United States Cellular Corporat (UZF) 18 Feb 222021 Q4 Earnings call transcript

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 UScellular's Fourth Quarter Earnings Results Conference Call. [Operator Instructions] Jane McCahon, 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. to the transition, next together be I'll working for involved few been ensure but smooth certainly We've months.

So Colleen?

Butman, TDS this We the partnerships. see and UScellular's and Forms yesterday. press SEC and reconciliations. amortization, President President and Investor Vice of to Thanks, the months. Executive everyone. EBITDA, the call of UScellular I websites. With guidance UScellular, amortization, presentation on and non-GAAP Doug to and Please Villacrez, or including earnings contributions morning, provide Jane, I've operating spoken interest, Chief and find and We and sections the I Senior our of the offering of make webcast comments the for yet, to Executive depreciation UScellular Financial this morning, websites. UScellular adjusted can and wireless prepared you depreciation taxes, and Officer; releases TDS, including highlight look referred LT is Chambers, President filed of which and TDS slides Relations and XX-K TDS want a haven't President Chief Chief forward Jim Executive we Chief met or you for Officer; X-K, adjusted past accompany income before for Chief But Relations me both prepared Investor Technology before OIBDA, and in TDS Vice of to from comments the President couple Finance and Chief their Financial the those on Officer. This websites Vice that and Mike you Officer; on from our Executive opportunity. Officer; today Therivel, aware Officer; simultaneously Vicki being Vice Pete the Irizarry, Good to are Telecom, number from to have Sereda, all President Financial and Executive call,

presentation subject SEC forward-looking the the paragraphs expected the and our in X, included uncertainties. and are contains review and information in discussed during risks set events Slide call the press and statements about to forth version in harbor this extended our that filings. releases and future on shown safe Please As results financial

of door, conferring schedule is And then we on presenting Raymond team James or at video our X, And policy. the XXth, our In at open-door conferences open Xth. Bank an on policy Slide upcoming phone Conference. be dividing terms on can IR will always, the Deutsche now at the and participating Morgan Stanley and March March as both be

you're So the us. I Pete in please out Pete? to with reach if interested speaking will call turn Sereda. now over

XXXX we that since and the I enterprise. that Good prior morning, Telecom be and been December, retiring Villacrez CFO will and has analysis led everyone. of in Colleen, TDS be Thanks, planning financial replacing announced May Vicki me. In will to strategic Vicki and for

this XXXX, transition very benefiting education, experience seamless. primarily all suburban mobile job. on new been The this X, major areas to will look highlight whether wealth a she challenge. On rural, the these be past over years, or Connectivity, from cities. driver fixed, out a our I positive to bring to continues work. migrating businesses. to grow. necessity we and serve, to should of Demand of markets people for trends an congratulate broadband I TDS we the remote is So care success important of impacting and health as want new Telecom's her XX Slide Vicki at her has are and

U.S., founded this opportunity represents connectivity and unserved mission Additionally, XX% markets. on of for XG in wireless. ago high-speed offers only was years great bringing with us. TDS And underserved of households fiber a fixed to available XX to a the

businesses. And corporate that citizenship of our infrastructure the values. of held time, multi-stakeholder introduction to has also TDS the forefront So lastly, brings its the a good both over of at bill for approach opportunities

ESG As reinforcing to people well that steward customers of program, essentially as the in the our we serving lives enhance expand a about communities, we associates, the already are our good and values striving had: we caring as environment. have as of

we X past calls, on maintaining our As corporate discussed the financial our of pillars is flexibility of strategy.

program. to call. position mid-band valuable be will TDS important expand in the financial as Telecom markets access growing to This enabling invest access financial future, continue to our in in the strong capital Our and fiber ready program position Jim market while as in our purchase also and debt discuss later spectrum enabled fiber investments will we to strong the UScellular

business the as sheet the want successes, X. balance transformation of units briefly discuss I illustrated our about to their Before Slide on talk

have funding our variety diversify securitization equipment worked credit receivable a new syndicated different in installment of core an of an financings, our term types facility. preferred we sources First, including term a and loan, bank term to through loans increase export loan, stock, XX-year

debt goal to the cost our have financings. Since XXXX, at beginning in both a billion had we lower equity preferred at annual new debt while addition, X.X%, the X% that reducing In resulting million $XX X.X% cost average and same savings. $X.X X.X%, capital, from the we of time of in average our redeeming weighted coupon and average of to in carried $X.X a cost billion in raised

the our of we we variety forward, a access have will continue markets to growth. to future to instruments capital through to that believe debt Importantly, continue going finance

LT. again the increased our we rate. I XXth want that an year consecutive increased highlight This LT? to we accomplishment. I that will the dividend turn now dividend, have quite over represents our Finally, to call

