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Business Segment Information (Tables) | 9 Months Ended
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Sep. 30, 2018
Segment Reporting [Abstract] |
Business segment information | Financial data for TDS’ reportable segments for the three and nine month periods ended, or as of September 30, 2018 and 2017, is as follows. See Note 1 — Basis of Presentation for additional information.
|  |  | TDS Telecom |  |  |  |
Three Months Ended or as of September 30, 2018¹ | U.S. Cellular |  | Wireline |  | Cable |  | TDS Telecom Total 2 |  | Corporate, Eliminations and Other |  | Total
(Dollars in millions) |  |  |  |  |  |  |  |  |  |  |
Operating revenues |  |  |  |  |  |  |  |  |  |  |
Service | $ | 759 |  |  | $ | 176 |  |  | $ | 58 |  |  | $ | 234 |  |  | $ | 24 |  |  | $ | 1,017 |
Equipment and product sales | 242 |  |  | — |  |  | — |  |  | — |  |  | 38 |  |  | 280 |
Total operating revenues | 1,001 |  |  | 177 |  |  | 58 |  |  | 234 |  |  | 62 |  |  | 1,297 |
Cost of services (excluding Depreciation, amortization and accretion reported below) | 200 |  |  | 68 |  |  | 26 |  |  | 94 |  |  | 20 |  |  | 314 |
Cost of equipment and products | 258 |  |  | — |  |  | — |  |  | — |  |  | 33 |  |  | 291 |
Selling, general and administrative | 346 |  |  | 49 |  |  | 14 |  |  | 63 |  |  | 12 |  |  | 421 |
Depreciation, amortization and accretion | 160 |  |  | 35 |  |  | 17 |  |  | 53 |  |  | 7 |  |  | 220 |
(Gain) loss on asset disposals, net | 3 |  |  | (4 | ) |  | 1 |  |  | (3 | ) |  | — |  |  | — |
Operating income (loss) | 34 |  |  | 28 |  |  | — |  |  | 28 |  |  | (11 | ) |  | 51 |
Equity in earnings of unconsolidated entities | 42 |  |  | — |  |  | — |  |  | — |  |  | — |  |  | 42 |
Interest and dividend income | 4 |  |  | 2 |  |  | — |  |  | 2 |  |  | — |  |  | 6 |
Interest expense | (29 | ) |  | 1 |  |  | — |  |  | 1 |  |  | (15 | ) |  | (43 | )
Other, net | — |  |  | 1 |  |  | — |  |  | 1 |  |  | 1 |  |  | 2 |
Income (loss) before income taxes | 51 |  |  | 31 |  |  | — |  |  | 31 |  |  | (24 | ) |  | 58 |
Income tax expense (benefit)3 | 14 |  |  |  |  |  |  |  |  | (5 | ) |  | (4 | ) |  | 5 |
Net income (loss) | 37 |  |  |  |  |  |  |  |  | 36 |  |  | (20 | ) |  | 53 |
Add back: |  |  |  |  |  |  |  |  |  |  |
Depreciation, amortization and accretion | 160 |  |  | 35 |  |  | 17 |  |  | 53 |  |  | 7 |  |  | 220 |
(Gain) loss on asset disposals, net | 3 |  |  | (4 | ) |  | 1 |  |  | (3 | ) |  | — |  |  | — |
Interest expense | 29 |  |  | (1 | ) |  | — |  |  | (1 | ) |  | 15 |  |  | 43 |
Income tax expense (benefit)3 | 14 |  |  |  |  |  |  |  |  | (5 | ) |  | (4 | ) |  | 5 |
Adjusted EBITDA 4 | $ | 243 |  |  | $ | 61 |  |  | $ | 18 |  |  | $ | 80 |  |  | $ | (2 | ) |  | $ | 321 |
Investments in unconsolidated entities | $ | 461 |  |  | $ | 4 |  |  | $ | — |  |  | $ | 4 |  |  | $ | 35 |  |  | $ | 500 |
Total assets | $ | 7,228 |  |  | $ | 1,302 |  |  | $ | 637 |  |  | $ | 1,929 |  |  | $ | 562 |  |  | $ | 9,719 |
Capital expenditures | $ | 118 |  |  | $ | 41 |  |  | $ | 13 |  |  | $ | 54 |  |  | $ | 5 |  |  | $ | 177 |
Numbers may not foot due to rounding.
