As previously announced, TDS will hold a teleconference Feb. 24, 2012 at 9:30 a.m. CST. Listen to the live call via the Conference Calls page of www.teldta.com. 

Contact:  Jane W. McCahon, Vice President, Corporate Relations

                 (312) 592-5379, jane.mccahon@teldta.com

                 Julie D. Mathews, Manager, Investor Relations

                 (312) 592-5341, julie.mathews@teldta.com

FOR RELEASE: IMMEDIATE

TDS Reports FOURTH quarter results

provides financial guidance for 2012

Note: Comparisons are year over year unless otherwise noted.

Fourth Quarter Highlights

U.S. Cellular

§        Smartphones increased to 52.5 percent of total devices sold from 39.6 percent; smartphone customers increased to 30.5 percent of postpaid customers from 16.7 percent.

§        Postpaid ARPU (average revenue per unit) increased 5 percent to $53.35 from $50.99.

§        Service revenues increased 4 percent to $1,030.0 million.

§        Operating income increased $20.4 million to $16.3 million.

§        Net loss of 13,000 retail customers, reflecting loss of 20,000 postpaid customers and a gain of 7,000 prepaid customers; postpaid customers comprised 95 percent of retail customers.

§        Cell sites in service increased 3 percent to 7,882.

TDS Telecom

§        Operating revenues increased 4 percent to $206.8 million.

§        ILEC triple play penetration increased to 29 percent from 26 percent.

§       TDS managedIP stations (ILEC and CLEC) grew to 43,100 from 27,400.

The fourth quarter of 2011 was impacted by a $7.2 million expense related to the Share Consolidation (see below) that was not deductible for tax purposes, as well as a $6 million adjustment that increased tax expense related to prior periods.

For the twelve months ended Dec. 31, 2011, TDS reported operating revenues of $5,180.5 million, versus $4,986.8 million in 2010.  Net income attributable to TDS for 2011 was $200.5 million, or $1.83 diluted earnings per share. In 2010, net income attributable to TDS was $144.8 million, or $1.31 diluted earnings per share.

“TDS increased revenues and improved profitability in 2011, despite very competitive industry environments for both U.S. Cellular and TDS Telecom,” said LeRoy T. Carlson, Jr., TDS president and CEO. “Both companies are making significant investments in their networks and operational infrastructure to enhance customer experiences and improve operational efficiency.

“Average total service revenue per customer at U.S. Cellular grew six percent in 2011, through greater smartphone penetration, the resulting higher-revenue data plans, and data-driven increases in inbound roaming revenues. Effective cost controls, including careful management of device subsidies, helped to improve profitability. U.S. Cellular had solid holiday sales with positive net retail additions in December, though not enough to offset customer losses for the quarter. 

“Growing the postpaid customer base is U.S. Cellular’s top priority for 2012. The company’s strategy to compete includes bringing 4G LTE speeds and devices to customers, attracting new customers by building awareness, increasing our focus of small-to-medium business customers, and looking to expand other points of distribution. U.S. Cellular is also striving to increase profitability by continuing to improve its cost structure and by efficiently managing data growth.

“TDS Telecom continued to build its broadband business in 2011, adding high-speed data customers in its ILEC business, and offering more data services and faster speeds. On the commercial side, TDS Telecom continued to grow the number of stations for its managedIP voice and data solution, and expanded its hosted and managed services business through acquisitions and organic growth.

“TDS Telecom’s strategic priorities for 2012 include continuing to increase broadband speeds, and launching TDS TV® in 19 markets. The company is increasing the range of its services and products for businesses, and will continue to expand the hosted and managed services footprint and service portfolio. TDS Telecom also plans to make substantial progress toward completion of its broadband stimulus projects in 2012 to bring high-speed data access to rural communities.

“At the TDS corporate level, we increased our financial flexibility and reduced the complexity of the capital structure through the Share Consolidation, which was approved by shareholders and became effective in January 2012.  We are also evaluating additional steps to increase shareholder value, while continuing to focus on profitable growth.”

Share Consolidation

On Jan. 13, 2012, TDS shareholders approved Charter Amendments to the TDS Restated Certificate of Incorporation, including a Share Consolidation Amendment to reclassify each Special Common Share as one Common Share, each Common Share as 1.087 Common Shares, and each Series A Common Share as 1.087 Series A Common Shares.  Additionally, there was a Vote Amendment that fixed the percentage voting power in certain matters, and amendments to eliminate obsolete and inoperative provisions.  

These approved Charter Amendments were effected on Jan. 24, 2012, and the Special Common Shares ceased to be outstanding and consequently ceased trading on the New York Stock Exchange under the symbol “TDS.S.” 

As of Jan. 24, 2012, immediately prior to the reclassification, there were outstanding 6,549,000 Series A Common Shares, 49,980,000 Common Shares and 47,012,000 Special Common Shares.  As of Jan. 24, 2012, immediately following the reclassification, there were outstanding 7,119,000 Series A Common Shares and 101,340,000 Common Shares.

As a result of the Share Consolidation Amendment, shares outstanding as of Dec. 31, 2011, as well as average basic and diluted shares outstanding used to calculate earnings per share as of the beginning of all periods presented, were retroactively restated to reflect the impact of the increased shares outstanding.

