CHICAGO, Aug. 8, 2011 /PRNewswire/ --
Note: Comparisons are year over year unless otherwise
noted.
2Q 2011 Highlights
TDS Corporate
- Operating revenues increased 4 percent to $1.3 billion.
- Diluted earnings per share attributable to TDS shareholders
increased to $0.87 from $0.38.
U.S. Cellular
- Smartphones sold, as a percent of total devices sold, increased
to 39.6 percent from 15.8 percent.
- Service revenues were $1,002.0
million, up 3 percent.
- Postpaid ARPU (average revenue per unit) increased to
$51.84 from $50.55.
- Postpaid churn improved to 1.38 percent from 1.43 percent.
- Operating income increased 61 percent to $102.4 million.
- Net loss of 58,000 retail customers, reflecting loss of 41,000
postpaid customers and 17,000 prepaid customers; postpaid customers
comprised 95 percent of retail customers.
- Cell sites in service increased 5 percent to 7,770, of which
4,400 are owned towers.
TDS Telecom
- Operating revenues remained stable at $198.9 million.
- Operating income increased 5 percent to $25.9 million.
- ILEC triple play bundle penetration of residential customers
grew to 27 percent.
- managedIP stations (ILEC and CLEC) grew to 35,300 from
19,700.
As previously announced, TDS will hold a teleconference
Aug. 8, 2011 at 7:30 a.m. CDT. Interested parties may listen to
the call live by accessing the Investor Relations page of
www.teldta.com.
Telephone and Data Systems, Inc. (NYSE: TDS, TDS.S) reported
operating revenues of $1,279.6
million for the second quarter of 2011, an increase of 4
percent from $1,232.2 million in the
comparable period one year ago. Net income attributable to TDS
shareholders and related diluted earnings per share were
$91.1 million and $0.87, respectively, for the second quarter of
2011, compared to $40.3 million and
$0.38, respectively, in the
comparable period one year ago.
"Attracting more new customers is a high priority for U.S.
Cellular and TDS Telecom and we are devoting substantial effort to
this challenge," said LeRoy T. Carlson,
Jr., TDS president and CEO. "Both companies are focused on
improving and successfully executing marketing and sales strategies
to compete more effectively.
"U.S. Cellular continued to raise average revenue per customer
by increasing smartphone penetration and adoption of data plans.
Profitability improved in the quarter, due to a strong increase in
inbound roaming revenue and expense control, with fewer gross
additions contributing to lower sales and marketing expenses.
"TDS Telecom had a solid quarter, with stable operating revenues
and higher operating income. The company continued to grow ILEC
data revenues through increases in hosted and managed services
revenues and high-speed data customers. We broke ground on the
first of 44 broadband expansion stimulus projects to bring
high-speed Internet access to more customers in rural areas. TDS
Telecom's aggressive commercial sales strategy helped the company
achieve a strong year-over-year increase in managedIP
stations. And in early July, we expanded our hosted and managed
services business significantly with the acquisition of OneNeck IT
Services Corporation.
"As announced separately today, to simplify our capital
structure, improve market liquidity and provide greater financial
flexibility, TDS is proposing to reclassify its outstanding Special
Common Shares into Common Shares on a one-for-one basis, while
retaining the controlling shareholder vote. We will hold a special
shareholder meeting later this year to vote on the proposed
amendments."
Second quarter transactions
U.S. Cellular paid $24.6 million
in cash to purchase the remaining interest in a wireless business
in which it previously held a non-controlling interest. As a
result, the company recorded a $13.4
million pre-tax gain on investments.
Additionally, U.S. Cellular sold $342
million of 6.95 percent senior notes and redeemed
$330 million of its 7.5 percent
senior notes. The redemption required U.S. Cellular to write
off $8.2 million of previously
capitalized debt issuance costs related to the 7.5 percent senior
notes. The $8.2 million was
recorded in interest expense.
Also in the quarter, TDS redeemed $282.5
million of 7.6 percent Series A notes. This redemption
required TDS to write off $7.2
million of previously capitalized debt issuance costs, which
was recorded in interest expense.
Guidance for year ending Dec. 31,
2011
Guidance for the year ending Dec. 31,
2011, as of Aug. 8, 2011, is
provided below, compared to the previous guidance provided on
May 6, 2011. 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 this
guidance.
|
|
U.S. Cellular
|
Current Estimates
|
|
Previous
Estimates (1)
|
|
|
Service revenues
|
$4,000-$4,100
million
|
|
Unchanged
|
|
|
Operating income (3)
(4)
|
$210-$285
million
|
|
$185-$285
million
|
|
|
Depreciation, amortization and
accretion expenses, and
|
|
|
|
|
|
losses on asset disposals
and impairment of assets (3)
|
Approx. $590
million
|
|
Unchanged
|
|
|
Adjusted OIBDA (2)
(4)
|
$800-$875
million
|
|
$775-$875
million
|
|
|
Capital expenditures
(4)
|
$750-$800
million
|
|
Unchanged
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
TDS Telecom
|
|
|
|
|
|
Operating revenues
|
$800-$830
million
|
|
$780-$810
million
|
|
|
Operating income (3)
|
$85-$115
million
|
|
$75-$105
million
|
|
|
Depreciation, amortization and
accretion expenses, and
|
|
|
|
|
|
losses on asset disposals
and impairment of assets (3)
|
Approx. $185
million
|
|
Unchanged
|
|
|
Adjusted OIBDA (2)
|
$270-$300
million
|
|
$260-$290
million
|
|
|
Capital expenditures
(5)
|
$175-$200
million
|
|
Unchanged
|
|
|
|
|
|
|
|
|
(1)
|
The 2011 Estimated Results as
disclosed in the TDS Quarterly Report on Form 10-Q for the period
ended March 31, 2011.
|
|
(2)
|
Adjusted OIBDA is defined as
operating income excluding the effects of: depreciation,
amortization and accretion (OIBDA); the net gain or loss on asset
disposals (if any); and the loss on impairment of assets (if any).
This measure also may be commonly referred to by management as
operating cash flow. This measure should not be confused with Cash
flows from operating activities, which is a component of the
Consolidated statement of cash flows.
|
|
(3)
|
The 2011 Estimated Results do
not include any estimate for losses on impairment of assets since
these cannot be predicted.
|
|
(4)
|
This guidance is based on U.S.
Cellular's current plans, which include a multi-year deployment of
Long-term Evolution ("LTE") technology commencing in 2011. As
customer demand for data services increases, and competitive
conditions in the wireless industry evolve, such as the rate of
deployment of LTE technology by other carriers, the timing of U.S.
Cellular's deployment of LTE and the timing of other capital
expenditures could change. These factors could affect U.S.
Cellular's estimated capital expenditures and operating expenses in
2011.
|
|
(5)
|
The capital expenditure guidance
does not include federal grants of $105.1 million awarded to TDS
Telecom through the Broadband Stimulus program under the American
Recovery and Reinvestment Act for 44 projects to be completed
between 2011 and 2013.
|
|
|
|
Stock repurchase summary
The following represents repurchases of TDS Common Shares and
TDS Special Common Shares.
|
|
|
Repurchase Period
|
|
#
Shares
|
|
Cost (in
millions)
|
|
|
2011 (second quarter)
|
|
340,965
|
|
$
|
9.9
|
|
|
2011 (first quarter)
|
|
407,281
|
|
$
|
11.6
|
|
|
2010 (full year)
|
|
2,394,476
|
|
$
|
68.1
|
|
|
2009 (full year)
|
|
6,374,741
|
|
$
|
176.6
|
|
|
2008 (full year)
|
|
5,861,822
|
|
$
|
199.6
|
|
|
Total
|
|
15,379,285
|
|
$
|
465.8
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Conference call information
TDS will hold a conference call on Aug.
