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TDS Reports Third Quarter 2009 Results
PR Newswire
Nov 05, 2009
CHICAGO, Nov. 5 /PRNewswire-FirstCall/ --
Note: Comparisons are year over year unless otherwise noted.
3Q 2009 Highlights
Enterprise/TDS Corporate
-- Operating revenues were $1,258.7 million.
-- Repurchased 1,149,046 TDS special common shares and 1,484,421 common
shares for a total of $73.9 million.
Wireless/U.S. Cellular®
-- Postpay net additions were 8,000; prepaid net losses were 14,000.
-- Service revenues of $984.9 million, down 3 percent due primarily to a
$24.7 million decrease in inbound roaming revenues.
-- Retail service ARPU (average revenue per unit) increased from $46.97 to
$47.02.
-- 34 percent increase in data revenues, to $174.3 million, representing 18
percent of service revenues. Data revenue per customer increased from
$7.01 to $9.46.
-- Postpay churn was 1.7 percent; postpay customers comprised 96 percent of
retail customers.
-- 7 percent increase in cell sites in service, to 7,161.
Wireline/TDS Telecom®
-- 18 percent increase in ILEC high-speed data customers, to 202,100.
-- 14 percent increase in ILEC data revenues, to $26.2 million,
representing 17 percent of ILEC revenues.
-- ILEC equivalent access lines remained stable at 772,700, due in part to
acquisitions; ILEC physical access lines decreased 5 percent to 539,400.
As previously announced, TDS(TM) will hold a teleconference Nov. 5, 2009 at 10:00 a.m. Chicago time. Interested parties may listen to the call live by accessing the Conference Calls page of www.teldta.com.
Telephone and Data Systems, Inc. (NYSE: TDS, TDS.S) reported operating revenues of $1,258.7 million for the third quarter of 2009, a decrease of 4 percent from $1,304.6 million in the comparable period one year ago. Net income attributable to TDS and related diluted earnings per share were $35.6 million and $0.33, respectively, for the third quarter of 2009, compared to $101.2 million and $0.87, respectively, in the comparable period one year ago. In the third quarter of 2008, TDS recorded a $31.7 million pre-tax gain on disposition of investments related to Rural Cellular Corporation.
"TDS made progress on several strategic fronts this quarter," said LeRoy T. Carlson, Jr., TDS president and CEO. "Both U.S. Cellular and TDS Telecom continued to achieve strong growth in data revenues. While total revenues were down slightly, aggressive marketing and promotional programs at U.S. Cellular were well-received by customers, and TDS Telecom continued to drive sales of bundled services. Backed by TDS' strong financial foundation, both businesses are investing in new technologies and network infrastructure to support future growth and to promote customer loyalty.
"U.S. Cellular accelerated the expansion of its 3G network, now reaching approximately 75 percent of its customer base," continued Carlson. "This network enhancement will further promote the already robust growth in smartphone sales, messaging and data applications. The company is also making headway on the initial stages of long-term initiatives that are designed to spur customer growth and enable more targeted marketing and sales programs, while increasing efficiency. These initiatives will be a major focus for U.S. Cellular in 2010 and beyond.
"TDS Telecom continues to build its portfolio of broadband services and products for residential and commercial customers," added Carlson. "The company is driving strong sales of triple play bundles of voice, broadband and DISH Network(TM) services, and enhancing its hosted solutions for commercial customers. Broadband penetration of TDS Telecom's ILEC customer base is currently 37 percent, which leaves substantial room for future growth.
"And, as part of our ongoing efforts to increase shareholder value, TDS recently completed its second $250 million stock repurchase program, well ahead of schedule. Between June 2007 and October 2009, TDS repurchased more than 14 million shares, representing approximately 12 percent of shares outstanding."
Guidance
Guidance for the year ending Dec. 31, 2009 is as follows. There can be no assurance that final results will not differ materially from this guidance.
