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TDS Reports First Quarter 2012 Results

Date : 05/04/2012 @ 8:01AM
Source : PR Newswire (US)
Stock : Telephone & Data Systems, Inc. (TDS)
Quote : 24.65  0.18 (0.74%) @ 4:13PM
Telephone & Data Systems, Inc. share price Chart

TDS Reports First Quarter 2012 Results

Telephone & Data Systems, Inc. (NYSE:TDS)
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CHICAGO, May 4, 2012 /PRNewswire/ --

Note: Comparisons are year over year unless otherwise noted.

1Q 2012 Highlights

TDS Consolidated

  • Operating revenues increased 4 percent to $1,305.8 million.
  • Operating income increased 5 percent to $93.6 million.

U.S. Cellular

  • Smartphones as a percent of total devices sold increased to 54.1 percent from 42.5 percent; smartphone customers increased to 34.4 percent of postpaid customers from 20.3 percent.
  • Postpaid ARPU (average revenue per customer) increased 5 percent to $54.00 from $51.21.
  • Service revenues increased 4 percent to $1,023.8 million.
  • Operating income increased 45 percent to $85.2 million.
  • Retail gross additions increased 7 percent to 273,000 from 256,000.
  • Postpaid churn increased to 1.6 percent from 1.4 percent.
  • Net loss of 34,000 retail customers, reflecting loss of 38,000 postpaid customers and gain of 4,000 prepaid customers; postpaid customers comprised 94 percent of retail customers.
  • Cell sites in service increased 3 percent to 7,875.

TDS Telecom

  • Operating revenues increased 3 percent to $204.1 million.
  • ILEC triple play penetration increased to 30 percent from 26 percent.
  • managedIP connections (ILEC and CLEC) grew 88 percent to 64,500 from 34,400.

As previously announced, TDS will hold a teleconference May 4, 2012 at 9:30 a.m. CDT. Interested parties may listen to the call live by accessing the Investor Relations page of www.teldta.com.

Telephone and Data Systems, Inc. (NYSE: TDS) reported operating revenues of $1,305.8 million for the first quarter of 2012, an increase of 4 percent from $1,258.7 million in the comparable period one year ago. Net income attributable to TDS shareholders and related diluted earnings per share were $52.3 million and $0.48, respectively, for the first quarter of 2012, compared to $43.5 million and $0.39, respectively, in the comparable period one year ago.

"Improved profitability at U.S. Cellular helped TDS' performance in the quarter," said LeRoy T. Carlson, Jr., TDS president and CEO. "U.S. Cellular increased retail gross customer additions and revenues, while effectively managing costs. TDS Telecom continued to increase residential broadband speeds and grow the customer base for its managedIP commercial services."

"U.S. Cellular continues to increase average revenue per customer through growth in smartphone penetration and data use, as well as inbound roaming revenues. To effectively manage equipment and network costs, the company has maintained a balanced mix of devices, and recently introduced a set of tiered data plans. U.S. Cellular plans to reach 50 percent of customers with 4G LTE access by year end.

"TDS Telecom is focused on attracting and retaining customers by offering competitive broadband speeds and complementary services. The company launched TDS TV, its proprietary IPTV service, in one more market in the quarter. TDS Telecom also increased the number of managedIP connections by 88 percent, as more business customers understood the productivity benefits of IP-based communication. To help the hosted and managed services business grow strategically over the next several years, the company is investing to build its management team and develop its portfolio of products and services.  Operating income at TDS Telecom decreased due primarily to $5.2 million of discrete gains in the first quarter of 2011, as well as a decline in high margin wholesale revenues."

Guidance for year ending Dec. 31, 2012

Guidance for the year ending Dec. 31, 2012, as of May 4, 2012, is unchanged from the previous guidance provided on Feb. 24, 2012.  TDS undertakes no duty to update such information, whether as a result of new information, future events, or otherwise.  There can be no assurance that final results will not differ materially from this guidance. 





