CHICAGO—U.S. Cellular Corp. and its parent company, Telephone and Data Systems Inc., delayed for a fourth time the reporting of their third quarter 2005 results and financial restatements dating back to 2000. The companies said that their year-end 2005 and first quarter 2006 results are also expected to be late; even so, they provided guidance for the full-year 2005 and for fiscal 2006.
TDS and U.S. Cellular were warned in mid-November by the American Stock Exchange that they were out of compliance with listing standards because they had not filed their third quarter financial results. They have so far received three extensions on their filing deadlines while they work on completing the restatements, which must be finished before the later results can be posted.
The most recent extension ended today. However, TDS and U.S. Cellular said they requested another extension, this one until June 30, 2006. The companies are restating the first and second quarters of 2005, each of the quarters of 2003 and 2004, the years 2002-2004 and “certain related financial data” for 2000 and 2001.
“The companies require additional time to complete their financial review, finalize the restatement and obtain required approvals,” TDS and U.S. Cellular said in a statement. “The ongoing review is related to specific accounting issues, primarily in the area of income taxes.”
TDS expects a tax benefit for the third quarter of 2004. According to figures released by U.S. Cellular in November, most of its yearly adjustments for net income fall within a $3 million range of the originally reported figures—with the exception of 2003, where net income could be reduced by as much as $9 million.
The companies said that they plan to file their quarterly and yearly results sequentially as they are completed, but that the filings may not be complete until late May or June.
Besides falling out of compliance with listing standards, the troubles have also put the companies into default on some of their revolving credit agreements. TDS and U.S. Cellular said they obtained waivers on the defaults through March 31, and said they have started discussions with lenders to extend the waivers further.
For its 2005 guidance, U.S. Cellular offered expectations of about $2.8 billion in service revenue for the year and operating revenue between $220 million to $260 million. The company said it expects depreciation, amortization and accretion of about $515 million and capital expenditures of $580 to $590 million. The carrier said its actual net retail customer additions for the year were 411,000 subscribers.
