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/FIRST AND FINAL ADD -- NY126 -- TELEPHONE AND DATA SYSTEMS, INC./

 United States Cellular Corporation's strong performance reflects primarily continuing expansion, rapid growth in units in service and slightly higher prices offset by a modest decrease in minutes of use per customer. USM, TDS's 83.8 percent-owned subsidiary, owns or has the right to acquire interests in cellular telephone systems representing approximately 23.0 million population equivalents in 203 systems at Sept. 30, 1993, making USM the seventh largest cellular company in the United States in terms of population equivalents. USM has grown its consolidated customer base 67.6 percent by adding 90,900 consolidated cellular telephones since Sept. 30, 1992. USM added 26 systems to its consolidated operations since Sept. 30, 1992, 20 of these in 1993.
 USM's revenues for the nine months ended Sept. 30, 1993, grew 51.0 percent to $175.2 million from $116.0 million in 1992. The increase is primarily due to USM's 67.6 percent growth in consolidated cellular telephones in service, strong growth in roaming revenues and the effects of acquisitions and startups of new systems.
 Operating cash flow totaled $29.5 million for the nine months ended Sept. 30, 1993, representing 17.6 percent of service revenues, compared to $15.1 million in the nine months ended Sept. 30, 1992, representing 13.8 percent of service revenues. Cellular operating loss decreased to $2.6 million from $6.1 million in 1992, primarily reflecting the maturing of markets, offset somewhat by the effects of adding 26 new markets to operations. Operating income margin improved to a negative 1.5 percent from a negative 5.3 percent.
 American Paging, Inc.'s (API) 1993 operating results reflect robust growth in customers and revenues, offset somewhat by a continuing decline in average monthly revenue per customer as well as the ongoing impact of API's quality and productivity improvement programs. API served 432,900 pagers through 19 operations centers at Sept. 30, 1993, an increase of 49.1 percent in pagers served since Sept. 30, 1992. American Paging acquired 10,700 pagers through the purchase of a paging company in the Tampa/Fort Myers market in the second quarter.
 Two fourth quarter 1992 acquisitions aggregating 10,000 pagers and internal growth have added an additional 131,900 pagers to the paging customer base since Sept. 30, 1992. Paging revenues increased 40.9 percent to $55.1 million for the nine months ended Sept. 30, 1993, from $39.1 million for the comparable period in 1992.
 API's financial results reflect rapid growth in units served, offset somewhat by a 7.4 percent decrease in average revenue per pager, reflecting primarily increased sales to resellers. Operating cash flow increased 129 percent to $7.8 million from $3.4 million in 1992. API's operating loss improved 62.1 percent to $1.7 million from $4.4 million in 1992. Operating income margin improved greatly to a negative 3.0 percent in 1993 from a negative 11.2 percent in 1992.
 In June 1993, API elected to cease national retailer distribution of pagers through its wholly owned American Paging Network (APN). The decision to cease operations at APN resulted in a pretax charge of $1.0 million. API's management team is focused on improving the quality, productivity and profitability of all of its messaging activities.
 FINANCING
 In recent years, TDS has acquired cellular licenses and telephone and radio paging operations that have substantially enhanced its long-term growth opportunities and has greatly strengthened its financial position by issuing equity securities to finance most of these acquisitions.
 TDS had a total of 42.3 million common and 6.9 million Series A common shares issued and outstanding at Sept. 30, 1993. At that date, TDS had reserved approximately 3.0 million common shares in connection with definitive and pending acquisitions for cellular interests representing 1.2 million population equivalents and two telephone companies. In addition, TDS has registered approximately 4.7 million common shares for future use in connection with its acquisition activities.
 COMMON AND SERIES A COMMON SHARES
 (Shares in thousands)
 Shares outstanding Sept. 30, 1993 49,142
 Shares to be issued in the future pursuant
 to definitive acquisition agreements 2,971
 Total shares outstanding and to be issued 52,113
 Unissued shares previously registered for
 acquisitions, excluding 2,971 shares
 reserved under definitive agreements 4,658
 TDS recently filed a $300 million Universal Shelf registration which may be used from time to time to issue debt securities and/or common shares for cash. Also, USM announced the commencement of a rights offering on Oct. 25, 1993. The rights offering will enable all USM shareholders to participate in a transaction that is expected to greatly de-leverage USM's balance sheet and thereby better position the company to continue its expansion and development activities. These recent financing activities support TDS's objective to position each of its business units to pursue new technologies and market opportunities, including new frequency allocations.
