CHICAGO, Feb. 26, 2014 /PRNewswire/ -- As previously announced, TDS will hold a teleconference Feb. 26, 2014 at 9:30 a.m. CST. Interested parties may listen to the call live via the Events & Presentations page of investors.teldta.com.
Telephone and Data Systems, Inc. (NYSE:TDS) reported operating revenues of $1,183.5 million for the fourth quarter of 2013, versus $1,346.2 million for the comparable period one year ago. Net loss attributable to TDS shareholders and related diluted loss per share were $6.1 million and $0.06 respectively, for the fourth quarter of 2013, compared to $41.9 million and $0.39, respectively, in the comparable period one year ago.
Year-over-year comparisons are affected by U.S. Cellular's Divestiture Transaction, the deconsolidation of certain U.S. Cellular partnerships, and acquisitions at TDS Telecom, in 2013.
"Throughout the year, our businesses took strategic actions to compete more effectively and position us well for the future, and these actions impacted our financial results," said LeRoy T. Carlson, Jr., TDS president and CEO. "At U.S. Cellular, we brought 4G LTE speeds and quality to nearly 90 percent of our customers, which has resulted in strong growth in smartphone adoption and data use. TDS Telecom brought high-speed broadband and TDS TV to more markets, and is moving aggressively to increase residential and commercial penetration in our cable markets.
"At U.S. Cellular, we expect our competitive devices, plans, and pricing to help us attract and retain customers, though service issues related to our recent billing system conversion continue to impact customer churn. U.S. Cellular is driving ongoing growth in smartphone penetration and data use through our high-quality nationwide network and comprehensive device portfolio. Customer response to our Apple device offerings and shared data plans has been very positive, and we expect that to continue. We have very strong 4G LTE coverage in our markets and we are competing aggressively with our outstanding network and customer experiences.
"TDS Telecom brought high-speed broadband and TDS TV services to more markets in 2013, and maintained customer loyalty through service bundling. Commercial managedIP connections increased substantially, and TDS Telecom began introducing new services in our cable markets. Cable is an attractive growth opportunity, and we plan to build our business through additional acquisitions in 2014. We brought our five hosted and managed services businesses together as OneNeck IT Solutions to provide end-to-end solutions and to drive faster growth in recurring revenues from mid-market commercial customers."
2014 Estimated Results
U.S. Cellular capital expenditures for 2014 are expected to be approximately $640 million, down from $738 million in 2013. U.S. Cellular is not providing guidance for 2014 revenues and profitability at this time due to a number of factors, which involve significant uncertainty and affect U.S. Cellular's ability to estimate future results with reasonable confidence. Such factors include (i) the unprecedented number of actions related to pricing of service plans and devices, including device financing, announced by competitors in recent weeks, for which U.S. Cellular is evaluating and determining its response; and (ii) continuing elevated churn due, at least in part, to issues arising from U.S. Cellular's billing system implementation in the second half of 2013. Although U.S. Cellular expects churn to improve over the next several months, the extent and timing of the improvement is uncertain.
TDS Telecom estimates for full-year 2014 results are shown below. Such estimates represent management's view as of Feb. 26, 2014. Such forward-looking statements should not be assumed to be current as of any future date. TDS undertakes no duty to update such information, whether as a result of new information, future events or otherwise. There can be no assurance that final results will not differ materially from such estimated results.
|
|
2014 Estimated Results
|
|
|
TDS Telecom
|
(Dollars in millions)
|
|
Operating revenues
|
$1,050-$1,100
|
Adjusted income before income taxes (1)
|
$250-$280
|
Capital expenditures
|
$200
|
|
|
(1)
|
Adjusted income before income taxes is defined as income before income taxes, adjusted for the items set forth in the reconciliation below. Adjusted income before income taxes excludes these items in order to show operating results on a more comparable basis from period to period. In addition, TDS may exclude other items from adjusted income before income taxes if such items help reflect operating results on a more comparable basis. TDS does not intend to imply that any such amounts that are excluded are non-recurring, infrequent or unusual; such amounts may occur in the future. Adjusted income before income taxes is not a measure of financial performance under Generally Accepted Accounting Principles in the United States ("GAAP") and should not be considered as an alternative to income before income taxes as an indicator of the company's operating performance or as an alternative to cash flows from operating activities, determined in accordance with GAAP, as an indicator of cash flows or as a measure of liquidity. TDS believes adjusted income before income taxes is a useful measure of TDS' operating results before significant recurring non-cash charges, discrete gains and losses, and financing charges (interest expense). The following table provides a reconciliation of income (loss) before income taxes to adjusted income before income taxes for 2014 estimated results:
|
|
|
2014 Estimated Results
|
|
|
TDS Telecom
|
(Dollars in millions)
|
|
Income before income taxes
|
$25-$55
|
Depreciation, amortization and accretion expense
|
$225
|
Adjusted income before income taxes
|
$250-$280
|
2013 Estimated and Actual Results
|
|
2013 Estimated and Actual Results for the Year Ended December 31, 2013
|
|
|
U.S. Cellular (1)
|
|
TDS Telecom
|
|
TDS (1)(2)
|
|
|
Estimate
|
Actual
|
|
Estimate
|
Actual
|
|
Estimate
|
Actual
|
(Dollars in millions)
|
|
|
|
|
|
|
|
|
Adjusted operating revenues (3)
|
$3,590-$3,640
|
$3,595
|
|
$920-$960
|
$947
|
|
$4,555-4,645
|
$4,577
|
Adjusted income before income taxes (4)
|
$600-$700
|
$585
|
|
$230-$260
|
$249
|
|
$830-$960
|
$839
|
Capital expenditures
|
$735
|
$738
|
|
$165
|
$165
|
|
$910
|
$910
|
|
|
(1)
|
These estimates and actual results reflect U.S. Cellular's consolidated results for 2013.
|
(2)
|
The TDS column includes U.S. Cellular, TDS Telecom, and also the impacts of consolidating eliminations, corporate operations and non-reportable segments.
