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): April 28, 2004

TELEPHONE AND DATA SYSTEMS, INC.
(Exact name of registrant as specified in its charter)

Delaware
(State or other
jurisdiction of
incorporation) 001-14157
(Commission
File Number) 36-2669023
(IRS Employer
Identification No.)

     30 North LaSalle Street, Suite 4000, Chicago, Illinois     
         (Address of principal executive offices)    60602   
(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 7. Exhibits.

(c)       Exhibits:

        In accordance with the provisions of Item 601 of Regulation S-K, any Exhibits filed herewith are set forth on the Exhibit Index attached hereto.

Item 12. Disclosure of Results of Operations and Financial Condition

        On April 28, 2004, Telephone and Data Systems, Inc. issued a news release announcing its earnings for the first quarter of 2004. A copy of the news release is attached hereto as Exhibit 99.1.

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: April 28, 2004

By:	/s/ D. Michael Jack
	D. Michael Jack
	Senior Vice President and Corporate Controller (Principal Accounting Officer)

3

EXHIBIT INDEX

The following exhibits are filed herewith as noted below.

Exhibit Number	Description of Exhibit
99.1	Telephone and Data Systems, Inc.'s news release, dated April 28, 2004, announcing earnings for the first quarter of 2004.

4

EX-99

Exhibit 99.1

As previously announced, TDS and its subsidiaries will hold a joint teleconference April 28, 2004 at 9:00 a.m. Chicago time. Interested parties may listen to the call live over the Internet by accessing the conference call page of the Investor Relations section in www.teldta.com.

Contact:	Mark A. Steinkrauss, Vice President, Corporate Relations
	(312) 592-5384 mark.steinkrauss@teldta.com
	Ruth E. Venning, Director, Corporate Relations
	(312) 592-5327 ruth.venning@teldta.com
	Julie D. Mathews, Manager, Investor Relations
	(312) 592-5341 julie.mathews@teldta.com

FOR RELEASE: IMMEDIATE

TDS REPORTS SOLID FIRST QUARTER RESULTS

April 28, 2004 — Chicago, Illinois – Telephone and Data Systems, Inc. [AMEX:TDS] reported operating revenues of $870.5 million for the first quarter of 2004, up 7% from $815.3 million in the comparable period a year ago, as restated. Operating income was $73.2 million in the first quarter compared to $35.7 million in the first quarter of 2003, as restated. Net income available to common and diluted earnings per share for the quarter were $19.6 million and $0.34 respectively, compared to net loss available to common and diluted loss per share of $15.9 million and $0.27 respectively, in the first quarter of 2003, as restated. In the first quarter of 2003, TDS recorded a pre-tax loss of $21.6 million ($13.6 million net of income taxes of $5 million and minority interest of $3 million), as restated, related to the difference between the fair value and book value of U.S. Cellular’s Florida and Georgia assets that were exchanged with AT&T Wireless. Also, the company recorded the cumulative effect of an accounting change, net of tax, related to the implementation of Statement of Financial Accounting Standards (SFAS) 143, “Accounting for Asset Retirement Obligations,” which reduced net income by $11.8 million.

President’s Comments
“We had an excellent start to the year with good performance from our business units. The team at U.S. Cellular, our wireless operation, started off the year with very strong results. Net customer additions from distribution channels totaled 196,000, and service revenues increased 10% during the quarter. Postpay churn was an impressive 1.3%, the lowest in the company’s history since we started tracking the number and among the very best in the industry,” said LeRoy T. Carlson, Jr., president and chief executive officer.

“At TDS Telecom, our wireline operation, total equivalent access lines in our ILEC and CLEC wireline operations increased 83,500 lines, or 8% year to year, and grew by 14,200 lines, or 1.3% from the previous quarter. Additionally, TDS Telecom recorded improved profitability in both its ILEC and CLEC businesses during the quarter.

“Our ILEC and CLEC DSL customers now total 50,000 with excellent prospects for continued growth during the year. We also continue to see strong growth in the number of ILEC long-distance lines, which now total 266,000.

“Our businesses recorded strong results in the quarter and we look forward to continued progress during the remainder of the year,” concluded Carlson.

Other Matters
During the first quarter, TDS repurchased 40,300 shares of stock at an average price of $69.82 for $2.8 million.

The tax rate in the first quarter was 46.4%. This includes a tax expense of $2.5 million related to sale of the South Texas markets to AT&T Wireless.

