Telephone And Data Systems, Inc. · NYSE:TDS
Telephone And Data Systems — Q1 2015 Earnings Presentation
27 slides from Telephone And Data Systems's earnings presentation, May 1, 2015
Slide 1: First Quarter 2015 Results
First Quarter 2015 Results May 1, 2015
Slide 2: Safe Harbor Statement Under the Private Securities Litigation Reform Act of 1995
Safe Harbor Statement Under the Private aN\ Securities Litigation Reform Act of 1995 All information set forth in this presentation, except historical and factual information, represents forward-looking statements. This includes all statements about the company’s plans, beliefs, estimates, and expec
Slide 3: Important Information: Proxy Solicitation
a TDS’ IMPORTANT INFORMATION: TDS and its directors, executive officers and other members of its management and employees may be deemed to be participants in the solicitation of proxies from the shareholders of TDS in connection with the ‘TDS 2015 annual meeting of shareholders. Information regardin
Slide 4: U.S. Cellular
K US. Cellular
Slide 5: First quarter highlights
Kus Cellular First quarter highlights * Postpaid churn of 1.5% reflecting improved levels of customer satisfaction * Strong connected device sales driven by successful tablet promotion * Steady adoption of Equipment Installment Plans helping to manage subsidy expense * Total revenue growth of 4% * S
Slide 6: Customer results
RUS Cellular Customer results rr Postpaid gross additions 200,000 197,000 Postpaid churn 1.5% 2.3% Postpaid net additions (losses) 9,000 (93,000) Prepaid net additions 12,000 13,000 Retail net additions (losses) 21,000 (80,000) Total retail customers 4,667,000 4,530,000 Phones nartphones Postpaid gr
Slide 7: Monthly postpaid churn rate
RUS Cellular Monthly postpaid churn rate 2 3 | 150% 1.00% | oom
Slide 8: Smartphone sales and penetration
RUS Cellular Smartphone sales and penetration ‘Smartphones Sold ‘Smartphones Customers. — (Se of handsets sold) (Se of postpaid handsets) 70% oe 10%, si 20% se 10% 3 o% se Qe aie gate gee” aris ae qe are ate ars
Slide 9: Postpaid service revenue
Postpaid service revenue K US.Cellular ‘2000 1000 ‘Average Revenue Per User $5759 $5582 45637 gsust ssas7 ‘2000 | | | $000 QM Qu gr Qe gras soit ae SOF 0 ‘Average Revenue Per Account Qe are Qe tas an 025 sR 9732 cal
Slide 10: Equipment Installment Plans
US.Cellular Equipment Installment Plans emer ($ in millions) Number of transactions 182,000 6,000 EIP sales as a % of total device sales 39% 1% EIP equipment revenue $68 $3 EIP accounts receivable at end of period (ST & LT), net $219 $3 EIP bad debts expense $5 _
Slide 11: Total operating revenues
RUS Cellular Total operating revenues Service revenues $828 $854 (3%) Retail service 746 765 (2%) Roaming 40 50 (20%) Tower rentals 14 13 9% Other 28 26 7% Equipment sales revenues 137 22 90% Total operating revenues $965 $926 4%
Slide 12: Operating cash flow
Kus Cellular Operating cash flow Service revenues $828 $854 (3%) Equipment sales revenues 137 72 90% Total operating revenues 965 926 4% ‘System operations expense 191181 6% Cost of equipment sold 238 = 270 (12%) SG&A expenses 369-396 (7%) Total cash expenses 798 847 (6%) Operating cash flow‘) 167 7
Slide 13: Adjusted EBITDA
Kus Cellular Adjusted EBITDA ($ in ml ns) Operating cash flow‘) Equity in earnings of unconsolidated 34 37 (7%) entities Other, net 8 1 >100% Adjusted EBITDA\) $209 $117 79% (2) Qperatin cash tow apa Rusted EBITDA 8 non-GAAP nancial measures that are Getne in the on [GAAP reconciliation a the end of
Slide 14: 2015 guidance
