Completes restatement of prior period results; reports year-end 2006 wireless
net adds
CHICAGO, Feb. 23 /PRNewswire-FirstCall/ -- Telephone and Data Systems,
Inc. (Amex: TDS, TDS.S) reported operating revenues of $1,112.1 million for
the third quarter of 2006, up 8 percent from $1,027.9 million, as restated,
for the comparable period one year ago. Operating income was $110.4 million
compared to operating income of $104.5 million, as restated, for the third
quarter of 2005. Net income available to common and diluted earnings per
share were $75.2 million and $0.64, respectively. In the third quarter of
2005, net income available to common and diluted earnings per share were
$38.6 million and $0.33, respectively, as restated.
TDS also completed the restatement of prior period results announced on
Nov. 6, 2006, which included each of the years ended Dec. 31, 2002 - 2005,
quarterly information for 2004 and 2005, and the first and second quarters of
2006. The restatement was required primarily to correct the accounting for
prepaid forward contracts under Statement of Financial Accounting Standards
(SFAS) No. 133, Accounting for Derivative Instruments and Hedging Activities.
Later today, the company will file its Form 10-K/A for 2005, its Forms 10-Q/A
for the first and second quarters of 2006, and its Form 10-Q for the third
quarter of 2006, with the Securities and Exchange Commission.
Third Quarter Highlights
-
The total number of U.S. Cellular customers increased 8 percent year
over year to 5,729,000. The number of retail customers increased 8
percent to 5,127,000.
-
U.S. Cellular's average monthly revenue per unit (ARPU) increased 4
percent to $47.93.
-
U.S. Cellular recorded a postpay churn rate of 1.6 percent.
The number of TDS Telecom ILEC and CLEC access line equivalents
increased 2.1 percent to 1.2 million.-
The number of ILEC Digital Subscriber Lines (DSL) increased 56 percent
to 94,100 in the third quarter, and the number of CLEC DSL lines grew
18 percent to 41,000 year over year.
-
The number of ILEC long distance customers increased 6 percent to
335,100, with long distance penetration reaching 54 percent at
Sept. 30, 2006.
-
At an Extraordinary General Meeting held on July 25, 2006, Vodafone
approved a share consolidation in which 8 American Depository Receipts
("ADRs") were consolidated into 7 ADRs and a return of capital
("Special Distribution"). U.S. Cellular and TDS Telecom received
approximately $28.6 million and $7.6 million, respectively. The
Special Distribution was recorded as a return of capital.
-
TDS recorded a gain in fair value adjustment of derivative instruments
of $34.6 million related to accounting for prepaid forward contracts.
"U.S. Cellular grew its service revenues 13 percent in the third quarter,
while operating income grew 22 percent, continuing a trend of double digit
revenue growth and improved profitability during the year. Revenue growth was
aided by higher ARPU, which increased 4 percent year over year, driven in part
by higher data revenues. While higher data revenues positively affected the
quarter, net customer additions were lower than planned," said LeRoy T.
Carlson, Jr., TDS' president and chief executive officer.
"U.S. Cellular focused in 2006 on enhancing its competitive position and
improving profitability in its existing markets. This focus continues in
2007. As a result, we expect that U.S. Cellular will have grown its cash flow
from operations in excess of capital spending in 2006 and will do so again in
2007, further strengthening its financial position."
"TDS Telecom continues to deliver on its strategy of being the preferred
broadband provider in the markets where it offers DSL service. In the third
quarter, the number of DSL customers for combined ILEC and CLEC operations
grew by 40,000 to total 135,100, a 42 percent increase over the third quarter
2005. We will continue to aggressively market DSL service that combines
quality, speed and price to drive market penetration. We will tailor our
marketing and sales approach on a market-by-market basis, and expand into new
markets as economics dictate. Another highlight in the third quarter is that
TDS Telecom's equivalent access lines, ILEC and CLEC combined, grew 2.1
percent year over year," he concluded.
