TDS Reports Fourth Quarter Results
Provides Financial Guidance for 2010
CHICAGO, Feb. 25 /PRNewswire-FirstCall/ --
Note: Comparisons are year over year unless otherwise noted.
4Q 2009 Highlights
Enterprise/TDS Corporate
- Operating revenues were stable at $1.3 billion.
- Repurchased 552,981 TDS common and special common shares; $247 million remaining on current authorization.
Wireless/U.S. Cellular
- 354,000 retail gross additions; 39,000 retail net additions, of which 26,000 were postpay and 13,000 were prepaid.
- 1 percent increase in service revenues to $986 million, despite a $17 million reduction in inbound roaming revenues.
- 34 percent increase in data revenues to $190 million, representing 19 percent of service revenues.
- Retail service ARPU (average revenue per unit) increased from $46.43 to $47.12.
- Retail postpay churn low at 1.6 percent; postpay customers comprised 95 percent of retail customers.
- Redeemed 8.75 percent senior notes; principal amount of $130 million.
- $14 million impairment on licenses; $387 million in the fourth quarter of 2008.
Wireline/TDS Telecom
- 17 percent increase in ILEC high-speed data customers.
- 12 percent increase in ILEC high-speed data revenues, representing 18 percent of ILEC revenues.
- ILEC equivalent access lines held steady at 775,900, primarily due to growth in high-speed data customers and acquisitions, offset by a loss of physical access lines.
- Managed IP stations (ILEC and CLEC) grew to 13,900 from 2,700.
As previously announced, TDS will hold a teleconference Feb. 25, 2010 at 9:30 a.m. CST. Interested parties may listen to the call live via the Internet by accessing the Conference Calls page of www.teldta.com.
Telephone and Data Systems, Inc. (NYSE: TDS; TDS.S) reported operating revenues of $1,262.8 million for the fourth quarter of 2009, versus $1,264.0 million in the comparable period one year ago. Net income attributable to TDS was $16.5 million, or $0.15 per diluted share, impacted by a $14 million (pre-tax), or $0.07 diluted loss per share, charge for impairment of licenses. In the fourth quarter of 2008, net loss attributable to TDS was $168.9 million, or $1.49 diluted loss per share, impacted by a $414.4 million (pre-tax), or $1.84 diluted loss per share, charge for impairment of licenses.
For the twelve months ended Dec. 31, 2009, TDS reported operating revenues of $5,020.7 million, versus $5,092.0 million in 2008. Net income attributable to TDS for 2009 was $193.9 million, or $1.77 per diluted share, impacted by a $14 million (pre-tax), or $0.07 diluted loss per share, charge for impairment of licenses. In 2008, net income attributable to TDS was $93.5 million, or $0.80 diluted earnings per share, impacted by a $414.4 million (pre-tax), or $1.80 diluted loss per share, charge for impairment of licenses.
"Robust data and broadband offerings, combined with exceptional customer service, continued to be the key drivers of our businesses in 2009," said LeRoy T. Carlson, Jr., TDS president and CEO. "Though the economy and competitive pressures impacted results across the enterprise, we saw improvements in the key areas of data revenue and data penetration, and we ended the year poised to build on that success.
"Seventy-five percent of U.S. Cellular's customers had access to 3G speeds at the end of the year. Sales of smart phones and premium phones stimulated data use and drove strong increases in both overall data revenues and data revenue per customer. We improved retail net customer additions from the third quarter in both the prepaid and postpay segments, and churn, an important measure of our ability to serve our customers, also improved.
"Our wireline business, TDS Telecom, increased its ILEC high-speed data revenues in the quarter, and achieved 39 percent broadband penetration within the ILEC residential customer base by year-end. The company is aggressively driving its broadband strategy with new services and products for residential and commercial customers, and continues to build loyalty with value-oriented bundles of high-demand services, including video.
"Both businesses made important investments in infrastructure in 2009, and they will continue to do so in 2010. U.S. Cellular is moving ahead on multi-year initiatives to enable seamless integration of new billing and operational support systems, help the company better understand and target key customer segments, and promote online sales and self-service. In 2010, U.S. Cellular plans to stimulate and support further growth in demand for data by completing its 3G network expansion and continuing its 4G trials and developing its 4G rollout strategy.
