CHICAGO, Nov. 4, 2011 /PRNewswire/ --
Note: Comparisons are year over year unless otherwise
noted.
3Q 2011 Highlights
TDS Consolidated
- Operating revenues increased 5 percent to $1.3 billion.
- Operating income increased 50 percent to $126.9 million.
- Diluted earnings per share attributable to TDS shareholders
increased to $0.68 from $0.39.
U.S. Cellular
- Smartphones sold, as a percent of total devices sold, increased
to 39.9 percent from 23.6 percent; smartphone customers increased
to 26.2 percent of postpaid customers from 12.1 percent.
- Postpaid ARPU (average revenue per unit) increased to
$52.41 from $50.82.
- Service revenues increased 5 percent to $1,036.6 million.
- Operating income increased 66 percent to $101.6 million.
- Net loss of 23,000 retail customers, reflecting loss of 34,000
postpaid customers and gain of 11,000 prepaid customers; postpaid
customers comprised 95 percent of retail customers.
- Cell sites in service increased 4 percent to 7,828.
TDS Telecom
- Operating revenues increased 4 percent to $210.8 million.
- Operating income increased 2 percent to $25.2 million.
- ILEC triple play penetration increased to 28.5 percent from
24.6 percent.
- managedIP stations (ILEC and CLEC) grew to 39,400 from
23,400.
As previously announced, TDS will hold a teleconference
Nov. 4, 2011 at 9:00 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 $1,325.4
million for the third quarter of 2011, an increase of 5
percent from $1,266.4 million in the
comparable period one year ago. Net income attributable to TDS
shareholders and related diluted earnings per share were
$71.3 million and $0.68, respectively, for the third quarter of
2011, compared to $41.4 million and
$0.39, respectively, in the
comparable period one year ago.
"U.S. Cellular and TDS Telecom are focused on competing more
effectively for new customers," said LeRoy
T. Carlson, Jr., TDS president and CEO, "while continuing to
satisfy and retain their current customers. Both companies are also
working to improve operational excellence and efficiency."
"U.S. Cellular increased its margins and profitability, through
growth in inbound roaming revenue, and through expense control.
Average revenue per customer also grew, as more customers chose
smartphones and data plans.
"TDS Telecom had a solid quarter, increasing operating revenues
and operating income. ILEC data revenues continued to increase, due
mainly to growth in hosted and managed services revenues and
high-speed data customers. TDS Telecom also continued to add
managedIP stations in its commercial business.
"The TDS Board of Directors is currently considering potential
changes to our share consolidation proposal and anticipates
completing this review process in the near future. Management and
the TDS Board of Directors continue to believe that the share
consolidation is in the best interests of all TDS shareowners and
will simplify TDS' capital structure, improve market liquidity and
provide greater financial flexibility."
Guidance for year ending Dec. 31,
2011
Guidance for the year ending Dec. 31,
2011, as of Nov. 4, 2011, is
provided below, compared to the previous guidance provided on
Aug. 8, 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)
|
$230-$305
million
|
|
$210-$285
million
|
|
|
Depreciation, amortization and
accretion expenses,
|
|
|
|
|
|
and losses on asset
disposals and exchanges
|
Approx. $590
million
|
|
Unchanged
|
|
|
and impairment of assets
(3)
|
|
|
|
|
|
Adjusted OIBDA (2)
(4)
|
$820-$895
million
|
|
$800-$875
million
|
|
|
Capital expenditures
(4)
|
$750-$800
million
|
|
Unchanged
|
|
|
|
|
|
|
|
TDS Telecom
|
|
|
|
|
|
Operating revenues
|
$800-$830
million
|
|
Unchanged
|
|
|
Operating income (3)
|
$85-$115
million
|
|
Unchanged
|
|
|
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
|
|
Unchanged
|
|
|
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 June 30, 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 and exchanges (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 operations, 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 2015.
|
|
|
|
Stock repurchase summary
The following represents repurchases of TDS Common Shares and
TDS Special Common Shares.
|
|
|
Repurchase Period
|
|
#
Shares
|
|
Cost (in
millions)
|
|
|
2011 (YTD)
|
|
748,246
|
|
$
|
21.5
|
|
|
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 Nov.
4, 2011 at 9:00 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=82599.
- 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.
IMPORTANT INFORMATION: The foregoing information is not a
solicitation of a proxy from any TDS shareholder. This is
being done only pursuant to a definitive proxy statement.
Additional information relating to the foregoing is included in
TDS' proxy materials filed with the Securities and Exchange
Commission ("SEC") and distributed to shareholders. INVESTORS
AND SECURITY HOLDERS ARE ADVISED TO READ SUCH MATERIALS BECAUSE
THEY CONTAIN IMPORTANT INFORMATION. Shareholders and other
investors may access such materials without charge at the SEC's web
site (www.sec.gov) and on the TDS web site (www.teldta.com) in the
Investor Relations section on the SEC filings page. In addition,
shareholders may obtain free copies of the proxy materials by
contacting TDS' proxy solicitor, MacKenzie Partners at (800)
322-2885. TDS and its executive officers and directors may be
deemed to be participants in the solicitation of proxies from TDS
shareholders on behalf of the TDS board of directors in connection
with the foregoing. Information concerning such participants
and their respective direct or indirect interests in TDS by
security holdings or otherwise is included in TDS' definitive proxy
statement.
