Good morning. My name is Arnica and I will be your conference operator today. At this time I would like to welcome everyone to the third quarter results for Telephone & Data Systems and US Cellar conference call. All lines have been placed on mute to prevent background noise. After the speakers’ remarks there will be a question-and-answer session. (Operator Instructions) Ms. McCahon, you may begin you conference.

Thank you Arnica and good morning everyone. For those of you I haven’t met yet. I’m the new Vice President of Corporate Relations taking over for Mark Steinkrauss. I look forward to meeting and working with you all. With me today in offering prepared comments are Ken Meyers, Executive Vice President and CFO at TDS; Steve Campbell, Executive Vice President, Finance, CFO and Treasurer at U.S. Cellular; Jay Ellison, Executive VP and COO at U.S. Cellular; and Bill Megan, Executive VP, Finance and CFO, TDS Telecom also joining us today is Alan Ferber the VP Sales Operations and Chief Marketing Officer at U.S. Cellular. Please refer to our press releases this morning for replay information. Also keep in mind that the purpose of today’s call is to discuss the operating and financial results for companies any other information contained in today’s press release, if you have other questions unrelated to the operating and financial results I’d be pleased to respond after the call and available for the reminder of the week in my office. My contact information is on the release. For many years TDS as maintained an open door policy and I support it wholeheartedly. If you are the Chicago area and would like to meet with members of management from U.S. Cellular, TDS or TDS telecom Mattson the Investor Relations team will try to accommodate you calendars permitting. This call is being simultaneously webcast on the Investor Relations section about the TDA and U.S. Cellular website. We believe our website affective way to provide information to the investment community and will continue to look for addition ways to take advantage of this powerful channel. Some information during this call and subsequent Q-and-A period contain statements about expected future events and financial results that are forward looking and subject…

Thank you, Jane. Good morning. For those of you who have may joined a little late or were not paying attention that beginning of the call that was Jane McCahon, the company’s Vice President of Corporate relations. Mark Steinkrauss who most of you know, has decided to spend more time on Cape Cod and less time traveling with me. He is retiring at year end. In the meantime, he will be working with Jane to ensure a smooth transition. I want to take this opportunity to thank Mark for years of service at TDS. Over the last 12 years, I learned a great deal from Mark and benefited from his council. He served the company and our investors well. Since Mark will be around until year end I encourage his friends to drop him a line and join me in wishing Mark all the best in his retirement and welcoming Jane. Her contact information is on the press release for anyone with follow up questions after the call is over. Turning back to the more formal business of the call I have a few comments to make about the quarter before turning the call over to the rest of the team who will cover the operating results. We will then take questions at the end of prepared comments. TDA operating revenues were $1.3 billion, down 3%, principally due to expected and previously discussed loss of inbound roaming revenue at U.S. Cellular as well as continuation in the decline of physical access lines at TDS telecom. However gross and net additions at U.S. Cellular have improved market lead from last quarter and data revenues continue to grow rapidly at both U.S. Cellular and TDS telecom to select despite considerable economic and competitive pressures. As our guidance last quarter indicated operating income…

Thanks Ken for such kind word. Good morning everyone. Let me begin by saying a few words about the overall business environment. From our perspective, competition in the wireless market during the third quarter was intense in both the post pay and prepaid segments with battles fought on handsets and service pricing. The exclusive handsets offered by some of the larger carriers remained very popular with consumers. We saw more aggressive pricing by the unlimited prepaid carriers in the third quarter. However, unlike in the second quarter, there were no major launches by the prepaid carriers in any of our markets. On a sequential quarter basis, we saw a decline in net poured out especially to lower price carriers. The current state of the economy, continue to impact our customers and our operations. The economy seems to have stabilized to some extend during the third quarter, but the recovery is expected to be slow and painful nonetheless. Ongoing job losses and tight credit remained very real concerns for consumers. Although they are willing to spend in these difficult economic times when there is perceived value they clearly are considering price much more prominently in their decision-making. Despite the competitive and economic pressures, we achieved improved subscriber results compared to the second quarter. On the last call, we discussed steps we were taking to respond competitively, including several postpaid promotional plans and programs and new unlimited prepaid plans aimed at both adding and retaining customers. In the third quarter, we had a very strong response to new promotions and plans with almost 900,000 new and existing postpaid customers taking advantage of these offers. Many of our existing customers have entered into new contracts with us in connection with these offers and this will benefit us positively in the long run to…

