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): October 20, 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)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 2.02. Results of Operations and Financial Condition.

        On October 20, 2004, Telephone and Data Systems, Inc. issued a news release announcing its earnings for the third quarter of 2004. A copy of the news release is attached hereto as Exhibit 99.1. Attached as Exhibit 99.2 is a safe harbor cautionary statement under the Private Securities Litigation Reform Act of 1995.

        The information in this Current Report on Form 8-K is being furnished and shall not be deemed "filed" for the purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liabilities of that Section.

Item 9.01. Financial Statements and 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.

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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: October 20, 2004

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

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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 October 20, 2004, announcing earnings for the third quarter of 2004.
99.2	Private Securities Litigation Reform Act of 1995 Safe Harbor Cautionary Statement

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EX-99

Exhibit 99.1

As previously announced, TDS and its subsidiaries will hold a joint teleconference Oct. 20, 2004 at 10:00 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 THIRD QUARTER RESULTS

CHICAGO - Oct. 20, 2004 - Telephone and Data Systems, Inc. [AMEX:TDS] reported operating revenues of $968.8 million for the third quarter of 2004, up 10 percent from $882.4 million in the comparable period a year ago, as restated. Operating income was $75 million in the third quarter compared to $134 million in the third quarter of 2003, as restated. Net income available to common and diluted earnings per share for the quarter were $25.1 million and $0.43 respectively, compared to net income available to common and diluted earnings per share of $41.7 million and $0.72 respectively, in the third quarter of 2003, as restated.

The decline in operating income, on a year-over-year basis, is primarily attributable to costs at U.S. Cellular relating to adding new customers, increases in handset subsidies, costs associated with new market launches, and additional depreciation expense. In addition, U.S. Cellular's third quarter 2004 operating results do not include any results from operations of the divested Florida, Georgia and south Texas markets, that were either traded or sold to AT&T Wireless.

The company recorded a diluted gain per share of $.08 for discontinued operations in the quarter relating to a reduction in accrual requirements, primarily tax related, associated with the merger of Aerial Communications, Inc. with VoiceStream Wireless Corporation in 2000. In the third quarter of 2003, the company recorded a diluted loss per share of $.03 for discontinued operations related to certain liabilities associated with the merger of Aerial Communications and VoiceStream.

President's Comments
"The third quarter was one of continued progress and achievement for our wireless and wireline businesses," said LeRoy T. Carlson, Jr., president and chief executive officer. "U.S. Cellular continued to aggressively grow its customer base, recording 144,000 net customer additions during

the quarter. Contributing to this strong net-add performance was the company's low postpay churn rate of 1.6 percent, achieved despite this being the first full quarter with wireless number portability in effect throughout all of U.S. Cellular's markets.

"U.S. Cellular also made significant strides in strengthening its competitive position and enhancing its network quality. The company launched three new markets, all of which are contiguous to existing markets, and announced plans to divest certain non-strategic wireless assets. On track with its three-year network upgrade initiative, U.S. Cellular also completed the conversion of its Northwest markets to CDMA 1X technology during the quarter, and will have upgraded all of its markets prior to year end.

"TDS Telecom, our wireline operation that includes both incumbent and competitive local exchange carrier operations, reported year-over-year equivalent access line growth of 7 percent and high-speed DSL service growth of 63 percent. The incumbent local exchange carrier grew its long distance offering 32 percent over the third quarter of 2003.

"Driving the success of our business strategies are the efforts, creativity and dedication of all 11,200 employees and associates of the TDS family of companies. Their total commitment to a superb customer experience with every transaction greatly contributes to the continued strength of the company."

As previously announced, TDS and its subsidiaries will hold a joint teleconference Oct. 20, 2004, at 10:00 a.m. Chicago time. Interested parties may listen to the call live over the Internet by accessing http://www.vcall.com/CEPage.asp?ID=89406, or the conference call page of the Investor Relations section of www.teldta.com, or connect by telephone at 888/245-6674 with a pass code of 1398163. The conference call will be archived on the conference call section of our web site at www.teldta.com. Prior to the commencement of the call, certain financial and statistical information discussed during the conference call comments will be posted to the web site, together with reconciliations to generally accepted accounting principles (GAAP) of any non-GAAP information to be disclosed. 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 Sept. 30, 2004, the company employed 11,200 people and served nearly 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 and newly launched markets; changes in the overall economy; changes in competition in the markets in which TDS and U.S. Cellular operate; advances in telecommunications technology, including Voice over Internet Protocol; the impact of local number portability; changes to access and pricing of unbundled network elements; 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;

