Telephone And Data Systems, Inc. · NYSE:TDS
Telephone And Data Systems — Investor Presentation (November 2019)
27 slides from Telephone And Data Systems's investor presentation, Nov 7, 2019
Slide 1: Shareholder Engagement 2019 Update
Slide 2: Safe Harbor Statement
Safe Harbor Statement All information set forth in this presentation about Telephone and Data Systems, Inc. including its subsidiaries U.S. Cellular and TDS Telecom (the "company"), except historical and factual information, represents forward-looking statements. This includes all statements about t
Slide 3: Our Company
Our Company ¢ 6 million connections Tbs ¢ 9,400 ¢ Controlled company with ¢ Strong Balance (rural and suburban) employees focus on long-term value Sheet creation - | FK US.Cellular U.S. Cellular (NYSE: USM) Moy (82% owned) ©)OneNeck Wireless iFsouyTions (wholly owned) (wholly owned) Hosted & managed
Slide 4: Multi-Stakeholder Strategic Priorities
Multi-Stakeholder Strategic Priorities « Manage portfolio of businesses to ensure long-term growth and sustainability for the benefit of our customers, employees, communities, shareholders and debt holders * Create long-term shareholder value — Invest in our business to improve competitive position
Slide 5: Corporate Governance Outreach
Corporate Governance Outreach Goal: Create a cycle of dialogue and feedback with our shareholders, management and the Board to facilitate improvement of corporate governance practices.
Slide 6: 2019 Corporate Governance Updates
2019 Corporate Governance Updates ¢ Refreshing the Board — Since 2016 average Board tenure reduced from 19 years to 16 years; average Board tenure for independent directors reduced from 17 years to 10 years * 2019 - Wade Oosterman elected to Board, replacing Mitchell H. Saranow * 2018 - James W. But
Slide 7: 2019 Compensation Updates
2019 Compensation Updates Performance-based stock units align pay and performance — TDS Telecom began issuing to senior-level employees in 2019 * Metrics are Total Revenue, Adjusted EBITDA Margin and Return on Capital (“ROC”) — TDS and U.S. Cellular continue to issue performance-based units * TDS me
Slide 8: U.S. Cellular's Customer-Focused Corporate Culture
U.S. Cellular’s Customer-Focused K US. Cellular Corporate Culture Helps Drive Competitive Advantage « U.S. Cellular represents 59% of TDS’ workforce * Delivering an exceptional customer experience is at the core of U.S. Cellular’s strategy and we believe that Associate Engagement is critical to deli
Slide 9: TDS Telecom's Employee Resource Groups foster a more inclusive workforce
TDS Telecom’s Employee Resource Groups foster a more inclusive workforce and improves its Culture TDS Telecom represents 30% of TDS’ workforce * Employee Resource Groups (ERGs) based on employees’ interests, backgrounds and personal situations build small, connected communities within the workforce
Slide 10: 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 of each committee to re
Slide 11: Ongoing Board Refreshment Process
Ongoing Board Refreshment Process Developed program in 2013 Annual Board of Directors self-assessment — Evaluates performance and effectiveness of the Board — Discusses matters related to board meetings, board composition, committees, board oversight and other matters CGNC monitors skills, experienc
Slide 12: Well-Functioning Board of Directors
Well-Functioning Board of Directors ¢ Engaged Board, taking decisive action as needed ¢ Board discussions are open, frank and substantive ¢ Independents work collaboratively and constructively with controlling shareholders ¢ Controlling shareholders value board expertise, continuity and knowledge ¢
Slide 13: Business Update
Business Update
Slide 14: U.S. Cellular Executing on Strategic Priorities
U.S. Cellular 4K US. Cellular Executing on Strategic Priorities Balancing customer growth and profitability * Protect and grow our subscriber base * Drive revenue growth * Aggressive, yet economical, promotions and competitive plan pricing — Customers continue to like the simplicity of Total Plans..