|
(3)
|
Adjusted operating revenues is defined as operating revenues, excluding U.S. Cellular equipment sales revenues. U.S. Cellular equipment sales revenues are excluded from adjusted operating revenues since U.S. Cellular equipment is generally sold at a net loss, and such net loss that results from U.S. Cellular equipment sales revenues less U.S. Cellular cost of equipment sold is viewed as a cost of earning service revenues for purposes of assessing business results. For purposes of developing this guidance, TDS does not calculate an estimate of U.S. Cellular equipment sales revenues. TDS believes this measure provides useful information to investors regarding TDS' results of operations. Adjusted operating revenues is not a measure of financial performance under GAAP and should not be considered as an alternative to operating revenues as an indicator of the company's operating performance. The following table provides a reconciliation of actual operating revenues to adjusted operating revenues:
|
|
|
2013 Estimated and Actual Results for the Year Ended December 31, 2013
|
|
|
U.S. Cellular (1)
|
|
TDS (1)(2)
|
|
|
Estimate
|
|
Actual
|
|
Estimate
|
|
Actual
|
(Dollars in millions)
|
|
|
|
|
|
|
|
Operating revenues
|
N/A
|
|
$3,919
|
|
N/A
|
|
$4,901
|
U.S. Cellular equipment sales revenues
|
N/A
|
|
$324
|
|
N/A
|
|
$324
|
Adjusted operating revenues
|
$3,590-$3,640
|
|
$3,595
|
|
$4,555-$4,645
|
|
$4,577
|
|
|
(4)
|
Adjusted income before income taxes is defined as income before income taxes, adjusted for the items set forth in the reconciliation below. Adjusted income before income taxes excludes these items in order to show operating results on a more comparable basis from period to period. In addition, TDS may also exclude other items from adjusted income before income taxes if such items help reflect operating results on a more comparable basis. TDS does not intend to imply that any such amounts that are excluded are non-recurring, infrequent or unusual; such amounts may occur in the future. Adjusted income before income taxes is not a measure of financial performance under GAAP and should not be considered as an alternative to income before income taxes as an indicator of the company's operating performance or as an alternative to cash flows from operating activities, determined in accordance with GAAP, as an indicator of cash flows or as a measure of liquidity. TDS believes adjusted income before income taxes is a useful measure of TDS' operating results before significant recurring non-cash charges, discrete gains and losses, and financing charges (interest expense). The following table provides a reconciliation of income (loss) before income taxes to adjusted income before income taxes for 2013 estimated and actual results:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2013 Estimated and Actual Results for the Year Ended December 31, 2013
|
|
|
U.S. Cellular (1)
|
|
TDS Telecom
|
|
TDS (1)(2)
|
|
|
Estimate
|
|
Actual
|
|
Estimate
|
|
Actual
|
|
Estimate
|
|
Actual
|
(Dollars in millions)
|
|
|
|
|
|
|
|
|
|
|
|
Income (loss) before income taxes
|
$350-$450
|
|
$258
|
|
$25-$55
|
|
$49
|
|
$360-$490
|
|
$293
|
Depreciation, amortization and accretion expense
|
$790
|
|
$804
|
|
$205
|
|
$203
|
|
$1,005
|
|
$1,018
|
(Gain) loss on sale of business and other exit costs, net
|
($245)
|
|
($247)
|
|
—
|
|
—
|
|
($300)
|
|
($301)
|
(Gain) loss on license sales and exchanges
|
($325)
|
|
($255)
|
|
—
|
|
—
|
|
($325)
|
|
($255)
|
(Gain) loss on investments
|
($20)
|
|
($19)
|
|
—
|
|
($1)
|
|
($15)
|
|
($15)
|
Interest expense
|
$50
|
|
$44
|
|
—
|
|
($2)
|
|
$105
|
|
$99
|
Adjusted income before
income taxes
|
$600-$700
|
|
$585
|
|
$230-$260
|
|
$249
|
|
$830-$960
|
|
$839
|
Stock Repurchase Summary
TDS began repurchasing stock under its $250 million repurchase authorization on Aug. 5, 2013. The following represents repurchases of TDS Common Shares.
Repurchase Period
|
|
# Shares
|
|
Cost (in millions)
|
|
2013 (fourth quarter)
|
|
134,303
|
|
$
|
3.9
|
|
2013 (third quarter)
|
|
204,548
|
|
$
|
5.8
|
|
Total
|
|
338,851
|
|
$
|
9.7
|
|
Conference Call Information
TDS will hold a conference call on Feb. 26, 2014 at 9:30 a.m. CST.
Before the call, certain financial and statistical information to be discussed during the call will be posted to investors.teldta.com. The call will be archived on the Events & Presentations page of investors.teldta.com.
About TDS
Telephone and Data Systems, Inc. (TDS), a Fortune 500® company, provides wireless; cable and wireline broadband, TV and voice; and hosted and managed services to approximately 5.9 million customers nationwide through its business units, U.S. Cellular, TDS Telecom, OneNeck IT Solutions and Baja Broadband. Founded in 1969 and headquartered in Chicago, TDS employed 10,500 people as of Dec. 31, 2013.
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: impacts of any pending acquisition and divestiture transactions, including, but not limited to, the ability to obtain regulatory approvals, successfully complete the transactions and the financial impacts of such transactions; the ability of the company to successfully manage and 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 on acceptable terms; 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; changes in customer growth rates, average monthly revenue per user, 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 Current Report used by TDS to furnish this press release to the Securities and Exchange Commission ("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
OneNeck IT Solutions: www.oneneck.com
United States Cellular Corporation
|
Total Markets* Summary Operating Data (Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
As of or for the Quarter Ended
|
12/31/2013
|
|
9/30/2013
|
|
6/30/2013
|
|
3/31/2013
|
|
12/31/2012
|
Retail Customers
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Postpaid
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total at end of period
|
|
4,267,000
|
|
|
4,343,000
|
|
|
4,412,000
|
|
|
5,060,000
|
|
|
5,134,000
|
|
|
Gross additions
|
|
176,000
|
|
|
165,000
|
|
|
165,000
|
|
|
191,000
|
|
|
241,000
|
|
|
Net additions (losses)
|
|
(71,000)
|
|
|
(60,000)
|
|
|
(120,000)
|
|
|
(74,000)
|
|
|
(41,000)
|
|
|
ARPU (1)
|
$
|
53.53
|
|
$
|
54.64
|
|
$
|
54.18
|
|
$
|
54.85
|
|
$
|
54.56
|
|
|
Churn rate (2)
|
|
1.9%
|
|
|
1.7%
|
|
|
2.0%
|
|
|
1.7%
|
|
|
1.8%
|
|
|
Smartphone penetration (3) (4)
|
|
50.8%
|
|
|
47.1%
|
|
|
45.5%
|
|
|
43.5%
|
|
|
41.8%
|
|
Prepaid
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total at end of period
|
|
343,000
|
|
|
370,000
|
|
|
381,000
|
|
|
446,000
|
|
|
423,000
|
|
|
Gross additions
|
|
63,000
|
|
|
65,000
|
|
|
77,000
|
|
|
104,000
|
|
|
107,000
|
|
|
Net additions (losses)
|
|
(26,000)
|
|
|
(11,000)
|
|
|
(7,000)
|
|
|
23,000
|
|
|
37,000
|
|
|
ARPU (1)
|
$
|
31.66
|
|
$
|
28.72
|
|
$
|
31.69
|
|
$
|
33.31
|
|
$
|
33.56
|
|
|
Churn rate (2)
|
|
8.3%
|
|
|
6.8%
|
|
|
6.8%
|
|
|
6.2%
|
|
|
5.8%
|
Total customers at end of period
|
|
4,774,000
|
|
|
4,875,000
|
|
|
4,968,000
|
|
|
5,736,000
|
|
|
5,798,000
|
Billed ARPU (1)
|
$
|
50.25
|
|
$
|
50.92
|
|
$
|
50.60
|
|
$
|
51.13
|
|
$
|
50.94
|
Service revenue ARPU (1)
|
$
|
57.05
|
|
$
|
58.36
|
|
$
|
57.45
|
|
$
|
57.63
|
|
$
|
58.00
|
Smartphones sold as a percent of total devices sold
|
|
79.6%
|
|
|
65.2%
|
|
|
66.0%
|
|
|
61.7%
|
|
|
62.9%
|
Total population
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Consolidated markets (5)
|
|
58,013,000
|
|
|
84,025,000
|
|
|
84,025,000
|
|
|
93,943,000
|
|
|
93,244,000
|
|
|
Consolidated operating markets (5)
|
|
31,759,000
|
|
|
31,822,000
|
|
|
31,822,000
|
|
|
47,440,000
|
|
|
46,966,000
|
Market penetration at end of period
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Consolidated markets (6)
|
|
8.2%
|
|
|
5.8%
|
|
|
5.9%
|
|
|
6.1%
|
|
|
6.2%
|
|
|
Consolidated operating markets (6)
|
|
15.0%
|
|
|
15.3%
|
|
|
15.6%
|
|
|
12.1%
|
|
|
12.3%
|
Capital expenditures (000s)
|
$
|
208,100
|
|
$
|
242,500
|
|
$
|
168,500
|
|
$
|
118,400
|
|
$
|
253,100
|
Total cell sites in service
|
|
6,975
|
|
|
7,687
|
|
|
7,748
|
|
|
8,027
|
|
|
8,028
|
Owned towers in service
|
|
4,448
|
|
|
4,422
|
|
|
4,411
|
|
|
4,411
|
|
|
4,408
|
|
|
*
|
Represents U.S. Cellular's consolidated markets. These are markets which U. S. Cellular currently consolidates, or previously consolidated in the periods presented, and is not adjusted in prior periods for subsequent divestitures or deconsolidations.
