TDS Reports Excellent First Quarter Results

Apr 17, 2001, 01:00 ET from Telephone and Data Systems, Inc.

    CHICAGO, April 17 /PRNewswire/ -- Telephone and Data Systems, Inc.
 (Amex:   TDS) reported operating revenues of $600.4 million for the first
 quarter of 2001, up 11.5% from the comparable period a year ago.  Operating
 cash flow increased 3.8% to $197.4 million from $190.2 million in the first
 quarter of a year ago.  Diluted earnings per share from continuing operations,
 excluding gains and losses, was $.52 compared to $.47 in the first quarter a
 year ago.
 
     First Quarter Highlights
 
      -- U.S. Cellular's net customer unit activations from marketing channels,
         a key driver of growth, increased 9% to 114,000; cost per gross add
         fell dramatically to $308; and, the postpay churn rate continued to
         fall to a very low 1.7%.
 
      -- TDS Telecom's CLEC business, TDS Metrocom, recorded 83% revenue growth
         for the quarter while the ILEC business recorded solid operating
         results, including a sizable improvement in operating cash flow
         margin.
 
      -- TDS repurchased 110,000 shares during the quarter at an average cost
         of $94.02 per share.  A total of 1.2 million shares remain under the
         existing authorization.
 
     LeRoy T. Carlson, Jr., President and Chief Executive Officer said:
 "Telephone and Data Systems, Inc. had a strong start in 2001, reaffirming our
 confidence that we can achieve the ambitious growth targets we have set for
 the year.  U.S. Cellular posted 114,000 customer additions, a very strong
 increase, and at the same time continued to pace the wireless industry with a
 low 1.7% churn rate.  Our cost per gross add declined as we continued to
 realize marketing and selling efficiencies.  U.S. Cellular's continuing growth
 is especially impressive in the light of the uncertain economic environment.
     "TDS Telecom also had a strong quarter with 6.4 % revenue growth and a
 sharp uptick in the operating cash flow margin in its established ILEC
 business.  We are especially pleased with the success of our new products,
 notably our new long distance offering, True Talk.  True Talk has attracted
 over 60,000 customers in its first eight months of availability.  We were also
 encouraged by the enthusiasm with which our ILEC customers have embraced
 broadband DSL service in our pilot markets.  Our CLEC operation, TDS Metrocom,
 continued to attract customers rapidly in its established markets in Wisconsin
 where access lines grew more than 100% over last year's comparable period.
 TDS Metrocom also made good progress in the build out of its new markets in
 northern Illinois and Michigan."
     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 and projections, 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:  changes in the overall economy; changes in competition in the markets in
 which TDS operates; advances in telecommunications technology; changes in the
 telecommunications regulatory environment; pending and future litigation;
 acquisitions/divestitures of properties and or licenses; changes in customer
 growth rates, penetration rates, churn rates, roaming rates and the mix of
 products and services offered in our markets.  Investors are encouraged to
 consider these and other risks and uncertainties that are discussed in
 documents filed by TDS with Securities and Exchange Commission ("SEC").
     TDS is a diversified telecommunications corporation founded in 1969.
 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.  The Company currently employs approximately 9,000 people and serves
 approximately 4 million customers in 34 states.
     As previously announced, TDS and its subsidiaries will hold a joint
 teleconference on April 17, 2001 at 10:00 central daylight savings time.
 Interested parties may listen to the call live over the Internet found in the
 conference call section of www.teldta.com or connect by telephone at
 785/832-0301 passcode: TDSI.  The conference call will also be archived on the
 conference call section of our website at www.teldta.com .
 
     For more information about TDS and its subsidiaries, visit the web sites
 at:
     TDS:  http://www.teldta.com        TDS Telecom:  http://www.tdstelecom.com
     USM:  http://www.uscellular.com
 
 
                          TELEPHONE AND DATA SYSTEMS, INC.
                               SUMMARY OPERATING DATA
 
     Quarter Ended                             3/31/01     12/31/00    9/30/00
 
     U.S. Cellular:
     Total pops (A)                             26,676      26,646      26,592
     TDS's proportionate share                  21,920      21,959      21,988
     Consolidated Markets:
        Pops owned (000s)                       24,607      24,208      24,191
        Total population (000s)                 25,670      25,075      24,900
        Customer units                       3,221,000   3,061,000   2,890,000
        Net customer adds                      114,000     171,000     107,000
        Market penetration                      12.55%      12.21%      11.61%
        Markets in operation                       142         139         138
        Cell sites in service                    2,597       2,501       2,430
        Average monthly revenue per unit
           Local retail                         $34.39      $36.00      $37.25
           Inbound roaming                        6.74        7.42        9.17
           Long-distance and other                3.52        4.07        4.49
              Total                             $44.65      $47.49      $50.91
        Minutes of use (MOU) (B)                   181         176         170
        Postpay churn rate per month              1.7%        1.8%        1.8%
        Marketing cost per gross customer
         add                                      $308        $327        $321
 
