Good day, and thank you for standing by. And welcome to the TDS and U.S. Cellular Second Quarter Earnings Results. . I'll go on and hand the call over to Jane McCahon, Senior Vice President, Corporate Relations. Thank you. Please, go ahead.

Thank you, Mow. Good morning, and thank you for joining us today. We want to send out our very best wishes that you and your families are well. I want to make you all aware of the presentation we have prepared to accompany our comments this morning, which you can find on the Investor Relations sections of the TDS and U.S. Cellular websites. With me today and offering prepared comments are, from TDS: Pete Sereda, Executive Vice President and Chief Financial Officer; from U.S. Cellular, LT Therivel, President and Chief Executive Officer; Doug Chambers, Executive Vice President and Chief Financial Officer; and from TDS Telecom, Vicki Villacrez, Senior Vice President of Finance and Chief Financial Officer. This call is being simultaneously webcast on the TDS and U.S. Cellular 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 U.S. Cellular's wireless partnerships. TDS and U.S. Cellular filed their SEC Forms 8-K, including press releases yesterday and then we filed our 10-Q this morning. As shown on Slide 02, the information set forth in the presentation and discussed during this call contain statements about expected future events and financial results that are forward-looking and subject to risks and uncertainties. Please review the safe harbor paragraphs in our press releases and the extended version and are included in our SEC filings. In terms of our upcoming IR schedule, Slide 03, the investor relations team is attending the Morgan Stanley Media and Communications Corporate Access Day on August 12th. And as always, our open door policy can now be in open door phone or video policy, so please reach out to us if you're interested in speaking with us. Also, we want to call your attention to our recently refreshed and updated Environmental Social and Governance ESG website and additionally in order to advance our ESG strategy, we recently conducted a materiality assessment to help prioritize and score ESG opportunities and risks from the perspective of internal and external shareholders, stakeholders. When finalized, we'll publish the results on our website. Before turning the call over, I want to remind everyone that due to the SECs and high pollution rules related to auction 110, we will not be responding to any questions related to spectrum auctions. And now, I'll turn the call over to Pete Sereda. Pete?

Thanks, Jane, and good morning everyone. Before speaking about the balance sheet and our funding strategies, I wanted to recognize all the actions that both of our business units are taking to lead the higher returns and stronger businesses over the next several years. Turning to the income statement, I want to call your attention to a couple of unusual items. First, our effective tax rate was a negative 48.9% during the quarter to primarily to the reduction of certain tax accruals and as part of redeeming some of our high account debt, we recorded an additional $36 million a non-cash interest expense $20 million of which was U.S. Cellular. And this was to right up on amortized debt issuance cost from prior bond transactions. As we've discussed on past calls, maintaining financial flexibility's one of the pillars of our corporate strategy. For many years we've worked to retain relatively low-level leverage levels, long-dated maturities, sufficient undrawn revolving credit facilities and significant cash balances, while at the same time making sure we have the financial resources we need to find our businesses. As you could see on Slide 04, at the end of the second quarter, TDS continues to maintain a solid financial position including ample available funding sources consisting of cash and cash equivalence and available credit facilities which is especially important since U.S. Cellular and TDS Telecom are both currently in investment cycles. With U.S. Cellular investing in network modernization 5G and Spectrum and TDS Telecom aggressively investing in fiber expansion. We will continue to look for innovative ways to finance these investments for preserving our credit rating. Turning to Slide 05. I also wanted to call your attention to all the work that has been done to lower the average cost of our financing. As you can…

Thanks, Pete, and good morning everybody. It's been about a year since I joined the company and I continue to be just blown away with the team and the culture of U.S. Cellular. I want to thank all of our stakeholders and that includes everybody on this call for the support we endeavored over the past year. Turn to Page 07. Our strategic priorities remain simple, were designed to drive growth and improve return on capital over time. In about halfway through the year when making really good progress towards these priorities, me and Doug cover the operational on the financial highlights of the second quarter. And I'd like to provide a couple of thoughts on these strategic priorities. In top of mind for me right now is the competitive environment. We've seen some really aggressive promotions out there for about new and existing customers and as Doug will touch on, it had an impact on our postpaid subscriber results for the quarter. We are maintaining our focus on profitable growth. We are leveraging our regionally focused strategy to test different offers to help us hone in on the right balance between subscriber growth and profitability. I've talked about this in prior calls but I believe one of the benefits of having noncontiguous regions, the ability to test different approaches to see what resonates with our customers. And you see this and how we're approaching the marketplace right now. We got some very aggressive offers to drive switching in certain markets with more upgrade focused offers and others. And we'll continue to work these trials so that we have the right approach when we get to the main selling season later this year. I spoke to you last quarter about some of our new initiatives to drive growth in our…

