TDS reports second quarter 2014 results Aug 1, 2014 07:54AM

CHICAGO, Aug. 1, 2014 /PRNewswire/ -- Telephone and Data Systems, Inc. (NYSE: TDS) reported total operating revenues of $1,236.4 million for the second quarter of 2014, versus $1,228.2 million for the comparable period one year ago. Net income (loss) attributable to TDS shareholders and related diluted earnings (loss) per share were $(22.0) million and $(0.20) respectively, for the second quarter of 2014, compared to $156.1 million and $1.42, respectively, in the comparable period one year ago.  Year-over-year comparisons are affected by U.S. Cellular's divestiture transaction and acquisitions at TDS Telecom, in 2013.

"Our businesses were productive in the second quarter. We're seeing positive results from strategic growth initiatives we've implemented over the last few years," said LeRoy T. Carlson, Jr., TDS president and CEO.

"U.S. Cellular generated strong gross customer additions and significantly reduced postpaid churn in the quarter, leading to net postpaid customer growth in June. Our high-quality 4G LTE network, competitive service plans, devices, pricing and our new equipment installment plans helped drive smartphone penetration to 55 percent, which increased data usage and helped us achieve higher average revenue per postpaid customer.

"TDS Telecom posted another solid quarter of earnings and revenue growth, fueled by residential TDS TV customer additions, broadband speed upgrades, and commercial managedIP connections, and by realizing significant cost reductions. We continue to be excited about the growth potential in our cable business. At Baja Broadband, we are working to improve our video offerings and increase broadband penetration. We also are focused on ensuring a smooth completion to our BendBroadband acquisition in the third quarter. In our hosted and managed services business, OneNeck IT Solutions, we increased revenues through growth in recurring services and through the effect of acquisitions."

2014 Estimated ResultsEstimates of full-year 2014 results for U.S. Cellular, TDS Telecom and TDS are shown below.  Such estimates represent management's view as of August 1, 2014.  Such forward-looking statements should not be assumed to be current as of any future date.  TDS 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.

2014 Estimated Results

U.S. Cellular

TDS Telecom (1)

TDS (1)(3)

Current

Previous

Current

Previous

Current

Previous

(Dollars in millions)

Total operating revenues

$3,900-$4,000

N/A

$1,050-$1,100

Unchanged

$4,970-$5,120

N/A

Adjusted income before income taxes (2)

$350-$450

N/A

$260-$290

$250-$280

$605-$735

N/A

Capital expenditures

$640

Unchanged

$200

Unchanged

$850

N/A

(1)

These estimates do not reflect the effects of the acquisition of BendBroadband.

(2)

Adjusted income before income taxes is defined as income before income taxes, adjusted for the items set forth in the reconciliation below. Adjusted income before income taxes excludes these items in order to show operating results on a more comparable basis from period to period. From time to time, TDS may exclude other items from adjusted income before income taxes if such items help reflect operating results on a more comparable basis. TDS does not intend to imply that any such items that are excluded are non-recurring, infrequent or unusual; such items may occur in the future.  Adjusted income before income taxes is not a measure of financial performance under Generally Accepted Accounting Principles in the United States ("GAAP") and should not be considered as an alternative to income before income taxes as an indicator of the company's operating performance or as an alternative to cash flows from operating activities, determined in accordance with GAAP, as an indicator of cash flows or as a measure of liquidity. TDS believes adjusted income before income taxes is a useful measure of TDS' operating results before significant recurring non-cash charges, discrete gains and losses, and financing charges (interest expense). The following tables provide a reconciliation of income before income taxes to adjusted income before income taxes for 2014 estimated results, six months ended June 30, 2014 actual results, and year ended December 31, 2013 actual results:

2014 Estimated Results

U.S. Cellular

TDS Telecom (1)

TDS (1)(3)

(Dollars in millions)

Income (loss) before income taxes

($189)-($89)

$35-$65

($249)-($119)

Depreciation, amortization and accretion

$630

$225

$865

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

($50)

 ―   

($25)

(Gain) loss on license sales and exchanges

($91)

 ―   

($91)

Interest expense

$50

 ―   

$105

Adjusted income before income taxes

$350-$450

$260-$290

$605-$735

 

Actual Results

Six months ended June 30, 2014

Year ended December 31, 2013

U.S. Cellular

TDS

Telecom

TDS (3)

U.S. Cellular

TDS

Telecom

TDS (3)

(Dollars in millions)

Income (loss) before income taxes

$1

$39

($7)

$258

$49

$293

Depreciation, amortization and

accretion expense

$316

$107

$429

$804

$203

$1,018

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

($17)

($4)

($247)

($301)

(Gain) loss on license sales and exchanges

($91)

($91)

($255)

($255)

(Gain) loss on investments

($19)

($1)

($15)

Interest expense

$29

($1)

$56

$44

($2)

$99

Adjusted income before income taxes

$238

$145

$383

$585

$249

$839

(3)

The TDS column includes U.S. Cellular, TDS Telecom and also the impacts of consolidating eliminations, corporate operations and non-reportable segments, all of which are not presented above.

 

Stock Repurchase SummaryTDS began repurchasing stock under its $250 million repurchase authorization on Aug. 5, 2013.   The following represents repurchases of TDS Common Shares.

Repurchase Period

# Shares

Cost (in millions)

2014 (second quarter)

650,628

$

17.3

2014 (first quarter)

157,891

$

3.8

2013 (full year)

338,851

$

9.7

Total

1,147,370

$

30.8

 

Conference Call InformationTDS will hold a conference call on Aug. 1, 2014 at 9:30 a.m. CDT.

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

About TDSTelephone and Data Systems, Inc. (TDS), a Fortune 1000® company, provides wireless; cable and wireline broadband, TV and voice; and hosted and managed services to approximately 5.8 million customers nationwide through its business units, U.S. Cellular, TDS Telecom, OneNeck IT Solutions and Baja Broadband. Founded in 1969 and headquartered in Chicago, TDS employed 10,100 people as of June 30, 2014.

Visit www.teldta.com for comprehensive financial information, including earnings releases, quarterly and annual filings, shareholder information and more.

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: impacts of any pending acquisition and divestiture transactions,  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 overall economy; competition; the access to and pricing of unbundled network elements; 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 TDS and U.S. Cellular debt securities by accredited ratings organizations; industry consolidation; advances in telecommunications technology; uncertainty of access to the capital markets;  pending and future litigation; changes in income tax rates, laws, regulations or rulings; acquisitions/divestitures of properties and/or licenses; 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 and TDS Telecom. Investors are encouraged to consider these and other risks and uncertainties that are discussed in the Form 8-K Current Report used by TDS to furnish this press release to the Securities and Exchange Commission ("SEC"), which are incorporated by reference herein.   

For more information about TDS and its subsidiaries, visit:TDS: www.teldta.com U.S. Cellular: www.uscellular.com TDS Telecom: www.tdstelecom.com OneNeck IT Solutions: www.oneneck.com

United States Cellular Corporation

Total Markets* Summary Operating Data (Unaudited)

As of or for the Quarter Ended

6/30/2014

3/31/2014

12/31/2013

9/30/2013

6/30/2013

Retail Customers

Postpaid

Total at end of period

4,148,000

4,174,000

4,267,000

4,343,000

4,412,000

Gross additions

190,000

197,000

176,000

165,000

165,000

Net additions (losses)

(26,000)

(93,000)

(71,000)

(60,000)

(120,000)

ARPU (1)

$

56.82

$

57.59

$

53.53

$

54.64

$

54.18

Churn rate (2)

1.7%

2.3%

1.9%

1.7%

2.0%

Smartphone penetration (3)

55.3%

53.1%

50.8%

47.1%

45.5%

Prepaid

Total at end of period

352,000

356,000

343,000

370,000

381,000

Gross additions

65,000

85,000

63,000

65,000

77,000

Net additions (losses)

(4,000)

13,000

(26,000)

(11,000)

(7,000)

ARPU (1)

$

34.02

$

32.22

$

31.66

$

28.72

$

31.69

Churn rate (2)

6.5%

6.9%

8.3%

6.8%

6.8%

Total customers at end of period

4,653,000

4,684,000

4,774,000

4,875,000

4,968,000

Billed ARPU (1)

$

53.36

$

53.93

$

50.25

$

50.92

$

50.60

Service revenue ARPU (1)

$

60.32

$

60.19

$

57.05

$

58.36

$

57.45

Smartphones sold as a percent of total

  devices sold

72.6%

73.0%

79.6%

65.2%

66.0%

Total population

Consolidated markets (4)

54,817,000

54,817,000

58,013,000

84,025,000

84,025,000

Consolidated operating markets (4)

31,729,000

31,729,000

31,759,000

31,822,000

31,822,000

Market penetration at end of period

Consolidated markets (5)

8.5%

8.5%

8.2%

5.8%

5.9%

Consolidated operating markets (5)

14.7%

14.8%

15.0%

15.3%

15.6%

Capital expenditures (000s)

$

143,927

$

89,581

$

208,135

$

242,459

$

168,497

Total cell sites in service

6,183

6,165

6,975

7,687

7,748

Owned towers

4,457

4,448

4,448

4,422

4,411

*

Represents U.S. Cellular's consolidated markets. These results include markets which U. S. Cellular currently consolidates, or previously consolidated in the periods presented, and are not adjusted in prior periods for subsequent divestitures or deconsolidations.

