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TELEPHONE AND DATA SYSTEMS, INC. REPORTS EXCELLENT RESULTS FOR THE THIRD QUARTER AND NINE MONTHS

 CHICAGO, Oct. 28 /PRNewswire/ -- Telephone and Data Systems, Inc. (AMEX: TDS), posted excellent growth in customers, revenues, operating cash flow and earnings for the third quarter and nine months ended Sept. 30, 1993. TDS's telephone, cellular and paging businesses all reported rapid growth in customers due primarily to ongoing marketing activities and acquisitions. Consolidated customer units served increased 36.0 percent to over one million compared to 742,000 customer units at Sept. 30, 1992. As a result, during the third quarter of 1993, operating revenues surged ahead 33.8 percent while operating cash flow climbed 39.6 percent. On a comparable basis, excluding nonrecurring and unusual items, third quarter 1993 net income available to common increased 44.5 percent to $9.1 million from $6.3 million and earnings per share rose 18.8 percent to $.19 from $.16, both as compared to the third quarter of 1992.
 LeRoy T. Carlson Jr., president and chief executive officer, commented, "TDS is building value for its shareowners by delivering high-quality telecommunications services to a rapidly growing multitude of satisfied customers. I am particularly pleased that our telephone, cellular telephone and paging units all contributed to our excellent third quarter operating results. As we pass the million customer units in service milestone, we look forward to continuously exceeding our customers' expectations as we bring new communications technologies to the communities we currently serve and as we expand into new markets."
 Third Quarter Results
 Consolidated operating revenues increased 33.8 percent to $158.7 million from $118.6 million in 1992. Cellular operations contributed 61.6 percent of this $40.0 million increase, with telephone and paging contributing 24.1 percent and 14.3 percent, respectively. Operating cash flow increased 39.6 percent to $52.4 million with strong gains by all three businesses. Operating income increased 50.6 percent to $21.1 million, due mainly to a $2.7 million increase in telephone operating income and a $2.9 million improvement in cellular operating results. Interest expense increased 21.2 percent to $9.8 million due to higher levels of debt incurred through TDS's Medium-Term Note program and additional long-term debt borrowings by TDS Telecom to finance its construction programs. Income tax expense increased 88.7 percent to $9.4 million due to increased pretax income as well as increase in the estimated effective income tax rate to 44 percent in 1993 from 43 percent in 1992. Net income increased 81.1 percent to $12.0 million. Earnings per common share increased 60.0 percent to $.24 per share in 1993 from $.15 per share in 1992, reflecting the increase in income, offset somewhat by a 20.7 percent increase in weighted average common shares. On a comparable basis, excluding nonrecurring and unusual items, net income available to common increased 44.5 percent to $9.1 million and earnings per share rose 18.8 percent to $.19.
 Third Quarter 1993 Compared To Third Quarter 1992
 TDS Telecom US Cellular American Paging Consolidated
 Percent Percent Percent Percent
 Increase Increase Increase Increase
 Customers 33,700 10.6 90,900 67.6 142,600 49.1 267,200 36.0
 Operating
 revenues $9.7 16.1 $24.7 55.4 $5.7 40.6 $40.0 33.8
 Operating
 cash flow $5.7 18.1 $6.9 131.7 $2.3 208.5 $14.9 39.6
 Operating
 income $2.7 14.5 $2.9 108.5 $1.5 100.7 $7.1 50.6
 Interest
 expense --- --- --- --- --- --- $1.7 21.2
 Income taxes --- --- --- --- --- --- $4.4 88.7
 Net income
 available
 to common --- --- --- --- --- --- $5.3 88.1
 Earnings per
 common share --- --- --- --- --- --- $.09 60.0
 Nine Months Results
 Consolidated operating revenues increased 30.1 percent to $430.1 million. Cellular telephone operations contributed 59.4 percent of this $99.6 million increase with telephone and radio paging contributing 24.5 percent and 16.1 percent, respectively. Operating cash flow increased 30.1 percent to $143.1 million, while operating income increased 32.3 percent to $57.4 million. Investment and other income declined 27.0 percent to $20.2 million, primarily due to a $14.3 million pretax gain on sale of cellular interests reported in 1992, as discussed below. Interest expense increased 15.6 percent to $27.9 million. Income tax expense increased 8.4 percent to $21.9 million due primarily to the increased pretax income. Income before the cumulative effect of accounting changes increased 4.0 percent to $27.9 million. Earnings per common share before the cumulative effect of accounting changes was .56 in 1993 as compared to $.65 in 1992, reflecting both changes in income and a 20.2 percent increase in weighted average common shares. On a comparable basis, excluding nonrecurring and unusual items, net income available to common increased 40.1 percent to $24.4 million and earnings per share rose 17.8 percent to $.53.