8, 2011 at 7:30 a.m. CDT.
- Access the live call on the Investor Relations page of
www.teldta.com or at
http://www.videonewswire.com/event.asp?id=81248.
- Access the call by phone at 877/407-8029 (US/Canada), no pass code required.
Before the call, certain financial and statistical information
to be discussed during the call will be posted to the Investor
Relations page of www.teldta.com. The call will be archived on the
Conference Calls page of www.teldta.com.
About TDS
Telephone and Data Systems, Inc. (TDS), a Fortune 500® company,
provides wireless, local and long-distance telephone, and broadband
services to approximately 7.1 million customers in 36 states
through its business units, U.S. Cellular (wireless) and TDS
Telecom (wireline). Founded in 1969 and headquartered in
Chicago, TDS employed 12,300
people as of June 30, 2011.
Visit www.teldta.com for comprehensive financial information,
including earnings releases, quarterly and annual filings,
shareholder information and more.
Safe Harbor Statement Under the Private Securities Litigation
Reform Act of 1995: All information set forth in this news
release, except historical and factual information, represents
forward-looking statements. This includes all statements about the
company's plans, beliefs, estimates and expectations. These
statements are based on current estimates, projections and
assumptions, which involve certain risks and uncertainties that
could cause actual results to differ materially from those in the
forward-looking statements. Important factors that may affect these
forward-looking statements include, but are not limited to: the
ability of the company to successfully grow its markets; the
overall economy; competition; the access to and pricing of
unbundled network elements; the ability to obtain or maintain
roaming arrangements with other carriers; the state and federal
telecommunications regulatory environment; the value of assets and
investments; adverse changes in the ratings afforded TDS and U.S.
Cellular debt securities by accredited ratings organizations;
industry consolidation; advances in telecommunications technology;
uncertainty of access to the capital markets; pending and future
litigation; changes in income tax rates, laws, regulations or
rulings; acquisitions/divestitures of properties and/or licenses;
and changes in customer growth rates, average monthly revenue per
unit, churn rates, roaming revenue and terms, the availability of
handset devices, or the mix of products and services offered by
U.S. Cellular and TDS Telecom. Investors are encouraged to consider
these and other risks and uncertainties that are discussed in the
Form 8-K used by TDS to furnish this press release to the SEC,
which are incorporated by reference herein.
For more information about TDS and its subsidiaries, visit:
TDS: www.teldta.com
U.S. Cellular: www.uscellular.com
TDS Telecom: www.tdstelecom.com
|
|
United
States Cellular Corporation
|
|
Summary
Operating Data (Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Quarter Ended
|
|
6/30/2011
|
|
|
3/31/2011
|
|
|
12/31/2010
|
|
|
9/30/2010
|
|
|
6/30/2010
|
|
Total population
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Consolidated markets
(1)
|
|
91,204,000
|
|
|
91,090,000
|
|
|
90,468,000
|
|
|
90,468,000
|
|
|
90,468,000
|
|
|
Consolidated operating markets (1)
|
|
46,888,000
|
|
|
46,774,000
|
|
|
46,546,000
|
|
|
46,546,000
|
|
|
46,546,000
|
|
Market penetration at end of
period
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Consolidated markets
(2)
|
|
6.5%
|
|
|
6.6%
|
|
|
6.7%
|
|
|
6.7%
|
|
|
6.8%
|
|
|
Consolidated operating markets
(2)
|
|
12.7%
|
|
|
12.9%
|
|
|
13.0%
|
|
|
13.1%
|
|
|
13.2%
|
|
All customers
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total at end of
period
|
|
5,968,000
|
|
|
6,033,000
|
|
|
6,072,000
|
|
|
6,103,000
|
|
|
6,144,000
|
|
|
Gross additions
|
|
257,000
|
|
|
293,000
|
|
|
327,000
|
|
|
338,000
|
|
|
349,000
|
|
|
Net additions
(losses)
|
|
(70,000)
|
|
|
(39,000)
|
|
|
(31,000)
|
|
|
(41,000)
|
|
|
(3,000)
|
|
|
Smartphones sold as a percent
of
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
total
devices sold (3)
|
|
39.6%
|
|
|
42.5%
|
|
|
39.6%
|
|
|
23.6%
|
|
|
15.8%
|
|
Retail customers
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total at end of
period
|
|
5,644,000
|
|
|
5,698,000
|
|
|
5,729,000
|
|
|
5,750,000
|
|
|
5,775,000
|
|
|
Smartphone penetration (3)
(4)
|
|
23.0%
|
|
|
20.2%
|
|
|
16.6%
|
|
|
12.0%
|
|
|
10.1%
|
|
|
Gross additions
|
|
226,000
|
|
|
256,000
|
|
|
292,000
|
|
|
301,000
|
|
|
307,000
|
|
|
Net retail additions (losses)
(5)
|
|
(58,000)
|
|
|
(31,000)
|
|
|
(21,000)
|
|
|
(25,000)
|
|
|
7,000
|
|
|
Net postpaid
additions (losses)
|
|
(41,000)
|
|
|
(22,000)
|
|
|
(10,000)
|
|
|
(25,000)
|
|
|
(22,000)
|
|
|
Net prepaid
additions (losses)
|
|
(17,000)
|
|
|
(9,000)
|
|
|
(11,000)
|
|
|
---
|
|
|
29,000
|
|
Service revenue components
(000s)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Retail service
|
$
|
868,630
|
|
$
|
864,602
|
|
$
|
864,905
|
|
$
|
865,766
|
|
$
|
863,836
|
|
|
Inbound roaming
|
|
82,760
|
|
|
64,386
|
|
|
67,545
|
|
|
72,901
|
|
|
60,902
|
|
|
Other
|
|
50,640
|
|
|
56,125
|
|
|
59,464
|
|
|
44,836
|
|
|
47,838
|
|
Total service revenues
(000s)
|
$
|
1,002,030
|
|
$
|
985,113
|
|
$
|
991,914
|
|
$
|
983,503
|
|
$
|
972,576
|
|
Total ARPU (6)
|
$
|
55.69
|
|
$
|
54.29
|
|
$
|
54.37
|
|
$
|
53.53
|
|
$
|
52.71
|
|
Billed ARPU (7)
|
$
|
48.27
|
|
$
|
47.65
|
|
$
|
47.41
|
|
$
|
47.12
|
|
$
|
46.81
|
|
Postpaid ARPU (8)
|
$
|
51.84
|
|
$
|
51.21
|
|
$
|
50.99
|
|
$
|
50.82
|
|
$
|
50.55
|
|
Postpaid churn rate
(9)
|
|
1.4%
|
|
|
1.4%
|
|
|
1.5%
|
|
|
1.6%
|
|
|
1.4%
|
|
Capital expenditures
(000s)
|
$
|
162,100
|
|
$
|
95,900
|
|
$
|
203,400
|
|
$
|
124,700
|
|
$
|
133,500
|
|
Cell sites in
service
|
|
7,770
|
|
|
7,663
|
|
|
7,645
|
|
|
7,524
|
|
|
7,416
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
Used only to calculate market
penetration of consolidated markets and consolidated operating
markets, respectively. See footnote (2) below.
|
|
(2)
|
Market Penetration is 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)
|
Smartphones represent wireless
devices which run on a Blackberry®, Windows Mobile, or Android
operating system.
|
|
(4)
|
Smartphone penetration is
calculated by dividing postpaid customers on smartphone service
plans by total postpaid customers.
|
|
(5)
|
Includes net postpaid additions
(losses) and net prepaid additions (losses).
|
|
(6)
|
Total ARPU - Average monthly
service revenue per customer includes retail service, inbound
roaming and other service revenues and is calculated by dividing
total service revenues by the number of months in the period and by
the average total customers during the period.
|
|
(7)
|
Billed ARPU - Average monthly
billed revenue per customer is calculated by dividing total retail
service revenues by the number of months in the period and by the
average total customers during the period. Retail service revenues
include revenues attributable to postpaid, prepaid and reseller
customers.
|
|
(8)
|
Postpaid ARPU - Average monthly
revenue per postpaid customer is calculated by dividing total
retail service revenues from postpaid customers by the number of
months in the period and by the average postpaid customers during
the period.
|
|
(9)
|
Represents the percentage of the
retail postpaid customer base that disconnects service each month.