2012 Estimated Results (1)

U.S. Cellular



Service revenues

$4,050-$4,150 million



Operating income

$200-$300 million



Depreciation, amortization and accretion expenses, 





  and net gain or loss on asset disposals and exchanges





  and loss on impairment of assets (2)

Approx. $600 million



Adjusted OIBDA (2) (4)

$800-$900 million



Capital expenditures

Approx. $850 million











2012 Estimated Results (3)

TDS Telecom Operations





Operating revenues

$810-$840 million



Operating income

$55-$85 million



Depreciation, amortization and accretion expenses,





  and net gain or loss on asset disposals and exchanges





  and loss on impairment of assets (2)

Approx. $190 million



Adjusted OIBDA (4)

$245-$275 million



Capital expenditures

$150-$180 million





(1)

These estimates are based on U.S. Cellular's current plans, which include a multi-year deployment of 4G LTE technology which commenced in 2011.  New developments or changing conditions (such as customer net growth, customer demand for data services or possible acquisitions, dispositions or exchanges) could affect U.S. Cellular's plans and, therefore, its 2012 estimated results. 

(2)

The 2012 Estimated Results do not include any estimate for unrecognized net gains or losses related to disposals and exchanges of assets or losses on impairment of assets (since such transactions and their effects are uncertain).

(3)

These estimates are based on TDS Telecom's current plans which include a multi-year deployment of IPTV that commenced in 2011.  New developments or changing conditions (such as costs to deploy, agreements for content or franchises) could affect TDS Telecom's plans and, therefore, its 2012 estimated results.

(4)

Adjusted OIBDA is defined as operating income excluding the effects of depreciation, amortization and accretion (OIBDA): the net gain or loss on asset disposals and exchanges (if any); and the loss on impairment of assets (if any). This measure also may be commonly referred to by management as operating cash flow. This measure should not be confused with Cash flows from operating activities, which is a component of the Consolidated Statement of Cash Flows.  Adjusted OIBDA excludes the net gain or loss on asset disposals and exchanges (if any) and loss on impairment of assets (if any) in order to show operating results on a more comparable basis from period to period.  TDS does not intend to imply that any of such amounts that are excluded are non-recurring, infrequent or unusual and, accordingly, they may be incurred in the future.  TDS believes this measure provides useful information to investors regarding TDS' financial condition and results of operations because it highlights certain key cash and non-cash items and their impacts on cash flows from operating activities.

Stock repurchase

TDS did not repurchase any shares during the quarter.  TDS determines whether to repurchase shares from time to time based on many considerations, including cash needed for other known or possible requirements, the stock price, market conditions, debt rating considerations, business forecasts, business plans, macroeconomic conditions, share issuances under compensation plans, provisions in governing and legal documents and other legal requirements, and other facts and circumstances.  Subject to these considerations, TDS intends to continue to repurchase its shares from time to time when circumstances warrant.  To the extent TDS does not complete its existing share authorization by the expiration date in November 2012, it is expected that the TDS board of directors will approve an additional authorization at that time.   

Conference call information

TDS will hold a conference call on May 4, 2012 at 9:30 a.m. CDT.

  • Access the live call on the Investor Relations page of www.teldta.com or at http://www.videonewswire.com/event.asp?id=86868.
  • Access the call by phone at 877/407-8029 (US/Canada), no pass code required.

Before the call, certain financial and statistical information to be discussed during the call will be posted to the Investor Relations page of www.teldta.com. The call will be archived on the Conference Calls page of www.teldta.com.

About TDS

Telephone and Data Systems, Inc. (TDS), a Fortune 500® company, provides wireless, local and long-distance telephone, and broadband services to approximately 7 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 12,300 people as of March 31, 2012.

Visit www.teldta.com for comprehensive financial information, including earnings releases, quarterly and annual filings, shareholder information and more.

