CHICAGO, Nov. 4, 2010 /PRNewswire-FirstCall/ --
Note: Comparisons are year over year unless otherwise
noted.
3Q 2010 Highlights
TDS Corporate
- Operating revenues increased to $1.3
billion.
- Repurchased 705,000 TDS Special Common Shares for $19.5 million.
- 12 percent increase in diluted earnings per share attributable
to TDS shareholders.
U.S. Cellular
- Service revenues were $983.5
million.
- 31 percent increase in data revenues to $228.9 million, representing 23 percent of total
service revenues compared to 18 percent in 2009.
- Retail service ARPU (average revenue per unit) increased to
$47.12 from $46.97.
- A net loss of 25,000 retail postpaid customers and no change in
prepaid customers.
- Retail postpaid churn improved to 1.6 percent from 1.7 percent;
postpaid customers comprised 94 percent of retail customers.
- 5 percent increase in cell sites in service to 7,524.
TDS Telecom
- Operating revenues increased 3 percent to $202 million.
- 24 percent increase in ILEC high-speed data revenues,
representing 21 percent of ILEC revenues.
- ILEC equivalent access lines remained stable at 773,800, due in
part to acquisitions; ILEC physical access lines decreased 4
percent to 517,000.
- Managed IP stations (ILEC and CLEC) grew to 23,400 from
11,100.
- Approved for $123.5 million in
the second round of Broadband Stimulus projects during the quarter
(receiving $92.6 million in federal
grants and providing $30.9 million of
its own funds over the next several years).
As previously announced, TDS will hold a teleconference
Nov. 4 at 9:30
a.m. CDT. Interested parties may listen to the call live by
accessing the Conference Calls page of
www.teldta.com.
Telephone and Data Systems, Inc. (NYSE: TDS, TDS.S) reported
operating revenues of $1,266.4
million for the third quarter of 2010, an increase of 1
percent from $1,257.7 million in the
comparable period one year ago. Net income attributable to
TDS shareholders and related diluted earnings per share were
$40.6 million and $0.38, respectively, for the third quarter of
2010, compared to $36.8 million and
$0.34, respectively, in the
comparable period one year ago.
"TDS' results improved in the third quarter, with strong
performance at TDS Telecom," said LeRoy T.
Carlson, Jr., TDS president and CEO. "Both U.S. Cellular and
TDS Telecom drove strong data growth. Our businesses operate in
very competitive markets, and we're transforming them through
innovation and customer focus for long-term success.
"On October 1, U.S. Cellular
launched The Belief Project(SM), a set of industry-first programs
and features that eliminate wireless customers' most common
concerns, and actually reward customers for their loyalty. During
the third quarter, significant resources throughout the
organization were directed to the successful launch of this
important project, and we maintained consistent year-over-year
financial results in the midst of this effort. U.S. Cellular
anticipates that it will improve its performance over time as it
builds awareness about The Belief Project's comprehensive benefits.
The company's award-winning network and strong smartphone lineup,
including several popular Android™-powered devices, complement the
attractive new Belief Plans and benefits.
"TDS Telecom's residential broadband and commercial managed
service offerings contributed to strong data revenue growth and
improved operating results in the quarter. The company's strategy
to increase broadband market penetration was bolstered by federal
broadband stimulus approvals from both the first and second rounds
totaling $136 million, which includes
$31 million of its own funds, for
broadband expansion projects in rural areas. TDS Telecom continues
to attract and retain residential customers with bundles of voice,
data and video services. And, the company is focusing its
commercial sales efforts on its robust managed IP product
suite.
Guidance
Guidance for the year ending Dec. 31,
2010 as of Nov. 4, 2010 is
provided below compared to previous guidance provided on
Aug. 5, 2010. There can be no
assurance that final results will not differ materially from this
guidance.
|
|
|
|
Current
guidance
|
Previous
guidance
|
|
|
U.S. Cellular 2010 guidance as
of Nov. 4, 2010 is as follows:
|
|
|
|
|
Service revenue
|
$3,925-$3,975
million
|
$3,925-$4,000
million
|
|
|
Adjusted OIBDA (1)
|
$800-$850
million
|
Unchanged
|
|
|
Operating income (2)
|
$200-$250
million
|
Unchanged
|
|
|
Depreciation, amortization and
accretion (2)
|
Approx. $600
million
|
Unchanged
|
|
|
Capital expenditures
|
Approx. $600
million
|
Unchanged
|
|
|
|
|
|
|
|
|
Current
guidance
|
Previous
guidance
|
|
|
TDS Telecom (ILEC and CLEC) 2010
guidance as of Nov. 4, 2010 is as follows:
|
|
|
|
Operating revenues
|
$785 - $800
million
|
$760-$790
million
|
|
|
Adjusted OIBDA (1)
|
$265-$280
million
|
$250-$275
million
|
|
|
Operating income
(2)
|
$90 - $105
million
|
$80-$105
million
|
|
|
Depreciation, amortization and
accretion (2)
|
Approx. $175
million
|
Approx. $170
million
|
|
|
Capital expenditures
(3)
|
Approx. $155
million
|
Unchanged
|
|
|
|
|
|
|
|
|
(1)
|
Adjusted OIBDA is defined as
operating income excluding the effects of: depreciation,
amortization and accretion (OIBDA); the net gain or loss on asset
disposals (if any); and the loss on impairment of assets (if any).
This measure also may be commonly referred to by management
as operating cash flow. This measure should not be confused with
cash flows from operating activities, which is a component of the
consolidated statement of cash flows.
|
|
|
(2)
|
The 2010 estimated results
include estimated losses on disposals of assets, but do not include
an estimate for losses on impairment of assets, since these cannot
be predicted.
|
|
|
(3)
|
The capital expenditure guidance
does not include federal grants awarded to TDS Telecom through the
Broadband Stimulus programs under the American Recovery and
Reinvestment Act.
|
|
|
|
The 2010 benefits and expenses associated with the Belief
Project were incorporated into U.S. Cellular's 2010 financial
guidance from the beginning of the year.
The foregoing guidance represents the views of management as of
Nov. 4, 2010 and should not be
assumed to be accurate as of any other date. TDS undertakes no
legal duty to update such information, whether as a result of new
information, future events or otherwise.
Stock repurchase summary
The following represents repurchases of TDS Common Shares and
TDS Special Common Shares.
|
|
|
Repurchase Period
|
|
#
Shares
|
|
Cost (in
millions)
|
|
|
2010 (third quarter)
|
|
705,000
|
|
$
|
19.5
|
|
|
2010 (second quarter)
|
|
568,297
|
|
$
|
16.3
|
|
|
2010 (first quarter)
|
|
510,902
|
|
$
|
14.8
|
|
|
2009 (full year)
|
|
6,374,741
|
|
$
|
176.6
|
|
|
2008 (full year)
|
|
5,861,822
|
|
$
|
199.6
|
|
|
Total
|
|
14,020,762
|
|
$
|
426.8
|
|
|
|
|
|
|
|
|
|
|
Conference call information
TDS will hold a conference call on Nov.
4, 2010 at 9:30 a.m. CDT.
- Access the live call on the Conference Calls page of
www.teldta.com or at
http://www.videonewswire.com/event.asp?id=74003.
- Access the call by phone at 877/407-8029 (US/Canada), no pass code required.
Before the call, certain financial and statistical information
to be discussed during the call will be posted to the Conference
Calls page of www.teldta.com. The call will be archived on the
Conference Calls page of www.teldta.com.
About TDS
Telephone and Data Systems, Inc. (TDS), a Fortune 500® company,
provides wireless, local and long-distance telephone, and broadband
services to approximately 7.2 million customers in 36 states
through its business units, U.S. Cellular (wireless) and TDS
Telecom (wireline). Founded in 1969 and headquartered in
Chicago, TDS employed 12,300
people as of September 30, 2010.
Visit www.teldta.com for comprehensive financial information,
including earnings releases, quarterly and annual filings,
shareholder information and more.
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 the company to successfully grow its markets; the
overall economy; competition; the access to and pricing of
unbundled network elements; the ability to obtain or maintain
roaming arrangements with other carriers; the state and federal
telecommunications regulatory environment; the value of assets and
investments; adverse changes in the ratings afforded TDS and U.S.