This amount represents the average postpaid churn rate for each
respective quarterly period.
|
|
|
|
|
|
TDS
Telecom
|
|
Summary
Operating Data (Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Quarter Ended
|
|
6/30/2011
|
|
|
3/31/2011
|
|
|
12/31/2010
|
|
|
9/30/2010
|
|
|
6/30/2010
|
|
TDS Telecom
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
ILEC:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Equivalent access lines (1)
|
|
764,600
|
|
|
765,300
|
|
|
767,200
|
|
|
773,800
|
|
|
779,200
|
|
|
Physical access lines
(2)
|
|
496,300
|
|
|
501,200
|
|
|
507,700
|
|
|
517,000
|
|
|
525,000
|
|
|
High-speed data customers (3)
|
|
235,600
|
|
|
231,800
|
|
|
227,700
|
|
|
225,400
|
|
|
223,200
|
|
|
Long-distance
customers
|
|
373,200
|
|
|
370,600
|
|
|
370,100
|
|
|
370,800
|
|
|
369,100
|
|
|
managedIP stations
(4)
|
|
5,100
|
|
|
4,300
|
|
|
3,600
|
|
|
3,100
|
|
|
2,700
|
|
|
Capital expenditures
(000s)
|
$
|
39,100
|
|
$
|
22,100
|
|
$
|
55,700
|
|
$
|
33,000
|
|
$
|
28,200
|
|
|
CLEC:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Equivalent access lines
(1)
|
|
328,700
|
|
|
331,000
|
|
|
335,400
|
|
|
338,700
|
|
|
343,100
|
|
|
High-speed data customers
(3)
|
|
31,500
|
|
|
32,300
|
|
|
33,100
|
|
|
33,900
|
|
|
35,000
|
|
|
managedIP stations
(4)
|
|
30,200
|
|
|
27,200
|
|
|
23,800
|
|
|
20,300
|
|
|
17,000
|
|
|
Capital expenditures
(000s)
|
$
|
6,200
|
|
$
|
4,200
|
|
$
|
6,200
|
|
$
|
5,500
|
|
$
|
5,400
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
Sum of physical access lines and
high-capacity data lines, adjusted to estimate the equivalent
number of physical access lines in terms of capacity, plus the
number of managedIP
stations.
|
|
(2)
|
Individual circuits connecting
customers to a telephone company's central office
facilities.
|
|
(3)
|
The number of customers provided
high-capacity data circuits via various technologies, including
DSL, managedIP and
dedicated Internet circuit technologies.
|
|
(4)
|
The number of telephone handsets
providing communications using packet networking
technology.
|
|
|
|
|
|
Telephone
and Data Systems, Inc.
Consolidated
Statement of Operations Highlights
|
|
|
Three Months
Ended June 30,
|
|
|
(Unaudited,
dollars and shares in thousands, except per share
amounts)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Increase/
(Decrease)
|
|
|
|
|
|
|
2011
|
|
|
2010
|
|
|
Amount
|
|
|
Percent
|
|
|
Operating
revenues
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
U.S. Cellular
|
$
|
1,076,182
|
|
|
$
|
1,029,893
|
|
|
$
|
46,289
|
|
|
|
4%
|
|
|
|
TDS Telecom
|
|
198,896
|
|
|
|
199,206
|
|
|
|
(310)
|
|
|
|
—
|
|
|
|
All Other (1)
|
|
4,562
|
|
|
|
3,120
|
|
|
|
1,442
|
|
|
|
46%
|
|
|
|
|
|
|
|
1,279,640
|
|
|
|
1,232,219
|
|
|
|
47,421
|
|
|
|
4%
|
|
|
Operating
expenses
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
U.S. Cellular
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Expenses excluding depreciation,
amortization and accretion
|
|
822,587
|
|
|
|
820,684
|
|
|
|
1,903
|
|
|
|
—
|
|
|
|
|
Depreciation, amortization and
accretion
|
|
148,283
|
|
|
|
144,455
|
|
|
|
3,828
|
|
|
|
3%
|
|
|
|
|
Loss on asset disposals,
net
|
|
2,922
|
|
|
|
1,250
|
|
|
|
1,672
|
|
|
|
>100%
|
|
|
|
|
|
|
|
973,792
|
|
|
|
966,389
|
|
|
|
7,403
|
|
|
|
1%
|
|
|
|
TDS Telecom
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Expenses excluding depreciation,
amortization and accretion
|
|
128,846
|
|
|
|
131,565
|
|
|
|
(2,719)
|
|
|
|
(2%)
|
|
|
|
|
Depreciation, amortization and
accretion
|
|
43,843
|
|
|
|
43,149
|
|
|
|
694
|
|
|
|
2%
|
|
|
|
|
(Gain) Loss on asset disposals,
net
|
|
317
|
|
|
|
(68)
|
|
|
|
385
|
|
|
|
>(100)%
|
|
|
|
|
|
|
|
173,006
|
|
|
|
174,646
|
|
|
|
(1,640)
|
|
|
|
(1%)
|
|
|
|
All Other (1)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Expenses excluding depreciation
and amortization
|
|
4,569
|
|
|
|
2,117
|
|
|
|
2,452
|
|
|
|
>100%
|
|
|
|
|
Depreciation and
amortization
|
|
2,625
|
|
|
|
2,654
|
|
|
|
(29)
|
|
|
|
(1%)
|
|
|
|
|
(Gain) Loss on asset disposals,
net
|
|
(1)
|
|
|
|
32
|
|
|
|
(33)
|
|
|
|
>(100)%
|
|
|
|
|
|
|
|
7,193
|
|
|
|
4,803
|
|
|
|
2,390
|
|
|
|
50%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total operating
expenses
|
|
1,153,991
|
|
|
|
1,145,838
|
|
|
|
8,153
|
|
|
|
1%
|
|
|
Operating income
(loss)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
U.S. Cellular
|
|
102,390
|
|
|
|
63,504
|
|
|
|
38,886
|
|
|
|
61%
|
|
|
|
TDS Telecom
|
|
25,890
|
|
|
|
24,560
|
|
|
|
1,330
|
|
|
|
5%
|
|
|
|
All Other (1)
|
|
(2,631)
|
|
|
|
(1,683)
|
|
|
|
(948)
|
|
|
|
(56%)
|
|
|
|
|
|
|
|
125,649
|
|
|
|
86,381
|
|
|
|
39,268
|
|
|
|
45%
|
|
|
Investment and other income
(expense)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity in earnings of
unconsolidated entities
|
|
22,590
|
|
|
|
25,997
|
|
|
|
(3,407)
|
|
|
|
(13%)
|
|
|
|
Interest and dividend
income
|
|
2,093
|
|
|
|
2,674
|
|
|
|
(581)
|
|
|
|
(22%)
|
|
|
|
Gain on investment
|
|
13,373
|
|
|
|
—
|
|
|
|
13,373
|
