Business Segment Information

12 Months Ended

Dec. 31, 2013

Disclosure Text Block

Business Segment Information

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 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 2013, 2012 and 2011, is as follows. During the year ended December 31, 2013, TDS reevaluated and changed its operating segments, which resulted in the following reportable segments: U.S. Cellular; TDS Telecom Wireline, Cable, HMS; and the Non-Reportable Segment. Periods presented for comparative purposes have been re-presented to conform to the revised presentation. See Note 1 — Summary of Significant Accounting Policies and Recent Accounting Pronouncements for additional information.

			TDS Telecom
Year Ended or as of December 31, 2013	U.S. Cellular		Wireline		Cable		HMS		TDS Telecom Eliminations		TDS Telecom Total		Non- Reportable Segment		Corporate, Eliminations and Other Reconciling Items		Total
(Dollars in thousands)
Operating revenues	$	3,918,836	$	726,567	$	35,883	$	185,616	$	(1,063)	$	947,003	$	59,703	$	(24,306)	$	4,901,236
Cost of services and products (excluding Depreciation, amortization and accretion expense reported below)		1,762,435		270,466		17,274		136,414		(1,000)		423,154		43,049		(3,322)		2,225,316
Selling, general and administrative		1,677,395		220,097		11,054		44,945		(63)		276,033		14,526		(20,176)		1,947,778
Depreciation, amortization and accretion		803,781		170,868		7,571		24,262		-		202,701		5,980		5,615		1,018,077
(Gain) loss on asset disposals, net		30,606		130		28		125		-		283		(8)		(40)		30,841
(Gain) loss on sale of business and other exit costs, net		(246,767)		-		-		-		-		-		-		(53,889)		(300,656)
(Gain) loss on license sales and exchanges		(255,479)		-		-		-		-		-		-		-		(255,479)
Operating income (loss)		146,865		65,006		(44)		(20,130)		-		44,832		(3,844)		47,506		235,359
Equity in earnings of unconsolidated entities		131,949		19		-		-		-		19		-		746		132,714
Interest and dividend income		3,961		1,759		2		63		-		1,824		4		3,303		9,092
Gain (loss) on investments		18,556		830		-		-		-		830		-		(4,839)		14,547
Interest expense		(43,963)		3,265		(74)		(1,626)		-		1,565		(4,062)		(52,351)		(98,811)
Other, net		288		(214)		-		29		-		(185)		(161)		21		(37)
Income (loss) before income taxes		257,656		70,665		(116)		(21,664)		-		48,885		(8,063)		(5,614)		292,864
Add back:
Depreciation, amortization and accretion		803,781		170,868		7,571		24,262		-		202,701		5,980		5,615		1,018,077
(Gain) loss on sale of business and other exit costs, net		(246,767)		-		-		-		-		-		-		(53,889)		(300,656)
(Gain) loss on license sales and exchanges		(255,479)		-		-		-		-		-		-		-		(255,479)
Gain (loss) on investments		(18,556)		(830)		-		-		-		(830)		-		4,839		(14,547)
Interest expense		43,963		(3,265)		74		1,626		-		(1,565)		4,062		52,351		98,811
Adjusted income before income taxes	$	584,598	$	237,438	$	7,529	$	4,224	$	-	$	249,191	$	1,979	$	3,302	$	839,070
Investments in unconsolidated entities	$	265,585	$	3,809	$	-	$	-	$	-	$	3,809	$	-	$	32,378	$	301,772
Total assets	$	6,445,708	$	1,188,433	$	543,038	$	328,397	$	-	$	2,059,868	$	58,275	$	340,296	$	8,904,147
Capital expenditures	$	737,501	$	140,009	$	8,375	$	16,474	$	-	$	164,858	$	866	$	6,435	$	909,660

