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Business Segment Information
 3 Months Ended
Mar. 31, 2014
Disclosure Text Block  
Business Segment Information

11. Business Segment Information

 

U.S. Cellular and TDS Telecom are billed for all services they receive from TDS, consisting primarily of information processing, accounting and finance, and general management services. Such billings are based on expenses specifically identified to U.S. Cellular and TDS Telecom and on allocations of common expenses. Management believes the method used to allocate common expenses is reasonable and that all expenses and costs applicable to U.S. Cellular and TDS Telecom are reflected in the accompanying business segment information on a basis that is representative of what they would have been if U.S. Cellular and TDS Telecom operated on a stand-alone basis.

 

Financial data for TDS' reportable segments for the three month periods ended, or as of March 31, 2014 and 2013, is as follows. See Note 1 — Basis of Presentation for additional information.

        TDS Telecom       
                       
Three Months Ended or as of March 31, 2014 U.S. Cellular Wireline Cable HMS TDS Telecom Eliminations TDS Telecom Total Non-Reportable Segment Corporate, Eliminations and Other Reconciling Items Total
(Dollars in thousands)                           
Operating revenues                           
 Service $ 853,613 $ 176,933 $ 22,503 $ 27,376 $ (681) $ 226,131 $ 4,513 $ (4,015) $ 1,080,242
 Equipment and product sales   72,198   553   -   35,732   -   36,285   7,237   -   115,720
  Total operating revenues   925,811   177,486   22,503   63,108   (681)   262,416   11,750   (4,015)   1,195,962
Cost of services (excluding Depreciation, amortization and accretion reported below)   180,607   64,400   10,955   16,946   (645)   91,656   4,250   (555)   275,958
Cost of equipment and products   270,474   483   -   30,467   -   30,950   5,223   -   306,647
Selling, general and administrative   395,564   46,520   6,378   14,835   (36)   67,697   3,746   (3,338)   463,669
Depreciation, amortization and accretion   167,753   42,736   4,361   6,678   -   53,775   1,802   1,589   224,919
(Gain) loss on asset disposals, net   1,934   245   65   34   -   344   143   9   2,430
(Gain) loss on sale of business and other exit costs, net   (6,900)   -   -   -   -   -   -   -   (6,900)
(Gain) loss on license sales and exchanges   (91,446)   -   -   -   -   -   -   -   (91,446)
Operating income   7,825   23,102   744   (5,852)   -   17,994   (3,414)   (1,720)   20,685
Equity in earnings of unconsolidated entities   37,075   -   -   -   -   -   -   252   37,327
Interest and dividend income   884   685   1   20   -   706   -   896   2,486
Interest expense   (14,862)   664   5   (421)   -   248   (1,069)   (13,024)   (28,707)
Other, net   86   (54)   -   134   -   80   (5)   (1)   160
Income before income taxes   31,008   24,397   750   (6,119)   -   19,028   (4,488)   (13,597)   31,951
Add back:                           
Depreciation, amortization and accretion   167,753   42,736   4,361   6,678   -   53,775   1,802   1,589   224,919
(Gain) loss on sale of business and other exit costs, net   (6,900)   -   -   -   -   -   -   -   (6,900)
(Gain) loss on license sales and exchanges   (91,446)   -   -   -   -   -   -   -   (91,446)
Interest expense   14,862   (664)   (5)   421   -   (248)   1,069   13,024   28,707
Adjusted income before income taxes $ 115,277 $ 66,469 $ 5,106 $ 980 $ - $ 72,555 $ (1,617) $ 1,016 $ 187,231
                              
Investments in unconsolidated entities $ 289,842 $ 3,807 $ - $ - $ - $ 3,807 $ - $ 32,630 $ 326,279
Total assets $ 6,338,334 $ 1,426,408 $ 280,891 $ 313,521 $ - $ 2,020,820 $ 54,796 $ 335,353 $ 8,749,303
Capital expenditures $ 89,581 $ 22,898 $ 6,219 $ 2,751 $ - $ 31,868 $ 95 $ 1,054 $ 122,598

        TDS Telecom       
                    
Three Months Ended or as of March 31, 2013 U.S. Cellular Wireline HMS TDS Telecom Eliminations TDS Telecom Total Non-Reportable Segment Corporate, Eliminations and Other Reconciling Items Total
(Dollars in thousands)                        
Operating revenues                        
 Service $ 996,349 $ 180,678 $ 22,000 $ (78) $ 202,600 $ 4,633 $ (4,680) $ 1,198,902
 Equipment and product sales   85,397   897   13,564   -   14,461   9,813   -   109,671
  Total operating revenues   1,081,746   181,575   35,564   (78)   217,061   14,446   (4,680)   1,308,573
Cost of services (excluding Depreciation, amortization and accretion reported below)   216,299   66,439   13,602   (78)   79,963   3,221   (356)   299,127
Cost of equipment and products   241,691   1,010   11,212   -   12,222   6,852   -   260,765
Selling, general and administrative   420,080   57,380   9,921   -   67,301   3,761   (4,239)   486,903
Depreciation, amortization and accretion   189,845   44,023   5,468   -   49,491   1,509   1,232   242,077
(Gain) loss on asset disposals, net   5,434   163   30   -   193   1   (12)   5,616
(Gain) loss on sale of business and other exit costs, net   6,931   -   -   -   -   -   -   6,931
Operating income   1,466   12,560   (4,669)   -   7,891   (898)   (1,305)   7,154
Equity in earnings of unconsolidated entities   26,835   7   -   -   7   -   247   27,089
Interest and dividend income   903   386   16   -   402   1   272   1,578
Interest expense   (10,910)   831   (405)   -   426   (982)   (13,032)   (24,498)
Other, net   (215)   (52)   (122)   -   (174)   237   (2)   (154)
Income before income taxes   18,079   13,732   (5,180)   -   8,552   (1,642)   (13,820)   11,169
Add back:                        
Depreciation, amortization and accretion   189,845   44,023   5,468   -   49,491   1,509   1,232   242,077
(Gain) loss on sale of business and other exit costs, net   6,931   -   -   -   -   -   -   6,931
Interest expense   10,910   (831)   405   -   (426)   982   13,032   24,498
Adjusted income before income taxes $ 225,765 $ 56,924 $ 693 $ - $ 57,617 $ 849 $ 444 $ 284,675
                           
Investments in unconsolidated entities $ 165,529 $ 3,814 $ - $ - $ 3,814 $ - $ 31,828 $ 201,171
Total assets $ 6,523,635 $ 1,484,891 $ 264,586 $ - $ 1,749,477 $ 61,178 $ 167,533 $ 8,501,823
Capital expenditures $ 118,410 $ 27,866 $ 2,591 $ - $ 30,457 $ 285 $ 984 $ 150,136

Adjusted income before income taxes is a segment measure reported to the chief operating decision maker for purposes of making decisions about allocating resources to the segments and assessing their performance. Adjusted income before income taxes is defined as Income (loss) before income taxes, adjusted for the items set forth in the reconciliation above. Adjusted income before income taxes excludes these items in order to show operating results on a more comparable basis from period to period. In addition, TDS may also exclude other items from adjusted income before income taxes if such items help reflect operating results on a more comparable basis. TDS does not intend to imply that any of such amounts that are excluded are non-recurring, infrequent or unusual; such amounts may occur in the future. TDS believes Adjusted income before income taxes is a useful measure of TDS' operating results before significant recurring non-cash charges, discrete gains and losses and financing charges (Interest expense).