LeRoy T. Carlson, Jr. President and Chief Executive Officer UBS Warburg Seventh Annual Global...
-
Upload
amanda-kelley -
Category
Documents
-
view
217 -
download
0
Transcript of LeRoy T. Carlson, Jr. President and Chief Executive Officer UBS Warburg Seventh Annual Global...
![Page 1: LeRoy T. Carlson, Jr. President and Chief Executive Officer UBS Warburg Seventh Annual Global Telecom Conference November 11, 2002.](https://reader035.fdocuments.us/reader035/viewer/2022062409/5697bf741a28abf838c7f869/html5/thumbnails/1.jpg)
LeRoy T. Carlson, Jr.
President and Chief Executive Officer
UBS Warburg Seventh Annual Global Telecom Conference
November 11, 2002
![Page 2: LeRoy T. Carlson, Jr. President and Chief Executive Officer UBS Warburg Seventh Annual Global Telecom Conference November 11, 2002.](https://reader035.fdocuments.us/reader035/viewer/2022062409/5697bf741a28abf838c7f869/html5/thumbnails/2.jpg)
2
Safe HarborAll 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 and projections, which involve certain risks and uncertainties that could cause actual results to differ materially from those in the forward-looking statements. Important factors that may affect these forward-looking statements include, but are not limited to: the ability of USM to integrate the operations of the Chicago MTA; changes in the overall economy; changes in competition in the markets in which TDS operates; advances in telecommunications technology; changes in the telecommunications regulatory environment; changes in the value of investments; changes in the capital markets that could restrict the availability of financing; pending and future litigation; acquisitions /divestitures of properties and/or licenses; changes in customer growth rates, penetration rates, churn rates, roaming rates and the mix of products and services offered in TDS’s markets. Investors are encouraged to consider these and other risks and uncertainties that are discussed in documents filed by TDS and USM with the SEC.
![Page 3: LeRoy T. Carlson, Jr. President and Chief Executive Officer UBS Warburg Seventh Annual Global Telecom Conference November 11, 2002.](https://reader035.fdocuments.us/reader035/viewer/2022062409/5697bf741a28abf838c7f869/html5/thumbnails/3.jpg)
3
Proven Track Record
Creating businesses and optimizing operating performance
Increasing value through acquisitions, trades, divestitures and investments
Capital allocation determined by disciplined valuation process
Dedicated management teams and 10,300 employees
![Page 4: LeRoy T. Carlson, Jr. President and Chief Executive Officer UBS Warburg Seventh Annual Global Telecom Conference November 11, 2002.](https://reader035.fdocuments.us/reader035/viewer/2022062409/5697bf741a28abf838c7f869/html5/thumbnails/4.jpg)
4
![Page 5: LeRoy T. Carlson, Jr. President and Chief Executive Officer UBS Warburg Seventh Annual Global Telecom Conference November 11, 2002.](https://reader035.fdocuments.us/reader035/viewer/2022062409/5697bf741a28abf838c7f869/html5/thumbnails/5.jpg)
5
Eighth largest wireless service provider
Total licensed pops - 41.7 million
Serves 3.9 million customer units
Focused on exceptional customer service
Admirably low churn rate
Pervasive distribution… 3,200 points of presence
Extensive network ... 3,800+ cell sites
Ideally situated in recently acquired Chicago market
U.S. Cellular - Wireless
![Page 6: LeRoy T. Carlson, Jr. President and Chief Executive Officer UBS Warburg Seventh Annual Global Telecom Conference November 11, 2002.](https://reader035.fdocuments.us/reader035/viewer/2022062409/5697bf741a28abf838c7f869/html5/thumbnails/6.jpg)
6
Position as a regional carrier
Differentiate with exceptional customer service Network quality Broad distribution Dedicated people
Deploy CDMA 1XRTT technology
Strategically strengthen regional footprint
U.S. Cellular Strategy
![Page 7: LeRoy T. Carlson, Jr. President and Chief Executive Officer UBS Warburg Seventh Annual Global Telecom Conference November 11, 2002.](https://reader035.fdocuments.us/reader035/viewer/2022062409/5697bf741a28abf838c7f869/html5/thumbnails/7.jpg)
7
![Page 8: LeRoy T. Carlson, Jr. President and Chief Executive Officer UBS Warburg Seventh Annual Global Telecom Conference November 11, 2002.](https://reader035.fdocuments.us/reader035/viewer/2022062409/5697bf741a28abf838c7f869/html5/thumbnails/8.jpg)
8
Complementary footprint… stronger regional competitor
Chicago is dominant city in the Midwest
Proven strategy … potential for growth
Local ownership and experience
Synergies ... operating, marketing & technology
Chicago Market - Strengthening Our Strategic Presence
![Page 9: LeRoy T. Carlson, Jr. President and Chief Executive Officer UBS Warburg Seventh Annual Global Telecom Conference November 11, 2002.](https://reader035.fdocuments.us/reader035/viewer/2022062409/5697bf741a28abf838c7f869/html5/thumbnails/9.jpg)
9
Targeted advertising campaign
Expanded distribution
Additional salespeople
Compelling rate plans
Corporate sponsorships
Home-town positioning
Chicago 1XRTT conversion complete
Chicago Market Launch
![Page 10: LeRoy T. Carlson, Jr. President and Chief Executive Officer UBS Warburg Seventh Annual Global Telecom Conference November 11, 2002.](https://reader035.fdocuments.us/reader035/viewer/2022062409/5697bf741a28abf838c7f869/html5/thumbnails/10.jpg)
10
USM's ready to roll out in Chicago ... in time for the peak-selling holiday season.
