Greetings, and welcome to the Telephone & Data Systems Fourth Quarter Operating Results Conference Call. At this time, all participants are in a listen-only mode. A brief question-and-answer session will follow the formal presentation. [Operator Instructions] As a reminder, this conference is being recorded. I would now like to turn the conference over to Jane McCahon, Vice President Corporate Relations at TDS. Thank you. You may now begin.

Thank you, Rob and good morning everyone, and thank you for joining us today. I want to make you all aware of the presentation we prepared to accompany our comments this morning, which you can find on the Investor Relations sections of the TDS and U.S. Cellular Web sites. With me today and offering prepared comments from TDS, Doug Shuma, Senior Vice President Finance; from U.S. Cellular, Ken Meyers, President and Chief Executive Officer; Steve Campbell, Executive Vice President and Chief Financial Officer; and from TDS Telecom, we have Dave Wittwer, President and Chief Executive Officer; and Vicki Villacrez, Vice President Finance and CFO. This call is being simultaneously webcast on the TDS and U.S. Cellular Investor Relations Web sites. Please see the Web sites for slides referred to on this call, including non-GAAP reconciliations. As a reminder, we provide guidance for both operating cash flow and adjusted EBITDA. For TDS Telecom, these are basically the same number. But, for U.S. Cellular, the adjusted EBITDA measure includes the significant contributions from the partnership, which will not be continued to highlight for investors. The information set forth in the presentation and discussed during this call contains statements about expected future events and financial results that are forward-looking and subject to risks and uncertainties. Please review the Safe Harbor paragraph in our press releases and the extended versions included in our SEC filings. Shortly after we released our earnings and before the call, TDS and U.S. Cellular filed SEC forms 8-K, including today's press releases. We plan to file our SEC Form 10-K on Wednesday, February 24th. Taking a quick look at upcoming conferences on Slide 3, we’ll be presenting at the Morgan Stanley Conference on March 2nd, Deutsche Bank on March 7th and Raymond James on March 8th. Please let us know if you’d like additional information about any of these events. And do keep in mind that TDS has an open door policy. So if you’re in the Chicago area and would like to meet members of management, the Investor Relations team will try to accommodate you, calendar’s permitting. As has been our tradition on our year-end call, we like to take a moment and recap our major accomplishments for the year just completed, as well as to set forth our strategic priorities and guidance for the coming year. To begin, I’d like to turn the call over to Doug Shuma to review TDS Corporate. Doug?

Thanks Jane. Turning to Slide 4, we continue to execute on our strategic priorities on the review of our portfolio to improve performance. During 2015, we began to reap the benefits of the significant investments we’ve been making in our businesses over the past two years. While Ken and Dave will cover these in more detail, network and IT investments at U.S. Cellular are helping them to compete more effectively and efficiently. At TDS Telecom, we are very pleased with our fiber investments and are beginning to see contributions from our cable and HMS acquisitions. We have also continued to hone our portfolio, divesting ILEC properties that don’t meet our return objectives and selling non-strategic spectrum and towers. As we think about how we allocate capital at the TDS level, we did not find any cable assets here in 2015, nor did we repurchase any TDS shares. We did however, returned value to our shareholders in the form of $61 million in dividends. And this morning we announced our 42nd consecutive annual dividend increase. U.S. Cellular repurchased $6 million of its shares. We did make some modest repurchases of TDS shares at the beginning of 2016 under our 10b5-1 plan. We’ve also been active raising money for the U.S. Cellular to fund current and future spectrum purchases, the growth in EIP and for general corporate purposes. U.S. Cellular sold $300,000 million of 7.25 senior notes in November 2015 and drew on a $225 billion bank term loan in July of 2015. Also, we intend to file a shelf registration shortly after we file our 10-Ks next week to replenish the USM debt shelf back to $500 million. This is primarily an administrative step we do not have any firm plans for additional borrowings at U.S. Cellular. Lastly, as you are all aware, bonus depreciation was renewed late in the year, resulting in approximately $65 million of cash tax savings at U.S. Cellular and approximately $95 million at consolidated TDS. And now I will turn the call over to Ken.