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 the company to successfully manage and grow its markets; the overall economy; competition; the access to and pricing of unbundled network elements; the ability to obtain or maintain roaming arrangements with other carriers; the state and federal telecommunications regulatory environment; the value of assets and investments; adverse changes in the ratings afforded TDS and U.S. Cellular debt securities by accredited ratings organizations; industry consolidation; advances in telecommunications technology; uncertainty of access to the capital markets; pending and future litigation; changes in income tax rates, laws, regulations or rulings; acquisitions/divestitures of properties and/or licenses; changes in customer growth rates, average monthly revenue per customer, churn rates, roaming revenue and terms, the availability of handset 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 Current Report used by TDS to furnish this press release to the Securities and Exchange Commission ("SEC"), which are incorporated by reference herein.

For more information about TDS and its subsidiaries, visit:

TDS: www.teldta.com

U.S. Cellular: www.uscellular.com

TDS Telecom: www.tdstelecom.com

 

 United States Cellular Corporation

 Summary Operating Data (Unaudited)

































 Quarter Ended



3/31/2012





12/31/2011





9/30/2011





6/30/2011





3/31/2011

 Total population































Consolidated markets (1)



92,684,000





91,965,000





91,965,000





91,204,000





91,090,000



Consolidated operating markets (1)



46,966,000





46,888,000





46,888,000





46,888,000





46,774,000

 Market penetration at end of period































Consolidated markets (2)



6.3%





6.4%





6.5%





6.5%





6.6%



Consolidated operating markets (2)



12.4%





12.6%





12.7%





12.7%





12.9%

 All customers































Total at end of period



5,837,000





5,891,000





5,932,000





5,968,000





6,033,000



Gross additions



285,000





306,000





299,000





257,000





293,000



Net additions (losses)



(49,000)





(41,000)





(36,000)





(70,000)





(39,000)



Smartphones sold as a percent of































      total devices sold (3)



54.1%





52.5%





39.9%





39.6%





42.5%

 Retail customers































Total at end of period



5,570,000





5,608,000





5,621,000





5,644,000





5,698,000



Smartphone penetration (3) (4)



34.4%





30.5%





26.2%





23.1%





20.3%



Gross additions



273,000





298,000





284,000





226,000





256,000



Net retail additions (losses) (5)



(34,000)





(13,000)





(23,000)





(58,000)





(31,000)



      Net postpaid additions (losses)



(38,000)





(20,000)





(34,000)





(41,000)





(22,000)



      Net prepaid additions (losses)



4,000





7,000





11,000





(17,000)





(9,000)

 Service revenue components (000s)































Retail service

$

888,527



$

882,091



$

871,199



$

868,630



$

864,602



Inbound roaming



80,132





93,353





107,810





82,760





64,386



Other



55,161





54,601





57,600





50,640





56,125

 Total service revenues (000s)

$

1,023,820



$

1,030,045



$

1,036,609



$

1,002,030



$

985,113

 Total ARPU (6)



58.21



$

58.13



$

58.09



$

55.69



$

54.29

 Billed ARPU (7)



50.52



$

49.78



$

48.82



$

48.27



$

47.65

 Postpaid ARPU (8)

$

54.00



$

53.35



$

52.41



$

51.84



$

51.21

 Postpaid churn rate (9)



1.6%





1.6%





1.5%





1.4%





1.4%

 Capital expenditures (000s)

$

201,300



$

276,400



$

248,000



$

162,100



$

95,900

 Cell sites in service



7,875





7,882





7,828





7,770





7,663





(1)

Used only to calculate market penetration of consolidated markets and consolidated operating markets, respectively. See footnote (2) below.

(2)

Market Penetration is 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)

Smartphones represent wireless devices which run on an Android™, BlackBerry®, or Windows Mobile® operating system, excluding tablets.

(4)

Smartphone penetration is calculated by dividing postpaid smartphone customers by total postpaid customers.

(5)

Includes net postpaid additions (losses) and net prepaid additions (losses).

(6)

Total ARPU - Average monthly service revenue per customer includes retail service, inbound roaming and other service revenues and is calculated by dividing total service revenues by the number of months in the period and by the average total customers during the period.

