UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

x

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

For the quarterly period ended June 30, 2013

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

OR

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

For the transition period from                                    to                                    

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Commission file number 001-14157

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

TELEPHONE AND DATA SYSTEMS, INC.

(Exact name of Registrant as specified in its charter)

Delaware

 

 

36-2669023

(State or other jurisdiction of incorporation or organization)

 

 

(IRS Employer Identification No.)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

30 North LaSalle Street, Suite 4000, Chicago, Illinois 60602

(Address of principal executive offices) (Zip code)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Registrant’s telephone number, including area code: (312) 630-1900

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Indicate by check mark

Yes

No

•  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.

x

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

•  whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).

x

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

•  whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer or a smaller reporting company.  See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer

x

Accelerated filer

Non-accelerated filer

Smaller reporting company

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

•  whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

x

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Indicate the number of shares outstanding of each of the issuer's classes of common stock, as of the latest practicable date.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Class

 

 

Outstanding at June 30, 2013

Common Shares, $0.01 par value

 

 

101,140,130 Shares

Series A Common Shares, $0.01 par value

 

 

7,148,768 Shares

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 


 

 

 

Telephone and Data Systems, Inc.

 

 

 

 

 

Quarterly Report on Form 10-Q

For the Quarterly Period Ended June 30, 2013

 

 

 

 

 

Index

 

 

 

 

 

 

 

 

 

Page No.

Part I.

Financial Information

 

 

 

 

 

 

 

Item 1.

Financial Statements (Unaudited)

1

 

 

 

 

 

 

 

Consolidated Statement of Operations

1

 

 

 

Three and Six Months Ended June 30, 2013 and 2012

 

 

 

 

 

 

 

 

Consolidated Statement of Comprehensive Income

2

 

 

 

Three and Six Months Ended June 30, 2013 and 2012

 

 

 

 

 

 

 

 

Consolidated Statement of Cash Flows

3

 

 

 

Six Months Ended June 30, 2013 and 2012

 

 

 

 

 

 

 

 

Consolidated Balance Sheet June 30, 2013 and December 31, 2012

4

 

 

 

 

 

 

 

Consolidated Statement of Changes in Equity

6

 

 

 

Six Months Ended June 30, 2013 and 2012

 

 

 

 

 

 

 

 

Notes to Consolidated Financial Statements

8

 

 

 

 

 

 

Item 2.

Management's Discussion and Analysis of Financial Condition and Results of Operations

25

 

 

 

 

 

 

 

Overview

25

 

 

2013 Estimates

29

 

 

Six Months Ended June 30, 2013 and 2012

 

 

 

 

Results of Operations — Consolidated

32

 

 

 

Results of Operations — U.S. Cellular

34

 

 

 

Results of Operations — TDS Telecom

39

 

 

Three Months Ended June 30, 2013 and 2012

 

 

 

 

Results of Operations — Consolidated

44

 

 

 

Results of Operations — U.S. Cellular

46

 

 

 

Results of Operations — TDS Telecom

48

 

 

Recent Accounting Pronouncements

51

 

 

Financial Resources

51

 

 

Liquidity and Capital Resources

53

 

 

Application of Critical Accounting Policies and Estimates

56

 

 

Safe Harbor Cautionary Statement

57

 

 

 

 

 

 

Item 3.

Quantitative and Qualitative Disclosures About Market Risk

60

 

 

 

 

 

 

Item 4.

Controls and Procedures

61

 

 

 

 

 

Part II.

Other Information

 

 

 

 

 

 

 

Item 1.

Legal Proceedings

62

 

 

 

 

 

 

Item 1A.

Risk Factors

62

 

 

 

 

 

 

Item 5.

Other Information

63

 

 

 

 

 

 

Item 6.

Exhibits

64

 

 

 

 

 

Signatures

 

 

 

 


 

 

Part I.  Financial Information

 

 

 

 

 

 

 

 

 

 

 

Item 1.  Financial Statements

 

 

 

 

 

 

 

 

 

 

 

Telephone and Data Systems, Inc.

