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Press Release Details

U.S. Cellular reports fourth quarter and full year 2016 results

02/24/2017

Provides 2017 guidance
As previously announced, U.S. Cellular will hold a teleconference February 24, 2017 at 9:30 a.m. CST. Listen to the live call via the Events & Presentations page of investors.uscellular.com.

CHICAGO, Feb. 24, 2017 /PRNewswire/ -- United States Cellular Corporation (NYSE:USM) reported total operating revenues of $991 million for the fourth quarter of 2016, versus $987 million for the same period one year ago. Net loss attributable to U.S. Cellular shareholders and related diluted loss per share were $6 million and $0.07, respectively, for the fourth quarter of 2016, compared to $2 million and $0.02, respectively, in the comparable period one year ago. 

U.S. Cellular reported total operating revenues of $3,939 million and $3,997 million for the years ended 2016 and 2015, respectively.  Net income attributable to U.S. Cellular shareholders and related diluted earnings per share were $48 million and $0.56, respectively, for the year ended 2016, compared to $241 million and $2.84, respectively, for the year ended 2015.

For the full year 2016, after adjusting for discrete items, U.S. Cellular generated Operating Cash Flow of $631 million, up 2% from 2015 and Adjusted EBITDA of $829 million, up 4% from 2015.  Discrete items include a $58 million revenue benefit in 2015 related to the discontinuation of the loyalty rewards program and 2016 includes a $13 million expense related to the discontinuation of a naming rights agreement.  A reconciliation can be found on the Company's website.

"2016 was a year of continued progress for U.S. Cellular," said Kenneth R. Meyers, U.S. Cellular President and CEO. "Our local and personal approach to providing an exceptional customer experience continues to stand out, generating consistently low-levels of phone churn each quarter. As some of the most competitive pricing promotions persist across the industry, we have worked to balance growth and profitability, which enabled us to hit our profitability targets, albeit with slower customer growth. Greater smartphone adoption and increased data usage, combined with strong cost management, helped to offset some of the competitive pricing pressures throughout the year. 

"We continue to invest in our network which is the foundation of our value proposition.  In 2016 we provided additional capacity to handle the 20% growth in data traffic and readied one of our largest markets, Iowa, for VoLTE deployment.  This was accomplished while managing our capital expenditures to the lowest level in 15 years.

"As we look into 2017, we are focusing on building our customer base through our superior network and outstanding customer service, while remaining disciplined in our promotional efforts. We will continue to drive costs out of the business, while capitalizing on opportunities to drive additional revenue via accessory sales, the internet of things, and business and government connections."

2017 Estimated Results

U.S. Cellular's estimates of full-year 2017 results are shown below.  Such estimates represent management's view as of February 24, 2017.  Such forward‑looking statements should not be assumed to be current as of any future date.  U.S. Cellular undertakes no duty to update such information, whether as a result of new information, future events or otherwise.  There can be no assurance that final results will not differ materially from such estimated results.



2017 Estimated Results and Actual Results for the Year Ended December 31, 2016









Estimate


Actual

(Dollars in millions)






Total operating revenues (1)


$3,800-$4,000


$

3,939

Operating cash flow (2)


$500-$650


$

618

Adjusted EBITDA (2)


$650-$800


$

816

Capital expenditures


Approx. $ 500


$

446

The following table provides reconciliation to Operating Cash Flow and Adjusted EBITDA for 2017 estimated results, and actual results for the year ended December 31, 2016.  In providing 2017 Estimated Results, U.S. Cellular has not completed the below reconciliation to net income because it does not provide guidance for income taxes.  Although potentially significant, U.S. Cellular believes that the impact of income taxes cannot be reasonably predicted; therefore, the company is unable to provide such guidance.  Accordingly, a reconciliation to net income is not available without unreasonable effort. 







2017 Estimated Results



Actual Results for the Year
Ended

December 31, 2016

(Dollars in millions)







Net income (loss) (GAAP)



N/A


$

49

Add back:








Income tax expense (benefit)



N/A



33

Income (loss) before income taxes (GAAP)


$

(110)-40


$

82

Add back:








Interest expense



110



113


Depreciation, amortization and accretion expense



630



618

EBITDA (Non-GAAP)


$

630-780


$

813

Add back (deduct):








(Gain) loss on sale of business and other exit costs, net






(Gain) loss on license sales and exchanges, net





(19)


(Gain) loss on assets disposals, net



20



22

Adjusted EBITDA (Non-GAAP) (2)


$

650-800


$

816

Deduct:








Equity in earnings of unconsolidated entities



140



140


Interest and dividend income(1)



10



57


Other, net





1

Operating cash flow (Non-GAAP) (2)(3)


$

500-650


$

618










Note: Totals may not foot due to rounding differences.