Thanks LT, good morning. Let's start with the review of customer results on Slide 08. Postpaid handset gross additions increased by 16,000 year-over-year due to higher switching activity which was depressed last year as a result of the unfolding pandemic. Our ability to track switchers remain flat year-over-year due to aggressive industrywide promotional activity on handsets. We say connected device gross additions decline by 4000 year-over-year. This was driven by lower gross additions of internet products such as hotspots and tablets compared to the prior year when we experienced an increase in demand due to COVID-19. The declines in hotspot and tablet sales were partially offset by an increase in connected watch gross additions. Total smartphone connections increased by 15,000 during the quarter and by 60,000 over the course of the past 12 months. That helps to drive more service revenue, given that smartphone ARPU is about $20 higher than feature phone ARPU. Additionally, I want to call it our strong prepaid results which are driven by changes to our prepaid offerings, our prepaid base increased a 11,000 due to an increase in gross additions combined with a decrease in defections. Next, I'd like to comment on the postpaid churn rate shown on Slide 09. Postpaid handset churn detected by the blue bars is 0.88% up from 0.71% a year ago. This is driven by voluntary churn which continues to run at higher year-over-year as a result of increased switching activity and aggressive industrywide competition. Total postpaid churn combining handsets and connected devices is 1.11% to the second quarter of 2021, higher than a year-ago as we've also seen churn increase on connected devices due to certain business in government customers disconnecting devices that were activated during the peak periods of the pandemic in 2020. Now let's turn to the…

Okay, thank you Doug. And good morning, everyone. I am pleased with our financial results for the second quarter and through the first half of the year. And we are tracking to our guidance expectations. We continue to see strong broadband growth that has accelerated since the start of the pandemic. We grew residential broadband revenues 16% in total in the quarter driving total residential revenue growth of 10%. Overall, we grew our topline 5% while planned investment standing on new market launches caused our adjusted EBITDA to be lower than prior year. Also, notable during the quarter was strong average residential revenue for connection growth of 7%, on price increases and product mix, as customers take higher speeds. We continue to experience strong tailwinds which are driving increased broadband adoption. For example, work-at-home environment continue, bipartisan support for broadband is driving more federal and state opportunities. And population migration and on most attractive markets is driving strong household growth. During the quarter, we grew our total footprint 6% which increased strong organic household growth across our market. Turning to the Slide 17. We remain committed to the strategic priorities we've been focused on for several years. As previously discussed, our primary objective is to generate growth by investing in our high-speed broadband services. We have a multi-faceted approach in this growth that includes leveraging existing networks and constructing Greenfield fiber in targeted locations. We are very pleased that where we've invested in fiber in our incumbent market, we have achieved superior market share, even our expansion markets we are seeing strong customer preregistrations. In addition, we continue to drive faster speeds in our more role incumbent market but building to meet our A-CAM obligation and utilizing state broadband ground. On Slide 18, total residential connections increased 2% due to…

Thanks, Vicki. Operator, we're ready for questions at this point.

The first question comes from the line of Rick Prentiss from Raymond James. Your line is now open.

Thanks. Good morning, everyone.

Good morning, Rick.

We'll start on the wireless side. LT, it's been a year as you point out as you've done there. What caused the thought that partnerships could help U.S. Cellular or is kind of service revenue growth in return on capital objectives. Can you tell me on what kind of partnerships you're seeing out there that might make sense, if you could maybe also point on what are the pros and cons as you look at the AT&T in this year there was announcements from there.

