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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K/A-1
(Mark One)
X ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 1993
OR
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Commission file number 1-9712
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TELEPHONE AND DATA SYSTEMS, INC.
(Exact name of Registrant as specified in its charter)
______________________________________________________________
Iowa 36-2669023
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State or other jurisdiction (IRS Employer Identification No.)
of incorporation or organization)
30 North LaSale Street, Chicago, Illinois 60602
(Address of principal executive offices) (Zip code)
Registrant's Telephone Number: (312) 630-1900
Securities registered pursuant to Section 12(b) of the Act:
Name of each exchange
Title of each class on which registered
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Common Shares, $1 par value American Stock Exchange
Securities registered pursuant to Section 12(g) of the Act: None
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Indicate by check mark whether the registrant (1) has filed
all reports required to be filed by Section 13 or 15(d) of the
Securities Exchange Act of 1934 during the preceding 12 months
(or for such shorter period that the registrant was required
to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.
Yes X No
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Indicate by check mark if disclosure of delinquent filers
pursuant to Item 405 of Regulation S-K is not contained
herein, and will not be contained, to the best of registrant's
knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any
amendment to this Form 10-K. X
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As of March 7, 1994, the aggregate market values of the
registrant's Common Shares, Series A Common Shares and
Preferred Shares held by nonaffiliates were approximately
$2.026 billion $16.5 million and $62.2 million, respectively.
The closing price of the Common Shares on March 7, 1994, was
$44.625, as reported by the American Stock Exchange. Because
no market exists for the Series A Common Shares and Preferred
Shares, the registrant has assumed for purposes hereof that
(i) each Series A Common Share has a market value equal to one
Common Share because the Series A Common Shares were initially
issued by the registrant in exchange for Common Shares on a
one-for-one basis and are convertible on a share-for-share
basis into Common Shares, (ii) each share of nonconvertible
Preferred Share has a market value of $100 because each of
such shares had a stated value of $100 when issued, and
(iii) each convertible Preferred Share has a value of $44.625
times the number of Common Shares into which it was
convertible on March 7, 1994.
The number of shares outstanding of each of the
registrant's classes of common stock, as of March 7, 1994, is
45,669,568 Common Shares, $1 par value, and 6,881,001 Series A
Common Shares, $1 par value.
DOCUMENT INCORPORATED BY REFERENCE
Those sections or portions of the registrant's 1993 Annual
Report to Shareholders described in the cross reference sheet
and table of contents attached hereto are incorporated by
reference into Parts II and III of this report.
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Telephone and Data Systems, Inc.
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Amendment No. 1
The undersigned registrant hereby amends the following
items in its Annual Report on Form 10-K for the fiscal year
ended December 31, 1993, as set forth in the pages submitted
herewith:
1. Compilation Report of Independent Public Accountants on
Combined Financial Statements.
2. Reports of Other Independent Accountants - Report of
Coopers & Lybrand L.L.P. to the Partners of Los Angeles
SMSA Limited Partnership.
3. Note 7 of Los Angeles SMSA Limited Partnership,
Nashville/Clarksville MSA Limited Partnership and Baton
Rouge MSA Limited Partnership Notes to Unaudited
Combined Financial Statements.
4. Exhibit 23.1 Consent of Independent Public Accountants.
5. Exhibit 23.2 Consent of Independent Accountants
Pursuant to the requirements of the Securities Exchange Act
of 1934, the registrant has duly caused this amendment to be
signed on its behalf by the undersigned, thereunto duly
authorized.
Telephone and Data Systems, Inc.
(Registrant)
Date: November 9, 1994 By: /s/ MURRAY L. SWANSON
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Murray L. Swanson
Executive Vice President-Finance
(Principal Financial Officer)
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COMPILATION REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
To the Shareholders and Board of Directors of
Telephone and Data Systems, Inc.:
The accompanying combined balance sheets of the Los Angeles
SMSA Limited Partnership, the Nashville/Clarksville MSA
Limited Partnership and the Baton Rouge MSA Limited
Partnership as of December 31, 1993 and 1992 and the related
combined statements of operations, changes in partners'
capital, and cash flows for each of the three years in the
period ended December 31, 1993, have been prepared from the
separate financial statements, which are not presented
separately herein, of the Los Angeles SMSA,
Nashville/Clarksville MSA and Baton Rouge MSA limited
partnerships, as described in Note 1. We have reviewed for
compilation only the accompanying combined financial
statements, and, in our opinion, those statements have been
properly compiled from the amounts and notes of the underlying
separate financial statements of the Los Angeles SMSA,
Nashville/Clarksville MSA and Baton Rouge MSA limited
partnerships, on the basis described in Note 1.