|
|
|
|
Refer to U.S. Cellular's Form 8-K filed on February 26, 2014 for pro forma financial information related to the Divestiture Transaction and the NY1 & NY2 Deconsolidation for the three and twelve months ended December 31, 2013, as if the transactions had occurred at the beginning of the respective periods. Also refer to U.S. Cellular's Form 8-K filed on May 3, 2013 for pro forma financial information related to the Divestiture Transaction and the NY1 & NY2 Deconsolidation for the twelve months ended December 31, 2012.
|
United States Cellular Corporation
|
Core Markets* Summary Operating Data (Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
As of or for the Quarter Ended
|
12/31/2013
|
|
9/30/2013
|
|
6/30/2013
|
|
3/31/2013
|
|
12/31/2012
|
Retail Customers
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Postpaid
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total at end of period
|
|
4,267,000
|
|
|
4,343,000
|
|
|
4,412,000
|
|
|
4,463,000
|
|
|
4,496,000
|
|
|
Gross additions
|
|
176,000
|
|
|
165,000
|
|
|
165,000
|
|
|
176,000
|
|
|
208,000
|
|
|
Net additions (losses)
|
|
(71,000)
|
|
|
(60,000)
|
|
|
(53,000)
|
|
|
(33,000)
|
|
|
(19,000)
|
|
|
ARPU (1)
|
$
|
53.53
|
|
$
|
54.64
|
|
$
|
54.44
|
|
$
|
54.21
|
|
$
|
53.91
|
|
|
Churn rate (2)
|
|
1.9%
|
|
|
1.7%
|
|
|
1.6%
|
|
|
1.6%
|
|
|
1.7%
|
|
|
Smartphone penetration (3) (4)
|
|
50.8%
|
|
|
47.1%
|
|
|
45.5%
|
|
|
43.0%
|
|
|
41.1%
|
|
Prepaid
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total at end of period
|
|
343,000
|
|
|
370,000
|
|
|
381,000
|
|
|
373,000
|
|
|
342,000
|
|
|
Gross additions
|
|
63,000
|
|
|
65,000
|
|
|
76,000
|
|
|
91,000
|
|
|
87,000
|
|
|
Net additions (losses)
|
|
(26,000)
|
|
|
(11,000)
|
|
|
8,000
|
|
|
31,000
|
|
|
37,000
|
|
|
ARPU (1)
|
$
|
31.66
|
|
$
|
28.72
|
|
$
|
31.65
|
|
$
|
32.92
|
|
$
|
33.21
|
|
|
Churn rate (2)
|
|
8.3%
|
|
|
6.8%
|
|
|
6.0%
|
|
|
5.6%
|
|
|
5.1%
|
Total customers at end of period
|
|
4,774,000
|
|
|
4,875,000
|
|
|
4,968,000
|
|
|
5,005,000
|
|
|
5,022,000
|
Billed ARPU (1)
|
$
|
50.25
|
|
$
|
50.92
|
|
$
|
50.98
|
|
$
|
50.93
|
|
$
|
50.71
|
Service revenue ARPU (1)
|
$
|
57.05
|
|
$
|
58.36
|
|
$
|
57.88
|
|
$
|
57.14
|
|
$
|
57.67
|
Smartphones sold as a percent of total
devices sold
|
|
79.6%
|
|
|
65.2%
|
|
|
66.1%
|
|
|
62.1%
|
|
|
62.9%
|
Total population
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Consolidated markets (5)
|
|
58,013,000
|
|
|
84,025,000
|
|
|
84,025,000
|
|
|
84,025,000
|
|
|
83,384,000
|
|
|
Consolidated operating markets (5)
|
|
31,759,000
|
|
|
31,822,000
|
|
|
31,822,000
|
|
|
31,822,000
|
|
|
31,445,000
|
Market penetration at end of period
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Consolidated markets (6)
|
|
8.2%
|
|
|
5.8%
|
|
|
5.9%
|
|
|
6.0%
|
|
|
6.0%
|
|
|
Consolidated operating markets (6)
|
|
15.0%
|
|
|
15.3%
|
|
|
15.6%
|
|
|
15.7%
|
|
|
16.0%
|
Capital expenditures (000s)
|
$
|
211,200
|
|
$
|
239,300
|
|
$
|
171,200
|
|
$
|
113,300
|
|
$
|
241,400
|
Total cell sites in service
|
|
6,161
|
|
|
6,127
|
|
|
6,113
|
|
|
6,113
|
|
|
6,130
|
Owned towers in service
|
|
3,913
|
|
|
3,859
|
|
|
3,844
|
|
|
3,846
|
|
|
3,847
|
|
|
*
|
U.S. Cellular's Core Markets excludes the Divestiture Markets and NY1 & NY2 markets for the periods presented.
|
|
|
|
Refer to U.S. Cellular's Form 8-K filed on February 26, 2014 for pro forma financial information related to the Divestiture Transaction and the NY1 & NY2 Deconsolidation for the three and twelve months ended December 31, 2013, as if the transactions had occurred at the beginning of the respective periods. Also refer to U.S. Cellular's Form 8-K filed on May 3, 2013 for pro forma financial information related to the Divestiture Transaction and the NY1 & NY2 Deconsolidation for the twelve months ended December 31, 2012.
|
|
|
(1)
|
ARPU metrics are calculated by dividing a revenue base by an average number of customers by the number of months in the period. These revenue bases and customer populations are shown below:
|
|
a.
|
Postpaid ARPU consists of total postpaid service revenues and postpaid customers.
|
|
b.
|
Prepaid ARPU consists of total prepaid service revenues and prepaid customers.
|
|
c.
|
Billed ARPU consists of total postpaid, prepaid and reseller service revenues and postpaid, prepaid and reseller customers.
|
|
d.
|
Service revenue ARPU consists of total retail service revenues, inbound roaming and other service revenues and postpaid, prepaid and reseller customers.
|
(2)
|
Churn metrics represent the percentage of the postpaid or prepaid customers that disconnects service each month. These metrics represent the average monthly postpaid or prepaid churn rate for each respective period.
|
(3)
|
Smartphones represent wireless devices which run on an Android, Apple, BlackBerry or Windows Mobile operating system, excluding tablets.
|
(4)
|
Smartphone penetration is calculated by dividing postpaid smartphone customers by total postpaid customers.
|
(5)
|
Used only to calculate market penetration of consolidated and core markets and consolidated and core operating markets, respectively. See footnote (6) below.
|
(6)
|
Market penetration is calculated by dividing the number of wireless customers at the end of the period by the total population of consolidated and core markets and consolidated and core operating markets, respectively, estimated by Claritas.
|
TDS Telecom
|
Summary Operating Data (Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Quarter Ended
|
12/31/2013
|
|
9/30/2013
|
|
6/30/2013
|
|
3/31/2013
|
|
12/31/2012
|
TDS Telecom
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Wireline
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Residential connections
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Voice (1)
|
|
352,100
|
|
|
358,200
|
|
|
364,000
|
|
|
368,600
|
|
|
374,700
|
|
|
|
Broadband (2)
|
|
227,000
|
|
|
229,500
|
|
|
231,700
|
|
|
229,500
|
|
|
229,900
|
|
|
|
IPTV
|
|
13,800
|
|
|
12,200
|
|
|
10,500
|
|
|
9,000
|
|
|
7,900
|
|
|
|
Wireline residential connections
|
|
592,900
|
|
|
599,900
|
|
|
606,200
|
|
|
607,100
|
|
|
612,500
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Commercial connections
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Voice (1)
|
|
218,400
|
|
|
223,800
|
|
|
229,100
|
|
|
235,600
|
|
|
243,100
|
|
|
|
Broadband (2)
|
|
27,100
|
|
|
27,600
|
|
|
28,300
|
|
|
28,800
|
|
|
29,700
|
|
|
|
managedIP (3)
|
|
127,600
|
|
|
121,000
|
|
|
112,000
|
|
|
103,400
|
|
|
94,600
|
|
|
|
Wireline commercial connections
|
|
373,100
|
|
|
372,400
|
|
|
369,400
|
|
|
367,800
|
|
|
367,400
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Wireline connections
|
|
966,000
|
|
|
972,300
|
|
|
975,600
|
|
|
974,900
|
|
|
979,900
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total residential revenue per connection (4)
|
$
|
40.93
|
|
$
|
41.12
|
|
$
|
40.10
|
|
$
|
39.99
|
|
$
|
39.87
|
|
|
Residential broadband penetration (5)
|
|
68%
|
|
|
68%
|
|
|
68%
|
|
|
66%
|
|
|
65%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cable
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cable Connections:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Video (6)
|
|
69,200
|
|
|
70,300
|
|
|
|
|
|
|
|
|
|
|
|
|
Broadband (7)
|
|
61,000
|
|
|
59,800
|
|
|
|
|
|
|
|
|
|
|
|
|
Voice (7)
|
|
17,200
|
|
|
16,800
|
|
|
|
|
|
|
|
|
|
|
|
|
Cable connections
|
|
147,400
|
|
|
146,900
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total residential revenue per connection (4)
|
$
|
55.27
|
|
$
|
55.67
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
The individual circuit connecting a customer to TDS Telecom's central office facilities.