(7)

Billed ARPU - Average monthly billed revenue per customer is calculated by dividing total retail service revenues by the number of months in the period and by the average total customers during the period. Retail service revenues include revenues attributable to postpaid, prepaid and reseller customers.

(8)

Postpaid ARPU - Average monthly revenue per postpaid customer is calculated by dividing total retail service revenues from postpaid customers by the number of months in the period and by the average postpaid customers during the period.

(9)

Represents the percentage of the postpaid customer base that disconnects service each month. This amount represents the average postpaid churn rate for each respective quarterly period.

















TDS Telecom





Summary Operating Data (Unaudited)





































Quarter Ended



3/31/2012





12/31/2011





9/30/2011





6/30/2011





3/31/2011

TDS Telecom





























ILEC:

































Residential Connections



































Physical access lines (1)



363,500





367,600





373,700





378,500





382,400







Broadband connections (2)



219,500





219,600





220,500





217,600





214,100







IPTV customers



4,900





4,600





4,500





4,300





4,000







   ILEC Residential Connections



587,900





591,800





598,700





600,400





600,500









































Commercial Connections



































Physical access lines (1)



112,600





114,400





116,500





117,800





118,800







Broadband connections (2)



18,200





18,200





17,900





17,600





17,300







managedIP connections (3)



10,800





8,600





6,800





5,800





4,700







   ILEC Commercial Connections



141,600





141,200





141,200





141,200





140,800





































CLEC:

































Residential Connections



































Physical access lines (1)



29,600





31,800





33,900





36,700





39,300







Broadband connections (2)



10,100





11,000





11,700





12,800





13,700







   CLEC Residential Connections



39,700





42,800





45,600





49,500





53,000









































Commercial Connections



































Physical access lines (1)



151,100





157,300





163,600





168,100





171,000







Broadband connections (2)



13,700





14,600





15,400





15,900





16,200







managedIP connections (3)



53,700





44,900





38,000





33,200





29,700







   CLEC Commercial Connections



218,500





216,800





217,000





217,200





216,900





































Total ILEC and CLEC customer connections



987,700





992,600





1,002,500





1,008,300





1,011,200





(1)

Individual circuits connecting customers to a telephone company's central office facilities.

(2)

The number of customers provided high-capacity data circuits via various technologies, including DSL and dedicated Internet circuit technologies.

(3)

The number of telephone handsets, data lines and IP trunks providing communications using IP networking technology.

















TDS Telecom





Capital Expenditures (000s)





































Quarter Ended



3/31/2012





12/31/2011





9/30/2011





6/30/2011





3/31/2011

ILEC

$

27,500



$

50,300



$

36,500



$

34,500



$

20,500

CLEC



5,100





7,200





4,700





6,200





4,200

HMS



3,100





5,900





15,000





4,600





1,600









$

35,700



$

63,400



$

56,200



$

45,300



$

26,300









Telephone and Data Systems, Inc.

Consolidated Statement of Operations Highlights



Three Months Ended March 31,



(Unaudited, dollars and shares in thousands, except per share amounts)

































































 Increase/ (Decrease)











2012





2011





Amount





Percent



Operating revenues

































U.S. Cellular

$

1,092,121





$

1,057,092





$

35,029







3%





TDS Telecom



204,075







198,916







5,159







3%





All Other (1)



9,595







2,673







6,922







>100%













1,305,791







1,258,681







47,110







4%



Operating expenses

































U.S. Cellular



































Expenses excluding depreciation,

amortization and accretion



862,444







853,967







8,477







1%







Depreciation, amortization and accretion



146,685







143,340







3,345







2%







(Gain) loss on asset disposals and exchanges, net



(2,210)







1,037







(3,247)







>(100%)













1,006,919







998,344







8,575







1%





TDS Telecom



































Expenses excluding depreciation, amortization and accretion



143,420







121,769







21,651







18%







Depreciation, amortization and accretion



47,443







44,837







2,606







6%







(Gain) loss on asset disposals, net



120







104







16







15%













190,983







166,710







24,273







15%





All Other (1)



































