TDS reports second quarter 2024 results

2024 Estimated Results

UScellular

Previous

Current

(Dollars in millions)

Service revenues

$2,950-$3,050

Unchanged

Adjusted OIBDA^{1, 2}

$750-$850

Unchanged

Adjusted EBITDA^{1, 2}

$920-$1,020

Unchanged

Capital expenditures

$550-$650

Unchanged

TDS Telecom

Previous

Current

(Dollars in millions)

Total operating revenues

$1,070-$1,100

$1,050-$1,080

Adjusted OIBDA¹

$310-$340

$330-$360

Adjusted EBITDA¹

$310-$340

$330-$360

Capital expenditures

$310-$340

Unchanged

2024 Estimated Results²

UScellular

TDS Telecom

(Dollars in millions)

Net income (GAAP)

N/A

N/A

Add back:

Income tax expense

N/A

N/A

Income before income taxes (GAAP)

$60-$160

$60-$90

Add back:

Interest expense

185

—

Depreciation, amortization and accretion expense

660

270

EBITDA (Non-GAAP)¹

$905-$1,005

$330-$360

Add back or deduct:

(Gain) loss on asset disposals, net

15

—

Adjusted EBITDA (Non-GAAP)¹

$920-$1,020

$330-$360

Deduct:

Equity in earnings of unconsolidated entities

155

—

Interest and dividend income

15

—

Adjusted OIBDA (Non-GAAP)¹

$750-$850

$330-$360

Actual Results

Six Months Ended

June 30, 2024

Year Ended

December 31, 2023

UScellular

TDS

Telecom

UScellular

TDS

Telecom

(Dollars in millions)

Net income (loss) (GAAP)

$ 42

$ 42

$ 58

$ (483)

Add back:

Income tax expense (benefit)

41

10

53

(26)

Income (loss) before income taxes (GAAP)

$ 83

$ 52

$ 111

$ (509)

Add back:

Interest expense

91

(2)

196

(8)

Depreciation, amortization and accretion expense

329

131

656

245

EBITDA (Non-GAAP)¹

$ 503

$ 181

$ 963

$ (272)

Add back or deduct:

Expenses related to strategic alternatives review

21

—

8

—

Loss on impairment of goodwill

—

—

—

547

(Gain) loss on asset disposals, net

11

6

17

10

(Gain) loss on license sales and exchanges, net

7

—

(2)

—

Adjusted EBITDA (Non-GAAP)¹

$ 542

$ 187

$ 986

$ 285

Deduct:

Equity in earnings of unconsolidated entities

80

—

158

—

Interest and dividend income

6

2

10

4

Other, net

—

2

—

2

Adjusted OIBDA (Non-GAAP)¹

$ 456

$ 183

$ 818

$ 279

Numbers may not foot due to rounding.

¹

EBITDA, Adjusted EBITDA and Adjusted OIBDA are defined as net income adjusted for the items set forth in the reconciliation above. EBITDA, Adjusted EBITDA and Adjusted OIBDA 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 infrequent or unusual; such items may occur in the future. Management uses Adjusted EBITDA and Adjusted OIBDA as measurements of profitability, and therefore reconciliations to Net income are deemed appropriate. Management believes Adjusted EBITDA and Adjusted OIBDA are useful measures of TDS' operating results before significant recurring non-cash charges, nonrecurring expenses, 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, gains and losses, and expenses related to the strategic alternatives review of UScellular while Adjusted OIBDA 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 EBITDA, Adjusted EBITDA and Adjusted OIBDA to the corresponding GAAP measure, Net income or Income before income taxes. Additional information and reconciliations related to Non-GAAP financial measures for June 30, 2024, can be found on TDS' website at investors.tdsinc.com.

²

2024 Estimated Results do not reflect any anticipated costs, expenses or results of the strategic alternatives review referenced above.

United States Cellular Corporation

Summary Operating Data (Unaudited)

As of or for the Quarter Ended

6/30/2024

3/31/2024

12/31/2023

9/30/2023

6/30/2023

Retail Connections

Postpaid

Total at end of period¹

4,027,000

4,051,000

4,106,000

4,159,000

4,194,000

Gross additions

117,000

106,000

129,000

128,000

125,000

Handsets

73,000

63,000

80,000

84,000

83,000

Connected devices

44,000

43,000

49,000

44,000

42,000

Net additions (losses)¹

(24,000)

(44,000)

(50,000)

(35,000)

(28,000)

Handsets

(29,000)

(47,000)

(53,000)