(1)

In 2016, Imputed interest related to equipment installment plans was recorded in Interest and dividend income.  Beginning in 2017, imputed interest will be recorded in service revenues.  The company recorded $51 million in imputed interest in 2016.



(2)

Adjusted EBITDA (earnings before interest, taxes, depreciation, amortization and accretion) is defined as net income adjusted for the items set forth in the reconciliation above.  Operating cash flow is defined as net income adjusted for the items set forth in the reconciliation above.  Adjusted EBITDA and Operating cash flow are not measures of financial performance under Generally Accepted Accounting Principles in the United States ("GAAP") and should not be considered as alternatives to Net income or Cash flows from operating activities, as indicators of cash flows or as measures of liquidity.  U.S. Cellular does not intend to imply that any such items set forth in the reconciliation above are non-recurring, infrequent or unusual; such items may occur in the future.  Management uses Adjusted EBITDA and Operating cash flow as measurements of profitability, and therefore reconciliations to applicable GAAP income measures are deemed appropriate.  Management believes Adjusted EBITDA and Operating cash flow are useful measures of U.S. Cellular's operating results before significant recurring non-cash charges, gains and losses, and other items as presented above as they provide additional relevant and useful information to investors and other users of U.S. Cellular's financial data in evaluating the effectiveness of its operations and underlying business trends in a manner that is consistent with management's evaluation of business performance.  Adjusted EBITDA shows adjusted earnings before interest, taxes, depreciation, amortization and accretion, and gains and losses, while Operating cash flow reduces this measure further to exclude Equity in earnings of unconsolidated entities and Interest and dividend income in order to more effectively show the performance of operating activities excluding investment activities.  The table above reconciles Adjusted EBITDA and Operating cash flow to the corresponding GAAP measure, Net income or Income (loss) before income taxes.    



(3)

A reconciliation of Operating cash flow (Non-GAAP) to Operating income (GAAP) for full year 2016, 2015 and 2014 actual results can be found on the Guidance and Reconciliation page of the company's website at investors.uscellular.com.

Conference Call Information

U.S. Cellular will hold a conference call on February 24, 2017 at 9:30 a.m. Central Time.

Before the call, certain financial and statistical information to be discussed during the call will be posted to investors.uscellular.com. The call will be archived on the Events & Presentations page of investors.uscellular.com.

About U.S. Cellular

United States Cellular Corporation provides a comprehensive range of wireless products and services, excellent customer support, and a high-quality network to 5 million connections in 23 states. The Chicago-based company had 6,300 full- and part-time associates as of December 31, 2016. At December 31, 2016, Telephone and Data Systems, Inc. owned 83 percent of U.S. Cellular. For more information about U.S. Cellular, visit uscellular.com.

Safe Harbor Statement Under the Private Securities Litigation Reform Act of 1995:  All information set forth in this news release, except historical and factual information, represents forward-looking statements. This includes all statements about the company's plans, beliefs, estimates, and expectations. These statements are based on current estimates, projections, and assumptions, which involve certain risks and uncertainties that could cause actual results to differ materially from those in the forward-looking statements. Important factors that may affect these forward-looking statements include, but are not limited to: intense competition; the ability to execute U.S. Cellular's business strategy; uncertainties in U.S. Cellular's future cash flows and liquidity and access to the capital markets; the ability to make payments on U.S. Cellular indebtedness or comply with the terms of debt covenants; impacts of any pending acquisitions/divestitures/exchanges of properties and/or licenses,  including, but not limited to, the ability to obtain regulatory approvals, successfully complete the transactions and the financial impacts of such transactions; the ability of the company to successfully manage and grow its markets; the ability to obtain or maintain roaming arrangements with other carriers on acceptable terms; the state and federal telecommunications regulatory environment; the value of assets and investments; adverse changes in the ratings afforded U.S. Cellular debt securities by accredited ratings organizations; industry consolidation; advances in telecommunications technology; pending and future litigation; changes in income tax rates, laws, regulations or rulings; changes in customer growth rates, average monthly revenue per user, churn rates, roaming revenue and terms, the availability of wireless devices, or the mix of products and services offered by U.S. Cellular. Investors are encouraged to consider these and other risks and uncertainties that are discussed in the Form 8-K Current Report used by U.S. Cellular to furnish this press release to the Securities and Exchange Commission ("SEC"), which are incorporated by reference herein.   