|
(2)
|
The number of customers provided high-capacity data circuits via various technologies, including DSL and dedicated internet circuit technologies.
|
(3)
|
The number of telephone handsets, data lines and IP trunks providing communications using IP networking technology.
|
(4)
|
Total residential revenue divided by the average number of total residential connections.
|
(5)
|
Total number of broadband connections divided by total primary residential connections.
|
(6)
|
Generally, a home or business receiving video programming counts as one video connection. In counting bulk residential or commercial connections, such as an apartment building or hotel, connections are counted based on the number of units/rooms within the building receiving service.
|
(7)
|
Broadband and voice connections reflect billable number of lines into a building for high speed data and voice services, respectively.
|
TDS Telecom
|
Capital Expenditures (000s)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Quarter Ended
|
|
12/31/2013
|
|
|
9/30/2013
|
|
|
6/30/2013
|
|
|
3/31/2013
|
|
|
12/31/2012
|
Wireline
|
$
|
46,000
|
|
$
|
32,800
|
|
$
|
33,300
|
|
$
|
27,900
|
|
$
|
49,500
|
Cable
|
|
7,000
|
|
|
1,400
|
|
|
—
|
|
|
—
|
|
|
—
|
HMS
|
|
9,200
|
|
|
2,400
|
|
|
2,300
|
|
|
2,600
|
|
|
2,300
|
|
$
|
62,200
|
|
$
|
36,600
|
|
$
|
35,600
|
|
$
|
30,500
|
|
$
|
51,800
|
Telephone and Data Systems, Inc.
|
Consolidated Statement of Operations Highlights
|
Three Months Ended December 31,
|
(Unaudited, dollars and shares in thousands, except per share amounts)
|
|
|
|
|
|
|
|
|
|
|
Increase/ (Decrease)
|
|
|
|
|
2013
|
|
2012
|
|
Amount
|
Percent
|
Operating revenues
|
|
|
|
|
|
|
|
|
|
|
|
U.S. Cellular
|
$
|
902,724
|
|
$
|
1,115,206
|
|
$
|
(212,482)
|
|
(19%)
|
|
TDS Telecom
|
|
271,939
|
|
|
221,495
|
|
|
50,444
|
|
23%
|
|
All Other (1)
|
|
8,854
|
|
|
9,508
|
|
|
(654)
|
|
(7%)
|
|
|
|
|
|
1,183,517
|
|
|
1,346,209
|
|
|
(162,692)
|
|
(12%)
|
Operating expenses
|
|
|
|
|
|
|
|
|
|
|
|
U.S. Cellular
|
|
|
|
|
|
|
|
|
|
|
|
|
Expenses excluding depreciation, amortization and accretion
|
|
967,005
|
|
|
979,461
|
|
|
(12,456)
|
|
(1%)
|
|
|
Depreciation, amortization and accretion
|
|
210,371
|
|
|
169,242
|
|
|
41,129
|
|
24%
|
|
|
(Gain) loss on asset disposals, net
|
|
14,453
|
|
|
2,121
|
|
|
12,332
|
|
>100%
|
|
|
(Gain) loss on sale of business and other exit costs, net
|
|
(3,140)
|
|
|
25,170
|
|
|
(28,310)
|
|
>(100%)
|
|
|
(Gain) loss on license sales and exchanges
|
|
(255,479)
|
|
|
—
|
|
|
(255,479)
|
|
N/M
|
|
|
|
|
|
933,210
|
|
|
1,175,994
|
|
|
(242,784)
|
|
(21%)
|
|
TDS Telecom
|
|
|
|
|
|
|
|
|
|
|
|
|
Expenses excluding depreciation, amortization and accretion
|
|
206,097
|
|
|
165,585
|
|
|
40,512
|
|
24%
|
|
|
Depreciation, amortization and accretion
|
|
53,149
|
|
|
49,455
|
|
|
3,694
|
|
7%
|
|
|
(Gain) loss on asset disposals, net
|
|
336
|
|
|
390
|
|
|
(54)
|
|
(14%)
|
|
|
|
|
|
259,582
|
|
|
215,430
|
|
|
44,152
|
|
20%
|
|
All Other (1)
|
|
|
|
|
|
|
|
|
|
|
|
|
Expenses excluding depreciation and amortization
|
|
8,597
|
|
|
7,865
|
|
|
732
|
|
9%
|
|
|
Depreciation and amortization
|
|
2,982
|
|
|
2,767
|
|
|
215
|
|
8%
|
|
|
(Gain) loss on asset disposals, net
|
|
(38)
|
|
|
514
|
|
|
(552)
|
|
>(100%)
|
|
|
(Gain) loss on sale of business and other exit costs, net
|
|
121
|
|
|
—
|
|
|
121
|
|
N/M
|
|
|
|
|
|
11,662
|
|
|
11,146
|
|
|
516
|
|
5%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total operating expenses
|
|
1,204,454
|
|
|
1,402,570
|
|
|
(198,116)
|
|
(14%)
|
Operating income (loss)
|
|
|
|
|
|
|
|
|
|
|
|
U.S. Cellular
|
|
(30,486)
|
|
|
(60,788)
|
|
|
30,302
|
|
50%
|
|
TDS Telecom
|
|
12,357
|
|
|
6,065
|
|
|
6,292
|
|
>100%
|
|
All Other (1)
|
|
(2,808)
|
|
|
(1,638)
|
|
|
(1,170)
|
|
(71%)
|
|
|
|
|
|
(20,937)
|
|
|
(56,361)
|
|
|
35,424
|
|
63%
|
Investment and other income (expense)
|
|
|
|
|
|
|
|
|
|
|
|
Equity in earnings of unconsolidated entities
|
|
32,411
|
|
|
19,071
|
|
|
13,340
|
|
70%
|
|
Interest and dividend income
|
|
2,407
|
|
|
2,354
|
|
|
53
|
|
2%
|
|
Gain on investment
|
|
29
|
|
|
10
|
|
|
19
|
|
>100%
|
|
Interest expense
|
|
(25,603)
|
|
|
(18,645)
|
|
|
(6,958)
|
|
(37%)
|
|
Other, net
|
|
169
|
|
|
524
|
|
|
(355)
|
|
(68%)
|
|
|
Total investment and other income
|
|
9,413
|
|
|
3,314
|
|
|
6,099
|
|
>100%
|
Loss before income taxes
|
|
(11,524)
|
|
|
(53,047)
|
|
|
41,523
|
|
78%
|
|
Income tax benefit
|
|
(4,013)
|
|
|
(12,037)
|
|
|
8,024
|
|
67%
|
Net loss
|
|
(7,511)
|
|
|
(41,010)
|
|
|
33,499
|
|
82%
|
|
Less: Net income (loss) attributable to noncontrolling interests, net of tax
|
|
(1,454)
|
|
|
837
|
|
|
(2,291)
|
|
>(100%)
|
Net loss attributable to TDS shareholders
|
|
(6,057)
|
|
|
(41,847)
|
|
|
35,790
|
|
86%
|
|
Preferred dividend requirement
|
|
(12)
|
|
|
(12)
|
|
|
—
|
|
—
|
Net loss available to common shareholders
|
$
|
(6,069)
|
|
$
|
(41,859)
|
|
$
|
35,790
|
|
86%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic weighted average shares outstanding
|
|
108,742
|
|
|
108,481
|
|
|
261
|
|
—
|
Basic loss per share attributable to TDS shareholders
|
$
|
(0.06)
|
|
$
|
(0.39)
|
|
$
|
0.33
|
|
85%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted weighted average shares outstanding
|
|
108,742
|
|
|
108,481
|
|
|
261
|
|
—
|
Diluted loss per share attributable to TDS shareholders
|
$
|
(0.06)
|
|
$
|
(0.39)
|
|
$
|
0.33
|
|
85%
|
|
|
(1)
|
Consists of Non-Reportable Segment, corporate operations and intercompany eliminations between U.S. Cellular, TDS Telecom, the Non-Reportable Segment and corporate operations.