Cellular debt securities by accredited ratings organizations;
industry consolidation; advances in telecommunications technology;
uncertainty of access to the capital markets; pending and future
litigation; changes in income tax rates, laws, regulations or
rulings; acquisitions/divestitures of properties and/or licenses;
and changes in customer growth rates, average monthly revenue per
unit, churn rates, roaming revenue and terms, the availability of
handset devices, or the mix of products and services offered by
U.S. Cellular and TDS Telecom. 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 and its subsidiaries, visit:
TDS: www.teldta.com
U.S. Cellular: www.uscellular.com
TDS Telecom: www.tdstelecom.com
|
|
|
United
States Cellular Corporation
Summary
Operating Data
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Quarter Ended
|
|
9/30/2010
|
|
6/30/2010
|
|
3/31/2010
|
|
12/31/2009
|
|
9/30/2009
|
|
|
|
Total population
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Consolidated markets
(1)
|
|
|
90,468,000
|
|
|
90,468,000
|
|
|
90,468,000
|
|
|
89,712,000
|
|
|
85,118,000
|
|
|
|
Consolidated operating markets
(1)
|
|
|
46,546,000
|
|
|
46,546,000
|
|
|
46,546,000
|
|
|
46,306,000
|
|
|
46,306,000
|
|
|
|
Market penetration at end of
period
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Consolidated markets
(2)
|
|
|
6.7%
|
|
|
6.8%
|
|
|
6.8%
|
|
|
6.8%
|
|
|
7.2%
|
|
|
|
Consolidated operating markets
(2)
|
|
|
13.1%
|
|
|
13.2%
|
|
|
13.2%
|
|
|
13.3%
|
|
|
13.2%
|
|
|
|
All customers
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total at end of
period
|
|
|
6,103,000
|
|
|
6,144,000
|
|
|
6,147,000
|
|
|
6,141,000
|
|
|
6,131,000
|
|
|
|
Gross additions
|
|
|
338,000
|
|
|
349,000
|
|
|
358,000
|
|
|
399,000
|
|
|
386,000
|
|
|
|
Net additions
(losses)
|
|
|
(41,000)
|
|
|
(3,000)
|
|
|
6,000
|
|
|
10,000
|
|
|
(24,000)
|
|
|
|
Retail customers
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total at end of
period
|
|
|
5,750,000
|
|
|
5,775,000
|
|
|
5,768,000
|
|
|
5,744,000
|
|
|
5,705,000
|
|
|
|
Gross additions
|
|
|
301,000
|
|
|
307,000
|
|
|
305,000
|
|
|
354,000
|
|
|
351,000
|
|
|
|
Net retail additions (losses)
(3)
|
|
|
(25,000)
|
|
|
7,000
|
|
|
24,000
|
|
|
39,000
|
|
|
(6,000)
|
|
|
|
|
Net postpaid additions
(losses)
|
|
|
(25,000)
|
|
|
(22,000)
|
|
|
(9,000)
|
|
|
26,000
|
|
|
8,000
|
|
|
|
|
Net prepaid additions
(losses)
|
|
|
—
|
|
|
29,000
|
|
|
33,000
|
|
|
13,000
|
|
|
(14,000)
|
|
|
|
Service revenues components
(000s)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Voice and other retail
service
|
|
$
|
636,912
|
|
$
|
648,565
|
|
$
|
663,759
|
|
$
|
677,107
|
|
$
|
690,576
|
|
|
|
Data service (6)
|
|
|
228,854
|
|
|
215,271
|
|
|
201,280
|
|
|
189,759
|
|
|
174,286
|
|
|
|
Total retail service
|
|
$
|
865,766
|
|
$
|
863,836
|
|
$
|
865,039
|
|
$
|
866,866
|
|
$
|
864,862
|
|
|
|
Inbound roaming
|
|
|
72,901
|
|
|
60,902
|
|
|
51,942
|
|
|
61,728
|
|
|
68,767
|
|
|
|
Other
|
|
|
44,836
|
|
|
47,838
|
|
|
48,027
|
|
|
56,814
|
|
|
50,289
|
|
|
|
Total service revenues
(000s)
|
|
$
|
983,503
|
|
$
|
972,576
|
|
$
|
965,008
|
|
$
|
985,408
|
|
$
|
983,918
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Divided by average customers
(000s)
|
|
|
6,124
|
|
|
6,151
|
|
|
6,137
|
|
|
6,139
|
|
|
6,138
|
|
|
|
Divided by three months in each quarter
|
|
|
3
|
|
|
3
|
|
|
3
|
|
|
3
|
|
|
3
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Average monthly revenue per unit
(4)
|
|
$
|
53.53
|
|
$
|
52.71
|
|
$
|
52.41
|
|
$
|
53.51
|
|
$
|
53.43
|
|
|
|
Voice and other retail service
(4)
|
|
$
|
34.66
|
|
$
|
35.14
|
|
$
|
36.05
|
|
$
|
36.77
|
|
$
|
37.51
|
|
|
|
Data service (4) (6)
|
|
$
|
12.46
|
|
$
|
11.67
|
|
$
|
10.93
|
|
$
|
10.30
|
|
$
|
9.46
|
|
|
|
Total retail service
(4)
|
|
$
|
47.12
|
|
$
|
46.81
|
|
$
|
46.98
|
|
$
|
47.07
|
|
$
|
46.97
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Inbound roaming (4)
|
|
$
|
3.97
|
|
$
|
3.30
|
|
$
|
2.82
|
|
$
|
3.35
|
|
$
|
3.73
|
|
|
|
Other (4)
|
|
$
|
2.44
|
|
$
|
2.60
|
|
$
|
2.61
|
|
$
|
3.09
|
|
$
|
2.73
|
|
|
|
Postpaid churn rate
(5)
|
|
|
1.6%
|
|
|
1.4%
|
|
|
1.4%
|
|
|
1.6%
|
|
|
1.7%
|
|
|
|
Capital expenditures
(000s)
|
|
$
|
124,700
|
|
$
|
133,500
|
|
$
|
121,500
|
|
$
|
189,000
|
|
$
|
128,900
|
|
|
|
Cell sites in
service
|
|
|
7,524
|
|
|
7,416
|
|
|
7,310
|
|
|
7,279
|
|
|
7,161
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
Used only to calculate market
penetration of consolidated markets and consolidated operating
markets, respectively, which is calculated by dividing customers by
the total market population (without duplication of population in
overlapping markets).
|
|
|
(2)
|
Calculated by dividing the
number of wireless customers at the end of the period by the total
population of consolidated markets and consolidated operating
markets, respectively, as estimated by Claritas.
|
|
|
(3)
|
Calculated by adding net
postpaid additions (losses) and net prepaid additions
(losses).
|
|
|
(4)
|
Calculated by dividing the
components of service revenues by the average customers and number
of months in the quarter.
|
|
|
(5)
|
Calculated by dividing the total
postpaid customer disconnects during the quarter by the average
postpaid customer base for the quarter.
|
|
|
(6)
|
Effective for the fourth quarter
of 2010, revenues from data products and services will no longer be
separately disclosed as the determination of such revenues is
increasingly dependent on allocations of bundled service prices to
multiple bundled elements.
|
|
|
|
|
|
|
TDS
Telecom
Summary
Operating Data
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Quarter Ended
|
9/30/2010
|
|
6/30/2010
|
|
3/31/2010
|
|
12/31/2009
|
|
9/30/2009
|
|
|
TDS Telecom
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
ILEC
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Equivalent access lines
(1)
|
|
773,800
|
|
|
779,200
|
|
|
778,700
|
|
|
775,900
|
|
|
772,700
|
|
|
|
Physical access lines
(2)
|
|
517,000
|
|
|
525,000
|
|
|
530,400
|
|
|
536,300
|
|
|
539,400
|
|
|
|
High-speed data customers
(3)
|
|
225,400
|
|
|
223,200
|
|
|
217,400
|
|
|
208,300
|
|
|
202,100
|
|
|
|
Long-distance
customers
|
|
370,800
|
|
|
369,100
|
|
|
365,600
|
|
|
362,800
|
|
|
356,500
|
|
|
|
Managed IP stations
(4)
|
|
3,100
|
|
|
2,700
|
|
|
2,300
|
|
|
1,900
|
|
|
1,500
|
|
|
|
Capital expenditures
(000s)
|
$
|
33,000
|
|
$
|
28,200
|
|
$
|
20,200
|
|
$
|
26,900
|
|
$
|
23,800
|
|
|
CLEC
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Equivalent access lines
(1)
|
|
338,700
|
|
|
343,100
|
|
|
349,300
|
|
|
355,900
|
|
|
364,100
|
|
|
|
High-speed data customers
(3)
|
|
33,900
|
|
|
35,000
|
|
|
36,000
|
|
|
36,900
|
|
|
37,600
|
|
|
|
Managed IP stations
(4)
|
|
20,300
|
|
|
17,000
|
|
|
14,300
|
|
|
12,000
|
|
|
9,600
|
|
|
|
Capital expenditures
(000s)
|
$
|
5,500
|
|
$
|
5,400
|
|
$
|
3,200
|
|
$
|
6,800
|
|
$
|
4,700
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
Sum of physical access lines and
high-capacity data lines, adjusted to estimate the equivalent
number of physical access lines in terms of capacity, plus the
number of managed IP stations.
|
|
|
(2)
|
Individual circuits connecting
customers to a telephone company's central office
facilities.
|
|
|
(3)
|
The number of customers provided
high-capacity data circuits via various technologies, including
digital subscriber line ("DSL"), managed Internet Protocol
("Managed IP") and dedicated Internet circuit technologies.
|
|
|
(4)
|
The number of telephone handsets
providing communications using packet networking
technology.
|
|
|
|
|
|
|
Telephone
and Data Systems, Inc.