. US.Cellular 2015 guidance) * (as 0f 5/1/15) Total operating revenues $4,000 - $4,200 Unchanged Operating cash flow?) $400- $500 $350 - $450 $338 Adjusted EBITDA®) $580- $680 $530- $630 $480 Capital expenditures $600 Unchanged $558 (2) There can be no assurance that final results will not alffer ma
Slide 15: TDS Telecom and OneNeck
mS BAA, asS%ana © OneNeck
Slide 16: 2015 strategic priorities
2015 strategic priorities MS * Wireline * Continue targeted fiber deployment; increase broadband and IPTV penetration in existing markets * Cable * Improve residential and commercial broadband customer penetrations * Leverage wireline capabilities to create additional synergies * Continue to evaluat
Slide 17: TDS Telecom operating performance
TDS Telecom operating performance MS Fine cris) cra) chars] Wireline $176.1 $177.5 (1%) Cable 43.6 22.5 94% HMS $1.0 $3.1 B%) Total operating revenues) 280.0 262.4 7% Expenses(#v@) 200.5 190.3 5% Adjusted EBITDA®) $79.9 $72.9 10% (2) Reflects intercompany eliminations. (2) Represents cost of product
Slide 18: Wireline operating performance
Wireline operating performance ST oe change Residential $74.7 $72.5 3% Commercial 55.8 58.0 (4%) Wholesale 45.2 46.4 G%) Total service revenues 175.7 176.9 (1%) Expenses) 108.7 111.4 (2%) Adjusted EBITDA®) $67.9 $66.7 2% (2) Represents cost of products and services and selling, general and administr
Slide 19: Broadband speeds, IPTV and managed IP driving wireline revenue growth
Broadband speeds, IPTV and managedIP MT driving wireline revenue growth ILEC Residential Customers by Broadband Speeds snc P5315 | 3/31/14 ae se >5Mb 83% 79% 120,000 > 10Mb 42% 36% ben > 25 Mb 12% 7% Sime = IPTV Connections 20,000 SSS 58 8S 3 IPTV 25,600 15,900 Wireline Commercial Wireline Residenti
Slide 20: Cable snapshot
Cable snapshot Me Connections Operating Performance Henin | aris] arse) cone] Total operating $43.6 $22.5 94% Broadband 112,200 63,000 revenues Voice 49,100 17,700 Expenses?) 32.6 17.3 88% Total cable 271,000 149,400 Adjusted EBITDA®@ $10.9 $5.2 >100% connections Penetration Video Broadband Voice (2
Slide 21: Hosted and Managed Services operating performance
Hosted and Managed Services — operating performance Service revenues $28.4 $27.4 Equipment revenues 32.5 35.2 oa) Total operating revenues 61.0 63.1 (3%) Expenses(?) 59.8 62.2 (4%) Adjusted EBITDA?) $ 1.0 $ 1.0 Se (2) Represents cost of products and services and selling, general and administrative e
Slide 22: 2015 TDS Telecom guidance
2015 TDS Telecom guidance MT Unchanged from previous estimates 015 Estimate 2014 Actual $ in milion: Keurene) ‘Total operating revenues $1,130 - $1,180 $1,088 Operating cash flow’) $280 - $310 $296 Adjusted EBITDA® $280 - $310 $298 Capital expenditures $220 $208 (1) There can be no assurance that fi
Slide 23: Appendix
Appendix
Slide 24: Operating Cash Flow and Adjusted EBITDA Reconciliation - Q1 2015 and Q1 2014
Operating Cash Flow and Adjusted EBITDA =. Reconciliation - Q1 2015 and Q1 2014 Actual Results TDS
Slide 25: Operating Cash Flow and Adjusted EBITDA Reconciliation
Operating Cash Flow and Adjusted EBITDA Reconciliation van TDS’ sone rota rsa | cscemie eee oman
Slide 26: Reconciliation footnotes and definitions
(1) In providing 2015 Estimated Results, TDS has not completed the above reconciliation to net income because it does not provide guidance for income taxes. TOS believes that the impact of Income taxes ‘cannot be reasonably predicted; therefore, the company is unable to provide such guidance. Accord
Slide 27: Slide 27
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