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 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
September 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
|
|
9/30/2011
|
|
|
6/30/2011
|
|
|
3/31/2011
|
|
|
12/31/2010
|
|
|
9/30/2010
|
|
Total population
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Consolidated markets
(1)
|
|
91,965,000
|
|
|
91,204,000
|
|
|
91,090,000
|
|
|
90,468,000
|
|
|
90,468,000
|
|
|
Consolidated operating markets
(1)
|
|
46,888,000
|
|
|
46,888,000
|
|
|
46,774,000
|
|
|
46,546,000
|
|
|
46,546,000
|
|
Market penetration at end of
period
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Consolidated markets
(2)
|
|
6.5%
|
|
|
6.5%
|
|
|
6.6%
|
|
|
6.7%
|
|
|
6.7%
|
|
|
Consolidated operating markets
(2)
|
|
12.7%
|
|
|
12.7%
|
|
|
12.9%
|
|
|
13.0%
|
|
|
13.1%
|
|
All customers
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total at end of
period
|
|
5,932,000
|
|
|
5,968,000
|
|
|
6,033,000
|
|
|
6,072,000
|
|
|
6,103,000
|
|
|
Gross additions
|
|
299,000
|
|
|
257,000
|
|
|
293,000
|
|
|
327,000
|
|
|
338,000
|
|
|
Net additions
(losses)
|
|
(36,000)
|
|
|
(70,000)
|
|
|
(39,000)
|
|
|
(31,000)
|
|
|
(41,000)
|
|
|
Smartphones sold as a percent
of
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
total
devices sold (3)
|
|
39.9%
|
|
|
39.6%
|
|
|
42.5%
|
|
|
39.6%
|
|
|
23.6%
|
|
Retail customers
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total at end of
period
|
|
5,621,000
|
|
|
5,644,000
|
|
|
5,698,000
|
|
|
5,729,000
|
|
|
5,750,000
|
|
|
Smartphone penetration (3)
(4)
|
|
26.2%
|
|
|
23.0%
|
|
|
20.2%
|
|
|
16.6%
|
|
|
12.1%
|
|
|
Gross additions
|
|
284,000
|
|
|
226,000
|
|
|
256,000
|
|
|
292,000
|
|
|
301,000
|
|
|
Net retail additions (losses)
(5)
|
|
(23,000)
|
|
|
(58,000)
|
|
|
(31,000)
|
|
|
(21,000)
|
|
|
(25,000)
|
|
|
Net postpaid
additions (losses)
|
|
(34,000)
|
|
|
(41,000)
|
|
|
(22,000)
|
|
|
(10,000)
|
|
|
(25,000)
|
|
|
Net prepaid
additions (losses)
|
|
11,000
|
|
|
(17,000)
|
|
|
(9,000)
|
|
|
(11,000)
|
|
|
—
|
|
Service revenue components
(000s)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Retail service
|
$
|
871,199
|
|
$
|
868,630
|
|
$
|
864,602
|
|
$
|
864,905
|
|
$
|
865,766
|
|
|
Inbound roaming
|
|
107,810
|
|
|
82,760
|
|
|
64,386
|
|
|
67,545
|
|
|
72,901
|
|
|
Other
|
|
57,600
|
|
|
50,640
|
|
|
56,125
|
|
|
59,464
|
|
|
44,836
|
|
Total service revenues
(000s)
|
$
|
1,036,609
|
|
$
|
1,002,030
|
|
$
|
985,113
|
|
$
|
991,914
|
|
$
|
983,503
|
|
Total ARPU (6)
|
$
|
58.09
|
|
$
|
55.69
|
|
$
|
54.29
|
|
$
|
54.37
|
|
$
|
53.53
|
|
Billed ARPU (7)
|
$
|
48.82
|
|
$
|
48.27
|
|
$
|
47.65
|
|
$
|
47.41
|
|
$
|
47.12
|
|
Postpaid ARPU (8)
|
$
|
52.41
|
|
$
|
51.84
|
|
$
|
51.21
|
|
$
|
50.99
|
|
$
|
50.82
|
|
Postpaid churn rate
(9)
|
|
1.5%
|
|
|
1.4%
|
|
|
1.4%
|
|
|
1.5%
|
|
|
1.6%
|
|
Capital expenditures
(000s)
|
$
|
248,000
|
|
$
|
162,100
|
|
$
|
95,900
|
|
$
|
203,400
|
|
$
|
124,700
|
|
Cell sites in
service
|
|
7,828
|
|
|
7,770
|
|
|
7,663
|
|
|
7,645
|
|
|
7,524
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(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
|
|
9/30/2011
|
|
|
6/30/2011
|
|
|
3/31/2011
|
|
|
12/31/2010
|
|
|
9/30/2010
|
|
TDS Telecom
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
ILEC:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Equivalent access lines
(1)
|
|
762,500
|
|
|
764,600
|
|
|
765,300
|
|
|
767,200
|
|
|
773,800
|
|
|
Physical access lines
(2)
|
|
490,200
|
|
|
496,300
|
|
|
501,200
|
|
|
507,700
|
|
|
517,000
|
|
|
High-speed data customers
(3)
|
|
239,000
|
|
|
235,600
|
|
|
231,800
|
|
|
227,700
|
|
|
225,400
|
|
|
Long-distance
customers
|
|
373,300
|
|
|
373,200
|
|
|
370,600
|
|
|
370,100
|
|
|
370,800
|
|
|
managedIP stations
(4)
|
|
5,800
|
|
|
5,100
|
|
|
4,300
|
|
|
3,600
|
|
|
3,100
|
|
|
Capital expenditures
(000s)
|
$
|
51,500
|
|
$
|
39,100
|
|
$
|
22,100
|
|
$
|
55,700
|
|
$
|
33,000
|
|
|
CLEC:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Equivalent access lines
(1)
|
|
322,600
|
|
|
328,700
|
|
|
331,000
|
|
|
335,400
|
|
|
338,700
|
|
|
High-speed data customers
(3)
|
|
30,200
|
|
|
31,500
|
|
|
32,300
|
|
|
33,100
|
|
|
33,900
|
|
|
managedIP stations
(4)
|
|
33,600
|
|
|
30,200
|
|
|
27,200
|
|
|
23,800
|
|
|
20,300
|
|
|
Capital expenditures
(000s)
|
$
|
4,700
|
|
$
|
6,200
|
|
$
|
4,200
|
|
$
|
6,200
|
|
$
|
5,500
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(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 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 September 30,
|
|
|
(Unaudited,
dollars and shares in thousands, except per share
amounts)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Increase/
(Decrease)
|
|
|
|
|
|
|
2011
|
|
|
2010 (1)
|
|
|
Amount
|
|
|
Percent
|
|
|
Operating revenues
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
U.S. Cellular
|
$
|
1,110,439
|
|
|
$
|
1,060,781
|
|
|
$
|
49,658
|
|
|
|
5%
|
|
|
|
TDS Telecom
|
|
210,806
|
|
|
|
202,030
|
|
|
|
8,776
|
|
|
|
4%
|
|
|
|
All Other (2)
|
|
4,178
|
|
|
|
3,605
|
|
|
|
573
|
|
|
|
16%
|
|
|
|
|
|
|
|
1,325,423
|
|
|
|
1,266,416
|
|
|
|
59,007
|
|
|
|
5%
|
|
|
Operating
expenses
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
U.S. Cellular
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Expenses excluding depreciation,
amortization and accretion
|
|
876,855
|
|
|
|
854,250
|
|
|
|
22,605
|
|
|
|
3%
|
|
|
|
|
Depreciation, amortization and
accretion
|
|
141,664
|
|
|
|
143,191
|
|
|
|
(1,527)
|
|
|
|
(1%)
|
|
|
|
|
(Gain) loss on asset disposals
and exchanges, net
|
|
(9,700)
|
|
|
|
1,981
|
|
|
|
(11,681)
|
|
|
|
> (100%)
|
|
|
|
|
|
|
|
1,008,819
|
|
|
|
999,422
|
|
|
|
9,397
|
|
|
|
1%
|
|
|
|
TDS Telecom
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Expenses excluding depreciation,
amortization and accretion