|  |  | TDS Telecom |  |  |  |
Three Months Ended or as of September 30, 2017 | U.S. Cellular |  | Wireline |  | Cable |  | TDS Telecom Total 2 |  | Corporate, Eliminations and Other |  | Total
(Dollars in millions) |  |  |  |  |  |  |  |  |  |  |
Operating revenues |  |  |  |  |  |  |  |  |  |  |
Service | $ | 737 |  |  | $ | 178 |  |  | $ | 52 |  |  | $ | 230 |  |  | $ | 21 |  |  | $ | 988 |
Equipment and product sales | 226 |  |  | — |  |  | — |  |  | — |  |  | 37 |  |  | 263 |
Total operating revenues | 963 |  |  | 179 |  |  | 52 |  |  | 230 |  |  | 58 |  |  | 1,251 |
Cost of services (excluding Depreciation, amortization and accretion reported below) | 185 |  |  | 66 |  |  | 25 |  |  | 90 |  |  | 19 |  |  | 294 |
Cost of equipment and products | 261 |  |  | — |  |  | — |  |  | — |  |  | 30 |  |  | 291 |
Selling, general and administrative 5 | 350 |  |  | 49 |  |  | 13 |  |  | 63 |  |  | 10 |  |  | 423 |
Depreciation, amortization and accretion | 153 |  |  | 38 |  |  | 11 |  |  | 49 |  |  | 7 |  |  | 209 |
Loss on impairment of goodwill 6 | 370 |  |  | — |  |  | — |  |  | — |  |  | (108 | ) |  | 262 |
(Gain) loss on asset disposals, net | 5 |  |  | — |  |  | 1 |  |  | 1 |  |  | — |  |  | 6 |
(Gain) loss on sale of business and other exit costs, net | (1 | ) |  | — |  |  | — |  |  | — |  |  | — |  |  | (1 | )
Operating income (loss)5 | (360 | ) |  | 25 |  |  | 2 |  |  | 27 |  |  | 100 |  |  | (233 | )
Equity in earnings of unconsolidated entities | 35 |  |  | — |  |  | — |  |  | — |  |  | — |  |  | 35 |
Interest and dividend income | 2 |  |  | 2 |  |  | — |  |  | 2 |  |  | — |  |  | 4 |
Interest expense | (28 | ) |  | — |  |  | — |  |  | — |  |  | (15 | ) |  | (43 | )
Other, net 5 | — |  |  | 1 |  |  | — |  |  | 1 |  |  | — |  |  | 1 |
Income (loss) before income taxes | (351 | ) |  | 28 |  |  | 2 |  |  | 30 |  |  | 85 |  |  | (236 | )
Income tax expense (benefit)3 | (53 | ) |  |  |  |  |  |  |  | 11 |  |  | 37 |  |  | (5 | )
Net income (loss) | (298 | ) |  |  |  |  |  |  |  | 18 |  |  | 49 |  |  | (231 | )
Add back: |  |  |  |  |  |  |  |  |  |  |
Depreciation, amortization and accretion | 153 |  |  | 38 |  |  | 11 |  |  | 49 |  |  | 7 |  |  | 209 |
Loss on impairment of goodwill 6 | 370 |  |  | — |  |  | — |  |  | — |  |  | (108 | ) |  | 262 |
(Gain) loss on asset disposals, net | 5 |  |  | — |  |  | 1 |  |  | 1 |  |  | — |  |  | 6 |
(Gain) loss on sale of business and other exit costs, net | (1 | ) |  | — |  |  | — |  |  | — |  |  | — |  |  | (1 | )
Interest expense | 28 |  |  | — |  |  | — |  |  | — |  |  | 15 |  |  | 43 |
Income tax expense (benefit)3 | (53 | ) |  |  |  |  |  |  |  | 11 |  |  | 37 |  |  | (5 | )
Adjusted EBITDA 4 | $ | 204 |  |  | $ | 66 |  |  | $ | 14 |  |  | $ | 79 |  |  | $ | — |  |  | $ | 283 |
Investments in unconsolidated entities | $ | 429 |  |  | $ | 4 |  |  | $ | — |  |  | $ | 4 |  |  | $ | 34 |  |  | $ | 467 |
Total assets | $ | 6,780 |  |  | $ | 1,201 |  |  | $ | 619 |  |  | $ | 1,822 |  |  | $ | 608 |  |  | $ | 9,210 |
Capital expenditures | $ | 112 |  |  | $ | 41 |  |  | $ | 14 |  |  | $ | 56 |  |  | $ | 4 |  |  | $ | 172 |
Numbers may not foot due to rounding.
