Exhibit 99.1
As previously announced, TDS will hold a teleconference Aug. 7, 2007, at 10:00 a.m. Chicago time. Interested parties may listen to the call live over the Internet by accessing the conference call page of the Investor Relations section of www.teldta.com.
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 SECOND-QUARTER 2007 OPERATING RESULTS;
STRONG WIRELESS RESULTS
CHICAGO – Aug. 7, 2007 – Telephone and Data Systems, Inc. [AMEX:TDS, TDS.S] reported operating revenues of $1,192.8 million for the second quarter of 2007, up 12 percent from $1,068.7 million for the comparable period one year ago. The company recorded operating income of $154 million, up 43.5 percent compared to $107.3 million for the second quarter of 2006. Net loss available to common and diluted loss per share were $8.6 million and $.08, respectively, compared to net income and diluted earnings per share of $166.7 million and $1.43, respectively, for the comparable period one year ago.
Second Quarter Highlights
· The total number of U.S. Cellular customers increased 5.4 percent year over year to 6,010,000. The number of retail customers increased 6.8 percent to 5,448,000.
· U.S. Cellular average monthly revenue per unit (ARPU) increased 8.3 percent to $50.42.
· U.S. Cellular total revenues grew 14.8 percent to $971.6 million.
· U.S. Cellular data revenues grew 77.2 percent to $85.4 million, 9.4 percent of service revenues.
· TDS Telecom equivalent access lines (ILEC and CLEC) increased 1% percent to 1,209,600.
· TDS Telecom digital subscriber line customers (ILEC and CLEC) increased 38.2 percent to 171,200. ILEC DSL customers increased 51.7 percent.
· Fair value adjustment of derivative instruments was a loss of $358.1 million.
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· TDS repurchased 217,280 special common shares for $12.6 million or $57.80 per share. The Board of Directors has authorized repurchases up to $250 million of TDS special common shares.
“U.S. Cellular had an exceptional quarter,” said LeRoy T. Carlson, Jr., TDS president and chief executive officer. “Total revenues grew 15 percent and margins expanded significantly. ARPU increased quarter to quarter for a sixth consecutive time.
“Focusing on its strategy of delivering high levels of customer satisfaction consistently, resulted in U.S. Cellular recording 1.4 percent retail postpay customer churn in the quarter, amongst the lowest in the industry.
“TDS Telecom continued to grow its digital subscriber lines with lines up 52 percent at its ILEC. 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, as bundling has proven to be an effective means to attract and retain customers.”
Forward Contracts
The TDS VeriSign common shares and U.S. Cellular Vodafone ADR forward contracts matured in May 2007. TDS and U.S. Cellular delivered the common shares and ADR’s in settlement of the forward contracts and sold the remaining shares and ADR’s. TDS recorded a pre-tax gain of $137.9 million on settlement of the forward contracts and disposition of the remaining shares.
Guidance
Guidance for the year ending 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 Aug. 7, 2007 is as follows:
Net Retail Customer Additions | | 375,000 – 425,000 | |
Service Revenues | | Approx. $3.6 billion | |
Operating Income | | $395 - $445 million | |
Depreciation, Amortization & Accretion | | Approx. $615 million | |
Capital Expenditures | | $600 - $615 million | |
TDS Telecom (ILEC and CLEC) 2007 guidance as of Aug. 7, 2007 is as follows:
Operating Revenues | | $ | 850 - $880 million | |
Operating Income | | $ | 130 - $150 million | |
Depreciation and Amortization | | $ | 155 million | |
Capital Expenditures | | $ | 120 - $140 million | |
As previously announced, TDS will hold a teleconference Aug. 7, 2007, at 10:00 a.m. Chicago time. Interested parties may listen to the call live over the Internet by accessing http://www.videonewswire.com/event.asp?id=41601 or the conference call page of the Investor Relations section of www.teldta.com. You can also connect to the teleconference by telephone (US/Canada) at (800)706 -9695 with a conference ID # 11759028. The conference call will be archived on the conference call section of the TDS web site at www.teldta.com.
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Prior to the start of the call, certain financial and statistical information discussed during the conference call comments will be posted to the web site, together with reconciliations to generally accepted accounting principles (GAAP) of any non-GAAP information to be disclosed. Investors may access this additional information on the conference call page of the Investor Relations section 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 June 30, 2007, the company employed 11,600 people and served 7.2 million customers/units in 36 states.
About U.S. Cellular
As of June 30, 2007, U.S. Cellular Corporation, the nation’s sixth-largest network wireless service carrier, employed 8,100 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 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, roaming terms 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 | | |
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TELEPHONE AND DATA SYSTEMS, INC.