Consolidated Statement of Operations

(Unaudited)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended

 

Six Months Ended

 

 

 

 

June 30,

 

June 30,

(Dollars and shares in thousands, except per share amounts)

2013

 

2012

 

2013

 

2012

Operating revenues

$

 1,228,166  

 

$

 1,323,169  

 

$

 2,536,739  

 

$

 2,628,960  

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating expenses

 

 

 

 

 

 

 

 

 

 

 

 

Cost of services and products (excluding

  Depreciation, amortization and accretion

  expense reported below)

 

 515,731  

 

 

 527,670  

 

 

 1,075,623  

 

 

 1,036,881  

 

Selling, general and administrative

 

 470,720  

 

 

 502,404  

 

 

 957,623  

 

 

 1,010,003  

 

Depreciation, amortization and accretion

 

 254,203  

 

 

 198,509  

 

 

 496,280  

 

 

 395,943  

 

Loss on impairment of assets

 

 -  

 

 

 515  

 

 

 -  

 

 

 515  

 

Loss on asset disposals, net

 

 8,319  

 

 

 2,995  

 

 

 13,935  

 

 

 5,074  

 

(Gain) loss on sale of business and

  other exit costs, net

 

 (303,034) 

 

 

 -  

 

 

 (296,103) 

 

 

 (4,174) 

 

 

Total operating expenses

 

 945,939  

 

 

 1,232,093  

 

 

 2,247,358  

 

 

 2,444,242  

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating income

 

 282,227  

 

 

 91,076  

 

 

 289,381  

 

 

 184,718  

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Investment and other income (expense)

 

 

 

 

 

 

 

 

 

 

 

 

Equity in earnings of unconsolidated entities

 

 35,605  

 

 

 25,392  

 

 

 62,694  

 

 

 48,781  

 

Interest and dividend income

 

 2,600  

 

 

 2,352  

 

 

 4,178  

 

 

 4,535  

 

Gain (loss) on investments

 

 14,518  

 

 

 (3,728) 

 

 

 14,518  

 

 

 (3,728) 

 

Interest expense

 

 (23,749) 

 

 

 (23,139) 

 

 

 (48,247) 

 

 

 (47,603) 

 

Other, net

 

 (197) 

 

 

 (249) 

 

 

 (351) 

 

 

 (21) 

 

 

Total investment and other income (expense)

 

 28,777  

 

 

 628  

 

 

 32,792  

 

 

 1,964  

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Income before income taxes

 

 311,004  

 

 

 91,704  

 

 

 322,173  

 

 

 186,682  

 

Income tax expense

 

 132,607  

 

 

 35,765  

 

 

 136,787  

 

 

 63,177  

Net income

 

 178,397  

 

 

 55,939  

 

 

 185,386  

 

 

 123,505  

Less: Net income attributable to noncontrolling

  interests, net of tax

 

 (22,320) 

 

 

 (13,602) 

 

 

 (27,890) 

 

 

 (28,914) 

Net income attributable to TDS shareholders

 

 156,077  

 

 

 42,337  

 

 

 157,496  

 

 

 94,591  

TDS Preferred dividend requirement

 

 (12) 

 

 

 (12) 

 

 

 (25) 

 

 

 (25) 

Net income available to common shareholders

$

 156,065  

 

$

 42,325  

 

$

 157,471  

 

$

 94,566  

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic weighted average shares outstanding

 

 108,385  

 

 

 108,732  

 

 

 108,320  

 

 

 108,693  

Basic earnings per share attributable to TDS

  shareholders

$

 1.44  

 

 $  

 0.39  

 

 $  

 1.45  

 

 $  

 0.87  

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Diluted weighted average shares outstanding

 

 108,913  

 

 

 109,022  

 

 

 108,827  

 

 

 108,964  

Diluted earnings per share attributable to TDS

  shareholders

$

 1.42  

 

 $  

 0.39  

 

 $  

 1.44  

 

 $  

 0.86  

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Dividends per share to TDS shareholders

$

 0.1275  

 

$

 0.1225  

 

$

 0.2550  

 

$

 0.2450  

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

The accompanying notes are an integral part of these consolidated financial statements.