"TDS Telecom recently completed the first phase of its leased 10G network and plans to connect two-thirds of its access lines to the network during the first quarter. The network will enable the company to offer more robust broadband services and leading technologies, providing greater reliability and security for its customers, while reducing costs. We are encouraged that TDS Telecom has been awarded $12.5 million to date in federal stimulus grants to bring broadband services to some of our most rural customers.
"At the enterprise level, TDS remains committed to generating long-term value for our shareholders. We are continuing our active share repurchase program and increased our dividend in 2009 for the 35th consecutive year. We have an exceptionally strong balance sheet and investment-grade credit ratings that will enable us to support our businesses as they move forward with their important initiatives."
Stock repurchase summary
The following represents repurchases of both TDS common and special common shares.
Percent of
Number of Shares Cost
Repurchase Period Shares Outstanding (in millions)
----------------- ------ ----------- -------------
2009 (fourth quarter) 552,981 $16.6
2009 (third quarter) 2,633,467 $74.0
2009 (second quarter) 2,684,267 $73.9
2009 (first quarter) 504,026 $12.1
------- -----
2009 (full year) 6,374,741 6% $176.6
2008 (full year) 5,861,822 5% $199.6
--------- ------
Total 2009 and 2008 12,236,563 10% $376.2
========== === ======
Loss on impairment of intangible assets
In the fourth quarter of 2009, TDS recorded an impairment loss of $14 million (pre-tax) on licenses as a result of its annual impairment assessment of licenses and goodwill. In the fourth quarter of 2008, TDS recorded an impairment loss of $414.4 million on licenses, attributable to the deterioration in the credit and financial markets. The impairment charges had no impact on cash or cash flow.
Impact of Impact of
Impairment for Impairment for
the three months ended the year ended
December 31, December 31,
(Dollars in millions, except per -------------- ------------
share amounts) 2009 2008 2009 2008
-------------------------------- ---- ---- ---- ----
Net income attributable to TDS
shareholders, excluding licenses
impairments(1) $23.6 $40.3 $201.0 $302.7
----- ----- ------ ------
Loss on impairment of intangible
assets related to licenses (14.0) (414.4) (14.0) (414.4)
Income tax and noncontrolling
interest impact of license
impairment(1) 6.9 205.2 6.9 205.2
--- ----- --- -----
Impact of licenses impairments on
net income attributable to TDS
shareholders(1) (7.1) (209.2) (7.1) (209.2)
---- ------ ---- ------
Net income attributable to
TDS shareholders $16.5 $(168.9) $193.9 $93.5
===== ======= ====== =====
Diluted earnings per share
attributable to TDS shareholders,
excluding license impairments(1) $0.22 $0.35 $1.84 $2.60
Impact of license impairments on
diluted earnings (loss) per share
attributable to TDS
shareholders(1) (0.07) (1.84) (0.07) (1.80)
----- ----- ----- -----
Diluted earnings (loss) per share
attributable to TDS shareholders $0.15 $(1.49) $1.77 $0.80
===== ====== ===== =====
(1) These amounts are non-GAAP financial measures. The purpose of
presenting these measures is to provide information on the impact of
losses on impairment related to licenses on results of operations.
Such impairments are discrete, significant amounts that impact the
comparability of the results of operations, and TDS believes it is
useful to disclose these impacts. The income tax and noncontrolling
interest impact is calculated by allocating the losses on impairment
to the respective consolidated subsidiaries, and applying the income
tax rate and noncontrolling interest percentages applicable to these
respective subsidiaries.
Guidance for year ending Dec. 31, 2010
This guidance represents the views of management as of Feb. 25, 2010 and should not be assumed to be accurate as of any other date. There can be no assurance that final results will not differ materially from this guidance. TDS undertakes no legal duty to update such information, whether as a result of new information, future events, or otherwise.
U.S. Cellular
Service Revenue $3,975 - $4,075 million
Operating Income $250 - $350 million
Depreciation, Amortization & Accretion(1) Approx. $600 million
Capital Expenditures Approx. $600 million
TDS Telecom (ILEC and CLEC)
Operating Revenues $740-$780 million
Operating Income $70-$100 million
Depreciation, Amortization & Accretion(1) Approx. $170 million
Capital Expenditures Approx. $140 million
(1) Includes losses on disposals of assets
Conference call information
TDS will hold a conference call on Feb. 25, 2010 at 9:30 a.m. CST.