Refer to U.S. Cellular's Form 8-K filed on August 2, 2013 for pro forma financial information related to the Divestiture Transaction and the NY1 and NY2 Deconsolidation for the three and six months ended June 30, 2013, as if the transactions had occurred at the beginning of the period.

 

United States Cellular Corporation

Core* Markets Summary Operating Data (Unaudited)

As of or for the Quarter Ended

6/30/2014

3/31/2014

12/31/2013

9/30/2013

6/30/2013

Retail Customers

Postpaid

Total at end of period

4,148,000

4,174,000

4,267,000

4,343,000

4,412,000

Gross additions

190,000

197,000

176,000

165,000

165,000

Net additions (losses)

(26,000)

(93,000)

(71,000)

(60,000)

(53,000)

ARPU (1)

$

56.82

$

57.59

$

53.53

$

54.64

$

54.44

Churn rate (2)

1.7%

2.3%

1.9%

1.7%

1.6%

Smartphone penetration (3)

55.3%

53.1%

50.8%

47.1%

45.5%

Prepaid

Total at end of period

352,000

356,000

343,000

370,000

381,000

Gross additions

65,000

85,000

63,000

65,000

76,000

Net additions (losses)

(4,000)

13,000

(26,000)

(11,000)

8,000

ARPU (1)

$

34.02

$

32.22

$

31.66

$

28.72

$

31.65

Churn rate (2)

6.5%

6.9%

8.3%

6.8%

6.0%

Total customers at end of period

4,653,000

4,684,000

4,774,000

4,875,000

4,968,000

Billed ARPU (1)

$

53.36

$

53.93

$

50.25

$

50.92

$

50.98

Service revenue ARPU (1)

$

60.32

$

60.19

$

57.05

$

58.36

$

57.88

Smartphones sold as a percent of total

  devices sold

72.6%

73.0%

79.6%

65.2%

66.1%

Total population

Consolidated markets (4)

54,817,000

54,817,000

58,013,000

84,025,000

84,025,000

Consolidated operating markets (4)

31,729,000

31,729,000

31,759,000

31,822,000

31,822,000

Market penetration at end of period

Consolidated markets (5)

8.5%

8.5%

8.2%

5.8%

5.9%

Consolidated operating markets (5)

14.7%

14.8%

15.0%

15.3%

15.6%

Capital expenditures (000s)

$

143,927

$

89,581

$

211,247

$

239,332

$

171,166

Total cell sites in service

6,183

6,165

6,161

6,127

6,113

Owned towers

3,892

3,883

3,883

3,857

3,846

*

U.S. Cellular's Core Markets excludes the results of the Divestiture Markets and NY1 and NY2 Partnerships for the periods presented.

Refer to U.S. Cellular's Form 8-K filed on August 2, 2013 for pro forma financial information related to the Divestiture Transaction and the NY1 and NY2 Deconsolidation for the three and six months ended June 30, 2013, as if the transactions had occurred at the beginning of the period.

(1)

ARPU metrics are calculated by dividing a revenue base by an average number of customers by the number of months in the period.  These revenue bases and customer populations are shown below:

     a.      Postpaid ARPU consists of total postpaid service revenues and postpaid customers.

     b.      Prepaid ARPU consists of total prepaid service revenues and prepaid customers.

     c.      Billed ARPU consists of total retail service or "billed" revenues (total postpaid, prepaid and reseller service revenues) and postpaid, prepaid and reseller customers.

     d.      Service revenue ARPU consists of total retail service revenues, inbound roaming and other service revenues and postpaid, prepaid and reseller customers.

(2)

Churn metrics represent the percentage of the postpaid or prepaid customers that disconnect service each month. These metrics represent the average monthly postpaid or prepaid churn rate for each respective period.

(3)

Smartphones represent wireless devices which run on an Android, Apple, BlackBerry or Windows Mobile operating system, excluding tablets. Smartphone penetration is calculated by dividing postpaid smartphone customers by total postpaid customers.

(4)

The decrease in the population of Consolidated markets is due primarily to the divestiture of the Mississippi Valley non-operating license in October 2013 and the majority of the St. Louis area non-operating market license in March 2014. Total Population is used only to calculate market penetration of consolidated markets and consolidated operating markets, respectively. See footnote (5) below.

(5)

Market penetration is calculated by dividing the number of wireless customers at the end of the period by the total population of consolidated markets and consolidated operating markets, respectively, as estimated by Claritas.  The increase in penetration is due primarily to a lower denominator as a result of the license divestitures described in footnote (4) above.

 

TDS Telecom

Summary Operating Data (Unaudited)

Quarter Ended

6/30/2014

3/31/2014

12/31/2013

9/30/2013

6/30/2013

TDS Telecom

Wireline

Residential connections

Voice (1)

346,100

348,700

352,100

358,100

364,100

Broadband (2)

232,700

229,000

227,000

229,500

231,700

IPTV (3)

18,200

15,900

13,800

12,200

10,500

   Wireline residential connections

597,000

593,600

592,900

599,800

606,300

Total residential revenue per connection (4)

$

41.05

$

40.79

$

40.93

$

41.12

$

40.10

Commercial connections

Voice (1)

206,200

212,200

218,400

223,800

229,100

Broadband (2)

26,000

26,600

27,100

27,600

28,200

managedIP (5)

133,300

131,000

127,600

121,000

112,000

   Wireline commercial connections

365,500

369,800

373,100

372,400

369,300

Total Wireline connections

962,500

963,400

966,000

972,200

975,600

Cable

Cable Connections

Video (6)

69,700

68,700

69,100

70,300

Broadband (7)

63,200

63,000

61,000

59,800

Voice (7)

17,800

17,700

17,200

16,800

   Cable connections

150,700

149,400

147,300

146,900

Total residential revenue per connection (4)

$

56.80

$

57.37

$

55.27

$

55.67

(1)

The individual circuit connecting customers to TDS Telecom's central office facilities.

(2)

The number of customers provided high-capacity data circuits via various technologies, including DSL and dedicated internet circuit technologies.

(3)

The number of customers provided video services using IP networking technology.

(4)

Total residential revenue divided by the average number of total residential connections.

(5)

The number of telephone handsets, data lines and IP trunks providing communications using IP networking technology.

(6)

Generally, a home or business receiving video programming counts as one video connection. In counting bulk residential or commercial connections, such as an apartment building or hotel, connections are counted based on the number of units/rooms within the building receiving service.

(7)

Broadband and voice connections reflect billable number of lines into a building for high speed data and voice services, respectively.

TDS Telecom

Capital Expenditures (000s)

Quarter Ended

6/30/2014

3/31/2014

12/31/2013

9/30/2013

6/30/2013

Wireline

$

27,400

$

22,900

$

46,000

$

32,800

$

33,300

Cable

7,200

6,200

7,000

1,400

HMS

10,600

2,800

9,200

2,400

2,300

$

45,200

$

31,900

$

62,200

$

36,600

$

35,600

 

Telephone and Data Systems, Inc.