SUMMARY OPERATING DATA
Quarter Ended | | 6/30/2007 | | 3/31/2007 | | 12/31/2006 | | 9/30/2006 | | 6/30/2006 | |
| | | | | | | | | | | |
Consolidated Markets: | | | | | | | | | | | |
Total population (000s)(1) | | 81,581 | | 56,048 | | 55,543 | | 55,543 | | 55,543 | |
All customers - | | | | | | | | | | | |
Customer units | | 6,010,000 | | 5,973,000 | | 5,815,000 | | 5,729,000 | | 5,704,000 | |
Gross customer unit activations | | 418,000 | | 459,000 | | 389,000 | | 365,000 | | 347,000 | |
Net customer unit activations | | 37,000 | | 152,000 | | 86,000 | | 25,000 | | 48,000 | |
Market penetration(1) | | 7.4 | % | 10.7 | % | 10.5 | % | 10.3 | % | 10.3 | % |
Retail customers - | | | | | | | | | | | |
Customer units | | 5,448,000 | | 5,377,000 | | 5,225,000 | | 5,127,000 | | 5,099,000 | |
Gross customer unit activations | | 347,000 | | 397,000 | | 375,000 | | 353,000 | | 331,000 | |
Net customer unit activations | | 71,000 | | 146,000 | | 98,000 | | 28,000 | | 49,000 | |
| | | | | | | | | | | |
Cell sites in service | | 6,140 | | 6,004 | | 5,925 | | 5,726 | | 5,583 | |
Average monthly revenue per unit(2) | | $ | 50.42 | | $ | 48.69 | | $ | 48.15 | | $ | 47.93 | | $ | 46.54 | |
Retail service revenue per unit(2) | | $ | 43.87 | | $ | 42.69 | | $ | 42.21 | | $ | 41.75 | | $ | 40.92 | |
Inbound roaming revenue per unit(2) | | $ | 2.68 | | $ | 2.33 | | $ | 2.34 | | $ | 2.55 | | $ | 2.28 | |
Long-distance/other revenue per unit(2) | | $ | 3.87 | | $ | 3.67 | | $ | 3.60 | | $ | 3.63 | | $ | 3.34 | |
Minutes of use (MOU)(3) | | 858 | | 783 | | 749 | | 725 | | 719 | |
Retail postpay churn rate per month(4) | | 1.4 | % | 1.3 | % | 1.5 | % | 1.7 | % | 1.6 | % |
Capital Expenditures (000s) | | $ | 137,100 | | $ | 109,700 | | $ | 158,400 | | $ | 152,800 | | $ | 151,400 | |
(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. is not included in the total population counts for any period. In the quarter ended 6/30/07, the FCC granted Barat Wireless’ applications with respect to 17 licenses for which it was the winning bidder in Auction 66.
(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 | | $ | 906,218 | | $ | 860,583 | | $ | 831,663 | | $ | 821,820 | | $ | 791,705 | |
Components: | | | | | | | | | | | |
Retail service revenue during quarter | | $ | 788,535 | | $ | 754,515 | | $ | 729,072 | | $ | 715,896 | | $ | 696,079 | |
Inbound roaming revenue during quarter | | $ | 48,084 | | $ | 41,268 | | $ | 40,354 | | $ | 43,806 | | $ | 38,745 | |
Long-distance/other revenue during quarter | | $ | 69,599 | | $ | 64,800 | | $ | 62,237 | | $ | 62,118 | | $ | 56,881 | |
| | | | | | | | | | | |
Divided by average customers during quarter (000s) | | 5,991 | | 5,892 | | 5,757 | | 5,716 | | 5,670 | |
Divided by three months in each quarter | | 3 | | 3 | | 3 | | 3 | | 3 | |
| | | | | | | | | | | |
Average monthly revenue per unit | | $ | 50.42 | | $ | 48.69 | | $ | 48.15 | | $ | 47.93 | | $ | 46.54 | |
Retail service revenue per unit | | $ | 43.87 | | $ | 42.69 | | $ | 42.21 | | $ | 41.75 | | $ | 40.92 | |
Inbound roaming revenue per unit | | $ | 2.68 | | $ | 2.33 | | $ | 2.34 | | $ | 2.55 | | $ | 2.28 | |
Long-distance/other revenue per unit | | $ | 3.87 | | $ | 3.67 | | $ | 3.60 | | $ | 3.63 | | $ | 3.34 | |
(3) Average monthly local minutes of use per customer (without roaming).
(4) Retail postpay churn rate per month is calculated by dividing the average monthly customer disconnects during the quarter by the average customer base for the quarter.
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