidated operating population 32,550,000 32,550,000 32,350,000 32,350,000 32,350,000 Consolidated operating penetration7 15 % 14 % 15 % 15 % 15 % Capital expenditures (millions) $           165 $           131 $           148 $           111 $           143 Total cell sites in service 6,990 6,995 7,000 6,973 6,952 Owned towers 4,388 4,382 4,373 4,356 4,341 1 First quarter 2024 connections were adjusted to remove subscribers that could no longer access the UScellular network due to the CDMA shutdown. This resulted in 11,000 and 2,000 subscribers removed from the postpaid and prepaid base, respectively, that are not included in Net additions (losses) for the quarter. 2  Average Revenue Per User (ARPU) - metric is calculated by dividing a revenue base by an average number of connections and by the number of months in the period. These revenue bases and connection populations are shown below: •       Postpaid ARPU consists of total postpaid service revenues and postpaid connections. •       Prepaid ARPU consists of total prepaid service revenues and prepaid connections. 3 Average Revenue Per Account (ARPA) - metric is calculated by dividing total postpaid service revenues by the average number of postpaid accounts and by the number of months in the period. 4 Handset upgrade rate calculated as total handset upgrade transactions divided by average postpaid handset connections. 5 Churn rate represents the percentage of the connections that disconnect service each month. These rates represent the average monthly churn rate for each respective period. 6 Fourth quarter 2023 Prepaid ARPU excludes a $6 million reduction of prepaid revenue related to an adjustment to correct a prior period error recorded in the fourth quarter of 2023. 7 Market penetration is calculated by dividing the number of wireless connections at the end of the period by the total estimated population of consolidated operating markets.    TDS Telecom Summary Operating Data (Unaudited) As of or for the Quarter Ended 6/30/2024 3/31/2024 12/31/2023 9/30/2023 6/30/2023 Residential connections Broadband Incumbent 243,700 245,100 244,800 248,800 249,200 Expansion 107,800 100,400 92,200 79,400 70,200 Cable 198,500 202,400 202,900 204,400 204,200 Total Broadband1 550,000 547,900 539,800 532,600 523,600 Video 124,800 128,800 131,500 132,400 132,300 Voice 275,600 279,400 281,600 284,000 288,200 Total Residential connections 950,400 956,100 952,900 949,000 944,100 Commercial connections 201,500 206,200 210,200 217,400 223,300 Total connections 1,152,000 1,162,200 1,163,100 1,166,400 1,167,400 Residential revenue per connection2 $           65.26 $           64.58 $           62.74 $           62.15 $           61.97 Capital expenditures (millions) $                 78 $                 87 $               143 $               172 $               132 Numbers may not foot due to rounding. 1 Total residential broadband connections increased by 8,100 during the three months ended March 31, 2024, due primarily to net additions of 6,400 as well as certain other adjustments. 2 Total residential revenue per connection is calculated by dividing total residential revenue by the average number of residential connections and by the number of months in the period.    Telephone and Data Systems, Inc. Consolidated Statement of Operations Highlights (Unaudited) Three Months Ended June 30, Six Months Ended June 30, 2024 2023 2024 vs. 2023 2024 2023 2024 vs. 2023 (Dollars and shares in millions, except per share amounts) Operating revenues UScellular $      927 $    957 (3) % $   1,877 $ 1,942 (3) % TDS Telecom 267 257 4 % 534 510 5 % All Other1 44 53 (19) % 89 118 (24) % 1,238 1,267 (2) % 2,500 2,570 (3) % Operating expenses UScellular