(38,000)

(29,000)

Connected devices

5,000

3,000

3,000

3,000

1,000

ARPU²

$ 51.45

$ 51.96

$ 51.61

$ 51.11

$ 50.64

ARPA³

$ 130.41

$ 132.00

$ 131.63

$ 130.91

$ 130.19

Handset upgrade rate⁴

4.1 %

4.5 %

5.8 %

4.5 %

4.8 %

Churn rate⁵

1.16 %

1.22 %

1.44 %

1.30 %

1.21 %

Handsets

0.97 %

1.03 %

1.22 %

1.11 %

1.01 %

Connected devices

2.47 %

2.52 %

3.03 %

2.64 %

2.65 %

Prepaid

Total at end of period¹

439,000

436,000

451,000

462,000

462,000

Gross additions

50,000

41,000

43,000

52,000

50,000

Net additions (losses)¹

3,000

(13,000)

(11,000)

—

(8,000)

ARPU^{2, 6}

$ 32.37

$ 32.25

$ 32.32

$ 33.44

$ 33.86

Churn rate⁵

3.60 %

4.06 %

3.87 %

3.68 %

4.18 %

Market penetration at end of period

Consolidated operating population

32,550,000

32,550,000

32,350,000

32,350,000

32,350,000

Consolidated operating penetration⁷

15 %

14 %

15 %

15 %

15 %

Capital expenditures (millions)

$ 165

$ 131

$ 148

$ 111

$ 143

Total cell sites in service

6,990

6,995

7,000

6,973

6,952

Owned towers

4,388

4,382

4,373

4,356

4,341

¹

First quarter 2024 connections were adjusted to remove subscribers that could no longer access the UScellular network due to the CDMA shutdown. This resulted in 11,000 and 2,000 subscribers removed from the postpaid and prepaid base, respectively, that are not included in Net additions (losses) for the quarter.

²

Average Revenue Per User (ARPU) - metric is calculated by dividing a revenue base by an average number of connections and by the number of months in the period. These revenue bases and connection populations are shown below:

• Postpaid ARPU consists of total postpaid service revenues and postpaid connections.

• Prepaid ARPU consists of total prepaid service revenues and prepaid connections.

³

Average Revenue Per Account (ARPA) - metric is calculated by dividing total postpaid service revenues by the average number of postpaid accounts and by the number of months in the period.

⁴

Handset upgrade rate calculated as total handset upgrade transactions divided by average postpaid handset connections.

⁵

Churn rate represents the percentage of the connections that disconnect service each month. These rates represent the average monthly churn rate for each respective period.

⁶

Fourth quarter 2023 Prepaid ARPU excludes a $6 million reduction of prepaid revenue related to an adjustment to correct a prior period error recorded in the fourth quarter of 2023.

⁷

Market penetration is calculated by dividing the number of wireless connections at the end of the period by the total estimated population of consolidated operating markets.

TDS Telecom

Summary Operating Data (Unaudited)

As of or for the Quarter Ended

6/30/2024

3/31/2024

12/31/2023

9/30/2023

6/30/2023

Residential connections

Broadband

Incumbent

243,700

245,100

244,800

248,800

249,200

Expansion

107,800

100,400

92,200

79,400

70,200

Cable

198,500

202,400

202,900

204,400

204,200

Total Broadband¹

550,000

547,900

539,800

532,600

523,600

Video

124,800

128,800

131,500

132,400

132,300

Voice

275,600

279,400

281,600

284,000

288,200

Total Residential connections

950,400

956,100

952,900

949,000

944,100

Commercial connections

201,500

206,200

210,200

217,400

223,300

Total connections

1,152,000

1,162,200

1,163,100

1,166,400

1,167,400

Residential revenue per connection²

$ 65.26

$ 64.58

$ 62.74

$ 62.15

$ 61.97

Capital expenditures (millions)

$ 78

$ 87

$ 143

$ 172

$ 132

Numbers may not foot due to rounding.

¹

Total residential broadband connections increased by 8,100 during the three months ended March 31, 2024, due primarily to net additions of 6,400 as well as certain other adjustments.

²

Total residential revenue per connection is calculated by dividing total residential revenue by the average number of residential connections and by the number of months in the period.

Telephone and Data Systems, Inc.