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and changes in customer growth rates, average monthly 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 the Form 8-K used by TDS to furnish this press release to the Securities and Exchange Commission, 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
USM: www.uscellular.com	TDS Metrocom www.tdsmetro.com

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TELEPHONE AND DATA SYSTEMS, INC.
SUMMARY OPERATING DATA

Quarter Ended		9/30/2004			6/30/2004			3/31/2004			12/31/2003			9/30/2003
U.S. Cellular:
Consolidated Markets:
Total population (000s) (1)		45,581			45,581			45,581			46,267			45,817
Customer units		4,828,000			4,684,000			4,547,000			4,409,000			4,268,000
Gross customer unit activations		387,000			365,000			397,000			368,000			294,000
Net customer unit activations		144,000			137,000			196,000			141,000			66,000
Market penetration (1)		10.59	%		10.28	%		9.98	%		9.53	%		9.32	%
Cell sites in service		4,713			4,420			4,122			4,184			4,082
Average monthly revenue per unit (2)	$	48.49		$	47.79		$	46.16		$	47.80		$	49.05
Retail service revenue per unit (2)	$	41.51		$	41.58		$	40.26		$	40.64		$	40.68
Inbound roaming revenue per unit (2)	$	3.39		$	3.21		$	3.17		$	3.90		$	4.65
Long-distance/other revenue per unit (2)	$	3.59		$	3.00		$	2.73		$	3.26		$	3.72
Minutes of use (MOU) (3)		553			542			491			462			435
Postpay churn rate per month (4)		1.6	%		1.5	%		1.3	%		1.4	%		1.6	%
Marketing cost per gross
customer unit addition (5)	$	410		$	392		$	371		$	384		$	405
Construction Expenditures (000s)	$	131,648		$	162,579		$	100,535		$	193,413		$	135,111

(1) Market penetration is calculated using 2003 Claritas population estimates for 9/30/04, 6/30/04 and 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 9/30/04, 6/30/04 and 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 for 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	$	691,964	$	662,658	$	619,382	$	620,639	$	628,440
Components:
Retail service revenue during quarter	$	592,411	$	576,541	$	540,228	$	527,626	$	521,247
Inbound roaming revenue during quarter	$	48,402	$	44,516	$	42,499	$	50,653	$	59,638
Long-distance/other revenue during quarter	$	51,151	$	41,601	$	36,655	$	42,360	$	47,555
Divided by average customers during quarter (000s)		4,757		4,622		4,473		4,328		4,271
Divided by three months in each quarter		3		3		3		3		3
Retail service revenue per unit	$	41.51	$	41.58	$	40.26	$	40.64	$	40.68
Inbound roaming revenue per unit	$	3.39	$	3.21	$	3.17	$	3.90	$	4.65
Long-distance/other revenue per unit	$	3.59	$	3.00	$	2.73	$	3.26	$	3.72
Average monthly revenue per unit	$	48.49	$	47.79	$	46.16	$	47.80	$	49.05

(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 third quarter results, at www.uscellular.com.

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TELEPHONE AND DATA SYSTEMS, INC.
SUMMARY OPERATING DATA

Quarter Ended		9/30/2004			6/30/2004			3/31/2004			12/31/2003			9/30/2003
TDS Telecom
ILEC:
Access line equivalents (1)		725,500			725,600			722,400			722,200			721,600
Access lines		658,200			660,400			660,900			663,800			668,200
Internet service accounts		104,800			112,100			113,600			112,900			115,600
Digital Subscriber Lines (DSL) customers		33,000			31,500			27,300			23,600			19,300
Long Distance customers (3)		289,000			280,900			266,300			230,500			218,600
Caller I.D. penetration (2)		35.2	%		34.5	%		33.8	%		33.1	%		32.4	%
Voicemail penetration (2)		13.5	%		13.5	%		13.3	%		13.3	%		13.4	%
Construction Expenditures (000s)	$	31,571		$	26,961		$	17,616		$	35,217		$	32,007
CLEC:
Access line equivalents (1)		412,500			395,600			378,800			364,800			346,500
Internet service accounts		19,100			20,300			21,600			22,200			23,600
Percent of access lines on-switch		86.8	%		85.7	%		84.5	%		83.5	%		82.2	%
Digital Subscriber Lines (DSL) customers		27,000			25,000			22,700			20,100			17,600
Construction Expenditures (000s)	$	7,198		$	8,596		$	6,456		$	10,086		$	7,999

(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 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.