Slide 15: U.S. Cellular Operating results
U.S. Cellular Operating results K US.Cellular (S$ in millions) Nine months ended % Change Total operating revenues $2,970 $2,916 2% System operations expense 568 566 - Cost of equipment sold 724 716 1% Selling, general and administrative expenses 1,027 1,014 1% Total cash expenses ') 2,319 2,296 1%
Slide 16: TDS Telecom Executing on Strategic Priorities
TDS Telecom Executing on Strategic Priorities Me Wireline and Cable share a common strategy to grow high-margin broadband services, bundled with video and voice services to reduce churn ¢ Wireline — Executing fiber build program both in and out of the current ILEC footprint * Investments will provid
Slide 17: TDS Telecom Operating results
TDS Telecom Operating results Me (S$ in millions) Nine months ended % Change Wireline revenues $512 $526 (3%) Cable revenues 184 170 8% Total operating revenues 695 695 - Wireline expenses 435 451 (4%) Cable expenses 175 174 1% Total operating expenses 609 624 (2%) Adjusted EBITDA 238 236 1% Capital
Slide 18: Biographical Information on TDS Independent Directors
Biographical Information on TDS Independent Directors
Slide 19: Board Tenure
Board Tenure Independent (I)/Non- Years of Service Committee Independent (N) Clarence A. Davis Kimberly D. Dixon | 2 George W. Off i 22 Christopher D. O’Leary | 13 Gary L. Sugarman i} 10 Wade Oosterman i te) James W. Butman N a LeRoy T. Carlson, Jr. N 51 Letitia G. Carlson N 23 Prudence E. Carlson N
Slide 20: Clarence A. Davis
Clarence A. Davis Management Experience Significant leadership and operational experience in multiple industries, including technology (CEO—Nestor, Inc.), accounting (CFO, COO--American Institute of Certified Public Accountants), manufacturing, media/broadcasting, agriculture Business Expertise Subs
Slide 21: Kimberly D. Dixon
Kimberly D. Dixon Management Experience Significant leadership and operating and financial management experience at FedEx Office and Sprint, including experience in consumer and business marketing, sales and distribution Business Experience Substantial expertise in sales, marketing and retail Operat
Slide 22: Christopher D. O'Leary
Christopher D. O’Leary Management experience Extensive leadership experience as Chief Operating Officer International of General Mills (2006-2016); significant roles with leading consumer packaged goods providers, including PepsiCo Business expertise ¢* More than 30 years of experience in consumer r
Slide 23: George W. Off
George W. Off Management Experience Substantial leadership and operational management experience for marketing services firm (Co-founder and CEO, Catalina Marketing Corporation) and multinational manufacturer (CEO, Checkpoint Systems) Business Expertise ¢ — Significant business expertise in marketin
Slide 24: Wade Oosterman
Wade Oosterman Management Experience Substantial executive leadership and marketing experience in the telecommunications industry (Vice Chair and Group President of BCE Inc. and Bell Canada; Chief Marketing and Brand Officer for TELUS Corp.; and Executive VP Sales and Marketing for TELUS Mobility) B
Slide 25: Gary L. Sugarman
Gary L. Sugarman Management Experience ¢ More than 25 years of leadership and management experience: ¢ — Including traditional telcos (Co-founder and CEO, Mid-Maine Communications), network infrastructure providers (Exec. Chairman and Investor Veroxity Technology Partners), financial technology (Exe
Slide 26: Adjusted OIBDA and Adjusted EBITDA Reconciliation
Adjusted OIBDA and Adjusted EBITDA Reconciliation Nine months ended Sept 30, 2019 Nine months ended Sept 30, 2018 Total Total us. TDS u TDs (Sin millions) Cellular Wireline Cable Telecom Cellular Wireline Cable Telecom Net income (GAAP) S115 N/A N/A $74 $143 N/A N/A $73 ‘Add back: Income tax expense
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