CHICAGO, Feb. 29 /PRNewswire-FirstCall/ -- Telephone and Data Systems, Inc. reported operating revenues of $1,242.7 million for the fourth quarter of 2007, up 11 percent from $1,124.7 million in the comparable period one year ago. The company recorded operating income of $96.7 million, up 10 percent from $87.9 million in the fourth quarter of 2006. Net loss available to common and diluted loss per share were $56.3 million and $0.48, respectively, compared to net loss and diluted loss per share of $116.2 million and $1.00, respectively, for the comparable period one year ago.
TDS recorded a loss of $194.5 million in the fourth quarter related to the fair value adjustment of derivative instruments. This compares to a loss of $322.4 million in the fourth quarter of 2006. The company recorded a $46.2 million gain in the fourth quarter on the sale of investments, principally related to the delivery of Vodafone American Depositary Receipts to settle the related variable prepaid forward contracts.
Sprint Nextel exchange provides more usable spectrum
In the fourth quarter, U.S. Cellular agreed to deliver personal communication service (PCS) spectrum in eight licenses covering portions of one state to Sprint Nextel in exchange for more strategically useful spectrum in eight licenses covering portions of four states. The exchange will not include any cash, customers, network assets, or other assets. U.S. Cellular recorded a $20.8 million pre-tax loss on the exchange. The transaction is expected to close in the first half of 2008.
Steady growth delivers shareholder value
"TDS had strong revenue and operating income increases in the fourth quarter and throughout 2007," said LeRoy T. Carlson, Jr., TDS president and CEO. "We continued to see dramatic growth in data revenues at U.S. Cellular, our largest business unit, which also achieved strong year-over-year increases in ARPU. Our wireline business, TDS Telecom, reduced operating costs and improved profitability. It also continued to add DSL customers as part of its broadband focus.
"At the enterprise level, we sought to create additional value for our shareholders through the TDS stock repurchase program. And, we continued to pay a modest dividend, which has increased for more than 30 consecutive years."
U.S. Cellular reaches data revenue, ARPU milestones
"U.S. Cellular's customer satisfaction focus helped drive strong service revenue growth," said Carlson, "with data revenues passing the $100 million mark in the quarter. The company also achieved an impressive increase in ARPU in 2007. U.S. Cellular's core retail postpay customers continue to be receptive to its family, wide area, and national plans, as well as to the new handsets, smart phones, and data services introduced in 2007."
TDS Telecom achieves broadband gains
"TDS Telecom's broadband focus drove another quarter of DSL customer gains," added Carlson, "as the company emphasized its Triple Play bundles of voice, high-speed data, and DISH Network television services. Operating income increased significantly in the quarter, due in part to effective cost controls instituted throughout 2007. Equivalent access lines increased year over year on the ILEC side, as did the number of access lines equipped for DSL. TDS Telecom also increased the average speed of its DSL service throughout 2007."
OUTLOOK FOR 2008
"For 2008," continued Carlson, "U.S. Cellular remains committed to adding customers and growing profitably in its existing markets. The company does not plan to enter any significant new markets in 2008. U.S. Cellular continues to target the retail postpay customers that are at the core of its strategy. As always, the company will offer high-quality services and products that are easy for customers to understand. U.S. Cellular will continue to evaluate the timing and potential benefits for its target customers of EVDO/3G and Long- Term Evolution technologies.
"Going forward," said Carlson, "TDS Telecom will continue to focus on adding DSL customers and increasing the DSL speeds it offers. The company's long-term broadband goal is to provide 25 megabits per second or higher data speeds to a majority of its customers."
Guidance
Guidance for the year ending Dec. 31, 2008 is as follows. There can be no assurance that final results will not differ materially from this guidance.