U.S. Cellular Year-end Net Customer Additions 2006 Update
12/31/06 12/31/05
Postpay customer additions 283,000 291,000
Prepaid customer additions 14,000 120,000
Total net retail customer additions * 297,000 411,000
Wholesale customer additions 13,000 66,000
Total customer additions 310,000 477,000
* U.S. Cellular issues guidance on net retail customer additions.
Certain financial and statistical information will be posted to the TDS
web site, together with reconciliations to generally accepted accounting
principles (GAAP) of certain non-GAAP disclosures. Investors may access this
additional information on the Guidance and Reconciliations page of the TDS web
site.
About TDS
TDS is a diversified telecommunications corporation founded in 1969.
Through its business units, U.S. Cellular and TDS Telecom, TDS operates
primarily by providing wireless, local telephone and broadband services. As
of Sept. 30, 2006, the company employed 11,700 people and served 6.9 million
customers/units in 36 states.
About U.S. Cellular
As of Sept. 30, 2006, U.S. Cellular Corporation, the nation's sixth-
largest wireless service carrier, employees 8,000 people and provided wireless
service to 5.7 million customers in 26 states. The Chicago-based company
operates on a customer satisfaction strategy, meeting customer needs by
providing a comprehensive range of wireless products and services, superior
customer support, and a high-quality network.
Safe Harbor Statement Under the Private Securities Litigation Reform Act
of 1995: All information set forth in this news release, 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: The ability of U.S. Cellular to successfully manage and grow the
operations of the Chicago MTA and newly launched markets; changes in the
overall economy; changes in competition in the markets in which U.S. Cellular
and TDS Telecom operate; changes due to industry consolidation; advances in
telecommunications technology, including Voice over Internet Protocol; changes
to access and pricing of unbundled network elements; changes in the state and
federal telecommunications regulatory environment; changes in the value of
assets; changes in the value of investments, including variable prepaid
forward contracts; an adverse change in the ratings afforded TDS and U.S.
Cellular debt securities by accredited ratings organizations; uncertainty of
access to the capital markets; risks and uncertainties relating to
restatements and possible future restatements; pending and future litigation;
acquisitions/ divestitures of properties and/or licenses; and changes in
customer growth rates, average monthly revenue per unit, churn rates, roaming
rates and the mix of products and services offered in U.S. Cellular and TDS
Telecom markets. Investors are encouraged to consider these and other risks
and uncertainties that are discussed in the Form 8-K used by TDS to furnish
this press release to the SEC, which are incorporated by reference herein.
For more information about TDS or its business units, visit:
TDS: http://www.teldta.com TDS Telecom: http://www.tdstelecom.com
USM: http://www.uscellular.com
TELEPHONE AND DATA SYSTEMS, INC.