- Access the live call online at http://phx.corporate-ir.net/phoenix.zhtml?p=irol-eventDetails&c=67422&eventID=2754661 or on the Conference Calls page of www.teldta.com.
- Access the call by phone at 866-871-4351 (US/Canada) and use conference ID #57950705.
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 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 had 12,400 employees as of Dec. 31, 2009. For more information about TDS, visit www.teldta.com.
About U.S. Cellular
United States Cellular Corporation, the nation's sixth-largest wireless carrier, provides a comprehensive range of wireless products and services, excellent customer support, and a high-quality network to more than 6.1 million customers in 26 states. The Chicago-based company employed 8,900 full-time equivalent associates as of Dec. 31, 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 U.S. Cellular to successfully grow its markets; the overall economy; competition; the access to and pricing of unbundled network elements; 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; risks and uncertainties relating to possible future restatements; 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 the Web sites at:
TDS: www.teldta.com |
TDS Telecom: www.tdstelecom.com |
|
U.S. Cellular: www.uscellular.com |
||
UNITED STATES CELLULAR CORPORATION
SUMMARY OPERATING DATA
Quarter Ended 12/31/2009 9/30/2009 6/30/2009 3/31/2009 12/31/2008
---------- --------- --------- --------- ----------
Total population
Consolidated
markets
(1)(2) 89,712,000 85,118,000 83,726,000 83,726,000 83,014,000
Consolidated
operating
markets(1) 46,306,000 46,306,000 46,306,000 46,306,000 46,009,000
Market
penetration
at end of
period
Consolidated
markets(3) 6.8% 7.2% 7.4% 7.5% 7.5%
Consolidated
operating
markets(3) 13.3% 13.2% 13.3% 13.5% 13.5%
All customers
Total at end
of period 6,141,000 6,131,000 6,155,000 6,243,000 6,196,000
Gross
additions 399,000 386,000 317,000 404,000 395,000
Net additions
(losses) 10,000 (24,000) (88,000) 47,000 20,000
Retail
customers
Total at end
of period 5,744,000 5,705,000 5,711,000 5,770,000 5,707,000
Gross
additions 354,000 351,000 286,000 366,000 352,000
Net postpay
additions
(losses) 26,000 8,000 (32,000) 60,000 41,000
Net prepay
additions
(losses) 13,000 (14,000) (27,000) 3,000 (8,000)
Service revenue
components
(000s)
Retail service
revenue $867,765 $865,867 $871,209 $874,098 $860,503
Inbound roaming
revenue 61,728 68,767 62,223 60,057 78,768
Other revenue 56,814 50,289 41,323 47,719 37,681
------ ------ ------ ------ ------
Total service
revenues (000s) $986,307 $984,923 $974,755 $981,874 $976,952
Divided by
average
customers (000s) 6,139 6,138 6,199 6,229 6,178
Divided by three
months in each
quarter 3 3 3 3 3
--- --- --- --- ---
Average monthly
revenue per
unit(4) $53.55 $53.49 $52.41 $52.54 $52.71
Retail service
revenue per
unit (4) $47.12 $47.02 $46.85 $46.78 $46.43
Inbound roaming
revenue per
unit(4) $3.35 $3.73 $3.35 $3.21 $4.25
Other revenue
per unit(4) $3.08 $2.74 $2.21 $2.55 $2.03
Postpay churn
rate(5) 1.6% 1.7% 1.7% 1.5% 1.6%
Capital
expenditures
(000s) $189,000 $128,900 $91,200 $137,700 $190,000
Cell sites in
service 7,279 7,161 7,043 6,942 6,877
(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) Includes 4.5 million incremental population counts resulting from the
licenses awarded to King Street Wireless L.P. in December 2009.
(3) 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.
(4) Calculated by dividing the components of Service Revenues by the
average customers and number of months in the quarter.
(5) Calculated by dividing the total postpay customer disconnects during
the quarter by the average postpay customer base for the quarter.
