-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, KhY0Nml9CqU8gGtcFQhjvyTI2g/xjGm5lVdFlXRLhOTrfMYnodih8DX7Jvk0iz4P yS5LvhmZpfWa8fzdwAvZLQ== 0001051512-01-000004.txt : 20010129 0001051512-01-000004.hdr.sgml : 20010129 ACCESSION NUMBER: 0001051512-01-000004 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20010125 ITEM INFORMATION: ITEM INFORMATION: FILED AS OF DATE: 20010125 FILER: COMPANY DATA: COMPANY CONFORMED NAME: TELEPHONE & DATA SYSTEMS INC /DE/ CENTRAL INDEX KEY: 0001051512 STANDARD INDUSTRIAL CLASSIFICATION: TELEPHONE COMMUNICATIONS (NO RADIO TELEPHONE) [4813] IRS NUMBER: 362669023 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: SEC FILE NUMBER: 001-14157 FILM NUMBER: 1515128 BUSINESS ADDRESS: STREET 1: 30 NORTH LASALLE STREET STREET 2: 8401 GREENWAY BLVD CITY: CHICAGO STATE: IL ZIP: 60602 BUSINESS PHONE: 3126301900 MAIL ADDRESS: STREET 1: 30 NORTH LASALLE STREET STREET 2: 8401 GREENWAY BLVD CITY: CHICAGO STATE: IL ZIP: 60602 8-K 1 0001.txt FORM 8-K FORM 8-K SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 CURRENT REPORT Pursuant to Section 13 or 15(d) of The Securities Exchange Act of 1934 Date of Report (Date of earliest event reported): January 25, 2001 ---------------- TELEPHONE AND DATA SYSTEMS, INC. -------------------------------- (Exact name of registrant as specified in its charter) Delaware 1-14157 36-2669023 -------- ------- ---------- (State or other (Commission (IRS Employer jurisdiction of File Number) Identification incorporation) No.) 30 North LaSalle Street, Chicago, Illinois 60602 - ------------------------------------------------ --------- (Address of principal executive offices) (Zip Code) Registrant's telephone number, including area code: (312) 630-1900 Not Applicable -------------- (Former name or former address, if changed since last report) Item 5. Other Events. ------------- On January 25, 2001, Telephone and Data Systems, Inc. reported fourth quarter results and other financial information. TDS also announced that it is restating consolidated financial statements for 1993 through 1999 and the three quarters ended September 30, 2000. This Current Report on Form 8-K is being filed for the purpose of filing the news release issued by TDS relating to such announcement as an exhibit. Item 7. Financial Statements and Exhibits --------------------------------- Exhibits -------- The exhibits accompanying this report are listed in the accompanying Exhibit Index. 2 SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereto duly authorized. Telephone and Data Systems, Inc. (Registrant) Date: January 25, 2001 By: /s/ D. Michael Jack ------------------------ D. Michael Jack Vice President and Controller (Principal Accounting Officer) 3 EXHIBIT INDEX Exhibit Number Description of Exhibit - -------------- ---------------------- 99.1 January 25, 2001 News Release announcing fourth quarter results and other related financial information. 4 EX-99 2 0002.txt EXHIBIT 99.1 Exhibit 99.1 As previously announced, TDS and its subsidiaries will hold a joint teleconference on January 25, 2001 at 10:00 central daylight time. Interested parties may listen to the call live over the Internet at www.teldta.com. --------------- Contact: Mark A. Steinkrauss, Vice President, Corporate Relations (312) 592-5384 mark.steinkrauss@teldta.com FOR RELEASE: IMMEDIATE TDS REPORTS EXCELLENT FOURTH QUARTER RESULTS AND OTHER RELATED FINANCIAL INFORMATION January 25, 2001 - Chicago, Illinois - Telephone and Data Systems, Inc. [AMEX:TDS] reported operating revenues of $597.4 million for the fourth quarter of 2000, up 11.9% from the comparable period a year ago. Operating cash flow increased 14.2% to $180.6 million from the fourth quarter of 1999. Diluted earnings per share from continuing operations, excluding gains and losses, was $.46 compared to $.16 in the fourth quarter of 1999. Fourth Quarter Highlights - U.S. Cellular's net customer unit activations increased 14.8% to 171,000 and the postpay churn rate decreased to 1.8%. - Consolidated revenues grew 11.9% over the fourth quarter of 1999 to $597.4 million. For the quarter, U.S. Cellular's revenues grew 12.1% and TDS Telecom's revenues were up 11.2%. - Consolidated operating cash flow grew 14.2% over fourth quarter 1999. U.S. Cellular's quarterly operating cash flow grew 13.2% and TDS Telecom's operating cash flow grew 15.9%. - TDS repurchased 101,600 Common shares in the open market during the fourth quarter for $9.1 million. For the entire year, 2,665,700 Common shares were repurchased for $287.7 million. - TDS Metrocom grew its fourth quarter revenues 81% over fourth quarter 1999 results and grew its full year revenues by 121%. - The Federal Trade Commission granted early termination of the Hart Scott Rodino waiting period for the TDS and Chorus Communications Group merger. The merger is still expected to close in the second quarter of 2001. - During the quarter, U.S. Cellular made changes to its revenue recognition policies by implementing SEC Staff Accounting Bulletin (SAB) 101 (Revenue Recognition), retroactive to January 1, 2000. These changes result in a reclassification of outbound roaming revenues to service revenues. Before, these amounts were included as an offset to systems operations expense. SAB 101 had no impact on TDS Telecom operating results. (See Tables A-B) - TDS has restated financial information for 1993 through 1999 and the first three quarters of 2000 as a result of a reconsideration of the appropriate accounting treatment of the minority share of income or loss for consolidated companies and for the timing of deferred tax recognition for discontinued operations under FAS-109 (Accounting for Income Taxes). The restatement affects only financial accounting results and does not have any effect on cash, tax filings or taxes due or subsidiary financial statements. (See Tables A-G) LeRoy T. Carlson, Jr., President and Chief Executive Officer said: "Strong subscriber growth at U.S. Cellular combined with above industry-average growth at TDS Telecom and 81% revenue growth at TDS Metrocom, highlighted our fourth quarter and resulted in a strong finish for 2000. We reported record operating cash flow of $819 million, up 13% over the previous year. "All U.S. Cellular associates have contributed to the company's success in intensifying its customer focused culture over the past year. The company offers highly attractive local rate plans, combined with national service through its partners. Its products and services are available at numerous, convenient distribution points, and are backed by state-of-the-art customer service, which draws customers to its network and ensures their continuing loyalty. The result has been a very low 1.8% churn rate for the most recent quarter. "At TDS Telecom, our ILEC operation grew operating cash flow 17%. Our CLEC operation, TDS Metrocom, which offers highly competitive rates together with outstanding customer service, added 10,600 lines in the quarter. TDS Metrocom continued to expand into carefully selected markets in southern Wisconsin, northern Illinois and southern Michigan." Stock Repurchase TDS Board of Directors authorized a two million Common share repurchase on February 25, 2000. TDS completed the February 25 authorization on August 29 at an average price of $107.53. On August 30, TDS's Board of Directors authorized another two million Common share repurchase, of which 101,600 shares were repurchased at an average price of $89.62 during the fourth quarter. A total of 665,700 shares have been repurchased under the August 30 repurchase at an average price of $109.16. 