SUMMARY OPERATING DATA
Quarter Ended 9/30/2006 6/30/2006 3/31/2006 12/31/2005 9/30/2005
U.S. Cellular
Consolidated
Markets:
Total
population
(000s)(1) 55,543 55,543 55,164 45,244 44,690
All
customers -
Customer
units 5,729,000 5,704,000 5,633,000 5,482,000 5,303,000
Gross
customer
unit
activa-
tions 365,000 347,000 434,000 419,000 355,000
Net
customer
unit
activa-
tions 25,000 48,000 151,000 125,000 76,000
Market
penetra-
tion(1) 10.31% 10.27% 10.21% 12.12% 11.87%
Retail
customers -
Customer
units 5,127,000 5,099,000 5,029,000 4,927,000 4,765,000
Gross
customer
unit
activa-
tions 353,000 331,000 380,000 392,000 346,000
Net
customer
unit
activa-
tions 28,000 49,000 122,000 130,000 77,000
Cell sites
in service 5,726 5,583 5,438 5,428 5,149
Average
monthly
revenue
per unit(2) $47.93 $46.54 $46.17 $45.88 $46.16
Retail
service
revenue
per
unit(2) $41.65 $40.84 $40.70 $40.13 $40.22
Inbound
roaming
revenue
per
unit(2) $2.55 $2.28 $2.12 $2.31 $2.70
Long-
distance/
other
revenue
per
unit(2) $3.73 $3.42 $3.35 $3.44 $3.24
Minutes of
use (MOU)(3) 725 719 658 648 639
Postpay churn
rate per
month(4) 1.6% 1.5% 1.5% 1.6% 1.5%
Marketing cost
per gross
customer unit
addition(5) $ 496 $ 503 $ 412 $ 501 $ 491
Construction
Expenditures
(000s) $ 152,800 $ 151,400 $ 117,200 $ 197,400 $ 125,600
(1) Market penetration is calculated using 2005 Claritas population
estimates for all periods of 2006 and 2004 Claritas estimates for all
periods of 2005. "Total population" represents the total population
of each of U.S. Cellular's consolidated markets, regardless of whether
the market has begun marketing operations. The 9/30/06, 6/30/06 and
3/31/06 total population count includes the markets acquired in
January 2006 by Carroll Wireless, L.P., a consolidated U.S. Cellular
subsidiary, representing the licensed areas for which Carroll Wireless
L.P. was the winning bidder in the Federal Communications Commission's
Auction 58 that concluded in February 2005. The 9/30/06, 6/30/06,
3/31/06 and 12/31/05 total population counts include the population of
the 15 markets acquired from ALLTEL in December 2005, and exclude the
population of the two markets transferred to ALLTEL in the same
transaction. The population of markets in which U.S. Cellular
has deferred the transfer of licenses from AT&T Wireless (now Cingular
Wireless) are not included in the total population counts for any
period.
(2) Per unit revenue measurements are derived from Service Revenues as
reported in Financial Highlights for each respective quarter as
follows:
Service
Revenues
per
Financial
High-
lights $ 821,820 $ 791,705 $ 769,222 $ 737,790 $ 729,005
Components:
Retail
service
revenue
during
quarter $714,270 $ 694,712 $ 678,110 $ 645,286 $ 635,111
Inbound
roaming
revenue
during
quarter $43,806 $38,745 $35,344 $37,184 $42,654
Long-
distance/
other
revenue
during
quarter $63,744 $58,248 $55,768 $55,320 $51,240
Divided by
average
customers
during
quarter
(000s) 5,716 5,670 5,554 5,360 5,264
Divided by
three months
in each
quarter 3 3 3 3 3
Average monthly
revenue per
unit $47.93 $46.54 $46.17 $45.88 $46.16
Retail
service
revenue per
unit $41.65 $40.84 $40.70 $40.13 $40.22
Inbound
roaming
revenue per
unit $2.55 $2.28 $2.12 $2.31 $2.70
Long-
distance/
other
revenue
per unit $3.73 $3.42 $3.35 $3.44 $3.24
(3) Average monthly local minutes of use per customer (without roaming).
(4) Postpay churn rate per month is calculated by dividing the average
monthly postpay customer disconnects during the quarter by the average
postpay customer base for the quarter.
(5) This measurement is not calculable using information from the
financial statements as reported. The details of this calculation and
a reconciliation to line items reported in Financial Highlights for
each respective quarter are shown on U.S. Cellular's web site, along
with additional information related to U.S. Cellular's third quarter
results, at http://www.uscellular.com .
TELEPHONE AND DATA SYSTEMS, INC.