TELEPHONE AND DATA SYSTEMS, INC.
SUMMARY OPERATING DATA
Quarter Ended 12/31/2009 9/30/2009 6/30/2009 3/31/2009 12/31/2008
---------- --------- --------- --------- ----------
TDS Telecom
ILEC:
Equivalent access
lines(1) 775,900 772,700 775,800 777,100 776,700
Physical access
lines(2) 536,300 539,400 548,000 556,800 566,200
High-speed data
customers(3) 208,300 202,100 197,100 188,100 178,300
Long-distance
customers 362,800 356,500 354,100 348,900 347,000
Managed IP
stations(4) 1,900 1,500 1,200 1,000 600
Capital expenditures
(000s) $26,900 $23,800 $26,200 $21,400 $50,200
CLEC:
Equivalent access
lines(1) 355,900 364,100 372,300 381,000 393,000
High-speed data
customers(3) 36,900 37,600 38,700 39,700 40,800
Managed IP
stations(4) 12,000 9,600 6,400 4,100 2,100
Capital expenditures
(000s) $6,800 $4,700 $5,700 $5,000 $7,200
(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 DSL, 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 December 31,
(Unaudited, dollars and shares in thousands, except per share amounts)
Increase/(Decrease)
-------------------
2009(2)(3) 2008 Amount Percent
----------- ---- ------ -------
Operating revenues
U.S. Cellular $1,060,997 $1,052,862 $8,135 1%
TDS Telecom 198,048 204,790 (6,742) (3)%
All Other(1) 3,764 6,317 (2,553) (40)%
----- ----- ------
1,262,809 1,263,969 (1,160) -
--------- --------- ------
Operating expenses
U.S. Cellular
Expenses excluding
depreciation,
amortization
and accretion 879,636 845,013 34,623 4%
Depreciation,
amortization and
accretion 146,807 143,709 3,098 2%
Loss on asset
disposals, net 7,528 6,602 926 14%
Loss on impairment
of intangible
assets 14,000 386,653 (372,653) (96)%
------ ------- --------
1,047,971 1,381,977 (334,006) (24)%
--------- --------- --------
TDS Telecom
Expenses excluding
depreciation,
amortization and
accretion 129,568 130,154 (586) -
Depreciation,
amortization and
accretion 42,044 40,751 1,293 3%
Loss on asset
disposals, net 649 508 141 28%
--- --- ---
172,261 171,413 848 -
------- ------- ---
All Other(1)
Expenses excluding
depreciation and
amortization 367 6,739 (6,372) (95)%
Depreciation and
amortization 2,757 3,458 (701) (20)%
(Gain) Loss on asset
disposals, net 119 (4) 123 >100%
Loss on impairment of
intangible assets - 27,723 (27,723) N/M
--- ------ -------
3,243 37,916 (34,673) (91)%
----- ------ -------
Total operating
expenses 1,223,475 1,591,306 (367,831) (23)%
--------- --------- --------
Operating income (loss)
U.S. Cellular 13,026 (329,115) 342,141 >100%
TDS Telecom 25,787 33,377 (7,590) (23)%
All Other (1) 521 (31,599) 32,120 >100%
--- ------- ------
39,334 (327,337) 366,671 >100%
------ -------- -------
Investment and other
income (expense)
Equity in earnings of
unconsolidated entities 23,698 22,867 831 4%
Interest and dividend
income 2,686 3,313 (627) (19)%
Interest expense (31,777) (29,265) (2,512) (9)%
Other, net 496 127 369 >100%
--- --- ---
(4,897) (2,958) (1,939) (66)%
------ ------ ------
Income (loss) before
income taxes 34,437 (330,295) 364,732 >100%
Income tax expense
(benefit) 11,909 (133,443) 145,352 >100%
------ -------- -------
Net income (loss) 22,528 (196,852) 219,380 >100%
Less: Net (income) loss
attributable to
noncontrolling
interests, net of tax (6,010) 27,926 (33,936) >100%
------ ------ -------
Net income (loss)
attributable to TDS
shareholders 16,518 (168,926) 185,444 >100%
Preferred dividend
requirement (13) (13) - -
--- --- ---
Net income (loss)
available to common $16,505 $(168,939) $185,444 >100%
======= ========= ========
Basic weighted average
shares outstanding 106,166 113,711 (7,545) (7)%
Basic earnings (loss)
per share attributable
to TDS shareholders $0.16 $(1.49) $1.65 >100%
Diluted weighted average
shares outstanding 106,489 113,711 (7,222) (6)%
Diluted earnings (loss)
per share attributable
to TDS shareholders $0.15 $(1.49) $1.64 >100%
(1) Consists of Suttle Straus printing and distribution operations,
corporate operations and intercompany eliminations.