The statements for the Los Angeles SMSA,
Nashville/Clarksville MSA and Baton Rouge MSA limited
partnerships were audited by other auditors as set forth in
their reports included on pages 50 through 54. The report of
the other auditors of the Los Angeles SMSA Limited Partnership
contains explanatory paragraphs with respect to the
uncertainties discussed in the third, fourth, fifth and sixth
paragraphs of Note 7. We have not been engaged to audit either
the separate financial statements of the aforementioned
limited partnerships or the related combined financial
statements in accordance with generally accepted auditing
standards and to render an opinion as to the fair presentation
of such financial statements in accordance with generally
accepted accounting principles.
As discussed in "Change in Accounting Principle" in Note 2,
the method of accounting for cellular sales commissions was
changed effective January 1, 1991, for the
Nashville/Clarksville MSA Limited Partnership and the Baton
Rouge MSA Limited Partnership.
ARTHUR ANDERSEN LLP
Chicago, Illinois
February 11, 1994 (except with respect to the matters
discussed in the third, fifth and sixth paragraphs of Note 7,
as to which the date is October 17, 1994.)
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REPORTS OF OTHER INDEPENDENT ACCOUNTANTS
To The Partners of
LOS ANGELES SMSA LIMITED PARTNERSHIP:
We have audited the balance sheets of Los Angeles SMSA
Limited Partnership as of December 31, 1993 and 1992, and the
related statements of operations, partners' capital and cash
flows for each of the three years in the period ended
December 31, 1993; such financial statements are not included
separately herein. These financial statements are the
responsibility of the Partnership's management. Our
responsibility is to express an opinion on these financial
statements based on our audits.
We conducted our audits in accordance with generally
accepted auditing standards. Those standards require that we
plan and perform an audit to obtain reasonable assurance about
whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the
financial statements. An audit also includes assessing the
accounting principles used and significant estimates made by
management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a
reasonable basis for our opinion.
In our opinion, the financial statements referred to above
present fairly, in all material respects, the financial
position of Los Angeles SMSA Limited Partnership as of
December 31, 1993 and 1992, and results of its operations and
its cash flows for each of the three years in the period ended
December 31, 1993 in conformity with generally accepted
accounting principles.
As discussed in Note 9 to the financial statements, the
Partnership has been named in three separate complaints served
by cellular agents. The outcome of these matters is uncertain
and, accordingly, no accrual for these matters has been made
in the financial statements.
In addition, as discussed in Note 9, three class action
suits were filed against the Partnership alleging violations
of state and federal antitrust laws. The outcome of these
matters is uncertain and, accordingly, no accrual for these
matters has been made in the financial statements.
COOPERS & LYBRAND L.L.P
Newport Beach, California
February 4, 1994, except for the information presented in
paragraphs three, five and six of Note 9, as to which the date
is October 17, 1994.
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LOS ANGELES SMSA LIMITED PARTNERSHIP
NASHVILLE/CLARKSVILLE MSA LIMITED PARTNERSHIP
BATON ROUGE MSA LIMITED PARTNERSHIP
NOTES TO UNAUDITED COMBINED FINANCIAL STATEMENTS
7. Contingencies and Commitments:
On June 28, 1993, an applicant for an unserved area license
in the Los Angeles market filed an informal objection with the
FCC to one of the Partnerships' System Information Update map.
The applicant claims the Partnership was not legally
authorized to provide service in parts of its described
service area. The applicant requests that the FCC correct the
Partnership's service area to eliminate such areas and
suggests the FCC impose "such sanctions as it deems
appropriate." The Partnership filed a response with the FCC
in which it reported that, in its review of the applicant's
allegations, it found certain errors that were made in its
filings but disputed any of these were intentional. The FCC
could assess penalties against the Partnership for
nonconformance with its license. The outcome of this matter
remains uncertain and, accordingly, the Partnership has not
recorded an accrual. The Partnership intends to defend its
position vigorously.
The Partnership filed for its 10-year license renewal for
the Los Angeles market on August 30, 1993. The Partnership is
currently operating with FCC authority while the renewal
application is pending resolution of the FCC's decision on
claims mentioned above. The Partnership fully expects that
its license will be renewed.
One of the Partnerships has been named in three separate
complaints served by agents of the competing carrier of the
Partnership against the competitor. The general allegations
include violations of California Unfair Practices Act and
price fixing. The ultimate outcome of these actions is
uncertain at this time. Accordingly, no accrual for these
contingencies has been made. The Partnership intends to
defend its position vigorously.
On November 24, 1993, a class action suit was filed against
one of the Partnerships and another cellular carrier alleging
conspiracy to fix the price of cellular service in violation
of state and federal antitrust laws. The plaintiffs are
seeking substantial monetary damages and injunctive relief in
excess of $100 million. The outcome of this matter is
uncertain and, accordingly, the Partnership has not recorded
an accrual. The Partnership intends to defend its position
vigorously.
