Exhibit 99.2
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 2007 OPERATING RESULTS
CHICAGO — June 19, 2007 — Telephone and Data Systems, Inc. [AMEX:TDS, TDS.S] reported operating revenues of $1,156.6 million for the first quarter of 2007, up 9 percent from $1,059.1 million for the comparable period one year ago. The company recorded operating income of $142.8 million during the quarter compared to $107.2 million. Net income and diluted earnings per share were $219.3 million and $1.85, respectively, compared to net income and diluted earnings per share of $35.9 million and $0.31, respectively, for the comparable period one year ago.
Highlights
TDS expects to file its Form 10-K for the year ended Dec. 31, 2006 and its Form 10-Q for the quarter ended March 31, 2007 with the Securities and Exchange Commission (SEC) later today. With these filings, TDS will be current with all of its filings with the SEC.
· The total number of U.S. Cellular customers increased 6 percent year over year to 5,973,000. The number of retail customers increased 7 percent to 5,377,000.
· U.S. Cellular average monthly revenue per unit (ARPU) increased 5 percent to $48.69.
· U.S. Cellular service revenues grew 12 percent to $860.6 million.
· U.S. Cellular data revenues grew 71 percent to $77.6 million, 9 percent of service revenues.
· TDS Telecom equivalent access lines (ILEC and CLEC) increased 2 percent to 1,219,600.
· TDS Telecom digital subscriber line customers (ILEC and CLEC) increased 41 percent to 160,600.
A company spokesman noted U.S. Cellular had an excellent first quarter with 12 percent revenue growth, strong retail net additions, a 5.5 percent improvement in ARPU and continued low postpay churn of 1.5 percent. U.S. Cellular reported full first quarter operating results on May 15, 2007.
Additionally, the spokesman noted that digital subscriber line customers, at TDS Telecom, were up 41 percent. Growing digital subscriber lines supports TDS Telecom’s objective of positioning itself as the preferred broadband provider in its markets. TDS Telecom has been aggressively bundling DSL with other popular service offerings such as satellite television and long distance services, an effective tactic for building and maintaining a long customer relationship.
Guidance for the year ended Dec. 31, 2007 is as follows. There can be no assurance that final results will not differ materially from this guidance.
U.S. Cellular 2007 guidance as of June 19, 2007 is as follows: | | |
Net Retail Customer Additions | | 375,000 - 425,000 |
Service Revenues | | Approx. $3.5 billion |
Operating Income | | $375 - $425 million |
Depreciation, Amortization & Accretion | | Approx. $615 million |
Capital Expenditures | | $600 - $615 million |
| | |
TDS Telecom (ILEC and CLEC) operations 2007 guidance
as of June 19, 2007 is as follows: | | |
Operating Revenues | | $850 - $900 million |
Operating Income | | $130 - $150 million |
Depreciation and Amortization | | $155 million |
Capital Expenditures | | $110 - $130 million |
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, 2007, the company employed 11,600 people and served 7.2 million customers/units in 36 states.
About U.S. Cellular
As of March 31, 2007, U.S. Cellular Corporation, the nation’s sixth-largest wireless service carrier, employed 8,000 associates and provided wireless service to 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; risks and uncertainties relating to restatements and possible future restatements; ability to remediate material weaknesses; pending and future litigation; acquisitions/ divestitures of properties and/or licenses; and changes in customer growth rates, average monthly revenue per unit, churn rates,
2
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 and its subsidiaries, visit the web sites at:
TDS: www.teldta.com TDS Telecom: www.tdstelecom.com
USM: www.uscellular.com
3
TELEPHONE AND DATA SYSTEMS, INC.
SUMMARY OPERATING DATA
Quarter Ended | | 3/31/2007 | | 12/31/2006 | | 9/30/2006 | | 6/30/2006 | | 3/31/2006 | |
U.S. Cellular | | | | | | | | | | | |
Consolidated Markets: | | | | | | | | | | | |
Total population (000s) (1) | | 56,048 | | 55,543 | | 55,543 | | 55,543 | | 55,164 | |
All customers - | | | | | | | | | | | |
Customer units | | 5,973,000 | | 5,815,000 | | 5,729,000 | | 5,704,000 | | 5,633,000 | |
Gross customer unit activations | | 459,000 | | 389,000 | | 365,000 | | 347,000 | | 434,000 | |
Net customer unit activations | | 152,000 | | 86,000 | | 25,000 | | 48,000 | | 151,000 | |