(2) During the three months ended December 31, 2009, U.S. Cellular
operating expenses excluding depreciation, amortization and accretion
were reduced by a $7.1 million out-of-period adjustment to correct
rent expense. Management does not believe that the adjustment is
material to the current year or any prior year's earnings, earnings
trends or financial statement line items. The adjustment was recorded
in the three months ended December 31, 2009 and no prior periods were
adjusted.
(3) During the three months ended December 31, 2009, TDS recorded
adjustments that decreased and increased U.S. Cellular operating
expenses excluding depreciation, amortization and accretion by $9.7
million and $11.6 million, respectively, to reflect revised estimates
related to customer usage charges and bad debts expense. The net of
these adjustments was an increase to U.S. Cellular operating expenses
excluding depreciation, amortization and accretion of $1.9 million
during the three months ended December 31, 2009.
N/M – Percentage change not meaningful
TELEPHONE AND DATA SYSTEMS, INC.
CONSOLIDATED STATEMENT OF OPERATIONS HIGHLIGHTS
Year Ended December 31,
(Unaudited, dollars and shares in thousands, except per share amounts)
Increase/(Decrease)
-------------------
2009(2) 2008 Amount Percent
------------------------- ------ -------
Operating revenues
U.S. Cellular $4,214,611 $4,243,185 $(28,574) (1)%
TDS Telecom 789,852 824,282 (34,430) (4)%
All Other(1) 16,211 24,552 (8,341) (34)%
------ ------ ------
5,020,674 5,092,019 (71,345) (1)%
--------- --------- -------
Operating expenses
U.S. Cellular
Expenses excluding
depreciation,
amortization and
accretion 3,288,370 3,228,513 59,857 2%
Depreciation,
amortization and
accretion 570,658 576,931 (6,273) (1)%
Loss on asset
disposals, net 15,176 23,378 (8,202) (35)%
Loss on impairment
of intangible
assets 14,000 386,653 (372,653) (96)%
------ ------- --------
3,888,204 4,215,475 (327,271) (8)%
--------- --------- --------
TDS Telecom
Expenses excluding
depreciation,
amortization and
accretion 527,570 522,815 4,755 1%
Depreciation,
amortization and
accretion 167,316 158,366 8,950 6%
Loss on asset
disposals, net 2,401 857 1,544 >100%
----- --- -----
697,287 682,038 15,249 2%
------- ------- ------
All Other (1)
Expenses excluding
depreciation and
amortization 15,193 23,788 (8,595) (36)%
Depreciation and
amortization 11,996 14,780 (2,784) (19)%
Loss on asset
disposals, net 188 61 127 >100%
Loss on impairment
of intangible assets - 27,723 (27,723) N/M
--- ------ -------
27,377 66,352 (38,975) (59)%
------ ------ -------
Total operating
expenses 4,612,868 4,963,865 (350,997) (7)%
--------- --------- --------
Operating income (loss)
U.S. Cellular 326,407 27,710 298,697 >100%
TDS Telecom 92,565 142,244 (49,679) (35)%
All Other (1) (11,166) (41,800) 30,634 73%
------- ------- ------
407,806 128,154 279,652 >100%
------- ------- -------
Investment and other
income (expense)
Equity in earnings
of unconsolidated
entities 90,732 89,812 920 1%
Interest and dividend
income 11,121 39,131 (28,010) (72)%
Gain on investments
and financial
instruments - 31,595 (31,595) N/M
Interest expense (124,557) (137,899) 13,342 10%
Other, net 2,000 2,213 (213) (10)%
----- ----- ----
Total investment
and other income
(expense) (20,704) 24,852 (45,556) >100%
------- ------ -------
Income before income
taxes 387,102 153,006 234,096 >100%
Income tax expense 133,376 30,093 103,283 >100%
------- ------ -------
Net income 253,726 122,913 130,813 >100%
Less: Net income
attributable to
noncontrolling
interests, net of tax (59,824) (29,372) (30,452) >100%
------- ------- -------
Net income attributable
to TDS shareholders 193,902 93,541 100,361 >100%
Preferred dividend
requirement (51) (52) 1 2%
--- --- ---
Net income available to
common $193,851 $93,489 $100,362 >100%
======== ======= ========
Basic weighted average
shares outstanding 109,339 115,817 (6,478) (6)%
Basic earnings per
share attributable
to TDS shareholders $1.77 $0.81 $0.96 >100%
Diluted weighted average
shares outstanding 109,577 116,255 (6,678) (6)%
Diluted earnings per
share attributable to
TDS shareholders $1.77 $0.80 $0.97 >100%
(1) Consists of Suttle-Straus printing and distribution operations,
corporate operations and intercompany eliminations.