Thanks Jay. Beginning with revenues, service revenues for the quarter were $985 million up 1% sequentially and down 3% year-over-year. However on the year-over-year comparison, after adjustment for decline in roaming revenues, resulting primarily from the Verizon-Alltel combination service revenues were essentially flat. Inbound roaming revenues were $69 million down $25 million or 26%. Going forward we expect additional but less significant year-over-year reductions in the inbound roaming revenues from Verizon. Our retail service ARPU grew $47.02 up $0.05 year-over-year, as continuing strong growth in data revenues offset decline in voice revenues. Data revenues were $174 million, up 34% year-over-year and ETC revenues for the quarter were $40 million, compared to $38 million last year. As expected, operating income declined this quarter to $58 million. The decline was due to the loss of high margin inbound roaming revenues, higher equipment and other costs acquiring and serving customers and spending on the multiyear initiatives that Jay mentioned earlier. In a little more detail, the net loss on equipment for the quarter was $116 million up from $108 million in the prior year. This has increase reflected a 6% increase if the number of hand sets sold, which was driven by solid growth in retail customer additions and renewals and increase in the net subsidy per units sold. Sales of smartphones and other premium data intensive devices continue to increase, which in turn will continue to drive growth in data revenues. Sales of these units nearly quadrupled year-over-year and expect that trend to continue as we further expand our 3G network, other cash operating expenses consisting of system operations and selling general administrative increased $27 million or 4% year-over-year. System operations expenses were up about $8 million or 4% driven in large part by an increase in the number sell sites and…

Thank you, Steve and Jay. Good morning everyone. Telecom results improved modestly from the second quarter with the trend in revenues and expenses improving in excess line loss stabilizing. In addition as we have said broadband is a cornerstone of our strategy and continued to have strong growth in our high speed data subscriber base. For the quarter TDS telecom combined ILEC and CLEC revenues declined 4.6%. The decline was 2% in the ILEC and 10% in the CLEC. In the ILEC we had strong growth in data revenues that would as not been enough to offset the loss in voice and data, voice and network access revenues. Voice revenues declined inline with our physical access line loss. The decrease in networking access revenues is driven by lower minutes of use on our network and lower access rates. The decline in the CLEC is driven by decision to limit investment in new residential customers and therefore we expect that trend to continue. As part of our efforts to mitigate the loss in physical access line, while at the same time responding to customers needs to economize we rolled out new voice packages called star packages, which include additional features in long distance minutes giving customers a lot of flexibility and matching service head to their needs and budget. We began offering these new packages in January and had 86,000 customers on these plans at the end of September. We now have 47% of our residential customers on voice packages up 12% from September of 2008. As I mentioned the strong positive in the quarter was the increase in ILEC data revenues which grew 14%. Our promotional campaigns for high speed data added 5000 net subscribers sequentially; gross ads remain strong at 15,400 for the quarter. Our high speed data penetration…

Thanks, Bill. Arnica, we are ready for questions.

(Operator Instructions) Your first question comes from Rick Prentiss - Raymond James.

First question, on the U.S. Cellular side, I missed some of the comments on LTE, can you mention again the technical trial exactly when you would start and also what are your early indications on what kind of the costs might be to roll out in LTE network. What do you have to do to your network?

I’ll give you a little flavor some of that, then Steve can jump in on. We mentioned a trial beginning late this year. So most likely based on timelines right now and evaluations we’re doing relative to infrastructure providers will be in the December timeframe and pure technical trial internal no customers or anything along those lines. It’s also probably way too early for us to start talking about cost on LTE, until we determine a number of things from the trial and then our rollout schedule and things along those lines as well as working with handset provider. The only think I’d add is I think that we would expect that technical trial to run probably through middle of next year. So I think once that’s complete we’ll have a much better sense of cost to deploy.

Probably not to put words in your mouth, but as you look at 2010, probably not a lot of impact on the CapEx side from a LTE potential?

No, I have not in 2010. I think we’d be looking beyond that.

Then you mentioned several times obviously, the smartphones, how important they are the handset lineup, what percent of your base and of your third quarter gross ads were smartphone Air Cards etc.?

I don’t think we have the smartcard broken down. I could give you that…

In the Q3, smartphones and the premium phone, a lot of the internet stuff that almost 22% of gross ads. With really significant quarter-over-quarter jump in that what we’re calling our premium category.

I think I mentioned, Rick that sales of those smartphones and premium devices are up almost 4X year-over-year.

Then something else you mentioned, I think Jay, in your comments was the ads increased month-to-month, it wasn’t just three months. I think you said than four months, is that to imply October or going back to June?

That was actually a trend beginning in June. We saw an up tick in June and each from out there continues.

Then the final question I’ve got for you, as you look we had a mixture of companies reporting so far this year, some giving guidance, some concerned on guidance. As you lookout to your kind of normal practice of giving guidance, given uncertain economic environment, the uncertain competitive environment, what are your thoughts as far as how good your visibility is and when you would be able to share 2010 thoughts with us?