Thanks, Rick. Let me start with partnerships. I think the partnerships' in two ways. Our partnerships to grow revenue and partnerships to manage cost and with a number of those the partnerships. The way to think about these just and it's kind of across the business is a lot of these are small statistics and example. Right, we've substantively moved or have forward on new stores over to our local dealers. Retail organizations signed on a number of new dealer partners and we're coinvesting with them, so we can grow our footprint, share the cost, share the benefit. And on the business side, we signed a number of partnerships to bring these solutions to bear. And is one example we announced just yesterday around Geotab. Geotab is a fleet management service, by the way it's one of the best fleet solutions in the business. We're excited to program with them, gives us another product to sell to our business customers and obviously growth in revenue, growth in margin. On the infrastructure side on the cost side, those partnerships take time. We are in a variety of different discussions. I'll just point briefly at the dish and the way that we signed which I think is a pretty good example of a partnership. Like, we have -- we took our, we've taken our tower business and I talked about this in previous calls since I won't get into too much detail unless it interests. But it really pivoted our tower business to serve the potential co-location customers. One of those is there. We signed in in LA with them. I can't get into the details on that but we're bullish about how that is going to help us both the driver revenue but more importantly drive better utilization of our assets.…

Makes sense. Also you touched on a couple of times, fixed wireless access. It seems like your try on it now, when do you move when we talk about the technical side and market demand side. When do we think you could move from trialing to actually launching and what sort of addressable market is there out there and why would somebody choose U.S. Cellular?

So, we haven’t announced a launch date from a broader for activation perspective but certainly if the trials go as we're seeing them go so far, I expect this to be a product that we have in the market certainly by next year generating some meaningful opportunity for us. Your question of where is the market opportunity is exactly the thing that we're trialing. Because there is a bull case and a bear case to this. The bear case is substantive fiber expansion. So, moving from what is currently at best fiber inside of municipalities and that starts to move out coupled with satellite moves from being a truly ultra-rural solution and a promise, which is what it is now, to a meaningful product that delivers meaningful speeds and meaningful capacities to consumers. In that world, the opportunity for fixed wireless is I still think it's meaningful but it's not a large. There's an alternate path forward which is fiber does not expand probably from municipalities. Satellite remains what it is today, ultra-rural and that creates a lot of opportunity for us. And what I'll tell you is the initial market trials are indicating that. I can't get any details but the take rates that we've had just on our pilot programs are higher than I expected. What that tells me is that customers are eager for an alternative to cable and are eager for an alternative to the other solution throughout there from the rural perspective. And so, I think that wireless broadly can provide a really compelling alternative for home connectivity in much as rural areas to call it suburban areas. And why should they pick U.S. Cellular is an alternative for that? Well, I'd argue that our technical trials and where we're setting world records in terms of the speed that we have. I don’t think there's anyone better than we are in terms of providing connectivity for rural America. And so, I think we'll be in the driver seat when it comes to offering that solution to our customers once we're finished with the technical trials which have more to do with productization by the way. So, for example, how to think about changing an external antenna on the home getting the signal inside the home, getting it propagated and so on. Then those are the technology works. Technology works, their trials are proving that out. So, I'm optimistic about it. Timing TBD but current course and speed I certainly think it'll be in the market in a compelling way, at least starting next year.

Great. Thanks guys, so well.

Thank you.

Your next question comes from the line of Simon Flannery from Morgan Stanley. Your line is now open.

Great, thank you very much. LT, you were talking about the roaming and the impact of the Sprint merger. I think that moved to 80% of the traffic on to the T-Mobile network. Is it fair to think that we're kind of crossing here and that you can grow that business as we go forward and perhaps the opportunity with DISH as well. Any color on where roaming goes from here would be great. And then, on the LA partnerships or and the other wireless investments. Any color on the outlook for distributions over the next couple of years, does have better communications on what to expect given proceed and auctions and the spending there?