Mayor Daley’s onboard ... as is USM’s new spokesperson …
Launch Date - Nov. 12
![Page 11: LeRoy T. Carlson, Jr. President and Chief Executive Officer UBS Warburg Seventh Annual Global Telecom Conference November 11, 2002.](https://reader035.fdocuments.us/reader035/viewer/2022062409/5697bf741a28abf838c7f869/html5/thumbnails/11.jpg)
11
Joan Cusak
![Page 12: LeRoy T. Carlson, Jr. President and Chief Executive Officer UBS Warburg Seventh Annual Global Telecom Conference November 11, 2002.](https://reader035.fdocuments.us/reader035/viewer/2022062409/5697bf741a28abf838c7f869/html5/thumbnails/12.jpg)
12
![Page 13: LeRoy T. Carlson, Jr. President and Chief Executive Officer UBS Warburg Seventh Annual Global Telecom Conference November 11, 2002.](https://reader035.fdocuments.us/reader035/viewer/2022062409/5697bf741a28abf838c7f869/html5/thumbnails/13.jpg)
13
2002 Outlook - U.S. Cellular
• Net additions - 280,000 to 300,000
• Total revenues - $2.2 B
• EBITDA - $640 to $660 M
• CAPX - $720 to $740 M
![Page 14: LeRoy T. Carlson, Jr. President and Chief Executive Officer UBS Warburg Seventh Annual Global Telecom Conference November 11, 2002.](https://reader035.fdocuments.us/reader035/viewer/2022062409/5697bf741a28abf838c7f869/html5/thumbnails/14.jpg)
14
![Page 15: LeRoy T. Carlson, Jr. President and Chief Executive Officer UBS Warburg Seventh Annual Global Telecom Conference November 11, 2002.](https://reader035.fdocuments.us/reader035/viewer/2022062409/5697bf741a28abf838c7f869/html5/thumbnails/15.jpg)
15
7th largest independent U.S. telco
Rural company status
714,000 access line equivalents
120 ILEC sales and service locations
118,000 Internet service accounts
189,000 LD (resale) customers
Vertical services
TDS Telecom - ILEC
![Page 16: LeRoy T. Carlson, Jr. President and Chief Executive Officer UBS Warburg Seventh Annual Global Telecom Conference November 11, 2002.](https://reader035.fdocuments.us/reader035/viewer/2022062409/5697bf741a28abf838c7f869/html5/thumbnails/16.jpg)
16
TDS Metrocom - CLEC
Facilities-based startup in S. Wisconsin, N. Illinois and S. Michigan
206,000 access line equivalents ... launched in June 1998
Targeted selling Small and medium businesses“Communication-intensive” residential
Focus on one RBOC for provisioning
![Page 17: LeRoy T. Carlson, Jr. President and Chief Executive Officer UBS Warburg Seventh Annual Global Telecom Conference November 11, 2002.](https://reader035.fdocuments.us/reader035/viewer/2022062409/5697bf741a28abf838c7f869/html5/thumbnails/17.jpg)
17
![Page 18: LeRoy T. Carlson, Jr. President and Chief Executive Officer UBS Warburg Seventh Annual Global Telecom Conference November 11, 2002.](https://reader035.fdocuments.us/reader035/viewer/2022062409/5697bf741a28abf838c7f869/html5/thumbnails/18.jpg)
18
Grow and protect core ILEC businessProvide strong local presence Provide high-quality services at competitive pricesBundle products and grow vertical service penetration
Aggressively grow CLEC businessGrow into carefully chosen mid-size and suburban markets in the Midwest CLEC to leverage ILEC strengths Emphasis on facilities-based model
TDS Telecom Strategy
![Page 19: LeRoy T. Carlson, Jr. President and Chief Executive Officer UBS Warburg Seventh Annual Global Telecom Conference November 11, 2002.](https://reader035.fdocuments.us/reader035/viewer/2022062409/5697bf741a28abf838c7f869/html5/thumbnails/19.jpg)
19
2002 Outlook - TDS Telecom(Ex. MCT and TSNH)
• ILEC – Operating revenues - $620 to $630 M– EBITDA - $290 to $300 M– CAPX - $125 to $135 M
• CLEC– Operating revenues - $170 to $180 M– EDITDA - $(30) to $(35) M– CAPX - Approx. $50 to $60 M … primarily MI.
