Telephone And Data Systems, Inc. · NYSE:TDS
Telephone And Data Systems — Proxy Contest (November 2018)
27 slides from Telephone And Data Systems's proxy contest presentation, Nov 9, 2018
Slide 1: Shareholder Engagement 2018 Update
November 9, 2018 Shareholder Engagement 2018 Update Our mission is to provide outstanding communications services to our customers and meet the needs of our shareholders, our people and our communities
Slide 2: Safe Harbor Statement
Safe Harbor Statement 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, and expectations. These statements are based on current estimates, proje
Slide 3: Our Company
Our Company • 6 million connections • 9,600 • Controlled company with • Conservative (rural and suburban) employees focus on long-term value financing strategy creation U.S. Cellular (NYSE: USM) (82% owned) (wholly owned) (wholly owned) Wireless Broadband, video, and voice hosted & managed services
Slide 4: Operations
Operations @ TDSheadquarters, Chicago, IL EUS. Cellular operations Il Wireline operations Il Cable operations @ HMS operations
Slide 5: TDS - Strategic Priorities
TDS - Strategic Priorities • Manage portfolio of businesses to ensure long-term growth and sustainability • Create long-term shareholder value • Invest in our business to improve revenues and returns • Investments in 5G (Wireless) and in Cable and Fiber initiatives • Return value to shareholders thr
Slide 6: Executing on Strategic Priorities
Executing on Strategic Priorities Balancing customer growth and profitability • Protect and grow our subscriber base • Sequential improvement in gross and net additions throughout 2018 • Drive revenue growth • Returned to revenue growth in 2018 due to larger customer base, unlimited plans, continued
Slide 7: Operating results
Operating results (1) ($ in millions) % Nine months ended 2018 2017 Change Total operating revenues $2,916 $2,862 2% System operations expense 566 549 3% Cost of equipment sold 716 749 (4%) Selling, general and administrative expenses 1,014 1,041 (2%) Total cash expenses (2) 2,296 2,339 (2%) Adjuste
Slide 8: Executing on Strategic Priorities
Executing on Strategic Priorities Wireline and Cable share a common strategy to grow high- margin broadband services, bundled with video and voice services to reduce churn • Wireline • Executing fiber build program both in and out of the current ILEC footprint • Investments will provide future growt
Slide 9: Operating results
Operating results (1) ($ in millions) % Nine months ended 2018 2017 Change Wirelines revenues $526 $538 (2%) Cable revenues 170 152 12% Total operating revenues 695 690 1% Wireline expenses 451 457 (1%) Cable expenses 174 145 20% Total operating expenses 624 601 4% Adjusted EBITDA (3) 236 243 (3%) C
Slide 10: Corporate Governance Outreach
Corporate Governance Outreach Goal: Engage in dialogue with our shareholders regarding corporate governance practices. 10
Slide 11: 2018 Corporate Governance Updates
2018 Corporate Governance Updates • Refreshing the Board • Active process in place for 2019 • James W. Butman (President and CEO of TDS Telecom) elected to Board, replacing David A. Wittwer in 2018 • Kimberly D. Dixon elected to Board, replacing Herbert S. Wander in 2017 • Annual succession planning
Slide 12: U.S. Cellular's Customer-Focused Corporate Culture Helps Drive Competitive Advantage
U.S. Cellular’s Customer-Focused Corporate Culture Helps Drive Competitive Advantage • U.S. Cellular is TDS’ largest business unit, approximately 77% of total revenues and 60% of all employees • Delivering an exceptional customer experience is at the core of U.S. Cellular’s strategy and we believe t
Slide 13: An Engaged Workforce is TDS' Competitive Advantage
An Engaged Workforce is TDS’ Competitive Advantage TDS Telecom • Employee Resource Groups (ERGs) based on employees’ interests, backgrounds and personal situations build small, connected communities within the workforce • TDS Telecom currently has four ERGs: • Patriot • Intern • Achieving a Better L
Slide 14: 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 15: 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, exp
Slide 16: 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 17: Appendix
Appendix: 17
Slide 18: Board Tenure
Board Tenure Independent (I)/ Years of Service Committee Non-Independent (N) Clarence A. Davis I 9 Audit Kimberly D. Dixon I 1 Compensation; Technology Advisory Group George W. Off I 21 Audit; Compensation; Technology Advisory Group Christopher D. O’Leary I 12 Audit; Compensation; Technology Advisor
Slide 19: Biographical Information on TDS Independent Directors
Biographical Information on TDS Independent Directors 19
Slide 20: Clarence A. Davis
Clarence A. Davis Management Experience Board Experience Significant leadership and operational • Current or former director of multiple experience in multiple industries, including boards, including Gabelli Capital Assets technology (CEO—Nestor, Inc.), accounting Fund, Gabelli ESG Fund, and GDL Fun
Slide 21: Kimberly D. Dixon
Kimberly D. Dixon Management Experience Board Experience Significant leadership and operating and • Current member of a privately- financial management experience at FedEx held board Office and Sprint, including experience in • Former board member of consumer and business marketing, sales and severa
Slide 22: Christopher D. O'Leary
Christopher D. O’Leary Management experience Board Experience Extensive leadership experience as Chief Former Board member of Newell Operating Officer International of General Rubbermaid, and member of its Mills (2006-2016); significant roles with Nominating/Governance Committee and leading consumer
Slide 23: George W. Off
George W. Off Management Experience Board Experience Substantial leadership and operational Current or former member of multiple boards, management experience for marketing including The Retail Equation, Infinian Mobile services firm (Co-founder and CEO, Catalina Commerce & Analytic Solutions, Catal
Slide 24: Mitchell H. Saranow
Mitchell H. Saranow Management Experience Board Experience • Significant leadership experience in • Public board experience includes manufacturing (Founder--Fluid Management, Navigant Consulting, Telular SureTint Technologies), cable (Co-founder, Mid- Corporation, North American Atlantic CATV), food
Slide 25: Gary L. Sugarman
Gary L. Sugarman Management Experience Board Experience • More than 25 years of leadership and Current board member of OTELCO. management experience, including traditional Former member of multiple telcos (Co-founder and CEO, Mid-Maine telecommunications boards, including Communications PrairieWave
Slide 26: Adjusted OIBDA and Adjusted EBITDA Reconciliation
Adjusted OIBDA and Adjusted EBITDA Reconciliation (1) Nine months ended Sept 30, 2018 Nine months ended Sept 30, 2017 Total Total TDS TDS U.S. Telecom U.S. Telecom ($ in millions) Cellular Wireline Cable (4) Cellular Wireline Cable (4)(5) Net income (loss) (GAAP) $143 N/A N/A $73 $(259) N/A N/A $58
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Telephone & Data Systems — Proxy Contest (November 2018) on 6ix