SUMMARY OPERATING DATA
Quarter Ended 9/30/2006 6/30/2006 3/31/2006 12/31/2005 9/30/2005
TDS Telecom
ILEC:
Access line
equivalents (1) 752,100 747,500 742,300 735,300 734,800
Access lines 622,700 628,600 632,100 635,500 640,700
Dial-up Internet
service accounts 82,200 86,800 90,800 90,700 89,700
Digital Subscriber Lines
(DSL) customers 94,100 84,000 75,300 65,500 60,300
Long Distance customers 335,100 331,300 327,100 321,500 316,100
Construction
Expenditures (000s) $27,000 $29,700 $17,100 $37,500 $25,100
CLEC:
Access line
equivalents (1) 452,900 450,900 449,200 448,600 445,600
Dial-up Internet service
accounts 11,000 11,800 13,500 14,200 14,700
Percent of access lines
on-switch 92.6% 92.2% 91.7% 91.1% 90.6%
Digital Subscriber Lines
(DSL) customers 41,000 39,900 38,500 36,400 34,800
Construction Expenditures
(000s) $4,500 $4,400 $2,700 $8,500 $7,100
(1) Access line equivalents are derived by converting high capacity data
lines to the estimated capacity of one switched access line.
TELEPHONE AND DATA SYSTEMS, INC.
FINANCIAL HIGHLIGHTS
Three Months Ended September 30,
(Unaudited, dollars in thousands, except per share amounts)
2005 Increase
(as (Decrease)
2006 restated) Amount Percent
Operating Revenues
U.S. Cellular $888,523 $795,100 $93,423 11.7%
TDS Telecom 220,348 227,742 (7,394) (3.2%)
All Other (1) 3,199 5,105 (1,906) (37.3%)
1,112,070 1,027,947 84,123 8.2%
Operating Expenses
U.S. Cellular
Expenses excluding
depreciation, amortization
and accretion 664,256 603,532 60,724 10.1%
Depreciation, amortization and
accretion 146,940 128,238 18,702 14.6%
811,196 731,770 79,426 10.9%
TDS Telecom
Expenses excluding
depreciation and amortization 146,779 146,841 (62) N/M
Depreciation and amortization 39,628 40,317 (689) (1.7%)
186,407 187,158 (751) N/M
All Other (1)
Expenses excluding
depreciation and amortization 3,381 3,846 (465) (12.1%)
Depreciation and amortization 711 688 23 3.3%
4,092 4,534 (442) (9.7%)
Total Operating Expenses 1,001,695 923,462 78,233 8.5%
Operating Income (Loss)
U.S. Cellular 77,327 63,330 13,997 22.1%
TDS Telecom 33,941 40,584 (6,643) (16.4%)
All Other (1) (893) 571 (1,464) N/M
110,375 104,485 5,890 5.6%
Investment and Other Income
(Expense)
Equity in earnings of
unconsolidated entities 24,080 17,737 6,343 35.8%
Interest and dividend income 16,323 14,204 2,119 14.9%
Fair value adjustment of
derivative instruments 34,619 (4,429) 39,048 N/M
Interest (expense) (59,365) (53,852) (5,513) (10.2%)
Other (expense) (4,319) (3,204) (1,115) (34.8%)
11,338 (29,544) 40,882 138.4%
Income Before Income Taxes and
Minority Interest 121,713 74,941 46,772 62.4%
Income tax expense 35,718 29,492 6,226 21.1%
Income Before Minority Interest 85,995 45,449 40,546 89.2%
Minority share of income (10,756) (7,174) (3,582) (49.9%)
Income (Loss) From Continuing
Operations 75,239 38,275 36,964 96.6%
Discontinued Operations, net of tax --- 340 (340) (100.0%)
Net Income 75,239 38,615 36,624 94.8%
Preferred dividend requirement (51) (50) (1) (2.0%)
Net Income Available to Common $75,188 $38,565 $36,623 95.0%
Basic Weighted Average Common
Shares Outstanding (000s) 115,768 115,423 345 N/M
Basic Earnings Per Share $0.65 $0.33 $0.32 97.0%
Diluted Weighted Average Common
Shares Outstanding (000s) 116,862 116,103 759 N/M
Diluted Earnings Per Share $0.64 $0.33 $0.31 93.9%
(1) Consists of Suttle Straus printing and distribution operations and
intercompany eliminations.