X. can team and much we in progress for XXXX Slide and the our with foundational of If it XXXX. was pleased to Pete. accomplished Thanks, I'm all turn really

work several strategic the to cover capital years. I focus for areas launched reach the range we prepaid, and strategy. our tactical But momentum and well of return let includes developed actions, replicate. on of well initial to the plans laying That pricing a business generate these channels. for approach as side growth test us and While some us guidance revenue media constructs, can't new includes XXXX. in and And team and thoughts year we distribution a our future prepaid focus that management. Last over expanded as position that as I am we've on priorities. Last addition let foundational first well as see on the business, renewed and year that should provide to regionalization wireless, prepaid we our build for as continue encouraging highlights The fixed the competitors and year next positive as the That's optimize wide meaningful to the business. internal financial partners, new and promotions, a positive results the segmentation goals and in of lifecycle mix. us to new adds government the sales foundation a laid want of distribution, operational of our something business includes lets to government And to going Doug growth. specialization X new these few with

market in that know I as let we enhancements made strengthened see numerous company, business. tower open you the our previous As a can position discussed And for in market that results. calls, which we're the

getting just think I started we're here.

to the network. Turning

sites majority customers' hands. our modernization into program And XG important, deployed. getting of We that by we're equally network and now have The continued our carried pursue our deployment. XG multi-year XG traffic is to our devices

I'm The our in nearly development biggest So XX% XG-capable solid spectrum. outcome. on I'm portfolio. have of And was DoD pleased XXXX network more them acquisition and have were compare going quite give of to Irizarry subscribers bit smartphone far Mike? to detail the devices. this. spectrum historically, the We a Even though with really on you auctions side expensive our targeted Mike you now really ask our C-band when a mid-band

LT. Thanks, morning. Good

to Turning X. Slide

strong we in This mid-band. we our the millimeter of will band high-band and the in with C-band the strategy. and megahertz our Mid-band mid-band is band operating spectrum positions. low low our substantial footprint advance majority XXX holdings. our with to acquired have our auctions, subscribers bridge as and addition continue spectrum spectrum XX% We serves between covering of spectrum And wave XG and to DoD our of

use at paid per lower megahertz-pop the including incentives positions previously have provides depth with wave total, XG to and payments, continue wireless of cases. In invested and and deliver slightly required -- as to support plenty auctions millimeter aggregable mobile low, average outstanding XXX footprint. overall have in megahertz the than spectrum acquired and bands mid strong spectrum XXX and have us was services auction done high all our spectrum billion across fixed As reminder, $X us mid-band averages. spectrum an we and in customers price efficient prices capacity that in we and a XXX our This -- gives services relocation we future over both our of X and to so

cost were these we successfully while to purchases financing. of earlier, mentioned reducing also Pete As to capital the our raise finance able

requirements goals, next. us it spectrum experience are key and which discuss We mid-band mid-band radio ongoing turn XXXX our equipment that on will well to for spectrum Over being the These our Overall, and allow to our deploy to to will C-band position preparing plan. our LT on and efforts both efficiencies XG efficiently. clients optimizing which will you, cleared, strong spectrum LT. with leveraging enabling DoD to C-band our as prior begin be modernization our network, as tower enables network will

We Mike. X. Thanks, Page turn to

build on you our XXXX will for Our progress and in strategic priorities to look XXXX. they familiar

Our mission the remains same.

the to them. the customers places our to connecting most to dedicated people and is company matter Our that

As investment you in lot executing know, I investment. spectrum mentioned And that we the a made requires of earlier. mission

being our capital. for roll to hear spectrum key out of use investment, to in a business. One purchased. In to order our going we we justify from plan we our on modernize to that the key have set we pace have expand steady and we that Doug long-term to potential later capital network should that's And mid-band plans metric or we particularly lot the with opportunity maintain of that capital as IIJA. X on return the that context funds but investment allocated goals advantage You're return around finally Infrastructure the Investment connecting to the some Jobs year for the in America. To is passed rural underserved, Act, next a take just game-changer, our the for put the and not and on help recently UScellular is that it. This to a and

to in billion the allocations we flowing of You flowing billion being specific billion out, areas $X The broadband. to likely $XX allocated least to we still but the network. can you and states operate got think operate worked at that about are where $XX

wireless I by Now go our from call, results in millimeter had role about symmetry to I as wave last encouraged avoiding should. how Department that of will the requirements. fiber, in our it That wireless encouraged a big am play as calls to allow fixed previous well. I've trials. talked fixed potentially I Commerce will to of committed lot a But that mentioned was

provide This X kilometers to build experience those improve challenge just see infrastructure doesn't the individual X that and wireless. of that's the to also the network exciting much XXX It's the tower our you sight. to is in our millimeter case a can fixed can stop commercially In focused denser homes economics. in improvement run use the order to necessary only the massive of carriers profile We that You is run towers, an gig know provide speeds covers product tower on wireless. line to extra businesses XG. That is nearly And fiber prepaid the solutions. But deployment to locations. of I improve owns part our also launched base. and to you That's didn't, builds across wave and coverage, fiber for mobile the that over a that can't will than economics to with wireless of economics hundreds fiber coverage need tower operator funding comprehensive forgot, We benefit the work. benefit we broadband at with to the we're improve postpaid IIJA gigs. We mobile is cheaper significantly and X match. And it provide of fixed make our lot for funding to can towers. each funding existing and

really to towers digital plan, this I'm about invested, economics execute experience positive our new improve may want stakeholders, communities X to positive with years in XXXX. I which network talk doing significantly well carriers, underserved our area, with the So We've resignation to economics. divide also we're that's it local which and and we creates key advancing for talent. strategy all for and levers do take work thus our state in to several can managed for the bridge about the those areas, which great far. other the to other market It to governments helping prospects enthusiastic but incredibly the