U.S. Cellular 2008 guidance as of Feb. 29, 2008 is
as follows:
Net Retail Customer Additions 250,000 - 325,000
Service Revenues $3.9 - $4.0 billion
Operating Income $460 - $535 million
Depreciation, Amortization & Accretion * Approx. $615 million
Capital Expenditures $590 - $640 million
TDS Telecom (ILEC and CLEC) 2008 guidance as of
Feb. 29, 2008 is as follows:
Operating Revenues $815 - $855 million
Operating Income $110 - $140 million
Depreciation, Amortization & Accretion Approx. $160 million
Capital Expenditures $130 - $160 million
* Includes losses on disposals of assets
This guidance represents the views of management as of Feb. 29, 2008 and should not be assumed to be accurate as of any other date. TDS undertakes no legal duty to update such information, whether as a result of new information, future events, or otherwise.
TDS remediates two material weaknesses; makes progress on third
TDS has reduced its material weaknesses related to personnel and accounting knowledge and fixed assets to the level of deficiency and significant deficiency, respectively. TDS has made progress toward remediating the third material weakness related to income tax accounting. The companies' efforts in these areas are summarized below:
-- Personnel and accounting knowledge: TDS conducted a multi-year program
to increase technical accounting expertise at the corporate and
business unit levels, improve review and documentation procedures, and
automate more aspects of its accounting and financial reporting. The
company developed many new accounting policies and procedures, added
personnel in key areas, and developed an ongoing training program for
its accounting personnel.
-- Fixed assets: U.S. Cellular conducted a detailed physical inventory and
valuation review of its property, plant, and equipment, and enhanced
its controls over the recording of transfers and disposals of such
assets. There was a resulting non-cash charge of $14.6 million included
in loss on asset disposals/exchanges for the fourth quarter.
-- Income tax accounting: TDS created and staffed a new tax accounting
group (including adding a director of accounting) that implemented new
tax provisioning software to enhance internal controls related to
income taxes at the corporate and business unit levels. As part of this
implementation, the company instituted several new controls to help
ensure the accuracy of accounting for income taxes.
Item 9A (Controls and Procedures) of TDS' SEC Form 10-K contains an expanded discussion of the company's remediation efforts.
Conference Call Information
TDS will hold a conference call on March 3, 2008 at 10:00 a.m. Chicago time.
-- Access the live call online at
http://www.videonewswire.com/event.asp?id=46101 or on the Conference
Calls page of http://www.teldta.com/
-- Access the call by phone at 800/706-9695 (US/Canada) and use conference
ID #37621356
Before the call, certain financial and statistical information to be discussed during the call will be posted to the Conference Calls page of http://www.teldta.com/, together with reconciliations to generally accepted accounting principles (GAAP) of any non-GAAP information to be disclosed. The call will be archived on the Conference Calls page of http://www.teldta.com/.
About TDS
TDS provides wireless, local and long-distance telephone, and broadband services to more than 7.3 million customers in 36 states through its business units, U.S. Cellular (wireless) and TDS Telecom (wireline). Founded in 1969 and headquartered in Chicago, TDS employed 11,900 people as of year end.
About U.S. Cellular
U.S. Cellular Corporation, the nation's sixth-largest full-service wireless carrier, provides a comprehensive range of wireless products and services, superior customer support, and a high-quality network to more than 6.1 million customers in 26 states. The Chicago-based company employed 8,400 associates as of year-end.
Safe Harbor Statement Under the Private Securities Litigation Reform Act of 1995: All information set forth in this news release, except historical and factual information, represents forward-looking statements. This includes all statements about the company's plans, beliefs, estimates, and expectations. These statements are based on current estimates, projections, and assumptions, which involve certain risks and uncertainties that could cause actual results to differ materially from those in the forward-looking statements. Important factors that may affect these forward-looking statements include, but are not limited to: The ability of U.S. Cellular to successfully manage and grow the operations of more recently launched markets; changes in the overall economy, competition, the access to and pricing of unbundled network elements, the state and federal telecommunications regulatory environment, and the value of assets and investments, including variable prepaid forward contracts; adverse changes in the ratings afforded TDS and U.S. Cellular debt securities by accredited ratings organizations; industry consolidation; likely participation in FCC spectrum auctions; advances in telecommunications technology; uncertainty of access to the capital markets; risks and uncertainties relating to restatements and possible future restatements; ability to remediate material weaknesses; pending and future litigation; changes in income tax rates, laws, regulations or rulings; acquisitions/divestitures of properties and/or licenses; and changes in customer growth rates, average monthly revenue per unit, churn rates, roaming terms, the availability of devices, or the mix of products and services offered by U.S. Cellular and TDS Telecom. Investors are encouraged to consider these and other risks and uncertainties that are discussed in the Form 8-K used by TDS to furnish this press release to the SEC, which are incorporated by reference herein.
