2024 guidance reaffirmed CHICAGO, May 3, 2024 /PRNewswire/ -- As previously announced, TDS will hold a teleconference on May 3, 2024, at 9:00 a.m. CDT. Listen to the call live via the Events & Presentations page of investors.tdsinc.com. Telephone and Data Systems, Inc. (NYSE:TDS) reported total operating revenues of $1,262 million for the first quarter of 2024, versus $1,303 million for the same period one year ago. Net income (loss) attributable to TDS common shareholders and related diluted earnings (loss) per share were $12 million and $0.10, respectively, for the first quarter of 2024 compared to $(9) million and $(0.08), respectively, in the same period one year ago. 1Q 2024 Highlights* UScellular Financial results Service revenues decreased 2% Postpaid ARPU grew 3% Net income, Adjusted OIBDA and Adjusted EBITDA up significantly Postpaid churn rate reduced 4% Fixed wireless customers grew 42% to 124,000 TDS Telecom On track to deliver 125,000 fiber service addresses in 2024 Delivered 28,000 fiber services addresses in Q1 Grew total year over year service address footprint 12% Solid fiber growth driving strong results Residential broadband connections grew 6% Operating revenues grew 5%; Residential revenues grew 10% Adjusted EBITDA up significantly * Comparisons are 1Q'23 to 1Q'24 unless otherwise noted "The TDS Family of Companies' ongoing commitment to quality networks supports our mission of providing outstanding communications services to our customers," said LeRoy T. Carlson, Jr., TDS President and CEO. "Our customers are benefiting from the deployments of mid-band spectrum and fiber. "UScellular continues to balance subscriber growth with financial discipline in this highly competitive environment. Though we lost postpaid customers in the first quarter, UScellular made progress in postpaid churn reduction. Increased postpaid ARPU and ongoing cost optimization programs drove notable improvements in profitability. "TDS Telecom is seeing strong growth in revenue and profitability primarily as a result of the significant broadband investments made over the past couple of years. With steady fiber service address delivery and successful selling activities, TDS Telecom reached a milestone by exceeding 100,000 residential broadband connections in our expansion markets. TDS Telecom deployed an additional 28,000 marketable fiber service addresses in the first quarter and is on track to reach its goal of delivering 125,000 new marketable service addresses in 2024."  Exploration of Strategic Alternatives for UScellular On August 4, 2023, TDS and UScellular announced that the Boards of Directors of both companies decided to initiate a process to explore a range of strategic alternatives for UScellular. The review remains active and on-going. 2024 Estimated Results TDS' current estimates of full-year 2024 results for UScellular and TDS Telecom are shown below. Such estimates represent management's view as of May 3, 2024 and should not be assumed to be current as of any future date. TDS undertakes no duty to update such estimates, whether as a result of new information, future events, or otherwise. There can be no assurance that final results will not differ materially from estimated results. 2024 Estimated Results UScellular Previous Current (Dollars in millions) Service revenues $2,950-$3,050 Unchanged Adjusted OIBDA1, 2 $750-$850 Unchanged Adjusted EBITDA1, 2 $920-$1,020 Unchanged Capital expenditures $550-$650 Unchanged TDS Telecom Previous Current (Dollars in millions) Total operating revenues $1,070-$1,100 Unchanged Adjusted OIBDA1 $310-$340 Unchanged Adjusted EBITDA1 $310-$340 Unchanged Capital expenditures $310-$340 Unchanged The following tables reconcile EBITDA, Adjusted EBITDA and Adjusted OIBDA to the corresponding GAAP measures, Net income or Income before income taxes. In providing 2024 estimated results, TDS has not completed the below reconciliation to Net income because it does not provide guidance for income taxes. Although potentially significant, TDS believes that the impact of income taxes cannot be reasonably predicted; therefore, TDS is unable to provide such guidance. 