Telecom Giants Altice USA and TDS Report Mixed Q2 2024 Results Amid Industry Challenges

Earnings call: Altice USA reports mixed Q2 2024 results amid competitive pressure By Investing.com

Altice USA (ATUS) has reported a mixed set of results for the second quarter of 2024, with the company's Chairman and CEO, Dennis Mathew, highlighting progress in the company's transformation journey, despite facing competitive and macroeconomic challenges. The telecommunications firm announced revenues of $2.2 billion and adjusted EBITDA of $867 million for the quarter, marking year-over-year declines of 3.6% and 5.9%, respectively. The company's operational metrics showed an increase in fiber and mobile customers, however, broadband subscriber net losses amounted to 51,000, mainly due to seasonal university disconnects and broader market pressures. Altice USA's efforts to enhance its customer experience and operational efficiency through investments in fiber expansion, mobile services, and AI are central to its strategy for long-term growth. The company's proactive network maintenance and segmented go-to-market approach have led to operational improvements, such as fewer customer service calls and truck rolls. Despite the challenges, Altice USA is committed to financial discipline and a focus on profitability, as it navigates a highly competitive environment. Altice USA's latest financial results have provoked a mixed reaction from the market, reflecting both the operational challenges and strategic initiatives the company is undertaking. According to InvestingPro data, Altice USA has a market capitalization of approximately $1.15 billion, with a notable revenue of $9.11 billion over the last twelve months as of Q2 2024. Despite a slight revenue decline of 2.88% during this period, the company maintains a robust gross profit margin of 67.52%. InvestingPro Tips suggest that analysts are cautious about Altice USA's near-term earnings, with two analysts having revised their earnings downwards for the upcoming period. This could be a reflection of the competitive pressures and macroeconomic challenges mentioned by the company's CEO. Moreover, the company's valuation implies a strong free cash flow yield, which could be an indicator of potential value for investors considering the long-term profitability forecast. It's also worth noting that Altice USA does not pay a dividend to shareholders, which might influence investment decisions for those seeking regular income streams. However, for investors looking for growth potential, the company's focus on expanding its fiber and mobile services, as well as its investments in AI and data, are strategic moves that could lead to improved financial performance in the future. For those interested in a deeper analysis, there are additional InvestingPro Tips available at https://www.investing.com/pro/ATUS, which provide further insights into Altice USA's financial health and market position. Operator: Hello, and welcome to the Altice USA Q2 2024 Results Conference Call and Webcast. [Operator Instructions] A question-and-answer session will follow the formal presentation. [Operator Instructions] As a reminder, this conference is being recorded. It's now my pleasure to turn the call over to Sarah Freedman, Investor Relations. Please go ahead, Sarah. Sarah Freedman: Hello, and welcome to the Altice USA Q2 2024 earnings call. We are joined today by Altice USA's Chairman and CEO, Dennis Mathew, and CFO, Marc Sirota, who together will take you through the presentation and then be available for questions. As today's presentation may contain forward-looking statements, please carefully review the section titled forward-looking statements on Slide 2. Now, turning over to Dennis to begin. Dennis Mathew: Thank you, Sarah, and thanks everyone for joining today. As you've heard me say before, our mission at Optimum is to be the connectivity provider of choice in every community that we serve. To do that, we are putting the customer at the center of every decision, providing the best customer experience, best networks, best customer relationships and best products, all supported by the best team here at Optimum. Our focus on the customer underpins our strategy of returning the business to sustainable subscriber revenue, EBITDA and cash flow growth over time. Q2 was another quarter of progress in our transformation journey. We continued to deliver improved operational metrics, increased customer satisfaction, growth in our fiber, mobile and B2B businesses, elevated product quality and refreshed go-to-market strategies. And we are continuing to use artificial intelligence and data to enhance our capabilities and improve the customer experience. We are executing with financial discipline across every area of the business, and we are just getting started. We have an exciting, innovative and robust roadmap of future product and experience enhancements that we cannot wait to bring to our current and prospective customers this year and beyond. Before we get into the details, I do want to say thank you, thank you to our customers for choosing us as their provider for one of the most essential services in their lives, and thank you to our team mates across the country. It is your dedication to our customers that is driving the current and future success of our business. So now, let's turn to Slide 3 to get into some of the specifics. We delivered $2.2 billion in revenue and $867 million in adjusted EBITDA in Q2 2024. Revenue and adjusted EBITDA declines continued to improve compared to the prior year-over-year trends. This reflects our disciplined operational and financial execution, as we continue to face competitive and macro pressures, including higher interest rates, higher inflation and increased competition. We've invested in people, data and analytics and are starting to see returns in those investments. Looking back 12 months to 24 months ago, we had limited understanding of our customers. Through the formation of our centralized data and analytics teams and implementation of AI tools, we now have a robust understanding of our customers and their individual customer life-time value, and are proactively managing these relationships to benefit our customers and our business. The use of AI tools extends across the business, and we'll continue to scale them to transform our operations, drive inbound sales performance and improve processes at all touchpoints. On our subscriber trends, we saw impacts from both competitive and macro pressures, which were more pronounced in our west footprint, as the east had relatively stable trends. In addition, we saw gross addition pressure in our low-income customer segment, partially attributed to the sunset of ACP and aggressive pricing from ILECs, fiber overbuilders and FWA. Our hyper-local strategy, network quality and value combined with robust offerings across our base enables us to effectively compete over time. Overall, we remain well positioned with a healthy broadband customer base of 4.4 million customers and we continue to see growth in fiber subscribers and mobile lines, which are key drivers to strong and profitable long-term customer relationships. We also saw a positive B2B subscriber growth in Q2, momentum that we are excited to build on in the second half of the year. Overall, our focus on delivering better experiences for our customers is paying off. According to both internal and external customer satisfaction benchmarks, Optimum is on a significant climb, outpacing the NPS improvements of our peers over the last two years. Specifically, transactional NPS or customer satisfaction levels when interacting with Optimum, has grown 34 points over the last two years. Additionally, relationship NPS or overall customer sentiment toward the optimum brand has grown 18 points over the same period. This marks significant progress in stabilizing our business and establishing the optimum brand as one that customers can rely on and trust. Importantly, our focus on improving NPS scores helps us to enhance profitability while protecting ARPU and sustaining low churn. In Q2, we also saw brand awareness among prospective customers grow by 8 percentage points year-over-year in the east and by 13 percentage points in the west, supported by our customer experience improvements, brand platform launch and go-to-market strategies. We also continue to see third-party validation. Optimum fiber was once again recognized for having the fastest and most reliable Internet speeds in New York and New Jersey, according to Ookla Speedtest. And most recently, we were named the best Internet service provider in the Mid-Atlantic region, inclusive of our New York and New Jersey footprint by technology publication, PCMag. In addition, in 2024 we were named the Best Internet Provider by CNET in areas across our footprint. It is tremendous and validating to see the superiority of our product set and networks recognized across the industry. Let's dive into a few key programs that are driving these improved experiences and a positive impact on our brand reputation. Since November, we have upgraded over 700,000 qualified HFC customers to higher speeds. Almost half of these customers were previously on legacy lower-speed plans. This initiative enables us to phase out speed tiers, deliver improved service experiences and leaves considerable room for future upgrades. And we have seen improved churn with our speed rightsized population as well as higher satisfaction. Speed rightsizing demonstrates how we are passing the benefits of our network enhancements directly to our customers and it is just one component of our overall base management strategy aimed at creating more engaged, satisfied and stickier customer relationships. We are also increasing customer satisfaction through the broader availability of self-setups or self-installs, creating a better customer experience and reducing truck rolls. This quarter we saw 56% increase in eligible customers choosing self-setup and we will continue to improve this process. Across our base, we have seen 235,000 fewer truck rolls in the last 12 months as well as 1.7 million fewer service calls. As we deliver better customer experiences, total contact rates per customer have declined by almost 10% and repeat customer service visit rates have declined around 30% compared to the prior year. Our completion rates are approaching all-time highs and our repeat rates are approaching all-time lows. This is driven by our focus on quality, quality products, quality network and quality service. We are resolving product issues faster, driving first-time right on every interaction, expanding self-service tools such as My Optimum app and proactively communicating with our customers like never before. Now, last quarter, I talked about the launch of Optimum's where local is big-time brand platform, which emphasizes our ability to bring innovative, best-in-class technology and products to our customers, delivered with the approach and trust of a local business. This platform is backed by our hyper-local go-to-market strategy, which is a town-by-town approach to how we serve and support our customers. Optimum size, scale and local leadership teams put us in a unique position to operate at a hyper-local level, and we are already seeing the benefits of this tailored approach, with subscriber stabilization in nearly 100 markets where we focused our hyper-local segmentation efforts. In addition, residential customer wins per losses on competitive switching improved slightly compared to Q2 '23 levels. We are performing better amongst non-movers in the east footprint as well as in the west generally. Our hyper-local go-to-market strategy is just gaining momentum and we are confident that it will enable us to be more competitive in every market we serve. Next on Slide 4, I will review some of the exciting developments our teams are diligently working to deliver over the medium term. With our operational transformation well underway, we are excited about the upcoming evolution of the Optimum product and solutions portfolio, which focuses on driving innovation, flexibility and value for our customers. Let's start with value-added services, a new set of offerings that will bring our customers add-ons to help get them the most out of their experience with Optimum while expanding our opportunity to capture additional revenue per customer beyond our core products. We recently launched Total Care, which provides premium support for customer services and connected devices in the home at $15 per month for residential customers. Since the product's soft launch in Q2, we've seen several thousand customers take this add-on, and marketing hasn't even started. We also offer device protection for our fixed services and just recently launched device protection for mobile. As consumer needs evolve, we are also exploring partnerships with third-party OTT app providers to resell services as part of the Optimum product suite. This is an untapped area for us, enabling us to meet changing customer behaviors while creating greater financial flexibility in managing content rights. On broadband, both our fiber and HFC footprints continue to be recognized for speed and reliability, coming in ahead of our peers in several key categories. In areas where we have fiber, we are focused on growing penetration through both customer