Consolidated Statement of Operations Highlights

Three Months Ended June 30,

(Unaudited, dollars and shares in thousands, except per share amounts)

Change

2014

2013

Amount

Percent

Operating revenues

U.S. Cellular

$

957,773

$

995,130

$

(37,357)

(4%)

TDS Telecom

270,850

223,460

47,390

21%

All Other (1)

7,769

9,576

(1,807)

(19%)

1,236,392

1,228,166

8,226

1%

Operating expenses

U.S. Cellular

Expenses excluding depreciation, amortization and accretion

863,361

813,464

49,897

6%

Depreciation, amortization and accretion

148,337

202,580

(54,243)

(27%)

(Gain) loss on asset disposals, net

6,893

9,018

(2,125)

(24%)

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

(10,511)

(249,024)

238,513

96%

1,008,080

776,038

232,042

30%

TDS Telecom

Expenses excluding depreciation, amortization and accretion

197,427

162,954

34,473

21%

Depreciation, amortization and accretion

53,175

48,756

4,419

9%

(Gain) loss on asset disposals, net

983

(682)

1,665

>(100%)

251,585

211,028

40,557

19%

All Other (1)(2)

Expenses excluding depreciation and amortization

9,613

10,033

(420)

(4%)

Depreciation and amortization

3,055

2,867

188

7%

(Gain) loss on asset disposals, net

27

(17)

44

>(100%)

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

13,122

(54,010)

67,132

>(100%)

25,817

(41,127)

66,944

>(100%)

Total operating expenses

1,285,482

945,939

339,543

36%

Operating income (loss)

U.S. Cellular

(50,307)

219,092

(269,399)

>(100%)

TDS Telecom

19,265

12,432

6,833

55%

All Other  (1)(2)

(18,048)

50,703

(68,751)

>(100%)

(49,090)

282,227

(331,317)

>(100%)

Investment and other income (expense)

Equity in earnings of unconsolidated entities

34,790

35,605

(815)

(2%)

Interest and dividend income

2,751

2,600

151

6%

Gain (loss) on investments

14,518

(14,518)

N/M

Interest expense

(27,898)

(23,749)

(4,149)

(17%)

Other, net

50

(197)

247

>(100%)

Total investment and other income

9,693

28,777

(19,084)

(66%)

Income (loss) before income taxes

(39,397)

311,004

(350,401)

>(100%)

Income tax expense (benefit)

(13,671)

132,607

(146,278)

>(100%)

Net income (loss)

(25,726)

178,397

(204,123)

>(100%)

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

(3,688)

22,320

(26,008)

>(100%)

Net income (loss) attributable to TDS shareholders

(22,038)

156,077

(178,115)

>(100%)

TDS Preferred dividend requirement

(12)

(12)

Net income (loss) available to common shareholders

$

(22,050)

$

156,065

$

(178,115)

>(100%)

Basic weighted average shares outstanding

108,719

108,385

334

Basic earnings (loss) per share attributable to TDS shareholders

$

(0.20)

$

1.44

$

(1.64)

>(100%)

Diluted weighted average shares outstanding

108,719

108,913

(194)

Diluted earnings (loss) per share attributable to TDS shareholders

$

(0.20)

$

1.42

$

(1.62)

>(100%)

(1)

Consists of Non-Reportable Segment, corporate operations and intercompany eliminations between U.S. Cellular, TDS Telecom, the Non-Reportable Segment and corporate operations.

(2)

Due to the Airadigm Transaction, TDS recognized expenses of $13.1 million related to exit and disposal activities in 2014.  In 2013, TDS recognized an incremental gain of $53.5 million compared to U.S. Cellular upon closing of the Divestiture Transaction as a result of lower asset basis in the assets disposed.

N/M – Percentage change not meaningful

 

Telephone and Data Systems, Inc.

Consolidated Statement of Operations Highlights

Six Months Ended June 30,

(Unaudited, dollars and shares in thousands, except per share amounts)

Change

2014

2013

Amount

Percent

Operating revenues

U.S. Cellular

$

1,883,584

$

2,076,876

$

(193,292)

(9%)

TDS Telecom

533,266

440,521

92,745

21%

All Other (1)

15,504

19,342

(3,838)

(20%)

2,432,354

2,536,739

(104,385)

(4%)

Operating expenses

U.S. Cellular

Expenses excluding depreciation, amortization and accretion

1,710,006

1,691,534

18,472

1%

Depreciation, amortization and accretion

316,090

392,425

(76,335)

(19%)

(Gain) loss on asset disposals, net

8,827

14,452

(5,625)

(39%)

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

(17,411)

(242,093)

224,682

93%

(Gain) loss on license sales and exchanges

(91,446)

(91,446)

N/M

1,926,066

1,856,318

69,748

4%

TDS Telecom

Expenses excluding depreciation, amortization and accretion

387,730

322,440

65,290

20%

Depreciation, amortization and accretion

106,950

98,247

8,703

9%

(Gain) loss on asset disposals, net

1,327

(489)

1,816

>(100%)

496,007

420,198

75,809

18%

All Other (1)(2)

Expenses excluding depreciation and amortization

18,939

19,272

(333)

(2%)

Depreciation and amortization

6,446

5,608

838

15%

(Gain) loss on asset disposals, net

179

(28)

207

>(100%)

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

13,122

(54,010)

67,132

>(100%)

38,686

(29,158)

67,844

>(100%)

Total operating expenses

2,460,759

2,247,358

213,401

9%

Operating income (loss)

U.S. Cellular

(42,482)

220,558

(263,040)

>(100%)

TDS Telecom

37,259

20,323

16,936

83%

All Other  (1)(2)

(23,182)

48,500

(71,682)

>(100%)

(28,405)

289,381

(317,786)

>(100%)

Investment and other income (expense)

Equity in earnings of unconsolidated entities

72,117

62,694

9,423

15%

Interest and dividend income

5,237

4,178

1,059

25%

Gain (loss) on investments

  ―  

14,518

(14,518)

N/M

Interest expense

(56,605)

(48,247)

(8,358)

(17%)

Other, net

210

(351)

561

>(100%)

Total investment and other income

20,959

32,792

(11,833)

(36%)

Income (loss) before income taxes

(7,446)

322,173

(329,619)

>(100%)

Income tax expense (benefit)

(2,014)

136,787

(138,801)

>(100%)

Net income (loss)

(5,432)

185,386

(190,818)

>(100%)

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

(1,648)

27,890

(29,538)

>(100%)

Net income (loss) attributable to TDS shareholders

(3,784)

157,496

(161,280)

>(100%)

TDS Preferred dividend requirement

(25)

(25)

Net income (loss) available to common shareholders

$

(3,809)

$

157,471

$

(161,280)

>(100%)

Basic weighted average shares outstanding

108,853

108,320

533

Basic earnings (loss) per share attributable to TDS shareholders

$

(0.04)

$

1.45

$

(1.49)

>(100%)

Diluted weighted average shares outstanding

108,853

108,827

26

Diluted earnings (loss) per share attributable to TDS shareholders

$

(0.04)

$

1.44

$

(1.48)

>(100%)

(1)

Consists of Non-Reportable Segment, corporate operations and intercompany eliminations between U.S. Cellular, TDS Telecom, the Non-Reportable Segment and corporate operations.

(2)

Due to the Airadigm Transaction, TDS recognized expenses of $13.1 million related to exit and disposal activities in 2014.  In 2013, TDS recognized an incremental gain of $53.5 million compared to U.S. Cellular upon closing of the Divestiture Transaction as a result of lower asset basis in the assets disposed.

N/M – Percentage change not meaningful

 

Telephone and Data Systems, Inc.

Consolidated Balance Sheet Highlights

(Unaudited, dollars in thousands)

ASSETS

June 30,

December 31,

2014

2013

Current assets

Cash and cash equivalents

$

874,860

$

830,014

Short-term investments

40,035

50,104

Accounts receivable from customers and others

624,261

731,114

Inventory, net

205,886

244,560

Net deferred income tax asset

106,077

106,077

Prepaid expenses

88,860

87,920

Income taxes receivable

9,197

2,397

Other current assets

32,274

35,151

1,981,450

2,087,337

Assets held for sale

5,980

16,027

Investments

Licenses

1,460,484

1,423,779

Goodwill

834,352

836,843

Franchise rights

124,487

123,668

Other intangible assets, net

61,536

71,454

Investments in unconsolidated entities

308,661

301,772

Other investments

589

641

2,790,109

2,758,157

Property, plant and equipment, net

U.S. Cellular

2,761,404

2,856,520

TDS Telecom

962,377

984,634

Other

26,166

36,990

3,749,947

3,878,144

Other assets and deferred charges

180,183

164,482

Total assets

$

8,707,669

$

8,904,147

 

Telephone and Data Systems, Inc.

