Telephone And Data Systems, Inc. · NYSE:TDS
Telephone And Data Systems — Q2 2024 Earnings Presentation
24 slides from Telephone And Data Systems's earnings presentation, Aug 2, 2024
Slide 1: Second Quarter 2024 Results
Second Quarter 2024 Results August 2, 2024
Slide 2: Safe Harbor Statement Under the Private Securities Litigation Reform Act of 1995
Safe Harbor Statement Under the Private Securities Litigation Reform Act of 1995 All information set forth in this presentation about Telephone and Data Systems, Inc., including its subsidiaries UScellular and TDS Telecom, except historical and factual information, represents forward-looking stateme
Slide 3: Corporate Update
Corporate Update • Strategic alternatives review of UScellular ◦ Announced the sale of wireless operations and select spectrum assets on May 28, 2024 ◦ Seeking to monetize the remaining 70% of spectrum • Announced agreement to sell OneNeck IT Solutions Operations • Balancing improved profitability w
Slide 4: UScellular
3 uscellular
Slide 5: Quarterly highlights
Quarterly highlights Meaningful sequential improvement in total net losses • Competitive environment remains aggressive • Improved postpaid and prepaid churn • Grew postpaid ARPU 2% Year-over-year Adjusted OIBDA growth from ongoing expense management Advancing the network • Continued mid-band deploy
Slide 6: Wireless - postpaid operating metrics
Wireless - postpaid operating metrics Gross Additions (in thousands) Net Additions (in thousands) 1 3 3 3 5 42 44 49 44 43 83 84 80 73 (29) (29) 63 (38) (53) (47) Q2'23 Q3'23 Q4'23 Q1'24 Q2'24 Q2'23 Q3'23 Q4'23 Q1'24 Q2'24 Handsets Connected Devices Handsets Connected devices Fixed Wireless Subscrib
Slide 7: Wireless - prepaid operating metrics
Wireless - prepaid operating metrics Gross Additions (in thousands) Net Additions (in thousands) 0 3 — (8) (11) (13) 50 52 50 43 41 Q2'23 Q3'23 Q4'23 Q1'24 Q2'24 Q2'23 Q3'23 Q4'23 Q1'24 Q2'24 7
Slide 8: Towers - Q2 2024 operating metrics
Towers - Q2 2024 operating metrics Tower Revenue Distribution 4,388 Owned Towers 14% 2,392 34% Number of Colocations 25% 1.55 27% Tower Tenancy Rate AT&T Verizon T-Mobile Other 8
Slide 9: UScellular Total - operating performance
UScellular Total - operating performance ($M) Q2'24 Q2'23 % Change Service revenues $ 743 $ 760 (2)% Equipment sales 184 197 (6)% Total operating revenues 927 957 (3)% System operations expense 180 190 (5)% Cost of equipment sold 211 228 (7)% (1) SG&A expenses 322 341 (5)% Total cash expenses (2) 71
Slide 10: Wireless - operating performance
Wireless - operating performance ($M), except Postpaid ARPU Q2'24 Q2'23 % Change Retail service $ 666 $ 686 (3)% Other 52 49 7% Service revenues 718 735 (2)% Equipment sales 184 197 (6)% Total operating revenues 902 932 (3)% System operations expense (1) 194 203 (4)% Cost of equipment sold 211 228 (
Slide 11: Towers - operating performance
Towers - operating performance ($M) Q2'24 Q2'23 % Change Third-party revenues $ 25 $ 25 1% Intra-company revenues 33 32 4% Total tower revenues 58 57 3% System operations expense 19 19 (1)% SG&A expenses (1) 9 8 8% Total cash expenses (2) 28 27 2% Adjusted OIBDA (2) 31 30 6% Capital expenditures $ 5
Slide 12: 2024 UScellular guidance
2024 UScellular guidance * ($M) As of August 2, 2024 2023 Actual 2024 Previous Estimates 2024 Current Estimates Service revenues $3,044 $2,950-$3,050 Unchanged Adjusted OIBDA (1) $818 $750-$850 Unchanged Adjusted EBITDA (1) $986 $920-$1,020 Unchanged Capital expenditures $611 $550-$650 Unchanged (1)
Slide 13: Slide 13