1

 


 

 

Telephone and Data Systems, Inc.

Consolidated Statement of Comprehensive Income

(Unaudited)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended

 

Six Months Ended

 

 

 

 

 

June 30,

 

June 30,

(Dollars in thousands)

2013

 

2012

 

2013

 

2012

Net income

$

 178,397  

 

$

 55,939  

 

$

 185,386  

 

$

 123,505  

Net change in accumulated other

  comprehensive income (loss)

 

 

 

 

 

 

 

 

 

 

 

 

Change in net unrealized gain (loss) on equity

  investments

 

 51  

 

 

 49  

 

 

 51  

 

 

 49  

 

Change in foreign currency translation adjustment

 

 -  

 

 

 -  

 

 

 15  

 

 

 -  

 

Change related to retirement plan

 

 

 

 

 

 

 

 .  

 

 

 

 

 

Amounts included in net periodic benefit cost for

  the period

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Amortization of prior service cost

 

 (902) 

 

 

 (934) 

 

 

 (1,804) 

 

 

 (1,868) 

 

 

 

Amortization of unrecognized net loss

 

 602  

 

 

 623  

 

 

 1,204  

 

 

 1,246  

 

 

 

 

 

 

 (300) 

 

 

 (311) 

 

 

 (600) 

 

 

 (622) 

 

 

 

Change in deferred income taxes

 

 114  

 

 

 463  

 

 

228

 

 

933

 

 

Change related to retirement plan, net of tax

 

 (186) 

 

 

 152  

 

 

 (372) 

 

 

 311  

 

Net change in accumulated other comprehensive

  income (loss)

 

 (135) 

 

 

 201  

 

 

 (306) 

 

 

 360  

Comprehensive income

 

 178,262  

 

 

 56,140  

 

 

 185,080  

 

 

 123,865  

 

Less: Comprehensive income attributable to

  noncontrolling interest

 

 (22,320) 

 

 

 (13,602) 

 

 

 (27,890) 

 

 

 (28,914) 

Comprehensive income attributable to

  TDS shareholders

$

 155,942  

 

$

 42,538  

 

$

 157,190  

 

$

 94,951  

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

The accompanying notes are an integral part of these consolidated financial statements.

2

 


 

 

Telephone and Data Systems, Inc.

Consolidated Statement of Cash Flows

(Unaudited)

 

 

 

 

 

Six Months Ended

 

 

 

 

 

June 30,

(Dollars in thousands)

2013

 

2012

Cash flows from operating activities

 

 

 

 

 

 

Net income

$

 185,386  

 

$

 123,505  

 

Add (deduct) adjustments to reconcile net income to net cash flows

  from operating activities

 

 

 

 

 

 

 

 

Depreciation, amortization and accretion

 

 496,280  

 

 

 395,943  

 

 

 

Bad debts expense

 

 35,187  

 

 

 33,626  

 

 

 

Stock-based compensation expense

 

 12,902  

 

 

 20,955  

 

 

 

Deferred income taxes, net

 

 (21,246) 

 

 

 29,929  

 

 

 

Equity in earnings of unconsolidated entities

 

 (62,694) 

 

 

 (48,781) 

 

 

 

Distributions from unconsolidated entities

 

 47,635  

 

 

 6,973  

 

 

 

Loss on impairment of assets

 

 -  

 

 

 515  

 

 

 

Loss on asset disposals, net

 

 13,935  

 

 

 5,074  

 

 

 

(Gain) loss on sale of business and other exit costs, net

 

 (296,103) 

 

 

 (4,174) 

 

 

 

(Gain) loss on investments

 

 (14,518) 

 

 

 3,728  

 

 

 

Noncash interest expense

 

 997  

 

 

 1,728  

 

 

 

Other operating activities

 

 505  

 

 

 1,010  

 

Changes in assets and liabilities from operations

 

 

 

 

 

 

 

 

Accounts receivable

 

 (5,781) 

 

 

 (10,197) 

 

 

 

Inventory

 

 (8,105) 

 

 

 (58,467) 

 

 

 

Accounts payable

 

 58,204  

 

 

