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UNITED STATES CELLULAR REPORTS STRONG GROWTH IN REVENUE AND CASH FLOW

UNITED STATES CELLULAR REPORTS STRONG GROWTH IN REVENUE AND CASH FLOW
 CHICAGO, May 7 /PRNewswire/ -- United States Cellular Corp. (AMEX: USM) reported service revenues increased 81 recent in the first quarter ended March 31, 1992, driven by a 71 percent increase in customers and a 6 percent increase in average monthly revenue per customer. Operating loss before minority share decreased 27 percent from $3.6 million in the first quarter of 1991 to $2.7 million in the most recent quarter. Additionally, operating cash flow increased $4.2 million to a positive $3.5 million for the three months ending March 31, 1992.
 Primarily as a result of a $14.9 million non-operating gain, the company reported net income of $8.3 million, or 15 cents per share, for the quarter compared to a net loss before cumulative effect of a change in accounting principle of $5.2 million, or 17 cents per share, for the first quarter of 1991.
 "The comparison between this year's and last year's first quarter clearly shows the dramatic growth of United States Cellular," reported H. Donald Nelson, the company's president and chief executive officer. "This quarter's results show the positive results of our clustering strategy and our emphasis on revenue and cost control."
 Service revenues totaled $29.3 million for the quarter ending March 31, 1992, up 81 percent from $16.2 million a year earlier. This increase resulted from both an increase in customers and average monthly revenue per customer. Customers served by the company's majority-owned and managed systems totaled 108,600 at March 31, 1992, compared to 63,500 at March 31, 1991. The introduction of new marketing and pricing programs designed to enhance revenues, reduce marketing and selling costs and improve customer retention held down growth in customer additions during the first quarter of 1992. Service revenue per customer averaged $94.70 per month during the first quarter of 1992 compared to $89.14 in 1991.
 Operating expenses increased 63 percent to $30.7 million primarily as a result of the increase in systems in operation and customers served. The company's results include 78 majority-owned and managed Metropolitan Statistical Areas (MSAs) and Rural Service Areas (RSAs) in operation at March 31, 1992, compared to 33 such markets a year earlier. The company also announced that it had changed its amortization period for cellular license costs from 20 years to 40 years, which is consistent with the practice of other cellular operators.
 "The strong revenue growth, tight control of operating expenses, and lower than planned marketing costs combined to produce the reduction in the operating loss and the growth in cash flow," reported Nelson. "Future quarters should show continued revenue growth with cash flow growth somewhat impacted by anticipated higher marketing costs in the next couple of quarters."
 USM has rapidly expanded its cellular operations during the past two years. Since March 31, 1991, USM has acquired 2.9 million additional population equivalents (pops) in 15 markets, commenced cellular service in 51 markets, and added 129 cell sites and 45,100 cellular telephones in consolidated markets. The table below illustrates the rapid growth in USM's pops, markets, and operations since early 1990.
 UNITED STATES CELLULAR CORP.
 Financial Results
 (Dollars in millions)
 1990 1991
 Q2 Q3 Q4 Q1 Q2 Q3 Q4
 Population Equivalents
 (millions) 9.1 9.6 14.2 15.2 16.2 17.3 18.0
 Consolidated Markets --
 In Service 26 28 32 33 43 50 67
 Pending 7 8 35 40 37 38 25
 Revenue per
 subscriber $106 $104 $100 $89 $104 $104 $103
 Cell Sites in Service 86 89 107 113 121 145 186
 Cellular Plant
 in service, net $35.0 37.3 44.3 $51.8 71.2 83.4 109.3
 Cellular Telephones
 In Service 43,800 43,700 57,300 63,500 75,500 85,200 97,000
 Total Managed Markets:
 In Service 34 36 44 51 63 73 91
 Pending 20 21 44 41 38 33 21
 Cellular Telephones
 In Service 54,500 60,800 71,200 79,200 101,600 115,000 127,400
 Short and Long
 Term Debt $95.6 113.9 142.2 145.6 103.0 137.8 196.9
 Common and Series A
 Common Shares
 Outstanding (millions) 28.5 28.9 28.9 31.4 43.4 44.1 47.6
 (Dollars in millions) 1992
 Q1
 Population Equivalents
 (millions) 18.0
 Consolidated Markets --
 In Service 78
 Pending 17
 Revenue per subscriber $95
 Cell Sites in Service 242
 Cellular Plant
 In Service, Net 121.0
 Cellular Telephones
 In Service 108,600
 Total Managed Markets:
 In Service 102
 Pending 11
 Cellular Telephones
 In Service 127,400
 Short and Long
 Term Debt 252.0
 Common and Series A
 Common Shares
 Outstanding (millions) 48.8
 The company also reported a $14.9 million non-operating gain from the sale of certain cellular interests. This gain is primarily related to its previously announced trade with Centel. During the quarter, this transaction was completed with the company acquiring controlling interests in the Gainesville, Fla., and Laredo, Texas, MSAs. Additionally, the company sold another small minority interest which produced a $3.5 million gain. Primarily as a result of these two transactions, the company reported net income of $8.3 million or 15 cents per share for the three months ended March 31, 1992, compared to a net loss before the cumulative effect of a change in accounting principle of $5.2 million or 17 cents per share for the same period in 1991.