Consolidated Balance Sheet Highlights

(Unaudited, dollars in thousands)

LIABILITIES AND EQUITY

June 30,

December 31,

2014

2013

Current liabilities

Current portion of long-term debt

$

890

$

1,646

Accounts payable

425,051

496,069

Customer deposits and deferred revenues

302,496

289,445

Accrued interest

6,671

6,673

Accrued taxes

73,227

70,518

Accrued compensation

98,099

115,031

Other current liabilities

166,270

212,374

1,072,704

1,191,756

Liabilities held for sale

722

  ―  

Deferred liabilities and credits

Net deferred income tax liability

828,458

862,975

Other deferred liabilities and credits

460,862

458,709

Long-term debt

1,718,832

1,720,074

Noncontrolling interests with redemption features

911

536

Equity

TDS shareholders' equity

Series A Common and Common Shares, par value $.01

1,327

1,327

Capital in excess of par value

2,312,515

2,308,807

Treasury shares, at cost

(737,835)

(721,354)

Accumulated other comprehensive loss

(980)

(569)

Retained earnings

2,496,735

2,529,626

   Total TDS shareholders' equity

4,071,762

4,117,837

Preferred shares

824

824

Noncontrolling interests

552,594

551,436

Total equity

4,625,180

4,670,097

Total liabilities and equity

$

8,707,669

$

8,904,147

 

Balance Sheet Highlights

June 30, 2014

(Unaudited, dollars in thousands)

U.S.

TDS

TDS Corporate

Intercompany

TDS

Cellular

Telecom

& Other

Eliminations

Consolidated

Cash and cash equivalents

$

404,058

$

87,170

$

383,632

$

 ― 

$

874,860

Affiliated cash investments

 ― 

466,295

 ― 

(466,295)

 ― 

Short-term investments

40,035

 ― 

 ― 

 ― 

40,035

$

444,093

$

553,465

$

383,632

$

(466,295)

$

914,895

Licenses, goodwill and other intangible assets

$

1,825,355

$

786,487

$

(130,983)

$

 ― 

$

2,480,859

Investment in unconsolidated entities

270,215

3,810

41,789

(7,153)

308,661

Long-term and other investments

 ― 

588

1

 ― 

589

$

2,095,570

$

790,885

$

(89,193)

$

(7,153)

$

2,790,109

Property, plant and equipment, net

$

2,761,404

$

962,377

$

26,166

$

 ― 

$

3,749,947

Long-term debt:

Current portion

$

46

$

57

$

787

$

 ― 

$

890

Non-current portion

876,715

1,424

840,693

 ― 

1,718,832

$

876,761

$

1,481

$

841,480

$

 ― 

$

1,719,722

 

 

 

Telephone and Data Systems, Inc.

Schedule of Cash and Cash Equivalents and Investments

(Unaudited, dollars in thousands)

The following table presents TDS' cash and cash equivalents and investments at June 30, 2014 and December 31, 2013.

June 30,

December 31,

2014

2013

Cash and cash equivalents

$

874,860

$

830,014

Amounts included in short-term investments (1) (2)

U.S. Treasury Notes

40,035

50,104

Total cash and cash equivalents and investments

$

914,895

$

880,118

(1)

Designated as held-to-maturity investments and are recorded at amortized cost in the Consolidated Balance Sheet.

(2)

Maturities are less than twelve months from the respective balance sheet dates.

 

Telephone and Data Systems, Inc.

Consolidated Statement of Cash Flows

Six Months Ended June 30,

(Unaudited, dollars in thousands)

2014

2013

Cash flows from operating activities

Net income (loss)

$

(5,432)

$

185,386

Add (deduct) adjustments to reconcile net income to cash flows

  from operating activities

Depreciation, amortization and accretion

429,486

496,280

Bad debts expense

52,098

35,187

Stock-based compensation expense

15,488

12,902

Deferred income taxes, net

(33,346)

(21,246)

Equity in earnings of unconsolidated entities

(72,117)

(62,694)

Distributions from unconsolidated entities

65,569

47,635

(Gain) loss on asset disposals, net

10,333

13,935

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

(4,289)

(296,103)

(Gain) loss on investments

(14,518)

(Gain) loss on license sales and exchanges

(91,446)

Noncash interest expense

1,014

997

Other operating activities

3

505

Changes in assets and liabilities from operations

Accounts receivable

40,459

(5,781)

Inventory

38,674

(8,105)

Accounts payable

(43,132)

58,204

Customer deposits and deferred revenues

13,139

7,897

Accrued taxes

1,049

150,425

Accrued interest

22

2,172

Other assets and liabilities

(101,930)

(81,586)

315,642

521,492

Cash flows from investing activities

Cash used for additions to property, plant and equipment

(339,907)

(384,281)

Cash paid for acquisitions and licenses

(18,681)

(14,150)

Cash received from divestitures

125,905

480,000

Cash received for investments

10,000

15,000

Other investing activities

3,720

14,127

(218,963)

110,696

Cash flows from financing activities

Repayment of long-term debt

(589)

(605)

TDS Common Shares reissued for benefit plans, net of tax payments

401

776

U.S. Cellular Common Shares reissued for benefit plans, net of tax payments

830

(2,206)

Repurchase of TDS Common Shares

(20,090)

Repurchase of U.S. Cellular Common Shares

(8,298)

(18,425)

Dividends paid to TDS shareholders

(29,107)

(27,598)

U.S. Cellular dividends paid to noncontrolling public shareholders

(75,235)

Distributions to noncontrolling interests

(482)

(3,292)

Other financing activities

5,502

331

(51,833)

(126,254)

Net increase in cash and cash equivalents

44,846

505,934

Cash and cash equivalents

Beginning of period

830,014

740,481

End of period

$

874,860

$

1,246,415

 

TDS Telecom Highlights

Three Months Ended June 30,

(Unaudited, dollars in thousands)

Change

2014

2013

Amount

Percent

Wireline

Operating revenues

Residential

$

73,360

$

72,911

$

449

1%

Commercial

57,472

57,128

344

1%

Wholesale

49,465

51,389

(1,924)

(4%)

Total service revenues

180,297

181,428

(1,131)

(1%)

Equipment sales

431

765

(334)

(44%)

180,728

182,193

(1,465)

(1%)

Operating expenses

Cost of services

64,305

65,729

(1,424)

(2%)

Cost of equipment sold

481

1,094

(613)

(56%)

Selling, general and administrative expenses

47,708

56,692

(8,984)

(16%)

Depreciation, amortization and accretion

41,827

43,193

(1,366)

(3%)

(Gain) loss on asset disposals, net

514

(765)

1,279

>100%

154,835

165,943

(11,108)

(7%)

Operating income

$

25,893

$

16,250

$

9,643

59%

Cable

Operating revenues

Residential

$

18,222

$

$

18,222

N/M

Commercial

4,262

4,262

N/M

22,484

22,484

N/M

Operating expenses

Cost of services

11,394

11,394

N/M

Selling, general and administrative expenses

6,285

6,285

N/M

Depreciation, amortization and accretion

4,557

4,557

N/M

Loss on asset disposals, net

425

425

N/M

22,661

22,661

N/M

Operating loss

$

(177)

$

$

(177)

N/M

HMS

Operating revenues

Service revenues

$

27,575

$

23,205

$

4,370

19%

Equipment sales

40,361

18,169

22,192

>100%

67,936

41,374

26,562

64%

Operating expenses

Cost of services

21,301

15,071

6,230

41%

Cost of equipment sold

33,875

15,114

18,761

>100%

Selling, general and administrative expenses

12,376

9,361

3,015

32%

Depreciation, amortization and accretion

6,791

5,563

1,228

22%

Loss on asset disposals, net

44

83

(39)

(47%)

74,387

45,192

29,195

65%

Operating loss

$

(6,451)

$

(3,818)

$

(2,633)