U.S. Cellular 2009 guidance as of Nov. 5, 2009 remains unchanged from
Aug. 6, 2009 and is as follows:
Service revenue $3,900-$3,950 million
Operating income(1) $300-$375 million
Depreciation, amortization and accretion(1) Approx. $600 million
Capital expenditures Approx. $575 million
TDS Telecom (ILEC and CLEC) 2009 guidance as of Nov. 5, 2009 is as
follows:
Operating revenues $775-$800 million
Operating income (1) (2) $80-$95 million
Depreciation, amortization and accretion (1) (2) Approx. $170 million
Capital expenditures Approx. $125 million
(1) Includes losses on disposals of assets.
(2) Revised from guidance issued on Aug. 6, 2009.
This guidance represents the views of management as of Nov. 5, 2009 and should not be assumed to be accurate as of any other date. TDS undertakes no legal duty to update such information, whether as a result of new information, future events or otherwise.
Stock repurchase summary
The following represents repurchases of both TDS common shares and TDS special common shares.
Repurchase Period # Shares Cost (in millions)
----------------- -------- ------------------
2009 (fourth quarter) 441,679 $13.4
2009 (third quarter) 2,633,467 $73.9
2009 (second quarter) 2,684,267 $73.9
2009 (first quarter) 504,026 $12.1
2008 (full year) 5,861,822 $199.6
2007 (full year) 2,076,979 $126.7
--------- ------
Total 2009, 2008 and 2007 14,202,240 $499.6
========== ======
Conference call information
TDS will hold a conference call on Nov. 5, 2009 at 10:00 a.m. Chicago time.
-- Access the live call on the Conference Calls page of www.teldta.com or
at
http://phx.corporate-ir.net/phoenix.zhtml?p=irol-eventDetails&c=67422&ev
entID=2517092
-- Access the call by phone at 800/706-9695 (US/Canada) and use conference
ID #38289990.
Before the call, certain financial and statistical information to be discussed during the call will be posted to the Conference Calls page of www.teldta.com, together with reconciliations to generally accepted accounting principles (GAAP) of any non-GAAP information to be disclosed. The call will be archived on the Conference Calls page of www.teldta.com.
About TDS
Telephone and Data Systems, Inc. (TDS), a Fortune 500® company, provides wireless, local and long-distance telephone, and broadband services to approximately 7.3 million customers in 36 states through its business units, U.S. Cellular (wireless) and TDS Telecom (wireline). Founded in 1969 and headquartered in Chicago, TDS employed 12,300 people as of Sept. 30, 2009.
Visit www.teldta.com for comprehensive financial information, including earnings releases, quarterly and annual filings, shareholder information, and more.
About U.S. Cellular®
United States Cellular Corporation, the nation's fifth-largest, full-service wireless carrier, provides a comprehensive range of wireless products and services, excellent customer support, and a high-quality network to approximately 6.1 million customers in 26 states. The Chicago-based company employed 8,700 full-time equivalent associates as of Sept. 30, 2009. For more information about U.S. Cellular, visit www.uscellular.com.
Safe Harbor Statement Under the Private Securities Litigation Reform Act of 1995: All information set forth in this news release, except historical and factual information, represents forward-looking statements. This includes all statements about the company's plans, beliefs, estimates and expectations. These statements are based on current estimates, projections and assumptions, which involve certain risks and uncertainties that could cause actual results to differ materially from those in the forward-looking statements. Important factors that may affect these forward-looking statements include, but are not limited to: The ability of the company to successfully grow its markets; the current credit crisis affecting financial markets, and its effects on the overall economy; competition; the access to and pricing of unbundled network elements; the ability to obtain or maintain roaming arrangements with other carriers; the state and federal telecommunications regulatory environment; the value of assets and investments; adverse changes in the ratings afforded TDS and U.S. Cellular debt securities by accredited ratings organizations; industry consolidation; advances in telecommunications technology; uncertainty of access to the capital markets; pending and future litigation; changes in income tax rates, laws, regulations or rulings; acquisitions/divestitures of properties and/or licenses; and changes in customer growth rates, average monthly revenue per unit, churn rates, roaming revenue and terms, the availability of handset devices, or the mix of products and services offered by U.S. Cellular and TDS Telecom. Investors are encouraged to consider these and other risks and uncertainties that are discussed in the Form 8-K used by TDS to furnish this press release to the SEC, which are incorporated by reference herein.