|  |  | TDS Telecom |  |  |  |
Nine Months Ended or as of September 30, 2018¹ | U.S. Cellular |  | Wireline |  | Cable |  | TDS Telecom Total 2 |  | Corporate, Eliminations and Other |  | Total
(Dollars in millions) |  |  |  |  |  |  |  |  |  |  |
Operating revenues |  |  |  |  |  |  |  |  |  |  |
Service | $ | 2,224 |  |  | $ | 524 |  |  | $ | 170 |  |  | $ | 693 |  |  | $ | 71 |  |  | $ | 2,988 |
Equipment and product sales | 692 |  |  | 1 |  |  | — |  |  | 1 |  |  | 96 |  |  | 789 |
Total operating revenues | 2,916 |  |  | 526 |  |  | 170 |  |  | 695 |  |  | 166 |  |  | 3,777 |
Cost of services (excluding Depreciation, amortization and accretion reported below) | 566 |  |  | 200 |  |  | 78 |  |  | 277 |  |  | 59 |  |  | 902 |
Cost of equipment and products | 716 |  |  | 1 |  |  | — |  |  | 1 |  |  | 87 |  |  | 804 |
Selling, general and administrative | 1,014 |  |  | 146 |  |  | 42 |  |  | 187 |  |  | 31 |  |  | 1,232 |
Depreciation, amortization and accretion | 478 |  |  | 108 |  |  | 52 |  |  | 160 |  |  | 24 |  |  | 662 |
(Gain) loss on asset disposals, net | 5 |  |  | (3 | ) |  | 1 |  |  | (2 | ) |  | — |  |  | 3 |
(Gain) loss on license sales and exchanges, net | (18 | ) |  | — |  |  | — |  |  | — |  |  | — |  |  | (18 | )
Operating income (loss) | 155 |  |  | 75 |  |  | (4 | ) |  | 71 |  |  | (34 | ) |  | 192 |
Equity in earnings of unconsolidated entities | 120 |  |  | — |  |  | — |  |  | — |  |  | 1 |  |  | 121 |
Interest and dividend income | 10 |  |  | 5 |  |  | 1 |  |  | 5 |  |  | 3 |  |  | 18 |
Interest expense | (87 | ) |  | 1 |  |  | — |  |  | 1 |  |  | (43 | ) |  | (129 | )
Other, net | — |  |  | 2 |  |  | — |  |  | 2 |  |  | (1 | ) |  | 1 |
Income (loss) before income taxes | 198 |  |  | 83 |  |  | (3 | ) |  | 80 |  |  | (75 | ) |  | 203 |
Income tax expense (benefit)3 | 55 |  |  |  |  |  |  |  |  | 7 |  |  | (14 | ) |  | 48 |
Net income (loss) | 143 |  |  |  |  |  |  |  |  | 73 |  |  | (61 | ) |  | 155 |
Add back: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Depreciation, amortization and accretion | 478 |  |  | 108 |  |  | 52 |  |  | 160 |  |  | 24 |  |  | 662 |
(Gain) loss on asset disposals, net | 5 |  |  | (3 | ) |  | 1 |  |  | (2 | ) |  | — |  |  | 3 |
(Gain) loss on license sales and exchanges, net | (18 | ) |  | — |  |  | — |  |  | — |  |  | — |  |  | (18 | )
Interest expense | 87 |  |  | (1 | ) |  | — |  |  | (1 | ) |  | 43 |  |  | 129 |
Income tax expense (benefit)3 | 55 |  |  |  |  |  |  |  |  | 7 |  |  | (14 | ) |  | 48 |
Adjusted EBITDA 4 | $ | 750 |  |  | $ | 186 |  |  | $ | 50 |  |  | $ | 236 |  |  | $ | (7 | ) |  | $ | 979 |
Capital expenditures | $ | 274 |  |  | $ | 103 |  |  | $ | 37 |  |  | $ | 140 |  |  | $ | 16 |  |  | $ | 430 |
Numbers may not foot due to rounding.