|
|
|
N/M – Percentage change not meaningful
|
Telephone and Data Systems, Inc.
|
Consolidated Statement of Operations Highlights
|
Twelve Months Ended December 31,
|
(Unaudited, dollars and shares in thousands, except per share amounts)
|
|
|
|
|
|
|
|
|
|
|
Increase/ (Decrease)
|
|
|
|
|
2013
|
|
2012
|
|
Amount
|
Percent
|
Operating revenues
|
|
|
|
|
|
|
|
|
|
|
|
U.S. Cellular
|
$
|
3,918,836
|
|
$
|
4,452,084
|
|
$
|
(533,248)
|
|
(12%)
|
|
TDS Telecom
|
|
947,003
|
|
|
854,506
|
|
|
92,497
|
|
11%
|
|
All Other (1)
|
|
35,397
|
|
|
38,687
|
|
|
(3,290)
|
|
(9%)
|
|
|
|
|
|
4,901,236
|
|
|
5,345,277
|
|
|
(444,041)
|
|
(8%)
|
Operating expenses
|
|
|
|
|
|
|
|
|
|
|
|
U.S. Cellular
|
|
|
|
|
|
|
|
|
|
|
|
|
Expenses excluding depreciation, amortization and accretion
|
|
3,439,830
|
|
|
3,647,685
|
|
|
(207,855)
|
|
(6%)
|
|
|
Depreciation, amortization and accretion
|
|
803,781
|
|
|
608,633
|
|
|
195,148
|
|
32%
|
|
|
(Gain) loss on asset disposals, net
|
|
30,606
|
|
|
18,088
|
|
|
12,518
|
|
69%
|
|
|
(Gain) loss on sale of business and other exit costs, net
|
|
(246,767)
|
|
|
21,022
|
|
|
(267,789)
|
|
>(100%)
|
|
|
(Gain) loss on license sales and exchanges
|
|
(255,479)
|
|
|
—
|
|
|
(255,479)
|
|
N/M
|
|
|
|
|
|
3,771,971
|
|
|
4,295,428
|
|
|
(523,457)
|
|
(12%)
|
|
TDS Telecom
|
|
|
|
|
|
|
|
|
|
|
|
|
Expenses excluding depreciation, amortization and accretion
|
|
699,187
|
|
|
619,503
|
|
|
79,684
|
|
13%
|
|
|
Depreciation, amortization and accretion
|
|
202,701
|
|
|
193,094
|
|
|
9,607
|
|
5%
|
|
|
(Gain) loss on asset disposals, net
|
|
283
|
|
|
1,128
|
|
|
(845)
|
|
(75%)
|
|
|
(Gain) loss on sale of business and other exit costs, net
|
|
—
|
|
|
39
|
|
|
(39)
|
|
N/M
|
|
|
|
|
|
902,171
|
|
|
813,764
|
|
|
88,407
|
|
11%
|
|
All Other (1)
|
|
|
|
|
|
|
|
|
|
|
|
|
Expenses excluding depreciation and amortization
|
|
34,077
|
|
|
39,283
|
|
|
(5,206)
|
|
(13%)
|
|
|
Depreciation and amortization
|
|
11,595
|
|
|
11,899
|
|
|
(304)
|
|
(3%)
|
|
|
Loss on impairment of assets
|
|
—
|
|
|
515
|
|
|
(515)
|
|
N/M
|
|
|
(Gain) loss on asset disposals, net
|
|
(48)
|
|
|
525
|
|
|
(573)
|
|
>(100%)
|
|
|
(Gain) loss on sale of business and other exit costs, net
|
|
(53,889)
|
|
|
—
|
|
|
(53,889)
|
|
N/M
|
|
|
|
|
|
(8,265)
|
|
|
52,222
|
|
|
(60,487)
|
|
>(100%)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total operating expenses
|
|
4,665,877
|
|
|
5,161,414
|
|
|
(495,537)
|
|
(10%)
|
Operating income (loss)
|
|
|
|
|
|
|
|
|
|
|
|
U.S. Cellular
|
|
146,865
|
|
|
156,656
|
|
|
(9,791)
|
|
(6%)
|
|
TDS Telecom
|
|
44,832
|
|
|
40,742
|
|
|
4,090
|
|
10%
|
|
All Other (1)
|
|
43,662
|
|
|
(13,535)
|
|
|
57,197
|
|
>(100%)
|
|
|
|
|
|
235,359
|
|
|
183,863
|
|
|
51,496
|
|
28%
|
Investment and other income (expense)
|
|
|
|
|
|
|
|
|
|
|
|
Equity in earnings of unconsolidated entities
|
|
132,714
|
|
|
92,867
|
|
|
39,847
|
|
43%
|
|
Interest and dividend income
|
|
9,092
|
|
|
9,248
|
|
|
(156)
|
|
(2%)
|
|
Gain (loss) on investment
|
|
14,547
|
|
|
(3,718)
|
|
|
18,265
|
|
>(100%)
|
|
Interest expense
|
|
(98,811)
|
|
|
(86,745)
|
|
|
(12,066)
|
|
(14%)
|
|
Other, net
|
|
(37)
|
|
|
720
|
|
|
(757)
|
|
>(100%)
|
|
|
Total investment and other income
|
|
57,505
|
|
|
12,372
|
|
|
45,133
|
|
>100%
|
Income before income taxes
|
|
292,864
|
|
|
196,235
|
|
|
96,629
|
|
49%
|
|
Income tax expense
|
|
126,043
|
|
|
73,582
|
|
|
52,461
|
|
71%
|
Net income
|
|
166,821
|
|
|
122,653
|
|
|
44,168
|
|
36%
|
|
Less: Net income attributable to noncontrolling interests, net of tax
|
|
24,894
|
|
|
40,792
|
|
|
(15,898)
|
|
(39%)
|
Net income attributable to TDS shareholders
|
|
141,927
|
|
|
81,861
|
|
|
60,066
|
|
73%
|
|
Preferred dividend requirement
|
|
(49)
|
|
|
(50)
|
|
|
1
|
|
2%
|
Net income available to common shareholders
|
$
|
141,878
|
|
$
|
81,811
|
|
$
|
60,067
|
|
73%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic weighted average shares outstanding
|
|
108,490
|
|
|
108,671
|
|
|
(181)
|
|
—
|
Basic earnings per share attributable to TDS shareholders
|
$
|
1.31
|
|
$
|
0.75
|
|
$
|
0.56
|
|
75%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted weighted average shares outstanding
|
|
109,132
|
|
|
108,937
|
|
|
195
|
|
—
|
Diluted earnings per share attributable to TDS shareholders
|
$
|
1.29
|
|
$
|
0.75
|
|
$
|
0.54
|
|
72%
|
|
|
(1)
|
Consists of Non-Reportable Segment, corporate operations and intercompany eliminations between U.S. Cellular, TDS Telecom, the Non-Reportable Segment and corporate operations. TDS recognized an incremental gain of $53.5 million compared to U.S. Cellular upon closing of the Divesture Transaction as a result of lower asset basis in assets disposed.