2 Restatement of Prior Financial Information Management is restating TDS's consolidated financial statements for 1993 through 1999 and the three quarters ended September 30, 2000 as a result of the reconsideration of the appropriate accounting treatment of minority share of income or loss of consolidated companies under FAS-109 (Accounting for Income Taxes). At the time FAS-109 was implemented in 1993, TDS concluded that the minority share of income or loss in consolidated subsidiaries should be treated as a temporary difference between tax and financial reporting. Accordingly, the company adjusted income tax expense and deferred tax assets or liabilities using that method from 1993 through the third quarter of 2000. TDS has determined that minority interests should not be treated as temporary differences under FAS-109 and will restate financial results for the year 1993 through September 30, 2000. This only affects the reported results of TDS. The cumulative effect of the restatement for the periods noted above is to increase income tax expense and reduce net income from continuing operations by $70.6 million. The restatement had no cumulative effect on discontinued operations for the same period. However, the restatement reduces income tax expense and increases the net income from discontinued operations by $51.6 million through the date of Aerial's merger with VoiceStream, and decreases the gain reported in conjunction with that transaction on May 4, 2000 by a corresponding amount. The restatement has no effect on cash, tax filings or taxes due or subsidiary financial statements. Management is also restating the deferred taxes and net income from discontinued operations for the third quarter of 1999 and the second quarter of 2000 to be consistent with FAS-109 (Accounting for Income Taxes) and EITF Issue No. 93-17 (Recognition of Deferred Tax Assets for a Parent Company's Excess Tax Basis in the Stock of a Subsidiary That Is Accounted for as a Discontinued Operation). The TDS financial reporting basis in the stock of Aerial Communications, Inc. (Aerial) exceeded the tax basis on the date TDS decided to merge Aerial. A tax liability for that excess should be recognized as of the decision date. The restatement creates a deferred tax liability of $30 million as of the September 17, 1999 decision date and increases 1999 income tax expense and decreases net income from discontinued operations by the same amount. The gain on the sale of discontinued operations, recognized May 4, 2000, was increased by a corresponding amount in the restatement. The cumulative effect of the restatement is zero and it has no effect on cash, tax filings or taxes due or subsidiary financial statements. The effect of this restatement on the company's financial statements for 1993 through 1999 and the first three quarters of 2000 is presented in Tables A-G accompanying this release. As a result of these restatements, consolidated financial statements and the reports of the independent public accountants thereon previously reported should not be relied upon until the company formally restates such information to reflect the data presented in the Tables. The company will file restated financial statements, to reflect the data presented in the tables, in amendments to its 1999 Form 10-K and Forms 10-Q for the year 2000 with the Securities and Exchange Commission on or before February 15, 2001. 3 U.S. Cellular Corporation [AMEX:USM], TDS's 82.4%-owned subsidiary, reported 14.8% customer unit growth since December 31, 1999. At December 31, U.S. Cellular's customer units in service totaled 3,061,000. Net customer unit activations from marketing channels totaled 171,000 during the fourth quarter. U.S. Cellular's service revenues increased 12.1% to $421.3 million compared to $376.3 million for the fourth quarter of 1999. Operating cash flow increased 13.2% to $113 million compared to $99.9 million in the fourth quarter of 1999. TDS Telecommunications Corporation ("TDS Telecom"), TDS's wholly-owned subsidiary, reported an 11.2% increase in revenues and a 15.9% increase in operating cash flow versus the same period a year ago. TDS Telecom's ILEC revenues increased 8.3%. Access lines grew 5.2%. Operating cash flow increased 17.4% to $70.6 million. TDS Telecom's CLEC revenues increased to $23.3 million for the quarter with 112,100 access line equivalents in service. 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 and projections, 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: changes in the overall economy; changes in competition in the markets in which TDS operates; advances in telecommunications technology; changes in the telecommunications regulatory environment; pending and future litigation; acquisitions/divestitures of properties and or licenses; changes in customer growth rates, penetration rates, churn rates, roaming rates and the mix of products and services offered in our markets. Investors are encouraged to consider these and other risks and uncertainties that are discussed in documents filed by TDS with Securities and Exchange Commission ("SEC"). TDS is a diversified telecommunications corporation founded in 1969. Through its strategic business units, U.S. Cellular and TDS Telecom, TDS operates primarily by providing cellular and local telephone service. TDS builds value for its shareholders by providing excellent communications services in growing, closely related segments of the telecommunications industry. The Company currently employs approximately 8,900 people and serves approximately 3.8 million customers in 35 states. As previously announced, TDS and its subsidiaries will hold a joint teleconference on January 25, 2001 at 10:00 central daylight time. Interested parties may listen to the call live over the Internet at www.teldta.com or connect by telephone at 800/540-0559 passcode: TDS. The conference call will also be archived on our website at www.teldta.com. For more information about TDS and its subsidiaries, visit the web sites at: TDS: http://www.teldta.com TDS Telecom: http://www.tdstelecom.com --------------------- ------------------------- USM: http://www.uscellular.com ------------------------- 4
TELEPHONE AND DATA SYSTEMS, INC. SUMMARY OPERATING DATA Quarter Ended 12/31/00 9/30/00 6/30/00 3/31/00 12/31/99 U.S. Cellular: Total pops (1) 26,646 26,592 26,407 26,406 26,544 TDS's proportionate share 21,959 21,988 21,759 21,467 21,415 Consolidated Markets: Pops owned (000s) 24,208 24,191 24,247 24,209 24,209 Total population (000s) 25,075 24,900 25,044 25,044 25,044 Customer units 3,061,000 2,890,000 2,807,000 2,707,000 2,602,000 Net customer adds 171,000 107,000 100,000 105,000 149,000 Market penetration 12.21% 11.61% 11.21% 10.81% 10.39% Markets in operation 139 138 139 139 139 Cell sites in service 2,501 2,430 2,392 2,331 2,300 Average monthly revenue per unit Local retail $ 36.00 $ 37.25 $ 37.38 $ 35.40 $ 36.40 Inbound roaming 7.42 9.17 9.10 9.21 10.21 Long-distance and other 4.07 4.49 4.16 3.16 3.36 Total $ 47.49 $ 50.91 $ 50.64 $ 47.77 $ 49.97 Minutes of use (MOU) (2) 176 170 156 128 112 Postpay churn rate per month 1.8% 1.8% 1.7% 1.8% 2.0% Marketing cost per gross customer add $ 327 $ 321 $ 335 $ 338 $ 353 TDS Telecom: ILECs: ------ Sales and service offices 110 110 110 109 109 Access lines 601,200 598,400 594,500 576,100 571,700 Growth in ILEC access lines from prior quarter-end: Acquisitions --- --- 10,200 --- --- Internal growth 2,800 3,900 8,200 4,400 900 Average monthly revenue per access line $ 76.56 $ 74.11 $ 74.88 $ 73.41 $ 74.26 Access line equivalents (3) 619,600 614,300 608,400 588,700 583,300 Internet service accounts 72,140 69,300 70,300 68,000 63,600 Long Distance customers (4) 40,500 18,400 N/A N/A N/A Caller I.D. penetration (5) 26.8% 26.1% 25.2% 24.5% 23.6% Voicemail penetration (5) 12.4% 12.2% 11.9% 11.7% 11.5% CLECs: ------ Access line equivalents - total CLECs (3) 112,100 98,000 87,700 76,100 65,900 TDS Metrocom 63,200 52,600 45,100 37,400 30,700 USLink 48,900 45,400 42,600 38,700 35,200 Internet service accounts 12,200 11,600 11,400 10,600 9,400 Percent of access lines on-switch: TDS Metrocom 100.0% 100.0% 100.0% 100.0% 99.0% USLink 13.3% 8.9% 8.9% 8.1% 3.9% Digital Subscriber Lines (DSL): TDS Metrocom 2,261 1,637 1,211 796 497 (1) Population equivalents ("Pops"), owned and acquirable, in thousands (2) Average monthly local minutes of use (without roaming) (3) Access line equivalents are derived by converting high capacity data lines to the estimated capacity of one switched access line. Basic rate ISDN = 2 DSOs; Primary rate ISDN = 23 DSOs; T1 = 24 DSOs; Trunk Lines = 1 (4) TDS Telecom began offering "TDS True Talk" resale long distance to its customers beginning on August 1, 2000, with availability phased in to its service areas throughout August and September. (5) Caller I.D. and Voice Mail penetration is the total residential and business one-party customers purchasing the service divided by the total of these lines equipped for the service. 5