     TDS Telecom:
        ILECs:
        Sales and service offices                  110         110         110
        Access lines                           602,300     601,200     598,400
        Growth in ILEC access lines from
           prior quarter-end:
              Acquisitions                        ---         ---         ---
              Internal growth                    1,100       2,800       3,900
        Average monthly revenue
           per access line                      $74.50      $76.56      $74.11
        Access line equivalents (C)            623,400     619,600     614,300
        Internet service accounts               77,664      72,140      69,300
        Long Distance customers (D)             60,300      40,500      18,400
        Caller I.D. penetration (E)              27.5%       26.8%       26.1%
        Voicemail penetration (E)                12.7%       12.4%       12.2%
        CLECs:
        Access line equivalents - total
         CLECs (C)                             128,200     112,100      98,000
           TDS Metrocom                         77,400      63,200      52,600
           USLink                               50,800      48,900      45,400
        Internet service accounts               12,100      11,200      10,700
        Percent of access lines on-switch:
           TDS Metrocom                         100.0%      100.0%      100.0%
           U.S. Link                             15.0%       13.3%        8.9%
        Digital Subscriber Lines (DSL):
           TDS Metrocom                          3,061       2,261       1,637
 
 
                          TELEPHONE AND DATA SYSTEMS, INC.
                               SUMMARY OPERATING DATA
 
     Quarter Ended                                  6/30/00         03/31/2000
 
     U.S. Cellular:
     Total pops (A)                                  26,407            26,406
     TDS's proportionate share                       21,759            21,467
     Consolidated Markets:
        Pops owned (000s)                            24,247            24,209
        Total population (000s)                      25,044            25,044
        Customer units                            2,807,000         2,707,000
        Net customer adds                           100,000           105,000
        Market penetration                           11.21%            10.81%
        Markets in operation                            139               139
        Cell sites in service                         2,392             2,331
        Average monthly revenue per unit
           Local retail                              $37.38            $35.40
           Inbound roaming                             9.10              9.21
           Long-distance and other                     4.16              3.16
               Total                                 $50.64            $47.77
        Minutes of use (MOU) (B)                        156               128
        Postpay churn rate per month                   1.7%              1.8%
        Marketing cost per gross customer
         add                                           $335              $338
 
     TDS Telecom:
        ILECs:
        Sales and service offices                       110               109
        Access lines                                594,500           576,100
        Growth in ILEC access lines from
           prior quarter-end:
               Acquisitions                          10,200              ---
               Internal growth                        8,200             4,400
        Average monthly revenue
           per access line                           $74.88            $73.41
        Access line equivalents (C)                 608,400           588,700
        Internet service accounts                    70,300            68,000
        Long Distance customers (D)                     N/A               N/A
        Caller I.D. penetration (E)                   25.2%             24.5%
        Voicemail penetration (E)                     11.9%             11.7%
        CLECs:
        Access line equivalents - total
         CLECs (C)                                   87,700            76,100
           TDS Metrocom                              45,100            37,400
           USLink                                    42,600            38,700
        Internet service accounts                     9,400             8,700
        Percent of access lines on-switch:
           TDS Metrocom                              100.0%            100.0%
           U.S. Link                                   8.9%              8.1%
        Digital Subscriber Lines (DSL):
           TDS Metrocom                               1,211               796
 
 
     (A) Population equivalents ("Pops"), owned and acquirable, in thousands
     (B) Average monthly local minutes of use (without roaming)
     (C) Access line equivalents are derived by converting high capacity data
         lines to the estimated capacity of one switched access line.  Basic
         rate ISDN = 2 DS0s; Primary rate ISDN = 23 DS0s; T1 = 24 DS0s; Trunk
         Lines = 1
     (D) TDS Telecom began offering "TDS True Talk" resale long distance to its
         customers beginning on August 1, 2000, with availability phased in to
         its service areas throughout August and September.
     (E) Caller I.D. and Voice Mail penetration is the total residential and
         business one-party customers purchasing the service divided by the
         total of these lines equipped for the service.
 