additions and a renewed focus on migrations, a process that is now faster, easier and more cost-effective. We anticipate accelerating fiber migrations in the second half of the year. Performance on our HFC network continues to improve as well, as we make the right investments to provide best-in-class speeds, reliability with a durable network lifespan. Today we have 1 gig or higher speeds available to 95% of our total footprint and we are actively testing our ability to deliver 2 gig speeds using mid and high-split technology, and are reclaiming capacity from our video system as we expand our Optimum stream product. Next, we'll continue our speed rightsizing program as part of our broader base management strategy, identifying and upgrading qualified customers on an ongoing basis. And we're continuously enhancing our in-home Wi-Fi experience with software and hardware improvements to expand coverage and optimize performance. Our roadmap includes wireless backup, smart Wi-Fi solutions and next-generation gateways. Overall, our broadband strategy remains focused on delivering the best, highest quality service to our customers at a great value. We are well positioned with our current and future product roadmap to continue to improve that experience. On mobile, we'll continue to extend mobile sales to more channels and we'll expand our mobile device selection. We added tablets and mobile device protection to our portfolio in Q2, and expect to introduce wearables next year. And we recently started selling mobile in B2B, which will support future growth. On B2B, we are beginning to see more traction, reporting positive SMB broadband net additions in the quarter, and we have plans to add more managed services such as SD-WAN, Network-as-a-Service, LTE backup and richer security features in the coming months. In addition, our Lightpath enterprise business continued to see healthy revenue growth in Q2, driven by an increase in net installs. Lightpath continues to expand its footprint through tuck-in acquisitions. In June, Lightpath announced that it had entered into an agreement to acquire United Fiber & Data. UFD owns and operates high-fiber count networks between New York City and Ashburn, Virginia. If completed, this acquisition is expected to expand the serviceable market in Manhattan by over 20% and should align well with the existing footprint. And last, the moment on video, turning to Slide 5, over the last few years, we have learned a lot about our customers' TV viewing habits and have been preparing as a Company to address these changes. We are evolving and expanding our product set to provide our customers with the choice, flexibility and the advanced connectivity experience they demand. First, we launched Optimum Stream, our Android-based streaming video platform. And we continue to enhance its functionality. We plan to introduce pause and rewind for live TV and a new user interface in the months to come. Optimum Stream is available to all our New York tri-state area customers and this year, we expect to bring our premier video service to nearly 1.5 million more homes across our west footprint. In July, we announced the launch of Entertainment TV, a new Internet TV package and the first of several new video bundles to be rolled out by Optimum with a variety of content options. This TV package is priced at $30 per month and features over 80 top-rated channels, available both live and on demand only through Optimum Stream. Entertainment TV customers also have access to Optimum's News 12 service, the preeminent hyper-local news source across the New York tri-state area. Entertainment TV is coming at a time when we continue to see the landscape of sports and TV content changing dramatically. Roughly one in five of our video customers do not engage with broadcast, cable news, sports or premium channels regularly, and we are now able to provide these customers with optionality. Additionally, programmers continue to mandate bundles and raise prices for all customers, regardless of whether they watch the content, while also moving premium content to direct-to-consumer platforms without giving equal access to linear partners who pay a majority of their costs. This results in high TV bills for consumers and fragmented and confusing viewing options. Consumers should have the choice to pay fair and reasonable prices for the content they want and how they want it, without being forced to pay for what they don't want. Therefore, we will approach every renewal discussion with the customer at the forefront and we will collaborate with partners who are committed to providing flexibility, choice and value for our customers. As we look ahead to the rest of this year and beyond, we have a lot of exciting innovations and opportunities to continue to evolve the Optimum business. We are confident that our strategy is positioning us well and will lead to long-term customer, revenue and cash flow growth. With that, I'll now hand it over to Marc to review our Q2 performance in more detail. Marc Sirota: Thank you, Dennis. Turning to Slide 7, total revenue was $2.2 billion in Q2 and declined 3.6% year-over-year, a notable improvement from the Q2 2023 trend, which was down 5.6%. Residential revenue declined 4.4% year-over-year, driven by a smaller customer base and continued losses of video subscribers. Despite this volume pressure, the 4.4% decline is a marked improvement from the Q2 2023 trend of down 5.7% year-over-year. Of note, within our residential revenue trends, residential mobile service revenue saw its third consecutive quarter of over 50% year-over-year growth. As we continue to ramp up on mobile, this should contribute to more of our residential revenue trends over time. As we assess sales opportunities across our footprint, we have observed fewer shoppers across sales channels, especially among our low-income segments. Although we have improved our channel conversion rates, the top-of-the-funnel opportunities are lower due to increased competition in recent quarters and a challenging macroeconomic backdrop. Despite these challenges, we see underlying strength and stable churn, stable ARPU and growing customer satisfaction. However, the current market dynamics are limiting our ability to grow subscribers and consequently topline growth in the near term. Over the long term, we are confident that our superior network, product suite and customer experience will outperform both fixed wireless and fiber overbuilders. We expect this competitive advantage will enable Optimum to achieve sustained growth over time. In business services, we grew revenue 1.3%, which was driven by growth in our Lightpath enterprise business, and we continue to grow customer relationships and sell in ancillary services to our base. News and advertising revenue declined 7.2% in the quarter, primarily tied to non-recurring prior year one-time items. We expect political revenue to become more of a tailwind in the second half of this year and anticipate double-digit full year growth. In Q2, despite pressures on our video base, we continue to maintain a relatively stable and healthy residential ARPU of $135.95. Recall when we began implementing new rate card pricing for cohorts across our base at the beginning of this year, we signaled that this would not impact residential ARPU, and this has proven to be the case. This trend is tied to continued selling of incremental services like mobile and fiber, as well as enhancements in our base management and discipline around rate erosion. Notably, all of our operational improvements we have made in the last few quarters are translating into higher customer satisfaction as Dennis mentioned. With already low churn rates, we've been able to keep churn near all-time lows and have maintained better rates per customer retention through tailored offers at the customer level using new advanced AI data and tools. In addition to sales and retention, we are now introducing our AI tools for use by our care agents, consolidating dozens of legacy capabilities into one user-friendly interface. This enhances efficiency and equips our team with the insights needed to swiftly resolve issues and suggest offers and actions tailored to each customer based on the specific reason for contacting us. Turning to Slide 8, total adjusted EBITDA declined 5.9% in Q2 year-over-year, a marked improvement from the trend of Q2 last year, which was down 8.5%. Adjusted EBITDA margins were 38.7% in Q2, which was just down under 1 percentage point from the prior year. Adjusted EBITDA decline was primarily a result of low single-digit revenue declines and elevated sales and marketing and transformation expenses in the quarter. Of note, we have continued to act with discipline, controlling what we can control, and we have maintained stable operating costs, slightly down from the first quarter of this year. As we continue on our journey of improving operations, bringing in the best-in-class talent and rolling out advanced tools, our overall costs have remained stable. We have achieved savings in some areas of the business through operational and process improvements. This efficiency allows us to reinvest in other areas such as data analytics and sales and marketing, which are expected to drive positive subscriber growth and topline results over time. Q2 free cash flow was negative $41 million, which includes $57 million of higher cash taxes compared to the prior-year quarter due to timing of first--half estimated taxes. We anticipate cash taxes will be significantly lower in the second half of the year and we expect full year cash taxes to be in the range of $250 million to $300 million and we continue to target positive free cash flow for the full year. Next on Slide 9, we'll review our subscriber trends. We added 40,000 fiber customers in the quarter, on pace with the prior year quarter, and grew fiber customer penetration to over 15%, representing growth of 1.1 percentage points in the quarter. Approximately 60% of our fiber net-adds were from migrations of existing customers. If you recall, we mentioned there would be a bit of a slowdown in the pace of migrations this quarter, as we continue to refine the operational process. And I am pleased we expect to accelerate migrations in the back half of the year. In Q2, mobile line net additions were 33,000, more than double the pace of mobile additions year-over-year,, and we increased penetration of our broadband base to 5.8%. We have a lot of runway to continue to grow the mobile attachment rate and penetration to create stickier customers. We anticipate accelerating mobile growth in the second half of the year through sales productivity and exciting new offerings. Total broadband subscriber net losses were 51,000 in the quarter, driven by seasonal university disconnects, continued competitive and macro pressures and the impact of ACP sunset. Specifically, the difference in Q2 broadband net add performance versus the prior year can mainly be attributed to pressure in our low income segment. Contributing to this is the sunset of ACP, which has temporarily impacted both gross adds and disconnects in this segment on a year-over-year basis. We continue to manage these customers with tailored offers to repackage them into best value products and services that fit their connectivity needs and price sensitivity, from low income offerings for qualified customers to adding mobile to save more on their bills plus added discounts. As Dennis mentioned earlier, we have seen green shoots throughout our hyper-local go-to-market efforts and these efforts are just starting to take form. Aside from our low-income segment, we see improved gross add activity year-over-year. Further, in July we see stabilizing broadband subscriber trends compared to the prior-year July. We continue to see pressure from the low-income segment, but we are pleased with the underlying stabilization of the business, which gives us confidence that we are well positioned to return to long-term growth. Overall, as we continue to enhance our base management strategies such as improved customer communication and speed rightsizing, we have the opportunity to deepen our customer relationships and maximize CLV by retaining long-tenured customers and selling additional products. We have a strong base of broadband customers, the majority of whom have been with us for five years or more, take multiple products and churn less compared to early-tenured customers. Turning to Slide 10, we will review our capital expenditures and network investments. Cash capital expenditures were $348 million, which was down 27% year-over-year in Q2. In capital intensity, our cash CapEx as a percentage of total revenue in the quarter was 15.5%, down about 5 percentage points versus Q2 last year. Recall in 2023, our capital spent was weighted more towards the first half of the year. Therefore, we are comparing to higher CapEx which included a greater investment in fiber passing construction. In Q2 2024, we added 62,000 additional fiber passings and we expect to end the year with around 3 million fiber passings. Additionally, we expanded our total passing footprint by 67,000 in the quarter and we expect to add over 175,000 total passings this year. As Dennis mentioned, our HFC plant continues to perform well and we are maximizing this network with quality enhancements in a capital-efficient manner. For example, we are increasing broadband capacity for over 2.5 million customers by allocating bandwidth more efficiently to improve both upload and download speeds. We continue to split nodes to create more capacity on our network and we are doing this at a lower cost. We have strengthened our efforts around proactive and preventative network maintenance, with enhanced processes and tools to identify in fixed network and equipment issues before a customer would ever notice. All of these enhancements regarding recognition, from improved customer experience to third-party published awards and improved Google (NASDAQ:GOOGL) review scores, validating that we are making the right investments to strengthen our networks. We remain focused on network enhancements with capital efficiency to prioritize the highest returns and benefits to our customers while remaining disciplined around capital intensity. Please note we expect capital intensity to increase slightly in the back half of this year as we migrate more customers to fiber and continue to invest in our network. As we have remained disciplined in the first half of this year, we now anticipate full year CapEx to come under $1.6 billion, which is slightly lower than the range of our initial guidance. And finally, on Slide 11, I would like to review our debt maturity profile. We are well positioned with a clear runway of maturities until 2027. At the end of Q2, our weighted average cost of debt is 6.5% and our weighted average life is 4.6 years. 