Consolidated
Statement of Operations Highlights
Three Months
Ended September 30,
|
|
|
|
(Unaudited,
dollars and shares in thousands, except per share
amounts)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Increase/
(Decrease)
|
|
|
|
|
|
|
2010
|
|
|
2009 (1)
|
|
|
Amount
|
|
|
Percent
|
|
|
|
Operating
revenues
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
U.S. Cellular
|
$
|
1,060,781
|
|
|
$
|
1,057,295
|
|
|
$
|
3,486
|
|
|
|
—
|
|
|
|
TDS Telecom
|
|
202,030
|
|
|
|
196,542
|
|
|
|
5,488
|
|
|
|
3 %
|
|
|
|
All Other (2)
|
|
3,605
|
|
|
|
3,900
|
|
|
|
(295)
|
|
|
|
(8)%
|
|
|
|
|
|
|
|
1,266,416
|
|
|
|
1,257,737
|
|
|
|
8,679
|
|
|
|
1 %
|
|
|
|
Operating
expenses
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
U.S. Cellular
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Expenses excluding depreciation,
amortization and accretion
|
|
854,250
|
|
|
|
849,610
|
|
|
|
4,640
|
|
|
|
1 %
|
|
|
|
|
Depreciation, amortization and
accretion
|
|
144,717
|
|
|
|
146,052
|
|
|
|
(1,335)
|
|
|
|
(1)%
|
|
|
|
|
Loss on asset disposals,
net
|
|
1,981
|
|
|
|
2,085
|
|
|
|
(104)
|
|
|
|
(5)%
|
|
|
|
|
|
|
|
1,000,948
|
|
|
|
997,747
|
|
|
|
3,201
|
|
|
|
—
|
|
|
|
TDS Telecom
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Expenses excluding depreciation,
amortization
and
accretion
|
|
133,412
|
|
|
|
131,439
|
|
|
|
1,973
|
|
|
|
2 %
|
|
|
|
|
Depreciation, amortization and
accretion
|
|
43,645
|
|
|
|
41,746
|
|
|
|
1,899
|
|
|
|
5 %
|
|
|
|
|
Loss on asset disposals,
net
|
|
390
|
|
|
|
1,135
|
|
|
|
(745)
|
|
|
|
(66)%
|
|
|
|
|
|
|
|
177,447
|
|
|
|
174,320
|
|
|
|
3,127
|
|
|
|
2 %
|
|
|
|
All Other (2)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Expenses excluding depreciation
and amortization
|
|
2,243
|
|
|
|
3,185
|
|
|
|
(942)
|
|
|
|
(30)%
|
|
|
|
|
Depreciation and
amortization
|
|
2,610
|
|
|
|
2,915
|
|
|
|
(305)
|
|
|
|
(10)%
|
|
|
|
|
Loss on asset disposals,
net
|
|
7
|
|
|
|
51
|
|
|
|
(44)
|
|
|
|
(86)%
|
|
|
|
|
|
|
|
4,860
|
|
|
|
6,151
|
|
|
|
(1,291)
|
|
|
|
(21)%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total operating
expenses
|
|
1,183,255
|
|
|
|
1,178,218
|
|
|
|
5,037
|
|
|
|
—
|
|
|
|
Operating income
(loss)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
U.S. Cellular
|
|
59,833
|
|
|
|
59,548
|
|
|
|
285
|
|
|
|
—
|
|
|
|
TDS Telecom
|
|
24,583
|
|
|
|
22,222
|
|
|
|
2,361
|
|
|
|
11 %
|
|
|
|
All Other (2)
|
|
(1,255)
|
|
|
|
(2,251)
|
|
|
|
996
|
|
|
|
44 %
|
|
|
|
|
|
|
|
83,161
|
|
|
|
79,519
|
|
|
|
3,642
|
|
|
|
5 %
|
|
|
|
Investment and other income
(expense)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity in earnings of
unconsolidated entities
|
|
24,147
|
|
|
|
23,334
|
|
|
|
813
|
|
|
|
3 %
|
|
|
|
Interest and dividend
income
|
|
2,785
|
|
|
|
3,461
|
|
|
|
(676)
|
|
|
|
(20)%
|
|
|
|
Interest expense
|
|
(28,297)
|
|
|
|
(30,854)
|
|
|
|
2,557
|
|
|
|
8 %
|
|
|
|
Other, net
|
|
(438)
|
|
|
|
1,030
|
|
|
|
(1,468)
|
|
|
|
> (100)%
|
|
|
|
|
|
Total investment and other
income (expense)
|
|
(1,803)
|
|
|
|
(3,029)
|
|
|
|
1,226
|
|
|
|
40 %
|
|
|
|
Income before income
taxes
|
|
81,358
|
|
|
|
76,490
|
|
|
|
4,868
|
|
|
|
6 %
|
|
|
|
Income tax expense
|
|
28,775
|
|
|
|
28,331
|
|
|
|
444
|
|
|
|
2 %
|
|
|
|
Less: Net income attributable to
noncontrolling interests, net of tax
|
|
(11,958)
|
|
|
|
(11,384)
|
|
|
|
(574)
|
|
|
|
(5)%
|
|
|
|
Net income attributable to TDS
shareholders
|
|
40,625
|
|
|
|
36,775
|
|
|
|
3,850
|
|
|
|
10 %
|
|
|
|
Preferred dividend
requirement
|
|
(12)
|
|
|
|
(13)
|
|
|
|
1
|
|
|
|
8 %
|
|
|
|
Net income available to common
shareholders
|
$
|
40,613
|
|
|
$
|
36,762
|
|
|
$
|
3,851
|
|
|
|
10 %
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic weighted average shares
outstanding
|
|
104,881
|
|
|
|
108,289
|
|
|
|
(3,408)
|
|
|
|
(3)%
|
|
|
|
Basic earnings per share
attributable to TDS shareholders
|
$
|
0.39
|
|
|
$
|
0.34
|
|
|
$
|
0.05
|
|
|
|
15 %
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted weighted average shares
outstanding
|
|
105,298
|
|
|
|
108,565
|
|
|
|
(3,267)
|
|
|
|
(3)%
|
|
|
|
Diluted earnings per share
attributable to TDS shareholders
|
$
|
0.38
|
|
|
$
|
0.34
|
|
|
$
|
0.04
|
|
|
|
12 %
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
Amounts have been adjusted.
See "Revision of Prior Period Amounts" section for additional
details.
|
|
|
(2)
|
Consists of a non-reportable
segment (Suttle-Straus printing and distribution operations),
corporate operations, intercompany eliminations and corporate
investments.
|
|
|
|
|
|
|
Telephone
and Data Systems, Inc.
Consolidated
Statement of Operations Highlights
|
|
|
|
Nine Months
Ended September 30,
|
|
|
|
(Unaudited,
dollars and shares in thousands, except per share
amounts)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Increase/
(Decrease)
|
|
|
|
|
|
|
2010
|
|
|
2009 (1)
|
|
|
Amount
|
|
|
Percent
|
|
|
|
Operating
revenues
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
U.S. Cellular
|
$
|
3,114,531
|
|
|
$
|
3,153,782
|
|
|
$
|
(39,251)
|
|
|
|
(1)%
|
|
|
|
TDS Telecom
|
|
596,741
|
|
|
|
591,804
|
|
|
|
4,937
|
|
|
|
1%
|
|
|
|
All Other (2)
|
|
9,798
|
|
|
|
12,447
|
|
|
|
(2,649)
|
|
|
|
(21)%
|
|
|
|
|
|
|
|
3,721,070
|
|
|
|
3,758,033
|
|
|
|
(36,963)
|
|
|
|
(1)%
|
|
|
|
Operating
expenses
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
U.S. Cellular
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Expenses excluding depreciation,
amortization and accretion
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2,472,758
|
|
|
|
2,405,679
|
|
|
|
67,079
|
|
|
|
3%
|
|
|
|
|
Depreciation, amortization and
accretion
|
|
432,405
|
|
|
|
422,707
|
|
|
|
9,698
|
|
|
|
2%
|
|
|
|
|
Loss on asset disposals,
net
|
|
8,407
|
|
|
|
8,641
|
|
|
|
(234)
|
|
|
|
(3)%
|
|
|
|
|
|
|
|
2,913,570
|
|
|
|
2,837,027
|
|
|
|
76,543
|
|
|
|
3%
|
|
|
|
TDS Telecom
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Expenses excluding depreciation,
amortization and accretion
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
390,842
|
|
|
|
397,082
|
|
|
|
(6,240)
|
|
|
|
(2)%
|
|
|
|
|
Depreciation, amortization and
accretion
|
|
130,217
|
|
|
|
125,272
|
|
|
|
4,945
|
|
|
|
4%
|
|
|
|
|
Loss on asset disposals,
net
|
|
667
|
|
|
|
1,752
|
|
|
|
(1,085)
|
|
|
|
(62)%
|
|
|
|
|
|
|
|
521,726
|
|
|
|
524,106
|
|
|
|
(2,380)
|
|
|
|
—
|
|
|
|
All Other (2)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Expenses excluding depreciation
and amortization
|
|
6,290
|
|
|
|
14,826
|
|
|
|
(8,536)
|
|
|
|
(58)%
|
|
|
|
|
Depreciation and
amortization
|
|
7,997
|
|
|
|
9,239
|
|
|
|
(1,242)
|
|
|
|
(13)%
|
|
|
|
|
Loss on asset disposals,
net
|
|
(51)
|
|
|
|
69
|
|
|
|
(120)
|
|
|
|
> (100)%
|
|
|
|
|
|
|
|
14,236
|
|
|
|
24,134
|
|
|
|
(9,898)
|
|
|
|
(41)%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total operating
expenses
|
|
3,449,532
|
|
|
|
3,385,267
|
|
|
|
64,265
|
|
|
|
2%
|
|
|
|
Operating income
(loss)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
U.S. Cellular
|
|
200,961
|
|
|
|
316,755
|
|
|
|
(115,794)
|
|
|
|
(37)%
|
|
|
|
TDS Telecom
|
|
75,015
|
|
|
|
67,698
|
|
|
|
7,317
|
|
|
|
11%
|
|
|
|
All Other (2)
|
|
(4,438)
|
|
|
|
(11,687)
|
|
|
|
7,249
|
|
|
|
62%
|
|
|
|
|
|
|
|
271,538
|
|
|
|
372,766
|
|
|
|
(101,228)
|
|
|
|
(27)%
|
|
|
|
Investment and other income
(expense)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity in earnings of
unconsolidated entities
|
|
75,047
|
|
|
|
67,034
|
|
|
|
8,013
|
|
|
|
12%
|
|
|
|
Interest and dividend
income
|
|
7,900
|
|
|
|
8,435
|
|
|
|
(535)
|
|
|
|
(6)%
|
|
|
|
Interest expense
|
|
(86,520)
|
|
|
|
(93,898)
|
|
|
|
7,378
|
|
|
|
8%
|
|
|
|
Other, net
|
|
(2,557)
|
|
|
|
1,504
|
|
|
|
(4,061)
|
|
|
|
>(100)%
|
|
|
|
|
Total investment and other
income (expense)
|
|
(6,130)
|
|
|
|
(16,925)
|
|
|
|
10,795
|
|
|
|
64%
|
|
|
|
Income before income
taxes
|
|
265,408
|
|
|
|
355,841
|
|
|
|
(90,433)
|
|
|
|
(25)%
|
|
|
|
Income tax expense
|
|
98,167
|
|
|
|
125,412
|
|
|
|
(27,245)
|
|
|
|
(22)%
|
|
|
|
Net income
|
|
167,241
|
|
|
|
230,429
|
|
|
|
(63,188)
|
|
|
|
(27)%
|
|
|
|
Less: Net income attributable to
noncontrolling interests, net of tax
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(37,915)
|
|
|
|
(53,193)
|
|
|
|
15,278
|
|
|
|
29%
|
|
|
|
Net income attributable to TDS
shareholders
|
|
129,326
|
|
|
|
177,236
|
|
|
|
(47,910)
|
|
|
|
(27)%
|
|
|
|
Preferred dividend
requirement
|
|
(37)
|
|
|
|
(38)
|
|
|
|
1
|
|
|
|
3%
|
|
|
|
Net income available to common
shareholders
|
$
|
129,289
|
|
|
$
|
177,198
|
|
|
$
|
(47,909)
|
|
|
|
(27)%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic weighted average shares
outstanding
|
|
105,443
|
|
|
|
110,408
|
|
|
|
(4,965)
|
|
|
|
(4)%
|
|
|
|
Basic earnings per share
attributable to TDS shareholders
|
$
|
1.23
|
|
|
$
|
1.60
|
|
|
$
|
(0.37)
|
|
|
|
(23)%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted weighted average shares
outstanding
|
|
105,800
|
|
|
|
110,633
|
|
|
|
(4,833)
|
|
|
|
(4)%
|
|
|
|
Diluted earnings per share
attributable to TDS shareholders
|
$
|
1.22
|
|
|
$
|
1.60
|
|
|
$
|
(0.38)
|
|
|
|
(24)%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
Amounts have been adjusted.
See "Revision of Prior Period Amounts" section for additional
details.
|
|
|
(2)
|
Consists of a non-reportable
segment (Suttle-Straus printing and distribution operations),
corporate operations, intercompany eliminations and corporate
investments.
|
|
|
|
|
|
|
Telephone
and Data Systems, Inc.
Consolidated
Balance Sheet Highlights
|
|
|
(Unaudited,
dollars in thousands)
|
|
|
|
|
|
|
|
|
|
|
|
ASSETS
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
September
30,
|
|
December
31,
|
|
|
|
|
2010
|
|
2009 (1)
|
|
|
Current assets
|
|
|
|
|
|
|
|
Cash and cash
equivalents
|
$
|
390,008
|
|
$
|
670,992
|
|
|
Short-term
investments
|
|
389,052
|
|
|
113,275
|
|
|
Accounts receivable from
customers and others
|
|
504,441
|
|
|
515,443
|
|
|
Inventory
|
|
124,417
|
|
|
156,987
|
|
|
Net deferred income tax
asset
|
|
29,948
|
|
|
29,874
|
|
|
Prepaid expenses
|
|
93,406
|
|
|
94,336
|
|
|
Prepaid taxes
|
|
50,865
|
|
|
3,718
|
|
|
Other current assets
|
|
60,802
|
|
|
63,046
|
|
|
|
|
|
1,642,939
|
|
|
1,647,671
|
|
|
|
|
|
|
|
|
|
|
|
Investments
|
|
|
|
|
|
|
|
Licenses
|
|
1,453,526
|
|
|
1,443,025
|
|
|
Goodwill
|
|
718,635
|
|
|
707,840
|
|
|
Other intangible
assets
|
|
25,924
|
|
|
26,589
|
|
|
Investments in unconsolidated
entities
|
|
214,114
|
|
|
203,799
|
|
|
Long-term investments
|
|
121,441
|
|
|
—
|
|
|
Other investments
|
|
9,123
|
|
|
9,785
|
|
|
|
|
|
2,542,763
|
|
|
2,391,038
|
|
|
|
|
|
|
|
|
|
|
|
Property, plant and equipment,
net
|
|
|
|
|
|
|
|
U.S. Cellular
|
|
2,553,873
|
|
|
2,601,338
|
|
|
TDS Telecom
|
|
859,733
|
|
|
880,378
|
|
|
Other
|
|
31,553
|
|
|
26,129
|
|
|
|
|
|
3,445,159
|
|
|
3,507,845
|
|
|
|
|
|
|
|
|
|
|
|
Other assets and deferred
charges
|
|
62,970
|
|
|
65,759
|
|
|
|
|
|
|
|
|
|
|
|
Total assets
|
$
|
7,693,831
|
|
$
|
7,612,313
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
Amounts have been adjusted. See
"Revision of Prior Period Amounts" section for additional
details.
|
|
|
|
|
|
|
Telephone
and Data Systems, Inc.
Consolidated
Balance Sheet Highlights
|
|
|
|
(Unaudited,
dollars in thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
LIABILITIES
AND STOCKHOLDERS' EQUITY
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
September
30,
|
|
|
December
31,
|
|
|
|
|
|
|
2010
|
|
|
2009 (1)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current
liabilities
|
|
|
|
|
|
|
|
|
|
Current portion of long-term
debt
|
$
|
1,804
|
|
|
$
|
2,509
|
|
|
|
Accounts payable
|
|
299,039
|
|
|
|
347,348
|
|
|
|
Customer deposits and deferred
revenues
|
|
167,659
|
|
|
|
164,451
|
|
|
|
Accrued interest
|
|
21,387
|
|
|
|
12,227
|
|
|
|
Accrued taxes
|
|
81,563
|
|
|
|
62,568
|
|
|
|
Accrued compensation
|
|
87,932
|
|
|
|
93,524
|
|
|
|
Other current
liabilities
|
|
98,554
|
|
|
|
117,081
|
|
|
|
|
|
|
|
757,938
|
|
|
|
799,708
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Deferred liabilities and
credits
|
|
|
|
|
|
|
|
|
|
Net deferred income tax
liability
|
|
566,268
|
|
|
|
517,762
|
|
|
|
Other deferred liabilities and
credits
|
|
390,941
|
|
|
|
373,862
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Long-term debt
|
|
1,492,022
|
|
|
|
1,492,908
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Noncontrolling interests with
redemption features
|
|
791
|
|
|
|
727
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity
|
|
|
|
|
|
|
|
|
|
TDS shareholders'
equity
|
|
|
|
|
|
|
|
|
|
|
Series A Common, Special Common
and Common Shares,
par value
$.01
|
|
1,270
|
|
|
|
1,270
|
|
|
|
|
Capital in excess of par
value
|
|
2,101,882
|
|
|
|
2,088,807
|
|
|
|
|
Special Common and Common
Treasury shares, at cost
|
|
(724,533)
|
|
|
|
(681,649)
|
|
|
|
|
Accumulated other comprehensive
loss
|
|
(3,395)
|
|
|
|
(2,710)
|
|
|
|
|
Retained earnings
|
|
2,449,060
|
|
|
|
2,358,580
|
|
|
|
|
|
Total TDS shareholders'
equity
|
|
3,824,284
|
|
|
|
3,764,298
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Preferred shares
|
|
830
|
|
|
|
832
|
|
|
|
Noncontrolling
interests
|
|
660,757
|
|
|
|
662,216
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total equity
|
|
4,485,871
|
|
|
|
4,427,346
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total liabilities and
equity
|
$
|
7,693,831
|
|
|
$
|
7,612,313
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
Amounts have been adjusted. See
"Revision of Prior Period Amounts" section for additional
details.
|
|
|
|
|
|
|
Telephone
and Data Systems, Inc.
Balance
Sheet Highlights
|
|
|
|
September
30, 2010
|
|
|
|
(Unaudited,
dollars in thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
U.S.
Cellular
|
|
|
TDS
Telecom
|
|
|
TDS
Corporate
&
Other
|
|
|
Intercompany
Eliminations
|
|
|
TDS
Consolidated
|
|
|
|
Cash and cash
equivalents
|
$
|
269,292
|
|
|
$
|
32,095
|
|
|
$
|
88,621
|
|
|
$
|
—
|
|
|
$
|
390,008
|
|
|
|
Affiliated cash
investments
|
|
—
|
|
|
|
363,321
|
|
|
|
—
|
|
|
|
(363,321)
|
|
|
|
—
|
|
|
|
Short-term
investments
|
|
120,771
|
|
|
|
97,510
|
|
|
|
170,771
|
|
|
|
—
|
|
|
|
389,052
|
|
|
|
Notes
receivable—affiliates
|
|
—
|
|
|
|
—
|
|
|
|
9,814
|
|
|
|
(9,814)
|
|
|
|
—
|
|
|
|
|
$
|
390,063
|
|
|
$
|
492,926
|
|
|
$
|
269,206
|
|
|
$
|
(373,135)
|
|
|
$
|
779,060
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Licenses, goodwill and other
intangibles
|
$
|
1,941,107
|
|
|
$
|
449,214
|
|
|
$
|
(192,236)
|
|
|
$
|
—
|
|
|
$
|
2,198,085
|
|
|
|
Investment in unconsolidated entities
|
|
177,075
|
|
|
|
3,807
|
|
|
|
40,764
|
|
|
|
(7,532)
|
|
|
|
214,114
|
|
|
|
Long-term and other investments
|
|
50,263
|
|
|
|
1,640
|
|
|
|
78,661
|
|
|
|
—
|
|
|
|
130,564
|
|
|
|
|
$
|
2,168,445
|
|
|
$
|
454,661
|
|
|
$
|
(72,811)
|
|
|
$
|
(7,532)
|
|
|
$
|
2,542,763
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Property, plant and equipment,
net
|
$
|
2,553,873
|
|
|
$
|
859,733
|
|
|
$
|
31,553
|
|
|
$
|
—
|
|
|
$
|
3,445,159
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Notes
payable—affiliates
|
$
|
—
|
|
|
$
|
9,814
|
|
|
$
|
363,321
|
|
|
$
|
(373,135)
|
|
|
$
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Long-term debt
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current portion
|
$
|
91
|
|
|
$
|
391
|
|
|
$
|
1,322
|
|
|
$
|
—
|
|
|
$
|
1,804
|
|
|
|
Non-current portion
|
|
867,790
|
|
|
|
1,981
|
|
|
|
622,251
|
|
|
|
—
|
|
|
|
1,492,022
|
|
|
|
|
$
|
867,881
|
|
|
$
|
2,372
|
|
|
$
|
623,573
|
|
|
$
|
—
|
|
|
$
|
1,493,826
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Preferred shares
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
830
|
|
|
$
|
—
|
|
|
$
|
830
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Telephone
and Data Systems, Inc.
|
|
|
Schedule of
Cash and Cash Equivalents and Investments
|
|
|
(Unaudited,
dollars in thousands)
|
|
|
|
|
In an effort to improve
investment returns, during the second quarter of 2010, TDS elected
to use a portion of its cash balance to directly purchase U.S.
treasury securities and securities insured by the Federal Deposit
Insurance Corporation ("FDIC"). The maturity dates of such
direct investments were staggered in order to maintain cash
balances and liquidity at targeted levels. TDS also continues
to invest in certificates of deposit that are insured by the FDIC.
The following table presents TDS' cash and cash equivalents;
and investments in government-backed securities and certificates of
deposit at September 30, 2010 and December 31, 2009.
|
|
|
|
|
|
|
|
|
|
September
30,
|
|
December
31,
|
|
|
|
|
2010
|
|
2009
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash and cash
equivalents
|
|
$
|
390,008
|
|
$
|
670,992
|
|
|
Amounts included in short-term
investments (1) (2)
|
|
|
|
|
|
|
|
|
|
Government-backed securities
(3)
|
|
|
|
291,292
|
|
|
—
|
|
|
|
Certificates of deposit
(4)
|
|
|
|
97,760
|
|
|
113,275
|
|
|
|
|
|
|
$
|
389,052
|
|
$
|
113,275
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Amounts included in long-term
investments (1) (5)
|
|
|
|
|
|
|
|
|
|
Government-backed securities
(3)
|
|
|
$
|
121,441
|
|
$
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
Designated as held-to-maturity
investments and are recorded at amortized cost on the Consolidated
Balance Sheet.
|
|
|
(2)
|
Maturities are less than twelve
months from the respective balance sheet dates.
|
|
|
(3)
|
Includes U.S. treasuries and
corporate notes that are guaranteed under the FDIC's Temporary
Liquidity Guarantee Program.
|
|
|
(4)
|
TDS' investments in certificates
of deposits are insured by the FDIC.
|
|
|
(5)
|
TDS' long-term investments have
maturity dates between November 2011 and December 2012.
|
|
|
|
|
|
|
TDS Telecom
Highlights
|
|
|
|
Three Months
Ended September 30,
|
|
|
|
(Unaudited,
dollars in thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Increase
(Decrease)
|
|
|
|
|
|
|
2010
|
|
|
2009
|
|
|
Amount
|
|
Percent
|
|
|
|
Local Telephone
Operations
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating
revenues
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Voice
|
$
|
45,363
|
|
|
$
|
46,462
|
|
|
$
|
(1,099)
|
|
|
(2)%
|
|
|
|
|
Data
|
|
32,473
|
|
|
|
26,166
|
|
|
|
6,307
|
|
|
24%
|
|
|
|
|
Network access
|
|
69,032
|
|
|
|
66,963
|
|
|
|
2,069
|
|
|
3%
|
|
|
|
|
Miscellaneous
|
|
10,518
|
|
|
|
10,068
|
|
|
|
450
|
|
|
4%
|
|
|
|
|
|
|
|
157,386
|
|
|
|
149,659
|
|
|
|
7,727
|
|
|
5%
|
|
|
|
Operating
expenses
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of services and products
(excluding
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Depreciation, amortization and
accretion
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
expense reported
below)
|
|
51,820
|
|
|
|
50,352
|
|
|
|
1,468
|
|
|
3%
|
|
|
|
|
Selling, general and
administrative expenses
|
|
43,195
|
|
|
|
41,397
|
|
|
|
1,798
|
|
|
4%
|
|
|
|
|
Depreciation, amortization and
accretion
|
|
37,528
|
|
|
|
35,652
|
|
|
|
1,876
|
|
|
5%
|
|
|
|
|
Loss on asset disposals,
net
|
|
312
|
|
|
|
1,072
|
|
|
|
(760)
|
|
|
(71)%
|
|
|
|
|
|
|
|
132,855
|
|
|
|
128,473
|
|
|
|
4,382
|
|
|
3%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating income
|
$
|
24,531
|
|
|
$
|
21,186
|
|
|
$
|
3,345
|
|
|
16%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Competitive Local Exchange
Carrier Operations
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenues
|
$
|
47,038
|
|
|
$
|
49,153
|
|
|
$
|
(2,115)
|
|
|
(4)%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Expenses (excluding
Depreciation, amortization
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
and accretion expense reported
below)
|
|
40,791
|
|
|
|
41,960
|
|
|
|
(1,169)
|
|
|
(3)%
|
|
|
|
|
Depreciation, amortization and
accretion
|
|
6,117
|
|
|
|
6,094
|
|
|
|
23
|
|
|
—
|
|
|
|
|
Loss on asset disposals,
net
|
|
78
|
|
|
|
63
|
|
|
|
15
|
|
|
24%
|
|
|
|
|
|
|
|
46,986
|
|
|
|
48,117
|
|
|
|
(1,131)
|
|
|
(2)%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating income
|
$
|
52
|
|
|
$
|
1,036
|
|
|
$
|
(984)
|
|
|
(95)%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Intercompany revenues
|
$
|
(2,394)
|
|
|
$
|
(2,270)
|
|
|
$
|
(124)
|
|
|
(5)%
|
|
|
|
Intercompany expenses
|
|
(2,394)
|
|
|
|
(2,270)
|
|
|
|
(124)
|
