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The company’s goal is to generate profitable growth
and build shareholder value, while maintaining financial
strength and liquidity. In support of this goal are four
objectives:
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Achieving
a compound annual revenue growth over five years
of 10 to 15 percent through internal growth and
acquisitions |
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Generating
a return on capital, or ROC, in each business that
is greater than the weighted average cost of capital
for that business |
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Maintaining
our strong investment-grade credit ratings |
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Generating
a return for our shareholders that exceeds the return
of comparable companies in the telecommunications
industry over the long term |
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TDS made substantial progress on several of these objectives
in 2003. TDS’s five-year compound annual revenue
growth rate was 14 percent, in line with the revenue growth
rate objective. The business units continued to focus
on their respective return-on-capital objectives and are
committed to achieving them. And the credit ratings of
both TDS and U.S. Cellular remain several levels above
investment grade.
In addition, the company
took steps in 2003 to enhance the return it provides its
shareholders, while keeping the company financially strong.
TDS continued its common stock repurchase program, buying
back nearly 2 million shares at a cost of $92 million.
The company plans to continue the program in 2004, contingent
on market conditions, and has 1 million shares remaining
on an existing authorization. TDS also increased the dividend
7 percent in 2003 and recently announced a further 6 percent
increase for 2004, marking the 29th consecutive year of
annual dividend increases.
Asset-allocation decisions
are driven by the objective of keeping the company financially
strong, with enough liquidity to pursue attractive business
opportunities. During the year, TDS reduced its debt levels
by redeeming $371 million of debt and other obligations—actions
that will save the company approximately $31 million annually
in interest expense. U.S. Cellular amended and increased
its $325 million revolving credit facility to $700 million.
Finally, U.S. Cellular completed a 30-year $444 million
offering of senior notes at a very attractive rate. continue4
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