Exhibit 99.1   NEWS RELEASE                                                                                    

As previously announced, TDS will hold a teleconference May 5, 2017, at 9:30 a.m. CDT. Listen to the call live via the Events & Presentations page of investors.tdsinc.com.   

 FOR IMMEDIATE RELEASE

 TDS reports first quarter 2017 results

 

CHICAGO, (May 5, 2017) — Telephone and Data Systems, Inc. (NYSE:TDS) reported total operating revenues of $1,238 million for the first quarter of 2017, versus $1,254 million for the same period one year ago. Net income attributable to TDS shareholders and related diluted earnings per share were $37 million and $0.33, respectively, for the first quarter of 2017, compared to $8 million and $0.07, respectively, in the same period one year ago.

“TDS businesses started the year by showing a solid first quarter,” said LeRoy T. Carlson Jr., TDS president and CEO. “U.S. Cellular maintained strong customer loyalty, continued network investments and generated a strong increase in profitability, while TDS Telecom grew both IPTV and broadband connections, increasing both revenue and profitability.

“U.S. Cellular drove exceptionally low levels of postpaid handset churn by providing customers with the network quality, service offerings and product portfolios they want.  Our unlimited data plans are achieving rapid adoption and our recent launch of the Samsung Galaxy S8 is progressing well. U.S. Cellular continued enhancing its already high-quality network by investing in Voice over LTE (VoLTE) technology. We are very pleased with the low-band, 600 MHz spectrum we are purchasing at reasonable prices for the vast majority of our markets.

“TDS Telecom’s Wireline segment maintained its momentum in IPTV growth by adding new connections and by increasing average revenue per connection.  Our Cable segment increased its broadband connections, generating higher residential revenue. Our hosted and managed services company, OneNeck IT Solutions, significantly increased equipment revenues.”

2017 Estimated Results

Current estimates of full-year 2017 results for U.S. Cellular, TDS Telecom, and TDS are shown below.  Such estimates represent management’s view as of May 5, 2017.  Such forward-looking statements should not be assumed to be current as of any future date.  TDS undertakes no duty to update such information, whether as a result of new information, future events, or otherwise.  There can be no assurance that final results will not differ materially from such estimated results. 

		2017 Estimated Results
		U.S. Cellular				TDS Telecom				TDS(3)
		Current		Previous		Current		Previous		Current		Previous
(Dollars in millions)
Total operating revenues (1)		$3,800-$4,000		Unchanged		$1,200-$1,250		Unchanged		$5,015-$5,265		Unchanged
Operating cash flow (1)(2)(4)		$550-$650		$500-$650		$300-$340		Unchanged		$855-$995		$805-$995
Adjusted EBITDA (2)		$700-$800		$650-$800		$300-$340		Unchanged		$1,005-$1,145		$955-$1,145
Capital expenditures (Approximately)			$500	Unchanged			$225	Unchanged			$735	Unchanged

 

 

 

The following tables provide reconciliations of Net income to Operating cash flow and Adjusted EBITDA for 2017 estimated results, actual results for the three months ended March 31, 2017, and actual results for the year ended December 31, 2016. In providing 2017 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.

				2017 Estimated Results
				U.S. Cellular			TDS Telecom			TDS(3)
(Dollars in millions)
Net income (loss) (GAAP)				N/A			N/A			N/A
Add back:
	Income tax expense (benefit)			N/A			N/A			N/A
Income (loss) before income taxes
	(GAAP)		$	(45)-55		$	80-120		$	(25)-115
Add back:
	Interest expense			110			–			165
	Depreciation, amortization and
		accretion expense		630			220			860
EBITDA (Non-GAAP)			$	695-795		$	300-340		$	1,000-1,140
Add back:
	(Gain) loss on sale of business and
		other exit costs, net		–			–			–
	(Gain) loss on license sales and
		exchanges, net		(15)			–			(15)
	(Gain) loss on asset disposals, net			20			–			20
Adjusted EBITDA (Non-GAAP) (2)			$	700-800		$	300-340		$	1,005-1,145
Deduct:
	Equity in earnings of unconsolidated
		entities		140			–			140
	Interest and dividend income;
		other income(1)		10			–			10
Operating cash flow (Non-GAAP)(1)(2)(4)			$	550-650		$	300-340		$	855-995

 

 

 

 