For more information about U.S. Cellular, visit:
U.S. Cellular: www.uscellular.com



United States Cellular Corporation

Summary Operating Data (Unaudited)
















Quarter Ended


12/31/2016



9/30/2016



6/30/2016



3/31/2016



12/31/2015

Retail Connections
















Postpaid

















Total at end of period


4,482,000



4,484,000



4,490,000



4,454,000



4,409,000



Gross additions


187,000



174,000



197,000



215,000



240,000




Feature phones


7,000



10,000



8,000



9,000



10,000




Smartphones


109,000



105,000



107,000



124,000



132,000




Connected devices


71,000



59,000



82,000



82,000



98,000



Net additions (losses)


(2,000)



(6,000)



36,000



45,000



68,000




Feature phones


(21,000)



(20,000)



(21,000)



(25,000)



(25,000)




Smartphones


(4,000)



(7,000)



8,000



20,000



23,000




Connected devices


23,000



21,000



49,000



50,000



70,000



ARPU (1)

$

45.19


$

47.08


$

47.37


$

48.13


$

51.46



ABPU (Non-GAAP)(2)

$

55.43


$

56.79


$

56.09


$

56.06


$

58.57



ARPA (3)

$

120.67


$

125.31


$

124.91


$

125.36


$

131.96



ABPA (Non-GAAP)(4)

$

148.02


$

151.16


$

147.90


$

145.99


$

150.19



Churn rate (5)


1.41%



1.34%



1.20%



1.28%



1.31%




Handsets


1.23%



1.22%



1.10%



1.18%



1.23%




Connected devices


2.49%



2.04%



1.84%



2.01%



1.95%



Smartphone penetration (6)


79%



78%



77%



75%



74%


Prepaid

















Total at end of period


484,000



480,000



413,000



399,000



387,000



Gross additions


83,000



132,000



73,000



75,000



69,000



Net additions


4,000



67,000



14,000



12,000



7,000



ARPU (1)

$

33.25


$

34.39


$

34.58


$

35.51


$

35.54



Churn rate (5)


5.44%



4.84%



4.86%



5.37%



5.40%

Total connections at end of period (7)


5,031,000



5,030,000



4,973,000



4,926,000



4,876,000

Smartphones sold as a percent of total handsets sold


 

93%



 

92%



 

91%



 

92%



 

91%

Market penetration at end of period
















Consolidated operating population


31,994,000



31,994,000



31,994,000



31,994,000



31,967,000


Consolidated operating penetration (8)


16%



16%



16%



15%



15%

Capital expenditures (millions)

$

171


$

103


$

93


$

79


$

198

Total cell sites in service


6,415



6,374



6,324



6,306



6,297

Owned towers


4,040



4,015



3,988



3,989



3,978





















(1)

Average Revenue Per User ("ARPU") - metric calculated by dividing a revenue base by an average number of connections and by the number of months in the period.  These revenue bases and connection populations are shown below:




Postpaid ARPU consists of total postpaid service revenues and postpaid connections.




Prepaid ARPU consists of total prepaid service revenues and prepaid connections.

(2)

Average Billings Per User ("ABPU") - non-GAAP metric calculated by dividing total postpaid service revenues plus equipment installment plan billings by the average number of postpaid connections and by the number of months in the period.  Refer to the end of this release for a reconciliation of this metric to its most comparable GAAP metric.

(3)

Average Revenue Per Account ("ARPA") - metric calculated by dividing total postpaid service revenues by the average number of postpaid accounts and by the number of months in the period.

(4)

Average Billings Per Account ("ABPA") - non-GAAP metric calculated by dividing total postpaid service revenues plus equipment installment plan billings by the average number of postpaid accounts and by the number of months in the period.  Refer to the end of this release for a reconciliation of this metric to its most comparable GAAP metric.

