US Cellular 2015 Annual Report Download - page 111

NOTE 18 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 2015, 2014 and 2013, is as follows. See Note 1 — Summary of
Significant Accounting Policies and Recent Accounting Pronouncements for additional information.
TDS Telecom
TDS TDS Corporate,
U.S. Telecom Telecom Eliminations
Year Ended or as of December 31, 2015 Cellular Wireline Cable HMS Eliminations Total and Other Total
(Dollars in thousands)
Operating revenues
Service ....................$3,350,431 $ 698,938 $174,529 $116,810 $(4,621) $ 985,656 $ (14,118) $4,321,969
Equipment and product sales ....... 646,422 1,965 437 169,985 – 172,387 35,463 854,272
Total operating revenues ........ 3,996,853 700,903 174,966 286,795 (4,621) 1,158,043 21,345 5,176,241
Cost of services (excluding Depreciation,
amortization and accretion expense
reported below) ............... 775,042 254,879 78,758 85,163 (4,334) 414,466 1,402 1,190,910
Cost of equipment and products ...... 1,052,810 2,212 169 142,927 – 145,308 25,913 1,224,031
Selling, general and administrative ..... 1,493,730 193,850 53,738 47,104 (287) 294,405 (7,672) 1,780,463
Depreciation, amortization and accretion . . 606,455 165,841 35,271 26,948 – 228,060 9,846 844,361
(Gain) loss on asset disposals, net ..... 16,313 5,094 691 89 – 5,874 (11) 22,176
(Gain) loss on sale of business and other
exit costs, net ................ (113,555) (9,530) – – – (9,530) (12,802) (135,887)
(Gain) loss on license sales and
exchanges .................. (146,884) – – – – – – (146,884)
Operating income (loss) .......... 312,942 88,557 6,339 (15,436) – 79,460 4,669 397,071
Equity in earnings of unconsolidated
entities .................... 140,083 17 – – – 17 (24) 140,076
Interest and dividend income ........ 36,332 2,193 37 35 – 2,265 186 38,783
Interest expense ................ (86,194) 1,133 458 (2,329) – (738) (54,787) (141,719)
Other, net .................... 466 (22) 3 (98) – (117) 42 391
Income (loss) before income taxes . . . 403,629 91,878 6,837 (17,828) – 80,887 (49,914) 434,602
Income tax expense (benefit)1........ 156,334 34,972 (19,314) 171,992
Net income (loss) .............. 247,295 45,915 (30,600) 262,610
Add back:
Depreciation, amortization and accretion . . 606,455 165,841 35,271 26,948 – 228,060 9,846 844,361
(Gain) loss on asset disposals, net ..... 16,313 5,094 691 89 – 5,874 (11) 22,176
(Gain) loss on sale of business and other
exit costs, net ................ (113,555) (9,530) – – – (9,530) (12,802) (135,887)
(Gain) loss on license sales and
exchanges .................. (146,884) – – – – – – (146,884)
Interest expense ................ 86,194 (1,133) (458) 2,329 – 738 54,787 141,719
Income tax expense (benefit)1........ 156,334 34,972 (19,314) 171,992
Adjusted EBITDA2..............$ 852,152 $ 252,150 $ 42,341 $ 11,538 $ – $ 306,029 $ 1,906 $1,160,087
Investments in unconsolidated entities . . . $ 363,384 $ 3,802 $ – $ – $ – $ 3,802 $ 34,534 $ 401,720
Total assets ...................$7,059,978 $1,312,394 $577,788 $285,929 $ – $2,176,111 $186,373 $9,422,462
Capital expenditures ..............$ 533,053 $ 140,433 $ 51,573 $ 27,059 $ – $ 219,065 $ 7,250 $ 759,368
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TELEPHONE AND DATA SYSTEMS, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS