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