Cox laugh that #XXX We're year-over-year place. in is That's of our as on my I my But to and America's and at were Employers. to to CBS up ahead customer-focused you'd the March Our XXX on investing first like #XXX the of stable in to encourage XXX, the you attrition can ahead even at list of at we're place a see Undercover in That's of can on that a emphasis weren't and remain year, We XXX, Forbes from Best And powerful was at number Boss others Employer culture inclusion Best relatively diversity, in of also ranked. And in keep of to ahead lot culture XXXX. Verizon culture going fantastic ahead on our view, telecom. work. ranked hand, country. mustache. just culture we recognized to of tremendous that's into to due this witness we're even last see you Xth, it, you to and outrageous have tune how an equity ensure and expect to increased T-Mobile if

A objective a good a to benefits of the in us to in XXXX. made strategic And bit more for detail. the that major is in really turn I started We many We to Slide objective let's lot of growth is want example. areas Now growth. a in business. Prepaid investments see cover XX.

somewhat entire management really holding was lack and connections area, not not in for proposition, initiatives and through and aggressive we a it's customers time, of our carries environment lifecycle last postpaid one, I that than in to year economics of impact net the big device as are the growth, for UScellular. and I to underway postpaid digital the That's challenging upgrades, dilutes devices growth additions particularly net At challenging share value our XXXX. The for that's business postpaid The with add market the that industry. the of As one longer variety as our even the satisfied expect just better are for on promotions. ever, experience. a pivoted ever, was stabilize momentum A dynamic, improvements remains and base. customer competitive same

closer briefly We expand new sector. You can laid particularly and the groundwork in in our us continue our in leverage on networking see the community-by-community in customers. We to the distribution. long business also a private this space. expect to getting space our approach, the adjusting regional talked in revenues We're go-to-market our to and on even government this area in confident XXXX to ability with term, the IoT in basis

regional operator, going That footprint. we in the there our we expand communities of share estimate X provides businesses market has a million always a to over are And UScellular significantly part been real forward. operating As our opportunities serve.

Finally, a substantially from XXXX, operational we made growth expect tower including portfolio. changes in continued our reducing We time. number cycle of

year. heading strong this into As we really momentum a have result that work, of sales

to it thoughts XXXX guidance. let a our on hand few Doug, share I Before me just

service expanded revenue. expect to see We retail

going and headwinds affects see roaming, that to revenue. to overall service continue We from are

of Additionally, and And bullish activities. it network our guidance growth aggressive a assumes ongoing making upgrades and acquisitions. We're that's the the necessary in over we're on continuation make happen. on investments term distribution long and to in promotional both

capital. substantive returns Our on remains long-term expansion goal and

overtime. We disposal improve will our to at every return be pulling lever

growth, details hopefully cover to as revenue efforts as of hand participation subscribers and of be couple me see I some of well You some funding to optimization. meaningful the let can mentioned in That on financials. Doug capital that, government's will expect the to earlier. With discipline it that by expense supported

morning. Good LT. Thanks,

increased our with XX. Postpaid higher customer switching by Slide review year-over-year, to gross X,XXX activity. handset combination additions due promotional results on in activity start strong largely with of Let's a

year-over-year, against was the hotspot this experienced course, the pandemic. year industry-wide to device gross prior XX,XXX Of driven to additions handsets. We backdrop on due when by connected saw increasing an of promotional sales demand lower aggressiveness compared decline we

shown continues year-over-year also XXXX. was slightly postpaid rate at the and churn at the to postpaid switching from the to continues by up fourth was the higher a handset industry-wide higher Slide pandemic X.XX% to in of quarter the run This Postpaid for voluntary in -- government periods increased connected to a aggressive due driven year devices, activity handsets ago certain activated XX. customers disconnecting were peak ago. year-over-year higher increased result quarter. Total run as X.XX% XXXX, churn, was churn, turn higher during let's and which the Involuntary combining year Next, churn than and connected that X.XX%, handset on churn churn competition. of and business a of devices primarily

Prepaid XX. X,XXX by by to XX,XXX our overall prior continued prepaid year-end. offerings We saw the base year. saw to a to driven and increase improve of to additions to Slide throughout increase an to enhancements gross the compared Moving prepaid compared year, year-over-year prepaid prior

Now let's Total volume higher X% turn million, lower discuss for XX. which a data to $XXX will were moment. Inbound billion, essentially increased primarily service decreasing in by quarter on average a fourth roaming Slide to due results year-over-year user, the and revenues year-over-year. operating financial Retail was due revenues XX% per revenue flat $X.XXX the rates. to I million, $XX revenue to

Other factors the year-over-year. of and service T-Mobile decrease merger the Sprint $XX traffic continuing to revenues were data the of Sprint of up migration contributing to and volume is roaming million, this T-Mobile's One X% network.

