3 q 2016 operating results final

November 4, 2016
Third Quarter 2016 Results
1

Safe Harbor Statement Under the Private
Securities Litigation Reform Act of 1995
All information set forth in this presentation, 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:
intense competition; the ability to execute TDS’ business strategy; uncertainties in TDS’
future cash flows and liquidity and access to the capital markets; the ability to make
payments on TDS and U.S. Cellular indebtedness or comply with the terms of debt covenants;
impacts of any pending acquisitions/divestitures/exchanges of properties and/or
licenses, including, but not limited to, the ability to obtain regulatory approvals, successfully
complete the transactions and the financial impacts of such transactions; the ability of the
company to successfully manage and grow its markets; the overall economy; the access to
and pricing of unbundled network elements; the ability to obtain or maintain roaming
arrangements with other carriers on acceptable terms; the state and federal
telecommunications regulatory environment; the value of assets and investments; adverse
changes in the ratings afforded TDS and U.S. Cellular debt securities by accredited ratings
organizations; industry consolidation; advances in telecommunications technology; pending
and future litigation; changes in income tax rates, laws, regulations or rulings; changes in
customer growth rates, average monthly revenue per user, churn rates, roaming revenue and
terms, the availability of wireless devices, or the mix of products and services offered by U.S.
Cellular and TDS Telecom. Investors are encouraged to consider these and other risks and
uncertainties that are discussed in documents furnished to the Securities and Exchange
Commission.
2

Third quarter highlights
• Guidance reaffirmed – delivering on original expectations
• Retail net additions of 61,000
• Postpaid net losses due to lower gross additions
• Postpaid handset churn low at 1.22%
• Disruption in new device availability
• Samsung Note 7 recall
• iPhone launch
• Strongest pre-sale activity
• Severe inventory constraints at launch
• Transition in roaming, significant opportunity with VoLTE to increase
roaming revenue
• Commercial launch of VoLTE in one major market is still on track for
early 2017
• Successful 5G trial
• Disciplined promotional activity and strong cost management drive
improved profitability
4

Connection Activity
Q3 ’16 Q3 ’15
Postpaid gross additions 174,000 200,000
Postpaid churn 1.34% 1.41%
Postpaid net additions (losses) (6,000) 17,000
Prepaid net additions 67,000 12,000
Retail net additions 61,000 29,000
Total retail connections 4,964,000 4,721,000
Average postpaid connections per account 2.66 2.53
EIP sales mix 79% 44%
Feature
Phones Smartphones
Connected
Devices
Postpaid gross additions 10,000 105,000 59,000
Postpaid net additions (losses) (20,000) (7,000) 21,000
5

Smartphone sales and penetration
72%
74% 75%
77% 78%
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
Q3'15 Q4'15 Q1'16 Q2'16 Q3'16
87%
91% 92% 91% 92%
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
Q3'15 Q4'15 Q1'16 Q2'16 Q3'16
Smartphone Sales
(% of handset sales)
Smartphone Penetration
(% of postpaid handsets)
6

Postpaid churn rate
1.71%
1.91%
2.29%
1.73%
1.59% 1.60%
1.48%
1.34%
1.41%
1.31% 1.28%
1.20%
1.34%
0.00%
0.50%
1.00%
1.50%
2.00%
2.50%
Q3'13 Q4'13 Q1'14 Q2'14 Q3'14 Q4'14 Q1'15 Q2'15 Q3'15 Q4'15 Q1'16 Q2'16 Q3'16
7

Total operating revenues
($ in millions)
Q3’16
Q3’15
(Excluding
rewards
impact)
Q3’15
(As
reported)
% Change
(Excluding
rewards
impact)
Service revenues $771 $838(1) $896 (8%)
Retail service 681 739(1) 797 (8%)
Roaming 45 59 59 (25%)
Tower rentals 14 13 13 12%
Other 31 27 27 11%
Equipment sales revenues 239 173 173 38%
Total operating revenues $1,010 $1,011(1) $1,069 --
(1) Service revenues (excluding rewards impact), retail service (excluding rewards impact) and total
operating revenues (excluding rewards impact) are non-GAAP measures because $58 million
related to the termination of the rewards program has been subtracted. U.S. Cellular believes that
such measures are useful to show the impact of the termination of the rewards program. See
reconciliation at the end of the presentation.
8