For more information about TDS and its subsidiaries, visit:
TDS: www.teldta.com
USM: www.uscellular.com
TDS Telecom: www.tdstelecom.com
UNITED STATES CELLULAR CORPORATION
SUMMARY OPERATING DATA
Quarter Ended 9/30/2009 6/30/2009 3/31/2009 12/31/2008 9/30/2008
--------- --------- --------- ---------- ---------
Total population
Consolidated
markets(1) 85,118,000 83,726,000 83,726,000 83,014,000 82,875,000
Consolidated
operating
markets(1) 46,306,000 46,306,000 46,306,000 46,009,000 45,493,000
All customers
Total at end
of period 6,131,000 6,155,000 6,243,000 6,196,000 6,176,000
Gross additions 386,000 317,000 404,000 395,000 367,000
Net additions
(losses) (24,000) (88,000) 47,000 20,000 (18,000)
Market penetration
at end of period
Consolidated
markets(2) 7.2% 7.4% 7.5% 7.5% 7.5%
Consolidated
operating
markets(2) 13.2% 13.3% 13.5% 13.5% 13.6%
Retail customers
Total at end of
period 5,705,000 5,711,000 5,770,000 5,707,000 5,674,000
Gross additions 351,000 286,000 366,000 352,000 325,000
Net postpay
additions
(losses) 8,000 (32,000) 60,000 41,000 12,000
Net prepay
additions
(losses) (14,000) (27,000) 3,000 (8,000) (15,000)
Cell sites in
service 7,161 7,043 6,942 6,877 6,716
Average monthly
revenue per
unit(3) $53.49 $52.41 $52.54 $52.71 $54.59
Retail service
revenue per
unit(3) (5) $47.02 $46.85 $46.78 $46.43 $46.97
Inbound roaming
revenue per
unit(3) (5) $3.73 $3.35 $3.21 $4.25 $5.03
Other revenue
per unit(3) (5) $2.74 $2.21 $2.55 $2.03 $2.59
Postpay churn
rate(4) 1.7% 1.7% 1.5% 1.6% 1.6%
Construction
expenditures
(000s) $128,900 $91,200 $137,700 $190,000 $146,100
(1) Used only to calculate market penetration of consolidated markets and
consolidated operating markets, respectively, which is calculated by
dividing customers by the total market population (without duplication
of population in overlapping markets).
(2) Calculated by dividing the number of wireless customers at the end of
the period by the total population of consolidated markets and
consolidated operating markets, respectively, as estimated by
Claritas.
(3) Derived from Service revenues as reported in Financial Highlights for
each respective quarter as follows
Service revenue
(000s) $984,923 $974,755 $981,874 $976,952 $1,013,928
Components
Retail service
revenue (000s) 865,867 871,209 874,098 860,503 872,397
Inbound roaming
revenue (000s) 68,767 62,223 60,057 78,768 93,472
Other revenue
(000s) 50,289 41,323 47,719 37,681 48,059
Divided by average
customers (000s) 6,138 6,199 6,229 6,178 6,191
Divided by three
months in each
quarter 3 3 3 3 3
--- --- --- --- ---
Average monthly
revenue per unit $53.49 $52.41 $52.54 $52.71 $54.59
Retail service
revenue per unit $47.02 $46.85 $46.78 $46.43 $46.97
Inbound roaming
revenue per unit $3.73 $3.35 $3.21 $4.25 $5.03
Other revenue per
unit $2.74 $2.21 $2.55 $2.03 $2.59
(4) Calculated by dividing the total postpay customer disconnects during
the quarter by the average postpay customer base for the quarter.
