Telephone and Data Systems, Inc.

Thank you for standing, man. Welcome to the TBS and U.S. Senator's second quarter earnings results. At this time, all participants are in the listening-only mode. After the speaker's presentation, there will be a question-and-answer session. To ask a question during the session, you will need to press star 1 on your telephone keypad. Please be advised that today's conference is being recorded. If you require any further assistance, please press star 0. I would like to hand the conference over to Jane McCann, Senior Vice President, Corporate Relations. Thank you. Go ahead.

Thank you, Blue. Good morning, and thank you for joining us today. We want to send out our very best wishes that you and your families are well. I want to make you all aware of the presentation we've prepared to accompany our comments this morning, which you can find on the investor relations sections of the TDS and US Federal websites. With me today and offering prepared comments are from TDS, Pete Cereta, Executive Vice President and Chief Financial Officer. From U.S. Cellular, Belty Theraval, President and Chief Executive Officer. Doug Chambers, Executive Vice President and Chief Financial Officer. And from TDS Telecom, Vicki Villacres, 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 OIBDA, and adjusted earnings before interest, taxes, depreciation, and amortization, or EBITDA. to highlight the contributions of U.S. Cellular's wireless partnerships. TDS and U.S. Cellular filed their SEC forms 8K, including press releases yesterday, and then we filed our 10Qs this morning. 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 filings. In terms of our upcoming IR schedule, slide three, the investor relations team is attending the Morgan Stanley Media and Communications Corporate Access Day on August 12th. And as always, our open-door policy can now be an open-door phone or video policy, so please reach out to us if you're interested in speaking with us. Also, we want to call your attention to our recently refreshed and updated Environmental, Social, and Governance ESG website. And additionally, in order to advance our ESG strategy, we recently conducted a materiality assessment to help prioritize and score ESG opportunities and risks from the perspective of internal and external stakeholders. When finalized, we will publish the results on our website. Before turning the call over, I want to remind everyone that due to the FCC's anti-collusion rules related to Auction 110, we will not be responding to any questions related to Spectrum Auctions. And now I'll turn the call over to Pete Cereda. Pete?

Thanks, Jane, and good morning, everyone. Before speaking about the balance sheet and our funding strategies, I wanted to recognize all the actions that both of our business units are taking to lead to higher returns and stronger businesses over the next several years. Turning to the income statement, I want to call your attention to a couple of unusual items. First, our effective tax rate was a negative 48.9% during the quarter due primarily to the reduction of certain tax accruals. And as part of redeeming some of our higher cost debt, we recorded an additional $36 million in non-cash interest expense, $20 million of which was at U.S. cellular. And this was to write off unamortized debt issuance costs from prior bond transactions. 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 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 four, at the end of the second quarter, TDS continues to maintain a solid financial position, including ample available funding sources consisting of cash and cash equivalents and available credit facilities, which is especially important since 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 fiber expansion. we will continue to look for innovative ways to finance these investments while preserving our credit rating. Turning to slide five, I also want to call your attention to all the work that has been done to lower the average cost of our financing. As you can see, through June 30, we've redeemed over $1 billion in debt with a weighted average cost of 7.1 percent and replaced it with debt with an average cost of 4.8 percent. This results in a run rate of $25 million in annual coupon savings on the redeemed debt. And then earlier this week, both TDS and U.S. Cellular announced additional redemptions of high-cost senior notes, and this will raise the amount redeemed by over $450 million to a total of almost $1.6 billion. Also earlier this week, and shortly after we announced that we were calling the U.S. Cellular notes and planning to fund the transaction by drawing down on our EIP securitization, Moody's affirmed TDS's corporate family rating, but downgraded the remaining U.S. cellular senior notes. The reason for this downgrade reflects the fact that the new EIP debt that will be taken on to fund the redemption comes ahead of the remaining notes in right of payment. The downgrade is specific just to those notes, not to the company in general. Moody's views the recent refinancing steps to lower the cost of the balance sheet as credit positive. In sum, we believe both business units have a lot of growth opportunities, and we are ensuring that we have the financial resources to fund them, while at the same time, we are continuing to lower the average cost to finance them. I will now turn the call over to LT. LT?