What we have done consistently over the last few years is talk about next year 2010, when we release our year end numbers, which is typically late January, early February. At this point in time the company doesn’t have any plans to change its practice of giving annual guidance. Though clearly, that is one of the investor relations on going debates in terms of whether companies give guidance on not, it is we think or I think. That’s given the complexity of our company TDS with our two businesses that giving annual guidance helps people understand, where we’re going, what our plans are and at this point in time expect to continue that.

Your next question comes from Shawn - Morgan Stanley.

I was just curious, if you can discuss more about your handset pipe line, do you have Android or Palm OS handset coming in?

I want to introduce you Alan Ferber, he’s been working that part of our strategy.

We have currently working on our Android strategy. Probably, we’ll not be launching any Android phones before the middle of next year. Currently, we not have any plans for our Palm OS device.

Also can you discuss a little bit more about your roaming position and are you comfortable with where you are at today?

I’m not sure what you mean by, “Are we comfortable?”

As far as securing partners?

Yes, I think we’re comfortable with that. I think we have great roaming partners now. We’re obviously working to ensure that we have the kind of EVDO roaming capability that we’re going to need going forward, but I think we’re pretty happy with the relationships that we have.

Just to clarify on that, we have long term agreements in place that give us the capability for roaming for several years out in to the future.

Your next question comes from Phil Cusick - Macquarie.

First of all, on the gross outside you talked about being up sequentially, that’s great to see. Ask you to help me, what you think is the sort of two drivers their you had a new competitor come in to your market in the spring and you talked about that being a big issue early on was it really that falling away or do you think its the impact of your new promotions and handsets, how do sort of shift the mix there?

I really think we’ve just seen very positive results significantly from the introduction of our rate plans both the national single and the family plans that we introduced starting in the April, May timeframe and then continue to rollout. We have also introduced as I said, unlimited prepaid plan not only in markets where we had those lower priced carriers come in to marketplace. Across the enterprise and all of our markets we have seen a response to that and then additionally we’ve seen I mentioned in my comments, we’ve seen our net port outs decline across the board as well as we have seen the return in some of our larger major metros from some of those lower priced carriers where the quality of coverage was not sufficient and satisfactory to consumer. So, it’s really all of those combined and again even our current customers taking advantage, but on the gross side was national promotion, handsets were a part of it with the LG Bliss, the Tritan and re-launch of the Banter, but I think a lot was driven by the price plans we introduced both on the prepaid and postpaid side.

I would say as Jay said it’s all of those factors, and there is a noticeable trend down in the port outs in this last quarter. Phil as we talked we often seen when he we get a competitor coming in to market like we have leap in February that you see an up tick, but then as Jay said overtime we see those customers actually coming back.

I mean that’s great to see. If I can sort of paraphrase here, it seems like you seen incremental competition at the low end and high end with handsets and your strategy has been to respond both with national pricing and with better handsets, makes a little since. The net results seem to be margins jumped really all over the place over the last sort of four quarters. Can you give us an idea of should things start to settle out here in whether it’s the low to mid 20s, or as gross ads come back you need to be working for that, should we thinking about 21% EBITDA margin going forward or are there cost cuts and things like that, that can offset maybe those costs.

I think the guidance that we’ve firmed today, I think gives you the best idea of our thinking about margins certainly for this year. I mentioned and I re-enforce it that we are going to stay competitive. We’re going to protect the base, we’re going to continue to grow and that certainly carries costs with it. Looking, further out as Ken said we wouldn’t be providing guidance on ‘10 until next year. The only other thing I would say, Phil is we re-enforced a number of times that we are investing in this business right now for the long haul. So, I don’t think that you should expect over the next couple of quarters to see any real significant expansion in the margin from what you are seeing in the current guidance.

So one more and I saved this for last because I don’t know that I’m going to get much out of it, but you have a phenomenal balance sheet and you got a cash flow and there are some competitors out there who if you wanted own them could make you much bigger in the wireless space, it would be a big of course a big change in your footprint, but their CDMA players would it make sense to get bigger in this business if you are really in it for the long haul or do you think being a regional player with roaming deals makes more sense for your situation long term?

I’m going to lean in to that one a little bit. You probably didn’t expect that. The model that we operate under in terms of the customer satisfaction strategy delivered through a rather unique culture is something that would be much harder to do if we were to double the company size overnight. What would happen is, we’d run a huge risk of diluting that culture and therefore moving off of our strategy. So, while I never say, never, I think if you look back at the company’s history and how we’ve grown it. We grown it by doing small and mid size acquisitions, not doing large public market deals.