Good morning. Before I start, I want to address our ability to discuss the upcoming auction for 600 megahertz spectrum known as Auction 1000. Short form applications to the forward-looking portion of the auction were due on February 10th and we did file an application. As you know, this will be the most complicated spectrum auction ever conducted by the FCC. We will be watching intently as events unfold over the next several months. Including the degree to which broadcasters participate and firming up our plans accordingly. As the anti-collusion rules are now in effect, we are prohibited for speaking about it further. To be safe, we will not entertain any relating to any spectrums today. Now let’s talk about 2015, Steve will cover the financial results for both the quarter and the year in some detail following my comments. I will start with some commentary comments beginning with, I’m extraordinarily proud of what the organization accomplished through 2015. Looking back at the guidance we issued a year ago, we met or exceeded all of our targets despite a hyper competitive marketplace and a still weaker than expected economy, especially on the consumer front. We significantly beat operating cash flow guidance, even if I adjust the original guidance for the impact of the rewards point change through the third quarter and lower than targeted customer growth for the year. Also, we completed our LTE rollout and other projects while managing CapEx to levels below our guidance. Looking at customer growth, I find it interesting that despite substantial price cutting across the industry the switcher pool continues to decline. As we’ve said in the past, we will moderate our marketing spend based upon market conditions. Partially offsetting what I consider a shortfall in gross adds is our year-over-year improvement in churn.…

Good morning. I’ll begin with a few comments on customer results shown on Slide 11 of the presentation. As Ken said earlier, we grew our customer base during the fourth quarter. Our postpaid gross additions for the fourth quarter of 2015 were 240,000 compared to 302,000 a year ago, when switching activity was higher across the industry. This quarter’s gross additions increased 20% sequentially and were the highest for the year. Similar to gross additions postpaid net additions of 68,000 were down year-over-year, but they increased significantly compared to net additions achieved in the preceding three quarters, which averaged about 14,000. The increase reflected the benefit of historically low churn, which was 1.3% for the quarter, down from 1.6% last year. I’ll say more about postpaid churn in a minute. In the prepaid category, we had 7,000 net additions versus 2,000 net losses last year. Gross additions were up about 15% and churn improved to 5.4% this quarter versus 5.9% a year ago. The device mix of our postpaid gross and net additions in the fourth quarter are shown at the bottom of the chart, similar to the past few quarters, the postpaid additions were primarily data centric devices like smartphones and connected devices especially tablets. This quarter smartphones represented 55% of total gross additions. Connected devices represented 41% of postpaid gross additions and translated into 70,000 net additions. The next slide has a chart showing the trend in our postpaid churn rate over the past nine quarters. Churn peaked at 2.29% in the first quarter of 2014 and has continued on a steady downward trend since that time decreasing to 1.31% for the fourth quarter of 2015. As stated earlier, our recent gross additions have consisted primarily of data centric devices with smartphones being the largest component. Slide 13…

Thanks, Steve and good morning everyone. I’m excited to share our 2015 accomplishments and then I’ll outline our strategic priorities for 2016. We continue to see cable as a natural extension of our wireline business, the common strategy for these businesses to own the best price in the market and use that advantage to grow high margin broadband services, bundled with video and voice products. To achieve this objective, we’re continuing the integration of our cable and wireline businesses in order to take advantage of product, operational and infrastructure synergies. On Slide 22 in our wireline business, we have continued our focus on providing the most competitive broadband service and related products, which has led to growth in for both broadband and IPTV connections. Where economically feasible, fiber technology is being deployed to provide Internet speeds up to 1 gigabit per second. By the end of 2015, we had deployed fiber to the home to 21% of ILEC service addresses. Our IPTV product called TDS TV is an important offering that leverages our high speed network, improves ARPU and reduces churn through attractive bundling. In 2015, we continued rolling out IPTV to new markets. We have now launched TDS TV in 27 markets enabling 167,000 services addresses, which is roughly 23% of our total footprint. IPTV penetration increased due to strong sales in newly launched fiber markets, which utilize the fiber bill presale strategy and the rollout of abundant product in the IPTV copper markets. We are very pleased with the success of our IPTV deployments and we’ll continue to make investments this year in both fiber and copper plants to drive further penetration of IPTV. One positive side effect of the increased triple-play bundle is that it had moderated the losses of legacy voice lines. In our cable business,…