Postpaid revenue
(1) ARPU/ABPU and ARPA/ABPA, as adjusted to eliminate the impact of the rewards program termination, are non-GAAP
measures. U.S. Cellular believes that such measures are useful to show the impact of the termination of the rewards
program. See reconciliation at the end of the presentation.
(2) ABPU and ABPA are non-GAAP financial measures that are defined in the non-GAAP reconciliation at the end of the
presentation.
Q3’16 Q3’15 Change
%
Change
Average Revenue Per User
As reported $47.08 $58.12 ($11.04) (19%)
Less: Impact of Rewards program termination --- (4.48) (4.48) N/M
Adjusted(1) 47.08 53.64 (6.56) (12%)
Add: EIP billings 9.71 5.76 3.95 69%
Adjusted ARPU plus EIP billings (ABPU)(1)(2) $56.79 $59.40 ($2.61) (4%)
Average Revenue Per Account
As Reported $125.31 $147.00 ($21.69) (15%)
Less: Impact of Rewards program termination --- (11.34) (11.34) N/M
Adjusted(1) 125.31 135.66 (10.35) (8%)
Add: EIP billings 25.85 14.57 11.28 77%
Adjusted ARPA plus EIP billings (ABPA)(1)(2) $151.16 $150.24 $ 0.92 1%
9

($ in millions)
Q3’16 Q3’15 % Change
Total operating revenues $1,010 $1,069 (6%)
System operations expense 196 199 (1%)
Cost of equipment sold 280 287 (2%)
SG&A expenses 370 375 (1%)
Total cash expenses 846 861 (2%)
Operating cash flow(1) $164 $208 (21%)
Adjusted EBITDA(1) $216 $257 (16%)
Operating cash flow and
Adjusted EBITDA
(1) Operating cash flow and Adjusted EBITDA are non-GAAP financial measures that are defined in the non-GAAP
10

Revenues, Operating cash
flow and Adjusted EBITDA
($ in millions)
Q3’16 Q3’15 % Change
As reported
Total operating revenues $1,010 $1,069 (6%)
Operating cash flow(1) $164 $208 (21%)
Adjusted EBITDA(1) $216 $257 (16%)
Excluding discrete items(2):
Total operating revenues $1,010 $1,011 ---
Operating cash flow $177 $150 18%
Adjusted EBITDA $229 $199 15%
(1) Operating cash flow and Adjusted EBITDA are non-GAAP financial measures that are defined in the non-
GAAP reconciliation at the end of the presentation.
(2) Total operating revenues, Operating cash flow and Adjusted EBITDA (excluding discrete items) are non-
GAAP measures because they exclude the impacts of the termination of a naming rights agreement in
2016 (-$13 million) and the termination of the rewards program in 2015 (+$58 million). See
11

2016 guidance (1)
Unchanged from previous estimates
($ in millions)
2016 Estimates
(Current)
2015 As
Reported (2)
2015
(Excluding
rewards
impact)
Total operating revenues $3,900 - $4,100 $3,997 $3,939(4)
Operating cash flow(3) $525 - $650 $675 $617(4)
Adjusted EBITDA(3) $725 - $850 $852 $794(4)
Capital expenditures Approx. $500 $533 $533
(1) There can be no assurance that final results will not differ materially from estimated results.
(2) Includes $58 million of operating revenues related to termination of the rewards program.
(3) Operating cash flow and Adjusted EBITDA are non-GAAP financial measures that are defined in the
non-GAAP reconciliation at the end of the presentation.
(4) Total operating revenues (excluding rewards impact), Operating cash flow (excluding rewards impact)
and Adjusted EBITDA (excluding rewards impact) are non-GAAP measures because $58 million has
been subtracted related to termination of the rewards program. U.S. Cellular believes that such
measures are useful to show the impact of the termination of the rewards program. See reconciliation
at end of presentation.
12

TDS Telecom operating performance
($ in millions)
Q3’16 Q3’15
%
Change
Wireline $175 $175 ---
Cable 46 44 5%
HMS 68 82 (17%)
Total operating revenues(1) 287 299 (4%)
Expenses(1)(2) 217 224 (3%)
Adjusted EBITDA(3) $ 71 $ 76 (7%)
(1) Reflects intercompany eliminations
(2) Represents cost of products and services and selling, general and administrative expenses
(3) Adjusted EBITDA is a non-GAAP financial measure that is defined in the non-GAAP
14