 USM also announced it had entered into an agreement to acquire Florida RSA 8, which represents 51,000 pops. ''This market ties together the company's Georgia RSA 3 market with our Gainesville, Fla., RSA 5 and Florida RSA 6 markets, creating a large contiguous cluster in the northern Florida area,'' Nelson reported.
 USM has financed its cellular acquisition program primarily through the issuance of its common stock. Debt financing is currently being provided by Telephone and Data Systems, Inc., the company's parent, and an equipment vendor. The table below summarized population equivalents owned or acquirable at March 31, 1992, and common stock issuable in connection with acquisitions.
 Population Equivalents at March 31, 1992
 MSA RSA TOTAL
 Owned 7,679,000 8,028,000 15,707,000
 Acquirable 440,000 1,811,000 2,251,000(A)
 8,119,000 9,839,000 17,958,000
 Common and Series A Common Outstanding Issuable Total
 Shares, March 31, 1992 48,797,713 6,053,282(A) 54,850,995
 Gross License Acquisition
 Costs ($ millions) $ 453.2 $ 108.0 $ 561.2
 (A) -- At March 31, 1992, USM had additional commitments to issue
 approximately 5.3 million shares of common stock in connection with
 the population equivalents that were acquirable at that date. The
 aggregate 11.3 million shares committed for issuance in future years
 are scheduled to be issued as follows: approximately 3.4 million
 shares in 1992; 825,000 shares in 1993; and 7.1 million shares in
 1994 and later years.
 Headquartered in Chicago, USM manages and invests in cellular systems throughout the United States. As of March 31, 1992, USM owned or had rights to acquire interests totaling 18.0 million pops in 72 MSAs and 102 RSAs. At that date, USM managed operational systems serving 34 MSAs and 68 RSAs.
 UNITED STATES CELLULAR CORP.
 FINANCIAL HIGHLIGHTS
 (Unaudited)
 Three Months Ended Increase (Decrease)
 3/31/92 3/31/91 Amount Percent
 Service Revenues $29,261 $16,152(A) $13,109 81.2
 Operating Expenses 30,710 18,808(A) 11,902 63.3
 Service Operating
 (Loss) (1,449) (2,656) 1,207 45.4
 Equipment sales 1,495 1,340 155 11.5
 Costs of Equipment Sold 2,726 2,330 396 16.9
 Equipment Sales
 (Loss) (1,231) (990) (241) (24.3)
 Operating (Loss) Before
 Minority Share (2,680) (3,646) 966 26.5
 Minority Share of Operating
 (Income) Loss (857) (144) (713) (496.6)
 Investment Income, Net
 of License Cost
 Amortization 3,032 1,171 1,861 158.8
 Gain on Sale of
 Cellular Interest 14,875 246 14,629 N/M
 Other Income (Expense) (792) 1,167 (1,959) (168.0)
 Interest Expense (4,444) (4,035) (409) (10.1)
 Income Tax Expense (850) (2) (848) N/M
 Net Income (loss) Before
 Cumulative Effect of a
 Change in Accounting
 Principle 8,284 (5,243) 13,527 258.0
 Cumulative Effect of a
 Change in Accounting
 Principle --- (10,269) 10,269 N/M
 Net Income (loss) $8,284 (15,512) 23,796 153.4
 Weighted Average Common and
 Series A Common Shares
 (000s) 55,478 30,264 25,214 83.3
 Income (loss) Per Common
 Share:
 Before Cumulative
 Effect of a
 Change in Accounting
 Principle $ .15 $ (.17) $ .32 188.2
 Cumulative Effect of
 a Change in
 Accounting Principle --- (.34) .34 N/M
 Net Income (loss) $ .15 $ (.51) $ .66 129.4
 Operating Cash Flow $ 3,496 $ (663) $ 4,159 626.8
 Consolidated Net Revenue
 Subscribers 108,600 63,500 45,100 71.0
 Total Net Revenue
 Subscribers in All
 Managed Markets 127,400 79,200 48,200 60.9
 (A) -- Certain 1991 amounts have been restated to conform to
 current year presentation.
 -0- 5/7/92
 /CONTACT: Kenneth R. Meyers of Cellular Corp., 312-339-8900/
 (USM) CO: United States Cellular Corp. ST: Illinois IN: TLS SU: ERN


TQ -- NY095 -- 7794 05/07/92 16:22 EDT
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Date:May 7, 1992
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