(5) Long-distance revenue was reclassified in the fourth quarter of 2008
from Other revenue to Retail service revenue and Inbound roaming
revenue. Previous quarters have been adjusted to reflect this
change.
TELEPHONE AND DATA SYSTEMS, INC.
SUMMARY OPERATING DATA
Quarter Ended 9/30/2009 6/30/2009 3/31/2009 12/31/2008 9/30/2008
--------- --------- --------- ---------- ---------
TDS Telecom
ILEC
Equivalent access
lines(1) 772,700 775,800 777,100 776,700 773,700
Physical access
lines(2) 539,400 548,000 556,800 566,200 568,900
High-speed data
customers(3) 202,100 197,100 188,100 178,300 171,300
Managed IP
stations(4) 1,500 1,200 1,000 600 500
Long-distance
customers 356,500 354,100 348,900 347,000 346,600
Construction
expenditures
(000s) $23,800 $26,200 $21,400 $50,200 $33,300
CLEC
Equivalent access
lines (1) 364,100 372,300 381,000 393,000 402,600
High-speed data
customers(3) 37,600 38,700 39,700 40,800 41,900
Managed IP
stations(4) 9,600 6,400 4,100 2,100 600
Construction
expenditures
(000s) $4,700 $5,700 $5,000 $7,200 $4,500
(1) Sum of physical access lines and high-capacity data lines, adjusted
to estimate the equivalent number of physical access lines in terms
of capacity, plus the number of managed IP stations.
(2) Individual circuits connecting customers to a telephone company's
central office facilities.
(3) The number of customers provided high-capacity data circuits via
various technologies, including digital subscriber line ("DSL"),
managed Internet Protocol ("Managed IP") and dedicated Internet
circuit technologies.
(4) The number of telephone handsets providing communications using
packet networking technology.
Telephone And Data Systems, Inc.
Consolidated Statement of Operations Highlights
Three Months Ended September 30,
(Unaudited, dollars and shares in thousands, except per share amounts)
Increase/(Decrease)
2009 2008 Amount Percent
---- ---- ------ -------
Operating
revenues
U.S. Cellular $1,058,300 $1,091,875 $(33,575) (3)%
TDS Telecom 196,542 205,992 (9,450) (5)%
All Other(1) 3,900 6,731 (2,831) (42)%
----- ----- ------
1,258,742 1,304,598 (45,856) (4)%
--------- --------- --------
Operating expenses
U.S. Cellular
Expenses excluding
depreciation, amortization
and accretion 849,651 819,600 30,051 4%
Depreciation, amortization
and accretion 147,586 145,434 2,152 1%
Loss on asset disposals, net 3,371 6,884 (3,513) (51)%
----- ----- ------
1,000,608 971,918 28,690 3%
--------- ------- ------
TDS Telecom
Expenses excluding
depreciation, amortization
and accretion 131,439 130,944 495 -
Depreciation, amortization
and accretion 41,746 39,036 2,710 7%
Loss on asset disposals, net 1,135 151 984 N/M
----- --- ---
174,320 170,131 4,189 2%
------- ------- -----
All Other(1)
Expenses excluding
depreciation and
amortization 3,185 6,840 (3,655) (53)%
Depreciation and amortization 2,915 3,505 (590) (17)%
Loss on asset disposals, net 51 65 (14) (22)%
--- --- ---
6,151 10,410 (4,259) (41)%
----- ------ ------
Total operating expenses 1,181,079 1,152,459 28,620 2%
--------- --------- ------
Operating income (loss)
U.S. Cellular 57,692 119,957 (62,265) (52)%
TDS Telecom 22,222 35,861 (13,639) (38)%
All Other (1) (2,251) (3,679) 1,428 39%
------ ------ -----
77,663 152,139 (74,476) (49)%