TELEPHONE AND DATA SYSTEMS, INC. FINANCIAL HIGHLIGHTS Three Months Ended December 31, (Unaudited, dollars in thousands, except per share amounts) Increase (Decrease) ------------------------------ 2000 1999 Amount Percent -------------- -------------- -------------- -------------- Operating Revenues U.S. Cellular $ 438,047 $ 390,790 $ 47,257 12.1% TDS Telecom 159,317 143,207 16,110 11.2% -------------- -------------- -------------- 597,364 533,997 63,367 11.9% -------------- -------------- -------------- Operating Expenses Before Depreciation and Amortization U.S. Cellular 325,011 290,927 34,084 11.7% TDS Telecom 91,792 84,931 6,861 8.1% -------------- -------------- -------------- 416,803 375,858 40,945 10.9% -------------- -------------- -------------- Operating Cash Flow (Operating Income Plus Depreciation and Amortization) U.S. Cellular 113,036 99,863 13,173 13.2% TDS Telecom 67,525 58,276 9,249 15.9% -------------- -------------- -------------- 180,561 158,139 22,422 14.2% -------------- -------------- -------------- Depreciation and Amortization** U.S. Cellular 67,863 64,147 3,716 5.8% TDS Telecom 34,512 31,332 3,180 10.1% -------------- -------------- -------------- **includes amortization of $16,814 and $16,142, respectively 102,375 95,479 6,896 7.2% -------------- -------------- -------------- Operating Income U.S. Cellular 45,173 35,716 9,457 26.5% TDS Telecom 33,013 26,944 6,069 22.5% -------------- -------------- -------------- 78,186 62,660 15,526 24.8% -------------- -------------- -------------- Investment and Other Income Interest and Dividend Income 5,832 4,643 1,189 25.6% Investment Income, Net 12,323 (481) 12,804 N/M Gain (Loss) on Cellular and Other Investments (9,878) --- (9,878) N/M Other (Expense), Net (6,650) (2,933) (3,717) N/M -------------- -------------- -------------- 1,627 1,229 398 32.4% -------------- -------------- -------------- Income Before Interest and Income Taxes 79,813 63,889 15,924 24.9% Interest Expense 28,414 23,574 4,840 20.5% Minority Interest in Income of Subsidiary Trust 6,203 6,203 --- 0.0% -------------- -------------- -------------- Income Before Income Taxes 45,196 34,112 11,084 32.5% Income Tax Expense 14,062 19,261 (5,199) (27.0%) -------------- -------------- -------------- Income Before Minority Interest 31,134 14,851 16,283 109.6% Minority Share of (Income), net of tax (9,030) (4,935) (4,095) (83.0%) -------------- -------------- -------------- Income Before Extraordinary Item 22,104 9,916 12,188 122.9% Extraordinary Item - loss on extinguishment of debt, net of tax (6,099) --- (6,099) N/M -------------- -------------- -------------- Net Income 16,005 9,916 6,089 61.4% Preferred Dividend Requirement (119) (145) 26 N/M -------------- -------------- -------------- Net Income Available to Common $ 15,886 $ 9,771 $ 6,115 62.6% ============== ============== ============== Basic Average Common Shares Outstanding (000s) 58,768 61,614 (2,846) (4.6%) Basic Earnings Per Share Continuing Operations $ 0.37 $ 0.16 $ 0.21 131.3% Extraordinary Item (0.10) --- (0.10) N/M -------------- -------------- -------------- $ 0.27 $ 0.16 $ 0.11 68.8% ============== ============== ============== Diluted Average Common Shares Outstanding (000s) 59,377 62,294 (2,917) (4.7%) Diluted Earnings Per Share Continuing Operations $ 0.37 $ 0.16 $ 0.21 131.3% Extraordinary Item (0.10) --- (0.10) N/M -------------- -------------- -------------- $ 0.27 $ 0.16 $ 0.11 68.8% ============== ============== ============== Diluted EPS Continuing Operations--Excluding Gains (Losses) $ 0.46 $ 0.16 $ 0.30 187.5% Diluted EPS Continuing Operations--Gains (Losses) $(0.09) $ --- $(0.09) N/M N/M - Percentage change not meaningful.
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TELEPHONE AND DATA SYSTEMS, INC. FINANCIAL HIGHLIGHTS Year Ended December 31, (Unaudited, dollars in thousands, except per share amounts) Increase (Decrease) -------------------------- 2000 1999 Amount Percent ------------ ------------ ------------ ------------ Operating Revenues U.S. Cellular $ 1,716,640 $ 1,576,429 $ 140,211 8.9% TDS Telecom 610,216 545,917 64,299 11.8% ------------ ------------ ------------ 2,326,856 2,122,346 204,510 9.6% ------------ ------------ ------------ Operating Expenses Before Depreciation and Amortization U.S. Cellular 1,158,629 1,090,615 68,014 6.2% TDS Telecom 349,018 308,016 41,002 13.3% ------------ ------------ ------------ 1,507,647 1,398,631 109,016 7.8% ------------ ------------ ------------ Operating Cash Flow (Operating Income Plus Depreciation and Amortization) U.S. Cellular 558,011 485,814 72,197 14.9% TDS Telecom 261,198 237,901 23,297 9.8% ------------ ------------ ------------ 819,209 723,715 95,494 13.2% ------------ ------------ ------------ Depreciation and Amortization** U.S. Cellular 265,698 229,972 35,726 15.5% TDS Telecom 133,445 123,350 10,095 8.2% ------------ ------------ ------------ **includes amortization of $66,725 and $51,168, respectively 399,143 353,322 45,821 13.0% ------------ ------------ ------------ Operating Income U.S. Cellular 292,313 255,842 36,471 14.3% TDS Telecom 127,753 114,551 13,202 11.5% ------------ ------------ ------------ 420,066 370,393 49,673 13.4% ------------ ------------ ------------ Investment and Other Income Interest and Dividend Income 15,637 8,708 6,929 79.6% Investment Income, Net 28,465 18,397 10,068 54.7% Gain (Loss) on Cellular and Other Investments 15,716 345,938 (330,222) (95.5%) Other (Expense), Net (8,082) (11,198) 3,116 27.8% ------------ ------------ ------------ 51,736 361,845 (310,109) (85.7%) ------------ ------------ ------------ Income Before Interest and Income Taxes 471,802 732,238 (260,436) (35.6%) Interest Expense 100,559 99,984 575 0.6% Minority Interest in Income of Subsidiary Trust 24,810 24,810 --- 0.0% ------------ ------------ ------------ Income From Continuing Operations Before Income Taxes 346,433 607,444 (261,011) (43.0%) Income Tax Expense 149,481 251,001 (101,520) (40.4%) ------------ ------------ ------------ Income From Continuing Operations Before Minority Interest 196,952 356,443 (159,491) (44.7%) Minority Share of (Income), net of tax (51,425) (65,117) 13,692 21.0% ------------ ------------ ------------ Income From Continuing Operations 145,527 291,326 (145,799) (50.0%) ------------ ------------ ------------ Discontinued Operations Loss from operations of Aerial, net of tax --- (111,492) 111,492 N/M Gain on disposal of Aerial, net of tax 2,125,787 --- 2,125,787 N/M ------------ ------------ ------------ 2,125,787 (111,492) 2,237,279 N/M ------------ ------------ ------------ Income Before Extraordinary Item and Cumulative Effect of Accounting Change 2,271,314 179,834 2,091,480 N/M Extraordinary Item - loss on extinguishment of debt, net of tax (30,471) --- (30,471) N/M Cumulative effect of accounting change (3,841) --- (3,841) N/M ------------ ------------ ------------ Net Income 2,237,002 179,834 2,057,168 N/M Preferred Dividend Requirement (504) (1,147) 643 N/M ------------ ------------ ------------ Net Income Available to Common $ 2,236,498 $ 178,687 $ 2,057,811 N/M ============ ============ ============ Basic Average Common Shares Outstanding (000s) 59,922 61,436 (1,514) (2.5%) Basic Earnings Per Share Continuing Operations $ 2.42 $ 4.72 $ (2.30) (48.7%) Loss from operations of Aerial --- (1.81) 1.81 N/M Gain on disposal of Aerial 35.47 --- 35.47 N/M Extraordinary Item (0.51) --- (0.51) N/M Cumulative effect of accounting change (0.06) --- (0.06) N/M ------------ ------------ ------------ $ 37.32 $ 2.91 $ 34.41 N/M ============ ============ ============ Diluted Average Common Shares Outstanding (000s) 60,636 62,376 (1,740) (2.8%) Diluted Earnings Per Share Continuing Operations $ 2.39 $ 4.65 $ (2.26) (48.6%) Loss from operations of Aerial --- (1.78) 1.78 N/M Gain on disposal of Aerial 35.06 --- 35.06 N/M Extraordinary Item (0.51) --- (0.51) N/M Cumulative effect of accounting change (0.06) --- (0.06) N/M ------------ ------------ ------------ $ 36.88 $ 2.87 $ 34.01 N/M ============ ============ ============ Diluted EPS Continuing Operations--Excluding Gains (Losses) $ 2.54 $ 1.78 $ 0.76 42.7% Diluted EPS Continuing Operations--Gains (Losses) $(0.15) $ 2.87 $(3.02) N/M N/M - Percentage change not meaningful. 7