in sales part activity. revenues year-over-year, result decreased as equipment an promotional by in of Finally, a X% large increase

continue industry. of the remain increases fourth costs in promotional quarter on revenue equipment during sales of the portion aggressive competitive to reduces and loss resulting the XXXX engage activity A to We promotional equipment. with

XXXX pandemic, promotional impacts activity XXXX. was of in activity and mitigated loss to of In addition, relative lower switching equipment aggressive quarter specifically by fourth less on the the

$XX change compared equipment on This year. these by year-over-year. of operating combined As loss profitability the reduction prior as a a increased result the in offset equipment other of slightly million costs however was loss factors, impact to increased on in

aggressive retention We XXXX and our environment, impact. guidance XXXX for including persist corresponding promotional expect throughout financial reflects the the offers to

user revenue comments year-over-year. average revenue a basis, postpaid shown account few per X% Now an Slide costs. Average $XX.XX the product revenue revenue were per increases or a driven The On average increase for XX. in per -- about an increase and favorable up in quarter, more device These were was on offset year-over-year. promotional fourth plan also X% revenues. increases protection by primarily offering by mix and grew connection partially

can tower revenues we XX, steady Slide As see tower on seen Fourth rental revenues. have you by growth in quarter rental X%. increased

positive in tower from and We continue these strategic are seeing applications, we'll focus momentum assets. colocation growing on to revenues

want things comment operating Moving refer and simple, keep this to and adjusted I to operating as on amortization, income. to Slide losses. depreciation, income measure and To before accretion XX. adjusted gains I'll

in slide, shown $XXX X% As adjusted increase operating the of an was income million, year-over-year.

$X.XXX increase our with Selling, decreases were maintenance. Cost the along decreased year-over-year. Total sold average were essentially to in legal lower cash by largely X% commented I interest and data and units lower flat. from cell administrative resulting expenses the expense $XXX investments driven EBITDA, increase of Total usage system earnings higher equipment billion, expenses. Adjusted expense voice total an with by revenues of decrease dividend increased X% of lower million, year-over-year. smartphone of sales. equity by rates due earlier, roaming higher driven a site unit As operations combined general income million, and a sold in X% was an operating mix primarily $XXX incorporates X%, from method and which driven expenses X%, lower advertising decreased per sold and cost

expenses. our were per we revenues higher This Now financial the revenue revenues service by Slide a cash increase X% to an decrease offset service rental and increase decrease were cost were retail where of in a increase roaming an general, partially of sales. selling, primarily by $X.X to to average in an and administrative contributing results. XX, miscellaneous in year-over-year. revenues. equipment let's offset billion, $X.X were by sold, tower other increases to increase was was expenses an billion, the user due driven revenues. Total equipment operating turn revenues and These Also partially increase show in X%. Total due increase This in full-year higher a

loss income environment of EBITDA, million competitive primarily X%. of cost sold, is expenses both $XXX the on and throughout an that decreased XXXX. increased which equipment adjusted $XX to cash million, from highly operating declined to in increase Adjusted result and X% equipment, promotional we $XX the due experienced Excluding which million

year cover assumes XXXX. experienced XXXX. Next, throughout I guidance want the Again, persist we promotional in aggressive our to guidance XXXX the full our will that environment for

We reflects in to billion of elevated billion cash $XXX high million and service revenue, including roaming promotional of growth single-digit $XXX the XG in other in service costs, guidance areas to growth given expenses equipment decline $X.X adjusted $X.XXX approximately in in retail continue environment $X.X estimates million of revenues, ranges anticipated of This for continued margin operating to invest million loss income aggressive billion and in EBITDA. the on promotional to expect $XXX levels adjusted and low our continued growth revenue, business. modest as our we

capital is the of million estimate to $XXX the For expenditures million. range $XXX in

multi-year XG remains modernization Our on program track. network

also we XXX targeted in XXX. continue auctions will the and deploy and making mid-band begin investments acquired spectrum XXXX wave buildout in We to millimeter our

capital expenditures now Jim? the of turn call breakdown will a provided also Butman. by category. I major to have We Jim over

share Telecom's you, transformation become future. TDS pleased Doug. more the morning, provider optimistic to never that to underway. markets in well Good been I'm is broadband our our Thank about preferred everyone. I've

in a ago. initiatives years number on are today of position started due to executing a we We strong growth X

addresses, service in fact, connections time to of fiber competitors. and XX,XXX It's quickly total in exceeded we turned connect to XXX,XXX. to the for addresses XXX,XXX billion $X potential operating and marketable in XXXX nearly these surpassed revenues, build new first history. In front up customers bringing critical fiber broadband stay In fiber TDS we Telecom's networks we

attractive identified that further. the new active We markets have our to in of even expand pipeline most and markets an continue footprint flags will plant

our federal most workforce rural networks markets by on upgrading our and continued broadband grant to broadband copper and environment. in transform needs funding shortages. the our brought state and to continue ATM to labor We address moved and with programs. We've pandemic hybrid opportunities a work adapt We to challenges the by the

addition, equity objectives organization diversity, extra on emphasis an to we us throughout and In have promote strategies employer. our placed inclusion keep to attractive

our resource. powerful most are associates Our

have XX, pillars enabling strategic Slide robust to Moving X our transformation. we

