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. [Operator Instructions] It is now my pleasure to turn today's meeting over to Jane McCahon, Corporate Secretary of United States Cellular Corporation. Ms. McCahon, the floor is yours.

Thank you very much, Tiffany, and good morning, everyone. I want to welcome you to the virtual webcast of the 2021 Annual Meeting of Shareholders of U.S. Cellular. We believe in engaging with our shareholders, and we 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 will be brought to our proxy vote page, where you could 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 to 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 those questions and provide answers to those we feel pertinent to the meeting after LT Therivel's business update. And now it's my pleasure to turn the call over to Ted Carlson, Chairman of U.S. Cellular. Ted?

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 this meeting. At this time, I call the meeting to order. I would like to thank everyone on the webcast for participating in this meeting. It is now 8:33 a.m. on May 18, 2021, 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; Deirdre C. Drake; Harry J. Harczak, Jr.; Michael S. Irizarry; Gregory P. Josefowicz; Peter L. Sereda; Cecelia D. Stewart; and Laurent C. Therivel. The notice of annual meeting was distributed on April 6, 2021. We have appointed Jeff Seiders of Computershare Trust Company as inspector of election, and I have 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 19, 2020. The secretary has copies of these documents if any shareholder would like to contact her. The Board of Directors has set March 23, 2021, as the record date for this shareholder's 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 involving a vote of shareholders or 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; Deirdre C. Drake; Harry J. Harczak, Jr.; Michael S. Irizarry; Peter L. Sereda; and Laurent C. Therivel for election as directors by the holder of Series A common shares. Deirdre C. Drake is joining the Board to fill the vacancy that resulted from Kurt B. Thaus' retirement from the Board. We want to thank Kurt Thaus for his exemplary service on the board. We also welcome Deirdre Drake and look forward to working with her to continue to provide outstanding service to our customers and build value for our shareholders. The Board of Directors unanimously recommends a vote for each of the nominees for election of 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 2021. 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 one group. The Board of Directors unanimously recommends a vote for this proposal. Now it is now 8:39 in the morning on May 18, 2021, 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. 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 2022 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. Since there is no further business to come before this meeting, the meeting is adjourned. And I would now like to ask Laurent C. Therivel, President and CEO of U.S. Cellular, to provide a brief business update. LT?

Thanks, Ted. Good morning, and thank you, everyone, for your time today. This has been an unprecedented year for our company, for our industry and for our country. Challenges of 2020 have highlighted the critical importance of connectivity in all of our lives. We're very proud of how we continue to connect people to their loved ones, help students learn remotely, enabled businesses to stay connected to their shareholders and much more. Our purpose is and has always been to keep our customers connected to the people and places that matter most to them. We are inspired by our team overcame significant challenges to continue to deliver on that mission. We saw a significant increased demand in our network. We continue to deliver an award-winning experience while remaining on schedule with our network modernization and 5G program. We saw substantial declines in store traffic, but still succeeded in adding new subscribers and producing strong financial results. Operations were tested like never before, yet we ensured the health and safety of our customers and employees, while continuing to deliver with excellence. Now moving forward, we're focused on a strategy to drive revenue growth and increase our return on capital over time. Connecting our customers with the highest quality network is the foundation of our value proposition. Network performance remains a key driver of customer satisfaction and a hallmark of our competitive position. U.S. Cellular is continuing our network modernization program to increase capacity and deploy technologies and enable 5G. We hit a major milestone this year with our partners, Qualcomm Technologies, Ericsson and Inseego. As we successfully achieved an extended range 5G millimeter wave data session at a distance of 7 kilometers, the furthest 5G millimeter wave fixed wireless access connection in the United States, with sustained average downlink speeds of approximately 1 gigabit per second, sustained average uplink speeds of approximately 55 megabits per second, an instantaneous peak downlink speeds recorded at greater than 2 gigabits per second. This is a huge step forward in our ability to connect our rural and underserved customers. Operationally, we're bringing an intense focus on growth. Many of these growth opportunities can be addressed by building on the good foundations we already have, a talented team, a customer-focused culture, an award-winning network, strong balance sheet and valuable tower and spectrum positions. We have an opportunity to grow market share through customer life cycle management and personalized sales and retention approaches. We've adopted a regional model to further enable a community-by-community go-to-market approach and drive a deeper focus on customers. In the B2B space, U.S. Cellular is placing an emphasis on new opportunities and ramping up sales capacity to better serve our enterprise and government customers. We're also exploring the market opportunity for high-speed home Internet products using millimeter wave spectrum. We're currently conducting trials to better understand demand and the market opportunities for these products among our customer base. Finally, we're ramping up our efforts to create an outstanding digital experience for customers, increasing online transactions and encouraging the use of self-service tools. Another pillar of our overall strategy is striving for operational efficiency that leads to better returns on capital. An important part of increasing our return on capital over time is maintain an expense discipline through operational efficiency. We've reenergized our program to realize efficiencies in operating costs and capital expenditures. In addition to investments in our network, we're continuously advocating for support from regulators and partners in the industry to help bridge the digital divide. U.S. Cellular was built on the foundation of bringing connectivity to the underserved. Our advocacy is focused in several areas: continued technology leadership for the U.S. and 5G, the need to increase affordability and accessibility of wireless solutions in rural areas and the expansion of access to low and mid-band spectrum. In addition to modernizing our network and developing better wireless solutions for our rural customers, U.S. Cellular is also helping students to learn from home. Last year, we launched a learning hub that leverages a variety of resources we've assembled from industry relationships and experts within our company. These resources include free tutoring sessions and access to learning from home tips. These efforts continue to support our long-term goal to bridge the digital divide across America. U.S. Cellular continued its modernization of its brand with a new logo introduced in 2020 and a new brand image launched in April 2021. America's locally grown wireless leans into our strong local community presence, local network expertise, most importantly is rooted in the vision of LeRoy Carlson, our TDS and U.S. Cellular founder. This campaign celebrates how we've grown by starting local and staying loyal to the people and the communities that we serve. We're able to celebrate 2020 and approach 2021 with optimism because of our associates and their flexibility, resilience and hard work in navigating the ups and downs of a very challenging environment. Our team rose to the challenges and surpassed expectations and we're inspired daily by their creativity and their commitment to our customers. And with sincere gratitude, we thank them. Finally, I also want to thank our shareholders and our debt holders for their continued support. Jane, do we have any questions to answer from the webcast?

LT, we do not have any questions at this time. So Ted, I'll turn it over to you.

Yes. Well, thank you, Jane, and LT, thank you. And thank you very much, ladies and gentlemen, and please do stay safe. We look forward to our 2022 annual meeting, where we are hoping that we can go back to an in-person annual meeting.

And operator, that concludes our meeting for today.

Thank you. This concludes the meeting. You may now disconnect.