|
|
(5)%
|
|
|
|
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total TDS Telecom operating
income
|
$
|
24,583
|
|
|
$
|
22,222
|
|
|
$
|
2,361
|
|
|
11%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
TDS Telecom
Highlights
|
|
|
|
|
|
Nine Months
Ended September 30,
|
|
|
|
|
|
(Unaudited,
dollars in thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Increase
(Decrease)
|
|
|
|
|
|
|
2010
|
|
|
2009
|
|
|
Amount
|
|
Percent
|
|
|
|
Local Telephone
Operations
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating
revenues
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Voice
|
$
|
135,659
|
|
|
$
|
141,919
|
|
|
$
|
(6,260)
|
|
|
(4)%
|
|
|
|
|
Data
|
|
92,764
|
|
|
|
76,717
|
|
|
|
16,047
|
|
|
21%
|
|
|
|
|
Network access
|
|
203,925
|
|
|
|
201,912
|
|
|
|
2,013
|
|
|
1%
|
|
|
|
|
Miscellaneous
|
|
29,452
|
|
|
|
27,506
|
|
|
|
1,946
|
|
|
7%
|
|
|
|
|
|
|
|
461,800
|
|
|
|
448,054
|
|
|
|
13,746
|
|
|
3%
|
|
|
|
Operating
expenses
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of services and products
(excluding
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Depreciation, amortization and
accretion
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
expense reported
below)
|
|
147,614
|
|
|
|
146,442
|
|
|
|
1,172
|
|
|
1%
|
|
|
|
|
Selling, general and
administrative expenses
|
|
129,099
|
|
|
|
127,509
|
|
|
|
1,590
|
|
|
1%
|
|
|
|
|
Depreciation, amortization and
accretion
|
|
111,433
|
|
|
|
107,040
|
|
|
|
4,393
|
|
|
4%
|
|
|
|
|
Loss on asset disposals,
net
|
|
344
|
|
|
|
1,493
|
|
|
|
(1,149)
|
|
|
(77)%
|
|
|
|
|
|
|
|
388,490
|
|
|
|
382,484
|
|
|
|
6,006
|
|
|
2%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating income
|
$
|
73,310
|
|
|
$
|
65,570
|
|
|
$
|
7,740
|
|
|
12%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Competitive Local Exchange
Carrier Operations
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenues
|
$
|
142,106
|
|
|
$
|
150,435
|
|
|
$
|
(8,329)
|
|
|
(6)%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Expenses (excluding
Depreciation, amortization
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
and accretion expense reported
below)
|
|
121,294
|
|
|
|
129,816
|
|
|
|
(8,522)
|
|
|
(7)%
|
|
|
|
|
Depreciation, amortization and
accretion
|
|
18,784
|
|
|
|
18,232
|
|
|
|
552
|
|
|
3%
|
|
|
|
|
Loss on asset disposals,
net
|
|
323
|
|
|
|
259
|
|
|
|
64
|
|
|
25%
|
|
|
|
|
|
|
|
140,401
|
|
|
|
148,307
|
|
|
|
(7,906)
|
|
|
(5)%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating income
|
$
|
1,705
|
|
|
$
|
2,128
|
|
|
$
|
(423)
|
|
|
(20)%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Intercompany revenues
|
$
|
(7,165)
|
|
|
$
|
(6,685)
|
|
|
$
|
(480)
|
|
|
(7)%
|
|
|
|
Intercompany expenses
|
|
(7,165)
|
|
|
|
(6,685)
|
|
|
|
(480)
|
|
|
(7)%
|
|
|
|
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total TDS Telecom operating
income
|
$
|
75,015
|
|
|
$
|
67,698
|
|
|
$
|
7,317
|
|
|
11%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Telephone
and Data Systems, Inc.
|
|
|
Consolidated
Statement of Cash Flows
|
|
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Nine Months
Ended
|
|
|
|
|
|
September
30,
|
|
|
|
|
|
2010
|
|
|
2009 (1)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(Dollars in
thousands)
|
|
|
|
Cash flows from operating
activities
|
|
|
|
|
|
|
|
|
|
Net income
|
$
|
167,241
|
|
|
$
|
230,429
|
|
|
|
Add (deduct) adjustments to
reconcile net income to net cash flows
|
|
|
|
|
|
|
|
|
|
|
from operating
activities
|
|
|
|
|
|
|
|
|
|
|
|
Depreciation, amortization and
accretion
|
|
570,619
|
|
|
|
557,218
|
|
|
|
|
|
Bad debts expense
|
|
61,087
|
|
|
|
78,941
|
|
|
|
|
|
Stock-based compensation
expense
|
|
26,055
|
|
|
|
24,523
|
|
|
|
|
|
Deferred income taxes,
net
|
|
55,102
|
|
|
|
29,157
|
|
|
|
|
|
Equity in earnings of
unconsolidated entities
|
|
(75,047)
|
|
|
|
(67,034)
|
|
|
|
|
|
Distributions from
unconsolidated entities
|
|
59,519
|
|
|
|
51,668
|
|
|
|
|
|
Loss on asset disposals,
net
|
|
9,023
|
|
|
|
10,462
|
|
|
|
|
|
Other operating
activities
|
|
4,645
|
|
|
|
2,114
|
|
|
|
|
Changes in assets and
liabilities from operations
|
|
|
|
|
|
|
|
|
|
|
|
Accounts receivable
|
|
(48,891)
|
|
|
|
(107,254)
|
|
|
|
|
|
Inventory
|
|
32,571
|
|
|
|
(3,595)
|
|
|
|
|
|
Accounts payable
|
|
(49,034)
|
|
|
|
(29,401)
|
|
|
|
|
|
Customer deposits and deferred
revenues
|
|
2,363
|
|
|
|
(4,936)
|
|
|
|
|
|
Accrued taxes
|
|
(42,843)
|
|
|
|
88,098
|
|
|
|
|
|
Accrued interest
|
|
9,343
|
|
|
|
9,893
|
|
|
|
|
|
Other assets and
liabilities
|
|
(16,973)
|
|
|
|
(70,332)
|
|
|
|
|
|
|
|
764,780
|
|
|
|
799,951
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash flows from investing
activities
|
|
|
|
|
|
|
|
|
|
Additions to property, plant and
equipment
|
|
(486,138)
|
|
|
|
(450,594)
|
|
|
|
Cash paid for acquisitions and
licenses
|
|
(28,264)
|
|
|
|
(15,242)
|
|
|
|
Cash paid for
investments
|
|
(433,750)
|
|
|
|
(109,055)
|
|
|
|
Cash received for
investments
|
|
40,765
|
|
|
|
---
|
|
|
|
Other investing
activities
|
|
1,681
|
|
|
|
3,335
|
|
|
|
|
|
|
|
(905,706)
|
|
|
|
(571,556)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash flows from financing
activities
|
|
|
|
|
|
|
|
|
|
Repayment of long-term
debt
|
|
(2,182)
|
|
|
|
(2,507)
|
|
|
|
TDS Common Shares and Special
Common Shares reissued for benefit plans,
|
|
|
|
|
|
|
|
|
|
|
net of tax payments
|
|
1,183
|
|
|
|
1,296
|
|
|
|
U.S. Cellular Common Shares
reissued for benefit plans, net of tax payments
|
|
738
|
|
|
|
(119)
|
|
|
|
Repurchase of TDS Special Common
Shares
|
|
(50,543)
|
|
|
|
(152,918)
|
|
|
|
Repurchase of U.S. Cellular
Common Shares
|
|
(40,520)
|
|
|
|
(24,283)
|
|
|
|
Dividends paid
|
|
(35,502)
|
|
|
|
(35,389)
|
|
|
|
Payment of debt issuance
costs
|
|
---
|
|
|
|
(10,074)
|
|
|
|
Distributions to noncontrolling
interests
|
|
(5,828)
|
|
|
|
(4,962)
|
|
|
|
Other financing
activities
|
|
(7,404)
|
|
|
|
1,411
|
|
|
|
|
|
|
|
(140,058)
|
|
|
|
(227,545)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net increase (decrease) in cash
and cash equivalents
|
|
(280,984)
|
|
|
|
850
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash and cash
equivalents
|
|
|
|
|
|
|
|
|
|
Beginning of period
|
|
670,992
|
|
|
|
777,309
|
|
|
|
End of period
|
$
|
390,008
|
|
|
$
|
778,159
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
Amounts have been adjusted. See
"Revision of Prior Period Amounts" section for additional
details.
|
|
|
|
|
Telephone
and Data Systems, Inc.
|
|
|
Financial
Measures and Reconciliations
|
|
|
(Unaudited,
dollars in thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended September 30,
2010
|
|
U.S.
Cellular
|
|
TDS Telecom
(1)
|
|
All Other
(2)
|
|
Consolidated
Total
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating
revenues
|
|
$
1,060,781
|
|
$
202,030
|
|
$ 3,605
|
|
$ 1,266,416
|
|
|
Deduct:
|
|
|
|
|
|
|
|
|
|
|
U.S. Cellular equipment
sales revenue
|
|
77,278
|
|
|
|
|
|
|
|
|
Service
revenues
|
|
$
983,503
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating income
|
|
$
59,833
|
|
$
24,583
|
|
$ (1,255)
|
|
$
83,161
|
|
|
Add:
|
|
|
|
|
|
|
|
|
|
|
Depreciation, amortization
and accretion
|
|
144,717
|
|
43,645
|
|
2,610
|
|
190,972
|
|
|
Loss on asset
disposals
|
|
1,981
|
|
390
|
|
7
|
|
2,378
|
|
|
Adjusted
OIBDA (3)(6)
|
|
$
206,531
|
|
$
68,618
|
|
$ 1,362
|
|
$ 276,511
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted
OIBDA margin (4)
|
|
21.0%
|
|
34.0%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended September 30,
2009
|
|
U.S.
Cellular (7)
|
|
TDS Telecom
(1)
|
|
All Other
(2)
|
|
Consolidated
Total (7)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating
revenues
|
|
$ 1,057,295
|
|
$
196,542
|
|
$ 3,900
|
|
$1,257,737
|
|
|
Deduct:
|
|
|
|
|
|
|
|
|
|
|
U.S. Cellular equipment
sales revenue
|
|
73,377
|
|
|
|
|
|
|
|
|
Service
revenues
|
|
$
983,918
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating income
|
|
$59,548
|
|
$
22,222
|
|
$(2,251)
|
|
$
79,519
|
|
|
Add (Deduct):
|
|
|
|
|
|
|
|
|
|
|
Depreciation, amortization
and accretion
|
|
146,052
|
|
41,746
|
|
2,915
|
|
190,713
|
|
|
Loss on asset
disposals
|
|
2,085
|
|
1,135
|
|
51
|
|
3,271
|
|
|
Adjusted
OIBDA (3)(6)
|
|
$
207,685
|
|
$
65,103
|
|
$ 715
|
|
$ 273,503
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted
OIBDA margin (4)
|
|
21.1%
|
|
33.1%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
TDS
Consolidated
|
|
|
|
|
|
|
Three Months Ended September
30,
|
|
2010
|
|
2009
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash flows from operating
activities
|
|
$
262,434
|
|
$
355,990
|
|
|
|
|
|
|
Deduct:
|
|
|
|
|
|
|
|
|
|
|
Capital
expenditures
|
|
168,188
|
|
159,773
|
|
|
|
|
|
|
Free cash
flow (5)
|
|
$
94,246
|
|
$
196,217
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
See footnotes defined on next
page.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Telephone
and Data Systems, Inc.
|
|
|
Financial
Measures and Reconciliation
|
|
|
(Unaudited,
dollars in thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Nine Months Ended September 30,
2010
|
|
U.S.
Cellular
|
|
TDS Telecom
(1)
|
|
All Other
(2)
|
|
Consolidated
Total
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating
revenues
|
|
$3,114,531
|
|
$596,741
|
|
$ 9,798
|
|
$3,721,070
|
|
|
Deduct:
|
|
|
|
|
|
|
|
|
|
|
U.S. Cellular equipment
sales revenue
|
|
193,444
|
|
|
|
|
|
|
|
|
Service
revenues
|
|
$2,921,087
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating income
|
|
$ 200,961
|
|
$ 75,015
|
|
$(4,438)
|
|
$ 271,538
|
|
|
Add:
|
|
|
|
|
|
|
|
|
|
|
Depreciation, amortization
and accretion
|
|
432,405
|
|
130,217
|
|
7,997
|
|
570,619
|
|
|
(Gain) Loss on asset
disposals
|
|
8,407
|
|
667
|
|
(51)
|
|
9,023
|
|
|
Adjusted
OIBDA (3)(6)
|
|
$ 641,773
|
|
$205,899
|
|
$ 3,508
|
|
$ 851,180
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted
OIBDA margin (4)
|
|
22.0%
|
|
34.5%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Nine Months Ended September 30,
2009
|
|
U.S.
Cellular (7)
|
|
TDS Telecom
(1)(7)
|
|
All Other
(2)
|
|
Consolidated
Total (7)
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating
revenues
|
|
$3,153,782
|
|
$591,804
|
|
$12,447
|
|
$3,758,033
|
|
|
Deduct:
|
|
|
|
|
|
|
|
|
|
|
U.S. Cellular equipment
sales revenue
|
|
212,062
|
|
|
|
|
|
|
|
|
Service
revenues
|
|
$2,941,720
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating income
|
|
$ 316,755
|
|
$ 67,698
|
|
$(11,687)
|
|
$ 372,766
|
|
|
Add (Deduct):
|
|
|
|
|
|
|
|
|
|
|
Depreciation, amortization
and accretion
|
|
422,707
|
|
125,272
|
|
9,239
|
|
557,218
|
|
|
Loss on asset
disposals
|
|
8,641
|
|
1,752
|
|
69
|
|
10,462
|
|
|
Adjusted
OIBDA (3)(6)
|
|
$ 748,103
|
|
$194,722
|
|
$(2,379)
|
|
$ 940,446
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted
OIBDA margin (4)
|
|
25.4%
|
|
32.9%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
TDS
Consolidated
|
|
|
|
|
|
|
Nine Months Ended September
30,
|
|
2010
|
|
2009
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash flows from operating
activities
|
|
$ 764,780
|
|
$799,951
|
|
|
|
|
|
|
Deduct:
|
|
|
|
|
|
|
|
|
|
|
Capital
expenditures
|
|
486,138
|
|
450,594
|
|
|
|
|
|
|
Free cash
flow (5)
|
|
$ 278,642
|
|
$349,357
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
Includes ILEC and CLEC
intercompany eliminations.
|
|
|
(2)
|
Consists of a non-reportable
segment (Suttle-Straus), corporate operations, intercompany
eliminations between U.S. Cellular, TDS Telecom and corporate
investments. Amounts in this column are presented only to reconcile
to consolidated totals and may not otherwise be
meaningful.
|
|
|
(3)
|
Adjusted OIBDA is a segment
measure reported to the chief operating decision maker for purposes
of making decisions about allocating resources to the segments and
assessing their performance. Adjusted OIBDA is defined as
operating income excluding the effects of: depreciation,
amortization and accretion (OIBDA); the net gain or loss on asset
disposals (if any); and the loss on impairment of assets (if
any). This measure also may be commonly referred to by
management as operating cash flow. This measure should not be
confused with cash flows from operating activities, which is a
component of the consolidated statement of cash flows.
|
|
|
(4)
|
Adjusted OIBDA margin is defined
as adjusted OIBDA divided by service revenues (U.S. Cellular) and
operating revenues (TDS Telecom). Equipment revenues are
excluded from the denominator of the U.S. Cellular calculation
since equipment is generally sold at a net negative margin, and the
equipment subsidy is effectively a cost for purposes of assessing
business results. TDS believes that this calculation
method is consistent with the method used by certain investors to
assess U.S. Cellular's business results. Adjusted OIBDA
margin may also be commonly referred to by management as operating
cash flow margin.
|
|
|
(5)
|
Free cash flow is defined as
cash flows from operating activities minus capital expenditures.
Free cash flow is a non-GAAP financial measure. TDS believes
that free cash flow as reported by TDS is useful to investors and
other users of its financial information in evaluating the amount
of cash generated by business operations, after consideration of
capital expenditures.
|
|
|
(6)
|
Adjusted OIBDA excludes the net
gain or loss on asset disposals and loss on impairment of assets,
if any, in order to show operating results on a more comparable
basis from period to period. TDS does not intend to imply that any
of such amounts that are excluded are non-recurring, infrequent or
unusual, and accordingly, they may be incurred in the
future.
|
|
|
(7)
|
Amounts have been adjusted. See
"Revision of Prior Period Amounts" section for additional details.