Expenses excluding depreciation and amortization



10,946







2,116







8,830







>100%







Depreciation and amortization



3,306







2,636







670







25%







(Gain) loss on asset disposals, net



(5)







2







(7)







>(100%)













14,247







4,754







9,493







>100%















































Total operating expenses



1,212,149







1,169,808







42,341







4%



Operating income (loss)

































U.S. Cellular



85,202







58,748







26,454







45%





TDS Telecom



13,092







32,206







(19,114)







(59%)





All Other  (1)



(4,652)







(2,081)







(2,571)







>(100%)













93,642







88,873







4,769







5%



Investment and other income (expense)

































Equity in earnings of unconsolidated entities



23,389







19,388







4,001







21%





Interest and dividend income



2,183







2,624







(441)







(17%)





Interest expense



(24,464)







(26,509)







2,045







8%





Other, net



228







80







148







>100%







Total investment and other income (expense)



1,336







(4,417)







5,753







>100%



Income before income taxes



94,978







84,456







10,522







12%





Income tax expense



27,412







30,159







(2,747)







(9%)



Net income



67,566







54,297







13,269







24%





Less: Net income attributable to noncontrolling interests, net of tax



(15,312)







(10,793)







(4,519)







(42%)



Net income attributable to TDS shareholders



52,254







43,504







8,750







20%





Preferred dividend requirement



(12)







(12)







-







-



Net income available to common shareholders

$

52,242





$

43,492





$

8,750







20%









































Basic weighted average shares outstanding (2)



108,653







108,936







(283)







-



Basic earnings per share attributable to TDS shareholders (2)

$

0.48





$

0.40





$

0.08







20%









































Diluted weighted average shares outstanding (2)



109,098







109,715







(617)







(1%)



Diluted earnings per share attributable to TDS shareholders (2)

$

0.48





$

0.39





$

0.09







23%







(1)

Consists of Suttle Straus printing and distribution operations, Airadigm, corporate operations and intercompany eliminations.

(2)

On January 13, 2012, TDS shareholders approved a Share Consolidation Amendment to the Restated Certificate of Incorporation of TDS. Average basic and diluted shares outstanding used to calculate earnings per share for the comparative period presented have been retroactively restated to reflect the impact of the increased shares outstanding as a result of the Share Consolidation Amendment.



N/M – Percentage change not meaningful





Telephone and Data Systems, Inc.

Consolidated Balance Sheet Highlights

(Unaudited, dollars in thousands)

















ASSETS







































March 31,



December 31,







2012



2011

Current assets













Cash and cash equivalents

$

639,130



$

563,275



Short-term investments



229,975





246,273



Accounts receivable from customers and others



495,409





542,577



Inventory



134,929





130,044



Net deferred income tax asset



40,898





40,898



Prepaid expenses



84,201





80,628



Income taxes receivable



9,314





85,636



Other current assets



18,117





16,349









1,651,973





1,705,680

















Assets held for sale



-





49,647

















Investments













Licenses



1,505,110





1,494,014



Goodwill



796,819





797,077



Other intangible assets, net



47,851





50,734



Investments in unconsolidated entities



191,644





173,710



Long-term investments



50,333





45,138



Other investments



1,096





3,072









2,592,853





2,563,745

















Property, plant and equipment, net













U.S. Cellular



2,847,426





2,790,302



TDS Telecom



930,085





936,757



Other



46,222





57,476









3,823,733





3,784,535

















Other assets and deferred charges



104,109





97,398

















Total assets

$

8,172,668



$

8,201,005









Telephone and Data Systems, Inc.