|
|
|
N/M
|
|
|
|
Interest expense
|
|
(45,417)
|
|
|
|
(29,265)
|
|
|
|
(16,152)
|
|
|
|
(55%)
|
|
|
|
Other, net
|
|
1,306
|
|
|
|
(1,929)
|
|
|
|
3,235
|
|
|
|
>(100)%
|
|
|
|
|
Total investment and other
income (expense)
|
|
(6,055)
|
|
|
|
(2,523)
|
|
|
|
(3,532)
|
|
|
|
>100%
|
|
|
Income before income
taxes
|
|
119,594
|
|
|
|
83,858
|
|
|
|
35,736
|
|
|
|
43%
|
|
|
|
Income tax expense
|
|
10,916
|
|
|
|
31,469
|
|
|
|
(20,553)
|
|
|
|
(65%)
|
|
|
Net income
|
|
108,678
|
|
|
|
52,389
|
|
|
|
56,289
|
|
|
|
>100%
|
|
|
|
Less: Net income attributable to noncontrolling interests, net of tax
|
|
(17,615)
|
|
|
|
(12,102)
|
|
|
|
(5,513)
|
|
|
|
(46%)
|
|
|
Net income attributable to TDS
shareholders
|
|
91,063
|
|
|
|
40,287
|
|
|
|
50,776
|
|
|
|
>100%
|
|
|
|
Preferred dividend
requirement
|
|
(12)
|
|
|
|
(12)
|
|
|
|
—
|
|
|
|
—
|
|
|
Net income available to common
shareholders
|
$
|
91,051
|
|
|
$
|
40,275
|
|
|
$
|
50,776
|
|
|
|
>100%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic weighted average shares
outstanding
|
|
103,509
|
|
|
|
105,520
|
|
|
|
(2,011)
|
|
|
|
(2%)
|
|
|
Basic earnings per share
attributable to TDS shareholders
|
$
|
0.88
|
|
|
$
|
0.38
|
|
|
$
|
0.50
|
|
|
|
>100%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted weighted average shares
outstanding
|
|
104,062
|
|
|
|
105,907
|
|
|
|
(1,845)
|
|
|
|
(2%)
|
|
|
Diluted earnings per share
attributable to TDS shareholders
|
$
|
0.87
|
|
|
$
|
0.38
|
|
|
$
|
0.49
|
|
|
|
>100%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(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
Statement of Operations Highlights
|
|
|
Six Months
Ended June 30,
|
|
|
(Unaudited,
dollars and shares in thousands, except per share
amounts)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Increase/
(Decrease)
|
|
|
|
|
|
|
2011
|
|
|
2010
|
|
|
Amount
|
|
|
Percent
|
|
|
Operating
revenues
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
U.S. Cellular
|
$
|
2,133,274
|
|
|
$
|
2,053,750
|
|
|
$
|
79,524
|
|
|
|
4%
|
|
|
|
TDS Telecom
|
|
397,812
|
|
|
|
394,711
|
|
|
|
3,101
|
|
|
|
1%
|
|
|
|
All Other (1)
|
|
7,235
|
|
|
|
6,193
|
|
|
|
1,042
|
|
|
|
17%
|
|
|
|
|
|
|
|
2,538,321
|
|
|
|
2,454,654
|
|
|
|
83,667
|
|
|
|
3%
|
|
|
Operating
expenses
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
U.S. Cellular
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Expenses excluding depreciation,
amortization and accretion
|
|
1,676,554
|
|
|
|
1,618,508
|
|
|
|
58,046
|
|
|
|
4%
|
|
|
|
|
Depreciation, amortization and
accretion
|
|
293,328
|
|
|
|
287,688
|
|
|
|
5,640
|
|
|
|
2%
|
|
|
|
|
Loss on asset disposals,
net
|
|
3,959
|
|
|
|
6,426
|
|
|
|
(2,467)
|
|
|
|
(38%)
|
|
|
|
|
|
|
|
1,973,841
|
|
|
|
1,912,622
|
|
|
|
61,219
|
|
|
|
3%
|
|
|
|
TDS Telecom
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Expenses excluding depreciation,
amortization and accretion
|
|
250,615
|
|
|
|
257,430
|
|
|
|
(6,815)
|
|
|
|
(3%)
|
|
|
|
|
Depreciation, amortization and
accretion
|
|
88,680
|
|
|
|
86,572
|
|
|
|
2,108
|
|
|
|
2%
|
|
|
|
|
Loss on asset disposals,
net
|
|
421
|
|
|
|
277
|
|
|
|
144
|
|
|
|
52%
|
|
|
|
|
|
|
|
339,716
|
|
|
|
344,279
|
|
|
|
(4,563)
|
|
|
|
(1%)
|
|
|
|
All Other (1)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Expenses excluding depreciation
and amortization
|
|
6,685
|
|
|
|
4,047
|
|
|
|
2,638
|
|
|
|
65%
|
|
|
|
|
Depreciation and
amortization
|
|
5,261
|
|
|
|
5,387
|
|
|
|
(126)
|
|
|
|
(2%)
|
|
|
|
|
(Gain) Loss on asset disposals,
net
|
|
1
|
|
|
|
(58)
|
|
|
|
59
|
|
|
|
>(100)%
|
|
|
|
|
|
|
|
11,947
|
|
|
|
9,376
|
|
|
|
2,571
|
|
|
|
27%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total operating
expenses
|
|
2,325,504
|
|
|
|
2,266,277
|
|
|
|
59,227
|
|
|
|
3%
|
|
|
Operating income
(loss)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
U.S. Cellular
|
|
159,433
|
|
|
|
141,128
|
|
|
|
18,305
|
|
|
|
13%
|
|
|
|
TDS Telecom
|
|
58,096
|
|
|
|
50,432
|
|
|
|
7,664
|
|
|
|
15%
|
|
|
|
All Other (1)
|
|
(4,712)
|
|
|
|
(3,183)
|
|
|
|
(1,529)
|
|
|
|
(48%)
|
|
|
|
|
|
|
|
212,817
|
|
|
|
188,377
|
|
|
|
24,440
|
|
|
|
13%
|
|
|
Investment and other income
(expense)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity in earnings of
unconsolidated entities
|
|
41,978
|
|
|
|
50,900
|
|
|
|
(8,922)
|
|
|
|
(18%)
|
|
|
|
Interest and dividend
income
|
|
4,717
|
|
|
|
5,115
|
|
|
|
(398)
|
|
|
|
(8%)
|
|
|
|
Gain on investment
|
|
13,373
|
|
|
|
—
|
|
|
|
13,373
|
|
|
|
N/M
|
|
|
|
Interest expense
|
|
(73,516)
|
|
|
|
(58,223)
|
|
|
|
(15,293)
|
|
|
|
(26%)
|
|
|
|
Other, net
|
|
1,386
|
|
|
|
(2,119)
|
|
|
|
3,505
|
|
|
|
>(100)%
|
|
|
|
|
Total investment and other
income (expense)
|
|
(12,062)
|
|
|
|
(4,327)
|
|
|
|
(7,735)
|
|
|
|
>100%
|
|
|
Income before income
taxes
|
|
200,755
|
|
|
|
184,050
|
|
|
|
16,705
|
|
|
|
9%
|
|
|
|
Income tax expense
|
|
39,833
|
|
|
|
69,392
|
|
|
|
(29,559)
|
|
|
|
(43%)
|
|
|
Net income
|
|
160,922
|
|
|
|
114,658
|
|
|
|
46,264
|
|
|
|
40%
|
