ITTI(US:TDS)2025-05-02 12:06Financial Performance - Total operating revenues decreased by 9% to $1,154 million in Q1 2025 compared to $1,262 million in Q1 2024 [25]. - UScellular's operating revenues fell by 6% to $891 million, while TDS Telecom's revenues decreased by 3% to $257 million [25]. - Net income attributable to TDS shareholders dropped by 74% to $7 million, with a net loss attributable to TDS common shareholders of $10 million [25]. - Adjusted EBITDA decreased by 9% to $333 million, down from $366 million in the previous year [25]. - Total operating revenues for TDS Telecom decreased by 3% to $257 million for the three months ended March 31, 2025, compared to $266 million in the same period last year [78]. - Net income for TDS Telecom dropped by 85% to $4 million for the three months ended March 31, 2025, down from $24 million in the prior year [78]. - TDS reported a net income of $12 million for Q1 2025, a decrease of 68.4% compared to $38 million in Q1 2024 [136]. - UScellular's net income for Q1 2025 was $20 million, down 16.7% from $24 million in Q1 2024 [137]. - TDS's adjusted EBITDA for Q1 2025 was $333 million, a decline of 9.0% from $366 million in Q1 2024 [136]. - TDS reported a net loss of $10 million for the three months ended March 31, 2025, compared to a net income of $12 million for the same period in 2024 [198]. Capital Expenditures - Capital expenditures significantly reduced by 49% to $112 million compared to $219 million in Q1 2024 [25]. - Capital expenditures for TDS Telecom decreased by 32% to $59 million for the three months ended March 31, 2025, compared to $87 million in the same period last year [78]. - Capital expenditures for UScellular decreased by $78 million or 60% year-over-year, totaling $53 million for the three months ended March 31, 2025 [110][111]. - TDS expects full-year capital expenditures for 2025 to be between $375 million and $425 million, primarily financed through operating cash flows and existing cash balances [112]. Strategic Transactions - The company announced a strategic agreement for UScellular to sell its wireless operations and select spectrum assets to T-Mobile for a total purchase price of $4,400 million, expected to close in mid-2025 [15]. - UScellular's book value of wireless spectrum licenses to be sold in the Verizon transaction is $586 million, with total proceeds expected to be $1,000 million [17]. - The strategic review process for UScellular is ongoing, with a focus on closing multiple transactions signed during 2024 [20]. - TDS is exploring strategic alternatives for UScellular while seeking to monetize spectrum assets not subject to existing agreements [20]. - UScellular is actively seeking to monetize spectrum assets not subject to existing purchase agreements [202]. Revenue and Customer Metrics - Average Revenue Per User (ARPU) for postpaid increased slightly to $52.06, while Average Revenue Per Account (ARPA) remained stable at $132.25 [44]. - Total gross additions for postpaid handsets were 68,000, an 8% increase from 63,000 in Q1 2024 [42]. - The churn rate for postpaid handsets remained stable at 1.03% [42]. - Total service addresses for TDS Telecom increased by 6% to 1.8 million as of March 31, 2025, with 44% served by fiber [70]. - Total residential connections decreased by 3% to 931,400, primarily due to declines in legacy voice and video services [71]. Debt and Financing - TDS has unsecured term loan agreements with a maximum borrowing capacity of $875 million, with outstanding borrowings of $783 million as of March 31, 2025 [100]. - UScellular has fully utilized its $800 million unsecured term loan agreements, with outstanding borrowings of $718 million as of March 31, 2025 [101]. - TDS's long-term debt obligations total $4,157 million as of March 31, 2025, with a weighted average interest rate of 6.6% [153]. - Approximately 50% of TDS' long-term debt is in fixed-rate senior notes, while the other 50% is variable-rate debt, exposing the company to interest rate fluctuations [152]. Cash Flow and Liquidity - TDS's net cash provided by operating activities was $186 million for the three months ended March 31, 2025, compared to $224 million in 2024 [122][125]. - TDS's cash flows from operating activities decreased to $186 million in Q1 2025 from $224 million in Q1 2024 [139]. - The company experienced a net cash outflow of $76 million from financing activities in Q1 2025, compared to a net inflow of $30 million in Q1 2024 [159]. - TDS's cash, cash equivalents, and restricted cash decreased to $371 million at the end of Q1 2025 from $384 million at the beginning of the period [159]. Risks and Challenges - TDS continues to monitor potential tariff increases on imported goods, which may impact operational costs and financial results [22]. - The company faces risks related to cyber-attacks and disruptions in credit markets, which could adversely affect its financial condition and operations [150]. Shareholder Returns - TDS paid quarterly dividends of $0.04 per share in Q1 2025, down from $0.19 in Q1 2024 [118]. - TDS reported a net income attributable to shareholders of $2,023 million for the year ended December 31, 2023, compared to $1,074 million in the previous year, reflecting a significant increase [171]. - The total equity for TDS shareholders as of December 31, 2023, was $5,996 million, up from $5,202 million in the prior year, indicating a growth of approximately 15.2% [171].