Third quarter Wireline highlights
Wireline Strategy:
• Fiber Strategy in most attractive markets (~25% IPTV-capable service addresses)
• Complete targeted fiber deployment
• Increase broadband and IPTV connections
• Capital intensity declines as program completes
• Strategy in lower density markets
• Deploy copper bonding to ~20% of service addresses to provide up to 50Mbps
• Awaiting notification of USF Reform Order (ACAM) funding in areas with no
competition (~ up to 30% of service addresses)
Q3’15 Q4’15 Q1’16 Q2’16 Q3’16
%
Change
(Y/Y)
IPTV connections 30,300 34,400 38,300 41,200 43,600 44%
Residential revenue per connection $42.83 $41.24* $43.28 $43.67 $44.25 3%
managedIP connections 145,900 147,100 148,500 149,000 151,500 4%
*Includes discrete items which reduced ARPU by $1.91
Q3’15 Q4’15 Q1’16 Q2’16 Q3’16
Take rate % at 10 MB or higher 45% 47% 49% 50% 52%
Take rate % at 25 MB or higher 14% 16% 18% 19% 21%
15

Wireline operating performance
($ in millions)
Q3’16 Q3’15
%
Change
Residential $ 78 $ 76 4%
Commercial 53 55 (4%)
Wholesale 43 44 (2%)
Total service revenues 174 175 ---
Expenses(1) 117 114 3%
(1) Represents cost of products and services and selling, general and administrative expenses.
(2) Adjusted EBITDA is a non-GAAP financial measure that is defined in the non-GAAP reconciliation at
the end of the presentation.
16

Third quarter Cable highlights
• Cable Strategy
• Increase residential and
commercial broadband
customer connections
• Leverage Wireline
capabilities to create
additional synergies
• Internet connectivity,
voice service and
support systems
connected to wireline’s
multi-gig network which
enhances reliability and
redundancy
• Cable selling managedIP
product
• Leveraging finance, HR,
legal, procurement
• Continue to evaluate
potential acquisitions
0
50,000
100,000
150,000
200,000
250,000
300,000
350,000
Q3'15 Q4'15 Q1'16 Q2'16 Q3'16
Video Voice Broadband
Connections
Broadband
connections
(Y/Y growth)
Total
connections
(Y/Y growth)5%
14%
17

Cable operating performance
($ in millions)
Q3’16 Q3’15
%
Change
Residential $37 $35 6%
Commercial 9 9 4%
Total operating revenues 46 44 5%
Expenses(1) 36 34 7%
Adjusted EBITDA(2) $10 $10 ---
(2) Adjusted EBITDA is a non-GAAP financial measure that is defined in the non-GAAP reconciliation at the
end of the presentation.
18

Third quarter HMS highlights
• HMS Strategy
• Focus on growth of recurring service revenues
• Sell across entire portfolio
• Utilize new data center capacity
0
10
20
30
40
50
60
70
80
90
Q3'15 Q4'15 Q1'16 Q2'16 Q3'16
Service revenues Equipment revenues
Operating Revenues
($ in millions)
Rentable data center
space
Filled Available
38%
62%
19

Hosted and Managed Services
operating performance
($ in millions)
Q3’16 Q3’15
%
Change
Service revenues $ 29 $ 30 (5%)
Equipment sales 39 51 (25%)
Total operating revenues 68 82 (17%)
Expenses(1) 65 77 (15%)
(2) Adjusted EBITDA is a non-GAAP financial measure that is defined in the non-GAAP reconciliation at
the end of the presentation.
20

2016 TDS Telecom guidance (1)
Unchanged from previous estimates
($ in millions) 2016 Estimates
(Current) 2015 Actual
Total operating revenues $1,130 - $1,180 $1,158
Operating cash flow(2) $270 - $310 $304
Adjusted EBITDA(2) $270 - $310 $306
Capital expenditures Approx. $180 $219
(1) There can be no assurance that final results will not differ materially from such estimated results.
(2) Operating cash flow and Adjusted EBITDA are non-GAAP financial measures that are defined in the non-
GAAP reconciliation at the end of the presentation.
21