For more information about TDS and its business units, visit our web sites:
TDS: http://www.teldta.com/ USM: http://www.uscellular.com/
TDS Telecom: http://www.tdstelecom.com/
TELEPHONE AND DATA SYSTEMS, INC.
SUMMARY OPERATING DATA
Quarter Ended 12/31/2007 9/30/2007 6/30/2007 3/31/2007 12/31/2006
U.S. Cellular
Total Population:
Consolidated
markets (1) 82,371,000 81,841,000 81,581,000 56,048,000 55,543,000
Consolidated
operating
markets (1) 44,955,000 44,955,000 44,955,000 44,416,000 44,043,000
All customers:
Customer
units 6,122,000 6,067,000 6,010,000 5,973,000 5,815,000
Gross
customer
unit
additions 437,000 447,000 418,000 459,000 389,000
Net customer
unit
additions 55,000 57,000 37,000 152,000 86,000
Market
penetration
at end of
period:
Consolidated
markets (2) 7.4% 7.4% 7.4% 10.7% 10.5%
Consolidated
operating
markets (2) 13.6% 13.5% 13.4% 13.4% 13.2%
Retail customers:
Customer
units 5,564,000 5,500,000 5,448,000 5,377,000 5,225,000
Gross customer
unit
additions 367,000 374,000 347,000 397,000 375,000
Net customer
unit
additions 64,000 52,000 71,000 146,000 98,000
Cell sites
in service 6,383 6,255 6,140 6,004 5,925
Average monthly
revenue per
unit (3) $52.46 $52.71 $50.42 $48.69 $48.15
Retail service
revenue per
unit (3) $45.36 $45.00 $43.87 $42.69 $42.21
Inbound roaming
revenue per
unit (3) $3.09 $3.36 $2.68 $2.33 $2.34
Long-distance/
other revenue
per unit (3) $4.01 $4.35 $3.87 $3.67 $3.60
Minutes of
use (MOU) (4) 906 887 858 783 749
Retail postpay
churn rate
per month (5) 1.5% 1.6% 1.4% 1.3% 1.5%
Construction
Expenditures
(000s) $188,100 $130,600 $137,100 $109,700 $158,400
(1) "Total population of consolidated markets" and "Total population of
consolidated operating markets" are used only for the purposes of
calculating market penetration of consolidated operating markets,
which is calculated by dividing customers by the total market
population (without duplication of population in overlapping markets).
Effective with this report, U.S. Cellular is expanding its reporting
of total population to include the population of its consolidated
operating markets - i.e., markets in which U.S. Cellular provides
wireless service to customers - in order to reflect its market
penetration more accurately. Historically, total population has been
reported only for total consolidated markets, regardless of whether
U.S. Cellular was providing wireless services in those markets.
(2) Calculated by dividing the number of wireless customers at the end of
the period by the total population of consolidated markets and
consolidated operating markets, respectively, as estimated by
Claritas.
(3) 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 $957,896 $954,540 $906,218 $860,583 $831,663
Components:
Retail
service
revenue
during
quarter $828,169 $814,948 $788,535 $754,515 $729,072
Inbound
roaming
revenue
during
quarter $56,358 $60,843 $48,084 $41,268 $40,354
Long-distance
/other
revenue
during
quarter $73,369 $78,749 $69,599 $64,800 $62,237
Divided by
average
customers
during
quarter (000s) 6,086 6,036 5,991 5,892 5,757
Divided by
three months
in each
quarter 3 3 3 3 3
Average monthly
revenue per
unit $52.46 $52.71 $50.42 $48.69 $48.15
Retail service
revenue per
unit $45.36 $45.00 $43.87 $42.69 $42.21
Inbound roaming
revenue per
unit $3.09 $3.36 $2.68 $2.33 $2.34
Long-distance/
other revenue
per unit $4.01 $4.35 $3.87 $3.67 $3.60
(4) Average monthly local minutes of use per customer (without roaming).