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TELEPHONE AND DATA SYSTEMS, INC.
FINANCIAL HIGHLIGHTS
Three Months Ended September 30,
(Unaudited, dollars in thousands, except per share amounts)

							Increase (Decrease)
				2003
	2004			Restated			Amount			Percent
Operating Revenues
U.S. Cellular	$	748,213		$	664,976		$	83,237			12.5%
TDS Telecom		220,567			217,411			3,156			1.5%
		968,780			882,387			86,393			9.8%
Operating Expenses
U.S. Cellular
Expenses excluding Depreciation, Amortization            and Accretion		578,796			467,223			111,573			23.9%
Depreciation, Amortization and Accretion		127,408			103,634			23,774			22.9%
Loss (Gain) on Assets Held for Sale		—			(1,442	)		1,442			N/M
		706,204			569,415			136,789			24.0%
TDS Telecom
Expenses excluding Depreciation and Amortization		145,542			138,319			7,223			5.2%
Depreciation and Amortization		42,054			40,604			1,450			3.6%
		187,596			178,923			8,673			4.8%
Total Operating Expenses		893,800			748,338			145,462			19.4%
Operating Income
U.S. Cellular		42,009			95,561			(53,552	)		(56.0%	)
TDS Telecom		32,971			38,488			(5,517	)		(14.3%	)
		74,980			134,049			(59,069	)		(44.1%	)
Other Income (Expense)
Investment Income		19,579			11,644			7,935			68.1%
Interest and Dividend Income		6,227			4,426			1,801			40.7%
(Loss) on Investments		(491	)		—			(491	)		N/M
Interest (Expense)		(52,135	)		(41,604	)		(10,531	)		(25.3%	)
Minority Interest in Income of Subsidiary Trust		—			(4,273	)		4,273			N/M
Other Income (Expense), Net		(3,975	)		(8,550	)		4,575			53.5%
		(30,795	)		(38,357	)		7,562			19.7%
Income Before Income Taxes		44,185			95,692			(51,507	)		(53.8%	)
Income Tax Expense		17,864			38,828			(20,964	)		(54.0%	)
Income Before Minority Interest		26,321			56,864			(30,543	)		(53.7%	)
Minority Share of (Income), net of tax		(5,521	)		(13,448	)		7,927			58.9%
Income From Continuing Operations		20,800			43,416			(22,616	)		(52.1%	)
Discontinued Operations, net of taxes		4,351			(1,609	)		5,960			N/M
Net Income		25,151			41,807			(16,656	)		(39.8%	)
Preferred Dividend Requirement		(51	)		(105	)		54			N/M
Net Income Available to Common	$	25,100		$	41,702		$	(16,602	)		(39.8%	)
Basic Average Common Shares Outstanding (000s)		57,321			57,420			(99	)		(0.2%	)
Basic Earnings (Loss) Per Share
Income from Continuing Operations	$	0.36		$	0.76		$	(0.40	)		(52.6%	)
Discontinued Operations		0.08			(0.03	)		0.11			N/M
	$	0.44		$	0.73		$	(0.29	)		(39.7%	)
Diluted Average Common Shares Outstanding (000s)		57,615			57,866			(251	)		(0.4%	)
Diluted Earnings (Loss) Per Share
Income from Continuing Operations	$	0.35		$	0.75		$	(0.40	)		(53.3%	)
Discontinued Operations		0.08			(0.03	)		0.11			N/M
	$	0.43		$	0.72		$	(0.29	)		(40.3%	)

N/M - Percentage change not meaningful

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TELEPHONE AND DATA SYSTEMS, INC.
FINANCIAL HIGHLIGHTS
Nine Months Ended September 30,
(Unaudited, dollars in thousands, except per share amounts)