|
|
139,601
|
|
|
|
133,412
|
|
|
|
6,189
|
|
|
|
5%
|
|
|
|
|
Depreciation, amortization and
accretion
|
|
45,682
|
|
|
|
43,645
|
|
|
|
2,037
|
|
|
|
5%
|
|
|
|
|
(Gain) loss on asset disposals,
net
|
|
337
|
|
|
|
390
|
|
|
|
(53)
|
|
|
|
(14%)
|
|
|
|
|
|
|
|
185,620
|
|
|
|
177,447
|
|
|
|
8,173
|
|
|
|
5%
|
|
|
|
All Other (2)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Expenses excluding depreciation
and amortization
|
|
1,355
|
|
|
|
2,243
|
|
|
|
(888)
|
|
|
|
(40%)
|
|
|
|
|
Depreciation and
amortization
|
|
2,693
|
|
|
|
2,610
|
|
|
|
83
|
|
|
|
3%
|
|
|
|
|
(Gain) loss on asset disposals,
net
|
|
12
|
|
|
|
7
|
|
|
|
5
|
|
|
|
71%
|
|
|
|
|
|
|
|
4,060
|
|
|
|
4,860
|
|
|
|
(800)
|
|
|
|
(16%)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total operating
expenses
|
|
1,198,499
|
|
|
|
1,181,729
|
|
|
|
16,770
|
|
|
|
1%
|
|
|
Operating income
(loss)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
U.S. Cellular
|
|
101,620
|
|
|
|
61,359
|
|
|
|
40,261
|
|
|
|
66%
|
|
|
|
TDS Telecom
|
|
25,186
|
|
|
|
24,583
|
|
|
|
603
|
|
|
|
2%
|
|
|
|
All Other (2)
|
|
118
|
|
|
|
(1,255)
|
|
|
|
1,373
|
|
|
|
> (100%)
|
|
|
|
|
|
|
|
126,924
|
|
|
|
84,687
|
|
|
|
42,237
|
|
|
|
50%
|
|
|
Investment and other income
(expense)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity in earnings of
unconsolidated entities
|
|
22,053
|
|
|
|
24,147
|
|
|
|
(2,094)
|
|
|
|
(9%)
|
|
|
|
Interest and dividend
income
|
|
2,199
|
|
|
|
2,785
|
|
|
|
(586)
|
|
|
|
(21%)
|
|
|
|
Gain on investment
|
|
12,730
|
|
|
|
—
|
|
|
|
12,730
|
|
|
|
N/M
|
|
|
|
Interest expense
|
|
(22,258)
|
|
|
|
(28,297)
|
|
|
|
6,039
|
|
|
|
21%
|
|
|
|
Other, net
|
|
115
|
|
|
|
(438)
|
|
|
|
553
|
|
|
|
> (100%)
|
|
|
|
|
Total investment and other
income (expense)
|
|
14,839
|
|
|
|
(1,803)
|
|
|
|
16,642
|
|
|
|
> (100%)
|
|
|
Income before income
taxes
|
|
141,763
|
|
|
|
82,884
|
|
|
|
58,879
|
|
|
|
71%
|
|
|
|
Income tax expense
|
|
53,545
|
|
|
|
29,354
|
|
|
|
24,191
|
|
|
|
82%
|
|
|
Net income
|
|
88,218
|
|
|
|
53,530
|
|
|
|
34,688
|
|
|
|
65%
|
|
|
|
Less: Net income attributable to
noncontrolling interests, net of tax
|
|
(16,924)
|
|
|
|
(12,111)
|
|
|
|
(4,813)
|
|
|
|
(40%)
|
|
|
Net income attributable to TDS
shareholders
|
|
71,294
|
|
|
|
41,419
|
|
|
|
29,875
|
|
|
|
72%
|
|
|
|
Preferred dividend
requirement
|
|
(12)
|
|
|
|
(12)
|
|
|
|
—
|
|
|
|
—
|
|
|
Net income available to common
shareholders
|
$
|
71,282
|
|
|
$
|
41,407
|
|
|
$
|
29,875
|
|
|
|
72%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic weighted average shares
outstanding
|
|
103,487
|
|
|
|
104,881
|
|
|
|
(1,394)
|
|
|
|
(1%)
|
|
|
Basic earnings per share
attributable to TDS shareholders
|
$
|
0.69
|
|
|
$
|
0.39
|
|
|
$
|
0.30
|
|
|
|
77%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted weighted average shares
outstanding
|
|
103,806
|
|
|
|
105,298
|
|
|
|
(1,492)
|
|
|
|
(1%)
|
|
|
Diluted earnings per share
attributable to TDS shareholders
|
$
|
0.68
|
|
|
$
|
0.39
|
|
|
$
|
0.29
|
|
|
|
74%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
Amounts have been adjusted. See
"Revision of Prior Period Amounts" section for additional
details.
|
|
(2)
|
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)
|
|
|
|
|
|
|
2011
|
|
|
2010 (1)
|
|
|
Amount
|
|
|
Percent
|
|
|
Operating revenues
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
U.S. Cellular
|
$
|
3,243,713
|
|
|
$
|
3,114,531
|
|
|
$
|
129,182
|
|
|
|
4%
|
|
|
|
TDS Telecom
|
|
608,618
|
|
|
|
596,741
|
|
|
|
11,877
|
|
|
|
2%
|
|
|
|
All Other (2)
|
|
11,413
|
|
|
|
9,798
|
|
|
|
1,615
|
|
|
|
16%
|
|
|
|
|
|
|
|
3,863,744
|
|
|
|
3,721,070
|
|
|
|
142,674
|
|
|
|
4%
|
|
|
Operating
expenses
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
U.S. Cellular
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Expenses excluding depreciation,
amortization and accretion
|
|
2,553,409
|
|
|
|
2,472,758
|
|
|
|
80,651
|
|
|
|
3%
|
|
|
|
|
Depreciation, amortization and
accretion
|
|
431,581
|
|
|
|
427,831
|
|
|
|
3,750
|
|
|
|
1%
|
|
|
|
|
(Gain) loss on asset disposals
and exchanges, net
|
|
(5,741)
|
|
|
|
8,407
|
|
|
|
(14,148)
|
|
|
|
> (100%)
|
|
|
|
|
|
|
|
2,979,249
|
|
|
|
2,908,996
|
|
|
|
70,253
|
|
|
|
2%
|
|
|
|
TDS Telecom
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Expenses excluding depreciation,
amortization and accretion
|
|
390,216
|
|
|
|
390,842
|
|
|
|
(626)
|
|
|
|
—
|
|
|
|
|
Depreciation, amortization and
accretion
|
|
134,362
|
|
|
|
130,217
|
|
|
|
4,145
|
|
|
|
3%
|
|
|
|
|
(Gain) loss on asset disposals,
net
|
|
758
|
|
|
|
667
|
|
|
|
91
|
|
|
|
14%
|
|
|
|
|
|
|
|
525,336
|
|
|
|
521,726
|
|
|
|
3,610
|
|
|
|
1%
|
|
|
|
All Other (2)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Expenses excluding depreciation
and amortization
|
|
8,040
|
|
|
|
6,290
|
|
|
|
1,750
|
|
|
|
28%
|
|
|
|
|
Depreciation and
amortization
|
|
7,954
|
|
|
|
7,997
|
|
|
|
(43)
|
|
|
|
(1%)
|
|
|
|
|
(Gain) loss on asset disposals,
net
|
|
13
|
|
|
|
(51)
|
|
|
|
64
|
|
|
|
> (100%)
|
|
|
|
|
|
|
|
16,007
|
|
|
|
14,236
|
|
|
|
1,771
|
|
|
|
12%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total operating
expenses
|
|
3,520,592
|
|
|
|
3,444,958
|
|
|
|
75,634
|
|
|
|
2%
|
|
|
Operating income
(loss)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
U.S. Cellular
|
|
264,464
|
|
|
|
205,535
|
|
|
|
58,929
|
|
|
|
29%
|
|
|
|
TDS Telecom
|
|
83,282
|
|
|
|
75,015
|
|
|
|
8,267
|
|
|
|
11%
|
|
|
|
All Other (2)
|
|
(4,594)
|
|
|
|
(4,438)
|
|
|
|
(156)
|
|
|
|
(4%)
|
|
|
|
|
|
|
|
343,152
|
|
|
|
276,112
|
|
|
|
67,040
|
|
|
|
24%
|
|
|
Investment and other income
(expense)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity in earnings of
unconsolidated entities
|
|
64,031
|
|
|
|
75,047
|
|
|
|
(11,016)
|
|
|
|
(15%)
|
|
|
|
Interest and dividend
