Exhibit 99.4
VERNON TELEPHONE COMPANY, INC.
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CONSOLIDATED BALANCE SHEET
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UNAUDITED
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September 30, 1993 June 30, 1993
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ASSETS
CURRENT ASSETS
Cash $ 184,465 $ 103,381
Accounts receivable, net of uncollectibles 538,180 427,173
Materials and supplies 124,963 133,598
Prepaid expenses 56,995 40,790
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904,603 704,942
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NONCURRENT ASSETS
Unamortized debt issuance expense 3,630 3,680
Other investments 6,246,854 6,246,854
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6,250,484 6,250,534
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TELEPHONE PLANT - AT COST
Telephone plant in service 4,292,316 4,265,358
Telephone plant under construction 185,331 185,178
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4,477,647 4,450,536
Less: Depreciation reserve 2,055,945 1,992,204
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2,421,702 2,458,332
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Total Assets $ 9,576,789 $ 9,413,808
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LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Current maturities of long-term debt $ 61,916 $ 61,916
Notes payable 355,338 511,923
Accounts payable 243,327 188,999
Accrued taxes 290,708 290,891
Other current liabilities 11,421 46,500
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962,710 1,100,229
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LONG-TERM DEBT 1,856,815 1,871,802
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DEFERRED CREDITS
Deferred federal income taxes 2,069,378 2,069,378
Unamortized investment tax credits 71,066 71,066
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2,140,444 2,140,444
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STOCKHOLDERS' EQUITY
Preferred stock -- 35,500
Common stock 70,000 70,000
Retained earnings 4,546,820 4,195,833
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4,616,820 4,301,333
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Total Liabilities and
Stockholders' Equity $ 9,576,789 $ 9,413,808
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VERNON TELEPHONE COMPANY, INC.
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CONSOLIDATED INCOME STATEMENT
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Three Months Three Months
Ended Ended
September 30, 1993 September 30, 1992
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OPERATING REVENUES
Local network service $ 141,335 $ 140,403
Network access and long distance
network service 223,137 268,374
Miscellaneous 28,922 27,554
Less: Uncollectible operating revenues 6,000 4,000
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Total operating revenues 387,394 432,331
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OPERATING EXPENSES
Plant specific 115,166 101,469
Plant non-specific:
Depreciation 63,803 68,747
Other 43,622 29,491
Customer operations 49,209 47,782
Corporate operations 78,164 83,891
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Total operating expenses 349,964 331,380
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OPERATING TAXES 33,622 33,221
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Net operating income 3,808 67,730
OTHER NONOPERATING INCOME AND EXPENSES - NET 378,745 46,417
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Income available for fixed charges 382,553 114,147
INTEREST EXPENSE 31,566 20,998
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Net Income (Loss) $ 350,987 $ 93,149
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VERNON TELEPHONE COMPANY, INC.
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CONSOLIDATED STATEMENT OF CASH FLOWS
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Three Months Three Months
Ended Ended
September 30, 1993 September 30, 1992
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CASH FLOW FROM OPERATING ACTIVITIES:
Net Income $ 350,987 $ 93,149
Add (Deduct) adjustments to reconcile net
Income to net cash provided by
operating activities:
Depreciations and amortization 63,803 68,747
Other non-cash expense -- (19,972)
Change in:
Accounts receivable (111,007) (94,946)
Materials and supplies 8,635 10,186
Prepaid expenses (16,205) (14,564)
Accounts payable 54,328 (50,521)
Other current liabilities (35,262) (25,737)
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315,279 (33,658)
CASH FLOW FROM FINANCING ACTIVITIES:
Change in notes payable (156,585) (3,498)
Change in long-term debt (14,987) (14,274)
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(171,572) (17,772)
CASH FLOW FROM INVESTING ACTIVITIES:
Additions to telephone plant (27,123) (15,911)
Redemption of preferred stock (35,500) --
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(62,623) (15,911)
NET INCREASE (DECREASE) IN CASH AND
CASH EQUIVALENTS 81,084 (67,341)
CASH AND CASH EQUIVALENTS
Beginning of Period 103,381 163,110
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End of Period $ 184,465 $ 95,769
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VERNON TELEPHONE COMPANY, INC.
NOTES TO UNAUDITED FINANCIAL STATEMENTS
1. The financial statements as of September 30, 1993 and 1992,
included herein have been prepared by Vernon Telephone Company,
Inc. (the "Company"), without audit. Certain information and
footnote disclosures normally included in financial statements
prepared in accordance with generally accepted accounting
principles have been condensed or omitted pursuant to rules and
regulations of the Securities and Exchange Commission, although
the Company believes that the disclosures are adequate to make the
information presented not misleading. It is suggested that these
financial statements be read in conjunction with the financial
statements and notes thereto included in the Company's latest
audited financial statements.
The accompanying unaudited financial statements of September 30,
1993 and 1992, and audited financial statements as of June 30,
1993, contain all adjustments (consisting of only normal recurring
items) necessary to present fairly the financial position as of
September 30, 1993, and June 30, 1993, and the results of
operations and cash flows for the next three months ended
September 30, 1993 and 1992. The results of operations for the
three months ended September 30, 1993 and 1992, are not
necessarily indicative of the results to be expected for the full
year.
2. Pursuant to a merger contemplated by an Asset Purchase Agreement,
dated December 15, 1993, between Telephone and Data Systems, Inc.
("TDS"), Vernon Telephone Company, Inc. and Diane P. Laube, an
individual and presently the sole stockholder of the Company, a
wholly-owned subsidiary of TDS will merge with and into the
Company with the Company being the surviving entity. As a result
of this transaction, which is subject to regulatory approval, TDS
will acquire an 100% interest in the Company.