(5) Retail postpay churn rate per month is calculated by dividing the
total monthly retail postpay customer disconnects during the quarter
by the average retail postpay customer base for the quarter.
TELEPHONE AND DATA SYSTEMS, INC.
SUMMARY OPERATING DATA
12/31/ 9/30/ 6/30/ 3/31/ 12/31/
Quarter Ended 2007 2007 2007 2007 2006
TDS Telecom
ILEC:
Access line equivalents
(1) 762,700 763,000 761,200 763,400 757,300
Access lines 585,600 595,100 601,600 610,300 616,500
Dial-up Internet service
accounts 56,300 61,300 65,800 71,100 77,100
Digital Subscriber Lines
(DSL) customers 143,500 135,500 127,400 118,000 105,100
Long Distance customers 345,200 346,400 346,500 343,800 340,000
Construction Expenditures
(000s) $41,300 $23,500 $30,900 $16,100 $39,400
CLEC:
Access line equivalents
(1) 435,000 443,700 448,400 456,200 456,200
Dial-up Internet service
accounts 7,600 8,200 8,800 10,200 10,200
Percent of access lines
on-switch 94.0% 93.9% 93.7% 93.3% 93.0%
Digital Subscriber Lines
(DSL) customers 43,300 43,600 43,800 42,600 42,100
Construction Expenditures
(000s) $5,700 $3,400 $4,800 $2,500 $5,700
(1) Equivalent access lines are the sum of physical access lines and high-
capacity data lines adjusted to estimate the equivalent number of
physical access lines in terms of capacity. A physical access line is
the individual circuit connecting a customer to a telephone company's
central office facilities.
TELEPHONE AND DATA SYSTEMS, INC.
FINANCIAL HIGHLIGHTS
Three Months Ended December 31,
(Unaudited, dollars and shares in thousands, except per share amounts)
Increase
(Decrease)
2007 2006 Amount Percent
Operating Revenues
U.S. Cellular $1,024,110 $902,119 $121,991 13.5%
TDS Telecom 211,656 218,277 (6,621) (3.0%)
All Other (1) 6,942 4,288 2,654 61.9%
1,242,708 1,124,684 118,024 10.5%
Operating Expenses
U.S. Cellular
Expenses excluding
depreciation, amortization
and accretion 771,608 692,813 78,795 11.4%
Depreciation, amortization
and accretion 142,279 138,246 4,033 2.9%
Loss on asset
disposals/exchanges 46,958 7,415 39,543 N/M
960,845 838,474 122,371 14.6%
TDS Telecom
Expenses excluding
depreciation, amortization
and accretion 136,422 151,881 (15,459) (10.2%)
Depreciation, amortization
and accretion 40,639 40,497 142 0.4%
177,061 192,378 (15,317) (8.0%)
All Other (1)
Expenses excluding
depreciation and
amortization 4,478 5,301 (823) (15.5%)
Depreciation and amortization 3,667 622 3,045 N/M
8,145 5,923 2,222 37.5%
Total Operating Expenses 1,146,051 1,036,775 109,276 10.5%
Operating Income (Loss)
U.S. Cellular 63,265 63,645 (380) (0.6%)
TDS Telecom 34,595 25,899 8,696 33.6%
All Other (1) (1,203) (1,635) 432 26.4%
96,657 87,909 8,748 10.0%
Investment and Other Income
(Expense)
Equity in earnings of
unconsolidated entities 20,437 28,794 (8,357) (29.0%)
Interest and dividend income 16,784 20,293 (3,509) (17.3%)
Fair value adjustment of
derivative instruments (194,497) (322,406) 127,909 39.7%
Gain on investments 46,213 70,428 (24,215) (34.4%)
Interest expense (45,960) (57,358) 11,398 19.9%
Other, net (1,444) (844) (600) (71.1%)
(158,467) (261,093) 102,626 39.3%
(Loss) Before Income Taxes and
Minority Interest (61,810) (173,184) 111,374 64.3%
Income tax (benefit) (14,791) (68,787) 53,996 78.5%
(Loss) Before Minority Interest (47,019) (104,397) 57,378 55.0%
Minority share of income (9,304) (11,839) 2,535 21.4%
Net (Loss) (56,323) (116,236) 59,913 51.5%
Preferred dividend requirement (13) (13) --- 0.0%
Net (Loss) Available to Common $(56,336) $(116,249) $59,913 51.5%
Basic Weighted Average Common
Shares Outstanding 117,914 116,335 1,579 1.4%
Basic (Loss) Per Share $(0.48) $(1.00) $0.52 52.0%
Diluted Weighted Average Common
Shares Outstanding 117,914 116,335 1,579 1.4%
Diluted (Loss) Per Share $(0.48) $(1.00) $0.52 52.0%
(1) Consists of Suttle Straus printing and distribution operations and
intercompany eliminations.