 
                          TELEPHONE AND DATA SYSTEMS, INC.
                                FINANCIAL HIGHLIGHTS
                            Three Months Ended March 31,
            (Unaudited, dollars in thousands, except per share amounts)
                                                                  Increase
                                                                 (Decrease)
                                             2001      2000    Amount  Percent
     Operating Revenues
        U.S. Cellular                      $439,769  $394,157  $45,612   11.6%
        TDS Telecom                         160,600   144,170   16,430   11.4%
                                            600,369   538,327   62,042   11.5%
     Operating Expenses Before
      Depreciation and Amortization
        U.S. Cellular                       309,947   267,500   42,447   15.9%
        TDS Telecom                          92,995    80,588   12,407   15.4%
                                            402,942   348,088   54,854   15.8%
     Operating Cash Flow (Operating Income
      Plus Depreciation and Amortization)
        U.S. Cellular                       129,822   126,657    3,165    2.5%
        TDS Telecom                          67,605    63,582    4,023    6.3%
                                            197,427   190,239    7,188    3.8%
     Depreciation and Amortization**
        U.S. Cellular                        71,339    66,008    5,331    8.1%
        TDS Telecom                          35,598    32,720    2,878    8.8%
     **includes amortization of $17,988
      and $16,411, respectively             106,937    98,728    8,209    8.3%
     Operating Income
        U.S. Cellular                        58,483    60,649   (2,166)  (3.6%)
        TDS Telecom                          32,007    30,862    1,145    3.7%
                                             90,490    91,511   (1,021)  (1.1%)
     Investment and Other Income
        Interest and Dividend Income          5,522     2,470    3,052  123.6%
        Investment Income, Net                6,965     1,659    5,306      N/M
        Gain (Loss) on Cellular and Other
         Investments                           ---     17,851  (17,851)     N/M
        Other (Expense), Net                  1,988    (2,411)   4,399      N/M
                                             14,475    19,569   (5,094) (26.0%)
     Income Before Interest and Income
      Taxes                                 104,965   111,080   (6,115)  (5.5%)
        Interest Expense                     28,957    22,829    6,128   26.8%
        Minority Interest in Income of
         Subsidiary Trust                     6,203     6,203     ---       N/M
     Income Before Income Taxes              69,805    82,048  (12,243) (14.9%)
        Income Tax Expense                   30,614    36,334   (5,720) (15.7%)
     Income Before Minority Interest         39,191    45,714   (6,523) (14.3%)
        Minority Share of (Income), net of
         tax                                 (7,969)  (10,189)   2,220   21.8%
     Income Before Extraordinary Item        31,222    35,525   (4,303) (12.1%)
     Extraordinary Item - loss on
      extinguishment of debt, net of tax     (2,988)     ---    (2,988)     N/M
     Cumulative effect of accounting
      change                                   ---     (3,841)   3,841      N/M
     Net Income                              28,234    31,684   (3,450) (10.9%)
        Preferred Dividend Requirement         (118)     (134)      16   11.9%
     Net Income Available to Common         $28,116   $31,550  $(3,434) (10.9%)
     Basic Average Common Shares
      Outstanding (000s)                     58,718    61,078   (2,360)  (3.9%)
     Basic Earnings Per Share
        Continuing Operations                 $0.53     $0.58   $(0.05)  (8.6%)
        Extraordinary Item                    (0.05)     ---     (0.05)     N/M
        Cumulative effect of accounting
         change                                ---      (0.06)    0.06      N/M
                                              $0.48     $0.52   $(0.04)  (7.7%)
     Diluted Average Common Shares
      Outstanding (000s)                     59,262    61,837   (2,575)  (4.2%)
     Diluted Earnings Per Share
        Continuing Operations                 $0.52     $0.57   $(0.05)  (8.8%)
        Extraordinary Item                    (0.05)     ---     (0.05)     N/M
        Cumulative effect of accounting
         change                                ---      (0.06)    0.06      N/M
                                              $0.47     $0.51   $(0.04)  (7.8%)
     Diluted EPS Continuing Operations--
      Excluding Gains (Losses)                $0.52     $0.47    $0.05   10.6%
     Diluted EPS Continuing Operations--
      Gains (Losses)                           $-       $0.10   $(0.10)     N/M
 
     N/M - Percentage change not meaningful.
 
 
                         TELEPHONE AND DATA SYSTEMS, INC.
                       CONSOLIDATED BALANCE SHEET HIGHLIGHTS
                         (Unaudited, dollars in thousands)
 
                                      ASSETS
 
                                                   March 31,      December 31,
                                                     2001              2000
     Current Assets
        Cash and cash equivalents                   $39,014           $99,019
        Temporary investments                         3,640             3,616
        Accounts receivable from customers
         and other                                  311,825           337,485
        Notes receivable                             46,292               817
        Materials and supplies, at average
         cost, and
           other current assets                      77,716            86,163
                                                    478,487           527,100
     Investments
        Intangible Assets
           Cellular license costs, net            1,248,974         1,167,776
           Franchise and other costs                202,031           203,532
        Marketable equity securities              3,733,547         4,121,904
        Investments in unconsolidated
         entities                                   191,007           233,710
        Notes Receivable                             91,624           128,707
        Other investments                            13,450            13,588
                                                  5,480,633         5,869,217
     Property, Plant and Equipment, net
        U.S. Cellular                             1,337,016         1,265,347
        TDS Telecom                                 916,192           920,678
                                                  2,253,208         2,186,025
 
     Other Assets and Deferred Charges               55,618            52,267
 
                                                 $8,267,946        $8,634,609
 
 
                         TELEPHONE AND DATA SYSTEMS, INC.
                       CONSOLIDATED BALANCE SHEET HIGHLIGHTS
                         (Unaudited, dollars in thousands)
 
                      LIABILITIES AND STOCKHOLDERS' EQUITY
 
                                                   March 31,      December 31,
                                                     2001              2000
     Current Liabilities
        Current portion of long-term debt           $15,643           $15,639
        Notes payable                               535,500           499,000
        Accounts payable                            235,935           275,901
        Advance billings and customer deposits       70,236            61,958
        Accrued interest                             12,401            24,912
        Accrued taxes                                31,744            17,904
        Accrued compensation                         41,023            52,314
        Other current liabilities                    38,559            36,783
                                                    981,041           984,411
 
     Deferred Liabilities and Credits             1,659,967         1,802,207
 
     Long-term Debt, excluding current portion    1,156,254         1,172,987
 
     Minority Interest                              438,195           431,110
 
     Company-Obligated Mandatorily
      Redeemable Preferred Securities
      of Subsidiary Trust Holding Solely
      Company Subordinated Debentures               300,000           300,000
 
     Preferred Shares                                 7,692             7,827
 
     Common Stockholders' Equity
        Common Shares, $.01 par value                   556               555
        Series A Common Shares, $.01 par value           68                69
        Capital in excess of par value            1,820,041         1,816,619
        Treasury Shares                            (392,016)         (383,501)
        Accumulated other comprehensive income     (404,702)         (178,344)
        Retained earnings                         2,700,850         2,680,669
                                                  3,724,797         3,936,067
                                                 $8,267,946        $8,634,609
 