TELEPHONE AND DATA SYSTEMS, INC. CONSOLIDATED BALANCE SHEET HIGHLIGHTS (Unaudited, dollars in thousands) ASSETS December 31, December 31, 2000 1999 -------------- -------------- Current Assets Cash and cash equivalents $ 99,019 $ 111,010 Temporary investments 3,616 4,983 Accounts receivable from customers and other 337,485 317,025 Materials and supplies, at average cost, and other current assets 86,980 74,990 -------------- -------------- 527,100 508,008 -------------- -------------- Investments Intangible Assets Cellular license costs, net 1,167,776 1,174,964 Franchise and other costs 203,532 177,677 Marketable equity securities 4,121,904 843,280 Investments in unconsolidated entities 233,710 253,811 Notes Receivable 128,707 10,736 Other investments 13,588 18,102 -------------- -------------- 5,869,217 2,478,570 -------------- -------------- Property, Plant and Equipment, net U.S. Cellular 1,265,347 1,206,467 TDS Telecom 920,678 889,422 -------------- -------------- 2,186,025 2,095,889 -------------- -------------- Other Assets and Deferred Charges 52,267 56,216 -------------- -------------- Net Assets of Discontinued Operations --- 288,793 -------------- -------------- $ 8,634,609 $ 5,427,476 ============== ==============
TELEPHONE AND DATA SYSTEMS, INC. CONSOLIDATED BALANCE SHEET HIGHLIGHTS (Unaudited, dollars in thousands) LIABILITIES AND STOCKHOLDERS' EQUITY December 31, December 31, 2000 1999 -------------- -------------- Current Liabilities Current portion of long-term debt $ 15,639 $ 14,967 Notes payable 499,000 --- Accounts payable 275,901 206,937 Advance billings and customer deposits 61,958 43,965 Accrued interest 24,912 23,492 Accrued taxes 14,732 19,773 Accrued compensation 52,314 35,939 Other current liabilities 36,783 24,599 -------------- -------------- 981,239 369,672 -------------- -------------- Deferred Liabilities and Credits 1,805,379 511,003 -------------- -------------- Long-term Debt, excluding current portion 1,172,987 1,279,877 -------------- -------------- Minority Interest 431,110 509,658 -------------- -------------- Company-Obligated Mandatorily Redeemable Preferred Securities of Subsidiary Trust Holding Solely Company Subordinated Debentures 300,000 300,000 -------------- -------------- Preferred Shares 7,827 9,005 -------------- -------------- Common Stockholders' Equity Common Shares, $.01 par value 555 554 Series A Common Shares, $.01 par value 69 70 Capital in excess of par value 1,816,619 1,897,402 Treasury Shares (383,501) (102,975) Accumulated other comprehensive income (178,344) 179,071 Retained earnings 2,680,669 474,139 -------------- -------------- 3,936,067 2,448,261 -------------- -------------- $ 8,634,609 $ 5,427,476 ============== ==============
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BALANCE SHEET HIGHLIGHTS DECEMBER 31, 2000 (Unaudited, dollars in thousands) U.S. TDS TDS Corporate Intercompany TDS Cellular Telecom & Other Eliminations Consolidated --------------- --------------- --------------- --------------- --------------- Cash and Cash Equivalents $ 69,956 $ 26,801 $ 2,890 $ (628) $ 99,019 Affiliated Cash Investments 54,325 412,342 --- (466,667) --- Temporary Cash Investments 7 3,609 --- --- 3,616 Notes Receivable--Affiliates --- --- 187,273 (187,273) --- --------------- --------------- --------------- --------------- --------------- $ 124,288 $ 442,752 $ 190,163 $ (654,568) $ 102,635 =============== =============== =============== =============== =============== License and Franchise Costs, net $ 1,130,802 $ 240,506 $ --- $ --- $ 1,371,308 Marketable Equity Securities 377,900 107,609 3,636,395 --- 4,121,904 Investment in Unconsolidated Entities 188,859 24,619 20,232 --- 233,710 Notes Receivable 84,566 --- 44,141 --- 128,707 Other Investments --- 13,588 --- --- 13,588 --------------- --------------- --------------- --------------- --------------- $ 1,782,127 $ 386,322 $ 3,700,768 $ --- $ 5,869,217 =============== =============== =============== =============== =============== Property, Plant and Equipment, net $ 1,265,347 $ 920,678 $ --- $ --- $ 2,186,025 =============== =============== =============== =============== =============== Notes Payable: external $ 55,000 $ --- $ 444,000 $ --- $ 499,000 cash management --- --- 467,295 (467,295) --- intercompany --- 187,273 --- (187,273) --- --------------- --------------- --------------- --------------- --------------- $ 55,000 $ 187,273 $ 911,295 $ (654,568) $ 499,000 =============== =============== =============== =============== =============== Long-term Debt: Current Portion $ --- $ 14,987 $ 652 $ --- $ 15,639 Non-current Portion 448,817 282,153 442,017 --- 1,172,987 --------------- --------------- --------------- --------------- --------------- Total $ 448,817 $ 297,140 $ 442,669 $ --- $ 1,188,626 =============== =============== =============== =============== =============== Trust Originated Preferred Securities $ --- $ --- $ 300,000 $ --- $ 300,000 =============== =============== =============== =============== =============== Preferred Shares $ --- $ --- $ 7,827 $ --- $ 7,827 =============== =============== =============== =============== =============== Total Outstanding Debt and Preferred Shares $ 503,817 $ 484,413 $ 1,661,791 $ (654,568) $ 1,995,453 =============== =============== =============== =============== =============== Construction Expenditures: Quarter Ended 12/31/00 $ 98,784 $ 55,486 $ 154,270 Year Ended 12/31/00 $ 305,417 $ 150,602 $ 456,019
9
TDS Telecom Highlights Three Months Ended December 31, (Unaudited, dollars in thousands) Increase (Decrease) --------------------------- 2000 1999 Amount Percent ------------ ------------ ------------ ------------ Local Telephone Operations Operating Revenues Local Service $ 44,115 $ 39,078 $ 5,037 12.9% Network Access and Long-Distance 73,065 69,283 3,782 5.5% Miscellaneous 20,556 18,846 1,710 9.1% ------------ ------------ ------------ 137,736 127,207 10,529 8.3% ------------ ------------ ------------ Operating Expenses Network Operations 24,690 25,150 (460) (1.8%) Customer Operations 22,334 21,844 490 2.2% Corporate Expenses 20,087 20,035 52 0.3% ------------ ------------ ------------ 67,111 67,029 82 0.1% ------------ ------------ ------------ Operating Cash Flow 70,625 60,178 10,447 17.4% ------------ ------------ ------------ Depreciation and Amortization Depreciation 30,126 28,205 1,921 6.8% Amortization 1,785 1,477 308 20.9% ------------ ------------ ------------ 31,911 29,682 2,229 7.5% ------------ ------------ ------------ Operating Income 38,714 30,496 8,218 26.9% ------------ ------------ ------------ USLink Operations Revenues 11,590 9,941 1,649 16.6% Expenses before Depreciation and Amortization 11,095 10,169 926 9.1% ------------ ------------ ------------ Operating Cash Flow 495 (228) 723 N/M Depreciation and Amortization 621 418 203 48.6% ------------ ------------ ------------ Operating (Loss) Income (126) (646) 520 80.5% ------------ ------------ ------------ TDS Metrocom Operations Revenues 11,748 6,491 5,257 81.0% Expenses before Depreciation 15,343 8,165 7,178 87.9% ------------ ------------ ------------ Operating Cash Flow (3,595) (1,674) (1,921) (114.8%) Depreciation 1,980 1,232 748 60.7% ------------ ------------ ------------ Operating (Loss) (5,575) (2,906) (2,669) (91.8%) ------------ ------------ ------------ Intercompany Revenues (1,757) (432) (1,325) N/M Intercompany Expenses (1,757) (432) (1,325) N/M ------------ ------------ ------------ --- --- --- N/M ------------ ------------ ------------ Total TDS Telecom Operating Income $ 33,013 $ 26,944 $ 6,069 22.5% ============ ============ ============ N/M - Percentage change not meaningful.