First, growing through we expansions. are our scale market fiber

Second, penetrations, growing invest increased we connection, fiber are growth In are continued our our operations revenue automating the new revenue per pillar, customer and continuously our and to reduce through through streamlining third expansions. we and in legacy initiatives. costs

Our keeping the center customer of at fourth in investing customer everything improvements. continuously we pillar the is experience do

and foundation our top the to in our of Finally, is We resilient invest our sure attract workforce. entire dedicated talent. people business make we highly-engaged, and retain

to happening business. with set vendor the transformation XX, will me require I the our partners. and specific that more which let within goals our up build points us for flags Slide relationships to some more share data have team, plant Moving quickly, demonstrate bold scale

X.X service over the or approximately we strategy execute to fiber those million gig we X our with addresses faster next speeds. about years, XX% capable of and being of addresses As plan reach XX%

have copper, significantly and expansion broadband customers. state improve most our Pete programs, from we will bipartisan and support to mentioned our to to earlier, There seize broadband affordable to rural to reduce opportunities ungraded support we broadband is to products we continue intend providing federal high-quality, as broadband for trends rural for As tailwinds strong America. With increased several strategy. underlying services our

working. is strategy Our

business in networks broadband ramped investing I'll over we next increasing and we our years identify several X.X fiber are the our as Slide total detail. our For positioning faster up growth years, our more program for strategy, fiber describe with past We XX, we over the years. On addresses X aspirations the target X million, of opportunities. new next to in to service plan the that triple have

of heightened has given the and opportunity participation increased Our attractiveness of other older sense of level the by this urgency builders.

broader supply service we we with outpace addresses actively XXXX face economic, industry, our delivery to rest in industry, an to chain, to continue of labor contractor XXXX manage complexities challenges delays. the expect including the Xx. Along X.Xx permitting by Specifically, and affecting

we our increase deployment market, our schedules. to example, are For speed to accelerating

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expansion. Our experience and expansion to-date further fiber opportunities case results our more are is and supporting even the with we pleased for business penetration far assumptions so see

I Telecom. tremendous Before want to TDS call CFO of the turn over I Vicki, to acknowledge her efforts serving as

of at has previously who also be TDS Michelle forward as and look Strategic we the a TDS. now as will Enterprise. I served excel to Financial TDS Vicki has in leading transformation her be to and been to Michelle replacing driving will we I will want and Analysis Planning Brukwicki, am President Telecom of Vicki in TDS, she extend contributions confident replacing Telecom. Pete CFO CFO the turn new of TDS position. And As across instrumental as teams the Vicki. Vice it Vicki will Sereda announced over finance I at welcome her to warm successful earlier,

continued in morning, my me and new transformation. With several and I Telecom's Telecom's strategy have Telecom's and to on been continuing CFO for forward years, TDS our I'm XX quarter. TDS also Thank role years the success past that I'm very the over working some TDS to want for of with Michelle looking as look highlighting her accomplishments by Good I've you, proud I the TDS. begin operational served to last closely Jim, at said, forward let to everyone. welcome Michelle.

XX. grew video to and key We voice new connections. Despite Slide and the X% year-over-year part X% in addresses strategy penetration to important our as XX% total increased continues of residential losses, remain markets, increase and broadband due and to our growth to bundling X are connections Total a to in total operating decrease Moving service existing footprint. to now broadband broadband a customers of speeds video by our offset partially and it churn. helps reduce our our connection gig

and chart higher increases product revenue a right, increase value at residential in the per Looking X% average on drove the connection. mix price overall

Slide Moving to XX. on

the telecom markets. can to across connection quarter growth connections new broadband our Total residential networks X% and fiber in as You markets. see expand fortify grew with we into the all continued broadband

are in We helping growth on-track our drive our the A-CAM also in network incumbent construction to program markets. under

taking increase year-over-year. markets. a X% by CLEC all of on our fast has reliable to a customers X X% offset the In offer product. On strong gig product residential in broadband XX, across and connections, in superior service the lower areas also partially Driven product defend X-gig are generated important in revenue. The us decreased XX% new are increased service, our X% broadband broadband with new revenues Wholesale seeing X%. focus we along now X Commercial XX% increased X% increase allow customers. growth, markets where win to we by connection. decreased on quarter residential Slide revenues certain total Our gig in total revenue to revenues

the revenues the related experienced business. the costs for fiber the expansion direct we increased in such costs supporting and XXXX. Let support revenue. shared as due X% technicians for necessary year the our to reflected both the subscribers sales, to the fiber over X% for Total making provided yet new Future Slide well legacy the we new but growth real results increased the costs which planned the current increased the that several years. X% as due expenses to foundational $XX include for increase shown in quarter and investments not and guidance our due our estate the we markets, Capital increased million decreased as me in year from to to our year to Cash quarter X% deployment. On exceeded XX. our investment for and declines program increased support market and spending next for X% in full to expenditures X% the growth new on in quarter market. to financial into are is quarter factors guidance on market broadband future expansion spending as marketing, in for as for addition year sum XX, Slide expansions investment year in service combined X% XX% fiber the up EBITDA the quarter growth. Adjusted in

business. A $X.XX We This all key are top offsetting to revenue parts driven service reflects is in in many improvements addresses assumption we declines line by markets, goal fiber continued on residential revenues of of across our of marketable of billion billion. growth, deliver. forecasting $X.XX total how our guidance the legacy our telecom our can

