-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: keymaster@town.hall.org Originator-Key-Asymmetric: MFkwCgYEVQgBAQICAgADSwAwSAJBALeWW4xDV4i7+b6+UyPn5RtObb1cJ7VkACDq pKb9/DClgTKIm08lCfoilvi9Wl4SODbR1+1waHhiGmeZO8OdgLUCAwEAAQ== MIC-Info: RSA-MD5,RSA, jflDKxV3J+8MkxnqfycrQIl879g4Wak4wQ3nUbQ79Ss8S9hX83FaHb+g8qnQPEa8 WPKKfNMWv77hqgqSKChvNQ== 0000096966-94-000041.txt : 19941110 0000096966-94-000041.hdr.sgml : 19941110 ACCESSION NUMBER: 0000096966-94-000041 CONFORMED SUBMISSION TYPE: 10-K/A PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 19931231 FILED AS OF DATE: 19941109 SROS: AMEX FILER: COMPANY DATA: COMPANY CONFORMED NAME: TELEPHONE & DATA SYSTEMS INC CENTRAL INDEX KEY: 0000096966 STANDARD INDUSTRIAL CLASSIFICATION: 4813 IRS NUMBER: 362669023 STATE OF INCORPORATION: IA FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-K/A SEC ACT: 1934 Act SEC FILE NUMBER: 001-08251 FILM NUMBER: 94558362 BUSINESS ADDRESS: STREET 1: 30 N LASALLE ST STE 4000 CITY: CHICAGO STATE: IL ZIP: 60602 BUSINESS PHONE: 3126301900 MAIL ADDRESS: STREET 1: 301 S. WESTFIELD RD STREET 2: PO BOX 5158 CITY: MADISON STATE: WI ZIP: 53705-0158 FORMER COMPANY: FORMER CONFORMED NAME: TELEPHONE SYSTEMS INC STOCK OPTION PLANS DATE OF NAME CHANGE: 19741118 FORMER COMPANY: FORMER CONFORMED NAME: TELEPHONE SYSTEMS INC DATE OF NAME CHANGE: 19740509 10-K/A 1 FORM10-K/A-1 -------------------------------------------------------------- SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-K/A-1 (Mark One) X ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended December 31, 1993 OR TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 Commission file number 1-9712 -------------------------------------------------------------- TELEPHONE AND DATA SYSTEMS, INC. (Exact name of Registrant as specified in its charter) ______________________________________________________________ Iowa 36-2669023 ------------------------------- --------------------------- State or other jurisdiction (IRS Employer Identification No.) of incorporation or organization) 30 North LaSale Street, Chicago, Illinois 60602 (Address of principal executive offices) (Zip code) Registrant's Telephone Number: (312) 630-1900 Securities registered pursuant to Section 12(b) of the Act: Name of each exchange Title of each class on which registered ------------------------------- ---------------------------- Common Shares, $1 par value American Stock Exchange Securities registered pursuant to Section 12(g) of the Act: None --------------------- Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes X No ----- ----- Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of registrant's knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. X --- As of March 7, 1994, the aggregate market values of the registrant's Common Shares, Series A Common Shares and Preferred Shares held by nonaffiliates were approximately $2.026 billion $16.5 million and $62.2 million, respectively. The closing price of the Common Shares on March 7, 1994, was $44.625, as reported by the American Stock Exchange. Because no market exists for the Series A Common Shares and Preferred Shares, the registrant has assumed for purposes hereof that (i) each Series A Common Share has a market value equal to one Common Share because the Series A Common Shares were initially issued by the registrant in exchange for Common Shares on a one-for-one basis and are convertible on a share-for-share basis into Common Shares, (ii) each share of nonconvertible Preferred Share has a market value of $100 because each of such shares had a stated value of $100 when issued, and (iii) each convertible Preferred Share has a value of $44.625 times the number of Common Shares into which it was convertible on March 7, 1994. The number of shares outstanding of each of the registrant's classes of common stock, as of March 7, 1994, is 45,669,568 Common Shares, $1 par value, and 6,881,001 Series A Common Shares, $1 par value. DOCUMENT INCORPORATED BY REFERENCE Those sections or portions of the registrant's 1993 Annual Report to Shareholders described in the cross reference sheet and table of contents attached hereto are incorporated by reference into Parts II and III of this report. -------------------------------------------------------------- Telephone and Data Systems, Inc. -------------------------------- Amendment No. 1 The undersigned registrant hereby amends the following items in its Annual Report on Form 10-K for the fiscal year ended December 31, 1993, as set forth in the pages submitted herewith: 1. Compilation Report of Independent Public Accountants on Combined Financial Statements. 