• Adjusted EBITDA: UScellular increased its profitability outlook for adjusted EBITDA.

• Free Cash Flow: Sale of OneNeck IT solutions is accretive to free cash flow.

• Debt to EBITDA Ratios: Improved sequentially each quarter throughout 2024.

• License Sale Proceeds: Expected proceeds of over $1 billion from spectrum sales.

• Net Book Value of Licenses: Approximately $590 million for the licenses sold.

• Cash Taxes on Spectrum Transactions: Estimated $200 million to $250 million for UScellular and $150 million to $200 million for TDS.

• Impairment Loss: $136 million loss on impairment of licenses recorded in Q3 2024.

• Service Revenues: Declined 2% year over year.

• System Operations Expense: Decreased 2% year over year.

• SG&A Expenses: Decreased 3%, excluding strategic alternative expenses, decreased 5%.

• Adjusted Operating Income Before Depreciation and Amortization: Improved by 1%.

• Adjusted EBITDA: Improved by 3%.

• Free Cash Flow (Year-to-Date): $331 million, a $94 million increase over the prior year.

• Debt Repayment: $163 million repaid in the first nine months of 2024, plus an additional $40 million in October.

• Capital Expenditures Guidance: Lowered to $550 million to $600 million.

• Residential Broadband Connections: Grew 4% year over year.

• Operating Revenue (TDS Telecom): Increased 2% in the quarter.

• Adjusted EBITDA (TDS Telecom): Increased 21% in the quarter.

• Capital Expenditures (TDS Telecom): $78 million in the quarter, down 55% from last year.

• Warning! GuruFocus has detected 10 Warning Signs with TDS.

Release Date: November 01, 2024

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• Telephone and Data Systems Inc (NYSE:TDS) reported a solid cash and liquidity position, with improved debt to EBITDA ratios throughout 2024.

• The company successfully closed the sale of OneNeck IT Solutions, which is accretive to free cash flow.

• UScellular increased its profitability outlook for adjusted EBITDA and adjusted operating income before depreciation and amortization.

• TDS Telecom achieved a milestone with 50% of its service addresses now served by fiber, contributing to a 2% increase in total operating revenue.

• The company entered into agreements to sell certain spectrum licenses, expected to generate over $1 billion in proceeds, highlighting the significant value of these assets.

Negative Points

• Service revenues declined by 2% due to a decrease in the average subscriber base.

• UScellular recorded a loss on impairment of licenses amounting to $136 million, primarily due to challenges related to operationalizing millimeter wave spectrum.

• The pace of net additions in TDS Telecom's expansion markets has been slower than expected, impacting overall growth.

• The wireless industry is experiencing a slowdown in capital expenditures, affecting new tenant and amendment activity in the tower business.

• TDS Telecom faced net broadband losses in its cable markets due to increased competition from fiber overbuilders and other providers.