|
|
|
|
Revision of Prior Period Amounts
In preparing its financial statements for the three months ended
March 31, 2010, TDS discovered
certain errors related to accounting for operating revenues and
sales tax liabilities. The quantification of these errors was
subsequently refined during the second quarter of 2010. These
errors resulted in the overstatement of operating revenues and
understatement of sales tax liabilities for the years ended
December 31, 2009, 2008, 2007, and
the three months ended March 31,
2010. In addition to recording these adjustments, TDS
recorded other adjustments to prior-year amounts to correct other
immaterial items. In accordance with SEC Staff Accounting
Bulletin Nos. 99 and 108 ("SAB 99 and SAB 108"), TDS evaluated
these errors and determined that they were immaterial to each of
the reporting periods affected and, therefore, amendment of
previously filed reports was not required. However, if the
adjustments to correct the cumulative errors had been recorded in
the first or second quarter of 2010, TDS believes the impact would
have been significant to those respective periods and would impact
comparisons to prior periods. As permitted by SAB 108, TDS revised
in the current filing its comparative consolidated financial
statements for these immaterial amounts. In addition, on
August 5, 2010, TDS filed a Current
Report on Form 8-K (Items 8.01 and 9.01) with the SEC to revise
financial statements and other financial information previously
included in its Annual Report on Form 10-K for the year ended
December 31, 2009 and Quarterly
Report on Form 10-Q for the period ended March 31, 2010. Such Form 8-K contains
revisions to the December 31, 2009
Consolidated Balance Sheet, originally filed on February 25, 2010 in TDS' Annual Report on Form
10-K. Also, in accordance with SAB 108, the Consolidated
Balance Sheet, the Consolidated Statement of Operations and the
Consolidated Statement of Cash Flows for the following comparative
periods have been revised as follows:
|
|
|
Consolidated Balance Sheet —
September 30, 2009
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(Dollars in
thousands)
|
As
previously
reported
(1)
|
|
Adjustment
|
|
Revised
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Accounts receivable from
customers and others
|
$
|
384,213
|
|
|
$
|
3,817
|
|
|
$
|
388,030
|
|
|
Prepaid expenses
|
|
95,677
|
|
|
|
8,413
|
|
|
|
104,090
|
|
|
Total current
assets
|
|
1,778,024
|
|
|
|
12,230
|
|
|
|
1,790,254
|
|
|
Total assets
|
|
7,733,175
|
|
|
|
12,230
|
|
|
|
7,745,405
|
|
|
Customer deposits and deferred
revenues
|
|
170,493
|
|
|
|
(2,241)
|
|
|
|
168,252
|
|
|
Accrued taxes
|
|
66,661
|
|
|
|
23,193
|
|
|
|
89,854
|
|
|
Total current
liabilities
|
|
773,824
|
|
|
|
20,952
|
|
|
|
794,776
|
|
|
Other deferred liabilities and
credits
|
|
384,032
|
|
|
|
1,314
|
|
|
|
385,346
|
|
|
Total deferred liabilities and
credits
|
|
883,034
|
|
|
|
1,314
|
|
|
|
884,348
|
|
|
Retained earnings
|
|
2,370,595
|
|
|
|
(8,218)
|
|
|
|
2,362,377
|
|
|
Total TDS shareholders'
equity
|
|
3,774,363
|
|
|
|
(8,218)
|
|
|
|
3,766,145
|
|
|
Noncontrolling
interests
|
|
679,422
|
|
|
|
(1,818)
|
|
|
|
677,604
|
|
|
Total equity
|
|
4,454,630
|
|
|
|
(10,036)
|
|
|
|
4,444,594
|
|
|
Total liabilities and
equity
|
|
7,733,175
|
|
|
|
12,230
|
|
|
|
7,745,405
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Consolidated Statement of
Operations -- Three Months Ended September 30, 2009
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(Dollars in thousands, except
per share amounts)
|
As
previously
reported
(1)
|
|
Adjustment
|
|
Revised
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating
revenues
|
$
|
1,258,742
|
|
|
$
|
(1,005)
|
|
|
$
|
1,257,737
|
|
|
Cost of services and products
(Excluding Depreciation,
|
|
|
|
|
|
|
|
|
|
|
|
|
amortization and
accretion)
|
|
477,116
|
|
|
|
153
|
|
|
|
477,269
|
|
|
Selling, general and
administrative expenses
|
|
507,159
|
|
|
|
(194)
|
|
|
|
506,965
|
|
|
Depreciation, amortization and
accretion
|
|
192,247
|
|
|
|
(1,534)
|
|
|
|
190,713
|
|
|
Loss on asset disposals,
net
|
|
4,557
|
|
|
|
(1,286)
|
|
|
|
3,271
|
|
|
Total operating
expenses
|
|
1,181,079
|
|
|
|
(2,861)
|
|
|
|
1,178,218
|
|
|
Operating income
|
|
77,663
|
|
|
|
1,856
|
|
|
|
79,519
|
|
|
Interest expense
|
|
(30,430)
|
|
|
|
(424)
|
|
|
|
(30,854)
|
|
|
Total investment and other
income (expense)
|
|
(2,605)
|
|
|
|
(424)
|
|
|
|
(3,029)
|
|
|
Income before income
taxes
|
|
75,058
|
|
|
|
1,432
|
|
|
|
76,490
|
|
|
Income tax expense
|
|
27,793
|
|
|
|
538
|
|
|
|
28,331
|
|
|
Net income
|
|
47,265
|
|
|
|
894
|
|
|
|
48,159
|
|
|
Net income attributable to
noncontrolling interests, net of tax
|
|
(11,620)
|
|
|
|
236
|
|
|
|
(11,384)
|
|
|
Net income attributable to TDS
shareholders
|
|
35,645
|
|
|
|
1,130
|
|
|
|
36,775
|
|
|
Net income available to common
shareholders
|
|
35,632
|
|
|
|
1,130
|
|
|
|
36,762
|
|
|
Basic earnings per share
attributable to TDS shareholders
|
|
0.33
|
|
|
|
0.01
|
|
|
|
0.34
|
|
|
Diluted earnings per share
attributable to TDS shareholders
|
|
0.33
|
|
|
|
0.01
|
|
|
|
0.34
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Consolidated Statement of
Operations — Nine Months Ended September 30, 2009
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(Dollars in thousands, except
per share amounts)
|
As
previously
reported
(1)
|
|
Adjustment
|
|
Revised
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating
revenues
|
$
|
3,757,865
|
|
|
$
|
168
|
|
|
$
|
3,758,033
|
|
|
Cost of services and products
(Excluding Depreciation,
|
|
|
|
|
|
|
|
|
|
|
|
|
amortization and
accretion)
|
|
1,375,642
|
|
|
|
41
|
|
|
|
1,375,683
|
|
|
Selling, general and
administrative expenses
|
|
1,445,920
|
|
|
|
(4,016)
|
|
|
|
1,441,904
|
|
|
Depreciation, amortization and
accretion
|
|
558,362
|
|
|
|
(1,144)
|
|
|
|
557,218
|
|
|
Loss on asset disposals,
net
|
|
9,469
|
|
|
|
993
|
|
|
|
10,462
|
|
|
Total operating
expenses
|
|
3,389,393
|
|
|
|
(4,126)
|
|
|
|
3,385,267
|
|
|
Operating income
|
|
368,472
|
|
|
|
4,294
|
|
|
|
372,766
|
|
|
Interest expense
|
|
(92,780)
|
|
|
|
(1,118)
|
|
|
|
(93,898)
|
|
|
Total investment and other
income (expense)
|
|
(15,807)
|
|
|
|
(1,118)
|
|
|
|
(16,925)
|
|
|
Income before income
taxes
|
|
352,665
|
|
|
|
3,176
|
|
|
|
355,841
|
|
|
Income tax expense
|
|
121,467
|
|
|
|
3,945
|
|
|
|
125,412
|
|
|
Net income
|
|
231,198
|
|
|
|
(769)
|
|
|
|
230,429
|
|
|
Net income attributable to
noncontrolling interests, net of tax
|
|
(53,814)
|
|
|
|
621
|
|
|
|
(53,193)
|
|
|
Net income attributable to TDS
shareholders
|
|
177,384
|
|
|
|
(148)
|
|
|
|
177,236
|
|
|
Net income available to common
shareholders
|
|
177,346
|
|
|
|
(148)
|
|
|
|
177,198
|
|
|
Basic earnings per share
attributable to TDS shareholders
|
|
1.61
|
|
|
|
(0.01)
|
|
|
|
1.60
|
|
|
Diluted earnings per share
attributable to TDS shareholders
|
|
1.60
|
|
|
|
—
|
|
|
|
1.60
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Consolidated Statement of Cash
Flows — Nine Months Ended September 30, 2009
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
As
previously
reported
(1)
|
|
Adjustment
|
|
Revised
|
|
|
(Dollars in
thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income
|
$
|
231,198
|
|
|
$
|
(769)
|
|
|
$
|
230,429
|
|
|
Depreciation, amortization and
accretion
|
|
558,362
|
|
|
|
(1,144)
|
|
|
|
557,218
|
|
|
Deferred income taxes,
net
|
|
25,935
|
|
|
|
3,222
|
|
|
|
29,157
|
|
|
Loss on asset disposals,
net
|
|
9,469
|
|
|
|
993
|
|
|
|
10,462
|
|
|
Change in accounts
receivable
|
|
(102,137)
|
|
|
|
(5,117)
|
|
|
|
(107,254)
|
|
|
Change in customer deposits and
deferred revenues
|
|
(3,609)
|
|
|
|
(1,327)
|
|
|
|
(4,936)
|
|
|
Change in accrued
taxes
|
|
82,267
|
|
|
|
5,831
|
|
|
|
88,098
|
|
|
Change in other assets and
liabilities
|
|
(68,643)
|
|
|
|
(1,689)
|
|
|
|
(70,332)
|
|
|
Cash flows from operating
activities
|
|
799,951
|
|
|
|
—
|
|
|
|
799,951
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
In Quarterly Report on Form 10-Q
for the period ended September 30, 2009 filed on November 5,
2009.
|
|
|
|
SOURCE Telephone and Data Systems, Inc.