Good day and welcome to the TDS & U.S. Cellular Second Quarter Conference Call. Today's conference is being recorded. At this time I'd like to turn the conference over to Mark Steinkrauss. Mr. Steinkrauss, please go ahead, sir.

Thank you, Sara. Good morning, everyone. With me today are Ken Meyers, Executive VP and CFO of TDS; Steve Campbell, Executive VP Finance, CFO and Treasurer at U.S. Cellular; Bill Megan, Executive VP Finance and CFO at TDS Telecom. And also joining me are Jack Rooney, CEO and Jay Ellison, Executive VP and COO at U.S. Cellular. A replay of this teleconference will be available today at 01:00 PM Chicago Time and run through midnight Friday, August, 8th the replay number is 800-723-6498, conference ID 9648709. For international callers the number is 785-830-7989, same passcode. This call is being simultaneously webcast on the Investor Relations sections of both TDS and U.S. Cellular's websites. The webcast will be available for the next two weeks after which it will be available on the conference call archives. Please recall that archives calls are not updated. Some information during the call and subsequent Q&A period contains statements about expected future events and financial results that are forward-looking and subject to risk and uncertainties. Please review the Safe Harbor paragraph and the releases in the more extended versions on our website as well as in our filings with the SEC. Shortly after we released our earnings results earlier this morning and before this call TDS and U.S. Cellular filed 8-Ks, the 8-Ks include the press releases we issued this morning and some additional information. Both companies plan to file their SEC Form 10-Q later today. Both press releases have been posted to the TDS Internet home page and U.S. Cellular has posted their release to their website as well. You will also find posted on the website additional information and reconciliation of non-GAAP financial measures that maybe used management when discussing the operating data during today's teleconference, as well as the company's guidance for 2008,…

Thank you, Mark. Good morning, thanks for joining us today. I've just a few comments to make before turning the call over to Steve and Bill who will cover the operating results. And then we'll take questions at the end of the prepared comments. Operating revenues for TDS were up 7% to nearly $1.3 billion with most of the increase coming out of U.S. Cellular. Operating income declined slightly principally due to U.S. Cellular's investment in its new branding and advertising campaign and increasing handset subsidies. Quickly, let me cover some of the year-over-year, non-operating comparisons on the income statement. One, under the TDS current stock repurchase authorization the company has bought back 4.1 million common shares or about $211 million to-date of about $38.7 million remaining under that authorization. We've been buying the stock as aggressively as the Exchange regulations allow. U.S. Cellular continues to purchase shares under it's the limits [ph] program purchasing 150,000 shares in the second quarter. In the second quarter the company settled the last of the Deutsche Telekom variable prepaid foreign contracts, resold remaining DT shares. This removes a lot of complexity from the balance sheet. So we have no longer of any prepaid forward contracts or derivative liabilities. Of note the Rural Cellular Shares are still listed as marketable securities on the balance sheet since the acquisition by Verizon had not closed as of the end of the quarter. Also going forward interest expense will be reduced so we will no longer make quarterly interest payments on the prepaid forward contracts, the interest... the income line felling sharply year-over-year. In the second quarter of 2007 the Deutsche Telekom we've been was $118 million and that was the only $11 million in second quarter of this year, reflecting the change in the company's holding…

Thanks, Ken and good morning everyone. I am going to begin with a few general comments about the business and then I will highlight some of the key results for the quarter. Overall, we found the second quarter to be challenging as we face difficult economic conditions, strong industry competition and weather related flooding in some of our key markets. Despite these challenges U.S. Cellular again delivered solid results for the second quarter of 2008. First, we continue to grow our subscriber base. We added 34,000 net retail customers and we ended the quarter with 6.2 million total customers up 3% from the prior year. We're also reporting year-over-year growth in both service revenues at 9% and ARPU at 6%. Both of these trends reflect outstanding growth in our data revenues. This is the 11th consecutive quarter in which we're reporting year-over-year growth in ARPU. At the same time, we're experiencing increased costs in a number of areas of our business. As a result we're reporting operating cash flow that is essentially flat year-over-year. In this tough competitive and uncertain economic environment we believe that it's important to continue to invest in our business and customers for the long term. One of the significant steps that we're taking further differentiate our customer satisfaction based business model is our new, Believe in Something Better, branding campaigning that was launched in June. With this campaign we're showing that we recognize that wireless plays an important part in our customers' lives that goes well beyond just completing calls. Along with the campaign we're investing in training and other programs so that our associates can deliver the ideal customer experience. The initial response for the campaign from our customers has been positive, as they recognize our efforts to bring humanity to an industry that…