Consolidated Balance Sheet Highlights



(Unaudited, dollars in thousands)

























LIABILITIES AND EQUITY























































March 31,





December 31,











2012





2011

























Current liabilities

















Current portion of long-term debt

$

1,420





$

1,509





Accounts payable



327,376







364,746





Customer deposits and deferred revenues



218,316







207,633





Accrued interest



16,518







7,456





Accrued taxes



46,671







41,069





Accrued compensation



54,990







107,719





Other current liabilities



94,536







144,001













759,827







874,133

























Liabilities held for sale



-







1,051

























Deferred liabilities and credits

















Net deferred income tax liability



821,115







808,713





Other deferred liabilities and credits



391,397







383,567

























Long-term debt



1,529,988







1,529,857

























Noncontrolling interests with redemption features



1,064







1,005

























Equity

















TDS shareholders' equity



















Series A Common and Common Shares, par value $.01 (1)



1,326







1,326







Capital in excess of par value (1)



2,278,384







2,268,711







Treasury shares at cost (1)



(746,988)







(750,921)







Accumulated other comprehensive loss



(8,695)







(8,854)







Retained earnings (1)



2,487,936







2,451,899









Total TDS shareholders' equity



4,011,963







3,962,161



























Preferred shares



830







830





Noncontrolling interests



656,484







639,688





























Total equity



4,669,277







4,602,679

























Total liabilities and equity

$

8,172,668





$

8,201,005







(1)

The December 31, 2011 amounts reflect the impact of the Share Consolidation Amendment to the Restated Certificate of Incorporation of TDS, as approved by the TDS shareholders on January 13, 2012.





Balance Sheet Highlights

March 31, 2012

(Unaudited, dollars in thousands)











































































U.S.



TDS



TDS Corporate



Intercompany



TDS







Cellular



Telecom



& Other



Eliminations



Consolidated

Cash and cash equivalents

$

511,078



$

66,080



$

61,972



$

-



$

639,130

Affiliated cash investments



-





345,458





-





(345,458)





-

Short-term investments



116,368





27,195





86,412





-





229,975





$

627,446



$

438,733



$

148,384



$

(345,458)



$

869,105



































Licenses, goodwill and other intangible assets

$

1,976,825



$

550,970



$

(178,015)



$

-



$

2,349,780

Investment in unconsolidated entities



154,431





3,813





39,049





(5,649)





191,644

Long-term and other investments



40,357





1,014





10,058





-





51,429







$

2,171,613



$

555,797



$

(128,908)



$

(5,649)



$

2,592,853





































































Property, plant and equipment, net

$

2,847,426



$

930,085



$

46,222



$

-



$

3,823,733



































Long-term debt:































Current portion

$

127



$

190



$

1,103



$

-



$

1,420



Non-current portion



880,486





1,733





647,769





-





1,529,988





Total

$

880,613



$

1,923



$

648,872



$

-



$

1,531,408



































Preferred shares

$

-



$

-



$

830



$

-



$

830





Telephone and Data Systems, Inc.

Schedule of Cash and Cash Equivalents and Investments

(Unaudited, dollars in thousands)

 

The following table presents TDS' cash and cash equivalents and investments at March 31, 2012 and December 31, 2011.



























March 31,



December 31,







2012



2011























Cash and cash equivalents



$

639,130



$

563,275



Amounts included in short-term investments (1) (2)

















Government-backed securities (3)







202,780





218,829





Certificates of deposit







27,195





27,444











$

229,975



$

246,273























Amounts included in long-term investments (1) (4)

















Government-backed securities (3)





$

50,333



$

45,138





(1)

Designated as held-to-maturity investments and recorded at amortized cost in the Consolidated Balance Sheet.

(2)

Maturities are less than twelve months from the respective balance sheet dates.

(3)

Includes U.S. treasuries and corporate notes guaranteed under the Federal Deposit Insurance Corporation's Temporary Liquidity Guarantee Program.

(4)

At March 31, 2012, maturities range between 14 and 24 months.





Telephone and Data Systems, Inc.