(2) During the twelve months ended December 31, 2009, U.S. Cellular
operating expenses excluding depreciation, amortization and accretion
were reduced by a $6.5 million out-of-period adjustment to correct
rent expense. Management does not believe that the adjustment is
material to the current year or any prior year's earnings, earnings
trends or financial statement line items. The adjustment was recorded
in the twelve months ended December 31, 2009 and no prior periods were
adjusted.
N/M – Percentage change not meaningful
TELEPHONE AND DATA SYSTEMS, INC.
CONSOLIDATED BALANCE SHEET HIGHLIGHTS
(Unaudited, dollars in thousands)
ASSETS
December 31, December 31,
2009 2008
---- ----
Current assets
Cash and cash equivalents $670,992 $777,309
Short-term investments 113,275 27,705
Accounts receivable from customers and other 511,914 516,849
Inventory 156,987 122,377
Other current assets 190,974 184,696
------- -------
1,644,142 1,628,936
--------- ---------
Investments
Licenses 1,443,025 1,441,440
Goodwill 707,840 707,079
Customer lists 26,589 34,032
Investments in unconsolidated entities 203,799 205,768
Other investments 9,785 10,623
----- ------
2,391,038 2,398,942
--------- ---------
Property, plant and equipment, net
U.S. Cellular 2,601,338 2,620,376
TDS Telecom 880,378 918,454
Other 26,129 30,094
------ ------
3,507,845 3,568,924
--------- ---------
Other assets and deferred charges 65,759 55,614
------ ------
Total assets $7,608,784 $7,652,416
========== ==========
TELEPHONE AND DATA SYSTEMS, INC.
CONSOLIDATED BALANCE SHEET HIGHLIGHTS
(Unaudited, dollars in thousands)
LIABILITIES AND EQUITY
December 31, December 31,
2009 2008
---- ----
Current liabilities
Current portion of long-term debt $2,509 $15,337
Accounts payable 347,348 319,575
Customer deposits and deferred revenues 167,963 174,101
Accrued interest 12,227 14,236
Accrued taxes 39,644 25,192
Accrued compensation 93,524 90,512
Other current liabilities 117,081 134,334
------- -------
780,296 773,287
------- -------
Deferred liabilities and credits
Net deferred income tax liability 517,762 471,623
Other deferred liabilities and credits 373,862 368,045
------- -------
891,624 839,668
------- -------
Long-term debt 1,492,908 1,621,422
--------- ---------
Noncontrolling interests with redemption features 727 589
--- ---
Equity
TDS stockholders' equity
Common Shares, $.01 par value 571 571
Special Common Shares, $.01 par value 634 634
Series A Common Shares, $.01 par value 65 65
Capital in excess of par value 2,088,807 2,066,597
Treasury Shares, at cost
Common Shares (217,381) (163,017)
Special Common Shares (464,268) (350,091)
Accumulated other comprehensive income (2,710) (16,812)
Retained earnings 2,371,587 2,229,540
--------- ---------
Total TDS stockholders' equity 3,777,305 3,767,487
--------- ---------
Preferred shares 832 852
Noncontrolling interests 665,092 649,111
------- -------
Total equity 4,443,229 4,417,450
--------- ---------
Total liabilities and equity $7,608,784 $7,652,416
========== ==========
BALANCE SHEET HIGHLIGHTS
December 31, 2009
(Unaudited, dollars in thousands)
TDS
U.S. TDS Corporate Intercompany TDS
Cellular Telecom & Other Eliminations Consolidated
-------- ------- ------- ------------ ------------
Cash and cash
equivalents $294,411 $32,288 $344,293 $- $670,992
Affiliated cash
investments - 274,687 - (274,687) -
Short-term
investments 330 112,945 - - 113,275
Notes receivable-
