Telephone and Data Systems, Inc. (TDS)
Q1 2010 Earnings Call Transcript
May 10, 2010 10:30 am ET
Jane McCahon – VP, Corporate Relations
Kenneth Meyers – EVP and CFO
Alan Ferber – EVP, Operations at U.S. Cellular
Steven Campbell – EVP, Finance, CFO and Treasurer of U.S. Cellular
Bill Megan – EVP, Finance and CFO of TDS Telecom
Ric Prentiss – Raymond James
Simon Flannery – Morgan Stanley
Phil Cusick – Macquarie Capital
Robert Dezego – SunTrust Robinson Humphrey
Michael Rollins – Citi
Previous Statements by TDS
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Good morning. My name is Mason and I will be your conference operator today. At this time, I would like to welcome everyone to the TDS and U.S. Cellular first quarter 2010 conference call. All lines have been placed on mute to prevent any background noise. After the speakers’ remarks, there will be a question-and-answer session. (Operator instructions) Thank you. I would now like to turn the call over to Ms. Jane McCahon. You may begin.
Thank you, Mason. Good morning and thank you all for joining us today. With me and offering prepared comments are Kenneth Meyers, Executive Vice President and CFO at TDS; Steven Campbell, Executive Vice President of Finance, CFO and Treasurer at U.S. Cellular; Alan Ferber, Executive VP, Operations at U.S. Cellular; and Bill Megan, Executive Vice President, Finance and CFO at TDS Telecom.
This call is being simultaneously webcast on the Investor Relations section of both the TDS and U.S. Cellular websites. We believe our website are an effective and efficient way to provide information to the investment community and will continue to look for additional ways to use them. Some information during this call and subsequent Q&A period 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 releases and the more extended versions that will be included in our SEC filings. Shortly after we released our earnings this morning and before this call, TDS and U.S. Cellular filed 8-Ks, including press releases we issued this morning. Both companies have also filed their Form 10-Qs with the SEC this morning.
In the past, we have posted reconciliations of any non-GAAP financial measures used in our conference call on the guidance and reconciliations page of our website. Given our introduction this quarter of adjusted OIBDA and free cash flow in our press releases, you will now find the required reconciliations contained within the releases and not that web page.
We will be visiting the following cities over the next quarter or so. In May, I plan on visiting investors in Baltimore, Philadelphia and Delaware. And in June, Ken Meyers and I will be in New York and Boston. If you’d like to meet with us in any of these cities, please let me know and we will try to accommodate you if at all possible.
Please keep in mind that TDS has an open door policy. So if you are in the Chicago area and would like to meet with members of management from U.S. Cellular, TDS Corporate, or TDS Telecom up in Madison, Wisconsin, the Investor Relations team will try to accommodate you calendars permitting.
With that, I’ll turn the call over to Ken Meyers.
Thank you, Jane, and good morning. I’ll make a few comments about the quarter, then turn the call over to the rest of the team who will cover the operating results. We will then take questions at the end of the prepared comments. Just a note. All comparisons unless otherwise noted are to results for the same quarter a year ago. Those amounts have been slightly revised for an immaterial error affecting revenue and current liabilities. We will be updating other quarters for 2009 shortly.
In the first quarter, TDS operating revenues totaled $1.2 billion, down 3% from last year. Both business units continued to face intense competition, which ultimately affected revenues. However, both businesses continued on their data strategies and saw healthy data revenue gains. We continued to see a lot of opportunity around data and data revenues. Additionally, both business units continued on their customer service strategies and executed well as evidenced by reduced churn in each business.
I’d like to take this opportunity to provide our thoughts on the SEC’s national broadband plan released on March 16th, establishing goals and making recommendations across a broad range of policy issues. While the plan is wide ranging, we believe it marks only the beginning of a long-term process of rule-making and in some cases, possible legislation.
Shortly after the release of the plan itself, the SEC published a document laying out a rough schedule of more than 60 rule-makings and other proceedings expected to come out over the next 12 months. Many of these will address policy issues of importance to U.S. Cellular and TDS Telecom. And our policy teams will be actively engaged, working on our own and in concert with our industry associations where appropriate.
We strongly support the SEC’s efforts to make more spectrum available for the industry and will be involved in proceedings to define and auction such spectrum in a timely manner. We also support the SEC’s initiative to address data roaming, special access rates, public safety broadband, and other objectives. We recognize the importance of evolving the Universal Service Program to support broadband services. But we have concerns about some of the specific ideas defined in the plan and the SEC’s recent notice proposed rule-making.