|  |  | TDS Telecom |  |  |  |
Nine Months Ended or as of September 30, 2017 | U.S. Cellular |  | Wireline |  | Cable |  | TDS Telecom Total 2 |  | Corporate, Eliminations and Other |  | Total
(Dollars in millions) |  |  |  |  |  |  |  |  |  |  |
Operating revenues |  |  |  |  |  |  |  |  |  |  |
Service | $ | 2,223 |  |  | $ | 537 |  |  | $ | 152 |  |  | $ | 689 |  |  | $ | 64 |  |  | $ | 2,976 |
Equipment and product sales | 639 |  |  | 1 |  |  | — |  |  | 1 |  |  | 120 |  |  | 760 |
Total operating revenues | 2,862 |  |  | 538 |  |  | 152 |  |  | 690 |  |  | 184 |  |  | 3,736 |
Cost of services (excluding Depreciation, amortization and accretion reported below) | 549 |  |  | 194 |  |  | 73 |  |  | 266 |  |  | 59 |  |  | 874 |
Cost of equipment and products | 749 |  |  | 2 |  |  | — |  |  | 2 |  |  | 97 |  |  | 848 |
Selling, general and administrative 5 | 1,041 |  |  | 147 |  |  | 39 |  |  | 185 |  |  | 23 |  |  | 1,249 |
Depreciation, amortization and accretion | 460 |  |  | 114 |  |  | 32 |  |  | 146 |  |  | 26 |  |  | 632 |
Loss on impairment of goodwill 6 | 370 |  |  | — |  |  | — |  |  | — |  |  | (108 | ) |  | 262 |
(Gain) loss on asset disposals, net | 14 |  |  | 1 |  |  | 1 |  |  | 2 |  |  | — |  |  | 16 |
(Gain) loss on sale of business and other exit costs, net | (1 | ) |  | — |  |  | — |  |  | — |  |  | — |  |  | (1 | )
(Gain) loss on license sales and exchanges, net | (19 | ) |  | — |  |  | — |  |  | — |  |  | — |  |  | (19 | )
Operating income (loss)5 | (301 | ) |  | 81 |  |  | 7 |  |  | 88 |  |  | 88 |  |  | (125 | )
Equity in earnings of unconsolidated entities | 101 |  |  | — |  |  | — |  |  | — |  |  | — |  |  | 101 |
Interest and dividend income | 6 |  |  | 4 |  |  | — |  |  | 4 |  |  | 2 |  |  | 12 |
Interest expense | (85 | ) |  | — |  |  | — |  |  | — |  |  | (43 | ) |  | (128 | )
Other, net 5 | 1 |  |  | 3 |  |  | — |  |  | 2 |  |  | — |  |  | 3 |
Income (loss) before income taxes | (278 | ) |  | 88 |  |  | 7 |  |  | 95 |  |  | 46 |  |  | (137 | )
Income tax expense (benefit)3 | (19 | ) |  |  |  |  |  |  |  | 37 |  |  | 21 |  |  | 39 |
Net income (loss) | (259 | ) |  |  |  |  |  |  |  | 58 |  |  | 25 |  |  | (176 | )
Add back: |  |  |  |  |  |  |  |  |  |  |
Depreciation, amortization and accretion | 460 |  |  | 114 |  |  | 32 |  |  | 146 |  |  | 26 |  |  | 632 |
Loss on impairment of goodwill 6 | 370 |  |  | — |  |  | — |  |  | — |  |  | (108 | ) |  | 262 |
(Gain) loss on asset disposals, net | 14 |  |  | 1 |  |  | 1 |  |  | 2 |  |  | — |  |  | 16 |
(Gain) loss on sale of business and other exit costs, net | (1 | ) |  | — |  |  | — |  |  | — |  |  | — |  |  | (1 | )
(Gain) loss on license sales and exchanges, net | (19 | ) |  | — |  |  | — |  |  | — |  |  | — |  |  | (19 | )
Interest expense | 85 |  |  | — |  |  | — |  |  | — |  |  | 43 |  |  | 128 |
Income tax expense (benefit)3 | (19 | ) |  |  |  |  |  | 37 |  |  | 21 |  |  | 39 |
Adjusted EBITDA 4 | $ | 631 |  |  | $ | 202 |  |  | $ | 41 |  |  | $ | 243 |  |  | $ | 7 |  |  | $ | 881 |
Capital expenditures | $ | 257 |  |  | $ | 91 |  |  | $ | 35 |  |  | $ | 127 |  |  | $ | 19 |  |  | $ | 402 |
Numbers may not foot due to rounding.