N/M - Percentage change not meaningful
TELEPHONE AND DATA SYSTEMS, INC.
FINANCIAL HIGHLIGHTS
Nine Months Ended September 30,
(Unaudited, dollars in thousands, except per share amounts)
2005 Increase
(as (Decrease)
2006 restated) Amount Percent
Operating Revenues
U.S. Cellular $2,571,036 $2,245,526 $325,510 14.5%
TDS Telecom 657,641 670,139 (12,498) (1.9%)
All Other (1) 11,157 14,192 (3,035) (21.4%)
3,239,834 2,929,857 309,977 10.6%
Operating Expenses
U.S. Cellular
Expenses excluding
depreciation,
amortization and
accretion 1,915,334 1,698,276 217,058 12.8%
Depreciation, amortization
and accretion 429,451 382,244 47,207 12.3%
2,344,785 2,080,520 264,265 12.7%
TDS Telecom
Expenses excluding
depreciation and
amortization 435,569 428,529 7,040 1.6%
Depreciation and
amortization 119,115 122,988 (3,873) (3.1%)
554,684 551,517 3,167 N/M
All Other (1)
Expenses excluding
depreciation and
amortization 13,365 11,003 2,362 21.5%
Depreciation and
amortization 2,132 2,063 69 3.3%
15,497 13,066 2,431 18.6%
Total Operating Expenses 2,914,966 2,645,103 269,863 10.2%
Operating Income (Loss)
U.S. Cellular 226,251 165,006 61,245 37.1%
TDS Telecom 102,957 118,622 (15,665) (13.2%)
All Other (1) (4,340) 1,126 (5,466) N/M
324,868 284,754 40,114 14.1%
Investment and Other Income
(Expense)
Equity in earnings of
unconsolidated entities 66,376 50,229 16,147 32.1%
Interest and dividend income 174,351 141,514 32,837 23.2%
Fair value adjustment of
derivative instruments 22,881 495,294 (472,413) (95.4%)
Gain on investments 91,418 500 90,918 N/M
Interest (expense) (177,185) (160,240) (16,945) (10.6%)
Other (expense) (6,187) (14,280) 8,093 56.7%
171,654 513,017 (341,363) (66.5%)
Income Before Income Taxes and
Minority Interest 496,522 797,771 (301,249) (37.8%)
Income tax expense 185,246 317,982 (132,736) (41.7%)
Income Before Minority Interest 311,276 479,789 (168,513) (35.1%)
Minority share of income (33,281) (23,974) (9,307) (38.8%)
Income (Loss) From Continuing
Operations 277,995 455,815 (177,820) (39.0%)
Discontinued Operations, net
of tax --- 340 (340) (100.0%)
Net Income 277,995 456,155 (178,160) (39.1%)
Preferred dividend requirement (152) (152) --- N/M
Net Income Available to Common $277,843 $456,003 $(178,160) (39.1%)
Basic Weighted Average Common
Shares Outstanding (000s) 115,759 115,217 542 N/M
Basic Earnings Per Share $2.40 $3.96 $(1.56) (39.4%)
Diluted Weighted Average
Common Shares Outstanding (000s) 116,623 116,063 560 N/M
Diluted Earnings Per Share $2.38 $3.92 $(1.54) (39.3%)
(1) Consists of Suttle Straus printing and distribution operations and
intercompany eliminations.
N/M - Percentage change not meaningful
TELEPHONE AND DATA SYSTEMS, INC.