Thank you, Steve, good morning everyone. The headline for the quarter at TDS Telecom is that not withstanding a weak economy, ESL subscribers increased by 29% and our access line rates held steady. Also the company continues to actively manage and change its cost structure to offset revenue decline thereby holding cash flow steady. For the quarter combined ILEC and CLEC revenues declined by 4% with the segments declining at approximately the same the rate. The principle drivers on the ILEC side were physical access line losses which were 5% year-on-year excluding acquisitions and lower access revenue. It's intrastate minutes of use declined s21%. Revenues were also affected by a election to exit certain revenue pools in mid 2007. As we have mentioned in the past the decision to withdraw from the pools for our DSL service was an economic one in exiting the pool revenues were reduced by $2.1 million but the corresponding expense contributing to the pools was reduced by twice that amount. Clearly, a positive element of the quarter was the increase in ILEC data revenues which grew 24%. We had good success with our promotional campaign selling DSL adding about 8,000 net subscribers sequentially and 36,000 year-on-year. Our gross adds remains strong at 17,000. These numbers exclude the effect of acquisitions. Residential DSL ARPU increased 8% to just shy of $35. We also had success in selling our triple play adding nearly 6,600 net subscribers in the quarter and we now have nearly 49,000 in total. We have a very strong partner in dish network for the video component and are experience has been the triple play customers have significantly lower churn. Over the past year we have introduced a series of promotions in key markets including pre-service for alimony period, a gift card to be…

Thank you, Bill. Sara before we go to the Q&A period I'd like to give you some updated replay numbers we had a change. So if you would cross out the old ones I gave you at the beginning and note the following. The replay number 888-203-1112 that's domestic. For international 719-457-0820 and the conference ID number is 6948709. Thank you. And Sara, now I'll turn the call back to you for questions and answers. Question And Answer

[Operator Instructions]. Our first question comes from the side of SimonFlannery. Your line is open please go ahead.

Okay. Thanks very much. Good morning everybody, wanted to come back to the wireless gross adds if I could for a second, you referred in the release to consumer anxiety I think in the past you've talked about people trying to get their monthly recurring charge down as well but not seen it so much in the number of actual gross adds. So can you give us a sense of how much of this is the economy versus increased completion, bigger handset subsidies versus just over a market maturity as wireless penetration starts to climb, what's your sense of that and have you've seen any change during the quarter are things are going progressively worse or fairly stable through the quarter? Thanks.

Yes, this is Jay Ellison. A lot of questions in there I think I'll try to summarize what I think I heard. First of all... in the first part I think you were talking I think we had in previous calls we've talked about customers, consumers trying to adjust their wireless spending without disconnecting I think I our churn numbers continue reflect very strong results that we are keeping our customers. But as customers do call into our call centers or going to our stores we have seen them trying to work with their plans to get either better value overall and in some cases it actually may increase their level of spend a little bit but it is delivering more value over time or make some adjustments relative to the actual products or services cost consolidation of those rate plans into more family plans versus single lines plans and things along those lines. Some of our market that like in the Northeast, Northwest obviously, may see a little more significant impact in rural areas relative to some of the economic environment but that's also where we've seen some this activity of giving value out of the rate plans themselves [ph] and I would argue that we've pretty much have seen kind of... that environment that Ken and Steve both described this competitiveness, on handset subsidies really a crop all of the footprint and obviously we are going to compete to provide our customers with the greatest value that we can, it's pretty much been across the enterprise throughout... really the first half of the year.

Okay, thank you.

Yes.

And our next question comes from the side of Will Power. Your line is open please go ahead.

Great. Thanks, just a couple of questions. I guess first is there is a follow-up on the previous question just thinking about wireless competition generally I know you've talked about the handset price it's been an ongoing phenomenon. I guess occasionally [ph] are you actually seeing more advertising and marketing dollars spent by your competitors in your markets is it that also one of the contributing factors, and I guess I'll also be curious if you have any comments on early impact from the iPhone in Q3 is that helping raise awareness and what's happening on the reporting front there? Thanks.

Yes, Will this is Steve. I'll start and Jay will build on it. But to your first question about advertising I think it's a unquestionable and unambiguous yes, I mean like one of the real competitive factors that we're dealing with now are substantial increases in advertising from all the competition and we ourselves are investing in that area I talked little earlier about the increase that we saw in the quarter.

