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Business Segment Information
 6 Months Ended
Jun. 30, 2020
Segment Reporting [Abstract]  
Business Segment Information
Note 12 Business Segment Information
U.S. Cellular and TDS Telecom are billed for 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 and six month periods ended, or as of June 30, 2020 and 2019, is as follows. See Note 1 — Basis of Presentation for additional information. 
 
 
 
TDS Telecom
 
 
 
 
Three Months Ended or as of June 30, 2020
U.S. Cellular
 
Wireline
 
Cable
 
TDS Telecom Total1
 
Corporate, Eliminations and Other
 
Total
(Dollars in millions)
 
 
 
 
 
 
 
 
 
 
 
Operating revenues
 
 
 
 
 
 
 
 
 
 
 
Service
$
753

 
$
169

 
$
71

 
$
240

 
$
23

 
$
1,016

Equipment and product sales
220

 
—

 
—

 
—

 
27

 
247

Total operating revenues
973

 
169

 
71

 
241

 
49

 
1,263

Cost of services (excluding Depreciation, amortization and accretion reported below)
197

 
63

 
30

 
92

 
17

 
306

Cost of equipment and products
218

 
—

 
—

 
—

 
23

 
241

Selling, general and administrative
323

 
48

 
17

 
66

 
9

 
398

Depreciation, amortization and accretion
178

 
32

 
20

 
51

 
7

 
236

(Gain) loss on asset disposals, net
4

 
—

 
—

 
—

 
—

 
4

Operating income (loss)
53

 
27

 
4

 
31

 
(6
)
 
78

Equity in earnings of unconsolidated entities
44

 
—

 
—

 
—

 
—

 
44

Interest and dividend income
1

 
1

 
—

 
1

 
—

 
2

Interest expense
(25
)
 
1

 
—

 
1

 
(14
)
 
(38
)
Income (loss) before income taxes
73

 
28

 
4

 
33

 
(20
)
 
86

Income tax expense (benefit)2
4

 


 


 
5

 
(1
)
 
8

Net income (loss)
69

 


 


 
28

 
(19
)
 
78

Add back:
 
 
 
 
 
 
 
 
 
 
 
Depreciation, amortization and accretion
178

 
32

 
20

 
51

 
7

 
236

(Gain) loss on asset disposals, net
4

 
—

 
—

 
—

 
—

 
4

Interest expense
25

 
(1
)
 
—

 
(1
)
 
14

 
38

Income tax expense (benefit)2
4

 


 


 
5

 
(1
)
 
8

Adjusted EBITDA3
$
280

 
$
59

 
$
24

 
$
83

 
$
1

 
$
364

 


 


 


 


 


 


Investments in unconsolidated entities
$
445

 
$
4

 
$
—

 
$
4

 
$
37

 
$
486

Total assets
$
8,500

 
$
1,495

 
$
725

 
$
2,210

 
$
451

 
$
11,161

Capital expenditures
$
168

 
$
58

 
$
17

 
$
75

 
$
4

 
$
247

 
 
 
TDS Telecom
 
 
 
 
Three Months Ended or as of June 30, 2019
U.S. Cellular
 
Wireline
 
Cable
 
TDS Telecom Total1
 
Corporate, Eliminations and Other
 
Total
(Dollars in millions)
 
 
 
 
 
 
 
 
 
 
 
Operating revenues
 
 
 
 
 
 
 
 
 
 
 
Service
$
757

 
$
172

 
$
62

 
$
233

 
$
23

 
$
1,013

Equipment and product sales
216

 
—

 
—

 
—

 
32

 
248

Total operating revenues
973

 
172

 
62

 
233

 
55

 
1,261

Cost of services (excluding Depreciation, amortization and accretion reported below)
193

 
64

 
27

 
91

 
20

 
304

Cost of equipment and products
224

 
—

 
—

 
—

 
25

 
249

Selling, general and administrative
344

 
49

 
15

 
64

 
13

 
421

Depreciation, amortization and accretion
177

 
33

 
17

 
50

 
7

 
234

(Gain) loss on asset disposals, net
5

 
(1
)
 
—

 
(1
)
 
1

 
5

Operating income (loss)
30

 
27

 
2

 
29

 
(11
)
 
48

Equity in earnings of unconsolidated entities
40

 
—

 
—

 
—

 
1

 
41

Interest and dividend income
5

 
3

 
—

 
3

 
1

 
9

Interest expense
(29
)
 
1

 
—

 
1

 
(15
)
 
(43
)
Income (loss) before income taxes
46

 
30

 
3

 
33

 
(24
)
 
55

Income tax expense (benefit)2
14

 


 


 
8

 
(6
)
 
16

Net income (loss)
32

 


 


 
25

 
(18
)
 
39

Add back:
 
 
 
 
 
 
 
 
 
 
 
Depreciation, amortization and accretion
177

 
33

 
17

 
50

 
7

 
234

(Gain) loss on asset disposals, net
5

 
(1
)
 
—

 
(1
)
 
1

 
5

Interest expense
29

 
(1
)
 
—

 
(1
)
 
15

 
43

Income tax expense (benefit)2
14

 


 


 
8

 
(6
)
 
16

Adjusted EBITDA3
$
257

 
$
62

 
$
20

 
$
82

 
$
(2
)
 
$
337

 
 
 
 
 
 
 
 
 
 
 
 
Investments in unconsolidated entities
$
450

 
$
4

 
$
—

 
$
4

 
$
36

 
$
490

Total assets
$
8,223

 
$
1,377

 
$
641

 
$
2,009

 
$
563

 
$
10,795

Capital expenditures
$
195

 
$
55

 
$
15

 
$
70

 
$
(1
)
 