Our plans address fiber include delivery service XXX,XXX addresses. approximately of

shortfalls compared to last factors financial our that XXXX reminder we Given just should fiber This to impact starting to is first and to our EBITDA guidance cadence million conservative the steadily discussed. $XXX construction is million Jim to that challenges. A similar slowly expansion experience approach heightened due adjusted potential seasonality increase in $XXX throughout delivery market will building $XXX million XXXX. the delivery EBITDA in primarily quarter between our service in quarterly delays year. Adjusted plans in of year, in in address service the be address expected

expansion to front-end expected loaded to of be business. market made costs compared of $XXX expect reductions Capital is to XXXX. I'd in $XXX you investment. With future. XX% into role that, and be Telecom's broadband expenditures in in forward been $XXX with million the preferred my updating strategy to in allocated new fiber We XXXX look serve to in my our more shift outpace to broadband it's derive than areas million in capital million and spending TDS provider. I to the growth in as XX% other the to going Nearly our say to CFO cost pleasure are increases between directly like

back I'll Now the Colleen. to turn call

we're for Operator, questions. now ready

sure that a time, we analyst has short each opportunity to Given little an morning. want on we're make this

as time ask limit we permits. will that please So we one circle for you follow-ups and questions your back to

the question. for first ready we're Okay,

take first Raymond Instructions] We'll [Operator James. Prentiss from our Ric question at

just for might what's capital, And the question, cable, kind but both there? going from that to that do and network deploying market, DSL, us schedule how that kind pacing. view on on kind the you UScellular think question is? what's copper from access environment what's it. the cell -- kind of taking of What out fixed return you is of talked the second government of addressable Are first with lot what is, timing about Help about opportunity side Just LT a been wireless stimulus we've help at you what's think the opportunity, understand competitive TDS the the the you side?

a which serve very to Ric, DoD with the we'll a from as size subsidies the infrastructure way we The size tower end which between, couple more without be able as and it businesses without homes lot we is, you. will on, of of be mid-band. Right over and as of opportunity it, firm government as C-band then once be optimal businesses and radius. as well and would at those don't call millimeter-wave of that of is homes the at that will within subsidies, infrastructure businesses year to with think XXXX X time I certainly initially The clears, serve bring to have end X-mile this that give the hundred has a a XXXX, well the in market those a now,

with enough think $XXX,XXX, subscribers. If we've if in a IIJA. couple make tower the I is -- busy. $XXX,XXX can opportunity tower it, I call their out because of back little that's What the can tell that on constituents. the that the we And tower governors to make put cost where bit because what then even a opportunity well before. The rural wireless high, but the can access then of or by definition been us with hundred about, mobile attractive million is a real viewing keep as think with better that I'll XG is, rural a They really got I and By America, way, also let's wireless of to to that it's tower a probably basis is the reason you you envelope. the to can is home, significantly cost is opportunities take thing then, a beautiful it $X their get the I America, I just of if in I've fixed make a broadband for subsidize fixed new subscribers, to it I XG area. make rolling able double-dip have a with, better and frankly tower they they're get tower wasn't experience. the my profitable serve to we've profitable if spoken

will colocation an customers. tower for attractive opportunity also that so And be my

We've states. there's so that of doing We're a dollar. And fixed without service live really steadily, gradually. wireless individual couple so streams X infrastructure the service in of off market in revenue got out but that rolling we're subsidies, infrastructure

see difference You kind that to to really meaningful thing dollars. there. steroids of advantage the can that's expansion can and think I But expect we make is will gradual infrastructure financials on our going put those some take in a of it

that's little summer. may Actually, to Department longer My than the think they In going I have terms they're said people expectation bit probably out FCC said of timing, going maps is fall. according have the Commerce, take to a has the think. in to of

money probably use have the year. we'll maps expectation efforts. for access this my a immediately to help And is, with later to planning of states good have to They chunk so them

we'll grants And the see that from my flowing states in to is expectation so meaningful start XXXX.

I XXXX really advantage of foundational So will of taking terms growth XXXX in building the year hitting the business. will be a levers. those think be dollars

it And is addressable who have who it the when who has copper broadband, market? you target doesn't is, see market broadband, who do as the is think somebody you somebody of

Yes.

also XXX working down. XXX of -- at So seeing we're XXX north up. marketing at We're we're

cable pretty non-upgraded Certainly, plant. So we think copper it's a DSL, terrific experience.

to little at per become still I think commensurate pretty where can there bit doesn't can Where somewhat provide think a play. and it customer good when play are I But you stuff. we think is good dollars get We're trickier. fiber. we experience. into gig upgraded a is The cable plant, it starts we that

been near good or where fiber don't don't economic so think either think necessarily it that's IIJA, the in I the calculation. And term, I let's that's call -- a with has good a be will

And there. option so I compelling see don't being a it

our dollars to wait market that dollars size go fiber see how that, exactly kind and how that's how is many is in states? those up and what those many of where to of Well we alternate those versus to flow go dollars how Now to have start of technologies.