|
|
|
N/M – Percentage change not meaningful
|
Telephone and Data Systems, Inc.
|
Consolidated Balance Sheet Highlights
|
(Unaudited, dollars in thousands)
|
|
|
|
|
|
|
|
ASSETS
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
December 31,
|
|
December 31,
|
|
|
2013
|
|
2012
|
Current assets
|
|
|
|
|
|
|
Cash and cash equivalents
|
$
|
830,014
|
|
$
|
740,481
|
|
Short-term investments
|
|
50,104
|
|
|
115,700
|
|
Accounts receivable from customers and others
|
|
731,114
|
|
|
574,328
|
|
Inventory
|
|
244,560
|
|
|
160,692
|
|
Net deferred income tax asset
|
|
106,077
|
|
|
43,411
|
|
Prepaid expenses
|
|
87,920
|
|
|
86,385
|
|
Income taxes receivable
|
|
2,397
|
|
|
9,625
|
|
Other current assets
|
|
35,151
|
|
|
32,815
|
|
|
|
2,087,337
|
|
|
1,763,437
|
|
|
|
|
|
|
|
Assets held for sale
|
|
16,027
|
|
|
163,242
|
|
|
|
|
|
|
|
Investments
|
|
|
|
|
|
|
Licenses
|
|
1,423,779
|
|
|
1,480,039
|
|
Goodwill
|
|
836,843
|
|
|
797,194
|
|
Franchise rights
|
|
123,668
|
|
|
—
|
|
Other intangible assets, net
|
|
71,454
|
|
|
58,522
|
|
Investments in unconsolidated entities
|
|
301,772
|
|
|
179,921
|
|
Long-term investments
|
|
—
|
|
|
50,305
|
|
Other investments
|
|
641
|
|
|
824
|
|
|
|
2,758,157
|
|
|
2,566,805
|
|
|
|
|
|
|
|
Property, plant and equipment, net
|
|
|
|
|
|
|
U.S. Cellular
|
|
2,856,520
|
|
|
3,022,588
|
|
TDS Telecom
|
|
984,634
|
|
|
934,188
|
|
Other
|
|
36,990
|
|
|
40,490
|
|
|
|
3,878,144
|
|
|
3,997,266
|
|
|
|
|
|
|
|
Other assets and deferred charges
|
|
164,482
|
|
|
133,150
|
|
|
|
|
|
|
|
Total assets
|
$
|
8,904,147
|
|
$
|
8,623,900
|
Telephone and Data Systems, Inc.
|
Consolidated Balance Sheet Highlights
|
(Unaudited, dollars in thousands)
|
|
|
|
|
|
|
|
|
|
LIABILITIES AND EQUITY
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
December 31,
|
|
December 31,
|
|
|
|
|
2013
|
|
2012
|
Current liabilities
|
|
|
|
|
|
|
|
Current portion of long-term debt
|
$
|
1,646
|
|
$
|
1,233
|
|
|
Accounts payable
|
|
496,069
|
|
|
377,291
|
|
|
Customer deposits and deferred revenues
|
|
289,445
|
|
|
222,345
|
|
|
Accrued interest
|
|
6,673
|
|
|
6,565
|
|
|
Accrued taxes
|
|
70,518
|
|
|
48,237
|
|
|
Accrued compensation
|
|
115,031
|
|
|
134,932
|
|
|
Other current liabilities
|
|
212,374
|
|
|
134,005
|
|
|
|
|
|
1,191,756
|
|
|
924,608
|
|
|
|
|
|
|
|
|
|
Liabilities held for sale
|
|
—
|
|
|
19,594
|
|
|
|
|
|
|
|
|
|
Deferred liabilities and credits
|
|
|
|
|
|
|
|
Net deferred income tax liability
|
|
862,975
|
|
|
862,580
|
|
|
Other deferred liabilities and credits
|
|
458,709
|
|
|
438,727
|
|
|
|
|
|
|
|
|
|
Long-term debt
|
|
1,720,074
|
|
|
1,721,571
|
|
|
|
|
|
|
|
|
|
Noncontrolling interests with redemption features
|
|
536
|
|
|
493
|
|
|
|
|
|
|
|
|
|
Equity
|
|
|
|
|
|
|
TDS shareholders' equity
|
|
|
|
|
|
|
|
Series A Common and Common Shares, par value $.01
|
|
1,327
|
|
|
1,327
|
|
|
Capital in excess of par value
|
|
2,308,807
|
|
|
2,304,122
|
|
|
Treasury shares, at cost
|
|
(721,354)
|
|
|
(750,099)
|
|
|
Accumulated other comprehensive loss
|
|
(569)
|
|
|
(8,132)
|
|
|
Retained earnings
|
|
2,529,626
|
|
|
2,464,318
|
|
|
|
Total TDS shareholders' equity
|
|
4,117,837
|
|
|
4,011,536
|
|
|
|
|
|
|
|
|
|
|
Preferred shares
|
|
824
|
|
|
825
|
|
Noncontrolling interests
|
|
551,436
|
|
|
643,966
|
|
|
|
|
|
|
|
|
|
|
|
Total equity
|
|
4,670,097
|
|
|
4,656,327
|
|
|
|
|
|
|
|
|
|
Total liabilities and equity
|
$
|
8,904,147
|
|
$
|
8,623,900
|
Balance Sheet Highlights
|
December 31, 2013
|
(Unaudited, dollars in thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
U.S.
|
|
TDS
|
|
TDS Corporate
|
|
Intercompany
|
|
TDS
|
|
|
|
Cellular
|
|
Telecom
|
|
& Other
|
|
Eliminations
|
|
Consolidated
|
Cash and cash equivalents
|
$
|
342,065
|
|
$
|
87,340
|
|
$
|
400,609
|
|
$
|
?
|
|
$
|
830,014
|
Affiliated cash investments
|
|
?
|
|
|
426,431
|
|
|
?
|
|
|
(426,431)
|
|
|
?
|
Short-term investments
|
|
50,104
|
|
|
?
|
|
|
?
|
|
|
?
|
|
|
50,104
|
|
|
$
|
392,169
|
|
$
|
513,771
|
|
$
|
400,609
|
|
$
|
(426,431)
|
|
$
|
880,118
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Licenses, goodwill and other intangible assets
|
$
|
1,788,650
|
|
$
|
797,165
|
|
$
|
(130,071)
|
|
$
|
?
|
|
$
|
2,455,744
|
Investment in unconsolidated entities
|
|
265,585
|
|
|
3,809
|
|
|
39,553
|
|
|
(7,175)
|
|
|
301,772
|
Long-term and other investments
|
|
?
|
|
|
641
|
|
|
?
|
|
|
?
|
|
|
641
|
|
|
|
$
|
2,054,235
|
|
$
|
801,615
|
|
$
|
(90,518)
|
|
$
|
(7,175)
|
|
$
|
2,758,157
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Property, plant and equipment, net
|
$
|
2,856,520
|
|
$
|
984,634
|
|
$
|
36,990
|
|
$
|
?
|
|
$
|
3,878,144
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Long-term debt:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current portion
|
$
|
166
|
|
$
|
72
|
|
$
|
1,408
|
|
$
|
?
|
|
$
|
1,646
|
|
Non-current portion
|
|
878,032
|
|
|
1,456
|
|
|
840,586
|
|
|
?
|
|
|
1,720,074
|
|
|
|
$
|
878,198
|
|
$
|
1,528
|
|
$
|
841,994
|
|
$
|
?
|
|
$
|
1,721,720
|
Telephone and Data Systems, Inc.
|
Schedule of Cash and Cash Equivalents and Investments
|
(Unaudited, dollars in thousands)
|
|
The following table presents TDS' cash and cash equivalents and investments at December 31, 2013 and December 31, 2012.