2024 Estimated Results2 UScellular TDS Telecom (Dollars in millions) Net income (GAAP) N/A N/A Add back: Income tax expense N/A N/A Income before income taxes (GAAP) $60-$160 $40-$70 Add back: Interest expense 185 — Depreciation, amortization and accretion expense 660 270 EBITDA (Non-GAAP)1 $905-$1,005 $310-$340 Add back or deduct: (Gain) loss on asset disposals, net 15 — Adjusted EBITDA (Non-GAAP)1 $920-$1,020 $310-$340 Deduct: Equity in earnings of unconsolidated entities 155 — Interest and dividend income 15 — Adjusted OIBDA (Non-GAAP)1 $750-$850 $310-$340   Actual Results Three Months Ended March 31, 2024 Year Ended December 31, 2023 UScellular TDS Telecom UScellular TDS Telecom (Dollars in millions) Net income (GAAP) $             24 $             24 $             58 $         (483) Add back: Income tax expense 28 7 53 (26) Income before income taxes (GAAP) $             52 $             31 $           111 $         (509) Add back: Interest expense 43 (2) 196 (8) Depreciation, amortization and accretion expense 165 65 656 245 EBITDA (Non-GAAP)1 $           260 $             93 $           963 $         (272) Add back or deduct: Expenses related to strategic alternatives review 7 — 8 — Loss on impairment of goodwill — — — 547 (Gain) loss on asset disposals, net 6 2 17 10 (Gain) loss on license sales and exchanges, net (1) — (2) — Adjusted EBITDA (Non-GAAP)1 $           272 $             95 $           986 $           285 Deduct: Equity in earnings of unconsolidated entities 42 — 158 — Interest and dividend income 2 1 10 4 Other, net — 1 — 2 Adjusted OIBDA (Non-GAAP)1 $           228 $             93 $           818 $           279 Numbers may not foot due to rounding. 1 EBITDA, Adjusted EBITDA and Adjusted OIBDA are defined as net income adjusted for the items set forth in the reconciliation above. EBITDA, Adjusted EBITDA and Adjusted OIBDA are not measures of financial performance under Generally Accepted Accounting Principles in the United States (GAAP) and should not be considered as alternatives to Net income or Cash flows from operating activities, as indicators of cash flows or as measures of liquidity. TDS does not intend to imply that any such items set forth in the reconciliation above are infrequent or unusual; such items may occur in the future. Management uses Adjusted EBITDA and Adjusted OIBDA as measurements of profitability, and therefore reconciliations to Net income are deemed appropriate. Management believes Adjusted EBITDA and Adjusted OIBDA are useful measures of TDS' operating results before significant recurring non-cash charges, nonrecurring expenses, 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. Adjusted EBITDA shows adjusted earnings before interest, taxes, depreciation, amortization and accretion, gains and losses, and expenses related to the strategic alternatives review of UScellular while Adjusted OIBDA reduces this measure further to exclude Equity in earnings of unconsolidated entities and Interest and dividend income in order to more effectively show the performance of operating activities excluding investment activities. The table above reconciles EBITDA, Adjusted EBITDA and Adjusted OIBDA to the corresponding GAAP measure, Net income or Income before income taxes. Additional information and reconciliations related to Non-GAAP financial measures for March 31, 2024, can be found on TDS' website at investors.tdsinc.com. 2 2024 Estimated Results do not reflect any anticipated costs, expenses or results of the strategic alternatives review referenced above. Conference Call Information TDS will hold a conference call on May 3, 2024 at 9:00 a.m. Central Time. Access the live call on the Events & Presentations page of investors.tdsinc.com or athttps://events.q4inc.com/attendee/316610586 Access the call by phone at (888)330-2384, conference ID: 1328528. Before the call, certain financial and statistical information to be discussed during the call will be posted to investors.tdsinc.com. The call will be archived on the Events & Presentations page of investors.tdsinc.com.  