 
                             BALANCE SHEET HIGHLIGHTS
                                  MARCH 31, 2001
                         (Unaudited, dollars in thousands)
 
                                                U.S.        TDS   TDS Corporate
                                              Cellular    Telecom     & Other
 
     Cash and Cash Equivalents                 $15,960    $24,096      $2,087
     Affiliated Cash Investments                49,429    435,960         ---
     Temporary Cash Investments                      7      3,633         ---
     Notes Receivable--Affiliates                 ---        ---      210,363
                                               $65,396   $463,689    $212,450
 
     License and Franchise Costs, net       $1,210,955   $240,050        $---
     Marketable Equity Securities              288,616     83,262   3,361,669
     Investment in Unconsolidated Entities     146,734     24,660      19,613
     Notes Receivable                           45,222       ---       46,402
     Other Investments                            ---      13,450         ---
                                            $1,691,527   $361,422  $3,427,684
 
     Property, Plant and
       Equipment, net                       $1,337,016   $916,192        $---
 
     Notes Payable: external                   $55,000      $---     $480,500
                    cash management               ---        ---      488,518
                    intercompany                  ---     210,363         ---
                                               $55,000   $210,363    $969,018
     Long-term Debt:
       Current Portion                           $---     $14,991        $652
       Non-current Portion                     435,664    278,734     441,856
          Total                               $435,664   $293,725    $442,508
 
     Trust Originated Preferred Securities       $---       $---     $300,000
 
     Preferred Shares                            $---       $---       $7,692
 
       Total Outstanding Debt and
             Preferred Shares                 $490,664   $504,088  $1,719,218
 
     Construction Expenditures:
        Quarter Ended 3/31/01                 $120,410    $30,935
 
 
                             BALANCE SHEET HIGHLIGHTS
                                  MARCH 31, 2001
                         (Unaudited, dollars in thousands)
 
 
                                                  Intercompany          TDS
                                                  Eliminations     Consolidated
 
     Cash and Cash Equivalents                      $(3,129)           $39,014
     Affiliated Cash Investments                   (485,389)              ---
     Temporary Cash Investments                        ---               3,640
     Notes Receivable -- Affiliates                (210,363)              ---
                                                  $(698,881)           $42,654
 
     License and Franchise Costs, net                 $---          $1,451,005
     Marketable Equity Securities                      ---           3,733,547
     Investment in Unconsolidated Entities             ---             191,007
     Notes Receivable                                  ---              91,624
     Other Investments                                 ---              13,450
                                                      $---          $5,480,633
 
     Property, Plant and
       Equipment, net                                 $---          $2,253,208
 
     Notes Payable:  external                         $---            $535,500
                     cash management               (488,518)              ---
                     intercompany                  (210,363)              ---
                                                  $(698,881)          $535,500
     Long-term Debt:
       Current Portion                                $---             $15,643
       Non-current Portion                             ---           1,156,254
          Total                                       $---          $1,171,897
 
     Trust Originated Preferred Securities            $---            $300,000
 
     Preferred Shares                                 $---              $7,692
 
       Total Outstanding Debt and
             Preferred Shares                     $(698,881)        $2,015,089
 
     Construction Expenditures:
        Quarter Ended 3/31/01                                         $151,345
 
 
                               TDS Telecom Highlights
                            Three Months Ended March 31,
                         (Unaudited, dollars in thousands)
                                                                  Increase
                                                                 (Decrease)
                                              2001     2000    Amount  Percent
     Local Telephone Operations
         Operating Revenues
            Local Service                    $43,126  $40,111  $3,015     7.5%
            Network Access and Long-Distance  74,603   69,256   5,347     7.7%
            Miscellaneous                     16,715   17,004    (289)   (1.7%)
                                             134,444  126,371   8,073     6.4%
         Operating Expenses
            Network Operations                25,884   24,189   1,695     7.0%
            Customer Operations               19,662   19,883    (221)   (1.1%)
            Corporate Expenses                18,717   17,963     754     4.2%
                                              64,263   62,035   2,228     3.6%
 
         Operating Cash Flow                  70,181   64,336   5,845     9.1%
 
         Depreciation and Amortization
            Depreciation                      30,572   29,204   1,368     4.7%
            Amortization                       1,828    1,556     272    17.5%
                                              32,400   30,760   1,640     5.3%
 
         Operating Income                     37,781   33,576   4,205    12.5%
 
     USLink Operations
         Revenues                             12,833   10,691   2,142    20.0%
         Expenses before Depreciation and
          Amortization                        11,958   10,280   1,678    16.3%
         Operating Cash Flow                     875      411     464   112.9%
 
         Depreciation and Amortization           694      455     239    52.5%
 
         Operating Income (Loss)                 181      (44)    225       N/M
 
     TDS Metrocom Operations
         Revenues                             13,784    7,523   6,261    83.2%
         Expenses before Depreciation         17,235    8,688   8,547    98.4%
         Operating Cash Flow                  (3,451)  (1,165) (2,286) (196.2%)
 
         Depreciation                          2,504    1,505     999    66.4%
 
         Operating (Loss)                     (5,955)  (2,670) (3,285) (123.0%)
 
     Intercompany Revenues                      (461)    (415)    (46)      N/M
     Intercompany Expenses                      (461)    (415)    (46)      N/M
                                                 ---      ---     ---       N/M
 
     Total TDS Telecom Operating Income      $32,007  $30,862  $1,145     3.7%
 
     N/M - Percentage change not meaningful.
 