CONSOLIDATED BALANCE SHEET HIGHLIGHTS
(Unaudited, dollars in thousands)
ASSETS
December 31,
September 30, 2005
2006 (as restated)
Current Assets
Cash and cash equivalents $1,029,756 $1,095,791
Marketable equity securities 975,957 ---
Accounts receivable from customers and other 507,409 489,460
Deferred income tax asset --- 13,438
Materials and supplies, at average cost 89,269 103,211
Other current assets 73,716 76,520
2,676,107 1,778,420
Investments
Licenses 1,450,369 1,365,063
Goodwill 886,418 882,168
Customer lists 32,048 47,649
Marketable equity securities 1,427,864 2,531,690
Investments in unconsolidated entities 243,849 217,180
Other investments 11,528 12,274
4,052,076 5,056,024
Property, Plant and Equipment, net
U.S. Cellular 2,599,549 2,553,029
TDS Telecom 913,678 945,854
Other 33,126 30,877
3,546,353 3,529,760
Other Assets and Deferred Charges 55,913 55,830
Total Assets $ 10,330,449 $ 10,420,034
LIABILITIES AND STOCKHOLDERS' EQUITY
December 31,
September 30, 2005
2006 (as restated)
Current Liabilities
Current portion of long-term debt $700,064 $237,948
Derivative Liability 188,171 ---
Notes payable 150,000 135,000
Accounts payable 297,640 359,934
Customer deposits and deferred revenues 136,940 126,454
Accrued taxes 58,023 46,061
Accrued compensation 66,891 67,443
Deferred taxes 226,435 ---
Other current liabilities 111,586 92,485
1,935,750 1,065,325
Deferred Liabilities and Credits
Net deferred income tax liability 995,808 1,337,716
Derivative Liability 234,079 449,192
Other deferred liabilities and credits 336,485 298,306
1,566,372 2,085,214
Long-term Debt 2,655,958 3,340,801
Minority Interest in Subsidiaries 577,175 546,833
Preferred Shares 3,863 3,863
Common Stockholders' Equity
Common Shares, $.01 par value 565 565
Special Common Shares, $.01 par value 629 629
Series A Common Shares, $.01 par value 64 64
Capital in excess of par value 1,848,698 1,828,634
Treasury Shares, at cost
Common Shares (207,524) (208,156)
Special Common Shares (209,391) (210,600)
Accumulated other comprehensive income 309,321 363,641
Retained earnings 1,848,969 1,603,221
3,591,331 3,377,998
Total Liabilities and Stockholders' Equity $10,330,449 $10,420,034
BALANCE SHEET HIGHLIGHTS
SEPTEMBER 30, 2006
(Unaudited, dollars in thousands)
U.S. TDS TDS Corporate Intercompany TDS
Cellular Telecom & Other Eliminations Consolidated
Cash and cash
equivalents $38,910 $378,542 $612,304 $--- $1,029,756
Affiliated cash
investments --- 570,467 --- (570,467) ---
Marketable
equity
securities 204,933 --- 771,024 --- 975,957
Notes
receivable--
affiliates --- --- 280,582 (280,582) ---
$243,843 $949,009 $1,663,910 $(851,049) $2,005,713
Licenses,
goodwill and
customer
lists $1,965,102 $401,452 $2,281 $--- $2,368,835
Marketable
equity
securities 3,572 57,375 1,366,917 --- 1,427,864
Investment
in
unconsolidated
entities 197,817 3,623 48,573 (6,164) 243,849
Other
investments 4,767 3,385 3,376 --- 11,528
$2,171,258 $465,835 $1,421,147 $(6,164) $4,052,076
Property,
Plant and
Equipment,
net $2,599,549 $913,678 $33,126 $--- $3,546,353
Notes
payable:
external $150,000 $--- $--- $--- $150,000
cash
management --- --- 570,467 (570,467) ---
intercompany --- 280,582 --- (280,582) ---
$150,000 $280,582 $570,467 $(851,049) $150,000
Forward
contracts:
Current
portion $159,856 $--- $537,117 $--- $696,973
Non-current
portion --- 41,182 982,871 --- 1,024,053
Total $159,856 $41,182 $1,519,988 $--- $1,721,026
Long-term Debt:
Current
portion $--- $452 $2,639 $--- $3,091
Non-current
portion 1,001,725 3,844 626,336 --- 1,631,905
Total $1,001,725 $4,296 $628,975 $--- $1,634,996
Preferred
Shares $--- $--- $3,863 $--- $3,863
Construction
expenditures:
Quarter
ended
9/30/06 $152,771 $31,538 $2,007 $186,316
Nine months
ended
9/30/06 $421,378 $85,384 $9,848 $516,610
TDS Telecom Highlights
Three Months Ended September 30,
(Unaudited, dollars in thousands)
2005 Increase
(as (Decrease)
2006 restated) Amount Percent
Local Telephone Operations
Operating Revenues
Local service $50,327 $50,477 $(150) N/M
Network access and long-distance 89,016 94,139 (5,123) (5.4%)
Miscellaneous 22,899 23,953 (1,054) (4.4%)
162,242 168,569 (6,327) (3.8%)
Operating Expenses
Network operations 48,275 45,716 2,559 5.6%
Customer operations 18,425 22,184 (3,759) (16.9%)
Corporate expenses 27,826 23,538 4,288 18.2%
Depreciation and amortization 33,757 33,319 438 1.3%
128,283 124,757 3,526 2.8%
Operating Income $33,959 $43,812 $(9,853) (22.5%)
Competitive Local Exchange Carrier
Operations
Revenues $59,370 $60,299 $(929) (1.5%)
Expenses excluding depreciation and
amortization 53,517 56,529 (3,012) (5.3%)
Depreciation and amortization 5,871 6,998 (1,127) (16.1%)
59,388 63,527 (4,139) (6.5%)
Operating (Loss) $(18) $(3,228) $3,210 99.4%
Intercompany revenues $(1,264) $(1,126) $(138) N/M
Intercompany expenses (1,264) (1,126) (138) N/M
--- --- ---
Total TDS Telecom Operating Income $33,941 $40,584 $(6,643) (16.4%)
N/M - Percentage change not meaningful.
TDS Telecom Highlights
Nine Months Ended September 30,
(Unaudited, dollars in thousands)
2005 Increase
(as (Decrease)
2006 restated) Amount Percent
Local Telephone Operations
Operating Revenues
Local service $151,058 $150,200 $858 N/M
Network access and long-
distance 266,994 275,452 (8,458) (3.1%)
Miscellaneous 67,176 69,139 (1,963) (2.8%)
485,228 494,791 (9,563) (1.9%)
Operating Expenses
Network operations 141,833 129,006 12,827 9.9%
Customer operations 56,300 68,773 (12,473) (18.1%)
Corporate expenses 81,136 68,314 12,822 18.8%
Depreciation and amortization 100,585 101,165 (580) N/M
379,854 367,258 12,596 3.4%
Operating Income $105,374 $127,533 $(22,159) (17.4%)
Competitive Local Exchange Carrier
Operations
Revenues $176,599 $179,212 $(2,613) (1.5%)
Expenses excluding depreciation
and amortization 160,486 166,300 (5,814) (3.5%)
Depreciation and amortization 18,530 21,823 (3,293) (15.1%)
179,016 188,123 (9,107) (4.8%)
Operating (Loss) $(2,417) $(8,911) $6,494 72.9%
Intercompany revenues $(4,186) $(3,864) $(322) N/M
Intercompany expenses (4,186) (3,864) (322) N/M
--- --- ---
Total TDS Telecom Operating Income $102,957 $118,622 $(15,665) (13.2%)
N/M - Percentage change not meaningful.
SOURCE Telephone and Data Systems, Inc.
CONTACT: Mark A. Steinkrauss, Vice President, Corporate Relations,
+1-312-592-5384, mark.steinkrauss@teldta.com , or Julie D. Mathews, Manager,
Investor Relations, +1-312-592-5341, julie.mathews@teldta.com , both of
Telephone and Data Systems, Inc.
Web site: http://www.teldta.com
http://www.tdstelecom.com
http://www.uscellular.com