Telephone and Data Systems, Inc. (TDS) Earnings Call Transcript

Yes. Jane, can you hear me?

Yes, we can.

Okay. Ms. Franklin, thank you. You've read the statement from the proposal as published in the proxy. And for the reasons set forth in the notice of annual meeting and proxy statement. And I encourage everyone listening to read the response from the TDS Board of Directors, the TDS Board of Directors recommends a vote against the shareholder proposal that has just been presented. To be approved, the shareholder proposal would require the affirmative vote of a majority of the votes that could be cast by the holders of the Series A common shares and common shares of TDS, voting as a group. In the election of 4 directors, the holders of common shares are entitled to 1 vote for each common share registered in their names. In matters other than the election of directors, the holders of common shares are entitled to 0.518949 votes for each common share registered in their names at this meeting. The holders of Series A common shares are entitled to 10 votes for each Series A common share registered in their names. The Series A common shares vote with respect to all matters except the election of the 4 directors elected solely by the holders of common shares. It is now 9:14 a.m. on May 20, 2021, and the polls are closed for voting. Since the inspector of election has not informed me of any changes in outcome on any of the proposals, we will proceed with the announcement of the voting results at this time. With respect to the election of directors, each of them received a substantial majority of the votes of the class of stock voting for such director. Accordingly, each of such persons has been elected as a Director of Telephone and Data Systems, Inc. for a term expiring at the 2022 annual meeting of shareholders or until his or her successor shall have been elected and qualified. The proposal to ratify the selection of PricewaterhouseCoopers LLP as independent registered public accountants for 2021 has received the affirmative vote of holders of a substantial majority of the combined voting power of the Series A common shares and common shares. This proposal is therefore also approved. The proposal to approve, on an advisory basis, the compensation of our named executive officers has received the affirmative vote of holders of a substantial majority of the combined voting power of the Series A common shares and common shares. This proposal is therefore also approved. The shareholder proposal did not receive the affirmative vote of the majority of the votes that could be cast by the holders of Series A common shares and common shares of TDS voting as a group, present in-person or represented by proxy and entitled to vote with respect to such matter at this annual meeting. Accordingly, the shareholder proposal has not been approved. The inspector of election will take any additional votes received after the commencement of this meeting and prior to the closing of the polls and furnish a written report of the final vote count with respect to the matters voted on today, which will be included in the minutes of the meeting. These voting results will be reported on a Form 8-K that will be filed within 4 business days of today. Since there is no further business to come before this meeting, the meeting is adjourned. At this time, LeRoy T. Carlson, Jr. will make a brief presentation.

Thank you, Walter, and good morning, and I want to thank all of you for listening to this TDS Annual Meeting. My comments today include forward-looking information. Therefore, I ask that you review this safe harbor statement. You can find the slides for this presentation on our Investor Relations website, along with related SEC filings, which include a description of important factors that may cause our actual results to differ from forward-looking statements. At TDS, our mission is to provide outstanding communication services to our customers and to meet the needs of our shareholders, our people and our communities. Now more than ever, we all recognize the importance and responsibility of providing critical communications and data services that our customers and communities depend on. We continue to implement strategies that we believe will improve our performance over time and provide sustainable long-term growth into the future. The challenges of 2020 underscore the essential services that TDS and our industry provide. Our responses to changes caused by the pandemic showcase the strength of our networks and the resilience of our talented associates, as they navigated the year and continued to provide outstanding communication services to our customers. The health and safety of our associates and customers was and still is our top priority. Our long-term strategy of aggressively investing in our businesses showed results in 2020, and we are continuing this investment strategy throughout the TDS family of businesses. To bring our customers even higher quality, wireless and broadband services. In 2020, U.S. Cellular welcomed new CEO, Laurent LT Therivel, who has seamlessly transitioned to his role with the invaluable assistance of Ken Meyers, who retired in September. LT has developed dynamic and innovative strategies to strengthen U.S. Cellular's growth and financial performance. Like our peers in the wireless industry, U.S. cellular felt the effects of the pandemic with a massive increase in demand for data on our network. And significant declines in store traffic. U.S. Cellular continued to invest in its network. It successfully kept churn low throughout the year and it acquired new subscribers and it maintained a strong conversion rate and produced good financial results. This provides a solid launch point for U.S. Cellular to pivot in 2021 to a year focused on growth. In 2021, U.S. Cellular continues significant investments in our network, to ensure we are providing high-quality connections in all our markets, especially those underserved by other carriers. We are progressing with our network modernization programs to increase capacity and speeds and to deploy 5G. Our primary focus in 5G is to identify use cases that meet the needs of our customers, generate revenue and reduce costs. We are pursuing opportunities to grow market share through life cycle management and personalized sales and retention approaches. U.S. Cellular has adopted a regional model to further enable a community-by-community go-to-market approach and drive a deeper focus on our customers. In the B2B space, U.S. Cellular is placing an emphasis on new distribution opportunities and ramping up sales efforts. We are working to ensure our capital investments lead to profitable growth by maintaining expense discipline through operational efficiency. Despite rapidly increasing data usage, we have kept system operations costs low. Increasing online transactions and self-service options will help to lower operating expenses as we ramp up our efforts to create outstanding digital experiences for our customers. 2020 was a transformational year for TDS Telecom, resulting in one of the most successful years in its history. The seismic shift to remote working and learning highlighted the importance of high-speed broadband in the home. Demand for increased home broadband data speeds and continued popularity of bundled video products, led to higher average revenue per user. TDS Telecom expanded its deployment of fiber technology into new markets. We significantly grew our wireline fiber footprint 7% by adding 67,000 fiber service addresses passed. We significantly grew our cable segment including broadband connections from our year-end 2019 acquisition of cable company Continuum. TDS Telecom strategic imperatives for 2021 are focused on investments to further transform our product offerings and drive growth. TDS Telecom will continue to increase our broadband penetration and fiber footprint outside and inside our current markets. Our goal is to double our annual fiber growth from the previous year and to deliver 150,000 marketable new fiber service addresses across existing and expansion markets. This includes ramping up our fiber builds in Wisconsin and fast-growing areas of the Pacific Northwest. We carefully analyze and evaluate additional expansion markets, looking for growing communities with good population density, proven presell demand and attractive competitive environments. We are also leveraging regional support from our existing service territories. TDS Telecom is focused on operating lean to support significant operational and capital investments. Examples of increased operational effectiveness include systems enhancements in supply chain management, network data analytics and customer self-service capabilities. I thank each of our shareholders, debt holders and associates for your support, which enables TDS to continue to serve our customers and provide them with essential services at this time of their great need. Jane, do we have any questions from our shareholders?

Ted, we don't have any questions from the webcast.

Okay. Well, then, Jane, we should turn this back over to Walter.

Yes.

Thank you, Jane, and thank you, Ted. Thank you very much, ladies and gentlemen, for attending this annual meeting, and please stay safe. And we look forward to our 2022 annual meeting, where we are hoping that we can go back to meeting with you all in person and through webcast. Operator, the meeting is concluded.

This concludes the meeting. You may now disconnect.