 
 

SOURCE Telephone and Data Systems, Inc.
    CHICAGO, April 17 /PRNewswire/ -- Telephone and Data Systems, Inc.
 (Amex:   TDS) reported operating revenues of $600.4 million for the first
 quarter of 2001, up 11.5% from the comparable period a year ago.  Operating
 cash flow increased 3.8% to $197.4 million from $190.2 million in the first
 quarter of a year ago.  Diluted earnings per share from continuing operations,
 excluding gains and losses, was $.52 compared to $.47 in the first quarter a
 year ago.
 
     First Quarter Highlights
 
      -- U.S. Cellular's net customer unit activations from marketing channels,
         a key driver of growth, increased 9% to 114,000; cost per gross add
         fell dramatically to $308; and, the postpay churn rate continued to
         fall to a very low 1.7%.
 
      -- TDS Telecom's CLEC business, TDS Metrocom, recorded 83% revenue growth
         for the quarter while the ILEC business recorded solid operating
         results, including a sizable improvement in operating cash flow
         margin.
 
      -- TDS repurchased 110,000 shares during the quarter at an average cost
         of $94.02 per share.  A total of 1.2 million shares remain under the
         existing authorization.
 
     LeRoy T. Carlson, Jr., President and Chief Executive Officer said:
 "Telephone and Data Systems, Inc. had a strong start in 2001, reaffirming our
 confidence that we can achieve the ambitious growth targets we have set for
 the year.  U.S. Cellular posted 114,000 customer additions, a very strong
 increase, and at the same time continued to pace the wireless industry with a
 low 1.7% churn rate.  Our cost per gross add declined as we continued to
 realize marketing and selling efficiencies.  U.S. Cellular's continuing growth
 is especially impressive in the light of the uncertain economic environment.
     "TDS Telecom also had a strong quarter with 6.4 % revenue growth and a
 sharp uptick in the operating cash flow margin in its established ILEC
 business.  We are especially pleased with the success of our new products,
 notably our new long distance offering, True Talk.  True Talk has attracted
 over 60,000 customers in its first eight months of availability.  We were also
 encouraged by the enthusiasm with which our ILEC customers have embraced
 broadband DSL service in our pilot markets.  Our CLEC operation, TDS Metrocom,
 continued to attract customers rapidly in its established markets in Wisconsin
 where access lines grew more than 100% over last year's comparable period.
 TDS Metrocom also made good progress in the build out of its new markets in
 northern Illinois and Michigan."
     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 and projections, 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:  changes in the overall economy; changes in competition in the markets in
 which TDS operates; advances in telecommunications technology; changes in the
 telecommunications regulatory environment; pending and future litigation;
 acquisitions/divestitures of properties and or licenses; changes in customer
 growth rates, penetration rates, churn rates, roaming rates and the mix of
 products and services offered in our markets.  Investors are encouraged to
 consider these and other risks and uncertainties that are discussed in
 documents filed by TDS with Securities and Exchange Commission ("SEC").
     TDS is a diversified telecommunications corporation founded in 1969.
 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.  The Company currently employs approximately 9,000 people and serves
 approximately 4 million customers in 34 states.
     As previously announced, TDS and its subsidiaries will hold a joint
 teleconference on April 17, 2001 at 10:00 central daylight savings time.
 Interested parties may listen to the call live over the Internet found in the
 conference call section of www.teldta.com or connect by telephone at
 785/832-0301 passcode: TDSI.  The conference call will also be archived on the
 conference call section of our website at www.teldta.com .
 
     For more information about TDS and its subsidiaries, visit the web sites
 at:
     TDS:  http://www.teldta.com        TDS Telecom:  http://www.tdstelecom.com
     USM:  http://www.uscellular.com
 
 
                          TELEPHONE AND DATA SYSTEMS, INC.
                               SUMMARY OPERATING DATA
 
     Quarter Ended                             3/31/01     12/31/00    9/30/00
 
     U.S. Cellular:
     Total pops (A)                             26,676      26,646      26,592
     TDS's proportionate share                  21,920      21,959      21,988
     Consolidated Markets:
        Pops owned (000s)                       24,607      24,208      24,191
        Total population (000s)                 25,670      25,075      24,900
        Customer units                       3,221,000   3,061,000   2,890,000
        Net customer adds                      114,000     171,000     107,000
        Market penetration                      12.55%      12.21%      11.61%
        Markets in operation                       142         139         138
        Cell sites in service                    2,597       2,501       2,430
        Average monthly revenue per unit
           Local retail                         $34.39      $36.00      $37.25
           Inbound roaming                        6.74        7.42        9.17
           Long-distance and other                3.52        4.07        4.49
              Total                             $44.65      $47.49      $50.91
        Minutes of use (MOU) (B)                   181         176         170
        Postpay churn rate per month              1.7%        1.8%        1.8%
        Marketing cost per gross customer
         add                                      $308        $327        $321
 