TDS’ consolidated balance sheet as of Dec. 31, 2011 was also retroactively adjusted to reflect the incremental shares issued to Common and Series A shareholders based on the closing price of TDS Common Shares as of Dec. 31, 2011.  As a result of the reclassification, an increase in Common Shares, Series A Common Shares and capital in excess of par was offset by a corresponding decrease in retained earnings, with no change to the overall amount of shareholders’ equity.

(1)     These estimates are based on U.S. Cellular’s current plans, which include a multi-year deployment of 4G LTE technology which commenced in 2011. New developments or changing conditions (such as customer net growth, customer demand for data services or possible acquisitions, dispositions or exchanges), could affect U.S. Cellular's plans and, therefore, its 2012 estimated results. 

(2)     2011 Actual Results include gains on asset disposals and exchanges, net of $1.9 million.  The 2012 Estimated Results include only Depreciation, amortization and accretion expenses; such estimated results do not include net gains or losses on disposals and exchanges of assets, or losses on impairment of assets (since such transactions and their effects cannot be predicted). 

(3)     These estimates are based on TDS Telecom’s current operations.  Various other factors, including possible acquisitions, dispositions or exchanges, could affect TDS Telecom’s estimated guidance in 2012.

(4)     2011 Actual Results include losses on asset disposals of $1.2 million.  The 2012 Estimated Results include only the estimate for Depreciation, amortization and accretion expenses; such estimated results do not include net gains or losses on asset disposals and exchanges or losses on impairment of assets (since such transactions and their effects cannot be predicted).

(5)     Adjusted OIBDA is defined as operating income excluding the effects of Depreciation, amortization and accretion (OIBDA): the net gain or loss on asset disposals and exchanges (if any); and the loss on impairment of assets (if any).  This measure also may be commonly referred to by management as operating cash flow.  This measure should not be confused with cash flows from operating activities, which is a component of the Consolidated Statement of Cash Flows.  Adjusted OIBDA excludes the net gain or loss on asset disposals and exchanges (if any) and loss on impairment of assets (if any), in order to show operating results on a more comparable basis from period to period.  TDS does not intend to imply that any of such amounts that are excluded are non-recurring, infrequent or unusual and, accordingly, they may be incurred in the future.  TDS believes this measure provides useful information to investors regarding TDS’ financial condition and results of operations because it highlights certain key cash and non-cash items and their impacts on cash flows from operating activities.

(6)     Under the American Recovery and Reinvestment Act of 2009 (“the Recovery Act”), TDS Telecom will receive $105.1 million in federal grants and will provide $30.9 million (a portion of which is included in 2012 estimated capital expenditures) of its own funds to complete 44 projects.  Under the terms of the grants, the projects must be completed by June of 2015.

Stock repurchase summary

The following represents repurchases of TDS Common Shares and TDS Special Common Shares.

Conference call information

TDS will hold a conference call on Feb. 24, 2012 at 9:30 a.m. CST.

§  Listen to the live call online at  http://www.videonewswire.com/event.asp?id=85230  or on the Conference Calls page of www.teldta.com. 

§  Listen to the live call by phone at 877/869-3847 (US/Canada), no pass code required.

Before the call, certain financial and statistical information to be discussed during the call will be posted to the Conference Calls page of www.teldta.com. The call will be archived on the Conference Calls page of www.teldta.com. 

About TDS

Telephone and Data Systems, Inc. (TDS), a Fortune 500® company, provides wireless, local and long-distance telephone, and broadband services to approximately 7 million customers in 36 states through its business units, U.S. Cellular (wireless) and TDS Telecom (wireline). Founded in 1969 and headquartered in Chicago, TDS employed 12,300 people as of Dec. 31, 2011.

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: The ability of U.S. Cellular to successfully grow its markets; the overall economy; competition; the access to and pricing of unbundled network elements; 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; risks and uncertainties relating to possible future restatements; pending and future litigation; changes in income tax rates, laws, regulations or rulings; acquisitions/divestitures of properties and/or licenses; and changes in customer growth rates, average monthly revenue per unit, churn rates, roaming revenue and terms, the availability of handset 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 used by TDS to furnish this press release to the SEC, which are incorporated by reference herein.

For more information about TDS and its subsidiaries, visit our websites at:

TDS:  www.teldta.com                                                                        TDS Telecom: www.tdstelecom.com 

U.S. Cellular: www.uscellular.com     

4

(1)   Used only to calculate market penetration of consolidated markets and consolidated operating markets, respectively. See footnote (2) below.

(1)     Sum of physical access lines and high-capacity data lines, adjusted to estimate the equivalent number of physical access lines in terms of capacity, plus the number of managed Internet Protocol telephony (“managedIP”) stations.

(2)     Individual circuits connecting customers to a telephone company's central office facilities.

(3)     The number of customers provided high-capacity data circuits via various technologies, including DSL, managedIP and dedicated Internet circuit technologies.

(4)     The number of telephone handsets providing communications using IP networking technology.

N/M – Percentage change not meaningful