(69%)

Intercompany revenues

$

(298)

$

(107)

$

(191)

>(100)%

Intercompany expenses

(298)

(107)

(191)

>(100)%

Total TDS Telecom operating income

$

19,265

$

12,432

$

6,833

55%

 

TDS Telecom Highlights

Six Months Ended June 30,

(Unaudited, dollars in thousands)

Change

2014

2013

Amount

Percent

Wireline

Operating revenues

Residential

$

145,865

$

145,915

$

(50)

Commercial

115,452

114,253

1,199

1%

Wholesale

95,913

101,938

(6,025)

(6%)

Total service revenues

357,230

362,106

(4,876)

(1%)

Equipment sales

984

1,662

(678)

(41%)

358,214

363,768

(5,554)

(2%)

Operating expenses

Cost of services

128,705

132,168

(3,463)

(3%)

Cost of equipment sold

964

2,104

(1,140)

(54%)

Selling, general and administrative expenses

94,228

114,072

(19,844)

(17%)

Depreciation, amortization and accretion

84,563

87,216

(2,653)

(3%)

(Gain) loss on asset disposals, net

759

(602)

1,361

>100%

309,219

334,958

(25,739)

(8%)

Operating income

$

48,995

$

28,810

$

20,185

70%

Cable

Operating revenues

Residential

$

36,475

$

$

36,475

N/M

Commercial

8,512

8,512

N/M

44,987

44,987

N/M

Operating expenses

Cost of services

22,349

22,349

N/M

Selling, general and administrative expenses

12,663

12,663

N/M

Depreciation, amortization and accretion

8,918

8,918

N/M

Loss on asset disposals, net

490

490

N/M

44,420

44,420

N/M

Operating income

$

567

$

$

567

N/M

HMS

Operating revenues

Service revenues

$

54,951

$

45,205

$

9,746

22%

Equipment sales

76,093

31,733

44,360

>100%

131,044

76,938

54,106

70%

Operating expenses

Cost of services

38,247

28,673

9,574

33%

Cost of equipment sold

64,342

26,326

38,016

>100%

Selling, general and administrative expenses

27,211

19,282

7,929

41%

Depreciation, amortization and accretion

13,469

11,031

2,438

22%

Loss on asset disposals, net

78

113

(35)

(31%)

143,347

85,425

57,922

68%

Operating loss

$

(12,303)

$

(8,487)

$

(3,816)

(45%)

Intercompany revenues

$

(979)

$

(185)

$

(794)

>(100)%

Intercompany expenses

(979)

(185)

(794)

>(100)%

Total TDS Telecom operating income

$

37,259

$

20,323

$

16,936

83%

 

Telephone and Data Systems, Inc.

Financial Measures and Reconciliations

(Unaudited, dollars in thousands)

TDS Consolidated

Three Months Ended

Six Months Ended

June 30,

June 30,

2014

2013

2014

2013

Cash flows from operating activities

$

210,705

$

275,140

$

315,642

$

521,492

Add: Sprint Cost Reimbursement

22,862

34,116

Less: Cash used for additions to property,

   plant and equipment

189,017

207,963

339,907

384,281

Adjusted free cash flow (1)

$

44,550

$

67,177

$

9,851

$

137,211

(1)

Adjusted free cash flow is defined as Cash flows from operating activities, 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 used for additions to property, plant and equipment. Adjusted free cash flow is a non-GAAP financial measure which TDS 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 used for additions to property, plant and equipment. The prior manner of calculating free cash flow has been adjusted to include the Sprint Cost Reimbursement. The reason for this is that the Sprint decommissioning cash outflows are included in "Cash flows from operating activities," but the reimbursements from Sprint related to these outflows are not included in this caption.

SOURCE Telephone and Data Systems, Inc.


Private Placement Set for Joint Venture of Up to $100,000,000 on 97 Net Drill Locations Aug 1, 2014 07:45AM

VANCOUVER, BRITISH COLUMBIA -- (Marketwired) -- 08/01/14 -- Petro One Energy Corp. (TSX VENTURE: POP)(PINKSHEETS: CUDBF)(FRANKFURT: C6K1) announced on July 27, 2014 that it had arranged funding of up to $100,000,000 from Korea Myanmar Development Corporation ("KMDC") to drill up to 97 oil wells on Petro One properties in Saskatchewan and Manitoba. It is now pleased to report that the first step in that funding has been taken.

KMDC was originally established with the support of the Korean Government to secure and develop petroleum leases in Myanmar (formerly Burma) as part of a program to develop enhanced economic relations between Korea and Myanmar across a number of sectors. Under the guidance of Chairman Lee Young-Soo, KMDC recently determined to seek opportunities in the Canadian oil patch. It was introduced to Petro One and ultimately identified Petro One as its preferred candidate. The Earning and Joint Venture Agreement was negotiated only after extensive due diligence by legal and technical advisors to KMDC, including data due diligence and property site inspections, all which was overseen by Petro One's Chief Consulting Geologist, Trevor Bremner. Approximately 70 representatives of the Korean Government, Korean business community and Korean press, including Korean Television, attended the formal signing ceremony in Seoul, at which Petro One was represented by its Chief Executive Officer and Chief Operating Officer. It was made very clear in the speeches given by Government Officials and Chairman Lee that they consider $100,000,000 in funding to be the first step in a longer term, more comprehensive arrangement with Petro One.

"We are delighted to be embarking on this joint venture with a multinational company of KMDC's calibre," said Petro One President Peter Bryant. "The KMDC financing will fund an aggressive multi-well program designed to provide for exponential growth through production on 8 of Petro One's properties. Saskatchewan and Manitoba are ranked as two of the best geopolitically stable places in the world to drill for shallow, light oil, and Petro One's land is ideally located for low risk development drilling in or adjacent to infrastructure and existing oil fields. We look forward to rapid growth and a long and prosperous partnership with KMDC."

The pricing for the initial $4,000,000 private placement announced on July 28, 2014 was agreed to be set at the lowest "Discounted Market Price" of Petro One shares occurring during the 20 day period following the second trading day after the July 28, 2014 news release, subject to a minimum price of $0.25. Accordingly, based on the closing price of the Company's shares on July 31, 2014, the financing has been priced at $0.25 per Unit. Each Unit is comprised of one common share and one warrant, and each warrant will be exercisable at $0.375 for two years after closing, subject to accelerated exercise if the Company's shares trade over $2.00 for a period of 10 consecutive trading days after four months from the closing date. As a result, KMDC is obligated under the Agreement to advance $14,000,000 for the drilling fund to bring the total initial Phase 1 investment to $18,000,000, and has the right to increase that by an additional $82,000,000 in Phase 2.

The private placement and use of proceeds are described in more detail in the Company's July 28, 2014 news release. All shares issued pursuant to the offering and any shares issued pursuant to the exercise of warrants will be subject to a four-month hold period from the closing date. Closing remains scheduled for September 2, 2014, and the agreement with KMDC and the private placement remain subject to acceptance by the TSXV. Aberdeen Gould Capital Markets Ltd. is acting as the Company's Exempt Market Dealer in respect of the private placement, as described in the July 28, 2014 news release.

The Company will report on further developments as they occur.

ON BEHALF OF THE BOARD

"Peter Bryant"

President & Director

To view photos of the formal signing ceremony with KMDC in Seoul, Korea July 28 2014, please visit Petro One Energy's homepage here: http://www.petrooneenergy.com/main/index.php?page_id=132.

Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.

Forward-Looking Statements

Certain statements contained herein constitute forward-looking statements or information (collectively "forward-looking statements") within the meaning of applicable securities legislation, including, but not limited to management's assessment of future plans and operations, including: drilling plans and potential locations; expected production levels; development plans; reserves growth; production and operating sales and expenses; reservoir characteristics; the results of applying certain operational development techniques; certain economic factors; and capital expenditures.