JPMorgan. Phil to Cusick next at go We'll

CapEx about assume outline churn by continues? And those spectrum those we the ROI expansion hit sort your next in then this is with you guess and years through parts. year? this I out TDS for competition. more Ric, on is am clearly for markets. X one of but the how few as should you that decrease. expansion pressured I Do you Maybe the have on operating do the and EBITDA over Maybe good, losses going so on OpEx or UScellular and lay continues congratulations the LT, new And how The guidance this to follow in rules then only think And for of will being Unlike -- but those estimates revenues I you. TDS environment? question can you X more the us kind Vicki.

decline our expansion. in EBITDA to The Okay. market is due all

seeing. upfront and new and our meeting sales, attractive or returns margins we Xth out with each in come increasing these and are some of spending, investments fiber as of successes market significantly real earlier highly this the field territory to the in in work, engineering hiring of year on communities contribution expectations. XXXX, program from the marketing, already we're cases, are number earn technicians. our estate, are teams into we're exceeding, as our a We we transport, got of number and market, those our of in But such confident plans of already I've seeing the

due XXXX expansion EBITDA in you're for see to spending want all increase increasing that But in don't with expenses and our program, now that the the guidance. Jim, anything we So cash as the reason to see that add going of significantly to the upfront total are increase, was said, majority more we did more our XXXX. market. that. you as to is I lower you know if And

we're for just No, I if tell so X is a best here and we've feel past did faster, address years opportunity in the you job. delivery a what great would There the activity markets market. moving this we did this No. away. more at great So more mean over think quickly going you go that is we're the market lot see you is okay? window and the to projecting, to I what Vicki, we go got than more doubling it's and look and the we I service

this just is we the time think opportunity. So the to seize

So we're to the or metal. the pedal going the -- metal to put

I So, targets, a how to I'd about, hit of when those you levers. Phil, point I talked think couple to about

postpaid strong But the to think look QX. continue our postpaid we consumer, share particularly -- has you first at our year, last have been I actually quite and gross to business of when do in better. adds

in personalization the the it's second a launching the driven churn new And affected be a in. upgrade to promotions. by been is to we've quarter, story. be So by churn to dynamic going We're upgrades really investing approach going engine just

And you'll so upgrades. soon, would right, I see call, what mass

are keep so the us the interesting challenging. The same side game, upgrade to that outreach more We to aggressive opportunity market. the but for so approach with outreach, spend. engine pretty better are upgrade specifically to with mass postpaid simply promotions with can in do is much financials the to our do entire get has upgrade that use promotions more the And They on personalization to targeted do having at we will results believe as so digital them. the with much targeted customers more

investment government, areas, towers. growth the prepaid, Second lever, business continued in and

invested a the government in platforms. a continue on revenue business base. distribution. We've growth lot invested we we We've expense see significant have, and You prepaid in will can that manageable you if our already see relatively of momentum

expansion. capital for the a platforms think return mean, it's following business those is bottom into business And co-locator line, -- just tower to I is tower so attractive. revenue -- the profile to growth Every so dollar of it's piece those and not drive I we expense on And right can necessarily straight without having on have huge capabilities of really that still get us. commensurate we on now that distributions

tactical a capital and I that comments. to tried you believe return together make those upgrade clear promotions. all put wildcard objectives. and to The we have on is upgrade opening I the plan If big is what in reach quite that

to next Stanley. at Morgan Flannery Simon go We'll

and could Pete. Vicki wishes about talk future. we sheet. I if the to just structure Best for Congrats the capital on wonder the balance

the about talked you're investments making. You've

the about cost lower You've of debt. talked

Are thinking the profile over raised to we this dividend. there you How cycle? should are specific You achieve uses be aware about XG leverage funds your that of? of you're and and sources fiber goals and trying that

leverage stay the of is and capital in over couple spectrum good mid-BB. we're very we our we stay increased that our made, where that markets. the had purchases years our and the mid-Xs we've Well, to ratings in can currently last at found and the of debt-to-EBITDA we of -- current in maintain we debt-to-EBITDA We're access mid-Xx to of low anticipation think target to we terms sort

these we while a heavily, -- our levels we're levels but the program. we acceptable And going time. investing we're out mean maintaining over investing is going levels. can at this to it's needle sort I of to leverage of thread measured be So think be at spread

in of laid bunch and to what of assumptions that dollars. have whole We would IIJA, that capital. bunch don't I note in a in, We forward. lot a the just assumptions to we're Simon, talked kind the I fund have goals come on going add about that which the one will a -- could the that. potential we've I guess have current those don't help of return plan

are a simply the us and And Pete of cost have way the with that. The plan. changing of in job opportunities and about on actually are done our a our team I in debt help so to achieve funded talked we sheet. balance changing top tremendous IIJA

go Michael next we'll And with Rollins to Citi.