$
264


 
 
 
TDS Telecom
 
 
 
 
Six Months Ended or as of June 30, 2020
U.S. Cellular
 
Wireline
 
Cable
 
TDS Telecom Total1
 
Corporate, Eliminations and Other
 
Total
(Dollars in millions)
 
 
 
 
 
 
 
 
 
 
 
Operating revenues

 

 

 

 

 

Service
$
1,515

 
$
338

 
$
142

 
$
480

 
$
47

 
$
2,042

Equipment and product sales
422

 
—

 
—

 
1

 
59

 
482

Total operating revenues
1,937

 
339

 
142

 
481

 
106

 
2,524

Cost of services (excluding Depreciation, amortization and accretion reported below)
377

 
128

 
60

 
188

 
34

 
599

Cost of equipment and products
435

 
—

 
—

 
—

 
52

 
487

Selling, general and administrative
659

 
97

 
34

 
130

 
20

 
809

Depreciation, amortization and accretion
354

 
64

 
39

 
103

 
13

 
470

(Gain) loss on asset disposals, net
8

 
—

 
—

 
—

 
—

 
8

Operating income (loss)
104

 
50

 
9

 
59

 
(12
)
 
151

Equity in earnings of unconsolidated entities
89

 
—

 
—

 
—

 
1

 
90

Interest and dividend income
5

 
3

 
1

 
4

 
(1
)
 
8

Interest expense
(49
)
 
2

 
—

 
2

 
(28
)
 
(75
)
Other, net
—

 
(1
)
 
—

 
(1
)
 
—

 
(1
)
Income (loss) before income taxes
149

 
55

 
10

 
64

 
(40
)
 
173

Income tax expense (benefit)2
8

 


 


 
8

 
(4
)
 
12

Net income (loss)
141

 


 


 
56

 
(36
)
 
161

Add back:


 


 


 


 


 


Depreciation, amortization and accretion
354

 
64

 
39

 
103

 
13

 
470

(Gain) loss on asset disposals, net
8

 
—

 
—

 
—

 
—

 
8

Interest expense
49

 
(2
)
 
—

 
(2
)
 
28

 
75

Income tax expense (benefit)2
8

 


 


 
8

 
(4
)
 
12

Adjusted EBITDA3
$
560

 
$
116

 
$
49

 
$
165

 
$
1

 
$
726

 


 


 


 


 


 


Capital expenditures
$
405

 
$
97

 
$
31

 
$
128

 
$
6

 
$
539


 
 
 
TDS Telecom
 
 
 
 
Six Months Ended or as of June 30, 2019
U.S. Cellular
 
Wireline
 
Cable
 
TDS Telecom Total1
 
Corporate, Eliminations and Other
 
Total
(Dollars in millions)
 
 
 
 
 
 
 
 
 
 
 
Operating revenues
 
 
 
 
 
 
 
 
 
 
 
Service
$
1,498

 
$
342

 
$
121

 
$
463

 
$
47

 
$
2,008

Equipment and product sales
441

 
1

 
—

 
1

 
68

 
510

Total operating revenues
1,939

 
343

 
121

 
464

 
115

 
2,518

Cost of services (excluding Depreciation, amortization and accretion reported below)
369

 
127

 
52

 
179

 
40

 
588

Cost of equipment and products
458

 
1

 
—

 
1

 
54

 
513

Selling, general and administrative
669

 
96

 
30

 
125

 
25

 
819

Depreciation, amortization and accretion
345

 
66

 
34

 
100

 
15

 
460

(Gain) loss on asset disposals, net
7

 
(8
)
 
1

 
(8
)
 
1

 
—

(Gain) loss on sale of business and other exit costs, net
(2
)
 
—

 
—

 
—

 
—

 
(2
)
(Gain) loss on license sales and exchanges, net
(2
)
 
—

 
—

 
—

 
—

 
(2
)
Operating income (loss)
95

 
61

 
5

 
66

 
(19
)
 
142

Equity in earnings of unconsolidated entities
84

 
—

 
—

 
—

 
1

 
85

Interest and dividend income
11

 
5

 
1

 
6

 
—

 
17

Interest expense
(58
)
 
1

 
—

 
1

 
(29
)
 
(86
)
Other, net
(1
)
 
—

 
—

 
—

 
2

 
1

Income (loss) before income taxes
131

 
68

 
6

 
74

 
(46
)
 
159

Income tax expense (benefit)2
41

 
 
 
 
 
18

 
(9
)
 
50

Net income (loss)
90

 
 
 
 
 
56

 
(37
)
 
109

Add back:
 
 
 
 
 
 
 
 
 
 
 
Depreciation, amortization and accretion
345

 
66

 
34

 
100

 
15

 
460

(Gain) loss on asset disposals, net
7

 
(8
)
 
1

 
(8
)
 
1

 
—

(Gain) loss on sale of business and other exit costs, net
(2
)
 
—

 
—

 
—

 
—

 
(2
)
(Gain) loss on license sales and exchanges, net
(2
)
 
—

 
—

 
—

 
—

 
(2
)
Interest expense
58

 
(1
)
 
—

 
(1
)
 
29

 
86

Income tax expense (benefit)2
41

 
 
 
 
 
18

 
(9
)
 
50

Adjusted EBITDA3
$
537

 
$
125

 
$
40

 
$
165

 
$
(1
)
 
$
701

 
 
 
 
 
 
 
 
 
 
 
 
Capital expenditures
$
297

 
$
84

 
$
28

 
$
112

 
$
2

 
$
411

Numbers may not foot due to rounding.
1 
TDS Telecom Total includes eliminations between the Wireline and Cable segments.
2 
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".
3 
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.