85% of our total debt stack is fixed, inclusive of floating to fixed interest rate swaps. Our leverage ratio is 7.2 times the last two quarters annualized adjusted EBITDA. We will continue to be proactive in managing our debt maturities and evaluate how to best ensure that our capital structure supports our long-term operating goals. While we are well positioned in the near term, we are looking at all options to maintain a capital structure that supports our long-term strategic objectives. In conclusion, we have the right strategy in place with a focus on profitability, financial discipline and enhancing the customer experience, with a segmented go-to-market approach, all of which positions us on a path to sustainable long-term growth. With that, we will now take any questions. Operator: [Operator Instructions] Our first question today is coming from Frank Louthan from Raymond James. Your line is now live. Frank Louthan: Great, thank you. Can you give us an idea of the current run rate savings from the truck rolls and the call center inbounds? And then as a follow-up, where do you think you are as far as integrating AI in your business for efficiencies and so forth? What kind of -- give us tonight kind of what inning you're in or something like that. Thank you. Dennis Mathew: Hey, Frank, we're really excited about the improvements that we're seeing in our operations. As I mentioned, 1.7 million fewer calls, 235,000 fewer truck rolls and there's more opportunity. We're leaning into self-install. We're leaning into just more proactively communicating with our customers. 56% increase in self-install this past quarter. And we're sending messages proactively when folks are having outages or service interruptions, service visits, installs, and this is all driving savings, this is all driving fewer calls, fewer truck rolls, just less noise in the system and that's translating into improved customer experience. We are taking those savings and optimizing our OpEx structure, and I'll let Marc talk to that a bit in a second, but then we're investing as well, and we're being disciplined about that investment. We talked a bit about AI, and our first step in that direction was launching a tool in our retention queues to help our agents more effectively manage call volumes coming in based on the customer's lifetime value, the product set, and really provide them offers that were accustomed to their needs. And it also takes into consideration the competitive intensity in the market so that it's not a one-size-fits-all when we're taking those calls. And that is allowing us to have -- drive better save rates and drive ARPU -- drive improvements in ARPU erosion. And so, we're continuing on this journey. We're running pilots in our care centers. We're running pilots with our field teams, and we're seeing real opportunity to just help us elevate our customer experience, make it simpler for our employees to have easier tools, find the solutions faster, solve the issues faster, to ultimately deliver a more effective experience and drive even further efficiency as we go into the second half of the year and into '25. Marc? Marc Sirota: Yeah, Frank, I would just add, you see in our OpEx costs, we've been able to make these investments that Dennis has mentioned and keep our operational costs flat. We were down sequentially quarter-over-quarter, which we were pleased about. And so, while we drive out the truck rolls and the phone calls, we're able to reinvest in this type of technology. I would characterize it, Frank, as early innings with AI. We've -- as Dennis mentioned, we have it in front of all of our retention agents today. By the end of the third quarter, we'll have it in front of all of our care agents, and again, tailored actions at the individual customer level. So, really excited about where AI is going to take this company, and it's really helping us guide the operations. And you see it in the stable ARPU. Despite the video pressures that we see, we're able to maintain our video ARPU, so really pleased on our progress, but still early innings. Operator: Thank you. Next question today is coming from Kutgun Maral from Evercore ISI. Your line is now live. Kutgun Maral: Good morning, and thanks for taking the questions, one on the outlook for EBITDA and one on the strategic value of legacy Optimum. First, on EBITDA, I appreciate that you don't provide explicit guidance and that there are a number of moving pieces across what you can and cannot control. But can you talk to some of the moving pieces we should be mindful of for the back half and how we should think about the full year? And second, on the strategic value of the legacy Optimum footprint, there have been some headlines recently around fiber assets and various partnerships. I know the focus for the management team and the board has perhaps shifted over the years more towards improving underlying operations of the business as opposed to asset monetization. But given legacy Optimum is in the top DMA with meaningful progress on the fiber build, are you now at a point where maybe there's any interest or willingness to engage in monetizing it in some capacity? Thank you. Dennis Mathew: Thanks, Kutgun. I'll take the second question first and then I'll throw it over to Marc. But we are continuing to be laser-focused on transforming this organization, and we're really excited about the progress that we're making. And the legacy cable vision or the east footprint is one that we're laser-focused on. We've launched our new hyper-local go-to-market playbooks in the past quarter, and we are seeing incredible stabilization across our footprint in over a 100 of the markets that we've launched, which includes the east. And we're seeing improved performance, particularly in our fiber footprint and particularly where we overlap with Verizon (NYSE:VZ). We are seeing our ability to compete improve, and we're going to continue to lean into that. We're still in the early innings. I'm really proud of what the team has accomplished. We have won award after award by third-party independent organizations. As I mentioned, Ookla named us the fastest and most reliable in New York and in New Jersey in that DMA that you're discussing. PCMag named us the top ISP in the Mid-Atlantic, which includes New York and New Jersey. But there's more work to do, and we know that the competitive pressures continue to ramp up. But we have the products, we have the service, we have the tools to compete effectively in the east, and we want to continue to drive improvements and continue to accelerate our transformation. So, that's what we're focused on today. Marc, you want to talk about the EBITDA piece? Marc Sirota: Yeah. Kutgun, on a full year basis, we expect our year-over-year EBITDA declines to moderate versus the prior year. This is really driven by all the operational improvements that we've talked about, that we've made over the past year. This includes all the investments we made in our customers, such as the speed rightsizing activities, all the investments in our network. And you see that really transforming our truck rolls and our service calls, which we just talked about, and then just really pleased on the stabilization of ARPU. And we do see a path for growth there. And again, that's mainly tied to discipline and use of AI to drive each conversation with our customers. So, it's these investments that give us confidence that we will drive EBITDA improvements over this year and then in the long term. And that's really what we're focused on, is long-term sustainable EBITDA growth. And so, that's where we feel things are heading and feel good about it. Michael Rollins: Thanks, and good morning. I'm just curious if you could provide more specifics on how ACP impacted broadband performance in the second quarter and your expectations for how it may specifically impact the performance in the second half. And then, just taking a step back, can you share where you are today on the percent of the broadband base that now has that simplified rate card and the timing to get to the rest of the customers? Thanks. Dennis Mathew: Thanks, Michael. On ACP, as Marc mentioned just broadly, as we look at the low-income segment, we did see a bit of a slowdown in some headwinds as it relates to that segment in particular, both from a growth add and from a disconnect perspective. ACP specifically, we're really happy with our performance. We saw a very nominal increased churn from our baseline. And I think that's really attributable again to the incredible work the team did to prepare and to be able to offer our customers options. We've leveraged our tools and leveraged offers and packages to help rightsize people in terms of their needs, getting them into packages that rightsize their speeds, rightsize their package with optimum mobile and really making sure that they had the right products that they needed. So, incredible performance on the disconnect side, but we have seen that the subsidy and just generally a bit of a slowdown in terms of gross adds. And when I look at our general performance, that is where I see our headwinds that occurred in the second quarter. But we feel that we do have the right products and the right services to compete long term. We have incredible value. Our focus remains -- quality and value. And when we look at value and we look at Optimum complete, we now have Optimum stream that is launching across the footprint. Entertainment TV is an incredible value. As I mentioned, a new video package. We believe that long term we do have now the right products and the capabilities to be able to compete across every segment. In terms of our broadband retail pricing, I'll throw that over to Marc to just provide a little bit more color. Marc Sirota: Yeah, Michael, we're pleased with overall ARPU trajectory and our stabilization that we've talked about. From a rate card perspective, all of our fiber rate card is now fixed and reset. And then, we will over time -- and this will be a multi-year journey, we will set the HFC rate card. So, still fairly early days on that side of the house. Again, we did not see any material impact from the change here. And we'll continue to manage ARPU on an individual customer basis and feel that there's a path to real growth as we continue to accelerate selling in more products like fiber, like mobile and other ancillary services. Dennis Mathew: Yeah, I'll just continue to reiterate that our -- the philosophy or strategy around our pricing strategy has been providing transparency, predictability and just eliminating a bit of the confusion that existed with the old rate cards and promo roll strategy. And we're seeing real benefits from that. We're seeing that we're able to continue to implement that strategy and provide the clarity that our customers are looking for. Operator: Thank you. Your next question today is coming from Craig Moffett from Moffett Nathanson. Your line is now live. Craig Moffett: Hi, good morning. Let me ask about some of the green shoots that you've pointed to. Can you quantify for us a real change in the trajectory of, in particular, broadband, I guess broadband retention and net adds in any of these kind of green shoot cohorts, whether it's the customers who've had the pricing rightsize that you just talked about, the customers who are in your fiber markets, the customers who are in your mobile converged bundles or even just in your hyper-local segmented market, so that we can kind of do something a little more tangible so that we can see once this is done and then as it rolls out that we can have more confidence in the trajectory of broadband in particular. Dennis Mathew: Yeah, Craig, what I'll say is that we're really excited about the stabilization of churn. You know, we were really, prior to me joining and launching these playbooks, we were really struggling as fiber overbuilders came into our footprint, the impact that those folks were having was fairly outsized in terms of taking share and these local playbooks have stabilized that. And when I look at our performance in Q2, we saw a meaningful stabilization and improvement in churn. And really, the headwinds, when we look at the performance, was on the gross add side and really tied to the low income segment. And so, when I look at the speed rightsizing, and I'll let Marc add a bit of color, across these tactics, we are seeing improvements in churn. 