About TDS Telephone and Data Systems, Inc. (TDS), a Fortune 1000® company, provides wireless; broadband, video and voice; and hosted and managed services to approximately 6 million connections nationwide through its businesses, UScellular, TDS Telecom, and OneNeck IT Solutions. Founded in 1969 and headquartered in Chicago, TDS employed approximately 8,600 associates as of March 31, 2024. Visit investors.tdsinc.com for comprehensive financial information, including earnings releases, quarterly and annual filings, shareholder information and more. Safe Harbor Statement Under the Private Securities Litigation Reform Act of 1995: All information set forth in this news release, except historical and factual information, represents forward-looking statements. This includes all statements about the company's plans, beliefs, estimates, and expectations. These statements are based on current estimates, projections, and assumptions, which involve certain risks and uncertainties that could cause actual results to differ materially from those in the forward-looking statements. Important factors that may affect these forward-looking statements include, but are not limited to: whether any strategic alternatives for UScellular will be successfully identified or completed; whether any such strategic alternative will result in additional value for TDS or its shareholders and whether the process will have an adverse impact on TDS' businesses; intense competition; the ability to obtain or maintain roaming arrangements with other carriers on acceptable terms and changes in roaming practices; the ability to obtain access to adequate radio spectrum to meet current or anticipated future needs, including participation in FCC auctions; the ability to attract people of outstanding talent throughout all levels of the organization; TDS' smaller scale relative to larger competitors; changes in demand, consumer preferences and perceptions, price competition, or churn rates; advances in technology; impacts of costs, integration problems or other factors associated with acquisitions, divestitures or exchanges of properties or wireless spectrum licenses and/or expansion of TDS' businesses; the ability of the company to successfully construct and manage its networks; difficulties involving third parties with which TDS does business; uncertainties in TDS' future cash flows and liquidity and access to the capital markets; the ability to make payments on TDS and UScellular indebtedness or comply with the terms of debt covenants; the effect on TDS' business if the collateral securing its secured term loan is foreclosed upon; conditions in the U.S. telecommunications industry; the value of assets and investments; the state and federal regulatory environment; pending and future litigation; cyber-attacks or other breaches of network or information technology security; control by the TDS Voting Trust; disruption in credit or other financial markets; deterioration of U.S. or global economic conditions; and the impact, duration and severity of public health emergencies. Investors are encouraged to consider these and other risks and uncertainties that are more fully described under "Risk Factors" in the most recent filing of TDS' Form 10-K, as updated by any TDS Form 10-Q filed subsequent to such Form 10-K.    For more information about TDS and its subsidiaries, visit:TDS: www.tdsinc.com UScellular: www.uscellular.com TDS Telecom: www.tdstelecom.com OneNeck IT Solutions: www.oneneck.com   United States Cellular Corporation Summary Operating Data (Unaudited) As of or for the Quarter Ended 3/31/2024 12/31/2023 9/30/2023 6/30/2023 3/31/2023 Retail Connections Postpaid Total at end of period1 4,051,000 4,106,000 4,159,000 4,194,000 4,223,000 Gross additions 106,000 129,000 128,000 125,000 137,000 Handsets 63,000 80,000 84,000 83,000 93,000 Connected devices 43,000 49,000 44,000 42,000 44,000 Net additions (losses)1 (44,000) (50,000) (35,000) (28,000) (24,000) Handsets (47,000) (53,000) (38,000) (29,000) (25,000) Connected devices 3,000 3,000 3,000 1,000 1,000 ARPU2 $        51.96 $        51.61 $        51.11 $        50.64 $        50.66 ARPA3 $      132.00 $      131.63 $      130.91 $      130.19 $      130.77 Handset upgrade rate4 4.5 % 5.8 % 4.5 % 4.8 % 4.9 % Churn rate5 1.22 % 1.44 % 1.30 % 1.21 % 1.27 % Handsets 1.03 % 1.22 % 1.11 % 1.01 % 1.06 % Connected devices 2.52 % 3.03 % 2.64 % 2.65 % 2.78 % Prepaid Total at end of period1 436,000 451,000 462,000 462,000 470,000 Gross additions 41,000 43,000 52,000 50,000 43,000 Net additions (losses)1 (13,000) (11,000) — (8,000) (23,000) ARPU2, 6 $        32.25 $        32.32 $        33.44 $        33.86 $        33.19 Churn rate5 4.06 % 3.87 % 3.68 % 4.18 % 4.63 % Market penetration at end of period