1 | As of January 1, 2018, TDS adopted ASU 2014-09 using a modified retrospective approach. Under this method, the new accounting standard is applied only to the most recent period presented. As a result, 2018 amounts include the impacts of ASU 2014-09, but 2017 amounts remain as previously reported, except as specifically stated. See Note 2 — Revenue Recognition for additional information.
2 | TDS Telecom Total includes eliminations between the Wireline and Cable segments.
3 | Income tax expense (benefit) is not provided at the individual segment level for Wireline and Cable. TDS calculates income tax expense for “TDS Telecom Total”.
4 | Adjusted earnings before interest, taxes, depreciation, amortization and accretion (Adjusted EBITDA) 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 EBITDA is defined as net income, adjusted for the items set forth in the reconciliation above. TDS believes Adjusted EBITDA is a useful measure of TDS’ operating results before significant recurring non-cash charges, gains and losses, and other items as presented above as they provide additional relevant and useful information to investors and other users of TDS' financial data in evaluating the effectiveness of its operations and underlying business trends in a manner that is consistent with management's evaluation of business performance.
5 | ASU 2017-07, regarding net periodic pension cost and net periodic postretirement benefit cost was adopted as of January 1, 2018, and applied retrospectively. All prior year numbers have been recast to conform to this standard.
6 | During the three months ended September 30, 2017, U.S. Cellular recorded a goodwill impairment of $370 million while TDS recorded a goodwill impairment of the U.S. Cellular reporting unit of $227 million. Prior to 2009, TDS accounted for U.S. Cellular's share repurchases as step acquisitions, allocating a portion of the share repurchase value to TDS' Goodwill. Further, goodwill of the U.S. Cellular reporting unit was impaired at the TDS level in 2003 but not at U.S. Cellular. Consequently, U.S. Cellular's goodwill on a stand-alone basis and any resulting impairments of goodwill does not equal the TDS consolidated goodwill related to U.S. Cellular. The TDS adjustment of $143 million is included in "Corporate, Eliminations and Other." During the three months ended September 30, 2017, TDS also recorded a goodwill impairment of $35 million related to its HMS operations included in "Corporate, Eliminations and Other."

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- Definition Tabular disclosure of the profit or loss and total assets for each reportable segment. An entity discloses certain information on each reportable segment if the amounts (a) are included in the measure of segment profit or loss reviewed by the chief operating decision maker or (b) are otherwise regularly provided to the chief operating decision maker, even if not included in that measure of segment profit or loss. + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 22 -URI http://asc.fasb.org/extlink&oid=115929826&loc=d3e8736-108599 Reference 2: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 25 -URI http://asc.fasb.org/extlink&oid=115929826&loc=d3e8813-108599 Reference 3: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 350 -SubTopic 20 -Section 50 -Paragraph 1 -URI http://asc.fasb.org/extlink&oid=108376223&loc=d3e13816-109267 Reference 4: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 21 -Subparagraph (b) -URI http://asc.fasb.org/extlink&oid=115929826&loc=d3e8721-108599 Reference 5: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 30 -URI http://asc.fasb.org/extlink&oid=115929826&loc=d3e8906-108599 + Details
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