50% of those folks are just being moved off of legacy speeds and we're seeing their satisfaction improve, we're seeing call volumes decrease, and we're seeing a level of loyalty and stickiness tied to that improvement. Similarly, for those customers that are taking mobile, their churn profile is also better. And then as we go market by market and we're able to compete and we're able to drive our base management strategies, we're seeing that we are able to stabilize and even see record level of improvement in churn. And so, now, our job is to continue to drive that go-to-market in a more meaningful way across every town, across every market, both in terms of base stabilization as well as driving our acquisition and go-to-market. And we're seeing some improvements there as well. When we look at our win share and our ability to drive win share and bend the curve town by town, we are seeing our ability to do that, particularly as I look at some of these towns where we're competing against these fiber overbuilders. Marc, anything you'd like to add? Marc Sirota: Yeah, just around speed rightsizing in fiber in particular, we're seeing that these tactics are working. We see combined double-digit churn improvements coming out of customers that take their fiber product or speed rightsized. So, we feel that these types of tactics in addition to our individual customer treatments that we're doing are stabilizing the base. And again, as Dennis mentioned, we do see acceleration in our non-low-income segments around gross ad performance. And so, that gives us optimism around where the business is -- from a core base is heading. Coupled with the investments we've made on customer experience and driving churn to all-time lows, we feel like there's a real path to sustainable growth over time. Dennis Mathew: Yeah. And the other piece that we're leaning into, as I mentioned, was the value-added services, where we have an opportunity, a real opportunity, to further drive services into the base. We launched our new total care solution and within a few weeks, without any marketing, we've already added several thousand customers. And so, just having a much more proactive, strategic base management strategy, as we launch these new services and sell that into the base, we believe that, that will further accelerate our transformation. Operator: Thank you. The next question is coming from Sebastiano Petti from JPMorgan (NYSE:JPM). Your line is now live. Sebastiano Petti: Hi, thank you. If I could just maybe ask a quick follow-up to Mike's question earlier, just, thinking about the second quarter, you talked about the majority of the decline, right, that could be attributed to the low-income segment. But help us perhaps think about, in light of that, you talked about June there was some stabilization there. As we think about the ACP impact, thinking about what your peers have messaged in terms of non-pay disconnect as well pressure coming through, would the expectation be, considering June was, quote-unquote, stable on a year-on-year basis, do you expect to see additional non-paid disconnects? Should we be thinking about the third quarter of 2024 looking something like 2023 in terms of losses whereas perhaps maybe non-pay disconnect pressure from an ACP could be offset by some of the base management and other strategies you just kind of articulated? I'm just trying to get a better sense on how we should think about the impact flowing through because messaging from peers and competitors has been, there's probably still more to come in the back half of the year in terms of ACP headwinds. Dennis Mathew: Yeah. Sebastiano, the comment on stabilization was in July. We are seeing stabilization in July, and we anticipate further stabilization in the second half of the year. We've launched our new local --- hyper-local playbooks in the second quarter, and we do believe that they're going to continue to provide us meaningful acceleration as we look at implementing them town by town, offers at the town level and having marketing tactics at the town level and being able to compete more effectively head-on with these fiber overbuilders and fixed wireless. We're still in the early innings and we're seeing some benefit. We started to see some of those benefits, particularly in stabilizing churn, and now it's helping us compete more effectively from an acquisition perspective. But I'll throw it over to Marc to add any color he'd like on ACP and the low-income segment. Marc Sirota: Yeah. In addition to some of the conversations we've already had this morning, we are launching AI tools within our non-pay segment as well. It's too early to tell exactly what's going to happen with the ACP population, but we feel confident that we have the right offers and the right strategy to manage these customers through that conversation. Again, too early to say, but we feel like we have the playbook in place to manage through it. Dennis Mathew: Yeah -- go ahead. Sebastiano Petti: I was going to ask a quick follow-up on a different topic, but go ahead. Dennis Mathew: Yeah, please go ahead. Sebastiano Petti: Okay, sorry about that. So, just thinking about the migration rate on the fiber side, can you perhaps, you know, help us think about -- or give us the migration rate this quarter and how we should perhaps think about how that could change as you perhaps, you know, accelerate migrations in the back half of the year? Thank you. Dennis Mathew: Yeah, in our fiber performance, we had 60% migrations. We had an all-time high in Q1 and that really helped us understand some of the challenges that we were dealing with in terms of operational and technical issues tied to the migrations. As I had mentioned in earlier calls, we have purposely took a little bit of a slowdown so that we could solve those technical issues. And I'm pleased to report those technical issues have been solved. And so, our goal is to integrate this now into all of our channels to drive a much more meaningful pace of migration in the second half of the year. Now that we have a much more seamless process to migrate customers, we're integrating strategies and tactics into our care channels, into our retail centers, into our retention channels. Every time we have an opportunity to interact with these -- with our customers, we will now be able to confidently present them with a migration option and get them into the best products. And we also feel very comfortable now that we have the right video solutions to pair along with our broadband fiber product. As I mentioned, we've launched Stream across the entire tri-state. That was also a critical element of being able to accelerate. As you know, in the east footprint, we do have customers that take both broadband and video and have broadband and video. And so, we needed to make sure we had a full solution set that we could confidently present our existing customers. And we do have that now. And so, our pace will accelerate -- the goal is to accelerate our pace meaningfully in the second half. Operator: Thank you. Our next question today is coming from MaryAnne Zhao from Morgan Stanley (NYSE:MS). Your line is now live. MaryAnne, perhaps your phone is on mute. MaryAnne, please return to the queue. Our next question is coming from Jessica Reif Ehrlich from Bank of America (NYSE:BAC). Your line is now live. Jessica Reif Ehrlich: Thank you. I guess two questions, one on advertising. Second quarter was disappointing, down 7%. But you sound super optimistic about second half. Can you give us some color on, expectations, if you can parse out political, which clearly should be strong versus what you're seeing in the underlying advertising market? And then secondly, it didn't really come up on the call, but you are overbuilding a couple of markets. Can you give us an update on what you're seeing, both in your efforts to overbuild and then others who are also coming into your markets, what you're seeing? Dennis Mathew: Hey, Jessica, I'll cover the overbuilding and then I'll throw it over to Marc to talk about the advertising trends. We are building out in New Jersey, in Montclair and West Orange, and we're on track to launch later in Q3. We have -- when we look at that opportunity in particular, we look at the overall return on investment and we look at the cost, and given our footprint, it was an opportunity for us to continue to build out our plant and offer incredible -- our incredible fiber network and fiber product to these customers and in these towns in a cost-effective way, which we're excited about. We'll be launching broadband and mobile and the full product portfolio. We have teams and go-to-market strategies ready and the teams are actively working to prepare us for launch later in the quarter. We're continuing to see overbuild activities and build activities throughout the footprint, and we know that the competitive intensity is only going to continue to increase and that's why we have to control what we can control. We are looking at how we want to deploy capital in the most cost -- in the most effective way to provide the most meaningful return on investment. When we look at our opportunity, we're continuing to focus on newbuild, particularly within our footprint, we're on pace to deliver 175,000 passings. A lot of that is going to come in the west. When we look at -- we're privileged to be in some of the fastest-growing towns in the West. And so, we're laser-focused on driving our newbuild strategy and making sure that we're doing that effectively and monetizing it more effectively as well. We've stood up a team to really ensure that, that end-to-end process is working seamlessly. Marc, you want to talk about advertising? Marc Sirota: Yeah, Jessica, for the quarter, certainly, as we talked about, we were hampered by one-time items from the prior year that really do not recur. Excluding those one-time items, we're actually growing just over 2% in the segment. And we do feel bullish. We see our national sales teams really operating at a high level. We have seen some pressure in our local sales teams and I think that's really tied to the interest rate environment that we still find ourselves in. But from a political perspective, based on what we see coming in and the orders that have been placed today, we feel bullish about the strength of political this season, and gives us confidence on a full year basis that the news and advertising group will be growing over double-digit this full year. Jessica Reif Ehrlich: Thank you. Operator: Thank you. Our final question today is coming from MaryAnne Zhao from Morgan Stanley. Your line is now live. MaryAnne, would you mind speaking louder? I can't hear you. I will raise your volume here. Please proceed. MaryAnne Zhao: Okay. Sorry about the technical difficulties and thanks for taking the question. Just on the competitive landscape, can you please update us perhaps on what you're seeing on the pace of incremental fiber builds in both your eastern and western footprints? And then on fixed wireless, any difference in the competitive impact between your two footprints? Thank you. Dennis Mathew: Thanks, MaryAnne. We continue to see in the east a little under 70% overbuilt by our fiber competitors, Verizon being the bulk of that and Frontier being a small portion of that as well. When we look at the west, we have seen an uptick over the last six months. We're now revising our approach, leveraging the BDC data, which has been very helpful. And so, we do see about a 40% overbuilt by fiber -- by fiber overbuilders, AT&T and others. We think about a third of that is AT&T and two-thirds of that are other fiber overbuilders. That grew about -- by about 5 percentage points in the last six months. And so, we know that, that is going to continue to grow, continue to increase. And so,, we need to have the best quality, the best value, the best products, so that we can compete most effectively town by town. Fixed wireless, we continue to see across the footprint, availability varies again based on their network availability and capacity. We see Teemo primarily in the east, as we think about the primary fiber competitor there. We are starting to see pockets of AT&T. We're not seeing as much Verizon, given their presence with fiber. And then in the west, depending on the town, depending on where we are in the country, we see pockets of Teemo, AT&T and Verizon. Operator: Thank you. We've reached end of our question-and-answer session. I'd like to turn the floor back over to management for any further or closing comments. Sarah Freedman: Thank you all for joining. Please reach out to Investor Relations if you have any follow-up questions. Dennis Mathew: Thank you. Operator: Thank you. That does conclude today's teleconference webcast. You may disconnect your line at this time and have a wonderful day. We thank you for your participation today.