			TDS Telecom
Year Ended or as of December 31, 2012	U.S. Cellular		Wireline		HMS		TDS Telecom Eliminations		TDS Telecom Total		Non- Reportable Segment		Corporate, Eliminations and Other Reconciling Items		Total
(Dollars in thousands)
Operating revenues	$	4,452,084	$	741,748	$	113,010	$	(252)	$	854,506	$	60,830	$	(22,143)	$	5,345,277
Cost of services and products (excluding Depreciation, amortization and accretion expense reported below)		1,882,752		274,065		75,781		(252)		349,594		42,150		(1,926)		2,272,570
Selling, general and administrative		1,764,933		235,716		34,193		-		269,909		16,189		(17,130)		2,033,901
Depreciation, amortization and accretion		608,633		172,526		20,568		-		193,094		6,102		5,797		813,626
Loss on impairment of assets		-		-		-		-		-		515		-		515
(Gain) loss on asset disposals, net		18,088		1,020		108		-		1,128		(1)		526		19,741
(Gain) loss on sale of business and other exit costs, net		21,022		39		-		-		39		-		-		21,061
Operating income (loss)		156,656		58,382		(17,640)		-		40,742		(4,125)		(9,410)		183,863
Equity in earnings of unconsolidated entities		90,364		10		-		-		10		-		2,493		92,867
Interest and dividend income		3,644		3,085		25		-		3,110		8		2,486		9,248
Gain (loss) on investments		(3,718)		-		-		-		-		-		-		(3,718)
Interest expense		(42,393)		2,674		(1,160)		-		1,514		(3,938)		(41,928)		(86,745)
Other, net		500		(353)		(1)		-		(354)		575		(1)		720
Income (loss) before income taxes		205,053		63,798		(18,776)		-		45,022		(7,480)		(46,360)		196,235
Add back:
Depreciation, amortization and accretion		608,633		172,526		20,568		-		193,094		6,102		5,797		813,626
(Gain) loss on sale of business and other exit costs, net		21,022		39		-		-		39		-		-		21,061
Gain (loss) on investments		3,718		-		-		-		-		-		-		3,718
Interest expense		42,393		(2,674)		1,160		-		(1,514)		3,938		41,928		86,745
Adjusted income before income taxes	$	880,819	$	233,689	$	2,952	$	-	$	236,641	$	2,560	$	1,365	$	1,121,385
Investments in unconsolidated entities	$	144,531	$	3,809	$	-	$	-	$	3,809	$	-	$	31,581	$	179,921
Total assets	$	6,587,450	$	1,519,698	$	267,798	$	-	$	1,787,496	$	62,931	$	186,023	$	8,623,900
Capital expenditures	$	836,748	$	158,580	$	15,344	$	-	$	173,924	$	1,789	$	(7,840)	$	1,004,621

			TDS Telecom
Year Ended or as of December 31, 2011	U.S. Cellular		Wireline		HMS		TDS Telecom Eliminations		TDS Telecom Total		Non- Reportable Segment		Corporate, Eliminations and Other Reconciling Items		Total
(Dollars in thousands)
Operating revenues	$	4,343,346	$	768,208	$	47,180	$	-	$	815,388	$	45,133	$	(23,396)	$	5,180,471
Cost of services and products (excluding Depreciation, amortization and accretion expense reported below)		1,721,181		274,701		23,502		-		298,203		32,952		(1,692)		2,050,644
Selling, general and administrative		1,769,701		221,114		15,647		-		236,761		8,609		(12,712)		2,002,359
Depreciation, amortization and accretion		573,557		167,663		12,867		-		180,530		3,021		8,668		765,776
(Gain) loss on asset disposals, net		9,889		1,128		115		-		1,243		(197)		17		10,952
(Gain) loss on license sales and exchanges		(11,762)		-		-		-		-		-		-		(11,762)
Operating income (loss)		280,780		103,602		(4,951)		-		98,651		748		(17,677)		362,502
Equity in earnings of unconsolidated entities		83,566		8		-		-		8		-		(1,036)		82,538
Interest and dividend income		3,395		3,548		-		-		3,548		2		2,200		9,145
Gain (loss) on investments		11,373		-		-		-		-		-		12,730		24,103
Interest expense		(65,614)		2,702		(78)		-		2,624		(1,359)		(53,852)		(118,201)
Other, net		(678)		2,719		(9)		-		2,710		650		976		3,658
Income (loss) before income taxes		312,822		112,579		(5,038)		-		107,541		41		(56,659)		363,745
Add back:
Depreciation, amortization and accretion		573,557		167,663		12,867		-		180,530		3,021		8,668		765,776
(Gain) loss on license sales and exchanges		(11,762)		-		-		-		-		-		-		(11,762)
Gain (loss) on investments		(11,373)		-		-		-		-		-		(12,730)		(24,103)
Interest expense		65,614		(2,702)		78		-		(2,624)		1,359		53,852		118,201
Adjusted income before income taxes	$	928,858	$	277,540	$	7,907	$	-	$	285,447	$	4,421	$	(6,869)	$	1,211,857
Investments in unconsolidated entities	$	138,096	$	3,808	$	-	$	-	$	3,808	$	-	$	31,806	$	173,710
Total assets	$	6,327,976	$	1,494,362	$	209,109	$	-	$	1,703,471	$	68,870	$	100,688	$	8,201,005
Capital expenditures	$	782,526	$	164,163	$	26,999	$	-	$	191,162	$	3,206	$	10,324	$	987,218

Adjusted income before income taxes is a segment measure reported to the principal operating decision maker for purposes of making decisions about allocating resources to the segments and assessing their performance. Adjusted income before income taxes is defined as Income (loss) before income taxes, adjusted for the items set forth in the reconciliation above. Adjusted income before income taxes excludes these items in order to show operating results on a more comparable basis from period to period. In addition, TDS may also exclude other items from adjusted income before income taxes if such items help reflect operating results on a more comparable basis. TDS does not intend to imply that any of such amounts that are excluded are non-recurring, infrequent or unusual; such amounts may occur in the future. TDS believes Adjusted income before income taxes is a useful measure of TDS' operating results before significant recurring non-cash charges, discrete gains and losses and financing charges (Interest expense).