Exhibit 99.1
Contact: Mark A. Steinkrauss, Vice President, Corporate Relations
(312) 592-5384 mark.steinkrauss@teldta.com
Julie D. Mathews, Manager, Investor Relations
(312) 592-5341 julie.mathews@teldta.com
FOR RELEASE: IMMEDIATE
TDS REPORTS FIRST QUARTER 2006 RESULTS
CHICAGO — Aug. 25, 2006 — Telephone and Data Systems, Inc. [AMEX:TDS, TDS.S] reported operating revenues of $1,060.3 million for the first quarter of 2006, up 13 percent from $935.8 million, as restated, for the comparable period one year ago. Operating income was $109.1 million, an increase of 38% compared to operating income of $78.8 million, as restated, for the first quarter of 2005. Net income available to common and diluted earnings per share were $39.8 million and $0.34, respectively. In the first quarter of 2005, net income available to common and diluted earnings per share were $23 million and $0.20, respectively, as restated.
First Quarter Highlights
· Total U.S. Cellular customers increased 10 percent year over year to 5,633,000 customers. Retail customers increased 9 percent to 5,029,000.
· U.S. Cellular average monthly revenue per unit increased 4 percent to $46.22.
· U.S. Cellular recorded a postpay churn rate of 1.5 percent.
· TDS Telecom’s access line equivalents (ILEC and CLEC) increased 2 percent to nearly 1.2 million.
· The number of ILEC Digital Subscriber Lines (DSL) increased 53 percent, and the number of CLEC DSL lines grew 22 percent year over year.
· The ILEC’s long distance customers increased 8 percent to 327,100 with long distance penetration reaching 52 percent at March 31, 2006.
· TDS redeemed $35 million of medium-term notes during January and February which carried interest rates of 10%.
TDS will file its Quarterly Report on Form 10-Q (“Form 10-Q”) for the quarter ended March 31, 2006, with the Securities and Exchange Commission (SEC) later today.
On Nov. 10, 2005, TDS announced that it would restate financial results for several prior periods. TDS completed and filed its restatement on April 26, 2006. The time spent completing the restatement caused the company to be late with its other SEC filings.
TDS has not filed its Form 10-Q for the quarter ended June 30, 2006 on a timely basis. As a result, TDS is not in compliance with American Stock Exchange (AMEX) listing standards. TDS
has been granted an extension until Nov. 14, 2006 to regain compliance with AMEX listing standards. TDS will be in full compliance with AMEX listing standards when it files its Form 10-Q for the quarter ended June 30, 2006.
In addition, TDS has received extended waivers from its lenders under credit agreements and from counterparties under certain forward contracts provided that it completes the late filings by certain dates. After the filing of the first quarter 2006 Form 10-Q today, TDS will satisfy the final condition when it files its second quarter 2006 Form 10-Q within 45 days after today’s date. TDS expects to file its Form 10-Q for the quarter ended Sept. 30, 2006 on a timely basis.
Certain financial and statistical information will be posted to the Web site, together with reconciliations to generally accepted accounting principles (GAAP) of certain non-GAAP disclosures. Investors may access this additional information on the Guidance and Reconciliations page of the TDS Web site.
About TDS
TDS is a diversified telecommunications corporation founded in 1969. Through its business units, U.S. Cellular and TDS Telecom, TDS operates primarily by providing wireless, local telephone and broadband services. As of March 31, 2006, the company employed 11,500 people and served 6.8 million customers/units in 36 states.
About U.S. Cellular
As of March 31, 2006, U.S. Cellular Corporation, the nation’s sixth-largest wireless service carrier, provided wireless service to 5.6 million customers in 26 states. The Chicago-based company operates on a customer satisfaction strategy, meeting customer needs by providing a comprehensive range of wireless products and services, superior customer support and a high-quality network.
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 the Chicago MTA and newly launched markets; changes in the overall economy; changes in competition in the markets in which U.S. Cellular and TDS Telecom operate; changes due to industry consolidation; advances in telecommunications technology, including Voice over Internet Protocol; changes to access and pricing of unbundled network elements; changes in the state and federal telecommunications regulatory environment; changes in the value of assets; changes in the value of investments, including variable prepaid forward contracts; an adverse change in the ratings afforded TDS and U.S. Cellular debt securities by accredited ratings organizations; uncertainty of access to the capital markets; possible future restatements; pending and future litigation; acquisitions/ divestitures of properties and/or licenses; and changes in customer growth rates, average monthly revenue per unit, churn rates, roaming rates and the mix of products and services offered in U.S. Cellular and TDS Telecom markets. Investors are encouraged to consider these and other risks and uncertainties that are discussed in the Form 8-K used by TDS to furnish this press release to the SEC, which are incorporated by reference herein.
For more information about TDS or its business units, visit: | |
TDS: www.teldta.com | TDS Telecom: www.tdstelecom.com |
USM: www.uscellular.com | TDS Metrocom: www.tdsmetro.com |
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TELEPHONE AND DATA SYSTEMS, INC.