Earnings call: TDS and UScellular signal robust Q2 2024 results, sale plans By Investing.com

TDS (Telephone and Data Systems, Inc.) and its subsidiary UScellular reported substantial financial improvements in the second quarter of 2024, marked by double-digit growth in adjusted EBITDA and a notable increase in free cash flow. In a strategic move, both companies have announced a pending transaction with T-Mobile for the sale of their wireless operations, subject to regulatory approval. UScellular is set to retain a significant portion of its spectrum assets, its towers, and equity partnership investments. Moreover, a deal is in place for the divestment of OneNeck IT Solutions. Amid aggressive competition, UScellular has made strides in subscriber growth and postpaid ARPU. The company's mid-band 5G deployment is progressing as planned, aiming for substantial coverage by year-end. TDS and UScellular are also advancing their broadband services, with TDS Telecom set to introduce TDS Mobile and expand its fiber reach. In summary, TDS and UScellular are navigating a transformative period with strategic sales and investments aimed at bolstering their market position. The companies are poised to capitalize on their operational strengths while exploring new opportunities in broadband and mobile services. TDS (Telephone and Data Systems, Inc.) has demonstrated resilience and strategic foresight in its operations, as evidenced by its financial performance and ambitious undertakings. Delving into the InvestingPro real-time data provides a deeper understanding of the company's current market position and future outlook. InvestingPro Data indicates that TDS has a market capitalization of $2.28 billion, reflecting its substantial presence in the telecommunications industry. Despite a challenging environment, TDS has maintained a gross profit margin of 56.21% over the last twelve months as of Q2 2024, showcasing its ability to control costs and sustain profitability in its operations. The company's commitment to shareholder returns is highlighted by an impressive track record of dividend consistency. An InvestingPro Tip reveals that TDS has raised its dividend for 31 consecutive years and has maintained dividend payments for an impressive 51 consecutive years. This consistency underscores TDS's stable financial management and its prioritization of shareholder value. InvestingPro Tips also point out that TDS is trading at a high EBIT valuation multiple, which could suggest that the market has high expectations for the company's future earnings potential. This is particularly relevant as TDS continues to expand its broadband services and explores new opportunities in mobile services. Investors looking for additional insights will find a wealth of information on InvestingPro, which lists numerous other tips for TDS. Currently, there are 6 additional InvestingPro Tips available, offering a comprehensive analysis of the company's financial health and market prospects. As TDS navigates its transformative period with strategic sales and investments, these InvestingPro Insights can serve as valuable tools for investors seeking to understand the company's position and potential in the dynamic telecommunications landscape. Operator: Ladies and gentlemen, thank you for standing by. My name is John, and I'll be your conference operator for today. At this time, I would like to welcome everyone to the TDS and UScellular Second Quarter 2024 Operating Results 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, Colleen Thompson, Vice President, Corporate Relations. Please go ahead. Colleen Thompson: Good morning, and thank you for joining us. 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 UScellular websites. With me today and offering prepared comments are from TDS, Vicki L. Villacrez, Executive Vice President and Chief Financial Officer. From UScellular, LT Therivel, President and Chief Executive Officer; Doug Chambers, Executive Vice President, Chief Financial Officer and Treasurer, and from TDS Telecom, Michelle Brukwicki, Senior Vice President of Finance and Chief Financial Officer. This call is being simultaneously webcast on the TDS and UScellular 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 UScellular's wireless partnerships. TDS and UScellular filed their SEC Forms 8-K, including the press releases and our 10-Qs earlier this morning. As shown on Slide 2, 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. And with that, I will now turn the call over to Vicki Villacrez. Vicki? Vicki L. Villacrez: Okay. Thank you, Colleen, and good morning, everyone. This quarter reflects the culmination of a number of initiatives that will position the company for the future. Over the past year, there has been an incredible amount of work performed by our teams across the entire enterprise. Most notably, in late May, we announced a transaction arising from our strategic review of alternatives for UScellular. We are excited about the transaction which is pending regulatory approval as it would unlock value for our shareholders and provides clear benefits to our customers. UScellular is retaining its nearly 4,400 owned towers, its equity partnership investments and approximately 70% of spectrum assets, which the company is currently working on monetizing. Also in the quarter, we announced that we entered into a definitive agreement to sell our OneNeck IT Solutions operations. We expect the transaction to close later this quarter and we intend to use the proceeds to support our planned spend in TDS Telecom's current fiber program. Turning to financial results. I'm very pleased that both business units delivered double-digit year-over-year improvements in adjusted EBITDA, while making important investments in our networks in order to keep up with our customers' needs for increasing usage and speeds. Improved profitability drove increased TDS free cash flow, up year-over-year and sequentially. We will continue to take a measured approach prioritizing and funding the investments in our businesses, while maintaining a focus on cost efficiencies across the enterprise. Our management of the balance sheet has resulted in an improvement in leverage ratios, which are down year-over-year and sequentially. We ended the quarter in a good cash and liquidity position. UScellular continues to generate free cash flow through adjusted EBITDA growth and prudent management of capital. They also paid down approximately $140 million in debt in the quarter. TDS Telecom is maintaining its focus on free cash flow by sizing and pacing the timing of capital expenditures commensurate with EBITDA generation. And at TDS parent, we have an undrawn revolver and term loan capacity coupled with pending divestitures that puts us in place to continue supporting our fiber program as we move into the back half of the year and into 2025. I will also like to thank all of the associates for their hard work in these dynamic times. And now, I will turn it over to LT, for further comments. LT Therivel: Thanks, Vicki. Good morning, everyone. If you turn to Slide 5, you can see our quarterly highlights. The May announcement of our pending transaction with T-Mobile for the sale of our wireless operations is obviously a significant change to our long-term strategic direction. And, as we discussed during our call in late May provides substantial benefits to all stakeholders. We filed an information statement on July 26, which contains details of both the transaction and the strategic alternatives review process and also unaudited historical and pro forma financial information. We've launched the regulatory approval process and we remain optimistic that this process will have a favorable outcome. We remain convinced that the transaction with T-Mobile is the best long-term option for our customers as they will have the long-term benefits of greater scale and a more competitive network. That said, in the near-term, we remain highly focused on operating our business and delivering strong operational and financial results. And, our performance this quarter is evidence that we are on-track for doing just that. We also announced that we'll be seeking to monetize the remaining 70% of our spectrum that T-Mobile will not be purchasing and this is an additional opportunity to unlock significant value. That process is active and ongoing and given the nature of that process, we don't expect to have updates until it is concluded. In conjunction with entering into the transaction with T-Mobile, we're now reporting our results of operations in two segments, Wireless and Towers. And, this new segment reporting provides perspective on the Wireless operations that we expect to convey to T-Mobile upon close of the transaction pending regulatory approval and the Tower operations. And, this will add an anchor tenant for at least 15 years under the new MLA. We provided historical segment results in a Form 8-K that we filed on July 16. We've included segment results for the second quarter of 2024 in our Investor Presentation and in our Form 10-Q that we filed this morning. Doug, will also talk a little bit more about towers during his section. Let me talk a little bit about the quarterly results. Total net adds including postpaid and prepaid improved 15,000 year-over-year, $36,000 net loss in 2023 to a $21,000 net loss in 2024. And sequentially, total net adds improved by 36,000. Since the beginning of the year, we've made a number of promotional changes designed to improve our subscriber trajectory while remaining financially prudent. And I believe these changes have been a significant driver of our sequential improvement in subscriber results in the second quarter. And, while we'll keep working to further improve postpaid handset results, we're encouraged by the sequential improvement compared to the prior two quarters. We also continue to deliver solid year-over-year postpaid ARPU growth of 2%. In addition, fixed wireless continues on a strong growth trajectory as our subscribers grew to 134,000 and that's a 40% increase from the prior year. The competitive environment remains intense. Carrier promotions remain very aggressive and cable wireless remains a formidable competitor. Cable benefits from their ability to bundle broadband and mobility. And, you'll hear Michelle talk about TDS Telecom's progress in this area during her section. Cable wireless also has an economic advantage, because they can offload a significantly greater amount of their traffic to Wi-Fi. And, we're seeing cable offering customers buy one line and get one line free and also free mobile lines as a retention offer for subscribers rolling off the ACP program. And, this is all in the broader context of the total pool of available subscribers declining 9% in the quarter. And, given those challenges, although we do remain net add negative, I'm pleased with our sequential improvement in subscriber results as well as our ARPU expansion. Customer retention remains a key focus for us in both postpaid and handset and prepaid churn improved year-over-year. Postpaid handset churn improved four basis points as we've been rewarding our existing customers with US Days, US Days repulsed periods where existing customers are eligible for attractive upgrade promotions. In addition, prepaid churn improved by almost 60 basis points. We improved distribution and we continue to deliver a great product, compelling pricing and enhanced digital engagement for our prepaid customers. And, the result of these efforts drove positive net adds in our prepaid business in the second quarter. While our exposure to ACP was relatively minimal about 19,000 customers, we've worked with those customers to provide them with special offers to ensure they are able to stay connected. Our multi-year cost efficiency program continues to drive positive expense momentum and has enabled us to successfully deliver improved adjusted OIBDA, up 14% in the quarter. And during the quarter, expenses were down in all major categories, which is impressive considering network costs are increasing with the 5G rollout. Although this is mitigated with the decommissioning of the CDMA network, the team is doing an outstanding job of managing expenses. And speaking of our 5G rollout, our mid-band deployment remains on-track. By the end of 2024, we expect to have mid-band on cell sites that handle almost 50% of our data traffic. And, this is in addition to having 80% of our data traffic already being handled by sites that have been upgraded to low-band 5G. And, this mid-band is a powerful enhancement to our network, which will allow us to further deliver the speeds and the capacity that our customers need for both mobility and fixed wireless. Overall, I'm really pleased with subscriber momentum we've seen in the second quarter and we continue to deliver strong financial results. 