N/M - Percentage change not meaningful.
TELEPHONE AND DATA SYSTEMS, INC.
FINANCIAL HIGHLIGHTS
Year Ended December 31,
(Unaudited, dollars and shares in thousands, except per share amounts)
Increase
(Decrease)
2007 2006 Amount Percent
Operating Revenues
U.S. Cellular $3,946,264 $3,473,155 $473,109 13.6%
TDS Telecom 860,211 875,918 (15,707) (1.8%)
All Other (1) 22,509 15,445 7,064 45.7%
4,828,984 4,364,518 464,466 10.6%
Operating Expenses
U.S. Cellular
Expenses excluding
depreciation, amortization
and accretion 2,912,939 2,608,147 304,792 11.7%
Depreciation, amortization
and accretion 582,269 555,525 26,744 4.8%
Loss on asset
disposals/exchanges 54,857 19,587 35,270 N/M
3,550,065 3,183,259 366,806 11.5%
TDS Telecom
Expenses excluding
depreciation, amortization
and accretion 561,547 587,450 (25,903) (4.4%)
Depreciation, amortization
and accretion 157,462 159,612 (2,150) (1.3%)
719,009 747,062 (28,053) (3.8%)
All Other (1)
Expenses excluding
depreciation and
amortization 19,524 18,666 858 4.6%
Depreciation and amortization 12,488 2,754 9,734 N/M
32,012 21,420 10,592 49.4%
Total Operating Expenses 4,301,086 3,951,741 349,345 8.8%
Operating Income (Loss)
U.S. Cellular 396,199 289,896 106,303 36.7%
TDS Telecom 141,202 128,856 12,346 9.6%
All Other (1) (9,503) (5,975) (3,528)(59.0%)
527,898 412,777 115,121 27.9%
Investment and Other Income
(Expense)
Equity in earnings of
unconsolidated entities 91,831 95,170 (3,339) (3.5%)
Interest and dividend income 199,435 194,644 4,791 2.5%
Fair value adjustment of
derivative instruments (351,570) (299,525) (52,045) (17.4%)
Gain on investments 432,993 161,846 271,147 N/M
Interest expense (208,736) (234,543) 25,807 11.0%
Other, net (6,401) (7,031) 630 9.0%
157,552 (89,439) 246,991 N/M
Income Before Income Taxes and
Minority Interest 685,450 323,338 362,112 N/M
Income tax expense 269,054 116,459 152,595 N/M
Income Before Minority Interest 416,396 206,879 209,517 N/M
Minority share of income (73,111) (45,120) (27,991) (62.0%)
Income Before Extraordinary Item 343,285 161,759 181,526 N/M
Extraordinary item, net of taxes 42,827 --- 42,827 N/M
Net Income 386,112 161,759 224,353 N/M
Preferred dividend requirement (52) (165) 113 68.5%
Net Income Available to Common $386,060 $161,594 $224,466 N/M
Basic Weighted Average Common
Shares Outstanding 117,624 115,904 1,720 1.5%
Basic Earnings Per Share
Income before extraordinary item $2.92 $1.39 $1.53 N/M
Extraordinary item 0.36 --- 0.36 N/M
$3.28 $1.39 $1.89 N/M
Diluted Weighted Average Common
Shares Outstanding 119,126 116,844 2,282 2.0%
Diluted Earnings Per Share
Income before extraordinary item $2.86 $1.37 $1.49 N/M
Extraordinary item 0.36 --- 0.36 N/M
$3.22 $1.37 $1.85 N/M
(1) Consists of Suttle Straus printing and distribution operations and
intercompany eliminations.