SUMMARY OPERATING DATA
Quarter Ended | | 3/31/2006 | | 12/31/2005 | | 9/30/2005 | | 6/30/2005 | | 3/31/2005 | |
U.S. Cellular | | | | | | | | | | | |
Consolidated Markets: | | | | | | | | | | | |
Total population (000s) (1) | | 55,164 | | 45,244 | | 44,690 | | 44,690 | | 44,576 | |
All customers - | | | | | | | | | | | |
Customer units | | 5,633,000 | | 5,482,000 | | 5,303,000 | | 5,227,000 | | 5,127,000 | |
Gross customer unit activations | | 434,000 | | 419,000 | | 355,000 | | 340,000 | | 426,000 | |
Net customer unit activations | | 151,000 | | 125,000 | | 76,000 | | 94,000 | | 182,000 | |
Market penetration (1) | | 10.21 | % | 12.12 | % | 11.87 | % | 11.70 | % | 11.50 | % |
Retail customers - | | | | | | | | | | | |
Customer units | | 5,029,000 | | 4,927,000 | | 4,765,000 | | 4,688,000 | | 4,601,000 | |
Gross customer unit activations | | 380,000 | | 392,000 | | 346,000 | | 317,000 | | 365,000 | |
Net customer unit activations | | 122,000 | | 130,000 | | 77,000 | | 81,000 | | 123,000 | |
| | | | | | | | | | | |
Cell sites in service | | 5,438 | | 5,428 | | 5,149 | | 5,034 | | 4,899 | |
Average monthly revenue per unit (2) | | $ | 46.22 | | $ | 45.94 | | $ | 46.19 | | $ | 44.52 | | $ | 44.46 | |
Retail service revenue per unit (2) | | $ | 40.75 | | $ | 40.19 | | $ | 40.25 | | $ | 39.40 | | $ | 39.20 | |
Inbound roaming revenue per unit (2) | | $ | 2.12 | | $ | 2.31 | | $ | 2.70 | | $ | 2.27 | | $ | 1.98 | |
Long-distance/other revenue per unit (2) | | $ | 3.35 | | $ | 3.44 | | $ | 3.24 | | $ | 2.85 | | $ | 3.28 | |
Minutes of use (MOU) (3) | | 658 | | 648 | | 639 | | 627 | | 584 | |
Postpay churn rate per month (4) | | 1.5 | % | 1.6 | % | 1.5 | % | 1.4 | % | 1.5 | % |
Marketing cost per gross customer unit addition (5) | | $ | 412 | | $ | 498 | | $ | 491 | | $ | 461 | | $ | 396 | |
Construction Expenditures (000s) | | $ | 119,800 | | $ | 201,700 | | $ | 128,300 | | $ | 143,800 | | $ | 112,800 | |
(1) Market penetration is calculated using 2005 Claritas population estimates for all periods of 2006 and 2004 Claritas estimates for all periods of 2005. “Total population” represents the total population of each of U.S. Cellular’s consolidated markets, regardless of whether the market has begun marketing operations. The 3/31/06 total population count includes the markets acquired in January 2006 by Carroll Wireless, L.P., a consolidated U.S. Cellular subsidiary, representing the licensed areas for which Carroll Wireless L.P. was the winning bidder in the Federal Communications Commission’s Auction 58 that concluded in February 2005. The 3/31/06 and 12/31/05 total population counts include the the population of the 15 markets acquired from ALLTEL in December 2005, and exclude the population of the two markets transferred to ALLTEL in the same transaction. The 3/31/06, 12/31/05, 9/30/05 and 6/30/05 total population counts include the population of the market acquired from Cingular Wireless in April 2005. The population of markets in which U.S. Cellular has deferred the transfer of licenses from AT&T Wireless (now Cingular Wireless) are not included in the total population counts for any period.
(2) Per unit revenue measurements are derived from Service Revenues as reported in Financial Highlights for each respective quarter as follows:
Service Revenues per Financial Highlights | | $ | 770,082 | | $ | 738,682 | | $ | 729,504 | | $ | 691,746 | | $ | 671,639 | | |
Components: | | | | | | | | | | | | |
Retail service revenue during quarter | | $ | 678,970 | | $ | 646,178 | | $ | 635,610 | | $ | 612,159 | | $ | 592,167 | | |
Inbound roaming revenue during quarter | | $ | 35,344 | | $ | 37,184 | | $ | 42,654 | | $ | 35,313 | | $ | 29,875 | | |
Long-distance/othe revenue during quarter | | $ | 55,768 | | $ | 55,320 | | $ | 51,240 | | $ | 44,274 | | $ | 49,597 | | |
| | | | | | | | | | | | |
Divided by average customers during quarter (000s) | | 5,554 | | 5,360 | | 5,264 | | 5,179 | | 5,035 | | |
Divided by three months in each quarter | | 3 | | 3 | | 3 | | 3 | | 3 | | |
| | | | | | | | | | | | |
Average monthly revenue per unit | | $ | 46.22 | | $ | 45.94 | | $ | 46.19 | | $ | 44.52 | | $ | 44.46 | | |
Retail service revenue per unit | | $ | 40.75 | | $ | 40.19 | | $ | 40.25 | | $ | 39.40 | | $ | 39.20 | | |
Inbound roaming revenue per unit | | $ | 2.12 | | $ | 2.31 | | $ | 2.70 | | $ | 2.27 | | $ | 1.98 | | |
Long-disance/other revenue per unit | | $ | 3.35 | | $ | 3.44 | | $ | 3.24 | | $ | 2.85 | | $ | 3.28 | | |
(3) Average monthly local minutes of use per customer (without roaming).
(4) Postpay churn rate per month is calculated by dividing the average monthly postpay customer disconnects during the quarter by the average postpay customer base for the quarter.
(5) This measurement is not calculable using information from the financial statements as reported. The details of this calculation and a reconciliation to line items reported in Financial Highlights for each respective quarter are shown on U.S. Cellular’s web site, along with additional information related to U.S. Cellular’s first quarter results, at www.uscellular.com.
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