Yes, thanks Simon. Good morning. So, on the roaming with the Sprint merger, yes you've seen our inbound roaming revenues decline. Large part of that is that we're using with T-Mobile migrating I guess this bring traffic over to their network. Know that Sprint represents right now about 15% of our roaming in our roaming revenue. So, there's not a lot more there to lose but that will be going away over time. And we do project decline in roaming revenue for the remainder of 2021 and going forward. That said, there are opportunities out there and you mentioned one is Fun Center and DISH and that's something that we'll be exploring for sure. But that's a trajectory of roaming revenues. Moving on to the LA partnership and distributions. I have a solution in the first half of the U.S but 70% of the what it was last year and that was primarily due to operational reasons within the partnership. And our expectation for future distributions in the second half, we expected distribution that is close to what we received in 2020. And going forward, we have no visibility beyond that, I mean we expect the current trend to continue. We have no knowledge of any unique arrangement with respect to spectrum or other assets that could change that. That said, 5.5% partner in that partnership and we don’t control that distribution. So, if Verizon decides to change the path of that distribution, then they will have to live with that. But right now no significant changes that we are aware of.

Okay, thank you. And on the roaming, what are we seeing on the volume side there, if just with COVID and reopening and so forth. Is that sort of back to normal levels or is there still some benefit of would people to business travel returns or whatever?

Yes. There's two sides to that. Inbound roaming, our volumes are going down and that's associated with what I just talked about. And some other carriers reducing their volumes such as 3G traffic and other traffic. And outbound side, it's a totally different story. Our usage in the outbound side increased to 100% Q2-over-Q2 and year-over-year. And by the way, while that occurred, our expense went down 7% it was because we negotiated very favorable rates on those outbound roaming agreement. So, we're managing that aspect of that quite well and yes they're going different directions.

Okay. Alright, thank you.

Your next question comes from the line of Philip Cusick from JPMorgan. Your line is now open. Hi. This is Amir Razban for Phil Cusick. Thank you for your time. Just one for me. Is USM registered for any upcoming auction?

So we filed an application for the upcoming DoD auction. That’s the answer.

Thank you.

Your next question comes from the line of Sergey Dluzhevskiy from GAMCO Investors. Your line is now open.

Good morning guys.

Good morning, Sergey.

Thanks for taking the questions. It’s -- so my first question is for LT. So LT, you mentioned in your prepared remarks, business and government segment a little bit. But could you kind of expand on the opportunities that you see in that market? Obviously, increasing penetration there is one of your priorities. What is the size of the business and government market in your service territories? What is your share now and where would you like to be in a few years? I guess what would you consider a success kind of on a three-year horizon?

Sure, Sergey. So from a business and government perspective, right, we don’t disclose the segment independently. But get back of the envelope, you can think of our share as being approximately half of our postpaid consumer share. And so there’s a lot of opportunity. The -- were getting a bit more granular on where that opportunity lies, I would point at a few places. The first is just simple blocking and tackling on the small business customers that walk into our stores. Were making growing small business a priority for our stores, and were starting to see some benefits there. We’re also seeing that in terms of adding products to the mix for our stores. So for example, the Geotab partnership that provides fleet management services. Fleet management is the bread and butter of small business sales from going through retail because you have folks that want lawn services, you have folks that have seven trucks, eight trucks, and that difficult to cover with a large enterprise sales force. It is perfect for our stores, and we started to put some of those measures in place. More broadly, however, were putting a concerted effort behind building distribution in the business and government space. And so I mentioned Kim Kerr joined our team last year. She’s been expanding her channels, expanding her distribution, and were starting to see some benefits there. And so were starting to see some larger IoT deals. We’re seeing some larger private networking deals. So this is a situation where I think we have a fantastic asset, which is an industry-leading network in the markets in which we operate. And we haven’t put strong business distribution behind that in the past, and we expect to now. And so it didn’t require like development of a lot of brand new capabilities. We don’t have to spend a ton of capital in order to support this channel. This is about building distribution and getting share similar, at the very least, to where our postpaid consumer share is and that creates meaningful growth. So hopefully, that addresses what you’re looking?

Yes. Great. Thank you. Maybe one question on the competitive front. So T-Mobile, obviously, has been highlighting suburban and rural markets as a growth opportunity for them. They’re trying to double their market share over the next four to five years. What have you guys seen from T-Mobile when you compare it to front in the second quarter in your markets? And how do you plan to mitigate some of the impact that you may see from -- or maybe already are seeing from their network builds, distribution expansion and in general, the marketing question?