Slide 14: Quarterly Highlights
Quarterly Highlights Expanding footprint • Network expansion increased service addresses 10% • Deployed 27,000 new marketable fiber addresses; 55,000 YTD Broadband strategy delivered both top and bottom line growth versus prior year • Residential broadband connections up 5% • Residential revenue per
Slide 15: Progress on our long-term fiber program
Progress on our long-term fiber program Deployed 27,000 marketable fiber service addresses in 2Q'24 Goal: Goal: Goal: 1.2 million 60% 80% marketable of service service addresses fiber service addresses to be with speeds of 1 addresses* served by fiber Gig+ Where are we: Where are we: Where are we: 8
Slide 16: Growing fiber footprint driving faster speeds
Growing fiber footprint driving faster speeds Total Service Address Mix Residential Broadband Connections by Speed 1.6M 1.7M 100% 100% 13% 19% 8% Service 41% 75% 10% Addresses 75% 49% 73% 1 Gig+ 10% 53% 50% 50% 50% 27% Y/Y growth 24% 25% 25% 15% 14% 26% 21% 17% 13% —% —% Q2'23 Q2'24 Q2'23 Q2'24 Copp
Slide 17: Strong residential revenue growth
Strong residential revenue growth Total residential broadband connections grew 5% Y/Y Residential Broadband Net Residential Revenue per Operating Revenues ($M) Additions Connection 15,000 $70.00 $300 $267 12,500 $257 8,200 2,100 $18 $28 10,000 $65.26 $65.00 7,500 $200 $89 $90 $61.97 5,000 7% 2,500 5
Slide 18: TDS Telecom operating performance
TDS Telecom operating performance ($M) Q2’24 Q2’23 % Change Total operating revenues $ 267 $ 257 4% Cash expenses (1) 178 189 (6)% Adjusted EBITDA (1) $ 91 $ 70 32 % Capital expenditures $ 78 $ 132 (41)% 18 (1) See appendix for explanation.
Slide 19: 2024 TDS Telecom guidance
2024 TDS Telecom guidance* ($M) As of August 2, 2024 2023 Actual 2024 Previous Estimates 2024 Current Estimates Total operating revenues $1,028 $1,070-$1,100 $1,050-$1,080 Adjusted OIBDA (1) $279 $310-$340 $330-$360 Adjusted EBITDA (1) $285 $310-$340 $330-$360 Capital expenditures $577 $310-$340 Unc
Slide 20: Appendix
Appendix
Slide 21: Adjusted OIBDA and Adjusted EBITDA Reconciliation
Adjusted OIBDA and Adjusted EBITDA Reconciliation Three Months Ended June 30, 2024 Three Months Ended June 30, 2023 ($M) UScellular TDS Telecom TDS* UScellular TDS Telecom TDS* Net income (GAAP) $18 $18 $7 $5 $7 $— Add back: Income tax expense 14 3 6 19 3 15 Income before income taxes (GAAP) $32 $21
Slide 22: Adjusted OIBDA and Adjusted EBITDA Reconciliation
Adjusted OIBDA and Adjusted EBITDA Reconciliation Three Months Ended June 30, 2024 Three Months Ended June 30, 2023 UScellular UScellular ($M) UScellular Wireless Towers UScellular Wireless Towers EBITDA (Non-GAAP) (1) $ 171 $ 30 $ 165 $ 30 Add back or deduct: Expenses related to strategic alternati
Slide 23: Adjusted OIBDA and Adjusted EBITDA Reconciliation – 2024 Estimated and 2023 Full Year
Adjusted OIBDA and Adjusted EBITDA Reconciliation – 2024 Estimated and 2023 Full Year In providing 2024 estimated results, TDS has not completed the below reconciliation to net income because it does not provide guidance for income taxes. TDS believes that the impact of income taxes cannot be reason
Slide 24: Cash Expenses and non-GAAP definitions
Cash Expenses Total cash expenses represent total operating expenses as shown in the Consolidated Statement of Operations Highlights in the TDS and UScellular SEC Forms 8-K, less depreciation, amortization and accretion and gain/losses. EBITDA, Adjusted EBITDA and Adjusted OIBDA EBITDA, Adjusted EBI
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