 Nonrecurring And Unusual Items
 During the third quarter of 1993, United States Cellular Corporation (AMEX: USM) reported a $4.9 million pretax gain on the sale of two minority cellular interests. TDS's share of the gain (after income taxes and minority shareholders' share) was $2.3 million. During the second quarter of 1993, American Paging recognized a $1.0 million pretax charge for the discontinuance of its national retailer distribution operations. While TDS adopted Statement of Financial Accounting Standards No. 109 to account for income taxes in the first quarter of 1993, this change is estimated to have no material effect on reported net income or earnings per share. Results for the first nine months of 1992 were increased substantially by net gains of $6.7 million (after income taxes and minority shareholders' share) from the exchange of interests in four cellular markets and the sale of a minority interest in another market. As a result of these 1992 gains, USM reported $14.3 million of additional pretax income for the nine months ended Sept. 30, 1992. TDS included the gains but also recorded $2.6 million of this amount as USM's minority shareholders' interest in such income. Also in 1992, TDS adopted a new accounting rule for postretirement benefits which reduced both net income and earnings per share. The cumulative effect on years prior to 1992 reduced 1992 earnings by $6.9 million, or $.18 per share. Additionally, TDS Telecom realized a $1.8 million directory pretax revenue settlement in the first quarter of 1992.
 Net Income Available To Common
 For The Nine Months Ended Sept. 30,
 (Dollars In Millions, Except Earnings Per Share Amounts)
 1993 1992
 As reported $26.1 $18.2
 Nonrecurring and unusual items
 (estimated net of tax):
 Provision for discontinuance of national
 retailer distribution of pagers through APN .6 ---
 Cumulative effect of accounting changes --- 6.9
 Gain on sales or exchanges of cellular
 interests (net of USM minority share) (2.3) (6.7)
 TDS Telecom directory revenue settlement --- (1.0)
 Excluding nonrecurring and unusual items $24.4 $17.4
 Earnings per share, excluding nonrecurring
 and unusual items $ .53 $ .45
 TDS Telecommunications Corp. ("TDS Telecom") results reflect excellent growth in customers served and strong growth in access minutes together with relatively stable prices and ongoing cost reduction programs. TDS Telecom has added four telephone companies and two additional exchanges serving 20,000 access lines since Sept. 30, 1992. Two of these 1993 acquisitions accounted for 17,600 access lines and extended TDS Telecom's operations into Arizona, its 29th state. Internal growth has added 13,700 additional access lines in the past 12 months. TDS Telecom currently operates 92 telephone companies serving 350,600 access lines. TDS Telecom is focused on upgrading and continuously improving the quality of all of its services.
 Operating revenues for the nine months ended Sept. 30, 1993, continued to grow steadily, increasing 13.9 percent to $199.8 million in 1993 from $175.4 million in 1992. Operating cash flow increased 15.6 percent to $105.7 million from $91.4 million in 1992. Telephone operating income increased 14.4 percent to $61.6 million from $53.9 million in 1992. TDS Telecom's operating income margin has increased slightly over the comparative nine months to 30.8 percent from 30.7 percent due mainly to revenue increases and close control of expenses. The newly acquired telephone companies increased telephone operating revenues $9.2 million (5.2 percent), operating cash flow $5.1 million (5.6 percent) and operating income $3.1 million (5.8 percent).
 -0- 10/28/93
 /NOTE TO EDITORS: Today, at 2 p.m. Central Daylight Time, TDS and USM held a joint news conference by phone to discuss third quarter and nine months ended Sept. 30, 1993 results of operations. The news conference is available by calling 800-837-1012. For further information, please contact Murray L. Swanson, executive vice president - finance at 312-630-1900. Out of town media, call collect./
 /CONTACT: Murray Swanson of TDS, 312-630-1900/
 /FIRST AND FINAL ADD TO FOLLOW/
 (TDS USM)


CO: Telephone and Data Systems, Inc.; United States Cellular
 Corporation ST: Illinois IN: TLS SU: ERN


MP -- NY126 -- 8171 10/28/93 17:06 EDT
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Date:Oct 28, 1993
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