|
|
|
Less: Net income attributable to noncontrolling interests, net of tax
|
|
(28,237)
|
|
|
|
(25,957)
|
|
|
|
(2,280)
|
|
|
|
(9%)
|
|
|
Net income attributable to TDS
shareholders
|
|
132,685
|
|
|
|
88,701
|
|
|
|
43,984
|
|
|
|
50%
|
|
|
|
Preferred dividend
requirement
|
|
(25)
|
|
|
|
(25)
|
|
|
|
—
|
|
|
|
—
|
|
|
Net income available to common
shareholders
|
$
|
132,660
|
|
|
$
|
88,676
|
|
|
$
|
43,984
|
|
|
|
50%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic weighted average shares
outstanding
|
|
103,765
|
|
|
|
105,728
|
|
|
|
(1,963)
|
|
|
|
(2%)
|
|
|
Basic earnings per share
attributable to TDS shareholders
|
$
|
1.28
|
|
|
$
|
0.84
|
|
|
$
|
0.44
|
|
|
|
52%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted weighted average shares
outstanding
|
|
104,301
|
|
|
|
106,071
|
|
|
|
(1,770)
|
|
|
|
(2%)
|
|
|
Diluted earnings per share
attributable to TDS shareholders
|
$
|
1.27
|
|
|
$
|
0.83
|
|
|
$
|
0.44
|
|
|
|
53%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(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,
|
|
|
|
|
2011
|
|
2010
|
|
Current assets
|
|
|
|
|
|
|
|
Cash and cash
equivalents
|
$
|
584,436
|
|
$
|
368,134
|
|
|
Short-term
investments
|
|
270,896
|
|
|
402,882
|
|
|
Accounts receivable from customers and others
|
|
519,102
|
|
|
512,946
|
|
|
Inventory
|
|
165,156
|
|
|
116,330
|
|
|
Net deferred income tax
asset
|
|
47,970
|
|
|
37,079
|
|
|
Prepaid expenses
|
|
89,997
|
|
|
76,935
|
|
|
Income taxes
receivable
|
|
63,978
|
|
|
64,386
|
|
|
Other current assets
|
|
17,390
|
|
|
17,384
|
|
|
|
|
|
1,758,925
|
|
|
1,596,076
|
|
|
|
|
|
|
|
|
|
|
Assets held for
sale
|
|
53,910
|
|
|
—
|
|
|
|
|
|
|
|
|
|
|
Investments
|
|
|
|
|
|
|
|
Licenses
|
|
1,462,926
|
|
|
1,460,126
|
|
|
Goodwill
|
|
728,455
|
|
|
728,455
|
|
|
Other intangible
assets
|
|
26,316
|
|
|
30,810
|
|
|
Investments in unconsolidated
entities
|
|
177,963
|
|
|
197,922
|
|
|
Long-term investments
|
|
90,900
|
|
|
102,185
|
|
|
Other investments
|
|
8,701
|
|
|
8,988
|
|
|
|
|
|
2,495,261
|
|
|
2,528,486
|
|
|
|
|
|
|
|
|
|
|
Property, plant and equipment,
net
|
|
|
|
|
|
|
|
U.S. Cellular
|
|
2,582,045
|
|
|
2,615,072
|
|
|
TDS Telecom
|
|
897,117
|
|
|
909,951
|
|
|
Other
|
|
38,776
|
|
|
33,311
|
|
|
|
|
|
3,517,938
|
|
|
3,558,334
|
|
|
|
|
|
|
|
|
|
|
Other assets and deferred
charges
|
|
94,874
|
|
|
79,623
|
|
|
|
|
|
|
|
|
|
|
Total assets
|
$
|
7,920,908
|
|
$
|
7,762,519
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Telephone
and Data Systems, Inc.
Consolidated
Balance Sheet Highlights
|
|
|
(Unaudited,
dollars in thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
LIABILITIES
AND EQUITY
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
June
30,
|
|
|
December
31,
|
|
|
|
|
|
|
2011
|
|
|
2010
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current
liabilities
|
|
|
|
|
|
|
|
|
|
Current portion of long-term
debt
|
$
|
1,919
|
|
|
$
|
1,711
|
|
|
|
Accounts payable
|
|
344,026
|
|
|
|
344,355
|
|
|
|
Customer deposits and deferred
revenues
|
|
194,381
|
|
|
|
171,781
|
|
|
|
Accrued interest
|
|
5,546
|
|
|
|
2,718
|
|
|
|
Accrued taxes
|
|
44,830
|
|
|
|
46,110
|
|
|
|
Accrued compensation
|
|
75,912
|
|
|
|
99,020
|
|
|
|
Other current
liabilities
|
|
97,122
|
|
|
|
144,938
|
|
|
|
|
|
|
|
763,736
|
|
|
|
810,633
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Liabilities held for
sale
|
|
871
|
|
|
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Deferred liabilities and
credits
|
|
|
|
|
|
|
|
|
|
Net deferred income tax
liability
|
|
688,311
|
|
|
|
585,468
|
|
|
|
Other deferred liabilities and
credits
|
|
402,143
|
|
|
|
404,892
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Long-term debt
|
|
1,530,369
|
|
|
|
1,499,862
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Noncontrolling interests with
redemption features
|
|
863
|
|
|
|
855
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity
|
|
|
|
|
|
|
|
|
|
TDS shareholders'
equity
|
|
|
|
|
|
|
|
|
|
|
Series A Common, Special Common and Common Shares,
par value
$.01
|
|
1,270
|
|
|
|
1,270
|
|
|
|
|
Capital in excess of par
value
|
|
2,108,280
|
|
|
|
2,107,929
|
|
|
|
|
Special Common and Common
Treasury shares, at cost
|
|
(756,284)
|
|
|
|
(738,695)
|
|
|
|
|
Accumulated other comprehensive
loss
|
|
(2,972)
|
|
|
|
(3,208)
|
|
|
|
|
Retained earnings
|
|
2,553,863
|
|
|
|
2,446,626
|
|
|
|
|
|
Total TDS shareholders'
equity
|
|
3,904,157
|
|
|
|
3,813,922
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Preferred shares
|
|
830
|
|
|
|
830
|
|
|
|
Noncontrolling
interests
|
|
629,628
|
|
|
|
646,057
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total equity
|
|
4,534,615
|
|
|
|
4,460,809
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total liabilities and
equity
|
$
|
7,920,908
|
|
|
$
|
7,762,519
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance
Sheet Highlights
|
|
June 30,
2011
|
|
(Unaudited,
dollars in thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
U.S.