Forward looking statements are typically identified by words such as "anticipate", "estimate", "expect", "forecast", "may", "will", "project" and similar words suggesting future events or performance or may be identified by reference to a future date. In addition, statements relating to oil and gas reserves and resources are deemed to be forward-looking statements as they involve the implied assessment, based on certain estimates and assumptions, that the reserves or resources described, as the case may be, exist in the quantities predicted or estimated and can be profitably produced in the future. With respect to forward looking statements herein, the Company has made assumptions regarding, among other things; future capital expenditure levels; future oil and natural gas prices; ability to obtain equipment and services in a timely manner to carry out development activities; ability to market oil and natural gas successfully to current and new customers; the ability to obtain financing on acceptable terms; and the ability to add production and reserves through development and exploitation activities. Although the Company believes that the expectations reflected in the forward-looking statements contained herein, and the assumptions on which such forward-looking statements are made, are reasonable, there can be no assurance that such expectations will prove to be correct. Readers are cautioned not to place undue reliance on forward-looking statements included herein, as there can be no assurance that the plans, intentions or expectations upon which the forward-looking statements are based will occur. By their nature, forward-looking statements involve numerous risks and uncertainties that contribute to the possibility that the forward-looking statements will not occur, which may cause the Company's actual performance and financial results in future periods to differ materially from any estimates or projections. The forward-looking statements contained herein are made as of the date hereof. The Company does not undertake any obligation to, nor does it intend to, publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. The forward-looking statements contained herein are expressly qualified by this cautionary statement. In addition, readers are cautioned that historical results are not necessarily indicative of future performance.

Contacts:
King James Capital Corporation
Jeff Stuart
Investor Relations
(604) 805-0375
jstuart@kingjamescapital.com

Petro One Energy Corp.
www.PetroOneEnergy.com
www.Twitter.com/PetroOneEnergy

Source: Petro One Energy Corp.


iStore Transforms Retailing for the Digital Age Aug 1, 2014 07:45AM

MONTREAL, QUEBEC -- (Marketwired) -- 08/01/14 -- Located in Montreal's Rockland Centre, the first-ever international iStore invites consumers to discover the latest, most fashionable digital lifestyle products in a chic, ultra-modern atmosphere. From photography to cooking, music to health and fitness, children's toys to connected home accessories, this stylish new retail destination is showcasing today's most cutting-edge digital trends. Welcome to the new iStore.

"Technology has gone far beyond being a simple tool," explains Joel Teitelbaum, CEO of iStore Inc. "It is a fashionable form of self-expression and individuality. With so many options available to consumers, our goal was to create a unique, interactive environment that highlights a dynamic and imaginative selection of the latest digital solutions and accessories. At iStore our goal is to entertain, educate and empower our customers to get more out of the mobile devices they own."

The 3,000 square foot store has been designed with the greatest attention to detail. Custom-made Corian counters showcase everything from colourful headphones and beautifully structured carrying cases, to tablets, fitness trackers, learning toys, and much more. Items are displayed on gleaming floating trays that invite customers to interact with each product. A circular sound booth beckons to customers who want to test out the boutique's wide range of wireless speakers. The booth cuts out all ambient noise, providing customers with a fun and incomparable listening experience.

"The digital world and all of its capabilities can sometimes feel overwhelming to customers," explains Mike Battat, president of iStore Inc. "Our aim is to simplify its complexity, so that our customers can truly maximize their enjoyment of the digital products they use. Our advanced, in-house training ensures that our staff can easily educate and address every question that a customer might have."

Along with an ever-expanding range of cutting-edge digital accessories from leading industry partner brands such as Apple, Beats, Bose, Jawbone and Fitbit, the iStore also features the latest iPhones and iPads on the TELUS network, its exclusive carrier partner.

On Tuesday, August 12th, 2014 iStore will host a private media meet & greet followed by the celebration of its official international launch. The new iStore is located on the 3rd level of the Rockland Centre, 2305 Rockland, Montreal, 514-507-4041, www.istoreworld.com

Founded in 2010 by Joel Teitelbaum and Mike Battat, the iStore retail concept is dedicated to showcasing leading digital lifestyle products, brands and solutions in a modern and fashionable environment. iStore is currently established in a variety of channels including 15 smaller-format iStore boutiques in airports throughout North America including JFK, LAX and Toronto's Pearson Airport, and also through its iStoreworld.com online store. In 2013, iStore also partnered with Chapters Indigo; applying their expansive knowledge of the fashion and technology categories in the creation of Indigotech boutiques, which are now featured in 37 store locations across Canada. In 2014, iStore has now fully realized its vision for the future of digital lifestyle retail with its 3,000 square foot new concept iStore at Montreal's Rockland Centre.

Contacts:
Tuti Do
Rev Communications
514.331.8837
tdo@revcommunications.com

Source: iStore


Independence Realty Trust Announces Second Quarter 2014 Financial Results Aug 1, 2014 07:45AM

PHILADELPHIA--(BUSINESS WIRE)-- Independence Realty Trust, Inc. (“IRT”) (NYSE MKT: IRT) today announced second quarter 2014 financial results.

Highlights

  • Core funds from operations (“CFFO”) increased 160% to $3.4 million for the quarter ended June 30, 2014 from $1.3 million for the quarter ended June 30, 2013.
  • Operating income increased 47% to $1.8 million for the quarter ended June 30, 2014 from $1.2 million for the quarter ended June 30, 2013.
  • Total revenues grew 148% to $11.6 million for the quarter ended June 30, 2014 from $4.7 million for the quarter ended June 30, 2013.
  • On July 21, 2014, IRT completed its underwritten public offering selling 8,050,000 shares of IRT common stock for $9.50 per share raising gross proceeds of $76.5 million. RAIT Financial Trust (“RAIT”), IRT’s largest stockholder and the parent company of IRT’s external advisor, purchased 300,000 shares of common stock in the offering, at the public offering price, for which no underwriting discounts and commissions were paid to the underwriters. After giving effect to this offering, the percent of IRT’s outstanding common stock held by RAIT was reduced from 39.4% to 28.2%.
  • IRT acquired 2 properties totaling 372 units for $41.8 million during the quarter ended June 30, 2014.

Financial Results

IRT reported CFFO, a non-GAAP financial measure, for the three-month period ended June 30, 2014 of $3.4 million, or $0.19 per share – diluted based on 17.7 million weighted-average shares outstanding – diluted, as compared to CFFO for the three-month period ended June 30, 2013 of $1.3 million, or $0.23 per share – diluted based on 5.6 million weighted-average shares outstanding – diluted. IRT reported a net loss allocable to common stock for the three-month period ended June 30, 2014 of $(0.1) million, or $(0.01) per share – diluted based on 17.7 million weighted-average shares outstanding – diluted, as compared to net income allocable to common stock for the three-month period ended June 30, 2013 of $0.05 million, or $0.01 per share – diluted based on 5.6 million weighted-average shares outstanding – diluted.

IRT reported CFFO for the six-month period ended June 30, 2014 of $5.9 million, or $0.36 per share – diluted based on 16.5 million weighted-average shares outstanding – diluted, as compared to CFFO for the six-month period ended June 30, 2013 of $2.6 million, or $0.46 per share – diluted based on 5.6 million weighted-average shares outstanding – diluted. IRT reported a net income allocable to common stock for the six-month period ended June 30, 2014 of $2.8 million, or $0.17 per share – diluted based on 16.5 million weighted-average shares outstanding – diluted, as compared to net income allocable to common stock for the six-month period ended June 30, 2013 of $0.05 million, or $0.01 per share – diluted based on 5.6 million weighted-average shares outstanding – diluted.

A reconciliation of IRT's reported net income (loss) to its funds from operations (“FFO”) and CFFO is included as Schedule I to this release. Schedule I also includes management's rationale for the usefulness of each of these non-GAAP financial measures.