affiliates - - 5,005 (5,005) -
--- --- ----- ------ ---
$294,741 $419,920 $349,298 $(279,692) $784,267
======== ======== ======== ========= ========
Licenses, goodwill
and customer
lists $1,933,820 $438,862 $(195,228) $- $2,177,454
Investment in
unconsolidated
entities 161,481 3,660 44,766 (6,108) 203,799
Other investments 4,214 2,178 3,393 - 9,785
----- ----- ----- --- -----
$2,099,515 $444,700 $(147,069) $(6,108) $2,391,038
========== ======== ========= ======= ==========
Property, plant
and equipment,
net $2,601,338 $880,378 $26,129 $- $3,507,845
========== ======== ======= === ==========
Notes
payable-affiliates $- $5,005 $274,687 $(279,692) $-
=== ====== ======== ========= ===
Long-term debt:
Current portion $76 $391 $2,042 $- $2,509
Non-current
portion 867,522 2,280 623,106 - 1,492,908
------- ----- ------- --- ---------
Total $867,598 $2,671 $625,148 $- $1,495,417
======== ====== ======== === ==========
Preferred shares $- $- $832 $- $832
=== === ==== === ====
Capital
expenditures:
Quarter ended
12/31/09 $189,000 $33,700 $(2,100) $- $220,600
Year ended
12/31/09 $546,800 $120,500 $3,900 $- $671,200
TDS TELECOM HIGHLIGHTS
Three Months Ended December 31,
(Unaudited, dollars in thousands)
Increase/(Decrease)
------------------
2009 2008 Amount Percent
---- ---- ------ -------
Local Telephone Operations
Operating revenues
Voice $45,304 $49,649 $(4,345) (9)%
Data 26,965 24,171 2,794 12%
Network access 69,364 68,476 888 1%
Miscellaneous 9,840 10,735 (895) (8)%
----- ------ ----
151,473 153,031 (1,558) (1)%
------- ------- ------
Operating expenses
Cost of services and products 47,588 45,241 2,347 5%
Selling, general and
administrative expenses 42,996 42,579 417 1%
Depreciation, amortization and
accretion 35,873 34,340 1,533 4%
Loss on asset disposals 456 434 22 5%
--- --- ---
126,913 122,594 4,319 4%
------- ------- -----
Operating income $24,560 $30,437 $(5,877) (19)%
------- ------- -------
Competitive Local Exchange Carrier
Operations
Revenues $48,940 $53,295 $(4,355) (8)%
------- ------- -------
Expenses excluding depreciation,
amortization and accretion 41,349 43,870 (2,521) (6)%
Depreciation, amortization and
accretion 6,171 6,411 (240) (4)%
Loss on asset disposals 193 74 119 >100%
--- --- ---
47,713 50,355 (2,642) (5)%
------ ------ ------
Operating income $1,227 $2,940 $(1,713) (58)%
------ ------ -------
Intercompany revenues $(2,365) $(1,536) $(829) (54)%
Intercompany expenses (2,365) (1,536) (829) (54)%
------ ------ ----
- - - -
--- --- ---
Total TDS Telecom operating income $25,787 $33,377 $(7,590) (23)%
======= ======= =======
TDS TELECOM HIGHLIGHTS
Twelve Months Ended December 31,
(Unaudited, dollars in thousands)
Increase/(Decrease)
-------------------
2009 2008 Amount Percent
---- ---- ------ -------
Local Telephone Operations
Operating revenues
Voice $187,223 $203,372 $(16,149) (8)%
Data 103,682 90,059 13,623 15%
Network access 271,276 278,484 (7,208) (3)%
Miscellaneous 37,346 39,119 (1,773) (5)%
------ ------ ------
599,527 611,034 (11,507) (2)%
------- ------- -------
Operating expenses
Cost of services and products 194,030 184,285 9,745 5%
Selling, general and
administrative expenses 171,250 166,787 4,463 3%
Depreciation, amortization
and accretion 142,913 134,935 7,978 6%
Loss on asset disposals 1,949 466 1,483 >100%
----- --- -----
510,142 486,473 23,669 5%
------- ------- ------
Operating income $89,385 $124,561 $(35,176) (28)%
------- -------- --------