     TDS Telecom:
        ILECs:
        Sales and service offices                  110         110         110
        Access lines                           602,300     601,200     598,400
        Growth in ILEC access lines from
           prior quarter-end:
              Acquisitions                        ---         ---         ---
              Internal growth                    1,100       2,800       3,900
        Average monthly revenue
           per access line                      $74.50      $76.56      $74.11
        Access line equivalents (C)            623,400     619,600     614,300
        Internet service accounts               77,664      72,140      69,300
        Long Distance customers (D)             60,300      40,500      18,400
        Caller I.D. penetration (E)              27.5%       26.8%       26.1%
        Voicemail penetration (E)                12.7%       12.4%       12.2%
        CLECs:
        Access line equivalents - total
         CLECs (C)                             128,200     112,100      98,000
           TDS Metrocom                         77,400      63,200      52,600
           USLink                               50,800      48,900      45,400
        Internet service accounts               12,100      11,200      10,700
        Percent of access lines on-switch:
           TDS Metrocom                         100.0%      100.0%      100.0%
           U.S. Link                             15.0%       13.3%        8.9%
        Digital Subscriber Lines (DSL):
           TDS Metrocom                          3,061       2,261       1,637
 
 
                          TELEPHONE AND DATA SYSTEMS, INC.
                               SUMMARY OPERATING DATA
 
     Quarter Ended                                  6/30/00         03/31/2000
 
     U.S. Cellular:
     Total pops (A)                                  26,407            26,406
     TDS's proportionate share                       21,759            21,467
     Consolidated Markets:
        Pops owned (000s)                            24,247            24,209
        Total population (000s)                      25,044            25,044
        Customer units                            2,807,000         2,707,000
        Net customer adds                           100,000           105,000
        Market penetration                           11.21%            10.81%
        Markets in operation                            139               139
        Cell sites in service                         2,392             2,331
        Average monthly revenue per unit
           Local retail                              $37.38            $35.40
           Inbound roaming                             9.10              9.21
           Long-distance and other                     4.16              3.16
               Total                                 $50.64            $47.77
        Minutes of use (MOU) (B)                        156               128
        Postpay churn rate per month                   1.7%              1.8%
        Marketing cost per gross customer
         add                                           $335              $338
 
     TDS Telecom:
        ILECs:
        Sales and service offices                       110               109
        Access lines                                594,500           576,100
        Growth in ILEC access lines from
           prior quarter-end:
               Acquisitions                          10,200              ---
               Internal growth                        8,200             4,400
        Average monthly revenue
           per access line                           $74.88            $73.41
        Access line equivalents (C)                 608,400           588,700
        Internet service accounts                    70,300            68,000
        Long Distance customers (D)                     N/A               N/A
        Caller I.D. penetration (E)                   25.2%             24.5%
        Voicemail penetration (E)                     11.9%             11.7%
        CLECs:
        Access line equivalents - total
         CLECs (C)                                   87,700            76,100
           TDS Metrocom                              45,100            37,400
           USLink                                    42,600            38,700
        Internet service accounts                     9,400             8,700
        Percent of access lines on-switch:
           TDS Metrocom                              100.0%            100.0%
           U.S. Link                                   8.9%              8.1%
        Digital Subscriber Lines (DSL):
           TDS Metrocom                               1,211               796
 
 
     (A) Population equivalents ("Pops"), owned and acquirable, in thousands
     (B) Average monthly local minutes of use (without roaming)
     (C) Access line equivalents are derived by converting high capacity data
         lines to the estimated capacity of one switched access line.  Basic
         rate ISDN = 2 DS0s; Primary rate ISDN = 23 DS0s; T1 = 24 DS0s; Trunk
         Lines = 1
     (D) TDS Telecom began offering "TDS True Talk" resale long distance to its
         customers beginning on August 1, 2000, with availability phased in to
         its service areas throughout August and September.
     (E) Caller I.D. and Voice Mail penetration is the total residential and
         business one-party customers purchasing the service divided by the
         total of these lines equipped for the service.
 