------ ------- --------
Investment and other income
(expense)
Equity in earnings of
unconsolidated entities 23,334 22,566 768 3%
Interest and dividend income 3,461 8,617 (5,156) (60)%
Gain on investments and
financial instruments - 31,997 (31,997) N/M
Interest expense (30,430) (31,684) 1,254 4%
Other, net 1,030 383 647 N/M
----- --- ---
Total investment and other
income (expense) (2,605) 31,879 (34,484) N/M
------ ------ --------
Income before income taxes 75,058 184,018 (108,960) (59)%
Income tax expense 27,793 61,024 (33,231) (54)%
------ ------ --------
Net income 47,265 122,994 (75,729) (62)%
Less: Net income attributable
to noncontrolling interests,
net of tax (11,620) (21,771) 10,151 47%
------- ------- ------
Net income attributable to TDS 35,645 101,223 (65,578) (65)%
Preferred dividend requirement (13) (13) - -
--- --- ---
Net income available to common $35,632 $101,210 $(65,578) (65)%
======= ======== ========
Basic weighted average shares
outstanding 108,289 115,700 (7,411) (6)%
Basic earnings per share
attributable to TDS
shareholders $0.33 $0.87 $(0.54) (62)%
Diluted weighted average shares
outstanding 108,565 116,193 (7,628) (7)%
Diluted earnings per share
attributable to TDS
shareholders $0.33 $0.87 $(0.54) (62)%
(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
Nine Months Ended September 30,
(Unaudited, dollars and shares in thousands, except per share amounts)
Increase/(Decrease)
2009 2008 Amount Percent
---- ---- ------ -------
Operating revenues
U.S. Cellular $3,153,614 $3,190,323 $(36,709) (1)%
TDS Telecom 591,804 619,492 (27,688) (4)%
All Other(1) 12,447 18,235 (5,788) (32)%
------ ------ ------
3,757,865 3,828,050 (70,185) (2)%
--------- --------- --------
Operating expenses
U.S. Cellular
Expenses excluding
depreciation,
amortization
and accretion 2,408,734 2,383,500 25,234 1%
Depreciation,
amortization and
accretion 423,851 433,222 (9,371) (2)%
Loss on asset disposals, net 7,648 16,776 (9,128) (54)%
----- ------ ------
2,840,233 2,833,498 6,735 -
--------- --------- -----
TDS Telecom
Expenses excluding
depreciation,
amortization
and accretion 398,002 392,661 5,341 1%
Depreciation,
amortization and
accretion 125,272 117,615 7,657 7%
Loss on asset disposals, net 1,752 349 1,403 N/M
----- --- -----
525,026 510,625 14,401 3%
------- ------- ------
All Other(1)
Expenses excluding
depreciation and
amortization 14,826 17,049 (2,223) (13)%
Depreciation and amortization 9,239 11,322 (2,083) (18)%
Loss on asset disposals, net 69 65 4 6%
--- --- ---
24,134 28,436 (4,302) (15)%
------ ------ ------
Total operating expenses 3,389,393 3,372,559 16,834 -
--------- --------- ------
Operating income (loss)
U.S. Cellular 313,381 356,825 (43,444) (12)%
TDS Telecom 66,778 108,867 (42,089) (39)%
All Other (1) (11,687) (10,201) (1,486) (15)%
------- ------- ------
368,472 455,491 (87,019) (19)%
------- ------- --------
Investment and other income
(expense)
Equity in earnings of
unconsolidated entities 67,034 66,945 89 -
Interest and dividend income 8,435 35,818 (27,383) (76)%
Interest expense (92,780) (108,634) 15,854 15%
Loss on investments and
financial instruments - 31,595 (31,595) N/M
Other, net 1,504 2,086 (582) (28)%
----- ----- ----
Total investment and
other income (expense) (15,807) 27,810 (43,617) N/M