 (23,336) 

 

 

 

Customer deposits and deferred revenues

 

 7,897  

 

 

 22,786  

 

 

 

Accrued taxes

 

 150,425  

 

 

 89,433  

 

 

 

Accrued interest

 

 2,172  

 

 

 (1,823) 

 

 

 

Other assets and liabilities

 

 (81,586) 

 

 

 (81,517) 

 

 

 

 

 

 

 521,492  

 

 

 506,910  

 

 

 

 

 

 

 

 

 

 

Cash flows from investing activities

 

 

 

 

 

 

Cash used for additions to property, plant and equipment

 

 (384,281) 

 

 

 (501,211) 

 

Cash paid for acquisitions and licenses

 

 (14,150) 

 

 

 (52,213) 

 

Cash received from divestitures

 

 480,000  

 

 

 50,036  

 

Cash paid for investments

 

 -  

 

 

 (45,000) 

 

Cash received for investments

 

 15,000  

 

 

 128,444  

 

Other investing activities

 

 14,127  

 

 

 (8,916) 

 

 

 

 

 

 

 110,696  

 

 

 (428,860) 

 

 

 

 

 

 

 

 

 

 

Cash flows from financing activities

 

 

 

 

 

 

Repayment of long-term debt

 

 (605) 

 

 

 (952) 

 

Issuance of long-term debt

 

 -  

 

 

 358  

 

TDS Common Shares and Special Common Shares reissued for benefit plans,

  net of tax payments

 

 776  

 

 

 (39) 

 

U.S. Cellular Common Shares reissued for benefit plans, net of tax payments

 

 (2,206) 

 

 

 (2,465) 

 

Repurchase of U.S. Cellular Common Shares

 

 (18,425) 

 

 

 -  

 

Dividends paid to TDS shareholders

 

 (27,598) 

 

 

 (26,610) 

 

U.S. Cellular dividends paid to noncontrolling public shareholders

 

 (75,235) 

 

 

 -  

 

Payment of debt issuance costs

 

 (23) 

 

 

 -  

 

Distributions to noncontrolling interests

 

 (3,292) 

 

 

 (643) 

 

Other financing activities

 

 354  

 

 

 2,790  

 

 

 

 

 

 

 (126,254) 

 

 

 (27,561) 

 

 

 

 

 

 

 

 

 

 

Net increase in cash and cash equivalents

 

 505,934  

 

 

 50,489  

 

 

 

 

 

 

 

 

 

 

Cash and cash equivalents

 

 

 

 

 

 

Beginning of period

 

 740,481  

 

 

 563,275  

 

End of period

$

 1,246,415  

 

$

 613,764  

 

 

 

 

 

 

 

 

 

 

The accompanying notes are an integral part of these consolidated financial statements.

3

 


 

 

Telephone and Data Systems, Inc.

Consolidated Balance Sheet — Assets

(Unaudited)

(Dollars in thousands)

June 30,

2013

 

December 31,

2012

Current assets

 

 

 

 

 

 

Cash and cash equivalents

$

 1,246,415  

 

$

 740,481  

 

Short-term investments

 

 110,352  

 

 

 115,700  

 

Accounts receivable

 

 

 

 

 

 

 

Due from customers and agents, less allowances of $28,368 and $28,152, respectively

 

 353,580  

 

 

 409,720  

 

 

Other, less allowances of $3,030 and $5,263, respectively

 

 132,016  

 

 

 164,608  

 

Inventory

 

 168,700  

 

 

 160,692  

 

Net deferred income tax asset

 

 56,822  

 

 

 43,411  

 

Prepaid expenses

 

 93,383  

 

 

 86,385  

 

Income taxes receivable

 

 9  

 

 

 9,625  

 

Other current assets

 

 32,375  

 

 

 32,815  

 

 

 

 

 

 2,193,652  

 

 

 1,763,437  

 

 

 

 

 

 

 

 

 

Assets held for sale

 

 78,389  

 

 

 163,242  

 

 

 

 

 

 

 

 

 

Investments

 

 

 

 

 

 

Licenses

 

 1,418,832  

 

 