 
                          TELEPHONE AND DATA SYSTEMS, INC.
                                FINANCIAL HIGHLIGHTS
                            Three Months Ended March 31,
            (Unaudited, dollars in thousands, except per share amounts)
                                                                  Increase
                                                                 (Decrease)
                                             2001      2000    Amount  Percent
     Operating Revenues
        U.S. Cellular                      $439,769  $394,157  $45,612   11.6%
        TDS Telecom                         160,600   144,170   16,430   11.4%
                                            600,369   538,327   62,042   11.5%
     Operating Expenses Before
      Depreciation and Amortization
        U.S. Cellular                       309,947   267,500   42,447   15.9%
        TDS Telecom                          92,995    80,588   12,407   15.4%
                                            402,942   348,088   54,854   15.8%
     Operating Cash Flow (Operating Income
      Plus Depreciation and Amortization)
        U.S. Cellular                       129,822   126,657    3,165    2.5%
        TDS Telecom                          67,605    63,582    4,023    6.3%
                                            197,427   190,239    7,188    3.8%
     Depreciation and Amortization**
        U.S. Cellular                        71,339    66,008    5,331    8.1%
        TDS Telecom                          35,598    32,720    2,878    8.8%
     **includes amortization of $17,988
      and $16,411, respectively             106,937    98,728    8,209    8.3%
     Operating Income
        U.S. Cellular                        58,483    60,649   (2,166)  (3.6%)
        TDS Telecom                          32,007    30,862    1,145    3.7%
                                             90,490    91,511   (1,021)  (1.1%)
     Investment and Other Income
        Interest and Dividend Income          5,522     2,470    3,052  123.6%
        Investment Income, Net                6,965     1,659    5,306      N/M
        Gain (Loss) on Cellular and Other
         Investments                           ---     17,851  (17,851)     N/M
        Other (Expense), Net                  1,988    (2,411)   4,399      N/M
                                             14,475    19,569   (5,094) (26.0%)
     Income Before Interest and Income
      Taxes                                 104,965   111,080   (6,115)  (5.5%)
        Interest Expense                     28,957    22,829    6,128   26.8%
        Minority Interest in Income of
         Subsidiary Trust                     6,203     6,203     ---       N/M
     Income Before Income Taxes              69,805    82,048  (12,243) (14.9%)
        Income Tax Expense                   30,614    36,334   (5,720) (15.7%)
     Income Before Minority Interest         39,191    45,714   (6,523) (14.3%)
        Minority Share of (Income), net of
         tax                                 (7,969)  (10,189)   2,220   21.8%
     Income Before Extraordinary Item        31,222    35,525   (4,303) (12.1%)
     Extraordinary Item - loss on
      extinguishment of debt, net of tax     (2,988)     ---    (2,988)     N/M
     Cumulative effect of accounting
      change                                   ---     (3,841)   3,841      N/M
     Net Income                              28,234    31,684   (3,450) (10.9%)
        Preferred Dividend Requirement         (118)     (134)      16   11.9%
     Net Income Available to Common         $28,116   $31,550  $(3,434) (10.9%)
     Basic Average Common Shares
      Outstanding (000s)                     58,718    61,078   (2,360)  (3.9%)
     Basic Earnings Per Share
        Continuing Operations                 $0.53     $0.58   $(0.05)  (8.6%)
        Extraordinary Item                    (0.05)     ---     (0.05)     N/M
        Cumulative effect of accounting
         change                                ---      (0.06)    0.06      N/M
                                              $0.48     $0.52   $(0.04)  (7.7%)
     Diluted Average Common Shares
      Outstanding (000s)                     59,262    61,837   (2,575)  (4.2%)
     Diluted Earnings Per Share
        Continuing Operations                 $0.52     $0.57   $(0.05)  (8.8%)
        Extraordinary Item                    (0.05)     ---     (0.05)     N/M
        Cumulative effect of accounting
         change                                ---      (0.06)    0.06      N/M
                                              $0.47     $0.51   $(0.04)  (7.8%)
     Diluted EPS Continuing Operations--
      Excluding Gains (Losses)                $0.52     $0.47    $0.05   10.6%
     Diluted EPS Continuing Operations--
      Gains (Losses)                           $-       $0.10   $(0.10)     N/M
 
     N/M - Percentage change not meaningful.
 
 
                         TELEPHONE AND DATA SYSTEMS, INC.
                       CONSOLIDATED BALANCE SHEET HIGHLIGHTS
                         (Unaudited, dollars in thousands)
 
                                      ASSETS
 
                                                   March 31,      December 31,
                                                     2001              2000
     Current Assets
        Cash and cash equivalents                   $39,014           $99,019
        Temporary investments                         3,640             3,616
        Accounts receivable from customers
         and other                                  311,825           337,485
        Notes receivable                             46,292               817
        Materials and supplies, at average
         cost, and
           other current assets                      77,716            86,163
                                                    478,487           527,100
     Investments
        Intangible Assets
           Cellular license costs, net            1,248,974         1,167,776
           Franchise and other costs                202,031           203,532
        Marketable equity securities              3,733,547         4,121,904
        Investments in unconsolidated
         entities                                   191,007           233,710
        Notes Receivable                             91,624           128,707
        Other investments                            13,450            13,588
                                                  5,480,633         5,869,217
     Property, Plant and Equipment, net
        U.S. Cellular                             1,337,016         1,265,347
        TDS Telecom                                 916,192           920,678
                                                  2,253,208         2,186,025
 
     Other Assets and Deferred Charges               55,618            52,267
 
                                                 $8,267,946        $8,634,609
 
 
                         TELEPHONE AND DATA SYSTEMS, INC.
                       CONSOLIDATED BALANCE SHEET HIGHLIGHTS
                         (Unaudited, dollars in thousands)
 
                      LIABILITIES AND STOCKHOLDERS' EQUITY
 
                                                   March 31,      December 31,
                                                     2001              2000
     Current Liabilities
        Current portion of long-term debt           $15,643           $15,639
        Notes payable                               535,500           499,000
        Accounts payable                            235,935           275,901
        Advance billings and customer deposits       70,236            61,958
        Accrued interest                             12,401            24,912
        Accrued taxes                                31,744            17,904
        Accrued compensation                         41,023            52,314
        Other current liabilities                    38,559            36,783
                                                    981,041           984,411
 
     Deferred Liabilities and Credits             1,659,967         1,802,207
 
     Long-term Debt, excluding current portion    1,156,254         1,172,987
 
     Minority Interest                              438,195           431,110
 
     Company-Obligated Mandatorily
      Redeemable Preferred Securities
      of Subsidiary Trust Holding Solely
      Company Subordinated Debentures               300,000           300,000
 
     Preferred Shares                                 7,692             7,827
 
     Common Stockholders' Equity
        Common Shares, $.01 par value                   556               555
        Series A Common Shares, $.01 par value           68                69
        Capital in excess of par value            1,820,041         1,816,619
        Treasury Shares                            (392,016)         (383,501)
        Accumulated other comprehensive income     (404,702)         (178,344)
        Retained earnings                         2,700,850         2,680,669
                                                  3,724,797         3,936,067
                                                 $8,267,946        $8,634,609
 
 
                             BALANCE SHEET HIGHLIGHTS
                                  MARCH 31, 2001
                         (Unaudited, dollars in thousands)
 