2. Reports of Other Independent Accountants - Report of Coopers & Lybrand L.L.P. to the Partners of Los Angeles SMSA Limited Partnership. 3. Note 7 of Los Angeles SMSA Limited Partnership, Nashville/Clarksville MSA Limited Partnership and Baton Rouge MSA Limited Partnership Notes to Unaudited Combined Financial Statements. 4. Exhibit 23.1 Consent of Independent Public Accountants. 5. Exhibit 23.2 Consent of Independent Accountants Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this amendment to be signed on its behalf by the undersigned, thereunto duly authorized. Telephone and Data Systems, Inc. (Registrant) Date: November 9, 1994 By: /s/ MURRAY L. SWANSON -------------------------------- Murray L. Swanson Executive Vice President-Finance (Principal Financial Officer) - 2 - COMPILATION REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS To the Shareholders and Board of Directors of Telephone and Data Systems, Inc.: The accompanying combined balance sheets of the Los Angeles SMSA Limited Partnership, the Nashville/Clarksville MSA Limited Partnership and the Baton Rouge MSA Limited Partnership as of December 31, 1993 and 1992 and the related combined statements of operations, changes in partners' capital, and cash flows for each of the three years in the period ended December 31, 1993, have been prepared from the separate financial statements, which are not presented separately herein, of the Los Angeles SMSA, Nashville/Clarksville MSA and Baton Rouge MSA limited partnerships, as described in Note 1. We have reviewed for compilation only the accompanying combined financial statements, and, in our opinion, those statements have been properly compiled from the amounts and notes of the underlying separate financial statements of the Los Angeles SMSA, Nashville/Clarksville MSA and Baton Rouge MSA limited partnerships, on the basis described in Note 1. The statements for the Los Angeles SMSA, Nashville/Clarksville MSA and Baton Rouge MSA limited partnerships were audited by other auditors as set forth in their reports included on pages 50 through 54. The report of the other auditors of the Los Angeles SMSA Limited Partnership contains explanatory paragraphs with respect to the uncertainties discussed in the third, fourth, fifth and sixth paragraphs of Note 7. We have not been engaged to audit either the separate financial statements of the aforementioned limited partnerships or the related combined financial statements in accordance with generally accepted auditing standards and to render an opinion as to the fair presentation of such financial statements in accordance with generally accepted accounting principles. As discussed in "Change in Accounting Principle" in Note 2, the method of accounting for cellular sales commissions was changed effective January 1, 1991, for the Nashville/Clarksville MSA Limited Partnership and the Baton Rouge MSA Limited Partnership. ARTHUR ANDERSEN LLP Chicago, Illinois February 11, 1994 (except with respect to the matters discussed in the third, fifth and sixth paragraphs of Note 7, as to which the date is October 17, 1994.) - 3 - REPORTS OF OTHER INDEPENDENT ACCOUNTANTS To The Partners of LOS ANGELES SMSA LIMITED PARTNERSHIP: We have audited the balance sheets of Los Angeles SMSA Limited Partnership as of December 31, 1993 and 1992, and the related statements of operations, partners' capital and cash flows for each of the three years in the period ended December 31, 1993; such financial statements are not included separately herein. These financial statements are the responsibility of the Partnership's management. Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits in accordance with generally accepted auditing standards. Those standards require that we plan and perform an audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion. In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Los Angeles SMSA Limited Partnership as of December 31, 1993 and 1992, and results of its operations and its cash flows for each of the three years in the period ended December 31, 1993 in conformity with generally accepted accounting principles. As discussed in Note 9 to the financial statements, the Partnership has been named in three separate complaints served by cellular agents. The outcome of these matters is uncertain and, accordingly, no accrual for these matters has been made in the financial statements. In addition, as discussed in Note 9, three class action suits were filed against the Partnership alleging violations of state and federal antitrust laws. The outcome of these matters is uncertain and, accordingly, no accrual for these matters has been made in the financial statements. COOPERS & LYBRAND L.L.P Newport Beach, California February 4, 1994, except for the information presented in paragraphs three, five and six of Note 9, as to which the date is October 17, 1994. - 4 - LOS ANGELES SMSA LIMITED PARTNERSHIP NASHVILLE/CLARKSVILLE MSA LIMITED PARTNERSHIP BATON ROUGE MSA LIMITED PARTNERSHIP NOTES TO UNAUDITED COMBINED FINANCIAL STATEMENTS 7. Contingencies and Commitments: On June 28, 1993, an applicant for an unserved area license in the Los Angeles market filed an informal objection with the FCC to one of the Partnerships' System Information Update map. The applicant claims the Partnership was not legally authorized to provide service in parts of its described service area. The applicant requests that the FCC correct the Partnership's service area to eliminate such areas and suggests the FCC impose "such sanctions as it deems appropriate." The Partnership filed a response with the FCC in which it reported that, in its review of the applicant's allegations, it found certain errors that were made in its filings but disputed any of these were intentional. The FCC could assess penalties against the Partnership for nonconformance with its license. The outcome of this matter remains uncertain and, accordingly, the Partnership has not recorded an accrual. The Partnership intends to defend its position vigorously. The Partnership filed for its 10-year license renewal for the Los Angeles market on August 30, 1993. The Partnership is currently operating with FCC authority while the renewal application is pending resolution of the FCC's decision on claims mentioned above. The Partnership fully expects that its license will be renewed. One of the Partnerships has been named in three separate complaints served by agents of the competing carrier of the Partnership against the competitor. The general allegations include violations of California Unfair Practices Act and price fixing. The ultimate outcome of these actions is uncertain at this time. Accordingly, no accrual for these contingencies has been made. The Partnership intends to defend its position vigorously. On November 24, 1993, a class action suit was filed against one of the Partnerships and another cellular carrier alleging conspiracy to fix the price of cellular service in violation of state and federal antitrust laws. The plaintiffs are seeking substantial monetary damages and injunctive relief in excess of $100 million. The outcome of this matter is uncertain and, accordingly, the Partnership has not recorded an accrual. The Partnership intends to defend its position vigorously. On July 18, 1994, one of the Partnerships was served with a class action suit on behalf of the Partnership's contract Agents and Dealers. The complaint alleges "predatory practices" and seeks damages in excess of $1.6 million per agent and dealer, plus statutory treble damages. The outcome of this matter is uncertain and, accordingly, the Partnership has not recorded an accrual. The Partnership intends to defend its position vigorously. On October 17, 1994, a class action suit was filed against one of the Partnerships. The suit alleges a conspiracy with a competing carrier to fix the prices of cellular service in violation of federal antitrust laws. The plaintiffs are seeking damages for the class of an unspecified sum. The outcome of this matter is uncertain and, accordingly, the Partnership has not recorded an accrual. The Partnership intends to defend its position vigorously. One of the Partnerships is a party to various other lawsuits arising in the ordinary course of business. In the opinion of management, based on a review of such litigation with legal counsel, any losses resulting from these actions are not expected to materially impact the financial condition of the Partnership. - 5 - LOS ANGELES SMSA LIMITED PARTNERSHIP NASHVILLE/CLARKSVILLE