Array Digital Infrastructure, Inc. (AD) Earnings Call Transcript & Summary

Hello and welcome to the Annual Meeting of Shareholders of United States Cellular Corporation. Please note that today's meeting is being recorded. It is now my pleasure to turn today's meeting over to Jane McCahon, Corporate Secretary of U.S. Cellular. Ms. McCahon, the floor is yours.

Thank you, Andrew, and good morning, everyone. I want to welcome you to the virtual webcast of the 2020 Annual Meeting of Shareholders. We believe in engaging with our shareholders, and hope that this virtual meeting will maximize the participation of shareholders today, while conducting the meeting in the safest manner for all. Thank you very much to those who are participating today. I call your attention to the agenda and rules of conduct set forth for this meeting and available to each shareholder on the left side of the meeting center screen. A representative from Computershare, who will be acting as the Inspector of Election for this meeting is also in attendance, along with our entire Board of Directors. If you click on the annual meeting materials, you'll be brought to our proxy vote page, where you can access the annual report, proxy statement and other proxy-related materials. And if you have not voted or wish to change your vote, you may do so now by clicking on the link provided online. Any shareholder who has already voted and does not want to change their vote, need not take any further action. You may also submit questions online, by clicking on the dialogue icon in the upper right corner of the meeting center screen. We will review these questions and provide answers to those we feel pertinent to the meeting after Ken Meyers' business update. And now I'd like to turn the call over to Ted Carlson, Chairman of U.S. Cellular.

Thank you, Jane, and good morning, ladies and gentlemen. I am LeRoy T. Carlson, Jr., a Director and Chairman of the company. I will be chairing the meeting. At this time, I call the meeting to order. I'd like to thank everyone on the webcast for participating in this meeting. It is now -- let's see, Jane, what time is it? 8:35. It is now 8.35 on May 19, 2020, and the polls are open for voting on the matters before this annual meeting, as set forth in the notice of annual meeting, and proxy statement, and on the agenda for this meeting. All of our director nominees are present and participating in this webcast. These are: myself; Walter C.D. Carlson; J. Samuel Crowley; Ronald E. Daly; Harry J. Harczak, Jr.; Michael S. Irizarry; Gregory P. Josefowicz; Kenneth R. Meyers; Peter L. Sereda; Cecelia D. Stewart; and Kurt B. Thaus. The Notice of Annual Meeting was distributed on April 9, 2020. We have appointed Joseph Roache of Computershare Trust company as Inspector of Election, and I've been advised that a majority of the voting power of the company's issued and outstanding shares and of each class is represented at today's meeting, and that a quorum is present and the formal business of the meeting may proceed. PricewaterhouseCoopers, our independent registered public accountant, is also attending through this webcast. Amy Graves of PricewaterhouseCoopers has advised me that they have no formal statement to make and will be available to answer any appropriate questions during the Q&A portion at the end of the meeting. In the interest of time, we will dispense with the reading of the Notice of the Meeting and the affidavit of mailing of the notice. We will also dispense with the reading of the minutes of the Annual Meeting of Shareholders held on May 21, 2019. The Secretary has copies of these documents, if any shareholder would like to contact her. The Board of Directors has set March 26, 2020, as the record date for this shareholders' meeting. By order of the Board of Directors of the company, management of the company distributed a Notice of Annual Meeting and proxy statement to shareholders of the company. Since the company was not notified in advance of the intention of any shareholder to nominate a director or to present a motion at this annual meeting in accordance with the bylaws, the only matters which may properly come before the meeting involve a vote of shareholders -- involving a vote of shareholders, are those which were set forth in the Notice of Annual Meeting and proxy statement. The 3 proposals in the Notice of Annual Meeting and proxy statement are: first, election of directors; second, ratification of auditors; and third, advisory vote on executive compensation. The first item of business is the election of directors nominated by the Board of Directors. As indicated in the Notice of Annual Meeting and proxy statement, 3 directors will be elected by the holders of common shares, and 8 directors will be elected by Telephone and Data Systems, Inc., as the sole holder of Series A common shares. The Board of Directors has nominated J. Samuel Crowley; Gregory P. Josefowicz; and Cecelia D. Stewart, for election as directors by the holders of common shares. The Board of Directors has also nominated LeRoy T. Carlson, Jr.; Walter C.D. Carlson; Ronald E. Daly; Harry J. Harczak, Jr.; Michael S. Irizarry; Kenneth R. Meyers; Peter L. Sereda; and Kurt B. Thaus for election as directors by the holder of Series A common shares. Michael S. Irizarry is joining the Board to fill the vacancy that resulted from Steven T. Campbell's retirement from the Board. We want to thank Steven T. Campbell for his exemplary service on the Board. We also welcome Michael S. Irizarry, and look forward to working with him to continue to provide outstanding service to our customers and to build value for our shareholders. The Board of Directors unanimously recommends a vote for each of the nominees for election as directors. The second item of business is the proposal to ratify the selection of PricewaterhouseCoopers, LLP, as the company's independent registered public accountants for 2020. This proposal will be voted on by the Series A common shares and common shares voting as a group. The Board of Directors unanimously recommends a vote for this proposal. The third item of business is the proposal to approve on an advisory basis, the compensation of our named executive officers. This item of business was proposed by the Board of Directors pursuant to the requirements of the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010. This proposal will be voted on by the holders of Series A common shares and common shares voting as 1 group. The Board of Directors unanimously recommends a vote for this proposal. It is now 8:38 on May 19, 2020, and the polls are closed for voting. Since the inspectors have not informed me of any changes in outcome on any of the proposals, we will proceed with the announcement of the voting results at this time. And Jane, you are in the room there, so, there have been, as I just said, no information about any changes. Is that correct?

That's correct, Ted.