Okay, thank you, Dave, and good morning everyone. I’ll begin by making a few comments on our consolidated results, starting on Slide 24. First, on the wireline side, IPTV and broadband services are helping to replace the continuing declines in wholesale and commercial revenues. Second, cable operations remained flat year-over-year. There are no acquisition impacts this quarter. And third, HMS had another quarter showing meaningful improvement. Total revenues increased 14% due to both higher equipment sales and service revenues. Adjusted EBITDA on a consolidated basis declined 8% year-over-year to 71 million. Consistent with past quarters and as expected, wireline adjusted EBITDA decreased as wholesale and commercial revenues continued to decline and benefits from cost reductions slowed. Contributions from HMS partially offset this decline. Looking at wireline results on Slide 25, residential revenues were impacted by ILEC divestitures and onetime adjustments which caused the decline of 1%. Without those adjustments, residential revenues would have increased 4% as growth in broadband and IPTV more than offset the decline in legacy voice services. The year-over-year decrease in ILEC residential voice connections has held at about 3% over the past six quarters excluding divestitures. Commercial revenues decreased 4% as declines from legacy voice and broadband connections were greater than the growth in managed IP connections. Wholesale revenues decreased this quarter in line with our expectations. On a combined basis, total wireline revenues declined 4% to 174 million. Wireline cash expenses increased 2% as increases in employee related expenses and IPTV content cost outpaced the reduced cost of provisioning legacy services. As a result, adjusted EBITDA decreased 8 million or 13%. Slide 26, looking at residential broadband customers are continuing to choose higher speeds in our ILEC markets, with 47% choosing speeds of 10 megabits or greater and 16% choosing speeds of 28 megabits or…

Thanks Vicki. And operator, we’re ready for questions.

Thank you. At this time, we’ll be conducting a question-and-answer session [Operator Instructions]. Our first question is coming from the line of Phil Cusick with JPMorgan. Please go ahead with your question.

Hi guys sorry it’s [Forrest] [indiscernible] for Phil Cusick. I was just curious about your plans for growing gross adds going forward how do you plan to differentiate yourselves from the national carriers and attract switches going forward? Thanks.

So as I think I said [Forrest] in the comments we’re doing a lot of things. One is continuing to focus on those mid-sized and smaller businesses in our markets where because of where we are positioned and the service that we could offer them I think we can differentiate there. And that leads to their employee base, number one. Number two, continuing to evolve how we look at our stores as retail destination spots driving more traffic into them with retailing type activities. Two of these larger efforts this year that are a little bit difficult with the approach we’ve taken so far. And given the progress that we’ve seen in churn, interesting enough especially we’re right in the cusp of where small changes in gross adds make meaningful difference in customer growth.

And if I could ask just one more you mentioned a longer upgrade cycle. Can you kind of elaborate on that I mean do you think that is a secular issue, or is it just the question iPhone timing? Thanks.

No, I think it's from what we’ve seen so far and I’d have to be -- I am the first to tell you we are younger in the curve than others and so we’re starting to see in other places more than we’re seeing it here. But we’ve got a large part of our customer base is simply holding onto their phone longer. So, even if they are old-old what I would call the contract period. Other things that -- given the pure price of the phone you are seeing terms for the equipment installment plan elongating in order to help offset curve or manage that monthly cost of phone. Because these phones, some of these phones, are now are crossing the $700 barrier and that’s a pretty substantial item for a family when you start adding two and three and four lines to them. So I am not surprised by it but I am not yet in a position to say where does it kind of, bottom-up.

Next question, please.

Thank you. Our next question is from the line of Rick Prentiss with Raymond James. Please go ahead with your question.

I want to ask one question with multiple parts as always. First to clear up some confusion that seemed to come out in the marketplace today, your fourth quarter EBITDA of 178 we were looking for 103 I think consensus was about 105 million and on 2016 guidance you’re 725 to 850 suggests a midpoint around 788. We were looking for 758 in consensus I think it is 750. The first question is just can you confirm that those are descent consensus numbers for what 4Q and ’16 guidance are compared to what you just gave?

Yes, Rick those are exactly our numbers.