On July 18, 1994, one of the Partnerships was served with a
class action suit on behalf of the Partnership's contract
Agents and Dealers. The complaint alleges "predatory
practices" and seeks damages in excess of $1.6 million per
agent and dealer, plus statutory treble damages. The outcome
of this matter is uncertain and, accordingly, the Partnership
has not recorded an accrual. The Partnership intends to
defend its position vigorously.
On October 17, 1994, a class action suit was filed against
one of the Partnerships. The suit alleges a conspiracy with a
competing carrier to fix the prices of cellular service in
violation of federal antitrust laws. The plaintiffs are
seeking damages for the class of an unspecified sum. The
outcome of this matter is uncertain and, accordingly, the
Partnership has not recorded an accrual. The Partnership
intends to defend its position vigorously.
One of the Partnerships is a party to various other
lawsuits arising in the ordinary course of business. In the
opinion of management, based on a review of such litigation
with legal counsel, any losses resulting from these actions
are not expected to materially impact the financial condition
of the Partnership.
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LOS ANGELES SMSA LIMITED PARTNERSHIP
NASHVILLE/CLARKSVILLE MSA LIMITED PARTNERSHIP
BATON ROUGE MSA LIMITED PARTNERSHIP
NOTES TO UNAUDITED COMBINED FINANCIAL STATEMENTS (Continued)
Two of the Partnerships provide cellular service and sell
cellular telephones to diversified groups of consumers within
concentrated geographical areas. The general partner performs
credit evaluations of the Partnerships' customers and
generally does not require collateral. Receivables are
generally due within 30 days. Credit losses related to
customers have been within management's expectations.
One of the Partnerships purchases substantially all of its
equipment from one supplier.
The General Partner of two of the Partnerships entered into
agreements with an equipment vendor on behalf of the
Partnerships to replace the Partnerships' cellular equipment
with new cellular technology which will support both analog
and digital voice transmissions.
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EXHIBIT 23.1
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to
the incorporation by reference in this Form 10-K of Telephone
and Data Systems, Inc., of our report dated February 8, 1994,
on the consolidated financial statements of Telephone and Data
Systems, Inc. and Subsidiaries (the "Company") included in the
Company's 1993 Annual Report to Shareholders, to the inclusion
in this Form 10-K of our report dated February 8, 1994, on the
financial statement schedules of the Company, and to the
inclusion in this Form 10-K of our compilation report dated
February 11, 1994 (except with respect to the matters
discussed in the third, fifth, and sixth paragraphs of Note 7,
as to which the date is October 17, 1994), on the combined
financial statements of the Los Angeles SMSA Limited
Partnership, the Nashville/Clarksville MSA Limited
Partnership, and the Baton Rouge MSA Limited Partnership,
and to the incorporation of such reports into the Company's
previously filed S-8 Registration Statements, File No.
33-1192, File No. 33-4420, File No. 33-35172, and File No.
33-50747, and into the Company's previously filed S-3
Registration Statements, File No. 33-8564, File No. 33-8857,
File No. 33-8858, File No. 33-28348 and File No. 33-68456, and
into the Company's previously filed S-4 Registration
Statements, File No. 33-45570, File No. 33-65986, File No.
33-68988 and File No. 33-53283.
ARTHUR ANDERSEN LLP
Chicago, Illinois
November 7, 1994
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EXHIBIT 23.2
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the inclusion in this Form 10-K/A-1
of Telephone and Data Systems, Inc., of our report, which
includes explanatory paragraphs relating to contingencies,
dated February 4, 1994, except for the information presented
in paragraphs three, five and six of Note 9, as to which the
date is October 17, 1994, on our audits of the financial
statements of the Los Angeles SMSA Limited Partnership as of
December 31, 1993 and 1992, and for each of the three years in
the period ended December 31, 1993; such financial statements
are not included separately in this Form 10-K/A-1.
COOPERS & LYBRAND L.L.P.
Newport Beach, California
November 2, 1994
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the inclusion in this Form 10-K of
Telephone and Data Systems, Inc., of our reports dated
February 11, 1994, February 11, 1993 and February 10, 1992,
which included an explanatory paragraph relating to a change
in accounting method, on our audits of the financial
statements of the Nashville/Clarksville MSA Limited
Partnership as of December 31, 1993, 1992 and 1991, and for
the years ended December 31, 1993, 1992 and 1991; such
financial statements are not included separately in this Form
10-K.
COOPERS & LYBRAND L.L.P.
Atlanta, Georgia
November 2, 1994
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the inclusion in this Form 10-K of
Telephone and Data Systems, Inc., of our reports dated
February 11, 1994, February 11, 1993 and February 10, 1992,
which included an explanatory paragraph relating to a change
in accounting method, on our audits of the financial
statements of the Baton Rouge MSA Limited Partnership as of
December 31, 1993, 1992 and 1991, and for the years ended
December 31, 1993, 1992 and 1991; such financial statements
are not included separately in this Form 10-K.
COOPERS & LYBRAND L.L.P.
Atlanta, Georgia
November 2, 1994
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