N/M - Percentage change not meaningful.
TELEPHONE AND DATA SYSTEMS, INC.
CONSOLIDATED BALANCE SHEET HIGHLIGHTS
(Unaudited, dollars in thousands)
ASSETS
December 31, December 31,
2007 2006
Current Assets
Cash and cash equivalents $1,174,446 $1,013,325
Marketable equity securities 1,917,893 1,205,344
Accounts receivable from customers
and other 530,421 520,167
Inventory 115,818 128,981
Other current assets 137,010 105,267
3,875,588 2,973,084
Investments
Licenses 1,516,629 1,520,407
Goodwill 679,129 647,853
Customer lists 25,851 26,196
Marketable equity securities 1 1,585,286
Investments in unconsolidated entities 206,418 197,636
Other investments 11,508 11,073
2,439,536 3,988,451
Property, Plant and Equipment, net
U.S. Cellular 2,595,096 2,628,848
TDS Telecom 900,267 920,350
Other 29,739 32,188
3,525,102 3,581,386
Other Assets and Deferred Charges 53,917 56,593
Total Assets $9,894,143 $10,599,514
LIABILITIES AND STOCKHOLDERS' EQUITY
December 31, December 31,
2007 2006
Current Liabilities
Prepaid forward contracts $1,005,512 $738,408
Current portion of long-term debt 3,860 2,917
Derivative liability 711,692 359,970
Notes payable --- 35,000
Accounts payable 308,882 294,932
Customer deposits and deferred revenues 166,191 141,164
Accrued taxes 40,439 38,324
Accrued compensation 91,703 72,804
Net deferred income tax liability 327,162 236,397
Other current liabilities 144,078 164,815
2,799,519 2,084,731
Deferred Liabilities and Credits
Net deferred income tax liability 555,593 950,348
Derivative liability --- 393,776
Other deferred liabilities and credits 328,070 369,045
883,663 1,713,169
Long-term Debt 1,632,226 2,620,609
Minority Interest in Subsidiaries 651,537 609,722
Preferred Shares 860 863
Common Stockholders' Equity
Common Shares, $.01 par value 566 566
Special Common Shares, $.01 par value 629 629
Series A Common Shares, $.01 par value 64 64
Capital in excess of par value 2,048,110 1,992,597
Treasury Shares, at cost
Common Shares (120,544) (187,103)
Special Common Shares (204,914) (187,016)
Accumulated other comprehensive income 511,776 522,113
Retained earnings 1,690,651 1,428,570
3,926,338 3,570,420
Total Liabilities and Stockholders' Equity $9,894,143 $10,599,514
BALANCE SHEET HIGHLIGHTS
DECEMBER 31, 2007
(Unaudited, dollars in thousands)
U.S. TDS TDS Corporate Intercompany TDS
Cellular Telecom & Other Eliminations Consolidated
Cash and cash
equivalents $204,533 $379,007 $590,906 $--- $1,174,446
Affiliated cash
investments --- 737,889 --- (737,889) ---
Marketable
equity
securities 16,352 --- 1,901,541 --- 1,917,893
Notes receivable
--affiliates --- --- 270,582 (270,582) ---
$220,885 $1,116,896 $2,763,029 $(1,008,471) $3,092,339
Licenses,
goodwill
and customer
lists $1,989,137 $401,711 $(169,239) $--- $2,221,609
Marketable
equity
securities --- --- 1 --- 1
Investment in
unconsolidated
entities 157,693 3,677 50,618 (5,570) 206,418
Other
investments 4,422 3,277 3,809 --- 11,508
$2,151,252 $408,665 $(114,811) $(5,570) $2,439,536
Property,
Plant and
Equipment,
net $2,595,096 $900,267 $29,739 $--- $3,525,102
Notes payable:
cash management --- --- 737,889 (737,889) ---
intercompany --- 270,582 --- (270,582) ---
$--- $270,582 $737,889 $(1,008,471) $---
Forward
contracts
(all current) $--- $--- $1,005,512 --- $1,005,512
Long-term Debt:
Current portion $--- $474 $3,386 $--- $3,860
Non-current
portion 1,002,293 3,114 626,819 --- 1,632,226
Total $1,002,293 $3,588 $630,205 $--- $1,636,086
Preferred
Shares $--- $--- $860 $--- $860
Construction
expenditures:
Quarter
ended
12/31/07 $188,096 $47,039 $1,412 $236,547
Year
ended
12/31/07 $565,495 $128,180 $5,891 $699,566
TDS Telecom Highlights
Three Months Ended December 31,
(Unaudited, dollars in thousands)
Increase
(Decrease)
2007 2006 Amount Percent
Local Telephone Operations
Operating Revenues
Local service $46,564 $49,155 $(2,591) (5.3%)
Network access and long-distance 80,347 85,305 (4,958) (5.8%)
Miscellaneous 29,137 25,837 3,300 12.8%
156,048 160,297 (4,249) (2.7%)
Operating Expenses
Cost of services and products 44,878 50,099 (5,221) (10.4%)
Selling, general and
administrative expenses 45,770 50,793 (5,023) (9.9%)
Depreciation, amortization and
accretion 34,528 34,785 (257) (0.7%)
125,176 135,677 (10,501) (7.7%)
Operating Income $30,872 $24,620 $6,252 25.4%
Competitive Local Exchange Carrier
Operations
Revenues $57,440 $59,205 $(1,765) (3.0%)
Expenses excluding depreciation,
amortization and accretion 47,606 52,214 (4,608) (8.8%)
Depreciation, amortization and
accretion 6,111 5,712 399 7.0%
53,717 57,926 (4,209) (7.3%)
Operating Income $3,723 $1,279 $2,444 N/M
Intercompany revenues $(1,832) $(1,225) $(607) N/M
Intercompany expenses (1,832) (1,225) (607) N/M
--- --- ---
Total TDS Telecom Operating Income $34,595 $25,899 $8,696 33.6%
N/M - Percentage change not meaningful.
TDS Telecom Highlights
Year Ended December 31,
(Unaudited, dollars in thousands)
Increase
(Decrease)
2007 2006 Amount Percent
Local Telephone Operations
Operating Revenues
Local service $193,823 $200,213 $(6,390) (3.2%)
Network access and long-
distance 330,627 352,299 (21,672) (6.2%)
Miscellaneous 105,533 93,013 12,520 13.5%
629,983 645,525 (15,542) (2.4%)
Operating Expenses
Cost of services and products 193,761 191,932 1,829 1.0%
Selling, general and
administrative expenses 175,392 188,229 (12,837) (6.8%)
Depreciation, amortization and
accretion 133,440 135,370 (1,930) (1.4%)
502,593 515,531 (12,938) (2.5%)
Operating Income $127,390 $129,994 $(2,604) (2.0%)
Competitive Local Exchange Carrier
Operations
Revenues $236,529 $235,804 $725 0.3%
Expenses excluding depreciation,
amortization and accretion 198,695 212,700 (14,005) (6.6%)
Depreciation, amortization and
accretion 24,022 24,242 (220) (0.9%)
222,717 236,942 (14,225) (6.0%)
Operating Income (Loss) $13,812 $(1,138) $14,950 N/M
Intercompany revenues $(6,301) $(5,411) $(890) N/M
Intercompany expenses (6,301) (5,411) (890) N/M
--- --- ---
Total TDS Telecom Operating Income $141,202 $128,856 $12,346 9.6%
N/M - Percentage change not meaningful.
Conference call March 3 at 10:00 a.m. Chicago time. Access the live call on the Conference Calls page of http://www.teldta.com/.
Telephone and Data Systems, Inc.