10
TDS Telecom Highlights Year Ended December 31, (Unaudited, dollars in thousands) Increase (Decrease) --------------------------- 2000 1999 Amount Percent ------------ ------------ ------------ ------------ Local Telephone Operations Operating Revenues Local Service $ 168,775 $ 152,290 $ 16,485 10.8% Network Access and Long-Distance 285,738 269,188 16,550 6.1% Miscellaneous 74,468 71,052 3,416 4.8% ------------ ------------ ------------ 528,981 492,530 36,451 7.4% ------------ ------------ ------------ Operating Expenses Network Operations 100,917 96,488 4,429 4.6% Customer Operations 83,744 81,115 2,629 3.2% Corporate Expenses 77,223 73,391 3,832 5.2% ------------ ------------ ------------ 261,884 250,994 10,890 4.3% ------------ ------------ ------------ Operating Cash Flow 267,097 241,536 25,561 10.6% ------------ ------------ ------------ Depreciation and Amortization Depreciation 117,521 111,479 6,042 5.4% Amortization 6,868 5,964 904 15.2% ------------ ------------ ------------ 124,389 117,443 6,946 5.9% ------------ ------------ ------------ Operating Income 142,708 124,093 18,615 15.0% ------------ ------------ ------------ USLink Operations Revenues 44,548 36,988 7,560 20.4% Expenses before Depreciation and Amortization 42,947 35,383 7,564 21.4% ------------ ------------ ------------ Operating Cash Flow 1,601 1,605 (4) (0.2%) Depreciation and Amortization 2,145 1,378 767 55.7% ------------ ------------ ------------ Operating (Loss) Income (544) 227 (771) N/M ------------ ------------ ------------ TDS Metrocom Operations Revenues 40,172 18,185 21,987 120.9% Expenses before Depreciation 47,672 23,425 24,247 103.5% ------------ ------------ ------------ Operating Cash Flow (7,500) (5,240) (2,260) (43.1%) Depreciation 6,911 4,529 2,382 52.6% ------------ ------------ ------------ Operating (Loss) (14,411) (9,769) (4,642) (47.5%) ------------ ------------ ------------ Intercompany Revenues (3,485) (1,786) (1,699) N/M Intercompany Expenses (3,485) (1,786) (1,699) N/M ------------ ------------ ------------ --- --- --- N/M ------------ ------------ ------------ Total TDS Telecom Operating Income $ 127,753 $ 114,551 $ 13,202 11.5% ============ ============ ============ N/M - Percentage change not meaningful.
11 TABLE A TELEPHONE AND DATA SYSTEMS, INC. FINANCIAL HIGHLIGHTS Restated 2000 for SAB 101, FAS 109 and Roaming Revenue Reclassification (Unaudited, dollars in thousands, except per share amounts) 3 Mos. 3 Mos. 6 Mos. 3 Mos. 9 Mos. Ended Ended Ended Ended Ended Mar. 31 June 30 June 30 Sep. 30 Sep. 30 ------------- ------------------------- -------------------------- Operating Revenues U.S. Cellular $ 394,157 $ 432,995 $ 827,152 $ 451,441 $ 1,278,593 TDS Telecom 144,170 152,659 296,829 154,070 450,899 ------------- ------------------------- -------------------------- 538,327 585,654 1,123,981 605,511 1,729,492 ------------- ------------------------- -------------------------- Operating Expenses Before Depreciation and Amortization U.S. Cellular 267,500 273,925 541,425 292,193 833,618 TDS Telecom 80,588 86,798 167,386 89,840 257,226 ------------- ------------------------- -------------------------- 348,088 360,723 708,811 382,033 1,090,844 ------------- ------------------------- -------------------------- Operating Cash Flow (Operating Income Plus Depreciation and Amortization) U.S. Cellular 126,657 159,070 285,727 159,248 444,975 TDS Telecom 63,582 65,861 129,443 64,230 193,673 ------------- ------------------------- -------------------------- 190,239 224,931 415,170 223,478 638,648 ------------- ------------------------- -------------------------- Depreciation and Amortization U.S. Cellular 66,008 65,125 131,133 66,702 197,835 TDS Telecom 32,720 33,408 66,128 32,805 98,933 ------------- ------------------------- -------------------------- 98,728 98,533 197,261 99,507 296,768 ------------- ------------------------- -------------------------- Operating Income U.S. Cellular 60,649 93,945 154,594 92,546 247,140 TDS Telecom 30,862 32,453 63,315 31,425 94,740 ------------- ------------------------- -------------------------- 91,511 126,398 217,909 123,971 341,880 ------------- ------------------------- -------------------------- Investment and Other Income Interest and Dividend Income 2,470 4,824 7,294 2,511 9,805 Investment Income, Net 1,659 7,551 9,210 6,932 16,142 Gain (Loss) on Cellular and Other Investments 17,851 (50,000) (32,149) 57,743 25,594 Other (Expense), Net (2,411) (24) (2,435) 1,003 (1,432) ------------- ------------------------- -------------------------- 19,569 (37,649) (18,080) 68,189 50,109 ------------- ------------------------- -------------------------- Income Before Interest and Income Taxes 111,080 88,749 199,829 192,160 391,989 Interest Expense 22,829 24,618 47,447 24,698 72,145 Minority Interest in Income of Subsidiary Trust 6,203 6,202 12,405 6,202 18,607 ------------- ------------------------- -------------------------- Income From Continuing Operations Before Income Taxes 82,048 57,929 139,977 161,260 301,237 Income Tax Expense 36,334 24,928 61,262 74,157 135,419 ------------- ------------------------- -------------------------- Income From Continuing Operations Before Minority Interest 45,714 33,001 78,715 87,103 165,818 Minority Share of (Income) (10,189) (12,304) (22,493) (19,902) (42,395) ------------- ------------------------- -------------------------- Income From Continuing Operations 35,525 20,697 56,222 67,201 123,423 Discontinued Operations --- 2,128,434 2,128,434 (2,647) 2,125,787 ------------- ------------------------- -------------------------- Income Before Extraordinary Item and Cumulative Effect of Accounting Change 35,525 2,149,131 2,184,656 64,554 2,249,210 Extraordinary Item - loss on extinguishment of debt, net of tax --- (6,106) (6,106) (18,266) (24,372) Cumulative effect of accounting change (3,841) --- (3,841) --- (3,841) ------------- ------------------------- -------------------------- Net Income 31,684 2,143,025 2,174,709 46,288 2,220,997 Preferred Dividend Requirement (134) (131) (265) (120) (385) ------------- ------------------------- -------------------------- Net Income Available to Common $ 31,550 $ 2,142,894 $ 2,174,444 $ 46,168 $ 2,220,612 ============= ========================= ========================== Basic Average Common Shares Outstanding (000s) 61,078 60,306 60,692 59,537 60,307 Basic Earnings Per Share Continuing Operations $ 0.58 $ 0.34 $ 0.92 $ 1.13 $ 2.04 Discontinued Operations --- 35.29 35.07 (0.04) 35.24 Extraordinary Item --- (0.10) (0.10) (0.31) (0.40) Cumulative effect of accounting change (0.06) --- (0.06) --- (0.06) ------------- ------------------------- -------------------------- $ 0.52 $ 35.53 $ 35.83 $ 0.78 $ 36.82 ============= ========================= ========================== Diluted Average Common Shares Outstanding (000s) 61,837 60,820 61,407 60,331 61,048 Diluted Earnings Per Share Continuing Operations $ 0.57 $ 0.34 $ 0.91 $ 1.11 $ 2.01 Discontinued Operations --- 34.99 34.66 (0.05) 34.82 Extraordinary Item --- (0.10) (0.10) (0.30) (0.40) Cumulative effect of accounting change (0.06) --- (0.06) --- (0.06) ------------- ------------------------- -------------------------- $ 0.51 $ 35.23 $ 35.41 $ 0.76 $ 36.37 ============= ========================= ========================== Diluted EPS Continuing Operations--Excluding Gains (Losses) $ 0.47 $ 0.83 $ 1.30 $ 0.77 $ 2.06 Diluted EPS Continuing Operations--Gains (Losses) $ 0.10 $ (0.49) $ (0.39) $ 0.34 $ (0.05) N/M - Percentage change not meaningful.