Okay. With respect to the election of the directors, each of them received a substantial majority of the votes of the class of stock voting for such director. Accordingly, each of such persons has been elected as a Director of United States Cellular Corporation for a term expiring at the 2021 Annual Meeting of Shareholders or until his or her successor shall have been elected and qualified. The proposal to ratify the selection of PricewaterhouseCoopers LLP, as independent registered public accountants for 2020 has received the affirmative vote of holders of a substantial majority of the combined voting power of the Series A common shares and common shares. This proposal is therefore, also approved. The proposal to approve on an advisory basis, the compensation of our named executive officers has received the affirmative vote of holders of a substantial majority of the combined voting power of the Series A common shares and common shares. This proposal is therefore, also approved. The inspectors will tally any additional votes received after the commencement of this meeting and prior to the closing of the polls, and furnish a written report of the final vote count with respect to the matters voted on today, which will be included in the minutes of the meeting. These voting results will be reported on a Form 8-K that will be filed within 4 business days of today. Before adjourning, I want to thank Paul-Henri Denuit, who joined the Board in 1988; and James Barr III, who joined the Board in 2009, and who are both stepping down as Director Emeritus. We want to thank them both for the many years of service and significant contributions as both Board members and Director Emeriti. Since there is no further formal business to come before this meeting, the meeting is adjourned. And I would now like to ask Ken Meyers, President and CEO of U.S. Cellular, to provide a brief business update. Ken?

Thank you, Ted. Good morning, and thank you for your time today. Typically, I would spend a few minutes talking about the accomplishments of U.S. Cellular during the last year. However, with all that has changed since year-end, those comments do not seem to have the same level of relevance as they may have had in the past. So instead, I thought I would take this time to tell you what's -- about what's going on now at U.S. Cellular. We are working together to serve our customers and communities, while taking care of our associates. Before I begin, I need to remind everyone that my comments may contain statements about expected future results and -- expected future events and financial results that are forward-looking and subject to risks and uncertainties. Please review the safe harbor on this slide and the extended versions included in our SEC filings. First, I want to say, I've never been more proud of this organization than I am at this time. While all of us, personally and professionally, are navigating many uncertainties and challenges, U.S. Cellular remain strong. We know that we provide an essential service to our customers and communities, and we have reacted nimbly and responsibly throughout our organization. First, to respond to stay-at-home orders currently in place throughout our footprint, and to protect our associates while continuing to care for the needs and safety of our customers, we have moved work that can be done remotely to a work-from-home environment. For example, today, about 80% of our customer service associates are working from home, and any associates in the call centers are practicing social distancing and have personal protective gear. In order to support our customers, we have strategically kept doors open in each market. Currently, about 70% of our company-owned stores are open, albeit with reduced hours and open fewer days. Stores are being physically modified and associates are given personal protective gear to protect them and our customers, too. We are limiting the number of people, associate and customers, in a store at any time and even offering curbside services. Our customer appointment scheduling tool has never been busier. Our stores have adequate inventory, and we have built redundancy to many parts of our store logistic processes. Across all facilities, stores, call centers and offices, we've instituted enhanced cleaning processes. To further support customers impacted by COVID-19, we signed the FCC's Keep America Connected Pledge, under which we agreed not to disconnect customers or charge late fees to those who are unable to pay their bills due to circumstances related to the crisis. We are also enhancing their customer experience by removing data caps on plans and eliminating fees when customers go over their data allotment. That pledge was effective from the middle of March until this month, but it's clear to us that there is still a way to go before all of our customers and communities are back on their feet. So we just made new commitments to our customers. First, we agreed to keep to a new "Keep America Connected Pledge", as we -- requested by the FCC that will cover customers in May and June. And even before that, we told our customers that we would continue to waive overage fees and remove data caps on their services until the end of July. Also to help those most in need in the communities we serve, we've made significant contributions to Boys & Girls Clubs, as they step up their important work to serve families, especially children, being impacted by the pandemic. We know network performance is a key driver to customer satisfaction. And from the very beginning of this crisis, our network has and continues to perform well. We engineer our network for peak usage periods. What we've seen is an extension of those periods into other parts of the day, with only a slight increase in the actual peak moment. Even though data usage is up from a pre-crisis levels by approximately 15% on average, our network has been able to handle the extra demand. In summary, your company is busy taking care of its customers and communities, as you would expect. Now looking forward a bit. I want you to know that even in these uncertain times, our strategy is fundamentally unchanged, and our financial foundation is solid. We are taking care of our customers by ensuring they have uninterrupted service, when and where they need it. In 2019, we launched our "Bringing Fairness to Wireless" branding campaign, rooted in values that have been core to U.S. Cellular since its inception. As we navigate this crisis right now, I'm optimistic that U.S. Cellular will continue to bring fairness to wireless to make a positive impact on our customers and communities. Before closing, I want to take this opportunity to thank Steven Campbell, who is retiring from the company next month. As many of you know, Steve has been a key leader in our organization, first as Controller, then as Executive Vice President and Chief Financial Officer. His contributions over the years have been significant. This company would not be where we are today without his many contributions, especially as manifested by his work ethic and his commitment to leadership development. As one of his students, I can truly say, he was a very good teacher. We wish him all the best in his retirement. No one deserves it more. Finally, I want to thank all of our associates for their dedication to our customers and communities. I also want to thank our shareholders and debt holders for their continuing support. Now let me turn it back to Jane.

So Ted and Ken, we do not have any questions from shareholders at this point. So Ted, if you'd like to close?

Okay. Thank you, Jane. Well, I want to thank you very much, ladies and gentlemen. And please stay safe as we look forward to our 2021 Annual Meeting, where we will be hoping that we can go back to an in-person annual meeting.

Thank you all very much.

This concludes the meeting. You may now disconnect.