income
|
|
6,916
|
|
|
|
7,900
|
|
|
|
(984)
|
|
|
|
(12%)
|
|
|
|
Gain on investment
|
|
26,103
|
|
|
|
—
|
|
|
|
26,103
|
|
|
|
N/M
|
|
|
|
Interest expense
|
|
(94,184)
|
|
|
|
(86,520)
|
|
|
|
(7,664)
|
|
|
|
(9%)
|
|
|
|
Other, net
|
|
1,501
|
|
|
|
(2,557)
|
|
|
|
4,058
|
|
|
|
> (100%)
|
|
|
|
|
Total investment and other
income (expense)
|
|
4,367
|
|
|
|
(6,130)
|
|
|
|
10,497
|
|
|
|
> (100%)
|
|
|
Income before income
taxes
|
|
347,519
|
|
|
|
269,982
|
|
|
|
77,537
|
|
|
|
29%
|
|
|
|
Income tax expense
|
|
95,264
|
|
|
|
99,904
|
|
|
|
(4,640)
|
|
|
|
(5%)
|
|
|
Net income
|
|
252,255
|
|
|
|
170,078
|
|
|
|
82,177
|
|
|
|
48%
|
|
|
|
Less: Net income attributable to
noncontrolling interests, net of tax
|
|
(45,503)
|
|
|
|
(38,373)
|
|
|
|
(7,130)
|
|
|
|
(19%)
|
|
|
Net income attributable to TDS
shareholders
|
|
206,752
|
|
|
|
131,705
|
|
|
|
75,047
|
|
|
|
57%
|
|
|
|
Preferred dividend
requirement
|
|
(37)
|
|
|
|
(37)
|
|
|
|
—
|
|
|
|
—
|
|
|
Net income available to common
shareholders
|
$
|
206,715
|
|
|
$
|
131,668
|
|
|
$
|
75,047
|
|
|
|
57%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic weighted average shares
outstanding
|
|
103,672
|
|
|
|
105,443
|
|
|
|
(1,771)
|
|
|
|
(2%)
|
|
|
Basic earnings per share
attributable to TDS shareholders
|
$
|
1.99
|
|
|
$
|
1.25
|
|
|
$
|
0.74
|
|
|
|
59%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted weighted average shares
outstanding
|
|
104,094
|
|
|
|
105,800
|
|
|
|
(1,706)
|
|
|
|
(2%)
|
|
|
Diluted earnings per share
attributable to TDS shareholders
|
$
|
1.98
|
|
|
$
|
1.24
|
|
|
$
|
0.74
|
|
|
|
60%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
Amounts have been adjusted. See
"Revision of Prior Period Amounts" section for additional
details.
|
|
(2)
|
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,
|
|
|
|
|
2011
|
|
2010 (1)
|
|
Current assets
|
|
|
|
|
|
|
|
Cash and cash
equivalents
|
$
|
599,545
|
|
$
|
368,134
|
|
|
Short-term
investments
|
|
249,816
|
|
|
402,882
|
|
|
Accounts receivable from
customers and others
|
|
536,129
|
|
|
512,946
|
|
|
Inventory
|
|
153,077
|
|
|
116,330
|
|
|
Net deferred income tax
asset
|
|
37,132
|
|
|
37,079
|
|
|
Prepaid expenses
|
|
80,742
|
|
|
76,935
|
|
|
Income taxes
receivable
|
|
60,960
|
|
|
64,985
|
|
|
Other current assets
|
|
17,922
|
|
|
17,384
|
|
|
|
|
|
1,735,323
|
|
|
1,596,675
|
|
|
|
|
|
|
|
|
|
|
Assets held for
sale
|
|
60,829
|
|
|
—
|
|
|
|
|
|
|
|
|
|
|
Investments
|
|
|
|
|
|
|
|
Licenses
|
|
1,493,796
|
|
|
1,460,126
|
|
|
Goodwill
|
|
797,084
|
|
|
728,455
|
|
|
Other intangible assets,
net
|
|
54,291
|
|
|
30,810
|
|
|
Investments in unconsolidated
entities
|
|
195,872
|
|
|
197,922
|
|
|
Long-term investments
|
|
85,676
|
|
|
102,185
|
|
|
Other investments
|
|
5,189
|
|
|
8,988
|
|
|
|
|
|
2,631,908
|
|
|
2,528,486
|
|
|
|
|
|
|
|
|
|
|
Property, plant and equipment,
net
|
|
|
|
|
|
|
|
U.S. Cellular
|
|
2,654,494
|
|
|
2,574,522
|
|
|
TDS Telecom
|
|
916,458
|
|
|
909,951
|
|
|
Other
|
|
56,311
|
|
|
33,311
|
|
|
|
|
|
3,627,263
|
|
|
3,517,784
|
|
|
|
|
|
|
|
|
|
|
Other assets and deferred
charges
|
|
107,237
|
|
|
79,623
|
|
|
|
|
|
|
|
|
|
|
Total assets
|
$
|
8,162,560
|
|
$
|
7,722,568
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
Amounts have been adjusted. See
"Revision of Prior Period Amounts" section for additional
details.
|
|
|
|
|
|
Telephone
and Data Systems, Inc.
Consolidated
Balance Sheet Highlights
|
|
|
(Unaudited,
dollars in thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
LIABILITIES
AND EQUITY
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
September
30,
|
|
|
December
31,
|
|
|
|
|
|
|
2011
|
|
|
2010 (1)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current liabilities
|
|
|
|
|
|
|
|
|
|
Current portion of long-term
debt
|
$
|
3,554
|
|
|
$
|
1,711
|
|
|
|
Accounts payable
|
|
416,288
|
|
|
|
344,355
|
|
|
|
Customer deposits and deferred
revenues
|
|
203,367
|
|
|
|
171,781
|
|
|
|
Accrued interest
|
|
14,678
|
|
|
|
4,308
|
|
|
|
Accrued taxes
|
|
45,682
|
|
|
|
46,110
|
|
|
|
Accrued compensation
|
|
76,481
|
|
|
|
99,020
|
|
|
|
Other current
liabilities
|
|
108,634
|
|
|
|
144,938
|
|
|
|
|
|
|
|
868,684
|
|
|
|
812,223
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Liabilities held for
sale
|
|
858
|
|
|
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Deferred liabilities and
credits
|
|
|
|
|
|
|
|
|
|
Net deferred income tax
liability
|
|
771,049
|
|
|
|
589,092
|
|
|
|
Other deferred liabilities and
credits
|
|
363,291
|
|
|
|
354,798
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Long-term debt
|
|
1,528,350
|
|
|
|
1,499,862
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Noncontrolling interests with
redemption features
|
|
923
|
|
|
|
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
|
|
2,116,063
|
|
|
|
2,107,929
|
|
|
|
|
Special Common and Common
Treasury shares, at cost
|
|
(754,302)
|
|
|
|
(738,695)
|
|
|
|
|
Accumulated other comprehensive
loss
|
|
(2,923)
|
|
|
|
(3,208)
|
|
|
|
|
Retained earnings
|
|
2,619,055
|
|
|
|
2,450,599
|
|
|
|
|
|
Total TDS shareholders'
equity
|
|
3,979,163
|
|
|
|
3,817,895
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Preferred shares
|
|
830
|
|
|
|
830
|
|
|
|
Noncontrolling
interests
|
|
649,412
|
|
|
|
647,013
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total equity
|
|
4,629,405
|
|
|
|
4,465,738
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total liabilities and
equity
|
$
|
8,162,560
|
|
|
$
|
7,722,568
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
Amounts have been adjusted. See
"Revision of Prior Period Amounts" section for additional
details.
|
|
|
|
|
|
Balance
Sheet Highlights
|
|
September
30, 2011
|
|
(Unaudited,
dollars in thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
U.S.