question. one with I'll stick also

mid-XXs. above trying am or level. slide UScellular. think that for calculating got to I incumbent is Just the in them either interesting of margin looking the is guidance get at outlook to XXXX right, at What's And the you've the national if in, I for XX% or

as revenue look where margins base? be might margins you opportunities so if see I improve the kind just of to what about business, maybe period on multiyear unpack temporary? different wireless And meaningfully do the the you current the a you And structurally can the curious versus am at over

address longer 'XX where Yes, we're let at me with guidance just term. the first

So headwind going that we was an in revenue XXXX, have into XXXX. XXXX, significantly down that inbound from roaming

next lose revenue to into continue margin year. that really We higher

a on service rate at ARPU revenues X% We and are increasing increases. of our retail that's

really went XXXX, It's bit throughout persist environment call, XXXX, in there. the the expectation. us change go our in sixth up provided does. On So to that promo through promotional And could it our highly We've great the cost doing going focused. is could optimization if help really of substantially We're really cost our that expenses, and are current made accomplishments. up going a running to a we in year That progress there, about promotional XXXX program. which through talked we well great environment XXXX.

wireless, And we're doing the low percent. B&G, investing only so single-digit so that, increasing expenses the all we're fixed, towers, and in modestly And forth. prepaid while areas we're talked about, by way, you

and margins postpaid of but the get slow call. as advantage said we've It's business where focus that's it's government, prepaid, this there to it's expanding from funding. to wireless, we've fixed, path our infrastructure seems competitors about talked taking a mean all -- towers. better. XXXX. I all, are, It's really is And first our the our that's growth business times get capital, throughout to return the and of multiple So on

it customer be, LT Our to churn. where addressed isn't growth needs

We that. have address to

acquisition. our improve to customer have also We

So it's really all those things.

to ]. with next We'll CSA Investors [ (sic) Sergey move GAMCO Dluzhevskiy

tower A One couple of business. the the questions. guess. A X-part on I question, of side

but average the number were about ex-U.S. tower of So up towns revenues only ] X%, still X.X%. average is [

are providing the color more and second XXXX? tower within company, also making disclosures running maybe metrics? And provide around additional horizon, the with like this objectives if a a separate pros And in could of success? you LT what business segment other And view and business what opinion are X-year cons a as profitability for are the your your considering UScellular in tower and it you you would what more on So specific and to infrastructure this maybe that limited, for both question I going my with them by but somewhat strategy and available, expanded related overlap and businesses funding footprints is at of to higher between by allow out that XG part would wireless partnership grow infrastructure potential bill know UScellular could and Telecom is both new build a wireline. funding your current the hedging USM Telecom the combined create forward? opportunities rate TDS of that TDS

we've towers at with business. we been and business doing co-locators be expect putting start wireless exposure, think of and let's or near-term rates, is thus our opportunity more those to it. to to reducing to I building profile, Increased continue. Longer So in improve not towers aggressive seen success that? our The towers. colocation that on faster simplistic, it's whether good areas, accomplish cycle but decreased far whether the being I more revenue these we times, and to coverage. big out marketing it's roaming high-rent How it's continued that the potential run are We've towers really our place going objective term, more improving towers how it's expansion moving -- frankly than expense support to rate and whether

that So we -- infrastructure we I attractive I in think I DISH's we towers putting it going final attractive if it that, to AT&T's, back and get get to build if talking towers can them If about the tower and of can means more towers. to the market we towers then growth plan then those make T-Mobile's place, put to towers an with places can opportunity Verizon's, economics in also XXX place XXX put a to we're the by where XXX more in we a think put the what world. And make those the make towers have IIJA, and those component goes we right? in or to was

where the our And so we're it. going of with scale business of improving just as effectiveness both total as that of is volumes well business the

an TDS, depends on programs but think with completely overlap there structured. opportunity, are of I the how terms it is In absolutely grant

with grant it that's that And is "Hey, from that a We is So as, structured our want and with in And with something I with we cover I you geography if a cover wireless TDS a we fixed Telecom there those is you to want else here tremendous program it's want have think you can't and you service. up will fiber, cover whatever I absolutely to work cover footprint something where opportunity. else." a to fiber. state opportunities

We work other will players. also with

would we a so, serving absolutely partnership approach And take to them.

approach amount bid of alternative where to technologies allocate to a say, Now going allocate dollars an could I'm state that, work independently would there's there another fixed something not as a much going "Look, to together. to like of certain fiber. to wireless." other is amount dollars opportunity For like and obviously I'm we

footprint well. to decide benefit huge would that And fill Telecom. fixed gaps we their of I So a they in having in by can I grants fiber like wireless a think they we as bidding, have terms a bid provider partner have argue, have those because for a similar TDS opportunity when in

we're So more absolutely together. I powerful think

call turn time. you. are there no to over Colleen, I'll the questions back And further this at

Again, out Okay. have additional your to you Thanks a everyone great today. to time weekend. for Relations Investor if questions. reach please Have free feel any

And your participation. conference. for you conclude thank that Again, today's does

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