Distributions

On July 10, 2014, IRT’s Board of Directors declared monthly cash dividends for the third quarter of 2014 on IRT’s shares of common stock in the amount of $0.06 per share per month. The monthly dividends total $0.18 per share for the third quarter. The month for which each dividend was declared is set forth below, with the relevant amount per share, record date and payment date set forth opposite the month:

                 

Month

Amount

Record Date

Payment Date

June 2014 $0.06 7/31/2014 8/15/2014
July 2014 $0.06 8/29/2014 9/16/2014
August 2014 $0.06 9/30/2014 10/15/2014
 
 

Key Statistics

(Unaudited and dollars in thousands, except per share and per unit information)

 
 

As of or For the Three-Month Periods Ended

 
June 30,   March 31,   December 31,   September 30,   June 30,
2014   2014   2013   2013   2013
Financial Statistics:
Total revenue $11,649 $8,135 $5,768 $4,787 $4,700
Earnings (loss) per share-diluted $(0.01) $0.19 $0.03 $0.03 $0.01
Funds from Operations (“FFO”) per share $0.18 $0.33 $0.17 $0.17 $0.23
Core funds from operations (“CFFO”) per share $0.19 $0.17 $0.20 $0.17 $0.23
Dividends declared per common share $0.18 $0.18 $0.16 $0.16 $0.16
Total Shares Outstanding 17,751,540 17,742,540 9,652,540 9,643,540 5,643,540
 
Apartment Property Portfolio:
Reported investments in real estate at cost $362,323 $320,437 $190,096 $166,665 $154,040
Net operating income $6,064 $4,147 $3,159 $2,373 $2,459
Number of properties owned 19 17 10 9 8
Multifamily units owned 5,342 4,970 2,790 2,358 2,004
Portfolio weighted average occupancy 93.1% 93.9% 94.6% 94.4% 94.2%
Weighted average monthly effective rent per unit (1) $764 $730 $765 $784 $784
 
(1)   Weighted average monthly effective rent per occupied unit represents the average monthly rent collected for all occupied units after giving effect to tenant concessions. We do not report average effective rent per unit in the month of acquisition as it is not representative of a full month of operations. Same Store weighted average effective rent per unit was $798, $795, $792, $784 and $784 for the periods presented above, respectively.
 
 

Properties

 

The following table presents an overview of our apartment portfolio as of June 30, 2014:

 

 

            Average Monthly
Year Effective
Acquisition Built or Physical Rent per
Property Name Location Date

Renovated(1)

Units(2)

Occupancy(3)

Occupied Unit(4)

Belle Creek

Henderson, Colorado 4/29/2011

2011

162(5)

97.5% $989
Copper Mill Austin, Texas 4/29/2011 2010 320 97.5% 786
Crestmont Marietta, Georgia 4/29/2011 2010 228 99.1% 716
Cumberland Glen Smyrna, Georgia 4/29/2011 2010 222 96.4% 704
Heritage Trace Newport News, Virginia 4/29/2011 2010 200 90.5% 687
Tresa at Arrowhead Phoenix, Arizona 4/29/2011 2006 360 95.0% 821
Centrepoint Tucson, Arizona 12/16/2011 2006 320 95.9% 816
Runaway Bay Indianapolis, Indiana 10/11/2012 2002 192 95.3% 909
Berkshire Square Indianapolis, Indiana 9/19/2013 2012 354 92.1% 584
The Crossings Jackson, Mississippi 11/22/2013 2006 432 92.4% 735
Reserve at Eagle Ridge Waukegan, Illinois 1/31/2014 2008 370 94.6% 934
Windrush Edmond, Oklahoma 2/28/2014 2011 160 85.6% 775
Heritage Park Oklahoma City, Oklahoma 2/28/2014 2011 453 90.5% 619
Raindance Oklahoma City, Oklahoma 2/28/2014 2011 504 90.5% 532
Augusta Oklahoma City, Oklahoma 2/28/2014 2011 197 82.2% 724
Invitational Oklahoma City, Oklahoma 2/28/2014 2011 344 93.0% 673
King’s Landing Creve Coeur, Missouri 3/31/2014 2005 152 93.6% 1,460
Carrington Park Little Rock, Arkansas 5/07/2014 1999 202 92.6% 1,066
Arbors at the Reservoir Ridgeland, Mississippi 6/04/2014 2000 170 93.5% — (6)
 
Total/Weighted Average 5,342 93.1% $764
 
(1)   All dates are for the year in which a significant renovation program was completed, except for Runaway Bay, Arbors at the Reservoir and King’s Landing, which is the year construction was completed.
(2) Units represents the total number of apartment units available for rent at June 30, 2014.
(3) Physical occupancy for each of our properties is calculated as (i) total units rented as of June 30, 2014 divided by (ii) total units available as of June 30, 2014, expressed as a percentage.
(4) Average monthly effective rent per occupied unit represents the average monthly rent for all occupied units for the three-month period ended June 30, 2014.
(5) Includes 6,256 square feet of retail space in six units, of which 1,010 square feet of space is occupied by RAIT Residential for use as the leasing office. The remaining 5,246 square feet of space is 86% occupied by four tenants with an average monthly base rent of $1,603, or $16 per square foot per year. These four tenants are principally engaged in the following businesses: grocery, retail and various retail services.
(6) We do not report average effective rent per unit in the month of acquisition as it is not representative of a full month of operations. As of June 2014, the average monthly effective rent per occupied unit was $1,064.
 

Conference Call

All interested parties can listen to the live conference call webcast at 9:00 AM ET on Friday, August 1, 2014 from the investor relations section of the IRT website at www.irtreit.com or by dialing 877.280.4956, access code 81504352. For those who are not available to listen to the live call, the replay will be available shortly following the live call on IRT’s website and telephonically until Friday, August 8, 2014, by dialing 888.286.8010, access code 49252720.

About Independence Realty Trust, Inc.

Independence Realty Trust, Inc. (NYSE MKT: IRT) is a real estate investment trust that seeks to own well-located apartment properties in geographic submarkets that it believes support strong occupancy and the potential for growth in rental rates. IRT seeks to provide stockholders with attractive risk-adjusted returns, with an emphasis on distributions and capital appreciation. IRT is externally advised by a wholly-owned subsidiary of RAIT Financial Trust (NYSE: RAS).

Forward-Looking Statements

This press release may contain certain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Such forward-looking statements can generally be identified by our use of forward-looking terminology such as "may," “trend”, "will," "expect," "intend," "anticipate," "estimate," "believe," "continue," “seek” or other similar words. Because such statements include risks, uncertainties and contingencies, actual results may differ materially from the expectations, intentions, beliefs, plans or predictions of the future expressed or implied by such forward-looking statements. These risks, uncertainties and contingencies include, but are not limited to, those disclosed in IRT’s filings with the Securities and Exchange Commission. IRT undertakes no obligation to update these forward-looking statements to reflect events or circumstances after the date hereof or to reflect the occurrence of unanticipated events, except as may be required by law.

   

Independence Realty Trust, Inc.

Consolidated Statements of Operations

(Dollars in thousands, except share and per share information)

(unaudited)

 
For the Three-Month For the Six-Month
Period Ended Period Ended
June 30 June 30
2014   2013 2014   2013
Revenues:    
Rental income $ 10,613 $ 4,218 $ 17,966 $ 8,396
Tenant reimbursement income 436 220 802 443
Other income   600     262     1,016     549  
Total revenue 11,649 4,700 19,784 9,388
Expenses:
Property operating expenses 5,585 2,241 9,573 4,406
General and administrative expenses 378 94 546 271
Asset management fees 501 79 647 161
Acquisition expenses 152 - 514 -
Depreciation and amortization   3,232     1,063     5,355     2,099  
Total expenses   9,848     3,477     16,635     6,937  
Operating income 1,801 1,223 3,149 2,451
Interest expense (1,930 ) (899 ) (3,229 ) (1,787 )
Interest income 1 - 5 -
Gain (loss) on assets   -     -     2,882     -  
Net income (loss): (128 ) 324 2,807 664
(Income) loss allocated to preferred stock - (4 ) - (8 )
(Income) loss allocated to non-controlling interests   -     (272 )   -     (604 )
Net income (loss) allocable to common stock $ (128 ) $ 48   $ 2,807   $ 52  
 
Earnings (loss) per share:
Basic $ (0.01 ) $ 0.01   $ 0.17   $ 0.03  
Diluted $ (0.01 ) $ 0.01   $ 0.17   $ 0.03  
Weighted-average shares:
Basic   17,707,287     3,556,349     16,459,623     1,959,998  
Diluted   17,707,287     3,556,349     16,484,357     1,959,998  
Dividends declared per common share $ 0.18   $ 0.16   $ 0.36   $ 0.31  
 
   

Independence Realty Trust, Inc.