|
|
TDS
|
|
TDS
Corporate
|
|
Intercompany
|
|
TDS
|
|
|
|
|
Cellular
|
|
Telecom
|
|
&
Other
|
|
Eliminations
|
|
Consolidated
|
|
Cash and cash
equivalents
|
$
|
504,952
|
|
$
|
2,925
|
|
$
|
91,668
|
|
$
|
-
|
|
$
|
599,545
|
|
Affiliated cash
investments
|
|
-
|
|
|
458,441
|
|
|
-
|
|
|
(458,441)
|
|
|
-
|
|
Short-term
investments
|
|
110,761
|
|
|
53,584
|
|
|
85,471
|
|
|
-
|
|
|
249,816
|
|
|
|
$
|
615,713
|
|
$
|
514,950
|
|
$
|
177,139
|
|
$
|
(458,441)
|
|
$
|
849,361
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Licenses, goodwill and other intangible assets
|
$
|
1,965,712
|
|
$
|
556,051
|
|
$
|
(176,592)
|
|
$
|
-
|
|
$
|
2,345,171
|
|
Investment in unconsolidated
entities
|
|
160,374
|
|
|
3,807
|
|
|
41,577
|
|
|
(9,886)
|
|
|
195,872
|
|
Long-term and other
investments
|
|
49,256
|
|
|
1,229
|
|
|
40,380
|
|
|
-
|
|
|
90,865
|
|
|
|
|
$
|
2,175,342
|
|
$
|
561,087
|
|
$
|
(94,635)
|
|
$
|
(9,886)
|
|
$
|
2,631,908
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Property, plant and equipment,
net
|
$
|
2,654,494
|
|
$
|
916,458
|
|
$
|
56,311
|
|
$
|
-
|
|
$
|
3,627,263
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Long-term debt:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current portion
|
$
|
101
|
|
$
|
209
|
|
$
|
3,244
|
|
$
|
-
|
|
$
|
3,554
|
|
|
Non-current portion
|
|
880,411
|
|
|
1,828
|
|
|
646,111
|
|
|
-
|
|
|
1,528,350
|
|
|
|
Total
|
$
|
880,512
|
|
$
|
2,037
|
|
$
|
649,355
|
|
$
|
-
|
|
$
|
1,531,904
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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 September 30, 2011 and December 31, 2010.
|
|
|
|
|
|
|
|
|
September
30,
|
|
December
31,
|
|
|
|
|
2011
|
|
2010
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash and cash
equivalents
|
|
$
|
599,545
|
|
$
|
368,134
|
|
|
Amounts included in short-term
investments (1) (2)
|
|
|
|
|
|
|
|
|
|
Government-backed securities
(3)
|
|
|
|
196,232
|
|
|
305,612
|
|
|
|
Certificates of
deposit
|
|
|
|
53,584
|
|
|
97,270
|
|
|
|
|
|
|
$
|
249,816
|
|
$
|
402,882
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Amounts included in long-term
investments (1) (4)
|
|
|
|
|
|
|
|
|
|
Government-backed securities
(3)
|
|
|
$
|
85,676
|
|
$
|
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 September 30, 2011,
maturities range between 13 and 23 months from the balance sheet
date.
|
|
|
|
|
|
Telephone
and Data Systems, Inc.
|
|
Consolidated
Statement of Cash Flows
|
|
Nine Months
Ended September 30,
|
|
(Unaudited,
dollars in thousands)
|
|
|
|
|
|
|
2011
|
|
2010 (1)
|
|
Cash flows from operating activities
|
|
|
|
|
|
|
|
Net income
|
$
|
252,255
|
|
$
|
170,078
|
|
|
|
Add (deduct) adjustments to
reconcile net income to net
|
|
|
|
|
|
|
|
|
|
cash flows from operating
activities
|
|
|
|
|
|
|
|
|
|
|
Depreciation, amortization and
accretion
|
|
573,897
|
|
|
566,045
|
|
|
|
|
|
Bad debts expense
|
|
49,101
|
|
|
61,087
|
|
|
|
|
|
Stock-based compensation
expense
|
|
27,792
|
|
|
26,055
|
|
|
|
|
|
Deferred income taxes,
net
|
|
160,436
|
|
|
56,839
|
|
|
|
|
|
Equity in earnings of
unconsolidated entities
|
|
(64,031)
|
|
|
(75,047)
|
|
|
|
|
|
Distributions from
unconsolidated entities
|
|
52,385
|
|
|
59,519
|
|
|
|
|
|
(Gain) loss on asset disposals
and exchanges, net
|
|
(4,970)
|
|
|
9,023
|
|
|
|
|
|
Gain on investment
|
|
(26,103)
|
|
|
-
|
|
|
|
|
|
Noncash interest
expense
|
|
17,973
|
|
|
4,143
|
|
|
|
|
|
Other operating
activities
|
|
1,630
|
|
|
502
|
|
|
|
Changes in assets and
liabilities from operations
|
|
|
|
|
|
|
|
|
|
|
Accounts receivable
|
|
(69,690)
|
|
|
(48,891)
|
|
|
|
|
|
Inventory
|
|
(36,387)
|
|
|
32,571
|
|
|
|
|
|
Accounts payable
|
|
69,929
|
|
|
(49,034)
|
|
|
|
|
|
Customer deposits and deferred
revenues
|
|
31,191
|
|
|
2,363
|
|
|
|
|
|
Accrued taxes
|
|
2,011
|
|
|
(42,843)
|
|
|
|
|
|
Accrued interest
|
|
10,519
|
|
|
9,343
|
|
|
|
|
|
Other assets and
liabilities
|
|
(74,673)
|
|
|
(16,973)
|
|
|
|
|
|
|
|
973,265
|
|
|
764,780
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash flows from investing
activities
|
|
|
|
|
|
|
|
Additions to property, plant and
equipment
|
|
(643,396)
|
|
|
(486,138)
|
|
|
Cash paid for acquisitions and
licenses
|
|
(105,184)
|
|
|
(28,264)
|
|
|
Cash paid for
investments
|
|
(101,000)
|
|
|
(433,750)
|
|
|
Cash received for
investments
|
|
268,686
|
|
|
40,765
|
|
|
Other investing
activities
|
|
(3,703)
|
|
|
1,681
|
|
|
|
|
|
|
|
(584,597)
|
|
|
(905,706)
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash flows from financing
activities
|
|
|
|
|
|
|
|
Repayment of long-term
debt
|
|
(613,933)
|
|
|
(2,182)
|
|
|
Issuance of long-term
debt
|
|
643,700
|
|
|
-
|
|
|
TDS Common Shares and Special
Common Shares
|
|
|
|
|
|
|
|
|
reissued for benefit plans, net
of tax payments
|
|
1,402
|
|
|
1,183
|
|
|
U.S. Cellular Common Shares
reissued for benefit
|
|
|
|
|
|
|
|
|
plans, net of tax
payments
|
|
1,755
|
|
|
738
|
|
|
Repurchase of TDS Common and
Special Common Shares
|
|
(21,500)
|
|
|
(50,543)
|
|
|
Repurchase of U.S. Cellular
Common Shares
|
|
(62,294)
|
|
|
(40,520)
|
|
|
Dividends paid
|
|
(36,496)
|
|
|
(35,502)
|
|
|
Payment of debt issuance
costs
|
|
(21,650)
|
|
|
—
|
|
|
Distributions to noncontrolling
interests
|
|
(1,676)
|
|
|
(5,828)
|
|
|
Other financing
activities
|
|
(35,328)
|
|
|
(7,404)
|
|
|
|
|
|
|
|
(146,020)
|
|
|
(140,058)
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash classified as held for
sale
|
|
(11,237)
|
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
Net increase (decrease) in cash
and cash equivalents
|
|
231,411
|
|
|
(280,984)
|
|
Cash and cash
equivalents
|
|
|
|
|
|
|
|
Beginning of period
|
|
368,134
|
|
|
670,992
|
|
|
End of period
|
$
|
599,545
|
|
$
|
390,008
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
Amounts have been adjusted. See
"Revision of Prior Period Amounts" section for additional
details.