|
|
TDS
|
|
TDS
Corporate
|
|
Intercompany
|
|
TDS
|
|
|
|
|
Cellular
|
|
Telecom
|
|
&
Other
|
|
Eliminations
|
|
Consolidated
|
|
Cash and cash
equivalents
|
$
|
428,625
|
|
$
|
5,028
|
|
$
|
150,783
|
|
$
|
-
|
|
$
|
584,436
|
|
Affiliated cash
investments
|
|
-
|
|
|
423,931
|
|
|
-
|
|
|
(423,931)
|
|
|
-
|
|
Short-term
investments
|
|
96,085
|
|
|
73,990
|
|
|
100,821
|
|
|
-
|
|
|
270,896
|
|
|
|
$
|
524,710
|
|
$
|
502,949
|
|
$
|
251,604
|
|
$
|
(423,931)
|
|
$
|
855,332
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Licenses, goodwill and other intangible assets
|
$
|
1,950,174
|
|
$
|
462,228
|
|
$
|
(194,705)
|
|
$
|
-
|
|
$
|
2,217,697
|
|
Investment in unconsolidated
entities
|
|
142,377
|
|
|
3,806
|
|
|
41,102
|
|
|
(9,322)
|
|
|
177,963
|
|
Long-term and other
investments
|
|
44,323
|
|
|
1,327
|
|
|
53,951
|
|
|
-
|
|
|
99,601
|
|
|
|
|
$
|
2,136,874
|
|
$
|
467,361
|
|
$
|
(99,652)
|
|
$
|
(9,322)
|
|
$
|
2,495,261
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Property, plant and equipment,
net
|
$
|
2,582,045
|
|
$
|
897,117
|
|
$
|
38,776
|
|
$
|
-
|
|
$
|
3,517,938
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Long-term debt:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current portion
|
$
|
101
|
|
$
|
237
|
|
$
|
1,581
|
|
$
|
-
|
|
$
|
1,919
|
|
|
Non-current portion
|
|
880,300
|
|
|
1,887
|
|
|
648,182
|
|
|
-
|
|
|
1,530,369
|
|
|
|
Total
|
$
|
880,401
|
|
$
|
2,124
|
|
$
|
649,763
|
|
$
|
-
|
|
$
|
1,532,288
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Preferred shares
|
$
|
-
|
|
$
|
-
|
|
$
|
830
|
|
$
|
-
|
|
$
|
830
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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 June 30, 2011 and December 31, 2010.
|
|
|
|
|
|
|
June
30,
|
|
December
31,
|
|
|
|
|
2011
|
|
2010
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash and cash
equivalents
|
|
$
|
584,436
|
|
$
|
368,134
|
|
|
Amounts included in short-term investments (1) (2)
|
|
|
|
|
|
|
|
|
|
Government-backed securities
(3)
|
|
|
|
196,656
|
|
|
305,612
|
|
|
|
Certificates of
deposit
|
|
|
|
74,240
|
|
|
97,270
|
|
|
|
|
|
|
$
|
270,896
|
|
$
|
402,882
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Amounts included in long-term
investments (1) (4)
|
|
|
|
|
|
|
|
|
|
Government-backed securities
(3)
|
|
|
$
|
90,900
|
|
$
|
102,185
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
Designated as held-to-maturity
investments and recorded at amortized cost in the Consolidated
Balance Sheet.
|
|
(2)
|
Maturities are less than twelve
months from the respective balance sheet dates.
|
|
(3)
|
Includes U.S. treasuries and
corporate notes that are guaranteed under the FDIC's Temporary
Liquidity Guarantee Program.
|
|
(4)
|
At June 30, 2011, maturities
range between 12 and 24 months from the balance sheet
date.
|
|
|
|
|
|
Telephone
and Data Systems, Inc.
|
|
Consolidated
Statement of Cash Flows
|
|
Six Months
Ended June 30,
|
|
(Unaudited,
dollars in thousands)
|
|
|
|
|
|
|
2011
|
|
2010
|
|
Cash flows from operating
activities
|
|
|
|
|
|
|
|
Net income
|
$
|
160,922
|
|
$
|
114,658
|
|
|
|
Add (deduct) adjustments to reconcile net income to net
|
|
|
|
|
|
|
|
|
|
cash flows from operating
activities
|
|
|
|
|
|
|
|
|
|
|
Depreciation, amortization and
accretion
|
|
387,269
|
|
|
379,647
|
|
|
|
|
|
Bad debts expense
|
|
29,906
|
|
|
39,633
|
|
|
|
|
|
Stock-based compensation
expense
|
|
18,913
|
|
|
16,743
|
|
|
|
|
|
Deferred income taxes,
net
|
|
79,637
|
|
|
(28,881)
|
|
|
|
|
|
Equity in earnings of
unconsolidated entities
|
|
(41,978)
|
|
|
(50,900)
|
|
|
|
|
|
Distributions from
unconsolidated entities
|
|
47,375
|
|
|
48,740
|
|
|
|
|
|
Loss on asset disposals,
net
|
|
4,381
|
|
|
6,645
|
|
|
|
|
|
Gain on investment
|
|
(13,373)
|
|
|
—
|
|
|
|
|
|
Noncash interest
expense
|
|
17,147
|
|
|
2,715
|
|
|
|
|
|
Other operating
activities
|
|
1,070
|
|
|
666
|
|
|
|
Changes in assets and
liabilities from operations
|
|
|
|
|
|
|
|
|
|
|
Accounts receivable
|
|
(37,819)
|
|
|
(20,985)
|
|
|
|
|
|
Inventory
|
|
(48,826)
|
|
|
32,177
|
|
|
|
|
|
Accounts payable
|
|
(448)
|
|
|
(35,572)
|
|
|
|
|
|
Customer deposits and deferred
revenues
|
|
22,600
|
|
|
4,217
|
|
|
|
|
|
Accrued taxes
|
|
(2,345)
|
|
|
24,209
|
|
|
|
|
|
Accrued interest
|
|
2,945
|
|
|
102
|
|
|
|
|
|
Other assets and
liabilities
|
|
(89,713)
|
|
|
(31,468)
|
|
|
|
|
|
|
|
537,663
|
|
|
502,346
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash flows from investing
activities
|
|
|
|
|
|
|
|
Additions to property, plant and
equipment
|
|
(338,711)
|
|
|
(317,950)
|
|
|
Cash paid for acquisitions and
licenses
|
|
(22,167)
|
|
|
(28,264)
|
|
|
Cash paid for
investments
|
|
(71,000)
|
|
|
(385,000)
|
|
|
Cash received for
investments
|
|
213,030
|
|
|
15,661
|
|
|
Other investing
activities
|
|
(816)
|
|
|
1,479
|
|
|
|
|
|
|
|
(219,664)
|
|
|
(714,074)
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash flows from financing
activities
|
|
|
|
|
|
|
|
Repayment of long-term
debt
|
|
(613,387)
|
|
|
(1,280)
|
|
|
Issuance of long-term
debt
|
|
643,700
|
|
|
—
|
|
|
TDS Common Shares and Special
Common Shares
|
|
|
|
|
|
|
|
|
reissued for benefit plans, net
of tax payments
|
|
1,055
|
|
|
845
|
|
|
U.S. Cellular Common Shares
reissued for benefit
|
|
|
|
|
|
|
|
|
plans, net of tax
payments
|
|
1,264
|
|
|
144
|
|
|
Repurchase of TDS Common and
Special Common Shares
|
|
(21,500)
|
|
|
(31,092)
|
|
|
Repurchase of U.S. Cellular
Common Shares
|
|
(62,308)
|
|
|
(21,423)
|
|
|
Dividends paid
|
|
(24,343)
|
|
|
(23,732)
|
|
|
Payment of debt issuance
costs
|
|
(21,191)
|
|
|
—
|
|
|
Distributions to noncontrolling
interests
|
|
(1,377)
|
|
|
(4,314)
|
|
|
Other financing
activities
|
|
2,077
|
|
|
65
|
|
|
|
|
|
|
|
(96,010)
|
|
|
(80,787)
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash classified as held for
sale
|
|
(5,687)
|
|
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
Net increase (decrease) in cash
and cash equivalents
|
|
216,302
|
|
|
(292,515)
|
|
Cash and cash
equivalents
|
|
|
|
|
|
|
|
Beginning of period
|
|
368,134
|
|
|
670,992
|
|
|
End of period
|
$
|
584,436
|
|
$
|
378,477
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
TDS Telecom
Highlights
|
|
|
Three Months
Ended June 30,
