TELEPHONE DATA SYSTEMS INC DE
For the period ended Sep 30, 2024. Filed Nov 1, 2024.
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A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Sep 30, 2024 · Filed Nov 1, 2024
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TDS Telecom Operations
Business Overview
TDS Telecom owns, operates and invests in high-quality networks, services and products in a mix of small to mid-sized urban, suburban and rural communities throughout the United States. TDS Telecom is a wholly-owned subsidiary of TDS and provides a wide range of broadband, video and voice communications services to residential, commercial and wholesale customers, with the constant focus on delivering outstanding customer service.
OPERATIONS
Serves 1.1 million connections in 32 states
Employs approximately 3,400 associates
Operational Overview — TDS Telecom
Total Service Address Mix
As of September 30,
TDS Telecom increased its service addresses 9% from a year ago to 1.8 million as of September 30, 2024 through network expansion.
TDS Telecom offers 1Gig+ service to 74% of its total footprint as of September 30, 2024, compared to 69% a year ago.
| As of September 30, | 2024 | 2023 | 2024 vs. 2023 |
|---|---|---|---|
| Residential connections | |||
| Broadband | |||
| Incumbent | 241,500 | 248,800 | (3)% |
| Expansion | 115,300 | 79,400 | 45% |
| Cable | 195,900 | 204,400 | (4)% |
| Total Broadband | 552,700 | 532,600 | 4% |
| Video | 122,100 | 132,400 | (8)% |
| Voice | 271,300 | 284,000 | (4)% |
| Total Residential Connections | 946,100 | 949,000 | — |
| Commercial connections | 197,200 | 217,400 | (9)% |
| Total connections | 1,143,300 | 1,166,400 | (2)% |
Total connections decreased due to legacy voice, video, and competitive local exchange carrier (CLEC) connections declines, partially offset by broadband connection growth.
Residential Broadband Connections by Speed
As of September 30,
Residential broadband customers continue to choose higher speeds with 79% taking speeds of 100 Mbps or greater and 20% choosing 1Gig+.
Residential Revenue per Connection
Total residential revenue per connection increased 5% and 6% for the three and nine months ended September 30, 2024, respectively, due primarily to price increases.
Financial Overview — TDS Telecom
The following discussion and analysis compares financial results for the three and nine months ended September 30, 2024, to the three and nine months ended September 30, 2023.
| Three Months EndedSeptember 30, | Nine Months EndedSeptember 30, | |||||
|---|---|---|---|---|---|---|
| 2024 | 2023 | 2024 vs. 2023 | 2024 | 2023 | 2024 vs. 2023 | |
| (Dollars in millions) | ||||||
| Residential | ||||||
| Incumbent | $90 | $89 | 1% | $269 | $264 | 2% |
| Expansion | 29 | 20 | 46% | 83 | 52 | 58% |
| Cable | 67 | 68 | (2)% | 206 | 204 | 1% |
| Total residential | 186 | 177 | 5% | 558 | 521 | 7% |
| Commercial | 36 | 38 | (4)% | 110 | 118 | (7)% |
| Wholesale | 40 | 42 | (3)% | 128 | 127 | 1% |
| Total service revenues | 262 | 256 | 2% | 796 | 766 | 4% |
| Equipment revenues | — | — | (6)% | 1 | 1 | (10)% |
| Total operating revenues | 263 | 256 | 2% | 797 | 767 | 4% |
| Cost of services (excluding Depreciation, amortization and accretion reported below) | 101 | 107 | (6)% | 297 | 319 | (7)% |
| Cost of equipment and products | — | — | 26% | 1 | — | 4% |
| Selling, general and administrative | 81 | 82 | (1)% | 236 | 244 | (3)% |
| Depreciation, amortization and accretion | 68 | 61 | 11% | 199 | 180 | 11% |
| (Gain) loss on asset disposals, net | 3 | 6 | (52)% | 8 | 8 | — |
| Total operating expenses | 252 | 256 | (1)% | 741 | 752 | (1)% |
| Operating income | $10 | $— | N/M | $56 | $15 | N/M |
| Net income | $9 | $4 | N/M | $51 | $19 | N/M |
| Adjusted OIBDA (Non-GAAP)1 | $81 | $67 | 20% | $263 | $203 | 30% |
| Adjusted EBITDA (Non-GAAP)1 | $83 | $68 | 21% | $269 | $207 | 30% |
| Capital expenditures2 | $78 | $172 | (55)% | $242 | $434 | (44)% |
Three Months Ended September 30, 2024 and 2023
Nine Months Ended September 30, 2024 and 2023
Residential revenues consist of:
Broadband services
Video services, including IPTV, traditional cable programming and satellite offerings
Voice services
Commercial revenues consist of:
High-speed and dedicated business internet services
Video services
Voice services
Wholesale revenues consist of:
Network access services primarily to interexchange and wireless carriers for carrying data and voice traffic on TDS Telecom's networks
Federal and state regulatory support, including E-ACAM
Key components of changes in the statement of operations items were as follows:
Total operating revenues
Residential revenues increased for the three and nine months ended September 30, 2024, due primarily to price increases and growth in broadband connections, partially offset by a decline in video and voice connections.
Commercial revenues decreased for the three and nine months ended September 30, 2024, due primarily to declining connections in CLEC markets.
Cost of services
Cost of services decreased for the three and nine months ended September 30, 2024, due primarily to a decrease in employee-related expenses and lower plant and maintenance costs.
Selling, general and administrative
Selling, general and administrative expenses decreased for the three and nine months ended September 30, 2024, due primarily to a decrease in employee-related expenses.
Depreciation, amortization and accretion
Depreciation, amortization and accretion increased for the three and nine months ended September 30, 2024, due primarily to capital expenditures on new fiber assets.
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