			Actual Results
			Three Months Ended March 31, 2017						Year ended December 31, 2016
			U.S. Cellular		TDS Telecom		TDS (3)		U.S. Cellular		TDS Telecom		TDS (3)
(Dollars in millions)
Net income (GAAP)			$	28	$	18	$	43	$	49	$	42	$	52
Add back:
	Income tax expense			33		11		34		33		25		40
Income before income taxes
	(GAAP)		$	61	$	29	$	77	$	82	$	67	$	92
Add back:
	Interest expense			28		1		42		113		3		170
	Depreciation, amortization and
		accretion expense		153		56		211		618		224		850
EBITDA (Non-GAAP)			$	242	$	86	$	330	$	813	$	294	$	1,112
Add back:
	(Gain) loss on sale of business and
		other exit costs, net		–		–		–		–		–		(1)
	(Gain) loss on license sales and
		exchanges, net		(17)		–		(17)		(19)		(1)		(20)
	(Gain) loss on asset disposals, net			4		1		4		22		4		27
Adjusted EBITDA (Non-GAAP) (2)			$	229	$	86	$	317	$	816	$	298	$	1,118
Deduct:
	Equity in earnings of unconsolidated
		entities		33		–		32		140		–		140
	Interest and dividend income;
		other income (1)		3		1		4		6		3		11
	Other, net			(1)		–		1		1		–		–
Operating cash flow (Non-GAAP) (1)(2)(4)			$	194	$	85	$	280	$	669	$	295	$	967
Note: Totals may not foot due to rounding differences.

 

 

1. Equipment installment plan interest income is reflected as a component of Service revenues consistent with an accounting policy change effective January 1, 2017.  All prior period numbers have been recast to conform to this accounting change. 
2. Adjusted EBITDA (earnings before interest, taxes, depreciation, amortization and accretion) is defined as net income adjusted for the items set forth in the reconciliation above.  Operating cash flow is defined as net income adjusted for the items set forth in the reconciliation above.  Adjusted EBITDA and Operating cash flow 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 non-recurring, infrequent or unusual; such items may occur in the future.  Management uses Adjusted EBITDA and Operating cash flow as measurements of profitability, and therefore reconciliations to Net income are deemed appropriate.  Management believes Adjusted EBITDA and Operating cash flow are useful measures of TDS’ operating results before significant recurring non-cash charges, gains and losses, and other items as presented above as they provide additional relevant and useful information to investors and other users of TDS’ financial data in evaluating the effectiveness of its operations and underlying business trends in a manner that is consistent with management’s evaluation of business performance.  Adjusted EBITDA shows adjusted earnings before interest, taxes, depreciation, amortization and accretion, and gains and losses, while Operating cash flow 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 Adjusted EBITDA and Operating cash flow to the corresponding GAAP measure, Net income or Income before income taxes.
3. The TDS column includes U.S. Cellular, TDS Telecom and also the impacts of consolidating eliminations, corporate operations and non-reportable segments, all of which are not presented above.
4. A reconciliation of Operating cash flow (Non-GAAP) to Operating income (GAAP) for March 31, 2017, actual results can be found on the company's website at investors.tdsinc.com.

Conference Call Information

TDS will hold a conference call on May 5, 2017 at 9:30 a.m. Central Time.

 

• Access the live call on the Events & Presentations page of investors.tdsinc.com or at https://www.webcaster4.com/Webcast/Page/1145/20933.
• Access the call by phone at 877/407-8029 (US/Canada), no pass code required. 

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

About TDS

Telephone and Data Systems, Inc. (TDS), a Fortune 500® company, provides wireless; cable and wireline broadband, TV and voice; and hosted and managed services to approximately 6 million customers nationwide through its businesses, U.S. Cellular, TDS Telecom, OneNeck IT Solutions, and BendBroadband. Founded in 1969 and headquartered in Chicago, TDS employed 10,300 people as of March 31, 2017.

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

Contacts     

Jane McCahon, Senior Vice President - Corporate Relations and Corporate Secretary

312-592-5379

jane.mccahon@tdsinc.com

 

Julie Mathews, IRC, Director - Investor Relations

312-592-5341

julie.mathews@tdsinc.com 

 

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: intense competition; the ability to execute TDS’ business strategy; uncertainties in TDS’ future cash flows and liquidity and access to the capital markets; the ability to make payments on TDS and U.S. Cellular indebtedness or comply with the terms of debt covenants; impacts of any pending acquisitions/divestitures/exchanges of properties and/or licenses,  including, but not limited to, the ability to obtain regulatory approvals, successfully complete the transactions and the financial impacts of such transactions; the ability of the company to successfully manage and grow its markets; the access to and pricing of unbundled network elements; the ability to obtain or maintain roaming arrangements with other carriers on acceptable terms; the state and federal telecommunications regulatory environment; the value of assets and investments; adverse changes in the ratings of TDS and U.S. Cellular debt securities by accredited ratings organizations; industry consolidation; advances in telecommunications technology; pending and future litigation; changes in income tax rates, laws, regulations or rulings; changes in customer growth rates, average monthly revenue per user, churn rates, roaming revenue and terms, the availability of wireless devices, or the mix of services and products offered by U.S. Cellular and TDS Telecom. Investors are encouraged to consider these and other risks and uncertainties that are discussed in the Form 8-K Current Report used by TDS to furnish this press release to the Securities and Exchange Commission, which are incorporated by reference herein.    

