Telephone and Data Systems, Inc.

Good morning. My name is Audra, and I will be your conference operator today. At this time, I would like to welcome everyone to the TDS and U.S. Cellular Fourth Quarter Earnings Results Conference Call. All lines have been placed on mute to prevent any background noise. After the speaker's remarks, there will be a question and answer session. If you would like to ask a question during this time, simply press star followed by the number 1 on your telephone keypad. If you would like to withdraw your question, press the star 1 again. Jane McCann, you may begin your conference. Thank you, Audra, and good morning, everyone, and thank you for joining us today. As we announced last September, Colleen Thompson will be taking over leadership of the IR function in May. We've been working together to assure a smooth transition, but I'll certainly be involved for the next few months. So, Colleen? Thanks, Jane, and good morning, everyone. I've spoken to a number of you in the past couple of months, but for those that I haven't met yet, I look forward to the opportunity. We 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 in offering prepared comments are from TDS, Pete Cereta, Executive Vice President and Chief Financial Officer. From U.S. Cellular, L.T. Theravole, President and Chief Executive Officer. Mikey Rosari, Executive Vice President and Chief Technology Officer. And Doug Chambers, Executive Vice President and Chief Financial Officer. From TDS Telecom, Jim Buttman, President and Chief Executive Officer. And 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 website. Please see the websites for slides referred to on this call, including non-GAAP reconciliation. 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. CDS and U.S. Cellular filed their SEC Forms 8K, including the press releases, in our 10Ks yesterday. As shown on slide two, the information set forth in the presentation and discussed during this call contains 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 on slide three, the team is dividing and conquering and presenting at both the Raymond James and the Morgan Stanley conferences on March 7th. And then on March 14th, we will be participating at the Deutsche Bank conference. And as always, our open door policy can now be an open door, phone, or video policy. So please reach out if you're interested in speaking with us. I will now turn the call over to Pete Tureta. Pete?

Thanks, Colleen, and good morning, everyone. In December, we announced that I will be retiring in May, and Vicky Villacres will be replacing me. Vicky has been CFO of TDS Telecom since 2012, and prior to that led financial planning and strategic analysis for the enterprise. So this transition should be very seamless. Vicky has been an important driver of TDS Telecom's success over the past 10 years, and she will bring a wealth of experience to her new job. I congratulate her on this new challenge. On slide four, as we looked at 2022, I want to highlight all the positive trends impacting our businesses. Demand for broadband continues to grow. Connectivity, whether mobile or fixed, is a necessity to remote education, healthcare, and work. The markets we serve, primarily suburban and rural, are benefiting from people migrating to these areas out of major cities. Additionally, 5G offers high-speed fixed wireless, And with fiber available to only 30% of households in the U.S., this represents a great opportunity for us. TDS was founded 50 years ago on a mission of bringing connectivity to unserved and underserved markets. So the introduction of the infrastructure bill brings opportunities for both of our businesses. And lastly, over that time, TDS has also held a multi-stakeholder approach to good corporate citizenship at the forefront of its values. As we expand our ESG program, we are essentially reinforcing the values that we have already had, caring about customers and associates, striving to enhance the lives of people in our communities, as well as serving as a good steward of the environment. As we've discussed on our past calls, maintaining financial flexibility is one of the pillars of our corporate strategy. Our strong financial position and ready access to the debt capital markets enabled U.S. Cellular to purchase valuable mid-band spectrum while also enabling TDS Telecom to expand investments in our growing fiber program. This strong financial position and market access will be important as we continue to invest in our fiber program in the future, as Jim will discuss later in the call. Before the business units discuss their successes, I want to briefly talk about the transformation of our balance sheet as illustrated on slide five. First, we have worked to diversify our funding sources through a variety of different types of financings, including preferred stock, an export credit term loan, a syndicated term loan, new 10-year co-bank term loans, and an increase in our equipment installment receivable securitization facility. In addition, we had a goal to lower the average cost of our financings. Since the beginning of 2020, we have raised $3.5 billion in new capital, both debt and preferred equity, at 4.8%, while at the same time redeeming $1.8 billion in debt that carried a weighted average cost of 6.9%, reducing our average cost from 6.7% to 5% and resulting in $37 million in annual coupon savings. Importantly, going forward, we believe that this, that we will continue to have access to the debt capital markets through a variety of instruments to continue to finance our future growth. Finally, I want to highlight that we have again increased our dividend rate. This represents the 48th consecutive year that we increased our dividend. Quite an accomplishment. I will now turn the call over to LT. LT. LT.

Thanks, Pete. If we can turn to slide seven, I'm really pleased with all the team accomplished in our progress in 2021, and much of it was foundational for 2022. We continue to see positive momentum in several focus areas of the business, and that includes prepaid, business and government, and fixed wireless. We've developed tactical plans to reach our return on capital goals over the next three years. I'm going to let Doug cover the operational and financial highlights, as well as our guidance for 2022. I first want to provide a few thoughts on these strategic priorities. Last year, we launched a regionalization strategy. That's something our competitors can't replicate. That lets us test and optimize a wide range of actions, and that includes pricing constructs, promotions, media mix. The renewed focus on prepaids led to some encouraging initial results and positive prepaid ads for the year, as well as laying the foundation for future growth with expanded distribution and a new approach to lifecycle management. Last year, we laid the foundational work to build the business and government side of the business, and that included segmentation and specialization of our internal sales team, as well as the addition of new distribution, new partners, new channels, and these should position us to generate meaningful revenue growth. As I discussed in previous calls, we've strengthened our market position as a tower company, made numerous enhancements, which let the market know that we're open for business. You can see that in the results. I think we're just getting started here. Turning to the network, we continue to pursue our network modernization program and our multi-year 5G deployment. The majority of our traffic is now carried by sites that have 5G deployed. And equally important, we're getting 5G devices into our customers' hands. So far, nearly 30% of our smartphone subscribers have 5G-capable devices. The biggest development on the network side in 2021 was our targeted acquisition of C-band and DoD spectrum. We now have a really solid mid-band spectrum portfolio. Even though the auctions were quite expensive when you compare them historically, I'm really pleased with our outcome. And I'm going to ask Mike Irizarry to give you a bit more detail on this. Mike? Thanks, LT. Good morning.