|
|
|
|
December 31,
|
|
December 31,
|
|
2013
|
|
2012
|
|
|
|
|
|
|
|
Cash and cash equivalents
|
$
|
830,014
|
|
$
|
740,481
|
|
|
|
|
|
|
|
Amounts included in short-term investments (1) (2)
|
|
|
|
|
|
|
U.S. Treasury Notes
|
|
50,104
|
|
|
115,700
|
|
|
|
|
|
|
|
Amounts included in long-term investments (1)
|
|
|
|
|
|
|
U.S. Treasury Notes
|
|
—
|
|
|
50,305
|
|
|
|
|
|
|
|
Total cash and cash equivalents and investments
|
$
|
880,118
|
|
$
|
906,486
|
|
|
(1)
|
Designated as held-to-maturity investments and are recorded at amortized cost in the Consolidated Balance Sheet.
|
(2)
|
Maturities are less than twelve months from the respective balance sheet dates.
|
Telephone and Data Systems, Inc.
|
Consolidated Statement of Cash Flows
|
Twelve Months Ended December 31,
|
(Unaudited, dollars in thousands)
|
|
|
|
|
|
2013
|
|
2012
|
Cash flows from operating activities
|
|
|
|
|
|
|
Net income
|
$
|
166,821
|
|
$
|
122,653
|
|
|
Add (deduct) adjustments to reconcile net income to net cash flows
from operating activities
|
|
|
|
|
|
|
|
|
|
Depreciation, amortization and accretion
|
|
1,018,077
|
|
|
813,626
|
|
|
|
|
Bad debts expense
|
|
105,629
|
|
|
74,695
|
|
|
|
|
Stock-based compensation expense
|
|
30,338
|
|
|
41,871
|
|
|
|
|
Deferred income taxes, net
|
|
(67,150)
|
|
|
58,785
|
|
|
|
|
Equity in earnings of unconsolidated entities
|
|
(132,714)
|
|
|
(92,867)
|
|
|
|
|
Distributions from unconsolidated entities
|
|
127,929
|
|
|
84,884
|
|
|
|
|
Loss on impairment of assets
|
|
—
|
|
|
515
|
|
|
|
|
(Gain) loss on asset disposals, net
|
|
30,841
|
|
|
19,741
|
|
|
|
|
(Gain) loss on sale of business and other exit costs, net
|
|
(300,656)
|
|
|
21,061
|
|
|
|
|
(Gain) loss on license sales and exchanges
|
|
(255,479)
|
|
|
—
|
|
|
|
|
(Gain) loss on investments
|
|
(14,547)
|
|
|
3,718
|
|
|
|
|
Noncash interest expense
|
|
2,463
|
|
|
(572)
|
|
|
|
|
Other operating activities
|
|
612
|
|
|
1,393
|
|
|
Changes in assets and liabilities from operations
|
|
|
|
|
|
|
|
|
|
Accounts receivable
|
|
(294,320)
|
|
|
(81,107)
|
|
|
|
|
Inventory
|
|
(83,536)
|
|
|
(29,917)
|
|
|
|
|
Accounts payable
|
|
86,028
|
|
|
(12,332)
|
|
|
|
|
Customer deposits and deferred revenues
|
|
66,460
|
|
|
32,981
|
|
|
|
|
Accrued taxes
|
|
17,388
|
|
|
77,458
|
|
|
|
|
Accrued interest
|
|
380
|
|
|
(891)
|
|
|
|
|
Other assets and liabilities
|
|
(9,954)
|
|
|
(30,523)
|
|
|
|
|
|
|
494,610
|
|
|
1,105,172
|
|
|
|
|
|
|
|
|
|
|
Cash flows from investing activities
|
|
|
|
|
|
|
Cash used for additions to property, plant and equipment
|
|
(883,797)
|
|
|
(995,517)
|
|
Cash paid for acquisitions and licenses
|
|
(314,570)
|
|
|
(163,382)
|
|
Cash received from divestitures
|
|
811,120
|
|
|
50,182
|
|
Cash paid for investments
|
|
—
|
|
|
(120,000)
|
|
Cash received for investments
|
|
115,000
|
|
|
243,444
|
|
Other investing activities
|
|
11,594
|
|
|
(12,796)
|
|
|
|
|
|
|
(260,653)
|
|
|
(998,069)
|
|
|
|
|
|
|
|
|
|
|
Cash flows from financing activities
|
|
|
|
|
|
|
Repayment of long-term debt
|
|
(1,581)
|
|
|
(2,566)
|
|
Issuance of long-term debt
|
|
37
|
|
|
195,358
|
|
TDS Common Shares and Special Common Shares reissued for benefit plans, net of tax payments
|
|
9,654
|
|
|
(1,119)
|
|
U.S. Cellular Common Shares reissued for benefit plans, net of tax payments
|
|
5,784
|
|
|
(2,205)
|
|
Repurchase of TDS Common Shares
|
|
(9,692)
|
|
|
(20,026)
|
|
Repurchase of U.S. Cellular Common Shares
|
|
(18,544)
|
|
|
(20,045)
|
|
Dividends paid to TDS shareholders
|
|
(55,293)
|
|
|
(53,165)
|
|
U.S. Cellular dividends paid to noncontrolling public shareholders
|
|
(75,235)
|
|
|
—
|
|
Payment of debt issuance costs
|
|
(23)
|
|
|
(8,242)
|
|
Distributions to noncontrolling interests
|
|
(3,766)
|
|
|
(20,856)
|
|
Payments to acquire additional interests in subsidiaries
|
|
(4,505)
|
|
|
(3,167)
|
|
Other financing activities
|
|
8,740
|
|
|
6,136
|
|
|
|
|
|
|
(144,424)
|
|
|
70,103
|
|
|
|
|
|
|
|
|
|
|
Net increase in cash and cash equivalents
|
|
89,533
|
|
|
177,206
|
Cash and cash equivalents
|
|
|
|
|
|
|
Beginning of period
|
|
740,481
|
|
|
563,275
|
|
End of period
|
$
|
830,014
|
|
$
|
740,481
|
TDS Telecom Highlights
|
Three Months Ended December 31,
|
(Unaudited, dollars in thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Increase (Decrease)
|
|
|
|
|
2013
|
|
2012
|
|
Amount
|
|
Percent
|
Wireline
|
|
|
|
|
|
|
|
|
|
|
|
Operating revenues
|
|
|
|
|
|
|
|
|
|
|
|
|
Residential
|
$
|
73,045
|
|
$
|
73,551
|
|
$
|
(506)
|
|
(1%)
|
|
|
Commercial
|
|
59,208
|
|
|
58,175
|
|
|
1,033
|
|
2%
|
|
|
Wholesale
|
|
48,746
|
|
|
53,705
|
|
|
(4,959)
|
|
(9%)
|
|
|
|
|
|
180,999
|
|
|
185,431
|
|
|
(4,432)
|
|
(2%)
|
|
Operating expenses
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of services and products
|
|
67,945
|
|
|
68,977
|
|
|
(1,032)
|
|
(1%)
|
|
|
Selling, general and administrative expenses
|
|
52,771
|
|
|
61,182
|
|
|
(8,411)
|
|
(14%)
|
|
|
Depreciation, amortization and accretion
|
|
41,516
|
|
|
43,159
|
|
|
(1,643)
|
|
(4%)
|
|
|
Loss on asset disposals, net
|
|
306
|
|
|
387
|
|
|
(81)
|
|
(21%)
|
|
|
|
|
|
162,538
|
|
|
173,705
|
|
|
(11,167)
|
|
(6%)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating income
|
$
|
18,461
|
|
$
|
11,726
|
|
$
|
6,735
|
|
57%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cable
|
|
|
|
|
|
|
|
|
|
|
|
Operating revenues
|
|
|
|
|
|
|
|
|
|
|
|
|
Residential
|
$
|
17,374
|
|
$
|
—
|
|
$
|
17,374
|
|
N/M
|
|
|
Commercial
|
|
4,147
|
|
|
—
|
|
|
4,147
|
|
N/M
|
|
|
|
|
|
21,521
|
|
|
—
|
|
|
21,521
|
|
N/M
|
|
Operating expenses
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of services and products
|
|
10,547
|
|
|
—
|
|
|
10,547
|
|
N/M
|
|
|
Selling, general and administrative expenses
|
|
5,870
|
|
|
—
|
|
|
5,870
|
|
N/M
|
|
|
Depreciation, amortization and accretion
|
|
4,657
|
|