							Increase (Decrease)
				2003
	2004			Restated			Amount			Percent
Operating Revenues
U.S. Cellular	$	2,118,088		$	1,914,687		$	203,401			10.6%
TDS Telecom		655,792			640,392			15,400			2.4%
		2,773,880			2,555,079			218,801			8.6%
Operating Expenses
U.S. Cellular
Expenses excluding Depreciation, Amortization            and Accretion		1,619,101			1,428,890			190,211			13.3%
Depreciation, Amortization and Accretion		363,551			317,905			45,646			14.4%
Loss on Impairment of Intangible Assets		—			49,595			(49,595	)		N/M
Loss (Gain) on Assets Held for Sale		(725	)		23,619			(24,344	)		N/M
		1,981,927			1,820,009			161,918			8.9%
TDS Telecom
Expenses excluding Depreciation and Amortization		407,561			400,301			7,260			1.8%
Depreciation and Amortization		125,774			122,462			3,312			2.7%
		533,335			522,763			10,572			2.0%
Total Operating Expenses		2,515,262			2,342,772			172,490			7.4%
Operating Income
U.S. Cellular		136,161			94,678			41,483			43.8%
TDS Telecom		122,457			117,629			4,828			4.1%
		258,618			212,307			46,311			21.8%
Other Income (Expense)
Investment Income		52,741			37,911			14,830			39.1%
Interest and Dividend Income		14,369			14,823			(454	)		(3.1%	)
(Loss) on Investments		(2,321	)		(8,500	)		6,179			N/M
Interest (Expense)		(147,378	)		(128,957	)		(18,421	)		(14.3%	)
Minority Interest in Income of Subsidiary Trust		—			(16,678	)		16,678			N/M
Other Income (Expense), Net		(6,649	)		(14,488	)		7,839			54.1%
		(89,238	)		(115,889	)		26,651			23.0%
Income Before Income Taxes		169,380			96,418			72,962			75.7%
Income Tax Expense		69,246			47,446			21,800			45.9%
Income Before Minority Interest		100,134			48,972			51,162			N/M
Minority Share of (Income), net of tax		(18,208	)		(14,756	)		(3,452	)		(23.4%	)
Income From Continuing Operations		81,926			34,216			47,710			N/M
Discontinued Operations, net of taxes		4,351			(1,609	)		5,960			N/M
Income Before Cumulative Effect of Accounting Change		86,277			32,607			53,670			N/M
Cumulative Effect of Accounting Change		—			(11,789	)		11,789			N/M
Net Income		86,277			20,818			65,459			N/M
Preferred Dividend Requirement		(152	)		(312	)		160			N/M
Net Income Available to Common	$	86,125		$	20,506		$	65,619			N/M
Basic Average Common Shares Outstanding (000s)		57,253			57,829			(576	)		(1.0%	)
Basic Earnings (Loss) Per Share
Income From Continuing Operations	$	1.42		$	0.58		$	0.84			N/M
Discontinued Operations		0.08			(0.03	)		0.11			N/M
Cumulative Effect of Accounting Change		—			(0.20	)		0.20			N/M
	$	1.50		$	0.35		$	1.15			N/M
Diluted Average Common Shares Outstanding (000s)		57,520			57,924			(404	)		(0.7%	)
Diluted Earnings (Loss) Per Share
Income From Continuing Operations	$	1.41		$	0.58		$	0.83			N/M
Discontinued Operations		0.08			(0.03	)		0.11			N/M
Cumulative Effect of Accounting Change		—			(0.20	)		0.20			N/M
	$	1.49		$	0.35		$	1.14			N/M

N/M - Percentage change not meaningful

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

ASSETS

	September 30, 2004		December 31, 2003
Current Assets
Cash and cash equivalents	$	1,081,208	$	937,651
Accounts receivable from customers and other		447,917		409,671
Materials and supplies, at average cost, and
other current assets		155,945		157,624
		1,685,070		1,504,946
Investments
Wireless license costs, net		1,184,014		1,189,326
Wireless license rights		42,037		42,037
Goodwill, net		852,124		887,937
Intangible Assets		27,417		24,448
Marketable equity securities		2,800,015		2,772,410
Investments in unconsolidated entities		215,629		214,885
Notes Receivable		5,252		6,476
Other investments		18,284		15,439
		5,144,772		5,152,958
Property, Plant and Equipment, net
U.S. Cellular		2,307,966		2,271,254
TDS Telecom		1,036,106		1,079,732
		3,344,072		3,350,986
Other Assets and Deferred Charges		90,398		83,925
Assets Held for Sale		115,970		100,523
	$	10,380,282	$	10,193,338