As previously announced, TDS and its subsidiaries will hold a joint teleconference on April 28, 2004, at 9:00 a.m. Chicago time. Interested parties may listen to the call live over the Internet at: http://www.firstcallevents.com/service/ajwz405201898gf12.html or connect by telephone at 888/245-6674 with a pass code of 6960621. The conference call will be archived on the conference call section of our web site at www.teldta.com. Certain financial and statistical information contained in the conference call presentation will be posted to the web site, together with reconciliations to generally accepted accounting principles (GAAP) of any non-GAAP information to be disclosed, prior to the commencement of the call. Investors may access this additional information on the conference call page of the Investor Relations section of the TDS web site.

TDS, a FORTUNE 500 company, is a diversified telecommunications corporation founded in 1969. Through its strategic business units, U.S. Cellular and TDS Telecom, TDS operates primarily by providing wireless and local telephone service. TDS builds value for its shareholders by providing excellent communications services in growing, closely related segments of the telecommunications industry. As of March 31, 2004, the company employed 10,700 people and served 5.6 million customers/units in 36 states.

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 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 circumstances or events that may affect the ability of USM to start up the operations of the licensed areas involved in the AT&T Wireless transaction completed in August 2003; the ability of U.S. Cellular to successfully manage and grow the operations of the Chicago MTA; changes in the overall economy; changes in competition in the markets in which TDS and U.S. Cellular operate; advances in telecommunications technology; changes brought about by the implementation of local number portability; changes in the telecommunications regulatory environment; changes in the value of investments, including variable prepaid forward contracts; changes in the capital markets that could adversely impact the availability, cost and terms of financing; an adverse change in the ratings afforded TDS and U.S. Cellular debt securities by nationally accredited ratings organizations; pending and future litigation; acquisitions/divestitures of properties and/or licenses; changes in customer growth rates, average service revenue per unit, churn rates, roaming rates and the mix of products and services offered in TDS and U.S. Cellular markets. Investors are encouraged to consider these and other risks and uncertainties that are discussed in documents filed by TDS with the Securities and Exchange Commission.

2

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	TDS Metrocom http://www.tdsmetro.com

3

TELEPHONE AND DATA SYSTEMS, INC.
SUMMARY OPERATING DATA

Quarter Ended		3/31/2004			12/31/2003			9/30/2003			6/30/2003			3/31/2003
U.S. Cellular:
Consolidated Markets:
Total population (000s) (1)		45,581			46,267			45,817			41,288			41,288
Customer units		4,547,000			4,409,000			4,268,000			4,343,000			4,240,000
Net customer unit activations		196,000			141,000			66,000			103,000			137,000
Market penetration (1)		9.98	%		9.53	%		9.32	%		10.52	%		10.27	%
Cell sites in service		4,122			4,184			4,082			4,106			3,987
Average monthly revenue per unit (2)	$	46.16		$	47.80		$	49.05		$	47.38		$	45.05
Retail service revenue per unit (2)	$	40.26		$	40.64		$	40.68		$	39.69		$	37.68
Inbound roaming revenue per unit (2)	$	3.17		$	3.90		$	4.65		$	4.41		$	4.36
Long-distance/other revenue per unit (2)	$	2.73		$	3.26		$	3.72		$	3.28		$	3.01
Minutes of use (MOU) (3)		491			462			435			424			377
Postpay churn rate per month(4)		1.3	%		1.4	%		1.6	%		1.5	%		1.6	%
Marketing cost per gross
customer unit addition (5)	$	371		$	384		$	405		$	378		$	358
Construction Expenditures (000s)	$	100,535		$	193,413		$	135,111		$	163,076		$	140,926

(1) Market penetration is calculated using 2003 Claritas population estimates for 3/31/04 and 2002 Claritas estimates for 2003. "Total population" represents the total population of each of U.S. Cellular's consolidated markets, regardless of whether the market has begun marketing operations. The 3/31/04 total population counts include the population of the market added to consolidated operations as of 1/1/04, but exclude the population of the six markets sold to AT&T Wireless in February 2004. The 12/31/03 and 9/30/03 total population counts exclude the population of the 10 markets transferred to AT&T Wireless in August 2003 and include the population of markets acquired from AT&T Wireless in that transaction. The population of markets in which U.S. Cellular has deferred the transfer of licenses from AT&T Wireless are not included in the total population counts for any period.

