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Telephone And Data Systems Inc Reports Operating Results (10-Q)

November 05, 2009 | About:
10qk

10qk

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Telephone And Data Systems Inc (TDS) filed Quarterly Report for the period ended 2009-09-30.

Telephone & Data Systems is a diversified telecommunications corporation. Through its strategic business units U.S. Cellular and TDS Telecom TDS operates primarily by providing cellular and local telephone service. TDS builds value for its shareholders by providing excellent communications services in growing closely related segments of the telecommunications industry. Telephone And Data Systems Inc has a market cap of $3.35 billion; its shares were traded at around $30.73 with a P/E ratio of 10.1 and P/S ratio of 0.6. The dividend yield of Telephone And Data Systems Inc stocks is 1.4%. Telephone And Data Systems Inc had an annual average earning growth of 8.3% over the past 5 years.

Highlight of Business Operations:

· Service revenues of $2,941.6 million decreased $21.8 million year-over-year, due primarily to a decrease of $59.4 million (24%) in inbound roaming revenues. Retail service revenue grew by $25.9 million (1%) due to increases in the average number of customers and the average monthly retail service revenue per customer.

· Operating income decreased $43.4 million, or 12%, to $313.4 million in 2009 from $356.8 million in 2008.

(1) 2008 Actual Results include losses on disposals of $23.4 million and impairment of assets of $386.7 million. The 2009 Estimated Results include only the estimate for Depreciation, amortization and accretion expenses and losses on disposals of assets, and do not include any estimate for losses on impairment of assets since these cannot be predicted.

Operating revenues decreased $27.7 million, or 4% to $591.8 million during the nine months ended September 30, 2009 from $619.5 million in 2008. The decrease in 2009 was primarily due to a decline in ILEC and CLEC physical access lines and a decrease in network usage by inter-exchange carriers. These decreases were partially mitigated by the acquisition of three ILEC companies in 2008 as well as an increase in ILEC data customers and revenues.

Operating income decreased to $66.8 million, or 39%, during the nine months ended September 30, 2009 compared to $108.9 million in 2008, as a result of decreased revenues and increased costs. The higher costs in 2009 were primarily due to an increase in legal and excise tax expense related to discrete matters, severance incurred as a result of workforce reduction initiatives, the acquisition of three ILEC companies in 2008, and increased costs associated with the acquisition of new customers and increased network capacity. These expenses were partially offset by discrete events related to employee compensation and benefits modifications and lower expenses of serving fewer CLEC customers.

Cash Flows and Investments - TDS and its subsidiaries had cash and cash equivalents totaling $778.2 million, short-term investments in the form of certificates of deposit aggregating $136.4 million, borrowing capacity under their revolving credit facilities of $696.3 million, and additional bank lines of credit of $10.0 million as of September 30, 2009. Also, during the nine months ended September 30, 2009, TDS and its subsidiaries generated $800.0 million of cash flows from operating activities. Management believes that cash on hand, expected future cash flows from operating activities and sources of external financing provide substantial liquidity and financial flexibility and are sufficient to permit TDS and its subsidiaries to finance their contractual obligations and anticipated capital and operating expenditures for the foreseeable future.

Read the The complete ReportTDS is in the portfolios of Michael Price of MFP Investors LLC, Mason Hawkins of Southeastern Asset Management, George Soros of Soros Fund Management LLC.

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