News Details

View all news

TDS Reports Second Quarter 2009 Results

08/06/2009

As previously announced, TDS(TM) will hold a teleconference Aug. 6, 2009 at 10:00 a.m. Chicago time. Interested parties may listen to the call live by accessing the conference calls page of www.teldta.com.

CHICAGO, Aug. 6 /PRNewswire-FirstCall/ --

Note: Comparisons are year over year unless otherwise noted.

2Q 2009 Highlights

Enterprise/TDS Corporate
  • Operating revenues were $1,242.5 million.
  • 3 percent increase in operating income, to $154.6 million.
  • Repurchased 2,684,267 TDS special common shares for $73.9 million.
Wireless/U.S. Cellular
  • Service revenues were $974.8 million, which includes a $22.0 million loss in inbound roaming revenues.
  • 31 percent increase in data revenues, to $162.0 million, representing 17 percent of service revenues.
  • ARPU (average monthly service revenue per unit) was $52.41.
  • 20 percent increase in operating income, to $140.9 million.
  • Postpay churn was 1.7 percent; postpay customers comprised 95 percent of retail customers.
  • 7 percent increase in cell sites in service, to 7,043.
  • Repurchased 140,000 common shares for $6.0 million to offset dilution from employee benefit plans.
Wireline/TDS Telecom
  • 20 percent increase in ILEC high-speed data customers, to 197,100; CLEC high-speed data customers totaled 38,700.
  • 17 percent increase in ILEC data revenues, to $25.5 million.
  • ILEC equivalent access lines increased less than 1 percent to 775,800, due in part to acquisitions; ILEC physical access lines decreased to 548,000.

Telephone and Data Systems, Inc. (NYSE: TDS, TDS.S) reported operating revenues of $1,242.5 million for the second quarter of 2009, a decrease of 3 percent from $1,274.4 million in the comparable period one year ago. The company recorded operating income of $154.6 million, up 3 percent from $149.7 million in the second quarter of 2008.

"These are challenging times for the national economy and for many of our customers," said LeRoy T. Carlson, Jr. , TDS president and CEO. "In many of our markets, unemployment is high and some customers are seeking to economize on their communications services. While TDS' revenue was down modestly in the quarter, the company increased its operating income by controlling spending. TDS remains very strong financially, with more than $800 million in cash and short-term investments, some of which the company is using to repurchase TDS shares.

"Data services continue to be a focal point for growth at U.S. Cellular and TDS Telecom," continued Carlson. "Data revenue at U.S. Cellular grew 31 percent, despite a net loss of retail customers. Operating income also increased, overcoming an expected and sizeable reduction in inbound roaming revenue. U.S. Cellular continues to invest in a more data-centric future by expanding its 3G network, which will reach 70 percent of its customers by year end. The company is also making progress on several major, long-term growth initiatives, which are expected to create deeper customer relationships through improved billing and operational support, a new customer relationship management system, and an updated online sales and support platform.

"TDS Telecom is making good progress on its strategy of being the preferred broadband provider in its markets," added Carlson. "The ILEC achieved 20 percent growth in high-speed data customers and a 17 percent increase in related revenue. While TDS Telecom continues to experience a decline in physical access lines, the company is moderating the impact of this trend by making significant gains in the number of customers who have its triple play bundles of voice, high-speed data, and DISH Network services. Triple play customers are much less likely to churn than customers with fewer services. Additionally, TDS Telecom is expanding the availability of its managedIP hosted services, and the company now has 7600 stations in service providing data and voice communications solutions."

Equity in earnings of unconsolidated entities

In the quarter, TDS recorded a $7.1 million loss on impairment related to a decline in the fair value of an equity method investment. The loss is recorded in Equity in earnings of unconsolidated entities on the consolidated statement of operations.

Guidance

Guidance for the year ending Dec. 31, 2009 is as follows. There can be no assurance that final results will not differ materially from this guidance.

    U.S. Cellular 2009 guidance as of Aug. 6, 2009 is as follows:
        Net retail customer additions(1)                          ---
        Service revenue                                 $3,900-$3,950 million
        Operating income(2)                                 $300-$375 million
        Depreciation, amortization and accretion(2)      Approx. $600 million
        Capital expenditures                             Approx. $575 million

    TDS Telecom (ILEC and CLEC) 2009 guidance as of Aug. 6, 2009 is as
     follows:
        Operating revenues                                  $775-$800 million
        Operating income(2)                                  $85-$105 million
        Depreciation, amortization and accretion(2)      Approx. $165 million
        Capital expenditures                             Approx. $125 million

    (1) U.S. Cellular has withdrawn its net retail customer additions
        guidance for the remainder of 2009 due to uncertainty related to
        the weak economy and consumer purchasing intentions.

    (2) Includes losses on disposals of assets.

This guidance represents the views of management as of Aug. 6, 2009 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 both TDS common shares and TDS special common shares.

              Repurchase Period         # Shares    Cost (in millions)
              -----------------         --------    -----------------
              2009 (second quarter)    2,684,267         $73.9

              2009 (first quarter)       504,026         $12.1
              2008 (full year)         5,861,822        $199.6
                                       ---------        ------
              Total 2009 and 2008      9,050,115        $285.6
                                       =========        ======

Conference call information

TDS will hold a conference call on Aug. 6, 2009 at 10:00 a.m. Chicago time.

    --  Access the live call on the Conference Calls page of www.teldta.com or
        at
        http://phx.corporate-ir.net/phoenix.zhtml?p=irol-eventDetails&c=67422&
        eventID=2355543

    --  Access the call by phone at 800/706-9695 (US/Canada) and use
        conference ID #22679990.

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, together with reconciliations to generally accepted accounting principles (GAAP) of any non-GAAP information to be disclosed. 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 7.3 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 12,400 people as of June 30, 2009. For more information about TDS, visit www.teldta.com.

About U.S. Cellular

United States Cellular Corporation, the nation's fifth-largest, full-service wireless carrier, provides a comprehensive range of wireless products and services, excellent customer support, and a high-quality network to approximately 6.2 million customers in 26 states. The Chicago-based company employed 8,700 full-time equivalent associates as of June 30, 2009. For more information about U.S. Cellular, visitwww.uscellular.com.

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 current credit crisis affecting financial markets, and its effects on 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
    USM: www.uscellular.com
    TDS Telecom: www.tdstelecom.com

                           UNITED STATES CELLULAR CORPORATION
                                 SUMMARY OPERATING DATA

    Quarter Ended   6/30/2009   3/31/2009  12/31/2008   9/30/2008  6/30/2008
    -------------   ---------   ---------  ----------   ---------  ---------
    Total Population:
      Consolidated
       markets(1)  83,726,000  83,726,000  83,014,000  82,875,000  82,875,000
      Consolidated
       operating
       markets(1)  46,306,000  46,306,000  46,009,000  45,493,000  45,493,000
    All customers:
      Total at end
       of period    6,155,000   6,243,000   6,196,000   6,176,000   6,194,000
      Gross
       additions      317,000     404,000     395,000     367,000     365,000
      Net additions
       (losses)       (88,000)     47,000      20,000     (18,000)     16,000
    Market penetration
     at end of period:
      Consolidated
       markets(2)         7.4%        7.5%        7.5%        7.5%        7.5%
      Consolidated
       operating
       markets(2)        13.3%       13.5%       13.5%       13.6%       13.6%
    Retail customers:
      Total at end
       of period    5,711,000   5,770,000   5,707,000   5,674,000   5,677,000
      Gross
       additions      286,000     366,000     352,000     325,000     318,000
      Net postpay
       additions
       (losses)       (32,000)     60,000      41,000      12,000      33,000
      Net prepay
       additions
       (losses)       (27,000)      3,000      (8,000)    (15,000)      1,000

    Cell sites in
     service            7,043       6,942       6,877       6,716       6,596
    Average monthly
     revenue per
     unit(3)           $52.41      $52.54      $52.71      $54.59      $53.27
      Retail service
       revenue per
       unit(3) (5)     $46.85      $46.78      $46.43      $46.97      $46.53
      Inbound
       roaming
       revenue per
       unit(3) (5)      $3.35       $3.21       $4.25       $5.03       $4.54
      Other revenue
       per unit(3) (5)  $2.21       $2.55       $2.03       $2.59       $2.20
     Postpay churn
      rate(4)             1.7%        1.5%        1.6%        1.6%        1.4%
     Construction
      expenditures
      (000s)          $91,200    $137,700    $190,000    $146,100    $137,800


    (1) "Total population of consolidated markets" and "Total population of
        consolidated operating markets" are used only for the purposes of
        calculating 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) Per unit revenue measurements are derived from Service Revenues as
        reported in Financial Highlights for each respective quarter as
        follows:

    Service revenue
      (000s)         $974,755    $981,874    $976,952  $1,013,928    $987,352
    Components:
    Retail service
     revenue (000s)   871,209     874,098     860,503     872,397     862,392
    Inbound roaming
     revenue (000s)    62,223      60,057      78,768      93,472      84,201
    Other revenue
     (000s)            41,323      47,719      37,681      48,059      40,759

    Divided by average
     customers (000s)   6,199       6,229       6,178       6,191       6,178
    Divided by three
     months in each
     quarter                3           3           3           3           3
                          ---         ---         ---         ---         ---

    Average monthly
     revenue per unit  $52.41      $52.54      $52.71      $54.59      $53.27
    Retail service
     revenue per unit  $46.85      $46.78      $46.43      $46.97      $46.53
    Inbound roaming
     revenue per unit   $3.35       $3.21       $4.25       $5.03       $4.54
    Other revenue per
     unit               $2.21       $2.55       $2.03       $2.59       $2.20


    (4) Postpay churn rate is calculated by dividing the total postpay
        customer disconnects during the quarter by the average postpay
        customer base for the quarter.

    (5) Long-distance revenue was reclassified in the fourth quarter of 2008
        from Other revenue to Retail service revenue and Inbound roaming
        revenue.  Previous quarters have been adjusted to reflect this change.


                          TELEPHONE AND DATA SYSTEMS, INC.
                               SUMMARY OPERATING DATA

     Quarter Ended      6/30/2009 3/31/2009 12/31/2008 9/30/2008 6/30/2008
     TDS Telecom
         ILEC:
         Equivalent
          access
          lines(1)        775,800   777,100    776,700   773,700   774,300
         Physical
          access
          lines(2)        548,000   556,800    566,200   568,900   577,000
         High-speed
          data
          customers(3)    197,100   188,100    178,300   171,300   164,400
         Managed IP
          stations(4)       1,200     1,000        600       500       300
         Long-distance
          customers       354,100   348,900    347,000   346,600   346,100
         Construction
          expenditures
          (000s)          $26,200   $21,400    $50,200   $33,300   $22,800
         CLEC:
         Equivalent
          access lines(1) 372,300   381,000    393,000   402,600   417,200
         High-speed
          data
          customers        38,700    39,700     40,800    41,900    43,100
         Managed IP
          stations(4)       6,400     4,100      2,100       600       500
         Construction
          expenditures
          (000s)           $5,700    $5,000     $7,200    $4,500    $4,700

    (1) Equivalent access lines are the 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) A physical access line is the individual circuit connecting a customer
        to a telephone company's central office facilities.

    (3) High-speed data customers are 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) Managed IP stations are the number of telephone handsets providing
        communications using packet networking technology.

                          Telephone and Data Systems, Inc.
                   Consolidated Statement of Operations Highlights
                            Three Months Ended June 30,
        (Unaudited, dollars and shares in thousands, except per share amounts)

                                                  Increase/(Decrease)
                                2009       2008     Amount  Percent
                                ----       ----     ------  -------
     Operating revenues
        U.S. Cellular      $1,042,550  $1,060,592  $(18,042)  (2)%
        TDS Telecom           195,960     207,424   (11,464)  (6)%
        All Other(1)            3,967       6,335    (2,368) (37)%
                                -----       -----    ------
                            1,242,477   1,274,351   (31,874)  (3)%
                            ---------   ---------   -------
      Operating expenses
        U.S. Cellular
           Expenses
            excluding
            depreciation,
            amortization
            and accretion     760,931     791,213   (30,282)  (4)%
           Depreciation,
            amortization
            and accretion     138,614     145,258    (6,644)  (5)%
           Loss on asset
            disposals, net      2,086       6,219    (4,133) (66)%
                                -----       -----    ------
                              901,631     942,690   (41,059)  (4)%
                              -------     -------   -------
        TDS Telecom
           Expenses
            excluding
            depreciation,
            amortization
            and accretion     135,818     132,911     2,907    2%
           Depreciation,
            amortization
            and accretion      41,663      39,071     2,592    7%
           Loss on asset
            disposals, net        402         219       183   84%
                                  ---         ---       ---
                              177,883     172,201     5,682    3%
                              -------     -------     -----
        All Other(1)
           Expenses
            excluding
            depreciation
            and amortization    5,283       6,020      (737) (12)%
           Depreciation
            and amortization    3,072       3,697      (625) (17)%
           Loss on asset                                      N/M
            disposals, net          8           -         8
                                  ---         ---       ---
                                8,363       9,717    (1,354) (14)%
                                -----       -----    ------

              Total
               operating
               expenses     1,087,877   1,124,608   (36,731)  (3)%
                            ---------   ---------   -------
      Operating income (loss)
        U.S. Cellular         140,919     117,902    23,017   20 %
        TDS Telecom            18,077      35,223   (17,146) (49)%
        All Other (1)          (4,396)     (3,382)   (1,014) (30)%
                               ------      ------    ------
                              154,600     149,743     4,857    3%
                              -------     -------     -----
      Investment and
       other income
       (expense)
        Equity in
         earnings of
         unconsolidated
         entities              18,363      22,909    (4,546) (20)%
        Interest and
         dividend income        2,902      17,455   (14,553) (83)%
        Gain on
         investments and
         financial
         instruments                -       3,088    (3,088)  N/M
        Interest expense      (32,245)    (35,570)    3,325    9%
        Other, net                (25)      1,902    (1,927)  N/M
                                  ---       -----    ------
              Total investment
               and other income
               (expense)      (11,005)      9,784   (20,789)  N/M
                              -------       -----   -------
      Income before
       income taxes           143,595     159,527   (15,932) (10)%
        Income tax expense     53,036      53,261      (225)   -
                               ------      ------      ----
      Net income               90,559     106,266   (15,707) (15)%
        Less: Net income
         attributable to
         noncontrolling
         interests, net of
         tax                  (20,828)    (18,509)   (2,319) (13)%
                              -------     -------    ------
      Net income attributable
       to TDS                  69,731      87,757   (18,026) (21)%
        Preferred dividend
         requirement              (13)        (13)        -    -
                                  ---         ---       ---
      Net income available to
       common                 $69,718     $87,744  $(18,026) (21)%
                              =======     =======  ========

      Basic weighted
       average shares
       outstanding            110,741     116,267    (5,526)  (5)%
      Basic earnings per
       share attributable
       to TDS shareholders      $0.63       $0.75    $(0.12) (16)%

      Diluted weighted
       average shares
       outstanding            110,971     116,814    (5,843)  (5)%
      Diluted earnings
       per share attributable
       to TDS shareholders      $0.63       $0.75    $(0.12) (16)%


    (1) Consists of Suttle Straus printing and distribution operations,
        corporate operations and intercompany eliminations.

    N/M - Percentage change not meaningful

                          Telephone and Data Systems, Inc.
                   Consolidated Statements of Operations Highlights
                             Six Months Ended June 30,
        (Unaudited, dollars and shares in thousands, except per share amounts)

                                                           Increase/(Decrease)
                                       2009        2008     Amount   Percent
                                       ----        ----     ------   -------
     Operating revenues
        U.S. Cellular              $2,095,314  $2,098,448   $(3,134)    -
        TDS Telecom                   395,262     413,500   (18,238)   (4)%
        All Other(1)                    8,547      11,504    (2,957)  (26)%
                                        -----      ------    ------
                                    2,499,123   2,523,452   (24,329)   (1)%
                                    ---------   ---------  --------
      Operating expenses
        U.S. Cellular
           Expenses excluding
            depreciation,
            amortization and
            accretion               1,559,083   1,563,900    (4,817)    -
           Depreciation,
            amortization and
            accretion                 276,265     287,788   (11,523)   (4)%
           Loss on asset
            disposals, net              4,277       9,892    (5,615)  (57)%
                                        -----       -----    ------
                                    1,839,625   1,861,580   (21,955)   (1)%
                                    ---------   ---------  --------
        TDS Telecom
           Expenses excluding
            depreciation,
            amortization and
            accretion                 266,563     261,717     4,846     2%
           Depreciation,
            amortization and
            accretion                  83,526      78,579     4,947     6%
           Loss on asset
            disposals, net                617         198       419   N/M
                                          ---         ---       ---
                                      350,706     340,494    10,212     3%
                                      -------     -------    ------
        All Other(1)
           Expenses excluding
            depreciation and
            amortization               11,641      10,209     1,432    14%
           Depreciation and
            amortization                6,324       7,817    (1,493)  (19)%
           Loss on asset
            disposals, net                 18           -        18   N/M
                                           --         ---        --
                                       17,983      18,026       (43)    -
                                       ------      ------       ---

              Total operating
               expenses             2,208,314   2,220,100   (11,786)   (1)%
                                    ---------   ---------  --------
      Operating income (loss)
        U.S. Cellular                 255,689     236,868    18,821     8%
        TDS Telecom                    44,556      73,006   (28,450)  (39)%
        All Other (1)                  (9,436)     (6,522)   (2,914)  (45)%
                                       ------      ------    ------
                                      290,809     303,352   (12,543)   (4)%
                                      -------     -------  --------
      Investment and other income
       (expense)
        Equity in earnings of
         unconsolidated entities       43,700      44,379      (679)   (2)%
        Interest and dividend
         income                         4,974      27,201   (22,227)  (82)%
        Interest expense              (62,350)    (76,950)   14,600    19%
        Loss on investments and
         financial instruments              -        (402)      402   N/M
        Other, net                        474       1,703    (1,229)  (72)%
                                          ---       -----    ------
           Total investment and
            other income (expense)    (13,202)     (4,069)   (9,133)  N/M
                                      -------      ------    ------
      Income before income taxes      277,607     299,283   (21,676)   (7)%
        Income tax expense             93,674     102,512    (8,838)   (9)%
                                       ------     -------    ------
      Net income                      183,933     196,771   (12,838)   (7)%
        Less: Net income
         attributable to
         noncontrolling
         interests, net of tax        (42,194)    (35,527)   (6,667)  (19)%
                                      -------     -------    ------
      Net income attributable to
       TDS                            141,739     161,244   (19,505)  (12)%
        Preferred dividend
         requirement                      (26)        (26)        -     -
                                          ---         ---       ---
      Net income available to
       common                        $141,713    $161,218  $(19,505)  (12)%
                                     ========    ========  ========

      Basic weighted average
       shares outstanding             111,486     116,919    (5,433)   (5)%
      Basic earnings per share
       attributable to TDS
       shareholders                     $1.27       $1.38     (0.11)   (8)%

      Diluted weighted average
       shares outstanding             111,698     117,500    (5,802)   (5)%
      Diluted earnings per share
       attributable to TDS
       shareholders                     $1.27       $1.37    $(0.10)   (7)%



    (1) Consists of Suttle-Straus printing and distribution operations,
        corporate operations and intercompany eliminations.

    N/M - Percentage change not meaningful

                          Telephone and Data Systems, Inc.
                       Consolidated Balance Sheet Highlights
                         (Unaudited, dollars in thousands)

                                    ASSETS

                                                     June 30,     December 31,
                                                       2009            2008
                                                       ----            ----
     Current assets
          Cash and cash equivalents                  $664,757        $777,309
          Short-term investments                      136,495          27,705
          Accounts receivable from customers
           and other                                  541,228         516,849
          Inventory                                   130,963         122,377
          Other current assets                        182,359         184,696
                                                      -------         -------
                                                    1,655,802       1,628,936
                                                    ---------       ---------

     Investments
          Licenses                                  1,453,526       1,441,440
          Goodwill                                    707,840         707,079
          Customer lists                               28,189          34,032
          Investments in unconsolidated entities      234,409         205,768
          Other investments                            10,177          10,623
                                                       ------          ------
                                                    2,434,141       2,398,942
                                                    ---------       ---------

     Property, plant and equipment, net
          U.S. Cellular                             2,578,002       2,620,376
          TDS Telecom                                 894,796         918,454
          Other                                        29,812          30,094
                                                       ------          ------
                                                    3,502,610       3,568,924
                                                    ---------       ---------

     Other assets and deferred charges                 65,179          55,614
                                                       ------          ------

     Total assets                                  $7,657,732      $7,652,416
                                                   ==========      ==========


                          Telephone and Data Systems, Inc.
                       Consolidated Balance Sheet Highlights
                         (Unaudited, dollars in thousands)

                        LIABILITIES AND STOCKHOLDERS' EQUITY

                                                    June 30,      December 31,
                                                      2009            2008
                                                      ----            ----

     Current liabilities
        Current portion of long-term debt            $17,427         $15,337
        Accounts payable                             258,484         319,575
        Customer deposits and deferred revenues      169,277         174,101
        Accrued interest                              14,749          14,236
        Accrued taxes                                 39,618          25,192
        Accrued compensation                          66,492          90,512
        Other current liabilities                    114,915         134,334
                                                     -------         -------
                                                     680,962         773,287

     Deferred liabilities and credits
        Net deferred income tax liability            485,290         471,623
        Other deferred liabilities and credits       383,507         368,045
                                                     -------         -------
                                                     868,797         839,668

     Long-term debt                                1,619,341       1,621,422

     Noncontrolling interests with
      mandatory redemption features                      640             589

     Equity
        TDS stockholders' equity
           Common Shares, par value $.01                 571             571
           Special Common Shares, par value $.01         634             634
           Series A Common Shares, par value $.01         65              65
           Capital in excess of par value          2,075,420       2,066,597
           Treasury shares, at cost:
              Common Shares                         (162,713)       (163,017)
              Special Common Shares                 (433,440)       (350,091)
           Accumulated other comprehensive loss      (13,309)        (16,812)
           Retained earnings                       2,346,702       2,229,540
                                                   ---------       ---------
              Total TDS stockholders' equity       3,813,930       3,767,487

        Nonredeemable preferred shares                   852             852
        Noncontrolling interests                     673,210         649,111
                                                     -------         -------

           Total equity                            4,487,992       4,417,450

     Total liabilities and equity                 $7,657,732      $7,652,416
                                                  ==========      ==========

                          Telephone and Data System, Inc.
                             Balance Sheet Highlights
                                  June 30, 2009
                         (Unaudited, dollars in thousands)

                                              TDS                     TDS
                        U.S.        TDS    Corporate  Intercompany  Consoli-
                      Cellular    Telecom    & Other  Eliminations    dated
                      --------    -------    -------  ------------    -----
     Cash and cash
      equivalents     $275,920    $29,939    $358,898         $-     $664,757
     Affiliated cash
      investments            -    480,631           -   (480,631)           -
     Notes receivable--
      affiliates             -          -     253,582   (253,582)           -
                           ---        ---     -------   --------          ---
                      $275,920   $510,570    $612,480  $(734,213)    $664,757
                      ========   ========    ========  =========     ========

     Licenses,
      goodwill
      and customer
      lists         $1,946,703   $436,376   $(193,524)        $-   $2,189,555
     Investment in
      unconsolidated
      entities         192,445      3,659      43,684     (5,379)     234,409
     Other
      investments        4,231      2,452       3,494          -       10,177
                         -----      -----       -----        ---       ------
                    $2,143,379   $442,487   $(146,346)   $(5,379)  $2,434,141
                    ==========   ========   =========    =======   ==========

     Property, plant
      and equipment,
      net           $2,578,002   $894,796     $29,812         $-   $3,502,610
                    ==========   ========     =======        ===   ==========

     Notes payable--
      affiliates            $-   $253,582    $480,631  $(734,213)          $-
                           ===   ========    ========  =========          ===

     Long-term debt:
       Current
        portion        $10,088       $428      $6,911         $-      $17,427
       Non-current
        portion        997,651      2,452     619,238          -    1,619,341
                       -------      -----     -------        ---    ---------
          Total     $1,007,739     $2,880    $626,149         $-   $1,636,768
                    ==========     ======    ========        ===   ==========

     Nonredeemable
      preferred
      shares                $-         $-        $852         $-         $852
                           ===        ===        ====        ===         ====

     Construction
      expenditures:
       Quarter ended
        6/30/09        $91,200    $31,900      $2,500         $-     $125,600
       Six months ended
        6/30/09       $228,900    $58,300      $3,600         $-     $290,800

                             TDS Telecom Highlights
                           Three Months Ended June 30,
                        (Unaudited, dollars in thousands)

                                                        Increase (Decrease)
                                                        ------------------
                                     2009     2008      Amount     Percent
                                     ----     ----      ------     -------
     Local Telephone Operations
        Operating Revenues
           Voice                   $46,879  $50,925    $(4,046)     (8)%
           Data                     25,491   21,738      3,753      17%
           Network access           67,118   70,727     (3,609)     (5)%
           Miscellaneous             8,720    9,809     (1,089)    (11)%
                                     -----    -----     ------
                                   148,208  153,199     (4,991)     (3)%
                                   -------  -------     ------
        Operating Expenses
           Cost of services and
            products                48,406   46,873      1,533       3%
           Selling, general and
            administrative
            expenses                45,828   41,416      4,412      11%
           Depreciation,
            amortization and
            accretion               35,302   33,502      1,800       5%
           Loss on asset
            disposals, net             283      (25)       308     N/M
                                       ---      ---        ---
                                   129,819  121,766      8,053       7%
                                   -------  -------      -----

        Operating Income           $18,389  $31,433   $(13,044)    (41)%
                                   -------  -------  ---------

     Competitive Local Exchange
      Carrier Operations
           Revenues                $50,093  $55,888    $(5,795)    (10)%
                                   -------  -------    -------

           Expenses excluding
            depreciation,
            amortization and
            accretion               43,925   46,285     (2,360)     (5)%
           Depreciation,
            amortization and
            accretion                6,361    5,569        792      14%
           Loss on asset
            disposals, net             119      244       (125)    (51)%
                                       ---      ---       ----
                                    50,405   52,098     (1,693)     (3)%
                                    ------   ------     ------

        Operating Income
         (Loss)                      $(312)  $3,790    $(4,102)    N/M
                                     -----   ------    -------

     Intercompany revenues         $(2,341) $(1,663)     $(678)    (41)%
     Intercompany expenses          (2,341)  (1,663)      (678)    (41)%
                                    ------   ------       ----
                                         -        -          -
                                       ---      ---        ---


     Total TDS Telecom
      Operating Income             $18,077  $35,223   $(17,146)    (49)%
                                   =======  =======  =========

    N/M - Percentage change not meaningful.

                                    TDS Telecom Highlights
                                   Six Months Ended June 30,
                               (Unaudited, dollars in thousands)

                                                           Increase (Decrease)
                                                           -------------------
                                        2009      2008      Amount    Percent
                                        ----      ----     -------    --------
     Local Telephone Operations
        Operating Revenues
           Voice                      $95,457  $102,501     $(7,044)      (7)%
           Data                        50,551    42,924       7,627       18%
           Network access             134,949   140,809      (5,860)      (4)%
           Miscellaneous               17,438    18,780      (1,342)      (7)%
                                       ------    ------      ------
                                      298,395   305,014      (6,619)      (2)%
                                      -------   -------      ------
        Operating Expenses
           Cost of services and
            products                   96,090    91,707       4,383        5%
           Selling, general and
            administrative
            expenses                   86,857    83,897       2,960        4%
           Depreciation,
            amortization and
            accretion                  71,388    67,126       4,262        6%
           Loss on asset
            disposals, net                421       (46)        467      N/M
                                          ---       ---         ---
                                      254,756   242,684      12,072        5%
                                      -------   -------      ------

        Operating Income              $43,639   $62,330    $(18,691)     (30)%
                                      -------   -------   ---------

     Competitive Local Exchange
      Carrier Operations
           Revenues                  $101,282  $112,017    $(10,735)     (10)%
                                     --------  --------    --------

           Expenses excluding
            depreciation,
            amortization and
            accretion                  88,031    89,644      (1,613)      (2)%
           Depreciation,
            amortization and
            accretion                  12,138    11,453         685        6%
           Loss on asset
            disposals, net                196       244         (48)     (20)%
                                          ---       ---         ---
                                      100,365   101,341        (976)      (1)%
                                      -------   -------        ----

        Operating Income                 $917   $10,676     $(9,759)     (91)%
                                         ----   -------     -------

     Intercompany revenues            $(4,415)  $(3,531)      $(884)     (25)%
     Intercompany expenses             (4,415)   (3,531)       (884)     (25)%
                                       ------    ------        ----
                                            -         -           -
                                          ---       ---         ---


     Total TDS Telecom Operating
      Income                          $44,556   $73,006    $(28,450)     (39)%
                                      =======   =======   =========

    N/M - Percentage change not meaningful.

                             Telephone and Data Systems, Inc.
                           Consolidated Statement of Cash Flows
                                       (Unaudited)

                                                         Six Months Ended
                                                             June 30,
                                                             --------
                                                       2009             2008
                                                       ----             ----

                                                      (Dollars in thousands)
     Cash flows from operating activities
        Net income                                  $183,933         $196,771
        Add (deduct) adjustments to reconcile net
         income to net cash flows from operating
         activities
              Depreciation, amortization and
               accretion                             366,115          374,184
              Bad debts expense                       42,761           36,806
              Stock-based compensation expense        14,394            9,022
              Deferred income taxes, net              16,237         (316,269)
              Loss on investments and financial
               instruments, net                            -              402
              Equity in earnings of unconsolidated
               entities                              (43,700)         (44,379)
              Distributions from unconsolidated
               entities                               13,239           45,810
              Loss on asset disposals, net             4,912           10,090
              Noncash interest expense                 2,170            7,930
              Excess tax benefit from stock awards        (4)          (1,706)
              Other operating activities                 (41)          (2,103)
           Changes in assets and liabilities from
            operations
              Accounts receivable                    (62,870)         (59,440)
              Inventory                               (9,928)         (20,830)
              Accounts payable                       (63,963)          (4,171)
              Customer deposits and deferred revenues (4,824)          10,303
              Accrued taxes                           56,741          304,231
              Accrued interest                           513           (3,780)
              Other assets and liabilities           (71,724)         (47,432)
                                                     -------          -------
                                                     443,961          495,439
                                                     -------          -------

     Cash flows from investing activities
        Additions to property, plant and equipment  (290,821)        (299,061)
        Cash paid for acquisitions and licenses      (15,042)        (334,350)
        Cash received from divestitures                   50            6,838
        Proceeds from disposition of investments           -          226,644
        Cash paid to settle derivative liabilities         -          (17,404)
        Cash paid for short-term investments        (109,055)               -
        Other investing activities                     1,990             (934)
                                                       -----             ----
                                                    (412,878)        (418,267)
                                                    --------         --------

     Cash flows from financing activities
        Issuance of notes payable                          -          100,000
        Repayment of notes payable                         -          (50,000)
        Repayment of variable prepaid forward
         contracts                                         -          (47,357)
        Repayment of long-term debt                   (1,655)          (6,442)
        TDS Common Shares and Special Common Shares
         reissued for benefit plans, net of tax
         payments                                        743            1,494
        U.S. Cellular Common Shares reissued for
         benefit plans, net of tax payments             (405)          (1,878)
        Excess tax benefit from stock awards               4            1,706
        Repurchase of TDS Special Common Shares      (86,565)         (83,013)
        Repurchase of U.S. Cellular Common Shares    (19,332)         (14,516)
        Dividends paid                               (23,814)         (23,922)
        Payment of debt issuance costs                (9,959)               -
        Distributions to noncontrolling interests     (3,417)          (4,594)
        Other financing activities                       765            2,067
                                                         ---            -----
                                                    (143,635)        (126,455)
                                                    --------         --------

     Net decrease in cash and cash equivalents      (112,552)         (49,283)

     Cash and cash equivalents -
        Beginning of period                          777,309        1,174,446
                                                     -------        ---------
        End of period                               $664,757       $1,125,163
                                                    ========       ==========

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

Multimedia Files:

View all news