(2) Per unit revenue measurements are derived from Service Revenues as reported in Financial Highlights for each respective quarter as follows:

Service Revenues per Financial Highlights	$	619,382	$	620,639	$	628,440	$	610,109	$	564,601
Components:
Retail service revenue during quarter	$	540,228	$	527,626	$	521,247	$	511,106	$	472,308
Inbound roaming revenue during quarter	$	42,499	$	50,653	$	59,638	$	56,840	$	54,606
Long-distance/other revenue during quarter	$	36,655	$	42,360	$	47,555	$	42,163	$	37,687
Divided by average customers during quarter (000s)		4,473		4,328		4,271		4,292		4,178
Divided by three months in each quarter		3		3		3		3		3
Retail service revenue per unit	$	40.26	$	40.64	$	40.68	$	39.69	$	37.68
Inbound roaming revenue per unit	$	3.17	$	3.90	$	4.65	$	4.41	$	4.36
Long-distance/other revenue per unit	$	2.73	$	3.26	$	3.72	$	3.28	$	3.01
Average monthly revenue per unit	$	46.16	$	47.80	$	49.05	$	47.38	$	45.05

(3) Average monthly local minutes of use per customer (without roaming).

(4) Postpay churn rate per month is calculated by dividing the average monthly postpay customer disconnects during the quarter by the average postpay customer base for the quarter.

(5) Due to changes in accounting for agent rebates and net customer retention expenses, for all periods shown this measurement is no longer calculable using information from the financial statements as reported. The details of this calculation and a reconciliation to line items reported in Financial Highlights for each respective quarter are shown on U.S. Cellular's web site, along with additional information related to U.S. Cellular's first quarter results, at www.uscellular.com.

4

TELEPHONE AND DATA SYSTEMS, INC.
SUMMARY OPERATING DATA

Quarter Ended		3/31/2004			12/31/2003			9/30/2003			6/30/2003			3/31/2003
TDS Telecom
ILEC:
Access line equivalents (1)		722,400			722,200			721,600			718,800			713,800
Growth in equivalent ILEC access lines
from prior quarter-end:
Internal growth		200			600			2,800			5,000			2,600
Access lines		660,900			663,800			668,200			669,600			669,900
Internet service accounts		113,600			112,900			115,600			116,700			118,100
Digital Subscriber Lines (DSL) customers		27,300			23,600			19,300			16,200			12,800
Long Distance customers (3)		266,300			230,500			218,600			211,900			202,100
Caller I.D. penetration (2)		33.8	%		33.1	%		32.4	%		31.8	%		31.3	%
Voicemail penetration (2)		13.3	%		13.3	%		13.4	%		13.3	%		13.2	%
Construction Expenditures (000s)	$	17,616		$	35,217		$	32,007		$	29,288		$	15,412
CLEC:
Access line equivalents		378,800			364,800			346,500			323,600			303,900
Internet service accounts		21,600			22,200			23,600			23,900			24,500
Percent of access lines on-switch		84.5	%		83.5	%		82.2	%		80.7	%		80.1	%
Digital Subscriber Lines (DSL)		22,700			20,100			17,600			14,100			13,100
Construction Expenditures (000s)	$	6,456		$	10,086		$	7,999		$	5,504		$	3,705

(1) Access line equivalents are derived by converting high capacity data lines to the estimated capacity of one switched access line.

(2) Caller I.D. and Voicemail penetration is the total residential and business one-party customers purchasing the service divided by the total of these lines equipped for the service.

(3) Beginning January 1, 2004, the long distance customers reflect those lines that have chosen TDS Telecom as their primary interexchange carrier. Prior to that, a count of customers was used.

5

TELEPHONE AND DATA SYSTEMS, INC.
FINANCIAL HIGHLIGHTS
Three Months Ended March 31,
(Unaudited, dollars in thousands, except per share amounts)