Operating Cash Flow and Adjusted EBITDA Reconciliation –
Q3 2016 and Q3 2015
($ in millions)
U.S.
Cellular
(as
reported)
U.S.
Cellular
(excluding
termination
of naming
rights) Wireline Cable HMS
Total
TDS
Telecom TDS (1)
U.S.
Cellular
(as
reported)
U.S.
Cellular
(excluding
rewards
impact) Wireline Cable HMS
Total
TDS
Telecom TDS (1)
Net income (loss) (GAAP) $18 N/A N/A N/A N/A $7 $16 $65 N/A N/A N/A N/A $9 $62
Add back:
Income tax expense (benefit) 15 N/A N/A N/A N/A 4 14 41 N/A N/A N/A N/A 8 46
Income (loss) before income taxes (GAAP) $33 $46 $17 -- $(6) $11 $30 $106 $48 $19 $1 $(2) $17 $108
Add back:
Interest expense 28 28 -- -- 1 1 42 21 21 -- -- 1 -- 35
Depreciation, amortization and accretion expense 155 155 41 9 7 57 214 152 152 41 9 7 57 211
EBITDA (non-GAAP) $216 $229 $57 $9 $3 $69 $286 $279 $221 $60 $10 $5 $74 $354
Add back:
(Gain) loss on assets disposals, net 7 7 1 1 -- 2 8 3 3 2 -- -- 2 5
(Gain) loss on sale of business and other exit costs, net --- --- -- -- -- -- -- (1) (1) -- -- -- -- (1)
(Gain) loss on license sales and exchanges, net (7) (7) -- -- -- -- (7) (24) (24) -- -- -- -- (24)
Adjusted EBITDA (2) (non-GAAP) $216 $229 $58 $10 $3 $71 $287 $257 $199 $61 $10 $5 $76 $334
Deduct:
Equity in earnings of unconsolidated entities 38 38 -- -- -- -- 38 40 40 -- -- -- -- 40
Interest and dividend income 14 14 1 -- -- 1 15 9 9 1 -- -- 1 10
Other, net -- --- -- -- -- -- (1) --- --- -- -- -- -- --
Operating cash flow (2) (3) (non-GAAP) $164 $177 $57 $10 $3 $70 $235 $208 $150 $61 $10 $5 $76 $284
Three months ended Sept. 30, 2016 Three months ended Sept. 30, 2015
In providing 2016 and 2015 Estimated Results, TDS has not completed the below reconciliation to net
income because it does not provide guidance for income taxes. TDS believes that the impact of income
taxes cannot be reasonably predicted; therefore, the company is unable to provide such guidance.
23

Operating Cash Flow and Adjusted EBITDA Reconciliation –
2016 Estimated
2016 Estimated Results Actual Results Year ended December 31, 2015
(Dollars in millions)
U.S. Cellular TDS Telecom TDS(1) U.S. Cellular TDS Telecom TDS (1)
Net income (loss) (GAAP)
N/A N/A N/A $247 $46 $263
Add back:
Income tax expense (benefit)
N/A N/A N/A 156 35 172
Income (loss) before income taxes (GAAP)
$(5)-$120 40-80 $(25)-$140 $404 81 $435
Add back:
Interest expense
110 ― 165 86 1 142
Depreciation, amortization and accretion
615 230 855 606 228 844
EBITDA
$720-$845 270-310 $995-$1,160 $1,096 310 $1,421
Add back:
(Gain) loss on sale of business and other exit costs, net
― ― ― (114) (10) (136)
(Gain) loss on license sales and exchanges (4)
(15) ― (15) (147) — (147)
(Gain) loss on assets disposals, net
20 ― 20 16 6 22
Adjusted EBITDA (2)
$725-$850 270-310 $1,000-$1,165 $852 306 $1,160
Deduct:
Equity in earnings of unconsolidated entities
140 ― 140 140 — 140
Interest and dividend income
60 ― 60 37 2 39
Operating cash flow (2)(3)
$525-$650 270-310 $800-$965 $675 304 $981
24

Postpaid ABPU (5) and Postpaid ABPA (5) Reconciliation
(dollars and connection counts in
millions))
Three months
ended Sept. 30
2016
Three months
ended Sept. 30
2015
(as reported)
Three months
ended Sept.
30, 2015
(rewards impact)
Three months
ended Sept. 30
2015 (1)
(Excluding
rewards impact)
(Non-GAAP
metrics)
Calculation of Postpaid ARPU
Postpaid service revenues $635 $755 $58 697
Average number of postpaid connections 4.49 4.33 4.33 4.33
Number of months in period 3 3 3 3
Postpaid ARPU $47.08* $58.12* $4.48 $53.64
Calculation of Postpaid ABPU (5)
Postpaid service revenues $635 $755 $58 697
Equipment installment plan billings 131 75 -- 75
Total billings to postpaid connections $766 $830 $58 $772
Average number of postpaid connections 4.49 4.33 4.33 4.33
Postpaid ABPU (Non-GAAP metric) (5) $56.79 $63.88 $4.48 $59.40
Calculation of Postpaid ARPA
Postpaid service revenues $635 $755 $58 $697
Average number of postpaid accounts 1.69 1.71 1.71 1.71
Postpaid ARPA $125.31* $147.00* $11.34 $135.66
Calculation of Postpaid ABPA (5)
Postpaid service revenues $635 $755 $58 $697
Equipment installment plan billings 131 75 --- 75
Total billings to postpaid accounts $766 $830 $58 $772
Average number of postpaid accounts 1.69 1.71 1.71 1.71
Postpaid ABPA (Non-GAAP metric) (5) $151.16 $161.57 $11.34 $150.24
25* GAAP metric

