TDS Reports Second-Quarter 2007 Operating Results; Strong Wireless Results
CHICAGO, Aug. 7 -- Telephone and Data Systems, Inc. (Amex: TDS - News, TDS.S - News) 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.
-- 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.
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