(5)

Churn rate represents the percentage of the connections that disconnect service each month.  These rates represent the average monthly churn rate for each respective period.

(6)

Smartphone penetration is calculated by dividing postpaid smartphone connections by postpaid handset connections.

(7)

Includes reseller and other connections.

(8)

Market penetration is calculated by dividing the number of wireless connections at the end of the period by the total population of consolidated operating markets as estimated by Nielsen.

 


United States Cellular Corporation

Consolidated Statement of Operations Highlights

(Unaudited)





Three Months Ended December 31,






2016 vs. 2015




2016


2015


Increase (Decrease)

(Dollars and shares in millions, except per share amounts)











Operating revenues












Service

$

737


$

802


$

(65)


(8)%


Equipment sales


254



185



69


37%



Total operating revenues


991



987



4


-














Operating expenses












System operations (excluding Depreciation, amortization and accretion reported below)


188



189



(1)


-


Cost of equipment sold


283



274



9


3%


Selling, general and administrative


390



388



2


1%


Depreciation, amortization and accretion


156



156




-


(Gain) loss on asset disposals, net


6



4



2


43%


(Gain) loss on license sales and exchanges, net


(3)





(3)


N/M



Total operating expenses


1,020



1,011



9


1%














Operating loss


(29)



(24)



(5)


(21)%














Investment and other income (expense)












Equity in earnings of unconsolidated entities


30



30




-


Interest and dividend income


16



10



6


53%


Interest expense


(29)



(25)



(4)


17%


Other, net


1



1




(13)%



Total investment and other income


18



16



2


9%














Loss before income taxes


(11)



(8)



(3)


(49)%


Income tax benefit


(6)



(5)



(1)


(24)%














Net loss


(5)



(3)



(2)


(95)%


Less: Net income (loss) attributable to noncontrolling interests, net of tax


1



(1)



2


>(100)%

Net loss attributable to U.S. Cellular shareholders

$

(6)


$

(2)


$

(4)


>(100)%













Basic weighted average shares outstanding


85



84



1


1%

Basic loss per share attributable to U.S. Cellular shareholders

$

(0.07)


$

(0.02)


$

(0.05)


>(100)%














Diluted weighted average shares outstanding


85



84



1


1%

Diluted loss per share attributable to U.S. Cellular shareholders

$

(0.07)


$

(0.02)


$

(0.05)


>(100)%


N/M - Percentage change not meaningful














 


United States Cellular Corporation

Consolidated Statement of Operations Highlights

(Unaudited)


















Year Ended December 31,






2016 vs. 2015




2016


2015


Increase (Decrease)

(Dollars and shares in millions, except per share amounts)











Operating revenues












Service

$

3,030


$

3,350


$

(320)


(10)%


Equipment sales


909



647



262


41%



Total operating revenues


3,939



3,997



(58)


(1)%














Operating expenses












System operations (excluding Depreciation, amortization and accretion reported below)


760



775



(15)


(2)%


Cost of equipment sold


1,081



1,053



28


3%


Selling, general and administrative


1,480



1,494



(14)


(1)%


Depreciation, amortization and accretion


618



607



11


2%


(Gain) loss on asset disposals, net


22



16



6


36%


(Gain) loss on sale of business and other exit costs, net




(114)



114


100%


(Gain) loss on license sales and exchanges, net


(19)



(147)



128


87%



Total operating expenses


3,942



3,684



258


7%














Operating income (loss)


(3)



313



(316)


>(100)%














Investment and other income (expense)












Equity in earnings of unconsolidated entities


140



140




-


Interest and dividend income


57



36



21


57%


Interest expense


(113)



(86)



(27)


(31)%


Other, net


1



1




10%



Total investment and other income


85



91



(6)


(7)%














Income before income taxes


82



404



(322)


(80)%


Income tax expense


33



157



(124)


(79)%














Net income


49



247



(198)


(80)%


Less: Net income attributable to noncontrolling interests, net of tax


1



6



(5)


(71)%

Net income attributable to U.S. Cellular shareholders

$

48


$

241


$

(193)


(80)%













Basic weighted average shares outstanding


85



84



1


1%

Basic earnings per share attributable to U.S. Cellular shareholders

$

0.56


$

2.86


$

(2.30)