 

For more information about TDS and its subsidiaries, visit:

TDS: www.tdsinc.com 

U.S. Cellular: 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						3/31/2017			12/31/2016			9/30/2016				6/30/2016			3/31/2016
Retail Connections
	Postpaid
		Total at end of period					4,455,000			4,482,000			4,484,000			4,490,000			4,454,000
		Gross additions					146,000			187,000			174,000			197,000			215,000
			Feature phones				7,000			7,000			10,000			8,000			9,000
			Smartphones				88,000			109,000			105,000			107,000			124,000
			Connected devices				51,000			71,000			59,000			82,000			82,000
		Net additions (losses)					(27,000)			(2,000)			(6,000)			36,000			45,000
			Feature phones				(19,000)			(21,000)			(20,000)			(21,000)			(25,000)
			Smartphones				(9,000)			(4,000)			(7,000)			8,000			20,000
			Connected devices				1,000			23,000			21,000			49,000			50,000
		ARPU (1)				$	45.42		$	45.19		$	47.08		$	47.37		$	48.13
		ABPU (Non-GAAP)(2)				$	55.82		$	55.43		$	56.79		$	56.09		$	56.06
		ARPA (3)				$	121.88		$	120.67		$	125.31		$	124.91		$	125.36
		ABPA (Non-GAAP)(4)				$	149.78		$	148.02		$	151.16		$	147.90		$	145.99
		Churn rate (5)					1.29%			1.41%			1.34%			1.20%			1.28%
			Handsets				1.08%			1.23%			1.22%			1.10%			1.18%
			Connected devices				2.55%			2.49%			2.04%			1.84%			2.01%
	Prepaid
		Total at end of period					480,000			484,000			480,000			413,000			399,000
		Gross additions					78,000			83,000			132,000			73,000			75,000
		Net additions (losses)					(4,000)			4,000			67,000			14,000			12,000
		ARPU (1)				$	33.66		$	33.25		$	34.39		$	34.58		$	35.51
		Churn rate (5)					5.69%			5.44%			4.84%			4.86%			5.37%
Total connections at end of period (6)							4,996,000			5,031,000			5,030,000			4,973,000			4,926,000
Market penetration at end of period
	Consolidated operating population						32,089,000			31,994,000			31,994,000			31,994,000			31,994,000
	Consolidated operating penetration (7)						16%			16%			16%			16%			15%
Capital expenditures (millions)						$	61		$	171		$	103		$	93		$	79
Total cell sites in service							6,417			6,415			6,374			6,324			6,306
Owned towers							4,041			4,040			4,015			3,988			3,989
(1)		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.
(2)		Average Billings Per User (“ABPU”) - non-GAAP metric is calculated by dividing total postpaid service revenues plus equipment installment plan billings by the average number of postpaid connections and by the number of months in the period.  Refer to the end of this release for a reconciliation of this metric to its most comparable GAAP metric.
(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)		Average Billings Per Account (“ABPA”) - non-GAAP metric is calculated by dividing total postpaid service revenues plus equipment installment plan billings by the average number of postpaid accounts and by the number of months in the period.  Refer to the end of this release for a reconciliation of this metric to its most comparable GAAP metric.
(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)		Includes reseller and other connections.
(7)		Market penetration is calculated by dividing the number of wireless connections at the end of the period by the total population of consolidated operating markets as estimated by Nielsen.