Competitive Local Exchange Carrier
Operations
Revenues $199,375 $220,002 $(20,627) (9)%
-------- -------- --------
Expenses excluding
depreciation, amortization
and accretion 171,340 178,497 (7,157) (4)%
Depreciation, amortization
and accretion 24,403 23,431 972 4%
Loss on asset disposals 452 391 61 16%
--- --- ---
196,195 202,319 (6,124) (3)%
------- ------- ------
Operating income $3,180 $17,683 $(14,503) (82)%
------ ------- --------
Intercompany revenues $(9,050) $(6,754) $(2,296) (34)%
Intercompany expenses (9,050) (6,754) (2,296) (34)%
------ ------ ------
- - - -
--- --- ---
Total TDS Telecom operating income $92,565 $142,244 $(49,679) (35)%
======= ======== ========
TELEPHONE AND DATA SYSTEMS, INC.
CONSOLIDATED STATEMENT OF CASH FLOWS
Twelve Months Ended December 31,
(Unaudited, dollars in thousands)
2009 2008
---- ----
Cash flows from operating activities
Net income $253,726 $122,913
Add (deduct) adjustments to reconcile net
income to net cash flows from operating
activities
Depreciation, amortization and accretion 749,970 750,077
Bad debts expense 115,989 83,004
Stock-based compensation expense 32,486 22,693
Deferred income taxes, net 31,053 (437,919)
Gain on investments and financial
instruments, net - (31,595)
Equity in earnings of unconsolidated
entities (90,732) (89,812)
Distributions from unconsolidated entities 91,587 92,335
Loss on impairment of intangible assets 14,000 414,376
Loss on asset disposals, net 17,765 24,296
Noncash interest expense 4,412 10,125
Excess tax benefit from stock awards (25) (1,966)
Other operating activities (46) (1,831)
Changes in assets and liabilities
Accounts receivable (110,258) (79,427)
Inventory (34,566) (17,123)
Accounts payable 29,646 6,804
Customer deposits and deferred revenues (6,165) 7,692
Accrued taxes 56,068 (11,725)
Accrued interest (2,009) (4,221)
Other assets and liabilities (50,307) (9,804)
------- ------
1,102,594 848,892
--------- -------
Cash flows from investing activities
Additions to property, plant and equipment (671,165) (734,923)
Cash paid for acquisitions and licenses (29,276) (389,189)
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 (109,230) (27,446)
Cash received from short-term investments 23,660 -
Other investing activities 4,515 355
----- ---
(781,446) (902,752)
-------- --------
Cash flows from financing activities
Borrowings from revolving credit facilities - 100,000
Repayment of revolving credit facilities - (100,000)
Repayment of long-term debt (143,078) (9,448)
Settlement of variable prepaid forward contracts - (47,357)
TDS Common Shares and Special Common Shares
reissued for benefit plans, net of tax payments 819 1,409
U.S. Cellular Common Shares reissued for benefit
plans, net of tax payments (82) (2,288)
Excess tax benefit from stock awards 25 1,966
Repurchase of TDS Common and Special Common
Shares (178,536) (197,672)
Repurchase of U.S. Cellular Common Shares (33,585) (28,366)
Dividends paid (46,798) (47,320)
Payment of debt issuance costs (10,079) -
Distributions to noncontrolling interests (17,533) (16,769)
Other financing activities 1,382 2,568
----- -----
(427,465) (343,277)
-------- --------
Net decrease in cash and cash equivalents (106,317) (397,137)
Cash and cash equivalents
Beginning of period 777,309 1,174,446
------- ---------
End of period $670,992 $777,309
======== ========
SOURCE Telephone and Data Systems, Inc.
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