TABLE B TELEPHONE AND DATA SYSTEMS, INC. SUMMARY OF RECLASSIFICATIONS AND RESTATEMENTS Restated 2000 for SAB 101, FAS 109 and Roaming Revenue Reclassification (Unaudited, dollars in thousands, except per share amounts) 3 Mos. 3 Mos. 6 Mos. 3 Mos. 9 Mos. Ended Ended Ended Ended Ended Mar. 31 June 30 June 30 Sep. 30 Sep. 30 ------------- --------------------------- -------------------------- Reclassifications and Restatements Operating Revenues - US Cellular Previously Stated $ 360,087 $ 397,657 $ 757,744 $ 414,199 $ 1,171,943 SAB 101 (504) (1,010) (1,514) (1,982) (3,496) Roaming Revenue Reclassification 34,574 36,348 70,922 39,224 110,146 ------------- --------------------------- -------------------------- Restatement $ 394,157 $ 432,995 $ 827,152 $ 451,441 $ 1,278,593 ============= =========================== ========================== Operating Expenses Before Depreciation & Amortization - US Cellular Previously Stated $ 232,926 $ 237,577 $ 470,503 $ 252,969 $ 723,472 Roaming Revenue Reclassification 34,574 36,348 70,922 39,224 110,146 ------------- --------------------------- -------------------------- Restatement $ 267,500 $ 273,925 $ 541,425 $ 292,193 $ 833,618 ============= =========================== ========================== Operating Cash Flow - US Cellular Previously Stated $ 127,161 $ 160,080 $ 287,241 $ 161,230 $ 448,471 SAB 101 (504) (1,010) (1,514) (1,982) (3,496) ------------- --------------------------- -------------------------- Restatement $ 126,657 $ 159,070 $ 285,727 $ 159,248 $ 444,975 ============= =========================== ========================== Operating Income - US Cellular Previously Stated $ 61,153 $ 94,955 $ 156,108 $ 94,528 $ 250,636 SAB 101 (504) (1,010) (1,514) (1,982) (3,496) ------------- --------------------------- -------------------------- Restatement $ 60,649 $ 93,945 $ 154,594 $ 92,546 $ 247,140 ============= =========================== ========================== Minority Share of Income Previously Stated $ (10,245) $ (12,407) $ (22,652) $ (20,103) $ (42,755) SAB 101 56 103 159 201 360 ------------- --------------------------- -------------------------- Restatement $ (10,189) $ (12,304) $ (22,493) $ (19,902) $ (42,395) ============= =========================== ========================== Income Tax Expense Previously Stated $ 32,956 $ 21,768 $ 54,724 $ 68,034 $ 122,758 SAB 101 (203) (420) (623) (842) (1,465) FAS 109 adjustment 3,581 3,580 7,161 6,965 14,126 ------------- --------------------------- -------------------------- Restatement $ 36,334 $ 24,928 $ 61,262 $ 74,157 $ 135,419 ============= =========================== ========================== Discontinued Operations Previously Stated $ --- $ 2,150,082 $ 2,150,082 $ (2,647) $ 2,147,435 FAS 109 adjustment --- (21,648) (21,648) --- (21,648) ------------- --------------------------- -------------------------- Restatement $ --- $ 2,128,434 $ 2,128,434 $ (2,647) $ 2,125,787 ============= =========================== ========================== Extraordinary Item Previously Stated $ --- $ (6,106) $ (6,106) $ (20,460) $ (26,566) FAS 109 adjustment --- --- --- 2,194 2,194 ------------- --------------------------- -------------------------- Restatement $ --- $ (6,106) $ (6,106) $ (18,266) $ (24,372) ============= =========================== ========================== Net Income Previously Stated $ 39,351 $ 2,168,740 $ 2,208,091 $ 51,998 $ 2,260,089 SAB 101 (245) (487) (732) (939) (1,671) FAS 109 adjustment (continuing operations) (3,581) (3,580) (7,161) (6,965) (14,126) FAS 109 adjustment (discontinued operations) --- (21,648) (21,648) --- (21,648) FAS 109 adjustment (extraordinary item) --- --- --- 2,194 2,194 Cumulative Effect (3,841) --- (3,841) --- (3,841) ------------- --------------------------- -------------------------- Restatement $ 31,684 $ 2,143,025 $ 2,174,709 $ 46,288 $ 2,220,997 ============= =========================== ==========================
TABLE C TELEPHONE AND DATA SYSTEMS, INC. FINANCIAL HIGHLIGHTS Restated 1999 for FAS 109 and Roaming Revenues (Unaudited, dollars in thousands, except per share amounts) 3 Mos. 3 Mos. 6 Mos. 3 Mos. 9 Mos. 3 Mos. 12 Mos. Ended Ended Ended Ended Ended Ended Ended Mar. 31 June 30 June 30 Sep. 30 Sep. 30 Dec. 31 Dec. 31 ---------- ---------------------- ---------------------- ---------------------- Operating Revenues U.S. Cellular $ 360,400 $ 399,718 $ 760,118 $ 425,521 $1,185,639 $ 390,790 $1,576,429 TDS Telecom 128,965 136,307 265,272 137,438 402,710 143,207 545,917 ---------- ---------------------- ---------------------- ---------------------- 489,365 536,025 1,025,390 562,959 1,588,349 533,997 2,122,346 ---------- ---------------------- ---------------------- ---------------------- Operating Expenses Before Depreciation and Amortization U.S. Cellular 256,371 270,800 527,171 272,517 799,688 290,927 1,090,615 TDS Telecom 71,454 74,560 146,014 77,071 223,085 84,931 308,016 ---------- ---------------------- ---------------------- ---------------------- 327,825 345,360 673,185 349,588 1,022,773 375,858 1,398,631 ---------- ---------------------- ---------------------- ---------------------- Operating Cash Flow (Operating Income Plus Depreciation and Amortization) U.S. Cellular 104,029 128,918 232,947 153,004 385,951 99,863 485,814 TDS Telecom 57,511 61,747 119,258 60,367 179,625 58,276 237,901 ---------- ---------------------- ---------------------- ---------------------- 161,540 190,665 352,205 213,371 565,576 158,139 723,715 ---------- ---------------------- ---------------------- ---------------------- Depreciation and Amortization U.S. Cellular 51,915 56,466 108,381 57,444 165,825 64,147 229,972 TDS Telecom 30,557 30,531 61,088 30,930 92,018 31,332 123,350 ---------- ---------------------- ---------------------- ---------------------- 82,472 86,997 169,469 88,374 257,843 95,479 353,322 ---------- ---------------------- ---------------------- ---------------------- Operating Income U.S. Cellular 52,114 72,452 124,566 95,560 220,126 35,716 255,842 TDS Telecom 26,954 31,216 58,170 29,437 87,607 26,944 114,551 ---------- ---------------------- ---------------------- ---------------------- 79,068 103,668 182,736 124,997 307,733 62,660 370,393 ---------- ---------------------- ---------------------- ---------------------- Investment and Other Income Interest and Dividend Income 1,702 1,645 3,347 718 4,065 4,643 8,708 Investment Income, Net 6,643 650 7,293 11,585 18,878 (481) 18,397 Gain (Loss) on Cellular and Other Investments 11,551 328,341 339,892 6,046 345,938 --- 345,938 Other (Expense), Net (2,389) (2,154) (4,543) (3,722) (8,265) (2,933) (11,198) ---------- ---------------------- ---------------------- ---------------------- 17,507 328,482 345,989 14,627 360,616 1,229 361,845 ---------- ---------------------- ---------------------- ---------------------- Income Before Interest and Income Taxes 96,575 432,150 528,725 139,624 668,349 63,889 732,238 Interest Expense 25,563 25,677 51,240 25,170 76,410 23,574 99,984 Minority Interest in Income of Subsidiary Trust 6,203 6,202 12,405 6,202 18,607 6,203 24,810 ---------- ---------------------- ---------------------- ---------------------- Income From Continuing Operations Before Income Taxes 64,809 400,271 465,080 108,252 573,332 34,112 607,444 Income Tax Expense 26,912 159,532 186,444 45,296 231,740 19,261 251,001 ---------- ---------------------- ---------------------- ---------------------- Income From Continuing Operations Before Minority Interest 37,897 240,739 278,636 62,956 341,592 14,851 356,443 Minority Share of (Income), net of tax (6,961) (38,794) (45,755) (14,427) (60,182) (4,935) (65,117) ---------- ---------------------- ---------------------- ---------------------- Income