|
|
|
|
|
|
TDS Telecom
Highlights
|
|
|
Three Months
Ended September 30,
|
|
|
(Unaudited,
dollars in thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Increase
(Decrease)
|
|
|
|
|
|
|
2011
|
|
|
2010
|
|
|
Amount
|
|
Percent
|
|
|
Local Telephone Operations
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating
revenues
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Voice
|
$
|
42,725
|
|
|
$
|
45,363
|
|
|
$
|
(2,638)
|
|
|
(6%)
|
|
|
|
|
Data
|
|
47,905
|
|
|
|
32,473
|
|
|
|
15,432
|
|
|
48%
|
|
|
|
|
Network access
|
|
67,927
|
|
|
|
69,032
|
|
|
|
(1,105)
|
|
|
(2%)
|
|
|
|
|
Miscellaneous
|
|
9,730
|
|
|
|
10,518
|
|
|
|
(788)
|
|
|
(7%)
|
|
|
|
|
|
|
|
168,287
|
|
|
|
157,386
|
|
|
|
10,901
|
|
|
7%
|
|
|
|
Operating
expenses
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of services and
products
|
|
59,528
|
|
|
|
51,820
|
|
|
|
7,708
|
|
|
15%
|
|
|
|
|
Selling, general and
administrative expenses
|
|
43,388
|
|
|
|
43,195
|
|
|
|
193
|
|
|
—
|
|
|
|
|
Depreciation, amortization and
accretion
|
|
40,085
|
|
|
|
37,528
|
|
|
|
2,557
|
|
|
7%
|
|
|
|
|
Loss on asset disposals,
net
|
|
225
|
|
|
|
312
|
|
|
|
(87)
|
|
|
(28%)
|
|
|
|
|
|
|
|
143,226
|
|
|
|
132,855
|
|
|
|
10,371
|
|
|
8%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating income
|
$
|
25,061
|
|
|
$
|
24,531
|
|
|
$
|
530
|
|
|
2%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Competitive Local Exchange
Carrier Operations
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenues
|
$
|
45,011
|
|
|
$
|
47,038
|
|
|
$
|
(2,027)
|
|
|
(4%)
|
|
|
|
|
Expenses (excluding
Depreciation, amortization
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
and accretion)
|
|
39,177
|
|
|
|
40,791
|
|
|
|
(1,614)
|
|
|
(4%)
|
|
|
|
|
Depreciation, amortization and
accretion
|
|
5,597
|
|
|
|
6,117
|
|
|
|
(520)
|
|
|
(9%)
|
|
|
|
|
Loss on asset disposals,
net
|
|
112
|
|
|
|
78
|
|
|
|
34
|
|
|
44%
|
|
|
|
|
|
|
|
44,886
|
|
|
|
46,986
|
|
|
|
(2,100)
|
|
|
(4%)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating income
|
$
|
125
|
|
|
$
|
52
|
|
|
$
|
73
|
|
|
>100%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Intercompany revenues
|
$
|
(2,492)
|
|
|
$
|
(2,394)
|
|
|
$
|
(98)
|
|
|
(4%)
|
|
|
Intercompany expenses
|
|
(2,492)
|
|
|
|
(2,394)
|
|
|
|
(98)
|
|
|
(4%)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total TDS Telecom operating
income
|
$
|
25,186
|
|
|
$
|
24,583
|
|
|
$
|
603
|
|
|
2%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
TDS Telecom
Highlights
|
|
|
Nine Months
Ended September 30,
|
|
|
(Unaudited,
dollars in thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Increase
(Decrease)
|
|
|
|
|
|
|
2011
|
|
|
2010
|
|
|
Amount
|
|
Percent
|
|
|
Local Telephone Operations
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating
revenues
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Voice
|
$
|
128,811
|
|
|
$
|
135,659
|
|
|
$
|
(6,848)
|
|
|
(5%)
|
|
|
|
|
Data
|
|
121,055
|
|
|
|
92,764
|
|
|
|
28,291
|
|
|
30%
|
|
|
|
|
Network access
|
|
200,419
|
|
|
|
203,925
|
|
|
|
(3,506)
|
|
|
(2%)
|
|
|
|
|
Miscellaneous
|
|
29,824
|
|
|
|
29,452
|
|
|
|
372
|
|
|
1%
|
|
|
|
|
|
|
|
480,109
|
|
|
|
461,800
|
|
|
|
18,309
|
|
|
4%
|
|
|
|
Operating
expenses
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of services and
products
|
|
157,051
|
|
|
|
147,614
|
|
|
|
9,437
|
|
|
6%
|
|
|
|
|
Selling, general and
administrative expenses
|
|
124,178
|
|
|
|
129,099
|
|
|
|
(4,921)
|
|
|
(4%)
|
|
|
|
|
Depreciation, amortization and
accretion
|
|
117,836
|
|
|
|
111,433
|
|
|
|
6,403
|
|
|
6%
|
|
|
|
|
Loss on asset disposals,
net
|
|
568
|
|
|
|
344
|
|
|
|
224
|
|
|
65%
|
|
|
|
|
|
|
|
399,633
|
|
|
|
388,490
|
|
|
|
11,143
|
|
|
3%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating income
|
$
|
80,476
|
|
|
$
|
73,310
|
|
|
$
|
7,166
|
|
|
10%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Competitive Local Exchange
Carrier Operations
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenues
|
$
|
135,935
|
|
|
$
|
142,106
|
|
|
$
|
(6,171)
|
|
|
(4%)
|
|
|
|
|
Expenses (excluding
Depreciation, amortization
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
and accretion)
|
|
116,413
|
|
|
|
121,294
|
|
|
|
(4,881)
|
|
|
(4%)
|
|
|
|
|
Depreciation, amortization and
accretion
|
|
16,526
|
|
|
|
18,784
|
|
|
|
(2,258)
|
|
|
(12%)
|
|
|
|
|
Loss on asset disposals,
net
|
|
190
|
|
|
|
323
|
|
|
|
(133)
|
|
|
(41%)
|
|
|
|
|
|
|
|
133,129
|
|
|
|
140,401
|
|
|
|
(7,272)
|
|
|
(5%)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating income
|
$
|
2,806
|
|
|
$
|
1,705
|
|
|
$
|
1,101
|
|
|
65%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Intercompany revenues
|
$
|
(7,426)
|
|
|
$
|
(7,165)
|
|
|
$
|
(261)
|
|
|
(4%)
|
|
|
Intercompany expenses
|
|
(7,426)
|
|
|
|
(7,165)
|
|
|
|
(261)
|
|
|
(4%)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total TDS Telecom operating
income
|
$
|
83,282
|
|
|
$
|
75,015
|
|
|
$
|
8,267
|
|
|
11%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Telephone
and Data Systems, Inc.
|
|
|
Financial
Measures and Reconciliations
|
|
(Unaudited,
dollars in thousands)
|
|
Three Months Ended September 30,
2011
|
|
U.S.