 TDS is a Chicago-based telecommunications company with established local telephone, cellular telephone and radio paging operations. TDS strives to build value for its shareholders by providing excellent communications services in attractive, closely related segments of the telecommunications industry.
 TELEPHONE AND DATA SYSTEMS, INC.
 Three Months Ended Sept. 30, 1993 and 1992
 (Unaudited; dollars in thousands, except per-share amounts)
 Increase (Decrease)
 OPERATING REVENUES 1993 1992 Amount Percent
 TDS Telecom $69,638 $59,983 $ 9,655 16.1
 USM 69,183 44,514 24,669 55.4
 API 19,829 14,107(A) 5,722 40.6
 Total 158,650 118,604 40,046 33.8
 OPERATING EXPENSES BEFORE DEPRECIATION AND AMORTIZATION
 TDS Telecom 32,747 28,758(B) 3,989 13.9
 USM 57,102 39,300 17,802 45.3
 API 16,378 12,989(A) 3,389 26.1
 Total 106,227 81,047 25,180 31.1
 OPERATING CASH FLOW (Oper. Income Plus Depreciation & Amortization)
 TDS Telecom 36,891 31,225 5,666 18.1
 USM 12,081 5,214 6,867 131.7
 API 3,451 1,118 2,333 208.5
 Total 52,423 37,557 14,866 39.6
 DEPRECIATION AND AMORTIZATION (C)
 TDS Telecom 15,990 12,977 3,013 23.2
 USM 11,853 7,901 3,952 50.0
 API 3,441 2,641 800 30.3
 Total 31,284 23,519 7,765 33.0
 OPERATING INCOME
 TDS Telecom 20,901 18,248 2,653 14.5
 USM 228 (2,687) 2,915 108.5
 API 10 (1,523) 1,533 100.7
 Total 21,139 14,038 7,101 50.6
 INVESTMENT AND OTHER INCOME
 Interest and dividend income 2,081 1,773 308 17.4
 Minority share of income (833) 568 (1,401) (246.7)
 Cellular investment
 income, net 4,463 2,583 1,880 72.8
 Gain on sale of cellular
 properties 4,851 (544) 5,395 N/M
 Other income, net (471) 1,291(B) (1,762) (136.4)
 Total 10,091 5,671 4,420 77.9
 Interest expense 9,798 8,086 1,712 21.2
 Income tax expense 9,430 4,997 4,433 88.7
 Net income 12,002 6,626 5,376 81.1
 Preferred dividend requirement (594) (561) (33) (5.9)
 Net income available to
 common $11,408 $ 6,065 $ 5,343 88.1
 Weighted average common
 shares (000s) 48,302 40.027 8,275 20.7
 Earnings per common share $ .24 $ .15 $ .09 60.0
 (A) -- Certain 1992 amounts have been reclassified to conform to current year presentations.
 (B) -- Restated to reflect implementation of SFAS 106 effective Jan. 1, 1992.
 (C) -- Includes amortization of 6,522 and 4,615, respectively.