2024 has been a year of unprecedented change for the organization. And, I want to recognize with all of these changes, the team has remained focused on our customers and keeping them connected to what matters most. I continue to be extremely proud of our team and their commitment to our mission. And, I'll now turn the call over to, Doug. Doug Chambers: Thanks, LT. Good morning. Let's review the financial results starting on Slide 9. Although service revenue declined 2% as a result of a decrease in the average subscriber base, partially offset by higher postpaid ARPU. As LT mentioned, adjusted OIBDA increased 14% as we continue to reduce cash expenses. System operations expense decreased 5% as cost optimization actions, including the shutdown of our CDMA network in the first quarter of 2024, more than offset increases that resulted from our ongoing mid-band 5G deployment. Further, selling, general and administrative expenses decreased 5%. And, excluding the impact of $13 million of strategic alternatives expenses included in this expense category in the second quarter of 2024 decreased 9% due to decreases in sales related expenses, bad debts expense as well as decreases across various other general and administrative categories due to cost optimization initiatives. Slides 10 and Slide 11 present the separate results for the Wireless and Towers segments. Intra-company revenues in the Towers segment represent rentals assessed to the UScellular Wireless segment. These rentals are assessed on a month-to-month basis and accordingly, there is no straight line accounting impact related to these rentals. These rentals are also reflected in system operations expense of the wireless segment. The Intra-company rental rate reflects an estimated market rate based on the volume of tower rentals. Towers revenue from third-parties increased 1% in the second quarter as new co-location growth has slowed relative to recent years and was also impacted by defections, including Sprint related defections. As we have discussed on prior calls, the Wireless industry has moderated capital expenditures beginning in 2023, and we experienced a corresponding slowdown in new tenant and amendment activity, which is impacting Tower revenue growth rates in 2024. Again, we remain bullish on the long-term outlook for our Towers business. Although near-term activity has slowed, the long-term capacity needs of the industry will require further densification that can drive demand for towers. The tenancy rate of our portfolio of towers is still below the industry average and the towers are uniquely positioned geographically. So, we believe we have a lot of opportunity to grow. Further, the pending transaction with T-Mobile, which is subject to regulatory approval and their commitment to lease 2015 incremental towers for an initial term of 15 years, is expected to create a long-term foundation for third-party tower revenues. I would like to make a few comments on the future outlook of our Towers business. As LT mentioned, we filed a Form 8-K on July 16 that contains an exhibit with historical financial information on our Tower segment as well as an exhibit with an Investor Presentation to provide perspective on how our current Tower segment operating results are expected to change after the close of the pending transaction to cellular wireless operations to T-Mobile, which is subject to regulatory approval. Post transaction close, significant changes to our Towers' operations include the loss of Intra-company Tower revenue from UScellular and the addition of incremental tower revenue from T-Mobile resulting from the Master License Agreement that is part of the transaction. As a result, we expect longer-term adjusted OIBDA margins for the Tower segment that is three years to five years post transaction close to be in excess of 50%. The expected margin excludes non-recurring expenses such as de-commissioning costs. The post transaction close financial projections include critical estimates and assumptions that can be found in the July 16, Investor Presentation. Changes in these estimates and assumptions, including future events, could impact these financial projections. Further, we have not determined the long-term strategy for our Tower operations post transaction close. So, these financial projections are subject to change as that strategy and related operating decisions are further developed. Briefly on free cash flow. As Vicki mentioned, UScellular delivered strong free cash flow in the first six months of 2024 of $226 million through adjusted OIBDA growth and prudent management of both capital expenditures and working capital. Our 2024 financial guidance on Slide 12 remains unchanged from the guidance we issued in February of this year as we remain on-track to deliver on our financial plan. As a reminder, as mentioned last quarter, we expect capital expenditures for the full-year 2024 to trend toward the lower-end of our guidance range and be less than 2023 capital expenditures. I will now turn the call over to, Michelle Brukwicki. Michelle? Michelle Brukwicki: Thank you, Doug, and good morning, everyone. Let's turn to Slide 14. I am happy to report that our broadband strategy delivered nice top and bottom line growth again this quarter. Some highlights include a 4% increase in operating revenues, a 5% increase in residential broadband connections, a 5% increase in residential ARPU and due to our disciplined expense management, a 32% increase in adjusted EBITDA in the quarter. In addition to delivering strong financial results, we are continuing to grow our footprint, expanding service addresses 10% year-over-year, including 27,000 new marketable fiber addresses in the second quarter. We are making good progress towards our 2024 goal of 125,000 marketable fiber addresses. We're also making progress on adding wireless to our bundle. During the second quarter, we announced that we are officially entering the MVNO market through the established NCTC partnerships. Our product will be called TDS Mobile and we plan to begin offering it later this year. We believe that adding Mobile to our product portfolio will be complementary to our broadband offering and it will enable us to offer a full suite of competitive products and services to our customers. Initially, TDS Mobile will be offered exclusively for broadband customers in select areas, but over time we plan to offer it in all of our markets, expansion, incumbent and cable. We will provide pricing and device information closer to market launch. Moving to Slide 15. You can see where we are on our longer-term scorecard. We are targeting 1.2 million marketable fiber service addresses. We ended the quarter with 854,000. This reflects progress in growing fiber through our expansion markets as well as fibering up our incumbent markets. We're also targeting 60% of our total service addresses to be served by fiber. We ended the quarter with 49%. In our ILEC, 44% of our addresses are fibered up. And finally, we are expecting to offer speeds of one gig or higher to at least 80% of our footprint. We finished the quarter with 73% at gig speeds. On Slide 16, you can see that we are growing our footprint with a 10% increase in total service addresses year-over-year. As shown on the right side of the slide, we see increased demand for higher broadband speeds with 79% of our customers taking 100 megabits per second or greater, up from 74% a year ago. We continue to increase the availability of Gig+ speeds and customer take rates of these speeds are growing with 19% of our customer base on one gig or higher at the end of the quarter. Turning to Slide 17. You can see that we had 2,100 residential broadband net adds in the quarter, which contributed to 5% growth in residential broadband connections year-over-year. As we deliver new fiber service addresses, our teams are marketing and selling into those addresses. This quarter, we delivered 7,400 residential broadband net adds in our expansion markets. While this is consistent with recent results, net adds did come in slower than our expectations this quarter. We have plans in place aimed at ramping our broadband sales over the coming quarters and we remain focused on achieving our penetration targets. Overall, the fundamentals of our fiber program are strong. These markets are contributing to revenue and adjusted EBITDA growth. Our expansion markets are more cost effective than our business cases expected and we're seeing that fiber markets are the most efficient networks to run. Now a few more comments on net adds. We had two discrete events this quarter that impacted this metric. First, one of our cable markets in Ruidoso, New Mexico was devastated by wildfires, damaging customer homes, businesses and plant equipment. Service was disrupted to thousands of customers in that area and our teams have been working very hard to get customers back online as soon as possible. As of the end of June, we had approximately 1,000 broadband connection losses related to the fire. We now have reestablished broadband services to over 90% of the community and are aggressively winning to work those customers back or to win those customers back. Second, the ACP program ended during the quarter. Our team did a great job of getting these customers on other broadband plans that met their needs. Of our 19,000 ACP customers, only 2,400 chose to disconnect. In addition to these two discrete events, we are experiencing increased competitive pressures across our ILEC and cable markets. This is consistent with industry trends. And specifically there's more over builders in these markets. But in our ILEC where we have upgraded our network from copper to fiber, we have been able to effectively defend and compete. With support from our enhanced ACAM program, we will get even more fiber into our ILEC markets over the next few years. And in our cable markets, we have a strong product capable of delivering gig speeds using DOCSIS 3.1. In addition, we strategically overbuild our networks with fiber in certain areas and we put fiber in all new greenfield builds. In our cable markets, we continue to implement strategies to win and save customers in response to evolving industry competition. Also consistent with industry trends, we continue to experience video cord cutting. In addition, our video attachment rate has been lowered than planned and expect this trend to continue which will have an impact on revenue for the full-year. Now turning to the middle graph, average residential revenue per connection increased 5%. This was due primarily to price increases. With increases in broadband connections and revenue per user, we saw 7% growth in residential revenues. Specifically, expansion markets delivered $28 million of residential revenues in the quarter compared to $18 million a year ago. As expected, commercial revenues decreased 6% in the quarter as we continue to decommission our CLEC markets. And lastly, wholesale revenues increased 2% due to the incremental revenues we have started to receive under the enhanced ACAM program. On Slide 18, you can see our quarterly performance. Operating revenues were up 4% in the quarter as the growth in residential revenues and wholesale was partially offset by the decline in commercial revenues. As our fiber connections and revenues grow coupled with a 6% decrease in cash expenses for the quarter, we are seeing nice growth in adjusted EBITDA, up 32% in the quarter. Capital expenditures were $78 million in the quarter, down 41% from last year as planned. Slide 19 shows our 2024 guidance. As previously mentioned, video connections are expected to be lower than planned and the ramp up of broadband net adds has been slower. Therefore, we're now projecting revenues to be in the range of $1.05 billion to 1.08 billion. Although our revenue range is being lowered, the team has continued to exercise strong expense management. As a result, we are now raising our adjusted OIBDA and adjusted EBITDA ranges to $330 million to $360 million. We are not making any changes to our capital expenditures guidance. With increased adjusted EBITDA and unchanged capital, we anticipate delivering higher free cash flow than originally expected. As we've been doing all year and will continue for the next few years, we are balancing the priorities of both our fiber expansion program and the [EACAM] (ph) program. We are carefully planning and engineering both programs to keep them progressing at a pace to meet our build commitments, while staying within our available funding. In closing, I want to thank all of the TDS Telecom associates for their focus on our strategic priorities, including caring for our customers and communities and carefully managing our spending. I will now turn the call back over to Colleen. Colleen Thompson: Okay. We will now open up the call to questions. Operator, we're ready for the first question. Operator: Thank you. [Operator Instructions]. Your first question comes from the line of Ric Prentiss from Raymond James. Please go ahead. Vicki L. Villacrez: Hi, Ric. Ric? Okay. Let's go to the next one. Operator: The next question comes from the line of Sergey Dluzhevskiy from Gamco Investors. Please go ahead. Sergey Dluzhevskiy: Couple questions for LT, about the tower business. Maybe just the first one, a broad question. As you look at your tower portfolio pro