34 slides from Telephone And Data Systems's proxy contest presentation, Nov 4, 2015
Slide 1: Shareholder Engagement
Shareholder Engagement
Slide 2: Safe Harbor Statement
Safe Harbor Statement Allinformation set forth inthis presentation, except historical and factual information, represents forward-looking statements, This includes all statements about the companys plans, beliefs, estimates, and expectations, These statements are based on current ‘Estimates, project
Slide 3: Corporate Governance Outreach
Corporate Governance Outreach Goal: Engage in dialogue with our shareholders regarding corporate governance practices.
Slide 4: Diversified Communications Company
Diversified Communications Company * TDS provides communications products and services primarily in rural and suburban markets, through its two principal business units Fuscamme U.S. Cellular (84%-owned) wireless, principally postpaid (NYSE:USM) 4 TDS Telecom (wholly owned) - broadband, TV and voice
Slide 5: Operations
Operations
Slide 6: TDS Balanced Capital Allocation Strategy
TDS Balanced Capital Allocation Strategy + Balanced capital allocation strategy ‘+ Investin the business (M&A) - 75% of available resources + Retum value to shareholders - 25% of available resources ‘+ $250 million TDS stock repurchase program + $201 million remaining + No repurchase activity in 201
Slide 7: TDS - Executing on Strategic Imperatives
TDS - Executing on Strategic Imperatives + Invest in our businessto improve returns * Significant strategic investments at U.S. Cellular are beginning to pay off in terms of improved operating and financial results ‘+ Investments in cable and Hosted and Managed Services (HMS) growth initiatives * Ca
Slide 8: Delivering Value to Shareholders
Delivering Value to Shareholders + TDS - 41 years of consecutive dividend increases + June 25, 2013 - U.S. Cellular paid $5.75 per share spedal cash dividend Annual Dividends: Shares Repurchased Per TDS Share ee TOS must Reroaty apes re eet 0 705 ok ese. epurcases 00
Slide 9: Price Performance since turnaround - 9/10/14
Price Performance since turnaround - 9/10/14 (when U.S, Cellular announced its third consecutive month of pstpaid customer growth) PEEESEEEEESEEEEEEE
Slide 10: TDS Board Continues to Take Decisive Action to Improve Performance
TDS Board Continues to Take Decisive Action to Improve Performance To address U.S. Cellular’s position in the marketplace: * Divested Chicago market; paid dividend * Launched iPhone; offers a competitive array of devices * New billing system implemented and providing new capabilities * 4G/LTE networ
Slide 11: TDS Board Continues to Take Decisive Action to Improve Performance
TDS Board Continues to Take Decisive Action to Improve Performance To address wireline’s secular decline: + Agaressively deploying fiber where economically feasible ‘+ Expanding into adjacent businesses ~ cable and hosted and managed services + Successful cost control “otal Opersting Revenues
Slide 12: Increasing Shareholder Engagement
Increasing Shareholder Engagement ‘+ Initiation of Corporate Governance Outreach * Initial calls - Jan/Feb 2015 + Added Executive Summary to proxy statement + Discussed outreach findings with Corporate Governance and Nominating Committee ‘+ In May 2015 independent directors spoke with shareholders r
Slide 13: Corporate Governance Practice Highlights
Corporate Governance Practice Highlights + Annual election of all directors + Annual "Say on Pay” vote + Independent directors meet separately + Policy prohibiting pledging and hedging of company shares + Charter and bylaws can be amended by a simple majority vote + Authority to retain independent a
Slide 14: Compensation:
Compensation: ‘TDS’ Compensation Philosophy ~ Compensation practices should be transparent and reflect a commitment to align compensation with business strategy
Slide 15: Compensation Highlights
Compensation Highlights * Compensation Committee comprised solely of independent directors (Wander [Chairman], O'Leary, Sugarman and Off) ‘+ Compensation programs designed to motivate executive officers to actin the long-term interests of TDS, + Compensation Committee utilizes services of both an in
Slide 16: Board Structure:
Board Structure: The TDS Board seeks to optimize performance by assembling a diverse group of directors with deep experience and expertisein a broad array of industries relevant to its businesses and across multiple business disciplines. Itis expected that ll Board members contribute equally and con
Slide 17: Well-Functioning Board of Directors
Well-Functioning Board of Directors + Engaged Board, taking decisive action + Board discussions are open, frank and critical Ability to work collaboratively and constructively with controlling shareholder + Controlling shareholder values continuity and institutional knowledge ‘+ Independent director
Slide 18: Board Tenure
Board Tenure | i
Slide 19: Corporate Governance and Nominating Committee
Corporate Governance and Nominating Committee Walter Carlson (Chair), Ted Carlson, Mitch Saranow ‘+ Evaluate Board composition and contributions at least annually; succession planning for Board. Oversee Board self-assessment process and review findings to implement improvements. ‘+ Review selection
Slide 20: Refreshment process
Refreshment process + Developed program in 2013 ‘+ annual Board of Directors self-assessment + Evaluating performance and effectiveness of the Board + Discusses matters relatedto board meetings, board composition, committees, board oversight and other matters ‘+ CGNC monitors skills, experiences and
Slide 21: Shareholders' Rights:
Shareholders’ Rights: As a controlled company, TDS has worked to follow best practices in the areas of corporate governance and shareholders’ rights where they align with the controlling shareholders’ long-term strategy for the business.