Next question comes from Kevin Roe - Roe Equity Research.

A couple of questions, first the retention initiative you guys have talked about that looks like it’s getting good traction. Can you talk about the cost there and how much of the margin pressure we saw this quarter at U.S. Cellular from those retention initiatives? Maybe give some color on, what is the customer getting now versus previously in those retention incentives. Secondly, the overage protection, is that something that customers have to proactively opt into? Can you help us think about how that may impact ARPU going forward?

I’ll start Kevin and then Steve or Alan may jump in on it. On overage protection, it will have to opt in for that program and it will protect them on both voice and text packages on overage. We think that the impact ARPU is fairly neutral, because we also have the opportunity, if the customer historically is hitting that package we’re going to have the opportunity to move them up in rate plan. We’ve experienced very similar type of customer behaviors when we introduced complete product and pricing portfolios. So we think that will be fairly revenue neutral on that particular program. As it relates to the retention program themselves that you referenced, we had a number of things. As I mentioned, it’s just the introduction of some of the national rate plans that we put there with the value that we build into them, probably as $900,000, I would say 75% to 80% of those were current customers renewing our contracting getting on to those rate plans. So would see some future churn benefit with those and those customers are renewing their contracts as well. We also had a number of what we would call, early upgrade programs with that wanted to move to a premium or smartphone device. Earlier in the contract and they normally may have been aloud that comes also with increased ARPU as well. We had very good response to those programs, so those two were really the significant drivers within our retention program. We had a few other tools in the bags of customer relations specialist say tools to help people give rough economic times with some temporary price of their bill. In additionally, we have what we call the triple area time promotion on current customers could ask nice mobile to mobile income if one of those were on, they could add that third quarter one as well. Those were basically for the customer base.

Lastly a question for ken, thanks for comment on the M&A. Since sticking with that big picture, how do you look at, what’s the latest thinking on the structure of TDS U.S. Cellular? Does it still makes sense to have them as separately traded stocks, separate companies just your latest thoughts would be helpful.

Unchanged from where the company was two years ago when we started doing our repurchasing of TDS shares, when we said we were not going forward with any buy in of U.S. Cellular stuff. It’s a nice to have does not drive compelling cost savings or anything else and so of the amount of consideration that would be required at the time was too great to get the deal done was picked up. It’s not a strategic comparative.

Your final question comes from Rick Prentiss - Raymond James

On the circle back on Kevin comments there and Phil when you look at your balance sheet, obviously very strong balance sheet Ken that you created there, thanks for giving us the extra color on the $136 million under tuck-way in CD’s as you think about the board possibly considering another stock buy back at the TDS level how do you think about leverage, how much cash you want to keep on hand on the balance sheet to run the business. Just kind of held you look at that putting your balance sheet to work.

Rick one that we are quite frankly spending a lot of time on right now. Two years ago we had looked at this and thinking of the consolidated entity we talked about a business that we thought should have $250 million of cash that was readily available its kind of our operating model and that was before we all went through the complete meltdown over the last couple of years. From a strategic standpoint as we think about our balance sheet, and we think about the lessens learned over the last year where we all thought we had revolvers that were immediately available until we heard bankers asking us not to use them, we probably think about running a business that has $400 million of cash that is available. So that kind of our starting point. Now we obviously aren’t there yet. We got, we are much richer than that at this point in time and we are looking at a lot of different opportunities both within our business as well as doing different things by balance sheet. As I said we’ll talk about some of those with the board later this month.

That seems like we asked it for the last four or five years, universal service fund, new administration and power now what are your thoughts as on both the wireless and the land line side about what you guys are hearing in the corridors of Washington about USF.

What we are hearing, Rick, is that we expect that the new commission will take up that issue earnest later probably sometime in to 2010, but frankly what we are hearing is that their primary area focus is on the national broadband plan. So while we are watchful and in fact it’s area given the amount of DTC revenue that we get, we expect them to take it up but it doesn’t seem to be the hottest issue on their list now.

I would say from the wire line perspective we do not anticipate significant shifts inline with Steve, certainly not of magnitude that was under consideration with intercarrier compensation in US reform last year. This year as Steve mentioned administration is focused on the broadband as net neutrality as policy priorities so we don’t expect to see such potentially transformational changes implemented, but as you look at our income, as we talked about in the past we do expect to see a downward trend in high cost loop as a component of USF and that’s a function of how high cost loop is calculated and what the distribution is so we expect that trend to continue.

At this time there are no further questions.

Thank you all for your participation today and look forward to talking to you soon.

This concludes today’s conference call you may now disconnect.