Consolidated Statement of Cash Flows

Three Months Ended March 31,

(Unaudited, dollars in thousands)



























2012



2011

Cash flows from operating activities













Net income

$

67,566



$

54,297





Add (deduct) adjustments to reconcile net income to net

















cash flows from operating activities



















Depreciation, amortization and accretion



197,434





190,813









Bad debts expense



15,105





14,285









Stock-based compensation expense



10,330





9,459









Deferred income taxes, net



6,187





47,841









Equity in earnings of unconsolidated entities



(23,389)





(19,388)









Distributions from unconsolidated entities



2,938





8,439









(Gain) loss on asset disposals, net



(2,095)





1,143









Noncash interest expense



862





875









Other operating activities



852





1,159





Changes in assets and liabilities from operations



















Accounts receivable



38,941





8,438









Inventory



(4,842)





2,978









Accounts payable



(25,372)





56,189









Customer deposits and deferred revenues



10,745





10,342









Accrued taxes



82,014





18,832









Accrued interest



9,117





15,072









Other assets and liabilities



(104,148)





(87,732)













282,245





333,042





















Cash flows from investing activities













Cash used for additions to property, plant and equipment



(242,611)





(157,897)



Cash paid for acquisitions and licenses



(11,096)





-



Cash received from divestitures



50,036





-



Cash paid for investments



(10,000)





-



Cash received for investments



20,249





122,785



Transfer of cash to Restricted cash



-





(282,500)



Other investing activities



(436)





(1,503)













(193,858)





(319,115)





















Cash flows from financing activities













Repayment of long-term debt



(493)





(402)



Issuance of long-term debt



358





300,000



TDS Common Shares and Special Common Shares















reissued for benefit plans, net of tax payments



(33)





587



U.S. Cellular Common Shares reissued for benefit















plans, net of tax payments



357





1,305



Repurchase of TDS Common and Special Common Shares



-





(11,603)



Repurchase of U.S. Cellular Common Shares



-





(17,357)



Dividends paid



(13,301)





(12,197)



Payment of debt issuance costs



-





(9,848)



Distributions to noncontrolling interests



(218)





(686)



Other financing activities



798





968













(12,532)





250,767





















Net increase in cash and cash equivalents



75,855





264,694

Cash and cash equivalents













Beginning of period



563,275





341,683



End of period

$

639,130



$

606,377





TDS Telecom Highlights

Three Months Ended March 31,

(Unaudited, dollars in thousands)



























































Increase (Decrease)









2012





2011





Amount



Percent

Local Telephone Operations





























Operating revenues































Residential

$

69,399





$

69,713





$

(314)





-





Commercial



24,130







25,371







(1,241)





(5%)





Wholesale



51,536







54,490







(2,954)





(5%)











145,065







149,574







(4,509)





(3%)



Operating expenses































Cost of services and products



49,168







45,402







3,766





8%





Selling, general and administrative expenses



41,514







35,482







6,032





17%





Depreciation, amortization and accretion



37,778







37,200







578





2%





Loss on asset disposals, net



66







41







25





61%











128,526







118,125







10,401





9%





































Operating income

$

16,539





$

31,449





$

(14,910)





(47%)



































Competitive Local Exchange Carrier Operations





























Operating revenues































Residential

$

4,788





$

6,497





$

(1,709)





(26%)





Commercial



34,341







34,017







324





1%





Wholesale



4,915







4,814







101





2%











44,044







45,328







(1,284)





(3%)



Operating expenses































Cost of services and products



22,564







22,472







92





-





Selling, general and administrative expenses



16,260







15,648







612





4%





Depreciation, amortization and accretion



5,489







5,490







(1)





-





Loss on asset disposals, net



53







31







22





71%











44,366







43,641







725





2%





































Operating income (loss)

$

(322)





$

1,687





$

(2,009)





>(100)%



































Hosted and Managed Services Operations































Revenues

$

17,558





$

6,242





$

11,316





>100%



Operating expenses































Cost of services and products



9,774







2,282







7,492





>100%





Selling, general and administrative expenses



6,732







2,711







4,021





>100%





Depreciation, amortization and accretion



4,176







2,147







2,029





95%





Loss on asset disposals, net



1







32







(31)





(97%)











20,683







7,172







13,511





>100%





































Operating loss

$

(3,125)





$

(930)





$

(2,195)





>(100)%