Then the second part of the question is and I think Ken you alluded to it that the guidance does assume that there is a focus on growing the business and you talked about the gross adds on the last question here. Can you give us a little color when you said the upper portion if there is slower growth, the lower portion if there is better growth? Last year when we think about your guidance you continually updated the guidance throughout the year, pretty meaningfully initial EBITDA 580 to 630 to 650 to 750, and you almost hit 800 when you adjust out the rewards program. Just trying to gauge how much should we think you’ve baked into the range which is fairly tight for what the surprise on the upside or surprise on the downside for subscriber adds?

You said multiple parts you didn’t tell me it would be complicated too. Clearly this year growth was lower than we had targeted and we took that into account and looking at our guidance for this year. There isn’t anything baked into our plans that says boy suddenly we go back four years in terms of growth and we are pop them out 1.1 million-1.2 million gross adds. That isn’t what it is baked on at all. But there is a range that is particularly pronounced when you have these success-based promotions, because if you don’t get the gross add that is a whole internal clock that isn’t incurred and flows right to the bottom-line. So as we tried to be real reasonable in our targets for growth our assumptions are we will be able to drive for the year I think the word Steve used in his comments was we were looking for modest growth, okay, but if you -- our target is to grow, so our numbers are based upon us achieving that growth and if we do want to spend some more dollars in marketing that are in plans that are designed to be profitable, we aren’t trying to just add numbers to add numbers. But if those, so the switcher pool stays shallow as it has recently been when we aren’t going to see those incremental marketing spends and they’re going to fall back to the bottom-line.

That makes sense. And then the third part of the question I tried I apologize, but there is a lot of moving pieces. The EIP plans are an important part of the market these days. Can you update us as far as what you saw as far as take rates for EIP in the fourth quarter what you’re expecting that should look like I ’16 guidance, but it does move moneys around from service, the equipment and the accounting and the interest income?

Yes, boy a couple of things there too. So last year, EIP was actually at a smaller take rate than we had seen in other carriers throughout the year. And part of that is our own marketing strategy, which is we want to have the rate plans in the products and services that meet the needs of our customers. So therefore, we will continue with both subsidized and EIP plans with each set of plans designed to meet the needs of those customer groups and to be profitable for us. It is not a matter of us trying to push one plan versus the other. Having said that, last year Q4 up 45% of our activations or on EIP that was higher than prior quarters and reflected kind of the first time that our agents channel had full access to EIP plans, now so saw a little bit of improvement in the holiday in that product line a little higher take rate because it is just not an improvement but a higher take rate in that, with that plan. Now starting off this year, interestingly we’re seeing a significant step up in the take rate that of EIP. I don’t have enough insight into why there isn’t anything that is dramatically different about the construct of our plans or anything else. And in the first time kind of true, I don’t know whether that is a seasonal impact in the past, we always talked about prepaid market in the first couple of months of the year, and people got their income tax returns. I don’t know if this is related to that, but right now, we are running significantly higher than the 45%, we saw in the fourth quarter of last year.

Okay. That helps a lot and I appreciate again clearing off the confusion on what your numbers were versus consensus. Thanks.

Thank you. Our next question comes from the line of Sergey Dluzhevskiy with Gabelli. Please go ahead with your questions.

A couple of questions, so first one I think for Doug so you didn’t repurchase any shares in the fourth quarter but I think you mentioned that you did purchase some in the beginning of this year. Could you disclose in shares or in dollars, what was the amount of the repurchase?

Yes. And it is modest Sergey we’re not out in the market buying hundreds of millions of dollars of shares. But I’ve mentioned that just because we obviously we’re out of the market entirely last year and we did make some share repurchases this year so.

Okay. Is it going to be disclosed in the 10-K or do we just have to wait until the…

March of 2016 items, so you’ll see in them.

Okay. In terms of, the second question is for Ken and Steve. So you guys talked obviously about different puts and takes in respect to EBITDA for 2016 and I think your longer term target is to get EBITDA margin of somewhere in 20%-25% range. So given the growing competitive environment do you see a path to those margins I guess if the environment doesn’t change what else could you guys do to improve margins overtime?