build out
![Page 20: LeRoy T. Carlson, Jr. President and Chief Executive Officer UBS Warburg Seventh Annual Global Telecom Conference November 11, 2002.](https://reader035.fdocuments.us/reader035/viewer/2022062409/5697bf741a28abf838c7f869/html5/thumbnails/20.jpg)
20
*w/o gains... w/o Aerial; as of Dec. 31, 2001
Financial Operating Performance Five-Year CAGR*
Revenues 17.12 %
EBITDA 18.01 %
![Page 21: LeRoy T. Carlson, Jr. President and Chief Executive Officer UBS Warburg Seventh Annual Global Telecom Conference November 11, 2002.](https://reader035.fdocuments.us/reader035/viewer/2022062409/5697bf741a28abf838c7f869/html5/thumbnails/21.jpg)
21
3 Qtr 2002 Operating Results
Operating Revenues ($millions)($millions)
USM $597.6 +19%Telecom $204.3 +17%
$801.9 +19%
Operating Cash Flow ($millions)($millions)USM $167.6 (1%)Telecom $ 71.8 +13%
$239.4 + 2%
USM Q3 ‘02Q3 ‘02 Q3 ‘01Q3 ‘01
Churn 1.9% 1.8%Retail ARPU $38.95 $36.06MOU 327 230
TDS Telecom Q3 ‘02Q3 ‘02 Q3 ‘01Q3 ‘01
Access line equivalents 987,500 842,700ISP customers 143,100 124,800DSL customers 18,400 6,900
![Page 22: LeRoy T. Carlson, Jr. President and Chief Executive Officer UBS Warburg Seventh Annual Global Telecom Conference November 11, 2002.](https://reader035.fdocuments.us/reader035/viewer/2022062409/5697bf741a28abf838c7f869/html5/thumbnails/22.jpg)
22
Marketable Securities• Deutsche Telekom (DTE) - 131,461,861 ordinary shares
@ $0 tax basis
• Vodafone (VOD) - 12,945,915 shares 2,700,545 shares at TDS10,245,370 shares at USM
• Rural Cellular Corporation (RCCC) - 719,396 shares348,514 shares at TDS370,882 shares at USM
• VeriSign (VRSN) - 2,490,357 shares at TDS
![Page 23: LeRoy T. Carlson, Jr. President and Chief Executive Officer UBS Warburg Seventh Annual Global Telecom Conference November 11, 2002.](https://reader035.fdocuments.us/reader035/viewer/2022062409/5697bf741a28abf838c7f869/html5/thumbnails/23.jpg)
23
Monetization Summary
DT Vodafone VeriSign
Entity TDS USM TDS
Date July/Aug. ‘02 5/16/02 5/7/02
No. Shares subj. to Prepaid Forward 45,492,172 10,245,370 2,361,333
Avg. Floor Price Per Share $11.36 $15.60 $8.82
Avg. Cap Price Per Share $13. 63 $23.68 $11.46
Amt. Advanced $501.6 M $159.9 M $18.9 M
Due at Maturity $516.9 M $159.9 M $20.8 M
Initial Discount ---- --- 9.09%
Qtly Interest Payments 90-day LIBOR 90-day LIBOR None
+ 50 BPs + 50 BPs
![Page 24: LeRoy T. Carlson, Jr. President and Chief Executive Officer UBS Warburg Seventh Annual Global Telecom Conference November 11, 2002.](https://reader035.fdocuments.us/reader035/viewer/2022062409/5697bf741a28abf838c7f869/html5/thumbnails/24.jpg)
24
Grow revenues market growth (at least 15% annually)
Return on capital WACC
Valuation/shareholder returns comparable companies
Maintain an “A-” rating
Financial Objectives
![Page 25: LeRoy T. Carlson, Jr. President and Chief Executive Officer UBS Warburg Seventh Annual Global Telecom Conference November 11, 2002.](https://reader035.fdocuments.us/reader035/viewer/2022062409/5697bf741a28abf838c7f869/html5/thumbnails/25.jpg)
25
Excellent Prospects
• Fundamentals - Full-service provider with established wireless and wireline operations
Well positioned in existing markets.
• Value Generation - Revenue growth and margin expansion
• Strong balance sheet providing competitive advantage, flexibility and staying power
• Sum-of-parts valuation ... greater than current price
![Page 26: LeRoy T. Carlson, Jr. President and Chief Executive Officer UBS Warburg Seventh Annual Global Telecom Conference November 11, 2002.](https://reader035.fdocuments.us/reader035/viewer/2022062409/5697bf741a28abf838c7f869/html5/thumbnails/26.jpg)
26
Investment Highlights
Strong Balance Sheet
Marketable Securities
Proven Strategic Model
Experienced Management Teams
Competitive Advantage
SAFETY VISIBILITY
LIQUIDITY
Forecastable Business Mix
Solid Cash Flows
![Page 27: LeRoy T. Carlson, Jr. President and Chief Executive Officer UBS Warburg Seventh Annual Global Telecom Conference November 11, 2002.](https://reader035.fdocuments.us/reader035/viewer/2022062409/5697bf741a28abf838c7f869/html5/thumbnails/27.jpg)
27