Consolidated Statement of Operations Highlights

(Unaudited)

Three Months Ended

June 30,

Six Months Ended

June 30,

2024

2023

2024

vs. 2023

2024

2023

2024

vs. 2023

(Dollars and shares in millions, except per share amounts)

Operating revenues

UScellular

$ 927

$ 957

(3) %

$ 1,877

$ 1,942

(3) %

TDS Telecom

267

257

4 %

534

510

5 %

All Other¹

44

53

(19) %

89

118

(24) %

1,238

1,267

(2) %

2,500

2,570

(3) %

Operating expenses

UScellular

Expenses excluding depreciation, amortization and accretion

713

759

(6) %

1,442

1,538

(6) %

Depreciation, amortization and accretion

165

161

2 %

329

330

—

(Gain) loss on asset disposals, net

5

3

49 %

11

13

(19) %

(Gain) loss on license sales and exchanges, net

8

—

N/M

7

—

N/M

891

923

(3) %

1,789

1,881

(5) %

TDS Telecom

Expenses excluding depreciation, amortization and accretion

178

189

(6) %

351

374

(6) %

Depreciation, amortization and accretion

67

60

11 %

131

119

10 %

(Gain) loss on asset disposals, net

4

2

N/M

6

3

N/M

248

251

(1) %

488

496

(1) %

All Other¹

Expenses excluding depreciation and amortization

58

56

—

111

124

(11) %

Depreciation and amortization

1

4

(34) %

7

7

(24) %

(Gain) loss on asset disposals, net

—

—

(95) %

(1)

—

N/M

60

60

(2) %

117

131

(11) %

Total operating expenses

1,199

1,234

(3) %

2,394

2,508

(5) %

Operating income (loss)

UScellular

36

34

6 %

88

61

44 %

TDS Telecom

19

7

N/M

46

15

N/M

All Other¹

(16)

(8)

N/M

(28)

(14)

N/M

39

33

17 %

106

62

72 %

Investment and other income (expense)

Equity in earnings of unconsolidated entities

39

38

3 %

82

82

—

Interest and dividend income

7

6

28 %

12

11

13 %

Interest expense

(73)

(62)

(18) %

(131)

(116)

(14) %

Other, net

1

—

N/M

2

1

N/M

Total investment and other expense

(26)

(18)

(42) %

(35)

(22)

(62) %

Income before income taxes

13

15

(13) %

71

40

77 %

Income tax expense

6

15

(57) %

26

28

(8) %

Net income

7

—

N/M

45

12

N/M

Less: Net income attributable to noncontrolling interests, net of tax

4

2

N/M

13

6

N/M

Net income (loss) attributable to TDS shareholders

3

(2)

N/M

32

6

N/M

TDS Preferred Share dividends

17

17

—

35

35

—

Net income (loss) attributable to TDS common shareholders

$ (14)

$ (19)

24 %

$ (3)

$ (29)

91 %

Basic weighted average shares outstanding

114

113

1 %

113

113

1 %

Basic earnings (loss) per share attributable to TDS common shareholders

$ (0.13)

$ (0.17)

25 %

$ (0.02)

$ (0.25)

91 %

Diluted weighted average shares outstanding

114

113

1 %

113

113

1 %

Diluted earnings (loss) per share attributable to TDS common shareholders

$ (0.13)

$ (0.17)

23 %

$ (0.03)

$ (0.25)

89 %

N/M - Percentage change not meaningful.

Numbers may not foot due to rounding.

¹

Consists of TDS corporate, intercompany eliminations and all other business operations not included in the UScellular and TDS Telecom segments.

Telephone and Data Systems, Inc.

Consolidated Statement of Cash Flows

(Unaudited)

Six Months Ended

June 30,

2024

2023

(Dollars in millions)

Cash flows from operating activities

Net income

$ 45

$ 12

Add (deduct) adjustments to reconcile net income to net cash flows from operating activities

Depreciation, amortization and accretion

467

456

Bad debts expense

51

53

Stock-based compensation expense

29

14

Deferred income taxes, net

16

22

Equity in earnings of unconsolidated entities

(82)

(82)

Distributions from unconsolidated entities

80

78

(Gain) loss on asset disposals, net

16

16

(Gain) loss on license sales and exchanges, net

7

—

Other operating activities

5

4

Changes in assets and liabilities from operations

Accounts receivable

6

19

Equipment installment plans receivable

5

7

Inventory

54

52

Accounts payable

(14)

(124)

Customer deposits and deferred revenues

7

(9)

Accrued taxes

7

56

Accrued interest

5

(1)

Other assets and liabilities

(78)

(59)

Net cash provided by operating activities

626

514

Cash flows from investing activities

Cash paid for additions to property, plant and equipment

(451)