|
—
|
|
|
4,657
|
|
N/M
|
|
|
Loss on asset disposals, net
|
|
28
|
|
|
—
|
|
|
28
|
|
N/M
|
|
|
|
|
|
21,102
|
|
|
—
|
|
|
21,102
|
|
N/M
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating income
|
$
|
419
|
|
$
|
—
|
|
$
|
419
|
|
N/M
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
HMS
|
|
|
|
|
|
|
|
|
|
|
|
Operating revenues
|
$
|
69,951
|
|
$
|
36,148
|
|
$
|
33,803
|
|
94%
|
|
Operating expenses
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of services and products
|
|
53,897
|
|
|
25,585
|
|
|
28,312
|
|
>100%
|
|
|
Selling, general and administrative expenses
|
|
15,599
|
|
|
9,925
|
|
|
5,674
|
|
57%
|
|
|
Depreciation, amortization and accretion
|
|
6,976
|
|
|
6,296
|
|
|
680
|
|
11%
|
|
|
Loss on asset disposals, net
|
|
2
|
|
|
3
|
|
|
(1)
|
|
(33%)
|
|
|
|
|
|
76,474
|
|
|
41,809
|
|
|
34,665
|
|
83%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating loss
|
$
|
(6,523)
|
|
$
|
(5,661)
|
|
$
|
(862)
|
|
(15%)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Intercompany revenues
|
$
|
(532)
|
|
$
|
(84)
|
|
$
|
(448)
|
|
>(100)%
|
Intercompany expenses
|
|
(532)
|
|
|
(84)
|
|
|
(448)
|
|
>(100)%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total TDS Telecom operating income
|
$
|
12,357
|
|
$
|
6,065
|
|
$
|
6,292
|
|
>100%
|
TDS Telecom Highlights
|
Twelve Months Ended December 31,
|
(Unaudited, dollars in thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Increase (Decrease)
|
|
|
|
|
2013
|
|
2012
|
|
Amount
|
|
Percent
|
Wireline
|
|
|
|
|
|
|
|
|
|
|
|
Operating revenues
|
|
|
|
|
|
|
|
|
|
|
|
|
Residential
|
$
|
293,217
|
|
$
|
296,592
|
|
$
|
(3,375)
|
|
(1%)
|
|
|
Commercial
|
|
232,910
|
|
|
230,474
|
|
|
2,436
|
|
1%
|
|
|
Wholesale
|
|
200,440
|
|
|
214,682
|
|
|
(14,242)
|
|
(7%)
|
|
|
|
|
|
726,567
|
|
|
741,748
|
|
|
(15,181)
|
|
(2%)
|
|
Operating expenses
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of services and products
|
|
270,466
|
|
|
274,065
|
|
|
(3,599)
|
|
(1%)
|
|
|
Selling, general and administrative expenses
|
|
220,097
|
|
|
235,716
|
|
|
(15,619)
|
|
(7%)
|
|
|
Depreciation, amortization and accretion
|
|
170,868
|
|
|
172,526
|
|
|
(1,658)
|
|
(1%)
|
|
|
Loss on asset disposals, net
|
|
130
|
|
|
1,020
|
|
|
(890)
|
|
(87%)
|
|
|
Loss on sale of business and other exit costs, net
|
|
—
|
|
|
39
|
|
|
(39)
|
|
N/M
|
|
|
|
|
|
661,561
|
|
|
683,366
|
|
|
(21,805)
|
|
(3%)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating income
|
$
|
65,006
|
|
$
|
58,382
|
|
$
|
6,624
|
|
11%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cable
|
|
|
|
|
|
|
|
|
|
|
|
Operating revenues
|
|
|
|
|
|
|
|
|
|
|
|
|
Residential
|
$
|
29,016
|
|
$
|
—
|
|
$
|
29,016
|
|
N/M
|
|
|
Commercial
|
|
6,867
|
|
|
—
|
|
|
6,867
|
|
N/M
|
|
|
|
|
|
35,883
|
|
|
—
|
|
|
35,883
|
|
N/M
|
|
Operating expenses
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of services and products
|
|
17,274
|
|
|
—
|
|
|
17,274
|
|
N/M
|
|
|
Selling, general and administrative expenses
|
|
11,054
|
|
|
—
|
|
|
11,054
|
|
N/M
|
|
|
Depreciation, amortization and accretion
|
|
7,571
|
|
|
—
|
|
|
7,571
|
|
N/M
|
|
|
Loss on asset disposals, net
|
|
28
|
|
|
—
|
|
|
28
|
|
N/M
|
|
|
|
|
|
35,927
|
|
|
—
|
|
|
35,927
|
|
N/M
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating loss
|
$
|
(44)
|
|
$
|
—
|
|
$
|
(44)
|
|
N/M
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
HMS
|
|
|
|
|
|
|
|
|
|
|
|
Operating revenues
|
$
|
185,616
|
|
$
|
113,010
|
|
$
|
72,606
|
|
64%
|
|
Operating expenses
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of services and products
|
|
136,414
|
|
|
75,781
|
|
|
60,633
|
|
80%
|
|
|
Selling, general and administrative expenses
|
|
44,945
|
|
|
34,193
|
|
|
10,752
|
|
31%
|
|
|
Depreciation, amortization and accretion
|
|
24,262
|
|
|
20,568
|
|
|
3,694
|
|
18%
|
|
|
Loss on asset disposals, net
|
|
125
|
|
|
108
|
|
|
17
|
|
16%
|
|
|
|
|
|
205,746
|
|
|
130,650
|
|
|
75,096
|
|
57%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating loss
|
$
|
(20,130)
|
|
$
|
(17,640)
|
|
$
|
(2,490)
|
|
(14%)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Intercompany revenues
|
$
|
(1,063)
|
|
$
|
(252)
|
|
$
|
(811)
|
|
>(100)%
|
Intercompany expenses
|
|
(1,063)
|
|
|
(252)
|
|
|
(811)
|
|
>(100)%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total TDS Telecom operating income
|
$
|
44,832
|
|
$
|
40,742
|
|
$
|
4,090
|
|
10%
|
Telephone and Data Systems, Inc.
|
Financial Measures and Reconciliations
|
(Unaudited, dollars in thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
TDS Consolidated
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
|
|
Twelve Months Ended
|
|
|
|
|
December 31,
|
|
December 31,
|
|
|
2013
|
|
2012
|
|
2013
|
|
2012
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash flows from operating activities
|
|
$
|
56,710
|
|
$
|
344,636
|
|
$
|
494,610
|
|
$
|
1,105,172
|
|
Deduct:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash used for additions to property, plant
and equipment
|
|
|
252,427
|
|
|
264,620
|
|
|
883,797
|
|
|
995,517
|
|
|
Free cash flow (1)
|
|
$
|
(195,717)
|
|
$
|
80,016
|
|
$
|
(389,187)
|
|
$
|
109,655
|
|
|
(1)
|
Free cash flow is defined as Cash flows from operating activities less Cash used for additions to property, plant and equipment. Free cash flow is a non-GAAP financial measure which TDS believes may be useful to investors and other users of its financial information in evaluating the amount of cash generated by business operations, after Cash used for additions to property, plant and equipment.
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SOURCE Telephone and Data Systems, Inc.
Jane McCahon, Vice President, Corporate Relations and Corporate Secretary, 312- 592-5379, jane.mccahon@teldta.com; or Julie Mathews, Investor Relations Manager, 312- 592-5341, julie.mathews@teldta.com