Cellular
|
|
TDS Telecom
(1)
|
|
All Other
(2)
|
|
Consolidated
Total
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating revenues
|
|
$
|
1,110,439
|
|
$
|
210,806
|
|
$
|
4,178
|
|
$
|
1,325,423
|
|
|
|
Deduct:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
U.S. Cellular equipment sales
revenue
|
|
|
73,830
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Service revenues
|
|
|
1,036,609
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating income
(loss)
|
|
|
101,620
|
|
|
25,186
|
|
|
118
|
|
|
126,924
|
|
|
|
Add (Deduct):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Depreciation, amortization and
accretion
|
|
|
141,664
|
|
|
45,682
|
|
|
2,693
|
|
|
190,039
|
|
|
|
|
Loss on impairment of intangible
assets
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
|
|
(Gain) loss on asset disposals
and exchanges
|
|
|
(9,700)
|
|
|
337
|
|
|
12
|
|
|
(9,351)
|
|
|
|
|
|
Adjusted OIBDA
(3)
|
|
$
|
233,584
|
|
$
|
71,205
|
|
$
|
2,823
|
|
$
|
307,612
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted OIBDA margin
(4)
|
|
|
22.5%
|
|
|
33.8%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended September 30,
2010
|
|
U.S. Cellular (6)
|
|
TDS Telecom (1)
|
|
All Other (2)
|
|
Consolidated Total (6)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating
revenues
|
|
$
|
1,060,781
|
|
$
|
202,030
|
|
$
|
3,605
|
|
$
|
1,266,416
|
|
|
|
Deduct:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
U.S. Cellular equipment sales
revenue
|
|
|
77,278
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Service revenues
|
|
|
983,503
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating income
(loss)
|
|
|
61,359
|
|
|
24,583
|
|
|
(1,255)
|
|
|
84,687
|
|
|
|
Add (Deduct):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Depreciation, amortization and
accretion
|
|
|
143,191
|
|
|
43,645
|
|
|
2,610
|
|
|
189,446
|
|
|
|
|
Loss on impairment of intangible
assets
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
|
|
(Gain) loss on asset disposals
and exchanges
|
|
|
1,981
|
|
|
390
|
|
|
7
|
|
|
2,378
|
|
|
|
|
|
Adjusted OIBDA
(3)
|
|
$
|
206,531
|
|
$
|
68,618
|
|
$
|
1,362
|
|
$
|
276,511
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted OIBDA margin
(4)
|
|
|
21.0%
|
|
|
34.0%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
TDS
Consolidated
|
|
|
|
|
|
|
|
|
Three Months Ended September
30,
|
|
2011
|
|
2010 (6)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash flows from operating
activities
|
|
$
|
435,602
|
|
$
|
262,434
|
|
|
|
|
|
|
|
|
|
Deduct:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Capital expenditures
|
|
|
304,685
|
|
|
168,188
|
|
|
|
|
|
|
|
|
|
|
|
Free cash flow
(5)
|
|
$
|
130,917
|
|
$
|
94,246
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Telephone
and Data Systems, Inc.
|
|
|
Financial
Measures and Reconciliations
|
|
(Unaudited,
dollars in thousands)
|
|
Nine Months Ended September 30,
2011
|
|
U.S.
Cellular
|
|
TDS Telecom
(1)
|
|
All Other
(2)
|
|
Consolidated
Total
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating revenues
|
|
$
|
3,243,713
|
|
$
|
608,618
|
|
$
|
11,413
|
|
$
|
3,863,744
|
|
|
|
Deduct:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
U.S. Cellular equipment sales
revenue
|
|
|
219,961
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Service revenues
|
|
|
3,023,752
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating income
(loss)
|
|
|
264,464
|
|
|
83,282
|
|
|
(4,594)
|
|
|
343,152
|
|
|
|
Add (Deduct):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Depreciation, amortization and
accretion
|
|
|
431,581
|
|
|
134,362
|
|
|
7,954
|
|
|
573,897
|
|
|
|
|
Loss on impairment of intangible
assets
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
|
|
(Gain) loss on asset disposals
and exchanges
|
|
|
(5,741)
|
|
|
758
|
|
|
13
|
|
|
(4,970)
|
|
|
|
|
|
Adjusted OIBDA
(3)
|
|
$
|
690,304
|
|
$
|
218,402
|
|
$
|
3,373
|
|
$
|
912,079
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted OIBDA margin
(4)
|
|
|
22.8%
|
|
|
35.9%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Nine Months Ended September 30,
2010
|
|
U.S. Cellular (6)
|
|
TDS Telecom (1)
|
|
All Other (2)
|
|
Consolidated
Total (6)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating
revenues
|
|
$
|
3,114,531
|
|
$
|
596,741
|
|
$
|
9,798
|
|
$
|
3,721,070
|
|
|
|
Deduct:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
U.S. Cellular equipment sales
revenue
|
|
|
193,444
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Service revenues
|
|
|
2,921,087
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating income
(loss)
|
|
|
205,535
|
|
|
75,015
|
|
|
(4,438)
|
|
|
276,112
|
|
|
|
Add (Deduct):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Depreciation, amortization and
accretion
|
|
|
427,831
|
|
|
130,217
|
|
|
7,997
|
|
|
566,045
|
|
|
|
|
Loss on impairment of intangible
assets
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
|
|
(Gain) loss on asset disposals
and exchanges
|
|
|
8,407
|
|
|
667
|
|
|
(51)
|
|
|
9,023
|
|
|
|
|
|
Adjusted OIBDA
(3)
|
|
$
|
641,773
|
|
$
|
205,899
|
|
$
|
3,508
|
|
$
|
851,180
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted OIBDA margin
(4)
|
|
|
22.0%
|
|
|
34.5%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
TDS
Consolidated
|
|
|
|
|
|
|
|
|
Nine Months Ended September
30,
|
|
2011
|
|
2010 (6)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash flows from operating
activities
|
|
$
|
973,265
|
|
$
|
764,780
|
|
|
|
|
|
|
|
|
|
Deduct:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Capital expenditures
|
|
|
643,396
|
|
|
486,138
|
|
|
|
|
|
|
|
|
|
|
|
Free cash flow
(5)
|
|
$
|
329,869
|
|
$
|
278,642
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(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 and exchanges (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
exchanges 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.
|
|
(6)
|
Amounts have been adjusted. See
"Revision of Prior Period Amounts" section for additional
details.
|
|
|
|
Revision of Prior Period Amounts
In preparing its financial statements for the nine months ended
September 30, 2011, TDS discovered
certain errors related to accounting for asset retirement
obligations and asset retirement costs. These errors resulted in
the overstatement of Total operating expenses, Property, plant and
equipment, net and Other deferred liabilities and credits in the
first and second quarter 2011 interim financial statements and in
the 2010, 2009 and 2008 annual periods reported in the Company's
December 31, 2010 financial
statements. The beginning retained earnings balance
presented in the December 31, 2010
annual financial statements was also understated as a result of
these errors. In accordance with SEC Staff Accounting
Bulletin Nos. 99 and 108 ("SAB 99" and "SAB 108"), TDS
evaluated these errors and determined that they were immaterial to
each of the reporting periods affected and, therefore, amendments
of previously filed reports were not required. However, if the
adjustments to correct the cumulative errors had been recorded in
the third quarter 2011, TDS believes the impact would have been
significant to the third quarter results and would have impacted
comparisons to prior periods. As permitted by SAB 108, revisions
for these immaterial amounts to previously reported annual and
quarterly results are reflected in the financial information herein
and will be reflected in future filings containing such financial
information. In addition, TDS has recorded adjustments to
prior-year amounts to correct other immaterial items.