 1,480,039  

 

Goodwill

 

 759,885  

 

 

 797,194  

 

Other intangible assets, net of accumulated amortization of $102,890 and $143,613,

  respectively

 

 52,592  

 

 

 58,522  

 

Investments in unconsolidated entities

 

 312,046  

 

 

 179,921  

 

Long-term investments

 

 40,120  

 

 

 50,305  

 

Other investments

 

 738  

 

 

 824  

 

 

 

 

 

 2,584,213  

 

 

 2,566,805  

Property, plant and equipment

 

 

 

 

 

 

In service and under construction

 

 10,758,765  

 

 

 10,808,499  

 

Less: Accumulated depreciation

 

 6,989,832  

 

 

 6,811,233  

 

 

 

 

 

 3,768,933  

 

 

 3,997,266  

 

 

 

 

 

 

 

 

 

Other assets and deferred charges

 

 129,578  

 

 

 133,150  

 

 

 

 

 

 

 

 

 

Total assets

$

 8,754,765  

 

$

 8,623,900  

 

 

 

 

 

 

 

 

 

The accompanying notes are an integral part of these consolidated financial statements.

 

 

 

 

 

 

 

 

 

4

 


 

 

 

Telephone and Data Systems, Inc.

Consolidated Balance Sheet — Liabilities and Equity

(Unaudited)

(Dollars and shares in thousands)

June 30,

2013

 

December 31,

2012

Current liabilities

 

 

 

 

 

 

Current portion of long-term debt

$

 1,899  

 

$

 1,233  

 

Accounts payable

 

 393,906  

 

 

 377,291  

 

Customer deposits and deferred revenues

 

 228,259  

 

 

 222,345  

 

Accrued interest

 

 8,599  

 

 

 6,565  

 

Accrued taxes

 

 190,836  

 

 

 48,237  

 

Accrued compensation

 

 95,677  

 

 

 134,932  

 

Other current liabilities

 

 114,910  

 

 

 134,005  

 

 

 

 

 

 

 1,034,086  

 

 

 924,608  

 

 

 

 

 

 

 

 

 

 

Liabilities held for sale

 

 559  

 

 

 19,594  

 

 

 

 

 

 

 

 

 

 

Deferred liabilities and credits

 

 

 

 

 

 

Net deferred income tax liability

 

 855,623  

 

 

 862,580  

 

Other deferred liabilities and credits

 

 460,991  

 

 

 438,727  

 

 

 

 

 

 

 

 

 

 

Long-term debt

 

 1,720,642  

 

 

 1,721,571  

 

 

 

 

 

 

 

 

 

 

Commitments and contingencies

 

  -

 

 

  -

 

 

 

 

 

 

 

 

 

 

Noncontrolling interests with redemption features

 

 512  

 

 

 493  

 

 

 

 

 

 

 

 

 

 

Equity

 

 

 

 

 

 

TDS shareholders’ equity

 

 

 

 

 

 

 

Series A Common and Common Shares

 

 

 

 

 

 

 

 

Authorized 290,000 shares (25,000 Series A Common and 265,000 Common Shares)

 

 

 

 

 

 

 

 

Issued 132,694 shares (7,149 Series A Common and 125,545 Common Shares) and 132,672 shares (7,160 Series A Common and 125,512 Common Shares), respectively

 

 

 

 

 

 

 

 

Outstanding 108,289 shares (7,149 Series A Common and 101,140 Common Shares) and 108,031 shares (7,160 Series A Common and 100,871 Common Shares), respectively

 

 

 

 

 

 

 

 

Par Value ($.01 per share) of $1,327 ($72 Series A Common and $1,255 Common Shares) and $1,327 ($72 Series A Common and $1,255 Common Shares), respectively

 

 1,327  

 

 

 1,327  

 

 

Capital in excess of par value

 

 2,299,091  

 

 

 2,304,122  

 

 

Treasury shares at cost:

 

 

 

 

 

 

 

 

24,405 and 24,641 Common Shares, respectively

 

 (738,397) 

 

 

 (750,099) 

 

 

Accumulated other comprehensive loss

 

 (8,438) 