MSA LIMITED PARTNERSHIP BATON ROUGE MSA LIMITED PARTNERSHIP NOTES TO UNAUDITED COMBINED FINANCIAL STATEMENTS (Continued) Two of the Partnerships provide cellular service and sell cellular telephones to diversified groups of consumers within concentrated geographical areas. The general partner performs credit evaluations of the Partnerships' customers and generally does not require collateral. Receivables are generally due within 30 days. Credit losses related to customers have been within management's expectations. One of the Partnerships purchases substantially all of its equipment from one supplier. The General Partner of two of the Partnerships entered into agreements with an equipment vendor on behalf of the Partnerships to replace the Partnerships' cellular equipment with new cellular technology which will support both analog and digital voice transmissions. - 6 - EX-23 2 EXHIBIT 23-1 EXHIBIT 23.1 CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS As independent public accountants, we hereby consent to the incorporation by reference in this Form 10-K of Telephone and Data Systems, Inc., of our report dated February 8, 1994, on the consolidated financial statements of Telephone and Data Systems, Inc. and Subsidiaries (the "Company") included in the Company's 1993 Annual Report to Shareholders, to the inclusion in this Form 10-K of our report dated February 8, 1994, on the financial statement schedules of the Company, and to the inclusion in this Form 10-K of our compilation report dated February 11, 1994 (except with respect to the matters discussed in the third, fifth, and sixth paragraphs of Note 7, as to which the date is October 17, 1994), on the combined financial statements of the Los Angeles SMSA Limited Partnership, the Nashville/Clarksville MSA Limited Partnership, and the Baton Rouge MSA Limited Partnership, and to the incorporation of such reports into the Company's previously filed S-8 Registration Statements, File No. 33-1192, File No. 33-4420, File No. 33-35172, and File No. 33-50747, and into the Company's previously filed S-3 Registration Statements, File No. 33-8564, File No. 33-8857, File No. 33-8858, File No. 33-28348 and File No. 33-68456, and into the Company's previously filed S-4 Registration Statements, File No. 33-45570, File No. 33-65986, File No. 33-68988 and File No. 33-53283. ARTHUR ANDERSEN LLP Chicago, Illinois November 7, 1994 EX-23 3 EXHIBIT 23-2 EXHIBIT 23.2 CONSENT OF INDEPENDENT ACCOUNTANTS We hereby consent to the inclusion in this Form 10-K/A-1 of Telephone and Data Systems, Inc., of our report, which includes explanatory paragraphs relating to contingencies, dated February 4, 1994, except for the information presented in paragraphs three, five and six of Note 9, as to which the date is October 17, 1994, on our audits of the financial statements of the Los Angeles SMSA Limited Partnership as of December 31, 1993 and 1992, and for each of the three years in the period ended December 31, 1993; such financial statements are not included separately in this Form 10-K/A-1. COOPERS & LYBRAND L.L.P. Newport Beach, California November 2, 1994 CONSENT OF INDEPENDENT ACCOUNTANTS We hereby consent to the inclusion in this Form 10-K of Telephone and Data Systems, Inc., of our reports dated February 11, 1994, February 11, 1993 and February 10, 1992, which included an explanatory paragraph relating to a change in accounting method, on our audits of the financial statements of the Nashville/Clarksville MSA Limited Partnership as of December 31, 1993, 1992 and 1991, and for the years ended December 31, 1993, 1992 and 1991; such financial statements are not included separately in this Form 10-K. COOPERS & LYBRAND L.L.P. Atlanta, Georgia November 2, 1994 CONSENT OF INDEPENDENT ACCOUNTANTS We hereby consent to the inclusion in this Form 10-K of Telephone and Data Systems, Inc., of our reports dated February 11, 1994, February 11, 1993 and February 10, 1992, which included an explanatory paragraph relating to a change in accounting method, on our audits of the financial statements of the Baton Rouge MSA Limited Partnership as of December 31, 1993, 1992 and 1991, and for the years ended December 31, 1993, 1992 and 1991; such financial statements are not included separately in this Form 10-K. COOPERS & LYBRAND L.L.P. Atlanta, Georgia November 2, 1994 -----END PRIVACY-ENHANCED MESSAGE-----