(629)

Cash paid for intangible assets

(15)

(8)

Other investing activities

1

8

Net cash used in investing activities

(465)

(629)

Cash flows from financing activities

Issuance of long-term debt

440

391

Repayment of long-term debt

(401)

(209)

Repayment of short-term debt

—

(60)

Tax payments for TDS stock-based compensation awards

(10)

(3)

Tax payments for UScellular stock-based compensation awards

(12)

(6)

Repurchase of TDS Common Shares

—

(6)

Dividends paid to TDS shareholders

(61)

(76)

Payment of debt issuance costs

(16)

—

Distributions to noncontrolling interests

(3)

(2)

Cash paid for software license agreements

(21)

(20)

Other financing activities

(1)

—

Net cash provided by (used in) financing activities

(85)

9

Net increase (decrease) in cash, cash equivalents and restricted cash

76

(106)

Cash, cash equivalents and restricted cash

Beginning of period

270

399

End of period

$ 346

$ 293

Telephone and Data Systems, Inc.

Consolidated Balance Sheet Highlights

(Unaudited)

ASSETS

June 30, 2024

December 31, 2023

(Dollars in millions)

Current assets

Cash and cash equivalents

$ 322

$ 236

Accounts receivable, net

1,037

1,074

Inventory, net

148

208

Prepaid expenses

88

86

Income taxes receivable

4

4

Other current assets

42

52

Total current assets

1,641

1,660

Assets held for sale

120

15

Licenses

4,724

4,702

Other intangible assets, net

173

183

Investments in unconsolidated entities

507

505

Property, plant and equipment, net

4,988

5,062

Operating lease right-of-use assets

966

987

Other assets and deferred charges

753

807

Total assets

$ 13,872

$ 13,921

Telephone and Data Systems, Inc.

Consolidated Balance Sheet Highlights

(Unaudited)

LIABILITIES AND EQUITY

June 30, 2024

December 31, 2023

(Dollars in millions, except per share amounts)

Current liabilities

Current portion of long-term debt

$ 29

$ 26

Accounts payable

327

360

Customer deposits and deferred revenues

282

277

Accrued interest

17

12

Accrued taxes

43

43

Accrued compensation

94

149

Short-term operating lease liabilities

145

147

Other current liabilities

149

170

Total current liabilities

1,086

1,184

Liabilities held for sale

34

—

Deferred liabilities and credits

Deferred income tax liability, net

992

975

Long-term operating lease liabilities

873

890

Other deferred liabilities and credits

786

784

Long-term debt, net

4,103

4,080

Noncontrolling interests with redemption features

16

12

Equity

TDS shareholders' equity

Series A Common and Common Shares, par value $0.01 per share

1

1

Capital in excess of par value

2,542

2,558

Preferred Shares, par value $0.01 per share

1,074

1,074

Treasury shares, at cost

(437)

(465)

Accumulated other comprehensive income

11

11

Retained earnings

1,957

2,023

Total TDS shareholders' equity

5,148

5,202

Noncontrolling interests

834

794

Total equity

5,982

5,996

Total liabilities and equity

$ 13,872

$ 13,921

Balance Sheet Highlights

(Unaudited)

June 30, 2024

TDS

TDS
Corporate

Intercompany

TDS

UScellular

Telecom

& Other

Eliminations

Consolidated

(Dollars in millions)

Cash and cash equivalents

$ 195

$ 58

$ 125

$ (56)

$ 322

Licenses and other intangible assets

$ 4,715

$ 177

$ 5

$ —

$ 4,897

Investment in unconsolidated entities

461

4

49

(7)

507

$ 5,176

$ 181

$ 54

$ (7)

$ 5,404

Property, plant and equipment, net

$ 2,540

$ 2,429

$ 19

$ —

$ 4,988

Long-term debt, net:

Current portion

$ 20

$ —

$ 9

$ —

$ 29

Non-current portion

2,887

3

1,213

—

4,103

$ 2,907

$ 3

$ 1,222

$ —

$ 4,132

United States Cellular Corporation

Segment Results

(Unaudited)

Three Months Ended

June 30,

Six Months Ended
June 30,

UScellular

2024

2023

2024
vs. 2023

2024

2023

2024

vs. 2023

(Dollars in millions)

Operating Revenues

Wireless

$ 902

$ 932

(3) %

$ 1,826

$ 1,892

(3) %

Towers

58

57

3 %

116

113

3 %

Intra-company eliminations

(33)

(32)

(4) %

(65)

(63)

