Telephone And Data Systems, Inc. · NYSE:TDS
Telephone And Data Systems — Q1 2022 Earnings Presentation
27 slides from Telephone And Data Systems's earnings presentation, May 6, 2022
Slide 1: First Quarter 2022 Results
First Quarter 2022 Results May 6, 2022
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: Investor relations calendar
Investor relations calendar 5/23/22 - J. P. Morgan 50th Annual Global Technology, Media and Communications Conference – From management: Ted Carlson, Michelle Brukwicki and Colleen Thompson 6/2/22 - Citi Non-Deal Roadshow in New York City – From management: LT Therivel and Colleen Thompson 3
Slide 4: ESG 3Cs
ESG 3Cs TDS considers the S in ESG as our 3Cs - Customer, Culture and Community UScellular Offering Support to Best Places to Work for LGBTQ+ Equality UScellular Teams Up with Girls Who Customers with Free Calls to Ukraine TDS Telecom and UScellular Both Earn Code to Increase Awareness to STEM Perfe
Slide 5: Well positioned for long-term sustainable growth
Well positioned for long-term sustainable growth Demand for broadband continues to grow Connectivity, whether fixed or mobile, is a necessity to remote education, health care and work Seek to maintain a sound financial foundation for the enterprise so that each of our businesses can take advantage o
Slide 6: UScellular
3 uscellular
Slide 7: Key strategic priorities
Key strategic priorities Advance Our Mission Continued Focus on Growth Expand Return on Capital Optimize Infrastructure Programs Advance the Network Invest in our Team 3¥ uscellular a TDS
Slide 8: Multi-pronged growth strategies
Multi-pronged growth strategies Focus on Growth 8
Slide 9: Postpaid connections
Postpaid connections Gross Additions* Net Additions* 10 175 5 (1) 150 0 (2) 40 (3) (5) -5 (3) (5) (3) (10) 125 39 40 -10 40 35 -15 100 (36) -20 75 -25 125 -30 50 104 101 105 -35 91 -40 (8) 25 -45 0 -50 Q1'21 Q2'21 Q3'21 Q4'21 Q1'22 Q1'21 Q2'21 Q3'21 Q4'21 Q1'22 Handsets Handsets Connected devices Co
Slide 10: Postpaid churn rate
Postpaid churn rate 1.60% 1.40% 1.35% 1.30% 1.20% 1.12% 1.11% 1.15% 1.10% 1.10% 1.00% 0.92% 0.95% 0.88% 0.80% 0.60% 0.40% 0.20% 0.00% Q1'21 Q2'21 Q3'21 Q4'21 Q1'22 Handsets Total Postpaid 10
Slide 11: Prepaid connections
Prepaid connections Gross Additions* Net Additions* 15 75 10 5 10 11 50 0 (3) 74 (5) 62 65 63 -5 55 25 (18) -10 -15 0 -20 Q1'21 Q2'21 Q3'21 Q4'21 Q1'22 Q1'21 Q2'21 Q3'21 Q4'21 Q1'22 11 *In thousands
Slide 12: Total operating revenues
Total operating revenues ($ in millions) $1,200 $1,068 $1,023 $1,014 $1,016 $1,010 $900 $252 $228 $286 $223 $240 $60 $62 $61 $65 $64 $28 $28 $30 $24 $21 $600 $683 $684 $697 $693 $702 $300 $0 Q1'21 Q2'21 Q3'21 Q4'21 Q1'22 Retail service Roaming Other service Equipment sales Note: Q3'21 retail service
Slide 13: Postpaid ARPU & ARPA
Postpaid ARPU & ARPA Average Revenue Per User (ARPU) Average Revenue Per Account (ARPA) 4% Y/Y Growth 4% Y/Y Growth $50 $132 $128 $48 $124 $46 $120 $49.71 $116 $129.93 $48.62 $127.14 $44 $47.65 $47.74 $48.12 $125.25 $125.25 $125.99 $112 $108 $42 $104 $40 $100 Q1'21 Q2'21 Q3'21 Q4'21 Q1'22 Q1'21 Q2'2
Slide 14: Tower revenues
Tower revenues • 4,310 Owned towers (62% of total cell sites) • 2,263 colocators Tower rental revenue 10% Y/Y Growth ($ in millions) $22.3 $21 $21.5 $20.7 $20.3 $20.2 $18 $15 $12 Q1'21 Q2'21 Q3'21 Q4'21 Q1'22 14
Slide 15: UScellular operating performance