                                                U.S.        TDS   TDS Corporate
                                              Cellular    Telecom     & Other
 
     Cash and Cash Equivalents                 $15,960    $24,096      $2,087
     Affiliated Cash Investments                49,429    435,960         ---
     Temporary Cash Investments                      7      3,633         ---
     Notes Receivable--Affiliates                 ---        ---      210,363
                                               $65,396   $463,689    $212,450
 
     License and Franchise Costs, net       $1,210,955   $240,050        $---
     Marketable Equity Securities              288,616     83,262   3,361,669
     Investment in Unconsolidated Entities     146,734     24,660      19,613
     Notes Receivable                           45,222       ---       46,402
     Other Investments                            ---      13,450         ---
                                            $1,691,527   $361,422  $3,427,684
 
     Property, Plant and
       Equipment, net                       $1,337,016   $916,192        $---
 
     Notes Payable: external                   $55,000      $---     $480,500
                    cash management               ---        ---      488,518
                    intercompany                  ---     210,363         ---
                                               $55,000   $210,363    $969,018
     Long-term Debt:
       Current Portion                           $---     $14,991        $652
       Non-current Portion                     435,664    278,734     441,856
          Total                               $435,664   $293,725    $442,508
 
     Trust Originated Preferred Securities       $---       $---     $300,000
 
     Preferred Shares                            $---       $---       $7,692
 
       Total Outstanding Debt and
             Preferred Shares                 $490,664   $504,088  $1,719,218
 
     Construction Expenditures:
        Quarter Ended 3/31/01                 $120,410    $30,935
 
 
                             BALANCE SHEET HIGHLIGHTS
                                  MARCH 31, 2001
                         (Unaudited, dollars in thousands)
 
 
                                                  Intercompany          TDS
                                                  Eliminations     Consolidated
 
     Cash and Cash Equivalents                      $(3,129)           $39,014
     Affiliated Cash Investments                   (485,389)              ---
     Temporary Cash Investments                        ---               3,640
     Notes Receivable -- Affiliates                (210,363)              ---
                                                  $(698,881)           $42,654
 
     License and Franchise Costs, net                 $---          $1,451,005
     Marketable Equity Securities                      ---           3,733,547
     Investment in Unconsolidated Entities             ---             191,007
     Notes Receivable                                  ---              91,624
     Other Investments                                 ---              13,450
                                                      $---          $5,480,633
 
     Property, Plant and
       Equipment, net                                 $---          $2,253,208
 
     Notes Payable:  external                         $---            $535,500
                     cash management               (488,518)              ---
                     intercompany                  (210,363)              ---
                                                  $(698,881)          $535,500
     Long-term Debt:
       Current Portion                                $---             $15,643
       Non-current Portion                             ---           1,156,254
          Total                                       $---          $1,171,897
 
     Trust Originated Preferred Securities            $---            $300,000
 
     Preferred Shares                                 $---              $7,692
 
       Total Outstanding Debt and
             Preferred Shares                     $(698,881)        $2,015,089
 
     Construction Expenditures:
        Quarter Ended 3/31/01                                         $151,345
 
 
                               TDS Telecom Highlights
                            Three Months Ended March 31,
                         (Unaudited, dollars in thousands)
                                                                  Increase
                                                                 (Decrease)
                                              2001     2000    Amount  Percent
     Local Telephone Operations
         Operating Revenues
            Local Service                    $43,126  $40,111  $3,015     7.5%
            Network Access and Long-Distance  74,603   69,256   5,347     7.7%
            Miscellaneous                     16,715   17,004    (289)   (1.7%)
                                             134,444  126,371   8,073     6.4%
         Operating Expenses
            Network Operations                25,884   24,189   1,695     7.0%
            Customer Operations               19,662   19,883    (221)   (1.1%)
            Corporate Expenses                18,717   17,963     754     4.2%
                                              64,263   62,035   2,228     3.6%
 
         Operating Cash Flow                  70,181   64,336   5,845     9.1%
 
         Depreciation and Amortization
            Depreciation                      30,572   29,204   1,368     4.7%
            Amortization                       1,828    1,556     272    17.5%
                                              32,400   30,760   1,640     5.3%
 
         Operating Income                     37,781   33,576   4,205    12.5%
 
     USLink Operations
         Revenues                             12,833   10,691   2,142    20.0%
         Expenses before Depreciation and
          Amortization                        11,958   10,280   1,678    16.3%
         Operating Cash Flow                     875      411     464   112.9%
 
         Depreciation and Amortization           694      455     239    52.5%
 
         Operating Income (Loss)                 181      (44)    225       N/M
 
     TDS Metrocom Operations
         Revenues                             13,784    7,523   6,261    83.2%
         Expenses before Depreciation         17,235    8,688   8,547    98.4%
         Operating Cash Flow                  (3,451)  (1,165) (2,286) (196.2%)
 
         Depreciation                          2,504    1,505     999    66.4%
 
         Operating (Loss)                     (5,955)  (2,670) (3,285) (123.0%)
 
     Intercompany Revenues                      (461)    (415)    (46)      N/M
     Intercompany Expenses                      (461)    (415)    (46)      N/M
                                                 ---      ---     ---       N/M
 
     Total TDS Telecom Operating Income      $32,007  $30,862  $1,145     3.7%
 
     N/M - Percentage change not meaningful.
 
 
 SOURCE  Telephone and Data Systems, Inc.