The Consolidated Balance Sheet at December 31, 2010 was
revised to reflect the cumulative effect of these errors which
resulted in an increase to Retained earnings of $4.0 million. In accordance with SAB 108,
the Consolidated Balance Sheet, the Consolidated Statement of
Operations and the Consolidated Statement of Cash Flows have been
revised as follows:
|
|
|
Consolidated Balance Sheet --
December 31, 2010
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
As
previously
|
|
|
|
|
|
|
|
|
|
|
|
|
(Dollars in
thousands)
|
|
reported
(1)
|
|
|
|
Adjustment
|
|
|
|
Revised
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income taxes
receivable
|
$
|
64,386
|
|
|
$
|
599
|
|
|
$
|
64,985
|
|
|
|
|
Total current
assets
|
|
1,596,076
|
|
|
|
599
|
|
|
|
1,596,675
|
|
|
|
|
Property, plant and equipment,
net
|
|
3,558,334
|
|
|
|
(40,550)
|
|
|
|
3,517,784
|
|
|
|
|
Total assets
|
|
7,762,519
|
|
|
|
(39,951)
|
|
|
|
7,722,568
|
|
|
|
|
Accrued interest
|
|
2,718
|
|
|
|
1,590
|
|
|
|
4,308
|
|
|
|
|
Total current
liabilities
|
|
810,633
|
|
|
|
1,590
|
|
|
|
812,223
|
|
|
|
|
Net deferred income tax
liability
|
|
585,468
|
|
|
|
3,624
|
|
|
|
589,092
|
|
|
|
|
Other deferred liabilities and
credits
|
|
404,892
|
|
|
|
(50,094)
|
|
|
|
354,798
|
|
|
|
|
Retained earnings
|
|
2,446,626
|
|
|
|
3,973
|
|
|
|
2,450,599
|
|
|
|
|
Total TDS shareholders'
equity
|
|
3,813,922
|
|
|
|
3,973
|
|
|
|
3,817,895
|
|
|
|
|
Noncontrolling
interests
|
|
646,057
|
|
|
|
956
|
|
|
|
647,013
|
|
|
|
|
Total equity
|
|
4,460,809
|
|
|
|
4,929
|
|
|
|
4,465,738
|
|
|
|
|
Total liabilities and
equity
|
|
7,762,519
|
|
|
|
(39,951)
|
|
|
|
7,722,568
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Consolidated Statement of
Operations -- Three Months Ended September 30, 2010
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
As
previously
|
|
|
|
|
|
|
|
|
|
|
|
|
(Dollars in
thousands)
|
|
reported
(2)
|
|
|
|
Adjustment
|
|
|
|
Revised
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Depreciation, amortization and
accretion
|
$
|
190,972
|
|
|
$
|
(1,526)
|
|
|
$
|
189,446
|
|
|
|
|
Total operating
expenses
|
|
1,183,255
|
|
|
|
(1,526)
|
|
|
|
1,181,729
|
|
|
|
|
Operating income
|
|
83,161
|
|
|
|
1,526
|
|
|
|
84,687
|
|
|
|
|
Income before income
taxes
|
|
81,358
|
|
|
|
1,526
|
|
|
|
82,884
|
|
|
|
|
Income tax expense
|
|
28,775
|
|
|
|
579
|
|
|
|
29,354
|
|
|
|
|
Net income
|
|
52,583
|
|
|
|
947
|
|
|
|
53,530
|
|
|
|
|
Net income attributable to
noncontrolling interests, net of tax
|
|
(11,958)
|
|
|
|
(153)
|
|
|
|
(12,111)
|
|
|
|
|
Net income attributable to TDS
shareholders
|
|
40,625
|
|
|
|
794
|
|
|
|
41,419
|
|
|
|
|
Net income available to common
shareholders
|
|
40,613
|
|
|
|
794
|
|
|
|
41,407
|
|
|
|
|
Basic earnings per share
attributable to TDS shareholders
|
|
0.39
|
|
|
|
-
|
|
|
|
0.39
|
|
|
|
|
Diluted earnings per share
attributable to TDS shareholders
|
|
0.38
|
|
|
|
0.01
|
|
|
|
0.39
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Consolidated Statement of
Operations -- Nine Months Ended September 30, 2010
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
As
previously
|
|
|
|
|
|
|
|
|
|
|
|
|
(Dollars in
thousands)
|
|
reported
(2)
|
|
|
|
Adjustment
|
|
|
|
Revised
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Depreciation, amortization and
accretion
|
$
|
570,619
|
|
|
$
|
(4,574)
|
|
|
$
|
566,045
|
|
|
|
|
Total operating
expenses
|
|
3,449,532
|
|
|
|
(4,574)
|
|
|
|
3,444,958
|
|
|
|
|
Operating income
|
|
271,538
|
|
|
|
4,574
|
|
|
|
276,112
|
|
|
|
|
Income before income
taxes
|
|
265,408
|
|
|
|
4,574
|
|
|
|
269,982
|
|
|
|
|
Income tax expense
|
|
98,167
|
|
|
|
1,737
|
|
|
|
99,904
|
|
|
|
|
Net income
|
|
167,241
|
|
|
|
2,837
|
|
|
|
170,078
|
|
|
|
|
Net income attributable to
noncontrolling interests, net of tax
|
|
(37,915)
|
|
|
|
(458)
|
|
|
|
(38,373)
|
|
|
|
|
Net income attributable to TDS
shareholders
|
|
129,326
|
|
|
|
2,379
|
|
|
|
131,705
|
|
|
|
|
Net income available to common
shareholders
|
|
129,289
|
|
|
|
2,379
|
|
|
|
131,668
|
|
|
|
|
Basic earnings per share
attributable to TDS shareholders
|
|
1.23
|
|
|
|
0.02
|
|
|
|
1.25
|
|
|
|
|
Diluted earnings per share
attributable to TDS shareholders
|
|
1.22
|
|
|
|
0.02
|
|
|
|
1.24
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Consolidated Statement of Cash
Flows -- Nine Months Ended September 30, 2010
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
As
previously
|
|
|
|
|
|
|
|
|
|
|
|
|
(Dollars in
thousands)
|
|
reported
(2)
|
|
|
|
Adjustment
|
|
|
|
Revised
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income
|
$
|
167,241
|
|
|
$
|
2,837
|
|
|
$
|
170,078
|
|
|
|
|
Depreciation, amortization and
accretion
|
|
570,619
|
|
|
|
(4,574)
|
|
|
|
566,045
|
|
|
|
|
Deferred income taxes,
net
|
|
55,102
|
|
|
|
1,737
|
|
|
|
56,839
|
|
|
|
|
Cash flows from operating
activities
|
|
764,780
|
|
|
|
-
|
|
|
|
764,780
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
In Annual Report on Form 10-K
for the year ended December 31, 2010, filed on February 25,
2011.
|
|
(2)
|
In Quarterly Report on Form 10-Q
for the period ended September 30, 2010, filed on November 4,
2010.
|
|
|
|
SOURCE Telephone and Data Systems, Inc.