 Financial Highlights
 (Unaudited; dollars in thousands, except per-share amounts)
 Nine months ended Sept. 30 Increase (Decrease)
 OPERATING REVENUES 1993 1992 Amount Percent
 TDS Telecom $199,843 $175,429 $24,414 13.9
 USM 175,208 116,006 59,202 51.0
 API 55,082 39,095(A) 15,987 40.9
 Total 430,133 350,530 99,603 30.1
 OPERATING EXPENSES BEFORE
 DEPRECIATION AND AMORTIZATION
 TDS Telecom 94,174 83,988(B) 10,186 12.1
 USM 145,668 100,889 44,779 44.4
 API 47,238 35,666(A) 11,572 32.4
 Total 287,080 220,543 66,537 30.2
 OPERATING CASH FLOW
 (Operating Income Plus
 Depreciation and Amortization)
 TDS Telecom 105,669 91,441 14,228 15.6
 USM 29,540 15,117 14,423 95.4
 API 7,844 3,429 4,415 128.8
 Total 143,053 109,987 33,066 30.1
 DEPRECIATION AND
 AMORTIZATION (C)
 TDS Telecom 44,026 37,565 6,461 17.2
 USM 32,132 21,215 10,917 51.5
 API 9,509 7,825 1,684 21.5
 Total 85,667 66,605 19,062 28.6
 OPERATING INCOME
 TDS Telecom 61,643 53,876 7,767 14.4
 USM (2,592) (6,098) 3,506 57.5
 API (1,665) (4,396) 2,731 62.1
 Total 57,386 43,382 14,004 32.3
 INVESTMENT AND OTHER INCOME
 Interest and dividend income 5,837 5,637 200 3.6
 Minority share of income (1,111) (2,005) 894 44.6
 Cellular investment
 income, net 10,595 6,782 3,813 56.2
 Gain on sale of cellular
 properties 4,970 14,331 (9,361) (65.3)
 Other income, net (45) 2,977(B) (3,022) (101.5)
 Total 20,246 27,722 (7,476) (27.0)
 Interest expense 27,881 24,128 3,753 15.6
 Income tax expense 21,890 20,199 1,691 8.4
 Income before cumulative
 effect of accounting changes 27,861 26,777 1,084 4.0
 Cumulative effect of accounting
 changes -- (6,866)(B) 6,866 100.0
 Net income 27,861 19,911 7,950 39.9
 Preferred dividend
 requirement (1,789) (1,677) (112) (6.7)
 Net income available to
 common $26,072 $ 18,234 $ 7,838 43.0
 Weighted average common
 shares (000s) 46,339 38,553 7,786 20.2
 EARNINGS PER COMMON SHARE:
 Before cumulative effect of
 accounting changes $ .56 $ .65 $ (.09) (13.8)
 Cumulative effect of
 accounting changes -- (.18) .18 100.0
 Net income $ .56 $ .47 $ .09 19.1
 (A) -- Certain 1992 amounts have been reclassified to conform to current year presentations.
 (B) -- Restated to reflect implementation of SFAS 106 effective Jan. 1, 1992.
 (C) -- Includes amortization of 17,772 and 12,528, respectively.
 Summary Operating Data
 QUARTER ENDED
 9/30/93 6/30/93 3/31/93 12/31/92 9/30/92
 TELEPHONE:
 Companies 92 92 92 90 88
 Access lines 350,600 344,600 341,100 321,700 316,900
 GROWTH IN ACCESS LINES
 FROM PRIOR QUARTER-END:
 Acquisitions 1,700 -- 16,300 2,000 1,000
 Internal growth 4,300 3,500 3,100 2,800 3,300
 Average monthly revenue
 per access line $67 $66 $62 $65 $64
 CELLULAR:
 Total population
 equivalents (owned and
 acquirable, in
 thousands) 23,028 22,305 21,768 21,192 20,084
 TDS's proportionate
 share 18,093 17,313 16,363 15,724 14,756
 TOTAL MANAGED SYSTEMS:
 Customers 254,900 221,100 202,300 182,500 159,800
 Market penetration (pct.) 1.20 1.08 1.00 .97 .88
 Systems in operation 132 128 123 116 112
 MAJORITY-OWNED, MANAGED AND
 CONSOLIDATED SYSTEMS:
 Population equivalents 17,346 16,674 15,901 13,991 13,060
 Customers 225,400 189,100 173,800 150,800 134.500
 Market penetration (pct) 1.23 1.08 1.00 1.00 .93
 Systems in operation 111 107 101 92 87
 Cell sites in service 444 393 362 320 291
 Average monthly revenue
 per customer $106 $102 $92 $106 $110
 Churn rate per month
 (pct.) 2.5 2.0 2.1 2.5 2.4
 Marketing cost per net
 customer addition $626 $607 $798 $759 $777
 PAGING:
 Pagers in service 432,900 398,800 350,900 322,200 290,300
 Average monthly revenue
 per customer $13.50 $13.86 $14.48 $14.72 $14.90
 Transmitters in service 625 546 533 532 522
 Disconnect rate per month
 (pct.) 3.0 3.0 2.8 3.0 2.8
 Marketing cost per net
 customer addition $79 $62 $94 $95 $121
 -0- 10/28/93 AA NY126
 /PRNewswire -- Oct. 28/
 /END FIRST AND FINAL ADD/
 (TDS)


CO: Telephone and Data Systems, Inc. ST: Illinois IN: TLS SU: ERN

JK -- NY126A -- 8193 10/28/93 17:29 EDT
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Date:Oct 28, 1993
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