Three months
ended 9/30/15
Three months
ended 9/30/15
Three months
ended 9/30/15
Full Year-end
12/31/15
Full Year-end
12/31/15
Full Year-end
12/31/15
(in millions)
As reported
(GAAP) Rewards Impact
Excluding rewards
impact (non-GAAP)
As reported
(GAAP)
Rewards
Impact
Excluding
rewards impact
(non-GAAP)
Service revenues $ 896 $(58) $ 838 $3,350 $(58) $3,292
Retail service 797 (58) 739 2,994 (58) 2,936
Roaming 59 --- 59 192 --- 192
Tower rentals 13 --- 13 53 --- 53
Other 27 --- 27 111 --- 111
Equipment sales revenue 173 --- 173 647 --- 647
Total operating revenues $1,069 $(58) $1,011 $3,997 $(58) $3,939
System operation expense 199 --- 199 775 --- 775
Cost of equipment sold 287 --- 287 1,053 --- 1,053
SG&A 375 --- 375 1,494 --- 1,494
Total cash expenses 861 --- 861 3,322 --- 3,322
Operating cash flow (non-GAAP) $208 $(58) $150 675 $(58) $617
Equity in earnings of
unconsolidated entities
40 --- 40 140 --- 140
Interest and dividend income 9 --- 9 37 --- 37
Adjusted EBITDA (non-GAAP) $257 $(58) $199 $852 $(58) $794
U.S. Cellular Rewards Impact Reconciliation
26
As previously described, this table reconciles GAAP measures to non-GAAP measures showing the impact of $58 million related to the
termination of the rewards program.

(1) The TDS column includes U.S. Cellular, TDS Telecom and also the impacts of consolidating eliminations, corporate
operations and non-reportable segments, all of which are not presented above.
(2) Adjusted EBITDA (earnings before interest, taxes, depreciation, amortization and accretion) is defined as net income
adjusted for the items set forth in the reconciliation above. Operating cash flow is defined as net income adjusted for the
items set forth in the reconciliation above. Adjusted EBITDA and Operating cash flow 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 non-recurring,
infrequent or unusual; such items may occur in the future. Management uses Adjusted EBITDA and Operating cash flow
as measurements of profitability, and therefore reconciliations to applicable GAAP income measures are deemed most
appropriate. Management believes Adjusted EBITDA and Operating cash flow are useful measures 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. Adjusted EBITDA shows adjusted earnings before interest, taxes, depreciation,
amortization and accretion and gains and losses, while Operating cash flow 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 Adjusted EBITDA and Operating cash
flow to the corresponding GAAP measure, Net income or Income (loss) before income taxes.
(3) A reconciliation of Operating cash flow (Non-GAAP) and Operating income (excluding gains and losses) (Non-GAAP) to
operating income (GAAP) for September 30, 2016 actual results can be found on the company's website at
investors.tdsinc.com.
(4) In 2016, U.S. Cellular entered into multiple agreements to exchange licenses. Agreements are subject to regulatory
approval and other customary closing conditions, and are expected to close in the fourth quarter of 2016. Upon closing of
the transactions, U.S. Cellular expects to record a gain. As of September 30, 2016 two license closings occurred and U.S.
Cellular recorded a gain of $16 million. For the remainder of the licenses a reasonable estimate of the gains is unavailable
at the time of this filing.
(5) U.S. Cellular presents Postpaid ABPU and Postpaid ABPA to reflect the revenue shift from Service revenues to Equipment
and product sales resulting from the increased adoption of equipment installment plans. Postpaid ABPU and Postpaid
ABPA, as previously defined, are non-GAAP financial measures which U.S. Cellular believes are useful to investors and
other users of its financial information in showing trends in both service and equipment revenues received from customers.
27

3 q 2016 operating results final

More Related Content

What's hot (17)

Similar to 3 q 2016 operating results final (20)

Recently uploaded (20)

3 q 2016 operating results final