							Increase (Decrease)
				2003
	2004			Restated			Amount			Percent
Operating Revenues
U.S. Cellular	$	657,650		$	603,774		$	53,876			8.9%
TDS Telecom		212,862			211,504			1,358			0.6%
		870,512			815,278			55,234			6.8%
Operating Expenses
U.S. Cellular
Expenses excluding Depreciation, Amortization           and Accretion		515,617			476,960			38,657			8.1%
Depreciation, Amortization and Accretion		113,894			109,577			4,317			3.9%
Loss (Adjustment) on Assets Held for Sale		(143	)		21,561			(21,704	)		N/M
		629,368			608,098			21,270			3.5%
TDS Telecom
Expenses excluding Depreciation and Amortization		126,419			129,799			(3,380	)		(2.6%	)
Depreciation and Amortization		41,558			41,650			(92	)		(0.2%	)
		167,977			171,449			(3,472	)		(2.0%	)
Total Operating Expenses		797,345			779,547			17,798			2.3%
Operating Income
U.S. Cellular		28,282			(4,324	)		32,606			N/M
TDS Telecom		44,885			40,055			4,830			12.1%
		73,167			35,731			37,436			N/M
Other Income (Expense)
Interest and Dividend Income		2,896			4,328			(1,432	)		(33.1%	)
Investment Income		14,630			12,750			1,880			14.7%
(Loss) on Investments		—			(3,500	)		3,500			N/M
Interest (Expense)		(46,821	)		(43,357	)		(3,464	)		(8.0%	)
Minority Interest in Income of Subsidiary Trust		—			(6,203	)		6,203			N/M
Other Income (Expense), Net		(527	)		1,159			(1,686	)		N/M
		(29,822	)		(34,823	)		5,001			14.4%
Income Before Income Taxes		43,345			908			42,437			N/M
Income Tax Expense		20,105			4,585			15,520			N/M
Income Before Minority Interest		23,240			(3,677	)		26,917			N/M
Minority Share of (Income), net of tax		(3,508	)		(368	)		(3,140	)		N/M
Income (Loss) Before Cumulative Effect of    Accounting Change		19,732			(4,045	)		23,777			N/M
Cumulative Effect of Accounting Change		—			(11,789	)		11,789			N/M
Net Income (Loss)		19,732			(15,834	)		35,566			N/M
Preferred Dividend Requirement		(104	)		(104	)		—			N/M
Net Income (Loss) Available to Common	$	19,628		$	(15,938	)	$	35,566			N/M
Basic Average Common Shares Outstanding (000s)		57,168			58,594			(1,426	)		(2.4%	)
Basic Earnings (Loss) Per Share
Income (Loss) Before Cumulative Effect of         Accounting Change	$	0.34		$	(0.07	)	$	0.41			N/M
Cumulative Effect of Accounting Change		—			(0.20	)		0.20			N/M
	$	0.34		$	(0.27	)	$	0.61			N/M
Diluted Average Common Shares Outstanding (000s)		57,424			58,594			(1,170	)		(2.0%	)
Diluted Earnings (Loss) Per Share
Income (Loss) Before Cumulative Effect of         Accounting Change	$	0.34		$	(0.07	)	$	0.41			N/M
Cumulative Effect of Accounting Change		—			(0.20	)		0.20			N/M
	$	0.34		$	(0.27	)	$	0.61			N/M

N/M - Percentage change not meaningful

6

TELEPHONE AND DATA SYSTEMS, INC.
CONSOLIDATED BALANCE SHEET HIGHLIGHTS
(Unaudited, dollars in thousands)

ASSETS

	March 31, 2004		December 31, 2003 Restated
Current Assets
Cash and cash equivalents	$	1,054,520	$	937,651
Accounts receivable from customers and other		396,029		409,671
Materials and supplies, at average cost, and other current assets		150,298		157,624
		1,600,847		1,504,946
Investments
Wireless license costs, net		1,196,774		1,193,798
Wireless license rights		42,037		42,037
Goodwill, net		890,931		887,937
Intangible Assets		34,287		24,448
Marketable equity securities		2,721,985		2,772,410
Investments in unconsolidated entities		218,816		214,885
Notes Receivable		5,400		6,476
Other investments		17,168		15,439
		5,127,398		5,157,430
Property, Plant and Equipment, net
U.S. Cellular		2,263,910		2,271,254
TDS Telecom		1,064,219		1,079,732
		3,328,129		3,350,986
Other Assets and Deferred Charges		85,696		83,925
Assets Held for Sale		—		100,523
	$	10,142,070	$	10,197,810

7a

TELEPHONE AND DATA SYSTEMS, INC.
CONSOLIDATED BALANCE SHEET HIGHLIGHTS
(Unaudited, dollars in thousands)

LIABILITIES AND STOCKHOLDERS' EQUITY

	March 31, 2004			December 31, 2003 Restated
Current Liabilities
Current portion of long-term debt	$	23,712		$	23,712
Notes payable		85,000			—
Accounts payable		278,692			361,010
Advance billings and customer deposits		115,976			108,372
Accrued interest		29,922			31,884
Accrued taxes		52,187			44,889
Accrued compensation		39,676			69,290
Other current liabilities		50,076			57,788
		675,241			696,945
Deferred Liabilities and Credits
Deferred taxes		1,321,845			1,286,790
Derivative Liability		613,216			712,252
Asset Retirement Obligation		125,597			124,501
Other		121,036			119,076
		2,181,694			2,242,619
Long-term Debt, excluding current portion
Prepaid Forward Contracts		1,676,914			1,672,762
Other Long-term Debt		1,992,396			1,994,913
		3,669,310			3,667,675
Minority Interest		481,665			503,186
Liabilities Related to Assets Held for Sale		—			2,427
Preferred Shares		3,864			3,864
Common Stockholders' Equity
Common Shares, $.01 par value		563			563
Series A Common Shares, $.01 par value		64			64
Capital in excess of par value		1,835,588			1,843,468
Treasury Shares		(475,836	)		(493,714	)
Accumulated other comprehensive income		325,795			296,820
Retained earnings		1,444,122			1,433,893
		3,130,296			3,081,094
	$	10,142,070		$	10,197,810