|
|
|
(Unaudited,
dollars in thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Increase
(Decrease)
|
|
|
|
|
|
|
2011
|
|
|
2010
|
|
|
Amount
|
|
Percent
|
|
|
Local Telephone
Operations
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating
revenues
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Voice
|
$
|
42,916
|
|
|
$
|
45,738
|
|
|
$
|
(2,822)
|
|
|
(6%)
|
|
|
|
|
Data
|
|
36,998
|
|
|
|
31,993
|
|
|
|
5,005
|
|
|
16%
|
|
|
|
|
Network access
|
|
66,320
|
|
|
|
66,951
|
|
|
|
(631)
|
|
|
(1%)
|
|
|
|
|
Miscellaneous
|
|
9,772
|
|
|
|
9,576
|
|
|
|
196
|
|
|
2%
|
|
|
|
|
|
|
|
156,006
|
|
|
|
154,258
|
|
|
|
1,748
|
|
|
1%
|
|
|
|
Operating
expenses
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of services and
products
|
|
49,839
|
|
|
|
49,302
|
|
|
|
537
|
|
|
1%
|
|
|
|
|
Selling, general and
administrative expenses
|
|
42,597
|
|
|
|
44,167
|
|
|
|
(1,570)
|
|
|
(4%)
|
|
|
|
|
Depreciation, amortization and
accretion
|
|
38,404
|
|
|
|
36,847
|
|
|
|
1,557
|
|
|
4%
|
|
|
|
|
Loss on asset disposals,
net
|
|
270
|
|
|
|
(228)
|
|
|
|
498
|
|
|
>100%
|
|
|
|
|
|
|
|
131,110
|
|
|
|
130,088
|
|
|
|
1,022
|
|
|
1%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating income
|
$
|
24,896
|
|
|
$
|
24,170
|
|
|
$
|
726
|
|
|
3%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Competitive Local Exchange
Carrier Operations
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenues
|
$
|
45,596
|
|
|
$
|
47,325
|
|
|
$
|
(1,729)
|
|
|
(4%)
|
|
|
|
|
Expenses (excluding Depreciation, amortization
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
and accretion)
|
|
39,116
|
|
|
|
40,473
|
|
|
|
(1,357)
|
|
|
(3%)
|
|
|
|
|
Depreciation, amortization and
accretion
|
|
5,439
|
|
|
|
6,302
|
|
|
|
(863)
|
|
|
(14%)
|
|
|
|
|
Loss on asset disposals,
net
|
|
47
|
|
|
|
160
|
|
|
|
(113)
|
|
|
(71%)
|
|
|
|
|
|
|
|
44,602
|
|
|
|
46,935
|
|
|
|
(2,333)
|
|
|
(5%)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating income
|
$
|
994
|
|
|
$
|
390
|
|
|
$
|
604
|
|
|
>100%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Intercompany revenues
|
$
|
(2,706)
|
|
|
$
|
(2,377)
|
|
|
$
|
(329)
|
|
|
(14%)
|
|
|
Intercompany expenses
|
|
(2,706)
|
|
|
|
(2,377)
|
|
|
|
(329)
|
|
|
(14%)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total TDS Telecom operating
income
|
$
|
25,890
|
|
|
$
|
24,560
|
|
|
$
|
1,330
|
|
|
5%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
TDS Telecom
Highlights
|
|
|
Six Months
Ended June 30,
|
|
|
(Unaudited,
dollars in thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Increase
(Decrease)
|
|
|
|
|
|
|
2011
|
|
|
2010
|
|
|
Amount
|
|
Percent
|
|
|
Local Telephone
Operations
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating
revenues
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Voice
|
$
|
86,086
|
|
|
$
|
90,296
|
|
|
$
|
(4,210)
|
|
|
(5%)
|
|
|
|
|
Data
|
|
73,150
|
|
|
|
60,291
|
|
|
|
12,859
|
|
|
21%
|
|
|
|
|
Network access
|
|
132,492
|
|
|
|
134,893
|
|
|
|
(2,401)
|
|
|
(2%)
|
|
|
|
|
Miscellaneous
|
|
20,094
|
|
|
|
18,934
|
|
|
|
1,160
|
|
|
6%
|
|
|
|
|
|
|
|
311,822
|
|
|
|
304,414
|
|
|
|
7,408
|
|
|
2%
|
|
|
|
Operating
expenses
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of services and
products
|
|
97,523
|
|
|
|
95,794
|
|
|
|
1,729
|
|
|
2%
|
|
|
|
|
Selling, general and
administrative expenses
|
|
80,790
|
|
|
|
85,904
|
|
|
|
(5,114)
|
|
|
(6%)
|
|
|
|
|
Depreciation, amortization and
accretion
|
|
77,751
|
|
|
|
73,905
|
|
|
|
3,846
|
|
|
5%
|
|
|
|
|
Loss on asset disposals,
net
|
|
343
|
|
|
|
32
|
|
|
|
311
|
|
|
>100%
|
|
|
|
|
|
|
|
256,407
|
|
|
|
255,635
|
|
|
|
772
|
|
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating income
|
$
|
55,415
|
|
|
$
|
48,779
|
|
|
$
|
6,636
|
|
|
14%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Competitive Local Exchange
Carrier Operations
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenues
|
$
|
90,924
|
|
|
$
|
95,068
|
|
|
$
|
(4,144)
|
|
|
(4%)
|
|
|
|
|
Expenses (excluding Depreciation, amortization
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
and accretion
|
|
77,236
|
|
|
|
80,503
|
|
|
|
(3,267)
|
|
|
(4%)
|
|
|
|
|
Depreciation, amortization and
accretion
|
|
10,929
|
|
|
|
12,667
|
|
|
|
(1,738)
|
|
|
(14%)
|
|
|
|
|
Loss on asset disposals,
net
|
|
78
|
|
|
|
245
|
|
|
|
(167)
|
|
|
(68%)
|
|
|
|
|
|
|
|
88,243
|
|
|
|
93,415
|
|
|
|
(5,172)
|
|
|
(6%)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating income
|
$
|
2,681
|
|
|
$
|
1,653
|
|
|
$
|
1,028
|
|
|
62%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Intercompany revenues
|
$
|
(4,934)
|
|
|
$
|
(4,771)
|
|
|
$
|
(163)
|
|
|
(3%)
|
|
|
Intercompany expenses
|
|
(4,934)
|
|
|
|
(4,771)
|
|
|
|
(163)
|
|
|
(3%)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total TDS Telecom operating
income
|
$
|
58,096
|
|
|
$
|
50,432
|
|
|
$
|
7,664
|
|
|
15%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Telephone
and Data Systems, Inc.
|
|
|
Financial
Measures and Reconciliations
|
|
(Unaudited,
dollars in thousands)
|
|
Three Months Ended June 30,
2011
|
|
U.S. Cellular
|
|
TDS Telecom (1)
|
|
All Other (2)
|
|
Consolidated
Total
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating
revenues
|
|
$
|
1,076,182
|
|
$
|
198,896
|
|
$
|
4,562
|
|
$
|
1,279,640
|
|
|
|
Deduct:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
U.S. Cellular equipment sales revenue
|
|
|
74,152
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Service revenues
|
|
|
1,002,030
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating income
(loss)
|
|
|
102,390
|
|
|
25,890
|
|
|
(2,631)
|
|
|
125,649
|
|
|
|
Add (Deduct):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Depreciation, amortization and accretion
|
|
|
148,283
|
|
|
43,843
|
|
|
2,625
|
|
|
194,751
|
|
|
|
|
Loss on impairment of intangible
assets
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
|
|
(Gain) Loss on asset
disposals
|
|
|
2,922
|
|
|
317
|
|
|
(1)
|
|
|
3,238
|
|
|
|
|
|
Adjusted OIBDA
(3)
|
|
$
|
253,595
|
|
$
|
70,050
|
|
$
|
(7)
|
|
$
|
323,638
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted OIBDA margin
(4)
|
|
|
25.3%
|
|
|
35.2%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended June 30,
2010
|
|
U.S.