8a

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

LIABILITIES AND STOCKHOLDERS' EQUITY

	September 30, 2004			December 31, 2003
Current Liabilities
Current portion of long-term debt	$	23,476		$	23,712
Notes payable		55,000			—
Accounts payable		278,893			361,010
Advance billings and customer deposits		119,162			108,372
Accrued interest		31,802			31,884
Accrued taxes		110,931			46,107
Accrued compensation		68,034			69,290
Other current liabilities		60,194			56,570
		747,492			696,945
Deferred Liabilities and Credits
Deferred taxes		1,386,260			1,285,024
Derivative Liability		664,926			712,252
Asset Retirement Obligation		132,938			124,501
Other		58,865			119,076
		2,242,989			2,240,853
Long-term Debt, excluding current portion
Prepaid Forward Contracts		1,685,354			1,672,762
Other Long-term Debt		1,997,145			1,994,913
		3,682,499			3,667,675
Minority Interest		502,419			502,702
Liabilities Related to Assets Held for Sale		4,216			2,427
Preferred Shares		3,864			3,864
Common Stockholders' Equity
Common Shares, $.01 par value		564			563
Series A Common Shares, $.01 par value		64			64
Capital in excess of par value		1,816,752			1,843,468
Treasury Shares		(452,263	)		(493,714	)
Accumulated other comprehensive income		342,258			296,820
Retained earnings		1,489,428			1,431,671
		3,196,803			3,078,872
	$	10,380,282		$	10,193,338

8b

BALANCE SHEET HIGHLIGHTS
SEPTEMBER 30, 2004
(Unaudited, dollars in thousands)

	U.S. Cellular		TDS Telecom		TDS Corporate & Other		Intercompany Eliminations			TDS Consolidated
Cash and Cash Equivalents	$	30,661	$	357,533	$	693,014	$	—		$	1,081,208
Affiliated Cash Investments		56		493,321		—		(493,377	)		—
Notes Receivable--Affiliates		—		—		391,901		(391,901	)		—
	$	30,717	$	850,854	$	1,084,915	$	(885,278	)	$	1,081,208
Cellular License, Goodwill and Intangibles, net	$	1,678,811	$	426,781	$	—	$	—		$	2,105,592
Marketable Equity Securities		249,571		67,512		2,482,932		—			2,800,015
Investment in Unconsolidated Entities		171,727		19,630		33,920		(9,648	)		215,629
Notes Receivable		5,252		—		—		—			5,252
Long-term Notes Receivable - Affiliates		—		—		400		(400	)		—
Other Investments		—		14,909		3,375		—			18,284
	$	2,105,361	$	528,832	$	2,520,627	$	(10,048	)	$	5,144,772
Property, Plant and
Equipment, net	$	2,307,966	$	1,036,106	$	—	$	—		$	3,344,072
Notes Payable:external	$	55,000	$	—	$	—	$	—		$	55,000
cash management		—		—		493,377		(493,377	)		—
intercompany		—		391,901		—		(391,901	)		—
	$	55,000	$	391,901	$	493,377	$	(885,278	)	$	55,000
Prepaid Forward Contracts	$	159,856	$	41,182	$	1,484,316	$	—		$	1,685,354
Long-term Debt:
Current Portion	$	3,000	$	18,362	$	2,114	$	—		$	23,476
Affiliated		—		400		—		(400	)		—
Non-current Portion		1,000,817		231,469		764,859		—			1,997,145
Total	$	1,003,817	$	250,231	$	766,973	$	(400	)	$	2,020,621
Preferred Shares	$	—	$	—	$	3,864	$	—		$	3,864
Construction Expenditures:
Quarter Ended 9/30/04	$	131,648	$	38,769	$	1,142				$	171,559
Nine Months Ended 9/30/04	$	394,762	$	98,398	$	3,514				$	496,674

9

TDS Telecom Highlights
Three Months Ended September 30,
(Unaudited, dollars in thousands)