form for T-Mobile transaction closing, I guess, at high level, what are the strengths in your opinion of this portfolio? What are some areas of improvement? And what would be the main selling points to potential allocators as you market those towers? LT Therivel: Yes. Good morning, Sergey. Thanks for the question. The strengths I think really are evident in just the portfolio of the towers themselves. We've provided detail in the past about our tower portfolio. One, geographically diverse and geographically attractive. What do I mean by that? There's relatively few competing towers within a mile, 1.5 mile, 2 miles, 3 miles, etcetera. They're towers that are geographically unique and over time that will be attractive to co locators particularly as people have to densify their networks. It's not cost effective to try to put up a new tower right next to where a tower exists today. And so that geographical uniqueness, I think is a key driver of the attractiveness of the portfolio. The opportunity is simple, which is simply to grow our co-location rates. One of the things that if you do the math on the margins around the portfolio both current and forecasted in the information that we provided in the investor presentation, the expenses that underpin these towers are quite small, right? There's not a whole lot of expense in running this tower portfolio. And so the entire driver of the delta in profitability between ourselves and some of the other larger tower players in the industry is driven by co-location rates. So, as we increase those co-location rates over time, you can expect those margins to steadily increase and that's both margins and that's cash flow that drops straight to the bottom line. So, that's why we're optimistic about this segment. It's both an attractive asset and we think that we can grow those co-location rates steadily over time that will improve the financials. Hopefully that answers your question, Sergey. Sergey Dluzhevskiy: Great. And maybe another more specific question on the powers. So obviously, T-Mobile signed a new MLA to be a tenant on those incremental 2015 towers. But the exact selections or full list of their exact selections won't be known for some time. I think you indicated until 30 months at the transaction close. So, depending on their selections, the overlap with towers with other tenants, could be, I mean, it could differ and you might end up with between 800 to 1800 towers without co-locators. So the question, I guess, between now and then, how would you be planning for this transition? To what degree would you be able to market those towers? And how would you balance kind of having those towers without co-locators and looking to market them versus decommissioning some? LT Therivel: Yes, Sergey. So, you mentioned the uncertainty around the towers that T-Mobile will be on. It's an interesting financial equation that that creates for us. Right? Because it once we know which towers they will be on, what if the result of that is that the majority of towers that they're on do not have an existing co-locator, that creates more attractive long term growth potential, but it somewhat impacts margins because you now have more towers with simply one co-locator on it. If instead they end up on towers where we have current co-locators, meaning there's a larger majority of the towers they select are where we currently already have a tenant, that will create better margins, but it will mean that we have more naked towers at the conclusion of the transaction. And so we'll have to determine what we do with those naked towers. I do not think it is a foregone conclusion that those naked towers will necessarily be decommissioned. We have a lot of different things that we can do with those towers, and we're going to work that out in the coming months and coming quarters as we get more transparency into T-Mobile's plans. Nothing that I just talked about impacts the way that we are marketing that tower portfolio to other potential co-locators. So, what we're not trying to do is to gasp which towers they're going to be on and consequently prioritize or deprioritize those towers in our marketing efforts. It is full speed ahead in terms of marketing our entire tower portfolio to other potential co-locators and we have steadily improved that co-location rate over time completely independent of the T-Mobile deal. And you can expect that to continue and we're going to continue to try to get more co-locators on our towers. This is an environment and we kind of mentioned this somewhat in our earnings comments. I mean the environment right now for increased tower co location is just slow, right? If you look at our capital spend, our approach as a wireless business to capital spend is quite similar to the approach in terms of capital spend from other players in the industry. People are on the back end of their mid band rollouts, the back end of their 5G rollouts and so overall capital is down and that affects the ability to put new towers into place and to get new co-locators. But I firmly believe this is a temporal phenomenon. What you'll see is capacity needs for the industry, are going to continue. Nothing that I'm seeing in the industry would indicate that the demand for mobile data is going to slow. And because we don't have in the industry, we don't have an active spectrum pipeline, right. There is other than what we're out there marketing, there is not a whole bunch of spectrum out there to be had and what that's going to cause over time is it's going to cause wireless players to have to densify in order to support this capacity needs, because there isn't an obvious spectrum pipeline to support it. And I expect that that densification will likely happen even before 6G and the increased densification and the new spectrum that's going to come into play in 6G. And so in the long run, right, we're bullish about the opportunity to grow that co-location. And so that's why we're marketing those towers very aggressively out there to other co-locators and that will continue completely irrespective of where T-Mobile lands and which towers do it. Sergey Dluzhevskiy: Got it. Great. And I guess one question on the wireless segment. So obviously, you had an improvement in postpaid phone subscriber losses. At the high level, I mean, if you had pinpoint two or three drivers of that, what are some of the initiatives that work for you in terms of those improving trends? And what are your expectations kind of for back half of the year in terms of those initiatives? LT Therivel: Yes. It's a pretty simple equation. If you can improve churn and improve your gross adds, you generally going to improve your net adds. And so we talked about Us Days during my commentary. Us Days have been an effective method of reaching out to our existing customers getting them back under contract and so that's helping with churn. And we've been aggressive in the market when it comes to our postpaid offers. We have offers in the marketplace right now at a price point that's really attractive to customers. We've removed trading requirements and we've many times removed plan mix requirements. And so those are attractive offers to customers that are helping drive improved gross ad performance just in terms of share of gross adds. Now the switching pool is down, but not notwithstanding the switching pool being down, we see our share of gross adds improving, which is an impressive accomplishment if you think about the overhang of the deal. You can expect to see us continue to be aggressive in the marketplace. We're not taking our foot off the gas pedal when it comes to investing in existing customers, so in those retention offers bringing churn down. And you can see us continue to invest in aggressive promotional offers to get new customers. And so that's going to be full speed ahead for us for the rest of the year. I think you can probably what you're seeing in the marketplace right now, I don't think we're going to be backing off of that for the rest of the year. And so, I'm cautiously optimistic that we can continue this momentum that we have right now. Obviously, we operate in a -- we mentioned this, right, we operate in a highly competitive sector. I do not expect our competition will be standing still. And so we're going to have to adjust accordingly. But yes, I'm pleased with what we've been able to drive both on retention and on gross adds. Sergey Dluzhevskiy: Great. Thank you. And my last question is for Michelle on TDS Telecom side. We're seeing wireless and wiring companies partnering with infrastructure funds or private equity to the fiber deployments potentially at a more rapid rate than they would be able to do on their own and keeping those builds old balance sheet. I was just wondering if you could share your thoughts on such opportunities to what degree those structures are relevant to you, how attractive are they to you and your markets? And what are some of the factors that might lead you to lean into those structures over time or not? Michelle Brukwicki: Hi, Sergey. Thanks for the question. I'll comment briefly and then Vicki may want to add in as well. Over the years as we've developed our fiber program strategy, we have considered lots of different financing alternatives that can help us advance our strategy. So, we have been open to various structures and we've evaluated a variety of things really. And where we've landed is that we've had some really good success with some preferred equity issuances over the last couple of years. And right now we've been funding this primarily through debt. But we continue to be open to different types of structures and whatever would be best for the enterprise, I think we would consider, various alternatives. But it has to be the right thing for the whole enterprise. So, Vicki, do you want to comment at all? Vicki L. Villacrez: Yep. Good morning, Sergei. Right now, we are very focused on the deals that we have in front of us. The transaction with T-Mobile and UScellular wireless business as well as the transactions at the TDS level. And that is where our focus is at right now, including monetizing the remaining spectrum that was not included in the T-Mobile transaction. So, that's where our focus is at, we're really pleased with where we are at with our leverage at the end of the second quarter. We've improved leverage both at the UScellular and the TDS consolidated level. And as you heard in my prepared comments, we are in a good position, from a liquidity standpoint to fund our fiber program as we go forward the remaining of the year and into 2025. And so that's where our focus is at. Very pleased overall with the strong growth that we reported in the quarter. TDS Telecom had strong top line as well as bottom line growth. And that really is, driven from the investments we've already made. So, the company is just very focused on broadband penetration, penetrating into the new households that we've enabled with our capital investments over the last year. Thanks, Sergey. Thanks. Next question please. Operator: The next question comes from the line of Ric Prentiss from Raymond James. Please go ahead. Ric Prentiss: Okay, good. Thanks. Hey, yes. So, first question, I'll follow-up on Sergey's obviously a lot of discussion about convergence fixed with mobile, maybe from both LT side, Michelle's side and maybe even Vicky side. How are you all viewing convergence kind of theoretical and then specific to your operating units? LT Therivel: Yes, Ric, I'll start maybe I'll hand it to Michelle afterwards because my threat is her opportunity, right. So, as I view convergence, it is clearly a trend in the marketplace. You see it from the success that cable wireless has had in the market in terms of growing share, right there, their market share for cable wireless is still significantly below their share of gross adds. And we are an industry where market share generally reaches equilibrium at whatever your soda is. And so, there's still a lot of room for them to grow. And why is that? I mean convergence is a word that means different things to different people. Maybe I'll simplify it and just talk about fixed wireless bundling. If you're able to use the profit stream from one product to help subsidize another and it can help you with churn, well then that's a good equation. And that's something that you see not just the large cable players doing, but the small cable players doing. And so, as we forecast forward where cable is going to be in our footprint, we see an expanded presence of cable wireless in our footprint and that's not necessarily because of expansion of the big guys, it's because we think that the smaller cable players TDS Telecom included will start to offer a wireless offering in order to help bring churn down and in order to either differentiate their wireline offering or just keep pace with the big guys. And you also see that in the strategies pursued by the larger wireless players. I'm speculating here because obviously I don't know why the cable players or why AT&T or why T-Mobile or anyone else does what they do. But if I