(80)%














Diluted weighted average shares outstanding


85



85




1%

Diluted earnings per share attributable to U.S. Cellular shareholders

$

0.56


$

2.84


$

(2.28)


(80)%


N/M - Percentage change not meaningful

 


United States Cellular Corporation

Consolidated Statement of Cash Flows

(Unaudited)





Year Ended December 31,


2016


2015

(Dollars in millions)






Cash flows from operating activities







Net income

$

49


$

247


Add (deduct) adjustments to reconcile net income (loss) to net







   cash flows from operating activities








Depreciation, amortization and accretion


618



607



Bad debts expense


96



106



Stock-based compensation expense


26



25



Deferred income taxes, net


6



55



Equity in earnings of unconsolidated entities


(140)



(140)



Distributions from unconsolidated entities


93



60



(Gain) loss on asset disposals, net


22



16



(Gain) loss on sale of business and other exit costs, net




(114)



(Gain) loss on license sales and exchanges, net


(19)



(147)



Noncash interest expense


2



2



Other operating activities


(2)




Changes in assets and liabilities from operations








Accounts receivable


(23)



(96)



Equipment installment plans receivable


(246)



(134)



Inventory


8



118



Accounts payable


48



5



Customer deposits and deferred revenues


(54)



(37)



Accrued taxes


40



34



Accrued interest


(2)



4



Other assets and liabilities


(21)



(56)




Net cash provided by operating activities


501



555










Cash flows from investing activities







Cash paid for additions to property, plant and equipment


(443)



(581)


Cash paid for acquisitions and licenses


(53)



(286)


Cash received from divestitures and exchanges


21



317


Federal Communications Commission deposit


(143)




Other investing activities




1




Net cash used in investing activities


(618)



(549)










Cash flows from financing activities







Issuance of long-term debt




525


Repayment of long-term debt


(11)




Common shares reissued for benefit plans, net of tax payments


6



2


Common shares repurchased


(5)



(6)


Payment of debt issuance costs


(2)



(13)


Acquisition of towers in common control transaction




(2)


Distributions to noncontrolling interests


(1)



(6)


Payments to acquire additional interest in subsidiaries




(2)


Other financing activities


1



(1)




Net cash provided by (used in) financing activities


(12)



497










Net increase (decrease) in cash and cash equivalents


(129)



503










Cash and cash equivalents







Beginning of period


715



212


End of period

$

586


$

715

 

United States Cellular Corporation

Consolidated Balance Sheet Highlights

(Unaudited)








ASSETS










December 31,


December 31,



2016


2015

(Dollars in millions)






Current assets







Cash and cash equivalents

$

586


$

715


Accounts receivable from customers and others, net


727



672


Inventory, net


138



149


Prepaid expenses


84



81


Other current assets


23



55


Total current assets


1,558



1,672








Assets held for sale


8










Licenses


1,886



1,834

Goodwill


370



370

Investments in unconsolidated entities


413



363








Property, plant and equipment







In service and under construction


7,712



7,669


Less: Accumulated depreciation


5,242



5,020


          Property, plant and equipment, net


2,470



2,649








Other assets and deferred charges


405



172








Total assets

$

7,110


$

7,060








 

United States Cellular Corporation

Consolidated Balance Sheet Highlights

(Unaudited)









LIABILITIES AND EQUITY












December 31,


December 31,




2016


2015

(Dollars and shares in millions, except per share amounts)






Current liabilities







Current portion of long-term debt

$

11


$

11


Accounts payable








Affiliated


12



10



Trade


309



275


Customer deposits and deferred revenues


190



251


Accrued taxes


39



28


Accrued compensation


73



68


Other current liabilities


84



105



Total current liabilities


718



748









Deferred liabilities and credits







Net deferred income tax liability, net


826



821


Other deferred liabilities and credits


302



290









Long-term debt, net


1,618



1,629









Noncontrolling interests with redemption features


1



1









Equity






U.S. Cellular shareholders' equity







Series A Common and Common Shares, par value $1 per share


88



88


Additional paid-in capital


1,522



1,497


Treasury shares


(136)



(157)


Retained earnings


2,160



2,133



Total U.S. Cellular shareholders' equity


3,634



3,561









Noncontrolling interests


11



10










Total equity


3,645



3,571









Total liabilities and equity

$

7,110


$

7,060









 