Slide 22: Capital Structure
Capital Structure + Since the IPO, TDS has had dual classes of shares. * In 2012, shareholders approved a recapitalization, and the aggregate voting power of the Series A Common Shares was capped at 56.7%. ISS and Glass Lewisrecommended shareholder approval of this recapitalization. + TDS has clearl
Slide 23: Audit Practices
Audit Practices
Slide 24: Strong Audit Committee Practices
Strong Audit Committee Practices ‘+ Scores the highest possible score in terms of audit quality in ISS’ ‘Corporate Governance QuickScore ‘+ Audit committee comprised solely of independent directors (Off [Chair], Saranow, Davis, Wander) ‘+ Two financial experts (Saranow and Davis) with significant ac
Slide 25: Appendix: Independent Directors
Appendix: Independent Directors
Slide 26: Clarence A. Davis
Clarence A. Davis Management Experience Board Experience + Significant leadership and ‘Currert or former director of multiple ‘operational experience in multiple boards, including Gabelli Capital industries, including technology Assets Fund, Gabelli SI Green Fund, (CEO—Nestor, Inc), accounting ‘and
Slide 27: Christopher D. O'Leary
Christopher D. O'Leary Management experience Board Experience + Extensiveleadership experienceas + Current Soard member of Newell ‘Chief Operating Officer— Rubbermaid, and member of its International of General Mills since NNominating/Govemance and its 2006; significant roles with leading Organizati
Slide 28: George W. Off
George W. Off Management Experience + Substantial executive management ‘and operational experience for marketing services firm (Co- founder and CEO, Catalina Mariceting Corporation) and multinational manufacturer (CEO, ‘Checkpoint Systems) Business Emertise + Significant business expertise in market
Slide 29: Mitchell H. Saranow
Mitchell H. Saranow Management Experience Board Experience © Significant leadership experience in + Public board experience includes manufacturing (Founder--Fluid Navigant Consulting, Telular Management, SureTint Technologies), ‘Corporation, North American ‘cable (Co-founder, Mid-Atlantic CATV), ‘Sc
Slide 30: Gary L. Sugarman
Gary L. Sugarman Management Experience Board Experience "More than 25 yearsof management —* Current board member of OTELCO and ‘experience, including traditional telos LCT. Former member of multiple (Co-founder and CEO, Mid-Maine telecommunications boards, including Communications; various operating
Slide 31: Herbert S. Wander
Herbert S. Wander Management experience ‘IDS Board history "More than 40 yearsof businesslaw + Director since 1368 ‘experience, including comorate + Audit Committee member for morethan governance and acquisitions; 15 years ‘appointed by SEC chair to co-chair + TDS Compensation Committee chair for ‘S
Slide 32: Operating Cash Flow and Adjusted EBITDA
Operating Cash Flow and Adjusted EBITDA
Slide 33: Footnotes on Estimated Results and Non-GAAP Measures
Slide 34: Slide 34