From Continuing Operations 30,936 201,945 232,881 48,529 281,410 9,916 291,326 Discontinued Operations (22,220) (33,020) (55,240) (56,252) (111,492) --- (111,492) ---------- ---------------------- ---------------------- ---------------------- Net Income 8,716 168,925 177,641 (7,723) 169,918 9,916 179,834 Preferred Dividend Requirement (350) (337) (687) (316) (1,003) (145) (1,147) ---------- ---------------------- ---------------------- ---------------------- Net Income Available to Common $ 8,366 $ 168,588 $ 176,954 $ (8,039) $ 168,915 $ 9,771 $ 178,687 ========== ====================== ====================== ====================== Basic Average Common Shares Outstanding (000s) 61,279 61,399 61,339 61,451 61,376 61,614 61,436 Basic Earnings Per Share Continuing Operations $ 0.50 $ 3.28 $ 3.79 $ 0.78 $ 4.57 $ 0.16 $ 4.72 Discontinued Operations (0.36) (0.53) (0.91) (0.91) (1.82) --- (1.81) ---------- ---------------------- ---------------------- ---------------------- $ 0.14 $ 2.75 $ 2.88 $(0.13) $ 2.75 $ 0.16 $ 2.91 ========== ====================== ====================== ====================== Diluted Average Common Shares Outstanding (000s) 61,808 62,365 62,253 62,419 62,308 62,294 62,376 Diluted Earnings Per Share Continuing Operations $ 0.50 $ 3.24 $ 3.74 $ 0.77 $ 4.51 $ 0.16 $ 4.65 Discontinued Operations (0.36) (0.53) (0.89) (0.90) (1.79) --- (1.78) ---------- ---------------------- ---------------------- ---------------------- $ 0.14 $ 2.71 $ 2.85 $(0.13) $ 2.72 $ 0.16 $ 2.87 ========== ====================== ====================== ====================== Diluted EPS Continuing Operations --Excluding Gains (Losses) $ 0.39 $ 0.50 $ 0.88 $ 0.74 $ 1.63 $ 0.16 $ 1.78 --Gains (Losses) $ 0.11 $ 2.74 $ 2.86 $ 0.03 $ 2.88 $ --- $ 2.87 N/M - Percentage change not meaningful.
TABLE D TELEPHONE AND DATA SYSTEMS, INC. SUMMARY OF RECLASSIFICATIONS AND RESTATEMENTS Restated 1999 for FAS 109 and Roaming Revenues (Unaudited, dollars in thousands, except per share amounts) 3 Mos. 3 Mos. 6 Mos. 3 Mos. 9 Mos. 3 Mos. 12 Mos. Ended Ended Ended Ended Ended Ended Ended Mar. 31 June 30 June 30 Sep. 30 Sep. 30 Dec. 31 Dec. 31 ---------- --------------------- ---------------------- ---------------------- Reclassifications and Restatements Operating Revenues - US Cellular Previously Stated $ 325,985 $ 360,952 $ 686,937 $ 373,201 $1,060,138 $ 357,043 $1,417,181 Roaming Revenue 34,415 38,766 73,181 52,320 125,501 33,747 159,248 ---------- --------------------- ---------------------- ---------------------- Reclassification $ 360,400 $ 399,718 $ 760,118 $ 425,521 $1,185,639 $ 390,790 $1,576,429 ========== ===================== ====================== ====================== Operating Expenses Before Depreciation & Amortization - US Cellular Previously Stated $ 221,956 $ 232,034 $ 453,990 $ 220,197 $ 674,187 $ 257,180 $ 931,367 Roaming Revenue 34,415 38,766 73,181 52,320 125,501 33,747 159,248 ---------- --------------------- ---------------------- ---------------------- Reclassification $ 256,371 $ 270,800 $ 527,171 $ 272,517 $ 799,688 $ 290,927 $1,090,615 ========== ===================== ====================== ====================== Income Tax Expense Previously Stated $ 24,814 $ 144,772 $ 169,586 $ 40,889 $ 210,475 $ 17,701 $ 228,176 FAS 109 adjustment 2,098 14,760 16,858 4,407 21,265 1,560 22,825 ---------- --------------------- ---------------------- ---------------------- Restatement $ 26,912 $ 159,532 $ 186,444 $ 45,296 $ 231,740 $ 19,261 $ 251,001 ========== ===================== ====================== ====================== Discontinued Operations Previously Stated $ (22,634) $ (34,162) $ (56,796) $ (27,394) $ (84,190) $ --- $ (84,190) FAS 109 adjustment 414 1,142 1,556 (28,858) (27,302) --- (27,302) ---------- --------------------- ---------------------- ---------------------- Restatement $ (22,220) $ (33,020) $ (55,240) $ (56,252) $ (111,492) $ --- $ (111,492) ========== ===================== ====================== ====================== Net Income Previously Stated $ 10,400 $ 182,543 $ 192,943 $ 25,542 $ 218,485 $ 11,476 $ 229,961 FAS 109 adjustment (continuing operations) (2,098) (14,760) (16,858) (4,407) (21,265) (1,560) (22,825) FAS 109 adjustment (discontinued operations) 414 1,142 1,556 (28,858) (27,302) --- (27,302) ---------- --------------------- ---------------------- ---------------------- Restatement $ 8,716 $ 168,925 $ 177,641 $ (7,723) $ 169,918 $ 9,916 $ 179,834 ========== ===================== ====================== ======================
TABLE E TELEPHONE AND DATA SYSTEMS, INC. FINANCIAL HIGHLIGHTS Restated 1998-1993 for FAS 109 and Roaming Reclassification (Unaudited, dollars in thousands, except per share amounts) 1998 1997 1996 1995 1994 1993 ------------------------------------------------------------------------ Operating Revenues U.S. Cellular $1,315,535 $ 993,124 $ 779,676 $ 552,795 $ 375,472 $ 243,293 TDS Telecom 488,104 437,624 395,059 354,841 306,341 268,122 ------------------------------------------------------------------------ 1,803,639 1,430,748 1,174,735 907,636 681,813 511,415 ------------------------------------------------------------------------ Operating Expenses Before Depreciation and Amortization U.S. Cellular 932,681 731,202 583,471 420,582 292,633 206,922 TDS Telecom 282,290 239,460 204,064 179,246 145,857 129,450 ------------------------------------------------------------------------ 1,214,971 970,662 787,535 599,828 438,490 336,372 ------------------------------------------------------------------------ Operating Cash Flow (Operating Income Plus Depreciation and Amortization) U.S. Cellular 382,854 261,922 196,205 132,213 82,839 36,371 TDS Telecom 205,814 198,164 190,995 175,595 160,484 138,672 ------------------------------------------------------------------------ 588,668 460,086 387,200 307,808 243,323 175,043 ------------------------------------------------------------------------ Depreciation and Amortization U.S. Cellular 206,779 132,379 108,839 89,458 65,454 45,027 TDS Telecom 111,402 98,021 88,346 77,355 68,878 59,562 ------------------------------------------------------------------------ 318,181 230,400 197,185 166,813 134,332 104,589 ------------------------------------------------------------------------ Operating Income from Ongoing Operations U.S. Cellular 176,075 129,543 87,366 42,755 17,385 (8,656) TDS Telecom 94,412 100,143 102,649 98,240 91,606 79,110 ------------------------------------------------------------------------ 270,487 229,686 190,015 140,995 108,991 70,454 ------------------------------------------------------------------------ American Paging Operating (Loss) (11,406) (35,307) (36,626) (8,997) (169) (721) ------------------------------------------------------------------------ ------------------------------------------------------------------------ Total Operating Income 259,081 194,379 153,389 131,998 108,822 69,733 ------------------------------------------------------------------------ Investment and Other Income Interest and Dividend Income 10,070 11,526 14,418 12,975 10,610 8,082 Investment Income, Net 29,379 76,811 53,881 39,228 26,821 16,358 Gain (Loss) on Cellular and Other Investments 262,698 41,438 136,152 86,625 7,457 4,970 Other (Expense), Net (35,435) (8,749) 911 (3,311) (1,284) (809) ------------------------------------------------------------------------ 266,712 121,026 205,362 135,517 43,604 28,601 ------------------------------------------------------------------------ Income Before Interest and Income Taxes 525,793 315,405 358,751 267,515 152,426 98,334 Interest Expense 108,371 92,010 65,343 62,850 41,251 37,466 Minority Interest in Income of Subsidiary Trust 