Consolidated Balance Sheets

(Dollars in thousands, except share and per share information)

(unaudited)

 
As of As of
June 30, December 31,
2014   2013
Assets:
Investments in real estate:
Investments in real estate at cost $ 362,323 $ 190,096
Accumulated depreciation   (18,804 )   (15,775 )
Investments in real estate, net 343,519 174,321
Cash and cash equivalents 8,054 3,334
Restricted cash 2,698 1,122
Accounts receivable and other assets 2,682 1,731
Intangible assets, net of accumulated amortization of $2,513 and $569, respectively 1,126 517
Deferred costs, net of accumulated amortization of $293 and $151, respectively   1,568     846  
Total assets $ 359,647   $ 181,871  
 
Liabilities and Equity:
Indebtedness $ 215,628 $ 103,303
Accounts payable and accrued expenses 5,725 2,374
Accrued interest payable 30 63
Dividends payable 1,076 515
Other liabilities   946     708  
Total liabilities 223,405 106,963
 
Equity:

Stockholders’ equity:

Preferred stock, $0.01 par value; 50,000,000 shares authorized, 0 and 0 shares issued and outstanding, respectively

-

-

Common stock, $0.01 par value; 300,000,000 shares authorized, 17,751,540 and 9,652,540 shares issued and outstanding, including 40,000 unvested restricted common share awards as of June 30, 2014

177

96

Additional paid-in capital 140,973 78,112
Retained earnings (accumulated deficit)   (6,867 )     (3,300 )
Total shareholders’ equity 134,283 74,908
Non-controlling interests   1,959       -  
Total Equity   136,242       74,908  
Total liabilities and equity $ 359,647     $ 181,871  
 
 

Schedule I

Independence Realty Trust, Inc.

Reconciliation of Net income (loss) Allocable to Common Stock and

Funds From Operations (“FFO”) and

Core Funds From Operations (“CFFO”) (1)

(Dollars in thousands, except share and per share amounts)

(unaudited)

                   

For the Three-Month Period Ended

   

For the Six-Month Period Ended

 

June 30,

     

June 30,

   
2014       2013       2014       2013    
  Per Share   Per Share   Per Share   Per Share

Amount

(2)

Amount

(3)

Amount

(2)

Amount

(3)

Funds From Operations:
Net income (loss) $(128) $(0.01) $324 $0.06 $2,807 $0.17 $664 $0.12
Adjustments:
Income allocated to preferred shares - - (4) 0.00 - - (8) 0.00
Income allocated to preferred units - - (88) (0.02) - - (175) (0.03)
Real estate depreciation and amortization 3,232   0.19   1,063   0.19   5,355   0.32   2,099   0.37
Funds From Operations $3,104   $0.18   $1,295   $0.23   $8,162   $0.49   $2,580   $0.46
 
Core Funds From Operations:
Funds From Operations $3,104 $0.18 $1,295 $0.23 $8,162 $0.49 $2,580 $0.46
Adjustments:
Acquisition fees and expenses 152 0.01 - - 514 0.03 - -
Equity based compensation 112 0.00 - - 142 0.01 - -
(Gains) losses on assets -   -   -   -   (2,882)   (0.17)   -   -
Core Funds From Operations $3,368   $0.19   $1,295   $0.23   $5,936   $0.36   $2,580   $0.46
 
(1)   IRT believes that FFO and Core FFO, each of which is a non-GAAP measure, are additional appropriate measures of the operating performance of a REIT and IRT in particular. IRT computes FFO in accordance with the standards established by the National Association of Real Estate Investment Trusts, or NAREIT, as net income or loss allocated to common stock (computed in accordance with GAAP), excluding real estate-related depreciation and amortization expense, gains or losses on sales of real estate and the cumulative effect of changes in accounting principles.
 

Core FFO is a computation made by analysts and investors to measure a real estate company’s operating performance by removing the effect of items that do not reflect ongoing property operations, including acquisition expenses, expensed costs related to the issuance of shares of our common stock, gains or losses on real estate transactions and equity-based compensation expenses, from the determination of FFO. IRT incurs acquisition expenses in connection with acquisitions of real estate properties and expenses those costs when incurred in accordance with U.S. GAAP. As these expenses are one-time and reflective of investing activities rather than operating performance, IRT adds back these costs to FFO in determining Core FFO.

 

IRT’s calculation of Core FFO differs from the methodology used for calculating Core FFO by certain other REITs and, accordingly, IRT’s Core FFO may not be comparable to Core FFO reported by other REITs. IRT’s management utilizes FFO and Core FFO as measures of IRT’s operating performance, and believes they are also useful to investors, because they facilitate an understanding of IRT’s operating performance after adjustment for certain non-cash items, such as depreciation and amortization expenses, and acquisition expenses and pursuit costs that are required by GAAP to be expensed but may not necessarily be indicative of current operating performance and that may not accurately compare IRT’s operating performance between periods. Furthermore, although FFO, Core FFO and other supplemental performance measures are defined in various ways throughout the REIT industry, IRT also believes that FFO and Core FFO may provide IRT and our investors with an additional useful measure to compare IRT’s financial performance to certain other REITs. IRT also uses Core FFO for purposes of determining the quarterly incentive fee, if any, payable to our advisor beginning with the second quarter of 2013. Neither FFO nor Core FFO is equivalent to net income or cash generated from operating activities determined in accordance with GAAP. Furthermore, FFO and Core FFO do not represent amounts available for management’s discretionary use because of needed capital replacement or expansion, debt service obligations or other commitments or uncertainties. Neither FFO nor Core FFO should be considered as an alternative to net income as an indicator of IRT’s operating performance or as an alternative to cash flow from operating activities as a measure of IRT’s liquidity.

 

(2)

Based on 17,707,287 and 16,484,357 weighted-average shares outstanding-diluted for the three and six-month periods ended June 30, 2014.

 

(3)

Based on 5,643,122 and 5,632,028 weighted-average shares outstanding-diluted for the three and six-month periods ended June 30, 2013.

 

Independence Realty Trust, Inc.

Andres Viroslav, 215-243-9000

aviroslav@irtreit.com

Source: Independence Realty Trust, Inc.


Osborne Clarke announces first step of Asia strategy Aug 1, 2014 07:40AM

(PRWEB UK) 1 August 2014

International law firm, Osborne Clarke has hired Marcus Vass from Bird & Bird in Hong Kong and, as the first step of its Asia strategy, proposes to enter into a strategic alliance with a law firm in Hong Kong newly established by John Koh, with whom Marcus worked closely at Bird & Bird.

Marcus advises international online retail companies, advertising agencies and local retail clients on telecoms, media and data protection issues and is rated in the top tier in the Asia Pacific editions of Legal 500 and Chambers and Partners legal directories.

John Koh advises both private and international companies on mergers and acquisitions, commercial contracts and arrangements and joint ventures throughout Asia. John is dual-qualified in England & Wales and Hong Kong.

Simon Beswick, CEO of Osborne Clarke's international organisation, says: "We have been planning on supporting clients in a number of industry sectors on their legal needs in Asia for some time and as the first step in our strategy to do so, we are delighted to be able to offer the services of Marcus and John and their teams to our clients.

"We welcome Marcus Vass to the UK Partnership. He will continue to provide support to clients between Europe and Asia. His expertise in advising clients operating in digital business market as well as other industries fits perfectly into our sector approach and will enable us to continue to give our clients creative business-focussed advice at a competitive price.

"We're really looking forward to introducing John to our many clients that are in the sectors he specialises in digital business, automotive, life sciences and energy and utilities."
-ends-

Notes to editors
About Osborne Clarke:
Osborne Clarke has 600 lawyers in 18 international offices providing clients with consistently high standards of service and commercial cross-border legal advice tailored to their industry. Our discrete national firms combine the very best of OC with an understanding of the local business environment and in-depth legal expertise in each jurisdiction.

Our offices: Amsterdam, Barcelona, Brescia, Bristol, Brussels, Cologne, Hamburg, London, Madrid, Milan, Munich, New York, Padua, Paris, Rome, San Francisco, Silicon Valley and Thames Valley.
http://www.osborneclarke.com

The new law firm is being founded by two former Bird & Bird Partners, Marcus Vass and John Koh. The firm specialises in the digital business sector and advises both international and private companies on M&A, commercial contracts, joint ventures and data protection issues.

In addition, the founding partners have experience in Aviation, Automobile, Retail, Life Sciences and Energy & Utilities.

Read the full story at http://www.prweb.com/releases/2014/08/prweb12065658.htm


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