Telephone and Data Systems, Inc.

Ladies and gentlemen, thank you for standing by and welcome to the TDS and U.S. Cellular fourth quarter 2020 conference call. At this time, all participants are in a listen-only mode. After the speaker presentation, there will be a question and answer session. To ask a question during the session, you will need to press star one on your telephone. If you require any further assistance, please press star zero. I would now like to hand the conference over to Jane McCann. Thank you. Please go ahead, ma'am.

Thank you, Shelby, and good morning. Thank you all for joining us. We want to send our continued best wishes out to you and your families and hope that you are all well. I want to make you all aware of the presentation we have prepared to accompany our comments this morning, which you can find on the investor relations sections of the TDS and U.S. cellular websites. With me today and offering prepared comments are from TDS Pete Cerreta, Executive Vice President and Chief Financial Officer, from U.S. Cellular, LT Therivel, President and Chief Executive Officer, Doug Chambers, Executive Vice President and Chief Financial Officer, and from TDS Telecom, Jim Buttman, President and Chief Executive Officer, and Vicki Villacrez, Senior Vice President of Finance and Chief Financial Officer. This call is being simultaneously webcast on the TDS and U.S. Cellular Investor Relations websites. Please see the websites for slides referred to on this call including non-GAAP reconciliations. We provide guidance for both Adjusted Operating Income Before Depreciation and Amortization, or OIDDA, and Adjusted Earnings Before Interest Taxes Depreciation and Amortization, or EBITDA, to highlight the contributions of U.S. Cellular's wireless partnerships. PDF and U.S. Cellular filed their SEC Forms 8K, including the press releases, and Forms 10K yesterday. As shown on slide two, the information set forth in the presentation and discussed during this call contain statements about expected future events and financial results that are forward-looking and subject to risks and uncertainties. Please review the Safe Harbor paragraphs in our press releases and the extended version included in our SEC filing. In terms of our upcoming IR schedule, slide three, we will be virtually attending the Raymond James Institutional Investors Conference on March 2nd, the Morgan Stanley TMT Conference on March 4th, and the Deutsche Bank Media, Internet, and Telecom Conference on March 9th. And our open door policy obviously is now more of an open phone or an open video policy, so please reach out to us if you'd like a meeting. Before turning the call over, I want to remind everyone that due to the FCC's anti-collusion rules related to Auction 107, which are still in effect, we will not be responding to any questions relating to that auction. And now, I'd like to turn the call over to Pete Sreda. Pete?

Thanks, Jane, and good morning, everyone. I'm going to make some brief comments about the balance sheet and our funding position. But before doing so, I'd like to recognize the impressive operational and financial results of both businesses in 2020. It is these results that give us the confidence to invest back into the businesses. As we've discussed on past calls, maintaining financial flexibility is one of the pillars of our corporate strategy. Over the years, we've worked to retain relatively low leverage levels, long-dated debt maturities, sufficient undrawn revolving credit facilities, and significant cash balances, while at the same time making sure we have the financial resources we need to fund our businesses. As you can see on slide 4, at year end, TDS continued to have a good financial position, including ample available funding sources consisting of cash and cash equivalents, available revolving credit facilities, undrawn term loans, and undrawn portions of our EIP securitization facility. U.S. Cellular and TDS Telecom are both currently in investment cycles, with U.S. Cellular investing in network modernization, 5G and spectrum, and TDS Telecom aggressively investing in out-of-territory fiber. Given this, we were very busy last year raising new capital and locking in committed sources of capital. At US Cellular, we executed on two $500 million bond transactions, increased the size of our term loan and EIP securitization program, and extended the term of our revolver. At TDS, we put in place a new term loan and extended our revolver. These financings put us in a position to largely fund our capital plans for 2021. Nevertheless, we will continue to look for opportunities to lock down additional financing during 2021 to satisfy future funding needs, especially our FIBER program, reduce the cost of our balance sheet, and otherwise adjust our balance sheet. We believe that we have access to a wide range of potential debt and debt-like securities. I also want to highlight that in 2020, the CARES Act provided a unique opportunity to carry back tax losses from 2020 against profits made in prior years when the federal tax rates were 35%, which is 14% higher than the current rate. To take advantage of this, among other actions, we accelerated some capital spending from 2021 into 2020. The net effect of all this activity was an expected cash refund of approximately $180 million, the majority of which we expect to receive in the first half of 2021, which includes a permanent tax benefit of $60 million. For GAAP accounting purposes, this yielded an unusually low effective tax rate of 6.4%. TDS continues to return value to its shareholders, primarily through dividends, as we again raised our dividend representing the 47th consecutive year that we have increased it. In sum, we are in a financially solid position to take advantage of growth opportunities in each of our businesses. I will now turn the call over to LT.