look at my speculation and you say, okay, well, T-Mobile is out there, expanding fiber footprint, AT&T has been very public about their desire to expand the fiber footprint. Why is that? Well, it's because of the power of these bundled offerings and these converged offerings. So, this is something that our scale makes it challenging for us to do. There are opportunities for wireline players to provide wireless services because there's a wholesale wireless offering. Wireless players do MVNOs. And there is not a commensurate wholesale approach to wireline. I don't have access to nationwide wireline wholesale offers. So, it's very difficult for us to match those bundled offers. Do I think that every single customer in the U.S. wants a bundled offer? No, I do not. So, I think that there is some kind of a threshold out there for this market, but it's a threshold that still has a lot of room to grow. And so, we do view it as a threat to our business. We've been very transparent about that in our earnings calls in the last quarters years frankly. And so, yes, it's something we keep a very close eye on. We think we can compete effectively with it from an aggressive price point perspective and a high quality network perspective and so on. But it's definitely a competitive threat. And my threat is Michelle's opportunity. So, Michelle, maybe you can talk a little bit about how TDS is looking at it. Michelle Brukwicki: Yes. Thanks, LT and thanks for the question, Ric. Actually, what LT said I wholeheartedly agree with. So, from a TDS Telecom perspective, we are very excited to be getting into this space. As LT mentioned, this is a great opportunity for us. But it is important to make sure that we level set on the definition of convergence. We also see this as more of a bundling. We do not believe that you have to own both the wireline and the wireless network to make this work, but it is more of providing attractive bundling opportunities for the segment of our customers who want to buy both services from the same provider. And we've looked at the MVNO market for many, many years. Our team has done analysis on this for a long time. And over the last couple of years, it's really started to make sense because of what else he mentioned is that this ecosystem has developed where there are now, relatively easy ways for wireline companies to get into this market and be able to offer wireless through wholesale agreements. And we've signed up with the NCTC, so the National Content and Technology Cooperative, through their -- an industry group who established partnerships for companies like us to be able to join in and participate in a relatively straightforward way. So, the ecosystem developed, the economics developed, the customer demand developed over the last few years. So, we think that this is the perfect time for us to get into this market and be able to round out our product and service set, in order to really meet the needs and the demands of the broadband customers that we're selling to. Yes, well said. Ric Prentiss: A couple of other questions from my side. One of the other hot topics this quarter is the next generation iPhone. What might be an AI, push? Maybe some opinions on is AI ready for prime time and wireless? What does it do to the competitive intensity? Switcher pool, subsidies, and kind of what's baked into your guidance, so an overarching AI phone question? LT Therivel: Hey, Ric, I think I would tackle it in one of two ways. I think on the revenue side of the equation, it's too early to tell. The last Samsung (KS:005930) device had some really attractive AI capabilities built into it. I think they're awfully cool. I think a lot of our customers think that they're awfully cool. We haven't seen a massive change in market share right to Samsung with those capabilities. So, I think that's still a work in progress. And obviously Apple (NASDAQ:AAPL) has made some announcements, but we don't yet know what those capabilities are going to look like. And so, we aren't projecting in our numbers any major shifts based on AI and AI capabilities on the revenue side. I do think that where we are starting to see some interesting opportunities is on the cost side of the equation. And so we're already using AI and some AI capabilities in our care centers, education on next best offer, how to best link the various touch points of our customers across our enterprise, so we can serve them better, so we can have more effective care center interactions. I do expect over time that those kinds of capabilities will also transition into the digital space. And so being able to better serve customers, being able to better manage costs, I do think that's where you're going to see more traction on AI in the near-term. I'm long-term very bullish on the capabilities that it provides on the device side, but I think it's too early to tell when that's actually going to show up in the numbers. Ric Prentiss: Okay. Last one for me is on the spectrum. Obviously, several times, Vicki and everyone's kind of mentioned that we've got more spectrum we could monetize, Kind of two-pronged question to the spectrum. If you were to move forward before the T-Mobile deal is approved and closed, what kind of transaction could you do with the Spectrum since the Spectrum is kind of inherent in how your customers are being served today? And secondly, I think in the 10Q, it mentions that you guys assessed the impairment test of the wireless spectrum, what you're selling on the wireless spectrum that you're keeping outside of the T-Mobile transaction. And it came out saying that the carrying value, looks like you exceed your fair value on the balance sheet. So, just wondering is that an update based on kind of price talk or what that means? LT Therivel: Yes, Ric, I'm going to punt a little bit on most of the spectrum questions, because we do have an active process going on. So, I'm going to probably stay away from some of the value related and process related questions. What I can tell you is, I mean, we've specifically designed the transaction with T-Mobile to ensure that it is a smooth transition for our customers. So, the reason why we did a year lease of Spectrum to T-Mobile after the transaction, even the Spectrum that they're not acquiring is so that we could make sure that our customers were properly served and it was a really good transition and that we saw no decline and no change in network experience for our customers. One of the things we've worked on with T-Mobile is to ensure that day one, you see either no change or ideally a better experience. And we're going to be bringing more spectrum to bear to customers and that's not just to our customers, but to T-Mobile customers as well. And so that portion of the transaction has been designed to make sure that it's a smooth transition. For the go forward spectrum, I'm going to punt on that a little bit only because we do have an active process going on and it's probably not appropriate for me to comment further on that. Doug Chambers: Yes. With respect to the spectrum carrying value, every year well, at least every year we're required to assess that for impairment. We do that in the fourth quarter. So, we do what's called the step one accounting test and did evaluation that's expected. The fair value was greater than the carrying value. So, we do have recent data on that that we use to make that assessment. Michelle Brukwicki: As you know, Ric, as you know, any comments that we'd be making on this process would only be if we had a definitive agreement, that was signed and in place. So, we'll keep you updated. Ric Prentiss: Make sense. So, I think, LT, to your point, the customer experience is something that can't be damaged. And so you factor that into the T-Mobile deal, it would factor into anything that might go on with Spectrum, maybe a safe way of saying it. Michelle Brukwicki: Thanks, Ric. Next question? Operator: The next question comes from the line of Jonathan Atkin from RBC. Please go ahead. Jonathan Atkin: Thanks. Couple of questions about the Tower business. I wondered about when the dust settles, what would be your appetite to do build to suits? And secondly, the existing portfolio to what extent might require augmentation CapEx, given that when most of these towers were built, it was meant simply for UScellular as opposed to multi-tenant? Thanks. LT Therivel: Hey, Jonathan. Welcome. Good to hear you. So, I mean in terms of build suit path forward for the Tower business that's different from the strategy that we pursued. It's not currently reflected in the projections that we provided. It's not currently part of the strategy. It doesn't mean you can't change it, right. I mean, one of the things that we're still working through is what is the right strategy and the right long-term path forward for that Tower business. We don't know the answer to that yet. That's going to be something that we're going to be spending time on in the coming months and the coming quarters. There's no build to suit capital. There's no build to suit revenue built into the projections today though. And in terms of enhanced capital, so I guess, I think about it a little bit differently in that, when we built our towers, we didn't build those towers with the idea of only having one tenant in place. We built those towers to provide a good mobile experience. What does that mean? We operate our towers in more rural areas on average. So, we have pretty tall towers, Alright. We have a pretty tall tower portfolio, that enables us to provide broad coverage to rural America and that's been kind of a key part of our long-term wireless proposition. What do tall towers enable you to do? Tall towers enable you to have space for multiple RAD centers. And so if you've got multiple RAD centers, you can add on co-locators, without a whole bunch of incremental capital and in fact without any incremental capital. And so that's also reflected in the projections that we provided as part of the investor presentation. So, a different way of answering your question is, I do think we have the opportunity to add co-locators, to add revenue, to continue to grow that Tower segment and to continue to grow the margins and the cash flow from that Tower segment without needing to spend a whole bunch of capital on our existing towers. Jonathan Atkin: Good answer. Two more. Ground lease ownership, maybe just kind of level set us on where things stand and appetite for using capital, at least at some point to extend or buy ground leases to the extent that you don't already want to control them? And then kind of back-office types of activities associated with the tower company, lease administration and so forth, Are you where you need to be or are there improvements or enhancements that you foresee making? LT Therivel: So, from a ground lease perspective, we have had a steady rhythm and a steady drumbeat of finding opportunities to take on ground leases that will continue. We don't have a dramatic shift in our strategy there. It's going to be continued and because of that you also don't see a dramatic shift in the financials that we put forward. It doesn't mean that we don't look for the opportunities. It means we've been doing it and we'll continue to do it as those opportunities arise. From a back-office perspective, we think we run a lean organization. We did before the separation. We'll continue to do so after the separation. That lean organization is reflected in the financials that we put forward. The one thing I will highlight is and then you asked about work that's ongoing. A number of the support functions to that tower organization are resident inside of UScellular, the wireless operating company, they're resident inside of TDS, our parent company. And continuing to be able to work towards being able to stand that tower company up independently is going to be a lot of work for us in the coming quarters, but I don't see that work adding incremental expense. It's more let's call it isolating it, right. So, it's isolating it to the tower company as opposed to adding it incrementally to the tower company. And so that isolation, that clarification of, for example, if you were doing civil engineering work on the towers that civil engineering work currently may be being done inside of our wireless business that would be being done to support the Tower business moving forward. It's not going to add incremental expense. It's simply clarifying that expense in our financial statements. And when I say clarifying, I don't see that being a big change to what we reported, but it's more the operational nuts and bolts of moving that work from wireless code to tower code, if that answers your question. Operator: And that does conclude the question-and-answer session. I would like to turn the floor back over to Colleen Thompson for closing remarks. Colleen Thompson: Okay. Thanks everyone for your time today. Please reach out to Investor Relations with any additional questions and have a good weekend. Operator: This concludes today's conference call. Thank you for your participation. You may now disconnect.