------- ------ --------
Income before income taxes 352,665 483,301 (130,636) (27)%
Income tax expense 121,467 163,536 (42,069) (26)%
------- ------- --------
Net income 231,198 319,765 (88,567) (28)%
Less: Net income
attributable to
noncontrolling
interests, net of tax (53,814) (57,298) 3,484 6%
------- ------- -----
Net income attributable to TDS 177,384 262,467 (85,083) (32)%
Preferred dividend
requirement (38) (39) 1 3%
--- --- ---
Net income available to common $177,346 $262,428 $(85,082) (32)%
======== ======== ========
Basic weighted average shares
outstanding 110,408 116,510 (6,102) (5)%
Basic earnings per share
attributable to TDS
shareholders $1.61 $2.25 $(0.64) (28)%
Diluted weighted average
shares outstanding 110,633 117,065 (6,432) (5)%
Diluted earnings per share
attributable to TDS
shareholders $1.60 $2.24 $(0.64) (29)%
(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
September 30, December 31,
2009 2008
---- ----
Current assets
Cash and cash equivalents $778,159 $777,309
Short-term investments 136,400 27,705
Accounts receivable from customers and other 541,211 516,849
Inventory 126,007 122,377
Other current assets 196,247 184,696
------- -------
1,778,024 1,628,936
--------- ---------
Investments
Licenses 1,453,526 1,441,440
Goodwill 707,840 707,079
Customer lists 25,577 34,032
Investments in unconsolidated entities 219,760 205,768
Other investments 9,996 10,623
----- ------
2,416,699 2,398,942
--------- ---------
Property, plant and equipment, net
U.S. Cellular 2,561,766 2,620,376
TDS Telecom 880,838 918,454
Other 30,265 30,094
------ ------
3,472,869 3,568,924
--------- ---------
Other assets and deferred charges 65,583 55,614
------ ------
Total assets $7,733,175 $7,652,416
========== ==========
Telephone and Data Systems, Inc.
Consolidated Balance Sheet Highlights
(Unaudited, dollars in thousands)
LIABILITIES AND STOCKHOLDERS' EQUITY
September 30, December 31,
2009 2008
---- ----
Current liabilities
Current portion of long-term debt $15,126 $15,337
Accounts payable 297,249 319,575
Customer deposits and deferred revenues 170,493 174,101
Accrued interest 24,129 14,236
Accrued taxes 66,661 25,192
Accrued compensation 84,125 90,512
Other current liabilities 116,041 134,334
------- -------
773,824 773,287
Deferred liabilities and credits
Net deferred income tax liability 499,002 471,623
Other deferred liabilities and credits 384,032 368,045
------- -------
883,034 839,668
Long-term debt 1,620,979 1,621,422
Noncontrolling interests with mandatory
redemption features 708 589
Equity
TDS stockholders' equity
Common Shares, par value $.01 571 571
Special Common Shares, par value $.01 634 634
Series A Common Shares, par value $.01 65 65
Capital in excess of par value 2,084,481 2,066,597
Treasury shares, at cost:
Common Shares (206,244) (163,017)
Special Common Shares (462,788) (350,091)
Accumulated other comprehensive loss (12,951) (16,812)
Retained earnings 2,370,595 2,229,540
--------- ---------
Total TDS stockholders' equity 3,774,363 3,767,487
Preferred shares 845 852
Noncontrolling interests 679,422 649,111
------- -------
Total equity 4,454,630 4,417,450
Total liabilities and equity $7,733,175 $7,652,416
========== ==========
Telephone and Data System, Inc.