Sergey, so Ill address your T-Mo question. I think there’s two fundamental things that are happening on the competitive front, right? The first is we’ve seen much more aggressive upgrade offers across the industry. AT&T started this up about, by now, almost 12 months ago, and Verizon has been on-and-off in matching them. I think question one is, how do we think about those upgrade offers? And is that a logical thing for the industry to be doing? And what -- the way I’m thinking about this right now is that in the near term, so for a short period of time, it’s actually relatively logical for the industry to be as aggressive as we’ve been. If you think about customers that are out of contracts, right, those are up about 15% since -- for the industry, since COVID. Same thing with average holding period of devices, up 15%. And so you’ve got a lot of people that are out of contract they’ve had their devices for much longer. If I couple that with the fact that 5G availability, the currency of choice right now for people making switching decisions, pretty logical for carriers to be working hard to get 5G devices in the hands of consumers given the better network experience, bring churn down. And so I’m not surprised that were seeing more aggressive offers. And you’re seeing them from us, too, right? We have taken this regional approach, but in certain regions, some of the most aggressive offers in the marketplace. The benefit that were seeing there is ARPU and ARPU expansion. And I think that been underestimated in the way that people are thinking about the financial impact for the industry. So just to put a little bit of numbers behind it, we have -- and for…

Got it. Great. Maybe couple of questions for Vicki. So on the fiber build front, I guess looking at your most mature markets as well as some of the new builds that you’re doing in Idaho and Washington, what are some of the lessons learned, what are some of the learnings that might be impacting how you guys are approaching future builds and how you’re tweaking some of your plans? I guess what worked for you guys so far and what didn’t work and you adjusted?

Thank you, Sergey, and good morning. Thank you for the questions. The success that we are seeing in our new fiber markets really continues to meet or exceed our expectations. These are the ones where we have the construction completed and we are watching our results. And this is what’s really increasing our sense of urgency to accelerate our programs. Right now, let me just share with you some of the successes were seeing with our new out-of-territory markets. For example, nearly half of our broadband connection growth in the quarter was due to our out-of-territory market, reporting twice the number of connections as compared to last year. And our broadband penetration rates, although vary across our markets due to the different timing in the market launching, they’re averaging about 32% as of the end of the second quarter. And this is still early for many of our completed markets. I also wanted to note that voice and video connections are also growing across our expansion markets, with video attachment rate at 41%. And contribution margins, as I’m watching the financials on these markets, although early, are north of 50% in the market that has completed construction more than 12 months ago. So that some of the successes were having. In terms of the construction period, we are having some delays and there are some lessons learned there. The pace of construction and the challenges we encounter are very different across each of our markets. Sometimes its permitting challenges, sometimes were hitting rocks as were doing largely varied builds, but were getting smarter, and so are the cities that want this. These are huge, significant projects that is really about the future economic prosperity of these communities. So city leaders that are keeping the end game in focus are working with us more and more to ensure success during the construction period. I think that a real key learning for both us, our contractors and our city leaders as we continue to work forward.

Great. And my last question is about video. So you mentioned that 41% attachment rate. I guess, it’s obviously an important element of your strategy, but some of your peers deemphasized TV offerings and basically direct consumers to streaming and virtual MVPD options, like YouTube TV. So what are the reasons why your video strategy makes sense for you in your markets? What is different in your markets that maybe some of your peers are not seeing?

Yes. Well, the video attachment rate of 40%, on average, across our wireline market is our customers telling us how important video is to the overall service offering. For 40% video attachment to every single broadband connection, that a really strong rate. And our video product is profitable, and it’s a state-of-the-art platform that bundled with broadband really offers a superior experience for our customers. And as you know, in our markets, we have markets that really have a high percentage of single-family homes and single-family homes buy these entertainment packages and they buy up the stack, higher speeds and higher video programming. And what’s really important from an economic perspective is that as you look -- as you know, bundling is an important part of our strategy. And so as I look at the economics, the customer lifetime value of a customer who take not only data, but also take video with data, so they have a bundled product, the value increases significantly as we watch -- as we see lower churn on these products. So very important to our overall strategy.

Great. Makes sense. Thank you.

Speakers, I’m seeing no further questions in the queue. Please continue.

Great. Well, we’d like to thank everybody for joining us today and look forward to our future conversations. Have a great weekend.

This concludes today’s conference call. Thank you for participating. You may now disconnect.