Telephone And Data Systems, Inc. · NYSE:TDS
Telephone And Data Systems — Deutsche Bank Media/Telecom Conference 2006
18 slides from Telephone And Data Systems's conference presentation, Jun 13, 2006
Slide 1: Sandra L. Helton, EVP and CFO, Deutsche Bank Media/Telecom Conference
Sandra L. Helton Executive Vice President and CFO Telephone and Data Systems, Inc. Deutsche Bank Media/Telecom Conference June 13, 2006
Slide 2: Safe Harbor
Safe Harbor Safe Harbor Statement Under the Private Securities Litigation Reform Act of 1995: All information set forth in this presentation, except historical and factual information, represents forward-looking statements. This includes all statements about the company’s plans, beliefs, estimates a
Slide 3: TDS
TDS • Diversified telecommunication company with 6.8 million customers in 36 states – U.S. Cellular (81% owned) – TDS Telecom (100% owned) – ILEC and CLEC operations • Strong balance sheet • Investment grade 3
Slide 4: 2006 Guidance TDS Consolidated (as of 5/10/06)
2006 Guidance TDS Consolidated (as of 5/10/06) Total revenues ≈$4.3 billion ** Operating Income $365 - $445 million Depreciation & amortization $745 million Operating Cash Flow * $1,110 - $1,190 million CAPX $700 - $760 million * Operating cash flow, as used above, represents operating income before
Slide 5: Financial Objectives
Financial Objectives 7-10% compound annual revenue growth (organic and M&A) over five years, returning at least the cost of capital USM WACC 11-12 % ILEC WACC ~ 9.5 % CLEC WACC 14-16 % Valuation/shareholder returns ≥ comparable companies Target an A- rating NB: Overall cost of capital fo
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Slide 7: TDS Telecom (ILEC & CLEC)
TDS Telecom (ILEC & CLEC) Largest Equivalent Access Line States – 12/31/05 12/30/05 % of total Wisconsin 384,000 33% Michigan 140,000 12% Minnesota 119,000 10% Tennessee 115,000 10% Georgia 58,000 5% New Hampshire 40,000 3% Indiana 36,000 3% 76% 7
Slide 8: TDS Telecom – ILEC
TDS Telecom – ILEC as of 3/31/06 • 7th largest independent • Rural company status • Modern network • Excellent regulatory relationships • Strong local presence 8
Slide 9: Operations
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Slide 10: TDS Telecom - CLEC
TDS Telecom - CLEC • Facilities-based in four states …92% on- switch • Selling primarily to SME • Deep penetration in chosen markets • Provisions principally with AT&T 10
Slide 11: TDS Telecom Strategy
TDS Telecom Strategy • Be the preferred broadband provider • Defend core markets • Bundle aggressively • Trial new technologies 11
Slide 12: DSL - ILEC
DSL - ILEC • 106 markets; 75,300 customers • 70% of access lines DSL enabled • Product bundles • 4 & 6 MB speeds in some markets 12
Slide 13: First Quarter Operating Data
First Quarter Operating Data 3/31/05 3/31/06 ILEC Access line equivalents 734,000 742,300 + 1% DSL 49,300 75,300 +53% Long distance 302,400 327,100 + 8% CLEC Access line equivalents 438,000 454,100 + 4% DSL 31,600 38,500 +22% 13
Slide 14: Video Trials
Video Trials • FTTP enables triple-play via our network • Complete fiber build-out of subdivision ≈3,000 homes • Combination of FTTP, ADSL2+ and MPEG4 • Evolving with FTTX technology curve 14
Slide 15: Fixed Wireless Trial - CLEC
Fixed Wireless Trial - CLEC • Market trial in Wisconsin • Eliminates “last mile” loop from RBOC • Trialing high-speed data & VOIP • On our network from end-to-end 15
Slide 16: 2006 Outlook-TDS Telecom
2006 Outlook-TDS (Effective May 10, 2006) Telecom • ILEC • Operating revenues … $660 to $675 M • Dep. amort. & accretion … $135 M • Operating income … $145 to $160 M • CAPX … $105 to $125 M * • CLEC • Operating revenues … $230 to $240 M • Dep. amort. & accretion … $25 M • Operating income (loss) … $
Slide 17: Special Common Shares
Special Common Shares • Provides financial and strategic flexibility • May at some point exchange special shares for 19% of USM that TDS does not own • Dependent on market and other conditions 17
Slide 18: TDS: Excellent Prospects
TDS: Excellent Prospects • Full-service provider with established wireless and wireline operations • Strong business units • Well positioned in existing markets • Proven business strategies focused on customer satisfaction, network quality and competitive product offerings • Experienced management t
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