(3) %

Total operating revenues

927

957

(3) %

1,877

1,942

(3) %

Operating expenses

Wireless

885

916

(3) %

1,779

1,868

(5) %

Towers

39

39

1 %

75

76

(1) %

Intra-company eliminations

(33)

(32)

(4) %

(65)

(63)

(3) %

Total operating expenses

891

923

(3) %

1,789

1,881

(5) %

Operating income

$ 36

$ 34

6 %

$ 88

$ 61

44 %

Adjusted OIBDA (Non-GAAP)

$ 227

$ 198

14 %

$ 456

$ 404

13 %

Adjusted EBITDA (Non-GAAP)

$ 268

$ 239

13 %

$ 542

$ 491

10 %

Capital expenditures

$ 165

$ 143

15 %

$ 295

$ 351

(16) %

Three Months Ended

June 30,

Six Months Ended
June 30,

UScellular Wireless

2024

2023

2024
vs. 2023

2024

2023

2024

vs. 2023

(Dollars in millions)

Retail service

$ 666

$ 686

(3) %

$ 1,344

$ 1,378

(2) %

Other

52

49

7 %

102

99

3 %

Service revenues

718

735

(2) %

1,446

1,477

(2) %

Equipment sales

184

197

(6) %

380

415

(9) %

Total operating revenues

902

932

(3) %

1,826

1,892

(3) %

System operations (excluding Depreciation, amortization and accretion reported below)

194

203

(4) %

390

398

(2) %

Cost of equipment sold

211

228

(7) %

427

480

(11) %

Selling, general and administrative

313

333

(6) %

637

670

(5) %

Depreciation, amortization and accretion

154

149

3 %

308

307

—

(Gain) loss on asset disposals, net

5

3

40 %

10

13

(23) %

(Gain) loss on license sales and exchanges, net

8

—

N/M

7

—

N/M

Total operating expenses

885

916

(3) %

1,779

1,868

(5) %

Operating income

$ 17

$ 16

5 %

$ 47

$ 24

97 %

Adjusted OIBDA (Non-GAAP)

$ 196

$ 168

16 %

$ 392

$ 344

14 %

Adjusted EBITDA (Non-GAAP)

$ 196

$ 168

16 %

$ 392

$ 344

14 %

Capital expenditures

$ 160

$ 140

13 %

$ 286

$ 346

(17) %

N/M - Percentage change not meaningful

United States Cellular Corporation

Segment Results

(Unaudited)

Three Months Ended

June 30,

Six Months Ended
June 30,

UScellular Towers

2024

2023

2024
vs. 2023

2024

2023

2024

vs. 2023

(Dollars in millions)

Third-party revenues

$ 25

$ 25

1 %

$ 51

$ 50

2 %

Intra-company revenues

33

32

4 %

65

63

3 %

Total tower revenues

58

57

3 %

116

113

3 %

System operations (excluding Depreciation, amortization and accretion reported below)

19

19

(1) %

37

37

1 %

Selling, general and administrative

9

8

8 %

16

16

(3) %

Depreciation, amortization and accretion

11

12

(5) %

21

23

(5) %

(Gain) loss on asset disposals, net

—

—

N/M

1

—

N/M

Total operating expenses

39

39

1 %

75

76

(1) %

Operating income

$ 19

$ 18

7 %

$ 41

$ 37

10 %

Adjusted OIBDA (Non-GAAP)

$ 31

$ 30

6 %

$ 64

$ 60

7 %

Adjusted EBITDA (Non-GAAP)

$ 31

$ 30

6 %

$ 64

$ 60

7 %

Capital expenditures

$ 5

$ 3

N/M

$ 9

$ 5

89 %

N/M - Percentage change not meaningful

TDS Telecom Highlights

(Unaudited)

Three Months Ended

June 30,

Six Months Ended

June 30,

2024

2023

2024

vs. 2023

2024

2023

2024

vs. 2023

(Dollars in millions)

Operating revenues

Residential

Incumbent

$ 90

$ 89

1 %

$ 180

$ 175

3 %

Expansion

28

18

60 %

54

33

65 %

Cable

69

68

1 %

138

136

2 %

Total residential

186

175

7 %

372

344

8 %

Commercial

37

39

(6) %

74

80

(8) %

Wholesale

44

43

2 %

88

86

2 %

Total service revenues

267

257

4 %

534

510

5 %

Equipment revenues

—

—

19 %

—

—

(12) %

Total operating revenues

267

257

4 %

534

510

5 %

Cost of services

98

108

(9) %

196

212

(8) %

Cost of equipment and products

—

—

(28) %

—

—

(7) %

Selling, general and administrative expenses

80

81

(2) %

155

162

(4) %

Depreciation, amortization and accretion

67

60

11 %

131

119

10 %

(Gain) loss on asset disposals, net

4

2

N/M

6

3

N/M

Total operating expenses

248

251

(1) %

488

496

(1) %

Operating income

$ 19

$ 7

N/M

$ 46

$ 15

N/M

N/M - Percentage change not meaningful

Numbers may not foot due to rounding.