TDS Telecom
Summary Operating Data (Unaudited)
Quarter Ended			3/31/2017			12/31/2016			9/30/2016			6/30/2016			3/31/2016
TDS Telecom
Wireline
	Residential connections
		Voice (1)		308,200			310,600			314,600			316,800			318,400
		Broadband (2)		228,500			229,500			232,800			232,200			229,100
		IPTV (3)		45,200			45,300			43,600			41,200			38,300
		Wireline residential connections		581,900			585,400			590,900			590,200			585,800
	Total residential revenue per connection (4)		$	45.17		$	44.27		$	44.25		$	43.67		$	43.28
	Commercial connections
		Voice (1)		154,000			157,400			160,900			164,000			167,400
		Broadband (2)		21,200			21,400			21,700			21,900			22,000
		managedIP (5)		150,300			150,900			151,500			149,000			148,500
		Wireline commercial connections		325,500			329,700			334,000			334,900			337,900
	Total Wireline connections			907,400			915,200			924,900			925,100			923,700
Cable
	Cable Connections
		Broadband (6)		137,800			133,700			130,200			125,700			121,700
		Video (7)		97,600			99,000			101,100			102,900			104,600
		Voice (8)		59,000			59,600			59,800			58,900			58,100
		Cable connections		294,300			292,400			291,000			287,600			284,400
Numbers may not foot due to rounding.
(1)		The individual circuits connecting a customer to Wireline’s central office facilities.
(2)		The number of Wireline customers provided high-capacity data circuits via various technologies, including DSL and dedicated internet circuit technologies.
(3)		The number of Wireline customers provided video services using IP networking technology.
(4)		Total residential revenue per connection is calculated by dividing total Wireline residential revenue by the average number of Wireline residential connections and by the number of months in the period.
(5)		The number of telephone handsets, data lines and IP trunks providing communications using IP networking technology.
(6)		Billable number of lines into a building for high-speed data services.
(7)		Generally, a home or business receiving video programming counts as one video connection. In counting bulk residential or commercial connections, such as an apartment building or hotel, connections are counted based on the number of units/rooms within the building receiving service.
(8)		Billable number of lines into a building for voice services.

 

TDS Telecom
Capital Expenditures (millions)
Quarter Ended	3/31/2017			12/31/2016			9/30/2016			6/30/2016			3/31/2016
Wireline	$	17		$	26		$	27		$	27		$	27
Cable		9			13			11			17			13
HMS		6			5			2			2			2
	$	33		$	45		$	40		$	46		$	42

 

 

Telephone and Data Systems, Inc.
Consolidated Statement of Operations Highlights
(Unaudited)
				Three Months Ended March 31,
				2017			2016			2017 vs. 2016
										Increase (Decrease)
(Dollars and shares in millions, except per share amounts)
Operating revenues
	U.S. Cellular (1)			$	936		$	969		$	(33)		(3)%
	TDS Telecom				299			281			17		6%
	All Other (2)				3			4			(1)		(8)%
					1,238			1,254			(16)		(1)%
Operating expenses
	U.S. Cellular
		Expenses excluding depreciation, amortization and
			accretion		742			801			(59)		(7)%
		Depreciation, amortization and accretion			153			153			–		1%
		(Gain) loss on asset disposals, net			4			5			(1)		(28)%
		(Gain) loss on license sales and exchanges, net			(17)			–			(17)		N/M
					882			959			(77)		(8)%
	TDS Telecom
		Expenses excluding depreciation, amortization and
			accretion		213			205			8		4%
		Depreciation, amortization and accretion			56			58			(2)		(4)%
		(Gain) loss on asset disposals, net			1			1			–		(27)%
					270			264			6		2%
	All Other (1)
		Expenses excluding depreciation and amortization			3			4			(1)		(42)%
		Depreciation and amortization			2			1			1		(11)%
		(Gain) loss on asset disposals, net			(1)			–			(1)		90%
					4			5			(1)		(27)%
			Total operating expenses		1,156			1,228			(72)		(6)%
Operating income (loss)
	U.S. Cellular (1)				54			10			44		>100%
	TDS Telecom				29			17			12		70%
	All Other (2)				(1)			(1)			–		97%
					82			26			56		>100%
Investment and other income (expense)
	Equity in earnings of unconsolidated entities				32			35			(3)		(8)%
	Interest and dividend income (1)				4			3			1		63%
	Interest expense				(42)			(41)			(1)		(1)%
	Other, net				1			–			1		>100%
		Total investment and other income (1)			(5)			(3)			(2)		(33)%
Income before income taxes					77			23			54		>100%
	Income tax expense				34			13			21		>100%
Net income					43			10			33		>100%
	Less: Net income attributable to noncontrolling
		interests, net of tax			6			2			4		>100%
Net income attributable to TDS shareholders					37			8			29		>100%
	TDS Preferred dividend requirement				–			–			–		-
Net income available to common shareholders				$	37		$	8		$	29		>100%
Basic weighted average shares outstanding					110			109			1		1%
Basic earnings per share attributable to TDS shareholders				$	0.34		$	0.07		$	0.26		>100%
Diluted weighted average shares outstanding					112			110			2		1%
Diluted earnings per share attributable to TDS shareholders				$	0.33		$	0.07		$	0.26		>100%
N/M – Percentage change not meaningful
(1)	Equipment installment plan interest income is reflected as a component of Service revenues consistent with an accounting policy change effective January 1, 2017.  All prior period numbers have been recast to conform to this accounting change.
(2)	Consists of TDS corporate, intercompany eliminations and all other business operations not included in the U.S. Cellular and TDS Telecom segments.