Balance Sheet Highlights
Three Months Ended September 30, 2009
(Unaudited, dollars in thousands)
TDS TDS
U.S. TDS Corporate Intercompany Consoli-
Cellular Telecom & Other Eliminations dated
-------- ------- ------- ------------ -----
Cash and cash
equivalents $404,894 $28,336 $344,929 $- $778,159
Affiliated cash
investments - 523,179 - (523,179) -
Short-term
investments 180 136,220 - - 136,400
Notes receivable-
affiliates - - 253,582 (253,582) -
--- --- ------- -------- ---
$405,074 $687,735 $598,511 $(776,761) $914,559
======== ======== ======== ========= ========
Licenses, goodwill
and customer
lists $1,945,511 $435,836 $(194,404) $- $2,186,943
Investment in
unconsolidated
entities 177,497 3,656 44,249 (5,642) 219,760
Other
investments 4,247 2,307 3,442 - 9,996
----- ----- ----- --- -----
$2,127,255 $441,799 $(146,713) $(5,642) $2,416,699
========== ======== ========= ======= ==========
Property, plant
and equipment,
net $2,561,766 $880,838 $30,265 $- $3,472,869
========== ======== ======= === ==========
Notes payable-
affiliates $- $253,582 $523,179 $(776,761) $-
=== ======== ======== ========= ===
Long-term debt
Current portion $10,088 $428 $4,610 $- $15,126
Non-current
portion 997,552 2,347 621,080 - 1,620,979
------- ----- ------- --- ---------
Total $1,007,640 $2,775 $625,690 $- $1,636,105
========== ====== ======== === ==========
Preferred shares $- $- $845 $- $845
=== === ==== === ====
Construction
expenditures
Quarter ended
9/30/09 $128,900 $28,500 $2,400 $- $159,800
Nine months ended
9/30/09 $357,800 $86,800 $6,000 $- $450,600
TDS Telecom Highlights
Three Months Ended September 30,
(Unaudited, dollars in thousands)
Increase (Decrease)
------------------
2009 2008 Amount Percent
---- ---- ------ -------
Local Telephone Operations
Operating revenues
Voice $46,462 $51,222 $(4,760) (9)%
Data 26,166 22,964 3,202 14%
Network access 66,963 69,199 (2,236) (3)%
Miscellaneous 10,068 9,604 464 5%
------ ----- ---
149,659 152,989 (3,330) (2)%
------- ------- ------
Operating expenses
Cost of services
and products 50,352 47,337 3,015 6%
Selling, general and
administrative expenses 41,397 40,311 1,086 3%
Depreciation,
amortization and
accretion 35,652 33,469 2,183 7%
Loss on asset disposals,
net 1,072 78 994 N/M
----- -- ---
128,473 121,195 7,278 6%
------- ------- -----
Operating income $21,186 $31,794 $(10,608) (33)%
------- ------- ---------
Competitive Local Exchange
Carrier Operations
Revenues $49,153 $54,690 $(5,537) (10)%
------- ------- -------
Expenses excluding
depreciation,
amortization and
accretion 41,960 44,983 (3,023) (7)%
Depreciation,
amortization and
accretion 6,094 5,567 527 9%
Loss on asset disposals,
net 63 73 (10) (14)%
--- --- ---
48,117 50,623 (2,506) (5)%
------ ------ ------
Operating income $1,036 $4,067 $(3,031) (75)%
------ ------ -------
Intercompany revenues $(2,270) $(1,687) $(583) (35)%
Intercompany expenses (2,270) (1,687) (583) (35)%
------ ------ ----
- - -
--- --- ---
Total TDS Telecom operating
income $22,222 $35,861 $(13,639) (38)%
======= ======= =========
N/M - Percentage change not meaningful.
