Earning Date, Transcript Summary & Report

Earnings Surprise Achieved: Telephone and Data Systems, Inc. beats earnings expectations with reported EPS of $-0.09, surpassing expectations of $-0.32.

Cost Reduction Success: In 2024, both businesses maintained rigorous cost reduction programs, resulting in expanded margins and a 7% increase in adjusted EBITDA on a consolidated basis.

Debt Reduction and Cash Flow: U.S. Cellular paid down over $200 million in debt, strengthening its balance sheet and achieving free cash flow positivity.

Fiber Service Expansion: TDS Telecom increased its fiber service addresses by 129,000 in 2024, surpassing its goal of 125,000, and now serves over 50% of its addresses with fiber.

Residential Revenue Increase: Residential revenues at TDS Telecom grew by 6% in 2024, driven by growth in broadband connections and average revenue per connection.

EBITDA Growth Achievement: TDS Telecom achieved a 23% increase in adjusted EBITDA year-over-year, reflecting effective cost management and revenue growth.

Customer Satisfaction Leadership: U.S. Cellular ranked first in the North Central region according to JD Power’s 2025 U.S. Wireless Network Quality Performance Study, indicating strong customer satisfaction.

Fixed Wireless Customer Growth: U.S. Cellular's fixed wireless service surpassed 150,000 customers, showing growth in this segment.

Fiber Network Expansion Plans: TDS Telecom plans to deliver 150,000 fiber service addresses in 2025, indicating a strong commitment to expanding its fiber network.

Speed Expansion Goals: The company is targeting to offer speeds of 1 gig or higher to at least 95% of its footprint, up from a previous goal of 80%.

Service Revenue Decline: Service revenues declined 2% primarily driven by declines in the average retail subscriber base.

Subscriber Growth Challenges: Net retail subscriber adds were still negative despite improvements in postpaid handset results.

Equipment Sales Loss Increase: Loss on equipment for equipment sales less cost of equipment sold increased $13 million in the fourth quarter due to increased promotional expenses.

Decline in Adjusted EBITDA: Adjusted operating income before depreciation and amortization declined 14%, and adjusted EBITDA declined 11%.

Pending Transaction Uncertainty: The pending transaction related to the sale of wireless operations and select Spectrum to T-Mobile is subject to regulatory approvals and other closing conditions, making the close of this transaction uncertain.

Tax Obligations from Sale: U.S. Cellular expects to incur cash income tax obligations related to the gain on sale in the T-Mobile transaction in the range of $225 to $325 million.

Increased Transaction Costs: U.S. Cellular expects to incur additional legal, advisory, and investment banking fees in 2025 and 2026 related to the T-Mobile and Spectrum transactions.

Spectrum Transaction Uncertainty: The Spectrum transactions with Verizon and AT&T are contingent upon the close of the sales of the wireless business and select Spectrum to T-Mobile, which adds uncertainty to future revenues.