Yes, I am agree with Steve, honestly as we launched our the recent Something Better campaign that was an incremental media around that to start that and year-over-year we continue to see those... all the wireless space being a very well advertised area in media relative to the iPhone and it's launch clearly there is a lot of... another area of course we see that increase spent in advertising. But we did see some of our metro our urban market that we saw a little bit and very similar to the visional introduction we see a little bit of spike and then it stabilizes relative to the activity around AT&T, but I think also what is does is create additional awareness around those types of devices and we continue to add to our portfolio smartphone devices in all of our retail stores and so we can kind of see off that frame view as well.

Yes, the other competitive point there and it really relates to pricing and obviously margin realization but Ken talked earlier about the secondary affect of what we have seen in smartphone pricing. So it's important to understand that when the pricing on the iPhone gets set at the $199 that has a repel effects all the way down through the handset hierarchy. And so we expect to see a significant competition on pricing up and down the handset line not only for smartphones but on smartphones but much more broadly than that.

Okay, thank you.

Thank you. And our next question comes from the side of Greg Lundberg. Your line is open. Please go ahead.

Hi, gentlemen, there was a footnote in your release that said you reviewed your customer reporting procedures. And that appears to have brought down historical subs have change the gross adds and I was wondering if you could walk through. What exactly that was and also why in the second quarter if we do take the ending subscriber cancel report comes after your change of 19,000 net adds not 16,000 if you could describe that adjustment. Thanks.

This is Steve. I'll take both parts of that. The adjustment that's referred to in that footnote is that we have a catch up of some of the reporting from our reseller vendor. They were some disconnects that the reseller vendor had delayed in their reporting, the effects were not significant I think overall we're talking round numbers about 25,000 spread over several quarters. So we thought it was important to footnote it the impacts are not significant, the other point that or question that you raised has to do with the reporting of the acquisitions, the net debt activity does not include subscribers acquired through acquisitions. So that accounts for the difference. During the second quarter we purchased the remaining 50% interest in the North Carolina One partnership. You'll find some expanded disclosure about that acquisition in the 10-Q report.

Perfect, thank you.

Thank you. [Operator Instructions]. Our next question comes from the side of Chris Mancenne [ph]. Your line is open, please go ahead. Mr. Mancenne please check the mute function on your telephone or access your handset.

Hello.

Okay, we can hear you Chris.

Hi, yes sorry about that, could you comment on whether TDS did in fact received an offer from a strategic buyer in late 2007, and if it did could you comment on why this wasn't disclosed to shareholders in a public way?

Hi, Chris, this is Ken Meyers. We have had questions like that at the Annual Meeting in other forums where we have reiterated the company's policy is not to comment any rumors like that.

Okay, so I guess the thing is the letter that came out from the other shareholder you would qualify that as a rumor?

Company has no comment on that matter at all Chris.

Okay, okay thanks.

Thank you. And our next question come from the side of Kevin Roe. Your line is open, please go ahead.

Thank you, good morning the Verizon acquisition of Alltel as you know requires a pretty material divestiture, can you talk a little bit about your appetite to enhance your footprint in any material way and whether that may or may not to be of interest in what kind of balance sheet ability you have to significantly grow your footprint and on a smaller case you've got Rural Cellular having to the best in small properties. I don't if that to be of interest there any comments would be helpful.

Kevin, this is Ken. It's hard to comment on a unknown set of facts right now and the unknown set being what does Verizon actually wind up divesting in the Alltel transaction, the company has a history of looking at both wireline and wireless acquisitions as they come across, we will look at these, the company does, have a very strong balance sheet with a lot of financial flexibility, but the company also has a rather diligent M&A process where we spent a lot of time making sure that any opportunities that we due pursue are such that they fit with our strategy, around our foot print and fit our operating mile. So I can't comment on any specifics at this time. We don't even know what that looks like.

Kevin, any follow on to that?

No, thank you.

Okay, thank you. Sara we'll take the next question.

[Operator Instructions]. And it does appear that we have no further questions in the queue at this time.

Okay, so thank you everybody for joining us on the call. I am available the rest of the day, if you have any follow on questions just give me a buzz. Thank you, thank you, Sara.

Thank you. This does conclude today's teleconference. Thank you for your participation. You may disconnect at any time and have a wonderful day.