 

 

 (8,132) 

 

 

Retained earnings

 

 2,586,567  

 

 

 2,464,318  

 

 

 

Total TDS shareholders' equity

 

 4,140,150  

 

 

 4,011,536  

 

 

 

 

 

 

 

 

 

 

 

Preferred shares

 

 825  

 

 

 825  

 

Noncontrolling interests

 

 541,377  

 

 

 643,966  

 

 

 

 

 

 

 

 

 

 

 

 

Total equity

 

 4,682,352  

 

 

 4,656,327  

 

 

 

 

 

 

 

 

 

 

Total liabilities and equity

$

 8,754,765  

 

$

 8,623,900  

 

 

 

 

 

 

 

 

 

 

The accompanying notes are an integral part of these consolidated financial statements.

5

 


 

 

Telephone and Data Systems, Inc.

Consolidated Statement of Changes in Equity

(Unaudited)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

TDS Shareholders

 

 

 

 

 

 

 

 

 

(Dollars in thousands)

Series A Common and Common Shares

 

Capital in

Excess of

Par Value

 

Treasury Common Shares

 

Accumulated

Other

Comprehensive

Income (Loss)

 

Retained

Earnings

 

Total TDS

Shareholders'

Equity

 

 

Preferred Shares

 

Non

controlling Interests

 

Total

Equity

December 31, 2012

$

 1,327  

 

$

 2,304,122  

 

$

 (750,099) 

 

$

 (8,132) 

 

$

 2,464,318  

 

$

 4,011,536  

 

$

 825  

 

$

 643,966  

 

$

 4,656,327  

Add (Deduct)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income attributable to TDS

  shareholders

 

 -  

 

 

 -  

 

 

 -  

 

 

 -  

 

 

 157,496  

 

 

 157,496  

 

 

 -  

 

 

 -  

 

 

 157,496  

Net income attributable

  to noncontrolling interests

  classified as equity

 

 -  

 

 

 -  

 

 

 -  

 

 

 -  

 

 

 -  

 

 

 -  

 

 

 -  

 

 

 27,871  

 

 

 27,871  

Net unrealized gain

  (loss) on equity investments

 

 -  

 

 

 -  

 

 

 -  

 

 

 51  

 

 

 -  

 

 

 51  

 

 

 -  

 

 

 -  

 

 

 51  

Change in foreign currency

  translation adjustment

 

 -  

 

 

 -  

 

 

 -  

 

 

 15  

 

 

 -  

 

 

 15  

 

 

 -  

 

 

 -  

 

 

 15  

Change related to retirement

  plan

 

 -  

 

 

 -  

 

 

 -  

 

 

 (372) 

 

 

 -  

 

 

 (372) 

 

 

 -  

 

 

 -  

 

 

 (372) 

TDS Common and Series A

  Common Share dividends

 

 -  

 

 

 -  

 

 

 -  

 

 

 -  

 

 

 (27,573) 

 

 

 (27,573) 

 

 

 -  

 

 

 -  

 

 

 (27,573) 

TDS Preferred dividend

  requirement

 

 -  

 

 

 -  

 

 

 -  

 

 

 -  

 

 

 (25) 

 

 

 (25) 

 

 

 -  

 

 

 -  

 

 

 (25) 

U.S. Cellular dividends paid

  to noncontrolling public

  shareholders

 

 -  

 

 

 -  

 

 

 -  

 

 

 -  

 

 

 -  

 

 

 -  

 

 

 -  

 

 

 (75,235) 

 

 

 (75,235) 

Dividend reinvestment plan

 

 -  

 

 

 448  

 

 

 7,914  

 

 

 -  

 

 

 (4,540) 

 

 

 3,822  

 

 

 -  

 

 

 -  

 

 

 3,822  

Incentive and compensation

  plans

 

 -  

 

 

 533  

 

 

 3,788  

 

 

 -  

 

 

 (3,109) 

 

 

 1,212  

 

 

 -  

 

 

 -  

 

 

 1,212  

Adjust investment in

  subsidiaries for repurchases,

  issuances and other compensation

  plans

 

 -  

 