TDS Telecom Highlights
Nine Months Ended September 30,
(Unaudited, dollars in thousands)
Increase (Decrease)
-------------------
2009 2008 Amount Percent
---- ---- ------ -------
Local Telephone Operations
Operating revenues
Voice $141,919 $153,723 $(11,804) (8)%
Data 76,717 65,888 10,829 16%
Network access 201,912 210,008 (8,096) (4)%
Miscellaneous 27,506 28,384 (878) (3)%
------ ------ ----
448,054 458,003 (9,949) (2)%
------- ------- ------
Operating expenses
Cost of services and products 146,442 139,044 7,398 5%
Selling, general and
administrative expenses 128,254 124,208 4,046 3%
Depreciation, amortization
and accretion 107,040 100,595 6,445 6%
Loss on asset disposals, net 1,493 32 1,461 N/M
----- -- -----
383,229 363,879 19,350 5%
------- ------- ------
Operating income $64,825 $94,124 $(29,299) (31)%
------- ------- --------
Competitive Local Exchange Carrier
Operations
Revenues $150,435 $166,707 $(16,272) (10)%
-------- -------- --------
Expenses excluding
depreciation, amortization
and accretion 129,991 134,627 (4,636) (3)%
Depreciation, amortization
and accretion 18,232 17,020 1,212 7%
Loss on asset disposals, net 259 317 (58) (18)%
--- --- ---
148,482 151,964 (3,482) (2)%
------- ------- ------
Operating income $1,953 $14,743 $(12,790) (87)%
------ ------- ---------
Intercompany revenues $(6,685) $(5,218) $(1,467) (28)%
Intercompany expenses (6,685) (5,218) (1,467) (28)%
------ ------ ------
- - -
--- --- ---
Total TDS Telecom operating income $66,778 $108,867 $(42,089) (39)%
======= ======== ========
N/M - Percentage change not meaningful.
Telephone and Data Systems, Inc.
Consolidated Statement of Cash Flows
(Unaudited)
Nine Months Ended
September 30,
----------------
2009 2008
---- ----
(Dollars in thousands)
Cash flows from operating activities
Net income $231,198 $319,765
Add (deduct) adjustments to reconcile
net income to net cash flows from
operating activities
Depreciation, amortization and accretion 558,362 562,159
Bad debts expense 78,941 59,452
Stock-based compensation expense 24,523 15,961
Deferred income taxes, net 25,935 (298,200)
(Gain)/loss on investments and financial
instruments, net - (31,595)
Equity in earnings of unconsolidated
entities (67,034) (66,945)
Distributions from unconsolidated entities 51,668 51,224
Loss on asset disposals, net 9,469 17,190
Noncash interest expense 2,160 8,573
Excess tax benefit from stock awards (5) (1,832)
Other operating activities (41) (1,955)
Changes in assets and liabilities from
operations
Accounts receivable (102,137) (82,857)
Inventory (3,595) (12,929)
Accounts payable (29,401) 7,140
Customer deposits and deferred revenues (3,609) 9,827
Accrued taxes 82,267 109,269
Accrued interest 9,893 5,528
Other assets and liabilities (68,643) (37,951)
------- -------
799,951 631,824
------- -------
Cash flows from investing activities
Additions to property, plant and equipment (450,594) (485,028)
Cash paid for acquisitions and licenses (15,242) (336,259)
Cash received from divestitures 50 6,838
Proceeds from disposition of investments - 259,017
Cash paid to settle derivative liabilities - (17,404)
Cash paid for short-term investments (109,055) -
Other investing activities 3,285 (832)
----- ----
(571,556) (573,668)
-------- --------
Cash flows from financing activities
Issuance of notes payable - 100,000
Repayment of notes payable - (100,000)
Repayment of variable prepaid forward
contracts - (47,357)
Repayment of long-term debt (2,507) (8,296)
TDS Common Shares and Special Common Shares
reissued for benefit plans, net of tax
payments 1,296 1,916
U.S. Cellular Common Shares reissued for
benefit plans, net of tax payments (119) (1,286)
Excess tax benefit from stock awards 5 1,832
Repurchase of TDS Common and Special Common
Shares (152,918) (111,769)
Repurchase of U.S. Cellular Common Shares (24,283) (23,146)
Dividends paid (35,389) (35,783)
Payment of debt issuance costs (10,074) -
Distributions to noncontrolling interests (4,962) (6,539)
Other financing activities 1,406 3,909
----- -----
(227,545) (226,519)
-------- --------
Net increase (decrease) in cash and cash
equivalents 850 (168,363)
Cash and cash equivalents
Beginning of period 777,309 1,174,446
------- ---------
End of period $778,159 $1,006,083
======== ==========
SOURCE Telephone and Data Systems, Inc.
Copyright (2009) PR Newswire. All Rights Reserved.
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