Sergey given pricing environment that we’re sitting in right now to talk about a pay out beyond what we have talked about in ’16 is surely speculative more speculative I mean I want to stick my neck out on. I mean right now we continue to focus on really improving all aspects of the business performance whether it’d be our investment levels in the network and really getting much sharper in there to our cost structure to improving the effectiveness of our storage. So target still is mid 20s in terms of making some of the returns work out the way I think they need to work out. But right now the focus is on just the competitive positioning in ’16.

And my last question is for Dave and Vicki. So in regards to sounds like the regulatory dynamics on the ILEC front particularly as it relates to rate of return carriers. So, you briefly mentioned this in your prepared comments. But I was just wondering what your general thoughts are on a cam what are your basic expectations as far as that mechanism and also the timing of this process?

Overall as I gave guidance for the year in our regulatory impact we do expect wholesale and regulatory declines of approximately 8 million to 10 million in 2016. With respect to the CAS II reform and the impact on the rate of return carriers we are optimistic on what we believe is the current framework for the FCC’s reform effort. Our teams have been involved both independently and with financial and trade associations and we’ve met with five commissioner officers at the FCC advocating our position which is to ensure that we will receive or there will be additional funding to help us improve our broadband delivery in the most rural areas in our footprint. So I can’t say what that change is going to look like yet till we see the details of the order. But our guidance does not include any impacts that could result from the FCC’s decision. And it may require some upfront level of capital spending in 2016 we’ll let you know more.

And what are your expectations in terms of timing of the order and it sounds like…

We expect that very soon.

Operator, we have time for one more question.

Yes. That question is coming from the line of Barry Sine with Drexel Hamilton. Please go ahead with your question.

And I might sneak in more than one if you don’t mind. First question I guess Sunday is coming out with the new S7 reportedly. I know historically you have had a heavier penetration of Samsung devices. Could you update us, is that still the case as have iPhones caught up? And is there anything in particular that you’d be looking at with this refresh cycle that might impact near-term results?

We continue to see nice growth in the Apple product it is running just under 40% of our well kind of handsets. But Samsung is our number one it has been our number one. I intend to be there Sunday when they roll out that new product and I am looking forward with great excitement to see what they’re doing next.

And any impact that may have on -- what typical impact does that have when Samsung comes up with a new device in your quarterly results?

They are on a cycle where about the first quarter of each year is when they have seen that when gets launched end of first quarter beginning of the second quarter, their timing is the same this year. So I don’t think I am not expecting to see a significant year-over-year change because of that result that launch.

Okay…

…I’m hopeful but I expect.

Next question in terms of wireless competition, I need a number of comments on that. Can you give any sense of what you’re seeing in terms of port-ins port-outs you talked about winning back some customers, who are you winning customers from and what part of your service offering is attractive and the price is upper quality?

The program studies are always amazing. What you will see is that we win from and lose to whoever our biggest largest market share competitor is in our market. We do not see substantial changes where our market share is being taken suddenly by new entrant or anything like that. When we look at the reasons, the reasons that we win customers turn out to be number one, network quality and the reason that we lose the number one is network quality. Which makes you wonder the value of the researching spend so much time and energy getting, but it is better quality and pricing one and two typically on and coming in and going out.

Okay. My last question more on the TDS Telecom side around M&A, just want to get an update in terms of your sense of what you’d be looking for doing in 2016. Sounds like you’re still interested in cable HMS with only $1 million in EBITDA in the quarter. Sounds like you would still be on hold waiting for results to perk up a little bit there and telco. Are there any live prospects to divest additional small ILEC properties over the near-term?

Well, I think it’s fair to -- we typically don’t comment on any pending transactions. We’re obviously focused on finding ways to grow the business. As we said, we did not have a cable acquisition in 2015 but we continue to be opportunistic, we’re booking for all kinds of different options for ways to grow the business including no cable acquisitions things that could help complement our hosted and managed service business are certainly options. And I think you’re going to see as we made some very small divestitures of our ILEC markets, those two could be opportunistic, but there is not a wholesale plan in place.

Okay. Thank you very much.

Thank you folks for your time this morning and we’ll be in touch doing follow-up calls. Let me know if you have further questions. Thanks so much.

This concludes today’s teleconference. Thank you for your participation. You may now disconnect your lines at this time.