23,504 1,523 --- --- --- --- ------------------------------------------------------------------------ Income From Continuing Operations Before Income Taxes 393,918 221,872 293,408 204,665 111,175 60,868 Income Tax Expense 161,235 95,819 131,116 86,796 41,808 20,674 ------------------------------------------------------------------------ Income From Continuing Operations Before Minority Interest 232,683 126,053 162,292 117,869 69,367 40,194 Minority Share of (Income) (47,461) (34,722) (31,260) (25,896) (9,111) (475) ------------------------------------------------------------------------ Income From Continuing Operations 185,222 91,331 131,032 91,973 60,256 39,719 Discontinued Operations (106,965) (92,320) (8,515) 5,495 (525) --- ------------------------------------------------------------------------ Income Before Cumulative Effect of Accounting Change 78,257 (989) 122,517 97,468 59,731 39,719 Cumulative effect of accounting change --- --- --- --- (723) --- ------------------------------------------------------------------------ Net Income 78,257 (989) 122,517 97,468 59,008 39,719 Preferred Dividend Requirement (1,651) (1,892) (1,957) (2,509) (2,459) (2,386) ------------------------------------------------------------------------ Net Income Available to Common $ 76,606 $ (2,881) $ 120,560 $ 94,959 $ 56,549 $ 37,333 ======================================================================== Basic Average Common Shares Outstanding (000s) 60,982 60,211 60,464 57,456 53,295 46,995 Basic Earnings Per Share Continuing Operations $ 3.01 $ 1.49 $ 2.13 $ 1.56 $ 1.08 $ 0.79 Loss from operations of Aerial (1.75) (1.54) (0.14) 0.09 (0.01) --- Cumulative effect of accounting change --- --- --- --- (0.01) --- ------------------------------------------------------------------------ $ 1.26 $(0.05) $ 1.99 $ 1.65 $ 1.06 $ 0.79 ======================================================================== Diluted Average Common Shares Outstanding (000s) 61,937 60,837 61,201 58,681 54,468 47,315 Diluted Earnings Per Share Continuing Operations $ 2.99 $ 1.48 $ 2.12 $ 1.54 $ 1.07 $ 0.79 Loss from operations of Aerial (1.73) (1.52) (0.14) 0.09 (0.01) --- Cumulative effect of accounting change --- --- --- --- (0.01) --- ------------------------------------------------------------------------ $ 1.26 $(0.04) $ 1.98 $ 1.63 $ 1.05 $ 0.79 ======================================================================== Diluted EPS Continuing Operations--Excluding Gains (Losses) $ 0.97 $ 1.24 $ 1.17 $ 0.92 $ 0.97 $ 0.75 Diluted EPS Continuing Operations--Gains (Losses) $ 2.02 $ 0.24 $ 0.95 $ 0.62 $ 0.10 $ 0.04 N/M - Percentage change not meaningful.
TABLE F TELEPHONE AND DATA SYSTEMS, INC. SUMMARY OF RECLASSIFICATIONS AND RESTATEMENTS Restated 1998-1993 for FAS 109 and Roaming Reclassification (Unaudited, dollars in thousands, except per share amounts) 1998 1997 1996 1995 1994 1993 ------------------------------------------------------------------------ Roaming Reclassification Operating Revenues - US Cellular Previously Stated $1,162,467 $ 876,965 $ 680,068 $ 480,316 $ 327,630 $ 210,344 Roaming Revenue 153,068 116,159 99,608 72,479 47,842 32,949 ------------------------------------------------------------------------ Restatement $1,315,535 $ 993,124 $ 779,676 $ 552,795 $ 375,472 $ 243,293 ======================================================================== Operating Expenses Before Depreciation & Amortization - US Cellular Previously Stated 779,613 615,043 483,863 348,103 244,791 173,973 Roaming Revenue 153,068 116,159 99,608 72,479 47,842 32,949 ------------------------------------------------------------------------ Reclassification $ 932,681 $ 731,202 $ 583,471 $ 420,582 $ 292,633 $ 206,922 ======================================================================== Operating Cash Flow (Operating Income Plus Depreciation and Amortization) Previously Stated $ 382,854 $ 261,922 $ 196,205 $ 132,213 $ 82,839 $ 36,371 Roaming Revenue --- --- --- --- --- --- ------------------------------------------------------------------------ Reclassification $ 382,854 $ 261,922 $ 196,205 $ 132,213 $ 82,839 $ 36,371 ========================================================================
TABLE G TELEPHONE AND DATA SYSTEMS, INC. SUMMARY OF RECLASSIFICATIONS AND RESTATEMENTS Restated 1998-1993 for FAS 109 and Roaming Reclassification (Unaudited, dollars in thousands, except per share amounts) 1998 1997 1996 1995 1994 1993 ------------------------------------------------------------------------ Restatements Income From Continuing Operations Before Income Taxes Previously Stated $ 346,457 $ 187,150 $ 262,148 $ 178,769 $ 102,064 $ 60,393 Reclass of Minority Share of Income to a separate line below Income from Continuing Operations Before Minority Interest 47,461 34,722 31,260 25,896 9,111 475 ------------------------------------------------------------------------ Restatement $ 393,918 $ 221,872 $ 293,408 $ 204,665 $ 111,175 $ 60,868 ======================================================================== Income Tax Expense Previously Stated $ 145,058 $ 87,405 $ 123,544 $ 80,286 $ 40,995 $ 26,497 FAS 109 adjustment 16,177 8,414 7,572 6,510 813 (5,823) ------------------------------------------------------------------------ Restatement $ 161,235 $ 95,819 $ 131,116 $ 86,796 $ 41,808 $ 20,674 ======================================================================== Income From Continuing Operations Before Minority Interest Previously Stated $ 201,399 $ 99,745 $ 138,604 $ 98,483 $ 61,069 $ 33,896 Reclass of Minority Share of Income to a separate line below Income from Continuing Operations Before Minority Interest 47,461 34,722 31,260 25,896 9,111 475 FAS 109 adjustment (16,177) (8,414) (7,572) (6,510) (813) 5,823 ------------------------------------------------------------------------ Restatement $ 232,683 $ 126,053 $ 162,292 $ 117,869 $ 69,367 $ 40,194 ======================================================================== Minority Share of (Income) Previously Stated $ --- $ --- $ --- $ --- $ --- $ --- Reclass of Minority Share of Income to a separate line below Income from Continuing Operations Before Minority Interest (47,461) (34,722) (31,260) (25,896) (9,111) (475) ------------------------------------------------------------------------ Restatement $ (47,461) $ (34,722) $ (31,260) $ (25,896) $ (9,111) $ (475) ======================================================================== Income From Continuing Operations Previously Stated $ 201,399 $ 99,745 $ 138,604 $ 98,483 $ 61,069 $ 33,896 FAS 109 adjustment (16,177) (8,414) (7,572) (6,510) (813) 5,823 ------------------------------------------------------------------------ Restatement $ 185,222 $ 91,331 $ 131,032 $ 91,973 $ 60,256 $ 39,719 ======================================================================== Discontinued Operations Previously Stated $(136,991) $(109,294) $ (10,465) $ 5,495 $ (525) $ --- FAS 109 adjustment 30,026 16,974 1,950 --- --- --- ------------------------------------------------------------------------ Restatement $(106,965) $ (92,320) $ (8,515) $ 5,495 $ (525) $ --- ======================================================================== Net Income Previously Stated $ 64,408 $ (9,549) $ 128,139 $ 103,978 $ 59,821 $ 33,896 FAS 109 adjustment (continuing operations) (16,177) (8,414) (7,572) (6,510) (813) 5,823 FAS 109 adjustment (discontinued operations) 30,026 16,974 1,950 --- --- --- ------------------------------------------------------------------------ Restatement $ 78,257 $ (989) $ 122,517 $ 97,468 $ 59,008 $ 39,719 ========================================================================
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