							Increase (Decrease)
	2004			2003			Amount			Percent
Local Telephone Operations
Operating Revenues
Local Service	$	51,132		$	50,370		$	762			1.5%
Network Access and Long-Distance		91,693			91,050			643			0.7%
Miscellaneous		22,450			23,230			(780	)		(3.4%	)
		165,275			164,650			625			0.4%
Operating Expenses
Network Operations		45,205			41,240			3,965			9.6%
Customer Operations		22,599			23,723			(1,124	)		(4.7%	)
Corporate Expenses		21,303			20,848			455			2.2%
Depreciation and Amortization		32,667			32,059			608			1.9%
		121,774			117,870			3,904			3.3%
Operating Income	$	43,501		$	46,780		$	(3,279	)		(7.0%	)
Competitive Local Exchange Carrier Operations
Revenues	$	56,522		$	53,468		$	3,054			5.7%
Expenses excluding Depreciation and Amortization		57,665			53,215			4,450			8.4%
Depreciation and Amortization		9,387			8,545			842			9.9%
		67,052			61,760			5,292			8.6%
Operating (Loss)	$	(10,530	)	$	(8,292	)	$	(2,238	)		(27.0%	)
Intercompany Revenues	$	(1,230	)	$	(707	)	$	(523	)		N/M
Intercompany Expenses		(1,230	)		(707	)		(523	)		N/M
		—			—			—			N/M
Total TDS Telecom Operating Income	$	32,971		$	38,488		$	(5,517	)		(14.3%	)

N/M - Percentage change not meaningful.

10

TDS Telecom Highlights
Nine Months Ended September 30,
(Unaudited, dollars in thousands)

							Increase (Decrease)
	2004			2003			Amount			Percent
Local Telephone Operations
Operating Revenues
Local Service	$	152,778		$	149,163		$	3,615			2.4%
Network Access and Long-Distance		269,376			269,140			236			0.1%
Miscellaneous		65,757			65,749			8			0.0%
		487,911			484,052			3,859			0.8%
Operating Expenses
Network Operations		118,906			119,219			(313	)		(0.3%	)
Customer Operations		68,553			69,481			(928	)		(1.3%	)
Corporate Expenses		61,797			62,123			(326	)		(0.5%	)
Depreciation and Amortization		97,639			97,799			(160	)		(0.2%	)
		346,895			348,622			(1,727	)		(0.5%	)
Operating Income	$	141,016		$	135,430		$	5,586			4.1%
Competitive Local Exchange Carrier Operations
Revenues	$	171,039		$	158,386		$	12,653			8.0%
Expenses excluding Depreciation and Amortization		161,463			151,524			9,939			6.6%
Depreciation and Amortization		28,135			24,663			3,472			14.1%
		189,598			176,187			13,411			7.6%
Operating (Loss)	$	(18,559	)	$	(17,801	)	$	(758	)		(4.3%	)
Intercompany Revenues	$	(3,158	)	$	(2,046	)	$	(1,112	)		N/M
Intercompany Expenses		(3,158	)		(2,046	)		(1,112	)		N/M
		--			--			--			N/M
Total TDS Telecom Operating Income	$	122,457		$	117,629		$	4,828			4.1%

N/M - Percentage change not meaningful.

11

EX-99

Exhibit 99.2

PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995
SAFE HARBOR CAUTIONARY STATEMENT

The earnings release attached to this Form 8-K contains statements that are not based on historical fact, including the words “believes,” “anticipates,” “intends,” “expects,” and similar words. These statements constitute “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Such forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause the actual results, events or developments to be significantly different from any future results, events or developments expressed or implied by such forward-looking statements. Such factors include the following:

• Increases in the level of competition in the markets in which TDS operates could adversely affect TDS's revenues or increase its costs to compete.
  
  
• Consolidation in the wireless industry may create stronger competitors both operationally and financially which could adversely affect TDS's revenues and increase its costs to compete.
  
  
• Advances or changes in telecommunications technology, such as Voice Over Internet Protocol, could render certain technologies used by TDS obsolete, could reduce TDS's revenues or could increase TDS's cost of doing business.
  
  
• Changes in the telecommunications regulatory environment, or a failure to timely or fully comply with any regulatory requirements, such as wireless number portability, local number portability and E-911 services, could adversely affect TDS's financial condition, results of operations or ability to do business.
  
  
• Changes in U.S. Cellular's enterprise value, changes in the supply or demand of the market for wireless licenses or telephone companies, adverse developments in the TDS businesses or the industries in which TDS is involved and/or other factors could require TDS to recognize impairments in the carrying value of TDS's license costs, goodwill and/or physical assets.
  