UScellular operating performance ($ in millions) Q1'22 Q1'21 % Change Service revenues $ 787 $ 771 2% Equipment sales 223 252 (12)% Total operating revenues 1,010 1,023 (1)% System operations expense 185 185 – Cost of equipment sold 257 275 (6)% SG&A expenses 325 305 6% Total cash expenses (1) 767 7
Slide 16: 2022 guidance
2022 guidance * ($ in millions) As of May 5, 2022 2021 Actual 2022 Previous Estimates 2022 Current Estimates Service revenues $3,115 $3,100-$3,200 Unchanged Adjusted OIBDA (2) $869 $750-$900 Unchanged Adjusted EBITDA (2) $1,054 $925-$1,075 Unchanged Capital expenditures $780 $700-$800 Unchanged 2022
Slide 17: Slide 17
Slide 18: Our strategy is built on five pillars that will continue to transform our business
Our strategy is built on five pillars that will continue to transform our business Expand footprint through fiber Increase top line through average deployments in new markets Grow Grow revenue per connection growth, and consider acquisitions Scale Revenue broadband penetration growth, and continued
Slide 19: Investments are driving footprint expansion and improved broadband services
Investments are driving footprint expansion and improved broadband services Quarterly Highlights Total Service Address Mix • Fiber Expansion 1.3M 1.4M Service Addresses • Announced new markets in MT & WI • Deployed 22,000 marketable fiber service 24% 7% addresses in the quarter 33% (Y/Y growth) • Ex
Slide 20: Strategy continues to drive residential broadband growth
Strategy continues to drive residential broadband growth • Growth of nearly 28,000 residential broadband connections • 67% of customers are taking 100 Mbps or greater vs. 62% in prior year • Residential broadband revenues grew 10% Residential Broadband Connections Residential Broadband Connections b
Slide 21: Broadband growth is offsetting legacy revenue declines
Broadband growth is offsetting legacy revenue declines Operating Revenues Residential Revenue per Connection $300 ($ in millions) $60.00 $249 $251 $7 $10 $57.95 $56.97 $200 $85 $85 $55.00 4% 2% $65 $67 Residential $100 (Y/Y growth) Revenue Y/Y $47 $44 growth $50.00 $45 $44 $— Q1'21 Q1'22 $45.00 Whol
Slide 22: TDS Telecom operating performance
TDS Telecom operating performance ($ in millions) Q1’22 Q1’21 % Change Total operating revenues $ 251 $ 249 1% Cash expenses (1) 169 168 – Adjusted EBITDA (2) $ 83 $ 81 3% Capital expenditures $ 105 $ 70 50 % 22 (1) (2) -See final slide for explanations
Slide 23: 2022 TDS Telecom guidance
2022 TDS Telecom guidance* ($ in millions) As of May 5, 2022 2021 Actual 2022 Previous Estimates 2022 Current Estimates Total operating revenues $1,006 $1,010-$1,040 Unchanged (2) Adjusted OIBDA $310 $260-$290 Unchanged (2) Adjusted EBITDA $310 $260-$290 Unchanged Capital expenditures $411 $500-$550
Slide 24: Appendix
Appendix
Slide 25: Adjusted OIBDA and Adjusted EBITDA Reconciliation
Adjusted OIBDA and Adjusted EBITDA Reconciliation Three Months Ended March 31, 2022 Three Months Ended March 31, 2021 ($ in millions) UScellular TDS Telecom TDS (3) UScellular TDS Telecom TDS (3) Net income (GAAP) $52 $23 $72 $62 $24 $71 Add back: Income tax expense 32 8 37 27 8 31 Income before inc
Slide 26: Adjusted OIBDA and Adjusted EBITDA Reconciliation – 2022 Estimated and 2021 Full Year
Adjusted OIBDA and Adjusted EBITDA Reconciliation – 2022 Estimated and 2021 Full Year In providing 2022 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 27: Footnotes and non-GAAP definitions
1) 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. 2) EBITDA, Adjusted EBITDA and Adjusted OIBDA are defined as net income ad
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