Telephone and Data Systems, Inc.

Free Cash Flow

(Unaudited)

Three Months Ended

June 30,

Six Months Ended

June 30,

TDS - CONSOLIDATED

2024

2023

2024

2023

(Dollars in millions)

Cash flows from operating activities (GAAP)

$ 403

$ 469

$ 626

$ 514

Cash paid for additions to property, plant and equipment

(216)

(298)

(451)

(629)

Cash paid for software license agreements

(11)

(12)

(21)

(20)

Free cash flow (Non-GAAP)¹

$ 176

$ 159

$ 154

$ (135)

Three Months Ended

June 30,

Six Months Ended

June 30,

UScellular

2024

2023

2024

2023

(Dollars in millions)

Cash flows from operating activities (GAAP)

$ 313

$ 349

$ 516

$ 390

Cash paid for additions to property, plant and equipment

(137)

(155)

(270)

(351)

Cash paid for software license agreements

(11)

(12)

(20)

(19)

Free cash flow (Non-GAAP)¹

$ 165

$ 182

$ 226

$ 20

¹

Free cash flow is a non-GAAP financial measure which TDS believes may be useful to investors and other users of its financial information in evaluating liquidity, specifically, the amount of net cash generated by business operations after deducting Cash paid for additions to property, plant and equipment and Cash paid for software license agreements.

Telephone and Data Systems, Inc.

EBITDA, Adjusted EBITDA and Adjusted OIBDA

(Unaudited)

The following tables reconcile EBITDA, Adjusted EBITDA and Adjusted OIBDA to the corresponding GAAP measures, Net income,
Income before income taxes and/or Operating income. Income and expense items below Operating income are not provided at the
individual segment level for UScellular Wireless and UScellular Towers; therefore, the reconciliations begin with EBITDA and the
most comparable GAAP measure is Operating income rather than Net income at the segment level.

Three Months Ended

June 30,

TDS - CONSOLIDATED

2024

2023

(Dollars in millions)

Net income (GAAP)

$ 7

$ —

Add back:

Income tax expense

6

15

Income before income taxes (GAAP)

13

15

Add back:

Interest expense

73

62

Depreciation, amortization and accretion

233

225

EBITDA (Non-GAAP)

319

302

Add back or deduct:

Expenses related to strategic alternatives review

21

—

(Gain) loss on asset disposals, net

9

5

(Gain) loss on license sales and exchanges, net

8

—

Adjusted EBITDA (Non-GAAP)

357

307

Deduct:

Equity in earnings of unconsolidated entities

39

38

Interest and dividend income

7

6

Other, net

1

—

Adjusted OIBDA (Non-GAAP)

$ 310

$ 263

EBITDA, Adjusted EBITDA and Adjusted OIBDA

Three Months Ended

June 30,

UScellular

2024

2023

(Dollars in millions)

Net income (GAAP)

$ 18

$ 5

Add back:

Income tax expense

14

19

Income before income taxes (GAAP)

32

24

Add back:

Interest expense

45

51

Depreciation, amortization and accretion

165

161

EBITDA (Non-GAAP)

242

236

Add back or deduct:

Expenses related to strategic alternatives review

13

—

(Gain) loss on asset disposals, net

5

3

(Gain) loss on license sales and exchanges, net

8

—

Adjusted EBITDA (Non-GAAP)

268

239

Deduct:

Equity in earnings of unconsolidated entities

38

38

Interest and dividend income

3

3

Adjusted OIBDA (Non-GAAP)

$ 227

$ 198

Three Months Ended

June 30,

UScellular Wireless

2024

2023

(Dollars in millions)

EBITDA (Non-GAAP)

$ 171

$ 165

Add back or deduct:

Expenses related to strategic alternatives review

12

—

(Gain) loss on asset disposals, net

5

3

(Gain) loss on license sales and exchanges, net

8

—

Adjusted EBITDA and Adjusted OIBDA (Non-GAAP)

196