  
• Conversions of debt, early redemptions of debt or repurchases of debt, changes in prepaid forward contracts, operating leases, purchase obligations or other factors or developments could cause the amounts reported under Contractual Obligations in TDS's Annual Report in 10-K for the year ended December 31, 2003 to be different from the amounts presented.
  
  
• Changes in accounting standards or TDS's accounting policies, estimates and/or in the assumptions underlying the accounting estimates, including those described under Application of Critical Accounting Policies and Estimates, could have a material effect on TDS's financial condition, changes in financial condition and results of operations.
  
  
• Settlement, judgments, restraints on its current or future manner of doing business and/or legal costs resulting from pending and future litigation could have an adverse effect on TDS's financial condition, results of operations or ability to do business.
  
  
• Costs, integration problems or other factors associated with acquisitions / divestitures of properties and/or licenses could have an adverse effect on TDS's financial condition or results of operations.
  
  
• Changes in prices, the number of customers, average revenue per unit, penetration rates, churn rates, selling expenses, net customer retention costs associated with wireless number portability and local number portability, roaming rates, access minutes of use, the mix of products and services offered or other business factors could have an adverse effect on TDS's business operations.
  
  
• Changes in roaming partners' rates, and the ability to provide voice and data services on other carriers' networks could have an adverse effect on TDS's operations.
  
  
• Changes in competitive factors with national and global wireless carriers could result in product and cost disadvantages and could have an adverse effect on TDS's operations.
  
  

• Lack of standards and roaming agreements for wireless data products could place U.S. Cellular's data services offerings at a disadvantage to those offered by other wireless carriers with more nationwide service territories.
  
  
• Changes in guidance or interpretations of accounting requirements, changes in industry practice or changes in management assumptions could require amendments to or restatements of disclosures or financial information included in this or prior filings with the SEC.
  
  
• Uncertainty of access to capital for telecommunications companies, deterioration in the capital markets, other changes in market conditions, changes in TDS's credit ratings or other factors could limit or restrict the availability of financing on terms and prices acceptable to TDS, which could require TDS to reduce its construction, development and acquisition programs.
  
  
• Changes in income tax rates, tax laws, regulations or rulings, or federal and state tax assessments could have an adverse effect on TDS's financial condition and results of operations.
  
  
• War, conflicts, hostilities and/or terrorist attacks could have an adverse effect on TDS's businesses.
  
  
• Changes in general economic and business conditions, both nationally and in the markets in which TDS operates, including difficulties by telecommunications companies, could have an adverse effect on TDS's businesses.
  
  
• Any of the foregoing events or other events could cause revenues, customer additions, operating income, capital expenditures and or any other financial or statistical information to vary from management's forecasts included in this report by a material amount.
  
  
• Changes in facts or circumstances, including new or additional information that affects the calculation of accrued liabilities for contingent obligations under guarantees, indemnities or otherwise, could require TDS to record charges in excess of amounts accrued on the financial statements, if any, which could have an adverse effect on TDS's financial condition and results of operations.
  
  
• Implementation of Section 404 of the Sarbanes-Oxley Act of 2002, which requires TDS to evaluate and report on its internal controls over financial reporting and have its auditor attest to such evaluation in 2004 and subsequent years, could identify significant deficiencies or material weaknesses. A significant deficiency or material weakness in the effectiveness of internal control over financial reporting and/or in disclosure controls and procedures could result in inaccurate financial statements or other disclosures or permit fraud, which could have a material adverse effect on TDS's business, results of operations and financial condition and have a negative effect on the trading price of its securities.
  
  
• The possible development of adverse precedent in litigation or conclusions in professional studies to the effect that radio frequency emissions from handsets, wireless data devices and/or cell sites cause harmful health consequences, including cancer or tumors, or may interfere with various electronic medical devices such as pacemakers, may discourage the use of handsets and wireless data devices, may result in significant restrictions on the location and operation of cell sites, could result in the inability to obtain insurance on a cost effective basis or result in adverse decisions in litigation against TDS, all of which could have a material adverse effect on TDS's financial condition and results of operations.
  
  

TDS undertakes no obligation to update publicly any forward-looking statements whether as a result of new information, future events or otherwise. Readers should evaluate any statements in light of these important factors.