Cellular
|
|
TDS Telecom
(1)
|
|
All Other
(2)
|
|
Consolidated
Total
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating
revenues
|
|
$
|
1,029,893
|
|
$
|
199,206
|
|
$
|
3,120
|
|
$
|
1,232,219
|
|
|
|
Deduct:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
U.S. Cellular equipment sales
revenue
|
|
|
57,317
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Service revenues
|
|
|
972,576
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating income
(loss)
|
|
|
63,504
|
|
|
24,560
|
|
|
(1,683)
|
|
|
86,381
|
|
|
|
Add (Deduct):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Depreciation, amortization and
accretion
|
|
|
144,455
|
|
|
43,149
|
|
|
2,654
|
|
|
190,258
|
|
|
|
|
Loss on impairment of intangible
assets
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
|
|
(Gain) Loss on asset
disposals
|
|
|
1,250
|
|
|
(68)
|
|
|
32
|
|
|
1,214
|
|
|
|
|
|
Adjusted OIBDA
(3)
|
|
$
|
209,209
|
|
$
|
67,641
|
|
$
|
1,003
|
|
$
|
277,853
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted OIBDA margin
(4)
|
|
|
21.5%
|
|
|
34.0%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
TDS
Consolidated
|
|
|
|
|
|
|
|
|
Three Months Ended June
30,
|
|
2011
|
|
2010
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash flows from operating
activities
|
|
$
|
275,873
|
|
$
|
291,686
|
|
|
|
|
|
|
|
|
|
Deduct:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Capital expenditures
|
|
|
211,248
|
|
|
171,328
|
|
|
|
|
|
|
|
|
|
|
|
Free cash flow
(5)
|
|
$
|
64,625
|
|
$
|
120,358
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Telephone
and Data Systems, Inc.
|
|
|
Financial
Measures and Reconciliations
|
|
(Unaudited,
dollars in thousands)
|
|
Six Months Ended June 30,
2011
|
|
U.S. Cellular
|
|
TDS Telecom (1)
|
|
All Other (2)
|
|
Consolidated
Total
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating
revenues
|
|
$
|
2,133,274
|
|
$
|
397,812
|
|
$
|
7,235
|
|
$
|
2,538,321
|
|
|
|
Deduct:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
U.S. Cellular equipment sales revenue
|
|
|
146,131
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Service revenues
|
|
|
1,987,143
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating income
(loss)
|
|
|
159,433
|
|
|
58,096
|
|
|
(4,712)
|
|
|
212,817
|
|
|
|
Add (Deduct):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Depreciation, amortization and accretion
|
|
|
293,328
|
|
|
88,680
|
|
|
5,261
|
|
|
387,269
|
|
|
|
|
Loss on impairment of intangible
assets
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
|
|
Loss on asset
disposals
|
|
|
3,959
|
|
|
421
|
|
|
1
|
|
|
4,381
|
|
|
|
|
|
Adjusted OIBDA
(3)
|
|
$
|
456,720
|
|
$
|
147,197
|
|
$
|
550
|
|
$
|
604,467
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted OIBDA margin
(4)
|
|
|
23.0%
|
|
|
37.0%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Six Months Ended June 30,
2010
|
|
U.S.
Cellular
|
|
TDS Telecom
(1)
|
|
All Other
(2)
|
|
Consolidated
Total
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating
revenues
|
|
$
|
2,053,750
|
|
$
|
394,711
|
|
$
|
6,193
|
|
$
|
2,454,654
|
|
|
|
Deduct:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
U.S. Cellular equipment sales
revenue
|
|
|
116,166
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Service revenues
|
|
|
1,937,584
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating income
(loss)
|
|
|
141,128
|
|
|
50,432
|
|
|
(3,183)
|
|
|
188,377
|
|
|
|
Add (Deduct):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Depreciation, amortization and
accretion
|
|
|
287,688
|
|
|
86,572
|
|
|
5,387
|
|
|
379,647
|
|
|
|
|
Loss on impairment of intangible
assets
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
|
|
(Gain) Loss on asset
disposals
|
|
|
6,426
|
|
|
277
|
|
|
(58)
|
|
|
6,645
|
|
|
|
|
|
Adjusted OIBDA
(3)
|
|
$
|
435,242
|
|
$
|
137,281
|
|
$
|
2,146
|
|
$
|
574,669
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted OIBDA margin
(4)
|
|
|
22.5%
|
|
|
34.8%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
TDS
Consolidated
|
|
|
|
|
|
|
|
|
Six Months Ended June
30,
|
|
2011
|
|
2010
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash flows from operating
activities
|
|
$
|
537,663
|
|
$
|
502,346
|
|
|
|
|
|
|
|
|
|
Deduct:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Capital expenditures
|
|
|
338,711
|
|
|
317,950
|
|
|
|
|
|
|
|
|
|
|
|
Free cash flow
(5)
|
|
$
|
198,952
|
|
$
|
184,396
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
Includes ILEC and CLEC
intercompany eliminations.
|
|
(2)
|
Consists of a non-reportable
segment (Suttle-Straus), corporate operations and, intercompany
eliminations between U.S. Cellular, TDS Telecom and corporate
investments. Amounts in this column are presented only to reconcile
to consolidated totals and may not otherwise be
meaningful.
|
|
(3)
|
Adjusted OIBDA is a segment
measure reported to the chief operating decision maker for purposes
of making decisions about allocating resources to the segments and
assessing their performance. Adjusted OIBDA is defined as
operating income excluding the effects of: depreciation,
amortization and accretion (OIBDA); the net gain or loss on asset
disposals (if any); and the loss on impairment of assets (if any).
This measure also may be commonly referred to by management
as operating cash flow. This measure should not be confused
with Cash flows from operating activities, which is a component of
the Consolidated Statement of Cash flows. Adjusted OIBDA excludes
the net gain or loss on asset disposals and loss on impairment of
assets, if any, in order to show operating results on a more
comparable basis from period to period. TDS does not intend to
imply that any of such amounts that are excluded are non-recurring,
infrequent or unusual, and accordingly, they may be incurred in the
future. TDS believes this measure provides useful information to
investors regarding TDS' financial condition and results of
operations because it highlights certain key cash and non-cash
items and their impacts on cash flows from operating
activities.
|
|
(4)
|
Adjusted OIBDA margin is defined
as adjusted OIBDA divided by service revenues (U.S. Cellular) and
operating revenues (TDS Telecom). Equipment revenues are
excluded from the denominator of the U.S. Cellular calculation
since equipment is generally sold at a net loss, and such net loss
is included in adjusted OIBDA as a cost of earning service revenues
for purposes of assessing business results. TDS believes that this
calculation method is consistent with the method used by certain
investors to assess U.S. Cellular's business results.
Adjusted OIBDA margin may also be commonly referred to by
management as operating cash flow margin.
|
|
(5)
|
Free cash flow is defined as
cash flows from operating activities minus capital expenditures.
Free cash flow is a non-GAAP financial measure. TDS believes
that free cash flow as reported by TDS may be useful to investors
and other users of its financial information in evaluating the
amount of cash generated by business operations, after
consideration of capital expenditures.
|
|
|
|
SOURCE Telephone and Data Systems, Inc.