7b

BALANCE SHEET HIGHLIGHTS
March 31, 2004
(Unaudited, dollars in thousands)

	U.S. Cellular		TDS Telecom		TDS Corporate & Other		Intercompany Eliminations			TDS Consolidated
Cash and Cash Equivalents	$	35,005	$	339,732	$	679,783	$	—		$	1,054,520
Affiliated Cash Investments		30		449,197		—		(449,227	)		—
Notes Receivable--Affiliates		—		—		381,340		(381,340	)		—
	$	35,035	$	788,929	$	1,061,123	$	(830,567	)	$	1,054,520
Cellular License, Goodwill and Intangibles, net	$	1,706,348	$	457,681	$	—	$	—		$	2,164,029
Marketable Equity Securities		248,403		68,095		2,405,487		—			2,721,985
Investment in Unconsolidated Entities		174,297		19,780		33,657		(8,918	)		218,816
Notes Receivable		5,400		—		—		—			5,400
Long-term Notes Receivable - Affiliates		—		—		400		(400	)		—
Other Investments		—		15,167		2,001		—			17,168
	$	2,134,448	$	560,723	$	2,441,545	$	(9,318	)	$	5,127,398
Property, Plant and
Equipment, net	$	2,263,910	$	1,064,219	$	—	$	—		$	3,328,129
Notes Payable: external	$	85,000	$	—	$	—	$	—		$	85,000
cash management		—		—		449,227		(449,227	)		—
intercompany		—		381,340		—		(381,340	)		—
	$	85,000	$	381,340	$	449,227	$	(830,567	)	$	85,000
Prepaid Forward Contracts	$	159,856	$	41,182	$	1,475,876	$	—		$	1,676,914
Long-term Debt:
Current Portion	$	3,000	$	18,474	$	2,238	$	—		$	23,712
Affiliated		—		400		—		(400	)		—
Non-current Portion		986,908		240,912		764,576		—			1,992,396
Total	$	989,908	$	259,786	$	766,814	$	(400	)	$	2,016,108
Preferred Shares	$	—	$	—	$	3,864	$	—		$	3,864
Construction Expenditures:
Quarter Ended 3/31/04	$	100,535	$	24,072	$	1,019				$	125,626

8

TDS Telecom Highlights
Three Months Ended March 31
(Unaudited, dollars in thousands)

							Increase (Decrease)
	2004			2003			Amount			Percent
Local Telephone Operations
Operating Revenues
Local Service	$	50,427		$	49,051		$	1,376			2.8%
Network Access and Long-Distance		88,187			89,652			(1,465	)		(1.6%	)
Miscellaneous		20,505			20,894			(389	)		(1.9%	)
		159,119			159,597			(478	)		(0.3%	)
Operating Expenses
Network Operations		34,517			38,145			(3,628	)		(9.5%	)
Customer Operations		23,180			22,170			1,010			4.6%
Corporate Expenses		20,231			20,247			(16	)		(0.1%	)
Depreciation and Amortization		32,547			33,619			(1,072	)		(3.2%	)
		110,475			114,181			(3,706	)		(3.2%	)
Operating Income	$	48,644		$	45,416		$	3,228			7.1%
Competitive Local Exchange Carrier Operations
Revenues	$	54,736		$	52,439		$	2,297			4.4%
Expenses excluding Depreciation and Amortization		49,484			49,769			(285	)		(0.6%	)
Depreciation and Amortization		9,011			8,031			980			12.2%
		58,495			57,800			695			1.2%
Operating (Loss)	$	(3,759	)	$	(5,361	)	$	1,602			29.9%
Intercompany Revenues	$	(993	)	$	(532	)	$	(461	)		N/M
Intercompany Expenses		(993	)		(532	)		(461	)		N/M
		—			—			—			N/M
Total TDS Telecom Operating Income	$	44,885		$	40,055		$	4,830			12.1%

N/M - Percentage change not meaningful.

9