 

 (1,166) 

 

 

 -  

 

 

 -  

 

 

 -  

 

 

 (1,166) 

 

 

 -  

 

 

 (13,457) 

 

 

 (14,623) 

Stock-based compensation

  awards

 

 -  

 

 

 6,124  

 

 

 -  

 

 

 -  

 

 

 -  

 

 

 6,124  

 

 

 -  

 

 

 -  

 

 

 6,124  

Tax windfall (shortfall) from

  stock awards

 

 -  

 

 

 (648) 

 

 

 -  

 

 

 -  

 

 

 -  

 

 

 (648) 

 

 

 -  

 

 

 -  

 

 

 (648) 

Distributions to

  noncontrolling interests

 

 -  

 

 

 -  

 

 

 -  

 

 

 -  

 

 

 -  

 

 

 -  

 

 

 -  

 

 

 (3,292) 

 

 

 (3,292) 

Adjust investment in subsidiaries

  for noncontrolling interest

  purchases

 

 

 

 

 (10,322) 

 

 

 -  

 

 

 -  

 

 

 -  

 

 

 (10,322) 

 

 

 -  

 

 

 5,294  

 

 

 (5,028) 

Deconsolidation of partnerships

 

 -  

 

 

 -  

 

 

 -  

 

 

 -  

 

 

 -  

 

 

 -  

 

 

 -  

 

 

 (43,770) 

 

 

 (43,770) 

June 30, 2013

$

 1,327  

 

$

 2,299,091  

 

$

 (738,397) 

 

$

 (8,438) 

 

$

 2,586,567  

 

$

 4,140,150  

 

$

 825  

 

$

 541,377  

 

$

 4,682,352  

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

The accompanying notes are an integral part of these consolidated financial statements.

6

 


 

 

 

Telephone and Data Systems, Inc.

Consolidated Statement of Changes in Equity

(Unaudited)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

TDS Shareholders

 

 

 

 

 

 

 

 

 

(Dollars in thousands)

Series A Common and Common Shares

 

Capital in

Excess of

Par Value

 

Treasury Common Shares

 

Accumulated

Other

Comprehensive

 Income (Loss)

 

Retained

Earnings

 

Total TDS

Shareholders'

Equity

 

 

Preferred Shares

 

Non

controlling

Interests

 

Total

Equity

December 31, 2011

$

 1,326  

 

$

 2,268,711  

 

$

 (750,921) 

 

$

 (8,854) 

 

$

 2,451,899  

 

$

 3,962,161  

 

$

 830  

 

$

 639,688  

 

$

 4,602,679  

Add (Deduct)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income attributable to TDS

  shareholders

 

 -  

 

 

 -  

 

 

 -  

 

 

 -  

 

 

 94,591  

 

 

 94,591  

 

 

 -  

 

 

 -  

 

 

 94,591  

Net income attributable to

  noncontrolling interests

  classified as equity

 

 -  

 

 

 -  

 

 

 -  

 

 

 -  

 

 

 -  

 

 

 -  

 

 

 -  

 

 

 28,869  

 

 

 28,869  

Net unrealized gain 

  (loss) on equity investments

 

 -  

 

 

 -  

 

 

 -  

 

 

 49  

 

 

 -  

 

 

 49  

 

 

 -  

 

 

 -  

 

 

 49  

Change related to retirement

  plan

 

 -  

 

 

 -  

 

 

 -  

 

 

 311  

 

 

 -  

 

 

 311  

 

 

 -  

 

 

 -  

 

 

 311  

TDS Common and Series A

  Common Share dividends

 

 -  

 

 

 -  

 

 

 -  

 

 

 -  

 

 

 (26,585) 

 

 

 (26,585) 

 

 

 -  

 

 

 -  

 

 

 (26,585) 

TDS Preferred dividend

  requirement

 

 -  

 

 

 -  

 

 

 -  

 

 

 -  

 

 

 (25) 

 

 

 (25) 

 

 

 -  

 

 

 -  

 

 

 (25) 

Dividend reinvestment plan

 

 -  

 

 

 581  

 

 

 6,764  

 

 

 -