United States Cellular Corporation

Financial Measures and Reconciliations

(Unaudited)












Free Cash Flow and Adjusted Free Cash Flow















Three Months Ended


Year Ended





December 31,


December 31,




2016



2015



2016



2015

(Dollars in millions)













Cash flows from operating activities (GAAP)


$

86


$


$

501


$

555

Less: Cash used for additions to property, plant and equipment



163



174



443



581



Free cash flow



(77)



(174)



58



(26)

Add: Sprint Cost Reimbursement



1



2



7



30


Adjusted free cash flow (Non-GAAP) (1) 


$

(76)


$

(172)


$

65


$

4


















(1)

Management uses Free cash flow as a liquidity measure and it is defined as Cash flows from operating activities less Cash paid for additions to property, plant and equipment.  Adjusted free cash flow is defined as Cash flows from operating activities (which includes cash outflows related to the Sprint decommissioning), as adjusted for cash proceeds from the Sprint Cost Reimbursement (which are included in Cash flows from investing activities in the Consolidated Statement of Cash Flows), less Cash paid for additions to property, plant and equipment.  Sprint decommissioning and Sprint Cost Reimbursement are further defined and discussed in our Annual Report on Form 10-K for the year ended December 31, 2016.  Free cash flow and Adjusted free cash flow are non-GAAP financial measures which U.S. Cellular believes may be useful to investors and other users of its financial information in evaluating the amount of cash generated by business operations (including cash proceeds from the Sprint Cost Reimbursement), after Cash paid for additions to property, plant and equipment.

Postpaid ABPU and Postpaid ABPA

U.S. Cellular presents Postpaid ABPU and Postpaid ABPA to reflect the revenue shift from Service revenues to Equipment sales resulting from the increased adoption of equipment installment plans.  Postpaid ABPU and Postpaid ABPA, as previously defined, are non-GAAP financial measures which U.S. Cellular believes are useful to investors and other users of its financial information in showing trends in both service and equipment revenues received from customers.

For the Quarter Ended


12/31/2016



9/30/2016



6/30/2016



3/31/2016



12/31/2015

(Dollars and connection counts in millions)















Calculation of Postpaid ARPU















Postpaid service revenues

$

607


$

635


$

636


$

639


$

674

Average number of postpaid connections


4.48



4.49



4.48



4.43



4.37

Number of months in period


3



3



3



3



3


Postpaid ARPU (GAAP metric)

$

45.19


$

47.08


$

47.37


$

48.13


$

51.46


















Calculation of Postpaid ABPU















Postpaid service revenues

$

607


$

635


$

636


$

639


$

674

Equipment installment plan billings


138



131



118



105



93


Total billings to postpaid connections

$

745


$

766


$

754


$

744


$

767

Average number of postpaid connections


4.48



4.49



4.48



4.43



4.37

Number of months in period


3



3



3



3



3


Postpaid ABPU (Non-GAAP metric)

$

55.43


$

56.79


$

56.09


$

56.06


$

58.57


















Calculation of Postpaid ARPA















Postpaid service revenues

$

607


$

635


$

636


$

639


$

674

Average number of postpaid accounts


1.68



1.69



1.70



1.70



1.70

Number of months in period


3



3



3



3



3


Postpaid ARPA (GAAP metric)

$

120.67


$

125.31


$

124.91


$

125.36


$

131.96


















Calculation of Postpaid ABPA















Postpaid service revenues

$

607


$

635


$

636


$

639


$

674

Equipment installment plan billings


138



131



118



105



93


Total billings to postpaid accounts

$

745


$

766


$

754


$

744


$

767

Average number of postpaid accounts


1.68



1.69



1.70



1.70



1.70

Number of months in period


3



3



3



3



3


Postpaid ABPA (Non-GAAP metric)

$

148.02


$

151.16


$

147.90


$

145.99


$

150.19

 

To view the original version on PR Newswire, visit:http://www.prnewswire.com/news-releases/us-cellular-reports-fourth-quarter-and-full-year-2016-results-300413193.html

SOURCE United States Cellular Corporation

Jane McCahon, Senior Vice President - Corporate Relations and Corporate Secretary of TDS, 312-592-5379, jane.mccahon@tdsinc.com, Julie Mathews, IRC, Director - Investor Relations of TDS, 312-592-5341, julie.mathews@tdsinc.com