Market penetration (1) | | 10.7 | % | 10.5 | % | 10.3 | % | 10.3 | % | 10.2 | % |
Retail customers - | | | | | | | | | | | |
Customer units | | 5,377,000 | | 5,225,000 | | 5,127,000 | | 5,099,000 | | 5,029,000 | |
Gross customer unit activations | | 397,000 | | 375,000 | | 353,000 | | 331,000 | | 380,000 | |
Net customer unit activations | | 146,000 | | 98,000 | | 28,000 | | 49,000 | | 122,000 | |
| | | | | | | | | | | |
Cell sites in service | | 6,004 | | 5,925 | | 5,726 | | 5,583 | | 5,438 | |
Average monthly revenue per unit (2) | | $ | 48.69 | | $ | 48.15 | | $ | 47.93 | | $ | 46.54 | | $ | 46.17 | |
Retail service revenue per unit (2) | | $ | 42.69 | | $ | 42.21 | | $ | 41.75 | | $ | 40.92 | | $ | 40.77 | |
Inbound roaming revenue per unit (2) | | $ | 2.33 | | $ | 2.34 | | $ | 2.55 | | $ | 2.28 | | $ | 2.12 | |
Long-distance/other revenue per unit (2) | | $ | 3.67 | | $ | 3.60 | | $ | 3.63 | | $ | 3.34 | | $ | 3.28 | |
Minutes of use (MOU) (3) | | 783 | | 749 | | 725 | | 719 | | 658 | |
Postpay churn rate per month (4) | | 1.5 | % | 1.5 | % | 1.6 | % | 1.5 | % | 1.5 | % |
Marketing cost per gross customer unit addition (5) | | $ | 426 | | $ | 511 | | $ | 496 | | $ | 503 | | $ | 412 | |
Construction Expenditures (000s) | | $ | 109,700 | | $ | 158,400 | | $ | 152,800 | | $ | 151,400 | | $ | 117,200 | |
(1) Market penetration is calculated using 2006 Claritas population estimates for all periods of 2007 and 2005 Claritas estimates for all periods of 2006. “Total population” represents the total population of each of U.S. Cellular’s consolidated markets, regardless of whether the market has begun marketing operations (without duplication of population in overlapping markets). The population of markets in which U.S. Cellular has deferred the transfer of licenses from AT&T Wireless Services, Inc. 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 | | $ | 860,583 | | $ | 831,663 | | $ | 821,820 | | $ | 791,705 | | $ | 769,222 | |
Components: | | | | | | | | | | | |
Retail service revenue during quarter | | $ | 754,515 | | $ | 729,072 | | $ | 715,896 | | $ | 696,079 | | $ | 679,256 | |
Inbound roaming revenue during quarter | | $ | 41,268 | | $ | 40,354 | | $ | 43,806 | | $ | 38,745 | | $ | 35,344 | |
Long-distance/other revenue during quarter | | $ | 64,800 | | $ | 62,237 | | $ | 62,118 | | $ | 56,881 | | $ | 54,622 | |
| | | | | | | | | | | |
Divided by average customers during quarter (000s) | | 5,892 | | 5,757 | | 5,716 | | 5,670 | | 5,554 | |
Divided by three months in each quarter | | 3 | | 3 | | 3 | | 3 | | 3 | |
| | | | | | | | | | | |
Average monthly revenue per unit | | $ | 48.69 | | $ | 48.15 | | $ | 47.93 | | $ | 46.54 | | $ | 46.17 | |
Retail service revenue per unit | | $ | 42.69 | | $ | 42.21 | | $ | 41.75 | | $ | 40.92 | | $ | 40.77 | |
Inbound roaming revenue per unit | | $ | 2.33 | | $ | 2.34 | | $ | 2.55 | | $ | 2.28 | | $ | 2.12 | |
Long-distance/other revenue per unit | | $ | 3.67 | | $ | 3.60 | | $ | 3.63 | | $ | 3.34 | | $ | 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.
4
TELEPHONE AND DATA SYSTEMS, INC.
SUMMARY OPERATING DATA
Quarter Ended | | 3/31/2007 | | 12/31/2006 | | 9/30/2006 | | 6/30/2006 | | 3/31/2006 | |
TDS Telecom | | | | | | | | | | | |
ILEC: | | | | | | | | | | | |
Access line equivalents (1) | | 763,400 | | 757,300 | | 752,100 | | 747,500 | | 742,300 | |
Access lines | | 610,300 | | 616,500 | | 622,700 | | 628,600 | | 632,100 | |
Dial-up Internet service accounts | | 71,100 | | 77,100 | | 82,200 | | 86,800 | | 90,800 | |
Digital Subscriber Lines (DSL) customers | | 118,000 | | 105,100 | | 94,100 | | 84,000 | | 75,300 | |
Long Distance customers | | 343,800 | | 340,000 | | 335,100 | | 331,300 | | 327,100 | |
Construction Expenditures (000s) | | $ | 16,100 | | $ | 39,400 | | $ | 27,000 | | $ | 29,700 | | $ | 17,100 | |
CLEC: | | | | | | | | | | | |
Access line equivalents (1) | | 456,200 | | 456,200 | | 452,900 | | 450,900 | | 449,200 | |
Dial-up Internet service accounts | | 10,200 | | 10,200 | | 11,000 | | 11,800 | | 13,500 | |
Percent of access lines on-switch | | 94.4 | % | 93.0 | % | 92.6 | % | 92.2 | % | 91.7 | % |
Digital Subscriber Lines (DSL) customers | | 42,600 | | 42,100 | | 41,000 | | 39,900 | | 38,500 | |
Construction Expenditures (000s) | | $ | 2,500 | | $ | 5,700 | | $ | 4,500 | | $ | 4,400 | | $ | 2,700 | |
(1) Access line equivalents are derived by converting high capacity data lines to the estimated capacity of one switched access line.
5
